<p>The residential transformation of St Kilda Road is set to continue into with more new apartment plans for the sought-after boulevard.</p>

<p>Wing Tai Asia has lodged plans for a major residential tower at 464-466 St Kilda Road, replacing the former VACC House with an 18-storey mixed-use development designed around a retained heritage podium and a sculpted contemporary tower.</p>

<p>The proposal, prepared under Victoria’s Significant Residential Development with Affordable Housing pathway, would deliver 325 apartments and ground-floor retail across the prominent 4,653 sqm boulevard site in Melbourne’s St Kilda Road North Precinct.</p>

<p>The project centres on the adaptive reuse of the site’s heritage-listed VACC Building, an eight-storey office designed by Bernard Evans that has occupied the address for decades. Planning documents state the development would involve “carefully dismantling and conserving off-site the original metal fabric of the podium visible from St Kilda Road,” before reinstating it as the defining frontage of the new scheme.</p>

<p>Above the restored podium, Wing Tai is proposing a curvilinear residential tower. The scheme includes 172 one-bedroom apartments, 63 two-bedroom apartments, 66 three-bedroom apartments, and 24 four-bedroom apartments, alongside two ground-floor food and beverage tenancies fronting St Kilda Road.</p>

<p>The tower has been designed with substantial articulation and variable setbacks to minimise perceived bulk and maintain view corridors along the boulevard. Urbis, which prepared the planning report, said the design “has been significantly articulated through a curvilinear design” with “an interplay with materials, façade expression and depth” to create visual separation and visual interest.</p>

<p>The proposal also includes 254 basement car spaces, landscaped pedestrian links connecting St Kilda Road and Queens Lane, and a biophilic landscape strategy featuring canopy trees, raised planters, cascading greenery and a glass oculus pool overlooking the eastern frontage.</p>

<p>Planning documents confirm the $270.1 million development will contribute 3 per cent of project costs to the Social Housing Growth Fund as part of the application process.</p>

<p>Wing Tai acquired the St Kilda Road property in 2018 alongside Abacus Property Group for $95.38 million, before later consolidating ownership of the site. The property previously served as the Victorian Automobile Chamber of Commerce headquarters for around 60 years.</p>

<p data-end="345" data-start="110">The transformation of the St Kilda Rd boulevard is already beginning to materialise, with a number of high-profile projects recently completed, launched, or approaching launch as developers continue to back the long-term appeal of the precinct.</p>

<p data-end="689" data-start="347">Among the most notable recent completions is Louise by Samuel Property Group, just off the strip on Queens Lane, the same pocket Hirsch &amp; Faigen recently launched The Queensbury. Mirvac is too on the same street with The Albertine, which is approaching completion.</p>

<p data-end="689" data-start="347">Dexus recently secured approval for its slice of St Kilda Road, while Gurner also has approved plans for the precinct.</p>


Joel Robinson

Wing Tai unveils 325-apartment St Kilda Road tower on former VACC House site

<p>Malaysian developer <a href="https://www.apartments.com.au/developers/s-p-setia">SP Setia</a> is the latest to jump into St Leonards booming Transport Oriented Development precinct.</p>

<p>The developer, which has previously delivered Sapphire by the Gardens apartment development in Melbourne, identified the Atchison Street site in 2023. It filed a Scoping Report around 12 months ago, and now has revealed the designs for the new&nbsp;40-storey mixed-use tower.</p>

<p>The State Significant Development Application covers <a href="https://next-portal.urban.com.au/projects/14650/summary">20-22 Atchison Street</a>, a 1,374 sqm site positioned between St Leonards Station and the new Crows Nest Metro station.</p>

<p>Designed by <a href="https://www.apartments.com.au/architects/cox-architecture">COX Architecture</a>, the project would deliver 181 apartments, above a four-storey commercial podium, five basement levels, and new public domain works along Mitchell Street. The apartment mix comprises 35 one-bedroom apartments, 39 one-bedroom-plus-study apartments, 85 two-bedroom apartments, and 22 three-bedroom residences.</p>

<p>The proposal has been lodged as a shop-top housing development under the NSW Government’s TOD planning pathway, which allows increased density around key transport infrastructure. The site sits within the recently rezoned Crows Nest Accelerated TOD Precinct.</p>

<p><img alt="First look: SP Setia targets St Leonards skyline with 40-storey TOD tower" data-entity-type="file" data-entity-uuid="b799673d-48e2-46b0-801a-0e33a9330100" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/atchinson%20site.png?VersionId=dPh0UfwfaHpbFL1R7H1cbZNbIW0CHbCC" /></p>

<p>SP Setia acquired the Atchison Street site as part of its continued expansion into the Australian apartment market. In comments made to City &amp; Country (The Edge Malaysia) in 2023, SP Setia President and CEO Datuk Choong Kai Wai described the acquisition as “a strategic move” aligned with the group’s post-pandemic market recovery strategy.</p>

<p>“Our target for this exceptional development is local and overseas buyers, including first-home buyers, downsizers and investors,” Choong said.</p>

<p>The tower has been designed as a slender vertical form rising from a mixed-use podium, with COX Architecture positioning the development as a response to the evolving St Leonards and Crows Nest skyline.</p>

<p>“The purpose of the project is to facilitate the delivery of high-quality housing at a strategically located site and deliver a built tower outcome that is consistent with the desired future character of St Leonards and aligns with the TOD controls,” the design report stated.</p>

<p><img alt="First look: SP Setia targets St Leonards skyline with 40-storey TOD tower" data-entity-type="file" data-entity-uuid="b1a85eee-76f7-436c-a6da-73ba827b9b13" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/atchinson%20entry.png?VersionId=dA9jHGPMcm.dDbwk4QfxqWiY5bfh3UVt" /></p>

<p>The podium would incorporate retail uses fronting Atchison Street, commercial tenancies, landscaped communal areas, and pedestrian improvements along Mitchell Street. Vehicle access and loading would be consolidated via Atchison Lane.</p>

<p>Residents would have access to more than 665 sqm of communal indoor and outdoor spaces, while the development proposes 96 parking spaces across five basement levels.</p>

<p>The proposal also includes a commitment for 10 per cent of residential floor space to be allocated toward affordable housing through a monetary contribution.</p>

<p>COX said the tower form responds directly to the emerging high-density character of the precinct while seeking to maximise solar access, cross ventilation, and outlook from apartments.</p>

