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EXPERT INSIGHT

New data suggests changes to mortgage lending rules in the near future are unlikely, despite rapidly rising home values. Recent data from the Australian Prudential Regulation Authority (APRA) suggests that while the proportion of loan originations that could be ‘higher risk’ showed a slight increase through the December quarter, the regulator saw no evidence of a “material relaxation in lending standards”.

Indicators of lending standards are being watched carefully. Borrowing for the purchase of residential property hit a record $28.8 billion in January 2021, up 34.8% from the decade average. This has also contributed to housing values reaching a new record high.

So far however, the December 2020 quarter has not shown any major deterioration in lending standards, suggesting there is no need for interventions in the form of tighter credit policies. The December 2020 quarter is of particular importance, because it marks a positive turn in Sydney and Melbourne dwelling values coming out of COVID-related restrictions.

The share of interest only loans as a portion of new home loans ticked up to 19.2%

The portion of new mortgages lent on interest only terms hit 19.2% in the December 2020 quarter, up from 18.5% in the previous quarter.

This is not far from the 18.7% average seen over the past two years. It is also well below the record high of 45.6%, which was recorded over the June 2015 quarter. However, it is worth noting there have been improvements to collection of banking statistics, and the historic series is not directly comparable with recent data.

Interest only lending was noted as a potential risk to broader financial stability in the years to 2017. At that time, it was becoming more common for borrowers to originate their loans on interest only repayment terms, or refinance and extend their interest only term period. This was leading to a delay in the paying down of loan principals, at a time when house prices and household debt were rising.

Interest only loan structures have generally been more popular among investors, who are eligible for tax deductions on their interest payments. Considering investors remain around record lows as a share of total lending, the risk to financial stability from interest only lending to this segment of the market remains low.

A key area regulators are likely to be watching is the proportion of interest only lending to owner occupiers. The number of interest only loans to owner occupiers increased by 32.5% over the September quarter and comprised a series high 45.7% of interest only loan originations. A sustained lift in owner occupiers not paying down their loan principal, could place upwards pressure on household debt levels, creating stability risks when interest rates eventually rise.

Debt-to-income ratios of greater than, or equal to 6, hit a two year high

APRA has previously cautioned lenders on exposure to loan-to-income ratios, and debt-to-income ratios, exceeding 6. The portion of new home loans originated on a loan-to-income ratio of greater than, or equal to 6 times reached 7.0% of loans over the December 2020 quarter. This is the highest across the series, which commences from March 2019. Loans originated with a debt-to-income ratio of 6 or more made up 17.2% of mortgages originated in the quarter, which was also a series high. APRA did not express concern around this metric in their report, arguing the share of debt-to-income lending was “within its historical average”.

Increased demand across Sydney and Melbourne property markets, as is being seen at the moment, will test debt-to-income ratios. This is because the house price-to-income ratio across Sydney has averaged around 8.5 since 2013, and has averaged 7.5 across Melbourne since 2015. As housing prices rise at a time when incomes are expected to remain relatively flat, there is the potential for both loan-to-income and debt-to-income ratios to lift further, which is likely to be seen as a riskier outcome by regulators.

The proportion of loans originating on high loan-to-value ratios (LVRs) also rose for owner occupiers and investors

<img alt="" height="388" src="https://s3-ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/pictures/article-images/lvr_80.jpg" width="897">

The portion of new home loans originated on a loan-to-value ratio of 80% or more increased to 42.0% across all borrowers in the December 2020 quarter, up from 39.9% in the previous quarter to be the highest proportion on record. The jump was greater the owner occupier space, where 45.7% of loans were originated on an LVR of greater than or equal to 80%, and 14.1% of loans were greater than or equal to 90%.

The regulator argued this increase reflects greater participation of owner occupiers in the market, particularly first home buyers. First home buyers may be accessing housing through loan guarantors, or even the first home loan deposit scheme, which reduced the risk of low-deposit home loans.

The latest data from APRA indicates there is no blow out of risk in mortgage lending, despite the recent surge in property prices across Australia. The publication follows a recent address from RBA governor Phillip Lowe, who reiterated the strategy of maintaining a low cash rate for years to come, which is likely to continue supporting housing demand.

But a deterioration in lending standards can be mitigated, as we’ve witnessed before. This could be achieved by tightening serviceability assessment rates, loan sizes relative to incomes or debt (LTI or DTI ratios) or loan sizes relative to home valuations (LVR). In a recent statement, the Council of Financial Regulators reiterated that while lending standards were generally being maintained at this stage, they have responses up their sleeves if lending conditions do become risky.

While APRA’s December quarter statistics show a trend towards ‘riskier’ styles of lending, the magnitude is not likely to be large enough to trigger a regulatory response; but if this trend continues, or indeed accelerates, it becomes more likely we will see a regulatory intervention aimed at curbing financial stability risks related to the housing sector.
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Housing lending may be cheap, but regulators argue it is not yet risky: CoreLogic's Eliza Owen

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EXPERT INSIGHT

The temporary supplement to JobSeeker payments in Australia are set to finish at the end of March 2021. The JobSeeker ‘coronavirus supplement’ was a temporary boost to new and existing recipients of welfare schemes in response to the onset of COVID-19 including JobSeeker, Youth Allowance, Austudy and the Parenting Payment. 

In early 2020, the supplement was set at an additional $275 per week, virtually doubling payments for some recipients. Recently, it was announced that as the coronavirus supplement is wound down from March, a permanent $25 increase will be added to payments. While a permanent increase will make some better off, welfare recipients will be worse off by $250 per week compared with the onset of COVID-19.

But will the removal of the JobSeeker supplement have any impact on the housing market?

First and foremost, it is important to acknowledge that the JobSeeker supplement has already been reduced significantly in recent months, with no dampening impact apparent on the housing market as a whole.

In late March 2020, the original JobSeeker supplement was set at an additional $275 per week. In late September, the supplement was reduced to $125 per week, and it was reduced further to $75 per week through the first quarter of 2021.

However, housing market momentum has increased from September to January, amid the reduction in the supplement. Between the end of September and January, the CoreLogic national home value index rose 3.2%, and rental values increased 2.5%.

Another consideration is that even as the JobSeeker coronavirus supplement was reduced, fewer Australians have been reliant on welfare due to a strong recovery trend in the labour market.

Data from the Australian Government Department of Social Services (DSS) suggests there were 11.7% fewer JobSeeker recipients toward the end January 2020, compared with the end of September. However, there is still a heightened risk to wider-spread housing stress, as the number recipients at January was still 55.9% higher than at the onset of COVID-19 in March 2020.

Changes to JobSeeker would likely have little direct impact on housing market values. With lower income households generally having lower rates of home ownership, it is more likely that households receiving JobSeeker are renters. This would imply an indirect impact on housing prices, where reduced rental return could impact an investor’s willingness to pay for a property.

