<p>Malaysian developer <a href="https://www.apartments.com.au/developers/s-p-setia">SP Setia</a> is the latest to jump into St Leonards booming Transport Oriented Development precinct.</p>

<p>The developer, which has previously delivered Sapphire by the Gardens apartment development in Melbourne, identified the Atchison Street site in 2023. It filed a Scoping Report around 12 months ago, and now has revealed the designs for the new&nbsp;40-storey mixed-use tower.</p>

<p>The State Significant Development Application covers <a href="https://next-portal.urban.com.au/projects/14650/summary">20-22 Atchison Street</a>, a 1,374 sqm site positioned between St Leonards Station and the new Crows Nest Metro station.</p>

<p>Designed by <a href="https://www.apartments.com.au/architects/cox-architecture">COX Architecture</a>, the project would deliver 181 apartments, above a four-storey commercial podium, five basement levels, and new public domain works along Mitchell Street. The apartment mix comprises 35 one-bedroom apartments, 39 one-bedroom-plus-study apartments, 85 two-bedroom apartments, and 22 three-bedroom residences.</p>

<p>The proposal has been lodged as a shop-top housing development under the NSW Government’s TOD planning pathway, which allows increased density around key transport infrastructure. The site sits within the recently rezoned Crows Nest Accelerated TOD Precinct.</p>

<p><img alt="First look: SP Setia targets St Leonards skyline with 40-storey TOD tower" data-entity-type="file" data-entity-uuid="b799673d-48e2-46b0-801a-0e33a9330100" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/atchinson%20site.png?VersionId=dPh0UfwfaHpbFL1R7H1cbZNbIW0CHbCC" /></p>

<p>SP Setia acquired the Atchison Street site as part of its continued expansion into the Australian apartment market. In comments made to City &amp; Country (The Edge Malaysia) in 2023, SP Setia President and CEO Datuk Choong Kai Wai described the acquisition as “a strategic move” aligned with the group’s post-pandemic market recovery strategy.</p>

<p>“Our target for this exceptional development is local and overseas buyers, including first-home buyers, downsizers and investors,” Choong said.</p>

<p>The tower has been designed as a slender vertical form rising from a mixed-use podium, with COX Architecture positioning the development as a response to the evolving St Leonards and Crows Nest skyline.</p>

<p>“The purpose of the project is to facilitate the delivery of high-quality housing at a strategically located site and deliver a built tower outcome that is consistent with the desired future character of St Leonards and aligns with the TOD controls,” the design report stated.</p>

<p><img alt="First look: SP Setia targets St Leonards skyline with 40-storey TOD tower" data-entity-type="file" data-entity-uuid="b1a85eee-76f7-436c-a6da-73ba827b9b13" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/atchinson%20entry.png?VersionId=dA9jHGPMcm.dDbwk4QfxqWiY5bfh3UVt" /></p>

<p>The podium would incorporate retail uses fronting Atchison Street, commercial tenancies, landscaped communal areas, and pedestrian improvements along Mitchell Street. Vehicle access and loading would be consolidated via Atchison Lane.</p>

<p>Residents would have access to more than 665 sqm of communal indoor and outdoor spaces, while the development proposes 96 parking spaces across five basement levels.</p>

<p>The proposal also includes a commitment for 10 per cent of residential floor space to be allocated toward affordable housing through a monetary contribution.</p>

<p>COX said the tower form responds directly to the emerging high-density character of the precinct while seeking to maximise solar access, cross ventilation, and outlook from apartments.</p>

<p><img alt="First look: SP Setia targets St Leonards skyline with 40-storey TOD tower" data-entity-type="file" data-entity-uuid="2163f85c-f63b-4be3-aafa-f8763976cec5" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Article%20Feature%20Image%20%28Grid%29_5.png?VersionId=WiAmtIKJ6.ZQ41EtYEQ1fol7AeorKBlL" /></p>

<p>“The building is orientated towards north,” the Apartment Design Guide compliance report noted, adding that the tower’s slim form was driven by the constrained inner-urban site dimensions.</p>

<p>The design also incorporates landscaped setbacks and communal open space at podium level, intended to soften the interface with surrounding streets and improve pedestrian amenity.</p>

<p>The project adds to a growing wave of redevelopment proposals reshaping St Leonards and Crows Nest following the opening of the Sydney Metro City line and the NSW Government’s push for higher-density housing around major transport nodes.</p>

<p>Last week Stockland filed plans just down the road. They want to build a <a href="https://www.apartments.com.au/new-apartments/601-pacific-highway-st-leonards-nsw-2065">52-storey tower on Pacific Highway</a>.</p>

<p><em>Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/first-look-stockland-plans-52-storey-538-apartment-st-leonards-tower">First look: Stockland plans 52-storey, 538-apartment St Leonards tower&nbsp;</a></em></p>


Joel Robinson

First look: SP Setia targets St Leonards skyline with 40-storey TOD tower

<p><a href="https://www.apartments.com.au/developers/urban-property-group">Urban Property Group</a> has revealed plans for a new mixed-use tower at 10 Dangar Street, Wickham, advancing a proposal that would reshape the southern gateway to Newcastle’s city centre with one of the city’s tallest residential buildings.</p>

<p>The State Significant Development proposal, now on exhibition, seeks approval for a <a href="https://www.apartments.com.au/new-apartments/bowline-10-dangar-street-wickham-nsw-2293">43-storey tower</a> immediately adjacent to the Newcastle Interchange. The project would deliver around 200 apartments, including 42 affordable housing dwellings, alongside 99 co-living units, a 171-room hotel, retail space, and new public domain integrated through the site.</p>

<p>The scheme marks a significant escalation of plans previously approved for the site. Urban Property Group took over the prominent 2,904 sqm parcel, where excavation and demolition had already commenced under an earlier consent for a 14-storey mixed-use development.</p>

<p><img alt="First look: Urban Property Group unveils Newcastle’s next supertower at Wickham interchange" data-entity-type="file" data-entity-uuid="58a96dd9-407f-4d20-86b4-94e4bfeef74b" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/wickham%20podium.png?VersionId=LGlf08pdFGAZDzvx_CXC4XakHNZRuEE0" /></p>

<p>Designed by <a href="https://www.apartments.com.au/architects/sjb-architects">SJB</a>, the tower has been conceived as a landmark transit-oriented development anchored to the Newcastle Interchange precinct. The proposal includes 245 build-to-sell apartments across a mix of one, two, and three-bedroom residences, as well as two penthouses. Fifteen apartments and one operational unit are earmarked for NDIS housing. The co-living component would add a further 99 units, while the podium would accommodate retail uses and hotel facilities.</p>

<p>SJB said the site presents “a valuable opportunity to anchor the precinct by setting the standard for design, active ground planes and character at the key southern gateway.”</p>

