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.

[smartcode_project:default project_id=135096 project_image_fid=356818]

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."

[smartcode_project:default project_id=135096 project_image_fid=356828]

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."

[smartcode_project:default project_id=135096 project_image_fid=356829]

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."

[smartcode_project:default project_id=135096 project_image_fid=351104]

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.

[smartcode_project:default project_id=135096 project_image_fid=356822]

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.

[smartcode_project:default project_id=135096 project_image_fid=351102]

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."

[smartcode_project:default project_id=4661 project_image_fid=314259]

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.

[smartcode_project:default project_id=4661 project_image_fid=372550]

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.

[smartcode_project:default project_id=102717 project_image_fid=355297]

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.

[smartcode_project:default project_id=102717 project_image_fid=355293]

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."

[smartcode_project:default project_id=102717 project_image_fid=355304]

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.

[smartcode_project:default project_id=5743 project_image_fid=372394]

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."

[smartcode_project:default project_id=5743 project_image_fid=953]

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.

[smartcode_project:default project_id=5743 project_image_fid=925]

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."

[smartcode_project:default project_id=5743 project_image_fid=5374]

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."

[smartcode_project_cta:default project_id=5743]

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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One of many things that will be different in real estate in 2018 is that we’ll be talking a more about Adelaide.
I see the South Australian capital as the most under-rated of the capital city markets, largely because of the popular perception that South Australia lacks economic muscle and population oomph.
But something is building in SA that will change its image and cause investors to pay greater attention.
There are many clues to bigger and better things brewing. The first of them was the elevation of SA in the latest edition of CommSec’s State of the States report, in which it was promoted from No.6 to No.4 in the economic rankings.
South Australia scored well on business investment, employment and dwelling construction.
The latest Business SA-Statewide Super survey of business expectations showed confidence and business conditions are on the rise (but with lingering concerns about the future direction of the state economy).
The latest ABS jobless data showed the SA unemployment rate steady at 5.8 percent in seasonally-adjusted terms (a little above the national average of 5.4 percent) but with the trend data showing the SA jobless rate dropping 0.2 to 5.6 percent - which was the lowest in five years.
So the current indicators look a little more positive. But the big game-changing events are yet to come.
We’ve seen the beginnings of the impact from the biggest of them, the $89 billion program of building vessels for the Navy, which will be focused primarily on Adelaide.
The first step is a $535 million infrastructure build at Adelaide’s naval shipyard and reports indicate this means 600 jobs, for which hiring is under way. Lendlease has been selected as the managing contractor for the Osborne South Shipyard construction.
This infrastructure is expected to be ready for the $35 billion project to build nine frigates, starting in 2020. But the total project is considerably bigger than that.
A PwC study has forecast the overall $89 billion naval shipbuilding program, headlined by the $50 billion project to build 12 new submarines, will create 8,000 jobs in South Australia over 40 years and deliver a $134 billion boost to Gross State Product.
Another big impact will come from revival in the resources sector. SA is a significant resources state, though much less in the headlines than Western Australian and Queensland.
BHP has indicated it plans to spend over $3 billion expanding its Olympic Dam mine. It recently announced an immediate $US800 million injection to “stabilise” Olympic Dam over the next few years, to be followed in 2020 by a $US2.1 billion “brownfields expansion” that would double the mine’s output.
There’s plenty more action in the SA mining sector, including the decision by OZ Minerals to invest $900 million in the Carrapateena project and CU River announcing an $800 million expansion of its Cairn Hill mine, creating 1,300 jobs.
Energy production is potentially a massive industry in SA, with a dozen projects worth around $5 billion targeted on the Port Augusta area, many of them solar and wind developments.
Last week the (allegedly) world’s largest lithium-ion battery was officially turned on at Jamestown by Premier Jay Weatherill, who said: “South Australia is now leading the world in dispatchable renewable energy, delivered to homes and businesses 24/7.”
Not so sure that SA is leading the world, but it certainly presents as a national leader is this field.
By coming in ahead of schedule, Tesla tech billionaire Elon Musk fulfilled his promise to build the 100-megawatt facility in 100 days or provide it free. The battery is paired to the neighbouring Hornsdale Wind Farm, owned by French company Neoen.
Infrastructure spending has a big influence on the health of real estate markets - and the infrastructure spend in Adelaide is mounting, with a significant ongoing investment in improving road and rail links across the metropolitan area.
Recent announcements include funding totalling $659 million for facilities at the RAAF Base Edinburgh in Adelaide’s north to support the anti-submarine and surveillance plane, the P-8A Poseidon. These facilities are targeted for completion by early 2019.
A recent report listed extensive private sector investment in South Australia, which included a number of firms making Adelaide their headquarters.
Strike Energy has committed to relocate its headquarters from Sydney to Adelaide; French company Dassault Systemes has decided to establish its Australian head office in Adelaide; and Indian renewable energy company Enzen Global Solutions is opening its Australian head office in Adelaide.”
In addition, cyber security firm VeroGuard Systems says it will begin manufacturing in Adelaide in 2018, producing cards and software to enable hyper-secure online transactions. The company’s $57.5 million investment is expected to create 596 jobs in the first three years.
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terryryder-YECXbqmri2