However, even looking at regions with the highest proportion of JobSeeker recipients in Australia relative to the local population, rental outcomes have been mixed since the significant reduction of the Jobseeker supplement in September. 

Only one region has actually seen a decline in rental values, while other SA2 markets have seen an average increase in market rents of 4.2%, which is actually above the 2.5% increase in rent values nationally over the same period.

Importantly, there is no counter-factual for rental performance in these markets where the coronavirus supplement is unchanged. Under these circumstances, rents may have increased even further.

However, what this data does highlight is that the impending changes to JobSeeker could create increased divergence between incomes and housing costs for some of Australia’s most vulnerable households. While these rental markets may be increasing in aggregate, housing stress, and even homelessness, may be faced by individuals whose livelihoods have been impacted by COVID-19.

While changes to JobSeeker are unlikely to impact the housing market, the welfare reduction could greatly disrupt housing situations for many.

Eliza Owen is the Head of Research Australia at CoreLogic
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Will changes to JobSeeker impact the housing market? CoreLogic's Eliza Owen

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EXPERT OBSERVER
CoreLogic November home value indices showed a second consecutive month of property value increases following a COVID-19- induced dip.
For the first time since January, every capital city recorded a rise in dwelling values. This was off the back of accommodative monetary policy and fiscal policy, converging with a strong increase in consumer sentiment and the beginning of a recovery in economic conditions. But as property prices move into a broad-based upswing, rents remain a mixed bag.
A range of factors have created different results between regions and property types. 
The top performing rental market of the capital cities was Perth, where dwelling rents increased by a remarkable 8.2% in the year to November. This was led by an 8.6% rise in house rents. Unit rents were up 5.4% in the year, which was behind the rate of rent growth for units in Darwin.
While this may spell good news for landlords across Perth and Darwin, it is worth noting that the reason for such strong rental increases are the gradual withdrawal of investors from the market. Investors comprised only a small portion of market activity over the years following the mining downturn. As of November 2020, Perth rent values were still 11.7% lower than the peak in 2013, while Darwin rents were 21.6% lower than the 2014 high.
A time series of rolling annual growth in rents across Perth and Darwin, compared with the combined capital cities, contextualises the recent increase in rents. It shows extreme highs and lows in growth of rental incomes across these cities, and the downturn that rental markets are recovering from.
The rapid rebound in rents could see investment participation bottom out in the residential market through 2021, and start to climb. ABS housing finance data suggest the investor share of mortgage finance for the purchase of property through September was just 16.2% in WA, and 11.6% in the NT. These are the lowest rates of investor participation of the states and territories.
Meanwhile, Sydney unit rents have been pushed into a deep downswing, falling -5.4% in the year to November. This is partly attributable to a relatively high supply of unit stock in recent years, with unit completions across NSW peaking at 11,566 in the December 2018 quarter, against a 10-year average of 6,315 completions.
Demand-side factors have also pushed down unit rents. Through COVID-19, the closure of international borders was a shock to rental demand for Sydney and Melbourne, where around two thirds of net overseas migration to Australia has been concentrated for the past 3 years. This is because the vast majority of recent overseas arrivals are renters.
Sydney and Melbourne labour markets also had a relatively high portion of workers in hospitality, tourism and the arts, which have been subject to acute job loss through the pandemic, and are sectors where workers are more likely to rent than in other industries.
The median rent value for Sydney units fell to $480 per week, down from $500 in November 2019, and down from a pre-COVID high of $520. However, the monthly decline in Sydney unit rent values has eased to -0.8% in November, since bottoming out at - 1.1% through June.
The Melbourne rental market has been one of the most impacted through COVID-19, with unit rents down 7% over the year compared with a mild uplift in house rents.
Median unit rents have fallen to $400 per week, down from $430 In November 2019 and a pre-COVID high of $450. As with Sydney, the decline in Melbourne unit rents was driven by stalled overseas migration, and acute job loss across sectors where workers have a higher likelihood of renting.
Unlike Sydney, Melbourne rental demand was compounded by a second wave of restrictions through the September quarter, and an abnormally high next loss of people from Melbourne to other parts of Australia through the June quarter.
The monthly decline in Melbourne unit rents has also eased, from -1.3% in August to -1.1% in the month of November. The rate of decline in unit rents is easing as employment conditions gradually improve across accommodation, food, arts and recreational service industries.
Rental demand will be further boosted across Sydney and Melbourne when international travel is once again feasible, though this may not be for some time.
Brisbane is another city where rents have seen divergence between houses and units, though this is not as extreme as the divergence seen across Sydney and Melbourne.
Across the three cities, part of the difference between house and unit performance may not be about renters preferring houses over units during COVID-19, but rather location and stock availability.
Areas further from the CBD of Sydney, Melbourne and Brisbane have been more likely to see rental value increases. These areas further from the CBD happen to be in locations where rental stock is less concentrated, and is also more likely house than unit stock.
While smaller cities have generally seen an increase in rental values over the year, Hobart rents have fallen across both houses and units. This may be a relief to some tenants, where rents across Hobart had grown 34.3% in the 5 years prior to the onset of COVID19.
Declines in Hobart rents may partially have come from a lack of demand among workers in tourism and hospitality where, as with inner-city Sydney and Melbourne, Hobart had a relatively high concentration of workers.
However, another narrative around the decline in rents in Hobart has been the conversion of Airbnb to the long term rental market adding to supply, at a time when demand was falling. As interstate borders reopen, this may see the return of stock to short term rental accommodation, and see Hobart rental markets once again tighten.
Looking forward, COVID-19 will likely have a lasting impact in terms of varied dynamics between cities and property types. For weaker rental markets such as Sydney, Melbourne and Hobart, rents are likely to remain weak until international travel resumes.
Meanwhile, other capital cities, especially those with rapidly rising rents like Perth and Darwin, could see the gradual re-entry of property investors, which would lift rental supply and support an easing in rental value growth over time.
ELIZA OWEN is the Head of Research Australia at CoreLogic
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Melbourne rents continue to fall while Perth soared eight per-cent: CoreLogic's Eliza Owen

