<p>Repeat buyers are one of the strongest measures of confidence in any apartment development.</p>

<p>At <a href="https://www.apartments.com.au/new-apartments/era-newcastle-west-124-126-bull-street-newcastle-west-nsw-2302">ERA</a> in Newcastle West, some purchasers are returning to <a href="https://www.apartments.com.au/developers/gwh">GWH</a> after living at the developer's One Apartments. Their decision to purchase again was driven by the quality of life they found after moving into their first GWH home.</p>

<p>Keith Wilton had spent years living in a house in East Maitland before deciding it was time for a change. Apartment living had always been on his radar, but he was selective about what he wanted.</p>

<p><iframe allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" allowfullscreen="" frameborder="0" height="315" referrerpolicy="strict-origin-when-cross-origin" src="https://www.youtube.com/embed/FH_1EzB-1vs?si=XScVlP1ERsTDJoME" title="YouTube video player" width="560"></iframe></p>

<p>"I had some boxes I wanted to tick," he says.</p>

<p>Keith points to the open-plan design, generous outdoor areas and considered inclusions as key reasons One Apartments worked for him.</p>

<p>“One of those things was a nice indoor open plan area, but also I wanted a nice outdoor open area that I could entertain on in summer or Christmases or birthdays,” he says.</p>

<p>He also found value in the smaller details, from integrated appliances to shared resident spaces including the pool, cinema and rooftop areas.</p>

<p>[smartcode_project:default project_id=135096 project_image_fid=356818]</p>

<p>After comparing several developments, he chose One Apartments because of GWH's longstanding local reputation and his own experience working with the developer on a commercial project more than a decade earlier.</p>

<p>"I knew that they were local, that the quality of the build was going to be up there. I'd looked at other apartment complexes around and close by, and I just knew that here was a better decision location wise."</p>

<p>Today, Keith says the move has completely changed how he experiences Newcastle.</p>

<p>"I enjoy living in this location because it's more of a lifestyle change. That Newcastle city living where you can walk to restaurants and bars and even beaches and parks and even shopping across the road."</p>

<p>[smartcode_project:default project_id=135096 project_image_fid=356828]</p>

<p>Beyond the location, he says it's the sense of community that has surprised him most.</p>

<p>"Everyone loves living here because they chose to live here, but everyone looks out for each other. It's a real great community feel here."</p>

<p>For Aimee and Lyle Goodman, the journey started almost by chance.</p>

<p><iframe allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" allowfullscreen="" frameborder="0" height="315" referrerpolicy="strict-origin-when-cross-origin" src="https://www.youtube.com/embed/tsioMLcnjas?si=zq-ys3JuWpfa5hFv" title="YouTube video player" width="560"></iframe></p>

<p>The couple happened to be having coffee in Newcastle when they noticed the site where One Apartments was about to begin construction.</p>

<p>"We were aware GWH was planning a development," Aimee says. "We made one phone call and things moved pretty quickly after that."</p>

<p>As busy business owners, they initially thought apartment living would simply reduce the maintenance that came with larger homes. Instead, it fundamentally changed how they spent time together.</p>

<p>"We actually catch up more as a family now," Aimee says.</p>

<p>"We've had homes with big yards and lots of space, but everyone ended up in different rooms. Here we'll have dinner together, the kids can play, and we spend far more quality time together."</p>

<p>[smartcode_project:default project_id=135096 project_image_fid=356829]</p>

<p>Lyle says their confidence came from GWH's reputation within Newcastle's building industry.</p>

<p>"I know people who've worked across different apartment projects, and whenever GWH came up the feedback was always the same. They're rock solid. They're quality."</p>

<p>That confidence only grew throughout the buying process.</p>

<p>"One of the things that really impressed us with GWH was the whole process, was the communication," Lyle says. "It was consistent, it was regular, there was no problem if we had some weird questions, there was no problems in getting answers."</p>

<p>[smartcode_project:default project_id=135096 project_image_fid=351104]</p>

<p>Aimee says one moment stood out.</p>

<p>"The project actually finished on time. We realised we needed to hurry up and sell our house because everything was happening exactly when they said it would."</p>

<p>The positive experience at One Apartments ultimately gave all three buyers the confidence to purchase again with GWH, this time at ERA.</p>

<p>Their confidence reflects what many buyers are seeking in today's apartment market. Location remains important, but so too does certainty around delivery, quality and long-term liveability.</p>

<p>[smartcode_project:default project_id=135096 project_image_fid=356822]</p>

<p>ERA builds on those foundations with 280 one, two and three-bedroom apartments across two landmark towers in <a href="https://www.apartments.com.au/developments/newcastle-west-nsw-2302">Newcastle West</a>.&nbsp;</p>

<p>Designed by <a href="https://www.apartments.com.au/architects/fk-australia">Fender Katsalidis</a>, the project will include more than 2,000 square metres of resident amenities, including a resort-style pool, gym, sauna, private cinema and rooftop entertaining spaces overlooking the harbour and coastline.&nbsp;</p>

<p>The development is also within walking distance of the Newcastle Interchange, Honeysuckle, Darby Street, the harbour foreshore, restaurants, retail and the city’s beaches, continuing the walkable lifestyle that existing GWH buyers say has transformed how they live.</p>

<p>[smartcode_project:default project_id=135096 project_image_fid=356826]</p>

<p>For Keith, the appeal remains straightforward.</p>

<p>"You feel at home even before you've moved into your home."</p>

<p>For Aimee, the change is measured in time.</p>

<p>“I just felt like I had more time,” she says.</p>

<p>[smartcode_project:default project_id=135096 project_image_fid=351102]</p>

<p>Construction at ERA is now underway, with more than half of the residences already sold and limited two and three-bedroom apartments remaining in the East Tower release. Priced from $980,000 for two-bedroom residences and $1.46 million for three-bedroom residences, buyers can secure an apartment with a 10 per cent deposit, with premium homes offering ocean views from Level 8 and harbour views from Level 10.</p>

<p>ERA is also backed by Resilience Insurance's 10-year Latent Defects Insurance policy, providing protection against structural or waterproofing defects for 10 years after completion. The project is anticipated to be completed in early 2028.</p>

<p>[smartcode_project_cta:default project_id=135096]</p>


Joel Robinson

From ONE to ERA: Why buyers are choosing GWH again in Newcastle West

<p>Virgate Property Group is preparing to commence construction of Verdé, its new apartment development in Melbourne's Arts Precinct at Southbank, following a strong run of sales that has seen more than half of the project's 173 apartments secured.</p>

<p>Verdé has attracted a broad mix of first home buyers, owner-occupiers upgrading from nearby inner-city suburbs and investors, with younger owner-occupier couples aged between 28 and 45 accounting for the strongest enquiry. Many are already living in Southbank, South Melbourne, Albert Park, Port Melbourne, South Yarra and the CBD.</p>

<p>"Verdé is located in one of the most desirable pockets of southern Melbourne," Blair Property Group Director Darren Blair, who is managing sales at Verdé, said.</p>

<p>"It's within walking distance of the Arts Centre, Royal Botanic Gardens, Albert Park Lake, and Southbank's restaurants and retail. It's a great lifestyle location with strong amenity and liveability, which made it a very attractive choice for the project."</p>

<p>[smartcode_project:default project_id=4661 project_image_fid=372549]</p>

<p>Virgate was already familiar with the precinct, having previously delivered the successful Domain House development in neighbouring South Melbourne. That experience gave the developer confidence to acquire the Coventry Street site and continue expanding its presence in Melbourne's inner south.</p>

<p>"We had been keeping an eye on the site and the broader precinct for a few months before deciding to move forward with the acquisition," Virgate said.</p>

<p>The project was ultimately secured in 2020 following feasibility studies, planning assessments and due diligence, with the brief centred on delivering "a high-quality, considered design that feels both refined and fit for purpose."</p>

