<p>Longstanding Gold Coast and Canberra developer <a href="https://www.apartments.com.au/developers/morris-property-group">Morris Property Group</a> is continuing to roll on with its Glitter Strip apartment pipeline, seeking to return to Mermaid Beach with a new 68-apartment development.</p>

<p>Morris, founded by Barry Morris in 1978 and one of the Gold Coast’s most prolific apartment developers over the past two decades, has filed plans for a 12-storey mixed-use building at <a href="https://www.apartments.com.au/new-apartments/36-seabeach-avenue-mermaid-beach-qld-4218">34-36 Seabeach Avenue</a>, on the prized eastern side of the Gold Coast Highway.</p>

<p>The 1,227 sqm site occupies a prominent corner position at Seabeach Avenue and the Gold Coast Highway, opposite the Mermaid Plaza retail and office precinct and around 140 metres walking distance from the future Mermaid Beach South light rail station.</p>

<p><a href="https://www.apartments.com.au/architects/fraser-partners-0">Fraser &amp; Partners</a> has designed the project, which will comprise 68 apartments across a mix of 48 two-bedroom and 20 three-bedroom residences.</p>

<p>The building will rise 12 storeys, reaching a maximum height of 36 metres, with the apartments accounting for a total of 156 bedrooms. The development application also seeks approval for short-term accommodation across the 68 apartments, while two office tenancies are proposed at ground level.</p>

<p>The plans show 108 car spaces across the development, with parking accommodated at ground level and within a three-level basement accessed from Seabeach Avenue.</p>

<p><img alt="Seabeach Avenue and the Gold Coast Highway" data-entity-type="file" data-entity-uuid="c2175c99-12fd-4a3c-9be1-89bbf258a90d" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-20%20at%202.59.41%E2%80%AFPM_0.png?VersionId=iNLzWcE6gaAE76rafhEXfHve.4g4Se0p" /></p>

<p>Resident amenity will be concentrated on level two, where Fraser &amp; Partners has designed a recreation deck with a swimming pool, 90 sqm pool terrace, outdoor barbecue area and gym.</p>

<p>The broader communal offering will also incorporate landscaped spaces, with the planning documents noting the amenity has been designed to provide areas for recreation, social interaction and outdoor living.</p>

<p>The proposal would continue the transformation of the Gold Coast Highway corridor through Mermaid Beach ahead of the arrival of the light rail.</p>

<p>The site is zoned Neighbourhood Centre and sits within the Mermaid Beach/Broadbeach Light Rail Corridor neighbourhood plan. While the prescribed building height is 24 metres, the site is identified within an Urban Neighbourhood context providing for a 50 per cent height uplift to 36 metres.</p>

<p>Planning documents describe the stretch of the Gold Coast Highway between Broadbeach and Nobby Beach as increasingly characterised by medium and high-rise development, with the proposed Morris tower joining projects including Ventura, The Alfred, Oceans and Otto.</p>

<p><img alt="Seabeach Avenue and the Gold Coast Highway" data-entity-type="file" data-entity-uuid="911f193f-e381-4a55-be08-58be87fcf978" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-20%20at%202.59.48%E2%80%AFPM.png?VersionId=oxVvLJaY.SOXEdXrIcogfyEXDfvCmmpM" /></p>

<p>The development would mark Morris Property Group's latest investment in Mermaid Beach, where it has already delivered two apartment projects.</p>

<p>Otto, at 1 Bondi Avenue on the western side of the Gold Coast Highway, comprises 70 apartments across nine storeys. The project was completed in 2019 and includes a residents' gym, recreation deck and swimming pool.</p>

<p>Morris also developed Oceans at 46 Ocean Street, a nine-storey, 70-apartment build-to-rent development completed in 2019. Oceans was the group's first build-to-rent project and incorporates commercial space at ground level.</p>

<p>The two existing Morris projects sit further north along the same Gold Coast Highway corridor as the proposed Seabeach Avenue development. Fraser &amp; Partners' planning analysis specifically identifies both Otto and Oceans among the established built-form precedents surrounding the site.</p>

<p><img alt="Seabeach Avenue and the Gold Coast Highway" data-entity-type="file" data-entity-uuid="14925119-7b71-4812-8149-340317512c7c" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-20%20at%203.00.15%E2%80%AFPM.png?VersionId=aEJqYuw_nTCjcin17BSD0piB1EFotTlj" /></p>

<p>Mermaid Beach represents only part of Morris' considerable Gold Coast footprint.</p>

<p>The family-owned developer has been particularly active in neighbouring Broadbeach, delivering projects including Sierra Grand, Eclipse, Synergy, Qube, Koko, Opus and Malo, while its current pipeline includes Maison and the two-tower Crest development.</p>

<p>Further south, Morris has also developed a string of projects in Burleigh Heads, including Element, Boardwalk and Sandbar, while Essentia expanded its footprint north into Surfers Paradise.</p>

<p>The Seabeach Avenue application has been lodged by PMM Broadbeach Pty Ltd and seeks a development permit for a Material Change of Use for multiple dwellings, short-term accommodation and office uses. Zone Planning Group prepared the planning application, with Fraser &amp; Partners commissioned as architect.</p>

<p>The project comes as the developer continues to expand its Gold Coast pipeline while retaining a significant presence in Canberra. Morris now has more than $2.5 billion of development in its national pipeline and has delivered more than 7,000 homes during its near five-decade history</p>


Joel Robinson

First look: Morris Property Group returns to Mermaid Beach with new Seabeach Avenue apartment development

<p><a data-saferedirecturl="https://www.google.com/url?q=https://www.apartments.com.au/developers/fortis&amp;source=gmail&amp;ust=1787272340808000&amp;usg=AOvVaw3hvFB2uWTRfEyEcpTSnnK9" href="https://www.apartments.com.au/developers/fortis" target="_blank">Fortis</a>&nbsp;is continuing its stronghold on Sydn​ey’s eastern suburbs apartment market, launching&nbsp;in September&nbsp;its latest boutique&nbsp;<a data-saferedirecturl="https://www.google.com/url?q=https://www.apartments.com.au/developments/double-bay-nsw-2028&amp;source=gmail&amp;ust=1787272340808000&amp;usg=AOvVaw0GI5S9-wNeiLUnM-d1uYkw" href="https://www.apartments.com.au/developments/double-bay-nsw-2028" target="_blank">Double Bay</a>&nbsp;development,&nbsp;<a data-saferedirecturl="https://www.google.com/url?q=https://www.apartments.com.au/new-apartments/55-william-double-bay-55-william-street-double-bay-nsw-2028&amp;source=gmail&amp;ust=1787272340808000&amp;usg=AOvVaw2YNouJQcFjiTTgVHbgDLA-" href="https://www.apartments.com.au/new-apartments/55-william-double-bay-55-william-street-double-bay-nsw-2028" target="_blank">55 William</a>.</p>

