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

Joel Robinson

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

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

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

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

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

Parcel delivery is joining the apartment amenity checklist

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

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

Sydney’s property market is known for high prices, competitive bidding, and mounting pressure on first home buyers. But change is on the horizon.

From late 2025, eligible first home buyers in New South Wales will have access to a new federal government initiative aimed at addressing affordability: the Help to Buy Scheme.&nbsp;

<h2>What is the Help to Buy Scheme?</h2>

The program introduces a shared equity model intended to reduce the upfront cost of entering the property market, particularly in high-demand urban areas such as Sydney.

The scheme operates under a shared ownership structure in which the federal government takes an equity stake of up to 40 per cent for new homes, or 30 per cent for existing dwellings. This arrangement allows eligible buyers to significantly reduce their loan size and avoid the added cost of Lenders Mortgage Insurance (LMI).

Under this model, purchasers can enter the property market with as little as a two per cent deposit, well below the traditional 10 to 20 per cent usually required. The government’s contribution is not a loan but a co-ownership stake in the property. As such, there is no interest or rent charged on its portion.

Because the government’s equity combined with the buyer’s deposit typically meets or exceeds the 20 per cent threshold, LMI does not apply. The remaining balance, generally between 60 and 70 per cent of the property’s value, is financed through a standard home loan with a participating lender.

The government's equity in the property remains in place until the buyer chooses to repay it voluntarily or until the property is sold. Buyers can buy back the government’s share over time, in increments of at least five per cent, depending on their financial situation.

There is no fixed repayment timeline, but the amount to be repaid will be based on the property's market value at the time of repayment, not the original purchase price.

<h2>How do you qualify for the&nbsp;Help to Buy Scheme?</h2>

To qualify for the Help to Buy Scheme, applicants must meet the following conditions:

<ul>
	<li>Be an Australian citizen at least 18 years of age.</li>
	<li>Be a first-home buyer who does not currently own property.</li>
	<li>Intend to live in the property as their primary residence.</li>
	<li>Earn less than $100,000 per year for individuals, or $160,000 for couples.</li>
	<li>Purchase a property within the regional price caps, currently $950,000 in Sydney, though this is expected to rise to approximately $1.3 million ahead of the program’s launch.</li>
</ul>

While the Help to Buy Scheme does not solve affordability challenges across the board, it does offer a more accessible pathway for a defined segment of the market, particularly younger buyers with moderate incomes who have been priced out of traditional lending routes.

The scheme is expected to commence in NSW in late 2025, as part of a national rollout.

Under the new model, purchasers can enter the property market with as little as a two per cent deposit, well below the traditional 10 to 20 per cent usually required

Help to Buy Scheme: What first home buyers in NSW need to know

The First Home Owners Grant (FHOG) is a government initiative designed to help eligible first-time home buyers by offering financial assistance towards the purchase or construction of a new home.

While the FHOG is a nationwide program, it is administered separately by each state and territory, meaning the eligibility criteria, grant amounts, and property requirements can vary depending on your location. This means that the amount available and the conditions attached to the grant will differ, so it is important to check the specific guidelines for your state or territory.

It’s important to note that the FHOG is just one of several incentives available to first home buyers. In most states and territories, the grant is not linked to stamp duty exemptions or concessions, with the exception of the Australian Capital Territory (ACT). The FHOG is typically a one-off payment, reducing the overall cost of purchasing or building a new home before any stamp duty concessions are applied.

Below, we provide a breakdown of the First Home Owner Grants available across Australia, outlining the specific details for each state and territory.

<h2>New South Wales First Home Owner Grant</h2>

First Home Owner Grant: Offers a $10,000 grant for new homes valued up to $600,000. For land purchases and owner-builders, the threshold extends to $750,000.

Stamp Duty Benefits: Provides full stamp duty exemption for homes valued up to $800,000, with concessions available for properties up to $1 million.

<h2>Victoria South Wales First Home Owner Grant</h2>

First Home Owner Grant: Provides a $10,000 grant for first-home buyers purchasing or building new homes valued up to $750,000.

Stamp Duty Benefits: Offers full stamp duty exemption for properties up to $600,000, with concessions available up to $750,000.

<h2>Queensland First Home Owner Grant</h2>

First Home Owner Grant: Offers $30,000 for contracts signed between 20 November 2023 and 30 June 2025. The FHOG applies to new homes valued up to $750,000.

Stamp Duty Concessions: Provides additional concessions for properties valued up to $800,000.

<h2>Western Australia First Home Owner Grant</h2>

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First Home Owner Grant: Offers a $10,000 grant for new homes valued up to $750,000 in the southern regions and up to $1 million in the northern regions.

Stamp Duty Concessions: Available for homes valued up to $600,000 for transactions entered into on or after 9 May 2024.

<h2>Australian Capital Territory First Home Owner Grant</h2>

First Home Owner Grant: Replaced by the Home Buyer Concession Scheme, offering full stamp duty concessions for eligible buyers.

<h2>South Australia First Home Owner Grant</h2>

First Home Owner Grant: Provides up to $15,000 for new homes, including houses, apartments, and townhouses. As of 6 June 2024, there is no property value cap for eligibility.

Stamp Duty Relief: Available for new homes and vacant land purchases.

<h2>Tasmania First Home Owner Grant</h2>

First Home Owner Grant: Offers a $10,000 grant for new homes and off the plan purchases.

Stamp Duty Exemption: Between 18 February 2024 and 30 June 2026, first home buyers of established homes valued up to $750,000 receive a full exemption on property transfer duty.

