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

Joel Robinson

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

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

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

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

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

Bottega House has completed settlement of a landmark riverfront site in Macquarie Street, St Lucia, representing its first major Brisbane development.&nbsp;

Positioned on the banks of the Brisbane River, the <a href="https://www.apartments.com.au/new-apartments/180-macquarie-street-st-lucia-qld-4067">premium site at 180 Macquarie Street</a> features uninterrupted river frontage in one of Brisbane’s most tightly held residential precincts.&nbsp;

The proposed development, currently under assessment with Brisbane City Council, has been designed by <a href="https://www.apartments.com.au/architects/plus-studio">Plus Studio</a> with interiors by <a href="https://www.apartments.com.au/interior-designers/mim-design">Mim Design</a> and will deliver a boutique collection of premium residences positioned specifically for owner occupiers and downsizers.&nbsp;

The residences are set to redefine luxury apartment living in the area, with a focus on architectural quality, refined finishes, landscape integration and elevated amenities including curated wellness facilities, resort-style pools and recreation spaces rarely seen in the local market.&nbsp;

Exclusive sales for the project will be led by Keenan &amp; Byrne, ahead of an anticipated launch later this year.&nbsp;

Bottega House Managing Director Nick Malloch said the project reflects the group’s ambition to deliver a highly curated residential offering within one of Brisbane’s most tightly held precincts.&nbsp;

“This is an incredibly rare riverfront opportunity and one we have approached with a long-term perspective,” Malloch said.&nbsp;

“Our vision from the outset was to create a boutique collection of residences that feel more like private homes than traditional apartments, with generous proportions, refined finishes and exceptional amenity throughout."

Malloch says there is a&nbsp;lack of premium owner-occupier stock of this quality in the market, particularly for downsizers wanting space, privacy and a true lifestyle offering without compromise.&nbsp;

"Demand is expected to be strong given the scarcity of premium riverfront opportunities of this nature within Brisbane’s inner-west."&nbsp;

Bottega House secures landmark riverfront site in St Lucia 

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The arrival of the first piling rig officially marks the commencement of construction at SIERA’s new beachside apartment development, Exhale, in Northcliffe.

<a href="https://www.apartments.com.au/new-apartments/exhale-surfers-paradise-8-enderley-avenue-surfers-paradise-qld-4217">Exhale</a>, a glass-encased tower featuring 54 large-scale apartments at 8 Enderley Avenue, is SIERA’s third Gold Coast development. It follows the recently completed PIPIS Bilinga beachfront project, which achieved suburb-record prices, and the soon-to-be-completed Chevron Island development, Tapestry.

[smartcode_project:default project_id=112661 project_image_fid=359603]

<a href="https://www.apartments.com.au/developers/siera">SIERA</a> Founder and Managing Director Brent Thompson said the arrival of the piling rig represented a significant milestone for the development, which is scheduled for completion in late 2028.

Over the next month, around 260 piles are expected to be installed as work progresses on the basement structure. The building is anticipated to rise above ground level early next year, before unveiling its sculptural glass curtain wall, developed in collaboration with specialist façade engineers.

“The façade was designed to maximise panoramic coastal views while creating a distinctive architectural identity,” Thompson said.

[smartcode_project:default project_id=112661 project_image_fid=355935]

Designed by BDA Architecture, Exhale will comprise just 54 two- and three-bedroom residences across 26 levels, a level of low-density living rarely delivered in this beachside pocket between Surfers Paradise and Broadbeach.

The project has been conceived as a resident-only building, with no short-stay accommodation permitted. SIERA says the model is intended to appeal to long-term owner-occupiers rather than transient holiday demand.

[smartcode_project:default project_id=112661 project_image_fid=361052]

Residences have been designed with large-format layouts and expansive glazing, with most apartments featuring more than 30 metres of glass frontage to maximise natural light and ocean views.

The amenity offering spans two levels and centres on wellness and lifestyle, including a heated magnesium pool, sauna, yoga and Pilates studio, gymnasium, private dining facilities, cinema lounge, and dedicated surfcraft storage.

