Repeat buyers are one of the strongest measures of confidence in any apartment development.

At <a href="https://www.apartments.com.au/new-apartments/era-newcastle-west-124-126-bull-street-newcastle-west-nsw-2302">ERA</a> in Newcastle West, some purchasers are returning to <a href="https://www.apartments.com.au/developers/gwh">GWH</a> after living at the developer's One Apartments. Their decision to purchase again was driven by the quality of life they found after moving into their first GWH home.

Keith Wilton had spent years living in a house in East Maitland before deciding it was time for a change. Apartment living had always been on his radar, but he was selective about what he wanted.

<iframe allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" allowfullscreen="" frameborder="0" height="315" referrerpolicy="strict-origin-when-cross-origin" src="https://www.youtube.com/embed/FH_1EzB-1vs?si=XScVlP1ERsTDJoME" title="YouTube video player" width="560"></iframe>

"I had some boxes I wanted to tick," he says.

Keith points to the open-plan design, generous outdoor areas and considered inclusions as key reasons One Apartments worked for him.

“One of those things was a nice indoor open plan area, but also I wanted a nice outdoor open area that I could entertain on in summer or Christmases or birthdays,” he says.

He also found value in the smaller details, from integrated appliances to shared resident spaces including the pool, cinema and rooftop areas.

[smartcode_project:default project_id=135096 project_image_fid=356818]

After comparing several developments, he chose One Apartments because of GWH's longstanding local reputation and his own experience working with the developer on a commercial project more than a decade earlier.

"I knew that they were local, that the quality of the build was going to be up there. I'd looked at other apartment complexes around and close by, and I just knew that here was a better decision location wise."

Today, Keith says the move has completely changed how he experiences Newcastle.

"I enjoy living in this location because it's more of a lifestyle change. That Newcastle city living where you can walk to restaurants and bars and even beaches and parks and even shopping across the road."

[smartcode_project:default project_id=135096 project_image_fid=356828]

Beyond the location, he says it's the sense of community that has surprised him most.

"Everyone loves living here because they chose to live here, but everyone looks out for each other. It's a real great community feel here."

For Aimee and Lyle Goodman, the journey started almost by chance.

<iframe allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" allowfullscreen="" frameborder="0" height="315" referrerpolicy="strict-origin-when-cross-origin" src="https://www.youtube.com/embed/tsioMLcnjas?si=zq-ys3JuWpfa5hFv" title="YouTube video player" width="560"></iframe>

The couple happened to be having coffee in Newcastle when they noticed the site where One Apartments was about to begin construction.

"We were aware GWH was planning a development," Aimee says. "We made one phone call and things moved pretty quickly after that."

As busy business owners, they initially thought apartment living would simply reduce the maintenance that came with larger homes. Instead, it fundamentally changed how they spent time together.

"We actually catch up more as a family now," Aimee says.

"We've had homes with big yards and lots of space, but everyone ended up in different rooms. Here we'll have dinner together, the kids can play, and we spend far more quality time together."

[smartcode_project:default project_id=135096 project_image_fid=356829]

Lyle says their confidence came from GWH's reputation within Newcastle's building industry.

"I know people who've worked across different apartment projects, and whenever GWH came up the feedback was always the same. They're rock solid. They're quality."

That confidence only grew throughout the buying process.

"One of the things that really impressed us with GWH was the whole process, was the communication," Lyle says. "It was consistent, it was regular, there was no problem if we had some weird questions, there was no problems in getting answers."

[smartcode_project:default project_id=135096 project_image_fid=351104]

Aimee says one moment stood out.

"The project actually finished on time. We realised we needed to hurry up and sell our house because everything was happening exactly when they said it would."

The positive experience at One Apartments ultimately gave all three buyers the confidence to purchase again with GWH, this time at ERA.

Their confidence reflects what many buyers are seeking in today's apartment market. Location remains important, but so too does certainty around delivery, quality and long-term liveability.

[smartcode_project:default project_id=135096 project_image_fid=356822]

ERA builds on those foundations with 280 one, two and three-bedroom apartments across two landmark towers in <a href="https://www.apartments.com.au/developments/newcastle-west-nsw-2302">Newcastle West</a>.&nbsp;

Designed by <a href="https://www.apartments.com.au/architects/fk-australia">Fender Katsalidis</a>, the project will include more than 2,000 square metres of resident amenities, including a resort-style pool, gym, sauna, private cinema and rooftop entertaining spaces overlooking the harbour and coastline.&nbsp;

The development is also within walking distance of the Newcastle Interchange, Honeysuckle, Darby Street, the harbour foreshore, restaurants, retail and the city’s beaches, continuing the walkable lifestyle that existing GWH buyers say has transformed how they live.

[smartcode_project:default project_id=135096 project_image_fid=356826]

For Keith, the appeal remains straightforward.

"You feel at home even before you've moved into your home."

