Abadeen has released the whole-floor penthouse crowning its recently completed <a href="https://www.apartments.com.au/buildings/park-residences-cremorne-2-sutherland-street-cremorne-nsw-2090">Park Residences</a> development in Cremorne, bringing the near-300 sqm residence to market for the first time.

Occupying the entire top floor of the boutique Lower North Shore development, the penthouse includes 221 sqm of internal living and a 74 sqm wraparound terrace, with a prized north-facing aspect taking in views across Middle Harbour.

The residence has been completed and fully furnished following a collaboration between Abadeen Executive Chairman Justin Brown and internationally recognised interior designer Jack Freeman, Founder and Managing Director of FREEMAN &amp; CO.

<a href="https://www.apartments.com.au/developers/abadeen">Abadeen</a> and Freeman approached the penthouse as a finished home, sourcing furniture, artwork, lighting and objects from Australia and overseas.

[smartcode_project:default project_id=114246 project_image_fid=378718]

Pieces from Parisian design house Pierre Augustin Rose sit alongside contemporary artworks and bespoke lighting, with Freeman drawing on recent visits to PAD Paris and Salone del Mobile Milano for the final collection.

Brown said the aim was to create a penthouse that felt more like a large-scale private home than a traditional apartment.

"The experience begins the moment the lift doors open. You're welcomed into an elegant dining room before the home opens into an extraordinary living space framed by sun-drenched harbour views.

"Every time someone walks through the front door they pause. It's not just the view, it's the incredible sense of space, the warmth created by the northern sunlight that fills the interiors, and the way every room connects so effortlessly.

"It has all the proportions of a luxury home, while delivering the effortless lifestyle and personalised experience of living in a world-class six-star hotel, combined with the simplicity and convenience of apartment living."

[smartcode_project:default project_id=114246 project_image_fid=378713]

A secure lift provides exclusive access to the penthouse level, opening to a dedicated arrival foyer and dining area before the residence expands into its main living and entertaining spaces.

Floor-to-ceiling glazing runs across the northern side of the home, connecting the interiors with the terrace and Middle Harbour outlook.

The penthouse also features a fireplace and substantial chef's kitchen, while the wraparound terrace has been designed to accommodate both everyday outdoor living and larger-scale entertaining.

[smartcode_project:default project_id=114246 project_image_fid=378720]

Freeman said the interiors had been deliberately kept restrained to complement the scale, natural light and outlook already established by the architecture.

"The penthouse is a serene study in quiet luxury," Freeman said.

"The interior pairs soft, sculptural forms with warm timber, pale stone and a restrained neutral palette. Curated artwork and metallic accents add depth, while abundant natural light creates a calm, effortlessly refined atmosphere. In my world, less is always more."

Freeman said the approach was centred around collecting individual pieces rather than simply decorating the apartment.

"Every material, every object and every piece of furniture has been curated with intention. I am a true believer in collecting versus decorating.

"The architecture already provided extraordinary natural light, remarkable volume and an uninterrupted connection to Middle Harbour. Our role was to complement those qualities with unique one-of-a-kind pieces of fine art and collectible design sourced from recent travels around the world."

[smartcode_project:default project_id=114246 project_image_fid=378694]

Among the collection are solid bronze sculptures by Lorenzo Quinn, alongside a curated crystalware collection and pieces sourced from international design fairs.

Park Residences sits opposite Cammeray Golf Club, Cammeray Croquet Club and Grand Slam Tennis Cammeray, around 300 metres from Neutral Bay Village and its established collection of restaurants, cafés and retail.

Brown said the combination of a whole-floor floorplan, northern aspect and proximity to Neutral Bay was becoming increasingly difficult to find on the Lower North Shore.

"Completed whole-floor penthouses with a sun-drenched north-facing aspect and sweeping Middle Harbour views are exceptionally rare," Brown said.

"Add a quiet position opposite golf, croquet and tennis facilities, a level walk to Neutral Bay Village and only minutes to the CBD, and you have a lifestyle that's incredibly difficult to replicate.

"This is a home that offers the privacy and generosity of a luxury residence together with the convenience of one of Sydney's best-connected harbourside locations."

The penthouse will be exclusively marketed by SRM Residential.

[smartcode_project_cta:default project_id=114246]

Joel Robinson

Abadeen unveils penthouse at Park Residences in Cremorne

New Brisbane developer Dalcott has unveiled Marrone, the first of three residential projects it is planning in and around Browning Street in South Brisbane.

<a href="https://www.apartments.com.au/new-apartments/marrone-south-brisbane-39-browning-street-south-brisbane-qld-4101">Marrone</a> will comprise 97 predominantly two- and three-bedroom apartments, with larger residences aimed squarely at the owner-occupier market.

The project will sit in a quiet pocket of South Brisbane between South Bank and West End, close to the restaurants, cultural attractions and riverfront amenity that have driven the suburb's continued transformation.

Dalcott is targeting buyers looking for more space and amenity than has traditionally been offered in the inner-city apartment market, particularly downsizers and professionals wanting to remain close to the city.

[smartcode_project:default project_id=149951 project_image_fid=377072]

Resident facilities will be concentrated around an extensive rooftop amenity offering, including a swimming pool, spa, infrared sauna, warm and cold magnesium plunge pools, private lounge, dining room and outdoor entertaining areas.

Dalcott Managing Director Lachlan Cottee said South Brisbane's combination of lifestyle, connectivity and established character had been central to the approach to Marrone.

“South Brisbane offers a combination of lifestyle, connectivity and character that’s difficult to replicate elsewhere in Brisbane,” Cottee said.

“Our focus has been on creating homes that feel connected to that environment while providing the level of design, functionality and quality that today's owner-occupiers expect.”

The residences will feature an expressive material palette. Italian Calacatta Viola marble, known for its deep burgundy veining, will be paired with aged brass tapware, Chestnut engineered timber flooring and Tuscan Oak joinery.

<img alt="Marrone" data-entity-type="file" data-entity-uuid="b8d833da-3b30-496a-ae30-07bdff371b50" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-25%20at%2010.52.35%E2%80%AFAM.png?VersionId=P6DAgOfaQzIXljKKK5j3e5NhWtrHIu9G" />

Bathrooms will feature Nara Japanese ceramics and glass bricks, while clay, walnut and brass lighting will be used throughout the apartments.

Dalcott has appointed Realm Projects, led by Managing Director Shane Foley, to handle sales and marketing following previous sold-out collaborations between the groups.

Foley said the Brisbane apartment buyer had become increasingly focused on the quality of the home itself rather than simply securing an inner-city address.

