Developer-builder <a href="https://www.apartments.com.au/developers/dasco-australia">DASCO</a> has pushed beyond the now-standard inclusions of rooftop pools and landscaped podiums at its recently launched new Epping project, Senso.

It has laid out over 4,000 sqm of resident-only amenity in a move designed to compete directly with low-density housing on livability, not just density. The result is a development that supports genuine daily use through purposeful spaces distributed across its five-building, 479-apartment precinct.

[smartcode_project:default project_id=134954 project_image_fid=4396]

Two rooftop pools form the anchor of Senso. One is a 27-metre lap pool adjoining a heated spa, designed for everyday fitness rather than just summer leisure. The second sits on a lower podium, allowing different buildings to share in vertical access and reducing crowding during peak times.

It is the secondary spaces that start to distinguish Senso from other large-scale suburban projects. A rooftop cinema is integrated into a landscaped terrace, offering open-air screenings with natural ventilation and passive cooling.&nbsp;

The inclusion of a “sensory walk”, an elevated boardwalk that threads through the site, suggests a rare investment in non-commercial, non-essential amenity: space for quiet movement that doesn’t double as access or traffic circulation.

[smartcode_project:default project_id=134954 project_image_fid=4402]

The gym and wellness centre, often relegated to a small ground-floor room in many builds, takes on more substance here. Residents have access to a fully equipped gym, as well as outdoor yoga areas and meditative zones that integrate greenery and natural light.&nbsp;

The Club Lounge is similarly designed to support multiple use cases, with a private dining terrace, kitchenette, workspace, and lockable wine storage. These aren’t superficial additions; their scale and spatial allocation indicate serious intent for frequent resident use.

[smartcode_project:default project_id=134954 project_image_fid=4391]

Importantly, Senso’s amenities are embedded within a site that spans more than 10,000 sqm, allowing for better separation between spaces and reduced noise spillover, a critical but often overlooked factor in high-density developments. This spatial generosity also enables multiple alfresco kitchens and communal terraces without compromising individual privacy or usable space.

While many developments make claims about lifestyle, few back it with this level of built infrastructure. Senso’s mix of dedicated fitness, wellness, social and passive green spaces suggests a conscious response to the post-pandemic shift in housing expectations, especially among owner-occupiers.&nbsp;

DASCO is one of several leading developers who have taken out Resilience Insurance's Latent Defects Insurance policy, providing buyers with a 10-year structural and waterproofing warranty, and giving them the ultimate peace of mind.

Senso is scheduled for completion in late 2028.

[smartcode_project_cta:default project_id=134954]

Staff Writer

The outdoor amenities elevating life at Senso, Epping

Following the proposal by the Minns Labor Government to rezone Parramatta Road to create up to 8,000 new homes, prominent developer Ceerose has gone to the NSW Gov to increase the density of its new mixed-use residential building in Leichhardt.

<a href="https://www.apartments.com.au/builders/ceerose">Ceerose</a>, founded by Edward Doueihi nearly three decades ago, has filed plans for 154 apartments above ground-floor retail at 307-315 Parramatta Road, a key corner site near Norton Street, the main high street strip in Leichhardt.

It's an upsize from the previously approved scheme of 63 apartments across a seven-storey building.

<img alt="Ceerose" data-entity-type="file" data-entity-uuid="ba1ae75b-5f08-43fb-b8d5-3de6d9f6ef71" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202025-12-04%20at%2010.31.39%E2%80%AFAM.png?VersionId=yA3hBBLPH4ev7MsAE0_hieXeqiFqBUb7" />

The project is being advanced through the State Significant Development (SSD) pathway, with concurrent rezoning sought to facilitate the proposal. The 10-storey development would rise over a four-level basement and deliver two retail tenancies, one a larger-format offering and the other a smaller “hole in the wall” space, addressing the Parramatta Road frontage. 21 of the apartments are dedicated as affordable housing.

According to the Urban Design Report by Architecture AND, the scheme includes a podium and tower configuration, with a fine-grain, two-storey parapet street wall that references the traditional shopfront rhythm along the corridor. “An elegant tower form is proposed, combined with a characterful two storey frontage... articulating it as two related buildings, providing consistency with the rhythm and grain of Parramatta Road,” the report notes.

The residential component is split across two slender towers set back from the street edge, a design move aimed at preserving solar access and reducing perceived bulk. This massing strategy also seeks to improve residential amenity by focusing scale toward the quieter northern interface, away from Parramatta Road’s noise and pollution.

<img alt="Ceerose" data-entity-type="file" data-entity-uuid="347f2f8f-5d36-4388-b40a-2e77380b9c19" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202025-12-04%20at%2010.31.02%E2%80%AFAM.png?VersionId=xvyUE2ujT1lzivXTo.mHBJFF4SmfgLtz" />

Architecture AND has worked with Ceerose on previous Inner West projects, and cites a deep familiarity with the local character. Their design draws heavily on context, heritage, and sunlight access considerations, and engages with the Inner West Council’s “Our Fairer Future” strategic planning framework.

The site spans 2,712 sqm and is located near key intersections with Catherine Street, Hay Street, and Redmond Street. It adjoins a public carpark to the north and is within walking distance of Stanmore and Petersham stations. It is also flagged in state and local planning strategies, including the Parramatta Road Corridor Urban Transformation Strategy, as a suitable candidate for increased density.

