Repeat buyers are one of the strongest measures of confidence in any apartment development.

At <a href="https://www.apartments.com.au/new-apartments/era-newcastle-west-124-126-bull-street-newcastle-west-nsw-2302">ERA</a> in Newcastle West, some purchasers are returning to <a href="https://www.apartments.com.au/developers/gwh">GWH</a> after living at the developer's One Apartments. Their decision to purchase again was driven by the quality of life they found after moving into their first GWH home.

Keith Wilton had spent years living in a house in East Maitland before deciding it was time for a change. Apartment living had always been on his radar, but he was selective about what he wanted.

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"I had some boxes I wanted to tick," he says.

Keith points to the open-plan design, generous outdoor areas and considered inclusions as key reasons One Apartments worked for him.

“One of those things was a nice indoor open plan area, but also I wanted a nice outdoor open area that I could entertain on in summer or Christmases or birthdays,” he says.

He also found value in the smaller details, from integrated appliances to shared resident spaces including the pool, cinema and rooftop areas.

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After comparing several developments, he chose One Apartments because of GWH's longstanding local reputation and his own experience working with the developer on a commercial project more than a decade earlier.

"I knew that they were local, that the quality of the build was going to be up there. I'd looked at other apartment complexes around and close by, and I just knew that here was a better decision location wise."

Today, Keith says the move has completely changed how he experiences Newcastle.

"I enjoy living in this location because it's more of a lifestyle change. That Newcastle city living where you can walk to restaurants and bars and even beaches and parks and even shopping across the road."

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Beyond the location, he says it's the sense of community that has surprised him most.

"Everyone loves living here because they chose to live here, but everyone looks out for each other. It's a real great community feel here."

For Aimee and Lyle Goodman, the journey started almost by chance.

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The couple happened to be having coffee in Newcastle when they noticed the site where One Apartments was about to begin construction.

"We were aware GWH was planning a development," Aimee says. "We made one phone call and things moved pretty quickly after that."

As busy business owners, they initially thought apartment living would simply reduce the maintenance that came with larger homes. Instead, it fundamentally changed how they spent time together.

"We actually catch up more as a family now," Aimee says.

"We've had homes with big yards and lots of space, but everyone ended up in different rooms. Here we'll have dinner together, the kids can play, and we spend far more quality time together."

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Lyle says their confidence came from GWH's reputation within Newcastle's building industry.

"I know people who've worked across different apartment projects, and whenever GWH came up the feedback was always the same. They're rock solid. They're quality."

That confidence only grew throughout the buying process.

"One of the things that really impressed us with GWH was the whole process, was the communication," Lyle says. "It was consistent, it was regular, there was no problem if we had some weird questions, there was no problems in getting answers."

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Aimee says one moment stood out.

"The project actually finished on time. We realised we needed to hurry up and sell our house because everything was happening exactly when they said it would."

The positive experience at One Apartments ultimately gave all three buyers the confidence to purchase again with GWH, this time at ERA.

Their confidence reflects what many buyers are seeking in today's apartment market. Location remains important, but so too does certainty around delivery, quality and long-term liveability.

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ERA builds on those foundations with 280 one, two and three-bedroom apartments across two landmark towers in <a href="https://www.apartments.com.au/developments/newcastle-west-nsw-2302">Newcastle West</a>.&nbsp;

Designed by <a href="https://www.apartments.com.au/architects/fk-australia">Fender Katsalidis</a>, the project will include more than 2,000 square metres of resident amenities, including a resort-style pool, gym, sauna, private cinema and rooftop entertaining spaces overlooking the harbour and coastline.&nbsp;

The development is also within walking distance of the Newcastle Interchange, Honeysuckle, Darby Street, the harbour foreshore, restaurants, retail and the city’s beaches, continuing the walkable lifestyle that existing GWH buyers say has transformed how they live.

[smartcode_project:default project_id=135096 project_image_fid=356826]

For Keith, the appeal remains straightforward.

"You feel at home even before you've moved into your home."

For Aimee, the change is measured in time.

“I just felt like I had more time,” she says.

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Construction at ERA is now underway, with more than half of the residences already sold and limited two and three-bedroom apartments remaining in the East Tower release. Priced from $980,000 for two-bedroom residences and $1.46 million for three-bedroom residences, buyers can secure an apartment with a 10 per cent deposit, with premium homes offering ocean views from Level 8 and harbour views from Level 10.

