National Australia Bank (NAB) will fund <a href="https://www.apartments.com.au/new-apartments/palmera-residences-gold-coast-18-garfield-terrace-surfers-paradise-qld-4217">Palmera</a>, a $1 billion, 52-level luxury residential tower being developed by Central Equity in one of the Gold Coast’s most tightly held coastal locations at Northcliffe.

The project, launched recently by <a href="https://www.apartments.com.au/developers/central-equity">Central Equity</a>, one of Victoria’s largest private residential developers, comes at a time when construction funding for large residential developments has become increasingly competitive as lenders tighten exposure to the sector.

Multiplex has been appointed the builder, and construction is now underway.

[smartcode_project:default project_id=108274 project_image_fid=365784]

Since its first project, Central Equity has delivered more than 85 residential developments with a combined end value exceeding $8 billion.

Palmera reflects Central Equity’s growing focus on the Gold Coast luxury apartment market and continues a relationship between Central Equity and NAB that dates back to the late 1980s, when the bank funded one of Melbourne’s earliest inner-city residential towers at a time when high-rise apartment living in the CBD was largely unproven.

“NAB’s funding of Central Equity’s $36 million CBD development in the late 1980’s to the financing of the billion-dollar tower today highlights the long-term relationship between the two organisations in delivering major residential projects” said Central Equity Founder and Chairman Eddie Kutner.

He said NAB’s early support was instrumental in helping establish the company’s development model.

“When we commenced our first residential tower in the late 1980s the concept of funding off-the-plan apartments was still largely untested in Australia,” Kutner said.

“NAB recognised the opportunity early and supported the project when others were uncertain. That relationship has now continued for more than 37 years across many developments.”

[smartcode_project:default project_id=108274 project_image_fid=365771]

Central Equity was established in 1987 when Melbourne’s CBD and Southbank precinct were still dominated by warehouses and commercial buildings. Fewer than 100 residents lived in Southbank at the time, and large-scale residential development in the inner city was not widely considered.

Recognising changing demographics and lifestyle preferences, the company began developing high-rise residential projects designed to bring permanent residents into the city centre.

Central Equity has provided accommodation for approximately 40,000 residents across Melbourne’s CBD and Southbank, while also incorporating supporting infrastructure including essential lifestyle facilities like retail spaces, childcare facilities and neighbourhood activity centres.

Central Equity has spent many years assembling the Palmera development site on the corner of Garfield Terrace and Frederick Street in Northcliffe, creating a supersite of around 3,300 sqm.

The developer said the Palmera apartment tower reflects its long-term view of the Gold Coast as a growing and increasingly diversified economy.

[smartcode_project:default project_id=108274 project_image_fid=365768]

Supported by infrastructure including the light rail network, major road upgrades expanded education, hospital and medical facilities and continued expansion at the Gold Coast Airport with more internation and domestic flights.

Positioned in the tightly held Northcliffe precinct, the 52-level tower will deliver 347 apartments, targeting buyers seeking a high-end coastal lifestyle, from downsizers to interstate investors.

Designed by Marchese Partners with interiors by DBI, Palmera has been conceived as a next-generation residential offering, featuring a collection of oversized apartments, with premium three-bedroom residences offering sweeping northern views stretching from Surfers Paradise through to Burleigh Heads.

[smartcode_project_cta:default project_id=108274]

Joel Robinson

NAB funds $1 billion Surfers Paradise apartment development, Palmera

Two years after completing one of the newest developments in North Sydney, developer <a href="https://www.apartments.com.au/developers/aqualand-australia">Aqualand</a> is turning its attention to the rapidly evolving St Leonards apartment market.

The developer, which completed AURA by Aqualand on North Sydney's Walker Street, has lodged plans for a 5,918 sqm site at <a href="https://www.apartments.com.au/new-apartments/33-37-herbert-street-st-leonards-nsw-2065">33-37 Herbert Street, St Leonards,</a> seeking approval for a pair of residential towers rising above a shared podium opposite Royal North Shore Hospital.

The proposal forms part of the broader transformation underway across the St Leonards-Crows Nest precinct, where former industrial and commercial sites are increasingly being redeveloped into high-density mixed-use projects tied to major transport infrastructure.

<img alt="Aqualand" data-entity-type="file" data-entity-uuid="2cc428cf-fe70-4cac-9cd5-264ad53af62c" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%209.51.56%E2%80%AFAM.png?VersionId=otKSnHtbjAvAddOnovyXQMgcAwE6DMe1" />

According to the planning documents, the site sits “within the St Leonards–Crows Nest Strategic Centre, identified by the NSW Government as a key area for accommodating future jobs and housing across Sydney.”

The proposal has been designed by fjcstudio, formerly FJMT Studio, and is being progressed through the State Significant Development pathway due to its scale and affordable housing provision.

