Repeat buyers are one of the strongest measures of confidence in any apartment development.

At <a href="https://www.apartments.com.au/new-apartments/era-newcastle-west-124-126-bull-street-newcastle-west-nsw-2302">ERA</a> in Newcastle West, some purchasers are returning to <a href="https://www.apartments.com.au/developers/gwh">GWH</a> after living at the developer's One Apartments. Their decision to purchase again was driven by the quality of life they found after moving into their first GWH home.

Keith Wilton had spent years living in a house in East Maitland before deciding it was time for a change. Apartment living had always been on his radar, but he was selective about what he wanted.

<iframe allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" allowfullscreen="" frameborder="0" height="315" referrerpolicy="strict-origin-when-cross-origin" src="https://www.youtube.com/embed/FH_1EzB-1vs?si=XScVlP1ERsTDJoME" title="YouTube video player" width="560"></iframe>

"I had some boxes I wanted to tick," he says.

Keith points to the open-plan design, generous outdoor areas and considered inclusions as key reasons One Apartments worked for him.

“One of those things was a nice indoor open plan area, but also I wanted a nice outdoor open area that I could entertain on in summer or Christmases or birthdays,” he says.

He also found value in the smaller details, from integrated appliances to shared resident spaces including the pool, cinema and rooftop areas.

[smartcode_project:default project_id=135096 project_image_fid=356818]

After comparing several developments, he chose One Apartments because of GWH's longstanding local reputation and his own experience working with the developer on a commercial project more than a decade earlier.

"I knew that they were local, that the quality of the build was going to be up there. I'd looked at other apartment complexes around and close by, and I just knew that here was a better decision location wise."

Today, Keith says the move has completely changed how he experiences Newcastle.

"I enjoy living in this location because it's more of a lifestyle change. That Newcastle city living where you can walk to restaurants and bars and even beaches and parks and even shopping across the road."

[smartcode_project:default project_id=135096 project_image_fid=356828]

Beyond the location, he says it's the sense of community that has surprised him most.

"Everyone loves living here because they chose to live here, but everyone looks out for each other. It's a real great community feel here."

For Aimee and Lyle Goodman, the journey started almost by chance.

<iframe allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" allowfullscreen="" frameborder="0" height="315" referrerpolicy="strict-origin-when-cross-origin" src="https://www.youtube.com/embed/tsioMLcnjas?si=zq-ys3JuWpfa5hFv" title="YouTube video player" width="560"></iframe>

The couple happened to be having coffee in Newcastle when they noticed the site where One Apartments was about to begin construction.

"We were aware GWH was planning a development," Aimee says. "We made one phone call and things moved pretty quickly after that."

As busy business owners, they initially thought apartment living would simply reduce the maintenance that came with larger homes. Instead, it fundamentally changed how they spent time together.

"We actually catch up more as a family now," Aimee says.

"We've had homes with big yards and lots of space, but everyone ended up in different rooms. Here we'll have dinner together, the kids can play, and we spend far more quality time together."

[smartcode_project:default project_id=135096 project_image_fid=356829]

Lyle says their confidence came from GWH's reputation within Newcastle's building industry.

"I know people who've worked across different apartment projects, and whenever GWH came up the feedback was always the same. They're rock solid. They're quality."

That confidence only grew throughout the buying process.

"One of the things that really impressed us with GWH was the whole process, was the communication," Lyle says. "It was consistent, it was regular, there was no problem if we had some weird questions, there was no problems in getting answers."

[smartcode_project:default project_id=135096 project_image_fid=351104]

Aimee says one moment stood out.

"The project actually finished on time. We realised we needed to hurry up and sell our house because everything was happening exactly when they said it would."

The positive experience at One Apartments ultimately gave all three buyers the confidence to purchase again with GWH, this time at ERA.

Their confidence reflects what many buyers are seeking in today's apartment market. Location remains important, but so too does certainty around delivery, quality and long-term liveability.

[smartcode_project:default project_id=135096 project_image_fid=356822]

ERA builds on those foundations with 280 one, two and three-bedroom apartments across two landmark towers in <a href="https://www.apartments.com.au/developments/newcastle-west-nsw-2302">Newcastle West</a>.&nbsp;

Designed by <a href="https://www.apartments.com.au/architects/fk-australia">Fender Katsalidis</a>, the project will include more than 2,000 square metres of resident amenities, including a resort-style pool, gym, sauna, private cinema and rooftop entertaining spaces overlooking the harbour and coastline.&nbsp;

The development is also within walking distance of the Newcastle Interchange, Honeysuckle, Darby Street, the harbour foreshore, restaurants, retail and the city’s beaches, continuing the walkable lifestyle that existing GWH buyers say has transformed how they live.

[smartcode_project:default project_id=135096 project_image_fid=356826]

For Keith, the appeal remains straightforward.

"You feel at home even before you've moved into your home."

For Aimee, the change is measured in time.

“I just felt like I had more time,” she says.

[smartcode_project:default project_id=135096 project_image_fid=351102]

Construction at ERA is now underway, with more than half of the residences already sold and limited two and three-bedroom apartments remaining in the East Tower release. Priced from $980,000 for two-bedroom residences and $1.46 million for three-bedroom residences, buyers can secure an apartment with a 10 per cent deposit, with premium homes offering ocean views from Level 8 and harbour views from Level 10.

ERA is also backed by Resilience Insurance's 10-year Latent Defects Insurance policy, providing protection against structural or waterproofing defects for 10 years after completion. The project is anticipated to be completed in early 2028.

[smartcode_project_cta:default project_id=135096]

