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Melbourne’s apartment market entered 2026 with renewed momentum, but the recovery is uneven, policy-driven, and increasingly shaped by constrained supply.

According to the RPM Apartments &amp; Townhomes Market Report (April 2026), apartments have begun to outperform detached housing on key metrics,yet that performance is occurring against a backdrop of falling approvals and a tightening development pipeline.

At the end of 2025, Melbourne unit values reached a three-year high of $656,500, recording quarterly growth of two per cent. That figure edged ahead of the 1.8 per cent growth recorded in the house market over the same period, marking a notable shift in relative performance. While modest in absolute terms, the outperformance is significant given the sustained dominance of houses through much of the previous cycle.

This shift has been driven in large part by policy. The federal government’s expanded five per cent Deposit Scheme has had a disproportionate impact on apartment demand, particularly in Melbourne where the $950,000 price cap captures a large share of medium- and high-density stock.

As RPM notes, the scheme “heavily favours medium and high-density dwellings,” effectively accelerating demand in the apartment sector.

The impact is most visible in buyer activity. Victoria recorded more than 43,000 new housing loans in Q4 2025, the highest quarterly volume since mid-2022 and one of the strongest results in over a decade. This lift was broad-based across all buyer types, with first home buyers, owner-occupiers and investors all returning to the market with greater confidence.

This surge in demand has flowed directly into apartment pricing, particularly in Melbourne’s middle and outer rings. Middle-ring unit values reached approximately $757,500, a four-year high, while outer-ring units climbed to a record $650,000. Quarterly growth of 2.9 per cent and 2.5 per cent respectively significantly outpaced both the inner ring (0.8 per cent) and the broader house market.

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<img alt="RPM" data-entity-type="file" data-entity-uuid="4628dde5-ad63-4b03-b18e-77d0f750e2aa" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-04-24%20at%209.23.32%E2%80%AFAM.png?VersionId=ig6mqc7Oz7UaszRuzULrGtLPUxGf4NJC" />

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The divergence between apartments and houses is also being shaped by affordability. Detached housing remains out of reach for many buyers, pushing demand toward apartments as a more accessible entry point into well-located suburbs. This is particularly evident among first home buyers and downsizers, both of whom are increasingly prioritising location, amenity and lifestyle over land size.

At the same time, population growth continues to underpin demand. Victoria added more than 122,000 residents in the year to Q3 2025, with Melbourne attracting both overseas migrants and interstate movers, partly due to its relative affordability compared to other capitals.

&nbsp;

<img alt="Population" data-entity-type="file" data-entity-uuid="49e10567-a8b3-47c3-afbd-290f0bb62c49" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-04-24%20at%209.22.25%E2%80%AFAM.png?VersionId=.2Drmko4TPh02X55JdF3mIC1EcG0ZfGl" />

However, the most critical factor shaping the apartment market is not demand, it is supply.

Apartment approvals across Greater Melbourne have fallen sharply, signalling a constrained pipeline of future stock. In Q4 2025, just 2,339 apartments were approved, down 20 per cent on the previous quarter and 47 per cent lower than the same period a year earlier. On an annual basis, 11,066 apartment approvals were recorded, an improvement on the previous year, but still well below medium- and long-term averages.

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This decline reflects a broader contraction cycle that has been underway since 2020. As RPM notes, “apartment approvals appear to be sliding back into a downward trend,” with developers increasingly focused on launching and completing existing projects rather than initiating new ones.

The reasons are well understood. Construction costs have risen more than 20 per cent since 2021, driven largely by labour shortages and material price escalation. At the same time, financing conditions have tightened, with lenders requiring higher contingencies and taking a more cautious approach to risk. Combined with recent interest rate rises, these factors have made feasibility more challenging, particularly for higher-density projects.

This dynamic is creating a disconnect in the market. Demand for apartments—particularly at the more affordable end—is strengthening, while the pipeline of new supply is weakening. In the short term, this may limit the number of new projects coming to market. Over the medium term, however, it is likely to support price resilience and potentially further outperformance relative to houses.

There are some signs of policy-driven supply response. The introduction of Victoria’s Mid-Rise Code, which streamlines approvals for four- to six-storey developments, is expected to improve delivery in well-serviced middle-ring locations. However, this is unlikely to materially offset the broader decline in apartment approvals in the near term.

Despite the positive momentum at the end of 2025, the outlook for 2026 has become more complex. Two interest rate rises early in the year have already impacted consumer confidence, while broader cost pressures, particularly energy and fuel, are feeding through to construction and development costs.

“Victoria’s built form market ended 2025 on a high, but early 2026 rate rises quickly reversed the momentum,” RPM notes.

The implication is that while apartments are currently outperforming houses, the trajectory of that outperformance will depend on how these competing forces evolve. Policy support and affordability are clearly working in favour of apartments, but constrained supply and rising costs are likely to shape the pace and nature of future growth.

What is increasingly clear is that apartments are playing a more central role in Melbourne’s housing market. As population growth continues and affordability pressures intensify, higher-density housing is becoming not just an alternative to detached homes, but a primary solution to the city’s housing needs.
</section>

Joel Robinson

Units lead Melbourne price growth as apartments outperform houses: RPM

Brunswick is set for some of its largest apartments ever delivered with the upcoming new development Frith &amp; Howarth, where the apartments are around 20 per cent larger than what has come before it in the sought-after suburb.