For Aimee, the change is measured in time.

“I just felt like I had more time,” she says.

[smartcode_project:default project_id=135096 project_image_fid=351102]

Construction at ERA is now underway, with more than half of the residences already sold and limited two and three-bedroom apartments remaining in the East Tower release. Priced from $980,000 for two-bedroom residences and $1.46 million for three-bedroom residences, buyers can secure an apartment with a 10 per cent deposit, with premium homes offering ocean views from Level 8 and harbour views from Level 10.

ERA is also backed by Resilience Insurance's 10-year Latent Defects Insurance policy, providing protection against structural or waterproofing defects for 10 years after completion. The project is anticipated to be completed in early 2028.

[smartcode_project_cta:default project_id=135096]

Joel Robinson

From ONE to ERA: Why buyers are choosing GWH again in Newcastle West

Virgate Property Group is preparing to commence construction of Verdé, its new apartment development in Melbourne's Arts Precinct at Southbank, following a strong run of sales that has seen more than half of the project's 173 apartments secured.

Verdé has attracted a broad mix of first home buyers, owner-occupiers upgrading from nearby inner-city suburbs and investors, with younger owner-occupier couples aged between 28 and 45 accounting for the strongest enquiry. Many are already living in Southbank, South Melbourne, Albert Park, Port Melbourne, South Yarra and the CBD.

"Verdé is located in one of the most desirable pockets of southern Melbourne," Blair Property Group Director Darren Blair, who is managing sales at Verdé, said.

"It's within walking distance of the Arts Centre, Royal Botanic Gardens, Albert Park Lake, and Southbank's restaurants and retail. It's a great lifestyle location with strong amenity and liveability, which made it a very attractive choice for the project."

[smartcode_project:default project_id=4661 project_image_fid=372549]

Virgate was already familiar with the precinct, having previously delivered the successful Domain House development in neighbouring South Melbourne. That experience gave the developer confidence to acquire the Coventry Street site and continue expanding its presence in Melbourne's inner south.

"We had been keeping an eye on the site and the broader precinct for a few months before deciding to move forward with the acquisition," Virgate said.

The project was ultimately secured in 2020 following feasibility studies, planning assessments and due diligence, with the brief centred on delivering "a high-quality, considered design that feels both refined and fit for purpose."

[smartcode_project:default project_id=4661 project_image_fid=314259]

Designed by <a href="https://www.apartments.com.au/architects/bruce-henderson-architects">Bruce Henderson Architects</a>, Verdé comprises 173 one, two and three-bedroom apartments priced from $599,000. The architecture is distinguished by a faceted glass façade that responds to both the site's outlook and Melbourne's changing light conditions.

According to Bruce Henderson Architects, the coloured glazing gives the building a distinctive identity while also providing privacy and solar shading, with residences oriented to capture views across the bay, city skyline and surrounding parklands.

Inside, <a href="https://www.apartments.com.au/interior-designers/designoffice">DesignOffice</a> has created interiors focused on natural light, efficient planning and enduring materials. Apartments feature engineered oak flooring, natural stone benchtops, floor-to-ceiling glazing and SMEG appliances, while a restrained material palette aims to complement the expansive outlooks rather than compete with them.

[smartcode_project:default project_id=4661 project_image_fid=372550]

Resident amenity has also been designed around everyday functionality rather than occasional use. Facilities include a concierge-serviced lobby, residents' lounge with fireplace, library and co-working space, gym, terrace garden with barbecue facilities, ground-floor café, and package delivery management.

The project's location continues to be one of its strongest drawcards. Positioned on Coventry Street, Verdé sits within walking distance of the National Gallery of Victoria, Arts Centre Melbourne, Royal Botanic Gardens and Albert Park Lake, while Southbank's dining precinct, Sturt Street trams and the new ANZAC Station are all nearby. The surrounding education catchment also includes Melbourne Grammar, Melbourne Girls Grammar, Mac.Robertson Girls' High School and several major university campuses.

The sales team says buyers have responded particularly well to the combination of location, design quality and long-term liveability.

"They're responding really positively to the quality of the design, premium resident amenities and the uninterrupted views. Many also appreciate the location and how connected it is to everything they need."

The ability to secure stamp duty savings before completion has also been a key factor for purchasers, alongside the opportunity to personalise finishes ahead of settlement.

With construction set to commence soon and more than half the apartments already sold, Verdé enters its next phase as one of the Arts Precinct's more established apartment developments, offering remaining buyers an opportunity to secure a residence before construction advances further. Expected completion is scheduled for late 2027.

[smartcode_project_cta:default project_id=4661]

Virgate's Verdé Southbank moves toward construction as sales fly past halfway stage

Downsizer-focused apartment development Kooyongkoot in Hawthorn has been recognised at the 2026 Better Future Melbourne Design Awards, taking home Gold and Silver awards in two categories.

