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

Joel Robinson

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

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

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

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

Kooyongkoot wins Gold and Silver at Better Future Melbourne Design Awards

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

The apartment price gap drawing Sydney buyers west

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

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

House Prices

<html><body>
Rising household debt levels, the hot Sydney property market and continued low interest rates has made Australian Prudential Regulation Authority Wayne Byres uneasy.
It seems he especially fears a market propped up by artificially low, interest-only borrowing rates.
Last month he decided the trend to over borrow, and then not to repay home loans in the conventional manner of interest and principal, was a likely recipe for a economic uncertainty.
To preserve financial stability, the prudential regulator decided in its latest macro-prudential measure that the interest-only loans fad need to be constrained.
The banks were told that less than 30 per cent of their new mortgages can be interest-only, well below the 38 per cent of total loans currently taken.
With borrowers realising paying interest-only freed up cash-flow, they've dived into interest-only loans which haven't been below 30 per cent since around 2008.
Interest-only loans typically have a period of five years, and then the loan will revert to the normal P&amp;I repayments, with the recent accompanying price growth seeing the investor nicely placed to cope with the higher repayments.
The tax deduction of interest payments in the meantime on these investor loans will have been a big incentive for the investor.
Investors have accordingly snapped up the bulk of interest-only loans, but owner occupied borrowers have been a worrying large 40 per cent share.
As Sydney house prices have surged since 2012, house loan sizes have grown, and for most households who've have experienced limited wage growth, the upsizing to the bigger home has only really worked with getting an interest only loan.
On a $300,000 mortgage over 25 years at a 5% p.a. interest rate, the usual monthly repayment would be $1,754 a month. But if you were making interest-only payments, the monthly cost would be $1,250 a month.
For a $750,000 home loan the monthly repayment of $4,174 drops to $3,325 if only the interest is repaid – which for many Sydney families is the difference between owning a bigger home or not.
The push hasn't just come from borrowers as mortgage broker's commissions are calculated on the size of the loans so they are incentivised to write interest only loans.
ASIC advised this week while interest-only loans may be a reasonable option for some borrowers, for the vast majority of owner-occupiers in particular, an interest-only loan will not make sense.　
The Reserve Bank of Australia has warned for two years that the rise in interest-only loans could amplify the housing price cycle, increase the risk of significant price falls, and may result in households overburdened in debt. 
If house prices do drop, the borrower will likely end up owing more than the house is worth, paying much more interest than they would have otherwise paid, and then coping with the many ensuing dramatic problems.
This article first appeared in the Daily Telegraph.
</body></html>

