<p>Developers and apartment buyers have a narrowing window of opportunity before Brisbane's Olympic infrastructure pipeline begins competing directly with residential construction, pushing up costs, tightening labour supply and making new projects increasingly difficult to deliver.</p>

<p>While Brisbane's apartment market continues to benefit from strong population growth and limited housing supply, industry research suggests the years leading up to 2027 could prove to be the most important period for developers looking to secure builders and buyers hoping to purchase before the next wave of price increases.</p>

<p>A new Colliers report, <em>Brisbane 2032 Olympic and Paralympic Games: Creating Solutions</em>, highlights the scale of the challenge. While thousands of new homes are planned across South East Queensland, the Brisbane Olympic Athletes Village alone will deliver more than 10,500 beds during the Games before being converted into around 1,750 to 2,000 apartments. Equivalent to almost two years of typical inner-city apartment supply, the project will also absorb a significant share of the construction workforce and building materials.</p>

<p>The broader construction pipeline paints an even clearer picture.</p>

<p>Construction Skills Queensland's <em>Horizon 2032</em> report forecasts Queensland's annual construction pipeline will average $69 billion over the coming years before peaking at $75 billion in 2027-28. Demand for construction workers is expected to increase by 17 per cent to almost 150,000 people, with the industry facing an annual shortfall of around 19,000 workers that could blow out to as many as 35,000 during the peak construction period.</p>

<p>The Olympic venues, athletes village and supporting infrastructure will account for billions of dollars worth of work across South East Queensland through to 2032, creating intense competition for labour at a time when Australia's residential construction sector is already under pressure.</p>

<p>[smartcode_project:default project_id=150489 project_image_fid=373834]</p>

<p>Colliers Queensland Residential Director Andrew Scriven said the convergence of these projects is creating a clear window of opportunity for both developers and buyers.</p>

<p>"From 2027 onwards, the market will shift dramatically," Scriven said.</p>

<p>"Labour will increasingly be locked into government-led infrastructure and Olympic projects, which means private residential developments will face higher costs and tighter margins. The developers who move now are the ones most likely to get projects off the ground."</p>

<p>Scriven said the same dynamic would also affect buyers, with fewer apartment projects expected to launch once construction capacity tightens.</p>

<p>"If you're looking to change your lifestyle over the next five years, now is your window of opportunity to buy."</p>

<p>[smartcode_project:default project_id=150713 project_image_fid=373827]</p>

<p>Developers are already positioning themselves ahead of that window.</p>

<p>Following the success of Monarch at Toowong, Consolidated Properties is preparing to launch two new Brisbane apartment projects in the second half of 2026. They include <a href="https://www.apartments.com.au/new-apartments/gloriette-30-bedivere-street-yeerongpilly-qld-4105">Gloriette</a> at Yeerongpilly Green, a 25-storey tower within one of Brisbane's key Olympic precincts, and <a href="https://www.apartments.com.au/new-apartments/castile-47-skyring-terrace-newstead-qld-4006">Castile</a>, a recently approved 25-storey riverfront development at 47 Skyring Terrace in Newstead.</p>

<p>Hutchinson Builders will deliver both projects, with early works already underway at Yeerongpilly and Newstead expected to commence later this year.</p>

<p>The timing comes as Brisbane's fundamentals continue to strengthen, with strong interstate migration, population growth and vacancy rates remaining below 1.5 per cent.</p>

<p>Colliers Queensland researcher Pragya Sharma said Greater Brisbane is forecast to require around 40,000 new apartments between 2021 and 2031.</p>

<p>"There's a real mismatch emerging between when housing is needed and when it will be feasible to build," Sharma said.</p>

<p>"As a result, the period leading up to 2027 presents a key window of opportunity for developers to secure approvals, funding and construction capacity, while buyers will have greater choice before supply constraints intensify."</p>


Colliers research outlines a critical pre-2027 window to start residential projects before labour squeeze: now is the time to buy

Joel Robinson

Developers, buyers on watch in South East Queensland ahead of construction crunch: Colliers

<p>It's taken less than nine months for developer Sherpa Property Group to sell out all 51 apartments in its <a href="https://www.apartments.com.au/new-apartments/flourish-oasis-palm-beach-7-9-sixth-avenue-palm-beach-qld-4221">Flourish Oasis</a> development in <a href="https://www.apartments.com.au/developments/palm-beach-qld-4221">Palm Beach</a>, over a year before its anticipated completion.</p>

<p>&nbsp;</p>

<p>Located at 7-9 Sixth Avenue, the $67 million development has resonated strongly with both local owner-occupiers and downsizers seeking high-quality apartments within walking distance of the beach, dining precincts and everyday amenities.</p>

<p>[smartcode_project:default project_id=151449 project_image_fid=357458]</p>

<p>Christie Leet, Founder of <a href="https://www.apartments.com.au/developers/sherpa-property-group">Sherpa Group</a>, said the sell-out reflected both the strength of the Palm Beach market and the success of Sherpa's community-first approach to development.</p>

<p>"The sell-out of Oasis is a fantastic outcome and reinforces the strong demand we're seeing for thoughtfully designed apartments in lifestyle locations," Leet said.</p>

<p>"From the outset, our vision was to create a development that genuinely enhanced the Palm Beach community while providing residents with exceptional homes and wellness-focused amenities.</p>

<p>"We've been incredibly encouraged by the level of local support throughout the campaign, 72.5 per cent of buyers are locals, with a significant proportion of purchasers choosing Oasis as their future home rather than an investment."</p>

<p>[smartcode_project:default project_id=151449 project_image_fid=357463]</p>

<p>Construction is now progressing following development approval, with trusted builder LPS Group delivering the project and completion anticipated in Q3 2027.</p>

<p>Oasis forms part of Sherpa Group's successful Flourish collection, which has become recognised for its focus on wellness, community and elevated coastal living.</p>

<p>[smartcode_project:default project_id=151449 project_image_fid=357469]</p>

<p>Residents will have private access to a rooftop amenity space featuring a pool, gym, sauna, steam room, hot and cold plunge pools, spa and barbecue facilities.</p>

<p>"The success of Oasis demonstrates that buyers continue to prioritise quality, location and lifestyle," Leet said.</p>

<p>"We are proud to have delivered a project that has resonated so strongly with the market and look forward to bringing Oasis to life for our future residents."</p>

<p>Sherpa recently launched <a href="https://www.apartments.com.au/new-apartments/flourish-soleira-palm-beach-1150-1160-gold-coast-highway-palm-beach-qld-4221">Flourish Soleira</a>, its third instalment of the Flourish brand in Palm Beach following Flourish Oasis and <a href="https://www.apartments.com.au/new-apartments/amargo-6-12-sixth-avenue-palm-beach-qld-4221">Flourish Amargo</a>.</p>

<p>[smartcode_project_cta:default project_id=151449]</p>


Sherpa sells out Flourish Oasis in booming Palm Beach

<p>Urban Property Group's <a href="https://www.apartments.com.au/new-apartments/la-vera-macquarie-park-94-talavera-road-macquarie-park-nsw-2113">La Vera</a> is leading the next phase of Macquarie Park's residential evolution, with the new apartment development set to become the first of several new apartment projects in the precinct to complete.</p>

<p>The 169-apartment building has now topped out ahead of its scheduled completion in the third quarter of 2026, as new residential investment continues to reshape one of Sydney's largest employment hubs into a true mixed-use precinct.</p>