Joel Robinson

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

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

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

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

Kooyongkoot wins Gold and Silver at Better Future Melbourne Design Awards

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

The apartment price gap drawing Sydney buyers west

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

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

Cameron Kusher

<html><body>
EXPERT OBSERVER
Over the past few weeks three of the four major banks in Australia have announced that they are going to be increasing variable mortgage rates. 
While there has been a lot of adjustments to mortgage rates over recent years, the big difference with the latest announcement is that the higher mortgage rates are going to affect owner occupiers. 
Most of the previous mortgage rate changes announced by the major banks have only affected investors and those with interest only mortgages.
Click here <a href="https://www.propertyobserver.com.au/images/2018/9/7/KUSH1.jpg" target="_blank">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/2018/9/7/KUSH1.jpg" alt="">
Many of the smaller regional banks have pushed mortgage rates for owner occupiers higher over recent months citing higher short-term funding costs. 
Although until now the major banks had resisted making an adjustment to mortgage rates it seems they too have had their hand forced by higher funding costs.  The above chart highlights the cost of short-term funding to banks (the three-month bank bill swap rate) and it clearly shows that the cost of short-term funding has increased.  It currently sits at 2.26% compared to the official cash rate which remains unchanged at 1.5% since August 2016.
Click here <a href="https://www.propertyobserver.com.au/images/2018/9/7/KUSH2.jpg" target="_blank">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/2018/9/7/KUSH2.jpg" alt="">
Short-term funding costs have certainly risen recently however, it is also interesting to look at the composition of funding to Australia’s banks. Short-term funding is not an insignificant part of the funding profile (slightly more than 20%), although the share of funding from short-term debt has fallen over recent years as domestic deposits have increased. 
There are other ways to handle higher short-term funding costs rather than lifting mortgage rates but that would likely mean cutting dividends which lenders seem reluctant to want to do or reducing deposit interest rates which would likely see a further reduction in the primary funding source: domestic deposits.
From a housing market perspective the timing of the announcement of higher interest rates is an interesting one. 
After many years of strong value growth, Sydney and Melbourne housing is now well embedded in a downturn.  Tighter credit conditions, higher mortgage rates for investors and interest-only borrowers and reduced affordability have already led to the falls of -5.6% from the peak in Sydney and -3.5% from their peak in Melbourne.  This has occurred so far without higher interest rates for owner occupiers paying off principal and interest however, that is about to change.
The timing of the hikes to mortgage rates is also interesting in that it has been announced right at the beginning of the Spring Selling Season.  Although spring, in my mind and according to the data, is somewhat overhyped as a good time to sell, more stock does typically become available for sale over the period and buying activity typically increases. 
The other usual occurrence at the beginning of spring is that lenders offer enticing mortgage rates to the market to jostle for market share.  By contrast this year, major lenders are announcing higher mortgage rates.
Higher mortgage rates have already driven a slowing of demand for investors over the past year.  Although the magnitude of the mortgage rate increases announced is fairly small (around 15 basis points by each lender) it is likely that the higher mortgage rates will impact on housing market sentiment. Furthermore it may end up further exacerbating the declines which are already occurring in Sydney, Melbourne, Perth and Darwin and the slowing of value growth being experienced elsewhere. 
Overall this move seems likely to lead to a continuation of the currently weak housing market conditions over the coming months and may weaken the market further.  From the lenders perspective, clearly they realise that the housing downturn is becoming entrenched (particularly in Perth and Darwin, but more recently in Sydney and Melbourne) and they are doing what they can to maintain profitability in the face of lower mortgage volumes.
CAMERON KUSHER is a property research analyst for CoreLogic
</body></html>

ckusher-ujnxiKuFQs

Higher mortgage rates likely to prolong the housing market weakness: CoreLogic

<html><body>
EXPERT OBSERVATION
Over the past decade there has been a significant change in house and unit values throughout each of Australia’s largest sub-state regions (best known as SA4).
Our findings found that over the 10 years to June 2018, national dwelling values have increased by a cumulative 43.9% with the combined capital cities recording an increase of 52.6% and the combined regional markets recording growth of 16.6%.
Houses values increased by 46.9% nationally over the past decade with combined capital city values growing at a faster pace (56.2%) than the combined regional markets (20.0%). Of the 88 regions SA4 national regions, 73 areas recorded an increase in dwelling values over the past decade with the remaining 15 recording falls.  No SA4 regions of NSW, Vic, Tas, NT or ACT have recorded a decline in values over the past decade.  Meanwhile, a majority of the WA SA4 regions have recorded declines in values over the past decade.
The region to record the greatest increase in house values over the past decade was the South West region of Sydney where values increased 112.9% over the period.  An additional five SA4 regions have seen house values double over the past decade, they were: Parramatta in Sydney (107.4%), Inner South West of Sydney (106.6%), Outer South West of Sydney (103.3%), South East of Melbourne (102.7%) and the West region of Melbourne (102.3%).
The regions of the country in where house values recorded the largest decline over the past decade were: 
<ul>
<li>Outback (North) in WA (-38.3%)</li>
<li>Outback (South) in WA (-34.0%)</li>
<li>Mackay-Isaac-Whitsunday in Qld (-27.3%)</li>
<li>Central Queensland (-26.8%) </li>
<li>Townsville (-23.6%)</li>
</ul>
Only three capital city SA4 regions, all of which are in Perth, have recorded house value falls over the past decade. 
Value growth in NSW and Vic has been substantially stronger than growth elsewhere.  In fact, the regions of NSW (Riverina) and Vic (North West) that recorded the weakest conditions over the decade have seen value growth well in excess of the best performing WA region (Perth-North West).
Outside of NSW and Vic, the regions with the strongest value growth across the remaining states and territories over the decade were: Brisbane-South (30.2%), Adelaide-West (20.3%), Perth-North West (2.2%), South East in Tas (43.9%), Outback in NT (35.2%) and ACT (30.3%).  
Illawarra in NSW recorded the greatest increase in house values of all regional markets over the past decade with values increasing 86.8%. Illawarra recorded the 15th highest rate of house value growth over the past decade nationally. 
The remaining regional markets that recorded relatively large increases in house values were: 
<ul>
<li>Geelong (79.6%)</li>
<li>Southern Highlands </li>
<li>Shoalhaven in NSW (77.9%)</li>
<li>Newcastle and Lake Macquarie (68.6%) </li>
<li>Bendigo in Vic (63.3%)</li>
</ul>
Looking at unit values, nationally throughout the past decade, units increased by 34.2% which is lower than the 46.9% increase in house values.  Unit value growth in the combined capital cities (42.0%) and combined regional housing markets (0.4%) was similarly lower than that for houses (56.2% and 20.0% respectively).
Of the 88 SA4 regions across the country, 53 have recorded an increase in unit values over the past decade with the remaining 35 recording a fall.
The South West region of Sydney recorded the greatest increase in house values of all SA4 regions (112.9%) and it has also recorded the greatest increase in unit values (98.0%).  While seven regions of the country have recorded a doubling of house values over the past decade, not one region has seen unit values double over the same period.  Only the Outer South West region of Sydney (81.0%) and Sydney’s Eastern Suburbs (78.2%), along with Sydney’s South West have recorded decade unit value growth of more than 75%.  By comparison, over the past decade, 24 regions of the country have recorded house value growth in excess of 75%.
Unit values have recorded the largest declines over the past decade in: 
<ul>
<li>Outback (North) WA (-73.3%), Outback (South) WA (-65.7%)</li>
<li>Darling Downs-Maranoa in Qld (-52.9%)</li>
<li>Central Queensland (-45.8%) </li>
<li>Townsville (-45.6%) </li>
</ul>
For the regions where unit values dropped, 15 were capital city regions with the remaining 20 located in regional areas of the country.  The capital city unit markets that recorded the greatest unit value falls were: Darwin (-26.0%), Ipswich in Qld (-23.5%), Logan-Beaudesert in Qld (-22.1%), Moreton Bay-South (-20.5%) and Perth-Inner (-19.5%).
Outside of NSW, the regions of each state and territory to record the greatest increase in unit values over the past decade were: Melbourne-Outer East (63.1%), Outback region of Qld (28.7%), South East region of SA (41.0%), Wheat Belt region of WA (54.9%), South East region of Tas (63.3%), Outback region of NT (28.7%) and ACT (11.6%).
Outside of the capital cities, the regional markets that have recorded the greatest increase in unit values over the past decade were: South East in Tas (63.3%), Illawarra in NSW (60.2%), Far West and Orana in NSW (55.7%), Wheat Belt in WA (54.9%) and Bendigo in Vic (46.2%).
The growth in house and unit values over the past decade has been characterised as very much slanted to strong growth in Sydney and Melbourne and weaker conditions elsewhere.  
While the last 10 years is not predictive of the future, dwelling values are already falling in Sydney and Melbourne and regional markets are currently outperforming capital cities.  
With housing in a downturn in Sydney and Melbourne and affordability stretched, at this point it seems unlikely the returns of the past decade will be replicated over the next 10 years.
</body></html>

