<p>Perth’s new apartment market recorded its strongest quarter of sales since Q4 2021, with 412 apartments sold in Q1 2026 and a record quarterly sold value of $537 million, according to Urbis’ latest Apartment Essentials results.</p>

<p>Urbis said the March quarter result reflects strong, highly product‑specific demand across both ends of the market, from more attainable projects delivering at scale, through to premium stock being absorbed by equity‑rich downsizers.&nbsp;</p>

<p>David Cresp, Partner at Urbis, said the key story in Perth is not demand, it is the market’s ability to convert demand into delivered housing.&nbsp;</p>

<p>“This is the strongest sales quarter since Q4 2021, and it reinforces that demand in Perth is real and it’s local,” David Cresp said. “But the task now is delivery, turning that demand into projects that can actually be built and completed.”&nbsp;</p>

<p>[smartcode_project:default project_id=110291 project_image_fid=302785]</p>

<h2>Affordable product leads, premium demand remains resilient</h2>

<p>Sales in Q1 were led by more affordable projects, with The Boulevard (SKS Group) recording 115 sales in the quarter, the presentation noting this is only the second time a single project has surpassed 100 quarterly sales. The project was able to offer more affordable housing product right next to a train station.&nbsp;</p>

<p>Palmyra West (Finbar) also delivered strong results with 28 sales in Q1, following 84 sales in Q4, with an average price of under $800,000, underscoring depth of demand for well‑located, attainable new stock.&nbsp;</p>

<p>At the premium end, Urbis said downsizer demand is continuing, with the results highlighting Romeo (Applecross, Finbar) recording 75 sales and reaching almost 50% sold in one quarter.</p>

<p>Jual (Shenton Park, Celsius Property) also posted a strong quarter with 28 sales, reaching 39% sold in one quarter.</p>

<p>Urbis noted that Perth apartment demand is not speculative, not investor‑led, and not uniform, describing it as localised, often equity‑driven and highly product‑specific, a pattern reflected in the polarisation between strong “attainable” performers and premium downsizer product.&nbsp;</p>

<p>[smartcode_project:default project_id=148957 project_image_fid=364102]</p>

<h2>Prices underpinned by costs, and the delivery risk is growing</h2>

<p>Urbis said pricing pressure is cost not demand‑driven: construction costs and delivery risk are now a central constraint, with the results noting build costs remain elevated and volatile, and that energy, fuel and labour uncertainty weigh on feasibility.</p>

<p>David Cresp said a growing challenge for private Build‑to‑Sell developers is simply securing a builder in the current environment.</p>

<p>“Developers are really feeling the pressure from a building market that was operating at capacity and securing a builder is challenging,” David Cresp said, adding that even where a builder can be secured, “trying to get to the price that makes the development financially viable is incredibly challenging in the current market.”&nbsp;</p>

<p>Urbis’ broader WA commentary also notes that industry remains at or above capacity with lot and housing creation, and that many builders are limiting new sales to manage stretched workforces and fixed‑price contract pressures, conditions that flow directly into apartment feasibility and delivery timing.</p>

<p>[smartcode_project:default project_id=108869 project_image_fid=317905]</p>

<h2>Supply: improving later, but still constrained, and Perth lags eastern benchmarks</h2>

<p>While near‑term supply remains constrained, Urbis’ forecast shows completions lifting “Supply is forecast to be back above 1,500 apartments per annum for the first time since 2019”, with 1,775 completions forecast for 2026, and volumes remaining above that level over the following years.&nbsp;</p>

<p>Looking further ahead, completions are forecast to reach 2,500 in 2028, with the report noting 32% of that total is social/affordable, reflecting the role of government‑supported delivery in rebuilding the pipeline.&nbsp;</p>

<p>However, Urbis said Perth remains behind comparable markets on pipeline scale. In a national comparison of projects under construction, the report shows under construction Perth Build‑to‑Sell (BTS) at 3,446 apartments versus the Gold Coast at 7,922. Mr Cresp said “The challenge for Perth is how to we grow the delivery pipeline”.</p>

<p>Urbis’ conclusion is that Perth’s market is increasingly defined by product discipline and delivery certainty, with the research identifying “delivery certainty is key” and calling out builder risk and procurement models as core success factors, alongside “timing and staging”.&nbsp;</p>


Joel Robinson

Perth apartment sales hit strongest pace since late 2021 as builder capacity tightens

<p><a href="https://www.apartments.com.au/developers/sammut-developments">Sammut Group</a> has secured development approval for its latest Brisbane apartment project, marking the Sydney developer’s next step in expanding its Queensland pipeline following the success of its debut Gold Coast development, Coast.</p>

<p>The approved project at <a href="https://www.apartments.com.au/new-apartments/44-glen-road-toowong-qld-4066">44 Glen Road, </a><a href="https://www.apartments.com.au/developments/toowong-qld-4066">Toowong</a> will deliver a 15-storey riverfront apartment building with 42 residences, significantly increasing the scale of the site’s previous approval for a smaller luxury scheme. Designed by Bureau^proberts, the development will comprise a mix of predominantly four-bedroom and two-bedroom apartments positioned to maximise Brisbane River and city views.</p>

<p>Sammut Director Julian Sammut said the group had been actively searching Brisbane for several years before identifying Toowong as the right fit.</p>

<p>“Brisbane was the right step for Sammut,” Sammut said.</p>

<p>“With the success of Coast we thought we should definitely look to do more in Queensland alone. We then pushed up to look at Brisbane. We've been looking for I'd say two to three years actually and it was hard to find the right location.”</p>

<p><img alt="Sammut makes Brisbane apartment play" data-entity-type="" data-entity-uuid="" src="https://res.cloudinary.com/dz9xllyip/image/fetch/f_auto,c_limit,w_1440,q_75/https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/field/image/Screenshot%202025-12-23%20at%203.27.14%E2%80%AFPM.png?VersionId=dYAVIL7qdcGA8ojvkslSrLjczXFejSSx" /></p>

<p>Sammut said suburbs including New Farm and Teneriffe were considered before the group ultimately focused on Toowong due to its strong downsizer demographic and limited supply of developable riverfront land.</p>

<p>The site was acquired off-market after what Sammut described as a lengthy negotiation and planning process, with the developer pursuing an uplift to the original approval.</p>

<p>“We are DA approved now which is very exciting,” Sammut said.</p>

<p>“We've had our change approval come through and we've obviously doubled the height, 15 storeys plus rooftop. We've got 42 amazing apartments that are going to be coming to market soon.”</p>

<p><img alt="Sammut makes Brisbane apartment play" data-entity-type="" data-entity-uuid="" src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,dpr_2.0,q_auto:good/https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202025-12-23%20at%203.27.26%E2%80%AFPM.png?VersionId=ohkRkY0dIZlqdfME2EZePsCQavRiBadE" /></p>

<p>Bureau^proberts said the design responds to Toowong’s evolving urban character, balancing contemporary apartment living with the area’s established residential identity.</p>

<p>“A place where traditional Queensland living has taken place for centuries; Toowong is seeing a shift of contemporary influence, commercial and retail hubs mixed with well-considered residential offerings – all the while maintaining its character and charm,” the architect noted in planning documents submitted to Brisbane City Council.</p>

<p>The architecture practice said the project’s form was shaped by its riverfront setting, flood considerations, neighbouring building scales, and view corridors.</p>

<p>“They said the mix of four and two-bedroom apartments capture the ‘fundamental qualities of Queenslander living,’ translated into the context of a contemporary subtropical building.”</p>

<p>The development sits just off Coronation Drive within walking distance of Toowong’s retail precinct and the upgraded Regatta ferry terminal, while also benefiting from proximity to the incoming green bridge connection to West End. Sammut said the accessibility and amenity offering were central to the site’s appeal.</p>

<p>The approval adds to growing residential activity along the Toowong riverfront, joining nearby projects including Consolidated Properties’ Monarch Residences and Spyre Group’s ARC Residences.</p>


Sammut secures approval for debut Brisbane apartment development in Toowong

<p>Developer Lanevick is heading back into Sydney’s apartment market after focusing more heavily on the luxury townhouse and terrace sector in recent years.</p>

<p>Lanevick, founded and directed by Steve Maroun, is expecting to receive approval in the coming months for a new apartment development in Gladesville, with the aim to launch it to the market later this year.</p>

