<p>Perth’s new apartment market recorded its strongest quarter of sales since Q4 2021, with 412 apartments sold in Q1 2026 and a record quarterly sold value of $537 million, according to Urbis’ latest Apartment Essentials results.</p>

<p>Urbis said the March quarter result reflects strong, highly product‑specific demand across both ends of the market, from more attainable projects delivering at scale, through to premium stock being absorbed by equity‑rich downsizers.&nbsp;</p>

<p>David Cresp, Partner at Urbis, said the key story in Perth is not demand, it is the market’s ability to convert demand into delivered housing.&nbsp;</p>

<p>“This is the strongest sales quarter since Q4 2021, and it reinforces that demand in Perth is real and it’s local,” David Cresp said. “But the task now is delivery, turning that demand into projects that can actually be built and completed.”&nbsp;</p>

<p>[smartcode_project:default project_id=110291 project_image_fid=302785]</p>

<h2>Affordable product leads, premium demand remains resilient</h2>

<p>Sales in Q1 were led by more affordable projects, with The Boulevard (SKS Group) recording 115 sales in the quarter, the presentation noting this is only the second time a single project has surpassed 100 quarterly sales. The project was able to offer more affordable housing product right next to a train station.&nbsp;</p>

<p>Palmyra West (Finbar) also delivered strong results with 28 sales in Q1, following 84 sales in Q4, with an average price of under $800,000, underscoring depth of demand for well‑located, attainable new stock.&nbsp;</p>

<p>At the premium end, Urbis said downsizer demand is continuing, with the results highlighting Romeo (Applecross, Finbar) recording 75 sales and reaching almost 50% sold in one quarter.</p>

<p>Jual (Shenton Park, Celsius Property) also posted a strong quarter with 28 sales, reaching 39% sold in one quarter.</p>

<p>Urbis noted that Perth apartment demand is not speculative, not investor‑led, and not uniform, describing it as localised, often equity‑driven and highly product‑specific, a pattern reflected in the polarisation between strong “attainable” performers and premium downsizer product.&nbsp;</p>

<p>[smartcode_project:default project_id=148957 project_image_fid=364102]</p>

<h2>Prices underpinned by costs, and the delivery risk is growing</h2>

<p>Urbis said pricing pressure is cost not demand‑driven: construction costs and delivery risk are now a central constraint, with the results noting build costs remain elevated and volatile, and that energy, fuel and labour uncertainty weigh on feasibility.</p>

<p>David Cresp said a growing challenge for private Build‑to‑Sell developers is simply securing a builder in the current environment.</p>

<p>“Developers are really feeling the pressure from a building market that was operating at capacity and securing a builder is challenging,” David Cresp said, adding that even where a builder can be secured, “trying to get to the price that makes the development financially viable is incredibly challenging in the current market.”&nbsp;</p>

<p>Urbis’ broader WA commentary also notes that industry remains at or above capacity with lot and housing creation, and that many builders are limiting new sales to manage stretched workforces and fixed‑price contract pressures, conditions that flow directly into apartment feasibility and delivery timing.</p>

<p>[smartcode_project:default project_id=108869 project_image_fid=317905]</p>

<h2>Supply: improving later, but still constrained, and Perth lags eastern benchmarks</h2>

<p>While near‑term supply remains constrained, Urbis’ forecast shows completions lifting “Supply is forecast to be back above 1,500 apartments per annum for the first time since 2019”, with 1,775 completions forecast for 2026, and volumes remaining above that level over the following years.&nbsp;</p>

<p>Looking further ahead, completions are forecast to reach 2,500 in 2028, with the report noting 32% of that total is social/affordable, reflecting the role of government‑supported delivery in rebuilding the pipeline.&nbsp;</p>

<p>However, Urbis said Perth remains behind comparable markets on pipeline scale. In a national comparison of projects under construction, the report shows under construction Perth Build‑to‑Sell (BTS) at 3,446 apartments versus the Gold Coast at 7,922. Mr Cresp said “The challenge for Perth is how to we grow the delivery pipeline”.</p>

<p>Urbis’ conclusion is that Perth’s market is increasingly defined by product discipline and delivery certainty, with the research identifying “delivery certainty is key” and calling out builder risk and procurement models as core success factors, alongside “timing and staging”.&nbsp;</p>


Joel Robinson

Perth apartment sales hit strongest pace since late 2021 as builder capacity tightens

<p><a href="https://www.apartments.com.au/developers/sammut-developments">Sammut Group</a> has secured development approval for its latest Brisbane apartment project, marking the Sydney developer’s next step in expanding its Queensland pipeline following the success of its debut Gold Coast development, Coast.</p>

<p>The approved project at <a href="https://www.apartments.com.au/new-apartments/44-glen-road-toowong-qld-4066">44 Glen Road, </a><a href="https://www.apartments.com.au/developments/toowong-qld-4066">Toowong</a> will deliver a 15-storey riverfront apartment building with 42 residences, significantly increasing the scale of the site’s previous approval for a smaller luxury scheme. Designed by Bureau^proberts, the development will comprise a mix of predominantly four-bedroom and two-bedroom apartments positioned to maximise Brisbane River and city views.</p>

<p>Sammut Director Julian Sammut said the group had been actively searching Brisbane for several years before identifying Toowong as the right fit.</p>

<p>“Brisbane was the right step for Sammut,” Sammut said.</p>

<p>“With the success of Coast we thought we should definitely look to do more in Queensland alone. We then pushed up to look at Brisbane. We've been looking for I'd say two to three years actually and it was hard to find the right location.”</p>

<p><img alt="Sammut makes Brisbane apartment play" data-entity-type="" data-entity-uuid="" src="https://res.cloudinary.com/dz9xllyip/image/fetch/f_auto,c_limit,w_1440,q_75/https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/field/image/Screenshot%202025-12-23%20at%203.27.14%E2%80%AFPM.png?VersionId=dYAVIL7qdcGA8ojvkslSrLjczXFejSSx" /></p>