The scheme would comprise 413 apartments, including 46 affordable housing units, alongside retail and commercial uses fronting Herbert Street. The project would also include communal open space, landscaping, a swimming pool, gymnasium, children’s play areas and podium-level resident amenities.

Planning documents show the development would consist of a part-13, part-39 storey tower form positioned above a four-storey podium.

“The development comprises a unified podium that activates the street interface, and two setback towers to accommodate new housing supply while maintaining an appropriate human scale at ground level,” fjcstudio noted in its Design Report.

The northern and southern towers have been shaped to respond to the surrounding skyline while also limiting overshadowing impacts to nearby public open space, particularly Talus Reserve.

The design report said the differing tower heights were intended to “contribute to a varied skyline while responding to the surrounding built form context and solar access considerations.”

<img alt="Aqualand" data-entity-type="file" data-entity-uuid="36da62dc-ff9e-41f2-a7e3-7be38373751c" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%209.51.45%E2%80%AFAM_0.png?VersionId=Mo6Rp2r.XRLTzIfg_PEEpw8NepDH8UBs" />

The site sits directly opposite Royal North Shore Hospital and within walking distance of both St Leonards Station and the new Crows Nest Metro station.

While the site itself sits just outside the formal Crows Nest Transport Oriented Development boundary, the planning documents repeatedly reference its alignment with the broader TOD objectives reshaping the Lower North Shore.

“The site is located adjacent to St Leonards Station and in close proximity to Crows Nest Metro which is within the Crows Nest Transit Orientated Development Accelerated Precinct which has been identified by the NSW Government to support housing delivery,” the Design Verification Statement noted.

According to fjcstudio, the project has been designed to respond to the broader transition occurring across St Leonards, where increasing residential density is being concentrated around transport infrastructure and employment hubs.

“The broader precinct is undergoing significant change, with a mix of existing mid-rise buildings and newer high-density developments,” the report stated.

“Recent and approved projects indicate a consistent shift toward taller built form, typically organised as tower-and-podium typologies with more active ground levels.”

The proposal includes close to 6,000 sqm of retail and commercial space across the ground floor and podium levels, designed to create a more activated street edge along Herbert Street.

Aqualand’s plans would also introduce a landscaped podium shared between the two towers, with communal open space in the form of a podium rooftop designed to support resident interaction and improve urban greening outcomes. The scheme would also introduce pocket parks at the northern and southern ends of the site, including a landscaped area at the corner of Herbert and Ella streets designed to improve pedestrian amenity and soften the streetscape.

&nbsp;

The proposal is being progressed through the NSW Government’s Housing Delivery Authority pathway, which was introduced to accelerate housing supply across the state. The application was declared State Significant Development in April 2025 following an expression of interest process.

<img alt="Aqualand" data-entity-type="file" data-entity-uuid="faf6d97d-2671-454f-b85a-fe1c6a7be608" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%209.51.49%E2%80%AFAM.png?VersionId=diVd28OBVr5.YV.7prrOz.uAanwwwm7a" />

St Leonards has been particularly active with new developments in recent weeks. Developer SP Setia’s <a href="https://www.apartments.com.au/news/nsw/first-look-sp-setia-targets-st-leonards-skyline-with-40-storey-tod-tower">plans for a new 42-storey tower</a> recently went on exhibition through the same pathway, while <a href="https://www.apartments.com.au/news/nsw/first-look-stockland-plans-52-storey-538-apartment-st-leonards-tower">Stockland’s 52-storey tower proposal</a> was also recently unveiled.

Aside from the St Leonards project, which is expected to take around nine months to move through the approvals process ahead of a potential 2027 launch, Aqualand is also preparing to launch Boronia, a new apartment project in Roseville comprising around 111 apartments on Larkin Street.

The developer also has approvals in place for the next stage of the Barangaroo precinct, which will feature new residential, retail, hospitality and community uses, alongside a new metro entry across the five-hectare site.

More than 50 new retail destinations are planned for Central Barangaroo, alongside a 270-metre-long boulevard connecting Hickson Park to Nawi Cove. Together with Harbour Park, more than 50 per cent of the precinct will comprise public open space and parkland.

First look: Aqualand joins St Leonards apartment party

<section data-scroll-anchor="false" data-testid="conversation-turn-5" data-turn="user" data-turn-id="e65dbe94-e3b6-47f7-b62a-9cbb30c9bf79" data-turn-id-container="e65dbe94-e3b6-47f7-b62a-9cbb30c9bf79" dir="auto">Time &amp; Place’s plans to transform the former David Jones factory building in Surry Hills into a mixed-use residential precinct have gone on exhibition through the NSW Government’s In-fill Affordable Housing pathway.</section>

<section data-scroll-anchor="false" data-testid="conversation-turn-6" data-turn="assistant" data-turn-id="request-WEB:f4d533b7-64a5-413d-86fd-5c99649c2b73-2" data-turn-id-container="request-WEB:f4d533b7-64a5-413d-86fd-5c99649c2b73-2" dir="auto">
The Marlborough House proposal, lodged for the <a href="https://www.apartments.com.au/new-apartments/marlborough-house-47-97-marlborough-street-surry-hills-nsw-2010">47-97 Marlborough Street</a> site, would see the adaptive reuse of the heritage-listed warehouse building alongside the construction of new residential additions and a separate apartment building on the northern portion of the site.