<p>The architecture responds directly to the site’s position beside major transport infrastructure and within one of Newcastle’s fastest-evolving urban renewal precincts. The tower form sits above a sculpted podium designed to frame new public spaces, including a through-site pedestrian link connecting Station Street to Hannell Street, landscaped plazas, and activated retail edges.</p>

<p><img alt="First look: Urban Property Group unveils Newcastle’s next supertower at Wickham interchange" data-entity-type="file" data-entity-uuid="a7bd6ff0-f7db-4ce8-a6dc-ea56e72c6149" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/wickham%20lanne.png?VersionId=xzf39VADyhj7zBQY2I9fx9vI62u2tuSb" /></p>

<p>The design report describes the project as part of the broader transition of Wickham into “a vibrant, high-quality mixed-use urban precinct” that leverages proximity to the station, open space, and regional connectivity.</p>

<p>A detailed public art strategy has also been prepared for the development. The strategy positions the project as “a transit-oriented development of state significance at the gateway to Newcastle’s city centre” and outlines a series of integrated artworks responding to Newcastle’s industrial and transport heritage.</p>

<p>Creative Road’s curatorial framework for the project, titled Unveil, draws on “stratified surfaces, carved volumes, and light-filled apertures” while referencing Newcastle’s transformation from an industrial city into a contemporary education and technology hub.</p>

<p><img alt="First look: Urban Property Group unveils Newcastle’s next supertower at Wickham interchange" data-entity-type="file" data-entity-uuid="77a882bb-14b1-4d28-99ff-9438e39508c0" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/wickham%20site.png?VersionId=cevgo_vN0eKPK78P8YcEu3mKPLkpFqE7" /></p>

<p>The proposal is being advanced through the NSW Housing Delivery Authority pathway after being declared State Significant Development in June 2025. The accompanying scoping report states the development aims to “maximise the site’s proximity to the Newcastle Interchange by delivering transit-oriented development” while increasing housing supply and affordable housing provision within the Newcastle LGA.</p>

<p>Urban Property Group’s plans align with the long-term strategic vision established under the Wickham Master Plan, which identified the interchange precinct as suitable for substantial uplift in height and density. The current proposal would significantly intensify that vision, positioning the tower among the tallest developments proposed for Newcastle.</p>

<p>The site sits immediately north of the Newcastle Interchange, bounded by Dangar Street, Hannell Street, and Charles Street. It is surrounded by a rapidly growing cluster of residential towers and mixed-use projects that have emerged following the completion of the light rail and transport interchange.</p>


First look: Urban Property Group unveils Newcastle’s latest tower at Wickham interchange

<p>Bottega House has completed settlement of a landmark riverfront site in Macquarie Street, St Lucia, representing its first major Brisbane development.&nbsp;</p>

<p>Positioned on the banks of the Brisbane River, the <a href="https://www.apartments.com.au/new-apartments/180-macquarie-street-st-lucia-qld-4067">premium site at 180 Macquarie Street</a> features uninterrupted river frontage in one of Brisbane’s most tightly held residential precincts.&nbsp;</p>

<p>The proposed development, currently under assessment with Brisbane City Council, has been designed by <a href="https://www.apartments.com.au/architects/plus-studio">Plus Studio</a> with interiors by <a href="https://www.apartments.com.au/interior-designers/mim-design">Mim Design</a> and will deliver a boutique collection of premium residences positioned specifically for owner occupiers and downsizers.&nbsp;</p>

<p>The residences are set to redefine luxury apartment living in the area, with a focus on architectural quality, refined finishes, landscape integration and elevated amenities including curated wellness facilities, resort-style pools and recreation spaces rarely seen in the local market.&nbsp;</p>

<p>Exclusive sales for the project will be led by Keenan &amp; Byrne, ahead of an anticipated launch later this year.&nbsp;</p>

<p>Bottega House Managing Director Nick Malloch said the project reflects the group’s ambition to deliver a highly curated residential offering within one of Brisbane’s most tightly held precincts.&nbsp;</p>

<p>“This is an incredibly rare riverfront opportunity and one we have approached with a long-term perspective,” Malloch said.&nbsp;</p>

<p>“Our vision from the outset was to create a boutique collection of residences that feel more like private homes than traditional apartments, with generous proportions, refined finishes and exceptional amenity throughout."</p>

<p>Malloch says there is a&nbsp;lack of premium owner-occupier stock of this quality in the market, particularly for downsizers wanting space, privacy and a true lifestyle offering without compromise.&nbsp;</p>

<p>"Demand is expected to be strong given the scarcity of premium riverfront opportunities of this nature within Brisbane’s inner-west."&nbsp;</p>


Bottega House secures landmark riverfront site in St Lucia 

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<p data-end="157" data-start="0">The arrival of the first piling rig officially marks the commencement of construction at SIERA’s new beachside apartment development, Exhale, in Northcliffe.</p>

<p data-end="459" data-start="159"><a href="https://www.apartments.com.au/new-apartments/exhale-surfers-paradise-8-enderley-avenue-surfers-paradise-qld-4217">Exhale</a>, a glass-encased tower featuring 54 large-scale apartments at 8 Enderley Avenue, is SIERA’s third Gold Coast development. It follows the recently completed PIPIS Bilinga beachfront project, which achieved suburb-record prices, and the soon-to-be-completed Chevron Island development, Tapestry.</p>

<p data-end="459" data-start="159">[smartcode_project:default project_id=112661 project_image_fid=359603]</p>

<p data-end="651" data-start="461"><a href="https://www.apartments.com.au/developers/siera">SIERA</a> Founder and Managing Director Brent Thompson said the arrival of the piling rig represented a significant milestone for the development, which is scheduled for completion in late 2028.</p>

<p data-end="950" data-start="653">Over the next month, around 260 piles are expected to be installed as work progresses on the basement structure. The building is anticipated to rise above ground level early next year, before unveiling its sculptural glass curtain wall, developed in collaboration with specialist façade engineers.</p>

<p data-end="1081" data-start="952">“The façade was designed to maximise panoramic coastal views while creating a distinctive architectural identity,” Thompson said.</p>

<p data-end="1081" data-start="952">[smartcode_project:default project_id=112661 project_image_fid=355935]</p>

<p data-end="1307" data-start="1083">Designed by BDA Architecture, Exhale will comprise just 54 two- and three-bedroom residences across 26 levels, a level of low-density living rarely delivered in this beachside pocket between Surfers Paradise and Broadbeach.</p>

<p data-end="1522" data-start="1309">The project has been conceived as a resident-only building, with no short-stay accommodation permitted. SIERA says the model is intended to appeal to long-term owner-occupiers rather than transient holiday demand.</p>

<p data-end="1522" data-start="1309">[smartcode_project:default project_id=112661 project_image_fid=361052]</p>

<p data-end="1714" data-start="1524">Residences have been designed with large-format layouts and expansive glazing, with most apartments featuring more than 30 metres of glass frontage to maximise natural light and ocean views.</p>