Ceerose recently completed The Alex Collective on McEvoy Street in Alexandria, Abbie's Lane in Annandale, and the award-winning Munro House in Elizabeth Bay.

The Parramatta Road corridor is coming to life with the proposed rezoning which is serviced by a significant number of bus, light rail and train routes.

Deicorp is progressing with its $1.8 billion <a href="https://www.apartments.com.au/new-apartments/kings-bay-village-five-dock-53-75-queens-road-five-dock-nsw-2046">Kings Bay Village</a> precinct on Parramatta Road in Five Dock, as is <a href="https://www.apartments.com.au/news/nsw/toga-to-push-on-with-five-dock-mixed-use-masterplan">TOGA further down the street</a>. Those two projects alone will bring nearly 2,000 new homes to Parramatta Road.

Joel Robinson

First look: Ceerose plots mixed-use Leichhardt development on Parramatta Road

North Sydney's landmark 'SBS Building' on Alfred Street is set to be demolished to make way for a new mixed-use residential tower in the booming North Sydney.

Commercial property group FiveX is behind the plans for a <a href="https://www.apartments.com.au/new-apartments/275-alfred-street-north-north-sydney-nsw-2060">39-storey tower</a>, the latest project to advance under the NSW Government’s Housing Delivery Authority pathway.

They are proposing 184 apartments above retail spaces, which will replace the existing 20-storey commercial building. FiveX was set up more than five decades ago by Joshua and Marko Berger. It is currently led by Joshua's son Lesli.&nbsp;

<img alt="First look: Fivex plans 39-storey residential tower at 275 Alfred Street, North Sydney" data-entity-type="file" data-entity-uuid="2efa0980-53fa-4cca-9f9e-9c3c845d4746" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Article%20Feature%20Image%20%28Grid%29%20%281%29_0.png?VersionId=y_YyPMq3NQLfYRs84pP4os9UgWiMLp75" />

According to the Architectural Design Report by <a href="https://www.apartments.com.au/architects/fjc-studio">FJC Studio</a>, the slender tower form has been deliberately designed to respect the site's transitional setting at the southern gateway to the North Sydney CBD, where high-rise towers give way to lower-scale residential precincts.

"The slender tower form and articulated podium establish a respectful relationship with nearby heritage and low rise buildings, including the Whaling Road Heritage Conservation Area,” the architecture firm noted, adding that the tower “completes a missing link in the urban fabric” while enhancing the Alfred Street streetscape.

The proposed building will include a mix of one-, two- and three-bedroom apartments, with 15 percent of the gross residential floor area allocated as affordable housing. There is an agreement already in place that those apartments will be managed by Evolve Housing.

The project aligns with broader state housing objectives, including the National Housing Accord target of delivering 1.2 million new homes by 2029. The Scoping Report filed with the State Significant Development Application (SSDA) suggests the site "presents no impediments to rapid delivery,” with construction able to commence within 12 months of receiving consent.

North Sydney has been one of the most popular suburbs in Sydney for new and off the plan apartment development, but hasn't had the supply to keep up with demand, until recently.

AURA by Aqualand was, for a long time, the only off the plan apartment building on the market. That completed last year, and has sold the majority of its 386 luxury apartments. Recently ALAND launched <a href="https://www.apartments.com.au/new-apartments/the-walden-173-179-walker-street-north-sydney-nsw-2060">The Walden</a> on the same street, selling over $100 million within just a few hours of its launch, while developer CASA also launched&nbsp;<a href="https://www.apartments.com.au/new-apartments/the-mclaren-north-sydney-45-mclaren-street-north-sydney-nsw-2060">The McLaren</a>&nbsp;in the same precinct.

First look: Fivex plans 39-storey residential tower in booming North Sydney

Kokoda Property Group has announced the Sydney-based Versatile Construction as the builder for its landmark $1.5 billion <a href="https://www.apartments.com.au/new-apartments/teneriffe-banks-17-27-skyring-terrace-teneriffe-qld-4005">Teneriffe Banks</a> precinct.

Construction of the 17,612 sqm site is scheduled to commence in December 2025 and is expected to be delivered in stages from 2028. Once complete, <a href="https://www.apartments.com.au/new-apartments/teneriffe-banks-17-27-skyring-terrace-teneriffe-qld-4005">Teneriffe Banks</a> will comprise 212 residences across four architecturally distinct buildings, alongside Brisbane’s first Kimpton Hotel, extensive retail, hospitality, and wellness amenities.

[smartcode_project:default project_id=139896 project_image_fid=295098]

Kokoda Property Group Founder and Managing Director, Mark Stevens, said appointing Versatile Construction marks a significant milestone for <a href="https://www.apartments.com.au/new-apartments/teneriffe-banks-17-27-skyring-terrace-teneriffe-qld-4005">Teneriffe Banks</a>.

“Partnering with Versatile Construction gives us confidence in delivering a precinct that sets a new benchmark for luxury living, curated experiences and vibrant riverfront activation," Stevens said.

"Together, we will bring the vision for <a href="https://www.apartments.com.au/new-apartments/teneriffe-banks-17-27-skyring-terrace-teneriffe-qld-4005">Teneriffe Banks</a> to life, creating a destination that residents and visitors will enjoy for generations."

