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.

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;

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;

“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;

[smartcode_project:default project_id=110291 project_image_fid=302785]

<h2>Affordable product leads, premium demand remains resilient</h2>

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;

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;

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.

Jual (Shenton Park, Celsius Property) also posted a strong quarter with 28 sales, reaching 39% sold in one quarter.

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;

[smartcode_project:default project_id=148957 project_image_fid=364102]

<h2>Prices underpinned by costs, and the delivery risk is growing</h2>

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.

David Cresp said a growing challenge for private Build‑to‑Sell developers is simply securing a builder in the current environment.

“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;

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.

[smartcode_project:default project_id=108869 project_image_fid=317905]

<h2>Supply: improving later, but still constrained, and Perth lags eastern benchmarks</h2>

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;

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;

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”.

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;

Joel Robinson

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

<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.

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.

Sammut Director Julian Sammut said the group had been actively searching Brisbane for several years before identifying Toowong as the right fit.

“Brisbane was the right step for Sammut,” Sammut said.

“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.”

<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" />

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.

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.

“We are DA approved now which is very exciting,” Sammut said.

“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.”

<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" />

Bureau^proberts said the design responds to Toowong’s evolving urban character, balancing contemporary apartment living with the area’s established residential identity.

“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.

The architecture practice said the project’s form was shaped by its riverfront setting, flood considerations, neighbouring building scales, and view corridors.

“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.”

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.

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.

Sammut secures approval for debut Brisbane apartment development in Toowong

Developer Lanevick is heading back into Sydney’s apartment market after focusing more heavily on the luxury townhouse and terrace sector in recent years.

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.

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.

“Traditionally it’s been difficult for people in that market to downsize because there just hasn’t been the right product available,” Maroun said.

“We’re targeting buyers who might have 30 to 40 per cent of their house value sitting in the bank after downsizing.

“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.”

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.

“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.”

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.

“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.”

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.

“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.

Maroun said Lanevick saw a first-mover advantage within the precinct as planning controls continue to evolve to accommodate greater housing density.

“We think there’s a real opportunity there that hasn’t really been serviced properly yet,” he said.

“There’s going to be a broader evolution of the whole Gladesville village precinct over time, particularly with more activation and mixed-use outcomes.”

The Venus Street proposal will include a commercial and retail component at ground level designed to contribute to that evolving streetscape activation.

“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.

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.

&nbsp;

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

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.

The New York-based investor has focused his firm, GreenPoint Partners, on addressing the supply shortage hitting middle market housing in Australia.

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.

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.

“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.

“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.”

<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" />

GreenPoint Partners brings years of experience assembling and scaling real estate operating businesses across major markets. And Green sees a big opportunity in Australia.

“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.”

Green said being a builder-developer would give the company the capacity and flexibility it required to deliver reasonably-priced homes.

“We want it to be at that attainable level; not super high end luxury but at that attainable level,” he said.

<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" />

&nbsp;

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.

Green praised local policy settings.

“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.”

One Living is also&nbsp;looking at high-density projects and could take on more institutional funding in the future.

“The way we will be able to achieve economies of scale is through size,” Green added.

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

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.

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.

Projects by Buxton Director Heath Thompson, who is selling WM Residences, says the townhouses x that perfect middle ground be

"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.

"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."

[smartcode_project:default project_id=134646 project_image_fid=6109]

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.

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.

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.

[smartcode_project:default project_id=134646 project_image_fid=6110]

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.

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.

[smartcode_project:default project_id=134646 project_image_fid=6116]

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.

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.

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.

[smartcode_project_cta:default project_id=134646]

