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


Joel Robinson

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

<p>It's been several years since there's been an opportunity to buy a brand new townhome in Melbourne's coastal suburb of Mordialloc. Even apartment developments in recent times have been few and far between in the area.</p>

<p>Local developer LDS Property identified the gap in new housing, securing a site on White Street, directly opposite&nbsp;Woodlands Golf Club Mordialloc. They've recently launched&nbsp;<a href="https://www.apartments.com.au/new-townhouses/wm-residences-mordialloc-102-white-street-mordialloc-vic-3195">WM Residences</a>, just 13 townhouses which they have already started building.</p>

<p>Projects by Buxton Director Heath Thompson, who is selling WM Residences, says the townhouses x that perfect middle ground be</p>

<p data-end="683" data-start="511">"Mordialloc residents have had limited options to downsize within the suburb, often forcing them to look elsewhere despite long-standing ties to the area," Thompson says.</p>

<p data-end="882" data-start="690">"With very little comparable new supply coming to market, projects like WM Residences are well placed, particularly as buyers look to capitalise on current conditions amid constrained supply."</p>

<p data-end="882" data-start="690">[smartcode_project:default project_id=134646 project_image_fid=6109]</p>

<p>The development, designed by regarded architecture firm&nbsp;<a href="https://www.apartments.com.au/architects/ewert-leaf">Ewert Leaf</a>,&nbsp;adopts a deliberately restrained architectural approach, focusing on simplicity, durability and liveability rather than overt design gestures.</p>

<p>The boutique scale is central to the offering. With only 13 three-bedroom residences, each home is configured to prioritise functional layouts and everyday use, supported by private terraces and secure two-car garages.</p>

<p>Ewert Leaf’s design response leans into a calm, neutral material palette. Interiors are defined by oak flooring, white walls and soft finishes, creating a consistent and understated backdrop. The approach avoids trend-driven detailing in favour of longevity, with an emphasis on natural light and spatial clarity.</p>

<p>[smartcode_project:default project_id=134646 project_image_fid=6110]</p>

<p>Beyond aesthetics, the homes are designed to meet contemporary performance expectations. Each residence targets a minimum 6-star energy rating, incorporating double glazing, comprehensive insulation and all-electric Bosch appliances.</p>

<p>The project’s location supports a walkable coastal lifestyle, sitting within close proximity to Mordialloc’s foreshore, Main Street retail strip and the train station. Local cafés and dining venues, including Suburbia Deli and Hendriks Café, are within a short walk, reinforcing the area’s established neighbourhood character.</p>

<p>[smartcode_project:default project_id=134646 project_image_fid=6116]</p>

<p data-end="247" data-is-last-node="" data-is-only-node="" data-start="0">While <a href="https://www.apartments.com.au/developments/mordialloc-vic-3195">Mordialloc</a> is often defined by its beach and pier, the project taps into other areas of day to day living, offering easy access to local food, casual dining and transport, rather than positioning itself purely as a lifestyle retreat.</p>

<p>WM Residences reflects a continued trend across Melbourne’s coastal suburbs towards smaller-scale, design-led townhouse developments, particularly on infill sites where proximity to amenity is already established.</p>

<p>With construction commenced prior to its market entry, the project aligns with a growing preference among buyers for developments with visible progress and defined delivery timeframes.</p>

<p>[smartcode_project_cta:default project_id=134646]</p>


WM Residences fills gap in Mordialloc townhouse market

<p>&nbsp;</p>

<p>Developer GURNER™ Group has revealed $1.65 billion in residential sales nationally across the 12 months to December 2025, driven largely by the continued momentum of its Docklands wellness-focused precinct, Elysium Fields.</p>

<p>The sales result was generated across seven projects in Victoria and New South Wales, headlined by Elysium Fields, GURNER™’s $2.75 billion mixed-use precinct planned for Harbour Esplanade in Docklands.</p>

<p>The project has recorded more than $500 million in sales across the first three towers, equating to around 580 apartments sold.</p>

<p>The first tower, Helios, has now sold out of its 240 private residences, with GURNER™ preparing to release a premium penthouse collection comprising 15 three-bedroom penthouses in coming weeks.</p>

<p>[smartcode_project:default project_id=144441 project_image_fid=370975]</p>

<p>Elysium Fields is being developed on the long-held 20,000 sqm Docklands site at 208-226 Harbour Esplanade, which had remained undeveloped for more than two decades prior to GURNER™ taking over the project around four years ago.</p>

<p>Construction has now commenced across four towers ranging between 18 and 30 storeys, with Hamilton Marino and Maxcon appointed as builders.</p>

<p>Once complete, the precinct is expected to comprise around 1,100 residences, alongside retail, hospitality and public realm uses integrated throughout the site.</p>

<p>[smartcode_project:default project_id=144441 project_image_fid=370981]</p>

<p>Designed by Fraser &amp; Partners in collaboration with GURNER™ Design House, the project has been positioned around the developer’s broader focus on wellness-led residential living.</p>

<p>“We don’t sell apartments. We create a true luxury lifestyle that simply doesn’t exist elsewhere in the market today,” Founder and Executive Chairman Tim Gurner said.</p>

<p>“To deliver that requires an extraordinary level of detail, coordination and discipline across multiple verticals, from design and hospitality through to wellness and service.”</p>

<p>“We’ve always believed that living extends far beyond the physical residence. It’s about how you feel the moment you arrive, how you live day-to-day, and the ecosystem that supports that.”<br />
[smartcode_project:default project_id=144441 project_image_fid=370977]</p>

<p>The project’s design places a heavy focus on landscaping, wellness amenities and biophilic design principles.</p>

<p>Plans include around 3,700 sqm of landscaped gardens and open space throughout the precinct, alongside a retail and dining offering spanning approximately 5,000 sqm.</p>

<p>The broader public realm strategy centres around what GURNER™ describes as the “Path of Life”, an urban forest and landscaped pedestrian environment intended to connect the various buildings and wellness spaces across the precinct.</p>

<p>The apartments themselves will incorporate a range of wellness-focused inclusions, including purified air and water systems, circadian lighting, antimicrobial surfaces, and optional in-home wellness upgrades.</p>

<p>[smartcode_project:default project_id=144441 project_image_fid=370980]</p>

<p>Gurner said the company’s experience through its Saint Haven wellness clubs had directly informed the residential offering now being incorporated into Elysium Fields.</p>

<p>“We’re seeing a clear global shift toward longevity, performance and proactive health,” Gurner said.</p>

<p>“Our role is to deliver that in a way that feels seamless, highly private and beautifully resolved within the environments we create.”</p>

<p>A large component of the wellness offering is planned through the resident amenity and health facilities proposed within the precinct.</p>

<p>That includes plans for bathing and recovery facilities spread throughout the towers, incorporating mineral pools, saunas, steam rooms, flotation therapy, red light therapy and wellness lounges.</p>

<p>The developer is also seeking approvals for what it describes as a “reverse ageing medical clinic” within the precinct.</p>

<p>[smartcode_project:default project_id=144441 project_image_fid=370978]</p>

<p>According to project information released by the group, the proposed facility would include cryotherapy, IV infusion therapy, infrared and dry saunas, PEMF beds, MRIs, DEXA scans, brain scans and blood analysis services.</p>

<p>Within the first tower, Helios, residents will also have access to a dedicated amenity offering known as the Sky Private Club.</p>

<p>The upper 15 levels of the building will include private lounges, dining spaces, rooftop amenities and optional private wellness studios integrated within residences.</p>

<p>The Helios tower itself comprises 260 apartments ranging between 60 sqm and 300 sqm, including a collection of penthouses.</p>

<p>That includes a planned two-storey penthouse spanning around 600 sqm with uninterrupted bay views.</p>

<p>The Elysium Fields precinct is being delivered in partnership with Digital Harbour Holdings, a consortium that includes the Liberman family, which controls the development rights across the Docklands site.</p>

<p>[smartcode_project:default project_id=144441 project_image_fid=370979]</p>

<p>The sales result comes as GURNER™ continues expanding its national development pipeline beyond Victoria.</p>

<p>“We have a strong pipeline across Australia and are now focused on scaling into key markets including New South Wales and Queensland, while continuing to build on our Melbourne base,” Gurner said.</p>

<p>“We currently have more than $3 billion in the market, growing to over $5 billion by October, and expect to materially outperform last year in the 2026 calendar year.”</p>

<p>The result also reflects the continued strength of the upper-end apartment market in Melbourne, particularly for owner-occupier-focused product with large-scale amenity and lifestyle offerings.</p>

<p>[smartcode_project_cta:default project_id=144441]</p>


Record result anchored by the Group’s “utopian” Elysium Fields precinct – defying market headwinds in Docklands.

