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]

Joel Robinson

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

South East Queensland’s apartment market is entering a new phase defined by rising prices, constrained affordability, and mounting pressure on the construction pipeline, according to RPM Group’s latest SEQ Apartments &amp; Townhomes Market Report.

The May 2026 report highlights a widening divide between what buyers can afford and what developers can viably deliver, with detached house prices continuing to push more buyers toward apartments across Brisbane, the Gold Coast, and the Sunshine Coast.

RPM says Brisbane’s median house price has reached around $1.5 million, accelerating the shift toward higher-density housing as buyers are increasingly priced out of the detached market.

[smartcode_project:default project_id=135094 project_image_fid=356540]

Median unit prices rose across all three major SEQ markets in the March quarter. Brisbane City recorded the strongest annual growth, with median unit prices climbing 21 per cent to $862,000, while the Gold Coast reached the highest overall median at $950,000, up 17 per cent year-on-year. The Sunshine Coast followed at $870,000, representing annual growth of nine per cent.

RPM noted the affordability gap between houses and units remains significant, with detached homes commanding premiums of 67 per cent in Brisbane and 68 per cent on the Gold Coast relative to apartments.

The report suggests this price disparity is increasingly consolidating buyer demand within the apartment market, particularly among downsizers and owner-occupiers.

“Demand is real. Supply is moving. But they’re operating on different timelines and the gap between what’s being built and what buyers can afford is the defining tension in this market right now,” RPM Queensland and NSW Managing Directors Peter Neale and Clinton Trezise said in the report.

[smartcode_project:default project_id=150787 project_image_fid=366230]

While approvals and commencements are strengthening, RPM argues the delivery pipeline remains constrained by construction costs, labour shortages, and extended build timelines.

Apartment approvals across Queensland increased 86 per cent over the year to February 2026, reaching 12,682 approvals, the highest level recorded since 2016. Brisbane overtook the Gold Coast as the state’s most active apartment approval market, with nearly 5,000 apartments approved over the past 12 months.

Unit commencements also strengthened considerably, rising 48 per cent year-on-year to 5,453 commencements in the December 2025 quarter, the highest level since 2018.

However, RPM’s research found apartment delivery timeframes have expanded sharply compared to the previous cycle. Projects are now averaging around 30 months from approval to completion, compared to roughly 20 months a decade ago.

[smartcode_project:default project_id=143932 project_image_fid=367515]

The number of units under construction has climbed to approximately 31,530 dwellings, nearing the previous 2016 peak, though projects are remaining in the pipeline for considerably longer.

Construction costs continue to weigh heavily on feasibility. RPM found the average apartment construction cost in Greater Brisbane reached $630,000 per dwelling in 2025, exceeding both Sydney and Melbourne. Coastal Queensland markets, including the Gold Coast and Sunshine Coast, were even higher at an average of $817,418 per apartment due to the prevalence of larger premium product.

The report also points to increasing pressure from Olympic-related infrastructure spending ahead of Brisbane 2032, with labour competition expected to intensify over the next several years.

[smartcode_project:default project_id=150017 project_image_fid=370960]

ANZ Associate Director of Property Daniel Gradwell said the underlying demand drivers across South East Queensland remain strong, supported by interstate migration, downsizers, and population growth.

“The challenge is bringing enough supply to market to meet that demand, and nothing on the horizon makes that straightforward,” Gradwell said.

RPM’s analysis found the affordability challenge is becoming more pronounced in the new apartment market itself, with only three per cent of surveyed new apartments priced below $1 million.

Instead, the market is increasingly concentrated in higher price brackets, with the most common new apartment price band across SEQ sitting between $1.5 million and $1.75 million. Around half of all new apartment stock surveyed is priced below $2 million.

The report suggests developers are not necessarily avoiding lower price points by choice, but because current construction economics make delivering affordable apartments increasingly difficult at scale.

Rental conditions also remain tight across the region. Median rents for one-bedroom apartments rose 12 per cent in Brisbane over the past year to $580 per week, while Gold Coast one-bedroom rents increased nine per cent to $630.

Despite rising rents, RPM noted bond lodgements have generally trended downward over the past five years, indicating more apartments are being absorbed by owner-occupiers rather than retained as investor-held rental stock.

Looking ahead, RPM expects projects targeting the mid-market owner-occupier segment between $1.25 million and $2 million to remain the most viable part of the market, while premium projects in highly constrained coastal or riverfront locations continue to attract demand.