How have house and unit values changed over the past decade?

<html><body><div title="Page 1">
EXPERT OBSERVER
Over the 10 years to June 2018, national dwelling values have increased by a cumulative 43.9% with the combined capital cities recording an increase of 52.6% and the combined regional markets recording growth of 16.6%.
<div title="Page 1">
Houses values have increased by 46.9% nationally over the past decade with combined capital city values growing at a faster pace (56.2%) than the combined regional markets (20.0%) Of the 88 regions SA4 national regions, 73 areas recorded an increase in dwelling values over the past decade with the remaining 15 recording falls. No SA4 regions of NSW, Vic, Tas, NT or ACT have recorded a decline in values over the past decade. Meanwhile, a majority of the WA SA4 regions have recorded declines in values over the past decade.
<div title="Page 1">
The region to record the greatest increase in house values over the past decade was the South West region of Sydney where values increased 112.9% over the period. An additional five SA4 regions have seen house values double over the past decade, they were: Parramatta in Sydney (107.4%), Inner South West of Sydney (106.6%), Outer South West of Sydney (103.3%), South East of Melbourne (102.7%) and the West region of Melbourne (102.3%).
<div title="Page 1">
<div>
<div>
<div>
The regions of the country in where house values recorded the largest decline over the past decade were:
<ul>
<li>Outback (North) in WA (-38.3%)</li>
<li>Outback (South) in WA (-34.0%)</li>
<li>Mackay-Isaac-Whitsunday in Qld (-27.3%)</li>
<li>Central Queensland (-26.8%)</li>
<li>Townsville (-23.6%).</li>
</ul>
</div>
</div>
</div>
</div>
<div title="Page 1">
<div>
<div>
<div>
Only 3 capital city SA4 regions, all of which are in Perth, have recorded house value falls over the past decade.
Value growth in NSW and Vic has been substantially stronger than growth elsewhere. In fact, the regions of NSW (Riverina) and Vic (North West) that recorded the weakest conditions over the decade have seen value growth well in excess of the best performing WA region (Perth-North West).</div>
<div>
 Outside of NSW and Vic, the regions with the strongest value growth across the remaining states and territories over the decade were: Brisbane-South (30.2%), Adelaide-West (20.3%), Perth-North West (2.2%), South East in Tas (43.9%), Outback in NT (35.2%) and ACT (30.3%).</div>
<div>
 Illawarra in NSW recorded the greatest increase in house values of all regional markets over the past decade with values increasing 86.8%. Illawarra recorded the 15th highest rate of house value growth over the past decade nationally.</div>
<div>
 The remaining regional markets that recorded relatively large increases in house values were:</div>
</div>
</div>
</div>
<div title="Page 1">
<ul>
<li>Geelong (79.6%)</li>
<li>Southern Highlands Shoalhaven in NSW (77.9%)</li>
<li>Newcastle and Lake Macquarie (68.6%)</li>
<li>Bendigo in Vic (63.3%)</li>
</ul>
Click <a href="https://www.propertyobserver.com.au/images/2018/7/19/HOUSE%201.jpg" target="_blank">here</a> to enlarge
<div title="Page 2">
<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/2018/7/19/HOUSE%201.jpg" alt="">
Click <a href="https://www.propertyobserver.com.au/images/2018/7/19/HOUSE%202.jpg" target="_blank">here</a> to enlarge
<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/2018/7/19/HOUSE%202.jpg" alt="">
Click <a href="https://www.propertyobserver.com.au/images/2018/7/19/HOUSE%203.jpg" target="_blank">here</a> to enlarge
<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/2018/7/19/HOUSE%203.jpg" alt="">
Looking at unit values, nationally throughout the past decade, units increased by 34.2% which is lower than the 46.9% increase in house values. Unit value growth in the combined capital cities (42.0%) and combined regional housing markets (0.4%) was similarly lower than that for houses (56.2% and 20.0% respectively).
Of the 88 SA4 regions across the country, 53 have recorded an increase in unit values over the past decade with the remaining 35 recording a fall.
The South West region of Sydney recorded the greatest increase in house values of all SA4 regions (112.9%) and it has also recorded the greatest increase in unit values (98.0%). While seven regions of the country have recorded a doubling of house values over the past decade, not one region has seen unit values double over the same period. Only the Outer South West region of Sydney (81.0%) and Sydney’s Eastern Suburbs (78.2%), along with Sydney’s South West have recorded decade unit value growth of more than 75%. By comparison, over the past decade, 24 regions of the country have recorded house value growth in excess of 75%.
Unit values have recorded the largest declines over the past decade in:
<div title="Page 2">
<div>
<div>
<div>
<ul>
<li>Outback (North) WA (-73.3%)</li>
<li>Outback (South) WA (-65.7%)</li>
<li>Darling Downs-Maranoa in Qld (-52.9%)</li>
<li>Central Queensland (-45.8%)</li>
<li>Townsville (-45.6%)</li>
</ul>
For the regions where unit values dropped, 15 were capital city regions with the remaining 20 located in regional areas of the country. The capital city unit markets that recorded the greatest unit value falls were: Darwin (-26.0%), Ipswich in Qld (-23.5%), Logan-Beaudesert in Qld (-22.1%), Moreton Bay-South (-20.5%) and Perth-Inner (-19.5%).</div>
<div>
 Outside of NSW, the regions of each state and territory to record the greatest increase in unit values over the past decade were: Melbourne-Outer East (63.1%), Outback region of Qld (28.7%), South East region of SA (41.0%), Wheat Belt region of WA (54.9%), South East region of Tas (63.3%), Outback region of NT (28.7%) and ACT (11.6%).</div>
<div>
 Outside of the capital cities, the regional markets that have recorded the greatest increase in unit values over the past decade were: South East in Tas (63.3%), Illawarra in NSW (60.2%), Far West and Orana in NSW (55.7%), Wheat Belt in WA (54.9%) and Bendigo in Vic (46.2%).</div>
<div> </div>
<div>The growth in house and unit values over the past decade has been characterised as very much slanted to strong growth in Sydney and Melbourne and weaker conditions elsewhere.</div>
<div> </div>
<div>While the last 10 years is not predictive of the future, dwelling values are already falling in Sydney and Melbourne and regional markets are currently outperforming capital cities.</div>
<div> </div>
<div>With housing in a downturn in Sydney and Melbourne and affordability stretched, at this point it seems unlikely the returns of the past decade will be replicated over the next 10 years.</div>
<div>Change in unit values over the decade to June 2018 across SA4 regions.</div>
<div> </div>
<div>Click<a href="https://www.propertyobserver.com.au/images/2018/7/19/unit%201%20.jpg" target="_blank"> here</a> to enlarge</div>
<div> </div>
<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/2018/7/19/unit%201%20.jpg" alt=""></div>
<div> </div>
<div>Click <a href="https://www.propertyobserver.com.au/images/2018/7/19/unit%202.jpg" target="_blank">here</a> to enlarge</div>
<div> </div>
<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/2018/7/19/unit%202.jpg" alt=""></div>
<div> </div>
<div>Click <a href="https://www.propertyobserver.com.au/images/2018/7/19/unit%203.jpg" target="_blank">here</a> to enlarge</div>
<div> </div>
<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/2018/7/19/unit%203.jpg" alt=""></div>
</div>
</div>
</div>
</div>
</div>
</div>
</div>
 
