<p><a href="https://www.apartments.com.au/developers/far-east-consortium">Far East Consortium</a> is preparing to commence construction on <a href="https://www.apartments.com.au/new-apartments/640-bourke-street-melbourne-640-bourke-street-melbourne-vic-3000">640 Bourke Street</a> this October, marking the next milestone for the Melbourne CBD development and its higher-end Eliza Collection.</p>

<p>Spanning levels 44 to 68 of the 68-storey <a href="https://www.apartments.com.au/architects/rothelowman">Rothelowman</a>-designed tower, the Eliza Collection has been conceived as a lower-density offering within the broader development, with only five apartments on each floor, dedicated lift access and a collection of resident spaces reserved exclusively for Eliza Collection residents.</p>

<p>The Eliza Collection forms part of Far East Consortium's broader move toward larger-format residences at 640 Bourke Street, where the number of apartments was reduced from earlier plans as apartment sizes increased.</p>

<p>[smartcode_project:default project_id=509 project_image_fid=365685]</p>

<p>"What it's meant for 640 Bourke is we've actually reduced the number of apartments. We've increased the overall size of the apartments. We don't have any studios in here, and what that does for a project is it elevates it," Far East Consortium Director of Sales and Marketing Lauren Sheldon said.</p>

<p>Rothelowman Associate Jun Chang said the design process provided an opportunity to create more generous floorplans.</p>

<p>"We were given the opportunity to be more generous. The apartments became bigger and squarer than any other apartments which had been designed in the CBD before that."</p>

<p>[smartcode_project:default project_id=509 project_image_fid=368869]</p>

<p>That thinking carries through to the Eliza Collection, where the residences have been designed around the space and functionality associated with a larger home, but positioned high above the centre of Melbourne.</p>

<p>Kitchens are equipped with Gaggenau appliances, a butler's pantry, temperature-controlled wine cabinet and sculptural pendant lighting, while engineered timber flooring, stone and porcelain finishes and custom cabinetry feature throughout the broader interiors.</p>

<p>Privacy and security are another point of distinction. Eliza Collection residents have dedicated lift access, while 640 Bourke Street will provide concierge services and secure resident parking. Short-stay accommodation, including Airbnb, will not be permitted within the development.</p>

<p>[smartcode_project:default project_id=509 project_image_fid=365689]</p>

<p>Eliza Collection residents will also have exclusive access to selected amenity spaces across levels one and three of the restored Eliza Tinsley building. These include the Salon with grand piano, an art therapy room, private dining rooms and treatment rooms.</p>

<p>They sit within more than 3,000 sqm of amenity planned across 640 Bourke Street, alongside facilities including a pool, gym, whisky lounge and further social and wellness spaces.</p>

<p>The Eliza Tinsley building itself is central to the wider project's identity. Rather than treating the existing Eliza Tinsley façade as a separate element, Rothelowman used it as a starting point for the architecture of the new tower, with the historic building to accommodate the project's gallery and lobby.</p>

<p>"It's a significant asset and wants to be celebrated and experienced by all residents every single time they go in and out of the building," Rothelowman Principal Stuart Marsland said.</p>

<p>[smartcode_project:default project_id=509 project_image_fid=368872]</p>

<p>The tower will rise behind the retained heritage building at 640 Bourke Street, placing residents within walking distance of Southern Cross Station, Flagstaff Gardens, Queen Victoria Market and the Docklands waterfront.</p>

<p>With construction scheduled to begin in October, Far East Consortium has established an onsite display gallery at 640 Bourke Street, including fully built apartments that allow the project's layouts, materials and finishes to be inspected at full scale.</p>

<p>A fully built Eliza Collection apartment is also available to view at the display suite by appointment ahead of the planned October construction commencement.</p>

<p>Eligible purchasers who buy before construction commences can secure the full available off-the-plan stamp duty savings, subject to eligibility and applicable conditions.</p>

<p>[smartcode_project_cta:default project_id=509]</p>


Joel Robinson

Far East Consortium brings Eliza Collection to 640 Bourke Street ahead of October construction start

