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The Australian Prudential Regulation Authority (APRA) released its June 2016 quarter property exposures data earlier this week. 
The data looks at exposure to the property market by Australian Authorised Deposit-taking Institutions (ADI).  It’s valuable because it provides deeper insight into lending from mortgage lenders which isn’t available from the Australian Bureau of Statistics (ABS) monthly housing finance data.
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At the end of the June 2016 quarter, across all Australian ADI’s, there was $1.437 billion in outstanding residential mortgages to households. 
The value of outstanding mortgages has increased by 8.1 percent year-on-year, which is the slowest year-on-year growth rate since the June 2014 quarter. 
Outstanding mortgages include $930.4 billion outstanding to owner occupiers and $506.3 billion outstanding to investors. 
The value of owner occupier mortgages has increased by 14.8 percent year-on-year, its largest rise since March 2010. 
The value of investor mortgages outstanding has fallen by -2.4 percent year-on-year, its greatest decline on record. 
To put the investor lending slowdown into perspective, 12 months ago investor mortgage credit had increased by 12.7 percent.
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Taking a look at potentially higher risk forms of lending, in June 2016 there was $557.0 billion in outstanding mortgage credit for interest-only mortgages, $2.753 billion for reverse mortgages, $24.7 billion for low-documentation mortgages and $1.0 billion in other non-standard mortgages. 
Almost two-fifths of the value of outstanding mortgages (39.3 percent) is for interest-only mortgages. 
Year-on-year there have been increases in the value of mortgage credit for interest-only (+7.7 percent) and reverse mortgages (+1.8 percent) while credit for low-documentation (-16.2 percent) and other non-standard loans (-8.5 percent) has fallen.
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The average outstanding mortgage balance was $252,100 which was 4.5 percent higher over the year to June 2016. 
Across the different mortgage types the average outstanding balances were recorded at: $308,000 for loans with an offset, $335,200 for interest-only loans, $97,400 for reverse mortgages, $191,000 for low-documentation loans and $191,900 for other non-standard loans.    
The average balances have increased over the year for loans with an offset (+4.4 percent), interest-only mortgages (+4.6 percent) and reverse mortgages (+2.7 percent) and fallen for low-documentation loans (-1.2 percent) and other non-standard loans (-2.2 percent).
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Looking at new lending over the June 2016 quarter, there was $98.4 billion in new mortgage lending, $64.4 billion of which was for owner occupiers and $34.0 billion for investors.  It was a record quarter with the value of lending 20.7 percent higher over the quarter and 2.1 percent higher year-on-year. 
Over the quarter the value of lending to owner occupiers rose by 15.2 percent while investor lending jumped 32.5% to its highest level since June 2015. 
Year-on-year owner occupier lending is 16.2 percent higher while investor lending is -16.9 percent lower. While investment lending has certainly increased of late, it is difficult to know exactly how much is being driven by more volume and how much is being driven by borrowers taking out larger mortgages.
No data was available this quarter on new low-documentation lending however, there was $35.6 billion in interest-only lending, $136 million in other non-standard loans, $47.4 billion in loans from a third part source $3.5 billion worth of loans approved outside of serviceability. Although new interest-only lending is -19.1 percent lower year-on-year, it increased by 25.1% over the quarter which is in line with the significant jump in new lending to investors. 
It was also the largest quarter since June 2015 for other non-standard loans. The $3.5 billion of loans approved outside of serviceability was the lowest since the March 2015 quarter.
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Looking at the loan-to-value ratios (LVR) on new mortgages over the quarter it is clear that lenders and or borrowers are becoming more conservative and using larger deposits.  Over the quarter, a record-high 78.0 percent of mortgages had an LVR of less than 80% (meaning the borrower had a deposit of at least 20 percent). 
Over the quarter the value of lending increased across each of the LVR bands shown however, year-on-year the value of lending for LVRs of less than 60 percent is up 19.2 percent, for LVRs between 60 percent and 80 percent it is -1.1 percent lower, for LVRs between 80 percent and 90 percent it is 6.1 percent higher and for LVRs above 90 percent it is -20.7 percent lower.  Encouragingly, just 8.3 percent of all new mortgages had an LVR of more than 90 percent which is a record-low.
Overall the data shows that there has been a rebound in new lending to investors and a commensurate increase in interest-only lending over the past quarter.  After annual investor housing credit growth has slumped to well below APRA’s 10%pa speed limit it is clear that some lenders have scope to dial-up their lending to investors.  It also shows that despite historically weak rental markets and record low rental yields that there remains demand from the investment segment of the market.
While investment lending has lifted over the past quarter, the data is showing there is a more conservative approach to high LVR lending. The ongoing declines in lending with an LVR above 90 percent is encouraging because it should lead to reduced risk.
Over the coming quarters we’ll be closely watching how much higher investment lending lifts.
Keep in mind that despite record low yields, the returns are still superior to putting money in a term deposit, especially once you factor in the recent capital growth as well. Interest-only lending trends will also be important to watch with APRA already having raised concerns about that particular type of lending.
Cameron Kusher is research analyst for CoreLogic. You can contact him <a href="https://blog.corelogic.com.au/about/">here</a>.
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New lending to investors and interest-only lending jumps over June quarter

