A Moroccan-bathhouse residential tower has been unveiled for Budds Beach, with Australian developer <a href="https://www.apartments.com.au/developers/homecorp">Homecorp</a> announcing plans for a $260 million resort-style project in one of the Gold Coast’s most tightly held waterfront precincts.

A development application has been submitted to the Gold Coast City Council for a 27-storey tower at 8-10 Acacia Avenue and 25-27 Oak Avenue, Surfers Paradise, marking one of the few new large-scale residential projects proposed for the precinct in more than a decade.

The project will comprise 156 two- and three-bedroom residences, anchored by a residents-only Moroccan spa-inspired wellness sanctuary featuring private treatment rooms, a traditional Nordic sauna and steam room, hot and cold plunge pools and a curated juice bar. There will also be a resort-style rooftop precinct, complete with a heated infinity pool and spa, a residents’ lounge with a private kitchen and bar, a contemporary fitness centre with a yoga and Pilates studio, and outdoor BBQ areas with entertaining lounges.

<img alt="8-10 Acacia Avenue and 25-27 Oak Avenue, Surfers Paradise" data-entity-type="file" data-entity-uuid="997f8dbb-4ed1-47e4-8780-d12a3d5cd0e9" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Article%20Feature%20Image%20%28Grid%29_3.png?VersionId=IsDJXxE8.HG92i4dnbmmPQi.fVXjME7I" />

"At Homecorp, we are driven by the pursuit of better - challenging expectations, thinking bigger and shaping communities that leave a lasting legacy," said Ron Bakir, CEO and Founder of Homecorp.

"This project draws on our experience and expertise to take what the market has been craving to the next level - a home that nurtures wellness, calms the mind and lifts the everyday stresses away. A home is more than a place you live, it’s where you rest, reset and find balance."

&nbsp;

Bakir says what sets the location&nbsp;apart is its rare, tightly held nature within one of the Gold Coast’s most vibrant lifestyle and entertainment precincts, yet quietly tucked away in a peaceful, beachside enclave.

"Budds Beach has remained exceptionally limited in supply over the past decade and this site presented an unmatched opportunity to deliver something truly special to both Surfers Paradise and the Gold Coast.”

Conveniently connected to major roads and the G:link, residents will enjoy easy access to Surfers Paradise, Broadbeach and Burleigh Heads, while still being just minutes from the city’s most iconic beaches and the Broadwater’s ‘golden mile’.

The 2130 sqm site acquisition adds to Homecorp’s growing Gold Coast multi-storey portfolio on the Gold Coast, following the success of Eve Residences in Labrador upon its completion in November 2024. In 2025, Eve earned multiple national accolades and went on to win ‘Best Oceanview Condo Development’ in the Asia Pacific region at the PropertyGuru Asia Property Awards Grand Final, outperforming entries from more than 13 prestigious international markets.

The company also commenced construction last year on the highly anticipated $250 million second stage of Cienna Varsity Ridge, set to deliver 289 residences by 2027 in the heart of Varsity Lakes, and launched the $210 million Florence Residences along Surfers Paradise’s Monte Carlo Avenue to the market, with construction kicking off last month.

"The property market is constantly evolving, particularly here on the Gold Coast, which continues to outperform national trends thanks to its unmatched lifestyle, natural beauty and growing infrastructure, especially ahead of the Brisbane 2032 Olympics. We are proud to be adding more homes to the skyline, creating spaces that are not only designed for liveability but also nurture wellness within. They are homes that are built to last a lifetime and beyond," concluded Mr Bakir.

The project is set to launch to the market later this year.

Joel Robinson

Homecorp lodges plans for $260 million Moroccan bathhouse-inspired tower in Budds Beach

What began as a leap of faith in the 1970s has evolved into one of the Gold Co​ast's most enduring development success stories. Raptis, now led by second-generation developer Evan Raptis, continues to shape the region's skyline four decades after patriarch Jim Raptis first ventured north from Sy​dney.

Jim Raptis began developing in Sy​dney in his 20s under the guidance of a seasoned mentor. After several successful joint ventures, he sensed untapped potential on the Gold Coast and made the bold decision to relocate. That instinct proved prescient, the Raptis family has contributed thousands of apartments to what was once purely a tourist destination and is now recognised as Australia's lifestyle capital.

[smartcode_project:default project_id=101620 project_image_fid=361818]

With decades of experience navigating the complex Gold Coast development landscape, Raptis maintains fully vertical integration, from site acquisition and construction through to marketing and sales strategies. This comprehensive approach has allowed the company to weather multiple market cycles and emerge well-positioned for the region's continued growth.

"We've seen the region change drastically over the last two decades, with that change accelerating in the last five years," says Evan Raptis. "The Gold Coast is becoming unrecognisable. There are some exciting projects happening up and down the coast. The Spit is being talked about as Australia's version of Monaco, with billions in development underway."

Unlike the volatile pre-GFC years that rocked the Gold Coast market, Raptis believes the region has matured considerably. "Demand remains strong, but the market is now settled and stable."

[smartcode_project:default project_id=101620 project_image_fid=361823]

While the company recently completed Pearl Main Beach, an 84-apartment development just 53 steps from the sand, Broadbeach has truly been home for the Raptis family.

"There's nothing Broadbeach doesn't have," Raptis says. "There's always a new café or restaurant coming into the neighbourhood, and the redevelopment of the Niecon Plaza, bringing nearly 5,500 square metres of retail, dining and office space, will only elevate Broadbeach even further."

[smartcode_project:default project_id=101620 project_image_fid=357483]

The suburb has reached what Raptis describes as a "settled phase" of its evolution, with owner-occupiers and repeat visitors increasingly shaping demand rather than traditional investors.