[smartcode_project:default project_id=112661 project_image_fid=359607]

More than half of the apartments have already sold. SIERA has also opened a sales gallery for Exhale at its Chevron Island commercial premises, near its Tapestry tower and the site of its second Chevron Island apartment development, which is slated to launch in early 2027.
</section>
</section>

[smartcode_project_cta:default project_id=112661]

SIERA kicks off construction at Northcliffe tower Exhale

Home Loans

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Canstar advises that five year fixed rates terms can now be found at under 4 percent.
Thanks to the May cut in official cash rate, research and comparison site canstar.com.au advises that borrowers with some equity can now potentially lock in a home loan interst rate of less than 4 percent across all loan terms up to and including 5 year fixed.
“The cash rate is at a historic low and this is fantastic news for home owners wanting to refinance their mortgage,” said Canstar group manager, research &amp; ratings, Mitchell Watson.
“For the first time our database of more than 1,000 home loans is showing advertised interest rates of less than four percent across all loan terms, including 5 year fixed. Prior to the most recent rate cut the lowest 5 year fixed home loan advertised rate on our database was 4.34 percent; it’s now 3.99 percent for owner-occupiers.”
Current highest, lowest and average advertised home loan rates 
<table style="width: 476px;" border="1" cellspacing="0" cellpadding="0"><tbody>
<tr>
<td colspan="7" width="0">
Table: Residential Home Loan Market – Snapshot of the current market (3/6/2016)
</td>
<td colspan="2" width="0">
 
</td>
</tr>
<tr>
<td width="62">
 
</td>
<td width="0">
Standard Variable
</td>
<td width="0">
Package Variable
</td>
<td width="52">
1 Year Fixed
</td>
<td width="0">
3 Year Fixed
</td>
<td width="0">
4 Year Fixed
</td>
<td width="0">
5 Year Fixed
</td>
<td colspan="2" width="0">
 
</td>
</tr>
<tr>
<td width="62">
Average
</td>
<td width="0">
4.64%
</td>
<td width="0">
4.35%
</td>
<td width="52">
4.35%
</td>
<td width="0">
4.31%
</td>
<td width="0">
4.66%
</td>
<td width="0">
4.70%
</td>
<td colspan="2" width="0">
 
</td>
</tr>
<tr>
<td width="62">
Min
</td>
<td width="0">
3.59%
</td>
<td width="0">
3.64%
</td>
<td width="52">
3.50%
</td>
<td width="0">
3.74%
</td>
<td width="0">
3.99%
</td>
<td width="0">
3.99%
</td>
<td colspan="2" width="0">
 
</td>
</tr>
<tr>
<td width="62">
Max
</td>
<td width="0">
5.84%
</td>
<td width="0">
5.10%
</td>
<td width="52">
5.34%
</td>
<td width="0">
5.24%
</td>
<td width="0">
5.59%
</td>
<td width="0">
5.59%
</td>
<td colspan="2" width="0">
 
</td>
</tr>
<tr>
<td colspan="7" width="0">
Source: <a href="https://www.canstar.com.au/" target="_blank">www.canstar.com.au</a>, the search results do not include all home loan providers, and may not include all features relevant to you. Advertised rates of products on CANSTAR database
</td>
<td colspan="2" width="0">
 
</td>
</tr>
<tr>
<td width="62">
 
</td>
<td width="69">
 
</td>
<td width="0">
 
</td>
<td width="0">
 
</td>
<td width="0">
 
</td>
<td width="0">
 
</td>
<td width="41">
 
</td>
<td width="0">
 
</td>
<td width="12">
 
</td>
</tr>
<tr>
<td colspan="7" width="0">
Table: Investment Home Loan Market – Snapshot of the current market (3/6/2016)
</td>
<td colspan="2" width="0">
 
</td>
</tr>
<tr>
<td width="62">
 
</td>
<td width="0">
Standard Variable
</td>
<td width="0">
Package Variable
</td>
<td width="52">
1 Year Fixed
</td>
<td width="0">
3 Year Fixed
</td>
<td width="0">
4 Year Fixed
</td>
<td width="0">
5 Year Fixed
</td>
<td colspan="2" width="0">
 
</td>
</tr>
<tr>
<td width="62">
Average
</td>
<td width="0">
4.86%
</td>
<td width="0">
4.63%
</td>
<td width="52">
4.55%
</td>
<td width="0">
4.53%
</td>
<td width="0">
4.84%
</td>
<td width="0">
4.88%
</td>
<td colspan="2" width="0">
 