<a href="https://www.apartments.com.au/new-apartments/kooyongkoot-hawthorn-1-kooyongkoot-road-hawthorn-vic-3122">Kooyongkoot</a>, currently being delivered by developer PQD and designed by Cera Stribley, received Gold in the Interior Design – Proposed category and Silver in the Architecture – Proposed category.

The dual recognition reflects the design approach behind the boutique development on prestigious Kooyongkoot Road, where the focus has been on creating homes for downsizers seeking the space, quality and functionality of a detached house within a low-rise apartment building.

Rather than maximising apartment numbers, <a href="https://www.apartments.com.au/developers/pqd">PQD</a> and <a href="https://www.apartments.com.au/architects/cera-stribley-architects">Cera Stribley</a> limited the development to just 18 residences, allowing for larger floorplans, greater privacy, generous landscaping and expansive communal spaces.&nbsp;The majority of the apartments also benefit from corner aspects, allowing for dual sources of natural light.

Now around 70 per cent complete and on track for completion in November 2026, Kooyongkoot will comprise a mix of garden residences, ter​race apartments, sub-penthouses, and is crowned by two half-floor penthouses with direct lift access and private rooftop terraces.

[smartcode_project:default project_id=102717 project_image_fid=355297]

The Silver Award for Architecture recognised the way the building responds to its prominent corner position at the ent​rance to Hawthorn's Scotch Hill precinct, one of Melbourne's most established residential neighbourhoods.

Rather than competing with the grand homes that line Kooyongkoot Road, the architectural approach focused on restraint and longevity, using curved brickwork, generous landscaping and carefully considered proportions to integrate with the existing streetscape.

"The form feels fluid and timeless, as though shaped by the landscape itself – architecture that belongs, rather than competes," said Chris Stribley, Co-Founder and Managing Principal of Cera Stribley.

The judging submission also highlighted practical innovations throughout the building, including lift cores servicing only nine homes each, a central landscaped lightcourt designed to bring daylight and ventilation into the building, and fully enclosed private storage rooms with lighting, power and shelving to better accommodate residents transitioning from larger family homes.

[smartcode_project:default project_id=102717 project_image_fid=355293]

The Gold Award for Interior Design recognised the project's focus on long-term liveability rather than display-home aesthetics.

According to the awards submission, the interiors were designed from the inside out, prioritising how homes would function over decades of daily use through generous proportions, practical storage, durable natural materials and flexible layouts.

The specification includes natural stone throughout, upgraded acoustic glazing, V-ZUG appliances and fully enclosed storage rooms, alongside an amenity offering focused on wellness, entertainment and everyday convenience.&nbsp;

Residents will have access to a gym and yoga studio, a wellness centre featuring traditional and infrared saunas, a cold therapy shower and treatment room, as well as a residents' lounge and golf simulator/cinema room for entertainment.&nbsp;Kooyongkoot has also considered the everyday convenience of its residents by offering a private carwash and pet wash facilities on site as well as dedicated parcel lockers and oversized fully enclosed storage rooms.&nbsp;

[smartcode_project:default project_id=102717 project_image_fid=355303]

The project's attention to detail has already resonated with buyers. Earlier this year, Kooyongkoot recorded one of Boroondara's highest apartment sales when an $8 million penthouse was purchased by a Melbourne CEO downsizing from a nearby family home.

"Every detail feels deliberate, from the overall design down to the smallest touches," the purchaser said.

"The level of quality and refinement is exceptional, but what really sold it was how liveable it felt... It felt like a place where everything had been considered, not just a luxury building."

[smartcode_project:default project_id=102717 project_image_fid=355304]

Sustainability also formed a key part of both award submissions. Kooyongkoot is targeting a minimum 7.5-star NatHERS rating across all residences, supported by passive design principles, high-performance glazing, EV charging infrastructure, water reuse systems and a wellness model focused on lower-energy dry facilities rather than pools and large wet areas.

Located within walking distance of Scotch College, Methodist Ladies' College, Koo​yong Lawn Tennis Club, Aubur​n Village and Camberwell Junction, Kooyongkoot continues to target owner-occupiers looking to remain in Melbourne's inner east without compromising on space or quality. A limited selection of two, three and four-bedroom residences remains available, with prices starting from $1.9 million.

[smartcode_project_cta:default project_id=102717]

Kooyongkoot wins Gold and Silver at Better Future Melbourne Design Awards

New apartment supply has become increasingly constrained across <a href="https://www.apartments.com.au/developments/parramatta-nsw-2150">Parramatta</a> in recent years, with fewer projects progressing through to completion as development conditions have become more challenging.

It makes <a href="https://www.apartments.com.au/developers/novm">NOVM</a>'s 2021-completed <a href="https://www.apartments.com.au/buildings/the-lennox-parramatta-12-phillip-street-parramatta-nsw-2150">The Lennox</a> one of the most recently completed residential towers on the Parramatta River, and among the newest apartment developments in Sydney's second CBD.

