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Housing markets show different performances geographically as well as across product types and pricing points.  
Across the capital cities, a useful measure of capital gain across broad price points is our stratified hedonic index.  
The CoreLogic RP Data Stratified Hedonic Index looks at the movement in home values across three broad value based segments of the housing market.  The three segments are divided across quartiles and provide an insight about capital gains across the most affordable 25% of capital city suburbs, the middle 50% of capital city suburbs and the most expensive 25% of capital city suburbs.
<a href="/images/2015/11/23/Chart-11.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2015/11/23/Chart-11.jpg" alt="">
 
Over the 12 months to October 2015, dwelling values across the combined capital cities increased by 8.2% across the most affordable suburbs, 9.6% across the middle priced suburbs and 11.4% over the most expensive suburbs.  The trends are somewhat different over the past three months with the most affordable suburbs recording the strongest value rises.  
Over the period, the most affordable suburbs have seen values increased by 1.5% compared to 1.2% growth across the middle market and a 1.3% increase in values across the most expensive suburbs.  Over the current growth phase, which broadly commenced in June of 2012, combined capital city home values have increased by 26.5% across the most affordable quarter of capital city suburbs, by 32.4% across the ‘middle’ of the market and by 33.7% across the most expensive quarter of suburbs.
<a href="/images/2015/11/23/Chart-21.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2015/11/23/Chart-21.jpg" alt="">
 
Looking at the data across the five largest capital cities shows some quite different results.  Across the most affordable capital city suburbs, home value changes over the past year have been recorded at +14.3% in Sydney, +8.8% in Melbourne, +3.1% in Brisbane, +3.4% in Adelaide and -1.4% in Perth.
  Looking at the middle 50% of suburbs the value changes over the past year have been recorded at: +14.8% in Sydney, +11.2% in Melbourne, +4.6% in Brisbane, +2.6% in Adelaide and -2.9% in Perth.  Finally the most expensive quarter of the market recorded value changes over the past year of +17.1% in Sydney, +14.6% in Melbourne, +3.5% in Brisbane, +1.5% in Adelaide and -4.3% in Perth. 
Based on these results you can see that it has been the most expensive suburbs recording the greatest value rises in Sydney and Melbourne with the most affordable suburbs recording the slowest rate of growth.  In Brisbane the middle market is seeing the greatest rise in values while the most affordable suburbs are seeing the slowest rate of growth. In Adelaide and Perth the best performed segment is the most affordable end of the market with the most expensive suburbs the weakest. Note that in Perth all three segments analysed have recorded value falls over the past year.
Focussing on quarterly data, the most affordable suburbs have been the strongest for growth in Melbourne, Adelaide in Perth. The middle market has recorded the strongest value growth over the quarter in Brisbane while in Sydney the most expensive suburbs have recorded the highest rate of value growth.
The differing performance of the segments provides a good insight into the current market dynamics as to where housing demand is strongest.  In Sydney and Melbourne it is typically higher priced stock, in Brisbane it is the middle market and in Adelaide and Perth demand is largely for more affordable housing stock. 
As the rate of growth slows in Sydney and Melbourne we are likely to see the profile of where demand is strongest also change in those cities.  Furthermore, if Sydney and Melbourne buyers look to purchase in other cities they may be able to afford more expensive stock than the local buyers in Brisbane, Adelaide and Perth.  As a result we may see higher levels of value growth across the higher priced market segments.
Cameron Kusher is research analyst for CoreLogic RP Data. You can contact him <a href="https://blog.corelogic.com.au/author/cameron-kusher/" target="_blank">here</a>.
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Different magnitudes of market value changes: Cameron Kusher

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Last week, 3,226 properties were taken to auction which was the highest number of auctions this spring and up from 2,947 auctions the previous week.
Although auction volumes rose, so too did the preliminary auction clearance rate which was recorded at 63.8%, up from 61.4% over the previous week.  
The higher auction clearance rate was largely due to a large volume of auctions in Melbourne over the week and a slightly higher auction clearance rate as well as a moderate lift in clearance rates in Sydney.  At the same time last year, there were a higher number of auctions over the week (3,360) as well as a higher auction clearance rate (68.5%).
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<img src="/images/2015/12/cap-cities.jpg" alt="">
 
Melbourne auction volumes rose sharply over the week with 1,548 properties auctioned last week up from 1,204 over the previous week. So far, we have captured results for 1,362 of these auctions.  The preliminary auction clearance rate was slightly higher last week (69.5%) compared to the previous week (69.0%) however, it was the fourth successive week that the Melbourne market recorded clearance rates below 70%.  Over the same week in 2014, Melbourne had a lower auction clearance rate of 68.9% across a lower 1,504 auctions.  Across the individual regions of the city; Inner (70.1%), Inner South (70.7%), Outer East (70.9%) and West (75.2%) were the only regions to record clearance rates above 70%.  The Mornington Peninsula with a clearance rate of 64.8% had the lowest clearance rate across the city.
<a href="/images/2015/11/16/melbourne.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2015/11/16/melbourne.jpg" alt="">
 
