<p>A long-stalled Mermaid Beach development site opposite Pacific Fair, previously earmarked for a twin-tower project, is set for a fresh development push with plans for a major mixed-use residential tower.&nbsp;</p>

<p>Billionaire garbo Ian Malouf's development company, REMI Residences, is proposing Project Elegance, a 44-storey tower with over 270 residential apartments and 88 short-term accomodation units at&nbsp;2065 Gold Coast Highway, Mermaid Beach, on the corner of Mermaid Avenue.</p>

<p>Malouf paid $23.76 million for the 3,783 sqm site in 2022, six years after it traded for $34.1 million when it was bought by Hubei United Investment Group.</p>

<p><br />
<span aria-label="First Look: REMI Developments plans major mixed-use tower with 360 apartments at stalled Mermaid Beach site image widget" contenteditable="false" role="region" tabindex="-1"><img alt="First Look: REMI Developments plans major mixed-use tower with 360 apartments at stalled Mermaid Beach site" data-entity-type="" data-entity-uuid="" data-widget="image" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Mermaid%20Beach%20da%20podium.png?VersionId=yRYSSPItvCA5ZeQ49LlwkQYVn7OhEqIC" /><span style="background: url(&quot;https://d9.urban.com.au/core/assets/vendor/ckeditor/plugins/widget/images/handle.png&quot;) rgba(220, 220, 220, 0.5); top: -15px; left: 0px;"><img alt="" data-entity-type="" data-entity-uuid="" draggable="true" height="15" role="presentation" src="data:image/gif;base64,R0lGODlhAQABAPABAP///wAAACH5BAEKAAAALAAAAAABAAEAAAICRAEAOw==" title="Click and drag to move" width="15" /></span></span></p>

<p>&nbsp;</p>

<p>The design statement by DKO says Project Elegance "represents a holistic response to its coastal and urban context. It draws upon site, climate, and landscape to create a composed architectural outcome that prioritises occupant experience, public interface, and long-term viability via vibrant and active uses."</p>

<p>They say the subject site&nbsp;occupies a distinctive island parcel with three street frontages and prominent visual exposure to passing visitors.</p>

<p>"This unique position allows the development to form a panoramic dialogue with water and city, setting the foundation for a climate-responsive, site-specific architectural expression.&nbsp;The podium base, inspired by the region’s sandstone headlands and coastal setting, and adopts a sculpted and grounded character that provides a stable counterpoint to the slender tower above."</p>

<p>&nbsp;</p>

<p><img alt="First Look: REMI Developments plans major mixed-use tower with 360 apartments at stalled Mermaid Beach site" data-entity-type="file" data-entity-uuid="4f088e10-6493-49d4-83cd-10fc039318ac" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Mermaid%20Beach%20da%20tower.png?VersionId=Sbglj0tNBqyvY5V_DlVH.bvjXi8kBbfl" /></p>

<p>Residents and guests would have access to multiple communal recreation levels. Plans include a shared recreation deck on level six, with a pool and three padel courts. There will be a residential-only pool on level seven, and an upper-level communal space only accessible by those buyers towards the top of the tower.</p>

<p>&nbsp;</p>

<p>Ground-floor commercial spaces are proposed to operate between 5am and midnight, contributing to an activated street frontage along the busy Gold Coast Highway corridor.</p>

<p>The site sits within the High Density Residential zone and a Light Rail Urban Renewal Area, where planning policy encourages higher-density development close to transport infrastructure and services. The planning report states the project aims to “ensure the efficient reuse of this centrally located property” and support the transformation of inner-city areas into “more vibrant, compact, interesting, connected and active” precincts.</p>

<p>&nbsp;</p>

<p>The proposal marks the latest attempt to unlock the high-profile parcel, which previously carried approval for the “Elegance” twin-tower development, a project that included more than 500 apartments but ultimately stalled after sales activity ceased in 2019.</p>