</td>
</tr>
<tr>
<td width="62">
Min
</td>
<td width="0">
3.84%
</td>
<td width="0">
3.95%
</td>
<td width="52">
3.59%
</td>
<td width="0">
3.89%
</td>
<td width="0">
4.39%
</td>
<td width="0">
4.49%
</td>
<td colspan="2" width="0">
 
</td>
</tr>
<tr>
<td width="62">
Max
</td>
<td width="0">
6.03%
</td>
<td width="0">
5.37%
</td>
<td width="52">
5.34%
</td>
<td width="0">
5.34%
</td>
<td width="0">
5.69%
</td>
<td width="0">
5.69%
</td>
<td colspan="2" width="0">
 
</td>
</tr>
<tr>
<td colspan="7" width="0">
Source: <a href="https://www.canstar.com.au/" target="_blank">www.canstar.com.au</a>, the search results do not include all home loan providers, and may not include all features relevant to you. Advertised rates of products on CANSTAR database
</td>
<td colspan="2" width="0">
 
</td>
</tr>
</tbody></table>
“Investors aren’t quite as lucky, the minimum and average interest rates on offer are higher than for owner-occupiers. Nevertheless there is significant variance between rates on offer – definitely shop around,” said Mr Watson.
You can search for a home loan and <a href="https://www.canstar.com.au/compare/home-loans/?amount=400000&amp;profile=Buying+Next+Home&amp;repayment_type=Principal+%26+Interest&amp;state=NSW&amp;Loan+Type%5B%5D=Fixed+Loan+5yr" target="_blank">compile tables of the lowest-rate home loans on the Canstar database here</a>.
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jchancellor-FAypfDUnLy

Five year fixed rate terms found under 4 percent: Canstar

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<div class="column">GUEST OBSERVER</div>
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<div class="column">Housing finance decreased in April, with investor finance posting a sharp 5 percent decline in the month.</div>
<div class="column"> </div>
<div class="column">Looking through today’s soft monthly growth, the housing market has shown clear cyclical improvement recently, reflected by the pick-up in house prices and building approvals. This cyclical rebound is likely to be further supported by the May interest rate cut. However, today’s data indicates that growth in the current cycle will be limited by soft household income growth, the presence of macroprudential policy targets, and concerns about future tightening of housing policy.</div>
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<div class="column"><a href="/images/2016/06/08/Screen%20Shot%202016-06-08%20at%202.51.15%20PM.png" target="_blank">Click to enlarge</a></div>
<div class="column"><img src="/images/2016/06/08/Screen%20Shot%202016-06-08%20at%202.51.15%20PM.png" alt=""></div>
<div class="column">
 Today’s data was driven by a sharp monthly decline in investor lending. This continues to reflect the negative impact of macro prudential policy targets on investor lending, with lenders mindful of the regulatory investor lending growth target. Nonetheless, investor demand for housing is likely strengthen in the coming months, supported by the solid pick- up in house prices (Figure 3).</div>
<div class="column">
 In comparison, owner-occupier finance posted an increase in April, with upgrader finance higher and first home buyer finance lower in the month. While upgraders remained the key to driving owner-occupier lending, first home buyers continued to be weighed down by housing affordability concerns, which are being amplified by weak wage growth. Finance for the purchase or construction of new dwellings declined sharply in the month.</div>
<div class="column"> </div>
<div class="column">However, the pipeline of existing housing construction remains solid. Building approvals have trended higher recently, and are likely to be supported in the coming months by both solid house price gains and lower interest rates. As such, we continue to expect that housing construction activity will remain elevated in 2016, however today’s data indicates that any further growth is likely to be modest compared to recent years. </div>
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<div class="column"><a href="/images/2016/06/08/Screen%20Shot%202016-06-08%20at%202.47.51%20PM.png" target="_blank">Click to enlarge</a></div>
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<div class="column"><img src="/images/2016/06/08/Screen%20Shot%202016-06-08%20at%202.47.51%20PM.png" alt=""></div>
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<div class="column"><a href="/images/2016/06/08/Screen%20Shot%202016-06-08%20at%202.49.26%20PM.png" target="_blank">Click to enlarge</a></div>
<div class="column"><img src="/images/2016/06/08/Screen%20Shot%202016-06-08%20at%202.49.26%20PM.png" alt=""></div>
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David Cannington is senior economist, ANZ and Daniel Gladwell is economist. The can be contacted <a href="https://www.anz.com/personal/" target="_blank">here</a>.
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Australian mortgage lending slows in April: ANZ Research