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The housing market appears to be responding to a number of factors which have spurred further growth in home values. 
Official interest rates are at historic low levels which has encouraged borrowing for housing and driven housing debt to record-high levels. 
The low interest rate setting is also seeing significant competition amongst lenders which has resulted in substantial discounts to headline mortgage rates. 
Furthermore, while the total number of homes available for sale is similar to levels a year ago, there has been significantly fewer newly advertised properties listed for sale over the past few months relative to previous years. 
The low number of newly advertised dwellings available for sale has created a sense of urgency for buyers in the market, particularly in Sydney and Melbourne, and resulted in further increases in home values over this growth cycle which has been running for more than four years.
While the banking regulator has implemented policies aimed at slowing investment related credit demand, his has not resulted in a significant cooling in the housing market. The pace of investment related credit growth has slowed from a peak of nearly 11 percent per annum to 5 percent over the most rent 12 months period, however we are now seeing an uplift in lending to investors once more. 
Following the most recent interest rate cut, auction clearance rates have elevated to levels not seen for more than a year, particularly in Sydney, the nation’s least affordable housing market.
Interest rates
On August 2, the Reserve Bank (RBA) decided to cut official interest rates by 25 basis points to 1.5 percent. 
While interest rates were lowered to historic lows, headline variable mortgage rates were generally reduced by much less, with each of the Big 4 banks lowering their mortgage rates by no more than 14 basis points. 
Despite the fact that the interest rate cuts were not passed on in full to mortgage holders, mortgage rates below 4 percent are available for those who wish to move from their current lender.  With most mortgages on a variable rate, any cut to mortgage rates will improve a household’s disposable income.  Furthermore, it has become clear that it will also give them more confidence to increasingly purchase more expensive homes, well in Sydney and Melbourne at least.
Housing debt
Each quarter the RBA publishes ratios of household finances which include the ratio of household debt to disposable income. The latest data to March 2016 shows that the typical level of housing debt is 134.7 percent higher than household disposable income. 
The current ratio is a record-high but it is important to remember that it is a national snapshot and conditions across different housing markets are likely to vary substantially.  Since the current phase of growth in home values commenced in the June 2012 quarter, this ratio has lifted from 119.0 percent.
While the ratio of housing debt to disposable income has increased and is at a record-high, the ratio of housing assets to disposable income has also risen as home values have increased. 
In the June 2012 quarter, the typical value of household assets was 394.4 percent higher than household disposable income.  
By March 2016, the ratio had increased to 470.8 percent indicating a significant increase in the value housing assets.  Again, it should be remembered that this is a national measure and local market ratios are likely to be vastly different especially within areas of very little value growth over that time as well as those areas in which home values have fallen.
Properties listed for sale
Over the four weeks ending August 21 2016 there were 39,676 new (not previously advertised for at least six months) residential properties listed for sale and 229,386 total (includes new and relisted properties) properties advertised for sale. 
The number of newly advertised properties listed for sale was -3.4 percent lower than at the same time last year and new listings have been lower each week year-on-year since early June 2016.  Meanwhile, total listings are -0.9 percent lower than they were a year ago and on a weekly basis have been consistently lower year-on-year since early July of this year.  New and total listings are now starting to increase as we head closer to the beginning of the Spring Selling Season as they do each year.
While the national figures show fewer listings than a year ago, the trends are very different across individual capital cities, particularly in Sydney and Melbourne where home value growth conditions are strongest.
In Sydney, over the past four weeks there were 6,299 newly advertised and 18,951 total properties advertised for sale. Year-on-year, new listings have now been lower than they were the previous year fairly consistently since last November and are currently -20.6 percent lower than they were a year ago. 
Over the past four weeks there were 17,949 total listings in Sydney which was 0.8% higher than a year ago. 
While total listings are slightly higher than a year ago, there is very little new stock being listed for sale.  New listings are arguably more important than relisted properties, especially if the relisted stock has been for sale for a long period of time and vendors aren’t adjusting their price expectations.   Even though spring is just around the corner, there is very little fresh stock being added to the market.
It is a similar story in Melbourne where there were 7,177 new and 25,846 total residential properties listed for sale over the four weeks to 21 August 2016.  The number of new listings was -9.4 percent lower year-on-year and total listings were -0.8 percent lower.  Again, with spring just around the corner there is a relatively low supply of newly advertised properties hitting the market for sale.
Mortgage demand
One of the big challenges the RBA has is the quality and regularity of mortgage data collection. While housing finance data is published each month, owner occupier housing finance commitments are published both on a number and value basis while investor housing finance commitments are only published on the basis of value not the number of loans. 
With the investment segment having become so prevalent, it is a challenge not knowing both the number and value, particularly when investment is so strong in Sydney and Melbourne at a time when home value growth is also so strong. 
Adding to the challenge of interpreting housing finance data is the lack of clarity about how off-the-plan unit purchases are captured in the data.  It is unclear as to whether they are classified as construction of dwellings or purchase of new dwellings. Finally re-classification of large swathes of mortgages from lenders away from investment and toward owner occupiers has made reading the market even more difficult.
The latest housing finance data showed that in June 2016 there was $32.6 billion worth of commitments with the value having increased by 2.3 percent over the month following a 1.8 percent rise in May. 
Although mortgage lending is rising, it remains -2.1 percent lower than its peak in April of last year. 
Over the month, there was $20.8 billion in commitments to owner occupiers and $11.8 billion in commitments to investors.  Both segments of lending rose over the month however, owner occupier lending is -2.4 percent lower than its December 2015 peak while investment lending is -22.0 percent lower than its April 2015 peak.
Owner occupier lending remains quite strong and although investment lending has slowed significantly, there is now scope for it to increase over the coming months.  Without additional details on the number of investment loans it is difficult to know whether the increase is being driven by larger loan sizes, a larger number of loans or a combination of both.
Auction clearance rates
Auction clearance rates are one of the timeliest indicators of the housing market and they tend to be indicative of the broader housing market trends.  It is important to remember that far more homes sell by private sale than by auction and auctions are only a significant proportion of sales in the Sydney, Melbourne and Canberra housing markets.
Auction clearance rates in Sydney last week were at their highest levels in more than a year.  Sydney’s auction clearance rate has been above 70 percent for 18 consecutive weeks and in Melbourne they have been above 70 percent for 7 consecutive weeks.
As already discussed, the supply of homes available for sale, particularly in Sydney and Melbourne, is much lower than it has been over recent years.  This is particularly evident when looking at auction volumes. 
Over 2016 so far there have been 18,619 auctions in Sydney compared to 25,399 auctions at the same point in 2015.  This represents a -26.7 percent decline in the number of auctions in Sydney over the year to-date. 
In Melbourne there have been 23,779 auctions so far this year which is -9.5 percent lower than the 26,282 auctions to the same point last year.  The low volume of auction stock is likely to be resulting in the ongoing strength in clearance rates across each city.  Less stock for sale creates a sense of urgency for those looking to purchase.
So what does this mean for Spring?
It is too early to say definitively what will happen this Spring but I would be very comfortable stating that what happens with property listings will have a substantial influence on the market’s performance over the period. 
Spring is typically characterised by a fairly significant upswing in stock for sale, this is driven by the belief that Spring is the best time of year to sell (that is a topic for another day).  As supply increases, the value growth performance can slow and as we saw last year, auction clearance rates can actually start to dip.  So the amount of stock which becomes available for sale will be an important factor for the strength of the Sydney housing market.
The recent interest rate cut is another important consideration for the market’s performance. Although mortgages and the availability of them, is calculated on the borrower’s ability to repay the mortgage at a much higher interest rate, lower mortgage rates impact households by giving them the option to reduce mortgage repayments and therefore having more money each week in their pocket. 
This is because most mortgages are on a variable rate and changes to the interest rate on their largest commitment (the mortgage) have an immediate impact on household balance sheets. 
With the recent cut to interest rates, it is unlikely to mean that people that could not previously borrow now can, but it does mean that households that previously weren’t considering moving home or buying an investment property may now be more inclined to do so. 
This may result in more confidence from those looking to upgrade their property to list their home which means that they also become an additional purchaser.  If someone is now starting to consider buying an investment property it also means additional demand for housing. 
How many new buyers there are in Spring remains to be seen but it may encourage an increase in demand for purchase and could result in more people looking to sell their home.
The other major consideration, particularly in Sydney and Melbourne, but also across the rest of the country is what the prospects are for additional increases in home values over the short and medium term. 
Combined capital city home values have been rising for more than four years now however, this has largely been driven by Sydney and Melbourne due to their much stronger economies. While the economies in these cities remain strong, the increasing cost of housing due to the four plus years of value growth may be starting to deter buyers.
When you also consider that rents are increasing at record low levels (falling in some areas) and gross rental yields are at record lows, purchasing a property, particularly an investment, is looking less attractive than it has for some time.  Especially when you also factor in the heightened level of housing construction, most of which is inner city units, which is currently underway.
It is going to be interesting to see how all of these factors play out over the next few months and ultimately how the housing market performs.
Cameron Kusher is research analyst for CoreLogic. You can contact him <a href="https://blog.corelogic.com.au/about/">here</a>.
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Where to for the housing market in Spring? Cameron Kusher