<p>55 William presents&nbsp;just eight north-facing&nbsp;two-bedroom, three-bedroom and full-floor&nbsp;residences to the market, priced from $4.5 million.</p>

<p>The upcoming launch comes just weeks after Fortis secured approval for the $80 million development, its third eastern suburbs approval in two months. Construction is already underway, with completion targeted for 2028.</p>

<p>[smartcode_project:default project_id=152579 project_image_fid=376250]</p>

<p>55 William adds to a growing concentration of Fortis projects in and around Double Bay, a market the developer has become increasingly active in over recent years.</p>

<p>Fortis previously completed the nine-residence Marmont on New South Head Road, while it is currently developing a mixed-use residential and retail project at 12 Cross Street. Its wider Double Bay footprint also extends into commercial and retail development.</p>

<p>The developer's broader Sydney residential pipeline is particularly concentrated across the eastern suburbs, with projects spanning Doub​le Bay, Ro​se Bay, Wo​ollahra, Dar​ling Point, Poi​nt Piper and Eli​zabeth Bay.</p>

<p>[smartcode_project:default project_id=152579 project_image_fid=376253]</p>

<p>At 55 William, Fortis has again turned to MHN Design Union, the architecture practice behind several of its eastern suburbs projects, while London-based 1508 London has been appointed to handle the interiors and Wyer &amp; Co the landscaping.</p>

<p>The six-level building will comprise a combination of two and three-bedroom apartments, including a garden residence, full-floor apartments, a sub-penthouse and penthouse. Each residence will have secure basement parking and private outdoor space.</p>

<p>A rooftop terrace for all residents, along with select apartments, enjoys views across Double Bay Harbour and toward the Sydney skyline.</p>

<p>Ceiling heights will reach up to three metres&nbsp;in select residences, while the kitchens will feature natural stone and integrated Gaggenau appliances.</p>

<p>&nbsp;</p>

<p>&nbsp;</p>

<p>The boutique nature of the project reflects the type of stock Fortis has increasingly targeted across Sydney's eastern suburbs, where larger apartments and smaller buildings are being pitched primarily toward local owner-occupiers and downsizers.</p>

<p>Fortis Group General Manager Ed Eve said the developer continues to see demand from buyers wanting to remain in the eastern suburbs but move into newer, lower-maintenance housing.</p>

<p>“We're seeing continued demand from local owner-occupiers and downsizers looking for high-quality homes that allow them to remain in the eastern suburbs, close to the lifestyle and community they know,” Eve said.</p>

<p>55 William is also one of the early projects to respond directly to the NSW Government's Low and Mid-Rise Housing reforms. Fortis had previously secured approval for just two townhouses on the 599 sqm site before revising the scheme to eight apartments following the planning changes.</p>

<p style="text-align:start">Situated one street back from Double Bay's water's edge, the project enjoys an enviable harbourside setting within walking distance of Double Bay Village and the ferry wharf.</p>

<p>[smartcode_project:default project_id=152579 project_image_fid=376252]</p>

<p>Fortis has increasingly made the eastern suburbs a major focus of its Sydney pipeline. Beyond Double Bay, it recently completed the 14-residence Piper in Point Piper and has projects underway or planned across Rose Bay, Woollahra and Darling Point.</p>

<p>The developer recently secured approval for Verano in Rose Bay, a six-level development comprising 21 two, three and four-bedroom apartments, also designed by MHNDU.</p>

<p>55 William&nbsp;is soon to be release to the market with VIP appointments commencing early September,&nbsp;with residences priced from $4.5 million.</p>

<p>[smartcode_project_cta:default project_id=152579]</p>


Fortis continues eastern suburbs push with 55 William launch

<p>UAE-based developer Arada has unveiled plans for a $2 billion twin-tower apartment development in Broadbeach, marking its first move into Queensland as it continues its rapid expansion across Australia.</p>

<p>Arada will develop 952 apartments across two towers on a prominent site opposite the Gold Coast Convention and Exhibition Centre, with the project targeted for completion ahead of the Brisbane 2032 Olympic and Paralympic Games.</p>

<p>The project represents Arada's largest commitment to the Australian market since arriving in the country in 2024 and significantly expands a local pipeline that has now grown to eight projects and more than 5,000 homes.</p>

<p>It will also be the first major Queensland project delivered by Roberts Co since the tier-one contractor was acquired by Arada Group in 2025.</p>

<p>Plus Studio has designed the Broadbeach development, which will comprise one, two and three-bedroom apartments across two towers connected by a landscaped podium.</p>

<p>A significant resident amenity offering will include lagoon and lap pools, a gym, sauna and steam room, alongside a mist room, infrared room and salt scrub facilities. Communal terraces, private dining areas, a library, residents' lounge and work-from-home spaces are also planned. Around 1,200 sqm of retail and hospitality space will occupy the ground floor.</p>

<p>The site puts Arada in one of the Gold Coast's most active apartment markets, directly opposite the convention centre and within walking distance of Pacific Fair, The Star Gold Coast and Broadbeach's dining and retail precinct.</p>

<p>It also has immediate access to the Gold Coast light rail network and sits just a few blocks from the beach.</p>

<p>Arada Group Chief Executive Ahmed Alkhoshaibi said Broadbeach represented an opportunity for the developer to expand beyond its initial NSW pipeline.</p>

<p>“Broadbeach is a world-class address that gives us the canvas to create a community of exceptional design and lifestyle quality that genuinely enriches the daily lives of the people who call it home,” Alkhoshaibi said.</p>

<p>“This is our first development outside New South Wales, and it reflects our growing ambition to grow in key urban markets around the country.”</p>

<p>Alkhoshaibi said bringing Roberts Co into the project would give Arada greater control over the development and construction process.</p>

<p>“Delivering this project through Roberts Co, our own tier-one construction business, means we can bring the quality, pace and accountability that our buyers expect.”</p>

<p>The move into Broadbeach comes as Arada accelerates its Australian expansion following its entry into the market two years ago. The developer has assembled a pipeline of eight projects comprising more than 5,000 homes, while the acquisition of Roberts Co last year gave the group its own Australian construction capability.</p>

<p>Globally, Arada has a development portfolio valued at $50 billion comprising more than 55,000 homes across the UAE, United Kingdom and Australia.</p>

<p>The Gold Coast is emerging as the next major market for the developer, with strong population growth and infrastructure spending ahead of the 2032 Games continuing to underpin significant apartment development across the coastal strip.</p>


