<p>New apartment supply has become increasingly constrained across <a href="https://www.apartments.com.au/developments/parramatta-nsw-2150">Parramatta</a> in recent years, with fewer projects progressing through to completion as development conditions have become more challenging.</p>

<p>It makes <a href="https://www.apartments.com.au/developers/novm">NOVM</a>'s 2021-completed <a href="https://www.apartments.com.au/buildings/the-lennox-parramatta-12-phillip-street-parramatta-nsw-2150">The Lennox</a> one of the most recently completed residential towers on the Parramatta River, and among the newest apartment developments in Sydney's second CBD.</p>

<p>With the project largely completed before the sharp escalation in construction costs and inflation following the pandemic, The Lennox is now offering pricing that would be difficult to replicate in a comparable new development in Parramatta today, or across much of Western Sydney.</p>

<p>The majority of the 413 apartments at The Lennox sold before and shortly after completion. A limited release of the remaining apartments has recently been brought to market by capital partner <a href="https://www.apartments.com.au/project-marketer/equitifund-group">Equitifund</a>, with entry-level pricing from $700,000 and two-bedroom apartments available from under $1 million.</p>

<p>Rising above the Parramatta River at 12 Phillip Street, The Lennox comprises one, two, three and four-bedroom apartments, appealing to first home buyers, young professionals, families, downsizers and interstate investors seeking a completed apartment in one of Australia's fastest-growing economic centres.</p>

<p>[smartcode_project:default project_id=5743 project_image_fid=372394]</p>

<p>Rather than positioning Parramatta as an alternative to Sydney's CBD, Equitifund believes the city has reached a point where it stands on its own merits.</p>

<p>"Parramatta is no longer simply an alternative to Sydney CBD, it's becoming a destination in its own right," Equitifund Executive Chairman Greg Huxley said.</p>

<p>"The Lennox captures that evolution with a level of quality and amenity that's difficult to match at its price point."</p>

<p>[smartcode_project:default project_id=5743 project_image_fid=953]</p>

<p>Designed by <a href="https://www.apartments.com.au/architects/marchese-partners">Marchese Partners</a>, the tower responds directly to its riverfront setting through expansive glazing and open-plan layouts that maximise views across the Parramatta River and city skyline. Interiors feature engineered timber flooring, stone benchtops, stainless steel appliances and floor-to-ceiling glazing, while generous balconies extend the living spaces outdoors.</p>

<p>Marchese Partners says the project was conceived to balance high-quality apartment living with practical, long-term functionality, pairing larger, efficient floorplans with amenities more commonly associated with five-star hotels.</p>

<p>That emphasis continues through the resident facilities, which include a 20-metre rooftop swimming pool, fully equipped gym and wellness spaces, full-time concierge, a residents' lounge, function room, private lifts, secure basement parking and rooftop communal areas overlooking the Parramatta River. Ground-floor boardwalk retail and dining further activate the riverfront and integrate the building into the surrounding public realm.</p>

<p>[smartcode_project:default project_id=5743 project_image_fid=925]</p>

<p>Australian housing and finance group Equitifund has secured the remaining apartments, believing there are few completed apartment opportunities in Parramatta that offer the same combination of location, amenity and pricing.</p>

<p>Equitifund National Sales Director Ben Hamblett says buyers are increasingly recognising that premium apartment living no longer needs to come with Sydney CBD pricing.</p>

<p>"The Lennox is where aspirational living becomes attainable," Hamblett said.</p>

<p>"Wake to river and mountain views, step into Sydney's Second CBD, and arrive home to resort-calibre amenities, all without the harbour price tag."</p>

<p>Hamblett says owner-occupiers are also attracted by the convenience of having Westfield Parramatta, Church Street's dining precinct, Parramatta Park, Riverside Theatres, Western Sydney University and major transport connections all within walking distance.</p>

<p>"At The Lennox, lifestyle is not an afterthought, it is the foundation."</p>

<p>[smartcode_project:default project_id=5743 project_image_fid=5374]</p>

<p>The Lennox places residents within walking distance of Parramatta Square, Westfield Parramatta, Church Street Eat Street, Parramatta Station, the ferry wharf, Light Rail, the future Sydney Metro West, Parramatta Park and CommBank Stadium, reinforcing Parramatta's position as one of Australia's most connected metropolitan centres outside Sydney's CBD.</p>

<p>Equitifund says buyers visiting the display suite consistently comment on the quality of the finishes, generous floorplans, river and skyline views, and the walkability of the location. The project has attracted a broad mix of local professionals, upsizers, downsizers, buyers relocating from Sydney's inner suburbs and interstate investors seeking long-term growth opportunities.</p>

<p>That demand aligns with Parramatta's continued evolution as an economic powerhouse. Equitifund Research and Market Insights specialist John Bekiaris says sustained population growth, infrastructure investment and expanding employment opportunities continue to support long-term housing demand across the city.</p>

<p>"Parramatta has evolved from a satellite city into one of Australia's most important economic centres. Population growth, infrastructure investment and employment are all supporting sustained long-term housing demand."</p>

<p>[smartcode_project_cta:default project_id=5743]</p>


Joel Robinson

The apartment price gap drawing Sydney buyers west

<p>A luxury beachfront apartment at Rainbow Bay has more than doubled in value since it sold off the plan six years ago, setting a new local apartment record in the process.</p>

<p>The three-bedroom apartment in the Flow development on Petrie Street, the first of four new projects locally by Paul Gedoun's S&amp;S Projects, has sold for $7.4 million, after originally selling for $3.27 million when the project launched in 2020.</p>

<p>The seventh-floor apartment, comprising 187 sqm of internal living space and a 54 sqm balcony overlooking Froggies Beach and Snapper Rocks, was purchased by a local family.</p>

<p>The transaction was negotiated by Pezet Matheson director Kerry Pezet and equates to more than $30,000 per sqm.</p>

<p>Pezet said the sale reflected the limited opportunities to buy into the boutique beachfront development.</p>

<p>"The sale highlights the rarity of opportunities within the boutique beachfront development, where residences seldom become available," Pezet said.</p>

<p>"Flow is one of the Gold Coast's most tightly held buildings. Buyers from our database move quickly when residences become available, and achieving an off-market sale at $7.4 million demonstrates the depth of demand for property of this calibre."</p>

<p><img alt="Flow" data-entity-type="file" data-entity-uuid="c585b206-2130-4eee-a50c-3f27c51a7c70" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-07-06%20at%208.33.25%E2%80%AFPM.png?VersionId=m3pHRDV62Y3fvN.XQuQHq.52ilTWpRLf" /></p>

<p>Flow was the first of four luxury apartment developments delivered by Paul Gedoun's S&amp;S Projects at Rainbow Bay and was completed in 2023.</p>

<p>Positioned on the beachfront overlooking Snapper Rocks, the residence includes three bedrooms, three bathrooms, a powder room and views stretching north along the coastline towards Surfers Paradise.</p>

<p>Pezet Matheson Residential principal Mitchell Lambert said buyers continued to prioritise quality beachfront apartments in tightly held locations.</p>

<p>"Flow Residences offers a rare combination of elevated beachfront positioning, architectural excellence, comprehensive resident amenity and premium finishes, which is exactly what discerning purchasers are seeking," Lambert said.</p>

<p>"The transaction further reinforces Rainbow Bay's reputation as one of Australia's premier coastal lifestyle destinations, where limited supply and growing demand continue to support strong market performance."</p>

<p>Pezet Matheson originally marketed and sold out Flow off the plan, making the latest transaction a return to one of the project's original buyers.</p>

<p>Paul Gedoun is selling his third project, <a href="https://www.apartments.com.au/new-apartments/radia-rainbow-bay-271-boundary-street-coolangatta-qld-4225">Radia Rainbow Bay</a>, after recently completing, and selling out, <a href="https://www.apartments.com.au/buildings/esprit-217-227-boundary-street-coolangatta-qld-4225">Esprit</a>. He has plans for a <a href="https://www.apartments.com.au/news/qld/first-look-s-s-projects-proposes-88-apartment-wellness-tower-at-coolangattas-boundary-street">fourth building</a>, 88 apartments on <a href="https://www.apartments.com.au/new-apartments/209-213-boundary-street-coolangatta-qld-4225">Boundary Street</a>.</p>


Rainbow Bay apartment doubles in price since off the plan sale during pandemic

<p data-end="315" data-start="85">The long-planned transformation of Brisbane's historic Shafston Estate has taken another major step, with Capella Hotel Group announced as the luxury hospitality partner behind what will become Brisbane's first branded residences.</p>

<p data-end="499" data-start="317">The project, to be known as <strong data-end="376" data-start="345">Capella Residences Brisbane</strong>, is being delivered by Verso Projects at the landmark Kangaroo Point riverfront estate, with completion targeted for 2029.</p>

