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

Joel Robinson

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

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

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

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

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

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

Bottega House secures landmark riverfront site in St Lucia 

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

SIERA kicks off construction at Northcliffe tower Exhale

Cameron Kusher

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After a long period of soft housing market conditions post the 2008 GFC, we’re seeing a pick-up in housing demand across regions, according to CoreLogic research analyst Cameron Kusher.
Buyers are looking outside the capitals for "more affordable options,” he said after analysis of the 50 most populous non-capital city council areas.
“While a majority of the regions are showing an upward swing, areas linked to the mining and resources sector are continuing to see values fall.”
Of the non-capital city council areas analysed, areas close to Sydney are seeing the strongest growth in New South Wales.
As an example, the Wollongong council area is the most expensive for houses ($730,427) and units ($530,170).
The area also recorded the greatest increase in house values, and now holds the fourth highest increase in unit value over the past year.
“Places like Wollongong are on the rise as demand ripples away from Sydney where affordability constraints are more pressing.”
Regional areas in Victoria which are close to Melbourne are experiencing value growth, however, Mr Kusher said.
“It is nowhere near the magnitude to which values are growing in those locations close to Sydney.”
“Although values are rising, the 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,” he said.
For Queensland, the results are more mixed with the south-east corner generally seeing values rise, while across the remainder of the state, growth is extremely mild or values have fallen.
Stripping the spotlight from Brisbane, CoreLogic confirmed that the Gold Coast, Sunshine Coast and Noosa are now seeing more rapid value growth than for Brisbane.
“It seems as though much of the demand across these regions is coming from an acceleration in internal migration to Queensland, and where buyers from Sydney and Melbourne are using substantial equity earned to secure lifestyle properties in the state.”
<a href="https://www.propertyobserver.com.au/images/2017/06/22/Screen%20Shot%202017-06-22%20at%2011.42.30%20am.jpg" target="_blank">Click to enlarge</a>
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Of the areas observed by CoreLogic, each of the 24 regions 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, of the 10 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.
Mr Kusher said, “Overall, we’re seeing housing demand in regional areas of the country is rising.
“While many regions are seeing values 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>.
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ckusher-ujnxiKuFQs

Regional areas showing home values rising: Cameron Kusher

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The mortgage rate lift is starting to be felt, driven largely by Australian mortgage lenders rationing credit to the investor segment, according to CoreLogic's Cameron Kusher.
He said the mortgage rate premium for investors appears to finally be biting into the market with weakness in both total investor credit and investor housing finance commitments.
"April 2017 lending aggregates data from the Reserve Bank (RBA) showed that investor credit rose by 0.55 percent over the month, its lowest monthly increase since August 2016," he said.
<a href="https://www.propertyobserver.com.au/images/2017/06/15/Screen%20Shot%202017-06-15%20at%2011.16.18%20am.jpg" target="_blank" style="font-size: 12.16px;">Click to enlarge</a>
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"At the same time, April 2017 housing finance data shows there was $12.6 billion in investor housing finance commitments over the month, the lowest value since September 2016.
"Since August and September of last year, standard variable mortgage rates for investors rose by 30 basis points compared to a 5 basis point increase for owner occupiers.
“There are individual states and territories in where a slowdown in mortgage demand by investors will have more of an impact, namely New South Wales and Victoria.
“Tasmania is the only state or territory where the value of lending to housing investors is currently rising however, in terms of the value of lending to investors, New South Wales and Victoria account for a substantial majority of overall lending.
“This is partly a function of higher housing costs in these two states, nevertheless, New South Wales accounted for 49.3 percent of all investor lending nationally in April 2017 with Victoria accounting for 27.4 percent.
“A pull- back in lending to investors is inherently likely to have more of an impact on the New South Wales (Sydney) and Victorian (Melbourne) housing markets.”
<a href="https://www.propertyobserver.com.au/images/2017/06/15/Screen%20Shot%202017-06-15%20at%2011.16.30%20am.jpg" target="_blank">Click to enlarge</a>
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"The potential impact on the New South Wales and Victorian housing markets of investor slowdown is further highlighted by the fact that, excluding refinances (which are also trending lower), investors accounted for 55.3 percent of mortgage demand in New South Wales in April 2017 and 46.8 percent in Victoria.
"In all other states and territories, investors accounted for less than 40 percent of mortgage demand in April 2017, with the proportion trending lower over recent months in most regions.
“We anticipate that investor demand will continue to slow over the coming months.
“We’re seeing lenders re-price mortgage rates for investors and, we are yet to see the full impact of the policy changes designed to slow the level of interest-only lending.”
<a href="https://www.propertyobserver.com.au/images/2017/06/15/Screen%20Shot%202017-06-15%20at%2011.17.05%20am.jpg" target="_blank">Click to enlarge</a>
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"With investor demand likely to fade further, this will also contribute to a further slowing of the rate of value growth in the Sydney and Melbourne housing markets where investor demand has been significantly greater than it has been elsewhere.
“A reduction in the pace of capital gains will add further disincentive to investors.
"We can assume most investors are focussed on the prospects for capital growth and relying on a negative gearing strategy to offset the cash flow losses.”
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jonathanchancellor-7SQnKwU6yx

