The residential transformation of St Kilda Road is set to continue into with more new apartment plans for the sought-after boulevard.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

Dexus recently secured approval for its slice of St Kilda Road, while Gurner also has approved plans for the precinct.

Joel Robinson

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

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.

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.

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.

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.

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.

<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" />

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.

“Our target for this exceptional development is local and overseas buyers, including first-home buyers, downsizers and investors,” Choong said.

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.

“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.

<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" />

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.

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.

The proposal also includes a commitment for 10 per cent of residential floor space to be allocated toward affordable housing through a monetary contribution.

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.

<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" />

“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.

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.

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.

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>.

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>

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

<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.

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.

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.

<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" />

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.

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.”

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.

<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" />

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.

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.

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.

<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" />

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.

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.

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.

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

Bottega House has completed settlement of a landmark riverfront site in Macquarie Street, St Lucia, representing its first major Brisbane development.&nbsp;

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;

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;

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;

Exclusive sales for the project will be led by Keenan &amp; Byrne, ahead of an anticipated launch later this year.&nbsp;

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;

“This is an incredibly rare riverfront opportunity and one we have approached with a long-term perspective,” Malloch said.&nbsp;

“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."

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;

"Demand is expected to be strong given the scarcity of premium riverfront opportunities of this nature within Brisbane’s inner-west."&nbsp;

Bottega House secures landmark riverfront site in St Lucia 

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The arrival of the first piling rig officially marks the commencement of construction at SIERA’s new beachside apartment development, Exhale, in Northcliffe.

<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.

[smartcode_project:default project_id=112661 project_image_fid=359603]

<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.

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.

“The façade was designed to maximise panoramic coastal views while creating a distinctive architectural identity,” Thompson said.

[smartcode_project:default project_id=112661 project_image_fid=355935]

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.

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.

[smartcode_project:default project_id=112661 project_image_fid=361052]

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.

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.

[smartcode_project:default project_id=112661 project_image_fid=359607]

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.
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</section>

[smartcode_project_cta:default project_id=112661]

SIERA kicks off construction at Northcliffe tower Exhale

Investor Activity

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Australia now has 2,156,319 property investors, according to the ATO.
                     Tax year 2016-17         Tax year 2015-16
One property             1,536,112           1,493,982
Two properties              407,971              395,910
Three properties            125,915              122,654
Four properties                46,460              45,229
Five properties                 19,504              18,872
Six or more                     20,357               20,017
Total                          2,156,319          2,096,664
That's a jump of 59,000 fresh investors in the 2016-17 tax year.
But the number of investors with six or more properties has barely risen with the latest ATO tally putting it at 20,357 investors in the 2016-17 tax year.
It was 20,023 in tax year 2015-16.
It is this six or more investor demographic that has attracted the attention of Opposition Leader Bill Shorten in his pursuit of negative gearing changes.
The Opposition leader Bill Shorten has conceded that Labor's negative gearing/capital gains tax reforms were not “universally loved.”
“I would rather see more young couples buy their first home, than spend billions subsidising investors acquiring multiple properties,” Shorten argues.
“All of the experts know that with scarce taxpayer dollars it’s better to put money into health and aged care than give a tax subsidy to someone buying their sixth or seventh investment property,” Mr Shorten said.
According to ATO statistics a steady 71 per cent of the Australians with rental properties have just the one investment.
That's 1,536,112 individuals with the one property.
There are 1,300,344 individuals who own loss making rental properties.
There are 855,975 individuals who are in a rent neutral/profit situation with their rental investment.
An interest in a property means the property is solely owned, jointly owned or part-year owned – for example, bought or sold a property during the year.
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j.ballantyne1990-6AQqhLzZaK

Australia now has 2,156,319 property investors

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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>
 
