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.

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.

A new Colliers report, Brisbane 2032 Olympic and Paralympic Games: Creating Solutions, 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.

The broader construction pipeline paints an even clearer picture.

Construction Skills Queensland's Horizon 2032 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.

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.

[smartcode_project:default project_id=150489 project_image_fid=373834]

Colliers Queensland Residential Director Andrew Scriven said the convergence of these projects is creating a clear window of opportunity for both developers and buyers.

"From 2027 onwards, the market will shift dramatically," Scriven said.

"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."

Scriven said the same dynamic would also affect buyers, with fewer apartment projects expected to launch once construction capacity tightens.

"If you're looking to change your lifestyle over the next five years, now is your window of opportunity to buy."

[smartcode_project:default project_id=150713 project_image_fid=373827]

Developers are already positioning themselves ahead of that window.

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.

Hutchinson Builders will deliver both projects, with early works already underway at Yeerongpilly and Newstead expected to commence later this year.

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.

Colliers Queensland researcher Pragya Sharma said Greater Brisbane is forecast to require around 40,000 new apartments between 2021 and 2031.

"There's a real mismatch emerging between when housing is needed and when it will be feasible to build," Sharma said.

"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."

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

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.

&nbsp;

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.

[smartcode_project:default project_id=151449 project_image_fid=357458]

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.

"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.

"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.

"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."

[smartcode_project:default project_id=151449 project_image_fid=357463]

Construction is now progressing following development approval, with trusted builder LPS Group delivering the project and completion anticipated in Q3 2027.

Oasis forms part of Sherpa Group's successful Flourish collection, which has become recognised for its focus on wellness, community and elevated coastal living.

[smartcode_project:default project_id=151449 project_image_fid=357469]

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.

"The success of Oasis demonstrates that buyers continue to prioritise quality, location and lifestyle," Leet said.

"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."

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>.

[smartcode_project_cta:default project_id=151449]

Sherpa sells out Flourish Oasis in booming Palm Beach

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.

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.

[smartcode_project:default project_id=134951 project_image_fid=368645]

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.

"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.

"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."

[smartcode_project:default project_id=134951 project_image_fid=358802]

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.

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.

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.

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.

[smartcode_project:default project_id=134951 project_image_fid=364551]

<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.

Urban Property Group CEO Patrick Elias said the additional protection reflects changing buyer expectations in the off the plan market.

"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.

Following completion of the building later this year, buyers will move into their apartments well before Christmas.

[smartcode_project_cta:default project_id=134951]

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

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.

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.

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.

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.

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.

Just 17 of the original 36 dual key apartments remain available.

[smartcode_project:default project_id=135546 project_image_fid=367096]

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;

The model is proving particularly attractive to owner occupiers navigating changing family dynamics and the realities of the current housing crisis.&nbsp;

[smartcode_project:default project_id=135546 project_image_fid=363511]

<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;

“The housing crisis and rising cost of living are fundamentally changing how Australians think about home ownership,” Erwin said.&nbsp;

“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.

“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;

[smartcode_project:default project_id=135546 project_image_fid=363509]

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;

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.

<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;

“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;

“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;

“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;

[smartcode_project:default project_id=135546 project_image_fid=363515]

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;

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.

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;

Erwin said the dual key concept represented a broader shift in how Australians would live in the future.

“People want homes that can evolve with their lives,” he said.&nbsp;

“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.”

Prices currently range from $2,115,750 to $2,583,000.&nbsp;

[smartcode_project_cta:default project_id=135546]

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

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.

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.

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.

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.

“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.

“Having delivered projects throughout the region, we have witnessed the suburb’s transformation first-hand and understand the opportunities for its continued growth.”

Doueihi said that understanding also informed the planning process, with a comprehensive Stakeholder Engagement Outcomes Report prepared before the application was lodged.

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.

He said the delivery of additional housing would also play an important role in supporting the revitalisation of Norton Street and the Italian Forum.