<p data-end="899" data-start="501">The announcement follows a series of planning changes to the project over recent years. The site was originally approved in 2023 for a 15-level, 37-apartment development designed by Rothelowman for Burgundy Group before Verso Projects took over the 10,070 sqm riverfront holding and lodged revised plans with Kerry Hill Architects to increase the development to a 25-level tower with 51 apartments.</p>

<p data-end="1154" data-start="901">The latest announcement confirms Capella Hotel Group will bring its branded residential offering to the project, marking just the second Capella Residences development globally after Seoul, and the group's first branded residential project in Australia.</p>

<p data-end="1387" data-start="1156">The <a href="https://www.apartments.com.au/new-apartments/23-castlebar-street-kangaroo-point-qld-4169">Castlebar Street development</a> will centre around the restoration of the heritage-listed Shafston House, one of Brisbane's oldest residences, originally constructed in 1851 by Reverend Robert Creyke as a single-storey cottage known as Ravenscott.</p>

<p data-end="1387" data-start="1156"><img alt="Capella" data-entity-type="file" data-entity-uuid="2b9f4ce5-638f-4d6b-8082-3ca7e4b75fca" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-07-09%20at%207.20.41%E2%80%AFAM.png?VersionId=f7aeqsW_DzOJI4FymWb3lD8NptSfsP7q" /></p>

<p data-end="1611" data-start="1389">Capella said the project aligns with its focus on heritage-led developments, with the Brisbane estate combining the restored historic residence with a new luxury apartment tower and hospitality-inspired resident amenities.</p>

<p data-end="1823" data-start="1613">Residents will have access to the Capella Living Room, a concierge-led communal space inspired by the group's luxury hotels, alongside landscaped gardens, six swimming pools, wellness and recreation facilities.</p>

<p data-end="2042" data-start="1825">The broader estate will also include two riverfront homes, a six-berth private marina, porte cochère arrival experience, secure basement parking and a new section of public riverwalk along the Brisbane River frontage.</p>

<p data-end="2177" data-start="2044">The heritage Postal Depot Building will also be retained and repurposed as a guest house, in line with the revised development plans.</p>

<p data-end="2420" data-start="2179">The project represents another evolution for the site, which Kerry Hill Architects previously described as a rare opportunity to restore one of Brisbane's most significant heritage estates while creating a new benchmark for apartment living.</p>

<p data-end="2724" data-start="2422">"The Shafston Estate provides a once-in-a-generation opportunity to restore one of Brisbane's finest heritage precincts and to reinstate residential use as a unique site perched on the edge of Kangaroo Point," Kerry Hill Architects said in its Urban Context Report accompanying the planning submission.</p>

<p data-end="2858" data-start="2726">"The project will celebrate excellence in sub-tropical residential design, setting a new benchmark for vertical living in Brisbane."</p>

<p data-end="3130" data-start="2860">Verso Projects, which now has an $8.5 billion development pipeline spanning more than 6,000 dwellings across apartments, townhouses, retail and commercial projects, said the partnership with Capella would elevate the development beyond a traditional residential project.</p>

<p data-end="3415" data-start="3132">"We feel honoured to be restoring Shafston Estate to its former glory, elevating it to new heights of luxury and excellence underpinned by Capella's distinctive service ethos and design philosophy, and making it a standout landmark in Brisbane," Verso Projects CEO Steve Laffey said.</p>

<p data-end="3658" data-start="3417">"By partnering with Capella, globally recognised for its refined approach to luxury hospitality and deep respect for cultural and historical context, we will elevate this project beyond a residential offering into a world-class destination."</p>

<p data-end="3820" data-start="3660">Capella Hotel Group President Roland Fasel said Brisbane's emergence as a global city made it the right location for the company's Australian residential debut.</p>

<p data-end="3961" data-start="3822">"Brisbane is a city on the cusp of something remarkable, and Capella Residences is our commitment to being part of that story," Fasel said.</p>

<p data-end="4083" data-start="3963">"The Capella residential experience is more than luxury. It is about a sense of belonging to a place with deep meaning."</p>

<p data-end="4227" data-start="4085">Private appointments have now opened for the project, with a display suite expected to open in late 2026 ahead of the planned 2029 completion.</p>


Capella to launch Brisbane's first branded residences at Shafston House, Kangaroo Point

<p>Lewis Land's latest apartment release within its <a href="https://www.apartments.com.au/new-apartments/harbour-shores-biggera-waters-564-oxley-drive-biggera-waters-qld-4216">Harbour Shores</a> masterplan is targeting one of the Gold Coast's fastest-growing buyer groups, with almost a third of apartments at Solis priced below $1 million.</p>

<p>The seven-storey building at Biggera Waters will comprise 91 apartments, including 24 one-bedroom residences starting from $778,000, a price point Lewis Land says is aimed squarely at first home buyers struggling to enter the Gold Coast market.</p>

<p><img alt="Harbour Shires" data-entity-type="file" data-entity-uuid="e7486e37-22f6-4c92-b212-9b0622070b8f" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-07-08%20at%209.09.34%E2%80%AFAM.png?VersionId=W8MJwJUCf6HkIyl_EVSksnd.QI6MZryY" /></p>

<p><a href="https://www.apartments.com.au/developers/lewis-land-group">Lewis Land</a> Head of Development Michael Long said the developer deliberately allocated a significant proportion of the project to more affordable apartment types.</p>

<p>"First home buyers have been priced out of many parts of the Gold Coast, and we saw a clear opportunity to address this and play our part in a longer-term housing solution," Long said.</p>

<p>"That's why 24 of the 91 apartments being delivered at Solis have been designed and priced for the city's next generation of homeowners, quality one-bedroom apartments, half of which include an additional multipurpose room to maximise space and flexibility.</p>

<p>"This approach places 30 per cent of apartments in Solis under $1 million, and with close proximity to Harbour Town's future light rail extension connecting residents to the city's major employment and knowledge hubs, it's a win for buyers looking to secure their first property."</p>

<p><img alt="Sores" data-entity-type="file" data-entity-uuid="550526d3-73ba-4710-9739-c5f4294a30ef" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-07-08%20at%209.09.29%E2%80%AFAM.png?VersionId=cQQdXHt9wS0UXwZEm5Py5bH_3kAmzyhu" /></p>

<p>Designed by BDA Architecture, Solis will deliver a mix of one, two and three-bedroom apartments, with residences ranging up to 232 sqm. Apartments feature generous balconies and contemporary finishes, while residents will have access to Harbour Shores' lagoon pool, clubhouse, tennis court, gym, yoga studio and sauna.</p>

<p>The focus on first home buyers resonated with purchaser Holly Humphreys, who said she and her boyfriend spent more than a year searching for their first property before shifting their attention from houses to apartments.</p>

<p>"We fell in love with the first house we bid on and got our hopes up, but after repeated knockbacks we learned not to get too attached," Humphreys said.</p>

<p>"We offered at the high end of price guides, but sales kept going even higher. That's where we really struggled and we needed to re-evaluate our budget and our expectations. Standalone houses were off the table, and we pivoted to apartments and townhouses."</p>

<p>Humphreys said it was encouraging to see developers recognising the growing demand from first home buyers.</p>

<p>"There's a growing number of young buyers looking to enter the market earlier because they understand that getting in now can make a real difference as prices continue to rise," she said.</p>

<p>"It's fantastic to see a developer recognise this and then actively take measures to deliver an apartment with us in mind."</p>

<p>Solis is the first development planned within the second stage of the Harbour Shores masterplan, with early works expected to commence in September 2026.</p>

<p>[smartcode_project_cta:default project_id=113271]</p>


Lewis Land targets first home buyers at latest Harbour Shores release, Solis

<p>Luxury apartment developer Abadeen has recorded $19.25 million in apartment sales across two of its Lower North Shore developments in the lead-up to the end of the financial year, headlined by the sale of a $6.75 million penthouse at <a href="https://www.apartments.com.au/buildings/koyo-crows-nest-5-rodborough-avenue-crows-nest-nsw-2065">KOYO in Crows Nest.</a></p>

<p>The transactions also included the sale of a newly completed three-bedroom apartment at <a href="https://www.apartments.com.au/buildings/park-residences-cremorne-2-sutherland-street-cremorne-nsw-2090">Park Residences in Cremorne</a> for $6.35 million, with the residence selling shortly after the project's first public inspections following completion.</p>

<p>The sales come as completed, owner-occupier-focused apartments continue to attract strong demand across Sydney's Lower North Shore, particularly from buyers looking for certainty and immediate occupancy.</p>

<p>The penthouse at KOYO spans 491 sqm across a single level and was designed by architect Koichi Takada. The development is one of Abadeen's flagship boutique projects in Crows Nest.</p>

<p>[smartcode_project:default project_id=108800 project_image_fid=370093]</p>

<p>Abadeen Executive Chairman and Founder Justin Brown said buyer activity lifted noticeably in the lead-up to the end of the financial year.</p>

