Two years after completing one of the newest developments in North Sydney, developer <a href="https://www.apartments.com.au/developers/aqualand-australia">Aqualand</a> is turning its attention to the rapidly evolving St Leonards apartment market.

The developer, which completed AURA by Aqualand on North Sydney's Walker Street, has lodged plans for a 5,918 sqm site at <a href="https://www.apartments.com.au/new-apartments/33-37-herbert-street-st-leonards-nsw-2065">33-37 Herbert Street, St Leonards,</a> seeking approval for a pair of residential towers rising above a shared podium opposite Royal North Shore Hospital.

The proposal forms part of the broader transformation underway across the St Leonards-Crows Nest precinct, where former industrial and commercial sites are increasingly being redeveloped into high-density mixed-use projects tied to major transport infrastructure.

<img alt="Aqualand" data-entity-type="file" data-entity-uuid="2cc428cf-fe70-4cac-9cd5-264ad53af62c" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%209.51.56%E2%80%AFAM.png?VersionId=otKSnHtbjAvAddOnovyXQMgcAwE6DMe1" />

According to the planning documents, the site sits “within the St Leonards–Crows Nest Strategic Centre, identified by the NSW Government as a key area for accommodating future jobs and housing across Sydney.”

The proposal has been designed by fjcstudio, formerly FJMT Studio, and is being progressed through the State Significant Development pathway due to its scale and affordable housing provision.

The scheme would comprise 413 apartments, including 46 affordable housing units, alongside retail and commercial uses fronting Herbert Street. The project would also include communal open space, landscaping, a swimming pool, gymnasium, children’s play areas and podium-level resident amenities.

Planning documents show the development would consist of a part-13, part-39 storey tower form positioned above a four-storey podium.

“The development comprises a unified podium that activates the street interface, and two setback towers to accommodate new housing supply while maintaining an appropriate human scale at ground level,” fjcstudio noted in its Design Report.

The northern and southern towers have been shaped to respond to the surrounding skyline while also limiting overshadowing impacts to nearby public open space, particularly Talus Reserve.

The design report said the differing tower heights were intended to “contribute to a varied skyline while responding to the surrounding built form context and solar access considerations.”

<img alt="Aqualand" data-entity-type="file" data-entity-uuid="36da62dc-ff9e-41f2-a7e3-7be38373751c" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%209.51.45%E2%80%AFAM_0.png?VersionId=Mo6Rp2r.XRLTzIfg_PEEpw8NepDH8UBs" />

The site sits directly opposite Royal North Shore Hospital and within walking distance of both St Leonards Station and the new Crows Nest Metro station.

While the site itself sits just outside the formal Crows Nest Transport Oriented Development boundary, the planning documents repeatedly reference its alignment with the broader TOD objectives reshaping the Lower North Shore.

“The site is located adjacent to St Leonards Station and in close proximity to Crows Nest Metro which is within the Crows Nest Transit Orientated Development Accelerated Precinct which has been identified by the NSW Government to support housing delivery,” the Design Verification Statement noted.

According to fjcstudio, the project has been designed to respond to the broader transition occurring across St Leonards, where increasing residential density is being concentrated around transport infrastructure and employment hubs.

“The broader precinct is undergoing significant change, with a mix of existing mid-rise buildings and newer high-density developments,” the report stated.

“Recent and approved projects indicate a consistent shift toward taller built form, typically organised as tower-and-podium typologies with more active ground levels.”

The proposal includes close to 6,000 sqm of retail and commercial space across the ground floor and podium levels, designed to create a more activated street edge along Herbert Street.

Aqualand’s plans would also introduce a landscaped podium shared between the two towers, with communal open space in the form of a podium rooftop designed to support resident interaction and improve urban greening outcomes. The scheme would also introduce pocket parks at the northern and southern ends of the site, including a landscaped area at the corner of Herbert and Ella streets designed to improve pedestrian amenity and soften the streetscape.

&nbsp;

The proposal is being progressed through the NSW Government’s Housing Delivery Authority pathway, which was introduced to accelerate housing supply across the state. The application was declared State Significant Development in April 2025 following an expression of interest process.

<img alt="Aqualand" data-entity-type="file" data-entity-uuid="faf6d97d-2671-454f-b85a-fe1c6a7be608" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%209.51.49%E2%80%AFAM.png?VersionId=diVd28OBVr5.YV.7prrOz.uAanwwwm7a" />

St Leonards has been particularly active with new developments in recent weeks. Developer SP Setia’s <a href="https://www.apartments.com.au/news/nsw/first-look-sp-setia-targets-st-leonards-skyline-with-40-storey-tod-tower">plans for a new 42-storey tower</a> recently went on exhibition through the same pathway, while <a href="https://www.apartments.com.au/news/nsw/first-look-stockland-plans-52-storey-538-apartment-st-leonards-tower">Stockland’s 52-storey tower proposal</a> was also recently unveiled.

Aside from the St Leonards project, which is expected to take around nine months to move through the approvals process ahead of a potential 2027 launch, Aqualand is also preparing to launch Boronia, a new apartment project in Roseville comprising around 111 apartments on Larkin Street.

The developer also has approvals in place for the next stage of the Barangaroo precinct, which will feature new residential, retail, hospitality and community uses, alongside a new metro entry across the five-hectare site.

More than 50 new retail destinations are planned for Central Barangaroo, alongside a 270-metre-long boulevard connecting Hickson Park to Nawi Cove. Together with Harbour Park, more than 50 per cent of the precinct will comprise public open space and parkland.

Joel Robinson

First look: Aqualand joins St Leonards apartment party

<section data-scroll-anchor="false" data-testid="conversation-turn-5" data-turn="user" data-turn-id="e65dbe94-e3b6-47f7-b62a-9cbb30c9bf79" data-turn-id-container="e65dbe94-e3b6-47f7-b62a-9cbb30c9bf79" dir="auto">Time &amp; Place’s plans to transform the former David Jones factory building in Surry Hills into a mixed-use residential precinct have gone on exhibition through the NSW Government’s In-fill Affordable Housing pathway.</section>

<section data-scroll-anchor="false" data-testid="conversation-turn-6" data-turn="assistant" data-turn-id="request-WEB:f4d533b7-64a5-413d-86fd-5c99649c2b73-2" data-turn-id-container="request-WEB:f4d533b7-64a5-413d-86fd-5c99649c2b73-2" dir="auto">
The Marlborough House proposal, lodged for the <a href="https://www.apartments.com.au/new-apartments/marlborough-house-47-97-marlborough-street-surry-hills-nsw-2010">47-97 Marlborough Street</a> site, would see the adaptive reuse of the heritage-listed warehouse building alongside the construction of new residential additions and a separate apartment building on the northern portion of the site.