<p>[smartcode_project:default project_id=4661 project_image_fid=314259]</p>

<p>Designed by <a href="https://www.apartments.com.au/architects/bruce-henderson-architects">Bruce Henderson Architects</a>, Verdé comprises 173 one, two and three-bedroom apartments priced from $599,000. The architecture is distinguished by a faceted glass façade that responds to both the site's outlook and Melbourne's changing light conditions.</p>

<p>According to Bruce Henderson Architects, the coloured glazing gives the building a distinctive identity while also providing privacy and solar shading, with residences oriented to capture views across the bay, city skyline and surrounding parklands.</p>

<p>Inside, <a href="https://www.apartments.com.au/interior-designers/designoffice">DesignOffice</a> has created interiors focused on natural light, efficient planning and enduring materials. Apartments feature engineered oak flooring, natural stone benchtops, floor-to-ceiling glazing and SMEG appliances, while a restrained material palette aims to complement the expansive outlooks rather than compete with them.</p>

<p>[smartcode_project:default project_id=4661 project_image_fid=372550]</p>

<p>Resident amenity has also been designed around everyday functionality rather than occasional use. Facilities include a concierge-serviced lobby, residents' lounge with fireplace, library and co-working space, gym, terrace garden with barbecue facilities, ground-floor café, and package delivery management.</p>

<p>The project's location continues to be one of its strongest drawcards. Positioned on Coventry Street, Verdé sits within walking distance of the National Gallery of Victoria, Arts Centre Melbourne, Royal Botanic Gardens and Albert Park Lake, while Southbank's dining precinct, Sturt Street trams and the new ANZAC Station are all nearby. The surrounding education catchment also includes Melbourne Grammar, Melbourne Girls Grammar, Mac.Robertson Girls' High School and several major university campuses.</p>

<p>The sales team says buyers have responded particularly well to the combination of location, design quality and long-term liveability.</p>

<p>"They're responding really positively to the quality of the design, premium resident amenities and the uninterrupted views. Many also appreciate the location and how connected it is to everything they need."</p>

<p>The ability to secure stamp duty savings before completion has also been a key factor for purchasers, alongside the opportunity to personalise finishes ahead of settlement.</p>

<p>With construction set to commence soon and more than half the apartments already sold, Verdé enters its next phase as one of the Arts Precinct's more established apartment developments, offering remaining buyers an opportunity to secure a residence before construction advances further. Expected completion is scheduled for late 2027.</p>

<p>[smartcode_project_cta:default project_id=4661]</p>


Virgate's Verdé Southbank moves toward construction as sales fly past halfway stage

<p>Downsizer-focused apartment development Kooyongkoot in Hawthorn has been recognised at the 2026 Better Future Melbourne Design Awards, taking home Gold and Silver awards in two categories.</p>

<p><a href="https://www.apartments.com.au/new-apartments/kooyongkoot-hawthorn-1-kooyongkoot-road-hawthorn-vic-3122">Kooyongkoot</a>, currently being delivered by developer PQD and designed by Cera Stribley, received Gold in the Interior Design – Proposed category and Silver in the Architecture – Proposed category.</p>

<p>The dual recognition reflects the design approach behind the boutique development on prestigious Kooyongkoot Road, where the focus has been on creating homes for downsizers seeking the space, quality and functionality of a detached house within a low-rise apartment building.</p>

<p>Rather than maximising apartment numbers, <a href="https://www.apartments.com.au/developers/pqd">PQD</a> and <a href="https://www.apartments.com.au/architects/cera-stribley-architects">Cera Stribley</a> limited the development to just 18 residences, allowing for larger floorplans, greater privacy, generous landscaping and expansive communal spaces.&nbsp;The majority of the apartments also benefit from corner aspects, allowing for dual sources of natural light.</p>

<p>Now around 70 per cent complete and on track for completion in November 2026, Kooyongkoot will comprise a mix of garden residences, ter​race apartments, sub-penthouses, and is crowned by two half-floor penthouses with direct lift access and private rooftop terraces.</p>

<p>[smartcode_project:default project_id=102717 project_image_fid=355297]</p>

<p>The Silver Award for Architecture recognised the way the building responds to its prominent corner position at the ent​rance to Hawthorn's Scotch Hill precinct, one of Melbourne's most established residential neighbourhoods.</p>

<p>Rather than competing with the grand homes that line Kooyongkoot Road, the architectural approach focused on restraint and longevity, using curved brickwork, generous landscaping and carefully considered proportions to integrate with the existing streetscape.</p>

<p>"The form feels fluid and timeless, as though shaped by the landscape itself – architecture that belongs, rather than competes," said Chris Stribley, Co-Founder and Managing Principal of Cera Stribley.</p>

<p>The judging submission also highlighted practical innovations throughout the building, including lift cores servicing only nine homes each, a central landscaped lightcourt designed to bring daylight and ventilation into the building, and fully enclosed private storage rooms with lighting, power and shelving to better accommodate residents transitioning from larger family homes.</p>

<p>[smartcode_project:default project_id=102717 project_image_fid=355293]</p>

<p>The Gold Award for Interior Design recognised the project's focus on long-term liveability rather than display-home aesthetics.</p>

<p>According to the awards submission, the interiors were designed from the inside out, prioritising how homes would function over decades of daily use through generous proportions, practical storage, durable natural materials and flexible layouts.</p>

<p>The specification includes natural stone throughout, upgraded acoustic glazing, V-ZUG appliances and fully enclosed storage rooms, alongside an amenity offering focused on wellness, entertainment and everyday convenience.&nbsp;</p>

<p>Residents will have access to a gym and yoga studio, a wellness centre featuring traditional and infrared saunas, a cold therapy shower and treatment room, as well as a residents' lounge and golf simulator/cinema room for entertainment.&nbsp;Kooyongkoot has also considered the everyday convenience of its residents by offering a private carwash and pet wash facilities on site as well as dedicated parcel lockers and oversized fully enclosed storage rooms.&nbsp;</p>

<p>[smartcode_project:default project_id=102717 project_image_fid=355303]</p>

<p>The project's attention to detail has already resonated with buyers. Earlier this year, Kooyongkoot recorded one of Boroondara's highest apartment sales when an $8 million penthouse was purchased by a Melbourne CEO downsizing from a nearby family home.</p>

<p>"Every detail feels deliberate, from the overall design down to the smallest touches," the purchaser said.</p>

<p>"The level of quality and refinement is exceptional, but what really sold it was how liveable it felt... It felt like a place where everything had been considered, not just a luxury building."</p>

<p>[smartcode_project:default project_id=102717 project_image_fid=355304]</p>

<p>Sustainability also formed a key part of both award submissions. Kooyongkoot is targeting a minimum 7.5-star NatHERS rating across all residences, supported by passive design principles, high-performance glazing, EV charging infrastructure, water reuse systems and a wellness model focused on lower-energy dry facilities rather than pools and large wet areas.</p>

<p>Located within walking distance of Scotch College, Methodist Ladies' College, Koo​yong Lawn Tennis Club, Aubur​n Village and Camberwell Junction, Kooyongkoot continues to target owner-occupiers looking to remain in Melbourne's inner east without compromising on space or quality. A limited selection of two, three and four-bedroom residences remains available, with prices starting from $1.9 million.</p>

<p>[smartcode_project_cta:default project_id=102717]</p>


Kooyongkoot wins Gold and Silver at Better Future Melbourne Design Awards

<p>New apartment supply has become increasingly constrained across <a href="https://www.apartments.com.au/developments/parramatta-nsw-2150">Parramatta</a> in recent years, with fewer projects progressing through to completion as development conditions have become more challenging.</p>

<p>It makes <a href="https://www.apartments.com.au/developers/novm">NOVM</a>'s 2021-completed <a href="https://www.apartments.com.au/buildings/the-lennox-parramatta-12-phillip-street-parramatta-nsw-2150">The Lennox</a> one of the most recently completed residential towers on the Parramatta River, and among the newest apartment developments in Sydney's second CBD.</p>

