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<div class="row" data-reactroot=""><div class="cell cs12 cx12"><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><strong>Thanks to Sydney’s mighty housing boom years, the harbour city has dominated recent analysis of the nation’s biggest change in dwelling values over the past decade.</strong></p><p>Despite a recent <a href="https://theurbandeveloper.com/articles/further-falls-for-residential-property-experts-warn">5 per cent house price slump</a>, Sydney has been far and away the top city to have owned property over the past decade. </p><p>Sydney placed in the top four spots on the Corelogic Property Pulse chart, and claimed seven of the top ten places. </p><p>Corelogic analyst Cameron Kusher reveals national dwelling prices have increased by 44 per cent over the 10 years to June, with combined capital city markets recording an increase of 52.6 per cent for the same period. </p><p>Sydney’s south west region was the standout performer for the country recording the greatest increase in both housing and unit values. </p><p>Housing values grew a hefty 112.9 per cent in Sydney&#x27;s south west region, and 98 per cent for units. </p><p>Related: <a href="https://theurbandeveloper.com/articles/sydney-and-melbourne-drive-housing-price-fall-">Further Falls for Residential Property, Experts Warn</a></p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><div><picture><img src="https://tud-prod-tudmedia-oj9w2zshuo0o.s3.amazonaws.com/raw/images/567bd8a2-e53e-4c81-bc3c-f76cc9d28977.png" width="773"/></picture><div></div></div></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p></p><p>Parramatta followed in second spot experiencing an increase in value change of 107.4 per cent. </p><p>Sydney’s inner south west increased by 106.6 per cent, followed by the outer South West of Sydney at 103.3 per cent.</p><p>South east Melbourne recorded 102.7 per cent for the 10 year span, and the west region of Melbourne saw an increase of 102.3 per cent.</p><p>Kusher said value growth in NSW and Vic was substantially stronger than growth experienced anywhere else across the country. </p><p>“In fact, the regions of NSW (Riverina) and Vic (North West) that recorded the weakest conditions over the decade have seen value growth well in excess of the best performing WA region (Perth-North West),” Kusher said. </p><p>Growth in house and unit values across the past 10 years had a definite slant to strong growth in Sydney and Melbourne and weaker conditions everywhere else, explained Kusher. </p><p>“While the last 10 years is not predictive of the future, dwelling values are already falling in Sydney and Melbourne and regional markets are currently outperforming capital cities.</p><p>“With housing in a downturn in Sydney and Melbourne and affordability stretched, at this point it seems unlikely the returns of the past decade will be replicated over the next 10 years.”</p><p>Related: <a href="https://theurbandeveloper.com/articles/sydney-and-melbourne-drive-housing-price-fall-">Sydney and Melbourne Drive Housing Price Fall</a></p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><div><picture><img src="https://tud-prod-tudmedia-oj9w2zshuo0o.s3.amazonaws.com/raw/images/da9a553f-3901-4070-a99f-d43472369920.jpg" width="956"/></picture><div></div></div></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><h2><br><strong>Relief for home buyers</strong></h2><p>Declining housing prices in the nation’s largest capital cities will continue to drive improvements in affordability explains Housing Industry Australia economist Diwa Hopkins, particularly in the Sydney and Melbourne markets. </p><p>The HIA Affordability Index registered 74.9 in the June quarter, up by 0.4 per cent over the quarter and up by 0.8 per cent in comparison with a year earlier when affordability had reached its poorest level in six years.</p><p>“In Sydney and Melbourne in particular, while dwelling prices are coming off the boil, rental price increases have been steady,&quot; Hopkins said.</p><p>“This suggests the overall supply of housing is well matched with demand.&quot;</p><p>“With an even balance in overall housing supply and demand in these key markets, the current downturn in dwelling prices is unlikely to be prolonged or severe.&quot;</p></div></div></div></div></div>

Following Sydney’s mighty housing boom years the harbour city has dominated recent analysis of the nation’s top housing values across the past decade.

