One of North Sydney's best-known commercial buildings could become hundreds of new homes, with insurance giant Zurich Australia lodging a State Significant Development Application (SSDA) to transform 5 Blue Street into a mixed-use residential development above North Sydney Station.

Rather than demolishing the existing building and starting again, Zurich is proposing an adaptive reuse project that would convert the landmark office building into a 15-level residential development delivering 62 apartments, 86 affordable co-living dwellings, activated retail and significant upgrades to the Blue Street Plaza.

The proposal reflects a growing trend of commercial property owners repositioning ageing office assets into residential housing as Sydney grapples with housing supply shortages and changing workplace demand.

<img alt="Zurich" data-entity-type="file" data-entity-uuid="0bba7d12-06dc-4375-aad7-238c94b21ac5" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-07-22%20at%2010.42.05%E2%80%AFAM.png?VersionId=NJl5oLAEBDGuPmY3RnyliKODjMc8lvRh" />

Located directly above North Sydney Metro and train station, the 3,051 sqm site occupies one of the most strategically positioned parcels of land on Sydney's Lower North Shore.

Designed by fjcstudio, the proposal seeks to retain and adapt much of the existing structure while creating a contemporary residential address that better connects with the public domain surrounding North Sydney Station.

The application proposes two basement levels, ground floor retail, affordable co-living accommodation across the podium levels, and apartments above, while preserving and enhancing the publicly accessible Blue Street Plaza.

Rather than pursuing maximum apartment numbers, Zurich has opted for a housing mix heavily weighted towards larger owner-occupier residences.

The proposal includes 62 build-to-sell apartments comprising 12 one-bedroom, 19 two-bedroom, 29 three-bedroom apartments and two premium penthouses. It also incorporates 86 affordable co-living dwellings, which would be managed in perpetuity by a Community Housing Provider.

That balance between traditional apartments and affordable housing reflects the NSW Government's push to increase housing diversity around major transport infrastructure.

The proposal has been lodged concurrently with a rezoning application, with Zurich arguing the site is ideally positioned to support additional housing given its immediate proximity to public transport, employment and services.

"The proposal aims to respond to the housing challenges facing Sydney through the delivery of diverse housing types in a highly accessible location," the design report by fjcstudio states. It also seeks to improve pedestrian amenity through upgrades to Blue Street Plaza while creating a high-performing residential building that responds to the surrounding context.

<img alt="Zurich" data-entity-type="file" data-entity-uuid="36082e15-c636-4481-bb68-5a5f6443fe39" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-07-22%20at%2010.41.36%E2%80%AFAM.png?VersionId=5P6VD.fvmqjQfIG3TWWMRXxQWiQBjeFB" />

Rather than replacing the commercial building, fjcstudio has developed a design that works with the existing structural framework above the rail corridor, an approach that significantly reduces demolition while allowing the site to be repositioned as a mixed-use residential precinct.

The existing structural constraints have informed much of the building's design, including its relationship with Blue Street and surrounding public spaces.

The building has been designed as a slender tower rising above a clearly defined podium, with vertically expressed façades intended to reduce the perceived bulk while reinforcing North Sydney's emerging skyline.

According to fjcstudio, the architectural language responds directly to the surrounding commercial towers while maintaining a finer grain expression more closely aligned with the neighbouring Lavender Bay streetscape.

The tower incorporates articulated façade elements, landscaped podium edges and recessed upper levels to soften its appearance and improve pedestrian amenity below.

A significant component of the proposal is the revitalisation of Blue Street Plaza.

The existing public space has long served as one of the primary pedestrian connections between North Sydney Station, Greenwood Plaza and Blue Street, yet its role is expected to become even more important following the opening of Sydney Metro.

Zurich's proposal seeks to strengthen that role by improving landscaping, introducing new retail frontages, enhancing pedestrian permeability and creating more active edges throughout the day and evening.

Ground floor retail would wrap the plaza, while separate residential and co-living entries have been designed to improve wayfinding without reducing street activation.

Landscape design has been integrated throughout the podium and public realm, softening what is currently one of the most heavily urbanised parts of North Sydney.

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fjcstudio has carefully oriented apartments towards Sydney Harbour and the CBD while using privacy blades and articulated façades to minimise overlooking between neighbouring buildings.

Large framed openings along the western elevation maximise harbour outlooks, while the eastern apartments have been angled towards the south-east to improve privacy from neighbouring development.

The project forms part of the continuing transformation of North Sydney from a predominantly commercial CBD into a genuine mixed-use city centre.

Since the completion of Victoria Cross Metro Station, developers have increasingly shifted their attention towards residential projects capable of leveraging the area's unparalleled transport connectivity.

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FiveX recently lodged plans for a 61-storey, 490-apartment tower that would become one of the tallest residential buildings in North Sydney if approved.

Aqualand continues to expand its Lower North Shore presence following the completion of AURA on Walker Street and its recent St Leonards and Roseville proposals.

Developers are also progressing projects throughout Walker Street, Miller Street and the Victoria Cross precinct as demand for well-located owner-occupier apartments continues to strengthen.

Joel Robinson

First look: Zurich targets North Sydney office conversion with 148-unit proposal above Metro station

Busy developer Aqualand Prestige has formally taken the next step in its expansion across Sydney's Lower North Shore, lodging a State Significant Development Application (SSDA) for its long-held Archer Street site in Chatswood.

The application covers <a href="https://www.apartments.com.au/new-apartments/51-55-archer-street-chatswood-nsw-2067">51-55 Archer Street</a>, a 1,767 sqm amalgamated site on the eastern edge of the Chatswood CBD, where the developer is seeking approval for a 45-level mixed-use tower delivering 114 apartments, including a significant affordable housing component, alongside retail, commercial space and six basement levels of parking.

The SSDA marks the latest milestone for a project Aqualand has been quietly progressing over the past two years. The developer first secured the site for its Aqualand Prestige platform before undertaking an alternative design excellence process with PTW Architects, ultimately avoiding a formal design competition through the Housing Delivery Authority pathway.

The proposal has evolved considerably from Aqualand's original concept. The revised scheme has been designed around larger owner-occupier product, with an unusually high proportion of three and four-bedroom apartments, targeting the more affluent buyer profile, and downsizer, emerging across the North Shore.

<img alt="Archer St" data-entity-type="file" data-entity-uuid="0171204c-5811-41b5-9b09-2335d1b7c3d0" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-07-22%20at%208.52.48%E2%80%AFAM.png?VersionId=6YTuxfq.puZo7k2wbfgemcO5K3QfXYGQ" />

The 114-apartment mix comprises six studios, 27 one-bedroom apartments, 18 two-bedroom apartments, 50 three-bedroom residences and 13 four-bedroom homes. A quarter of the building will be dedicated to affordable housing, well above the mandated 15 per cent&nbsp;

PTW has structured the building vertically, with affordable housing across levels one to six, premium apartments through levels seven to 31, duplex skyhomes on klevels 32 to 43, a penthouse on level 44, and a rooftop plant level above. Six basement levels will provide resident parking and servicing.

The tower is proposed to reach approximately 154 metres, placing it among a growing collection of residential high-rises transforming Chatswood's skyline.

Rather than competing purely on height, PTW says the design has been driven by creating a slimmer tower capable of delivering significantly larger apartments.

"The primary objective of this project was to create a distinctive building that stands out from the recently approved or built structures in the Chatswood area," the design report states, noting the structural efficiency allows greater investment into apartment quality and resident amenity.

Residents would have access to more than 450 sqm of communal open space including landscaped gardens, swimming pool, rooftop entertaining areas, fitness spaces, community gardens, children's play areas and barbecue facilities.

A major focus of the design has been the public domain.

The ground plane has been opened up through landscaped terraces inspired by Willoughby's sandstone ridges, with native planting, public seating, artwork, retail activation and a series of gathering spaces intended to soften what has traditionally been a hard commercial streetscape.

The landscape strategy references Blue Gum forests once common throughout the area, while incorporating Indigenous storytelling, public art and lighting installations to strengthen the connection to Country.

Chatswood has been one of Sydney's busiest apartment markets over the past 12 months, with a steady pipeline of both new project launches and fresh development applications.

Hyecorp recently launched Celine, a 122-apartment development just along Archer Street, while Changfa and Huirong Group are progressing The Anderson, an 84-apartment project on Anderson Street.

Develotek recently secured approval for a 101-apartment tower on Pacific Highway, while Tian An LFD received the green light for Hammond Greens, its apartment development on the edge of the Chatswood Bowling Club.

Commercial property developer FiveX is also making its move into the residential market. Last month it lodged plans for a 61-storey tower with 490 apartments, which, if approved, would become one of the tallest residential buildings in Chatswood.

Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/first-look-fivex-targets-chatswood-skyline-with-61-storey-tower-after-north-sydney-plans">First look: FiveX targets Chatswood skyline with 61-storey tower after North Sydney plans</a>

Aqualand is also expanding its development pipeline following the launch of its luxury residential brand, Aqualand Prestige. The developer has delivered a string of high-end apartment projects across Sydney's affluent suburbs over the past decade, most recently AURA by Aqualand on Walker Street in North Sydney.

[smartcode_project:default project_id=30959 project_image_fid=292863]

It has since quietly assembled its next wave of projects.

Earlier this year Aqualand launched Boronia in Roseville, a boutique 111-apartment development on Larkin Street. The project is one of the first significant apartment developments to launch in the suburb ahead of what is expected to become one of Sydney's most active new housing precincts under the NSW Government's Low and Mid-Rise Housing reforms, which allow greater density around train stations.

[smartcode_project:default project_id=152095 project_image_fid=373685]

The developer has also lodged plans for a two-tower, 413-apartment development on Herbert Street in nearby St Leonards, further strengthening its presence across the Lower North Shore.

Beyond that, Aqualand remains behind the final stage of Barangaroo, where plans will deliver a five-hectare mixed-use precinct comprising new homes, retail, hospitality and community facilities, alongside a new Metro entrance and more than two hectares of public open space, completing the Barangaroo precinct.

Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/central-barangaroo-development-takes-big-step-with-concept-proposal-approval">Central Barangaroo development takes big step with concept proposal approval</a>

Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/first-look-aqualand-joins-st-leonards-apartment-party">First look: Aqualand joins St Leonards apartment party</a> 
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First look: Aqualand pushes ahead with Chatswood apartment tower as SSDA lodged for Archer Street

Mass timber is becoming an increasingly popular construction material in apartment developments, but Adelaide developer <a href="https://www.apartments.com.au/developers/otello">Otello</a> is taking the approach a step further.

At its new <a href="https://www.apartments.com.au/new-apartments/flowe-bowden-18-gibson-street-bowden-sa-5007">Flowe Bowden</a> development, the exposed cross-laminated timber (CLT) structure isn't just about reducing the building's environmental footprint. It also forms the foundation of a broader wellness strategy, influencing everything from indoor air quality and natural materials to the way residents move through and experience the building.

The 115-apartment mixed-use development, designed by Melbourne-based architecture practice Fieldwork, will occupy a prominent island site opposite Bowden Village Reserve, combining one, two and three-bedroom apartments with retail and a dedicated wellness destination.

[smartcode_project:default project_id=152022 project_image_fid=375528]

Wellness isn't confined to a gym or shared resident facility at Flowe. Instead, Fieldwork embedded the concept into the building itself.

The development has been split into two residential wings connected by a naturally ventilated central breezeway, replacing traditional enclosed corridors with open-air walkways that improve natural light, encourage cross ventilation and create more opportunities for neighbourly interaction.

"Rather than treating wellness as something that only happens on the ground floor, our response integrates it throughout the building, which led us to ask what it really means to design a healthy building," Fieldwork Director Quino Holland said.

[smartcode_project:default project_id=152022 project_image_fid=375531]

The building's architecture also reflects Bowden's industrial heritage. The lower podium references the area's historic brick and sandstone buildings, while the upper levels transition to exposed CLT, allowing the timber structure to become a defining feature throughout the apartments and shared spaces.

The use of mass timber sits alongside a range of sustainability initiatives, including a fully electric, gas-free design, rooftop solar and a targeted 5 Star Green Star rating.

[smartcode_project:default project_id=152022 project_image_fid=375524]

Inside the residences, the focus remains on natural, durable materials. Blackbutt engineered timber flooring, exposed CLT ceilings, porcelain surfaces and warm timber joinery create a calming interior palette, while low-VOC finishes and responsibly sourced materials have been selected to improve indoor air quality.

Kitchens have been designed as the centrepiece of each apartment, featuring porcelain island benchtops, timber-look cabinetry and brushed steel tapware, with layouts that maximise natural light and ventilation.

[smartcode_project:default project_id=152022 project_image_fid=375530]

The more traditional interpretation of wellness comes in the form of Level Eleven, a two-storey wellness club spanning the ground floor, mezzanine and first floor.

The facility will include a gym, yoga and reformer Pilates studios, Finnish and infrared saunas, magnesium hot and cold plunge pools, and dedicated recovery spaces. Unlike many residential wellness facilities, Level Eleven will also operate commercially, allowing the broader Bowden community to access the venue while giving residents exclusive membership benefits.

The ground floor has also been designed around everyday living. A café overlooking Bowden Village Reserve will activate the street frontage, while a bike workshop with tool storage, co-working space and dog wash has been incorporated to support daily routines and encourage interaction between residents.

"Flowe brings together my two biggest passions, creating places and creating healthier lives," Otello founder Daniel Harris said.

"We wanted to create something Adelaide hasn't seen before, a genuinely healthy building, where the way you live is lifted without even trying."

Flowe is positioned directly opposite Bowden Village Reserve and within walking distance of Bowden Railway Station and the Adelaide Entertainment Centre, placing future residents just minutes from the Adelaide CBD while remaining connected to one of the city's most established urban renewal precincts.

[smartcode_project_cta:default project_id=152022]

Otello launches wellness-focused Flowe Bowden with Adelaide-first mass timber apartment design

Not all apartment amenities are immediately visible.

Swimming pools, gyms, rooftop terraces and residents' lounges have long featured on buyers' wishlists, but as the way Australians live has changed, so too have the features that make apartment living more convenient.

Increasingly, buyers are placing value on the practical aspects of day-to-day life. Fast internet, EV charging, secure bike storage, flexible workspaces and parcel management are becoming just as relevant as lifestyle amenities, reflecting changing habits and expectations.

Online shopping has been one of the biggest drivers of that shift.

Australians spent a record $82.6 billion shopping online in 2025, with almost one in every four retail dollars now spent digitally, making parcel deliveries a routine part of everyday life rather than an occasional convenience.

For apartment residents, however, receiving those deliveries isn't always straightforward.

Without someone home to accept a parcel, deliveries can be redirected to a nearby Post Office, left in building foyers or common areas, or require building management to temporarily store packages. As apartment living continues to grow across Australia's cities, parcel management has become an increasingly important consideration for both residents and developers.

Australia Post's Parcel Locker network is one response to that shift.

<iframe allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" allowfullscreen="" frameborder="0" height="315" referrerpolicy="strict-origin-when-cross-origin" src="https://www.youtube.com/embed/KPZ9j5FRdsQ?si=Qztc1dNP3ZvEIUhb" title="YouTube video player" width="560"></iframe>

Rather than relying on home delivery, eligible parcels can be directed to a nominated Parcel Locker, where they're securely stored until collected. Once a parcel arrives, residents receive a notification through the AusPost app or SMS and can retrieve it using a one-time code or QR code at a time that suits them.

The network has expanded to more than 1,500 locations nationwide, with Parcel Lockers positioned at Post Offices, shopping centres, supermarkets, transport hubs and, increasingly, within or alongside residential developments.

That growing presence reflects a broader change in how apartment buildings are being planned.

Developers are increasingly considering the operational side of apartment living alongside traditional lifestyle amenities. Just as secure mailrooms, bicycle storage and EV charging have become more common inclusions, parcel management is emerging as another feature that supports everyday convenience.

It also helps preserve the arrival experience within a building. Carefully designed lobbies and communal spaces can quickly become cluttered when deliveries accumulate, while secure parcel solutions reduce the likelihood of missed deliveries or parcels being left unattended.

For buyers comparing apartments, these everyday details are becoming part of the decision-making process.

Location, floorplans and finishes remain fundamental, but the features that simplify daily life are carrying greater weight than they once did. As online shopping continues to shape consumer behaviour, secure parcel delivery is increasingly becoming another amenity worth looking for.

Parcel delivery is joining the apartment amenity checklist

Inca Property Group has lodged a State Significant Development Application (SSDA) for Dawn, a 53-apartment oceanfront development overlooking Mona Vale Beach.

The proposal, at 35-39 Darley Street East, would replace an existing 18-apartment strata building with a new owner-occupier-focused development comprising 53 two and three-bedroom apartments, including nine affordable built-to-rent residences delivered under the State's infill affordable housing scheme.

Positioned on a 2,679 sqm elevated site around 280 metres from Mona Vale Beach, the development has been designed to maximise panoramic ocean views while responding to the site's sloping topography.

