A new 25-storey apartment tower proposed for Mercer Street would push Geelong’s western gateway skyline higher, with Morphy Birrell Property Group lodging plans for a project directly beside one of the city’s most significant heritage streetscapes.

The <a href="https://www.apartments.com.au/architects/fk-australia">FK</a>-designed development at <a href="https://www.apartments.com.au/new-apartments/65-67-mercer-street-geelong-vic-3220">65-67 Mercer Street</a> has now been referred to Victoria’s Planning Minister. The site sits opposite the Geelong rail corridor and immediately south of the heritage-listed St Peter and Paul’s Catholic Church and Ashby Hall precinct.

Rather than compete with the neighbouring ecclesiastical buildings, the proposal adopts a sculpted podium intended to reference the materiality and scale of the heritage context. Planning documents note the design draws cues from the “dark stone brick” church and surrounding masonry buildings, while the tower above transitions into a softer, curved form oriented toward Corio Bay and the Geelong waterfront.

<img alt="First look: Morphy Birrell Property Group targets 25-storey Geelong tower beside landmark church precinct" data-entity-type="file" data-entity-uuid="b797d10c-d4a6-47af-b8df-1aeaa3b382be" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/public%20square.png?VersionId=QGIpcz1x1hKB6lQLl2iobyHqb6PS2Ztc" />

The development forms “Stage 5” of Morphy Birrell Property Group’s broader Mercer Street precinct strategy, following the completion of the 21-storey Miramar tower on Cavendish Street and several additional approved redevelopment stages nearby. Planning consultants Ratio said the proposal “represents an exemplary development outcome” aligned with the strategic ambitions for Central Geelong’s continued urban renewal.

The mixed-use project would replace an existing low-rise commercial building and surface parking area on the 3,320 sqm corner site. FK’s urban context report describes the proposal as a residential development comprising apartments, resident amenities, commercial space, and integrated landscaping positioned to maximise bay views and northern sunlight access.

Renders show a deeply articulated tower with curved balconies stepping above a lower masonry podium that frames a landscaped forecourt facing Mercer Street. The design intentionally preserves sightlines toward the adjacent church buildings, with the podium scaled to reinforce the heritage edge before the tower recedes upward.

<img alt="First look: Morphy Birrell Property Group targets 25-storey Geelong tower beside landmark church precinct" data-entity-type="file" data-entity-uuid="2bdca91e-66f7-4ac7-8baa-2f93bd5b564e" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/geelong%20site.png?VersionId=QOhbino4ZgzKYw5dW3QE14E.2yq.Sv87" />

The planning report highlights the site’s strategic location within 400 metres of key Geelong destinations including Cunningham Pier, the Geelong Station precinct, Deakin University, and the convention centre. Bus services run directly along Mercer Street, while the Corio Bay foreshore sits around 100 metres north of the site.

The proposal arrives amid accelerating redevelopment across central Geelong, where planning policy continues to encourage higher-density housing close to transport infrastructure and the waterfront. Mercer Street in particular has emerged as a focal point for taller apartment development due to its proximity to Geelong Station, the bay, and major civic infrastructure.

Joel Robinson

Morphy Birrell Property Group targets 25-storey Geelong tower beside landmark church precinct

Development giant&nbsp;<a href="https://www.apartments.com.au/developers/hamton">Hamton</a> and joint venture partner Hostplus have revealed the next residential stage of their $3 billion Moonee Valley Park masterplan, lodging plans for 512 more apartments within the precinct on surplus racecourse land at 110 Wilson Street, Moonee Ponds.

The proposed development, dubbed&nbsp;<a href="https://www.apartments.com.au/new-apartments/trackside-house-110-wilson-street-moonee-ponds-vic-3039">Trackside Gardens</a>&nbsp;in the planning application, follows the <a href="https://www.apartments.com.au/news/vic/first-look-exclusive-hamton-and-hostplus-reveal-sixth-stage-of-moonee-valley-park-masterplan">recent unveiling of the sixth-stage Cox Place Precinct</a> and continues the long-running transformation of the Moonee Valley Racecourse into one of Melbourne’s largest urban renewal projects.

Positioned on the north-eastern edge of the racecourse adjacent to CityLink, Trackside Gardens will comprise three residential buildings rising between 61.8 metres and 86.4 metres within a heavily landscaped precinct shaped by Hamton’s Nature Based Cities framework.

The project forms part of the broader Moonee Valley Park redevelopment being delivered by Hamton, Hostplus and the Moonee Valley Racing Club, which is reshaping the 40-hectare racecourse site into a mixed-use neighbourhood with housing, retail, commercial space, hotels, parkland and community infrastructure.

Trackside Gardens sits separately to the recently proposed Cox Place Precinct, a five-building stage comprising around 1,100 residences, two build-to-rent buildings, two build-to-sell towers, retail, office space, and a hotel overlooking the racetrack. Together, the projects continue to accelerate housing delivery across the precinct.

