New apartment developments with uninterrupted, north-facing views over Perth's Swan River are exceptionally rare.

Recognising just how limited those opportunities are, <a href="https://www.apartments.com.au/developers/edge-visionary-living">Edge Visionary Living</a>, one of Perth's most respected builder-developers, targeted <a href="https://www.apartments.com.au/developments/applecross-wa-6153">Applecross</a>, assembling an unrepeatable 6,342 sqm riverfront site on the corner of Moreau Mews and Canning Beach Road to create one of Perth's only new north-facing apartment developments directly overlooking the Swan River.

Today, <a href="https://www.apartments.com.au/buildings/riviere-residences-applecross-59-canning-beach-road-applecross-wa-6153">Rivière Residences</a> offers buyers a unique opportunity to choose between completed residences ready to move into now and off-the-plan homes in the final stage, Rivière West.

[smartcode_project:default project_id=28384 project_image_fid=3823]

Across the completed East and Central buildings, residents are already enjoying the development's luxury amenity, while two of the precinct's hospitality venues are now open.

The completed component of the development gives buyers the advantage of experiencing the finished product firsthand, including its uninterrupted river views, while still having the opportunity to secure a residence in the final stage.

"People are wowed by the view and the quality of the apartments,"&nbsp;Edge Visionary Living Sales Executive, Holly McSweeney, says.

"They're looking for the convenience of lock-and-leave living, but they're not looking to downsize on quality."

[smartcode_project:default project_id=28384 project_image_fid=3826]

The rarity of the development hasn't been lost on prospective buyers, McSweeney says.

For McSweeney, it all comes back to a location that is becoming increasingly difficult to replicate.

"Location, location, location," she says. "We are nestled right on the front of the Swan River. You can never get built out, so wherever you are in Rivière Residences, you've got views of the river forever."

The unique waterfront position has resonated particularly strongly with local downsizers. McSweeney says many buyers are long-time Applecross residents looking to transition from large family homes into a luxury apartment without sacrificing space, quality or the lifestyle they've enjoyed for decades.

<iframe allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" allowfullscreen="" frameborder="0" height="315" referrerpolicy="strict-origin-when-cross-origin" src="https://www.youtube.com/embed/N_FowNW0wu8?si=vb25XFq1wZ-iufAW" title="YouTube video player" width="560"></iframe>

A major focus for Edge in recent years has been resident amenity. Across its apartment portfolio, from beachfront developments in Scarborough to luxury towers in South Perth, the developer has increasingly invested in the spaces beyond the apartment itself.

The strategy has largely been shaped by downsizer demand. Many buyers are moving from large family homes with swimming pools and established gardens. While they're looking to leave the maintenance behind, they don't want to compromise on lifestyle.

At Rivière, <a href="https://www.apartments.com.au/architects/hillam-architects">Hillam Architects</a> designed the resident facilities as an extension of each apartment. A 25-metre heated swimming pool takes advantage of the north-facing river outlook, complemented by a large gym, sauna and steam rooms, private dining spaces, residents' lounges, a cinema, games room, and dedicated wine and whisky rooms.

[smartcode_project:default project_id=28384 project_image_fid=372542]

The waterfront location has also proved to be a major drawcard. Residents are within walking distance of the Raffles Hotel, South of Perth Yacht Club, the Heathcote Cultural Precinct and the cafés, restaurants and boutiques along Ardross Street.

Beyond the location and amenity, McSweeney says many buyers take confidence from Edge's fully integrated development model.

Having delivered apartments across Perth for decades, Edge now designs, develops and constructs its projects in-house, giving the company greater control over quality, delivery and the finished product.

"What I love is when people walk through their apartment for the first time and say, 'This is better than what we imagined,'" McSweeney says. "We hear that all the time."

Completed apartments in the East and Central buildings are now available to inspect by appointment, while Rivière West, the final stage of the precinct, is expected to be completed in the first quarter of 2027.

[smartcode_project_cta:default project_id=28384]

Joel Robinson

North-facing Swan River views drive demand at Rivière Residences in Applecross

Nearly 60 per cent of apartments at McNab Group's $220 million The Tannery development in Brisbane's West End have sold ahead of the project's public launch, including a suburb-record $2.57 million sale for a two-bedroom apartment.

The early sales campaign has secured buyers for 50 of the project's 87 apartments, highlighting continued demand for larger owner-occupier apartments that combine generous floorplans with premium lifestyle amenities in one of Brisbane's most tightly held inner-city suburbs.

[smartcode_project:default project_id=143337 project_image_fid=374768]

McNab Group Executive Chairman Michael McNab said selling more than half the project before launch reflected changing buyer expectations.

"Selling more than half the project before public sales open tells us buyers are actively seeking apartments that offer something genuinely different," McNab said.

"Today's buyers are looking beyond four walls. They want homes that genuinely enhance the way they live, with spaces that support health, connection and everyday wellbeing."

[smartcode_project:default project_id=143337 project_image_fid=374767]

A key point of difference for the project is the adaptive reuse of the heritage-listed Dixon's Tannery building, which will become The Retreat, a residents-only wellness precinct rather than being redeveloped into additional apartments.

The Retreat will feature a sauna and steam room, hot and cold plunge pools, a commercial-grade gym, Pilates studio, cinema, library, co-working spaces and private dining room. Rooftop amenities will include a swimming pool, landscaped gardens, outdoor entertaining areas and dog-friendly spaces.

