<a href="https://www.apartments.com.au/architects/bates-smart">Bates Smart</a> is one of Melbourne's longest standing architecture firms.

Founded in Melbourne in 1853 by Joseph Reed, the firm began as Reed &amp; Barnes and has evolved through various partnerships before adopting the Bates Smart name in the 20th century. With a continuous presence spanning more than 170 years, the practice has played a pivotal role in shaping Melbourne’s architectural identity.

In the 19th century, Bates Smart designed several of Melbourne’s enduring landmarks, including the Royal Exhibition Building (1880), a UNESCO World Heritage site, and the Melbourne Town Hall. The firm’s influence continued into the 20th century with notable works such as Ici House (1958), considered Melbourne’s first modern skyscraper and a milestone in post-war Australian architecture.

One of their landmark designs was&nbsp;The First Church of Christ, Scientist, at 336-340 St Kilda Road. The building, which is listed on the Victorian Heritage Register, was designed by Bates, Peeble and Smart with construction completed in 1922. Architecturally, the building is significant as a rare example of early twentieth century classicism applied to a religious building. Historically, the building is significant as the first church of the Christian Science movement.

Melbourne developer Time &amp; Place decided to bring Bates Smart back to the area to design their next residential apartment project, Park Modern.

[smartcode_project:default project_id=138453 project_image_fid=2138]

<a href="https://www.urban.com.au/new-apartments/park-modern-south-melbourne-1-middleton-lane-south-melbourne-vic-3205">Park Modern</a>, on one of the largest island sites on the Melbourne CBD fringe, bordered by Dorcas Street, Wells Street, and Middleton Lane, will comprise two sculptural towers. It is being positioned as a design-forward response to evolving owner-occupier preferences in the Domain precinct.

Tim Price, Director at <a href="https://www.apartments.com.au/developers/time-place">Time &amp; Place</a>, says&nbsp;Bates Smart have got a footprint on this city, probably like no other architect.

"It’s a really nice kind of next chapter story, that they created from a design perspective so long ago," Price told Apartments.com.au.

Park Modern will be the third time Time &amp; Place has worked with Bates Smart, having successfully designed and delivered Collins House and Opera on St Kilda Road together.

The brief focused on creating a built form that would feel contextually appropriate while offering a contemporary evolution of inner-city apartment living.

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The focus for Park Modern is squarely on owner-occupiers.

“It’s not always about downsizing," Price says.

"Sometimes it’s just about creating a space which is easily maintained, lock up and leave, reflecting people’s aspirations, whether they’re entertainers, big dining room spaces, big open terraces, they’re important parts of any design consideration.”

The building includes a mix of one, two and three-bedroom apartments, as well as penthouses, with layouts and floor plans designed to suit a broad demographic. The architecture has been shaped to capture&nbsp;view corridors to the Botanic Gardens, Port Phillip Bay and the CBD skyline.

Each apartment has been oriented to maximise natural light and provide a clear outlook, elements often cited by owner-occupiers as key criteria.

[smartcode_project:default project_id=138453 project_image_fid=351806]

Rather than defaulting to a generic luxury offering, the amenity strategy at Park Modern reflects specific insights into how residents want to live. The ground floor will include co-working areas, wellness facilities, and a concierge-led lobby that blends indoor and outdoor design cues.

“Wellness has become a more thoughtful consideration, not just gyms or lap pools, but things like magnesium plunge pools, saunas, daybeds, and studio spaces for Pilates and the regular cardio workout,” says Price.

One notable inclusion is a substantial porte-cochère, a covered vehicle drop-off zone integrated into the site plan. It’s a feature rarely seen in inner-urban developments and speaks to the team’s emphasis on ease of arrival and departure for residents and guests.

A display suite for Park Modern is now open by appointment, giving prospective buyers an early look at the project.

[smartcode_project_cta:default project_id=138453]

Joel Robinson

100 years on, Bates Smart returns to South Melbourne's Domain Precinct to design Park Modern

One of the most significant beachfront projects ever proposed for the small suburb of Miami on the Gold Coast, has taken a major step forward.&nbsp;Monaco Property Group has secured approval for <a href="https://www.apartments.com.au/new-apartments/nalu-miami-122-marine-parade-qld-4220">NALU</a>, a $500 million development comprising just 45 ultra-luxury residences on the iconic former Nobby’s Outlook site.

Acquired by <a href="https://www.apartments.com.au/developers/monaco-property-group">Monaco Property Group</a> in 2024 for $70 million, the rare 7,238 sqm Marine Parade parcel boasts more than 80 metres of uninterrupted ocean frontage.