Developer Young Group focused its design on Frith &amp; Howarth around size and scale, but within a boutique building, to create a mini neighbourhood within the mid-rise development. There are just 24 apartments in the mid-rise building on Victoria Street, a short walk to Brunswick Station and the cafe and dining strip along Sydney Road.

“We spent hours comparing what’s currently on the market so we could offer genuine points of difference,” Young Group says, pointing to room sizing, storage, and functional planning as key drivers behind the design.

All of the two-bedroom apartments in the building have been snapped up, with just the large three- and four-bedroom apartments, with the biggest floorplans and best outlooks, remaining.

[smartcode_project:default project_id=134317 project_image_fid=354139]

Apartments open directly into open-plan living zones where full-height glazing draws light deep into the apartment. Sliding doors extend the space outward to terraces, many oriented toward the adjacent park or back toward the city skyline.

Kitchens sit within this central space, anchored by sculptural island benches that reference the building’s faceted exterior language. Storage is integrated across multiple layers, overhead cabinetry, concealed joinery, and, in larger configurations, dedicated sculleries or butler’s pantries.

[smartcode_project:default project_id=134317 project_image_fid=354137]

The penthouse is the largest ever offered in Brunswick. The penthouse measures nearly 400 sqm all-up, with 242 sqm of internal space complimented by a further 149 sqm of terraces.

It spans the whole top floor and has four bedrooms, four bathrooms, and parking for four cars.

[smartcode_project:default project_id=134317 project_image_fid=354133]

Low maintenance resident amenity has been created in the form of a landscaped rooftop, complete with&nbsp;vegetable plots, outdoor cooking areas, and aflresco dining spaces, designed as a place for neighbours to gather outside of their homes.

“To enable connection with neighbours, generous rooftop gardens with communal spaces and outdoor cooking areas offer a chance to develop a sense of community,” says John Patrick, Principal of <a href="https://www.apartments.com.au/landscape-architect/john-patrick-landscape-architects">John Patrick Landscape Architects</a>.&nbsp;

“Private open spaces with a selection of native and exotic plantings and gorgeous city views on the rooftop create a high-end aesthetic, with a low maintenance lifestyle. The perfect balance, so that residents can enjoy a serene living space.”

[smartcode_project:default project_id=134317 project_image_fid=354134]

Sustainability is embedded at both the building and apartment level. <a href="https://www.apartments.com.au/new-apartments/frith-howarth-288-290-victoria-street-brunswick-vic-3056">Frith &amp; Howarth</a> is one of only a small number of all-electric residential developments in Brunswick, supported by solar infrastructure, EV-ready parking, and high-performance glazing. These measures sit alongside less visible systems such as rainwater reuse and high-grade insulation, reducing long-term operational costs while maintaining consistent internal conditions.

Positioned within walking distance of Brunswick Station, Route 96 trams, and established retail along Sydney Road and Barkly Square, the development balances access to transport with proximity to open space, a combination that has become increasingly difficult to secure in inner-city sites.

“These exquisite homes are nestled in a culturally diverse neighbourhood, with parklands and nature right on your doorstep,” says Young Group.

[smartcode_project_cta:default project_id=134317]

Frith & Howarth to deliver Brunswick’s largest apartments

<a href="https://www.apartments.com.au/new-apartments/prince-parade-by-mirvac-brunswick-701-park-street-brunswick-vic-3056">Prince &amp; Parade</a> in Brunswick is entering its final stages of construction, with the removal of the project’s last tower crane and the unveiling of the building’s full façade marking a significant milestone ahead of completion this coming spring.

The Park Street development, designed by <a href="https://www.apartments.com.au/architects/bates-smart">Bates Smart</a>&nbsp;and Mirvac Design with landscaping by <a href="https://www.apartments.com.au/landscape-architect/jack-merlo">Jack Merlo</a>, is now largely structurally complete, with internal works progressing across the 169-apartment project opposite Princes Park.

<a href="https://www.apartments.com.au/builders/mirvac-construction">Mirvac Construction</a> Project Manager Sam Payne said the latest update reflects a transition from structure to refinement.

“Since our last update, all façade panels have been installed and the scaffolding and gantry has come down, unveiling the building in its full form for the very first time,” Payne said.

“A significant milestone was reached this month with the removal of our final tower crane, signalling the completion of major structural works and a pivotal step forward in the building’s transformation.”

[smartcode_project:default project_id=4802 project_image_fid=366856]

Apartments are now well advanced internally, with joinery completed to level eight and tiling to level six, alongside the delivery of a prototype apartment used to set the benchmark for the remaining residences.

This next phase coincides with the release of a completed furnished residence, styled by MCM House, and the introduction of private buyer tours, giving purchasers a clearer understanding of the finished product ahead of settlement.

<a href="https://www.apartments.com.au/new-apartments/prince-parade-by-mirvac-brunswick-701-park-street-brunswick-vic-3056">Prince &amp; Parade</a> will comprise 169 one to four-bedroom apartments, with completion targeted for early spring. Interiors focus on natural materials and muted tones with two design schemes, while kitchens and bathrooms adopt a restrained palette anchored by stone, timber and textured finishes.

