<p>A wave of investment, renewal and precinct growth continues to shape the northern edge of Macquarie Park, where daily life is supported by a rare combination of university activity, corporate employment, major retail, and expansive green corridors. It’s this convergence of amenity and connectivity underpins the setting for <a href="https://www.apartments.com.au/developers/urban-property-group">Urban Property Group</a>’s <a href="https://www.apartments.com.au/new-apartments/la-vera-94-talavera-road-macquarie-park-nsw-2113">La Vera</a>, which has now topped out and is tracking toward completion in mid-2026.</p>

<p>Within this pocket of the precinct, residents move easily between the area’s key anchors. Macquarie Centre, home to more than 360 retailers, fresh food offerings, dining and entertainment, sits at the heart of local convenience and functions as a major transport interchange. The Metro, T1 rail line and extensive bus network place much of Sydney within quick reach, while surrounding arterial links support direct access to neighbouring districts.</p>

<p>[smartcode_project:default project_id=134951 project_image_fid=5829]</p>

<p>Green space remains a defining feature of the immediate environment. Lane Cove National Park stretches along the northern boundary of the precinct, offering bushland trails, cycling routes and quiet riverfront pockets. Shrimptons Creek and the campus grounds of Macquarie University extend these recreational networks, softening the urban setting and creating a daily connection to nature that informs the project’s architectural response.</p>

<p><a href="https://www.apartments.com.au/architects/cox-architecture">Cox Architecture</a> have shaped La Vera around these contrasts. The building’s northern elevation adopts an organic, curvilinear form that mirrors the natural topography of the national park. Three sculpted forms soften the tower’s profile and encourage a stronger transition between indoor living areas, balconies and the broader landscape.</p>

<p>[smartcode_project:default project_id=134951 project_image_fid=223737]</p>

<p>Cox Director Felipe Miranda says the building’s outlook played a central role in the design process.</p>

<p>“The vision for the project was to conceive a building that adopted an organic and curvilinear form to the northern portion that faces the Lane Cove National Park… The residents that reside in the northern portion of the building benefit by having beautifully crafted curved balconies that speak to the natural context and heighten the relationship of their internal living spaces to the external balconies,” Felipe Miranda of Cox Architecture said.</p>

<p>Toward the city-facing side, the design shifts to a more urban expression. A gridded facade and extensive glazing capture CBD views, creating a dual strategy that blends ecological outlooks with metropolitan orientation.</p>

<p>[smartcode_project:default project_id=134951 project_image_fid=5827]</p>

<p>La Vera delivers 169 residences across one- to four-bedroom layouts, reflecting the needs of young families, downsizers, first-home buyers and investors seeking long-term certainty within a high-amenity location. From the project, residents can walk to Macquarie University, Macquarie Hospital and nearby corporate offices, reach national park trails within minutes, and enjoy retail and dining without relying on a car.</p>

<p>The project is delivered by Urban Property Group, a 4.5-star iCIRT-rated developer-builder with more than three decades of experience. The company has become a leader in adopting 10-Year Latent Defects Insurance (LDI), first introduced on its Parq Bexley development and now embedded into its pipeline.</p>

<p>[smartcode_project:default project_id=134951 project_image_fid=223727]</p>

<p>La Vera is the first development in Macquarie Park approved to offer this 10-year LDI policy, adding another layer of protection for purchasers and reinforcing the transparency of the construction process.</p>

<p>Urban Property Group CEO Patrick Elias says this assurance has become increasingly important for buyers navigating the off-the-plan market.</p>

<p>“Consumers are a lot more weary and a lot more concerned in buying off the plan than they ever have been… Having LDI is a tool to portray the confidence that we have in our product, and a confidence we want buyers to share,” Urban Property Group CEO Patrick Elias said.</p>

<p>Urban Property Group's in-house construction team is forecasting a mid-2026 completion, with <a href="https://www.apartments.com.au/project-marketer/home789">HOME789</a> appointed as the project marketer.</p>