<p><img alt="First look: SP Setia targets St Leonards skyline with 40-storey TOD tower" data-entity-type="file" data-entity-uuid="2163f85c-f63b-4be3-aafa-f8763976cec5" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Article%20Feature%20Image%20%28Grid%29_5.png?VersionId=WiAmtIKJ6.ZQ41EtYEQ1fol7AeorKBlL" /></p>

<p>“The building is orientated towards north,” the Apartment Design Guide compliance report noted, adding that the tower’s slim form was driven by the constrained inner-urban site dimensions.</p>

<p>The design also incorporates landscaped setbacks and communal open space at podium level, intended to soften the interface with surrounding streets and improve pedestrian amenity.</p>

<p>The project adds to a growing wave of redevelopment proposals reshaping St Leonards and Crows Nest following the opening of the Sydney Metro City line and the NSW Government’s push for higher-density housing around major transport nodes.</p>

<p>Last week Stockland filed plans just down the road. They want to build a <a href="https://www.apartments.com.au/new-apartments/601-pacific-highway-st-leonards-nsw-2065">52-storey tower on Pacific Highway</a>.</p>

<p><em>Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/first-look-stockland-plans-52-storey-538-apartment-st-leonards-tower">First look: Stockland plans 52-storey, 538-apartment St Leonards tower&nbsp;</a></em></p>


First look: SP Setia targets St Leonards skyline with 40-storey TOD tower

<p><a href="https://www.apartments.com.au/developers/urban-property-group">Urban Property Group</a> has revealed plans for a new mixed-use tower at 10 Dangar Street, Wickham, advancing a proposal that would reshape the southern gateway to Newcastle’s city centre with one of the city’s tallest residential buildings.</p>

<p>The State Significant Development proposal, now on exhibition, seeks approval for a <a href="https://www.apartments.com.au/new-apartments/bowline-10-dangar-street-wickham-nsw-2293">43-storey tower</a> immediately adjacent to the Newcastle Interchange. The project would deliver around 200 apartments, including 42 affordable housing dwellings, alongside 99 co-living units, a 171-room hotel, retail space, and new public domain integrated through the site.</p>

<p>The scheme marks a significant escalation of plans previously approved for the site. Urban Property Group took over the prominent 2,904 sqm parcel, where excavation and demolition had already commenced under an earlier consent for a 14-storey mixed-use development.</p>

<p><img alt="First look: Urban Property Group unveils Newcastle’s next supertower at Wickham interchange" data-entity-type="file" data-entity-uuid="58a96dd9-407f-4d20-86b4-94e4bfeef74b" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/wickham%20podium.png?VersionId=LGlf08pdFGAZDzvx_CXC4XakHNZRuEE0" /></p>

<p>Designed by <a href="https://www.apartments.com.au/architects/sjb-architects">SJB</a>, the tower has been conceived as a landmark transit-oriented development anchored to the Newcastle Interchange precinct. The proposal includes 245 build-to-sell apartments across a mix of one, two, and three-bedroom residences, as well as two penthouses. Fifteen apartments and one operational unit are earmarked for NDIS housing. The co-living component would add a further 99 units, while the podium would accommodate retail uses and hotel facilities.</p>

<p>SJB said the site presents “a valuable opportunity to anchor the precinct by setting the standard for design, active ground planes and character at the key southern gateway.”</p>

<p>The architecture responds directly to the site’s position beside major transport infrastructure and within one of Newcastle’s fastest-evolving urban renewal precincts. The tower form sits above a sculpted podium designed to frame new public spaces, including a through-site pedestrian link connecting Station Street to Hannell Street, landscaped plazas, and activated retail edges.</p>

<p><img alt="First look: Urban Property Group unveils Newcastle’s next supertower at Wickham interchange" data-entity-type="file" data-entity-uuid="a7bd6ff0-f7db-4ce8-a6dc-ea56e72c6149" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/wickham%20lanne.png?VersionId=xzf39VADyhj7zBQY2I9fx9vI62u2tuSb" /></p>

<p>The design report describes the project as part of the broader transition of Wickham into “a vibrant, high-quality mixed-use urban precinct” that leverages proximity to the station, open space, and regional connectivity.</p>

<p>A detailed public art strategy has also been prepared for the development. The strategy positions the project as “a transit-oriented development of state significance at the gateway to Newcastle’s city centre” and outlines a series of integrated artworks responding to Newcastle’s industrial and transport heritage.</p>

<p>Creative Road’s curatorial framework for the project, titled Unveil, draws on “stratified surfaces, carved volumes, and light-filled apertures” while referencing Newcastle’s transformation from an industrial city into a contemporary education and technology hub.</p>

<p><img alt="First look: Urban Property Group unveils Newcastle’s next supertower at Wickham interchange" data-entity-type="file" data-entity-uuid="77a882bb-14b1-4d28-99ff-9438e39508c0" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/wickham%20site.png?VersionId=cevgo_vN0eKPK78P8YcEu3mKPLkpFqE7" /></p>

<p>The proposal is being advanced through the NSW Housing Delivery Authority pathway after being declared State Significant Development in June 2025. The accompanying scoping report states the development aims to “maximise the site’s proximity to the Newcastle Interchange by delivering transit-oriented development” while increasing housing supply and affordable housing provision within the Newcastle LGA.</p>

<p>Urban Property Group’s plans align with the long-term strategic vision established under the Wickham Master Plan, which identified the interchange precinct as suitable for substantial uplift in height and density. The current proposal would significantly intensify that vision, positioning the tower among the tallest developments proposed for Newcastle.</p>

<p>The site sits immediately north of the Newcastle Interchange, bounded by Dangar Street, Hannell Street, and Charles Street. It is surrounded by a rapidly growing cluster of residential towers and mixed-use projects that have emerged following the completion of the light rail and transport interchange.</p>


First look: Urban Property Group unveils Newcastle’s latest tower at Wickham interchange

<p>Bottega House has completed settlement of a landmark riverfront site in Macquarie Street, St Lucia, representing its first major Brisbane development.&nbsp;</p>

<p>Positioned on the banks of the Brisbane River, the <a href="https://www.apartments.com.au/new-apartments/180-macquarie-street-st-lucia-qld-4067">premium site at 180 Macquarie Street</a> features uninterrupted river frontage in one of Brisbane’s most tightly held residential precincts.&nbsp;</p>

<p>The proposed development, currently under assessment with Brisbane City Council, has been designed by <a href="https://www.apartments.com.au/architects/plus-studio">Plus Studio</a> with interiors by <a href="https://www.apartments.com.au/interior-designers/mim-design">Mim Design</a> and will deliver a boutique collection of premium residences positioned specifically for owner occupiers and downsizers.&nbsp;</p>

