Longstanding Gold Coast and Canberra developer <a href="https://www.apartments.com.au/developers/morris-property-group">Morris Property Group</a> is continuing to roll on with its Glitter Strip apartment pipeline, seeking to return to Mermaid Beach with a new 68-apartment development.

Morris, founded by Barry Morris in 1978 and one of the Gold Coast’s most prolific apartment developers over the past two decades, has filed plans for a 12-storey mixed-use building at <a href="https://www.apartments.com.au/new-apartments/36-seabeach-avenue-mermaid-beach-qld-4218">34-36 Seabeach Avenue</a>, on the prized eastern side of the Gold Coast Highway.

The 1,227 sqm site occupies a prominent corner position at Seabeach Avenue and the Gold Coast Highway, opposite the Mermaid Plaza retail and office precinct and around 140 metres walking distance from the future Mermaid Beach South light rail station.

<a href="https://www.apartments.com.au/architects/fraser-partners-0">Fraser &amp; Partners</a> has designed the project, which will comprise 68 apartments across a mix of 48 two-bedroom and 20 three-bedroom residences.

The building will rise 12 storeys, reaching a maximum height of 36 metres, with the apartments accounting for a total of 156 bedrooms. The development application also seeks approval for short-term accommodation across the 68 apartments, while two office tenancies are proposed at ground level.

The plans show 108 car spaces across the development, with parking accommodated at ground level and within a three-level basement accessed from Seabeach Avenue.

<img alt="Seabeach Avenue and the Gold Coast Highway" data-entity-type="file" data-entity-uuid="c2175c99-12fd-4a3c-9be1-89bbf258a90d" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-20%20at%202.59.41%E2%80%AFPM_0.png?VersionId=iNLzWcE6gaAE76rafhEXfHve.4g4Se0p" />

Resident amenity will be concentrated on level two, where Fraser &amp; Partners has designed a recreation deck with a swimming pool, 90 sqm pool terrace, outdoor barbecue area and gym.

The broader communal offering will also incorporate landscaped spaces, with the planning documents noting the amenity has been designed to provide areas for recreation, social interaction and outdoor living.

The proposal would continue the transformation of the Gold Coast Highway corridor through Mermaid Beach ahead of the arrival of the light rail.

The site is zoned Neighbourhood Centre and sits within the Mermaid Beach/Broadbeach Light Rail Corridor neighbourhood plan. While the prescribed building height is 24 metres, the site is identified within an Urban Neighbourhood context providing for a 50 per cent height uplift to 36 metres.

Planning documents describe the stretch of the Gold Coast Highway between Broadbeach and Nobby Beach as increasingly characterised by medium and high-rise development, with the proposed Morris tower joining projects including Ventura, The Alfred, Oceans and Otto.

<img alt="Seabeach Avenue and the Gold Coast Highway" data-entity-type="file" data-entity-uuid="911f193f-e381-4a55-be08-58be87fcf978" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-20%20at%202.59.48%E2%80%AFPM.png?VersionId=oxVvLJaY.SOXEdXrIcogfyEXDfvCmmpM" />

The development would mark Morris Property Group's latest investment in Mermaid Beach, where it has already delivered two apartment projects.

Otto, at 1 Bondi Avenue on the western side of the Gold Coast Highway, comprises 70 apartments across nine storeys. The project was completed in 2019 and includes a residents' gym, recreation deck and swimming pool.

Morris also developed Oceans at 46 Ocean Street, a nine-storey, 70-apartment build-to-rent development completed in 2019. Oceans was the group's first build-to-rent project and incorporates commercial space at ground level.

The two existing Morris projects sit further north along the same Gold Coast Highway corridor as the proposed Seabeach Avenue development. Fraser &amp; Partners' planning analysis specifically identifies both Otto and Oceans among the established built-form precedents surrounding the site.

<img alt="Seabeach Avenue and the Gold Coast Highway" data-entity-type="file" data-entity-uuid="14925119-7b71-4812-8149-340317512c7c" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-20%20at%203.00.15%E2%80%AFPM.png?VersionId=aEJqYuw_nTCjcin17BSD0piB1EFotTlj" />

Mermaid Beach represents only part of Morris' considerable Gold Coast footprint.

The family-owned developer has been particularly active in neighbouring Broadbeach, delivering projects including Sierra Grand, Eclipse, Synergy, Qube, Koko, Opus and Malo, while its current pipeline includes Maison and the two-tower Crest development.

Further south, Morris has also developed a string of projects in Burleigh Heads, including Element, Boardwalk and Sandbar, while Essentia expanded its footprint north into Surfers Paradise.

The Seabeach Avenue application has been lodged by PMM Broadbeach Pty Ltd and seeks a development permit for a Material Change of Use for multiple dwellings, short-term accommodation and office uses. Zone Planning Group prepared the planning application, with Fraser &amp; Partners commissioned as architect.