[smartcode_project:default project_id=143337 project_image_fid=374760]

Designed by Cottee Parker Architects with interiors by Tom Mark Henry and landscape architecture by Aspect Studios, The Tannery comprises 87 two, three and four-bedroom apartments across 11 levels overlooking the Brisbane River.

Cottee Parker principal Dee Passenger said preserving the original tannery building had been central to the project's design.

"The easy option would have been to maximise the site's development potential with additional apartments. Instead, McNab has chosen to preserve the original tannery as a shared wellness retreat, ensuring this important piece of Brisbane's history remains at the heart of the community."

Passenger said sustainability also played a key role in the design, with materials from the original industrial site salvaged and repurposed throughout the development.

[smartcode_project:default project_id=143337 project_image_fid=374761]

Motiv CEO Carly Cottam said buyers had responded strongly to the combination of larger apartments, wellness facilities and the West End lifestyle.

"We are seeing more buyers looking for homes in the sky that provide the space and functionality of a traditional home, while benefiting from the convenience and lifestyle that apartment living brings," Cottam said.

She said purchasers included both owner occupiers and investors, with demand coming from local buyers as well as interstate purchasers.

Coinciding with the public launch, McNab also announced a partnership with Queensland Ballet, whose neighbouring Thomas Dixon Centre shares historical ties with the original Dixon family.

Located on a 4,465 sqm site at 439 Montague Road, The Tannery overlooks the Brisbane River and is around 10 minutes from the CBD.

Construction is underway, with completion expected in the second half of 2027.

[smartcode_project_cta:default project_id=143337]

More than half of residences sold before public sales as McNab announces significant partnership with Queensland Ballet

McNab's The Tannery nears 60 per cent sold before public release, sets two-bedroom West End record

Iwan Sunito's vision for a landmark mixed-use precinct in Sydney's Inner West has taken a major step forward, with approval granted for the $1.9 billion Five Dock development first unveiled earlier this year.

The approved scheme by <a href="https://www.apartments.com.au/developers/one-global-capital">One Global Capital</a> will deliver an 80,500 sqm mixed-use precinct comprising 840 apartments, integrated hotel accommodation, commercial and retail space, alongside publicly accessible open space designed to create a new destination for the growing suburb.

"This is a significant milestone for One Global Capital and for the future of housing delivery in Sydney," Sunito said.

"The Housing Delivery Authority was established to identify major housing projects capable of delivering meaningful supply more efficiently, and we are delighted that Spencer Street has been recognised as one of those projects.”

He said the declaration reflected the rapid progress achieved since acquiring control of the site.

"In less than seven months we have progressed from taking control of the site to securing entry into one of the NSW Government's most important planning pathways. It reflects the experience of our team, the strength of our consultant group led by Urbis, and our long-term commitment to delivering transformational projects that contribute to Sydney's future."

When the project was revealed earlier this year, Sunito described the opportunity as one of the strongest development sites he had worked on.

"I probably hadn't appreciated the uniqueness of the site until more recently when putting together the concept plans," Sunito said.

"The proximity to the water, and the golf course opposite, is unlike any other part of Parramatta Road. We have a unique position and view corridors over the water that makes this one of the best sites I've worked on."

The development has evolved since its initial announcement, with the approved plans increasing the residential component from the originally proposed 750 apartments to 840 homes while retaining the project's focus on creating an integrated neighbourhood rather than a standalone residential development.

Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/a-city-within-a-city-iwan-sunito-flags-1-5-billion-mixed-use-precinct-in-five-dock">"A city within a city": Iwan Sunito flags $1.5 billion mixed-use precinct in Five Dock</a>

The precinct will combine apartments with hotel accommodation, commercial workplaces, retail offerings and public spaces, creating a mixed-use environment intended to serve both residents and the broader Five Dock community. The proposal also continues the collaboration between One Global Capital and internationally recognised architect <a href="https://www.apartments.com.au/architects/koichi-takada-architects">Koichi Takada</a>, whose previous work with Sunito includes Infinity, Arc and Skye North Sydney.

Takada previously said the design was driven by a philosophy of integrating nature into the built environment.

"The concept for this development is born from our design approach to naturalising architecture," Takada said.

"The public realm benefits from biophilic design that integrates generous landscaping, and the development is optimised for natural daylight, airflow and water views to foster wellbeing, sustainability and spaces that foster community interaction."

Sunito has consistently described the project as a "city within a city", with a strong emphasis on creating a destination that extends beyond housing.

"We want to create a development that's not only to be seen, but to be experienced by the whole local community," he said.

The approval comes as Five Dock continues its transformation ahead of the opening of the Sydney Metro West line, with the new Five Dock station set to significantly improve connections between the Inner West, Parramatta and the Sydney CBD.&nbsp;

The precinct will also benefit from its proximity to the Parramatta Road corridor, nearby waterfront parklands and established retail and dining offerings that have made Five Dock one of Sydney's most tightly held Inner West suburbs.

Iwan Sunito secures approval for $1.9 billion Five Dock mixed-use precinct

The new <a href="https://www.apartments.com.au/new-apartments/yarraville-green-42-stephen-street-yarraville-vic-3013">Yarraville Green</a> development in Melbourne's inner west is showing that landscaping can be just as influential as architecture, with buyers responding strongly to the garden-first approach adopted from the outset by developer Excelon Projects and the project's design team.