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Over the 12 months to June 2016, 14.0 percent of all house sales and 7.3 percent of all unit sales were at a price of at least $1 million. 
To put these figures into perspective, just five years ago 7.5 percent of all house sales and 4.0 percent of all unit sales were within this price point. 
Research shows that the combined capital cities saw a much higher proportion of sales of at least $1 million over the past year. 
Across all house sales, more than 1 in 5 sales (20.9 percent) were for at least $1 million compared to 8.9 percent of all unit sales. 
Within the regional areas, the sale price for houses and units are typically lower than those in capital cities.
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An emerging trend worth noting is the fact that the difference between the proportion of house and unit sales of at least $1 million is much narrower in regional areas. 
In regional areas we tend to see that units are only located in larger regional markets and often are positioned in relatively expensive waterfront locations. Often the proportion of unit sales at, or above, $1 million has been above that for houses. Over the past year, 3.3 percent of all regional house sales and 3.0 percent of all unit sales were at least $1 million.
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Over the past 10 years in particular, we’ve seen a substantial rise in the proportion of sales of at least $1 million.
CoreLogic data confirms that in Sydney, over the past year more than 2 out of every 5 house sales was at least $1 million, and in Melbourne, 1 in 5 house sales was at least $1 million. Sydney had a higher proportion of total unit sales of at least $1 million than the proportion of house sales at that price point in each city except for Melbourne. (Refer adjacent table which highlights the proportion of sales of at least $1 million over the past year, a decade ago and 20 years ago.) 
There is an element of bracket creep in the numbers, however, as the supply of affordable homes selling has declined significantly over recent years, an increasing proportion of stock is selling for a seven figure sum.
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Demand for premium housing and within the most expensive areas of the country remains buoyant which suggests that over the coming year the proportion of sales at a price point of at least $1 million will continue to rise. 
Cameron Kusher is research analyst for CoreLogic. You can contact him <a href="https://blog.corelogic.com.au/about/">here</a>.
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$1 million property market sales on the rise: CoreLogic's Cameron Kusher

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GUEST OBSERVER
With national home values continuing to rise, the proportion of homes selling at lower prices is continuing to fall, resulting in fewer housing options for those on lower incomes.
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Over the 12 months to June 2016, 33.1 percent of all houses and 40.6 percent of all units sold, transacted at a price point below $400,000. 
These proportions have fallen from 34.8 percent and 44.1 percent respectively at the same time a year earlier.  The proportion of house sales under $400,000 nationally is at a record low while the proportion of unit sales is at close to an historic low.
<h3>Annual proportion of house and unit sales below $400,000, National</h3>
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Turning the focus to the combined capital cities shows that less than 1 in 5 houses (19.1 percent) and less than 1 in 3 units (31.0 percent) sold over the year to June 2016 for less than $400,000.  In June 2015, the proportion of sales at less than $400,000 was greater at 21.3 percent for houses and 31.9 percent for units.
<h3>Annual proportion of house and unit sales below $400,000, combined capital cities</h3>
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Regional markets are characterised as having homes transacting at substantially lower prices than the capital cities. Across the combined regional markets, 54.6 percent of houses and 65.4 percent of units that sold over the 12 months to June 2016 sold for less than $400,000. 
Whilst the proportion of sales under $400,000 was at a record low for houses and units, both houses and units were more than twice as likely to transact for less than $400,000 than they were across the combined capital cities.
<h3>Annual proportion of house and unit sales below $400,000, combined regional markets</h3>
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The table included in the report shows the proportion of total home sales under $400,000 over the 12 months to June 2016 and 10 and 20 years earlier. 
What the table highlights very clearly is that over the decade to June 2006 there was a substantial decline in home sales under $400,000 with the decline continuing over the following 10 years. 
Hobart is the only city in which more house sales occurred for less than $400,000 than above the price point over the past year.  For units, only Adelaide and Hobart had more sales below $400,000 than those above. 
<h3>Annual proportion of house and unit sales  below $400,000, individual capital cities</h3>
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These figures highlight the decline in sales across more affordable price points, particularly across the capital city housing markets. 
With values continuing to rise it is a fairly safe bet that there will continue to be a decline in the number of homes selling for less than $400,000.
Cameron Kusher is research analyst for CoreLogic. You can contact him <a href="https://blog.corelogic.com.au/about/">here</a>.
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Just over a third of homes nationally selling for less than $400,000: Cameron Kusher

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A surge in building construction activity is delivering multiple benefits to Australia’s economy, especially around construction industry employment.
New building activity data released by the Australian Bureau of Statistics (ABS) last week shows that to the March 2016 quarter, a record number of unit projects are now underway.
The ABS data shows that 25,122 houses and 29,987 units commenced construction nationally over the quarter. For the second consecutive quarter, houses construction eased while at the same time, unit commencements increased to a new record- high.
House commencements increased over the quarter in SA, Tas and NT but fell elsewhere. For units, commencements were at record highs in NSW and Qld and also rose in SA and the ACT over the March 2016 quarter.
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Looking at dwelling completions, both house and unit completions were lower over the quarter with unit completions falling for the second successive quarter. Over the March 2016 quarter, there were 23,218 houses and 15,002 units completed. Completions for houses fell across each state and territory over the quarter while for units; these were lower over the quarter in all states and territories except for NSW and SA. 
Although completions have fallen, there is a record-high number of dwellings currently under construction which is being fuelled by units, which typically, take longer to build than houses. 
At the end of the March 2016 quarter, there were 215,863 dwellings under construction nationally, 63,414 of which were houses and 152,449 which were units. Year-on-year the number of dwellings under construction has increased by 18.6% with the number of houses under construction -5.4% lower while units under construction are 32.6 percent higher. 
We’ve seen the number of houses under construction now well below previous peaks in all states and territories with the amount under construction lower over the quarter in Qld, WA, Tas and ACT but higher elsewhere.
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For units, there are currently record-high numbers of units under construction in NSW, Vic and Qld which reiterates the magnitude of the current unit construction boom. In all states and territories except WA, Tas and NT the number of units under construction has increased over the quarter. 
While the number of dwellings under construction is at record highs, the ABS data and CoreLogic observations show that an elevated number of houses and units have been approved for construction, but not yet commenced. At the end of March 2016 there were 8,817 houses and 24,175 units which had been approved for construction but not yet commenced. 
With completed and under construction supply ramping up sharply over recent years it is reasonable to expect that fewer recently approved dwellings will actually commence in the short-term. Particularly when you consider that high-rise unit construction is at record-high levels and the considerable level of risk in constructing such a large project. 
The record-high number of dwellings under construction and the continuing strong pipeline of approvals should ensure that there is plenty of work for the construction industry over the coming years. 
There are though concerns of ‘over-building’ in some areas, especially considering in certain locations much of the new unit supply is targeted at investors rather than the owner occupier market. 
Given the challenges in securing enough pre sales to trigger the commencement of some projects, over the coming quarters, we’re expecting that some projects will not begin construction. 
Cameron Kusher is research analyst for CoreLogic RP Data. You can contact him <a href="https://blog.corelogic.com.au/about/">here</a>.
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The pipeline of units under construction reaches a record high: Cameron Kusher

