Repeat buyers are one of the strongest measures of confidence in any apartment development.

At <a href="https://www.apartments.com.au/new-apartments/era-newcastle-west-124-126-bull-street-newcastle-west-nsw-2302">ERA</a> in Newcastle West, some purchasers are returning to <a href="https://www.apartments.com.au/developers/gwh">GWH</a> after living at the developer's One Apartments. Their decision to purchase again was driven by the quality of life they found after moving into their first GWH home.

Keith Wilton had spent years living in a house in East Maitland before deciding it was time for a change. Apartment living had always been on his radar, but he was selective about what he wanted.

<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/FH_1EzB-1vs?si=XScVlP1ERsTDJoME" title="YouTube video player" width="560"></iframe>

"I had some boxes I wanted to tick," he says.

Keith points to the open-plan design, generous outdoor areas and considered inclusions as key reasons One Apartments worked for him.

“One of those things was a nice indoor open plan area, but also I wanted a nice outdoor open area that I could entertain on in summer or Christmases or birthdays,” he says.

He also found value in the smaller details, from integrated appliances to shared resident spaces including the pool, cinema and rooftop areas.

[smartcode_project:default project_id=135096 project_image_fid=356818]

After comparing several developments, he chose One Apartments because of GWH's longstanding local reputation and his own experience working with the developer on a commercial project more than a decade earlier.

"I knew that they were local, that the quality of the build was going to be up there. I'd looked at other apartment complexes around and close by, and I just knew that here was a better decision location wise."

Today, Keith says the move has completely changed how he experiences Newcastle.

"I enjoy living in this location because it's more of a lifestyle change. That Newcastle city living where you can walk to restaurants and bars and even beaches and parks and even shopping across the road."

[smartcode_project:default project_id=135096 project_image_fid=356828]

Beyond the location, he says it's the sense of community that has surprised him most.

"Everyone loves living here because they chose to live here, but everyone looks out for each other. It's a real great community feel here."

For Aimee and Lyle Goodman, the journey started almost by chance.

<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/tsioMLcnjas?si=zq-ys3JuWpfa5hFv" title="YouTube video player" width="560"></iframe>

The couple happened to be having coffee in Newcastle when they noticed the site where One Apartments was about to begin construction.

"We were aware GWH was planning a development," Aimee says. "We made one phone call and things moved pretty quickly after that."

As busy business owners, they initially thought apartment living would simply reduce the maintenance that came with larger homes. Instead, it fundamentally changed how they spent time together.

"We actually catch up more as a family now," Aimee says.

"We've had homes with big yards and lots of space, but everyone ended up in different rooms. Here we'll have dinner together, the kids can play, and we spend far more quality time together."

[smartcode_project:default project_id=135096 project_image_fid=356829]

Lyle says their confidence came from GWH's reputation within Newcastle's building industry.

"I know people who've worked across different apartment projects, and whenever GWH came up the feedback was always the same. They're rock solid. They're quality."

That confidence only grew throughout the buying process.

"One of the things that really impressed us with GWH was the whole process, was the communication," Lyle says. "It was consistent, it was regular, there was no problem if we had some weird questions, there was no problems in getting answers."

[smartcode_project:default project_id=135096 project_image_fid=351104]

Aimee says one moment stood out.

"The project actually finished on time. We realised we needed to hurry up and sell our house because everything was happening exactly when they said it would."

The positive experience at One Apartments ultimately gave all three buyers the confidence to purchase again with GWH, this time at ERA.

Their confidence reflects what many buyers are seeking in today's apartment market. Location remains important, but so too does certainty around delivery, quality and long-term liveability.

[smartcode_project:default project_id=135096 project_image_fid=356822]

ERA builds on those foundations with 280 one, two and three-bedroom apartments across two landmark towers in <a href="https://www.apartments.com.au/developments/newcastle-west-nsw-2302">Newcastle West</a>.&nbsp;

Designed by <a href="https://www.apartments.com.au/architects/fk-australia">Fender Katsalidis</a>, the project will include more than 2,000 square metres of resident amenities, including a resort-style pool, gym, sauna, private cinema and rooftop entertaining spaces overlooking the harbour and coastline.&nbsp;

The development is also within walking distance of the Newcastle Interchange, Honeysuckle, Darby Street, the harbour foreshore, restaurants, retail and the city’s beaches, continuing the walkable lifestyle that existing GWH buyers say has transformed how they live.

[smartcode_project:default project_id=135096 project_image_fid=356826]

For Keith, the appeal remains straightforward.

"You feel at home even before you've moved into your home."

For Aimee, the change is measured in time.

“I just felt like I had more time,” she says.

[smartcode_project:default project_id=135096 project_image_fid=351102]

Construction at ERA is now underway, with more than half of the residences already sold and limited two and three-bedroom apartments remaining in the East Tower release. Priced from $980,000 for two-bedroom residences and $1.46 million for three-bedroom residences, buyers can secure an apartment with a 10 per cent deposit, with premium homes offering ocean views from Level 8 and harbour views from Level 10.

ERA is also backed by Resilience Insurance's 10-year Latent Defects Insurance policy, providing protection against structural or waterproofing defects for 10 years after completion. The project is anticipated to be completed in early 2028.

[smartcode_project_cta:default project_id=135096]

Joel Robinson

From ONE to ERA: Why buyers are choosing GWH again in Newcastle West

Virgate Property Group is preparing to commence construction of Verdé, its new apartment development in Melbourne's Arts Precinct at Southbank, following a strong run of sales that has seen more than half of the project's 173 apartments secured.

Verdé has attracted a broad mix of first home buyers, owner-occupiers upgrading from nearby inner-city suburbs and investors, with younger owner-occupier couples aged between 28 and 45 accounting for the strongest enquiry. Many are already living in Southbank, South Melbourne, Albert Park, Port Melbourne, South Yarra and the CBD.