<p>"We saw a clear increase in enquiry levels, inspection numbers and buyer engagement across our completed projects leading into the end of the financial year," Brown said.</p>

<p>"Buyers have become far more decisive over the past six months. The combination of improving confidence, limited supply and the ability to physically inspect completed residences is creating strong competition for premium apartments in the best locations."</p>

<p>Brown says the&nbsp;response to Park Residences following completion has been particularly strong.</p>

<p>"Buyers want certainty and are responding positively to the opportunity to walk through a finished product, inspect the quality firsthand and move in immediately," Brown suggested.</p>

<p>"Projects such as Park Residences and KOYO demonstrate that when the product is exceptional and the location is irreplaceable, buyers are prepared to act quickly."</p>

<p>[smartcode_project:default project_id=114246 project_image_fid=370116]</p>

<p>Abadeen CEO Joe Tack said quality continued to differentiate projects in the current market.</p>

<p>"Today's buyers are incredibly discerning," Tack said.</p>

<p>"They are seeking larger floorplans, premium finishes, walkability, lifestyle amenity and confidence in the developer delivering the project. Well-designed boutique developments continue to outperform because they offer something genuinely difficult to replace.</p>

<p>"The enquiry we are seeing across our completed and recently completed Lower North Shore portfolio is very encouraging, and we expect this momentum to continue into spring."</p>

<p>The sales follow increased enquiry across Abadeen's Lower North Shore portfolio which also includes <a href="https://www.apartments.com.au/buildings/northcote-collective-naremburn-2-northcote-street-naremburn-nsw-2065">Northcote Collective in Naremburn</a> which also completed recently.</p>


KOYO penthouse headlines Abadeen's $19.25 million EOFY sales flurry

Residential Market

<html><body>
<p><span style="line-height: 1.3em;">We receive lots of calls from property investors wanting to talk to us about developing. </span></p>
<p><span style="line-height: 1.3em;">During our initial chat we discuss their goals and achievements to date with property. Usually we find that most people have at least one investment property, some have several. Some have built a house before but most haven’t. Then we discuss what property developing is like as an </span><em style="line-height: 1.3em;">experience</em><span style="line-height: 1.3em;"> to see if they think it may suit them.</span></p>
<p>Property developing is not for everyone and I’ve found that you need to be somewhat flexible, have an open mind and be fairly non-controlling and decisive.  Without going into a Carl Jung type personality and psychological analysis, it can be hard to determine if a person is ready to embark on a development. But having entrepreneurial traits will help as things won’t always go to plan.</p>
<p>A good starting point is to ask yourself these questions: </p>
<ul>
<li>Do I understand what needs to be done?</li>
<li>Can I do what’s got to be done?</li>
<li>Do I have the necessary skills, resources, time, and team support?</li>
<li>Can I handle risk?</li>
<li>Can I create real value?</li>
</ul>
<p>Property Bloom has managed many property developments over the years and as we've progressed, we’ve continually refined our process – <strong>with every development comes a new learning and we use this experience to improve what we do.</strong>  By doing this we’ve been able to save time, money and reduce a lot of the risk. </p>
<p>Here's an example. The other day we reviewing plans for one of our projects and focussed turned to  the roof. We came up with a great look using various gables to break up the roof line.</p>
<p>Generally speaking, the more detail in the roof design, the more interesting but also the more expensive. We worked out if we used a more simple hip roof, the saving on trusses and roofing materials was substantial. We looked at a design with the hip roof and decided the money was best saved. The saving could be used in other areas that would actually add value like ducted air conditioning for instance.</p>
<p>If you are embarking on a development, due diligence is key. Find areas where there’s good demand and growth indicators with good infrastructure investment taking place.  This can indicate planned growth for the area. Then closely track what’s happening in the locations – fundamental research is just as, if not more important as statistical research to us.</p>
<p>Project managing your development involves dynamic relationships between several different parties. Building established and trusted relationships takes time. Your builder will be one of the most important people on your team so ensure they are efficient and build to the highest of standards. You should work closely with them to ensure all is running to schedule.</p>
<p>So if you find you are not set up to develop property and need a helping hand, then consider engaging a project manager who can help mitigate risk by using their tested methods, understanding of the cities and their suburbs they develop in, that can source good development sites and have a team of people  ready to get your development off the ground. Perhaps with a positive development experience under your belt, you'll be ready to tackle the next on your own.</p>
<p><em>Jo Chivers is chief executive officer of property development project managers <a href="https://www.propertybloom.com.au/about" target="_blank">Property Bloom</a>.</em></p>
</body></html>

jochivers-wq5Bp59R5a

Are you ready to be a property developer? Jo Chivers

<html><body>
<p class="Body">Let’s assume for a moment that the people raging about the alleged affordability crisis actually care about the issue and want to see solutions.</p>
<p class="Body">I say that because much of it is grandstanding by attention-seekers who really don’t give a damn.</p>
<p class="Body">The problem they face is that they’re never going to find a remedy, one that actually works, until they identify the real problems.<span style="line-height: 1.3em;"> </span></p>
<p class="Body">So far the debate, for want of a better word, has focused on fighting phantoms. Everyone, it seems, has their pet theories about who’s to blame and is filling up the airways with angry demands that the culprits be dealt with.<span style="line-height: 1.3em;"> </span></p>
<p class="Body">The problem is, no one can agree on who the villains really are.</p>
<p class="Body">Recently we had former federal minister and previous NSW premier, Bob Carr, stridently declaring that rising prices were all caused by migrants flooding into Australia. Apparently these people have more money than sense and rampage around our major cities paying way too much for houses, thereby pushing prices beyond the reach of our kiddies.</p>
<p class="Body">But the current Federal Government, after two long and expensive parliamentary inquiries into the affordability smokescreen, somehow came to the belief that it was all caused by foreign investors buying mansions when they’re supposed to be buying new dwellings. With appropriate sabre-rattling, the feds declared they were going to clamp down on the dastardly aliens, thereby creating a level playing field, thereby making homes cheaper for our kiddies, therefore affordability fixed.<span style="line-height: 1.3em;"> </span></p>
<p class="Body">So they jolly well forced a handful of foreign buyers to sell back their mansions. There you go, problem solved. Houses cheaper right across Australia.<span style="line-height: 1.3em;"> </span></p>
<p class="Body">Meanwhile, federal Labor has popped up and postulated that it’s not the fault of overseas migrants, despite one of their own declaring that it was, nor the fault of foreign investors breaking the rules. Labor has mandated that it’s the fault of our home-grown investors – not all of them mind you, just the ones who claim negative gearing tax benefits.</p>
<p class="Body">So Labor claims it can fix the (Sydney) affordability problem by removing the right to claim negative gearing tax benefits, except for new properties.</p>
<p class="Body">There are a few others, including a couple of obscure university activists who published a paper recently, who adhere to the theology that declares negative gearing the source of all evil in real estate, notwithstanding the laughable illogic of their arguments.<span style="line-height: 1.3em;"> </span></p>
<p class="Body">Labor is also part of the camp, which is also populated by economists, that believes it’s the so-called capital gains concession that drives investors beyond reason to paying silly prices for things.<span style="line-height: 1.3em;"> </span></p>
<p class="Body">But there’s yet another school of thought out there, often put forward by economists who think they know more about real estate than they actually do. They claim that it’s grants and stamp duty concessions given to first-home buyers that have forced up house prices, by empowering youngsters who would not otherwise be competing in the market. One sub-theory is that the price of houses rises by the amount of the government grant.<span style="line-height: 1.3em;"> </span></p>
<p class="Body">So take your pick. According to various schools of thought, all of them expounded vehemently by zealots totally convinced of their validity, the villains who force up house prices are:-<span style="line-height: 1.3em;"> </span></p>
<p class="Body">(1)  migrants,</p>
<p class="Body">(2)  foreign investors,</p>
<p class="Body">(3)  negatively-geared Australian investors,</p>
<p class="Body">(4)  all investors who benefit from the CGT concession, or</p>
<p class="Body">(5)  first-time buyers bolstered by government grants and stamp duty concessions.<span style="line-height: 1.3em;"> </span></p>
<p class="Body">So who’s right? The answer, sadly, is: none of them! They’re all wrong!</p>
<p class="Body">And this is why there will never be any realistic solution to the alleged affordability crisis. Everyone who appears to care is out there chasing phantom targets.</p>
<p class="Body">You can’t devise a cure if you’ve mis-diagnosed the illness.<span style="line-height: 1.3em;"> </span></p>
<p class="Body">The buying sector most responsible for prices rising over time is never mentioned in the “debate”. This buying sector is the biggest influence of housing markets because they’re the biggest in number - and they have both the financial capacity and the motivation to pay high prices to secure the homes they want.</p>
<p class="Body">They’re home-buyers other than first-time buyers – the next-time buyers. People relocating, upgrading, moving onward and upward. People who have owned homes for years and are seeking to move to bigger and better ones, armed with a strong financial position.<span style="line-height: 1.3em;"> </span></p>
<p class="Body">The problem for those all worked up about affordability (which, essentially, is a Sydney issue, not a national one) is that it’s very hard to nobble them. They don’t receive government grants, they don’t claim negative gearing and they don’t pay CGT so they can’t benefit from the so-called concession.<span style="line-height: 1.3em;"> </span></p>
<p class="Body">To show you what I mean, let’s examine some statistics about market share, as revealed by the NAB quarterly surveys.</p>
<p class="Body">Foreign investors, an easy target for politicians wanting to blame an unpopular minority with no political cost, are about 8 percent of buyers of established property.</p>
<p class="Body">Australian investors comprise 28 percent of buyers and first-time home buyers are 20 percent.<span style="line-height: 1.3em;"> </span></p>
<p class="Body">The remainder of the market, around 43 percent of it, are those people who never get discussed in the “why prices rise” debate, the next-time buyers.</p>
<p class="Body">Given that foreign investors are only 8 percent of the market, it’s unreasonable to blame them for prices rising. You might well ask: what about the other 92 percent?</p>
<p class="Body">ATO data shows that a lot of Australian investors don’t claim negative-gearing tax deductions, as many own properties where the rent covers all costs. I am one of them.</p>
<p class="Body">My estimate is that about 15 percent of the market comprises negatively-geared Australian investors. According to Labor leader Bill Shorten, in his announcement of his tax policy, those 15 percent are solely responsible for all price rises over the past 30 years. If he truly believes that, he’s an idiot. Again you might well ask: but what about the other 85 percent?<span style="line-height: 1.3em;"> </span></p>
<p class="Body">It’s not just about numbers of people in the market. It’s also about financial capacity and motivation.<span style="line-height: 1.3em;"> </span></p>
<p class="Body">First-home buyers, with or without state government grants (only available now on new properties), are relatively few in number and are constrained by their tight budgets. They don’t pay silly prices for homes.<span style="line-height: 1.3em;"> </span></p>
<p class="Body">Investors are a little more numerous but are still very much in the minority. And they are highly motivated to buy at the lowest possible prices. For investors, it’s all about the numbers, not about falling in love with a single property they just have to have. If they can’t get it at a price that stacks up as an investment, most will walk away – because there are a hundred others just around the corner.<span style="line-height: 1.3em;"> </span></p>
<p class="Body">That leaves that anonymous bunch of people we call the next-time buyers. They’re remarkable for their ability to fly under the radar of media debate. No one ever talks about them. But they’re the most influential part of the market, by a wide margin.<span style="line-height: 1.3em;"> </span></p>
<p class="Body">They’re not half the buying market, but they’re close to it. Because they’ve owned property for a while and built up equity, they’re financially strong. And they’re aspirational, so they’re highly motivated and will often pay whatever it takes (within reason, mostly) to secure that one property they must have.</p>
<p class="Body">They’re the sneaky bastards who force prices to rise. And there’s almost nothing politicians can do to stop them.</p>
<p class="Body"><em>Terry Ryder is the founder of <a href="https://www.hotspotting.com.au/" target="_blank">hotspotting.com.au</a>. You can <a href="https://mailto:ryder@hotspotting.com.au" target="_blank">email him</a> or follow him on <a href="https://twitter.com/hotspotting" target="_blank">Twitter.</a></em></p>
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Housing affordability debate focused on fighting phantoms: Terry Ryder