<p data-end="1945" data-start="1716">The amenity offering spans two levels and centres on wellness and lifestyle, including a heated magnesium pool, sauna, yoga and Pilates studio, gymnasium, private dining facilities, cinema lounge, and dedicated surfcraft storage.</p>

<p data-end="1945" data-start="1716">[smartcode_project:default project_id=112661 project_image_fid=359607]</p>

<p data-end="2220" data-is-last-node="" data-is-only-node="" data-start="1947">More than half of the apartments have already sold. SIERA has also opened a sales gallery for Exhale at its Chevron Island commercial premises, near its Tapestry tower and the site of its second Chevron Island apartment development, which is slated to launch in early 2027.</p>
</section>
</section>

<p>[smartcode_project_cta:default project_id=112661]</p>


SIERA kicks off construction at Northcliffe tower Exhale

<p data-end="320" data-start="79">Local Little Bay residents, along with buyers from premium postcodes across Sydney’s affluent Eastern Suburbs, have dominated purchases in developer-builder Urban Property Group’s first Eastern Suburbs apartment development, <a href="https://www.apartments.com.au/new-apartments/este-little-bay-jennifer-street-little-bay-nsw-2036">ESTE Little Bay</a>.</p>

<p data-end="638" data-start="322">The $250 million coastal project, one of the first new developments in the area in several years, has proven particularly popular with downsizers, especially those from Coogee and Bondi. One Double Bay downsizer paid $4.7 million for a four-bedroom penthouse, setting a new local apartment price record in the process.</p>

<p data-end="864" data-start="640">Buyers have been attracted to the combination of coastal tranquillity, premium design and amenity-rich neighbourhood living. The walkable village setting, along with proximity to three of Sydney’s leading golf courses, New South Wales Golf Club, St Michael’s Golf Club and The Coast Golf Club, has also been a key drawcard.</p>

<p>[smartcode_project:default project_id=112343 project_image_fid=352689]</p>

<p>Built across two low-rise buildings designed by <a href="https://www.apartments.com.au/architects/hill-thalis-architecture-urban-projects-pty-ltd">Hill Thalis</a> and set along a lush, landscaped green spine, designed by leading landscape architect <a href="https://www.apartments.com.au/landscape-architect/arcadia-landscape-architecture">Arcadia</a>, ESTE Little Bay offers a collection of one, two, three and four-bedroom residences with interiors by Richards Stanisich.</p>

<p><a href="https://www.apartments.com.au/developers/urban-property-group">Urban Property Group</a> Sales Director, Tom McIvor said the response to ESTE has been "nothing short of extraordinary."</p>

<p>“Buyers have been quick to recognise ESTE as a rare opportunity to invest in a coastal sanctuary that offers both seclusion and connectivity to the heart of Sydney,” McIvor said.</p>

<p>[smartcode_project:default project_id=112343 project_image_fid=352687]</p>

<p><a href="https://www.apartments.com.au/project-marketer/srm-residential">SRM Residential</a> Senior Director, <a href="https://www.apartments.com.au/project-marketer/srm-residential">Clayton Ross</a> said the local market has responded incredibly well, driven by ESTE’s exceptional location and the rarity it offers.</p>

<p>“We’ve seen strong interest from a variety of buyer groups, all of whom are drawn to the exclusivity and quality of the build and construction by the 4.5-star iCIRT-rated builder / developer, Urban Property Group. There’s truly nothing else like it along Sydney’s coastline.”</p>

<p>[smartcode_project:default project_id=112343 project_image_fid=352690]</p>

<p>The project also includes robust buyer protections, including Resilience Insurance’s Latent Defects Insurance, providing 10 years of structural cover, and an independent iCIRT-rating of the developer.</p>

<p>“The iCIRT-rating adds another layer of confidence,” Ross added. “Buyers see it as a safeguard for their investment and their lifestyle.” A highlight of ESTE’s offering is its exclusive wellness amenities, including a heated rooftop infinity pool and outdoor heated spa, a state-of-the-art Technogym fitness centre, and a sauna.</p>

<p><a href="https://www.apartments.com.au/new-apartments/este-little-bay-jennifer-street-little-bay-nsw-2036">ESTE Little Bay</a> is topped out and is on track to complete towards the end of 2026, with residents moving in before Christmas.</p>

<p>[smartcode_project_cta:default project_id=112343]</p>


Eastern Suburbs buyers snap up ESTE Little Bay apartments

Residential Sales

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<p>GUEST OBSERVER</p>
<p>Across house sales over the past 12 months, Tasmania recorded the highest proportion of stock turning over with 5.6% of all houses in the state selling. Conversely, Western Australia saw the lowest proportion of turnover with just 4.0% of all houses selling over the past year. </p>
<p>The current lower volume of housing stock turnover highlights why caution should be taken when interpreting median sale prices. </p>
<p>With such a small fraction of housing actually transacting over a given period, median prices can be biased. Furthermore, median prices may not be reflective of the whole market. When making a comparison between periods they may compare two very different bundles of housing types and quality.</p>
<p><a href="https://www.propertyobserver.com.au/images/2017/08/24/Screen%20Shot%202017-08-24%20at%2011.17.14%20AM.png" target="_blank">Click to enlarge</a></p>
<p><img src="https://www.urban.com.au/images/2017/08/24/Screen%20Shot%202017-08-24%20at%2011.17.14%20AM.png" alt=""></p>
<p>Concerned about housing stock levels, REINSW President John Cunningham said, “The results signal warning bells for the housing industry. It shows just how little has been transacted over the past year.”</p>
<p>“We know from a variety of property data sources that stock levels are steadily declining and a key reason why the affordability issue presents a bigger picture problem, particularly for Sydney and Melbourne.</p>
<p>“When we have stock on market, it keeps the property market competitive and in balance. Without stock we see less vibrancy and activity across the market and much more buyer competition taking place as opposed to activity between properties.” Ultimately, he said, “the knock-on effect damages the supply and demand chain.”</p>
<p>Lower housing turnover is being influenced by a variety of factors. “Advertised stock levels remain low across those cities where capital gain conditions are strong. Additionally, high transactional costs, which are based on a percentage of the selling/purchasing price, have become a larger disincentive across those markets where values have shown a material rise.”</p>
<p>Highlighted in the adjacent tables, it shows the five suburbs in each state which have seen the greatest turnover of houses over the past year. Only those suburbs that have at least 500 houses have been included on the list.</p>
<p>Zuccoli in Darwin had the highest proportion of stock turning-over across the country with 38.5% of all houses in the suburb selling over the past year. Clyde North in Melbourne had the second- highest level of turnover with 17.6% of all houses in the suburb selling over the past year.</p>
<p><a href="https://www.propertyobserver.com.au/images/2017/08/24/Screen%20Shot%202017-08-24%20at%2011.18.58%20AM.png" target="_blank">Click to enlarge</a></p>
<p><img src="https://www.urban.com.au/images/2017/08/24/Screen%20Shot%202017-08-24%20at%2011.18.58%20AM.png" alt=""></p>
<p>While the data shows the suburbs with the greatest turnover of houses, each of the suburbs listed have seen substantially less than half of all houses selling.</p>
<p>Another characteristic of note is that most of the suburbs shown are in areas where there is, or has been over recent years, a substantial injection of new housing stock; average hold period data which shows that in new housing estate areas housing stock tends to turnover with greater regularity.</p>
<p>Overall, housing turnover in any given year reflects only a small proportion of the total housing stock. It further highlights that taxes on transactions such as stamp duty are heavily reliant on collection from only a small pool of overall housing stock.  </p>
<p><span>Cameron Kusher is research analyst for CoreLogic. You can contact him </span><a href="https://blog.corelogic.com.au/about/" target="_blank">here</a><span>.</span></p>
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ckusher-ujnxiKuFQs