"Verdé is located in one of the most desirable pockets of southern Melbourne," Blair Property Group Director Darren Blair, who is managing sales at Verdé, said.

"It's within walking distance of the Arts Centre, Royal Botanic Gardens, Albert Park Lake, and Southbank's restaurants and retail. It's a great lifestyle location with strong amenity and liveability, which made it a very attractive choice for the project."

[smartcode_project:default project_id=4661 project_image_fid=372549]

Virgate was already familiar with the precinct, having previously delivered the successful Domain House development in neighbouring South Melbourne. That experience gave the developer confidence to acquire the Coventry Street site and continue expanding its presence in Melbourne's inner south.

"We had been keeping an eye on the site and the broader precinct for a few months before deciding to move forward with the acquisition," Virgate said.

The project was ultimately secured in 2020 following feasibility studies, planning assessments and due diligence, with the brief centred on delivering "a high-quality, considered design that feels both refined and fit for purpose."

[smartcode_project:default project_id=4661 project_image_fid=314259]

Designed by <a href="https://www.apartments.com.au/architects/bruce-henderson-architects">Bruce Henderson Architects</a>, Verdé comprises 173 one, two and three-bedroom apartments priced from $599,000. The architecture is distinguished by a faceted glass façade that responds to both the site's outlook and Melbourne's changing light conditions.

According to Bruce Henderson Architects, the coloured glazing gives the building a distinctive identity while also providing privacy and solar shading, with residences oriented to capture views across the bay, city skyline and surrounding parklands.

Inside, <a href="https://www.apartments.com.au/interior-designers/designoffice">DesignOffice</a> has created interiors focused on natural light, efficient planning and enduring materials. Apartments feature engineered oak flooring, natural stone benchtops, floor-to-ceiling glazing and SMEG appliances, while a restrained material palette aims to complement the expansive outlooks rather than compete with them.

[smartcode_project:default project_id=4661 project_image_fid=372550]

Resident amenity has also been designed around everyday functionality rather than occasional use. Facilities include a concierge-serviced lobby, residents' lounge with fireplace, library and co-working space, gym, terrace garden with barbecue facilities, ground-floor café, and package delivery management.

The project's location continues to be one of its strongest drawcards. Positioned on Coventry Street, Verdé sits within walking distance of the National Gallery of Victoria, Arts Centre Melbourne, Royal Botanic Gardens and Albert Park Lake, while Southbank's dining precinct, Sturt Street trams and the new ANZAC Station are all nearby. The surrounding education catchment also includes Melbourne Grammar, Melbourne Girls Grammar, Mac.Robertson Girls' High School and several major university campuses.

The sales team says buyers have responded particularly well to the combination of location, design quality and long-term liveability.

"They're responding really positively to the quality of the design, premium resident amenities and the uninterrupted views. Many also appreciate the location and how connected it is to everything they need."

The ability to secure stamp duty savings before completion has also been a key factor for purchasers, alongside the opportunity to personalise finishes ahead of settlement.

With construction set to commence soon and more than half the apartments already sold, Verdé enters its next phase as one of the Arts Precinct's more established apartment developments, offering remaining buyers an opportunity to secure a residence before construction advances further. Expected completion is scheduled for late 2027.

[smartcode_project_cta:default project_id=4661]

Virgate's Verdé Southbank moves toward construction as sales fly past halfway stage

Downsizer-focused apartment development Kooyongkoot in Hawthorn has been recognised at the 2026 Better Future Melbourne Design Awards, taking home Gold and Silver awards in two categories.

<a href="https://www.apartments.com.au/new-apartments/kooyongkoot-hawthorn-1-kooyongkoot-road-hawthorn-vic-3122">Kooyongkoot</a>, currently being delivered by developer PQD and designed by Cera Stribley, received Gold in the Interior Design – Proposed category and Silver in the Architecture – Proposed category.

The dual recognition reflects the design approach behind the boutique development on prestigious Kooyongkoot Road, where the focus has been on creating homes for downsizers seeking the space, quality and functionality of a detached house within a low-rise apartment building.

Rather than maximising apartment numbers, <a href="https://www.apartments.com.au/developers/pqd">PQD</a> and <a href="https://www.apartments.com.au/architects/cera-stribley-architects">Cera Stribley</a> limited the development to just 18 residences, allowing for larger floorplans, greater privacy, generous landscaping and expansive communal spaces.&nbsp;The majority of the apartments also benefit from corner aspects, allowing for dual sources of natural light.

Now around 70 per cent complete and on track for completion in November 2026, Kooyongkoot will comprise a mix of garden residences, ter​race apartments, sub-penthouses, and is crowned by two half-floor penthouses with direct lift access and private rooftop terraces.

[smartcode_project:default project_id=102717 project_image_fid=355297]

The Silver Award for Architecture recognised the way the building responds to its prominent corner position at the ent​rance to Hawthorn's Scotch Hill precinct, one of Melbourne's most established residential neighbourhoods.

Rather than competing with the grand homes that line Kooyongkoot Road, the architectural approach focused on restraint and longevity, using curved brickwork, generous landscaping and carefully considered proportions to integrate with the existing streetscape.

"The form feels fluid and timeless, as though shaped by the landscape itself – architecture that belongs, rather than competes," said Chris Stribley, Co-Founder and Managing Principal of Cera Stribley.

The judging submission also highlighted practical innovations throughout the building, including lift cores servicing only nine homes each, a central landscaped lightcourt designed to bring daylight and ventilation into the building, and fully enclosed private storage rooms with lighting, power and shelving to better accommodate residents transitioning from larger family homes.

[smartcode_project:default project_id=102717 project_image_fid=355293]

The Gold Award for Interior Design recognised the project's focus on long-term liveability rather than display-home aesthetics.

According to the awards submission, the interiors were designed from the inside out, prioritising how homes would function over decades of daily use through generous proportions, practical storage, durable natural materials and flexible layouts.