“Construction costs are rewriting the feasibility rulebook across Greater Brisbane, and with little relief in sight, only projects in the right price band, right location, and with presales secured early will make it through,” the report concludes.

SEQ apartment demand outpacing affordable supply as construction timelines stretch: RPM

Camberwell Junction has long been the epicentre of amenity in Melbourne’s Boroondara region.

For nearly a century, it has drawn both locals and visitors, anchored by the Camberwell Sunday Market, which first operated in 1929 and quickly became a fixture of the suburb’s identity. Over time, the Junction evolved into one of Melbourne’s most established retail and lifestyle precincts, now comprising more than 400 stores and over 300 commercial businesses.

Despite that depth of amenity, one thing has remained notably limited: the supply of new apartments.

In a suburb defined by its heritage streetscapes and tightly held residential stock, new development opportunities have been scarce, particularly within the core of the Junction itself. That lack of supply has left a gap in the market for larger, design-led apartments suited to downsizers and owner-occupiers wanting to remain in the area.

Boutique developer Above Zero identified that gap when it secured a prime site on Burke Road, in the heart of Camberwell Junction.

[smartcode_project:default project_id=4896 project_image_fid=368543]

The site has a long planning history. Various proposals have been put forward over more than a decade, many of which were knocked back by the City of Boroondara, with initial applications dating back to 2015. Above Zero acquired the site in 2022 and returned with a revised scheme, refining both the building’s height and its ground-level interface to better align with Council expectations.

That process has culminated in approval for Camberwell House.

The Cera Stribley-designed development will deliver 57 residences on a 1,950 sqm site within the Camberwell Activity Centre, placing it directly within one of Melbourne’s most established retail and transport hubs.

It is expected to be one of the only new apartment developments to launch in the Junction in recent years, reinforcing the rarity of new supply in the precinct. Currently, there are just a handful of projects on the market in Camberwell, underscoring the significance of a development of this scale and positioning.

[smartcode_project:default project_id=4896 project_image_fid=368544]

Camberwell House has been conceived with a clear focus on larger-format apartments. The project will offer a mix of two-, three- and four-bedroom residences, alongside a limited number of penthouses, targeting owner-occupiers seeking scale rather than volume-driven product.

The building’s vertical presence will also set it apart.

Positioned on Burke Road, the development is set to become one of the taller buildings in its immediate context, allowing for elevated outlooks across Melbourne’s CBD skyline and toward the Dandenong Ranges. In a precinct characterised by lower-scale built form, that height provides a point of differentiation, particularly for buyers seeking outlook and natural light.

[smartcode_project:default project_id=4896 project_image_fid=368568]

Architecture has been led by Cera Stribley, with interiors by GOLDEN and landscape design by Florian Wild. The design approach centres on material consistency and restraint, with residences oriented to maximise light, ventilation and connection to outdoor spaces.

Full-height glazing and generous terraces form a key part of that strategy, allowing apartments to extend beyond their internal footprint and engage with the surrounding environment.

Beyond the private residences, a significant component of the project is its amenity offering.

Above Zero has positioned Camberwell House as a “complete living environment”, incorporating a full floor dedicated to resident facilities. At the centre of that is a wellness zone, including a 12.5-metre lap pool, spa, sauna and treatment spaces, alongside a gym and recovery-focused amenities.

This level of amenity is more commonly associated with inner-city developments, rather than established middle-ring suburbs like Camberwell.

[smartcode_project:default project_id=4896 project_image_fid=368588]

Additional shared spaces include a private library lounge, dining and entertaining areas, and an indoor golf simulator. A self-contained guest suite has also been incorporated, allowing residents to accommodate visiting family or friends without impacting their primary living space.

The inclusion of these facilities reflects a broader shift in buyer expectations.

As more downsizers look to transition from larger family homes into apartments, there is increasing demand for developments that offer not just a residence, but a lifestyle. That includes access to wellness, social and entertaining spaces within the building itself, reducing the reliance on external amenity while still maintaining proximity to established precincts.

Camberwell House is positioned to benefit from both.

Its location places it within immediate walking distance of Camberwell Junction’s retail and dining offering, as well as public transport connections, including tram and train services. That combination of internal amenity and external convenience is central to its appeal.

<section data-scroll-anchor="false" data-testid="conversation-turn-150" data-turn="assistant" data-turn-id="request-WEB:55d7c6ac-8e6d-4881-ad49-0ed9bf66d1cc-74" dir="auto">
Jellis Craig Projects Director Stephen Bowtell is handling sales for the project and says Camberwell House offers a rare entry point into one of Melbourne’s most tightly held markets.