Housing turnover remains low despite strong selling conditions in Sydney & Melbourne: Cameron Kusher

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<p>Indicative of the magnitude of the profits realised from property over the June 2017 quarter was property resales. Combined, resales earned sellers $18.2 billion in gross profits with the median profit recorded at $195,000. On the downside, gross resale losses totalled $469.6 million with the median loss recorded at $35,000.</p>
<p>The latest CoreLogic Pain &amp; Gain June 2017 quarter report – www.corelogic.com.au/paingain (a national profit and loss analysis of property resales over the June 2017 quarter) showed that 89.8% of dwellings which resold over the period did so for more than their purchase price; a 0.3% increase from the March 2017 quarter result of 89.5%. Of the property types to resell over the period, houses scored top billing with profit gains of 92.1%, while unit resales achieved an 87.5% gain.</p>
<p>Owner occupiers were the biggest winners in the property resale stakes with overall profits estimated at 92.3%. Investors resales earned significantly less and recorded 88.1%; Sydney was the only major region of the country in where investors were more likely to resell at a profit than owner occupiers.</p>
<p>Across the combined capital cities, a significant gap in the proportion of profit-making resales was recorded by owner occupiers and investors in a number of cities; 93.7% of owner occupiers and 90.3% of investors resold their properties for a profit over the June 2017 quarter.</p>
<h3>Proportion of total resales at a loss/gain,<br>houses vs. units, Jun 2017 quarter<br> </h3>
<p><img src="https://www.corelogic.com.au/sites/default/files/styles/article_image_570w_/public/2017-10/2017-10-06-painandgain.png" alt="2017-10-06--painandgain" width="570" height="404"></p>
<p> <br>CoreLogic research analyst Cameron Kusher said, “Investors were 4.8 times as likely to resell at a loss as owner occupiers in Melbourne, in Brisbane the figure was 2.8 times and in Canberra the figure was 3.5 times.” </p>
<p>Regional area resales also enjoyed a win. For the combined regional markets, 90.0% of owner occupiers and 83.7% of investors resold their properties for a profit over the June 2017 quarter.  A greater proportion of owner occupiers continued to resell at a profit over investors. However, the same extreme differences between the vendor types as seen across some of the capital cities was not seen in regional markets. <br> <br>Mr Kusher said, “For owner occupiers, the results show the benefits of selling in a buoyant market.  In a falling market, owner occupiers may be more prepared to sell at a loss if they are purchasing their next home at an equivalent or greater discount.  Because of taxation rules, investors may be more prepared to incur a loss because they, unlike owner occupiers, can offset those loses against future capital gains.”   </p>
<p>“Should home values fall in the future, investors, which have been increasingly active in the housing market, may be more inclined to sell at a loss and offset those losses which in turn could result in much more supply becoming available for purchase at a time in which demand for housing falls because values are declining.”  </p>
<p>Regions showing low profit-making resales continue to be headed by those linked closest to the mining and resources sector. <br>   <br>Mr Kusher said “While the June 2017 quarter results show a reduction in the proportion of profit-making sales in some of these regions, home owners seem willing to sell but there remains little demand to purchase in these regions which is resulting in a high proportion of vendors materialising losses. The regions with the lowest proportion of resales at a loss makes for interesting reading.  <br>  <br>“The Sydney and Melbourne housing markets have been powerhouses over recent years however, regions outside but adjacent to Sydney are seeing a lower proportion of resales at a loss.  Similarly in Victoria, Melbourne continues to see relatively few resales at a loss however, the proportion of loss-making resales is actually lower in both Geelong and Bendigo.”</p>
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Property resale winners outstrip the losers

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<p class="Body">We have valuation firm Herron Todd White to thank for this quite startling revelation earlier in the week: “Signs of slowing have emerged in Sydney property markets.”</p>
<p class="Body">Were it not for the ground-breaking analysis and cutting-edge research of HTW, no one would have noticed that the Sydney market has been fading.<span style="line-height: 1.3em;"> </span></p>
<p class="Body">The marked decrease in sales volumes since the start of the year would have passed us by.</p>
<p class="Body">The stark decline in auction clearance rates over several months would have gone unnoticed.</p>
<p class="Body">The significance of the steady increase in stock on the market would have been lost of all but the most brilliant among us.<span style="line-height: 1.3em;"> </span></p>
<p class="Body">And the wind-down in the pace of price growth would have been quite meaningless.</p>
<p class="Body">Fortunately, HTW to the rescue, publishing a report that contains zingers like: “There are signs that the market may be cooling.”</p>
<p class="Body">Good grief. What were they thinking? Were they competing for first prize in a competition for under-statement of the year? Or was it the time-honoured tradition among the valuation profession of being unwilling to say anything meaningful for fear of being relevant?<span style="line-height: 1.3em;"> </span></p>
<p class="Body">There are signs that the market may be cooling? Is there seriously some doubt that the Sydney market is in wind-down?<span style="line-height: 1.3em;"> </span></p>
<p class="Body">This is sadly symptomatic of the absence of expert analysis in the residential property industry.</p>
<p class="Body">We had another example in a speech last week by Reserve Bank assistant governor Malcolm Edey, in which he made the most common mistake in real estate “analysis”. This is the theory that says that if Event A coincided with Event B, therefore Event A must have caused Event B.</p>
<p class="Body">It’s irrelevant that there are five or six other events that also were aligned with Event B - Event A has had the most publicity, so Event A gets the prize.</p>
<p class="Body">So APRA made some announcements and then signs emerged, a la HTW’s rip-snorting expose, of a cooling in the market, therefore APRA must have caused the de-heating.<span style="line-height: 1.3em;"> </span></p>
<p class="Body">Obviously.</p>
<p class="Body">This overlooks the reality that the Sydney market peaked and started its gradual wind-down long before APRA had its self-indulgent brain-explosion.</p>
<p class="Body">The Sydney market peaked in the December Quarter last year. Sales activity dropped in the March Quarter, dropped again in the June Quarter and continued its steady dissipation in the September Quarter.</p>
<p class="Body">Little by little, that has been reflected in other data.<span style="line-height: 1.3em;"> </span></p>
<p class="Body">Clearance rates are now below 60% for the first time in three years, following a pattern of decline stretching back months.</p>
<p class="Body">The latest quarterly price data, always a long way behind the real game, indicates Sydney growth has fallen back to levels on a par with Adelaide and Brisbane.</p>
<p class="Body"> <span style="line-height: 1.3em;">But Edey, as a boffin who gets no closer to the coal face than his computer screen, sees only “tentative evidence that sentiment may now be turning”.</span></p>
<p class="Body"><span style="line-height: 1.3em;"> I fully agree with the growing list of pundits calling the end to Sydney’s boom. I’ve been writing about it for the past 5-6 months.</span></p>
<p class="Body"><span style="line-height: 1.3em;"><em>Terry Ryder is the founder of <a href="https://www.hotspotting.com.au/" target="_blank">hotspotting.com.au</a>. You can <a href="https://mailto:ryder@hotspotting.com.au" target="_blank">email him</a> or follow him on <a href="https://twitter.com/hotspotting" target="_blank">Twitter.</a></em></span></p>
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Sydney market wound down before APRA's brain-explosion: Terry Ryder

