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.

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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

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EXPERT OBSERVATION
Dwelling values, particularly those in Sydney and Melbourne, have been falling now for a number of months.  The latest ABS housing finance data indicates that the impact of these falls is now seemingly being felt in demand for new mortgages.  
While the value of lending fell over the month for owner occupiers and investors, the slowdown was much more substantial for investors, and the sharp month-on-month fall follows a downwards trend that has been evident across several rounds of macro prudential measures over the past few years.  This isn’t really a surprise given so much of the lending to investors has been focused on Sydney and Melbourne and these cities are seeing values fall and yields at close to historic lows while investors are also incurring higher mortgage rates than owner occupiers, with additional rate premiums they use interest-only mortgages,.
Click here <a href="https://www.propertyobserver.com.au/images/2018/5/11/fig1.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/2018/5/11/fig1.jpg" alt="">
In March 2018 there was $31.9 billion worth of housing finance commitments which was the lowest monthly value of commitments since August 2016.  Housing finance commitments were split between $21.0 billion to owner occupiers and $10.9 billion to investors.  Owner occupier commitments fell by -1.9% over the month to their lowest value since December 2017.  Investor finance commitments were down by -9.0% over the month, falling to their lowest value since January 2016.  The declining trend in investor housing finance commitments had slowed recently, however, the -9.0% monthly fall was the largest decline since September 2015 when they fell -10.4% over the month as lenders tightened in order to remain under the 10% APRA speed limit in annualised terms.
Click here <a href="https://www.propertyobserver.com.au/images/2018/5/11/fig2.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/2018/5/11/fig2.jpg" alt="">
The $21.0 billion worth of finance commitments to owner occupiers was split between: $1.9 billion for construction of dwellings, $1.2 billion for purchase of new dwellings, $6.3 billion for the refinance of established dwellings and $11.6 billion for the purchase of established dwellings.  Each type of owner occupier commitment fell over the month however, year-on-year the value of lending for construction of dwellings was the only owner occupier finance segment that was lower.
Click here <a href="https://www.propertyobserver.com.au/images/2018/5/11/fig3.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/2018/5/11/fig3.jpg" alt="">
The $10.9 billion worth of investor housing finance commitments in March 2018 was split between $1.0 billion for construction of new dwellings and $9.9 billion for established dwellings.  The value of lending for new construction was -18.9% lower over the month while the value of commitments for established dwellings was -7.9% lower.  
Click here <a href="https://www.propertyobserver.com.au/images/2018/5/11/fig4.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/2018/5/11/fig4.jpg" alt="">
Looking more broadly at finance commitments for new housing vs established housing shows a decline over the month for both.  The chart also shows how the established market, of which there are substantially more properties, dwarfs the new housing market.  Over the month there was $4.1 billion worth of commitments for new housing and $21.5 billion for existing housing (excluding refinances).  Commitments for new housing fell by -1.9% over the month while commitments for existing stock were -6.8% lower. 
A month’s worth of data doesn’t necessarily indicate a trend but it was quite a substantial fall in the value of housing finance commitments in March, particularly for investors.  CoreLogic has believed for some time that investment in housing, particularly in the most expensive markets of Sydney and Melbourne, made little sense given stretched affordability, yield compression and little near-term value growth prospects with values currently declining.  Despite this, lending finance data (which will be updated next Tuesday) has continued to show investor activity which is well above average levels in NSW and Vic.  We would expect that the coming release will show a further weakening of demand in these two states.
Over the coming months it is anticipated that mortgage activity, particularly from the investment sector will remain weak relative to recent years.  With APRA recently announcing they will lift the 10% speed limit on investment credit growth from July 1, it will be important to watch the trend in investment credit flows.  
There have been recent reports that lenders are starting to reduce the interest rate premiums on some interest only loans and investment loans, however any reduction in rates could be offset by stricter serviceability testing on borrower expenses and incomes as well as the prospect for renewed focus from lenders to reduce their exposure to high loan to income ratio loans as well as maintaining their reluctance to take on high loan to valuation ratio loans.  
CAMERON KUSHER is head of research for CoreLogic. You can contact him <a href="https://blog.corelogic.com.au/about/">here</a>.
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ckusher-ujnxiKuFQs

Is a crunch in investor mortgage demand now starting to bite?

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EXPERT OBSERVATION
After many years of strong increases in dwelling values, the two largest housing markets, Sydney and Melbourne, have begun to see values fall over recent months.  While values are declining in both cities the speed of the declines vary greatly, both compared to one another and compared to other recent downturns in these housing markets.
