<a href="https://www.apartments.com.au/developers/skymark-group">Skymark</a>'s boutique Cronulla development Solis has secured a 10-year Latent Defects Insurance policy through Resilience Insurance, providing buyers of the 16-residence building on Ewos Parade with structural and waterproofing protection that extends a decade beyond the building's completion.

Currently under construction and due for completion in late 2027, <a href="https://www.apartments.com.au/new-apartments/solis-cronulla-8-ewos-parade-cronulla-nsw-2230">Solis</a> is one of a small number of new developments in the Sutherland Shire to carry Resilience LDI coverage, a distinction that carries increasing weight as buyer confidence in the off-the-plan sector continues to be shaped by how developers stand behind their product.

Latent Defects Insurance, which entered the Australian market in 2022 when Resilience Insurance was approved to offer the cover, protects buyers against major structural or waterproofing defects for ten years post-completion. Unlike traditional statutory warranties, it operates as a first-resort policy, if a covered defect arises, the insurer responds directly, without the buyer needing to pursue the builder or developer through a lengthy claims process.

Resilience Insurance CEO Corey Nugent has noted that the product addresses something fundamental to the new apartment market.

"The overarching feedback from prospective buyers in the new development space is that they want more confidence and assurances around the quality of the build," Nugent says.

"Resilience Insurance Latent Defects Insurance not only gives them complete peace of mind for 10 years, but it shows the developer they are buying from is standing by their product."

[smartcode_project:default project_id=150499 project_image_fid=370898]

For Solis, the Resilience LDI policy adds a meaningful layer of accountability to an already considered project. The development comprises nine two-bedroom and seven three-bedroom residences, including one dual-level three-bedroom apartment, across a five-storey building on Ewos Parade, positioned between Shelly Beach and South Cronulla.

Garden apartments connect directly to private landscaped courtyards, while upper-level homes capture beach views to the east from level four and above.&nbsp;

All 16 residences include at least one balcony or courtyard, and select apartments on the upper floors feature bar areas and secondary flexible living spaces.

Hiba Sander, Managing Director of Skymark, says Solis offers a rare balance, nestled between the quiet beauty of secluded beaches and the lively charm of South Cronulla's esplanade.

"It's a place to choose your pace and live gracefully, seaside'," Sander says.

[smartcode_project:default project_id=150499 project_image_fid=370900]

The architecture, designed by <a href="https://www.apartments.com.au/architects/ida-design-group">IDA Design Group</a>'s Michael Trinh, draws from the natural erosion patterns of <a href="https://www.apartments.com.au/developments/cronulla-nsw-2230">Cronulla</a>'s sandstone headlands, translating the organic forms of the coastline into soft curves, pavilion-style massing, and a material palette chosen for longevity in a salt-tinged environment.&nbsp;

Textured natural stone, soft renders, and timber-look battens reference the tones of the surrounding cliffs, while the building has been oriented to maximise natural light and passive ventilation, with primary living spaces facing north and east to capture morning sun and sea breezes.

"At Solis, our aim was to create architecture that feels quietly confident, grounded in natural materials like stone and timber, and elevated by light and landscape," Trinh says.&nbsp;

"The buildings are designed to sit gently within their coastal surrounds, with expansive glazing and abundant greenery creating a seamless dialogue between inside and out."

[smartcode_project:default project_id=150499 project_image_fid=370897]

Interiors by <a href="https://www.apartments.com.au/architects/hot-black">Hot Black</a> carry the same material language through to every room. Kitchens feature integrated Gaggenau appliances, sculpted stone benchtops, and Lo &amp; Co joinery, while bathrooms feature natural stone, timber, and brushed metal finishes.&nbsp;

Hot Black Founder and Design Director Sophie Safrin describes the intent as one of considered restraint: "At Solis, every detail has been thoughtfully considered to create a timeless coastal retreat, calm, refined, and effortlessly liveable. From natural finishes to seamless indoor-outdoor flow, Solis offers a quiet elegance that's deeply connected to its surroundings.

The landscape, designed by Julian Brady of <a href="https://www.apartments.com.au/landscape-architect/sitedesignstudios">Site Design Studios</a>, treats green space as an integral part of the resident experience rather than an afterthought.&nbsp;

"Gentle curves and layered native plantings mirror the ebb and flow of the ocean," Julian Brady says, "creating a serene connection between architecture and place."&nbsp;

Coco Republic has provided bespoke furniture packages tailored to the project's coastal palette.

[smartcode_project:default project_id=150499 project_image_fid=370899]

Skymark has an established track record in the Sutherland Shire, with a portfolio spanning Cronulla, Woolooware and Burraneer that includes Isla, Sylva, Bask, Shells, Sula and Mist. Securing LDI on Solis reflects a broader shift in how the developer is positioning its buildings to buyers, at a time when Resilience Insurance expects the policy to become mandatory in New South Wales by 2028.

Sales at Solis are launching soon through Ray White Projects, with an official event scheduled for 11 June. Enquire for more information.

[smartcode_project_cta:default project_id=150499]

Joel Robinson

Skymark takes out 10-year Resilience Insurance LDI at Solis Cronulla

Investors may soon find themselves with fewer reasons to buy established property and more incentives to look towards the new apartment market.

Proposed changes to negative gearing and capital gains tax concessions would see new and off-the-plan apartments retain access to the tax benefits, while established properties would miss out, creating a clear advantage for buyers purchasing newly built housing.

The policy direction aligns with what many developers have been saying for several years. Australia needs more housing supply, and governments are increasingly looking for ways to encourage investment into new stock rather than existing homes.

The challenge for investors is that suitable product is becoming harder to find.

For much of the last decade, one-bedroom apartments were the cornerstone of investor demand. They offered a lower entry price, strong rental appeal, and were a common feature across most apartment developments.

Today, the development pipeline looks very different.

Across both New South Wales and South East Queensland, developers are increasingly targeting owner-occupiers and downsizers, delivering larger two, three and four-bedroom apartments in response to changing buyer preferences. While one-bedroom apartments still exist, they now form a much smaller portion of many new projects.

That shift has created a shortage of investor-friendly stock, particularly in well-located projects close to transport, employment hubs and lifestyle amenity.

At the same time, rising apartment prices have pushed many new developments beyond the reach of traditional investors. On the Gold Coast and across South East Queensland, it's becoming increasingly difficult to find new apartments priced around the $1 million mark, particularly those offering strong rental fundamentals and long-term growth prospects.

We've rounded up four new apartment developments where investors can still secure a foothold in the market for around $1 million or less.

<h2 data-end="1140" data-start="844">Flourish Soleira</h2>

<h2>Priced from: $1.07 million</h2>

Popular Palm Beach developer Sherpa is soon to officially launch its newest local apartment development, Flourish Soleira.

The one-bedroom apartments in the building were only offered to first home buyers rather than investors, and all of those have been snapped up. The two-bedroom apartments will start from $1.07 million, and the three-bedrooms, still a good investment given the popularity of Palm Beach for owner-occupiers, starting at $2,045,000.

&nbsp;

[smartcode_project:default project_id=150017 project_image_fid=370964]

Flourish Soliera will comprise 153 apartments across two buildings, connected by a skybridge, the first ever delivered in the suburb.

True to Sherpa's booming Flourish brand of apartment projects, Flourish Soleira will have extensive rooftop amenity across both buildings including a&nbsp;wellness centre with gym, work from home, yoga, pilates, a&nbsp;heated pool, private dining rooms, pizza oven and barbecues, basketball court, and golf simulator.