The proposal seeks approval for 172 apartments across three buildings, including 15 per cent affordable housing managed by a community housing provider for at least 15 years from occupation.

<img alt="Marlborough" data-entity-type="file" data-entity-uuid="5d1d3c2a-bf13-47d6-a335-7c01102cdee1" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%209.29.36%E2%80%AFAM.png?VersionId=cjMYrbR.BLUlWH4dar0RVDDo0bG.u2YT" />

Interior view from the Northern Building Penthouse overlooking the park

&nbsp;

The redevelopment is planned for the prominent 3,413 sqm site bounded by Marlborough Street, Goodlet Street and Lansdowne Street, directly opposite Eddie Ward Park and around 200 metres from the Surry Hills light rail stop.

Time &amp; Place acquired the former David Jones building in 2024, marking the first time the property had changed hands in around 50 years.

Designed by Wardle, the proposal centres around the adaptive reuse of the former David Jones factory, originally constructed between 1913 and 1935 in the Inter-War Chicagoesque architectural style.

Wardle noted in its Architectural Design Report that the building “occupies a significant place in the industrial and cultural history of Surry Hills” and at its peak was “the largest department store manufacturing facility in Australia, employing over 800 people and fuelling the growth of Sydney’s fashion and retail industries.”

The practice said the project positions itself “not as an isolated intervention, but as a contributor to the civic, social, and architectural grain of the precinct.”

The proposal would deliver 75 apartments within the retained southern heritage building, 59 apartments within the central addition, and a further 38 apartments within the new northern building fronting Lansdowne Street.

Planning documents show the scheme would comprise a mix of heritage apartments, new-build apartments, townhouses and penthouses.

<img alt="Marlborough" data-entity-type="file" data-entity-uuid="57758518-40a3-4b83-958c-d06e96a2cffa" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%209.29.42%E2%80%AFAM.png?VersionId=VerlX9ST5xgBi8.1_YRsqdWTJeT6ygjs" />Interior View of the Heritage Building Apartment

The development would also include a ground-floor retail tenancy on the corner of Marlborough and Lansdowne streets, rooftop communal open space, a landscaped pedestrian link along the western edge of the site, and basement parking accessed from Lansdowne Street via a car stacker system.

&nbsp;

The scheme emerged from a competitive design process run by Urbis, with Wardle ultimately selected as the winning architect ahead of FJC Studio, TZG, Architectus and Wilkinson Eyre.

The Design Integrity Panel later described several aspects of the Wardle scheme as fundamental to the project, including “the stepped character of the new addition to the north of the site”, the landscaped western pedestrian link, and the “garden arrival” experience separating the original Marlborough House from the heritage addition.

Wardle’s design heavily references the site’s industrial and heritage history, while also responding to the surrounding Surry Hills streetscape.

The Architectural Design Report describes Surry Hills as “a finely grained neighbourhood with beautiful and expressive brickworks throughout the suburb,” with the proposal introducing a material palette intended to sit comfortably alongside the existing warehouse fabric and neighbouring terraces.

The report also outlines the project’s relationship with Eddie Ward Park and the broader landscape context of the area.

“Marlborough House occupies a site of deep cultural memory and the neighbouring Eddie Ward Park is of local ecological significance, where natural systems, topography, and stories have long shaped human experience,” Wardle noted in the report.

The architects said the proposal sought to “rebind built form to Country” through landscape, materiality and the adaptive reuse of the heritage structure.

<img alt="Marlborough House" data-entity-type="file" data-entity-uuid="9ae3f2f9-c85f-477a-a6f8-b43f6cb97c41" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%209.29.53%E2%80%AFAM.png?VersionId=B.qUCLqRvJOR.n9CvYcTpaknIX9LuqKZ" />

The project is also being progressed under the NSW Government’s in-fill affordable housing provisions, allowing developments that include affordable housing to access additional height and floor space incentives.

Under the plans, 2,593 sqm of the project’s floor space would be dedicated to affordable housing, slightly exceeding the required 15 per cent threshold.

In its Design Excellence Strategy, Urbis said the project aimed to “sensitively adapt and enhance the heritage-listed building on site through alterations and additions that preserve its historical significance” while delivering “high-quality market and infill affordable housing development in Surry Hills.”

Time &amp; Place has been one of the most active developers nationally in the last 12 to 24 months. Late last year they completed&nbsp;The Queensbridge in&nbsp;<a href="https://www.apartments.com.au/developments/southbank-vic-3006">Southbank</a>, a mixed-use tower with 353 apartments and a hotel. They are currently selling Park Modern, 246 apartments near the famous Botanic Gardens in&nbsp;<a href="https://www.apartments.com.au/developments/south-melbourne-vic-3205">South Melbourne</a>, and have future projects, <a href="https://www.apartments.com.au/new-apartments/the-wilmot-173-burke-road-28-hope-street-glen-iris-vic-3146">The Wilmot</a>&nbsp;in&nbsp;<a href="https://www.apartments.com.au/new-apartments/glen-iris-vic-3146">Glen Iris</a>, the redevelopment of the Northcote Plaza, and another tower in South Melbourne.

The developer broke into Sydney just a few years ago with Two Tides in Manly. They have another project nearby, which is at the ultra-luxury end of the market on&nbsp;<a href="https://www.apartments.com.au/buildings/shoreline-manly-beach-89-90-north-steyne-manly">North Steyne</a>, fronting the beach.

It is also continuing to work through the <a href="https://www.apartments.com.au/news/nsw/first-look-time-place-settles-on-design-for-the-chimes-potts-point-redevelopment">redevelopment of The Chimes building</a> on Macleay Street in&nbsp;<a href="https://www.apartments.com.au/developments/potts-point-nsw-2011">Potts Point</a>, as well as a project on <a href="https://www.apartments.com.au/news/nsw/time-place-to-take-on-mosman-apartment-market">Mosman's Redan Street</a>.
</section>

First look: Time & Place unveils Marlborough House redevelopment designs for former David Jones warehouse in Surry Hills

The residential transformation of St Kilda Road is set to continue into with more new apartment plans for the sought-after boulevard.

Wing Tai Asia has lodged plans for a major residential tower at 464-466 St Kilda Road, replacing the former VACC House with an 18-storey mixed-use development designed around a retained heritage podium and a sculpted contemporary tower.