<p>[smartcode_project_cta:default project_id=134951]</p>


Staff Writer

La Vera delivers a nature-connected address within Macquarie Park’s core

<p><a href="https://www.apartments.com.au/buildings/aura-by-aqualand-north-sydney-168-walker-street-north-sydney-nsw-2060">AURA</a>&nbsp;doesn’t just rise over North Sydney, it redefines it. Now in its final release, <a href="https://www.apartments.com.au/developers/aqualand-australia">Aqualand</a>’s $1 billion architectural statement is not just complete, but already reshaping the way people live, connect and dine in this rapidly evolving harbourside CBD.</p>

<p>Positioned beside the new Victoria Cross Metro Station and boasting panoramic views across Sydney Harbour, Aura’s 386 residences crown a mixed-use precinct designed with unapologetic ambition. The curvaceous sandstone-inspired form by <a href="https://www.apartments.com.au/architects/woods-bagot">Woods Bagot</a>, paired with <a href="https://www.apartments.com.au/interior-designers/richards-stanisich">Richard Stanisich</a>’s understated interiors, sets a design tone that’s both monumental and intimate.</p>

<p>At its peak, literally, the two penthouses so spectacular they command their own names; La Davina and Il Magnate. The residents are spread across the&nbsp;entire top floor, offering what many consider the most refined residences ever built in North Sydney. Designed by Richard and Kirsten Stanisich, each four-bedroom home is meticulously crafted to evoke calm, space, and permanence.&nbsp;</p>

<p><iframe allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" allowfullscreen="" frameborder="0" height="315" referrerpolicy="strict-origin-when-cross-origin" src="https://www.youtube.com/embed/VB70993aG-I?si=adRBlXQliYmYvaSz" title="YouTube video player" width="560"></iframe></p>

<p>The kitchens are fully wrapped in natural stone, with integrated Gaggenau appliances, Sub-Zero fridges, concealed sculleries, and even a zip hydro tap delivering boiling, chilled and sparkling water on demand. A linear stone fireplace anchors the open-plan living space, dividing lounge and dining zones with quiet sophistication.&nbsp;</p>

<p>[smartcode_project:default project_id=30959 project_image_fid=292861]</p>

<p>The master suite, meanwhile, feels more like a private retreat, complete with a custom stone makeup vanity, walk-through dressing area, and spa-inspired ensuite with heated stone floors, a freestanding Villeroy &amp; Boch tub, and timber veneer joinery throughout.</p>

<p>Kirsten Stanisich, Director of Richards Stanisich, said the penthouses offer incredible scale reflective of a single residence.&nbsp;</p>

<p>“We sought inspiration for these remarkable residences from the classic top-floor Parisian apartment," Stanisich said.</p>

<p>"We looked at what made these French apartments so elegant and found it really came down to their scale. It was ultimately this generosity of space that we used for the AURA penthouses, where we’ve designed considered rooms with deep large-scale proportions."</p>

<p>[smartcode_project:default project_id=30959 project_image_fid=310337]</p>

<p>Everyday living at Aura feels no less elevated. A dedicated 24-hour concierge, Technogym fitness centre, sky dining terraces, and a resort-style pool serve a lifestyle designed to rival luxury hotels.</p>

<p>At street level, Aqualand’s own hospitality arm, Etymon Projects, curates a precinct of LA-style bistros, Japanese fine dining, and local wine bars, all seamlessly integrated into the building’s sculptural podium.</p>

<p>[smartcode_project:default project_id=30959 project_image_fid=310337]</p>

<p>This final chapter, aptly dubbed The Finale, is more than a sales phase, it’s an invitation to two of the most exclusive apartments ever to be built in North Sydney.</p>

<p>With limited residences remaining, buyers can access curated incentives including stamp duty rebates, rental guarantees, legal fee coverage, and even $20,000 towards dining within the precinct.</p>

<p>From generous one-bedders to The Icons, two singular penthouses priced well into prestige territory, Aura’s offerings reflect a scale and calibre rarely seen in urban Sydney. And with move-in now immediate, this is no longer a promise of future luxury. It’s happening.</p>