The specification includes natural stone throughout, upgraded acoustic glazing, V-ZUG appliances and fully enclosed storage rooms, alongside an amenity offering focused on wellness, entertainment and everyday convenience.&nbsp;

Residents will have access to a gym and yoga studio, a wellness centre featuring traditional and infrared saunas, a cold therapy shower and treatment room, as well as a residents' lounge and golf simulator/cinema room for entertainment.&nbsp;Kooyongkoot has also considered the everyday convenience of its residents by offering a private carwash and pet wash facilities on site as well as dedicated parcel lockers and oversized fully enclosed storage rooms.&nbsp;

[smartcode_project:default project_id=102717 project_image_fid=355303]

The project's attention to detail has already resonated with buyers. Earlier this year, Kooyongkoot recorded one of Boroondara's highest apartment sales when an $8 million penthouse was purchased by a Melbourne CEO downsizing from a nearby family home.

"Every detail feels deliberate, from the overall design down to the smallest touches," the purchaser said.

"The level of quality and refinement is exceptional, but what really sold it was how liveable it felt... It felt like a place where everything had been considered, not just a luxury building."

[smartcode_project:default project_id=102717 project_image_fid=355304]

Sustainability also formed a key part of both award submissions. Kooyongkoot is targeting a minimum 7.5-star NatHERS rating across all residences, supported by passive design principles, high-performance glazing, EV charging infrastructure, water reuse systems and a wellness model focused on lower-energy dry facilities rather than pools and large wet areas.

Located within walking distance of Scotch College, Methodist Ladies' College, Koo​yong Lawn Tennis Club, Aubur​n Village and Camberwell Junction, Kooyongkoot continues to target owner-occupiers looking to remain in Melbourne's inner east without compromising on space or quality. A limited selection of two, three and four-bedroom residences remains available, with prices starting from $1.9 million.

[smartcode_project_cta:default project_id=102717]

Kooyongkoot wins Gold and Silver at Better Future Melbourne Design Awards

New apartment supply has become increasingly constrained across <a href="https://www.apartments.com.au/developments/parramatta-nsw-2150">Parramatta</a> in recent years, with fewer projects progressing through to completion as development conditions have become more challenging.

It makes <a href="https://www.apartments.com.au/developers/novm">NOVM</a>'s 2021-completed <a href="https://www.apartments.com.au/buildings/the-lennox-parramatta-12-phillip-street-parramatta-nsw-2150">The Lennox</a> one of the most recently completed residential towers on the Parramatta River, and among the newest apartment developments in Sydney's second CBD.

With the project largely completed before the sharp escalation in construction costs and inflation following the pandemic, The Lennox is now offering pricing that would be difficult to replicate in a comparable new development in Parramatta today, or across much of Western Sydney.

The majority of the 413 apartments at The Lennox sold before and shortly after completion. A limited release of the remaining apartments has recently been brought to market by capital partner <a href="https://www.apartments.com.au/project-marketer/equitifund-group">Equitifund</a>, with entry-level pricing from $700,000 and two-bedroom apartments available from under $1 million.

Rising above the Parramatta River at 12 Phillip Street, The Lennox comprises one, two, three and four-bedroom apartments, appealing to first home buyers, young professionals, families, downsizers and interstate investors seeking a completed apartment in one of Australia's fastest-growing economic centres.

[smartcode_project:default project_id=5743 project_image_fid=372394]

Rather than positioning Parramatta as an alternative to Sydney's CBD, Equitifund believes the city has reached a point where it stands on its own merits.

"Parramatta is no longer simply an alternative to Sydney CBD, it's becoming a destination in its own right," Equitifund Executive Chairman Greg Huxley said.

"The Lennox captures that evolution with a level of quality and amenity that's difficult to match at its price point."

[smartcode_project:default project_id=5743 project_image_fid=953]

Designed by <a href="https://www.apartments.com.au/architects/marchese-partners">Marchese Partners</a>, the tower responds directly to its riverfront setting through expansive glazing and open-plan layouts that maximise views across the Parramatta River and city skyline. Interiors feature engineered timber flooring, stone benchtops, stainless steel appliances and floor-to-ceiling glazing, while generous balconies extend the living spaces outdoors.

Marchese Partners says the project was conceived to balance high-quality apartment living with practical, long-term functionality, pairing larger, efficient floorplans with amenities more commonly associated with five-star hotels.

That emphasis continues through the resident facilities, which include a 20-metre rooftop swimming pool, fully equipped gym and wellness spaces, full-time concierge, a residents' lounge, function room, private lifts, secure basement parking and rooftop communal areas overlooking the Parramatta River. Ground-floor boardwalk retail and dining further activate the riverfront and integrate the building into the surrounding public realm.

[smartcode_project:default project_id=5743 project_image_fid=925]

Australian housing and finance group Equitifund has secured the remaining apartments, believing there are few completed apartment opportunities in Parramatta that offer the same combination of location, amenity and pricing.

Equitifund National Sales Director Ben Hamblett says buyers are increasingly recognising that premium apartment living no longer needs to come with Sydney CBD pricing.

"The Lennox is where aspirational living becomes attainable," Hamblett said.

"Wake to river and mountain views, step into Sydney's Second CBD, and arrive home to resort-calibre amenities, all without the harbour price tag."

Hamblett says owner-occupiers are also attracted by the convenience of having Westfield Parramatta, Church Street's dining precinct, Parramatta Park, Riverside Theatres, Western Sydney University and major transport connections all within walking distance.

"At The Lennox, lifestyle is not an afterthought, it is the foundation."

[smartcode_project:default project_id=5743 project_image_fid=5374]

The Lennox places residents within walking distance of Parramatta Square, Westfield Parramatta, Church Street Eat Street, Parramatta Station, the ferry wharf, Light Rail, the future Sydney Metro West, Parramatta Park and CommBank Stadium, reinforcing Parramatta's position as one of Australia's most connected metropolitan centres outside Sydney's CBD.

