Property developer One Living, backed by former Macquarie banker turned investment manager Chris Green’s investment firm, has unveiled plans to bring more institutional capital into housing to help address the national supply crisis.

The New York-based investor has focused his firm, GreenPoint Partners, on addressing the supply shortage hitting middle market housing in Australia.

It is backing the new One Living business to develop more than 1000 units along the eastern seaboard. The new firm is starting with a development on Mona Vale Road, on the border of Mona Vale and Pymble, in Sydney’s Northern Beaches, with around 140 apartments planned. They are eyeing off more sites across the city.

With cost pressures rising in the industry, One Living’s model is to be a vertically integrated developer-builder, so it can respond directly to the housing gap by removing the cost inefficiencies embedded in traditional residential delivery.

“We are building a platform designed to operate at scale and starting in a market where there’s a clear need for quality, attainable housing,” One Living joint managing director Joseph Scuderi said.

“It’s that missing middle – it’s that attainable end of housing… that’s what most Australians invest into and what Australians can actually afford.”

<img alt="Mona Vale" data-entity-type="file" data-entity-uuid="798dfa93-4941-4db6-a696-31e9dc18e81c" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%202.31.50%E2%80%AFPM.png?VersionId=mKBqi5C_DmeiXS.AtJkcR8LQIxqCqmFi" />

GreenPoint Partners brings years of experience assembling and scaling real estate operating businesses across major markets. And Green sees a big opportunity in Australia.

“For its size, sophistication and importance to the community, Australia’s living sector has remained largely under-institutionalised, which represents significant opportunity,” Green said. “GreenPoint identified that gap, assembled the right team, and is backing One Living to build a platform that is aligned to market needs.”

Green said being a builder-developer would give the company the capacity and flexibility it required to deliver reasonably-priced homes.

“We want it to be at that attainable level; not super high end luxury but at that attainable level,” he said.

<img alt="Mona Vale" data-entity-type="file" data-entity-uuid="74a5344a-4b26-4d4a-ada3-056b1220be77" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%202.32.15%E2%80%AFPM.png?VersionId=vY8hXHO4reBMdO8ZXMWCNtGZJofUPQ3j" />

&nbsp;

One Living will undertake a component of affordable housing in its schemes, which it will own and operate, and it could also run build-to-rent on some sites.

Green praised local policy settings.

“The NSW government is being very supportive, strategic and pragmatic in terms of how do we generate more supply of housing,” he said. “We think it’s actually positive for development and the bit that’s been lacking at that attainable level is that it’s lots of relatively small private developers, whereas we want to create an institutional platform.”

One Living is also&nbsp;looking at high-density projects and could take on more institutional funding in the future.

“The way we will be able to achieve economies of scale is through size,” Green added.

Joel Robinson

One Living enters Sydney's new apartment market with Northern Beaches site acquisition

It's been several years since there's been an opportunity to buy a brand new townhome in Melbourne's coastal suburb of Mordialloc. Even apartment developments in recent times have been few and far between in the area.

Local developer LDS Property identified the gap in new housing, securing a site on White Street, directly opposite&nbsp;Woodlands Golf Club Mordialloc. They've recently launched&nbsp;<a href="https://www.apartments.com.au/new-townhouses/wm-residences-mordialloc-102-white-street-mordialloc-vic-3195">WM Residences</a>, just 13 townhouses which they have already started building.

Projects by Buxton Director Heath Thompson, who is selling WM Residences, says the townhouses x that perfect middle ground be

"Mordialloc residents have had limited options to downsize within the suburb, often forcing them to look elsewhere despite long-standing ties to the area," Thompson says.

"With very little comparable new supply coming to market, projects like WM Residences are well placed, particularly as buyers look to capitalise on current conditions amid constrained supply."

[smartcode_project:default project_id=134646 project_image_fid=6109]

The development, designed by regarded architecture firm&nbsp;<a href="https://www.apartments.com.au/architects/ewert-leaf">Ewert Leaf</a>,&nbsp;adopts a deliberately restrained architectural approach, focusing on simplicity, durability and liveability rather than overt design gestures.

The boutique scale is central to the offering. With only 13 three-bedroom residences, each home is configured to prioritise functional layouts and everyday use, supported by private terraces and secure two-car garages.

Ewert Leaf’s design response leans into a calm, neutral material palette. Interiors are defined by oak flooring, white walls and soft finishes, creating a consistent and understated backdrop. The approach avoids trend-driven detailing in favour of longevity, with an emphasis on natural light and spatial clarity.

[smartcode_project:default project_id=134646 project_image_fid=6110]

Beyond aesthetics, the homes are designed to meet contemporary performance expectations. Each residence targets a minimum 6-star energy rating, incorporating double glazing, comprehensive insulation and all-electric Bosch appliances.

The project’s location supports a walkable coastal lifestyle, sitting within close proximity to Mordialloc’s foreshore, Main Street retail strip and the train station. Local cafés and dining venues, including Suburbia Deli and Hendriks Café, are within a short walk, reinforcing the area’s established neighbourhood character.

[smartcode_project:default project_id=134646 project_image_fid=6116]

While <a href="https://www.apartments.com.au/developments/mordialloc-vic-3195">Mordialloc</a> is often defined by its beach and pier, the project taps into other areas of day to day living, offering easy access to local food, casual dining and transport, rather than positioning itself purely as a lifestyle retreat.

WM Residences reflects a continued trend across Melbourne’s coastal suburbs towards smaller-scale, design-led townhouse developments, particularly on infill sites where proximity to amenity is already established.

With construction commenced prior to its market entry, the project aligns with a growing preference among buyers for developments with visible progress and defined delivery timeframes.

[smartcode_project_cta:default project_id=134646]

WM Residences fills gap in Mordialloc townhouse market

&nbsp;

Developer GURNER™ Group has revealed $1.65 billion in residential sales nationally across the 12 months to December 2025, driven largely by the continued momentum of its Docklands wellness-focused precinct, Elysium Fields.

The sales result was generated across seven projects in Victoria and New South Wales, headlined by Elysium Fields, GURNER™’s $2.75 billion mixed-use precinct planned for Harbour Esplanade in Docklands.

The project has recorded more than $500 million in sales across the first three towers, equating to around 580 apartments sold.

The first tower, Helios, has now sold out of its 240 private residences, with GURNER™ preparing to release a premium penthouse collection comprising 15 three-bedroom penthouses in coming weeks.

[smartcode_project:default project_id=144441 project_image_fid=370975]

Elysium Fields is being developed on the long-held 20,000 sqm Docklands site at 208-226 Harbour Esplanade, which had remained undeveloped for more than two decades prior to GURNER™ taking over the project around four years ago.

Construction has now commenced across four towers ranging between 18 and 30 storeys, with Hamilton Marino and Maxcon appointed as builders.

Once complete, the precinct is expected to comprise around 1,100 residences, alongside retail, hospitality and public realm uses integrated throughout the site.

[smartcode_project:default project_id=144441 project_image_fid=370981]

Designed by Fraser &amp; Partners in collaboration with GURNER™ Design House, the project has been positioned around the developer’s broader focus on wellness-led residential living.

“We don’t sell apartments. We create a true luxury lifestyle that simply doesn’t exist elsewhere in the market today,” Founder and Executive Chairman Tim Gurner said.