<p>[smartcode_project_cta:default project_id=30959]</p>


Aqualand unveils penthouse collection at AURA By Aqualand in North Sydney

<p data-end="350" data-start="236">There’s no sign of the development wave that began several years ago slowing along Old Burleigh Road.</p>

<p data-end="625" data-start="352">Around 10 new apartment developments are either underway or preparing to launch along the 800-metre strip stretching from the southern edge of Surfers Paradise towards the heart of Broadbeach, collectively adding just shy of 1,000 new apartments to the beachfront corridor.</p>

<p data-end="884" data-start="627">The latest plans propose a further 30 apartments to replace an original six-unit walk-up on a 658 sqm site at <a href="https://www.apartments.com.au/new-apartments/20a-old-burleigh-road-surfers-paradise-qld-4217">20A Old Burleigh Road</a>. The 14-storey building has been designed by Ferro Chow Architecture, which recently joined the Elevation Architecture Group.</p>

<p data-end="1031" data-start="886">The developer behind the project is Geoffrey Booth, whose Future Liv In has focused on delivering rental accommodation across regional Australia.</p>

<p><img alt="Old Burleigh Road" data-entity-type="file" data-entity-uuid="99d393e7-d404-43bc-80cb-6255c39b83d6" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-01-05%20at%2012.28.44%E2%80%AFPM.png?VersionId=ZFT8F3mOny4M4ut.kFF3woC9WH9oR5gT" /></p>

<p data-end="1469" data-start="1033">The Old Burleigh Road development will comprise 18 two-bedroom apartments, 10 three-bedroom apartments, and a single four-bedroom residence occupying the entirety of level 12. Above, the building will be crowned by a two-storey penthouse with its own private lift, several multi-purpose rooms, and two rooftop terraces — one featuring a puppy lawn and spa, the other offering a private swimming pool, sunset deck, and built-in barbecue.</p>

<p data-end="1676" data-start="1471">Resident amenities will be located on the second level and include a pool with adjoining spa, cabana, and pool deck, along with an indoor residents’ lounge featuring a bar and an alfresco barbecue kitchen.</p>

<p data-end="1885" data-start="1678">In the architectural statement submitted by Elevation Architecture, the project is referred to as “UMI”, which the firm says has been “inspired by the majestic hinterlands and shaped by the coastal climate”.</p>

<p data-end="2030" data-start="1887">“It is an exemplar of how community living can still feel at one with nature, breathable, and deeply connected in place,” the architects noted.</p>

<p data-end="2253" data-start="2032">They added that the site benefits from established building separation to adjoining towers, helping to maintain privacy, sunlight, and residential amenity, while still offering direct beach access within an urban setting.</p>

<p data-end="2537" data-start="2255">“Drawing inspiration from the Gold Coast hinterlands and the region’s natural landscape, the podium and tower detail highlights the contrasting elements of treetop green and cliff-face peach. The vibrant texture and materiality shaped by time has a richness in depth and character.”</p>

<p><img alt="Old Burleigh Road" data-entity-type="file" data-entity-uuid="b3d6c923-a0ab-4d74-86da-177313447e8e" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-01-05%20at%2012.28.38%E2%80%AFPM.png?VersionId=i2fygmoVQM6hWpbATTAW_yTitoMTrnI1" /></p>

<p data-end="2687" data-start="2539">Old Burleigh Road has become a hotspot for developers, with the three-tower Jewel development kickstarting a wave of projects up and down the strip when it was completed in 2020.</p>

<p data-end="2884" data-start="2689">Currently under construction and approaching completion is <a href="https://www.apartments.com.au/new-apartments/faro-broadbeach-123-old-burleigh-road-broadbeach-qld-4218">FARO Broadbeach</a> by 5Point and Bottega, 21 large-scale half- and full-floor apartments. 5Point is also behind the recently launched <a href="https://www.apartments.com.au/new-apartments/lumara-108-old-burleigh-road-broadbeach-qld-4218">Lumara</a>, another 37 apartments to add to the pipeline.</p>