<h2>Northern Territory First Home Owner Grant</h2>

First Home Owner Grant: The Northern Territory provides a $10,000 grant for new homes only. Additional government grants and concessions are available for first home buyers.

Stamp Duty Exemption: The only stamp duty exemption available to property buyers is the House and Land Package Exemption (HLPE).

Eligibility criteria and application processes differ across states. Prospective buyers should refer to their respective state revenue offices for full details on grant availability, conditions, and additional concessions.

Every First Home Owner Grant for new property by state

In the ever-evolving landscape of sustainable architecture and environmentally conscious design, systems and ratings in place can help determine the energy efficiency of residential buildings in Australia.

Australia has multiple building rating systems that evaluate energy efficiency and sustainability in existing and new building designs.

Some systems assess individual building components, while others provide an overall rating for the entire structure.

A rating system ensures that homes are comfortable and energy-efficient, whether you are buying, renovating, or building.

NatHERS (Nationwide House Energy Rating Scheme) is a common way for new homes to meet energy efficiency requirements.

As new developments continue to shape the urban environment, understanding NatHERS ratings becomes essential for developers and homeowners. This article delves into the concept of NatHERS ratings, their significance, and how they contribute to creating energy-efficient homes.

<h2>What is NatHERS?</h2>

NatHERS is a national initiative implemented by the Australian government to promote energy efficiency in residential buildings. The scheme aims to provide a standardised method for assessing the thermal performance of homes, considering factors such as insulation, orientation, ventilation, and building materials.&nbsp;

NatHERS ratings are the most common way new homes meet the National Construction Code's (NCC's) minimum energy efficiency requirements.&nbsp;

NatHERS assessments provide thermal and whole-home ratings for new homes, townhouses, and apartments.

The rating helps evaluate the energy performance of buildings, guides homeowners and developers to make informed decisions about the energy efficiency of their properties, and encourages the construction of more sustainable, comfortable, and cost-effective homes.

<h2>How NatHERS Ratings Work</h2>

NatHERS ratings are determined through four accredited software tools (AccuRate, BERS Pro, FirstRate5, HERO) using a calculation engine CSIRO developed to predict building temperature based on various factors.

The tools can model complex effects of building mass, insulation, window size, and other elements.

The outcome is a star rating that reflects the building's overall thermal efficiency, indicating how well it can maintain a comfortable indoor temperature without excessive reliance on heating or cooling systems.

The star rating scale ranges from 0 to 10, with a 6-star rating being the minimum requirement for compliance with the National Construction Code (NCC).&nbsp;

Achieving a higher star rating demonstrates a commitment to energy efficiency and sustainability, as the building is better equipped to minimise its environmental impact and reduce long-term energy costs.

Anyone can use NatHERS tools, but accredited assessors can provide certified ratings and professional advice.

<h2>Benefits of Higher NatHERS Ratings</h2>

Energy Efficiency: Buildings with higher NatHERS ratings are more energy-efficient, requiring less heating and cooling energy. This reduces the structure's carbon footprint and lowers occupants' energy bills.

Cost Savings: Homes with higher NatHERS ratings are generally more energy-efficient, resulting in reduced energy consumption for heating and cooling. This translates to lower energy bills for homeowners, making sustainable living environmentally friendly and economically viable in the long run.

Environmental Impact: Lower energy consumption directly translates to a reduced environmental impact. Buildings with higher NatHERS ratings contribute to the overall goal of mitigating climate change by lowering greenhouse gas emissions associated with heating and cooling systems.

Improved Comfort: Buildings with high NatHERS ratings offer better thermal comfort to occupants. Proper insulation, well-designed ventilation, and optimal orientation maintain a consistent and comfortable indoor temperature, providing occupants with a more enjoyable and healthier space.

Market Value and Desirability: Higher NatHERS ratings can enhance the market value of a property. As energy efficiency becomes a more significant consideration for homebuyers, a well-rated building may attract a premium price and stand out in the real estate market.

Compliance with Building Codes: NatHERS ratings are a vital component of the National Construction Code (NCC), and compliance with these ratings is often a mandatory requirement for new developments. Local councils and planning authorities may set minimum energy efficiency standards that must be met to obtain development approval.

The Nationwide House Energy Rating Scheme (NatHERS) is a crucial initiative shaping the future of energy-efficient, resilient, and cost-effective homes. With its recent upgrades, NatHERS has evolved into a world-leading tool for the building sector, supporting the global commitment to achieving net-zero emissions by 2050.

Staff Writer

What is a NatHERS rating in new off the plan apartment developments?

Mixed-use developments have gained significant popularity across Australia in recent years due to their unique blend of residential, commercial, and recreational spaces.

Unlike traditional single-purpose developments, mixed-use projects offer a harmonious integration of various functions within a single locale.

Residential units seamlessly coexist with commercial establishments, retail outlets, dining venues, entertainment hubs, and recreational facilities, with the combination not only enhances convenience but also fosters a vibrant lifestyle and a sense of community.

<h3>Convenience and accessibility</h3>

Mixed-use developments are designed with convenience in mind. They often integrate residential units with commercial spaces, retail outlets, restaurants, and recreational facilities, creating a self-contained community.

[smartcode_project:default project_id=114215 project_image_fid=204874]

The proximity allows residents to enjoy the convenience of having essential amenities and services within walking distance. Whether it's grabbing a cup of coffee, going grocery shopping, or accessing healthcare services, everything is conveniently located, saving residents time and effort.

<h3>Vibrant lifestyle and community</h3>

One of the major advantages of mixed-use developments is the vibrant lifestyle they offer. With a diverse range of amenities and communal spaces, residents have ample opportunities to interact, socialise, and build a sense of community.