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<p><span>According to t<span>he just-launched CoreLogic-Moody’s Analytics Australian Forecast Home Value Index</span>, home values are forecast to continue rising solidly in Sydney and Melbourne over the next decade. </span></p>
<p><a href="/images/2016/02/29/Modys.jpg" target="_blank"><span>Click to enlarge</span></a></p>
<p><span><img src="/images/2016/02/29/Modys.jpg" alt=""></span></p>
<p> </p>
<div>It sees annual price growth of more than +5 per cent returning for Perth by 2017, but subdued growth for Adelaide over the next two years, while Darwin prices are expected to decline in 2016.</div>
<div> </div>
<div>Of the capital cities, Brisbane is forecast to fare best over the next two years with home value growth of around +12 per cent.</div>
<div> </div>
<div>
<p><span><em>PETE WARGENT is the co-founder of <a href="https://allenwargent.com/" target="_blank" rel="nofollow">AllenWargent</a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank" rel="nofollow">blogger</a>.</em><br></span></p>
<p><em>His latest book is <a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx" target="_blank" rel="nofollow">Four Green Houses and a Red Hotel</a>.</em></p>
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10 year home price forecast for Sydney: Pete Wargent

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<p>GUEST OBSERVER</p>
<p>The Australian Bureau of Statistics (ABS) has released demographic data for the September 2015 quarter recently.</p>
<p>The data showed a continuation of the trend towards a slower rate of population growth at a national level. At the end of the quarter, it was estimated that there were 23,860,133 residents of Australia, an increase of just 0.3 percent over the quarter and 1.3 percent over the past year.</p>
<p><a href="/images/2016/03/30/Chart-1-4-580x206.jpg" target="_blank">Click to enlarge </a></p>
<p><img src="/images/2016/03/30/Chart-1-4-580x206.jpg" alt=""></p>
<p>The 12 months to September 2015 saw an additional 313,237 residents of Australia which is 7.3 percent lower than over the same quarter in 2014.  In fact, the annual increase in population for the country is the lowest it has been since the June 2011 quarter.</p>
<p><a href="/images/2016/03/30/Chart-2-3-580x205.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/03/30/Chart-2-3-580x205.jpg" alt=""></p>
<p>At a national level, there are two components of population growth, natural increase (births minus deaths) and net overseas migration.  Over the past year, there was a natural increase of 145,585 persons and net overseas migration of 167,652 persons.  As the above chart shows, the two measures are converging due to a sharp decline in net overseas migration.  Annual net overseas migration is now at its lowest level since September 2006, is -7.0 percent lower over the year and -46.9 percent lower than its peak in December 2008.</p>
<p><a href="/images/2016/03/30/Chart-3-4-580x206.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/03/30/Chart-3-4-580x206.jpg" alt=""></p>
<p>Looking at population growth across the states and territories, the rate of growth has been strongest over the past year in Victoria at 1.7 percent and lowest in the Northern Territory at 0.3 percent.</p>
<p>The annual rate of population growth is above 1 percent in all states and territories except the Northern Territory, Tasmania and South Australia. In terms of raw number population increase over the year, New South Wales and Victoria are way out in front of all other areas with increases of 102,243 persons and 102,311 persons respectively. </p>
<p>Queensland (55,232) and Western Australia (32,542) were the only other two regions to record annual population growth of more than 15,000 persons.  Across the remaining states and territories the annual population increase was recorded at: 12,396 persons in South Australia, 5,491 persons in the Australian Capital Territory, 2,159 persons in Tasmania and 826 persons.</p>
<p>The four most populous states accounted for 93.3 percent of total population growth over the year with New South Wales and Victoria accounting for 65.3 percent.</p>
<p>The mining states and territories in particular have felt the full brunt of the slowdown in population. At its peak in December 2008, Queensland recorded a population increase of 115,561 with annual growth now less than half this figure.  In Western Australia, annual population increases peaked at 88,156 persons in September 2012 and in Northern Territory the annual population increase peaked at 7,073 persons in March 2013.</p>
<p>It is also worthwhile at the state and territory level to have a look at the interstate migration trends.  As well as net overseas migration there is net interstate migration across the states and territories which affects population growth.</p>
<p><a href="/images/2016/03/30/Chart-4-4-580x206.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/03/30/Chart-4-4-580x206.jpg" alt=""></p>
<p>Firstly if we look at annual net overseas migration, New South Wales (66,540) and Victoria (55,447) account for an overwhelming majority of the population increase.  In fact, 72.8 percent of all net overseas migration was into these two states which is the highest proportion since December 1984.</p>
<p>Elsewhere the number of net overseas migrants has been recorded at: 16,725 persons in Queensland, 10,255 persons in South Australia, 14,249 persons in Western Australia, 1,119 persons in Tasmania, 975 persons in the Northern Territory and 2,333 persons in the Australian Capital Territory. Annual net overseas migration into Queensland is at its lowest level since December 2000 and South Australian net overseas migration is at its lowest level since December 2011.</p>
<p><a href="/images/2016/04/5/Chart-5-2-580x205.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/04/5/Chart-5-2-580x205.jpg" alt=""></p>
<p>Turning to net interstate migration, movement between the states and territories is slowly starting to rise again; the above chart shows the annual movements between states and territories.  The chart shows that since 2003 there has been a fairly consistent decline in the proportion of the population moving interstate.  I have to admit this is a little surprising given that it coincides with the end of Sydney’s and Melbourne’s housing boom and is pretty much the beginning of the mining boom.  Although, the sudden slowing of interstate migration coincides with the substantial ramping-up of net overseas migration and with net overseas migration we are now seeing a pick-up in interstate migration.</p>
<p><a href="/images/2016/04/5/Chart-6-1-580x210.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/04/5/Chart-6-1-580x210.jpg" alt=""></p>
<p>Over the past 12 months, Victoria and Queensland are the only two states or territories to have recorded a positive net inflow of population form other states.  Net interstate migration to Victoria was a record high 11,187 persons over the past year compared to 6,890 persons to Queensland. </p>
<p>Net interstate migration into Queensland seems to be turning a corner after hitting a trough of 5,598 persons over the year to December 2014. </p>
<p>Across the remaining states and territories there have been losses from net interstate migration of: -7,451 persons in New South Wales, -4,125 persons in South Australia, -2,721 persons in Western Australia, -180 persons in Tasmania, -3,019 persons in the Northern Territory and -581 persons in the Australian Capital Territory.  The net loss of persons from interstate migration is at its highest level since March 2014 in New South Wales, its highest since June 2009 in South Australia and its greatest since March 2003 in Western Australia. In Tasmania the loss of residents to interstate migration is at its lowest level since June 2011 and it is at its lowest level since December 2013 in the Australian Capital Territory.</p>
<p>The more up-to-date overseas arrivals and departures data indicates that net overseas migration is likely to trend even lower next quarter which will dampen the national rate of population growth further.  At the same time, the data shows that Victoria (which would seem to be a proxy for Melbourne) is the migration epicentre of the country attracting large numbers of both overseas and interstate migrants. </p>
<p>Meanwhile the outflow of residents leaving New South Wales is picking up pace while interstate migration to Queensland is starting to build.</p>
<p>Perhaps we are seeing the impact of high housing costs in Sydney and fairly strong jobs growth in Victoria and Queensland starting to attract Sydneysiders to other parts of the Eastern Seaboard.  Weaker economic conditions in Western Australia are seeing residents leave with Victoria and Queensland the benefactors.  Meanwhile, Tasmania’s outflow of residents is slowing on the back of the booming tourism sector and a recent improvement in economic conditions.</p>
<p>Finally with population growth slowing we are seeing a better relationship between housing supply and housing demand.  After recently hitting record high levels, it is reasonable to expect that the slowing population growth will see property developers respond by seeking fewer approvals for new residential properties.</p>
<p><em>Cameron Kusher is research analyst for CoreLogic RP Data. You can contact him <a href="https://blog.corelogic.com.au/about/">here</a>.</em></p>
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Population growth continues to slow due to ongoing decline in net overseas migration: Cameron Kusher

