&nbsp;

A local Australian has spent a Lower North Shore record $15.1 million at <a href="https://www.apartments.com.au/new-apartments/elevate-hume-place-crows-nest-25-hume-street-crows-nest-nsw-2065">Elevate Hume Place</a>, the new TOD above the recently opened Crows Nest Metro Station.

The buyer amalgamated a penthouse and sub-penthouse to create the triplex apartment that will have five bedrooms, five bathrooms, a private rooftop pool, expansive terrace, and panoramic views of Sydney Harbour and skyline. The building is being created by burgeoning developer Third.i, alongside joint venture partner Phoenix Property Investors.

The buyer was drawn to Elevate’s unrivalled connectivity, situated directly above the&nbsp;<a href="https://www.apartments.com.au/developments/crows-nest-nsw-2065">Crows Nest</a> Metro Station, and the vibrant lifestyle precinct that surrounds it. The Metro connects to the CBD in just seven minutes, and Chatswood in four.

[smartcode_project:default project_id=142550 project_image_fid=309367]

Designed by internationally acclaimed architects <a href="https://www.apartments.com.au/architects/woods-bagot">Woods Bagot</a>, Elevate draws inspiration from the ancient blue gum forests native to the area. The building is a Net Zero development, created in consultation with Indigenous communities and exceeding sustainability benchmarks. Interiors feature chevron-engineered timber flooring, natural stone benchtops, and premium Sub-Zero Wolf appliances, delivering timeless elegance and next-level comfort.

The exchange of the $15.1 million apartment, follows a recent $5 million sale, and over $30 million currently in expressions of interests. Interest in Elevate’s penthouse stock has surged, reflecting a strong appetite for ultra-luxury residences that combine design excellence with unmatched connectivity.

[smartcode_project:default project_id=142550 project_image_fid=309369]

“We’re seeing a significant uptick in interest from local and international buyers who are prioritising connectivity, sustainability, and lifestyle,” said Callum Billinghurst, Head of Sales at Third.i Group.&nbsp;

“These recent sales are a testament to the vision behind Elevate. It’s not just about luxury finishes or panoramic views, it’s about creating homes that are deeply connected to the city and the community. Buyers are responding to that. They want to live somewhere that offers more than just a postcode, they want culture, convenience, and long-term value. Elevate delivers all of that, and more.”

[smartcode_project:default project_id=142550 project_image_fid=297878]

As part of the Hume Place precinct, Elevate is transforming Crows Nest into Sydney’s most dynamic urban village. Elevate’s unique position directly above the metro, combined with its curated amenity offering, has made it a magnet for buyers seeking a future-proof investment and a vibrant urban lifestyle.

The next release at Elevate is expected later this year.

[smartcode_project_cta:default project_id=142550]

“We’re seeing a significant uptick in interest from local and international buyers who are prioritising connectivity, sustainability, and lifestyle,” said Callum Billinghurst, Head of Sales at Third.i Group


Joel Robinson

Third.i & PPI set Lower North Shore apartment record with $15.1m sale at Elevate Hume Place penthouse amalgamation

Sydney developer Deicorp is set to officially open its <a href="https://www.apartments.com.au/new-apartments/hills-showground-village-castle-hill-2-mandala-parade-castle-hill-nsw-2154">Showground Village</a> precinct in Castle Hill.

NSW Premier Chris Minns will attend the opening on Sunday August 31, alongside&nbsp;Minister for Planning and Public Spaces Paul Scully, The Hills Shire Council Mayor Dr Michelle Byrne, Landcom CEO Alex Wendler, and Deicorp Founder Fouad Deiri.

Located just moments from Hills Showground Metro Station, the centre spans 9,500 sqm across four levels and features 26 specialty retailers as well as a 1,400 sqm public plaza, creating a new community meeting point for shopping, dining, fitness, and everyday convenience.&nbsp;

Showground Village forms part of the Hills Showground Station Precinct, an urban renewal initiative led by Landcom and Sydney Metro that will provide for around 2,300 new jobs over the next 20 years and around 9,000 new homes.&nbsp;

Deicorp was recently approved for another new development next door to Showground Village.

The new five residential buildings in the East Showgrounds Precinct, will see another 873 dwellings delivered, as well as&nbsp;3,500 sqm of open public space in the form of landscaped courtyards, a public park and communal outdoor recreational space including a playground, barbeque area, and outdoor seating.

“This approval will allow us to start construction on a range of beautifully designed, conveniently located apartments and create another vibrant, walkable and well-connected community,” said&nbsp;<a href="https://www.apartments.com.au/developers/deicorp" target="">Deicorp</a>&nbsp;Founder Fouad Deiri.

“These new homes will provide their residents with a seamless connection to jobs and services along Metro North West, and the new&nbsp;<a href="https://www.apartments.com.au/new-apartments/hills-showground-village-castle-hill-2-mandala-parade-castle-hill" target="">Hills Showground Village</a>&nbsp;retail precinct currently under construction."

Deicorp has several thousand apartments in planning and under construction across Sydney, from Zetland and Five Dock to Crows Nest and Macquarie Park.

[smartcode_project_cta:default project_id=133881]

Deicorp, NSW Premier officially open Showground Village, new retail and hospitality hub in Castle Hill

ASX-listed developer Cedar Woods is progressing its plans for its Southbank arts precinct site.&nbsp;

The developer has filed plans, which are now with the&nbsp;Department of Transport and Planning, for a new 20-level tower at&nbsp;<a href="https://www.apartments.com.au/new-apartments/141-151-sturt-street-southbank-vic-3006">141–151 Sturt Street</a>, a 2,718 sqm block opposite the Habitat Filter sculpture.

The proposal seeks to demolish the two-level&nbsp;commercial building, including a small supermarket and medical tenancies, and create a new building with 180 apartments and a focus on an&nbsp;active public realm and arts integration.

