<p>ASX-listed developer <a href="https://www.apartments.com.au/developers/stockland">Stockland</a>&nbsp;is continuing its push back into the new apartment market, filing plans for a prominent gateway site between Collingwood and East Melbourne.</p>

<p>The development giant, which moved back into the new apartment space when it announced Stanton Place in Sydney's Rosebery and have since filed plans for a 50-storey tower, are jumping into the off the plan Melbourne market.</p>

<p>They are hoping to create a mixed-use neighbourhood precinct for <a href="https://www.apartments.com.au/new-apartments/79-81-victoria-parade-collingwood-vic-3066">79-81 Victoria Parade</a>, replacing an existing commercial building with a scheme by <a href="https://www.apartments.com.au/architects/john-wardle-architects">Wardle</a>&nbsp;for 478 apartments,&nbsp;ground-floor retail, new public open spaces and a publicly accessible pedestrian laneway.</p>

<p><img alt="First look: Stockland plans new mixed-use neighbourhood precinct for Collingwood gateway site" data-entity-type="file" data-entity-uuid="72dbbca9-3918-4073-afad-a0c0c35be8e7" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/stockland%20pers.png?VersionId=bzMVUKKxvwuNK1m0v_td126Rgct32uk_" /></p>

<p>The design report identifies the public realm as a central driver of the proposal.</p>

<p>"Collingwood has limited access to high-quality parks and public open space, and the proposal delivers valuable new areas for respite, social interaction and fine-grain retail activity."</p>

<p>The development would deliver a diverse mix of housing, including studio, one, two and three-bedroom apartments alongside townhouse-style residences. Two basement levels are proposed beneath the development, providing resident and retail parking as well as extensive bicycle facilities.</p>

<p>Wardle's design draws heavily on Collingwood's industrial character, using articulated building forms, brickwork and robust materials inspired by the suburb's warehouse and manufacturing heritage. The built form has been broken into a series of smaller volumes to better respond to the surrounding streetscape while extensive communal gardens, rooftop amenities and shared resident spaces are integrated throughout the project.</p>

<p><img alt="First look: Stockland plans new mixed-use neighbourhood precinct for Collingwood gateway site" data-entity-type="file" data-entity-uuid="7b2135ed-65df-4253-ad53-f216f06bd467" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/stockland%20podium.png?VersionId=l1B6Hqn8zs772VxH6L1fDPg0KHshan9v" /></p>

<p>The planning documents describe the existing office building as offering little engagement with the public realm, with the redevelopment intended to create a more permeable and active neighbourhood destination.</p>

<p>"The proposed scheme presents a significant opportunity to deliver a vibrant retail plaza and a local neighbourhood hub serving both existing and future Collingwood residents."</p>

<p>The 79–81 Victoria Parade site occupies a strategic location about 1.5 kilometres east of Melbourne's CBD, at the threshold between Collingwood and East Melbourne. It is well served by tram services along Victoria Parade and sits within walking distance of St Vincent's Hospital, Fitzroy Gardens, the Fitzroy activity centre and a broad range of employment, retail and hospitality destinations.</p>


Joel Robinson

Stockland plans new mixed-use neighbourhood precinct for Collingwood gateway site

<p>An 1880s timber cottage that has survived Kangaroo Point's transformation from riverside suburb to high-density apartment precinct is set to become the centrepiece of <a href="https://www.apartments.com.au/developers/zephyr">Zephyr Group</a>'s proposed Banksia development.</p>

<p>Rather than see the locally heritage-listed Alpha Cottage as an obstacle to navigate, plans integrate the landmark home into a new 18-storey residential tower, giving one of the suburb's oldest surviving residences a new role as the project's communal hub.</p>

<p>The development application covers a 1,177 sqm amalgamated site at 127-133 Lambert Street and 30 Shafston Avenue, where Zephyr Group plans to deliver 64 apartments above three basement levels. Designed by <a href="https://www.apartments.com.au/architects/joe-adsett-architects">Joe Adsett Architects</a>, the proposal carefully weaves the retained heritage cottage into a contemporary residential scheme, with the tower elevated above the historic building to preserve its presence within the Lambert Street streetscape.</p>

<p><img alt="First look: Zephyr Group's Banksia to wrap new Kangaroo Point tower around 1880s Alpha Cottage" data-entity-type="file" data-entity-uuid="f9dc5bdb-d691-4c60-bf2b-c3ed405a3e75" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Banksia.png?VersionId=Jh4bjlewU.o8HXWt0V4KaFA_lPcF7KWM" /></p>

<p>Named after the native Australian Banksia flower, the project draws inspiration from its distinctive form through curved balconies, sculpted planter boxes and cascading subtropical landscaping that soften the building's profile.</p>

<p>As the design report explains: "The tower's identity is defined by its feature facade, drawing direct inspiration from the Banksia wildflower. The building departs from traditional rigidity through the use of elegant, GRC-moulded planter boxes that appear as if shaped by the breeze."</p>

<p>Plans propose 64 apartments, comprising 32 two-bedroom and 32 three-bedroom residences, across an 18-storey tower. Residents would have access to rooftop amenities including a swimming pool, spa, gym, sauna, private cinema, dining spaces and landscaped recreation areas, while more than half the site is dedicated to planting and open space.</p>

<p><img alt="First look: Zephyr Group's Banksia to wrap new Kangaroo Point tower around 1880s Alpha Cottage" data-entity-type="file" data-entity-uuid="16041b5f-033e-47fa-8fbe-9886e072c1f2" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/pool.png?VersionId=kpx5w4EbLx0_TdWfDoD1vrSs0_cZ5Ao1" /></p>

<p>The heritage component is the defining feature of the proposal. Constructed in the early 1880s and occupied from at least 1883, Alpha Cottage is recognised by Brisbane City Council as an important surviving example of Kangaroo Point's nineteenth-century residential development and as a representative transverse-gable timber cottage. Despite extensive redevelopment across the peninsula, the building has retained a high degree of its original form and internal fabric.</p>

<p>As part of the redevelopment, the cottage will be carefully relocated a short distance within its original allotment to facilitate construction before being returned to a prominent position along Lambert Street. Original verandah elements will be dismantled, catalogued and reinstated, while significant internal features, including timber flooring, wall linings, joinery, doors, windows and hardware, will be retained. Later additions, including the enclosed rear verandah, will be removed to better reveal the building's original form.</p>

<p>Once restored, Alpha Cottage will accommodate the building manager's office, mail room and parcel facilities, providing an active everyday use that supports its long-term conservation rather than preserving it as a static display. The heritage strategy also maintains landscaped space around the building, allowing it to remain visually distinct beneath the new tower.</p>

<p><img alt="First look: Zephyr Group's Banksia to wrap new Kangaroo Point tower around 1880s Alpha Cottage" data-entity-type="file" data-entity-uuid="43b027e1-576e-4624-a66c-7cc54ea8b7be" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/banksia%20tower.png?VersionId=2W6E2yfkj2AQlWlLeV986grA5zB9f817" /></p>

<p>The Heritage Impact Assessment concludes that "the proposal secures the ongoing occupation, maintenance and conservation of Alpha Cottage," finding the development would result in "no more than a minor impact on the cultural heritage significance" of the building while ensuring its long-term future.</p>

<p>Joe Adsett Architects have designed the tower to sit above the heritage building rather than overwhelm it, creating a clear visual separation between old and new. The development's flowing balconies, integrated planting and organic façade respond to Brisbane's subtropical climate while complementing the restored cottage below.</p>

<p>Banksia occupies a prominent corner in Kangaroo Point within walking distance of the Kangaroo Point Bridge, Brisbane River, ferry services, QUT, the CBD and the Woolloongabba precinct. The site also benefits from direct access to active transport infrastructure and sits within an area earmarked for continued higher-density residential growth.</p>