<p>With the project largely completed before the sharp escalation in construction costs and inflation following the pandemic, The Lennox is now offering pricing that would be difficult to replicate in a comparable new development in Parramatta today, or across much of Western Sydney.</p>

<p>The majority of the 413 apartments at The Lennox sold before and shortly after completion. A limited release of the remaining apartments has recently been brought to market by capital partner <a href="https://www.apartments.com.au/project-marketer/equitifund-group">Equitifund</a>, with entry-level pricing from $700,000 and two-bedroom apartments available from under $1 million.</p>

<p>Rising above the Parramatta River at 12 Phillip Street, The Lennox comprises one, two, three and four-bedroom apartments, appealing to first home buyers, young professionals, families, downsizers and interstate investors seeking a completed apartment in one of Australia's fastest-growing economic centres.</p>

<p>[smartcode_project:default project_id=5743 project_image_fid=372394]</p>

<p>Rather than positioning Parramatta as an alternative to Sydney's CBD, Equitifund believes the city has reached a point where it stands on its own merits.</p>

<p>"Parramatta is no longer simply an alternative to Sydney CBD, it's becoming a destination in its own right," Equitifund Executive Chairman Greg Huxley said.</p>

<p>"The Lennox captures that evolution with a level of quality and amenity that's difficult to match at its price point."</p>

<p>[smartcode_project:default project_id=5743 project_image_fid=953]</p>

<p>Designed by <a href="https://www.apartments.com.au/architects/marchese-partners">Marchese Partners</a>, the tower responds directly to its riverfront setting through expansive glazing and open-plan layouts that maximise views across the Parramatta River and city skyline. Interiors feature engineered timber flooring, stone benchtops, stainless steel appliances and floor-to-ceiling glazing, while generous balconies extend the living spaces outdoors.</p>

<p>Marchese Partners says the project was conceived to balance high-quality apartment living with practical, long-term functionality, pairing larger, efficient floorplans with amenities more commonly associated with five-star hotels.</p>

<p>That emphasis continues through the resident facilities, which include a 20-metre rooftop swimming pool, fully equipped gym and wellness spaces, full-time concierge, a residents' lounge, function room, private lifts, secure basement parking and rooftop communal areas overlooking the Parramatta River. Ground-floor boardwalk retail and dining further activate the riverfront and integrate the building into the surrounding public realm.</p>

<p>[smartcode_project:default project_id=5743 project_image_fid=925]</p>

<p>Australian housing and finance group Equitifund has secured the remaining apartments, believing there are few completed apartment opportunities in Parramatta that offer the same combination of location, amenity and pricing.</p>

<p>Equitifund National Sales Director Ben Hamblett says buyers are increasingly recognising that premium apartment living no longer needs to come with Sydney CBD pricing.</p>

<p>"The Lennox is where aspirational living becomes attainable," Hamblett said.</p>

<p>"Wake to river and mountain views, step into Sydney's Second CBD, and arrive home to resort-calibre amenities, all without the harbour price tag."</p>

<p>Hamblett says owner-occupiers are also attracted by the convenience of having Westfield Parramatta, Church Street's dining precinct, Parramatta Park, Riverside Theatres, Western Sydney University and major transport connections all within walking distance.</p>

<p>"At The Lennox, lifestyle is not an afterthought, it is the foundation."</p>

<p>[smartcode_project:default project_id=5743 project_image_fid=5374]</p>

<p>The Lennox places residents within walking distance of Parramatta Square, Westfield Parramatta, Church Street Eat Street, Parramatta Station, the ferry wharf, Light Rail, the future Sydney Metro West, Parramatta Park and CommBank Stadium, reinforcing Parramatta's position as one of Australia's most connected metropolitan centres outside Sydney's CBD.</p>

<p>Equitifund says buyers visiting the display suite consistently comment on the quality of the finishes, generous floorplans, river and skyline views, and the walkability of the location. The project has attracted a broad mix of local professionals, upsizers, downsizers, buyers relocating from Sydney's inner suburbs and interstate investors seeking long-term growth opportunities.</p>

<p>That demand aligns with Parramatta's continued evolution as an economic powerhouse. Equitifund Research and Market Insights specialist John Bekiaris says sustained population growth, infrastructure investment and expanding employment opportunities continue to support long-term housing demand across the city.</p>

<p>"Parramatta has evolved from a satellite city into one of Australia's most important economic centres. Population growth, infrastructure investment and employment are all supporting sustained long-term housing demand."</p>

<p>[smartcode_project_cta:default project_id=5743]</p>


The apartment price gap drawing Sydney buyers west

<p>A luxury beachfront apartment at Rainbow Bay has more than doubled in value since it sold off the plan six years ago, setting a new local apartment record in the process.</p>

<p>The three-bedroom apartment in the Flow development on Petrie Street, the first of four new projects locally by Paul Gedoun's S&amp;S Projects, has sold for $7.4 million, after originally selling for $3.27 million when the project launched in 2020.</p>

<p>The seventh-floor apartment, comprising 187 sqm of internal living space and a 54 sqm balcony overlooking Froggies Beach and Snapper Rocks, was purchased by a local family.</p>

<p>The transaction was negotiated by Pezet Matheson director Kerry Pezet and equates to more than $30,000 per sqm.</p>

<p>Pezet said the sale reflected the limited opportunities to buy into the boutique beachfront development.</p>

<p>"The sale highlights the rarity of opportunities within the boutique beachfront development, where residences seldom become available," Pezet said.</p>

<p>"Flow is one of the Gold Coast's most tightly held buildings. Buyers from our database move quickly when residences become available, and achieving an off-market sale at $7.4 million demonstrates the depth of demand for property of this calibre."</p>

<p><img alt="Flow" data-entity-type="file" data-entity-uuid="c585b206-2130-4eee-a50c-3f27c51a7c70" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-07-06%20at%208.33.25%E2%80%AFPM.png?VersionId=m3pHRDV62Y3fvN.XQuQHq.52ilTWpRLf" /></p>

<p>Flow was the first of four luxury apartment developments delivered by Paul Gedoun's S&amp;S Projects at Rainbow Bay and was completed in 2023.</p>

<p>Positioned on the beachfront overlooking Snapper Rocks, the residence includes three bedrooms, three bathrooms, a powder room and views stretching north along the coastline towards Surfers Paradise.</p>

<p>Pezet Matheson Residential principal Mitchell Lambert said buyers continued to prioritise quality beachfront apartments in tightly held locations.</p>

<p>"Flow Residences offers a rare combination of elevated beachfront positioning, architectural excellence, comprehensive resident amenity and premium finishes, which is exactly what discerning purchasers are seeking," Lambert said.</p>

<p>"The transaction further reinforces Rainbow Bay's reputation as one of Australia's premier coastal lifestyle destinations, where limited supply and growing demand continue to support strong market performance."</p>

<p>Pezet Matheson originally marketed and sold out Flow off the plan, making the latest transaction a return to one of the project's original buyers.</p>

<p>Paul Gedoun is selling his third project, <a href="https://www.apartments.com.au/new-apartments/radia-rainbow-bay-271-boundary-street-coolangatta-qld-4225">Radia Rainbow Bay</a>, after recently completing, and selling out, <a href="https://www.apartments.com.au/buildings/esprit-217-227-boundary-street-coolangatta-qld-4225">Esprit</a>. He has plans for a <a href="https://www.apartments.com.au/news/qld/first-look-s-s-projects-proposes-88-apartment-wellness-tower-at-coolangattas-boundary-street">fourth building</a>, 88 apartments on <a href="https://www.apartments.com.au/new-apartments/209-213-boundary-street-coolangatta-qld-4225">Boundary Street</a>.</p>