The proposal seeks approval for 172 apartments across three buildings, including 15 per cent affordable housing managed by a community housing provider for at least 15 years from occupation.

<img alt="Marlborough" data-entity-type="file" data-entity-uuid="5d1d3c2a-bf13-47d6-a335-7c01102cdee1" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%209.29.36%E2%80%AFAM.png?VersionId=cjMYrbR.BLUlWH4dar0RVDDo0bG.u2YT" />

Interior view from the Northern Building Penthouse overlooking the park

&nbsp;

The redevelopment is planned for the prominent 3,413 sqm site bounded by Marlborough Street, Goodlet Street and Lansdowne Street, directly opposite Eddie Ward Park and around 200 metres from the Surry Hills light rail stop.

Time &amp; Place acquired the former David Jones building in 2024, marking the first time the property had changed hands in around 50 years.

Designed by Wardle, the proposal centres around the adaptive reuse of the former David Jones factory, originally constructed between 1913 and 1935 in the Inter-War Chicagoesque architectural style.

Wardle noted in its Architectural Design Report that the building “occupies a significant place in the industrial and cultural history of Surry Hills” and at its peak was “the largest department store manufacturing facility in Australia, employing over 800 people and fuelling the growth of Sydney’s fashion and retail industries.”

The practice said the project positions itself “not as an isolated intervention, but as a contributor to the civic, social, and architectural grain of the precinct.”

The proposal would deliver 75 apartments within the retained southern heritage building, 59 apartments within the central addition, and a further 38 apartments within the new northern building fronting Lansdowne Street.

Planning documents show the scheme would comprise a mix of heritage apartments, new-build apartments, townhouses and penthouses.

<img alt="Marlborough" data-entity-type="file" data-entity-uuid="57758518-40a3-4b83-958c-d06e96a2cffa" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%209.29.42%E2%80%AFAM.png?VersionId=VerlX9ST5xgBi8.1_YRsqdWTJeT6ygjs" />Interior View of the Heritage Building Apartment

The development would also include a ground-floor retail tenancy on the corner of Marlborough and Lansdowne streets, rooftop communal open space, a landscaped pedestrian link along the western edge of the site, and basement parking accessed from Lansdowne Street via a car stacker system.

&nbsp;

The scheme emerged from a competitive design process run by Urbis, with Wardle ultimately selected as the winning architect ahead of FJC Studio, TZG, Architectus and Wilkinson Eyre.

The Design Integrity Panel later described several aspects of the Wardle scheme as fundamental to the project, including “the stepped character of the new addition to the north of the site”, the landscaped western pedestrian link, and the “garden arrival” experience separating the original Marlborough House from the heritage addition.

Wardle’s design heavily references the site’s industrial and heritage history, while also responding to the surrounding Surry Hills streetscape.

The Architectural Design Report describes Surry Hills as “a finely grained neighbourhood with beautiful and expressive brickworks throughout the suburb,” with the proposal introducing a material palette intended to sit comfortably alongside the existing warehouse fabric and neighbouring terraces.

The report also outlines the project’s relationship with Eddie Ward Park and the broader landscape context of the area.

“Marlborough House occupies a site of deep cultural memory and the neighbouring Eddie Ward Park is of local ecological significance, where natural systems, topography, and stories have long shaped human experience,” Wardle noted in the report.

The architects said the proposal sought to “rebind built form to Country” through landscape, materiality and the adaptive reuse of the heritage structure.

<img alt="Marlborough House" data-entity-type="file" data-entity-uuid="9ae3f2f9-c85f-477a-a6f8-b43f6cb97c41" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%209.29.53%E2%80%AFAM.png?VersionId=B.qUCLqRvJOR.n9CvYcTpaknIX9LuqKZ" />

The project is also being progressed under the NSW Government’s in-fill affordable housing provisions, allowing developments that include affordable housing to access additional height and floor space incentives.

Under the plans, 2,593 sqm of the project’s floor space would be dedicated to affordable housing, slightly exceeding the required 15 per cent threshold.

In its Design Excellence Strategy, Urbis said the project aimed to “sensitively adapt and enhance the heritage-listed building on site through alterations and additions that preserve its historical significance” while delivering “high-quality market and infill affordable housing development in Surry Hills.”