The project comes as the developer continues to expand its Gold Coast pipeline while retaining a significant presence in Canberra. Morris now has more than $2.5 billion of development in its national pipeline and has delivered more than 7,000 homes during its near five-decade history

Joel Robinson

First look: Morris Property Group returns to Mermaid Beach with new Seabeach Avenue apartment development

<a data-saferedirecturl="https://www.google.com/url?q=https://www.apartments.com.au/developers/fortis&amp;source=gmail&amp;ust=1787272340808000&amp;usg=AOvVaw3hvFB2uWTRfEyEcpTSnnK9" href="https://www.apartments.com.au/developers/fortis" target="_blank">Fortis</a>&nbsp;is continuing its stronghold on Sydn​ey’s eastern suburbs apartment market, launching&nbsp;in September&nbsp;its latest boutique&nbsp;<a data-saferedirecturl="https://www.google.com/url?q=https://www.apartments.com.au/developments/double-bay-nsw-2028&amp;source=gmail&amp;ust=1787272340808000&amp;usg=AOvVaw0GI5S9-wNeiLUnM-d1uYkw" href="https://www.apartments.com.au/developments/double-bay-nsw-2028" target="_blank">Double Bay</a>&nbsp;development,&nbsp;<a data-saferedirecturl="https://www.google.com/url?q=https://www.apartments.com.au/new-apartments/55-william-double-bay-55-william-street-double-bay-nsw-2028&amp;source=gmail&amp;ust=1787272340808000&amp;usg=AOvVaw2YNouJQcFjiTTgVHbgDLA-" href="https://www.apartments.com.au/new-apartments/55-william-double-bay-55-william-street-double-bay-nsw-2028" target="_blank">55 William</a>.

55 William presents&nbsp;just eight north-facing&nbsp;two-bedroom, three-bedroom and full-floor&nbsp;residences to the market, priced from $4.5 million.

The upcoming launch comes just weeks after Fortis secured approval for the $80 million development, its third eastern suburbs approval in two months. Construction is already underway, with completion targeted for 2028.

[smartcode_project:default project_id=152579 project_image_fid=376250]

55 William adds to a growing concentration of Fortis projects in and around Double Bay, a market the developer has become increasingly active in over recent years.

Fortis previously completed the nine-residence Marmont on New South Head Road, while it is currently developing a mixed-use residential and retail project at 12 Cross Street. Its wider Double Bay footprint also extends into commercial and retail development.

The developer's broader Sydney residential pipeline is particularly concentrated across the eastern suburbs, with projects spanning Doub​le Bay, Ro​se Bay, Wo​ollahra, Dar​ling Point, Poi​nt Piper and Eli​zabeth Bay.

[smartcode_project:default project_id=152579 project_image_fid=376253]

At 55 William, Fortis has again turned to MHN Design Union, the architecture practice behind several of its eastern suburbs projects, while London-based 1508 London has been appointed to handle the interiors and Wyer &amp; Co the landscaping.

The six-level building will comprise a combination of two and three-bedroom apartments, including a garden residence, full-floor apartments, a sub-penthouse and penthouse. Each residence will have secure basement parking and private outdoor space.

A rooftop terrace for all residents, along with select apartments, enjoys views across Double Bay Harbour and toward the Sydney skyline.

Ceiling heights will reach up to three metres&nbsp;in select residences, while the kitchens will feature natural stone and integrated Gaggenau appliances.

&nbsp;

&nbsp;

The boutique nature of the project reflects the type of stock Fortis has increasingly targeted across Sydney's eastern suburbs, where larger apartments and smaller buildings are being pitched primarily toward local owner-occupiers and downsizers.

Fortis Group General Manager Ed Eve said the developer continues to see demand from buyers wanting to remain in the eastern suburbs but move into newer, lower-maintenance housing.

“We're seeing continued demand from local owner-occupiers and downsizers looking for high-quality homes that allow them to remain in the eastern suburbs, close to the lifestyle and community they know,” Eve said.

55 William is also one of the early projects to respond directly to the NSW Government's Low and Mid-Rise Housing reforms. Fortis had previously secured approval for just two townhouses on the 599 sqm site before revising the scheme to eight apartments following the planning changes.

Situated one street back from Double Bay's water's edge, the project enjoys an enviable harbourside setting within walking distance of Double Bay Village and the ferry wharf.

[smartcode_project:default project_id=152579 project_image_fid=376252]

Fortis has increasingly made the eastern suburbs a major focus of its Sydney pipeline. Beyond Double Bay, it recently completed the 14-residence Piper in Point Piper and has projects underway or planned across Rose Bay, Woollahra and Darling Point.

The developer recently secured approval for Verano in Rose Bay, a six-level development comprising 21 two, three and four-bedroom apartments, also designed by MHNDU.

55 William&nbsp;is soon to be release to the market with VIP appointments commencing early September,&nbsp;with residences priced from $4.5 million.

[smartcode_project_cta:default project_id=152579]

Fortis continues eastern suburbs push with 55 William launch

UAE-based developer Arada has unveiled plans for a $2 billion twin-tower apartment development in Broadbeach, marking its first move into Queensland as it continues its rapid expansion across Australia.

Arada will develop 952 apartments across two towers on a prominent site opposite the Gold Coast Convention and Exhibition Centre, with the project targeted for completion ahead of the Brisbane 2032 Olympic and Paralympic Games.

The project represents Arada's largest commitment to the Australian market since arriving in the country in 2024 and significantly expands a local pipeline that has now grown to eight projects and more than 5,000 homes.

It will also be the first major Queensland project delivered by Roberts Co since the tier-one contractor was acquired by Arada Group in 2025.

Plus Studio has designed the Broadbeach development, which will comprise one, two and three-bedroom apartments across two towers connected by a landscaped podium.