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EXPERT OBSERVER
Three major housing-related measures were highlighted in Treasurer Frydenberg’s budget address on the 6th of October: an extension of the First Home Loan Deposit Scheme (FHLDS), additional low-cost financing for affordable housing through NHFIC, and additional funding for the Indigenous Home Ownership Program.
Other measures detailed in the budget papers included a proposed capital gains exemption for granny flats for eligible persons from July next year, and a continuation of funding for state social housing services.
The papers also note that the expansion of the first home loan deposit scheme will be complemented by announced changes to ease credit regulations, which would boost credit availability.
Funnelling new demand into new property
First home owners have previously been a target of demand-side housing stimulus during economic downturns. Currently, Australia may be in a demographic ‘sweet spot’ for first home buyer demand.
The relatively large millennial generation is now estimated to be aged around 26 to 37 years old. According to ABS data, this puts millennials into the most common first home buyer age groups.
Alongside the typical barriers to entry for hopeful first home buyers, this may be one of the reasons the first home loan deposit scheme has been so well-subscribed since its introduction in January this year.
The extension to the FHLDS will see an additional 10,000 places available between the 6th of October and the 30th of June 2021, adding to the 20,000 places made available since the scheme started in January 2020.
However, these additional places are for construction or purchase of newly-built homes. The price thresholds have also been increased for newly built homes, which would potentially further incentivise a pivot away from the established housing market. The change in purchasing thresholds by region are summarised below.
<img src="https://www.urban.com.au/images/2020/10/8/Eliza%20Owen%20Budget.PNG" alt="">
It will be interesting to see if these conditions create as rapid an uptake as the places for established housing. In 2008, the temporary boost to the first home owner grant provided added incentives for new builds, yet 85% of its uptake was directed at established housing₁. However, incentives limited to new home builds could still help soften the blow to dwelling construction through COVID-19.
Since the introduction of the HomeBuilder scheme, new home sales have been boosted across Western Australia, South Australia and Queensland. CoreLogic data shows valuations ordered for the purpose of construction loans have seen a boost above pre-COVID levels since the introduction of the HomeBuilder scheme.
In terms of the impact these schemes would have on the established market, the increased incentive for new home builds could reduce established home prices if demand is diverted from this sector. However, the price of newly built homes may rise up to the threshold cut-off. It is worth noting that despite the rhetoric employed around the extension of the scheme supporting the construction sector, the budget papers highlight that this will not be enough to offset a decline in new dwelling investment.
At August, dwelling approvals for units had fallen -18.4% year-on-year. The budget papers forecast an 11% decline in dwelling investment over 2020-21, before rising 7% in 2021-22. Indirect Impacts on Housing With much of this year’s budget focused on the labour market, infrastructure construction and tax cuts, one could be forgiven for thinking housing reform and stimulus took a back seat in this year’s budget. However, some of the budget highlights will also have implications for housing.
These include: 
<ol>
<li>The JobMaker hiring credit and JobTrainer fund. These initiatives may help re-absorption of young people into the labour force following the initial pandemic-induced shock. This reflects the disproportionate job loss of young people throughout COVID-19, where around 40% of job losses between March and August were among those aged 24 and under. Job loss among younger Australians may present less direct risk to the housing market due to their lower likelihood of holding mortgage debt. However, support for youth employment may create more buoyancy in the rental market, where inner-city markets in particular have seen rental income declines since the onset of COVID-19. </li>
<li>A boost to infrastructure spending. Depending on the nature of infrastructure projects, surrounding housing markets could see a rise or fall in demand. Much of this year’s infrastructure allocation is in roadworks, which can have positive impacts on nearby housing by increasing accessibility to an area, but devalue properties with exposure to high traffic intensity, construction and noise pollution.</li>
</ol>
Support for regional Australia
The budget outlines $350 million in support for regional tourism to attract domestic visitation, and seeks to strengthen regional industry through concessional loans to farmers and access for exporters to global supply chains. This may further generate interest in regional dwelling markets, beyond what has resulted from COVID-19 and the normalisation of remote work. However, it worth noting this budget allocated little to fossil fuel alternatives, with climate change presenting on ongoing challenge to the liveability of some regional markets.
 Beyond the Budget
Further to the budget, there have been many institutional interventions which have likely played a role in stabilising housing market conditions since COVID-19.
These include, but are not limited to: 
<ul>
<li>A comprehensive monetary easing package from the RBA, which saw a reduction of the cash rate to 0.25%, bond yield targeting and the establishment of a term funding facility which has been extended to June next year; </li>
<li>Early access to $10,000 of superannuation in 2019/20 and 2020/21; </li>
<li>The Australian Prudential Regulation Authority (APRA) changed capital ratio expectations for the banking sector in March, facilitated home loan deferrals and later extended the availability of deferrals to March 2021;</li>
<li>The availability of JobKeeper and a boost to JobSeeker, which were made available from March, and extended to March 2021, albeit in a tapered form; and, </li>
<li>A mix of state-based incentives for home buyers, such as the Building Bonus grant in WA, the Home Improvement Scheme in the NT, and temporary stamp duty discounts in NSW.</li>
</ul>
These events remind us that housing does not operate in a vacuum. Many different factors are currently supporting housing demand. This has created a turn in housing market sentiment, which is seeing prices rise across the small capital cities, and a softening of price declines across Sydney and Melbourne.
Looking forward, there may still be more tailwinds to come. The RBA left the cash rate on hold in October ahead of the budget, but hinted in the final sentence of the statement on the decision that “additional monetary easing” was possible.
A recent address by Deputy Governor Guy Debelle carried the same messaging. Lower interest rates, together with easier access to housing credit could create further housing market demand, given prices have historically increased against a lower cost of debt and greater availability of housing finance options.
ELIZA OWEN is the Head of Research Australia at CoreLogic
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What does the budget mean for the housing market? CoreLogic's Eliza Owen

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EXPERT OBSERVER
The past few weeks have shown signs of a positive turn in the housing market. There has been a strong rebound in consumer sentiment, and outside of Melbourne, auction clearance rates and volumes are rising.
More recently, CoreLogic listings data has shown that in some cities, vendors are also more willing to test the market by listing their property for sale.
Across the capital cities, ‘new’ listings, which are properties freshly added to the market over a period, increased 0.7% in the four weeks to the 20th of September.
This was driven by a particularly strong jump in new listings across Sydney, up by 382 listings over the period, followed by Perth, where new listings increased by 286.
The combined capital cities chart shows a subdued start to the spring selling season, which is now gradually gathering pace.
However, new listings volumes are still down 35% on the previous four-year average.
The capital city breakdown reveals Sydney and Perth as leading the new listings volume, while new listings across Melbourne fell by 935 listings.
While this is a large drop in new listings, the decline has eased from the previous four week period, where the count of new listings fell by 2,976 in the four weeks to August 23rd.
All but two of the capital cities recorded an increase in listings. This signifies that vendors may be more confident in selling their property.
The exceptions were Melbourne, where transaction activity is understandably constrained by stage 4 restrictions, and Darwin, where listing numbers are generally lower and more volatile CoreLogic valuation data suggests that there is so far little indication that these increases in listings may be a result of distressed sales.
Potential in the Perth market
While transaction activity is gradually improving across the country, Perth stands out as a market primed for recovery.
For the four weeks ending 20th of September, Perth and regional WA were the only dwelling markets where new listings volumes exceeded the numbers in the equivalent four week period of the previous year.
Listings is not the only transaction data suggesting more confidence in the Perth dwelling market. This is shown in the chart below, which capered capital city sales numbers in August, with a 6-month average of pre-COVID sales volumes.
Perth is the only capital city where sales numbers where above the pre-COVID average. These higher levels of transaction activity are also showing up in mild value increases across the Perth dwelling market. In the 28- days to September 23rd, the Perth home value index increased 0.6%
. While a positive turn in Perth dwellings may be surprising during a recession, the WA economy has been supported by a 4.8% increase in mining investment over the year.
ABS payroll data suggests since the start of the pandemic, payroll jobs across WA fell less than 1%, compared with national declines of 4.5%.
Perth dwelling values are also relatively affordable, sitting 22.2% below the record dwelling value in June 2014, and there is a strong mix of state and federal first home buyer incentives in place, which may be encouraging demand as well.
A consistent upswing in Perth property values will depend on the resilience of the market through the end of mortgage repayment deferrals, whether there are further reductions in the cash rate, and how successfully COVID-19 can be contained.
ELIZA OWEN is the Head of Research Australia at CoreLogic
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Surprising data shows Perth is bouncing back: CoreLogic's Eliza Owen