<h2>Corallo, Palm Beach</h2>

Priced from: $841,500

Nearby Flourish Soleira is Changfa Group's beachfront-inspired Corallo development. They still have some one-bedroom apartments remaining, priced from $841,500.

The 105-apartment project on Palm Beach Avenue is otherwise dominated by larger two and three-bedroom residences, many of which are aimed at owner-occupiers and downsizers.

[smartcode_project:default project_id=112194 project_image_fid=808]

For investors, the appeal lies in Palm Beach's continued transformation from a laid-back beachside suburb into one of the Gold Coast's most sought-after residential markets. Residents at Corallo will be within walking distance of Palm Beach's surf beaches, the recreational amenity of Tallebudgera Creek, and the increasingly popular collection of cafes, restaurants and boutique retailers along the suburb's central dining precinct.

<h2>Corner House, Stones Corner</h2>

<h2>Priced from: $880,000</h2>

One of only two Brisbane apartment developments to make the list with prices under $1 million is DeMartini Fletcher's Corner House development in Stones Corner.

One-bedroom apartments start from $880,000 within the 88-apartment development, providing investors with exposure to one of Brisbane's most established inner-south locations.

[smartcode_project:default project_id=149098 project_image_fid=330594]

Stones Corner has long been supported by strong tenant demand due to its proximity to major employment and education destinations. The suburb sits less than five kilometres from Brisbane's CBD and is within easy reach of the Princess Alexandra Hospital, Greenslopes Private Hospital, Queensland Children's Hospital and several university campuses.

The project's location within a walkable urban village environment, surrounded by retail, dining and public transport infrastructure, continues to attract both professionals and healthcare workers seeking accommodation close to work.

Parkdrive Apartments, Chermside

Priced from: $749,000

The most affordable apartments across Brisbane's new and off the plan market are in Chermside where developer AusDev is selling one-bedroom apartments from $749,000, and two-beds from $929,000, at its recently launched Parkdrive development.

The development is strategically positioned in one of Brisbane's largest employment and retail precincts, placing residents within easy walking distance of Westfield Chermside, The Prince Charles Hospital, St Vincent's Private Hospital Northside and the suburb's major bus interchange.

[smartcode_project:default project_id=152125 project_image_fid=363782]

Already under construction and scheduled for completion in early 2028, Parkdrive benefits from Chermside's ongoing evolution into Brisbane's northern metropolitan centre. The suburb continues to attract significant public and private investment, supporting population growth and underpinning long-term rental demand.

For investors focused on yield and tenant depth, the combination of healthcare, retail and transport infrastructure within close proximity provides a strong foundation for occupancy and rental performance.

Investors to turn to new apartments after Federal Government changes spark hunt for Queensland's best $1 million apartments

A mix of Gold Coast locals, fly-in, fly-out purchasers from Sydney and Melbourne, and Brisbane-based families has driven early sales success at Broadbeach's newest apartment tower, Lumara.

The 26-level project, a joint venture between builder-developer 5Point Projects and Bourke Projects, comprises just 37 luxury residences and is attracting a buyer profile that is looking for exclusivity, above the most amenity-rich suburb on the Gold Coast.

[smartcode_project:default project_id=150454 project_image_fid=364156]

Jamie Bourke, Director of Bourke Projects, says every buyer secured so far intends to use Lumara as a lock-up-and-leave residence, combining holiday use with the ability to work remotely when required.

“The size of the apartments, both half- and full-floor options, and the different zones within the floorplans, lends itself perfectly to dedicated home office setups and multi-generational family holidays,” Bourke says.

That flexibility has become a key drawcard for affluent buyers seeking a second residence on the Gold Coast without sacrificing the ability to conduct business away from their primary home base.

The absence of holiday letting within the building has also resonated strongly with purchasers.

“This type of buyer doesn't need to generate holiday rental income,” Bourke says. “They're paying for exclusivity, privacy and certainty around who their neighbours are.”

[smartcode_project:default project_id=150454 project_image_fid=366491]

The strong demand comes amid broader shifts in the high-end apartment market following the Federal Budget announcements in May.

“We were already seeing strong enquiry from high-net-worth buyers, but that has only accelerated since the policy changes,” Bourke says.

“A lot of those buyers are looking to place more capital into premium lifestyle assets rather than investment-grade stock that has been targeted by the Federal Government.”

[smartcode_project:default project_id=150454 project_image_fid=366486]

Designed by Cottee Parker, Lumara adopts a slender, sculpted form with an emphasis on natural materials suited to its beachfront setting. The architectural approach draws on coastal influences, with a palette of stone, timber and concrete selected for durability and the ability to weather over time.

Apartments are limited to three and four-bedroom configurations, with a maximum of two residences per floor through the mid-levels and a selection of full-floor and dual-level homes in the upper levels. All apartments are oriented to the north to maximise natural light, cross-ventilation and views across the ocean, city skyline and hinterland.

A two-level amenity offering is positioned high within the building on levels 20 and 21, conceived as a sky wellness retreat. Facilities include a magnesium pool, spa, sauna and steam rooms, alongside more social spaces such as a private dining room, resident lounge, workspaces and outdoor barbecue areas integrated with landscaped greenery.

The uppermost levels are reserved for larger-format residences, including several full-floor homes and a dual-level penthouse with its own private wellness features and recreational spaces.

&nbsp;

To give buyers confidence, 5Point and Bourke commenced construction ahead of the apartments launching to the market, a sure-fire way to prove they mean business, and the building will be delivered. They are targeting a 2028 completion date.

[smartcode_project_cta:default project_id=150454]

Locals, interstate holiday makers, drive early sales at Lumara, Broadbeach's newest luxury apartment tower

Often when it comes to purchasing property, the biggest barrier to entry is the deposit. Buyers of established homes typically aim for a 20 per cent deposit to avoid the added cost of Lenders Mortgage Insurance, while most property transactions require around a 10 per cent deposit when contracts are exchanged.

The off-the-plan market works differently, with buyers typically paying a deposit during construction and settling the balance upon completion. As completion approaches at <a href="https://www.apartments.com.au/new-apartments/fabbrica-fitzroy-369-gore-street-fitzroy-vic-3065">Fabbrica Fitzroy</a>, developer <a href="https://www.apartments.com.au/developers/pace-development-group">Pace</a> is making it easier for buyers to secure a residence through a deposit-matching incentive. Purchasers need only contribute a five per cent deposit*, with Pace matching the remaining five per cent.

The offer comes as Pace unveils a completed display apartment and townhouse, now available for inspection by appointment ahead of the project's Spring completion.

[smartcode_project:default project_id=139552 project_image_fid=371009]

Designed by <a href="https://www.apartments.com.au/architects/sjb-architects">SJB</a> with interiors by <a href="https://www.apartments.com.au/interior-designers/winwood-mckenzie-architecture">Winwood Mckenzie</a> and landscaping by <a href="https://www.apartments.com.au/landscape-architect/acre">Acre</a>, Fabbrica draws on Fitzroy’s industrial and manufacturing history, incorporating references to the former Argyle Shirt Factory and Life Savers Confectionery Company that once occupied the site.

The development comprises 85 residences, spanning low-maintenance apartments through to larger-format townhouses with private street access and double lock-up garages, a relatively uncommon offering in Fitzroy’s higher-density apartment market.

Pace says the project has been designed to appeal to buyers seeking inner-city convenience without sacrificing space, flexibility, or amenity.