We'll be talking more about Adelaide in 2018

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A nation like Australia should be able to have a sensible, rational, balanced debate on issues like housing affordability – but it seems we cannot because we have the media from hell. 
Mainstream media has been having a feeding frenzy recently over two documents about negative gearing and its impact on affordability – one a leaked report from Federal Treasury and the other a half-finished research paper by Melbourne University economists. 
Both apparently claim that scrapping negative gearing tax benefits would have only a minor impact on home values but at the same time would bring about a major improvement in housing affordability. 
There’s been lots of commentary on the significance of these documents, especially with regard to Federal Government policy, but I have not seen any media reports from writers who have challenged the documents. 
Their findings, apparently, are deemed to be factual and beyond scrutiny. 
The worst contribution to this endless and seemingly fruitless debate about affordability, its causes and its solutions, has come from the Melbourne University research paper. 
My first question about this is: why would the authors publish research that is not yet finished? It is, according to the authors, “preliminary and incomplete”. One of them says that when the research modelling is complete, the results may change, particularly the forecast size of the lift in home ownership. 
Given the sad record of this discussion being blighted by claims, counter-claims, pet theories and silver bullet solutions, why would academics who want to be taken seriously publish something that just adds to the quagmire of confusion because it’s still a work in progress. 
This paper makes some pretty big claims. Three-quarters of households would be better off, home ownership would surge and rents would rise but renters would be somehow better off. 
These are big statements. But they’re not justified or substantiated in any of the reports I’ve read. 
To try to understand why the authors think the suggested policy changes would have the big impacts they claim, I studied reports from six sources, including The Australian, the Financial Review, The Age and The Guardian. 
I’m still waiting for an explanation of the claimed outcomes. And I’m still waiting to come across a journalist who challenged the authors of the report on a number of matters, including their credentials, their motivations, their methodology and their assumptions. 
I’d love to see the mathematics that’s led them to their preliminary and incomplete conclusions. 
Here’s a core question they should be asked: how can you claim that the suggested policy would cause a 30% reduction in rental property supply, and therefore an increase in rents, but also claim that renters everywhere would be better off? 
From my study of media reports, it seems the authors are assuming that a 30% reduction in supply would cause a rental rise of only 2.4 percent – and that the Federal Government would financially compensate tenants for the higher rents that would result. 
Those are massive assumptions. No one in Australian media has challenged them. 
If they’re wrong and there’s no government compensation for higher rents, which would cost billions of dollars according to the report, tenants will be disadvantaged by having higher weekly occupancy costs, which would make it harder to save a deposit to get into home ownership. 
That whole argument falls apart if a future government offers no compensation. 
And keep in mind that other research tells us that last year, without any taxation policy changes to limit the supply of rental properties, house rents rose 7 percent in Canberra, 9 percent in Hobart and 5 percent in Melbourne. 
But, according to the Melbourne University boffins, eliminating one-third of the supply of rental properties would cause rents to change barely at all. 
It’s worth remembering that significantly higher rents resulted when a Labor Government scrapped negative gearing in the 1980s and then had to re-instate it a short time later because of the unforeseen adverse impacts. 
The university paper claims that property values would fall only 1.2 percent but somehow this insignificant decline in house prices would generate a massive rise in home ownership – from 66.7 percent to 72.2 percent. 
How have they come up with these very precise but unexplained estimates? 
They claim 30 percent of rental properties would be freed up and bought by Australians who would otherwise have rented. So we’re asked to accept that a 1.2% drop in prices would turn those who can’t afford to buy into people who now can do so. 
That’s another massive assumption that no one has challenged. 
Think about it. The Asking Price Index for Sydney houses sits at $1,356,500, according to SQM Research. A 1.2 percent reduction in prices would bring that down to $1,340,222. Apparently $1.356 million is unaffordable but $1.34 million is affordable to heaps of people. 
But those are Sydney prices. Let’s look at a city that’s a little less extreme, like Brisbane. The Asking Price Index for the Queensland capital sits around $614,000 and a 1.2 percent reduction would bring it down to about $607,000. 
The report authors want us to believe that this small change will cause a “surge” in home ownership rates in Brisbane. 
In a parallel universe, maybe, but not in the real world. 
There are other aspects of this paper that ought to be challenged – and would be if journalism played a part in the reporting of the housing industry. 
The claim that only the “rich” benefit from negative gearing is outrageous - and patently false, according to ATO data. 
There’s no explanation in any report I’ve read for the claim that 76 percent of households would be better off under the suggested policy change. We’re told only that the authors used “an economic model”. 
Surely Australia as a nation can do better than this. But while we’re saddled with such mediocre media and clueless politicians, we’re doomed to having this festering issue drone on for years to come. 
Terry Ryder is the founder of hotspotting.com.au ryder@hotspotting.com.au 
twitter.com/hotspotting
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Melbourne University negative gearing study needs to be challenged over its methodology and assumptions: Terry Ryder