<p>The 51-apartment project, designed by Studio Johnston, will comprise a mix of one-, two-, and three-bedroom apartments positioned toward the Hunters Hill downsizer market.</p>

<p>“Traditionally it’s been difficult for people in that market to downsize because there just hasn’t been the right product available,” Maroun said.</p>

<p>“We’re targeting buyers who might have 30 to 40 per cent of their house value sitting in the bank after downsizing.</p>

<p>“They still want good spacious entertaining areas, they still want quality design, but they also want flexibility and the ability to enjoy life a bit more after working hard for a long time.”</p>

<p>The project sits near Boronia Park and within close proximity to the Parramatta River foreshore, an area Maroun says offers more of a Hunters Hill lifestyle than a traditional apartment precinct.</p>

<p>“From a lifestyle perspective, it’s really more Hunters Hill than Gladesville,” Maroun said. “You’re close to the foreshore, close to parklands, and still connected back into the village precinct.”</p>

<p>From level four and above, apartments will capture water views&nbsp;toward Sydney Harbour. Communal amenity will include rooftop entertaining areas, wellness spaces, and a gym tailored toward owner-occupier buyers.</p>

<p>“We’ve really designed these apartments around that buyer coming from the Hunters Hill LGA and what they’re actually looking for in their next chapter.”</p>

<p>The proposed development has also been designed to respond to the changing character of the broader Gladesville town centre, where a growing number of mixed-use and residential proposals are expected to emerge over the coming years.</p>

<p>“Gladesville presented a rare opportunity to deliver a genuinely design-led residential project within an evolving lifestyle precinct, just moments from the growing Gladesville town centre, and we’ve approached the project with a strong focus on architecture, liveability and long-term community value,” Maroun said.</p>

<p>Maroun said Lanevick saw a first-mover advantage within the precinct as planning controls continue to evolve to accommodate greater housing density.</p>

<p>“We think there’s a real opportunity there that hasn’t really been serviced properly yet,” he said.</p>

<p>“There’s going to be a broader evolution of the whole Gladesville village precinct over time, particularly with more activation and mixed-use outcomes.”</p>

<p>The Venus Street proposal will include a commercial and retail component at ground level designed to contribute to that evolving streetscape activation.</p>

<p>“A big part of the thinking was how do you activate that area properly and create more vibrancy and amenity, which is what Hunters Hill has been looking for,” Maroun said.</p>

<p>Lanevick’s focus since 2020 has largely been on smaller-scale luxury townhouse and terrace developments. The developer recently completed Royale Randwick, also designed by Studio Johnston, where prices reached $3.65 million. The project was featured in the UDIA NSW 2026 Professional Development Prospectus and was also named a finalist for Development of the Year.</p>

<p>&nbsp;</p>


Lanevick to cater for Hunters Hill downsizers with new Gladesville apartment development

<p>Property developer One Living, backed by former Macquarie banker turned investment manager Chris Green’s investment firm, has unveiled plans to bring more institutional capital into housing to help address the national supply crisis.</p>

<p>The New York-based investor has focused his firm, GreenPoint Partners, on addressing the supply shortage hitting middle market housing in Australia.</p>

<p>It is backing the new One Living business to develop more than 1000 units along the eastern seaboard. The new firm is starting with a development on Mona Vale Road, on the border of Mona Vale and Pymble, in Sydney’s Northern Beaches, with around 140 apartments planned. They are eyeing off more sites across the city.</p>

<p>With cost pressures rising in the industry, One Living’s model is to be a vertically integrated developer-builder, so it can respond directly to the housing gap by removing the cost inefficiencies embedded in traditional residential delivery.</p>

<p>“We are building a platform designed to operate at scale and starting in a market where there’s a clear need for quality, attainable housing,” One Living joint managing director Joseph Scuderi said.</p>

<p>“It’s that missing middle – it’s that attainable end of housing… that’s what most Australians invest into and what Australians can actually afford.”</p>

<p><img alt="Mona Vale" data-entity-type="file" data-entity-uuid="798dfa93-4941-4db6-a696-31e9dc18e81c" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%202.31.50%E2%80%AFPM.png?VersionId=mKBqi5C_DmeiXS.AtJkcR8LQIxqCqmFi" /></p>

<p>GreenPoint Partners brings years of experience assembling and scaling real estate operating businesses across major markets. And Green sees a big opportunity in Australia.</p>

<p>“For its size, sophistication and importance to the community, Australia’s living sector has remained largely under-institutionalised, which represents significant opportunity,” Green said. “GreenPoint identified that gap, assembled the right team, and is backing One Living to build a platform that is aligned to market needs.”</p>

<p>Green said being a builder-developer would give the company the capacity and flexibility it required to deliver reasonably-priced homes.</p>

<p>“We want it to be at that attainable level; not super high end luxury but at that attainable level,” he said.</p>

<p><img alt="Mona Vale" data-entity-type="file" data-entity-uuid="74a5344a-4b26-4d4a-ada3-056b1220be77" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%202.32.15%E2%80%AFPM.png?VersionId=vY8hXHO4reBMdO8ZXMWCNtGZJofUPQ3j" /></p>

<p>&nbsp;</p>

<p>One Living will undertake a component of affordable housing in its schemes, which it will own and operate, and it could also run build-to-rent on some sites.</p>

<p>Green praised local policy settings.</p>

<p>“The NSW government is being very supportive, strategic and pragmatic in terms of how do we generate more supply of housing,” he said. “We think it’s actually positive for development and the bit that’s been lacking at that attainable level is that it’s lots of relatively small private developers, whereas we want to create an institutional platform.”</p>

<p>One Living is also&nbsp;looking at high-density projects and could take on more institutional funding in the future.</p>

<p>“The way we will be able to achieve economies of scale is through size,” Green added.</p>


One Living enters Sydney's new apartment market with Northern Beaches site acquisition

<p>It's been several years since there's been an opportunity to buy a brand new townhome in Melbourne's coastal suburb of Mordialloc. Even apartment developments in recent times have been few and far between in the area.</p>

<p>Local developer LDS Property identified the gap in new housing, securing a site on White Street, directly opposite&nbsp;Woodlands Golf Club Mordialloc. They've recently launched&nbsp;<a href="https://www.apartments.com.au/new-townhouses/wm-residences-mordialloc-102-white-street-mordialloc-vic-3195">WM Residences</a>, just 13 townhouses which they have already started building.</p>

<p>Projects by Buxton Director Heath Thompson, who is selling WM Residences, says the townhouses x that perfect middle ground be</p>

<p data-end="683" data-start="511">"Mordialloc residents have had limited options to downsize within the suburb, often forcing them to look elsewhere despite long-standing ties to the area," Thompson says.</p>

<p data-end="882" data-start="690">"With very little comparable new supply coming to market, projects like WM Residences are well placed, particularly as buyers look to capitalise on current conditions amid constrained supply."</p>

<p data-end="882" data-start="690">[smartcode_project:default project_id=134646 project_image_fid=6109]</p>

<p>The development, designed by regarded architecture firm&nbsp;<a href="https://www.apartments.com.au/architects/ewert-leaf">Ewert Leaf</a>,&nbsp;adopts a deliberately restrained architectural approach, focusing on simplicity, durability and liveability rather than overt design gestures.</p>

<p>The boutique scale is central to the offering. With only 13 three-bedroom residences, each home is configured to prioritise functional layouts and everyday use, supported by private terraces and secure two-car garages.</p>

<p>Ewert Leaf’s design response leans into a calm, neutral material palette. Interiors are defined by oak flooring, white walls and soft finishes, creating a consistent and understated backdrop. The approach avoids trend-driven detailing in favour of longevity, with an emphasis on natural light and spatial clarity.</p>

<p>[smartcode_project:default project_id=134646 project_image_fid=6110]</p>

<p>Beyond aesthetics, the homes are designed to meet contemporary performance expectations. Each residence targets a minimum 6-star energy rating, incorporating double glazing, comprehensive insulation and all-electric Bosch appliances.</p>

<p>The project’s location supports a walkable coastal lifestyle, sitting within close proximity to Mordialloc’s foreshore, Main Street retail strip and the train station. Local cafés and dining venues, including Suburbia Deli and Hendriks Café, are within a short walk, reinforcing the area’s established neighbourhood character.</p>