“Buyers are recognising that Camberwell House offers something they simply haven’t seen before in Boroondara,”&nbsp;Bowtell&nbsp;says.

“It combines a level of resident amenity and service typically associated with Melbourne’s premium inner-city developments, while being positioned right in the heart of Camberwell Junction.

“The response to the concierge offering has been particularly strong. Buyers appreciate not only the convenience, but also the sense of security and peace of mind that comes from having a dedicated presence in the building every day.

“When you combine that with the wellness facilities, the exceptional arrival experience, and panoramic views across both the CBD skyline and the Dandenong Ranges, it creates a lifestyle proposition that is genuinely unique within the local market.”
</section>

[smartcode_project_cta:default project_id=4896]

Above Zero launches Camberwell House in undersupplied Camberwell Junction precinct

Scott Morrison

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Regulatory tightening is working to cool the overheated property market without a hard landing, according to Treasurer Scott Morrison.
"The data shows to date that we are moving towards a safe landing when it comes to housing markets in Sydney and the pendulum swinging back in the favour of home owners and first home buyers, which is good news," Morrison said in Sydney on Monday, according to The Australian Financial Review.
In March, the Australian Prudential Regulation Authority announced restrictions on interest-only loans in response to record high household debt levels and the measure was has been "fully supported by the government”, he said.
Interest-only loans must be restricted to 30 per cent of new residential mortgage loans, APRA said.
"We are seeing the outcomes of that now; that very careful approach that we have been encouraging and supporting now having this impact in the markets in Sydney and in Melbourne where things are easing off to a safe landing, not the hard landing that Labor's policies would deliver."
However, the CoreLogic Home Value Index <a href="/news/slowest-quarterly-rate-of-dwelling-value-growth-since-december-2015-corelogic">recorded a recovery</a> from the 1.1 percent fall in May, with an 1.8 percent rise in capital city dwelling values over June, with Sydney home prices up 2.2 percent.
Meanwhile, Australian Bureau of Statistics data showed building approvals fell 5.6 per cent in May, the second fall in three months.
Asked whether he was comfortable with how the housing market was tracking, Morrison said the data on housing was "an endorsement of the careful approach the government has been taking”, the AFR reported.
He again reiterated that the sober, careful approach “is providing that very calm and considered way to deal with what is a very real issue for so many Australians”. 
Morrison had advocated a scalpel-like approach to the housing affordability issue.
"I'm encouraged by the fact that we are seeing more owner occupiers, first home buyers coming back into the market. We want to see that happen."
 
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jonathanchancellor-7SQnKwU6yx

Treasurer Scott Morrison says housing market poised for 'safe landing' after regulatory curbs

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Housing affordability is not a new problem, and as the Federal Treasurer Scott Morrison pointed out, he like anyone in Sydney has actual experience that it has actually never been easy to buy a home.
He rightly argues, dealing with housing affordability must involve a scalpel, not a chainsaw given the likely or unintended consequences of some policy.
He warns declining housing affordability can't be answered with lower economic growth.
It is likely the housing affordability will be an important policy focus of the Turnbull Government May budget.
And to try to shape the agenda, the Treasurer gave a 4600 word speech this month to outline some of the issues.
I took four nuggets from his speech to the Australian Housing and Urban Research Institute which highlight the complexity of it all.
1) Some two million taxpayers in Australia have an interest in a residential investment property. Around 72 per cent own just one property and 90 per cent own no more than two. Less than one percent of investors have six or more investments. Around 1.3 million of these taxpayers negatively gear, including 58,000 teachers and one in five police officers. 
2) Mum and dad investors are putting a roof over the head of around a quarter of all renting households in the country. If mum and dad investors were not part of our private rental market, there would be fewer rental properties available, meaning higher rents. Morrison notes disrupting negative gearing would come at a cost, especially to renters. It would not be good news for the 30 per cent of Australian households who rent. 
3) Morrison said you can't help first homebuyers save for a deposit by implementing policies that increase their rent. Over 85 per cent of private renters move within five years and almost one third of moves are forced. Around 47 per cent of low-income rental households in our capital cities spend more than 30 per cent of their household income on housing costs. His concern for families with children who need housing stability to have beneficial access to schools and medical assistance suggests we need longer term leases. 
4) Australian residential property investment is more geared to capital gain than yield. Morrison sees the need to establish a new institutional investment class as is occurring overseas. Property needs to be a longer term fixed interest investment that can comfortably sit within institutional investment portfolios and Australian super funds. 
"Previous governments have avoided dealing with these issues for fear of raising and disappointing expectations," Morrison concluded, adding that failure to confront these issues in the past can be traced back to the problems we face today. I only hope he hasn't overly raised expectations.
Morrison's first property purchase cost $330,000 with his wife, bought in Bronte in 1995, where he grew up as a child, and then they upgraded to the Shire at $920,000 in 2009.
This article first appeared in the Daily Telegraph. 
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jchancellor-FAypfDUnLy