<p data-end="3329" data-start="2886">Luxury builder GRAYA is progressing construction on <a href="https://www.apartments.com.au/new-apartments/enclave-by-graya-118-old-burleigh-road-broadbeach-qld-4218">Enclave</a>, its first Gold Coast tower, while Polycell remains the most active developer on the street. They are preparing to launch <a href="https://www.apartments.com.au/new-apartments/sandpiper-broadbeach-155-old-burleigh-road-broadbeach-qld-4218">Sandpiper</a>, a 50-storey redevelopment of the former Sandpiper Holiday Resort that will deliver around 200 apartments alongside extensive resident amenity. The group also has another 130-apartment project approved nearby, as does <a href="https://www.apartments.com.au/news/qld/dvb-approved-for-second-broadbeach-apartment-development">Dean Gallagher’s DVB Projects</a>.</p>


Joel Robinson

First look: Old Burleigh Road apartment development wave continues

<p data-end="255" data-start="117">Sunshine Coast developer Habitat Development Group continues to position itself as one of the region’s largest new apartment developers.</p>

<p data-end="598" data-start="262">Its latest project is in Maroochydore, where it is currently delivering <a href="https://www.apartments.com.au/new-apartments/the-millwell-2-millwell-road-east-maroochydore-qld-4558">The Millwell</a>. Adjacent to the new 53-hectare Maroochydore City Centre project, Habitat is planning a further 180 apartments on a 3,468 sqm site at <a href="https://www.apartments.com.au/new-apartments/132-136-aerodrome-road-maroochydore-qld-4558">132–136 Aerodrome Road</a>. The site was purchased with approval for a smaller 13-storey, 103-unit building.</p>

<p data-end="983" data-is-last-node="" data-start="605">Habitat will demolish the two existing retail centres, currently home to the Salvation Army Family Store and Neighbours Aid, and replace them with an 18-storey building featuring the significant rooftop amenities that have become a hallmark of Habitat developments in recent years. The rooftop will include both indoor and outdoor spaces, anchored by an infinity swimming pool.</p>

<p><img alt="Maroochydore" data-entity-type="file" data-entity-uuid="ad434d07-666b-4614-b33e-530ad6a2d261" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-01-05%20at%2010.12.33%E2%80%AFAM.png?VersionId=7pyLsPWKQuwv0us3_v.9DmbzEc2VZe9Z" /></p>

<p>There will be a mix of one- to four-bedroom apartments.</p>

<p>The Development Assessment Report, submitted to the Sunshine Coast Council, says the proposal&nbsp;is not speculative, but a response to both zoning intent and demonstrated housing need.</p>

<p data-end="931" data-start="563">“The proposed development represents an appropriate and logical intensification of the site, consistent with the planning framework and the intended urban outcomes for the locality.”</p>

<p data-end="1484" data-start="1120">Across the Sunshine Coast, councils are increasingly scrutinising not just height or yield, but whether new projects genuinely align with the long-term structure plans underpinning growth corridors. The&nbsp;ASTP Planning Report&nbsp;reinforces the approach, noting that the project has been shaped around site responsiveness rather than generic typology.</p>

<p data-end="1658" data-start="1486">“The development has been designed to respond to the physical constraints and opportunities of the site, while delivering a high-quality residential outcome that integrates with the existing and emerging urban context.”</p>

<p data-end="2275" data-start="1884"><img alt="Habitat" data-entity-type="file" data-entity-uuid="3a03fc54-4ca5-4868-88d0-eeced70604e2" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-01-05%20at%2010.12.28%E2%80%AFAM.png?VersionId=1pkK3lJrrZjkghTLBReM2zatcas4Nc4B" /></p>

<p data-end="379" data-start="125">In mid-2025, Habitat, a developer that also builds its own projects, commenced construction on The Millwell, located just over one kilometre from the new proposal. The Millwell will comprise more than 200 apartments across two eight-storey buildings.</p>