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<p>Success in real estate belongs to the independent thinkers. And that means the select few.</p>
<p>The most predictable market intelligence of the past few weeks is that consumer sentiment about real estate has weakened.</p>
<p>Given the herd mentality in Australian real estate, and the absence of independent thought and action, I would expect sentiment to mirror media reporting trends. If media keeps reporting that “the Australian property boom” is over, I would expect a survey of public sentiment to reflect that.</p>
<p>And, lately, it has. According to the Westpac-Melbourne Institute Index of Consumer Sentiment, public opinion about whether it’s a good time to buy, and about price expectations, has weakened. This apparent dissipation of confidence has coincided with mainstream media deciding that the new core storyline is that the so-called national property boom is over.</p>
<p>What they really mean is that the Sydney boom is over and that is reflected in the generalised national figures much beloved by lazy journalists.</p>
<p>This new and recurrent theme in mainstream media is now being mirrored in responses to surveys about real estate.</p>
<p>It tells us that the average citizen struggles with independent thought. Most are pack animals and more likely to take action because everyone else is than because it makes sense. </p>
<p>Sometimes it feels like all Australians are connected to a central brain – and not a particularly smart one, either.</p>
<p>Another recent poll that fits this theme is the NAB’s quarterly Australian Residential Property Survey. The generalised results are that sentiment has weakened and people expect price growth to be less spectacular than the past couple of years.</p>
<p>Significant? Not at all. It’s people parroting what they read in newspapers. Will those expectations be marched by outcomes? No it will not - growth won’t stop, but the focus of growth will switch from Sydney to other areas.</p>
<p>While media focused on this downturn in overall generalised simplified public expectations, without segmenting for local differences of which there are many, there are many other things in the NAB quarterly report that are far more significant. </p>
<p>These are matters of fact, rather than impressions, expectations or predictions.</p>
<p>The NAB report is one of the few that realistically quantifies buying activity by first-timers. It finds that this market segment has increased recently - 26.2% of sales of established properties are made to first-time buyers, compared to 23.7% in the June Quarter. And 28.9% of sales of new properties are being made to first-time buyers.</p>
<p>The NAB report, unlike other less credible sources like the ABS, takes into account that not all first-timers buy homes. A rising number buy investment properties as a first purchase. According to NAB, 15.7% of established properties and 16.4% of new properties are being sold to first-timers as home-buyers. In addition, 10.5% of established properties and 12.5% of new properties are being sold to first-time buyers as investors.</p>
<p>They’re a big chunk of the market, but for many media outlets it’s an inconvenient truth because it contradicts the beloved storyline about the Great Australian Dream being dead because youngsters are priced out of the market.<span style="line-height: 1.3em;"> </span></p>
<p>As an aside, research from Mortgage Choice has found that most first-home buyers are comfortable with their mortgages, with almost two-thirds saying they could accommodate interest rate rises of at least two percentage points (a quarter of them could cope with a rise of four points).</p>
<p>The NAB report also provides a good snapshot of the activity of foreign investors. It shows that overall they remain quite insignificant as a share of the overall market. They are most active in buying new property, where they account for 16% of sales.</p>
<p>They are most prominent, and this tells its own tale, in the apartment market, especially in Victoria (which means inner-city Melbourne). In Victoria, foreign buyers account for almost a third of all new unit sales.<span style="line-height: 1.3em;"> </span></p>
<p>It confirms that developers are flooding inner-city apartment markets with new product because they believe they can sell any surplus stock overseas (which means Asia, especially China and Hong Kong). </p>
<p>Some developers are not bothering to market locally but heading directly overseas to sell their off-the-plan stock.</p>
<p>As time goes by and more projects flood this market, I would expect the foreign purchase component to rise. It’s a warning to Australian investors and home-buyers to steer clear.</p>
<p> </p>
<p><em>Terry Ryder is the founder of <a href="https://www.hotspotting.com.au/" target="_blank">hotspotting.com.au</a>. You can <a href="https://mailto:ryder@hotspotting.com.au" target="_blank">email him</a> or follow him on <a href="https://twitter.com/hotspotting" target="_blank">Twitter.</a></em></p>
<p> </p>
<p> </p>
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A warning to Australian investors and home buyers: Terry Ryder

