Sydney may hold the dubious honour of being the world’s second most expensive housing market, outpriced only by perennial leader Hong Kong, but its appetite for prestige property shows no sign of slowing. At the heart of it all sits Sydney Harbour, where waterfront apartments command eye-watering prices that show few signs of slowing.

According to Westpac’s August Prestige Market Overview, the city’s luxury sector continues to outperform expectations, with top-end values rising 6.2 per cent across 2024. Over the past decade, prices for Australia’s most exclusive apartments have surged more than 40 per cent, while available listings remain nearly 20 per cent below pre-pandemic levels, data from Cotality reveals.

Much of Sydney’s recent luxury boom has centred on Circular Quay and Barangaroo, two glittering precincts now home to some of the country’s most expensive real estate. Yet one of the city’s most iconic waterfronts has, until now, remained surprisingly underdeveloped: Darling Harbour.

Long known as a playground for tourists and locals, Darling Harbour has never truly offered the chance to live there, until now. Recognising the untapped potential of this prime harbourfront, development powerhouse Mirvac has taken the lead in reimagining the precinct. The company is at the centre of a wider $15 billion revitalisation that will elevate Darling Harbour’s prestige to rival its glamorous neighbours.

At the heart of the transformation is Harbourside Residences, a $2 billion glass tower rising from the redeveloped Harbourside Shopping Centre. The project brings together an international design collaboration between Norwegian architecture firm Snøhetta and Australian practice Hassell, with interiors by Bates Smart. The tower will house 260 residences, with the yet-to-be-released penthouse collection, six sub-penthouses and three full-floor penthouses, expected to rank among Australia’s most exclusive homes.

[smartcode_project:default project_id=141327 project_image_fid=352378]

Buyers have already responded in force. The project’s first apartment release late last year became the most successful launch in Mirvac’s 54-year history, recording more than $700 million in sales in just one weekend, with more than $800m total pre-sales to date. Prices ranged from $1.7 million to $25 million, with more than 40 per cent of purchasers being repeat Mirvac buyers, a testament to the developer’s reputation for quality and delivery.

Mirvac has now unveiled the tower’s most coveted homes: a collection of three- and four-bedroom residences positioned across the upper levels of the 48-storey building. From this vantage point on the western edge of Sydney Harbour, residents will enjoy a striking and rarely seen perspective of both the city skyline and the water.

[smartcode_project:default project_id=141327 project_image_fid=352369]

Inside, luxury extends far beyond the apartments themselves. Harbourside Residences will feature wellness amenities on par with a five-star resort, including a traditional sauna, steam room, ice bath, indoor lap pool, gymnasium, and yoga and pilates studio. Private leisure spaces cater to the growing desire for exclusive community living, with a residents’ lounge, private dining rooms with commercial and show kitchens, a cinema room, and even a golf simulator.

Outdoors, the experience is just as impressive. Landscaped garden terraces frame a lagoon-style pool that looks directly across the harbour, offering some of the most intimate city views anywhere in Sydney.

[smartcode_project:default project_id=141327 project_image_fid=352372]

Construction of Harbourside Residences is well underway. Mirvac, which designs, builds, and delivers its own projects, a model that reduces risk and ensures consistency, expects completion in late 2027. When finished, it will not only redefine Darling Harbour living but reshape Sydney’s skyline once again.

[smartcode_project_cta:default project_id=141327]

Joel Robinson

Sydney’s next great waterfront: Darling Harbour steps into the spotlight

Boutique development and construction firm <a href="https://www.apartments.com.au/developers/hsn-property-group">HSN Property Group</a> is the latest to seek a new apartment development through the NSW Government's&nbsp;Housing Delivery Authority.

They've filed a State Significant Development Application for a nine-storey building across nine consolidated lots on <a href="https://www.apartments.com.au/new-apartments/2-16-spencer-street-rose-bay-nsw-2029">Rose Bay's Spencer Street</a>, just 400m from the centre of the affluent suburb.

“The site’s location and context make it well suited to support a more diverse and sustainable residential offering in the area,” the developer stated in community consultation materials.

The plans are for 54 apartments, 14 of which will be dedicated to affordable housing. There will be a mix of two- and three-bedroom apartments.