Housing investment slowdown has arrived: Cameron Kusher

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When we think about the housing market we tend to focus on when values rise but in the recent past values have fallen in each capital city; this week we look at the magnitude and duration of these falls in the past.
Throughout the past 20 years it has been much more common for combined capital city dwelling values to have been increasing than falling. 
Although value rises have been more common, it doesn’t mean that the housing market is bulletproof and in some instances values have fallen quite dramatically and rapidly. 
Typically the Reserve Bank (RBA) or the Government have adjusted fiscal and/or monetary policy to support the housing market and arrest the value falls.
Across the combined capital cities, dwelling values have increased by 346.4% over the 20 years to April 2017. 
In the two periods in which values have fallen, capital city dwelling values fell by -6.1% between March and December 2008 and they fell by -7.4% between October 2010 and May 2012.
<a href="https://www.propertyobserver.com.au/images/2017/06/14/Screen%20Shot%202017-06-14%20at%209.53.45%20am.jpg" target="_blank">Click to enlarge</a>
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At an individual capital city level housing markets have cycled quite differently however, the majority of capital cities recorded a decline in dwelling values in both 2008 and from late 2010/early 2011. 
The 2008 decline occurred as the financial crisis hit with values falling however, stimulus measures in the form of aggressive interest rate cuts along with cash handouts and boosts to first home buyer’s grants proved enough to spur demand and turnaround the decline in values.
<a href="https://www.propertyobserver.com.au/images/2017/06/14/Screen%20Shot%202017-06-14%20at%209.53.56%20am.jpg" target="_blank">Click to enlarge</a>
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In 2010 dwelling values fell as the post financial crisis stimulus was being wound out of the market with interest rates increasing and first home buyer incentives being removed. 
These value falls were arrested as the RBA reversed direction and started to cut official interest rates again in late 2011.
Looking at the declines which commenced in 2008, the magnitude of falls was fairly minor considering most advanced economies fell into recession as a result of the financial crisis. 
Hobart and Darwin were relatively unaffected by the declines however, Melbourne (-8.3%), Perth (-6.8%) and Sydney (-6.2%) were more impacted than all other capital cities. 
The period of decline proved quite short and it has become clear that the stimulus measures effectively staved off sharper declines and possibly a national recession.
<a href="https://www.propertyobserver.com.au/images/2017/06/14/Screen%20Shot%202017-06-14%20at%209.54.07%20am.jpg" target="_blank">Click to enlarge</a>
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From 2010 to 2011/12 all capital cities experienced falls in dwelling values as the financial crisis stimulus and low interest rates were wound out of the market. 
Sydney (-5.0%), Adelaide (-6.9%) and Canberra (-4.4%) were the only capital cities in which values didn’t fall by more than 10% over this period. 
The largest falls were recorded in Darwin (-19.7%), Hobart (-14.3%) and Brisbane (-11.7%). 
Over the period of falls, Darwin (-1.2%) averaged the largest average monthly fall along with Hobart (-0.8%), Melbourne (-0.6%) and Perth (-0.6%). 
Across the other capital cities, Sydney, Adelaide and Canberra recorded average declines of -0.3%/month and Brisbane’s declines averaged -0.5%/month.
<a href="https://www.propertyobserver.com.au/images/2017/06/14/Screen%20Shot%202017-06-14%20at%209.54.19%20am.jpg" target="_blank">Click to enlarge</a>
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/06/14/Screen%20Shot%202017-06-14%20at%209.54.19%20am.jpg" alt="">
This analysis serves as a reminder that although capital city dwelling values have largely increased over the past 20 years, they are not immune from potential declines. 
The impetus for these previous declines have been external economic shocks and the stimulus of low interest rates and grants to first home buyers being removed. 
We aren’t currently seeing any economic shocks of the size of the 2008 financial crisis but we are seeing unemployment rate at similar levels to 2008/09 and historically high levels of underemployment. 
The market is also slowly seeing historic low mortgage rates moving higher against a backdrop of record low wages growth and record high household debt. 
Depending on how much mortgage rates are increased (noting that this is not happening due to the RBA) home owners should be aware that it could lead to a slowing or even some potential falls in dwelling values.
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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What happens when house prices start falling? Cameron Kusher