<p>[smartcode_project:default project_id=134646 project_image_fid=6116]</p>

<p data-end="247" data-is-last-node="" data-is-only-node="" data-start="0">While <a href="https://www.apartments.com.au/developments/mordialloc-vic-3195">Mordialloc</a> is often defined by its beach and pier, the project taps into other areas of day to day living, offering easy access to local food, casual dining and transport, rather than positioning itself purely as a lifestyle retreat.</p>

<p>WM Residences reflects a continued trend across Melbourne’s coastal suburbs towards smaller-scale, design-led townhouse developments, particularly on infill sites where proximity to amenity is already established.</p>

<p>With construction commenced prior to its market entry, the project aligns with a growing preference among buyers for developments with visible progress and defined delivery timeframes.</p>

<p>[smartcode_project_cta:default project_id=134646]</p>


WM Residences fills gap in Mordialloc townhouse market

Housing Market

<html><body>
<p class="Body">On Wednesday night I watched finance commentator Alan Kohler on ABC TV puzzling over the apparent contradiction of sharply-falling loans to investors and rising prices in the major cities.</p>
<p class="Body">His basic message was: it doesn’t make sense and it can’t continue. </p>
<p class="Body">His basis problem was: it didn’t occur to him that some of the data he was presenting might be rubbish.</p>
<p class="Body">He shares this problem with commentators, economists and journalists right across Australia. No one ever questions the real estate data that’s pumped out by publicity-addicted research companies – not even when it’s patently absurd and clearly wrong.</p>
<p class="Body">We had the situation recently where one of big research firms published figures showing that house prices <span style="text-decoration: underline;">fell</span> in six of the eight capital cities in the March Quarter. That was treated as gospel and interpreted as evidence that the alleged boom was over.</p>
<p class="Body">Around the same time another of the big numbers companies published figures claiming that house prices <span style="text-decoration: underline;">rose</span> in six of the eight capital cities in the March Quarter. That result was reported as truth as well, with no one (apart from me, it seems) noticing that the two sets of figures totally contradicted one another and that two conflicting messages were being sent to the public. </p>
<p class="Body">One source said Adelaide was leading the nation on price growth while another said its prices were falling at the fastest rate since 2012.</p>
<p class="Body">So back to Kohler who is very good at making sense of share-market events and economic data, but not so bright when it comes to real estate. He displayed a graph suggesting loans to investors have dived. He attributed this to the crackdown by APRA and the reaction of major lenders.</p>
<p class="Body">That was starkly at odds with reports in media only days earlier, claiming that “investors have begun flooding back into the market”. Newspapers reported that investors were 47.6% of all new mortgage commitments in March, the highest proportion since August 2015. This was attributed to “some lenders reversing the tighter lending requirements that were previously in place”. </p>
<p class="Body">So Kohler’s graph told quite the opposite story to the figures published elsewhere. And he made the incorrect assumption – the Labor Party is making the same mistake with its negative gearing policy – that price rises are caused exclusively by investors.</p>
<p class="Body">His next problem - his confusion over prices rising so much against a background of apparently plummeting investor lending – was based on his blind acceptance of the May price growth figures from CoreLogic.</p>
<p class="Body">Like so many journalists and commentators, he fell into the trap of (a) accepting published figures as unchallengeable and (b) placing big emphasis on month-to-month movements. He’s been around long enough to know better. </p>
<p class="Body">Much of the data purporting to depict monthly changes in prices in our major cities is worthless. Indeed, it’s worst than worthless, because it’s misleading and causes confusion for consumers. </p>
<p class="Body">The CoreLogic figures for May would have us believe that the apartment prices rose 8.4 percent in Hobart. Seriously? Hobart units have added 8.4 percent in value in a single month? I visited Hobart just a week ago and there is nothing happening in that market to justify that figure, nor the one that says Hobart unit prices have risen almost 19 percent in the past 12 months. These figures are made of an artificial elastomer synthesized from petroleum byproducts (they’re rubbery).</p>
<p class="Body">The same research source claims that Darwin apartments prices fell 10 percent in the month of May; that Canberra apartment prices fell 6 percent; that Perth prices fell 6.3 percent; and that Sydney house prices rose 3.6 percent. All those dramatic movements in property values in a single month – are they believable? I would suggest not. </p>
<p class="Body">Everyone reporting these numbers has expressed breathless amazement, but it hasn’t occurred to anyone that maybe the figures are a tad sus – or that short-term movements in median prices or value indexes are essentially irrelevant because a month is too short a time frame to deliver a meaningful pattern.</p>
<p class="Body">If you examine month-to-month movements in anything – retail spending, building approvals, the jobs market, you name it – you’ll find the numbers are quite erratic. Often they’re just statistical aberrations, but economists will be lining up to attribute great significance to them. </p>
<p class="Body">Only the long-term trend matters and only that should be reported - and then only with care, because you can be sure that the numbers you’re recording today will be contradicted by another set from other source tomorrow.</p>
<p class="Body"><em>Terry Ryder is the founder of <a href="https://www.hotspotting.com.au/" target="_blank">hotspotting.com.au</a>. You can <a href="https://mailto:ryder@hotspotting.com.au" target="_blank">email him</a> or follow him on <a href="https://twitter.com/hotspotting" target="_blank">Twitter.</a></em></p>
</body></html>

terryryder-YECXbqmri2

Some data depicting monthly residential price changes is worthless: Terry Ryder

<html><body>
<p>It was only a matter of time before some property punters would cash in simply because property data is now pointing to a significant price correction.</p>
<p>The latest Reserve Bank of Australia (RBA) data has inflation adjusted wage growth sitting most uncomfortably around zero which spells disaster for households carrying excessively large mortgages. Time to cool the heels-cash in, and lock oneself into a lease for twenty-four months or so and watch what happens as there are some worrying signs out there, although some areas will see minimal change and others massive.</p>
<p>The RBA also announced this week that it was concerned how the financial system would handle a significant price correction in the apartment investment sector. Between now and June 30 there are a staggering 15,000 apartments settling so we are approximately 90 days away from knowing if the investment apartment sector is about to collapse.</p>
<p>With the clear majority of these sales to Chinese investors we will soon find out if they can raise the funds to settle without the assistance of the major banks who have walked away from overseas investors.</p>
<p>Li Ming, a co-director of Aussiehome, recently announced that “the off-the-plan apartment markets is now the worst I have seen in the last 10 years.” He then went on to say that almost 80 percent of Chinese buyers can’t settle on the Australian apartments they have purchased and now would prefer to walk away. In the clear majority of cases, these properties are now worth considerably less than when they were an artist’s impression on a glossy brochure.</p>
<p>Property is a confidence game so when we start reading negativity we also start seeing an immediate response in consumer sentiment. This would almost certainly explain why the RBA is now sounding clear warnings directed at the investment apartment markets. This usually only happens when their internal research is discovering anomalies in the markets so immediately they start sounding the fog-horns.</p>
<p>I well remember remarking back in December 2008 when Wayne “The World’s Best Treasurer” Swan strangely increased the off-the-plan ratio from 50 percent to 100 percent that this would not have a happy ending. Who knows I may well be wrong although I still stand by my predictions where nearly nine years on we are now starting to see the result.</p>
<p>This also coincides with Sydney house prices presently posting the highest annual growth in 14 years. We all know (well most anyway) that for property markets to change direction you need a trigger. Should Li Ming be correct about the apartment investment market this will have a significant impact on this newly created apartment investment market right across the eastern seaboard.</p>
<p>If this does happen our governments and banks need to play this intelligently by riding the storm out by becoming landlords. In the past, they have panicked (especially the banks) by engaging in massive sell offs which cause more problems. What should be happening now is the intelligent preparation of worst case scenarios where lenders should be looking at first home buyers to create lease and buy back packages.</p>
<p>Having said that the first problem with housing affordability is the rental markets despite governments going down the wrong track of building more homes. If rents are flat and even decreasing as was the case 15 years ago, then the pressure on tenants is removed as it then becomes cheaper to rent over owning. What we forget are the many solid arguments back then that clearly showed renting was a smarter option than buying – how quickly we forget.</p>
<p>Obviously with so many brand-new apartments set to hit the rental markets rents will fall – just imagine what would happen if the NSW government forced the 200,000 plus permanently vacant Sydney apartments onto the market?</p>
<p>The Victorian government has acted on this with the introduction of the Vacant Residential Property Tax (VRPT) which will address the permanently vacant properties across inner and middle suburbs of Melbourne. The VRPT will be levied at 1 percent, multiplied by the capital improved value of the taxable property. A property worth $650,000 would then be charged a VRPT of $6,500 which in my opinion is too low because the clear majority are wealthy which is why they are not interested in renting the property out in the first place.</p>
<p>The VRPT should be between 3 and 5 percent although the Victorian government knows only too well that a 1 percent VRPT won’t have a significant impact on overseas buyers which is why they introduced it.</p>
<p>On the flip side, the NSW government is looking to further increase stamp duty for foreign buyers which would be an absolute disaster – just ask the Canadian government who did precisely this and then managed to collapse their investment markets by upwards of 30 percent.</p>
<p>I don’t worry too much about the property markets, I worry more about how our elected politicians will respond to these challenges. Generation Rent should be watching these markets very closely.</p>
<p class="p1"><span class="s1"><em>ROBERT SIMEON is a director of </em><a href="https://www.rwm.com.au/"><span class="s2"><em>Richardson Wrench Mosman and Neutral Bay</em></span></a><em> and has been selling residential real estate in Sydney since 1985. </em></span></p>
<p class="p1"><span class="s1"><em>He has also been writing real estate blog </em><a href="https://www.rwm.com.au/news/"><span class="s2"><em>Virtual Realty News</em></span></a><em> since 2000.</em></span></p>
</body></html>