<p>By the time S&amp;S Projects began planning <a href="https://www.apartments.com.au/new-apartments/radia-rainbow-bay-271-boundary-street-coolangatta-qld-4225">Radia</a>, the developer already had three Rainbow Bay projects from which to draw.</p>

<p>Flow, Awaken and Esprit had given <a href="https://www.apartments.com.au/developers/ss-projects">S&amp;S Projects</a> experience developing in the southern Gold Coast enclave, as well as buyer feedback that could be carried into its fourth project, a boutique collection of 38 residences at 271 Boundary Street.</p>

<p>“We have experienced a lot of success in this location and as this was our fourth building we had taken all of the learnings and buyer feedback from previous projects to arrive at a design and apartment mix that we believe had captured all of that experience and remained a true S&amp;S Project in its design and amenity,” the developer said.</p>

<p>That experience has translated into a collection of two, three, four and five-bedroom residences including two penthouses positioned on an elevated corner in Rainbow Bay, where the site opens to multiple coastal view corridors and the area's distinctive north-facing bay.</p>

<p>[smartcode_project:default project_id=140491 project_image_fid=284542]</p>

<p>S&amp;S Projects says the Boundary Street site took years to assemble, having previously comprised six units, a house and a duplex. The developer worked individually with the existing owners to bring the properties together after an earlier attempt to sell the site had been complicated by the number of parties involved.</p>

<p>“We are constantly looking for properties that meet our brand standards of location, views, and sites that are rare with unique aspects that we can develop to maximise the lifestyle of residents who live in our buildings,” S&amp;S Projects said.</p>

<p>The Boundary Street site gave <a href="https://www.apartments.com.au/architects/cottee-parker-architects">Cottee Parker</a> a different set of conditions to work with.&nbsp;</p>

<p>“Our design brief was to design a building that took advantage of its unique elevated corner siting offering a range of spectacular view corridor opportunities,” Cottee Parker said.</p>

<p>“The design had to reinforce the strong brand pillars of S&amp;S which are quality, luxury and superior resident amenity.”</p>

<p>[smartcode_project:default project_id=140491 project_image_fid=284543]</p>

<p>Cottee Parker responded with a sculptural floorplate and strong horizontal banding, with continuous balconies and landscaped planters wrapping the building. Operable screens along the balcony edges allow residents to manage light and shade while creating an additional layer of pattern across the facade.</p>

<p>The tower rises above a heavily landscaped podium incorporating the entry lobby and recreational level, while the broader architectural expression takes cues from Rainbow Bay's coastal environment through its organic forms and light material palette.</p>

<p>Cottee Parker says the design has also been developed to complement S&amp;S Projects’ three previous Rainbow Bay developments while retaining its own architectural identity.</p>

<p>Inside, the residences continue that coastal response through two interior schemes centred on warm timbers and neutral tones, alongside patterned natural stone and fluted detailing.</p>

<p>Floor-to-ceiling sliding glass doors connect open-plan living areas to wraparound balconies, while natural stone is used across benchtops, splashbacks and bathroom walls. Specifications also include light-washed timber flooring, gas fireplaces, integrated bar and wine fridges, freestanding stone baths and 100 per cent wool carpet.</p>

<p>[smartcode_project:default project_id=140491 project_image_fid=284559]</p>

<p>Cottee Parker Director Sandra Brown said the intention was to create an architectural response closely connected to its surroundings.</p>

<p>“Imagine architecture that breathes with the rhythm of nature, where every curve and line flows seamlessly – creating spaces that dance with the elements, where sunlight kisses every surface and the gentle sea breeze fills every space,” Brown said.</p>

<p>The lessons S&amp;S Projects carried into Radia also extend to its resident amenity, with a substantial collection of shared facilities planned for just 38 residences.</p>

<p>A dedicated Residents Club will include a lap pool and spa, gymnasium, ice bath, sauna, steam room and hot rocks sauna. A residents' lounge, private dining room, outdoor dining and barbecue area and business centre are also planned, along with storage and dedicated surfboard and beach lockers.</p>

<p>S&amp;S Projects Founding Director Paul Gedoun said the facilities were also designed around the project's Rainbow Bay setting.</p>