WM Residences fills gap in Mordialloc townhouse market

Housing Market

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GUEST OBSERVER
The CoreLogic Stratified Hedonic Index breaks the market into three segments: the most affordable 25% of properties, the middle 50% and the most expensive 25%.
The data shows over the past year the most expensive quarter of the market has recorded the greatest value growth.
Over the 12 months to August 2017, the most affordable 25% of residential properties nationally have recorded value growth of 2.9% compared to growth of 8.0% across the middle 50% of suburbs and 11.4% growth across the 25% of most expensive suburbs. 
The national chart highlights that across all market segments the annual rate of value change has started to slow over recent months.  Importantly, the chart also highlights that when there have been housing market downturns it has typically been the most expensive properties that have been hardest hit while more affordable dwellings have been more resilient to downturns. 
<h3 class="text-align-center">Annual change in dwelling values across market segments, National</h3>
Click to enlarge
<img src="https://www.urban.com.au/images/2017/09/14/2017-09-11-image1.png" alt="">
Over the period shown, August 1987 to August 2017, the thirty year period has seen values across the most affordable 25% of properties rise 1,517% compared to increases of 580% across the middle 50% of suburbs and 432% across the most expensive 25% of suburbs.  This highlights how affordability has deteriorated substantially at the more affordable end of the housing market.
The second chart shows the change in values across the three broad segments throughout the combined capital cities.  Over the 12 months to August 2017, the most affordable 25% of properties have recorded growth of 4.6% compared to 9.3% growth across the middle 50% of properties and a 12.2% change across the most expensive 25% of the market.  Like the national figures, in the event of a housing market downturn it has been the more expensive housing which has tended to see the greater value falls.
<h3 class="text-align-center">Annual change in dwelling values across market segments, Combined Capital Cities</h3>
Click to enlarge
<img src="https://www.urban.com.au/images/2017/09/14/2017-09-11-image2.png" alt="">
The third chart looks at the growth performance across regional housing markets where the change in values has been much more moderate over recent years than that across the capital cities. 
The 25% of most affordable properties in regional Australia have recorded value increases of 2.5% compared to a 4.6% change across the middle 50% and an 8.4% increase in the most expensive 25% of properties. 
Over recent years, growth in the affordable segment in regional Australia has been the strongest performed suggesting that demand has been for more affordable housing. 
However, as the regional markets have picked-up over the past couple of years, it has been the top 25% of suburbs that have outperformed. 
This is likely to indicate demand for luxury housing outside of the capital cities has risen.
<h3 class="text-align-center">Annual change in dwelling values across market segments, Combined Regional Markets</h3>
Click to enlarge
<img src="https://www.urban.com.au/images/2017/09/14/2017-09-1-image3.png" alt="">
The final chart shows the annual change in dwelling values across the three market segments throughout the capital cities.  Melbourne and Darwin are the only capital cities that have recorded the greatest change in values over the year across the most affordable suburbs and the slowest growth across the most expensive suburbs. 
In all other capital cities, either the middle 50% of suburbs or the top 25% of suburbs have recorded the fastest rate of value growth over the year.  In Melbourne, this is possibly due to the fact that Sydney and Melbourne are the strongest economies in the country and are jockeying to attract talent.  Melbourne has a significant competitive advantage over Sydney in terms of being able to offer more affordable housing and the data seems to suggest that lower priced housing is a big driver which has led to a surge in values across the lower and also middle segments of the market. 
<h3 class="text-align-center">Annual change in dwelling values across market segments, individual capital cities, to Aug-17</h3>
Click to enlarge
<img src="https://www.urban.com.au/images/2017/09/14/2017-09-11-image4.png" alt="">
The stratified hedonic index offers another interesting look into the performance of the national housing market looking at how different segments are performing.  If the current housing market slowdown continues and turns into declines, watch for whether the most affordable sector of the market is relatively stronger performed than the more expensive segment.  With record high levels of household debt and significant first home buyer incentives over recent years the trends in a future downturn could be different to what has been seen in the past.
Cameron Kusher is research analyst for CoreLogic. You can contact him <a href="https://blog.corelogic.com.au/about/" target="_blank">here</a>.
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ckusher-ujnxiKuFQs

Premium housing values rise fastest over past year

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<div class="cq-article-content-paras section">
The West Australian government is predicting the state's five-year residential property downturn is set to end.
Forecasts in the McGowan government's maiden budget suggest a modest rebound in Perth's median house price in 2018.
The government budget papers tip the median house price to improve 0.7 per cent next year then 1.5 per cent in 2019-20 and 2.7 per cent in 2020-21.
This follows a 1.3 per cent fall during this financial year. 
House prices also fell 2.8 per cent in 2016 and 1.2 per cent in 2015. 
The government blamed the downturn on a housing oversupply between 2013 and 2016.
The government will impose a 4 per cent tax on property purchases by offshore buyers from January 1 2019, which will generate $49 million over the forward estimates. 
Lino Iacomella, Property Council WA Executive Director said the McGowan State government has delivered a fair budget for tough times.
“The decision not to increase key WA property taxes in the 2017/18 budget is welcome and it recognises that the property sector has carried its fair share of the burden in earlier budgets," he said.
“Not increasing key property taxes like land tax and stamp duty will give added confidence to the recovery in WA’s property market.
“The focus on METRONET and infrastructure in the WA Budget is welcome news for the property and construction industry."
</div>
<div class="cq-article-content-paras section">
 
</div>
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j.ballantyne1990-6AQqhLzZaK