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EXPERT OBSERVER
Investors will be piling into the Adelaide market – just as soon as they read somewhere that there’s a boom in the South Australia capital.
But not before. The only constant in the residential property market is that the herd mentality drives the actions of buyers and sellers. 
Adelaide right now is a strong value-for-money proposition, with one of the steadiest and most consistent markets in capital city Australia, underpinned by an economy that the experts have recognised as one of the nation’s best.
But investors generally refuse to consider it. Adelaide flies under the radar screen, with many people clinging to the outdated notion that Adelaide and SA is a low-growth sort of place.
But the experts know better. Here’s a snapshot of what some have said recently:
“South Australia’s economy was the standout of all states and territories in the last three months of 2018, with strong house prices and positive employment momentum boding well for the future.” – ANZ Stateometer report
"Residential property capital values in South Australia had their fastest rise for six years in the last financial year." - SA Property Landscape report from Land Services SA
"Business confidence in SA is now at levels not seen in more than 10 years." - Business SA-William Buck Survey of Business Expectations
"South Australia remains home to the most confident property sector in the country,  buoyed by tax cuts and positive economic announcements. It is the fourth consecutive quarter that confidence in the state's property industry has topped the country." - ANZ / Property Council Survey's Statewide Index
"All the economic indicators are suggesting that Adelaide is going to experience a very buoyant 2019." - Broadway Property director Ben Heritage
"Price Growth Reaches 6 Year High in Sleeper State" - Smart Property Investment magazine
"Adelaide Median House Value Soars To Record High, Defying Downturn In Other Capital Cities." - The Advertiser
"Adelaide Housing Market Forecast To See Steady Growth." - Moody Analytics
"The two key measures of the SA economy - how much production in the state and  how much spending in the state - are both accelerating." - Chris Richardson, Deloitte Access Economics
"Elon Musk’s Tesla is aiming to more than double its battery rollouts during 2019, saying its huge Hornsdale battery in SA has become an important calling card that's attracting bigger projects." - The Australian
"Technicolor's Move To Adelaide Will Generate 400 Jobs and Boost CBD Living and Lifestyle." - The Advertiser
Against that background of economic and property performance, Adelaide is one of Australia’s most consistent markets, a status it has maintained over the past 12 months. It remains the busiest market in capital city Australia and one that is forecast by several analysts to be a national leader on price growth in 2019 and beyond.
SA, dominated by Adelaide, has impressed with its steady performance in the past five years. Each of the past 20 quarters has recorded between 8,000 and 9,500 dwelling sales. Adelaide continues to record high numbers of suburbs with growing sales demand, well above the levels seen in most of the capital cities.
This has produced multiple years of steady price growth, without generating a price boom – yet.
While sources such as CoreLogic and SQM Research report annual growth of only a few percent in Adelaide house prices overall, these generalised figures disguise individual areas which have done better.
It’s noteworthy that many of the millionaire suburbs have recorded big growth in their median prices in past 12 months. Uplift in the premium market is often an early signal of a market upcycle.
The growth is not all confined to the top end: there are suburbs with growth above 10% spread across all price ranges. This reinforces the reality that out-performing areas can be found even when the overall market appears to be moderate.
Adelaide has a broad geographical spread of LGAs with good numbers of growth markets. There are seven municipalities which have five or more suburbs with rising sales trajectories leading to price growth. This means there is growth momentum across the metropolitan area.
The leading precinct, with 12 growth suburbs (which makes it a nation-leading market), is Port Adelaide Enfield - which is likely to attract growing interest as the massive project to build Navy vessels unfolds.
The Marion LGA, a middle-market area in the south-west of Adelaide, has been a market leader for the past 12-18 months and continues to be.
A new challenger in Adelaide is the West Torrens LGA, which is situated between the CBD and the beaches – and offers wonderful value for money, relative to its location. Most suburbs have median house prices in the $500000s.
Another contender is the Tea Tree Gully LGA, which offers a good location relative to major jobs nodes and the Adelaide CBD, good local infrastructure and a high level of housing affordability. 
Terry Ryder is the founder of hotspotting.com.au
<a href="https://mailto:ryder@hotspotting.com.au">ryder@hotspotting.com.au</a>
twitter.com/hotspotting
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Adelaide flies under the radar as one of our strongest capital city property markets: Hotspotting's Terry Ryder

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EXPERT OBSERVER
The vast majority of NSW Regional markets have price levels higher than 12 months ago – 85% of the locations in our latest survey have recorded growth in the past year.
Hotspotting has surveyed 303 significant markets across the state outside of Sydney (we exclude small markets with fewer than 30 sales in a year, as small sales samples provided distorted medians and unreliable figures on growth or decline). 
Of these, 171 (56%) have recorded median price growth above 5% and a further 88 (29%) have had growth between 1% and 5%.
The 171 locations with growth above 5% included 78 places which had double-digit price growth in the past 12 months.
It provides quite a stark contrast to the trends in Sydney.
Our survey reveals only 11 Regional NSW locations where prices have dropped by more than 5% and another 33 where prices have fallen marginally (between 1% and 5%).
The regional growth has been led by 14 markets with growth of 20% or more: 
<ul class="ul1">
<li class="li1">Ballina units (up 21%), </li>
<li class="li1">Berry houses (up 36%), </li>
<li class="li1">Broken Hill houses (up 21%), </li>
<li class="li1">Casino units (up 31%), </li>
<li class="li1">Casuarina houses (up 20%), </li>
<li class="li1">Crestwood houses (up 25%),</li>
<li class="li1">Moruya houses (up 23%), </li>
<li class="li1">Sawtell units (up 21%), </li>
<li class="li1">Catalina houses (up 20%), </li>
<li class="li1">Shelly Beach houses (up 29%), </li>
<li class="li1">Wangi Wangi houses (up 40%), </li>
<li class="li1">Uranga houses (up 21%), </li>
<li class="li1">Tura Beach units (up 26%), and </li>
<li class="li1">Taree units (up 20%).</li>
</ul>
The Newcastle region (above) continues to be strong on price growth. The LGAs of Newcastle, Lake Macquarie and Port Stephens all have multiple suburbs with solid to strong median price growth in the past year.
Lake Macquarie markets with rising prices include Belmont, Belmont North, Cardiff, Cardiff South, Caves Beach, Edgeworth, Macquarie Hills, Speers Point, Swansea, Wangi Wangi and Warners Bay.
Other precincts with significant numbers of locations with solid-to-strong price growth include the Central Coast, the Tweed region, Byron Bay and Ballina.
In terms of locations with rising demand, as measured by quarterly sales activity, this Autumn 2019 survey has found 61 Regional NSW locations with markets trending upwards, up from 53 in the Summer 2019 survey but down on the 70 rising markets identified in the Spring 2018 analysis.
There are new growth leaders revealed in this survey: the Lake Macquarie LGA beside Newcastle has six rising markets while the Wagga Wagga LGA has five.
As we have recorded in previous reports, the Hunter Region is a growth market – the LGAs of Maitland, Cessnock, Singleton, Muswellbrook and Upper Hunter (Scone) all present markets where buyer demand is trending higher.
Other centres where markets are busy include the municipalities of Queanbeyan-Palerang, Albury, Ballina, Bathurst, Tamworth and Armidale. Smaller centres with momentum include Parkes, Kyogle, Kempsey, Mudgee, Griffith, Glen Innes, Forbes, Cootamundra , Young and Broken Hill.
A number of major markets that were previously leaders in Regional NSW are now showing signs of having passed their peaks in terms of sales demand, although several of these continue to deliver good price growth.
The Central Coast still has a small number of growth suburbs, but a much greater number of plateau markets – and now there are four we have classified as declining markets. 
This market is perhaps more influenced by Sydney than most in the Regional NSW and the level of sales activity has declined recently – although some locations still have price levels well above those of a year ago, including Shelly Beach (29%), Ettalong Beach (17%), Halekulani (11%), Saratoga (11%) and Wamberal (13%).
Newcastle still has four suburbs classified as rising markets, but many more than are plateau or consistency markets. There are similar trends with Wollongong, Shoalhaven, Shellharbour, the Southern Highlands and the Blue Mountains – notably, most of them places quite close to Sydney.
While our survey found only 11 Regional NSW markets with median prices down more than 5% in the past year, five of them were in the Wollongong LGA, providing further evidence that this previously strong market is now past its peak.
Terry Ryder is the founder of hotspotting.com.au
<a href="https://mailto:ryder@hotspotting.com.au">ryder@hotspotting.com.au</a>
twitter.com/hotspotting
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Regional New South Wales continues to see property price growth: Hotspotting's Terry Ryder