<p>The residences are set to redefine luxury apartment living in the area, with a focus on architectural quality, refined finishes, landscape integration and elevated amenities including curated wellness facilities, resort-style pools and recreation spaces rarely seen in the local market.&nbsp;</p>

<p>Exclusive sales for the project will be led by Keenan &amp; Byrne, ahead of an anticipated launch later this year.&nbsp;</p>

<p>Bottega House Managing Director Nick Malloch said the project reflects the group’s ambition to deliver a highly curated residential offering within one of Brisbane’s most tightly held precincts.&nbsp;</p>

<p>“This is an incredibly rare riverfront opportunity and one we have approached with a long-term perspective,” Malloch said.&nbsp;</p>

<p>“Our vision from the outset was to create a boutique collection of residences that feel more like private homes than traditional apartments, with generous proportions, refined finishes and exceptional amenity throughout."</p>

<p>Malloch says there is a&nbsp;lack of premium owner-occupier stock of this quality in the market, particularly for downsizers wanting space, privacy and a true lifestyle offering without compromise.&nbsp;</p>

<p>"Demand is expected to be strong given the scarcity of premium riverfront opportunities of this nature within Brisbane’s inner-west."&nbsp;</p>


Bottega House secures landmark riverfront site in St Lucia 

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<p data-end="157" data-start="0">The arrival of the first piling rig officially marks the commencement of construction at SIERA’s new beachside apartment development, Exhale, in Northcliffe.</p>

<p data-end="459" data-start="159"><a href="https://www.apartments.com.au/new-apartments/exhale-surfers-paradise-8-enderley-avenue-surfers-paradise-qld-4217">Exhale</a>, a glass-encased tower featuring 54 large-scale apartments at 8 Enderley Avenue, is SIERA’s third Gold Coast development. It follows the recently completed PIPIS Bilinga beachfront project, which achieved suburb-record prices, and the soon-to-be-completed Chevron Island development, Tapestry.</p>

<p data-end="459" data-start="159">[smartcode_project:default project_id=112661 project_image_fid=359603]</p>

<p data-end="651" data-start="461"><a href="https://www.apartments.com.au/developers/siera">SIERA</a> Founder and Managing Director Brent Thompson said the arrival of the piling rig represented a significant milestone for the development, which is scheduled for completion in late 2028.</p>

<p data-end="950" data-start="653">Over the next month, around 260 piles are expected to be installed as work progresses on the basement structure. The building is anticipated to rise above ground level early next year, before unveiling its sculptural glass curtain wall, developed in collaboration with specialist façade engineers.</p>

<p data-end="1081" data-start="952">“The façade was designed to maximise panoramic coastal views while creating a distinctive architectural identity,” Thompson said.</p>

<p data-end="1081" data-start="952">[smartcode_project:default project_id=112661 project_image_fid=355935]</p>

<p data-end="1307" data-start="1083">Designed by BDA Architecture, Exhale will comprise just 54 two- and three-bedroom residences across 26 levels, a level of low-density living rarely delivered in this beachside pocket between Surfers Paradise and Broadbeach.</p>

<p data-end="1522" data-start="1309">The project has been conceived as a resident-only building, with no short-stay accommodation permitted. SIERA says the model is intended to appeal to long-term owner-occupiers rather than transient holiday demand.</p>

<p data-end="1522" data-start="1309">[smartcode_project:default project_id=112661 project_image_fid=361052]</p>

<p data-end="1714" data-start="1524">Residences have been designed with large-format layouts and expansive glazing, with most apartments featuring more than 30 metres of glass frontage to maximise natural light and ocean views.</p>

<p data-end="1945" data-start="1716">The amenity offering spans two levels and centres on wellness and lifestyle, including a heated magnesium pool, sauna, yoga and Pilates studio, gymnasium, private dining facilities, cinema lounge, and dedicated surfcraft storage.</p>

<p data-end="1945" data-start="1716">[smartcode_project:default project_id=112661 project_image_fid=359607]</p>

<p data-end="2220" data-is-last-node="" data-is-only-node="" data-start="1947">More than half of the apartments have already sold. SIERA has also opened a sales gallery for Exhale at its Chevron Island commercial premises, near its Tapestry tower and the site of its second Chevron Island apartment development, which is slated to launch in early 2027.</p>
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</section>

<p>[smartcode_project_cta:default project_id=112661]</p>


SIERA kicks off construction at Northcliffe tower Exhale

Investor Activity

<p>Capital city apartment rents have increased by around 5 per cent compared with a 7 per cent rise in city house rents since the start of this year, according to CoreLogic.</p>

<p>&ldquo;Rental demand is being deflected back towards inner-city precincts as other areas become less affordable for renters,&rdquo; suggests Tim Lawless, director of research for CoreLogic.</p>

<p>Average capital city apartment rents across Australia have seen a fall of around 1 per cent, according to CoreLogic between March 2020 and September this year.</p>

<p>Melbourne&rsquo;s apartment sector has been the weakest (with rents down 7 per cent), followed by Sydney (down 1 per cent).</p>

<p>[smartcode_project:default project_id=3260 project_image_fid=62315]</p>

<p>Lawless advised that growing investor demand for apartments was driving recovery.&nbsp;</p>

<p>&ldquo;Investor demand has historically been skewed towards the medium- to high-density sector, probably because of the lower maintenance and often higher yields associated with higher density-style dwellings,&rdquo; he told The Australian Financial Review.</p>

<p>It has been noted investor mortgage demand had increased from a record low of around 23 per cent to more than 30 per cent.</p>

<p>[smartcode_project:default project_id=2806 project_image_fid=175415]</p>

<p>Apartment price rises have slipped well behind houses while yields have risen, which makes it more attractive to many investors, according to CoreLogic.</p>

<p>&ldquo;Both the lower entry point and higher yield profile may be an attractive option for investors as they become more active in the housing market,&rdquo; Lawless says.</p>

<p>&ldquo;Once international borders reopen, it&rsquo;s likely rental markets will see an immediate and positive impact as migrants, such as students, seek out rental accommodation.&quot;</p>


Apartment price rises have slipped well behind houses while yields have risen, which makes it more attractive to many investors, according to CoreLogic

jchancellor-FAypfDUnLy

Rental prices beginning to rise in inner city markets: CoreLogic

<p>Ryrie Home is the latest development from Franz&eacute; Developments.</p>

<p>The mixed-use development, which broke ground earlier this year, is set to deliver Geelong&rsquo;s first major hotel and apartment project in 20 years.</p>