With the project largely completed before the sharp escalation in construction costs and inflation following the pandemic, The Lennox is now offering pricing that would be difficult to replicate in a comparable new development in Parramatta today, or across much of Western Sydney.

The majority of the 413 apartments at The Lennox sold before and shortly after completion. A limited release of the remaining apartments has recently been brought to market by capital partner <a href="https://www.apartments.com.au/project-marketer/equitifund-group">Equitifund</a>, with entry-level pricing from $700,000 and two-bedroom apartments available from under $1 million.

Rising above the Parramatta River at 12 Phillip Street, The Lennox comprises one, two, three and four-bedroom apartments, appealing to first home buyers, young professionals, families, downsizers and interstate investors seeking a completed apartment in one of Australia's fastest-growing economic centres.

[smartcode_project:default project_id=5743 project_image_fid=372394]

Rather than positioning Parramatta as an alternative to Sydney's CBD, Equitifund believes the city has reached a point where it stands on its own merits.

"Parramatta is no longer simply an alternative to Sydney CBD, it's becoming a destination in its own right," Equitifund Executive Chairman Greg Huxley said.

"The Lennox captures that evolution with a level of quality and amenity that's difficult to match at its price point."

[smartcode_project:default project_id=5743 project_image_fid=953]

Designed by <a href="https://www.apartments.com.au/architects/marchese-partners">Marchese Partners</a>, the tower responds directly to its riverfront setting through expansive glazing and open-plan layouts that maximise views across the Parramatta River and city skyline. Interiors feature engineered timber flooring, stone benchtops, stainless steel appliances and floor-to-ceiling glazing, while generous balconies extend the living spaces outdoors.

Marchese Partners says the project was conceived to balance high-quality apartment living with practical, long-term functionality, pairing larger, efficient floorplans with amenities more commonly associated with five-star hotels.

That emphasis continues through the resident facilities, which include a 20-metre rooftop swimming pool, fully equipped gym and wellness spaces, full-time concierge, a residents' lounge, function room, private lifts, secure basement parking and rooftop communal areas overlooking the Parramatta River. Ground-floor boardwalk retail and dining further activate the riverfront and integrate the building into the surrounding public realm.

[smartcode_project:default project_id=5743 project_image_fid=925]

Australian housing and finance group Equitifund has secured the remaining apartments, believing there are few completed apartment opportunities in Parramatta that offer the same combination of location, amenity and pricing.

Equitifund National Sales Director Ben Hamblett says buyers are increasingly recognising that premium apartment living no longer needs to come with Sydney CBD pricing.

"The Lennox is where aspirational living becomes attainable," Hamblett said.

"Wake to river and mountain views, step into Sydney's Second CBD, and arrive home to resort-calibre amenities, all without the harbour price tag."

Hamblett says owner-occupiers are also attracted by the convenience of having Westfield Parramatta, Church Street's dining precinct, Parramatta Park, Riverside Theatres, Western Sydney University and major transport connections all within walking distance.

"At The Lennox, lifestyle is not an afterthought, it is the foundation."

[smartcode_project:default project_id=5743 project_image_fid=5374]

The Lennox places residents within walking distance of Parramatta Square, Westfield Parramatta, Church Street Eat Street, Parramatta Station, the ferry wharf, Light Rail, the future Sydney Metro West, Parramatta Park and CommBank Stadium, reinforcing Parramatta's position as one of Australia's most connected metropolitan centres outside Sydney's CBD.

Equitifund says buyers visiting the display suite consistently comment on the quality of the finishes, generous floorplans, river and skyline views, and the walkability of the location. The project has attracted a broad mix of local professionals, upsizers, downsizers, buyers relocating from Sydney's inner suburbs and interstate investors seeking long-term growth opportunities.

That demand aligns with Parramatta's continued evolution as an economic powerhouse. Equitifund Research and Market Insights specialist John Bekiaris says sustained population growth, infrastructure investment and expanding employment opportunities continue to support long-term housing demand across the city.

"Parramatta has evolved from a satellite city into one of Australia's most important economic centres. Population growth, infrastructure investment and employment are all supporting sustained long-term housing demand."

[smartcode_project_cta:default project_id=5743]

The apartment price gap drawing Sydney buyers west

A luxury beachfront apartment at Rainbow Bay has more than doubled in value since it sold off the plan six years ago, setting a new local apartment record in the process.

The three-bedroom apartment in the Flow development on Petrie Street, the first of four new projects locally by Paul Gedoun's S&amp;S Projects, has sold for $7.4 million, after originally selling for $3.27 million when the project launched in 2020.

The seventh-floor apartment, comprising 187 sqm of internal living space and a 54 sqm balcony overlooking Froggies Beach and Snapper Rocks, was purchased by a local family.