<img src="https://corelogic.com.au/sites/default/files/styles/media_crop/public/2018-04/2018-04-23-blogim1.png" alt=""> 
Since values peaked back in July 2017, Sydney dwelling values have fallen by -3.9% over the following eight months.  If we look at the three previous downturns highlighted in the above chart, in the 2003-06 downturn values had fallen by -5.8% eight months in and went on to decline by -8.2% over 25 months before values started rising again.  In the 2008-09 downturn, values were -4.9% lower eight months in and went on to fall by -7.0% over 12 months.  The 2010-11 downturn saw values fall from their peak to their trough by -3.7% and after 8 months they had fallen by just -1.0%.
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 Dwelling values in Melbourne have not been falling as quickly or for as long as those in Sydney.  After the market peaked in November of last year, values have fallen by -0.7% over the four months to March 2018.  In 2003-04, values fell by a total of -3.0% over nine months and were -1.0% lower after four months of declines.  In 2008-09 values fell for 11 months, they had fallen by -3.9% over the first four months and ended up declining by -9.4%.  In the first four months of the 2010-12 period of value falls values were -2.2% lower before they ultimately fell by -8.4%.  Outside of these recent declines, values recorded a peak to trough fall of -8.3% between 1989 and 1992 with values falling by -2.5% over the first four months of this period.
Two other capital cities, Perth and Darwin, have been recording value falls for some time.  Although their declines are somewhat lengthier and different to recent falls in Sydney and Melbourne, it is valuable to analyse how these declines have evolved.
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Perth dwelling values increased in March 2018 however, over the period from June 2014 to February 2018 values fell by -11.0%.  There is no guarantee that these declines are over as yet although the pace of these declines has steadied recently.  It is also interesting to note that during the most recent period of value falls the declines began much more moderately on a month-to-month bases than they did in 2006-07, 2008-09 and 2010-11, with the downturn stretching on much longer than any of these previous downturns.  In 2006-07, values fell by -3.7% in five months, in 2008-09 values were -11.0% lower over 13 months and in 2010-11 values declined by -9.1% over 19 months.
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 Darwin has only seen two recent period of market downturn, between October 2010 and September 2011 and from May 2014 to February 2018 (values rose over March 2018).  Again, it should be noted although values have risen over the month it doesn’t necessarily mean the downturn is over.  Over the 11 month downturn in 2010 and 2011, Darwin dwelling values fell by -7.9%.  The more recent downturn saw value declines start slower than those in 2010-11 with the downturn stretching for much longer.  As at February 2017 Darwin dwelling values have fallen by -22.3% from its previous peak in May 2014.
While these charts are interesting to consider they don’t provide any particular guidance as to how deep or elongated the current downturns in Sydney and Melbourne may be.  The weak housing market conditions in Perth and Darwin were largely a symptom of weak economic and demographic conditions, while the current downturns in Sydney and Melbourne are occurring against reasonably strong economic and demographic conditions; the slowdown is primarily being influenced by tighter credit conditions.  
What is interesting is that comparing to Perth and Darwin shows that just because they have started falling slower than other housing market downturns doesn’t necessarily mean they won’t end up as a deeper and longer downturn.  Of course the reverse is true as well but it will be interesting to see how deep and how long these current downturns persist for in Sydney and Melbourne and whether they lead to downturns in other cities and regions too.
CAMERON KUSHER is head of research for CoreLogic. You can contact him <a href="https://blog.corelogic.com.au/about/">here</a>.
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Are all property downturns the same?

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EXPERT OBSERVATION
The latest annual taxation data shows that state and local government coffers were boosted by $52.5 billion in 2016-17 due to taxes on property.
Each year, the Australian Bureau of Statistics (ABS) releases taxation statistics and the latest data for 2016-17 was released recently. Over the 2016-17 financial year, state and local governments collected $52.5 billion in taxes from property with the figure climbing by 5.9% over the year. The taxation take from property is now more than double what it was in 2005-06.
Property taxes accounted for an historic high 52.8% of all tax revenue for state and local governments, up from 51.9% over the previous year.
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Property taxes are broken down into two broad types, taxes on immovable property and taxes on financial and capital transactions. Taxes on immovable property include: land tax, municipal rates and other smaller taxes. Taxes on financial and capital transactions include predominately stamp duties as well as a few other smaller taxes. Taxes on immovable property were recorded at $29.185 billion over the year with the remaining $23.338 billion being taxes on financial and capital transactions. Over the year, taxes on immovable property increased by 7.9% while taxes on financial and capital transactions increased by 3.6%.