Zephyr Group's Banksia to wrap new Kangaroo Point tower around 1880s Alpha Cottage

<p>Buying into a masterplanned community often means committing to a vision still years from taking shape. At <a href="https://www.apartments.com.au/new-apartments/kew-tallawong-23-27-schofields-road-tallawong-nsw-2762">Kew Tallawong</a>, that vision is already visible.</p>

<p>Residents have moved into the completed first stage, landscaped spaces are established, and the next chapter is now underway. Stage 1 has been completed and settled, with Stage 2 now selling off-the-plan.</p>

<p>Designed by <a href="https://www.apartments.com.au/architects/pbd-architects">PBD Architects</a>, <a href="https://www.apartments.com.au/new-apartments/kew-tallawong-23-27-schofields-road-tallawong-nsw-2762">Kew Tallawong</a> combines attainable apartment living with sustainability initiatives rarely seen at this price point, including rooftop solar, battery storage and a resident EV-sharing program.</p>

<p><iframe allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" allowfullscreen="" frameborder="0" height="315" referrerpolicy="strict-origin-when-cross-origin" src="https://www.youtube.com/embed/6RNt3AvtBpI?si=JUhuCV2ZRXsYaoJZ" title="YouTube video player" width="560"></iframe></p>

<p>Located on Schofi​elds Road, just moments from Tal​lawong Metro Station and Schof​ields Train Station, <a href="https://www.apartments.com.au/new-apartments/kew-tallawong-23-27-schofields-road-tallawong-nsw-2762">Kew Tallawong</a> has been designed to appeal to a broad mix of buyers, from first-home purchasers looking for a foothold in Sy​dney's property market to downsizers seeking a connected, low-maintenance lifestyle.</p>

<p><a href="https://www.apartments.com.au/new-apartments/kew-tallawong-23-27-schofields-road-tallawong-nsw-2762">Kew Tallawong</a> has been conceived as a thoughtfully planned masterplanned community that will evolve over multiple stages, with buyers now able to secure one, two and three-bedroom apartments within a neighbourhood that is already beginning to establish its identity.</p>

<p>One of the project's defining features is its focus on sustainability. Solar energy systems, battery storage and future EV charging infrastructure have been incorporated throughout the development, reflecting a long-term approach to both environmental performance and everyday convenience.</p>

<p>Sustainability sits at the centre of the development's vision, with solar energy systems, battery storage and future EV charging infrastructure integrated throughout the community.</p>

<p>That emphasis on future-ready living extends beyond the technology. Landscaped communal gardens, outdoor gathering spaces and plans for a future retail precinct aim to create a neighbourhood where residents can access daily conveniences without travelling far from home.</p>

<p>[smartcode_project:default project_id=149637 project_image_fid=351027]</p>

<p>The apartments themselves have been designed with liveability front of mind. Rather than chasing maximum density, the focus has been placed on creating practical homes with generous natural light, usable layouts and strong connections to outdoor space.</p>

<p>Importantly, these design principles have been applied consistently across the one, two and three-bedroom apartment offerings.</p>

<p>The appeal of <a href="https://www.apartments.com.au/new-apartments/kew-tallawong-23-27-schofields-road-tallawong-nsw-2762">Kew Tallawong</a> is also closely linked to its location within Syd​ney's rapidly evolving north-west growth corridor. Over the past decade, major infrastructure investment has transformed the area, with new transport links, business precincts and community facilities reshaping suburbs like Talla​wong and Schofiel​ds.</p>

<p>The agent says buyers are increasingly recognising the area's long-term potential.</p>

<p>"Typical buyers that we're finding across <a href="https://www.apartments.com.au/new-apartments/kew-tallawong-23-27-schofields-road-tallawong-nsw-2762">Kew Tallawong</a> especially are your first-home buyers, your investors, your upsizers as well as your downsizers," Hawes says.</p>

<p>Connectivity remains one of the project's strongest drawcards. Residents have access to both Tallaw​ong Metro Station and Schofi​elds Train Station, providing links to the Sydn​ey CBD, Norw​est Business Park, Macquari​e Park and other major employment hubs. Retail centres including Rous​e Hill Town Centre and Sch​ofields Village are also nearby, alongside schools, parks and future healthcare infrastructure.</p>

<p>[smartcode_project:default project_id=149637 project_image_fid=351031]</p>

<p>For Stage 1 resident Roji, it is the balance between convenience and comfort that has defined the experience of living at Kew.</p>

<p>"For me, it's a balance of quality and convenience," she says. "Everything I need is right here."</p>

<p>"If I wanted to catch the train, Scho​fields Station is just around the corner. Tallaw​ong Metro connects me to the city."</p>

<p>More importantly, she says, the development has delivered something that cannot be measured in floorplans or specifications.</p>

<p>"<a href="https://www.apartments.com.au/new-apartments/kew-tallawong-23-27-schofields-road-tallawong-nsw-2762">Kew Tallawong</a> feels like home."</p>

<p>[smartcode_project:default project_id=149637 project_image_fid=351024]</p>

<p>As Stage 2 enters the market, that lived experience may be one of the project's strongest selling points. Buyers are not purchasing into an untested concept or a future promise. They are joining a community that is already taking shape.</p>

<p>Ongoing investment in transport, retail, healthcare and public open space continues to strengthen the appeal of Syd​ney's north-west growth corridor, while <a href="https://www.apartments.com.au/new-apartments/kew-tallawong-23-27-schofields-road-tallawong-nsw-2762">Kew Tallawong</a>'s established first stage provides buyers with a tangible sense of the community's future direction.</p>

<p>For a limited time, buyer can secure a new home at <a href="https://www.apartments.com.au/new-apartments/kew-tallawong-23-27-schofields-road-tallawong-nsw-2762">Kew Tallawong</a> with just a $10,000.</p>

<p>[smartcode_project_cta:default project_id=149637]</p>


Kew Tallawong: A growing community taking shape in Sydney's north-west

<p><a href="https://www.apartments.com.au/developers/freecity">Freecity</a> has received development approval for its 51-storey mixed-use tower at 153-157 Walker Street, North Sydney, set to be one of the tallest mixed-use residential-led buildings in one of Sydney’s most sought-after commercial and residential addresses.</p>

<p>Lodged as a State Significant Development Application (SSDA) through the Housing Delivery Authority (HDA) pathway and approved by the NSW Department of Planning, Housing and Infrastructure following a comprehensive public exhibition and submissions process, <a href="https://www.apartments.com.au/new-apartments/153-walker-street-north-sydney-nsw-2060">the project</a> will deliver 296 apartments, alongside a 170-room, luxury hotel, activated retail and significant public domain improvements.</p>

<p>Situated just 200 metres from Victoria Cross Metro Station, on one of the largest developable sites in North Sydney, the development will rise to 234 metres, making it one of the tallest buildings in the suburb. With an end value of approximately $1.5 billion, the project responds directly to the NSW Government’s mandate to accelerate housing delivery in well-located, transit-connected areas.</p>

<p><img alt="Freecity gets green light for mixed-use residential and hotel tower in North Sydney" data-entity-type="file" data-entity-uuid="192ec455-94bf-4e01-83ef-922b1b269d67" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Freecity%20-%20Walker%20Street%20North%20Sydney%201%20RESIZED%20.jpg?VersionId=Bzqp0SBHCDvLAHjA4QXkjuGoOEIh73Jl" /></p>