Equitifund says buyers visiting the display suite consistently comment on the quality of the finishes, generous floorplans, river and skyline views, and the walkability of the location. The project has attracted a broad mix of local professionals, upsizers, downsizers, buyers relocating from Sydney's inner suburbs and interstate investors seeking long-term growth opportunities.

That demand aligns with Parramatta's continued evolution as an economic powerhouse. Equitifund Research and Market Insights specialist John Bekiaris says sustained population growth, infrastructure investment and expanding employment opportunities continue to support long-term housing demand across the city.

"Parramatta has evolved from a satellite city into one of Australia's most important economic centres. Population growth, infrastructure investment and employment are all supporting sustained long-term housing demand."

[smartcode_project_cta:default project_id=5743]

The apartment price gap drawing Sydney buyers west

A luxury beachfront apartment at Rainbow Bay has more than doubled in value since it sold off the plan six years ago, setting a new local apartment record in the process.

The three-bedroom apartment in the Flow development on Petrie Street, the first of four new projects locally by Paul Gedoun's S&amp;S Projects, has sold for $7.4 million, after originally selling for $3.27 million when the project launched in 2020.

The seventh-floor apartment, comprising 187 sqm of internal living space and a 54 sqm balcony overlooking Froggies Beach and Snapper Rocks, was purchased by a local family.

The transaction was negotiated by Pezet Matheson director Kerry Pezet and equates to more than $30,000 per sqm.

Pezet said the sale reflected the limited opportunities to buy into the boutique beachfront development.

"The sale highlights the rarity of opportunities within the boutique beachfront development, where residences seldom become available," Pezet said.

"Flow is one of the Gold Coast's most tightly held buildings. Buyers from our database move quickly when residences become available, and achieving an off-market sale at $7.4 million demonstrates the depth of demand for property of this calibre."

<img alt="Flow" data-entity-type="file" data-entity-uuid="c585b206-2130-4eee-a50c-3f27c51a7c70" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-07-06%20at%208.33.25%E2%80%AFPM.png?VersionId=m3pHRDV62Y3fvN.XQuQHq.52ilTWpRLf" />

Flow was the first of four luxury apartment developments delivered by Paul Gedoun's S&amp;S Projects at Rainbow Bay and was completed in 2023.

Positioned on the beachfront overlooking Snapper Rocks, the residence includes three bedrooms, three bathrooms, a powder room and views stretching north along the coastline towards Surfers Paradise.

Pezet Matheson Residential principal Mitchell Lambert said buyers continued to prioritise quality beachfront apartments in tightly held locations.

"Flow Residences offers a rare combination of elevated beachfront positioning, architectural excellence, comprehensive resident amenity and premium finishes, which is exactly what discerning purchasers are seeking," Lambert said.

"The transaction further reinforces Rainbow Bay's reputation as one of Australia's premier coastal lifestyle destinations, where limited supply and growing demand continue to support strong market performance."

Pezet Matheson originally marketed and sold out Flow off the plan, making the latest transaction a return to one of the project's original buyers.

Paul Gedoun is selling his third project, <a href="https://www.apartments.com.au/new-apartments/radia-rainbow-bay-271-boundary-street-coolangatta-qld-4225">Radia Rainbow Bay</a>, after recently completing, and selling out, <a href="https://www.apartments.com.au/buildings/esprit-217-227-boundary-street-coolangatta-qld-4225">Esprit</a>. He has plans for a <a href="https://www.apartments.com.au/news/qld/first-look-s-s-projects-proposes-88-apartment-wellness-tower-at-coolangattas-boundary-street">fourth building</a>, 88 apartments on <a href="https://www.apartments.com.au/new-apartments/209-213-boundary-street-coolangatta-qld-4225">Boundary Street</a>.

Rainbow Bay apartment doubles in price since off the plan sale during pandemic

Home Loans

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<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/05/04/ratecity-logo.jpg" alt="" width="687" height="184">
SPONSORED POST
If you’re living in a market where property prices have been surging, refinancing could allow you to reduce your gearing level while giving you access to more money.
How? Well, imagine that back in 2014 you borrowed $500,000 to purchase a $600,000 property. Now imagine that your mortgage debt had since fallen to $475,000 while your property’s value had grown to $650,000.
In that case, your equity would’ve risen from $100,000 to $175,000, while your loan-to-valuation ratio (LVR) would’ve fallen from 83 percent to 73 percent. 
If you were to get an updated valuation on your property during the refinancing process, the new lender might respond to your improved financial position by extending you more credit.
In our hypothetical example, the new lender might allow you to stretch your LVR from 73 percent to 80 percent, and therefore allow you to increase your mortgage from $475,000 to $520,000.
Suddenly, you’ve got an extra $45,000 to play with! You could use that money to pay for home renovations, a new car or a holiday. Or you could put it straight into your offset account and potentially access it several years in the future.
Property prices are growing at double-digit rates in four of Australia’s eight capital cities, according to the latest data from CoreLogic.
Sydney’s median price jumped 18.9 percent in the 12 months to 31 March 2017, while Melbourne’s climbed 15.9 percent, Canberra’s 12.8 percent and Hobart’s 10.2 percent. 
Even if you live in one of the other four capital cities, it’s possible that prices in your suburb are recording significant growth or that your suburb’s median price has risen significantly since you purchased your property.
If you want to reduce your debt ratio and unlock equity in your home, you need to refinance.
RateCity is making the process easier with its <a href="https://www.ratecity.com.au/sale?utm_source=propertyobserver&amp;utm_medium=referral&amp;utm_campaign=rcsale_propertyobserver_article2&amp;rmatt=tsid:1030695%7Ccid:54369%7Ccgid:543693734136%7Ccrid:15969009" target="_blank">Switch &amp; Save Sale</a>, which will allow borrowers to access market-leading rates for their refinance.
Borrowers who are with ANZ, Commonwealth Bank, NAB or Westpac could actually save up to $39,000 over 15 years by switching through the <a href="https://www.ratecity.com.au/sale?utm_source=propertyobserver&amp;utm_medium=referral&amp;utm_campaign=rcsale_propertyobserver_article2&amp;rmatt=tsid:1030695%7Ccid:54369%7Ccgid:543693734136%7Ccrid:15969009" target="_blank">Switch &amp; Save Sale</a>.
RateCity arrived at that figure after calculating how much borrowers would save if they switched from an average-sized mortgage from the average discounted variable rate offered by one of the big four banks to the lowest variable rate in the <a href="https://www.ratecity.com.au/sale?utm_source=propertyobserver&amp;utm_medium=referral&amp;utm_campaign=rcsale_propertyobserver_article2&amp;rmatt=tsid:1030695%7Ccid:54369%7Ccgid:543693734136%7Ccrid:15969009" target="_blank">Switch &amp; Save Sale</a>. 
RateCity then factored in the discharge fees, application fees and ongoing fees to work out the savings over a 15-year loan term.
Some people think of a mortgage as a one-time event – you take out the loan and then stick with it until the bitter end. 
However, smart borrowers regularly refinance, because they know it not only gives them a chance to reduce their repayments, but also lower their LVR and increase their equity.
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jchancellor-FAypfDUnLy