[smartcode_project:default project_id=139552 project_image_fid=371016]

Inside the residences, Winwood Mckenzie has focused on adaptable layouts and integrated detailing, with features including custom joinery, and concealed storage solutions. The material palette leans into warm, tactile finishes intended to complement the building’s industrial architectural language.

Fabbrica’s rooftop amenity is a key part of the project offering. Spanning around 800 sqm, the communal rooftop includes a private dining room, communal kitchen, lounge spaces, work-from-home zones, and outdoor dining areas overlooking the Melbourne CBD skyline.

[smartcode_project:default project_id=139552 project_image_fid=371017]

Landscape architecture studio Acre has introduced a layered rooftop garden designed to soften the urban setting while creating a more communal environment for residents.

The Fitzroy location also positions residents within walking distance of Brunswick Street, Smith Street, parks, cafés, galleries, and public transport, while remaining only minutes from Melbourne’s CBD. The project has an enviable Walk Score of 96.

[smartcode_project:default project_id=139552 project_image_fid=371025]

Pace, which is also delivering the project as builder, has developed more than 100 projects across Melbourne over the past three decades. The vertically integrated approach has become increasingly common among developers seeking greater control over construction delivery amid broader market pressures affecting the apartment sector.

The strikingly contemporary Gore Street development is now around 70 per cent complete, with purchasers expected to move into their new homes in Spring 2026. A limited number of residences remain available under the current deposit match offer.

*Conditions apply in relation to the deposit match offer.

[smartcode_project_cta:default project_id=139552]

Pace offers five per cent deposit match at Fabbrica Fitzroy ahead of Spring completion

Sydney developer Hyecorp's roots on the Lower North Shore stretch back three generations, and that deep understanding of the market continues to shape where and how it develops today.

From high-rise towers to boutique apartment projects, the family-run developer has built its reputation by focusing on a part of Sydney it knows intimately. Founded by Michael Abolakian in the early 1990s, Hyecorp is now led by his sons Stephen, Troy and Patrick.

Stephen Abolakian, joint managing director alongside Troy, has spent more than two decades in the business, overseeing development, planning, finance, marketing and sales.

Abolakian says the developer's disciplined focus on where it chooses to operate has been, and continues to be, one of Hyecorp's greatest strengths.

“We know the buyer profile exceptionally well,” Abolakian says.

“The demographics between places like Willoughby, Chatswood, St Leonards and Roseville are very similar. There are nuances between suburbs and projects, but culturally and from a buyer perspective, there’s a strong overlap.”

That buyer has historically been overwhelmingly owner-occupier driven.

Unlike many Sydney apartment developers that have traditionally relied heavily on investor demand, Hyecorp’s projects have typically attracted downsizers, upsizers, rightsizers and family owner-occupiers seeking long-term homes rather than short-term investments.

“Historically, investors have been a much smaller portion of our demand profile,” Abolakian says.

“We design for owner-occupiers. We don’t design for yield, we design for comfort, amenity, family living and long-term usability.”

That philosophy extends well beyond apartment layouts.

From landscaping and communal gardens to shared amenities and circulation spaces, Hyecorp’s developments are designed around how people actually live, something Abolakian believes has become increasingly important in Sydney’s apartment market.

“There was probably a period where having an approved project in market was enough,” he says.

“There wasn’t as much competition and if you built it, buyers would come. That’s no longer the case.”

“There’s more supply in the pipeline now, particularly with TOD precincts and low and mid-rise reforms opening up opportunities across Sydney. Buyers have more choice, so if you get the product wrong, they’ll simply go elsewhere.”

[smartcode_project:default project_id=110379 project_image_fid=311393]

The shift has forced developers to become more sophisticated in how they approach apartment design, particularly as owner-occupier expectations continue to rise.

For Hyecorp, that means thinking beyond who the buyer is today and designing for who they may become in five or 10 years' time.

“People buying now often aren’t moving in for several years,” Abolakian says.

“You might have a young couple buying today, but by the time they move in they may have children, older children, or changing lifestyle needs. You’ve got to think about how families evolve.”

That thinking also shapes Hyecorp’s approach to amenity, which positions wellness at the forefront.

[smartcode_project:default project_id=149594 project_image_fid=362634]

While resort-style facilities have become increasingly common marketing tools across Sydney apartment developments, Abolakian says the challenge is ensuring amenities are genuinely usable and appropriate for the scale of the project.

“If amenities are done right, they can materially improve the living experience,” he says, adding however that if you&nbsp;overdo it or get it wrong, you can end up with facilities nobody uses that simply create ongoing strata costs.”

That balance is something Hyecorp is aiming to strike with projects like Roseville Avenue, one of the group's upcoming Lower North Shore developments, which Abolakian describes as bringing a resort-style living experience into a metropolitan setting.

“It’s about creating something that feels special without being excessive,” he says.

“Good gardens, quality apartments, thoughtful amenity. Creating that resort feeling in a metro location.”

<img alt="Hyecorp" data-entity-type="file" data-entity-uuid="13c4c0f3-b1b7-44cf-9344-0b3d1d07797a" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-06-02%20at%2012.14.57%E2%80%AFPM.png?VersionId=9OLWjyj2bYkDV35F78WJnyMSPfc2bJ2z" />

The focus on owner-occupier product comes as Sydney’s apartment market continues to navigate a difficult development environment.&nbsp;For Hyecorp, maintaining an in-house operating model across construction, sales, marketing and development management has become increasingly important in navigating that environment.

“We’ve always believed in keeping a lot of the process in-house,” Abolakian says.

“It creates efficiencies, but it also creates quality control. You can make faster decisions and ensure the end product stays aligned with the original vision.”

Despite the challenges, Abolakian believes demand for quality owner-occupier apartments across Sydney remains strong beneath the surface, particularly across established Lower North Shore suburbs where downsizers continue to seek new housing options close to existing communities.

“There are definitely people waiting,” he says.

“Once some of the broader uncertainty settles, whether that’s the global environment or some of the local economic noise, I think the right projects will perform very strongly.”

Hyecorp currently has three residential developments on the market across Sydney’s Lower North Shore.&nbsp;Audrey, St Leonards, positioned opposite Newlands Park, is nearing completion and preparing to welcome its first residents, with the project now almost sold out.

Hyecorp has also recently launched&nbsp;<a href="https://www.apartments.com.au/new-apartments/celine-chatswood-37-archer-street-chatswood-nsw-2067">Celine Chatswood</a>, an architectural tower, while continuing to deliver&nbsp;<a href="https://www.apartments.com.au/new-apartments/juliet-roseville-64-pacific-highway-roseville-nsw-2069">Juliet Roseville</a>, a more boutique scale of development with just 34 apartments.