“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.”

<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" />

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.

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."

The development would comprise 203 apartments, with 188 proposed as build-to-sell residences, alongside 15 affordable housing apartments.

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.

<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" />

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.

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.

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.

<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" />

"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.

"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."

<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" />

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.

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.

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

Housing Finance

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The seasonally adjusted number of home loans ticked down moderately by 0.5 percent to 54,468 in March 2017.
However the average loan size increased solidly, so combined with a modest 0.8 percent increase in investment lending to $13 billion total housing finance increased by 0.9 percent to $32 billion in the month. 
Headlines variously and confusingly described the result as stronger, growing, dropping, and on the slide.
But at the national level at least, the trend has been pretty flat. 
<a href="https://www.propertyobserver.com.au/images/2017/05/15/A1.jpg" target="_blank">Click to enlarge</a>
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/05/15/A1.jpg" alt="">
APRA only announced its latest round of curbs on interest-only lending at the end of the month of March, so the true impacts thereof will only be seen in the coming months.
However, the figures do suggest that lenders were already applying the brakes to investor loans to some extent before the regulatory announcement.
The average loan size for first homebuyers increased from $308,900 in February to $316,300 in March.
Meanwhile the average loan size for non-first homebuyers lifted from $360,600 to $375,800 in the month, though remaining some way below the record highs of 2015.
<a href="https://www.propertyobserver.com.au/images/2017/05/15/A3.jpg" target="_blank">Click to enlarge</a>
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/05/15/A3.jpg" alt="">
The figures for new dwelling purchases by owner-occupiers were partly revised for 2012 and 2013, giving the below chart an altogether different feel than it had previously.
Some upbeat news for the housing market is that the number of new dwelling purchases by owner-occupiers has surged to the highest level since June 2007. 
<a href="https://www.propertyobserver.com.au/images/2017/05/15/A4.jpg" target="_blank">Click to enlarge</a>
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/05/15/A4.jpg" alt="">
Looking around the traps, both the number and value of home loans has continued to trend down in Western Australia. 
<a href="https://www.propertyobserver.com.au/images/2017/05/15/A2.jpg" target="_blank">Click to enlarge</a>
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/05/15/A2.jpg" alt="">
I'll take a look at investor loans by state on Wednesday this week.
First homebuyers flounder
The number of first homebuyer loans jumped by 20.5 percent to 7,946 in March from 6,596 in February, although this was largely a seasonal move.
The annual number of first homebuyers has trended steadily down since 2014, when the market had stabilised after the first homebuyer stimulus was withdrawn. 
<a href="https://www.propertyobserver.com.au/images/2017/05/15/A5.jpg" target="_blank">Click to enlarge</a>
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/05/15/A5.jpg" alt=""> 
Many prospective first homebuyers in Sydney have opted to buy investment properties instead in the face of such a challenging market, and this is reflected in the decline in activity in New South Wales. 
<a href="https://www.propertyobserver.com.au/images/2017/05/15/A6.jpg" target="_blank">Click to enlarge</a>
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/05/15/A6.jpg" alt="">
The annual number of first homebuyers in Western Australia has also declined by 28 percent since October 2013 despite falling prices in the state's capital city, although there was perhaps the first hint of a bounce in March. 
The wrap
Overall this was a pretty solid result for housing finance in March, but since the figures pre-date APRA's latest round of curbs it will be more important to follow what plays out in the coming months. 
Developers will be somewhat heartened to see the number of owner-occupier commitments to buy new dwellings rising close to their highest ever level in recent months. 
PETE WARGENT is the co-founder of <a href="https://allenwargent.com/">AllenWargent</a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/">blogger</a>.
His latest book is <a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx">Four Green Houses and a Red Hotel</a>.
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pwargent-M4siyDbqQY