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EXPERT OBSERVER
The onset of COVID-19 may be creating a two-speed rental market, with inner-city rents declining faster than those in the outer suburbs. CoreLogic data confirms that there is a positive correlation between changes in rent values and distance to the CBD. This means that the closer a region is to the CBD, the more likely it is that rent values have fallen.
CoreLogic rent values were analysed across SA3 regions of Brisbane, Sydney and Melbourne. For each region, the median property distance to the CBD was compared with the change in total rental market values from the end of March (which marked national, stage 2 restrictions) to the end of August.
The results are plotted below. Each graph shows the change in rent values for houses and units across the horizontal axis between March and August, and the distance to the CBD along the horizontal axis.
<img src="https://www.corelogic.com.au/sites/default/files/2020-09/image_1_0.jpg" width="985" height="573"><img src="https://www.corelogic.com.au/sites/default/files/2020-09/image_2_0.jpg" width="986" height="561">
<img src="https://www.corelogic.com.au/sites/default/files/2020-09/image_3_0.jpg" width="1143" height="683">
Why have inner city markets been more affected?
As has been noted in previous research from CoreLogic, there are several distinct factors of the COVID-19 downturn that have made inner city rental markets particularly susceptible to a decline in rental values.
These include the relatively high exposure to overseas migration as a source of housing demand. A summary of average net overseas migration alongside distance to CBD is presented by SA3 region below. 
<img src="https://www.corelogic.com.au/sites/default/files/2020-09/image_4.jpg" width="658" height="514">
Where have rents increased?
Of the 125 SA3 rental markets analysed, there were 63 regions where house rents increased, and 35 regions where unit rents increased, since the end of March to August.  Rental increases were most common across Sydney and Brisbane, where employment has been less affected by the pandemic, and social distancing measures have eased. The highest rental value increases were across Blue Mountains houses, rising 3.3%. 
The reason for rental value increases in outer-suburban areas are less clear. On explanation may be that outer-city suburbs have been less exposed to the factors driving declines in demand, such as overseas migration. Anecdotal reports assert that a draw card for outer-city suburbs are relatively cheap rents, and low density along with remote working lessening the hurdle of travel times from areas located furhte form the largest employment nodes. This may have increased rental prices through higher demand. The analysed data set also revealed that rental value increases have occurred in cheaper rental markets. However, it is difficult to understand this trend without survey data, and internal migration data for the COVID period will likely not be available until April next year.
It may also be the case that added stimulus to low income households have added to rental demand in areas where rents are usually cheaper. The tapering of this fiscal support may lead to a more broad-based decline in rents over the next 6 months.
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Properties closer to the city more likely to see rent decline: CoreLogic's Eliza Owen

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EXPERT OBSERVER
Plenty of data suggests certain rental markets have deteriorated amid the COVID-19 pandemic.
CoreLogic data showed a 0.8% decline in national rent values from the end of March to the end of August, with more acute falls in the unit markets of Sydney and Melbourne, where rent values have fallen 4.2% and 4.4% respectively over the same period.
The closure of international borders has created a shock to rental demand, as most migrants rent when they initially come to Australia.
An estimated 21.1% of payroll jobs have been lost across food and accommodation services since the onset of the pandemic, an industry where people are more likely to rent.
The exposure of inner city areas to overseas migration, and inner-city workforces to accommodation and food services, has made these markets particularly susceptible to a rise in rental stock, and lower prices. But less data exists on the current dynamics between investors and landlords which is becoming increasingly important as we approach the expiry of a moratorium on evictions, which have already been extended in some states.
CoreLogic conducted a survey of property managers, and other real estate professionals using the RP Data Professional platform. The survey provides some insight into rental conditions across the rental properties overseen by these professions. 
A majority of agencies noted stable tenancy conditions, but a sizeable number saw increases in arrears, rent reduction requests and postponed payments Each survey question had an average of 169 respondents.
Against the wider population of property professionals using the application, it suggests a margin of error in the responses of 7% at a 95% confidence interval. Respondents were surveyed over mid-to-late August. Of the respondents, the majority were located in the most populous states of Victoria, NSW and Queensland.
Nearly half (48.6%) were real estate principals, while a further 35.8% were property managers. Across the larger states and territories, respondents by role were fairly uniform.
Furthermore, respondents managed rental portfolios of varying sizes. The majority of respondents (60.3%) managed a large portfolio of 100 or more rental properties, while a further 14.4% managed between 50 and 99 properties.
Key findings from the survey are presented below About the survey While the majority of respondents noted they had not seen a deterioration in rental conditions over the last two weeks, there is a sizable portion of agencies that had.
Almost a third of real estate professionals had seen an increase in requests for rent reductions, over a quarter had seen an increase in rental delinquencies, and 8.8% had noted an increase in evictions.
Of the real estate professionals who had noted an increase in rental delinquencies, 56.8% were based in Victoria, suggesting renewed restrictions across the state has impacted tenants’ ability to service rent.
Eliza Owen, Head of Research Australia at CoreLogic
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Residential landlords inclined to keep rents steady during COVID-19 pandemic: CoreLogic's Eliza Owen