The preliminary auction clearance rate for Sydney was recorded at 61.0% last week across 1,200 auctions, of which we currently have results for 880 auctions.  The preliminary clearance rate has rebounded from a final clearance rate of 58.4% the previous week from a slightly higher 1,248 auctions.  Sydney auction clearance rates are now below 70% for seven consecutive weeks.  Over the same week a year ago, Sydney had a much higher auction clearance rate of 73.1% across a higher 1,417 auctions.  The only regions of the city to record a clearance rate above 70% were: City and Inner South (73.3%), Eastern Suburbs (76.6%) and North Sydney and Hornsby (71.1%).  At the same time, Central Coast (34.8%) and South West (34.2%) each had clearance rates below 40% over the week.
<a href="/images/2015/11/16/Sydney.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2015/11/16/Sydney.jpg" alt="">
 
There were 198 Brisbane properties taken to auction last week, of which we have results for 122 auctions. The preliminary data indicates that 45.9% of these auctions were successful.  Over the previous week, both the number of auctions (168) and the clearance rate (37.7%) was lower.  At the same time last year there were fewer properties taken to auction (142) however, the clearance rate was at a similar level (45.8%).  Gold Coast had a preliminary auction clearance rate of 48.0% with results capturing for 50 of the 80 total auctions.
<a href="/images/2015/11/16/brisbane.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2015/11/16/brisbane.jpg" alt="">
 
Adelaide recorded a preliminary auction clearance rate of 49.4% last week which was lower than the 58.1% clearance rate over the previous week.  The clearance rate was calculated from 81 results across 119 total auctions which is lower than the 146 total auctions for the previous week.  At the same time last year there were 152 auctions with a clearance rate of 55.4%.
<a href="/images/2015/11/16/adelaide.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2015/11/16/adelaide.jpg" alt="">
 
In Perth there were 38 auctions last week with 18 results so far.  The preliminary clearance rate was recorded at 50.0%, up from 16.2% the previous week.  The preliminary clearance rate is slightly higher than the 45.5% at the same time last year across 57 auctions.
Canberra’s preliminary auction clearance rate last week was 66.1% which was down from 76.6% over the previous week. The city had 100 auctions this week with 62 results so far which is a lower number of total auctions compared to the 122 the previous week.
Of the 10 Tasmanian auction results reported so far this week, 6 sales have been recorded.
 
Cameron Kusher is research analyst for CoreLogic RP Data. You can contact him <a href="https://blog.corelogic.com.au/author/cameron-kusher/" target="_blank">here</a>.
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Combined capital city auction clearance rates rise: Cameron Kusher

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The Australian Bureau of Statistics (ABS) released housing finance data for September 2015 earlier this week.
<a href="/images/2015/11/12/Screen%20Shot%202015-11-12%20at%2010.10.17%20AM.png" target="_blank">Click to enlarge</a>
<img src="/images/2015/11/12/Screen%20Shot%202015-11-12%20at%2010.10.17%20AM.png" alt="" width="623" height="488">
 
The broad housing finance trends show that demand from the owner occupier segment of lending is falling while demand from investors fades.  Of course since late December last year we have seen limits come into effect regarding annual investment credit growth as well as, more recently, higher interest rates for all investment borrowers and lower loan to value ratios for many.  
Given these changes it is no real surprise that demand from this market segment is falling; there is less investment borrowing to be had and lower LVRs mean that for many borrowers negative gearing becomes somewhat less attractive. On the other hand, demand from owner occupiers is rising, largely from upgraders and those refinancing while there is little sign that first home buyer demand is rising. 
Much of the recent refinance activity has subsequently translated into eventual housing investment, it will be interesting to see if the current refinance activity is just home owners shopping around for a better mortgage deal or if it will start to flow to investment in other asset classes.
<a href="/images/2015/11/12/Chart-2.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2015/11/12/Chart-2.jpg" alt="">
 
Looking more closely at owner occupier lending, the seasonally adjusted data shows that there was $21.0 billion worth of commitments in September 2015.  This represented a monthly increase of 3.0% and a year-on-year rise of 23.1%. The $21.0 billion consisted of $1.8 billion in lending for construction of dwellings, $1.3 billion in lending for purchase of new dwellings, $6.7 billion in lending for refinances and $11.2 billion in lending for purchase of established dwellings. 
Each of the four components of owner occupier housing finance commitments have increased over the month with most having increased year-on-year.  Year-on-year, the changes have been recorded at -1.3% for lending for construction of dwellings, +32.1% for lending for purchase of new dwellings, +30.0% for refinances and +23.0% for purchases of established dwellings. 
Clearly owner occupier demand is rising however, the ABS does note that ADIs are currently making changes to lending classifications which are seeing more investor loans classified as loans to owner occupiers. This will be contributing to a proportion of this rise, how big that proportion is we are unsure.
<a href="/images/2015/11/12/Chart-3.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2015/11/12/Chart-3.jpg" alt="">
 