Housing finance steady pre-APRA: Pete Wargent

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The following charts describes what the Reserve Bank of Australia knows about Australia's housing sector.
The charts show a slight dip in housing loan approvals for investors.
<a href="https://www.propertyobserver.com.au/images/2017/05/03/Screen%20Shot%202017-05-03%20at%2011.32.03%20AM.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/05/03/Screen%20Shot%202017-05-03%20at%2011.32.03%20AM.png" alt="" width="836" height="547">
For more information, go to the RBA website <a href="https://www.rba.gov.au" target="_blank">here</a>.
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j.ballantyne1990-6AQqhLzZaK

RBA's May chart pack gives insight to Australian housing loan approvals

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GUEST OBSERVER
It seems that lenders were already scaling back their appetite for investment lending as early as January this year, with the value of housing finance commitments for investment purposes falling by almost 6 percent in February; the largest fall in lending for investment purposes since September 2015. 
While this is only one month of data, it is likely that investment lending has moved, or is moving through the peak of the cycle.
The February 2017 housing finance data which was released today by the Australian Bureau of Statistics (ABS). 
The data showed that in February 2017 there was $32.9 billion worth of housing finance commitments which was -2.7 percent lower over the month but 3.5 percent higher compared to the value in February 2016. 
To highlight how much lending is going to housing it is interesting to note that five years earlier, $20.4 billion worth of housing finance commitments was recorded in February 2012.
<a href="https://www.propertyobserver.com.au/images/2017/04/12/chart-1-1.jpg" target="_blank">Click to enlarge</a>
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/04/12/chart-1-1.jpg" alt="">
The $32.9 billion of housing finance commitments in February 2017 consisted of $20.0 billion to owner occupiers and $12.9 billion to investors. 
The value of lending to owner occupiers has changed very little over the past eight months and was -0.5 percent lower over the month and -2.3 percent lower year-on-year. 
The value of lending to investors fell by -5.9 percent in February but is still 14.0 percent higher year-on-year. 
The -5.9 percent monthly fall in the value of lending to investors was the largest monthly fall since September 2015 and is a dramatic change in direction for investment lending which has been trending higher since January 2016.
<a href="https://www.propertyobserver.com.au/images/2017/04/12/chart-2-1.jpg" target="_blank">Click to enlarge</a>
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/04/12/chart-2-1.jpg" alt="">
Owner occupier housing finance commitments are split into four types: construction of dwellings ($1.8 billion), purchase of new dwellings ($1.0 billion), refinancing of established dwellings ($6.2 billion) and purchase of established dwellings ($11.0 billion).  Construction of dwellings and purchase of new dwellings rose over the month and were also the only commitment types higher year-on-year. 
Lending for refinances in particular have been in a steady decline since December 2015, at that time there were $7.3 billion in commitments over the month with the $6.2 billion in February 2017 tracking -15.6 percent lower. 
This does seem a little counter-intuitive given that since December 2015 there has been substantial repricing of mortgage rates since that time and investors have returned to the market which could have involved refinancing of their owner-occupied properties to fund the investment.
<a href="https://www.propertyobserver.com.au/images/2017/04/12/chart-3-1.jpg" target="_blank">Click to enlarge</a>
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Lending to investors slowed markedly in February 2017 with the two components: new construction ($1.0 billion) and established dwellings ($11.9 billion) each recording a fall over the month. 
Lending for construction was -13.6 percent lower in February while lending for established dwellings fell by -5.2 percent. 
The decline in housing finance commitments predates the new policy announcement from APRA to lenders a week ago notifying them of changes to lending policies, in particular for interest-only lending which is popular amongst investors. 
Although the letter was only recently published, the discussions about the lending policy changes have probably been ongoing with lenders for a number of months and may help to explain the fall in investor lending in February. 
Over the next few months it will be interesting to see the direction of lending to investors, if it falls like it did after April 2015, it could lead to a slowdown in the rate of value growth in the housing market although there is little evidence of this occurring as yet.
Click to enlarge
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/04/12/chart-4-1.jpg" alt="">
The above chart shows the value of lending for new housing compared to the value for existing housing, note that refinances are excluded from this data.  New housing is defined as: owner occupier construction of dwellings, owner occupier purchase of new dwellings and investment construction of dwellings which totalled $3.9 billion in February 2017 compared to $22.9 billion for existing housing. 
New housing accounted for 14.5 percent of total housing finance commitments over the month. Even though we are in the midst of a housing construction boom there has been no substantial increase in the value of finance commitments for new housing over recent years. Keep in mind though that there are substantially more established properties than new with the 9.8 million dwellings nationally only increasing by 1.8 percent over the past year.
The next few months of housing finance commitments data will be interesting to follow to see if the softness in investor demand continues.  Also with many lenders repricing mortgage rates since February there may be an increase in refinance activity which has been slowing since the end of 2015. 
Overall the nature of the mortgage market is changing with higher interest rates and a fresh round of macroprudential controls recently implemented. The next few months should provide insight into whether these tools can ultimately slow some of the current exuberance being shown by investors.
Cameron Kusher is research analyst for CoreLogic. You can contact him <a href="https://blog.corelogic.com.au/about/">here</a>.
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ckusher-ujnxiKuFQs