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EXPERT OBSERVER
Capital city dwelling values have been affected differently across Australia in the wake of the pandemic.
As well as anecdotes of demand in regional lifestyle areas, the ACT dwelling market has been the clear ‘winner’ of the capital cities, increasing 1.3% in value between the end of March and the end of July. This came as national dwelling values declined 1.4% in the same period.
While it may seem counterintuitive that prices are rising across the ACT amid a global pandemic, the property market is actually performing as may be expected when the cash rate is reduced.
Research from the RBA has found that for every 1 percentage point reduction to the cash rate, property values may increase 8% over the following two years.
While this traditional relationship is being tested by a global pandemic, residents across the ACT may be relatively insulated from some of the effects of the pandemic. Part of this may be because recent case numbers have been low or non-existent.
As of early August, social distancing restrictions were easing across the Territory, and the ACT had gone almost one month without reporting new active cases.
There’s a big difference between houses and units
In the ACT, there is a high level of divergence between capital growth in houses and units. House values across the ACT were at a record high in July 2020, having increased 8.5% over the year. The median house value was $721,912 at July 2020.
Unit values were 3.6% below the record high, where the value of the unit market peaked in May 2010. However, units have also followed the recent house market upswing, sitting 2.7% higher over the year. The median unit value across Canberra was $445,135.
The chart below highlights the relatively subdued growth rates across units, with the gap between house and unit growth rates widening in the few months to July. 
<img src="https://www.urban.com.au/images/2020/8/20/CL%20ACT%201.JPG" alt="">
The chart below shows the difference in 5 year annualised growth rates between houses and units by capital city. Similar to Brisbane, a high level of unit supply across the region has seen some of the most divergent performance between houses and units out of the capital city markets. This is off the back of high levels of new unit supply relative to houses. Unlike Brisbane however, unit supply across the ACT had shown no signs of moderating before the pandemic.
Completions of units across the ACT reached a record high in the year to March 2020, at 4,427. CoreLogic settlement risk data estimates that as of April, a further 360 units would be completed across the region by the end of October, with the biggest uplift as a proportion of existing stock being completed in Gungahlin.
The volume of units built in the year to March 2020 was 41.8% higher than in the previous year. It was also 73.8% higher than the decade average of completions. Meanwhile, completions of new houses fell 6.7% in the year, and remain relatively unchanged since the start of the series in 1985.
<img src="https://www.urban.com.au/images/2020/8/20/CL%20ACT%202.JPG" alt="">
The development is in line with the 2012 ACT planning strategy, which sought to create a ‘compact and efficient city’. For those who own house and land in the ACT, it has had the benefit of creating much stronger house price growth than in units.
Values are rising as rents fall
Another aspect of the housing market that appears to have two tiers of performance is between property values and rent values
. As property values continued to rise through July, rent values have declined half a percent since the onset of the pandemic. This may have to do with better conditions across higher paid jobs, where people are more likely to buy property and have a mortgage
. ABS payroll jobs data shows that between the 14th of March and the 11th of July, the volume of payroll jobs increased across financial and insurance services (0.7%) and electricity, gas, water and waste services (2.9%).
These sectors also have among the highest typical weekly earnings of Australian industry, and are therefore more synonymous with owning a home.
The ACT had a relatively large rate of decline across more vulnerable sectors, such as arts and recreation and food and accommodation services.
Job losses across these sectors were 19.2% and 19.8% respectively. However, before the onset of the pandemic, the share of the ACT workforce employed in these sectors was also very low, at just 7.9%.
In any case, those working in these sectors are far more likely to rent. The ACT property market has been in an upswing since August last year.
While the dwelling market is currently a breakaway performer, there is a chance that this market will experience a delayed downturn as the economic repercussions of Melbourne’s second lockdown become more broad-based.
Investor demand, while already low relative to Australia-wide participation, may also be impacted by lower rent values. As a result, prolonged growth in this market will be subject to how quickly Australia can supress new virus cases, and see recovery in the labour market.
ELIZA OWEN is the Head of Research Australia at CoreLogic
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Understanding the ACT, COVID-19's best performing capital city housing market: CoreLogic's Eliza Owen

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EXPERT OBSERVER
COVID-19 continues to show an acute impact on inner city rental markets, the latest CoreLogic data on rental listings has revealed.
In the 28 days to August 9, total rent listings on market across Australia had eased on the previous month, falling 10.9% nationally.
While most regions are now seeing rental markets gradually tightening, there is still a significant uplift in rental stock around innercity areas, placing downwards pressure on rents and upwards pressure on vacancy rates.
A summary of the increases in rental stock by SA4 region is presented below. SA4 regions are defined by the ABS as broad regions of 100-300,000 people, and are a useful area of measurement because of alignment with labour force data.
The increase in rental listings represents the change in the level of total rental stock counted in the 28 days leading up to the 15th of March, the week in which Australia recorded its 100th case of COVID-19, compared with that counted in the 28 days to August 9th.
Of the 88 SA4 regions measured across the country, 78 regions saw a decline in the volume of rental listings between these dates.
Focusing on the 10 regions that have seen an uplift in total rental stock, 8 were regions across Sydney and Melbourne, while inner-city Brisbane and the Adelaide Central and Hills have also seen an increase in rental stock.
The dominance of Sydney and Melbourne with regards to heightened rental supply highlights the much localised nature of the shock to rental demand that has been seen since the onset of the pandemic.
<a href="https://www.propertyobserver.com.au/images/2020/8/13/SA4%20CoreLogic%201.JPG" target="_blank">Click here to enlarge</a>:
<img src="https://www.urban.com.au/images/2020/8/13/SA4%20CoreLogic%201.JPG" alt="">
It is expected seasonally that most areas would see a decline in rental listings, as rental stock on market is usually highest at the beginning and end of each year. For the four years prior to 2020, rental stock on market at mid-August has on average, been -3.2% lower than what is seen over mid-March.
However, the 10 regions that did see an uplift in rent listings are large rental markets. Together, CoreLogic data suggests these regions account for about 27.6% of Australia’s total rent market.
More geographically granular data shows some of the highest uplift in rental stock is across Inner Melbourne and Sydney City and Inner South. SA2 regions with the largest uplift in advertised rental stock are shown below
<a href="https://www.propertyobserver.com.au/images/2020/8/13/SA2%20CoreLogic%202.JPG" target="_blank">Click here to enlarge</a>:
<img src="https://www.urban.com.au/images/2020/8/13/SA2%20CoreLogic%202.JPG" alt="">
Across Southbank, rental stock has erupted from 568 rental listings in the 28 days to March 15, to over 1,200 by August 9th. In the year prior to the pandemic, total rent listings across Southbank averaged 450 listings per month. Interestingly, as Melbourne moves through its stage 4 restrictions, total rental listings have started to fall across most Melbourne regions.
Inner Melbourne, which has seen the highest surplus of rental stock since the onset of the pandemic, saw total rent listings fall -8.1% over the 28 days to August 9.
A significant portion of this decline was a reduction of 450 new listings counted in the lead up to the 9th of August, suggesting new listings have fallen off the back of physical restrictions around letting property.
The regions with large accumulations in rental stock reflect many of the pain points that have come with the COVID-19 downturn, particularly more recent commentary which has highlighted the gaping hole in housing demand because of international border closures. This is because the majority of new migrants to Australia are renters, at least initially.
The 10 SA4 regions which have seen an uplift in rental listings between March and August, together accounted for 29.1% of the net overseas migration to Australia over the year to June 2019. Other factors contributing to the heighted level of rent listings include a recent history of significant supply additions via a surge in high-rise construction activity, while the demand side has been additionally impacted by the weakness in labour markets typically associated with renters, including food and accommodation as well as the arts and recreation sector.
These trends highlight some of the acutely impacted markets. Due to the relatively high level of investor concentration, particularly in inner-city apartment markets, the patterns in rental supply and demand point to added downside risk for values in these precincts until international borders re-open and labour market conditions tighten.
ELIZA OWEN is the Head of Research Australia at CoreLogic
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Rental listings fell 10% across Australia in August: CoreLogic's Eliza Owen