robertsimeon-hRNTwJyXkQ

The big property shift is fast heading to a sell recommendation: Robert Simeon

<html><body>
<p>July was another strong month for capital gains across the Sydney and Melbourne housing markets with dwelling values moving 3.3% and 4.9% higher over the month.</p>
<p>The latest month of growth as well as the large number of new dwellings that have been constructed has pushed the overall value of Australian housing to just over $6 trillion dollars.</p>
<p>Across our combined capital city index, dwelling values across the nation’s capitals have increased by 4% over the past three months and 11.1% higher over the year. The annual rate of home value appreciation has been accelerating since March and is now almost as high as the previous cyclical high recorded in April 2014 when values were 11.5% higher over the 12 month period.</p>
<p>Sydney’s annual rate of growth, at 18.4% over the twelve months to the end of July, was the highest on record since 2002.</p>
<p>While growth conditions in Melbourne and Sydney have been extreme, the remaining capital cities continue to see milder rates of growth. The third highest capital gain across the nation’s capitals was recorded in Brisbane where values were 3.9% higher over the past twelve months. At the other end of the spectrum, Darwin values have shown the most substantial correction over the year, down by 5.3% and Perth values are also down, having moved 0.3% lower over the year.</p>
<p>Detached housing has continued to outpace the unit sector for capital gains across every capital city except Darwin and Hobart. Across the capital cities index, house values were 11.6% higher over the year and unit values were 7.2% higher. The gap between house and unit performance is the most substantial in Melbourne where house values have risen 12.3% over the past year compared with a 4.8% rise in unit values. The underperformance of the unit sector can probably be attributed to the large amount of new unit supply that has flowed into the market over recent years as well as the upwards pressure on vacant land prices that is pushing house values higher.</p>
<p>One of the factors driving values higher in the largest cities is the short supply of homes available for sale. As a prime example, in Sydney we are currently tracking approximately 18,150 advertised property listings, which is historically well below average. To provide some context, in late 2011 when market conditions were relatively soft there were slightly more than 40,000 homes available for sale across the Sydney market.  </p>
<p>Conversely, in those cities where the housing market is weakening, listing numbers have shown a consistent rise. Total listing numbers are now 22% higher in Darwin and 17% higher across the Perth housing market. </p>
<p>With listing numbers remain low in Sydney and Melbourne, together with market demand remaining high, buyers have been faced with some urgency in their decision making which is another factor driving prices higher in these cities. Sydney homes are selling in just 26 days with Melbourne homes selling over a slightly longer time frame at 34 days.  The remaining capital cities are taking more than 50 days on average to sell, with Hobart and Darwin the longest at 70 days.</p>
<p>Another indicator of ongoing market strength in Sydney and Melbourne is clearance rates. The success rate for capital city auctions has slipped from the high 70% range to the mid 70% range during winter, however that is still a historically high rate of clearance and the moderation is more than likely seasonal.</p>
<p>Australia’s largest city, Sydney, remains the hottest housing market, with dwelling values moving 18.4% higher over the past year. This is the highest rate of annual growth since 2002.  House values were up by 19.8% over the year and unit values increased by a lower 11.9%. While dwelling values are rapidly rising, rental rates across Sydney are increasing by only 2.5% per annum which means gross rental yields are being pushed to record lows. The typical Sydney house is now showing a gross rental yield of just 3.2% which is the lowest on record while units are showing an average gross yield of 4.2%.</p>
<p>In Melbourne, growth conditions have picked up over the past three months, with Melbourne recording a higher rolling quarterly rate of growth than Sydney at 6.1%. Detached houses continue to be the main driver of Melbourne’s appreciating home values. House values were 12.3% higher over the year compared with a 4.8% gain in unit values.  Similar to Sydney, rental growth has been subdued across the Melbourne regions with dwelling rents increasing by just 2.1% over the past twelve months. The average gross yield on a Melbourne house is now at record lows at just 3.0% while units are returning an average gross yield of 4.1%.</p>
<p>Brisbane’s housing market was the third strongest performer across the capital cities for capital gains over the past twelve months, with dwelling values rising 3.9%. The capital gain has been driven exclusively by the detached housing sector where house values have moved 4.6% higher over the year compared with a 2.5% fall in unit values. Compared with the other largest capital cities, rental yields are much healthier in Brisbane with the average gross yield on house recorded at 4.4% while the unit market is showing a higher 5.5% average gross yield.</p>
<p>Adelaide’s housing market recorded a 1.1% dip in dwelling values over the month of July, taking local values 0.2% lower over the first seven months of the year. Adelaide home values have increased by 3.4% over the past twelve months, and comprised of a 3.4% rise in house values and a 3.1% rise in unit values. Adelaide rents have remained virtually flat over the past year, with house rents increasing by 0.4% and unit rents up by 0.3%. The sluggish rental markets has seen gross rental yields across Adelaide slip a little further to register at 4.2% gross for houses and 4.7% gross for units.</p>
<p>Perth’s home values have remained relatively steady over the past year with dwelling values across the western most capital city falling by 0.3% over the past twelve months. The decline in dwelling value has been confined to the unit market where values have fallen by 5.7% over the year compared with house values which were virtually flat over the year with a 0.1% upwards movement. The local rental market is seeing larger declines, with house rents down 5.5% and unit rents falling by 7.2%. The large fall in weekly rents is also pushing local yields down, with the typical Perth house now showing a 3.9% gross yield while units are returning a gross yield of 4.5%.</p>
<p>The housing market across Hobart is once again on an improving trend with local dwelling values moving 2.6% higher over the first seven months of the year and 2.5% higher over the past twelve months. Hobart’s market still has some way to go before staging a nominal recovery, with dwelling values remaining 6.6% lower compared with the previous 2009 peak in dwelling values. House rents are up 2.1% over the past twelve months and unit rents are 4.1% higher which has pushed local gross rental yields to the second highest of any capital city.  </p>
<p>Darwin’s housing market is well into a correction with dwelling values down 5.3% over the past year. House values have recorded a larger fall than unit values, down 5.7% compared with a 3.2% fall in unit values. Weekly rents are also moving lower; house rents have fallen by 9.5% over the year and unit rents are down 8.1%. Despite the sharp fall in weekly rents, Darwin’s gross rental yields are still the highest of any capital city for detached houses at 5.7% and equal highest with Brisbane for units at 5.5%.</p>
<p>The housing market in Canberra has been on improving trend with values rising 4.9% over the first seven months of the year to be 1.2% higher over the past twelve months. The annual growth in dwelling values has been driven entirely by a rise in house values which are up 1.4% over the past twelve months while unit values are down 0.6%. Local gross rental yields are higher than the capital city average with the typical Canberra house providing a 4.1% average gross yield and units are showing an average gross yield of 5.0%.</p>
<p>The housing markets around Australia are as diverse as ever. While markets are booming in Sydney and Melbourne, they are correcting in Darwin and Perth. Across the regional areas of the country we are seeing coastal and lifestyle markets broadly bouncing back in value as buyer demand ramps up after a long slump, while towns reliant on the resources sector are moving through a downturn.  </p>
<p>The diversity in the housing market highlights the different growth drivers that are evident from region to region. The economies of Sydney and Melbourne are relatively sheltered from the downturn in the resources sector and are benefitting from a very healthy services sector while the mining states and territories are experiencing softer economic conditions and a wind down in population growth.</p>
<p>The increase in the rate of growth across our combined capital cities index is likely to be causing some concern to Australian regulators such as the Reserve Bank and APRA who would have been hoping to see the opposite trend; a slowdown in capital gains in line with tighter lending conditions around investment mortgages.  </p>
<p>The annual expansion in investor related housing credit has continued at a pace that is higher than APRA’s mandated 10% growth per annum, with June figures from the Reserve Bank showing credit for investment housing had increased by 10.9% over the year to reach its highest annual level since 2013. With many banks now placing a premium on investment mortgage interest rates while also looking to slow down their pace of investment lending we would suspect investors will start to comprise a smaller proportion of the market.  </p>
<p>The cumulative effect of tighter lending conditions, more expensive mortgage rates for investors and lower yields, as well as natural affordability constraints and higher levels of new housing supply, is likely to dampen some of the exuberance we have seen across the Sydney and Melbourne housing market. Listing numbers are likely to start their spring climb over the coming month which will provide a timely test of the housing markets strength through spring.</p>
<p><em>Tim Lawless is head of the CoreLogic RP Data research and analytics team and can be contacted <a href="https://blog.corelogic.com.au/author/timlawless/" target="_blank">here</a>.</em></p>
</body></html>