Rainbow Bay apartment doubles in price since off the plan sale during pandemic

Owner Occupiers

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<p>After the tightening, it is now time for the banks to offer incentives to owner occupiers applying for home loans, but mostly for customers paying principal and interest.</p>
<p>Earlier this week, Westpac announced an eight basis-point cut in variable interest rates for customers paying principal and interest on their owner occupier home loans, taking the standard variable rate for these owner occupiers to 5.24 percent p.a.</p>
<p>Westpac followed a similar move by ANZ earlier this month, when it announced a five basis point cut in variable interest rates for customers paying principal and interest on home loans.</p>
<p>The bank’s standard variable rate for owner-occupiers is at 5.20 percent p.a.</p>
<p>The rate wars prompted comparison website Mozo’s director Kirsty Lamont telling News Corp that “the gloves are off and owner occupier borrowers are the winners”.</p>
<p>It encouraged owner occupiers with principal and interest loans to shop around and take advantage of the competition between banks right now.</p>
<p>For those looking to identify the cheapest home loans, the comparison website has announced the winners of its 2017 Experts Choice Home Loan Awards.</p>
<p>Mozo analysed 504 mortgage products from 89 lenders and awarded the top 10 percent across eight categories designed to reflect different types of borrowers. </p>
<p>The first spot was occupied by loans.com.au whose top product Essentials Variable 80 offers a variable interest rate of 3.64 percent (3.66 percent comparison rate).</p>
<p>Mozo rated the product a winner in multiple categories, including best Split Home Loan and best Variable Rate Loan for both owner-occupiers and investors.</p>
<p>Next was UBank’s UHomeLoan product with a variable rate of 3.74 percent (3.74 percent comparison rate) with no upfront fees.</p>
<p>The third place was reserved by State Custodians Low Rate Home Loan with Offset, a product that offers a 3.69 percent variable interest rate (3.72 percent comparison rate) with the benefit that customers can use an offset account and save on interest.</p>
<p>The others in the list were Bank Australia’s Basic Home Loan, Newcastle Permanent’s Discounted Variable Home Loan, Heritage Bank’s Discount Variable Home Loan Special and Gateway Credit Union’s Variable Rate Home Loan. Their products had interest rates from 3.84% to 3.99%, according to Mozo.</p>
<p>None of the big banks figured in the list.</p>
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jonathanchancellor-7SQnKwU6yx

Banks in rate war for owner occupier lending

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<p>GUEST OBSERVER</p>
<p>The March housing finance approvals report was largely in line with expectations.</p>
<p>The number of approvals for owner occupier loans dipped 0.5 percent/mth but were flat ex refi. The consensus forecast was for a flat result. Approvals ex refi were up 3.8 percent yr. The value of investor loans rose 0.8 percent after a sharp 5.7 percent pull back in Feb, annual growth coming in at 14.2 percent/yr.</p>
<p><a href="https://www.propertyobserver.com.au/images/2017/05/15/Screen%20Shot%202017-05-16%20at%208.39.38%20AM.png" target="_blank">Click to enlarge</a></p>
<p><img src="https://www.urban.com.au/images/2017/05/15/Screen%20Shot%202017-05-16%20at%208.39.38%20AM.png" alt=""></p>
<p>All up the data was largely as expected – note that the latest round of macro prudential tightening was only announced in late March with impacts likely to come through in Apr-Sep. That said, the more moderate reads on investor loans in Feb-Mar suggest lenders were already reining activity in this segment to keep within APRA’s existing 10 percent limit on investor credit growth (i.e. growth in the total stock of loans).</p>
<p> </p>
<p><a href="https://www.propertyobserver.com.au/images/2017/05/15/Screen%20Shot%202017-05-16%20at%208.40.34%20AM.png" target="_blank">Click to enlarge</a></p>
<p><img src="https://www.urban.com.au/images/2017/05/15/Screen%20Shot%202017-05-16%20at%208.40.34%20AM.png" alt=""></p>
<p>The detail showed, ex refi, a solid gain in owner occupier approvals in NSW (+2.9 percent/mth) offset by falls in the other major states ranging from –1.3 percent/mth in Vic and –1.8 percent/mth in SA to –3.4 percent/mth in Qld and –4.4 percent/mth in WA. Annual growth remains positive for all states except WA.</p>
<p>Construction-related finance approvals posted a solid 4.3 percent/mth rise led by a 10 percent bounce in finance for the purchase of newly built dwellings (which includes apartments and ‘off the plan’ purchases). This segment showed a similar sized fall in Feb.</p>
<p>The total value of loans ex refi rose 1.3 percent, partially reversing Feb's 2.2 percent fall. Annual growth edged up to 10 percent.</p>
<p><a href="https://www.propertyobserver.com.au/images/2017/05/15/Screen%20Shot%202017-05-16%20at%208.41.36%20AM.png" target="_blank">Click to enlarge</a></p>
<p><img src="https://www.urban.com.au/images/2017/05/15/Screen%20Shot%202017-05-16%20at%208.41.36%20AM.png" alt=""></p>
<p>More recent data from weekly auction activity suggests housing market conditions steadied a touch in Apr-May after cooling off earlier in the year from a very strong finish to 2016. Auction volumes remain high although turnover via other channels looks to be very weak. Note that these measures only provide meaningful gauges for the Sydney and Melbourne markets.</p>
<p>Looking ahead, the exact impact of new regulatory guidelines is unclear. The specific limit for investor credit growth was unchanged at 10 percent although lenders were instructed to keep growth 'comfortably below' the target. The main new measure was a 30 percent limit on the 'interest only' share of new loans (currently running at 38  percent overall and 65 percent of investor loans), particularly those with high LVRs.</p>
<p><a href="https://www.propertyobserver.com.au/images/2017/05/15/Screen%20Shot%202017-05-16%20at%208.42.29%20AM.png" target="_blank">Click to enlarge</a></p>
<p><img src="https://www.urban.com.au/images/2017/05/15/Screen%20Shot%202017-05-16%20at%208.42.29%20AM.png" alt=""></p>
<p>Lenders have responded with increased rates on both investor and owner occupier loans with larger increases for 'interest only' products (+30bps on average for investor loans, +15bps for owner occupier loans). It remains to be seen how borrowers react but the mix suggests both owner occupier and investor finance approvals will be impacted, perhaps with some 'product switching' refinance flows in the mix as well. </p>
<p class="p1"><span class="s1"><em>Matthew Hassan is senior economist with </em><a href="https://www.westpac.com.au/"><span class="s2"><em>Westpac</em></span></a><em>.</em></span></p>
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Matthew_Hassan-HHWHptmrw4

Approvals for owner occupier loans dip: Matthew Hassan

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<p>Owner occupier finance approvals came in better than expected for September, with the detail a little softer but separate figures on the value of investor finance loans on the strong side.</p>
<p>The number of owner occupier approvals rose 1.6%, well above the market expectations of a 1.6% fall. Industry data on bank loans had been soft in the month.</p>
<p>The gain was led by strong refi activity – ex refi loans were up just 0.5% and down in value terms (–0.8%mth) implying average loan size was quite a bit smaller.</p>
<p>Other detail showed a flat month for construction-related lending.</p>
<p>By state, there were solid gains for total owner occupier loans in NSW, Vic, Qld and SA with a decline in WA.</p>
<p>The 4.6% rise in the value of loans to investors is notable as it means the total value of housing finance loans is up in the month with a clear firming since the recent low in April – that in turn suggests other data pointing to a firming in housing market conditions is genuine and that the bulk of the lift is coming from domestic investor activity.<br><span><br>Details</span> </p>
<p><br>Owner–occupiers (no.)   1.6% mth, –3.7%yr   <br><span>– ex-financing (no.)       0.5% mth, –7.8%yr        </span><span>              </span></p>
<p>Construction of dwellings (no.)      –0.8% mth, –5.2%yr      <br><span>Purchase of newly built dwellings (no.)   5.9%mth, 5.7%yr          </span><span>                  </span></p>
<p>Value of loans:             </p>
<p>Owner-occupiers ($bn)   0.9%mth, –5.4%yr    <br><span>Investors ($bn)      4.6% mth, 9.6%yr          <br></span><span>Total ($bn)              2.3% mth, –0.2%yr        <br></span><span>Total ex refi ($bn)   1.8% mth, –1%yr      </span></p>
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j.ballantyne1990-6AQqhLzZaK