Elysium Fields drive Gurner to $1.65 billion in apartment sales over 2025

<p>National Australia Bank (NAB) will fund <a href="https://www.apartments.com.au/new-apartments/palmera-residences-gold-coast-18-garfield-terrace-surfers-paradise-qld-4217">Palmera</a>, a $1 billion, 52-level luxury residential tower being developed by Central Equity in one of the Gold Coast’s most tightly held coastal locations at Northcliffe.</p>

<p>The project, launched recently by <a href="https://www.apartments.com.au/developers/central-equity">Central Equity</a>, one of Victoria’s largest private residential developers, comes at a time when construction funding for large residential developments has become increasingly competitive as lenders tighten exposure to the sector.</p>

<p>Multiplex has been appointed the builder, and construction is now underway.</p>

<p>[smartcode_project:default project_id=108274 project_image_fid=365784]</p>

<p>Since its first project, Central Equity has delivered more than 85 residential developments with a combined end value exceeding $8 billion.</p>

<p>Palmera reflects Central Equity’s growing focus on the Gold Coast luxury apartment market and continues a relationship between Central Equity and NAB that dates back to the late 1980s, when the bank funded one of Melbourne’s earliest inner-city residential towers at a time when high-rise apartment living in the CBD was largely unproven.</p>

<p>“NAB’s funding of Central Equity’s $36 million CBD development in the late 1980’s to the financing of the billion-dollar tower today highlights the long-term relationship between the two organisations in delivering major residential projects” said Central Equity Founder and Chairman Eddie Kutner.</p>

<p>He said NAB’s early support was instrumental in helping establish the company’s development model.</p>

<p>“When we commenced our first residential tower in the late 1980s the concept of funding off-the-plan apartments was still largely untested in Australia,” Kutner said.</p>

<p>“NAB recognised the opportunity early and supported the project when others were uncertain. That relationship has now continued for more than 37 years across many developments.”</p>

<p>[smartcode_project:default project_id=108274 project_image_fid=365771]</p>

<p>Central Equity was established in 1987 when Melbourne’s CBD and Southbank precinct were still dominated by warehouses and commercial buildings. Fewer than 100 residents lived in Southbank at the time, and large-scale residential development in the inner city was not widely considered.</p>

<p>Recognising changing demographics and lifestyle preferences, the company began developing high-rise residential projects designed to bring permanent residents into the city centre.</p>

<p>Central Equity has provided accommodation for approximately 40,000 residents across Melbourne’s CBD and Southbank, while also incorporating supporting infrastructure including essential lifestyle facilities like retail spaces, childcare facilities and neighbourhood activity centres.</p>

<p>Central Equity has spent many years assembling the Palmera development site on the corner of Garfield Terrace and Frederick Street in Northcliffe, creating a supersite of around 3,300 sqm.</p>

<p>The developer said the Palmera apartment tower reflects its long-term view of the Gold Coast as a growing and increasingly diversified economy.</p>

<p>[smartcode_project:default project_id=108274 project_image_fid=365768]</p>

<p>Supported by infrastructure including the light rail network, major road upgrades expanded education, hospital and medical facilities and continued expansion at the Gold Coast Airport with more international and domestic flights.</p>

<p>Positioned in the tightly held Northcliffe precinct, the 52-level tower will deliver 347 apartments, targeting buyers seeking a high-end coastal lifestyle, from downsizers to interstate investors.</p>

<p>Designed by Marchese Partners with interiors by DBI, Palmera has been conceived as a next-generation residential offering, featuring a collection of oversized apartments, with premium three-bedroom residences offering sweeping northern views stretching from Surfers Paradise through to Burleigh Heads.</p>

<p>[smartcode_project_cta:default project_id=108274]</p>


NAB funds $1 billion Surfers Paradise apartment development, Palmera

<p>Two years after completing one of the newest developments in North Sydney, developer <a href="https://www.apartments.com.au/developers/aqualand-australia">Aqualand</a> is turning its attention to the rapidly evolving St Leonards apartment market.</p>

<p>The developer, which completed AURA by Aqualand on North Sydney's Walker Street, has lodged plans for a 5,918 sqm site at <a href="https://www.apartments.com.au/new-apartments/33-37-herbert-street-st-leonards-nsw-2065">33-37 Herbert Street, St Leonards,</a> seeking approval for a pair of residential towers rising above a shared podium opposite Royal North Shore Hospital.</p>

<p>The proposal forms part of the broader transformation underway across the St Leonards-Crows Nest precinct, where former industrial and commercial sites are increasingly being redeveloped into high-density mixed-use projects tied to major transport infrastructure.</p>

<p data-end="792" data-start="529"><img alt="Aqualand" data-entity-type="file" data-entity-uuid="2cc428cf-fe70-4cac-9cd5-264ad53af62c" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%209.51.56%E2%80%AFAM.png?VersionId=otKSnHtbjAvAddOnovyXQMgcAwE6DMe1" /></p>

<p data-end="1040" data-start="794">According to the planning documents, the site sits “within the St Leonards–Crows Nest Strategic Centre, identified by the NSW Government as a key area for accommodating future jobs and housing across Sydney.”</p>

<p>The proposal has been designed by fjcstudio, formerly FJMT Studio, and is being progressed through the State Significant Development pathway due to its scale and affordable housing provision.</p>

<p>The scheme would comprise 413 apartments, including 46 affordable housing units, alongside retail and commercial uses fronting Herbert Street. The project would also include communal open space, landscaping, a swimming pool, gymnasium, children’s play areas and podium-level resident amenities.</p>

<p>Planning documents show the development would consist of a part-13, part-39 storey tower form positioned above a four-storey podium.</p>

<p>“The development comprises a unified podium that activates the street interface, and two setback towers to accommodate new housing supply while maintaining an appropriate human scale at ground level,” fjcstudio noted in its Design Report.</p>

<p>The northern and southern towers have been shaped to respond to the surrounding skyline while also limiting overshadowing impacts to nearby public open space, particularly Talus Reserve.</p>

<p>The design report said the differing tower heights were intended to “contribute to a varied skyline while responding to the surrounding built form context and solar access considerations.”</p>

<p><img alt="Aqualand" data-entity-type="file" data-entity-uuid="36da62dc-ff9e-41f2-a7e3-7be38373751c" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%209.51.45%E2%80%AFAM_0.png?VersionId=Mo6Rp2r.XRLTzIfg_PEEpw8NepDH8UBs" /></p>

<p>The site sits directly opposite Royal North Shore Hospital and within walking distance of both St Leonards Station and the new Crows Nest Metro station.</p>

<p>While the site itself sits just outside the formal Crows Nest Transport Oriented Development boundary, the planning documents repeatedly reference its alignment with the broader TOD objectives reshaping the Lower North Shore.</p>

<p>“The site is located adjacent to St Leonards Station and in close proximity to Crows Nest Metro which is within the Crows Nest Transit Orientated Development Accelerated Precinct which has been identified by the NSW Government to support housing delivery,” the Design Verification Statement noted.</p>

<p>According to fjcstudio, the project has been designed to respond to the broader transition occurring across St Leonards, where increasing residential density is being concentrated around transport infrastructure and employment hubs.</p>

<p>“The broader precinct is undergoing significant change, with a mix of existing mid-rise buildings and newer high-density developments,” the report stated.</p>

<p>“Recent and approved projects indicate a consistent shift toward taller built form, typically organised as tower-and-podium typologies with more active ground levels.”</p>

<p>The proposal includes close to 6,000 sqm of retail and commercial space across the ground floor and podium levels, designed to create a more activated street edge along Herbert Street.</p>

<p>Aqualand’s plans would also introduce a landscaped podium shared between the two towers, with communal open space in the form of a podium rooftop designed to support resident interaction and improve urban greening outcomes. The scheme would also introduce pocket parks at the northern and southern ends of the site, including a landscaped area at the corner of Herbert and Ella streets designed to improve pedestrian amenity and soften the streetscape.</p>

<p>&nbsp;</p>

<p>The proposal is being progressed through the NSW Government’s Housing Delivery Authority pathway, which was introduced to accelerate housing supply across the state. The application was declared State Significant Development in April 2025 following an expression of interest process.</p>

<p><img alt="Aqualand" data-entity-type="file" data-entity-uuid="faf6d97d-2671-454f-b85a-fe1c6a7be608" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%209.51.49%E2%80%AFAM.png?VersionId=diVd28OBVr5.YV.7prrOz.uAanwwwm7a" /></p>

<p>St Leonards has been particularly active with new developments in recent weeks. Developer SP Setia’s <a href="https://www.apartments.com.au/news/nsw/first-look-sp-setia-targets-st-leonards-skyline-with-40-storey-tod-tower">plans for a new 42-storey tower</a> recently went on exhibition through the same pathway, while <a href="https://www.apartments.com.au/news/nsw/first-look-stockland-plans-52-storey-538-apartment-st-leonards-tower">Stockland’s 52-storey tower proposal</a> was also recently unveiled.</p>