“To deliver that requires an extraordinary level of detail, coordination and discipline across multiple verticals, from design and hospitality through to wellness and service.”

“We’ve always believed that living extends far beyond the physical residence. It’s about how you feel the moment you arrive, how you live day-to-day, and the ecosystem that supports that.” 
[smartcode_project:default project_id=144441 project_image_fid=370977]

The project’s design places a heavy focus on landscaping, wellness amenities and biophilic design principles.

Plans include around 3,700 sqm of landscaped gardens and open space throughout the precinct, alongside a retail and dining offering spanning approximately 5,000 sqm.

The broader public realm strategy centres around what GURNER™ describes as the “Path of Life”, an urban forest and landscaped pedestrian environment intended to connect the various buildings and wellness spaces across the precinct.

The apartments themselves will incorporate a range of wellness-focused inclusions, including purified air and water systems, circadian lighting, antimicrobial surfaces, and optional in-home wellness upgrades.

[smartcode_project:default project_id=144441 project_image_fid=370980]

Gurner said the company’s experience through its Saint Haven wellness clubs had directly informed the residential offering now being incorporated into Elysium Fields.

“We’re seeing a clear global shift toward longevity, performance and proactive health,” Gurner said.

“Our role is to deliver that in a way that feels seamless, highly private and beautifully resolved within the environments we create.”

A large component of the wellness offering is planned through the resident amenity and health facilities proposed within the precinct.

That includes plans for bathing and recovery facilities spread throughout the towers, incorporating mineral pools, saunas, steam rooms, flotation therapy, red light therapy and wellness lounges.

The developer is also seeking approvals for what it describes as a “reverse ageing medical clinic” within the precinct.

[smartcode_project:default project_id=144441 project_image_fid=370978]

According to project information released by the group, the proposed facility would include cryotherapy, IV infusion therapy, infrared and dry saunas, PEMF beds, MRIs, DEXA scans, brain scans and blood analysis services.

Within the first tower, Helios, residents will also have access to a dedicated amenity offering known as the Sky Private Club.

The upper 15 levels of the building will include private lounges, dining spaces, rooftop amenities and optional private wellness studios integrated within residences.

The Helios tower itself comprises 260 apartments ranging between 60 sqm and 300 sqm, including a collection of penthouses.

That includes a planned two-storey penthouse spanning around 600 sqm with uninterrupted bay views.

The Elysium Fields precinct is being delivered in partnership with Digital Harbour Holdings, a consortium that includes the Liberman family, which controls the development rights across the Docklands site.

[smartcode_project:default project_id=144441 project_image_fid=370979]

The sales result comes as GURNER™ continues expanding its national development pipeline beyond Victoria.

“We have a strong pipeline across Australia and are now focused on scaling into key markets including New South Wales and Queensland, while continuing to build on our Melbourne base,” Gurner said.

“We currently have more than $3 billion in the market, growing to over $5 billion by October, and expect to materially outperform last year in the 2026 calendar year.”

The result also reflects the continued strength of the upper-end apartment market in Melbourne, particularly for owner-occupier-focused product with large-scale amenity and lifestyle offerings.

[smartcode_project_cta:default project_id=144441]

Record result anchored by the Group’s “utopian” Elysium Fields precinct – defying market headwinds in Docklands.

Elysium Fields drive Gurner to $1.65 billion in apartment sales over 2025

National Australia Bank (NAB) will fund <a href="https://www.apartments.com.au/new-apartments/palmera-residences-gold-coast-18-garfield-terrace-surfers-paradise-qld-4217">Palmera</a>, a $1 billion, 52-level luxury residential tower being developed by Central Equity in one of the Gold Coast’s most tightly held coastal locations at Northcliffe.

The project, launched recently by <a href="https://www.apartments.com.au/developers/central-equity">Central Equity</a>, one of Victoria’s largest private residential developers, comes at a time when construction funding for large residential developments has become increasingly competitive as lenders tighten exposure to the sector.

Multiplex has been appointed the builder, and construction is now underway.

[smartcode_project:default project_id=108274 project_image_fid=365784]

Since its first project, Central Equity has delivered more than 85 residential developments with a combined end value exceeding $8 billion.

Palmera reflects Central Equity’s growing focus on the Gold Coast luxury apartment market and continues a relationship between Central Equity and NAB that dates back to the late 1980s, when the bank funded one of Melbourne’s earliest inner-city residential towers at a time when high-rise apartment living in the CBD was largely unproven.

“NAB’s funding of Central Equity’s $36 million CBD development in the late 1980’s to the financing of the billion-dollar tower today highlights the long-term relationship between the two organisations in delivering major residential projects” said Central Equity Founder and Chairman Eddie Kutner.

He said NAB’s early support was instrumental in helping establish the company’s development model.

“When we commenced our first residential tower in the late 1980s the concept of funding off-the-plan apartments was still largely untested in Australia,” Kutner said.

“NAB recognised the opportunity early and supported the project when others were uncertain. That relationship has now continued for more than 37 years across many developments.”

[smartcode_project:default project_id=108274 project_image_fid=365771]

Central Equity was established in 1987 when Melbourne’s CBD and Southbank precinct were still dominated by warehouses and commercial buildings. Fewer than 100 residents lived in Southbank at the time, and large-scale residential development in the inner city was not widely considered.

Recognising changing demographics and lifestyle preferences, the company began developing high-rise residential projects designed to bring permanent residents into the city centre.

Central Equity has provided accommodation for approximately 40,000 residents across Melbourne’s CBD and Southbank, while also incorporating supporting infrastructure including essential lifestyle facilities like retail spaces, childcare facilities and neighbourhood activity centres.

Central Equity has spent many years assembling the Palmera development site on the corner of Garfield Terrace and Frederick Street in Northcliffe, creating a supersite of around 3,300 sqm.

The developer said the Palmera apartment tower reflects its long-term view of the Gold Coast as a growing and increasingly diversified economy.

[smartcode_project:default project_id=108274 project_image_fid=365768]

Supported by infrastructure including the light rail network, major road upgrades expanded education, hospital and medical facilities and continued expansion at the Gold Coast Airport with more international and domestic flights.

Positioned in the tightly held Northcliffe precinct, the 52-level tower will deliver 347 apartments, targeting buyers seeking a high-end coastal lifestyle, from downsizers to interstate investors.

Designed by Marchese Partners with interiors by DBI, Palmera has been conceived as a next-generation residential offering, featuring a collection of oversized apartments, with premium three-bedroom residences offering sweeping northern views stretching from Surfers Paradise through to Burleigh Heads.

[smartcode_project_cta:default project_id=108274]

NAB funds $1 billion Surfers Paradise apartment development, Palmera

Two years after completing one of the newest developments in North Sydney, developer <a href="https://www.apartments.com.au/developers/aqualand-australia">Aqualand</a> is turning its attention to the rapidly evolving St Leonards apartment market.

The developer, which completed AURA by Aqualand on North Sydney's Walker Street, has lodged plans for a 5,918 sqm site at <a href="https://www.apartments.com.au/new-apartments/33-37-herbert-street-st-leonards-nsw-2065">33-37 Herbert Street, St Leonards,</a> seeking approval for a pair of residential towers rising above a shared podium opposite Royal North Shore Hospital.