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Not every Australian housing market has performed the same way since the onset of the COVID-19 pandemic.
The latest CoreLogic Home Value Index results revealed that since March, Melbourne property values fell 3.5%. Meanwhile, the ACT dwelling market reached a record high.
From June to July, the rate of decline eased across Perth from -1.1% to -0.6%, but deepened across Melbourne and Sydney.
<img src="https://www.urban.com.au/images/2020/8/6/Cumulative%20CL.JPG" alt="">
The chart above shows the varied trajectories of capital city markets from the end of March.
The end of March is a good place for dating the ‘start’ of the COVID-19 pandemic in Australia, because Australia recorded its 100th case of COVID-19 on the 14th of the month, and the 25th of March saw the national rollout of stage 2 restrictions, which created much of the economic shock as business activity slowed.
Melbourne has so far seen the largest cumulative declines in property values since March (3.5%). This was led by a 5.2% decline across the Inner East region.
As has been explored in recent weeks, the steeper decline across the Melbourne market is two-fold. Cyclically, Melbourne property is subject to more volatile growth rates, and is also presenting strong declines off the back of very high growth rates through the previous upswing.
Structurally, there has been an enormous demand shock to the Melbourne property market with the closure of international borders, where Melbourne previously had the highest level of net overseas migration of the capital city markets. This is similar to the Sydney housing market, which received the second highest volume of net interstate migrants over 2018-19.
Victoria has also seen the largest decline in payroll jobs of the states and territories, according to ABS data. Conversely, the ACT has seen property value increases of 1.3% since March. While the performance of the ACT market may seem like an anomaly, the ACT dwelling market is one of the few markets performing as may be expected amid the record low cash rate setting.
RBA research has noted that reductions in the cash rate typically increase property values over time, because debt becomes cheaper and purchasing capacity increases.
However, it is still striking that 70% of food and accommodation employers reported a reduction in staff hours. Food and accommodation employs about 8% of Australians, or about 1.2 million people. This is where a more granular view of employment data can highlight risks to the property market.
The detailed quarterly survey data provides insight into what industry residents work in, at the SA4 level. The February edition suggests that most food and accommodation workers are highly concentrated in Sydney’s Inner West, followed by the Sunshine Coast and the Coffs Harbour-Grafton region.
This market has likely been buoyed by the relative stability in employment across sectors where workers are on higher incomes, and are more likely to be home owners or prospective buyers. For example, ABS payroll data shows the number of jobs across the financial and insurance industry in the ACT has actually increased 0.7% since the start of the pandemic.
A ‘two tiered’ state of the labour market is highlighted by the fact the ACT accommodation and food services sector has seen the largest rate of decline of the states and territories. This industry is more likely to be comprised of renters, and rental values have fallen half a percent across the ACT since March, with larger falls across the unit sector (-1.0%). Smaller housing markets have seen better capital growth results since March.
Adelaide is a relatively steady market that has traditionally not seen volatile movements in response to negative economic shocks. This may be partly to do with the relatively low level of investment activity across the market. CoreLogic estimates that the portion of dwellings across Adelaide that were owned by investors as of July 2020 was 28.9%, compared with 34.5% nationally. While Adelaide has seen modest growth during the pandemic, this has not traditionally been a market with strong capital growth returns.
Annualised growth across Adelaide dwellings over the past 10 years was 1.3%, compared with 3.0% across the combined capital cities market. It is also worth noting that while cumulative price changes show 4 of the 8 capital city markets have not declined in value since March, almost all markets are showing a slowdown in growth rates. This suggests that, as with past downturns, most housing markets will be subject to a downswing phase.
 What to expect going forward
Looking forward, there are a variety of factors that will influence the outlook for home values. Of immediate concern is the steepening curve of the virus in Victoria.
Considering Victoria accounts for around one quarter of the nation’s economy, the stage four lockdown has already dampened both consumer and business sentiment nationally and the interruption to economic activity will deepen and lengthen Australia’s recession.
Cities where labour markets are more impacted are also likely to under-perform, as will those with more significant exposure to overseas migration as a source of housing demand.
As federal government fiscal support moves from around $18 billion per month to around $3 billion from October, housing market conditions will be tested more broadly; this is when we are likely to see a rise in the number of households facing financial distress and a lift in urgent sales.
The expiry of mortgage repayment holidays is another downside factor for the market. Pre-COVID, mortgage arrears remained around 1% of the mortgage book, but with unemployment expected to reach 10%, along with less fiscal support and an expectation that mortgagors taking a repayment holiday will need to face up to their debts by April next year, it’s reasonable to expect a sharp rise in mortgage arrears which could see a lift in distressed properties hitting the market. The RBA has previously noted for every 1 per cent rise in the unemployment rate, 90 day mortgage arrears generally increase by 80 basis points.
 
If unemployment rises to 10%, that implies a 90 day mortgage arrears rate around 5%. Arguably, this may be an overstatement, considering weak labour market conditions are skewed to more casualised workers who tend to be renters rather than home owners.
The outlook for both the economy and housing markets remains extremely uncertain, but risk remains skewed to the downside.
ELIZA OWEN is the Head of Research Australia at CoreLogic
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Why capital cities performed differently amid COVID-19: CoreLogic's Eliza Owen

<a href="https://www.apartments.com.au/developers/draycon">Draycon Building</a> is nearing completion of Boutique Chevron Island, a 42-apartment development on the northern end of Chevron Island at 17–19 Parneno Street, with a limited-time offer of fully furnished apartments available.