<p data-end="1160" data-start="703">The apartment mix will cater to a broad range of buyers, with 65 studio and one-bedroom apartments, 139 two-bedroom residences, 35 three-bedroom apartments, 48 four-bedroom homes, and nine penthouses. Residents will have access to a dedicated amenity level on Level 33, featuring a swimming pool with views towards the Harbour Bridge, Sydney Opera House and North Sydney CBD, as well as a gym, library, shared kitchen, lounge and outdoor entertaining areas.</p>

<p data-end="1394" data-start="1162">The hotel will occupy the lower six levels of the building and include meeting and function spaces, a wellness centre with gym, yoga studio, swimming pool and sauna, further strengthening North Sydney's growing hospitality offering.</p>

<p data-end="1767" data-start="1396">At ground level, the development has been designed to improve pedestrian connections through the precinct. More than 700 sqm of retail space will activate the street frontage, while a landscaped through-site link connecting Walker Street, Little Walker Street and Doris Fitton Park will provide new public open space with seating, paving and extensive native landscaping.</p>

<p data-end="1936" data-start="1769">Freecity Group Co-Founder and Joint CEO Tony Sun said the project represents one of the most significant development opportunities currently available in North Sydney.</p>

<p data-end="2070" data-start="1938">"This is one of the most significant development sites in North Sydney and it comes at a pivotal moment for the precinct," Sun said.</p>

<p data-end="2230" data-start="2072">"North Sydney is undergoing a genuine transformation, and this project will contribute housing the city urgently needs while creating a landmark destination."</p>

<p data-end="2397" data-start="2232">Executive Director of Development Michael Romano said demand for both residential and hotel accommodation would continue to strengthen as the Metro precinct matures.</p>

<p data-end="2600" data-start="2399">"The structural demand for high-quality housing and hotel accommodation in North Sydney is compelling, and will only grow as the precinct continues to evolve around the new Metro station," Romano said.</p>

<p data-end="2805" data-start="2602">Architectus has designed the tower, orientating the apartments to maximise views towards Sydney Harbour while introducing a sculpted façade intended to respond to light, wind and the surrounding skyline.</p>

<p data-end="2942" data-start="2807">Architectus Principal Marko Damic said the design sought to create a tower that contributes to the public realm as much as the skyline.</p>

<p data-end="3078" data-start="2944">"We wanted to design a tower that doesn't just sit in the skyline but actively participates and contributes to city life," Damic said.</p>


First look: Freecity gets green light for mixed-use apartment and hotel tower in North Sydney

<p><a href="https://www.apartments.com.au/developers/abadeen">Abadeen</a> and <a href="https://www.apartments.com.au/developers/perifa">PERIFA</a> have celebrated the topping out of <a href="https://www.apartments.com.au/new-apartments/putney-wharf-harbourfront-precinct-20-waterview-street-putney-nsw-2112">Putney Wharf,</a> marking a significant milestone in the delivery of one of Syd​ney's most anticipated waterfront communities.</p>

<p>Located on Sydney's harbourfront at <a href="https://www.apartments.com.au/developments/putney-nsw-2112">Putney</a>, the project has now reached its highest structural point, with construction progressing strongly towards completion in 2027.<br />
&nbsp;<br />
The milestone was celebrated on-site with project partners Phoenix Property Investors, Mitsubishi Estate Asia, Versatile Construction, <a href="https://www.apartments.com.au/architects/sjb-architects">SJB</a>, consultants and stakeholders, to recognise the collective effort behind the transformation of the historic waterfront site into a vibrant new residential, marina and lifestyle destination.</p>

<p>[smartcode_project:default project_id=13962 project_image_fid=362240]<br />
&nbsp;<br />
<a href="https://www.apartments.com.au/new-apartments/putney-wharf-harbourfront-precinct-20-waterview-street-putney-nsw-2112">Putney Wharf</a> will deliver a mix of waterfront residences and terraces, complemented by a private 36-berth marina, waterfront dining opportunities and a revitalised foreshore designed to reconnect the community with the river's edge.<br />
&nbsp;<br />
Abadeen Executive Chairman and Founder Justin Brown said the project represented a rare opportunity to create the next chapter in Sydn​ey's long history of successful waterfront precincts.<br />
&nbsp;<br />
"Throughout Sydney, some of the city's most sought-after addresses have emerged from carefully considered waterfront precincts such as Woolloom​ooloo Wharf, Walsh Bay and Breakfast Point," Brown said.</p>

<p>[smartcode_project:default project_id=13962 project_image_fid=362566]<br />
&nbsp;<br />
"What makes these places so successful is that they become much more than residential developments," Brown said.</p>

<p>"They bring together homes, hospitality, marina facilities, public spaces and a strong sense of community in locations where future supply is incredibly limited."</p>

<p>Brown has long described absolute waterfront land in Sy​dney as "finite."</p>

<p>"Once these opportunities are developed, they are rarely replicated. That's why Syd​ney's waterfront precincts have consistently demonstrated strong demand and long-term value growth over many decades.<br />
&nbsp;<br />
"<a href="https://www.apartments.com.au/new-apartments/putney-wharf-harbourfront-precinct-20-waterview-street-putney-nsw-2112">Putney Wharf</a> is one of the few remaining opportunities to secure a residence within a masterplanned waterfront community that combines direct water access, marina ownership opportunities and a genuine village lifestyle just moments from the Sy​dney CBD."</p>

<p>[smartcode_project:default project_id=13962 project_image_fid=362564]<br />
&nbsp;<br />
PERIFA Founder and Managing Director Fabrizio Perilli said the project reflected a shared commitment to delivering exceptional places that create long-term value for residents and the broader community.<br />
&nbsp;<br />
"The topping out milestone is a significant achievement for the Versatile Group and a testament to the collaboration between all project partners, consultants and contractors involved," Perilli said.<br />
&nbsp;<br />
"Beyond the residences themselves, <a href="https://www.apartments.com.au/new-apartments/putney-wharf-harbourfront-precinct-20-waterview-street-putney-nsw-2112">Putney Wharf</a> will establish a new waterfront destination that celebrates the history, character and lifestyle of this unique location while creating a lasting legacy for future generations."</p>

<p>[smartcode_project:default project_id=13962 project_image_fid=291195]<br />
&nbsp;<br />
Construction is being delivered by <a href="https://www.apartments.com.au/builders/versatile">Versatile Construction</a>, with structural works now substantially complete across the precinct. Attention will progressively shift to the construction of the waterview terraces, apartment façades, services and interior fit-out works over the coming months.<br />
&nbsp;<br />
With limited residences and marina berths remaining, <a href="https://www.apartments.com.au/new-apartments/putney-wharf-harbourfront-precinct-20-waterview-street-putney-nsw-2112">Putney Wharf</a> continues to attract strong interest from owner occupiers and downsizers seeking a premium waterfront lifestyle within close proximity to Putne​y Village, Rh​odes, Top Ry​de and the Syd​ney CBD.<br />
&nbsp;<br />
As one of the last opportunities to secure a residence within a new masterplanned waterfront community on Sy​dney Harbour, <a href="https://www.apartments.com.au/new-apartments/putney-wharf-harbourfront-precinct-20-waterview-street-putney-nsw-2112">Putney Wharf</a> is expected to remain a highly sought-after address for years to come.</p>