The proposal forms part of the broader transformation underway across the St Leonards-Crows Nest precinct, where former industrial and commercial sites are increasingly being redeveloped into high-density mixed-use projects tied to major transport infrastructure.

<img alt="Aqualand" data-entity-type="file" data-entity-uuid="2cc428cf-fe70-4cac-9cd5-264ad53af62c" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%209.51.56%E2%80%AFAM.png?VersionId=otKSnHtbjAvAddOnovyXQMgcAwE6DMe1" />

According to the planning documents, the site sits “within the St Leonards–Crows Nest Strategic Centre, identified by the NSW Government as a key area for accommodating future jobs and housing across Sydney.”

The proposal has been designed by fjcstudio, formerly FJMT Studio, and is being progressed through the State Significant Development pathway due to its scale and affordable housing provision.

The scheme would comprise 413 apartments, including 46 affordable housing units, alongside retail and commercial uses fronting Herbert Street. The project would also include communal open space, landscaping, a swimming pool, gymnasium, children’s play areas and podium-level resident amenities.

Planning documents show the development would consist of a part-13, part-39 storey tower form positioned above a four-storey podium.

“The development comprises a unified podium that activates the street interface, and two setback towers to accommodate new housing supply while maintaining an appropriate human scale at ground level,” fjcstudio noted in its Design Report.

The northern and southern towers have been shaped to respond to the surrounding skyline while also limiting overshadowing impacts to nearby public open space, particularly Talus Reserve.

The design report said the differing tower heights were intended to “contribute to a varied skyline while responding to the surrounding built form context and solar access considerations.”

<img alt="Aqualand" data-entity-type="file" data-entity-uuid="36da62dc-ff9e-41f2-a7e3-7be38373751c" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%209.51.45%E2%80%AFAM_0.png?VersionId=Mo6Rp2r.XRLTzIfg_PEEpw8NepDH8UBs" />

The site sits directly opposite Royal North Shore Hospital and within walking distance of both St Leonards Station and the new Crows Nest Metro station.

While the site itself sits just outside the formal Crows Nest Transport Oriented Development boundary, the planning documents repeatedly reference its alignment with the broader TOD objectives reshaping the Lower North Shore.

“The site is located adjacent to St Leonards Station and in close proximity to Crows Nest Metro which is within the Crows Nest Transit Orientated Development Accelerated Precinct which has been identified by the NSW Government to support housing delivery,” the Design Verification Statement noted.

According to fjcstudio, the project has been designed to respond to the broader transition occurring across St Leonards, where increasing residential density is being concentrated around transport infrastructure and employment hubs.

“The broader precinct is undergoing significant change, with a mix of existing mid-rise buildings and newer high-density developments,” the report stated.

“Recent and approved projects indicate a consistent shift toward taller built form, typically organised as tower-and-podium typologies with more active ground levels.”

The proposal includes close to 6,000 sqm of retail and commercial space across the ground floor and podium levels, designed to create a more activated street edge along Herbert Street.

Aqualand’s plans would also introduce a landscaped podium shared between the two towers, with communal open space in the form of a podium rooftop designed to support resident interaction and improve urban greening outcomes. The scheme would also introduce pocket parks at the northern and southern ends of the site, including a landscaped area at the corner of Herbert and Ella streets designed to improve pedestrian amenity and soften the streetscape.

&nbsp;

The proposal is being progressed through the NSW Government’s Housing Delivery Authority pathway, which was introduced to accelerate housing supply across the state. The application was declared State Significant Development in April 2025 following an expression of interest process.

<img alt="Aqualand" data-entity-type="file" data-entity-uuid="faf6d97d-2671-454f-b85a-fe1c6a7be608" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%209.51.49%E2%80%AFAM.png?VersionId=diVd28OBVr5.YV.7prrOz.uAanwwwm7a" />

St Leonards has been particularly active with new developments in recent weeks. Developer SP Setia’s <a href="https://www.apartments.com.au/news/nsw/first-look-sp-setia-targets-st-leonards-skyline-with-40-storey-tod-tower">plans for a new 42-storey tower</a> recently went on exhibition through the same pathway, while <a href="https://www.apartments.com.au/news/nsw/first-look-stockland-plans-52-storey-538-apartment-st-leonards-tower">Stockland’s 52-storey tower proposal</a> was also recently unveiled.

Aside from the St Leonards project, which is expected to take around nine months to move through the approvals process ahead of a potential 2027 launch, Aqualand is also preparing to launch Boronia, a new apartment project in Roseville comprising around 111 apartments on Larkin Street.

The developer also has approvals in place for the next stage of the Barangaroo precinct, which will feature new residential, retail, hospitality and community uses, alongside a new metro entry across the five-hectare site.

More than 50 new retail destinations are planned for Central Barangaroo, alongside a 270-metre-long boulevard connecting Hickson Park to Nawi Cove. Together with Harbour Park, more than 50 per cent of the precinct will comprise public open space and parkland.