[smartcode_project:default project_id=107714 project_image_fid=214122]

The presence of parks, community centres, and shared spaces fosters a lively atmosphere, encouraging residents to engage in various activities and events. The vibrant lifestyle within these developments creates a unique sense of belonging and camaraderie among the residents.

<h3>Potential for higher rental yields and property value appreciation</h3>

Mixed-use developments tend to attract a broad range of tenants and buyers due to their versatile nature. This high demand can result in higher rental yields for investors and potentially lead to property value appreciation over time.

[smartcode_project:default project_id=139989 project_image_fid=212887]

The integration of commercial and retail spaces attracts businesses, which can provide a stable rental income stream. Additionally, the popularity of mixed-use developments often drives up property values, making them a potentially lucrative investment in the long term.

<h3>Enhanced security and maintenance</h3>

Mixed-use developments typically have comprehensive security measures in place. With controlled access points, CCTV surveillance, and professional security staff, residents can enjoy enhanced safety and peace of mind.

[smartcode_project:default project_id=108019 project_image_fid=212658]

Additionally, these developments often have dedicated maintenance teams responsible for the upkeep of common areas, landscaping, and infrastructure. This ensures that the overall appearance and functionality of the development are well-maintained, creating a pleasant living environment for residents.

<h3>Live-work-play balance</h3>

One of the key attractions of mixed-use developments is the ability to achieve a desirable live-work-play balance. The integration of residential and commercial spaces allows residents to live closer to their workplaces, reducing commuting time and improving work-life balance.

The proximity to various amenities and recreational facilities encourages an active and healthy lifestyle. Residents can easily access fitness centres, parks, restaurants, and entertainment options, all within the same development, leading to a more fulfilling and convenient way of life.

alisonwarters@gmail.com

The top five reasons to buy in a mixed-use development

When buying a property, everyone needs to be aware of the additional costs that come as part of the buying process.

Often the largest outlay, after the deposit which goes to the bank, is stamp duty.

<h2 style="line-height: 1.38;">What is Stamp Duty?</h2>

Stamp duty is an extra tax to pay the government when you buy land, a property, and other certain assets.

It happens when the legal ownership is transferred. It can also be known as property transfer duty or transfer duty.

<iframe allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture" allowfullscreen="" frameborder="0" height="415" src="https://www.youtube.com/embed/C32BWkB5--c" title="YouTube video player" width="660"></iframe>

<h2>Who pays Stamp Duty?</h2>

In some circumstances, you may get an exemption. For some states, you won’t have to pay for stamp duty if you are a first home buyer or a pensioner for houses under a particular price. There are also stamp duty concessions, where you may be entitled to a discount.

<h2>How much does Stamp Duty cost?</h2>

Each state has different rules which affect how much you need to pay. These rules can affect the rate you pay, and the timeframe you will need to pay in. Before you buy land or a property, make sure you check the up-to-date information for your state’s stamp duty.

You can use a free stamp duty calculator online to see approximately how much you’ll need to pay. Find out if you’re eligible for an exemption by enquiring on a project via Urban!

Overall, the stamp duty you need to pay will depend on:

<ul>
	<li aria-level="1">How much your land/property is worth</li>
	<li aria-level="1">Where your land/property is located</li>
	<li aria-level="1">What type of land/property it is</li>
</ul>

Want to find out more? <a href="https://www.youtube.com/@UrbanAustralia?utm_source=YouTube&amp;utm_medium=Video&amp;utm_campaign=Subscribe&amp;utm_id=Subscribe">Subscribe to our YouTube channel</a> for more property videos.

Ellen Walker

Off-the-plan property explained: What is stamp duty?

<html><body>The near 500,000 borrowers who took a “repayment holiday” at the height of the COVID-19 pandemic now face difficulties in refinancing to a cheaper home loan rate loan.

Despite lenders claiming COVID-19 repayment holidays wouldn’t damage borrowers’ creditworthiness, borrowers have now been told they need to re-established a clean bill of repayments before refinancing consideration.

The banks have reportedly claimed the pause signalled a potential issue with their borrowers, notwithstanding their resumption of payments.

Borrowers took the pause with the understanding it would not affect their borrowing power.

The majority of loans granted repayment deferrals were housing loans; nearly 500,000 were deferred, which was close to 10% of all home loans amounting to $195 billion in value.

“Lenders’ policies going into this was for it not to be a blemish on someone’s financial record going forward but unfortunately we’re seeing some banks not abiding by how it was originally designed to work,” Connective executive director Mark Haron told the Mortgage Professional Australia industry website.

Haron added lenders who refuse to refinance a customer purely because they have been on a repayment pause "should be called out."

“It’s a breach of what the intention of that program was and I’m sure the government would be interested in that,” he added.

MPA did not name any lending institution.

As at 31 January, according to data submitted to APRA by authorised deposit-taking institutions (ADIs) with over $20 million in loans subject to repayment deferral, a total of $37 billion worth of loans are still on temporary repayment deferrals, which is around 1.4 per cent of total loans outstanding, down from $50 billion (1.9 per cent of total loans outstanding) in December 2020. 

Housing loans make up the majority of total loans granted repayment deferral.

APRA granted temporary capital concessions to ADIs offering loan deferrals to small businesses and home loan customers struggling due to COVID-19. 

In allowing ADIs to temporarily treat loans with deferred repayments due to COVID-19 as if they continued to be performing loans, lenders avoided the imposition of higher capital requirements.