Why Hyecorp continues to back Sydney's Lower North Shore apartment market

Residential Property

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Houses in Newcastle, the New South Wales Central Coast and Coffs Harbour are at the peak of market, according to valuation firm Herron Todd White’s June property clock.
Melbourne, the Gold Coast and South East NSW are approaching the peak market.
Houses in Cairns, Gladstone and Mackay are at the bottom of the market. 
Toowoomba’s housing market was noted as starting to decline in the May property clock.
Last month HTW said in relation to the Toowoomba housing market there is currently an oversupply of residential products, particularly units, that emerged during 2016.
As a result vacancy rates have increased while rental rates and investor interest has reduced.
“While properties in the sub $400,000 market have showed some signs of regression in value and rental rates, it appears that higher end property above $600,000 and even the $1 million plus price point have enjoyed a good level of interest with some strong sales being achieved,” the May report stated.
<a href="https://www.propertyobserver.com.au/images/2017/06/06/Screen%20Shot%202017-06-07%20at%209.27.21%20AM.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/06/06/Screen%20Shot%202017-06-07%20at%209.27.21%20AM.png" alt="">
HTW's June report concentrated on the renovation market, stating that renovations are popular now in the NSW Central Coast.
In their June report, HTW said some reasons for renovating are to make an income, improve the value of a property or overcome the need to shift homes, meaning the kids can remain at the same school and a longer commute to work can be avoided.
"Closely aligned with adding value, those starting out with limited budgets or borrowing capacity buy in less expensive areas and carry out renovations to increase their equity.
"Although not definitive, a good gauge of what stage the property cycle is at can be seen from the valuation requests we receive. We can analyse this from the property type and specifics of the request – for a new purchase, a change from one lender to another or funds required to carry out renovations or extensions.
"Lately, there has been a slight increase in renovation or extension on completion assessments.
"This tells us the market cycle is on the move again and this generally follows a period of growth where values of home purchases are getting beyond many upgraders and a decision is made to stay and renovate rather than move. 
We are seeing this growing in many parts of the central coast region.
"From our perspective, we see more valuation requests received for owner-occupiers seeking funds to carry out renovations.
"We believe the reason for this is that owner-occupiers tend to spend more on renovations or extensions to improve personal comfort or functionality with the medium to long term in mind – think that often used term ‘forever home’.
"Whereas, investors usually spend less on make overs and use their own funds with the prime motivation of increasing the returns for as small an outlay as possible.
"Properties available for renovation can be located close to the main centres or the beach and lakefront areas. They’re the ones advertised as having enormous potential, renovate or detonate, suited for tradies and similar. They can just as easily be located in those suburbs previously seen as undesirable but thanks to the strong market over the past few years, have proven affordable to new entrants in the market. Suburbs that spring to mind in this region include Narara, Niagara Park, Killarney Vale and Berkeley Vale."
HTW said property in Newcastle is at the point of the cycle where it’s a fine line between upsizing your current dwelling or simply staying put and adding value to your existing home with an extra couple of rooms.
"The option to stay and extend is attractive when you look at the savings you would make on the transactional aspect of moving to a new home," HTW said.
"You save stamp duty, agent’s fees, finance charges and moving costs which on a reasonable home can be close to $100,000 in real dollars. Utilising that money on your extension can really kick start your plans. 
"The key driver of the Newcastle and Lake Macquarie markets at present is the lack of stock available; essentially the supply side is very low. When you have a low supply side, as long as demand is reasonable and constant, this can place upward pressure on prices. This in turn raises values and in many cases the price has increased enough to set a new benchmark level for your land.
"The increased price of the underlying land may be such that it is economic to knock down your existing home and build a brand new house.
"As an example, you may have purchased your home originally for $350,000 in 2005. Your house may be worth $650,000 now (not unreasonable here in Newcastle). Your underlying land value might be $450,000 which far outstrips your initial purchase price and makes building a brand new home where you currently live more feasible.
"We note that builders’ prices and waiting periods are signi cantly up across the board which indicates strong demand for renovations and extensions. We often see builders’ trucks in quiet suburban streets clogging up both sides of the road with extensions and small building projects.
"Anecdotally the home renovation boom is very much the avour of the moment with the number of renovation programs on TV indicative of current trends. At present, in strong localities it appears quite hard to over capitalise with sales seemingly attaining record prices on a weekly basis."
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jonathanchancellor-7SQnKwU6yx