The table highlights the value of taxation revenue between 2006-07 and 2016-17 across each state and territory for land tax, municipal rates and stamp duty, which are the three largest sources of taxation revenue at the state and local government level. Probably the most notable change over the period has been the uplift in revenue, particularly from stamp duty, in NSW and Vic which reflects the strength of these housing markets over the past decade relative to other states and territories.
Between 2006-07 and 2016-17, stamp duty revenue in NSW has increased by 115% and it has increased by 114% in Vic. Revenue from land taxes have doubled over the period in Vic (153%), Qld (123%) and WA (125%) while revenue from municipal rates has doubled over the period in WA (125%) and ACT (184%).
In NSW, stamp duty revenue accounted for 49.1% of all property tax revenue in 2016-17 up from a recent low of 32.3% in 2008-09. It is a similar story in Vic where stamp duty revenue accounted for 42.6% of property tax revenue, up from a recent low of 36.5% in 2012-13. The cyclical nature of housing market transactions makes stamp duty a volatile source of revenue for state governments. Another way to look at this is in WA where the housing market has been weak for a number of years, stamp duty revenue accounted for just 28.5% of all property related tax revenue in 2016-17 down from a peak of 54.5% in 2007-08.
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From here, we are now seeing the combined effect of dwelling values and transaction numbers falling in Sydney and Melbourne along with a number of regional areas of NSW. Both the NSW and Vic governments have benefitted substantially from stamp duty revenue over recent years and it now appears set to fall over the coming years as the housing market weakens after a number of years of surging values.
With a volatile source of taxation revenue such as stamp duty that taxes the small proportion of individuals that transact property each year, moving away from a transactional tax to a tax on all physical properties seems to make a lot of sense. Especially considering transaction volumes remain well below their peak and stamp duty revenue growth is largely being driven by higher values rather than a greater number of transactions.
Of course the transition to a broad based land tax will be difficult and recent owners may have to be compensated however, a more guaranteed source of revenue for state and territory governments means that they can much better plan for the future rather than being reliant on dwelling values and transactions remaining high in order to boost revenue.
Over the second half of 2017 and into 2018 we have seen residential housing markets weaken with values and transactions falling, particularly in NSW and Vic. As a result we would expect over the current financial year that stamp duty revenue will fall and as a result so will total property taxation revenue.
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Property tax revenue continues to climb: Cameron Kusher

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EXPERT OBSERVER
Housing finance data from The Australian Bureau of Statistics (ABS) on first home buyer activity has generally shown that this segment of the market has been tracking at below average levels over recent years. 
However, with each state and territory offering some level of incentive to first home buyers including grants and tax concessions, this segment is moving along quite nicely. 
Nationally, there were 8,782 housing finance commitments in February 2018. Although the volume of loans was down on levels in late 2017, it was 33.1% higher than the previous February.
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As a share of all owner occupier commitments, first home buyers accounted for 17.9% in February 2018 compared to 13.3% the previous year. 
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Across the individual states and territories, we’re seeing several varying trends emerge – all likely due to activity across other buyer types in the market and how recently certain incentives have become available.
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Performance around the States:
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NSW: February 2018 saw 2,246 first home buyer housing finance commitments compared to 1,105 the previous year which is an increase of 103.3%. Since the end of June 2017, stamp duty concessions have become available and over the 8 months there have been 18,400 commitments compared to 10,857 over the previous 8 months. First home buyers now account for 15.1% of owner occupier finance commitments up from 7.5% a year earlier. The 15.1% is the greatest share 3,000 since October 2012.
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Vic: 2,619 finance commitments to first home buyers in February 2018. The number of commitments was 38.6% higher than a year earlier. Vic also saw stamp duty exemptions go live on July 1 last year. From the end of June there have been 23,996 first home buyer commitments compared to 17,522 over the previous 8 months. First home buyers accounted for 18.3% of commitments compared to 13.9% a year earlier.
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Qld: Over the month there were 1,839 first home buyer housing finance commitments. The number of commitments was only marginally higher from a year ago (+3.8%). First home buyers have been much more active over recent years than in NSW and Vic although, it should be noted investors have been much less active in the Qld market. First home buyers accounted for 19.3% of the market in February 2018 compared to 17.6% a year earlier. 
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SA: In February 2018 there were 443 first home buyer housing finance commitments. Although the number was lower than those recorded late last year, it was 17.8% higher than the previous February. Despite house values being the lowest of any mainland capital city, SA has the lowest share of first home buyer activity of any state or territory with 13.0% of owner occupier commitments going to first home buyers, a year ago they accounted for a 10.5% share so they have risen a little. 