<p>[smartcode_project:default project_id=134951 project_image_fid=368645]</p>

<p>Cox Architecture has designed La Vera to capture the best of its unique positioning on Talavera Road, orienting the building towards Lane Cove National Park.&nbsp;The building features a sculpted northern façade with flowing curves inspired by the surrounding landscape, while its city-facing elevation adopts a more structured architectural expression to maximise skyline views.</p>

<p>"The vision for the project was to conceive a building that adopted an organic and curvilinear form to the northern portion that faces the Lane Cove National Park," <a href="https://www.apartments.com.au/architects/cox-architecture">Cox Architecture</a> Director Felipe Miranda said.</p>

<p>"The residents that reside in the northern portion of the building benefit by having beautifully crafted curved balconies that speak to the natural context and heighten the relationship of their internal living spaces to the external balconies."</p>

<p>[smartcode_project:default project_id=134951 project_image_fid=358802]</p>

<p>La Vera offers a diverse mix of one, two, three, and four-bedroom configurations, with prices currently starting from $740,000. Buyers so far have been a mix of Sydney-based investors,&nbsp;metro commuters, owner-occupiers and downsizers from surrounding North Shore suburbs.</p>

<p>Both investors and owner-occupiers have been drawn to La Vera's proximity to Macquarie University, Macquarie University Hospital, Macquarie Centre and the Sydney Metro, infrastructure that supports both strong rental demand and a convenient lifestyle for residents.</p>

<p>The apartments feature full-height glazing, timber flooring throughout living areas, stone kitchen benchtops, SMEG appliances, floor-to-ceiling bathroom tiling and ducted air conditioning.</p>

<p>Residents will have access to a rooftop recreation level featuring a swimming pool, sauna, barbecue facilities and landscaped relaxation areas, complemented by additional communal space at ground level. Many apartments enjoy uninterrupted views across Lane Cove National Park, reinforcing the project's connection to its natural setting.</p>

<p>[smartcode_project:default project_id=134951 project_image_fid=364551]</p>

<p><a href="https://www.apartments.com.au/developers/urban-property-group">Urban Property Group</a>, a family-owned developer and builder with nearly four decades of experience, holds a 4.5-star iCIRT rating and was Australia's first developer to introduce 10-Year Latent Defects Insurance (LDI). La Vera is the first apartment development in <a href="https://www.apartments.com.au/developments/macquarie-park-nsw-2113">Macquarie Park</a> approved to offer the additional insurance protection, alongside a five-year warranty on SMEG appliances.</p>

<p>Urban Property Group CEO Patrick Elias said the additional protection reflects changing buyer expectations in the off the plan market.</p>

<p>"Consumers are a lot more weary and a lot more concerned in buying off the plan than they ever have been. Having LDI is a tool to portray the confidence that we have in our product, and a confidence we want buyers to share," Elias said.</p>

<p>Following completion of the building later this year, buyers will move into their apartments well before Christmas.</p>

<p>[smartcode_project_cta:default project_id=134951]</p>


La Vera closes in on completion as Macquarie Park continues residential transformation

<p>Brisbane developer Red &amp; Co's decision to include dual key apartments in its debut Gold Coast apartment development, <a href="https://www.apartments.com.au/new-apartments/como-varsity-lakes-22-lake-street-varsity-lakes-qld-4227">COMO Varsity Lakes</a>, is proving to be one of the project's biggest drawcards, with buyers quickly snapping up the flexible residences.</p>

<p>More than half of the project's 36 dual key apartments have already sold, helping drive COMO beyond the 50 per cent sold mark within the first month of launch.</p>

<p>The strong response highlights growing demand for apartment designs that can adapt to changing lifestyles, with buyers increasingly looking for homes that accommodate multi-generational living, provide rental income opportunities or simply offer greater flexibility over time.</p>

<p>Located on the shores of Lake Orr, COMO will deliver 156 apartments across 16 levels, with the dual-key residences forming a limited release within the broader development.</p>

<p>Each combines a primary two-bedroom apartment with a fully self-contained studio on a single title, connected by a shared foyer and lockable internal door. The design allows owners to house ageing parents, adult children or guests while maintaining privacy, or lease the secondary residence to generate additional income.</p>

<p>Just 17 of the original 36 dual key apartments remain available.</p>

<p>[smartcode_project:default project_id=135546 project_image_fid=367096]</p>

<p>The innovative configuration combines two fully self-contained residences on a single title, typically comprising a primary two-bedroom apartment alongside a separate studio residence, connected via a shared foyer and lockable internal door.&nbsp;</p>

<p>The model is proving particularly attractive to owner occupiers navigating changing family dynamics and the realities of the current housing crisis.&nbsp;</p>

<p>[smartcode_project:default project_id=135546 project_image_fid=363511]</p>

<p><a href="https://www.apartments.com.au/project-marketer/npa">NPA</a>&nbsp;CEO Andrew Erwin said dual key living was resonating strongly with modern buyers because it delivered both financial flexibility and practical lifestyle benefits.&nbsp;</p>

<p>“The housing crisis and rising cost of living are fundamentally changing how Australians think about home ownership,” Erwin said.&nbsp;</p>

<p>“Dual key apartments provide a genuine solution for families who want to stay connected while maintaining independence. Parents can help adult children save for a future home, ageing parents can remain nearby without moving into aged care, and owners still retain privacy and flexibility.</p>

<p>“Importantly, buyers are also recognising the financial advantages. It creates the opportunity to generate additional income from part of the home without the holding costs associated with owning a separate investment property.”&nbsp;</p>

<p>[smartcode_project:default project_id=135546 project_image_fid=363509]</p>

<p>Unlike traditional dual occupancy arrangements, the residences operate under a single title, meaning owners only incur one set of body corporate fees, council rates and holding costs.&nbsp;</p>

<p>The secondary residence can also evolve over time - functioning as guest accommodation, a home office, creative studio or private retreat before later becoming an income-producing asset.</p>

<p><a href="https://www.apartments.com.au/developers/red-co">Red &amp; Co</a>&nbsp;Director and Co-Founder David Laverty said the strong early sales reflected growing buyer urgency and changing priorities within the market.&nbsp;</p>

<p>“Securing more than half of COMO’s residences within such a short timeframe is an outstanding result and a clear endorsement of both the design and location,” Laverty said.&nbsp;</p>

<p>“Buyers are responding to the combination of location, connectivity and amenity, but ultimately it’s value relative to other East Coast markets that is driving enquiry.”&nbsp;</p>

<p>“We’re also seeing strong interest from owner occupiers looking for homes that can adapt with them over time. Flexibility has become one of the most important considerations for buyers in today’s market.”&nbsp;</p>

<p>[smartcode_project:default project_id=135546 project_image_fid=363515]</p>

<p>Designed by <a href="https://www.apartments.com.au/architects/bda-architecture">BDA Architecture</a>, COMO features a mix of one-, two- and three-bedroom residences with 2.7-metre ceilings and larger-format floorplans aimed at owner occupiers, downsizers and lifestyle-focused buyers.&nbsp;</p>

<p>The development will feature an extensive rooftop recreation and wellness offering including a 25-metre lap pool, sundeck, barbecue and dining areas, gym, sauna, plunge baths, landscaped gardens, wellness spaces and rooftop pickleball and paddleball courts.</p>

<p>The remaining dual key apartments range from 137 sqm to 167 sqm and include generous three-bedroom layouts with separate self-contained studio accommodation and dual parking.&nbsp;</p>

<p>Erwin said the dual key concept represented a broader shift in how Australians would live in the future.</p>

<p>“People want homes that can evolve with their lives,” he said.&nbsp;</p>

<p>“A dual key apartment can suit a family today, support an ageing parent tomorrow, and potentially generate income later on. That adaptability is becoming incredibly valuable in the current environment.”</p>