WA budget tips modest price recovery for Perth

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Sydney housing market is at its peak, according to Herron Todd White’s latest property clock.
<div class="cq-article-content-paras section">
But the "frenzied" house buying is fading, according to analysis by valuers' Herron Todd White.
Regulatory pressure<a href="https://www.afr.com/business/banking-and-finance/apra-takes-on-australias-dangerous-addiction--interestonly-home-loans-20170331-gvarm5"> </a>on lenders to encourage lower risk principal and interest loans plus larger deposits are also increasing encouraging owner-occupiers back into a market that has been dominated by investors, it noted.  
</div>
<div class="cq-article-content-paras section">
Sydney is joined by Coffs Harbour, Newcastle and NSW Central Coast at the peak of the market.
"Buyers in these markets are increasingly being drawn towards low maintenance living within close proximity of schools, public transport and other services," it concludes.
While the home buying frenzy has flattened, Melbourne's market has more room for growth, according to the analysis.
</div>
<div class="cq-article-content-paras section">
Perth, Darwin, Alice Springs and Mackay are at the bottom of the market. 
</div>
<a href="https://www.propertyobserver.com.au/images/2017/09/07/Screen%20Shot%202017-09-07%20at%202.14.39%20pm.jpg" target="_blank">Click to enlarge</a>
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/09/07/Screen%20Shot%202017-09-07%20at%202.14.39%20pm.jpg" alt="">
Perth’s housing market continues to decline with it now at the bottom of the market moving from approaching the bottom last month.
Millers Point has been a strong Sydney market. A three bedroom house at <a href="https://www.realestate.com.au/property-house-nsw-millers+point-126320070">30 Kent Street</a>, Millers Point (above) has been listed for between $2.5 million to $2.7 million.
A four bedroom house at <a href="https://www.realestate.com.au/property-house-wa-perth-126169642">33 Ruth Street</a>, Perth (below) has been listed for over $840,000.
<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/2017/09/07/33%20Ruth%20Street.jpg" alt="">
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Sydney housing market reaches peak while Perth hits bottom: HTW property clock