Time &amp; Place has been one of the most active developers nationally in the last 12 to 24 months. Late last year they completed&nbsp;The Queensbridge in&nbsp;<a href="https://www.apartments.com.au/developments/southbank-vic-3006">Southbank</a>, a mixed-use tower with 353 apartments and a hotel. They are currently selling Park Modern, 246 apartments near the famous Botanic Gardens in&nbsp;<a href="https://www.apartments.com.au/developments/south-melbourne-vic-3205">South Melbourne</a>, and have future projects, <a href="https://www.apartments.com.au/new-apartments/the-wilmot-173-burke-road-28-hope-street-glen-iris-vic-3146">The Wilmot</a>&nbsp;in&nbsp;<a href="https://www.apartments.com.au/new-apartments/glen-iris-vic-3146">Glen Iris</a>, the redevelopment of the Northcote Plaza, and another tower in South Melbourne.

The developer broke into Sydney just a few years ago with Two Tides in Manly. They have another project nearby, which is at the ultra-luxury end of the market on&nbsp;<a href="https://www.apartments.com.au/buildings/shoreline-manly-beach-89-90-north-steyne-manly">North Steyne</a>, fronting the beach.

It is also continuing to work through the <a href="https://www.apartments.com.au/news/nsw/first-look-time-place-settles-on-design-for-the-chimes-potts-point-redevelopment">redevelopment of The Chimes building</a> on Macleay Street in&nbsp;<a href="https://www.apartments.com.au/developments/potts-point-nsw-2011">Potts Point</a>, as well as a project on <a href="https://www.apartments.com.au/news/nsw/time-place-to-take-on-mosman-apartment-market">Mosman's Redan Street</a>.
</section>

First look: Time & Place unveils Marlborough House redevelopment designs for former David Jones warehouse in Surry Hills

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

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

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

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

Loans

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Westpac will require new property investors to have a deposit of at least 20%, as APRA controls are starting to take effect.
According to the Australian Financial Review, Westpac will from yesterday cap loan-to-valuation ratios (LVRs) for new property investor loans at 80%.
It is the toughest limit imposed by a major bank so far as ANZ Bank introduces its 90% cap on LVRs for investor loans. National Australia Bank last month capped investor home loan LVRs at 90%, while the Commonwealth Bank has advised it will not take the tax breaks investor borrowers receive from negative gearing into account when LVRs on investor loans exceed 90%.
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jchancellor-FAypfDUnLy

Westpac tightens lender borrowing as APRA controls take effect

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Investment loans nationally declined in June from their earlier peak, with figures for June showing investment loans down to 36.9% when compared to the April highs of 43.1% of all mortgages processed.
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According to the AFG Mortgage Index a similar trend was felt across all states, with investment loans in Queensland down to 34.1% from 36.1%, Western Australia from 31.8% to 31.2%, Victoria from 36.5% to 35.7% and South Australia from 41.8% to 36.8% 
New South Wales fell the furthest, down to 41.6% from May's figure of 49.8%. During the past year investment loans in NSW held an average of 49.5% of all loans.
AFG managing director Brett McKeon said if this trend continues, it should help allay concerns about overheating in Sydney in particular, as investment levels come back into line with the sustainable, long term, national average.
 “These figures suggest that APRA controls are starting to take effect, but not at the expense of the overall mortgage market,” Mr McKeon said. 
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mick.cee-iDmgDDAmu8

June investment loan figures pull Sydney into line: AFG

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Mortgage brokers, Mortgage Choice has reported property investor loan approvals have dipped to a 20-month low.
The proportion of its loan approvals going to property investors fell from 34% in May to 30% in June, the lowest share since late 2013, chief executive John Flavell told Fairfax Media.
He said it was the first data pointing to a slowdown in investor lending triggered by banks' tougher credit policies.
John Flavell also noted the changes to credit policies were having an impact on some first-home buyers trying to enter the market as property investors. 
"It doesn't knock out the foreign investor. It doesn't knock out middle-aged, middle Australia with heaps of equity access and excess income and high tax. 
"It knocks out the people who are trying to get in," he said. 
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Investor loan volumes dip: Mortgage Choice