In September 2015 there was a seasonally adjusted $12.3 billion worth of housing finance commitments to investors, this was the lowest value of investor lending since August 2014.  The monthly value of lending to investors has fallen by -12.8% from its peak of $14.1 billion in April 2015.  The $12.3 billion figure consists of $0.6 billion in lending for new construction which is the lowest level in a year and $11.7 billion in lending for established homes which is the lowest level since August of last year.  Lending for new construction tends to be volatile however, it has fallen by -42.2% from its recent peak of $1.1 billion worth of commitments in December 2014.  The less volatile investment lending for established homes has fallen by -11.0% from its peak of $13.1 billion in April 2015.  Again, recent reclassifications of lending by ADIs will be contributing to some of the recent weakness however, a changing investment lending landscape is undoubtedly the most significant contributor.
The latest housing credit data shows that the annual rate of investor credit growth still remains above 10% (10.4%) so it is reasonable to expect that investor housing finance commitments will continue to fall over the coming months. With the rate of value growth slowing, higher interest rates and lower LVRs for many investors, the attractiveness of purchasing an investment property is also easing. 
While investment lending has been cooling down, owner occupier lending has been rising however, much of the rise is due to upgraders and refinances.  We anticipate that this trend is likely to continue although probably not rising by the same magnitude as we’ve seen over recent months. Furthermore we anticipate that less of the refinance activity is going to flow back into housing in the form of investment purchasing.
 
Cameron Kusher is research analyst for CoreLogic RP Data. You can contact him <a href="https://blog.corelogic.com.au/author/cameron-kusher/" target="_blank">here</a>.
 
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Investor housing demand continues to fall sharply: Cameron Kusher

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The Australian Bureau of Statistics (ABS) released quarterly Consumer Price Index data for September 2015. The data showed that headline inflation was recorded at 0.5% for the quarter and was 1.5% higher over the year.
<a href="/images/2015/10/28/Chart-14.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2015/10/28/Chart-14.jpg" alt="">
 
As the above chart shows, at 1.5%, headline inflation is below the Reserve Bank’s target range of between 2.0% and 3.0% per annum.  While the headline figure is important, the RBA also likes to look at measures of underlying inflation which exclude some of the more volatile items.  Both measures of underlying inflation; the trimmed mean and the weighted median were recorded at a lower 0.3% over the quarter and have increased by 2.1% and 2.2% respectively over the past year.  These annual increases place underlying inflation within the lower band of the RBA’s target range, it would also indicate that if the RBA felt it necessary they have scope to reduce official interest rates.
<a href="/images/2015/10/28/Chart-23.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2015/10/28/Chart-23.jpg" alt="">
The effects of inflation are also an important factor to consider for housing markets.  Although we generally talk about home value growth in nominal terms, real or inflation-adjusted home value changes are also important to consider.  Over the 12 months to September 2015, combined capital city home values have increased by a nominal rate of 11.0% however, in real terms that figure drops to 9.4%.  The above chart shows the annual rate of value change across the individual capital cities in both nominal and real terms.  It highlights once again the significant difference in value growth conditions in Sydney and Melbourne relative to the other capital cities.
<a href="/images/2015/10/28/Chart-32.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2015/10/28/Chart-32.jpg" alt="">
 
In real terms home values have only increased over the past five years in Sydney and Melbourne.  On a compound annual basis, falls have been recorded at -1.7%pa in Brisbane, -2.0%pa in Adelaide, -1.5%pa in Perth, -3.5%pa in Hobart, -3.9%pa in Darwin and -1.4%pa in Canberra.  Real home values have increased at a rate of 4.9%pa over the past five years in Sydney and 1.7%pa in Melbourne.  Over the past decade, real home values have fallen in Hobart and have risen at a rate of less than 2%pa in Brisbane, Adelaide and Canberra.
<a href="/images/2015/10/28/Chart-4.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2015/10/28/Chart-4.jpg" alt="">
 
To further highlight the differences across the cities it is valuable to have a look at nominal and real value growth across the capital cities since 2008.  Between March and December of 2008 combined capital city home values fell by a nominal -6.1% or a real -8.3%.  On the back of aggressive interest rate cuts and stimulus in the form of the Boost to the First Home Owners Grant, values began to rise from that point.  Although combined capital city home values have increased since 2008, this is largely by virtue of strong value growth in Sydney and Melbourne.  In fact, real home values are currently lower in Brisbane (-5.2%), Adelaide (-5.4%), Perth (-3.0%) and Hobart (-16.1%) than they were at the end of 2008, almost eight years of no real value growth in these cities.  Real value rises have been moderate since 2008 in Darwin (5.0%) and Canberra (4.1%) and substantially greater in Sydney (51.4%) and Melbourne (41.9%).
<a href="/images/2015/10/28/Chart-5.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2015/10/28/Chart-5.jpg" alt="">
The above chart looks at the change in real home values on a quarterly basis since their previous peak.  What is immediately noticeable is that Sydney (+24.3%) and Melbourne (+8.9%) are the only cities in which values are now higher than their previous peaks.  The journey to get back above their peaks was somewhat different, Sydney took 41 quarters to eclipse its March 2004 peak while Melbourne took 19 quarters to eclipse its September 2010 peak.  Across each remaining capital city, real home values are below their previous peaks, the figures for each city are: -11.8% in Brisbane, -10.0% in Adelaide, -13.0% in Perth, -21.3% in Hobart, -17.9% in Darwin and -8.1% in Canberra.  For Brisbane, Perth and Hobart in particular the journey back to the previous peak has proven to be long with these markets previously peaking in March 2008, September 2007 and December 2007 respectively.
As values continue to rise in Sydney and Melbourne and show falls or moderate nominal growth in other capital cities, the affordability gap will continue to widen.  At some point these other capital city markets will once again become attractive to buyers.  Importantly this won’t be driven by affordability factors alone; employment opportunities, amenity and local infrastructure, amongst other factors, will be important factors.  The data also highlights that long periods of value falls do happen in the Australian housing market and clearly housing is not a one-way bet.  The broader statistics do tend to be overshadowed by the impact of the Sydney and Melbourne housing markets who are substantially bigger than all other capital cities.
 