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With the national housing market having experienced more than four years of ongoing value rises, affordability in certain areas is deteriorating and sales that were once considered to be at the top end of the market are now becoming more common. 
With housing becoming more expensive, there has been a substantial rise in the number of homes selling for, or in excess of, $2 million.
When the current growth phase commenced in June 2012, there had been 4,103 dwelling sales of at least $2 million with these sales spread across 884 suburbs (if they have achieved this for houses and units they have been counted twice).  Over the 12 months to March 2016, there had been 11,648 house and unit sales at a price of at least $2 million with these sales recorded across 1,437 suburbs.
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Looking at the number of sales of at least $2 million, the 11,668 sales were comprised of 10,184 houses and 1,464 units.  Note that the recent dip in sales is likely to be due to the preliminary nature of recent sales data.  Before the financial crisis, the number of sales at or above $2 million peaked at 6,146 sales over the 12 months to February 2008.  They then fell to a low of 3,321 sales in June 2009.  It took until November 2013 for the number of sales of at least $2 million to eclipse their pre-financial crisis level indicating that the premium housing segment was hit particularly hard during the downturn.
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While the previous analysis looked at the number of sales of at least $2 million, the second chart looks at the number of suburbs that had at least one sale over the year at or above this price point.
Over the past year, 1,139 suburbs had a house sale at or above $2 million and 298 suburbs had a unit sale at that price point.  If we compare this to the pre-financial crisis peak there were 1,193 suburbs that had a sale within this price point before the financial crisis with this figure falling as low as 815 suburbs over the year to June 2009. 
It took until August 2014 for the number of suburbs with a sale at or above $2 million to eclipse the pre-financial crisis level.  With 1,437 suburbs nationally having at least one sale of at least $2 million over the past year it further highlights that housing is becoming less affordable in more suburbs.
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It is particularly evident of the deteriorating affordability of housing when you look at the number of suburbs with a sale price at or in excess of $2 million over time in NSW and Vic.  As the above chart shows, particularly in NSW and to a lesser extent in Vic, there has been a significant increase in the number of suburbs with sales of at least $2 million over recent years.  This is reflective of housing prices being pushed higher, particularly in Sydney and Melbourne, as home values rise and competition for well-located housing increases.
As home values continue to rise, there will continue to be some bracket creep, with the number of homes selling at $2 million or higher likely to rise further.  We would anticipate an increasing number of sales at or above $2 million over the coming years, particularly in Sydney and Melbourne.  Of course the rising prevalence of sales at this price point is systemic of the deteriorating housing affordability and increasing cost of purchasing a home.
 Cameron Kusher is research analyst for CoreLogic RP Data. You can contact him <a href="https://blog.corelogic.com.au/about/">here</a>.
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The $2 million dollar dwelling sales surge: Cameron Kusher

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Combined capital city home values have increased substantially since the financial crisis in 2008 however, this is largely being driven by Sydney and Melbourne with value growth muted in most other capital cities.
As the financial crisis hit in 2007/08, Australia’s combined capital city housing markets experienced a -6.1% decline in home values between March and December 2008.  Due to aggressive interest rate cuts by the Reserve Bank (RBA) and the introduction of the boost to the First Home Owners Grant, further home value declines were averted.  In fact, home values began to rise across two cycles; from December 2008 and in June 2016, 7.5 years later, combined capital city home values are now 54.9 percent higher.
The first chart highlights the increases in home values over the past 7.5 years.  What is immediately noticeable is that the increases have been all about Sydney (87.9 percent) and Melbourne (71.8 percent).  In fact, most other capital cities have recorded growth which is around or below the rate of inflation.
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<h3>Total change in capital city dwelling values December 2008 to June 2016</h3>
<a href="/images/2016/07/19/2016-07-15--image1.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2016/07/19/2016-07-15--image1.jpg" alt="">
From December 2008, combined capital city home values increased until October 2010, rising by 21.8 percent. 
Official interest rates were first increased coming out of the financial crisis in October 2009, rising by 175 basis points to November 2010.  The boost to the First Home Buyers Grant was partially removed in September 2009 and completely removed after December 31 2010.  These combined factors saw the rate of value growth slow, followed by a decline in dwelling values. 
The second chart highlights that from December 2008 to October 2010 dwelling values rose in all cities with Sydney, Melbourne and Darwin the standouts.  Despite very low interest rates, Brisbane, Adelaide, Perth and Hobart recorded little value growth over this period.
<h3>Total change in capital city dwelling values December 2008 to October 2010</h3>
<a href="/images/2016/07/19/2016-07-15--image2.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2016/07/19/2016-07-15--image2.jpg" alt="">
Between October 2010 and May 2012 as stimulus was removed from the housing market, combined capital city home values fell by -7.4 percent.  Darwin, Melbourne and Brisbane recorded the largest falls over the period.  Looking back at this period it is clear that low interest rates and first home buyer incentives stimulated the market and, as they were removed, demand was shown to be fragile. 
In October 2010, official interest rates were recorded at 4.75 percent and by May 2012 they had fallen by 100 basis points to 3.75 percent.
<h3>Total change in capital city dwelling values October 2010  to May 2012</h3>
<a href="/images/2016/07/19/2016-07-15--image3.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2016/07/19/2016-07-15--image3.jpg" alt="">
From May 2012 to June 2016, combined capital city home values have increased by 37.3 percent while official interest rates fell by 200 basis points to 1.75 percent.  Although home values have increased over the period, Sydney and Melbourne have recorded a substantially higher rate of value growth than all other capital cities. 
<h3>Total change in capital city dwelling values May 2012 to June 2016</h3>
<a href="/images/2016/07/19/2016-07-15--image4.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2016/07/19/2016-07-15--image4.jpg" alt="">
The data indicates that since the financial crisis the capital city housing market could be described as being extremely interest rate sensitive.  Digging deeper into the data shows that in reality it is only Sydney and Melbourne that have really responded to the stimulus of low interest rates.  The relative strength of the Sydney and Melbourne economies and the much greater employment growth has clearly assisted drive housing values higher in these cities.
Until the economic performance improves outside of Sydney and Melbourne it seems unlikely that sustainable growth will return in these areas despite the extremely low interest rates which are set to potentially move even lower over the coming months.  For Sydney and Melbourne although affordability is increasingly becoming stretched home owners have experienced a substantial increase in equity. 
With historically weak rental markets and record low yields it will be interesting to see if investors and upgraders in the two largest capital cities continue to show a thirst for housing in these cities given the growth phase has now been running for more than four years.
Cameron Kusher is research analyst for CoreLogic RP Data. You can contact him <a href="https://blog.corelogic.com.au/about/">here</a>.
 
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Home value growth remains all about Sydney and Melbourne: Cameron Kusher