Newcastle, Central Coast and Coffs Harbour houses at market peak: HTW

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GUEST OBSERVER
Australia’s household debt has been rising and is high by international standards.
The household debt-to-income ratio has risen from 167 percent in 2011 to 190 percent in Q4 2016. Assessing how much to worry about this is not straightforward.
On the one hand, high levels of debt make the economy more vulnerable to a negative economic shock. On the other hand, appropriately allocated debt is an engine of economic growth, as it better allocates resources between savers and investors.
Our long held view is that high household debt is not, in itself, a problem, as long as it is held by households that can continue to service it. The problem faced by many economies during the global financial crisis, such as the US and Spain, was that household debt was misallocated to households that could not service it. In Australia, the latest available statistics suggest that the distribution is fairly favourable.
As at 2014, most of the debt was held by high income earners and there were few low income households with large debt servicing burdens. In addition, Australia does not have sub-prime borrowers and all of the mortgages are full recourse.
<a href="https://www.propertyobserver.com.au/images/2017/05/16/Screen%20Shot%202017-05-17%20at%208.14.17%20AM.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/05/16/Screen%20Shot%202017-05-17%20at%208.14.17%20AM.png" alt="">
However, household debt has risen since 2014 and there has been an investor-led house price boom in Sydney and Melbourne. As a result, it is hard to be certain about how much risk has built up recently. The longer it goes on, the more difficult it is to judge. It is for this reason that prudential settings have been tightened and that RBA Governor, Mr. Phil Lowe, has repeated that it would not be in the ‘public interest’ to cut interest rates further if it provided another boost to housing prices and debt.
In its recent financial stability review, the RBA deemed that, given lending standards have been tightening, the key risk from rising household debt is to the macroeconomic cycle rather than financial stability.
The central bank’s own granular assessment is that any build-up of risks that could see rising defaults in a downturn is not large enough to be a financial-system-wide risk. Rather, they suggest the key risk is that the higher household leverage could amplify the economic cycle. We expect that concerns about high and rising household debt will be a key factor that keeps the RBA from cutting its cash rate further. We expect prudential settings to remain tight. 
Household debt is high, but mostly for fundamental reasons
Australia has high household debt and it has been climbing further in recent years. Indeed, across the range of economies regularly tracked by the Bank of International Settlements, Australia has the second highest level of household debt, relative to nominal GDP (Chart 1). In contrast, corporate debt is about average and public debt is low by international standards.
At the outset, a key question is: why is household debt high? In Australia, high household debt reflects that: firstly, the bulk of the housing stock, including the rental properties, is owned directly by the household sector using leverage, which is not the case across many nations; and, secondly, that housing prices are fairly high when compared with household incomes.
On the first point, this is because the owner-occupation rate is high, at around 68%, and because the bulk of the rental properties are also owned by the household sector directly. In Australia, investment properties, which are then rented, are a tax-favoured investment. So, unlike most other economies, including the US, for example, the stock of rental properties involves debt on the household balance sheet, rather than the corporate balance sheet. As a result, around one-quarter of Australia’s household debt is held by investors, which is a key reason that household debt levels are higher in Australia than elsewhere (Chart 2).
On the second point, Australia’s housing prices are fairly high relative to household incomes, although they are not exceptionally so (Chart 3). Australia’s housing-price to income ratio is around 5 times, which is a similar level to the UK, Ireland, Denmark, Spain, and the Netherlands. 
<a href="https://www.propertyobserver.com.au/images/2017/05/16/Screen%20Shot%202017-05-17%20at%208.17.13%20AM.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/05/16/Screen%20Shot%202017-05-17%20at%208.17.13%20AM.png" alt="">
For Australia, housing prices are high for a range of reasons, including relative economic success in the form of continued growth, low interest rates, strong population growth, and high foreign demand, in the face of limited supply.
<a href="https://www.propertyobserver.com.au/images/2017/05/16/Screen%20Shot%202017-05-17%20at%208.18.25%20AM.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/05/16/Screen%20Shot%202017-05-17%20at%208.18.25%20AM.png" alt="">
Some of these factor are cyclical, such as low interest rates, while others are structural. A key structural factor is limited housing supply. The supply of well-located housing has been limited by planning regulations and poor urban infrastructure. As a result, Australia has very low rates of urban density despite being a largely empty continent (Chart 4). Although there has been a ramp up in residential construction in recent years, in the largest city, Sydney, there is still not enough being built to meet demand (see Downunder Digest: Apartment building boom is nearing its end, 10 January 2017).
It’s the distribution of debt that matters the most
If the overall high level of household debt is driven by fundamentals, then what’s the worry? Part of the concern is that debt has been climbing recently, and that the rise has been driven by investors, rather than owner-occupiers (Chart 5). Again, even this is not worrisome, as long as the new borrowers are expected to be able to continue to service the debt. Thus it is the distribution of debt that matters the most, a point we have made before (see Downunder Digest: Australia’s rising household debt: should we worry?, 22 April 2016). The challenge is that there is considerable uncertainty about the distribution of debt and that this uncertainty rises when growth in debt is driven by new borrowers.
In Australia’s case, the key cross-sectional survey from 2014 shows quite favourable trends. 
<a href="https://www.propertyobserver.com.au/images/2017/05/16/Screen%20Shot%202017-05-17%20at%208.19.28%20AM.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/05/16/Screen%20Shot%202017-05-17%20at%208.19.28%20AM.png" alt="">
The survey shows that the bulk of the household debt is held by high-income earners, with 74% of the debt held by the top 40% of income earners. The survey also shows that most of Australia’s highly-indebted households (those with debt-to-income ratios in the top 10th percentile of debt holders) are also high-income earners (Chart 6).
Australia’s financial regulatory environment is also strong. All mortgages are full recourse and there is no sub-prime lending. Australians also have an incentive to pay down their mortgages ahead of schedule, as they cannot deduct the expenses associated with their owner-occupied housing, such as mortgage interest, against their other taxable income. As a result, the average mortgage holder is around 21⁄2 years ahead on their mortgage payments (when offset accounts and redraw facilities are included). This means that the average borrower has a significant buffer on which to draw in the event of job loss or some other negative income shock.
So what is the concern? First, the information on the distribution of debt is from 2014 and we know that household debt has risen since then. We do not know much about the distribution of the new debt, although we do know that the bulk of it has been for property investors. On the positive side, historically, investors have been less likely to default on mortgages than first home buyers as investors tend to have equity in an owner-occupied property, and tend to be older and higher-income households with a loan repayment history. On the negative side, we do not know much about the new investors in recent years, although we know that the prudential regulator has been tightening its settings since late 2014 to prevent an excessive build-up of risk.
Second, although the average mortgage holder has a significant buffer, it is not the average borrower that typically defaults. At the riskier end of the spectrum of borrowers there is evidence of mortgage holders with only slim buffers against a negative income shock. For example, in a recent speech (4 May 2017), the RBA Governor, Mr. Phil Lowe, referred to data on securitised loans which showed that about one-third of borrowers only have a one-month buffer.
However, in that same speech Governor Lowe relayed that the RBA’s own assessment, with full access to all of the granular lending numbers, was that the risk of rising household debt levels was not to financial stability but to the macroeconomic cycle. Given that lending standards have been tightened and that risky loans are still only a small share of financial system liabilities, a large enough rise in loan defaults to shake the overall financial system is unlikely.
What happens when housing price growth slows?
<a href="https://www.propertyobserver.com.au/images/2017/05/16/Screen%20Shot%202017-05-17%20at%208.20.23%20AM.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/05/16/Screen%20Shot%202017-05-17%20at%208.20.23%20AM.png" alt="">
The RBA’s concern is that, when housing price and household credit growth slow down, this could exacerbate the economic cycle. Sydney and Melbourne have had significant housing prices booms in recent years, although it has been quite concentrated to these cities (Chart 8). 
<a href="https://www.propertyobserver.com.au/images/2017/05/16/Screen%20Shot%202017-05-17%20at%208.21.27%20AM.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/05/16/Screen%20Shot%202017-05-17%20at%208.21.27%20AM.png" alt="">
Sydney and Melbourne housing prices have risen 77 percent and 58 percent over the past five years, while housing prices are only 14 percent higher in the rest of the nation.
The RBA’s argument is that the eventual slowdown, or fall, in housing prices and easing in the pace of household credit growth could weaken overall economic growth, particularly growth in household consumption.
While a slowdown in housing activity would, no doubt, have some effect, it may not be as large as in the past. Indeed, there is clear evidence that the recent ramp up in housing prices and household debt has had little impact on households’ willingness to borrow to consume goods and services. Unlike the early 2000s housing boom, households have not been withdrawing equity from their properties, but rather have been injecting it in recent years (Chart 9). If there has not been a significant positive wealth effect from rising housing prices and household debt, any slowdown in these factors may also have a more muted effect than in the past.
A key counter-argument is that the household saving rate has been falling in recent years, which provides some evidence of a positive wealth effect (Chart 10). That is, households may have been more willing to lower their saving out of income because their wealth has been rising.
However, the state-level numbers suggest that this story is a bit more nuanced. The biggest fall in the saving rate has occurred in Western Australia, following a sharp rise earlier. This reflects the impact of the mining boom, which boosted incomes significantly in that state prior to 2011/12 and where incomes have fallen since. Western Australian households saved when income growth was strong and have been saving less recently, in line with what a permanent income model might suggest.
However, the saving rate has not moved much in New South Wales and Victoria, where the housing markets have been booming recently. This suggests that the wealth effect has, in fact, been quite small in these states, consistent with the housing equity withdrawal numbers.
In our view, when the housing markets in Sydney and Melbourne cool, which we expect to be the case this year and next, we do not expect a large negative wealth effect.
For the RBA, the idea of the overall economic cycle being exacerbated by the housing cycle is clearly a concern. In our view this concern would suggest an earlier tightening, rather than a later one, though. If the concern is not allowing the housing boom to continue too long, because the end of the boom could cause problems, the risk-averse approach is likely to be higher rates, not lower ones. 
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<a href="https://www.about.hsbc.com.au/hsbc-in-australia/management-team" target="_blank">PAUL BLOXHAM</a> IS CHIEF ECONOMIST (AUSTRALIA AND NEW ZEALAND) FOR HSBC. 
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jchancellor-FAypfDUnLy