<img alt="First look: Hamton expands Moonee Valley Park masterplan with 512-home Trackside Gardens precinct" data-entity-type="file" data-entity-uuid="5fc1941e-52d3-41c6-abc4-0f13fe8ae5ea" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/DA%20Edits%20%281%29.png?VersionId=7qwRHq5dcvXWNot2hNOgoQhN2GIWudNK" />

Designed by <a href="https://www.apartments.com.au/architects/dko-architecture">DKO Architecture</a> with landscape architecture by Tract, Trackside Gardens has been conceived as a botanical-style residential precinct prioritising canopy planting, communal green space, and vertical landscaping.

“The architectural vision for the proposed development centres around buildings in a botanical park setting that champions the important role of nature,” the planning submission states.

“The proposal incorporates principles of biophilic design, with landscape and environmentally sustainable development influencing the ultimate design response of the buildings and prioritising the ground plane to ensure a high amenity for both occupants and visitors.”&nbsp;

Trackside Gardens will deliver 512 apartments across the three buildings, alongside 518 basement car spaces and 523 bicycle spaces. Around 20 per cent affordable housing is proposed across the broader North East Precinct, equating to around 158 dwellings.&nbsp;

The affordable housing component will be concentrated within the Wilson East building, while the remaining apartments are expected to be delivered as build-to-sell residences.

Trackside Gardens has been designed around Hamton’s Nature Based Cities initiative, founded by Executive Chair Paul Hameister OAM in partnership with the University of Melbourne, Urbis, Ark Resources and Tract. The initiative promotes integrating higher-density urban development with significant biodiversity, tree canopy and landscape outcomes.

<img alt="First look: Hamton expands Moonee Valley Park masterplan with 512-home Trackside Gardens precinct" data-entity-type="file" data-entity-uuid="89353449-7b3c-42fd-8fd8-8bf64a5ef80f" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Article%20Feature%20Image%20%28Grid%29_4.png?VersionId=X8jRt0P2L7fIWjLhfX6gPknXToXIBeLj" />

A comprehensive landscape strategy would introduce deep soil planting, vertical greening, communal gardens, and new pedestrian links throughout the site.

Planning documents state the development is targeting a 5 Star Green Star Buildings rating, a 7.5-star average NatHERS rating, and “Exemplary” Nature Based Cities certification.&nbsp;

The proposal joins an expanding pipeline of approved and proposed buildings within Moonee Valley Park, including the recently launched Eveline apartments and the approved Grandstand North and South towers.

Hamton has increasingly focused on precinct-scale, nature-led communities across Melbourne’s middle-ring suburbs, with projects spanning Hawthorn, Kew, and Moonee Ponds.

Hampton unveils Trackside Gardens, latest stage of $3 billion Moonee Valley Park masterplan

The Paul Gedoun-led <a href="https://www.apartments.com.au/developers/ss-projects">S&amp;S Group</a> has achieved another milestone in its $1 billion transformation of Rainbow Bay on the southern Gold Coast with the completion of the company’s third project in four years, the $160 million <a href="https://www.apartments.com.au/buildings/esprit-217-227-boundary-street-coolangatta-qld-4225">Esprit</a> residences.

Delivered by <a href="https://www.apartments.com.au/builders/hutchinson-builders">Hutchinson Builders</a> and designed by <a href="https://www.apartments.com.au/architects/cottee-parker-architects">Cottee Parker Architects</a>, Esprit buyers have now moved into the 94 apartments across two interconnected buildings at 217-227 Boundary Street.

The successful settlement of Esprit marks another astounding chapter in the S&amp;S story, which launched its highly successful Flow apartments three years ago and created its own ultra-luxury branded fingerprint on an area craving new luxury residences.

Most early purchasers have secured gains of well over $1 million since the project launched in 2021.&nbsp;

[smartcode_project:default project_id=102921 project_image_fid=172129]

S&amp;S Projects Founding Director Paul Gedoun said the completion of Esprit reflects sustained demand for premium apartments in tightly held coastal locations.&nbsp; 
&nbsp;&nbsp; &nbsp; 
“Esprit has attracted buyers seeking a combination of quality design, considered amenity and a location that is becoming increasingly difficult to replicate,” said Gedoun.

“We identified some years ago that Rainbow Bay is a unique market where supply of luxury residences is limited, and we see the settlements in Esprit further underpinning this thinking - that for both owner-occupiers and investors.”&nbsp;

[smartcode_project:default project_id=102921 project_image_fid=172174]

A key feature of the development is ‘Club Esprit’, a 1,000sqm residents-only rooftop level combining wellness and recreation, believed to be a first for the Gold Coast, and which is fast becoming a signature of the S&amp;S brand.