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Sydney housing market conditions have slid month on month and Hobart is now Australia's best performing capital city based on growth in dwelling values over the past twelve months according to CoreLogic.
Tim Lawless, CoreLogic head of research said national dwelling values remained flat during August, with capital city values edging 0.1% higher and regional dwelling values slipped 0.2% lower, adding this steady result provides further evidence that the housing market has moved through its peak growth phase. 
“We’re seeing capital gains in markets like Sydney, which were previously very strong, now being weighed down by affordability constraints and tighter lending conditions," he said.
"The knock-on effect is a curb in investment credit growth and higher mortgage rates for investment and interest only mortgages.
“Looking at the past three months, it provides a clear indication of the trends, with national dwelling values rising by only half a percent over the three months to August 31 - the lowest rolling quarterly gain since June last year.
<a href="https://www.propertyobserver.com.au/images/2017/09/01/Screen%20Shot%202017-09-01%20at%2011.13.43%20AM.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/09/01/Screen%20Shot%202017-09-01%20at%2011.13.43%20AM.png" alt="">
"The national market moved through a peak rate of growth during the three months ended November 2016, when dwelling values were rising at the rolling quarterly pace of 3.7%. 
"The slowdown in growth conditions is most visible in Sydney, where housing values had been growing strongly.
"Since values started rising in 2012, the typical Sydney dwelling has seen its value rise by 75%, equating to an approximate dollar value gain of $521,000 on the median dwelling valuation.
<a href="https://www.propertyobserver.com.au/images/2017/09/01/Screen%20Shot%202017-09-01%20at%2011.14.46%20AM.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/09/01/Screen%20Shot%202017-09-01%20at%2011.14.46%20AM.png" alt="">
"Sydney’s quarterly growth rate peaked over the three months ending October 2016 when dwelling values jumped by 6.3%. Since that time, the rolling quarterly rate of appreciation in Sydney dwelling values has consistently eased, reaching the current rate of just 0.3%.
"In Melbourne, the housing market has been more resilient to a slowdown.
"This is evident in the hedonic index results as well as auction clearance rates, which have consistently been above 70%. Inventory levels also remain exceptionally tight across the Melbourne market. 
"Melbourne’s quarterly rate of growth has slowed since peaking at 4.4% in November last year, however the most recent three month period has seen dwelling values rise by 1.9%, less than half the peak rate of growth but substantially higher than Sydney’s pace of capital gains.
"While the trend in capital gains has eased across the largest capital cities, in Hobart the market has gathered some momentum; the annual pace of capital gains, at 13.6%, is now the highest of any capital city. According to Mr Lawless, the annual growth rate for Hobart hasn’t been this high since 2004. 
“The sheer affordability of housing is likely one of the key drivers for Hobart’s values appreciation.”
"With a median house value of just $403,174, Hobart houses are approximately half the value of Melbourne and almost two thirds lower than Sydney house values.
"In addition to the strong capital gains, Hobart rental rates have also risen, providing a solid rental yield and pushing the total return well beyond the other capital cities. 
"The CoreLogic accumulation index, which measures the combined return of capital growth and gross rental yields, is showing a total annual return of 19.5% across Hobart which represents an attractive investment opportunity for savvy buyers.
<a href="https://www.propertyobserver.com.au/images/2017/09/01/Screen%20Shot%202017-09-01%20at%2011.15.41%20AM.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/09/01/Screen%20Shot%202017-09-01%20at%2011.15.41%20AM.png" alt="">
"In Perth and Darwin, housing values have continued to trend lower over the past month and rolling quarter. However, the annual trend highlights the rate of decline has been easing.
"Since peaking in 2014, Perth dwelling values have declined by a total of 10.8%, while the cumulative decline across Darwin has been more severe with values down 18.6% from the market peak.
“The silver lining around the decline in values is a substantial improvement in affordability.
"Based on a dwelling price to income ratio, Darwin is Australia’s most affordable capital city with a ratio of 4.4. This means dwelling prices are typically 4.4 times higher than gross household incomes across the city.”
"Rental yields slipped to a new record low across Australia in August.
"Nationally, the gross yield on a dwelling reduced to 3.62% in August, down from 3.87% in August last year. “Record low yields are largely a capital city phenomenon, with yields across the combined regional areas of the country tracking 165 basis points higher than the combined capital city yield..
"While there was a reduction in gross rental yields across each of the capital cities over the past twelve months, only Melbourne (2.9%) and Sydney (3.0%) are recording rental yields at record lows.
"To provide some context about why yields are so low in these cities, dwelling values in both cities are up approximately 13% over the past twelve months while rents only increased by 4.7% across Melbourne and 4.0% across Sydney.
“The imbalance between rental growth and value growth has been a constant feature of the housing market over the growth cycle to date, however with the pace of capital gains easing at the same time that rents trend higher, the Sydney and Melbourne markets could be approaching the bottom of their yield cycle.”
“Slower growth conditions in Sydney, and to a lesser extent Melbourne, are likely to be a welcome evolution in housing market conditions by policy makers such as the RBA. So far the trend has been gradual, implying that macroprudential policies are having a flow through effect on housing conditions.
“The growth cycle in both cities has run for five and a half years, providing a substantial wealth boost for home owners but also creating much frustration for those who don’t own a home. Sydney and Melbourne dwelling values have increased by 75% and 56% respectively since the growth cycle commenced in early 2012, however growth rates have been far more moderate across the other capital cities.”
“The policy settings around investment credit growth and new interest only settlement targets have seen credit policies tighten and pushed mortgage rates higher for both investor and interest only loans. These disincentives are likely to continue to weigh down investment demand which will have a more pronounced effect in those markets where investors are most concentrated,” Mr Lawless said.
“Clearly, tighter credit policies and higher mortgage rates for investors are dampening the Sydney market more than others.
"Another contributing factor to slower home value appreciation is the high price of housing relative to incomes, particularly in Sydney.
“The recent availability of stamp duty concessions in New South Wales and Victoria is likely to provide some support for first time buyers, however it’s not likely that that a rise in first home buyer activity will completely offset the demand gap left by fewer investors.
“Overall, the outlook for Australia’s housing market depends on a broad range of factors including local economic and demographic conditions as well as supply factors and credit polices. However, if the current trends continue, Sydney dwelling values could start to drift lower over coming months.
“If the current trends continue, by the end of the year we could see dwelling values across Australia’s two largest housing markets, Sydney and Melbourne, trend lower as they move through their cyclical peaks.
“Historically, a negative shift in home values has followed every growth phase, so it’s reasonable to expect a period of moderate value falls following such a sustained period of strong capital gains.”
"With the Spring selling season about to commence it will be interesting to monitor the impact of higher inventory levels on the Sydney and Melbourne market.
"Particularly so given evidence of slowing growth conditions accompanied by stock levels already being higher than they were a year ago across both cities." 
 