Excelon appointed Six Degrees Architects and landscape architects SBLA to work collaboratively on the development, with a brief to create "a sustainable, design-led building with a focus on community."

That approach has resonated with buyers. According to Next Chapter Director Tom Hirini, who is leading the sales campaign, the landscaped communal garden has become one of the project's defining features, alongside its boutique scale and European-inspired cluster housing concept.

Local downsizers, right-sizers and established families already living in Yarraville and surrounding suburbs have accounted for the majority of purchasers.

[smartcode_project:default project_id=144913 project_image_fid=297740]

Yarraville Green will comprise 53 homes, including apartments and townhomes, arranged around the shared central garden to maximise connections to the landscaped open space. Parking has been moved underground, allowing the ground plane to be dedicated to greenery, pedestrian movement and communal spaces.

The landscape extends well beyond passive planting. Productive garden beds, a pergola, communal gathering spaces, garden sheds and a pet wash have all been integrated into the masterplan, creating spaces designed to encourage everyday interaction between residents.

[smartcode_project:default project_id=144913 project_image_fid=297741]

The interiors continue Excelon's focus on craftsmanship, incorporating bespoke elements by Melbourne artisans including leadlight detailing by Adadaz, hand-turned timber hardware by Auburn Woodturning and blown-glass lighting by Ruth Allen.

Sustainability has also been embedded throughout the project, with Yarraville Green targeting an average 7-star NatHERS energy rating through passive design principles, rooftop solar servicing common areas and rainwater harvesting for landscape irrigation.

[smartcode_project:default project_id=144913 project_image_fid=297735]

Construction continues to progress at Yarraville Green, with structural works well underway and framing works approaching completion under builder Balmain &amp; Co. The project remains on track for completion in mid-2027.

Apartments at Yarraville Green are currently priced from $625,000, while townhomes start from $1.4 million.

[smartcode_project_cta:default project_id=144913]

Garden-led design drives buyer demand at Yarraville Green

National diversified developer Fortis has officially launched Crest &amp; Walker, its latest Brisbane apartment development, with construction now underway on the 20-storey Newstead project.

Award-winning builder BINAH has commenced construction on the Bureau^Proberts-designed building, which will deliver a limited collection of 65 two and three-bedroom apartments on Kyabra Street.

[smartcode_project:default project_id=145922 project_image_fid=373556]

The project marks Fortis' fourth active residential development in Brisbane, following River House, which is nearing completion, alongside projects in New Farm and Hamilton as the national developer continues to expand its South East Queensland pipeline.

Fortis General Manager – Development Queensland Dan Boman said Crest &amp; Walker reflects the developer's long-term commitment to delivering design-led residential projects in Brisbane's established inner-city suburbs.

"We're proud to be strengthening our presence in Brisbane with Crest &amp; Walker, particularly in such a sought-after lifestyle destination as Newstead," Boman said.

"Every Fortis project is shaped by its context, and we approach each one with the respect and care it deserves.

"Our focus is always on creating places that feel connected to their neighbourhood and elevate the everyday experience for residents. Newstead continues to evolve as one of Brisbane's most sought-after urban communities, and Crest &amp; Walker reflects our ambition to contribute meaningfully to that story."

[smartcode_project:default project_id=145922 project_image_fid=373559]

Positioned between Gasworks Plaza and James Street, <a href="https://www.apartments.com.au/new-apartments/crest-walker-newstead-12-kyabra-street-newstead-qld-4006">Crest &amp; Walker</a> has been designed as a boutique residential address offering privacy and generous living spaces within one of Brisbane's most established lifestyle precincts.

The building features a contemporary brick podium softened by integrated landscaping, while the upper levels are characterised by restrained architecture and enduring materiality. Interiors have been designed to maximise natural light, acoustic performance and long-term liveability.

[smartcode_project:default project_id=145922 project_image_fid=373583]

Residences comprise spacious two and three-bedroom floorplans, with two-bedroom apartments priced from $1.55 million and three-bedroom, half-floor residences from $3.95 million.

Residents will have access to a wellness-focused rooftop featuring a swimming pool, sauna, steam room, landscaped dining spaces and outdoor lounge areas overlooking Newstead and the Brisbane CBD.

[smartcode_project:default project_id=145922 project_image_fid=373571]

Sales are being managed by Slaite Projects, with Fortis expecting strong demand from owner-occupiers seeking a high-quality, design-focused apartment in one of Brisbane's most tightly held inner-city suburbs.

Completion of Crest &amp; Walker is slated for late 2028.

[smartcode_project_cta:default project_id=145922]