Throughout the construction phase, more than 2,000 jobs will be created, supporting hundreds of local contractors and suppliers.

[smartcode_project:default project_id=139896 project_image_fid=352274]

Marco Fahd, Chairman &amp; CEO at Versatile Group, said the company is looking forward to&nbsp;expanding their footprint in the state, taking on their inaugural project in Brisbane.

"We are proud of the unwavering commitment our team of experts have to quality and certainty in delivery and are excited to work with Kokoda to bring their vision for this unique project to life," Fahd says.

Sales reached $285 million on the launch of <a href="https://www.apartments.com.au/new-apartments/teneriffe-banks-17-27-skyring-terrace-teneriffe-qld-4005">Teneriffe Banks</a>, with sales momentum continuing to "exceed all expectations."

Stevens says the overwhelming response from buyers validated the group’s vision for <a href="https://www.apartments.com.au/new-apartments/teneriffe-banks-17-27-skyring-terrace-teneriffe-qld-4005">Teneriffe Banks</a>.

“The demand for a luxury product in this enclave has been extraordinary, we’ve never seen anything like it before. It reinforces everything we’re doing around quality, design, and creating genuine lifestyle precincts. Buyers are recognising the enduring value of Brisbane’s riverfront and are responding to the opportunity to live within a world-class destination that celebrates both place and lifestyle.”

[smartcode_project_cta:default project_id=139896]

Kokoda appoints builder for $1.5 billion Teneriffe Banks waterfront precinct

Castle Hill’s booming development market is set for another boost, with builder-developer Buildex proposing a new mid-rise apartment building near Castle Towers.

Buildex has submitted plans to The Hills Shire Council for a <a href="https://www.apartments.com.au/new-apartments/197-old-northern-road-castle-hill-nsw-2154">nine-storey building comprising 57 apartments</a> on Old Northern Road. The company acquired two adjoining sites earlier this year, totalling more than 2,683 sqm.

Texco Design has prepared the scheme, which includes five one-bed plus study apartments, 37 two-bedrooms, and 15 three-bedrooms.

Castle Hill has become a hotspot for developers in recent years, undergoing significant transformation driven by the opening of the Hills Showground Precinct to development and the introduction of two metro stations servicing the suburb.

Developers including Deicorp and Kassis Homes have already completed projects, and are progressing future developments, while Meriton, Arada, and Ellipse are currently delivering new projects in the rapidly evolving area.

First look: Buildex plans 57 apartments near Castle Towers

Mortgage Rates

RBA Governor Philip Lowe&#39;s meeting statement

At its meeting today, the Board decided to maintain the current policy settings, including the targets of 10&nbsp;basis points for the cash rate and the yield on the 3-year Australian Government bond, as well as the parameters of the Term Funding Facility and the government bond purchase program.

The global economy is continuing to recover from the pandemic and the outlook is for strong growth this year and next. The recovery remains uneven, though, and some countries are yet to contain the virus. Global trade in goods has picked up strongly and commodity prices are mostly higher than at the start of the year. However, inflation remains low and below central bank targets.

Sovereign bond yields have been steady recently after increasing earlier in the year due to the positive news on vaccines and the additional fiscal stimulus in the United States. Inflation expectations have lifted from near record lows to be closer to central banks&#39; targets. The 3-year government bond yield in Australia is at the Board&#39;s target of 10&nbsp;basis points and lending rates for most borrowers are at record lows. The Australian dollar remains in the upper end of the range of recent years.

The economic recovery in Australia has been stronger than expected and is forecast to continue. This recovery is especially evident in the strong growth in employment, with the unemployment rate falling further to 5.6&nbsp;per&nbsp;cent in March and the number of people with a job now exceeding the pre-pandemic level.

The Bank&#39;s central scenario for GDP growth has been revised up further, with growth of 4&frac34;&nbsp;per&nbsp;cent expected over 2021 and 3&frac12;&nbsp;per&nbsp;cent over 2022. A pick-up in business investment is expected and household spending will be supported by the strengthening in balance sheets over the past year. The unemployment rate is expected to continue to decline, to be around 5&nbsp;per&nbsp;cent at the end of this year and around 4&frac12;&nbsp;per&nbsp;cent at the end of 2022.

Despite the strong recovery in economic activity, the recent CPI data confirmed that inflation pressures remain subdued in most parts of the Australian economy. A pick-up in inflation and wages growth is expected, but it is likely to be only gradual and modest. In the central scenario, inflation in underlying terms is expected to be 1&frac12;&nbsp;per&nbsp;cent in 2021 and 2&nbsp;per&nbsp;cent in mid&nbsp;2023. In the short term, CPI inflation is expected to rise temporarily to be above 3&nbsp;per&nbsp;cent in the June quarter because of the reversal of some&nbsp;COVID-19-related price reductions.

Housing markets have strengthened further, with prices rising in all major markets. Housing credit growth has picked up, with strong demand from owner-occupiers, especially first-home buyers. Given the environment of rising housing prices and low interest rates, the Bank will be monitoring trends in housing borrowing carefully and it is important that lending standards are maintained.

At its July meeting, the Board will consider whether to retain the April 2024 bond as the target bond for the 3-year yield target or to shift to the next maturity, the November 2024 bond. The Board is not considering a change to the target of 10&nbsp;basis points. At the July meeting, the Board will also consider future bond purchases following the completion of the second $100&nbsp;billion of purchases under the government bond purchase program in September. The Board is prepared to undertake further bond purchases to assist with progress towards the goals of full employment and inflation. The Board places a high priority on a return to full employment.