<p>“Each amenity is designed to capitalise on the lifestyle of Rainbow Bay, ensuring residents can enjoy the relaxed coastal experience the enclave is famous for,” Gedoun said.</p>

<p>[smartcode_project:default project_id=140491 project_image_fid=284555]</p>

<p><a href="https://www.apartments.com.au/project-marketer/pezet-matheson">Pezet Matheson</a> says purchasers to date have predominantly included local downsizers, interstate lifestyle investors and families, alongside a strong contingent of repeat S&amp;S purchasers.&nbsp;</p>

<p>According to the project sales team, feedback has centred on the natural stone and joinery, generous floorplans, natural light and the ability for residences to capture views in multiple directions. The completed Flow, Awaken and Esprit developments have also provided prospective purchasers with an existing reference point for S&amp;S Projects' delivery in Rainbow Bay.</p>

<p>There has also been interest from high-profile surfers and people connected to the surf community, with the elevated building providing outlooks towards several of the area's recognised surf breaks.</p>

<p>Radia continues S&amp;S Projects' concentration of development in a tightly held part of the southern Gold Coast, close to Rainbow Bay Beach, Snapper Rocks, Duranbah Beach, Greenmount Beach and the Tweed River. The neighbourhood also includes a growing collection of hospitality venues, while Coolangatta Airport provides connections beyond the southern Gold Coast.</p>

<p>Hutchinson Builders is now delivering Radia, continuing the project from early works privately funded by S&amp;S Projects. The $250 million development is expected to reach completion in the third quarter of 2027.</p>

<p>“With our history in Rainbow Bay, we have been fortunate to be heavily involved in how the development landscape has unfolded and this project slides into the property landscape comfortably and will feel like it was always there,” the developer said.</p>

<p>[smartcode_project_cta:default project_id=140491]</p>


How three Rainbow Bay projects shaped S&S Projects' fourth, Radia

<p>Nearly 40 years after <a href="https://www.apartments.com.au/developers/sheida-group">The Sheida Group</a> began working on the northern Gold Coast, the family-owned developer is continuing its involvement in Hope Island with Marina Point Apartments, where apartment scale has been a central part of the development.</p>

<p>Across the 235-apartment waterfront community, the developer has prioritised larger floorplans, substantial open space and marina access, responding to a purchaser base that has predominantly comprised local owner-occupiers and downsizers moving from larger homes.</p>

<p>"Having already delivered Anchorage nearby, we also understood this particular market and how people live here," developer Rick Sheida said.</p>

<p>"<a href="https://www.apartments.com.au/new-apartments/marina-point-apartments-hope-island-66-view-line-terrace-hope-island-qld-4212">Marina Point&nbsp;Apartments</a> gave us the opportunity to build on those lessons and create the next evolution of our work in Hope Island."</p>

<p>[smartcode_project:default project_id=136992 project_image_fid=293151]</p>

<p>The Sheida Group acquired the Marina Point land around 2018. Its appeal, Sheida says, went beyond having a waterfront address.</p>

<p>"What attracted us was not simply that the site was waterfront, but the way it meets the water," he said.</p>

<p>"It sits at the junction of broad waterways, creating long sightlines, changing views and a sense of movement throughout the day. Its shape also allowed us to orient the buildings outward, improve privacy between residences and make better use of natural light and breezes."</p>

<p>The buildings have subsequently been positioned around the perimeter of the site, allowing most apartments to take in water views while others look across the resort amenity or hinterland. Once all four buildings are complete, approximately one hectare of the site is expected to remain as open space.</p>

<p>The waterfront also provides the potential for up to 50 marina berths, with berths ranging from 15 to 24 metres and options designed to accommodate wider vessels including catamarans. Access from the marina to the Gold Coast Seaway is bridge-free.</p>

<p>[smartcode_project:default project_id=136992 project_image_fid=293149]</p>

<p>The developer says purchasers to date have predominantly been owner-occupiers and downsizers from <a href="https://www.apartments.com.au/new-apartments/marina-point-apartments-hope-island-66-view-line-terrace-hope-island-qld-4212">Hope Island</a> and elsewhere on the Gold Coast, generally aged between 45 and 70. Many have sold larger family homes or properties requiring significant upkeep.</p>