<a href="https://www.apartments.com.au/developers/inca-property-group">Inca Property Group</a> Managing Director Josh Thompson said the State Significant pathway provided greater certainty for projects of this scale.

"This State Significant pathway gives the team real certainty to progress <a href="https://www.apartments.com.au/new-apartments/dawn-35-39-darley-street-east-mona-vale-nsw-2103">Dawn</a> through to completion," Thompson said.

"It allows us to acquire a one-off site, design it carefully and deliver the right offering for the suburb, assessed by the NSW Government's planning department."

The project is one of the first developments in the area to be assessed under the NSW Government's Low and Mid-Rise Housing policy, with the site sitting on the edge of the policy's designated inner area.

The proposal includes three basement levels providing 124 car spaces, alongside a range of resident amenities including a swimming pool, gym, sauna, wellness facilities and private plunge pools for selected ground-floor and penthouse apartments.

<img alt="Dawn" data-entity-type="file" data-entity-uuid="fc1a1daf-0ce4-4f12-9076-b1fa553c7a91" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-07-21%20at%208.42.11%E2%80%AFAM.png?VersionId=4GZ9h.gpNkTljbxyAET8Jfhv51XUamDm" />

Thompson said Dawn had been designed specifically for owner-occupiers and downsizers, a buyer profile that has driven demand across Inca's recent Upper North Shore developments.

"The majority of buyers in our recent North Shore projects have been downsizers, and we are learning exactly what this market is looking for. Beyond the location itself, we have included resort-style amenities to deliver a genuine lifestyle offering," Thompson said.

Located within walking distance of Mona Vale Beach, the town centre, Mona Vale Golf Club and the Royal Motor Yacht Club, Dawn represents Inca's first Northern Beaches project following the sell-out of Tara on Park in Waitara and Ellis Residences, currently under construction in St Ives.

Construction will be undertaken by Inca's in-house construction arm, GOP Constructions.

Dawn is the latest major apartment proposal for Mona Vale, with the suburb emerging as one of the key beneficiaries of the NSW Government's new Low and Mid-Rise Housing policy.

New developer One Living, led by industry veteran Joseph Scuderi, recently secured a site on Mona Vale Road, on the border of Mona Vale and Pymble, where it is planning around 140 apartments.

IPM is also planning its third project in Mona Vale, significantly increasing the scale of its previous developments with an 82-apartment proposal at <a href="https://www.apartments.com.au/new-apartments/159-167-darley-street-west-mona-vale-nsw-2103">159-167 Darley Street West</a>, opposite Bayview Golf Course and less than 800 metres from Mona Vale town centre.

Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/one-living-enters-sydneys-new-apartment-market-with-northern-beaches-site-acquisition">One Living enters Sydney's new apartment market with Northern Beaches site acquisition</a>

Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/first-look-ipm-plans-third-mona-vale-project">First look: IPM plans third Mona Vale project</a>

First look: Inca eyes Mona Vale with State Significant DA for Dawn apartments

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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A few weeks agowe highlighted that the number of dwellings approved for construction reached an all-time high over the year to November 2014 with almost 200,000 approvals registered nationally. 
<a href="https://blog.corelogic.com.au/2015/01/record-high-number-dwelling-approvals-november-2014/" target="_blank"> Over the year house approvals were up 3.6%</a> compared with an 18% increase in the number of multi-unit dwellings approved.
<a href="https://blog.corelogic.com.au/wp-content/uploads/2015/01/Chart-1.jpg" rel="wp-prettyPhoto[g4190]"><img class="aligncenter size-full wp-image-4147" src="https://blog.corelogic.com.au/wp-content/uploads/2015/01/Chart-1.jpg" alt="Chart 1" width="500" height="181"></a>
The record level of housing supply in the pipeline comes at a time when population growth (ie housing demand) is winding down and some of the heat is coming out of the housing market.
A deep dive on the Australian Bureau of Statistics approvals data pinpoints exactly where the bulk of the development pipeline from the past year is geographically concentrated. 
At a broad level we can see the majority of new dwelling approvals are located in Melbourne where 44,633 new dwellings have been approved for construction over the 12 months ending November 2014.  Melbourne dwelling approvals accounted for 23% of all approvals nationally and 31% of all approvals across the combined capital city metro areas.
Sydney was close behind, recording just over 39,000 new dwelling approvals over the year.  67% of all approvals across the Sydney market were for multi-unit dwellings (the highest proportion of apartments approved of any capital city).
<a href="https://blog.corelogic.com.au/wp-content/uploads/2015/01/Table-national-approvals-across-cap-city-and-ros-regions.jpg" rel="wp-prettyPhoto[g4190]"><img class="aligncenter size-large wp-image-4199" src="https://blog.corelogic.com.au/wp-content/uploads/2015/01/Table-national-approvals-across-cap-city-and-ros-regions-580x399.jpg" alt="Table - national approvals across cap city and ros regions" width="580" height="399"></a>
While new housing supply should generally be viewed as  positive and a necessary factor in the Australian housing market and economy, areas where the approved supply pipeline are out of alignment with demand can offer up an element of risk. 
We recommend that prospective buyers factor supply levels into their housing market analysis and undertake additional research where they fear an area may be in oversupply or at least moving in this direction. 
The number of multi-unit dwellings, particularly in Melbourne and Brisbane are hovering around record highs.  Of course demand for this type of product is increasing but there are risks associated with too much new development of this product type, particularly given values are rising and population growth is slowing.
Eight of the top 20 SA3 regions, based on the number of dwelling approvals over the year to November 2014, are located in Melbourne; five are located in Perth, four in Sydney, two in Brisbane and one in Canberra.
<a href="https://blog.corelogic.com.au/wp-content/uploads/2015/01/Table-National-top-20.jpg" rel="wp-prettyPhoto[g4190]"><img class="aligncenter size-large wp-image-4208" src="https://blog.corelogic.com.au/wp-content/uploads/2015/01/Table-National-top-20-580x400.jpg" alt="Table National top 20" width="580" height="400"></a>
 
A state by state rundown on new housing supply begins on the next page. Please click below.
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The tables and maps below highlight exactly where the largest amount of new housing supply is in the pipeline.
<a href="https://blog.corelogic.com.au/wp-content/uploads/2015/01/Sydney2.jpg" rel="wp-prettyPhoto[g4190]"><img class="aligncenter size-large wp-image-4198" src="https://blog.corelogic.com.au/wp-content/uploads/2015/01/Sydney2-580x351.jpg" alt="Sydney2" width="580" height="351"></a>
<a href="https://blog.corelogic.com.au/wp-content/uploads/2015/01/Table-NSW.jpg" rel="wp-prettyPhoto[g4190]"><img class="aligncenter size-large wp-image-4201" src="https://blog.corelogic.com.au/wp-content/uploads/2015/01/Table-NSW-580x276.jpg" alt="Table NSW" width="580" height="276"></a>
Seven of the top ten SA3 regions showing the most dwelling approvals across Sydney have a strong bias towards multi-unit dwellings, with the Inner Sydney region topping the list at 2,631 new apartments approved over the twelve months to November 2014. 
Within the inner city region it is the Waterloo-Beaconsfield area that is attracting the most developer interest.  These suburbs account for 1,047 (or 41%) of the apartments being developed across the Inner Sydney SA3 region.  Several areas around Sydney’s inner ring are attracting very little in the way of densification over the past year. 
The Manly region has only recorded 48 new dwelling approvals over the past year and similarly, Leichardt has recorded only 65 new dwelling approvals.  Towards the outskirts of the city, the regions attracting the largest supply pipeline are Parramatta (1,558 new unit approvals over the past year and 119 house approvals) as well as the Bringelly-Green Valley region which is seeing an influx of new detached housing approvals (1,449).
 
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<a href="https://blog.corelogic.com.au/wp-content/uploads/2015/01/Melbourne2.jpg" rel="wp-prettyPhoto[g4190]"><img class="aligncenter size-large wp-image-4196" src="https://blog.corelogic.com.au/wp-content/uploads/2015/01/Melbourne2-580x351.jpg" alt="Melbourne2" width="580" height="351"></a>
<a href="https://blog.corelogic.com.au/wp-content/uploads/2015/01/Table-Vic.jpg" rel="wp-prettyPhoto[g4190]"><img class="aligncenter size-large wp-image-4206" src="https://blog.corelogic.com.au/wp-content/uploads/2015/01/Table-Vic-580x281.jpg" alt="Table Vic" width="580" height="281"></a>
Melbourne’s inner city tops the nation with the majority of new dwelling approvals, recording just over 5,000 new apartment approvals over the past year. 
The high approval reading comes after 3,725 apartments were approved in the same region over the previous year as well as 5,419 the year before that.  More than half of last year’s approvals across the Melbourne Inner City were located in the Melbourne CBD (2,418) followed by North Melbourne (682) and Docklands (657). 
Outside of the inner city, the majority of new dwelling approvals across the Melbourne metro area have been located in the outer fringes and are primarily detached dwellings.  The Whittlesea-Wallan region has recorded the second highest number of Greater Melbourne dwelling approvals over the twelve month period at 2,956 of which 83% were detached dwellings. 
The data shows that the densification taking place in the Melbourne housing market is very much focussed within the inner city core.
 