With approvals now secured, Monaco Property Group will move NALU into its delivery phase. The project has been designed by&nbsp;<a href="https://www.apartments.com.au/architects/bda-architecture">BDA Architecture</a>, who collaborated with&nbsp;<a href="https://www.apartments.com.au/landscape-architect/ldg-landscape-architecture">LDG Landscape Architecture</a> and <a href="https://www.apartments.com.au/interior-designers/tom-mark-henry">Tom Mark Henry Interiors</a>&nbsp;to create the low-rise building, its landscaping, and interiors.

<img alt="NALU" data-entity-type="file" data-entity-uuid="3fdf578e-7cc4-4b17-bbc2-ba853522a5d8" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/122_Marine_Parade_002.jpg?VersionId=zFhJWVzX0jmCO.5iIIxNELImHesTjWS4" />

Residences will range from 237 sqm layouts to beachfront homes exceeding 1,400 sqm.

At the heart of the project is a 2,200 sqm lifestyle precinct with a bathhouse, fitness centre and resort-style pool, elevated by a concierge service.

Jonathan Grasso, Co-Founder of Monaco Property Group, said the council approval marks an exciting milestone for NALU, which will launch in Q1 2026.

“The project will now progress toward construction, working alongside our world-class collaborators to bring NALU to life," Grasso said.

“Our vision is to create a legacy project for the Gold Coast, one that not only honours the history of the site but also elevates its future, setting a new standard for coastal living in Australia. NALU embodies the pinnacle of design and location and will stand as an enduring icon of prestige and liveability.”

<img alt="NALU" data-entity-type="file" data-entity-uuid="6ae8545b-87ca-4dea-90ed-ac273ec6515d" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Image7.jpg?VersionId=Wnmie4bu3x2WQonnG4Pwmh39NdZVKeOV" />

Originally developed in the 1970s as Nobby’s Outlook and later refurbished in 2019 as Nalu, the property has long held a place in the local community’s coastal identity. The new vision will build on this legacy, creating luxury residences that capture ocean views while fostering a lifestyle defined by wellness, connection, and ease.&nbsp;

Beyond its residential offering, NALU will deliver significant economic benefits to the Gold Coast through job creation and opportunities for local suppliers and contractors. Construction is anticipated to commence in early 2026, with completion expected in Q3 2028.

Monaco Property Group approved for $500 million NALU apartments on Miami beach

The most elevated residential tower in Palm Beach, <a href="https://www.apartments.com.au/new-apartments/corallo-palm-beach-5-palm-beach-avenue-palm-beach-qld-4221">Corallo</a>, has officially launched this week, however only a handful of buyers will have an opportunity to buy in to the 17-storey project.

The $200 million mixed-use project includes ground floor dining and retail and is considered so valuable its developer, <a href="https://www.apartments.com.au/developers/changfa-group">Changfa Group</a>, will be staging its release of one-, two- and three-bedroom apartments and penthouses to the market.

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<a href="https://www.apartments.com.au/project-marketer/colliers">Colliers</a> International, Director, David Higgins, said the development’s location just metres from the beach on the corner of Palm Beach Avenue and the Gold Coast Highway influenced the sculptural design by the acclaimed Plus Architecture studio.

“<a href="https://www.apartments.com.au/developments/palm-beach-qld-4221">Palm Beach</a> locals understand the rare opportunity here at Corallo, particularly being the tallest building in the suburb and its proximity to the beach and local restaurants, and they’ve represented the bulk of pre-launch enquiries,” Higgins said.

“The orientation of the apartments captures views of the coastline from Surfers Paradise to Currumbin, and the diversity of floor plans and apartment types provide an exceptional level of choice.

“The first release includes just 59 one-, two and three-bedroom apartments and two half-floor penthouses, with flexible use designed to appeal to both owner-occupiers and investors."

&nbsp;

[smartcode_project:default project_id=112194 project_image_fid=799]

In addition to the ground floor amenity, residents will also have access to a private dedicated wellness level offering 734 sqm of resort-style amenities including a pool, cold plunge, wet deck, steam room, sauna, gym, day bed, fire pit, barbecue area, dining area and yoga/stretch deck.

The project is located within walking distance of Tallebudgera Creek, Burleigh Heads village, Currumbin Alley and Palm Beach Currumbin High School. The Gold Coast Airport is under 10 minutes away.

[smartcode_project:default project_id=112194 project_image_fid=814]

Higgins said Palm Beach remained a hotly contested suburb for home buyers, with prices doubling in the past five years.

“What makes Corallo so appealing to the local market is the diversity of apartment types and pricing, with one-bedroom apartments starting from $841,000 and two-bedroom apartments starting from $1.34 million,” he said.

“The ground floor retail and dining offering will further expand on Palm Beach’s village atmosphere and create a meeting place for locals, and those opportunities for connection are highly valued.”

&nbsp;

[smartcode_project:default project_id=112194 project_image_fid=807]

The on-site sales display, which includes a fully fitted kitchen, bathroom and bedroom, will be open until early works commence in Q1 2026. Each residence at Corallo will feature premium finishes including natural stone, artisanal brickwork, and warm copper accents.