<p>[smartcode_project_cta:default project_id=13962]</p>


Abadeen, PERIFA, top out Putney Wharf harbourfront precinct

Investor Lending

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<p class="p1"> </p>
<p>In the first quarter of 2016 the Australian Labor Party (ALP) announced as part of its 'positive policies' manifesto that if elected it planned to wind back certain tax benefits for property investors.  </p>
<p class="p1"> </p>
<p>At that point, investor housing finance was down 22 percent year-on-year at just $10.8 billion, following on from APRA's cooling measures. </p>
<p class="p1"> </p>
<p>Predictably enough, since that time, to the extent that at $13.8 billion total monthly investor loans are now 28 percent higher than a year earlier. </p>
<p class="p3"><a href="https://www.propertyobserver.com.au/images/2017/03/14/A1.jpg" target="_blank"><span style="font-size: 12.16px;">Click to enlarge</span></a></p>
<p class="p3"><span style="font-size: 12.16px;"><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/2017/03/14/A1.jpg" alt=""></span></p>
<p class="p3"><span class="s1">Tax was far from the only factor in play, of course.</span><span style="font-size: 12.16px;"> </span></p>
<p class="p3"><span class="s1">Experiences in the UK showed that when new lending rules are implemented, borrowers can take a little time to get to grips with the new criteria, before adjusting course accordingly. </span></p>
<p class="p3"><span class="s1">And then there was the interest rate cut on May 4, with borrowers - correctly as it turned out - anticipating that interest rate cuts are rarely delivered as a lone wolf. </span></p>
<p class="p3"><span class="s1">Another cut followed on August 3 and then investor loans were really off to the races.</span><span style="font-size: 12.16px;"> </span></p>
<p class="p3"><span class="s2"><strong>Further measures</strong></span></p>
<p class="p3"><span class="s1">It's tempting to argue that the market should just be left to sort itself out, and in some areas it already has.</span></p>
<p class="p3"><span class="s1">When there are more rentals than willing tenants, then in time rents fall, vacancy rates rise, and owning an investment property naturally becomes are less than attractive proposition. </span></p>
<p class="p3"><span class="s1">But while it's common to see a high level of investor interest in the inner capital cities where rental demand is high, even far out into the suburbs and the traditional homebuyer heartlands there seems to be an unnaturally high number of investors perusing the market, which is both unhealthy and unsustainable. </span></p>
<p class="p3"><span class="s1">There is presently some talk of the incumbent Coalition making changes to the capital gains tax (CGT) legislation, but overall the government doesn't seem to be planning much in the way of cooling the housing market.</span></p>
<p class="p3"><span class="s1">Meanwhile, the economy generally isn't in sound enough condition for markets to believe that the Reserve Bank will be hiking the cash rate any time soon.</span></p>
<p class="p3"><span class="s1">It seems most likely that further measures will come via the regulator as 2017 rolls on, and will perhaps be manifested in higher mortgage rates for investors, or tougher qualifying criteria for investor loans, or both. </span></p>
<p class="p3"><span class="s1"> </span></p>
<p class="p1"><span class="s1">PETE WARGENT is the co-founder of <a href="https://allenwargent.com/"><span class="s2">AllenWargent</span></a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/"><span class="s2">blogger</span></a>.</span></p>
<p class="p2"><span class="s3"><em>His latest book is </em><a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx"><span class="s2"><em>Four Green Houses and a Red Hotel</em></span></a><em>.</em></span></p>
</body></html>

pwargent-M4siyDbqQY

Investor lending has come storming back: Pete Wargent

<html><body>
<p>GUEST OBSERVER</p>
<p>It seems that lenders were already scaling back their appetite for investment lending as early as January this year, with the value of housing finance commitments for investment purposes falling by almost 6 percent in February; the largest fall in lending for investment purposes since September 2015. </p>
<p>While this is only one month of data, it is likely that investment lending has moved, or is moving through the peak of the cycle.</p>
<p>The February 2017 housing finance data which was released today by the Australian Bureau of Statistics (ABS). </p>
<p>The data showed that in February 2017 there was $32.9 billion worth of housing finance commitments which was -2.7 percent lower over the month but 3.5 percent higher compared to the value in February 2016. </p>
<p>To highlight how much lending is going to housing it is interesting to note that five years earlier, $20.4 billion worth of housing finance commitments was recorded in February 2012.</p>
<p><a href="https://www.propertyobserver.com.au/images/2017/04/12/chart-1-1.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/04/12/chart-1-1.jpg" alt=""></p>
<p>The $32.9 billion of housing finance commitments in February 2017 consisted of $20.0 billion to owner occupiers and $12.9 billion to investors. </p>
<p>The value of lending to owner occupiers has changed very little over the past eight months and was -0.5 percent lower over the month and -2.3 percent lower year-on-year. </p>
<p>The value of lending to investors fell by -5.9 percent in February but is still 14.0 percent higher year-on-year. </p>
<p>The -5.9 percent monthly fall in the value of lending to investors was the largest monthly fall since September 2015 and is a dramatic change in direction for investment lending which has been trending higher since January 2016.</p>
<p><a href="https://www.propertyobserver.com.au/images/2017/04/12/chart-2-1.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/04/12/chart-2-1.jpg" alt=""></p>
<p>Owner occupier housing finance commitments are split into four types: construction of dwellings ($1.8 billion), purchase of new dwellings ($1.0 billion), refinancing of established dwellings ($6.2 billion) and purchase of established dwellings ($11.0 billion).  Construction of dwellings and purchase of new dwellings rose over the month and were also the only commitment types higher year-on-year. </p>
<p>Lending for refinances in particular have been in a steady decline since December 2015, at that time there were $7.3 billion in commitments over the month with the $6.2 billion in February 2017 tracking -15.6 percent lower. </p>
<p>This does seem a little counter-intuitive given that since December 2015 there has been substantial repricing of mortgage rates since that time and investors have returned to the market which could have involved refinancing of their owner-occupied properties to fund the investment.</p>
<p><a href="https://www.propertyobserver.com.au/images/2017/04/12/chart-3-1.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/04/12/chart-3-1.jpg" alt=""></p>
<p>Lending to investors slowed markedly in February 2017 with the two components: new construction ($1.0 billion) and established dwellings ($11.9 billion) each recording a fall over the month. </p>
<p>Lending for construction was -13.6 percent lower in February while lending for established dwellings fell by -5.2 percent. </p>
<p>The decline in housing finance commitments predates the new policy announcement from APRA to lenders a week ago notifying them of changes to lending policies, in particular for interest-only lending which is popular amongst investors. </p>
<p>Although the letter was only recently published, the discussions about the lending policy changes have probably been ongoing with lenders for a number of months and may help to explain the fall in investor lending in February. </p>
<p>Over the next few months it will be interesting to see the direction of lending to investors, if it falls like it did after April 2015, it could lead to a slowdown in the rate of value growth in the housing market although there is little evidence of this occurring as yet.</p>
<p>Click to enlarge</p>
<p><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/04/12/chart-4-1.jpg" alt=""></p>
<p>The above chart shows the value of lending for new housing compared to the value for existing housing, note that refinances are excluded from this data.  New housing is defined as: owner occupier construction of dwellings, owner occupier purchase of new dwellings and investment construction of dwellings which totalled $3.9 billion in February 2017 compared to $22.9 billion for existing housing. </p>
<p>New housing accounted for 14.5 percent of total housing finance commitments over the month. Even though we are in the midst of a housing construction boom there has been no substantial increase in the value of finance commitments for new housing over recent years. Keep in mind though that there are substantially more established properties than new with the 9.8 million dwellings nationally only increasing by 1.8 percent over the past year.</p>
<p>The next few months of housing finance commitments data will be interesting to follow to see if the softness in investor demand continues.  Also with many lenders repricing mortgage rates since February there may be an increase in refinance activity which has been slowing since the end of 2015. </p>
<p>Overall the nature of the mortgage market is changing with higher interest rates and a fresh round of macroprudential controls recently implemented. The next few months should provide insight into whether these tools can ultimately slow some of the current exuberance being shown by investors.</p>
<p class="p1"><span class="s1"><em>Cameron Kusher is research analyst for CoreLogic. You can contact him </em><a href="https://blog.corelogic.com.au/about/"><span class="s2"><em>here</em></span></a><em>.</em></span></p>
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ckusher-ujnxiKuFQs