&nbsp;

<img alt="Southbank site" data-entity-type="file" data-entity-uuid="76a72db6-91ef-43ae-827d-a9cfa72893d2" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Site.png?VersionId=DZgtB4K6BswVh0QtCs3iLjXaLp0CbcEb" />

&nbsp;

There will be a full mix of apartment configurations, including 28 studio apartments, 16 one-bedroom, 104 two-bedroom, and 32 three-bedroom units.

Retail, creative arts, and residential amenity functions are integrated across the lower levels. A food and drink tenancy is planned to front Dodds Street, while a retail tenancy fronting Sturt Street will be accessed via an elevated walkway. The first floor includes a substantial 734 sqm creative arts space, envisioned to support Melbourne’s growing cultural and digital industries.

Architecture firm <a href="https://www.apartments.com.au/architects/rothelowman">Rothelowman</a> has put together the plans. In their&nbsp;Urban Design Report they highlighted the project’s ambition to embed itself within Southbank’s evolving cultural fabric.

A central feature of the design is a through-block link connecting Sturt and Dodds Streets, landscaped with native plantings and embedded with universal access ramps.

“The ramp has been thoughtfully integrated as the primary access point, ensuring universal accessibility for all users,” the report noted, with the link offering “a direct response to the urban planning scheme of creating more green spaces within our communities”.

<img alt="Southbank podium" data-entity-type="file" data-entity-uuid="4d24b1b2-d69c-4a11-a11d-ec6df432221c" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/podium.png?VersionId=geWoJyZDmPSLODZ_.PNJ0LvpOmyyCdpo" />

The building’s podium form responds to the mandatory height limits along Dodds Street and maintains a fine-grain interface to adjoining developments. Above the podium, the tower is articulated with recessed balconies and a focus on views toward the CBD and surrounding arts institutions. A communal rooftop recreation deck and indoor lounge are positioned on level four, adjoining seven apartments and providing over 900 sqm of resident amenity space.

Vehicle access and loading will be provided via Dodds Street, with 155 resident car spaces located across two basement levels and the first three above-ground floors. Bicycle storage is more generous, with 226 spaces distributed across resident, staff and visitor needs.

Rothelowman describes the architecture as “humanist,” with ground-level interfaces designed to encourage social interaction and provide a dignified entry for both residents and passers-by. “All street interfaces are crafted to invite and nurture human connections,” the design report states. “The façade transitions to a human scale, providing an approachable and engaging streetscape”.

Cedar Woods, while well-known for its large communities it develops outside of Australia's capital cities, they have recently developed in Melbourne's inner-ring before. They are approaching completion at <a href="https://www.apartments.com.au/new-townhouses/88-leveson-north-melbourne-88-leveson-street-north-melbourne-vic-3051">88 Leveson</a>, just 15 townhouses in the heart of North Melbourne.

Cedar Woods progresses with new apartment plans in Southbank arts precinct

Brisbane developers Core Property Partners and Vector Property Australia has teamed up for Brisbane's newest apartment development.

The duo identified <a href="https://www.apartments.com.au/developments/east-brisbane-qld-4169">East Brisbane</a> as their preferred suburb, on the fringe of the Gabba Precinct, where they've just revealed BANKSII, 72 apartments opposite Raymond Park.

[smartcode_project:default project_id=136432 project_image_fid=5481]

The one-, two-, and three-bedroom apartments will sit in a glass-wrapped building that will also feature a rooftop with an&nbsp;infinity-edge pool, a BBQ area and alfresco dining spaces, sun lounges, and a sauna, as well as a resident-only gym and a ground-floor cafe.

Rhett Williams, Director of Vector Property Australia, said the project will lift the quality of the East Brisbane community and set a new benchmark.

"In Brisbane’s current property landscape, <a href="https://www.apartments.com.au/new-apartments/banksii-east-brisbane-169-wellington-road-east-brisbane-qld-4169">BANKSII</a> stands out through its emphasis on lifestyle-oriented living, connectivity and sophisticated design," Williams says.

[smartcode_project:default project_id=136432 project_image_fid=5479]

The 10-level building has been designed by MAS Architecture. Their designs were inspired by the native Banksia flower, with the architecture and interiors reflecting the organic symmetry of its namesake flora. MAS has interpreted this throughout the building’s curved form, façade detailing and interior palette.&nbsp;

The building’s flowing geometry and natural tones are complemented by large balconies and floor-to-ceiling glazing, maximising cross-breezes, daylight and views over the city, parklands and river.

“Having a strong narrative for a building helps us architecturally,” MAS noted. "We can choose colours that come off that species of flowers. The trunk and the trees and the flower elements all are now visible in our joinery on the inside and in our architectural finishes on the outside."

[smartcode_project:default project_id=136432 project_image_fid=5485]

Apartments will feature timber floors, soft porcelain tiles, brushed bronze fittings, and stone benchtops with warm veining.&nbsp;

Kitchens feature premium SMEG appliances and generous storage, while bathrooms have been designed as calming retreats with curved cabinetry and twin sinks in the master ensuites.

The building will feature a suite of rooftop and wellness amenities. Residents will have access to an infinity-edge pool, BBQ and alfresco dining areas, sun lounges and a rooftop sauna.&nbsp;

A residents-only gym will be located on the podium level, while a ground-floor café and landscaped laneway will further activate the site and improve neighbourhood connectivity.

[smartcode_project:default project_id=136432 project_image_fid=5488]

BANKSII will rise from a prime Wellington Road site, with the building oriented to overlook the adjacent Raymond Park and take in extensive city views. It is also on the doorstep of key&nbsp;lifestyle infrastructure, including the future Kangaroo Point Green Bridge, The Gabba stadium, and the planned Brisbane Live arena.&nbsp;

Public transport options, including ferry, bus and rail - including the future Cross River Rail Woolloongabba station - are all nearby, supporting a car-optional lifestyle just minutes from the CBD.

Williams said the team spent over a year searching for the ideal site before securing this location.