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Throughout the past 20 years, CoreLogic research confirmed that it’s been much more common for combined capital city dwelling values to increase rather than fall.
CoreLogic head of research Cameron Kusher said although value rises have been more common, it doesn’t mean that the housing market is bulletproof and in some instances values have fallen quite dramatically and rapidly.
“Typically the Reserve Bank (RBA) or the Government have adjusted fiscal and/or monetary policy to support the housing market and arrest the value falls,” he said.
Today’s CoreLogic research shows that across the combined capital cities, dwelling values increased by 346.4 percent over the 20 years to April 2017.
<a href="https://www.propertyobserver.com.au/images/2017/06/08/Screen%20Shot%202017-06-08%20at%2011.24.55%20am.jpg" target="_blank">Click to enlarge</a>
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/06/08/Screen%20Shot%202017-06-08%20at%2011.24.55%20am.jpg" alt="">
In the two periods in which values have fallen, capital city dwelling values fell by -6.1 percent between March and December 2008 and they fell by - 7.4 percent between October 2010 and May 2012.
At an individual capital city level housing markets have cycled quite differently however, the majority of capital cities recorded a decline in dwelling values in both 2008 and from late 2010/early 2011.
The 2008 decline occurred as the financial crisis hit with values falling however, stimulus measures in the form of aggressive interest rate cuts along with cash handouts and boosts to first home buyer’s grants proved enough to spur demand and turnaround the decline in values.
In 2010 dwelling values fell as the post financial stimulus was being wound out of the market with interest rates increasing and first home buyer incentives being removed.
These value falls were arrested as the RBA reversed direction and started to cut official interest rates again in late 2011.
<a href="https://www.propertyobserver.com.au/images/2017/06/08/Screen%20Shot%202017-06-08%20at%2011.25.06%20am.jpg" target="_blank">Click to enlarge</a>
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/06/08/Screen%20Shot%202017-06-08%20at%2011.25.06%20am.jpg" alt="">
Mr Kusher said looking at the declines which commenced in 2008, the magnitude of falls was fairly minor considering most advanced economies fell into recession as a result of the financial crisis.
“Hobart and Darwin were relatively unaffected by the declines however, Melbourne (-8.3 percent), Perth (-6.8 percent) and Sydney (-6.2 percent) were more impacted than all other capital cities," he said.
“The period of decline proved quite short and it has become clear that the stimulus measures effectively staved off sharper declines and possibly a national recession.”
From 2010 to 2011/12 all capital cities experienced falls in dwelling values as the financial crisis stimulus and low interest rates were wound out of the market.
Sydney (-5.0 percent), Adelaide (-6.9 percent) and Canberra (-4.4 percent) were the only capital cities in which values didn’t fall by more than 10 percent over this period.
<a href="https://www.propertyobserver.com.au/images/2017/06/08/Screen%20Shot%202017-06-08%20at%2011.25.14%20am.jpg" target="_blank">Click to enlarge</a>
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/06/08/Screen%20Shot%202017-06-08%20at%2011.25.14%20am.jpg" alt="">
The largest falls were recorded in Darwin (-19.7 percent), Hobart (- 14.3 percent) and Brisbane (-11.7 percent).
Over the period of falls, Darwin (-1.2 percent) averaged the largest average monthly fall along with Hobart (-0.8 percent), Melbourne (-0.6 percent) and Perth (-0.6 percent).
Across the other capital cities, Sydney, Adelaide and Canberra recorded average declines of -0.3 percent/month and Brisbane’s declines averaged -0.5%/month.
Mr Kusher said this analysis serves as a reminder that although capital city dwelling values have largely increased over the past 20 years, they are not immune from potential declines.
“The impetus for previous declines has been around external economic shocks along with the stimulus of low interest rates and grants to first home buyers being removed," he said.
"Australia is not seeing any of the shocking economic conditions of the size of the 2008 financial crisis.
“We are seeing the unemployment rate at similar levels to 2008/09 and historically high levels of underemployment.”
<a href="https://www.propertyobserver.com.au/images/2017/06/08/Screen%20Shot%202017-06-08%20at%2011.25.22%20am.jpg" target="_blank">Click to enlarge</a>
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/06/08/Screen%20Shot%202017-06-08%20at%2011.25.22%20am.jpg" alt="">
CoreLogic also reported that the market is slowly seeing historic low mortgage rates move higher against a backdrop of record-low wages growth and record-high household debt.
Mr Kusher said depending on how much mortgage rates are increased (noting that this is not happening due to the RBA) home owners should be aware that it could lead to a slowing or even some potential falls in dwelling values.
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Falling property prices and the affect it has on the overall market: Cameron Kusher