Changfa Group has a two-decade history of delivering premium developments in Australia and internationally, having recently completed its collection of premium townhomes at Lyra, Hope Island, as well as apartment projects in Leichhardt, Carlingford, and Chatswood in New South Wales.

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$200 million Corallo Palm Beach launches with limited apartment release

In a move that aligns with NSW's accelerated planning incentives for affordable housing, developer&nbsp;<a href="https://www.apartments.com.au/developers/the-one-collection">One Collection</a> has revised its Hills District apartment plans, and taken it to the NSW Government, to secure approval.

The developer, which is currently delivering Horizon Hurstville, is seeking to add 80 more apartments to its <a href="https://www.apartments.com.au/new-apartments/the-one-castle-hill-16-dawes-avenue-nsw-2154">Castle Hill development</a> near Castle Towers. They already have approval for 280 apartments across eight six-storey buildings.

<img alt="One Collection" data-entity-type="file" data-entity-uuid="b3c298ba-1cc5-4db7-9872-607c75f8ceca" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202025-10-13%20at%2010.19.22%E2%80%AFAM.png?VersionId=wN9KpFIu5ENSGZLLsaZgXQHrXcwEO3Vd" />

Now on the desks of the NSW Department of Planning is 360 apartments, 48 of which will be dedicated to affordable housing.&nbsp;Affordable housing is to be “fully integrated within the building and visually indistinguishable,” according to the planning submission.

The 15,697 sqm block, an amalgamation of 16 sites, spans across Dawes Avenue, Hughes Avenue, and Camdan Crescent, sits 550m from Hills Showground Metro Station.&nbsp;

"The existing context is quickly changing from free-standing homes into residential flat buildings in line with the Hills Showground Precinct planning framework," Place Studio noted.

<img alt="Castle Hill" data-entity-type="file" data-entity-uuid="3ec24948-c185-48fa-af8b-ed25adf302bf" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202025-10-13%20at%2010.19.04%E2%80%AFAM.png?VersionId=zNDX.IeRROX1RlDeYcS38xn8w_dqgU2t" />

They said the design was informed by the site's unique condition of having three street frontages and was developed to to respond sensitively to iots surrounding context.

"The design adopted a conventional perpendicular alignment to the primary street frontage. The massing of the development was carefully modulated to align with the evolving character of the neighbourhood. The design ensured that the scale was not excessive or out of context, but instead contributed to a cohesive urban form consistent with emerging developments in the area."

<img alt="Castle Hill" data-entity-type="file" data-entity-uuid="f83ffdaa-f960-469d-b6fe-abcece57c9ef" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202025-10-13%20at%2010.19.09%E2%80%AFAM.png?VersionId=4oKlCyfaKes7jLi1_EMoqa46w2h_YvDZ" />

The apartment mix will be 46 one-beds, 168 two-bed apartments, and 146 three-bedroom units, with 631 parking spaces proposed.

Along the street frontages, the building heights are four storeys with a 7.5 metre setback, and eight storeys with an 11.5 metre setback. It should cost about $150 million to build.

One Collection works hand-in-hand with the respected development and construction firm Masscon, which has built a reputation for leveraging its expertise in the built environment to take on developments others can't. That's what they're achieving at Horizon Hurstville, having taken over the project to deliver it.

First look: One Collection advances plans for Castle Hill apartments

At Yarra’s Edge, <a href="https://www.apartments.com.au/developers/mirvac">Mirvac</a>’s newest tower under construction, <a href="https://www.apartments.com.au/new-apartments/trielle-at-yarra-s-edge-docklands-16-point-park-crescent-docklands-vic-3008">Trielle</a>, sets a new benchmark for elevated living. Rising 45 storeys, 12.5 metres from the Yarra River, the landmark building offers residents access to a private wellness retreat and spa, a resident-only golf simulator, and an elegant lounge, dining and bar complete with a self-playing piano, all without ever having to leave home.

Now, that sense of elevation has reached new heights with the Aerus Sub-Penthouses, a limited release of half-floor riverfront residences on the Collins St axis where the sought-after street meets the Yarra River.

Each Aerus Sub-Penthouse, located across levels 42 and 43, represents the most expansive offering within Trielle, aside from the yet-to-be-revealed crowning penthouses. Spanning between 269 and 301 sqm, these residences are designed to capture natural light and uninterrupted views of the city skyline, Yarra River, and Port Phillip Bay.

[smartcode_project:default project_id=114216 project_image_fid=3784]

Among the collection are three-bedroom sub penthouses, complemented by a media room, and expansive four-bedroom layouts. All include panoramic living areas and oversized master suites with luxury ensuites reminiscent of a five-star hotel, complemented by dedicated dressing rooms finished in timber and natural stone.