First look: Aqualand joins St Leonards apartment party

Terry Ryder

<html><body>
The most dramatic changes seen in real estate markets around Australia in recent years have been felt in towns and cities touched by the resources sector.
And the biggest source of distressed messages I receive from real estate consumers is from those who property in Gladstone, Moranbah and the Surat Basin towns in Queensland.
The greatest single influence has been a fundamental shift in how mining companies source their workforces, creating the modern phenomenon of fly-in-fly-out (FIFO) workers.
The reality of the mining industry these days is that the towns near the mines or the big processing plants don’t surge as they did in the past because most of the workers are living (and spending) elsewhere, flying in and staying at workers camps. In some cases, locals living a few kilometres from the mines are unable to get jobs there.
In Gladstone where three massive gas plants were built, the non-resident workforce peaked at 6,655 in 2014, of which 5,475 (82%) were living in camps on Curtis Island, where the plants were built. That meant few were buying or renting local dwellings. Vacancies remain high, around 8%, according to SQM Research figures.
Developers who built new dwellings in Gladstone were left disappointed – and property prices fell. The median prices for Gladstone suburbs like Clinton, Glen Eden, Tannum Sands and West Gladstone have all fallen at a rate of at least 8% per year over the past three years – remarkable given that $60 billion was invested in three projects in a regional centre of less than 70,000, creating many thousands of jobs.
Currently BHP Billiton has 270 jobs on offer at two mines near the boom-bust town of Moranbah in Central Queensland, but only 70 workers will be locals.
The other 200 will be sourced from centres like Townsville, with regular flights from there to Moranbah. The reality is that Townsville, 350 kilometres from the mines, will get more benefit from these projects than will the local town.
Practices like these have caused Moranbah’s median house price to fall from a peak of $750,000 to around $150,000 - with price decreases averaging 27% per year over the past three years. There has been a glimmer of improvement recently, with vacancies (which peaked around 10%) now below 5%, according to SQM Research, but it’s been an ugly three to four years to this point.
This is possibly the most extreme example of a boom-bust market in the history of the nation. The town’s property market was a victim of its own success: with very ordinary houses costing $750,000 to buy and $1,500 per week to rent, it’s not surprising that mining companies sought alternative ways to accommodate their workforces.
The whole issue of FIFO workforces has become very contentious, with local residents believing they now get few benefits but lots of problems when there’s a big mine with an accommodation camp just outside their town.
There are also the family issues to consider, with FIFO workers spending long periods away from their families, friends and home communities.
So now the Queensland government is trying to force changes. And like anything that involves change for reasons that appear worthy, there are all sorts of unforeseen consequences.
A Queensland parliamentary committee hearing is currently considering legislation that would ban companies from having a 100% FIFO workforce if the mine is close to a town where it could source workers.
Unsurprisingly, big mining companies like BHP Billiton are unhappy. The Courier-Mail declared in an article this week: “Taxpayers could be forced into paying a massive compensation bill to mining giant BHP Billiton over State Government plans to restrict fly-in, fly-out workforces.”
In a submission to the committee, BMA (a BHP joint venture company undertaking mining in Central Queensland) said there were concepts in the government’s planned legislation which “have the potential to result in absurd outcomes”.
“It also claimed it had been singled out by the government and specifically targeted by the legislation because of its Daunia and Caval Ridge mines, near Moranbah, which were 100% FIFO,” the newspaper report said.
The government’s goalis to ensure regional communities benefit from the operation of nearby mines, but the proposed laws have a retrospective element, meaning it affects projects that are already under way, not just the new ones.
BMA claims to have invested $200 million in the 2,000-room Buffel Park FIFO village near Moranbah, on the basis that it would be fully utilised for the 30-year life of the mine.
BMA asset president Rag Uddwas quoted as saying:“A subsequent change in Queensland’s law that erodes the value of this overall investment is deeply disturbing to our business. If the government proceeds with this Bill as it is currently drafted then we reserve the right to enter into discussions to achieve fair and reasonable compensation from the state.”
BMA said it would be happy to work with the laws if they applied to new projects but the current Bill is retrospective to 2009.
“Queensland Law Society also said the legislation was flawed, but councils have broadly endorsed its objectives,” the Courier-Mail reported. “The state government said it would await the parliamentary committee’s report, due in March.”
Something has to change, but the current situation it untenable for local communities and hugely disruptive to their property markets. Here’s what an SBS report on Moranbah and FIFO said:
The boom is now over, with fewer mining workers living in the town and the resulting cash flow drying up. One resident said, “You’re walking around the streets going, ‘why am I still here? There is no benefit in staying out here anymore’.”
Anne Baker, the Mayor of Isaac Regional Council, of which Moranbah is a part, laments the loss of people and economic activity from her towns. “We’ve currently got 27 operating coal mines and two of them are 100% forced FIFO and surrounding mines are adopting similar practices. It’s a significant change in how mining companies employ their workforce.”
A 100% FIFO mine requires that all workers must fly in from areas such as Cairns and Brisbane - not come from the local towns. This system prevents Moranbah residents from working in the mines, effectively inhibiting the ability of the employees to have a work-life balance.  
Residents claim that some go so far as to relocate to Brisbane or Cairns to keep their jobs, staying locked up in the camps overnight rather than with their families just a few kilometres away.
Tony Windsor, a former federal independent MP, also raised concerns on the impact of FIFO work.
“I think that’s a shocking indictment of policy in Australia. We should be encouraging people to move to these towns and promoting a sense of the community as a benefit,” he said. “To shuffle them back into the feedlots – our major cities – and just fly people in and out. That’s mining in two respects; mining a resource, but also mining people.”
And the additional fall-out from these mining practices is property markets that are seriously undermined and disrupted. Locations that should be booming are doing the opposite.
We await the outcome of Queensland’s proposed solutions to see if significant change can be achieved. In the meantime, it remains ugly for those who own real estate in these places.
Terry Ryder is the founder of <a href="https://www.hotspotting.com.au/">hotspotting.com.au</a>. You can  <a href="https://mailto:ryder@hotspotting.com.au">email him</a> or follow him on <a href="https://twitter.com/hotspotting">Twitter.</a>
</body></html>

terryryder-YECXbqmri2

Can Queensland save its mining towns with FIFO restrictions?

<html><body>
Vacancy rate figures are a leading example of how generalised data can be dangerously misleading for real estate consumers.
Research companies like to publish statistics which describe an entire city in a single figure. One might tell us that “Sydney house prices” have risen 8 percent in the past year, but what does that mean for a metropolitan area with over 700 suburbs and five million residents?
The overall vacancy rate for Melbourne is a healthy 2.1 percent, according to SQM Research, but does that make investment in the city generally safe? Behind that generalised figure lie myriad different situations, including some (like inner-city Southbank and suburban Doncaster) where vacancies are in the 5-6 percent range.
The Brisbane metropolitan area provides a sobering case study for this topic. The overall vacancy rate is 2.9 percent, which is within the accepted comfort zone.
But closer examination reveals some worrying information. The city’s generalised vacancy rate has risen from 2.6 percent a year ago to 2.8 percent in June and 2.9 percent in July.
But specific areas show much higher vacancies and it’s not just the inner-city apartment markets. The unit development frenzy has extended to the suburbs and some precincts have alarmingly high vacancy rates now.
The latest figures show the Brisbane CBD has a vacancy rate of 5.3 percent. Surrounding near-city markets including South Brisbane, Woolloongabba, Kangaroo Point and Fortitude Valley all have vacancies in the range from 4.1 to 5.8 percent.
With major projects under construction, many of these rates will get considerably worse before they get better.
But now suburban markets well beyond the inner-city high-rise precincts are joining this disturbing trend.
There is major new construction of units happening in many of the suburbs on Brisbane’s Northside, in the middle ring suburbs where houses have dominated in the past. Thousands of new apartments received council approval in the financial year just ended. 
The suburbs most impacted are Albion, Chermside, Everton Park, Kedron, Gordon Park, Wooloowin and Lutwyche. 
The Albion postcode now has a vacancy rate above 9 percent. The postcode covering Kelvin Grove, where major urban renewal projects have been targeted, has a vacancy rate above 5 percent.
The postcode covering Lutwyche and Windsor is at 4.4 percent, while Herston is 4.8 percent. 
Chermside’s vacancy rate is currently reported as 3.7 percent but is trending upwards and is likely to go much higher as there is widespread new development in this area. 
There was recent publicity for this area, based on a research report that Chermside would become a property hotspot because of projected population growth. This was based on recent residential building approvals. Property marketers weighed in, suggesting this was a good place to buy.
There’s no doubt that the Chermside precinct has many good qualities – well-established residential areas supported by major infrastructure, facilities and jobs nodes. It’s part of a precinct that I wrote about favourably a few years ago, when Brisbane Northside generally was leading price growth in metropolitan Brisbane.
But those days have passed. The momentum has shifted to other parts of the Brisbane market and, in the meantime, developers have dived en masse into the Northside market. 
All those positive qualities– population growth, good transport links, employment growth and great services and amenities – can be overpowered and rendered meaningless by one simple factor: oversupply. 
Brisbane’s overall vacancy rate of 2.9 percent does not alert us to the reality that places like Chermside have much higher vacancies, which are rising steadily and set to become worse.
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>
</body></html>