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The latest internal migration data shows that an increasing number of inter-state and intra-state population movements are to either sea change/tree change regions or the outskirts of the capital cities.
Each year the Australian Bureau of Statistics (ABS) publishes data on internal migration across the regions of Australia.
Internal migration data counts the number of residents moving within the state as well as across state borders.
The tables provided within this report show the top and bottom 25 SA4 regions for net internal migration nationally over the 2015-16 financial year.
The first table shows that the Gold Coast saw the most net internal arrivals at 6,428 persons over the year. 
The data series dates back as far as 2006-07 and the net internal arrivals of 6,428 persons is the highest on record and 39.4% higher over the past year. 
It was also the first time since 2006-07 that the Gold Coast had seen the nation’s highest rate of net internal migration.
<a href="https://www.propertyobserver.com.au/images/2017/06/05/Chart-1.jpg" target="_blank">Click to enlarge</a>
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/06/05/Chart-1.jpg" alt="">
Of the top 25 regions for net internal migration over the past year, 13 were located outside of the capital cities; generally in areas either adjacent or close to capital cities. 
These regions were a mix of sea change and tree change type locations.  Interestingly, each of these regional markets has recorded an increase in net internal migration over the year.
The data supports the strong price rises being recorded across many of Australia’s coastal and hinterland regions, especially those within easy commuting distance of the major capital cities.
None of the 12 capital city regions on the top 25 list were inner city areas in which high rise unit development is at unprecedented levels and density is increasing. 
The capital city areas listed are slanted more towards an increase in greenfield development rather higher density new housing.
The second table shows the 25 regions nationally that have recorded the greatest losses from net internal migration over the 2015-16 financial year. 
Sydney’s Inner South West recorded the largest migration away from the area over the year, losing a net 8,747 residents. 
It was actually the 10th consecutive year that Inner South West has recorded the largest greatest loss from net internal migration.
<a href="https://www.propertyobserver.com.au/images/2017/06/05/Chart-2.jpg" target="_blank">Click to enlarge</a>
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/06/05/Chart-2.jpg" alt="">
17 of the 25 regions listed in the second table were located in a capital city market.  The regions listed are generally established areas closer to the city centre. 
These areas are either seeing greater high density new housing development or very little new housing construction. 
The non-capital city markets are characterised as regional and linked to either agriculture or the mining and resources sector.
Looking at the broader capital city and regional markets, net internal migration over the year was strongest into: Regional NSW (11,827), Brisbane (10,149), Regional Vic (8,429) and Melbourne (8,270). 
The net losses from internal migration were greatest for: Sydney (-23,176), Adelaide (-6,088), Regional WA (-4,433) and Perth (-3,270).
Net internal migration to Regional NSW, Melbourne, Regional Vi and Brisbane was the greatest it has been in at least 10 years. 
Meanwhile, net internal migration to Sydney was the lowest since 2011-12 and it was the lowest in at least 10 years to Regional Qld, Adelaide, Perth and Regional WA.
Overall the data indicates that migration is gathering pace in select regions of the country, a number of which are sea change/tree change areas. 
On the other hand, Sydney is increasingly shedding residents to other parts of the country and this is most likely linked to the high cost of housing. 
Coastal, regional areas of NSW and Vic along with Melbourne and Brisbane appear to be significant benefactors of the deteriorating housing affordability in Sydney as an increasing number of people leave the city for more affordable locations.
Cameron Kusher is head of research for CoreLogic. You can contact him <a href="https://blog.corelogic.com.au/about/" target="_blank">here</a>.
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It looks as if sea change and tree change is gathering pace: Cameron Kusher