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WA: There were 1,185 first home buyer finance commitments in February 2018 which was -0.1% fewer than the volume in FHB No. (LHS) February 2017. WA is the only state or territory in which there were fewer commitments to first home buyers than a year ago. Despite the fall in volumes, first home buyers account for 25.0% of all owner occupier housing finance commitments compared to 22.2% a year ago.
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Tas: Over the month of February 2017 there were 137 first home buyer housing finance commitments which was 2.2% higher than the previous February. As a share of all owner occupier housing finance commitments, first home buyers account for 13.9%, up marginally from 13.8% a year ago. A common commentary is that a lot of younger people are moving to TAS to buy a home because they can’t afford one on the mainland. Although the number of first home buyers rose over the year, they remain very low which suggests, at least at this stage, first home buyers in TAS are not particularly active. 
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NT: While 52 first home buyer commitments in February 2018 is quite a low number, it is 26.8% higher than the previous year despite a sharp monthly fall. As a share of all owner occupier commitments, first home buyers account for 19.4% compared to 14.7% a year earlier however, the share is currently trending lower. 
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ACT: The 261 first home buyer housing finance commitments in February 2018 was a 177.7% increase in the number from the previous year. As a share of all owner occupier commitments, first home buyers accounted for 25.6% in February 2018 which was the highest share since October 2009.
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The latest trends in first home buyer activity highlights the sensitivities of this important market segment to both affordability constraints as well as market incentives such as first home buyer grants and stamp duty concessions.
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Despite overall slowing conditions in Sydney and Melbourne, the CoreLogic home value indices results show that the more affordable end of the housing markets in these cities as still seeing values rise and likely generated by first home buyer activity.
In other cities where affordability constraints are less severe, in the absence of any changes to first home buyer incentives, first time buyers generally remain more active relative to Sydney and Melbourne.
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With demand from the investment segment expected to continue to be weaker than it has over recent years, this may afford more opportunities for first home buyers to enter the market. 
Outside of the two largest cities, first home buyer volumes may lift over the coming months due to ongoing low mortgage rates and relative affordability compared to Sydney and Melbourne. In fact, the outflow of people from NSW to other states and territories is continuing to rise which may result in increases in first home buyers elsewhere. 
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CAMERON KUSHER is head of research for CoreLogic. You can contact him <a href="https://blog.corelogic.com.au/about/">here</a>.
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First home buyer levels tracking below average levels for years

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The latest data from the Reserve Bank (RBA) shows that the expansion of housing credit is occurring at a historically sluggish pace as tighter credit policies and slower housing market conditions dampen investment participation in the housing market.
The RBA releases its financial aggregates on the last working day of each month and it provides valuable insight into outstanding credit to all mortgage lenders in Australia.  
The latest data shows that in January 2018, housing credit expanded by 0.5% which was actually greater than the 0.4% expansion the previous month.  Splitting the data by owner occupier and investors, owner occupier credit expanded by 0.6% compared to 0.2% for investors.
<img src="https://www.corelogic.com.au/sites/default/files/2018-03/2018-03-05-pulseimg1.png" alt="CoreLogic monthly change in housing credit owner occupier vs investor" width="655" height="297">
The first chart shows the monthly change in housing credit for owner occupiers and investors, while owner occupier credit expansion is tracked fairly steady, there is a clear slowing of credit expansion to investors currently.  The slowdown is being fueled by switching of investor loans to owner occupier and macroprudential policies which limit credit growth to investors.  
The macroprudential policies have come in two waves, the first wave limited lenders from growing investor credit by more than 10%pa while the second wave limited new interest-only lending (which is largely utilised by investors) to 30% of new originations.  The first chart suggests that the first wave actually tightened investor credit growth more than the second wave, highlighted by the fact that in December 2015 investor credit recorded no change while the slowest rate of expansion since the second wave of policies has been 0.2% which is not as severe of a slowdown as that experienced following the first wave of macroprudential policies.
<img src="https://www.corelogic.com.au/sites/default/files/2018-03/2018-03-05-pulseimg2.png" alt="CoreLogic Annual change in housing credit, owner occupier vs investor" width="658" height="303">
The second chart focusses on the annual change in housing credit and shows the benchmark for the 10% speed limit for investor lending which was introduced by APRA in late 2014. This chart also highlights a relatively steady expansion in owner occupier credit but a slowing expansion of investor credit.