Positioned to capture views across Snapper Rocks, Rainbow Bay and the Tweed River, the rooftop includes a 25-metre lap pool, gym, yoga lawn, sauna and steam facilities, ice bath, private dining spaces, outdoor cinema and landscaped areas for residents.&nbsp;

<a href="https://www.apartments.com.au/project-marketer/pezet-matheson">Pezet Matheson</a> Director Jayde Pezet, who led the sales campaign for Esprit and S&amp;S’s Flow and Awaken apartments, said the project’s performance reflects both the strength of the product and the depth of demand for premium apartments on the southern Gold Coast.&nbsp;

“In some cases, we’ve seen values double since launch, which is a clear reflection of how tightly held Rainbow Bay has become and the level of demand for well-executed projects in this market,” said Pezet.&nbsp;

“Buyers recognised early what S&amp;S Projects was delivering here, and that conviction has been rewarded as the project has progressed towards completion.”&nbsp;

[smartcode_project:default project_id=102921 project_image_fid=214819]

Esprit offers a mix of two- three and four-bedroom apartments and sits within walking distance of the beachfront, cafés and local amenities, reinforcing its appeal as both a lifestyle and investment destination.

The project is the third completed by S&amp;S Projects in Rainbow Bay, following Flow Residences and Awaken Residences, which together have contributed to the suburb’s emergence as one of the Gold Coast’s most sought-after coastal pockets. &nbsp;

S&amp;S Projects is continuing its investment in the area with Radia, a $215 million development currently under construction.&nbsp;

[smartcode_project:default project_id=102921 project_image_fid=172175]

Gedoun said the completion of Esprit signals continued confidence in the southern Gold Coast market.&nbsp;

“We’ve seen strong interest in well-located, high-quality apartments, particularly in areas where future development opportunities are limited."

“That’s been a key factor in the performance of Esprit and the broader Rainbow Bay market”.

[smartcode_project_cta:default project_id=102921]

Owners move in as Esprit completes at Rainbow Bay

Few developers can boast a portfolio across South East Queensland's luxury markets quite like <a href="https://www.apartments.com.au/developers/mosaic-property-group">Mosaic Property Group</a>.

The builder-developer, founded in 2004 by Managing Director Brook Monahan, has projects in planning, on the market, and under construction, from Burleigh Heads and Broadbeach to Kangaroo Point and South Brisbane.

With a pipeline exceeding $2 billion, Mosaic remains highly selective when it comes to development sites, having spent years refining its strategy around feasibility research and product planning. The group is set to continue growing into 2026 and beyond.

In Brisbane, Mosaic currently has three projects in the market. It is in the final release stage at <a href="https://www.apartments.com.au/new-apartments/the-bedford-by-mosaic-16-30-prospect-street-kangaroo-point-qld-4169">The Bedford</a> in Kangaroo Point, which is approaching complete sellout ahead of its late 2027 completion.

[smartcode_project:default project_id=134792 project_image_fid=328123]

Designed in collaboration with <a href="https://www.apartments.com.au/architects/bda-architecture">BDA Architecture</a>, The Bedford comprises 128 two- and three-bedroom residences. A selection of ultra-luxury Masterpiece Series Skyhomes, positioned across the top levels, offer expansive floor plans and sweeping views of the river and city.

High-end inclusions, such as natural stone benchtops, bespoke cabinetry, and Miele appliances, feature throughout all apartments, alongside the Rooftop Recreation &amp; Retreat Sky Terrace. This includes a resort-style pool with sun deck and loungers, spa, cold plunge pool, sauna, steam room, private dining room with a full kitchen, residents' lounge, multiple barbeque and relaxation zones, an outdoor viewing deck, and landscaped gardens with water features, all oriented to sweeping city and river views.

A gym with indoor and outdoor zones, and a golf simulator, further enhances recreational choice within the building.

[smartcode_project:default project_id=134792 project_image_fid=328119]

A defining feature of the development is its integrated mixed-use component, which will deliver Kangaroo Point's first major supermarket, alongside a café and liquor store, bringing long-awaited convenience to the peninsula.

Monahan says The Bedford represents the culmination of a near-decade-long journey, after first identifying the A-grade Prospect Street site in 2016. While they came close to acquiring it at the time, the site was ultimately purchased by Woolworths' development arm, Fabcot. The opportunity resurfaced in 2024 when the site, vacant for nearly three decades, was brought back to market.

Monahan says Mosaic projects often begin years before any formal plans are drawn. Their new South Brisbane development is no exception, with the site first earmarked in 2018.

"We aren't opportunistic," Monahan says. "Every site purchase is carefully considered. As seen with Kangaroo Point and South Brisbane, it can take years to eventuate. There are sites we're looking at now that we may not secure for several years."

[smartcode_project:default project_id=141711 project_image_fid=353495]

A similar story unfolded at <a href="https://www.apartments.com.au/new-apartments/the-carter-by-mosaic-77-linton-street-kangaroo-point-qld-4169">The Carter</a> in Kangaroo Point, opposite The Gabba. Like The Bedford, it is also approaching sellout of its 125 two- and three-bedroom apartments. The majority of sales are attributed to returning customers and referrals, with a balanced mix of investors and a strong majority of owner-occupiers.