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<img src="/images/2015/06/25/Holdencapital_banner.jpg" alt="">
SPONSORED POST
Nine reasons why developers fail to secure finance quickly or at all
1.     You expect banks/lenders to fund your project.
Whilst banks and lenders generally have clearly defined policies outlining what they can and cannot do, it is not automatic that just because your loan fits within their policy that they will fund it. This is particularly true in the current market with the volume of sound projects that we are seeing since the residential markets picked up in 2014. Lenders are being more selective and do not have to fund every project that lands on their desk, so It is imperative to present your project in the right way to motivate the lender to do the deal from the start, even after they hear about the 1 or 2 leniencies you might require or those boundaries that HCAP as your advisor are pushing to get you a better deal. Remember, approval is not automatic, we need to create a desire by the lender to be a part of your deal
2.     You negotiate terms before giving the lender the chance to understand the deal.
Similarly, it is understandable that everyone wants a good deal on finance, but starting the finance discussion by asking for or even dictating the terms you want before we or the lender know anything about your project or your capabilities to deliver it, is a fast road to disappointment. Borrowers with this approach have a long road in front of them to reach their destination. Any financier/broker/real-estate-agent can over-promise and under-deliver, and for some people that matches perfectly because they just want to be told what they want to hear. Smart developers are patient and understand that by firstly explaining their motivations and background and then providing the transaction details, including all the pros and cons (and their means of dealing with them), provides us with a reason to want to do the deal. Once this is established, we are motivated to provide competitively priced terms that reflect the relevant risks and meet the required timeframes. This then allows you to get on site quickly and do what you do what you hopefully do best, develop properties. So, explain first, ask later.
3.     You don’t have a genuine reason why you are doing the project.
As Henry Ford said “A business that only makes money, is a poor business”. Doing a project just because you out-bid a bunch of other developers to win it or because you own it and think it’s a good idea is not a reason of itself. Regardless of the state of the market cycle, site selection strategy differentiates the elite from the amateur developers. It is surprising how many developers base their acquisition strategy on being “friendly” with a few agents. Being close to the top of an agents speed dial list isn’t the sustainable business model a financier wants to hear. The elite developer identifies his target locations based on researching the demand supply due diligence he undertakes. They then scour the area (some literally go door to door having cups of tea) to capitalise on opportunities because to succeed they know that they need to understand the better sized lots on which to fit the best number of product per square metre of land; the neighbourhood plan and what they can push council for relaxations on; what the marketers can achieve in terms of sales rate per month from launch and all the other key issues that will ensure a viable project. Essentially, living and breathing a location and knowing where you can push and pull the boundaries to make a project to stack is the key. These smarter developers wear their ‘why’ on their sleeve and you can see it in the way they approach their business. These guys lead the market while the rest follow and some get left behind. Be strategic and have purpose if you want to be successful.
4.     There are gaps in your capability to deliver the deal but “you will find a way”.
Developers who have this problem, which can be financial or capabilities, fall into two categories; those who know it and are looking for someone else to solve their problems; and those that don’t. Whilst it can be admirable to see these people invest heavily in a project, it is also a concern. Frankly, those that don’t know they have a problem often never get it and like many things in this world, you can’t change them no matter how hard you try, so best to walk away. But for those who do understand their deficiencies there can be a solution if they are willing to listen and adapt. The secret is, understanding what you can do and being prepared to let others do what you cant. It is this second part, which is the hardest because it usually means that you have to give something up and that usually comes at a cost and can be both financial and some cases, control. This is probably the hardest process to undertake and the one that most often results in costly mistakes, by all concerned. To get the deal done, all parties concerned need to understand their strengths and weakness’ and be prepared to compromise to achieve a positive result. Quite often 50% of something is better than 100% of nothing.
5.     Can you control the key delivery elements of the project? 
An often seen issue is the inability for developers to recognise that they don’t have all the requisite skills to complete a project “in-house”. Property development is a complex process that requires many skill sets and even the elite developers know when to hire in the right professionals to help them out. Often a developer will try and bolt on skill sets to bolster their capabilities which is great, but having someone apply their time/service on an “all care no responsibility” basis is higher risk for you as the developer and us as a lender/investor in your project. As a lender/investor, we would much rather see you try and get their interests aligned with yours. Nearly all consultants will offer their time for a fixed fee or a per month rate, but if their services are a critical part of your delivery process why not incentivise them to the end objective which is a completed and profitable project? As an example, rather than paying $10k/month for 18 months ($180k), why not $6k/month ($108k) and a $120k performance bonus payable when there are surplus sales proceeds after repayment of the project debt. This ensures that person/company is very motivated to see the overall project succeed and is tied to the ultimate goal, which is profit. If an external party is critical to the project success, try to align their interests with yours.
6.     A one-page feasibility is not a “Finance Application” end of topic, just don’t do it. Ever.
7.     You’re not crunching your numbers over and over and over again.
Elite property developers constantly crunch their numbers over and over again to be sure they are not missing anything. They acquire or construct their own spreadsheets that allow them to continually refine price points, costs and timeframes as they gather more and more due diligence about these elements of their deal and they never stop the process. When asked questions about these elements, they have a good grip on their base case as well as optimistic and worst case results. Those who struggle often can’t tell you their break-even point per product, their cash flow requirements from now until project settlement, or marketing aspects like cost per lead and conversion rates to unconditional presale. If you want to impress us and the lender. Know your numbers.
8.     You don’t have a strategic and sustainable business model.
In addition to seeing that you have a purpose, a financier wants to see your business plan. It’s not all just about the one deal. Yes, sometimes a project is a once off because an owner decides to redevelop a site, but these are few and far between. In most cases you are intending to undertake multiple transactions and the lender wants to understand your ability to maintain sustainable flow of profitable transactions. So, what will you do for the next 18-24 months until that last apartment is sold and you have seed money again? How does your business grow? Cash is oxygen to any business and a lack of it limits growth potential. Developers often have A&amp;L statements showing all their capital invested in two or three projects and they can’t do another project until all the stars align and they get their money back from their current workload. What they also need to see is a carefully considered group cash flow that demonstrates how you are using your capital strategically and that you can do another project within the window of the current market cycle (maybe partner with a capital provider like Queen Street Invest). Again, show you have purpose, are a sustainable player and not a one-project wonder.
9.     Underprepared marketing and sales strategy.
Probably the single most common mistake we see from developers is a failure to understand the importance of and difference between marketing and sales and how to use the right resources. It doesn’t matter that you have secured the best team of professionals such as town planner, architect, builder and other technical support, if you don’t know how to tell the market about your product and you don’t have a team of skilled negotiators to secure sales, you can’t make a profit other than by accident! Time and again we see a blind faith in the reliance on local agents or ill-conceived marketing strategies that results in a failure to meet everyone’s expectations, often with catastrophic results. Remember, you don’t make a profit until the final sales are sold and settled. The secret is to do your homework and appoint professionals based on their proven expertise. As noted earlier, ensure that they are properly incentivised and that their remuneration is tied to the project profit! Don’t be afraid to spend money on marketing and sales, understand the difference, how and when to use them and why they are the key to delivering your profit.
To find out more about which option best suits your next project, contact Dan Holden at HoldenCAPITAL on 0401 669 502 or visit HoldenCAPITAL <a href="https://www.holdencapital.com.au/" target="_blank">here</a>.
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Nine reasons why developers fail to secure finance quickly or at all: Holden CAPITAL 