<p>Designed by&nbsp;Architectus,&nbsp;Ryrie&nbsp;Home will deliver a landmark Holiday Inn tower, 16 luxury apartments at&nbsp;Ryrie&nbsp;Residences, and a separate 11-storey tower,&nbsp;Ryrie&nbsp;Home.</p>

<p>As <a href="/news/vic/urbans-most-popular-vic-apartments-for-investors-in-q1-2021" target="_blank">Urban&#39;s most popular investor project for Q1 2021</a>, it&#39;s more than just the location&nbsp;that stands out. But with prices starting as low as $350,000, its both affordable and appealing.</p>

<p>Ryrie Home has been so popular with investors&nbsp;likely due to them eyeing its huge potential to downsize later in life.</p>

<p>[smartcode_project:default project_id=5559 project_image_fid=88241]</p>

<p>Geelong is well-known and much loved for its big city feel, without the congestion. Affectionately called G-Town, everything is within easy reach, so you can spend more time doing the things you love, be it sports, shopping, or exploring the caf&eacute;s and diverse eateries.</p>

<p>Situated at 44 Ryrie Street, Ryrie Home holds a prime position in the center of Geelong a short walk from the acclaimed Geelong Gallery.</p>

<p>Placed on a main thoroughfare the development is 5 minute walk from shopping centres,&nbsp;boutiques and a number of dining establishments.</p>

<p><a href="/buildings/ryrie-home-geelong-44-ryrie-street-geelong"><img alt="" src="https://s3-ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/pictures/article-images/geelong.png" /></a></p>

<p>Slightly beyond those is a Cinema and the MoPa Museum. And further afield&nbsp;are acclaimed dining institutions like&nbsp;Restaurant IGNI and the&nbsp;Empire Grill</p>

<p>Try taking the bike for a ride along the Geelong waterfront and experience the beaches and Royal Geelong Yacht Club, or enjoy an evening out by the water at bars like the Sailors Rest or Edge Geelong.</p>

<p>If you are looking for an exercise alternative to the nearby Fitness First, there is always Johnston Park</p>

<p>[smartcode_project:default project_id=5559 project_image_fid=88245]</p>

<p>The project features exposed concrete ceilings and floor-to-ceiling windows, merging a minimalist aesthetic with a sense of modern luxury in the bayside location.</p>

<p>Every&nbsp;home in the development features&nbsp;a private balcony where you can enjoy the panoramic bay views and alfresco dining year-round.</p>


The 109 residence mixed use tower draws on its Geelong Quarter location part of the fastest growing regional city in Australia.



jordan_55689

Walking tour: What's within walking distance from Geelong's Ryrie Home apartments?

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<p><strong>EXPERT INSIGHT</strong></p>

<p>Investors have clearly now joined the stampede of buyers rushing housing markets, but the overall home loan market share of investors remains at record low levels, offsetting any concerns by the RBA and financial regulators of potential market disruption.</p>

<p>The ABS reports that the value of national investor lending seasonally adjusted increased by 9.4% over January to $6.4bn which is the highest monthly total recorded since May 2018.</p>

<p>Despite the sharp increase, the overall home loan market share of investors fell to a new record low 19.1% and well behind the long-term average of 33.1%. Recent growth in investor lending still lags the remarkable increases reported by owner-occupiers and first home buyers.</p>

<p>During the similar strong market conditions in 2014, investor market share exceeded 40% which resulted in actions by financial regulators to subdue activity from this group. </p>

<p>This reflected concerns that record levels of highly-leveraged investors may cause disruptions to housing markets in the event of an increase in official interest rates pushing down home prices.</p>

<p>WA reported the sharpest increase in monthly investor lending over the past year, rising by 47.2%, followed by QLD up 26.7%, NSW up 17.9% and SA up 0.4%. Monthly investor lending in VIC however fell 1.0% over the past year.</p>

<p>NSW accounted for the most investor activity over January with 40.9% of total national activity with $2.21bn in loans approved followed by VIC well behind with $1.47bn, QLD $0.89bn, WA $0.34bn and SA $0.24bn.</p>

<p>The average NSW investor loan reported over January was the highest of all the states at $658,900 followed by VIC 537,388, QLD $441,037, WA $411,649 and SA $368,232.</p>

<p>Although investor lending is on the rise, the overall residential loan market share remains at record low levels with current strong prices growth clearly driven by unprecedented owner-occupier lending activity.</p>

<p>Any misguided move to raise interest rates to quell strong buyer activity would clearly place in jeopardy the current fragile and nascent economic recovery – something the RBA has clearly acknowledged.”</p>

<p><strong>Dr Andrew Wilson </strong><em>is the chief economist at Archistar</em></p>
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awilson

investors have joined the stampede of buyers rushing housing markets: Archistar's Andrew Wilson

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<p>It’s a great time to be a landlord in Australia. With rare exceptions, vacancies are ultra low, rents are rising and there’s massive momentum behind prices.</p>

<p>A nationwide property boom is under way (with the big city inner-ring unit markets the exception) and the curious thing is that investors haven’t been joining the party. </p>

<p>The growth we saw in most markets in 2020 was driven by owner-occupiers, with first-home buyers leading the charge and other home buyers, especially lifestyle-seekers, prominent as well.</p>

<p>Investors were sitting on the fence, worried firstly about the September Cliff which failed to materialise and now apparently concerned about a potential March Cliff.</p>

<p>[smartcode_project:default project_id=600]</p>

<p>They’ve been waiting to see what would happen, before making decisions. And here’s what has happened while they’ve been fence-sitting – the new data from Domain shows that all capital cities had house price growth ranging from solid to strong in 2020, as did most of regional Australia. There was particularly notable uplift in the December Quarter.</p>

<p>This confirms earlier data from CoreLogic and both confirm the anecdotal evidence from the coal-face of markets which shows properties receiving multiple offers and selling for more than the asking prices, often before being formally listed.</p>

<p>Other research shows that rents have been rising in many parts of Australia, on the back of vacancy rates so low that it constitutes a national rental crisis.</p>

<p>So the hesitant investors have missed the first phase of the national property boom.</p>

<p>If they’d bought a year ago in many parts of Australia, their properties would now be worth 10%, 15% or 20% more than they paid.</p>