A significant resident amenity offering will include lagoon and lap pools, a gym, sauna and steam room, alongside a mist room, infrared room and salt scrub facilities. Communal terraces, private dining areas, a library, residents' lounge and work-from-home spaces are also planned. Around 1,200 sqm of retail and hospitality space will occupy the ground floor.

The site puts Arada in one of the Gold Coast's most active apartment markets, directly opposite the convention centre and within walking distance of Pacific Fair, The Star Gold Coast and Broadbeach's dining and retail precinct.

It also has immediate access to the Gold Coast light rail network and sits just a few blocks from the beach.

Arada Group Chief Executive Ahmed Alkhoshaibi said Broadbeach represented an opportunity for the developer to expand beyond its initial NSW pipeline.

“Broadbeach is a world-class address that gives us the canvas to create a community of exceptional design and lifestyle quality that genuinely enriches the daily lives of the people who call it home,” Alkhoshaibi said.

“This is our first development outside New South Wales, and it reflects our growing ambition to grow in key urban markets around the country.”

Alkhoshaibi said bringing Roberts Co into the project would give Arada greater control over the development and construction process.

“Delivering this project through Roberts Co, our own tier-one construction business, means we can bring the quality, pace and accountability that our buyers expect.”

The move into Broadbeach comes as Arada accelerates its Australian expansion following its entry into the market two years ago. The developer has assembled a pipeline of eight projects comprising more than 5,000 homes, while the acquisition of Roberts Co last year gave the group its own Australian construction capability.

Globally, Arada has a development portfolio valued at $50 billion comprising more than 55,000 homes across the UAE, United Kingdom and Australia.

The Gold Coast is emerging as the next major market for the developer, with strong population growth and infrastructure spending ahead of the 2032 Games continuing to underpin significant apartment development across the coastal strip.

Arada plots $2 billion Broadbeach towers in major Queensland move

Sydney’s downsizer market is changing, with a growing cohort of buyers prioritising the right home over simply finding a smaller one.

Coronation Property Head of Sales Cam Porter says the traditional idea of downsizing does not necessarily reflect what many buyers are now looking for, particularly those moving from established family homes across Sydney.

Instead, he says they are increasingly becoming “right-sizers”, seeking lower-maintenance homes without sacrificing the space, amenity or quality they have become accustomed to.

“We are increasingly seeing buyers who are not motivated by the idea of simply moving into a smaller property,” Porter says.

“They are right-sizers. They want a home that is easier to manage and better connected, but they still expect generosity, quality and a floorplan that supports the way they live.”

It is a subtle but important distinction in a market where apartment developers are increasingly targeting established owner-occupiers.

[smartcode_project:default project_id=135149 project_image_fid=377495]

For many of these buyers, moving from a house to an apartment is not driven by a desire to dramatically reduce their living space. Instead, the appeal is in removing some of the maintenance associated with a larger home while retaining generous living areas, storage and enough flexibility to accommodate family and friends.

Coronation’s sales team is seeing buyers place particular importance on natural light, practical storage and additional rooms that can be used as guest bedrooms, home offices or secondary living spaces.

Kitchens and dining areas are also playing an increasingly important role, particularly for buyers who regularly entertain or have children and grandchildren visit.

[smartcode_project:default project_id=135149 project_image_fid=377494]

“These buyers still want their home to feel generous,” Porter says.

“They may want less maintenance, but they are not looking for less life.”

The challenge for the broader housing market is providing enough of the right stock to encourage that move.

While much of the discussion around Sydney’s housing shortage has centred on the number of homes being delivered, Porter says the diversity of those homes is equally important.

Older homeowners can remain in large family houses for longer when they cannot find an appropriate alternative in the neighbourhoods where they have built their lives.

“The decision is rarely as simple as wanting fewer bedrooms,” Porter says.

“People are weighing up their connection to a neighbourhood, the space they need for family, the quality of the home and whether it will continue to work for them over the long term.”

It also has implications beyond the downsizer market. Providing suitable apartments for smaller households can free up established houses for families who need the additional bedrooms and land, creating greater movement through the housing market.

<h2>Lillian targets the next stage of apartment buyer</h2>

It is a buyer Coronation is targeting at <a href="https://www.apartments.com.au/new-apartments/lillian-erskineville-9-metters-street-erskineville-nsw-2043">Lillian</a>, its new collection of apartments, terraces and penthouses at Erskineville Village.

Designed by Silvester Fuller, Lillian has been shaped around larger living spaces, natural light and flexible floorplans, alongside landscaped areas, wellness amenity and communal spaces for residents.

The development will form part of Coronation’s broader Erskineville Village precinct, which will combine new homes with green space, retail, hospitality and new pedestrian connections.

[smartcode_project:default project_id=135149 project_image_fid=377688]

McPherson Park will sit at the centre of the precinct, creating a significant new green space alongside the project’s retail and hospitality offering.

For Porter, the opportunity is to give buyers another housing option without forcing them to leave the part of Sydney they already know.

“People should be able to change the type of home they live in without having to change their entire life,” he says.

“For many buyers, Lillian offers the opportunity to remain connected to the Inner West and the city, while gaining access to a more convenient, walkable and considered way of living.”