Brisbane unit development frenzy hits the suburbs: Terry Ryder

<html><body>
What is it about Sydney people that makes them so sensitive to interest rates when no one else in Australia is?
If we can believe popular analysis, interest rates cuts are like steroids to Sydney residents. They get all pumped up by them and charge around lifting things that were financially too heavy for them previously.
But the 81% of Australians who live outside Greater Sydney are immune. They’re exposed to the same stimulus but it has no visible effect on them. Curious modern phenomenon.
Anyone with a keen eye for observation and an inquiring mind – the qualities that journalists used to have, back in the day – might wonder why Canberra people, for example, have such a strong immunity to the rates steroid.
It certainly made me wonder, so I checked to make sure they have the same interest rates in the national capital as they have three hours up the road in the NSW capital. And, sure enough, they do.
And guess what else? They have the same interest rates in Melbourne, Brisbane, Perth, Darwin, Adelaide and Hobart as well. 
I had assumed rates must be much higher in all those places because, according to the latest figures from cor blimey RP Data, apartment prices are falling in Perth, Darwin, Hobart and Canberra – and have barely moved in Melbourne, Brisbane and Adelaide, whereas they’re up 10% in Sydney.
Here are some of the headlines since the RBA interest rates decision last week:
<ul>
<li>Rate cut adds to Sydney buying frenzy</li>
<li>Rate cut dangerous for property market</li>
<li>Rate cut could destabilize property market</li>
<li>RBA rate cut will put pressure on property market</li>
</ul>
Some of the reaction to the interest rate reduction bordered on the ludicrous. We had a slightly hysterical president of the Real Estate Institute of NSW, Malcolm Gunning, claiming the rate cut meant young people would be forced to leave Sydney. Sam White from Loan Market said the rate cut would make the market unsustainable and unaffordable.
We even had Adelaide pundits claiming the rates decisions would fire up the local property market. Why all those previous rate cuts had failed to achieve that was not explained. 
We’ve had almost four years of falling interest rates and none of those previous cuts have generated a boom in Adelaide – or anywhere else in capital city Australia, apart from Sydney - but this latest reduction is going to “fire up” the market, apparently.
So where did this notion that interest rates were the prime factor in residential real estate dynamics originate? Yes, you guessed it – it’s the love child of our under-class of chattering economists.
Watching an economist discuss real estate is like listening to a close friend of mine discuss rugby. She understands that a ball is involved but she’s never sure whether it’s round or oval - or whether you need to kick it over the bar or under it. She is sure about one thing, though - that it doesn’t make a lot of sense and far too many people are obsessed with it.
I recently spoke to a boardroom luncheon in Sydney, attended by 12 or 15 people with “economist” somewhere in their titles and all from big name companies and institutions. What they collectively knew about residential property could be written on the back of a postage stamp in crayon. In the minds of most of them, there’s a national property boom and it’s caused by low interest rates.
They’re the masters of the universe and they know close to nothing.
There’s another thought about this whole obsession with interest rates and the belief they are central to movements in property markets. Investors who are fundamentally driven by interest rate cuts are not thinking clearly. The current level of interest rates is largely irrelevant to sensible decision-making about property investment.
Anyone who borrows now to invest will face dozens of interest rate changes over the life of their loan. The current level of rates is not a core consideration. The core question for investors should be: if rates at some point rise 2 or 3 percentage points above their current levels, can I still afford the repayments?
If you’re charging around like the steroid-induced herd animals in Sydney, you’ve missed that fundamental point.
TERRY RYDER is the founder of <a href="https://www.hotspotting.com.au/">hotspotting.com.au</a>. You can <a href="https://mailto:ryder@hotspotting.com.au">email him</a> or follow him on <a href="https://twitter.com/hotspotting">Twitter</a>.
</body></html>

Sensitive Sydneysiders reel at rates: Terry Ryder

<html><body>
The developer lobby, better at promoting self-interest than anyone else in society, would have us believe that building more homes will make homes cheaper.
Developers themselves believe that building more houses will make themselves more profitable – particularly if government gives them their wish list of things to make their lives easier - and what happens after that … well, who cares?
The truth is: the only way to make homes significant cheaper is to build far too many of them. Over-supply is the one thing that can crash a market. 
All of the areas I call the No Go Zones are places undermined by over-supply. Investors far too often fall victim to such places because supply is the factor most over-looked by property investors.
Those who take the time to do some research before tossing a few hundred thousand at an investment property tend to focus on demand, with scant regard for the flipside of the growth equation.
Some organisations that purport to advise investors preach a simplistic follow-the-population-growth strategy.
If high population growth was the core element in a good locational choice, the leading capital growth performers in the past five years would have been the Gold Coast and Wyndham City in the south-west of Melbourne. Gladstone, boosted by the influx of tens of thousands of gas project employees, would have soaring prices.
The opposite is true in those markets, which have all suffered recent periods of marked decline. The too-often forgotten factor is supply.
The Gold Coast had five years of falling property values because of too much supply. Wyndham City, which overtook the Gold Coast as the municipality with the greatest annual additions to its population, recorded no growth in prices for three years, because of an excess of house-and-land packages – ultimately flogged off to distant investors by dodgy marketing companies.
Gladstone, after recording high growth in rentals and prices in 2011 and 2012, saw rising vacancies and a sharp downturn in prices and rents after 2012 because developers went overboard yet again.
Over-supply causes rents to fall and that drags down property values.
The developers building the new projects don’t care as long as they can sell their product to someone and move on to the next project. In over-supplied markets, they tend to target distant investors unfamiliar with local conditions. The Chinese are the victims of choice these days.
There are two “danger situations” at the core of the No Go Zones issue: (1) inner-city apartment markets; and (2) regional centres where a rise in supply (through new development) has coincided with a decline in demand (through downsizing in the resources sector).
Inner-city units present a significant danger throughout capital city Australia. Boom-bust scenarios are common. As Hegney Property Group chairman Gavin Hegney says: “Apartments are always in over-supply or under-supply because of the lumpy nature of the market. With a housing estate you can release allotments in stages but you can’t do that with an apartment tower.”
Another problem is the long lead time in creating high-rise unit buildings. Multiple developers will decide simultaneously to build towers in a strong market – two or three years later when they are completed, a lot may have changed.
This is a clear and present danger for Australian buyers. Developers don’t care who buys their units as long as someone does, nor are they concerned if their buyers later find themselves unable to tenant their units or are forced to sell at a loss.
But it is a concern for the market and for real estate consumers.
Given that Melbourne, Brisbane, Perth, Canberra and Darwin already have – or are heading towards - surpluses of inner-city apartments, and Sydney and the Gold Coast are trending in that direction, a good strategy for property investors is to simply avoid CBD unit markets altogether. There are much better (and cheaper) places to buy.
The coal and iron ore industries are the cause of the other core “danger situation”. When the resources boom was at its strongest, mining expansion created strong property markets in towns and regional centres that felt the positive impacts.
This prompted developers to initiate new projects to exploit the demand. Sadly, this coincided in a downturn in the coal sector, with commodity prices declining at a time of rising costs for mining companies. The iron ore industry has had similar problems.
Rising supply coincided with falling demand – a recipe for decline in property markets. The result has been sharply rising vacancy rates, leading to lower rents and ultimately falling prices.
Another factor is the growing use of fly-in-fly-out workers accommodated in workers camps, rather than renting in the local property market. 
This has been a big factor in the Surat Basin region of Queensland, where developers built a lot of new dwellings in anticipation of strong rental demand – but more than 90% of resources workers have been 
TERRY RYDER is the founder of <a href="https://www.hotspotting.com.au">hotspotting.com.au</a>. You can <a href="https://mailto:ryder@hotspotting.com.au">email him</a> or follow him on <a href="https://twitter.com/hotspotting">Twitter</a>.
</body></html>