The proposal aims to contribute to housing diversity in the Woollahra Local Government Area while taking advantage of recent Low and Mid-Rise Housing Reforms introduced under the NSW Housing SEPP, according to the Scoping Report prepared by Urbis.

The architecture, led by <a href="https://www.apartments.com.au/architects/mhn-design-union">MHNDU</a>, reflects a "contemporary design approach sensitive to the character of Rose Bay." Communal amenities will include a wellness area with a pool and sauna, a gym, a wine lounge, and landscaped spaces with barbecue facilities.&nbsp;

“The proposed development will offer a suite of premium communal amenities designed to enhance resident wellbeing, foster social connection, and promote a healthy lifestyle,” the project team notes in its public materials.

Three levels of basement parking are planned, and EV charging facilities will be included, aligning with sustainability and transport objectives. A comprehensive traffic study is underway to assess and manage local impacts.

With 54 apartments, the proposal by HSN will be one of the largest developments in Rose Bay for decades. It tops the 50 apartments soon to launch by Orosi on <a href="https://www.apartments.com.au/new-apartments/the-avenue-rose-bay-1-the-avenue-nsw-2029">The Avenue</a>, near the Royal Sydney Golf Club.&nbsp;

First look: HSN plans Spencer St, Rose Bay apartment project

Lendlease’s Barangaroo South precinct is officially complete, marking the culmination of a 15-year urban regeneration project that has revitalised Sydney’s harbourfront.&nbsp;

In 2009, the NSW Government’s Barangaroo Delivery Authority appointed <a href="https://www.apartments.com.au/developers/lendlease-development">Lendlease</a> as developer to transform what was once an inaccessible container port on the western edge &nbsp;of Sydney’s CBD into one of the city’s most thriving mixed-use destinations. Today, Barangaroo South is home to more than 1,800 residents, 23,000 workers, 95 retailers and welcomes 33,000 visitors each day. The precinct stands as an international benchmark for large-scale urban regeneration.&nbsp;

International Towers Sydney, the three flagship commercial buildings at the centre of &nbsp;Barangaroo South, together with engineered timber buildings Daramu House and &nbsp;International House, attracted major corporate tenants from the outset, including Westpac, &nbsp;PwC and KPMG, who are still there today. These workplaces remain some of the most &nbsp;sought after in Sydney’s CBD with over 95 per cent occupancy– a testament to the appeal of world-class, modern infrastructure alongside the precinct’s dining and entertainment that &nbsp;are a drawcard for businesses.&nbsp;

One Sydney Harbour, the three luxury residential towers designed by world-renowned architect Renzo Piano, has achieved more than $4 billion in sales since its launch in 2019, while setting new Australia property price records. This includes the three-level penthouse that crowns Residences One which sold for more than $141 million in 2019 – the most expensive individual residential property ever sold in Australia. &nbsp;

[smartcode_project:default project_id=139801 project_image_fid=349150]

Barangaroo South is also Australia’s first mixed-use carbon-neutral development, an accolade achieved through energy-efficient and innovative infrastructure, including a district cooling plant with a harbour water heat rejection system, a recycled water &nbsp;treatment plant, onsite solar and an embedded electricity network.

The precinct has maintained its Climate Active Carbon Neutral certification since 2019, affirming its &nbsp;reputation as the gold standard in large scale, sustainable urban renewal. Additionally, its &nbsp;world leadership status has been validated by the Green Building Council of Australia’s &nbsp;6 Star Green Star Communities recertification (Pilot v.2).

[smartcode_project:default project_id=139801 project_image_fid=349157]

First Nations cultural values were embedded throughout the planning and delivery of the project. The precinct honours Barangaroo, a prominent First Nations woman, through its &nbsp;name. Public art, street names, and design elements across the precinct reflect and &nbsp;celebrate First Nations cultures and connections to Country.&nbsp;

The project's completion positions Barangaroo South as a legacy urban transformation delivered through long-term partnerships and world-leading urban regeneration and placemaking capabilities. &nbsp;

[smartcode_project:default project_id=139801 project_image_fid=349154]

Tony Lombardo, Group CEO Lendlease, said&nbsp;Barangaroo South represents one of the most significant urban regeneration projects in Australia.