<p>REMI Developments has been increasingly active in the Gold Coast property market, with the Malouf-led group positioning itself around premium residential and lifestyle-focused projects as the region continues to attract both interstate buyers and international interest.</p>

<p>Malouf is one of Australia's most impressive entrepreneurs, having sold his waste business fore more than $500 million, having started only with a small truck at 18 years old.</p>


Joel Robinson

First Look: Billionaire Ian Malouf plans Mermaid Beach tower

<p data-end="346" data-start="96">A State Significant Development proposal from Ecove Group could see two high-rise residential towers developed above an ALDI-anchored retail podium in Gordon.</p>

<p data-end="596" data-start="353">The 28-storey towers, dubbed Eight 10, would become the tallest in the sleepy Upper North Shore suburb, which has been stirred by changes to the Low to Mid-Rise Housing Policy aimed at triggering greater density around transport hubs.</p>

<p data-end="811" data-start="603">Ecove Group’s plans for 810 Pacific Highway, a 2,357 sqm site around 400 metres from Gordon railway station, include 180 apartments, 39 of which would be dedicated as affordable housing.</p>

<p data-end="811" data-start="603">Architecture firm PBD said in its Design Report the site "presents an exciting opportunity to positively contributes to the surrounding context, enhances the overall urban experience."</p>

<p><img alt="First Look: Ecove lodges State Significant Development plans for dual-tower “Eight 10” project at 810 Pacific Highway, Gordon" data-entity-type="file" data-entity-uuid="e50141fa-fb0b-44b3-bf9b-c6d87b993c3b" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Eight%2010%20podium.png?VersionId=YTgQPBxNnmQwr6x2AJSpVZ1COqa.9oLQ" /></p>

<p>The site previously received approval for a development comprising 56 apartments above retail in 2018.</p>

<p>PBD noted in its report that the planning&nbsp;context for the site has "evolved significantly since the original consent was issued."</p>

<p>In April 2024, the Department of Planning, Housing and Infrastructure (DPHI) identified the site as being located within a Transport Oriented Development (TOD) precinct. In parallel, Ku-ring-gai Council progressed a preferred planning framework for Gordon Town Centre, including proposed amendments to the Ku-ring-gai Local Environmental Plan 2015 (KLEP 2015).</p>

<p><img alt="First Look: Ecove lodges State Significant Development plans for dual-tower “Eight 10” project at 810 Pacific Highway, Gordon" data-entity-type="file" data-entity-uuid="cf65fb26-a163-41ea-a4d3-8ddbeabd67e4" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Eight%2010%20MAP.png?VersionId=vrQJzXSg3xRH.APBmtth5mA2adPmUPjc" /></p>

<p>PBD said the proposed development "responds to the amended KLEP 2015 and, in addition, seeks to utilise the floor space ratio and height incentives available under Chapter 2, Part 2, Division 1 of the State Environmental Planning Policy (Housing) 2021."</p>

<p>Late last year the first project in Gordon through the NSW Government's Housing Delivery Authority was approved. That was for 106 apartments across two connected seven to eight-storey buildings.</p>


Ecove plans 28-storey apartment towers in Gordon

<p><a href="https://www.apartments.com.au/developers/graya">Graya</a> has set its sights on one of Brisbane’s scarce remaining riverfront development opportunities.</p>

<p>They have spent $17 million on an 810 sqm site across 16-18 Sandford Street, where it is planning SILK, a 15-storey apartment tower with just 22 apartments.</p>

<p>Planning documents outline a single tower designed to take advantage of the site’s northerly outlook toward the river and Brisbane CBD.</p>

<p>There will be eight two-bedrooms and 14 three-bedroom apartments on offer, each either half- or full-floor.</p>

<p><img alt="Graya" data-entity-type="file" data-entity-uuid="059e1aa4-695c-4556-bafa-e8b5970c06f5" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-03-12%20at%203.07.50%E2%80%AFPM.png?VersionId=tEqwv_m8HYhrXSCStOMFHvGZZ5WgKfEx" /></p>