Now more than 90 per cent complete, <a href="https://www.apartments.com.au/buildings/boutique-chevron-island-17-19-parneno-chevron-island-qld-4217">Boutique</a> has been shaped by one of the Gold Coast’s most tightly held island addresses, where riverfront outlooks and walkable access to Surfers Paradise converge.

For Draycon Building Managing Director Howard Dabit, the appeal of the site was immediate.

“I knew it was a good site as soon as I saw it,” Dabit said.

“The position and location on the north end of <a href="https://www.apartments.com.au/developments/chevron-island-qld-4217">Chevron Island</a>, the way the river swirls around the site basically from the north to the east, it feels like the site is surrounded by the water. The height that we’ve got and the aspect looking north is beautiful. Eighty per cent of the apartments are looking north so they get that drenching sunlight coming in.”

[smartcode_project:default project_id=89709 project_image_fid=360922]

That northern orientation places the development within a stretch of Chevron Island defined by open river aspects and skyline views, while remaining embedded in the suburb’s established village setting.

Chevron Island has increasingly drawn owner-occupiers seeking centrality without the intensity of high-rise beachfront living. Positioned at the geographical centre of the Gold Coast, the island offers direct access to both the beach and key cultural infrastructure while retaining a neighbourhood-scale character.

Connected by bridge to Surfers Paradise, Chevron Island offers walkable access to beaches, riverfront parklands and a revitalised foreshore boulevard animated by walkers and cyclists throughout the day. The Pacific Ocean is only minutes away, reinforcing the suburb’s dual river-and-surf identity.

At the same time, Thomas Drive forms the spine of the island’s village life, delivering cafés, wine bars, casual dining and everyday services within easy reach. Independent grocers, wellness operators and neighbourhood retailers contribute to a community atmosphere that remains distinct from the vertical scale of the beachfront.

[smartcode_project:default project_id=89709 project_image_fid=360915]

In the opposite direction, the Green Bridge links directly to HOTA – Home of the Arts – placing galleries, performance venues and parklands within walking distance. Weekly markets and major exhibitions draw visitors from across the region, while residents return to a quieter residential pocket at day’s end.

Public transport, including nearby bus routes and the G:link light rail corridor along the coastal spine, strengthens connectivity north and south. Griffith University, the Gold Coast University Hospital precinct and established private schools such as The Southport School are all within a short drive.

Ongoing investment across Surfers Paradise, HOTA and the broader Southport corridor has elevated amenity while preserving Chevron Island’s comparatively low-rise residential character. It is this balance, walkable village atmosphere paired with metropolitan-scale infrastructure, that continues to differentiate the suburb from higher-density beachfront precincts.

Boutique comprises just 42 residences, designed to maximise river and skyline outlooks within this tightly held island setting.

Boutique Chevron Island is slated for completion in April 2026, with prices starting from $1,220,000.

[smartcode_project_cta:default project_id=89709]

Joel Robinson

Draycon Building’s Boutique Chevron Island places 42 residences at the heart of the Gold Coast

Sydney developer <a href="https://www.apartments.com.au/developers/deicorp">Deicorp</a> has secured planning approval for a $300 million residential development in Lindfield, marking the company’s second project on Sydney’s North Shore and its first on the Upper North Shore.

Located on Beaconsfield Parade and designed by DKO Architecture, the state significant development comprises three buildings of up to 10 storeys and will include 399 residences, including 59 affordable homes and 40 adaptable homes.

Residences will range in size from one, two and three bedrooms, with two-bedroom apartments accounting for over 60 per cent of the product make-up. Residents will have access to a broad suite of amenities, including a wellness area, indoor and outdoor recreational spaces, a pool, a gym, a community room and a golf simulator.

In line with Deicorp’s long-standing focus on creating transit-oriented communities, the project is located just 260 metres from the Lindfield Train Station, reinforcing its role in delivering well-connected housing close to established infrastructure, retail and local services.

The inclusion of affordable and adaptable housing supports greater diversity within the local market, while the mix of apartment types responds to demand from downsizers, young professionals and families seeking access to the Upper North Shore.

Deicorp Founder Fouad Deiri OAM said the approval represents an important milestone for both the company and the suburb

“This approval allows us to deliver well-designed homes in a location that is already supported by strong transport and community infrastructure," Deiri said.

"Our focus is on creating places that integrate into their surroundings and provide long-term value for residents, and the broader Lindfield community. Being within walking distance of the station ensures this project supports sustainable growth in the right locations."

Across its portfolio, Deicorp currently has 4,703 apartments under construction, playing a leading role in shaping connected, liveable communities across Sydney.

Its expanding portfolio of Metro-linked developments includes Tallawong Village, <a href="https://www.apartments.com.au/new-apartments/kings-bay-village-five-dock-53-75-queens-road-five-dock-nsw-2046">Kings Bay Village</a> in Five Dock, <a href="https://www.apartments.com.au/new-apartments/hyde-metropolitan-sydney-133-141-liverpool-street-sydney-nsw-2000">Hyde Metropolitan</a> in Sydney CBD, <a href="https://www.apartments.com.au/new-apartments/falcon-alexander-crows-nest-8-alexander-street-crows-nest-nsw-2065">Falcon &amp; Alexander</a> in Crows Nest and Showground Village, Castle Hill.

Deicorp purchased the Beaconsfield Paradise site last year. Construction is scheduled to commence in Q2 of 2026 and will be completed in 2029.

Deicorp expands portfolio to nearly 5,000 apartments with Lindfield project

In a joint venture with The Trump Organization, Australia developer Altus Property Group has announced plans to bring a Trump International Hotel &amp; Tower to the Gold Coast, marking the first Trump-branded project in Australia.

"Trump International Hotel &amp; Tower, Gold Coast is our first official project in Australia and reflects our unwavering commitment to delivering world-class luxury experiences in iconic locations around the world," Eric Trump, Executive Vice President of The Trump Organization, said.

"This development exemplifies the Trump brand’s dedication to quality, sophistication, and unmatched service, and we are thrilled to bring this vision to the vibrant Gold Coast community."

The 91-storey building, which will become the tallest in Australia at 335 metres, will feature a&nbsp;285-room luxury hotel bearing the trademark Trump logo. It will also include 272 luxury residential apartments, a three-level podium with an exclusive Beach Club, and over 3,400 sqm of premium commercial, retail, and dining space, revitalizing the central Surfers Paradise precinct.

“Trump International Hotel &amp; Tower, Gold Coast will be a truly unique offering in the Australian market, bringing the prestige and allure of a world-class luxury brand,"&nbsp;Altus founder and chief executive David Young said.

"Altus Property Group is proud of its track record in delivering landmark developments across Australia, and our expertise ensures this project will be an outstanding success."

