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

Joel Robinson

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

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

Sammut secures approval for debut Brisbane apartment development in Toowong

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

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

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

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

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

WM Residences fills gap in Mordialloc townhouse market

Mortgage Lending

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The value of lending commitments to households, as well as the number of home loans approved, fell in December 2018, according to the Australian Bureau of Statistics.
The fall in the value lending to households in December (4.4 percent), follows a 2.4 percent fall in November 2018. 
The number of home loan approvals also saw a hit, falling a seasonally adjusted 6.1 percent in December from November.
Economists had expected a two percent fall in lending over the month.
The number of loans to owner occupier first home buyers is now down 12.6 percent from December 2017.
Click here <a href="https://www.propertyobserver.com.au/images/2019/2/12/Lending-ABS.jpg" target="_blank">to enlarge</a>.
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2019/2/12/Lending-ABS.jpg" alt="">
Bruce Hockman, ABS chief economist, said large falls in the value of lending for owner occupier dwellings and investment dwellings drove the fall in lending commitments.
Owner occupier dwellings decline 6.4 per cent and investment dwellings were down 4.6 per cent. "The slowdown in lending for investor dwellings this month continues the steady decline over the past two years, with the value of new investor loan commitments down around 40 percent from the peak at the start of 2017.
"The slowdown in lending for owner occupier dwellings is more recent, with falls concentrated in the last half of 2018", he said. 
 
 
 
 
  
 
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jrobinson-rf4aSBido9

Number and value of loans decline further December: ABS

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Westpac chief executive Brian Hartzer has rejected claims that the big four banks are worsening the housing price slump by cutting off credit.
"Let's be clear: we want to lend", Hartzer said in his opinion column in the Australian Financial Review.
"For Westpac, the recent decline in credit growth was due entirely to a reduction in new applications; average approved loans sizes actually increased slightly, while our approval rates remained unchanged".
"As to the perception that the royal commission has made banks scared to lend, for Westpac this is simply not the case", Hartzer said.
Hartzer did suggest the increase in scrutiny of customers' expenses and income, plus the building of additional buggers into loan serviceability calculations, had added to the time and cost of getting a loan.
"My view is that the housing market remains fundamentally sound and, overall, the adjustments are nothing to be alarmed about."
Median house prices in Sydney fell 10 percent in 2018, according to CoreLogic, while the second biggest capital housing market Melbourne saw 9.1 percent falls, accelerated in the latter part of the year.
Hartzer said the falls needed to be seen in the context of a 75 percent jump in Sydney prices between 2011 and 2017, and a 55 percent rise in Melbourne prices over the same period.
He cautions that investors have been given further "reason to pause", ahead of the looming general election and Labor's proposed tightening of tax breaks for negatively geared property.
He said "uncertainty around potential taxation changes relating to residential property" was weighing on demand from property investors while buyers were putting off decisions to buy, upgrade or invest until after the election. 
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j.ballantyne1990-6AQqhLzZaK

Westpac boss Brian Hartzer rejects blame for worsening housing price slump

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Fasten your safety belts for a nasty downturn.
That's the warning from The Australian columnist Robert Gottliebsen.
"My fear is that on top of the APRA squeeze, we will have royal commission recommendations and then a series of class action court cases against banks.
"Combined, they will deepen and extend the credit squeeze.
"If the vicious downward spiral was broken today there would be minimal damage.
"But the squeeze looks like not only continuing but getting worse.
"If that happens, fasten your safety belts for a nasty downturn," he wrote earlier this week in the national newspaper.
Robert Gottliebsen says the credit squeeze juggernaut is being driven by the regulators, led by APRA.
He says bank chief executives, bank boards with greatly reduced power and the local bank branch managers are scared by what they describe in low tones as the APRA “Gestapo”.
"There is no doubt that APRA is the main force behind the credit squeeze.
"Unless much clearer boundaries are drawn, APRA, aided by the royal commission, will drive house prices lower and lower and construction rates will fall."
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Bank lending squeeze heading for nasty property and construction downturn: Robert Gottliebsen