“We expect to see strong demand from buyers who still want all the advantages of inner-city living but aren’t prepared to compromise on the quality of their home,” Foley said.

“Many will be downsizers looking to leave behind the maintenance of a traditional family home without giving up the space they enjoy, while others are likely to be professionals wanting a residence that reflects the way they live today.”

“Marrone responds directly to that demand, with generous floorplans, exceptional resident amenity and a location that places some of Brisbane’s best dining, entertainment and cultural attractions within walking distance.”

<img alt="Marrone" data-entity-type="file" data-entity-uuid="61f7b22f-899e-4c0f-940a-7d3ab1bfb93a" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-25%20at%2010.52.44%E2%80%AFAM.png?VersionId=PvN1JYxBgUpyCB7efKo52WGdSDs9nmim" />

Marrone will be the first project delivered as part of Dalcott's broader investment in the precinct.

It will be followed by La Terra, a boutique project comprising penthouse-style, single-level apartments on a northeast corner site with extensive resident amenity and city views.

Cottee said Marrone represented the first stage of the group's longer-term plans for the area.

Dalcott was established in 2025 by Lachlan Cottee and Ben Dalgliesh, combining development and construction capability under an integrated model and focusing on architecturally considered residential projects.

Marrone will initially be offered through a pre-release registration campaign ahead of its broader public launch.

Dalcott targets owner-occupiers with South Brisbane debut Marrone

Parnell Developments is the latest to seek significant uplift through the NSW Government's Housing Delivery Authority on a Strathfield site previously approved for a much smaller apartment development.

Parnell has sought approval for a 32-storey mixed use tower across&nbsp;<a href="https://www.apartments.com.au/new-apartments/7-lyons-street-strathfield-nsw-2135">3-7 Lyons Street and 18 Parnell Street</a>, a&nbsp;1,857 sqm site around 400 metres from Strathfield Station. The building would yield 160 apartments, 15 per cent of which will be dedicated affordable as per the government mandate for buildings seeking additional uplift.

Approved previously was a nine-storey building back in 2022 with just over 30 apartments. That approval came prior to the project being&nbsp;progressively reconsidered as planning policy shifted toward greater density around transport hubs.

<img alt="Strathfield" data-entity-type="file" data-entity-uuid="c5af5281-a643-4eb2-b8c4-0081b59c04c7" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-25%20at%209.16.48%E2%80%AFAM.png?VersionId=37bd3mI7rHNpThOV_75VO8xsGFwWOi1u" />

Turner has designed the latest building that would replace&nbsp;existing detached homes across the four lots.

The apartment mix comprises 22 one-bedroom apartments, 107 two-bedroom and two-bedroom-plus configurations, and 31 apartments with three or more bedrooms. The scheme also includes 203 car spaces across six basement levels and 58 bicycle spaces.

The proposal has been designed around a three-storey podium addressing Lyons Street, with the tower rising above and stepping toward its upper levels.

Turner said the podium was deliberately scaled to respond to the existing street, while the taller element has been designed as part of the emerging skyline anticipated around Strathfield Town Centre and the wider Homebush transport-oriented development precinct.

The Lyons Street frontage would have a more active, pedestrian-focused character, incorporating the commercial tenancy, landscaping and a brick-framed podium with an awning.

<img alt="Strathfield" data-entity-type="file" data-entity-uuid="14b20874-b8c3-4ac7-bc03-92be9a69fb78" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-25%20at%209.17.48%E2%80%AFAM.png?VersionId=av.9TxtqIRTC6v3PkSuu1rL9rreWoe2h" />

Parnell Street, which faces the railway corridor, has been given a different architectural treatment, with double-height breeze blocks, landscaping and communal areas used to soften the interface with the rail infrastructure.

The tower itself uses curved and recessed facade elements, with wave-like indentations across the northern elevation breaking the building into three vertical forms.

A palette of grey concrete, brick and breeze blocks is complemented by clay and terracotta accents, while the upper tower adopts a lighter expression through articulated slab edges, vertical fins and recessed glazing.

Residents would have access to 467 sqm of communal open space spread across three levels. The ground floor would accommodate the more active resident areas, including barbecue and group gathering spaces and an internal communal room capable of being used for working from home.

A more passive viewing deck is proposed at level three, overlooking the ground-level landscaping and neighbouring tennis courts, while a rooftop "sunset deck" at level 30 would provide another social and relaxation space.

<img alt="Parnell" data-entity-type="file" data-entity-uuid="c3dce401-a80f-4682-8471-4caa01180880" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-25%20at%209.17.34%E2%80%AFAM.png?VersionId=Xyo8JVqbOhSJXNy6Ih.1cHL.O6i0bGR." />

&nbsp;

&nbsp;

&nbsp;

Strathfield has been earmarked for substantial change through the Strathfield Town Centre planning work and the nearby Homebush TOD precinct.

Turner's report says the project has been designed to act as a transition between the existing low and mid-rise development surrounding the site and the taller built form expected to emerge across the town centre.

The proposal is being assessed as State Significant Development under the HDA pathway, alongside the concurrent request to amend the Burwood Local Environmental Plan.

First look: New apartment tower pitched for Strathfield Town Centre precinct

An $18 million penthouse has hit the market in Main Beach as construction tops out on La Mer, the $155 million apartment development rising just metres from the beach.

Spanning around 600 sqm across the top two levels of the 29-storey tower on Main Beach Parade, the four-bedroom penthouse is one of the latest eight-figure residences to test the upper end of the Gold Coast apartment market.

Its launch comes amid continued activity at the very top of the market, following the $30 million off-the-plan sale of a Burleigh Heads penthouse earlier this year, which surpassed the Gold Coast's previous $24 million apartment record set in 2023.

The <a href="https://www.apartments.com.au/new-apartments/la-mer-main-beach-3580-main-beach-parade-main-beach-qld-4217">La Mer penthouse</a> has been designed as a private residence in the sky, with 360-degree views spanning the ocean, Broadwater, hinterland and Gold Coast skyline.

[smartcode_project:default project_id=95606 project_image_fid=378731]

All four bedrooms have ensuites, while the ocean-facing master retreat occupies around half of the upper level and includes its own lounge, private balcony, two walk-in wardrobes and an oversized ensuite with a freestanding stone bath positioned to take in the views.

The residence also features a kitchen designed to accommodate a private chef, a 3.6-metre island bench, expansive butler's pantry, wine cellar and integrated bar.