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Data released by the Australian Prudential Regulation Authority (APRA) earlier this week has shown that high loan to value ratio (LVR) lending continues to fall indicating new buyers are in many instances using larger deposits. 
The latest authorised deposit-taking institution (ADI) property exposures data for the March 2017 quarter revealed the ongoing trend as a moderate pull-back in the share of new interest-only mortgage lending however, there will be a lot more work to do for lenders in this space.
<a href="https://www.propertyobserver.com.au/images/2017/05/31/Chart-1.jpg" target="_blank">Click to enlarge</a>
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/05/31/Chart-1.jpg" alt="">
The data showed that over the March 2017 quarter there was $89.257 billion in mortgage lending from the ADIs which was the lowest quarterly value of lending since the same quarter last year. 
Of course, part of this is seasonal due to the Christmas / New Year slowdown and lending over the quarter was 9.5 percent higher than the corresponding quarter last year. 
Over the quarter 65 percent of lending was to owner occupiers ($58.009 billion) with the remaining 35 percent ($31.248 billion) to investors. 
The value of lending to owner occupiers was 3.9 percent higher year-on-year while investor lending was 21.7 percent higher.
<a href="https://www.propertyobserver.com.au/images/2017/05/31/Chart-2.jpg" target="_blank">Click to enlarge</a>
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/05/31/Chart-2.jpg" alt="">
There is currently a big focus on interest-only lending with APRA recently announcing policy changes which limit the value of new interest-only lending to less than 30 percent of the flow of total new mortgage lending.
Over the latest quarter, 36.2 percent of the value of total mortgage lending was for interest-only purposes signifying that further rationing of this type of lending is required. 
Although as a proportion of total lending interest-only lending has slowed, the value of this type of lending has increased by 13.8 percent from the same quarter last year. 
Importantly, interest-only lending peaked at 45.6 percent of the value of total new lending over the June 2015 quarter, so as a proportion of total lending it has already fallen substantially but has quite a way further to slow over the coming quarters as lenders work to meet the new 30 percent APRA benchmark by rationing the availability of this type of mortgage.
<a href="https://www.propertyobserver.com.au/images/2017/05/31/Chart-3.jpg" target="_blank">Click to enlarge</a>
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/05/31/Chart-3.jpg" alt="">
Low documentation ($377 million), non-standard ($142 million) and outside of serviceability loans ($1.461 billion) accounted for a cumulative 2.2 percent of new lending over the quarter. 
Although this was an historic low proportion, it should be noted that in value terms, low documentation (+42.5 percent) and non-standard (+21.6 percent) loans have increased over the year while outside of serviceability mortgages are -59.4 percent lower.
<a href="https://www.propertyobserver.com.au/images/2017/05/31/Chart-4.jpg" target="_blank">Click to enlarge</a>
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/05/31/Chart-4.jpg" alt="">
Over the quarter, $6.896 billion in new mortgages written had an LVR of greater than 90 percent. 
This represents the lowest value of new mortgage lending for LVRs above 90 percent since March 2011. 
It also indicates that 90 percent + LVR mortgages accounted for just 7.7 percent of all new mortgages over the quarter which was an historic low proportion. 
If you look at new mortgages with an LVR greater than 80 percent, they accounted for 22.0 percent of lending which is also an historic low. 
This indicates that borrowers are using either larger deposits upon entry to the market or using greater equity in their existing properties.
<a href="https://www.propertyobserver.com.au/images/2017/05/31/Chart-5.jpg" target="_blank">Click to enlarge</a>
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/05/31/Chart-5.jpg" alt="">
According to the data, the average outstanding mortgage balance was recorded at $259,400 at the end of March 2017 which was 0.8 percent higher over the quarter and 3.9 percent higher over the year. 
By loan type, the average outstanding balances were recorded at: $314,100 for loans with an offset facility, $346,100 for interest-only mortgages, $100,100 for reverse mortgages, $193,100 for low-documentation loans and $185,600 for other non-standard loans. 
Other non-standard loans were the only mortgage type to see a fall in outstanding balance over the year, -4.0 percent lower while the average outstanding balance for interest-only mortgages recorded the greatest rise, 4.2% higher.
The reduction in new lending to higher LVR borrowers is encouraging from a risk perspective with borrowers typically utilising larger deposits. 
While the proportion of lending for interest-only purposes has slowed, it has much further to fall over the coming quarters as lenders seek to reign interest-only lending in to less than 30% of the new flow of lending. 
With interest-only lending favoured by investors it may lead to a slowing in demand from this segment. 
Keep in mind that borrowers utilising interest-only mortgages are assessed on their ability to repay a principal and interest loan. 
Given this there is the possibility that the impact on investor demand may be minimal as they choose to just use a principal and interest loan rather than interest-only.
Investors face a broadening range of disincentives in the market, with mortgage rates for investment purposes up more than 25 basis points compared with their low point last year, record low rental yields and overall tighter credit policies from lenders. 
Additionally, there seems to be growing acceptance that the housing market is losing some momentum which is likely to further weigh on investor purchase decisions.
Cameron Kusher is research analyst for CoreLogic. You can contact him <a href="https://blog.corelogic.com.au/about/" target="_blank">here</a>.
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High LVR lending is easing up with a further slowdown expected: Cameron Kusher