<p>&nbsp;</p>

<p>According to the Town Planning Assessment, the proposal "showcases a high quality architectural and landscape design outcome that is enhanced by the amenity of the Brisbane River… and provides a subtropical design response that celebrates Brisbane’s climate and lifestyle.”</p>

<p>Ground level includes landscaped communal areas facing the river alongside a gym and outdoor garden space, while the rooftop terrace will feature multiple leisure amenities like swimming pools,&nbsp;dining and barbecue facilities, as well as outdoor relaxation and yoga spaces.</p>

<p><img alt="Graya" data-entity-type="file" data-entity-uuid="93982dbb-9f27-409b-a319-bd6f458f9ea7" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-03-12%20at%203.09.05%E2%80%AFPM.png?VersionId=gCaaW82pEBxMvXkVkEm4TC_o7_UXA82p" /></p>

<p>Architecturally, the tower form draws inspiration from the movement of water along the river edge. Design documentation describes the building as “a form sculpted by flow, shaped by shifting water,” with curved forms, varied materiality, and sculptural elements used to soften the building’s visual bulk. Sandstone, an iconic material throughout St Lucia, is reinterpreted through a mix of refined and split-face textures across the façade.</p>

<p>The Sandford Street frontage is intended to present an articulated façade featuring vertical landscaping and sculptural architectural elements, helping the tower integrate with the evolving high-density character of the riverfront strip while maintaining visual interest from both the street and river corridor.</p>

<p>Graya has continued to expands its footprint across South East Queensland, with projects under construction across both Brisbane and the Gold Coast.</p>


GRAYA unveils plans for SILK in St Lucia

<p>Less than five months after submitting plans to redevelop the former Cadbury office on St Kilda Road into a luxury apartment tower, development giant <a href="https://www.apartments.com.au/developers/dexus-property-group">Dexus</a>&nbsp;has been given ministerial approval to push on with the project.</p>

<p>Apartments.com.au <a href="https://www.apartments.com.au/news/vic/first-look-dexus-joins-st-kilda-road-apartment-ranks-with-gateway-tower-proposal">revealed the plans in October last year</a>.</p>

<p>The approved project will see the 19-storey office building at 636 St Kilda Road replaced with a <a href="https://www.apartments.com.au/architects/bates-smart">Bates Smart</a>-designed tower delivering more than 400 new apartments at the prominent intersection of St Kilda Road and Queens Road.&nbsp;</p>

<p>The design responds to the site’s gateway position at St Kilda Junction, with Bates Smart describing the tower as a “refined and sculptural built form that mediates between the scale of St Kilda Road and Queens Road,” reinforcing a civic presence at the key intersection.&nbsp;</p>

<p><img alt="First look: Dexus joins St Kilda Road apartment ranks with gateway tower proposal" data-entity-type="" data-entity-uuid="" src="https://res.cloudinary.com/dz9xllyip/image/fetch/f_auto,c_limit,w_1440,q_auto/https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/field/image/Screenshot%202025-10-06%20at%2012.52.37%E2%80%AFPM.png?VersionId=Tq3yyOWe0e0klvy5j4TIjiZT7yd3f1Xk" /></p>

<p>The development will comprise 402 apartments, including 40 studios, 87 one-bedroom, 203 two-bedroom, and 66 three-bedroom residences, alongside six penthouses. The project will also incorporate active frontages, new pedestrian through-links and a landscape strategy designed to integrate with the boulevard character of St Kilda Road.&nbsp;</p>

<p>Public realm improvements form part of the approved scheme, including a 138 square metre linear park, extensive landscaping and approximately 188 metres of active street frontage intended to improve permeability and safety at ground level. Four basement levels will provide 449 car spaces and 120 bicycle spaces.&nbsp;</p>