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Mortgage brokers have clients who have found it difficult to refinance because of taking a repayment pause during COVID-19

jchancellor

Borrowers face refinancing difficulties after COVID-19 repayment pause

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RBA ANNOUNCEMENT

At its meeting today, the Board decided to maintain the current policy settings, including the targets of 10 basis points for the cash rate and the yield on the 3-year Australian Government bond, as well as the parameters of the Term Funding Facility and the government bond purchase program.

The outlook for the global economy has improved over recent months due to the ongoing rollout of vaccines. While the path ahead is likely to remain bumpy and uneven, there are better prospects for a sustained recovery than there were a few months ago. Global trade has picked up and commodity prices have increased over recent months. Even so, the recovery remains dependent on the health situation and on significant fiscal and monetary support. Inflation remains low and below central bank targets.

The positive news on vaccines together with the prospect of further significant fiscal stimulus in the United States has seen longer-term bond yields increase considerably over the past month. This increase partly reflects a lift in expected inflation over the medium term to rates that are closer to central banks' targets. Reflecting these global developments, there have been similar movements in Australian bond markets. Changes in bond yields globally have been associated with volatility in some other asset prices, including foreign exchange rates. The Australian dollar remains in the upper end of the range of recent years.

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In Australia, the economic recovery is well under way and has been stronger than was earlier expected. There has been strong growth in employment and a welcome decline in the unemployment rate to 6.4 per cent. Retail spending has been strong and most of the households and businesses that had deferred loan repayments have now recommenced repayments. The recovery is expected to continue, with the central scenario being for GDP to grow by 3½ per cent over both 2021 and 2022. GDP is expected to return to its end-2019 level by the middle of this year.

Wage and price pressures are subdued and are expected to remain so for some years. The economy is still operating with considerable spare capacity and the unemployment rate remains higher than it has been for some years. Further progress in reducing spare capacity is expected, but it will be some time before the labour market is tight enough to generate wage increases that are consistent with achieving the inflation target. In the central scenario, the unemployment rate will still be around 6 per cent at the end of this year and 5½ per cent at the end of 2022. In underlying terms, inflation is expected to be 1¼ per cent over 2021 and 1½ per cent over 2022. CPI inflation is expected to rise temporarily because of the reversal of some COVID-19-related price reductions.

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The current monetary policy settings are continuing to help the economy by keeping financing costs very low, contributing to a lower exchange rate than otherwise, and supporting the supply of credit and household and business balance sheets. Together, monetary and fiscal policy are supporting the recovery in aggregate demand and the pick-up in employment.

Lending rates for most borrowers are at record lows and housing prices across Australia have increased recently. Housing credit growth to owner-occupiers has picked up, but investor and business credit growth remain weak. Lending standards remain sound and it is important that they remain so in an environment of rising housing prices and low interest rates.

[smartcode_project:default project_id=27728]

The Bank remains committed to the 3-year yield target and recently purchased bonds to support the target and will continue to do so as necessary. Also, bond purchases under the bond purchase program were brought forward this week to assist with the smooth functioning of the market. The Bank is prepared to make further adjustments to its purchases in response to market conditions. To date, a cumulative $74 billion of government bonds issued by the Australian Government and the states and territories have been purchased under the initial $100 billion program. A further $100 billion will be purchased following the completion of the initial program and the Bank is prepared to do more if that is necessary. Authorised deposit-taking institutions have drawn $91 billion under the Term Funding Facility and have access to a further $94 billion. Since the start of 2020, the RBA's balance sheet has increased by around $175 billion.

The Board remains committed to maintaining highly supportive monetary conditions until its goals are achieved. The Board will not increase the cash rate until actual inflation is sustainably within the 2 to 3 per cent target range. For this to occur, wages growth will have to be materially higher than it is currently. This will require significant gains in employment and a return to a tight labour market. The Board does not expect these conditions to be met until 2024 at the earliest.
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Housing prices across Australia have increased recently: RBA Governor Philip Lowe's March 2021 meeting statement

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Despite the pressure of soaring property prices, the RBA have decided to keep the official cash rate on hold at the March 2021 meeting.

In his <a href="/expert-insights/finance/housing-prices-across-australia-have-increased-recently-rba-governor-philip-lowes-march-2021-meeting-statement">meeting minutes</a>, RBA Governor Philip Lowe said that lending rates for most borrowers are at record lows and housing prices across Australia have increased recently.

"Housing credit growth to owner-occupiers has picked up, but investor and business credit growth remain weak," Lowe said.

"Lending standards remain sound and it is important that they remain so in an environment of rising housing prices and low interest rates."

[smartcode_project:default project_id=30087]

Canstar’s group executive of financial services Steve Mickenbecker said the Reserve Bank looks likely to find itself under property price pressure a lot sooner than it had expected.

“The Reserve Bank doesn’t expect to raise the cash rate for three years or more, but unless property prices can be slowed it will have to start looking for some way to apply the brakes," Mickenbecker said.

"First home buyers and new construction are leading the charge for property buying rather than investors, so the Reserve Bank can’t enlist APRA to target investors with lending caps as it has done previously.”

Mickenbecker said it is the perfect storm for house prices.

"On the supply side, new listings through 2020 were well below the four preceding years and total listings now are also down as stock is absorbed before or as soon as properties hit the market. Owners are loath to put a house on the market even at high current prices, fearing they will miss the boat getting back in.

[smartcode_project:default project_id=6798]

<h2>Should lending be looked at?</h2>

Analysis of owner-occupier rates from RateCity.com.au and property prices from CoreLogic show mortgage repayments are $140 less a month for the average new home buyer than in the previous housing peak of October 2017.

This is because the average owner-occupier interest rate has dropped by 1.42 per cent in this time, according to the RateCity.com.au database.