The interiors have been crafted by <a href="https://www.apartments.com.au/architects/mirvac-design">Mirvac Design</a>, the developer’s award-winning in-house architecture and design team. Every material has been chosen for quality and longevity, from sculpted stone island benches with feature soft wash LED lighting to bespoke joinery and chevron timber oak flooring.

Kitchens are fitted with a BORA induction cooktop with integrated downdraft extractor, alongside Gaggenau appliances, including a fridge, freezer, and wine fridge. The adjoining butler’s pantry incorporates the exclusive Gaggenau Minimalistic Series including oven, steam oven, microwave, coffee machine and warming drawer, all concealed behind handleless glass panels for a clean, integrated presentation. Bathrooms feature custom Apaisar freestanding baths and basins and natural stone benchtops, continuing Mirvac’s design emphasis on tactile, timeless materials.&nbsp;

<img alt="Trielle at Yarra's Edge, Docklands" data-entity-type="file" data-entity-uuid="c00be724-b0f1-47c0-afed-54f829870704" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Aerus%20sub-penthouse.png?VersionId=Uktd61kpLSqNjwJeDFs7IaZ3xgLlDQmu" />

Michael Wiener, Design Director at Mirvac, says The Aerus Sub-Penthouse embodies the apex of Mirvac’s design ethos.

“Moving through your home is like walking on air - a private sanctuary where the craftsmanship is refined, the proportions generous, and the flow so effortless, you feel completely at ease in the sky,” Wiener says.

“In Aerus, we wanted to create a sense of weightlessness - a home that feels suspended in the skyline, full of light, grounded in luxury.”

[smartcode_project:default project_id=114216 project_image_fid=3777]

The Aerus Sub-Penthouses are expected to attract a mix of local and international buyers seeking a long-term residence of scale and quality in a riverfront setting, from returning expats to established families and business owners who value privacy, craftsmanship, and convenience within walking distance of the CBD.

With an unmatched suite of amenities, Trielle is the most extensively appointed development Mirvac has created to date at Yarra’s Edge. Within the tower will be The Oasis, a 900 sqm podium rooftop wellness retreat designed in collaboration with spa expert Naomi Gregory. Located seven storeys above the Yarra River promenade, it features a 25-metre lap pool, spa and sauna, hot magnesium spa, biophilic gym, yoga and Pilates studio, cold-pail contrast treatment, and day spa treatment rooms. Further amenities include a piano lounge, bookable dining room, cinema room, golf simulator studio, games room, teppanyaki bar, dog wash bay, and two flexible work hubs, The Biblioteca library and Mills Place office space, catering to residents’ evolving lifestyle needs.

Construction of the $350 million tower is underway through Mirvac’s in-house construction arm, with completion anticipated for mid-2027.

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Sky-high sanctuaries: Mirvac unveils The Aerus sub-penthouses at Trielle

Tim Lawless

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The vast majority of properties sold nationwide to September 2015 did so at a profit, with 91.6% of sales over the quarter selling at a profit, according to the latest CoreLogic RP Data Pain &amp; Gain report.
The report found the total value of this profit was recorded at $17.3 billion, with the average gross profit $265,605. 
According to the report some 8.4% of all homes resold recorded a gross loss when compared to their previous purchase price; the lowest proportion of loss-making resales since December 2014.
"This figure was lower than the 9.2% over the June 2015 quarter and also lower than the 8.9% recorded a year ago. Across those dwellings which resold at a loss over the quarter, the total value of loss was $376.2 million with an average loss of $63,221," it noted.
"Nationally there was $376.2 million in realised losses over the quarter at an average of $63,221 and $17.3 billion in realised profit at an average of $265,605.
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"Across the capital cities, there were $193.5 million in losses with an average of $71,996 per loss-making resale compared to $14.4 billion in profit at an average of $324,887. The combined regional areas recorded $182.7 million in losses at an average of $55,996 compared to $2.9 billion in profit at an average of $139,798. The average losses were greater in the capital cities, however they also generally experienced much greater profits, more than double those in regional areas."
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The proportion of loss making resales is lower than the financial crisis peak nationwide with the exception of Darwin to September 2015, according to the latest CoreLogic RP Data Pain &amp; Gain report.
The report found loss-making resales lower in Sydney, Melbourne, Brisbane and Hobart, higher in Perth and Darwin and flat in Adelaide and Canberra and said values growing sharply in Sydney and Melbourne over the year with moderate value growth in Brisbane, Adelaide, Hobart and Canberra and values falling in Perth and Darwin. 
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Proportion of loss-making resales lower than the financial crisis peak: Tim Lawless CoreLogic RP Data Pain & Gain national