Investor lending slows in February before the APRA crackdown was announced

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<p>Crowdfunding platform DomaCom have announced HALO Investment, a subsidiary of HALO Technologies, as a new investor.</p>
<p>They've subscribed to a placement for $500,000 and has subscribed to a further $700,000 worth of shares at ¢7.42 to take their investment to $1.2 million.</p>
<p>The placement puts HALO's investment at 16,172,507 shares.</p>
<p><a href="https://domacom.com.au" target="_blank">DomaCom</a> and HALO have also reached an in-principle agreement for a proposed capital raising.</p>
<p>There's a proposed further placement to HALO for further shares to a maximum of $1.8 million which would take them to over 24 million shares.</p>
<p>On the table is a proposed fully-underwritten non-renounceable rights issue to raise a further $3 million in November 2019 at an issue price of seven cents. The rights issue is proposed to be fully underwritten by Ascot Securities Pty Ltd.</p>
<p>The proposed capital-raisings are subject to execution of binding agreements with HALO and Ascot, which is expected to occur on or around Monday 30 September 2019. </p>
<p>The total amount to be raised by DomaCom during this recapitalisation process is expected to be approximately $6 million and will be used to fund DomaCom’s continued growth including investment in its platform, growing sales in the accumulation and retirement markets via its innovative products and general working capital requirements.</p>
<p> Arthur Naoumidis, DomaCom CEO, said that following the completion of the proposed capital raisings, DomaCom will be able to focus on building revenue by growing their funds under management.</p>
<p>"This has occurred at a pivotal time for our business as all our key products are now operational after 7 years of development," Naoumidis said.</p>
<p>“In addition to helping address our balance sheet, DomaCom has also secured a well-known financial services B2C channel for its fractional property product using the DomaCom Platform and this includes appointing HALO Technologies as Prime Broker exclusively for our secondary market.”</p>
<p>On completion of the capital raising transactions, DomaCom proposes to appoint HALO’s CEO Matthew Roberts and George Paxton to the board of DomaCom Limited as non-executive directors.</p>
<p>“We are very excited to be able to partner with this very innovative business and to be able to use our extensive investor distribution and tech capability to accelerate DomaCom’s growth and achieve a mutually beneficial outcome”, Roberts said.</p>
<p>“With over $2bn in Funds Under Advice in client portfolios uploaded on to the HALO platform and ownership of the MacroVue platform, through our many synergies, we believe that we are well positioned to drive the B2C and B2B distribution of both DomaCom’s secondary market and property syndications.”</p>
<p> </p>
<p><strong> </strong></p>
<p><strong> </strong></p>
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wdavis-8cCN98p7xp

DomaCom secures HALO Technologies as cornerstone investor

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<p>The Australian Prudential Regulation Authority (APRA) announced plans today to remove the investor loan growth benchmark which was introduced in late 2014.</p>
<p>It intends to replace it with more permanent measures which it suggests with continue strengthened lending standards.</p>
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<p><span>The benchmark on interest-only lending, established in March 2017, will continue to apply until further notice. </span></p>
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<p>The 10 per cent benchmark on investor loan growth was a temporary measure, introduced in 2014 as part of a range of actions to reduce higher risk lending and improve practices.</p>
<p>Since then APRA said authorised deposit-taking institutions (ADIs) have taken steps to improve the quality of lending, raise standards and increase capital resilience.</p>
<p>APRA has written to ADIs today to advise that it is now prepared to remove the investor growth benchmark, where the board of an ADI is able to provide assurance on the strength of their lending standards.</p>
<p>But any return to more rapid rates of investor loan growth would raise concerns.</p>
<p>"Such an environment could lead APRA to consider the need to apply the counter-cyclical capital buffer or some other industry-wide measure," it warned lenders. </p>
<p>For the 10 per cent benchmark to no longer apply, lenders will be expected to confirm that:</p>
<ul>
<li>lending has been below the investor loan growth benchmark for at least the past 6 months;</li>
<li>lending policies meet APRA’s guidance on serviceability; and</li>
<li>lending practices will be strengthened where necessary.</li>
</ul>
<p>As with previous housing-related measures, this approach has been taken in close consultation with the other members of the Council of Financial Regulators. With risks in the environment remaining heightened, it will be important for ADIs to maintain prudent standards and close any remaining gaps in lending practices.</p>
<p>APRA Chairman Wayne Byres said that while the announcement reflects improvements that ADIs have made to lending standards, there is more to do to strengthen the assessment of borrower expenses and existing debt commitments, and the oversight of lending outside of policy. </p>
<p>"The temporary benchmark on investor loan growth has served its purpose. Lending growth has moderated, standards have been lifted and oversight has improved. However, the environment remains one of heightened risk and there are still some practices that need to be further strengthened. APRA is therefore seeking assurances from ADI Boards that they will maintain a firm grip on the prudence of both policies and practices." </p>
<p>For ADIs that do not provide the required commitments to APRA, the investor loan growth benchmark will continue to apply.</p>
<p>As part of these measures, APRA also expects ADIs to develop internal portfolio limits on the proportion of new lending at very high debt-to-income levels, and policy limits on maximum debt-to-income levels for individual borrowers. This provides a simple backstop to complement the more complex and detailed serviceability calculation for individual borrowers, and takes into account the total borrowings of an applicant, rather than just the specific loan being applied for.</p>
<p>"In the current environment, APRA supervisors will continue to closely monitor any changes in lending standards.</p>
<p>"The benchmark on interest-only lending will also continue to apply. APRA will consider the need for further changes to its approach as conditions evolve, in consultation with the other members of the Council of Financial Regulators," Mr Byres said.</p>
<p> </p>
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j.ballantyne1990-6AQqhLzZaK

APRA moves to ease 10% lender growth restrictions

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<p>Slower investor demand as a result of APRA’s macro-prudential policy measures is having an impact on all major capital city apartment markets, but so too are other state and federal imposts on foreign buyers, according to JLL’s Apartment Market report for 4Q 2017. </p>
<p>But despite the slower demand, markets are still weathering the recent strong new supply additions "relatively well".</p>
<p>According to JLL, tight development finance conditions and slower pre-sale rates are seeing a self-regulation of supply pipelines and far less projects move into construction.</p>
<p>The amount of stock under construction across the five major capital city markets (Sydney, Melbourne, Brisbane, Perth and Adelaide) at the end of 3Q17 fell to 39,760 apartments, which has shrunk by around 10,000 apartments over the last two quarters.</p>
<p>JLL said the peak in supply was in 2017.</p>
<p>They expect around 25 percent less stock to be delivered in 2018 ensuring that the major markets do not move far into over-supply and that it is a relatively soft landing for the apartment market.</p>
<p>JLL’s Head of Residential Research, Leigh Warner said APRA’s intention in clamping down on investor lending was always to slow the housing market down, particularly in Sydney and Melbourne.</p>
<p>"This has been successful, but the risk we are now facing is that the added imposts imposed by state governments and the Federal Government on foreign investors in residential property is slowing this important portion of demand by much more than intended.</p>
<p>“It appears that foreign investors that have already invested are still settling sales at present, albeit often over a longer than normal period. However, it is also clear new offshore demand has fallen sharply and this is particularly impacting some larger CBD projects and projects by foreign developers.”</p>
<p>Warner believes the markets are still showing "remarkable resilience" noting Melbourne continues to operate at low levels of rental vacancy and is seeing rental growth, while apartment prices were still growing in late 2017.</p>
<p>“Sydney too is holding up relatively well in the face of significantly slower Chinese demand than it has enjoyed over recent years.</p>
<p>"Apartment prices have flattened off and are falling in some locations where supply is particularly concentrated, but the rental market is still tight and the market still appears relatively balanced after years of under-supply.”</p>
<p> </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/2018/1/31/NATIONAL.jpg" alt=""></p>
<p><em> </em>Warner noted while the large Sydney and Melbourne markets are slowing and driving overall national trends, other markets remain at very different points in the cycle. </p>
<p>Adelaide and Canberra are less mature apartment markets, but both have seen much stronger apartment development and are slightly less progressed in the cycle than Sydney or Melbourne.</p>
<p>Perth and Brisbane are more advanced in the cycle and, after a very challenging 2017, both markets appear to be edging towards the trough in the cycle.</p>
<p>For Brisbane, JLL said the issue has been very much about supply levels, with a considerable amount built over the past two years.</p>
<p>However, Brisbane’s supply peak was in 2016 and a particularly tough development-financing environment will mean the pipeline will drop sharply from 2018 onwards.</p>
<p>Brisbane’s population growth is also picking up after several weak years following the end of the mining boom, which should also help soak up surplus supply.</p>
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Curtailed supply ensures soft landing for resilient apartment market: JLL