[smartcode_project:default project_id=135149 project_image_fid=377687]

Coronation will explore the changing <a href="https://lillianresidences.com.au/news/lillian-x-space-x-downsizers-event-27-august/">right-sizer market at an event on August 27</a>, bringing together experts across property, design and lifestyle.

Held in partnership with SPACE, Poliform and Downsizer.com.au, the event will include a property market outlook from economist Michael Blythe alongside discussion around the considerations facing buyers planning their next move.

Attendees will also be able to learn more about the residences and amenity planned at Lillian Erskineville.

[smartcode_project_cta:default project_id=135149]

From downsizing to right-sizing: What Sydney buyers want from their next home

Family-owned builder and developer <a href="https://www.apartments.com.au/developers/omaya">Omaya</a> is bringing its 27-storey The Maybelle development to market, with the 229-apartment tower rising alongside Ismay Reserve near North Strathfield.

<a href="https://www.apartments.com.au/new-apartments/the-maybelle-21-parramatta-road-homebush-nsw-2140">The Maybelle</a> will comprise one, two and three-bedroom apartments, with its height providing elevated outlooks towards the Sydney skyline and Harbour Bridge, while other residences will look across neighbouring Ismay Reserve.

Designed by <a href="https://www.apartments.com.au/architects/squillace-architects">Squillace Architects</a>, the tower combines its parkside setting with proximity to the established retail, dining and transport amenity around North Strathfield.

[smartcode_project:default project_id=134873 project_image_fid=376196]

Residences will feature open-plan living spaces and a choice of two interior schemes, while communal amenity is spread across two elevated levels of the building.

Level 8 will be home to the Garden Pavilion, a full-floor resident space incorporating communal entertaining and breakout areas, seating and recreation spaces. Further up the tower, a landscaped Sky Terrace on Level 14 will provide another communal area with panoramic views towards the Harbour Bridge and Sydney skyline.

At ground level, the development sits directly alongside Ismay Reserve, where lawns, walking paths, children's play areas, picnic spaces and recreational facilities extend the green space available immediately around the project.

[smartcode_project:default project_id=134873 project_image_fid=376194]

The Maybelle is also within walking distance of North Strathfield and the Bakehouse Quarter, which provides a mix of cafés, restaurants, shops and everyday services.

Existing rail and bus services provide connections across Sydney, while the future North Strathfield Metro and access to the M4 will add to the transport options available around the precinct. Walking and cycling routes also extend via Powells Creek towards Sydney Olympic Park and its sporting, entertainment and parkland precincts.

Families are also well positioned for access to a broad selection of established schools and education options across Strathfield and the surrounding Inner West.

[smartcode_project:default project_id=134873 project_image_fid=376181]

Omaya has operated in Sydney for more than 35 years, managing projects from acquisition and design through to construction and delivery. The family-owned company is both developer and builder of The Maybelle.

Apartments start from $560,000, with the development protected by 10-year Latent Defects Insurance.

Construction is well underway, with completion expected by the end of 2026 and move-in anticipated from Q1 2027.

[smartcode_project_cta:default project_id=134873]

The Maybelle brings 27-storey parkside tower to market near North Strathfield

Investor Lending

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Investor lending at Australian banks has dipped, according to the latest figures from the Australian Prudential Regulation Authority(APRA). APRA’s statistics show a $1.57trn total loan books of banks during August, a slight decrease of 0.1% from $1.58trn in July.
The drop was due to a decrease in investment lending with total investment loan books at the banks dropping by $3bn - around 0.5 percent from $553bn to $550bn.
Owner occupier lending rose slightly by $1.3bn (or 0.1%) from $1.022trn to $1.024trn in the same time period, Australian Broker noted.
The big four banks held $1.30bn in August which reflected 82.5% of the total market share. The owner occupier loan books of the big four sat at $830bn in August (81.0% of total market share) while investment lending sat at $472bn (85.4% of total market share). APRA’s figures for the four major banks and the largest non-major banks are as follows:
<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/2017/10/03/Table.jpg" alt="">
APRA does not re-adjust for re-classified loans. By contrast however Australian Broker also noted the Reserve Bank of Australia’s (RBA’s) monthly financial aggregates show that overall lending volumes continue to increase with total housing credit growing by 0.5% from July to August and by 6.6% year-on-year.
The RBA estimates that $58bn worth of loans was switched from investor to owner-occupier between July 2015 and August 2017.
Some $1.7bn was moved in August 2017, the website noted.
 
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j.ballantyne1990-6AQqhLzZaK

Investor lending dips, as loans get switched over to cheaper owner-occupier: APRA/RBA updates

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Interest rates for investment lending continues to see an upward movement for both principal and interest and interest only mortgages, according to latest data from comparison website Canstar.
There was a 46 basis point difference between the average home loan rate with principal and interest. While the average basic variable rate for owner occupiers  was 4.27 percent, for investors it was 4.73 percent.
For the more popular standard variable rate, the difference was 44 basis points, the data revealed. While for owner-occupiers, the average standard variable rate was $4.48 percent, investors are being charged 4.92 percent on average, the data revealed.
<a href="https://www.propertyobserver.com.au/images/2017/08/08/CanstarOwnerOccupier.png" target="_blank">Click to enlarge</a>
 <img src="https://www.urban.com.au/images/2017/08/08/CanstarOwnerOccupier.png" alt="">
<a href="https://www.propertyobserver.com.au/images/2017/08/08/CanstarInvestorPI.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/08/08/CanstarInvestorPI.png" alt=""> 
Both comparisons were on a loan size of $350,000 and a loan-to-value ratio of 80 percent. The data was a snapshot of between 31 July and 4 August.
<a href="https://www.propertyobserver.com.au/images/2017/08/08/CanstarOwnerInterestOnly.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/08/08/CanstarOwnerInterestOnly.png" alt=""> 
<a href="https://www.propertyobserver.com.au/images/2017/08/08/CanstarInvestorInterestOnly.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/08/08/CanstarInvestorInterestOnly.png" alt="">
Banks have been increasing interest rates in response to higher capital requirements and also to rein-in interest-only lending because of the risks from high household debt.
They have also moved on investor loans after regulatory measures to rein in property prices, especially on the East Coast. 
  