Fortis expands Brisbane pipeline with launch of Crest & Walker in Newstead

Mortgages

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The Reserve Bank of Australia could raise interest rates eight times in the next two years, given the central bank’s inflation target, according to former board member John Edwards.
The RBA is possibly already considering a schedule of rate increases given its forecasts for inflation returning to target and economic growth rising to 3 percent against a stronger global backdrop, Bloomberg reported, referring to a column Edwards wrote on the website of the Lowy Institute for International Policy, where he is a non-resident fellow.
The central bank has held rates at a record low of 1.5 percent since last August.
At its June meeting, its Board decided to leave the cash rate unchanged at 1.5 percent, with Governor Philip Lowe saying that conditions in the housing market vary considerably around the country.
The long-term cash rate was about 3.5 percent -- below the 5.2 percent average over the past two decades -- and the RBA wants to start tightening in 2018 and reach its goal within two years, which would require four quarter-point increases each year, he said. 
“It seems to me that something like eight quarter percentage point tightenings over 2018 and 2019 are distinctly possible, if the RBA’s economic forecasts prove correct,” said Edwards, who was on the bank’s board until July 2016, Bloomberg reported.
“It’s possible the tightening could start earlier, or if not the tightening itself, at least the signaling which should precede it. We may be seeing a little of that now.”
Separately on the Money News show by Ross Greenwood on 2GB, Edwards, a former chief economist of HSBC, said the policy rate would not go higher than 3.5 percent because of the household debt.
When asked by Greenwood that some economies, like Canada and New Zealand, were pushed into recession by rate rises… and if a similar situation could arise in Australia, Edwards said that the RBA would proceed very cautiously. 
The first rate rises are likely not to come before February-March next year, opined Edwards and then increases every quarter.
Traditionally, the RBA changes rates in small increments and typically doesn’t commit itself to subsequent moves, making the market wary of predicting where the bank will be in a few years, Edwards said. 
In the current circumstances, he said we can reasonably assume:
<ul>
<li>the RBA considers its current rate to be exceptionally low </li>
<li>if the economy improves as it predicts, the next move will be up </li>
<li>if the economy was operating, as the RBA predicts, at 3 percent output growth and 2.5 percent inflation, it would think of a sustainable or natural policy rate of at least 3.5 percent </li>
<li>most importantly, it will want the policy rate increase to match the forecast improvement in Australia’s economic performance, so rising to at least 3.5 percent by the end of 2019</li>
</ul>
 He noted the risks of rate increases amid record high household debt, a fact even noted by RBA Governor Philip Lowe.
“The bigger the household debt, the more impact a quarter percentage point increase in the policy rate will have on household spending,” he said. 
“In the Australian case, it is certainly possible that high household home mortgage debt will crimp consumer spending if the policy rate returned to what was once considered a relatively low long-term rate.”
Still, Edwards noted that interest paid on Australian mortgages is much less than it was six years ago: while debt has increased, interest rates have fallen a lot. 
Payments are now 7 percent of disposable income compared with 9.5 percent in 2011, and 11 percent at the peak of the RBA tightening cycle before the 2008 financial crisis, he said.
He said tightening steps would be dictated by how the economy performs.
“If household spending weakness, if the long expected firming of non-mining business investment is further delayed, if the Australian dollar strengthens, if employment growth is persistently weak, then the trajectory of rate rises will be less steep and the pace less rapid.”
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jonathanchancellor-7SQnKwU6yx

Starting next March RBA could lift interest rates eight times over two years: Ex-board member John Edwards

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The Reserve Bank of Australia might need to cut interest rates several times due to the weakness in the labour market, according to Credit Suisse, a view which goes against the general market expectations.
While jobs growth in April beat expectations and the unemployment rate fell to a four-month low, full-time jobs edged down and the weakness in the detail would have been bigger if not for another month of bias from the sample rotation, Credit Suisse analysts, led by Damien Boey, said in a note to investors, the Business Insider reported.
The current cash rate is at a record low of 1.5 percent and many industry observers say the RBA will actually lift its cash rate, though this won’t be anytime soon. 
HSBC’s senior economist Paul Bloxham also recently suggested that the Q1 CPI numbers also suggest that rate rises are not likely any time soon. 
“The output gap is at levels historically consistent with another cash rate cut,” Credit Suisse said. “We believe there is a case for multiple cuts, because our measure of the output gap is based on upwardly-biased labour market data, and probably understates the degree of slack in the economy.”
That said, Credit Suisse felt the positive headline data means the RBA is yet to get a trigger to change its policy stance, the Business Insider said.
Latest ABS data showed Australia added 37,400 jobs, well above expectations for an increase of 5,000.
However, full-time employment fell by 11,600 over the month, while part-time employment surged by 49,000.
“Employment quality was even more questionable considering statistical distortions. For yet another month, the ABS rotated its sample in favour of cohorts with higher full-time employment to population ratios,” noted Credit Suisse.
“There is a notable net upward bias to the full-time employment data since late 2016. In our view, this means that if we were to remove upward statistical biases, the decline in full-time employment in April would have been even greater than officially reported.”
Employment leading indicators, based on business and consumer confidence, as well as trend growth in loan approvals point to a near-term bottoming out in the labour market, the bank said.
However, the official data, thanks to the statistical problem, has stolen the march and shows the jobs market has already bottomed out and when the sample bias reverses, it could start throwing out some ugly numbers.
Credit Suisse is not alone in blaming the data. Commonwealth Bank of Australia economists said the jobs report left them scratching their heads and pointed to the fact the job additions over the last two months were the equivalent of 1.2 million increase in US non-farm payrolls over the same period.
“Our cash rate model currently points to one further cut,” Credit Suisse analysts said.
“However, because of our belief that full-time employment gains have been significantly overstated, we think that our output gap proxy understates the amount of slack in the economy. We remain of the view that the RBA needs to cut rates multiple times this year.”
 