<p>Aside from the St Leonards project, which is expected to take around nine months to move through the approvals process ahead of a potential 2027 launch, Aqualand is also preparing to launch Boronia, a new apartment project in Roseville comprising around 111 apartments on Larkin Street.</p>

<p>The developer also has approvals in place for the next stage of the Barangaroo precinct, which will feature new residential, retail, hospitality and community uses, alongside a new metro entry across the five-hectare site.</p>

<p>More than 50 new retail destinations are planned for Central Barangaroo, alongside a 270-metre-long boulevard connecting Hickson Park to Nawi Cove. Together with Harbour Park, more than 50 per cent of the precinct will comprise public open space and parkland.</p>


First look: Aqualand joins St Leonards apartment party

Pete Wargent

<html><body>
<p>Expert Observer</p>

<p>As we previously projected, the housing market has shifted from a buyer’s market to a seller’s one, where fear of missing out (FOMO) has become a major factor. In addition, it is highly likely that the ultra-low interest rate environment will remain in place for at least for the next 24 months, and possibly longer. </p>

<p>This, combined with only a low availability of stock of quality assets in popular areas, has been reflected in almost unprecedented auction clearance rates.  </p>

<p>Buyer’s agents have been reporting tight stock levels all over the country. </p>

<p>It’s not uncommon to see lower stock levels over the summer break, but this year has been something else. Even as new listings have begun to pick up supply is being comfortably outstripped by demand and the market overall is very tight.</p>

<p>Melbourne presents a slightly different dynamic, with various disruptions making the market more disjointed, but in most parts of the country open homes are busy as confidence returns, and strong sales results are being reported in short order.</p>

<p>Market dynamics confirmed earlier forecasts of strong price growth in 2021, with some markets likely to even better than previously forecast. </p>

<p>It is projected that both Sydney and Melbourne will deliver capital growth in the range of 8-12 per cent in 2021. Many areas are also likely to deliver double digit growth over the calendar year. In particular, houses with a high land value component and scarcity value are likely to enjoy very strong demand and capital growth, both in the short and long term. </p>

<p>Other markets, particularly south-east Queensland and popular regional areas that offer particularly good lifestyle choices, also enjoy strong demand, and this is likely to result in strong price growth both in the short- and long-term, as the trend of increased popularity of such areas is sustained. </p>

<p>The medium- and long-term projections for South Australia, Western Australia, and the Northern Territory, are different than those that are projected to the eastern states. While many other areas that experience lower population growth and softer job market (in comparison to Sydney and Melbourne), such as Perth, are also experiencing strong capital growth for houses, this is less sustainable over the long term, due to lower external migration and a relatively smaller number of high paying jobs in the ‘knowledge industry’ (e.g., financial services, IT, etc).  </p>

<p>Obviously, these are under our key underlying assumption is that the COVID-19 vaccinations that have been rolled out will provide a sustainable solution to the virus over time. </p>

<p>Rental apartments, however, continue to represent a higher risk at the present time, in particular inner-city apartment markets such as Inner-Melbourne.  </p>

<p>Consumer sentiment is very high, as expected. According to Westpac-Melbourne Institute, in February, Westpac’s key measure of house price expectations has risen strongly to 154.7 from 117.3 in October. All states have registered impressive recoveries. </p>

<p>House price expectations are already being reflected in auction clearance rates figures, especially in Melbourne. Preliminary auction clearance rates in the last week of January showed results of 83 per cent in Melbourne and 83 per cent in Sydney, with noticeably higher auction clearance rates for houses than units. Clearance rates across the country are likely to remain high and similar to pre-pandemic Levels and well above the 70 per cent mark. </p>

<p>A sustained period of ultra-low interest rates seems almost certain in the foreseeable future. This has led some lenders to offer introductory home loan variable rates of 1.79 per cent, a move which follows the launch of the first fixed rates of 1.75 per cent. Consequently, this has led to an increase in housing finance.  </p>

<p>The latest ABS data on new housing lending showed a record 31.2 per cent year-on-year rise, driven by a surge in owner-occupier lending (which includes a large increase in construction loans) as well as a smaller rise in investment lending. The value of new owner occupier home loan commitments increased by 8.7 per cent to $19.9 billion in December 2020 and the value of investor loan commitments was also up 10.9 per cent to $6.07 billion. </p>

<p>First home buyer activity is also well above the benchmark, up 56.6 per cent year-on-year. However, the share of owner-occupier activity is likely to reduce with an expected increase in investor activity. </p>

<p>A further increase in housing finance is highly likely during the first quarter of 2021 with many lenders already experiencing backlogs to address loan pre-approval applications. Ultra-low interest rates are also likely to have a positive impact on the market during 2021 and 2022. </p>

<p>Lifestyle areas enjoyed strong demand before COVID-19 hit, and the demand trend of sea- and treechange homebuyers is now, with flexible working arrangements, even stronger. Those who work in a stable corporate environment, but do so remotely, are taking advantage of great buying opportunities in NSW, Victoria, and south-east Queensland. </p>

<p>These include areas of south-east Queensland such as the Sunshine Coast and the Gold Coast, just over the NSW border in Byron Bay, and further south on the Central Coast, in areas such as North Avoca, Terrigal, and Wamberal. Then, there are also sought-after locations such as the Hunter Valley, Wollongong, and the NSW South Coast, and in Victoria, the Mornington Peninsula, Geelong, and Ballarat. Beachside suburbs especially are outperforming the wider market as they offer fantastic lifestyle opportunities. The ability to work remotely and to move to regional areas also has been a contributing factor in supporting housing affordability, as the pressure in capital cities will be somewhat mitigated. </p>

<p>Due to ultra-low interest rates, the housing market is reaching new highs with further price increases projected. Consequently, this will make dwellings less affordable when including the required deposit and closing costs. While internal migration to regional areas somewhat mitigates the problem, there is still a major undersupply of family suitable properties in popular areas with proximity to the major employment hubs. </p>

<p>High-rise apartments are not considered to be a fully substitutable product to houses and townhouses, and therefore will not materially impact the demand for houses. Housing affordability is likely to remain a chronic issue particularly in Greater Sydney, Greater Melbourne as well as popular areas in south-east Queensland. </p>

<p>However, it is likely that strong price increases will encourage APRA to watch the housing market closely, particularly given record low interest rates, high household debt, and signs of some revival in borrowing for speculative purposes. It should be noted that strong investor activity is perceived by the RBA as ‘speculation’ that increases the risks to financial stability. Consequently, any major increase in investor activity is likely to trigger the reintroduction of macroprudential measures by APRA, at a certain point in time. </p>

<p>Population growth, as projected, has been reduced substantially and there will be significant reduction in total population growth due to low external migration, with Net Overseas Migration (NOM) in FY21 is expected to drop to -71,600 people, for Australia's first experience of negative NOM since 1946. This negative trend is forecast to continue in FY22 and only gradually return to pre-COVID levels from FY23 onwards. The reduction in overseas migration has and will continue to have a major impact on rental apartments that have already experienced increased vacancy rates and lower demand from investors. </p>

<p>In the immediate term, there are higher risks in the rental apartment segment, that are likely to result in price reductions across the country, particularly in heavily supplied areas in Melbourne, and to a lesser extent in Sydney. These markets may be more volatile due to the high proportion of property investors and high levels of external migration. There is a renewed interest in the high risk off-the-plan units, due to generous government concessions and the perceived opportunity to buy at, allegedly, low prices. </p>

<p>However, off-the-plan units carry a high level of risk mainly as buyers, including property investors, shift demand towards detached houses. Uncertainty in relation to external migration further increases the risk. </p>

<p>The unit rental market overall remains relatively weak. The decline in unit rents was largely concentrated around the inner-city markets of Melbourne and Sydney, contributing to a city-wide drop of 7.6 per cent and 5.7 per cent respectively over the year. Unit rents also fell 4.6 per cent across the combined capital city unit market. </p>

<p>This increases serviceability risk (particularly in the short term) due to the combination of continued high supply of units, preference for houses in capital cities and regional areas, and uncertainty related to the rental demand largely driven by young renters and migrants.  </p>

<p>Serviceability risk already has and will continue to have a significant impact on investor demand for high-rise units, as investors are very responsive to out-of-pocket expenses. </p>

<p>Therefore, both equity risk and cash flow risk for rental apartments, remain relatively high.</p>

<p>Pete Wargent </p>
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The housing market has shifted from a buyer’s market to a seller’s one, where fear of missing out (FOMO) has become a major factor

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Ultra-low interest rates and 'FOMO' drive dwelling values to new highs with double-digit growth on the horizon: Pete Wargent

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<p>Reserve Bank assets have continued to increase to $319 billion as at mid-December. </p>

<p>But as money growth scaled fresh cycle highs of 12.4 per cent in November, credit growth continued to slump to new cycle lows of just 1.7 per cent. </p>

<figure><a class="colorbox colorbox-insert-image" href="https://res.cloudinary.com/dz9xllyip/image/fetch/q_auto:good/https://s3-ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/pictures/article-images/credit_v_money_warg_1.jpg" rel="gallery-all"><img alt="" class="image-article-full-width-580px" height="331" src="/s3/files/styles/article_full_width_580px/public/pictures/article-images/credit_v_money_warg_1.jpg?itok=9hlONLhn" width="580"></a></figure><p>Business credit growth was negative again in November, as it was in October, and there's been little need for personal credit to grow lately as stimulus (in fact personal credit growth has crashed deeply into negative territory this year). </p>

<p>Housing credit growth continued to move up to a 17-month high, but overall will be more modest in this cycle with interest-only loans outstanding having been crunched lower from $580 billion to around $260 billion. </p>

<p>To date the growth has been all about owner-occupiers, with this cohort recording +5.4 per cent credit growth over the year to November 2020. </p>

<p>The housing credit impulse already points to higher housing prices in the first quarter of 2021. </p>

<p>With enquiries from investors suddenly jumping in December housing credit growth will likely rise further, in turn igniting double digit gains for property prices (base case).</p>
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As money growth scaled fresh cycle highs of 12.4 per cent in November, credit growth continued to slump to new cycle lows of just 1.7 per cent. 