tlawless-5VLUrbAk9s

Urgency driving prices higher in Sydney and Melbourne: Tim Lawless

<html><body>
<p><span style="line-height: 1.3em;">According to CoreLogic RP Data research analyst Cameron Kusher, currently private sector housing credit stands at $1.536 trillion; a 7.3% year-on-year increase to January 2016. Mr Kusher said.</span></p>
<p><span style="line-height: 1.3em;"> “Housing credit has done nothing but expand over the period shown (refer adjacent graphs).” </span></p>
<p>Mr Kusher makes note of the fact that historically, credit is expanding at a slow annualised pace. “Of course this is a function of the fact that with low interest rates households are paying back credit faster as well as the value of outstanding credit is so much higher than in the past. Housing credit has been expanding at annual rate of between 7.0% and 7.5% for the past 15 months,” he says. </p>
<p>Click to enlarge</p>
<p><img src="/images/2016/03/3/Screen%20Shot%202016-03-03%20at%2012.24.21%20PM.png" alt=""></p>
<p>Since January 1991, housing credit data has been split between houses and units with investor housing credit typically increasing at a faster pace than owner occupier credit. Over the past year investor housing credit increased by 7.9% which is its slowest annual pace of growth since February 2014; well down on the recent peak rate of growth of 11.0%pa.</p>
<p>Meanwhile, owner occupier credit growth is recorded at 6.9%pa which is its fastest annual rate of growth since October 2010. Between 1991 and 2015, investor housing credit has increased from 16.0% of total housing credit to 35.8%, highlighting how popular housing investment has become since the early 1990’s. </p>
<p>Mr Kusher said, “Late in 2014 the Australian Prudential Regulation Authority (APRA) provided guidelines to lenders that annual investor housing credit should not expand by more than 10%pa. These changes were largely implemented from the middle of last year. Given this it would seem there is some scope for lenders to ease their policies on investment lending and lift the level of lending for investment purposes given credit growth is now well below 10% per annum.” </p>
<p>The latest housing finance data to December 2015 (which tracks the value of new lending) shows that following a large fall over the second half of 2015, investor lending has started to pick-up a little. Meanwhile the value of housing loans to owner occupier has continued to trend higher. </p>
<p>Mr Kusher said, “Given the tentative signs of a pick-up in investor demand in the housing finance data, investor housing credit growth now well below 10%pa and home values still rising, why wouldn’t investor demand ramp back up?” </p>
<p>Mr Kusher cites several reasons why investor demand may not rebound and starts with investors. </p>
<p>“This group is now facing not only higher mortgage rates due to the out of cycle lift in mortgages rates by lenders last year but they are also experiencing an average of 30 basis points higher mortgage rates because they are an investor (due to the higher capital requirements for investment loans implemented by APRA in 2015). Secondly, he notes that the home value growth phase in Sydney and Melbourne is now very mature having run for almost 4 years, perhaps there is some concern as to how much longer it can run.” </p>
<p><a href="/images/2016/03/3/Screen%20Shot%202016-03-03%20at%2012.25.14%20PM.png" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/03/3/Screen%20Shot%202016-03-03%20at%2012.25.14%20PM.png" alt=""></p>
<p>“Elsewhere value growth is and has been moderate with values falling in Perth and Darwin. With potential concerns of a slowing of value growth, rental yields are virtually at historic lows with rental rates unchanged over the year with each acting as a potential disincentive. Alternatively, investors may still be attracted to housing because total returns are still substantially higher than all other asset classes. </p>
<p>“The Federal Opposition has signalled changes to negative gearing rules and it is unclear as to how investors will react to the policy should Labor be elected. Arguably the proposed changes to negative gearing may bring forward investment purchases due the grandfathering provision included in the Labor policy; but there is also the argument that the uncertainty in taxation policy relating to housing may act as a disincentive to prospective investors. There is still significant mortgage market competition so despite the recent increases in mortgage rates if borrowers are prepared to shop around they can still get extremely competitive home loan rates.” </p>
<p>“We anticipate that from here there may be a bit of a pick-up in investment borrowing largely because mortgage rates remain low and housing returns are much stronger than most other asset classes. Although a pick-up in investment activity is a possibility, it is unlikely that the annual rate of housing credit growth will return to or breach its 10% pa limit,” Mr Kusher said.</p>
</body></html>