<p>Prices currently range from $2,115,750 to $2,583,000.&nbsp;</p>

<p>[smartcode_project_cta:default project_id=135546]</p>


Inter-generational living drives demand for COMO’s dual key apartments as housing pressures reshape buyer priorities 

<p>Builder-developer&nbsp;<a href="https://www.apartments.com.au/developers/ceerose">Ceerose</a> has doubled down on its Leichhardt ambitions, lodging its second State Significant Development Application (SSDA) in the suburb in the last six months.</p>

<p>Their newest proposal seeks to transform a former industrial precinct into a new residential community centred around the adaptive reuse of one of the site's heritage warehouse buildings.</p>

<p>The new project, on a 6,930 sqm block at&nbsp;<a href="https://www.apartments.com.au/new-apartments/40-76-william-street-leichhardt-nsw-2040">40–76 William Street</a>, will bring more than 200 apartments to a suburb that has seen little to no new supply in recent years. It follows Ceerose's late 2025 SSDA for a mixed-use apartment project on nearby Parramatta Road, signalling the developer's growing investment in Sydney's Inner West.</p>

<p>Ceerose Founder Edward Doueihi told Apartments.com.au the developer’s long-standing presence in Leichhardt and the Inner West had given it a strong understanding of how the area has evolved and where its future opportunities lie.</p>

<p>“Ceerose has had a long-standing presence in Leichhardt and the Inner West, giving us a unique understanding of the area’s evolution and future potential,” Doueihi said.</p>

<p>“Having delivered projects throughout the region, we have witnessed the suburb’s transformation first-hand and understand the opportunities for its continued growth.”</p>

<p>Doueihi said that understanding also informed the planning process, with a comprehensive Stakeholder Engagement Outcomes Report prepared before the application was lodged.</p>

<p>The report identified the key issues and concerns raised by neighbouring residents and other stakeholders, allowing those matters to be considered and incorporated into the design where appropriate.</p>

<p>He said the delivery of additional housing would also play an important role in supporting the revitalisation of Norton Street and the Italian Forum.</p>

<p>“By increasing the local residential population, the development is expected to strengthen demand for local businesses, encourage further investment, and help restore the vibrancy that made the precinct a thriving destination in the early 2000s.”</p>

<p><img alt="First look: Ceerose returns to Leichhardt with 203-apartment adaptive reuse proposal at former warehouse site" data-entity-type="file" data-entity-uuid="7258c54c-8167-479e-8361-2d5fca9915b4" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Appendix%2010B%20-%20CGI%20-%20View%202.jpg?VersionId=S9DQfxu_jpcB5LrAEYFUbyMzg5odW6i5" /></p>

<p>Designed by <a href="https://www.apartments.com.au/architects/woods-bagot">Woods Bagot</a>, the redevelopment would involve the demolition of four existing industrial buildings while retaining and adaptively reusing the site's most significant warehouse. The retained structure would anchor a new residential precinct comprising five interconnected buildings arranged around a large central landscaped courtyard, with heights stepping from five storeys along the surrounding residential streets to 11 storeys at the William Street corner.</p>

<p>According to the Architecture Design Report by Woods Bagot, the proposal "seeks to create a residential village centred around a generous green heart while celebrating the site's industrial heritage through the adaptive reuse of the existing warehouse building."</p>

<p>The development would comprise 203 apartments, with 188 proposed as build-to-sell residences, alongside 15 affordable housing apartments.</p>

<p>Rather than treating the retained warehouse as a standalone heritage object, Woods Bagot has sought to weave the site's industrial history throughout the masterplan. The proposal retains the north and west facades of the landmark corner warehouse, while new buildings reinterpret the site's brick-and-steel industrial language through their material palette and architectural expression.</p>

<p><img alt="First look: Ceerose returns to Leichhardt with 203-apartment adaptive reuse proposal at former warehouse site" data-entity-type="file" data-entity-uuid="9e8c64c2-881b-49e1-8c90-6b6acaaa45b6" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Appendix%2010C%20-%20CGI%20-%20View%203.jpg?VersionId=Qm8_8H_Xrg_sc4Mdjc59vlAcKF_5wRTb" /></p>

<p>The design is organised around what Woods Bagot describes as a "green heart", a landscaped communal open space that reinstates the leafy character removed when the site became an industrial storage facility. A new pedestrian laneway running through the site would improve permeability between William, North and Francis streets, linking residents through landscaped public spaces while activating the ground plane.</p>

<p>Residents would have access to communal gardens and shared recreation areas distributed throughout the development. Sustainability has also been prioritised, with the project targeting an average 7.9-star NatHERS rating. Proposed initiatives include rooftop solar generation, rainwater harvesting, passive solar design, naturally ventilated lobbies, extensive cross-ventilation and the reuse of existing building fabric to reduce embodied carbon.</p>

<p>The adaptive reuse strategy became a defining feature of the application after heritage investigations found only one of the site's industrial buildings could feasibly be retained. The Heritage Impact Statement concludes that preserving the key warehouse façades while referencing the site's industrial character throughout the new development provides an appropriate balance between renewal and conservation.</p>

<p><img alt="First look: Ceerose returns to Leichhardt with 203-apartment adaptive reuse proposal at former warehouse site" data-entity-type="file" data-entity-uuid="efffafdb-594f-4e2b-a067-921fd51c05e1" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Appendix%2010D%20-%20CGI%20-%20View%204.jpg?VersionId=DPmE4.k16YRt0i27hEZVtJAffarpvUfx" /></p>

<p>"Retention and adaptation of the site buildings has been explored but found not to be feasible except for the tallest building, whose street facades will be retained," the heritage report states.</p>

<p>"The proposed building will interpret the brick and steel character of the subject site, including reuse of some components and construction of a large 'sawtooth' structure in the proposed open space."</p>

<p><img alt="First look: Ceerose returns to Leichhardt with 203-apartment adaptive reuse proposal at former warehouse site" data-entity-type="file" data-entity-uuid="3bfef2b5-83f5-40cd-9cab-767092f34266" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Appendix%2010E%20-%20CGI%20-%20View%205.jpg?VersionId=7asb3i_ql4ybbuJOUb5UHBEIy0Q9t.DF" /></p>

<p>The William Street site is located around 300 metres from Leichhardt North Light Rail station and a short walk to Norton Street's retail, dining and hospitality precinct. The surrounding area has increasingly become a focus for urban renewal given its proximity to public transport and the Parramatta Road corridor.</p>

<p>Doueihi founded Ceerose in 1998 and has grown the business to become one of Sydney's more active apartment developers in recent years, with completed projects including The Alex Collective in Alexandria, Abbie's Lane in Annandale, and the award-winning Munro House in Elizabeth Bay. They are currently delivering Belgravia, 17 luxury apartments in Potts Point.</p>


First look: Ceerose doubles down in Leichhardt with adaptive reuse of former warehouse site