The company's latest Broadbeach project, Sterling, is now constructed to level 22 and scheduled for handover in June 2026. With approximately 70 per cent of apartments already sold ahead of completion, the development has attracted a distinct buyer profile.

[smartcode_project:default project_id=101620 project_image_fid=361821]

"We're seeing significant interest from lock-up-and-leave buyers and downsizers," Raptis explains. "Some use the apartments over Easter or Christmas, while others come down from Brisbane on weekends. They aren't your typical 'investors' who will put the apartments up for permanent rental."

Sterling offers prospective buyers a rare advantage: fully completed display apartments showcasing several two- and three-bedroom configurations, something few off-the-plan developments can provide.

With another Broadbeach project in the pipeline, Raptis emphasises that the next chapter is about maintaining standards rather than pursuing growth at any cost.

"We've been building for over four decades, and our track record matters. Our focus remains the same: deliver what we build, stay close to the details, and delivering a finished product that hopefully exceeds our clients' expectations."

[smartcode_project_cta:default project_id=101620]

It’s all in the family: Four decades later, Raptis continues to shape the Gold Coast skyline

JWLand has completed the final residential stage of its Lyneham precinct, Northbourne Village, with De Burgh now welcoming residents who have begun settling into their new homes.

A selection of the 350 studio, one, two, and three-bedroom apartments remains available within the two-building <a href="https://www.apartments.com.au/buildings/de-burgh-at-northbourne-village-40-de-burgh-street-lyneham-act-2602">De Burgh</a>, which occupies a prominent position along Northbourne Avenue.

[smartcode_project:default project_id=139989 project_image_fid=359152]

The apartments at De Burgh have been configured to prioritise natural light, privacy, and usable outdoor space, with ground-floor homes featuring private courtyards and upper-level apartments opening to generous balconies. Double-glazed windows are standard across the development, supporting acoustic comfort and improved energy performance.

Kitchens are fitted with Fisher &amp; Paykel appliances, while all residences include ducted reverse-cycle air conditioning integrated with app-based controls, allowing residents to manage lighting and climate remotely. These inclusions reflect a broader focus on durability, efficiency, and everyday functionality rather than short-term finishes.

[smartcode_project:default project_id=139989 project_image_fid=356280]

Shared amenity is delivered through a resident gym, rooftop garden, lounge spaces, parcel lockers, and landscaped communal areas that connect De Burgh to the wider Northbourne Village environment.

Nick Babic, Marketing Project Manager at JWLand, said the completion of De Burgh gives buyers a level of certainty that off-the-plan purchases cannot always provide.

“There’s no need to wait or play guessing games. You can come and see the spaces firsthand, and genuinely picture yourself living there today. That includes not only the apartments, but the amenities as well. It’s easy to imagine enjoying a coffee in the central courtyard or spending time with other residents in the lounge.”

The completed status of the project aligns with strong buyer demand for finished stock, particularly among first home buyers, young professionals, and downsizers seeking certainty around timing and cost.

[smartcode_project:default project_id=139989 project_image_fid=356282]

With pricing ranging from $463,000 to $1.588 million, much of the offering sits within reach of buyers looking to enter the Inner North apartment market.

De Burgh’s location underpins its buyer appeal, positioned approximately 600 metres from the light rail and three kilometres from Canberra’s CBD, with direct access to <a href="https://www.apartments.com.au/developments/lyneham-act-2602">Lyneham</a> wetlands, Sullivan’s Creek parkland, and the established hospitality and retail precincts of Lyneham and Dickson.

[smartcode_project_cta:default project_id=139989]

Canberra's newest apartment building: JWLand completes De Burgh at Northbourne Village

One of Victoria’s largest private developers, Central Equity, has commenced construction on Palmera, its $1 billion luxury residential development at Northcliffe on the Gold Coast, appointing Tier 1 builder Multiplex to deliver the project.

The fast-track to construction is being undertaken ahead of Central Equity officially launching the project to market.

The company says the move reflects its confidence in both the calibre of its offering and the Gold Coast’s long-term fundamentals, underpinned by one of Australia’s strongest growing economies, continued population growth and sustained infrastructure investment.

A diversifying employment base across health, education, professional services and tourism has helped insulate the local economy from volatility, while limited new supply in established coastal locations continues to support demand from owner-occupiers and downsizers seeking long-term lifestyle value.

<a href="https://www.apartments.com.au/new-apartments/palmera-residences-18-garfield-terrace-surfers-paradise-qld-4217">Palmera</a> is being constructed in the prestigious Northcliffe residential neighbourhood on an expansive 3,239 sqm site. It is located at 18 Garfield Terrace near the Northcliffe Surf Life Saving Club and the patrolled Northcliffe surf beach, situated between Broadbeach and Surfers Paradise.

[smartcode_project:default project_id=108274 project_image_fid=361249]

Offering a mix of spacious three-bedroom apartments over 52 levels, Palmera is designed to deliver a full suite of premium residences to buyers looking for the ultimate coastal lifestyle that the Gold Coast has to offer.

The project’s premium apartments will deliver northern views across the Surfers Paradise beachfront and extending all the way around to Burleigh Heads and beyond.

Palmera will be crowned by its top four levels, being a limited collection of penthouses and skyhomes that further elevate the residential offering through generous proportions and uninterrupted panoramic views.

[smartcode_project:default project_id=108274 project_image_fid=361246]

The appointment of Multiplex as the builder represents a major milestone for Palmera and cements Central Equity’s commitment to the Gold Coast after delivering more than 85 residential projects over the past four decades. It will be the 20th project collaboration between Central Equity and Multiplex.

“The commencement of construction at Palmera marks a major milestone for the project, with Tier 1 builder Multiplex appointed to deliver the development in the highly sought-after Northcliffe residential precinct on the Gold Coast,” said Central Equity Executive Director Karl Kutner.