Owner occupier finance approvals better than expected in September: Westpac's Matthew Hassan

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<div class="section">Australian housing finance approvals were materially weaker than expected in July with much of the detail also on the weak side, investor loans about the only exception.</div>
<div class="section"> </div>
<div class="section">The total number of owner occupier loans fell 4.2 percent, well below the consensus forecast for a 1.5 percent decline.</div>
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<div class="section"><a href="/images/2016/09/12/Screen%20Shot%202016-09-12%20at%208.19.29%20AM.png" target="_blank">Click to enlarge</a></div>
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<p><span>Ex refinance the picture was even weaker with a 6.1 percent fall, the largest monthly decline since May last year.</span></p>
<p><a href="/images/2016/09/12/Screen%20Shot%202016-09-12%20at%208.21.26%20AM.png" target="_blank"><span>Click to enlarge</span></a></p>
<p><span><img src="/images/2016/09/12/Screen%20Shot%202016-09-12%20at%208.21.26%20AM.png" alt=""></span></p>
<p> </p>
<p><span>Approvals can be choppy month to month but moves tend to be in the ±3 percent range. </span></p>
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<p><span>Our estimates (using ABS seasonal factors) suggest seasonally adjusted owner occupier approvals ex refi were down 3-4 percent in NSW, Vic and Qld with, somewhat surprisingly, WA the only state to record a rise (+2.7 percent/mth). </span></p>
<p><a href="/images/2016/09/12/Screen%20Shot%202016-09-12%20at%208.22.28%20AM.png" target="_blank"><span>Click to enlarge</span></a></p>
<p><span><img src="/images/2016/09/12/Screen%20Shot%202016-09-12%20at%208.22.28%20AM.png" alt=""></span></p>
<p><span>Note that the sum of these estimates across the big five states is firmer than the published national number (down about 2 percent rather than 6 percent). </span></p>
<p><span>The value of housing finance approvals to investors rose 0.5 percent, building on a 3.3 percent gain in June to be up 9.2 percent since April. </span></p>
<p><span>The sharp slowdown associated with the tightening in lending criteria and increases in borrowing rates for investor loans late last year has now clearly run its course. </span></p>
<p><span>With loan 'supply' now, arguably, less constrained (particularly given that investor credit growth is tracking at 4.5 percent/yr, well below the regulator's 10 percent ceiling) and some of the uncertainty around potential tax changes easing activity looks to be firming again.</span></p>
<p><a href="/images/2016/09/12/Screen%20Shot%202016-09-12%20at%208.23.32%20AM.png" target="_blank"><span>Click to enlarge</span></a></p>
<p><span><img src="/images/2016/09/12/Screen%20Shot%202016-09-12%20at%208.23.32%20AM.png" alt=""></span></p>
<p> </p>
<p><span>For the total value of housing finance approvals, the rise in investor loans partially offset the weakness in owner occupiers with the total value ex refi down a milder 2.2 percent/mth. The total value of approvals ex refi is down on a year ago, mainly reflecting last year's pull back in investor loans. </span></p>
<p><span>The July fall in owner occupier approvals is a little puzzling given the May interest rate cut and a range of other indicators suggesting both buyer sentiment and market conditions have firmed somewhat in recent months. </span></p>
<p><span>It may reflect the tail end of earlier weakness (finance approvals tend to respond to rate moves and sentiment shifts with a 2-3mth lag). There may also be some statistical 'noise' in the monthly data.</span></p>
<p><a href="/images/2016/09/12/Screen%20Shot%202016-09-12%20at%208.24.38%20AM.png" target="_blank"><span>Click to enlarge</span></a></p>
<p><span><img src="/images/2016/09/12/Screen%20Shot%202016-09-12%20at%208.24.38%20AM.png" alt=""></span></p>
<p> </p>
<p><span>Overall, given the better reads coming from other market indicators and the divergence between investor and owner occupier loans we would tend to take the July finance approvals figure with a grain of salt and look to coming months to confirm whether a new weakening is coming through. </span></p>
<p><span><em><span>Matthew Hassan</span> is senior economist with <a href="https://www.westpac.com.au/" target="_blank">Westpac</a>.</em></span></p>
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jchancellor-FAypfDUnLy

July fall in owner occupier approvals is a little puzzling: Westpac's Matthew Hassan

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<p>While home value rises have been moderate over recent years outside of Sydney and Melbourne, it provides little comfort for first home buyers in the two largest cities who struggle to compete with those that already own homes.</p>
<div>
<p>In 2008, combined capital city home values fell by -6.1 percent in the space of 9 months. By the end of the year, home values had reached and began to climb thereafter.</p>
<p>The drivers of this growth was largely two forms of stimulus: aggressive interest rate cuts and a boost to the First Home Owners Grant (FHOG). Since the boost to the FHOG was removed and many of the existing grants were removed or scaled back, first home buyers have continued to languish at near record low levels. The harsh reality is that first home buyers are struggling to compete with those who already own a home or who are investing.</p>
<p>The first chart highlights the increase in home values across each capital city from December 2008 to April 2016. Another way to think about this is that if in December 2008 you owned a home worth $500,000 it is now worth $758,418 which is $258,418 more than in December 2008. Looking at this same calculation across each capital city, the increases in value over that time based on a $500,000 home owned in December 2008 are: Sydney ($400,825), Melbourne ($338,866), Brisbane ($73,417), Adelaide ($81,029), Perth ($64,096), Hobart ($11,263), Darwin ($109,293) and Canberra ($126,262).</p>
<h3>Cumulative change in home values<br>December 2008 to April 2016</h3>
<p><a href="/images/2016/05/30/2016-05-30---img1.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/05/30/2016-05-30---img1.jpg" alt=""></p>
<p>While the value of a home owner’s property has undergone massive rises, the increase in inflation and wages has been comparatively more sedate.</p>
<h3>Cumulative change in CPI (inflation) <br>December 2008 to March 2016</h3>
<p><a href="/images/2016/05/30/2016-05-30---img2.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/05/30/2016-05-30---img2.jpg" alt=""></p>
<p>Although combined capital city home values have increased by 51.7 percent between December 2008 and April 2016, inflation has increased by a significantly lower 17.1 percent over the period. CPI has increased by a greater amount than values in Brisbane, Adelaide, Perth and Hobart indicating ‘real’ home values have fallen. Meanwhile in Sydney, Melbourne, Darwin and Canberra CPI growth has lagged that of home value growth.</p>
<p>Looking at wages growth between December 2008 and March 2016, it shows that nationally and in New South Wales, Victoria and the ACT it has lagged value growth across the capital cities. It should be noted that wages are now growing at the slowest pace in at least 18 years and that the increases highlighted do include strong wage increases in the latter part of the mining boom. Nonetheless, the data highlights that in NSW and Vic wages are increasing at a much slower pace than home values in Sydney and Melbourne are.</p>
<h3>Cumulative change in Wage Price Index<br>December 2008 to March 2016</h3>
<p><a href="/images/2016/05/30/2016-05-30---img3.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/05/30/2016-05-30---img3.jpg" alt=""></p>
<p>The final chart shows the change in the value of new lending (excluding refinances) to investors, owner occupier first home buyers and subsequent buyers between December 2008 and March 2016. The chart highlights how the value of lending to owner occupier first home buyers is now lower than it was in December 2008 across each state and territory. This has occurred despite the increase in home values over the timeframe. While lending to owner occupier first home buyers has fallen, lending to investors and subsequent buyers has increased in most states and territories with substantial rises in NSW and Vic.</p>
<h3>Change in the value of new lending to investors, FHB and subsequent buyers<br>December 2008 vs. March 2016</h3>
<p><a href="/images/2016/05/30/2016-05-30---img4.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/05/30/2016-05-30---img4.jpg" alt=""></p>
<p>While outside of Sydney and Melbourne home values have increased below or at a similar pace to inflation and wages, it is a very different story in the two largest capital cities. Existing owners of homes in Sydney and Melbourne have seen a significant increase in the ‘real’ value of their home. Subsequently those that do not yet own struggle to compete with investors and upgraders that have been so active in the market and already have significant equity.</p>
<p>The simple answer to this problem is that first home buyers in Sydney and Melbourne should look to buy properties outside of these cities however, that may be a little simplistic. Job creation has not been as strong outside of Sydney and Melbourne and for many moving interstate, employment opportunities are generally a big decision. Even buying outside of Sydney in nearby regional cities may not be attractive because transport infrastructure does not provide quick and efficient access to Sydney and Melbourne from nearby regional cities.</p>
<p>We certainly don’t advocate for the return of grants for first home buyers as they have tended to just push up the cost of housing. Prospective first home buyers are facing some tough choices as they compete with other segments of the market who may have larger budgets or a great deal of equity behind them thanks to a history of strong capital gains. Remaining (or joining) the rental market is one option that many may choose, considering weekly rents are down 0.2 percent across the combined capitals.</p>
<p>Those choosing to rent may decide to make their first home purchase an investment property in a location that is more affordable and better suits their budget. For those first home buyers looking to buy their first home to live in, their options will often be limited to the city outskirts if they are to purchase a detached dwelling, or compromising on space to live closer to where they work and play by choosing a higher density option.</p>
<p><em>Cameron Kusher is research analyst for CoreLogic RP Data. You can contact him <a href="https://blog.corelogic.com.au/about/">here</a>.</em></p>
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ckusher-ujnxiKuFQs