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The Commonwealth Bank of Australia has informed mortgage brokers that new borrowers' existing debts and their incomes are to be assessed more stringently.
CBA will apply a servicing loading of 20% to all repayments on existing home loans and lines of credit held by customers.
The 20 per cent loading means repayments that were assessed at $1000 a month will now be assessed at $1200 a month.
CBA also said it would accept only 80% of income from overtime, bonuses, and investment income when it is assessing home and investment loan applications. 
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<div class="cq-article-content-media section">The maximum loan-to-valuation ratio for all owner-occupied home loan applications would be 95%, compared to currently allowing LVRs of up to 97%, including the cost of mortgage insurance.</div>
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Overtime income won't count as much as CBA tightens home loan lending

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As at 31 March 2015, the total of residential term loans to households held by all authorised lenders was $1.30 trillion, according to the latex March quarter 2015 APRA figures.
This is an increase of $23.9 billion (1.9%) on 31 December 2014 and an increase of $107.1 billion (9%) on 31 March 2014. 
 Owner-occupied loans accounted for 65.4% of residential term loans to households.
Owner- occupied loans were $852 billion, an increase of $12.7 billion (1.5% on 31 December 2014) and  $57.3 billion (7.2% on 31 March 2014). 
Investment loans accounted for 34.6% of residential term loans. Investment loans were $450.2 billion, an increase of $11.2 billion (2.6%) on 31 December 2014 and $49.8 billion (12.4%) on 31 March 2014. 
<img src="/images/2015/05/26/apra1.jpg" alt="">
The latest lending data suggests lenders are generally meeting the 10% growth restraint sought by APRA, though some still to sufficiently rein in the pace of investor loans.
It has been suggested more than 82% of investor lending remains within APRA’s macro prudential growth target (not materially above 10%).
While a number of lenders are comfortably below this range (around 12% of market share) and have scope to increase their exposure to housing investors, some lenders are tracking well above APRA’s macro prudential target growth range. 
The 10 per cent benchmark is not a hard limit, but is a key risk indicator for supervisors in the current environment. 
The benchmark has been established after advice from members of the Council of Financial Regulators, taking into account a range of factors including income growth and recent market trends.
ADIs with greater than $1 billion of residential term loans held 98.4% of all residential term loans as at 31 March 2015. These ADIs reported 5.3 million loans totalling $1.28 trillion.
Of these loans: the average loan size was approximately $243,000, compared to $235,000 as at 31 March 2014; $479.1 billion (37.4%) were interest-only loans; and $30.1 billion (2.3%) were low-documentation loans.
New housing loan approvals with ADIs with greater than $1 billion of residential term loans saw approval of $82.3 billion of new loans in the quarter ending 31 March 2015. This is a decrease of $10.9 billion (11.7%) on the quarter ending 31 December 2014 and an increase of $8.5 billion (11.5% on the quarter ending 31 March 2014.
Of the new loan approvals $51.9 billion (63.0%) were for owner-occupied loans, a decrease of $6.5 billion (11.2%) from the quarter ending 31 December 2014; $30.4 billion (37.0%) were for investment loans, a decrease of $4.4 billion (12.6% from the quarter ending 31 December 2014; $34.8 billion (42.3%) were interest-only loans; $9.1 billion (11.1% had a loan-to-valuation ratio greater than or equal to 90%; and $0.6 billion (0.7%) were low-documentation loans. 
 