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The Brisbane Inner North SA3 region has recorded the third highest number of new dwelling approvals of all SA3 regions nationally over the 12 months to November 2014.  2,981 new apartment approvals were recorded over the year and 117 house approvals. 
The suburbs of Bowen Hills and Newstead comprise the majority of these approvals with 1,535 new apartments approved for construction over the twelve month period. 
The Inner City region also recorded a high number of multi-unit dwelling approvals, with 1,881 new apartments approved for construction over the year. 
Outside of the state capital, the regional city of Townsville recorded the third highest number of dwelling approvals across the state over the twelve month period, with 1,228 houses and 410 apartments. 
Interestingly, the resource-intensive regions of Mackay and Gladstone-Biloela, where market conditions have softened substantially, have also made it into the top ten for the state for new dwelling approvals over the year.
 
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<a href="https://blog.corelogic.com.au/wp-content/uploads/2015/01/Adelaide2.jpg" rel="wp-prettyPhoto[g4190]"><img class="aligncenter size-large wp-image-4191" src="https://blog.corelogic.com.au/wp-content/uploads/2015/01/Adelaide2-580x351.jpg" alt="Adelaide2" width="580" height="351"></a><a href="https://blog.corelogic.com.au/wp-content/uploads/2015/01/Perth2.jpg" rel="wp-prettyPhoto[g4190]"> </a><a href="https://blog.corelogic.com.au/wp-content/uploads/2015/01/Table-SA.jpg" rel="wp-prettyPhoto[g4190]"><img class="aligncenter size-large wp-image-4204" src="https://blog.corelogic.com.au/wp-content/uploads/2015/01/Table-SA-580x285.jpg" alt="Table SA" width="580" height="285"></a>
Slightly less than one third (31.3%) of all new dwelling approvals across Adelaide were for multi-unit dwellings over the twelve months ending November 2014, with the city having a clear preference for detached dwellings. 
The largest supply pipeline, based on approvals over the twelve month period, can be found in Onkaparinga where 1,103 new dwelling approvals were issued over the year.  Most of the approvals were at Seaford (418), Aldinga (164) and Christies Beach (132). 
The Charles Sturt region was the only other SA3 in South Australia to record more than 1,000 approvals over the year.
Article continues on the next page. Please click below.
 
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<a href="https://blog.corelogic.com.au/wp-content/uploads/2015/01/Perth2.jpg" rel="wp-prettyPhoto[g4190]"><img class="aligncenter size-large wp-image-4197" src="https://blog.corelogic.com.au/wp-content/uploads/2015/01/Perth2-580x351.jpg" alt="Perth2" width="580" height="351"></a>
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At a time when the Perth housing market is slowing down, new dwelling approvals have moved to historic highs. 
The SA3 region of Wanneroo ranks as number two nationally for dwelling approvals, with 3,406 new homes approved for construction over the twelve months to November 2014.  
The Swan region ranked second highest across Western Australia and 8th nationally with 2,557 new dwelling approvals.  The urban form of Perth housing continues to be mostly focussed on detached housing, with only 23% of new dwelling approvals being for multi-unit dwellings (only Hobart shows a lower proportion at 11%). 
With home value growth slowing and both sales volumes and rents falling, buyers of new homes, particularly if they are buying for investment purposes, should be cautious.
 
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<a href="https://blog.corelogic.com.au/wp-content/uploads/2015/01/Hobart2.jpg" rel="wp-prettyPhoto[g4190]"><img class="aligncenter size-large wp-image-4195" src="https://blog.corelogic.com.au/wp-content/uploads/2015/01/Hobart2-580x365.jpg" alt="Hobart2" width="580" height="365"></a>
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Despite recording the lowest number of dwelling approvals of any state or territory over the twelve months ending November 2014, dwelling approvals across Tasmania have been trending higher to reach their highest point since early 2012. 
The most significant level of approval activity over the twelve months to November last year was located in the north of the state at Launceston where 329 dwellings were approved for construction.
 
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<a href="https://blog.corelogic.com.au/wp-content/uploads/2015/01/Darwin2.jpg" rel="wp-prettyPhoto[g4190]"><img class="aligncenter size-large wp-image-4194" src="https://blog.corelogic.com.au/wp-content/uploads/2015/01/Darwin2-580x351.jpg" alt="Darwin2" width="580" height="351"></a>
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58% of Darwin dwelling approvals over the twelve months to November 2014 were for multi-unit dwellings, the highest proportion of apartment approvals outside of Sydney. 
The largest development pipeline, based on dwelling approvals over the twelve month period, was at Palmerston with 818 new dwelling approvals a majority of which were units.
 
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<a href="https://blog.corelogic.com.au/wp-content/uploads/2015/01/canberra2.jpg" rel="wp-prettyPhoto[g4190]"><img class="aligncenter size-large wp-image-4193" src="https://blog.corelogic.com.au/wp-content/uploads/2015/01/canberra2-580x366.jpg" alt="canberra2" width="580" height="366"></a>
<a href="https://blog.corelogic.com.au/wp-content/uploads/2015/01/Table-ACT.jpg" rel="wp-prettyPhoto[g4190]"><img class="aligncenter size-large wp-image-4200" src="https://blog.corelogic.com.au/wp-content/uploads/2015/01/Table-ACT-580x269.jpg" alt="Table ACT" width="580" height="269"></a>
The annual number of dwelling approvals has been trending lower across the Australian Capital Territory since early 2014 as housing market conditions broadly soften across the national capital. 
The Gungahlin region remains the most popular location for dwelling approvals across the Territory, with 2,160 new dwelling approvals over the twelve month period ending November last year. 
That figure is almost three times higher than the next most popular SA3 location, Cotter-Namadji, where 762 dwellings were approved for construction.
Buyers and developers of new stock should be cautious given that values, sales volumes and rental rates are currently falling in Canberra.
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Where are the housing supply pipelines? A state by state rundown