Investors, owner occupiers making things tough for first home buyers: CoreLogic RP Data's Cameron Kusher

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<p>The Reserve Bank of Australia released its Financial Aggregates data for January 2016, which showed credit growth of +6.5 percent in the year to January 2016, a steady increase on the +6.1 percent recorded for the year to January 2015.</p>
<p><a href="/images/2016/03/RBA2.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/03/RBA2.jpg" alt=""></p>
<div>Total annual housing credit growth has slowed a bit from its recent peak of +7.47 per cent in November 2015 to +7.33 per cent in January 2016, reflecting in part the shift in composition of lending from investors to owner-occupiers. </div>
<div> </div>
<div>Investor credit growth is now well below APRA's arbitrary +10 per cent threshold at just +7.9 per cent and consistently slowing from +11 per cent in June, meaning that theoretically major banks could in due course start to ramp up lending into this sector should they feel the urge to do so. </div>
<div> </div>
<div>Of course, any such move would be dependent upon a range of regulatory factors, and whether APRA has the appetite to loosen its throttle.<br><br>Meanwhile owner-occupier annual credit growth recorded another significant jump in surging to a 64 month high of +6.95 per cent, with homebuyers looking to take advantage of attractive mortgage rates.</div>
<div> </div>
<div><a href="/images/2016/03/RBA1.jpg" target="_blank">Click to enlarge</a></div>
<div><img src="/images/2016/03/RBA1.jpg" alt=""></div>
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<div><span>Deposit growth seems to present few headaches for banks right now. While term deposits have been understandably less popular in the prevailing low interest rate environment, total deposits with banks have expanded in a robust manner over the year to January. </span></div>
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<div><a href="/images/2016/03/RBA3.jpg" target="_blank"><span>Click to enlarge</span></a></div>
<div><span><img src="/images/2016/03/RBA3.jpg" alt=""></span></div>
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<div><strong><span style="text-decoration: underline;">Business credit</span></strong></div>
<div> </div>
<div>Business credit grew by +6.2 per cent in the year to January 2016, up from +5.5 per cent in the year to January 2015. It is as yet unclear whether this is the end of the uptrend for business lending growth, or a blip in the upwards trajectory. </div>
<div> </div>
<div><a href="/images/2016/03/RBA4.jpg" target="_blank">Click to enlarge</a></div>
<div><img src="/images/2016/03/RBA4.jpg" alt=""></div>
<div> </div>
<div>
<strong><span style="text-decoration: underline;">Housing credit</span></strong><br><br><span>The chart below shows how lenders in the housing market have conveniently managed to shift almost seamlessly away from investment lending to owner-occupier credit, with a bit of reclassification jiggery-pokery along the way.</span><br><br><span>In fact, the data submitted by lenders makes it look as though the chart has been drawn up on an Etch-A-Sketch.</span>
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<div><a href="/images/2016/03/RBA5.jpg" target="_blank"><span>Click to enlarge</span></a></div>
<div><span><img src="/images/2016/03/RBA5.jpg" alt=""></span></div>
<div> </div>
<div> </div>
<div>
<div>Total housing credit continued to push beyond $1.53 trillion, growing at an annual pace of +7.33 per cent, although naturally there are marked differences between the states and capital cities, with some faring much better than others.<br><br>There have been a few pro-equities articles today discussing "plummeting" lending and investors "leaving the market in droves".<br><br>That's interesting, but it's not what I'm seeing. Don't forget that housing credit expanding at a pace of +7 per cent implies a doubling in outstanding credit over a decade.<br><br>It's all in the marketing, I guess.</div>
<div> </div>
<div><a href="/images/2016/03/RBA6.jpg" target="_blank">Click to enlarge</a></div>
<div><img src="/images/2016/03/RBA6.jpg" alt=""></div>
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<div>
<div><strong><span style="text-decoration: underline;">The wrap</span></strong></div>
<div> </div>
<div>Credit growth was fairly steady in January, with owner-occupiers continuing to pick up the baton from investors within the housing sector.</div>
<div> </div>
<div>A key question going forward will be whether having managed to push investor credit growth below its preferred +10 per cent threshold APRA releases its grip on investor lending at all. </div>
<div> </div>
<div>As APRA's data last week showed, the overwhelming majority of property buyers these days have substantial deposits, the question is whether tougher criteria are to be maintained surrounding mortgage serviceability. </div>
<div> </div>
<div>Another key factor could be movements in the cash rate, with interest rate cuts potentially set to stimulate demand for mortgage borrowing further, although it appears likely that lenders would hold back 10bps to15bps of a prospective 25bps interest rate cut.</div>
<div> </div>
<div>Adding to the parts of GDP we already know such as net exports, the Business Indicators released by the ABS this morning including inventories (-0.4), wages (+0.5), and company profits (-2.8), each suggested that headline GDP growth for the fourth quarter of 2015 is likely to be weak. </div>
<div> </div>
<div>These GDP partials may prove to be another tack in the coffin for the next movement in interest rates being down. </div>
<div> </div>
<div>
<p><span><em>PETE WARGENT is the co-founder of <a href="https://allenwargent.com/" target="_blank" rel="nofollow">AllenWargent</a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank" rel="nofollow">blogger</a>.</em><br></span></p>
<p><em>His latest book is <a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx" target="_blank" rel="nofollow">Four Green Houses and a Red Hotel</a>.</em></p>
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pwargent-M4siyDbqQY