"[It] demonstrates what can be achieved through an ambitious vision, innovative placemaking, long-term commitment and strong partnerships. The precinct has changed the face of Sydney's waterfront, established new benchmarks &nbsp;for sustainable development, and provided a model for urban regeneration that continues &nbsp;to inform our approach to creating places that deliver long-lasting value.”&nbsp;

Tom Mackellar, CEO Development Lendlease, said&nbsp;Barangaroo South has reconnected the city to its harbour in a way that seemed unimaginable 15 years ago and turned it into a thriving precinct where people can live, work and gather on the harbour’s edge.&nbsp;

“This precinct is the result of countless contributions, led by the NSW Government who set the ambition, supported by investment partners who believed in Lendlease’s vision, imagined by architects and designers, shaped by consultants and artists, and brought to &nbsp;life by our dedicated construction teams. &nbsp;

“What we’ve created here is more than buildings – it’s the best of placemaking, sustainability, arts and culture and quality design. Barangaroo South has become an integral part of Sydney that will serve our city and economy for generations.”

Staff Writer

Barangaroo South’s 15-year transformation of  Sydney’s waterfront officially complete

CBE Asia Pacific has lodged plans for a prominent corner site in Fitzroy North, with a proposal that integrates state-significant affordable housing alongside heritage adaptation and new retail.

The application covers a consolidated 2,024 sqm parcel at 201–215 Queens Parade and 6–12 Dummett Crescent. The site includes the heritage-listed Former Clifton Motor Hill Garage, fronting Queens Parade, and vacant land to the rear abutting Dummett Crescent.

According to planning documents prepared by proUrban, the proposal seeks approval for a 12-storey residential building comprising 98 apartments, including a component of affordable housing, over a ground floor retail podium integrated within the heritage structure. Approximately 780 sqm of retail space will occupy the ground floor, while residents will have access to over 850 sqm of communal amenity.

The built form presents as two connected volumes: a 12-storey tower addressing Dummett Crescent and a five-storey volume fronting Queens Parade, the latter consistent with a separate Heritage Victoria permit granted in 2023. The tower reaches a maximum height of 38.26 metres, with upper-level setbacks of 14 metres from the western boundary to reduce visual bulk. A 1.5-metre footpath widening is proposed to Dummett Crescent Lane.

Parking is provided across four basement levels, accessed via Dummett Crescent, with a total of 142 car spaces and 143 bicycle spaces.

The architectural response by <a href="https://www.apartments.com.au/architects/cht-architects">CHT Architects</a> is framed by a need to reconcile new density with a sensitive heritage overlay. The Former Clifton Motor Hill Garage, identified as a place of State heritage significance, will retain its key façades, with demolition and reconstruction limited to approved elements.

As noted in the Heritage Impact Assessment, the proposal remains consistent with the Heritage Victoria permit, which allows "partial demolition, reconstruction and new works, involving the construction of a five-storey multi-use development and three basement levels".

Affordable housing has been embedded into the proposal under Clause 53.23, with specific apartment allocations aimed at enhancing housing diversity within the Queens Parade Activity Centre.

"The proposal is generally consistent with the relevant policy objectives and the intent of the Yarra Planning Scheme," proUrban states in its planning assessment, citing its alignment with strategic documents including Plan Melbourne and Victoria’s Housing Statement.

CHT Architects' plans emphasise a tiered design that acknowledges the site's varied interfaces—from the elevated Heidelberg Road ramp reserve to the recently built Clifton Views aged care facility to the north-east.

CBE Asia Pacific has not been previously active in this precinct, but the project joins a wave of higher-density residential proposals along the Queens Parade corridor, spurred by Melbourne’s broader push to increase affordable housing in well-connected inner-urban areas.

The site benefits from direct access to the Queens Parade tram corridor and proximity to Clifton Hill Station (approximately 200 metres), as well as green open spaces including Mayors Park and Raines Reserve. Clifton Hill Primary School and the Queens Parade retail village lie within walking distance.

First look: CBE Asia Pacific plans 100-apartment Jenkin House on Queens Parade, Fitzroy North

ALT Pasta, one of Melbourne’s most beloved inner-city pasta bars, has been confirmed as one of the first tenancies for the highly anticipated <a href="https://www.apartments.com.au/new-apartments/comme-prahran-182-194-commercial-road-prahran-vic-3181">Comme Prahran</a> development, marking an exciting next chapter for the cult favourite as it prepares to expand into the heart of <a href="https://www.apartments.com.au/developments/prahran-vic-3181">Prahran</a>.