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The housing market is moving into the 2015 calendar year with some substantial momentum, with dwelling values 8.5% higher compared with a year ago across the combined capitals.  
The growth comes on a backdrop of slowing conditions though, with the annual rate of capital gain peaking early in the year at 11.5% over the twelve months ending April. 
While values are still rising at a healthy rate, at least at a high level and in trend terms, we anticipate that 2015 will see the housing market dynamic shift geographically. 
<ul>
<li>Sydney</li>
</ul>
Housing market conditions have been nation leading over the current cycle with dwelling values up by 31% over the cycle to date.  The rate of capital gain is slowing down though, after the annual rate of growth peaked in April last year at 16.7%. 
By the end of 2014 we expect the annual rate of growth will have slowed to approximately 12.5%.  We expect the trend towards a more sustainable rate of capital gain to continue over the 2015 due to natural affordability constraints that are becoming increasingly evident in the market, as well as a reduction in investor demand which will likely be attributable to the low yield environment as well as tougher investment lending requirements from the banking sector.
<ul>
<li>Melbourne</li>
</ul>
The Melbourne housing market has played second fiddle to Sydney’s rate of capital gain over the current growth cycle, with values moving a cumulative 17.6% higher by the end of November this year.  The rate of annual growth across the Melbourne housing market has been slowing since January when dwelling values had moved 11.9% higher over the 12 month period. 
By the end of 2014 we expect the annual rate of capital gain to have drifted back to approximately 8%.  This slowing trend is likely to continue through 2014 as investor demand is dampened by the low rental yield scenario as well as tighter finance controls around investment lending from the banking sector. 
New housing supply across the inner city area of Melbourne and the outer fringes has been sufficient when compared with population growth, which is also likely to soften the level of capital gains over the coming year.
<ul>
<li>Brisbane</li>
</ul>
Brisbane (along with Adelaide and Hobart) is one of only three capital cities where the annual rate of capital gain is likely to be higher this year than it was last year.  We are expecting the annual rate of capital gain to finish the year around the 7% mark, compared with a 5.1% capital gain over the 2013 calendar year. 
With the rate of capital gain holding relatively firm over the second half of 2014, fewer affordability pressures and better rental yields than Sydney or Melbourne, we are expecting growth in Brisbane dwelling values to outperform the capital city average over the coming year.
<ul>
<li>Adelaide</li>
</ul>
Despite the uncertainty in the local economy, the Adelaide housing market is likely to finish the 2014 calendar year with a higher rate of capital gain compared with the 2013 calendar year. 
We are expecting Adelaide values will have increased by approximately 3.5% in 2014 compared with a growth rate of 2.8% over 2013.  Transaction numbers have been rising over the second half of the year indicating a rise in buyer demand, affordability pressures are relatively tame and rental yields are higher than what can typically be found in Sydney and Melbourne. 
While we aren’t expecting values to surge across Adelaide in 2015, a steady market with values continuing to show a modest rise is the likely outcome.
<ul>
<li>Perth</li>
</ul>
The Perth housing market moved through the peak of its growth cycle in December 2013 when then annual rate of growth was recorded at 9.9%.  Since then the annual rate of growth has drifted substantially lower and we expect by the end of 2014 the annual rate of growth will be closer 1%.  
Population growth into Western Australia has slowed sharply which is reducing demand for housing at a time when there is a large amount of new detached housing approved for construction. 
Additionally, the previously strong Western Australian economy is progressively weakening as the pipeline of large infrastructure projects winds down.  Dwelling values are likely to continue their weak trend and may potentially end the next calendar year lower.
<ul>
<li>Hobart</li>
</ul>
The Hobart housing market has been the weakest of any capital city post GFC.  In fact, Hobart dwelling values remain 3.9% lower than what they were at the beginning of 2009. 
More recently, housing market conditions have started to improve across Hobart. Transaction numbers have recorded a sharp rise from a low base and dwellings show a remarkable level of affordability compared to other capital cities and gross rental yields are the second highest of any capital city after Darwin.
Dwelling values are likely to finish the 2014 calendar year about 6% higher, and as demand from lifestyle buyers continues to rise, we expect Hobart home values to continue their moderate trend higher during 2015.
<ul>
<li>Darwin</li>
</ul>
The Darwin housing market has been a solid long term performer, recording the highest rate of capital gain over the past decade across the capital cities.  Dwelling values have increased by 17.5% over the length of the current growth cycle, however growth in dwelling values has been trending lower over the second half of 2014. 
The 2014 calendar year is likely to see Darwin dwelling values increase by approximately 1.5%.  Prospects for further growth over 2015 are diminishing due to a wind down in the major infrastructure projects that are currently underway in Darwin. 
The Darwin housing market is still providing the highest gross rental yields of any capital city market, however it is likely investor demand will taper in line with capital growth.
<ul>
<li>Canberra</li>
</ul>
The National Capitals’ housing market saw a material slowdown over the second half of 2014 with dwelling values likely to finish the second half the calendar year approximately 1% lower. 
Uncertainty surrounding the local labour market, federal government job cuts and potentially an oversupply of housing are all factors that are likely to contribute flat to falling housing values during 2015.
<ul>
<li>Regionally</li>
</ul>
We are expecting ‘lifestyle’ markets to continue their bounce back in buyer demand and values.  At the same time, the downturn in commodity prices and mining related infrastructure spending is likely to continue to dampen housing markets across resource intensive regions.
Central to housing market performance will be the direction of interest rates.  There is growing debate that the next rates movement may be down rather than up.  A further reduction in the cash rate will bring mortgage rates even lower than their current record low settings. 
Theoretically, lower rates should provide a boost to housing market conditions, however, if this stimulus does transpire, it is likely to be balanced by pervasively low consumer confidence and softer labour markets which show unemployment is already at its highest level in a decade and forecast by Treasury to move higher over the coming months.
Additionally, the impact of the recent APRA announcement around investment lending may act to restrict the availability of finance to investors.  The banking sector will be under scrutiny to keep growth in investor loans at slower than 10% pace of growth which is likely to have some downwards pressure on investor related housing demand.
Overall we are expecting another solid year of housing market conditions and further capital gains, albeit at a more sustainable rate that what we have seen over 2014.
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The nation's housing dynamic is set to shift: CoreLogic's 2015 outlook

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"Housing market conditions remain slanted toward Sydney and Melbourne in October with values in these two cities rising by 1.3% and 1.9% respectively over the month. 
"Brisbane was the only other capital city to record a capital gain over the month, rising by 0.6%."
{qtube vid:=vQauqDbq5lA}
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Video: RP Data's Australian housing market recap

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The speed of population growth into Australia has been winding down since reaching a recent annual peak in December 2012 when the national population grew by 1.78% over the year.
With overseas migration moderating and a slowdown in the rate of natural increase, the annual rate of population growth across the country has slipped to 1.69% over the year ending March 2014. The more timely overseas arrivals and departures data indicates that net overseas migration to Australia is continuing to slow down, so we should expect the rate of population growth to continue tapering over the near term.
Across the states there is a third component of population growth; interstate migration flows. The trends of migration flows between the states has been changing over the past few years with the mining states demonstrating a sharp slowdown in both overseas migration flows as well as less net migration across the state borders. Conversely, the non-mining states are seeing a pick-up in interstate migration flows as workers ‘bounce’ back from resources sector jobs that are no longer there.
<a href="https://blog.rpdata.com/wp-content/uploads/2014/10/1-Rolling-annual-change-in-Australias-population.jpg" target="_blank"><img class="aligncenter size-large wp-image-3882" src="https://blog.rpdata.com/wp-content/uploads/2014/10/1-Rolling-annual-change-in-Australias-population-580x120.jpg" alt="1 Rolling annual change in Australias population" width="580" height="120"></a>
The following dashboards highlight the interstate migration flows for each state; what are the overall interstate migration trends, where are the migrants coming from and where are they going to?
<a href="https://blog.rpdata.com/wp-content/uploads/2014/10/2-Net-qtrly-interstate-migration-nsw-vic-qld-sa-wa.jpg" target="_blank"><img class="aligncenter size-large wp-image-3883" src="https://blog.rpdata.com/wp-content/uploads/2014/10/2-Net-qtrly-interstate-migration-nsw-vic-qld-sa-wa-580x120.jpg" alt="2 Net qtrly interstate migration nsw vic qld sa wa" width="580" height="120"></a>
<a href="https://blog.rpdata.com/wp-content/uploads/2014/10/3-Net-qtrly-interstate-migration-tas-nt-act.jpg" target="_blank"><img class="aligncenter size-large wp-image-3884" src="https://blog.rpdata.com/wp-content/uploads/2014/10/3-Net-qtrly-interstate-migration-tas-nt-act-580x120.jpg" alt="3 Net qtrly interstate migration tas nt act" width="580" height="120"></a>
<a href="https://blog.rpdata.com/wp-content/uploads/2014/10/4-Annual-net-interstate-migration-flows.jpg" target="_blank"><img class="aligncenter size-large wp-image-3885" src="https://blog.rpdata.com/wp-content/uploads/2014/10/4-Annual-net-interstate-migration-flows-580x166.jpg" alt="4 Annual net interstate migration flows" width="580" height="166"></a>
Across NSW interstate migration remains in negative territory (in fact there hasn’t been a single period over the ABS historical series where net interstate migration has moved into positive territory in NSW). With a net interstate migration figure of -1,036 over the 12 months ending March 2014, this is the smallest net loss of interstate migrants for NSW on record.
The improved interstate migration figures are largely being driven by an improvement in net migration between Queensland where the net rate of interstate migration was at a record low of -4,786 over the year to March 2014. To provide some context, in 2003 the net interstate migration deficit between NSW and Queensland was just under 26,000.
<a href="https://blog.rpdata.com/wp-content/uploads/2014/10/5-NSW-IM-stats.jpg" target="_blank"><img class="aligncenter size-large wp-image-3886" src="https://blog.rpdata.com/wp-content/uploads/2014/10/5-NSW-IM-stats-453x580.jpg" alt="5 NSW IM stats" width="453" height="580"></a>
Victoria is now the national leader for interstate migration, taking the title away from Queensland since the September quarter last year based on annual net migration figures. Net interstate migration into Victoria is currently at a record high with a net 2,468 more residents moving to the state from other regions of Australia.
Net migrants from NSW were the most substantial interstate contributors to Victorian population growth; however the trend of interstate arrivals from the mining states to Victoria is at record levels and trending higher.
<a href="https://blog.rpdata.com/wp-content/uploads/2014/10/6-VIC-IM-stats.jpg" target="_blank"><img class="aligncenter size-large wp-image-3887" src="https://blog.rpdata.com/wp-content/uploads/2014/10/6-VIC-IM-stats-453x580.jpg" alt="6 VIC IM stats" width="453" height="580"></a>
Queensland is no longer attracting the largest number of net interstate migrants, falling to second position after Victoria since the September quarter last year. Over the year to March 2014 the state of Queensland attracted an additional 5,772 net interstate migrants which is only slightly higher than the previous all-time low of 5,384 net interstate migrants recorded over the year ending December 2010.
<a href="https://blog.rpdata.com/wp-content/uploads/2014/10/7-QLD-IM-stats.jpg" target="_blank"><img class="aligncenter size-large wp-image-3888" src="https://blog.rpdata.com/wp-content/uploads/2014/10/7-QLD-IM-stats-450x580.jpg" alt="7 QLD IM stats" width="450" height="580"></a>
Net interstate migration into South Australia hasn’t changed a great deal over recent years with the quarterly rate of net migrants typically bouncing between -1,500 and -500 over the past decade. The largest portion of state residents are lost to Victoria, where over the year ending March 2014 there was a net interstate loss of 1,827 residents to Victoria.
<a href="https://blog.rpdata.com/wp-content/uploads/2014/10/8-SA-IM-stats.jpg" target="_blank"><img class="aligncenter size-large wp-image-3889" src="https://blog.rpdata.com/wp-content/uploads/2014/10/8-SA-IM-stats-448x580.jpg" alt="8 SA IM stats" width="448" height="580"></a>
 