The proposal, prepared under Victoria’s Significant Residential Development with Affordable Housing pathway, would deliver 325 apartments and ground-floor retail across the prominent 4,653 sqm boulevard site in Melbourne’s St Kilda Road North Precinct.

The project centres on the adaptive reuse of the site’s heritage-listed VACC Building, an eight-storey office designed by Bernard Evans that has occupied the address for decades. Planning documents state the development would involve “carefully dismantling and conserving off-site the original metal fabric of the podium visible from St Kilda Road,” before reinstating it as the defining frontage of the new scheme.

Above the restored podium, Wing Tai is proposing a curvilinear residential tower. The scheme includes 172 one-bedroom apartments, 63 two-bedroom apartments, 66 three-bedroom apartments, and 24 four-bedroom apartments, alongside two ground-floor food and beverage tenancies fronting St Kilda Road.

The tower has been designed with substantial articulation and variable setbacks to minimise perceived bulk and maintain view corridors along the boulevard. Urbis, which prepared the planning report, said the design “has been significantly articulated through a curvilinear design” with “an interplay with materials, façade expression and depth” to create visual separation and visual interest.

The proposal also includes 254 basement car spaces, landscaped pedestrian links connecting St Kilda Road and Queens Lane, and a biophilic landscape strategy featuring canopy trees, raised planters, cascading greenery and a glass oculus pool overlooking the eastern frontage.

Planning documents confirm the $270.1 million development will contribute 3 per cent of project costs to the Social Housing Growth Fund as part of the application process.

Wing Tai acquired the St Kilda Road property in 2018 alongside Abacus Property Group for $95.38 million, before later consolidating ownership of the site. The property previously served as the Victorian Automobile Chamber of Commerce headquarters for around 60 years.

The transformation of the St Kilda Rd boulevard is already beginning to materialise, with a number of high-profile projects recently completed, launched, or approaching launch as developers continue to back the long-term appeal of the precinct.

Among the most notable recent completions is Louise by Samuel Property Group, just off the strip on Queens Lane, the same pocket Hirsch &amp; Faigen recently launched The Queensbury. Mirvac is too on the same street with The Albertine, which is approaching completion.

Dexus recently secured approval for its slice of St Kilda Road, while Gurner also has approved plans for the precinct.

Wing Tai unveils 325-apartment St Kilda Road tower on former VACC House site

Malaysian developer <a href="https://www.apartments.com.au/developers/s-p-setia">SP Setia</a> is the latest to jump into St Leonards booming Transport Oriented Development precinct.

The developer, which has previously delivered Sapphire by the Gardens apartment development in Melbourne, identified the Atchison Street site in 2023. It filed a Scoping Report around 12 months ago, and now has revealed the designs for the new&nbsp;40-storey mixed-use tower.

The State Significant Development Application covers <a href="https://next-portal.urban.com.au/projects/14650/summary">20-22 Atchison Street</a>, a 1,374 sqm site positioned between St Leonards Station and the new Crows Nest Metro station.

Designed by <a href="https://www.apartments.com.au/architects/cox-architecture">COX Architecture</a>, the project would deliver 181 apartments, above a four-storey commercial podium, five basement levels, and new public domain works along Mitchell Street. The apartment mix comprises 35 one-bedroom apartments, 39 one-bedroom-plus-study apartments, 85 two-bedroom apartments, and 22 three-bedroom residences.

The proposal has been lodged as a shop-top housing development under the NSW Government’s TOD planning pathway, which allows increased density around key transport infrastructure. The site sits within the recently rezoned Crows Nest Accelerated TOD Precinct.

<img alt="First look: SP Setia targets St Leonards skyline with 40-storey TOD tower" data-entity-type="file" data-entity-uuid="b799673d-48e2-46b0-801a-0e33a9330100" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/atchinson%20site.png?VersionId=dPh0UfwfaHpbFL1R7H1cbZNbIW0CHbCC" />

SP Setia acquired the Atchison Street site as part of its continued expansion into the Australian apartment market. In comments made to City &amp; Country (The Edge Malaysia) in 2023, SP Setia President and CEO Datuk Choong Kai Wai described the acquisition as “a strategic move” aligned with the group’s post-pandemic market recovery strategy.

“Our target for this exceptional development is local and overseas buyers, including first-home buyers, downsizers and investors,” Choong said.

The tower has been designed as a slender vertical form rising from a mixed-use podium, with COX Architecture positioning the development as a response to the evolving St Leonards and Crows Nest skyline.

“The purpose of the project is to facilitate the delivery of high-quality housing at a strategically located site and deliver a built tower outcome that is consistent with the desired future character of St Leonards and aligns with the TOD controls,” the design report stated.

<img alt="First look: SP Setia targets St Leonards skyline with 40-storey TOD tower" data-entity-type="file" data-entity-uuid="b1a85eee-76f7-436c-a6da-73ba827b9b13" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/atchinson%20entry.png?VersionId=dA9jHGPMcm.dDbwk4QfxqWiY5bfh3UVt" />

The podium would incorporate retail uses fronting Atchison Street, commercial tenancies, landscaped communal areas, and pedestrian improvements along Mitchell Street. Vehicle access and loading would be consolidated via Atchison Lane.

Residents would have access to more than 665 sqm of communal indoor and outdoor spaces, while the development proposes 96 parking spaces across five basement levels.

The proposal also includes a commitment for 10 per cent of residential floor space to be allocated toward affordable housing through a monetary contribution.

COX said the tower form responds directly to the emerging high-density character of the precinct while seeking to maximise solar access, cross ventilation, and outlook from apartments.

<img alt="First look: SP Setia targets St Leonards skyline with 40-storey TOD tower" data-entity-type="file" data-entity-uuid="2163f85c-f63b-4be3-aafa-f8763976cec5" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Article%20Feature%20Image%20%28Grid%29_5.png?VersionId=WiAmtIKJ6.ZQ41EtYEQ1fol7AeorKBlL" />

“The building is orientated towards north,” the Apartment Design Guide compliance report noted, adding that the tower’s slim form was driven by the constrained inner-urban site dimensions.

The design also incorporates landscaped setbacks and communal open space at podium level, intended to soften the interface with surrounding streets and improve pedestrian amenity.

The project adds to a growing wave of redevelopment proposals reshaping St Leonards and Crows Nest following the opening of the Sydney Metro City line and the NSW Government’s push for higher-density housing around major transport nodes.

Last week Stockland filed plans just down the road. They want to build a <a href="https://www.apartments.com.au/new-apartments/601-pacific-highway-st-leonards-nsw-2065">52-storey tower on Pacific Highway</a>.

Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/first-look-stockland-plans-52-storey-538-apartment-st-leonards-tower">First look: Stockland plans 52-storey, 538-apartment St Leonards tower&nbsp;</a>

First look: SP Setia targets St Leonards skyline with 40-storey TOD tower

<a href="https://www.apartments.com.au/developers/urban-property-group">Urban Property Group</a> has revealed plans for a new mixed-use tower at 10 Dangar Street, Wickham, advancing a proposal that would reshape the southern gateway to Newcastle’s city centre with one of the city’s tallest residential buildings.

The State Significant Development proposal, now on exhibition, seeks approval for a <a href="https://www.apartments.com.au/new-apartments/bowline-10-dangar-street-wickham-nsw-2293">43-storey tower</a> immediately adjacent to the Newcastle Interchange. The project would deliver around 200 apartments, including 42 affordable housing dwellings, alongside 99 co-living units, a 171-room hotel, retail space, and new public domain integrated through the site.

The scheme marks a significant escalation of plans previously approved for the site. Urban Property Group took over the prominent 2,904 sqm parcel, where excavation and demolition had already commenced under an earlier consent for a 14-storey mixed-use development.

<img alt="First look: Urban Property Group unveils Newcastle’s next supertower at Wickham interchange" data-entity-type="file" data-entity-uuid="58a96dd9-407f-4d20-86b4-94e4bfeef74b" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/wickham%20podium.png?VersionId=LGlf08pdFGAZDzvx_CXC4XakHNZRuEE0" />

Designed by <a href="https://www.apartments.com.au/architects/sjb-architects">SJB</a>, the tower has been conceived as a landmark transit-oriented development anchored to the Newcastle Interchange precinct. The proposal includes 245 build-to-sell apartments across a mix of one, two, and three-bedroom residences, as well as two penthouses. Fifteen apartments and one operational unit are earmarked for NDIS housing. The co-living component would add a further 99 units, while the podium would accommodate retail uses and hotel facilities.

SJB said the site presents “a valuable opportunity to anchor the precinct by setting the standard for design, active ground planes and character at the key southern gateway.”

The architecture responds directly to the site’s position beside major transport infrastructure and within one of Newcastle’s fastest-evolving urban renewal precincts. The tower form sits above a sculpted podium designed to frame new public spaces, including a through-site pedestrian link connecting Station Street to Hannell Street, landscaped plazas, and activated retail edges.

<img alt="First look: Urban Property Group unveils Newcastle’s next supertower at Wickham interchange" data-entity-type="file" data-entity-uuid="a7bd6ff0-f7db-4ce8-a6dc-ea56e72c6149" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/wickham%20lanne.png?VersionId=xzf39VADyhj7zBQY2I9fx9vI62u2tuSb" />

The design report describes the project as part of the broader transition of Wickham into “a vibrant, high-quality mixed-use urban precinct” that leverages proximity to the station, open space, and regional connectivity.

A detailed public art strategy has also been prepared for the development. The strategy positions the project as “a transit-oriented development of state significance at the gateway to Newcastle’s city centre” and outlines a series of integrated artworks responding to Newcastle’s industrial and transport heritage.

Creative Road’s curatorial framework for the project, titled Unveil, draws on “stratified surfaces, carved volumes, and light-filled apertures” while referencing Newcastle’s transformation from an industrial city into a contemporary education and technology hub.

<img alt="First look: Urban Property Group unveils Newcastle’s next supertower at Wickham interchange" data-entity-type="file" data-entity-uuid="77a882bb-14b1-4d28-99ff-9438e39508c0" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/wickham%20site.png?VersionId=cevgo_vN0eKPK78P8YcEu3mKPLkpFqE7" />

The proposal is being advanced through the NSW Housing Delivery Authority pathway after being declared State Significant Development in June 2025. The accompanying scoping report states the development aims to “maximise the site’s proximity to the Newcastle Interchange by delivering transit-oriented development” while increasing housing supply and affordable housing provision within the Newcastle LGA.

Urban Property Group’s plans align with the long-term strategic vision established under the Wickham Master Plan, which identified the interchange precinct as suitable for substantial uplift in height and density. The current proposal would significantly intensify that vision, positioning the tower among the tallest developments proposed for Newcastle.

The site sits immediately north of the Newcastle Interchange, bounded by Dangar Street, Hannell Street, and Charles Street. It is surrounded by a rapidly growing cluster of residential towers and mixed-use projects that have emerged following the completion of the light rail and transport interchange.

First look: Urban Property Group unveils Newcastle’s latest tower at Wickham interchange