<p>The project includes a $9.6 million contribution to the Social Housing Growth Fund, equivalent to three per cent of the project’s estimated development cost, supporting broader affordable housing initiatives across Victoria.&nbsp;</p>

<p><img alt="First look: Dexus joins St Kilda Road apartment ranks with gateway tower proposal" data-entity-type="" data-entity-uuid="" src="https://res.cloudinary.com/dz9xllyip/image/fetch/f_auto,c_limit,w_1440,q_auto/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/St%20kilda%20rd%20site.png?VersionId=m_ZioKYhwkvekE3ZUF6y7bz.5_5yFPnZ" /></p>

<p>Wholesale Australian Property Fund (DWAPF) Fund Manager Chris Davitt said the residences are intended to appeal to a broad mix of buyers seeking proximity to the CBD and surrounding amenities.</p>

<p>“We’re excited about the potential of the project to contribute new residential supply to one of Melbourne’s most sought-after areas,” Davitt previously said. “The landmark site at 636 St Kilda Road is at the gateway to Melbourne’s CBD, offering sweeping views and exceptional connectivity.”&nbsp;</p>

<p>The site’s three street frontages, St Kilda Road, Queens Road and Queens Lane, allow for generous setbacks and a flexible built form, while its proximity to the ANZAC Station tram-rail interchange and the St Kilda Road cycling corridor positions it within one of Melbourne’s most connected inner-city precincts.&nbsp;</p>

<p>St Kilda Road has become one of Melbourne’s most active apartment corridors in recent years, with projects such as Victoriana, The Muse and St Boulevard already completed overlooking Albert Park Lake, while Gamuda Land continues construction on Fareham and several other developments are planned nearby.&nbsp;</p>


Dexus secures ministerial approval for St Kilda Road apartment tower

<p>Just a few months after launching to the market,&nbsp;<a href="https://www.apartments.com.au/developers/gold-partners-australia">Gold Partners Australia</a>&nbsp;has sold 75 per cent of the apartments at&nbsp;Harmony on Broadbeach, its debut Gold Coast apartment development.</p>

<p><a href="https://www.apartments.com.au/new-apartments/harmony-on-broadbeach-2797-gold-coast-highway-broadbeach-qld-4218">Harmony on Broadbeach</a>, which will rise 33 storeys on the corner of First Avenue and the Gold Coast Highway about 400 metres from the beach, will deliver a collection of two and three-bedroom apartments designed to appeal to a mix of local owner-occupiers, interstate buyers, and investors seeking newer stock in the tightly held Broadbeach market.&nbsp;</p>

<p>Designed by <a href="https://www.apartments.com.au/architects/dbi">DBI Architects</a>, Harmony will home just over 100 apartments, with a typical floorplate limited to four apartments per level. The configuration allows for larger layouts and greater privacy compared to many higher-density coastal towers.</p>

<p>[smartcode_project:default project_id=113098 project_image_fid=355608]</p>

<p>The residences comprise generous two and three-bedroom apartments with open-plan living areas, large balconies and floor-to-ceiling glazing designed to maximise natural light and capture views across the ocean, hinterland and Broadbeach skyline. Interiors feature natural stone benchtops, engineered timber flooring and Miele appliances, with finishes intended to reflect the coastal character of the surrounding area.&nbsp;</p>

<p>Amenities are centred on a dedicated wellness offering, including a 20-metre swimming pool, spa, sauna, gymnasium and yoga lawn, alongside communal lounges, private dining areas and outdoor barbecue spaces for residents. The building will also include a hospitality venue at street level, activating the ground plane along the Gold Coast Highway.&nbsp;</p>

<p>[smartcode_project:default project_id=113098 project_image_fid=355611]</p>

<p>Olympus Property Group is handling sales for the development. Director Deanna Lockett said the project has resonated with a wide buyer pool drawn to the combination of location and pricing.</p>