“Our commitment to commence immediate construction is in line with our resounding confidence in the Gold Coast over the long term. The city has evolved and proven to be one of Australia’s most dynamic and resilient property markets in recent years.”

[smartcode_project:default project_id=108274 project_image_fid=361250]

Multiplex, one of Australia’s largest builders, has been shaping skylines and delivering iconic projects around the world since 1962. In that time, the Tier 1 global contractor has delivered projects with a combined value of more than US$130 billion.

“Having worked with Multiplex on many previous developments, we are pleased to be extending our relationship further with Palmera,” Kutner added.

“Multiplex brings an unparalleled depth of experience to ensure that Palmera fulfils the vision we have laid out for this strategic location and is delivered to the highest standards,” he said.

Multiplex Regional Managing Director Michael Sinclair said Multiplex was delighted to be aligning with Central Equity yet again.

“Central Equity is creating a stunning new addition to the Gold Coast skyline, and we look forward to bringing their vision to life with a world-class construction team and program. We are proud to be working alongside Central Equity on our 20th project together.”

Palmera has been designed by Marchese Partners, with interiors by DBI.

[smartcode_project:default project_id=108274 project_image_fid=361247]

Residents will have private access to extensive, state-of-the-art amenities, featuring two large pools including a generously scaled, family-friendly pool with safe shallow zones, and a 25-metre lap pool facing the western side, ensuring maximum sunlight all day.

Also available exclusively to residents is a sauna, magnesium pool, yoga studio, expansive gym, resident lounge, outdoor BBQ and dining areas. Residents will also be welcomed by concierge and luxurious entry foyer.

Located on Garfield Terrace in Northcliffe, Palmera enjoys a prime coastal position just moments from the patrolled Northcliffe beach and the G:link light rail, providing effortless connectivity along the Gold Coast’s beachfront suburbs, linking the Gold Coast University Hospital in the north with Nobby beach and Burleigh Heads to the south once the extension completes later this year.

[smartcode_project_cta:default project_id=108274]

Central Equity unveils Palmera on Garfield Terrace, Surfers Paradise

The idea of a low-maintenance forever home located close to the city were the two driving factors behind a recent purchaser’s journey at Murcia, the under-construction East Brisbane apartment development by Sarazin.

Last year, Lois and her husband purchased a two-bedroom plus multi-purpose room (MPR) apartment in the new building, which is being constructed by Hutchinson Builders and is on track for completion in late-2027.

[smartcode_project:default project_id=135094 project_image_fid=341638]

The couple’s number one priority was to remain within easy commuting distance of the city for work. Murcia is positioned alongside the new Cross River Rail, with Woolloongabba Station just 300 metres from the front door.

They are currently living in their Annerley unit, which they have owned for several years, after recently moving out of their inner-city apartment, located on the very same street as Murcia.

“We had watched the development for a long time, and when construction activity began, that’s when we felt confident to buy,” Lois said.

[smartcode_project:default project_id=135094 project_image_fid=356540]

The timing also made sense. By moving back into their Annerley unit, they are able to save money ahead of settlement, while looking forward to returning closer to the city once Murcia is complete.

“We see Murcia as a forever home, as opposed to an investment, or something we need to appreciate massively in value and move on from in a few years,” Lois said.

“We secured an apartment large enough to grow a family, so we’re expecting to call Murcia home for a very long time.”

The couple plan to grow their family, but without the added maintenance demands of owning a standalone house further from the city. Working with Sarazin and architect HAL, they were able to slightly tweak the floorplan, converting the two-bedroom plus MPR layout into a functional three-bedroom apartment.

An added bonus was the recently revised communal space plans, which now incorporate a dedicated working-from-home area, complete with work pods, and shared desks.

“It means the third bedroom doesn’t have to become a part-time office and part-time bedroom,” Lois said, adding that residents have the benefit of working from home without actually being inside their apartment.

The rooftop wellness amenity was another standout compared to living in an established complex or a house. A signature feature of Sarazin developments, the rooftop will include a full gym, hot and cold plunge pools, a steam room and sauna, and a hotel-style pool with cabanas.

[smartcode_project:default project_id=135094 project_image_fid=214682]

Buyer journeys can vary significantly, from purchasing in the established market to buying new, or choosing between houses and apartments. Lois said they knew immediately that buying off the plan was right for them.

“We wanted something new, with less maintenance, and we weren’t quite ready to make the full financial leap straight away. The timing and deposit structure gave us the flexibility we needed.”

Designed by HAL Architects and inspired by the Spanish city of Murcia, the development takes a Mediterranean-influenced approach to architecture and landscaping, with a strong emphasis on shared spaces.

“The design feels considered, the amenities support how we actually live, and the location keeps us connected to the city without feeling right in the middle of it.”

Murcia is Sarazin’s second development in the area, following the completion of Silk One just up the road in 2022. They have several more projects coming to market in Woolloongabba ahead of the 2032 Brisbane Summer Olympics.

[smartcode_project_cta:default project_id=135094]

Close to the city, built for the future: Inside a growing family’s move to Murcia in East Brisbane

Mortgage Debt

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Mortgage deferrals prompted by the COVID-19 pandemic have continued to trend down, according to the latest figures from the Australian Prudential Regulation Authority (APRA).

Householders and small businesses who were struggling to make mortgage repayments at the onset of the pandemic are back paying down their home loans again.

Repayments are not being made on about 2 per cent of the value of total housing loans on issue, compared to the 10 per cent peak deferral tally, according to the Herald Sun.

According to the Australian Banking Association, home loan deferrals at Commonwealth Bank, Westpac, National Australia Bank, ANZ, BOQ, Suncorp and Bendigo banks dropped 80 per cent between June and December last year, from 493,000 to 101,000.