<p>For those who bought in sexy lifestyle locations like Byron Bay and the upmarket areas of the Sunshine Coast, a $1 million investment a year ago would now be worth around $1.3 million.</p>

<p>[smartcode_project:default project_id=84861]</p>

<p>If you’d bought a $400,000 property in Bendigo 12 months ago, it would likely now be worth around $460,000 (based on the median price data).</p>

<p>So it’s time for investors to stop procrastinating and get busy. And the latest ABS data on loans indicates that, at last, investors are starting to get involved.</p>

<p>This, in fact, is typical investor behaviour. Investors don’t lead property cycles, they react to them. They stampede into the market when they hear there’s a boom happening.</p>

<p>So I expect a big surge of activity from investors in 2021. There are too many good reasons to become buyers of well-located real estate and make it available to a hungry rental market.</p>

<p>The uplift in investor buyers will add further energy to the momentum already happening in markets across the nation.</p>

<p>It will make a national property boom that much more certain.</p>

<p>Terry Ryder is the founder of hotspotting.com.au</p>

<p>ryder@hotspotting.com.au</p>

<p>twitter.com/hotspotting</p>
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The hesitant investors have missed the first phase of the national property boom.



terryryder

It’s time for real estate investors to stop procrastinating and get busy: Hotspotting's Terry Ryder

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<p>The fundamental cynicism of major banks has been on display in the past week, with lenders exploiting APRA’s anti-investor measures to boost their profits.</p>
<p>Most major lenders have lifted interest rates for investors and then tried to represent the cash grab as a “we had no choice” situation caused by the regulators.</p>
<p>There is no justification for the interest rate hike. Lenders have already tightened their lending criteria in a number of ways designed to eliminate many fringe dwellers from the possibility of borrowing to buy investment properties.</p>
<p>The interest rate hike is clearly not motivated by a desire to further restrict investor activity. It’s simply a profit-boosting play which can be explained away, conveniently but dishonestly, as a consequence of APRA moves.</p>
<p>How do we know?  Because the big banks and other lenders have lifted interest rates on existing investor loans, not just on new ones.</p>
<p>Increasing interest rates on existing loans does nothing to reduce investor borrowing to buy real estate. All it does is boost bank profits. </p>
<p>If they were fair dinkum in their claims that they’re acting “as part of our commitment in meeting APRA’s benchmark” (as Westpac tried to claim), they would lift rates on new loans only.</p>
<p><span>The Bank of Queensland, which lifted its standard variable rate for investor loans 29 basis points, has a master of weasel words on staff called Matt Baxby who came up with this classic to justify the unjustifiable this week: “</span>We are adopting a prudent position that is aligned with the market and balances our own growth objectives with the risks associated with investor lending in general and the overall growth of investor lending in the market as a whole.”</p>
<p>If you can make sense of that statement, please write and let me know. I think a reasonable translation is: “We’re shafting a significant proportion of our existing customers but we’re hoping you won’t notice.”</p>
<p>Beyond that, the APRA measures and lenders’ response to them are an extraordinary case of overkill by bureaucrats who clearly don’t have a grip on market reality. </p>
<p>The faceless APRA boffins who make their pronouncements never stand up to be identified or face any scrutiny of their actions. If we had the opportunity to question them, whoever they are, I’m quite certain we would discover their understanding of real estate markets is wafer thin.</p>
<p>Essentially, Sydney is having a boom and all of Australia is being punished for it.</p>
<p>Taking punitive measures that apply nationally in response to an issue in Sydney is tantamount to amputating a leg to cure a sprained ankle.</p>
<p><span>I note </span>that the Property Investment Professionals of Australia (PIPA) has questioned the decision by lenders to increase interest rates for both new and established property investors, suggesting a different approach should’ve been taken to ensure a sustainable property market.</p>
<p>PIPA chair Ben Kingsley said APRA’s pressure tactics to force individual lenders to lock out investors have raised both concerns and question marks for the industry.</p>
<p>“Increasing borrowing costs for investors who bought into the market some time ago seems unfair and detracts from what should be the common goal of creating a balanced property market,” he said.</p>
<p>PIPA suggested that more targeted measures to slow new investor lending in certain areas, such as decreasing and restricting borrowing power for new investors in locations where the market is particularly heated, would have been a better approach.</p>
<p><span style="line-height: 1.3em;">Couldn’t agree more.</span></p>
<p><em>TERRY RYDER is the founder of <a href="https://www.hotspotting.com.au/" target="_blank">hotspotting.com.au</a>. You can <a href="https://mailto:ryder@hotspotting.com.au" target="_blank">email him</a> or follow him on <a href="https://twitter.com/hotspotting" target="_blank">Twitter.</a></em></p>
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terryryder-YECXbqmri2