"We were attracted to <a href="https://www.apartments.com.au/developments/east-brisbane-qld-4169">East Brisbane</a> as it is a vibrant and growing community that offers a perfect balance of urban convenience and natural beauty with the parklands and river on our doorstep.”

The project is part of the broader Woolloongabba Games precinct, which is undergoing significant investment in the lead-up to the 2032 Brisbane Olympics. This urban renewal, coupled with infrastructure upgrades, is expected to enhance long-term liveability and capital growth in the area.

Given the wide max of configurations, BANKSII is expected to suit everyone from first home buyers and investors to families and downsizers.

[smartcode_project_cta:default project_id=136432]

BANKSII sales launch in booming East Brisbane apartment market

The Minns Labor Government will deliver Sydney’s first new heavy rail station in more than a decade – enabling up to 10,000 new homes by rezoning land around Woollahra and Edgecliff stations, right next to the CBD, to tackle the housing crisis and rebalance growth across the city.

Recent reports by the NSW Productivity Commission have warned that Sydney is losing twice as many young people as it is gaining, while also finding that Woollahra is the most feasible Local Government Area (LGA) in New South Wales to build new housing.

Despite this, housing approvals in Woollahra consistently lag well behind other LGAs, and the population has declined by 11 per cent over the past 50 years while Greater Sydney as a whole has grown by 74 per cent.

The new station that will be an eight-minute trip from Sydney CBD, will be located on the Eastern Suburbs train line in Woollahra, where a station build was started in the 1970s but never completed.

To enable the delivery of new homes the NSW Government will lead a rezoning of Woollahra and Edgecliff stations similar to other state led rezonings to allow additional homes to be built around the stations.

Affordable housing will also make up a proportion of development on the site with the final amount of affordable housing required, to be determined as part of the rezoning process.

The area surrounding the new station is within walking distance of major green and recreational space including Cooper, Trumper, Rushcutters Bay and Centennial Parks.

The Eastern Suburbs train line between Bondi Junction and Sydney CBD also has the lowest passenger usage rates during the AM peak of any line on the Sydney network, with only 43 per cent of operating capacity during the AM peak currently being utilised by passengers.

Sydney Water and Infrastructure NSW have confirmed there is capacity in the water and wastewater systems to accommodate the proposed 10,000 dwellings without major upgrades.

The rezoning is expected to take around two years and will further support the Government’s housing targets that rebalance the delivery of new homes around existing infrastructure.

&nbsp;

&nbsp;

Next stop Woollahra train station - delivering up to 10,000 new homes in the heart of Sydney

Riskwise

<html><body>
Property transactions will increase by about a quarter in 2021 after a significant slump through the middle of 2020, according to research from RiskWise Property Research.  

Doron Peleg, CEO of RiskWise Property Research noted that “although transactions in the established market continued to flow through in modest volumes, through April and May off the plan sales were becoming increasingly scarce.”

“The exact final numbers will only be known in the fullness of time, but it seems likely that with total stock listings stuck at low levels deep into 2020, stamp duty coffers will experience a substantial hole due to this year’s major disruptions” Mr Peleg said.  

Mr Peleg said market research suggested that there is "a significant burst of pent-up demand set to be unleashed" as Victoria’s economy has reopened and travel restrictions are eased.

Pete Wargent of BuyersBuyers.com.au said that the biggest unknown factor is whether the international borders will be open and flights operational before the second quarter of calendar year 2021”. 

“While acknowledging the potential for delays in vaccine progress, it seems likely that residential property transactions will increase by a quarter in 2021 as in addition to homebuyers we’re now seeing property investors also returning to the fold, lured by the prospect of neutral-to-positively geared investments”.  

Pete Wargent noted “2020 has been one of the most unusual years on record for real estate markets in Australia.”

“We came into the year with relatively low unemployment and confidence running at a solid clip, but as the first quarter of the calendar year progressed it became increasingly clear that significant disruption could be on the cards.” Mr Wargent said. 

“We then had multiple buyers putting their searches on hold until the situation became clearer.

"But now it’s notable that they’re feeling confident enough to buy again”.

 
</body></html>

Property transactions will increase by about a quarter in 2021 after a significant slump through the middle of 2020, according to research from RiskWise Property Research

jchancellor

Property transactions to spike by a quarter 2021: RiskWise

<html><body>
Despite COVID-19, the Sydney property is strongly forging ahead with auction clearance rates tracking at levels similar to those of 12 months ago, according to RiskWise Property Research.
Houses achieved a 71.1 per cent preliminary clearance rate and, overall, of the total volume of 625 properties, a 69.5 per cent clearance rate.
The volume of auctions was 18 per cent higher than a year earlier according to CoreLogic, and the final auction clearance rate is expected to finish at around 64 per cent, marginally above the decade average.
RiskWise CEO Doron Peleg said this was another consistent result, and similar to those seen in recent weeks.
“When you have a larger volume and higher clearance rates, this means that we have a stronger market,” Mr Peleg said. 
“Houses, in particular, are showing strong results while units achieved only 66.3 per cent clearance rate which shows that, as expected, they have less resilience.
“Houses in Sydney also performed well last week with clearance rates recently running above those for units.
“Overall, the 69.5 clearance rate for Sydney is similar to results achieved around the same time last year when the Sydney property market was enjoying a strong recovery period following the election results, interest rate cuts and some loosening of the credit restrictions, particularly in relation to APRA's floor assessment.” 
This week, the top performing areas in Sydney, based on the preliminary figures, were the Northern Beaches (81.3%) and the Inner West (77.8%).
Buyers Buyers COO Pete Wargent said home buyers with long-term holding strategies were well positioned to negotiate aggressively to purchase high-quality houses that usually enjoyed very strong demand and were sold through auction campaigns at premium prices.
“The average holding period of houses in Sydney, that in 75.9 per cent of cases belong to owner-occupiers, is 12.2 years. This means owner-occupiers with secure jobs and no serviceability issues are not impacted by short-term market movements, unless they need re-finance,” Mr Wargent said. 
He said the Sydney property market delivered solid capital growth of 22 per cent in the past five years with popular areas enjoying even stronger results.
For example, houses in Paddington experienced price increase of 56 per cent and in St. Peters houses saw capital growth of 51 per cent during that period. 
This shows that although there were credit restrictions by APRA, scrutinising of loan applications as a result of the Royal Commission and material price reductions due to fears of changes to negative gearing and capital gains tax until the election result in May 2019, houses in Sydney enjoy strong demand and deliver solid capital growth. 
In addition, over the medium and the long term, solid price growth is highly likely for houses, particularly due to a systematic undersupply in the inner and middle rings, and also in the more affordable outer areas with good access to the CBD, such as the western suburbs.
“What this all means is now is the time to buy if you are a first home buyer or an owner-occupier as this current slowdown in the property market is only temporary, with houses in popular areas likely to experience solid capital growth in the medium to long term.
“Once the COVID-19 issue is resolved, most likely in 2021, the traditional connection between low interest rates and increase in dwelling prices is likely to take place.”
Other top performing areas included Newcastle and Port Macquarie, with a clearance rate of 80.0 per cent, clearly demonstrating that the demand for lifestyle locations is playing a key role in the property market.
Mr Wargent stressed, however, that investors buying rental apartments unsuitable for families were taking an enormous gamble, with both equity and cash flow risk expected to materially increase.
Serviceability is also a major factor for investors who rely on a stable rental income to cover the costs associated with property, particularly the mortgage.
</body></html>