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The never-ending conversations around housing affordability, particularly around how millennials will get a head-start on the property ladder, has seen a whole raft of suggestions thrown at a possible solution.
I have chosen a 25th percentile price for this analysis which reflects prices at the more affordable end of the housing market and is often more representative of the prices at which first home buyers are looking at to enter the market.
Keep in mind certain states have stamp duty exemptions which exist below specific price thresholds.
<a href="https://www.propertyobserver.com.au/images/2017/05/25/Screen%20Shot%202017-05-25%20at%2011.57.46%20am.jpg" target="_blank">Click to enlarge</a>
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/05/25/Screen%20Shot%202017-05-25%20at%2011.57.46%20am.jpg" alt="">
For this analysis, we have assumed that the first home buyer is purchasing at the 25th percentile price for owner occupation.
City x city stamp duty requirements:
<ul>
<li>Sydney - $25,733 for houses and $273 for units</li>
<li>Melbourne - $11,553 for houses and $8,507 for units</li>
<li>Brisbane - $1,043 for houses and $845 for units</li>
<li>Adelaide - $16,046 for houses and $12,622 for units</li>
<li>Perth - $422 for houses and $402 for units</li>
<li>Hobart - $9,302 for houses and $7,266 for units</li>
<li>Darwin - $7,557 for houses and $6,337 for units</li>
<li>Canberra - $15,107 for houses and $8,303 for units.</li>
</ul>
It’s a common misconception that in order to purchase a home you need a 20% deposit.
<a href="https://www.propertyobserver.com.au/images/2017/05/25/Screen%20Shot%202017-05-25%20at%2011.58.03%20am.jpg" target="_blank">Click to enlarge</a>
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/05/25/Screen%20Shot%202017-05-25%20at%2011.58.03%20am.jpg" alt="">
Whilst a 20% deposit is beneficial it is not a necessity however, if you have a deposit of less than 20% most lenders will require you to pay lenders mortgage insurance (LMI).
LMI can be paid up front or capitalised into the loan repayments.
Either way, if a buyer is required to pay LMI, it will result in higher mortgage repayments or a larger up front deposit.
This analysis has made no provision for LMI costs.
<a href="https://www.propertyobserver.com.au/images/2017/05/25/Screen%20Shot%202017-05-25%20at%2011.58.22%20am.jpg" target="_blank">Click to enlarge</a>
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/05/25/Screen%20Shot%202017-05-25%20at%2011.58.22%20am.jpg" alt="">
The cost of the deposit along with the stamp duty in each capital city for deposits of 5%, 10%, 15% and 20%, remembering that the stamp duty cost is fixed so the cost increases highlighted reflect the greater savings required for a larger deposit.
Saving for a deposit, even a 5% deposit, is a much tougher task in Sydney and Canberra than it is elsewhere in the country.
A 5% deposit on a house in Sydney requires $59,033, in Canberra it requires $41,357 while the deposits required for a house in all other capital cities except for Adelaide ($32,921) is less than half of the deposit required in Sydney.
Another challenge for potential first home buyers, particularly in Sydney and Melbourne is that household incomes are not growing at the same pace as dwelling values.
Over the 12 months to April 2017, Sydney dwelling values have increased by 16.0% and Melbourne values are 15.3% higher.
<a href="https://www.propertyobserver.com.au/images/2017/05/25/Screen%20Shot%202017-05-25%20at%2011.58.30%20am.jpg" target="_blank">Click to enlarge</a>
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/05/25/Screen%20Shot%202017-05-25%20at%2011.58.30%20am.jpg" alt="">
Modelled household income data from the Australian National University (ANU) indicates that over the 12 months to March 2017 Sydney household incomes have increased by a comparatively lower 4.6% and Melbourne household incomes are 2.7% higher.
Entry into the housing market remains a real challenge, particularly in our largest and most expensive capital cities.
Even in cheaper areas, household income growth is fairly slow which makes saving a deposit difficult.
It is unclear as to how, absent a big fall in property prices, housing affordability for first home buyers can be greatly improved.
Governments have tried incentives such as grants in the past and they generally just lead to greater demand and higher property prices.
The future onset for the housing affordability challenge over the coming years could potentially create greater social pressures where our youth may look to move away from the commercial hubs of Sydney and Melbourne because housing costs are too high.
<a href="https://www.propertyobserver.com.au/images/2017/05/25/Screen%20Shot%202017-05-25%20at%2011.58.41%20am.jpg" target="_blank">Click to enlarge</a>
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/05/25/Screen%20Shot%202017-05-25%20at%2011.58.41%20am.jpg" alt="">
Added to this, businesses may find it increasingly difficult to attract young talent unless they offer opportunities in areas where housing is more affordable, both from a purchase and rental perspective.
Cameron Kusher is research analyst for CoreLogic. You can contact him <a href="https://blog.corelogic.com.au/about/" target="_blank">here</a>.
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How much first home buyers really need: Cameron Kusher