Scott Morrison advises housing affordability is not a new problem

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Treasurer Scott Morrison has said the housing affordability problem, mainly in Sydney and Melbourne which houses 40 percent  of Australia’s population, has to be dealt with a ‘scalpel’ approach, "not a chainsaw as advocated by the Labor Party."
He said the “principal cause of declining housing affordability is the failure of housing supply to adjust to increased demand, driven by higher economic growth”.
Batting for a careful and calibrated response, Morrison said drastic steps could “spark a negative housing shock that would undermine our economic confidence, negatively impact household consumption and retard economic growth”.
He noted that the proportion of Australian households that own their own home has fallen marginally from 71 per cent to 67 per cent over the last two decades.
“Between 2002 and 2014, home ownership among 25 to 34 year olds declined more significantly by almost ten percentage points to less than 30 per cent. That is more than 160,000 young people that would otherwise be home owners. For 35 to 44 year olds it fell by more than ten percentage points to 52.4 per cent.”
Higher house prices are making it tougher for potential homebuyers to transition into ownership.
He cited research by CHOICE, the National Association of Tenants' Organisations and National Shelter, that said just over half of renters say they rent because they can't afford to buy their own property.
Because of this, they are staying in the rental market for longer — a dynamic that puts upward pressure on rental prices and availability and even more pressure on lower-income households, increasing the need for affordable housing.
“Our response must first strive to remove obstacles that restrict supply responding to genuine demand. These impediments are well known, planning delays and regulations, supporting infrastructure and services, the cost of new development, taxes and charges and access to sites, including Government land, just to name a few,” he said.
As an example of the scalpel-like approach, he said a good example was the recent action taken by the Australian Prudential Regulation Authority to limit the share of housing lending that is interest-only. This follows their earlier intervention in December 2014, placing a speed limit on investor credit growth that halved previous levels.
He noted the decline in home ownership and increase in mortgage costs has been most pronounced in family-forming households and that Australians are increasingly carrying into their retirement larger mortgage debts, or are renting.
“The proportion of home owners aged over 45 with a mortgage has increased and, according to the Productivity Commission in 2015, the most frequent use of superannuation lump sums was to fund housing, including paying down mortgages.”
He cited Saul Eslake's recent report to Superannuation trustees saying, "it is likely that an increasing proportion of new retirees will use some or all of their accumulated superannuation savings to discharge their outstanding mortgage debt' and that 'an increasing proportion of retirees will be living in privately rented housing, spending a higher proportion of their income on rent."
These are the facts and they represent a problem that needs to be addressed in the broader national interest, said Morrison.
“As a Government, we acknowledge that for certain Australian households, housing affordability is an issue regardless of where they live due to economic reasons such as not having a job or social reasons such as having a disability.”
The government is working on a taskforce to look at harnessing large-scale private investment through a bond aggregator concept.
The bond aggregator would issue bonds to the market, and on-lend these funds to community housing providers — allowing them to access cheaper and longer term finance.
The Housing Finance Corporation (THFC) in the United Kingdom, has operated a similar model successfully for over 30 years, he said. THFC has provided more than £5 billion worth of loans which is assisting the provision of affordable housing throughout the UK.
"Of course, if found to be viable, a housing bond aggregator is only a part of the solution. A variety of complementary reforms are required to increase the supply," said Morrison.
For the full text of speech, <a href="https://sjm.ministers.treasury.gov.au/speech/005-2017/" target="_blank">click here</a>.
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Treasurer Morrison says tackling housing affordability needs a scalpel-like approach

Address to the Australian Housing and Urban Research Institute, Melbourne: Scott Morrison