APRA

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Over the course of 2016, APRA expects to release several policy consultation packages. These will, for the most part, primarily affect authorised deposit-taking institutions (ADIs) and the superannuation industry.
The consultations will reflect both domestic policy initiatives - largely driven by the Government’s response to the Financial System Inquiry (FSI) – and, for ADIs, the implementation of internationally-agreed reforms. Insurers will chiefly be impacted by a limited number of cross-industry policy proposals, as well as a review of the role of actuaries.
APRA will also begin engagement with private health insurers during 2016 on the future direction of the prudential framework for their industry. Responsibility for prudential regulation of the private health insurance industry passed to APRA on 1 July 2015 and, consistent with APRA’s undertakings during the transition, no substantive changes will be made to the prudential framework for private health insurers prior to 1 July 2016.
In conducting policy consultations, APRA follows an open and transparent process where public and industry feedback is actively encouraged, and final policy positions are formed after giving due consideration to feedback received.
<h3>International developments</h3>
The Basel Committee on Banking Supervision (Basel Committee) – the global standard-setter for banking - is committed to finalise in 2016 its remaining post-global financial crisis (GFC) reforms. This includes new standardised approaches to credit risk and operational risk; reducing risk-weight variability when ADIs use internal models for capital adequacy purposes; new capital floors; and the leverage ratio. This follows from the recently-finalised review of capital requirements for trading book exposures.
APRA intends to take a measured approach towards implementing these changes, with suitable adjustments for the Australian context. Whilst these reforms have the potential to affect all ADIs, it is likely the impact will be more noticeable for the largest ADIs. However, given the international work is unlikely to conclude before end 2016, and with many implementation dates yet to be agreed, APRA’s domestic consultation is unlikely to begin before 2017, with local implementation of these reforms following over a number of years.
Derivative markets have also been an area of intense international reform in the post-GFC period. APRA has begun the implementation process in Australia with the recent release of a cross-industry consultation package on margining and risk mitigation standards for non-centrally cleared derivatives; a separate (but related) consultation on ADI capital requirements for counterparty credit risk will follow in the near future. These reforms generally only affect the larger APRA-regulated entities in each impacted industry.
<h3>Domestic developments</h3>
The final report of the FSI includes a number of recommendations that are directly relevant to APRA’s prudential framework. The Government’s response to the FSI, Improving Australia’s Financial System, endorsed APRA to implement a number of these recommendations. APRA’s plans in this regard are set out below.
FSI Recommendation 1: Capital Levels – the FSI highlighted that the stability of the banking sector is of paramount importance to Australia’s economic well-being. With that in mind, the FSI recommended that ADIs have capital ratios that are ‘unquestionably strong’. In settling a final prudential framework to deliver on this recommendation, APRA needs to have regard to the ongoing work of international standard-setters such as the Basel Committee, as well as give thought to how other measure of resilience (for example, with respect to liquidity and funding) can assist in achieving the FSI’s objective. With this in mind, APRA will shortly begin consultation on the implementation of the Net Stable Funding Ratio, which is designed to improve the stability of bank funding profiles.
FSI Recommendation 2: Narrow mortgage risk weight differences – in July 2015, APRA announced an interim measure to increase the average residential mortgage risk weights for ADIs using the Internal Ratings-based (IRB) approach to capital adequacy, from approximately 16 percent to at least 25 percent. This change takes effect from 1 July 2016. Whilst this step materially addresses the FSI recommendation in the short term, APRA will need to consider whether further changes are necessary after the Basel Committee’s broad review of the capital framework is complete later this year.
FSI Recommendation 3: Loss absorbing and recapitalisation capacity – consistent with the FSI’s recommendation of not moving ahead of international developments, this is an issue that APRA intends to address over the medium term. In the meantime, APRA is monitoring initiatives being taken by overseas regulators in this area, and has begun limited engagement with industry participants on this issue.
FSI Recommendation 4: Transparent reporting – larger ADIs have begun disclosing ‘internationally comparable’ capital ratios, informed by the methodology developed by APRA for its International capital comparison study (July 2015). Although not strictly aligned with the FSI’s recommendation for reporting capital ratios that are ‘transparent against the minimum Basel capital framework’, APRA’s study and the larger ADIs’ reporting have addressed this issue to a large degree. APRA will continue to monitor international comparisons during the course of the year, and then consider whether further work is needed on this recommendation.
FSI Recommendation 7: Leverage ratio – the Basel Committee is finalising its proposals for the introduction of a leverage ratio as part of its reforms to the Basel capital framework. Leverage ratio disclosure requirements for the largest ADIs have been implemented, but at this stage APRA is likely to follow the international timeframe for the introduction of a minimum leverage ratio requirement (currently scheduled for 2018).
Also of importance to ADIs are revisions to the prudential framework for securitisation. The consultation period on these proposals closed earlier this month, and APRA intends to finalise these revisions in 2016.
In the superannuation industry, APRA will participate where relevant in further Government policy consultation on post-retirement outcomes and governance of superannuation trustees (FSI Recommendations 11 and 13), and initiatives related to the objectives and efficiency of the superannuation system (FSI Recommendations 9 and 10). APRA is also be closely involved in the Government’s consultation on measures to improve the transparency of the superannuation industry, including reforms to the product dashboard requirements for MySuper products and choice investment options.
In general insurance and life insurance, APRA is progressing its review of the role of the Appointed Actuary, and anticipates commencing a public consultation in mid-2016. Across all industry sectors, APRA will continue to refine and clarify its governance requirements, particularly in relation to the important role played by Boards in APRA-regulated entities. APRA will also announce the next steps on our approach to the supervision of conglomerate groups in the near future.
More generally, APRA’s mandate is to balance the objectives of financial safety and efficiency, competition, contestability and competitive neutrality; and to promote financial stability. The FSI noted that regulators should, while remaining consistent with their mandate, increase their focus on competition in the financial system (Recommendation 30).
APRA will be looking to provide more information on how it balances financial safety with these other objectives, and more actively seek industry input on these issues so that policy choices are best able to balance these considerations without undermining prudential outcomes.
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po-LsXgBTHBmX

Property 101: APRA's prudential policy outlook

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The Australian Prudential Regulation Authority's supervision of lending standards for housing will continue in 2016, APRA chairman Wayne Byres said in his opening statement to the House of Representatives Standing Committee on Economics in Canberra.
He said lending for housing continues to grow at a solid 7 pe cent per annum, but owner-occupiers now have a greater proportion of new loans than investors, according to the media release.
"Importantly from our perspective, serviceability assessment standards have improved across the industry, although we still have further work to do to ensure improved lending policies are fully implemented, monitored and enforced," he said.
The APRA had introduced a cap of 10 percent on allowable growth in bank lending on residential investment loans last year, forcing big banks to hit the brakes on loans to property investors. 
The RBA December board minutes had also noted the growth in lending to investors in the housing market appeared to have eased, with a moderation in the pace of growth in housing prices in Sydney and Melbourne over recent months.
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jonathanchancellor-7SQnKwU6yx

APRA to closely monitor home lending in 2016, says chairman Wayne Byres before House  

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Over the past few years, APRA has intensified its scrutiny of the mortgage lending practices and risk profiles of Australian authorised deposit-taking institutions (ADIs).
These actions reflect the importance of housing lending within Australia’s banking system.
Steps taken by APRA have included:
<ul>
<li>in 2011, and again in 2014, seeking assurances from the Boards of the larger ADIs that they were actively monitoring their housing lending portfolios and credit standards;</li>
<li>in 2013, commencing a more detailed collection from the larger ADIs on a range of housing loan risk metrics;</li>
<li>in 2014, stress-testing the 13 largest ADIs against a significant housing market downturn; and</li>
<li>also in 2014, issuing a prudential practice guide on sound risk management practices for residential mortgage lending.</li>
</ul>
Finally, against a backdrop of continued heightened risk due to high house prices, high household debt, low interest rates and subdued income growth, in December 2014 APRA wrote to all ADIs outlining further steps it planned to take to reinforce sound residential mortgage lending practices. These steps — which included the establishment of benchmarks for ADIs on loan serviceability and investor lending portfolio growth — were developed following discussions with other members of the Council of Financial Regulators. 
Over the course of 2015 and into 2016, APRA has been closely monitoring ADI lending portfolios, including against these stated benchmarks.  
One key element of ADIs’ lending practices is the method by which they assess a customer’s ability to service a loan against a range of potential future circumstances. This assessment of loan serviceability is not merely a legal obligation for lenders; it is also an important, prudent risk management practice. 
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Property 101: APRA on residential mortgage underwriting standards