<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>
 
<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>
 
<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>
 
<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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EXPERT OBSERVATION
Dwelling values, particularly those in Sydney and Melbourne, have been falling now for a number of months.  The latest ABS housing finance data indicates that the impact of these falls is now seemingly being felt in demand for new mortgages.  
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.  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,.
Click here <a href="https://www.propertyobserver.com.au/images/2018/5/11/fig1.jpg" target="_blank">to enlarge.</a> 
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2018/5/11/fig1.jpg" alt="">
In March 2018 there was $31.9 billion worth of housing finance commitments which was the lowest monthly value of commitments since August 2016.  Housing finance commitments were split between $21.0 billion to owner occupiers and $10.9 billion to investors.  Owner occupier commitments fell by -1.9% over the month to their lowest value since December 2017.  Investor finance commitments were down by -9.0% over the month, falling to their lowest value since January 2016.  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.
Click here <a href="https://www.propertyobserver.com.au/images/2018/5/11/fig2.jpg" target="_blank">to enlarge. </a>
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2018/5/11/fig2.jpg" alt="">
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.  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.
Click here <a href="https://www.propertyobserver.com.au/images/2018/5/11/fig3.jpg" target="_blank">to enlarge.</a>
 <img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2018/5/11/fig3.jpg" alt="">
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.  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.  
Click here <a href="https://www.propertyobserver.com.au/images/2018/5/11/fig4.jpg" target="_blank">to enlarge.</a>
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2018/5/11/fig4.jpg" alt="">
Looking more broadly at finance commitments for new housing vs established housing shows a decline over the month for both.  The chart also shows how the established market, of which there are substantially more properties, dwarfs the new housing market.  Over the month there was $4.1 billion worth of commitments for new housing and $21.5 billion for existing housing (excluding refinances).  Commitments for new housing fell by -1.9% over the month while commitments for existing stock were -6.8% lower. 
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.  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.  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.  We would expect that the coming release will show a further weakening of demand in these two states.
Over the coming months it is anticipated that mortgage activity, particularly from the investment sector will remain weak relative to recent years.  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.  
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.  
CAMERON KUSHER is head of research for CoreLogic. You can contact him <a href="https://blog.corelogic.com.au/about/">here</a>.
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ckusher-ujnxiKuFQs

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

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Data released by the Australian Taxation Office (ATO) showed that just shy of 2.1 million Australians declared an interest in a rental property for the 2016 financial year. 
The number declaring a net rental loss to the tax office has declined over the past four years of available figures, mainly due to lower mortgage rates. 
Note that under Australian taxation law it is quite possible for an investor to declare a net rental loss to the tax office yet be in a positive cashflow position, in part due to depreciation and capital works deductions. 
<img src="https://1.bp.blogspot.com/-1whPH9ZxGns/WuK37Bk7pzI/AAAAAAAApqg/kwFHsUb5wqUHZttcqhF8Seasn-ZXSe23QCLcBGAs/s640/ATO3.jpg" width="640" height="384" data-original-height="827" data-original-width="1376">
Property investment in Australia is mainly the purview of the Mum and Dad investor, with more than 90% of investors owning just one or two rentals. 
71.3% of landlords owned a solitary investment property. 
<img src="https://4.bp.blogspot.com/-DSi5FL-iptM/WuK36mh5MgI/AAAAAAAApqY/6N9EbSDo0VEgBhfuMJcPbgE3SlZ6BBBVACLcBGAs/s640/ATO1.jpg" width="640" height="396" style="font-size: 12.16px;" data-original-height="831" data-original-width="1343">
Who uses negative gearing? A broad range of people, including just over 796,000 with a taxable income of under $80,000, and about 495,200 with a taxable income of above $80,000. 
As you might expect, wealthier negatively geared households tend to borrow more and incur greater net rental losses, at least initially. 
<img src="https://1.bp.blogspot.com/-QbU1vzGYIcg/WuLAkoI5_CI/AAAAAAAAprM/Gb4UH5XSoJgb8TXV7yfuNaVxSM2ObmOJwCLcBGAs/s640/Claimants.jpg" width="640" height="394" data-original-height="821" data-original-width="1327">
The beneficiaries of negative gearing are often in the younger cohorts, with the net rental profits tending to swell later in life. 
<img src="https://4.bp.blogspot.com/-40OBJshUFFM/WuK38E2gjtI/AAAAAAAApqk/fdPrn7RqWMQPi7I-9hF6TzNMD1h_ra4BwCLcBGAs/s640/ATO4.jpg" width="640" height="404" style="font-size: 12.16px;" data-original-height="825" data-original-width="1306">
 
Similarly, the size of net rental profits typically increases for the older cohorts as they move into their retirement years. 
 