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GUEST OBSERVER
The proposed review of Mortgage Broker Remuneration Structures, suggested by the Finance systems Inquiry (FSI), posed some interesting questions, and as an experienced lender, Bluestone Mortgages would like to offer our perspective on some of the suggestions made. 
Our view is that the current remuneration system supports positive consumer outcomes, and that any change would, in the words of Gaden’s partner, Jon Denovan, be a “disservice” to the community. 
The reasons for our view are manifold. If the aim of the ASIC Review is to ensure quality consumer outcomes by assessing the impact of different remuneration structures, it is important to look carefully at the potential ramifications of any changes proposed. 
Having assessed the potential impact of alternative structures, we have come to the conclusion that any change to the current structure would negatively affect competition in the sector, due to their potential effect on consumer equity, access and the range of loan products available. 
A question of equity 
First, to equity. No discussion of the remuneration issue at hand is meaningful unless it is first understood that not all lenders, and not all consumers, are created equal. In fact, some lenders and some consumers are likely to be more affected by a move away from the current remuneration structure than others – and not in a positive way. 
We know that over 50 percent of consumers now choose to access home finance via mortgage brokers. Any move to charge a fee for service for brokers is likely to negatively affect consumers who choose non-bank lenders over the banks. 
Which brings us to the question of who these consumers really are? 
Often, they are individuals who, while entirely worthy of credit and able to service a loan, for one of many reasons – often outside their control – do not meet the prescriptive boundaries of traditional banks. Bluestone is one of a number of non-bank lenders which specialises in providing services to the many Australian consumers who find themselves in this category. 
A change in the current remuneration structure would mean that this group of consumers, as well as others who chose a mortgage broker, may be required to pay an upfront fee, whereas consumers (often so-called ‘ideal borrowers’) who choose to deal with the banks directly, would not. 
This is clearly not equitable. 
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A threat to access 
We then come to the interlinked issue of access. The monopoly of size, scale and market share of the big four and other traditional banks means they already have extensive proprietary distribution channels. Some of the banks have over a hundred years of traditional savings and loan infrastructure, and do not in any way see brokers as being essential to their business success, or even necessary. 
Non-bank operators, on the other hand, have shaped their businesses in an entirely different environment. Brokers have played a central role in their business growth, providing distribution services to the lenders and, the crucial other side of the coin, access to the growing group of customers who are no longer required to deal solely with one of a few major players, offering a relatively homogenous product range to a relatively homogenous pool of “ideal borrowers”. 
There’s no question in our mind that a change to current remuneration structures would put the use of brokers out of the financial reach of the vast majority of their target market. 
This would mean that a large and growing group of Australians would be denied access to one of the most fundamentally important financial transactions they are ever likely to make - buying a home. (And that’s without addressing the wider policy considerations around the role of home ownership in reducing the burden of caring for an ageing population into the future). 
Wider choice, more options, more competition 
Which brings us to the third – and also interlinked – part of our argument. And that is the fact that the current model actually promotes healthy and positive competition among lenders, which in turn leads to more options and greater choice for consumers. Which must surely be the kind of outcome the ASIC Review is trying to achieve. 
In fact, it’s clear that it is in fact thanks to the current broker remuneration model, and the free access it offers, that consumers are no longer limited in choice to the products and practices offered by the big four and other traditional banks. And clearly consumers are voting with their feet – more than half now access their home finance through a mortgage broker. 
In summary, from Bluestone’s lender perspective, the mortgage broker remuneration structure as it stands promotes not only consumer choice and competition, it also gives more consumers more access to more options than any alternative model. 
All of which lead to a much higher quality outcome for consumers than any alternatives posed to date. 
Royden D’Vaz is national head of sales &amp; distribution at Bluestone Mortgages and can be contacted <a href="https://www.bluestonemortgages.com.au" target="_blank">here</a>.
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ASIC review into broker commissions: a lender's perspective