<img src="/images/2015/05/26/apra2.jpg" alt="">
 
It was December 9 last year when tthe Australian Prudential Regulation Authority (APRA) wrote to authorised deposit-taking institutions (ADIs) outlining further steps it plans to take to reinforce sound residential mortgage lending practices. 
These steps have been developed following discussions with other members of the Council of Financial Regulators.
In the context of historically low interest rates, high levels of household debt, strong competition in the housing market and accelerating credit growth, APRA has indicated it will be further increasing the level of supervisory oversight on mortgage lending in the period ahead.
Las December APRA advised it did not propose to introduce across-the-board increases in capital requirements, or caps on particular types of loans, to address current risks in the housing sector.
However, APRA flagged to ADIs that it will be paying particular attention to specific areas of prudential concern.
These included:
<ul>
<li>higher risk mortgage lending — for example, high loan-to-income loans, high loan-to-valuation (LVR) loans, interest-only loans to owner occupiers, and loans with very long terms;</li>
<li>strong growth in lending to property investors — portfolio growth materially above a threshold of 10 per cent will be an important risk indicator for APRA supervisors in considering the need for further action;</li>
<li>loan affordability tests for new borrowers — in APRA’s view, these should incorporate an interest rate buffer of at least 2 per cent above the loan product rate, and a floor lending rate of at least 7 per cent, when assessing borrowers’ ability to service their loans. Good practice would be to maintain a buffer and floor rate comfortably above these levels.</li>
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In the first quarter of 2015, APRA supervisors indicated they would be reviewing ADIs’ lending practices and, where an ADI is not maintaining a prudent approach, may institute further supervisory action.
This could include increases in the level of capital that those individual ADIs are required to hold.
APRA Chairman Wayne Byres noted that while in many cases ADIs already operate in line with these expectations, the steps announced last December would "help guard" against a relaxation of lending standards and, where relevant, prompt some ADIs to adopt a more prudent approach in the current environment.
‘This is a measured and targeted response to emerging pressures in the housing market. These steps represent a dialling up in the intensity of APRA’s supervision, proportionate to the current level of risk and targeted at specific higher risk lending practices in individual ADIs’ he said.
‘There are other steps open to APRA, should risks intensify or lending standards weaken and, in conjunction with other members of the Council of Financial Regulators, we will continue to keep these under active review.’
The steps announced today build on the enhanced monitoring and supervisory oversight of residential mortgage lending risks that APRA has put in place over the past year, which has included a major stress test of the banking industry, targeted reviews of ADIs’ residential mortgage lending and the release of detailed guidance to ADIs on sound residential mortgage lending practices.
APRA’s heightened supervisory focus on lending standards is being conducted in conjunction with the review of interest-only lending announced by the Australian Securities and Investments Commission (ASIC).
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Property investor lending running at 12.4% annual growth: APRA

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If APRA enforce’s the assessment of a new mortgage holder’s ability to pay down their mortgage obligations the right way, it would cause a heavy blow to the Australian economy. The base assumption is that mortgage stress starts when more than 30% of household income is used to pay down the mortgage. Most households with new financing are already experiencing this stress at record low rates.
In Australia’s instance, and based on after tax income, households would only be able to borrow 3.64x the household income (unless the household already has other debt commitments) if the 7% servicability rule was to be property enforced. The only way to safely assure that new mortgage holders would be able to absorb 7% interest on a new mortgage is if it is based on the ability of the mortgage holder to manage 7% interest rates after income tax and all other debts taken into considerations have been factored in….unless you allow for dodgy measurements which Australian lenders are good at using.
<img src="/images/2015/05/25/lf_economics.jpg" alt="">As the above figure illustrated, this would mean one heck of deleveraging event in Australia if new borrowers borrow significantly less than the previous borrowers which would break down Australia’s Ponzi household lending business. Had the RBA not taken abnormal measures to save the housing market now on two occasions in the last seven years, Australia would not be in this problem so far down the road. Until then, hardly a shred of chance APRA will act tough. Like it’s associates at the RBA, talk is talk and data is data. And both have been managing a bubble, not an economy. That’s what the data tells us.
Lindsay David is the author of <a href="https://www.amazon.com.au/Australia-Australian-Credit-Property-Bubble-ebook/dp/B00JJ7UW0S/ref=sr_1_1?ie=UTF8&amp;qid=1410612321&amp;sr=8-1&amp;keywords=australia+boom+to+bust" target="_blank">Australia: Boom to Bust</a> and <a href="https://www.amazon.com/Print-Central-Bankers-Lindsay-David-ebook/dp/B00TMHEDBY/ref=sr_1_1?ie=UTF8&amp;qid=1423979661&amp;sr=8-1&amp;keywords=print+the+central+bankers+bubble" target="_blank">Print: The Central Bankers Bubble</a>. David recently founded <a href="https://www.lfeconomics.com" target="_blank">LF Economics</a> and holds an MBA from IMD Business School. He blogs at <a href="https://blog.australiaboomtobust.com" target="_blank">Australia Boom to Bust.</a>
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LindsayDavid-WEhfyLvNJJ