Danger at the core of property investment 'No Go Zones': Terry Ryder 

<html><body>
Greenvale is a mining town 220 kilometres north-west of Townsville. Or it used to be. Once it had a population of 3,000. Today it barely exists.
In its heyday, in the 1970s and 1980s, Greenvale was a boom town, with a rail link to a processing plant at Townsville. The rail tracks have disappeared and so has most of the town, which now has an estimated population of 150.
A few years ago I met a man who owned dozens of rental properties in Greenvale. His strategy was to make a killing by dominating the market. The only thing he killed was his financial future once the nickel mine closed down (in 1993).
Investors have tried similar strategies in other mining towns, like Moranbah in central Queensland. The objective was to dictate terms in a boom market by owning lots of properties. With the median price having dropped from $750,000 to $250,000 in two years, and rents by a similar measure, you’d have to say the plan failed.
The most important word in property investment, I tend to think, is diversity. In two important ways: geographical diversity in a property portfolio and diversity in the economies in which you own real estate.
The people who tried to corner the market in a single location violated both diversity principles: they had all their eggs in a single basket and the economies they targeted turned into basket cases, because they were single-industry economies. They targeted mining towns. Greed trumped wisdom.
This was a core topic at a workshop last night on the Sunshine Coast, where I was guest speaker. The workshop organised by Julie Schafer-Evans of ES&amp;A Financial Services had lots of that important word: diversity. There were experts from the fields of accountancy, banking, investment advisory and property management.
A recurring theme in the discussions, both formal and informal, was the wisdom or otherwise of owning investment properties close to home base. Some people with multiple properties owned all or most of them in a single area, not far from headquarters. They were people who have a hands-on (rather than passive) approach to property investment and some of them have built impressive portfolios that way.
But I’d be nervous owning everything in a single region. If you owned five properties and they were all in Perth, you’d be feeling a little sick right now because that market (generally speaking) appears to be in reverse.
If you lived in the Hunter region near Newcastle and built your portfolio by buying locally, you would have struggled to find or retain tenants amid a serious over-supply over the past couple of years (although recovery is now happening and that region has a future).
If you’d built a portfolio on an inner-city Melbourne strategy, you would be nervously watching the cranes on the horizon as the mother of all gluts is built by developers intent on ripping off Asian investors and to hell with the wider consequences.
There are many reasons to be geographically diverse. The price growth numbers for the eight capital cities provide a clue to one reason. Sydney is booming (although nowhere near the heights of 2001-2003), some cities are doing okay, others are marking time and some are going backwards. A geographically diverse portfolio means you avoid the problems of owning everything in the under-performing places.
Owning the lot in one state also has land tax consequences.
The argument I heard last night against diversity of location is difficulties in the buying process and in the management process. They tend to be people who feel the need to physically inspect properties before buying and who have a proactive, hands-on attitude to management. Different strokes for different folks, but I’d rather be diversified.
Economic diversity is equally important. Smart investors don’t buy in locations where a single industry dominates the local economy, obvious examples being mining towns and coastal towns or cities where tourism is the bread-winner.
The most successful investors I know have large portfolios of properties spread across Australia – and none of them in one-trick pony locations.
TERRY RYDER is the founder of <a href="https://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://www.twitter.com/hotspotting" target="_blank">Twitter</a>. 
</body></html>

Diversity is the most important word in property investment: Terry Ryder

<html><body>
If someone with an aura of credibility told you city prices were growing at 2.4 times the rate of regional prices, you’d concentrate on capital cities for investment. Right?
Sure you would, particularly if you wanted to join the 75% of investors who have a bad experience in property investment. Absolutely you would, if you were among the vast majority of investors who are driven by the herd mentality and buy in the wrong places. Certainly you would, if you’re destined to be among the 73% of investors who never get beyond owning one property.
Through email, phone, webinars and face-to-face at workshops and seminars, I have a lot of contact with Australian investors. And most of them make their buying decisions based on impressions generated by media sound bytes. Very few do any genuine, independent research.
The information about capital city house prices versus regional prices is a timely case study in the media-created misinformation that causes people to make bad choices.
Here’s what it says: Capital city house prices are growing twice as fast as regional prices.  In NSW, the median metropolitan house price rose 13.4% in the past 12 months, while the median country house price rose 5.6% to $385,000. In Victoria’s median metropolitan house price increased 6.6% to $550,000, while the median country house price rose 2.5% to $200,000. In South Australian prices grew 5.1% to $426,000 in the city and 1.8% to $290,000 in the country. And so on, through the other states and territories. And this is what media reported, publishing the press release without any analysis or interpretation or alternative viewpoint.
I know, with great certainty based on decades of experience, that one day quite soon someone will send me an email or approach me after a seminar presentation and quote those figures as the reason they’ve decided to stick with big city investing.
The only useful thing this “research” shows us is that buying in the regions has appeal because it’s so much cheaper than capital cities. We know from other research that regional centres have much higher rental yields than the major cities (generally speaking – you need to delve deeper for specific data). The only area where reassurance is needed is capital growth prospects.
The published figures don’t tell us anything useful on that subject, because they portray results for one 12 month period (meaningless information to a switched-on investor) and because they are generalised figures which conceal the best performers in property.
I know from the regular analysis we do at Hotspotting that the best locations for long-term capital growth rates are in the regions. The top 10 locations for the best growth averages over 10 years are all regional centres. Some of them are resources-related centres, still leading the nation despite the decline in the past couple of years.
(I’m definitely not advocating investment in mining towns – just making the observation that some of the best long-term growth rates in the nation have been mining towns, most of which are no longer performing on price growth or rental returns).
A friend recently asked me for some figures about Adelaide to make a point to a colleague of his, who believed upmarket Unley would have a much better capital growth rate than outer suburbs, because it was close to the CBD. This encapsulates one of real estate’s most enduring myths.
I came up with a long list of middle ring and outer ring suburbs with much better capital growth rates than Unley - which, at 5%, has a modest growth average.
But I also confirmed that the best growth rates in South Australia were even further from the CBD. They were way out in the vast regions of that state, where numerous distant regional centres have capital growth rates above 8% per year, well in excess of those in the capital city. They include Ceduna, Coober Pedy, Port Augusta and the best performer in South Australia, Whyalla.
But if you took an average or median across all of regional South Australia, you would come up with a low figure, because there are plenty to depressed regional towns to drag down the generalised figure.
You could wallpaper a McMansion with all the articles written about Sydney’s boom, but you need to go outside the capital to find the best recent growth in NSW. In the City of Gosford, 10 suburbs have recorded median price growth above 15% in the past 12 months, including some above 20%. There has been exceptional growth, also, in locations in the Blue Mountains and around Wollongong.
In Queensland, where the Brisbane market is gradually rising, you need to head 1,700 kilometres north of the Brisbane CBD to find the state’s best growth of the past 12 months. Several suburbs of Cairns have recorded median price growth above 20%.
Other regional markets that have been out-performing Brisbane include the Sunshine Coast and Toowoomba. But an average figure across all regional cities and towns would be low, dragged down by the many resources-related centres which are currently in decline.
The generalised data spewed forth by the publicity-hungry research houses often deceives, because there’s no depth to the numbers and no analysis or oversight.
To be successful, investors need to dig beneath the shallow media numbers to find the best places to buy. Sadly, few do so and end up making decisions based on misinformation.
TERRY RYDER is the founder of <a href="https://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://www.twitter.com/hotspotting" target="_blank">Twitter</a>. 
</body></html>