ERA is also backed by Resilience Insurance's 10-year Latent Defects Insurance policy, providing protection against structural or waterproofing defects for 10 years after completion. The project is anticipated to be completed in early 2028.

[smartcode_project_cta:default project_id=135096]

Joel Robinson

From ONE to ERA: Why buyers are choosing GWH again in Newcastle West

Virgate Property Group is preparing to commence construction of Verdé, its new apartment development in Melbourne's Arts Precinct at Southbank, following a strong run of sales that has seen more than half of the project's 173 apartments secured.

Verdé has attracted a broad mix of first home buyers, owner-occupiers upgrading from nearby inner-city suburbs and investors, with younger owner-occupier couples aged between 28 and 45 accounting for the strongest enquiry. Many are already living in Southbank, South Melbourne, Albert Park, Port Melbourne, South Yarra and the CBD.

"Verdé is located in one of the most desirable pockets of southern Melbourne," Blair Property Group Director Darren Blair, who is managing sales at Verdé, said.

"It's within walking distance of the Arts Centre, Royal Botanic Gardens, Albert Park Lake, and Southbank's restaurants and retail. It's a great lifestyle location with strong amenity and liveability, which made it a very attractive choice for the project."

[smartcode_project:default project_id=4661 project_image_fid=372549]

Virgate was already familiar with the precinct, having previously delivered the successful Domain House development in neighbouring South Melbourne. That experience gave the developer confidence to acquire the Coventry Street site and continue expanding its presence in Melbourne's inner south.

"We had been keeping an eye on the site and the broader precinct for a few months before deciding to move forward with the acquisition," Virgate said.

The project was ultimately secured in 2020 following feasibility studies, planning assessments and due diligence, with the brief centred on delivering "a high-quality, considered design that feels both refined and fit for purpose."

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Designed by <a href="https://www.apartments.com.au/architects/bruce-henderson-architects">Bruce Henderson Architects</a>, Verdé comprises 173 one, two and three-bedroom apartments priced from $599,000. The architecture is distinguished by a faceted glass façade that responds to both the site's outlook and Melbourne's changing light conditions.

According to Bruce Henderson Architects, the coloured glazing gives the building a distinctive identity while also providing privacy and solar shading, with residences oriented to capture views across the bay, city skyline and surrounding parklands.

Inside, <a href="https://www.apartments.com.au/interior-designers/designoffice">DesignOffice</a> has created interiors focused on natural light, efficient planning and enduring materials. Apartments feature engineered oak flooring, natural stone benchtops, floor-to-ceiling glazing and SMEG appliances, while a restrained material palette aims to complement the expansive outlooks rather than compete with them.

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Resident amenity has also been designed around everyday functionality rather than occasional use. Facilities include a concierge-serviced lobby, residents' lounge with fireplace, library and co-working space, gym, terrace garden with barbecue facilities, ground-floor café, and package delivery management.

The project's location continues to be one of its strongest drawcards. Positioned on Coventry Street, Verdé sits within walking distance of the National Gallery of Victoria, Arts Centre Melbourne, Royal Botanic Gardens and Albert Park Lake, while Southbank's dining precinct, Sturt Street trams and the new ANZAC Station are all nearby. The surrounding education catchment also includes Melbourne Grammar, Melbourne Girls Grammar, Mac.Robertson Girls' High School and several major university campuses.

The sales team says buyers have responded particularly well to the combination of location, design quality and long-term liveability.

"They're responding really positively to the quality of the design, premium resident amenities and the uninterrupted views. Many also appreciate the location and how connected it is to everything they need."

The ability to secure stamp duty savings before completion has also been a key factor for purchasers, alongside the opportunity to personalise finishes ahead of settlement.

With construction set to commence soon and more than half the apartments already sold, Verdé enters its next phase as one of the Arts Precinct's more established apartment developments, offering remaining buyers an opportunity to secure a residence before construction advances further. Expected completion is scheduled for late 2027.

[smartcode_project_cta:default project_id=4661]

Virgate's Verdé Southbank moves toward construction as sales fly past halfway stage

Downsizer-focused apartment development Kooyongkoot in Hawthorn has been recognised at the 2026 Better Future Melbourne Design Awards, taking home Gold and Silver awards in two categories.

<a href="https://www.apartments.com.au/new-apartments/kooyongkoot-hawthorn-1-kooyongkoot-road-hawthorn-vic-3122">Kooyongkoot</a>, currently being delivered by developer PQD and designed by Cera Stribley, received Gold in the Interior Design – Proposed category and Silver in the Architecture – Proposed category.