Housing Finance

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<p>EXPERT OBSERVER</p>
<p>Total housing finance was lower as expected back in August at $30.67 billion in seasonally adjusted terms, well down from the peak of above $34 billion a year earlier.</p>
<p>The Reserve Bank of Australia posted some useful insights on household finances, financial stress (or rather the lack of it), and the impact of tighter lending standards on loan sizes.</p>
<p>The RBA doesn't always help itself when citing very old data, but made some handy insights on borrowing capacity, specifically noting how most loans are made significantly below borrowing capacity.</p>
<p>In the surveyed figures only about 13 per cent borrowed 90 per cent or more of the maximum amount potentially available, while some two-thirds borrowed only 70 per cent or less of their capacity (thereby implying that tighter lending standards only impact some borrowers).</p>
<p>This was to some extent borne out by the housing finance data, with average loan sizes having continued to rise for owner-occupiers to be significantly higher than a year earlier, including in all three of the most populous states.</p>
<p>The borrowers most likely to be materially impacted by tighter lending standards include portfolio investors, and this is also reflected in the totals for investment loans.</p>
<p>The monthly trend result for investment loans has fallen from $14 billion at the 2015 peak to $10 billion, suggesting that the best performing properties are likely to be those actively sought by homebuyers (and the worst, investment units designed primarily for leasing).</p>
<p>More interest-only loans were reset in the third quarter.</p>
<p>Non-banks have been picking up more business, as expected.</p>
<p>With construction loans and the number of new dwellings financed now in decline new supply will be dropping off in time.</p>
<p>First homebuyers continued to account for about 18 per cent of new home loans, partly driven by incentives.</p>
<p><em>PETE WARGENT is the co-founder of AllenWargent property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank">blogger</a>.</em></p>
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pwargent-M4siyDbqQY

Housing finance squeezed in August: Pete Wargent

<html><body>
<p>EXPERT OBSERVER</p>
<p>Anyone directly or indirectly associated with housing finance has likely felt the pinch of heightened regulation and tighter credit policies. </p>
<p>Mortgage brokers and lenders are the first industry participants that come to mind, however the slowdown in lending activity has broader implications for a wide range of peripheral industries and revenue streams.</p>
<p>Less lending implies fewer home sales for real estate agents and developers, a reduction in building and pest inspections, less conveyancing for lawyers and a slump in stamp duty revenue for state governments. </p>
<p>Generally, when people buy a home, they also splurge on household items such as appliances, white goods and home furnishings, so there is strong relationship with household consumption. </p>
<p><img src="https://www.urban.com.au/images/2018/9/12/Lawless%201.JPG" alt=""></p>
<p>Less spending from households has direct implications for Australia’s economic prosperity, considering consumption comprises close to 60% of our gross domestic product. </p>
<p>The latest data from the Australian Bureau of Statistics shows the overall value of housing finance commitments was down 5.1% between July 2017 and July 2018. </p>
<p>Since the peak in the value of housing finance in August last year, the value of commitments has reduced by 7.0%; a reduction of about $2.35 billion. </p>
<p>The decline has been most visible for investment loans where the value of lending is down 15.7% over the twelve months ending July ‘18 and almost 31% lower since peaking in April 2015. </p>
<p><img src="https://www.urban.com.au/images/2018/9/12/Lawless%202.JPG" alt=""></p>
<p>Owner occupier lending has held much firmer, actually rising 1.1% over the past twelve months (including refinanced loans) and only 1.0% lower than record highs.  </p>
<p>Clearly those industry participants who are more exposed to investment channels have borne the brunt of the credit downturn.</p>
<p>Investors now comprise only 41% of overall mortgage demand, down from a record high of nearly 55% in May 2015.</p>
<p>On average, over the past ten years, investors have comprised approximately 45% of mortgage demand, highlighting that investment concentration has been tracking below the decade average since November last year.</p>
<p><img src="https://www.urban.com.au/images/2018/9/12/Lawless%203.JPG" alt=""></p>
<p>Over a longer period, say the last 30 years, investment levels have averaged much lower, averaging just 37% of the overall value of housing finance; a reminder that the past decade is a high benchmark for investment activity. </p>
<p>The value of investment lending has trended lower across every state and territory over the past year, except Tasmania where the value of investment lending was up 16.3% between July 2017 and July 2018. </p>
<p><img src="https://www.urban.com.au/images/2018/9/12/Lawless%204%20big.JPG" alt=""></p>
<p>Despite the trend towards less investment, the states where investment has been the most concentrated, NSW and Vic, continue to show the highest share of investment lending based on value.  Investors still comprise almost 49% of lending in NSW and almost 41% in Vic, well above the long term average.  </p>
<p>Considering the short to medium term prospects for capital gains in these states is relatively low and rental yields remain close to the record lows, the concentration of investment activity in these states doesn’t make much sense.</p>
<p>In all likelihood, we will continue to see investment activity trending lower, especially in NSW and Vic due to mortgage rate premiums for investors, tighter lending criteria, low rental yields and soft prospects for capital gains. </p>
<p>Additionally, with a federal election around the corner, potential changes to negative gearing and capital gains tax concessions could be weighing on investor sentiment. </p>
<p><em>Tim Lawless is the head of research at CoreLogic</em></p>
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tlawless-5VLUrbAk9s

Credit slowdown likely to impact more than just housing prices: Tim Lawless

<html><body>
<p>EXPERT OBSERVER</p>
<div>Total seasonally adjusted housing finance resumed its slowdown in declining by 1.6 per cent to $31.23 billion in June 2018, with slower mortgage processing times and tighter lending procedures biting.</div>
<div> </div>
<div>You might argue the toss over the classification of loans between investors and owner-occupiers, but the smoothed trend figures for total housing finance confirmed a continuing decline for an 11th consecutive month. </div>
<div> </div>
<div><a href="https://4.bp.blogspot.com/-CT5aAEtbmjw/W2q05bketOI/AAAAAAAArb8/ZXCZh6MCPWEoEEsvYPHSR8Bl7kV8ASOzQCLcBGAs/s1600/HF1.jpg"><img src="https://4.bp.blogspot.com/-CT5aAEtbmjw/W2q05bketOI/AAAAAAAArb8/ZXCZh6MCPWEoEEsvYPHSR8Bl7kV8ASOzQCLcBGAs/s640/HF1.jpg" width="640" height="372" data-original-height="801" data-original-width="1378"></a></div>
<div> </div>
<div> </div>
<div> </div>
<div>Housing finance tends to have a fairly good correlation with dwelling price action, though economists try a bit too hard on this point, curve-fitting charts with warped y-axes trying to prove a faultless correlation that doesn't quite exist. </div>
<div> </div>
<div>There are more factors at play, of course, as the residents of Hobart, Geelong, or indeed many suburbs of Brisbane would attest.<br><br>The share of the stock of outstanding loans pertaining to investors continued to decline on the ABS numbers, broadly mirroring what has been reported by the Reserve Bank. </div>
<div> </div>
<div><strong>State versus state (macropru hurts WA)</strong></div>
<div><strong> </strong></div>
<div>New South Wales has seen an ongoing trend decline in the number of owner-occupier commitments, with Queensland the only state to record an increase in the month of June (up 2.1 per cent). </div>
<div> </div>
<div>Sydney's housing market downturn has now spanned 12 months, the same length of time as the 2008-9 downturn, and already longer than those seen in 1985, 1994-95 and 2015-16 respectively (hat tip to Cameron Kusher of CoreLogic for the stats). </div>
<div> </div>
<div>One of the consequences of macroprudential measures has been to hinder markets that are already struggling.</div>
<div> </div>
<div>In Western Australia the number of home loans dropped to 4,602 in June, the lowest figure since May 1995 (when the population of the state was 1.7 million, compared to 2.6 million today, as highlighted by Shane Wright of the West Australian). </div>
<p> </p>
<div><a href="https://4.bp.blogspot.com/-PA8_Q5rUHWs/W2q05d2JAPI/AAAAAAAArb4/UpthfNlEW4Q-w52DCPEdAMvhVQAlfRUGACLcBGAs/s1600/HF2.jpg"><img src="https://4.bp.blogspot.com/-PA8_Q5rUHWs/W2q05d2JAPI/AAAAAAAArb4/UpthfNlEW4Q-w52DCPEdAMvhVQAlfRUGACLcBGAs/s640/HF2.jpg" width="640" height="370" data-original-height="791" data-original-width="1361"></a></div>
<div>While some applications are clearly being knocked back, for borrowers of sound credit quality, there is robust competition from lenders.</div>
<div> </div>
<div>Indeed, the average loan size remains 5.6 per cent higher than a year earlier. </div>
<div> </div>
<div>First homebuyers accounted for more than 18 per cent of owner-occupier commitments, a 6-year high, with the average loan size at $349,800 the highest figure recorded for any month to date. </div>
<p> </p>
<div><a href="https://2.bp.blogspot.com/-JkWsPF8C85A/W2q05TCi2uI/AAAAAAAArb0/2ViXbcb80kc1Krt7TcbgC-vp9HC5fGUowCLcBGAs/s1600/HF3.jpg"><img src="https://2.bp.blogspot.com/-JkWsPF8C85A/W2q05TCi2uI/AAAAAAAArb0/2ViXbcb80kc1Krt7TcbgC-vp9HC5fGUowCLcBGAs/s640/HF3.jpg" width="640" height="370" data-original-height="804" data-original-width="1390"></a></div>
<p><br>There was a sharp 4.9 per cent drop in the number of commitments for new dwellings.<br><br><strong>Non-banks emerge</strong></p>
<div>A final point for today: Commonwealth Bank's release noted a loss of market share, a trend which is being echoed across the major banks.</div>
<div> </div>
<div>The trend in non-bank lending on the other hand is benefitting entities such as Liberty Financial, Pepper, Firstmac, RESIMAC, and others.</div>
<p> </p>
<div><a href="https://1.bp.blogspot.com/-6DEfTzpqOjI/W2q77TZr5WI/AAAAAAAArcY/6ZDWrIe6yX8wi-5Ep0d90bVnH5hBA_LjwCLcBGAs/s1600/HF4.jpg"><img src="https://1.bp.blogspot.com/-6DEfTzpqOjI/W2q77TZr5WI/AAAAAAAArcY/6ZDWrIe6yX8wi-5Ep0d90bVnH5hBA_LjwCLcBGAs/s640/HF4.jpg" width="640" height="378" data-original-height="792" data-original-width="1337"></a></div>
<p><strong>The wrap</strong><br><br>Soft housing finance result for June, and more softness is certainly expected for July.<br><br>How long the tightness in lending persists is unclear, but it's all pointing down at the moment.</p>
<p><em>PETE WARGENT is the co-founder of AllenWargent property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank">blogger</a>.</em></p>
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Housing finance resumes slowdown: Pete Wargent