Arada plots $2 billion Broadbeach towers in major Queensland move

<p>Sydney’s downsizer market is changing, with a growing cohort of buyers prioritising the right home over simply finding a smaller one.</p>

<p>Coronation Property Head of Sales Cam Porter says the traditional idea of downsizing does not necessarily reflect what many buyers are now looking for, particularly those moving from established family homes across Sydney.</p>

<p>Instead, he says they are increasingly becoming “right-sizers”, seeking lower-maintenance homes without sacrificing the space, amenity or quality they have become accustomed to.</p>

<p>“We are increasingly seeing buyers who are not motivated by the idea of simply moving into a smaller property,” Porter says.</p>

<p>“They are right-sizers. They want a home that is easier to manage and better connected, but they still expect generosity, quality and a floorplan that supports the way they live.”</p>

<p>It is a subtle but important distinction in a market where apartment developers are increasingly targeting established owner-occupiers.</p>

<p>[smartcode_project:default project_id=135149 project_image_fid=377495]</p>

<p>For many of these buyers, moving from a house to an apartment is not driven by a desire to dramatically reduce their living space. Instead, the appeal is in removing some of the maintenance associated with a larger home while retaining generous living areas, storage and enough flexibility to accommodate family and friends.</p>

<p>Coronation’s sales team is seeing buyers place particular importance on natural light, practical storage and additional rooms that can be used as guest bedrooms, home offices or secondary living spaces.</p>

<p>Kitchens and dining areas are also playing an increasingly important role, particularly for buyers who regularly entertain or have children and grandchildren visit.</p>

<p>[smartcode_project:default project_id=135149 project_image_fid=377494]</p>

<p>“These buyers still want their home to feel generous,” Porter says.</p>

<p>“They may want less maintenance, but they are not looking for less life.”</p>

<p>The challenge for the broader housing market is providing enough of the right stock to encourage that move.</p>

<p>While much of the discussion around Sydney’s housing shortage has centred on the number of homes being delivered, Porter says the diversity of those homes is equally important.</p>

<p>Older homeowners can remain in large family houses for longer when they cannot find an appropriate alternative in the neighbourhoods where they have built their lives.</p>

<p>“The decision is rarely as simple as wanting fewer bedrooms,” Porter says.</p>

<p>“People are weighing up their connection to a neighbourhood, the space they need for family, the quality of the home and whether it will continue to work for them over the long term.”</p>

<p>It also has implications beyond the downsizer market. Providing suitable apartments for smaller households can free up established houses for families who need the additional bedrooms and land, creating greater movement through the housing market.</p>

<h2>Lillian targets the next stage of apartment buyer</h2>

<p>It is a buyer Coronation is targeting at <a href="https://www.apartments.com.au/new-apartments/lillian-erskineville-9-metters-street-erskineville-nsw-2043">Lillian</a>, its new collection of apartments, terraces and penthouses at Erskineville Village.</p>

<p>Designed by Silvester Fuller, Lillian has been shaped around larger living spaces, natural light and flexible floorplans, alongside landscaped areas, wellness amenity and communal spaces for residents.</p>

<p>The development will form part of Coronation’s broader Erskineville Village precinct, which will combine new homes with green space, retail, hospitality and new pedestrian connections.</p>

<p>[smartcode_project:default project_id=135149 project_image_fid=377688]</p>

<p>McPherson Park will sit at the centre of the precinct, creating a significant new green space alongside the project’s retail and hospitality offering.</p>

<p>For Porter, the opportunity is to give buyers another housing option without forcing them to leave the part of Sydney they already know.</p>

<p>“People should be able to change the type of home they live in without having to change their entire life,” he says.</p>

<p>“For many buyers, Lillian offers the opportunity to remain connected to the Inner West and the city, while gaining access to a more convenient, walkable and considered way of living.”</p>

<p>[smartcode_project:default project_id=135149 project_image_fid=377687]</p>

<p>Coronation will explore the changing <a href="https://lillianresidences.com.au/news/lillian-x-space-x-downsizers-event-27-august/">right-sizer market at an event on August 27</a>, bringing together experts across property, design and lifestyle.</p>

<p>Held in partnership with SPACE, Poliform and Downsizer.com.au, the event will include a property market outlook from economist Michael Blythe alongside discussion around the considerations facing buyers planning their next move.</p>

<p>Attendees will also be able to learn more about the residences and amenity planned at Lillian Erskineville.</p>

<p>[smartcode_project_cta:default project_id=135149]</p>


From downsizing to right-sizing: What Sydney buyers want from their next home

<p>Family-owned builder and developer <a href="https://www.apartments.com.au/developers/omaya">Omaya</a> is bringing its 27-storey The Maybelle development to market, with the 229-apartment tower rising alongside Ismay Reserve near North Strathfield.</p>

<p><a href="https://www.apartments.com.au/new-apartments/the-maybelle-21-parramatta-road-homebush-nsw-2140">The Maybelle</a> will comprise one, two and three-bedroom apartments, with its height providing elevated outlooks towards the Sydney skyline and Harbour Bridge, while other residences will look across neighbouring Ismay Reserve.</p>

<p>Designed by <a href="https://www.apartments.com.au/architects/squillace-architects">Squillace Architects</a>, the tower combines its parkside setting with proximity to the established retail, dining and transport amenity around North Strathfield.</p>

<p>[smartcode_project:default project_id=134873 project_image_fid=376196]</p>

<p>Residences will feature open-plan living spaces and a choice of two interior schemes, while communal amenity is spread across two elevated levels of the building.</p>

<p>Level 8 will be home to the Garden Pavilion, a full-floor resident space incorporating communal entertaining and breakout areas, seating and recreation spaces. Further up the tower, a landscaped Sky Terrace on Level 14 will provide another communal area with panoramic views towards the Harbour Bridge and Sydney skyline.</p>

<p>At ground level, the development sits directly alongside Ismay Reserve, where lawns, walking paths, children's play areas, picnic spaces and recreational facilities extend the green space available immediately around the project.</p>

<p>[smartcode_project:default project_id=134873 project_image_fid=376194]</p>

<p>The Maybelle is also within walking distance of North Strathfield and the Bakehouse Quarter, which provides a mix of cafés, restaurants, shops and everyday services.</p>

<p>Existing rail and bus services provide connections across Sydney, while the future North Strathfield Metro and access to the M4 will add to the transport options available around the precinct. Walking and cycling routes also extend via Powells Creek towards Sydney Olympic Park and its sporting, entertainment and parkland precincts.</p>

<p>Families are also well positioned for access to a broad selection of established schools and education options across Strathfield and the surrounding Inner West.</p>