Trump Hotel heads for the Gold Coast to become Australia's tallest building

More than a century after the Corrimal Coke Works first opened in 1912, the industrial landmark that helped shape the suburb is being reinterpreted as a walkable residential neighbourhood, with Stage One of <a href="https://www.apartments.com.au/new-apartments/the-works-stage-one-27-railway-street-corrimal-nsw-2518">The Works</a> now underway at 27 Railway Street.

For 102 years, the site was central to <a href="https://www.apartments.com.au/developments/corrimal-nsw-2518">Corrimal</a>’s economic and social identity before operations ceased in 2014. Rather than erasing that legacy, developer Legacy Property has embedded it into the masterplan, retaining and reinterpreting elements such as the iconic 1912 brick chimney and sections of the original C1 Coke Oven Battery, alongside the adaptive reuse of the former powerhouse building.

Stage One will introduce 181 apartments across low-rise buildings, offering predominantly two and three-bedroom residences with completion targeted for mid-2027. The scale and configuration reflect a deliberate focus on owner-occupiers, targeting those seeking a lower-maintenance home in a prime location within the northern suburbs of Wollongong.

[smartcode_project:default project_id=143415 project_image_fid=359833]

Apartments have been designed to maximise natural light and cross-ventilation, with floor-to-ceiling glazing extending living areas onto generous balconies. Engineered timber flooring, induction cooktops and 900mm ovens in larger residences support everyday functionality, while two interior palettes allow buyers to tailor finishes to their preferences. The material selection draws on a restrained coastal language, intended to connect homes to their surroundings rather than compete with them.

The Works forms part of a broader 18-hectare masterplan that will ultimately deliver around 550 dwellings, new parks, and a heritage precinct celebrating the site’s past. More than seven hectares are dedicated to open space, including Southern Park and a Village Green with community gardens and recreation areas. The creek corridor is being rehabilitated with 150,000 native plantings, restoring biodiversity to the site and softening landscape.

[smartcode_project:default project_id=143415 project_image_fid=359841]

Positioned adjacent to Corrimal Station and within walking distance of Corrimal Town Centre, the precinct places daily essentials, rail connections and local retail within easy reach. Wollongong CBD, including the hospital, university and entertainment venues, sits approximately 6.5 kilometres to the south.

For buyers more familiar with North Wollongong, Corrimal offers a different proposition: a well-established coastal suburb framed by beaches to the east and the escarpment to the west, with a strong sense of local identity shaped in part by the former Coke Works. The Works seeks to reinforce that identity by creating a connected, walkable neighbourhood between coast and escarpment, rather than a standalone apartment complex.

Sustainability underpins the development approach. The Works is targeting Wollongong’s first 5-Star Green Star-rated community, with water-sensitive urban design, recycled materials and energy-efficient buildings integrated across the masterplan. For residents, these measures provide not only environmental benefits but also reduced operational costs and future resilience.

[smartcode_project:default project_id=143415 project_image_fid=359842]

With construction commenced and display materials available to view, prospective buyers can now engage more directly with the project’s vision, reviewing floorplans, material selections and the broader masterplan in detail. For many local homeowners weighing a move, the opportunity to experience how heritage, landscape and contemporary design intersect may help bridge the gap between familiarity and the next chapter.

As Stage One progresses toward its mid-2027 completion, The Works represents a significant chapter in Corrimal’s evolution, transforming a site that once powered local industry into a walkable residential precinct designed for its next generation of residents.

[smartcode_project_cta:default project_id=143415]

Legacy Property’s The Works reimagines Corrimal’s century-old Coke Works

When it comes to developing in Melb​ourne's Bayside region, <a href="https://www.apartments.com.au/developers/lowe-living">Lowe Living</a> knows exactly what buyers want.

With a longstanding presence in the area and a string of sell-out projects, Lowe Living consistently delivers developments that are as sought-after as their predecessors.

Their latest instalment is in <a href="https://www.apartments.com.au/developments/hampton-vic-3188">Hampton</a><a href="https://www.apartments.com.au/developments/hampton-east-vic-3188">&nbsp;East,</a> the same postcode where they have previously delivered Hampton Hill and Oceano. The developer-builder recently commenced construction on its newest project,&nbsp;<a href="https://www.apartments.com.au/new-apartments/marella-hampton-31-35-alicia-street-hampton-east-vic-3188">Marella</a>, a collection of 32 apartments just five minutes from the beach.

Site acquisition is paramount to success. Lowe Living rarely brings a building to market that isn’t within walking distance of essential amenities, whether it be the beach, a prominent retail strip, or a train station. Marella is no exception, located at its Alicia Street address, less than a kilometre from the retail heart of Hampton Street and Hampton Station.

[smartcode_project:default project_id=146197 project_image_fid=358495]

Equally important to Lowe Living is the architecture.

For Marella, they appointed <a href="https://www.apartments.com.au/architects/cera-stribley-architects">Cera Stribley</a>, who explains that the architectural vision was to create a contemporary reinterpretation of the Californian bungalow, a style that’s iconic to Hampton’s heritage.

"By borrowing, abstracting, and reinterpreting elements of this quintessential style, such as strong datum lines, articulated columns, exposed structures, and roof tiles, our design strikes a balance between modernity and familiarity," says Cera Stribley.

"This approach ensures that the development is not only visually appealing but also contextually sensitive, resonating with Hampton's existing architectural landscape."

[smartcode_project:default project_id=146197 project_image_fid=358499]

The building features terracotta brick, soft cream masonry, and exposed metal detailing, giving it a tactile presence that is intended to weather gently over time.

Internally, the focus on lasting quality continues, with two and three-bedroom residences anchored by sculptural stone kitchen islands, natural light, and clearly defined transitions between living, dining, and outdoor spaces.

The layouts have been carefully designed. Open-plan zones extend to private balconies, with light-filled interiors and generous kitchen proportions, supported by Miele wall ovens, induction cooktops, and integrated fridge-freezers. These are not small apartments rebranded as luxury; they have been designed at scale, with ample storage, hotel-style entry access, and secure basement parking provided as standard.

[smartcode_project:default project_id=146197 project_image_fid=358492]

At the uppermost level, Marella’s Signature Collection penthouses offer city or bay views, large entertaining terraces (some with outdoor spas), and elevated finishes, including fully wrapped stone kitchen benches and a Liebherr wine fridge.

Flexible room arrangements allow for a fourth bedroom or secondary living space, sought-after by both empty nesters who want the space when family visits and families with older children.

[smartcode_project:default project_id=146197 project_image_fid=358498]

A residents’ lounge on the ground floor reinforces the project’s small-community feel. With a fireplace, private dining area, and adjoining terrace, it’s one of several shared spaces that balance amenity with privacy and scale.

Construction has commenced, with completion expected in early 2027.

[smartcode_project_cta:default project_id=146197]

Eliza Owen

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