<img src="https://1.bp.blogspot.com/-ig-jftBvOqc/WuK38ccmAcI/AAAAAAAApqo/Toa8cPMcv0AyyAkHjwroY89ZT4YNjC87QCLcBGAs/s640/ATO5.jpg" width="640" height="420" data-original-height="823" data-original-width="1249">
Budget repair happening anyway
In terms of Federal Budget repair, the ATO recorded only a very small change in net rental losses from the $3.6 billion notched in the preceding tax year.
Note that any potential Budget savings from negative gearing rule changes would relate to tax-effected rental losses (as opposed to net rental losses), negative gearing deductions being a timing difference in principle. 
Moreover, Treasurer Morrison has already made sweeping changes to plant and equipment depreciation deductions under division 40, which will begin to take effect from the 2018 tax year, while landlord travel expenses will also be disallowed (to the likely dismay of errant politicians). 
<img src="https://4.bp.blogspot.com/-vSdIcM_bPBw/WuK37AR7alI/AAAAAAAApqc/x3gB3aikBskCYiZVYvgtFEY3EVbmVtmKgCLcBGAs/s640/ATO2.jpg" width="640" height="394" data-original-height="820" data-original-width="1328">
The supposed savings from changing negative gearing rules have always been questionable to my mind, especially after lower taxable bank profits, higher public housing costs, and a raft of other factors are taken into account. 
Landlord-bashing has become a popular sport in recent years, yet at the same time the average superannuation balance suggests that millions of Australians are basing their financial futures upon drawing the Age Pension. 
The Budget balance has improved significantly regardless of late, thanks to a record +431,000 surge in employment over the year to January 2018 combined with a timely boost in export prices.
Meanwhile at the national level the housing market has cooled and investor activity has been comfortably subdued by macroprudential measures. 
With thanks to Cameron Kusher of CoreLogic for expertly dicing up some of the above data points by age cohort at lightning speed.
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71% of landlords owned a solitary investment property: 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). 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>
 
<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>
 Annual credit growth was steady year-on-year at 5.4 per cent. 
<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>
 
<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>
 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. 
</div>
<div>Low mortgage stress</div>
<div> </div>
<div>The unemployment rate continued 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. 
</div>
 
<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!). 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. 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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There are now a record 2.05 million taxpayer individuals with an ownership interest in a rental property in Australia.
There has been a jump of 348,000 extra investors over six years, increasing at around 58,000 each tax year.
The latest release of ATO data for 2014-15 tax year show the number of individuals with the one investment property stands at a record 1.468 million.
Less than one percent of investors, or 19,198 own six or more property, despite the recent proliferation of articles about their feat everywhere but on Property Observer. 
<table class="tbl-lrg"><tbody>
<tr>
<th class="alignCentre">
Property interests
</th>
<th class="alignRight">
2012–13      
</th>
<th class="alignRight">
2013–14         
</th>
<th class="alignRight">
2014–15
</th>
</tr>
<tr>
<td>
1
</td>
<td>
1,434,211
</td>
<td>
1,445,011
</td>
<td>
1,468,949
</td>
</tr>
<tr>
<td>
2
</td>
<td>
363,705
</td>
<td>
371,038
</td>
<td>
383,505
</td>
</tr>
<tr>
<td>
3
</td>
<td>
110,379
</td>
<td>
113,897
</td>
<td>
118,412
</td>
</tr>
<tr>
<td>
4
</td>
<td>
40,283
</td>
<td>
41,360
</td>
<td>
43,239
</td>
</tr>
<tr>
<td>
5
</td>
<td>
16,600
</td>
<td>
16,982
</td>
<td>
18,231
</td>
</tr>
<tr>
<td>
6 or more
</td>
<td>
17,671
</td>
<td>
18,231
</td>
<td>
19,198
</td>
</tr>
<tr>
<td>
Total
</td>
<td>
1,982,849
</td>
<td>
2,006,519
</td>
<td>
2,051,534
</td>
</tr>
</tbody></table>
Source ATO 
An interest in a property means the property is solely owned, jointly owned or part-year owned.
Looking further back the taxation statistics for the 2009/10 financial year showed that there were 1.7 million individuals who owned a rental property.
 <img class="aligncenter size-full wp-image-2079" src="https://blog.corelogic.com.au/wp-content/uploads/2013/05/Individuals-interest-in-rental-property.jpg" alt="Individual's interest in rental property" width="500" height="283">
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jchancellor-FAypfDUnLy