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<div><span style="line-height: 1.3em;">It's very much true that monthly figures often don't tell you a lot, and even annual figures are often quite misleading. </span></div>
<div> </div>
<div>But over a period of years now we have seen Melbourne come to utterly dominate population and employment growth in Victoria, directly at the expense of the state's regional centres. </div>
<div> </div>
<div>Over the past year Greater Sydney (+67,200) and Greater Melbourne (+59,700) have both added a healthy balance to their total employed figures respectively, while Greater Brisbane added a solid (+34,900). <br><br>And after some years of stagnation regional New South Wales (+60,900) has now at last come to the party, adding jobs in the state's regional centres both to the north and south of the harbour city. </div>
<div> </div>
<div>However, mirroring what I already discussed in more detail here when analysing the latest population growth figures, regional Victoria added just 900 jobs over the year. </div>
<div> </div>
<div>In fact, if you strip out Geelong which added nearly 20,000 jobs over the year to March 2016 to see its unemployment rate fall to just 5.2 per cent, the rest of state has been going backwards as Greater Melbourne powers along. The most recently available population growth figures painted a very similar picture.</div>
<p><a href="/images/2016/04/26/A1.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/04/26/A1.jpg" alt=""></p>
<div class="separator"> </div>
<div class="separator">It is true that annual figures can sometimes be misleading, but population and employment projections are becoming increasingly lopsided towards the capital city in Victoria to the extent that regional Victoria could actually soon even soon be seeing its population decline in aggregate.</div>
<div class="separator"> </div>
<div class="separator">In fact, regional employment growth has been generally very weak in aggregate across all states outside of the Premier State, despite some tourism-related gains in Queensland's coastal regions. </div>
<div class="separator"> </div>
<div class="separator">Regional employment fell year-on-year, for example, in both South Australia (-900) and Western Australia (-15,900), the latter's labour force having been severely dampened by the end of the mining construction boom. </div>
<div class="separator"> </div>
<div class="separator"><a href="/images/2016/04/26/A3.jpg" target="_blank">Click to enlarge</a></div>
<div class="separator"><img src="/images/2016/04/26/A3.jpg" alt=""></div>
<div><span style="text-decoration: underline;"> </span></div>
<div>Totting it all up we can see just how skewed employment growth has been towards a few capital cities, and certain parts of regional Queensland. </div>
<div> </div>
<div><a href="/images/2016/04/26/A4.jpg" target="_blank">Click to enlarge</a></div>
<div><img src="/images/2016/04/26/A4.jpg" alt=""></div>
<p><br><strong><span style="text-decoration: underline;">Unemployment rates</span></strong></p>
<div> </div>
<div>Low interest rates are working their magic in the three largest capital cities where rolling annual unemployment rates are having been trending down nicely, in Greater Sydney, in Greater Melbourne, and in Greater Brisbane. </div>
<div>
<br>Elsewhere it's not such a pretty picture, particularly in Adelaide which now has by far and away the highest unemployment rate of the capital cities. <br><br>Greater Perth's rolling annual unemployment rate now seems to be holding firm at just under 6 per cent.</div>
<div> </div>
<div><a href="/images/2016/04/26/A2.jpg" target="_blank">Click to enlarge</a></div>
<div><img src="/images/2016/04/26/A2.jpg" alt=""></div>
<p> </p>
<div>Sydney continues to have the best placed economy, reflected in generally low unemployment rates, especially in its inner suburbs. </div>
<p><a href="/images/2016/04/26/A5.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/04/26/A5.jpg" alt=""></p>
<div>
<strong><span style="text-decoration: underline;">Ripple</span></strong><br><br>Sydney and to a somewhat lesser extent Melbourne have seen their property markets take off since 2012 in response to low interest rates, but where will that growth ripple to next?</div>
<div> </div>
<div>In my opinion, we could easily see a spike or "pop" in house prices in Hobart and Adelaide, following so many years of subdued property price growth and a relatively moribund construction industry which has seen rental markets become fairly tight in some cases. <br><br>In fact, this "pop" in prices may already be happening to some extent.<br><br>
</div>
<div>However, with low employment growth, slow population growth, and slow economic growth, more sustainable property price increases will be much harder to come by. </div>
<p><a href="/images/2016/04/26/A6.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/04/26/A6.jpg" alt=""></p>
<div> </div>
<div>Over the course of the next cycle, Brisbane probably has the best property market prospects due its relative affordability. <br><br>Despite slower net overseas migration than it previously experienced Queensland benefits from interstate migration (as opposed to, say, South Australia, where a brain drain represents the opposite dynamic). </div>
<div> </div>
<div>The unemployment rate has also steadily been trending down in Brisbane, helped by a construction boom. </div>
<div> </div>
<div>True, the economy has hardly been firing, even if things are broadly tracking in the right direction.</div>
<div> </div>
<div>But the initial trigger for rising property prices is simply likely to be rising property prices, with the cheapest available cost of borrowing having not far off halved since the last time the city saw any price growth in real terms, and interstate investors struggling to see so much value elsewhere. </div>
<div> </div>
<div>In fact, dwelling prices are already rising quite fast in some areas of Brisbane, reflected in year-on-year median price growth of above +6 per cent for Brisbane and Gold Coast (CoreLogic-RP Data), but the market is quite multi-speed, particularly with the volume of construction going on. </div>
<p><a href="https://2.bp.blogspot.com/-Em9By-I0i7E/VxhOPe0ZmWI/AAAAAAAAckc/ql1Vmw8Js-IJMMVaMVo-FmCGOrCcGTFcgCLcB/s1600/A7.jpg" target="_blank"> Click to enlarge</a></p>
<div class="separator"><a href="https://2.bp.blogspot.com/-Em9By-I0i7E/VxhOPe0ZmWI/AAAAAAAAckc/ql1Vmw8Js-IJMMVaMVo-FmCGOrCcGTFcgCLcB/s1600/A7.jpg"><img src="https://2.bp.blogspot.com/-Em9By-I0i7E/VxhOPe0ZmWI/AAAAAAAAckc/ql1Vmw8Js-IJMMVaMVo-FmCGOrCcGTFcgCLcB/s640/A7.jpg" width="640" height="356"></a></div>
<p> </p>
<div><strong><span style="text-decoration: underline;">Regional headwinds</span></strong></div>
<div> </div>
<div>Brisbane offers something that Sydney and Melbourne no longer do, being cheap entry prices. </div>
<div> </div>
<div>And if you're looking for cheaper entry prices still and higher initial rental yields you may be tempted further afield.</div>
<div> </div>
<div>However, remember that yield and income are not the same thing, and in the field of investment a higher yield can often be reflective of higher risk. </div>
<div> </div>
<div>In particular a once-in-a-century commodities and resources construction boom must eventually experience a corresponding decline, and so regions with a concentrated exposure to a narrow range of industries may see a spike in unemployment, which tends to result in slowing population growth, falling property prices, and rising vacancy rates (which is the ultimate risk for leveraged investors).</div>
<div> </div>
<div>I don't know much about how Townsville's property market is tracking lately, but do note that unemployment just hit its highest level in 13 years this month after the commencement of the Yabulu lay-offs. </div>
<div> </div>
<div>Granted monthly unemployment readings at the sub-regional level are incredibly seasonal and are about as reliable as a beat up Datsun. But this is not a coincidental result with Townsville having witnessed nearly 10,000 jobs lost in just the past year alone, the high profile Nickel industry closure being the latest casualties of the bust.</div>
<div> </div>
<div>The latest ABS figures record some 13,100 unemployed persons in Townsville, the highest since a brief spike in February 2003 for the most troubling regional unemployment rate in Australia at 12.4 per cent. </div>
<div> </div>
<div><a href="/images/2016/04/26/B1.jpg" target="_blank">Click to enlarge</a></div>
<div><img src="/images/2016/04/26/B1.jpg" alt=""></div>
<div class="separator"> </div>
<div>These types of trends tend to be reflected in rising vacancy rates as population growth dries up. </div>
<div> </div>
<div>It never pays to over-dramatize, but Warwick Powell (to my knowledge not a man prone to making wildly exaggerated statements) said recently that "the region is on the precipice of a great depression", while economist Colin Dwyer lamented that Townsville is "the insolvency capital of Australia". </div>
<div> </div>
<div>The ABS data shows that employment in Townsville has fallen by an extraordinary 20,342 or 18 per cent in only the past year. Let's hope to goodness that is a rogue figure, but it doesn't much look like it from the trend. </div>
<div> </div>
<div>
<p><span><em>PETE WARGENT is the co-founder of <a href="https://allenwargent.com/" target="_blank" rel="nofollow">AllenWargent</a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank" rel="nofollow">blogger</a>.</em><br></span></p>
<p><em>His latest book is <a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx" target="_blank" rel="nofollow">Four Green Houses and a Red Hotel</a>.</em></p>
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Townsville unemployment at 13 year high: Pete Wargent