<p>Sammut said suburbs including New Farm and Teneriffe were considered before the group ultimately focused on Toowong due to its strong downsizer demographic and limited supply of developable riverfront land.</p>

<p>The site was acquired off-market after what Sammut described as a lengthy negotiation and planning process, with the developer pursuing an uplift to the original approval.</p>

<p>“We are DA approved now which is very exciting,” Sammut said.</p>

<p>“We've had our change approval come through and we've obviously doubled the height, 15 storeys plus rooftop. We've got 42 amazing apartments that are going to be coming to market soon.”</p>

<p><img alt="Sammut makes Brisbane apartment play" data-entity-type="" data-entity-uuid="" src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,dpr_2.0,q_auto:good/https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202025-12-23%20at%203.27.26%E2%80%AFPM.png?VersionId=ohkRkY0dIZlqdfME2EZePsCQavRiBadE" /></p>

<p>Bureau^proberts said the design responds to Toowong’s evolving urban character, balancing contemporary apartment living with the area’s established residential identity.</p>

<p>“A place where traditional Queensland living has taken place for centuries; Toowong is seeing a shift of contemporary influence, commercial and retail hubs mixed with well-considered residential offerings – all the while maintaining its character and charm,” the architect noted in planning documents submitted to Brisbane City Council.</p>

<p>The architecture practice said the project’s form was shaped by its riverfront setting, flood considerations, neighbouring building scales, and view corridors.</p>

<p>“They said the mix of four and two-bedroom apartments capture the ‘fundamental qualities of Queenslander living,’ translated into the context of a contemporary subtropical building.”</p>

<p>The development sits just off Coronation Drive within walking distance of Toowong’s retail precinct and the upgraded Regatta ferry terminal, while also benefiting from proximity to the incoming green bridge connection to West End. Sammut said the accessibility and amenity offering were central to the site’s appeal.</p>

<p>The approval adds to growing residential activity along the Toowong riverfront, joining nearby projects including Consolidated Properties’ Monarch Residences and Spyre Group’s ARC Residences.</p>


Sammut secures approval for debut Brisbane apartment development in Toowong

<p>Developer Lanevick is heading back into Sydney’s apartment market after focusing more heavily on the luxury townhouse and terrace sector in recent years.</p>

<p>Lanevick, founded and directed by Steve Maroun, is expecting to receive approval in the coming months for a new apartment development in Gladesville, with the aim to launch it to the market later this year.</p>

<p>The 51-apartment project, designed by Studio Johnston, will comprise a mix of one-, two-, and three-bedroom apartments positioned toward the Hunters Hill downsizer market.</p>

<p>“Traditionally it’s been difficult for people in that market to downsize because there just hasn’t been the right product available,” Maroun said.</p>

<p>“We’re targeting buyers who might have 30 to 40 per cent of their house value sitting in the bank after downsizing.</p>

<p>“They still want good spacious entertaining areas, they still want quality design, but they also want flexibility and the ability to enjoy life a bit more after working hard for a long time.”</p>

<p>The project sits near Boronia Park and within close proximity to the Parramatta River foreshore, an area Maroun says offers more of a Hunters Hill lifestyle than a traditional apartment precinct.</p>

<p>“From a lifestyle perspective, it’s really more Hunters Hill than Gladesville,” Maroun said. “You’re close to the foreshore, close to parklands, and still connected back into the village precinct.”</p>

<p>From level four and above, apartments will capture water views&nbsp;toward Sydney Harbour. Communal amenity will include rooftop entertaining areas, wellness spaces, and a gym tailored toward owner-occupier buyers.</p>

<p>“We’ve really designed these apartments around that buyer coming from the Hunters Hill LGA and what they’re actually looking for in their next chapter.”</p>

<p>The proposed development has also been designed to respond to the changing character of the broader Gladesville town centre, where a growing number of mixed-use and residential proposals are expected to emerge over the coming years.</p>

<p>“Gladesville presented a rare opportunity to deliver a genuinely design-led residential project within an evolving lifestyle precinct, just moments from the growing Gladesville town centre, and we’ve approached the project with a strong focus on architecture, liveability and long-term community value,” Maroun said.</p>

<p>Maroun said Lanevick saw a first-mover advantage within the precinct as planning controls continue to evolve to accommodate greater housing density.</p>

<p>“We think there’s a real opportunity there that hasn’t really been serviced properly yet,” he said.</p>

<p>“There’s going to be a broader evolution of the whole Gladesville village precinct over time, particularly with more activation and mixed-use outcomes.”</p>

<p>The Venus Street proposal will include a commercial and retail component at ground level designed to contribute to that evolving streetscape activation.</p>

<p>“A big part of the thinking was how do you activate that area properly and create more vibrancy and amenity, which is what Hunters Hill has been looking for,” Maroun said.</p>

<p>Lanevick’s focus since 2020 has largely been on smaller-scale luxury townhouse and terrace developments. The developer recently completed Royale Randwick, also designed by Studio Johnston, where prices reached $3.65 million. The project was featured in the UDIA NSW 2026 Professional Development Prospectus and was also named a finalist for Development of the Year.</p>

<p>&nbsp;</p>


Lanevick to cater for Hunters Hill downsizers with new Gladesville apartment development

<p>Property developer One Living, backed by former Macquarie banker turned investment manager Chris Green’s investment firm, has unveiled plans to bring more institutional capital into housing to help address the national supply crisis.</p>

<p>The New York-based investor has focused his firm, GreenPoint Partners, on addressing the supply shortage hitting middle market housing in Australia.</p>

<p>It is backing the new One Living business to develop more than 1000 units along the eastern seaboard. The new firm is starting with a development on Mona Vale Road, on the border of Mona Vale and Pymble, in Sydney’s Northern Beaches, with around 140 apartments planned. They are eyeing off more sites across the city.</p>

<p>With cost pressures rising in the industry, One Living’s model is to be a vertically integrated developer-builder, so it can respond directly to the housing gap by removing the cost inefficiencies embedded in traditional residential delivery.</p>