Fresh off being named National Best Italian Restaurant at the 2025 Restaurant &amp; Catering Hostplus Awards for Excellence, ALT continues to solidify its reputation as a quietly confident leader in Melbourne’s dining scene. Lauded for its reinterpretation of Italian pasta through a Korean and Japanese lens, the restaurant has grown into a staple since opening three years ago, and its new Prahran outpost will only deepen its local impact.

“From the very beginning, ALT has been about respect - for tradition, for ingredients, and for the process,” shares Mino Han, ALT’s founder, a Korean-Australian chef whose vision is shaped by cultural duality and craftsmanship.&nbsp;

“We’re not trying to reinvent the wheel, just make something beautifully familiar, feel quietly special,” added Han.

[smartcode_project:default project_id=108413 project_image_fid=353585]

Positioned at the entrance to Comme Prahran and directly opposite the iconic Prahran Market, the new venue will celebrate the interplay between casual comfort and elevated detail. Designed in collaboration with Rooftop Architecture, the same team behind ALT’s flagship city location, the space will mirror the neighbourhood’s laid-back energy while staying true to the brand’s understated refinement.

Diners can expect a frequently changing menu that takes advantage of the market’s daily produce, along with set menu offerings exclusive to this location. A distinctive chef’s table and open kitchen format are also in the works, allowing guests to experience ALT’s signature intimacy and transparency in a new light.

ALT Prahran won’t replace the original venue; rather, it complements it.

“Our city site is like our heritage bottle; it’ll age gracefully. Prahran is where we’ll play, explore new ingredients, and bring something special to the community,” Mino notes.

[smartcode_project:default project_id=108413 project_image_fid=353584]

For Comme Prahran, a boutique development by Leeka that blends heritage with multi-dimensional wellness, ALT Pasta’s arrival signals a meaningful addition to its vision of cultural connection, food-first living, and local engagement.

“Being part of Comme is more than just opening a second venue. It’s about contributing to a neighbourhood with character, history, and a strong sense of community. That’s something we deeply relate to,” says Mino.

Sustainability and cultural identity are deeply embedded in the ethos of ALT. From ingredient sourcing to interior design, the new location will reflect both environmental mindfulness and a spirit of inclusion, embodying the values of Melbourne’s diverse, forward-thinking culinary scene.

Comme Prahran is scheduled for completion in late 2027, with ALT Pasta expected to be among the first tenancies to open its doors shortly after.

[smartcode_project_cta:default project_id=108413]

National best Italian restaurant ALT Pasta to open at Comme Prahran, bringing refined familiarity to Melbourne’s culinary heart

National BEST Italian restaurant ALT Pasta to open at Comme Prahran

Anz Bank

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The ANZ have followed suit in the so-called battle of the big four banks.
They've only cut their standard variable rates by 0.14 per cent. 
The move follows <a href="/expert-insights/finance/nab-and-cba-fail-to-pass-on-full-rate-cut">CBA cutting 0.14 per cent and NAB 0.15 per cent</a>. 
Westpac have just <a href="/expert-insights/finance/westpac-the-final-big-four-bank-to-fail-to-pass-on-full-rate-cut">cut their rates by 0.15 per cent</a>.
“This was a considered decision balancing the needs of our customers in a low rate environment as well as the performance of our business and our role in stimulating the economy," ANZ Group executive Australia retail &amp; commercial, Mark Hand said.
<ul>
<li>For Standard Variable Rate Owner Occupiers paying Principal &amp; Interest the Index Rate will reduce by 0.14%pa to 4.79%pa</li>
<li>For Standard Variable Rate Investors paying Interest Only the Index Rate will reduce by 0.25%pa to 5.74%pa</li>
</ul>
Changes to variable rates are effective 11 October 2019.
<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/2019/10/2/ANZ%20Rate%20Cut.jpg" alt="">
“We were able to match the full rate reduction in July and the majority in June, however the dynamics of record low interest rates has resulted in a reduction in variable home lending rates of between 0.14%pa and 0.25%pa this time around.
“While we recognise many customers will use this as an opportunity to pay down their existing home loans faster, we hope this provides the economic stimulus the Reserve Bank is wanting to generate. 
“We have also announced a new fixed rate of 2.98%pa for home owners paying principal and interest with either two or three year terms available from tomorrow. This is the lowest residential rate on record for ANZ,” Mr Hand said.
The new standard variable rate for owner occupiers paying principal and interest will come in to effect on October 11, bringing it to 4.79 per cent. 
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jrobinson-rf4aSBido9