How worrisome is Australia’s high household debt? Paul Bloxham

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The changing dynamic of home ownership in the US post-GFC, where Generation Y have transformed into Generation Rent, offers opportunities for Australian investors, says a study by AMP Capital.
The demographic shift leading to a steady decline in home ownership and its implications for real estate investors and the opportunities within the US apartment REIT sector has been dealt with in AMP Capital’s whitepaper, Generation Rent, authored by its Client Portfolio Manager for Global Listed Real Estate Chris Deves.
“The ever-changing consumption pattern of real estate, juxtaposed against its status as perpetual imperative for a functioning society, presents an interesting dynamic and is precisely that which offers a wide range of opportunities for long-term investors,” says Deves.
The rise of the millennial generation and its implications for the residential market in the United States is a case in point, he adds.
“The greater propensity for millennials to rent isn’t necessarily a surprise. After all, this is the same generation that pioneered the ‘sharing economy’, a collaborative approach to consumption, which draws heavily on the notion of renting,” said report author Chris Deves.
Millennials are opting for proximity to nightlife, restaurants and the workplace along with access to shared spaces and amenities, which is translating into greater demand for rented apartments in the urban core, he says. 
“As a demographic cohort, the strong willingness of millennials to relocate in the pursuit of new career opportunities necessitates flexibility and mobility, which is also more conducive to renting over owning.”
The paper shows this is an important tailwind for US apartment REITs, which make up roughly 8 per cent of the global listed real estate benchmark or more than US$100 billion of equity market capitalisation.
The development in American dwelling habits is a positive for residential landlords, which in turn is investible via the listed institutional apartment operators. 
US-based apartment REITs make up roughly 8 per cent of the global listed real estate benchmark, or more than US$100 billion of equity market capitalisation, the third-largest US sector behind mall and office owners. The apartment REITs are generally of high quality and have seen significant consolidation in recent times – five such REITs have been acquired or have merged during the past three years alone – leaving an investible set of large, well-capitalised companies with seasoned management teams, according to the AMP report.
“This has made apartment REITs attractive for real estate investors with a long-term investment horizon,” Deves said.
<a href="https://www.propertyobserver.com.au/images/2017/04/19/USHomeOwnership.jpg" target="_blank">Click to enlarge</a>
 <img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/04/19/USHomeOwnership.jpg" alt="">
The assets held by these listed apartment REITs are predominantly located in the urban core where renting is most common. The change towards rentership (and, thus, migration into the city) is a positive for increasingly dense and difficult-to-build-in urban property markets. Additionally, an increasing focus on public transportation links should further benefit the high-quality apartment names.
Enter the Millennials
According to the white paper, the fall in the homeownership rate in the aftermath of the GFC was in part due to the rise in defaults on home loans. Though the default rate has recovered to 4 percent in 2016 from 11.3 per cent in early 2010, the declining trend of home ownership has sustained over the longer term.
Now, America is undergoing a major demographic shift. Millennials – or those born between 1980 and 2004, according to the US Census Bureau – are now the largest share of the American workforce, as depicted in Figure 4. By 2025, Millennials will represent 75 per cent of the American workforce [Source: US Bureau of Labor, 2016]. As the largest source of new demand for housing, be it home sales or rentals, this cohort wields significant influence over the residential real estate market.
The most important trend underlying the Millennial demographic is a greater propensity to rent, particularly in the urban core, at the expense of homeownership. 
The movement of the prime renter demographic into the city centre will have an impact on apartment values. Cities have historically had a larger share of renters compared to suburban areas. So it is not surprising to see that the populations of US cities have become increasingly composed of renter households alongside the national increase in renters. Of the 11 largest US cities, nine had more renters than homeowners in 2014 versus just six of these same cities in 2006. 
As a result of this migration away from the suburbs and towards the city, the apartment business has become a more attractive full-cycle investment. A bigger pool of renters means a more stable business at a given level of supply; additionally, an increasingly older tenant mix (Millennials rent later into life) should improve affordability ratios and allow for healthier rent increases. 
Lastly, because of land and entitlement constraints in dense, urban areas – which will become increasingly more onerous over time – high quality, core product will become scarcer as demand from renter households continues to increase, and thus, should appreciate at a faster pace. 
<a href="https://www.propertyobserver.com.au/images/2017/04/19/USAptReits.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/04/19/USAptReits.png" alt="">
However, millennials won’t rent forever.
“The American dream of home ownership is not dead and buried. Gen Y are just as likely to head for the suburbs as previous generations, and starting a family is often an important catalyst. The key difference is that we are seeing this occur increasingly later in life,” said Deves.
“Cyclical affordability issues and demographic change has and will support demand for apartment rentals in city centres. During the property cycle, the US apartment REITs should therefore be in a stronger position to push rents, and quality management teams with insight into the needs of millennials will be best placed to deliver value for investors of all sizes.”
While the story is similar for Australian millennials, investing in the US could be an ideal way to play this trend for local investors as it offers the largest, highest quality, and most liquid set of listed apartment landlords, according to the report.
“Australian investors should consider a global strategy for listed real estate in order to access these kinds of thematics, which may not be as readily investible in their local market. A global approach also offers geographic diversification for the real estate portfolio,” concluded Dewes.
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prateek24-ezbwHMbNAk