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<p>The latest data on property exposures of Australia’s authorised deposit-taking institutions (ADI) show that the perceived riskier areas of new mortgage lending continue to slow.  This is indicative of the macroprudential measures which have been implemented by APRA taking effect and slowing higher loan to valuation ratio (LVR) lending as well as the more recent crackdown on both investor and interest-only mortgage lending.</p>
<p><img src="https://www.corelogic.com.au/sites/default/files/styles/article_image_570w_/public/2017-12/2017-12-11-blogimg1.png" alt="2017-12-11--annualchangeinthevalueofnewoweneroccuperandivestorlending" width="570" height="198"></p>
<p> <br>The latest quarterly property exposures data released by APRA for the September 2017 quarter shows that ADIs provided mortgages worth $98.211 billion which was 3.3% higher than the value of lending over the same quarter last year.  These new mortgages were split between $67.217 billion for owner occupiers and $30.994 billion for investors.  The value of lending to investors was actually the lowest it has been since the March 2016 quarter.  The value of lending to investors fell by -9.1% over the quarter and is -6.6% lower year-on-year.  After most recently peaking over the December 2016 quarter at $35.572 billion in investor commitments, the value has fallen by -12.9% to September 2017.  While investor demand has fallen, the value of owner occupier mortgage commitments continues to rise to its highest quarterly value since December 2015.</p>
<p><img src="https://www.corelogic.com.au/sites/default/files/styles/article_image_570w_/public/2017-12/2017-12-11-blogimg2.png" alt="2017-12-11--quarterlyproportionofnewmortgagelendingforinterestonlypurposes" width="570" height="198"></p>
<p><br> The total value of interest-only lending over the September 2017 quarter was $16.603 billion which was -44.8% lower than the value over the June 2017 quarter and -52.8% lower than it was a year ago.  We have recently seen the implementation on the cap of new interest-only lending, limiting it to 30% of new mortgages.  Over the September 2017 quarter, interest-only mortgages accounted for 16.9% of new mortgage lending which was the lowest proportion on record and well down on the 30.5% the previous quarter.  It is a little surprising to see the proportion of lending to investors fall so much over the quarter, especially considering that the cap is 30%.  This potentially indicates that the higher mortgage rates being incurred by interest-only borrowers are actually curtailing demand more so than the cap.</p>
<p><img src="https://www.corelogic.com.au/sites/default/files/styles/article_image_570w_/public/2017-12/2017-12-11-blogimg3.png" alt="2017-12-11--proportionofquarterlynewmortagelendingbylvrband" width="570" height="198"></p>
<p>The changes to macroprudential policies has resulted in (not-surprisingly) more prudent borrowing.  As a result there has been an ongoing decline in new mortgages being written on high loan to valuation ratios (LVRs).  Over the quarter, $6.676 billion in mortgages were for LVRs above 90%.  Based on this figure, the value of mortgages on LVRs above 90% was -2.3% lower over the quarter, -13.3% lower over the year and it was the lowest quarterly value of mortgages greater than 90% LVR since March 2011.  Over the quarter, the value of mortgages with an LVR of between 80% and 90% was $13.547 billion which was -4.1% lower over the quarter but 3.6% higher year-on-year.  Over the September 2017 quarter, an historic low 20.6% of new mortgages had an LVR greater than 80%.</p>
<p>This latest data highlights that there appears to be a much more prudent approach being taken towards investment and interest-only mortgage lending.  Of course, the macroprudential policies implemented by APRA were specifically targeting these segments of lending which suggests that they are being successful.  Over the coming quarters the most interesting developments to watch will be whether investor lending continues to decline, which we suspect it will.  It will also be interesting to see whether interest-only lending rebounds back to levels closer to the 30% limit or if they continue to languish at much lower levels. If it is the former it indicates that potentially lenders tightened too hard and that there remains demand for this product.  Meanwhile, if it is the latter it suggests that demand for interest-only lending has reduced.</p>
<p><em>Cameron Kusher is head of research for CoreLogic. You can contact him <a href="https://blog.corelogic.com.au/about/"><span class="s2">here</span></a>.</em></p>
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IO loans hit record low: Cameron Kusher

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<div>If anyone doubted APRA's commitment or ability to quell interest-only lending, then they definitely shouldn't any more.</div>
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<div>New interest-only loans have been smashed to smithereens, down from 45.6 per cent of the market at the 2015 peak to just 16.9 per cent.</div>
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<div>Banks continue to wind back high loan-to-value ratio (LVR) lending, continuing a trend that has been underway for 4 years now. </div>
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<div>Property buyers will not only need to pay back principal, they'll need to have a decent deposit too.</div>
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<div>Despite this, the total value of residential mortgages on ADI books rose by +6.9 per cent over the year to September, as the pendulum swings from investors to homebuyers.</div>
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<div>A seismic shift in the market then, as more borrowers will now be compelled to pay back some debt.</div>
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<div>With interest-only lending peaking in 2015, the greatest volume of rollovers will occur in 2020 - <a href="http://petewargent.blogspot.co.uk/2017/10/p-cliff" target="_blank">see here</a> for my thoughts on what might happen then. </div>
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<a href="https://1.bp.blogspot.com/-Uid2rCJIsEs/WigSMe3FNOI/AAAAAAAAnVo/gXeo4S5y4DUBHMnxjtL28IR_T3Sf-dbAwCLcBGAs/s1600/lightning-1082080_1920.jpg"><img src="https://1.bp.blogspot.com/-Uid2rCJIsEs/WigSMe3FNOI/AAAAAAAAnVo/gXeo4S5y4DUBHMnxjtL28IR_T3Sf-dbAwCLcBGAs/s640/lightning-1082080_1920.jpg" width="640" height="422" data-original-height="1060" data-original-width="1600"></a>
<p class="p1"><span class="s1">PETE WARGENT is the co-founder of <a href="https://allenwargent.com/" target="_blank"><span class="s2">AllenWargent</span></a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank"><span class="s2">blogger</span></a>.</span></p>
<p><span class="s1"> </span></p>
</div>
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APRA strikes back to quell IO lending