Fundamental cynicism of major banks on display: Terry Ryder

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<p class="p1"><span class="s1"><strong>EXPERT OBSERVATION</strong></span></p>
<p class="p1"><span class="s1">Dwelling values, particularly those in Sydney and Melbourne, have been falling now for a number of months.<span class="Apple-converted-space">  </span>The latest ABS housing finance data indicates that the impact of these falls is now seemingly being felt in demand for new mortgages.<span class="Apple-converted-space">  </span></span></p>
<p class="p1"><span class="s1">While the value of lending fell over the month for owner occupiers and investors, the slowdown was much more substantial for investors, and the sharp month-on-month fall follows a downwards trend that has been evident across several rounds of macro prudential measures over the past few years.<span class="Apple-converted-space">  </span>This isn’t really a surprise given so much of the lending to investors has been focused on Sydney and Melbourne and these cities are seeing values fall and yields at close to historic lows while investors are also incurring higher mortgage rates than owner occupiers, with additional rate premiums they use interest-only mortgages,.</span></p>
<p class="p2"><span class="s1"><span class="Apple-converted-space">Click here <a href="https://www.propertyobserver.com.au/images/2018/5/11/fig1.jpg" target="_blank">to enlarge.</a> </span></span></p>
<p class="p2"><span class="s1"><span class="Apple-converted-space"><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/2018/5/11/fig1.jpg" alt=""></span></span></p>
<p class="p1"><span class="s1">In March 2018 there was $31.9 billion worth of housing finance commitments which was the lowest monthly value of commitments since August 2016.<span class="Apple-converted-space">  </span>Housing finance commitments were split between $21.0 billion to owner occupiers and $10.9 billion to investors.<span class="Apple-converted-space">  </span>Owner occupier commitments fell by -1.9% over the month to their lowest value since December 2017.<span class="Apple-converted-space">  </span>Investor finance commitments were down by -9.0% over the month, falling to their lowest value since January 2016.<span class="Apple-converted-space">  </span>The declining trend in investor housing finance commitments had slowed recently, however, the -9.0% monthly fall was the largest decline since September 2015 when they fell -10.4% over the month as lenders tightened in order to remain under the 10% APRA speed limit in annualised terms.</span></p>
<p class="p2"><span class="s1"><span class="Apple-converted-space">Click here <a href="https://www.propertyobserver.com.au/images/2018/5/11/fig2.jpg" target="_blank">to enlarge. </a></span></span></p>
<p class="p2"><span class="s1"><span class="Apple-converted-space"><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/2018/5/11/fig2.jpg" alt=""></span></span></p>
<p class="p1"><span class="s1">The $21.0 billion worth of finance commitments to owner occupiers was split between: $1.9 billion for construction of dwellings, $1.2 billion for purchase of new dwellings, $6.3 billion for the refinance of established dwellings and $11.6 billion for the purchase of established dwellings.<span class="Apple-converted-space">  </span>Each type of owner occupier commitment fell over the month however, year-on-year the value of lending for construction of dwellings was the only owner occupier finance segment that was lower.</span></p>
<p class="p2"><span class="s1"><span class="Apple-converted-space">Click here <a href="https://www.propertyobserver.com.au/images/2018/5/11/fig3.jpg" target="_blank">to enlarge.</a></span></span></p>
<p class="p2"><span class="s1"><span class="Apple-converted-space"> <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/2018/5/11/fig3.jpg" alt=""></span></span></p>
<p class="p1"><span class="s1">The $10.9 billion worth of investor housing finance commitments in March 2018 was split between $1.0 billion for construction of new dwellings and $9.9 billion for established dwellings.<span class="Apple-converted-space">  </span>The value of lending for new construction was -18.9% lower over the month while the value of commitments for established dwellings was -7.9% lower. <span class="Apple-converted-space"> </span></span></p>
<p class="p2"><span class="s1"><span class="Apple-converted-space">Click here <a href="https://www.propertyobserver.com.au/images/2018/5/11/fig4.jpg" target="_blank">to enlarge.</a></span></span></p>
<p class="p2"><span class="s1"><span class="Apple-converted-space"><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/2018/5/11/fig4.jpg" alt=""></span></span></p>
<p class="p1"><span class="s1">Looking more broadly at finance commitments for new housing vs established housing shows a decline over the month for both.<span class="Apple-converted-space">  </span>The chart also shows how the established market, of which there are substantially more properties, dwarfs the new housing market.<span class="Apple-converted-space">  </span>Over the month there was $4.1 billion worth of commitments for new housing and $21.5 billion for existing housing (excluding refinances).<span class="Apple-converted-space">  </span>Commitments for new housing fell by -1.9% over the month while commitments for existing stock were -6.8% lower.<span class="Apple-converted-space"> </span></span></p>
<p class="p1"><span class="s1">A month’s worth of data doesn’t necessarily indicate a trend but it was quite a substantial fall in the value of housing finance commitments in March, particularly for investors.<span class="Apple-converted-space">  </span>CoreLogic has believed for some time that investment in housing, particularly in the most expensive markets of Sydney and Melbourne, made little sense given stretched affordability, yield compression and little near-term value growth prospects with values currently declining.<span class="Apple-converted-space">  </span>Despite this, lending finance data (which will be updated next Tuesday) has continued to show investor activity which is well above average levels in NSW and Vic.<span class="Apple-converted-space">  </span>We would expect that the coming release will show a further weakening of demand in these two states.</span></p>
<p class="p1"><span class="s1">Over the coming months it is anticipated that mortgage activity, particularly from the investment sector will remain weak relative to recent years.<span class="Apple-converted-space">  </span>With APRA recently announcing they will lift the 10% speed limit on investment credit growth from July 1, it will be important to watch the trend in investment credit flows. <span class="Apple-converted-space"> </span></span></p>
<p class="p1"><span class="s1">There have been recent reports that lenders are starting to reduce the interest rate premiums on some interest only loans and investment loans, however any reduction in rates could be offset by stricter serviceability testing on borrower expenses and incomes as well as the prospect for renewed focus from lenders to reduce their exposure to high loan to income ratio loans as well as maintaining their reluctance to take on high loan to valuation ratio loans. <span class="Apple-converted-space"> </span></span></p>
<p class="p1"><span class="s1"><span class="Apple-converted-space"><em><span>CAMERON KUSHER</span> is head of research for CoreLogic. You can contact him <a href="https://blog.corelogic.com.au/about/"><span class="s2">here</span></a>.</em></span></span></p>
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ckusher-ujnxiKuFQs

Is a crunch in investor mortgage demand now starting to bite?

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<div>Annual credit growth slowed to 4.5 per cent as at June 2018, well down from 5.4 per cent a year earlier, according to the Reserve Bank's latest Financial Aggregates. </div>
<div> </div>
<div>Broad money growth fell to an anemic 1.9 per cent year-on-year in June - the lowest level since Bobby Brown was #1 in the Australian charts with Humpin' Around in September 1992 - a disagreeable image I'm sure you'll agree (and the credit aggregates weren't too flash either).</div>
<p> </p>
<div><img src="https://4.bp.blogspot.com/--MhvxBg4fw4/W2AWC6XtIbI/AAAAAAAArSs/5Y5zgLbG2z4cn2rQlU91uA4FfacJWXP7QCLcBGAs/s640/RBA2.jpg" width="640" height="372" data-original-height="806" data-original-width="1384"></div>
<p> </p>
<div>Personal credit shrank 1.3 per cent year-on-year, and the annual growth in business credit slowed to just 3.2 per cent.</div>
<div> </div>
<div>Housing credit held up reasonably well at 5.6 per cent.</div>
<div> </div>
<div>The monthly growth in mortgages was all driven by owner-occupiers, with total investment credit actually declining for only the third time since these records just before Bobby Brown. </div>
<div> </div>
<div>With more investors also now switching to paying down principal, investor credit as a share of total housing market outstanding loans fell to 33.5 per cent, which puts investor market share broadly back in line with the average level seen over the past 18 years since June 2000 of 33.2 per cent. </div>
<p> </p>
<div><img src="https://3.bp.blogspot.com/-j57Ykdonboo/W2AWC8rQffI/AAAAAAAArSo/igt0b2G41KgtCLYL9WArzYDP-iq1U03YwCEwYBhgL/s640/RBA1.jpg" width="640" height="350" data-original-height="797" data-original-width="1452"></div>
<p> </p>
<div>Although housing credit as measured here is slowing, the APRA ADI figures also released today grew at a faster clip, implying in turn that non-ban lenders are picking up some of the slack. </div>
<div> </div>
<div>Of of the larger players Westpac recorded solid growth in its home loan book, while Macquarie, Commonwealth Bank, and NAB notched higher totals for investment loans for the month of June.</div>
<div> </div>
<div>In saying that, NAB's investor loan book has recorded only 2 per cent growth over the past year and CBA and ANZ are in negative territory, so there is potentially ample headroom for more investor lending to return forthwith (the 10 per cent growth cap has been shelved as redundant). </div>
<div> </div>
<div><img src="https://4.bp.blogspot.com/-B8BLQUx19Os/W2AcFelOndI/AAAAAAAArTE/dx-Gm0xyewsozM30UPyib3Pog-EQZBE8QCLcBGAs/s640/A1.jpg" width="640" height="374" data-original-height="802" data-original-width="1369"></div>
<div> </div>
<div>Overall, housing credit still seems to be flowing freely enough, but the economy really needs to start generating household income growth to get things moving again. </div>
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pwargent-M4siyDbqQY