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EXPERT OBSERVER
While media obsesses over big city markets where prices are falling, the nation’s hottest markets keep flying under the radar screens of all but the best-informed investors.
I’ve written a lot about Regional Victoria, which I regard as the nation’s strongest market, in terms of both busy sales activity and big price increases, as well as affordable prices and good rental yields.
Most property watchers will be aware of the strength of markets like Geelong, Ballarat and Bendigo, but new contenders keep popping up, many of them locations most people would know little about – or have never heard of.
During my most recent Live Q &amp; A on social media, someone asked what I thought about the market in Warburton (pictured top). I had to admit I knew little about the town. But something is happening in Warburton, up in the Yarra Ranges 70km east of central Melbourne. Its median price has risen 17% in the past year to reach $485,000.
Locations with those kind of growth numbers are the norm, not the exception, in Regional Victoria right now. And new ones keep emerging, replacing the early movers as market leaders.
This is because some of the state’s regional markets have passed their peaks. Geelong, for example, has been one of the nation’s most prolific markets in the past two years, but sales activity is no longer growing. It now has more plateau markets than rising ones. 
Other regions where demand has passed its peak (but price growth remains high) include the LGAs of Cardinia (Pakenham, Officer, Bunyip and Emerald), Baw Baw (Warragul, Drouin and Trafalgar), Surf Coast (Anglesea, Apollo Bay and Torquay), Bass Coast (Cowes, Inverloch and Wonthaggi) and Macedon Ranges (Gisborne, Kyneton, Romsey and Woodend).
But new growth markets continue to occur across Victoria. 
At Portland in the far south-west of the state, quarterly sales have been trending steadily upwards for the past two years. With a median house price of $235,000, affordability is a strong attraction, as well as the seaside lifestyle and the noted fishing resource.
Also in the south-west, there’s rising activity in Warrnambool, with median prices up 7% in Koroit and 5% in Warrnambool, while in nearby Port Fairy the median house price has risen 26% to $630,000.
In the Central Goldfields, quarterly sales in Maryborough have increased from 48 to 55 to 71 in the past year and its median house price has grown 18% to $230,000.
In the far east of the state, numerous locations have rising demand, including Bairnsdale and Lakes Entrance. The median price in Lakes Entrance has grown 13% to $325,000 in the past year, while Metung is up 7% to $375,000.
Other Regional Victoria markets with growing signs of uplift include Bright (up 17% to $575,000), Shepparton (up 5% to $275,000), Wangaratta (up 14% to $315,000) and Wodonga (up 3% to $350,000).
Another location that blipped on our radar screen recently, thanks to a client inquiry, is the town of Benalla, where the median house price has increased 10% in the past 12 months, but remains attractively cheap at $275,000. One of the big local drivers is a business which has won a major contract with Melbourne’s West Gate Tunnel project, creating 400 local jobs.
And then there’s Echuca. After watching this market chug along steadily for years, I’ve been forced to include it in the new edition of Top 5 Regional Victoria Hotspots - because, well, it can no longer be ignored.
Echuca is one of those strong regional centres which form the backbone of the nation in industries like agriculture, tourism and manufacturing – and while many people have heard of it, few have ever been there.
Hotspotting has often featured Echuca in The Price Predictor Index on the National Top 50 list of most consistent markets, as measured by quarterly sales volumes. Indeed, in one of our 2017 editions of the quarterly report, we named it the nation’s most consistent market.
And it keeps on keeping on, driven by a strong and diversified local economy, and steady growth. In the past 12 months, its median house price has lifted 16% to $365,000.
Terry Ryder is the founder of hotspotting.com.au
<a href="https://mailto:ryder@hotspotting.com.au">ryder@hotspotting.com.au</a>
twitter.com/hotspotting
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Real estate hotspots continue to emerge in regional Victoria: Hotspotting's Terry Ryder