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<div>More interesting trends reported today by SQM Research for the month of April 2016.</div>
<div> </div>
<div>Over the past year Melbourne's reported vacancy rate declined from 2.2 per cent to 2.1 per cent, while in Sydney the reported vacancy rate has fallen from from 1.8 per cent to 1.7 per cent.</div>
<div> </div>
<div>At the other end of the spectrum, Perth reached a new cyclical high of 4.6 per cent suggesting that the bottom for the Western Australian capital may not yet be in, although lower interest rates may well help to support prices. </div>
<div> </div>
<div>In Perth both median house (-8.4 per cent) and unit (-9,3 per cent) asking rents have declined over the past year, although actual dwelling price declines have been modest. </div>
<div> </div>
<div>Asking rents are also down for Darwin houses (-8.4 per cent) and units (-12.5 per cent).</div>
<div> </div>
<div>On the other hand median asking unit rents increased year-on-year or both Sydney (+5 per cent) and Melbourne (+4.1 per cent), while in Brisbane the increase was more modest (+1.3 per cent).</div>
<p><a href="/images/2016/05/18/SQM.jpg" target="_blank">Click to enlarge</a></p>
<div class="separator"><img src="/images/2016/05/18/SQM.jpg" alt=""></div>
<p> </p>
<div>Since month to month vacancy rates can move around a bit, I've smoothed the data below on a 4mMA basis (arguably I should also be applying a seasonal factor, but I haven't so...shucks).</div>
<div> </div>
<div>This chart gives an interesting perspective on recent trends, although the Christmas period can be a bit of a distortion.</div>
<div> </div>
<div><a href="/images/2016/05/18/SQM2.jpg" target="_blank">Click to enlarge</a></div>
<div><img src="/images/2016/05/18/SQM2.jpg" alt=""></div>
<p><br><span>Fascinating stuff.</span></p>
<div>In most capital cities vacancy rates have declined over the past year.</div>
<div> </div>
<div>In Sydney demand has marginally outstripped supply. Even in apartment construction hotspots such as Green Square vacancy rates have reportedly fallen sharply from 3.5 per cent this time last year to just 1 per cent.</div>
<div> </div>
<div>Now sure, you might question the measurement criteria (where a new block of units is constructed only a sample of apartments might be advertised for rent, for example), but aren't the measurement criteria measuring like-for-like figures?</div>
<div> </div>
<div>
<p><span><em>PETE WARGENT is the co-founder of <a href="https://allenwargent.com/" target="_blank" rel="nofollow">AllenWargent</a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank" rel="nofollow">blogger</a>.</em><br></span></p>
<p><em>His latest book is <a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx" target="_blank" rel="nofollow">Four Green Houses and a Red Hotel</a>.</em></p>
</div>
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Melbourne and Sydney rental property vacancies down over year: Pete Wargent

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<p class="Body">Population growth does not, alone, create real estate hotspots. And it’s not the core element of a growth property market. If it was, Melbourne prices would have grown faster than Sydney’s over the past five years.</p>
<p class="Body">Population is a factor, one of many to be considered.</p>
<p class="Body">In that regard, a recent analysis of population trends written by “Glenn the Census Exert” from the .<strong><em>id</em></strong> website team makes interesting reading. It focuses on Australia’s 50 largest cities and towns, based on ABS data for the 2015 financial year.</p>
<p class="Body">It shows the prominence of Melbourne as the nation-leading city. Over the 2015 financial year and over the previous five years, Melbourne added more to its population than Sydney did. Melbourne grew 10.1 percent in five years (adding almost 400,000 people), compared to Sydney’s 8.2 percent (343,000 extra citizens). Melbourne grew 2.0 percent in FY2015, compared to Sydney’s 1.7 percent.</p>
<p class="Body">So why has Sydney’s price growth been so much higher than Melbourne’s? Because Sydney’s economy has been stronger and the infrastructure spend has been much greater than Melbourne’s. Population growth is important, but economic strength and infrastructure spending has greater influence.</p>
<p class="Body">Perth has been an outstanding population growth story as well. Although it has a smaller population than Brisbane it has added considerably more (236,000) over the past five years than Brisbane (190,000) has. In fact, over five years Perth has a higher growth rate (13.7 percent) than Melbourne (10.1 percent) but its growth has slowed markedly in recent years – so that in FY2015 Perth’s population growth rate was lower than those in Melbourne, Sydney and Brisbane. Its stellar growth stopped when the resources boom fell away.</p>
<p class="Body">Of the 50 largest urban areas in Australia, the fastest growth rate over five years was achieved by the Melton LGA on the western periphery of Melbourne, up 28 percent. Another growth area on the fringes of Melbourne, the Warragul-Drouin area, grew 14.2 percent over five years. In that same time frame, Geelong added 12,000 to its population, a rise of 7 percent. This adds to the general scenario of Melbourne as the king of population growth.<span style="line-height: 1.3em;"> </span></p>
<p class="Body">Also prominent were the Busselton (up 18.5 percent) and Bunbury (up 15 percent) areas, both south of Perth.</p>
<p class="Body">In terms of growth in FY2015, Melton was again No.1 (up 4.6 percent in 12 months), followed by Warrugul-Drouin, Busselton, Bunbury and Gladstone in Queensland (all growing between 2 percent and 3 percent over 12 months).</p>
<p class="Body">Other notable growth centres include the Sunshine Coast, which added as much to its population over five years as Canberra did, and the Gold Coast, which added twice as many people as Canberra and 10 times more than Hobart.<span style="line-height: 1.3em;"> </span></p>
<p class="Body">The percentage growth rate for the Gold Coast is no longer as high as in the past (it’s now growing from a much larger base, so spectacular growth numbers aren’t so easy), but it’s still a massive growth centre. The population of the Gold Coast-Tweed region grew 53,500 over five years, a rise of almost 10 percent. It’s the nation’s sixth largest city, with 625,000 residents, well ahead of Newcastle-Maitland and Canberra-Queanbeyan.</p>
<p class="Body">So why have Gold Coast prices down little over the past five or six years, amid all that population growth? Because developers oversupplied the market with high-rise apartments, yet again. After six down years, the market is now showing some growth, because the surplus has been soaked up and, more importantly, there’s a massive infrastructure spend happening.</p>
<p class="Body">The Sunshine Coast has been a big growth centre. Its growth rate over five years (9 percent) has been almost as big as the Gold Coast’s, and 25,000 has been added to its population. The Sunshine Coast is the nation’s 10<sup>th</sup> biggest city – larger than Wollongong and considerably larger than Hobart.</p>
<p class="Body">Similar to the Gold Coast, the Sunshine Coast has become a growth property market because of significant new spending on infrastructure and other construction projects.</p>
<p class="Body">Townsville has attracted some negative headlines lately but it’s a significant growth city, adding 16,000 or 10% to its population over the past five years, reaching 180,000. It’s growing faster than its North Queensland rival, Cairns.</p>
<p class="Body"> </p>
<p class="Body"><em>Terry Ryder is the founder of <a href="https://www.hotspotting.com.au/" target="_blank">hotspotting.com.au</a>. You can <a href="https://mailto:ryder@hotspotting.com.au" target="_blank">email him</a> or follow him on <a href="https://twitter.com/hotspotting" target="_blank">Twitter.</a></em></p>
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Population growth does not, alone, create real estate hotspots: Terry Ryder