Bates Smart Director Jeffery Copolov said the project reflects a shared design direction centred on liveability and sustainability.

“Blending Mirvac and Bates Smart’s focus on wellness and sustainability, <a href="https://www.apartments.com.au/new-apartments/prince-parade-by-mirvac-brunswick-701-park-street-brunswick-vic-3056">Prince &amp; Parade</a> offers a new kind of conscious, elevated living in Melbourne’s inner north,” Copolov said.

<a href="https://www.urban.com.au/new-apartments/prince-parade-by-mirvac-brunswick-701-park-street-brunswick-vic-3056">Prince &amp; Parade</a> presents Mirvac's third parkside collaboration with&nbsp;<a href="https://www.urban.com.au/architects/bates-smart">Bates Smart</a>&nbsp;in Victoria.&nbsp;Their previous collaborations delivered two of the city’s landmark apartment buildings: The Melburnian opposite Kings Domain and The Eastbourne on Fitzroy Gardens.

[smartcode_project:default project_id=4802 project_image_fid=366857]

A key focus of the development is its landscape-led amenity offering. The central courtyard, spanning around 600 sqm, will feature established trees and planting grown off-site, alongside communal lawns and seating areas designed for everyday use.

Development Manager James Gardner said the outdoor spaces are central to the project’s lifestyle positioning.

“<a href="https://www.apartments.com.au/new-apartments/prince-parade-by-mirvac-brunswick-701-park-street-brunswick-vic-3056">Prince &amp; Parade</a> isn’t just a home, it’s a complete lifestyle offering, and the resident amenity is just one example of the elevated living experience the soon-to-be-complete building will be known for,” Gardner said.

The courtyard connects to a series of shared indoor and outdoor spaces, including a residents’ lounge, dining room, library and secondary west-facing garden area, designed as extensions of the apartments themselves.

Located directly opposite Princes Park and around four kilometres from the CBD, the development places residents within one of Melbourne’s most established inner-north precincts, with access to open space, transport and the retail and hospitality offerings of Brunswick and Carlton.

With façade works complete and landscaping and final finishes now underway, <a href="https://www.apartments.com.au/new-apartments/prince-parade-by-mirvac-brunswick-701-park-street-brunswick-vic-3056">Prince &amp; Parade</a> is moving into its most active construction phase, with permanent services and external works to be finalised in the coming months ahead of completion in spring.

[smartcode_project_cta:default project_id=4802]

Mirvac’s latest landmark, Prince & Parade Brunswick, enters final construction phase

Boutique Perth developer ADC has unveiled its latest project.

The developer, which focuses on bringing apartments to some of Perth's most premium inner-city and riverside suburbs, has launched <a href="https://www.apartments.com.au/new-apartments/mos-lane-mosman-park-46-manning-street-mosman-park-wa-6012">Mos Lane</a>, 68 luxury apartments and townhouses in the heart of <a href="https://www.apartments.com.au/developments/mosman-park-wa-6012">Mosman Park</a>.

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Alongside the one-, two-, three- and four-bedroom apartments, the development will also include five two-level townhomes and two luxe penthouses. ADC is also introducing a significant retail offering for residents through Mos Lane Village, which will feature a wellness studio, fish and chips shop, barber, and florist, adding a layer of amenity not typically found in the predominantly residential Mosman Park area.

Construction has already commenced on the project, which sits just a short walk from the Swan River, Mosman Park Bowls Club, and Mosman Park Golf Course.

House Agency Directors Tom House and Lachlan McDonald say they are fielding the majority of buyer interest from local downsizers, as well as buyers with a long-standing affinity for Mosman Park.
</section>

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Mos Lane will comprise two buildings; Samson House and Manning House, which have been designed by&nbsp;<a href="https://www.apartments.com.au/architects/nelson-koo">Nelson + Koo</a>, an emerging design consultancy specialising in the masterplanning and design of mixed use places and spaces.

The two buildings adopt distinct architectural responses to their surroundings. Manning House references the strong roof forms of nearby homes, with floorplates oriented to maximise light and long-range views, while Samson House is organised around a central atrium designed to bring daylight deep into the building and create a greater sense of openness.

At ground level, the inclusion of five townhomes introduces a typology more commonly associated with Mosman Park’s established streets, each with private courtyards and direct frontage, offering a transition between traditional housing and apartment living.

[smartcode_project:default project_id=148957 project_image_fid=364103]

Interiors have been led by Melbourne-based Hecker Guthrie, with an emphasis on practical, long-term liveability. Residences incorporate sculpted joinery, generous storage and flexible multi-purpose rooms that can adapt to changing household needs, whether for working from home, guest accommodation or additional living space.

Material selections draw on a restrained palette of textured stone, timber and neutral tones, with options for lighter or darker schemes. Detailing such as fluted glass, full-height joinery and integrated appliances is intended to balance functionality with a more refined residential finish.

Outdoor spaces are a consistent feature across the development, with balconies and terraces designed for dining and entertaining, and larger apartments incorporating outdoor kitchens. Orientation has been considered to allow residents to choose between morning or afternoon sun, while mature street trees and landscaped communal areas contribute to a softer streetscape.