Investor lending slows in February before the APRA crackdown was announced

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Each fortnight I update my chart of the titles registry figures for Queensland, although I don't post the results here all that often.
When figures aren't seasonally adjusted, it pays to be wary of drawing conclusions from individual weeks or months of data. 
After all how many times have new home sales figures "peaked" in this cycle, or how may times has housing finance "tanked", or buying intentions "cratered", or consumer confidence been "smashed", and so on?
Every other month in each case, pretty much. 
By drilling trendlines through the titles registry figures you can see that Queensland's mortgage and transfers market has ground its way through a long, slow recovery since bottoming around late 2011. 
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<div> </div>
<div>There was a blip in activity following APRA's initial salvo of macroprudential measures - and part of the increase in activity relates to a surge in multi-unit construction - but for now the uptrend in activity remains in place. </div>
 <div>Brisbane land values rise</div>
<div> </div>
<div>The Queensland Government updated its annual land valuations for 2017 last week, which showed a very wide range of outcomes across the state. The post-2012 malaise continues apace across many of the resources regions. There was more excruciating news for Gladstone which recorded another massive 20.6 per cent drop in median land values (although the Mayor kindly noted that residents shouldn't expect a reduction in their rates bill). Over the past four years Gladstone land values have recorded losses of -5.4 per cent, -14.6 per cent, -4.8 per cent, and -20.6 per cent respectively. Brutal, with land prices declining to just $113,000, Dwelling prices have often seen drops of well over 50 per cent since 2012, and in many case rents have fallen by at least an equivalent amount. The news wasn't much brighter in Mackay which racked up a third year of declines, and the Central Highlands saw land values fall for a fourth year, while Rockhampton saw land prices fall by 8.7 per cent from the preceding valuation date. Townsville has also recorded moderate declines across the last five years. There were bright spots, though, with the Gold Coast recording another year of recovery, and land prices notching up solid gains in Brisbane City Council (BCC), with the usual variances at the suburb level.</div>
<div> </div>
<div>
<a href="https://www.propertyobserver.com.au/images/2017/03/15/A1.jpg" target="_blank">Click to enlarge</a> <div class="separator"><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/2017/03/15/A1.jpg" alt=""></div>
 It is wise to exercise caution in interpreting suburb level median land values, not least because the Queensland Government rather likes to see those rateable land values rising for all-too-obvious reasons (though rates aren't based only on land valuations, the Government assures us!). Changes in land use resulting from the BCC 2014 City Plan may also potentially skew the results in suburbs with increasing multi-unit development, for example. Nevertheless, the figures are well worth a look, for the Valuer-General's figures logically cannot diverge too far from the reality over the long run. Residential land values increased across some 132 Brisbane suburbs over the past year according to the 2017 report, although there were some declines in commercial and industrial valuations on the city fringe, according to the Valuer-General. Over the past couple of years the greatest dollar value increases have largely been seen in the inner suburbs where land values are highest. The following suburbs, for example, saw their median residential land values increase by $100,000 or more in only two years: New Farm, West End, Windsor, Wooloowin, Newmarket, Holland Park, Albion, Kedron, Annerley, Wilston, Carina Heights, and Carindale. A vast wave of Chinese money has also seen Sunnybank and Sunnybank Hills notch outlandish increases in land values since 2014, the pocket known as Brisbane's "Little Asia".</div>
<div> </div>
<div>
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 The largest two-year gains in percentage terms have been driven by a popular school catchment, however. Suburbs located within the Mansfield State High School (SHS) catchment saw land prices rise by between 37 and 43 percent over the two-year period, including in the suburb of Mansfield itself, Wishart, Mackenzie, and Upper Mount Gravatt. </div>
<div> </div>
<div>
PETE WARGENT is the co-founder of <a href="https://allenwargent.com/">AllenWargent</a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/">blogger</a>.
His latest book is <a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx">Four Green Houses and a Red Hotel</a>.
</div>
</div>
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The good and the ugly behind Queensland's recovery: Pete Wargent