j.ballantyne1990-6AQqhLzZaK

Houses in Sydney deliver 71% clearance rate

<html><body>
EXPERT OBSERVATION
With insolvencies at an all-time high, and the continued risk of constructing high-rise unit blocks, it is essential developers focus on the ‘missing’ middle ring, employ a sustainable business model and address imbalances in the property market, according to RiskWise Property Research CEO Doron Peleg.
This has never been more important, Mr Peleg says, as figures show building approvals, especially in Sydney, are on the increase.
According to the latest figures from the HIA, building approvals in November reached their highest level since March 2019, up by 11.8 per cent due, predominantly, to a surge in NSW. 
Figures show, in seasonally adjusted terms, building approvals for the month of November 2019 increased in NSW (+52.8 per cent), South Australia (+3.8 per cent) and Queensland (+1.0 per cent).
However,<a href="http://www.riskwiseproperty.com.au/" target="_blank"> RiskWise’s</a> Mr Peleg said an increase in approvals did not necessary bode well for the property market as indicated by the record number of developer insolvencies.
ASIC reports the number of construction businesses that went into external administration rose from 371 in the September quarter of 2018 to 514 in 2019. Meanwhile, over the 2018-19 financial year, 556 construction companies went under, 101 more than the previous financial year.
In addition, 169 NSW-based construction companies went into administration, receivership or a court-ordered shutdown in the June quarter which was the highest number since the September quarter in 2015.
According to CreditorWatch, the construction sector also topped the list for recovery court actions Australia-wide and in NSW, court actions for recovery in the third quarter of 2019 were 35 per cent higher than the comparable quarter of 2018.
Mr Peleg said there had already been numerous cases of lots approved for development and subsequently sold at a loss, especially in light of the construction defect reports. 
“And if you are losing 20 per cent, you are lucky. We are really talking about millions of dollars,” he said.
“The point is developers are at risk of insolvencies and this means they need to mitigate this risk by ensuring they have a sustainable business model, focus on the ‘missing’ middle ring and address imbalances in the property market.
“Focusing on the missing middle is by far more of a solution than taking the risk of off-the-plan high-rise development.”
Mr Peleg said population growth, job creation, improving economies and good infrastructure that Sydney and Melbourne were experiencing would draw people to these cities and, therefore, increase demand for property, with population forecasters expecting both to hit the eight million mark by 2050.
In addition, he said in the current environment of already high prices it would be more difficult for owner-occupiers to compete with property investors, especially given the current environment of low interest rates and low out-of-pocket expenses.  
“We expect to see investors increase their activity in the market as it is currently well below peak and this will put further pressure on dwelling prices and housing affordability,” he said. 
“But it must be remembered that family suitable units in the middle rings are more attractive to owner-occupiers looking for larger floor space, lower price per square metre and smaller unit blocks. These are, effectively an alternative dwelling to houses, which are, in many areas, unaffordable.
“These imbalances in the market cannot be resolved without a strategic solution and co-ordinated plan by all levels of government.
“In the meantime, what it means for developers is they should be focused on developing the middle rings with family-suitable accommodation close to transport hubs and schools. There are actually many areas that have a great potential and carry a low risk, it is only a matter of business strategy and proper risk management practices.”
DORON PELEG is the CEO of Riskwise
</body></html>