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December 2016 saw capital city dwelling values rise by 1.4%, taking the annual capital gain for 2016 to 10.9%; the highest growth rate for a calendar year since 2009.
Factoring in gross rental yields and capital gains, housing as an asset class, earned a total annual return of 14.7% based on the combined capital cities index results.
Across Australia’s capital cities, the annual change in dwelling values for 2016 ranged from -4.3% in Perth to 15.5% in Sydney, with Melbourne and Hobart also showing annual capital gains higher than 10%.
Capital city growth rates have also shown a growing divergence between the broad housing product types.
Over the past twelve months we have seen capital city house values rise by 11.6%, while unit values have increased by roughly half the pace at 5.9%.
The divergence in growth rates is the most distinct in Melbourne and Brisbane, where concerns around unit oversupply have eroded buyer confidence.
Melbourne house values are up 15.1% over the year compared with a 1.7% rise in unit values, while Brisbane house values are 4.0% higher over the year, with unit values falling by -0.2%.
Australia’s regional housing markets generally did not experience the same growth conditions as the capital cities, with annual growth to November recorded at 2.8% across the combined regional markets. Regional New South Wales showed the strongest growth conditions, with non-capital city house values rising 7.3% over the 12 month period to November 2016.
The remaining rest-of-state regions showed relatively sedate conditions, with values rising by half a per cent across regional Victoria, 1% across regional Queensland and 1.1% across regional South Australia. Regional Western Australia recorded a 7% fall in house values over the year. Those regional areas with intrinsic ties to the mining and resources sector have continued to record weaker housing market conditions since the end of the mining infrastructure boom, with Perth and Darwin recording the weakest housing market conditions across the capital cities.
Since values peaked in these markets during 2014, values have fallen by a cumulative 7.9% in Perth and 5.9% in Darwin.
More recently both these markets have shown signs of moving through the low point of their respective downturns, with values rising by 2.8% and 5.9% respectively over the final quarter of 2016.
Based on the annual housing market results, it is clear that housing markets across Australia have responded to regional differences in economic and demographic trends; strong population growth and economic activity have driven value growth in Sydney and Melbourne, however, more recently strong growth trends have spread to Hobart and Canberra, as well as many of the coastal and lifestyle markets where values are now also rising swiftly.
Post Global Financial Crisis, the CoreLogic index results show that Sydney’s dwelling values have almost doubled, rising by 97.5% since January 2009, whilst Melbourne dwelling values have increased by 83.5% over the same time frame.
Every other capital city has seen dwelling values rise at substantially lower rates over this period, highlighting just how strong the Sydney and Melbourne housing market conditions have been over the past eight years.
Sydney-siders saw dwelling values increase by approximately $10,000 per month over the past year, creating a significant boost in wealth for home owners; at the same time we’ve seen mounting affordability challenges for aspiring home owners.
The recent CoreLogic Housing Affordability Report shows Sydney dwelling prices were 8.3 times higher than annual household incomes and households were dedicating an average of 44.5% of their income to service a mortgage (based on an 80% loan to valuation ratio and the average discounted variable mortgage rate).
Tim Lawless heads up the CoreLogic RP Data research and analytics team, analysing real estate markets, demographics and economic trends across Australia.
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2016 dwelling value growth rates divergent even within the same capital city: Corelogic's Tim Lawless

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Melbourne’s housing market is more resilient to a slowdown compared to Sydney, according to CoreLogic’s latest update report.
The property data firm says that price growth conditions are starting to ease.
For more information see the video below:
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Melbourne housing update: Tim Lawless sees price growth conditions ease

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Adelaide dwelling values held over June quarter, according to CoreLogic’s latest update report.
The property data firm says that however the unit sector’s performance fell over the quarter.
For more information see the video below:
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j.ballantyne1990-6AQqhLzZaK