Owner-occupiers lead housing lending: Pete Wargent

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<p><span style="line-height: 1.3em;">In the December quarter, the gap between rates for investors and owner occupier borrowers widened, with investors now paying 0.21 per cent more on average, RateCity report.</span></p>
<p><span>Despite higher rates for some investors, overall mortgage rates fell for both variable and fixed, with the largest cuts applied to the 3-year fixed rates.</span></p>
<p><span>"Interestingly, fixed rates – including 5-year terms – are more competitive than variable rates on average and the gap is widening, making fixed rates an appealing option for some people now," RateCity money commentator Sally Tindall noted.</span></p>
<p><span>"However, competition in the variable space is driving sharper deals than fixed.</span></p>
<p><span>"For example, variable rates are sitting as low as 3.69 per cent, while one of the lowest 5 year fixed rates is 4.39 per cent," she said.</span></p>
<p><span>She noted home loan rates have gone both up and down in the space of three months.</span></p>
<p><span>The major banks all chose to hike rates by an average of 0.18 percentage points on the back of APRA’s requirement that they hold more capital while competition at the bottom of the market sharpened with around 25 lenders choosing to cut their lowest variable rates to as little as 3.65 per cent. </span><span style="line-height: 1.3em;"> </span></p>
<p><span>"Unsurprisingly, existing mortgage holders primarily missed out on this news as the majority of these cuts were for new customers only.</span></p>
<p><span>"The most dramatic change occurred in investor borrowing where there was a $2.1 billion drop in lending figures in just four months.</span></p>
<p><span>"The falls came on the back of the introduction of higher home loan rates for investors of up to 1.44 percentage points, with around half of the market adopting this two-tiered pricing structure. </span></p>
<p><span>"We expect lenders will continue to tweak their home loan products in the year ahead in an attempt to reduce risk and control investor growth including a continued tightening of LVR requirements."</span></p>
<p class="x_MsoNormal"><a href="/images/2016/01/22/Screen%20Shot%202016-01-22%20at%208.55.44%20AM.png" target="_blank"><span style="font-size: 12.16px; line-height: 1.3em;">Click to enlarge</span></a></p>
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Gap between rates for investors and owner occupiers widening: RateCity

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<p>Owner occupiers are expected to return to the market in force as their choices widen and the outlook for interest rates remains positive, according to a report by the the Urban Development Institute of Australia (Queensland) Research Foundation.</p>
<p><span>The third Industry Insights Report talks about the trends in land, house and apartment sales, supply and prices across Queensland.</span></p>
<p><span>It reveals a marked shift in the residential property market in 2015, with the focus shifting from regional Queensland to the South East. </span></p>
<p><span>Prepared by The National Property Research Company (NPR Co), the report gathers market intelligence from industry players – real estate agents and developers across 15 regional areas.</span></p>
<p><span>South East Queensland hotspots include Brisbane, Gold Coast, Ipswich, Logan and Moreton Bay, all showing price growth in land and house sales volume. Medium to high density median prices – houses and apartments – remained fairly static, with growing sales volume, this is a reflection of the strong supply into the market in this category.</span></p>
<p><span>The report also reveals:</span></p>
<p><span>• In Brisbane, almost all respondents reported a rising market across all forms of housing over the last six months, with the majority view that we were yet to see the top of the cycle for apartments. Interest rates and population growth were cited as the most positive market influences.</span></p>
<p><span>• The outlook for the Sunshine Coast is positive. Whilst median price rises were slight across the board, the hospital nearing completion, investigation into improved transport infrastructure, economic diversification and improving domestic tourism figures buoyed the market.</span></p>
<p><span>• In Ipswich, the market is steadily rising, although there was concern about the negative impacts of low employment growth and infrastructure investment that may limit growth. Two thirds of respondents reported healthy levels of demand from international buyers.</span></p>
<p><span>• Logan, Gladstone and Toowoomba led the state for land, with modest growth in land volume sales. Whilst Gladstone is coming off a low base, the outlook is more positive into 2016. Toowoomba is riding the wave of infrastructure projects, and there was strong agreement that demand had increased across the board for all forms of housing. Logan has reaped the benefits of two major masterplanned communities and may well prove to be Brisbane’s newest and most dynamic corridor.</span></p>
<p><span> • Population growth in the Fraser Coast, Mackay and Gladstone has challenged recovery in these LGAs. Mackay and Gladstone continue to experience oversupply, but are optimistic for improved conditions and see the affordability as the silver lining for buyers over the next 12 months.</span></p>
<p><span>• In Bundaberg, it was the opinion of respondents that positive growth in the market will be driven by low interest rates and affordability.</span></p>
<p><span>• Whilst sales volumes in Cairns cooled since the last report, median prices rose across the board, and the industry eagerly awaits the commencement and/or confirmation of major infrastructure projects.</span></p>
<p><span>• The outlook for the Gold Coast is very positive with a large majority of respondents confident about a continued rising market, particular for houses, and very healthy overseas demand from both investors and owner occupiers.</span></p>
<p><span>UDIA (Qld) president Brett Gillan said Queensland’s new property market contributed to economic growth and jobs in Queensland in the first half of 2015, noting the buoyancy of the South East Queensland market.</span></p>
<p><span>“We are seeing the return of owner occupiers to the market, and they are looking for diversity and fresh choices in housing types and locations. Our challenge is to respond to this demand, and meet their lifestyle aspirations at an affordable price,” he said.</span></p>
<p><span>“We are very aware of the challenges that regional communities outside of South East Queensland continue to face and we have been working closely with our industry, local councils and the state government in 2015, to assist with the creation of local planning schemes that have the best interests of the communities’ future at heart.”</span></p>
<p><span>Industry Insights researcher, NPR Co managing director Matthew Gross, said that the research throws the spotlight on the factors behind the vastly variable market conditions being experienced across Queensland.</span></p>
<p><span>“The report suggests that confidence and certainty, interstate capital inflows and a resurgence in the stock market are issues to watch in 2016,” he said.</span></p>
<p><span>CSQ CEO Brett Schimming said the UDIA (Qld) Research Foundation, that has just celebrated its first anniversary, has filled a gap in industry knowledge that CSQ is proud to have been able to facilitate.</span></p>
<p><span>“The housing and construction industry is one of the most important economic drivers and this research helps to keep industry informed. The more we know the better we can plan housing developments and ensure we have the right skills and training in place to meet future needs,” he said.</span></p>
<p><span>The Foundation’s research programme is driven by the Industry Leaders’ Research Group representing Stockland, Amex Corp, Lend Lease, Frasers Property, Investa, Peet, Pradella Property Ventures, Excel Development Group, Defence Housing Australia, Pointcorp, AV Jennings, Wentworth Equities, McNab, PLACE Design Group and Village Retirement Group.</span></p>
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2016 marks the return of Queensland's owner occupier market: UDIA