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Banks will start sharing lending data ahead of comprehensive credit reporting from next July covering the entire financial system.
"Suddenly banks will discover when they have been hoodwinked by borrowers using multiple banks," The Australian columnist Robert Gottliebsen warns.
"The bottom line is that bank lending for housing will fall further and so will prices in vulnerable areas."
His recent column noted the credit squeeze is already reducing dwelling prices and there is more to come.
The tough times in many areas of real estate (but not all) will continue until the squeeze is reversed, he wrote.
"At this stage there is no crash on the horizon.
"But those dwelling price falls will in time reduce consumer confidence and the price of shares in companies affected by consumer confidence."
Gottliebsen noted that Westpac was the most aggressive of lenders to housing investors.
He noted the fastest-growing area of loans was 'interest only' and Westpac led the pack.
"There has been a huge crackdown and these loans are being converted to interest-and-principal repayments."
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Bank lending for housing will fall further after comprehensive credit reporting: Robert Gottliebsen

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Thousands of potential Sydney upsizing vendors are not going anywhere this spring, being trapped in their current home with their current financing.
All due to tighter home loan lending restrictions that leaves them unable to negotiate the required funds to upsize.
Indeed many of these home owners would not be able to get the same existing loan amount if they tried, and not just because of weak income growth.
Stricter lending rules are a good thing, especially at a time of historically low interest rates, but they will continue to be a major brake on buyer potential to bid for property.
This means fewer offers from finance approved buyers which means the galloping price growth seen during the five year boom just won't happen.
The size of the imminent spring price falls will depend, in part, on just whether downsizing vendors seek to sell at a discount to recent values.
I think sales activity levels will remain subdued.
With very high household debt, these stricter lending criteria were introduced for good reason by the regulatory authorities over the past four years.
The unexpected royal commission into finance has extenuated the tightening by lenders.
Gone is the one size fits all approach which saw inflated amounts being lent to desirous home buyers.
Lenders now look thoroughly at the applicant's income and expenses - everything from utility bills, childcare, Netflix subscriptions, education, insurance, telephone and internet, groceries and medical, health and disability requirements. Even beauty treatments.
The regulator also now expects lenders to discount uncertain or variable income by at least 20%, including any rental income for investment properties.
Mozo finance commentator Steve Jovcevski suggests stay put home owners are also struggling to refinance their way into better mortgages. 
He nominated a couple with one dependent and a dual income of $120,000 who purchased a home in 2013, borrowing $800,000.
Their $4,295 monthly repayments leaves them $3,680 to manage their other expenses.
Fast forward five years, the couple now has a $129,000 combined salary and they've had another child.
They're still paying the same amount, have $734,600 left to pay off, and would like to refinance to closer to the 3.8% on offer rather than staying with their current 5% rate.
When they secured their 2013 loan, the bank used a poverty line index to estimate their costs ($3,276 per month) with a buffer of 1.5% to ensure the couple could meet their repayments if rates increase.
The bank now defines their actual expenses as being $4000 per month, and applies a 2% buffer.
Under the new criteria the refinancing couple can only borrow $680,000.
These home owners have been dubbed 'mortgage prisoners', unable to move to a more competitive mortgage deal, even if they’ve met every repayment, because they would not pass new affordability tests.
The banks would like to continue their loan growth, but for the penalties being handed out for breaches against their responsible lending obligations.
The best poised spring buyers are likely stumping up a near 20% deposit.
And have done a through spring clean of their finances, including getting rid of excess credit cards, which are a negative on their credit ranking.
Find a good mortgage broker too.
This article first appeared in The Daily Telegraph. 
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jchancellor-FAypfDUnLy

New financing restrictions leading to 'mortgage prisoners'