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Over the month there were $32.3 billion in housing finance commitments which is 1.0 percent higher over the past month. 
Although the value of housing finance commitments increased in May 2016, they are now -4.6 percent lower than their August 2015 peak of $33.8 billion worth of commitments. 
The CoreLogic Mortgage Index, which tracks 95 percent of national valuation activity, indicates that in June 2016 the level of mortgage activity is set to slow from May, pointing to a slowing of housing finance demand.
<a href="/images/2016/07/18/Chart-1-580x210.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2016/07/18/Chart-1-580x210.jpg" alt="">
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In May 2016 there were $20.5 billion worth of owner occupier housing finance commitments and $11.7 billion worth of investment commitments.  Owner occupier commitments fell by -0.6 percent over the month but were 15.4 percent higher year-on-year.  Conversely, investor housing finance commitments increased by 3.9 percent over the month and are -13.3 percent lower year-on-year.
<a href="/images/2016/07/18/Chart-2-1-580x210.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2016/07/18/Chart-2-1-580x210.jpg" alt="">
The $20.5 billion in housing finance commitments by owner occupiers was both lower over the month and -4.9 percent lower than the December 2016 peak of $21.6 billion worth of commitments.  Across the components of owner occupier housing finance commitments there was $1.8 billion in commitments for construction of dwellings, $1.0 billion for purchase of new dwellings, $7.0 billion for refinances of established dwellings and $10.7 billion for purchase of established dwellings. 
Each segment of owner occupier mortgage lending except for purchase of established dwellings fell over the month with each segment now also lower than the recent peak.  The respective declines are recorded at -3.8 percent for construction of dwellings, -27.0 percent for purchase of new dwellings, -5.9 percent for refinancing of established dwellings and -5.6 percent for purchase of established dwellings.
<a href="/images/2016/07/18/Chart-3-1-580x212.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2016/07/18/Chart-3-1-580x212.jpg" alt="">
There was $11.7 billion worth of investment housing finance commitments in May 2016 which is -18.2 percent lower than its $14.4 million peak in April 2015.  Looking at the components, there was $1.2 billion worth of commitments for construction of dwellings and $10.5 billion in commitments for established housing.  The value of commitments for construction of dwellings was 15.5 percent higher over the month and 22.4 percent higher year-on-year.  Meanwhile, the value of commitments for established housing was 2.7 percent higher over the month and -16.1 percent lower year-on-year. 
Since mortgage lenders began to implement investment lending changes to slow annual investment credit growth below 10% there has been a significant slowing in lending to this segment.
The May 2016 housing credit data from the Reserve Bank (RBA) shows that investment credit has advanced 6.0% which is its slowest annual increase since July 2013 and well below 10% annually.  Perhaps this is why investor lending picked up in May with mortgage lenders now having more scope to lend to investors.
<a href="/images/2016/07/18/Chart-4-1-580x214.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2016/07/18/Chart-4-1-580x214.jpg" alt="">
Looking at the value of new lending (excluding refinances) for new housing and established housing shows that in May 2016, $4.0 billion was for new housing and $21.3 billion was for existing housing.  Based on this data, 15.9 percent of total lending over the month was for new housing with the remaining 84.1 percent for established housing. 
Of this $4.0 billion in lending for new housing, $1.2 billion or 30.6 percent was lending for investment purposes with the remaining $2.8 billion or 69.4% of lending for owner occupation purposes. Of the 84.1 percent of new lending for established housing, $10.7 billion or 50.5 percent was borrowing by owner occupiers with the remaining $10.5 billion or 49.5% borrowed for investment purposes. 
The data shows that much more lending is for established housing which makes sense when you consider the flow of new housing, despite being at record highs, is only a fraction of the total housing stock.
Despite low interest rates that are anticipated to go lower over the coming months it is difficult to imagine how growth in housing finance commitments will experience a significant uplift. Investor demand may pick up a little but historically weak rental growth and record low rental yields along with a surge in new investment housing stock should limit any uplift. 
This should also contribute to a slowing in value growth in Sydney and Melbourne and although other areas may see a pick-up in mortgage demand, much lower home values in those regions will likely limit any significant pick-up in housing finance commitments.
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Investor housing finance commitments bounce in May 2016: Cameron Kusher

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Utilising quarterly household income data from the Australian National University, CoreLogic has developed quarterly measurements of the ratio of property prices to annual household income.
This data is extremely valuable when looking to measure housing affordability.  The measure is available at a number of different geographies from SA2 regions (generally about the size of a suburb or group of suburbs) all the way up to GCCSA (capital city and rest of state) regions.  When looking at the analysis it is important to note that a higher ratio means housing is less affordable and a lower ratio indicates better affordability.
Note that CoreLogic will be releasing a range of affordability indicators over the coming months, including rental price to income ratio’s and the proportion of household income required to service a mortgage.
<a href="/images/2016/07/08/Chart-1-3-527x580.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2016/07/08/Chart-1-3-527x580.jpg" alt="">
With property prices varying greatly between each of the capital cities it is interesting to note that the variation in household incomes in nowhere near as large.  In March 2016, Hobart had the lowest median dwelling price at $337,250 and Sydney had the highest median price at $775,000.  Meanwhile, household incomes range from as low as $1,175/week in Hobart to $2,118/week in Darwin.  Obviously the differences in property prices and incomes impact on housing affordability, so let’s take a look at each of the capital cities and the ratio of prices to income over time.
<a href="/images/2016/07/08/Chart-2-3-580x210.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2016/07/08/Chart-2-3-580x210.jpg" alt="">
In March 2016 the ratio of house prices to annual household income in Sydney was 9.8 and for units it was 7.2.  Both property types are currently recording a record-high ratio. 12 months ago these ratios were recorded at 8.9 for houses and 6.8 for units. Note that the data goes as far back as September 2001 and at that time the ratios were recorded at: 6.0 for houses and 5.7 for units.
<a href="/images/2016/07/08/Chart-3-3-580x206.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2016/07/08/Chart-3-3-580x206.jpg" alt="">
The ratio of property prices to annual household income in March 2016 for Melbourne were recorded at: 7.7 for houses and 6.1 for units.  The ratio for houses is currently at a record high while for units it peaked at 6.6 in December 2010 and March 2011 indicating an improvement in affordability for units since that time. 
In March 2015, these ratios were recorded at 7.2 for houses and 6.0 for units. Affordability has deteriorated over the year for each property type however, detached housing affordability has deteriorated much more rapidly than units. In September 2001 the ratios were recorded at: 4.6 for houses and 4.8 for units.
<a href="/images/2016/07/08/Chart-4-3-580x207.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2016/07/08/Chart-4-3-580x207.jpg" alt="">
Unlike Sydney and Melbourne, the ratio of property prices to household income is falling in Brisbane, indicating improving housing affordability.  In March 2016, the ratios were recorded at 6.1 for houses and 4.9 for units.  12 months earlier the ratios were recorded at 6.1 for houses and 5.1 for units.  Brisbane housing was at its least affordable in September 2008 when the ratio of prices to household income were recorded at: 6.7 for houses and 5.7 for units.  In September 2001 the ratios for Brisbane were recorded at: 3.7 for houses and 3.8 for units.
<a href="/images/2016/07/08/Chart-5-3-580x206.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2016/07/08/Chart-5-3-580x206.jpg" alt="">
The ratio of property prices to household income for Adelaide peaked in December 2010 at 7.1 for houses and 5.9 for units.  In March 2016 the ratios were recorded at 6.5 for houses and 5.1 for units.  Affordability changed little over the year with the ratios recorded at 6.5 for houses and 5.3 for units in March 2015.  In September 2001, the ratios were recorded at 3.9 for houses and 2.9 for units.
<a href="https://blog.corelogic.com.au/wp-content/uploads/2016/06/Chart-6-1-580x206.jpg" target="_blank">Click to enlarge</a>
<img class="aligncenter size-large wp-image-7066" src="https://blog.corelogic.com.au/wp-content/uploads/2016/06/Chart-6-1-580x206.jpg" alt="Chart 6" width="580" height="206">
With Perth property prices falling, the ratio of prices to household income is also improving.  In March 2016, the ratio of prices to income was recorded at 6.0 for houses and 4.7 for units and a year earlier the ratios were 6.3 for houses and 5.1 for units.  At its peak in June 2007 the ratio of house prices to household income was 7.4 and for units the peak of 6.3 was recorded in December 2007.  In September 2011 the ratios of property prices to household income were recorded at 3.7 for houses and 3.3 for units.
<a href="https://blog.corelogic.com.au/wp-content/uploads/2016/06/Chart-7-580x207.jpg" target="_blank">Click to enlarge</a>
<img class="aligncenter size-large wp-image-7067" src="https://blog.corelogic.com.au/wp-content/uploads/2016/06/Chart-7-580x207.jpg" alt="Chart 7" width="580" height="207">
Although Hobart has the cheapest capital city property prices it is not the most affordable capital city housing market.  In March 2016, the ratio of property prices to household income was recorded at 5.8 for houses and 4.7 for units compared to 5.9 and 4.4 respectively a year earlier.  At its least affordable the ratio of prices to income was recorded at 6.5 for houses in September 2010 and 5.2 for units in March 2011.  In September 2011 the ratios were recorded at 3.1 for houses and 2.5 for units.
<img class="aligncenter size-large wp-image-7068" src="https://blog.corelogic.com.au/wp-content/uploads/2016/06/Chart-8-580x206.jpg" alt="Chart 8" width="580" height="206">
Based on a ratio of property prices and household incomes Darwin is currently the most affordable capital city housing markets with ratios of 5.2 for houses and 4.2 for units.  Affordability is improving in the city as property prices fall with these ratios recorded at 5.5 for houses and 4.3 for units a year earlier in March 2015.  At their peak over the September and December quarters of 2010 the ratio of house prices to income was 6.0 and the ratio for units was 4.7.  In September 2001 these ratios were recorded at 3.2 for houses and 2.7 for units.
<img class="aligncenter size-large wp-image-7069" src="https://blog.corelogic.com.au/wp-content/uploads/2016/06/Chart-9-580x205.jpg" alt="Chart 9" width="580" height="205">
In Canberra there is a divergence in results with houses becoming less affordable while affordability for units is remaining unchanged.  In March 2016, the ratios of prices to income were recorded at 5.8 for houses and 4.0 for units compared to 5.5 for houses and 4.0 for units a year earlier.  Canberra houses are at their least affordable level on record while units were their least affordable in December 2010 when they had a ratio of 4.4.  In September 2001 the ratios for Canberra were recorded at 3.6 for houses and 2.7 for units.
Outside of Sydney, Melbourne and Canberra housing affordability is improving with each capital city having a current ratio which indicates affordability has been worst in the past.
The problem is that almost 2 out of every 5 Australians live in either Sydney or Melbourne and these two cities have also been the epicentres of employment and economic growth over recent years. Deteriorating housing affordability in Sydney and Melbourne impacts on significantly more people than deteriorating housing affordability elsewhere around the country.
This measure of affordability provides a high level overview of the relative housing affordability across the capital cities, but it is important to remember that geographically across each city the affordability story can be dramatically different. 
Furthermore, this analysis does not take into consideration interest rates which can make housing affordability more affordable.  While interest rates are undoubtedly a consideration for buyers, they must also consider that interest rates can fluctuate dramatically over the life of a mortgage.
Cameron Kusher is research analyst for CoreLogic RP Data. You can contact him <a href="https://blog.corelogic.com.au/about/">here</a>.
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Property price to income ratio is rising in Sydney, Melbourne and Canberra but flat or falling elsewhere: CoreLogic 