The date for final drawings under the Term Funding Facility is 30&nbsp;June 2021. Given that financial markets in Australia are operating well, the Board is not considering a further extension of this facility. Authorised deposit-taking institutions have drawn $100&nbsp;billion so far and a further $100&nbsp;billion is currently available. Given the facility provides funding for 3&nbsp;years, it will continue to support low funding costs in Australia until mid&nbsp;2024.

The Board is committed to maintaining highly supportive monetary conditions to support a return to full employment in Australia and inflation consistent with the target. It will not increase the cash rate until actual inflation is sustainably within the 2&nbsp;to 3&nbsp;per&nbsp;cent target range. For this to occur, the labour market will need to be tight enough to generate wages growth that is materially higher than it is currently. This is unlikely to be until 2024 at the earliest.

The RBA kept the official cash rate at record lows at its May meeting

Housing markets strengthen further in all major markets: RBA Governor Philip Lowe's May 2021 meeting statement

The RBA maintained its current policy settings at its May meeting, keeping the official cash rate at a record low 0.1 per cent.

RBA governor Philip Lowe said housing markets have strengthened further, with prices rising in all major markets.

&quot;Housing credit growth has picked up, with strong demand from owner-occupiers, especially first-home buyers,&quot; Mr Lowe said.

&quot;Given the environment of rising housing prices and low interest rates, the Bank will be monitoring trends in housing borrowing carefully and it is important that lending standards are maintained.&quot;

The RBA stood by their view that rates won&#39;t likely change until 2024. Around&nbsp;65 per cent of experts surveyed in Finder&#39;s monthly RBA Cash Rate Survey believe there won&#39;t be any rate change until 2023.

AMP Capital chief economist Shane Oliver is one who believes a rate change will come before 2024.

&quot;While&nbsp;the economy is recovering faster than expected, the RBA is still a long way away from seeing its stated requirements for a rate hike &ndash; being a tight jobs market, wages growth well above 3% and actual inflation sustainably within the 2-3% target range,&quot; Oliver said.

&quot;A rate hike is still a fair way off although I think it will come before the RBA&rsquo;s expectation for &lsquo;2024 at the earliest&rsquo;.&rdquo;

[smartcode_project:default project_id=3298]

The clear&nbsp;message from the RBA however&nbsp;hasn&#39;t stopped banks changing their fixed rates, with Westpac, including their subsidiary banks including St George, Bank of Melbourne and BankSA, lifting their four-year fixed from 1.89 per cent to 2.19 per cent. They also raised their five-year fixed to 2.49 per cent.

The four-year rise copied the move by CBA in March, however CBA reduced its one and two-year fixed rates at the same time.

UHomeLoan also raised their three-year fixed by 10 basis points to 1.85 per cent.

&ldquo;This sudden wave of lenders increasing longer-term rates and decreasing shorter-term rates reveals a strategy to lock their customers in for shorter time periods,&quot; Graham Cooke, insights manager at Finder said.

&ldquo;This can be seen as a bet on variable rates increasing sooner than expected. It also reveals that the tide could be turning on our historically low fixed home loan rate environment.&quot;

AMP Capital chief economist Shane Oliver is one who believes a rate change will come before 2024.

RBA hold rates at May meeting

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Westpac have followed ANZ and NAB and cut their two and three year fixed mortgage rates for new owner-occupiers.

They now have the lowest two year fixed rate on the market at 1.79 per cent, having chopped 20 basis points from their record-low 1.99 per cent offering.

Westpac's three year rate has seen an 11 basis point cut, now at 1.88 per cent.

The rates are only for owner-occupiers paying principal and interest with an LVR ratio of 70 per cent or less.

The two year investor fixed rates have also been cut by 0.2 per cent.

[smartcode_project:default project_id=22584]

RateCity.com.au database shows that 57 lenders now have home loan rates under two per cent, including three of the big four banks.

“Westpac has thrown down the gauntlet to its competitors today proving there’s still heat in the fixed rate market.” RateCity.com.au research director Sally Tindall said.

“While we’re nearing the bottom of the rate cycle, provided the cash rates remains above zero, it’s likely there’ll be more cuts in the weeks to come as banks compete for the record levels of new lending coming through the door.

“Lenders are currently in a strong position to offer low fixed rates, which also have the benefit of locking a customer in for the fixed term.

“Westpac is now offering the lowest 2 year fixed rate, and was already offering the lowest 4-year fixed rate in the market – an unusual position for a big four bank.

[smartcode_project:default project_id=2772]

Tindall says home loans at the nation's largest lender, Commonwealth Bank, are starting to look outdated, with just one fixed rate under 2 per cent.

“Westpac group is reserving its sharpest rates for people who own at least 30 per cent of their home.

“Property price rises aren’t just helpful for people planning to sell. If you’ve had your home loan for a few years you might find you have more equity than you think and qualify for one of these low-rate loans."
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RateCity.com.au database shows that 57 lenders now have home loan rates under two per cent, including three of the big four banks.

Westpac offer lowest two-year fixed rate mortgage after cutting home loans

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UBank, a subsidiary of NAB, has announced the new lowest fixed rate in Australia – 1.75 per cent for three years.