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A review by ASIC has found that reverse mortgages are allowing older Australians to achieve their immediate financial goals – improving their lifestyles in retirement – but longer-term challenges exist.
For older Australians who own their home with few other assets, a reverse mortgage can allow them to draw on the wealth locked up in their homes, while they continue to live in their property.
ASIC reviewed data on 17,000 reverse mortgages, 111 consumer loan files, lender policies, procedures, and complaints. We also commissioned in-depth interviews with 30 borrowers and consulted over 30 industry and consumer stakeholders.
The review found borrowers had a poor understanding of the risks and future costs of their loan, and generally failed to consider how their loan could impact their ability to afford their possible future needs. Lenders have a clear role to play here and need to do more: for nearly all of the loan files we reviewed, the borrower’s long term needs or financial objectives were not adequately documented.
<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/2018/8/28/asic%201.jpg" alt="">
Importantly, under legal protections in place since 2012, borrowers can never owe the bank more than the value of their property, and can remain in their home until they pass away or decide to move out. However, depending on when a borrower obtains their loan, how much they borrow, and economic conditions (property prices and interest rates), they may not have enough equity remaining in the home for longer term needs (e.g. aged care).
ASIC Deputy Chair Peter Kell said “Reverse mortgage products can help many Australians achieve a better quality of life in retirement.”
“But our review shows that lenders and brokers need to make inquiries that would lead to a genuine conversation with customers about their possible future needs, not just a set of tick boxes on a form.”
ASIC’s report also finds that there is an opportunity for lenders to reduce the risk of elder abuse. Under the new Code of Banking Practice, recently approved by ASIC, banks will be required to take extra care with customers who may be vulnerable, including those who are experiencing elder abuse.
Consumers also had limited choices for finding a reverse mortgage. Several providers withdrew from the market after the global financial crisis. From 2013 to 2017, two credit licensees provided 80% of the dollar value of new loans from 2013 to 2017.
<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/2018/8/28/asic%202.jpg" alt="">
Background
Reverse mortgages are a credit product that allows older Australians to borrow using the equity in their home. The loan does not need to be repaid until a later time, typically when the borrower has vacated the property or passed away. They are a more expensive form of credit compared to standard variable owner occupier home loans; the interest rates are typically 2% higher and, as there are no repayments required, interest compounds. 
Consumer demand for reverse mortgages has grown gradually since the global financial crisis, with the total exposure of ADIs to reverse mortgages increasing from $1.3 billion in March 2008 to $2.5 billion by December 2017.
ASIC commenced a review of lending practices and consumer outcomes in the reverse mortgage market to proactively examine issues that might emerge for older Australians.
As part of this review, we evaluated the effectiveness of enhanced responsible lending obligations for reverse mortgages which were introduced five years ago into the National Consumer Credit Protection Act 2009 (National Credit Act).
This review examined five brands, who collectively lent 99% of the dollar value of approved reverse mortgage loans in 2013-17. These brands were: Bankwest, Commonwealth Bank, Heartland Seniors Finance, Macquarie Bank and Westpac (comprising St George Bank, the Bank of Melbourne and BankSA). As of late 2017, Macquarie Bank and Westpac are no longer providing new reverse mortgages.
This project forms part of ASIC's broader work for older Australians to help bring about positive changes for these consumers in credit and financial services: see REP 537 Building seniors’ financial capability report 2017 and REP 550 ASIC’s work for older Australians.
ASIC’s MoneySmart website has information for consumers about reverse mortgages. Consumers can also use MoneySmart's reverse mortgage calculator to see how a reverse mortgage can impact the equity in their home. 
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ASIC issues reverse mortgage lending warning