<p>“We are building a platform designed to operate at scale and starting in a market where there’s a clear need for quality, attainable housing,” One Living joint managing director Joseph Scuderi said.</p>

<p>“It’s that missing middle – it’s that attainable end of housing… that’s what most Australians invest into and what Australians can actually afford.”</p>

<p><img alt="Mona Vale" data-entity-type="file" data-entity-uuid="798dfa93-4941-4db6-a696-31e9dc18e81c" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%202.31.50%E2%80%AFPM.png?VersionId=mKBqi5C_DmeiXS.AtJkcR8LQIxqCqmFi" /></p>

<p>GreenPoint Partners brings years of experience assembling and scaling real estate operating businesses across major markets. And Green sees a big opportunity in Australia.</p>

<p>“For its size, sophistication and importance to the community, Australia’s living sector has remained largely under-institutionalised, which represents significant opportunity,” Green said. “GreenPoint identified that gap, assembled the right team, and is backing One Living to build a platform that is aligned to market needs.”</p>

<p>Green said being a builder-developer would give the company the capacity and flexibility it required to deliver reasonably-priced homes.</p>

<p>“We want it to be at that attainable level; not super high end luxury but at that attainable level,” he said.</p>

<p><img alt="Mona Vale" data-entity-type="file" data-entity-uuid="74a5344a-4b26-4d4a-ada3-056b1220be77" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%202.32.15%E2%80%AFPM.png?VersionId=vY8hXHO4reBMdO8ZXMWCNtGZJofUPQ3j" /></p>

<p>&nbsp;</p>

<p>One Living will undertake a component of affordable housing in its schemes, which it will own and operate, and it could also run build-to-rent on some sites.</p>

<p>Green praised local policy settings.</p>

<p>“The NSW government is being very supportive, strategic and pragmatic in terms of how do we generate more supply of housing,” he said. “We think it’s actually positive for development and the bit that’s been lacking at that attainable level is that it’s lots of relatively small private developers, whereas we want to create an institutional platform.”</p>

<p>One Living is also&nbsp;looking at high-density projects and could take on more institutional funding in the future.</p>

<p>“The way we will be able to achieve economies of scale is through size,” Green added.</p>


One Living enters Sydney's new apartment market with Northern Beaches site acquisition

<p>It's been several years since there's been an opportunity to buy a brand new townhome in Melbourne's coastal suburb of Mordialloc. Even apartment developments in recent times have been few and far between in the area.</p>

<p>Local developer LDS Property identified the gap in new housing, securing a site on White Street, directly opposite&nbsp;Woodlands Golf Club Mordialloc. They've recently launched&nbsp;<a href="https://www.apartments.com.au/new-townhouses/wm-residences-mordialloc-102-white-street-mordialloc-vic-3195">WM Residences</a>, just 13 townhouses which they have already started building.</p>

<p>Projects by Buxton Director Heath Thompson, who is selling WM Residences, says the townhouses x that perfect middle ground be</p>

<p data-end="683" data-start="511">"Mordialloc residents have had limited options to downsize within the suburb, often forcing them to look elsewhere despite long-standing ties to the area," Thompson says.</p>

<p data-end="882" data-start="690">"With very little comparable new supply coming to market, projects like WM Residences are well placed, particularly as buyers look to capitalise on current conditions amid constrained supply."</p>

<p data-end="882" data-start="690">[smartcode_project:default project_id=134646 project_image_fid=6109]</p>

<p>The development, designed by regarded architecture firm&nbsp;<a href="https://www.apartments.com.au/architects/ewert-leaf">Ewert Leaf</a>,&nbsp;adopts a deliberately restrained architectural approach, focusing on simplicity, durability and liveability rather than overt design gestures.</p>

<p>The boutique scale is central to the offering. With only 13 three-bedroom residences, each home is configured to prioritise functional layouts and everyday use, supported by private terraces and secure two-car garages.</p>

<p>Ewert Leaf’s design response leans into a calm, neutral material palette. Interiors are defined by oak flooring, white walls and soft finishes, creating a consistent and understated backdrop. The approach avoids trend-driven detailing in favour of longevity, with an emphasis on natural light and spatial clarity.</p>

<p>[smartcode_project:default project_id=134646 project_image_fid=6110]</p>

<p>Beyond aesthetics, the homes are designed to meet contemporary performance expectations. Each residence targets a minimum 6-star energy rating, incorporating double glazing, comprehensive insulation and all-electric Bosch appliances.</p>

<p>The project’s location supports a walkable coastal lifestyle, sitting within close proximity to Mordialloc’s foreshore, Main Street retail strip and the train station. Local cafés and dining venues, including Suburbia Deli and Hendriks Café, are within a short walk, reinforcing the area’s established neighbourhood character.</p>

<p>[smartcode_project:default project_id=134646 project_image_fid=6116]</p>

<p data-end="247" data-is-last-node="" data-is-only-node="" data-start="0">While <a href="https://www.apartments.com.au/developments/mordialloc-vic-3195">Mordialloc</a> is often defined by its beach and pier, the project taps into other areas of day to day living, offering easy access to local food, casual dining and transport, rather than positioning itself purely as a lifestyle retreat.</p>

<p>WM Residences reflects a continued trend across Melbourne’s coastal suburbs towards smaller-scale, design-led townhouse developments, particularly on infill sites where proximity to amenity is already established.</p>

<p>With construction commenced prior to its market entry, the project aligns with a growing preference among buyers for developments with visible progress and defined delivery timeframes.</p>