The missing middle should be developer focus: RiskWise's Doron Peleg

<html><body>
EXPERT OBSERVATION
It’s a sellers’ market with low listing volumes putting them in an extremely comfortable position. 
There were very clear and consistent signs of recovery in the market and this turnaround, as well as further improvements in auction clearance results, could lead to an increase in volume.
This week’s preliminary clearance results in Sydney hit just below 85% and in Melbourne were just shy of 80%. 
However, at this stage it appeared, generally, sellers did not feel the rush to list their properties.
Clearance rates in the 80s put sellers in a very comfortable position.
<a href="https://www.propertyobserver.com.au/images/2019/8/26/SYD%20MEL%20auction%20clearance.jpg" target="_blank">Click here</a> to enlarge: 
<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/2019/8/26/SYD%20MEL%20auction%20clearance.jpg" alt="">
We are also seeing, from the independent source of the Westpac-Melbourne Institute, significant improvements in consumer sentiment in relation to house price expectations and time to buy a dwelling indices.
In addition, when it comes to auction clearance rates in Sydney and Melbourne, we are seeing very clear signs of recovery.
The trend now is very clear with interim results in the 70s and 80s over the past four weeks and final clearance rates in the 70s for that period. 
This is significantly higher than the clearance rate in the mid 50s a year ago in those capital cities.
A combination of the election results, RBA interest rate cuts with at least one further cut on the horizon, APRA's changes to the floor assessment and tax cuts delivering more funds to households, all contributed to the confidence in the market and, consequently, for higher clearance rates that were also well connected with higher prices. 
<a href="https://www.propertyobserver.com.au/images/2019/8/26/Westpac%20HPE%20index.jpg" target="_blank">Click here</a> to enlarge: 
<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/2019/8/26/Westpac%20HPE%20index.jpg" alt="">
The recent auction clearance rates and improved consumer confidence are creating a very clear trend, that will consequently lead to price increases and a rise in volumes, as sellers expect stronger demand for their properties and, therefore, are more confident to put them on the market.
<div>
Basically, what we are seeing is improving confidence, improving clearance rates and improving prices.
In fact, according to CoreLogic data, <a href="https://www.corelogic.com.au/reports/chart-pack" target="_blank" rel="noopener noreferrer" data-auth="NotApplicable">in July 2019, dwelling values increased across all capital cities except for Adelaide, Perth and Canberra</a>.
This shows that sellers are in a good position, they see improvement in the market, and they are in control of what happens next.
Generally, both Sydney and Melbourne are performing really well, especially Sydney in recent weeks.
The key thing we are seeing is very consistent and strong results, particularly, but not only, in the high end of market.
In fact, the high end of the market continues to lead the way with extremely strong results in Northern Sydney and Hornsby (91.9%), Sydney Inner West (89.3%) and Northern Beaches (92.6%).
In Melbourne, both Inner Melbourne and Inner East delivered 82.8% and the Inner South 80.5%.
This is a good trend and with the recent rate cuts by the RBA, the high likelihood of another this year, and potentially one in first half of 2020, this are looking extremely positive.
Demand for housing and housing finance are also showing very clear signs of improvement.
With the interest rate falls and recent changes in the floor assessment, combined with serious competition between banks and non-banks making it easier for borrowers, particularly owner-occupiers to refinance and reduce mortgage repayments, there’s negative pressure to sell because vendors see the market recovering.
Often people think if there is low volume, the market it poor and high volume means it’s strong, but that's not necessarily the case. It really depends on the context.
DORON PELEG is CEO of RiskWise Property Research.
</div>
</body></html>

Strong auction results and low listing volumes mean sellers hold the power: Riskwise's Doron Peleg

<html><body>
GUEST OBSERVATION 
APRA’s scrapping of the 7% ‘stress test’ buffer on home loans will effectively see a 9% increase in borrowing capacity for owner-occupiers which will rise to between 13 and 14% if the RBA undertakes two interest rate cuts before the year is out.
With the current ultra-low interest rate and two interest rate cuts projected by the RBA, APRA’s 7% ‘stress test’ was a major barrier for borrowers in an already highly regulated and scrutinised lending environment. 
However, with the stress test reduced or removed, it would mean that if the interest rate for owner-occupiers was about 3.75%, they would pay about 6.25%, which would create a 9% borrowing capacity. 
If there are no interest rate cuts the increase in borrowing capacity will be an increase of around 4-5% for investors and for owner-occupiers about 9%. 
However, if the RBA cut rates twice, we will see an increase of around 9% for investors and potentially 13-14% for owner-occupiers.  
This will be a major boost to the market, especially as now the number one risk has been removed thanks to a Coalition win and the elimination of the threat of taxation changes to negative gearing and capital gains tax. 
APRA’s introduced a 7% ‘floor assessment’ to the ADIs in December 2014 “to examine the resilience of the largest banks, individually and collectively, and to explore the potential impacts of grim and challenging periods of stormy economic weather”, according to APRA chairman Wayne Byres in July 2018.
While at that point of time this instruction to the ADIs was, indeed, required, this conservative approach could not be applied to the lending landscape of 2019.
In 2014, there was a tangible risk that in the foreseeable future interest rates might increase materially.
Further, a high proportion (44%) of the loans were interest-only and 12% of the loans had LVR of 90%.
That, alongside loose controls over the accuracy of the information provided by prospective borrowers in loan applications and reliance on the HEM to assess household expenses, provided justification for APRA’s instruction. 
The banks also applied a slightly higher rate of 7.25% to ensure they were above the minimum threshold.  
However, since then the lending environment had completely changed and APRA’s requirement had become ultra-conservative.  
Interest rates are now very low with a very high likelihood of additional cuts by the RBA, and no signs of increases in the foreseeable future.
A low interest rate environment has, effectively, become the ‘new normal’ in Australia. 
Loan applications are heavily scrutinised, lenders are applying more conservative credit policies, the proportion of interest-only loans is now low with only 16% of the new loans (December 2018) being interest-only and 7% of loans at 90%.
RiskWise Property Research analysis showed a reduction of at least 1% was needed in order to have some meaningful impact. This is equivalent of the APRA’s announced change, that, while taking a different approach, will put the effective floor assessment at 6.25% for owner-occupiers in the current lending market.  
For example, RiskWise undertook a case study of a scenario involving a married couple, who both receive average weekly earnings at their full-time jobs, and have two children. 
The couple require a loan of 30 years and their only expenses are either HEM or HEM X 1.5, and the assumption is they have no credit card repayments and other expenses.
<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/2019/5/21/HEM%20table.jpg" alt="">
Source: Riskwise
Our analysis showed that due to the scrutinising of loan applications and by applying the effective 7.25% 'stress test' this materially reduced their borrowing capacity by 33%.
The borrowing capacity of $698,000, based on the HEM and 'floor assessment' of 7.25%, is equivalent to HEM X 1.5, with an interest rate of 2.87%. 
As a result, the couple would have to totally re-assess their entire purchasing strategy. 
So APRA’s change is equivalent to the required reduction in the floor assessment that has the right balance between having a meaningful impact, while still having good risk-management practices.
DORON PELEG is the CEO of <a href="https://www.propertyobserver.com.au/Visit%20www.riskwiseproperty.com.au" target="_blank">RiskWise Property Research</a>.
</body></html>