BDA Architecture was again engaged to design the 22-storey building, which will feature a suite of wellness and lifestyle amenities, including a golf simulator and cinema, a commercial-grade gym, and a rooftop recreation level with a pool, steam room, sauna, cold plunge, teppanyaki bar, private dining spaces, and landscaped terraces.

Construction is on track for completion in mid-2027.

[smartcode_project:default project_id=151614 project_image_fid=362759]

Mosaic's latest offering is its most ambitious yet, boasting a rare, north-facing riverfront position on Montague Road in South Brisbane.

<a href="https://www.apartments.com.au/new-apartments/the-riversdale-by-mosaic-south-brisbane-91-montague-road-south-brisbane-qld-4101">The Riversdale by Mosaic</a> is a 39-storey tower comprising just over 200 residences and Masterpiece Series Sky Homes. Designed in partnership with Bureau Proberts, it will feature nearly 3,000 sqm of genuine, internationally benchmarked six-star, hotel-style amenities, including a wellness precinct, pool, gym, massage and treatment rooms, cinema, golf simulator, and extensive outdoor dining areas across a two-level rooftop deck.

Early works are underway, with full construction expected to commence in the second half of 2026, and an anticipated late 2029 completion.

[smartcode_project:default project_id=151614 project_image_fid=362759]

Since 2012 alone, Mosaic has completed more than $2 billion in projects and is set to deliver another $2 billion worth of developments, comprising hundreds of luxury apartments, each defined by Mosaic's signature standards of quality, detail, and delivery.

"We never arrive, there is no finish line," says Monahan. "Our ambition is to keep evolving what luxury means, creating design- and lifestyle-led residences in incredible locations, places people genuinely aspire to and want to live, homes that are loved deeply and endure long beyond their moment."

Mosaic's Midas Touch

<a href="https://www.apartments.com.au/developers/urban-property-group">Urban Property Group</a> (Urban) has broken ground at Keira Place, its new major mixed-use residential precinct in the heart of Wollongong CBD.

Held at 120-122 Smith Street, the groundbreaking marked the commencement of construction on Stage 1 of <a href="https://www.apartments.com.au/new-apartments/keira-place-120-122-smith-street-wollongong-nsw-2500">Keira Place</a>, with the opening of the new display suite. 
&nbsp; 
Keira Place is a State Significant Development that will deliver new housing supply, affordable homes and inclusive living options within walking distance of Wollongong’s CBD, coastline, transport, hospital and education precincts.

[smartcode_project:default project_id=144442 project_image_fid=369868] 
&nbsp; 
Stage 1 is now under construction and will deliver 150 apartments across two residential buildings, including 27 affordable housing apartments and 18 specialist disability accommodation dwellings, along with activated ground-floor retail and commercial space. 
&nbsp; 
Urban Co-CEO Patrick Elias said the groundbreaking represented a significant milestone for Wollongong and reflected Urban’s long-term commitment to regional cities.

“Today’s groundbreaking is about turning approvals into homes and moving quickly to deliver much-needed housing in Wollongong’s city centre,” Elias said. 
&nbsp; 
“Keira Place will provide a diverse mix of homes close to jobs, transport and services, while setting a high benchmark for quality, durability and consumer protection.”

[smartcode_project:default project_id=144442 project_image_fid=369869] 
&nbsp; 
Hon. Paul Scully MP, Minister for Planning and Public Spaces, Member for Wollongong said Keira Place is exactly the kind of development Wollongong needs – delivering new homes close to transport, employment and services, while supporting the continued growth and renewal of the CBD.

"This project reflects the Minns Labor Government's commitment to increasing housing supply in well-located areas." 
&nbsp; 
Wollongong Lord Mayor Cr Tania Brown said Keira Place would deliver lasting community benefits for the city. 
&nbsp; 
"Keira Place is a welcome addition to Wollongong's CBD delivering new housing, affordable homes and activated street-level spaces that will benefit our community for years to come," Brown said. 
&nbsp; 
"Urban Property Group's investment reflects the confidence that quality developers have in Wollongong's future, and I look forward to seeing this precinct come to life."

[smartcode_project:default project_id=144442 project_image_fid=369867] 
&nbsp; 
Designed by <a href="https://www.apartments.com.au/architects/cox-architecture">Cox Architecture</a>, with interiors by <a href="https://www.apartments.com.au/interior-designers/dko">DKO,</a> Keira Place prioritises liveability and long-term performance, with landscaped shared spaces, generous apartment layouts and a pedestrian-friendly streetscape along Smith Street. 
&nbsp; 
Residents will have access to landscaped podium areas, communal rooftop amenities with views to Mount Keira and the Wollongong skyline, and convenient ground-level retail.