RateCity.com.au research director Sally Tindall said that while the RBA is unlikely to raise rates to keep a lid on the market this year, the regulator could respond by putting caps on risky lending for some borrowers.

Finder.com.au's monthly RBA Cash Rate Survey found that a little over half of respondents agree that the removal of responsible lending regulations could lead to an unstable level of household debt across the country.

Peter Boehm of CLSA Premium said, “When interest rates start to rise, it is possible a mortgage arrears time bomb will be released.”

[smartcode_project:default project_id=27728]

On the other side of the argument, 45% of experts argue that the current regulations in place are too onerous and are hurting both borrower and lender.

Rich Harvey of Propertybuyer said those with the ability to borrow sustainably and with good employment history and serviceability should be able to borrow.  

“Stronger borrowers create a stronger economy as they help inject investment into other sectors of economy,” Harvey said.

Nicholas Gruen of Lateral Economics said it's a real hardship for some older Australians who are income poor but asset rich.

“The regulations are pretty silly now, requiring lenders to turn down plenty of viable lending,” Gruen said. 
 
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RBA holds interest rate at record low 0.1 per cent at March 2021 meeting

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The home builder AVJennings, spurred by the Homebuilder grant, has seen a 47 per cent year on year jump in house sales.

The details were revealed when AVJennings reported its results for the six months to December 31.

It has 12,700 lots in its portfolio.

2021 will see the commencement of three new projects, Prosper at Kogarah in Sydney; Rosella Rise at Warnervale on the NSW Central Coast; and Aspect at Mernda in Melbourne’s strong northern corridor.

All are due to commence on-site development. Last year saw its Bethania project in Queensland recommence with construction after a three year hold.

<img alt="" height="816" src="https://s3-ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/pictures/article-images/av_jennings_results.jpg" width="1200">

Its managing director Peter Summers forecast an even better second half for the company given new-home buyers remain active. It had 408 pre-sales carried over at 31 December 2020.

It has 331 contracts signed at 31 December 2020 with a pre-sale value of $121 million expected to settle before 30th June 2021. Around 118 additional contracts were signed in 2021 to 23 February 2021. It typically sells to owner occupiers, with some 46 percent being first home buyers during the first year of the financial year.

During the last financial year FHBs sat at 35 percent of their buyers. Over the period investors fell from 11 percent to 9 percent, while builder/developers fell away to constitute 14 percent of the market rather than its prior 21 percent take up.

HomeBuilder and other government support/stimulus had been "vital" in encouraging existing underlying demand to continue with their buying intentions, the report noted. It also noted the resumption and level of immigration into Australia, and New Zealand, will be important drivers of activity for the sector.
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AVJennings is cautiously optimistic that the recovery will consolidate through 2021

Home builder AV Jennings sees big jump in house sales

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EXPERT INSIGHT

Australian capital city average dwelling prices rose 2% in February according to CoreLogic and are up 2.6% on a year ago. This is their fastest monthly gain since 2003 and they have now surpassed their September 2017 record high by 0.7%.

Sydney dwelling prices rose a very strong 2.5%, resulting in five months of gains, and are up 2.8% on a year ago. Melbourne prices also rose 2.1%, resulting in four months of gains, but are down -1.3% on a year ago reflecting a -5.6% fall around mid-2020 through the various lockdowns.

Prices in other cities were all up strongly led by Hobart with prices up 2.5% in February and 8.7% through the year, followed by Canberra up 1.9%, Brisbane and Perth both up 1.5%, Adelaide up 0.8% and Darwin up 0.7%. Prices in Hobart, Canberra, Brisbane and Adelaide are all at record highs.

<img alt="" height="794" src="https://s3-ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/pictures/article-images/surging_house_prices_oliver.jpg" width="1200">

Regional dwelling prices rose 2.1% in February and 9.4% on a year ago with their relative strength reflecting lower levels of indebtedness and hence less vulnerability to the financial stresses caused by the pandemic driven economic downturn, less exposure to the slump in immigration and increased buyer interest as people seek to relocate from cities as part of a secular trend towards working from home and a greater focus on lifestyle.

Capital city house prices rose 2.3% in February and 3.6% over the last 12 months whereas unit prices lagged with a 1.1% gain in the month and a -0.1% fall on a year ago, with the relative underperformance likely reflecting an ongoing shift in lifestyle preferences towards houses as a result of more working from home and a lifestyle choice and as weak rental conditions made worse by the slump in immigration constrain the inner city unit markets in Sydney and Melbourne. Over the last 12 months unit rents fell -8.0% in Melbourne and -5.3% in Sydney, although there were further signs of stabilisation in February.

The strength in home prices is consistent with the surge in new housing finance commitments over recent months. This rose another 10.5% in January and is now up 44.3% from a year ago. First home buyer finance surged 10.1%mom - and is up a whopping 73% on a year ago - to a new record high although with owner occupier ex first home buyer finance up an even stronger 11.3%, the first home buyer share of new loans slipped from a record 25% to 24.9%. Investor finance is now also surging and rose 9.4%. The ongoing strength in finance commitments points to more solid house price gains in the months ahead although January’s 2% capital city rise may be hard to beat.

Auction clearances are now very strong and sales are running around pre coronavirus levels, although listings are still relatively low. Clearance rates are at levels consistent with 15% or so annual price gains!

What’s driving the surge in home prices?