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EXPERT OBSERVER
<div>Total seasonally adjusted housing finance resumed its slowdown in declining by 1.6 per cent to $31.23 billion in June 2018, with slower mortgage processing times and tighter lending procedures biting.</div>
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<div>You might argue the toss over the classification of loans between investors and owner-occupiers, but the smoothed trend figures for total housing finance confirmed a continuing decline for an 11th consecutive month. </div>
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<div>Housing finance tends to have a fairly good correlation with dwelling price action, though economists try a bit too hard on this point, curve-fitting charts with warped y-axes trying to prove a faultless correlation that doesn't quite exist. </div>
<div> </div>
<div>There are more factors at play, of course, as the residents of Hobart, Geelong, or indeed many suburbs of Brisbane would attest. The share of the stock of outstanding loans pertaining to investors continued to decline on the ABS numbers, broadly mirroring what has been reported by the Reserve Bank. </div>
<div> </div>
<div>State versus state (macropru hurts WA)</div>
<div> </div>
<div>New South Wales has seen an ongoing trend decline in the number of owner-occupier commitments, with Queensland the only state to record an increase in the month of June (up 2.1 per cent). </div>
<div> </div>
<div>Sydney's housing market downturn has now spanned 12 months, the same length of time as the 2008-9 downturn, and already longer than those seen in 1985, 1994-95 and 2015-16 respectively (hat tip to Cameron Kusher of CoreLogic for the stats). </div>
<div> </div>
<div>One of the consequences of macroprudential measures has been to hinder markets that are already struggling.</div>
<div> </div>
<div>In Western Australia the number of home loans dropped to 4,602 in June, the lowest figure since May 1995 (when the population of the state was 1.7 million, compared to 2.6 million today, as highlighted by Shane Wright of the West Australian). </div>
 
<div><a href="https://4.bp.blogspot.com/-PA8_Q5rUHWs/W2q05d2JAPI/AAAAAAAArb4/UpthfNlEW4Q-w52DCPEdAMvhVQAlfRUGACLcBGAs/s1600/HF2.jpg"><img src="https://4.bp.blogspot.com/-PA8_Q5rUHWs/W2q05d2JAPI/AAAAAAAArb4/UpthfNlEW4Q-w52DCPEdAMvhVQAlfRUGACLcBGAs/s640/HF2.jpg" width="640" height="370" data-original-height="791" data-original-width="1361"></a></div>
<div>While some applications are clearly being knocked back, for borrowers of sound credit quality, there is robust competition from lenders.</div>
<div> </div>
<div>Indeed, the average loan size remains 5.6 per cent higher than a year earlier. </div>
<div> </div>
<div>First homebuyers accounted for more than 18 per cent of owner-occupier commitments, a 6-year high, with the average loan size at $349,800 the highest figure recorded for any month to date. </div>
 
<div><a href="https://2.bp.blogspot.com/-JkWsPF8C85A/W2q05TCi2uI/AAAAAAAArb0/2ViXbcb80kc1Krt7TcbgC-vp9HC5fGUowCLcBGAs/s1600/HF3.jpg"><img src="https://2.bp.blogspot.com/-JkWsPF8C85A/W2q05TCi2uI/AAAAAAAArb0/2ViXbcb80kc1Krt7TcbgC-vp9HC5fGUowCLcBGAs/s640/HF3.jpg" width="640" height="370" data-original-height="804" data-original-width="1390"></a></div>
 There was a sharp 4.9 per cent drop in the number of commitments for new dwellings. Non-banks emerge
<div>A final point for today: Commonwealth Bank's release noted a loss of market share, a trend which is being echoed across the major banks.</div>
<div> </div>
<div>The trend in non-bank lending on the other hand is benefitting entities such as Liberty Financial, Pepper, Firstmac, RESIMAC, and others.</div>
 
<div><a href="https://1.bp.blogspot.com/-6DEfTzpqOjI/W2q77TZr5WI/AAAAAAAArcY/6ZDWrIe6yX8wi-5Ep0d90bVnH5hBA_LjwCLcBGAs/s1600/HF4.jpg"><img src="https://1.bp.blogspot.com/-6DEfTzpqOjI/W2q77TZr5WI/AAAAAAAArcY/6ZDWrIe6yX8wi-5Ep0d90bVnH5hBA_LjwCLcBGAs/s640/HF4.jpg" width="640" height="378" data-original-height="792" data-original-width="1337"></a></div>
The wrap Soft housing finance result for June, and more softness is certainly expected for July. How long the tightness in lending persists is unclear, but it's all pointing down at the moment.
PETE WARGENT is the co-founder of AllenWargent property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank">blogger</a>.
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pwargent-M4siyDbqQY