But customers will have to be quick, with the rate set to expire in a little over a month.

The three-year fixed rate is 0.13 per cent below the next lowest fixed rate and 1.34 per cent lower than the average existing owner-occupier rate of 3.09 per cent (RBA data).

UBank has also cut its other fixed rates by up to 0.35 per cent for new customers.

There are now 53 lenders offering at least one fixed or variable rate under 2 per cent on over 120 different home loans, according to RateCity.com.au data.

RateCity.com.au research director Sally Tindall said while the RBA was set to keep rates on hold, competition between lenders was still driving home loan rates down.

“Lenders have been offering home loan rates under 2 per cent since June last year, yet thousands of existing mortgage holders seem content with the idea of paying a rate starting with a ‘3’,” she said.

<img alt="" height="459" src="https://s3-ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/pictures/article-images/cheaper_fixed_rates_urban.jpg" width="1200"> Source: RateCity.com.au

“UBank’s decision to offer a market-leading rate for just over a month is designed to get people to act.

“Putting an expiry date on this deal could help combat complacency among mortgage holders.

“Mortgage holders suffering from inertia are likely to be getting fleeced,” she said.

“Fixed rates are typically less flexible than variable ones, so if you want access to an offset account and unlimited repayments, you might look at splitting your loan or consider a variable rate loan,” she said.
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UBank, a subsidiary of NAB, has announced the new lowest fixed rate in Australia – 1.75 per cent for three years.

UBank announce Australia's lowest fixed rate home loan

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While it's possible to borrow money at significantly lower rates than reported here, mortgage rates have nudged higher over the last couple of months. 
Government bond yields have also crept steadily higher. 
<a href="https://www.propertyobserver.com.au/images/2017/02/09/RBA1.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/02/09/RBA1.png" alt="">
In fact the 10-year bond yield had dropped well below 2 percent in the second half of 2016, but has since staged a strong rebound to sit around 2.70 percent. 
<a href="https://www.propertyobserver.com.au/images/2017/02/09/RBA2.jpg" target="_blank">Click 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/2017/02/09/RBA2.jpg" alt="">
PETE WARGENT is the co-founder of <a href="https://allenwargent.com/">AllenWargent</a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/">blogger</a>.
His latest book is <a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx">Four Green Houses and a Red Hotel</a>.
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pwargent-M4siyDbqQY

Mortgage rates nudge higher: Pete Wargent

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According to the latest housing finance data release for March 2017 there was $33.2 billion in finance commitments over the month. 
The monthly value of commitments increased by 0.9 percent to be 5.3 percent higher year-on-year. 
While the value of commitments to investors has slowed over recent months, owner occupier demand lifted slightly in March 2017.
<a href="https://www.propertyobserver.com.au/images/2017/05/24/chart-1-2.jpg" target="_blank">Click 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/2017/05/24/chart-1-2.jpg" alt="">
The data shows that in March 2017, the $33.2 billion in housing finance commitments comprised of $20.2 billion to owner occupiers and $13.0 billion to investors. 
The value of owner occupier commitments increased by 0.9 percent over the month to be at its highest level since June 2016. 
Investor demand also rose over the month, up 0.8 percent however, it remains well below levels from a few months ago. 
Looking at recent monthly data it suggests that demand from owner occupiers has been reasonably steady while the level of demand from investors has eased. 
Keep in mind that this data pre-dates the most recent policy announcement from APRA; over the coming months there are likely to be a number of headwinds for investors in the form of: higher mortgage rates, reduced availability of interest-only lending and changes to depreciation benefits for plant and equipment on investment property for new purchases. 
Given this we would expect that investor demand is likely to fall further over the coming months.
<a href="https://www.propertyobserver.com.au/images/2017/05/24/chart-2-2.jpg" target="_blank">Click 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/2017/05/24/chart-2-2.jpg" alt="">
Owner occupier demand continues to be fueled by purchases of established housing stock while refinance activity continues to fade. 
The $20.2 billion in housing finance commitments to owner occupiers consisted of $1.8 billion for construction of dwellings, $1.1 billion for purchase of new dwellings, $6.1 billion for refinancing of established dwellings and $11.1 billion for purchase of other established dwellings. 
The value of lending for construction and purchase of new dwellings has remained at fairly consistent levels over the past year and a half. 
The value of refinancing has been trending lower since it peaked in December 2015 and it is now at its lowest level since July 2015. 
At the same time, demand for purchases of established dwellings is trending higher and is at its highest level since September 2015.
<a href="https://www.propertyobserver.com.au/images/2017/05/24/chart-3-2.jpg" target="_blank">Click 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/2017/05/24/chart-3-2.jpg" alt="">
Mortgage demand from investors overwhelmingly comes from investors buying established housing rather than new housing. 
The $13.0 billion worth of commitments in March 2017 consisted of $1.1 billion from construction of dwellings and $11.9 billion from established housing. 
The $1.1 billion in commitments for construction was 6.1 percent higher over the month while the $11.9 billion for established housing is 0.3 percent higher over the month. 
The value of lending for investors for established housing is now down -4.6 percent from its most recent peak two months ago and -12.5 percent lower than its historic peak in April 2015.
<a href="https://www.propertyobserver.com.au/images/2017/05/24/chart-4-2.jpg" target="_blank">Click 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/2017/05/24/chart-4-2.jpg" alt="">
Comparing established housing to new housing continues to show that the bulk of housing demand is coming from established housing stock. 
Over the month, 85 percent of mortgage demand (excluding refinances) was for established housing stock ($23.0 billion) with the remaining 15 percent ($4.0 billion) for new housing stock.
The data is pointing to ongoing weaker demand from the investor segment of the market and refinances from owner occupiers slowing while demand from owner occupiers for established housing stock is trending higher. 
With the lending environment continuing to change, particularly for investors, we would expect that demand from investors will continue to wane. 
Higher interest rates, the rationing of the availability of interest-only lending and reduced negative gearing benefits is likely to weigh on investor demand over the coming months.
Cameron Kusher is research analyst for CoreLogic. You can contact him <a href="https://blog.corelogic.com.au/about/">here</a>.
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ckusher-ujnxiKuFQs