The transaction was negotiated by Pezet Matheson director Kerry Pezet and equates to more than $30,000 per sqm.

Pezet said the sale reflected the limited opportunities to buy into the boutique beachfront development.

"The sale highlights the rarity of opportunities within the boutique beachfront development, where residences seldom become available," Pezet said.

"Flow is one of the Gold Coast's most tightly held buildings. Buyers from our database move quickly when residences become available, and achieving an off-market sale at $7.4 million demonstrates the depth of demand for property of this calibre."

<img alt="Flow" data-entity-type="file" data-entity-uuid="c585b206-2130-4eee-a50c-3f27c51a7c70" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-07-06%20at%208.33.25%E2%80%AFPM.png?VersionId=m3pHRDV62Y3fvN.XQuQHq.52ilTWpRLf" />

Flow was the first of four luxury apartment developments delivered by Paul Gedoun's S&amp;S Projects at Rainbow Bay and was completed in 2023.

Positioned on the beachfront overlooking Snapper Rocks, the residence includes three bedrooms, three bathrooms, a powder room and views stretching north along the coastline towards Surfers Paradise.

Pezet Matheson Residential principal Mitchell Lambert said buyers continued to prioritise quality beachfront apartments in tightly held locations.

"Flow Residences offers a rare combination of elevated beachfront positioning, architectural excellence, comprehensive resident amenity and premium finishes, which is exactly what discerning purchasers are seeking," Lambert said.

"The transaction further reinforces Rainbow Bay's reputation as one of Australia's premier coastal lifestyle destinations, where limited supply and growing demand continue to support strong market performance."

Pezet Matheson originally marketed and sold out Flow off the plan, making the latest transaction a return to one of the project's original buyers.

Paul Gedoun is selling his third project, <a href="https://www.apartments.com.au/new-apartments/radia-rainbow-bay-271-boundary-street-coolangatta-qld-4225">Radia Rainbow Bay</a>, after recently completing, and selling out, <a href="https://www.apartments.com.au/buildings/esprit-217-227-boundary-street-coolangatta-qld-4225">Esprit</a>. He has plans for a <a href="https://www.apartments.com.au/news/qld/first-look-s-s-projects-proposes-88-apartment-wellness-tower-at-coolangattas-boundary-street">fourth building</a>, 88 apartments on <a href="https://www.apartments.com.au/new-apartments/209-213-boundary-street-coolangatta-qld-4225">Boundary Street</a>.

Rainbow Bay apartment doubles in price since off the plan sale during pandemic

Housing Sector

There was one surprise for the housing sector in tonight's federal budget, and three foreshadowed housing measures were made official.

The federal treasurer Josh Frydenberg advised the parliament in his budget speech that new house starts were now at the highest level in 20 years. 

"New loans to first home buyers reached their highest level in nearly 12 years.

"HomeBuilder has been a huge success and our $2 billion investment in affordable housing is bringing on more supply," he said.

"Our housing measures go even further," he added.

"Helping another 10,000 first home buyers build a new home with a 5 per cent deposit.

"Supporting 10,000 single parents to purchase a home with a 2 per cent deposit. 

"Increasing the amount that can be released under the First Home Super Saver Scheme from $30,000 to $50,000.

"Under the Coalition, home ownership will always be supported," he noted.

The budget effectively continued the First Home Low Deposit Scheme for new homes and off the plan acquistions, and tweaked the First Home Super Saver Scheme, and introduced a new scheme for single parents.

The 10,000 Family Home Guarantees will be made available for single parents over the next four financial years.

The Family Home Guarantee will be available regardless of whether that single parent is a first home buyer or previous owner-occupier. 

Applicants have an annual taxable income of no more than $125,000. 

A fact sheet with further information on eligibility criteria will be available on the NHFIC’s website next week.

The surprise announcement was the government will lower the minimum age for the downsizer super contribution from 65 to 60.

“This will allow Australians nearing retirement to make a one-off post-tax contribution of up to $300,000 per person (or $600,000 per couple) when they sell their family home,” the budget documents advised.

“This improves the flexibility for Australians to contribute to their superannuation savings, and may encourage people to downsize sooner and increase the supply of family homes.”

The budgetary measure will be argued as positive for first home buyers and next home buyers by freeing up established housing stock for younger property buyers.

There was a warning after the budget announcement from the Property Council on the long-term economic consequences of idling population growth.
 
"Budget assumptions anticipate that Australia’s population growth will be limited to only 0.2 per cent over in the next financial year. Net overseas migration is forecast at -77,000 in 2021/22, with a return to normal levels of migration not expected until 2024/25," the PCA noted.
 
“The Budget has revealed that our restricted border is the biggest constraint on our economy.
 
“Our lack of growth is going to catch up with us with economic and employment growth expectations slowing over the forward estimates.
 