<p data-end="653" data-start="386">Habitat also has two projects on Lake Kawana in Birtinya: <a href="https://www.apartments.com.au/new-apartments/st-clair-birtinya-930-931-waterside-retreat-birtinya-qld-4575">St Clair</a>, a 200-unit, two-building development launched last year and set to welcome buyers this year; and Esperance, a 175-apartment project currently progressing through the development approval process.</p>


First look: Habitat continues to bolster Sunshine Coast apartment pipeline with Maroochydore development plans

<p data-end="475" data-start="307">John Camilleri, the breeder of legendary racehorse Winx, is set to deliver a landmark two-tower beachfront development that would redefine the Surfers Paradise skyline.</p>

<p data-end="693" data-start="477">Camilleri, who spent around $100 million acquiring development sites across the Gold Coast in 2025, has lodged plans for two new towers on the dress-circle stretch of Garfield Terrace, just two days before Christmas.</p>

<p data-end="893" data-start="695">In assembling the site, Camilleri's Celestino Developments has effectively acquired the 71 Garfield project by Iris Capital and AALTO by Weiya Holdings, creating an unrivalled <a href="https://www.apartments.com.au/new-apartments/63-79-garfield-terrace-surfers-paradise-qld-4217">4,000 sqm beachfront holding along Garfield Terrace</a>.</p>

<p data-end="1074" data-start="895">The proposal comprises two residential towers of 55 and 48 storeys, linked by a dramatic skybridge which will home “exclusive VIP and wellness amenities.”</p>

<p data-end="1326" data-start="1076">In total, the development would deliver 275 two-, three- and four-bedroom apartments across the two towers, rising above a shared landscaped podium that incorporates a central green space and a beachfront swimming pool stretching more than 90 metres.</p>

<p><img alt="DBI" data-entity-type="file" data-entity-uuid="097900f3-6bef-4919-b168-b08f2f762876" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202025-12-30%20at%209.37.58%E2%80%AFAM.png?VersionId=et0SpmcvaPPVrexI_zWi46BVFtZBxAzx" /></p>

<p data-end="1531" data-start="1328">Architecture firm DBI, in documents submitted to Gold Coast City Council, said the project at 63–79 Garfield Terrace would “establish a new benchmark for beachfront residential living on the Gold Coast.”</p>

<p>"The project occupies a rare, uninterrupted oceanfront site and has been shaped by a design philosophy that merges architectural elegance with environmental responsiveness and a carefully curated lifestyle experience. Together, the 48-storey North Tower and 55-storey South Tower form a distinctive twin-tower composition whose dynamic silhouette will make a significant contribution to the Surfers Paradise skyline."</p>

<p data-end="2074" data-start="1964">DBI said the architectural language draws inspiration from the fluidity and movement of the coastal landscape.</p>

<p>"Each tower is defined by organic, curving forms and continuous balcony ribbons that wrap the buildings, providing deep shading, enhancing environmental performance, and reinforcing the rhythmic, sculptural expression of the façade. These balcony forms also reduce the apparent mass of the towers while maintaining strong visual continuity from podium to summit. Sculpted reflective downturns run along the western spine of both towers, shifting and lifting as they extend upwards to frame service zones and open eastward to maximise ocean views."</p>

<p><img alt="Garfield" data-entity-type="file" data-entity-uuid="a2a00ce3-a0e9-45d6-b4b5-b7baed592ac5" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202025-12-30%20at%209.53.40%E2%80%AFAM.png?VersionId=DnruWV1dhLrtXOeElwekyd7vPq2gw55t" /></p>

<p data-end="2804" data-start="2627">The project’s most striking feature is the skybridge at level 45, which will house executive lounges, formal dining spaces, wellness facilities and panoramic ocean-facing views.</p>

<p data-end="2978" data-start="2806">“The skybridge enhances the identity of the development, promotes social interaction, and delivers a lifestyle experience not found elsewhere on the Gold Coast,” DBI added.</p>