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GUEST OBSERVER
Housing finance
Home loans: The number of loans (commitments) for budding home owners (owner-occupiers) rose by 0.5 percent in January, the third consecutive rise. But the increase was wholly due to a 5.0 percent lift in refinancing.
The value of loans (owner occupier and investment) rose by 1.5 percent in January. Owner-occupier loans fell by 0.2 percent but investment loans rose by 4.2 percent. Non-bank lending up: The number of loans by non-bank lenders rose by 4.7 percent in January after a 6.2 percent lift in December – the strongest back-to-back gain in 32 months.
What does it all mean?
There is a lot of information contained in the Housing Finance publication. Actually so much information that it can prove confusing. In the latest month, budding home owners (owner-occupiers) took out fewer loans to build homes or buy new or existing homes. There were more loan commitments in the month, but only because more people chose to refinance existing loans.
Refinancing had fallen for three straight months, so the lift in loans was from 16-month lows. The lift in refinancing may serve to boost the purchasing power of consumers, and thus support growth of the broader economy.
There were actually fewer loans taken out by those looking to build their dream homes. Loans to budding home builders have fallen for four of the last five months. But once investors are added in, construction loans are still healthy, up almost 10 percent on a year ago. If these commitments are actually drawn down, then more new dwelling projects will be started in coming months.
Home building does appear to have peaked but the lift in construction loans suggests a soft landing lies ahead.
Investors remain active in the housing market with the value of loans at 20-month highs. Investor loans are actually up 27.5 percent on a year ago, the fastest growth in 29 months.
The risk is that regulators may seek to apply further measures to slow down the pace of investor home loans.
Borrowers in many states are taking out smaller home loans than a year ago. That is despite home prices still generally rising and despite interest rates being lower than a year ago. The more conservative lending posture will encourage the Reserve Bank.
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<img src="https://www.urban.com.au/images/2017/03/12/image003.png" alt="">
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What do the figures show?
Housing finance - number
The number of loans (commitments) for budding home owners (owner-occupiers) rose by 0.5 percent in January after rising 0.2 percent in December and rising by 1.4 per cent in November. Excluding the refinancing of dwellings, the number of loans was down by 1.7 percent.
 The number of new home loans was up by 1.9 percent on a year ago (excluding refinancing, up 4.6 percent).
Loans by owner-occupiers for the construction of homes fell by 1.4 percent in January. Loans to buy newly-erected dwellings fell by 2.3 percent.
Loans for the purchase of established dwellings (excluding refinancing) fell by 1.9 percent.
The number of refinancing transactions rose by 5.0 percent.
Lending across states/territories: NSW (+1.3 percent); Victoria (+1.6 percent); Queensland (+1.6 percent); South Australia (+4.4 percent), Western Australia (+0.3 percent); Tasmania (-2.5 percent); Northern Territory (-5.3 percent); ACT (+1.9 percent).
HOUSING FINANCE - VALUE
The value of new housing commitments (owner occupier and investment) rose by 1.5 percent in January – the fifth straight gain. Owner-occupier loans fell by 0.2 percent but investment loans rose by 4.2 percent.
The value of loans by owner-occupiers and investors to build new homes rose by 9.7 percent in January after falling by 10.2 percent in December and rising 15.4 percent in October. The value of loans stood at $3.04 billion, down from the record high of $3.32 billion in the year to March. 
HOUSING FINANCE – OTHER STATISTICS
The proportion of first-time buyers in the home loan market eased from 13.8 percent to 13.4 percent in January (long-term average 19.4 percent).
The proportion of fixed rate loans rose from 14.6 percent to a 9-month high of 15.2 percent in January. And the average home loan across Australia stood at $363,600 in January, down 3.2 percent in the month and down 0.4 percent on a year ago.
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WHAT IS THE IMPORTANCE OF THE ECONOMIC DATA?
Housing Finance data is produced monthly by the Bureau of Statistics and shows commitments by lenders, such as banks, to provide finance for housing purposes. The lending figures relate to those looking to buy or build homes to live in as well as those seeking to buy or build homes for investment purposes. Generally people get their finance organised first, so the figures are regarded as a leading indicator on the housing market.
WHAT ARE THE IMPLICATIONS FOR INTEREST RATES AND INVESTORS?
Regulators will keep a close eye on home loan trends. The revival of investor lending could lead to fresh controls over new lending. But it is also worth pointing out that non-bank lenders seem to have been more active in the past two months which may provide complications in containing investor exuberance.
While investors are more active in the housing market, budding home owners are more circumspect with the value of owner-occupier lending just 1.9 percent higher than a year ago.
The lift in home loan refinancing is positive for consumer-focussed companies.
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Craig James is the chief economist at <a href="https://www.comsec.com.au/default.aspx" target="_blank">CommSec</a>.
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jchancellor-FAypfDUnLy