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<p>The trend in housing finance eased a bit, to a total of around $33 billion in September.</p>
<div>The value of investor loans was possibly pumped up a little in the preceding month by refinancing activity, but the monthly trend remains steadily down to about $12 billion, as tweaks to lending standards continue to lean against activity. </div>
<div> </div>
<div>The $33 billion result and the related easing in investor loans were variously described as a "walloping fall", "down the gurgler", a "staggering drop", and even plain old "grim".<br><br>A grim $33 billion it is!</div>
<div> </div>
<div>Recall that this result comes precisely one month after investor loans had "bounced back", "spiked", "staged a comeback", and all the rest of it. </div>
<div> </div>
<div>I guess that goes with the territory when you have to find something new and exciting to say every month. Anyhoo, here's the chart, in all of its walloping grimness!</div>
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<div><a href="https://2.bp.blogspot.com/-RXhTal2egbw/WgQcDjdlLJI/AAAAAAAAm8A/EM7c07RsGmoFcpckUpApGUc1EcdbgYz4QCEwYBhgL/s1600/FHB4.jpg" target="_blank">Click to enlarge</a></div>
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<div>Owner-occupiers continue to settle on the near-record levels of new stock, with commitments for new dwellings continuing to surge to the highest level since 1978. </div>
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<div><a href="https://2.bp.blogspot.com/-p0iwcb5foU8/WgQcFwi3dZI/AAAAAAAAm8M/HVd6wMYM5dMTHv3NJwZH0HUNR1ci7Q_WgCEwYBhgL/s1600/FHB5.jpg" target="_blank">Click to enlarge</a></div>
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<p><br><span>Homebuyer demand still looks to be strongest in Victoria, mirroring demographic trends.</span></p>
<p><a href="https://2.bp.blogspot.com/-WFHGj0lnfLk/WgQuyfhqm-I/AAAAAAAAm8s/eUVWSyM-6qoVp5cURmis0RSPxhfrt3uKQCLcBGAs/s1600/A1.jpg" target="_blank"><span>Click to enlarge</span></a></p>
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<p> </p>
<div>The trend number of owner-occupier commitments in Western Australia has been edging slightly higher for the past 5 months, suggesting moderately improving conditions. </div>
<p> </p>
<div><strong><span style="text-decoration: underline;">First homebuyers return</span></strong></div>
<div> </div>
<div>September is a shorter month than August, as well as playing host to a public holiday and a Grand Final.  </div>
<div> </div>
<div>Not surprisingly, then, i<span>n original terms the number of first homebuyer loans pulled back slightly from a 93-month high.</span>
</div>
<div><span> </span></div>
<div><a href="https://2.bp.blogspot.com/-iGuLSAW2avw/WgQcEy-2ExI/AAAAAAAAm8E/7Vs7i_LKCcIiZoLwxGBNm3vONtHvif2OgCLcBGAs/s1600/FHB2.jpg" target="_blank"><span>Click to enlarge</span></a></div>
<div><span> </span></div>
<div class="separator"><a href="https://2.bp.blogspot.com/-iGuLSAW2avw/WgQcEy-2ExI/AAAAAAAAm8E/7Vs7i_LKCcIiZoLwxGBNm3vONtHvif2OgCLcBGAs/s1600/FHB2.jpg"><img src="https://2.bp.blogspot.com/-iGuLSAW2avw/WgQcEy-2ExI/AAAAAAAAm8E/7Vs7i_LKCcIiZoLwxGBNm3vONtHvif2OgCLcBGAs/s640/FHB2.jpg" width="640" height="390" data-original-height="827" data-original-width="1356"></a></div>
<div class="separator"> </div>
<div class="separator">As a share of housing finance commitments, however, first homebuyer loans rose again, now levitating from 17.2 per cent to 17.4 per cent, to notch a 4½-year high. </div>
<div class="separator"> </div>
<div class="separator">The return of the first homebuyer has largely been driven by incentives in New South Wales and Victoria.  </div>
<div class="separator"> </div>
<div class="separator">Despite the reported monthly decline, in truth first homebuyer numbers were markedly higher over the third quarter in both NSW (58 per cent) and VIC (32 per cent) - it all depends on the preferred narrative, though the figures should be watched closely for revisions.</div>
<div class="separator"> </div>
<div class="separator"><a href="https://3.bp.blogspot.com/-itQLd4N_Xj0/WgQcGz760NI/AAAAAAAAm8Q/ghbWaaCBstMlaljGfM-IToewHC9EHG6PACEwYBhgL/s1600/FHBs.jpg" target="_blank">Click to enlarge</a></div>
<div class="separator"> </div>
<div class="separator"><a href="https://3.bp.blogspot.com/-itQLd4N_Xj0/WgQcGz760NI/AAAAAAAAm8Q/ghbWaaCBstMlaljGfM-IToewHC9EHG6PACEwYBhgL/s1600/FHBs.jpg"><img src="https://3.bp.blogspot.com/-itQLd4N_Xj0/WgQcGz760NI/AAAAAAAAm8Q/ghbWaaCBstMlaljGfM-IToewHC9EHG6PACEwYBhgL/s640/FHBs.jpg" width="640" height="388" data-original-height="829" data-original-width="1364"></a></div>
<div class="separator"> </div>
<div class="separator">On average, first homebuyers are borrowing a little less than a year earlier, perhaps implying that, at the margin, the incentives have encouraged more wavering buyers onto the ladder.</div>
<div class="separator"> </div>
<div class="separator">For non-first homebuyers loan sizes are now rising again, however, as they are wont to do once markets get to grips with new lending rules. </div>
<div class="separator"> </div>
<div class="separator"><a href="https://1.bp.blogspot.com/-FYkwrY3i2kM/WgQcE1I8AiI/AAAAAAAAm8I/RM2-YbC_sjgmYzbdhgYw6TAMSXC20Hk0gCLcBGAs/s1600/FHB3.jpg" target="_blank">Click to enlarge</a></div>
<div class="separator"> </div>
<div class="separator"><a href="https://1.bp.blogspot.com/-FYkwrY3i2kM/WgQcE1I8AiI/AAAAAAAAm8I/RM2-YbC_sjgmYzbdhgYw6TAMSXC20Hk0gCLcBGAs/s1600/FHB3.jpg"><img src="https://1.bp.blogspot.com/-FYkwrY3i2kM/WgQcE1I8AiI/AAAAAAAAm8I/RM2-YbC_sjgmYzbdhgYw6TAMSXC20Hk0gCLcBGAs/s640/FHB3.jpg" width="640" height="382" data-original-height="828" data-original-width="1387"></a></div>
<p> </p>
<div><strong><span style="text-decoration: underline;">Centralising demand</span></strong></div>
<div> </div>
<div>Nothing particularly unexpected to see here, with investor loans declining in response to tighter lending criteria, trending down to sit about 8 per cent lower than at the end of last year, in turn leading to a fairly steady result overall. </div>
<div> </div>
<div>The headline numbers suggest housing finance is flattening, as demanded by market commentators and regulators alike. </div>
<div> </div>
<div>This suggests it will become more challenging over the next few years for investors to find outperforming markets, following a very easy ride over the past decade, when simply buying properties in Sydney resulted in jackpot returns. </div>
<div> </div>
<div>Where to look?</div>
<div> </div>
<div>Outstanding 2016 Census research from Terry Rawnsley at SGE Economics &amp; Planning showed that the capital cities created 900,000 new jobs over the five years to 2016, while the whole of regional Australia combined created close to zero. Zip.</div>
<div> </div>
<div>Sydney alone created nearly 500,000 jobs jet over the past decade, with the inner suburbs accounting for a disproportionately high share of the employment growth.</div>
<div> </div>
<div>Between 2011 and 2016, total Sydney employment boomed by 342,000, while employment in regional New South Wales went backwards, falling by 17,000. </div>
<div> </div>
<div>Drilling down a level, Rawnsley found that employment growth has become more heavily focused on the inner cities of the largest metropolises, especially Sydney and Melbourne. </div>
<div> </div>
<div>It's worth remembering that these figures comprise a period where resources construction declined, so the contrast over the next five years may not be quite so stark. </div>
<div> </div>
<div>Still, with employment growth exploding in the inner cities and investor loans being tightened, upwards pressure returning on rents seems likely in 2018. </div>
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Finding something exciting to say every month on home loan financing: Pete Wargent