ANZ cut interest rates by just 0.14%

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The ANZ Bank has revised its forecast and now sees the bottoming of the housing market "in the coming months" following the policy turnaround. 
Economists Felicity Emmett and Adelaide Timbrell have forecasted prices will rise modestly through to the end of 2019.
They expect a three percent growth in 2020.
"After a period of significant weakness, house prices appear to be stabilising," their latest Australian Housing Update read.
"Sydney prices have fallen 15%, while Melbourne’s are down 11%," they advised.
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"Brisbane prices have fallen only modestly, while Adelaide prices have been broadly stable.
"Perth remains weak, but Hobart has been a standout.
They cite the election result, back the back RBA cash rate cuts and APRA loosening their lending serviceability have all contributed to the quickening of the end of the downturn.
"All of these factors have helped to shift sentiment from one of pervasive negativity to cautious optimism," Emmett and Timbrell said.
They warned however against a property boom that we saw from 2012 to 2017.
<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/2019/7/16/Capital%20city%20prices%20v%20auction%20results%20ANZ.jpg" alt="">
"While the outlook definitely looks more positive, we do not expect a V-shaped recovery for prices," the report noted.
"Our view for some time has been that the tightening in credit has been the major driver of weakness, and while there has been some easing at the margin, changes to the use of Household Expenditure Measure (HEM) and the introduction of comprehensive credit reporting will offset some of the impact.
"Moreover, there is still a substantial amount of supply coming on stream, particularly in Sydney where the rental vacancy rate is at a 15-year high.
"This all suggests that the recovery is likely to be a fairly modest one.
 
 
 
 
 
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ANZ sees bottoming of the housing market in coming months

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An ANZ retail banking facility in Mona Vale failed to sell at Burgess Rawson auction this morning.
It was passed in at $5.7 million
Situated at 10-12 Bungan Street, the building is leased to ANZ for 10 years until 2025 with options to 2040.
The building recently underwent building upgrades as well as an ANZ fitout to bring it up to corporate standards.
Net income on the property is currently $260,549 with 3.5% annual rent increases.
The tenant pays all outgoings.
The listing notes there is proposed zoning uplift allowing future development potential (STCA).
<img src="https://www.urban.com.au/images/2018/10/15/ANZ%202.JPG" alt="">
Set on a 294 square metre block, the two storey building last sold for $2.02 million in 2000.
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j.ballantyne1990-6AQqhLzZaK

ANZ premises in Mona Vale fails to sell

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An ANZ retail banking facility in Mona Vale is set for October 23 auction.
Situated at 10-12 Bungan Street, the building is leased to ANZ for 10 years until 2025 with options to 2040.
The building recently underwent building upgrades as well as an ANZ fitout to bring it up to corporate standards.
Net income on the property is currently $260,549 with 3.5% annual rent increases.
The tenant pays all outgoings.
The listing notes there is proposed zoning uplift allowing future development potential (STCA).
<img src="https://www.urban.com.au/images/2018/10/15/ANZ%202.JPG" alt="">
Set on a 294 square metre block, the two storey building last sold for $2.02 million in 2000.
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ANZ premises in Mona Vale set for auction

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Jo Masters, the senior economist at ANZ, has gone against no movement consensus with her big call that there will be two interest rate rises this year. 
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She forecasts the RBA will take the cash rate from 1.5 per cent to 2 per cent during 2018.
Masters, the Chatswood based tennis playing mother of two, tips the first central bank move is likely to be in May, with one more in the second half of the year. She sees none happening in 2019.
She concedes it does depend on the February wage growth data release.
It will be the first rate hike in eight years, coming at a time when household debt to disposable income is at record highs.
Master's wonders just how households will respond noting it will be critical for retail consumption and ofcourse the housing market.
Masters operates by the view that its always better to have a view and be wrong, than have no view at all.
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<div class="m_8380867177741228828gmail-cq-article-content-paras m_8380867177741228828gmail-section">
 