The number of Australians with rental property investments rises to 2.05 million

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Interest rate cuts and the return of lending to investors over the past year have been the catalyst for increased investor interest, according to CoreLogic.
The property data firm says that it was confirmed in the January 2017 housing finance data released last week by the Australian Bureau of Statistics (ABS).
According to CoreLogic research analyst Cameron Kusher: “Pairing the housing finance data with the Reserve Bank’s (RBA) lending aggregate data provides deeper insight into housing investor behaviour.”
Over the month of January, the data confirmed that housing finance data showed that investors committed to a total of $13.8 billion in finance for investment properties – this represents a 4.2% rise over the month and a 27.5% increase year-on-year (the largest annual increase since August 2014).
<a href="https://www.propertyobserver.com.au/images/2017/03/16/Screen%20Shot%202017-03-16%20at%202.28.46%20pm.jpg" target="_blank">Click to enlarge</a>
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/03/16/Screen%20Shot%202017-03-16%20at%202.28.46%20pm.jpg" alt="">
The value of investor housing finance commitments remains below its previous peak but has ramped-up significantly over the past 12 months.
“In fact, the value of investor housing finance commitments in January 2017 was just -5.3% lower than its historic peak in April 2015,” Kusher said.
“Investor housing finance commitments is clearly flowing to established homes rather than new homes.
“This isn’t really a surprise when you consider that the amount of established housing stock is substantially greater than new stock and new housing typically has a price premium over existing stock.
“Over the month, $1.2 billion in commitments were for new construction compared to $12.6 billion for established housing stock.”
<a href="https://www.propertyobserver.com.au/images/2017/03/16/Screen%20Shot%202017-03-16%20at%202.28.54%20pm.jpg" target="_blank">Click to enlarge</a>
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/03/16/Screen%20Shot%202017-03-16%20at%202.28.54%20pm.jpg" alt="">
Data published by the RBA on investor housing credit, represents the total amount outstanding to mortgage lenders for the purposes of investor housing.
In January 2017, investor credit expanded by 0.6% to be 6.6% higher over the year. The monthly change was actually the lowest it has been in four months while the annual change was the highest it has been in 10 months.
“Much like the housing finance data, the credit data shows the impact of APRAs recent curbs to investor credit growth which have slowed growth however, more recently credit has once again started to expand,” Kusher said.
<a href="https://www.propertyobserver.com.au/images/2017/03/16/Screen%20Shot%202017-03-16%20at%202.29.02%20pm.jpg" target="_blank">Click to enlarge</a>
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/03/16/Screen%20Shot%202017-03-16%20at%202.29.02%20pm.jpg" alt="">
At the end of January 2017, the RBA reported that there was $572.2 billion in investor credit outstanding to Australian lenders, CoreLogic said.
This figure accounted for 34.9% of all housing credit outstanding ($1.637 trillion) and 21.5% of total outstanding credit.
“This shows a significant rise in investor housing credit, in fact, two decades ago investor credit represented 21.8% of total housing credit and 8.7% of all credit,” said Kusher.
<a href="https://www.propertyobserver.com.au/images/2017/03/16/Screen%20Shot%202017-03-16%20at%202.29.11%20pm.jpg" target="_blank">Click to enlarge</a>
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/03/16/Screen%20Shot%202017-03-16%20at%202.29.11%20pm.jpg" alt="">
“With the substantial increase in dwelling values in Sydney and Melbourne over recent years, home owners are able to utilise the equity in their principal place of residence to purchase investment properties.
“However, while investor activity is rising, the proportion of total housing finance commitments to owner occupier first home buyers is at an historic low.
“Over the coming months we expect to see further tightening of lending policies to investors with some lenders approaching APRAs 10% speed limit.
“Should this occur it is likely to result in a moderate slowing of demand from the investment segment, at least temporarily like we saw in mid-2015 and early 2016.”
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Investor activity continues to surge: CoreLogic