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The Australian Prudential Regulation Authority (APRA) released its December 2015 quarterly data on property exposures by Australian authorised deposit-taking institutions (ADIs).
The data is always interesting to analyse in order to get further insight into the current state of the mortgage market.
The first data point is residential term loans to households which have a total outstanding balance of $1.384 trillion which has increase by 8.9% over the past year. The total value of outstanding owner occupier loans is $884 billion having increased by 12.8% over the past year and accounting for 63.9% of all outstanding loans. The remaining 36.1% of outstanding loans are to investors, having increased by 2.6% year-on-year to $500 billion. 
Growth in outstanding loans has tilted away from investors to owner occupiers.  After year-on-year growth in investor loans peaked at 18.2% in March 2015 it has slowed to 2.6% growth while owner occupier credit troughed at an annual rate of 2.2% in March 2015, before rebounding to the current annual rate of 12.8% (the fastest annual growth rate since June 2010).
<a href="/images/2016/03/Chart-1-3-580x204.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2016/03/Chart-1-3-580x204.jpg" alt="">
In terms of the types of loans outstanding, 42.3% have an offset facility, 39.3% are interest-only, 0.2% are reverse mortgages, 2.0% are low documentation loans and 0.1% are other non-standard loans.  The year-on-year change across these loan types has been recorded at: +22.0% for loans with an offset facility, +11.6% for interest-only loans, +1.6% for reverse mortgages, -16.6% for low documentation loans and -5.7% for other non-standard loans.  Importantly, the value of outstanding residential loans for low-documentation loans is now at a record low.
<a href="/images/2016/03/Chart-2-3-580x207.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2016/03/Chart-2-3-580x207.jpg" alt="">
The data highlights that the average outstanding balance on a residential loan is $248,800, up by 1.0% over the quarter and by 4.4% year-on-year.  Reverse mortgages ($95,700), low-documentation loans ($192,800) and other non-standard loans ($195,900) all have much lower outstanding balances.  Meanwhile, loans with offset facilities ($303,700) and interest-only loans ($330,000) have significantly higher outstanding balances. 
The year-on-year changes to the outstanding loan balances have been recorded as follows: +7.2% for loans with an offset facility (fastest year-on-year growth since June 2011), +4.9% for interest-only loans, +2.8% for reverse mortgages (slowest year-on-year growth on record), -1.5% for low-documentation loans and -6.8% for other non-standard loans.  The data shows a slowing in the growth of outstanding loan values for reverse mortgages while riskier lending types (low-documentation and other non-standard) have seen an ongoing fall in outstanding loan amounts.
While the previous data looked at the total value of residential mortgages outstanding, the following data focuses on new residential mortgages over the final quarter of 2015.
Over the December 2015 quarter there was a record-high $98.130 billion worth of new residential mortgages approved, $69.091 billion worth were owner occupied with the remaining $29.040 billion being for investment purposes.  Year-on-year the value of new owner occupier loans is 28.8% higher, its greatest change on record, while investor mortgage lending is -24.9% lower, its largest fall on record.
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<img src="/images/2016/03/Chart-3-3-580x212.jpg" alt="">
Looking at the types of mortgages approved over the quarter: a record low 0.3% were low-documentation, 37.0% were interest only which was its lowest proportion since March 2013, 0.1% were other non-standard loans, 47.4% were originated by third parties and 3.7% were loans approved outside of serviceability.
Focussing on the year-on-year change; low documentation loan approvals are -41.8% lower (their largest year-on-year fall since March 2013), interest-only loan approvals are -11.0% lower (their largest year-on-year fall since March 2009), other non-standard loan approvals are up 28.2% (their largest year-on-year increase since December 2013), third party originated loans are up 6.2% and loans approved outside of serviceability are up 41.3%.  The data indicates there has been a significant pull-back in low-documentation loans and interest-only loans. 
At the same time, non-standard and loans approved outside of serviceability are rising significantly which may be a potential point of concern for APRA.  Although they make-up a small overall proportion of lending it will be something to keep a close watch on over the coming quarters especially since both have also recorded a quarterly increase.
<a href="/images/2016/03/Chart-4-3-580x207.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2016/03/Chart-4-3-580x207.jpg" alt="">
Finally the data breaks out new lending by loan-to-value-ratio (LVR) bands.  Over the quarter, 23.4% of all new loans had an LVR of less than 60%, 53.4% had an LVR of between 60% and 80%, 14.5% had an LVR of 80% to 90% and 8.7% had an LVR of more than 90% which was its lowest proportion on record. 
Looking at the year-on-year changes, the value of lending for LVRs of less than 60% was 16.1% higher, LVRs of between 60% and 80% increased 6.1%, LVRs of 80% to 90% increased 14.3% and LVRs greater than 90% fell by -20.1% which was the largest year-on-year fall June 2010.  Based on the data it is clear that lenders have been tightening lending requirements over recent quarters which has led to a sharp decline in new mortgage lending for LVRs above 90%.
Overall the data indicates that the market is responding to regulatory changes in the lending space implemented over the past year.  There is less new lending to high LVRs, fewer low documentation and interest-only mortgages being written. 
On the other-hand some other potentially more risky lending types such as non-standard and outside of serviceability loans are continuing to rise.  It will be interesting to see whether APRA starts to look to crack-down on some of these types of lending in order to ensure stability within the mortgage market.
Cameron Kusher is research analyst for CoreLogic RP Data. You can contact him <a href="https://blog.corelogic.com.au/about/">here</a>.
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ckusher-ujnxiKuFQs

APRA data shows a further tightening of lending standards: Cameron Kusher

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The Reserve Bank of Australia governor Glenn Stevens has confirmed one of big concerns over the past year has been resolved.
He suggests official measures have held back the panicked buying that had been fuelling the property boom in Sydney following tougher lending rules imposed by the Australian Prudential Regulatory Authority which seemed to be working. 
"It had to happen," Mr Stevens told The Australian Financial Review which has published its annual interview with the RBA Governor. The interview suggests a level of comfort with the economy in the near term and that the RBA seems content to retain rates on hold.
He noted CoreLogic RP Data's price dip over recent months.
"I think that's welcome because an ongoing rapid pace of price increase, I think, leads to dynamics in the economy that are ultimately unhelpful – the possibility of people, you know, almost buying in panic, stretching their balance sheet and so on.
"So I think what we've seen is that things have calmed down a bit.
"I think that's welcome."
The newspaper said the central banker wasn't just worried about Australians taking on more debt than they could repay if interest rates rose as he was also concerned that housing was becoming too expensive for many.
"The pace of growth that we had – you can't keep going at that pace without new stimulus coming into the market from somewhere because the affordability levels just get out of reach for people unless we keep cutting interest rates which we're not doing right at the moment, obviously," he told The Australian Financial Review. 
He suggested Melbourne's market "retains a little more buoyancy" than Sydney, but declined to predict where capital city prices would go in 2016.
"So I'm happy with the way those things have worked out thus far, but what happens from here, you know, you can't tell.
"You can't pick that," he said.
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jchancellor-FAypfDUnLy