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jonathanchancellor-7SQnKwU6yx

Mortgage rates for investors show rising trend: Canstar

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Virgin Money has announced multiple rate changes across a range of mortgage products effective August 8.
The changes include a rise in the standard variable rates for both owner occupier and investment interest-only loans for new and existing customers.
Virgin Money will also increase fixed interest-only rates for both owner occupied and investment loans.
The lender is no longer accepting Rate Lock requests for pre-approvals or for off-the-plan purchases, the Australian Broker reported, citing a broker note.
It said that standard variable interest only rates will be raised by 25 basis points for new and existing customers.
Most rates have gone up 25 basis points. For example, the variable rate for owner occupied loans have gone up from 4.64 percent to 4.89 percent. The rate for investors has risen from 4.94 percent to 5.19 percent. 
More information on Virgin Money’s current interest rates can be found <a href="https://virginmoney.com.au/home-loans/rates-and-fees" target="_blank">here</a>.
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Virgin Money raises mortgage rates on most loans

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GUEST OBSERVER
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. 
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.
The February 2017 housing finance data which was released today by the Australian Bureau of Statistics (ABS). 
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. 
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.
<a href="https://www.propertyobserver.com.au/images/2017/04/12/chart-1-1.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/2017/04/12/chart-1-1.jpg" alt="">
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. 
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. 
The value of lending to investors fell by -5.9 percent in February but is still 14.0 percent higher year-on-year. 
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.
<a href="https://www.propertyobserver.com.au/images/2017/04/12/chart-2-1.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/2017/04/12/chart-2-1.jpg" alt="">
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. 
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. 
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.
<a href="https://www.propertyobserver.com.au/images/2017/04/12/chart-3-1.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/2017/04/12/chart-3-1.jpg" alt="">
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. 
Lending for construction was -13.6 percent lower in February while lending for established dwellings fell by -5.2 percent. 
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. 
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. 
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.
Click to enlarge
<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="">
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. 
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.
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. 
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.
Cameron Kusher is research analyst for CoreLogic. You can contact him <a href="https://blog.corelogic.com.au/about/">here</a>.
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Investor lending slows in February before the APRA crackdown was announced

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In the first sign of the impact of tighter lending practices by banks, investor loans showed a sharp 6 percent drop in value in February, along with a fall in home loan demand, according to a senior economist with a leading bank. 
New data from the Australian Bureau of Statistics show that not only the number of new loans ease modestly in the February, but the value of all loans also fell, said Savanth Sebastian, senior economist at CommSec.
The Real Estate Institute of Australia (REIA) also confirmed the view, saying the latest ABS data shows finance approvals for investor housing is moderating.
“The value of investment housing commitments increased by a modest 0.7 per cent in February in trend terms and decreased by 5.9 per cent in seasonally adjusted terms. This is down from its 2015 peak”, REIA president Malcolm Gunning said.
“It is still early days but data over the next couple of months will be more telling,” added Sebastian on the fall in investor borrowings.  
All the major banks have put brakes on investor loans or refinancing of investment property mortgages, in addition to higher interest rates for investors, in line with the prudential regulator APRA’s guidelines to cool a heated property market. 
“The average loan size recorded a fall of almost $10,000 in February. In fact over the past two months the average loan balance has fallen by over $22,000 or 6.2 per cent,” said Sebastian.  
“The recent shift by the banking sector in regards to loan serviceability may have played a part. It should be noted that the average home loan is also influenced by home prices, composition of borrowers and the geographic location of home purchases.”
He said the Reserve Bank was correct in its view that conditions in the housing market are very mixed. There is a healthy pipeline of work, with owner occupiers likely to dominate home building and buying. The value of loans to build new homes stood at a just under $2.9 billion – easing modestly from the record high of $3.3 billion in March 2016. 
The latest Housing Finance data found 54,816 home loans were written throughout the month of February, down from 55,099 written the month prior.
“After three consecutive months of growth in home loan approval numbers, we saw a decrease in February,” said Mortgage Choice chief executive John Flavell.
But he added that January and December are “notoriously strong months” in terms of home loan demand and there is generally a drop off in home loan approvals come February.
In February 2017, $32.9 billion worth of home loans were approved, down 2.7% on the previous month, but up 0.3% on February 2016.
Of the $32.9 billion worth of home loans approved over the month of February, $19.9 billion were for owner-occupied loans, while $12.9 billion were for investment purposes.
Looking ahead, Flavell said recent investment policy and pricing changes by many of Australia’s lenders could cause this type of home loan demand to tumble. 
“Over the coming months, we expect to see lending for investment housing to decrease because a lot of Australia’s lenders are making changes in this space,” he said.
“In recent weeks, we have seen a number of lenders tweak their investment pricing, with some increasing their interest rates by as much as 39 basis points across some of the investment products."
In addition, some lenders have removed themselves from the investment lending space altogether, whilst others have tweaked their policy and made it clear that they will only lend to certain types of investor customers, he added.
"All of these changes will ultimately have an impact on the level of investment activity and investment loan approvals,” said Flavell.
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Bank tightening sees investor loans fall a sharp 6 percent in February: ABS data