<img src="https://www.corelogic.com.au/sites/default/files/2018-03/2018-03-05-pulseimg3.png" alt="CoreLogic housing's share of total outstanding credit to lenders" width="666" height="271">
At the end of January 2018, the total value of outstanding housing credit was $1.731 trillion which was an historic high.  As a share of the total value of credit outstanding to lenders, residential housing accounts for a record-high 62.0%. The data shows a clear preference for lending for residential housing over recent years especially when you consider at the end of 2007, just prior to the GFC, housing accounted for a much lower 51.9% of total outstanding credit.
<img src="https://www.corelogic.com.au/sites/default/files/2018-03/2018-03-05-pulseimg4.png" alt="CoreLogic share of total outstanding housing credit to investors" width="665" height="292">
The fourth chart highlights outstanding investor credit as a share of total outstanding housing credit.  In January 2018, outstanding credit to investors was recorded at $587.9 billion which represented 34.0% of total housing credit.  Although investors make up a significant proportion of outstanding credit, as a share investor credit has been falling since its peak of 38.7% in June 2015.  In fact, the share of credit to investors is at its lowest level since May 2013.
Based on the most recent data from APRA, Australian lenders have comprehensively met the macroprudential targets for investment credit growth and interest only lending.  Considering annual investment credit growth, at 3.0%, continues to track well under the 10% speed limit and interest only lending  is also well under the 30% benchmark, it’s possible investment credit growth could lift over coming months.
Investors do face other headwinds though, with capital gains cooling, yields tracking well below average and depreciation benefits less appealing since the federal government budget last year.
Overall, the expansion in housing credit is now largely being driven by the owner occupier segment of the market.  With mortgage rates expected to rise some time over the next two years and dwelling values falling, it will be interesting to see how long the steady expansion in owner occupier credit can last.
Cameron Kusher is head of research for CoreLogic. You can contact him <a href="https://blog.corelogic.com.au/about/">here</a>.
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Overall housing credit growth lower after investor loan drop: Cameron Kusher

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Value growth over the past decade has been characterised by substantial value rises in Sydney and Melbourne while elsewhere capital gains have been materially lower, in fact negative in some regions.
Over the past decade the Australia housing market has been impacted by the Global Financial Crisis (GFC), periods of rising and falling mortgage rates, heightened levels of investment and growing demand for housing from offshore buyers. Additionally, the national economy has transitioned away from a boom in the commodity cycle and major resources related infrastructure projects towards the services sector and housing construction. The market has also seen significant variation in the rates of value growth with Sydney and Melbourne leading the way.  
The first chart shows the cumulative change in dwelling values over the 10 years to January 2018.  Over the period, values across the nation increased by 41.8% however, it is important to note this was heavily influenced by the two largest housing markets, Sydney and Melbourne.  In fact, while nationally dwelling values have increased by 41.8% over the past decade, only Sydney (79.3%), Melbourne (72.4%) and regional Victoria (42.7%) have recorded value growth in excess of that figure.
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Three regions of Australia have seen dwelling values which are currently lower than they were a decade ago.  These regions are Perth (-6.9%), Regional Qld (-5.1%) and regional WA (-29.5%).  Although all other regions have recorded value increases over the past decade, there has been growth of less than 10% over the decade in Darwin (5.4%) and regional SA (4.0%).
In early 2008 the GFC hit and dwelling values began to slide.  Although the periods of decline varied across regions, generally values started to fall early in 2008 with value growth returning in early 2009.   The declines were fairly short and sharp.  The declining housing market was reversed due to two main factors: a swift reduction in mortgage rates and the introduction of government stimulus including additional first home buyer incentives which helped stimulate growth in demand and subsequently values.
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During the GFC downturn, all regions of the country recorded declines with national values falling by -7.9% between February 2008 and January 2009.  Western Australia was particularly hard hit by the downturn with values falling by double-digits in Perth (-11.0%) and Regional WA (-12.2%) while all other regions avoided double-digit value falls.  Value declines during the GFC downturn were relatively minor in Darwin (-1.5%), Regional SA (-2.4%) and Regional NT (-2.2%).
Following the stimulus-led re-inflation of dwelling values post-GFC, as the stimulus was removed from the market values once again started to fall.
First home buyer incentives were removed and the Reserve Bank started to lift interest rates from their generational lows.  Between 2010 and 2012, although timing does vary somewhat across the regions, the national housing market once again experienced value declines.
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Between June 2010 and February 2012, national dwelling values fell by -6.5% with capital cities experiencing slightly larger falls than regional markets.