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RBA needs to cut interest rates several times: Credit Suisse

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It was only a matter of time before some property punters would cash in simply because property data is now pointing to a significant price correction.
The latest Reserve Bank of Australia (RBA) data has inflation adjusted wage growth sitting most uncomfortably around zero which spells disaster for households carrying excessively large mortgages. Time to cool the heels-cash in, and lock oneself into a lease for twenty-four months or so and watch what happens as there are some worrying signs out there, although some areas will see minimal change and others massive.
The RBA also announced this week that it was concerned how the financial system would handle a significant price correction in the apartment investment sector. Between now and June 30 there are a staggering 15,000 apartments settling so we are approximately 90 days away from knowing if the investment apartment sector is about to collapse.
With the clear majority of these sales to Chinese investors we will soon find out if they can raise the funds to settle without the assistance of the major banks who have walked away from overseas investors.
Li Ming, a co-director of Aussiehome, recently announced that “the off-the-plan apartment markets is now the worst I have seen in the last 10 years.” He then went on to say that almost 80 percent of Chinese buyers can’t settle on the Australian apartments they have purchased and now would prefer to walk away. In the clear majority of cases, these properties are now worth considerably less than when they were an artist’s impression on a glossy brochure.
Property is a confidence game so when we start reading negativity we also start seeing an immediate response in consumer sentiment. This would almost certainly explain why the RBA is now sounding clear warnings directed at the investment apartment markets. This usually only happens when their internal research is discovering anomalies in the markets so immediately they start sounding the fog-horns.
I well remember remarking back in December 2008 when Wayne “The World’s Best Treasurer” Swan strangely increased the off-the-plan ratio from 50 percent to 100 percent that this would not have a happy ending. Who knows I may well be wrong although I still stand by my predictions where nearly nine years on we are now starting to see the result.
This also coincides with Sydney house prices presently posting the highest annual growth in 14 years. We all know (well most anyway) that for property markets to change direction you need a trigger. Should Li Ming be correct about the apartment investment market this will have a significant impact on this newly created apartment investment market right across the eastern seaboard.
If this does happen our governments and banks need to play this intelligently by riding the storm out by becoming landlords. In the past, they have panicked (especially the banks) by engaging in massive sell offs which cause more problems. What should be happening now is the intelligent preparation of worst case scenarios where lenders should be looking at first home buyers to create lease and buy back packages.
Having said that the first problem with housing affordability is the rental markets despite governments going down the wrong track of building more homes. If rents are flat and even decreasing as was the case 15 years ago, then the pressure on tenants is removed as it then becomes cheaper to rent over owning. What we forget are the many solid arguments back then that clearly showed renting was a smarter option than buying – how quickly we forget.
Obviously with so many brand-new apartments set to hit the rental markets rents will fall – just imagine what would happen if the NSW government forced the 200,000 plus permanently vacant Sydney apartments onto the market?
The Victorian government has acted on this with the introduction of the Vacant Residential Property Tax (VRPT) which will address the permanently vacant properties across inner and middle suburbs of Melbourne. The VRPT will be levied at 1 percent, multiplied by the capital improved value of the taxable property. A property worth $650,000 would then be charged a VRPT of $6,500 which in my opinion is too low because the clear majority are wealthy which is why they are not interested in renting the property out in the first place.
The VRPT should be between 3 and 5 percent although the Victorian government knows only too well that a 1 percent VRPT won’t have a significant impact on overseas buyers which is why they introduced it.
On the flip side, the NSW government is looking to further increase stamp duty for foreign buyers which would be an absolute disaster – just ask the Canadian government who did precisely this and then managed to collapse their investment markets by upwards of 30 percent.
I don’t worry too much about the property markets, I worry more about how our elected politicians will respond to these challenges. Generation Rent should be watching these markets very closely.
ROBERT SIMEON is a director of <a href="https://www.rwm.com.au/">Richardson Wrench Mosman and Neutral Bay</a> and has been selling residential real estate in Sydney since 1985. 
He has also been writing real estate blog <a href="https://www.rwm.com.au/news/">Virtual Realty News</a> since 2000.
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robertsimeon-hRNTwJyXkQ

The big property shift is fast heading to a sell recommendation: Robert Simeon

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It was interesting - if a little alarming - to hear Shadow Treasurer Bowen this week noting that there was "no evidence" that investors are rushing in to the market in order to beat proposed changes to tax legislation relating to property.
It's unclear if the ALP just doesn't 'do' liaison with the real estate industry or whether this was a natural response to downplay a mildly accusatory question.
A huge number of investors I speak to are unsurprisingly concerned about prospective changes to tax legislation, and as such many are aiming to buy as much property as soon as they can.
This can be a problem with flagging future shifts in tax legislation well in advance, as we have also seen in Victoria over the past fortnight. 
Regardless of the political debate, it's on, and regulators may need to step in again later in the year. 
Housing finance surges on
The ABS reported the January housing finance figures on Friday morning which showed the value of investor lending tearing 28 per cent higher year-on-year.
So there's the evidence, lest anyone really needed it. 
Another surge in investor lending took total housing finance to comfortably its highest ever level both in seasonally adjusted and trend terms in the month January 2017. 
<a href="https://www.propertyobserver.com.au/images/2017/03/13/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/2017/03/13/A1.jpg" alt="">
One point that should be acknowledged is that these are January figures, and some steps have since been taken by lenders to cool the investment lending sector.
On this evidence, it's likely that more tweaks will be needed.
On a national basis, the monthly figures for the homebuyer market were relatively flat. 
Loan sizes can sometimes be lower in January, yet even in seasonally adjusted terms the value of owner-occupied housing commitments was down a notch in the month (-0.2 percent), despite an uptick in the number of loans.  
<a href="https://www.propertyobserver.com.au/images/2017/03/13/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/2017/03/13/A3.jpg" alt="">
Homebuyers around the traps
The national figures for owner-occupier commitments are being pulled down by Western Australia, where the number of commitments has been in a long downtrend from November 2013 (7,729) all the way through to January 2017 (5,803). 
<a href="https://www.propertyobserver.com.au/images/2017/03/13/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/2017/03/13/A5.jpg" alt="">
It's a similar story for the value of owner-occupier commitments in WA, which have dropped from $2.42 billion in 2014 to $1.94 billion. 
Finally, the average first homebuyer loan size was generally also a little lower over the Christmas period. 
<a href="https://www.propertyobserver.com.au/images/2017/03/13/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/2017/03/13/A2.jpg" alt="">
I'll take a look on Wednesday next week at where the investors are buying, but I can save you the suspense because the answer is Sydney and Melbourne.  
<a href="https://www.propertyobserver.com.au/images/2017/03/13/A4.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/A4.jpg" alt="">
The wrap
Housing finance continues to scale new monthly peaks, and the figures for investment lending will do little to quell the belief that APRA will be tapping on the shoulders of a few more lenders as this year progresses. 
That said, today's figures were for January and the most widely reported figures are seasonally adjusted, so there will be lots of attention directed at the next two months of data. 
 