<p data-end="3245" data-start="2980">The podium will host an extensive suite of recreational amenities, including resident lounges, private dining rooms, a large open green lawn, and the signature 90-metre pool stretching along the beachfront. The pool is divided into lap, lounge and children’s zones.</p>

<p data-end="3406" data-start="3247">The southern end of the podium will accommodate additional wellness facilities, including a gymnasium, plunge pools, treatment rooms and a dedicated yoga lawn.</p>

<p><img alt="Garfield" data-entity-type="file" data-entity-uuid="ee1b4f25-231f-4804-83b1-a573a1481962" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202025-12-30%20at%209.55.47%E2%80%AFAM.png?VersionId=zObzIA3D5w7EwqPsHjr2pKrA4vbB28zL" /></p>

<p data-end="3625" data-start="3408">There will be 127 apartments in the North Tower and 148 in the South Tower, including multiple penthouses, while the Enderley Avenue and Oceanway frontages will be activated by a series of food and beverage tenancies.</p>

<p data-end="3986" data-start="3627">Camilleri emerged as the most active site acquirer on the Gold Coast in 2025. He spent just over $30 million acquiring Pacific Point, a 10-level Surfers Paradise apartment block and an adjoining three-level duplex, from fellow racing identity and Aquis billionaire Tony Fung. Plans are now underway for a 93-apartment, 40-storey tower on the 1,682 sqm site.</p>

<p data-end="4229" data-start="3988">He also paid $53.65 million for the 1,500 sqm Garfield Terrace site previously marketed as AALTO by Weiya Holdings, before acquiring the adjoining parcel from hotel billionaire Sam Arnaout’s Iris Capital, the developer behind V&amp;A Broadbeach.</p>


First look exclusive: Billionaire Winx breeder’s bold two-tower Surfers Paradise play with 45th-storey skybridge

Rmbs

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<p>The performance of Australian residential mortgage-backed securities (RMBS) will weaken moderately in 2020, following some improvement in Q3 2019, but delinquencies will remain low overall, according to a new report from Moody's Investors Service.</p>
<p>Their report found tat Australia's muted economic environment, record levels of household debt and the conversion of interest-only mortgages into principal and interest loans will lead to a moderate increase in RMBS delinquency rates in 2020. However, mortgage borrowers are seeing some relief in the form of low interest rates and rising house prices, which should constrain the degree of deterioration.</p>
<p>The 30+ day delinquency rate for prime Australian RMBS decreased to 1.57% in September 2019 from 1.67% in June 2019.</p>
<p>Moody's has lowered its growth forecast for the Australian economy over recent months and now expects real GDP growth of 2.2% for 2020, down from an earlier forecast of 2.5%.</p>
<p>The forecast for 2020 is higher than the 2.0% recorded in 2019, but down considerably from 2.7% in 2018.</p>
<p>Alena Chen, Vice President, Moody’s said, in this economic environment, expect mortgage delinquencies to increase moderately, particularly given that high household debt - which amounts to almost 200% of annual gross disposable income - will leave households vulnerable to economic and housing market shocks."</p>
<p>"However, we expect most mortgage borrowers will be able to continue meeting mortgage repayments at Moody's forecast level of economic growth and unemployment, which means delinquencies will remain low overall," she stated.</p>
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j.ballantyne1990-6AQqhLzZaK