In this downturn, Qld was hardest hit with Brisbane (-10.6%) and regional Qld (-11.1%) the only regions to record double-digit value falls.  By comparison, Sydney (-3.7%), regional Vic (-3.6%) and regional SA (-3.0%) recorded relatively minor value declines throughout the period.
More recently, softer housing market conditions have become evident with a number of regions starting to see values decline.  The final chart highlights the change between current dwelling values and the historic housing market peak.  
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Nationally, dwelling values are -0.7% off their peak with the combined capital cities (-1.0%) the main driver of the weakness.  In fact, Brisbane and Hobart are the only capital cities in which values at the end of January 2018 were not lower than their previous peak.  Perth (-10.9%), Darwin (-21.7%) and regional WA (-29.5%) currently have dwelling values which are more than 10% below their previous peaks.
The data presented within highlights that despite most regions of the country having seen dwelling values increase over the past decade, within that decade there have been periods in which values have fallen.  The data presented also highlights how during the value growth periods, growth has very much been slanted towards the Sydney and Melbourne markets.
With dwelling values now falling in a number of regions, it will be interesting to see how rapidly values, fall, what may or may not be done to slow the falls and how the market declines will compare to other periods of decline over the past decade.
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Little value growth outside of Sydney And Melbourne over past decade: Cameron Kusher

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The days on market metric provides an indication as to how quickly properties sold by private treaty are likely to sell.
The current data at a national and capital city level shows fairly steady days on market however, we are seeing diverging trends across the individual cities. 
At the end of 2017, properties sold by private treaty across the nation typically took 45 days to sell and across the combined capital cities they took 40 days to sell. Both the capital city and national measure has been reasonably steady over recent months however, the days on the market figure for each region was slightly 60 lower a year earlier. In December 2016 it typically took 44 days to 40 sell a property across the nation and 37 days across the combined 20 capital cities 
The trends are changing quite significantly across the individual capital cities. 
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Sydney
The typical home took 42 days to sell in December 2017, up from 34 days a year earlier. The 42 days it currently takes to sell is the longest time on market since May 2016 and up from its
Melbourne
Homes in the city typically take 33 days to sell which isupfrom29daysattheendof2016. The29daysattheendof 2016 was also a recent low in days on market for the city.
Brisbane
In December 2016 the typical home took 47 days to sell while a year later they were taking 53 days to sell. The days on market figure has been trending higher since reaching a recent low of 43 days in March 2017.
Adelaide
Properties currently take 41 days to sell which is down from 43 days a year earlier. The typical days on market has been falling over recent months in Adelaide.
Perth
There has been a consistent decline in the days on market figure over the past year falling from 58 days to 53 days. After recently peaking at 75 days in August 2017 there has been a sharp fall over recent months.
Hobart
Properties are currently taking 33 days to sell which is marginally lower than the 34 days a year ago. Homes have been selling quite quickly in Hobart over the past two years as value growth has accelerated. 
Darwin
The days on market figure for the city at 75 days is substantially lower than the 88 days recorded a year earlier and 100 well down on the recent peak of 119 days in March 2017. 
Canberra
At 42 days, properties are taking longer to sell currently 60 than they were a year ago when they took 39 days.
With dwelling values now falling in Sydney and slowing across many cities it is reasonable to expect that over the coming 12 months the number of days it takes to sell a property will trend higher. In particular this is likely to occur in Sydney (where valuesare already falling) and Melbourne given that both cities have experience rapid rates of sale and strong growth in dwelling values over recent years. Vendors in those cities were market conditions are softening will need to be realistic about their pricing expectations; as properties take longer to sell, buyers will be more140 inclined to negotiate on asking prices and vendors may face higher  competition from other properties listed for sale as inventory levels rise. 
On the other hand, markets such as Perth, where housing values have been falling, are now showing a reduction in total advertised stock levels and homes are starting to sell in fewer days which should help to dampen further value falls. 
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Vendors need to realise market conditions are softening: CoreLogic's Cameron Kusher

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The latest data on property exposures of Australia’s authorised deposit-taking institutions (ADI) show that the perceived riskier areas of new mortgage lending continue to slow.  This is indicative of the macroprudential measures which have been implemented by APRA taking effect and slowing higher loan to valuation ratio (LVR) lending as well as the more recent crackdown on both investor and interest-only mortgage lending.