APRA move to scrap stress test increases borrower power: Doron Peleg

<html><body>
GUEST OBSERVATION 
RiskWise Property Research has significantly downgraded the risks to the property market, particularly in Sydney and Melbourne, following the shock results of the Federal election.
Labor’s loss has eliminated the number one risk to the property market and this, combined with the high likelihood of interest rate cuts by the RBA this year and the first home buyers’ scheme, will support the bottoming of the market by the end of the year and then a gradual recovery.  
Fears of a Labor win, and with it its proposed changes to negative gearing and capital gains tax, had a major impact on buyer sentiment, particularly investors, who saw residential properties as depreciating assets.  
RiskWise’s April Quarterly Risks &amp; Opportunities Report identified two key factors that would have major impact on the market, particularly in Sydney and Melbourne, being the proposed taxation changes and interest rate cuts by the RBA.  
The number one risk of a Labor win has been eliminated.
What we saw happening was the ALP’s proposed changes have, rightfully, had a major, and tangible, impact on buyer confidence, which RiskWise identified in its report, Impact Analysis: Negative Gearing, CGT and Australia’s Residential Property Market.
Those, jointly with APRA’s credit restrictions and the banks’ scrutiny of loan applications as a result of the Royal Commission, lead to major price reductions, uncertainly and impacted buyer sentiment, according to the Westpac Consumer Report, which found house price expectations were extremely low.  
This meant even before an actual ALP win, the high possibility of these taxation changes had impacted the property market.
The Coalition win has eliminated the uncertainty and complexity in the market associated with the taxation changes, as well as significantly mitigated the property downturn, given it can be demonstrated the price reductions were, in part, due to fears of the proposed taxation changes. 
In addition, with the other key factor we identified in our Quarterly Risks &amp; Opportunities Report that RBA are extremely likely to undertake two interest rate cuts by the end of the year, we should expect the market to bottom by the end of 2019 followed by gradual price increases.  
While the impact is likely to be lower than the impact of interest rate cuts in a higher interest rate environment, this will still have a very positive impact on the market, as rental returns in Sydney and Melbourne are, generally, very low. Therefore, interest rate cuts will materially reduce the ‘out-of-pocket’ costs for property investors. 
Interest rate cuts will increase dwelling demand, decrease price reductions in weaker markets, support the recovery in Sydney and Melbourne markets, and increase prices in areas that enjoy good demand and show resilience.  
In addition, on May 11, Prime Minister Scott Morrison announced a first home buyers’ scheme, which will allow those eligible to buy with only a 5% deposit rather than the standard 20% and help stimulate the market.
Overall, there would be major improvement in comparison to the situation in April, there were still risks associated with the property market.
Tighter lending standards, the findings of the Banking Royal Commission, restrictions on foreign investors, unit oversupply and large falls in dwelling commencements still all had a material impact on the market.  
Weak markets with continuous price reductions, weak economies and poor population growth will take longer to recover and will require a more conservative and risk aware investment strategy.
While there has been a reduction in dwelling commencement, sale of new units are still very low and, therefore, in some areas it could take a longer period of time for the stock to be absorbed into the market meaning the risk is still high in many areas.
DORON PELEG is the CEO of <a href="#" target="_blank">RiskWise Property Research</a>
RiskWise will publish a Special Edition of the updated Risks &amp; Opportunities report, in the light of the election results, in the next few days.
</body></html>

RiskWise downgrades property risk as Labor loses the unlosable election: Doron Peleg 

<html><body>
Off-the-plan units top the list of the most perilous property investments, and the risks will rise dramatically if changes to negative gearing and capital gains tax go ahead.
This is according to <a href="http://www.riskwiseproperty.com.au/">RiskWise Property Research</a> CEO Doron Peleg, who says while there are already major risks associated with this type of investment due to a number of factors, including oversupply, the introduction of the reforms if Labor win this year’s federal election will compound them.
The ALP proposes to limit negative gearing to new houses only and reduce the discount on capital gains tax from the current 50% to 25% … and the likelihood of them winning is high, Peleg said. 
“A number of markets across Australia are already experiencing weakness and the introduction of these reforms will hit them hard,” he said.
“Should the ALP policy be implemented there will be reduced demand to purchase rental properties due to the creation of primary and secondary markets, and this will cause new dwelling prices to decline in many regions. 
“The second owner won’t receive the same tax benefits of depreciation etc as the primary owner when they buy a property. They will not be able to claim negative gearing against their wages and the capital gains tax discount will be cut in half. Therefore, the vendor will have to drop the value of the property because the benefits to the buyer are lower, and it is therefore not as attractive to potential buyers.
“So, when a market is already weak, for example off-the-plan units in an over-supplied area, as we see in capital cities around the country, this will contribute further to the price reductions.”
He said an example of this was inner-city Brisbane where weakness in the market had led to lower valuations, rising defaults on settlements, major discounting, falling rents and ‘over-the-top’ incentives to get buyers across the line.
<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/2019/1/22/Brisbane%20Inner%20City%20Units%20November.jpg" alt=""> 
Brisbane City, Fortitude Valley and South Brisbane were all named in the Top 10 of the RiskWise 2018 list of the <a href="https://www.riskwiseproperty.com.au/News/high_risk_alert">100 Worst Off-The-Plan Suburbs</a> in Australia, as were Zetland and Epping in Sydney and Southbank in Melbourne where oversupply of units is a huge issue. 
In South Australia, the highest risk area for units was Adelaide CBD (postcode 5000), where oversupply was extreme and, according to CoreLogic, had delivered -2.9% capital growth in the past 12 months. In Perth they delivered -6.5% capital growth. The Perth - Inner area has the highest rate of unit oversupply in Western Australia with 4362 units in the pipeline (a 11.1% increase to the current stock), while the Greater Perth area has 12,687 units in the pipeline which is a 6% increase to the current stock.
He said the widespread oversupply issue was universally acknowledged by banks which had ‘blacklists’ for postcodes suffering potential unit saturation. In addition, he said lenders were scrutinising loan applications much more vigorously and either required a much higher deposit as security or were turning down the application entirely.
“It must also be remembered that rental units and owner-occupier units are not fully substitute products. The dwelling types and needs of owner-occupiers are often greatly different from the dwelling types and needs of renters,” he said.
“Units that are used by owner-occupiers are larger than units that are typically used as rental properties and, more importantly, the price per square metre of rental properties is higher than the price per square metre of owner-occupied properties, especially in Sydney and Melbourne. This means that, overall, rental units in Sydney and Melbourne are significantly less affordable than units that are owner-occupied.
“All this added up suggests that if the proposed changes to negative gearing and capital gains tax take place it is likely to put off-the-plan units at their highest risk ever and this includes equity risk, cashflow risk and settlement risk.”
Peleg said unless there was phenomenal capital growth, the value of off-the-plan property in many regions was likely to be reduced and it would become significantly harder for investors to enjoy capital growth, at least in the foreseeable future. 
“And if you consider that many of the prices for off-the-plan units include a significant commission to the marketer, between 5-6% of the value of the property and sometimes even more, and with the current risks to settle the property … all of these things together make purchasing off-the-plan units in many regions in Australia extremely high risk,” he said.
</body></html>