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<img src="https://counter.theconversation.edu.au/content/72861/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1">
GUEST OBSERVERS 
Federal government ministers have cast a cloud over funding for social housing and homelessness services, leading to speculation that the National Affordable Housing Agreement (NAHA) may not survive the 2017 budget.
Treasurer Scott Morrison and Assistant Treasurer Michael Sukkar point to the recent Report on Government Services, which shows the number of public housing properties has fallen, as evidence of the NAHA’s “abject failure”. Sukkar said:
"We believe it’s crucial that every dollar of spending on affordable housing programs increases the number and availability of public and social housing stock. Clearly, this objective has not been met."
It should be no surprise that Australia’s social housing has been largely static for 20 years. Everything we know about the system tells us it is not funded to even cover the costs of its ongoing operation, let alone growth to meet the needs of an expanding population. Aside from a one-off boost under the 2009 federal economic stimulus plan, social housing has been on a starvation ration for decades.
The whole system system is effectively being run at a loss. So, from the perspective of state governments, building a new public housing dwelling is just one more way of losing money.
The federal government has also long lamented the lack of transparency about how states and territories spend their NAHA funds – about AS$1.5 billion a year. And there are glaring gaps in the evidence about the operations and performance of public housing authorities.
In failing to act on a 2009 commitment to modernise and enhance the Report on Government Services metrics, the states and territories have placed themselves in a weak position to rebut claims of ineffective financial management.
That said, everyone who has any contact with the public housing system knows it to be grossly underfunded. One-off studies occasionally illuminate the scale of the issue. For example, a 2013 New South Wales Audit Office report found a $600 million annual operating deficit for that state’s public housing. But no-one can easily quantify the extent of the problem using routinely published data.
A snapshot of social housing in Australia
Around 320,000 of Australia’s approximately 428,000 social housing dwellings remain under public housing authority control. This stock was amassed through a long series of funding agreements between federal and state and territory governments. These were known as the Commonwealth-State Housing Agreements until their 2009 NAHA rebranding.
From the first Commonwealth-State Housing Agreement in 1945, the basic arrangement was that the federal government would lend funds to state housing authorities to build houses. The states would cover the ongoing costs from the rents paid by working-class tenants.
And, at least to begin with, the housing authorities did build. They made a significant contribution to housing supply, amounting to roughly one in six houses built between 1945 and 1965.
From the early 1970s, the housing authorities were directed, justifiably, to provide more housing to low-income households unable to pay full “market” rents. However, their capital funding also went into a long decline. With the exception of a brief period in the mid-1980s, housing authorities never again built at their earlier rate.
A number of interlocking problems set in. Social housing’s declining share of the housing stock became more tightly rationed to the lowest-income households. This eroded the system’s rent base. At the same time, its ageing buildings and households with greater support needs increased its costs.
Two landmark studies by Jon Hall and Mike Berry charted the implications of these developments for the finances. At the end of the 1980s, all but one of the housing authorities ran an operating surplus. By 2004, all but one ran an operating deficit.
Various attempts to improve the situation have been made. The 1989 Commonwealth-State Housing Agreement switched federal funding from loans to grants; the 1996 agreement allowed federal funds to be spent on recurrent expenses. In the early 2000s, rebates on social housing rents were reduced, slightly increasing revenue.
Modest amounts of public housing have also been transferred into the hands of not-for-profit community housing providers. Partly, this is to take advantage of the eligibility of community housing tenants for Commonwealth Rent Assistance. But although this often enables these providers to run a small operational surplus, it isn’t enough to fund stock replacement or any significant expansion.
Meanwhile, the overall stock has been eaten away, through market sales of public housing, and run down, through skimping on repairs and maintenance. Both are unsustainable strategies.
Running a system without good data
If the broad outlines of the problem are clear, there are major deficiencies in the data as to the details. The Hall and Berry analysis is now dated. There is no current evidence base that shows transparently and consistently what the social housing system in each state and territory costs, and how these costs are met.
For example, the Report on Government Services purports to show the “net recurrent cost per dwelling” for each state and territory. But this does not differentiate between distinct expenditure components such as management and maintenance.
Our 2015 research found that this metric was a “black box”, subject to implausibly large variations across jurisdictions. These reflected the vagaries of departmental restructures, rather than a sound accounting of social housing operations.
There is little doubt that all public housing authorities are now in deficit. However, the Report on Government Services provides no data on the relative scale of these funding shortfalls. Nor do governments routinely reveal the scale of system costs still met by tenants’ rents, nor through stock sales.
What should a rebooted NAHA do?
Although the NAHA does it inadequately, an enduring program of federal funding for operational expenses is essential to sustain the social housing system. Such funding cannot be “replaced”, as Morrison has suggested, by a government-backed aggregated bond financing model.
The bond aggregator model depends on social housing providers having a durable subsidy from government that pays the difference between their ongoing costs and the revenue from rent that low-income tenants can afford.
Instead, NAHA should be rebooted to deliver three things:
capital funding for new social housing stock, distributed according to an assessment of current and projected needs in each state and territory;
recurrent funding, distributed according to the number of social housing dwellings in each state and territory and an assessment of reasonable net recurrent costs; and
clear accounting by social housing providers for costs of provision and the contributions of tenants, government funding and other sources of income towards meeting these costs.
Many in the social housing world would agree the NAHA framework is far from transparent and that there is no certainty that NAHA money is optimally spent. But a ministerial focus on these issues while ignoring the system’s chronic underfunding smacks of re-arranging deckchairs.
Rather than scrapping the NAHA, the system should be rebooted, to properly fund both the growth and ongoing operations of social housing. This must be done on the basis of clear targets for the level of need to be met and the reasonable costs of providing the service.
Chris Martin is research fellow, Housing Policy and Practice, UNSW and can be contacted <a href="https://theconversation.com/profiles/chris-martin-203935" target="_blank">here</a>.
Hal Pawson is<a href="https://theconversation.com/profiles/hal-pawson-147969"> </a>associate director - City Futures - Urban Policy and Strategy, City Futures Research Centre, Housing Policy and Practice, UNSW and can be contacted <a href="https://theconversation.com/profiles/hal-pawson-147969" target="_blank">here</a>.
Both are authors for The Conversation.
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Australia needs to reboot affordable housing funding, not scrap it