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The Perth market is an example of how misleading – and indeed worthless – are the price figures published by research firms and mindlessly recycled by media.
According to most of the generalised data (one figure to describe an entire large city), Perth prices are down – but an in-depth analysis shows there are growth markets sprouting across the Perth metro area.
Domain, the ABS, SQM Research and realestate.com.au report that Perth houses prices, in annual terms, are down by between 2.2% and 3.6%. CoreLogic, always the odd one out with more negative numbers, says Perth is down 7.6%.
But our suburb-by-suburb analysis shows that those generalised figures tell us nothing that’s useful. Against a background where most of the market data depicts recovery, 40% of Perth suburbs have median prices higher than a year ago.
Overall, the Perth market is the strongest it’s been since it lapsed into downturn five years ago (in general alignment with events in the resources sector). Vacancies are down (from 4.1% a year ago to 2.9% now, according to SQM), rents are rising again (according to most sources, including rent.com.au, SQM and the REIWA) and sales activity is up (there are more suburbs with rising buyer demand than at any time in the past five years). 
Recovery is under way – and this is starting to deliver price growth in some markets.
Our suburb-by-suburb analysis of 216 Perth markets shows that 85 have median prices higher than a year ago (58 have risen by less than 5% and 27 have risen 5% or more) and 131 suburbs have medians still lower than a year ago (72 are down by less than 5% and 59 have dropped 5% or more).
That means 40% of Perth suburbs have rising prices and 60% still have prices down.
Many of the locations with price growth are upmarket areas. Growth suburbs with median house prices above $1 million include Claremont (up 18%), Ardross (up 5%), East Fremantle (7%), Floreat (5%)_, Mosman Park (8%), South Perth (5%), Subiaco (7%) and West Leederville (10%). But the standout market is Mount Pleasant, where the median has risen 26% to $1.27 million in the past year.
Beyond the millionaire suburbs, growth markets include Brabham (up 21% to $395,000), Kensington (up 19% to $895,000) and West Perth (up 16% to $750,000).
There are also a number of suburbs which have recorded double-digit declines in their median prices. They are spread across the metropolitan area and the various price ranges, but a standout struggle market is the Kwinana LGA in the south, a noted affordable area for young buyers. Sales activity is down, against the general rising trend in Perth, in several Kwinana suburbs - and median prices are down in Bertram (7%), Leda (11%), Medina (6%), Orelia (17%) and Parmelia (10%). Most of these suburbs now have medians in the low-to-mid $200,000s, making it the cheapest precinct in the Perth market.
Overall, however, the data on prices across Perth is the most positive it has been in five years.
The outlook is even more optimistic when we examine sales activity. The number of suburbs with upwardly-mobile markets (53) is a record for Perth since we began our quarterly sales surveys four years ago.
The trend continues to be led by standout LGAs like Joondalup, Melville, Stirling and Wanneroo, with the Canning LGA emerging recently as a new growth contender.
Terry Ryder is the founder of hotspotting.com.au
<a href="https://mailto:ryder@hotspotting.com.au" target="_blank">ryder@hotspotting.com.au</a>
twitter.com/hotspotting
 
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Where the Perth property market is on the rise: Terry Ryder