Credit growth slumps to new cycle lows: Pete Wargent

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<p>The lower dollar continues to work away on Arrivals and Departure trends, with a further +1.8 per cent seasonally adjusted increase in the number of short term arrivals in November, and a -2.8 per cent decrease in the equivalent number of departures.  </p>
<p>The monthly ratio of short term departures this continues to decline, which will act as a twin boost for the domestic economy.</p>
<p><img class="aligncenter img-responsive" src="https://2.bp.blogspot.com/-b73svb4ZFPU/VpUnsI93FyI/AAAAAAAAak0/7_yWcorhIAA/s640/A2.jpg" alt="" width="640" height="320"></p>
<p>The labour market is not presently strong enough to warrant the exceedingly high level of net permanent and long term immigration seen in 2013 of above 400,000.</p>
<p>The rolling annual figure is now seemingly getting set to stabilise – in November the rolling annual total ticked down slightly from 278,200 to 277,600, with the decline being felt most keenly in the resources states and the regions, as opposed to the largest capital cities.</p>
<p> </p>
<p><img class="aligncenter img-responsive" src="https://3.bp.blogspot.com/-O7WpgUtq3xE/VpUnsHJlouI/AAAAAAAAaks/zY07p-aR25M/s640/A1.jpg" alt="" width="640" height="322"></p>
<p> </p>
<p>The most recent <a href="https://petewargent.blogspot.sg/2015/12/students-to-drive-population" target="_blank">forecasts</a> from the Department of Immigration &amp; Border Protection (DIBP) show that the population growth rebound for the remainder of this decade will be driven by international students rather than by immigrants on 457 or permanent resident visas.</p>
<h4>RECORD CHINESE TOURISM</h4>
<p>The annual number of short term arrivals into Australia surged to a new record high of 7.36 million in November.</p>
<p>There have been significant increases in the number of visitors from India (+19 per cent) and the United States (+9 per cent) over the past year, Americans doubtless encouraged by favourable shifts in the exchange rate.</p>
<p>There can no doubting the key trend here, however, which has been the vast +17 per cent increase in the number of visitors from China, Hong Kong and Taiwan to 1.36 million.</p>
<p>The pace and scale of the increase over the past decade has been breathtaking, as documented regularly on this blog.</p>
<p> </p>
<p><img class="aligncenter img-responsive" src="https://4.bp.blogspot.com/-7I2RT3jAbrU/VpUns-kh5eI/AAAAAAAAak4/zg5drP4jalk/s640/A4.jpg" alt="" width="640" height="328"></p>
<p>For the first time China alone accounted for more than 1 million visitors in the year to November, and make no mistake, Chinese tourists spend up big when they come to Australia.</p>
<h4>STUDENTS</h4>
<p>A record 3.38 million persons came to Australia for a holiday over the year, while for the first time this year more than 2 million cited there reason for journey as “visiting friends and relatives”, reflective of Australia’s status as a country built on immigration.</p>
<p> </p>
<p><img class="aligncenter img-responsive" src="https://4.bp.blogspot.com/-Z1Fex7hVrZI/VpUnsNsACqI/AAAAAAAAakw/40K-WQd6p_0/s640/A3.jpg" alt="" width="640" height="326"></p>
<p> </p>
<p>The other key trend to watch this year is the explosion in the number of international students, not least because following a streamlining of the acceptance rules so many are expected to go on to become permanent residents on other visas.</p>
<p>This data series confirmed that the rolling annual number of education arrivals jumped by an unprecedented +71,200 or +18 per cent to 464,600 in the year to November.</p>
<p> </p>
<p><img class="aligncenter img-responsive" src="https://3.bp.blogspot.com/-ZSAHnIJp5Ec/VpUns7Fo29I/AAAAAAAAak8/Bhsg-ejlFSg/s640/A5.jpg" alt="" width="640" height="312"></p>
<p> </p>
<p>Most students are projected to be accepted into the large capital cities.</p>
<p><span>Pete Wargent is the co-founder of AllenWargent property buyers (London, Sydney) and a best-selling author and blogger.</span></p>
<p> </p>
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How the dollar is driving demographic trends for property investors: Pete Wargent

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<div>There has been a lot of misleading commentary about population growth dropping off a cliff, and so on.</div>
<div> </div>
<div>It really isn't, but the composition of growth is sure changing.</div>
<div> </div>
<div>I explained <a href="https://petewargent.blogspot.co.uk/2015/12/students-to-drive-population" target="_blank">here</a> back in 2015 why international students would be the key driver of growth going forward.<br><br> It's a key reason why so many bloggers and analysts got their supply and demand ratios so muddled last year, particularly in Melbourne where <a href="https://petewargent.blogspot.co.uk/2016/12/melbournes-population-explosion" target="_blank">population growth broke all known records in 2016</a>, but also in Sydney, and to a much lesser extent Brisbane. </div>
<div> </div>
<div>The latest figures from the DIBP confirmed a walloping increase of 90,380 temporary visa holders over the year to September 2016, with a crunching increase in student visa holders of 45,070 over the year.</div>
<div> </div>
<div>Remember many international students are expected to go to secure Australian residency through other visa classes.</div>
<div> </div>
<div>There was also a massive 51.4 per cent increase in temporary graduate visa holders, easily eclipsing the relatively small decline in skilled 457 visas (that form the basis of most doomsday scenarios).</div>
<div> </div>
<div><a href="https://3.bp.blogspot.com/-lK4sTHM0uYs/WHdgU0fcoSI/AAAAAAAAhM0/GyXPi2QtKwIIQYK41p-R605PYMtqVcG5QCLcB/s640/V1.jpg" target="_blank">Click to enlarge</a></div>
<p><a href="https://3.bp.blogspot.com/-lK4sTHM0uYs/WHdgU0fcoSI/AAAAAAAAhM0/GyXPi2QtKwIIQYK41p-R605PYMtqVcG5QCLcB/s1600/V1.jpg"><img src="https://3.bp.blogspot.com/-lK4sTHM0uYs/WHdgU0fcoSI/AAAAAAAAhM0/GyXPi2QtKwIIQYK41p-R605PYMtqVcG5QCLcB/s640/V1.jpg" width="640" height="240"></a></p>
<p>Source: DIBP</p>
<div>By far the greatest number of temporary visa holders were Kiwis on the visa subclass 444, increasing by 2.3 per cent to 677,030, dispelling the narrative that all Kiwis are heading home.<br><br> Total temporary entrants will rise towards 2.1 million by the end of 2017.</div>
<p><a href="https://1.bp.blogspot.com/-VzgXJuEpkk0/WHdgUqv7CTI/AAAAAAAAhMw/DC6WVITK2OUb1g5rEkB6izXpV9_sxBxDwCLcB/s640/V2.jpg" target="_blank">Click to enlarge</a><br><br><a href="https://1.bp.blogspot.com/-VzgXJuEpkk0/WHdgUqv7CTI/AAAAAAAAhMw/DC6WVITK2OUb1g5rEkB6izXpV9_sxBxDwCLcB/s1600/V2.jpg"><img src="https://1.bp.blogspot.com/-VzgXJuEpkk0/WHdgUqv7CTI/AAAAAAAAhMw/DC6WVITK2OUb1g5rEkB6izXpV9_sxBxDwCLcB/s640/V2.jpg" width="640" height="270"></a><br><br> Thanks to the visa subclass 444, some 34.5 per cent of temporary visa holders are New Zealanders.<br><br><a href="https://1.bp.blogspot.com/-rfnlCybJ6ME/WHdgVEXjSuI/AAAAAAAAhM4/SpZNbB3_84gsYYaz5gmVwrT8KZm2wSIHwCLcB/s640/V3.jpg" target="_blank"> Click to enlarge</a><br><br><a href="https://1.bp.blogspot.com/-rfnlCybJ6ME/WHdgVEXjSuI/AAAAAAAAhM4/SpZNbB3_84gsYYaz5gmVwrT8KZm2wSIHwCLcB/s1600/V3.jpg"><img src="https://1.bp.blogspot.com/-rfnlCybJ6ME/WHdgVEXjSuI/AAAAAAAAhM4/SpZNbB3_84gsYYaz5gmVwrT8KZm2wSIHwCLcB/s640/V3.jpg" width="640" height="296"></a><br><br> However, the real growth sector is in student visas, particularly to Chinese and Indian students.</p>
<p><a href="https://3.bp.blogspot.com/-S7kZqDb9cgU/WHdgToxuj0I/AAAAAAAAhMs/WzCBZ5Otx-IThjZwfZ_c-6tQ9aCvGp_ewCLcB/s640/STUDENT.jpg" target="_blank">Click to enlarge</a></p>
<div><a href="https://3.bp.blogspot.com/-S7kZqDb9cgU/WHdgToxuj0I/AAAAAAAAhMs/WzCBZ5Otx-IThjZwfZ_c-6tQ9aCvGp_ewCLcB/s1600/STUDENT.jpg"><img src="https://3.bp.blogspot.com/-S7kZqDb9cgU/WHdgToxuj0I/AAAAAAAAhMs/WzCBZ5Otx-IThjZwfZ_c-6tQ9aCvGp_ewCLcB/s640/STUDENT.jpg" width="640" height="298"></a></div>
<div> </div>
<div>Most international students head to institutions in Melbourne, Sydney, and Brisbane - in that order.</div>
<div> </div>
<div>As expected, the insatiable demand from international students will keep on keeping on, delivering a substantial boost for population growth in those three capital cities through 2016 and beyond.</div>
<div> </div>
<div>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>.</div>
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Students help temporary visa holders soar towards 2 million: Pete Wargent