jchancellor-FAypfDUnLy

Three housing market factors making APRA's Wayne Byres uneasy

<html><body>
The council areas of NSW's Murrumbidgee, Queensland's Issac and Victoria's  Monash, Whitehorse and Boroondara are among the best nationwide for median house price growth over the past two decades, according to CoreLogic.
A new report from CoreLogic states over the 20 years to December 2016, median selling prices of houses nationally have increased at a compound annual rate of 7.2 percent, indicating that property prices have, on average, doubled over ten years. 
"While the national growth rate is strong, the rate of growth has varied dramatically between the states and territories and within different regions of each state and territory," CoreLogic said.
"The first table within this release highlights the 25 council areas across the country that have seen the greatest compound annual increase in median house prices over the past 20 years. 
"Note that data for the Northern Territory is not available for 20 years and as a result has been excluded from the analysis."
<table border="1" cellspacing="0" cellpadding="0"><tbody>
<tr>
<td valign="top" width="106">
Council Area
</td>
<td valign="top" width="47">
State
</td>
<td valign="top" width="84">
Median Price
</td>
<td valign="top" width="97">
20 yr growth pa
</td>
</tr>
<tr>
<td valign="top" width="106">
Murrumbidgee
</td>
<td valign="top" width="47">
NSW
</td>
<td valign="top" width="84">
$167,000
</td>
<td valign="top" width="97">
13%
</td>
</tr>
<tr>
<td valign="top" width="106">
Issac
</td>
<td valign="top" width="47">
QLD
</td>
<td valign="top" width="84">
$140,000
</td>
<td valign="top" width="97">
11%
</td>
</tr>
<tr>
<td valign="top" width="106">
Monash
</td>
<td valign="top" width="47">
VIC
</td>
<td valign="top" width="84">
$1,100,000
</td>
<td valign="top" width="97">
10%
</td>
</tr>
<tr>
<td valign="top" width="106">
Whitehorse
</td>
<td valign="top" width="47">
VIC
</td>
<td valign="top" width="84">
$1,081,000
</td>
<td valign="top" width="97">
10%
</td>
</tr>
<tr>
<td valign="top" width="106">
Boroondara
</td>
<td valign="top" width="47">
VIC
</td>
<td valign="top" width="84">
$1,910,000
</td>
<td valign="top" width="97">
10%
</td>
</tr>
<tr>
<td valign="top" width="106">
Glen Eira
</td>
<td valign="top" width="47">
VIC
</td>
<td valign="top" width="84">
$1,328,500
</td>
<td valign="top" width="97">
10%
</td>
</tr>
<tr>
<td valign="top" width="106">
Maribyrnong
</td>
<td valign="top" width="47">
VIC
</td>
<td valign="top" width="84">
$781,500
</td>
<td valign="top" width="97">
10%
</td>
</tr>
<tr>
<td valign="top" width="106">
Yarra
</td>
<td valign="top" width="47">
VIC
</td>
<td valign="top" width="84">
$1,210,000
</td>
<td valign="top" width="97">
10%
</td>
</tr>
<tr>
<td valign="top" width="106">
Darebin
</td>
<td valign="top" width="47">
VIC
</td>
<td valign="top" width="84">
$840,000
</td>
<td valign="top" width="97">
10%
</td>
</tr>
<tr>
<td valign="top" width="106">
Banana
</td>
<td valign="top" width="47">
QLD
</td>
<td valign="top" width="84">
$190,000
</td>
<td valign="top" width="97">
10%
</td>
</tr>
<tr>
<td valign="top" width="106">
Bayside
</td>
<td valign="top" width="47">
VIC
</td>
<td valign="top" width="84">
$1,658,750
</td>
<td valign="top" width="97">
9%
</td>
</tr>
<tr>
<td valign="top" width="106">
Boorowa
</td>
<td valign="top" width="47">
NSW
</td>
<td valign="top" width="84">
$235,000
</td>
<td valign="top" width="97">
9%
</td>
</tr>
<tr>
<td valign="top" width="106">
Manningham
</td>
<td valign="top" width="47">
VIC
</td>
<td valign="top" width="84">
$1,170,000
</td>
<td valign="top" width="97">
9%
</td>
</tr>
<tr>
<td valign="top" width="106">
Stonnington
</td>
<td valign="top" width="47">
VIC
</td>
<td valign="top" width="84">
$1,810,000
</td>
<td valign="top" width="97">
9%
</td>
</tr>
<tr>
<td valign="top" width="106">
Kingston
</td>
<td valign="top" width="47">
VIC
</td>
<td valign="top" width="84">
$851,000
</td>
<td valign="top" width="97">
9%
</td>
</tr>
<tr>
<td valign="top" width="106">
Nannup
</td>
<td valign="top" width="47">
WA
</td>
<td valign="top" width="84">
$372,000
</td>
<td valign="top" width="97">
9%
</td>
</tr>
<tr>
<td valign="top" width="106">
Port Phillip
</td>
<td valign="top" width="47">
VIC
</td>
<td valign="top" width="84">
$1,550,000
</td>
<td valign="top" width="97">
9%
</td>
</tr>
<tr>
<td valign="top" width="106">
Liverpool
</td>
<td valign="top" width="47">
NSW
</td>
<td valign="top" width="84">
$750,000
</td>
<td valign="top" width="97">
9%
</td>
</tr>
<tr>
<td valign="top" width="106">
Byron
</td>
<td valign="top" width="47">
NSW
</td>
<td valign="top" width="84">
$800,000
</td>
<td valign="top" width="97">
9%
</td>
</tr>
<tr>
<td valign="top" width="106">
Greater Dandenong
</td>
<td valign="top" width="47">
VIC
</td>
<td valign="top" width="84">
$600,000
</td>
<td valign="top" width="97">
9%
</td>
</tr>
<tr>
<td valign="top" width="106">
Maroondah
</td>
<td valign="top" width="47">
VIC
</td>
<td valign="top" width="84">
$745,000
</td>
<td valign="top" width="97">
9%
</td>
</tr>
<tr>
<td valign="top" width="106">
Waverley
</td>
<td valign="top" width="47">
NSW
</td>
<td valign="top" width="84">
$2,625,000
</td>
<td valign="top" width="97">
9%
</td>
</tr>
<tr>
<td valign="top" width="106">
Hobsons Bay
</td>
<td valign="top" width="47">
VIC
</td>
<td valign="top" width="84">
$771,000
</td>
<td valign="top" width="97">
9%
</td>
</tr>
<tr>
<td valign="top" width="106">
Moreland
</td>
<td valign="top" width="47">
VIC
</td>
<td valign="top" width="84">
$740,000
</td>
<td valign="top" width="97">
9%
</td>
</tr>
<tr>
<td valign="top" width="106">
Moonee Valley
</td>
<td valign="top" width="47">
VIC
</td>
<td valign="top" width="84">
$955,500
</td>
<td valign="top" width="97">
9%
</td>
</tr>
</tbody></table>
The Murrumbidgee council area in the Riverina areas of New South Wales has seen the greatest increase in median house prices over the past 20 years at 13.0 percent pa. 
Isaac, located in the coal mining heartland of Queensland’s Bowen Basin, in second place is an interesting one because 3-4 years ago house prices were substantially higher due to the mining boom but they have fallen by -22.4 percent pa over the past five years as the mining boom has unwound. 