Inner Brisbane off-the-plan units the riskiest of all property investments: RiskWise

<html><body>
EXPERT OBSERVER
They look professional and seemingly offer crucial information on the property market … they are also free, but does that mean they are actually worth the paper they are printed on?
Before throwing all your money at an investment on the advice of one of these reports, it’s important to examine where the report came from and who is behind putting it together.
Some questions to ask are: What is the data source used? Is the data complete? What about the facts and information that goes hand-in-hand with the data? Who is the research team? Is the report skewed in favour of a particular development or someone who has a vested interest? Do the reports meet your specific needs?
These are all essential questions to ask before making any investment decisions based on a report.
And while it is easy to take a rear-view look and base future judgements on what has happened in the property market in the past, which is what a lot of these reports do, it is more important to combine this rear view with a forward-looking one, taking into account a wide range of factors which will come into play.
These include economic growth, employment, population growth, location and even that houses, with three bedrooms, a yard and carparking, have more appeal than units.
This was evidenced in Melbourne where a backward-looking view shows that at the end of 2017 the market delivered 8.9 per cent dwelling price growth and was enjoying outstanding population growth with projections looking favourable – at least if other factors weren’t considered.  
The picture is clearly very different now with the market delivering -7 per cent dwelling price growth in 2018. Our analysis forecasts the prospects for the Melbourne housing market are negative with price reductions in the order of 4-7 per cent for each of the years 2019 and 2020.
We can demonstrate this by taking a forward-looking view where the risks are aggregated and must be identified well in advance. These include the effects of credit restrictions, the findings of the Banking Royal Commission, the increased likelihood that the ALP will be elected and introduce changes to negative gearing and capital gains tax and the risks of buying off-the-plan properties, especially where oversupply is an issue.
Buyer sentiment has taken a massive hit as residential property is now seen as a depreciating asset.
These are all factors that you need to take into consideration when buying an investment property and these free property reports simply do not provide all the information to make a smart decision.
Many investors over-estimated the level of knowledge and information contained in free reports and were therefore unable to minimise their risk.
Many investors were unaware of the costs associated with high-quality data sources and a skilled research team.
It is important to understand that the data from the Big 4 banks is completely different from the data that is included in the free property reports, and that the amount of data analysis and research invested by companies like RiskWise is very high.
Also, often these free reports are lacking crucial information. A few of the very basic things an investor should look for, from a data perspective, are what is the risk associated with poor / negative capital growth for a property, how many properties are in the pipeline and what is the additional percentage to the current stock, and what is the estimated future projection of capital growth.
Without this data, the investment approach is often very naïve relying only on historical data and assuming that the future capital growth will be very similar to the historical growth – and this could be a major mistake, as is demonstrated in Melbourne.
It was also important to note that often free reports were undertaken by research teams which were part of a real estate agency and, if this were the case, it was essential to know what their qualifications and research backgrounds were, and if the reports were skewed to benefit that agency.
Some of these reports may be biased, presenting only the good attributes of properties and ignoring the major risk factors.
A prime example is units in <a id="LPlnk247958" class="OWAAutoLink" href="https://www.riskwiseproperty.com.au/News/brisbane-cbd-poor-risk-management" target="_blank">inner-city Brisbane</a> which are high on RiskWise’s <a id="LPlnk317406" class="OWAAutoLink" href="https://www.riskwiseproperty.com.au/News/high_risk_alert" target="_blank">100 Danger Zones</a> report. Research reports that are provided by real estate agents who sell properties in the area do not contain information regarding the high level of risk that property investors are facing.
As each investor had a specific investment strategy, risk appetite and financial position, reports which were not tailored to their specific needs and circumstances had limited added value.
To minimise risk when it comes to investing, he suggested acquiring reports from a company that specialised in research, contained information which included the risk rating associated with the planned investment, the number of properties in the pipeline and a risk of oversupply, as well as the macro-economic factors in the area.
We recommend checking the credentials of the research team including their education, qualification and experience, and ensuring the report meets your specific strategy.
Investors need independent research so they can make informed decisions about what to do, but even more importantly, what not to do.
Doron Peleg is the CEO of <a id="LPlnk349672" class="OWAAutoLink" href="http://www.riskwiseproperty.com.au/" target="_blank">RiskWise Property Research</a>. 
</body></html>