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<p>Whilst property markets closely watch what can directly influence market sentiment in 2016 we should be watching very closely what will indirectly affect the market and just how big these influences may be.</p>
<p>I can nominate six (6) such influences that I believe will have significant repercussions on how we should be approaching the markets.</p>
<h5>1. Illegal Property Acquisitions</h5>
<p>I find this topic quite fascinating given I have always been of the belief that this practice is (or was) huge and I have not changed my opinion. In May, 2015 the then treasurer Joe Hockey set aside 60 investigators from the Australian Taxation Office (ATO) stating that from their initial investigations “they are just at the tip of the iceberg.”</p>
<p>Fast forward seven months where this week the ATO announced that it was now investigating an estimated 31 million records from 1985 to 2015. This order applies to all states and territories for not only sales transactions but also all rental agreements, landlords, weekly rents, length of lease and rental bonds. The biggest investigation into Australian real estate since 1993 when the ATO moved records to computer technologies and every real estate agency in Australia was forced into providing every transaction record.</p>
<p>So from this point forward I’m going to call this the “Please Explain Inquiry” given the ATO obviously believes that they have uncovered interesting irregularities.</p>
<p>It should also be noted that the Department for Rip Van Winkle otherwise known as the Foreign Investment Review Board (FIRB) have just appointed former ASIO director, general David Irvine, to the board. Two very big announcements in the space of a week – watch for some big announcements in 2016.</p>
<h5>2. Underquoting Reforms in NSW</h5>
<p>Not before time from 1 January 2016 real estate agents must quote the likely selling price at the figure(s) that appear on the Agency Agreement. The fines and penalties for failure to do so are severe. The NSW Government Office of Fair Trading will be out in force next year policing their prized new legislation that is a major win for consumers and ethical agents. This will also cause major problems for the habitual agents who love nothing more than buying listings through valuing properties at ridiculous prices. . Expect to see plenty of naming and shaming in 2016.</p>
<h5>3. Off – The – Plan Purchases</h5>
<p>It would be an understatement to suggest that investors are not skittish and squirming about their recent property acquisitions. What remains to be seen is how many pull the plug and walk – away from their purchases believing that Sydney’s apartment investment markets are facing a massive correction in 2016.</p>
<p>Again the NSW government has been busy rushing through more property legislation stopping developers cancelling existing contracts – sunset clauses, because the apartment prices have increased significantly. That loophole has been now shut for good.</p>
<h5>4. Council Mergers</h5>
<p>An announcement regarding the mergers is just days away although I am reliably advised that Mosman will not be forced into a merge and will stand alone. Having said that it will lose all powers regarding new apartment development approvals and this now will be handled by the state government.</p>
<h5>5. 2016 Federal Election</h5>
<p>They say that the Melbourne Cup stops the nation – well a federal election can stop the real estate markets. We can expect to hear plenty in 2016 about what’s now off the table and what’s now on the table. Two words will play a massive part and I’m not talking about negative gearing. No tax reform will be the keywords in 2016 although at this stage its anyone’s guess to what extent and just what lengths the Turnbull government will go. Whatever the case this will be a major distraction in 2016 where I’d love a dollar every time I hear the words Goods &amp; Services tax – GST.</p>
<p>This now leads me to the very big X Factor for 2016.</p>
<h5>6. X Factor</h5>
<p>The premier must have been reading my blogs with a new report from the NRMA confirming that planning is in the early stages to see a rail line from Sydney’s northern beaches through Mosman to Cremorne and Neutral Bay to the Sydney CBD.</p>
<p>The other key recommendation is for a tunnel under the Spit Bridge connecting with Seaforth and the Warringah Freeway linking up with the new harbour tunnel which eventually will connect to the WestConnex.</p>
<p>The report stated – “For decades, the northern beaches and the lower north shore has been the Bermuda triangle of transport infrastructure, where plans have come and gone to disappear without a trace.” It then went on to say “The chronic neglect has left our roads badly congested and buses at or over capacity. We believe the government must now take this opportunity to put the region back on the agenda as part of its overall drive to improve infrastructure across Sydney.”</p>
<p>The report revealed that Spit Road and Military Road were two of the worst in Sydney with higher traffic than Parramatta Road. On an average weekday, 70,000 vehicles use the Spit Bridge, 80,000 use Military Road and approximately 64,000 use Parramatta Road at Camperdown.</p>
<p>So you can expect to see high rise along Military Road and even more high density around the new suburb train stations.</p>
<p>Thank you for joining us in 2015 and we will be back with Virtual Realty News in 2016 – our 16th year. From all of us at Richardson &amp; Wrench Mosman/Neutral Bay we wish you a very Merry Christmas and a safe and happy New Year.</p>
<h5>MOSMAN – 2088</h5>
<p>• Number of houses on the market this time last year – 84</p>
<p>• Number of houses on the market last week – 55</p>
<p>• Number of houses on the market this week – 53</p>
<p>• Number of apartments on the market this time last year – 59</p>
<p>• Number of apartments on the market last week – 51</p>
<p>• Number of apartments on the market this week – 42</p>
<h5>CREMORNE – 2090</h5>
<p>• Number of houses on the market this time last year – 11</p>
<p>• Number of houses on the market last week – 11</p>
<p>• Number of houses on the market this week – 6</p>
<p>• Number of apartments on the market this time last year – 20</p>
<p>• Number of apartments on the market last week – 17</p>
<p>• Number of apartments on the market this week – 15</p>
<h5>NEUTRAL BAY – 2089</h5>
<p>• Number of houses on the market this time last year – 10</p>
<p>• Number of houses on the market last week – 8</p>
<p>•Number of houses on the market this week – 7</p>
<p>• Number of apartments on the market this time last year– 34</p>
<p>• Number of apartments on the market last week – 30</p>
<p>*Number of apartments on the market this week – 26</p>
<p><em><span>ROBERT SIMEON</span> is a director of </em><em><a href="https://www.rwm.com.au/" target="_blank" title="RWM" rel="nofollow">Richardson Wrench Mosman and Neutral Bay</a> </em><em>and has been selling residential real estate in Sydney since 1985. <br>He has also been writing real estate blog </em><em><a href="https://www.rwm.com.au/news/" target="_blank" title="Virtual Realty News" rel="nofollow">Virtual Realty News</a> </em><em>since 2000. </em></p>
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Plenty of x-factor on the 2016 property menu: Robert Simeon