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jonathanchancellor-7SQnKwU6yx

Sydney housing market conditions slide month on month: CoreLogic

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GUEST OBSERVER
Approvals dipped 1.7% in July, the pull-back from June’s 11.7% jump much milder than expected (market forecast was –5%, Westpac –4%). The detail even showed a further small rise in high rise approvals (about 4%) which had been a big driver of the June gain (up about 15%mth).
Non high rise approvals look to have pulled back about 3% from an 8.7% gain in June with private house approvals holding flat showed more Mid-rise approvals look to have pulled back while detached house approvals were flat.
Note that this is broadly consistent with construction related finance approvals which have shown a clear firming in recent months.
By state, a solid gain in NSW was offset by declines elsewhere.  Details  Private houses  flat%mth, 2.3%yr Private 'units'    –6.7%mth, –29.5%yr     
NSW     1.5%mth, –15.9%yr Vic       –0.3%mth, –7.8%yr Qld       –2.6%mth, –20.1%yr WA       –11.1%mth, –21%yr SA        0.3%mth, 6.3%yr          
Alteration &amp; additions^   –5.3%mth, 4.3%yr Non-residential^             2.4%mth, 19%yr ^ value  
 
Matthew Hassan is senior economist with <a href="https://www.westpac.com.au/" target="_blank">Westpac</a>.
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Matthew_Hassan-HHWHptmrw4

Australian dwelling approvals dipped in July: Matthew Hassan

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CoreLogic recently released the June 2017 Mapping the Market Report. 
The report looks at how the cost of housing has shifted across Australia’s capital cities by suburbs over the past five years by comparing thematic maps which show suburb median values.  
Over the five years to June 2017, there has been a significant decline in the number of suburbs with a median value below $400,000 while there has been a significant increase in suburbs with values above $1 million. 
The decline in lower value housing and rise in more expensive housing is most prevalent in Sydney and Melbourne however, it is also prevalent to a more moderate degree in other capital cities.
The following maps show the suburb median house values across the capital cities in June 2012 and June 2017. 
The circles on the map represent distances of 10 kilometres, 20 kilometres and 50 kilometres from the capital city GPO.
<a href="https://www.propertyobserver.com.au/images/2017/08/11/Screen%20Shot%202017-08-11%20at%201.07.36%20pm.jpg" target="_blank">Click to enlarge</a>
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/08/11/Screen%20Shot%202017-08-11%20at%201.07.36%20pm.jpg" alt="">
In June 2012, 21.3% of Sydney suburbs had a median house value of more than $1 million, by June 2017 55.7% of suburbs had a median house value in excess of $1 million while only 8.7% of suburbs had a median value below $600,000 and most were located more than 50 kilometres from the CBD.
<a href="https://www.propertyobserver.com.au/images/2017/08/11/Screen%20Shot%202017-08-11%20at%201.07.46%20pm.jpg" target="_blank">Click to enlarge</a>
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/08/11/Screen%20Shot%202017-08-11%20at%201.07.46%20pm.jpg" alt="">
In June 2012, 9.5% of Melbourne suburbs had a median house value in excess of $1 million and by June 2017 that figure had increased to 32.6% of suburbs. 
On the flip-side, 24.3% of Melbourne suburbs in June 2012 had a median house value below $400,000 compared to just 2.7% by June 2017.
<a href="https://www.propertyobserver.com.au/images/2017/08/11/Screen%20Shot%202017-08-11%20at%201.07.58%20pm.jpg" target="_blank">Click to enlarge</a>
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/08/11/Screen%20Shot%202017-08-11%20at%201.07.58%20pm.jpg" alt="">
In June 2017 only 5.9% of Brisbane suburbs had a median house value of more than $1 million compared to 1.6% in June 2012. 
In June 2017, 23.2% of suburbs had a median house value of less than $400,000 compared to 34.5% in 2012.
<a href="https://www.propertyobserver.com.au/images/2017/08/11/Screen%20Shot%202017-08-11%20at%201.08.10%20pm.jpg" target="_blank">Click to enlarge</a>
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/08/11/Screen%20Shot%202017-08-11%20at%201.08.10%20pm.jpg" alt="">
In Adelaide, 43.0% of suburbs had a median house value of less than $400,000 in June 2012 compared to 25.8% in 2017. 
37.2% of Adelaide suburbs had a median house value of more than $600,000 in June 2017 compared to 20.6% five years earlier.
<a href="https://www.propertyobserver.com.au/images/2017/08/11/Screen%20Shot%202017-08-11%20at%201.08.26%20pm.jpg" target="_blank">Click to enlarge</a>
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/08/11/Screen%20Shot%202017-08-11%20at%201.08.26%20pm.jpg" alt="">
7.8% of Perth suburbs had a median house value of more than $1 million in June 2012 compared to 11.1% by June 2017. 
Only 17.7% of Perth suburbs had a median house value of less than $400,000 in June 2017 and this figure was down from 29.0% five years earlier.
<a href="https://www.propertyobserver.com.au/images/2017/08/11/Screen%20Shot%202017-08-11%20at%201.08.38%20pm.jpg" target="_blank">Click to enlarge</a>
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/08/11/Screen%20Shot%202017-08-11%20at%201.08.38%20pm.jpg" alt="">
In June 2012, the majority (67.4%) of Hobart suburbs had a median house value of less than $400,000 however, by June 2017 43.6% of suburbs had a median below $400,000. 
Although the number of suburbs with typical values below $400,000 has reduced over the past five years, 89.4% of the cities suburbs have a median house value below $600,000 and no suburb has a median value in excess of $1 million.
<a href="https://www.propertyobserver.com.au/images/2017/08/11/Screen%20Shot%202017-08-11%20at%201.08.51%20pm.jpg" target="_blank">Click to enlarge</a>
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/08/11/Screen%20Shot%202017-08-11%20at%201.08.51%20pm.jpg" alt="">
Darwin has suffered through a lack of more affordable housing for a number of years now with only 1.8% of suburbs having a median house value below $400,000 in June 2017, down from 1.9% five years earlier. 
54.5% of Darwin’s suburbs had a median house value of more than $600,000 in June 2017 compared to 50.9% five years ago. 
The data highlights that Darwin housing affordability is relatively unchanged over the past five years.
<a href="https://www.propertyobserver.com.au/images/2017/08/11/Screen%20Shot%202017-08-11%20at%201.09.04%20pm.jpg" target="_blank">Click to enlarge</a>
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/08/11/Screen%20Shot%202017-08-11%20at%201.09.04%20pm.jpg" alt="">
In June 2012, just 1.1% of suburbs in Canberra had a median house value of less than $400,000, by June 2017 no suburbs sat below the $400,000 threshold. 
The proportion of suburbs with a median value of more than $1 million has shifted from 8.6% in June 2012 to 12.0% in June 2017.
The charts and commentary highlight how the supply of affordable housing has reduced over the past five years. 
The decline in lower priced housing stock is most stark in Sydney and to a lesser but still significant degree in Melbourne. 
The fall in mortgage rates over the past five years has made servicing mortgage debt easier and eat up a lower proportion of household income. 
At the same time there has been little growth in household income but dwelling value in Sydney and Melbourne in particularly have increased significantly. 
For those that own a home and have seen values rise it has created a significant wealth boost while for potential buyers, particularly in Sydney and Melbourne, wages haven’t kept up with value growth which has led to a deterioration in the supply of lower priced housing. 
All of these factors have led to extreme difficulty in saving a large enough deposit to enter into the Sydney and Melbourne housing markets for those that don’t already own. 
While the problems are not so prevalent elsewhere, across all cities the supply of lower priced housing has reduced over the five years to June 2017 highlighting greater difficulty for lower income households to own residential property.
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Affordable housing in Sydney and Melbourne declines in past 5 years