The dual recognition reflects the design approach behind the boutique development on prestigious Kooyongkoot Road, where the focus has been on creating homes for downsizers seeking the space, quality and functionality of a detached house within a low-rise apartment building.

Rather than maximising apartment numbers, <a href="https://www.apartments.com.au/developers/pqd">PQD</a> and <a href="https://www.apartments.com.au/architects/cera-stribley-architects">Cera Stribley</a> limited the development to just 18 residences, allowing for larger floorplans, greater privacy, generous landscaping and expansive communal spaces.&nbsp;The majority of the apartments also benefit from corner aspects, allowing for dual sources of natural light.

Now around 70 per cent complete and on track for completion in November 2026, Kooyongkoot will comprise a mix of garden residences, ter​race apartments, sub-penthouses, and is crowned by two half-floor penthouses with direct lift access and private rooftop terraces.

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The Silver Award for Architecture recognised the way the building responds to its prominent corner position at the ent​rance to Hawthorn's Scotch Hill precinct, one of Melbourne's most established residential neighbourhoods.

Rather than competing with the grand homes that line Kooyongkoot Road, the architectural approach focused on restraint and longevity, using curved brickwork, generous landscaping and carefully considered proportions to integrate with the existing streetscape.

"The form feels fluid and timeless, as though shaped by the landscape itself – architecture that belongs, rather than competes," said Chris Stribley, Co-Founder and Managing Principal of Cera Stribley.

The judging submission also highlighted practical innovations throughout the building, including lift cores servicing only nine homes each, a central landscaped lightcourt designed to bring daylight and ventilation into the building, and fully enclosed private storage rooms with lighting, power and shelving to better accommodate residents transitioning from larger family homes.

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The Gold Award for Interior Design recognised the project's focus on long-term liveability rather than display-home aesthetics.

According to the awards submission, the interiors were designed from the inside out, prioritising how homes would function over decades of daily use through generous proportions, practical storage, durable natural materials and flexible layouts.

The specification includes natural stone throughout, upgraded acoustic glazing, V-ZUG appliances and fully enclosed storage rooms, alongside an amenity offering focused on wellness, entertainment and everyday convenience.&nbsp;

Residents will have access to a gym and yoga studio, a wellness centre featuring traditional and infrared saunas, a cold therapy shower and treatment room, as well as a residents' lounge and golf simulator/cinema room for entertainment.&nbsp;Kooyongkoot has also considered the everyday convenience of its residents by offering a private carwash and pet wash facilities on site as well as dedicated parcel lockers and oversized fully enclosed storage rooms.&nbsp;

[smartcode_project:default project_id=102717 project_image_fid=355303]

The project's attention to detail has already resonated with buyers. Earlier this year, Kooyongkoot recorded one of Boroondara's highest apartment sales when an $8 million penthouse was purchased by a Melbourne CEO downsizing from a nearby family home.

"Every detail feels deliberate, from the overall design down to the smallest touches," the purchaser said.

"The level of quality and refinement is exceptional, but what really sold it was how liveable it felt... It felt like a place where everything had been considered, not just a luxury building."

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Sustainability also formed a key part of both award submissions. Kooyongkoot is targeting a minimum 7.5-star NatHERS rating across all residences, supported by passive design principles, high-performance glazing, EV charging infrastructure, water reuse systems and a wellness model focused on lower-energy dry facilities rather than pools and large wet areas.

Located within walking distance of Scotch College, Methodist Ladies' College, Koo​yong Lawn Tennis Club, Aubur​n Village and Camberwell Junction, Kooyongkoot continues to target owner-occupiers looking to remain in Melbourne's inner east without compromising on space or quality. A limited selection of two, three and four-bedroom residences remains available, with prices starting from $1.9 million.

[smartcode_project_cta:default project_id=102717]

Kooyongkoot wins Gold and Silver at Better Future Melbourne Design Awards

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

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

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

Terry Ryder

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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>
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terryryder-YECXbqmri2

Can Queensland save its mining towns with FIFO restrictions?

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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>
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Brisbane unit development frenzy hits the suburbs: Terry Ryder

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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>.
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Sensitive Sydneysiders reel at rates: Terry Ryder

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

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

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

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

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

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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>. 
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Domain Group misses the obvious point with rents: Terry Ryder

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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>. 
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Terry Ryder

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