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GUEST OBSERVER
Population growth nationally remains strong but continues to trend lower, meanwhile dwelling construction is booming creating a much closer relationship between housing supply and demand.
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Demographic data for December 2015 was released by the Australian Bureau of Statistics (ABS). The data showed that the national population was estimated at 23.9 million persons, with the population having increased by 326,073 persons over the 2015 calendar year. The annual increase in population has fallen substantially from a peak of 459,504 persons over the 12 months to December 2008.
While population growth (ie housing demand) has slowed, dwelling construction has increased to record highs. Over the 12 months to December 215, there was a record-high 190,072 dwellings constructed nationally. 
With an increasing population, and the majority of growth coming from overseas migration, additional demand for housing is created. The charts published in this report look at the ratio of population growth to dwelling completions.  A few important things to note from this analysis:
<ol>
<li>The figures don’t take into consideration demolitions and homes constructed for non-permanent or semi-permanent occupation (previously estimated by the RBA at approximately 15 percent)</li>
<li>Dwelling completions data may include construction of temporary accommodation such as hotels or serviced apartments</li>
<li>An increase in population doesn’t necessarily create more demand for housing. For example a family having a baby may not create an immediate requirement for more housing while a new arrival from overseas is more likely to create additional housing demand.</li>
</ol>
The latest housing and occupancy costs research from the ABS showed that the average household sizes across each state and territory in June 2014 was: 2.6 persons in NSW, Vic, Qld and ACT, 2.4 persons in SA and Tas and 2.7 persons in WA and NT.
<h3>Ratio of population growth to dwelling completions</h3>
<a href="/images/2016/07/06/2016-07-04--nsw-qld-image1.jpg" target="_blank">Click to enlarge</a>
 <img src="/images/2016/07/06/2016-07-04--nsw-qld-image1.jpg" alt="">
<a href="/images/2016/07/06/2016-7-04--nt_Act-image2.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2016/07/06/2016-7-04--nt_Act-image2.jpg" alt="">
If we look at the charts, over 2015 the ratios of population growth to dwelling completions have been recorded at: 2.4 in NSW, 1.9 in Vic, 1.6 in Qld, 1.0 in both SA and WA, 0.8 in Tas, 0.4 in NT and 1.3 in ACT. 
Based on these measures compared to the average household size it would appear that each state and territory is currently over-building however, there are some short-comings of this analysis as detailed above.  It is clear that the ratio compared to the long-run average implies that under-building is still taking place in NSW and Vic while over-building is occurring elsewhere.
Additionally, in most states, there has previously been a substantial undersupply of housing which will continue to overhang any overbuilding for a period of time.
Another thing to consider when looking at this analysis is the type of dwellings that are being constructed.  Units are becoming a much more prominent part of dwelling construction.  Units are often smaller and therefore likely to house fewer residents than a detached house which also has an impact on these figures.
Although this analysis doesn’t provide a definitive answer to whether too much construction is taking place it is clear that as population growth has slowed and dwelling construction has ramped-up there is now a much better relationship between housing supply and demand.  This is highlighted by the fact that in most states and territories there has been a sharp decline in the ratio of population growth to dwelling completions over recent years.
With many new dwellings under construction and even more approved to commence construction, developers should take heed of these figures and exercise caution when looking to undertake new projects.  As population growth trends lower and construction ramps up, housing shortages appear to be diminishing quite rapidly.
Cameron Kusher is research analyst for CoreLogic RP Data. You can contact him <a href="https://blog.corelogic.com.au/about/">here</a>.
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Dwelling completions boom as population growth slows: Cameron Kusher

The new <a href="https://www.apartments.com.au/new-apartments/yarraville-green-42-stephen-street-yarraville-vic-3013">Yarraville Green</a> development in Melbourne's inner west is showing that landscaping can be just as influential as architecture, with buyers responding strongly to the garden-first approach adopted from the outset by developer Excelon Projects and the project's design team.

Excelon appointed Six Degrees Architects and landscape architects SBLA to work collaboratively on the development, with a brief to create "a sustainable, design-led building with a focus on community."

That approach has resonated with buyers. According to Next Chapter Director Tom Hirini, who is leading the sales campaign, the landscaped communal garden has become one of the project's defining features, alongside its boutique scale and European-inspired cluster housing concept.

Local downsizers, right-sizers and established families already living in Yarraville and surrounding suburbs have accounted for the majority of purchasers.

[smartcode_project:default project_id=144913 project_image_fid=297740]

Yarraville Green will comprise 53 homes, including apartments and townhomes, arranged around the shared central garden to maximise connections to the landscaped open space. Parking has been moved underground, allowing the ground plane to be dedicated to greenery, pedestrian movement and communal spaces.