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The amount of money Australia’s homeowners owe their banks rose above $1 trillion for the first time in April.
The latest rise in the value of outstanding home loans since March was only a modest 0.5 percent, but the annual growth rate sits at a five-year high of 7.4 percent.
The total of owner-occupier housing debt held by Australian lenders rose to $1.005 trillion in April from $998.8 billion in March.
The seasonally adjusted figures from the Reserve Bank of Australia showed the value of homeowner debt is now eight times where it was two decades ago, at $124 billion in January 1995.
It doubled to $248 billion in 2001, then to just under $500 billion by 2006.
While home loans are still growing strongly, the latest data suggests lending to housing investors has slowed.
Investor housing loans totalled $551 million in April, a rise of 0.3 percent, the RBA figures showed.
The last time a smaller increase in investor loans was recorded was in May 2009.
Annual growth in investor housing loans has now slowed to 6.5 percent, from 10.9 percent a year ago.
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Our $1 trillion home lending debt

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GUEST OBSERVER
News of Macquarie Bank tightening its loan to value ratio (LVR) for apartment high-rises has sparked fears of an oversupply in certain markets.
The bank named 46 postcodes where high-rise apartment lending would shrink to 70 percent of the value of the property.
The problem in these postcodes – which are concentrated in inner Sydney, Melbourne and Brisbane – is not one of supply and demand, at least not in the sense that there are more apartments than there are people to live in them. Supply and demand in these markets is not a question of how many people need a place to live versus how many places there are to live. Rather it is how many owner-occupiers and investors demand assets.
The former conception of supply and demand ignores the tax and finance incentives that encourage people to hold more property than they need to live in. These incentives include cash-free equity deposits, negative gearing and capital gains concessions, which have been introduced one by one into the housing market over the last 30 years. It makes sense then, that our understanding of supply and demand in real estate should be dynamic. As long as there is an investor looking for a property to put their money in, there is demand. As long as there is an investor demanding property, a developer is willing to supply.
Professor Laurence Murphy of the University of Auckland notes that when the price of property begins to fall, developers become less willing to supply dwellings. Graph 1 and 2 compares high-rise approval data in Victoria and NSW (which we have to assume is a proxy for inner city unit development) with quarterly growth rates in their respective unit markets.
Graph 1: Quarterly Approval Figures Victoria vs. Melbourne Units Quarterly Growth Rates
<a href="/images/2016/06/01/Graph_1.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2016/06/01/Graph_1.jpg" alt="">
Source: Residex
Graph 2: Quarterly Approval Figures NSW vs. Sydney Units Quarterly Growth Rates
<a href="/images/2016/06/01/Graph_2.jpg" target="_blank">Click to enlarge</a> <img src="/images/2016/06/01/Graph_2.jpg" alt="">
Source: Residex
The graphs show that approvals are highly responsive to changes in unit growth rates.
As demand for units falls away due to tighter LVRs, slowed wage growth and higher premiums on foreign investment purchases<a href="https://www.blog.residex.com.au.tmp.anchor.net.au/2016/05/26/may-market-update/?utm_source=membersNewsletter&amp;utm_medium=email&amp;utm_campaign=Cid=ResiMay16&amp;mc_cid=d432d199da&amp;mc_eid=1c64ff30b3#footnote-1">[1]</a>, the first thing to crash will most likely be applications and construction of dwellings. This has wider economic implications, particularly for NSW and VIC, where construction has been a significant contributor to growth in gross state product.
The construction of units – whether in the application phase, construction phase or completion phase – moves in much larger fluctuations than the values of the units themselves. For example, in the September quarter of 2010, the number of approvals for units in blocks of four or more stories grew by 124% in NSW, yet nothing dramatic happened with Sydney unit value growth. Values grew steadily until 2013 when they began to grow at a higher rate. I am not saying that the supply of units to speculative investors is sustainable where population growth is low, nor is it optimal for the people living in them. However, it is clear that price movements and investor interest in units are a better indicator of expected supply movements than population growth rates.
The graphs also show the approval figures for other dwelling types over the past decade. Most strikingly, the number of high-rise units began outperforming detached housing approvals from March 2011. The salience of this phenomenon increased around the beginning of the 2013 housing boom.
Less important than the effect of supply on the value of a unit is the way units are supplied and how they are integrated with wider planning. Residential dwellings crowding out commercial and cultural facilities, which are partly what makes a city desirable in the first place, can limit a city’s desirability. A lack of diverse planning can also increase pressure on transport and road congestion. This is one of the many risks of investing in rapid high-rise growth areas, and has caused some young families and retirees to move to regional parts of the state.
Eliza Owen is housing market analyst for onthehouse.com.au and can be contacted <a href="https://www.onthehouse.com.au" target="_blank">here</a>.
 