Western Australia still lays claim to the title of ‘fastest growing state’ with an annual population growth rate of 2.5%, there has been a consistent moderation in the rate of growth since a recent annual peak of 3.72% over the year ending September 2012. WA is still attracting a positive net interstate migration rate, however there were only 256 net interstate migrants to WA over the March quarter, down from a recent high of 3,395 over the March quarter of 2012.
<a href="https://blog.rpdata.com/wp-content/uploads/2014/10/9-WA-IM-stats.jpg" target="_blank"><img class="aligncenter size-large wp-image-3890" src="https://blog.rpdata.com/wp-content/uploads/2014/10/9-WA-IM-stats-452x580.jpg" alt="9 WA IM stats" width="452" height="580"></a>
Net interstate migration into Tasmania has remained in negative territory since late 2010, however the trend is showing some constancy and is now approaching a neutral rate of interstate migration. The last time net interstate migration was substantially positive into Tasmania was between 2003 and 2004 when housing markets were booming.
<a href="https://blog.rpdata.com/wp-content/uploads/2014/10/10-Tas-IM-stats.jpg" target="_blank"><img class="aligncenter size-large wp-image-3891" src="https://blog.rpdata.com/wp-content/uploads/2014/10/10-Tas-IM-stats-453x580.jpg" alt="10 Tas IM stats" width="453" height="580"></a>
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Interstate migration to Victoria at record highs

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Across Australia, home sales reached their high point in November last year when 45,640 house and unit sales were recorded over the month and the rolling six monthly trend was swiftly moving higher.
However, transaction numbers through to the end of July this year show that the number of home sales has levelled compared with the seasonal highs of late last year. On an annual basis, transaction numbers are still rising but not at the same growth rate as recorded one year ago.
A year on year comparison (comparing the 12 months to July 2014 to the 12 month period ending July 2013) shows that almost every state and territory recorded an increase in sales with the largest increases recorded across Tasmania where the number of sales is 26.4% higher, and in Queensland where transaction numbers are 15.7% higher.
<img src="/images/2014/10/23/lawless-oct-23-one.png" alt="">
Source: RP Data.
Western Australia and the ACT where the only two regions where transactions were down at 1.5% and 1.1% respectively.
Despite a high rate of capital appreciation, in New South Wales and Victoria the six month trend peaked in December and November last year and has slowly wound down during 2014. Sales in the Northern Territory have also slowed.
In contrast, property sales are gathering momentum in Tasmania, Queensland and South Australia. While coming from a low base, all three states have underperformed the other capital cities for value growth and transaction numbers are moving higher. Tasmania recorded the most significant increase where the rolling six month trend in sales hasn’t been as high since July 2009.
Other metrics such as recently released housing finance data from the Australian Bureau of Statistics (ABS) is pointing towards a peak in housing market activity; these results showed a moderation in the pace of growth for owner occupier mortgage commitments with the annual change in owner occupier housing finance commitments peaking in November last year and mortgage demand, excluding investors, virtually flat over the past twelve months.
RP Data also noted a rise in average selling time and rate of vendor discounting in the months leading up to spring; the average number of days to sell a home reached a recent low of 36 days across the combined capital cities over the month of March this year. Since that time the average days on market figure has trended higher to reach 47 days. Vendor discounting rates haven’t softened as much, up from 5.5% in February this year to 5.8% in August.
When the pace of home sales slows, it can largely be the result of seasonal factors such as in the winter months. Transactions also fall sharply towards the end of December and most of January, as well as at times of national holidays such as Easter.
For these reasons, the spring season will provide a timely litmus test for the housing market. However, the question is whether transaction numbers will rise to eclipse last year’s recent high, or have we moved the peak in buyer demand?
We are already seeing listing numbers ramping up at a faster rate than last year, the big question is whether buyer numbers will match the pace of listings to absorb this additional supply.
<img src="/images/2014/10/23/lawless-oct-23-two.png" alt="">
<img src="/images/2014/10/23/lawless-oct-23-three.png" alt="">
Source: RP Data.
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Spring season will provide a timely litmus test for the housing market

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Over the first five months of the year, across the combined capital cities of Australia, RP Data has recorded 35,367 auctions of which 24,320 (69%) sold either under the hammer or shortly before/after the auction date. 
Over the same time frame we have recorded a total of 128,437 house and unit sales. Based on these numbers, auction sales account for about 19% of all sales across the capital cities of Australia (excluding Darwin).  Excluding the month of January, where very few auctions are held, the proportion of auctions to total sales increases to 22% between February and May.
The remaining 81% of home sales were sold by private treaty. The fact that private treaty sales account for the vast majority of all home sales often gets overlooked when people are commenting on recent market conditions and trends.
<a href="https://blog.rpdata.com/wp-content/uploads/2014/08/Auction-and-private-treaty-sales-as-a-pc-of-all-sales.jpg" rel="wp-prettyPhoto[g3629]"><img class="aligncenter size-large wp-image-3630" src="https://blog.rpdata.com/wp-content/uploads/2014/08/Auction-and-private-treaty-sales-as-a-pc-of-all-sales-580x252.jpg" alt="Auction and private treaty sales as a pc of all sales" width="580" height="252"></a>
Source: RP Data.
Of course the proportion of auctions varies substantially from city to city. Melbourne and Sydney have historically had a selling culture that is more heavily aligned with auctions as a method of sale.  Between February and May of this year, auction sales accounted for 35% of all Melbourne sales and 31% of all Sydney sales. At the other end of the spectrum is Perth where auctions are comparatively rare, comprising just 2% of all sales over the same time frame.
Another trend we have seen in the market since the growth phase kicked off in June 2012 is a substantial rise in auctions as a proportion of the total market. Clearly auctions as a method of sale are more popular when housing market conditions are ‘hot’; a fact which comes as no surprise. Auctions work best when there is high buyer demand providing a competitive bidding environment.
Of course, home value growth is strongest at the moment in Sydney and Melbourne which are the two most auction-centric markets.  What is interesting though is that auctions as a proportion of all sales are significantly higher over the current growth cycle (ie June 2012 to current) compared with the previous growth cycle (ie Jan 2009 to Oct 2010).
<a href="https://blog.rpdata.com/wp-content/uploads/2014/08/Auctions-as-a-pc-of-all-sales-history.jpg" rel="wp-prettyPhoto[g3629]"><img class="aligncenter size-large wp-image-3631" src="https://blog.rpdata.com/wp-content/uploads/2014/08/Auctions-as-a-pc-of-all-sales-history-580x254.jpg" alt="Auctions as a pc of all sales history" width="580" height="254"></a>
Source: RP Data.
Considering that private treaty sales account for a larger proportion of housing sales than auctions, what high frequency metrics are available to monitor this side of the market?  RP Data publishes a variety of vendor metrics each week, with the most commonly referred to metrics being the average selling time and average level of vendor discounting which are both measures of private treaty conditions.  Both of these measures exclude auction results.
The average selling time is a measure based on the number of days from when a home is first advertised to the contract date of sale.  The vendor discount provides a metric on how much vendors are reducing their initial asking price in order to sell their home.  It’s based on the percentage difference between the initial asking price and the contract price on the home.  Both indicators are updated weekly by RP Data based on data received over the past 28 days.
<a href="https://blog.rpdata.com/wp-content/uploads/2014/08/Tom-and-Vee.jpg" rel="wp-prettyPhoto[g3629]"><img class="aligncenter size-large wp-image-3635" src="https://blog.rpdata.com/wp-content/uploads/2014/08/Tom-and-Vee-580x172.jpg" alt="Tom and Vee" width="580" height="172"></a>
Source: RP Data.
There are additional weekly metrics where you can follow the housing market trends such as updates to the RP Data Home Value indices, median selling prices, number of listings in the market, and metadata indices that indicate mortgage demand (RP Data Mortgage Index) and how many homes are being prepared for sale (RP Data Listings Index).
<a href="https://blog.rpdata.com/wp-content/uploads/2014/08/Values.jpg" rel="wp-prettyPhoto[g3629]"><img class="aligncenter size-large wp-image-3636" src="https://blog.rpdata.com/wp-content/uploads/2014/08/Values-580x143.jpg" alt="Values" width="580" height="143"></a>
<a href="https://blog.rpdata.com/wp-content/uploads/2014/08/Listings.jpg" rel="wp-prettyPhoto[g3629]"><img class="aligncenter size-large wp-image-3632" src="https://blog.rpdata.com/wp-content/uploads/2014/08/Listings-580x146.jpg" alt="Listings" width="580" height="146"></a>
<a href="https://blog.rpdata.com/wp-content/uploads/2014/08/RMI.jpg" rel="wp-prettyPhoto[g3629]"><img class="aligncenter size-large wp-image-3634" src="https://blog.rpdata.com/wp-content/uploads/2014/08/RMI-580x153.jpg" alt="RMI" width="580" height="153"></a>
<a href="https://blog.rpdata.com/wp-content/uploads/2014/08/RLI.jpg" rel="wp-prettyPhoto[g3629]"><img class="aligncenter size-large wp-image-3633" src="https://blog.rpdata.com/wp-content/uploads/2014/08/RLI-580x150.jpg" alt="RLI" width="580" height="150"></a>
 