<p>“There’s been nothing new come to the market in <a href="https://www.apartments.com.au/developments/broadbeach-qld-4218">Broadbeach</a> at this price point for nearly a year,” Lockett said. “It hits the sweet spot of affordability, good sized apartments, in a great location.”&nbsp;</p>

<p>Broadbeach remains one of the Gold Coast’s most established lifestyle precincts, with residents within walking distance of the beach, dining along Surf Parade, Pacific Fair Shopping Centre, and the Gold Coast Convention and Exhibition Centre. The suburb has seen limited new apartment supply over the past year, contributing to strong early demand for Harmony.&nbsp;</p>

<p>Construction is due to commence in Q2 2026, with completion targeted for late 2028, as Gold Partners Australia expands into the Gold Coast market alongside its established pipeline in New South Wales.</p>

<p>[smartcode_project_cta:default project_id=113098]</p>


Harmony on Broadbeach races to 75 per cent sold as Gold Partners Australia target construction commencement

Mortgage Lendng

<html><body>
<div>EXPERT OBSERVATION</div>
<div> </div>
<div>The regulatory throttling of mortgage lending maintained its firm stranglehold in the first quarter of 2018, with interest-only lending remaining at just 15.7 per cent of new residential term loans by value (a far cry from 45.6 per cent at the September 2015 peak). </div>
<div> </div>
<div>Both the stock and flow of interest-only loans has been significantly reduced by the introduced macroprudential measures. </div>
<p> </p>
<div><a href="https://4.bp.blogspot.com/-2jv1gfRCvAw/Wysf2SDxvrI/AAAAAAAAqss/WcKMXyO_Hp0MOWLqTZC2PrTCLWw5XHb9ACLcBGAs/s1600/APRA1.jpg"><img src="https://4.bp.blogspot.com/-2jv1gfRCvAw/Wysf2SDxvrI/AAAAAAAAqss/WcKMXyO_Hp0MOWLqTZC2PrTCLWw5XHb9ACLcBGAs/s640/APRA1.jpg" width="640" height="370" data-original-height="798" data-original-width="1374"></a></div>
<p> </p>
<div>Tighter loan-to-value (LVR) ratios also continued to be applied in Q1, with just 6.8 per cent of new residential lending at LVRs of 90 per cent or greater in the March 2018 quarter. </div>
<div> </div>
<p> </p>
<div><a href="https://3.bp.blogspot.com/-7mEIZLUEhXo/Wysf2kwS39I/AAAAAAAAqsw/oNlM9WmxH6sZOhK4rQHu8m3clxqeyt0bgCLcBGAs/s1600/APRA3.jpg"><img src="https://3.bp.blogspot.com/-7mEIZLUEhXo/Wysf2kwS39I/AAAAAAAAqsw/oNlM9WmxH6sZOhK4rQHu8m3clxqeyt0bgCLcBGAs/s640/APRA3.jpg" width="640" height="370" data-original-height="797" data-original-width="1378"></a></div>
<p> </p>
<div>Loans approved outside serviceability were well down from the December 2017 quarter spike, but remained at an elevated level implying that tighter standards almost certainly continued to bite throughout the first half of 2018. </div>
<p> </p>
<div><a href="https://1.bp.blogspot.com/-TAISqpuzD5s/Wysf2uTdZ5I/AAAAAAAAqtA/m_X8X5T_vl82Rt4rcFuuj19tw9Z8pcYRACEwYBhgL/s1600/APRA2.jpg"><img src="https://1.bp.blogspot.com/-TAISqpuzD5s/Wysf2uTdZ5I/AAAAAAAAqtA/m_X8X5T_vl82Rt4rcFuuj19tw9Z8pcYRACEwYBhgL/s640/APRA2.jpg" width="640" height="372" data-original-height="792" data-original-width="1360"></a></div>
<div> </div>
<div> </div>
<div><em>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>.</em></div>
</body></html>