Investor mortgage demand continues to wane: Cameron Kusher

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Through 2008, outstanding loans to households by Australia's banks totalled less than $700 billion.  The final 2016 numbers are not yet plugged into the chart below, but the monthly banking statistics suggest that the total by the end of the year will exceed $1.5 trillion. 
Australia has experienced strong population growth during this period, but nevertheless outstanding housing debt has been compounding at around 9 percent per annum. 
<a href="https://www.propertyobserver.com.au/images/2017/02/28/A1.jpg" target="_blank">Click 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/2017/02/28/A1.jpg" alt="">
Such a strong pace of increase in household debt is bound to be reflected in housing market conditions one way or another, and in Australia's case the result has been price increases in Sydney and Melbourne. 
This dynamic since the financial crisis has been arousing the interest of short sellers, including from overseas. 
Although house prices have declined in Perth, Darwin, and parts of regional Queensland in particular, to date the most heavily populated markets have held up well. 
If anything, housing market sentimen<a href="https://petewargent.blogspot.com.au/2017/02/deuces-are-wild">t</a> seems to be improved in Sydney and Melbourne again at the beginning of 2017. 
Changes to the lending environment
Regulators have encouraged several tweaks to lending criteria over the years since the financial crisis first erupted. 
"Low-doc" loans, once fairly commonplace, today only comprise a small share of the mortgage market, while 100 per cent mortgages have thankfully gone the same way.
In fact, new mortgages today overwhelmingly have a loan to value ratio (LVR) of 90 per cent or lower, although in reality many borrowers have used equity from existing properties to fund their deposits. 
<a href="https://www.propertyobserver.com.au/images/2017/02/28/A3.jpg" target="_blank">Click 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/2017/02/28/A3.jpg" alt="">
Lending standards in Australia are higher than they were, but on some measures remain concerning.
For example, the share of interest only loans remains high by international standards, despite having declined from somewhat alarming levels in 2015. 
<a href="https://www.propertyobserver.com.au/images/2017/02/28/A2.jpg" target="_blank">Click 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/2017/02/28/A2.jpg" alt="">
ASIC had previously reported that about two in three investor loans in Australia were interest only mortgages, and around a quarter of owner occupier loans - with the repayment typically increasing when the interest only period ends. 
Shorting: what and when
Short sellers rarely bet on house prices directly, rather they tend to be interested in the outcomes of a market downturn (and housing markets are necessarily always cyclical). 
Some will sell the stock of banks, others will look at developers or home building companies, materials companies, retailers of household goods, financiers, or the institutions that insure mortgages. 
Alternatively some may look at buying Australian government bonds, while one of the cleanest and potentially profitable ways to bet against the housing market might be to short the Australian dollar, which at 76.7 US cents arguably still has plenty of downside. 
Timing short bets is important
Maintaining short positions can be costly in terms of interest or dividend obligations, while opportunity cost of suboptimal market timing is another factor to be considered. 
There has been plenty of discussion of the potential impact of an apartment glut in Australia, but in the case of both Melbourne and Sydney accelerating population growth appears to be absorbed much of the new supply to date, although tens of thousands of apartments remain under construction.
The potential for non-resident buyers defaulting on apartment settlements has been another salient risk closely watched by sceptics, though to date news of any fallout appears to have been relatively contained.  
One market risk which cannot so easily be quantified is the potential for defaults in the scenario whereby mortgage rates increase, prices in secondary and lower socio-demographic areas decline, and a swathe of interest only loans reach the end of their interest only period. 
Maths can get ugly
Anyone who had a standard variable rate mortgage in 2009 at above 8 percent will recall that principle and interest repayments could be excruciatingly difficult.
Consider that a homeowner with a $600,000 interest only mortgage at 4.5 percent today might be paying only ~$2,250 per month, whereas as and when the mortgage flips to principal and interest, were the mortgage rate to have increased to 6 percent the repayments could be more than 50 percent higher, even on a 30 year product.
Mortgage repayment calculators don't always give the option to calculate what would happen in a 7 percent scenario, but the answer on a 30 year product might be a potentially punishing ~$4,000 per month. 
With the amount of outstanding interest only debt having increased at an unprecedented pace through this cycle it's not too hard to analyse when this market risk will arise, and in turn which areas might see defaults increase. 
The most successful shorters will be those that can combine market timing with bets lined up against those companies with the most vulnerable financials. 
The big players
Market participants will be well aware of the attractive mortgage rates that the Commonwealth Bank of Australia (CBA) has been offering lately, and in turn the growth in the CBA investor mortgage book looks likely to bump up against the notional 10 percent per annum cap set by the regulator APRA.
Unfortunately for analysts the market data reported for investor loans has been muddied by reclassifications from investor to owner-occupier loans.
For example, the Westpac Banking Corporation (WBC) switched more than $21 billion of loans between July and October 2015 taking outstanding investor credit down from $156 billion to $135 billion and in turn causing its year-on-year growth in outstanding investor credit to appear negative for some time. 
<a href="https://www.propertyobserver.com.au/images/2017/02/28/A5.jpg" target="_blank">Click 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/2017/02/28/A5.jpg" alt="">
Despite the reclassification Westpac retains the greatest balance of outstanding investor loans, while Commonwealth has the largest total of outstanding household mortgage debt, although the quality of loans rather than the volume is what should be of interest to analysts. 
Investors today typically pay higher mortgage rates than owner-occupiers, with further tweaks a possibility in 2017. 
<a href="https://www.propertyobserver.com.au/images/2017/02/28/A4.jpg" target="_blank">Click 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/2017/02/28/A4.jpg" alt="">
What shorters should really be paying attention to is which financiers, insurers and developers have been active in the highest risk markets, areas which have been discussed here on this blog previously. 
Prospective borrowers should take into account the likelihood that mortgage rates may move higher over the years ahead. 
PETE WARGENT is the co-founder of <a href="https://allenwargent.com/">AllenWargent</a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/">blogger</a>.
His latest book is <a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx">Four Green Houses and a Red Hotel</a>.
 