More home loan refinancing, investors still active: Craig James

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GUEST OBSERVER
The Australian Bureau of Statistics (ABS) released lending finance data earlier today and when it is paired with the earlier housing finance data release, the figures provide insight into the value of mortgage lending over the month in each state and territory. 
Over recent months investor demand for mortgages has been trending higher and this is being largely driven by resurgent investor demand in New South Wales and Victoria. 
Of course the capital cities of these two states have consistently recorded the strongest value growth of all capital cities over the past five years and also have the lowest rental returns.
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The data analysed is based on the value of mortgage finance commitments. 
Given this it is important to consider that more expensive markets (such as NSW) will tend to result in borrowers taking out larger mortgages whereas borrowers in more affordable markets will generally take out smaller mortgages.  More than half of all the mortgage lending to investors in November 2016 was lent in New South Wales and with a further 24.5 percent in Victoria, three quarters of all mortgage lending to investors occurred in the two most populous states.
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Looking only at new lending (that is excluding refinances) investors accounted for 56.7% of the value of lending in New South Wales in November 2016.  Looking over the past four years, the value of new lending to investors in New South Wales has been greater than new owner occupier lending for 42 of the past 48 months. 
Victoria was previously seeing slightly more than 50% of new lending to investors but was recorded at 45.0% in November 2016.  Across the remaining states and territories, the proportion of total new lending to investors in November 2016 was recorded at: 39.7% in Queensland, 37.1% in South Australia, 31.0% in Western Australia, 26.1% in Tasmania, 40.3% in the Northern Territory and 38.7% in the Australian Capital Territory.
It’s clear that demand for mortgages from the investor segment is picking up, particularly in New South Wales and Victoria, which are proxies for Sydney and Melbourne respectively.  With a low cost of borrowing and many owner occupiers having seen substantial increases in housing equity in Sydney and Melbourne over the past 4.5 years it is easy to understand why investor demand is rising. 
On the other side of things, you have a value growth phase that has now run for 4.5 years, largely focussed on two major cities and rental returns at historic low levels in these cities.  Investors should be considering the potential risks, especially as housing supply is responding and that the value growth phase is now quite mature.  While many have seen a substantial increase in the value of properties and may continue to do so, at some point growth will slow. 
With record low yields, slow rental growth and additional housing supply entering the market over the coming years, if investors need to start relying on rental returns rather than increase in the asset value, boosting those returns is likely to prove difficult.
Cameron Kusher is research analyst for CoreLogic. You can contact him <a href="https://blog.corelogic.com.au/about/">here</a>.
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New lending to investors in NSW has accounted for more than half of all new lending for 42 of the past 48 months: Cameron Kusher