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<div>Wages grew by just +0.48 per cent in the September 2017 quarter, to be +2.01 per cent higher over the year.</div>
<div> </div>
<div>Superficially this looks like a bit of an improvement, and at least it can be said that wages are growing a bit ahead of the rate of inflation. Just. </div>
<p> </p>
<div class="separator"><img src="https://3.bp.blogspot.com/-IYxYl65xkt4/WgveMX_lgEI/AAAAAAAAnA4/-A3i5dGy9uMkZQ5W1_XbzOkw7fXPcJU3gCEwYBhgL/s640/W4.jpg" width="640" height="398" data-original-height="831" data-original-width="1336"></div>
<p> </p>
<div>And including bonuses the annual increase was a slightly more upbeat +0.7 per cent for the quarter, and +2.2 per cent for the year. </div>
<div> </div>
<div>However, the result this quarter was pumped up by the minimum wage increase, and you can see in the chart below that a number of industries (such as accommodation &amp; food) how this inflated the quarterly numbers. </div>
<div> </div>
<div>Over the year the industries with the most robust wage price growth included healthcare &amp; social assistance (+2.7 per cent), arts &amp; recreation services (+2.7 per cent), and education &amp; training (+2.4 per cent).</div>
<div> </div>
<div>On the other hand wages growth in the mining sector (+1.2 per cent) remains very low, as it does in professional, scientific, &amp; tech services (+1.5 per cent). </div>
<p> </p>
<div class="separator"><img src="https://3.bp.blogspot.com/-qz-oEw4ScZk/WgveKUMf7-I/AAAAAAAAnBA/i1VE8nK3RLUV97PLMfKJ4ALyFwYD8NJjACEwYBhgL/s640/Q5.jpg" width="640" height="398" data-original-height="831" data-original-width="1335"></div>
<div class="separator"> </div>
<div>Annual wage price growth in the private sector remains super-low at just +1.86 per cent, with wage price growth in the public sector some way higher at +2.37 per cent. </div>
<div> </div>
<div>The public sector index has outpaced the private sector since the peak of the resources construction boom. </div>
<div> </div>
<div class="separator"><img src="https://3.bp.blogspot.com/-AsixGPHs0-4/WgveMQ-G2WI/AAAAAAAAnA8/Sk0v0wmiKGk7QWwu0qw-Sr1NzkzLaeVSgCEwYBhgL/s640/W3.jpg" width="640" height="392" data-original-height="834" data-original-width="1361"></div>
<p><br><strong><span style="text-decoration: underline;">Resources states slow</span></strong></p>
<div><strong><span style="text-decoration: underline;"> </span></strong></div>
<div>At the state level Queensland, Victoria, and Tasmania each recorded wages growth of +2.2 per cent, while New South Wales (+2.1 per cent) also recorded reasonable growth. </div>
<div> </div>
<div>However, there were considerably weaker results in Western Australia (+1.3 per cent) and the Northern Territory (+1.4 per cent). </div>
<div> </div>
<div class="separator"><img src="https://3.bp.blogspot.com/-t5Uo7NdC0C8/WgveJMlBj1I/AAAAAAAAnAs/60BC3Bn-sUQWDuK1PRht2vH1chUljsgYQCLcBGAs/s640/W1.jpg" width="640" height="384" data-original-height="814" data-original-width="1355"></div>
<p> </p>
<div>Western Australia recorded the fastest pace of wages growth through the mining boom, but is now coming back to the pack. </div>
<p> </p>
<div class="separator"><img src="https://4.bp.blogspot.com/-ixrHpZfGI4c/WgveK1jqFYI/AAAAAAAAnA0/23c2kG7sJzY-uhNmXvXpRFndFAJm3AVawCLcBGAs/s640/W2.jpg" width="640" height="392" data-original-height="831" data-original-width="1356"></div>
<p><br><strong><span style="text-decoration: underline;">The wrap</span></strong><br><br></p>
<div>Overall, while it's positive to note annual wages growth moving a bit higher and ahead of the rate inflation, in reality this was a very soft result which missed expectations, having been puffed up by the minimum wage increase.<br><br>Not much in the way of pre-Xmas cheer to be found here! </div>
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Wages growth at snail's pace: Pete Wargent

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<p>Stamp duty isn't a much admired tax.</p>
<p>Except by governments that is!</p>
<p>The arguments against stamp and transfer duties include that they discourage labour force mobility, while making life challenging for first home buyers.</p>
<p>It's not hard to see why governments like them, though.</p>
<p>Over the year to February 2017 the NSW Office of State Revenue (OSR) alone recorded astronomical receipts of $9.4 billion.</p>
<p>Stamp duty is now accounting for more than a quarter of state government revenue in NSW.</p>
<p><a href="https://www.propertyobserver.com.au/images/2017/03/30/Chart-1.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/03/30/Chart-1.jpg" alt=""></p>
<p>I noted last year how the NSW government has smashed its budget targets to leave itself with net debt of less than zero for the first time, largely thanks to this remarkable windfall.</p>
<p>A proposed alternative would be to put an annual tax on the unimproved value of residential land, including for the family home (there is already a land tax threshold in place, but it doesn't capture all homeowners due to an exemption on the family home).</p>
<p>The main challenge is that with residential land values in New South Wales of $1,657 billion, the annual tax would have to be quite significant to raise the equivalent $9.4 billion.</p>
<p>Recent proposals have included an annual land tax of 0.75 per cent.</p>
<p><a href="https://www.propertyobserver.com.au/images/2017/03/30/Chart-2.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/03/30/Chart-2.jpg" alt=""></p>
<p>There are now just over 3 million dwellings in New South Wales, so another way to look at it is that households and owners of other residential dwellings may have to stump up on average $3,100 per annum to raise the equivalent amount of tax.</p>
<p><a href="https://www.propertyobserver.com.au/images/2017/03/30/Chart-3.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/03/30/Chart-3.jpg" alt=""></p>
<p>A proposed land value tax would typically deliver comparatively little pain for those living in an apartment, since the land value content of such dwellings is relatively low.</p>
<p>On the other hand I think of the retirees on my street who now have very valuable land under their homes, for which the annual land tax bill would be impossible for them to pay.</p>
<p>So the argument goes, by taxing people on their homes they will be 'incentivised' to move somewhere smaller and more appropriate for their needs.</p>
<p>It could certainly happen over time, though it would be a brave move politically.</p>
<p class="p1"><span class="s1">PETE WARGENT is the co-founder of <a href="https://allenwargent.com/" target="_blank"><span class="s2">AllenWargent</span></a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank"><span class="s2">blogger</span></a>.</span></p>
<p class="p2"><span class="s3"><em>His latest book is </em><a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx" target="_blank"><span class="s2"><em>Four Green Houses and a Red Hotel</em></span></a><em>.</em></span></p>
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Stamp duty bonanza: Pete Wargent 