<p>[smartcode_project:default project_id=134873 project_image_fid=376181]</p>

<p>Omaya has operated in Sydney for more than 35 years, managing projects from acquisition and design through to construction and delivery. The family-owned company is both developer and builder of The Maybelle.</p>

<p>Apartments start from $560,000, with the development protected by 10-year Latent Defects Insurance.</p>

<p>Construction is well underway, with completion expected by the end of 2026 and move-in anticipated from Q1 2027.</p>

<p>[smartcode_project_cta:default project_id=134873]</p>


The Maybelle brings 27-storey parkside tower to market near North Strathfield

Housing Loans

<html><body><div class="page" title="Page 1">
<div class="section">
<div class="layoutArea">
<div class="column">GUEST OBSERVER</div>
<div class="column"> </div>
<div class="column">The number of loans (commitments) for budding home owners (owner-occupiers) rose by 0.9 percent in November after falling by 0.6 percent in October. It was only the second rise in lending in five months. </div>
<div class="column"> </div>
<div class="column">The value of loans rose by 2.2 percent in November with owner loans up 0.4 percent and investor loans up 4.9 percent.</div>
<div class="column">
<br>The ANZ/Roy Morgan consumer confidence rating eased from four-month highs, falling by 0.7 per cent to 119.3 in the week to January 15. Confidence is up 4.6 per cent over the year and well above the average of 113.1 since 2014.</div>
<div class="column">
<br>The inflation expectation 2 years ahead was at 4.6 per cent, a 13-month high. Inflation expectations has now held above 4 per cent for the past 5 months.</div>
<div class="column">
<br>The Bureau of Statistics (ABS) reported that new vehicle sales rose by 0.3 per cent in December. The CommSec Luxury Vehicle index hit record highs in 2016 with sales of 17 luxury marques up 12.1 percent on a year ago. </div>
<div class="column"> </div>
<div class="column"><a href="https://www.propertyobserver.com.au/images/2017/01/17/Screen%20Shot%202017-01-17%20at%202.26.13%20PM.png" target="_blank">Click to enlarge</a></div>
<div class="column"><img src="https://www.urban.com.au/images/2017/01/17/Screen%20Shot%202017-01-17%20at%202.26.13%20PM.png" alt=""></div>
<div class="column">
<div class="page" title="Page 1">
<div class="section">
<div class="layoutArea">
<div class="column">
<p>On its own, the lift in home loans doesn’t look overly concerning – especially given it was only the second rise in the past five months. But couple it with the lift in home prices in the latter part of last year and it suggests that the housing landscape may continue to cause policymakers a little bit of angst over 2017. Even more so when you delve a bit deeper into the data and realise that the lift in the value of loans was largely driven by investors.</p>
<p>The value of loans by investors surged by 4.9 per cent in November to be up 21.4 over the year – the strongest annual growth in 19 months.</p>
<p>If home prices continue to lift, with growth largely driven by investor loans, regulators may look at further restrictions to curb lending.</p>
<p>Household confidence remains just shy of recent four month highs. And more importantly confidence is holding well above longer-term averages. In particular, the measure of whether it was a good time to buy a major household item lifted to the highest levels in five months. No doubt the discounts offered by retailers post-Christmas are enticing households to spend a little bit more freely. </p>
<p>Interestingly the inflation expectation 2 years ahead was at 4.6 per cent in the past week - a 13-month high. Inflation expectations have now held above 4 per cent for the past 5 months. There is no doubt that inflationary pressures have bottomed out and are likely to start lifting.</p>
<p>Annual new vehicle sales are just shy of recent record highs, suggestive of underlying strength in business and consumer sentiment and finances. But the trends aren’t uniform with sales of sports utility vehicles consistently setting new highs while passenger car sales have now fallen to 20- year lows in rolling annual terms. </p>
</div>
<div class="column">
<div class="page" title="Page 2">
<div class="layoutArea">
<div class="column"><a href="https://www.propertyobserver.com.au/images/2017/01/17/Screen%20Shot%202017-01-17%20at%202.27.18%20PM.png" target="_blank">Click to enlarge</a></div>
<div class="column"> </div>
<div class="column"><img src="https://www.urban.com.au/images/2017/01/17/Screen%20Shot%202017-01-17%20at%202.27.18%20PM.png" alt=""></div>
<div class="column"> </div>
<div class="column">What do the figures show?</div>
<div class="column"> </div>
<div class="column">Housing finance - number</div>
<div class="column"> </div>
<div class="column">The number of loans (commitments) for budding home owners (owner-occupiers) rose by 0.9 per cent in November after falling by 0.6 per cent in October. It was only the second rise in lending in five months. Excluding the refinancing of dwellings, the number of loans was up by 2.1 per cent.<br><ul>
<li>  The number of new home loans was down by 2.6 per cent on a year ago.</li>
<li>  Loans by owner-occupiers for the construction of homes rose by 2.3 per cent in November.</li>
<li>  Loans to buy newly-erected dwellings rose by 3.3 per cent.</li>
<li>  Loans for the purchase of established dwellings (excluding refinancing) rose by 2.0 per cent.</li>
<li>  The number of refinancing transactions fell by 1.2 per cent.</li>
</ul>
<p>Lending across states/territories in November: NSW (+1.5 per cent); Victoria (+0.8 per cent); Queensland (+2.4 per cent); South Australia (-1.3 per cent), Western Australia (-0.7 per cent); Tasmania (-1.0 per cent); Northern Territory (+2.7 per cent); ACT (+0.2 per cent).</p>
<p>Housing finance - value</p>
The value of new housing commitments (owner occupier and investment) rose by 2.2 per cent in November after rising by 0.5 per cent in October. Owner-occupier loans rose by 0.4 per cent but investment loans rose by 4.9 per cent.<br><p>The value of loans by owner-occupiers and investors to build new homes rose by 14.2 per cent in November after falling by 1.7 per cent in October. The value of loans to build new homes rose to an 8-month high of $3.07 billion in November.</p>
<p>Housing finance – other statistics</p>
<p>The proportion of first-time buyers in the home loan market rose from 13.7 per cent to 13.8 per cent in November (long-term average 19.4 per cent).</p>
The proportion of fixed rate loans eased from 12.8 per cent to 12.5 per cent in November. And the average home loan across Australia stood at $376,600 in November, up 3.6 per cent in the month but down 1.6 per cent on a year ago.</div>
<div class="column"> </div>
<div class="column"><a href="https://www.propertyobserver.com.au/images/2017/01/17/Screen%20Shot%202017-01-17%20at%202.28.24%20PM.png" target="_blank">Click to enlarge</a></div>
<div class="column"> </div>
<div class="column"><img src="https://www.urban.com.au/images/2017/01/17/Screen%20Shot%202017-01-17%20at%202.28.24%20PM.png" alt=""></div>
<div class="column">
<div class="page" title="Page 3">
<div class="layoutArea">
<div class="column">
<p><span>Consumer confidence </span></p>
<p>The ANZ/Roy Morgan consumer confidence rating eased from four-month highs, falling by 0.7 per cent to 119.3 in the week to January 15. Confidence is up 4.6 per cent over the year and well above the average of 113.1 since 2014. Two of the five components of the index rose in the latest week:</p>
<ul>
<li>  The estimate of family finances compared with a year ago was down from +13 to +8;</li>
<li>  The estimate of family finances over the next year was down from +33 to +32;</li>
<li>  Economic conditions over the next 12 months was unchanged at +2;</li>
<li>  Economic conditions over the next 5 years was up from +11 to +12;</li>
<li>  The measure of whether it was a good time to buy a major household item was up from +41 to +43 – the strongest reading in 5 months.</li>
</ul>
<p>In addition the inflation expectation 2 years ahead was at 4.6 per cent, a 13-month high. Inflation expectations has now held above 4 per cent for the past 5 months.</p>
<p>New car sales:</p>
According to the Australian Bureau of Statistics (ABS) new vehicle sales rose by 0.3 per cent in December after falling by 0.7 per cent in November. Passenger car sales rose by 3.6 per cent, while sales of sports utility vehicles fell by 3.3 per cent and sales of “other” vehicles (includes utilities, panel vans, cab chassis, goods carrying vans, rigid trucks, prime movers, non-freight carrying trucks, and buses) rose by 0.7 per cent.</div>
<div class="column">
<br>New vehicles sales were up by 0.2 per cent over the year. Passenger car sales in December were down by 4.2 per cent over the year, while SUVs sales were unchanged and “other vehicles” were up by 10 per cent.<br><p>In rolling annual terms, 1,178,133 new vehicles were sold over the 2016 calendar year. Sales of SUVs (441,023) eased from record highs in annual terms, while annual sales of “other” vehicles stood at a record high of 250,853. Sales of passenger vehicles fell to a 20-year low of 486,257 in the year to December.</p>
<p>CommSec Luxury Vehicle index</p>
The CommSec Luxury vehicle index hit record highs in 2016. Sales of 17 luxury marques totalled a record 106,658 units in 2016, up 12.1 per cent on a year ago. Luxury vehicles now account for 9.17 per cent of total vehicle sales and a record 11.50 per cent of passenger cars and SUVs alone.</div>
<div class="column">
<br>The CommSec Luxury vehicle index includes Audi, Aston Martin, BMW, Bentley, Ferrari, Hummer, Jaguar, Lamborghini, Lexus, Lotus, Maserati, Maybach, Mercedes-Benz, Mclaren, Porsche and Rolls Royce.</div>
<div class="column">
<br>In 2016 record sales were recorded by Audi, BMW, Ferrari, Jaguar, Lamborghini and McLaren.<br><p>Luxury auto sales have been running at a double-digit annual rate for almost four years.</p>
<p>What is the importance of the economic data?</p>
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.</div>
<div class="column"> </div>
<div class="column"><a href="https://www.propertyobserver.com.au/images/2017/01/17/Screen%20Shot%202017-01-17%20at%202.29.25%20PM.png" target="_blank">Click to enlarge</a></div>
<div class="column"> </div>
<div class="column"><img src="https://www.urban.com.au/images/2017/01/17/Screen%20Shot%202017-01-17%20at%202.29.25%20PM.png" alt=""></div>
<div class="column">
<br>The ANZ/Roy Morgan weekly survey of consumer confidence closely tracks the monthly Westpac/Melbourne Institute consumer sentiment index but the former measure is a timelier assessment of consumer attitudes and is now closely tracked by the Reserve Bank.<br><p>The Australian Bureau of Statistics provides seasonally adjusted and trend estimates of industry data. The Federal Chamber of Automotive Industries releases estimates of car sales on the third business day of the month. The figures highlight the strength of consumer spending as well as conditions facing auto &amp; components companies.</p>
<p>What are the implications for interest rates and investors?</p>
<p> Looking forward, policymakers will keep a close eye on how the rebalancing of the domestic economy (away from mining investment) is keeping pace. Inflation and housing activity are likely to be closely watched over 2017. </p>
<p><em>Savanth Sebastian is an economist for <a href="https://www.commsec.com.au/" target="_blank">CommSec</a></em></p>
</div>
</div>
</div>
</div>
</div>
</div>
</div>
</div>
</div>
</div>
</div>
</div>
</div>
</div></body></html>