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Oversupply fears rise as LVRs drop: Eliza Owen

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Home loan lender, ME, has announced a range of interest rate cuts across variable and fixed rate products.
It included introducing a variable rate below 4 percent for new owner occupier with a maximum LVR of 80 percent. The variable rate for new owner occupier loans has been discounted by 6 basis points to 3.95 percent. This is an 88 basis point discount off the reference rate for the life of the loan. The variable rate on its investment Flexible Home Loan with Member Package has been reduced by 9 basis points to 4.15 percent. This is a 68 basis point discount off the reference rate. The non-major has also cut its one and two-year fixed rates by 30 basis points on its Flexible Home Loan for owner occupiers to 3.99 percent.
The four and five-year fixed rates have been cut by 10 basis points to 4.49 percent. For investors, the Flexible Home Loan has been discounted by 20 basis points on its one and two-year fixed rates, to 4.09 percent, effective yesterday.
For more information, <a href="https://www.mebank.com.au" target="_blank">click here</a>.
Following the Reserve Bank of Australia’s decision to cut the cash rate in May, demand for variable rate mortgages has risen, according to Mortgage Choice’s latest national home loan approval data.
Variable rate home loans accounted for 76% of all loans written in May – up from 75% the month prior.   “After the Reserve Bank’s decision to cut the cash rate at its May Board meeting, three of the four majors passed on the full rate cut – trimming their variable rates by 25 basis points,” Mortgage Choice chief executive officer John Flavell said.   “With that in mind, it was hardly surprising to see a lift in demand for variable rate products this month. Borrowers are clearly looking to take advantage of the historically low rate environment.   “And, with many economists predicting at least one more rate cut this calendar year, I wouldn’t be surprised to see demand for variable rate products remaining strong for the foreseeable future.”   Across the country, demand for variable rate products was highest in Victoria, with this type of product accounting for 86% of all loans written in May.   Variable rate demand was lowest in New South Wales, with this type of product accounting for 71.47% of all loans written.
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ME drops variable home loan rate to below 4 percent

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<img src="https://counter.theconversation.edu.au/content/57114/count.gif" alt="The Conversation" width="1" height="1">
GUEST OBSERVER
The Australian Securities and Investments Commission (ASIC) inquiry into the way mortgage brokers are paid may uncover some isolated shady dealings but the system of remuneration for brokers is already regulated well enough by intense competition.
Assistant Treasurer Kelly O’Dwyer announced the inquiry last year in line with recommendations from the Financial System Inquiry and ASIC recently commenced the inquiry with a scoping paper. The focus is likely to be on whether the advice of brokers is in the best interests of the customers.
As always, there are questions about whether the remuneration incentives for brokers distort their advice. And, again as always, there are questions about whether the fact that big banks own some brokers leads these brokers to favour the products of their owners, and not necessarily to offer the products most appropriate to the customer.
In many ways, the inquiry is just part of the ongoing reviews of different parts of the finance sector. The same arguments are likely to be rehashed.
In announcing the review, ASIC Commissioner Peter Kell was clear that:
“We are focused on consumer protection issues in the context of personal credit products, ranging from small amount credit contracts through to home loans."
There has been some discussion in the press that loans organised by brokers default at a higher rate than loans written by banks. The Australian Prudential Regulation Authority (APRA) might regard this as a concern for financial stability, but ASIC will be concerned with whether people are getting loans they really should not be. The focus will clearly be on consumer outcomes.
It’s worth looking at the mortgage broking sector mainly because it has been growing rapidly and is now quite big. About half of all mortgages are provided through brokers, up from 40 percent a decade ago. The upfront commissions for brokers are about 0.5%, which yields annual revenue of close to A$2 billion.
So it is a big and rapidly growing financial sector and ASIC has duly been charged to have a look around for problems. Australia already has laws addressing any concerns. The National Consumer Protection Act has, since 2011, put the onus on providers to act in the best interests of customers. ASIC is really just checking up that the law is being complied with.
While there may be some bad behaviour, it is hard to see what the concern is. People have a choice.
They can go to their own financial institution and buy a mortgage direct from the manufacturer. Alternatively, they can look around among financial institutions to find the mortgage that works for them.
Now they can also go to one of the dozens of mortgage brokers to see if one of them can find a better deal. From the customers’ point of view, there are hundreds of retail outlets (banks and mortgage brokers) offering mortgages.
The fact that mortgage brokers are taking market share away from the banks suggests that customers really appreciate the mortgage broker effectively cutting the buyer’s cost of searching.
There shouldn’t be a problem with the banks paying the broker for delivering the customer, as there is a clear cost saving to the bank. It does not need to have as many branches or as many staff.
Seen from the bank’s point of view, it can originate the mortgage through its own branch and incur some overhead and running costs, or initiate the loan through the broker channel and pay the broker for its overhead and running costs.
Ultimately, the client is buying a product, in this case a mortgage. The price the customer pays is transparent, as are the terms and conditions.
If brokers were not providing a good service, customers could easily swing back to searching for their own mortgage among the banks, or simply walk down the street to another broker. Smart customers will thus keep the providers honest and make sure competition works as it should.
There is a not a lot of academic research into the issues associated with remunerating mortgage brokers. What there is tends to be from the US, which has not had a good record in managing mortgages over recent years. The most relevant paper suggests that loan quality can be improved though requiring registration, higher education standards and continuing education and/or by requiring brokers to post bonds.
The ASIC inquiry will uncover more information about the sector. It may also find some people have behaved badly (as in any area of human endeavour), but it’s hard to see a significant structural problem in a very competitive market.
Rodney Maddock is vice chancellor's fellow at Victoria University and Adjunct Professor of Economics, Monash University and author for The Conversation. He can be contacted <a href="https://theconversation.com/profiles/rodney-maddock-107543" target="_blank">here</a>.
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Mortgage brokers: ASIC goes fishing