</div></body></html>

National dwelling values have risen over 4% on average for the past decade: Cameron Kusher

<html><body>
EXPERT OBSERVATION
Almost 90% of individual residential properties re-sold in Australia during the March 2018 quarter attracted a gross profit.
Vendors pocketing a total of $14.819 billion, the majority of which was generated in Sydney and Melbourne.  
The latest CoreLogic ‘Pain and Gain Report’ delivers quarterly insights into the performance of re-sold properties across Australia.
If relatively few properties are re-selling at a loss (pain) it generally indicates a stronger housing market whereas when a higher proportion of properties are re-selling at a loss it indicates weaker local housing market conditions.  
The report’s topline result for the March 2018 quarter is good, the vast majority of properties reselling at a gross profit, however the percentage that did so (89.8%), was actually the weakest quarter for profit making residential re-sales since the three months to October 2013.
By comparison, the quarter previous to that (ending December 2017) saw a more favourable 91.1% of all properties resold for a profit.  
Even a year prior to that, (the quarter ending December 2016), recorded a better result than March 2018, with 90.7% of properties resold for a profit.
Houses Vs. Units
Houses outperformed units across Australia, including across the combined capital city and combined regional markets.  
Melbourne units were 10 times more likely to re-sell at a loss than houses, a trend replicated in Brisbane (nine times) and Canberra (eight times).
Sydney and Hobart are the only regions where a greater proportion of units re-sold for a profit over the quarter than houses.   
While there was a distinct gap between the performances of houses vs. units (houses re-selling at a gross profit were recorded at 91.4%, compared to just 85.7% for units), both houses and units recorded a fall in profit-making re-sales over the March quarter.
Capital Cities Vs. Regions 
Capital city properties being re-sold remain more likely to sell for a profit than those in regional markets, but the gap has narrowed over the past three months.
Over the March 2018 quarter, 91.1% of capital city properties re-sold for a profit (down from the previous quarter’s 92.8% and also down against a year earlier (92.6%).
In fact, the share of profit-making Capital city re-sales over the March 2018 quarter was the lowest it’s been since March 2013.  
Across the combined non-capital city markets, 88.0% of re-sales were at a profit, a slight decline from 88.3% over the previous quarter but up from 87.4% over the same period in 2017. 
Most of the strength in regional markets is being driven by areas close to capital cities such as Sydney, Melbourne and Brisbane, as well as some coastal markets, while mining regions continue to record heightened levels of re-sales at a loss.
Gains
The total value of re-sales gross profits for the March 2018 ($14.819 billion) was driven Sydney and Melbourne (30.6% and 26.1% of total national profits respectively).
Propelling these results are both the higher cost of housing in Sydney and Melbourne, plus strong growth in dwelling values over recent years which have resulted in substantial profits.
As a comparison, these two cities accounted for just 8.8% and 7.8% of the total value of losses nationally over the quarter.  
When analysing regions with the lowest proportion of re-sales at a loss, the data now shows that some of regions surrounding Sydney and Melbourne are recording even fewer re-sales at a loss than the capital cities themselves.  
Pains
For the March 2018 quarter, $428.1 million in realised gross losses were recorded from resales.  
Regions with the highest share of losses nationally were Perth (22.9%) and regional Qld (22.0%). 
Over the first quarter of 2018, the proportion of re-sales at a loss across each capital city was recorded at, 2.4% in Sydney; 4.0% in Melbourne; 10.0% in Brisbane; 8.2% in Adelaide; 28.9% in Perth; 1.6% in Hobart; 35.6% in Darwin and 7.9% in Canberra.   
The instances of loss-making re-sales increased over the March 2018 quarter relative to the previous December 2017 quarter in all capital cities other than Hobart.
When comparing lossmaking re-sales to a year earlier, there were fewer res-ales at a loss in Melbourne, Hobart, Darwin and Canberra, with all other capital cities having recorded an increase. 
Five regions (all of which are linked to the resources sector), recorded at least 40% of all resales at a loss over the quarter.
It should be noted that in many of these regions the share of losses is now lower than at the market peak, however instances of loss remain elevated; a reflection that housing values remain well below their peaks in these areas. 
</body></html>