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<p><span>The biggest challenge facing the Sydney residential property market is successfully calling the market accurately as against some who pluck figures out of the air with astonishing aplomb.</span></p>
<p><span>My preferred guide is the Australian Bureau of Statistics (ABS) capital city indexes for Established Houses which is released on a quarterly basis – it’s all about measuring price movements over time.</span></p>
<p><span>So I struggle when I see BIS Shrapnel noting that Sydney house prices have soared 45% since 2009 although I remain somewhat confused as we need to add further perspective by taking into account that house prices fell approximately 20 to 30% during the Global Financial Crisis (GFC). When we average out the fall in prices at say 25% then factor the recent run on the market prices then they have in real terms only climbed 20% which is a different story to the reported 45%.</span></p>
<p><span>Over this same period we have seen the emergence of an entirely new market namely the investment market which has been the stand – out performer, although it has very little to do with the established house prices. I’m sure if one looks hard enough you can find data that identifies Sydney house prices have jumped 45% although I don’t believe this is an accurate assessment – more a market price manipulation.</span></p>
<p><span>If we go back a decade for Sydney house prices we see most interesting market price machinations – from the September quarter 2004 through to June 2006 (eight quarters) the Established Houses in Sydney were in negative growth at around -5% per quarter. From September 2006 until June 2008 Sydney went into positive growth mode although not exceeding +10% growth with a quarter average of around 5% – then the GFC hit. From September 2008 through to June 2009 Sydney was back in negative growth with negative growth quarters of 6 and 7% the highest reported. Then in September 2009 until December 2010 house prices went back into positive growth where in March 2010 price growth peaked at 19%. Then in June 2011 through to June 2012 prices fell back into negative growth although not alarming with five quarters of bouncing from -1% to -3%. Then in September 2012 until June 2015 Sydney has been experiencing its bull run which has now extended to twelve consecutive quarters with the June quarter posting the highest quarterly growth of 21% – the previous high was 17% in September 2014. I might add that the month of September seems to be a catalyst month in property price movements both positive and negative.</span></p>
<p><span>We also need to recognise that in the December quarter of 2008 the Rudd Government moved the off – the – plan sales for new developments from 50% to 100%, so this has been a significant driver in the investor property market. Sydney has added approximately 20,000 new apartment developments which is unprecedented by modern day property data and this has been strongly assisted by the record low cash rate of 2% that will probably go lower in 2016.</span></p>
<p><span>The big question that remains for the best part unanswered is just how many of the new 20,000 apartments will have their purchasers default as APRA has increased the loan value ratios and the much speculated Asian buyer defaults given the massive correction in the Chinese stock market. It’s no secret that many banks and developers have these developments on a red alert for these most obvious reasons.</span></p>
<p><span>Having said that we need to clearly identify that these are investors and should not be compared to the traditional housing market. The off – the – plan prices in Sydney apartment blocks has gone off the Richter scale so if there is a price correction there this would then have minimal effect on the established home prices although it would slow the market down as a result.</span></p>
<p><span>We just need to balance the debate – over the past 44 quarters for the percentage change in median values for established houses in Sydney 17 quarters have been in negative growth and 27 quarters in positive growth. We also need to look at the cash rate which was 3.00% in April 2013 and fell to 2.75% in May 2013 and has been stuck on 2.00% since May 2015.</span></p>
<p><span>The United States has been sitting on their record low cash rate for a decade now so it appears that record low cash rates is the new norm in global economies.</span></p>
<p><span>There is no need to panic about property prices for the established homes although the investor market will make for fascinating viewing over the next few years.</span></p>
<p><span>I also can’t recall ever seeing the established house market with record low numbers of properties on the market either.</span></p>
<h5>MOSMAN – 2088</h5>
<p>• Number of houses on the market this time last year – 82</p>
<p>• Number of houses on the market last week – 48</p>
<p>• Number of houses on the market this week – 49</p>
<p>• Number of apartments on the market this time last year – 50</p>
<p>• Number of apartments on the market last week – 60</p>
<p>• Number of apartments on the market this week – 60</p>
<h5>CREMORNE – 2090</h5>
<p>• Number of houses on the market this time last year – 14</p>
<p>• Number of houses on the market last week – 7</p>
<p>• Number of houses on the market this week – 9</p>
<p>• Number of apartments on the market this time last year – 22</p>
<p>• Number of apartments on the market last week – 23</p>
<p>• Number of apartments on the market this week – 23</p>
<h5>NEUTRAL BAY – 2089</h5>
<p>• Number of houses on the market this time last year – 5</p>
<p>• Number of houses on the market last week – 9</p>
<p>•Number of houses on the market this week – 9</p>
<p>• Number of apartments on the market this time last year– 51</p>
<p>• Number of apartments on the market last week – 21</p>
<p>• Number of apartments on the market this week – 23</p>
<p><em><span>ROBERT SIMEON</span> is a director of </em><em><a href="https://www.rwm.com.au/" target="_blank" title="RWM" rel="nofollow">Richardson Wrench Mosman and Neutral Bay</a> </em><em>and has been selling residential real estate in Sydney since 1985. <br>He has also been writing real estate blog </em><em><a href="https://www.rwm.com.au/news/" target="_blank" title="Virtual Realty News" rel="nofollow">Virtual Realty News</a> </em><em>since 2000. </em></p>
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How to manipulate property market machinations: Robert Simeon

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<p><span style="line-height: 1.3em;">After we find a development site for our client, one of the most important processes is to negotiate not only the purchase price, but the </span><em style="line-height: 1.3em;">terms</em><span style="line-height: 1.3em;"> of the purchase.</span></p>
<p>Terms are the conditions you want to use when purchasing the property - and using terms can help put you in a powerful negotiating position.</p>
<p>As a property developer, one of the first terms we always negotiate is an extended settlement. Property Bloom wants to ‘buy’ as much time as possible to get as much done before our client settles on the land. Once settlement takes place holding costs come into play in the way of interest payments on their loan. </p>
<p>We will often achieve a twelve week settlement and permission from the vendor to lodge a DA during the settlement period.  So after exchange, we swing into action and order a contour survey, within a few days this is with our builder and they are working on plans and the Development Application (DA) preparation. We can have a DA lodged with council within a few weeks of exchange and then we manage council as best we can to try and have the DA Consent before or as our client is settling on the land.</p>
<p>Another key term is a low deposit, for the very same reason as a long settlement, to minimize holding costs.  Most sales contracts will ask for a ten percent deposit, we have been able to achieve a five thousand or even a one thousand dollar deposit.</p>
<p> A quick calculation based on purchasing a development site say at $250,000 and paying a ten percent deposit or $25,000 will cost $146 a month in interest over a three month settlement period based on 5.5% interest rate. Yet a $1,000 deposit over the same period and interest rate will cost just $4.58 a month so we can save about $424 over the settlement period – every little bit helps. You can also save on stamp duty if you apply for the NSW Government New Home Grant which offers a $5,000 to offset stamp duty if buying land to build on or a brand new or off the plan property, check it out:  <a href="https://www.osr.nsw.gov.au/grants/nhg/about">https://www.osr.nsw.gov.au/grants/nhg/about</a></p>
<p>Another term Property Bloom usually throws into the negotiation process is to waive the Cooling Off period. When you buy a residential property in NSW, there is a 5 business-day cooling-off period after you exchange contracts. During this period, you may get out of the contract as long as you give a written notice. A cooling-off period does not apply if you buy a property at auction or exchange contracts on the same day as the auction after it is passed in.</p>
<p>However, you can waive the cooling-off period by giving the vendor a ‘66W certificate’. This is a certificate that meets the requirements of section 66W of the Conveyancing Act 1919. The certificate needs to be signed by your solicitor or conveyancer. It is also possible to reduce or extend the cooling-off period by written agreement with the vendor.<span style="line-height: 1.3em;"> </span></p>
<p>By the time our client is ready to exchange, we have done all our checks and research and our client has an unconditional loan approval, so there is really is no reason to ‘cool off’ as our client has committed to the project weeks before. To waive the cooling off period adds weight to your offer and gives the vendor piece of mind that there won’t be a last minute change of heart.</p>
<p>We will always make offers subject to pest and building inspections (if there is a house on the land) and to conditional loan approval (which our clients have up to a level even before we make an offer).</p>
<p>Another term we may use is to release the deposit to the vendor once exchange has taken place. We usually save this one as a final tool to leverage the sale depending on the vendor’s situation. We will gauge this from the selling agent.</p>
<p>You can also offer the vendor two or three different purchase prices at the same time - each with different terms.  We may offer a higher price but with a longer settlement period and ask for access to the property during the settlement period to start renovations.  We’ll include a lower offer but with a fast settlement – as long as we are sure that our client does have fast access to finance. This gives the vendor options or choices which empowers them. </p>
<p>The vendor may not quite be ready to move out of their home so you can offer them a rent free period or reduced market rent to sweeten the deal.</p>
<p>Maybe there is a lot of rubbish lying around the property and if your plan is to renovate or demolish the house, you can tell them that you’ll remove the rubbish at your cost, anything like this that makes their life easier and the sale process quicker will help you so be creative and think about how you can meet the needs of the vendor.</p>
<p>After the offer is accepted then you can also negotiate on the terms in the Contract of Sale. Many of the terms in the sales contract will be standard, which means that they’ve been in use for a long time and are fair to both seller and buyer. Your solicitor will check the clauses of the contract to make sure they do suit you and if not, they will ask for changes to be made.</p>
<p>In order to cut the best deal on your property purchase, be creative with your terms and if you show sympathy to the vendor then this may give you the edge over other buyers.  </p>
<p><em>Jo Chivers is chief executive officer of property development project managers <a href="https://www.propertybloom.com.au/about" target="_blank">Property Bloom</a>.</em></p>
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Turn up the terms: Jo Chivers