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According to the latest housing finance data release for March 2017 there was $33.2 billion in finance commitments over the month. 
The monthly value of commitments increased by 0.9 percent to be 5.3 percent higher year-on-year. 
While the value of commitments to investors has slowed over recent months, owner occupier demand lifted slightly in March 2017.
<a href="https://www.propertyobserver.com.au/images/2017/05/24/chart-1-2.jpg" target="_blank">Click to enlarge</a>
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/05/24/chart-1-2.jpg" alt="">
The data shows that in March 2017, the $33.2 billion in housing finance commitments comprised of $20.2 billion to owner occupiers and $13.0 billion to investors. 
The value of owner occupier commitments increased by 0.9 percent over the month to be at its highest level since June 2016. 
Investor demand also rose over the month, up 0.8 percent however, it remains well below levels from a few months ago. 
Looking at recent monthly data it suggests that demand from owner occupiers has been reasonably steady while the level of demand from investors has eased. 
Keep in mind that this data pre-dates the most recent policy announcement from APRA; over the coming months there are likely to be a number of headwinds for investors in the form of: higher mortgage rates, reduced availability of interest-only lending and changes to depreciation benefits for plant and equipment on investment property for new purchases. 
Given this we would expect that investor demand is likely to fall further over the coming months.
<a href="https://www.propertyobserver.com.au/images/2017/05/24/chart-2-2.jpg" target="_blank">Click to enlarge</a>
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/05/24/chart-2-2.jpg" alt="">
Owner occupier demand continues to be fueled by purchases of established housing stock while refinance activity continues to fade. 
The $20.2 billion in housing finance commitments to owner occupiers consisted of $1.8 billion for construction of dwellings, $1.1 billion for purchase of new dwellings, $6.1 billion for refinancing of established dwellings and $11.1 billion for purchase of other established dwellings. 
The value of lending for construction and purchase of new dwellings has remained at fairly consistent levels over the past year and a half. 
The value of refinancing has been trending lower since it peaked in December 2015 and it is now at its lowest level since July 2015. 
At the same time, demand for purchases of established dwellings is trending higher and is at its highest level since September 2015.
<a href="https://www.propertyobserver.com.au/images/2017/05/24/chart-3-2.jpg" target="_blank">Click to enlarge</a>
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/05/24/chart-3-2.jpg" alt="">
Mortgage demand from investors overwhelmingly comes from investors buying established housing rather than new housing. 
The $13.0 billion worth of commitments in March 2017 consisted of $1.1 billion from construction of dwellings and $11.9 billion from established housing. 
The $1.1 billion in commitments for construction was 6.1 percent higher over the month while the $11.9 billion for established housing is 0.3 percent higher over the month. 
The value of lending for investors for established housing is now down -4.6 percent from its most recent peak two months ago and -12.5 percent lower than its historic peak in April 2015.
<a href="https://www.propertyobserver.com.au/images/2017/05/24/chart-4-2.jpg" target="_blank">Click to enlarge</a>
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/05/24/chart-4-2.jpg" alt="">
Comparing established housing to new housing continues to show that the bulk of housing demand is coming from established housing stock. 
Over the month, 85 percent of mortgage demand (excluding refinances) was for established housing stock ($23.0 billion) with the remaining 15 percent ($4.0 billion) for new housing stock.
The data is pointing to ongoing weaker demand from the investor segment of the market and refinances from owner occupiers slowing while demand from owner occupiers for established housing stock is trending higher. 
With the lending environment continuing to change, particularly for investors, we would expect that demand from investors will continue to wane. 
Higher interest rates, the rationing of the availability of interest-only lending and reduced negative gearing benefits is likely to weigh on investor demand over the coming months.
Cameron Kusher is research analyst for CoreLogic. You can contact him <a href="https://blog.corelogic.com.au/about/">here</a>.
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Investor mortgage demand continues to wane: Cameron Kusher

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The flow-on effect of a commodity price slump a few years back saw property prices crash in most of Australia’s mining towns, according to CoreLogic’s latest Property Pulse.
Cameron Kusher, CoreLogic head of research, said prices and rents slumped by as much as 60 percent in certain markets, adding there’s some good news on the horizon, with many of mining towns seeing sales volumes lift where there are signs that the rate of decline in house prices are starting to slow.
“History shows that mining booms don’t last forever and it would be difficult to find anyone that could suggest the house prices in many of these towns were sustainable during the boom," he said.
"At the time, prices were being driven higher by a temporary influx of residents on high incomes and therefore, creating greater housing demand at a time in which supply which was largely irresponsive which drove prices to record high levels.
"As the demand subsided supply was beginning to increase which led to substantial falls in both prices and sales.”
Gladstone – 578 sales over the past year at a median price of $323,875. Sales volumes are 68 percent lower than their July 2007 peak and median prices are 32 percent lower than their September 2012 peak.
<a href="https://www.propertyobserver.com.au/images/2017/05/18/Screen%20Shot%202017-05-18%20at%2010.57.00%20am.jpg" target="_blank">Click to enlarge</a>
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/05/18/Screen%20Shot%202017-05-18%20at%2010.57.00%20am.jpg" alt="">
Mackay – 1,216 sales over the past year at a median price of $335,000. Sales volumes are 63 eprcent lower than their April 2004 peak and median prices are 23 percent lower than their June 2013 peak.
<a href="https://www.propertyobserver.com.au/images/2017/05/18/Screen%20Shot%202017-05-18%20at%2010.57.10%20am.jpg" target="_blank">Click to enlarge</a>
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/05/18/Screen%20Shot%202017-05-18%20at%2010.57.10%20am.jpg" alt="">
Isaac - 198 sales over the past year at a median price of $140,000. Sales volumes are 70 percent lower than their March 2012 peak and median prices are 77 percent lower than their November 2012 peak.
<a href="https://www.propertyobserver.com.au/images/2017/05/18/Screen%20Shot%202017-05-18%20at%2010.57.19%20am.jpg" target="_blank">Click to enlarge</a>
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/05/18/Screen%20Shot%202017-05-18%20at%2010.57.19%20am.jpg" alt="">
Port Hedland - 204 sales over the past year at a median price of $300,000. Sales volumes are 49 percent lower than their July 2006 peak and median prices are 67 percent lower than their June 2013 peak.
<a href="https://www.propertyobserver.com.au/images/2017/05/18/Screen%20Shot%202017-05-18%20at%2010.57.34%20am.jpg" target="_blank">Click to enlarge</a>
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/05/18/Screen%20Shot%202017-05-18%20at%2010.57.34%20am.jpg" alt="">
Karratha - 289 sales over the past year at a median price of $285,000. Sales volumes are 44 percent lower than their March 2005 peak and median prices are 65 percent lower than their October 2010 peak.
<a href="https://www.propertyobserver.com.au/images/2017/05/18/Screen%20Shot%202017-05-18%20at%2010.57.46%20am.jpg" target="_blank">Click to enlarge</a>
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/05/18/Screen%20Shot%202017-05-18%20at%2010.57.46%20am.jpg" alt="">
Roxby Downs - 31 sales over the past year at a median price of $225,000. Sales volumes are 83 percent lower than their December 2003 peak and median prices are 55 percent lower than their October 2013 peak.
<a href="https://www.propertyobserver.com.au/images/2017/05/18/Screen%20Shot%202017-05-18%20at%2010.57.57%20am.jpg" target="_blank">Click to enlarge</a>
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/05/18/Screen%20Shot%202017-05-18%20at%2010.57.57%20am.jpg" alt="">
Cameron Kusher said while each of these markets has recorded a significant fall in sales and selling prices over recent years, more recently each market has started to see sales rise.
“While this result is unlikely to represent demand substantial enough to drive prices higher, it may be enough to slow or stop the declines in prices in the short to longer term.
"It’s also important to remember that it’s not as if there is no demand for housing in these towns, it’s just substantially lower than it was during the mining boom.
"Anyone looking to purchase now is securing a property at a substantial discount from previous highs however, these towns also continue to achieve some of the best rental returns based on current pricing and rents.”
"While I expect very little prospects for capital growth over the coming years, investors looking for a passive income may be becoming more attracted to these markets which could explain the recent uptick in sales."
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Gladstone still down 32 percent, but buyer demand moves off the floor in mining regions: Cameron Kusher