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ANZ's Jo Masters makes non-consensus 2018 cash rate call

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ANZ economists have suggested the slowdown in Canada’s extended property market boom could be a roadmap for future Australian housing market direction.
“Canada is arguably ahead of Australia in its economic and policy cycles, so watching developments there can be useful for those monitoring the Australian economy,” according to ANZ economists David Wilson and Jo Masters.
They noted house price growth in Canada has halved in the last year.
“Canada is nine months ahead in terms of monetary tightening,” Ms Masters told Fairfax's Domain, pointing to two recent interest rate hikes in Canada.
ANZ’s prediction since September has been that the Reserve Bank of Australia will hike twice in 2018. 
ANZ Bank predicts the Reserve Bank will raise official interest rates by 0.5 percentage points next year as the economy gradually improves, with the first hike tipped for May by ANZ economists David Plank and Felicity Emmett.
Canadian interest rates have come off a lower base than Australia, with hikes in July and September only taking the official cash rate to 1 per cent.
They forecast the Australian cash rate will be lifted by 0.25 percentage points in May, followed by another hike in the second half of the year, and then it will be be left unchanged over 2019 so as not to crunch spending of highly-indebted households.
Previously, ANZ was not forecasting any rate hikes in 2018.
“Canada recently released additional macro-prudential measures for the property sector," Ms Masters noted.
"These are likely to have a material impact on mortgage originations, housing affordability and property price growth in 2018.
"The hottest property markets in Canada – Vancouver and Toronto – are likely to be hit the hardest by these measures," Ms Masters said.
Already the data has signalled the downturn has set in.
Toronto’s monthly home sales - in Canada’s biggest city - have fallen by as much as 40 percent in volume, the largest annual decline since 2009. There have been four months of price declines in Toronto.
The price of the average home in Toronto fell 4.6 percent in July, the biggest monthly decline since at least 2000. From August to September, the city experienced a 2.7 percent drop. 
The monthly declines have not been enough to plunge annual gains into decline.
With Australian household debt sitting at record highs, the RBA faces uncertainty about how consumer spending will respond to slowing house-price growth, the ANZ said.
It recently advised about 38% of its home loan customers were repaying principal faster than required. 
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ANZ looks to Canada housing market as potential Australian roadmap

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ANZ said it has been increasing its owner-occupied home loans business much faster than the market while posting a cash profit increase of 5.3 percent to $1.79 billion for its third quarter ended June 30.  
In its third quarterly trading update, the bank said its lending growth in the owner occupied segment was 30 percent above the system average.
“We’ve said for some time as a strategy we want to be the best bank for people that want to buy and own a home and so we’ve been growing our business in owner occupied home loans much faster than the market,” ANZ CEO Shayne Elliott told the bank’s in-house news publication BlueNotes.
<a href="https://www.propertyobserver.com.au/images/2017/08/18/ANZmain.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/08/18/ANZmain.png" alt="">
He said the bank was re-weighting its portfolio towards that segment and “we’re really comfortable with that”. 
“The way we’re doing that is just really is focus and great product and distribution through our branch network,” added Elliot. 
<a href="https://www.propertyobserver.com.au/images/2017/08/18/ANZSummary.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/08/18/ANZSummary.png" alt="">
ANZ said it was also on course to meeting macro prudential requirements for mortgage growth.
Investment lending was at 80% of the combined industry average.
Its research arm recently said that the slowdown in investor borrowing was continuing, and quarterly annualised growth sits at 6%.
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jonathanchancellor-7SQnKwU6yx