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<div>Annual credit growth slowed to 4.5 per cent as at June 2018, well down from 5.4 per cent a year earlier, according to the Reserve Bank's latest Financial Aggregates. </div>
<div> </div>
<div>Broad money growth fell to an anemic 1.9 per cent year-on-year in June - the lowest level since Bobby Brown was #1 in the Australian charts with Humpin' Around in September 1992 - a disagreeable image I'm sure you'll agree (and the credit aggregates weren't too flash either).</div>
<p> </p>
<div><img src="https://4.bp.blogspot.com/--MhvxBg4fw4/W2AWC6XtIbI/AAAAAAAArSs/5Y5zgLbG2z4cn2rQlU91uA4FfacJWXP7QCLcBGAs/s640/RBA2.jpg" width="640" height="372" data-original-height="806" data-original-width="1384"></div>
<p> </p>
<div>Personal credit shrank 1.3 per cent year-on-year, and the annual growth in business credit slowed to just 3.2 per cent.</div>
<div> </div>
<div>Housing credit held up reasonably well at 5.6 per cent.</div>
<div> </div>
<div>The monthly growth in mortgages was all driven by owner-occupiers, with total investment credit actually declining for only the third time since these records just before Bobby Brown. </div>
<div> </div>
<div>With more investors also now switching to paying down principal, investor credit as a share of total housing market outstanding loans fell to 33.5 per cent, which puts investor market share broadly back in line with the average level seen over the past 18 years since June 2000 of 33.2 per cent. </div>
<p> </p>
<div><img src="https://3.bp.blogspot.com/-j57Ykdonboo/W2AWC8rQffI/AAAAAAAArSo/igt0b2G41KgtCLYL9WArzYDP-iq1U03YwCEwYBhgL/s640/RBA1.jpg" width="640" height="350" data-original-height="797" data-original-width="1452"></div>
<p> </p>
<div>Although housing credit as measured here is slowing, the APRA ADI figures also released today grew at a faster clip, implying in turn that non-ban lenders are picking up some of the slack. </div>
<div> </div>
<div>Of of the larger players Westpac recorded solid growth in its home loan book, while Macquarie, Commonwealth Bank, and NAB notched higher totals for investment loans for the month of June.</div>
<div> </div>
<div>In saying that, NAB's investor loan book has recorded only 2 per cent growth over the past year and CBA and ANZ are in negative territory, so there is potentially ample headroom for more investor lending to return forthwith (the 10 per cent growth cap has been shelved as redundant). </div>
<div> </div>
<div><img src="https://4.bp.blogspot.com/-B8BLQUx19Os/W2AcFelOndI/AAAAAAAArTE/dx-Gm0xyewsozM30UPyib3Pog-EQZBE8QCLcBGAs/s640/A1.jpg" width="640" height="374" data-original-height="802" data-original-width="1369"></div>
<div> </div>
<div>Overall, housing credit still seems to be flowing freely enough, but the economy really needs to start generating household income growth to get things moving again. </div>
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Credit strangle continues for property investors: Pete Wargent

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<p class="x_MsoNormal"><span>EXPERT OBSERVATION</span></p>
<p class="x_MsoNormal"><span>The May 2018 housing finance figures released today by the Australian Bureau of Statistics show that the number of loans for housing has continued to decline over the last eight months.</span></p>
<p class="x_MsoNormal">Overall the figures for May 2018 show, in trend terms that the number of owner-occupied finance commitments decreased by 0.7 per cent –the eighth consecutive month of decreases. If refinancing is excluded, in trend terms, the number of owner-occupied finance commitments decreased by 0.6 per cent –the ninth consecutive month since an increase.</p>
<p class="x_MsoNormal"><span>In trend terms decreases were recorded in all states and territories except Tasmania, where lending increased by 0.3 per cent. The largest decrease of 1.9 per cent was in the Australian Capital Territory.</span></p>
<p class="x_MsoNormal"><span>The value of investment housing commitments decreased by 1.9 per cent in May in trend terms. The dollar amount approved for the purchase of dwellings by individuals for rent or resale is at the lowest level since February 2016.</span></p>
<p class="x_MsoNormal"><span>In trend terms, the number of established dwellings purchase commitments decreased by 0.6 per cent while the purchase of new dwellings decreased by 0.9 per cent and new dwelling construction fell by 1.5 per cent.</span></p>
<p class="x_MsoNormal"><span>The proportion of first home buyers, as part of the total owner-occupied housing finance commitments, remained unchanged in May at 17.6 per cent.</span></p>
<p class="x_MsoNormal"><span>The continued decline in housing finance confirms the feedback from the market that the APRA restrictions and the fallout from the Royal Commission into Banking have resulted in an extremely cautious approach by lenders.<span class="Apple-converted-space"> </span> <br></span></p>
<p class="x_MsoNormal"><span>Loan applications are now being scrutinised for real costs of living including outgoings such as school fees and use of credit cards. At the same time an ultra conservative approach is being taken by banks with their valuations which means that funds available are below purchaser’s expectations.<span class="Apple-converted-space"> </span> <br></span></p>
<p class="x_MsoNormal"><span>We need to ensure that lending approaches reflect the market rather than set the market which appears to be case at the moment.</span></p>
<p class="x_MsoNormal">Malcolm Gunning is the president of the REIA and can be <a href="https://www.gunningre.com.au/agents/1stf0026/Malcolm-Gunning" target="_blank">contacted here.</a></p>
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jrobinson-rf4aSBido9