Panicked buying in decline, but 2016 price direction imprecise: RBA governor Glenn Stevens

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The RBA December board minutes noted the growth in lending to investors in the housing market appeared to have eased, with a moderation in the pace of growth in housing prices in Sydney and Melbourne over recent months.
Housing price growth had mostly remained subdued in other cities.
"In the established housing market, auction clearance rates and housing price growth had declined over recent months in Sydney and to a lesser extent in Melbourne.
"Prices were declining in Perth and rising moderately in much of the rest of the country."
The Reserve Bank of Australia board members observed that the growth of total housing credit had been little changed.
<a href="/images/2015/12/15/Screen%20Shot%202015-12-15%20at%2011.52.47%20AM.png" target="_blank">Click to enlarge</a>
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"The easing in housing price growth in Sydney and Melbourne and apparently lower growth in lending for the purpose of investor housing had followed an earlier tightening in lending terms, partly in response to supervisory measures announced by the Australian Prudential Regulation Authority.
"It was still too early to assess the effect of the modest increase in lenders' mortgage rates in November (for both investors and owner-occupiers) on the housing market.
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"While the recent changes to some lending rates for housing would reduce demand slightly, overall conditions remained quite accommodative.
"Members observed that supervisory measures had been helping to contain risks that may arise from the housing market."
The December minutes also noted the available data suggested that dwelling investment had increased in the September quarter.
"Building approvals remained at high levels, despite having eased somewhat since the start of the year.
"This was consistent with the expectation of further increases in dwelling investment in coming quarters, albeit at a gradually declining rate."
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APRA measures are containing housing risk: RBA

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Geoff Summerhayes has been appointed a member of the Australian Prudential Regulation Authority (APRA) by the Treasurer for a term of five years from January 1.
Summerhayes was most recently the chief executive officer of Suncorp Life, a role he has held since 2008. Prior to joining Suncorp, he spent more than 20 years with property and financial services organisations like Lend Lease, MLC and NAB.
In his new role, Summerhayes will focus on APRA’s activities in relation to general, life and private health insurance.
The Treasurer also appointed Helen Rowell, an APRA member since July 2013, as the regulator's deputy chair for the remainder of her five-year term. Rowell will continue to have primary responsibility within APRA for all superannuation-related matters.
"Geoff will bring a great deal of commercial acumen and experience to the position of APRA Member. I look forward to working with Helen and Geoff to ensure APRA continues to perform its responsibilities effectively and efficiently, for the benefit of the Australian community," said APRA chairman Wayne Byres.
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j.ballantyne1990-6AQqhLzZaK

Geoff Summerhayes appointed new APRA member, Helen Rowell to deputy chair

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Officialdom decided last December that property investor lending needed to be restrained given the emerging trend of more money being lent to investors than owner occupiers.
The Australian Prudential Regulation Authority introduced a cap on allowable growth in bank lending on residential investment loans.
This eventually impactful decision got lost amid the seasonal Christmas break, and further from mind when the Reserve Bank of Australia cut the cash rate to 2.25% at its opening February 2015 meeting.
Growth in credit extended to investors had increased by 10% during 2014, right on the APRA threshold for its intended stricter scrutiny of lending practices.
Owner-occupier credit growth had at around 5.5%.
Of course APRA was technically not targeting house price levels – but rather setting benchmarks for a safer banking system.
The early 2015 auction competition saw no handbrake in the battle between home buyers and investors.
Reaching fever pitch, clearance rates peaked in March at 82%, according to CoreLogic RP Data, with properties typically knocked down at record prices especially in cheaper outer Sydney districts where auction had never been the normal means of sale.
It was soon obvious that the subtle backroom macroprudential measures needed to be intensified.
The jawboning by the RBA and APRA became more emphatic. The banks were told to look at loan-to-valuation ratio limits which made it harder to get an investor loan. Interest only loans became a rarity. Off the plan buyers were told they'd need to fund 20% of their apartment purchases. Finance approvals for house and land lots were being delayed until preliminary works had been completed. One bank even stopped all new lending to investors.
Events and issues then combined that further unnerved the housing market. There were signs of a retreat in foreign buyers as Treasurer Joe Hockey launched his crackdown on overseas buyers who were boosting prices in select suburbs. Financial inquiry chief David Murray raised the prospect of negative gearing reform. Doubt was cast over the future of self managed super funds being able to borrow.
In May Treasury secretary John Fraser warned that Sydney was in a housing bubble. The RBA governor Glenn Stevens wasn't wrong in June when he said some crazy prices were being paid. 
Against a backdrop of high household debt, subdued income growth and fluctuating unemployment, the negativity clincher came after the banks raised home loan rates in mid-October given long foreshadowed rules forcing banks to hold larger loss-absorbing capital buffers.
By this time the entire Sydney property market was primed to be spooked. Auction clearance rates - which are a good sign of market sentiment and price growth - swiftly fell in the outer suburbs dipping sometimes into the 40s. Traditional auction hotspots, Sydney's inner west and eastern suburbs then took fright too.
Buyers just were not as prevalent - especially investors - and those who turned up kept their bidding restrained.
It is not quite lights out for the investor, but it has been getting darker, was how the valuation firm Herron Todd White has described the turn of events.
"We see the will is still present, but the ability to finance the dream is diminishing,' its November review advised as APRA's measures now extend well beyond the Sydney market into regional NSW.
The Australian Prudential Regulation Authority (APRA) recently released Quarterly Authorised Deposit-taking Institution (ADI) Property Exposures for the September 2015 quarter showing the slowing in lending to investors. The publication contains information on ADIs’ commercial property exposures, residential property exposures and new housing loan approvals. 
Key statistics for ADIs (excluding Other ADIs) for September 2015 were:  
<table border="1"><tbody>
<tr>
<th id="header1"> </th>
<th id="header2">September 2014</th>
<th id="header3">September 2015</th>
<th id="header4">Change</th>
</tr>
<tr>
<td headers="header1">Total commercial property exposures</td>
<td headers="header2" align="center">$224.5 billion</td>
<td headers="header3" align="center">$240.4 billion</td>
<td headers="header4" align="center">+7.1%</td>
</tr>
<tr>
<td headers="header1">Commercial property exposures within Australia</td>
<td headers="header2" align="center">$185.8 billion</td>
<td headers="header3" align="center">$201.1 billion</td>
<td headers="header4" align="center">+8.2%</td>
</tr>
<tr>
<td headers="header1">Total domestic housing loans</td>
<td headers="header2" align="center">$1,243.3 billion</td>
<td headers="header3" align="center">$1,354.8 billion</td>
<td headers="header4" align="center">+9.0%</td>
</tr>
</tbody></table>
 Key statistics for ADIs with greater than $1 billion in housing loans for September 2015 were: 
<table border="1"><tbody>
<tr>
<th id="header1"> </th>
<th id="header2">September 2014</th>
<th id="header3">September 2015</th>
<th id="header4">Change</th>
</tr>
<tr>
<td headers="header1">Number of housing loans</td>
<td headers="header2" align="center">5,086.7 thousand</td>
<td headers="header3" align="center">5,422.8 thousand</td>
<td headers="header4" align="center">+6.6%</td>
</tr>
<tr>
<td headers="header1">Average balance of housing loans</td>
<td headers="header2" align="center">$240,000</td>
<td headers="header3" align="center">$246,000</td>
<td headers="header4" align="center">+2.5%</td>
</tr>
<tr>
<td headers="header1">New housing loans approved in the quarter</td>
<td headers="header2" align="center">$84.8 billion</td>
<td headers="header3" align="center">$95.0 billion</td>
<td headers="header4" align="center">+12.0%</td>
</tr>
</tbody></table>
The Australian Prudential Regulation Authority data on showed the value of loan approvals for property investors fell to $32.39 billion in the three months to September 30 down from $40.55 billion in the June quarter.
Loans to property investors made up around 35 per cent of new lending approved in the September quarter, the lowest in the past two years, and down from around 43 per cent in the June quarter.
Analysts however are treating the data with some caution as <a href="/news/rba-concerned-at-inaccuracy-of-housing-lending-data-by-banks">several banks have been busy reclassifying billions of dollars in home loans</a>.
This article was first published in the Saturday Daily Telegraph.
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The APRA impact on 2015 property investment