ANZ's owner-occupier lending growing faster than rivals

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ANZ Banking Group has issued a warning about shares being issued by developers to property investors that side-step planning laws and can’t be used as security for loans.
Calling these securities “unacceptable" the bank has issued a confidential memo to its banking and mortgage broker networks warning about the deals that are being detected around Sydney's inner suburbs, the Australian Financial Review reported.
The bank says the security structure, which is being used to sell multimillion share offer documents, could trap unwary buyers in hot property markets.
Buyers of the securities will not have title to a single property, will be unable to use them for a loan with most lenders and could have difficulty finding a buyer, the AFR said citing banking specialists.
The deals were likely detected when investors tried to use the shares as security for loans.
Copies of the contracts, which price individual shares at more than $1.6 million, appear to have been documented by lawyers and accountants. They have been issued and signed this year.
Lenders fear the security would place them behind other creditors in the event of a foreclosure, which makes the risk “unacceptable”.
"It has come to our attention that customers are offering unsuitable company share title securities for home loan applications," the ANZ memo told its broker network states.
An ANZ spokesman confirmed the arrangements but said it had so far only identified a handful of contracts around Waverley and Randwick, the AFR reported.
The issue stems from the fact that local councils will not issue strata titles for developing multiple residences on a property.
"Some councils, particularly in NSW, are not allowing newly established properties to be subdivided, so the customers/vendors are sometimes setting up a private company and issuing shares,” the memo continued.
"These tend to be duplex type arrangements, where a certain number of shares will equal one unit and a certain number equals the other unit."
A duplex property is effectively two conjoined properties occupying one block or plot of land and sharing at least one common wall. Both dwellings in a duplex are built at the same time.
If strata titled, each dwelling may be sold and owned separately. But if not strata-titled both dwellings within the duplex can only be sold together.
Under the arrangement, the ownership of the land stays in the name of the vendor. The vendor then sets up a company that issues shares for sale.
It effectively means the purchaser does not have exclusive use of the proposed unit. For example, a purchaser of a 25 per cent share in four apartments would own 25 per cent of all units, not a specific unit.
"These types of security properties are not deemed "company title and are unacceptable," the bank states.
"Any customers entering these arrangements should be informed that ANZ does not support this type of lending."
A spokesman for National Australia Bank was cited by the AFR as saying that it also does not accept company share titles or stratum titles as acceptable residential security for home loans.
Other lenders declined to comment on whether property investors are using similar sales methods, but mortgage brokers say they would be surprised if other lenders had not been approached.
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ANZ warns against developers issuing 'unacceptable' securities to property buyers

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An established ANZ bank in Narrabri, at the location for 35 years, is now up for auction.
The 668 square metre property located at <a href="https://www.burgessrawson.com.au/2P1282#.WAWS_txJtyw" target="_blank">137 Maitland Street </a>has a secure five year lease to ANZ until 2018 with the option to extend to 2023.
This property is in the heart of north-west NSW, with a shire population of around 14,000. It has high exposure to the main street corner site with ample off street parking at the rear.
Surrounding the property are businesses including Domino’s, Subway, Australia Post, Liquorland, Target and Coles.
The tenant is required to pay all outgoing according to the lease and it is an easily managed, single tenanted investment with a net income of $57,484 per annum plus GST.
The property is offered through Burgess Rawson agent Rhys Parker.
It last sold at $660,000 in 2009.
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Established ANZ bank in Narrabri up for auction