Adelaide housing market update: Tim Lawless

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EXPERT OBSERVER
CoreLogic’s recently released Pain and Gain report highlighted a growing divergence between houses and units for loss making resales. 
Unit markets recorded a higher proportion of loss making resales relative to houses across every broad region of Australia over the June quarter.  
The latest CoreLogic Pain and Gain report provides a summary of gross profit and loss making resales across the country. The results show a consistent and long underperformance across the unit sector, and more recently, a growing divergence between the proportion of houses and units reselling at a gross loss. The June quarter report revealed that 14.3% of units that resold across the capital cities transacted at a gross loss; roughly double the rate of loss making house resales. Across the combined regional areas of Australia, loss making unit resales comprised 16.1% of transactions while a lower 10.3% of houses resold at a gross loss.
Every capital city and rest of state region across the country has seen the unit sector record a larger proportion of loss making sales across the unit sector compared with detached housing, however the differential is substantial in those cities where unit values have fallen more materially.
Across the capital cities, Darwin stands out as showing the highest proportion of loss making unit resales, with 71% of units reselling at a loss over the June quarter. Considering Darwin unit values have fallen 44% since peaking in May 2010, the high rate of loss on resales should come as no surprise; in fact Darwin unit values are back to the same level they were in February 2005. Darwin house values haven’t fall any where near as much, down 11% since peaking.  
Regional Western Australia has recorded the second highest level of loss making resales for units (56.7%) followed by Perth at 47.8%. Both regions have seen unit values fall substantially more than house values. Since peaking in January 2008, regional WA unit values are down 47.5% and are now back to levels seen in 1988. In Perth, unit values are 18.2% lower after peaking in July 2013 and are now worth the same value as they were in May 2006.
Amongst the capital cities, Brisbane also stood out for a high rate of loss making unit resales, with 29.2% transacting at a gross loss over the quarter compared with only 4.1% of houses selling at a gross loss. Brisbane unit values are back to where they were in August 2007 after declining by 10.8% from their 2008 peak.  
The lowest rates of loss making unit resales were in those regions where unit values have shown more buoyant conditions. Hobart recorded the lowest portion of loss making unit resales, with only 2.9% reselling at a gross loss over the June quarter. Hobart unit values are at a record high after recording solid capital gains over the past few years. It was only five years ago, after a long period of weak housing market conditions, when 25% of Hobart units were reselling at a gross loss.  
The Sydney unit market was showing the second lowest proportion of loss making unit resales over the June quarter. Despite rising levels of unit supply, only 3.5% of Sydney units resold at a gross loss over the quarter. Unit values are down 2.6% since peaking in November last year, and values remain 43% higher relative to five years ago. With a recent history of such strong capital gains, the vast majority of Sydney unit owners are still in a positive value position relative to their purchase price, however as values continue to slip lower and supply levels rise, we are likely to see loss making resales rise.
Click <a href="https://www.propertyobserver.com.au/images/2018/9/24/tim%20lawless%201.jpeg" target="_blank">here</a> to enlarge
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There are a variety of factors that could be contributing to the higher proportion of loss making sales across the unit market. 
For starters, units are more likely to be owned by investors. Around 68% of units are investor owned, 51% of townhouses are owned by investors and only 22% of houses.  CoreLogic Pain and Gain data shows investor owned dwellings have a higher propensity to resell at a loss which is probably attributable to the fact that investors can take advantage of taxation benefits such as offsetting their losses against future capital gains.  
Unit markets can be more prone to oversupply. This trend has been evident across the Brisbane and Melbourne inner city markets to different extents.  Focusing on some of the key inner city unit markets, Brisbane’s inner city recorded 32% of unit resales at a loss over the quarter and Melbourne’s inner city recorded 22% at a loss. Unit construction has been winding down across Queensland since late 2016, but remains at record levels across Victoria and close to record highs in New South Wales. With unit values now falling in Sydney and Melbourne and the pipeline at, or close to record highs, its likely that loss making resales will diverge further in these markets.
There is also the factor of the underlying land value. Even though dwelling values are sliding in some markets, land prices have generally held firm or continued to trend higher.  Detached houses have a stronger relationship with land values which is likely contributing to the long run trend of higher capital gains for houses relative to units.
Click <a href="https://www.propertyobserver.com.au/images/2018/9/24/tim%20lawless%202.jpg" target="_blank">here</a> to enlarge
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Tim Lawless heads up the CoreLogic RP Data research and analytics team
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Unit owners are more likely to record a loss at sale: Tim Lawless

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EXPERT OBSERVER
The seasonal surge in listing numbers is well underway, with fresh listings being added to the market up 16% relative to the end of winter, however, despite the upswing in new listings, fresh stock additions are tracking almost 4% lower than the at the same time a year ago to be at their lowest seasonal level since 2012. 
The low level of new listing numbers can be attributed to weak vendor confidence; no surprise given housing market conditions have weakened and selling conditions have become more challenging.
<a href="https://www.propertyobserver.com.au/images/2018/10/19/stock%20level%201.jpg" target="_blank">Click here to enlarge</a>.
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Although freshly advertised stock is low, total advertised listing numbers have been trending higher as the rate of absorption slows. In fact, if the current trend continues, we will see the number of properties available for sale exceed the recent 2012 peak in total advertised stock levels. Total listing numbers are 10.2% higher than year ago and at their highest level for this time of the year since 2012.
The rise in total listing numbers isn’t due to a panicked surge in new listings. This is more about less demand which is causing a rise in relisting’s along with longer selling times and fewer successful sales at auction.
 