Elsewhere on the top 25 list; New South Wales and Victorian council areas feature heavily, especially those located within Sydney and Melbourne. 
These tables highlight how the increases in prices in Sydney and Melbourne have outstripped those of the rest of the country. 
In Sydney in particular, this has occurred despite the fact that prices generally fell between 2003 and 2009.
The second table highlights the 25 council areas nationally that have seen the lowest annual increases in median house prices over the past 25 years. 
Not one of these council areas is situated in a capital city highlighting that there is often a divide between the performance of capital city and regional housing markets. 
Most of these council areas are in regional areas linked to single industries such as mining or agriculture.
<table border="1" cellspacing="0" cellpadding="0"><tbody>
<tr>
<td valign="top" width="106">
Council Area
</td>
<td valign="top" width="47">
State
</td>
<td valign="top" width="84">
Median price
</td>
<td valign="top" width="97">
20 yr growth pa
</td>
</tr>
<tr>
<td valign="top" width="106">
Coolgardie
</td>
<td valign="top" width="47">
WA
</td>
<td valign="top" width="84">
$87,500
</td>
<td valign="top" width="97">
0.4%
</td>
</tr>
<tr>
<td valign="top" width="106">
Yilgarn
</td>
<td valign="top" width="47">
WA
</td>
<td valign="top" width="84">
$58,500
</td>
<td valign="top" width="97">
0.5%
</td>
</tr>
<tr>
<td valign="top" width="106">
Dundas
</td>
<td valign="top" width="47">
WA
</td>
<td valign="top" width="84">
$33,000
</td>
<td valign="top" width="97">
1%
</td>
</tr>
<tr>
<td valign="top" width="106">
Paroo
</td>
<td valign="top" width="47">
QLD
</td>
<td valign="top" width="84">
$50,000
</td>
<td valign="top" width="97">
1%
</td>
</tr>
<tr>
<td valign="top" width="106">
Unincorporated SA
</td>
<td valign="top" width="47">
SA
</td>
<td valign="top" width="84">
$46,000
</td>
<td valign="top" width="97">
2%
</td>
</tr>
<tr>
<td valign="top" width="106">
East Pilbara
</td>
<td valign="top" width="47">
WA
</td>
<td valign="top" width="84">
$150,500
</td>
<td valign="top" width="97">
2%
</td>
</tr>
<tr>
<td valign="top" width="106">
Hay
</td>
<td valign="top" width="47">
NSW
</td>
<td valign="top" width="84">
$120,000
</td>
<td valign="top" width="97">
2%
</td>
</tr>
<tr>
<td valign="top" width="106">
Kimba
</td>
<td valign="top" width="47">
SA
</td>
<td valign="top" width="84">
$70,000
</td>
<td valign="top" width="97">
3%
</td>
</tr>
<tr>
<td valign="top" width="106">
Morawa
</td>
<td valign="top" width="47">
WA
</td>
<td valign="top" width="84">
$60,000
</td>
<td valign="top" width="97">
3%
</td>
</tr>
<tr>
<td valign="top" width="106">
Burdekin
</td>
<td valign="top" width="47">
QLD
</td>
<td valign="top" width="84">
$175,000
</td>
<td valign="top" width="97">
3%
</td>
</tr>
<tr>
<td valign="top" width="106">
Quilpie
</td>
<td valign="top" width="47">
QLD
</td>
<td valign="top" width="84">
$87,500
</td>
<td valign="top" width="97">
3%
</td>
</tr>
<tr>
<td valign="top" width="106">
Walgett
</td>
<td valign="top" width="47">
NSW
</td>
<td valign="top" width="84">
$80,000
</td>
<td valign="top" width="97">
3%
</td>
</tr>
<tr>
<td valign="top" width="106">
Buloke
</td>
<td valign="top" width="47">
VIC
</td>
<td valign="top" width="84">
$82,750
</td>
<td valign="top" width="97">
3%
</td>
</tr>
<tr>
<td valign="top" width="106">
Blackall Tambo
</td>
<td valign="top" width="47">
QLD
</td>
<td valign="top" width="84">
$75,000
</td>
<td valign="top" width="97">
3%
</td>
</tr>
<tr>
<td valign="top" width="106">
Central Highlands
</td>
<td valign="top" width="47">
QLD
</td>
<td valign="top" width="84">
$190,000
</td>
<td valign="top" width="97">
3%
</td>
</tr>
<tr>
<td valign="top" width="106">
Bruce Rock
</td>
<td valign="top" width="47">
WA
</td>
<td valign="top" width="84">
$70,250
</td>
<td valign="top" width="97">
3%
</td>
</tr>
<tr>
<td valign="top" width="106">
Roebourne
</td>
<td valign="top" width="47">
WA
</td>
<td valign="top" width="84">
$291,000
</td>
<td valign="top" width="97">
3%
</td>
</tr>
<tr>
<td valign="top" width="106">
Cassowary Coast
</td>
<td valign="top" width="47">
QLD
</td>
<td valign="top" width="84">
$250,000
</td>
<td valign="top" width="97">
3%
</td>
</tr>
<tr>
<td valign="top" width="106">
Yarriambiack
</td>
<td valign="top" width="47">
VIC
</td>
<td valign="top" width="84">
$90,000
</td>
<td valign="top" width="97">
3%
</td>
</tr>
<tr>
<td valign="top" width="106">
Southern Mallee
</td>
<td valign="top" width="47">
SA
</td>
<td valign="top" width="84">
$99,000
</td>
<td valign="top" width="97">
4%
</td>
</tr>
<tr>
<td valign="top" width="106">
Tatiara
</td>
<td valign="top" width="47">
SA
</td>
<td valign="top" width="84">
$142,000
</td>
<td valign="top" width="97">
4%
</td>
</tr>
<tr>
<td valign="top" width="106">
Gannawarra
</td>
<td valign="top" width="47">
VIC
</td>
<td valign="top" width="84">
$160,000
</td>
<td valign="top" width="97">
4%
</td>
</tr>
<tr>
<td valign="top" width="106">
Douglas
</td>
<td valign="top" width="47">
QLD
</td>
<td valign="top" width="84">
$405,000
</td>
<td valign="top" width="97">
4%
</td>
</tr>
<tr>
<td valign="top" width="106">
Berri and Barmera
</td>
<td valign="top" width="47">
SA
</td>
<td valign="top" width="84">
$181,000
</td>
<td valign="top" width="97">
4%
</td>
</tr>
<tr>
<td valign="top" width="106">
North Burnett
</td>
<td valign="top" width="47">
QLD
</td>
<td valign="top" width="84">
$146,000
</td>
<td valign="top" width="97">
4%
</td>
</tr>
</tbody></table>
The past, of course, is no indicator of future performance, but the data provides a good insight into the areas which are likely to see stronger price growth in the future.
Regions that have diverse economies and are not reliant on single or a handful of industries are likely to see higher levels of housing demand. 
Subsequently, these areas also tend to see greater increases in selling prices due to the heightened level of housing demand.
</body></html>