jchancellor-FAypfDUnLy

Investor loans soar, inflation makes a comeback: CommSec's Savanth Sebastian

<html><body>
<p>National Australia Bank has expanded its list of postcodes across Australia where lending to property buyers will be capped due to potential risks in the housing market.</p>
<p>The loan-to-valuation ratio, or the percentage of a property's purchase price a bank will lend, will be capped at 70 percent in some areas where NAB sees a higher risk, while the other blacklisted ones (called Group B), will see an 80 percent cap. </p>
<p>The second category includes inner city areas of Australia’s capital cities, according to a recent post on <a href="https://www.domain.com.au" target="_blank">www.domain.com.au</a> citing an article in the Australian Financial Review.</p>
<p>Among the expanded list, NAB has added plenty of Queensland suburbs in the Group A category where buyers will need a 30 percent deposit for a home loan. Some of the new ones in Queensland are Auburn, Mt Pleasant, Fraser Island and Apple Tree Creek.  </p>
<p>Western Australia still has a large list, with two new entrants such as Eighty Mile Beach and St George Ranges. South Australia and Northern Territory too have more postcodes blacklisted.</p>
<p>The B list, where buyers will need a 20 per cent deposit, includes inner city suburbs in Brisbane, Sydney, Melbourne, Adelaide and Perth.</p>
<p>The list for Sydney sees a few dropouts from the blacklist category such as Macquarie Park, East and North Ryde (2113), while there are some additions too such as The Ponds (postcode 2769).</p>
<p>Melbourne’s list remains the same such as the CBD, St Kilda’s and Docklands. Brisbane has more suburbs blacklisted in the second group such as Bowen Hills, Fortitude Valley and Woolloongabba.</p>
<p>“NAB takes into account a range of economic factors, and regularly monitors the performance of local markets to ensure we continue to lend responsibly and sustainably,” the article said citing a bank spokesman. </p>
<p>“We recognise that no two suburbs are the same, and there are some geographic areas across Australia which have been impacted by local economic conditions. As a responsible lender, we adopt strategies in these geographic areas that seek to reduce the risk to our customers and our business.” </p>
<p>The bank is still lending to borrowers in the named suburbs.</p>
<p>NAB’s expanded list comes soon after CEO Andrew Thorburn told a parliamentary inquiry into banking that net interest margins are being squeezed at a time when banks are facing higher capital requirements.</p>
<p>Lenders have also responded to pressure from the Reserve Bank of Australia, ASIC and APRA to reduce lending to higher risk investment borrowers, particularly for apartment markets in central Melbourne and Sydney, by cutting back on interest-only loans and increasing deposits to about 40 per cent of the asking price.</p>
<p>NAB, which has about five million customers, has previously warned it has 50 high-risk postcodes.</p>
</body></html>