Almost 90% of residential resales making a profit: CoreLogic's Cameron Kusher

<html><body>
Looking at data for the 50 most populous non-capital city council areas, the majority of them have seen house and unit values increase over the 12 months to May 2017. 
The data indicates that after a long period of soft housing market conditions following the financial crisis, housing demand is starting to pick up across many of the larger regional areas. 
Those areas that are continuing to see values fall are in many instances linked to the mining and resources sector.
Of the non-capital city council areas analysed, the Wollongong council area is the most expensive for houses ($730,427) and units ($530,170) as well as having seen the greatest increase in house values and the fourth highest increase in unit value over the past year. 
The Wollongong housing market has seen housing demand rise as demand ripples away from Sydney where affordability constraints are more pressing. 
Additionally, prices are being pushed higher as more people seek out coastal and lifestyle properties.
In New South Wales in particular, regional areas of the state, particularly those reasonably close to Sydney are generally seeing strong value growth. 
This is most likely linked to affordability relative to Sydney as well as Sydney home owners using the equity in their home to purchase investment properties in lifestyle markets.
The regional areas of Victoria, particularly those close to Melbourne, are experiencing value growth however, it is nowhere near the magnitude to which values are growing in those locations close to Sydney. 
Although values are rising, the relatively softer growth can be linked to the fact that values have not risen as sharply in Melbourne as they have in Sydney and subsequently affordability hasn’t deteriorated as severely in Melbourne.
Queensland’s results are somewhat more mixed with the south-east corner generally seeing values rise while elsewhere growth is extremely mild or values have fallen.
Click to enlarge 
<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/2017/06/29/2017-06-23--pp1.jpg" alt="">
In fact, the Gold and Sunshine Coasts and Noosa are seeing more rapid value growth than Brisbane is. 
It seems as if a lot of demand across these regions is coming from the accelerating internal migration to Queensland and buyers from Sydney and Melbourne that have substantial equity in their homes and are looking for lifestyle properties.
Of the areas that we looked at, each of the 24 regions we highlighted in New South Wales have recorded value growth for houses over the past year. 
For units, only 4 of the 24 regions have recorded value falls over the past 12 months.
In Victoria we highlighted 10 regional council areas in the analysis. 
Of these regions analysed, two recorded value falls over the year for houses and 2 regions also recorded falls for unit values. 
Greater Shepparton was the only council area of the state which recorded value falls for houses and units.
Of the 13 regions highlighted for Queensland, five have recorded value falls for houses over the past year and seven have recorded declines for units.
Each of the regions highlighted in Western Australia have recorded value falls over the past year for houses and units.
Launceston was the only region analysed in Tasmania and it has seen house and unit values rise over the past year. 
It should be noted while values have increased they have done so at a more moderate pace than those in Hobart.
Overall it seems that housing demand in regional areas of the country is rising. 
While many regions are seeing value increase, the strongest demand appears to be in those areas within relatively close proximity to capital cities, particularly those which are coastal and tap into lifestyle demand.
Cameron Kusher is research analyst for CoreLogic. You can contact him <a href="https://blog.corelogic.com.au/about/">here</a>.
</body></html>

Gladstone houses and apartment struggling as regions typically see values rise: Corelogic

<html><body>
EXPERT OBSERVATION
The latest private sector credit data from the Reserve Bank (RBA) shows that the expansion of housing credit continues to slow with both owner occupier and investor credit growth tracking lower in April. 
The RBA recently released private sector credit figures for April 2018 and the data reiterates the ongoing slowing of demand for housing credit. Over the month, housing credit expanded by 0.4% which, when rounded, was the slowest monthly expansion in housing credit since June 2013. Over the past 12 months, housing credit has increased by 6.0% which is its slowest annual increase since March 2014. The first two charts show how in 2008 and 2013, when dwelling values were falling, the expansion of credit also slowed.
<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/2018/6/12/credit%201.jpg" alt="">
<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/2018/6/12/credit%202.jpg" alt=""> 
Housing credit expansion is slowing for both owner occupiers and investors. Over the month, owner occupier credit increased by 0.6% while investor credit expanded by just 0.1%. Over the month, owner occupier credit expanded at its slowest monthly rate since December 2016 and investor credit expanded at its slowest pace since March 2016. In the recent housing market downturns, it has typically been investor credit growth that has slowed much more than owner occupier. Given that investors have been a substantial driver of housing demand over recent years, it is reasonable to expect that investor credit growth will slow further from here as values in the most investor-centric markets (Sydney and Melbourne) continue to fall.
On an annual basis, it is clear that the slowdown in investor credit growth is entrenched, while owner occupier housing credit has also slowed, but is holding firmer. Owner occupier credit expanded by 8.0% over the past year, its slowest annual expansion since January 2018 while investor credit grew by just 2.3% which is its slowest rate of annual growth since September 2016.
 <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/2018/6/12/credit%203.jpg" alt="">
<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/2018/6/12/credit%204.jpg" alt="">
As at the end of April 2018 there was $2.827 trillion in credit outstanding to Australian authorised deposit-taking institutions (ADIs), Of this $2.827 trillion, $1.755 trillion or 62.1% was to residential housing with a further 32.5% to business and 5.4% for other personal credit. Although it has only occurred over the past two months, after trending higher for many years, the share of total credit that was for housing has edged lower. In previous housing market downturns, the share of outstanding credit to housing has fallen. Given this, the expectation is that the share of total credit for housing will continue to decline over the coming months as values continue to fall.
 <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/2018/6/12/crediet%205.jpg" alt="">
The slowdown in housing credit growth is being driven by a range different factors. Firstly, the Australian Prudential Regulation Authority (APRA) introduced a 10% speed limit on investor credit in December 2014 which has resulted in a slowing of investor credit growth. Although APRA have announced that this cap will be removed shortly it is unlikely that investor credit growth will accelerate in a meaningful way. Secondly, loan serviceability is now being calculated across the board based on an interest rate of at least 7% which has made accessing credit for some more difficult. APRA has also implemented a cap on interest-only lending of 30% of all new mortgages, this has led to a substantial drop in demand for this product which was largely used for investors. Finally, lenders are now typically charging premiums of 60 basis points on interest rates for investors compared to owner occupiers with premiums typically in excess of 100 basis points for investors with interest-only loans.
Although the 10% speed limit is set to be lifted from July 1st, the likelihood of a rebound in housing credit remain low. The 30% cap on interest-only lending has a much more broad based dampening effect on investor activity. Add to this the fact that APRA is now focusing more on minimising debt to income ratios higher than 6 and maintaining a focus on keeping low deposit lending to a minimum and banks are stepping up their scrutiny on borrower expenses and incomes. The net effect is likely to be further tightness in housing credit which will continue to constrict housing market activity and reduce prospects for price appreciation.
</body></html>