<p>That purchaser profile informed a design brief centred on retaining the space and functionality of a larger home within an apartment format.</p>

<p>"Many of our buyers are coming from large, well-appointed homes in Sanctuary Cove and the surrounding area," the project team said.</p>

<p>"They are accustomed to generous spaces and thoughtful design, so it was important that the apartments delivered the same sense of comfort and functionality.</p>

<p>"Every room needed to feel well proportioned, every space needed a clear purpose and nothing could feel compromised."</p>

<p>Residences range from 139 sqm through to 319 sqm penthouses, with two car spaces provided to apartments and three to penthouses. Minimum 2.7-metre ceilings, floor-to-ceiling glazing, entertainer's kitchens with butler's pantries, substantial storage and balconies ranging from 18 sqm to 37 sqm further reflect the emphasis on space.</p>

<p>One purchaser from Sanctuary Cove has taken the concept further, combining two of Marina Point's largest apartments to create a 552 sqm residence with raked ceilings reaching up to 4.5 metres.</p>

<p>[smartcode_project:default project_id=136992 project_image_fid=293155]</p>

<p>With Building 1 now complete, the developer is also seeing its original design assumptions tested against purchaser feedback.</p>

<p>Three completed display residences allow prospective purchasers to compare apartment sizes, layouts, finishes and outlooks in person. The sales team says one of the most consistent responses has been to the scale of the apartments, with visitors describing them as feeling more like homes than conventional apartments.</p>

<p>The first stage of resident amenity is also operational, including a 25-metre heated lap pool, Technogym-equipped gym, infrared sauna, golf simulator and yoga room. Future facilities are set to include a resort-style pool and spa, waterfront barbecue area and a residents' lounge with a library, fireplace, pool table, kitchen and bar.</p>

<p>Rather than treating the four buildings independently, the design brief called for a complete waterfront neighbourhood, balancing private residences with landscaping, open space, marina access and shared amenity.</p>

<p>[smartcode_project:default project_id=136992 project_image_fid=293152]</p>

<p>For Sheida, Marina Point Apartments is ultimately an extension of the developer's longer-term involvement in Hope Island and its view of how the suburb is evolving.</p>

<p>"We were equally interested in the long-term future of Hope Island," he said.</p>

<p>"Its position between Brisbane and the central Gold Coast gives residents access to both, while improving transport connections are making the northern Gold Coast increasingly attractive as a permanent place to live."</p>

<p>Hope Island Marketplace is 1.3 kilometres from Marina Point, while Sanctuary Cove and Paradise Point are within six kilometres. Links Hope Island, The Pines and The Palms golf courses are also nearby, and the new Hope Island train station is under construction around five kilometres from the development.</p>

<p>Building 2 is under construction, with completion scheduled for 2027.</p>

<p>[smartcode_project_cta:default project_id=136992]</p>


Marina Point Apartments continues The Sheida Group's 40-year Hope Island story

<p>Sydney-based fund manager and developer EG is seeking to turn part of the former Roche pharmaceutical campus in Cromer into a 130-home residential community, introducing a mix of low-rise apartments, townhouses and duplexes to the tightly held Northern Beaches market.</p>

<p>The SJB-designed masterplan has been prepared for the 3.2-hectare site at <a href="https://www.apartments.com.au/new-apartments/100-south-creek-road-cromer-nsw-2099">100 South Creek Road</a>, part of the former Roche landholding that EG acquired for $55 million in 2017 through its Yield Plus Infrastructure Fund No. 2.</p>

<p>EG is proposing what SJB describes as a new "urban village" set within the site's significant existing tree canopy.</p>

<p><img alt="Cromer" data-entity-type="file" data-entity-uuid="482c9a58-49f1-4c53-a12e-aaa02336229f" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-24%20at%2011.20.57%E2%80%AFAM.png?VersionId=hZP8_XfPnfNq500dbcjlpVwYU1ebhF9_" /></p>

<p>Around three hectares of the site is considered developable, with the balance incorporating a riparian corridor that would be rehabilitated and revegetated as part of the proposal.</p>