j.ballantyne1990-6AQqhLzZaK

Murrumbidgee, NSW, leads top 25 best performing areas for median house price increases over past 20 years

<html><body>
<img src="https://counter.theconversation.edu.au/content/75126/count.gif?distributor=republish-lightbox-advanced" alt="The Conversation" width="1" height="1">
GUEST OBSERVER
Whether house prices have been inflated by limited supply, or because of transfers to investors and homeowners, government policy is now trapped in a vicious cycle.
The wealth accumulated in our houses has become a central part of the retirement system, and the government itself can’t afford for prices to fall.
Generous tax subsidies and asset test concessions on the family home have incentivised the accumulation of wealth in property and fuelled demand pressures in the housing market for decades.
Government assistance to home buyers and owners is provided in the form of the First Home Owners Grants, stamp duty concessions, and the family home’s exemption from capital gains tax, land tax, as well as the pension and other assets tests. These subsidies and concessions combine to make wealth accumulation in the family home more attractive than other assets.
In many real estate markets, land supply constraints and planning controls can limit urban sprawl while housing demand pressures continue to intensify. Hence, cities such as Sydney have become “pressure cookers” where the subsidies result in rising house prices in the face of land supply constraints.
<h2>The policy-price cycle</h2>
The family home has become a cornerstone of the Australian retirement system. Sustained house price increases have allowed government income support to be set at historically low levels in Australia compared to other countries with lower home ownership rates such as Sweden and the Netherlands. This is based on the assumption that the low-income elderly will be housing asset-rich, and can therefore can get by on smaller pensions.
Indeed, in an era of ageing populations, governments have been encouraging older Australians to tap into their store of housing wealth to fund their own retirement and ease intergenerational fiscal tensions. For instance, the Productivity Commission’s aged care equity release scheme recommends elderly home owners draw down against their housing equity to meet aged care costs.
Of course, this only works if house prices continue to rise.
If house prices fall, the cycle gets broken and the family home may no longer be an adequate base for supporting the retirement needs of the wider population. In the event of a long-term decline in house prices, individuals would require greater income support from governments as their personal asset base weakens. This would in turn perpetuate a rise in government social security expenditure.
<h2>Over the long term</h2>
But even if house prices weren’t to decline, there is a paradox at play in this system. In order to maintain a healthy housing asset base for retirees, house prices must remain high. So the policy-price cycle is aimed at sustaining home ownership as a key pillar of the welfare system. However, it has also resulted in housing wealth becoming increasingly concentrated in the hands of smaller subgroups. Notably, housing equity is getting concentrated in the hands of older generations.
<a href="https://www.propertyobserver.com.au/images/2017/04/6/image-20170403-16550-3uf443.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/04/6/image-20170403-16550-3uf443.png" width="600" height="330">
Author’s own calculations from the Australian Bureau of Statistics Surveys of Income and Housing. Author provided
As these charts show, the intergenerational housing wealth gap has widened in the last two decades. In 2011, the median housing equity of home owners aged 45-64 years was nearly double the value held by the 25-44 year olds. The share of the population’s housing equity held by those aged 45-64 years has widened between 1990 and 2011 at the expense of those aged 25-44 years.
This means the system could potentially unravel in the long term. If large numbers of young people continue to face price barriers to home ownership, the home ownership pillar within the welfare system will be weakened as the future population of home owners shrinks.
In the short-term a significant group of millennials will miss out on the benefits of home ownership. But in the long term, unless governments address some fundamental structural problems currently entrenched within our tax-transfer system, there is a significant weakness in our social welfare system built on housing.
 
Rachel Ong is deputy director of the Bankwest Curtin Economics Centre, Curtin University and author for The Conversation. She can be contacted <a href="https://theconversation.com/profiles/rachel-ong-113482" target="_blank">here</a>.
 