Housing credit growth tracking at slowest pace since mid-2013: Cameron Kusher

<html><body>
EXPERT OBSERVATION
The Australian Bureau of Statistics (ABS) has released building approvals data for April 2018. Looking specifically at dwelling approvals, there were 18,701 houses and units approved for construction in April 2018.
The number of approvals is remarkably resilient considering that dwelling values are falling and there has been a significant volume of new housing approved over recent years.
In fact, building activity data for the December 2017 quarter showed there was a record high 46,359 dwellings approved for construction that had not yet commenced.
Since December 2017 a further, 77,634 dwellings have been approved for construction, it will be interesting to see just how many actually are built in the short-term given the backlog which already exists awaiting commencement.
<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/2018/5/31/pluse%201.jpg" alt=""> 
In April 2018, the 18,701 dwelling approvals were split between 10,618 approvals for houses and 8,083 approvals for units. The 18,701 approvals was the lowest monthly number of approvals since December 2017 however, house approvals were 0.7% higher over the month while unit approvals were -11.6% lower.
The 10,618 house approvals was actually the greatest monthly number of approvals since April 2015 while the 8,083 unit approvals was the fewest since December 2017. House approvals in April 2018 were just -2.2% lower than their recent cyclical peak while unit approvals were -31.9% lower than their peak.
 <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/2018/5/31/pluse%202.jpg" alt="">
Taking a closer look at units the data shows that approvals for high rise and townhouses fell over the month while low-rise unit approvals increased moderately. The chart also highlights the magnitude of the surge in high-rise approvals over recent years.
Historically the number of high-rise units and townhouse approvals has been fairly similar however, over recent years high-rise units have well and truly dominated the landscape.
With high rise unit projects becoming harder to make stack-up and presales more difficult as values fall, it’s expected that going forward there will be fewer high-rise approvals and potentially an uplift in medium density approvals such as low- rise units and townhouses.
 <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/2018/5/31/pulse%203.jpg" alt="">
The above chart shows a six month trend of the monthly house approvals data across each capital city. The charts show a clear declining trend in house approvals across Sydney, Brisbane, Perth and Adelaide. At the same time, approvals have remained steady over recent months in Melbourne and Darwin and have started to lift in both Hobart and Canberra.
 <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/2018/5/31/pulse%204.jpg" alt="">
On average over the past six months there have been far more units approved for construction in Sydney, Melbourne and Canberra and far more units approved in each of the other capital cities.
Although unit approvals have eased back of late, they remain close to historic highs in Melbourne and remain well above long-term average levels in Sydney, Brisbane, Adelaide and Canberra.
After years of booming unit approvals and a more moderate lift in house approvals, the recent falls in unit approvals comes at a time in which house approvals are climbing. As the data has shown, the recent declines in unit approvals are being led by high-rise units approvals which have surged to record levels over recent years.
Difficulty with getting finance and the necessary presales to proceed with large scale projects is likely to mean that moving forward houses and lower-density unit projects are likely to be the preferred options for developers.
That’s not to say that high-rise projects still won’t occur but they aren’t expected to be occurring at the magnitude seen over recent years.
Of course just because a dwelling is approved for construction doesn’t mean it will get built immediately.
The building activity data for the end of 2017 showed a record high volume of dwellings approved for construction but not commenced. If anything we would anticipate the number of dwellings in this category to increase further over the coming quarters, especially given the ongoing weakening of the Sydney and Melbourne housing markets.
</body></html>

Building approvals remain resilient in face of falling dwelling values: Cameron Kusher

<html><body>
EXPERT OBSERVATION
In a recent letter to all Australian authorised deposit-taking institutions (ADIs) entitled ‘Embedding Sound Residential Lending Practices,’ APRA indicated that lenders need to limit lending at very high debt to income levels.  
The actual wording of the comment was, APRA expects ADIs to commit to developing internal risk appetite limits on the proportion of new lending at very high debt to income levels (where debt is greater than 6 times a borrower’s income), and policy limits on maximum debt to income levels for individual borrowers.  
This doesn’t suggest that there is any hard limit on loan to income (LTI) ratios above 6 times but it does suggest that there will be less appetite for mortgages which are in excess of 6 times incomes.
Utilising gross household income data that has been modelled by the Australian National University (ANU) Centre for Social Research and Methods we can take a look across the individual capital cities at what the impact of limiting debt to income ratios to six times would be.  
The following charts look at annual gross household incomes with a comparison to median values at the end of 2017.  Incomes are elevated six times for comparison to median prices.  
The high median value relative to incomes implies the typical Sydney household would probably be targeting properties across the lower quartile of values rather than around the middle of the valuation range. 
<img src="https://www.corelogic.com.au/sites/default/files/2018-05/2018-05-25-blogimg1.png" alt="2018-05-25--blogimg1" width="1102" height="480">
 
<img src="https://www.corelogic.com.au/sites/default/files/2018-05/2018-05-25-blogimg2.png" alt="2018-05-25--blogimg2" width="1102" height="480">
Six times the median gross household income in Sydney is calculated at $688,764.  
The median house value in Sydney is $1,058,306 and the median unit value is $774,124.  
What this means is that if a buyer wanted to purchase the median house under this scenario they would need a deposit of $369,542 and for the median unit they’d need a deposit of $85,360. 
<img src="https://www.corelogic.com.au/sites/default/files/2018-05/2018-05-25-blogimg3.png" alt="2018-05-25--blogimg3" width="1102" height="480">
 
<img src="https://www.corelogic.com.au/sites/default/files/2018-05/2018-05-25-blogimg4.png" alt="2018-05-25--blogimg4" width="1102" height="480">
At the end of 2017, Melbourne’s median house value was $832,735 and the median unit value was $574,052.  At the same time, the median gross household income was $1,553/week with six times this annual income was recorded at $605,787.  Based on these figures, at 6 times income, borrowers in Melbourne can still afford the median unit but would need a deposit of $226,948 to be able to borrow below six times their income for the median house.
<img src="https://www.corelogic.com.au/sites/default/files/2018-05/2018-05-25-blogimg5.png" alt="2018-05-25--blogimg5" width="1102" height="480">
  