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<div>There are multiple data sources for tracking property markets, but the ABS Residential Property Price Indexes series is always one worth analysing, particularly since the Reserve Bank of Australia (RBA) itself follows it closely.</div>
<div> </div>
<div>Established house prices rose by +2.2% in the third quarter to be +11.4% higher over the past 12 months, while attached dwellings rose by +1.4% to be +8.7 % higher over the year. </div>
<div> </div>
<div>While averages mask endless underlying trends, the long run data implies that on average over the past dozen years established house prices (+5.6% per annum) have been outperforming attached dwellings (+4.8% per annum), commensurate with lower initial spot yields. </div>
<div> </div>
<div><a href="/images/2015/12/15/Resi1.jpg" target="_blank">Click to enlarge</a></div>
<div><img src="/images/2015/12/15/Resi1.jpg" alt=""></div>
<div> </div>
<div>
<span>Let's step today's the key figures in three short parts.</span><br><br><strong><span style="text-decoration: underline;">Part 1 - Price indexes</span></strong><br><br><div>The star performers over the past year have been established houses in Sydney (+21.9%) and attached dwellings in the same city (+15.8%).</div>
<div>
<br>Established house prices in Melbourne have also performed strongly to be up by +11.5% over the year, but on average attached dwellings price growth in the Victorian capital has been more contained at +4.5%, reflective of the volume of new supply. </div>
<div> </div>
<div><a href="/images/2015/12/15/Resi2.jpg" target="_blank">Click to enlarge</a></div>
<div><img src="/images/2015/12/15/Resi2.jpg" alt=""></div>
<div> </div>
<div>
<div>Dwelling prices over the year have performed solidly in Brisbane (+3.8 per cent), Canberra (+4.0 per cent), Adelaide (+3.5 per cent), and Hobart (+1.7 per cent).</div>
<div> </div>
<div>On the other hand there have been moderate declines to date in Darwin (-2.0 per cent) and Perth (-3.3 per cent), although interestingly Domain Group forecasts moderate price growth to return to both cities in 2016, whereas I have previously argued that prices may follow rents down in the next calendar year. </div>
<div> </div>
<div>Since the end of 2008 Sydney (+83 per cent) and Melbourne (+51 per cent) have outperformed impressively, while prices are also now rising in Brisbane, Adelaide, Canberra, and Hobart. </div>
<div> </div>
<div><a href="/images/2015/12/15/Resi3.jpg" target="_blank">Click to enlarge</a></div>
<div><img src="/images/2015/12/15/Resi3.jpg" alt=""></div>
<div> </div>
<div>
<strong><span style="text-decoration: underline;">Part 2 - Stock value</span></strong><br><br><div>Over the past three years the total value of dwelling stock has surged +32 per cent or +$1.42 trillion higher, to a total stock value of $5.86 trillion.</div>
<div> </div>
<div><a href="/images/2015/12/16/Resi4.jpg" target="_blank">Click to enlarge</a></div>
<div> </div>
<div><img src="/images/2015/12/16/Resi4.jpg" alt=""></div>
<div> </div>
<div><span>More than 90 per cent of the gains in the value of dwelling stock over those three years have been accounted for by New South Wales (+$756 billion), Victoria (+$390 billion), and Queensland (+$131 billion), with the other states and territories accounting for the remaining +$141 billion. </span></div>
<div><span> </span></div>
<div><a href="/images/2015/12/16/Resi5.jpg" target="_blank"><span>Click to enlarge</span></a></div>
<div><span><img src="/images/2015/12/16/Resi5.jpg" alt=""></span></div>
<div> </div>
<div> </div>
<div><span>Mean dwelling prices over the past three years have exploded in New South Wales (+$236,000), and increased strongly in Victoria (+$133,000). </span></div>
<div><span> </span></div>
<div><a href="/images/2015/12/16/Resi6.jpg" target="_blank"><span>Click to enlarge</span></a></div>
<div><span> </span></div>
<div><span><img src="/images/2015/12/16/Resi6.jpg" alt=""></span></div>
<div> </div>
<div> </div>
<div>
<div>In fact, despite the recent declines in Western Australia and the Northern Territory noted above, the mean dwelling price has moved some way higher across all states and territories across a three year timeframe.</div>
<br><strong><span style="text-decoration: underline;">Part 3 - Volume of dwelling stock</span></strong><br><br><div>The final chart below helps to explain why although an increase in the dwelling supply can accentuate market downturns - particularly in smaller towns and cities - in the larger cities an increase in building activity on its own can take years to dampen prices. </div>
<div> </div>
<div>One reason for this is that new builds only ever account for a fraction of transactions in a given year, and therefore the level of available supply at any point in time is rather driven by the established or "second hand" market (another reason is that over-simplified views of the market fail to take account of how well the new supply matches demand at the LGA, suburb, and household formation level).</div>
<div> </div>
<div>Over the past four years, while the Australian Capital Territory (+10.9 per cent) and the Northern Territory (+10.1 per cent) have increased their respective number of dwellings materially, this is of course somewhat harder to achieve when you are starting from a higher base figure.</div>
<div>
<br>Despite this, Western Australia (+8.6 per cent) and Victoria (+7.9 per cent) have made valiant attempts to increase the total supply of dwellings since the the equivalent quarter 2011 according to the ABS data series.</div>
<div> </div>
<div><a href="/images/2015/12/16/Resi7.jpg" target="_blank">Click to enlarge</a></div>
<div><img src="/images/2015/12/16/Resi7.jpg" alt=""></div>
<div> </div>
<div>
<div>On the other hand, the ABS figures show that the number of New South Wales dwellings has increased by only +4.4 per cent over the past four years, which may go some of the way to explaining why Sydney's rental market has remained relatively tight to date, despite alleged overbuilding.</div>
<div> </div>
<div>Over the past three years the population of Greater Sydney has increased by around +230,000, and thus while it is easy enough to find localised areas of oversupply, after accounting for stock obsolescence, demolitions, and dwelling approvals that never make it to completion, at the city level at least the market remains relatively balanced in terms of dwelling supply (at least, for now).</div>
<div> </div>
<div>
<p><span><em>PETE WARGENT is the co-founder of <a href="https://allenwargent.com/" target="_blank" rel="nofollow">AllenWargent</a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank" rel="nofollow">blogger</a>.</em><br></span></p>
<p><em>His latest book is <a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx" target="_blank" rel="nofollow">Four Green Houses and a Red Hotel</a>.</em></p>
</div>
</div>
</div>
</div>
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Sydney house prices up 21.9% Pete Wargent

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<p>GUEST OBSERVER</p>
<p>Population growth nationally remains strong but continues to trend lower, meanwhile dwelling construction is booming creating a much closer relationship between housing supply and demand.</p>
<div>
<p>Demographic data for December 2015 was released by the Australian Bureau of Statistics (ABS). The data showed that the national population was estimated at 23.9 million persons, with the population having increased by 326,073 persons over the 2015 calendar year. The annual increase in population has fallen substantially from a peak of 459,504 persons over the 12 months to December 2008.</p>
<p>While population growth (ie housing demand) has slowed, dwelling construction has increased to record highs. Over the 12 months to December 215, there was a record-high 190,072 dwellings constructed nationally. </p>
<p>With an increasing population, and the majority of growth coming from overseas migration, additional demand for housing is created. The charts published in this report look at the ratio of population growth to dwelling completions.  A few important things to note from this analysis:</p>
<ol>
<li>The figures don’t take into consideration demolitions and homes constructed for non-permanent or semi-permanent occupation (previously estimated by the RBA at approximately 15 percent)</li>
<li>Dwelling completions data may include construction of temporary accommodation such as hotels or serviced apartments</li>
<li>An increase in population doesn’t necessarily create more demand for housing. For example a family having a baby may not create an immediate requirement for more housing while a new arrival from overseas is more likely to create additional housing demand.</li>
</ol>
<p>The latest housing and occupancy costs research from the ABS showed that the average household sizes across each state and territory in June 2014 was: 2.6 persons in NSW, Vic, Qld and ACT, 2.4 persons in SA and Tas and 2.7 persons in WA and NT.</p>
<h3>Ratio of population growth to dwelling completions</h3>
<p><a href="/images/2016/07/06/2016-07-04--nsw-qld-image1.jpg" target="_blank">Click to enlarge</a></p>
<p><br><img src="/images/2016/07/06/2016-07-04--nsw-qld-image1.jpg" alt=""></p>
<p><a href="/images/2016/07/06/2016-7-04--nt_Act-image2.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/07/06/2016-7-04--nt_Act-image2.jpg" alt=""></p>
<p>If we look at the charts, over 2015 the ratios of population growth to dwelling completions have been recorded at: 2.4 in NSW, 1.9 in Vic, 1.6 in Qld, 1.0 in both SA and WA, 0.8 in Tas, 0.4 in NT and 1.3 in ACT. </p>
<p>Based on these measures compared to the average household size it would appear that each state and territory is currently over-building however, there are some short-comings of this analysis as detailed above.  It is clear that the ratio compared to the long-run average implies that under-building is still taking place in NSW and Vic while over-building is occurring elsewhere.</p>
<p>Additionally, in most states, there has previously been a substantial undersupply of housing which will continue to overhang any overbuilding for a period of time.</p>
<p>Another thing to consider when looking at this analysis is the type of dwellings that are being constructed.  Units are becoming a much more prominent part of dwelling construction.  Units are often smaller and therefore likely to house fewer residents than a detached house which also has an impact on these figures.</p>
<p>Although this analysis doesn’t provide a definitive answer to whether too much construction is taking place it is clear that as population growth has slowed and dwelling construction has ramped-up there is now a much better relationship between housing supply and demand.  This is highlighted by the fact that in most states and territories there has been a sharp decline in the ratio of population growth to dwelling completions over recent years.</p>
<p>With many new dwellings under construction and even more approved to commence construction, developers should take heed of these figures and exercise caution when looking to undertake new projects.  As population growth trends lower and construction ramps up, housing shortages appear to be diminishing quite rapidly.</p>
<p><em>Cameron Kusher is research analyst for CoreLogic RP Data. You can contact him <a href="https://blog.corelogic.com.au/about/">here</a>.</em></p>
</div>
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