<p>[smartcode_project_cta:default project_id=134646]</p>


WM Residences fills gap in Mordialloc townhouse market

Lending

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<p>The weekly ANZ-Roy Morgan consumer confidence rating fell by 1.3 per cent after rising by 2.6 per cent in the previous week (the biggest increase in 7½ months). </p>
<p>Number of home loans: The value of lending to households rose by 2.6 per cent in February after falling 2.4 per cent in January. </p>
<p>First-home buyers: In seasonally-adjusted terms, the share of first-home buyers in the home lending market hit 6-year highs of 27.1 per cent in February.</p>
<p>The consumer confidence figures have implications for retailers, and other consumer-focussed businesses.</p>
<p>The lending figures have implications for builders, housing-reliant businesses, finance providers, retailers, and companies dependent on consumer and business spending.</p>
<p><strong> What does it all mean?</strong></p>
<p>Consumer confidence can be over-analysed. Sentiment apparently fell last week after rising in the previous week. Overall, however, confidence is above the lows recorded a month ago and still above longer-term averages. Interest rates remain stable as does the Aussie dollar, and while tax cuts lie ahead, home prices are still falling in Sydney and Melbourne. So consumers remain cautiously optimistic. Generally people feel good about the economy and the outlook for their finances but aren’t feeling especially rich at present and thus in no mood to spend up big. </p>
<p>After falling almost 9 per cent in the prior three months, loans to households rose 2.6 per cent in February. Owner-occupier home loans, investment home loans, refinancing and personal loans all bounced in the month. And topping the good news is that the share of first-home buyers in the market is holding near 6-year highs. Lower home prices are certainly being embraced by one group of Aussies. What do the figures show? Consumer Sentiment</p>
<p>The weekly ANZ-Roy Morgan consumer confidence rating fell by 1.3 per cent to 113.2 points after rising by 2.6 per cent in the previous week (the biggest increase in 7½ months). Consumer sentiment is above the longer term average of 113.1 points since 1990. </p>
<p><strong> Three out of the five major components of the index rose last week: </strong></p>
<p>The estimate of family finances compared with a year ago was down from +5.0 points to +3.2 points; </p>
<p>The estimate of family finances over the next year was up from +20.7 points to +22.8 points;  Economic conditions over the next 12 months was up from +7.0 points to +7.7 points; </p>
<p>Economic conditions over the next 5 years was up April 9 2019 2 Economic Insights: First-home buyer activity at 6-year high from +10.7 points to +11.6 points; </p>
<p>The measure of whether it was a good time to buy a major household item was down from +30.2 points to +20.6 points. </p>
<p>The measure of inflation expectations rose from a record low of 3.6 per cent to 4.3 per cent. <br><br><strong>Lending</strong> </p>
<p>The Australian Bureau of Statistics reported: “In seasonally adjusted terms, lending commitments to households rose 2.6 per cent in February 2019, driven by new lending for owner occupier dwellings (up 3.4 per cent). There were also rises for lending to households for refinancing (2.6 per cent), investment dwellings (0.9 per cent) and personal finance (0.4 per cent).The February rise in lending to households follows a 2.3 per cent fall in January 2019.</p>
<p>In seasonally adjusted terms, the value of new lending commitments for owner occupier dwellings is down 13.9 per cent from February 2018 and the value of new lending commitments for investment dwellings is down 29.1 per cent from February 2018. </p>
<p>In trend terms, lending commitments for owner occupier dwellings fell 1.0 per cent and investment dwellings fell 2.2 per cent in February 2019. </p>
<p>The number of lending commitments made to owner occupier first home buyers (seasonally adjusted) rose 1.8 per cent in February 2019. This outpaced the growth in the number of lending commitments made to non-first home buyers (up 1.6 per cent).</p>
<p>In trend terms, lending to businesses fell 2.4 per cent in February and is down 3.3 per cent from February 2018.” </p>
<p>The share of first home buyers (excluding refinancing) rose from 26.8 per cent to 27.1 per cent in seasonally adjusted terms in February, a 6-year high.</p>
<p>Excluding refinancing, the number of owner-occupier home loans across States &amp; territories were: NSW (-8.2 per cent); Victoria (+1.5 per cent); Queensland (+4.1 per cent); South Australia -1.2 per cent); Western Australia (- 1.2 per cent); Tasmania (+6.2 per cent); NT (+14.2 per cent); ACT (+7.4 per cent). </p>
<p>Fixed-rate home loans accounted for 16.2 per cent of all owner-occupier loans in February (5-month low), down from 16.6 per cent in December. </p>
<p><strong> What are the implications for interest rates and investors?</strong></p>
<p> Retailers must provide a unique proposition in the current environment in order to get cautious consumers to part April 9 2019 3 Economic Insights: First-home buyer activity at 6-year high with cash. </p>
<p>Is home lending starting to stabilise after recent weakness? It is early days, but the lift in lending in February is encouraging. The softer home prices are certainly bring more first home buyers into the market. Rising home prices aren’t unambiguously positive. Neither are falling prices unambiguously negative. Rather price changes reflect a rebalancing of supply and demand. And that rebalancing continues, especially in Sydney and Melbourne. The falling home prices certainly are being embraced by first home buyers. And lower home prices, give cashedup buyers more choice if loan size doesn’t change. </p>
<p>Interestingly, while NSW home prices have retreated 9.5 per cent on a year ago, the average home loan is down only 1.6 per cent. Home buyers haven’t cut back on loan size, rather they have arguably access to a greater range of properties. </p>
<p>CommSec expects interest rates to be unchanged for the foreseeable future. But the loss of momentum across global economies means central banks are skewed to more accommodative monetary policies.</p>
<p><em>CRAIG JAMES is the Chief Economist at CommSec</em></p>
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cjames-5S2v74qSNK