Business loan deferrals dropped almost 90 per cent from 228,070 to 25,497 at the seven banks during the same time period.
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Repayments are not being made on about 2 per cent of the value of total housing loans on issue, compared to the 10 per cent peak deferral tally

jchancellor

COVID-19 based mortgage deferrals trending lower

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One in four (25%) Australians are worried about how they will pay the rent or mortgage after Christmas, according to new research by Finder, Australia’s most visited comparison site. That’s the equivalent of 4.8 million Australians who may have difficulty coming up with the funds to pay their mortgage or rent.

The Finder survey of 1,004 respondents revealed 16% of Australians are somewhat worried about meeting payments, while a further 9% are extremely worried. The problem is more pronounced for men, with nearly one in three (31%) anxious about paying rent or mortgage after Christmas, compared with 19% of women.

Sarah Megginson, home loans expert at Finder, said in COVID times, Christmas could push people over the edge financially.

“Many households are still facing hardship and relying on stimulus money to get by as the pandemic goes on. For families whose income for December is less than it was last year, this can cause significant budget shortfalls and lead to financial trouble. Many will have to choose which bills to fall behind on,” Megginson said. 

The research shows that young people are the most vulnerable when it comes to missing their payments. One in three (33%) Gen X and Gen Y Aussies, respectively, are worried about paying their rent or mortgage over Christmas, compared to just 5% of Baby Boomers. Many young Aussies have found themselves jobless this year, as youth unemployment hit a 23-year high of 16.4% in June, leaving them the most vulnerable to missed rental or mortgage payments.

Victorian households are the most burdened by their living costs, with a whopping 37% of residents concerned about making rent or mortgage payments over the festive season. While Victoria bore the economic brunt of the pandemic, rental prices have not fallen in proportion with the recession. In Melbourne, the median asking rent in September was $425, down just 2% year-on-year, according to CoreLogic data.
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That means roughly 4.8 million Australians who may have difficulty coming up with the funds to pay their mortgage or rent.

urban.com.au

25% of Australians are worried about housing costs post-Christmas

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<img src="/images/2015/11/4/Holdencapital_banner.jpg" alt="" width="622" height="131">
 SPONSORED POST
Most banks have long memories and it’s those past experiences, which in all probability resulted in the writing off of a bad debt, that tend to have a strong influence on the executives responsible for writing the banks lending policy.
One such area of contention is the issuing of second mortgages and in most cases the approach by banks is consistent, driven by those past bad experiences.
So while there are sound arguments as to why it might actually be in the banks interest to allow a second mortgage, most credit/risk manager default to a position that will not impact on their security position and it takes some very careful negotiations to convince them to do otherwise. So lets look at the reasons why they have those concerns.
The bank does not think the developer has enough money – as the saying goes “If you want it they won’t give it to you and if you don’t want it they throw it at you”. It is true in most regards, that when considering a project a bank wants to be working with a sponsor who has the ability to invest the full equity requirement, also referred to as ‘skin in the game’, and a capacity write a cheque in the event of any unforseen cost overruns.
However, many smart sponsors choose to use Other People’s Money (OPM), usually so that they can get the best return on their funds by investing across multiple opportunities. So it is very important that the financial strength and experience of the sponsor can be demonstrated to the bank even if it is not all to be committed to the project in question.
Utilising second mortgage funding in order to expand the number of projects they can undertake is a smart way for a sponsor to leverage their return on equity provided they can show an ability to meet any unforseen financial pressures along the way. It is critical to give the bank a clear understanding of why the second mortgage funding is being used but also provide statements of position, group cash flows and approved standby arrangements to support the sponsor’s ability to meet their ongoing commitments to the project in question.
The Bank does not want any potential impediments to it realising on its security – In the event that things go wrong during a development, the bank will in most instances look to recover its exposure by disposing of the security via a quick sale rather than undertaking a lengthy workout. Even in the case of a development project, banks do not want to ‘take control’ of a project unless absolutely necessary and will usually appoint a receiver or administrator to undertake the exercise of completing the development and sale as soon as practicable with the minimum of additional expenditure.
Their concern is that where there is a second mortgage in place (and dependant on the terms of any priority agreement in place), the potential exists for that mortgagee to frustrate the actions of the bank by arguing that those actions prejudice their security position. Alternatively, while there may be no default or cause for action on the banks part, the second mortgagee may decide to take action under its securities which forces the banks hand to either take its own action in priority to the second mortgage or pay out the second mortgagee in order to gain full control. Both of these scenarios played out during the GFC and previous market corrections, continuing to make all banks hesitant about transactions involving second mortgages.
One way to address these issues is to have a reputable second mortgage provider who the banks are comfortable with and trust not to take any extreme actions during the life of the project. Additionally, the banks will require the second mortgagee to sign a priority agreement which in effect cedes all of its rights to the first mortgagee while its debt exists, effectively preventing the second mortgagee taking any action that the first mortgagee does not want to occur.
Developers skin in the game – As previously mentioned, all financiers, be they first or second mortgage providers want to see that the developer has an appropriate amount of their own “risk” money in the project – the view being that the developer will be more likely to act in the right way if they have an appropriate amount of their own cash at risk in the project. The current view is that the developer must be providing at least 10% of the required capital stack in a project.
In the eyes of the banks, this is a different risk to having a capacity to meet your obligations as detailed previously. This is about ensuring that the customer is motivated to act quickly to deal with a problem that requires either financial or physical action when it occurs and their concern is that if the equity at risk is sourced via a second mortgage provider then:
There is less motivation for the sponsor to take the required action and they have no power to require the second mortgagee to act or input further equity.
In fact it is often the case that the second mortgagee is a passive syndicate of investors with limited ability to raise additional funds or make quick decisive decisions which leaves the bank having to deal with the problems associated with the projects but also having to be conscious of not acting in a way which is prejudicial to the interest of those investors which is a complication they do not relish.
In summary, banks tend to view all second mortgages as complicating transactions rather than adding value as their interests are not always aligned with those of the borrower and it is therefore a negotiating exercise that requires a complete understanding of the interests of both sides. At HoldenCAPITAL we are often required to obtain a senior banks consent to a second mortgagee position in order to get the best outcome for our client. We do this by clearly demonstrating the positives that the structure brings to the transaction and how the risks will be dealt with.
 