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<div class="row" data-reactroot=""><div class="cell cs12 cx12"><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><strong>While conditions in Brisbane’s residential market are expected to </strong><a href="https://theurbandeveloper.com/articles/brisbanes-flat-house-prices-better-than-a-fall"><strong>remain weak</strong></a><strong> for some time, there are green shoots as the market enters recovery mode and inches toward its next growth phase. </strong></p><p>Expected <a href="https://theurbandeveloper.com/articles/house-prices-to-fall-20-in-sydney-melbourne-ubs-">peak-to-trough falls</a> of up to 20 per cent in Sydney and Melbourne makes Brisbane’s residential market looks temperate in comparison.</p><p>Over the last 12 months, Brisbane house prices declined 1.9 per cent, led by larger falls in unit values of 2.5 per cent.</p><p>Speaking at <em>The Urban Developer’s</em> 2019 Residential Summit in Brisbane on Friday, Corelogic economist Cameron Kusher said the biggest concern for Queensland’s property market is sluggish economic growth and a concerning unemployment rate. </p><p>“If the economy can improve and [with] job creation lift there is a compelling argument to purchase property in Brisbane as opposed to Sydney or Melbourne.” </p><p>Credit availability will remain a <a href="https://theurbandeveloper.com/articles/property-sentiment-22-of-developers-say-they-will-start-new-projects-this-year-">key market determinant</a> as borrowers face tight lending conditions, but improving affordability will help mitigate the impact of credit curbs to some extent, Kusher said.</p><p>Related: <a href="https://theurbandeveloper.com/articles/brisbanes-flat-house-prices-better-than-a-fall">Brisbane Flat House Prices ‘Better Than a Fall’</a></p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><div><picture><img src="https://tud-prod-tudmedia-oj9w2zshuo0o.s3.amazonaws.com/raw/images/d4d96952-37ed-448d-a41f-f1df98a8d7bc.jpg" width="6000"/></picture><div><span style="align-content:center;opacity:0.8">Corelogic economist Cameron Kusher speaks at The Urban Developer&#x27;s residential summit.</span></div></div></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><br>Increasing <a href="https://theurbandeveloper.com/articles/queensland-appointed-most-popular-for-interstate-movers">net interstate migration</a> and moderating apartment market declines will support the property market in the short term, while gross rental yields are rising at reasonably rapid rates when compared to recent lows. </p><p>The unprecedented apartment boom in Brisbane tipped the market well and truly into <a href="https://theurbandeveloper.com/articles/10000-apartments-abandoned-in-saturated-brisbane-market-bis">oversupply</a>, but approvals have fallen substantially.</p><p>“And the number of dwellings under construction has been trending lower for some time,” Kusher said.   </p><p>“Some caution around high-rise markets is warranted in light of high supply and less demand from foreign buyers and domestic investors however, new unit supply has moderated earlier in Brisbane than elsewhere.”</p><p>Related: <a href="https://theurbandeveloper.com/articles/inner-brisbane-apartment-market-to-stabilise-in-2019">Brisbane Apartment Market Set to Stabilise in 2019</a></p><h2><strong>Saved by sluggish growth</strong></h2><p>Housing market growth has been skewed toward Sydney and Melbourne since the global financial crisis, with Brisbane’s residential market experiencing minimal growth over the same period.</p><p>“The relative strength of the Sydney and Melbourne economies, strong migration into those cities and a relatively low supply of stock available for sale has supported this growth while these conditions have generally not been apparent in other capital cities,” Kusher said.</p><p>Settled sales transactions continue to trend lower for Brisbane, declining 5.6 per cent over the past year, while Brisbane property listings are taking longer to sell.</p><p>“There has been a large rise in the length of time it takes to sell a property in Brisbane over the past year,” Kusher said.</p><p>Brisbane suburbs that experienced the largest growth in house prices over 2018 are Karalee, Karana Downs, Brookfield, Ipswich and Riverhills while Carole Park, Eagle Farm, Logan Central and Fig Tree Pocket suffered the largest falls.</p><p>“It can be easy to forget the diversity across property market performance as some regions continue to deliver solid growth conditions while others drag averages lower,” Kusher said.</p></div></div></div></div></div>

While conditions in Brisbane’s residential market are expected to remain weak for some time, there are some green shoots as the Brisbane market enters