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Housing affordability is not a new problem, and as the Federal Treasurer Scott Morrison pointed out, it has actually never been easy to buy a home, especially in our major metropolitan areas.
Housing affordability will be an important policy focus of the Turnbull Government. And to try to get it right, the Federal Treasurer gave a 4400 word speech last week to outline some of the issues.
"As we move forward it is important to properly diagnose the problems we are trying to solve," he said. 
He noted when combining both outright ownership and those paying off a mortgage, the proportion of Australian households that own their own home has fallen from 71 per cent to 67 per cent over the past two decades, so there is a certainly a trend there.
He did stress the increase in Australian house prices has largely been driven by fundamental determinants.  
"Australia's housing markets may be expensive, but in aggregate they are substantively sound, reflecting the natural tension between the forces of supply and demand," he said.
I took five nuggets from the speech which are concerning, but which highlight the complexity of it all.
1) Between June 2010 and June 2015, the time taken for a dual income couple to save for a 20 per cent deposit in Sydney increased from 5.8 years to 7.9 years. In Melbourne it increased from 5.3 years to 5.8 years. However, outside NSW and Victoria, the change in the number of years to save for a deposit actually fell, showing the impacts are not even across the country. 
2) Home ownership rates are falling across all age groups, not just young Australians. Between 2002 and 2014, Australian home ownership among 25-34 year olds declined from 38 per cent to 29 per cent while for 35 to 44 year olds it fell from 63 per cent to 52 per cent.
3) When we look at the change in home ownership by state, the largest falls over the last twenty years have been in Queensland and Victoria, rather than NSW.
4) The percentage of purchasing households aged under 44 that are dual income has risen from just over 50 per cent in 1981 to more than 80 per cent in 2011, while the proportion of single income households fell from around 50 per cent to less than 20 per cent over the same period.  
5) The proportion of home owners aged over 45 with a mortgage has increased significantly over the past 20 years. It's taking longer to be free of the mortgage with the trend having the potential to undermine retirement incomes.
Morrison noted the challenge of not being able to access secure housing has flow on effects to many other policy areas. It impacts health, work force participation, social cohesion, welfare dependency, family formation and household consumption to name a few.
Morrison concluded that of all the determinants of house prices in Australia, whether cyclical or structural, "the most important factor behind rising prices has been the long running impediments to the supply side of the market."
Some argue with that conclusion seeking him to look at the impact of overseas migration which was not addressed, although he did note between 2005 and 2010, Australia had the highest average rate of overall population growth in the OECD, except for Israel.  
As there is no single housing market in Australia, there will however never be a single solution.
This article was first published in the Saturday Daily Telegraph.
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Five concerning housing affordability issues