Housing finance resumes slowdown: Pete Wargent

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EXPERT OBSERVER
Borrowers continue to choose variable rate home loan products as demand for fixed rate home loans fell for the eigth consecutive month.
Variable rate home loans accounted for over 82% of all home loans written throughout May 2018 – up over 2% from the month prior, and almost 7% higher than the 12-month average. This trend will continue as borrowers develop apathy towards the Reserve Bank of Australia’s stagnant cash rate.   Indeed, we continue to see borrowers opt for the flexible nature of variable rate home loans which may offer a redraw facility, offset accounts and the ability to make extra repayments. These features are not typically associated with fixed rate loans.
Click here <a href="https://www.propertyobserver.com.au/images/2018/6/14/choice1.jpg" target="_blank">to enlarge.</a>
<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/2018/6/14/choice1.jpg" alt=""> While a fixed rate product provides repayment certainty, variable home loan rates have been relatively stable for a prolonged period of time giving borrowers little incentive to fix. This week’s Housing Finance data from the Australian Bureau of Statistics found that 52,116 home loans were approved throughout April, down 1.4% from the previous month. Unsurprisingly, the value of investment loans dipped somewhat, falling 0.9% to $10.7 billion in April, which could reflect tighter lending standards and serviceability policies. However, May data may show an increase in investment loans following APRA lifting the cap on investor loan growth at the end of April. ABS data also shows the value of owner-occupied housing loans in April rose just 0.2% to $20.9 billion.
Click here <a href="https://www.propertyobserver.com.au/images/2018/6/14/choice2.jpg" target="_blank">to enlarge.</a>
<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/2018/6/14/choice2.jpg" alt="">   The data also showed, in original terms, the number of first home buyer commitments as a percentage of total owner-occupied housing finance commitments rose to 17.6% in April 2018 from 13.7% in January 2018.
This increase is significant and first home buyers seem to be propping up the market.     Looking ahead, I expect to see a combination of factors, such as historically low interest rates, easing property prices and access to FHOGs, to maintain home loan demand - whether variable or fixed - but preparation is key.   With increased scrutiny on lending practices, buyers looking to secure housing finance should take practical steps to improve their serviceability and speak to their local mortgage broker, who can help take the guesswork out of the process and find the right financial product for their personal circumstances.
Susan Mitchell is the CEO of Mortgage Choice.
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Borrowers choose flexibility over certainty: Mortgage Choice

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Digital Finance Analysts' Martin North has noted credit is harder to get. 
The surveys conduction by DFA show that up to 40 percent of applications for mortgages are now being turned down, compared with just five percent a year ago, as lenders apply more forensic analysis of applications received.
This was triggering weaker conditions in Sydney and Melbourne.
He noted CBA is now looking at applications with a loan to income of 4.5 times and above.
"I am getting more reports of households who are finding their available borrowing power is as much as 35 percent down on a year ago."
So North suggests unlike the small correction which occurred to the CoreLogic Index in 2015, as credit was harder to get briefly, and which reverted a few months later, it would be "different this time."
He referred to the enhanced focus on mortgage lending serviceability means that a consideration of the loan to income ratio or LTI is ever more important.
In the UK, where LTI calculations are the norm, the Bank of England first introduced limits on high LTI mortgages in 2014.
These measures meant that no more than 15 per cent of mortgages issued should exceed a loan-to-income ratio of 4.5. 
The UK’s 4.5 LTI cap on 85 per cent of new lending is still in place. In June last year, Bank of England governor Mark Carney announced that the 4.5 ratio “insurance measures” will become “structural features of the UK housing market.
"It should be of no surprise to note that the Commonwealth Bank of Australia has announced that it has brought in its new debt-to-income measurement for borrowers," North blogged.
CBA, who is the largest owner occupied mortgage lender in Australia has disclosed that it will now “monitor” loan applications with a debt-to-income ratio higher than 4.5 and will also bring in a new e-learning requirement for brokers that have not settled a CBA loan for more than a year.
Applications with a DTI higher than 7 will be subject to a manual credit approval check.
North estimates across the country around 7.9% of all loans have a current loan to income ratio of 6 times or more.
"But the prize goes to New South Wales with a massive 15.8% of households currently holding loans with a loan to income ratio of 6 or more. This is of course explained by the high prices, big mortgages, and lose lending standards," he says.
 It is 7.1% of households in Victoria holding a loan to income ratio of 6 times or higher.
A recent borrowing sample was done by commentator Lindsay David at LF Economics on the Aussie Home Loan lending calculator site that showed how much the money on offer had dropped over recent years.
David's first image (below), is the figures of lending at an interest rate of 4.94 percent with a salary of $100,000 two years ago.
Aussie's online calculator advised it would be willing to lend up to nearly $825,000 two years ago.
Click here <a href="https://www.propertyobserver.com.au/images/2018/5/10/aussie2016.jpg" target="_blank">to enlarge.</a>
<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/2018/5/10/aussie2016.jpg" alt="">
Fast forward two years and the mortgage lending giant are willing to offer over $200,000 less to the same borrower type.
Click here <a href="https://www.propertyobserver.com.au/images/2018/5/10/AUSSIE-2018.jpg" target="_blank">to enlarge.</a>
<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/2018/5/10/AUSSIE-2018.jpg" alt="">
 