The development will have 10-year Latent Defects Insurance by Resilience Insurance.

[smartcode_project_cta:default project_id=144442]

Groundbreaking marks start of construction at Keira Place in Wollongong CBD

Mortgage Delinquencies

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S&amp;P Global Ratings has reported that Australia's prime SPIN 30+ day delinquencies declined a little further from 1.08 per cent to 1.04 per cent in October 2017.
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31-60 day prime mortgage arrears have now been tracking at historic lows since June 2017.
There's still a bit happening in the 90+ days space, but arrears have been improving here too since May.
Year-on-year mortgage arrears were comfortably lower.
<a href="https://1.bp.blogspot.com/-KxfCYFuanl0/Wjgn0DCCqvI/AAAAAAAAnks/ALly7UBUGHcvhI-sIXAjjgrxzzHjIXxuQCLcBGAs/s1600/S%2526P%2BArrears.jpg" target="_blank"><img src="https://1.bp.blogspot.com/-KxfCYFuanl0/Wjgn0DCCqvI/AAAAAAAAnks/ALly7UBUGHcvhI-sIXAjjgrxzzHjIXxuQCLcBGAs/s640/S%2526P%2BArrears.jpg" width="640" height="380" data-original-height="800" data-original-width="1347"></a>
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<div>Declines were reported in all mainland states and territories. </div>
 <div><a href="https://2.bp.blogspot.com/-c-AKP9xZqh8/WjddO7rxMYI/AAAAAAAAnj4/lQtqxkBFhFUyC2hsBnDCSK4yElKrWBc6ACLcBGAs/s1600/SandP.jpg" target="_blank"><img src="https://2.bp.blogspot.com/-c-AKP9xZqh8/WjddO7rxMYI/AAAAAAAAnj4/lQtqxkBFhFUyC2hsBnDCSK4yElKrWBc6ACLcBGAs/s400/SandP.jpg" width="400" height="327" data-original-height="646" data-original-width="788"></a></div>
 <div>Source: S&amp;P Global Ratings</div>
 <div>Western Australia continued to have the highest rate of 30-day arrears, declining from 2.21 per cent to 2.12 per cent. </div>
<div> </div>
<div>The lowest rate of delinquency was to be found in the ACT at only 0.58 per cent (Canberra has <a href="http://petewargent.blogspot.co.uk/2017/11/drain-swamp" target="_blank">by far the highest incomes</a> on the country). </div>
<div> </div>
<div>In New South Wales 30-day arrears fell from 0.79 per cent to only 0.75 per cent in the month.</div>
<div> </div>
<div>Arrears were also below 1 per cent in Victoria and Tasmania. Over the past year the biggest improvers were the southern states of Tasmania and South Australia (the other ex-mining state jurisdictions had low arrears already). <div><a href="https://2.bp.blogspot.com/-z4KH6mQAhPg/Wjg08TYwYLI/AAAAAAAAnk8/r_3IgizuDq8j_7_DPiwD5DC_iYSh_KyYwCLcBGAs/s1600/S%2526P%2BState.jpg" target="_blank"><img src="https://2.bp.blogspot.com/-z4KH6mQAhPg/Wjg08TYwYLI/AAAAAAAAnk8/r_3IgizuDq8j_7_DPiwD5DC_iYSh_KyYwCLcBGAs/s640/S%2526P%2BState.jpg" width="640" height="386" data-original-height="787" data-original-width="1302"></a></div>
</div>
<div>As at the beginning of 2017, S&amp;P Global had reported: "We believe that the risk of a sharp, disorderly correction in house prices remains relatively low, reflecting our stable economic outlook for Australia." While risks remain, S&amp;P commented this month:</div>
<div> </div>
<div>"We do not expect arrears to increase much above current levels while benign economic conditions persist." </div>
</div>
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pwargent-M4siyDbqQY

Mortgage delinquencies decline further: Pete Wargent

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Westpac's Q3 financial update saw their mortgage delinquencies soar by 55 basis points due to the COVID-19 pandemic.
Delinquencies over 30 days jumped from 188 bps to 243 bps over the three months to June.
There was an equally big jump in 90+ day delinquencies, up from 94 bps to 149 bps.
"Our approach to applying COVID-19 relief meant an increased number of customers entered hardship assistance", Westpac advised.
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The big four bank provided 135,000 home loan customers with mortgage relief up to July 31, accounting for $51 billion of their $446 billion loan book.
64% of the mortgage holders seeking the relief were owner-occupiers, and 79 per cent were paying principal and interest repayments.
The mortgage deferrals primarily came from New South Wales and Victoria, who made up 70 per cent of all mortgages deferred.
<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/2020/8/18/deferrals%20by%20state%20Westpac.jpg" alt="">
After checking in after three months of the extension, Westpac said that half were expected to return to payment, and the other half requested a further three month extension.
That leaves $30 billion still on pause.
Westpac's total loan portfolio shrunk a touch over the three months to June, down from $445.7 billion to $445.5 billion.
<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/2020/8/18/Westpac%20loan%20book%20composition.jpg" alt="">
Owner-occupier numbers continued to grow, as investor loans continued their contraction, as did interest only loans, now below 22 per cent of Westpac's loan book.
More mortgage holders are now fixing their home loans, with record low rates on offer.
Although there's still no suggestion on the variable front that the RBA rates will hike rates for at least three years.
 