First-home buyer activity at 6-year high: CommSec's Craig James

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<p>ASIC has issued a consultation paper to update its guidance on responsible lending.</p>
<p>The (<a href="https://asic.gov.au/regulatory-resources/find-a-document/consultation-papers/cp-309-update-to-rg-209-credit-licensing-responsible-lending-conduct/" title="CP 309 Update to RG 209: Credit licensing: Responsible lending conduct">CP 309</a>) ASIC guidance has been in place since 2010 when the responsible lending laws were first introduced. Although the laws have not changed since 2010, ASIC considers it timely to review and update the guidance in light of its regulatory and enforcement work since 2011, changes in technology, and the recent Final Report of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.</p>
<p>Our review of RG 209 will consider whether the guidance remains effective and identify changes and additions to the guidance that may help holders of an Australian credit licence to understand ASIC’s expectations for complying with the responsible lending obligations.</p>
<p>ASIC welcomes submissions on the update of our guidance on responsible lending from any interested party. In the consultation paper we have asked a series of questions about specific matters. We are also keen to hear from stakeholders about any other issues considered important that are not dealt with in the consultation paper.</p>
<p><a href="https://www.propertyobserver.com.au/subscribe" target="_blank"><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/2019/2/Subscriber%20strip%20ad.jpg" alt=""></a></p>
<p>ASIC is also considering whether to provide an opportunity for key stakeholders to speak to the Commission at public hearings in addition to making written submissions.</p>
<p>Further information about the consultation and its progress will be available on the ASIC website.</p>
<p>“The responsible lending obligations are an integral part of the regulatory framework for all consumer loans” said ASIC Commissioner Sean Hughes. “ASIC wants to ensure its guidance provides industry with certainty, including as a result of emerging technology and initiatives such as open banking and comprehensive credit reporting. We encourage everybody to participate in this extensive consultation process”.</p>
<p>The consultation is open for a period of three months, with comments due by Monday 20 May 2019.</p>
<h2>Background</h2>
<p>Regulatory Guide 209 Credit licensing: Responsible lending conduct (RG 209) contains ASIC’s guidance on responsible lending for consumer credit. RG 209 was issued in 2010 and last revised in November 2014.</p>
<p>Since then there have been many matters that now mean it is timely for ASIC to update its guidance.</p>
<ul>
<li>ASIC regulatory and enforcement actions, including court decisions,</li>
<li>ASIC thematic reviews on various parts of the industry such as interest-only loans,</li>
<li>the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry,</li>
<li>Recent and upcoming initiatives such as comprehensive credit reporting and open banking, and </li>
<li>Changes in technology.</li>
</ul>
<p>ASIC has also received anecdotal feedback that licensees may be applying the responsible lending obligations where the law does not require them to be applied (e.g. in small business lending). </p>
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j.ballantyne1990-6AQqhLzZaK

ASIC consults on updating its responsible lending guidance

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<div class="cq-article-content-paras section">
<p>The "heavy lifting on lending standards has largely been done", Australian Prudential Regulatory Authority chairman Wayne Byres told an audience of economists in Sydney yesterday.</p>
<p>"Any tightening from here on is expected to be at the margin as banks seek to get a better handle on borrower expenses, and better visibility of borrower debt commitments," he said.</p>
</div>
<div class="cq-article-content-media section">Byres said it was "difficult to tell" whether the regulator's actions to improve lending standards at the banks were impacting on the flow of credit, but he said they "do not seem to have had an obvious impact".</div>
<div class="cq-article-content-paras section">
<div id="article-inline-ad" class="adWrapper"> </div>
</div>
<div class="related-quotes section">"Total housing lending grew at around 6 per cent in the year to May 2018, which is only marginally below long-run averages and roughly in line with the average run rate since 2011," he said.</div>
<div class="cq-article-content-paras section">
<p>Mr Byres said the cumulative growth in credit in the 3½ years since APRA intensified its focus on lending standards was greater than the credit growth in the preceding 3½ years.</p>
<p data-gtm-vis-first-on-screen-7770372_137="5296" data-gtm-vis-total-visible-time-7770372_137="900">"Credit growth appears to be slowing somewhat at the moment, but that is not surprising in an environment of softening house prices and rising interest rates," he said in a speech titled <a href="/expert-insights/finance/australian-banking-needs-to-start-preparing-for-a-rainy-day-apras-wayne-byres"><span>Preparing for a Rainy Day</span></a>.</p>
<p>Mr Byres also pointed to the relative strength of lending to owner occupiers, which has grown at three times the rate of household incomes, during a "period in which lending policies and practices have been gradually strengthened".</p>
<p>APRA's efforts had led to a reduction in high loan to value ratio lending, and a slowdown in investor and interest-only lending.</p>
</div>
<div class="cq-article-content-paras section">
<p data-gtm-vis-first-on-screen-7770372_137="6311" data-gtm-vis-total-visible-time-7770372_137="900">"These trends in higher risk lending, however, only tell part of the story. They have also coincided with a strengthening in the rigour with which banks assess borrowers' ability to service and repay their loans."</p>
<p data-gtm-vis-first-on-screen-7770372_137="6311" data-gtm-vis-total-visible-time-7770372_137="900">Conintued improvement was being sought with more accurate assessments of borrowers' incomes and expenses and better verification of existing debt commitments.</p>
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Heavy lifting on lending standards has largely been done: APRA

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<p>A number of private lenders have joined forces to provide the DomaCom Fund access to an initial lending line of $100 million.</p>
<p>It will allow DomaCom to acquire up to $250 million in property.</p>
<p>DomaCom is Australia's leading property crowdfunder. It allows anyone to invest a little or a lot in to property investment. </p>
<p>They recently crowndfunded the first mortgage backed loan for a residential property in Melbourne.</p>
<p class="x_MsoNormal">DomaCom CEO Arthur Naoumidis says obtaining investment loans is becoming more difficult.</p>
<p class="x_MsoNormal">“We have been seeking a default lending solution for our platform for three years as it is clear that advisers are seeking to use debt to deliver long-term tax effective returns for their clients.</p>
<p class="x_MsoNormal">“In addition to the recently announced capacity to being able to crowdfund their own debt, advisers can now simply select the debt level they are seeking for a particular property investment and the DomaCom platform will manage the loan application process.</p>
<p class="x_MsoNormal">“As the loans are non-recourse and will be secured against the properties and taken out by the fund, investors and advisers will not be required to complete any loan application or provide servicing information.</p>
<p class="x_MsoNormal">“The fund has a conservative loan to value ratio(LVR) of no more than 60% and the sub-funds holding the property and related loan must be positively geared – the rental income must cover all expenses including fees and loan repayments.</p>
<p class="x_MsoNormal">“In an environment where obtaining investment loans is becoming more difficult, we believe a leveraged property investment with a relatively low LVR that is positively geared will be attractive to financial advisers.” says Naoumidis.</p>
<p class="x_MsoNormal">DomaCom is also progressing discussions with several banks about providing additional lending facilities that will provide further choice to financial advisers for their clients’ property investments.</p>
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jrobinson-rf4aSBido9