The combination of reopening unleashing pent up demand, government incentives, the removal of responsible lending obligations, record low mortgage rates, the desire to "escape from the city" and relatively low property listings are all helping to push prices higher with an element of FOMO (or the “fear of missing out” creeping in too. This is after bank payment holidays and Government income support measures averted a sharp fall in prices that would otherwise have followed from the pandemic recession. The combination has more than offset the impact of weak inner city rental markets and the hit to immigration and has brought forward demand from first home buyers and owner occupiers, with investors now starting to jump in too.

Average capital city dwelling prices have now surpassed their September 2017 high, although this masks a wide divergence with: clear record highs in Brisbane, Adelaide, Hobart and Canberra and in average regional home prices; Sydney and Melbourne still down just over 1% from their 2017 highs; and Perth and Darwin remaining well down on their 2014 highs.  

<img alt="" height="806" src="https://s3-ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/pictures/article-images/average_prices_record_high_oliver.jpg" width="1200">

Outlook

Australian home prices are likely to rise another 5% to 10% this year and next being boosted by record low mortgage rates, government home buyer incentives and the recovery in the jobs market but the stop to immigration and weak rental markets will likely constrain price gains in inner city areas and units in Melbourne and Sydney. Outer suburbs, houses, smaller cities and regional areas will see relatively stronger gains in 2021.

The phasing down of government incentives and exhaustion of first home buyers will likely see first home buyer demand as a share of housing finance and overall demand peak in the months ahead but they will likely be replaced by rebounding investor demand. Possible increases in 4 year plus fixed rate mortgage rates flowing from the recent surge in bond yields will act as a bit of a dampener but likely only enough to see price growth settle around a 5-10% annual pace.

Shane Oliver is the Head of Investment Strategy and Chief Economist at AMP Capital 
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The strength in home prices is consistent with the surge in new housing finance commitments over recent months

soliver

Housing finance commitments surged another 10.5% to start 2021: Shane Oliver

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EXPERT INSIGHT

The records have continued to tumble for the Aussie property market in early 2021. National home prices surged 2.1 per cent in February – the most since August 2003. Regional home prices also gained 2.1 per cent – the most in 17 years. And capital city home prices rose by 2.0 per cent – the biggest lift since September 2003.

Home prices are at record highs in Canberra, Adelaide, Brisbane and Hobart. Canberra home prices (up 1.9 per cent) rose the most in 13½ years; Perth home prices (up 1.55 per cent) lifted the most in 14 years; Brisbane home prices (up 1.5 per cent) gained the most in 13 years; and Hobart home prices (up 2.5 per cent) surged the most in 17 years. And it was the biggest lift in Sydney home prices (up 2.5 per cent) and Melbourne (up 2.1 per cent) since late 2019. 

But it’s regional Aussie housing markets – benefiting from lifestyle choices, remote working arrangements, internal migration, closed borders and better affordability – that are seeing massive price gains during the pandemic. Regional home prices climbed by 2.1 per cent in February – the biggest lift in 17 years. Regional home prices surged 9.4 per cent in the year to February – the strongest annual growth rate in 16½ years. CoreLogic data also shows that median home prices are at record highs in 53 of the 88 SA4 regions with just Townsville (down 0.6 per cent) and the NSW Riverina (down 0.3 per cent) posting price declines in February.

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Can home prices lift further from here? Absolutely. Preliminary CoreLogic capital city auction clearance rates hit 81.9 per cent last weekend with buyers keen to borrow to upgrade or buy another home.

The smaller capital cities are leading home price gains with Sydney and Melbourne still lagging. In fact, dwelling prices in Sydney are still 1.1 per cent below the July 2017 peak and Melbourne home prices are 1.7 per cent below the March 2020 peak. And resources boom towns – Perth and Darwin – still have a lot of catching up to do. In fact, Perth home prices are still a huge 17.4 per cent below the June 2014 peak and Darwin prices are 23.4 per cent below the April 2014 peak.

While slower population growth and rising supply of detached houses could slow price momentum, Commonwealth Group (CBA) economists forecast national home prices to lift by around 8.0 per cent in 2021. 

<h2>What do the figures show?  </h2>

Home prices – February 2021

The CoreLogic Home Value Index of national home prices rose by 2.1 per cent in February to be 4.0 per cent higher over the year. 

In capital cities, prices rose by 2.0 per cent to be up 2.6 per cent over the year. House prices climbed 2.3 per cent and apartment prices rose by 1.1 per cent. House prices were up 3.6 per cent on a year ago, but prices of apartments decreased by 0.1 per cent.

In regional areas, home prices jumped 2.1 per cent with house prices also up 2.1 per cent and apartment prices up by 1.9 per cent. Regional home prices were up 9.4 per cent on the year with houses lifting 9.7 per cent and apartments up 7.9 per cent.  

The average Australian capital city house price (median price) in February was $723,607 and the average unit price was $581,652.

Home prices were higher in all eight capital cities in February: Sydney (+2.5 per cent); Melbourne (+2.1 per cent); Brisbane (+1.5 per cent); Adelaide (+0.8 per cent); Perth (+1.5 per cent); Hobart (+2.5 per cent); Darwin (+0.7 per cent); Canberra (+1.9 per cent).

Home prices were higher than a year ago in seven of the eight capital cities in February: Sydney (+2.8 per cent); Melbourne (-1.3 per cent); Brisbane (+5.0 per cent); Adelaide (+7.3 per cent); Perth (+4.6 per cent); Hobart (+8.7 per cent); Darwin (+13.8 per cent); Canberra (+9.7 per cent).

Total returns on national dwellings rose by 7.6 per cent in the year to February with houses up 8.5 per cent and units up by 5.0 per cent on a year earlier. In contrast, the S&amp;P/ASX All Ordinaries Accumulation Index rose by 9.6 per cent over the year to February.