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EXPERT OBSERVER
The number of growth markets in Regional Queensland is rising, helped by recovery in resources-related regional centres. Mackay is now the most upwardly-mobile market, having overtaken the softening Sunshine Coast market, and Gladstone is now showing signs of recovery, with some of its suburbs rising.
Regional Queensland markets collectively have improved in the past year or so: in the past five quarterly surveys of sales activity by Hotspotting, the number of locations with growing demand has increased from 30 to 36 to 40 to 45 to 48. 
The number of growth markets had decreased sharply in the late 2017 survey but showed steady improvement in 2018 and this has continued into 2019. 
The other key feature is the number of Regional Queensland markets with price growth. We analysed price movements in 313 markets and found 203 (65%) have median prices higher than a year ago. Of the 203 growth markets, 99 have recorded median price growth of 5% or more, while another 104 markets have increased by less than 5%.
Of the higher growth markets, 42 have increased by more than 10%, including 15 which have grown 20% or more. Some of the highest annual growth in median prices has been recorded in mining towns Emerald (up 24%), Clermont (up 33%) and Dysart (24%), but these are rising from a low base after several years of downturn.
A number of unit markets have recorded high growth in the median prices, including Noosa Heads (31%) and Peregian Springs (23%) on the Sunshine Coast; Airlie Beach (26%) in the Whitsundays; Bilinga (26%), Broadbeach Waters (27%) and Coolangatta (25%) on the Gold Coast; and East Toowoomba (29%) in the inland regional city of Toowoomba. 
Other growth markets are Sunshine Coast lifestyle locations Sunshine Beach (40%), Eumundi (23%) and Doonan (21%).
A standout characteristic is the recovery in resources-related markets which have spent the past few years in downturn. This trend is headed by Mackay, which now has rising demand coupled with much lower vacancies, and some suburbs are now showing good price growth.
Emerald, which is located near the mines of the Bowen Basin and the Galilee Basin, is a standout: quarterly sales have been 51, 57, 66, 62, 60, 76 and 78, while the median house price has risen 24% to $310,000 in the past 12 months. The trend here is a prime example of the recovery in the resources-related towns.
There’s further evidence of revival in Gladstone, in addition to the steady reduction in vacancies (now below 3%). In our latest analysis we have classified six Gladstone suburbs as rising markets and three suburbs (Clinton, Kin Kora and West Gladstone) have median house prices higher than a year ago. But the market remains patchy – some suburbs are still classified as decline or danger markets and most suburbs still have median prices lower than a year ago (but it’s significant that most of those suburbs have recorded an uplift in prices in the most recent quarter).
As always, never forget that markets that have strong links to the resources sector are volatile and are prone to major downturns. They’re not good places for risk-averse investors.
The larger, more diversified regional centres of Queensland continue to have steady markets, headed by Cairns and the Fraser Coast. Cairns has seven suburbs with rising sales activity, but prices have yet to react to improved demand – most Cairns suburbs have median prices lower than a year ago, although there are exceptions like Caravonica, Whitfield and Yorkeys Knob.
The Fraser Coast region, centred on Hervey Bay, now has six rising suburbs, like rapidly-improving Urangan. Toogoom, Tinana and Kawungan have all recorded strong price uplift in the past year.
Toowoomba remains a solid market without yet showing any overt growth signs, while Townsville has suffered setbacks from the recent major flooding.
The Sunshine Coast, which for some time has been the strongest of the Queensland markets, no longer has that mantle. It now has few suburbs with rising demand, but many plateau markets –which suggests this market may have passed its peak in terms of demand.
But it’s still producing strong price outcomes. Of the 99 Regional Queensland markets with annual price growth above 5%, 38 are in the Sunshine Coast region – plus another 24 suburbs have growth of less than 5%. Both house and apartment markets in and around Noosa continue to be leading performers on price growth. 
Sunshine Coast markets with annual growth above 10% include the Doonan, Eumundi, Mooloolaba, Maleny, Sunshine Beach, Woombye, Wurtulla, Pomona, Twin Waters and Peregian Beach house markets, as well as the Golden Beach, Noosa Heads, Noosaville, Peregian Springs and Warana unit markets.
As we reported in the previous edition, the post-Games boost predicted by some has not eventuated on the Gold Coast. This market was strong from 2015 to 2017 because of the pre-Commonwealth Games construction boom. 
Since then the growth has subsided and it’s difficult to find any growth suburbs (in terms of sales activity) in Gold Coast City, but 41 suburbs classified as either plateau or consistency markets – plus a couple of decline markets. The price outcomes are also mixed: 57 suburbs have median prices higher than a year ago, but there are 27 with prices lower than last year.
A notable trend on the Gold Coast is that many of the best performers on price growth are apartment markets – but not the iconic beachside enclaves like Surfers Paradise, Main Beach and Broadbeach. The unit markets showing growth are in the inland suburbs like Ashmore, Benowa, Elanora, Helensvale, Pacific Pines and Mudgeeraba – or the beachside suburbs outside the glitter strip, like Bilinga, Coolangatta, Palm Beach and Runaway Bay.
Terry Ryder is the founder of hotspotting.com.au
<a href="https://mailto:ryder@hotspotting.com.au">ryder@hotspotting.com.au</a>
twitter.com/hotspotting
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Mackay leads regional Queensland price growth surge: Hotspotting's Terry Ryder

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EXPERT OBSERVER
The biggest recurring problem for real estate is politicians who don’t understand the industry. Which is pretty much all of them, on both sides of politics.
They also display a chronic inability to think through the consequences of their policies designed to impact housing markets. This sad truth is evident in the policies from both the major parties in the impending Federal Election.
We’re going into Saturday’s poll with no policies from any of the major parties that address the fundamental problems of the housing industry, of which affordability is the biggest. What they’ve served up just fiddles around the edges of the problem.
The Liberal Party has announced a plan that will make it easier for first-time buyers to get loans with smaller deposits, by supporting loans to people who have saved 5% of the purchase price. Federal Labor has given a “me, too” response to that policy (and why not, they’re spending like drunken sailors, why not just add this to the national credit card as well).
But the First Home Loan Deposit Scheme will be available to only a limited number of FHB borrowers and it fails to address the core issues – the price they will pay for properties and the associated costs of getting into the market.
Labor’s core policy is changing negative gearing tax benefits. This is a revenue measure dressed up as a policy to improve housing affordability but clearly it won’t make a positive difference, while creating myriad problems elsewhere.
Whenever they’re asked whether their negative gearing policy will force down house prices, Bill Shorten and Chris Bowen are adamant that it won’t. That being the case, how does it improve affordability? The answer is: it doesn’t. It’s purely a revenue measure.
What the policy will do is put first-home buyers in direct competition with investors for new properties.
This is the polar opposite of the Labor’s stated intentions, because they say they want to prevent FHBs having to compete with investors. These clowns simply don’t understand their own policy or its consequences.
Currently most first-time buyers have to buy or build a new home if they want a state grant. And investors are encouraged to buy new by the recent changes to depreciation benefits. Now Labor says investors will get tax benefits through negative gearing only if they buy new.
So everyone will be compelled to buy new rather than established property. Labor’s policy puts FHBs on a collision course with investors.
The thing is, most buyers don’t want to buy new because it’s usually considerably more expensive than a comparable second-hand home. The core problem in real estate, and none of the major parties are addressing this, is the high cost of creating new dwellings in Australia. 
The costs are so high because all three levels of government milk real estate for revenue. They treat the housing industry as their favourite cash cow. Stamp duty, land tax, capital gains tax, GST, rates, infrastructure charges, application fees, the list goes on and on.
Every time a state or territory government brings down a budget, it adds to the affordability problem by increasing existing imposts or imposing new ones. It’s relentless and it’s the core of the affordability problem.
Everyone (if Labor wins) will be pushed to buy new property but the prices are unreasonably high, thanks to our cynical politicians.
This is occurring at a time when new supply is drying up, partly because federal and state policies have extinguished the contribution of foreign investors – officially to help FHBs but in truth just another grab for cash. 
The surcharges placed on foreign investors in Australian real estate are revenue-raising measures, pure and simple, but they’re hurting Australian buyers by killing off projects that can no longer make the required level of pre-sales to get funding. The reduced supply is just another component of the affordability problem. 
Another unforeseen consequence of the Labor policy will be a revival of the spruiker industry. With most categories of buyers being compelled to buy new – e.g. off-the-plan apartments – we will see a revival of the get-rich-quick seminars that used to proliferate, where crooks make lots of money by ripping off unsuspecting consumers.
So it's not much of a choice this Saturday for voters who care about the housing industry and its related issues, like housing affordability. 
Labor proposes to increase the taxation burden on the real estate industry, which will worsen the problem, and the Liberal pitch may make it easier for FHBs to get a loan to buy a home, but it won’t make the cost of the home cheaper.
It’s a choice between dumb and dumber.
Terry Ryder is the founder of hotspotting.com.au
<a href="https://mailto:ryder@hotspotting.com.au">ryder@hotspotting.com.au</a>
twitter.com/hotspotting
Currently MOST first-time buyers have to buy or build a new home if they want a state grant
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FHB deposit guarantee scheme shows politicians don't understand the housing market: Hotspotting's Terry Ryder