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  The latest quarterly property exposures data released by APRA for the September 2017 quarter shows that ADIs provided mortgages worth $98.211 billion which was 3.3% higher than the value of lending over the same quarter last year.  These new mortgages were split between $67.217 billion for owner occupiers and $30.994 billion for investors.  The value of lending to investors was actually the lowest it has been since the March 2016 quarter.  The value of lending to investors fell by -9.1% over the quarter and is -6.6% lower year-on-year.  After most recently peaking over the December 2016 quarter at $35.572 billion in investor commitments, the value has fallen by -12.9% to September 2017.  While investor demand has fallen, the value of owner occupier mortgage commitments continues to rise to its highest quarterly value since December 2015.
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  The total value of interest-only lending over the September 2017 quarter was $16.603 billion which was -44.8% lower than the value over the June 2017 quarter and -52.8% lower than it was a year ago.  We have recently seen the implementation on the cap of new interest-only lending, limiting it to 30% of new mortgages.  Over the September 2017 quarter, interest-only mortgages accounted for 16.9% of new mortgage lending which was the lowest proportion on record and well down on the 30.5% the previous quarter.  It is a little surprising to see the proportion of lending to investors fall so much over the quarter, especially considering that the cap is 30%.  This potentially indicates that the higher mortgage rates being incurred by interest-only borrowers are actually curtailing demand more so than the cap.
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The changes to macroprudential policies has resulted in (not-surprisingly) more prudent borrowing.  As a result there has been an ongoing decline in new mortgages being written on high loan to valuation ratios (LVRs).  Over the quarter, $6.676 billion in mortgages were for LVRs above 90%.  Based on this figure, the value of mortgages on LVRs above 90% was -2.3% lower over the quarter, -13.3% lower over the year and it was the lowest quarterly value of mortgages greater than 90% LVR since March 2011.  Over the quarter, the value of mortgages with an LVR of between 80% and 90% was $13.547 billion which was -4.1% lower over the quarter but 3.6% higher year-on-year.  Over the September 2017 quarter, an historic low 20.6% of new mortgages had an LVR greater than 80%.
This latest data highlights that there appears to be a much more prudent approach being taken towards investment and interest-only mortgage lending.  Of course, the macroprudential policies implemented by APRA were specifically targeting these segments of lending which suggests that they are being successful.  Over the coming quarters the most interesting developments to watch will be whether investor lending continues to decline, which we suspect it will.  It will also be interesting to see whether interest-only lending rebounds back to levels closer to the 30% limit or if they continue to languish at much lower levels. If it is the former it indicates that potentially lenders tightened too hard and that there remains demand for this product.  Meanwhile, if it is the latter it suggests that demand for interest-only lending has reduced.
Cameron Kusher is head of research for CoreLogic. You can contact him <a href="https://blog.corelogic.com.au/about/">here</a>.
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j.ballantyne1990-6AQqhLzZaK

IO loans hit record low: Cameron Kusher

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Despite moderate value declines recently, and with a healthy median dwelling value of $904,041 as at November 2017, Sydney is remains the nation’s most expensive capital city housing market and has kept up this pace consistently, excluding a short period during 2006 and 2007 when Perth surpassed the city. 
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A valuable exercise is to look at how over time, Sydney’s premium relative to the other capital city markets has cycled.
(Note: The accompanying charts show the Sydney premium over time with the red line highlighting the average premium over the length of the period shown on each chart). 
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Overview – capital cities performance compared to Sydney: 
• Melbourne – dwelling values currently sit at $718,325 indicating that Sydney values are 25.9% higher. The Sydney premium is currently the lowest it has been since April 2014. Over the long- term Sydney’s average premium has been 39.2%. 
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• Brisbane – with a median dwelling value of $490,915, Sydney dwellings are currently 84.2% more expensive than Brisbane’s. The long-term average premium is 54.1% and the premium has consistently been higher than this average since September 2014 
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• Adelaide – Sydney dwelling values have, on average, been 180.3% higher than Adelaide’s. Adelaide’s current median dwelling value of $432,126 sees the Sydney premium at 109.2%. Sydney has had an above average premium to Adelaide consistently since November 2014. 
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• Perth – the current median dwelling values for the city is recorded at $463,026 which indicates that Sydney’s current median is 95.2% higher compared to a long-term average difference of 60.8%. The premium for Sydney housing has been above the long-term average since August 2015. 
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• Hobart – with a median dwelling value of $398,093, Sydney’s median value is currently 127.1% higher. The long-term average Sydney premium is 105.0% indicating that the gap has been wider than average since December 2013. 
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• Darwin – Sydney dwellings are currently 108.9% more expensive than Darwin’s median dwelling value which sits at $432,774. Over the long-term the average premium for Sydney dwellings has been recorded at 54.9% with the premium consistently above the long- term average since June 2015. 