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Australia's largest mutual bank CUA has decided to pause writing new loans for property investors in the wake of increasing demand as banks put the brakes on investor lending to meet regulatory limits.
CUA said on its website that the lender will temporarily pause accepting investor lending applications until further notice, including refinancing from other financial institutions in the wake of a sharp increase in investor lending volumes in recent weeks.
The bank wanted to stay within the 10 percent investor lending growth cap set by APRA, said chief operating officer, Member Services, Andy Rigg.
“We have been closely monitoring our year-on-year investor lending balance growth to ensure that we continue to lend prudently while remaining within the 10% regulatory growth benchmark,” he said.
“We have observed an increase in new investor applications, particularly in response to some of the actions taken by other lenders to slow their investor growth.”
“In response to the continued growth in our investor lending and forward projections of this growth, we’ve taken the decision that we need to temporarily pause new investor lending,” he added.
Large numbers of borrowers are flocking to smaller lenders who are at risk of being overwhelmed, with concerns being voiced by Bendigo and Adelaide Bank managing director Mike Hirst too, who said rates needed to return to levels that "reflect the current market funding and capital costs”.
"As has been well telegraphed to all Australian authorised deposit-taking institutions, there is an expectation that as lenders, we must manage within the regulator's 10 per cent growth speed limit for investor loans,” Hirst was cited as saying by Fairfax Media.
The Australian Prudential Regulatory Authority came up with new guidelines for interest-only loans as well as other rules to cool the property market. The new rules require banks to cap future interest-only lending as a proportion of residential mortgages at 30 percent in addition to the reminder on staying below the 10 percent growth cap for investor loans set by it previously.
CUA has 440,000 customers, 900 staff and an $11 billion loan book. At the interim results in early March it revealed that it had written $1.06 billion in property loans, which was lower than the previous corresponding period, Fairfax Media reported.
Other lenders including BankWest and ING Direct responded to the new caps on Monday by lifting rates on loans to investors.
BankWest, a subsidiary of Commonwealth Bank, lifted rates the standard variable rate for investors by 25 basis points to 6.07 percent.
 
 
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CUA pauses loans to property investors to stay below APRA's 10 percent cap

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AMP Capital chief economist Shane Oliver has forecast a slowdown in property price gains in Sydney and Melbourne this year ahead of a 5-10 percent price fall starting next year.
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The call comes in the wake of the Australian Prudential Regulation Auth­or­ity’s announcement on Friday of tougher lending standards, including a crackdown on interest-only home lending.
Dr Oliver said it was no surprise to see APRA increase its focus on the investor lending market, but told The Australian the moves had come too late.
“The latest moves by APRA, coming on the back of bank mortgage rate hikes over the last two weeks, the likelihood of action to boost affordability in the May budget (including a cut to the capital gains tax discount), and the surge in unit supply at a time of silly prices, are all likely to result in a slowdown in property price gains in Sydney and Melbourne this year ahead of a 5-10 per cent price fall starting next year some time,” he said.
Based on the latest APRA data, CBA is the bank with the highest annual home loan growth of 7.6 per cent, compared to system growth of 7 per cent.
Westpac was up 6.4 per cent, ANZ 5.7 per cent and NAB 5.2 per cent.
CBA’s interest-only loans are growing at 42 per cent and account for 40 per cent of its book.
Home loans account for 62 per cent of all bank loans.
The tighter interest only slowdown measures from APRA came as the RBA’s latest quarterly spreadsheets on household ­finances, released on Friday, showed that average debts were now 89 per cent greater than ­incomes, up from 67 per cent greater just four years ago. 
While household debts have risen by 32 per cent in the past five years, the value of household assets­ have risen even faster, by 51 per cent. Household net worth has gained 57 per cent over that period, from $5.6 trillion to $8.8 trillion, translating to an increase from $666,864 per household to $954,550 in just five years.
The booming housing markets of Sydney and Melbourne are a large part of this increase, with the value of the housing stock rising by 47 per cent, from $4.2 trillion to $6.1 trillion. The size of the housing stock has increased by 8.5 per cent over that period, so the ­increase per house has been about 33 per cent.
Oliver has previously predicted 5 to 10 percent price falls.
Last October he noted the surge in prices and debt has led many to conclude a crash is imminent.
"But we have heard that lots of times over the last 10-15 years.
"Several considerations suggest a crash is unlikely.
"First, we have not seen a generalised oversupply and at the current rate we won’t go into oversupply until around 2017-18.
"Second, despite talk of mortgage stress the reality is that debt interest payments relative to income are around 2004 levels.
"Third, Australia has still not seen anything like the deterioration in lending standards seen in other countries prior to the GFC.
"In fact in recent years there has been a decline in low-doc loans and a reduction in loans with high loan to valuation ratios."
<a href="https://www.propertyobserver.com.au/images/2016/10/20/Tightening%20lending%20standards.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/2016/10/20/Tightening%20lending%20standards.jpg" alt="">
Oliver noted it is dangerous to generalise before saying nationwide price falls are unlikely until the RBA starts to raise interest rates again.
"This is unlikely before 2018, at which point we are likely to see a 5 percent or so pullback in property prices as was seen in the 2009 and 2011 down cycles.
"Sydney and Melbourne having seen the biggest gains are more at risk and so could fall 5-10 percent around 2018."
 