The property boom could be the best thing to happen to your mortgage: RateCity

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Interest rates hikes have struck home owners and investors after the Commonwealth Bank (CBA) lifted fixed rate deals on its loans by as much as 0.5 per cent. Customers taking out fixed rate deals with rate will now be hit with increases across 1, 2, 3, 4 and 5 year fixed terms. It is the second rate hike within 20 days.
However, the bank provided for owner occupiers signing up to principal and interest fixed home loan deals to escape the latest hikes.
The Commonwealth Bank said the move was to ensure it "continue[d] to meet our regulatory requirements".
In a memo issued to mortgages brokers, CBA outlined that interest-only investment loans would be the worst hit — 2, 3, 4, and 5 year terms would all rise by 0.5 per cent.
The changes are effective for new and existing customers who switch into one of these products from today.  
Three-year fixed rate interest-only owner occupier loan rates will rise by 0.25 per cent to 4.49 per cent.
Three-year fixed rate interest-only investment loan rates will rise by 0.5 per cent to 4.94 per cent.
Three-year principal and interest investment loan rates will rise by 0.25 per cent 4.69 per cent.
CBA raised rates for interest-only loans to 5.94 percent in March.
Homebuyers also faced increased fixed interest rates in December 2016.
The bank’s measures follow an increased crackdown by the banking regulator, the Australian Prudential and Regulation Authority, to limit interest-only loans.
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j.ballantyne1990-6AQqhLzZaK