PETE WARGENT is the co-founder of <a href="https://allenwargent.com/" target="_blank">AllenWargent</a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank">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" target="_blank">Four Green Houses and a Red Hotel</a>.
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Investors rush to beat potential tax changes: Pete Wargent

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RBA Governor Philip Lowe says inflation will only rise slowly but the combination of record high household debt to income when wages were growing slowly was a “sobering combination”.
Speaking at the Australia-Canada Leadership forum, Lowe said “households are carrying more debt than they have before and, at the same time, they are experiencing slower growth in their nominal incomes than they have for some decades. For many, this is a sobering combination”.
He said “wage growth has been subdued given the ongoing slack in the labour market” and there was “downward pressure on retail prices from intensified competition”.
Although, low level of interest rates means that the debt-servicing burdens are not that high at the moment.
He said with given that outlook, underlying inflation would only increase gradually.
“Our central forecast is for headline inflation to increase to above 2 per cent later this year, boosted by increases in oil and tobacco prices. The increase in underlying inflation is expected to be a bit more gradual.”
The RBA has stuck to its forecast of 3 percent economic growth over the next couple of years. 
“If inflation is low for a long period of time, it is certainly possible that inflation expectations adjust, making it harder to achieve the objective. At the moment though, I don't see a particularly high risk of this in Australia. The recent lift in headline inflation is helpful here and most measures of inflation expectations are within the range seen over recent decades,” he said.
In relation to the risks from additional borrowing, he said it was possible that continuing rises in indebtedness, partly as a result of low interest rates, increase the fragility of household balance sheets and hurt the overall economy.  
In summary, Lowe said “flexible inflation targeting with a medium-term focus remains the right monetary policy framework for Australia”. 
 
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High debt, weak wages a 'sobering combination', warns RBA’s Lowe

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The RBA have highlighted the concerns about the Brisbane property market, suggesting a significant increase in the supply of apartments.
They suggested that the supply increase has begun to affect prices and rents in the Queensland capital.
The minutes from the February rate decision, where the RBA decided to hold the rates at a record low 1.5 percent, also noted the prices and rents falling in Perth.
"The combination of increased supply and lower population growth had already depressed rents and apartment prices in Perth and, increasingly, Brisbane," the minutes read.
However, they say that activity in the Sydney and Melbourne housing market in the second half of 2016 had increased, as did investor housing loan approvals.
It was noted that the housing market activity in Melbourne and surrounding areas had been supported by strong population growth and improvements in transportation infrastructure.
They concluded the property wrap by suggesting some lenders were taking a more cautious attitude to lending in certain segments. 
 
 
 
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Brisbane apartment supply noted in February 2017 RBA minutes