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EXPERT OBSERVER
Media portrays Sydney as a market of universal and relentless decline, but our analysis shows there’s a lot more to the story. While sales activity and prices are down generally, there are many different scenarios playing out across the Greater Sydney Area. 
In Hotspotting’s latest quarterly survey of sales activity, we can find only three suburbs where sales activity is trending higher, but there are 90 suburbs with steady, consistent sales and a similar number of plateau markets (where activity has dropped from the peak but remains at solid levels).
And there are 61 suburbs classified as decline markets and 14 which we regard as danger markets, with the Sydney City, Parramatta, Bayside and Canterbury-Bankstown LGAs heading the list of markets to avoid.
Our analysis of 416 suburban markets in the Greater Sydney Area shows that 77% of them have median prices lower than a year so, while 23% have higher prices. Given the negative sensation about Sydney in mainstream media, many people would be surprised to learn that there are 95 Sydney markets where prices are not falling.
That includes 36 where median prices have risen by more than 5%, led by the top end of the Sydney market (suburbs with median prices above $2 million). Suburbs with median house prices above $2 million have recorded trend-defying growth, including Bellevue Hill (up 17%), Vaucluse (15%), Collaroy (22%), Palm Beach (17%), Artarmon (28%), Abbotsford (16%), Darling Point (12%) and Neutral Bay (17%), among others.
In another interesting trend that defies the general media rhetoric, there are 44 suburbs where the median house price is down but the media apartment price is up. This reflects the reality that many of the Sydney markets where prices have continued to grow against the overall trend are apartment precincts – it’s not happening across the board, but it’s a significant sub-plot in the Sydney market.
Our analysis of the Sydney market shows why the generalisations prevalent in media are so misleading for consumers. This Autumn survey has given ratings to 258 Sydney suburbs: 3 rising, 90 plateau, 90 consistency, 61decline and 14 danger markets. The absence of growth markets and the dominance of struggling ones is the over-riding trend, but there are other stories to be told in the Sydney market.
The strongest precincts are those that are displaying stubborn consistency of sales activity in the face of the general downturn.
The Sutherland LGA has two of only three rising suburbs (Jannali and Kirrawee), as well as five plateau and four consistency suburbs. The median price for Jannali units has risen 22% in the past year, while Kirrawee houses are up 3%. It’s notable that median prices for units have risen in many Sutherland suburbs, including Caringbah, Cronulla, Caringbah South, Gymea and Miranda, as well as Jannali.
Other precincts that are showing solidity, with plenty of consistency and plateau suburbs (and no decline or danger markets), including LGAs at the more affordable end of the market like Blacktown, Camden, Penrith, Wollondilly and Campbelltown.
The Blacktown LGA has one rising, three plateau and 10 consistency suburbs. A characteristic of this market is that median prices are down, but only a few percent in most suburbs – including Plumpton (-2%), Ropes Crossing (-2.3%), Schofields (-1.2%), Marsden Park (-0.4%), Blacktown units (-2%) and Mt Druitt units (-2.8%).
Other solid markets include the LGAs of Inner west, Northern Beaches, North Sydney,  Woollahra, Randwick and Fairfield.
Inner West suburbs where median prices are higher than a year ago include Annandale (units), Camperdown, Lilyfield, Rozelle (units), Dulwich Hill (units) and Stanmore (units).
Standout price performances in the steady Northern Beaches precinct include Collaroy, Narrabeen, Avalon Beach, Manly (units), Seaforth (units) and Newport (units).
The weakest precincts of the Sydney market are the LGAs of Parramatta, Sydney City, Bayside and Canterbury-Bankstown.
Parramatta has six suburbs which we classify as danger markets: those where sales activity is sharply down, prices are falling and vacancies are high. These suburbs are Carlingford, Epping, North Parramatta, Parramatta, Wentworth Point and Rosehill. This LGA also has six suburbs ranked as decline markets.
Median prices are down sharply for North Parramatta houses (20%), Parramatta houses (30%), and Rosehill units (22%).
Sydney City has seven declining suburbs and two danger markets (Haymarket and Waterloo).
The Canterbury-Bankstown LGA has nine suburbs classified as declining markets, based on a sharp decrease in sales activity over the past 12-18 months: Bankstown, Belmore, Campsie, Canterbury, Croydon Park, Lakemba, Padstow, Panania and Roselands.
Terry Ryder is the founder of hotspotting.com.au
<a href="https://mailto:ryder@hotspotting.com.au">ryder@hotspotting.com.au</a>
twitter.com/hotspotting
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What's really going on in the Sydney real estate market? Hotspotting's Terry Ryder