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<div>GUEST OBSERVER</div>
<div> </div>
<div>I recently wrote here how it looked as though new home finance had shaped into quite a neat double top formation.</div>
<div> </div>
<div>In November, finance for new owner-occupier purchases increased a bit, but overall the trendline does suggest that a second peak is forming. </div>
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 The slight rebound ties in with the rebound in new home sales in the month, previously noted <a href="https://petewargent.blogspot.co.uk/2017/01/new-home-sales-rebound" target="_blank">here</a>. Mainly investors buying new It's often said that investors mainly invest in established housing, with charts produced to prove it. 
<div>Of course, with the total dwelling stock only increasing by less than 2 per cent over the year to September 2016 to 9.76 million, it stands to reason that most investors will buy established - there just aren't that many new properties in any given year. </div>
<div> </div>
<div>I have been more interested to know what percentage of the new housing stock was purchased by owner-occupiers, but nobody I have asked seems to know (or even care about) the answer.</div>
<div> </div>
<div>The housing finance figures show that owner-occupiers financed the construction of only 68,200 homes and the purchase of just 31,490 dwellings. </div>
<div> </div>
<div>What the housing finance figures don't capture is that some owner-occupier buyers of new homes are cash buyers. But nevertheless, it's clear that largely the buyers of new dwellings are investors, albeit many of them from overseas.</div>
<div> </div>
<div>PETE WARGENT is the co-founder of <a href="https://allenwargent.com/" target="_blank" rel="nofollow">AllenWargent</a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank" rel="nofollow">blogger</a>. </div>
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New housing finance is topping out: Pete Wargent

cjames-5S2v74qSNK

New South Wales top for dwelling starts: CommSec's Craig James

Housing finance above decade averages in six states and territories: CommSec's Craig James