This article was written by Dan Holden of HoldenCAPITAL, who are a bespoke construction finance firm, they arrange construction finance and invest in projects through their equity fund, Queen Street INVEST. To discuss your project finance requirement please call (07) 3171 4200 or visit HoldenCAPITAL <a href="https://www.holdencapital.com.au" target="_blank">here</a>.
 
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firstname-zEygzUaHDN

Why the bank won't let you have a second mortgage

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The latest ratios of household finances highlight that the ratio of debt to disposable income is at a record high however, the value of household assets is also at a record high level.
With record low interest rates, the ratio of interest payments to disposable income is the lowest it has been since early 2003.
The ratio of household and housing debt to disposable incomes are each at historic highs of 186.3 percent and 133.8 percent respectively with the ratios increasing by 3.4 percent and 4.3 percent over the past year; 
Over the period from 1988 to 2015 standard variable mortgage rates have fallen dramatically and that has surely contributed to household’s preparedness to take on more debt.
<a href="/images/2016/03/31/Screen%20Shot%202016-03-31%20at%201.11.34%20PM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/03/31/Screen%20Shot%202016-03-31%20at%201.11.34%20PM.png" alt="">
 
Over recent years the ratio of interest payments to disposable income has been falling with the ratios for households and housing now sitting at their lowest levels since 2003. The higher ratio of interest payments currently compare to 1988 when interest rates were substantially higher.
This is reflective of the much higher cost for household assets, particularly the cost of residential housing.
The data shows that although households have significant debt, particularly for housing, the value of the assets they hold is substantial. The ratio of household debt to disposable income is currently 186.3 percent however, the ratio of household assets to disposable income 862.8 percent, the highest it has ever been.
Similarly, the ratio of housing debt to disposable income is 133.8 percent however; the ratio of housing assets to disposable income is 471.3 percent.
What is interesting is that the ratio of household assets to disposable income is still lower than its previous peak in December 2007 at 476.2% percent, however, it is nudging back up towards its previous record high.
The value of household assets is significantly greater than the value of the debt. Based on this data, the ratio of household debt to assets is 21.6 percent and the ratio of housing debt to housing assets is 28.4 percent.
<a href="/images/2016/03/31/Screen%20Shot%202016-03-31%20at%201.16.17%20PM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/03/31/Screen%20Shot%202016-03-31%20at%201.16.17%20PM.png" alt="">
 
Australian households are heavily indebted due largely to residential housing and while high; the value of the assets held is much greater than the debt. It’s important to consider that this is a national view.
Across different regions the ratios are likely to be substantially different. Furthermore, lower interest rates and a fairly strong labour market over recent decades have contributed to a willingness to borrow. Should either of these factors to change it could lead to a dramatic deterioration in the value of these assets while of course the debt would remain.
Importantly, mortgage arrears remain low and the Reserve Bank has reported that the typical mortgage holder is currently more than two years ahead on their mortgage repayments. This coupled with higher rates of household savings provide a potential buffer if unemployment were to rise sharply or interest rates began to increase.
Cameron Kusher is research analyst for CoreLogic RP Data. You can contact him <a href="https://blog.corelogic.com.au/about/">here</a>.
 
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ckusher-ujnxiKuFQs

Household and housing debt reach new record highs: CoreLogic RP Data's Cameron Kusher

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Higher participation rates in Australia's labour market come from those with mortgages over $300,000, the RBA have found.
The RBA deputy governor Guy Debelle spoke on employment and wage growth at the Australian Council of Social Service (ACOSS) National Conference 2019 in Canberra today.
Debelle noted that in recent decades female participation has grown, and the RBA believe this is due to the increase in level of mortgage debt of home owners.
"The rise in debt levels has broadly coincided with the increase in the participation rate of females," Debelle advised, however suggested it was difficult to establish which way causality is going.
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2019/11/26/Labour%20Force%20RBA.jpg" alt="">
Debelle then posed three questions.
"Are debt levels higher because more households have two incomes and can afford to borrow more?
"Or does the need to borrow more to afford housing drive the decision to participate more?
"Or is it the case that the low level of income growth in recent years has meant that households have more debt than they anticipated and need to work longer to pay it down?" 
There's around 95 per cent of labour participation from males who have mortgage debts of over $300,000, while females have grown to over 80 per cent.
To read the full speech, <a href="/news/strong-employment-not-leading-to-improved-unemployment-or-wage-growth-rbas-guy-debelle">click here</a>.
 
 
 
 
 
 
 