[smartcode_project:default project_id=148957 project_image_fid=364107]

Shared amenities are positioned to support both day-to-day convenience and occasional use. These include a private dining room with a caterer’s kitchen, alfresco entertaining areas, and a bookable guest suite for visiting friends and family. Additional practical features such as a resident workshop, storage facilities, car and pet wash areas, and concierge-style services for cleaning and dry-cleaning collection reflect a focus on usability.

Positioned between the Swan River and Cottesloe Beach, and within reach of schools such as Iona Presentation College and St Hilda’s Anglican School, the development is aimed at a broad buyer group, from downsizers seeking a lower-maintenance alternative to larger homes, through to local residents looking to remain in the area in a different housing format.

Mos Lane represents one of the more significant additions to Mosman Park’s limited pipeline, combining new housing supply with a village-style retail centre in a suburb where opportunities for large-scale redevelopment are relatively constrained.

[smartcode_project_cta:default project_id=148957]

Living village precinct set for Mosman Park as ADC launches Mos Lane

An entity linked to I&amp;D Group Founder Ivan Filipović has filed plans for a new residential development at 188–202 Swan Street in Cremorne, targeting a prominent site within the tightly held Swan Street activity corridor.

The proposal seeks to redevelop the consolidated Swan Street landholding into a <a href="https://www.apartments.com.au/new-apartments/188-202-swan-street-cremorne-vic-3121">high-density mixed-use project</a>, replacing a series of existing commercial buildings with a significantly scaled residential outcome. The planning submission positions the development as a response to increasing demand for housing in well-connected inner-urban locations, particularly within established activity centres.

Plans outline the construction of a 14-storey building delivering 165 apartments above a four-level basement, alongside a ground-floor retail and commercial offering designed to activate the streetscape. A key feature of the scheme is a new north–south pedestrian link connecting Swan Street to Railway Place, intended to “enhance permeability and provide an active, publicly accessible connection through the site.”

<img alt="First Look: Plans lodged for Ivan Filipović-linked Cremorne apartment project on Swan Street" data-entity-type="file" data-entity-uuid="7332a8f8-dd2b-483d-b86e-320658838c84" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/cremorne.png?VersionId=cXm8vAaRdHh.LpYVbecrRkjckgu9mtAF" />

The development will retain part of the existing built form at 198–200 Swan Street, while the remainder of the site will be cleared to accommodate the new structure. Basement levels will provide 196 car spaces and 113 bicycle spaces, with vehicle access from Railway Place. Communal amenity is distributed across the building, including a shared outdoor area on Level 1 and a rooftop terrace for residents.

Ground level uses include retail tenancies fronting Swan Street and the pedestrian link, a residential lobby, and a flexible commercial space positioned to support community-oriented uses. The planning report notes this space “could be offered as a flexible space within the development for community groups,” supporting short-term or longer-term occupancy arrangements.

<img alt="First Look: Plans lodged for Ivan Filipović-linked Cremorne apartment project on Swan Street" data-entity-type="file" data-entity-uuid="8208bf7b-cc67-485d-ad0f-1d73a74c907f" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/cremorne%20lane.png?VersionId=69ctjC0txXv0zCHy7qQUpJyGwvPAT7gw" />

The site sits within the Swan Street Major Activity Centre, surrounded by a mix of retail, hospitality, and emerging residential development, and directly opposite tram services along Swan Street. East Richmond Station is located to the south, providing strong rail connectivity, while the broader Cremorne precinct continues to evolve as a mixed-use hub.

I&amp;D Group, founded by Ivan Filipović, is regarded as one of Victoria’s largest formwork contractors, partnering with major construction firms across large-scale public and private developments. The Swan Street proposal signals a move into development-backed opportunities tied to strategic inner-city sites.

First Look: Plans lodged for Cremorne apartment project on Swan Street

Mark Bouris

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The Mark Bouris-chaired Yellow Brick Road has received a takeover bid from veteran corporate raider Sir Ron Brierley's Mercantile Investment Company.
Mercantile advised it was offering to buy Yellow Brick Road for 9c a share in cash - a 3.2 per cent discount to where the stock traded before the bid was made.
Bouris said the bid was “opportunistic.”
He advised shareholders to take no action.
Mercantile owns almost 20 per cent of the poorly performing YBR.
"YBR shareholders who accept this offer will no longer be exposed to the risks and uncertainties of remaining a YBR shareholder," the Mercantile statement said.
"Mercantile OFM and its associates are disappointed with the financial performance of YBR. Mercantile OFM and its associates first acquired a relevant interest in YBR in November 2016, paying $0.145 per YBR share. Since then, the YBR share price has declined by 35.9 per cent," the statement said.
After Mercantile, which holds 19.9 per cent of YBR, the next largest shareholders are Bouris' Golden Wealth Holdings, which has an 18 per cent stake, and the Nine Entertainment Group, which holds 17 per cent.
Yellow Brick Road Holdings Limited says it is on track to become the leading non-bank financial services company in Australia by 2020.
Mr Bouris said the bid was "opportunistic in its nature, timing, pricing."
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j.ballantyne1990-6AQqhLzZaK