DomaCom obtains $100 million lending facility

Housing - the importance of solid foundations: APRA's Wayne Byres

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<p>The Australian Prudential Regulation Authority will keep its caps on lenders' loan activity until household debt levels stabilise.</p>
<p>The prudential regulator made their policy affirmation in an address to building societies and credit unions on Monday by APRA's boss Wayne Byres.</p>
<p>Byers said lending restrictions in interest-only and investor loans were working.</p>
<p>He said they will stay until APRA sees household debt levels stabilise and lending standards increase.  </p>
<p>The crackdown began in late 2014. </p>
<p>"For those of you who chafe at the constraint, their removal will require us to be comfortable that the industry's serviceability standards have been sufficiently improved and – crucially – will be sustained," Mr Byers said in a presentation to the Customer Owned Banking Convention conference in Brisbane.</p>
<p>"We will also want to see that borrower debt-to-income levels are being appropriately constrained in anticipation of, eventually, rising interest rates."</p>
</div>
<div>APRA's lending restrictions hold growth in investor loans within banks to be no higher than 10 per cent.</div>
<div> </div>
<div>Interest-only property loans must be restricted to 30 per cent of all new residential loans.</div>
<div> </div>
<div>It has resulted in interest-only loans declining from around 40 per cent of all new mortgages to around 15 per cent.</div>
<div> </div>
<div>Mr Byres said he expected that in a period of high house prices, low interest rates, weak income growth and rising household debt levels, bankers would respond by tightening lending standards, which had "absent regulatory intervention, been drifting the other way".</div>
<div>
<p>Byres said lenders had favoured increased market share over prudence.  </p>
<p>"That temptation has, unfortunately, been widespread and not limited to a few isolated institutions – the competitive market pushes towards the lowest common denominator."</p>
</div>
<div> </div>
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APRA to keep caps on lenders' loan activity until household debts levels stablise

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<p>One of the reasons some of the price growth has eased across the Sydney residential property market is that <span>banks won't lend as much.</span></p>
<p>They have been offering home buyers reduced loan amount approvals for some time now.</p>
<p>So when buyers turn up at open for inspections and auctions this spring, they are likely to have less in their pocket that perhaps they would have had this time last year.</p>
<p>It is something that vendors need to heed as banks have cut tens of thousands of dollars off the maximum amounts they will lend prospective home buyers.</p>
<p>Its their attempt to dampen risks in the housing market.</p>
<p>The average borrowing capacity for a hypothetical typical owner occupier customer sits now around $570,000, down $110,000 from $680,000 two years ago. </p>
<p>The borrowing capacity of a hypothetical property investor customer has come back by $70,000.</p>
<p>The banks have firstly tweaked their lending mechanisms with tighter living expense assumptions.</p>
<p>Secondly the banks haven't been as accepting of exisiting income sources at face value, now applying calculations to reflect a little more uncertainty.</p>
<p>And thirdly the banks have also opted for more conservative interest rate buffers, in anticipation of rates going up at some stage.</p>
<p>We know this because an anonymous mortgage shopping study was recently conducted by Macquarie analyst Victor German who had his team posed as potential bank customers shopping for home loans.</p>
<p>They went to the ANZ, Commonwealth Bank, NAB, Westpac, St George, Bankwest, Bendigo and Adelaide Bank, Bank of Queensland and Suncorp.</p>
<p>German’s team told each bank they were a first-home buyer considering an owner-occupier or investment loan in interviews with the banks on the phone and in branches.</p>
<p>The analysts told bank representatives they were earning $105,000, had general living expenses of $1200 a month, were spending $1300 a month on rent, and had no dependents and a clear credit history. </p>
<p>Based upon that criteria, the study found that major banks were willing to lend 14 per cent to 19 per cent less to owner-occupiers, and 12 per cent to 26 per cent less to investors, compared to two years ago.</p>
<p>Macquarie, which has conducted the mystery shopping exercise for three years, expects a "further tightening in borrowing limits."</p>
<p>The Australian Prudential Regulation Authority has likewise conducted its hypothetical borrower exercises. Indeed its 2014 serviceability assessments were used to call for lending standards to be tightened. </p>
<p>Before the lending crackdown commenced three years ago, strong competition between lenders had eroded standards, albeit at the margins, to levels that lacked "common sense," the Australian Prudential Regulation Authority suggested in late 2015.</p>
<p>Lenders are now applying "at least minimum haircuts on uncertain income sources, and some have gone further to apply larger discounts to rental or other income," APRA's general manager Heidi Richards said last year.</p>
<p>This article first appeared in the Daily Telegraph.</p>
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jchancellor-FAypfDUnLy

Banks won't lend as much

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<p>Billionaire developer Harry Triguboff has confirmed the Meriton Group mortgage book has grown by around $60 million in five months, to beyond $120 million, but he told the <em>AB+F</em> website the run was finished.</p>
<p>“As it happens, at the moment, I’m not approving any. Today nobody wants my money," he said.</p>
<p>Triguboff said talk of bubbles was "very irresponsible".</p>
<p>"This is an empty continent we need people. Australia is a big place. Here in Sydney we have a boom. A great boom,” he said, before adding: “I’m sure that in Melbourne or Brisbane there will be problems, I’m sure there will be - but what can you do?"</p>
<p>The billionaire said he was a reluctant banker and was only fulfilling a need. </p>
<p>“I only do it when the banks suddenly stop. Because the world doesn’t suddenly stop. So I have to keep moving, we have to have a smooth run," he said. "If they (traditional lenders) refuse to give money for whatever reason, I will always step in." </p>
<p>The last time lenders wings were clipped, Triguboff, lent $600 million to underpin apartment sales, when his net worth was far less.</p>
<p>“I never compete (with the banks),” he said. “They have clauses there, which they use on the Chinese now. They can get out and not give the money for some reason. It's nonsense. </p>
<p>According to Triguboff the banks are allowing the regulators to cut their nose to spite the entire industry.</p>
<p>“They gave the developers money because they know the Chinese will buy - they give the money to the builder, the developer - but then when it comes to the purchaser they say ‘I cant give it to you' for some reason," he said. </p>
<p>“They read what the foreign press says about these bubbles, then our authorities - APRA and ASIC - run to the banks. So the banks get frightened. So they decide they have to be careful … which is very good, they are careful. But I think our banks are really, very, very cautious.”</p>
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Harry Triguboff says his lending has come to a halt