[smartcode_project:default project_id=95606 project_image_fid=378732]

A rooftop pool and substantial outdoor entertaining area with its own kitchen sit above the residence, while a grand staircase connects the two internal levels. The penthouse also has its own express lift.

OTP Group Director James Elliott, who is marketing La Mer, said the penthouse was expected to appeal to high-net-worth buyers seeking either a permanent Main Beach residence or Gold Coast holiday home.

“The La Mer penthouse represents exceptional value, considering its quality design, size, privacy and location, not to mention the 360-degree views capturing the beach and Gold Coast Broadwater,” Elliott said.

“We’re anticipating interest from high-net-worth individuals and couples seeking a residence or holiday home in the sought-after village enclave of Main Beach, taking advantage of the unprecedented growth underway in the area and neighbouring The Spit.”

[smartcode_project:default project_id=95606 project_image_fid=378736]

La Mer is being developed by developer-builder ODUS and Nazero, in partnership with funder Metrics Credit Partners.

ODUS Director Byron Sakha said topping out the tower had provided the opportunity to release the project's most significant residence.

“We’ve worked with internationally-recognised studio Sici Design on the penthouse interiors, with a focus on ensuring it isn’t luxury for luxury’s sake. Every element has been thoughtfully designed to enhance quality of life for those who call it home,” Sakha said.

“The views are the hero of virtually every space, but we’ve given equal attention to the fittings and finishes, so every detail exudes elegance and refinement.”

Sici Design Founder and Director Maria Papadopoulos said the extensive views became an integral part of the interior design rather than simply something the residence was designed around.

“The views weren't something we designed around, they became part of the design itself, with the true luxury of La Mer in its feeling of peace, calm and wellbeing,” Papadopoulos said.

“Luxury isn't defined by how something looks, but how it makes you feel, and we believe a luxurious home should be beautiful to live in, not stressful to maintain.”

The interiors combine Austral Dream Dolomite natural stone and travertine with timber flooring and a restrained coastal palette.

[smartcode_project:default project_id=95606 project_image_fid=378734]

Designed by Plus Studio, La Mer is one of the more boutique additions to the rapidly changing Main Beach apartment market.

The tower comprises just 24 full-floor, three-bedroom plus multipurpose room apartments below the two-level penthouse, giving the project a considerably lower density than many of the larger towers being developed across the Gold Coast.

Residents will have access to a pool and spa, gym, sauna, barbecue facilities, private sun lounges, yoga lawn and outdoor beach shower.

The penthouse has been released as part of the final collection of residences at La Mer, with remaining apartments priced from $4.3 million.

Construction is expected to complete later this year, with a fully furnished display apartment now open on level four.

[smartcode_project_cta:default project_id=95606]

ODUS releases $18 million penthouse crowning La Mer Main Beach

<a href="https://www.apartments.com.au/developers/far-east-consortium">Far East Consortium</a> is preparing to commence construction on <a href="https://www.apartments.com.au/new-apartments/640-bourke-street-melbourne-640-bourke-street-melbourne-vic-3000">640 Bourke Street</a> this October, marking the next milestone for the Melbourne CBD development and its higher-end Eliza Collection.

Spanning levels 44 to 68 of the 68-storey <a href="https://www.apartments.com.au/architects/rothelowman">Rothelowman</a>-designed tower, the Eliza Collection has been conceived as a lower-density offering within the broader development, with only five apartments on each floor, dedicated lift access and a collection of resident spaces reserved exclusively for Eliza Collection residents.

The Eliza Collection forms part of Far East Consortium's broader move toward larger-format residences at 640 Bourke Street, where the number of apartments was reduced from earlier plans as apartment sizes increased.

[smartcode_project:default project_id=509 project_image_fid=365685]

"What it's meant for 640 Bourke is we've actually reduced the number of apartments. We've increased the overall size of the apartments. We don't have any studios in here, and what that does for a project is it elevates it," Far East Consortium Director of Sales and Marketing Lauren Sheldon said.

Rothelowman Associate Jun Chang said the design process provided an opportunity to create more generous floorplans.

"We were given the opportunity to be more generous. The apartments became bigger and squarer than any other apartments which had been designed in the CBD before that."

[smartcode_project:default project_id=509 project_image_fid=368869]

That thinking carries through to the Eliza Collection, where the residences have been designed around the space and functionality associated with a larger home, but positioned high above the centre of Melbourne.

Kitchens are equipped with Gaggenau appliances, a butler's pantry, temperature-controlled wine cabinet and sculptural pendant lighting, while engineered timber flooring, stone and porcelain finishes and custom cabinetry feature throughout the broader interiors.

Privacy and security are another point of distinction. Eliza Collection residents have dedicated lift access, while 640 Bourke Street will provide concierge services and secure resident parking. Short-stay accommodation, including Airbnb, will not be permitted within the development.

[smartcode_project:default project_id=509 project_image_fid=365689]

Eliza Collection residents will also have exclusive access to selected amenity spaces across levels one and three of the restored Eliza Tinsley building. These include the Salon with grand piano, an art therapy room, private dining rooms and treatment rooms.

They sit within more than 3,000 sqm of amenity planned across 640 Bourke Street, alongside facilities including a pool, gym, whisky lounge and further social and wellness spaces.

The Eliza Tinsley building itself is central to the wider project's identity. Rather than treating the existing Eliza Tinsley façade as a separate element, Rothelowman used it as a starting point for the architecture of the new tower, with the historic building to accommodate the project's gallery and lobby.

"It's a significant asset and wants to be celebrated and experienced by all residents every single time they go in and out of the building," Rothelowman Principal Stuart Marsland said.

[smartcode_project:default project_id=509 project_image_fid=368872]

The tower will rise behind the retained heritage building at 640 Bourke Street, placing residents within walking distance of Southern Cross Station, Flagstaff Gardens, Queen Victoria Market and the Docklands waterfront.

With construction scheduled to begin in October, Far East Consortium has established an onsite display gallery at 640 Bourke Street, including fully built apartments that allow the project's layouts, materials and finishes to be inspected at full scale.

A fully built Eliza Collection apartment is also available to view at the display suite by appointment ahead of the planned October construction commencement.

Eligible purchasers who buy before construction commences can secure the full available off-the-plan stamp duty savings, subject to eligibility and applicable conditions.