ckusher-ujnxiKuFQs

Will investor housing demand pick-up again? Cameron Kusher

<html><body>
<div id="post-body-3728627092930340920" class="post-body entry-content">
<div>Measures taken to slow the housing market in 2015 did their job effectively, largely by restricting the amount that people could borrow.</div>
<div> </div>
<div>Although there have been two interest rate cuts since May - a valedictory "double tap" from Governor Stevens, if you will - serviceability calculations continue to be assessed at a more stringent level.</div>
<div> </div>
<div>As a result borrowers can generally borrow little more than was the case before the most recent salvo of easing.</div>
<div> </div>
<div>This was to some extent reflected in the Housing Finance figures for June, released by the ABS today following a troublesome Census night website crash.</div>
<div> </div>
<div>Although the average loan size has been increasing steadily again from $352,200 to $360,100 since February, this figure remains below the peak of $382,300 seen in November last year. </div>
<div> </div>
<div>And it's a similar story for first homebuyer loan sizes. </div>
<br><a href="/images/2016/08/11/A2.jpg" target="_blank">Click to enlarge</a>
</div>
<div class="post-body entry-content">
<img src="/images/2016/08/11/A2.jpg" alt=""><br><br><div>At the state level, the first homebuyer loan sizes figures show the impact of tighter serviceability calculations.</div>
<br><div class="separator"><a href="/images/2016/08/11/A1.jpg" target="_blank">Click to enlarge</a></div>
<div class="separator"><img src="/images/2016/08/11/A1.jpg" alt=""></div>
<strong><span style="text-decoration: underline;"><br></span></strong><strong><span style="text-decoration: underline;">Total finance</span></strong><br><br><div>The net effect of this is that although trend total monthly housing finance has also now been rising again for the past few months - back up to well above $32 billion - the total value of commitments for now remains below the peak of $32.7 billion seen in June last year.</div>
<div> </div>
<div>Investor lending was the main target of the macroprudential crackdown, as you can see in the chart below. </div>
<div> </div>
<div>With the speed of investor credit growth now only about half of the arbitrary 10 per cent "speed limit", investor lending has now been trending up again for the past six months, albeit at a far less frantic pace than seen previously.</div>
<br><div class="separator"><a href="/images/2016/08/11/A3.jpg" target="_blank">Click to enlarge</a></div>
<div class="separator"><img src="/images/2016/08/11/A3.jpg" alt=""></div>
<br><strong><span style="text-decoration: underline;">Homebuyers return</span></strong><br><div> </div>
<div>The level of activity of homebuyers in the market has generally been relatively lower than we have seen in previous cycles, in part due to the sheer volume of investors in the Sydney and Melbourne markets since interest rates were dropped.</div>
<div> </div>
<div>However, following the effectively imposed caps on investor lending banks are now targeting the home loan market, and the trend number of monthly owner-occupier commitments has continued to rise to the highest level since June 2009. </div>
<br><div class="separator"><a href="/images/2016/08/11/A4.jpg" target="_blank">Click to enlarge</a></div>
<div class="separator"><img src="/images/2016/08/11/A4.jpg" alt=""></div>
<br><strong><span style="text-decoration: underline;">State versus state</span></strong><br><br><div>The number of owner-occupier commitments is trending solidly higher in Queensland, South Australia, Tasmania, and the ACT.</div>
<div> </div>
<div>Homebuyer activity remains high in Sydney and Melbourne, but these markets will also be impacted by serviceability constraints.</div>
<br><a href="/images/2016/08/11/A6.jpg" target="_blank">Click to enlarge</a>
</div>
<div class="post-body entry-content">
<img src="/images/2016/08/11/A6.jpg" alt=""><br><br><div>Indeed, this is reflected in the dampened trend monthly value of owner-occupier commitments in the two most populous states in the chart below.</div>
<div> </div>
<div>The homebuyer trend value of commitments appears to be strongest in Queensland, South Australia, Tasmania, and the ACT.</div>
<br><div class="separator"><a href="/images/2016/08/11/A5.jpg" target="_blank">Click to enlarge</a></div>
<div class="separator"><img src="/images/2016/08/11/A5.jpg" alt=""></div>
<div> </div>
<div class="separator">That said there has been a marked resurgence in investor lending in Sydney, sending preliminary auction clearance rates to their highest level of the year, at above 80 per cent.</div>
<div class="separator"><strong><span style="text-decoration: underline;"> </span></strong></div>
<div class="separator"><strong><span style="text-decoration: underline;">The wrap</span></strong></div>
<div class="separator"> </div>
<div class="separator">Overall, despite lots of alarmist reporting housing finance is tracking both at a historically high level, and is now accelerating again.</div>
<div class="separator"> </div>
<div class="separator">And remember that these figures for June pre-date an interest rate cut delivered in August.</div>
<div> </div>
<div>It's also worth remembering that the underlying demand for mortgages right now is enormous - the only reason lending slowed was because regulators were getting concerned about the sheer wight of demand for borrowing.</div>
<div> </div>
<div>The data seem to be following a remarkably similar trajectory to what we saw in the United Kingdom following its own macroprudential intervention (the so-termed Mortgage Market Review). </div>
<div> </div>
<div>That is the initial shock clonked the market on to the back foot, but as the dust settles lending is on the rise again - just more steadily than it was before.<br><br>Finally, the ABS reported a small increase in first homebuyer activity, but as disclosed by the ABS these data remain incomplete.<br><br>NAB's survey for Q2 2016 showed that first homebuyers accounted for 1 in 3 new home sales in the June quarter, and 29 per cent of established home sales.</div>
<div> </div>
</div>
<div class="post-footer"> 
<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>
</body></html>

pwargent-M4siyDbqQY

Housing finance accelerating again: Pete Wargent

<html><body>
<p>Over recent months the average number of days it takes to sell a residential property has been falling, reflecting the overall improvement in housing market conditions.</p>
<p>The average days on market figure provides valuable insight into the performance of the housing market.  The figure measures the average difference between the date at which a property is listed for sale and the day at which it goes under contract. The figure is only calculated across those properties that sold by private treaty, excluding tenders and auction sales.  When homes are selling quicker it points to stronger buyer demand and vice versa.</p>
<p>Across the combined capital cities, it took an average of 38 days to sell a home in December 2016. This figure was lower than the 41 days a year earlier and is down from high throughout 2016 of 50 days in August 2016. </p>
<p>Four of the eight capital cities now have an average days on market figure below 40 days while most of the other capital cities are now seeing the days on market figure starting to trend lower.</p>
<p><a href="https://www.propertyobserver.com.au/images/2017/02/14/Screen%20Shot%202017-02-14%20at%208.41.37%20AM.png" target="_blank">Click to enlarge</a></p>
<p><img src="https://www.urban.com.au/images/2017/02/14/Screen%20Shot%202017-02-14%20at%208.41.37%20AM.png" alt=""></p>
<p>The typical Sydney dwelling sold after an average of 33 days in December 2016 compared to 39 days in December 2015.</p>
<p>Melbourne dwellings took an average of 35 days to sell in December 2015 with the figure falling to an historic low of 29 days at the end of 2016. </p>
<p><a href="https://www.propertyobserver.com.au/images/2017/02/14/Screen%20Shot%202017-02-14%20at%208.43.15%20AM.png" target="_blank">Click to enlarge</a></p>
<p><img src="https://www.urban.com.au/images/2017/02/14/Screen%20Shot%202017-02-14%20at%208.43.15%20AM.png" alt=""></p>
<p>Dwellings were taking an average of 57 days to sell at the end of 2016 in Brisbane compared to 43 days a year earlier.  Brisbane is only city in which the days on market figure has trended higher.</p>
<p>Adelaide dwellings were taking 43 days to sell at the end of last year, which is as long as they were taking a year earlier however, the days on market figure has fallen over recent months.</p>
<p><a href="https://www.propertyobserver.com.au/images/2017/02/14/Screen%20Shot%202017-02-14%20at%208.44.20%20AM.png" target="_blank">Click to enlarge</a></p>
<p><img src="https://www.urban.com.au/images/2017/02/14/Screen%20Shot%202017-02-14%20at%208.44.20%20AM.png" alt=""> </p>
<p>The typical Perth dwelling was taking 65 days to sell at the end of 2016 compared to 58 days at the end of 2015 however, the days on market figure has reduced over the past few months.</p>
<p>Hobart has recorded a large fall in the days on market figure over the past year, reducing from 47 days in December 2015 to 35 days in December 2016.</p>
<p><a href="https://www.propertyobserver.com.au/images/2017/02/14/Screen%20Shot%202017-02-14%20at%208.45.17%20AM.png" target="_blank">Click to enlarge</a></p>
<p><img src="https://www.urban.com.au/images/2017/02/14/Screen%20Shot%202017-02-14%20at%208.45.17%20AM.png" alt=""></p>
<p>Dwellings in Darwin were taking an average of 86 days to sell at the end of 2016, up from 74 days at the end of 2015 however, over recent months the figure has begun to fall.</p>
<p>At the end of 2015, the typical Canberra dwelling was taking 47 days to sell compared to 37 days at the end of 2016.</p>
<p><a href="https://www.propertyobserver.com.au/images/2017/02/14/Screen%20Shot%202017-02-14%20at%208.46.13%20AM.png" target="_blank">Click to enlarge</a></p>
<p><img src="https://www.urban.com.au/images/2017/02/14/Screen%20Shot%202017-02-14%20at%208.46.13%20AM.png" alt=""></p>
<p>The days on market figures will be important to follow throughout 2017.  After the current growth phase has run for more than four and a half years, we are still seeing a rapid rate of sale in Sydney and Melbourne.  Low levels of stock available for sale and many willing purchases continue to drive a rapid rate of sale in Sydney and Melbourne while the rate of sale is improving in most other capital cities. </p>
<p>The days on market figure will provide a good indication of the strength of individual housing markets throughout 2017.  Keep in mind that the next two months of data (January and February) will show the regular seasonal spike but thereafter the data will be much more representative of the housing market’s performance across each capital city.</p>
<p class="p1"><span class="s1"><em>Cameron Kusher is research analyst for CoreLogic. You can contact him </em><a href="https://blog.corelogic.com.au/about/"><span class="s2"><em>here</em></span></a><em>.</em></span></p>
</body></html>