Australian RMBS will weaken moderately in 2020: Moody’s Investors Service

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<p>Australian RMBS delinquency rates, which rose slightly over the three months ended 31 March 2019, will continue to increase over coming quarters, according to the latest report from Moody's Analytics.</p>
<p>They believed arrears will rise because of high debt levels, the conversion of a large number of interest-only mortgages to principal and interest loans and declining house prices.</p>
<p>They suggested however that delinquency rates will only increase moderately, given stable GDP growth, low unemployment and recent interest rate cuts.</p>
<p>The 30+ day delinquency rate for prime Australian RMBS was 1.58% in March 2019, compared with 1.54% in December 2018 and 1.48% in March 2018.</p>
<p>For prime RMBS issued by major banks, the 30+ day delinquency rate was 1.75% in March 2019 compared with 1.72% in December 2018.</p>
<p>For regional banks, the delinquency rate was 1.65% in March 2019, unchanged from December 2018, while for prime RMBS issued by other authorised deposit-taking institutions, the delinquency rate was 0.54% in March 2019, compared with 0.50% in December 2018.</p>
<p>The 30+ day delinquency rate for non-conforming RMBS was 3.75% in March 2019, up from 3.23% in December 2018 and 3.05% in March 2018.</p>
<p>Alena Chen, Vice President of Moody’s said, "over coming quarters, we expect Australia's record-high household debt, which amounts to almost 200% of annual gross disposable income, will contribute to a moderate increase in delinquencies."</p>
<p>"Meanwhile, a large number of interest-only mortgages are due to convert to principal and interest loans by the end of 2020, which will cause some delinquencies over this period. Banks originated a significant volume of interest-only loans in 2014 and 2015," she said,</p>
<p>The five year interest-only period for these mortgages will end in 2019 and 2020.</p>
<p>When interest-only loans convert to principal and interest, borrowers have to make higher monthly repayments, which can lead to delinquencies.</p>
<p>Commonwealth Bank saw a rise in arrears in their <a href="/news/cba-arrears-rise-but-home-loan-book-continues-to-grow-slowly">March quarter results</a>.</p>
<p>Banks have already started trying to limit a large impact of moving mortgage holders from interest only to P&amp;I.</p>
<p>This time last year ANZ had 26 percent of their loan book made up of IO loans. They <a href="/expert-insights/finance/anzs-home-loan-portfolio-shows-big-drop-in-interest-only-borrowers">reduced that number to 18%</a> as of May.</p>
<p>NAB have an unhealthier <a href="/news/nab-housing-lending-revenue-continues-to-drop-and-shareholders-pay-the-price">26% of their loan book</a> given to interest-only loans.</p>
<p>Chen said Moody's expect house price declines to lead to a moderate increase in mortgage delinquencies over coming quarters."</p>
<p>"House prices in Australia declined by an average of 7.3% in the 12 months to 30 May 2019, while in Sydney and Melbourne, prices declined by an average of 10.7% and 9.9% respectively."</p>
<p>"We expect prices to continue to decline moderately over the remainder of 2019." she said.</p>
<p>Mortgage delinquencies will only increase moderately, while defaults and losses will remain low, given that continued GDP growth, low unemployment and recent interest rate cuts will support borrowers' ability to meet their mortgage repayments.</p>
<p>Moody's Investor Service forecast's real GDP growth of around 2.5% in both 2019 and 2020.</p>
<p>Australia's unemployment rate was 5.2% in April 2019 and they expect it will remain relatively stable at 5.5% by the end of 2019 and 2020.</p>
<p>In early June, the Reserve Bank of Australia lowered the cash rate by 0.25 percentage point, which prompted most lenders to lower their floating-rate mortgage interest rates.</p>
<p>To see which banks decided to pass on the full rate cut, <a href="/expert-insights/finance/what-are-the-latest-home-loan-cuts-and-whos-making-them">click here</a>.</p>
<p> </p>
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Australian RMBS delinquency rates to keep rising: Moody's