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<img src="https://counter.theconversation.edu.au/content/67796/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1">
GUEST OBSERVER
Scott Morrison is a “once bitten, never shy” sort of guy. Having had a bad experience in the high profile debate over whether to change the GST, which ultimately came to nothing, the Treasurer this week launched into the hot topic of housing affordability.
The question is, can he and the government manage the issue or will it, too, turn on them?
With tax, the then-new Turnbull government put “everything on the table”, only to produce a package limited in scope and reform. Even the centrepiece of that - a company tax reduction over a decade – will have to be pared back to pass the Senate.
The opposite approach is being brought to housing affordability. Morrison wants to confine what’s put on the table to the supply side. Attacking demand would crash the market, he says. So in his Monday speech to the Urban Development Institute of Australia he focused on the need to cut planning regulations to free up land.
But the pressure is strong for a broader discussion.
Morrison’s address had plenty of statistics illustrating the problem. Over the past 20 years the proportion of Australian households owning or paying off their home has fallen from 71% to 67%; the proportion of home owners over 45 with a mortgage has risen significantly.
As Morrison said, “the real pinch point” is breaking into the market. “Across the country, a 20% deposit on the nationwide median home loan is more than 100% of annual household disposable income … well above the 60% levels that were the norm prior to 2000.” The proportion of home loans to first home buyers was 13.4% in August, the lowest since February 2004; this compared with the long term average of 19.4%.
Morrison noted that the housing issue had implications for retirement incomes. If it takes longer to pay off your mortgage, you can save less for later, or perhaps eventually need to use some of your superannuation to clear your house loan. He didn’t observe, but it is also true, that many younger people facing the challenge of getting together a deposit will also have the burden of starting to pay back student debt.
Malcolm Turnbull is said to be very anxious the government search for solutions to the affordability challenge. Expert opinion and common sense indicate this search should be as broad as possible, looking at the demand as well as the supply side.
The government knows this. Before the last election it considered imposing some restraint on negative gearing. But, wanting to sharpen the contrast with Labor, which proposed bold changes to negative gearing and capital gains tax, it did not go ahead.
Thus its attempt to put the affordability issue into the straightjacket labelled supply - with emphasis on regulations that are state and local rather than federal government responsibilities - is very political, when what’s needed is an open-minded quest for the best evidence-based policy.
Already the containment is being resisted.
Last term the government had a parliamentary inquiry underway by the House of Representatives economics committee into home ownership, chaired by Sydney Liberal John Alexander. Alexander was moved to another committee; by the time of the election the inquiry had not reported. Post-election Turnbull, hosing down another problem, had the economics committee divert onto quizzing bank CEOs.
Now Alexander wants the housing inquiry reconstituted under his House committee on infrastructure, transport and cities. That would make a lot of sense - much work was done and shouldn’t be wasted. Alexander wrote to Morrison in September seeking the reference, but hasn’t heard back yet.
This is a nice dilemma for Morrison. Alexander is widely on the record arguing the demand side is important and, what’s more, that investors are making it hard for young first home buyers. The evidence indicated “investors were trampling on the opportunity for people wanting to buy a first home”, he says.
Alexander believes there is a case for tweaking negative gearing - though he does not support Labor’s policy which would have been “catastrophic” - and for looking at capital gains tax provisions. He describes negative gearing as an “incredibly dynamic tool” and likens it to a high-powered car that needs to operate within a speed limit.
He says the policy objective should be a gradual transition “to maximum home ownership” and a reduction in “speculation and opportunism” in the market.
Not only does the government have to decide about the parliamentary inquiry but Morrison has said he will take up the issue of freeing up planning regulations with state treasurers when they meet in December.
This can be seen as pushing the issue onto the states. The perennial debate has also re-opened about how a shake up of state taxes could help.
Morrison faces the risk of perceived failure if the federal government raises expectations then little happens. Even if the states pledged to regulation reform, results would come in the medium term.
The other danger for Morrison and the government is that opening up the housing affordability issue is moving the play onto Labor’s ground. The opposition’s position on negative gearing doesn’t seem to have cost it votes on July 2. It gets the opportunity to run it again, arguing that it has a ready-made policy to respond to the problem the Treasurer has put right at the centre of the political agenda.
Michelle Grattan<a href="https://theconversation.com/profiles/michelle-grattan-20316" rel="author"></a> is professorial fellow, University of Canberra and author for The Conversation. She can be contacted <a href="https://theconversation.com/profiles/michelle-grattan-20316" target="_blank">here</a>.
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Morrison opens housing affordability debate but can he control it?