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<div class="row" data-reactroot=""><div class="cell cs12 cx12"><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><strong>The </strong><a href="https://theurbandeveloper.com/articles/infrastructure-migration-and-the-mini-credit-crunch-hurting-property-deloitte"><strong>credit crunch</strong></a><strong> and property sector doom and gloom are the ongoing themes of the media&#x27;s coverage of Australia&#x27;s residential market slowdown, but Corelogic analyst Cameron Kusher says that the use of the term &quot;crunch&quot; may be a &quot;little overzealous&quot;.</strong></p><p>While owner occupier credit growth has slowed marginally over the past few months, Kusher says the annual growth rate is actually slightly higher than a year ago.</p><p>&quot;While investor demand could be characterised as experiencing a crunch at the moment, owner occupier demand, for now, remains quite solid,&quot; Kusher said. </p><p>In line with <a href="https://theurbandeveloper.com/articles/further-falls-for-residential-property-experts-warn">current market research</a>, Corelogic anticipates dwelling values in Sydney and Melbourne will continue to decline over the coming months ultimately placing pressure on headline growth rates.</p><p>“Given this, the overall value of housing finance commitments is anticipated to fall and the expansion in housing credit will likely continue to slow,” Kusher said. </p><p>Related: <a href="https://theurbandeveloper.com/articles/infrastructure-migration-and-the-mini-credit-crunch-hurting-property-deloitte">Infrastructure, Migration and the ‘Mini-credit’ Crunch: Deloitte</a></p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><div><picture><img src="https://tud-prod-tudmedia-oj9w2zshuo0o.s3.amazonaws.com/raw/images/9aa91bd9-7e69-4d7e-8bf4-feebdfa00f9e.jpg" width="724"/></picture><div></div></div></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p></p><p><strong>Flow of new lending</strong></p><p>The value of outstanding housing credit to Australian lenders was recorded at $1.762 trillion as of May 2018, a historic high. This represents growth is certainly slowing, Corelogic says, but it is still expanding.</p><p>“While total housing credit is important to consider when looking at any ‘credit crunch’ scenario, so too is the flow of new lending,” Kusher said. </p><p>Considering the flow of new lending thanks to housing finance commitment figures published by the Australian Bureau of Statistics, there was $31.9 billion worth of housing finance commitments in May 2018, the highest monthly value in three months. </p><p>“The $31.9 billion was -5.5 per cent lower than its historic high monthly value of $33.7 billion in August 2017,” Kusher said. </p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><div><picture><img src="https://tud-prod-tudmedia-oj9w2zshuo0o.s3.amazonaws.com/raw/images/9e78823b-2a6c-43ef-8b2a-585d1dc0e8f2.png" width="624"/></picture><div><span style="float:right;opacity:0.8">Supplied</span></div></div></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p></p><p>Considering the current flow in credit data, CoreLogic says investors may be caught in a credit crunch but owner occupiers are not within its grips. </p><p>“Owner occupiers account for 66.5 per cent  so a crunch in investor demand has less of an impact on overall credit demand than a crunch in owner occupier demand does,” Kusher said. </p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><div><blockquote><p><b>When analysing the current flows in credit data it is fair to say that there has been a credit crunch for investors but a credit crunch is not really evident for owner occupiers.  </b></p>--CoreLogic</blockquote></div></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>Australia’s largest capital cities Sydney and Melbourne, where price values have cooled, have seen investor demand drop off.</p><p>“While investor demand could be characterised as experiencing a crunch at the moment, owner occupier demand, for now, remains quite solid,” Kusher said. </p><p>“What is unknown is whether it is market conditions that have led to the fall in in investor demand or is it the fall in investor demand that has led to the decline in values, in reality it is probably a combination of both.”</p></div></div></div></div></div>

 Latest CoreLogic research poses the question, is use of the word “credit crunch” a bit over the top? 