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Based on the relationship between demonstrated housing demand and advertised stock levels we are seeing relatively more stock available for sale compared to demand for that stock across the capital cities at the moment.
The months of supply figure compares the number of unique properties advertised for sale to the number of transactions in the market. The analysis provides unique insight into how long it should take to clear the volume of stock currently available for sale. It is important to note that off-the-plan housing stock is typically not advertised for sale as individual properties and as a result is not included within this analysis.
Across the combined capital cities, there is currently 4.4 months’ worth of residential properties being advertised for sale. As the first chart shows, the months of supply is currently higher at this point of the year than it has been each year since 2012. The increasing months of supply is largely due to the slowing rate of transaction activity rather than a spike in properties available for sale, indicating demand has diminished relative to advertised supply levels which is pushing the figure higher. <a href="https://www.corelogic.com.au/resources/property-pulse/article-graphs-img/2017-05-15--image1.jpg" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/05/19/rsz_kusherchart.png" width="700" height="425">
Sydney – there is currently 3.0 months of established housing supply available for sale across the city. The city has seen consistently low months of supply over recent years however, the figure is currently at its highest level for this time of year since 2012.
Melbourne – established housing stock currently sits at 4.2 months of supply for the city. Supply levels remain quite low but are at their highest levels for this time of year in five years.
Brisbane – the city currently has 5.1 months of established housing stock available for sale. The months of supply figure is higher than it has been at this time of year for each of the past five years.
Adelaide – there is currently 3.7 months of established housing stock available for sale. Although stock levels are higher than they were at this time over the past two years, stock levels were higher over the three years previous to that.
Perth – at the moment there is 8.3 months of established housing stock available for sale throughout the city. This is a high months of supply figure relative to other capital but it is well down on the 8.7 months at the same time last year.
Hobart – the months of supply figure for Hobart is the lowest it has been for many years. There is currently 4.1 months’ worth of established stock available for sale which is down from 5.0 months a year ago and the 7.2 months the year previous.
Darwin – across the city there is currently 6.7 months of established housing supply which is well down on the 10.5 months at the same time a year ago and 7.5 months over the previous year.
Canberra – there is currently 2.6 months of supply of established housing stock for sale in Canberra. The months of supply level is the same as what it was a year ago but lower than the previous years highlighted.
Based on these figures it seems that the supply of stock for sale relative to demand is increasing in Sydney, Melbourne and Brisbane. Meanwhile demand is outweighing supply in Hobart and Canberra leading to a decline in the months of supply. In Perth and Darwin supply continues to dramatically outweigh demand but the balance is slowly improving. In Adelaide there has been little change in months of supply over recent years suggesting the market is in relative equilibrium.
Cameron Kusher is a research analyst for CoreLogic. You can contact him <a href="https://blog.corelogic.com.au/about/" target="_blank">here</a>.
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Cameron Kusher

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