As US home ownership declines, opportunity arises for investors: AMP Capital

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Sydney home prices kept up their strong capital growth in February, as capital city home values rose a further 1.4 percent during the month, according to the monthly CoreLogic Hedonic Home Value Index.
The strong capital gain over February was led by Canberra (+3.2 percent) and Sydney (+2.6 percent), with Melbourne (+1.5 percent) and Hobart (+1.0 percent) also returning significant increases. 
In contrast, dwelling values were down over the month across Darwin (-4.3 percent), Perth (-2.4 percent) and Brisbane (-0.4 percent). Meanwhile, the rental market remains soft, pushing yields to a record low. The average dwelling yield across the combined capital cities fell to 3.2% over the month, a new low.
Summarising the capital gains in home values, CoreLogic head of research Tim Lawless said, “At a combined capital city level, growth conditions have been rebounding since the middle of last year when, on two separate occasions, interest rates were cut, and investor demand commenced trending higher.” 
“Prior to capital gains accelerating half way through last year, the growth trend had been moderating, reaching a cyclical low point over the twelve months ended July 2016 when the annual change in capital city dwelling values slowed to 6.1 percent.” 
<a href="https://www.propertyobserver.com.au/images/2017/03/1/CoreLogicIndex.png" target="_blank">Click to enlarge</a>
 <img src="https://www.urban.com.au/images/2017/03/1/CoreLogicIndex.png" alt="">
A new cyclical high for annual growth rates 
February’s results mark a new high point in the current growth cycle, with capital city home values increasing by 11.7 percent over the past twelve months, said Lawless.
“The annual growth rate across the combined capitals hasn’t been this strong since the twelve months ending June 2010,” he said.
“In Sydney, where the annual rate of growth is now 18.4%, this is the highest annual growth rate since the twelve months ending December 2002 when the housing boom of the early 2000’s started to slow.” 
The latest CoreLogic results take the current housing growth cycle into its 58th month. Since capital city dwelling values started to rise in June 2012, dwelling values have increased by a cumulative 47.3 percent, ranging from a 74.9 percent capital gain in Sydney, to a net rise of 6 percent in Perth. 
Sydney, and to a lesser extent, Melbourne, have remained at the top of the capital gain tables over the past two cycles. Since the beginning of 2009, Sydney dwelling values have more than doubled, rising by 104.5 percent while Melbourne values are 87.7 percent higher. The next best performing capital city over the same period was Canberra where dwelling values have risen by a comparatively modest 37.4 percent. 
<img src="https://www.urban.com.au/images/2017/03/1/CoreLogicHighs.png" alt="">
“The strong growth conditions across Sydney have provided a substantial wealth boost for home owners, however, the flipside is that housing costs are becoming increasingly out of reach. This is especially true for price-sensitive segments of the market such as first time buyers and low income families,” Lawless said. 
“Affordability challenges are most pronounced across the Sydney housing market where, based on September 2016 data, dwelling prices are almost 8.5 times higher than gross household incomes. The second most expensive capital city, Melbourne, has a dwelling price to income ratio of 7.1.” 
In contrast, the February results show that the cities with greater exposure to the mining downturn have continued to record weak housing market results. Dwelling values slipped lower in Perth and Darwin over the month, taking the cumulative decline in values since these markets peaked in 2014 to 10 percent and 11.5 percent respectively. Brisbane also recorded a fall in dwelling values over the month, however values have been slowly trending higher despite the negative monthly result. 
As a consequence, housing affordability has shown a marked improvement in these regions, with the dwelling price to income ratio tracking at 5.7 in Brisbane, 5.5 in Perth and 4.5 in Darwin based on September 2016 data. 
Rental yields slipping to record lows 
While dwelling values continued to rise, weekly rents remained comparatively soft. As a result, downward pressure has been placed on rental yields. The average dwelling yield across the combined capital cities fell to 3.2% over the month, which is a new record low. Five years ago, the average capital city yield was a full percentage point higher at 4.2 percent. 
Sydney has shown the most significant compression in rental yields over the past five years, with the average gross yield reducing by 150 basis points to reach 2.9 percent (2.7 percent for houses and 3.7 percent for units). 
Lawless said, “Despite the record low rental yields on offer, investor demand remains high, suggesting investors are likely to be relying on a negative gearing strategy to compensate for their cash flow losses. It also indicates that investors are speculating on future capital gains.” 
“The latest housing finance data from the Australian Bureau of Statistics indicates that investors comprise approximately 57% of new mortgage demand across New South Wales (excluding refinanced loans). This is substantially higher than the long run average, which is slightly above one third.” 
Commenting overall on the February results, Lawless said, “The renewed strength in the housing market is corroborated by a range of other data points such as auction results, low advertised stock levels and rapid selling times.” 
According to CoreLogic auction results, 2017 began on a very strong footing with capital city clearance rates generally tracking in the high 70 percent to mid-80 percent range from week to week. The results of ‘Super Saturday’ last week saw an unprecedented number of auctions for February; clearance rates reached a new high for 2017 despite the large number of auctions held. 
Advertised listing numbers remain low across the hottest housing markets, with total residential advertised listings in Sydney tracking 11.3 percent lower than the same period a year ago, Melbourne total listings are 5.1% lower than last year, Hobart listings are down by 35 percent and Canberra advertised stock levels are 6.2 percent lower than a year ago. 
Lawless said, “Low levels of advertised stock for sale at a time when buyer demand remains strong is creating a sense of urgency among buyers, which is adding to the upward pressure on prices. This helps to explain why clearance rates are so high, and private treaty sales are so rapid across the strongest markets.” 
Growth likely to moderate later this year 
“Overall, the latest results from the CoreLogic Hedonic Index highlights the performance diversity across Australia’s housing market. The continuation of the capital gains rebound is likely to create further discomfort among policy makers, particularly in light of the growing debate around affordability and the high level of demand from investors.” 
“I remain of the view that housing market conditions will moderate during 2017 due to affordability constraints impacting on housing demand, as well as higher supply levels and an eventual slowing of investment demand brought about either through changed policies from Australian lenders or via regulatory changes aimed at slowing credit growth across the investment sector.”
At around the median price of $635,000 a three bedroom house at<a href="https://www.realestate.com.au/sold/property-house-act-kambah-124457326" target="_blank"> 8 Sholl Place</a>, Kambah (above) was sold yesterday for $609,000. 
Similarly a four bedroom house at <a href="https://www.realestate.com.au/sold/property-house-act-amaroo-124657490" target="_blank">11 Cooloola Street</a>, Amaroo (below) was sold last week for $635,000, having last traded for $439,000 in 2004.
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/03/1/11%20Cooloola%20Street.jpg" alt="">
At around the median price of $405,000 a two bedroom unit at <a href="https://www.realestate.com.au/sold/property-apartment-act-watson-124626206" target="_blank">49/23 Aspinall Street</a>, Watson (below) was sold last week for $401,500, having last traded for $165,000 in 2008.
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/03/1/49_23%20Aspinall%20Street.jpg" alt="">
Similarly a two bedroom house at <a href="https://www.realestate.com.au/sold/property-apartment-act-belconnen-124227770" target="_blank">309/80 Chandler Street</a>, Belconnen (below) was sold two week ago for $402,000.
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/03/1/309_80%20Chandler%20Street.jpg" alt="">
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Capital city home values rise nearly 12 percent in a year, hitting new cyclical high: CoreLogic  

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A prime parkside property at Chatswood has been sold for $4,955,000, the dearest result at auctions across Australia over the weekend.
Located at <a href="https://www.realestate.com.au/property-house-nsw-chatswood-124569382" target="_blank">47 Stanley Street</a>, the property was marketed as "an ideal combination of prime positioning and powerful potential."
The solid five bedroom Federation home sits on a 925 sq m block with views over Bales Park.
There were 25 bids before it was knocked down to an owner occupier at about 15 per cent above its reserve.
It has many original period details along with marble fireplaces, high ornate ceilings and polished floors.
The property was offered through LJ Hooker agents John McManus and Jing Peng.
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j.ballantyne1990-6AQqhLzZaK

Chatswood parkside Federation trophy home sold for $4,955,000

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A one bedroom unit at Bacchus Marsh, kms from Melbourne, was sold for $166,000 in the nation's cheapest weekend sale.
It last sold at $101,000 in 2006, reflecting 4.7 percent annual growth.
Located at <a href="https://www.realestate.com.au/sold/property-unit-vic-bacchus+marsh-124468598" target="_blank">2/22 Grant Street</a> it is within walking distance to Bacchus Marsh Hospital, cafes and restaurants.
It features a generous bedroom with a recently updated en-suite.
A lounge room, meals area, functional kitchen and separate laundry are in the property.
The property was offered through PRD Nationwide agents Sean Tan and Russell Parker.
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One bedroom Bacchus Marsh unit sold for $166,000

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The upcoming weekend auction market in Sydney's will be another big test with nearly 700 auctions listed, up from last weekend's 543 according to Domain's Dr Andrew Wilson.
He said nearly 900 homes will be up for auction in Melbourne, nearly double last weekend’s 471 listings, with Melbourne's  west suburban region hosting the most number of auctions on Saturday with 156.
"This is followed by the inner south with 130, the inner city 123, the outer east 115, the inner east significantly higher this weekend with 111, the north east 100, the north 67 and the south east with 63 auctions listed on the weekend.
"The most popular suburb for auctions this weekend in Melbourne is Richmond with 18 followed by Glen Waverley with 16, Northcote and Hawthorn each with 14, Preston 13, St Albans and Craigieburn each with 12 and Mt Waverley and Armadale with 11 auctions each on Saturday.
"The Sydney auction market is now in full swing with a higher proportion of homes from inner suburban, higher-priced regions now looking for buyers.
"The city and east will host the most number of auctions with 108 followed by the upper north shore 98, the inner west 88, the northern beaches 63, the south 58, the lower north 56, the west 47, Canterbury Bankstown 45, the south west 39, the north west 28, the central coast 22 and the Blue Mountains with 1 auction listed for Saturday.
"The most popular suburb for auctions this weekend in Sydney is Randwick with 12 followed by Mosman 11, Manly and St Ives each with 9 and a number of suburbs with 8 auctions listed including Epping, Cronulla, Lindfield and Greenacre."
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Big test for auction numbers this weekend: Andrew Wilson