Source: RP Data.
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How important are auction clearance rates in the housing market?

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It was surprising to see an article published by Fairfax recently that criticized RP Data's publication of monthly housing market statistics. 
The article (<a href="https://news.domain.com.au/domain/real-estate-news/a-milliondollar-median-for-melbourne-20140801-zzjr9" target="_blank">that can be viewed here</a>) remarks that the RP Data indices are ridiculous and implies that the monthly results are misleading.  The theme of the article focuses on the monthly result for Melbourne where we reported a 3.7% rise in Melbourne dwelling values over the month of July.
For starters, the article did not disclose the fact that Fairfax publishes a competing index which is not a monthly measurement and lacks the timeliness of the RP Data series.  Fairfax also owns a data business that is competitive with RP Data.  The lack of disclosure around this conflict should come as a shock to readers who expect a greater level of transparency in reporting.
It’s also worthwhile pointing out that our monthly hedonic index was developed (in conjunction with Rismark International) after the RBA released a discussion paper calling for more accurate and higher frequency reporting on housing market conditions. Since that time the RP Data monthly hedonic regression indices have become the index of choice for the RBA when it comes to reporting on housing market conditions in Australia.
In an attempt to discredit our reporting and highlight what they perceive to be extreme volatility in the index reading, Fairfax take the monthly movement in our index value for Melbourne and annualise it to suggest the Melbourne housing market is heading for a 44% plus rate of growth over the coming year.
Do commentators suggest the share market is set to boom when the S&amp;P/ASX200 rises by 1.8% in a day (an annualised gain of more than 400% using Fairfax’s logic)? The graph below demonstrates the difference in volatility between our daily housing market index and the daily S&amp;P/ASX 200 index.  The volatility in our capital city indices is around 4% per annum which is approximately one fifth of the volatility recorded across equity markets. The difference in volatility levels is clear from the graph below.
<a href="https://blog.rpdata.com/wp-content/uploads/2014/08/ASX200-v-RP-Data-Daily.jpg" rel="wp-prettyPhoto[g3575]"><img class="aligncenter size-large wp-image-3576" src="https://blog.rpdata.com/wp-content/uploads/2014/08/ASX200-v-RP-Data-Daily-580x223.jpg" alt="ASX200 v RP Data Daily" width="580" height="223"></a>
Housing markets are much more stable than equity markets, however that isn’t to say that housing markets don’t show natural volatility. Housing market volatility simply hasn’t been measured in the past due to the lack of granularity and sophistication in the methods behind the measurements.
If we look at monthly data released by the Australian Bureau of Statistics, we can also see some significant month to month fluctuations that can take commentators by surprise.
Over the first six months of this year, dwelling approvals have had the following month-by month changes: +9.0% in January, -6.6% in February, -4.5% in March, -6.1% in April, +10.3% in May and -5.0% in June.  Of a similar note, the number of owner occupier housing finance commitments has fluctuated significantly over the first five months of this year.  The fluctuations on a month to month basis were as follows: 0.0% in January, +1.6% in February, -1.3% in March, -0.5% in April and -1.7% in May.  The point here is that volatility is a part of measuring any market on a regular basis and must be considered when looking at the data.
Short-term movements in the property market cannot be viewed in isolation. A more reliable and informative way to interpret the statistics is to take the monthly change in context with the broader trend of the data. 
Over the past three months Melbourne values have shown a much lower 1.8% rise; in fact the rolling quarterly rate of growth has been tapering across Melbourne since March and the rolling half yearly rate of growth peaked in January.
<a href="https://blog.rpdata.com/wp-content/uploads/2014/08/Melb-index.jpg" rel="wp-prettyPhoto[g3575]"><img class="aligncenter size-large wp-image-3577" src="https://blog.rpdata.com/wp-content/uploads/2014/08/Melb-index-580x223.jpg" alt="Melb index" width="580" height="223"></a>
Subscribers to our index data, such as the Reserve Bank and Federal Treasury, rely on our monthly indices regularly, but they take a much more informed view of the results; interpreting the monthly statistics in context with the trend as well as other market evidence such as vendor metrics, supply introductions, housing finance demand and transaction volumes.
Article continues on the next page. Please click below.
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We agree that property market information needs to be timely and meaningful and it’s not just those people looking to buy or sell a home that should take interest. 
National regulators and policy makers have a high level of interest in housing market conditions; housing is an important component of financial stability.  The banking and finance sector track housing market conditions closely, with more than 65% of bank’s loan assets are secured by residential property their requirement to assess housing market conditions is one of the their highest priorities.  Industry professionals, who need to understand the ups and downs of housing market conditions on a timely and frequent basis in order to run a successful business, also have a requirement for accurate and timely housing market analytics.
Statistics are like a foreign language for most people.  While numbers can look straight forward, understanding what the numbers mean and how best to interpret them can be challenging. Unfortunately, when it comes to measuring things like asset values and market movements, whether it is real estate or equities or other asset classes, complex mathematics is often required.
Around 15 months ago RP Data, together with Rismark International, launched a new and improved hedonic methodology which provided a daily measurement of how dwelling values were performing.  Our daily index tracks the overall change in home values across the complete portfolio of properties across the capital cities; essentially imputing the value of every house and apartment each day and measuring the change across the overall portfolio values between each period.
Prior to being released to the market, RP Data’s indices were audited by both Alex Frino at Capital Markets CRC and KPMG from an infrastructure perspective.  We consulted with the RBA.  White papers on the index methodology are<a href="https://www.rpdata.com/research/rp_data-rismark_home_value_index_methodology" target="_blank"> available to be downloaded from the RP Data web site</a>.  No other index provider goes to such lengths to provide a transparent level of documentation around their methodologies and processes.
RP Data also spends about $15 million each year on data capture, cleansing and improvement.  On a weekly basis we typically capture between 85% and 90% of all auction results, which is generally much higher than other residential property data businesses.  We receive about 60% of our transaction data directly from the industry which provides a much more timely mechanism for collecting property data than waiting on government provided records, however we also collect virtually 100% of all property transactions nationally from the respective state government departments.
So in summary, we take data collection and the production and release of our indices very seriously as we fully understand and appreciate the important decisions being made every day by regulators, policy makers, financial institutions, other industry professionals and consumers, in reliance on our data and analytics, including our indices.
The nature of statistics is such that from time to time you will get outlier results such as last month’s Melbourne figure and yes, businesses with competing interests to RP Data will use results such as this to attack us from time to time.  The important thing is to understand outlier results occur every so often in any statistical model.  Like industry professionals, policy makers and regulators, industry commentators need to understand this, not dismiss or discount these figures and pay attention to the longer-term trends.
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Why RP Data publishes monthly price data