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<p>We look at the regions that have had at least 50 settled sales in both 2015 and 2016.</p>
<div>
<p>Each of the council areas that have recorded the greatest total value of sales over the past year have recorded a decline relative to a year ago.</p>
<p>The total value of transactions is an important figure to consider for real estate and mortgage professionals.  Because commission is typically calculated for real estate agents on the value of the sale and for mortgage providers based on the size of the loan, understanding where the value of transactions is greatest is valuable.  The following analysis looks at the value of sales across council areas; keep in mind that the size of the council region will have an impact.  We have only included regions that have had at least 50 settled sales in both 2015 and 2016.</p>
<h3>Council areas with the highest value of sales, 12 months to Aug 2016</h3>
<p><a href="/images/2016/11/30/2016-11-28--image1.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/11/30/2016-11-28--image1.jpg" alt="" width="641" height="430"></p>
<p>Brisbane has recorded the greatest total value of sales over the past year at $16.8 billion however, the value is -11.2 percent lower over the year. The first table shows the total value of sales over the past year and the previous year for each of the 20 council areas nationally with the greatest value of sales.  Each of the top 20 regions listed have seen fewer overall sales and a lower total value of sales relative to 2015.</p>
<p>The second table shows the council regions that have seen the greatest increase in the overall value of sales over the past year. Circular Head in Tasmania has seen a 91.6 percent increase in the value of sales over the past year.  Most of the regions listed have seen an increase in sales over the year, the exceptions have been Circular Head and Wakefield. This suggests that the increase in value has been more driven by an increase in values of properties rather than an increase in turnover.</p>
<h3>Council areas with the greatest increase in value of sales, 12 months to Aug 2016</h3>
<p><a href="/images/2016/11/30/2016-11-28--image2.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/11/30/2016-11-28--image2.jpg" alt="" width="650" height="460"></p>
<p>The final table highlights the council regions nationally that have recorded the greatest decline in the total value of sales over the past year.  Maranoa in Queensland has recorded then greatest decline in the total value of sales over the year, -48.1% lower.  In each of these regions except for Isaac in Queensland, the number of sales is lower over the year which is clearly contributing to the decline in value of sales.  A number of these regions are also linked to the mining and resources sector where home values have fallen substantially over recent years.  These factors are also contributing to the slide in the overall value of sales.</p>
<h3>Council areas with the greatest decline in value of sales, 12 months to Aug 2016</h3>
<p><a href="/images/2016/11/30/2016-11-28--image3.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/11/30/2016-11-28--image3.jpg" alt=""></p>
<p>With the turnover of housing stock reducing across the country and fewer homes available for sale the amount of commission is reducing. One strategy that will help to alleviate this reduction in the commission pool is for industry participants to target those areas where turnover is increasing. Mortgage professionals will need to look more at opportunities in the refinance space, in Sydney and Melbourne in particular, these opportunities should be sufficient given the significant rise in housing equity over recent years. </p>
<p>Of course, another strategy to protect revenue is to improve market share.  Many businesses tend to tighten the purse strings for marketing and business development, however a contracting market offers up good opportunities to expand market share and increase productivity.</p>
<p><em>Cameron Kusher is research analyst for CoreLogic. You can contact him <a href="https://blog.corelogic.com.au/about/">here</a>.</em></p>
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Brisbane property sales drop off: CoreLogic's Cameron Kusher