Housing finance numbers confirm market feedback: REIA

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<p dir="LTR" align="LEFT">Australian housing finance approvals beat expectations again in November, the number of approvals for owner occupiers up 2.1% vs expectations of a flat result. Approvals ex refi rose 2.4%mth to be up 9.2%yr.</p>
<p dir="LTR" align="LEFT">The value of housing finance approvals to investors also posted a rise, up 1.5% but is down –8.3%yr.</p>
<p dir="LTR" align="LEFT">The Nov detail showed continued strength in first home buyer loans (+4.5%mth, 36%yr) concentrated in NSW and Vic where state government stamp duty concessions are giving a big boost and activity is coming from a very low starting point.</p>
<p dir="LTR" align="LEFT">Construction-related approvals were up 2%mth, 7.6%yr.</p>
<p dir="LTR" align="LEFT">Click here <a href="https://www.propertyobserver.com.au/images/2018/1/18/FINANCE.jpg" target="_blank">to enlarge.</a></p>
<p dir="LTR" align="LEFT"><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2018/1/18/FINANCE.jpg" alt=""></p>
<p dir="LTR" align="LEFT">By state, gains in NSW (+1.9%mth), Qld (+4.3%mth) and SA (+2.1%mth) offset falls in Vic (–0.3%mth) and WA (–2.7%mth). Annual growth remains strongest in Vic (+16.8%) and NSW (+10.9%) bearing in mind that this is owner occupier approvals only (ex refi) and that the slowdown in investor activity has had a more material impact in these two states, NSW in particular.</p>
<p dir="LTR" align="LEFT">Overall, the total value of finance approvals ex owner occupier refi was up 2.1%mth, and 1.7%yr. That compares to turnover, down around 16%yr, auction clearance rates, down over 13ppts, and an abrupt slowdown in price growth, down from a double digit pace mid-year to a sub-5% annual pace currently.</p>
<p dir="LTR" align="LEFT">Click here <a href="https://www.propertyobserver.com.au/images/2018/1/18/SEGMENT.jpg" target="_blank">to enlarge.</a></p>
<p dir="LTR" align="LEFT"><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2018/1/18/SEGMENT.jpg" alt=""></p>
<p dir="LTR" align="LEFT">While the pull back in investor finance approvals is broadly consistent with macro-prudential tightening measures impacting this segment, the continued strength in owner-occupier activity has been surprising, particularly given material slowdown in wider housing market activity evident in other measures. Overall, the total value of loan approvals including investor loans and ex refi has firmed over the last year, up 1.7%yr.</p>
<p dir="LTR" align="LEFT">The comparison with the previous macro-prudential tightening episode in 2015 is also intriguing. This resulted in a similar slowdown in wider market measures and a sizeable 10%+ decline in the total value of finance approvals.</p>
<p dir="LTR" align="LEFT">The differences are puzzling but may be an indication that weaker foreign buyer demand – evident in the wider housing market performance but not captured by finance approvals – may have had a greater hand in the 2017 slowdown.</p>
<p dir="LTR" align="LEFT"><em><span>Matthew Hassan</span> is senior economist with <a href="https://www.westpac.com.au/" target="_blank">Westpac</a>.</em></p>
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j.ballantyne1990-6AQqhLzZaK