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<p>The Reserve Bank of Australia (RBA) released its Financial Aggregates figures for the month of September 2017, which revealed a softer month for credit growth ex-housing, with total credit growth still tracking at +5.4% over the year. </p>
<p>Annual business credit growth is no more than ticking along (+4.3%), while personal credit remains in negative territory. </p>
<p>Housing credit expanded by +6.6% over the year to September, actually a little faster than the +6.4% pace seen a year earlier, contrary to what you might think.</p>
<p>However, a closer inspection shows that the monthly rate of growth was +0.48% in seasonally adjusted terms, the slowest increase since March 2016, so lending constraints are gradually taking effect.</p>
<p>Total housing credit is now sitting at a tick under $1.7 trillion.</p>
<p>Still powering along for now then, although there has been a concerted push to get borrowers off interest-only products lately. </p>
<p><a href="https://4.bp.blogspot.com/-VyrolIM2qwM/WfiUErmafEI/AAAAAAAAmzQ/qJxnfgl2pGsGhtlVvAkW5Mc1SrihyYiVwCEwYBhgL/s1600/RBA.jpg"><img src="https://4.bp.blogspot.com/-VyrolIM2qwM/WfiUErmafEI/AAAAAAAAmzQ/qJxnfgl2pGsGhtlVvAkW5Mc1SrihyYiVwCEwYBhgL/s640/RBA.jpg" width="640" height="380" data-original-height="833" data-original-width="1400"></a></p>
<p>The purpose of some $59 billion of loans has now been switched from investor to owner-occupier since July 2015.</p>
<p>The RBA data showed that after accounting for loan switching, the growth in investor credit slowed to +7.2%, with further declines almost certain to follow. </p>
<p><strong>Watch your speed</strong></p>
<p>APRA also released its monthly ADI figures, which showed investor credit growth slowing to a crawl - implying that the non-banks have picked up some market share in this sector - with the total value of owner-occupier loans up by +0.48% in the month. </p>
<p>None of the major banks is now even remotely close the 10% 'speed limit' or regulatory threshold for investment lending, with only Westpac of the main players still pushing this sector along. </p>
<p><a href="https://2.bp.blogspot.com/-Q1KGns0a0u4/Wfjbk122nmI/AAAAAAAAmzw/wMne730nv6QKoU4k3kOGWmAuv6DoPzvZQCLcBGAs/s1600/APRA.jpg"><img src="https://2.bp.blogspot.com/-Q1KGns0a0u4/Wfjbk122nmI/AAAAAAAAmzw/wMne730nv6QKoU4k3kOGWmAuv6DoPzvZQCLcBGAs/s640/APRA.jpg" width="640" height="386" data-original-height="827" data-original-width="1368"></a></p>
<p>A number of the second-tier lenders, including Suncorp, Macquarie, and others, have significantly cut back their investment mortgage exposure, perhaps suggesting some regulatory pressure. </p>
<p><strong>The wrap</strong></p>
<p>While total housing credit is still rising at a solid pace, investor lending is clearly being snipped back sharply.</p>
<p>With population growth now tracking at historically high levels <a href="https://petewargent.blogspot.co.uk/2017/09/population-growth" target="_blank">as I looked at here</a>, it remains to be seen whether rents begin to rise sharply in the two largest cities in 2018 (personally, I believe that this is likely, especially in Melbourne, though few appear to agree with me at this juncture). </p>
<p>The major banks are now growing their investment loan books at way below the arbitrary 10% cap, so theoretically at least investor loans could begin to feature more prominently again next year, but this may need the regulator to remove its foot from lenders' throats.</p>
<p><strong>New home sales plunge </strong></p>
<p>In other news, new home sales continued the decline begun in 2015 with another -6.1% drop in September 2017, according to Housing Industry Association (HIA) figures.</p>
<p><a href="https://3.bp.blogspot.com/-sgUUszsRNUI/Wfjb5Uoa7AI/AAAAAAAAmz0/hivavx8-7-k1Cv8pYtl358qVwZSnONLdQCLcBGAs/s1600/HIA.jpg"><img src="https://3.bp.blogspot.com/-sgUUszsRNUI/Wfjb5Uoa7AI/AAAAAAAAmz0/hivavx8-7-k1Cv8pYtl358qVwZSnONLdQCLcBGAs/s640/HIA.jpg" width="640" height="404" data-original-height="461" data-original-width="727"></a></p>
<p>The drop was driven by a significant -16.7% drop in multi-unit sales.</p>
<p>New home sales are a leading indicator for building approvals, and following the longest ever upturn in building there now comes the dwelling construction downturn. </p>
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RBA data shows the brakes on lending: Pete Wargent

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<p>AFG's latest Mortgage Index results released today shows that major structural change in the Australian lending landscape is continuing. </p>
<p>“Today’s results paint a very different picture from this time last year,” said AFG CEO <a href="https://www.afgonline.com.au/corporate/board-of-directors/david-bailey-ceo/">David Bailey</a>.</p>
<p>“Regulator-led tightening of investor lending has led to a further drop in investor volume and they are now sitting at an all time low of 29% of the market.</p>
<p>The shift in lender appetite from investors to upgraders is also evident in average loan size. “The national average home loan is now sitting at an all time high of $491,000,” said Mr Bailey. “This increase can be explained by the fact that people generally spend more for their primary place of residence than they do for an investment property.</p>
<p>The number of people looking to refinance has dropped to 25%, whilst those keen to upgrade their living situation is increasing with upgraders now representing 41% of the market. “This is also likely to be a reflection of the lack of lending options on the table for investors wanting to refinance, as lenders pull back from the investor market to meet regulator demands,” said Mr Bailey.</p>
<p>The major lenders’ share of the market is also down to a post-GFC low of 64.4% as borrowers continue to explore alternatives outside of the major bank owned brands.</p>
<p>Looking at loan type, fixed rates are now at 26.3% of all loans which confirms many Australians are anticipating that the next interest rate move will be up,” said Mr Bailey.</p>
<p>First home buyers are enjoying their third consecutive quarter in double digits since the beginning of 2014. “National market share for first home buyers has lifted to 13% across the last quarter, helped in part by new stamp duty concessions kicking in on July 1 for this segment of the market in Victoria and New South Wales.”</p>
<p>Victoria continues to set the pace with lodgement volumes in that state up 27% on the first quarter of last year whilst every other state has lost momentum to varying degrees. The strength of the Victorian home market is also evidenced in the average loan size for that state, which is 5% higher than it was at the same time last year.</p>
<p><a class="image_link fancybox image" href="https://www.afgonline.com.au/wp-content/uploads/2017/10/mortgage-index-financial-year-2018-quarter-1.png"><img class="alignnone size-large wp-image-19646" src="https://www.afgonline.com.au/wp-content/uploads/2017/10/mortgage-index-financial-year-2018-quarter-1-1024x438.png" alt="" width="1024" height="438"></a></p>
<p class="p3">“Overall, volumes are up on the previous two quarters, however, compared to the same time last year they are flat. This translates into the view that regulator-led changes are being felt everywhere except Victoria,” concluded Mr Bailey.</p>
<p class="p3">To download the full report <a href="https://www.afgonline.com.au/wp-content/uploads/2017/10/afg-mortgage-index-october-quarter-2017.pdf" target="_blank">click here.</a></p>
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