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Loans.com.au said it will keep up its focus on the investor market despite recent moves by the Commonwealth Bank and its subsidiary Bankwest clamping down on refinancing by investors.
Marie Mortimer, managing director, said borrowers who are turned away by BankWest or CBA "should come to us instead because we have much lower rates and we still want their business.”
She said <a href="https://loans.com.au/" target="_blank">loans.com.au</a> had maintained its focus on the market through its investor package which cut rates for investors who brought over both their home loan and investment loan.
“We want people with both a home loan and an investment property loan to come to us so we are offering a market-leading rate on their investment loan to encourage that,” she said. 
The online lender has packages starting from 3.59 percent, compared to most banks’ investor loan rate of 4 percent or more.
Mortimer said BankWest’s move may be the next phase of a retreat from investment lending by the banks.
Bankwest said earlier in the week it will no longer accept applications from new customers seeking to refinance their stand-alone investment lending from other financial institutions.
BankWest said the move would impact a very small number of applications and existing customers would not be affected. 
A BankWest spokesperson was cited by Mortgage Business as saying, “Bankwest continues to assess investment lending applications from current and prospective customers who meet relevant criteria within risk appetite,” they said.
“This aligns with Bankwest’s commitment to supporting a stable national housing market and sustainable economy in line with regulatory guidance.”
Commonwealth Bank, Australia’s largest bank, followed Bankwest in halting applications for new refinancing for investor loans, in a move that could see other lenders in the industry follow.
In a notice to mortgage brokers, CommBank said they are “committed to consistently delivering the best customer experience for home buyers, upholding the highest level of professional standards, and meeting our responsible lending and regulatory obligations,” according to a story published in news.com.au.
Home Loan Experts’ managing director Otto Dargan was cited as saying the Commonwealth Bank had to act to meet the  Australian Prudential and Regulation Authority’s 10 per cent cap on growth in investment lending.
“If they are too far below it (the 10 per cent cap) then they are losing market share,’’ he said.
“If they go over it then APRA will require them to set aside more capital which is very costly for the bank.”
He said CBA had “missed the mark” and had to take immediate action to reduce its investment lending.
Investment home loans represent 35 percent of CBA’s mortgage lending.
Mortimer of loans.com.au added that, “In recent months, a number of lenders have raised their rates or tightened their lending criteria in this space because of fears that they are over-exposed to investors.” 
“But we are excited about the prospects for the investment market and working as always to build long-term relationships with new property investors.”
During the month of December, lending to property investors across Australia grew at 0.8 percent, or at a 10.1 percent annualised rate, she said.
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Loans.com.au woos investors amid CBA-Bankwest moves to shun refinancing

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<div>GUEST OBSERVER</div>
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<div>Australian Finance Group (AFG) released its index for the final quarter of 2016, reporting more than $15 billion in mortgage lodgement volume.</div>
The index, which is not seasonally adjusted, rose by 9.9 percent over the year to December.
<a href="https://www.propertyobserver.com.au/images/2017/01/12/AFG5.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/2017/01/12/AFG5.jpg" alt=""> Nationally, the average mortgage size of $488,875 was up from $475,083 from the prior year.
<a href="https://www.propertyobserver.com.au/images/2017/01/13/AFG2.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/2017/01/13/AFG2.jpg" alt=""> 
<div>"Tale of two seaboards"</div>
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<div class="separator">Over the year there was strong growth in lodgement volumes in both New South Wales (up 10 per cent) and Queensland (18 per cent), but the real driver of growth was Victoria with a substantial 23 percent rise. </div>
<a href="https://www.propertyobserver.com.au/images/2017/01/13/AFG3.jpg" target="_blank">Click to enlarge</a>
<div class="separator"><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/2017/01/13/AFG3.jpg" alt=""></div>
 Offsetting this, investors have backed off from Western Australia and the Northern Territory.
<a href="https://www.propertyobserver.com.au/images/2017/01/13/AFG4.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/2017/01/13/AFG4.jpg" alt=""> 
<div>In the December quarter the average mortgage size scaled fresh heights in each of the three most populous states. </div>
<div> </div>
<div><a href="https://www.propertyobserver.com.au/images/2017/01/13/AFG1.jpg" target="_blank">Click to enlarge</a></div>
<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/2017/01/13/AFG1.jpg" alt=""> Investor rebound Finally, the share of AFG's market relating to investors ticked back up to 34 percent.
<a href="https://www.propertyobserver.com.au/images/2017/01/13/AFG6.jpg" target="_blank">Click to enlarge</a>
<div class="separator"><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/2017/01/13/AFG6.jpg" alt=""></div>
<div>The wrap</div>
<div> </div>
<div>While activity in South Australia was flat, the weakness of the WA market in 2016 was evident, with the recent introduction of a new first home owners grant in the state designed to combat this. </div>
<div> </div>
<div>Loan to value ratios across the year were fairly consistent at around 69 percent, about 0.7 percent lower than in 2015.</div>
<div> </div>
<div>Over the year non-major lenders have been pinching market share away from the main players, a trend that AFG expects to continue into the new year as consumers increasingly recognise the potential benefits of using a broker.</div>
<div> </div>
<div>PETE WARGENT is the co-founder of <a href="https://allenwargent.com/" target="_blank" rel="nofollow">AllenWargent</a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank" rel="nofollow">blogger</a>. </div>
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NSW mortgage size passes $600,000 average: Pete Wargent

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New borrowers should be better placed to withstand any adverse shocks to income or decline in housing prices than would otherwise have been the case, the latest RBA research suggests.
Its comments comes noting lenders have announced many changes to a range of price and non-price lending terms and conditions to strengthen their lending practices in response to supervisory expectations, according to the position paper entitled Macroprudential Policy Frameworks and Tools.
<a href="/images/2016/12/15/Graph%205.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2016/12/15/Graph%205.jpg" alt="">
It noted by April 2016, the pace of investor housing credit had declined from its recent peak of about 11 per cent to just below 5 per cent on a six-month annualised basis (Graph 6).
<a href="/images/2016/12/15/Graph%206.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2016/12/15/Graph%206.jpg" alt="">
It also noted loan approvals for investor housing have increased over recent months, accompanied by an increase in housing price growth, driven by Sydney and Melbourne in particular.
"Even so, the earlier tightening in lending standards has helped to increase the resilience of household sector balance sheets, and hence also those of lenders, as new borrowers should be better placed to withstand any adverse shocks to income or decline in housing prices than would otherwise have been the case."
The paper noted the lenders' many changes were to a range of price and non-price lending terms along with conditions to strengthen their lending practices in response to supervisory expectations.
"In particular, interest rates for both new and existing investor loans were increased,10 high-LVR lending.
"There is now a differential between the indicator rate for owner-occupier and investor housing loans for the first time since 1996."
The paper advised it was important new borrowers "do not overstretch themselves to purchase property or rely on expectations of future increases in housing prices to enable them to do so." 
The paper was written by David Orsmond and Fiona Price. The paper was intended to make the results of current economic research within the Bank available for discussion and comment, but the views expressed are those of the authors and not necessarily those of the Bank.
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New borrowers ought be able to withstand adverse shocks: RBA research