pwargent-M4siyDbqQY

Interest-only loans stay low: Pete Wargent

<html><body>
<div>EXPERT OBSERVATION</div>
<div> </div>
<div>The average mortgage size in Queensland in the final quarter of 2018 took a leap from $424,000 to above $450,000, according to AFG's latest mortgage index.</div>
<div> </div>
<div>Evidently more southern state types are taking their borrowing capacity north to the Sunshine State. </div>
<div> </div>
<div class="separator"><img src="https://1.bp.blogspot.com/-RFZw-CWuY0g/XEmcu8PJ11I/AAAAAAAAuGY/MdnQfZz97CI9vpgPtaq1Wfh9N71xivtBwCLcBGAs/s640/AFG1.jpg" width="640" height="380" data-original-height="800" data-original-width="1346"></div>
<div class="separator"> </div>
<div>Overall lending volumes through AFG brokers were way down on a year earlier at a shade over $13 billion for the quarter.<br><br>The prior year comparative figure was $14.8 billion, some 12 per cent higher.</div>
<div> </div>
<div>Major lenders continue to leak market share at under 58 per cent of lodgement volumes, down from 78 per cent in 2013. </div>
<div> </div>
<div>With the share of investors in the market well down - and the share of interest-only lending also at the lowest level across the data series - a natural consequence of this is borrowers redirecting their borrowing capacity at larger home loans. </div>
<div> </div>
<div>Thanks to Queensland borrowers the average loan size nationally hit a fresh high level in the fourth quarter of 2018 at $509,162, up from $499,193 a year earlier.<br><br><span>The <a href="http://petewargent.blogspot.com/2019/01/loan-sizes-down-in-victoria-wa" target="_blank">ABS has noted</a> it has discontinued its figures on implied average loan sizes due to loan-splitting potentially understating the results. </span><br><span><br></span><span>According to Reserve Bank of Australia (RBA) research only around 1 in 10 borrowers use their maximum borrowing capacity or something close to it, helping to explain how the average loan size can now be at a record high. </span>
</div>
<div>
<span><br></span><span>In the RBA's own words "tighter lending standards do not constrain most borrowers, but do affect some".</span>
</div>
<div><strong> </strong></div>
<div><span><em><strong>PETE WARGENT</strong> 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>.</em></span></div>
</body></html>

Average mortgage size leaps in Queensland: Pete Wargent

<html><body>
<p>The first glimpses of recovery are emerging in the Australian mortgage market, with an increase in lodgements seen for the first time in a year, according to the latest AFG Index.</p>
<p>Notably their findings showed that, non-major lenders are driving much of the activity, responsible for a record high 42 per cent of lodgements and for the first time accounting for more than one in every three mortgages for first home buyers.</p>
<p>The AFG Index recorded more than $13 billion in lodgements in the three months to June 30, representing a 12 per cent increase on the last quarter. Despite the turnaround in the last quarter, the numbers remain 11 per cent down on the same time last year.</p>
<p>AFG Chief Executive Officer David Bailey said, “there are tentative signs of increased activity with both lodgement numbers and volumes up significantly for the quarter. It will be important to see the impact of recent moves by the RBA but we remain cautiously optimistic."</p>
<p>“It remains relatively subdued out there in Victoria and New South Wales, with both states recording an 11 per cent dip on the same time last year, offset by activity in the smaller states,” he noted.</p>
<p>South Australia was ostensibly flat, whilst Queensland and Western Australia recorded slips of thirteen per cent and seven per cent respectively.</p>
<p>Average mortgage size is at an all-time high of almost $515,000, with South Australia the only state to record a drop to now be sitting at $402,473.</p>
<p>Mr Bailey said “with investor lending up, it is interesting to also note the major banks’ responses to the recent cash rate reductions where investor loan rates have seen larger rate cuts passed on to customers. With those APRA-related restrictions now lifted, this could signal a new battleground for customers.</p>
<p>“After a period of slow growth, Refinancers have lifted to 28 per cent, but this is still a long way from the activity seen in 2016 when they recorded levels as high as 39 per cent. Homeowners looking to Upgrade have dropped back to the same level they were at in the final quarter of 2017,” he said.</p>
<p>AFG found, among the non-majors, Macquarie’s market share grew steadily across the quarter and finished June just shy of 10 per cent. ING has also been regaining ground and finished the quarter at four per cent, after dropping to less than two per cent in March.</p>
<p>While among the majors, CBA increased market share to finish June at 18 per cent and NAB finished a tough quarter to reach seven per cent by the end of June. NAB’s gains appear to be at the expense of the Westpac group of brands with Westpac, Bank SA, Bank of Melbourne and St George all recording a fall in market share.</p>
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j.ballantyne1990-6AQqhLzZaK