jonathanchancellor-7SQnKwU6yx

Where NAB expanded its blacklisted 600 suburb list for home loans

<html><body>
<p>The number of prime Australian housing loans in arrears has risen for the fifth consecutive month, figures according to the Standard &amp; Poor’s Performance Index (SPIN) show.</p>
<p>Not by much as 1.13 percent of prime residential mortgage-backed securities (RMBS) were in arrears during March – up from 1.11 percent in February.</p>
<p>“While a decline in outstanding loan balances during the month would have affected this movement, the dollar value of loans in arrears increased, resulting in prime arrears being up overall,” S&amp;P noted.</p>
<p>The proportion of full-doc loans rose to 1.09 per ent in March from 1.07 percent a month earlier.</p>
<p>According to S&amp;P, the SPIN for low-documentation loans meanwhile fell 14 basis points in March to 4.41 percent, with part of the decline reflecting a rise of around 2 percent in outstanding loan balances,” the agency said.</p>
<p>“Low-doc loans represent around 1.3 percent of total loans outstanding that underlie prime RMBS transactions – down from a peak of 13.2 percent in January 2008.”</p>
<p>Regional banks experienced the largest decline in arrears of all loan originator types – down 13 basis points to 2.02 percent – while the major banks’ SPIN rose 7 basis points to 1.01 percent.</p>
<p>Arrears remain below their decade-long average of 1.25 percent, S&amp;P advised.</p>
</body></html>

Mortgage arrears continue slight upward trend

<html><body>
<p><span style="line-height: 1.3em;">GUEST OBSERVER</span></p>
<p><span style="line-height: 1.3em;">Lending: Total new loans (personal, business, housing &amp; lease) rose by 0.7 percent in March after a 3 per</span><span style="line-height: 1.3em;">cent rise in February. Lending was just 3.9 percent shy of the 7½-year high recorded in November 2015.</span></p>
<p>Total lending is up 1.6 percent on a year ago.</p>
<p>Within personal fixed finance commitments, loans for new cars were up by 20.4 percent on a year earlier <span style="line-height: 1.3em;">while loans for used cars were up 15.5 percent. Loans for residential blocks of land were up by 9.1 per</span><span style="line-height: 1.3em;">cent on a year ago.</span></p>
<p><a href="/images/2016/05/13/Screen%20Shot%202016-05-13%20at%2012.53.10%20PM.png" target="_blank"><span style="line-height: 1.3em;">Click to enlarge</span></a></p>
<p><span style="line-height: 1.3em;"><img src="/images/2016/05/13/Screen%20Shot%202016-05-13%20at%2012.53.10%20PM.png" alt=""> </span></p>
<p>The lending figures have implications for finance providers, retailers, and companies dependent on consumer and business <span style="line-height: 1.3em;">spending.</span></p>
<p>What does it all mean?</p>
<p>Similar to the housing finance data early this week, the lending statistics is essentially old news – pre Reserve B<span style="line-height: 1.3em;">ank interest rate cut. In fact the shift in Reserve Bank commentary to a lower inflation profile suggests that </span><span style="line-height: 1.3em;">further interest rate cuts are on the cards. And in that context very likely to support further lending not just in </span><span style="line-height: 1.3em;">housing but across the business sector as well.</span></p>
<p>The lift in borrowing across the economy in March is encouraging coming of the back of solid gains in February.</p>
<p>Overall, total lending is just shy of 7½-year highs recorded in late 2015. While lending remains healthy the hope <span style="line-height: 1.3em;">would be that business borrowings lift from here - driving investment and supporting medium term growth.</span></p>
<p>The generational low interest rates will be supportive of further borrowing – but there is no guarantee. While <span style="line-height: 1.3em;">Reserve Bank policymakers would be hoping that the latest rate cut spurs another round of activity, they would be </span><span style="line-height: 1.3em;">well aware that borrowers are cautious about taking on more debt. And lower interest rates compress bank </span><span style="line-height: 1.3em;">margins, affecting profits and potentially investment, employment and shareholder returns.</span></p>
<p>Unfortunately elections cause consumers and businesses to hold back on spending, employment and investment <span style="line-height: 1.3em;">plans, and that is the risk to the positive momentum that has built up in recent months. CommSec expects that the </span><span style="line-height: 1.3em;">low inflation outlook will result in further cuts to the cash rate. Rate cuts have been pencilled in for August and </span><span style="line-height: 1.3em;">November.</span></p>
<p>What do the figures show?</p>
<p>Lending Finance</p>
<p>Total new loans  (personal, business, housing &amp; lease) rose by 0.7 percent in March after a 3 percent rise in <span style="line-height: 1.3em;">February. Lending was just 3.9 percent shy of the 7½-year high recorded in November. Total lending is up 1.6 </span><span style="line-height: 1.3em;">percent on a year ago.</span></p>
<p>Housing finance:  The seasonally adjusted measure of construction and new purchases fell by 1.2 percent in <span style="line-height: 1.3em;">March while alterations &amp; additions rose by 0.4 per cent. Home loans are up 11.9 percent on a year.</span></p>
<p>Commercial finance : The seasonally adjusted series for the value of total commercial finance commitments rose <span style="line-height: 1.3em;">by 0.9 percent in March after rising by 4.8 per cent in February. Revolving credit commitments rose by 2.3 per</span><span style="line-height: 1.3em;">cent. Fixed lending commitments rose by 0.4 percent. Business loans are down 2.2 percent over the year.</span></p>
<p>Personal finance : The seasonally adjusted series for the value of total personal finance commitments rose by <span style="line-height: 1.3em;">6.3 percent in March after falling by 2.9 percent in February. Revolving credit commitments rose by 11.9 percent </span><span style="line-height: 1.3em;">and fixed lending commitments rose by 3 per cent. Personal loans are down 1.9 percent over the year.</span></p>
<p>Within personal fixed finance commitments, loans for new cars were up by 20.4 percent on a year earlier <span style="line-height: 1.3em;">while loans for used cars were up 15.5 percent. Loans for residential blocks of land were up by 9.1 percent on a </span><span style="line-height: 1.3em;">year ago.</span></p>
<p>Lease finance : Lending fell by 7.7 percent in March and was up 0.8 percent over the year.</p>
<p>What is the importance of the economic data?</p>
<p>Lending Finance  is released monthly by the Bureau of Statistics and contains figures on new housing, personal, <span style="line-height: 1.3em;">commercial and lease finance commitments. The importance of the data lies in what it reveals about the </span><span style="line-height: 1.3em;">appropriateness of interest rate settings, confidence and spending levels in the economy.</span></p>
<p>What are the implications for interest rates and investors?</p>
<p>At present the national economy is tracking ok. Economic growth is healthy and more encouragingly <span style="line-height: 1.3em;">unemployment is at a 2½-year low. However the concern for policymakers is that the deflationary environment </span><span style="line-height: 1.3em;">becomes more firmly entrenched in coming quarters. A sustained super low inflation landscape will lead to low </span><span style="line-height: 1.3em;">inflationary expectations over time and in turn a shift in asset allocation.</span></p>
<p>The bottom line is that underlying inflation is undershooting the 2-3 percent target band and that suggests little <span style="line-height: 1.3em;">risk in cutting rates a little further. CommSec believes there is a strong chance the Reserve Bank will cut interest </span><span style="line-height: 1.3em;">rates twice more this year, taking the cash rate to a historical low of 1.25 percent by in November.</span></p>
<p><a href="/images/2016/05/13/Screen%20Shot%202016-05-13%20at%2012.56.43%20PM.png" target="_blank"><span style="line-height: 1.3em;">Click to enlarge</span></a></p>
<p><span style="line-height: 1.3em;"><img src="/images/2016/05/13/Screen%20Shot%202016-05-13%20at%2012.56.43%20PM.png" alt=""></span></p>
<p><span style="line-height: 1.3em;"><em>Savanth Sebastian is an economist for <a href="https://www.commsec.com.au/" target="_blank">CommSec</a>.</em></span></p>
</body></html>