 
 
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jrobinson-rf4aSBido9

Westpac's mortgage delinquencies jump due to COVID-19

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In this economic environment, mortgage delinquencies will moderately increase, especially given that high household debt — which amounts to almost 190% of annual gross disposable income — will leave households financially vulnerable to economic and housing market shocks, according to Moody's Investor Service.
Moody's Investor Service foecast is for real GDP growth of 1.8% in 2020, lower than 2.0% in 2019. Unemployment will be relatively steady at 5.2% in 2020, from 5.1% in December 2019.1 
However, it is likely that most mortgage borrowers will be able to continue meeting their repayments at our forecast level of economic growth and unemployment, which means delinquencies will remain low overall.
Furthermore, historically low mortgage interest rates will support borrowers' abilities to repay mortgages.
In January 2020, month-on-month house prices in Sydney and Melbourne increased by 1.1% and 1.2% respectively.
Converting IO mortgages to principal/interest loans will increase delinquencies
The conversion of IO mortgages to principal and interest loans will cause some delinquencies in 2020, though this risk will diminish throughout the year. Banks originated a significant volume of IO loans in the first half of 2015. T
he five-year IO period for these mortgages will end in the first half of 2020. When such loans convert to principal and interest at the end of the IO period, borrowers must make higher monthly repayments, which can lead to delinquencies. 
Such risks will diminish through 2020, given that IO lending declined from the second half 2015.
Recent bushfires will have a negative but limited effect on RMBS performance 
The 2019-2020 bushfires will have a negative but limited effect on RMBS performance.
They have largely affected homes in rural and regional areas across Australia, while most of the loans in RMBS we rate have the backing of underlying properties located in major cities.
In addition, general home insurance, government/lender relief measures, as well as low average loan-to-value (LTV) ratios will mitigate risks for RMBS, by either helping to limit mortgage delinquencies or preventing them escalating to defaults and losses.
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j.ballantyne1990-6AQqhLzZaK

Delinquencies will moderately rise in 2020 but remain low: Moody’s Investors Service

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The NAB has advised its mortgage delinquencies are on the rise.
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The ratio of 90+ days past due and gross impaired assets to gross loans and acceptances increased from 0.79% to 0.85%, largely due to rising Australian mortgage delinquencies, it advised today.
The bank said asset quality overall remained broadly sound.
<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/2019/8/14/NAB%20arrears%20rise.jpg" alt="">
The acting chief Philip Chronican released its third quarter trading update this morning, reporting unaudited statutory net profits of A$1.70bn, and A$1.65bn in unaudited cash earnings – a 1% increase year-over-year.
Revenue also increased, as NAB continues to see robust growth in (SME) small business lending.
But Chronican noted there was a "backdrop of a challenging operating environment, including subdued home lending growth.
He advised the bank's 3Q19 performance compared with the 1H19 quarterly average was "solid," with revenue increasing and costs flat.
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Its seen a 27% reduction in over-the-counter transactions and an 18% reduction in call centre volumes.
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NAB mortgage delinquencies on the rise