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NSW attracted the largest number of new residents at 110,923 over the period followed by Victoria with 107,916 new residents, Queensland with 79,706, and Western Australia with 71,301.
An important indicator for the housing market, population growth statistics represent a proxy for housing demand. More residents imply more people who require accommodation.
At its peak, Australia’s population reached a record high in 2008 with an annual growth rate of 2.2%. Since then, population growth has fallen away sharply and dropped to its lowest point of 1.4% for the year end to March 2011. In 2012, population rose to reach a new high point of 1.8%.
ABS data indicates that the rate of population growth has been slipping since mid-last year, slowing to an annual growth rate of 1.7%. Despite a slowdown, population growth remains well above average.
<img src="/images/2014/06/26/lawless-june-26-one.gif" alt="">
Source: RP Data, ABS
The level of natural increase, that is births minus deaths, was 8.6% higher than the ten year average and 19.1% higher than their 30-years average over the 2013 calendar year. In addition, net overseas migration was tracking substantially higher than average at 16.7% above the 10 year average and 78.6% above the 30-years average.
Across the states, there were some diverse population growth trends where in raw numbers; NSW continues to attract the largest number of new residents, at 110,923 over the 2013 calendar year. Victoria showed the second largest number of new residents (107,916) followed by Queensland (79,706) then Western Australia (71,301).
According to the ABS, net overseas migration is the largest contributor to population growth. Across each of the states except for Tasmania and the Australian Capital Territory, natural increase outweighs net overseas migration numbers.
New South Wales holds the largest number of overseas migrants at 71,446 net migrants over the calendar year, followed by Victoria which recorded 62,337 overseas migrants.
Both NSW and Victoria are the two states showing a healthy upwards trend in overseas migration. Net overseas migrants into WA were the third highest of any state at 45,401, however, the ABS data shows a substantial decline over the year with overseas migrant numbers down 19.8% compared with the 2012 calendar year. A similar trend is evident in the other mining state, Queensland, where overseas migration is down 19.1% over the year.
Victoria attracted the largest number of net interstate migrants for the second consecutive quarter; historically it has been Queensland and more recently Western Australia. A slowdown in the resources sector is the likely cause of stymied interstate migration into both of these states.
With population growth winding down we can expect some further easing of housing demand, both from a sales and a rental perspective. The slowdown seems to be most pronounced in the mining states of WA and Qld where population growth conditions have previously been the strongest.
<img src="/images/2014/06/26/lawless-june-26-two.gif" alt="">
 
<img src="/images/2014/06/26/lawless-june-26-three.gif" alt="">
<img src="/images/2014/06/26/lawless-june-26-four.gif" alt="">
Source: RP Data, ABS
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Stalling population growth will lead to further easing of housing demand

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The Australian Bureau of Statistics (ABS) recently published labour force statistics for May 2014.
The data reported that the national unemployment rate was steady at 5.8%, the third month in a row it had been recorded at this level. The rate of unemployment is up from 5.5% a year ago but still well below the 6.25% many had predicted it would have reached by now.
<a href="https://blog.rpdata.com/wp-content/uploads/2014/06/Chart-12.jpg" rel="wp-prettyPhoto[g3399]"><img class="aligncenter size-full wp-image-3400" src="https://blog.rpdata.com/wp-content/uploads/2014/06/Chart-12.jpg" alt="Chart 1" width="500" height="182"></a>
Source: RP Data, ABS
The full-time unemployment rate at a national level is slightly higher than the overall unemployment rate, recorded at 6.0%.
<a href="https://blog.rpdata.com/wp-content/uploads/2014/06/Chart-22.jpg" rel="wp-prettyPhoto[g3399]"><img class="aligncenter size-full wp-image-3401" src="https://blog.rpdata.com/wp-content/uploads/2014/06/Chart-22.jpg" alt="Chart 2" width="500" height="185"></a>
Source: RP Data, ABS
Although we have seen a fairly stable unemployment rate of late, the employment participation rate is continuing to trend lower.
A key challenge for the government is to encourage the long-term unemployed persons back into the workforce. Although the participation rate data suggests that this may not be working, keep in mind also that with an ageing population more and more baby boomers are reaching retirement age and exiting the workforce.
The current workforce participation rate is recorded at 64.6% which is at around its lowest level since March 2006.
<a href="https://blog.rpdata.com/wp-content/uploads/2014/06/Chart-32.jpg" rel="wp-prettyPhoto[g3399]"><img class="aligncenter size-full wp-image-3402" src="https://blog.rpdata.com/wp-content/uploads/2014/06/Chart-32.jpg" alt="Chart 3" width="500" height="181"></a>
Source: RP Data, ABS
Turning to actual employment, in May 2014 there was 11,564,555 persons employed nationally, 8,068,338 employed full-time and 3,496,216 employed part-time.
As at May 2014, 30.2% of all employed persons were employed part-time. As you would expect, females are much more likely to be employed on a part-time basis compared to males. As at May 2014, 16.9% of total males employed were employed part-time compared to 45.9% of females employed.
Although the proportion of males employed part-time is much lower than females it has been trending higher and is close to an historic high.
<img class="aligncenter size-full wp-image-3403" src="https://blog.rpdata.com/wp-content/uploads/2014/06/Chart-42.jpg" alt="Chart 4" width="500" height="182">
Source: RP Data, ABS
Over the 12 months to May 2014, the number of employed persons has increased by 98,700 persons with a 49,700 person increase in full-time employment and a 49,000 person increase in part-time employment.
At the same time a year ago, total employment had increased by 102,900 persons with full-time employment increasing by 22,100 persons and part-time employment rising by 80,700 persons.
<a href="https://blog.rpdata.com/wp-content/uploads/2014/06/Chart-51.jpg" rel="wp-prettyPhoto[g3399]"><img class="aligncenter size-full wp-image-3404" src="https://blog.rpdata.com/wp-content/uploads/2014/06/Chart-51.jpg" alt="Chart 5" width="500" height="186"></a>
Source: RP Data, ABS
The national data highlights that the unemployment rate has seemed to have stabilised over recent months and jobs continue to be created however, the data at a state level is somewhat more varied. Based on the less volatile trend data, Tasmania has the nation’s highest unemployment rate at 7.5% and the Northern Territory the lowest at 3.3%.
As you can see there is a big discrepancy in unemployment on a state by state basis.
<a href="https://blog.rpdata.com/wp-content/uploads/2014/06/Chart-61.jpg" rel="wp-prettyPhoto[g3399]"><img class="aligncenter size-full wp-image-3405" src="https://blog.rpdata.com/wp-content/uploads/2014/06/Chart-61.jpg" alt="Chart 6" width="500" height="179"></a>
Source: RP Data, ABS
Looking at the current tend unemployment rate compared to trend unemployment a year ago we can see some different trends across the states.
New South Wales was the only state where there was no change to unemployment over the year, steady at 5.5%.
The unemployment rate rose in Victoria, Queensland, South Australia and Western Australia with the largest increases in Victoria and South Australia.
In Tasmania, Northern Territory and Australian Capital Territory the unemployment rate is lower over the year with a substantial fall in the Northern Territory.
<a href="https://blog.rpdata.com/wp-content/uploads/2014/06/Chart-71.jpg" rel="wp-prettyPhoto[g3399]"><img class="aligncenter size-full wp-image-3406" src="https://blog.rpdata.com/wp-content/uploads/2014/06/Chart-71.jpg" alt="Chart 7" width="500" height="181"></a>
Source: RP Data, ABS
The employment participation rate also varies significantly across the states. As you can see from the above chart, employment participation is trending lower across most states and below its recent peak in each state.
The state and territories with the highest participation rate are: Northern Territory (76.2%), Australian Capital Territory (70.9%), Western Australia (68.2%) and Queensland (66.4%).
Across the remaining states, participation is lower, recorded at 63.0% in New South Wales, 64.2% in Victoria, 62.0% in South Australia and 60.9% in Tasmania.
Overall the May release showed a level of stability returning to the unemployment rate.
Keep in mind the federal budget forecasts indicate the unemployment rate to peak at 6.5% however, it is important to note that previous government forecasts expected the unemployment rate to be at 6.2% currently.
With an ageing population we are likely to see the employment participation rate trend lower, which will increase pressure on business to improve productivity.
On a state-by-state basis the employment picture varies and it will important to keep an eye labour market conditions particularly in Victoria and South Australia where the unemployment rate has risen sharply over the past year.
Keep in mind upcoming high-profile manufacturing closures within the car industry are yet to really bite and will impact both Victorian and South Australian jobs.
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Tim Lawless

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