Cameron Kusher is research analyst for CoreLogic RP Data. You can contact him <a href="https://blog.corelogic.com.au/author/cameron-kusher/" target="_blank">here</a>.
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Real home values remain below previous peak: Cameron Kusher

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The moderation in the rate of growth across our combined capital cities index in September is likely to be a positive development for Australian regulators such as the Reserve Bank and APRA who have been highlighting concerns about the strong rate of value growth in Sydney and Melbourne.
Of course it is only one month and it will be interesting to see whether the slowing trend will persist, particularly as we head into the busy spring selling season. 
<a href="/images/2015/10/16/Screen%20Shot%202015-10-16%20at%208.51.33%20PM.png" target="_blank">Click to enlarge</a>
<img src="/images/2015/10/16/Screen%20Shot%202015-10-16%20at%208.51.33%20PM.png" alt="" width="436" height="370" style="line-height: 1.3em;">
The annual expansion in investor-related housing credit has continued at a pace that is higher than APRA’s mandated 10% growth per annum however, July figures from the Reserve Bank show credit for investment housing has increased by 10.8% over the year, down from growth of 11.1% the previous month.
Furthermore, in June investor housing credit rose by 0.6% which was its slowest monthly increase since October 2013. With many banks now placing a premium on investment mortgage interest rates and also increasing serviceability limits on all mortgages we may be starting to see the first evidence of a cooling in investment housing demand.
<a href="/images/2015/10/16/Screen%20Shot%202015-10-16%20at%208.58.44%20PM.png" target="_blank">Click to enlarge</a>
<img src="/images/2015/10/16/Screen%20Shot%202015-10-16%20at%208.58.44%20PM.png" alt="" width="414" height="161">
The cumulative effect of tighter lending conditions, more expensive mortgage rates for investors and lower yields, as well as natural affordability constraints and higher levels of new housing supply, is likely to dampen some of the exuberance we have seen across the Sydney and Melbourne housing market. Listing numbers are already showing their seasonal spring climb which will provide a timely test of the housing markets strength through spring.
<a href="/images/2015/10/16/Screen%20Shot%202015-10-16%20at%209.13.16%20PM.png" target="_blank">Click to enlarge</a>
<img src="/images/2015/10/16/Screen%20Shot%202015-10-16%20at%209.13.16%20PM.png" alt="" width="555" height="528">
Furthermore auction clearance rates have been trending lower in both Sydney and Melbourne over the past couple of months potentially highlighting a moderation in the rate of home value growth in these cities.
<a href="/images/2015/10/16/Screen%20Shot%202015-10-16%20at%209.00.28%20PM.png" target="_blank">Click to enlarge</a>
<img src="/images/2015/10/16/Screen%20Shot%202015-10-16%20at%209.00.28%20PM.png" alt="" width="620" height="436">
Cameron Kusher is research analyst for CoreLogic RP Data. You can contact him <a href="https://blog.corelogic.com.au/author/cameron-kusher/" target="_blank">here</a>.
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Potential cooling in investment housing demand: Cameron Kusher 

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Lending finance data for August 2015 was released by the Australian Bureau of Statistics (ABS). 
The latest data paired with the previously released housing finance commitments data shows that lending to investors has slowed sharply over recent months following the regulatory changes from APRA and the subsequent changes to lending policies from most mortgage lenders.
<a href="/images/2015/10/13/Chart-13.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2015/10/13/Chart-13.jpg" alt="">
The above chart shows the proportion of new lending to investors across each state and territory in August 2015.  Note that when we say new lending we exclude refinances as they are not associated with a new purchase of property.  New South Wales had the greatest proportion of new lending to investors over the month however, we have seen lending to this segment of the market slow across each state and territory.
<a href="/images/2015/10/13/Chart-22.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2015/10/13/Chart-22.jpg" alt="">
 