Credit strangle continues for property investors: Pete Wargent

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<div>Personal credit growth was negative again in November 2017, as it was in October 2017, and on an annual basis it has been negative since 2015 as Aussies elect to cut up their credit cards (or at least, apply for fewer cards and personal loans).<br><br>Housing credit continues to swing across from investors to owner-occupiers - in part due to loan switching - but in aggregate the annual rate of growth at 6.4 per cent remains higher than a year earlier when it was 6.3 per cent. </div>
<p> </p>
<div class="separator"><img src="https://1.bp.blogspot.com/-0yCCn4mLAfY/WkdoqRqLgVI/AAAAAAAAnus/pa_QXMs6Mc0Doek8mBChxLX3KX27AzleQCLcBGAs/s640/RBA1.jpg" width="640" height="378" data-original-height="803" data-original-width="1354"></div>
<p><br><span>Annual credit growth was steady year-on-year at 5.4 per cent.</span><br><br></p>
<div class="separator"><img src="https://4.bp.blogspot.com/-ljdXLu8nUFQ/WkdorDaKAvI/AAAAAAAAnu0/4IleZattKeA89bssvZ6Yp07INR016KMHwCLcBGAs/s640/RBA2.jpg" width="640" height="376" data-original-height="803" data-original-width="1365"></div>
<div> </div>
<div>Cross-checking to APRA's monthly figures we can see that ADIs grew their investment loan exposures at just 2.8 per cent, miles below the arbitrary 10 per cent speed limit, so there is plenty of potential capacity for investment loans to pick up again in 2018. </div>
<p> </p>
<div class="separator"><img src="https://2.bp.blogspot.com/-q_3V-T87s3I/Wkdoqtj6aSI/AAAAAAAAnuw/BV3AtDI3h-w22j7p8K64BFth2AOnLL7uwCLcBGAs/s640/APRA.jpg" width="640" height="372" data-original-height="797" data-original-width="1370"></div>
<div>
<br>On the other hand, APRA's figures showed that monthly owner-occupier credit grew by an up-tempo 0.56 per cent to $1.04 trillion, suggesting that non-banks have picked up the slack created by tighter lending standards.<br><br>
</div>
<div><strong><span style="text-decoration: underline;">Low mortgage stress</span></strong></div>
<div> </div>
<div>The unemployment rate contin<span>ued to trend lower in 2017, now down to its lowest level in 4½ years with further declines to come in 2018, and S&amp;P has its 30-day prime mortgage arrears at the lowest level we've seen. Arrears may or may not pick up a bit in 2018, but they are presently tracking at such a remarkably low level it could hardly be a surprise if they did. </span>
</div>
<p> </p>
<div class="separator"><img src="https://4.bp.blogspot.com/-2yg8nUBdByQ/WkdopQzcUuI/AAAAAAAAnuo/5fduST_I4iEZnj-8g1srhqzQhTmDp1mXgCLcBGAs/s640/Arrears.jpg" width="640" height="380" data-original-height="800" data-original-width="1344"></div>
<div> </div>
<div>The Reserve Bank's figures suggest that the ratio of household debt to disposable income will likely tick past 200 per cent in 2018, but serviceability remains very comfortable for most households, with the cost of living indexes very benign and household income growth passed its nadir.</div>
<div> </div>
<div>It was interesting to see that the Bank for International Settlements (BIS) incorporated the two uppermost points I raised at the UBS Conference panel debate, namely on Australia's household debt distribution by quintile and the tremendous growth of mortgage offsets (see borrowers and buffers) in its latest paper on household debt (though it appears to have given the buffers point relatively short shrift!).<br><br>The fact is, though, that mortgages are easier to service than they used to be, and overall households are managing pretty well, while the outlook is improving nicely in the resources states.<br><br>Roll on 2018 and the 'surprisingly resilient' articles...</div>
<div> </div>
<div>PETE WARGENT is the co-founder of AllenWargent property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank">blogger</a>.</div>
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Non-banks pick up slack for investment loans: Pete Wargent