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The property market in the Pilbara region showed signs of recovery in the June quarter, with preliminary data showing Port Hedland and Karratha Urban Area experienced positive results across a number of key market indicators. 
Sales transactions in Port Hedland were up by 18 per cent in the three months to June, Landgate data showed. 
Meanwhile, the median house price in the Karratha Urban Area rose 7.1 per cent to $300,000. 
REIWA president Hayden Groves said Port Hedland and Karratha had faced their share of challenges due to the slowdown in the resources sector, but the recovery signs were encouraging. 
In Port Hedland, deal activity rose across most price ranges, with the biggest spikes in the $150,000 to $500,000 range. 
However, Port Hedland’s preliminary median house price fell in the June quarter to $220,000, which can be attributed to a reduction in sales in the over $600,000 price range, said Groves. 
“In the Karratha Urban Area, the lift in median house price was due to an increase in sales occurring in the $360,000 to $725,000 range, which pushed the regional area’s median up,” Groves added. 
The average time to sell a house also fell significantly in the quarter. 
“The improvement in sales transactions in Port Hedland had a positive effect on the average amount of time it took to sell a home, with the area’s average selling day figure reducing by 21 days over the quarter. Similarly, the improvement in median house price in Karratha Urban Area translated into its average selling days figure, reducing by almost 30 days, which is very substantial,” Groves said. 
He said the Pilbara region would be one to keep a close eye on, considering planned investments in the iron rich province. 
The proposed developments in port and rail infrastructure is estimated to create approximately 3,300 jobs, which would help the region’s economic growth and would have a positive flow on effect to the property market, he concluded. 
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WA's Pilbara region shows early signs of housing recovery: REIWA