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The Reserve Bank Board meets next week on October 4. There is little prospect of the Board deciding to move rates. 
Since rates fell to 3% in December 2012 all six subsequent cuts have been in the February/May/August months. 
Those months, along with November, allow the RBA to respond to fresh information on inflation – printing quarterly usually around one week before the Board meeting. 
Those months also coincide with the quarterly Statement on Monetary Policy where the Bank releases revised forecasts for growth and inflation. 
Forecast changes at that time are usually used to justify the decisions either revealing significant revisions to growth or inflation forecasts. Based on this recent practice it would be extraordinary to see a policy change in October. 
This meeting also marks the first time in the Chair for Governor Lowe. 
I have written extensively about the need for the new Governor of the Reserve Bank to adjust the inflation target from 2-3% to 1-3% to reflect the reality of lower global inflation relative to the mid-1990’s when the target was originally successfully adopted. 
However, as noted at the time, I held out little hope that the new Governor would take my advice. Accordingly I was not surprised to see last week’s announcement that the target had been “confirmed” as 2-3%.
However there has been a significant change from “on average over the cycle” to “over time”. The Governor also emphasised in his Statement to the House of Representatives last Thursday that “the main drafting change is to make the link between monetary policy and financial stability a little more direct”.
If we weigh those two changes together they go some way to achieving the objective that I was most concerned about. 
My concern was that the new Governor might, when confronted with an impossible task of lifting inflation to above 2.5% in order to “average” 2.5% over the cycle might unnecessarily impact asset markets. By using the vague term “over time” and linking policy directly to financial stability (read asset markets) he has allayed much of my concern on that issue. 
Markets are likely to eventually scale back prospects for further rate cuts given these developments. 
We should not be surprised that this new Governor has chosen that approach. And we should certainly not dismiss this change in approach as “window dressing”. 
Every great professional has a seminal piece of work that they can refer to as a “defining moment”. 
I would argue that such a time came for a young economist, Philip Lowe, who had been seconded from the RBA to the Bank of International Settlements in Basel in the early 2000’s. 
In July 2002 he published a paper in the BIS Working Papers series. 
He argued in his paper, that “financial imbalances can build up in a low inflation environment and that in some circumstances it is appropriate for policy to respond to contain imbalances.....while low and stable inflation promotes financial stability, it also increases the likelihood that excess demand pressures show up first in credit aggregates and asset prices, rather than in goods and services prices.
 Accordingly, in some situations, a monetary response to credit and asset markets may be appropriate to preserve both financial and monetary stability.” He further concluded that “greater co-operation between monetary and prudential authorities is important, not just in management of crises but also in preventing their emergence.” (Philip Lowe and Claudio Borio, BIS Working Papers, no. 114, July 2002).
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Around that time the US housing market was beginning to “stir”. Chairman Greenspan had been cutting the Federal Funds Rate in the face of weak inflation. 
The Federal Funds Rate eventually bottomed out at 1% by June 2003 (a year after Lowe’s paper was published). When Greenspan eventually got around to lifting the Federal Funds Rate in June 2004 he moved at a leisurely and predictable 0.25% per meeting until June 2006 when the Federal Funds rate peaked at 5.25%. 
In Greenspan’s defence it has been argued that lifting the Federal Funds Rate from 1% to 5.25% over 2 years should have had more traction with the bond market – the US 10 year rate only increased from 4.6% to 5.2% over the period. This muted response has generally been attributed to Chinese purchases of US Treasuries over that period as China’s foreign reserves boomed. 
Mortgage rates in the US are priced off long bond rates rather than the Federal funds rate so the response in the mortgage market to Greenspan’s policy was muted. However, if policy had been more pre- emptive, less orderly and predictable the traction with the bond market may have been much more effective. 
Greenspan had clearly ignored the signals which had been emphasised in Lowe’s work – over the 4 years from end 2000 to end 2004 US house prices (Case Schiller Index) had lifted by 46%! 
Greenspan’s response to critics who noted the build-up in pressures particularly in the US housing market was that his objective was to maintain low inflation and if there were any associated imbalances in other markets he could “clean up” in the aftermath of any asset market disturbance. Young Lowe clearly disagreed. 
That paper, all those years ago, gives us a clear insight into the values of the new Governor. Arguably, if his warnings had been heeded by Chairman Greenspan back in 2002 (note that he only started rising rates in June 2004) the world may have avoided the Global Financial Crisis. 
We expect that these values will be an important driver of future policy. Lowe’s adjustment to the agreement with the Government to include financial stability has its origins in that paper all those years ago. 
The balance between driving towards a higher inflation target and over stimulating asset markets (including housing) will take on a sharper edge than we have seen in the past. He is also likely to be open to the use of further macro prudential tools (as highlighted in that paper) should that be seen to be necessary. 
Bill Evans, Chief Economist at Westpac
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