North looked at the RBA released their credit aggregates to April 2018. 
He noted total mortgage lending rose $7.2 billion to $1.76 trillion, another record.
 Within that, owner occupied loans rose $6.4 billion up 0.55%, and investment loans rose just 0.14% up $800 million. 
 Personal credit fell 0.3%, down $500 million and business lending rose $6.3 billion, up 0.69%. 
The annualised stats show owner occupied lending is still running at 8%, while business lending is around 4% annualised, investment lending down to 2.3% and personal credit down 0.3%.  On this basis, household debt is still rising. 
But the Bank lending data from APRA showed that tighter lending standards are biting.  
"In fact, Westpac apart, all the majors reduced their investor property lending in April," North noted.
 Owner occupied loans grew by 0.29% or $3.1 billion to $1.07 trillion while investment loans fell slightly, down 0.01% or $42 million.  
As a result, the relative share of investment loans fell to 34.14%.
 
 
 
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40 percent of loan applications are being turned down as credit squeeze hits would be-borrowers

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Interest-only loans fell sharply in the quarter ended September due to the Australian Prudential Regulation Authority’s steps to limit the high percentage of these risky loans by banks. 
APRA’s September Quarterly ADI Property Exposures data shows interest-only loans have fallen to 16.91 per cent of new lending, down from 30.50 per cent last quarter, a drop of 44.84 per cent and a historic low in terms of percentage share.
The big four banks have reduced the share of new interest-only loans to 16.69 per cent, down from 31.47 per cent in the June quarter, a drop of 48.65 per cent, RateCity said in a media release, citing APRA data.
RateCity.com.au money editor Sally Tindall said the results were an emphatic win for APRA which, in March, had demanded banks limit interest-only terms to 30 per cent of all new lending.
“Today’s data is a slam dunk for APRA,” she said.
“This has been a colossal turnaround in the way banks view interest-only terms.”
<a href="https://www.propertyobserver.com.au/images/2017/12/5/RateCity1.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/12/5/RateCity1.png" alt="">
<a href="https://www.propertyobserver.com.au/images/2017/12/5/RateCity2.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/12/5/RateCity2.png" alt="">
In June 2015, 45.65 per cent of all new loans approved by banks were interest-only. Today this has been reduced to under 17 per cent, she added.
“The RBA will also be relieved to see people committing to paying down their debt. Our household debt to income ratio is at a record high.
“This move away from interest-only lending should help bring this ratio down to more realistic levels.
“While new lending has been slashed, the banks still have a way to go to budge existing mortgage holders,” she said.
The latest APRA figures show that 35.35 per cent of all loans are still interest-only, a modest six per cent drop over the quarter.
RateCity data shows that on average banks are charging between 30 and 35 basis points more for interest-only lending, however this hasn’t promoted the majority of existing borrowers to start paying down their debt.
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