Mortgage lending to investors peaked in May 2015 prior to most Australian ADI’s implementing changes to lending policies relating to investment mortgages.  At that time, the proportion of new lending to investors was much higher in each state and territory than it is currently.  In each state and territory there has been a significant decline in the value of new lending to investors between May and August of this year.  Across each state and territory the magnitude of the fall in investor lending has been recorded at: -10.5% in NSW, -14.0% in Vic, -15.2% in Qld, -17.0% in SA, -10.1% in WA, -10.0% in Tas, -35.6% in NT and -23.5% in ACT.
While new lending to investors has fallen away over recent months, there has been a rise in new lending to owner occupiers across some states and territories while others have seen falls across owner occupier lending too.  Between May 2015 and August 2015 the changes in the value of new lending to owner occupiers have been recorded at: +22.1% in NSW, +16.5% in Vic, +4.2% in Qld, +4.1% in SA, -2.4% in WA, -8.3% in Tas, -8.1% in NT and -10.8% in ACT.
As investor lending is slowing in NSW and Vic, lending to owner occupiers is generally picking-up which should help offset some of the slowdown in investment loans.  Elsewhere there has been no significant increase in owner occupier lending, or owner occupier lending has fallen; given this the data release may point to ongoing weaker housing market conditions outside of the two most populous states.
It’s important to note that this data only includes mortgage lending domestically.  What is not clear is to what extent the weakness in investor demand domestically over recent months is being offset by an uptick in demand from overseas.
Cameron Kusher is research analyst for CoreLogic RP Data. You can contact him <a href="https://blog.corelogic.com.au/author/cameron-kusher/" target="_blank">here</a>.
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Sharp dip in investor housing demand since May: Cameron Kusher

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The Australian Bureau of Statistics (ABS) released housing finance data for August 2015 earlier this week.  
The data broadly showed a further pick-up in owner occupier lending and a slowing in investor lending. It is important to reconcile this against numerous reports that many mortgagees have been quick to advise their lenders that their properties which were formerly investment properties are now in fact owner occupied. 
This is due to the fact that most lenders are now charging a premium for investment mortgages.
<a href="/images/2015/10/09/Chart-11.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2015/10/09/Chart-11.jpg" alt="">
 
The above chart details the components of those borrowing over time. What’s immediately noticeable is that while there has been a recent surge in lending to investors, over recent months there has been a clear fall in lending to this cohort. 
While investment lending is slowing, owner occupier lending is rising however, there has been very little bounce in lending to first home buyers. For the most part the rise in owner occupier lending is being fuelled by an escalation in both refinances and borrowing for new loans to non-first home buyers. Again, it is important to note some of these figure may be being affected by re-classifications of mortgages.
<a href="/images/2015/10/09/Screen%20Shot%202015-10-09%20at%203.59.33%20PM.png" target="_blank">Click to enlarge</a>
<img src="/images/2015/10/09/Screen%20Shot%202015-10-09%20at%203.59.33%20PM.png" alt="" width="785" height="305"> 
In August 2015, owner occupiers committed to $20.8 billion worth of housing finance, a 6.1% rise over the month and a 26.5% year-on-year rise.  Looking at the components of owner occupier lending there was $1.7 billion in lending for construction of dwellings, $1.2 billion in lending for purchase of new dwellings, $6.4 billion in refinances of established dwellings and $11.5 billion for purchase of other established dwellings. 
The 6.1% monthly rise in owner occupier lending was largely fuelled by a 10.4% rise in lending for purchase of established dwellings however, each component rose.  Refinances have typically been the greatest source of growth in owner occupier lending however, they recorded the slowest growth of any segment over the month.  Looking at year-on-year changes, lending for construction of dwellings rose 0.5%, lending for purchase of new dwellings rose 17.6%, refinances of established dwellings rose 26.7% and purchase of established dwellings increased by 32.6%.  
Over the coming months we will be watching closely to see whether the growth in owner occupier lending can be maintained, particularly in the face of falling population growth and no real increase in activity from first home buyers.
<a href="/images/2015/10/09/Chart-31.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2015/10/09/Chart-31.jpg" alt="">
 
Switching the focus to the investor segment, there was $13.6 billion worth of commitments to investors in August 2015. The value of lending to investors was -0.4% lower over the month but 12.0% higher year-on-year. It was also the first time in 13 months that the value of new lending (excluding refinances) was greater to owner occupiers than it was to investors.
Over the month there was $0.8 billion in lending for construction of dwellings and $12.7 billion in lending for established housing. Over the month, lending for construction of dwellings fell -22.0% while commitments for established housing rose 1.4%. Year-on-year lending for construction of new homes is -2.5% lower and lending for established homes is 13.1% higher.
The data appears to indicate that there is a change occurring in the mortgage lending market. Whereas investors and owner occupier refinances have been the primary drivers of growth lately, it seems as if this is now tilting to owner occupier new loans starting to dominate. Given that investment mortgages generally now have a higher interest rate than owner occupier mortgages, it may be playing a role in the tilt towards owner occupier lending. 
Furthermore, value growth has been strong for more than three years in Sydney and Melbourne and investors may be becoming concerned about the longevity of the boom while growth outside of these cities has been sedate. 
Once you also consider a record high pipeline of residential construction accompanied by a record low rate of rental growth and historical low yields perhaps a growing number of investors are looking towards other forms of investment they perceive as less risky at this stage in cycle. It’s still early days for the slowdown in investment lending but we, along with the RBA and APRA, will be watching closely to see whether the slowing in investment lending and the rise in owner occupier lending persists over the coming months. 
It is also going to be interesting to see what impact this has on overall demand for housing over the coming months in lights of evidence of a bit of a softening in the Sydney housing market.
Cameron Kusher is research analyst for CoreLogic RP Data. You can contact him <a href="https://blog.corelogic.com.au/author/cameron-kusher/" target="_blank">here</a>.
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Owner occupier housing finance commitments take a step up: Cameron Kusher