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<p>Moody's Investors Service says that the 30-plus day delinquency rate for prime Australian residential mortgage-backed securities (RMBS) increased in the fourth quarter of 2018.</p>
<p>It tips they will likely continue to rise moderately amid declining house prices, high levels of debt, and the conversion of interest-only mortgages to principle and interest loans. </p>
<p>The 30-plus day delinquency rate for prime RMBS increased to 1.58% in December 2018 from 1.49% in September 2018.  </p>
<p>The increase was driven in part by declining house prices, with house prices in Australia declining by 6.3% for the 12 months to February 2019, and by 10.4% and 9.1% in Sydney and Melbourne.  </p>
<p>Moody's expects prices will continue to decline moderately through 2019, while record-high household debt – at 191% of annual gross disposable income – will also contribute to a moderate increase in delinquencies.  </p>
<p>"Nevertheless, we expect the increase in mortgage delinquencies to be limited, while defaults and losses will remain low, as continued GDP growth and low unemployment will continue support borrowers' ability to meet mortgage repayments," says Alena Chen, a Moody's Vice President and Senior Analyst.  </p>
<p><a href="https://www.propertyobserver.com.au/images/2019/3/22/RMBS%20.jpg" target="_blank">Click here</a> to enlarge:</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/2019/3/22/RMBS%20.jpg" alt=""></p>
<p>Specifically, Moody's forecasts real GDP growth of around 2.5% in both 2019 and 2020, and for Australia's unemployment rate to remain relatively stable at 5.5% over the same period.  </p>
<p>"Mortgage delinquencies will likely increase over the short term in areas hit by the far north Queensland floods in February 2019, as borrowers may lose income or face costs while dealing with the aftermath of the disaster," adds Chen.  </p>
<p>However, Moody's says this is unlikely to translate into a material increase in defaults, given that insurance payouts, government assistance and financial hardship arrangements entered into with lenders will ease the burden on borrowers.</p>
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Australian RMBS delinquencies to rise as house prices fall: Moody's

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<div>Moody's Investors Service says that mortgage delinquencies will increase over the next two years.</div>
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<div>The forecasts suggests a record number of interest-only (IO) mortgages converting to principal and interest (P&amp;I) loans, will continue to the rise.</div>
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<div>When IO loans convert to P&amp;I, borrowers have to make higher monthly repayments, and this 'payment shock' can lead to mortgage delinquencies and makes IO loans riskier than P&amp;I loans. </div>
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<div>Moody's data shows that the 90 days past due delinquency rate for mortgages that have converted to P&amp;I from IO is 0.94%, double that of IO loans that have not yet converted and 0.24 percentage points higher than all securitised mortgages. </div>
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<a href="https://www.propertyobserver.com.au/images/2018/8/3/MOODY%201.jpg" target="_blank">Click here </a>to enlarge:</div>
<div><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/2018/8/3/MOODY%201.jpg" alt=""></div>
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<div>Refinancing interest-only mortgages is also becoming more difficult, which will in itself contribute to an increase in mortgage delinquencies. </div>
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<div>Moody's conclusions are contained in its just-released report, "RMBS - Australia Mortgage delinquencies to increase as record number of IO loans to convert to P&amp;I". </div>
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<div>Banks in Australia originated a significant volume of IO loans in 2014 and 2015, which means a record number of these loans are scheduled to convert to P&amp;I over 2019 and 2020, when their five-year IO period ends. </div>
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<a href="https://www.propertyobserver.com.au/images/2018/8/3/MOODY%202.jpg" target="_blank">Click here </a>to enlarge: </div>
<div><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/2018/8/3/MOODY%202.jpg" alt=""></div>
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<div>IO loans accounted for more than 40% of all mortgages originated by banks for much of 2014 and 2015, with this figure peaking at 46% in June 2015. </div>
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<div>At current mortgage interest rates, monthly repayments on loans that convert to P&amp;I from IO will increase by around 30%, which can lead to delinquencies. </div>
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<div>With RMBS, IO loans accounted for around 32% of all loans in such deals on average as of November 2017. However, on an individual deal basis, the share of IO loans ranges from 0% to 50%. </div>
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<a href="https://www.propertyobserver.com.au/images/2018/8/3/MOODY%203.jpg" target="_blank">Click here</a> to enlarge:</div>
<div><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/2018/8/3/MOODY%203.jpg" alt=""></div>
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<div>"Therefore, the degree to which individual deals will be exposed to potential delinquencies as loans convert to P&amp;I from IO will depend on each deals' exposure to IO loans and their IO period maturity profile," the report noted.</div>
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