 
</body></html>

Governments are trapped in a vicious cycle of housing policies and prices: Rachel Ong

<html><body><div class="article__content">
<div class="parsys parsys-article-content-top">
<div class="cq-article-content-paras section">
House price growth in Sydney and Melbourne increased further in March according to CoreLogic, with Sydney house prices up 19 percent compared to the same month last year and Melbourne 16 percent.
Tim Lawless, CoreLogic head of research, said the early results come after a strong rebound in housing market conditions through the latter half of 2016 and into 2017.
"The strong capital gain results are further evidenced by a continuation in low stock levels, high auction clearance rates and strong investment demand," he said.
"March's figures reflected a strong rebound in housing market conditions that picked up in the latter half of last year and continued into this year."
</div>
</div>
</div></body></html>

Sydney home prices up 19 percent in year to March: CoreLogic

<html><body>
Record high house prices in Australia doesn’t seem to deter buyer sentiment, while sellers think 2017 is a good time to sell, says a new survey.
Two in three (62 percent) Aussie home owners believe this year is a good time to buy, while a further 73 percent believe it is a good time to sell, according to the findings of the survey commissioned by free real estate agent search service, LocalAgentFinder.
The survey was conducted from a nationally representative, independent panel of 1001 Australian adults.
LocalAgentFinder allows vendors to compare property sales agents in their local area, in conjunction with Pureprofile, a data and insights company.
LocalAgentFinder CEO Matt McCann said it was interesting to see two-thirds of Australians believe property is a good buy this year, given the double-digit percentage increases, talk of interest rates rises, and possible changes to property investment legislation.
“Many of us are talking about Sydney and Melbourne’s strong property market, but that is not really being seen outside of the Eastern Seaboard. In fact, the value of property in Brisbane, Adelaide, Perth and Hobart were lower in 2016 than they were eight years ago,” he said.
Sydney and Melbourne recorded the highest dwelling value increases from 2015 to 2016, at 15.5 percent and 13.7 percent respectively. 
Other cities had lower increases, with Canberra dwellings increasing by 9.3 percent, Brisbane by 3.6 percent and Adelaide by 4.2 percent, while Perth decreased by -4.3 percent.
A majority of home owners surveyed in New South Wales, 81 percent, believe it is a good time to sell, and in Victoria and the Australia Capital Territory, where 82 percent of home owners believe the same.
Elsewhere, confidence was slightly lower: 73 percent of home owners in the Northern Territory, 70 percent in South Australia, 67 percent in Queensland and Tasmania, and 44 percent in Western Australia thought it was a good time to sell.
<a href="https://www.propertyobserver.com.au/images/2017/03/29/Mar30NewsPropertySurvey.png" target="_blank">Click to enlarge</a>
 <img src="https://www.urban.com.au/images/2017/03/29/Mar30NewsPropertySurvey.png" alt="">
Home owners in WA and NT most likely to buy property in 2017
Residents in Western Australia are most optimistic about buying, with 85 percent believing 2017 is a good year to purchase property. Northern Territory residents follow at 80 percent, then Tasmanians at 71 percent.
Contrastingly, ACT and NSW residents are on the fence – at 47 percent and 55 percent respectively.
Outside of these areas, 68 percent of South Australians believe this year is a good time to buy, 65 percent of Queenslanders, and 57 percent of Victorians believe this year is a good time to buy.
The findings are consistent with rising house prices across Australia. 
Confidence highest among Baby Boomers
Over 60s are the most likely to believe 2017 is a good time to buy (53 percent of all over-60s), while those in their 20s were the least likely to believe 2017 to be a good time to buy (35 percent of all 20-somethings) – unsurprising, given wage-to-property ratios are growing unevenly. The survey also revealed that 53 percent of 60+ believe 2017 is a good time to sell.
“Older Australians typically have more purchasing power than young people, as they are able to rely on the equity of existing assets to purchase. Younger people are struggling to keep up with rising house prices, and they are less likely to be inclined to purchase this year,” McCann said.
</body></html>

jonathanchancellor-7SQnKwU6yx

Rising home prices? Majority of Aussies still upbeat on buying/selling

<html><body>
This year has seen continued upwards pressure on Sydney house prices, but standby for a shift.
Yes there's still near-record low interest rates, reduced stock levels, strong population growth, as well as a renewed rush from investors to use negative gearing to set up for retirement.
But the slightly higher interest rates announced by lenders recently - or more likely the obvious prospect of continued out of cycle rate rises - ought act as a break on the exuberance on display on Saturday's across Sydney this year.
The double digit price growth cycle - which has just hit 18.9 percent according to CoreLogic - needs to come to an end.
It doesn't mean prices will head backwards or crash, rather the rate of growth ought slow. 
This week there was analysis that mortgage rates would need to rise to around six per cent before house prices nationally start sliding.
That's highly unlikely, but a slow down in price growth is around the corner - and what almost everyone wants.
Just when it all takes place is the big question as certainly the 80 per cent plus weekend clearance rates haven't faltered this autumn.
Perhaps higher stock levels heading into Easter will provide a trigger mid-next month. Then the actual holiday pause could lay the platform for wiser heads at auction.
Earlier this month it was suggested that just three rate hikes of 25 basis points by the RBA would deliver a bigger increase in debt-servicing costs for households than 10-11 rate hikes did in the mid-1990s
According to Macquarie Bank’s head of economic research, James McIntyre current households' debt levels are at a record 187 percent of income and a one percentage point increase in the RBA's cash rate would, excluding further increases in lenders' borrowing rates, push the household debt servicing ratio beyond 10 per cent.
While household debt serviceability is currently manageable given the record low rates, the risk is ripe for when when they increase given record high household debt.
McIntyre studied previous tightening cycles, some which involved 11 quarter-point hikes.
"We estimate that three to four 25 basis-point rate hikes would deliver a bigger increase in debt-servicing costs for households than 10 to 11 rate hikes did in the mid-1990s," he told clients. 
"The RBA's reticence about further increases in household debt-to-income ratios is clear when you begin to consider how potent interest-rate rises might be from a debt-servicing perspective,'' McIntyre said.
He noted a big difference between the periods is a wider spread between the cash rate and lenders' mortgage rates: from 180 basis points to about 375 basis points, expanding since the GFC supposedly due to rising bank funding costs.
McIntyre, however, doesn't expect a formal RBA rate increase until early 2019.
This article first appeared in the Daily Telegraph.
</body></html>