For more real estate traps and tips visit <a href="https://realestatetraps.com.au/">realestatetraps.com.au</a>
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Shane Oliver again tips 5 to 10 percent property price falls for Sydney and Melbourne

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GUEST OBSERVER
Private sector credit rose by 0.3 percent in February after a 0.2 percent gain in January. Annual credit growth of 5.0 percent is near 3-year lows.  
Investor housing: Investor housing finance lifted by 0.6 per cent in February to stand 6.7 per cent higher over the year – the fastest growth in 12 months.  
China data: The National Bureau of Statistics manufacturing purchasing managers’ index rose from 51.6 to 51.8 in March while the services gauge rose from 54.2 to 55.1 – a near 3-year high.  
What does it all mean?
The latest lending (private sector credit) figures suggest a subdued borrowing environment. But it is important to point out that lending recorded the biggest lift in 15 months in December and only partially gave back some of that out-sized growth over January and February. The subdued February reading was largely due to a modest slide in business credit which would be expected given the out-sized gain in December. The key will be how business borrowing performs in coming months.  
<a href="https://www.propertyobserver.com.au/images/2017/04/02/Screen%20Shot%202017-04-03%20at%208.47.27%20AM.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/04/02/Screen%20Shot%202017-04-03%20at%208.47.27%20AM.png" alt="">
Interestingly home lending continues to lift, dominated by investor credit growth. In fact annual growth in investor finance is now at a 12-month high. The measures taken over the last couple of year by regulators to curb investment lending had a temporary impact that has faded. And as such it is no surprise that the regulators have today looked at other avenues to tighten lending standards.  
The measures announced by APRA today are designed to keep modest pressure on the brakes of investor home lending rather than represent a slamming on the brakes. Annual growth of investor lending still remains comfortably below the 10 per cent annual growth limit although new lending has been lifting in recent months. Anecdotally the lift in interest rates on investor housing loans is already acting to slow interest in home buying.  
The stronger Chinese manufacturing and services data bodes well for the broader global economy. And given the strong trade links between Australia and China, policymakers would be encouraged by a strengthening Chinese economy.  
No doubt policymakers will continue to discuss key issues like housing affordability, but overall the central bank seems upbeat on the medium-term outlook for the Australian economy. CommSec expects no change to interest rates over the rest of 2017.  
What do the figures show?  
Private sector credit  
Private sector credit (lending) rose by 0.3 per cent in February after a 0.2 per cent gain in January. Annual credit growth eased from 5.4 per cent to a near 3-year   low of 5.0 per cent.
Housing credit grew by 0.6 per cent in February to be up 6.4 per cent on a year ago – annual growth is lifting of the lowest levels in 30 months.  
Owner occupier housing credit rose by 0.5 per cent in February to stand 6.2 per cent higher than a year ago – the slowest growth in 17 months. Investor housing finance lifted 0.6 per cent in February to stand 6.7 per cent higher over the year – the fastest growth in 12 months.  
Personal credit fell by 0.1 per cent in February to be down 1.3 per cent over the year – just up from the 1.4 per cent annual decline in January, which was the biggest annual decline in 41⁄2 years.  
Business credit fell by 0.1 per cent in February after a 0.4 per cent fall in January and 1.1 per cent rise in December. Business credit is 3.7 per cent higher than a year ago – slowest growth in 21⁄2 years.  What is the importance of the economic data?  
Private sector credit figures are released by the Reserve Bank on the last working day of the month. Credit is separated into three categories – housing, other personal and business. Private sector credit is effectively the amount of loans outstanding in the economy. If growth in lending is strong then it suggests that credit from financial institutions is freely available, underlying demand for assets such as cars and houses is firm and that the price of credit (interest rates) is attractive.
<a href="https://www.propertyobserver.com.au/images/2017/04/02/Screen%20Shot%202017-04-03%20at%208.46.29%20AM.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/04/02/Screen%20Shot%202017-04-03%20at%208.46.29%20AM.png" alt="">
What are the implications for interest rates and investors?
The Chinese economic data remains encouraging, showing that the transition from the industrial sector to household sector remains on track. The manufacturing sector is expanding, while the services sector is clearly the driver taking up any slack.  
Interest rates are super-low but credit growth is slowing rather than rising. Excluding investor housing, demand for loans is modest. Consumers and businesses are still keen to pay down debt rather than take up new credit.  
 Interest rates will remain on hold over the rest of 2017.  
Savanth Sebastian is an economist for <a href="https://www.commsec.com.au/" target="_blank">CommSec</a>
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Investor lending dominates borrowings: CommSec's Savanth Sebastian