The landscape extends well beyond passive planting. Productive garden beds, a pergola, communal gathering spaces, garden sheds and a pet wash have all been integrated into the masterplan, creating spaces designed to encourage everyday interaction between residents.

[smartcode_project:default project_id=144913 project_image_fid=297741]

The interiors continue Excelon's focus on craftsmanship, incorporating bespoke elements by Melbourne artisans including leadlight detailing by Adadaz, hand-turned timber hardware by Auburn Woodturning and blown-glass lighting by Ruth Allen.

Sustainability has also been embedded throughout the project, with Yarraville Green targeting an average 7-star NatHERS energy rating through passive design principles, rooftop solar servicing common areas and rainwater harvesting for landscape irrigation.

[smartcode_project:default project_id=144913 project_image_fid=297735]

Construction continues to progress at Yarraville Green, with structural works well underway and framing works approaching completion under builder Balmain &amp; Co. The project remains on track for completion in mid-2027.

Apartments at Yarraville Green are currently priced from $625,000, while townhomes start from $1.4 million.

[smartcode_project_cta:default project_id=144913]

Joel Robinson

Garden-led design drives buyer demand at Yarraville Green

National diversified developer Fortis has officially launched Crest &amp; Walker, its latest Brisbane apartment development, with construction now underway on the 20-storey Newstead project.

Award-winning builder BINAH has commenced construction on the Bureau^Proberts-designed building, which will deliver a limited collection of 65 two and three-bedroom apartments on Kyabra Street.

[smartcode_project:default project_id=145922 project_image_fid=373556]

The project marks Fortis' fourth active residential development in Brisbane, following River House, which is nearing completion, alongside projects in New Farm and Hamilton as the national developer continues to expand its South East Queensland pipeline.

Fortis General Manager – Development Queensland Dan Boman said Crest &amp; Walker reflects the developer's long-term commitment to delivering design-led residential projects in Brisbane's established inner-city suburbs.

"We're proud to be strengthening our presence in Brisbane with Crest &amp; Walker, particularly in such a sought-after lifestyle destination as Newstead," Boman said.

"Every Fortis project is shaped by its context, and we approach each one with the respect and care it deserves.

"Our focus is always on creating places that feel connected to their neighbourhood and elevate the everyday experience for residents. Newstead continues to evolve as one of Brisbane's most sought-after urban communities, and Crest &amp; Walker reflects our ambition to contribute meaningfully to that story."

[smartcode_project:default project_id=145922 project_image_fid=373559]

Positioned between Gasworks Plaza and James Street, <a href="https://www.apartments.com.au/new-apartments/crest-walker-newstead-12-kyabra-street-newstead-qld-4006">Crest &amp; Walker</a> has been designed as a boutique residential address offering privacy and generous living spaces within one of Brisbane's most established lifestyle precincts.

The building features a contemporary brick podium softened by integrated landscaping, while the upper levels are characterised by restrained architecture and enduring materiality. Interiors have been designed to maximise natural light, acoustic performance and long-term liveability.

[smartcode_project:default project_id=145922 project_image_fid=373583]

Residences comprise spacious two and three-bedroom floorplans, with two-bedroom apartments priced from $1.55 million and three-bedroom, half-floor residences from $3.95 million.

Residents will have access to a wellness-focused rooftop featuring a swimming pool, sauna, steam room, landscaped dining spaces and outdoor lounge areas overlooking Newstead and the Brisbane CBD.

[smartcode_project:default project_id=145922 project_image_fid=373571]

Sales are being managed by Slaite Projects, with Fortis expecting strong demand from owner-occupiers seeking a high-quality, design-focused apartment in one of Brisbane's most tightly held inner-city suburbs.

Completion of Crest &amp; Walker is slated for late 2028.

[smartcode_project_cta:default project_id=145922]

Fortis expands Brisbane pipeline with launch of Crest & Walker in Newstead

The enormity of delivering a true skyscraper in Australia's new development market is often overlooked.

It has taken the best part of a decade since plans for Chevron One were first unveiled, but the 41-storey tower is now complete, with residents collecting their keys and moving into what has become one of the Gold Coast's most recognisable new landmarks.

Rising 127 metres above Chevron Island, Chevron One stands almost twice as high as any other building on the island. Its scale places it alongside the trio of towers at Jewel, arguably the last truly significant addition to the central Gold Coast skyline when they were completed around six years ago.

While there are several developments underway around a similar height to Chevron One, they are more concentrated within clusters of the highest towers in the city. The fact Chevron One sits within a developing precinct, looking back at the other high-rise developments in Surfers Paradise and Broadbeach, makes it a different proposition altogether. It will certainly become a reference point on the Gold Coast skyline.

[smartcode_project:default project_id=6515 project_image_fid=68833]

Developer Bensons Property Group is behind the 41-storey tower, which has 229 apartments, along with an exhaustive list of resident amenity spread across what is the largest development site ever assembled on Chevron Island.

The tower has been the talk of the town for years, says Ray White Projects Gold Coast agent Caitlin Rosenboom, who is selling the remaining apartments.

"People have been watching Chevron One go up for years," Rosenboom says, adding that many prospective buyers have been surprised by the scale of the views once they step inside.

"It's only when they walk through a completed apartment that they truly understand the position of the building," Rosenboom says.

"The views are jaw-dropping. Whether you're looking east over the ocean, across Surfers Paradise, along the river systems or out to the hinterland, every level offers something different but equally impressive."

[smartcode_project:default project_id=6515 project_image_fid=360215]

One of Chevron One's defining advantages is its location on the eastern side of Chevron Island on Stanhill Drive, a position which protects the views forever.

"There's only one row of houses between Chevron One and the water, and the height restrictions along the river means views from Chevron One can never be built out,"&nbsp;Rosenboom says.

While new apartment developments continue to emerge across the Gold Coast, Rosenboom says opportunities to secure a completed apartment with this level of outlook are becoming increasingly rare.

"The size of the site is something that would be incredibly difficult to replicate today," she says.

"That's allowed Chevron One to deliver the sort of amenity, open space and resident facilities that very few projects can offer. There are not many completed apartment buildings on the Gold Coast right now that can compete with the combination of scale, quality and amenity."

[smartcode_project:default project_id=6515 project_image_fid=68839]

There's around 2,000 sqm of amenity solely for the use of residents of Chevron One. Club One features a uniquely shaped swimming pool that mirrors the footprint of the building itself, set within a extensively landscaped gardens. There's also an indoor pool and spa, a fully equipped gym with a Pilates room, a yoga garden, a bookable private dining area and lounge that can host up to 30 people, and a 24-hour concierge service.

As for the buyers, Rosenboom is fielding enquiry from everywhere: Sydneysiders and Melburnians looking at the new and off-the-plan market following the changes in the Federal Budget, as well as those looking to relocate, through to South East Queenslanders seeking either a permanent home or a weekender bolthole.

"The Gold Coast lifestyle continues to resonate with people relocating from the southern states, and when they see the views and the quality of what's been delivered at Chevron One, it becomes very easy for them to understand the appeal," Rosenboom says.

A diverse mix of one, two and three-bedroom apartments remain available, with each offering "something a little different", be it the orientation and views, configuration, or level, to suit a wide variety of buyers.

The remaining apartments are ready to inspect in person, by appointment.

[smartcode_project_cta:default project_id=6515]

A decade in the making: Residents to move into Chevron One as construction wraps up

A general rule of thumb in new apartment developments is that the penthouses get the rooftop.