Sydney's rate of house price growth ought to slow

<html><body>
<img src="https://counter.theconversation.edu.au/content/75130/count.gif?distributor=republish-lightbox-advanced" alt="The Conversation" width="1" height="1">
GUEST OBSERVER
Climbing house prices seem to scare people but houses are relatively more affordable today than they were in 1990, it’s actually interest-rate risk that’s the bigger problem for first home buyers.
If you look at latest numbers on house prices, as a measure of affordability, they use a “median measure” – that is, the ratio of median house price to median salary. According to the latest Demographia survey, the price of the median Sydney house is 12.2 times the median salary, and it is 9.5 in Melbourne.
But it’s simply misleading to compare median-based measures of housing across different time periods in the same location. These simple median measures do not take into account differences in interest rates in different time periods. 
A house in 2017 that costs nine times the median salary, when mortgage interest rates are less than 4%, is arguably more affordable than a house in 1990 that costs six times the median salary. Interest rates in 1990 were 17 percent.
Consider this simple example. In 1990 a first home buyer purchases an average house in Sydney priced at A$194,000. With mortgage interest rates at 17 percent, the monthly mortgage repayments were A$2,765 for a 30-year mortgage.
But in 1990 the average full-time total earnings was only A$30,000 per annum, so the buyer’s mortgage repayments represented over 111 percent of before-tax earnings. In 2017 a first home buyer purchasing a Sydney house for A$1,000,000, with interest rates at 4 percent, is only required to pay A$4,774 every month, or 69% of their before-tax average full-time total earnings. 
So, relatively, houses are substantially more affordable today than they were in 1990. The lower interest rate means the costs of servicing a mortgage is lower today than it was 25 years ago, or even 50 years ago. 
However, those lower interest rates also mean today’s first home buyers face greater perils than their parents or grandparents.
<h2>Interest-rate risk</h2>
Interest rate risk is the potential impact that a small rise in mortgage interest rates can have on the standard of living of homeowners. This does not consider the likely direction of interest rates, rather how a 1 percent change in interest rates affects the repayments required on a variable rate mortgage.
When interest rates rise so do mortgage repayments. But the proportional increase in repayments is higher when interest rates are lower. For example, if mortgage interest rates were 1 percent, then increasing interest rates by another 1 percent will double the interest costs to the borrower. When interest rates are higher, a 1 percent increase in interest rates will have a lower proportional affect on their repayments.
If we go back to the example from before, the interest rate risk of the first home buyer from 1990 is much lower than that of the 2017 buyer. If mortgage interest rates rose by 1 percent in 1990, repayments would rise by only 5.7 percent to $2,923. For the 2017 buyer on the other hand, a 1 percent increase in interest rates would see their repayments rise by over 12 percent to $5,368 per month. 
This has the potential to financially destroy first home buyers and, due to the high reliance of the retail banking industry on residential real estate markets, potentially create a systemic financial crisis. 
Interest rate risk has an inverse relationship to interest rates – when interest rates fall, interest rate risk rises. As a result, interest rate risk has been steadily increasing as mortgage interest rates have fallen. Given that we have record low interest rates at the moment, interest rate risk has never been higher.
<h2>Putting it all together</h2>
Compounding all of this is the general trend of interest rates. 
In 1990 mortgage interest rates were at a record high and so our first home buyer could reasonably expect their repayments to decrease in the coming years. They could also reasonably expect that, as mortgage interest rates fell, demand for housing would increase (all else being equal) and so would house prices, generating a positive return on their investment.
But our 2017 first home buyer is buying when interest rates are at record lows. They cannot reasonably expect interest rates will fall or for their repayments to go down in future years. It’s also unlikely that house prices will increase as they have for previous generations. 
So while the current generation of first home buyers find housing much more affordable than their parents, they face substantially higher interest-rate risk and a worse outlook for returns on their investment. If we wish to address the concerns of first home buyers we should look into these issues rather than exploiting misrepresentative median-based measures of house affordability. 
Apart from addressing issues with the supply of housing, governments need to investigate ways to reduce interest rate risk over the longer term.
Jamie Alcock is associate Professor, University of Sydney and author for The Conversation. He can be contacted <a href="https://theconversation.com/profiles/jamie-alcock-349860" target="_blank">here</a>.
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Houses aren’t more unaffordable for first home buyers, but they are riskier