<img src="https://www.corelogic.com.au/sites/default/files/2018-05/2018-05-25-blogimg6.png" alt="2018-05-25--blogimg6" width="1102" height="480">
Unlike Sydney and Melbourne, households on the median income in Brisbane can still afford to borrow enough for the median valued house or unit.  The borrowing power for someone on the median income is $608,830 which is lower than both the median house ($531,248) and median unit ($383,752) value.   
<img src="https://www.corelogic.com.au/sites/default/files/2018-05/2018-05-25-blogimg7.png" alt="2018-05-25--blogimg7" width="1102" height="480">
 
<img src="https://www.corelogic.com.au/sites/default/files/2018-05/2018-05-25-blogimg8.png" alt="2018-05-25--blogimg8" width="1102" height="480">
The typical household in Adelaide can still afford the median house and unit.  As at December 2017 the median house cost $458,806 and the median unit $331,325.  Based on the median gross household income of $1,277/week someone on this income could borrow up to $498,161.  
<img src="https://www.corelogic.com.au/sites/default/files/2018-05/2018-05-25-blogimg9.png" alt="2018-05-25--blogimg9" width="1102" height="480"><img src="https://www.corelogic.com.au/sites/default/files/2018-05/2018-05-25-blogimg10.png" alt="2018-05-25--blogimg10" width="1102" height="480">
  Based on the median household income for Perth, someone borrowing six times their annual income could borrow $616,088.  Based on this figure, a borrower purchasing the median property would be comfortably below six times their annual income whether they’re purchasing a houses ($484,562) or a unit ($408,488). 
<img src="https://www.corelogic.com.au/sites/default/files/2018-05/2018-05-25-blogimg11.png" alt="2018-05-25--blogimg11" width="1102" height="480"><img src="https://www.corelogic.com.au/sites/default/files/2018-05/2018-05-25-blogimg12.png" alt="2018-05-25--blogimg12" width="1102" height="480">
   A borrower in Hobart on the gross household income ($1,248/week) borrowing six times their annual income could borrow up to $486,823.  The $486,823 figure is lower than the median house ($424,251) and median unit ($335,289) value for Hobart. 
<img src="https://www.corelogic.com.au/sites/default/files/2018-05/2018-05-25-blogimg13.png" alt="2018-05-25--blogimg13" width="1102" height="480"><img src="https://www.corelogic.com.au/sites/default/files/2018-05/2018-05-25-blogimg14.png" alt="2018-05-25--blogimg14" width="1102" height="480">
 Median household incomes in Darwin are quite high at $2,200/week.  Based on a borrower’s ability to borrow six times the household income, the median household could borrow up to $858,063.  Median house value ($469,083) and median unit values ($356,992) are significantly lower than $858,063. 
<img src="https://www.corelogic.com.au/sites/default/files/2018-05/2018-05-25-blogimg15.png" alt="2018-05-25--blogimg15" width="1102" height="480"><img src="https://www.corelogic.com.au/sites/default/files/2018-05/2018-05-25-blogimg16.png" alt="2018-05-25--blogimg16" width="1102" height="480">
  Like Darwin, Canberra also has relatively high median household incomes at $2,170/week.  Someone borrowing six times the annual income would be able to borrow up to $846,358 which is significantly higher than the median house and unit values which are recorded at $669,642 and $431,048. Of course median values don’t tell the whole story, as many properties are valued below as there are above however, it is valuable in providing a guide for what impact limiting high loan to income lending would have.  
In Sydney the median household can’t afford the median house or unit if there was a LTI limit of 6 times and in Melbourne the median household can’t afford the median house.  Were hard limits on LTI to be implemented it would have a much bigger impact on Sydney and Melbourne than any other areas of the country.  Any limit would still have some impact on households outside of Sydney and Melbourne, not to mention those that are purchasing properties additional to their principal place of resident.
Also keep in mind that these figures are only looking at a single scenario.  In most instances a lender will not allow a borrower to borrow 100% of the value of a property and if a borrower has a deposit of less than 20% they will need to pay lenders mortgage insurance (LMI).
So far there is no indication of a hard cap on LTI ratios.  What is clear is that APRA would like to see high LTI lending dialled back and that will have an impact on some borrowers, particularly those purchasing more expensive properties and/or those that have multiple properties.
</body></html>

What would lending caps of six times your income look like?

<html><body>
EXPERT OBSERVATION
Finding a house close to the city centre for under $500,000 is becoming increasingly difficult.
We look at the five suburbs in each capital city that are closest to the city centre and have a median house value under $500,000.  
Obviously the options and distance from the city centre vary greatly across each of the individual capital cities.
Suburbs closest to a capital city GPO with a median house value of less than $500,000
<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/2018/5/22/2018-05-21-pulseimg1.jpg" alt="">
<ul>
<li>Sydney </li>
</ul>
Bar Point is the suburb closest to the CBD with a median house value below $500,000. Sitting on the Central Coast as the crow flies it is 39.5 kilometres away from the CBD. There are only two suburbs within 50 kilometres of the CBD with a median house value below $500,000.
<ul>
<li>Melbourne</li>
</ul>
Dallas is the suburb closest to the Melbourne CBD with a median house value of less than $500,000. Located 16.1 kilometres from the CBD, the typical house costs less than $450,000.  There are only two suburbs within 20 kilometres of the CBD with a median house values of less than $500,000.
<ul>
<li>Brisbane </li>
</ul>
Rocklea is the closest suburb to the city with a median house value below $500,000 and it is the only suburb below that price point within 10 kilometres of the CBD.  Once you move more than 10 kilometres from the CBD there are many options under $500,000.
<ul>
<li>Adelaide</li>
</ul>
Hindmarsh is just 3.5 kilometres from the Adelaide CBD and has a median house value well below $500,000. The five suburbs listed are all less than 5 kilometres from the city centre which highlights the affordability of well-located housing in Adelaide relative to other capital cities.
<ul>
<li>Perth</li>
</ul>
Glendalough which is just over 5 kilometres from the Perth CBD is the closest suburb to the city centre with a median house value below $500,000.  Relative to other cities there are quite a number of suburbs relatively close to the city centre with a median house value below $500,000.
<ul>
<li>Hobart </li>
</ul>
Montagu Bay which is 3 kilometres from Hobart’s city centre is the closest suburb with a median house value of less than $500,000. Hobart remains the nation’s most affordable capital city housing market and, despite strong value growth recently, still has many suburbs with a median below $500,000 quite close to the city centre.
<ul>
<li>Darwin</li>
</ul>
Millner (8.1 kilometres from the CBD) is the suburb of Darwin closest to the city centre with a median house value under $500,000. Millner is also the only suburb with a median house value within 10 kilometres of the city centre.
<ul>
<li>Canberra</li>
</ul>
There is only one suburb in Canberra (Charnwood) that has a current median house value below $500,000.  This highlights the lack of affordable options in Canberra despite the fact that it is one of the smallest capital cities.
</body></html>