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The Australian Bureau of Statistics (ABS) published building approvals data for August 2015 earlier this week.  The data showed a month-on-month fall in approvals driven by a sharp drop in the number of unit approvals.  Keep in mind that unit approvals tend to be much more volatile than house approvals on a monthly basis.
<a href="/images/2015/10/06/Chart-1.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2015/10/06/Chart-1.jpg" alt="">
Over the month there were 18,071 dwelling approvals which was a decline of -6.9% over the month.  Dwelling approvals hit a record high of 20,215 approvals in March 2015 and they are now -7.5% lower.  It does appear that approvals have peaked notwithstanding the fact that they remain at historically high levels.
<a href="/images/2015/10/06/Chart-2.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2015/10/06/Chart-2.jpg" alt="">
There were 9,882 houses and 8,819 units approved for construction in August 2015.  House approvals actually increased by 4.4% over the month while unit approvals fell by -16.9%.  Year-on-year house approvals have increased by 2.2% compared to an 8.4% lift in unit approvals.  To further highlight the volatility of unit approvals the 8.4% year-on-year increase in August is well down on the 44.2% year-on-year rise in July.  Although it looks as if approvals have peaked it would not surprise to see a sharp rebound in unit approvals next month.
Across the country there was a record high 226,415 dwellings approved for construction over the 12 months to August 2015.  To put the magnitude of approvals in perspective, two years ago over the year to August 2013 there had been 166,658 dwelling approvals nationally.  There has also been a surge in unit approvals over recent years with a record high 48.8% of all dwelling approvals nationally being for units over the past year.  Again, 2 years ago units accounted for 42.5% of all approvals over the year.
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It isn’t just the fact that more units are being built, the type of units being constructed is changing dramatically.  Over the 12 months to August 2015, 25.7% of all unit approvals were for townhouses, 10.1% were low rise (less than 4 storeys) and 64.3% were high-rise (4 storeys or more).  The above chart shows that historically townhouses have received the highest proportion of approvals.  Trends have changed quite swiftly, 2 years ago just 49.2% of all unit approvals were high-rise.  The rise in high-rise approvals is reflective of higher densities within our inner city markets.  High rise unit projects also take longer to build than a house or townhouse and as a result the economic benefit is stretched over a longer period.  Of course the fact that we are approving high-rise units at an unprecedented pace also creates some challenges.  Most notably who are buying these properties and over the longer term who is going to live in these units.
The data indicates that dwelling approvals have probably peaked for the current phase however, the number of approvals remains elevated.  This has created a significant pipeline of new construction much of which is high-rise and will take some time to complete.  Because unit development is so dependent upon presales it will be interesting to see just how many of these units are ultimately built.
Cameron Kusher is research analyst for CoreLogic RP Data. You can contact him <a href="https://blog.corelogic.com.au/author/cameron-kusher/" target="_blank">here</a>.
 
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Dwelling approvals remain elevated but fall in August: Cameron Kusher 