Melbourne properties selling the fastest of any capital city: Cameron Kusher 

<html><body>
<div>If it seemed that the big capital city housing markets were strengthening into Christmas then so it was, with a massive 4.9 percent jump in investment loans to a 17-month high of $13.3 billion, up 21.4 percent from a year ago in seasonally adjusted terms. </div>
<div> </div>
<div>It never pays to get too excited about month to month changes, but even with the ABS drilling its trend line through the figures it's clear than investors were resurgent. </div>
<p><a href="https://www.propertyobserver.com.au/images/2017/01/18/HF1.jpg" target="_blank">Click to enlarge</a></p>
<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/2017/01/18/HF1.jpg" alt=""></div>
<div class="separator"> </div>
<div>Total housing finance increased by 2.2 percent in the month to a strong $32.7 billion.</div>
<div> </div>
<div>Ex-refinancing, the number of owner-occupier loans picked up in the month, but the real story is the huge flip back to investment loans. </div>
<p><a href="https://www.propertyobserver.com.au/images/2017/01/18/HF2.jpg" target="_blank">Click to enlarge</a></p>
<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/2017/01/18/HF2.jpg" alt=""></div>
<p>Average loan sizes are now clearly trending up again, having been knocked back by the first salvo of macroprudential measures to curb investor lending. </p>
<p><a href="https://www.propertyobserver.com.au/images/2017/01/18/HF4.jpg" target="_blank">Click to enlarge</a></p>
<p><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/2017/01/18/HF4.jpg" alt=""></p>
<p> </p>
<div>In the owner-occupier markets, Melbourne and to some extent Queensland are seeing strong mortgage volumes for owner-occupiers. </div>
<div> </div>
<div><a href="https://www.propertyobserver.com.au/images/2017/01/18/HF3.jpg" target="_blank">Click to enlarge</a></div>
<div> </div>
<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/2017/01/18/HF3.jpg" alt=""></div>
<div class="separator"> </div>
<div>The number of first homebuyer loans jumped from 7,302 to 8,281 in November in original terms, but overall it's a tough environment for first homebuyers in Sydney (which in part accounts for why so many are turning to investment property as a first purchase).  </div>
<p><a href="https://www.propertyobserver.com.au/images/2017/01/18/HF5.jpg" target="_blank">Click to enlarge</a></p>
<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/2017/01/18/HF5.jpg" alt=""></div>
<p><br><strong><span style="text-decoration: underline;">The wrap - $1 trillion of home loans</span></strong><br><br></p>
<div>Investment loans increased for the sixth time in seven months, and this one was a big leap, taking the year-on-year increase to above 21 per cent, the highest such percentage increase since the peak of the Sydney boom in Q2 2015. </div>
<div> </div>
<div>In part thanks to net loan reclassifications and some cases of 'switching' of loan purpose, the stock of outstanding investor loans increased by only 3 per cent over the year to November.</div>
<div> </div>
<div>Owner-occupier loans outstanding on the other hand surged by more than 9 per cent to pass $1 trillion.</div>
<div> </div>
<div class="separator"><a href="https://4.bp.blogspot.com/-g5-Tg33GHjs/WH31_I5OUZI/AAAAAAAAhRU/VCV8q8CCN5c4WJuXe286wL37ZzkAc-_yQCLcB/s1600/HF6.jpg"><img src="https://4.bp.blogspot.com/-g5-Tg33GHjs/WH31_I5OUZI/AAAAAAAAhRU/VCV8q8CCN5c4WJuXe286wL37ZzkAc-_yQCLcB/s640/HF6.jpg" width="640" height="356"></a></div>
<div> </div>
<div>Regardless of the blurred classification of outstanding credit, the key takeaway is that investors were pouring back into the market in late 2016, particularly in Sydney and Melbourne,</div>
<div> </div>
<div>I'll look as those investment loans in more detail and by state. </div>
<div> </div>
<div><em><span>PETE WARGENT </span>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></div>
</body></html>

APRA shrugged? Investments loans up 21 percent: Pete Wargent

<html><body>
<p>With housing affordability now front and centre, it will be a very interesting meeting next week when the Housing Ministers meet to explain what they are doing to address these anomalies to the Treasurer Scott Morrison.</p>
<p>In NSW for example ,there are two very big property elephants about to enter the room in November and December that most don’t know about and they will have massive impacts in the clear majority of Sydney suburbs.</p>
<p>The first are the unprecedented reforms to strata laws which commence on November 30, 2016. Presently with strata properties a developer can’t acquire the entire block without the owners being in 100 per cent agreement, but from November 30, the 100 per cent has been reduced to 75 per cent. Now most who live in a house may well say – no big deal there. There is much, much more that home owners need to know, as property developers will start cherry-picking older style small strata blocks with the view to developing the entire site and they will be much higher than what is there now.</p>
<p>In late 2015, the Baird Government set up what is known today, as the Greater Sydney Commission (GSC), headed by Lucy Turnbull who has been tasked with delivering 680,000 new homes by 2031. Local councils have no say in what the GSC approve as they determine what was previously known as Local Environmental Plan (LEP) and Business Control Plan (BCP).Your traditional local council today, merely collects rates, issues parking fines, mows lawns and trims trees, the local planning side of the equation now rests with the GSC.</p>
<p>In December, the GSC will announce nine corridors across Sydney which have been approved for high – density developments. I’m told the nearest to me will be North Sydney/Crows Nest to get the ball rolling and the GSC is smart in that it won’t announce areas that are presently identified as no – go – zones with the lenders.</p>
<p>Now 680,000 new homes are clearly the biggest roll – out in NSW history where every suburb will have a role to play in some shape or form. This would explain why the NSW Government has just rubber stamped a $2 billion allocation to construct the much-awaited tunnel from the northern beaches to the Sydney CBD. Along all the major roads you can expect high-rise where previously local councils have protected historical architectural building merit, although that now appears to have been lost with the forming of the GSC.</p>
<p>Whilst it would be fair and reasonable to suggest that the major roads are the perfect fit for new high density developments I am much more concerned about the property developers cherry – picking the smaller apartment blocks as these are located off the main roads. You don’t change strata ownership laws where a block only requires 75 per cent approval now to sell to developers – for good reason without an explanation – which has not been forthcoming. These significant changes could see property developers running amok in suburbs across Sydney as the ownership ratio reduction reeks of property developers lobbying to get this through to make the acquisition process much easier.</p>
<p>The unknown part of this is that nobody (aside from developers and the GSC) know just how much of the air space above the current roof lines they will be permitted to subdivide?</p>
<p>Of course, the NSW Government is the major winner here as they will collect billions of dollars in stamp duty and land tax on a scale never seen before. This also all but guarantees a strong economy for NSW for quite some considerable time to come so that needs to be given fair consideration also.</p>
<p>The days of a single property owner holding out against a property developer are soon to be over for some of 2,000,000 people in NSW who reside in an apartment. We need to focus on the 680,000 new homes so allow me to put that into perspective – over the next 24 months approximately 230,000 brand new apartments in Sydney, Melbourne and Brisbane will be completed so that 230,000 is approximately just one third of what Sydney needs to produce over the coming 15 years.</p>
<p>This will affect everyone in NSW with Sydney copping the brunt of this building bonanza. So, when Scott Morrison meets with the Housing Ministers next week no doubt he will be smiling along with every property developer in NSW.</p>
<p>Keep an eye out for the GSC announcement in December which should be made public on Christmas eve or sometime after Christmas and before New Year’s Eve – as we all know how Governments work when it comes to handling and announcing such sensitive matters.</p>
<p>MOSMAN – 2088<br>Number of houses on the market this time last year – 75<br>Number of houses on the market last week – 63<br>Number of houses on the market this week – 59<br>Number of apartments on the market this time last year – 60<br>Number of apartments on the market last week – 47<br>Number of apartments on the market this week – 45</p>
<p>CREMORNE – 2090<br>Number of houses on the market this time last year – 6<br>Number of houses on the market last week – 9<br>Number of houses on the market this week – 7<br>Number of apartments on the market this time last year – 17<br>Number of apartments on the market last week – 23<br>Number of apartments on the market this week – 21</p>
<p>NEUTRAL BAY – 2089<br>Number of houses on the market this time last year – 6<br>Number of houses on the market last week – 8<br>Number of houses on the market this week – 5<br>Number of apartments on the market this time last year – 30<br>Number of apartments on the market last week – 23<br>Number of apartments on the market this week – 26</p>
<p><em>ROBERT SIMEON is a director of </em><em><a href="https://www.rwm.com.au/" target="_blank" title="RWM" rel="nofollow">Richardson Wrench Mosman and Neutral Bay</a> </em><em>and has been selling residential real estate in Sydney since 1985. </em></p>
<p><em>He has also been writing real estate blog </em><em><a href="https://www.rwm.com.au/news/" target="_blank" title="Virtual Realty News" rel="nofollow">Virtual Realty News</a> </em><em>since 2000.</em></p>
</body></html>