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<div>
<span style="line-height: 1.3em;">APRA </span><span style="line-height: 1.3em;">released</span><span style="line-height: 1.3em;"> its latest property exposures figures for the June 2015 quarter today, which confirmed an ongoing surge in new housing loans. </span>
</div>
<div><span> </span></div>
<div><span>As at June 2015 the total of residential term loans to households held by all institutions (ADIs) was $1.33 trillion. </span></div>
<div><span> </span></div>
<div><span>In total this represented an increase of +$31.8 billion (+2.4%) from the prior quarter, and a solid increase of +$97.1 billion (+7.9%) over the year to June.</span></div>
<div><span> </span></div>
<div><span>There were a total of 5.4 million loans outstanding, with an average balance of $243,000.</span></div>
<div><span> </span></div>
<div><span><strong><span style="text-decoration: underline;">Investment loans surging higher</span></strong></span></div>
<div><span> </span></div>
<div><span>Investment loans totalled $518.3 billion, an increase of +$17.7 billion (+3.5%) from the March quarter and massive +$81.1 billion (+18.6%) from one year ago.</span></div>
<div><span> </span></div>
<div><span>That's huge, and well ahead of the rate that the regulator would or should be comfortable with.</span></div>
<div><span> </span></div>
<div><span>Interestingly while loans held by the major banks increased by +7.5% over the past year to $1,076 billion, loans held by other domestic banks increased by a much faster +18.8% pace to $155 billion.</span></div>
<div><span> </span></div>
<div>The major banks still accounted for close to 80 per cent of the domestic new housing loan market, however, with the remainder of the market comprising other banks, credit unions and particularly building societies.</div>
<div><span> </span></div>
<div>
<span>It should be noted that there have been a few issues relating to the reclassification of loans between owner-occupied and investment loans, with material revisions (&gt;10%) pushed through for the September 2014 to March 2015 quarters relating to ANZ and National Australia Bank.</span><br><span><br></span><span>You can see the jump in the chart below. </span><br><span><br></span><span>This has had the impact of accentuating the rate of increase in investment loans while dampening the growth in owner-occupier loans. </span>
</div>
<div><span> </span></div>
<div><span>In any case the trend in <strong>total </strong>loans outstanding since March 2008 has been more than clear, with total residential term loan exposures captured by this data more than doubling over that time.</span></div>
<div><span> </span></div>
<div><span>This is at least partly because the investor segment of the market often opts to amass new debt rather than paying loan balances down, particularly because Australia has prevailing tax legislation which encourages this behaviour.</span></div>
<div><span> </span></div>
<div><a href="/images/2015/08/26/APRA1.jpg" target="_blank"><span>Click to enlarge</span></a></div>
<div><span> </span></div>
<div><span><img src="/images/2015/08/26/APRA1.jpg" alt=""></span></div>
<div> </div>
<div> </div>
<div>
<div>The data revealed that the overwhelming majority of new housing loans in the quarter at 89.3 per cent of new loans were of a loan to value ratio (LVR) of 90 per cent or lower. </div>
<br><div>As denoted by the pink area in the chart below there has been a surge in the number of borrowers using 20 to 40% deposits, now accounting for more than half of new housing loans in the last quarter.<br><br>This may imply that "cashed up" property owners with deep pools of equity are buying investment property at the expense of first time buyers who must save their deposits. </div>
<div> </div>
<div>More than one fifth of new loans in the quarter had a very low loan to value ratio of just 60% or lower.</div>
<div> </div>
<div><a href="/images/2015/08/26/APRA2.jpg" target="_blank">Click to enlarge</a></div>
<div> </div>
<div><img src="/images/2015/08/26/APRA2.jpg" alt=""></div>
<div> </div>
<div>
<div>Higher risk "low doc" loans continued to represent only a tiny fraction of the Australian mortgage market in the June quarter at 0.4 per cent.</div>
<div> </div>
<div><strong><span style="text-decoration: underline;">Market risks</span></strong></div>
<div> </div>
<div>With very few low doc loans written and the overwhelming majority of loans being written with deposits ranging from 10 to 40 per cent, where lies the risk?</div>
<div> </div>
<div>After all, it is hardly as though the market is highly leveraged in aggregate with aro<span>und <span>~</span>$1.4 trill</span>ion of debt sitting against a stonking $6 trillion residential housing market.</div>
<div> </div>
<div>For my money, in terms of the residential mortgage market the answer is that the risk lies in the very high percentage and concentration of interest only loans, whereby typically no repayments are made against the principal in the first five years. </div>
<div> </div>
<div>It is true that loans with offset facilities are continuing to flourish, but nevertheless a whopping 45.8% of new housing loans written in the June 2015 quarter were of the interest only variety.</div>
<div> </div>
<div>Although only 4% of new housing loans in the June quarter were written outside serviceability, it would not be a surprise to see APRA looking more closely at the elevated percentage of interest only loans with renewed interest.</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> </div>
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Investment loans power on: Pete Wargent

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<p><span style="line-height: 1.3em;">Last week was the busiest week for auctions for the year with 3,729 capital city auctions held. The final auction clearance rate was 60.1%.</span></p>
<p><a href="/images/2015/12/4/20151206-time-series.jpg" target="_blank"><span style="line-height: 1.3em;">Click to enlarge</span></a></p>
<p><span style="line-height: 1.3em;"><img src="/images/2015/12/4/20151206-time-series.jpg" alt="" width="679" height="283"></span></p>
<p> </p>
<p><a href="/images/2015/12/4/20151206-clearance-rate-table.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2015/12/4/20151206-clearance-rate-table.jpg" alt="" width="757" height="342"></p>
<p><span>Auction volumes this week are set to fall, however the auction markets will still be busy with CoreLogic RP Data currently tracking just over 3,300 auctions across the capitals. Over the 2015 year to date, there has been 7 weeks where over 3,000 auctions have been held across the capital cities. Last week’s final auction clearance rate was recorded at 60.1 %, with 3,388 results reported, showing that over 90 % of all auction results were captured. The capital city clearance rate for Spring was 65.5 %, compared to 68.0 % for Spring 2014.</span></p>
<p><span><strong>Sydney’s</strong> auction clearance rate last week fell to 56.2 % for the 9th consecutive week and show that Sydney’s clearance rate is now much lower than last year at 70.6 cent over the week. Despite the weaker result, there were still pockets in Sydney where the clearance rate maintained strength last week. Across the Eastern Suburbs, 73.7 % of reported results were successful, while Ryde (69.4 %), North Sydney and Hornsby (64.4 %) and Sutherland (63.6 %) each performed well above the city-wide bench mark. This week, Sydney is expecting to host 1,088 auctions, lower than both last week and last year (1,294).</span></p>
<p><span>Across <strong>Melbourne</strong> 1,670 auctions are scheduled this week, compared to 1,876 last week and 1,733 one year ago. Melbourne’s final auction clearance rate for last week was 65.9 %, the highest of any capital city. The best performing Melbourne sub-regions were Inner Melbourne and Outer East Melbourne, both of which recorded a clearance rate above the 70 % mark.</span></p>
<p><span>For <strong>Brisbane</strong>, last week’s clearance rate was 47.3 % and 210 auctions are scheduled for this week.</span></p>
<p><span><strong>Adelaide’s</strong> final auction clearance rate was 58.0 % last week, falling from 64.4 % the previous week. CoreLogic RP Data is currently expecting 137 auctions to be held across the city this week.</span></p>
<p><span>There are 85 <strong>Perth</strong> auctions scheduled this week, which will be the busiest week for the city so far this year. Perth’s clearance rate last week was 36 %, with 50 results reported and a total of 60 auctions held.</span></p>
<p><span>Across <strong>Canberra</strong>, 122 auctions will be held this week, compared to 98 last week and 87 last year. Canberra’s clearance rate was 50.6 % last week, the weakest result for the city since December last year.</span></p>
<p><span>Mount Waverley, Reservoir and Glen Waverley, all in Melbourne will each host 24 auctions this week, the most of any individual suburb nationally.</span></p>
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smiller-vwPjRHTkST

Auction volumes this week are set to fall: CoreLogic RP Data's Shana Miller

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<p>New home sales declined by 8.5 percent in October to their lowest level in two years.</p>
<p>Sales were down for both detached houses (-8.2 percent) and multi-units (-9.2 percent).</p>
<p>The drop was led by Victoria which saw a 20 percent decline in detached house sales.</p>
<p><a href="/images/2016/11/30/HIA.jpg" target="_blank"><span style="color: #333333; font-family: Tahoma, Helvetica, Arial, sans-serif; font-size: 12px;">Click to enlarge</span></a></p>
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<div class="separator"><span style="text-decoration: underline;"><em>Source: HIA</em></span></div>
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<div>New home sales are now 13 percent below their peak in April. </div>
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<div>The Housing Industry Association (HIA) sees this as consistent with its forecast of housing starts declining to 172,000 by 2018/19, driven by a substantial drop in apartments, which is fair enough.</div>
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<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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