<h2>Conclusion</h2>

Australia’s property market is strong, driven by record-low borrowing costs, government stimulus, low housing inventories and an improving labour market backdrop. Of course, the lift in home prices is good for the household ‘wealth effect’ and consumer confidence – pivotal for continued retail spending. The lift in home building supports jobs in the construction sector with ‘brickies’ in short supply. But housing affordability is becoming an issue with Sydney the third least affordable and Melbourne the sixth least affordable housing markets according to recent reports from Bloomberg, Urban Reform Institute and Frontier Centre for Public Policy.

That said, the Reserve Bank’s private sector credit or loans data released last Friday suggests that housing sector credit growth (up 3.6 per cent over the year to January 2021) remains subdued when compared with historic levels. CBA Group economists expect housing credit growth to remain low and do not expect macro‑prudential policies to be implemented in 2021. But the lift in household mortgage debt will unnerve policymakers.

Australia’s factory sector is in good shape. According to the AiGroup, production rose to multi-decade highs in February. The AiGroup gauge hit 3-year highs with surveyed purchasing managers suggesting that government stimulus is driving up demand as the economic recovery gains traction.
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jordan_55689

Biggest lift in Australian home prices in 17 years: CommSec's Ryan Felsman

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Experts and economists are united in their view that the RBA will hold the cash rate this month, with only one prediction for any movements at all in 2021, according to the latest survey from Finder.com.au.

Tony Makin of Griffith University, believes the rate will increase this year due to the economic effects of the COVID-19 vaccination rollout.

“Global economic activity will pick up as countries are vaccinated. Given the expansion in money supplies, other things equal this will put upward pressure on inflation. Otherwise, macroeconomics textbooks need to be rewritten. 

“At the same time, record-breaking levels of public debt worldwide will continue to exert upward pressure on bond yields," Makin said.

Shane Oliver from AMP Capital said that while the economy has recovered faster than expected, the RBA is still a long way away from meeting its inflation and employment goals. 

“A rate hike is still a long way away. 

“That said, the faster than expected recovery will likely see the first hike occur earlier than the RBA's expectation of ‘no increase before 2024’. It could come late next year or early 2023," Oliver said.

Positive sentiment around both housing affordability (3%) and cost of living (3%) reached the lowest level ever recorded since the Finder survey began in 2018.

Employment continued to be the highest indicator measured with 55% expressing positive sentiment, down from its record-high of 73% last month.

Positive sentiment around employment plummeted to 0% in April when the lockdowns first began, but the nation’s stronger-than-expected economic recovery has resulted in a rosier outlook for the job market. 
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Experts and economists are united in their view that the RBA will hold the cash rate this month, with only one prediction for any movements at all in 2021

Experts and economists forecast a cash rate lockdown until 2022

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The disparity in rental markets across Australia has been extreme. At one end of the spectrum we have extremely tight rental conditions in cities such as Perth and Darwin where both house and unit annual rental growth is above 10%. At the other end are the unit rental markets of Sydney and Melbourne where rents have plunged over the last year, down -5.3% in Sydney, and -8.0% lower in Melbourne. In a similar vein to housing values, rental markets are stronger within the detached housing sector relative to the unit sector.

“The strength in Perth and Darwin’s rental sector can be attributed to a mix of low supply, due to a recent history of low investor participation, and rising demand as interstate migration trends move into positive territory. The opposite trends in Sydney and Melbourne have seen rental markets weaken; higher rental supply due to a recent history of investor exuberance, weaker demand from negative interstate migration and, more recently, a demand shock from closed international borders where Melbourne and Sydney were the primary recipients of migrant arrivals,” Mr Lawless said.

However, the weak conditions across Sydney and Melbourne unit markets look to be turning. Sydney’s rental index for units has recorded two successive months of mild rises, while Melbourne unit rents edged higher in February after falling for nine of the previous ten months. The improvement in unit rents across Australia’s two largest cities is likely to be at least partially seasonal as demand from domestic students generally rises early in the year, but could also be attributable to more people returning to work in the inner cities as well as workers in some of the hardest hit industries such as hospitality, food and accommodation services returning to employment.

Until international borders re-open and migration rates return to their pre-COVID levels, a more substantial improvement in inner city apartment rents is unlikely.

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Weaker rental conditions in Sydney and Melbourne relative to rising home values is evident in the gross rental yields, with yields across both cities falling to fresh record lows in February. Gross rental yields in Sydney were recorded at 2.9% at the end of February, while in Melbourne yields averaged 3.0%. Every other capital city is recording gross rental yields around the mid-4% mark or higher, implying positive cash flow opportunities are more likely in these markets.

Australian home values surged 2.1% higher in February; the largest month-on-month change in CoreLogic’s national home value index since August 2003. Spurred on by a combination of record low mortgage rates, improving economic conditions, government incentives and low advertised supply levels, Australia’s housing market is in the midst of a broad-based boom.

Housing values are rising across each of the capital city and rest of state regions, demonstrating the diverse nature of this housing upswing.

According to CoreLogic’s research director, Tim Lawless, a synchronised growth phase like this hasn’t been seen in Australia for more than a decade. “The last time we saw a sustained period where every capital city and rest of state region was rising in value was mid-2009 through to early 2010, as post-GFC stimulus fueled buyer demand.”

Sydney and Melbourne were among the strongest performing markets, recording a 2.5% and 2.1% lift in home values over the month respectively, as Australia’s two largest cities caught up from weaker performance through 2020. The quarterly trend however, is still favouring the smaller cities; Darwin housing values rose 5.5% over the past three months, Hobart values rose 4.8% and Perth was up 4.2%.