“Population growth is not an optional extra for Australia’s economy," the PCA said.

The budget also made $15 billion in additional infrastructure commitments including for:

a) the North‑South Corridor in South Australia
b) the Great Western Highway and Newcastle airport in New South Wales
c) the new Melbourne Intermodal Terminal in Victoria 
d) the Bruce Highway in Queensland
e) METRONET in Western Australia
f) highway upgrades in the Northern Territory
g) Light Rail Stage 2A in the Australian Capital Territory and
h) Midland Highway upgrades in Tasmania.

Josh Frydenberg noted that "when construction work began to dry up, HomeBuilder came to the rescue."



jchancellor

Federal Budget formalises three mooted housing measures

<html><body>
Opening Remarks to Plenary Panel at the Australasian Housing Researchers Conference
Luci Ellis 
Assistant Governor, RBA
In financial stability, my old role, housing is certainly crucial. Housing is the biggest asset most households will own and the bulk of household sector wealth. Lending against housing is also a large part of financial sector assets. Housing outcomes are therefore central both to the welfare of households and the stability of the financial system.
The housing sector is also crucial on the monetary policy side, my new role. As a sector, it is especially sensitive to interest rates. It is a key part of the transmission mechanism of monetary policy. Housing prices respond to interest rates, and in turn affect household consumption through wealth and collateral effects. And the housing construction industry is one of the most interest-sensitive.
The theme of this conference is ‘Housing and Inequality’. I'd like to talk about two aspects of that. First, there's the inequality – or rather, diversity – between countries. Second, there's the inequality represented by the distribution of housing outcomes across residents of a particular country.
Institutions Matter: The Cross-country Dimension
On the first, we can summarise by saying that institutions matter. Country-specific features are very important to housing outcomes, including the outcomes most relevant to monetary and financial stability policymakers.
<ul class="ul1">
<li class="li1">A range of institutions determine the idiosyncratic risk that households face, and thus the credit risk they pose to lenders. These include labour market institutions, the funding of health care, and the structure and generosity of the social safety net.</li>
<li class="li1">Geographic and other factors determine the urban structure, which in turn affects the relative price of housing. We know from economic geography that as city populations rise – and the amenities that go together with that – housing prices rise even relative to the higher incomes that often go along with big-city living. So urban concentration affects macro-level variables, like the ratio of housing prices to household incomes, as well as individual-level outcomes, such as people's lifetime housing experiences.</li>
<li class="li1">The structure of the mortgage market matters, for example whether fixed or variable-rate mortgages predominate. These features are in turn affected by a range of tax and other institutional factors. An example of a feature quite specific to Australia is the popularity of linked offset accounts. These change the interpretation of debt data that do not adjust for balances in these accounts. They also change assessments of the resilience of the household sector to various kinds of shocks.</li>
</ul>
Taken together, these factors suggest that we can't assume a single value of any particular macro-level ratio exists that is ‘right’ for all countries or for all time. It depends. We can't assume that a particular level of debt is always and everywhere sustainable. It depends on who has the debt and what kind of credit risk they pose. We can't assume that a particular level of prices is ‘correct’ or ‘sustainable’ in all circumstances.
What we can do is get some sense of the relativities between countries that you might expect, given those institutional and other differences. For example, we can reasonably expect that countries where much of the population lives in smaller, cheaper cities will have lower national aggregate ratios of housing prices to incomes than other countries. That might partly explain why the price-to-income ratio for the United States is relatively low (Graph 1). By contrast, Australia is somewhere around the middle of the pack of mid-sized countries on this metric.
<a href="https://www.propertyobserver.com.au/images/2017/02/17/sp-ag-2017-02-16-graph1.gif" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/02/17/sp-ag-2017-02-16-graph1.gif" alt="">
 