[smartcode_project_cta:default project_id=509]

Far East Consortium brings Eliza Collection to 640 Bourke Street ahead of October construction start

Home Loans

<html><body>
GUEST OBSERVER
With an RBA rate rise looming and big banks already hiking rates across fixed rate home loans, it seems the rock bottom rates of 2016 are now a thing of the past for property buyers.
All four big banks have now slammed home borrowers with rate rises in the past couple of weeks, joining another 14 lenders who have pushed up variable rates out of cycle this month alone. 
The big banks have a history of higher than average interest rates - so far, since 2009, all the big banks have increased rates by more than the RBA did two times each (except NAB, who did it once.) They also all held back a full RBA rate cut 7 times a piece (although ANZ only did it 6 times.)
There are a couple of reasons for these recent rate hikes - the excuse the banks have given is that cost of funding is getting higher, so loan rates need to increase as well. 
The likelihood of an RBA rate increase sometime next year is also a consideration, particularly for fixed rate offers, as banks factor that into current rates that they won’t be able to adjust for the next two years or more. So for the rest of this year at least, it seems rates will only be pushed higher.
Investors will have it particularly tough, with APRA breathing down the necks of lenders after investment loans spiked toward the end of 2016. CommBank, which grew its investment loan portfolio by 8.02 percent over the last 12 months, has already started tightening criteria for lending to investors by dropping LVRs and limiting refinancing loans.
In fact, <a href="https://mozo.com.au/" target="_blank">Mozo</a> data shows that the average big banks interest rate premium on variable rate investor loans has doubled in the last year.
So things are looking gloomy for borrowers hoping to get a foot on the property ladder with a low rate loan, especially since big bank loans now account for 85% of the investor loan market, and 81 percent of owner-occupier loans.
That means now, when record low rates seem to be squarely behind us, is the time for new borrowers to really do their research into what offer is going to work best for their budget, and for those already paying off a mortgage to re-evaluate their situation and decide if it’s worth refinancing to lock in a good deal while they’re still around.
STEVE JOVCEVSKI is a property investment and home loan negotiator at <a href="https://mozo.com.au/" target="_blank">Mozo.com.au</a>.
</body></html>

jchancellor-FAypfDUnLy

The low rate mortgage party is over for property buyers: Mozo

<html><body>
ANZ bank has updated variable home loan and business loan interest rates with increases in variable interest rates for new investor and owner- occupier home loan customers who choose to repay interest-only from April 22.
The variable interest rate for property investors will increase by 0.25 percent/pa from 5.60 percent/pa to 5.85 percent/pa from 31 March.
Variable interest rates for the 80 percent of owner-occupier borrowers who repay principal and interest on their standard variable home loan remain unchanged at 5.25 percent/pa.-
Investor variable rate home loans (interest only) will increase by a further 0.11 percent/pa from 5.85 percent/pa to 5.96 percent/pa.
For business borrowers, business variable rate indices will increase by 0.08%pa.
ANZ Group Executive Australia Fred Ohlsson said we are pleased to be in a position to keep rates unchanged for the 80% of owner-occupier home borrowers who pay principal and interest on their loan.
“This is a clear signal that we are open for business for Australians either looking to buy a home or looking for a better deal.
“The changes we are making in home lending affect investors and borrowers who only repay interest on their loan. These changes reflect a need to closely manage our regulatory obligations, our portfolio risk and the competitive environment.
"We recognise the day-to-day challenges that home-owners face with their house-hold budgets. We believe this is a balanced decision that reflects the range of regulatory and risk factors, and the pressures on family budgets.
“This is why we are providing our customers with interest-only home loans additional notice and the option to switch to repaying principal and interest to take advantage of the lower rate."
Westpac raised its home loan interest rates soon after NAB announced similar hikes.
</body></html>

jonathanchancellor-7SQnKwU6yx

ANZ lifts interest rates for some customers

<html><body>
The cash rate may have been held for seven consecutive months, but this hasn’t prevented lenders from lifting mortgage rates independently of the Reserve Bank.
There have been 11 lenders including two of the big four banks announcing rate hikes this month, according to finder.com.au, Australia’s most visited comparison website.
A new analysis by finder.com.au reveals 11 lenders have declared rate rises for both variable and fixed home loans in March 2017.
Of the big four banks, ANZ, NAB and Westpac have announced rate changes this year.
While ANZ and NAB announced changes earlier this year, Westpac soon followed suit announcing rate changes just this month.
In March alone, NAB announced further changes with increases to its interest rates from 0.07 percent - 0.25 percent for variable rate home loans, while Westpac also raised its variable rates from 0.03 percent - 0.28 percent.
Despite increasing its variable rate, NAB implemented a new incentive for first home buyers by introducing its lowest home loan fixed rate of 2 years at 3.69 percent per annum.
Westpac is also providing a grace period until the 17th June by waiving the switching fee for interest-only home loans changing to principal and interest repayments. 
The average rate rise for owner-occupier loans in March 2017 across the big four that have adjusted rates (including NAB and Westpac) is 0.05 percent.
Taking this into account, a borrower with an average home loan of $357,200 with an average variable rate of 4.75 percent would need to pay an extra $11 per month if rates rose to 4.80 percent.
This amounts to $3,881 over 30 years.
Graham Cooke, Insights Manager at finder.com.au, says whether it’s to increase flexibility or boost profit margins, banks are under fire to manage stakeholder expectations while also dealing with the risk of an overheated property market.
For investor loans, more stringent regulations imposed by the Australian Prudential Regulation Authority (APRA) to curb investor lending may be prompting banks to up interest rates.
"Given recent rate increases, both owner occupiers and investors need to prepare for higher loan costs.
"It’s sensible to factor in 2-3 percent on top of your current mortgage repayments so you can cope with unexpected rate rises,” he says.
Variable home loan rate changes for March 2017
<table border="1" cellspacing="0" cellpadding="0"><tbody>
<tr>
<td valign="top" width="67">
Lender
</td>
<td valign="top" width="81">
Change
</td>
<td valign="top" width="166">
Loans affected
 