Housing's puzzling strength: Matthew Hassan

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<p>The trend in housing finance eased a bit, to a total of around $33 billion in September.</p>
<div>The value of investor loans was possibly pumped up a little in the preceding month by refinancing activity, but the monthly trend remains steadily down to about $12 billion, as tweaks to lending standards continue to lean against activity. </div>
<div> </div>
<div>The $33 billion result and the related easing in investor loans were variously described as a "walloping fall", "down the gurgler", a "staggering drop", and even plain old "grim".<br><br>A grim $33 billion it is!</div>
<div> </div>
<div>Recall that this result comes precisely one month after investor loans had "bounced back", "spiked", "staged a comeback", and all the rest of it. </div>
<div> </div>
<div>I guess that goes with the territory when you have to find something new and exciting to say every month. Anyhoo, here's the chart, in all of its walloping grimness!</div>
<div> </div>
<div><a href="https://2.bp.blogspot.com/-RXhTal2egbw/WgQcDjdlLJI/AAAAAAAAm8A/EM7c07RsGmoFcpckUpApGUc1EcdbgYz4QCEwYBhgL/s1600/FHB4.jpg" target="_blank">Click to enlarge</a></div>
<div> </div>
<div class="separator"><a href="https://2.bp.blogspot.com/-RXhTal2egbw/WgQcDjdlLJI/AAAAAAAAm8A/EM7c07RsGmoFcpckUpApGUc1EcdbgYz4QCEwYBhgL/s1600/FHB4.jpg"><img src="https://2.bp.blogspot.com/-RXhTal2egbw/WgQcDjdlLJI/AAAAAAAAm8A/EM7c07RsGmoFcpckUpApGUc1EcdbgYz4QCEwYBhgL/s640/FHB4.jpg" width="640" height="384" data-original-height="831" data-original-width="1379"></a></div>
<div> </div>
<div>Owner-occupiers continue to settle on the near-record levels of new stock, with commitments for new dwellings continuing to surge to the highest level since 1978. </div>
<div> </div>
<div><a href="https://2.bp.blogspot.com/-p0iwcb5foU8/WgQcFwi3dZI/AAAAAAAAm8M/HVd6wMYM5dMTHv3NJwZH0HUNR1ci7Q_WgCEwYBhgL/s1600/FHB5.jpg" target="_blank">Click to enlarge</a></div>
<div> </div>
<div class="separator"><a href="https://2.bp.blogspot.com/-p0iwcb5foU8/WgQcFwi3dZI/AAAAAAAAm8M/HVd6wMYM5dMTHv3NJwZH0HUNR1ci7Q_WgCEwYBhgL/s1600/FHB5.jpg"><img src="https://2.bp.blogspot.com/-p0iwcb5foU8/WgQcFwi3dZI/AAAAAAAAm8M/HVd6wMYM5dMTHv3NJwZH0HUNR1ci7Q_WgCEwYBhgL/s640/FHB5.jpg" width="640" height="394" data-original-height="833" data-original-width="1353"></a></div>
<p><br><span>Homebuyer demand still looks to be strongest in Victoria, mirroring demographic trends.</span></p>
<p><a href="https://2.bp.blogspot.com/-WFHGj0lnfLk/WgQuyfhqm-I/AAAAAAAAm8s/eUVWSyM-6qoVp5cURmis0RSPxhfrt3uKQCLcBGAs/s1600/A1.jpg" target="_blank"><span>Click to enlarge</span></a></p>
<div class="separator"><a href="https://2.bp.blogspot.com/-WFHGj0lnfLk/WgQuyfhqm-I/AAAAAAAAm8s/eUVWSyM-6qoVp5cURmis0RSPxhfrt3uKQCLcBGAs/s1600/A1.jpg"><img src="https://2.bp.blogspot.com/-WFHGj0lnfLk/WgQuyfhqm-I/AAAAAAAAm8s/eUVWSyM-6qoVp5cURmis0RSPxhfrt3uKQCLcBGAs/s640/A1.jpg" width="640" height="390" data-original-height="830" data-original-width="1360"></a></div>
<p> </p>
<div>The trend number of owner-occupier commitments in Western Australia has been edging slightly higher for the past 5 months, suggesting moderately improving conditions. </div>
<p> </p>
<div><strong><span style="text-decoration: underline;">First homebuyers return</span></strong></div>
<div> </div>
<div>September is a shorter month than August, as well as playing host to a public holiday and a Grand Final.  </div>
<div> </div>
<div>Not surprisingly, then, i<span>n original terms the number of first homebuyer loans pulled back slightly from a 93-month high.</span>
</div>
<div><span> </span></div>
<div><a href="https://2.bp.blogspot.com/-iGuLSAW2avw/WgQcEy-2ExI/AAAAAAAAm8E/7Vs7i_LKCcIiZoLwxGBNm3vONtHvif2OgCLcBGAs/s1600/FHB2.jpg" target="_blank"><span>Click to enlarge</span></a></div>
<div><span> </span></div>
<div class="separator"><a href="https://2.bp.blogspot.com/-iGuLSAW2avw/WgQcEy-2ExI/AAAAAAAAm8E/7Vs7i_LKCcIiZoLwxGBNm3vONtHvif2OgCLcBGAs/s1600/FHB2.jpg"><img src="https://2.bp.blogspot.com/-iGuLSAW2avw/WgQcEy-2ExI/AAAAAAAAm8E/7Vs7i_LKCcIiZoLwxGBNm3vONtHvif2OgCLcBGAs/s640/FHB2.jpg" width="640" height="390" data-original-height="827" data-original-width="1356"></a></div>
<div class="separator"> </div>
<div class="separator">As a share of housing finance commitments, however, first homebuyer loans rose again, now levitating from 17.2 per cent to 17.4 per cent, to notch a 4½-year high. </div>
<div class="separator"> </div>
<div class="separator">The return of the first homebuyer has largely been driven by incentives in New South Wales and Victoria.  </div>
<div class="separator"> </div>
<div class="separator">Despite the reported monthly decline, in truth first homebuyer numbers were markedly higher over the third quarter in both NSW (58 per cent) and VIC (32 per cent) - it all depends on the preferred narrative, though the figures should be watched closely for revisions.</div>
<div class="separator"> </div>
<div class="separator"><a href="https://3.bp.blogspot.com/-itQLd4N_Xj0/WgQcGz760NI/AAAAAAAAm8Q/ghbWaaCBstMlaljGfM-IToewHC9EHG6PACEwYBhgL/s1600/FHBs.jpg" target="_blank">Click to enlarge</a></div>
<div class="separator"> </div>
<div class="separator"><a href="https://3.bp.blogspot.com/-itQLd4N_Xj0/WgQcGz760NI/AAAAAAAAm8Q/ghbWaaCBstMlaljGfM-IToewHC9EHG6PACEwYBhgL/s1600/FHBs.jpg"><img src="https://3.bp.blogspot.com/-itQLd4N_Xj0/WgQcGz760NI/AAAAAAAAm8Q/ghbWaaCBstMlaljGfM-IToewHC9EHG6PACEwYBhgL/s640/FHBs.jpg" width="640" height="388" data-original-height="829" data-original-width="1364"></a></div>
<div class="separator"> </div>
<div class="separator">On average, first homebuyers are borrowing a little less than a year earlier, perhaps implying that, at the margin, the incentives have encouraged more wavering buyers onto the ladder.</div>
<div class="separator"> </div>
<div class="separator">For non-first homebuyers loan sizes are now rising again, however, as they are wont to do once markets get to grips with new lending rules. </div>
<div class="separator"> </div>
<div class="separator"><a href="https://1.bp.blogspot.com/-FYkwrY3i2kM/WgQcE1I8AiI/AAAAAAAAm8I/RM2-YbC_sjgmYzbdhgYw6TAMSXC20Hk0gCLcBGAs/s1600/FHB3.jpg" target="_blank">Click to enlarge</a></div>
<div class="separator"> </div>
<div class="separator"><a href="https://1.bp.blogspot.com/-FYkwrY3i2kM/WgQcE1I8AiI/AAAAAAAAm8I/RM2-YbC_sjgmYzbdhgYw6TAMSXC20Hk0gCLcBGAs/s1600/FHB3.jpg"><img src="https://1.bp.blogspot.com/-FYkwrY3i2kM/WgQcE1I8AiI/AAAAAAAAm8I/RM2-YbC_sjgmYzbdhgYw6TAMSXC20Hk0gCLcBGAs/s640/FHB3.jpg" width="640" height="382" data-original-height="828" data-original-width="1387"></a></div>
<p> </p>
<div><strong><span style="text-decoration: underline;">Centralising demand</span></strong></div>
<div> </div>
<div>Nothing particularly unexpected to see here, with investor loans declining in response to tighter lending criteria, trending down to sit about 8 per cent lower than at the end of last year, in turn leading to a fairly steady result overall. </div>
<div> </div>
<div>The headline numbers suggest housing finance is flattening, as demanded by market commentators and regulators alike. </div>
<div> </div>
<div>This suggests it will become more challenging over the next few years for investors to find outperforming markets, following a very easy ride over the past decade, when simply buying properties in Sydney resulted in jackpot returns. </div>
<div> </div>
<div>Where to look?</div>
<div> </div>
<div>Outstanding 2016 Census research from Terry Rawnsley at SGE Economics &amp; Planning showed that the capital cities created 900,000 new jobs over the five years to 2016, while the whole of regional Australia combined created close to zero. Zip.</div>
<div> </div>
<div>Sydney alone created nearly 500,000 jobs jet over the past decade, with the inner suburbs accounting for a disproportionately high share of the employment growth.</div>
<div> </div>
<div>Between 2011 and 2016, total Sydney employment boomed by 342,000, while employment in regional New South Wales went backwards, falling by 17,000. </div>
<div> </div>
<div>Drilling down a level, Rawnsley found that employment growth has become more heavily focused on the inner cities of the largest metropolises, especially Sydney and Melbourne. </div>
<div> </div>
<div>It's worth remembering that these figures comprise a period where resources construction declined, so the contrast over the next five years may not be quite so stark. </div>
<div> </div>
<div>Still, with employment growth exploding in the inner cities and investor loans being tightened, upwards pressure returning on rents seems likely in 2018. </div>
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Finding something exciting to say every month on home loan financing: Pete Wargent