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APRA's investment finance restrictions have led to a sharp fall in investor-related housing demand, according to CoreLogic RP Data research analyst Cameron Kusher.
CoreLogic RP Data's Property Pulse found June changes to lending practices around conditions for investment purposes contributed towards a substantial slowdown in lending. Higher mortgage rates, low rental yields and a maturing housing cycle are also drivers. 
Cameron Kusher said the reclassification of investor loans to owner occupier loans is also muddying the clarity of the housing finance data, adding the value of lending to investors is now lower than the value of lending to owner occupiers for new loans.
"The Australian Bureau of Statistics (ABS) has noted that over recent months many ADIs have been reclassifying some investor loans to owner occupier loans,” he said.
"At a state level the data is not published in seasonally adjusted terms, only raw figures. According to this data the value of lending to investors peaked in June 2015 and as ADIs have made changes to their lending policies, investor demand has waned. Between June 2015 and September 2015, the value of lending to investors has fallen in each state.
"As a result of the slowdown in lending to investors across each state, the value of new lending in most states is now greater to owner occupiers than it is to investors. It is important to note that historically, it has been very unusual for investors to be a greater part of the new lending environment than owner occupiers; however, this has been the case for most of the past year and a half."
 
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mick.cee-iDmgDDAmu8

APRA’s handbrake on investment lending starting to show: CoreLogic RP Data

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Signs of slowing have emerged in Sydney property markets after the four major banks increased their standard variable interest rates to be slightly higher for investment loans over owner occupier loans to meet the APRA requirements, according to valuation firm Herron White Todd.
The banks had also introduced tougher loan-to-value standards in response to a move by regulators to rein in the riskier corners of the country’s house price boom, the HTW November review advised saying there was now often a maximum of 80% loan to value ratio for investors. 
"We have not seen the full effect this will have on the property market as yet, however we are seeing signs of slowing." 
The 80% was providing a significant buffer for the banks "however it becomes harder for an individual to actually save the 20% deposit or to use the existing equity in their primary dwelling or portfolio for the deposit.
"With fewer people able to access the 20% deposit, there will be fewer investors in the market," the valuation firm advised.
It suggested that this could lead to less demand and more supply which directly affects the value of a property. 
"There are signs that the market may be cooling," the report added noting there had been a continual decline in auction clearance rates in Sydney from low 80% in July 2015 to mid 60% in October 2015 according to Corelogic RP Data. 
"This is a combination of the record number of auctions listed (so volume sold as a percentage is decreased), the expectations of vendors to exceed prices that were being achieved by neighbours no more than three months ago and a decrease in the pool of purchasers as we enter into a new wait and see phase of the property cycle." 
The review indicated that it is fair to say that much of the growth in Sydney in the past eighteen months has been fuelled by the investor market.
"On the ground, completing the mortgage valuations, we have seen that this has been a combination of local buyers such as baby boomers using the equity in their main dwelling to purchase additional property for their superannuation, interstate investors who have heard the get rich quick scenarios and are banking on quick capital appreciation and overseas investors looking to build a property portfolio."
The report went on to say that given that the recent APRA changes took effect mid year, it was "too soon" to say what the full impact of the tightening of bank regulations has been on the property market but indications are that the regulations appear to be working.
"This change in criteria could have a positive impact on the first home buyer market which traditionally competes heavily with entry level investors and could open up opportunities for the owner occupier."
The review concluded by suggesting Herron Todd White believe the investor market in NSW will remain stable over the medium term as the banks have not made it impossible to buy an investment property, they have just tightened their criteria.
"These changes will not exclude people from entering the market as investors but force them to be in a more secure financial position before entering into any agreements."
The November review also suggested that in the past few years Sydney has also had the benefit of many new developments partially due to a change in approval policy; partially due to the underlying demand and supply imbalance in the market and partially due to the demands of the overseas investment market that is regulated by government to the purchase of new property only. 
"This product is appealing to investors and owner occupiers as developers and the government offer benefits such as reduced or no stamp duty, monetary incentives and non-monetary incentives. 
"We have seen new developments or off the plan purchases become the most popular because of the combination of incentives received and, due to the heat in the market, the assured capital appreciation from purchase to settlement.
"To date we have not become aware of any changes in these policies and can only assume they will remain for the foreseeable future however doubt over immediate capital appreciation may see some investors withdraw."
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Developments

New apartments

New townhouses

News