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Australian RMBS delinquency rates, which rose slightly over the three months ended 31 March 2019, will continue to increase over coming quarters, according to the latest report from Moody's Analytics.
They believed arrears will rise because of high debt levels, the conversion of a large number of interest-only mortgages to principal and interest loans and declining house prices.
They suggested however that delinquency rates will only increase moderately, given stable GDP growth, low unemployment and recent interest rate cuts.
The 30+ day delinquency rate for prime Australian RMBS was 1.58% in March 2019, compared with 1.54% in December 2018 and 1.48% in March 2018.
For prime RMBS issued by major banks, the 30+ day delinquency rate was 1.75% in March 2019 compared with 1.72% in December 2018.
For regional banks, the delinquency rate was 1.65% in March 2019, unchanged from December 2018, while for prime RMBS issued by other authorised deposit-taking institutions, the delinquency rate was 0.54% in March 2019, compared with 0.50% in December 2018.
The 30+ day delinquency rate for non-conforming RMBS was 3.75% in March 2019, up from 3.23% in December 2018 and 3.05% in March 2018.
Alena Chen, Vice President of Moody’s said, "over coming quarters, we expect Australia's record-high household debt, which amounts to almost 200% of annual gross disposable income, will contribute to a moderate increase in delinquencies."
"Meanwhile, a large number of interest-only mortgages are due to convert to principal and interest loans by the end of 2020, which will cause some delinquencies over this period. Banks originated a significant volume of interest-only loans in 2014 and 2015," she said,
The five year interest-only period for these mortgages will end in 2019 and 2020.
When interest-only loans convert to principal and interest, borrowers have to make higher monthly repayments, which can lead to delinquencies.
Commonwealth Bank saw a rise in arrears in their <a href="/news/cba-arrears-rise-but-home-loan-book-continues-to-grow-slowly">March quarter results</a>.
Banks have already started trying to limit a large impact of moving mortgage holders from interest only to P&amp;I.
This time last year ANZ had 26 percent of their loan book made up of IO loans. They <a href="/expert-insights/finance/anzs-home-loan-portfolio-shows-big-drop-in-interest-only-borrowers">reduced that number to 18%</a> as of May.
NAB have an unhealthier <a href="/news/nab-housing-lending-revenue-continues-to-drop-and-shareholders-pay-the-price">26% of their loan book</a> given to interest-only loans.
Chen said Moody's expect house price declines to lead to a moderate increase in mortgage delinquencies over coming quarters."
"House prices in Australia declined by an average of 7.3% in the 12 months to 30 May 2019, while in Sydney and Melbourne, prices declined by an average of 10.7% and 9.9% respectively."
"We expect prices to continue to decline moderately over the remainder of 2019." she said.
Mortgage delinquencies will only increase moderately, while defaults and losses will remain low, given that continued GDP growth, low unemployment and recent interest rate cuts will support borrowers' ability to meet their mortgage repayments.
Moody's Investor Service forecast's real GDP growth of around 2.5% in both 2019 and 2020.
Australia's unemployment rate was 5.2% in April 2019 and they expect it will remain relatively stable at 5.5% by the end of 2019 and 2020.
In early June, the Reserve Bank of Australia lowered the cash rate by 0.25 percentage point, which prompted most lenders to lower their floating-rate mortgage interest rates.
To see which banks decided to pass on the full rate cut, <a href="/expert-insights/finance/what-are-the-latest-home-loan-cuts-and-whos-making-them">click here</a>.
 
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Australian RMBS delinquency rates to keep rising: Moody's

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Australian mortgage delinquencies, which increased over the year to November 2018, will continue to increase through 2019, according to Moody's Investors Service latest delinquency report.
"Mortgage delinquencies will continue to increase over 2019, because of high debt levels, subdued wage growth, the conversion of a large number of interest-only mortgages to principal-and-interest loans and declining house prices," says Alena Chen, a Moody's Vice President and Senior Analyst. 
"However, delinquencies will remain low overall, given the rate of economic growth and low unemployment, which will continue to support borrowers' ability to meet their mortgage repayments," says Chen. 
<a href="https://www.propertyobserver.com.au/images/2019/4/3/moody%201.jpg" target="_blank">Click here </a>to enlarge
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The proportion of Australian residential mortgages that were more than 30 days in arrears increased by 0.13 percentage point to 1.58% over the year to November 2018.
Mortgage delinquencies increased in New South Wales (NSW), Victoria, Western Australia, Tasmania, South Australia, Australian Capital Territory and Northern Territory over the year to November 2018, but declined in Queensland.
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In NSW, the delinquency rate increased to the highest in five years, though it remains relatively low compared with most other states and territories and NSW's long-term average.
Regions with exposure to the mining sector continued to dominate the list of areas with the highest delinquencies. 
Moody's semi-annual delinquency map report provides a detailed analysis of the rate of residential mortgage arrears at a national, regional and postcode level in Australia. 
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Mortgage delinquencies set to continue rising through 2019: Moody's

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Mortgage delinquencies and defaults are more likely to occur in outer suburbs of Australian cities than inner-city areas, according to Moody's Investor Service.
They suggest that this is because of the lower average incomes and weaker credit characteristics in these suburbs.
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On average across Australian cities, mortgage delinquency rates are lowest in areas within five kilometres of the CBD and highest in areas 30-40 kilometres from CBDs (below).
Moody's suggest this trend is likely to continue into the foreseeable future with little changing in way of incomes and credit characteristics.
Click here <a href="https://www.propertyobserver.com.au/images/2018/10/10/Moodys1.jpg" target="_blank">to enlarge.</a>
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In most Australian capital cities, delinquency rates are highest in areas the furthest away from the CBD (below).
Sydney's delinquency rates grow steadily the further away from the CBD the property is, however in Melbourne, Brisbane, Adelaide and Perth, delinquency rates in suburbs closest to the city centre are slightly higher than those a little further out.
This is due to the high share of mortgages on investment properties in areas closest to the city.
Within five kilometres of the Melbourne CBD, delinquent investment loans account for 57% of all mortgage delinquencies.
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Click here <a href="https://www.propertyobserver.com.au/images/2018/10/10/moodys2.jpg" target="_blank">to enlarge.</a>
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Incomes and socioeconomic conditions are lower in outer suburbs, while credit characteristics are weaker.
Average incomes are lower in outer suburbs than in inner-city areas, while socioeconomic conditions are also typically weaker in outer areas. These factors increase the likelihood of mortgage delinquencies and defaults, particularly in the event of an economic downturn. 
In all Australian capital cities, average incomes decline with distance from the CBD (below), a fact that reflects the higher proportion of people employed in low-skilled jobs in these areas.
Click here <a href="https://www.propertyobserver.com.au/images/2018/10/10/Moodys3.jpg" target="_blank">to enlarge.</a>
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Mortgage delinquencies are higher in city's outer suburbs: Moody's