<p>The indicative masterplan comprises approximately 72 apartments in low-rise residential buildings and another 58 townhouses and duplexes.</p>

<p>The apartment component would include around five one-bedroom, 37 two-bedroom and 30 three-bedroom residences, while the townhouse and duplex component would be spread across several different housing typologies. The overall scheme would deliver around 19,500 sqm of gross floor area at an FSR of 0.6:1.</p>

<p>Parking for the apartment component is currently estimated at around 112 resident spaces and 14 visitor spaces, while the townhouse and duplex component would have 116 resident and 12 visitor spaces.</p>

<p>A significant part of the masterplan revolves around retaining the established landscape character of the former Roche campus.</p>

<p>SJB's plans show heavily treed setbacks along both Campbell Avenue and South Creek Road, a centrally located collection of significant native and exotic trees retained as communal open space, and the regeneration of the northern bushland area.</p>

<p>The existing creek corridor along the site's western edge would also be rehabilitated and revegetated, creating additional separation between the new homes and the neighbouring Northern Beaches Business Park.</p>

<p>A heritage-listed cottage and its garden setting would be retained and restored, with SJB flagging its potential adaptive reuse as communal space.</p>

<p>The proposal also includes new communal recreation areas, pedestrian connections to Campbell Avenue and South Creek Road, and a contribution toward improvements to the adjoining Michele Reserve.</p>

<p>Vehicular access would be restricted to South Creek Road, with no vehicle entry proposed from Campbell Avenue. The main internal road would largely follow the site's existing driveway to minimise the impact on established trees.</p>

<p>SJB said residential redevelopment presented an opportunity to retain the majority of the site's heritage-listed mature trees while delivering a broader range of housing types than typically seen across the Northern Beaches.</p>

<p>"The site being 3.27 hectares in area represents one of the largest vacant sites in common ownership in the Cromer and Dee Why area capable of residential renewal," SJB noted in the masterplan.</p>

<p>The architect said the proposal would particularly target housing diversity through townhouses and other "missing middle" typologies suitable for singles, young families, downsizers and retirees.</p>

<p><img alt="Cromer" data-entity-type="file" data-entity-uuid="e3f5d841-8491-427e-8ada-c70d3d03d6bc" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-24%20at%2011.21.02%E2%80%AFAM.png?VersionId=xTV7r.q8lrTzC9vKzMS9zMbjm9wKwhgm" /></p>

<p>The site emerged following the subdivision of the former Roche campus into eastern and western parcels.</p>

<p>EG has already transformed the western portion into the Northern Beaches Business Park, which incorporates heritage-listed office space, modern warehouses and indoor recreation facilities.</p>

<p>The proposed residential community, referred to as Cromer East in SJB's plans, adjoins established housing to the north, east and south-east, while the business park sits beyond the creek corridor to the west.</p>

<p>It is also within 250 metres of Pittwater House School and Northern Beaches Secondary College, while bus stops within a three-to-five-minute walk provide connections to Dee Why, Brookvale and express services to the Sydney CBD. Cromer Park and the South Creek open space corridor are also nearby.</p>

<p>EG acquired the broader 7.5-hectare former Roche campus in 2017 for $55 million through its Yield Plus Infrastructure Fund No. 2. The campus at the time comprised more than 25,000 sqm of industrial and office buildings set within landscaped grounds.</p>

<p>The current residential site represents the eastern portion of that original holding.</p>

<p>EG's investment strategy for the fund has centred on acquiring income-producing real estate with longer-term rezoning and repositioning potential, particularly assets benefiting from infrastructure and changing land-use patterns.</p>

<p>EG also has an established residential track record across Sydney, including Bosco in Five Dock, Tempo in Drummoyne, The Flour Mill in Summer Hill and Pindari in Randwick.</p>

<p>The developer says it has delivered more than 1,000 homes to date, with a further 3,000-plus residences across its development pipeline.</p>


First look: EG plans 130 apartments on former Roche pharmaceutical campus in Cromer

<p><a href="https://www.apartments.com.au/developers/s-p-setia">SP Setia</a> has lodged plans for a $750 million, three-tower mixed-use precinct that would complete the long-running redevelopment of Carlton's former Carlton United Breweries site.</p>