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<p>The Australian Prudential Regulation Authority (APRA) released its December 2015 quarterly data on property exposures by Australian authorised deposit-taking institutions (ADIs).</p>
<p>The data is always interesting to analyse in order to get further insight into the current state of the mortgage market.</p>
<p>The first data point is residential term loans to households which have a total outstanding balance of $1.384 trillion which has increase by 8.9% over the past year. The total value of outstanding owner occupier loans is $884 billion having increased by 12.8% over the past year and accounting for 63.9% of all outstanding loans. The remaining 36.1% of outstanding loans are to investors, having increased by 2.6% year-on-year to $500 billion. </p>
<p>Growth in outstanding loans has tilted away from investors to owner occupiers.  After year-on-year growth in investor loans peaked at 18.2% in March 2015 it has slowed to 2.6% growth while owner occupier credit troughed at an annual rate of 2.2% in March 2015, before rebounding to the current annual rate of 12.8% (the fastest annual growth rate since June 2010).</p>
<p><a href="/images/2016/03/Chart-1-3-580x204.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/03/Chart-1-3-580x204.jpg" alt=""></p>
<p>In terms of the types of loans outstanding, 42.3% have an offset facility, 39.3% are interest-only, 0.2% are reverse mortgages, 2.0% are low documentation loans and 0.1% are other non-standard loans.  The year-on-year change across these loan types has been recorded at: +22.0% for loans with an offset facility, +11.6% for interest-only loans, +1.6% for reverse mortgages, -16.6% for low documentation loans and -5.7% for other non-standard loans.  Importantly, the value of outstanding residential loans for low-documentation loans is now at a record low.</p>
<p><a href="/images/2016/03/Chart-2-3-580x207.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/03/Chart-2-3-580x207.jpg" alt=""></p>
<p>The data highlights that the average outstanding balance on a residential loan is $248,800, up by 1.0% over the quarter and by 4.4% year-on-year.  Reverse mortgages ($95,700), low-documentation loans ($192,800) and other non-standard loans ($195,900) all have much lower outstanding balances.  Meanwhile, loans with offset facilities ($303,700) and interest-only loans ($330,000) have significantly higher outstanding balances. </p>
<p>The year-on-year changes to the outstanding loan balances have been recorded as follows: +7.2% for loans with an offset facility (fastest year-on-year growth since June 2011), +4.9% for interest-only loans, +2.8% for reverse mortgages (slowest year-on-year growth on record), -1.5% for low-documentation loans and -6.8% for other non-standard loans.  The data shows a slowing in the growth of outstanding loan values for reverse mortgages while riskier lending types (low-documentation and other non-standard) have seen an ongoing fall in outstanding loan amounts.</p>
<p>While the previous data looked at the total value of residential mortgages outstanding, the following data focuses on new residential mortgages over the final quarter of 2015.</p>
<p>Over the December 2015 quarter there was a record-high $98.130 billion worth of new residential mortgages approved, $69.091 billion worth were owner occupied with the remaining $29.040 billion being for investment purposes.  Year-on-year the value of new owner occupier loans is 28.8% higher, its greatest change on record, while investor mortgage lending is -24.9% lower, its largest fall on record.</p>
<p><a href="/images/2016/03/Chart-3-3-580x212.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/03/Chart-3-3-580x212.jpg" alt=""></p>
<p>Looking at the types of mortgages approved over the quarter: a record low 0.3% were low-documentation, 37.0% were interest only which was its lowest proportion since March 2013, 0.1% were other non-standard loans, 47.4% were originated by third parties and 3.7% were loans approved outside of serviceability.</p>
<p>Focussing on the year-on-year change; low documentation loan approvals are -41.8% lower (their largest year-on-year fall since March 2013), interest-only loan approvals are -11.0% lower (their largest year-on-year fall since March 2009), other non-standard loan approvals are up 28.2% (their largest year-on-year increase since December 2013), third party originated loans are up 6.2% and loans approved outside of serviceability are up 41.3%.  The data indicates there has been a significant pull-back in low-documentation loans and interest-only loans. </p>
<p>At the same time, non-standard and loans approved outside of serviceability are rising significantly which may be a potential point of concern for APRA.  Although they make-up a small overall proportion of lending it will be something to keep a close watch on over the coming quarters especially since both have also recorded a quarterly increase.</p>
<p><a href="/images/2016/03/Chart-4-3-580x207.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/03/Chart-4-3-580x207.jpg" alt=""></p>
<p>Finally the data breaks out new lending by loan-to-value-ratio (LVR) bands.  Over the quarter, 23.4% of all new loans had an LVR of less than 60%, 53.4% had an LVR of between 60% and 80%, 14.5% had an LVR of 80% to 90% and 8.7% had an LVR of more than 90% which was its lowest proportion on record. </p>
<p>Looking at the year-on-year changes, the value of lending for LVRs of less than 60% was 16.1% higher, LVRs of between 60% and 80% increased 6.1%, LVRs of 80% to 90% increased 14.3% and LVRs greater than 90% fell by -20.1% which was the largest year-on-year fall June 2010.  Based on the data it is clear that lenders have been tightening lending requirements over recent quarters which has led to a sharp decline in new mortgage lending for LVRs above 90%.</p>
<p>Overall the data indicates that the market is responding to regulatory changes in the lending space implemented over the past year.  There is less new lending to high LVRs, fewer low documentation and interest-only mortgages being written. </p>
<p>On the other-hand some other potentially more risky lending types such as non-standard and outside of serviceability loans are continuing to rise.  It will be interesting to see whether APRA starts to look to crack-down on some of these types of lending in order to ensure stability within the mortgage market.</p>
<p><em>Cameron Kusher is research analyst for CoreLogic RP Data. You can contact him <a href="https://blog.corelogic.com.au/about/">here</a>.</em></p>
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ckusher-ujnxiKuFQs