 
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wdavis-8cCN98p7xp

Highest labour participation to those with mortgages over $300,000

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Mortgage debt obligations for older Australians is a growing concern. 
The average mortgage debt of those aged 55 and older has grown by almost seven times since the late 1980s, according to research by the Australian Housing and Urban Research Institute (AHURI).
Their mortgage debt, after accounting for inflation, rose from $27,000 in 1987 to $186,000 to 2015.
Back in 1987, only 14% of Australians over 55 had a mortgage.
But it doubled to 28% by 2015, AHURI found.
There has been a severe increase in repayment risk, although low interest rates have mitigated the level of current concern.
The mortgagor older population is more prone to material deprivation than outright property owners.
Nearly 8% of older mortgagors have been unable to pay their utility bills on time between 2006 and 2016, compared to around 3% of outright owners.
The blow-out has been made worse by the practice of redrawing equity on their home loans and also extending the length of their home loans.
Between 1987 and 2015, the growth in mortgage debt outstripped both house price and income growth among older mortgagors.
With reduced incomes approaching and on retirement, the average mortgage debt-to-income ratio was 71% in 1987, and 211% by 2015.
The research by found mortgage indebtedness was uncommon among the 55–64 cohort as recently as the 1990s.
The report's lead author, Rachel ViforJ, professor of economics at Curtin University, says these days the mental health effects on the older Australians with mortgages are "comparable to those resulting from long-term health conditions".
The Curtin and RMIT research concluded when older mortgagors experience difficulty in meeting mortgage payments their wellbeing declines. It's more so for women than men. Single status, marital breakdown, ill health and poor labour market engagement all adversely affect women’s mental health more than men.
"There is already significant concern in policy circles about older people’s vulnerability to poverty, particularly single elderly women, who have longer life expectancies than men, but lower superannuation balances," the report noted.
Older retired mortgagors are increasingly drawing down their limited superannuation balances.
As their average superannuation balances tumbled from $471,000 to $271,000 between 2010 and 2014, average equity stakes in their property rose from $621,000 to $667,000. 
The ARUHI modelling predicts an "increasingly tenure polarised seniors population".
Outright ownership will remain an important but weaker pillar supporting living standards in old age.
Outright ownership status will be attained later in life and with lower incomes.
The projections suggest that 1.88 million older Australians could be in before-housing poverty in 2031.
This count falls by 730,000 to 1.15 million on an after-housing cost basis.
The report urges long-term planning for a mortgage debt repayment strategy.
It may prove especially worthwhile for those particularly "vulnerable to biographical disruption, or with weak labour market engagement, or those with higher levels of debt throughout their life course as financial innovations enabled home owners to draw down on the wealth stored in their family home without moving".
Downsizing is, of course, one obvious strategy.
But the report warns stamp duties, pension income and the asset means tests that penalise downsizers, along with a lack of suitable smaller dwellings in the neighbourhoods of older empty nesters and lone persons households, are important issues for state and federal governments.
Home ownership has often been dubbed the fourth pillar of the retirement incomes system.
However, this pillar may be crumbling due to rising mortgage indebtedness, the report concludes.
This article first appeared in The Daily Telegraph. 
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jchancellor-FAypfDUnLy

Mortgage debt for older Australians is a growing obligation

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Between 1987 and 2015, the average real mortgage debt among older Australians (aged 55+ years) blew out by 600 per cent, according to new AHURI research.
Debt rose on average from $27,000 to over $185,000 in 2015, while their average mortgage debt to income ratios tripled from 71 to 211 per cent over the same period.
The research, <a href="http://icm-tracking.meltwater.com/link.php?DynEngagement=true&amp;H=5eXH0qSKdBRphS6WO4YlQwwSTi8wtQOqejFjZKiddbCzZ5Bbl4XDYQCWwbAwBqZ18LgCZBIb7Ta2Ris72KQtLUjhTZ0hAoyRqWksKLvDgQGF%2FheDfJf5RQl5rEECNjoziHOV36ncRpk%3D&amp;G=0&amp;R=https%3A%2F%2Fwww.ahuri.edu.au%2Fresearch%2Ffinal-reports%2F319&amp;I=20190826210314.00000732f17f%40mail6-43-usnbn1&amp;X=MHwxMDQ2NzU4OjVkNWNkN2UyNjJkNTM3OTAwYzljNTU2ZDs%3D&amp;S=R75KvJmZUsaCszbwp8Ep3zYi24dIZMln-LMCKx88_CQ" target="_blank" data-auth="NotApplicable">Mortgage stress and precarious home ownership: implications for older Australians,</a> was undertaken for AHURI by researchers from Curtin University and RMIT University.
It investigates the growing numbers of older Australians who are carrying high levels of mortgage debt into retirement, and considers the significant consequences for their wellbeing and for the retirement incomes system.
"Our research finds that back in 1987 only 14 per cent of older Australian home owners were still paying off the mortgage on their home; that share doubled to 28 per cent in 2015’, says the report’s lead author, Professor Rachel ViforJ of Curtin University. "We’re also seeing these older Australians’ mortgage debt burden increase from 13 per cent of the value of the average home in the late 1980s to around 30 per cent in the late 1990’s when the property boom took off, and it has remained at that level ever since.
"Over that time period, average annual mortgage repayments have more than tripled from $5,000 to $17,000 in real terms." When older mortgagors experience difficulty in meeting mortgage payments, wellbeing declines and stress levels increase, according to the report.
Psychological surveys measuring mental health on a scale of 0 to 100 reveal that mortgage difficulties reduce mental health scores for older men by around 2 points and an even greater 3.7 points for older women.
Older female mortgagors’ mental health is more sensitive to personal circumstances than older male mortgagors.
Marital breakdown, ill health and poor labour market engagement all adversely affect older female mortgagors’ mental health scores more than men’s. "These mental health effects are comparable to those resulting from long-term health conditions," says Professor ViforJ.
"As growing numbers of older Australians carry mortgages into retirement the rising trend in mortgage indebtedness will have negative impacts on the wellbeing of an increasing percentage of the Australian population." High mortgage debts later in life also present significant challenges for housing assistance programs.
The combination of tenure change and demographic change is expected to increase the number of seniors aged 55 years and over eligible for Commonwealth Rent Assistance from 414,000 in 2016 to 664,000 in 2031, a 60 per cent increase.
As a consequence the real cost (at 2016) of CRA payments to the Federal budget is expected to soar from $972 million in 2016, to $1.55 billion in 2031.
The unmet demand for public housing from private renters aged 55+ years is also expected to climb from roughly 200,000 households in 2016, to 440,000 households in 2031, a 78 per cent increase. There are also challenges for Government retirement incomes policy.
The burden of indebtedness in later life is growing; longer working lives and the use of superannuation benefits to pay down mortgages are increasingly likely outcomes.
The full report can be <a href="https://www.ahuri.edu.au/research/final-reports/319%20" target="_blank">downloaded here</a>.
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j.ballantyne1990-6AQqhLzZaK