APRA won't act tough, just talk on property investor lending: Lindsay David

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Ramping up its supervision after the surge in property prices to the investor driven east coast property markets, Australian Prudential Regulation Authority chairman Wayne Byres has indicated the authority was aware of lending examples that were less than prudent.
“So there is no confusion, let me be clear that Australian ADIs (authorised deposit-taking institutions) are thankfully well away from the types of subprime lending that have caused so many problems elsewhere (for example, lending with an loan-to-value ratios in excess of 100 per cent, at teaser rates, to borrowers with no real capacity to repay),” he said.
“Nevertheless, our overall conclusion from this hypothetical borrower exercise was that there were clearly examples of practice that were less than prudent,” he told the recent Customer Owned Banking Association event, which was not open to media, but reported by The Australian.
“Authorised deposit-taking institutions with more aggressive practices should fully expect to find APRA increasingly at their doorstep," he said.
Meanwhile major lenders have been withdrawing discount offers extended to brokers on property investment loans. 
The Australian Broker website revealed today that two major banks have amended pricing discounts available to standard variable rate and fixed rate investment loans.
It is all part of the Australian Prudential and Regulatory Authority clamp down on current high lending levels of property investor loans.
National Australia Bank has also flagged a reduction in the discounts offered to property investor loans following the APRA request to keep investor loan growth below 10% per annum.
Available funds will be cut back "by at least a third" within weeks, John Symond, the founder and chairman of Aussie Home Loans believes as banks react to the regulatory authorities.
"Banks are going to be knocking back a lot of investor applications," <a href="/expert-insights/investing/tougher-apra-set-to-restrict-property-investor-lending-by-at-least-a-third-john-symond">he told Ross Greenwood on the 2GB Money News program this week</a>.
The Commonwealth Bank has reviewed its $1,000 Investment Home Loan Rebate Offer. “We will honour the offer for all Investment Home Loan applications, created by close of business on Friday 15 May,” the email read. The CBA announced reduced pricing discounts offered on investor loans, while stressing "heavier discounts very much remain available for Owner Occupied lending”. The ANZ head of third party relationship channels, Kieran Evans advised ANZ is carefully managing its home loan business to ensure its portfolio grows in a balanced way. “As a result, we will be introducing a range of changes to how we manage investor lending effective immediately,” he said. For customers with investor only lending, ANZ will only offer advertised rates – discretionary pricing will be not be available, the major said.
However, for customers with existing owner occupier lending with ANZ, the major will offer discretionary pricing on investor loans. Further, to offset the removal of investor switching discretions, Evans said ANZ have increased the owner occupier discretion to $1,200 and have reduced the eligibility to greater than $500,000.
Bankwest has made it harder for investors to secure loans, as APRA’s campaign on lending standards is taking effect.
Bankwest will now apply a maximum LVR of 80% for investment purposes, including property and shares, a departure from the bank well known for accepting investor loans up to 98% LVR.
The value of home loans written in March jumped 3.8 per cent to $31.3 billion, up 11.7 per cent over the year.
The March rise was principally by investor lending, up 6.4 per cent.
On an annual basis, investor loans were up 20.9 per cent rate, which was more than double the 10 per cent speed limit identified by APRA regulators earlier this year.
Banks have also been re-assessing the rental income levels that they are calculating when taking into account overall income of investors.
And making it tougher Westpac also foreshadowed changes which will impact investors’ serviceability with the bank removing negative gearing benefits from its servicing calculator.
FOR INFORMATION ON PROPERTY LOANS, RATES AND MORE, VISIT MOZO.COM.AU OR <a href="http://propertyobserver.com.au/forward-planning/tools/ebooks-and-webinars/42368-get-loan-savvy-expert-tips-for-a-first-time-investment-or-refinancing-loan-in-a-free-ebook" target="_blank">CLICK HERE</a> FOR THE FREE PROPERTY OBSERVER EBOOK, GET LOAN-SAVVY – TIPS FOR A FIRST TIME, INVESTMENT OR REFINANCING LOAN, WHICH HELPS YOU DECIDE ON A HOME LOAN THAT MEETS YOUR REQUIREMENTS. 
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