Takeover bid by Brierley for Yellow Brick Road

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Financial services company Yellow Brick Road boss Mark Bouris says “very, very big demand” exists for interest-only loans since the new limits were placed on the banks.
And Bouris wants to step in and fill the gap in the market left by the banks.
The financial services company doesn’t have the ability to provide interest-only loans, instead sending inquiries off to other non-bank lenders while clipping the ticket on the way.
“We don’t have the funding lines to do those particular interest-only loans. We are looking to create the capacity, we’re more than looking,” Mr Bouris told The Australian.
"There are unregulated institutions from around the world and locally that are talking to various people about funding these asset classes that the regular banks don’t want or are unable to lend to."
Interest-only loans accounted for 30 per cent of all new mortgages last quarter, down from 36 per cent in the March quarter, according to figures released by APRA earlier this week.
The company swung to a $1 million after tax profit for the financial year ended June 30 from a $9.5 million loss in the previous year, with executive chairman Mark Bouris saying the smaller lender was well placed to cope with a property market slowdown than bigger rivals.
The strong result was achieved through cost cuts and an increase in loan volumes. 
“The work we’ve done in recent years to expand distribution, increase efficiency and diversify revenue has paid off and allowed us to deliver our maiden profit, even in the face of a tough lending environment,” Bouris said.
He added that despite the volatility of the sector, both loan volumes and revenue had grown. 
Full-year revenue was up 1.6 percent to $218.6 million.
“With these fundamentals in place, we are extremely well-positioned to win in this market,” he said. 
Commenting on the outlook, Bouris said he saw “opportunities for non-bank lenders in the current, tighter credit conditions, and we are considering ways to increase margins in this environment”. 
The group is working on a learning and development platform, which Bouris said was “unlike anything else in the industry”. 
It will boost business skills, technical knowledge and – ultimately - professional standards in the sector, he added.
The 16.7 percent loan growth YBR achieved could be lower due to a slowing residential market but Bouris said the residential market's move to a "healthy, sustainable" level of growth would be good for the whole lending industry.
Only recently, he had said in a column that there was no need to get spooked out by the recent talk about Australia’s housing market bubble set to burst, especially after CoreLogic data pointed to prices dropping, but rather it maybe that the market is taking a breather.
"We're young and new so we will continue to grow – maybe not at the same pace but at a similar sort of pace as we've grown before, so we're not too worried about that," he told The Australian Financial Review after the results announcement.
"I'd be worried if I had a $500 billion book – I'd be starting to get concerned about that – but I don't have that at this stage."
The lender’s underlying loan book picked up to $44.1 billion from $37.8 billion a year earlier, with  wealth management revenue growing 6.9 per cent to $10.4 million.
Bouris said cost cuts had helped profitability. YBR said expense costs narrowed to $18.9 million from $25.7 million the previous year.
The company did not declare a dividend.
Earlier this month, Yellow Brick Road appointed former Macquarie banker Frank Ganis to its board. Mr Ganis, who recently left Macquarie after 28 years, was a pivotal player in building the mortgage securitisation sector in Australia in the 1990s.
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jonathanchancellor-7SQnKwU6yx

Yellow Brick Road eyes offering interest only loans

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There is no need to get spooked out by the recent talk about Australia’s housing market bubble set to burst, especially after CoreLogic data pointed to prices dropping, but rather it maybe that the market is taking a breather, says a leading industry executive.
The CoreLogic data that came out last week showed a slight dip in prices. But most of the headlines were about two cities: Sydney and Melbourne, says Mark Bouris, the executive chairman of wealth manager Yellow Brick Road.
“We need to remember that prices have been going gangbusters there for more than five years,” he said in a column in Fairfax Media.
Also, Australia is a patchwork of very different markets. In May, prices rose in Brisbane and Adelaide, while values in Perth and Darwin fell. 
“And that doesn't take into account all the regional areas, where things such as employment and infrastructure have a big impact on housing prices,” adds Bouris.
“If you only read the headlines, it's easy to get spooked about property. But based on the latest data, we aren't talking about a bubble bursting or prices falling off a cliff – we're seeing the market take a breather. After all, it's been running at full tilt for a while now.”
For owner-occupiers, the implications could be that if there has been good capital growth and then one might want to tap into your home equity to buy another property.
Some lenders have pulled back on investor loans, thanks to pressure from the banking regulators, but the tap hasn't been turned off altogether, he says.
“The key is to be sensible. Think about "serviceability" – making sure you have the income to cover an investment loan, especially if it's negatively geared.
“And don't overextend by getting the biggest loan possible – choose something you can still afford if interest rates increase or rental income flatlines.”
For investors, a “less frothy market” means the need to look harder for the right property, he advises. 
One needs to pay close attention to the fundamentals such as the area’s supply and demand for housing.
“Supply is one half of the equation, so look at things such as development application (DA) approvals to see how much is in the pipeline.
“On the other hand, demand is influenced by population growth and where jobs are coming from – so make sure it's an area people want to be in,” he adds.
A lot of this data is publicly available using sources such as the Australian Bureau of Statistics. 
“Think of it as a business decision and do your homework properly.”
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Property market taking a breather: Yellow Brick Road's Mark Bouris