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There are few real estate activities more depressing than observing a media debate about housing affordability.
It’s a downer because it’s clear from the rhetoric that this nation is unlikely to ever achieve any kind of resolution of the issue.
There are four reasons: (1) the politicians don’t understand it and/or are unwilling to do what’s needed; (2) industry people who do understand it champion their vested interests rather than the national interest; (3) everyone else has their heads full of misinformation, political agendas and unhelpful emotion; and (4) most discussions focus on Sydney prices and ignore the realities in other parts of Australia.
The outcome is mishmash of misconceptions, myths and outright lies. Nothing useful is ever achieved.
A recent discussion of ABS TV program The Drum was representative of how bad it gets. None of the people at the discussion table had any knowledge on the issue and simply indulged their prejudices and personal agendas. One spectacular twit claimed no one can get into the housing market any more because you need a $200,000 deposit to buy a typical house. Not even in Sydney is that remotely close to the truth.
The so-called affordability crisis is never far from the headlines and it stepped up in prominence this week with Federal Treasurer Scott Morrison declaring he was serious about fixing the problem. But of course he wasn’t serious at all. He essentially dumped the problem at the feet of state governments, with a generalised assertion that taking steps to increase dwelling supply will make everything better.
That’s one of the subject’s biggest furphies – a simplistic policy of lifting supply won’t force down prices unless the idea is to deliberately generate a major oversupply. One thing Morrison got right was his statement that you won’t fix the problem by crashing the market.
As a general observation, we don’t need more dwellings in Australia. We’re already building far too many apartments, which will result in falling values, but only in specific areas such as the inner-city unit markets of Melbourne, Brisbane and Perth, as well as surfside Gold Coast. This runs contrary to the statement by Malcolm Turnbull this week that “we simply haven’t been building enough dwellings” – which shows how little he understands about the situation.
Federal Labor responded with its standard party line that restricting tax benefits for investors will make housing affordable again – despite the assertion by leader Bill Shorten that his policy won’t cause house values to decline (so therefore how will it make housing more affordable?). And that, sadly, is the extent of his understanding of the issue.
There followed lots of finger-pointing, with each level of government blaming another level of government for the perceived problems, and each side of politics scapegoating their opponents.
Industry lobby groups leapt at the opportunity to advance their pet causes. Master Builders Australia agreed, naturally, that a big lift in new home construction would be the solution, but argued that politicians needed to make changes to make it really attractive for developers and builders. The Urban Taskforce declared that developers would be happy to build lots of affordable homes, just so long as government handed them plenty of financial incentives. 
As I’ve often commented, the biggest noise in real estate is always the voice of vested interest.
Even in Perth, where there is vast oversupply and high vacancies right across the metropolitan area, the Urban Development Institute of Australia urged the WA State Government to take steps to increase housing supply. 
To paraphrase Shakespeare, they were all tales told by idiots, full of sound and fury, signifying nothing.
The problem is that none of solutions put forward will make the required difference. They’re all targeting the wrong villains.
Everyone has a theory on who’s to blame for rising prices: some say foreign investors, others claim Australian investors, a few proclaim it’s first-home buyers pumped up by government incentives and still others, including former federal minister Bob Carr, reckon it’s the high level of overseas migration into Australia.
Who’s right? Well, none of them. The real culprits are never mentioned.
The biggest single force in driving house prices comprises the market sector known as next-time buyers –i.e. home-buyers other than first-home buyers. Numerically they’re the biggest chunk of the market and they’re aspirational. They have the financial capacity and ambition to pay top dollar to secure the property they’re obsessing over.
Investors, generally, don’t do that and first-timers can’t afford to.
But there’s an even bigger villain, one the politicians never mention while they’re busy pointing their fingers in various other directions - because the biggest problems are caused by the politicians themselves.
The value of homes in Australia is under-pinned by their replacement cost – i.e. the high cost of creating new house-and-land packages, the biggest chunk of which comprises taxes, fees and charges from all three levels of government.
As long as local, state and federal governments treat the housing industry as a beloved cash cow, housing will remain pricey in this country. Most of the state budgets handed down this year made the problem worse by adding to housing costs. 
You can build as many new houses as you like, but developers can’t sell them for $250,000 if they cost $400,000 to create.
Federal politicians recently conducted an inquiry into the affordability issue, which took a lot of time, cost of lot of money and achieved absolutely nothing. The Federal Government made a show of clamping down on foreigners illegally buying mansions, but that has changed nothing for first-home buyers 
Last year another inquiry was initiated by the House of Representatives economics committee but, according to reports this week, that has lapsed through lack of energy.
So where are we after all that “sound and fury”? Exactly the same place we were before Scott Morrison stepped up to the microphone – nowhere closer to any solutions.
Terry Ryder is the founder of <a href="https://www.hotspotting.com.au/" target="_blank">hotspotting.com.au</a>. You can <a href="https://mailto:ryder@hotspotting.com.au" target="_blank">email him</a> or follow him on <a href="https://twitter.com/hotspotting" target="_blank">Twitter.</a>
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