<p>The proposal at <a href="https://www.apartments.com.au/new-apartments/185-195-queensberry-street-carlton-vic-3053">46-78 Bouverie Street and 185-195 Queensberry Street</a> spans a 6,468 sqm site, the last remaining undeveloped parcels within the former brewery's 2007 masterplan.</p>

<p>Designed by <a href="https://www.apartments.com.au/architects/cox-architecture">COX Architecture</a>, the development will comprise two purpose-built student accommodation towers and a third build-to-sell apartment tower above a shared commercial podium and basement.</p>

<p>Across the three towers, SP Setia is proposing 606 build-to-sell apartments and 1,499 student accommodation units containing 2,009 beds.</p>

<p>The apartments will sit in the tallest tower, which will rise nearly 200m and 55 storeys. It will become&nbsp;one of the more substantial new build-to-sell apartment projects at the northern edge of Melbourne's CBD.</p>

<p>The apartment mix is weighted toward smaller inner-city product, with 188 studios, 206 one-bedroom apartments, 192 two-bedroom apartments and 20 three-bedroom apartments</p>

<p><img alt="First look: SP Setia plans three-tower finale for Carlton’s former CUB precinct" data-entity-type="file" data-entity-uuid="8271bc87-1b0a-41b7-ac73-a425ee375261" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/3_2.png?VersionId=G4lw23o90B1boX4k4dj7rdz2ZEajS9wy" /></p>

<p>Part of the precinct will be a large-scale&nbsp;3,684 sqm supermarket and a further 2,198 sqm of speciality retail, creating close to 5,900 sqm of new commercial space within the precinct.</p>

<p>But one of the biggest components of the proposal is what sits between the buildings.</p>

<p>Around 4,650 sqm, or roughly 72 per cent of the site, will be publicly accessible open space, incorporating plazas, pedestrian connections, landscaped laneways and retail spill-out areas.</p>

<p>The ground plane is intended to finally complete pedestrian connections envisaged when the CUB masterplan was first approved nearly two decades ago, stitching together Victoria Street, Queensberry Street, Bouverie Street and Swanston Street through the former brewery precinct.</p>

<p>Urbis said the development would "complete the CUB precinct", with the public realm providing important north-south and east-west connections through what is currently the final undeveloped portion of the masterplanned site.</p>

<p>SP Setia is also exploring a new linear park within the Bouverie Street road reserve, with the concept to be developed further with the City of Melbourne through the planning process.</p>

<p>The proposal is being pursued through the Victorian Government's Development Facilitation Program under Clause 53.23 for significant residential development with affordable housing.</p>

<p>The planning report acknowledges the proposed heights exceed those contemplated under the original Comprehensive Development Plan and masterplan, but argues the built-form context has changed considerably over the past two decades.</p>

<p>Urbis said the three towers would instead create a stepped transition between Carlton and the Hoddle Grid, rising progressively from the 94.1-metre Tower One along the Queensberry Street edge to the 199.44-metre Tower Three closer to the established CBD-scale buildings to the south.</p>

<p><img alt="SP Setia" data-entity-type="file" data-entity-uuid="e885a07a-592c-40fc-bf82-e6dbaf32da54" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-21%20at%208.52.24%E2%80%AFAM.png?VersionId=7s_ErUkSKAdY1mAWp3GRZgMNCGtwhk5m" /></p>

<p>SP Setia plans to deliver the development across three stages.</p>

<p>Stage One would deliver the basement, podium and retail areas for the entire precinct alongside the first student tower. Tower Two would follow in Stage Two, before the 606-apartment Tower Three is delivered as the final stage.</p>

<p>If approved and delivered, the project would close out a redevelopment process that has been underway since the former brewery masterplan was approved in 2007, adding more than 2,600 student beds and apartments to a precinct already home to Swanston Central, the Barak Building, RMIT Design Hub and several large student accommodation developments.</p>

<p>&nbsp;</p>

<p>&nbsp;</p>


SP Setia plans three-tower finale for Carlton’s former CUB precinct

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>
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<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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<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>
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<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>
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<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>
</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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