</td>
<td valign="top" width="78">
Date effective
</td>
</tr>
<tr>
<td width="56">
NAB
</td>
<td width="70">
Up 0.07% - 0.25%
</td>
<td width="156">
Variable Rate Home Loans (owner occupier + investor)
</td>
<td width="68">
24 Mar
</td>
</tr>
<tr>
<td width="56">
Westpac
</td>
<td width="70">
Up 0.03% - 0.28%
</td>
<td width="156">
Variable Rate Home Loans (owner occupier + investor and principal &amp; interest + interest only)
</td>
<td width="68">
24 Mar
</td>
</tr>
<tr>
<td width="56">
Bankwest
</td>
<td width="70">
Up 0.15%
</td>
<td width="156">
Complete Home Loan Package - Variable (investor), Premium Select Home Loan - Variable (investor) Equaliser Home Loan - Variable (investor)
</td>
<td width="68">
15 Mar
</td>
</tr>
<tr>
<td width="56">
Beyond Bank
</td>
<td width="70">
Up 0.10%
</td>
<td width="156">
Low Rate Special Home Loan - Variable (owner occupier)
</td>
<td width="68">
7 Mar
</td>
</tr>
<tr>
<td width="56">
Heritage Bank
</td>
<td width="70">
Up 0.10% - 0.11%
</td>
<td width="156">
Advantage Package Home Loan - Variable (owner occupier)
</td>
<td width="68">
14 Mar
</td>
</tr>
<tr>
<td width="56">
Illawarra Credit Union
</td>
<td width="70">
Up 0.05% - 0.15%
</td>
<td width="156">
Variable Lite &amp; Variable Home Loans (owner occupier)
</td>
<td width="68">
1 Mar
</td>
</tr>
<tr>
<td width="56">
IMB
</td>
<td width="70">
Up 0.05%
</td>
<td width="156">
Accelerator Home Loan - Variable (owner occupier)
</td>
<td width="68">
13 Mar
</td>
</tr>
<tr>
<td width="56">
Macquarie Bank
</td>
<td width="70">
Up to 0.05%
</td>
<td width="156">
Basic Home Loan - Variable LVR &lt;=80%, LVR &lt;=90% (owner occupier + investor), Offset Package Home Loan - Variable LVR &lt;=80%, LVR &lt;=90% (owner occupier + investor)
</td>
<td width="68">
6 Mar
</td>
</tr>
<tr>
<td width="56">
Macquarie Bank
</td>
<td width="70">
Down 0.05 - 0.10%
</td>
<td width="156">
Basic Home Loan - Variable LVR &lt;=90% (owner occupier), Offset Package Home Loan - Variable LVR &lt;=90% (owner occupier)
</td>
<td width="68">
6 Mar
</td>
</tr>
<tr>
<td width="56">
MOVE
</td>
<td width="70">
Up 0.30%
</td>
<td width="156">
Wealth Builder - Variable (investor), Flexi Home Credit - Variable
</td>
<td width="68">
1 Mar
</td>
</tr>
<tr>
<td width="56">
People's Choice Credit Union
</td>
<td width="70">
Up 0.19%
</td>
<td width="156">
Basic Home Loan - Variable (owner occupier)
</td>
<td width="68">
15 Mar
</td>
</tr>
<tr>
<td width="56">
Western City
</td>
<td width="70">
Up 0.05% - 0.15%
</td>
<td width="156">
Variable Lite &amp; Variable Home Loans (owner occupier)
</td>
<td width="68">
1 Mar
</td>
</tr>
</tbody></table>
 
Fixed home loan rate changes for March 2017
<table style="width: 392px; height: 476px;" border="1" cellspacing="0" cellpadding="0"><tbody>
<tr>
<td valign="top" width="67">
Lender
</td>
<td valign="top" width="81">
Change
</td>
<td valign="top" width="166">
Loans affected
 
</td>
<td valign="top" width="79">
Date effective
</td>
</tr>
<tr>
<td width="56">
Bankwest
</td>
<td width="70">
Up 0.15%
</td>
<td width="156">
Complete Home Loan Package - 2, 3, 4, 5 Years Fixed (investor), Fixed Rate Home Loan - 2, 3, 4, 5 Years Fixed (investor)
</td>
<td width="68">
15 Mar
</td>
</tr>
<tr>
<td width="56">
Beyond Bank
</td>
<td width="70">
Up 0.05% - 0.10%
</td>
<td width="156">
Fixed Rate Home Loan - 1, 2, 3, 4, 5 Years Fixed (owner occupier), Total Home Loan Package - 1, 2, 3, 4, 5 Years Fixed (owner occupier)
</td>
<td width="68">
7 Mar
</td>
</tr>
<tr>
<td width="56">
Heritage Bank
</td>
<td width="70">
Up 0.10%
</td>
<td width="156">
Fixed Rate Home Loan - 1,2,3 (owner occupier + investor), Advantage Package Fixed Rate Home Loan - 1,2,3 (owner occupier + investor)
</td>
<td width="68">
9 Mar
</td>
</tr>
<tr>
<td width="56">
IMB
</td>
<td width="70">
Up 0.10%
</td>
<td width="156">
Platinum Package - 2 &amp; 3 Years Fixed rate (owner occupier + investor), Fixed Rate Home Loan - 2 &amp; 3 Years Fixed Rate (owner occupier + investor)
</td>
<td width="68">
6 Mar
</td>
</tr>
<tr>
<td width="56">
MOVE
</td>
<td width="70">
Down 0.06%
</td>
<td width="156">
Lockit Home Loan - 1 Year Fixed rate
</td>
<td width="68">
1 Mar
</td>
</tr>
<tr>
<td width="56">
People's Choice Credit Union
</td>
<td width="70">
Up 0.05%
</td>
<td width="156">
Home Loan Package - 3 Years Fixed (owner occupier)
</td>
<td width="68">
15 Mar
</td>
</tr>
</tbody></table>
</body></html>

j.ballantyne1990-6AQqhLzZaK

Out-of-cycle rate hikes shake up the Australian home loan market

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Home loan lender ME has launched its new Scroogify tool to capture the growing refinance market.
The bank says the tool will help it maintain strong home loan growth after increasing its lending book 1.6 times the market average in the six months to 31 December 2017.
ME home loan settlements hit $3.2 billion for the six months to 31 December 2017, up 54 percent compared to the previous corresponding period.
Head of Home Loans, Patrick Nolan, said industry refinance levels had been steadily increasing as competition between lenders intensifies and borrowers become increasingly aware of the new deals on offer.
However, a large group of borrowers are still disinclined to refinance due to the perceived difficulties in comparing and because they underestimate the amount they can save, despite the fact the majority are with a major bank and are probably paying too much.
"We built Scroogify to be a new type of calculator that in a few seconds quantifies just how much a borrower would save over the life of their loan, in both time and money, if they switched their existing home loan to ME.
"We think Scroogify will shock borrowers out of apathy into action.”
Nolan said ME will support the tool with a major marketing campaign including TV, radio, online, public relations and social media, running nationally throughout 2017.
It will include a nationwide social media campaign to find ‘Australia’s Biggest Scrooge’.
“We reckon everyone has an inner scrooge just waiting to come out. The marketing campaign is designed to encourage borrowers to embrace their inner scrooge and unleash it on their home loan.
Scroogify is available at <a href="https://www.scroogify.com.au" target="_blank">scroogify.com.au</a>
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ME chases refinancers with anti-apathy Scroogify calculator