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<div>The Reserve Bank of Australia (RBA) released its Financial Aggregates figures for October 2017, which showed housing credit expanding by +6.5 per cent over the past 12 months.</div>
<div> </div>
<div>Investor credit is slowing, but total housing credit growth remained higher than a year earlier, when it was +6.4 per cent.</div>
<div> </div>
<div>Total housing credit broke through $1.7 trillion on the strength in owner-occupier lending. </div>
<div> </div>
<div>$60 billion of loans have now been reclassified from investor to owner-occupier. </div>
<p> </p>
<div class="separator"><a href="https://4.bp.blogspot.com/-e9uRF_zy5oQ/WiKnpcXUnaI/AAAAAAAAnRM/-OwCjyORoloVG0nFZ7J7qO7rho_nUlArACEwYBhgL/s1600/RBA.jpg"><img src="https://4.bp.blogspot.com/-e9uRF_zy5oQ/WiKnpcXUnaI/AAAAAAAAnRM/-OwCjyORoloVG0nFZ7J7qO7rho_nUlArACEwYBhgL/s640/RBA.jpg" width="640" height="380" data-original-height="835" data-original-width="1403"></a></div>
<p> </p>
<div>Personal credit contracted by -0.9 per cent over the year, while annual business credit growth was steady at +4 per cent.<br><strong><span style="text-decoration: underline;"><br></span></strong><strong><span style="text-decoration: underline;">Know your limits</span></strong>
</div>
<div> </div>
<div>APRA also released its monthly banking statistics, which revealed a similar trend, with the monthly result showing considerably faster growth in owner-occupier loans (+0.6 per cent) than investment lending (+0.15 per cent). </div>
<div> </div>
<div>Comparing the aggregates suggests that non-banks continue to garner market share. </div>
<div> </div>
<div>Westpac has been offering discounted investor loans of late, and took the opportunity to grow its investment loans books further in the month (it already has the largest mortgage book pertaining to investors). </div>
<p> </p>
<div class="separator"><a href="https://2.bp.blogspot.com/-8Fxpkv5SEXM/WiKnpIitVzI/AAAAAAAAnRI/wgdjuKrluRYH56ztoLFQf8LPo7fbDJ99wCLcBGAs/s1600/A1.jpg"><img src="https://2.bp.blogspot.com/-8Fxpkv5SEXM/WiKnpIitVzI/AAAAAAAAnRI/wgdjuKrluRYH56ztoLFQf8LPo7fbDJ99wCLcBGAs/s640/A1.jpg" width="640" height="376" data-original-height="831" data-original-width="1412"></a></div>
<p> </p>
<div>Indeed, not only is new interest-only lending now well below the proposed regulatory cap, all of the major banks are now seeing investor credit growing at way below the 10 per cent annual speed limit. </div>
<p> </p>
<div class="separator"><a href="https://1.bp.blogspot.com/-es6thHJIJ5c/WiKnp7UVVDI/AAAAAAAAnRQ/O4jGAA5CHAEhFquJhGVlZygDwJ5qFGtTQCLcBGAs/s1600/A2.jpg"><img src="https://1.bp.blogspot.com/-es6thHJIJ5c/WiKnp7UVVDI/AAAAAAAAnRQ/O4jGAA5CHAEhFquJhGVlZygDwJ5qFGtTQCLcBGAs/s640/A2.jpg" width="640" height="384" data-original-height="822" data-original-width="1367"></a></div>
<p> </p>
<div>These statistics show that there is potentially plenty of scope for banks to incentivise faster investor lending in 2018, particularly Commonwealth Bank and ANZ Bank.<br><br>Oh, and there's a Royal Commission to follow!</div>
<div> </div>
<div class="separator"><a href="https://4.bp.blogspot.com/-wbT8FzhZC5w/WiKr6bzIaYI/AAAAAAAAnRo/tiSHmv9eWGUSJBb4WVlSCubp4peYkulpwCLcBGAs/s1600/limit-2299513_1920.jpg"><img src="https://4.bp.blogspot.com/-wbT8FzhZC5w/WiKr6bzIaYI/AAAAAAAAnRo/tiSHmv9eWGUSJBb4WVlSCubp4peYkulpwCLcBGAs/s640/limit-2299513_1920.jpg" width="640" height="480" data-original-height="1200" data-original-width="1600"></a></div>
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RBA's October Financial Aggregates figures sees housing credit expand

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<p>S&amp;P Global Ratings has reported that Australia's prime SPIN 30+ day delinquencies declined a little further from 1.08 per cent to 1.04 per cent in October 2017.</p>
<div id="post-body-3454931207027681415">
<div>
<p>31-60 day prime mortgage arrears have now been tracking at historic lows since June 2017.</p>
<p>There's still a bit happening in the 90+ days space, but arrears have been improving here too since May.</p>
<p>Year-on-year mortgage arrears were comfortably lower.</p>
<p><a href="https://1.bp.blogspot.com/-KxfCYFuanl0/Wjgn0DCCqvI/AAAAAAAAnks/ALly7UBUGHcvhI-sIXAjjgrxzzHjIXxuQCLcBGAs/s1600/S%2526P%2BArrears.jpg" target="_blank"><img src="https://1.bp.blogspot.com/-KxfCYFuanl0/Wjgn0DCCqvI/AAAAAAAAnks/ALly7UBUGHcvhI-sIXAjjgrxzzHjIXxuQCLcBGAs/s640/S%2526P%2BArrears.jpg" width="640" height="380" data-original-height="800" data-original-width="1347"></a></p>
</div>
<div>Declines were reported in all mainland states and territories. </div>
<br><div><a href="https://2.bp.blogspot.com/-c-AKP9xZqh8/WjddO7rxMYI/AAAAAAAAnj4/lQtqxkBFhFUyC2hsBnDCSK4yElKrWBc6ACLcBGAs/s1600/SandP.jpg" target="_blank"><img src="https://2.bp.blogspot.com/-c-AKP9xZqh8/WjddO7rxMYI/AAAAAAAAnj4/lQtqxkBFhFUyC2hsBnDCSK4yElKrWBc6ACLcBGAs/s400/SandP.jpg" width="400" height="327" data-original-height="646" data-original-width="788"></a></div>
<br><div>Source: S&amp;P Global Ratings</div>
<br><div>Western Australia continued to have the highest rate of 30-day arrears, declining from 2.21 per cent to 2.12 per cent. </div>
<div> </div>
<div>The lowest rate of delinquency was to be found in the ACT at only 0.58 per cent (Canberra has <a href="http://petewargent.blogspot.co.uk/2017/11/drain-swamp" target="_blank">by far the highest incomes</a> on the country). </div>
<div> </div>
<div>In New South Wales 30-day arrears fell from 0.79 per cent to only 0.75 per cent in the month.</div>
<div> </div>
<div>Arrears were also below 1 per cent in Victoria and Tasmania.<br><br>Over the past year the biggest improvers were the southern states of Tasmania and South Australia (the other ex-mining state jurisdictions had low arrears already).<br><br><div><a href="https://2.bp.blogspot.com/-z4KH6mQAhPg/Wjg08TYwYLI/AAAAAAAAnk8/r_3IgizuDq8j_7_DPiwD5DC_iYSh_KyYwCLcBGAs/s1600/S%2526P%2BState.jpg" target="_blank"><img src="https://2.bp.blogspot.com/-z4KH6mQAhPg/Wjg08TYwYLI/AAAAAAAAnk8/r_3IgizuDq8j_7_DPiwD5DC_iYSh_KyYwCLcBGAs/s640/S%2526P%2BState.jpg" width="640" height="386" data-original-height="787" data-original-width="1302"></a></div>
</div>
<div>As at the beginning of 2017, S&amp;P Global had reported:<br><br>"We believe that the risk of a sharp, disorderly correction in house prices remains relatively low, reflecting our stable economic outlook for Australia."<br><br>While risks remain, S&amp;P commented this month:</div>
<div> </div>
<div>"We do not expect arrears to increase much above current levels while benign economic conditions persist." </div>
</div>
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Mortgage delinquencies decline further: Pete Wargent