jrobinson-rf4aSBido9

Free property reports and why to avoid them: RiskWise

<html><body>
The second half of 2018 saw the major risks associated with the residential property market increase significantly and this will continue well into 2019 and beyond, according to RiskWise Property Research CEO Doron Peleg.
He also stated, tighter lending standards, the results of the Royal Commission, the fear of the potential changes to negative gearing and capital gains tax, political uncertainty and unit oversupply, in conjunction with a sharp drop in dwelling commencements, will shape the entire landscape of residential property into 2020.
“And this means it is more important than ever to identify the red flags when it comes to buying property,” Mr Peleg said.
“There’s every chance the ALP will win this year’s Federal election and implement changes to negative gearing and capital gains tax. In fact, we have already seen an impact on the market due to uncertainty and fear about these changes, with price reductions accelerating following the Liberal leadership spill of Malcom Turnbull by Scott Morrison. In addition, auction clearance rates have dropped below 50 per cent in both Sydney and Melbourne.
“The risk of price reductions are likely to remain very high at least until the second half of 2020. This adds uncertainty and impacts buyer sentiment,” Mr Peleg stated.
Riskwise state that they have identified the red flags for high-risk dwellings that property investors should avoid,
These include oversupply, poor economic growth, as seen in Perth and South Australia, high unit-to-house ratios, high vacancy rates and units unsuitable for families.
<a href="https://www.propertyobserver.com.au/subscribe" target="_blank"><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/2019/1/Subscriber%20strip%20ad.jpg" alt=""></a>
Mr Peleg said there was a "high possibility" the value of an off-the-plan property may decrease between the original contract date and settlement.
Regions most as risk of this are Brisbane City, Fortitude Valley and South Brisbane which have all been named in the Top 10 of the RiskWise 2018 list of the 100 Worst Off-The-Plan Suburbs in Australia.
So have Zetland and Epping in Sydney and Southbank in Melbourne, where oversupply of units is a huge issue.
RiskWise research shows high-rise buildings generally carry higher risk than small unit blocks from both a capital growth and cashflow perspective, although Mr Peleg said this risk depended on the specific suburb and other factors such as strata payment and specific property features, all of which should be assessed on a case-by-case basis.
When it comes to purchasing property and avoiding the potential risks it's critical to perform independent research and avoid taking advice from so-called “property professionals or wealth creators” who were not paid for their services.
“No one works for free in the housing industry. If you are not paying, you are not the client, and someone else is, for example a property developer, and that means there is an agenda to get you to buy whether it is for your benefit or not. In other words, you will pay in the long run,” he concluded.
</body></html>

Buyer beware: the red flags for high-risk properties in the Australian housing downturn

<html><body>
EXPERT OBSERVER
Taking a blanket approach when implementing major policies unfairly undermines already weak property markets.
Western Australian Treasurer Ben Wyatt complained to the Australian Prudential Regulation Authority (APRA) that lending restrictions introduced across Australia by commercial banks were hurting the Perth property market and wider economy.
The restrictions were introduced to tighten investor lending in Sydney and Melbourne, but the effect has been felt Australia-wide, particularly in the weaker economic states, and Perth prices, which had stabilised, are once again falling.
The WA Treasurer’s complaints were “very unsurprising” but “expected when you apply a blanket approach to reforms across Australia”.
And this will also be one of the unintended consequences of Labor’s proposed changes to negative gearing and capital gains tax which they will introduce if they are elected into power at the upcoming federal election, which is very likely.
Overall the Perth property market had experienced continued weakness in recent years due to poor economic growth following the end of mining boom, a soft job market creating very slow population growth and, in some areas, oversupply of units.
Click here <a href="https://www.propertyobserver.com.au/images/2018/12/19/Perth1.jpg" target="_blank">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/2018/12/19/Perth1.jpg" alt="">
This weakness in the market has been reflected in negative growth for both houses and units over the past five years.
Click here <a href="https://www.propertyobserver.com.au/images/2018/12/19/Perth2.jpg" target="_blank">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/2018/12/19/Perth2.jpg" alt="">
People have been hoping for a few years that the market would reach the bottom but unfortunately this has not been the case.
Its economic growth has only been 0.9 per cent which means, relative to the other states, WA's overall economy is the weakest in Australia.
It was clear that applying a blanket approach across Australia when it came to the implementation of major policies did not work.
RiskWise and WargentAdvisory’s report in June into the Impact Analysis: Negative Gearing, CGT &amp; Australia’s Residential Property Markets clearly demonstrated the impact the proposed changes would have on weaker economies, Perth being one of them.
Every time there is a major policy or strategy introduced the potential consequences of it need to be assessed at the capital city level as well as the regional level (i.e. at the Statistical Area Level 4, or SA4 level), otherwise there will be unintended consequences, as you can’t expect not to have a major impact on weak areas.
The drop in property prices in Perth due to the credit restrictions is a very clear warning sign of what will happen in that property market and other weaker markets (outside Sydney and Melbourne) if a blanket approach for changes to negative gearing and capital gains tax is implemented.
In such cases the government needs to consider measures to boost demand. We identified these in our report and they include such things as further concessions for first home buyers and lifting restrictions for foreign investors in those areas. 
Government at both the state and federal level need to support these weaker markets by devising incentives for them such as increasing infrastructure to boost the economy and job creation and, therefore, population growth.
</body></html>

Riskwise

Editor's Picks

Have something to contribute?

The latest real estate & off the plan properties & news, delivered to your inbox.

Developments

New apartments

New townhouses

News

The latest real estate & off the plan properties & news, delivered to your inbox.

Riskwise

Editor's Picks

Receive the latest news stories to your inbox

Have something to contribute?

The latest real estate & off the plan properties & news, delivered to your inbox.

Developments

New apartments

New townhouses

News

The latest real estate & off the plan properties & news, delivered to your inbox.