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<p><span>On the last day of the month the Reserve Bank released its </span>Financial Aggregates <span>data for the month of August 2015, which showed another solid month for both housing credit growth (+0.6%) and business credit growth (+0.5%).</span></p>
<p><a href="/images/2015/10/01/RBA1.jpg" target="_blank"><span>Click to enlarge</span></a></p>
<p><span><img src="/images/2015/10/01/RBA1.jpg" alt=""></span></p>
<p> </p>
<div>Over the year housing (+7.5 per cent) and business (+5.3 per cent) credit has helped to take total private sector credit growth to its highest level since 2008 at +6.3 per cent.</div>
<p><strong><span style="text-decoration: underline;">Business credit grows</span></strong></p>
<div>Total business credit outstanding ticked up to above $800 billion, having recovered steadily since the financial crisis.</div>
<div> </div>
<div><a href="/images/2015/10/01/RBA2.jpg" target="_blank">Click to enlarge</a></div>
<div><img src="/images/2015/10/01/RBA2.jpg" alt=""></div>
<div> </div>
<div><span>Annual credit growth for the business sector increased at its strongest annual pace since February 2009, with Westpac forecasting further moderate gains in the months ahead.</span></div>
<div><span> </span></div>
<div><a href="/images/2015/10/01/RBA3.jpg" target="_blank"><span>Click to enlarge</span></a></div>
<div><span><img src="/images/2015/10/01/RBA3.jpg" alt=""></span></div>
<div> </div>
<div> </div>
<div>
<strong><span style="text-decoration: underline;">Investor loans slowed</span></strong><br><br><div>There has evidently been a little innocent jiggery-pokery by Australia's major lenders when it comes to the splitting of investor and owner-occupier credit.</div>
<br><div>As you can see in the chart below, last month it transpired that tens of billions of dollars of credit had been misreported as owner-occupier credit, when in fact in related to investment housing.<br><br>The direction of the misstatement can hardly come as a shock.</div>
<div> </div>
<div>As a result the share of outstanding credit for investment housing is materially higher than previously had been thought (or at least, reported - I expect few market participants would be surprised).</div>
<div> </div>
<div>That said, the slow drip of measures taken to douse investor credit first became a trickle and now it is a flow, and it appears that APRA's intervention has now taken the sting right out of the investment lending sector, with some lenders having put the kibosh on new investment loans altogether.<br><br>You can see the impact of the restatement and then APRA's macroprudential measures in the red line below, with the total stock of outstanding credit not rising on a seasonally adjusted basis this month for the first time since 2011.</div>
<div> </div>
<div><a href="/images/2015/10/01/RBA4.jpg" target="_blank">Click to enlarge</a></div>
<div><img src="/images/2015/10/01/RBA4.jpg" alt=""></div>
<div> </div>
<div>
<div>Overall this is a healthy move for the market, which was at risk of becoming too "top heavy" with investors.<br><br>Although there is no oversupply of dwellings in aggregate, there clearly were too many investors piling into the market which had helped to slow rental growth to a 20 year low.<br><br><strong><span style="text-decoration: underline;">The return of owner-occupiers</span></strong>
</div>
<div> </div>
<div>However, it is too simplistic to say that the slowdown in investor lending will automatically put dwelling price growth into reverse gear.</div>
<div> </div>
<div>If there is one thing we know about banks in this country it is that they will look to lend against housing where possible, and as such we can expect lenders to push owner-occupier loans ever harder, using enticing mortgage rates of around 4 per cent to in order to expand home loan books.<br><br>The Reserve Bank Governor himself has predicted that more folk will opt to place themselves as "owner-occupiers" in due course. </div>
<br><div>Indeed, while investor credit is now almost certain to fall below APRA's advisory +10 per cent growth threshold over the next few months, owner-occupier credit has already been picking up the slack in rising by rising by +0.6 per cent in August.</div>
<div> </div>
<div>There has been a clear pick-up in the pace of owner-occupier credit growth over the past three months, and annualised home lending growth to owner-occupiers has increased to 43 month high at +5.6 per cent.</div>
<div>
<br>In turn this has helped total home lending credit growth rise to +7.5 per cent, which is now a 59 month high.</div>
<p><a href="/images/2015/10/01/RBA5.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2015/10/01/RBA5.jpg" alt=""></p>
<div><strong><span style="text-decoration: underline;">Investor share of credit falls</span></strong></div>
<div> </div>
<div>The restatement of the categorisation of investor loans saw the total share of investor credit blow out to an unprecedented 38.6 per cent last month.</div>
<div>However, with APRA's cooling measures now taking effect the investor share ticked downwards in August for the first time in 30 months, more evidence that the regulatory intervention will have a material impact on the investor sector.</div>
<p><a href="/images/2015/10/01/RBA6.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2015/10/01/RBA6.jpg" alt=""></p>
<p><strong><span style="text-decoration: underline;">The wrap</span></strong></p>
<div> </div>
<div>Overall it was another month of strengthening housing credit, with owner-occupiers increasingly willing to take advantage of record low borrowing rates. </div>
<div> </div>
<div>Investor credit growth looks set to fall back to an annual growth rate of below 10 per cent, but in total housing credit is still picking up its pace to multi-year highs.</div>
<div> </div>
<div>---</div>
<div> </div>
<div>August was a quieter month for initial capital raised on the Australian Securities Exchange, although there was a strong volume of secondary cap raisings.<br><br>Total capital raised on a rolling annual basis has increased to its highest level since the great flood of recapitalisation over the year to May 2010.</div>
<div> </div>
<div><a href="/images/2015/10/01/ASX-1.jpg" target="_blank">Click to enlarge</a></div>
<div><img src="/images/2015/10/01/ASX-1.jpg" alt=""></div>
<div> </div>
<div>
<p><span><em>PETE WARGENT is the co-founder of <a href="https://allenwargent.com/" target="_blank" rel="nofollow">AllenWargent</a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank" rel="nofollow">blogger</a>.</em><br></span></p>
<p><em>His latest book is <a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx" target="_blank" rel="nofollow">Four Green Houses and a Red Hotel</a>.</em></p>
</div>
</div>
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Owner-occupiers pick up housing market baton: Pete Wargent

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<p><span>The Australian Bureau of Statistics (ABS) released housing finance data for July 2015 earlier this week.</span></p>
<p><span>Throughout July, there was $32.8 billion worth of housing finance commitments. This figure was comprised of $19.2 billion worth of commitments to owner occupiers and $13.6 billion in commitments to investors. Over the month, the total value of housing finance commitments increased by 1.5% to be 15.0% higher year-on-year.</span></p>
<p><a href="/images/2015/09/10/Chart-11.jpg" target="_blank"><span>Click to enlarge</span></a></p>
<p><span><img src="/images/2015/09/10/Chart-11.jpg" alt=""> </span></p>
<p><span><span>At $19.2 billion, owner occupier housing finance commitments increased by 2.2% over the month and were 13.9% higher year-on-year. Breaking the $19.2 billion into its components: $1.6 billion was for construction of dwellings, $1.1 billion was for the purchase of new dwellings, $6.2 billion was for refinances of established dwellings and $10.2 billion was for the purchase of established dwellings. Over the month, commitments for the construction of dwellings fell -1.5%, purchase of new dwellings rose 8.4%, refinances rose 3.3% and purchase of established dwellings rose 1.5%.  </span></span></p>
<p><span><span>Over the past 12 months the refinance segment has been the key driver of growth in the owner occupier lending segment with commitments up 23.7%. In comparison, year-on-year changes have been recorded at -7.6% for construction of dwellings, 15.4% for purchase of new dwellings and 12.6% for purchase of established dwellings. Recently growth in the owner occupier lending segment has been lacklustre, driven largely by refinances however, the 13.9% year-on-year rise in owner occupier housing finance commitments excluding refinances is the largest rise since February 2014.</span></span></p>
<p> </p>
<p><a href="/images/2015/09/10/Chart-21.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2015/09/10/Chart-21.jpg" alt=""></p>
<p>Turning to the investment segment of housing finance commitments, this has over recent years been a significant driver of new demand. In July 2015, investor housing finance commitments rose by 0.5% to be 16.5% higher year-on-year. If we look at the $13.6 billion in investment housing commitments across its components, $1.1 billion was for construction of new investment dwellings and $12.5 billion was for established homes. </p>
<p>Over the month, commitments for new construction rose 11.7% compared to a -0.4% fall in commitments for established homes. Year-on-year investor commitments for construction of new dwellings has increased by 81.5% compared to a 12.9% rise in the much larger segment for purchase of established investment homes.  The chart above shows the recent weakness in commitments for established homes and the ongoing rise in commitments for new construction.</p>
<p>It seems that there is a growing appetite for investment in off-the plan investment properties while demand for established investment stock is waning a little.  Despite the monthly rise in demand for investment lending, the rate of growth has started to ease as Australian authorised deposit-taking institutions (ADIs) tweak their lending policies in line with policy updates from APRA aimed at slowing growth in the pace of total investor housing credit.</p>
<p>Housing credit data for July 2015 showed that growth in owner occupier credit is ramping up while investor credit demand is potentially slowing. This release of housing finance data appears to support that notion. The ADIs will be hoping that they can entice additional activity from the owner occupier segment over the coming months as there is likely to be a slowdown in lending to the investment segment.</p>
<p>Housing finance data is continuing to rise however, it appears that growth is starting to tilt away from investors towards the owner occupier segment. Although regulators such as the Reserve Bank and APRA will be glad to see that exuberance from investment borrowers may be slowing, they will be very keen to monitor and ensure that any pick-up from owner occupier borrowers is not as a result of a relaxing of lending standards.</p>
<p>Both the housing credit and housing finance data will be closely monitored over the coming months in order to see if this transition continues. Specifically we will be watching whether housing credit can continue to increase its rate of growth and if new commitments continue to tilt away from investors towards owner occupiers and what impact that may have on housing finance demand.</p>
<p><em>Cameron Kusher is research analyst for CoreLogic RP Data. You can contact him <a href="https://blog.corelogic.com.au/author/cameron-kusher/" target="_blank">here</a>.</em></p>
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