Mortgage debt for older Australians soars 600 per cent and is impacting their mental health: AHURI

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EXPERT OBSERVER
Half a million Australians aged 50 and over lost their homes in the first decade of this century.<a href="https://theconversation.com/profiles/rachel-ong-viforj-113482"> </a>
The number of mature age Australians carrying mortgage debt into retirement is soaring.
And on average each mature age Australian with a mortgage debt owes much more relative to their income than 25 years ago.
Microdata from the Bureau of Statistics <a href="https://www.abs.gov.au/AUSSTATS/abs@.nsf/Lookup/6541.0.30.001Main+Features12013-14" target="_blank">survey of income and housing</a> shows an increase in the proportion of homeowners owing money on mortgages across every home-owning age group between 1990 and 2015. The sharpest increase is among homeowners approaching retirement.
<h2>More mortgaged for longer</h2>
For home owners aged 55 to 64 years, the proportion owing money on mortgages has tripled from 14% to 47%.
Among home owners aged 45 to 54 years, it has doubled.
<hr>
<a href="https://images.theconversation.com/files/278480/original/file-20190607-52741-1gvtikf.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=1000&amp;fit=clip"><img src="https://images.theconversation.com/files/278480/original/file-20190607-52741-1gvtikf.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt=""></a> <a class="source" href="https://www.abs.gov.au/AUSSTATS/abs@.nsf/Lookup/6503.0Main+Features12015-16">Source: Authors’ own calculations from the Surveys of Income and Housing</a>
<hr>
Meanwhile, the average mortgage debt-to-income ratio among those with mortgages has pretty much doubled across every home-owning age group.
In the 45-54 age group the mortgage debt-to-income ratio has blown out from 82% to 169%.
For those aged 55-64 it has blown out from 72% to 132%.
<hr>
<a href="https://images.theconversation.com/files/278619/original/file-20190610-52758-wdha1w.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=1000&amp;fit=clip"><img src="https://images.theconversation.com/files/278619/original/file-20190610-52758-wdha1w.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt=""></a> Among mortgage holders. Source: Authors’ own calculations from the Surveys of Income and Housing
<hr>
<h2>Three reasons why</h2>
The soaring rates of mortgage indebtedness among older Australians have been driven by three distinct factors.
First, property prices have surged ahead of incomes.
Since 1970 the national dwelling price to income ratio <a href="https://www.ceda.com.au/CEDA/media/General/Publication/PDFs/HousingAustraliaFinal_Flipsnack.pdf" target="_blank">has doubled</a>.
<hr>
<a href="https://images.theconversation.com/files/278624/original/file-20190610-52780-1hzmy9f.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=1000&amp;fit=clip"><img src="https://images.theconversation.com/files/278624/original/file-20190610-52780-1hzmy9f.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt=""></a> Prices and wages in 1970 are assigned an index of 100. <a class="source" href="https://www.ceda.com.au/CEDA/media/General/Publication/PDFs/HousingAustraliaFinal_Flipsnack.pdf" target="_blank">Sources: Treasury, ABS, Committee for Economic Development of Australia</a>
<hr>
Despite weaker property prices, the ratio remains historically high. This means households have to borrow more to buy a home. It also delays the transition into home ownership, <a href="https://www.abs.gov.au/ausstats/abs@.nsf/Lookup/by%20Subject/4130.0%7E2015-16%7EMain%20Features%7EAcross%20the%20Generations:%20Twenty%20years%20of%20housing%7E10003" target="_blank">potentially shortening</a> the the remaining working life available to repay the loan.
Second, today’s home owners frequently use flexible mortgage products to draw down on their housing equity as needed for other purposes. During the first decade of this century, one in five home owners aged 45-64 years increased their mortgage debt <a href="/news">even though they did not move house</a>.
Third, older home owners appear to be taking on bigger mortgages or delaying paying them off in the knowledge that they can work longer than their parents did, or draw down their superannuation account balances.
<h2>Super could be changing our behaviour</h2>
For mortgage holders aged 55-64 years, there is evidence to suggest that larger debts <a href="/news">prolong working lives</a>.
In 2017 around <a href="https://www.propertyobserver.com.au/https://www.abs.gov.au/ausstats/abs@.nsf/mf/6238.0" target="_blank">29% </a> of lump sum superannuation withdrawals were used to pay down mortgages or purchase new homes or pay for home improvements, up from <a href="https://www.pc.gov.au/research/completed/superannuation-post-retirement/super-post-retirement-volume1.pdf" target="_blank">25%</a> four years earlier.
In the Netherlands, where a mandatory occupational pension scheme along the lines of Australia’s super scheme has been in place for much longer, <a href="https://opendata.cbs.nl/statline/#/CBS/nl/dataset/81702NED/table?ts=1539244705047" target="_blank">over one-half</a> of home owners aged 65 and over are still paying off mortgages.
<hr>
<a href="https://images.theconversation.com/files/278784/original/file-20190611-52780-kg72kd.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=1000&amp;fit=clip"><img src="https://images.theconversation.com/files/278784/original/file-20190611-52780-kg72kd.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt=""></a> The base is the total number of uses of lump sums rather than the number of people taking lump sums. <a class="source" href="https://www.propertyobserver.com.au/https://www.abs.gov.au/ausstats/abs@.nsf/mf/6238.0" target="_blank">ABS 6238.0 Retirement and Retirement Intentions</a>
<hr>
<h2>The implications are huge</h2>
Internationally, studies have found that indebtedness <a href="https://www.sciencedirect.com/science/article/abs/pii/S0277953615001203?via%3Dihub" target="_blank">adds to psychological distress</a>. The impacts on wellbeing are more profound for older debtors, without the ability to recover from financial shocks.
Debt-free home ownership in old age used to be known as the <a href="https://www.ceda.com.au/CEDA/media/ResearchCatalogueDocuments/PDFs/27922-CEDATheSuperChallengeofRetirementIncomePolicySept2015FINAL.pdf" target="_blank">fourth pillar of the retirement incomes system</a> because of its role in <a href="https://link.springer.com/article/10.1007/s10901-010-9187-4" target="_blank">reducing poverty in old age</a>. It allowed the Australian government to set the <a href="https://melbourneinstitute.unimelb.edu.au/assets/documents/hilda-bibliography/conference-papers-lectures/2013/Haffner-Ong-Wood-ENHR2013-Paper.pdf" target="_blank">age pension at relatively low levels</a>.
Growing indebtedness will increase after-housing-cost poverty among older Australians and create pressure to <a href="/news">boost the age pension</a>.
Mortgage debt burdens late in working life will also expose home owners to unwelcome risks, as health or employment shocks can ruin plans to pay off their mortgages.
During the first decade of this century, around <a href="/news">half a million</a> Australians aged 50 years and over lost their homes.
<h2>Taxpayers will be under pressure to help</h2>
Those losing home ownership are often forced to rely <a href="https://www.propertyobserver.com.au/https://journals.sagepub.com/doi/abs/10.1177/0042098014550955" target="_blank">on rental housing assistance</a>. Moreover, as older tenants they are <a href="https://www.propertyobserver.com.au/https://journals.sagepub.com/doi/abs/10.1177/0042098014550955" target="_blank">unlikely to ever leave housing assistance</a>. This will put pressure on the government to boost spending on housing assistance, which is likely to further boost <a href="https://theconversation.com/when-falling-home-ownership-and-ageing-baby-boomers-collide-102846" target="_blank">demand for housing assistance</a>.
Super and government housing assistance could become the safety nets that allow retirees to escape their mortgages.
It wasn’t the intended purpose of superannuation, and wasn’t the intended purpose of housing assistance. It is a development that ought to be front and centre of the <a href="https://www.afr.com/news/policy/tax/retirement-incomes-face-review-20190524-p51qsi" target="_blank">inquiry into the retirement incomes system</a> announced by Treasurer Josh Frydenberg.
It is a change we’ll have to come to grips with.
<a href="https://theconversation.com/profiles/rachel-ong-viforj-113482" target="_blank">Rachel Ong ViforJ</a>, Professor of Economics, School of Economics, Finance and Property, <a href="http://theconversation.com/institutions/curtin-university-873" target="_blank">Curtin University</a> and <a href="https://theconversation.com/profiles/gavin-wood-113723" target="_blank">Gavin Wood</a>, Emeritus Professor of Housing and Housing Studies, <a href="http://theconversation.com/institutions/rmit-university-1063" target="_blank">RMIT University</a>
This article is republished from <a href="http://theconversation.com" target="_blank">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/more-people-are-retiring-with-high-mortgage-debts-the-implications-are-huge-115134" target="_blank">original article</a>.
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More people are retiring with high mortgage debts. The implications are huge