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Most research sources have Melbourne leading on annual house price growth – and it’s not so surprising, when you look at the sales data.
The ABS, the Real Estate Institute of Australia and Domain all have Melbourne leading the nation for house price increases (although Hobart is challenging strongly).
Where’s Sydney in all this? CoreLogic continues to publish massive growth numbers for the Sydney house market, but those other three sources listed in the previous paragraph all record annual growth around 3 or 4 percent for the Sydney housing market.
Quite apart from the ludicrous proposition that you can reduce a metropolitan area with over 700 suburbs down to a single growth figure, this reinforces my view that all real estate statistics are rubbery figures to some degree.
When you have media constantly quoting one source (the one that reports massive annual growth) and then all those other sources which are suggesting Sydney’s price boom is over (but largely ignored by media), it’s difficult to know what to believe.
Here’s what I do know for certain: sales volumes gradually faded in Melbourne throughout 2016 but, late in the year and early in 2017, staged a revival. The city’s various markets are proving very resilient, no doubt boosted by nation-leading population growth and a state economy which, while not as strong as Sydney’s, is performing well.
My research shows that the busiest markets are split between the best of the Middle Melbourne areas and the strongest of the affordable outer-ring areas.
And the most affordable areas of metropolitan Melbourne have taken over as the city’s price-growth leaders. Many have delivered double-digit growth in their median house prices in the past 12 months.
As one example, all suburbs in the Sunshine precinct in Melbourne’s west are above 12%, including some which have grown 23-25% in the past year. Again, this data is presented with a reminder that all real estate figures are rubbery – but when all suburbs in an area are delivering the same strong growth pattern, you can be reasonably confident that something notable is happening.
Two Middle Melbourne precincts stand out: the Moreland LGA and the Whitehorse LGA. Both have numerous suburbs where sales activity is still growing.
These and other Middle Ring precincts had been fading gradually, in terms of sales activity, throughout 2016 but have come roaring back to life. Sales levels are still lower than the peaks of 2015, but remain very solid and prices continue to grow.
Typical growth areas in the Moreland LGA include Glenroy, where sales have been 113, 149, 143 and 165 in consecutive quarters. Other standout suburbs are Coburg, Coburg North, Hadfield, Pascoe Vale, Oak Park and Pascoe Vale South.
Whitehorse was the Melbourne market leader in 2015 before sales levels plateau-ed in most of its suburbs throughout 2016. But there has been a recent revival to stronger sales activity, led by Blackburn, Burwood East, Mitcham, Nunawading and Surrey Hills.
Four bottom-end markets are close behind in the terms of the number of growth markets: the LGAs of Brimbank (west), Whittlesea (far north), Casey (far south-east) and Hume (far north).
The far north of metropolitan Melbourne features strongly. The Whittlesea LGA (seven) and the Hume LGA (five) jointly have 12 suburbs with growing sales activity.
Whittlesea is consistently one of the city’s strongest markets, driven by affordability, strong infrastructure and proximity to jobs nodes. The suburb of Lalor, with sales rising from 64 to 101 to 117 to 121 in recent quarters, is typical. Nearby Epping has lifted quarterly sales from 110 to 135 to 145. 
Neighbouring Hume has similar qualities. The suburb of Craigieburn has recorded sales totalling 175, 228, 239 and 244 in the past four quarters.
The leading precinct in the far south-east is the City of Casey, which has five Rising Steadily suburbs, led by Cranbourne, Doveton and Narre Warren.
Other affordable outer-ring precincts with growth markets include Melton is the far west, Wyndham in the far south-west and Frankston in the far south-east.
Middle-ring areas travelling well, in addition to Whitehorse and Moreland, include the LGAs of Monash (Ashwood, Glen Waverley and Mulgrave), Maroondah (Croydon North, Ringwood and Ringwood East) and Banyule (Heidelberg Heights, Ivanhoe and Greensborough).
The worst performers in an otherwise strong Melbourne market are the inner-city apartment precincts.
I classify both the Melbourne CBD and Docklands as Danger markets. Sales levels have dropped markedly at a time of increasing apartment supply and growing state and federal measures likely to discourage foreign investors, who are the target of many of the inner-city high-rise projects.
Terry Ryder is the founder of <a href="https://www.hotspotting.com.au/">hotspotting.com.au</a>. You can  <a href="mailto:%20%3Cscript%20type='text/javascript'%3E%20%3C!--%20var%20prefix%20=%20'ma'%20+%20'il'%20+%20'to';%20var%20path%20=%20'hr'%20+%20'ef'%20+%20'=';%20var%20addy38821%20=%20'ryder'%20+%20'@';%20addy38821%20=%20addy38821%20+%20'hotspotting'%20+%20'.'%20+%20'com'%20+%20'.'%20+%20'au';%20document.write('%3Ca%20'%20+%20path%20+%20'/''%20+%20prefix%20+%20':'%20+%20addy38821%20+%20'/'%3E');%20document.write(addy38821);%20document.write('%3C//a%3E');%20//--%3E/n%20%3C/script%3E%3Cscript%20type='text/javascript'%3E%20%3C!--%20document.write('%3Cspan%20style=/'display:%20none;/'%3E');%20//--%3E%20%3C/script%3EThis%20email%20address%20is%20being%20protected%20from%20spambots.%20You%20need%20JavaScript%20enabled%20to%20view%20it.%20%3Cscript%20type='text/javascript'%3E%20%3C!--%20document.write('%3C/');%20document.write('span%3E');%20//--%3E%20%3C/script%3E">email him</a> or follow him on <a href="https://twitter.com/hotspotting">Twitter.</a>
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Melbourne's two dangerous residential markets