 
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Outstanding housing debt has been compounding: Pete Wargent

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<div>The Reserve Bank released its Board Meeting Minutes today for June 2018. </div>
<div> </div>
<div>I noted the other day that there was an addition in June relating to declining mortgage rates on outstanding loans. </div>
<div> </div>
<div>It was interesting to note that in today's release the wording was given a little tweak to add a bit more clarity, suggesting that mortgage rates on new housing are no longer falling. </div>
 
<div class="separator"><img src="https://1.bp.blogspot.com/-XUa5IBHKl30/Wyi8hJGD8LI/AAAAAAAAqqQ/uOGb4cMNgIYJvLI3hzpxqcC0W1ZQETVaQCLcBGAs/s400/RBA%2BTweak.jpg" width="392" height="400" data-original-height="713" data-original-width="704"></div>
 
<div>There was a bit of discussion about the positive impacts of immigration on the ageing population. Australia has experienced strong population growth over the past decade. Thanks to young migrants, notably the median age had declined in New South Wales and Victoria. There was a murmur of excitement due to there being no direct reference to the next move in rates being up.</div>
<div> </div>
<div>Not sure I'd read too much into that personally, although currency markets flickered a little!</div>
<div> </div>
<div>There was also a reference to wages being 'low and stable' which isn't wording that exactly screams imminent tightening, although there is reportedly some evidence of wage pressures in parts of the economy. </div>
<div> </div>
<div>In any event, reality is dawning on financial markets, with RBA meeting overnight indexed swaps looking increasingly skinny and now not pricing in a hike until 2020. </div>
 
<div class="separator"><img src="https://2.bp.blogspot.com/-DKhJxLca4W0/Wyi8IWgEHSI/AAAAAAAAqqI/S7QL7LzI-4kS9hTrJTk-Uw1HH1ntXiVTQCLcBGAs/s640/OIS.jpg" width="640" height="406" data-original-height="787" data-original-width="1240"></div>
 
<div>Source: Martin Whetton, ANZ</div>
 And a lot might change between now and 2020 - including the government. As you were.
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Financial markets now not pricing in a cash rate hike until 2020: Pete Wargent