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<div>Figures out recently showed Australian employment growth <a href="http://petewargent.blogspot.com.au/2018/03/employment-growth-hits-all-time-high" target="_blank">tracking at all-time record levels</a>, with a stunning +420,700 year-on-year increase in employment, including an eye-watering +166,200 increase in New South Wales.<br><br>I took a look through those numbers in a bit more detail, including at the state level, <a href="http://petewargent.blogspot.com.au/2018/03/employment-growth-hits-all-time-high" target="_blank">here</a>.<br><br>Population growth tends to be pro-cyclical, and over the year to September 2017 the annual growth in Australia's estimated resident population picked up to +395,600, for the quickest annual increase since 2013 in absolute terms, if not in percentage terms.<br><br>The estimated rate of population increase through net overseas migration is a bit faster than might be implied by the issuance of permanent residency visas, with the growth international students accounting for some of the difference.<br><br>I'll take a look below through where and why that's happened in 4 short parts.<br><br><strong><span style="text-decoration: underline;">Part 1: By natural causes...</span></strong><br><br>
</div>
<div>As the population grows and ages the number of deaths each year tends to climb steadily, now up to +161,100 over the year to September 2017.<br><br>The trends for births are a bit more complicated, and often vary quite significantly around the regions of Australia and by culture.<br><br>Generally speaking, we're still having babies, but on average we opt to do it later in life than was the case over the preceding decades.<br><br>I'm not a bad case study myself for Australia's population trends, being a capital city immigrant to Sydney that worked in professional services, then mining, then real estate...before relocating to Brisbane, and leaving having children about as late as nature would allow.<br><br>I've yet to get divorced.<br><br>You might say I'm following the herd, but in fact my plan has been to be ahead of the crowd on all fronts, and indeed with the benefit of hindsight I probably got out of the mining industry a few years too soon (bubbles can have a second wind and run for <strong><span style="text-decoration: underline;">much</span></strong> longer than you think they will...but you live and learn with these things!).<br><br>Anyway, back to the demographic statistics, there was previously a bit of a blip in the births figures - the error was administrative and related to slow record-keeping rather than the number of babies actually popping out - but the backlog now seems to be fixed and total births have stabilised at around +306,500.<br><br>Thus, the natural increase in Australia's population over the year to September was +145,500, a bit lower than the +151,500 a year earlier as the number of deaths continued to increase. </div>
<div class="separator">
<a href="https://3.bp.blogspot.com/-fRHV9pfvdYw/WrMt_M5T65I/AAAAAAAApDA/JrOdDfLGYGoVNcljLVXCvGKUB3wQ4KgTACLcBGAs/s1600/C1.jpg"><img src="https://3.bp.blogspot.com/-fRHV9pfvdYw/WrMt_M5T65I/AAAAAAAApDA/JrOdDfLGYGoVNcljLVXCvGKUB3wQ4KgTACLcBGAs/s640/C1.jpg" width="640" height="394" data-original-height="824" data-original-width="1336"></a> </div>
<div>It's hard to predict what will happen here.<br><br>Certainly the number of deaths will continue to rise (that's one prediction you can hold me to) and as the Baby Boomer population ages for the past decade I've consistently recommended some exposure to the healthcare sector for that very reason, while there will be a chronic shortage of aged care facilities and, in some locations, retirement living options.<br><br>Future births I can't reliably predict - nobody can - but by dicing up the population pyramid I do like to construct the argument that the growth in births will be much stronger than many expect, due to immigration being focused on younger arrivals, and the <a href="http://petewargent.blogspot.com.au/2017/06/demographic-tsunami" target="_blank">corresponding explosion</a> in the 25-34 year old cohort.<br><br>The births boom will just come a bit later down the track than previous trends might imply, that's all.<br><br>Unfortunately more divorces and separations will also ultimately result in an unprecedented spike in demand for inner-suburban apartments and townhomes, but that's all a while away yet.<br><br><div class="separator"><a href="https://2.bp.blogspot.com/-3xjJlS6OX_k/WrQc2VK_knI/AAAAAAAApDw/O4n-4-OnTLAs8-hkt1esyNXFoB6WhkV2wCLcBGAs/s1600/Year%2Bof%2BAge.jpg"><img src="https://2.bp.blogspot.com/-3xjJlS6OX_k/WrQc2VK_knI/AAAAAAAApDw/O4n-4-OnTLAs8-hkt1esyNXFoB6WhkV2wCLcBGAs/s640/Year%2Bof%2BAge.jpg" width="640" height="396" data-original-height="835" data-original-width="1348"></a></div>
<br><strong><span style="text-decoration: underline;">Part 2: Immigration nation</span></strong><br><br>
</div>
<div>Australia's permanent migrant intake is capped at around 200,000 per annum, but the overall pace of net overseas migration was faster than this, partly accounted for by international students.<br><br>Furthermore, earlier studies by the ABS have found that many Australians migrating overseas 'permanently' or purportedly for the long term end up returning to these shores within a remarkably short space of time, suggesting that for many the grass is not greener elsewhere.<br><br>Incidentally, I wrote in 2015 how these 'boomerang departures' would be one factor leading to a population growth rebound, inadvertently dragging me into a quagmire of social media ridicule (in the end I was right, though).<br><br>Looking at the net figures, then, we can see that net overseas migration increased by +15.4 per cent over the year to +250,100. </div>
<div class="separator"><a href="https://4.bp.blogspot.com/-34wqqS42Kv8/WrMt_uNCZRI/AAAAAAAApDE/S7IKg-aAloEvqn9YiWNsX7i3Mlzr4NWxACLcBGAs/s1600/C2.jpg" target="_blank"><img src="https://4.bp.blogspot.com/-34wqqS42Kv8/WrMt_uNCZRI/AAAAAAAApDE/S7IKg-aAloEvqn9YiWNsX7i3Mlzr4NWxACLcBGAs/s640/C2.jpg" width="640" height="388" data-original-height="827" data-original-width="1362"></a></div>
<p> The next slide tells its own story: immigrants still love Sydney and Melbourne, and now in record numbers. </p>
<div> </div>
<div>Concerningly for the regional centres of Australia, the <em>Characteristics of Recent Migrants</em> survey showed that not only do migrants uniformly head to the capital cities, <a href="http://petewargent.blogspot.com.au/2017/06/migrants-flock-to-capital-cities-stay" target="_blank">they also now overwhelmingly remain there</a>. </div>
<div> </div>
<div>I know a bit about this, because I'm one of the said migrants, although like many I've made a couple of internal capital city moves since my first arrival in Australia in the 1990s. </div>
<div> </div>
<div>During the mining boom years through until 2012 immigrants also flocked to the resources states. </div>
<div> </div>
<div>I recall Simon Reeve's BBC documentaries revealing to stunned Britons that expat truck drivers in Western Australia were earning salaries that most working class Poms could only dream of, and to rub further salt into their wounds the truckies were living in houses with swimming pools you could actually swim in! </div>
<div> </div>
<div>Although Queensland has experienced something of a rebound, the drawcard for the resources states is not nearly as strong as it used to be, and South Australia has at least half a foot in that camp too. </div>
<div> </div>
<div class="separator"><a href="https://1.bp.blogspot.com/-LnrfG9IeByk/WrMt_3Xt3iI/AAAAAAAApDI/G_pEbNLsM7g31kEbUmB4R8Emq2NOQp51QCLcBGAs/s1600/C3.jpg"><img src="https://1.bp.blogspot.com/-LnrfG9IeByk/WrMt_3Xt3iI/AAAAAAAApDI/G_pEbNLsM7g31kEbUmB4R8Emq2NOQp51QCLcBGAs/s640/C3.jpg" width="640" height="384" data-original-height="829" data-original-width="1378"></a></div>
<div>
<br>Going forward Sydney, Melbourne and south-east Queensland are projected to capture the bulk of population growth.<br><br>Perth will now have direct flights to Europe in its favour, but my analysis here previously has shown that in the future almost all of the net growth in the overseas born population will be driven by migrants of Asian origin.<br><br>European-born Baby Boomers are set to drop off the perch and more Asian migrants and international students from China and India are dominating the intake (with many expected to become permanent residents later).<br><br>This in turn has a strong impact on future demographic pull-factors, including for family visas and future international students.<br><br><strong><span style="text-decoration: underline;">Part 3: Upping sticks</span></strong><br><br>One of the main trends to watch for me at the moment is internal movements as the two most populous capital cities adjust to the latest influx.<br><br>Sydney in particular can be wearisome at times with the delivery of the CBD &amp; South East Light Rail project still seemingly an age away, although testing on the Randwick section is at least now underway.<br><br>This is scant consolation, I expect, for the commuting residents of Randwick and Coogee currently experiencing near-unfathomable gridlock on their short 6 to 8km journey to the city, only to discover that when then arrive in the city the key CBD thoroughfares are being dug up there too.<br><br>For this reason and others, Queensland has now usurped Victoria as the typical interstate migrant's destination of choice with net inflows hitting a decade high of above +19,000.<br><br>About 12,000 of those came from New South Wales on a net basis, with the ratio of Sydney's house prices to those in Brisbane tracking at the highest level we've ever seen at above 2.2. One way or another that ratio will likely close back below 2. </div>
<div class="separator"><a href="https://4.bp.blogspot.com/-QEZdgm2pNuk/WrMuAqu4t2I/AAAAAAAApDM/03JRX8SDUyc7fRSf7XW35SD0y6j2QB-agCLcBGAs/s1600/C4.jpg"><img src="https://4.bp.blogspot.com/-QEZdgm2pNuk/WrMuAqu4t2I/AAAAAAAApDM/03JRX8SDUyc7fRSf7XW35SD0y6j2QB-agCLcBGAs/s640/C4.jpg" width="640" height="392" data-original-height="815" data-original-width="1329"></a></div>
<div> </div>
<div>Although not included here because it would simply be a long, flat, green line on this Y-axis scale, Tasmania is now attracting more than a smattering of interstate migrants at +1,000 net over the year to September.<br><br>Net interstate migration away from struggling South Australia is not a new thing, and indeed the ABS figures record that well over 100,000 South Australians have relocated elsewhere on a net basis since the early 1980s.<br><br>South Australia now has the slowest population growth of all the states in percentage terms at +0.6 per cent, but it's the composition of demographic change rather than the absolute headcount that should be of most concern.<br><br>The present speed of the outflow is somewhat alarming, especially because interstate migration can have an irritating tendency to sap a capital city of its potential best and brightest.<br><br>Since the peak of the mining boom in late 2012, South Australia has lost more than -23,000 residents interstate, with many skipping in a south-easterly direction to the brighter lights of Melbourne.<br><br>I don't know how that trend gets arrested, but someone needs to have a deep think about it.<br><br><strong><span style="text-decoration: underline;">Part 4: Totting it up</span></strong><br><br>Totting it all up, then, strength in net interstate migration takes Queensland's population growth all the way back up to +81,300, from a cyclical nadir of below +60,000 in 2015.<br><br>Brisbane typically accounts for 60 to 65 per cent of that growth with Queensland being the one Australian state with diverse and thriving regional centres including Gold Coast (which is set to benefit imminently from the 2018 Commonwealth Games) and Caloundra on the Sunshine Coast.<br><br>I looked <a href="http://petewargent.blogspot.com.au/2018/03/queensland-population-to-pass-5-million" target="_blank">in a bit more detail here</a> at where the main population flows are headed in the Sunshine State.<br><br>But even this rate of state population growth growth pales into insignificance next to Victoria (+147,400) and New South Wales (+123,100).  </div>
<div class="separator"><a href="https://4.bp.blogspot.com/-rVhLXroTZG8/WrMuBDlljYI/AAAAAAAApDQ/8CFZqEvcAhcUNt8y8KF0J6jY9zHqfUkOQCLcBGAs/s1600/C5.jpg"><img src="https://4.bp.blogspot.com/-rVhLXroTZG8/WrMuBDlljYI/AAAAAAAApDQ/8CFZqEvcAhcUNt8y8KF0J6jY9zHqfUkOQCLcBGAs/s640/C5.jpg" width="640" height="386" data-original-height="834" data-original-width="1379"></a></div>
<div> </div>
<div>A significant <a href="http://petewargent.blogspot.com.au/2017/06/melbourne-population-growth-blows-doors" target="_blank">intercensal difference</a> emerged in the 2016 Census and found that the nadir in population growth in Western Australia was considerably lower than previously believed, partly accounting for the dwelling stock overhang, though population growth is now picking up again and the housing market is rebalancing. </div>
<p> </p>
<div class="separator"><a href="https://4.bp.blogspot.com/-C-QY27SOxTs/WrMuBVYWOOI/AAAAAAAApDU/mefPp-GDV-E_Gg_VlKg6pYS5X-fIocHFgCLcBGAs/s1600/C6.jpg"><img src="https://4.bp.blogspot.com/-C-QY27SOxTs/WrMuBVYWOOI/AAAAAAAApDU/mefPp-GDV-E_Gg_VlKg6pYS5X-fIocHFgCLcBGAs/s640/C6.jpg" width="640" height="390" data-original-height="826" data-original-width="1351"></a></div>
<div> </div>
<div>Western Australia's annual population growth was up to +22,000 or +0.9 per cent.</div>
<div> </div>
<div>Finally, the Northern Territory experienced a small population decline in the September 2017 quarter, which is fairly unusual, though not unheard of. </div>
<div> </div>
<div>I've even lived in Darwin myself, which says something about what a cyclical type of place it can be. </div>
<div> </div>
<div>Through recent episodes of disruption there have been strong correcting factors such a once-in-150 year resources boom or the Cyclone Tracy rebuild to drive the Territory forward. </div>
<p> </p>
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<p> </p>
<div>I'm not sure what comes next for the NT through the Ichthys/INPEX construction phase wash-up, but then again I haven't been to Darwin for a couple of years and it's the sort of place that likes to deliver surprises. </div>
<p> </p>
<div><strong><span style="text-decoration: underline;">The wrap</span></strong></div>
<div> </div>
<div>Overall, then, estimated growth in the resident population at +395,600 was comfortably stronger than a year earlier, when it was +370,400.</div>
<div> </div>
<div>Australia's estimated resident population will accordingly pass 25 million within just a few months from today, with Queensland's population projected to surpass 5 million in May. </div>
<div> </div>
<div>After accounting for the concentration of migrants into the capitals Greater Melbourne is growing at about the fastest pace ever.<br><br>Sydney is losing some residents internally to the NSW regions, to the south, north, and west, as Baby Boomers take their new-found housing equity elsewhere for a lifestyle change.</div>
<div> </div>
<div>South-east Queensland population growth will pick up as the <a href="http://petewargent.blogspot.com.au/2018/03/queensland-population-to-pass-5-million" target="_blank">magnetic north</a> does its thing, and in fact it already is as anyone living in inner Brisbane will testify.<br><br><div class="separator"><a href="https://1.bp.blogspot.com/-GdOeqtrS-C8/WrQv9MBrEoI/AAAAAAAApEQ/Kidd_RvjMVUO1dxt1Yr-LpN-Yxtie7F0wCLcBGAs/s1600/QLD.jpg"><img src="https://1.bp.blogspot.com/-GdOeqtrS-C8/WrQv9MBrEoI/AAAAAAAApEQ/Kidd_RvjMVUO1dxt1Yr-LpN-Yxtie7F0wCLcBGAs/s640/QLD.jpg" width="640" height="388" data-original-height="813" data-original-width="1339"></a></div>
</div>
<div>Next I'll get around to posting my mapping population growth versus dwelling completions, which will reveal an interesting outcome or two, especially for Melbourne and Brisbane.</div>
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Immigrants still love Sydney and Melbourne, and now in record numbers