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The Australian Bureau of Statistics (ABS) released demographic data for the March 2015 quarter earlier today. The data showed that despite a quarterly bounce in population growth, the rate of growth continues to trend lower.
The national population increased by 1.35% over the 12 months to March 2015 which was the lowest annual rate of growth in nine years. Although growth slowed it should still be noted that Australia’s population increased by 315,952 persons over the past year. Although population growth has slowed it remains well above the long term average of 256,801 per annum.
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Over the March 2015 quarter, the national population increased by 93,942 persons, substantially higher than what was recorded over the December 2014 quarter when the nationally population recorded an increase of 64,010 persons.  Over the 12 months to March 2015, the national population increased by 315,952 persons which is the lowest annual increase in population since the 12 month period ending June 2011 when the nation recorded population growth of 308,274 persons.
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At a national level there are two components of population growth, natural increase (births minus deaths) and net overseas migration. Each of these measures recorded a bounce over the past quarter however, both components continue to trend lower on an annual basis. Over the 12 months to March 2015 natural increase was recorded at 142,898 persons and net overseas migration was recorded at 173,054. Natural increase was -9.7% lower over the year while net overseas migration was -16.0% lower, its largest annual fall since March 2011.  
While the decrease in the rate of natural increase implies a sharp rise in deaths or slowdown in births, it is important that the ABS has noted that there are problems with the preliminary natural increase estimates due to a lag in registering births in both NSW and Vic.  We are likely to an upwards correction to this data over the coming quarters which will lift the rate of population growth.
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Across the states and territories the rate of annual population growth is lower compared to the same time a year ago across the board. Although population growth is slowing, the sharpest slowdown in population growth is being felt in WA and NT. In WA the rate of population growth has slowed to 1.4% over the year to March 2015 from 3.5% two years earlier.  Similarly, annual population growth in the NT was 3.0% two years ago and the latest data shows it at just 0.2% over the past year.
Looking at the components of population growth we will ignore natural increase at this juncture because the ABS have highlighted some issues with the data for NSW and Vic. The two other drivers of population growth at a state and territory level are overseas migration and interstate migration.  NSW and Vic are the major benefactors of net overseas migration to Australia while Vic and Qld are the only benefactors of interstate migration.
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Over the 12 months to March 2015, net overseas migration to Australia was recorded at 173,054 persons. More than two thirds of net overseas migration flowed to NSW (38.9%) and Vic (31.6%). If you add in Qld (12.1%), the three most populous states accounted for 82.6% of net overseas migration. Although net overseas migration is trending lower, the impact of the end of the mining boom is very clear. In March 2013, annual net overseas migration was recorded at 41,745 persons in Qld, 53,834 persons in WA and 5,173 persons in NT. Over the past year, annual net overseas migration had slowed to 20,857 persons in Qld, 15,383 persons in WA and 1,041 persons in NT.  
Conversely in NSW where mining is a smaller part of the overall economy, net overseas migration has actually increased from 63,661 persons in March 2013 to 67,272 persons in March 2015. Similarly in Vic net overseas migration has been much stronger over the past 2 years, falling slightly from 55,562 persons to 54,745 persons. Of course while most of the overseas migration is coming to NSW and Vic, most of that is flowing into Sydney and Melbourne fuelling more demand for housing and helping to explain why home value growth in those two cities has been so strong.
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At a national level net interstate migration cancels itself out and does not add to population growth however, at a state level it can greatly impact on population growth. Over the past 12 months, only Vic (9,774 persons) and Qld (6,195 persons) have seen a positive inflow of residents from other states. In fact, net interstate migration into Vic is currently at its strongest level on record. Qld has recorded a slight rebound in net interstate migration however, it continues to hover around its lowest level on record. For the length of this data series (since 1981) NSW has consistently lost residents to other states and that remains the case losing 6,195 residents over the year. 
The outflow of residents from NSW is hovering at around record low levels. WA has typically been a benefactor of interstate migration however, it lost a net -1,269 residents last year; its greatest loss since June 2003. Again we can see the impact of the slowing of the resources sector. In March 2013, net interstate migration was recorded at a higher 9,026 persons in Qld and 9,691 persons in WA. Conversely, net interstate migration at that time was recorded at -15,513 persons in NSW and 3,454 persons in Vic.
The trends in overseas and interstate migration in particular show that the population growth tide has turned away from the mining states and is now firmly focussed on NSW and Vic which have relatively little mining sector exposure. These states are also creating more employment opportunities and are subsequently attracting both people migrating from overseas and interstate. Higher population growth means more demand for housing, which is one of the drivers pushing dwelling values higher in Sydney and Melbourne.
The more up-to-date overseas arrivals and departures data from the ABS indicates that permanent and long-term arrivals into Australia have continued to trend lower since March 2015. This indicates that net overseas migration is expected to continue to trend lower over the coming quarters. It is also likely to result in more of these migrants wanting to move to NSW and Vic due to the fact that these are the states where more jobs are being created.
This is of course despite the fact that the two capital cities in these two states recording home value growth which is well in excess of growth elsewhere.
Cameron Kusher is research analyst for CoreLogic RP Data. You can contact him <a href="https://blog.corelogic.com.au/author/cameron-kusher/" target="_blank">here</a>.
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Population growth slumps to its slowest rate in nine years: Cameron Kusher