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<p>The September ANZ-Property Council Survey has found sentiment in the housing market has declined noticeably with the the housing market expected to continue to cool through 2017 and 2018.</p>
<p>The survey noted the impact of APRA’s regulation is taking hold as firms report greater difficulty obtaining finance.</p>
<p><a href="https://www.propertyobserver.com.au/images/2017/07/13/Screen%20Shot%202017-07-13%20at%209.45.14%20AM.png" target="_blank">Click to enlarge</a></p>
<p><img src="https://www.urban.com.au/images/2017/07/13/Screen%20Shot%202017-07-13%20at%209.45.14%20AM.png" alt=""></p>
<p>David Plank, head of Australian economics, ANZ, said the September quarter ANZ-Property Council survey shows that sentiment is cooling in the property sector.</p>
<p>"This is perhaps not surprising for the housing sector, but somewhat at odds with the strength in non-residential building approvals," he said.</p>
<p>"Expectations of a cooling housing sector are in line with the regulation-induced slowdown evident in slower house price growth and weaker auction results in recent months.</p>
<p>"APRA’s crackdown on the investor segment has seen borrowing costs rise and the availability of finance tighten.</p>
<p>"As a result, firms are reporting a softer outlook for construction activity and prices over the next 12 months, which is in keeping with ANZ’s view.</p>
<p>"But it’s not all bad news.</p>
<p>"Despite a softer outlook for economic growth, firms continue to report solid demand for labour, suggesting that employment growth will remain positive.</p>
<p>"The survey also provides further evidence that the mining states have moved past the bottom of their mining boom adjustment.” </p>
<p><a href="https://www.propertyobserver.com.au/images/2017/07/13/Screen%20Shot%202017-07-13%20at%209.46.46%20AM.png" target="_blank">Click to enlarge</a></p>
<p><img src="https://www.urban.com.au/images/2017/07/13/Screen%20Shot%202017-07-13%20at%209.46.46%20AM.png" alt=""></p>
<p> </p>
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<p><span>The survey said the </span><span>outlook for Australia’s property sector has eased recently, but remains at solid </span><span>levels</span><span>. </span></p>
<p><span>"The quarterly decline was led by a softening outlook in New South Wales and Victoria," the survey said.</span></p>
<p><span>"The drop in sentiment in this survey does not ring alarm bells, given that </span><span>sentiment across most regions remains higher than it was a year ago</span><span>. </span></p>
<p><span>"The </span><span>mining states have been the key drivers of this improvement</span><span>, with confidence in Western Australia bumping around the </span><span>highest levels in three years, while Queensland’s recovery from the trough of 2016 continues. </span></p>
<p><a href="https://www.propertyobserver.com.au/images/2017/07/13/Screen%20Shot%202017-07-13%20at%209.56.07%20AM.png" target="_blank"><span>Click to enlarge</span></a></p>
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<p>"Survey respondents suggest that the outlook for the housing market is softening, with a variety of indicators pointing toward a weaker market going forward.</p>
<p>"Construction activity, capital values and the forward-work schedule are all expected to ease over the coming 12 months. Staffing levels in the housing sector are also expected to ease, in contrast to the more positive outlook for the property sector overall.</p>
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<p><img src="https://www.urban.com.au/images/2017/07/13/Screen%20Shot%202017-07-13%20at%2010.01.44%20AM.png" alt=""></p>
<p>"The sector has started to cool in recent months, with Sydney house-price growth slowing to 12 percent y/y in May, from 20 percent y/y just two months earlier.</p>
<p>"Similarly, monthly building approvals have fallen around 15 percent from the peak a year ago. It is increasingly apparent that the tighter macroprudential regulation from APRA is having a negative impact on the industry.</p>
<p>"The additional regulation is resulting in a continual worsening of the availability of debt finance. While tighter funding conditions are being reported across all sectors of the property market, the impact has been most pronounced in the residential segment.</p>
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<p><img src="https://www.urban.com.au/images/2017/07/13/Screen%20Shot%202017-07-13%20at%2010.12.36%20AM.png" alt=""></p>
<p>"As a result, only 37 percent of respondents expect house prices to rise over the next 12 months, and 31 percent expect construction activity to rise, down from 49 percent and 38 percent respectively three months ago.</p>
<p>"Similar to the housing segment, all retail indicators softened in the September survey.</p>
<p>"Both capital value and construction activity expectations fell to the lowest levels on record, reflecting the fact that the industry faces a number of challenges. Only a net 10 percent of respondents expect retail property values will rise over the next 12 months, down significantly from 44 percent a year ago.</p>
<p>"Household spending remains subdued, in line with wages bumping around historically low growth rates.</p>
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<p><img src="https://www.urban.com.au/images/2017/07/13/Screen%20Shot%202017-07-13%20at%2010.15.01%20AM.png" alt=""></p>
<p>"In addition, the large list of global retailers that are either ramping up their presence in Australia or preparing to enter, is putting significant downward pressure on retailers’ margins. An additional headwind going forward is likely to be the expected slowdown in house price growth.</p>
<p>"Significant wealth increases over recent years have supported consumption through a period of low income growth, but slower house price growth will lessen this support. The retail sector has already lost 20k jobs nationwide over the past 12 months, and it is difficult to see a significant reversal of this trend. "</p>
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jonathanchancellor-7SQnKwU6yx

Housing market outlook softening: ANZ, Property Council

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<p>A pretty solid result for housing finance in May with seasonally adjusted total finance rising by 1.3 percent to just over $33 billion.  </p>
<p>Looking at the smoother trend figures, total housing finance has been fairly flat now for about two years, since macroprudential measures first kicked into gear. </p>
<p>The value of investors loans continues to moderate - with home loans by and large picking up the slack - and this rebalancing has manifested itself recently in rising rents in Sydney and Melbourne.</p>
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<br><div>First homebuyers accounted for 14 per cent of commitments in May, a slight rise. </div>
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<div>But the difference between the average loan size for first homebuyers at $318,000 and non first-homebuyers, which has surged again to $390,100, has blown out to its widest ever margin.</div>
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<div>Even smoothing the figures for the last year shows the dichotomy, and it's making life challenging for first homebuyers. </div>
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<br><div>Homebuyer commitments are trending higher in the two most populous states, largely offsetting corresponding declines in investor loans.</div>
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<br><div><strong><span style="text-decoration: underline;">New dwelling sales surge</span></strong></div>
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<div>The number of new dwellings purchase by owner-occupiers has risen strongly to sit at close to the highest ever monthly level, matched only on one occasion during the days of financial crisis stimulus. </div>
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<br><span>It seems that developers in Queensland have successfully convinced more homebuyers to buy new.</span>
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<strong><span style="text-decoration: underline;"><br></span></strong><span>Lending for the construction of new dwellings was also strong, at its best level since early 2015.</span><br><strong><span style="text-decoration: underline;"><br></span></strong>
<div><strong><span style="text-decoration: underline;">The wrap</span></strong></div>
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<div>Overall, a solid if unspectacular result, with the average loan size for non-first homebuyers blazing higher again to sit just a fraction below the 2015 record level of $390,700.</div>
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<div>Investor loans continued to moderate as expected, and there will be a further slowing to come in the following months. </div>
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<p class="p1"><span class="s1">PETE WARGENT is the co-founder of <a href="https://allenwargent.com/" target="_blank"><span class="s2">AllenWargent</span></a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank"><span class="s2">blogger</span></a>.</span></p>
<p class="p2"><span class="s3"><em>His latest book is </em><a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx" target="_blank"><span class="s2"><em>Four Green Houses and a Red Hotel</em></span></a><em>.</em></span></p>
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Tough times for first homebuyers: Pete Wargent 

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<p>The Housing Finance statistics, released by the Australian Bureau of Statistics last week, continue to show volatility, but with a positive result for total dwelling finance for the month of March, up by 0.9 percent.</p>
<p>“Performance across the States was mixed, with the number of commitments increasing in NSW, Tasmania, the Northern Territory and the ACT, slightly edging out a fall in the number of dwelling commitments in Victoria, Queensland, Western Australia and South Australia,” Matthew Pollock, Master Builders, National Manager Housing said.</p>
<p>“The number of first home buyer loans jumped by 20 percent in March, recording an extra 1,350 loans on top of the February statistics.</p>
<p>But the share of first home buyer loans is still very low, at 13.6 percent of total loan commitments in March, compared to a decade average of around 18 percent,” Matthew Pollock said.</p>
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