It's a formula that's become commonplace across Australia's apartment market. Residents might have access to a pool, gym or barbecue facilities on a dedicated lower level, but the most desirable outdoor spaces are typically reserved for the highest-priced homes at the top of the building.

<a href="https://www.apartments.com.au/developers/sherpa-property-group">Sherpa Property Group</a> has taken the opposite approach.

Rather than dedicating the rooftop to a handful of buyers, the Gold Coast developer has made it the centrepiece of its Flourish collection, creating expansive shared spaces from the best vantage point in the building.

The philosophy has reached its most ambitious expression at <a href="https://www.apartments.com.au/new-apartments/flourish-soleira-palm-beach-1150-1160-gold-coast-highway-palm-beach-qld-4221">Flourish Soleira</a> in Palm Beach, where two rooftop precincts connected by a skybridge will deliver one of the most extensive lifestyle offerings seen in a residential apartment project on the Gold Coast.

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"We're seeing a clear move toward developments that offer more than just an apartment," Sherpa Group founder Christie Leet said.

"People want spaces that support how they actually live, whether that's working from home, staying active, or spending time with family and friends.

"That's where amenity becomes critical. It's not just about what's included, but how those spaces are designed to be used every day."

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The breadth of amenity has already attracted buyers across multiple demographics. Younger first home buyers have been drawn to Soleira's one-bedroom apartments, a product rarely delivered in Palm Beach, while families have responded to practical inclusions such as the shallow children's pool adjoining the main lap pool and the extensive communal recreation areas.

Instead of a single rooftop, Soleira delivers two distinct lifestyle zones.

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The southern rooftop has been dedicated to wellness, featuring a gym, yoga and Pilates studio, work-from-home facilities, a wellness centre, spa, and hot and cold plunge pools.

The northern rooftop focuses on recreation and entertaining, incorporating a heated resort-style pool, private dining rooms, pizza ovens, barbecues, a golf simulator, children's recreation areas, and what is expected to be the Gold Coast's first rooftop basketball court, which will also double as a squash court.

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Beyond the rooftops, Soleira will introduce 1,500 sqm of curated retail beneath the towers, creating one of Palm Beach's first genuinely mixed-use lifestyle precincts where cafés, restaurants and convenience retail become part of residents' everyday lives.

Sherpa has also retained management rights across the development, allowing it to oversee the long-term operation of the building through a 24-hour concierge model. The developer is also exploring additional revenue streams within the precinct aimed at helping offset ongoing body corporate costs for residents.

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While Soleira is the largest project Sherpa has delivered, the rooftop-first philosophy has been evolving for several years.

It began with <a href="https://www.apartments.com.au/new-apartments/amargo-6-12-sixth-avenue-palm-beach-qld-4221">Flourish Amargo</a>, the first project released under the Flourish brand. Rather than competing at the ultra-luxury end of the market with oversized half-floor and full-floor residences, Sherpa focused on creating lifestyle-driven apartments supported by resort-style shared spaces.

Amargo introduced more than 800 sqm of rooftop amenity, combining wellness facilities, heated pools, entertaining areas, cabanas, pizza ovens and private dining spaces into what was designed as an extension of residents' homes rather than a facility used only occasionally.

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That approach continued with Flourish Oasis, where the same amenity-led philosophy was refined into a more boutique development. Strong demand from Sherpa's growing VIP database saw much of the project sold before it reached the broader market, reinforcing buyer appetite for apartment communities centred around shared lifestyle experiences.

Flourish Amargo is slated for completion mid-way-through next year, with Oasis to be delivered by late 2027. Flourish Soleira is expected to complete in 2030.

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Sherpa takes amenity to the sky as Flourish Soleira captures booming Palm Beach demand

As apartment living continues to evolve across Sydney's growth corridors, the quality and distribution of shared spaces is increasingly shaping how residents experience home. Rather than functioning as add-ons, amenities are being embedded into the daily rhythm of a building, supporting everything from quiet retreat to social interaction, often within a single vertical community.

At <a href="https://www.apartments.com.au/new-apartments/aeris-melrose-park-nursery-street-melrose-park-nsw-2114">Aeris</a> in Melrose Park, this approach is resolved through a layered amenity offering that unfolds from ground level through to its upper podium. Developed by <a href="https://www.apartments.com.au/developers/sekisui-house-australia">Sekisui House Australia</a> in partnership with Hankyu Hanshin Properties, the project introduces 468 apartments across two towers and a mid-rise building, positioned at the highest point of the broader masterplan.

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The amenity experience begins at street level, where two courtyards sit within a landscaped setting that connects residents to the wider network of parks and green spaces. These green spaces are not isolated pockets but part of a wider pedestrian network that links Aeris to the surrounding <a href="https://www.apartments.com.au/developments/melrose-park-nsw-2114">Melrose Park</a> precinct, including Central Park, future schools, and the Town Centre opening in July 2026. The result is a transition that moves from public to private without abrupt boundaries, allowing residents to pass through shaded, tree-lined environments before reaching the building itself.

Moving upward, the focus shifts to the level five podium, where the primary communal facilities are concentrated. This space brings together a 16-metre swimming pool, outdoor seating areas, and a communal BBQ zone arranged to take advantage of elevated outlooks. Seating is positioned beneath pergolas, creating pockets of shade that extend the usability of the space throughout the day. The pool edge aligns with views toward the wider district, reinforcing the sense of elevation that defines the project’s positioning.

In the adjacent building, this is complemented by quieter, more contemplative spaces, including an outdoor cinema set within the same level. Positioned to operate primarily in the evening, it introduces a different tempo to the shared environment, shifting from daytime activity to after-hours use without requiring separate zones.

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The podium also accommodates an intimate private resident gym. Located on the lower levels, it gives residents convenient access to fitness facilities without leaving the building.

Above, the elevated podium sky deck extends the amenity offering, providing additional open-air spaces with elevated outlooks across the surrounding landscape. While more restrained in program, this upper level reinforces the project’s vertical progression, from ground-level greenery to elevated outlook, allowing residents to move between distinct spatial conditions within a single address.

This distribution of amenities reflects a deliberate response to how residents use space across the day. Sekisui House Australia Sales and Marketing Director Peter Kalaf points to the role these shared areas play in shaping buyer demand. Aeris has been conceived as more than a collection of apartments, with the podium pool, gym and outdoor cinema forming part of a broader lifestyle offering that extends the home beyond each individual residence.

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What distinguishes Aeris is not the inclusion of these elements individually, but how they are arranged in relation to one another. Active, social, and passive spaces are layered vertically rather than separated, allowing residents to choose between them without leaving the building or moving far from their apartment. This proximity supports both routine use, such as a morning swim or evening workout, and more occasional gatherings, whether around the BBQ area or within the cinema setting.

The amenity design also sits within a broader framework of connectivity across Melrose Park. The Melrose Park Town Centre, anchored by Coles and Dan Murphys, features a mix of retail, dining, health and lifestyle offerings, bringing everyday convenience closer to residents. By the end of the year, more than five hectares of parks and open space, equivalent to around seven football fields of green space on residents' doorstep, will further enhance the precinct, allowing the internal facilities at Aeris to operate as an extension of the wider neighbourhood rather than a substitute for it.

Construction at Aeris continues to gather momentum, with ground floor slabs expected to be completed in late 2026 before the first sections of the buildings begin to rise above ground.

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Cameron Kusher

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