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There’s been a number of articles this week about the peak of the Sydney market. It does look as if the market is at or slightly past its peak however, it is important to thoroughly investigate how the market is tracking currently.
Values
Sydney home values have increased by 17.6% over the 12 months to August 2015 and by 14.0% over the first 8 months of 2015. Sydney home values have been trending higher since they reached a low point in May 2012 and since that time Sydney home values have increased by a total of 49.5%. To put that growth in perspective, a home worth $500,000 in May 2012 would now be worth $747,704. The data presented shows that home values have been trending higher at a fairly rapid pace however, more recent data may point to a slowing of the rate of growth. Home values rose by 1.1% over the month of August however, data for September is showing a much more sluggish rate of growth in home values with values -0.3% lower over the twenty eight days to 20 September.
Sales transactions
Unfortunately sales transactions are not a timely indicator of the market’s performance due to delays in receiving the full population of settled sales transactions.  Furthermore, off-the-plan sales are entered into sales counts at their contract date however, the record is not received until settlement which could be several years down the track for large projects. As a result, when you have heightened off-the-plan sales activity as we currently do, unit sales in particular are inclined to be undercounted.  The latest sales data to June 2015 shows that over the second quarter of the year there were 23,432 sales. Compared to the same quarter in 2014, house sales were -5.5% lower and unit sales were -16.5% lower.
Time on market
At the end of July 2015 the typical Sydney home was selling after just 25 days. At CoreLogic RP Data we’ve been tracking the time on market since the beginning of 2005 and this is the quickest rate of sale recorded over this period. The combination of strong value growth and a rapid rate of sale suggests that demand is still quite strong across the city.
Auction clearance rates
The preliminary auction clearance rate for Sydney last week was 73.2% which was virtually unchanged from the final auction clearance rate the previous week.  Importantly, in most instances the final auction clearance rates are revised lower. Auction clearance rates have shifted from their peak of almost 90% in April of this year to their current level.  At the same time a year ago clearance rates were recorded at a higher 78%. It is important to note that over recent weeks the number of properties being taken to auction has been significantly higher than the number taken to auction a year ago. Nevertheless it is clear that the auction market which represents slightly more than a quarter of all Sydney home sales has weakened over recent months and has not rebounded so far during the Spring Selling Season.
Property listings
The latest weekly listings data which tracks houses, units and vacant land for sale across Sydney shows that over the past 4 weeks there were 8,525 new listings and 20,121 total listings.  New listings are now at their highest level since the week ended 30/11/14 and total listings are at their highest level since the week ended 14/12/14. Comparing listings to levels at the same time a year ago shows that new listings are currently 19.0% higher and total listings are up 5.0%. In the early part of the Spring Selling Season there is much more stock available for sale in Sydney than there was at the same time a year ago. Heightened stock levels at a time when auction markets are softening and value growth has shown some early signs of slowing may contribute to a further slowdown in the rate of capital gain over the coming months.  This is due to the fact that active buyers are afforded more choice and may not have to pay such a price premium to secure a home.
Mortgage Activity
The CoreLogic RP Data Mortgage Index tracks pre-purchasing activity and has shown some clear weakness over recent weeks. While the Index remains at quite high levels it has fallen by -2.0% over the past couple of weeks at a time when, seasonally, the trend should typically be rising. At the same time last year the index had risen by 1.2% over the previous two weeks. With mortgages, particularly investment mortgages becoming more difficult to obtain, we are potentially seeing the first signs that this segment of the market it is starting to slow resulting in an easing of demand.
Building approvals
The latest building approvals data for July 2015 shows that there was a record high 5,159 dwelling approvals over the month. This was comprised of 1,655 house approvals and 3,504 unit approvals.  Over the 12 months to July 2015 there have been 15,213 house approvals and a record high 30,921 unit approvals. Sydney has consistently approved more units for construction than houses since early 1993. With a record pipeline of new housing stock it is going some way to alleviating housing shortages across the city. It also affords buyers much more choice when they are looking to purchase a new home
Housing finance
The latest housing finance data for New South Wales to July 2015 shows that demand from the owner occupier segment is starting to ramp-up while investor demand is starting to wane. Importantly, owner occupier demand includes refinances so if we look exclusively at new lending (excluding refinances) we also see owner occupier demand ramping up while investor demand seems to be waning. Investors still account for the greatest proportion of new lending (58.0%) however, two months ago investors accounted for a record-high 62.4% of all new mortgage lending in NSW.
Rents and yields
Over the 12 months to August 2015, rental rates across Sydney have increased by 2.3% which is the slowest annual rate of rental growth since May 2013. With rental growth sluggish and value growth remaining very strong, gross rental yields across Sydney have shifted to record low levels. Yields were recorded at 3.3% in August 2015 which is the softest yields on record. We’ve already mentioned that investor activity across NSW has recently hit record highs and remains elevated. It appears that many investors are having little regard for rental returns and are largely focussing on the future capital growth potential and the subsequent benefits from a negative gearing strategy.
Although the data is still generally undoubtedly strong, it appears there are signs that the market could be showing the first sign that growth rates are peaking. Record high new housing supply at a time when mortgage demand is seemingly slowing along with auction clearance rates and listings are rising points to potentially softer value growth conditions for the city. While we expect the rate of growth will likely start to slow, the significant stimulus of low mortgage rates is expected to ensure that home values continue to rise albeit at a more moderate pace.
 
Cameron Kusher is research analyst for CoreLogic RP Data. You can contact him <a href="https://blog.corelogic.com.au/author/cameron-kusher/" target="_blank">here</a>.
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What is going on in the Sydney housing market? 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.

[smartcode_project:default project_id=150017 project_image_fid=374053]

"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."

[smartcode_project:default project_id=150017 project_image_fid=374052]

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.

[smartcode_project:default project_id=150017 project_image_fid=372547]

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.

[smartcode_project:default project_id=150017 project_image_fid=374054]

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.

[smartcode_project:default project_id=150017 project_image_fid=370962]

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.

[smartcode_project:default project_id=146527 project_image_fid=366550]

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.

[smartcode_project_cta:default project_id=150017]

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.

[smartcode_project:default project_id=426 project_image_fid=359199]

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.

[smartcode_project:default project_id=426 project_image_fid=360299]

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.

[smartcode_project:default project_id=426 project_image_fid=360300]

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.

[smartcode_project_cta:default project_id=426]

Cameron Kusher

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