Similar comparisons of household debt-to-income ratios across countries also put Australia in the middle of the pack.[1] The United States is lower, consistent with the lower average price-to-income ratios there. Several small European countries, such as Sweden and the Netherlands, have much higher ratios than Australia does. I would not expect or want Australia's ratio to be as high as it is in those countries. Their institutions are different. In particular, a wider range of debt is tax-deductible in those countries, so households have less incentive to pay debt down.
Distributions Matter: The Micro-level Dimension
The concept of inequality perhaps of most interest to this conference, though, is the differences across households. The way people access housing is not the same. These distributional issues can be considered over several dimensions.
<ul class="ul1">
<li class="li1">We can consider the distribution of outcomes in the cross-section of households: how outcomes differ for different types of households at a point in time.</li>
<li class="li1">We can consider outcomes for different cohorts: whether the experience of people in a particular age group changes over time.</li>
<li class="li1">We can consider issues of intergenerational distribution: whether outcomes for people in one generation depend on the experiences of their parents.</li>
</ul>
It turns out that these sorts of distributional issues matter for policy. Certainly they matter for financial stability policy. It is rarely the median borrower who defaults. Risk comes from the tails of the distribution. But even something as ‘macro’ as the transmission of monetary policy turns out to depend strongly on distributional considerations (Hughson et al 2016). 
So the Reserve Bank spends a lot of time and resources examining household survey data and other micro-data to inform our macro understanding; some of that work has explicitly touched on inequality as the subject of interest (Dollman et al 2015), while other work has noted the effect of macro-level developments on inequality (La Cava 2016). The rest of my talk today will cover a few interesting findings from this type of analysis. I'm not setting out to be comprehensive here, because that would not be feasible in the time available. But hopefully it will give a flavour of what's possible and the kinds of issues we've looked at.
<ul class="ul1">
<li class="li1">Firstly, and unsurprisingly, housing ownership and housing wealth are not equally distributed across the cross-section of households.</li>
<li class="li1">Secondly, fewer young people are home owners now than previous cohorts at the same age. This is partly about demography. If it were purely a story of people being priced out, other outcomes would be different.</li>
<li class="li1">Finally, concerns about access to appropriate housing aren't only about ownership. We should also think about how housing is experienced, including security of tenure.</li>
</ul>
One issue of inequality that generates a lot of public discussion is whether people can purchase their own home. Housing affordability is clearly a concern more generally, because adequate shelter is so important to human welfare. But clearly there is great social interest in how that housing is delivered, who owns it, and who pays for it. Of the many inquiries into housing affordability over the past decade or so, at least two – the Productivity Commission's 2003 Inquiry and the House of Representatives Standing Committee on Economics Inquiry in 2015 – were specifically on home ownership.
At a national level, Australia actually has a home ownership rate that is neither unusually high nor unusually low.[2] Many of the countries that have higher rates seem to manage it by having very high proportions of young adults living with their parents, even into their thirties, rather than renting. But the outcomes do vary across households. We can see this in several independently collected data sets, but for today I'm going to rely mainly on the HILDA survey.
Unsurprisingly, higher-income households are more likely to own their own home, whether with a mortgage or outright (Graph 2). The highest-income group are not only more likely to live in their own home; the wealth represented by their own home, net of debt, is also higher than for lower-income and middle-income households.
<a href="https://www.propertyobserver.com.au/images/2017/02/17/sp-ag-2017-02-16-graph2.gif" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/02/17/sp-ag-2017-02-16-graph2.gif" alt="">
 
More important than income, though, is life stage. Not many teenagers or young adults are heads of households; those that are, are not that likely to own their own home.[3] Over time, people do start purchasing their home. Home ownership rates rise rapidly with age, reaching 80 per cent for households headed by someone aged 55 or more (Graph 3). Housing wealth has the same pattern, largely because the older you are, the longer you have had to pay your mortgage down.
<a href="https://www.propertyobserver.com.au/images/2017/02/17/sp-ag-2017-02-16-graph3.gif" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/02/17/sp-ag-2017-02-16-graph3.gif" alt="">
 
Because higher-income households are more likely to be owner-occupiers, they are also more likely to have mortgage debt (Graph 4). This is why we say that most of the mortgage debt in Australia has been borrowed by those most able to service it. That said, the lower-income households that do have debt, tend to have quite a lot of debt relative to their incomes. Sometimes this is because they have temporarily low incomes, but overall it does speak to the need to be aware of pockets of potential stress within a more benign overall picture.
<a href="https://www.propertyobserver.com.au/images/2017/02/17/sp-ag-2017-02-16-graph4.gif" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/02/17/sp-ag-2017-02-16-graph4.gif" alt="">
 
Participation in the housing market need not be about owning your own home. Many people rent; someone else has to own those dwellings as well. In Australia, most private rental properties are owned by other households. In other words, there are not many companies operating as residential landlords. A good indication of who owns rental properties comes from looking at people who have housing debt other than debt on their own primary residence. In this graph, we have split up the share of people who have any housing debt into those who have only debt on their own home, and those who have some other kind of housing debt; most, but not all, of this second group also have owner-occupier debt. As you can see, this other property debt is even more likely to be held by high-income earners than owner-occupier debt is.
The pattern of rising ownership rates for older age groups does not give everyone comfort that most people will be able to afford a home eventually. People worry that it is becoming harder to achieve home ownership at a given life stage than it used to be. This would be an issue of inequality across cohorts. It is true that home ownership rates have fallen for most age groups over time (Graph 5). The overall ownership rate has stayed fairly steady because the population is ageing. It is also true that ownership rates shifted down between 2006 and 2011; we'll know what happened in 2016 when the Census data come out in a few months.
The 25–34 age group is typically seen as the core group of first home buyers. We can see that ownership rates in this group have fallen by a bit more than 10 percentage points since the 1970s. But we can also see that most of the decline had already happened by the early 1990s, before the big increase in housing prices relative to incomes. What changed during that earlier period was that people started partnering and settling down later in life. The post-war Baby Boom had been characterised by an anomalously young average age at first marriage. Through the 1970s and 1980s, the normal historical pattern started to reassert itself. Ownership rates for young people declined as a result, because many people wait to settle down before they buy a home.
By saying this, I'm not suggesting that people should not worry about whether households can achieve their desired housing tenure. I am suggesting that the situation is more complex than would be suggested by a single-minded focus on a single metric of affordability, such as median housing prices.
<a href="https://www.propertyobserver.com.au/images/2017/02/17/sp-ag-2017-02-16-graph5.gif" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/02/17/sp-ag-2017-02-16-graph5.gif" alt="">
 