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GUEST OBSERVER
A number of recently released statistics suggest that the Perth residential property market is primed for investment in 2017.
Key indicators offer reason to believe that Perth is moving through the bottom of its current residential property cycle, and investors may be able to capture the full benefits of the next upswing by acting in the coming months.
Some positive signs in the market are contributing to an overall shift in sentiment amongst buyers, with many feeling optimistic about 2017.
Smart investors know that now is a great time to buy in Perth, but as we’ve always said, selecting the right property type in the right area is also very important, and at the moment there are some very attractive opportunities out there for savvy investors.
Stronger numbers
The latest data released by the Real Estate Institute of Western Australia (REIWA) shows that Perth’s preliminary median house price for the December 2016 quarter did not change at $520,000, which is a positive sign as historically once all sales have settled, this preliminary median generally increases, so Perth could in fact record an increase in price over the quarter.
Sales activity is increasing with the preliminary dwelling sales for the December quarter 2016 five per cent higher than the same time in 2015. For the week ending 31st of January 2017, property listings were down about 2 percent year on year, indicating that some of the excess supply in the market is starting to be absorbed.
Furthermore, CoreLogic’s recently released RP Data report revealed that Perth dwelling prices improved by .2 percent in January contributing to a 2.1 percent rise over the past three months, adding to conjecture about the beginning of a recovery after a long period of negative growth.
Great time to buy right
Buying strategy is just as important as timing in order to maximise the benefits of any approaching upswing. Investors who examine potential demographic, social, infrastructure and planning changes will have the best chance in purchasing a property that will outperform the market.
For example, in 2007, our research team identified the City of Belmont as an investment grade suburb with strong short and long term growth drivers exposing many of our clients to the rapid price growth that occurred in this area.
The report explores some of the research and resulting strategies the company employed to capitalise on investments in Belmont.
With stock of listings still comparatively high, interest rates at record lows and affordability amongst the best in the nation, the current market presents excellent buying conditions in 2017:
Investors who can identify a good long term growth property and negotiate a favourable deal should purchase now to realise significant price growth in the future.
Damian Collins is the founder and managing director of Momentum Wealth and can be contacted <a href="https://www.momentumwealth.com.au/damian-collins/" target="_blank">here</a>.
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Perth primed for smart investors: Damian Collins

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There’s a well-versed property adage that the greater the supply, the weaker the sales success. 
And the opposite has been the case especially in Sydney and Melbourne. 
In 2017 across Australia there’ll be 1000s of auctions every week. 
To ensure your property buying success, <a href="https://www.propertyobserver.com.au/images/stories/marketing/ebooks/eBook_16-tips-for-buying-well-at-auction-in-2017.pdf" target="_blank">click here</a> to download our eBook, 16 tips for wise auction bidding.
 
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16 tips for buying well at auction in 2017

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GUEST OBSERVER
Respondents to the ANZ-Property Council Survey report a more optimistic outlook for the property sector in 2017.
Confidence rose to a two-year high, supported by stronger expectations of economic growth, capital values, and forward work schedules.
Sentiment is still strongest in New South Wales, while the outlook for Queensland’s property market looks to have bottomed, and is embarking on a tentative recovery.
Firms nationwide now expect interest rates to rise over the next 12 months. This likely reflects a combination of the RBA cutting cycle reaching an end, and recent increases in bond yields and retail interest rates – especially in the housing market.
Confidence in residential property rose significantly, in line with other positive data flow on the housing market in recent months, including price growth, auction results, and investor finance.
Commercial property sentiment remains elevated, especially in the tourism sector. The improvement in the outlook for commercial offices is also encouraging.
ANZ chief economist Richard Yetsenga said the first quarter ANZ-Property Council Survey shows a further increase in sentiment in the property sector, despite the sharp slowdown in economic growth prior to the survey.
"Nonetheless, we believe growth will continue to pick up through 2017, with most of the Q3 weakness proving to be only temporary," he said.
"Our solid outlook for the Australian economy in 2017 is broadly consistent with the strong tone to this quarter’s survey. Sentiment in New South Wales’, Victoria’s, and the ACT’s property markets sits around record levels, in line with the transition away from mining-led growth. A stronger non-mining economy means that we believe the RBA’s easing cycle is over, and we expect rates will remain on hold this year.
A noteworthy feature of this quarter’s survey is that businesses nationwide now expect interest rates to increase over the coming year. This reflects both the RBA being at the end of their easing cycle, as well as tighter funding conditions. But as of yet, there is little sign that the likelihood of higher funding costs is having an adverse impact on the property sector.” 
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The March quarter survey showed that firms are considerably more optimistic around the outlook for the property sector. Confidence reached a 2-year high, with 31 percent of respondents expecting conditions in the property market to improve over the next 12 months.
The outlook remains quite mixed across the states, with New South Wales still leading the way (Figure 1), while Western Australia continues to feel the negative effects of declining mining investment. Encouragingly, sentiment in Queensland appears to be showing some signs of a base.
Queensland tends to get lumped with Western Australia as a ‘mining state’, but the transition to growth outside the mining sector appears much more advanced in the eastern state. Recent GDP data show that Queensland’s business investment has increased for the past two quarters, and in annual terms is much less of a drag on the state economy compared to 12 months ago.
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Consistent with this result, ANZ-Property Council respondents in Queensland are reporting a more positive state economic outlook and generally rising capital values over the next year.
One trend that is consistent across the states is the expectation that interest rates will rise over the next 12 months. This is a significant turnaround from just 6 months ago, when respondents in all states expected rates to move lower (Figure 2).
We believe this changed outlook reflects two influences. First, it is increasingly likely that the RBA is now at the end of its easing cycle, after having cut rates again in August. Second, bond yields have been rising for the past few months, and even more recently housing investors have seen their interest rates increase. All in all, it appears highly unlikely that today’s record low interest rates will continue to fall.
Much of the improved outlook for the property market came from the residential segment, supported by improved expectations of capital price growth, forward work schedules, and construction activity (Figure 3). The stronger price growth expectations are largely in line with recent results in the housing market. House prices have returned to double-digit annual growth rates across Sydney and Melbourne, while auction clearance rates have steadily increased and now sit only a fraction lower than last year’s peak (Figure 4). Coupled with the returning presence of investors, it appears that demand for housing is reasonably steady at an elevated level.
 
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The recent improvement in work schedules and construction activity expectations is also a positive. While we expect dwelling investment to fall slightly through the second half of 2017 given the recent decline in building approvals, a significant backlog of work is likely to see construction remain around historically high levels. 
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Sentiment in the commercial property segment is still stronger than in residential property (Figure 5). The March quarter survey saw the outlook for commercial property rise to the second-highest level on record, driven by an ongoing improvement in commercial office sentiment, and still-elevated levels of confidence in the tourism industry. 
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Net confidence in the commercial offices segment has been steadily rising for nearly two years, reflecting an improving outlook for price growth and construction activity. This result is in line with ongoing absorption of office space as white-collar employment continues to rise across the major capital cities.
The outlook for the tourism industry remains very strong despite a small decline in the March quarter. A net 64% of respondents expect tourism-related construction activity will rise over the next 12 months, 52 percent believe their company’s forward work schedule will rise, and 39% forecast capital values to rise. This positive outlook is consistent with data showing the ongoing strength in Australia’s services exports, which includes tourism (Figure 6). 
Importantly, the resilience of the AUD over the past year does not appear to have had a dampening effect on tourist inflows and expenditure. This suggests the strength of the tourism sector is not solely dependent on the currency, and is supported by other factors such as the rapid wealth expansion of the Chinese middle class. This broadening of demand bodes well for the growth prospects of an increasingly key component of Australia’s economy. 
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Daniel Gradwell is economist, ANZ and Richard Yetsenga is chief economist They can be contacted <a href="https://www.anz.com/corporate/research/" target="_blank">here</a>.
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