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Even if the Reserve Bank of Australia keeps the cash rate steady, a JPMorgan Mortgage Industry Report has warned young property investors who are "materially dependent" on income generated from renting their property could face higher rates in the coming years.
It will occur as banks respond to global regulatory changes that will require them to hold higher levels of capital against such loans.
The report published by JPMorgan says Basel 4 will require banks to hold up to five times the amount of capital against investor loans materially dependent on rental income to repay the loan.
It was speculated this could lead to interest rates for loans to investors with deposits of less than 20 per cent rising 3 percentage points, lifting from the present rate of about 4.5 per cent to 7.5 per cent.
The international Basel 4 reforms, which are expected to be finalised soon and adopted in Australia in the coming years, require banks to carry capital based on loan-to-value (LVR) ratios rather than the probability that a loan will default.
So far the definition of "materially dependency" has been left vague by the Basel committee. According to analysis by JPMorgan and Digital Finance Analytics, property investors have already been hit by higher interest rates as banks try to avoid running into investor loan growth caps of 10 per cent imposed by the prudential regulator in late 2014.Since mid 2015, investor and interest-only loans had increased an average of 65 basis points.
JPMorgan analyst Scott Manning said these increases were just the beginning.
"We think the repricing we have seen to date ... is purely a toe in the water, [with banks] testing the elasticity of the market [and] the response from brokers and politicians," he told The Australian Financial Review.
There is a lot more pricing differential to come through the market ... [and] we can definitely see the prospects for significant amounts of refinancing."
It is tipped ANZ Banking Group would be the biggest beneficiary among the major banks of Basel 4, because it has the lowest market share and slowest growth rate for investor lending. The report co-author Digital Finance Analytics' Martin North noted banks do not necessary capture all expenditures that households have.
"There is more work to be done to capture the cost of living in households.
"Even with a small rate rise, more than 50 per cent [of investors in this categories] will struggle if there is a small rise in rates say up to 3 percent."
North warned the Australian investor market was "growing way too quickly" despite the 10 percent growth rate cap imposed by APRA
.
<div class="cq-article-content-paras section">
 
</div>
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JP Morgan warn low deposit property investors on looming Basel 4 impacts 

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Mortgage customers’ satisfaction with the big four banks was in the negative and lower than non-mortgage customers, according to latest data from leading market research company Roy Morgan.
Despite some tentative signs of improvement in satisfaction among the big four’s mortgage customers in January, overall they remain well below the satisfaction levels of the smaller banks’ mortgage customers, according to Roy Morgan.
The research looked at the ‘Net Promoter Score’, that measures advocacy levels among mortgage customers.
All four — Commonwealth Bank, Westpac, ANZ and NAB —  showed improved satisfaction among their home-loan customers in January but only the ANZ improved over the same time last year.  
ING Direct tops on the list of satisfied mortgage customers (of the 10 largest banks) with 96.3 percent, followed by Bendigo Bank on 93.2 percent. These two remain well clear of the field, with the next best being Bankwest (85.9 percent) and Bank of Queensland (82.5 percent). 
Among the big four, CBA has the highest mortgage customer satisfaction at 79.7 percent while Westpac has the lowest  at 75.4 percent.
Overall, satisfaction level of the big four banks’ personal customers in the six months to January 2017 was 80.1 percent, up fractionally on 79.9 percent in December.
The best performer among the big four with regards to mortgage customer NPS was the CBA (minus 12.7), followed by ANZ (minus 13.8), Westpac (minus 20.4) and NAB (minus 20.7). 
<a href="https://www.propertyobserver.com.au/images/2017/03/15/NPSRoyMorgan.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/03/15/NPSRoyMorgan.png" alt="">
Bendigo Bank was the best performer when it came to NPS among the top 10 banks, scoring (plus 32.3). Banks with the highest mortgage customer satisfaction scores also had positive NPS scores for these customers, the research noted.
“Despite home loan rates having been low for a considerable time, it is somewhat surprising that mortgage customer satisfaction remains lower than that of other customers, who are likely to be adversely impacted by low deposit rates,” said Norman Morris, industry communications director at Roy Morgan Research.
“The smaller banks have shown that it’s possible to achieve much higher satisfaction levels among mortgage customers than those achieved by the majors, even though they’re operating in the same interest-rate environment.”
Roy Morgan says its extensive modelling goes deeper than just looking at recent events such as adverse publicity and interest-rate movements, which are generally short-term impact on satisfaction and advocacy levels, and the research firm relies on more than 50,000 interviews p.a covering all aspects of financial behaviour.
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prateek24-ezbwHMbNAk

Big four rated negatively by mortgage customers: Roy Morgan

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GUEST OBSERVER
Housing finance
Home loans: The number of loans (commitments) for budding home owners (owner-occupiers) rose by 0.5 percent in January, the third consecutive rise. But the increase was wholly due to a 5.0 percent lift in refinancing.
The value of loans (owner occupier and investment) rose by 1.5 percent in January. Owner-occupier loans fell by 0.2 percent but investment loans rose by 4.2 percent. Non-bank lending up: The number of loans by non-bank lenders rose by 4.7 percent in January after a 6.2 percent lift in December – the strongest back-to-back gain in 32 months.
What does it all mean?
There is a lot of information contained in the Housing Finance publication. Actually so much information that it can prove confusing. In the latest month, budding home owners (owner-occupiers) took out fewer loans to build homes or buy new or existing homes. There were more loan commitments in the month, but only because more people chose to refinance existing loans.
Refinancing had fallen for three straight months, so the lift in loans was from 16-month lows. The lift in refinancing may serve to boost the purchasing power of consumers, and thus support growth of the broader economy.
There were actually fewer loans taken out by those looking to build their dream homes. Loans to budding home builders have fallen for four of the last five months. But once investors are added in, construction loans are still healthy, up almost 10 percent on a year ago. If these commitments are actually drawn down, then more new dwelling projects will be started in coming months.
Home building does appear to have peaked but the lift in construction loans suggests a soft landing lies ahead.
Investors remain active in the housing market with the value of loans at 20-month highs. Investor loans are actually up 27.5 percent on a year ago, the fastest growth in 29 months.
The risk is that regulators may seek to apply further measures to slow down the pace of investor home loans.
Borrowers in many states are taking out smaller home loans than a year ago. That is despite home prices still generally rising and despite interest rates being lower than a year ago. The more conservative lending posture will encourage the Reserve Bank.
<a href="https://www.propertyobserver.com.au/images/2017/03/12/image003.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/03/12/image003.png" alt="">
<a href="https://www.propertyobserver.com.au/images/2017/03/13/Craig1.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/2017/03/13/Craig1.jpg" width="600" height="479">
 