Investors need to dig beneath the shallow media numbers to find the best places to buy: Terry Ryder

<html><body>
National Australia Bank has created a pretty good research document with its quarterly Residential Property Survey. It’s shed light on a number of important things, notably the true position with the level of first home buyer activity in Australia (much higher than the flawed ABS data indicates).
Unfortunately, and here’s this recurring problem that blights real estate analysis in this country, it has allowed economists to get involved in interpreting the data. Unsurprisingly, the outcome is a shemozzle.
NAB senior economist Robert De Iure – who really should stick to what economists do best, which is getting it wrong on the economy and interest rates – apparently thinks that because some foreign investors buy in similar price ranges to local first home buyers, the two groups are competing in the same space.
“The report contradicts the idea that foreign investors and first home buyers shop in different markets,” he says. Actually, it doesn’t – he misunderstands his own report.
His thought process goes like this: because most foreign buyers aren’t paying over $1 million, they are therefore out there competing with first home buyers. He must be spending a lot of time in Sydney.
For the most part, foreign investors are not competing with local first timers, and the NAB survey doesn’t show that they are.
Here’s what it does show: 70% of foreign investors buy property priced above half a million dollars. Instantly, that tells us most foreign buyers are not competing in the same space as first-time buyers.
The NAB survey also shows that foreign investors predominantly buy new homes, such as highrise inner city apartments. Foreign investors account for almost 16% of new dwelling sales in Australia.
Other research shows that, overwhelmingly, Australian first home buyers purchase existing homes.
Again, the two groups are not operating in the same space.
The NAB figures indicate that only 30% of foreign investors are buying houses. Most of them are concentrating on buying apartments and on development sites to build apartments.
So they’re buying predominantly new properties (as they are supposed to be, under the rules) and they are buying mostly apartments. In other words, they’re investing in inner city highrise apartments off the plan – unsurprisingly, given that so many developers are targeting their new highrise projects specifically on Asian investors.
Clearly this is not where the bulk of Australian first home buyers are operating.
That’s what NAB’s own survey shows, but the chattering economists have come up with the kind of kindergarten analysis in which they specialise when it comes to residential real estate.
Stick to your knitting, boys. We’re all desperate to hear your next inaccurate tip about interest rates.
Elsewhere, the NAB Residential Property Index shows a rise in real estate sentiment in the March quarter, with a score of +21 points, up from +12 in the December quarter and well above the long-term average of +14.
It indicates that overall sentiment is strongest in NSW (read Sydney), followed by Victoria and Queensland. It has also improved in South Australia, but remains negative in Western Australia (not surprising, given that the REIWA is working so hard to talk down the Perth market).
Looking ahead over the next one to two years, the greatest optimism is in Queensland and Victoria. Indeed, the report predicts that Brisbane will lead the capital cities on price growth in 2016, with Adelaide number one. Both are tipped to growth 5-6% on average next year, while growth in Sydney and Melbourne is expected to have subsided.
Keep in mind that this is speculation and expectation, not fact, and often the outcome is different. I say this because mainstream media often reports economists’ forecasts as if they’re handed down from on high in tablets of stone.
The latest NAB report also confirms what the previous edition found, that around 25% of residential sales are to first-time buyers, of which 15% of owner-occupiers and 10% are investors. In other words, a significant proportion of first-time buyers are opting to buy an investment property as a first purchase.
And they’re managing to do it unimpeded by competition from foreign investors.
TERRY RYDER is the founder of <a href="https://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://www.twitter.com/hotspotting" target="_blank">Twitter</a>. 
</body></html>

For the most part, foreign investors are not competing with local first timers: Terry Ryder

<html><body>
AMP’s chief economist Shane Oliver says “Australian property prices are over-valued” and that “rising house prices” are making Australian households vulnerable. Should we be concerned? Should we be listening at all?
I’d suggest a resounding 'No' is an appropriate response.
Oliver’s analysis is so shallow it borders on embarrassing. It relies in part on a discredited report that no one in real estate takes seriously. But above all else, the man’s track record in reading real estate issues is among the worst in the nation.
In his position with AMP, Oliver has been getting it wrong consistently for the past dozen years.
How about this offering: Australian real estate has a “classic real estate bubble” and first-home buyers are being priced out of the market, notably in Sydney.
When did Oliver say this, predicting a bursting bubble and the disappearance of first-home buyers? It was way back in 2003. Since then, over half a million first home buyers have bought homes in New South Wales, most of them in Sydney. And despite three years of extraordinary growth from 2001 through 2003, there was no collapse in prices when the boom ran out of puff.
How about this one: House prices are at least 25% over-valued and may not start to rise again for another decade. It will take 10 years for rents and wages to catch up with house prices and there will be no rise in the housing market until they do so.
This pronouncement was made in 2005. A decade has passed and in that time capital city house prices have risen in eight out of those 10 years (based on the ABS House Price Indexes).
In fact, in 2006, the year after Oliver predicted prices would not rise for another decade, they rose 8.3% - and then 12.3% the following year. How could someone in such a senior position misunderstand the situation to such a degree?
Then in June 2012 he wrote about Australia’s “chronically weak house prices” and suggested we were facing either a crash or a long-term flat trend, caused by “excessive house prices and the excessive level of household debt”.  He said: “The bad news is Australian housing is still way over-valued”.
So what happened?  The following year, in 2013, capital city house prices rose 9.3% on average and then another 6.8% in 2014 (although most of that growth was generated by Sydney’s solo boom).
How does he keep misreading the real estate market so drastically? And why does media keep publishing his views?
The problem Oliver has, and he shares this problem with most of Australia’s underclass of chattering economists, is that he tries to squeeze real estate into his economic models. It’s an interesting study of someone trying to jam a square peg into a round hole, and if the hole doesn’t fit, there’s something seriously wrong with the peg.
Oliver latest pontification on real estate prices – comparing where they are with where he thinks they should be - is based in part on an alleged median multiple. Median multiples are the kindergarten of property price models.
I say “alleged” median multiple because Oliver has based his assessment on the Demographia report – which is a propaganda piece from a developer lobby group, designed to find that all of Australia is unaffordable because we over-regulate property developers.
His argument is based on the notion that Australia has a problem with rising house prices, when the latest figures depict six of the eight capital cities with prices stagnating or going backwards.
There’s also the contention that we’re all vulnerable because house prices are rising “well above trend”. But take Sydney out of the equation and the scenario looks very different.
We’re entitled to expect better from a national figure who lectures on real estate issues.
TERRY RYDER is the founder of <a href="https://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://www.twitter.com/hotspotting" target="_blank">Twitter</a>. 
</body></html>