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<img src="https://counter.theconversation.edu.au/content/80956/count.gif?distributor=republish-lightbox-advanced" alt="The Conversation" width="1" height="1">
GUEST OBSERVER
A recent suggestion that new housing on inner-city public land should start from a presumption of 100 percent social housing prompted indignation in government circles. “We can’t condemn another generation of Victorians to live in housing poverty,” huffed the housing minister, Martin Foley.
It’s curious, then, that we heard barely a peep about the latest government announcement that the height of an apartment tower associated with the Queen Victoria Market makeover will be reduced by removing the original affordable housing component to a separate, smaller development.
It is tempting to conclude that both responses accord, naturally, with the interests of the developers of private housing. But that would be to over-simplify the complex issue of social mix. It is increasingly clear there is no one-size-fits-all.
The principle of social mix now routinely drives public housing estate renewals and new housing builds on surplus public land. This is usually expressed in a 50:50 mix of social (public and community) and private housing, though the social component is often much smaller. As the stock of public land is ever diminishing, and affordable housing is in such short supply, this is problematic.
I have argued before that government commitments to social mix are often disingenuous. They are more likely to be driven by an ideological imperative to privatise public assets, or at best to secure upgrades to public housing without having to fund them directly.
What does the evidence tell us?
Soon-to-be-published research by Abdullahi Jama and I on the Carlton public housing estate redevelopment supports these conclusions.
Our findings show that public and private residents on the new estate are not mixed. They are divided into separate buildings with separate gardens, explicitly with a view to increasing the value of the private apartments.
The case that normally follows from such a finding is that public and private households should be “salt and peppered” through new apartment buildings to encourage social mixing. While Abdullahi and I agree this is a necessary precondition for social mixing, this is not the entirety of our argument. We question the very basics of the policy orthodoxy on social mix.
The rationale for building upmarket private housing in low-income areas draws on the neighbourhood effects thesis, which says that concentrations of poverty exacerbate its effects.
This might be the case in large areas of disadvantage, such as the US Rust Belt cities, parts of the UK and even some outer suburbs of Sydney and Melbourne. But it doesn’t stand up in highly resourced, gentrified inner cities where community facilities and opportunities for interaction are plentiful.
Even where poverty is widespread, studies from Toronto, Vancouver, Amsterdam and London show that imposed social mix disrupts support networks and social structures. Involuntary displacement from a neighbourhood often has serious effects on physical and mental health.
Minority communities may benefit from concentration in terms of safety and maintaining their cultural heritage. A substantial body of research shows that social mix policies do not replace the social capital they displace.
So, are there good reasons to introduce social mix?
The strongest argument is the reduction of stigma that for some people comes with public housing. If the public housing is indistinguishable from private housing, the public tenants’ wellbeing is considered to be improved.
It’s not entirely clear, however, whether this is due as much to the housing being new and decent as to having private residents as neighbours. Also unresolved is the question of whether stigma is felt as keenly on estates in gentrified cities, which are islands of public housing in seas of inner-city privilege, as it may be in widely disadvantaged neighbourhoods.
There is certainly evidence that, for some people, being thrust among others from different class and socio-economic groups can increase feelings of inadequacy, discomfort and sometimes hostility.
So how do we provide affordable housing?
These issues vary across place, time and individuals. What is clear is that different responses are needed accordingly.
It is also clear that, with dire shortages of affordable housing in so many cities, all opportunities should be seized to build as much affordable housing as possible. That’s not just public and community housing, but “key worker” housing, “below market rent” housing, co-op housing and community land trusts. Models for all these exist and should be encouraged and explored.
A diversity of housing types must include diverse sources of funding, with a range of support programs. Involving future residents in design and ensuring they know what they’re moving into, and enabling people to organise their own housing, are far more effective ways of building social harmony than enforcing a rigid notion of mix.
Separate buildings for social tenants and private residents next to the Vic Market might be a perfectly reasonable response. But it should come from nuanced public policy and optimal use of public resources, rather than the developers and their sales people.
<a href="https://theconversation.com/profiles/kate-shaw-39629" target="_blank"></a>
<a href="https://theconversation.com/profiles/kate-shaw-39629" target="_blank">Kate Shaw</a> is Future Fellow, University of Melbourne and author for <a href="https://theconversation.com/au" target="_blank">The Conversation</a>.
<a href="https://theconversation.com/profiles/kate-shaw-39629" target="_blank"></a>
 
<a href="https://theconversation.com/profiles/kate-shaw-39629" target="_blank"> </a>
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jchancellor-FAypfDUnLy