<a href="https://www.propertyobserver.com.au/images/2017/03/13/Craig2.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/2017/03/13/Craig2.jpg" width="600" height="450">
What do the figures show?
Housing finance - number
The number of loans (commitments) for budding home owners (owner-occupiers) rose by 0.5 percent in January after rising 0.2 percent in December and rising by 1.4 per cent in November. Excluding the refinancing of dwellings, the number of loans was down by 1.7 percent.
 The number of new home loans was up by 1.9 percent on a year ago (excluding refinancing, up 4.6 percent).
Loans by owner-occupiers for the construction of homes fell by 1.4 percent in January. Loans to buy newly-erected dwellings fell by 2.3 percent.
Loans for the purchase of established dwellings (excluding refinancing) fell by 1.9 percent.
The number of refinancing transactions rose by 5.0 percent.
Lending across states/territories: NSW (+1.3 percent); Victoria (+1.6 percent); Queensland (+1.6 percent); South Australia (+4.4 percent), Western Australia (+0.3 percent); Tasmania (-2.5 percent); Northern Territory (-5.3 percent); ACT (+1.9 percent).
HOUSING FINANCE - VALUE
The value of new housing commitments (owner occupier and investment) rose by 1.5 percent in January – the fifth straight gain. Owner-occupier loans fell by 0.2 percent but investment loans rose by 4.2 percent.
The value of loans by owner-occupiers and investors to build new homes rose by 9.7 percent in January after falling by 10.2 percent in December and rising 15.4 percent in October. The value of loans stood at $3.04 billion, down from the record high of $3.32 billion in the year to March. 
HOUSING FINANCE – OTHER STATISTICS
The proportion of first-time buyers in the home loan market eased from 13.8 percent to 13.4 percent in January (long-term average 19.4 percent).
The proportion of fixed rate loans rose from 14.6 percent to a 9-month high of 15.2 percent in January. And the average home loan across Australia stood at $363,600 in January, down 3.2 percent in the month and down 0.4 percent on a year ago.
<a href="https://www.propertyobserver.com.au/images/2017/03/13/Craig3.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/2017/03/13/Craig3.jpg" width="600" height="450">
<a href="https://www.propertyobserver.com.au/images/2017/03/13/Craig4.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/2017/03/13/Craig4.jpg" width="600" height="450">
<a href="https://www.propertyobserver.com.au/images/2017/03/13/Craig5.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/2017/03/13/Craig5.jpg" width="600" height="450">
 
WHAT IS THE IMPORTANCE OF THE ECONOMIC DATA?
Housing Finance data is produced monthly by the Bureau of Statistics and shows commitments by lenders, such as banks, to provide finance for housing purposes. The lending figures relate to those looking to buy or build homes to live in as well as those seeking to buy or build homes for investment purposes. Generally people get their finance organised first, so the figures are regarded as a leading indicator on the housing market.
WHAT ARE THE IMPLICATIONS FOR INTEREST RATES AND INVESTORS?
Regulators will keep a close eye on home loan trends. The revival of investor lending could lead to fresh controls over new lending. But it is also worth pointing out that non-bank lenders seem to have been more active in the past two months which may provide complications in containing investor exuberance.
While investors are more active in the housing market, budding home owners are more circumspect with the value of owner-occupier lending just 1.9 percent higher than a year ago.
The lift in home loan refinancing is positive for consumer-focussed companies.
<a href="https://www.propertyobserver.com.au/images/2017/03/13/Craig6.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/2017/03/13/Craig6.jpg" width="600" height="450">
<a href="https://www.propertyobserver.com.au/images/2017/03/13/Craig7.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/2017/03/13/Craig7.jpg" width="600" height="450">
<a href="https://www.propertyobserver.com.au/images/2017/03/13/Craig8.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/2017/03/13/Craig8.jpg" width="600" height="450">
<a href="https://www.propertyobserver.com.au/images/2017/03/13/Craig9.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/2017/03/13/Craig9.jpg" width="600" height="450">
 
Craig James is the chief economist at <a href="https://www.comsec.com.au/default.aspx" target="_blank">CommSec</a>.
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More home loan refinancing, investors still active: Craig James

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More than 20 percent of borrowers are choosing to fix their home loan, new data from a leading mortgage brokers suggests, with the trend likely to go up as lenders continue to lift their interest rates out of cycle with the central bank.
Fixed rate home loans accounted for 22.22 percent of all loans written in February, down slightly from 22.97 percent in January, according to national home loan approval data from Mortgage Choice.
“While fixed rate demand was down slightly in comparison to last month, the fact that over 20 percent of borrowers are choosing to fix their mortgage is still significant,” Mortgage Choice chief executive officer John Flavell said.
“Of course, given that so many lenders have raised their interest rates over the past few weeks, I am not surprised to see one in five borrowers opting for a fixed rate home loan.” 
Flavell said he wouldn’t be surprised to see even more borrowers choosing to fix part or all of their mortgage, as lenders continue to lift their interest rates out of cycle with the Reserve Bank of Australia.
“In recent weeks, the Reserve Bank of Australia’s governor Philip Lowe has made it clear that future rate cuts are now more unlikely than likely. With this in mind, it would appear the only way for rates to go is up,” he said.
“As more lenders start to lift their rates, we may see more borrowers choosing to fix their mortgage in a bid to avoid further rate hikes and provide themselves with some certainty around their regular mortgage repayments.”
<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/2017/03/02/MortgageChoiceCEO.jpg" alt="" width="429" height="643">  Fixed rate demand was highest in New South Wales, making up 24.17 percent of all home loans written throughout the month of February by the broker.   Queensland followed with fixed rate demand accounting for 23.32 percent of all loans written within the state.   Overall however, variable rate home loans – specifically ongoing discount mortgages – still remained the most popular product amongst borrowers.   Within Australia, ongoing discount home loans accounted for 44.34 percent of all mortgages written.   Flavell said with interest rates continuing to sit at near record lows, borrowers should be able to secure a good deal regardless of whether they choose a fixed or variable rate.   “At the end of the day, there is no right or wrong answer when it comes to selecting a home loan product, it all comes down to personal preference,” he said. 
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One in five property owners choosing fixed-rate loans: Mortgage Choice