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<div class="row" data-reactroot=""><div class="cell cs12 cx12"><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>This column is going to be a little controversial — but lenders are well within their rights keep a portion of future <a href="https://theurbandeveloper.com/articles/house-prices-slump-as-rba-all-but-confirms-cut-">rate cuts</a> up their sleeve.</p><p>The fact that banks have to consider mortgage holders as well as savers is an important consideration.</p><p>It is true that Australians are obsessed with housing. In no way is this better reflected by the fact that interest rate cuts are cheered because they lead to cheaper interest cost on our mortgages and interest rate rises are jeered because our repayments increase. </p><p>This is notwithstanding the fact that lower interest rates typically reflect a slowing economy with low inflation and low wages growth that requires more stimulus. </p><p>On the other side, higher interest rates typically reflect stronger inflation, stronger wage growth and an economy that is overall too strong.</p><p>Looking at data from the Reserve Bank to April 2019 shows that the value of deposits with authorised deposit-taking institutions (ADIs) was recorded at $1.584 trillion. </p><p>By comparison, the total value of outstanding mortgages was recorded at $1.825 billion. </p><p>The value of outstanding housing credit is larger than the value of deposits however, bank deposits account for 86.8 per cent of the value of outstanding housing credit.</p><p>Since this long interest rate cutting cycle began in November 2011, the cash rate has dropped from 4.75 per cent to 1.5 per cent in May 2019 with an additional 25 basis points of interest rate cuts delivered this month, taking the cash rate to 1.25 per cent. </p><p>Between October 2011 and May 2019, an owner occupier with a principal and interest mortgage has, on average, seen their mortgage interest rate reduce by 218 basis points.</p><p>Over the current interest rate cutting cycle, mortgage interest rates to owner occupiers have reduced by 218 basis points however, the drop in savings and term deposit rates has been much greater. </p><p>As an example the fall in some of the rates are detailed below (based on averages <a href="https://www.rba.gov.au/statistics/tables/#interest-rates">published</a> by the RBA):</p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><hr/></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>1. Rates for banks bonus savings accounts with at least $10,000 have fallen 330 basis points to 2.15 per cent.</p><p>2. Rates for online savings accounts with at least $10,000 have fallen 400 basis points to 0.85 per cent.</p><p>3. Rates for cash management accounts at banks with deposits of at least $10,000 have fallen 320 basis points to 0.45 per cent.</p><p>4. Rates for three month term deposit rates with at least $10,000 have fallen 320 basis points to 1.85 per cent.</p><p>5. Rates for three year term deposit rates with at least $10,000 have fallen 330 basis points to 2.3 per cent.</p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><hr/></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>As this data shows, while on average the benefit of the reduction in mortgage interest rates to owner-occupier borrowers has been 218 basis points, the reduction in interest rates for savers has been significantly larger. </p><p>Mortgages are a generally large and significant debt, so many view the drop in mortgage interest rates as more beneficial, especially with the increased use of mortgage offset accounts over recent years.</p><p>However, with official interest rates as <a href="https://theurbandeveloper.com/articles/rba-cuts-to-record-lows-so-how-will-the-cash-rate-cut-impact-the-property-market">low</a> as they are currently and savers having experienced much greater interest reductions than mortgage holders, it could be argued there is currently little benefit in saving. </p><p>While that may potentially be good for the economy (more spending) and lower interest rates are certainly perceived as good for mortgage holders, there is a fairly large proportion of the population that rely on savings as well as those that have little or no mortgage debt.</p><p>Another factor to consider is that the major banks, which account for the majority of mortgage lending in the country, remain heavily reliant on domestic deposits to fund their mortgage lending. </p><p>The latest data available shows that around two-thirds of major banks non-equity funding comes from domestic deposits. </p><p>Very low interest rates discourage saving and over time could lead to a drop in domestic deposits and an increase in the requirement for lenders to increase their reliance on other sources of funding (such as offshore).</p><p>Listed lenders also have a responsibility to their shareholders. Very low mortgage rates have the potential to further depress net interest margins. </p><p>This increases the likelihood that future cuts to the cash rate may not be passed on in full and likely explains why the reduction to deposit rates have to-date been larger than the cuts to mortgage interest rates.</p><p>As always when interest rates are changed there are winners and losers. For the most part the focus is on the benefit of lower interest rates for mortgage holders.</p><p>What is often forgotten in the conversation, and has been throughout the current rate cutting cycle, is how much lower interest rates hurt savers and disincentive saving. </p><p>Given cuts to interest rates for savers have been much greater than cuts to interest rates for mortgage holders and savers are not that much of a smaller cohort than mortgage holders it is reasonable for lenders to have greater consideration of the impact of the current ultra-low interest rates on this segment of the market.</p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><hr/></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><em>Contributed by Corelogic research analyst Cameron Kusher.</em></p></div></div></div></div></div>

This column is going to be a little controversial — but lenders are well within their rights keep a portion of future  rate cuts  up their sleeve. The