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GUEST OBSERVER
CoreLogic’s Accumulation Index looks at the total returns from the housing asset class factoring in the change in the value of the dwelling and the gross rental return from the property.
The CoreLogic Accumulation Index shows that nationally, the total returns from the housing asset class over the 12 months to August 2017 were 13.2%.  Because the return is calculated from value change as well as the gross rental yield, you tend to find that houses have a superior value growth performance while units offer superior rental returns.  
Over the past year, total returns for houses nationally have been recorded at 13.5% compared to a 12.0% return for units.  Over the 10 years to August 2017, the annual total returns for housing nationally have been recorded at 8.8%, split between 8.9% for houses and 8.5% for units.
<h3 class="text-align-center">Annual total returns from the housing asset class, National</h3>
Click to enlarge
<img src="https://www.urban.com.au/images/2017/09/20/2017-09-18-image1.png" alt="">
Total housing returns have generally been superior in capital cities to regional markets however, in the 2008 and 2010-11 downturns, returns slumped by a greater magnitude in the capital cities.  Over the past decade, combined capital city annual total returns have been recorded at 9.3% with returns of 9.5% for houses and 9.0% for units.  Over the 12 months to August 2017, total returns have been recorded at 14.0% for houses and 12.3% for units.  Like the national chart, the recent data for the combined capital cities shows that total returns have started to slow.
<h3 class="text-align-center">Annual total returns from the housing asset class, combined capital cities</h3>
Click to enlarge
<img src="https://www.urban.com.au/images/2017/09/20/2017-09-18-image2.png" alt="">
Regional markets are also beginning to see total returns slow however, the returns over recent years have generally not been as strong as those across the combined capital cities.  Over the past 12 months, total returns have been recorded at 11.7% for houses and 10.2% for units.  Over the past decade, annual total returns for housing outside of the capital cities have been recorded at 7.0%, 7.2% for houses and 5.6% for units.
<h3 class="text-align-center">Annual total returns from the housing asset class, combined regional markets</h3>
Click to enlarge
<img src="https://www.urban.com.au/images/2017/09/20/2017-09-18-image3.png" alt="">
Hobart has recorded the strongest annual growth of all capital cities over the past year and it also has some of the highest rental yields which has meant it has had the strongest total returns.  Total returns for houses over the past year have been above 10% in each of Sydney, Melbourne, Adelaide, Hobart and Canberra.  For units, double-digit total returns have been achieved over the past year in each of Sydney, Melbourne and Hobart.  Units in Darwin were the only capital city property type to achieve negative returns over the past year.
<h3 class="text-align-center">Annual total returns from the housing asset class, individual capital cities, to Aug-17</h3>
Click to enlarge
<img src="https://www.urban.com.au/images/2017/09/20/2017-09-18-image4.png" alt="">
With capital growth now appearing to have peaked and rental yields at record lows it is reasonable to expect a further moderating of total returns over the coming months.  
The other important thing to consider when looking at total returns is the calculation of the rental income.  Although rents are increasing in many areas, the assumption in a gross rental yield calculation is that the property is occupied for 52 weeks of the year.  In some parts of the country this is increasingly difficult to achieve and it can eat into the investment returns.
The total returns data, particularly for the past decade, shows why housing investment has been so popular and hit record highs.  
Returns have been fairly consistent and less volatile than equities however, the ongoing strength and the evidence of a recent slowdown should give investors pause for thought.  
With mortgage rates starting to increase for investors, record-high levels of new housing supply and value growth slowing, housing investors shouldn’t assume that the types of returns seen over recent years will continue to be replicated going forward.
Cameron Kusher is research analyst for CoreLogic. You can contact him <a href="https://blog.corelogic.com.au/about/" target="_blank">here</a>.
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Total returns from housing are starting to ease: Cameron Kusher

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Demand for fixed rate home loans fell in February, according to new data from Mortgage Choice.
The broker's latest national home loan approval data showed demand for fixed rate home loans fell over the month of February, accounting for 22.82% of loans - a reduction of 1.05% from the month prior.
Demand for fixed rate loans had picked up in the latter half of 2018, in what may have been a response to rate hikes on variable home loan products.
Mortgage Choice found that borrower preference varied across the country :
<ul>
<li>Borrowers in Queensland were the most likely to fix their interest rate, with over 25% opting for a fixed rate home loan; </li>
<li>This was followed by New South Wales where over 24% of borrowers chose to fix their home loans; </li>
<li>In South Australia 22% of borrowers opted for a fixed rate mortgage;</li>
<li>In Western Australia 20% of borrowers chose to fix;</li>
<li>And Victorians continue to prefer variable rate home loans with almost 17% choosing to fix their home loans.</li>
</ul>
<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/2019/3/14/susan-mitchell_ceo_mortgage-choice_b.jpg" alt="">
Mortgage Choice Chief Executive Officer Susan Mitchell (pictured above) said a number of reasons may be discouraging borrowers from locking in to a fixed rate.
“Mounting speculation that the Reserve Bank may cut the official cash rate later this year may be weighing on borrower expectations around interest rates. These borrowers, who are expecting interest rates to fall in the near term may be less inclined to lock in to a fixed rate,” said Mitchell. 
“Borrowers’ caution may be compounded by continued property price falls in the nation’s capitals which, according to the latest figures from CoreLogic fell 0.9% in the month of February. 
“In the current property market, it is unsurprising to see an increase in demand for variable rate loan products. These loans are more flexible and allow borrowers to make added loan repayments, access home loan features such as an offset account and redraw facility, and of course save on their loan repayments if their interest rate drops.
“That being said, fixed rate loans are still an attractive option to people who are looking for certainty in their home loan repayments.  This is particularly important at a time when there is considerable uncertainty in the market.
“Fixed rate loans may be a suitable option for borrowers who foresee a potential change to their income or, budget constraints.
“At present, there are many deals to be had for those looking to lock in a fixed rate, with two-year fixed rate loans on our lender panel as low as 3.69% p.a.* it’s a great time to review your home loan.
“My advice for anyone looking to have the best of both worlds is to speak to their mortgage broker about splitting their loan, which allows a borrower to allocate a proportion of the loan to a fixed interest rate, and a proportion to a variable interest rate depending on their financial situation.”
* NAB First Home Buyers Special 2 Year Choice Fixed Rate OO P&amp;I accurate at 8 March 2019
<a href="https://www.propertyobserver.com.au/images/2019/3/14/1.jpg" target="_blank">Click here</a> to enlarge:
 <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/2019/3/14/1.jpg" alt="">
<a href="https://www.propertyobserver.com.au/images/2019/3/14/2.jpg" target="_blank">Click here </a>to enlarge:
<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/2019/3/14/2.jpg" alt="">
Source: Mortgage Choice
 
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