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Through 2008, outstanding loans to households by Australia's banks totalled less than $700 billion.  The final 2016 numbers are not yet plugged into the chart below, but the monthly banking statistics suggest that the total by the end of the year will exceed $1.5 trillion. 
Australia has experienced strong population growth during this period, but nevertheless outstanding housing debt has been compounding at around 9 percent per annum. 
<a href="https://www.propertyobserver.com.au/images/2017/02/28/A1.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/2017/02/28/A1.jpg" alt="">
Such a strong pace of increase in household debt is bound to be reflected in housing market conditions one way or another, and in Australia's case the result has been price increases in Sydney and Melbourne. 
This dynamic since the financial crisis has been arousing the interest of short sellers, including from overseas. 
Although house prices have declined in Perth, Darwin, and parts of regional Queensland in particular, to date the most heavily populated markets have held up well. 
If anything, housing market sentimen<a href="https://petewargent.blogspot.com.au/2017/02/deuces-are-wild">t</a> seems to be improved in Sydney and Melbourne again at the beginning of 2017. 
Changes to the lending environment
Regulators have encouraged several tweaks to lending criteria over the years since the financial crisis first erupted. 
"Low-doc" loans, once fairly commonplace, today only comprise a small share of the mortgage market, while 100 per cent mortgages have thankfully gone the same way.
In fact, new mortgages today overwhelmingly have a loan to value ratio (LVR) of 90 per cent or lower, although in reality many borrowers have used equity from existing properties to fund their deposits. 
<a href="https://www.propertyobserver.com.au/images/2017/02/28/A3.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/2017/02/28/A3.jpg" alt="">
Lending standards in Australia are higher than they were, but on some measures remain concerning.
For example, the share of interest only loans remains high by international standards, despite having declined from somewhat alarming levels in 2015. 
<a href="https://www.propertyobserver.com.au/images/2017/02/28/A2.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/2017/02/28/A2.jpg" alt="">
ASIC had previously reported that about two in three investor loans in Australia were interest only mortgages, and around a quarter of owner occupier loans - with the repayment typically increasing when the interest only period ends. 
Shorting: what and when
Short sellers rarely bet on house prices directly, rather they tend to be interested in the outcomes of a market downturn (and housing markets are necessarily always cyclical). 
Some will sell the stock of banks, others will look at developers or home building companies, materials companies, retailers of household goods, financiers, or the institutions that insure mortgages. 
Alternatively some may look at buying Australian government bonds, while one of the cleanest and potentially profitable ways to bet against the housing market might be to short the Australian dollar, which at 76.7 US cents arguably still has plenty of downside. 
Timing short bets is important
Maintaining short positions can be costly in terms of interest or dividend obligations, while opportunity cost of suboptimal market timing is another factor to be considered. 
There has been plenty of discussion of the potential impact of an apartment glut in Australia, but in the case of both Melbourne and Sydney accelerating population growth appears to be absorbed much of the new supply to date, although tens of thousands of apartments remain under construction.
The potential for non-resident buyers defaulting on apartment settlements has been another salient risk closely watched by sceptics, though to date news of any fallout appears to have been relatively contained.  
One market risk which cannot so easily be quantified is the potential for defaults in the scenario whereby mortgage rates increase, prices in secondary and lower socio-demographic areas decline, and a swathe of interest only loans reach the end of their interest only period. 
Maths can get ugly
Anyone who had a standard variable rate mortgage in 2009 at above 8 percent will recall that principle and interest repayments could be excruciatingly difficult.
Consider that a homeowner with a $600,000 interest only mortgage at 4.5 percent today might be paying only ~$2,250 per month, whereas as and when the mortgage flips to principal and interest, were the mortgage rate to have increased to 6 percent the repayments could be more than 50 percent higher, even on a 30 year product.
Mortgage repayment calculators don't always give the option to calculate what would happen in a 7 percent scenario, but the answer on a 30 year product might be a potentially punishing ~$4,000 per month. 
With the amount of outstanding interest only debt having increased at an unprecedented pace through this cycle it's not too hard to analyse when this market risk will arise, and in turn which areas might see defaults increase. 
The most successful shorters will be those that can combine market timing with bets lined up against those companies with the most vulnerable financials. 
The big players
Market participants will be well aware of the attractive mortgage rates that the Commonwealth Bank of Australia (CBA) has been offering lately, and in turn the growth in the CBA investor mortgage book looks likely to bump up against the notional 10 percent per annum cap set by the regulator APRA.
Unfortunately for analysts the market data reported for investor loans has been muddied by reclassifications from investor to owner-occupier loans.
For example, the Westpac Banking Corporation (WBC) switched more than $21 billion of loans between July and October 2015 taking outstanding investor credit down from $156 billion to $135 billion and in turn causing its year-on-year growth in outstanding investor credit to appear negative for some time. 
<a href="https://www.propertyobserver.com.au/images/2017/02/28/A5.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/2017/02/28/A5.jpg" alt="">
Despite the reclassification Westpac retains the greatest balance of outstanding investor loans, while Commonwealth has the largest total of outstanding household mortgage debt, although the quality of loans rather than the volume is what should be of interest to analysts. 
Investors today typically pay higher mortgage rates than owner-occupiers, with further tweaks a possibility in 2017. 
<a href="https://www.propertyobserver.com.au/images/2017/02/28/A4.jpg" target="_blank">Click to enlarge</a>
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What shorters should really be paying attention to is which financiers, insurers and developers have been active in the highest risk markets, areas which have been discussed here on this blog previously. 
Prospective borrowers should take into account the likelihood that mortgage rates may move higher over the years ahead. 
PETE WARGENT is the co-founder of <a href="https://allenwargent.com/">AllenWargent</a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/">blogger</a>.
His latest book is <a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx">Four Green Houses and a Red Hotel</a>.
 
 
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pwargent-M4siyDbqQY

Outstanding housing debt has been compounding: Pete Wargent

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The McGrath Estate Agency's Oxygen Home Loans department settled $443 million in mortgages during the period for the half year ending 31 December 2016 .
The latest update revealed it was slightly down on the prior year (3 percent).
<a href="https://www.propertyobserver.com.au/images/2017/02/23/McGrath-3.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/2017/02/23/McGrath-3.jpg" alt="">
The book value of loans under management has increased 21 percent year on year to $2.6bn.
At 1H FY17, there were 32 brokers supporting the network.
<a href="https://www.propertyobserver.com.au/images/2017/02/23/McGrath-4.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/2017/02/23/McGrath-4.jpg" alt="">
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