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The typical capital city dwelling sold by private treaty is now taking 53 days to sell compared with 42 days a year ago and discounting rates have risen to an average of 6.5%, up from 6.0% a year ago.
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More stock means more choice for buyers and harder selling condition for vendors – essentially abuyers’ market. Buyers have little sense of urgency under these conditions; they can negotiate hard, take their time to make a purchase decision, and if they feel a property price doesn’t reflect fairvalue, they can easily move onto the next property option.
Click here <a href="https://www.propertyobserver.com.au/images/2018/10/19/stock%20level%204.jpg" target="_blank">to enlarge. </a>
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With so much competing stock on the market, vendors will need to be reasonable with their pricing expectations and ensure their marketing campaign is as effective as possible in order to stand out from other stock for sale.
Tim Lawless is the national research director of CoreLogic RP Data and can be contacted<a href="https://blog.corelogic.com.au/author/timlawless/" target="_blank"> here.</a>
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Buyers back in the driver's seat as stock levels surge to highest levels since 2012

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Overall, it’s hard to see a scenario where Australian housing values could fall off a cliff.
For this to happen we would need to see a material about face in labour market conditions, a global shock or a material rise in interest rates– none of which seems to be a likely outcome at the moment.
Without a doubt, housing risks are heighted relative to a year ago. Dwelling values are slipping lower nationally (down 2% since peaking in September last year), mortgage rates are edging higher (up by around 15 basis points from three of the four major banks announcing a rate rise in September) and mortgage arrears have moved off their record lows (but still only around 0.6% of all mortgages are 90+ days in arrears). All this against a backdrop of record high levels of household debt (the ratio of disposable income to household debt reached 190% in March this year), increasing levels of housing supply and rising domestic and global uncertainty.
It should come as no surprise that some commentators are forecasting a substantial reduction in dwelling values. We saw similar forecasts during previous downturns from the likes of Steven Keen, Harry Dent and Jeremey Grantham as well as many others. The most recent dire prediction to get mainstream airplay was from Martin North predicting a 40-45% fall in dwelling values; albeit with only a 20% chance of this occurring. Since airing on 60Minutes, the segment titled ‘Bricks and Slaughter’ has seen the two primary experts featured, Martin North and Louie Christopher, clarifying their televised comments which were apparently presented in an unbalanced context: a presentation of the worst case scenario with no regard for the most likely outcome.
If we look at the current downturn in Australian housing, the trajectory of decline is actually quite unremarkable.
Australia’s largest housing market, Sydney, has seen values fall by 5.6% sincepeaking in July last year; a trajectory that is straight down the middle of previous downturns. During the GFC, Sydney dwelling values fell by 7.0% in the space of twelve months, and the downturn before that (2003-2006) saw values fall 7.1% over the same number of months.
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Australia’s second largest city, Melbourne, has seen values falling since November last year. Since that time the market is down a cumulative 3.5% and the descent has generally been milder relative to previous downturns.
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Even in markets where values have been falling consistently for more than four years on the back of a material weakening in economic and demographicconditions, we haven’t seen values fall by anywhere near 40%. Perth dwellingvalues peaked in 2014 and have fallen by 12.6% and in Darwin where conditions have been even tougher, dwelling values are down 21.8%.
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Recently released housing value forecasts from Moody’s Analytics certainly paints a less gloomy picture of housing markets over the coming years. While, growth is forecast to be subdued relative to previous years, the forecast is for a relatively mild downturn, with national house and unit values returning to mild positive annual growth by the middle of 2019.
Click here <a href="https://www.propertyobserver.com.au/images/2018/9/21/CORELOGIC%203.jpg" target="_blank">to enlarge.</a>
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The Moody’s Analytics forecasts are based on an econometric model whichuses CoreLogic’s Hedonic Index data as a base to forecast from. Their upbeat assessment of dwelling values is based on rising business investment, particularly in the non-mining sector, a rise in infrastructure spending, above trend jobs growth, and ongoing low interest rates.
Click here <a href="https://www.propertyobserver.com.au/images/2018/9/21/CORELOGIC%204.jpg" target="_blank">to enlarge.</a>
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Of course the outlook for housing conditions is varied across the regions. Bythe end of 2019, Moody’s is expecting every capital city except Hobart (-2.4%) to record a positive annual change in house values, with year on year rises ranging from 4.5% in Canberra and Adelaide to a 0.9% rise in Perth dwelling values.
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Forecasting the movement in asset values is challenging at the best of times. With so much uncertainty at the moment it’s even harder. Several wildcards remain that could have a negative impact on the direction of housing values.
Households are more sensitive than ever to interest rate movements due to the record level of household debt. Roughly, 70% of household debt is housing related, which implies small changes to mortgage rates could have an amplified impact on household balance sheets. Further out of cycle movements in mortgage interest rates could have a negative impact on the market. On the flipside, if the RBA decides to cut the cash rate further (a possible scenario of economic conditions weakened and housing price falls accelerated), this would likely see a rise in housing activity and help to place a floor under housing prices.
There is also the potential for changes to property taxation policies that could have a further dampening effect on investment demand. Based on the value of new housing finance commitments, investors still comprise around 41% of mortgage demand, down from 55% in mid-2015. Investor concentrations remain well above their long term averages across New South Wales (49% of housing finance commitments) and Victoria (41% of housing finance commitments), implying Sydney and Melbourne would have more to lose if investor activity were to drop more substantially. Investors are already being disincentivised by falling prices, mortgage rate premiums and low rental yields; additional disincentives from tax reform could see demand reduce further, creating some slack in the overall demand composition for Australian housing.
In balance, even with mortgage rates edging higher, we are still in the lowestmortgage rate environment since the 1960’s. Population growth remainsstrong and maintaining a consistent migration policy seems to have support from both sides of politics which will continue to support demand for housing. Labour markets are reasonably healthy with unemployment holding at 5.3% and likely to trend lower, underemployment at the lowest rate since May 2014 and jobs growth above the long term trend.
Overall, it’s hard to see a scenario where Australian housing values could fall off a cliff. For this to happen we would need to see a material about face in labour market conditions, a global shock or a material rise in interest rates –none of which seems to be a likely outcome at the moment.
TIM LAWLESS heads up the CoreLogic RP Data research and analytics team and can be contacted<a href="https://blog.corelogic.com.au/author/timlawless/" target="_blank"> here.</a>
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Is the property market really all that bad? CoreLogic's Tim Lawless