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Three rate hikes of even 25 basis points by the central bank could deliver a bigger increase in debt-servicing costs for households than 10-11 rate hikes did in the mid-1990s, according to Macquarie Bank’s head of economic research, whose analysis adds to the debate on the impact of the economy in the event of a housing market crash.
Macquarie Bank’s James McIntyre found after studying previous tightening cycles in the mid 1990s and turn of the century, the first of which involved 11 quarter-point hikes, that the subsequent surge in households' debt servicing ratio -- interest costs as a portion of disposable income -- would be achieved with less than a third of those hikes today, thanks to record high private debt levels, Bloomberg reported.
McIntyre, however, doesn't expect a rate increase until early 2019 when core inflation is likely back inside its 2 percent to 3 percent target.
"The RBA's reticence about further increases in household debt-to-income ratios is clear when you begin to consider how potent interest-rate rises might be from a debt-servicing perspective,'' McIntyre was cited by Bloomberg as saying.
“At the current level of debt-to-income, we estimate that three to four 25 basis-point rate hikes would deliver a bigger increase in debt-servicing costs for households than 10 to 11 rate hikes did in the mid-1990s.''
He said the other difference between the periods is a wider spread between the cash rate and lenders' mortgage rates: from 180 basis points to about 375 basis points. Current households' debt levels are at a record 187 percent of income and a one percentage point increase in the RBA's cash rate would, excluding further increases in lenders' borrowing rates, push the household debt servicing ratio beyond 10 per cent,  the analysis found.
RBA Governor recently sounded an alarm, saying inflation will only rise slowly but the combination of record high household debt to income when wages were growing slowly was a “sobering combination”.
Even the OECD said recently that a potential hard landing in the property market could morph into a recession fuelled by record high household debt.
<a href="https://www.propertyobserver.com.au/images/2017/03/17/700_bloomberg.jpg" target="_blank">Click to enlarge</a>
<div><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/03/17/700_bloomberg.jpg" alt=""></div>
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SOURCE BLOOMBERG 
<div id="adspot-300x250-pos3"> </div>
<div>The Bloomberg article cites a hypothetical scenario where the Federal Reserve turns aggressive in lifting rates, the Australian dollar tumbles, and the RBA seeks to tame a subsequent boost in inflation with monetary policy: too much household debt would pose a risk of the central bank crushing the economy with the hit from rate rises.</div>
<div> </div>
<div>Frontier Advisors, a consultancy for institutional investors, similarly said this week that while household debt serviceability is currently manageable given the record low rates, the risk is when they increase.</div>
<div>
It analysis found that Australian house prices are 15 to 20 per cent overvalued, and that a rate rise of more than 1.5 per cent would imply a higher level of overvaluation -- at which point a correction would become more likely. The Melbourne-based consultant said it doesn't expect a house price collapse.
"Given the sensitivity of the housing market to monetary policy, this is likely to provide a cap on how high interest rates will rise,'' said Chris Trevillyan, director of capital markets and asset allocation research at Frontier.
"The RBA will avoid triggering the kind of house price collapse that will have a major impact on bank capital.''
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Future RBA rate hikes' impact likely far greater than previous cycles: Macquarie economist

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Sydney’s house prices could experience a correction starting in the second half of 2017 after years of growth, according to a leading economic forecaster. 
House prices will drop by 5 percent in two years starting later this year, said BIS Oxford Economics managing director Robert Mellor said at the Building Industry Prospects conference in Sydney, according to a post on domain.com.au.
The forecasting firm was formed recently after Oxford Economics acquired BIS Shrapnel and the name was changed to BIS Oxford Economics.
Sydney has enjoyed a four-year property boom, during which the median house price has climbed to more than $1 million.
“Given that price growth over the last 12 months has been much greater than we would have anticipated six or 12 months ago we now expect price declines probably between 2017 and 2019 somewhere in the order of 5 percent in the detached housing market in Sydney,” he said.
Apartment prices are likely to see an even bigger correction, according to the forecaster.
The median house price was likely to peak “at $1.2 million” by mid-2017 before falling, he said. These price declines are more substantial than those predicted mid-2016 by the firm.
But even if prices fall by $60,000 to $70,000, they would still be “above where they were six months ago”, he said.
“By June this year [house prices] will be up 80 percent since June 2012.”
The apartment market, however, is likely to drop by much higher levels.
Mellor anticipated that those who paid “high prices off-the-plan” might see price declines of 10 percent or higher.
These falls in prices would also be likely in the Brisbane and Melbourne apartment markets, where prices could “easily” drop 10 percent in the next two to three years.
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