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<div>In August 2017 I attempted to estimate the value and timing of forced interest-only ('IO') resets as a result of tighter lending standards. </div>
<div> </div>
<div>Since that time many rational borrowers have elected to switch to principal and interest (P&amp;I) loans to benefit from the more attractive mortgage rates on offer. </div>
<div> </div>
<div>APRA's quarterly ADI figures showed that the flow of new IO loans was under 16 per cent for a second consecutive quarter. </div>
<div> </div>
<div>This dynamic combination has had a marked impact on the stock value of outstanding IO loans, declining by $93.2 billion of 16.1 per cent year-on-year.</div>
<div> </div>
<div>As a share of ADI residential term loan exposures IO loans have therefore been reduced to 31 per cent as at March 2018, well down from close to 39 per cent a year earlier. </div>
<p> </p>
<div class="separator"><img src="https://1.bp.blogspot.com/-8ZXOTXlNodQ/Wy8El82AoVI/AAAAAAAAqwI/Ksa4JePKI1oQlWmiti6A7-46KuZ3uYeugCLcBGAs/s640/APRA1.jpg" width="640" height="374" data-original-height="803" data-original-width="1367"></div>
<p> </p>
<div>Most borrowers appear to be handling the switch comfortably.</div>
<div> </div>
<div>Those most impacted are likely to be portfolio investors, although many of this cohort built their portfolios over a long period of time, building equity and cashflow in doing so. </div>
<div> </div>
<div>Some may have to sell a property or two in order to reduce debt. </div>
<div> </div>
<div>The share of higher loan-to-value (LVR) ratio lending continued to tighten in the March quarter, having already declined considerably since 2014. </div>
<div> </div>
<div class="separator"><img src="https://1.bp.blogspot.com/-xenupVlmdH4/Wy8El_m7iWI/AAAAAAAAqwQ/-WTHJbrtXA4wGT7M1HI2xxF-dGZjeU-_ACEwYBhgL/s640/APRA2.jpg" width="640" height="366" data-original-height="790" data-original-width="1378"></div>
<div> </div>
<div>The latest figures relate to the first three months of 2018, so it's difficult to know whether the Royal Commission had any further impact over the following period through to June.</div>
<div> </div>
<div>It's interesting to note that the major lenders have lost some market share over time.</div>
<div> </div>
<div>Yet bank share prices saw a punchy rebound this week, possibly relating to a short squeeze, or more likely a pervading sense of relief as the media loses its appetite for daily stories from the Royal Commission. </div>
<div> </div>
<div>
<span>PETE WARGENT is the co-founder of AllenWargent property buyers (London, Sydney) and a best-selling author and </span><a href="https://petewargent.blogspot.com/" target="_blank">blogger</a><span>.</span>
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