Commonwealth Bank increases interest rates for home owners and investors 

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Interest-only loans account for a sizeable number of total housing credit, according to the RBA’s latest Financial Stability Review 2017.
Interest-only (IO) loans account for a sizeable and growing share of total housing credit in Australia, now representing around 23 per cent of owner-occupier lending and 64 per cent of investor lending (Graph B1)
<a href="https://www.propertyobserver.com.au/images/2017/04/19/Graph%20B1.jpg" target="_blank">Click to enlarge</a>
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/04/19/Graph%20B1.jpg" alt="">
IO lending has the potential to increase households’ vulnerability in part due to the higher average level of indebtedness over the life of an IO loan compared with a regular principal-and-interest (P&amp;I) loan.
Measures to address some risks associated with IO lending practices were among those taken in late 2014 by the Australian Prudential Regulation Authority (APRA) and the Australian Securities and Investments Commission (ASIC), in conjunction with the Council of Financial Regulators, to reinforce sound housing lending practices.
While the share of IO loans in total lending approvals subsequently declined, IO loans have since started to rise again, especially for investors, which has again attracted regulator attention.
In March 2017, APRA announced new measures requiring authorised deposit-taking institutions (ADIs) to limit new IO lending to 30 per cent of total new residential mortgage lending and, within that, to tightly manage new IO loans extended at high loan-to-valuation ratios (LVRs).
This box outlines in more detail recent trends in IO lending and the nature of the potential risks that can arise from this type of lending.
For P&amp;I loans, the balance of the loan must be paid down over the entire term of the loan. In contrast, for IO loans repayments of principal are not required during the IO period, which is typically the first five to ten years of the loan.
Instead, scheduled principal repayments start at the end of the IO period, with the balance of the loan then paid off over the residual loan term.
As a consequence, for a typical 30-year P&amp;I loan of $400 000 with an interest rate of 4 per cent, borrowers would be ahead on principal repayments by around $38 000, or about 10 per cent of the initial balance, after five years compared with an IO loan (Graph B2).
<a href="https://www.propertyobserver.com.au/images/2017/04/19/Graph%20B2.jpg" target="_blank">Click to enlarge</a>
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/04/19/Graph%20B2.jpg" width="700" height="425">
Further, because the scheduled balance on an IO loan is always higher than on a comparable P&amp;I loan, IO loans incur a greater interest cost over the term of the loan (around 9 per cent extra in the previous example).
An IO loan can potentially also be refinanced at the end of the IO period into another IO loan, prolonging the period before scheduled principal repayments start.
Both investors and owner-occupier borrowers make extensive use of IO lending for a range of reasons.
Housing investors make the most use of IO loans.
Since interest payments on investment loans are tax deductible, the incentive to pay down a loan’s principal is reduced.
IO loans also enable investors to maintain a higher level of leverage and so magnify potential gains or losses if housing prices rise or fall.
As noted earlier, the share of owner-occupier lending that is IO has also risen noticeably over time.
This has been due to increasing numbers of owner-occupiers using IO loans and the increasing average sizes of IO loans (relative to P&amp;I loans).
Another reason borrowers may prefer IO loans to P&amp;I loans is because they can offer greater repayment flexibility.
Borrowers with lumpy income or those wanting to build buffers or save for planned expenditures, such as renovations, can use IO loans with an offset or redraw facility to minimise the effective interest costs over the period of the loan while still ensuring funds are readily available for other uses.
In particular, offset accounts and redraw facilities allow borrowers to effectively amortise loan balances during the IO period and so reduce (or eliminate) the extra interest cost associated with the higher principal balance on IO loans compared with P&amp;I loans.
However, borrowers need to be disciplined in their repayment behaviour to receive these benefits; otherwise they may incur greater interest costs, and remain more indebted for longer.
IO loans are also routinely used for bridging finance and construction loans to minimise repayments for the short duration of these loans.
For some time regulators have highlighted the potential risks associated with IO compared with P&amp;I loans.
Because IO loans allow borrowers to remain more indebted for longer, there may be greater credit risks associated with such loans.
When loan balances stay high, there is an increased risk of borrowers falling into negative equity should housing prices decline.
Another risk is that borrowers may find it difficult to service higher required payments at the end of the IO period, which increases the chance of default.
For example, repayments on a $400 000 loan with a 4 per cent interest rate and a five-year IO period would typically increase by around 60 per cent at the end of the IO period.
While some borrowers may have planned to refinance into another IO loan at the end of the IO period, this may be difficult if circumstances have changed.
Borrowers who anticipate future price rises can use IO loans to maintain a higher level of leverage for a given servicing payment, thereby magnifying their returns from rising housing prices but also magnifying any losses.
More generally, at an aggregate level this behaviour could induce a more pronounced cycle in housing prices than would otherwise occur, amplifying the size of any subsequent downswing in housing prices.
In recognition of the higher risks associated with IO loans, some lenders have introduced premiums on advertised interest rates for IO loans.
For example, the four major banks have announced, on average, an 18 basis point premium for IO owner-occupier loans and a 15 basis point premium for IO investor loans (in addition to premiums for investor loans relative to owner-occupier loans).
Lenders’ practices in assessing the ability of borrowers to repay their loans are important to manage the systemic risks posed by IO lending.
These practices determine the maximum loan size that a borrower could sustainably repay out of their income.
In particular, APRA serviceability guidance for ADIs sets out prudent practices for IO loans, with the capacity to repay assessed at the higher repayment amount required when the IO period ends (known as the residual-term method).
Under this residual-term method, borrowers seeking IO loans receive a lower maximum loan size than would be available for an equivalent P&amp;I loan.
Nonetheless, prior to the 2014 measures, some lenders assessed serviceability based on lower hypothetical P&amp;I repayments calculated from the entire term of IO loans (including the IO period; known as the full-term method).
This approach risks borrowers being unable to meet their repayment obligations when the IO period ends and higher repayments commence.
This is potentially in breach of the National Consumer Credit Protection Act 2009, which requires that lenders make loans that consumers will be able to repay without undue hardship.
ASIC has found that around 40 per cent of loans reviewed in 2014 used the full-term approach; lenders have since undertaken to change their practices in order to meet their responsible lending obligations and APRA’s guidance.
There have also been some recent reports of borrowers applying for P&amp;I loans to maximise their borrowing capacity, and then switching soon after approval to an IO loan. APRA has recently issued guidance to address this behaviour.
Find the RBA's latest Financial Stability Review 2017 <a href="https://www.rba.gov.au" target="_blank">here</a>.
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Interest-only loans account for a sizeable housing credit portion: RBA

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National Australia Bank (NAB) has announced further changes for residential investor and owner-occupier borrowers.
The rate for NAB’s 1 Year Package Fixed Rate for Residential Investment Home Loan has risen to 4.29 percent p.a. for principal and interest repayments.
For the 1 Year Package Fixed Rate for Interest Only Residential Investment Home Loan, rates changed to 4.39 percent p.a.
Fixed rates for all other interest only owner occupier and interest only residential investment loans increased by 0.10 percent p.a. 
“We are operating within a dynamic financial, economic and regulatory environment, and it’s important that we regularly review our pricing and policy measures across all of our home loan products to ensure we continue to lend responsibly,” a spokesperson from NAB told Australian Broker.
The changes made to our fixed rates on Friday 7 April 2017 apply to new loan accounts only.
Throughout March and the beginning of April, the Mozo website saw a spate of interest rate hikes from 40 lenders, including all four of the big banks.
"Investors were hammered in this round of increases, with rates rising an average of 0.19% on principal and interest loans, and 0.23% on interest only," Steve Jovcevski at Mozo noted.
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NAB lifts fixed rates for new borrowers

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The amount of residential mortgages nationwide more than 30 days in arrears increased to 1.52 percent in November 2106 from 1.2 percent from November 2015, according to Moody's.
Mortgage delinquencies hit record highs in Western Australia, South Australia and the Northern Territory and increased nationwide over the year to November 2016.
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The report said the ACT had the lowest 30+ delinquency rate (0.91 percent) of any state or territory in Australia in November 2016.
"A high proportion of borrowers in the ACT are employed by the government, which offers more secure and stable employment compared with jobs in the private sector. The ACT accounts for just 2.12 percent of the total loans in the RMBS we rate," it said.
"30+ delinquency rates in the Northern Territory (2.23 percent) and South Australia (2.16 percent) also hit record highs in November 2016.
"Final demand in the Northern Territory contracted 3.8 percent over the year to December 2016, the weakest performance in the country behind Western Australia.
"South Australia's final demand increased 1.3 percent, below the 1.6 percent national average.
"The populations in the Northern Territory and South Australia are both relatively small, and mortgages from this territory and state account for just 0.68% and 4.72 percent of the loans in the RMBS portfolio."
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jonathanchancellor-7SQnKwU6yx

Mortgage delinquencies hit record highs in Western Australia, South Australia and Northern Territory: Moody's