The sub-$500,000 capital city house options: Cameron Kusher

<html><body>
EXPERT OBSERVATION
With the release of regional population and migration data for 2016-17, in this week’s Pulse we take a look at where people migrating away from capital cities are ending up moving to.
The Australian Bureau of Statistics (ABS) recently released regional population growth data for 2016-17. The data included information on internal migration showing where people were moving to. Using this data we can determine when people migrate away from a capital city where they are settling. For this we are looking at internal movements from the Greater Capital City Statistical Areas (GCCSA) to other SA4 regions across the country.
Of those people shifting out of Sydney, the most popular destinations were those directly adjacent to the city: Newcastle/Lake Macquarie and Illawarra. The Australian Capital Territory and Gold Coast also recorded more than 5,000 person arrivals from Sydney over the past year. Six of the top 10 regions for arrival of former Sydney residents were within New South Wales with the remaining for in ACT, Qld and Vic.
<img src="https://www.corelogic.com.au/sites/default/files/2018-05/2018-05-14-pulseimg1.jpg" alt="Top 10 regions of arrival from Sydney 2016-17" width="688" height="410">
The top five regions of arrival for former residents of Melbourne are all within Victoria and they are all directly adjacent to Melbourne. Latrobe-Gippsland (7,259) and Geelong (6,894) have attracted the greatest number of former Melbourne residents over the past year. Seven of the top 10 regions for arrivals of former Melbourne residents were in Victoria with the Gold and Sunshine Coasts in Qld and the ACT accounting for the other three regions in the top 10.
<img src="https://www.corelogic.com.au/sites/default/files/2018-05/2018-05-14-pulseimg2.jpg" alt="Top 10 regions of arrival from Melbourne 2016-17" width="659" height="395">
 Seven of the top 10 regions for arrivals of departing residents of Brisbane are also located in Qld. The Gold and Sunshine Coasts record a much greater number of arrivals from Brisbane than any of the other regions on the list. Interestingly, the data also suggests that those migrating away from Brisbane to other areas of Qld tend to remain in the southern areas of the state. The three regions of top migration from Brisbane that aren’t within the state are Melbourne-Inner, Richmond-Tweed (directly adjacent to the Gold Coast) and the ACT.
<img src="https://www.corelogic.com.au/sites/default/files/2018-05/2018-05-14-pulseinmg3.jpg" alt="Top 10 regions of arrival from Brisbane 2016-17" width="653" height="399">
 A reasonably large number of residents leaving Adelaide move to other regions of SA (noting there are only three regional SA4 areas in SA). The South-East region of the state is the most popular for departing Adelaide residents followed by Barossa-Yorke-Mid North. Melbourne is also a popular region for those departing Adelaide accounting for three of the top 10 regions with the ACT, Darwin, Gold Coast and Parramatta also making the list for regions outside of SA.
<img src="https://www.corelogic.com.au/sites/default/files/2018-05/2018-05-14-pulseimg4.jpg" alt="Top 10 regions of arrival from Adelaide 2016-17" width="674" height="397">
 It is perhaps a little surprising that the top destinations for departing residents of Perth are within Western Australia and not interstate. The four regional SA4 regions of the state are also the top four destinations for those migrating out of Perth. Regions of Melbourne account for three of the remaining five locations outside of WA with Darwin, Gold Coast and ACT also making the list.
<img src="https://www.corelogic.com.au/sites/default/files/2018-05/2018-05-14-pulseimg5.jpg" alt="Top 10 regions of arrival from Perth 2016-17" width="661" height="402">
 The most popular region for residents of Hobart that move out of the city is the surrounding South East region. In fact, the South East has seen double the number of migrants from Hobart than Launceston and the North East in second place. Note that there are only three SA4 regions of Tas outside of Greater Hobart and they are each listed. Outside of Tas, four regions are in Vic (each of which are in Melbourne), two regions are in Qld and the remaining region is the ACT.
<img src="https://www.corelogic.com.au/sites/default/files/2018-05/2018-05-14-pulseimg6.jpg" alt="Top 10 regions of arrival from Hobart 2016-17" width="664" height="398">
 When residents of Darwin move away from the city, the greatest share of them move to other parts of the Territory outside of the capital city. Qld is a popular destination from Darwin residents moving away with five of the top 10 regions listed within the state and all except for Ipswich being in coastal locations. The top 10 list also includes one region each in Melbourne, Perth and Adelaide as well as the ACT.
<img src="https://www.corelogic.com.au/sites/default/files/2018-05/2018-05-14-pulseimg7.jpg" alt="Top 10 regions of arrival from Darwin 2016-17" width="665" height="394">
 Residents of Canberra that leave don’t have the option to move elsewhere within the territory however, a substantial number of them move to the Capital Region located adjacent in NSW. Seven of the 10 most popular regions for people from Canberra to migrate to are in NSW and 6 of them are in Sydney. Elsewhere in the top 10 Canberrans have migrated to two regions of Melbourne and the Gold Coast.
<img src="https://www.corelogic.com.au/sites/default/files/2018-05/2018-05-14-pulseimg8.jpg" alt="Top 10 regions of arrival from Canberra 2016-17" width="660" height="396">
 The data shows that overall a significant number of those people that moved away from a capital city over the past financial year moved to an area adjacent to the capital city. Some of these are coastal/lifestyle markets while also being locations where housing is more affordable. The reality is the reasons for moving to these locations likely vary somewhat from one in which the residents are seeking more affordable housing or one in which residents are looking for a seachange/treechange. 
CAMERON KUSHER is head of research for CoreLogic. You can contact him <a href="https://blog.corelogic.com.au/about/">here</a>.
</body></html>

Cameron Kusher

Editor's Picks

Have something to contribute?

Developments

New apartments

New townhouses

News

Cameron Kusher

Editor's Picks

Receive the latest news stories to your inbox

Have something to contribute?

Developments

New apartments

New townhouses

News