Much of the commentary around the difficulty of achieving home ownership centres on the task of accumulating the deposit. It seems common to assume that everyone needs a 20 per cent deposit when they first buy. This isn't actually true: although lenders require some deposit coming from genuine savings, it doesn't have to be as high as 20 per cent. So it's surprising that as housing prices have risen, the distribution of loan-to-valuation ratios – the converse of the deposit – hasn't shifted up over time (Graph 6). If anything it has declined in the past few years for which we have data. It's not entirely clear why this is. And because a high loan-to-valuation ratio does imply higher risk both for the borrower and the lender, it might not be such a bad thing. But it does suggest that, again, the situation is more complex than a simple summary statistic can capture.
<a href="https://www.propertyobserver.com.au/images/2017/02/17/sp-ag-2017-02-16-graph6.gif" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/02/17/sp-ag-2017-02-16-graph6.gif" alt="">
 
One reason why first home buyers haven't needed to increase loan-to-valuation ratios might be that more of them are getting help from friends and family to accumulate the deposit. Careful analysis of the HILDA Survey dataset shows that the share of first home buyers receiving that help has been increasing over the decades, but it actually remains low (Graph 7).
<a href="https://www.propertyobserver.com.au/images/2017/02/17/sp-ag-2017-02-16-graph7.gif" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/02/17/sp-ag-2017-02-16-graph7.gif" alt="">
 
It is common to focus on the different outcomes for owners versus renters in purely financial terms. Another aspect of inequality I would like to talk about today is security of tenure. A range of different data sources confirm that although young people move more often than older people, the big difference is between renters and owners (Graph 8). A similar pattern occurs in countries such as the United States (Bachmann and Cooper 2014).
<a href="https://www.propertyobserver.com.au/images/2017/02/17/sp-ag-2017-02-16-graph8.gif" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/02/17/sp-ag-2017-02-16-graph8.gif" alt="">
 
Looking just at the group of households who can be tracked through the whole life of the HILDA survey, and who didn't switch between owning and renting at any stage, you can also see that renters were also more likely to have moved many times in that 13-year period (Graph 9).
<a href="https://www.propertyobserver.com.au/images/2017/02/17/sp-ag-2017-02-16-graph9.gif" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/02/17/sp-ag-2017-02-16-graph9.gif" alt="">
 
Some earlier literature has suggested that transaction costs induce home owners to move less often than they might otherwise do, which makes it harder for them to take advantage of changing labour market opportunities (Oswald 1999). That effect doesn't seem clear in Australian data, so I would not draw that conclusion here (Flatau et al 2002). Yet even without the transaction costs of selling a home – including tax, legal fees and agent commissions – we know that moving house can be disruptive and costly. So I question whether all those moves by renters were desired by those households. Many renters are happy with their current home, but are required to move because the lease expired or the landlord sold the property. If we are concerned about inequality of housing outcomes, perhaps we should focus less on the type of tenure, and more on security of tenure.
That's just a brief round-up of some of the issues we have been looking at recently. Housing issues will always be with us, and will always be important to the functions of the Reserve Bank. That's why we value conferences like this: the diverse perspectives offered help us see the bigger picture. I'm certainly looking forward to the rest of the discussion in this session.
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jchancellor-FAypfDUnLy

Housing sector is crucial for monetary policy: RBA's Luci Ellis

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John Symond and Mark Bouris, the rival mortgage brokers, have both slammed plans to change negative gearing rules.
"It will kill the investment market. I think it's a terrible idea," Mr Bouris, the chairman of financial services group Yellow Brick Road told the Australian Financial Review.
Aussie Home Loans founder John Symond said making changes to negative gearing of property would most likely result in unintended, negative consequences for the housing sector which is "a key economic driver of the economy".
"Many property investors who are negatively geared are PAYG taxpayers and their nest eggs will be hit for six in any change," Mr Symond said.
Mark Boris said any change would "rip the guts out of the economy and growth."
"Politicians talk about the amount of money we lose from people claiming negative gearing tax breaks, but I would love to see the impact on the other side, when the investor market dies off.
"There will be less money spent on concrete, bricks, furniture, televisions, plumbing etc."
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