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The Australian Prudential Regulation Authority (APRA) has clamped down on interest-only loans in a bid to cool the hot east coast property market.
The regulator said it had written to all lenders today.
From now on interest-only loans must be restricted to 30 per cent of new residential mortgage loans.
Interest-only lending represents nearly 40 per cent of the stock of residential mortgage lending by banks.
APRA said this was "quite high" by international and historical standards.
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“APRA views a higher proportion of interest-only lending in the current environment to be indicative of a higher risk profile," APRA Chairman Wayne Byres said.
"We will therefore be monitoring the share of interest-only lending within total new mortgage lending for each ADI, and will consider the need to impose additional requirements on an ADI when the proportion of new lending on interest-only terms exceeds 30 per cent of total new mortgage lending," Wayne Byres said.
He said that APRA also continues to monitor the prevalence of higher risk mortgage lending more generally, including lending at high loan-to-income ratios, lending at a high loan-to-valuation ratios, and lending at very long terms or with long interest only periods (e.g. beyond 5 years). 
He said the regulator believes the 10 per cent benchmark for growth in lending to investors continues to provide an appropriate constraint in the current environment, balancing the need to continue to moderate new investor lending with the increasing supply of newly completed construction which must be absorbed in the year ahead.
The new measures:
<ul>
<li>Limit the flow of new interest-only lending to 30% of total new residential mortgage lending, and within that place strict internal limits on the volume of interest-only lending at loan-to-value ratios (LVRs) above 80% and ensure there is strong scrutiny and justification of any instances of interest-only lending at an LVR above 90% </li>
<li>Manage lending to investors in such a manner so as to comfortably remain below the previously advised benchmark of 10%</li>
<li>Review and ensure that serviceability metrics, including interest rate and net income buffers, are set at appropriate levels for current conditions</li>
<li>Continue to restrain lending growth in higher risk segments of the portfolio (e.g. high loan-to-income loans, high LVR loans, and loans for very long terms).</li>
</ul>
No reduction in the 10% annual cap on investor credit growth was announced.
The increased scrutiny comes in response to an environment of heightened risks such as high housing prices, high household debt, low income growth, historically low interest rates, and strong competitive pressures. 
The regulator has has advised ADIs that it is also monitoring the growth in warehouse facilities provided by ADIs to other lenders. These facilities allow lenders to build a portfolio of loans that will eventually be securitised.
“APRA would be concerned if these warehouse facilities were growing at a materially faster rate than an ADI’s own housing loan portfolio, or if lending standards for loans held within warehouses are of a materially lower quality than would be consistent with industry-wide sound practices,” Byres said in the letter.
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APRA tightens interest only lending rules

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GUEST OBSERVER
Interest rate cuts and the return of lending to investors over the past year have seen a re-emergence of investors as a dominant force in the national housing market.
At the end of last week the Australian Bureau of Statistics (ABS) published housing finance data for January 2017 and it showed that at that time, demand from the investment segment of the market was continuing to surge.  Pairing the housing finance data with the Reserve Bank’s (RBA) lending aggregate data provides deeper insight into housing investor behaviour. 
The January 2017 housing finance data showed that over the month, investors committed to a total of $13.8 billion in finance for investment properties.  The figure represented a 4.2 percent rise over the month and a 27.5 percent increase year-on-year (the largest annual increase since August 2014). 
The first chart shows that 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 percent lower than its historic peak in April 2015. 
<h3>Monthly value of investor housing finance commitments</h3>
Click to enlarge
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<h3><img src="https://www.urban.com.au/images/2017/03/22/2017-03-20-image1.png" alt=""></h3>
 
The second chart highlights how most of the investor housing finance commitments are 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.
<h3>Monthly value of investor housing finance commitments by property type</h3>
Click to enlarge
<img src="https://www.urban.com.au/images/2017/03/22/2017-03-20--image2.png" alt="">
The third chart comes from data published by the RBA on investor housing credit which represents the total amount outstanding to mortgage lenders for the purposes of investor housing.  In January 2017, investor credit expanded by 0.6 percent to be 6.6 percent 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. 
<h3>Monthly and annual change in investor housing credit to Australian lenders</h3>
Click to enlarge
<img src="https://www.urban.com.au/images/2017/03/22/2017-03-20--image3.png" alt="">
The final chart shows the monthly value of investor credit outstanding to Australian lenders.  At the end of January 2017, the RBA reports that there was $572.2 billion in investor credit outstanding to Australian lenders.  This figure accounted for 34.9% of all housing credit outstanding ($1.637 trillion) and 21.5 percent of total outstanding credit.  The chart 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 percent of all credit.
<h3>Monthly value of investor housing credit to Australian lenders</h3>
Click to enlarge
<img src="https://www.urban.com.au/images/2017/03/22/2017-03-20--image4.png" alt="">
All of the data presented highlights that the latest data we have shows demand from the investor segment in the housing market continues to surge.  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.  It is clear from the data that many are doing so. 
While investor activity is rampant, the proportion of total housing finance commitments to owner occupier first home buyers is at an historic low.  On one hand it is positive that home owners are investing on the other hand they can continue to outbid those people that don’t already own homes further locking many potential buyers out of the housing market.
It is anticipated that over the coming months we will see further tightening of lending policies to investors with some lenders approaching APRAs 10 percnet 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.
Cameron Kusher is research analyst for CoreLogic. You can contact him <a href="https://blog.corelogic.com.au/about/" target="_blank">here</a>.
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