Personal loans drive lift in lending: CommSec's Savanth Sebastian

<html><body><div class="page" title="Page 1">
<div class="section">
<div class="layoutArea">
<div class="column"><span style="line-height: 1.3em;">GUEST OBSERVER</span></div>
<div class="column"><span style="line-height: 1.3em;"> </span></div>
<div class="column"><span style="line-height: 1.3em;">The latest lending statistics show a mild consolidation in July, although the result is not a cause for concern – especially given that lending is holding just 4% shy of the seven-year highs reached in April. </span></div>
<div class="column"><span style="line-height: 1.3em;"> </span></div>
<div class="column"><span style="line-height: 1.3em;">The real driver of lending over the past year has been the housing sector and in that context it is investor housing that has driven the strength. However the tighter bank lending standards are starting to have an impact in terms of the housing finance data - loans for construction of new dwellings has now fallen for three consecutive months.</span></div>
<div class="column">
<br><span style="line-height: 1.3em;">It is important to realise while housing activity will continue to be the backbone of the economy over the coming year, it is starting to show signs of starting to cool – especially when it comes to irrational exuberance. If there is an anticipated pullback in home lending policymakers would be hoping that activity amongst the business sector lifts from here.</span>
</div>
<div class="column">
<br><span style="line-height: 1.3em;">There would be mild disappointment in the fall in business loans in July. Commercial loans are now down 5% on a year ago. Business conditions are healthy, however businesses are still rather tentative about borrowing. The key driver of future lending will be an ongoing improvement in labour market conditions, rise in </span><span style="line-height: 1.3em;">business hiring intentions and lift in consumer confidence. </span>
</div>
<div class="column"><span style="line-height: 1.3em;"> </span></div>
<div class="column"><a href="/images/2015/09/11/Screen%20Shot%202015-09-11%20at%202.40.39%20PM.png" target="_blank"><span style="line-height: 1.3em;">Click to enlarge</span></a></div>
<div class="column"><span style="line-height: 1.3em;"><img src="/images/2015/09/11/Screen%20Shot%202015-09-11%20at%202.40.39%20PM.png" alt=""></span></div>
<div class="column"> </div>
<div class="column"> </div>
<div class="column"><a href="/images/2015/09/11/Screen%20Shot%202015-09-11%20at%202.40.51%20PM.png" target="_blank">C<span style="line-height: 1.3em;">lick to enlarge</span></a></div>
<div class="column"><span style="line-height: 1.3em;"> </span></div>
<div class="column"><span style="line-height: 1.3em;"><img src="/images/2015/09/11/Screen%20Shot%202015-09-11%20at%202.40.51%20PM.png" alt=""></span></div>
<div class="column"> </div>
<div class="column"><span style="line-height: 1.3em;">The Reserve Bank will dominate headlines next week with a number of releases and speeches. However the focus will be squarely on the Reserve Bank Governor, when he testifies in front of the House of Representatives Economics Committee on Friday. It will be interesting to see the Governors views when it comes to the non- mining business investment and how the housing sector is likely to evolve with the tighter lending standards. CommSec expects no change in interest rates over the next year.</span></div>
<div class="column">
<div class="page" title="Page 2">
<div class="layoutArea">
<div class="column">
<p><span>What do the figures show? </span></p>
<p><span>Lending finance </span></p>
<p><span>Total new lending commitments (housing, personal, commercial and lease finance) fell by 0.1% in August to $74.1 billion after a 1.3% rise in June. New loans are down 1.1% over the year.</span></p>
<p><span>Housing finance: The seasonally adjusted measure of construction and new purchases rose by 2.2% in July while alterations &amp; additions rose by 0.9%. Home loans are up 13.4% on a year.</span></p>
<p><span>Commercial finance: The seasonally adjusted series for the value of total commercial finance commitments fell by 2.7% in July. Revolving credit commitments fell by 13% while fixed lending commitments fell by 0.9%. Business loans are down 5% over the year.</span></p>
<p><span>Personal finance: The seasonally adjusted series for the value of total personal finance commitments fell by 2.6% in July after rising by 0.9% in June. Revolving credit commitments rose by 2.6% and fixed lending commitments fell by 5.8%. Personal loans are down 12.7% over the year. Within personal fixed finance commitments, finance for used cars was down 2.3% on a year earlier while loans for new cars were up by 8.8%.</span></p>
<p><span>Lease finance: Lending rose by 60.2% in July. Lease finance rose by 68.9% over the year. What is the importance of the economic data?</span></p>
<p><span>Lending Finance is released monthly by the Bureau of Statistics and contains figures on new housing, personal, commercial and lease finance commitments. The importance of the data lies in what it reveals about the appropriateness of interest rate settings, confidence and spending levels in the economy.</span></p>
<p><span>What are the implications for interest rates and investors?</span></p>
<p><span>The Reserve Bank would be comfortable about the mix of borrowings: Aussie businesses are tentatively borrowing - in a measured way. Still, the Reserve Bank would be watching the recent drop in consumer confidence a lot more closely.</span></p>
<p><span>The weaker Aussie dollar is providing solid stimulus to the economy at present and the Reserve Bank will continue to assess the impact on the economy over the next few months. CommSec expects no change to interest rates over the coming year. </span></p>
<p><a href="/images/2015/09/11/Screen%20Shot%202015-09-11%20at%202.45.44%20PM.png" target="_blank"><span>Click to enlarge</span></a></p>
<p><span><img src="/images/2015/09/11/Screen%20Shot%202015-09-11%20at%202.45.44%20PM.png" alt=""></span></p>
<p> </p>
<p><em><span>Savanth Sebastian is an economist for CommSec. You can follow him on Twitter <a href="https://twitter.com/commsec" target="_blank">here</a>.</span></em></p>
</div>
</div>
</div>
</div>
</div>
</div>
</div></body></html>