APRA data shows a further tightening of lending standards: Cameron Kusher

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<div>
<em>60 Minutes</em> was an interesting talking point this week, wherein some American geezer claimed that he "could" have got a 95 per cent mortgage using a "fake income" by pretending to be a "gay couple".<br><br>OK. Given that he didn't actually get a mortgage written, it is a little perturbing how often people choose to believe what random punters say in preference to the actual data, but such is the nature of confirmation bias.</div>
<div>
<br>Household debt is high, no doubt, and some lending has been reckless, particularly in mining towns, but by the same token not everything that is claimed on the internet or elsewhere is true.<br><br>For example, some years ago bearish commentators got sucked in to believing erroneous figures which claimed that an incredibly high percentage of lending was 100 per ent mortgages.</div>
<div>
<br>Of course, the data sources quoted advertised loans rather than actual loans written, a rookie error that surely wouldn't pass the sniff test.<br><br>Another favourite trick is to tap a few notional numbers into a mortgage calculator and use this as "evidence" of irresponsible lending, conveniently neglecting to mention the key words "<strong>may</strong> be able to borrow". Clickbait ahoy!</div>
<div> </div>
<div><a href="/images/2016/02/25/Mortgage.jpg" target="_blank">Click to enlarge</a></div>
<div><img src="/images/2016/02/25/Mortgage.jpg" alt=""></div>
<div> </div>
<div> </div>
<div>
<div>It's one of the reasons I write blogs - not to get a readership, mainly just so I can stop annoying my missus by regurgitaing every blasted "fact" that I read in the media and on the internet.<br><br><strong><span style="text-decoration: underline;">APRA exposures data</span></strong>
</div>
<div> </div>
<div>Back in the real world APRA released its latest ADI Q4 2015 property exposures data today, which showed that the share of new loans whereby lenders extended a 90 per cent or more loan-to-valuation ratio (LVR) has continued its long and steady decline from more than 18 per cent in the March 2008 quarter to under 10 per cent in the December 2015 quarter.</div>
<div> </div>
<div>The share of loans whereby an 80 to 90 per cent LVR loan was advanced has also declined significantly over the last eight years from 20 per cent to only 14 per cent, meaning that the overwhelming majority of loans see a deposit of 20 per cent or more used. </div>
<div> </div>
<div>I'll just clarify that.<br><br>In aggregate high LVR lending has been in decline for years, while low-doc loans and other non-standard now loans represent just a small and rapidly declining fraction of new loans and total residential mortgage market exposures.</div>
<div> </div>
<div><a href="/images/2016/02/25/APRA2.jpg" target="_blank">Click to enlarge</a></div>
<div><img src="/images/2016/02/25/APRA2.jpg" alt=""></div>
<div> </div>
<div>
<div>Within the "big four" major banks 90 per cent plus LVR loans have fallen even more sharply from 21.6 per cent in 2009 to just 9.1 per cent, while 80 to 90 per cent LVR loans have declined from 22 per cent in 2011 to only 14.2 per cent. </div>
<br><div>
<strong><span style="text-decoration: underline;">Lending shifts to homebuyers</span></strong><br><br>If there is anything suspicious in the APRA figures related to lending standards, I believe it is in the incredibly smooth transition from investment loans to owner-occupier loans. </div>
<div> </div>
<div>The market has barely skipped a beat in recording remarkably similar headline quarterly data while the percentage share of loans conveniently swings from investors to homebuyers. </div>
<div> </div>
<div><a href="/images/2016/02/25/APRA1.jpg" target="_blank">Click to enlarge</a></div>
<div><img src="/images/2016/02/25/APRA1.jpg" alt=""></div>
<div> </div>
<div>
<span>Draw your own conclusions from that, but I'd hazard that some of these homebuyers may well be would-be investors sneakily veiled behind a Scooby-Doo mask.</span><br><br><span>The </span><em>60 Minutes</em><span> segment claimed that household debt is "exploding", and indeed the above chart shows that the total stock of outstanding credit has more than doubled since 2008.</span><br><br><span>However, the aggregate of outstanding household debt nearly always rises in an inflationary economy with rising household incomes and a strong population growth.</span><br><br><span>The truth is that after accounting for record high mortgage buffers and offset balances, the figures show that the household debt to income ratio is unchanged in Australia since 2008. Australia has a unique mechanism whereby loan repayments often continue at the same level when interest rates fall, as they have been since 2011.</span><br><br><em>60 Minutes</em><span> also claimed that "half" of all loans are interest only.</span><br><br><span>The true figure as revealed in APRA's figures today is 39 per cent - still too high for comfort, granted, but this mostly reflects tax strategy rather than that people "can't afford to pay the debt back", and the interest-only loans figure should theoretically now decline following the crackdown on investor lending.</span><br><br><span>The truth according to the Reserve Bank of Australia (RBA) research is that on average homeowners are miles ahead on home loan repayments, by fully two years which is an unprecedented margin. </span>
</div>
<div><span> </span></div>
<div>
<p><span><em>PETE WARGENT is the co-founder of <a href="https://allenwargent.com/" target="_blank" rel="nofollow">AllenWargent</a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank" rel="nofollow">blogger</a>.</em><br></span></p>
<p><em>His latest book is <a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx" target="_blank" rel="nofollow">Four Green Houses and a Red Hotel</a>.</em></p>
</div>
</div>
</div>
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