Sydney has a new property face – you’ll be either happy or angry

<html><body>
<p>The latest housing finance and housing credit data confirm that the level of activity from investors in the housing market is slowing.</p>
<p>Australian mortgage lenders have been rationing credit to the investor segment and lifting mortgage rates and these changes are starting to bite with investor demand now slowing. It remains to be seen if this slowdown lasts or, if once these limits are eased the investor segment of the market comes back to residential property.</p>
<p><a href="https://www.propertyobserver.com.au/images/2017/06/20/chart-1-4.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/06/20/chart-1-4.jpg" alt=""></p>
<p>Since August 2015, Australian mortgage lenders have been charging interest rate premiums for investors.  While standard variable mortgage rates for owner occupiers were recorded at 5.45% in August 2015, the same mortgage type for investors had a mortgage rate of 5.75% or a 30 basis point premium.  Since August 2015, the cash rate has fallen by 50 basis points however, mortgage rates have not shown the same decline. </p>
<p>At the end of May 2017, standard variable mortgage rates were recorded at 5.3% for owner occupiers and 5.8% for investors.  Despite two 25 basis point interest rate cuts since August 2015, owner occupier mortgages rates are only 15 basis points lower while investor mortgage rates are 5 basis points higher and have a premium of 50 basis points compared to a typical owner occupier mortgage.</p>
<p>The mortgage rate premium for investors appears to finally be biting into the market with weakness in both total investor credit and investor housing finance commitments.  The April 2017 lending aggregates data from the Reserve Bank (RBA) showed that investor credit rose by 0.55% over the month, its lowest monthly increase since August 2016. </p>
<p>At the same time, April 2017 housing finance data shows there was $12.6 billion in investor housing finance commitments over the month, the lowest value since September 2016.  Since August and September of last year, standard variable mortgage rates for investors have risen by 30 basis points compared to a 5 basis point increase for owner occupiers.</p>
<p><a href="https://www.propertyobserver.com.au/images/2017/06/20/chart-2-4.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/06/20/chart-2-4.jpg" alt=""></p>
<p>There are individual states and territories in which a slowdown in mortgage demand by investors will have more of an impact, namely New South Wales and Victoria.</p>
<p><a href="https://www.propertyobserver.com.au/images/2017/06/20/chart-3-3.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/06/20/chart-3-3.jpg" alt=""></p>
<p>Tasmania is the only state or territory where the value of lending to housing investors is currently rising however, in terms of the value of lending to investors, New South Wales and Victoria account for a substantial majority of overall lending. </p>
<p>This is partly a function of higher housing costs in these two states, nevertheless, New South Wales accounted for 49.3% of all investor lending nationally in April 2017 with Victoria accounting for 27.4%. A pull-back in lending to investors is inherently likely to have more of an impact on the New South Wales (Sydney) and Victorian (Melbourne) housing markets.</p>
<p><a href="https://www.propertyobserver.com.au/images/2017/06/20/chart-4-3.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/06/20/chart-4-3.jpg" alt=""></p>
<p>The potential impact on the New South Wales and Victorian housing markets of an investor slowdown is further highlighted in the final charts.  Excluding refinances (which are also trending lower) investors accounted for 55.3% of mortgage demand in New South Wales in April 2017 and 46.8% in Victoria.  In all other states and territories investors accounted for less than 40% of mortgage demand in April 2017, with the proportion trending lower over recent months in most regions.</p>
<p>It is anticipated that investor demand will continue to slow over the coming months.  Lenders are continuing to re-price mortgage rates for investors and we are yet to see the full impact of the policy changes designed to slow the level of interest-only lending.  With investor demand likely to continue to fade, it is expected that this will also contribute to a further slowing of the rate of value growth in the Sydney and Melbourne housing markets where investor demand has been significantly greater than it has been elsewhere.</p>
<p>A reduction in the pace of capital gains will add further disincentive to investors.  Considering that rental yields in Sydney and Melbourne are close to record lows, we can assume most investors are focused on the prospects for capital growth and relying on a negative gearing strategy to offset the cash flow losses.  If investors anticipate the prospects for capital gains have dissipated we may see investment demand deflect to those markets where the growth cycle is less mature than Sydney and Melbourne’s and where rental yields haven’t been depleted as substantially.</p>
<p><em>Cameron Kusher is head of research for CoreLogic. You can contact him <a href="https://blog.corelogic.com.au/about/"><span class="s2">here</span></a>.</em></p>
</body></html>

The housing investment slowdown is upon us (for at least a while)

<html><body><div class="page" title="Page 1">
<div class="section">
<div class="layoutArea">
<div class="column">
<p><span>A median price is a commonly used measure of pricing in the housing market. It represents the </span><span>‘middle’ </span><span>sale price in a list of transactions arranged in ascending (or descending) order. </span></p>
<p><span>For example, if there were eleven house sales across a suburb, the median would be the sixth most expensive sale which means that there would be an equal number of more expensive and more affordable properties. </span></p>
<p><span>It is valuable to look at other measures such as quartiles from time-to-time as this methodology provides a reflection of the more affordable and more expensive segments of the housing market in a region. If a region had 21 sales over a period the lower quartile would be the 6th cheapest sale and the upper quartile would be the 6th most expensive sale. </span></p>
<p><span>The </span><span>difference across the lower and upper quartiles provides us with more than just a view of range in prices; quartile measures also provide an indication of the diversity of housing stock in a region. A good example of this is the high profile suburb of Point Piper in Sydney which has significantly diverse housing stock due to its harbourside location. The lower quartile price is still hefty at $4,720,000 however, the upper quartile comes in at $30,000,000; more than six times the lower quartile price. </span></p>
<p><span>For </span><span>this analysis we are highlighting the capital city suburbs with the least difference between the bottom and top quartile; or the least amount of diversity in housing </span><span>stock.</span></p>
<p><span>For houses, Strathmore Heights in Melbourne has shown the smallest difference at just 5.6% based on sales over the past year. Across the unit market the suburb with the smallest differential between the lower and upper quartile was Albany Creek in Brisbane at just 1.3%. </span></p>
<p><span>Of surprise is the fact that very few of the suburbs listed for either houses or units are relatively new development areas. </span><span>In </span><span>fact across both product types the areas can generally be classified as established suburbs with relatively few new homes over recent years. This would tend to indicate that at the time of development many of the homes built were fairly similar and since that time relatively little in the way of renovation may have taken place.</span><span><br></span></p>
<p><span>The </span><span>results suggest that these suburbs have very little difference between precincts within the suburb. What this means is there are no areas particularly more or less desirable within these suburbs and this is reflected by the fact there is relatively little price variation throughout the </span><span>suburb</span><span>. </span></p>
<p><span>While using a median price as a measure is common across the property industry, by looking at quartiles it enables us to provide greater insights into the dynamics of a particular market. </span><span>These </span><span>insights simply </span><span>aren’t </span><span>available when medians are the </span><span>focus</span><span>. </span></p>
<p><span>The </span><span>results also reiterate that the median represents the typical housing cost but above and below that figure there can be significant variation in quality and cost or there can be very little </span><span>difference</span><span>. </span></p>
<p><a href="/images/2015/07/30/Screen%20Shot%202015-07-30%20at%201.17.20%20PM.png" target="_blank"><span>Click to enlarge</span></a></p>
<p><span><img src="/images/2015/07/30/Screen%20Shot%202015-07-30%20at%201.17.20%20PM.png" alt=""></span></p>
<div class="page" title="Page 1">
<div class="section">
<div class="layoutArea">
<div class="column">
<p><span> </span></p>
</div>
</div>
</div>
</div>
<p><span> </span></p>
<p><a href="/images/2015/07/30/Screen%20Shot%202015-07-30%20at%201.18.38%20PM.png" target="_blank"><span>Click to enlarge</span></a></p>
<p><span><img src="/images/2015/07/30/Screen%20Shot%202015-07-30%20at%201.18.38%20PM.png" alt=""></span></p>
<p><em>Tim Lawless is head of the CoreLogic RP Data research and analytics team and can be contacted <a href="https://blog.corelogic.com.au/author/timlawless/" target="_blank">here</a>.</em></p>
</div>
</div>
</div>
</div></body></html>

Housing Market

Editor's Picks

Have something to contribute?

Developments

New apartments

New townhouses

News

Housing Market

Editor's Picks

Receive the latest news stories to your inbox

Have something to contribute?

Developments

New apartments

New townhouses

News