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The chief of the Australian prudential regulator has said its recent measures to restrict interest-only loans by banks was in response to heightened risks from the hot property market and to ensure that banks maintain adequate capital.
APRA chairman Wayne Byres’ remarks came during the keynote address at the AFR Banking &amp; Wealth Summit 2017, and follow RBA Governor Philip Lowe's speech on Tuesday night when he expressed concern at the high proportion of interest-only loans and the taxation framework for property investors that has contributed to high home prices.
"Put simply, the capital adequacy framework needs to address the concentration in housing lending that has built up in the banking system over time: if we are going to put an increasing number of eggs into a single basket, we'd better make sure that basket is a (unquestionably) strong one,” Byres said.
He said the APRA will issue an information paper around the middle of the year, "which will set out the extent of further strengthening required, and the timeframe over which that can be achieved in an orderly manner”.
While it was not APRA's mandate to determine home prices, it had to act in response to market conditions, Byres said.
“Our role in the current environment is to promote a higher-than-normal degree of prudence – definitely by lenders and, ideally, also borrowers – in both credit decisions and balance sheet strength. On this occasion, we have focussed on interest-only lending to complement our earlier measures. 
Byres said that housing lending risks and bank capital adequacy are not independent issues.
“Beyond the recently-announced tactical responses to current conditions in the housing market, making sure the system is on a sound footing for the longer term is even more important."
He reiterated the pro-active stance of the regulator, saying it “can and will do more (or less) as conditions evolve".
Outlining the recent flurry of regulatory action, Byres noted that while measures such as the annual cap on investor lending growth of 10 percent and restrictions on interest-only loans have had and will continue to have a positive impact, at the same time the risks   haven’t moderated:
<ul>
<li>house prices remain high;</li>
<li>household income growth remains subdued;</li>
<li>the already high ratio of household debt to income has got higher;</li>
<li>the already low official cash rate has got lower (although not all of this reduction has flowed to borrowers, particularly investors - Chart 2); and </li>
<li>competitive pressures haven’t diminished.</li>
</ul>
He concluded by saying that APRA will be looking at many components of the capital adequacy framework, but "given its position as the dominant asset on the balance sheet of the banking system, the adequacy of capital requirements for housing-related risks will be a critical part of that assessment". 
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APRA chair says latest lending curbs to ensure banks have adequate capital

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ASIC has announced a targeted industry surveillance to examine whether lenders and mortgage brokers are inappropriately recommending more expensive interest-only loans.
With many lenders, including major lenders, charging higher interest rates for interest-only loans compared with principal-and-interest loans, lenders and brokers must ensure that consumers are not provided with unsuitable interest-only loans.　
ASIC announced that eight major lenders will provide remediation to consumers who suffer financial difficulty as a result of shortcomings in past lending practices. 
ASIC will shortly commence a surveillance to identify lenders and mortgage brokers who are recommending high numbers of more expensive interest-only loans.
Data will be gathered using ASIC's compulsory information-gathering powers from large banks, other banks, mutual banks and non-bank lenders. 　
In an environment where many interest-only loans are now clearly more expensive than principal-and-interest loans, lenders and mortgage brokers must carefully consider the implications of providing borrowers with interest-only loans. While interest-only loans may be a reasonable option for some borrowers, for the vast majority of owner-occupiers in particular, an interest-only loan will not make sense.　
In 2015, ASIC conducted a review of how lenders provide interest-only home loans. ASIC found that lenders were not properly inquiring into a consumer's actual living expenses when assessing their capacity to make repayments. ASIC's review led to industry-wide improvements by lenders: see 15-220MR Lenders to improve standards following interest-only loan review.　
As part of today's announcement, eight lenders examined by ASIC have improved their practices for enquiring about expenses to determine the consumer's financial situation and capacity to make repayments. Rather than obtaining a single monthly living expense figure and then relying on a benchmark figure to assess suitability, borrowers' actual figures for different categories of living expenses (e.g. food, transport, insurance, entertainment) will now be obtained. This will provide lenders with a better understanding of consumers' expenses. 　
In addition to typical hardship processes, lenders will individually review cases where consumers suffer financial difficulty in repaying their home loans, and determine whether they have been impacted by shortcomings in past lending practices. Where appropriate, consumers will be provided with tailored remediation, which may include refunds of fees or interest. 　
As interest rates are currently at record lows, and were falling in the lead up to 2015 and during 2016, ASIC does not expect lenders to identify high numbers of consumers who are now experiencing financial difficulty due to past lending decisions. Nevertheless, these additional actions will ensure that consumers are not disadvantaged.　
To ensure that these remediation programs are operating effectively, ASIC is requiring lenders to audit their processes. 　
ASIC Deputy Chairman Peter Kell said, 'Home loans are the biggest financial commitment most people will ever make. In assessing whether borrowers can meet loan repayments without substantial hardship in the short and longer term, it is important that lenders can collect and rely on information which provides an accurate view of the consumer's financial situation. This is especially the case when interest rates are at record low levels'. 　
'Lenders and mortgage brokers must also ensure that consumers are being provided with the home loan product that meets their needs. Lenders and mortgage brokers need to think twice before recommending that a consumer obtain a more expensive interest-only loan'.
In 2015, ASIC reviewed interest-only loans provided by 11 home lenders, and issued REP 445 Review of interest-only home loans (Refer:REP 445) in 2015, which made a number of recommendations for home lenders to comply with their responsible lending obligations (Refer:15-297MR).　
In REP 445, ASIC gave guidance on how lenders can make proper inquiries into a borrower's actual expenses. 　
ASIC's monitoring of lenders’ home lending practices continues. ASIC will carry out further reviews to ensure that industry standards are improved where necessary. ASIC will also take enforcement action as appropriate.　
Any consumer with concerns about their ability to make home loan repayments should contact their lender in the first instance. Consumers can also access free external dispute resolution, through either the Financial Ombudsman Service (FOS) or Credit and Investments Ombudsman (CIO).　
The eight lenders are: 　
<ul>
<li>Australia and New Zealand Banking Group Limited　</li>
<li>Bendigo and Adelaide Bank Limited　</li>
<li>Commonwealth Bank of Australia 　</li>
<li>Firstmac Limited　</li>
<li>ING Bank (Australia) Limited 　</li>
<li>Macquarie Bank Limited　</li>
<li>National Australia Bank Limited　</li>
<li>Pepper Group Limited.</li>
</ul>
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ASIC look at lending of eight major lenders