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Mortgages nationwide are up nationally month on month with a 3.2 percent change according to CoreLogic RP Data.
Tasmanian mortgage levels lead the pack with a 23.4 percent change.
New South Wales is up 0.5 percent, Victoria 3.2 percent and Queensland 5.2 percent.
<a href="/images/2016/05/25/Screen%20Shot%202016-05-26%20at%202.01.26%20PM.png" target="_blank">Click to enlarge</a>
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Mortgage activity up nationally 3.2 percent month on month: CoreLogic RP Data

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Almost half of Australian home owners have never refinanced their mortgage, according to the results of a new consumer survey by Aussie Home Loans. 
The survey of more than 1,000 mortgage holders showed 45 percent have never refinanced their home loan.
Aussie CEO James Symond said wasn’t surprised by the finding because most mortgage holders are likely not sure about how refinance works, according to a report in the MPA online magazine.
Nearly one third (29 percent) of respondents said they have never refinanced because they think they won’t get a better deal. Almost one in five (18 percent) said haven’t thought about it or don’t know where to start and 17 percent believe it’s too time consuming.
Of the 53 percent of respondents who have refinanced, it happened, on average, more than two and a half years ago. 
“It’s not surprising that home owners don’t know where to start and think refinancing is time consuming, but that’s where a mortgage broker can help," he said.
“Aussie brokers are now doing more refinance home loans than any other type of home loan, and that’s because our customers want an expert who’s on their side to get it done for them.”
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Nearly half of Aussie home owners have never refinanced: Survey

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Mortgage brokerage N1 Loans is all set to launch a own real estate arm as part of its efforts to become a “one-stop-shop” financial services company.
N1 Realty will officially start trading from July 1 in Sydney.
The group is negotiating a lease for a location in Chatswood in Sydney’s North Shore, Australian Broker reported.
The article cited N1 Loans CEO Ren Wong as saying demand from its customers for investment properties drove the decision to move into the real estate business. 
“We have over 2,000 clients in our Salesforce CRM, and given our strong pre-approvals pipeline, it's time for us to diversify,” Wong said. 
The realty arm would be headed by an industry veteran, is all Wong would say.
“We look forward to developing N1 further as a full service financial services company, making investment easier for our growing customer base,” Wong said.
The group, which started trading on the ASX earlier this year, claims it launched Australia’s first Chinese language mortgage comparison website in April 2015, a DIY property renting app connecting landlords with potential tenants in December 2015, and an English language online mortgage calculator and comparison website this month.
Earlier this week, N1 entered into a deal with insurance provider Ensurance to supply white label insurance products to its home loan clients.
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