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Mark Bouris, executive chairman of Yellow Brick Road, says borrowers need to vote with their feet.
"Quite simply, if the banks ratchet up rates and costs, go elsewhere and borrow from another lender," he wrote in his weekly Fairfax column.
He noted the property federal budget bank levy goes back to 2008, when a financial crisis was building and the four major trading banks – plus Macquarie Bank – wanted assistance from the federal government to stabilise our financial system.
"The government – actually, the taxpayer – guaranteed Australian deposits at deposit-taking institutions, up to $250,000.
"The banks also got a governmentguarantee over some bank debt and an ongoing facility up to $180 billion, which gave the banks access to very cheap debt.
"This new levy is 0.06 per cent of this government-guaranteed facility – it’s a very low charge for allowing banks to reduce their overseas borrowing costs and therefore, make bigger profits.
"So why would the bank charge you for giving it access to the cheapest capital?," he asked adding we’ll see what the banks decide to do – absorb the levy or pass it on.
He told borrowers there are only five banks being taxed with the levy.
"But have a look at a comparison website and you’ll see many lenders out there, from credit unions and building societies to small and regional banks, as well as loans offered by mortgage brokers and other financial services players.
"On any week, there can be a 1 per cent difference in interest rate between the lowest cost and most expensive standard variable mortgages.
"Why pay more than you should?"
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Mark Bouris says look for the 1 percent difference in available mortgage rates

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The celebrity businessman and host of Channel 9's The Celebrity Apprentice, Mark Bouris, says he will fire himself if his business, Yellow Brick Road does not make a profit this financial year.
Bouris made the bold declaration to the Australian Financial Review's Chanticleer columnist Tony Boyd in today's paper.
It comes at a time when the share price bounces around at 15 cents, near its record low of 13.5c. 
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The fall in the stock over the past two years has left the group with a market cap of just over $40 million, down from about $200 million at its peak.
The mortgage lender and wealth manager made its stockmarket debut in 2011 with the kid from Punchbowl, in Sydney’s south-west, having the aim of taking on the banks, but YBR shares have crashed more than 75 per cent during the past two years. 
YBR’s recent $9.5 million ­annual loss came despite increasing its revenue 31 per cent to $218 million. 
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In early 2014 Bouris said YBR was “on track” to deliver its maiden profit during that ­financial year.
The recent $9.5 million loss was nearly tripling the previous year’s loss of $2.6 million.
The company has lost a cumulative $36.9m over the six years since its listing which saw Bouris joined on the register by Mineral Resources founder Chris Ellison and chief executive Peter Wade, pastoralist John Kahlbetzer and Navitas boss Rod Jones.
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Bouris plans to open 40 new branches in the next year.
It has $700 million funds under management.
"Our foot was on the pedal, metaphorically speaking, right as the market cooled this year,” Mr Bouris said, explaining the result.
Along with recent acquisitions, YBR has spent millions on advertising during the housing boom to grab a bigger slice of the market.
YBR acquired the non-bank lender Resi Mortgage in 2014 for $36 million and then took over mortgage aggregator Vow Financial for $17.6 million.
Over the past 12 months, it has spent $5.3 million on advertising and marketing with The Celebrity Apprentice largely functioning as a lengthy ad. 
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Last week the accounting entrepreneur, Brett Kelly made an off play for the company, while saying the YBR wealth management strategy will never work.
Kelly, who owns the country's fastest-growing network of accounting firms, says people buying low value mortgages from YBR's network of 40 branches do not have enough money to make the YBR wealth management strategy profitable.
An investor update issued last week by YBR suggested its competitive advantage as scaling lending, with $38 billion in mortgages under management, distribution scale with 1500 credit representatives and brand equity, which it credited as much stronger than it competitors.
While Kelly believes that Bouris has done well to build a strong finance business, he maintains that Australians with money for wealth management do not go to mortgage brokers or any of the big four banks.
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Last week Kelly tried to grab a stake in YBR whose two biggest shareholders are Macquarie Group and Nine Entertainment Co.
Macquarie and Nine each owns a 20 per cent stake in YBR and both are strategic partners of YBR.
Macquarie supplies YBR with mortgage loans while Nine has been supplying a certain amount of free advertising as part of a contra deal from 2012 worth $6.5 million.  
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Bouris admitted to Chanticleer that his reputation is at stake in the quest to build YBR into one of the country's largest independent financial firms. 
The Australian newspaper reported last month that investors had lost patience in Yellow Brick Road, the listed ­financial services firm he founded in 2007 after Bouris had overhauled YBR’s structure twice this year.
Bouris, who owns more than 51 million shares, took home $1.6 million in remuneration from YBR last year, a substantial cut from the previous year’s $5.6 million.
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The reduction in pay also came with more responsibility as the latest restructure cut five senior positions.
The Australian noted YBR has paid millions in advisory fees to BBB Capital and Golden Wealth Holdings.
BBB Capital is an investment advisory group founded by Mark Bouris and his brother Adrian, both of whom sit on the YBR board.
BBB Capital has collected $2.2 million in fees from YBR over the past six years, while Golden Wealth, an entity controlled by Mark Bouris, has been paid $3.9 million in consultancy fees from YBR over the same period.
Last month YBR ­announced the sale of the wealth division’s accounting business and legal practice to the former owner David Carr for nearly $2 million, with a consideration of an extra $2.8m over the next five years.
“I’m going to spend the next two to three years driving into hitting our capacity,” Mr Bouris recently told The Weekend Australian.
“I’m gonna be working a lot harder than I’ve ever worked,” he said.
“Not everyone necessarily wants to do that but that’s the way I run things. And if they don’t want to do it they can leave …
“I’m interested in people who will roll their sleeves up and get things done and actually go to the branches and see the customers. I don’t care if it’s me or the CEO — they’ve got to go and do it.”
Mr Bouris put down the collapse in the YBR stock price to the state of the market clinging to yield stocks, or companies that pay out generous dividends, and said investors weren’t rewarding ambition.
“The market is looking for yield. We’re a growth stock. Our aim is to take market share from our competitors. And I don’t make any apologies for that.”
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jchancellor-FAypfDUnLy