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Westpac chief executive Brian Hartzer has rejected speculation that there was a “housing bubble” while admitting that the market was stretched in some areas.
The CEO of the country’s second-largest bank repeated the same view he expressed before a parliamentary committee in March in an interview with The Weekend Australian ahead of the bank’s 200th anniversary.
“I would draw the distinction between a speculative bubble in prices and prices beyond what fundamentals would justify," Hartzer told the parliamentary committee.
He described the property market as “certainly complex”, with wide variations across regions, he told the newspaper. “Western Australia and Queensland are obviously having real challenges and we have some very unusual dynamics going on in the Sydney and Melbourne real estate markets.”
Hartzer said the bank did not believe there was a property bubble “in terms of people speculating on the value of properties going up and using leverage to do it”.
But he said high housing prices was more because of supply constraints than ­excessive demand, noting that “some of the fundamentals around value are looking pretty stretched in some parts of the market”. 
Westpac expects that supply issues could be solved by working with developers and state and local governments, which would reduce the pressure on the housing market and also lower “risk” over time.
Westpac recently said it was not worried by the latest note from the Australian Prudential Regulation Authority to tighten requirements for investor and interest-only loans as the bank had already taken action in the interest-only lending area.
“We have been clear in our communications around wanting an interest rate differential for ­interest-only loans to encourage people to move to principal and interest loans,” he said.
The bank recently raised variable home loan rate for owner occupiers by 0.08 percent to 5.49 percent per annum for customers with interest only loans and for investors with interest-only loans, by 0.28 percent to 5.96 percent per annum. 
Hartzer said the bank was already well below APRA’s 10 percent cap on investor lending, with its lending for investor loans at 5.9 percent of its total mortgage book at the time of its full-year ­results at the end of September last year.
He said the bank was celebrating its 200th anniversary at a time when the political system was “finely balanced” with the banks having become a “pretty convenient target” for criticism, including an opposition promising to hold a royal commission into the banking industry.
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Westpac CEO Hartzer says ‘no bubble’ in housing, but market stretched

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The level of delinquent housing loans for prime residential mortgage-backed securities increased 1.29 percent in January from December's 1.15 percent, according to S&amp;P Global Ratings.
The category for mortgages 31-60 days in arrears showed the largest increase.
The report said the magnitude of the month-on-month increase in January 2017 was higher than in previous months.
"While some of the increase is due to a decline in outstanding loan balances, the category for mortgages 31-60 days in arrears showed the largest increase," the report found.
"This suggests more borrowers have fallen behind on their loan repayments for the first time.
"The major bank and regional bank sectors recorded larger increases in borrowers who are 31-60 days behind on their mortgage repayments.
"All originators except nonbank financial institutions recorded an increase in arrears in January compared with the previous month.
"Despite the increase, arrears levels in January remained close to long-term averages."
"Mortgage arrears rose in every state and territory in January from the previous month.
"Among the states, South Australia recorded the largest increase in arrears, rising to 1.81 percent from 1.53 percent in December, Home loan arrears in Western Australia rose to 2.33 percent in January from 2.10 percent in December.
"Arrears rose month on month in January to 1.03 percent in New South Wales and 1.18 percent in Victoria."
The report can be found at <a href="https://www.sfsurveillance.com.au/" target="_blank">https://www.sfsurveillance.com.au</a>.
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Home loan delinquencies rise in January

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Blaming booming housing market conditions and also concerns that APRA will further tighten lending standards, the Commonwealth Bank and St George have joined NAB and Westpac in another out-of-cycle increase in mortgage rates for investment and owner-occupier loans.
CBA has raised the standard variable rate on interest-only owner-occupier loans by 25 basis points to 5.47 percent, while principal and interest loans will edge up by 3 basis points.
CBA, which has already tightened investor lending requirements, made the most aggressive push on interest-only investor loans, raising them up by 26 basis points to 5.94 percent.
Late on Friday Westpac-owned St George Bank announced it planned to follow suit with the big four banks and raise its rates.
St George said property investors would see their home loan rates rise by 23 basis points while investors with interest-only loans would see their rates increase by nearly one-third of a percentage point.
Rates for owner-occupiers with interest-only mortgages would go up by eight basis points.
ANZ also raised rates on Friday.
"These changes reflect a need to closely manage our regulatory obligations, our portfolio risk and the competitive environment," said ANZ's group executive for Australia, Fred Ohlsson.
The bank's moves follows similar action from both Westpac and NAB after concerns were again raised by the banking regulator APRA about the need to rein in speculative property lending.
NAB raised its standard variable rate by 7 basis points to 5.32 percent, while investor loans jumped 25 basis points to 5.8 percent.
Westpac moved a more modest 3 basis points on its standard variable loan and 23 basis points on investor loans.
"Investors have been slapped with the biggest rate hikes so far amid growing speculation that APRA will further tighten investor lending standards in another attempt to cool down unsustainable housing prices in Sydney and Melbourne," Mozo director Kirsty Lamont said. 
Commonwealth Bank was among the nation’s banks to hit investors with surprise interest rate hikes made independently of any move in the Reserve bank’s official interest rate.
Some analysts argue rate hikes are piling more risk on to a system.
“There is clear evidence that the macro conditions for Australian house prices are deteriorating,” CLSA analyst Brian Johnson told The Australian.
“This change in sentiment is particularly worrisome, given the extent of Australian housing investors who are willing to tolerate a substantial post-tax negative carry on home loans in anticipation of a future gain,” he said.
“The expectation that house prices are no longer rising in itself could trigger correlated selling from this negative cash flow cohort.”
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