Social mix in housing? One size doesn’t fit all, as new projects show

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Australia’s economy could be at risk from a housing market downturn if Chinese buyers retreat from residential property in Australia, according to a former US Federal Reserve official.
Dr Nellie Liang, who was in Sydney recently to share her views on financial stability with the Reserve Bank of Australia, said a "trigger" for a real estate price collapse could be a reversal in international capital flows, The Australian Financial Review reported.
Dr Liang, who headed the Fed's division of financial stability, said Australian policymakers were right to be "really concerned" about high house prices and household debt that was elevated by international standards”.
RBA Governor Philip Lowe has voiced his concern about high household debt earlier and also the heated East Coast residential property market.
"The problem with high house prices and high household debt is it leads to unsustainable debt burdens if house prices fall," Dr Liang said in Washington.
"Even without debt, when you have the outsiders buying properties, if the outside money pulls out and prices fall, there's innocent bystanders who took on debt and end up underwater, which could lead to defaults.
"Twenty per cent moves in house prices isn't crazy anymore."
Since last year, Beijing has narrowed the window for capital outflows and it is already having an impact. At the same time, Australian banks have tightened lending criteria to investors due to regulatory requirements. 
China's Wanda Group recently decided to sell majority stakes in its Sydney and Gold Coast luxury apartment and hotel projects, valued at a total of $2 billion.
Other Chinse entities and individuals are also facing demands to unwind and halt offshore investments in a bid to stop capital flight and bolster the value of the yuan.
Reflecting this, China's foreign exchange reserves recorded their sixth straight monthly rise, increasing by $US24 billion ($30 billion) to $US3.08 trillion in July, figures published last week showed, the AFR reported.
National Australia Bank says property experts estimate foreign acquirers in the combined established and new property markets represented 17 per cent of all apartment buyers and 11 per cent of house buyers in the June quarter. 
Chinese buyers make up the largest percentage of foreign buyers.
Dr Liang was invited to speak at a closed-door Reserve Bank conference in Sydney in March. The 30-year Fed banker retired as the director of the financial stability division  last year.
Australia's surging home prices and high household debt – about 190 per cent of disposable income – were key discussion points about financial stability.
She specially pointed to Australia’s exposure to Chinese investors. 
“China is such a big economy now, and they have links to other countries, including to Australia and Canada through the housing markets, that people need to be thinking about," said Dr Liang, now a senior fellow at the Brookings Institution and consultant to the International Monetary Fund in Washington.
Sydney and Melbourne home prices are on track for their fifth straight year of double-digit price growth.
Sydney's median dwelling price has surged 12 per cent over the past year to $856,000, according to CoreLogic.
Melbourne’s is rising faster with, the median dwelling price jumping 16 percent to $655,000 over the same period.
Some property and China experts believe official figures underestimate the real extent of foreign money pouring into Australian real estate because Chinese Australians and permanent resident holders act as conduits to buy property for friends and family back home.
The Reserve Bank has kept the cash rate on hold at a record low of 1.5 per cent since August 2016, helping drive up house prices. Even the APRA’s regulatory moves have had only limited effect going by the recent investor lending numbers, despite the March and June rate hikes by most banks.
 
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Former US Fed official says Australian house prices face Chinese investor exodus risk

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RBA Governor Philip Lowe says that there are some signs of a slowing in the housing markets in Sydney and Melbourne, although these signs are not yet definitive.
In a speech today to the House of Representatives Standing Committee on Economics, Governor Lowe said the central bank was closely watching the housing market. 
“Conditions continue to vary significantly across the country. The Melbourne and Sydney markets have been much stronger than elsewhere. There are some signs of slowing in these two markets, although these signs are not yet definitive,” he said. 
“In some markets, a large increase in the supply of new dwellings is expected over the next year as new buildings are completed. This increase in supply is expected to have an effect on prices.”
He highlighted regulatory measures by the Australian Prudential Regulation Authority and the RBA’s focus on containing financial risks. 
“Our assessment is that the various supervisory measures – including a focus on lending standards and placing limits on investor and interest-only lending – will work to strengthen household balance sheets over time. Financial institutions have adjusted to the new requirements and these requirements are contributing to the resilience of the system as a whole.”
 
The prudential regulators steps to restrict bank lending for interest-only loans was in response to heightened risks from the hot property market and to ensure that banks maintain adequate capital.
Banks have raised interest rates for investment lending and also interest-only loans, while offering incentives to owner occupiers and encouraging principal and interest-only loans.
Lowe noted the increase in spending on public infrastructure, particularly transport, which is having some positive spin-offs elsewhere in the economy. 
But the bank was still concerned about household debt levels. 
“In my view, the underlying drivers of the slower wage growth in Australia are much the same as we are seeing overseas.
"At the same time, the household sector is also dealing with higher levels of debt relative to income.
"Higher electricity prices are also affecting household budgets.
"This all means that consumer spending behaviour is something we continue to watch carefully.”
 
 
 
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