Tighter bank lending standards showing impact: Savanth Sebastian

<html><body>
<div>
<span style="line-height: 1.3em;">APRA </span><span style="line-height: 1.3em;">released</span><span style="line-height: 1.3em;"> its latest property exposures figures for the June 2015 quarter today, which confirmed an ongoing surge in new housing loans. </span>
</div>
<div><span> </span></div>
<div><span>As at June 2015 the total of residential term loans to households held by all institutions (ADIs) was $1.33 trillion. </span></div>
<div><span> </span></div>
<div><span>In total this represented an increase of +$31.8 billion (+2.4%) from the prior quarter, and a solid increase of +$97.1 billion (+7.9%) over the year to June.</span></div>
<div><span> </span></div>
<div><span>There were a total of 5.4 million loans outstanding, with an average balance of $243,000.</span></div>
<div><span> </span></div>
<div><span><strong><span style="text-decoration: underline;">Investment loans surging higher</span></strong></span></div>
<div><span> </span></div>
<div><span>Investment loans totalled $518.3 billion, an increase of +$17.7 billion (+3.5%) from the March quarter and massive +$81.1 billion (+18.6%) from one year ago.</span></div>
<div><span> </span></div>
<div><span>That's huge, and well ahead of the rate that the regulator would or should be comfortable with.</span></div>
<div><span> </span></div>
<div><span>Interestingly while loans held by the major banks increased by +7.5% over the past year to $1,076 billion, loans held by other domestic banks increased by a much faster +18.8% pace to $155 billion.</span></div>
<div><span> </span></div>
<div>The major banks still accounted for close to 80 per cent of the domestic new housing loan market, however, with the remainder of the market comprising other banks, credit unions and particularly building societies.</div>
<div><span> </span></div>
<div>
<span>It should be noted that there have been a few issues relating to the reclassification of loans between owner-occupied and investment loans, with material revisions (&gt;10%) pushed through for the September 2014 to March 2015 quarters relating to ANZ and National Australia Bank.</span><br><span><br></span><span>You can see the jump in the chart below. </span><br><span><br></span><span>This has had the impact of accentuating the rate of increase in investment loans while dampening the growth in owner-occupier loans. </span>
</div>
<div><span> </span></div>
<div><span>In any case the trend in <strong>total </strong>loans outstanding since March 2008 has been more than clear, with total residential term loan exposures captured by this data more than doubling over that time.</span></div>
<div><span> </span></div>
<div><span>This is at least partly because the investor segment of the market often opts to amass new debt rather than paying loan balances down, particularly because Australia has prevailing tax legislation which encourages this behaviour.</span></div>
<div><span> </span></div>
<div><a href="/images/2015/08/26/APRA1.jpg" target="_blank"><span>Click to enlarge</span></a></div>
<div><span> </span></div>
<div><span><img src="/images/2015/08/26/APRA1.jpg" alt=""></span></div>
<div> </div>
<div> </div>
<div>
<div>The data revealed that the overwhelming majority of new housing loans in the quarter at 89.3 per cent of new loans were of a loan to value ratio (LVR) of 90 per cent or lower. </div>
<br><div>As denoted by the pink area in the chart below there has been a surge in the number of borrowers using 20 to 40% deposits, now accounting for more than half of new housing loans in the last quarter.<br><br>This may imply that "cashed up" property owners with deep pools of equity are buying investment property at the expense of first time buyers who must save their deposits. </div>
<div> </div>
<div>More than one fifth of new loans in the quarter had a very low loan to value ratio of just 60% or lower.</div>
<div> </div>
<div><a href="/images/2015/08/26/APRA2.jpg" target="_blank">Click to enlarge</a></div>
<div> </div>
<div><img src="/images/2015/08/26/APRA2.jpg" alt=""></div>
<div> </div>
<div>
<div>Higher risk "low doc" loans continued to represent only a tiny fraction of the Australian mortgage market in the June quarter at 0.4 per cent.</div>
<div> </div>
<div><strong><span style="text-decoration: underline;">Market risks</span></strong></div>
<div> </div>
<div>With very few low doc loans written and the overwhelming majority of loans being written with deposits ranging from 10 to 40 per cent, where lies the risk?</div>
<div> </div>
<div>After all, it is hardly as though the market is highly leveraged in aggregate with aro<span>und <span>~</span>$1.4 trill</span>ion of debt sitting against a stonking $6 trillion residential housing market.</div>
<div> </div>
<div>For my money, in terms of the residential mortgage market the answer is that the risk lies in the very high percentage and concentration of interest only loans, whereby typically no repayments are made against the principal in the first five years. </div>
<div> </div>
<div>It is true that loans with offset facilities are continuing to flourish, but nevertheless a whopping 45.8% of new housing loans written in the June 2015 quarter were of the interest only variety.</div>
<div> </div>
<div>Although only 4% of new housing loans in the June quarter were written outside serviceability, it would not be a surprise to see APRA looking more closely at the elevated percentage of interest only loans with renewed interest.</div>
<div> </div>
<div>
<p><span><em>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>.</em><br></span></p>
<p><em>His latest book is <a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx" target="_blank" rel="nofollow">Four Green Houses and a Red Hotel</a>.</em></p>
</div>
</div>
<div> </div>
</div>
</body></html>

Housing Loans

Editor's Picks

Have something to contribute?

Developments

New apartments

New townhouses

News

Housing Loans

Editor's Picks

Receive the latest news stories to your inbox

Have something to contribute?

Developments

New apartments

New townhouses

News