Signs of home loan market recovery, non-major market share at record high: AFG

<html><body>
<p>Data for lending to households and businesses data for December 2018 was released earlier this week.</p>
<p>This data series replaces the old housing finance and lending finance series and includes some different data. Specifically focusing on lending to households the data shows that the weakening of demand for mortgages has continued.</p>
<p><img class="align-center" src="https://www.corelogic.com.au/sites/default/files/inline-images/pic1.png" alt="pic1.png" width="842" height="355" data-entity-type="file" data-entity-uuid="bb33c8c9-5ed9-47d3-a589-bf7f9843bf66" data-image-style="" data-responsive-image-style="wide" data-zoom-image-style="_as_uploaded" data-mfp-src="https://www.corelogic.com.au/sites/default/files/inline-images/pic1.png"></p>
<p><br>As the above chart shows, investor mortgage lending has been weakening for some time however, over recent months there has been a rapid slowdown in lending to owner-occupiers. Over the month, there was a total of $26.0 billion in mortgage finance to borrowers which was the lowest monthly value since January 2014. The value of mortgage lending has fallen -5.2% over the month and is -15.2% year-on-year. Looking at the split between owner-occupier and investor mortgage lending, there was $18.5 billion worth of finance commitments to owner occupiers which was -5.3% lower than the previous month and its lowest value since May 2015. The remaining $7.5 billion worth of finance to investors was -4.8% lower over the month and the lowest monthly value since April 2013. While the slowdown in mortgage demand began, and is well entrenched, across the investor segment, owner-occupier mortgage demand is now also falling rapidly.</p>
<p><img class="align-center" src="https://www.corelogic.com.au/sites/default/files/inline-images/pic2.png" alt="pic2.png" width="802" height="338" data-entity-type="file" data-entity-uuid="b08c7e3c-d4d4-48b8-9ecd-078d9723d53f" data-image-style="" data-responsive-image-style="wide" data-zoom-image-style="_as_uploaded" data-mfp-src="https://www.corelogic.com.au/sites/default/files/inline-images/pic2.png"></p>
<p><br>Looking a little more granularly at the data, over the month there was $12.5 billion worth of owner-occupier finance commitments excluding refinance, $6.0 billion worth of owner occupier refinance commitments, $4.9 billion worth of non-refinance commitments to investors and $2.6 billion worth of investor refinances. The chart highlights a weakening of demand across each of these four categories however, refinance demand is generally holding up better than non-refinance. New lending to owner-occupiers is the lowest it has been since May 2015, owner occupier refinances are the lowest they’ve been since August 2017, investor new lending is at its lowest value since January 2012 and investor refinance lending is the lowest it has been since August 2018. </p>
<p>The data clearly shows that housing finance commitments are falling the bigger question is what is the actual driver of the falls. According to recent commentary from the Reserve Bank in their Statement on Monetary Policy, demand is falling because of ‘significantly fewer loan applications over the past year or more.’ Personally, I am not necessarily convinced this is the only reason.</p>
<p>The volumes that eventually make their way to lending teams are likely to be significantly lower but is this actually occurring because of fewer people wanting a mortgage or fewer making it that far? I suspect that demand has certainly fallen but possibly it has fallen a greater amount because people are talking to the bank lender or mortgage broker and the feedback they are given is that there is no point applying because with current credit conditions this just isn’t going to get approved.</p>
<p>Looking at it another way, credit conditions remain tighter than they have been in many years. Although the 10% cap on investment credit growth and 30% interest-only origination limit have been removed (largely because they became redundant), both investor and interest-only borrowers continue to be charged a premium compared to owner-occupier mortgages. Furthermore, lenders are now asking a lot more questions about household expenditure than they have in the past rather than relying on an index of household expenditure. Although this may be a new normal, in the past, potential borrowers perhaps haven’t had to be so mindful of their expenditure prior to a mortgage application and there will be a period of adjustment to these new conditions.</p>
<p>In the past borrowers have tended to adjust their expenditure appropriately once they have taken on the mortgage rather than now when the adjustment has to be made prior to obtaining approval for the mortgage. Finally, when applying for a mortgage, borrowers are being assessed on their ability to repay a mortgage at an interest rate above 7% while most lenders will offer a new borrower a discounted variable at around or below 4%. The current cash rate futures yield curve is now suggesting a reduction in official interest rates is more likely than a hike. In my mind, 7% mortgage rates are a long way off and we won’t be getting back to those levels absent some decent household income growth.</p>
<p>While in isolation these individual changes to credit policy changes may not remove many potential borrowers, the combination of these changes likely result in far fewer borrowers being considered credit-worthy for a mortgage. Therefore, while application volumes are likely lower, the blame can’t solely be pointed at fewer applications when the process for applying for a mortgage has changed so dramatically over recent years.</p>
<p><em><strong>CAMERON KUSHER</strong> is a Research Analyst at CoreLogic.</em></p>
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Is it tighter credit or fewer applications hitting mortgage demand? CoreLogic's Cameron Kusher