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Australian RMBS delinquency rates will rise moderately over coming quarters, with high debt levels and higher interest rates putting pressure on mortgage borrowers, according to the latest RMBS report from Moody's.
This is despite delinquency rates being broadly stable over the three months ended 30 June 2018.
The 30+ day delinquency rate for prime RMBS was 1.52% in June 2018, compared with 1.5% in March 2018 and 1.6% in June 2017.
<img src="https://www.urban.com.au/images/2018/9/24/RMBS%20Moodys.JPG" alt="">
For prime RMBS issued by major banks, the 30+ day delinquency rate was 1.58% in June 2018 compared with 1.57% in March.
For regional banks, it remained flat at 1.99%, while for prime RMBS issued by other authorised deposit-taking institutions, the delinquency rate was 0.57% in June, compared with 0.51% in March.
The 30+ day delinquency rate for non-conforming RMBS was 3.16% in June 2018, compared with 3.05% in March 2018 and 3.41% in June 2017.
Moody's noted, "over coming quarters, we expect delinquencies to increases moderately, given Australia's record-high household debt, which amounts to 190% of annual gross disposable income."
High debt increases the risk of delinquencies, especially in a rising interest rate environment.
The report stated, "in late August and September, a number of Australia's major banks raised home loan interest rates, though we do not expect this round of rate rises to result in a significant increase in mortgage delinquencies, given that labour market conditions remain favourable and the rate increases were small compared with buffers built into home loan serviceability assessments."
A large number of interest-only mortgages are due to convert to principal and interest loans over the next two years, which will contribute to an increase in delinquencies over this period, according to Moody's data.
Banks originated a significant volume of interest-only loans in 2014 and 2015.
The five year interest-only period for these mortgages will end in 2019 and 2020.
The report also stated, "when interest-only loans convert to principal and interest, borrowers have to make higher monthly repayments, which can lead to delinquencies."
"On the positive side, economic and labour market conditions in Australia will continue to support borrowers’ ability to meet mortgage repayments over the next year, meaning that the increase in delinquencies will be moderate," they suggested.
Moody's forecasts real GDP growth of around 2.9% for calendar 2018 and 3% for 2019.
Australia's unemployment rate was 5.4% in June and we expect it will remain relatively stable at 5.6% by the end of 2018 and 5.5% at the end of 2019
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Australian RMBS home loan delinquencies to rise moderately over 2018: Moody's

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Lalor Park, Prestons and Casula have been ranked the suburbs with the most distressed listings in New South Wales.
Lalor Park ranked as the nation's most distressed suburb, according to Investar.
It suggests Lalor Park's has discounted listings which accounts for 60 per cent of the total.
The postcode 2147's house listings are typically for sale for 106 days.
The suburb's median house sits at $680,000, with 6.33 per cent growth over the past year.
Its median rent sits at $430 per week, with 2.38 per cent increase over the past year.
The rental yield sits at 3.3 per cent.
The Preston postcode 2170's house listings are typically for sale for 122 days.
The suburb's median house price sits at $880,000, which has grown by 2.3 per cent over the past year.
Its median rent sits at $650 per week, with 4.8 per cent growth over the past year.
The rental yield sits at 3.8 per cent. 
The Casula postcode 2170's house listings are typically for sale for 175 days.
The suburb's median house price sits at $512,500, which has grown by 6.1 per cent over the past year.
Its median rent sits at $395 per week, with 1.3 per cent decrease over the past year.
The rental yield sits at 4 per cent. 
 
 
 
 
 
 
 
 
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Lalor Park, Prestons and Casula rank as the most distressed suburbs in New South Wales 

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Six postcodes had zero mortgage delinquencies in November 2017, making them the best performing in the country.
Ten of the 20 best-performing postcodes in Australia were in Sydney, while six were in Melbourne.
Click here <a href="https://www.propertyobserver.com.au/images/2018/4/12/BEST%20POSTCODE.jpg" target="_blank">to enlarge.</a>
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Most best-performing postcodes were located in capital city regions where employment is concentrated in professional services.
The weighted average current loan to value ratios for the best performing regions were typically lower than the national average of 63.2%.
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