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Wingate Investment Partners Trust (WIP) fund has reached $270 million in funds under management in five years and the firm predicts it will grow to $1 billion.
Wingate managing director Ryan Levin attributes WIP’s success to its investment philosophy of having its own skin in the game – investing its own balance sheet and its principals’ and shareholders’ capital in deals together.
The WIP funds have delivered investors double digit returns consistently.
As the global economy continues to operate in an historically low interest-rate environment, sophisticated investors are seeking new options with a proven track record, without taking on greater risk.
WIP offers a diversified portfolio of secured debt with contractually determined outcomes, offering consistent double digit returns that are uncorrelated to volatile and uncertain financial markets.
If the risk isn’t good, Wingate won’t invest.
Wingate’s success has attracted high networth individuals and institutional investors across its four business arms: funds management, consumer finance, property lending and private equity.
Wingate says it currently has interests in a pipeline of more than $1 billion worth of Gold Coast high-rise apartments, and has recently financed deals including a $68 million redevelopment of a Byron Bay shopping centre and in its private equity business the firm launched Up&amp;Go in British supermarkets in 2015.
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jonathanchancellor-7SQnKwU6yx

Wingate's Investor Partners Trust funds under management reach $270 million

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Sydney property investors are better off looking to other state capitals that are earlier in their growth cycle, according to a new research report.
The report by investment advisor Momentum Wealth suggests the days of stellar growth are numbered after Sydney's median house price rocketed.
It has increased 46.7 percent since the start of the current upcycle in January 2012. It now stands at around $880,000
Short-term growth prospects are waning in the Sydney market according to the research report, Property Market Spotlight: Sydney.
It examined the city’s key demand and supply indicators and found that conditions were easing as a well-publicised apartment oversupply loomed.
Properties are now taking longer to sell, according to the report. The number of properties selling has dropped and dwelling approvals have plateaued at record levels.
“It can be acutely detrimental to buy at the peak of a market upcycle as the ensuing downturn can have a severe setback on investors’ finances and investment goals,” Momentum Wealth managing director Damian Collins said.
“While it’s impossible to predict how much longer Sydney’s upcycle will continue, our research report highlights an easing in several key market indicators suggesting the strongest capital growth in the current upcycle has passed.”
Some buyers are being priced out of the market due to the extreme affordability problems.
The threat of an apartment oversupply continues to be at the forefront of the property market conversation.
The research report suggests both of these factors will weigh on short to medium term capital growth prospects.
“While the long-term outlook for the Sydney property market remains positive, the short-to-medium term view isn’t as rosy,” Collins said.
“The research report explains that investors considering the Sydney market are likely to be better off looking at other Australian capital cities that are earlier in their growth cycle, are more affordable and offer higher yields.”
“While Sydney’s time will come again, for the time being better investments can be made elsewhere,” he said.
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Sydney property investors better off elsewhere as strongest growth has passed

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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.
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.
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.
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.
How do we know?  Because the big banks and other lenders have lifted interest rates on existing investor loans, not just on new ones.
Increasing interest rates on existing loans does nothing to reduce investor borrowing to buy real estate. All it does is boost bank profits. 
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.
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: “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.”
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.”
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. 
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.
Essentially, Sydney is having a boom and all of Australia is being punished for it.
Taking punitive measures that apply nationally in response to an issue in Sydney is tantamount to amputating a leg to cure a sprained ankle.
I note 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.
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.
“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.
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.
Couldn’t agree more.
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>
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