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<div class="row" data-reactroot=""><div class="cell cs12 cx12"><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>The trend of strengthening auction <a href="https://theurbandeveloper.com/articles/property-market-recovery-picks-up-steam-">results</a> continued this week, but the real test will be in coming months as the results of <a href="https://theurbandeveloper.com/articles/lending-slump-one-of-the-largest-in-hist">credit</a> loosening and tax and cash rate <a href="https://theurbandeveloper.com/articles/reserve-bank-cuts-interest-rate-to-1pc-in-july-meeting">cuts</a> are meted out. </p><p>Corelogic’s quarterly auction clearance rate figures showed auction results for the June quarter outperforming both the June 2018 quarter and the first quarter this year.</p><p>The trend toward higher clearance rates has been most pronounced in Sydney and Melbourne, at 77.2 per cent and 73.6 per cent respectively, compared to 46.9 per cent and 56.2 per cent a year earlier.  </p><p>“The improved trend in auction market results provides further evidence that housing conditions are stabilising, especially in Sydney and Melbourne, where a trend towards higher clearance rates has been most pronounced,” Corelogic research analyst Cameron Kusher said.</p><p>Over the three months to June, combined capital city clearance rates held above 50 per cent for 11 of the 13 weeks and above 60 per cent for the past three weeks. </p><p>“It will be interesting to see if this continues,” Kusher said.</p><p>Related: <a href="https://theurbandeveloper.com/articles/regulators-positive-about-housing-market-recovery-">Regulators Positive About Housing Market Recovery</a> </p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><hr/></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><strong>Strongest auction results: Suburbs, June quarter</strong></p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><table><thead><tr><th>City</th><th>Suburb </th><th>Results % </th><th>Scheduled Auctions</th><th>Number sold</th></tr></thead><tbody><tr><th>Sydney</th><th>Lane Cove</th><th>91.7%</th><th>32</th><th>22</th></tr><tr><th>Melbourne</th><th>Armadale</th><th>85.7%</th><th>33</th><th>24</th></tr><tr><th>Brisbane</th><th>Camp Hill </th><th>48%</th><th>26</th><th>12</th></tr></tbody></table></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><sub><sup>^ Clearance rates calculated where there has been at least 20 results reported over the period.</sup></sub></p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>Low auction volumes remain cause for concern — with 18,104 auctions a significant 30 per cent lower than the same time last year. In comparison, the March quarter saw 14,647 auctions.</p><p>“Although the March quarter is traditionally quieter due to the seasonal slowdown in January, so lower volumes is not that surprising,” Kusher said. </p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><hr/></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><strong>Highest number of auctions: June quarter </strong></p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><table><thead><tr><th>City</th><th>Suburb</th><th>Auction volumes</th></tr></thead><tbody><tr><th>Melbourne</th><th>Reservoir</th><th>132</th></tr><tr><th>Sydney</th><th>Mosman</th><th>76</th></tr><tr><th>Brisbane</th><th>Wynnum</th><th>27</th></tr><tr><th>Adelaide</th><th>Prospect</th><th>19</th></tr><tr><th>Perth</th><th>Duncraig</th><th>13 </th></tr></tbody></table></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><sub><sup>^Based on total auctions held across the suburb over the reporting period.</sup></sub></p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>REA Group chief economist Nerida Conisbee said that while <a href="https://theurbandeveloper.com/articles/market-recovery-rea-group">demand</a> has started to increase, there has been no substantial uplift in the number of properties listed for sale. </p><p>A promising increase in residential indicators, such as a bump in realestate.com.au search activity and improving clearance rates may still be offset by global headwinds and rising unemployment.</p><p>“While many economic indicators have been poor for some time now, the bright spark has always been low unemployment,” Conisbee said.</p><p>“With this creeping up and the Reserve Bank pushing through two interest rate cuts very quickly, the positive effect of cheaper finance may not be enough to offset the fact that people are beginning to lose their jobs.”</p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><hr/></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><div><picture><img src="https://tud-prod-tudmedia-oj9w2zshuo0o.s3.amazonaws.com/raw/images/00c90fae-e38d-4abc-b5ea-ffad74459c00.png" width="1336"/></picture><div><span style="align-content:center;opacity:0.8">▲Capital city key statistics. Source: Corelogic. </span></div></div></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><hr/></div></div></div></div></div>

The trend of strengthening auction results continued this week...

CAMERON KUSHER