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GUEST OBSERVER
Funding markets have shown some stress in recent weeks as investors and borrowers prepare for imminent structural reforms and amid cyclical issues around banks.
We look at the recent moves in single currency and cross-currency basis markets, USD Libor and credit spreads.
With less than two weeks until US money market funds are required to comply with new liquidity and asset rules, we opine on the outlook for funding markets.
Funding markets have seen significant shifts in recent weeks as markets prepare for the upcoming new money market rules in the US. The rules, outlined in US money market reform 2a-7 primer, will come into force on 14 October.
In addition to money market reform, a confluence of factors has increased the cost of funding, namely quarter and year-end as well as concerns around European banks. There has been in recent weeks the usual pickup in funding stresses associated with quarter end – normally because of the need for 3 month funding which rolls over the ‘turn’ of the calendar year (or financial year end for US banks).
With banks now less willing to have significant balance sheet items over their year-end, the cost of USD funds will remain elevated. This quarter end has seen an escalation of this normal arrangement due to the money market reform being implemented at the same time.
Furthermore, as investments shift out of ‘prime’ funds (those who hold credit) to government only funds, the ability of both banks and corporate borrowers who access short-term funding has been diminished. This has forced borrowers out the term curve – or in the case of sectors of the bank market – to simply ‘pay up’ for alternate sources of funding.
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The demand for USD has shown up in the sharp moves in 3 month cross-currency basis swaps (Figure 1) which have lifted the cost of funding sharply in the last week. The JPY basis has been driven by the structural need for Japanese banks to find a new funding source given their large reliance on US MMFs. This issue has not been fully addressed despite an increase in USD funds available from the BoJ. That said, it has led to a wider ‘Japan premium’ (which is the cost of USD 3 month Libor for Japanese banks relative to other members of the Libor panel).
THE BASIS FOR OTHER MOVES
In comparison, the move higher in USD FRA/OIS and Libor/OIS, as well as a gradual but significant rise in 3 and 6 month USD Libor since mid-year, has been gentler. The move in EUR cross-currency basis (see Figure) 1 has come at a time when European banks have been under the spotlight. This unwanted introduction of a systemic threat has augmented the current demand for USD funding.
The basis has moved to the most negative level (highest cost for USD funds) since the European sovereign crisis period in 2012. Both prior to this period and since, central banks have introduced a number of measures to allow for USD liquidity in times of stress.
After a reasonably steady period, the basis has dropped from -25bp to -59bp since mid- September. The spread remains a long way from its historic lows of -210bp in 2008-09 and the -160bp level seen in 2011.
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The demand for USD via the ECB's 1 week funding mechanism has also seen a sharp rise. Last week’s auctions for 1 week USD funding saw just under USD6.4bn awarded to twelve banks. This was the largest amount requested since 2014.
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In the FRA markets, the modest move wider for EUR FRA/OIS has not been matched by the sharper USD move. This suggests that concerns over European banks have not yet shown up in funding for EUR. In fact, the 3 month Euribor/OIS spread is little moved and is at multi-year lows. We believe any stresses are likely to show up in the USD funding markets – rather than in EUR.
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A RISING TIDE
The single currency basis market, at least for USD, has steepened sharply in the last year and has risen significantly higher than the levels seen during the 2012 European crisis. Similarly the USD 3s/1s basis curve has steepened to the highest level since 2009. 3s/1s sits at 25bp, around 3bp higher than what it reached in the European crisis. In the last few weeks, domestic USD basis has stabilised at these elevated levels.
Looking at the forward curves for single currency basis, it would appear that the peak for the 1 year basis has been set and will begin to match the forwards. The risk to this view would be a sustained period of higher USD funding costs and increased market expectations for Fed hikes.
In time, such an outcome should narrow the 1 year 6s/3s and 5 year 6s/3s basis, driven by a rise in the latter.
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OUTLOOK FOR FUNDING POST US MONEY MARKET REFORM
US money market funds now have less than ten days to comply with the new rules governing their operations. As Figure 6 shows, total holdings in prime funds are around USD600bn. While we expect some balance to be retained in the funds that choose to hold credit assets, there is likely to be further reduction in the coming days. This should, all things being equal, push USD Libor and USD Libor/OIS higher and wider.
It is worth noting that while the larger shifts in Libor have reflected a replacement premium for USD bank funding, corporate borrowers are also affected as they will need to source alternate means of funding. These may come via bank revolver credit facilities or through the term market as borrowers.
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After the full implementation on 14 October, we expect markets to stabilise and for the Libor rate to reflect more cyclical news around the banking sector as well as the eventual addition of a premium or reflect market-based expectations of a Fed rate hike in December.
We also expect to see an increase in the issuance of term debt for banks as the ability to use short-term funding comes to an end. This more expensive method of borrowing also comes at a time when other regulatory requirements will be placed on the market.
WHAT TO WATCH
The key variables to watch will be the use of FX USD swap lines at the various central banks (primarily the BoJ and ECB). Domestic USD basis (6s/3s and 3s/1s) and 3 month JPY and EUR cross-currency basis are also important to gauge the demand for USD from non-US counterparties hedging loans, assets, and borrowings.
Bank credit spreads are an important gauge of the market’s perception of asset quality. While these have widened recently, they do not reflect significant concern. The CDS market, once a popular product in financial markets, has become an illiquid and poorly- traded instrument.
Lastly – and perhaps obviously – as the money market reforms are finalised, the USD Libor rate and spread to OIS are expected to rise a little further before stabilising and they represent a more realistic price for USD funding.
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Martin Whetton is senior rates strategist, ANZ. Katie Hill is strategist, ANZ. Both can be contacted <a href="https://www.anz.com/personal/" target="_blank">here.</a>
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