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EXPERT OBSERVER
State Government approvals which appear to green light the Adani coal project represent a clear and present danger for property investors with poor research and short memories. 
I was alarmed to see News Ltd media publishing stories with headlines like this: “Adani impact: Mining towns on cusp of a housing boom”.
This article was repeated in various forms of media across the nation, with content like this: “After years of poor property price growth, cities like Gladstone, Rockhampton and Emerald are poised to become an investors’ paradise following the State Government’s decision to give the green light for the Adani mine in the Galilee Basin.
“Home prices in towns like Bowen, Longreach and Moranbah, which are up to 73% below their peak, could be on the cusp of a major rebound with work on the Carmichael coal mine set to start immediately.”
Investors’ paradise? Seriously? This is the pinnacle in irresponsible journalism. Anything goes, it seems, in the interests of creating clickbait.
And Longreach to experience an Adani related boom? It’s about 600km south-west of the mine site and, as far as I can tell, has nothing to do with the project or its alleged benefits. (There have been some concerns expressed by Longreach farmers about negative impacts on water resources).
Let’s get some perspective. Mining towns have shown themselves in the recent past to be more of a fool’s paradise than an investor’s paradise. They’re at the extreme danger end of the risk spectrum for property investors. More people have lost money than made fortunes investing in places like Moranbah and Gladstone.
There’s no doubt that many of these places have shown exceptional price growth at times in their history and have also delivered periods of very high rental returns. But the booms have been followed by disastrous busts.
At one point, during the last resources investment boom, Moranbah’s median house price topped $700,000. It had an annual average growth rate around 30% - that’s 30% per year over 10 years. Weekly rents around $1,500 were common.
But what happened next is the core lesson for investors: the major mining companies became fed up with paying those sorts of rents and prices for very ordinary houses. And they came up with a new model that cost them less – they constructed temporary workers’ camps to accommodate fly-in-fly-out (FIFO) workers.
The median house price of Moranbah dropped to around $150,000 and vacancies went above 10%, with a dramatic negative effect on rents.
In the past year or so, the market there has started to recover. Vacancies have come down to below 2% and prices are rising again (from a very low base). 
But will the opening of major new mines create a new housing boom? It’s unlikely, because the mining companies have established a successful model of FIFO workers and workers camps. Those crazy booms of the past won’t be repeated. Any peripheral upsurge in values will be temporary.
Right now, the long-term growth rate for Moranbah prices (the average annual change over the past 10 years) is -3% per year. That’s minus 3% per year. Which means the current median price – around $205,000 – is considerably lower than it was 10 years ago.
The Moranbah story has been repeated in mining-related locations elsewhere in Queensland, including Gladstone, Emerald and the towns of the Surat Basin. It’s also happened, spectacularly, in resources centres in Western Australia, like Port Hedland and Karratha.
Gladstone had a big property market slump while three huge gas plants costing $60 billion were under construction. The market in Newman in the Pilbara region of WA dived while Gina Rinehart was building a $10 billion iron ore mine near the town.
All suffered from the same syndrome: while developers built lots of new dwellings in anticipation of a property boom, the resources companies built workers camps and many of the new homes sat empty, creating a property downturn.
The notion that a big new mine means a housing boom for nearby towns is no longer valid.
And, when you read a little deeper into the News Ltd article, you find this:
CoreLogic senior research analyst Cameron Kusher said it was hard to say what the approval of the mine would mean for the surrounding regions because there was still a lot of contention around how many local jobs would be created.
“If you assume job creation is significant, it will increase demand for housing both from a purchase and rental perspective,” Mr Kusher said. “The challenge will be that since the end of the mining boom these areas have seen very low demand for housing so, if demand exceeds supply you would expect rents and prices to increase, however, I can’t say with any confidence whether that will or won’t be the case.”
I agree with those sentiments. And I would go further – the big property booms in mining towns are history, unless the miners’ modus operandi changes.
There will be some benefits to property markets from the Adani mine, if it goes ahead (it still has some federal regulatory hurdles to get over). Townsville will benefit from having the project HQ, Bowen is close to the export port and may get some spinoff - and Mackay may benefit through proximity and the ability to provide workers, perhaps.
I regard Mackay as a growth property market, because it is benefitting from the revival in Central Queensland mining plus – and this is the key factor – it has other growth elements to its economy. It’s not solely reliant on a buoyant mining sector.
Investors seeking to exploit the Central Queensland mining revival would be better off considering the larger, more diversified regional cities like Mackay, rather than the small towns near the mine sites.
Terry Ryder is the founder of hotspotting.com.au
<a href="https://mailto:ryder@hotspotting.com.au">ryder@hotspotting.com.au</a>
twitter.com/hotspotting
 
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Terry Ryder

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