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<p><span>Investor activity has certainly reduced on the Northern Beaches as many local suburbs have a strong reliance on the Tourism and Retail sectors, according to a recent Herron Todd White (HTW) residential report. </span></p>
<p><span>The report notes the unit markets in Manly, Fairlight and Balgowlah have seen the biggest reduction in activity, having the largest drop in weekly rents and higher vacancy rates. </span></p>
<p><span>It noted SQM Research indicated weekly asking rents for units in Fairlight have been slashed from $895 in February 2020 to $690 as of July 2020. </span></p>
<p><span>"Capital values have not declined at similar levels thus reducing potential yields," the valuation firm said. </span></p>
<p>A recent example of this reduction would be <a href="https://www.realestate.com.au/sold/property-apartment-nsw-fairlight-120102621" target="_blank">1/40 Rosedale Avenue, Fairlight</a> (pictured above), the report noted. </p>
<p>This two-bedroom, one-bathroom unit was recently leased for $600 to $620 per week after being previously leased for $745 per week in 2019.</p>
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<p><span>Investors range from local, out of towners and international buyers.</span></p>
<p><span> Australia has performed quite admirably against COVID-19, particularly when benchmarking against other countries.</span></p>
<p><span>"A number of agents have noted stronger activity, particularly for housing, from international buyers and expats," the valuation firm said. </span></p>
<p><span> As the uncertainty in the global markets make </span>the Australian property market a relatively safer investment, and many expats are looking to re- enter the market as an investment that they can turn into their family home should they need to return home.</p>
<p>A recent example of this would be <a href="https://www.realestate.com.au/sold/property-house-nsw-balgowlah-133811254" target="_blank">139 Woodland Street, Balgowlah </a>(pictured below) sold for $2.88 million in July through Cunninghams Real Estate with an original asking guide of $2.75 million, the report noted. </p>
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<p><span>The report suggests investors have traditionally been attracted to new units as their investment vehicle thanks to their lower entry price point than houses, location to essential services and low maintenance compared to a detached house in the suburbs. </span></p>
<p><span>However investors must proceed with caution with many cases of settlement valuations not meeting the original price paid off the plan. </span>This can occur years after the initial purchase has been agreed upon.</p>
<p>"If you have concerns, our advice is to engage an independent valuer to provide a valuation on the property," the valuation firm said. </p>
<p>An example from Sydney’s central west is <a href="https://www.realestate.com.au/property-apartment-nsw-lidcombe-133603762" target="_blank">114/9 Paddock Street, Lidcombe</a> (pictured below), a 2 bedroom 2 bathroom unit which sold off the plan in March 2017 for $810,000 however has now relisted with an asking price of $700,000 to $750,000.</p>
<p><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2020/8/31/lidcombe.jpg" alt=""></p>
<p><span>Given the amount of proposed units to be built in the local area and the current market conditions this trend will no doubt continue in the short term, the report noted. </span></p>
<p><span>In comparing rental returns of one and two-bedroom units, one-bedroom units in </span>Parramatta have shown a higher annual return than their two-bedroom counterparts, as shown in the table below.</p>
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<p><span>In the south, units in Mortdale and Oatley are still providing reasonable rental returns whilst vacancy rates in these suburbs have remained reasonably low compared to neighbouring suburbs along the railway line, which have had a greater supply of new units into the market. </span></p>
<p><span>According to SQM Research, the vacancy rate in June for the Mortdale/Oatley postcode was 1.7 per cent, compared to 4.9 per cent in the Penshurst postcode and 4.7 per cent in the Hurstville postcode.</span></p>
<p><span>A two-bedroom, one-bathroom, unit with one-car garage, recently sold in Rosa Street, Oatley for $700,000.</span></p>
<p><span> The 1960’s ground floor unit, with a dated but well maintained fit out, positioned within short walking distance to Oatley village shopping, cafes and railway station. </span></p>
<p><span>The unit was leased to </span>a long term tenant for $520 per week, providing a rental yield of 3.9%.</p>
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j.ballantyne1990-6AQqhLzZaK

Investor activity shrinks on the Sydney Northern Beaches: HTW residential 

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<p>EXPERT OBSERVATION</p>
<p>An increase in investor activity in the latter half of 2019 has stirred the interest of first home buyers and owner-occupiers as they return to the property market.</p>
<p>Last year, RiskWise Property Research detailed the effect investors had on the market and how their response to market forces affected that of owner-occupiers.</p>
<p>When the “investor bulls” left the market so too did the energy which drives it.</p>
<p>Investors were always significantly more sensitive than owner-occupiers to changes in out-of-pocket expenses, driven by interest rate fluctuations, changes in legislation or other events.</p>
<p>At the moment investor interest is aroused, and we are seeing more activity. And when this market is going up this has a very material impact on the residential market, particularly in Sydney and Melbourne.</p>
<p>The impact of investor activity on the housing market has been clearly demonstrated over a prolonged period which included the global financial crisis, the boom and subsequent downturn in resources construction, and increases and decreases to mortgage rates.</p>
<p>Right now, thanks to low interest rates, more relaxed credit restrictions, the election results (ruling out the feared taxation changes), APRA's changes to the floor assessment and tax cuts, we are seeing a return in confidence in the market and, consequently, for higher clearance rates and higher prices.</p>
<p>Improved auction clearance rates and consumer confidence are creating a very clear trend, that will consequently lead to price increases and a rise in auction clearance volumes, as sellers expect stronger demand for their properties and, therefore, are more confident to put them on the market.</p>
<p>The Westpac Consumer Confidence Index on House Price Expectations Index saw a dramatic rise from October last year to October 2019 of 36.1 per cent. Since May it has risen a whopping 54.4 per cent, with a 5.9 per cent rise in October alone. The biggest gains over the last two months were in NSW at 12.5 per cent and Victoria at 16.6 per cent.</p>
<p>Investor activity reached its recent peak in NSW at 46.6 per cent in Jan 2017 and over the past two years has fallen to 32 per cent. In Victoria it went from 35.5 per cent in March 2017 to 26.7 per cent in August 2019. And while these state figures are well correlated with those in Sydney and Melbourne, investor activity is slowly recovering.</p>
<p>The RBA's three interest rate cuts and other improvements have led to improved serviceability and lower out-of-pocket costs for investors and this is likely to drive a significant increase in investor activity.</p>
<p>CoreLogic figures for October show the nation's median dwelling value lifted 0.9 per cent to $524,744 in September, with median property values in Sydney and Melbourne jumping 1.7 per cent last month, reaching $805,424 and $634,913 respectively.</p>
<p>While the potential of taxation changes had diminished investor activity in the market, the election results ensured this particular risk had been removed.</p>
<p>However, construction defect faults in Sydney and Melbourne high rises meant investors were targeting more family-suitable homes.</p>
<p>Also, the potential taxation changes put forward by Labor exposed investors to a tangible risk over investment properties not suitable for owner-occupiers, especially as they would also have created primary and secondary markets, significantly impacting dwelling prices.</p>
<p>We must also take into account that some areas in Sydney and Melbourne have significant unit oversupply and underperform the market which again drives investors towards properties that enjoy a more stable demand, particularly properties which are more suited to families.</p>
<p>He said the number one indicator for market sentiment was investor lending finance (excluding refinancing).</p>
<p>If you see a material increase in investor activity, you will also see the annual rate of dwelling price growth accelerate significantly.</p>
<p>The bottom line is that the more investors there are in the market, the stronger price growth.</p>
<p><em><strong>DORON PELEG</strong> is the RiskWise CEO</em></p>
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New apartments

New townhouses

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