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<img src="https://counter.theconversation.edu.au/content/67056/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1">
GUEST OBSERVER
The Reserve Bank of Australia (RBA) sees housing finance as a smaller danger than in the past, judging by its latest Financial Stability Review, but we aren’t back to happy days just yet.
A number of economic indicators still show there’s cause for concern in the property market. 
The review does acknowledge some problems in the apartment markets in Brisbane and Melbourne, but it sees major threats to the resilience of the Australian financial system overseas: examples are the rising debt levels in China, the low performance of European banks, the Brexit, and the impact of low milk prices on New Zealand farmers (with a possible feedback effect to Australian banks).
The review highlights Australian banks’ stronger capital buffers and compliance with toughened prudential standards from the Australian Prudential Regulation Authority (APRA). Because house price growth has moderated and mortgage borrowers are substantially ahead of their scheduled payments, the risk from mortgage lending is somewhat lower. 
However, it’s surprising that the review doesn’t stress some aspects that are obvious.
What the RBA didn’t say
Although Australia hasn’t experienced the type of shock to the economy the United States did, due to the sub-prime mortgage crisis, there is substantial risk due to a large portion of mortgage loans being subject to interest-only periods of typically five years. Research for US home equity lines of credit finds the risk that people won’t be able to pay mortgage expenses increases substantially towards the end of flexible repayment terms, in particular during times of increasing lending standards.
Mortgage borrowers often have the expectation that they are able to refinance at the end of the interest-only term into a similar loan with a new interest-only period. However, this rollover is not possible in economic downturns when banks suddenly tighten their lending standards and and are likely to cut refinancing. 
The RBA’s review shows that Australian banks have tightened their lending standards and have room for further tightening, but currently we do not see larger impacts on delinquencies. Current rates of people not being able to make their mortgage payments are low but may quickly change in an economic downturn. It’s also difficult to forecast whether this will change judging by medium- to long-term trends. 
There might be other reasons why people might struggle to make their mortgage repayments. We have seen central banks following the European and US central banks in lowering interest rates and markets are expecting a reversal in the future. As most mortgage loans in Australia are at a floating rate this would imply that the largest relative payment increase will be to interest-only loans, should the RBA follow these leads. 
In addition to this, Australia continues to enjoy low unemployment rates. This may change and lower the average income levels, putting more stress on people’s ability to pay mortgage loans.
Other risk factors at play in the property market
House prices continue to grow at annualised rates of approximately 10.2% and 9% in the largest cities Sydney and Melbourne. Housing price growth has slowed down, but prices are still increasing and new mortgages are underwritten based on house prices that are disengaged with national income levels. The growth rate continues to be above the historic averages and other developed economies that have experienced similar rate cuts.
Banks have relatively reduced interest only loans and high loan to valuation ratio (LVR) style loans. However, it is also clear that origins of high risk mortgages continue at relative high levels. 
Australian Prudential Regulation, new mortgage loans for ADIs with greater than $1 bn of term loans
The fraction of interest-only loans has come down from 44% in December 2014 to 36% in March 2016. While this is a noticable decrease, more than a third of loans continue to be interest-only.
The RBA’s review argues that Australian mortgage borrowers are on average approximately two and a half years ahead of the scheduled payments. This argument does not take interest-only loans into account. 
Prepayments are generally made into offset accounts which include a redraw facility and are generally used when new properties are used. In other words, these prepayments may be quickly depleted to increase leverage but also in situations when borrowers have difficulties making payments. 
Dominance of housing loans on bank books
The largest problem of Australian banks remains the dominance of housing loans on bank books. Approximately 60% of total loans are for residential properties, and 36% of loans are business loans dominated by commercial real estate loans and loans to small and medium sized companies, which are often backed by the real estate of the business owner. 
This over-concentration is the Achilles’ heel of the Australian banking system and hard to protect against. It’s a reflection of demand for bank loans in Australia and alternatives to bank lending available to large firms. 
International financial markets may provide a solution, allowing banks to diversify and risk transfer via asset risk swaps. Unfortunately, these solutions have not been explored much in the past . The reluctance to do this is mostly based on the poor performance of overseas assets during the global financial crisis.
The RBA’s review further discusses the achievements under the Basel Committee on Banking Supervision to limit the systemic risk of financial institutions via increased regulation and higher capital buffers. The review further notes that no Australian bank is of global systemic importance. 
However this is not a reason for complacency as the failure of one of the largest Australian banks would lead to a great shock to the Australian economy. A further concentration in the banking industry would make bank products more expensive than they would be in a competitive system.
Harry Scheule is associate professor, Finance, UTS Business School, University of Technology Sydney and author for The Conversation. He can be contacted <a href="https://theconversation.com/profiles/harry-scheule-3573" target="_blank">here</a>.
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