“Whether this new found growth in Sydney and Melbourne can be sustained is unclear. Both cities are still recording values below their earlier peaks, however at this current rate of appreciation it won’t be long before Australia’s two most expensive capital city markets are moving through new record highs. With household incomes expected to remain subdued and stimulus winding down, it is likely affordability will once again become a challenge in these cities,” Mr Lawless said.

A housing market trend that has persisted through the COVID period to-date is the weaker performance of unit markets relative to detached housing. Across CoreLogic’s combined capitals index, house values (+4.4% over the past three months) have recorded a growth rate more than three times higher than that of its unit counterparts (+1.4%). There are some tentative signs this trend could become less obvious, with Sydney unit values recording their first month of growth since April last year and Melbourne unit values recording their largest gain since late 2019.
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The disparity in rental markets across Australia has been extreme

Unit rents down -8% in Melbourne but soar 10% in Perth and Darwin

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Australia's 30+ day mortgage arrears will rise in the second quarter of the 2021 after only a small rise in the last quarter of 2020 as expected, Fitch Ratings says in a report.

Fitch expects losses to stay low due to the recovery in home prices.

The 30+ day arrears in 4Q20 rose by 2bp to 1.01% from the previous quarter, as borrowers struggling with the economic fallout from the coronavirus pandemic continued to take up payment deferrals offered by Australian lenders. 

The agency reported it does not expect the Dinkum RMBS index to "increase significantly" until the payment deferral periods ends on 31 March 2021.

The banking regulator has advised that deferrals do not need to be treated as arrears. 

Dinkum transactions had 1.7% of borrowers under payment deferrals at end-4Q20, 310bp lower than the previous quarter. 

Conditional prepayment rates for transactions issued by non-bank lenders have recently increased to 23%, significantly above those issued by banks, likely due to borrowers refinancing to take advantage of low fixed-interest rates offered by some banks.

Fitch expects prices to continue rising, supported by record low mortgage rates, along with a lower supply of housing stock and government incentives for housing, particularly for first-home buyers.

Losses in RMBS transactions from the sale of collateral property were the lowest in the last decade, with lenders' mortgage insurance payments and excess spread being sufficient to cover principal shortfalls in all transactions during the quarter. 

Fitch's Dinkum RMBS Index tracks arrears and performance of mortgages underlying public Australian prime RMBS.
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The growth in arrears isn't due until the second quarter of the 2020-2021 financial year

Arrears will stay low in mid-2021 given home price rises: Fitch

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Queensland’s top auction sale at weekend auctions was $3.7 million for an apartment on the Gold Coast. The Liberty Pacific sub-penthouse was sold by an upgrader in the 1999 Mirvac built complex.

It sold through Jackson Paradise from Ray White Prestige. He had eight registered bidders for the four-bedroom Main Beach sub penthouse at 1181/1 Lennie Street.

The Lennie Avenue apartment sold to a couple from Sydney who flew up to see their desired holiday home property last Friday. “We are seeing a huge amount of interest in the Gold Coast prestige market, both from holiday home buyers and relocators,” Paradise said. It last sold at $2.3 million in 2014. It first sold at 1.35 million in 1999.

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CoreLogic calculated 53 percent of Queensland's apartment offerings were sold on the weekend, compared with 83 percent of its house offerings. The top weekend auction result was a Point Piper penthouse that sold on Friday evening, just hours prior to its scheduled Saturday auction at $16 million plus. The whole-floor apartment in the tightly held Wentworth Place block comes with three bedrooms and three-bathrooms. It has views to the Bridge and Opera House.

The Wentworth Street penthouse has 300sq m of internal space plus 300sq m rooftop terracing. It traded 28 years ago at $3,325,000 and at $3.85 million in 1989. CoreLogic data showed that 86 percent of Sydney apartment listings found buyers at weekend auction, just lower than the 90 percent success rate for houses.

The national weekend unit clearance rate was 73 percent, compared to 84 percent for houses. There were 2,451 homes taken to auction across the combined capital cities last week, up from 2,128 over the previous week, although lower than this time last year when 3,026 auctions were held.

Of the 2,053 results collected so far, 81.9 per cent reported a successful result, down from last week’s preliminary auction clearance rate of 84.4 per cent, which revised down to 79.6 per cent at final figures. Over the same week last year, 73.9 per cent of reported auctions were successful across the combined capital cities.

The final auction clearance rate has held above 75 per cent since auction reporting re-commenced in late January after the seasonal slowdown and this week will likely be no exception despite higher volumes. In Melbourne, 1,273 homes were taken to auction, compared to 1,095 over the previous week and 1,612 this time last year.

Of the 1,091 auction results collected so far, 77.7 per cent were reported as successful, down from the previous week’s preliminary clearance rate of 82.2 per cent, which revised down to 77.4 per cent at final figures. Sydney was host to 844 auctions this week, increasing from 768 over the previous week, although lower than this time last year when 1,087 homes were taken to auction across the city.

The preliminary clearance rate came in at 88.9 per cent this week, up slightly from the previous week’s preliminary clearance rate of 88.2 per cent, which revised down to 83.4 per cent at final figures.

This time last year, 76.6 per cent of reported auctions were successful. "It is likely that Sydney’s final clearance rate will come in around the low to mid 80 per cent range for the 4th consecutive week," CoreLogic's Tim Lawless said. Across the smaller cities, Canberra recorded the highest preliminary clearance rate at 84.7 per cent, followed by Adelaide (82.5 per cent) and Brisbane (79.0 per cent).
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It was the last auction weekend of summer

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