Mark Bouris says he will fire himself if YBR doesn't make a profit

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We've all marvelled at the amount of information on the internet and the speed with which we can compare available products.
Nowhere has this access to information been better exploited than in financial services, where you can use websites to make cheap share trades, find the best priced mortgage and get travel insurance that saves you heaps.
But although e-commerce is now normal, Australians still distinguish between low cost convenience transactions, and high value strategic decisions. For most people there's still a divide between the ease of technology and the need for advice.
But how do you decide whether to buy online or use a broker or adviser?
One criterion might be size and importance.
Australians can search for mortgages online and apply over the phone. However, the Mortgage and Finance Association of Australia has found that of the growth in the mortgage market in the year to June 2014, 61% was driven by brokers. That was a 32% increase on the 2013 figure. Clearly, Australians like interaction with an expert when they take on their biggest debt.
The opposite is the case when applying for credit cards and operating bank accounts. For these transactional interactions we're comfortable to use the internet and call centres to administer our daily banking.
Consumers also transact directly online with their super and their share portfolios. This seems to work best with users who have good knowledge of the options and understand the choices.
Insurance is another matter. If you've been insuring your car for years, a quick price comparison on the internet can prepare you for buying more insurance over the phone or online at renewal time.
However, many insurances are strategic parts of life planning, and they need expert advice.
Even simple insurance such as home and contents has to be managed so you're never underinsured, and you aren't paying for things you don't need and being excluded from the cover you do need.
More than half of retail insurance premiums are written by advisers and brokers, probably because Australians think about insurance once a year and they need someone who thinks about it every day.
The advantage you get with an adviser is obvious in life insurances which include death cover, total permanent disablement (TPD), trauma and income protection. You can buy tax-friendly life policies in your super fund. But when you use an independent adviser, you can buy cover for your circumstances, with tailored inclusions and exclusions.
Life insurance issuers rarely have more than one top product line and premium at a time, with deals changing to showcase different products. Some insurers are strong in some occupations. An independent adviser knows this. Luckily, it isn't a choice between the internet or advice. The trick is to use both, according to their strengths and your needs. What do you favour? Internet or advice? I'd love to hear what you think.
Mark Bouris is executive chairman of wealth management company <a href="https://www.ybr.com.au" target="_blank">Yellow Brick Road</a>, which sells financial advice and home loans.
You can contact Mark on <a href="https://www.twitter.com/markbouris">Twitter</a>.
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mbouris-tauSvXGAM2

Should you get your mortgage online or use a broker?

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When rates are low, prices usually rise and first home buyers can feel shut out. 
But all is not lost if you stick to a few simple tips.
<ol>
<li>Deposit: Lenders want to see you have at least 5% of the purchase price as genuine savings (generally you'll need 10 per cent overall). You can top up with money from your parents or grandparents, but you have to show at least six months of your own savings. Start saving, now. </li>
<li>Savings: Set a goal for your deposit amount and save in a high-interest savings account that's separated from household expenses. Set a weekly deposit goal, use direct crediting and if you're a couple, have one person's income going directly into savings. </li>
<li>Reduce debt: Eliminate or reduce the limits on your credit cards and store cards. Lenders look at the limit on your cards, not your balance. </li>
<li>Grants: The First Home Owners Grant can help with your purchase. But it must be for a new home construction; you can't use it to buy the land and lenders will not treat the FHOG as part of genuine savings. Do your homework because the grant differs slightly between states. </li>
<li>Income: Lenders like to see stability and want to see evidence that you will repay the mortgage. So you should demonstrate at least six months (but preferably one year) of PAYG employment, or two years of financials and tax returns if you're self-employed. </li>
<li>Shop around: You can find variable rate mortgages in the range of 4.6 per cent to 6 per cent. The 1.4 per cent difference, on a 350,000 loan over 30 years, is worth more than $300 a month. </li>
<li>Marketing: Watch for "discount" mortgages and special low offers. The low rates last for a year or two and then revert to a much higher rate. Always look at the "comparison rate". </li>
<li>Fixed: Many first-home buyers like to balance their budget for a few years, and a fixed loan creates certainty. However, once in a fixed loan, your flexibility is restricted and you may encounter break costs if you want to sell or refinance. </li>
<li>Vary it: Variable rates fluctuate with the market but they are flexible, allowing you to repay higher amounts and deposit lump sums from bonuses and tax refunds, speeding your repayment. You can refinance a variable rate loan without penalty. </li>
<li>Offset: When you put all your income into a mortgage offset account, the balance pays down the mortgage by the amount you have in there each day. It stops interest capitalising against you as fast as monthly repayments. Offset accounts suit good budgeters. </li>
<li>Price: Don't be disheartened if you can't buy what you want - buy the next-best and build a strategy for your next property. </li>
<li>Advice: Mortgage brokers are excellent for insights, strategies and getting you a good result. They're worth talking to. </li>
<li>Always remember: When borrowing money and buying property, the same basic rules apply to everyone. So do your homework, be prepared, take some advice and go for it.</li>
</ol>
Mark Bouris is executive chairman of wealth management company <a href="https://www.ybr.com.au/" target="_blank">Yellow Brick Road</a>, which sells financial advice and home loans.
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13 simple tips to help first home buyers save for a deposit