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Higher priced properties in Sydney and Melbourne is not the only obstacle stopping people from entering these markets.
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Varying from state to state, another factor contributing to the high entry cost to housing is Stamp Duty, particularly in Australia’s largest two capital cities.
Levied by each state and territory and payable by the receiver when a property is transferred, stamp duty varies remarkably across the states and territories based on the price of the property, the type of buyer (owner occupier / first home buyer / investor) and the type of property. 
CoreLogic head of research Tim Lawless said, “Calculating how much stamp duty is applicable on a property purchase can be confusing due to the significant differences regionally, but also due to the complexity of rules, concessions and limits that are applied to the calculation of stamp duty.” 
Based on the median dwelling value across each capital city, stamp duty estimates can range from a whopping $32,680 in Melbourne to a modest $9,000 in Brisbane.
<h3>Median dwelling value</h3>
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Mr Lawless said, “Even though the median dwelling value is $200,000 higher in Sydney compared with Melbourne, the cost of stamp duty on the median valued home is actually slightly lower in Sydney, at $31,763, due to higher stamp duty rates in Victoria.”
<h3>Estimated stamp duty payable on median value dwelling</h3>
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In some states, first-time home buyers can be offered substantial concessions on stamp duty; however there is generally an upper limit. 
For example, first home buyer property transactions in Victoria with a price tag of $600,000 or less will enjoy a 50% reduction on their rate of stamp duty. 
In Queensland, first home buyers purchasing a property priced less than $550,000 can realise a discount of more than $8,000.
Stamp duty rates can also be higher for investors. 
Surprisingly, Mr Lawless observed that New South Wales, which is the state with the largest proportion of investors, does not charge a premium rate of stamp duty on this segment of the market.
The three largest states also charge a stamp duty premium on property purchasers by foreign buyers.
He said, “Because stamp duty costs are percentage based, as dwelling values move higher, stamp duty costs can rise disproportionately faster due to bracket creep. 
Over the past five years dwelling values in these two cities have increased by 62% and 38% respectively which implies at least a commensurate rise in stamp duty costs in these cities.
The high transactional costs associated with housing are likely to be one factor that is contributing to a slowdown in the number of sales across the country.” 
While stamp duty is generally the largest transactional cost associated with buying, there are other costs such as building and pest inspections, conveyancing, removalists and more that also need to be factored in and are likely to be dampening participation in the housing market. 
Mr Lawless said, “Add to this the fact that most lenders will be seeking a 20% deposit and the barriers to entry become even more substantial.”
For state governments, stamp duty is one of the largest revenue sources. 
In the 2014-15 financial year, state and local government taxation revenue was recorded at $89.278 billion having increased by 7.0% over the year. 
The taxation revenue was comprised of $45.203 billion or 50.6% from property related taxes (mostly stamp duty and municipal rates). 
While total tax revenue increased 7.0% over the year, property tax revenue increased by 10.5% highlighting that property taxes are the largest source of taxation revenue for state and local governments and are rising at a rapid pace.
Mr Lawless said, “If transaction numbers across the housing market continue to trend lower, state governments are likely to encounter a budget hole as stamp duty revenue falls.   
For this and associated reasons, we may find state governments become more serious about considering a broader based land tax that is applicable to all property owners rather than a stamp duty that is payable only across the small percentage of properties that transact each year.”
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Stamp duty an obstacle for first home buyers entering the market

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Sydney’s housing market is showing signs of a controlled slowdown, according to CoreLogic’s latest July update.
The property data firm says that clearance rates are trending lower and time on market is starting to edge upwards.
For more information see the video below:
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Sydney housing market's controlled slowdown update: Tim Lawless

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Brisbane’s housing market capital gains is subdued, but sustainable, according to CoreLogic’s latest update report.
The property data firm says that rise in house values compensating a fall in unit values takes Brisbane’s annual growth rate into 2%.
For more information see the video below:
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Tim Lawless

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