Why the economists keep misreading the real estate market: Terry Ryder

<html><body>
Domain Group rather missed the point with its media release on the latest figures for capital city rents.
The headline it chose to give it, “Rents remain at record highs despite increased supply”, should have been “Rents refuse to rise despite alleged chronic housing shortage”.
The headline that accompanied rental figures from CoreLogic RP Data, “Significant slowdown in rental growth set to continue”, was much closer to the mark.
Meanwhile, Louis Christopher of SQM Research also released figures on rents, noting that asking rents have fallen in several of the capital cities.
Domain Group, in seeking to pander to media’s obsession with the notion of a real estate boom, missed the obvious point that the two other sources noticed: capital city rents continue to stagnate and haven’t delivered meaningful growth for years.
Examining 16 rental markets (eight capital cities, each with a house market and a unit market), <a href="/expert-insights/buying/darwin-rents-in-decline-with-hobart-the-strongest-performer-domain-group">Domain Group data shows that median asking rents have fallen</a> in five markets in the past year. Five others have recorded no change. Three others recorded annual growth around 2%.
That means 13 of the 16 capital city rental markets are dormant or declining. The only city with good rental growth in Hobart (up 6.5% for houses and 12% for units, apparently), while the median asking rent for Sydney houses is up 4%.
SQM Research records falling asking rents in Perth, Canberra and in particular Darwin, which has dropped 13.7% for houses and 4.7% for units for the past 12 months. It says that Adelaide, Hobart and Sydney have recorded modest rises for the same period.
 “Overall, national rental growth is now below annual CPI,” Christopher says.
“The national rental market continues to slow. It is coming up in our vacancy series and in our asking rents, which are now rising at a slower rate than general inflation. With the east coast market still being driven upwards, largely by investor demand, it does make me wonder if investors are aware that it is increasingly a tenants’ market out there.”
CoreLogic RP Data tends to agree with that assessment. Its latest report says: “Rental growth across most of Australia’s capital cities remains sluggish.”
It records overall rental rates in the capital cities during March that were just 1.2% higher than the year before. Similar to the other sources, it reports big declines in rents in Perth and Darwin. It also finds the largest increases in Hobart.
And it says Sydney (up 2%) and Melbourne (up 1,4%) were the only two capital cities to record rental growth increases in unit markets, though both were minor rises.
Research analyst Cameron Kusher says it’s no surprise unit growth is tracking lower than houses, given the high level of investor activity in capital city unit markets.
The key point is this: the latest rental figures are merely a continuation of a pattern that has spanned years.
A year ago, in April 2014, <a href="/expert-insights/if-the-markets-so-hot-then-wheres-the-rental-growth">I wrote on Property Observer</a>: “Can anyone explain the absence of rental growth in our major markets? Are we not suffering from a housing shortage crisis, with an accumulated under-supply of hundreds of thousands of dwellings?
“Can the economists who speak constantly of this dwelling shortage explain how three of our eight capital cities recorded declines in house rentals in the March Quarter, while four others recorded no growth?”
You have to go back to 2012 and early 2013, when both Perth and Darwin had good rental growth driven by the (then) still-booming resources sector, to find increases in city rentals. But even then, there was little or no rental growth outside the mining-pumped cities.
Kusher says: “With new housing supply increasing and investor purchasing at record highs, we have seen a significant slowdown in the rate of rental growth over the past couple of years and we expect this trend to continue over the coming year.”
Therein lies the key point. In contrast to the developer’s lobby relentless party line about a “chronic housing shortage crisis”, the reality is that supply has increased markedly in recent years and the lack of rental growth in the major cities confirms there is no shortage overall.
Note also that Sydney is the only capital city delivering significant price growth.
TERRY RYDER is the founder of <a href="https://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://www.twitter.com/hotspotting" target="_blank">Twitter</a>. 
</body></html>

Domain Group misses the obvious point with rents: Terry Ryder

<html><body>
Right now I’m having amnesia and déjà vu at the same time, to quote American comedian Stephen Wright.
The déjà vu arises from a new round of people declaring “the end of the property boom”. The amnesia is my difficulty in remembering how many times this has happened in the past two years.
Yes, in the past week there has been another chorus of pundits with limelight deficit syndrome shouting that the boom is over.
Here’s the first problem. How do you end something that never started? As I have commented often, there is no property boom in Australia. Growing numbers of commentators are now (belatedly) acknowledging this, including Reserve Bank Governor Glenn Stevens - and even including the occasional economist who takes the time to look beyond the statistic that describes the average annual rise in capital city prices.
Here’s the second problem. The end to the boom that never was has been announced repeatedly since 2013.
As a reference, I need to go back to the column I wrote on Property Observer in October 2014.
At that time I wrote: “They’re declaring the ‘property boom’ over, yet again. And, yet again, it’s based on a single figure for a single month from a single source, published in haste.
“This is the fourth time (or is it the fifth?) the so-called boom has been pronounced dead within the past 12 months. This week I’ve observed radio news bulletins, online news services and newspapers making the claim, or otherwise placing great significance of this isolated statistic.
“The alleged growth in Australian house prices in September was small, therefore it’s all over, red rover.”
At that time, I referred back to an event in June 2014, when data was published indicating a decline in capital city prices in May. “People rushed to be first to declare the end of the property boom.  They generated lots of headlines for themselves – which evidently was the only objective – but they got it horribly wrong.”
And I noted this: “The organisation which made the biggest play for profile in June was an obscure valuation practice. We won’t publish its name to protect the guilty. Early in June the firm issued a press release which sought to ensure everyone knew that it had been the first to declare that the market had peaked and the boom was over.”
But, prices continued to rise in Sydney and, to a lesser extent, Melbourne.
Okay, so this time there’s a slight difference. This time, those declaring the end of the boom that never was are not relying on a single month’s figures – they’re basing their declaration on a single quarter’s figures.
But the outcome is equally ridiculous.
Here’s what one magazine published under the headline “End near for housing boom” a few days ago: “Property price growth has started to look very modest throughout Australia, with the notable exception of Sydney. New CoreLogic RP Data statistics reveal that the median price in Australia’s eight capital cities grew by an average of 3.1% in the 12 months to 31 March 2015. However, the average growth rate was only 1.5% once Sydney was excluded.”
The absurd thing about this? It’s always been thus. Over the past 2-3 years, property price growth has been “very modest throughout Australia, with the notable exception of Sydney”. There’s nothing new in the new figures. Since the start of the mythical boom, we have had the situation of Sydney pumping up the national figures, creating the impression of an elevated market for those who don’t delve too deeply. 
This is what happens when media publishes press releases without journalistic scrutiny from someone expert in residential property. The great seething mass of misinformation grows ever larger.
 
TERRY RYDER is the founder of <a href="https://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://www.twitter.com/hotspotting" target="_blank">Twitter</a>. 
</body></html>

Terry Ryder

Editor's Picks

Have something to contribute?

Developments

New apartments

New townhouses

News

Terry Ryder

Editor's Picks

Receive the latest news stories to your inbox

Have something to contribute?

Developments

New apartments

New townhouses

News