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The Reserve Bank of Australia Governor Philip Lowe has urged households to shop around for a better home loan deal.
It was during a speech where Australia’s top central banker played down recent increases in mortgage rates by domestic lenders but highlighted global risks.
"A much less remarked upon fact is that the average mortgage rate paid in Australia has fallen since August last year, as lenders have increased their discounts," the governor said.
"I encourage anyone with a mortgage to shop around: there are some very good offerings out there.
"We can all play a role in promoting strong competition in our financial sector by shopping around and taking advantage of the good deals that are out there."
Lowe said the board was closely monitoring housing markets across the country and trends in housing finance.
"Housing credit growth has slowed, which, from a medium-term perspective, is a positive development. 
"Our assessment is that this slowing largely reflects reduced demand for credit by investors, although there has been some tightening in the supply of credit as well. With housing prices falling in a number of cities, largely due to a shift in the underlying fundamentals, investors no longer find it as attractive to invest in residential property as they once did. 
"This is a normal part of the cycle. 
"While credit standards have been tightened, mortgage credit remains readily available."
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RBA Governor Philip Lowe says shop around for a better home loan

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Affordability is set to moderately improve in 2018, mainly as a result of softening housing market conditions, a new report from Moody’s says.
Over the year to March 2018, Sydney showed the greatest improvement in affordability with Perth not far behind, largely due to housing prices falling 3.1% and 3.6% respectively.
However, affordability deteriorated in both Melbourne and Adelaide, Moody’s The RMBS - Australia: Housing affordability to improve on property market slowdown report suggested.
The firm says that median housing prices in Sydney are likely to continue to cool, while Melbourne's prices will continue to show tempered growth during the rest of the year.
The report also says that more affordable mortgages decrease the risk of loan delinquencies and defaults.
On average, Australian households with two income earners taking out an 80% loan-to-value mortgage needed 28.2% of their monthly income to meet monthly mortgage repayments in March 2018, down marginally from 28.3% in March 2017, says Alena Chen, a Moody's Vice President and Senior Analyst.
"Housing affordability for new mortgage borrowers — measured as the proportion of household income needed to meet mortgage repayments — improved marginally on average across Australia over the year to March 2018, because lower interest rates and moderate income growth outstripped the effect of higher housing prices.
"Looking at the rest of 2018, we expect housing affordability to continue to improve moderately on average because of softening housing market conditions, particularly in Sydney and to a lesser extent Melbourne.
"On average across Australia, housing affordability in March 2018 was also better than the average for the past 10 years."
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