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<p>Westpac Group, the nation's second largest mortgage lender, has told mortgage brokers to grill clients on why they want an interest-only loan.</p>
<p>They are to "make them aware of their features and considerations".</p>
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<div>Brokers must note the client's answers and include them in the application.</div>
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<p>"It is important clients can provide clear reasoning for their choice of loan and can demonstrate an understanding of an interest-only loan and its features so we can have confidence our product aligns to their needs," a bank spokesman told Fairfax Media.</p>
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Westpac tells mortgage brokers to quiz investors on IO rationale

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<p>AMP is reducing its mortgage lending to most non-resident borrowers.</p>
<p>AMP is blaming the tough policy on "changes to the market" without specifying their nature or extent.</p>
<p>"Our standards are continually reviewed with market developments to ensure we remain a prudent and responsible lender. Our criteria for overseas borrowers has recently been reviewed in line with this objective," AMP said in a statement obtained by the<em> Australian Financial Review</em>.</p>
<p>It follows complaints among other major lenders about fraudulent applications and fears of money laundering.</p>
<p>Major banks are believed to have only between 2 and 4 percent of their portfolios with overseas investors.</p>
<p>Under AMP's policy, revealed in confidential documents being circulated to major third party distributors, foreign currencies are split into Tier 1 and Tier 2 categories.</p>
<p>Under the new arrangements, 80 percent of income and expenses derived from a Tier 1 category is acceptable and 50 percent from a tier 2 when assessing a loan application.</p>
<p>Tier 1 category are Canadian dollars, Euros, British sterling, Hong Kong dollars, Japanese yen, New Zealand dollars, Singapore dollars and US dollars.  </p>
<p>Tier 2 is the Chinese yuan. Borrowers seeking a loan with Chinese yuan must also provide a 50 percent deposit. For borrowers with Tier 1 currencies the maximum deposit is 30 percent.</p>
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