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There’s something of a home loan ‘rate war’ going on at the moment, which can be great for borrowers. But it also creates pitfalls for the unwary.
Take some mortgage advertising I saw this week: it promoted a variable mortgage rate of 4.65% but beside it was a ‘5.21% comparison rate’.
Look at the difference: on a $300,000 25-year mortgage at 4.65% your total interest bill is $207,941. But if you pay 5.21%, your costs total $237,198. The difference between what’s calculated from the headline offer and the actual costs over the long-term is around $30,000.
This type of advertising is a common marketing device. The low interest rate is merely an ‘introductory rate’ which in this case lasts three years. And after three years the home loan reverts to a much higher rate.
So given the current interest rate cycle it’s a good time to discuss the comparison rate. The ‘comparison rate’ is a legislated requirement brought in by the federal government. It was introduced in 2003 at a time when ‘honeymoon rates’ were popular and advertised interest rates were not informing borrowers about the true long-term cost of their home loan.
It’s quite difficult for average borrowers to calculate what they really pay over the long-term if they pay one rate for, say, two years and then revert to a ‘true’ rate for the next 23 years.
So to resolve the confusion the government mandated a formula that all mortgage lenders must use in their advertising. It includes unavoidable fees and charges, and interest rates over a set period, which creates the comparison interest rate.
Because all lenders have to use the same formula, the result gives a borrower the means to compare the true cost of a loan before they commit to it, and it gives some reality to the headline interest rate.
This regulation set by the government is important, but it only goes so far. The key to getting the right loan is for you as a consumer to take this information and act on it. The law says that a comparison rate must be co-located with the promotional rate, and with the same prominence. But a comparison rate is useless unless borrowers are looking at it and registering what it means. In talking to people, I often find that consumers misinterpret the comparison rate as “X” lenders best rate compared to “Y” lenders best rate. This is not at all the case.
When you look down the most affordable variable rate loans (4.6%-4.8%) at a site such as RateCity, you see that those lenders with the best ranking have comparison rates almost identical to their advertised rates – that is, the rate they advertise is basically what the borrower will pay. But other loans only start at 4.6%, before reverting to something much higher.
Consumers are easily confused by the terminology and practices of the financial services industry. So if you’re searching for something as important as a mortgage, and a comparison rate gives you a chance to level the playing field, you really must pay attention.
Mark Bouris is Executive Chairman of wealth management company <a href="https://www.ybr.com.au" target="_blank">Yellow Brick Road</a>.<a href="https://www.ybr.com.au/"> </a>
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What the comparison rate really tells you about your mortgage

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Have a look at a home loan comparison website and you’ll see a growing number of variable rate mortgages are now below 5%.
With mortgages this affordable you could refinance out of an old expensive loan and into a low cost one; and it’s also a good opportunity to repay more than you have to – to build up equity more quickly.
But a lot of people are asking if the low rates mean it’s time to buy an investment property?
Firstly, I suggest potential investors separate their thinking between the mortgage interest rates and the investment itself. Long after variable rates have returned to normal levels, you’ll probably still own this investment and it should make financial sense.
The point of an investment property is to harvest the ‘total gross yield’ – that is, you want the property to produce rental income and capital growth. You want enough rental income to help pay the mortgage and meet costs month-to-month, and you want sufficient capital growth so that over time it becomes a more valuable asset.
If you can achieve a 5% per annum rental yield and the average growth in the suburb is 3% per annum, you have an 8% gross yield. But there are many things that can vary this result.
Does the property need renovations? Is it maintenance-intensive? Will you use a property manager? Is it close to amenities such as schools, shops and train stations and likely to be sough-after by tenants? All of these things will affect your yield over the long term, and property is a long-term game.
There’s really no substitute for homework – you must have a clear view about ownership costs.
You also have to think about negative gearing, which is a tax rule that allows you to take any losses on the property and use them to reduce your taxable income, thereby reducing your taxes.
This brings us to the cost of your mortgage. Many people want to buy an investment property simply because they can, but the cost of entry isn’t the end of the discussion.
The investment mortgage has to be repaid from income, while most people are also funding the family home loan from the same income. Even if negative gearing gives you a small tax break, you have to calculate if you could afford to pay the investment property mortgage if the rates moved upwards by, say, 2%, or 3%.
Fixed rate mortgages only give you breathing room for the term of the fixed rate – they don’t make rising interest rates go away.
Low interest rates make it affordable to buy, but you have to know what it costs to own it, which means understanding where interest rate rises will leave you.
And, a final hint: the best property investments are made at purchase. Try to buy a property at a good price, with low maintenance, in a high-demand area, where prices are just starting to pick up. Be patient and do your homework.
If you buy well, you’ll do well.
Mark Bouris is executive chairman of wealth management company <a href="https://www.ybr.com.au" target="_blank">Yellow Brick Road</a>.
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