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• Canberra – the median dwelling value currently sits at $588,788 which means that Sydney has a value premium of 53.5%. The long-term average premium for Sydney is 33.2% with the premium having been above average consistently since April 2014.
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Just because the Sydney premium is currently above the long-term average for most cities, this doesn’t necessarily mean that we will see a reversion to those long term averages.
We acknowledge that dwelling values are beginning to fall in Sydney after a substantial increase over recent years. Assuming these falls continue, the premium relative to the other capital cities is likely to decline.”
Across most capital cities the current Sydney dwelling value premium is similarly large to what it was late in 2002 after a significant period of growth for the city. Following that growth phase, Sydney values peaked in December 2002 and then fell by 8.2% and didn’t eclipse the previous peak until October 2007. Mr Kusher said, “It is reasonable that we could see similar falls over the coming year(s) which would in-turn narrow the gap between the value of housing in other capital cities relative to Sydney.”
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Cameron Kusher is head of research for CoreLogic. You can contact him <a href="https://blog.corelogic.com.au/about/">here</a>. 
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Sydney has consistently kept mantle as nation's most expensive capital city

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Typically, when analyzing housing markets, the median (the middle value) is the most popular method.
By definition the median provides an idea of what a typical property is either selling for or valued at.
By looking at different valuation percentiles, it delivers a much better idea of the range of housing costs across a geography.
(Note: The 10th percentile value represents the lower end of a housing market while the 90th percentile indicates the most expensive 10% of properties).
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Across Australia’s combined capital cities, the median dwelling value is $650,930 while the 10th percentile value is $350,723 and the 90th percentile value is $1,455,490.
The difference between the median and the 10th percentile value is -46.1% while the difference from the median to the 90th percentile is 123.6% which results in a range between the 10th and 90th percentile values of 315.0%.
(Note: that the broader this range the more diverse the cost of housing and the narrower the less diversity there is).
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Let’s take a look across the capital cities.
Sydney – the 10th percentile value is $563,459 which is -37.8% lower than the median of $905,917. The 90th percentile value is 113.8% higher than the median and 243.7% higher than the 10th percentile value and is recorded at $1,936,633.
Melbourne – the 90th percentile dwelling value is $1,474,777 which is 107.6% greater than the median of $710,420. At $437,519 the 10th percentile value is -38.4% lower than the median while the 90the percentile value is 237.1% higher.
Brisbane – the median dwelling value is recorded at $490,525 while the 10th percentile value is $302,177 and the 90th percentile is $826,860. The 10th percentile value is -38.4% lower than the median while the 90th percentile is 68.6% higher than the median and 173.6% higher than the 10th percentile.
Adelaide – the 90th percentile dwelling value ($746,497) is 73.5% greater than the median ($430,303) and 180.9% greater than the 10th percentile value ($265,730). The 10th percentile value is - 38.2% lower than the median.
Perth – with a median of $462,624, the 90th percentile value at $852,021 is 84.2% higher than the median. The 90th percentile value is 184.7% higher than the 10th percentile value which at $299,293 is -35.3% lower than the median value.
Hobart – the 10th percentile value for the city is $234,337 which is -40.9% lower than the median ($396,393) and the 90th percentile value ($662,519) is 182.7% higher than the 10th percentile and 67.1% higher than the median. sizes and values across the capital cities. 
Darwin – at $640,087 the 90th percentile dwelling value is 46.2% higher than the median ($437,910) and 112.0% higher than the 10th percentile value ($301,889). The 10th percentile value is -31.1% lower than the median value.
Canberra – the median dwelling value currently sits at $582,882 while the 10th percentile value is $381,100 and the 90th percentile value is $919,436. The 90th percentile value is 57.7% higher than the median and 141.3% higher than the 10th percentile value while the 10th percentile value is -34.6% lower than the median.
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Across the capital cities, the 90th percentile dwelling value in all capital cities except for Melbourne and Canberra is lower than Sydney’s median value highlighting that for the typical Sydney dwelling, purchasers could be buying premium property for a similar cost in most other capital cities.
Another trend to note is that in all capital cities the difference between the median and 10th percentile value is much smaller than the gap between the median and the 90th percentile value.
This indicates that lower value housing stock tends to be closer to the median than the expensive housing stock which tends to be much further away from the median value. It highlights that in most cities while there is extremely expensive housing, there is not necessarily the same supply of extremely affordable housing.
It is interesting to look at the range of housing costs across the city as it reiterates that despite the focus on medians there is a wide variety of housing in different shapes, sizes and values across the capital cities.
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Cameron Kusher

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