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Outdoor adventure store retailer Kathmandu has relocated to a new shop on the struggling Bridge Road discount shopping strip in Richmond.
Kathmandu will lease a 758-square-metre shop at 549 Bridge Road in Richmond in a five-year lease with a five-year renewal option in a deal negotiated by Colliers International’s Mike Crittenden.
The shop was previous occupied by Pulse Pharmacy.
The rental terms have not been disclosed, but Property Observer understands that current new leases on Bridge Road are being negotiated between $350 and $450 per square metre.
The range is quite broad, reflecting the fact that there are many different types of retail properties along this strip, and various locations.
The lease was negotiated on behalf of lessor Bridge Road Investments.
“Proving location is everything, Kathmandu has relocated from directly across the road into a superior tenancy offering significant exposure with two street frontages,” says Crittenden.
“Kathmandu’s relocation confirms the importance of location and prominence to the success of bricks-and-mortar retail,” he says.
Bridge Road currently has a vacancy rate of around 11%, up from a vacancy of 2.9% over the past two years.
<a href="https://www.propertyobserver.com.au/retail/melbourne-shopping-strip-bridge-road-richmond-has-highest-vacancy-rate-in-five-years/2012091656593" target="_blank">In September,</a> Property Observer counted 25 "for lease" signs along Bridge Road between Punt Road and Church Street.
Mark Ashton, Kathmandu’s property and leasing manager, says moving to the new store is part of its store network strategy of “securing high -xposure locations in Australia’s key retail strips”.
“In recent times, Bridge Road has received some negative press but we believe it holds its position as one of the city’s most popular strips.”
According to a Knight Frank survey, the prime retail suburban vacancy rate in Melbourne had climbed from 3.2% to 5.3% over the past two years.
Church Street, Brighton, had the lowest vacancy rate, followed by High Street, Armadale, and Acland Street, St Kilda.
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Kathmandu moves across the road on Richmond’s Bridge Road

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RBA governor Glenn Stevens has warned that lowering interest rates following an “asset price bust” to stimulate lending can have "toxic consequences".
Stevens highlighted the challenges faced by the RBA in managing rising property prices and boom to bust cycles in a speech published today and delivered to the closed door Bank for International Settlements (BIS) conference co-hosted by the RBA in August.
Stevens said there has been “a long debate about whether monetary policy should respond to asset prices – the so-called lean-versus-clean debate”
The RBA responded to the GFC by dramatically cutting the cash rate by 400 basis points from a setting of 7% in October 2008 to 3% by April 2009, spurred on by the bankruptcy of investment bank Lehman Brothers on September 15 2008.
He said many people had contributed to the lean-versus-clean debate during the conference.
He said the case for leaning into the property price upswing (by raising interest rates) is that “growth cost might be small and the benefits of avoiding future pronounced instability might be great”.
However, he said the argument against this approach is “that we just do not know enough about asset price and credit dynamics to do this with any precision or with the hope of much success, at least without risking serious damage to other parts of the economy".
But he said the flip-side of the argument of “simply expecting to clean up after the credit boom is not sufficient anymore" because "the mess might be so large that monetary policy ends up not being able to do the job when the time comes”.
“Moreover, if the monetary policy clean-up after the asset price bust involves interest rates low enough to prompt some other sector of the economy to leverage up in order to spur the growth, then the clean-up itself might leave its own toxic consequences,” he said.
Regardless of the actions taken by central banks, Stevens said monetary policy cannot succeed in managing cycles, asset values and leverage by itself.
In his speech, Stevens also highlighted how property price crashes had taught Australia painful lessons, dating as far back as 1890 when a combination of foreign capital inflow, speculation and a decline in lending standard resulted in an acute depression in Melbourne, far worse than the 1930s.
He also added that in his lifetime, the liberalisation of the financial system in the 1980s and 1990s created a boom in commercial property prices that then “unwound quite painfully”.
“There is little doubt that property price swings and financial stability are intimately connected, our own experience in Australia certainly confirms that,” said Stevens.
He said the lessons learned from these experiences is that it is crucial to get the underlying monetary framework right.
“Indeed maintaining overall macroeconomic stability is the most important thing that monetary policy can do,” he said, adding that implementation of the flexible inflation-targeting regime nearly 20 years now had enhanced the RBA ability to maintain this stability.
But he said monetary policy built around controlling consumer price inflation though critical not enough.
“Financial stability and monetary policy are related – the relationship is not simple, it is complex, but you certainly cannot divorce the two,” he said.
He said the second lesson was that property and asset prices matter a great deal in forecasting future output and consumer price inflation.
“[Asset prices] matter because property holdings tend to be leveraged. Big swings in asset values where the holdings are not leveraged will not, I conjecture, matter all that much.
“It is property that is being used as collateral for significant lending by financial institutions that makes property prices so important. It is actually the leverage that matters,” he said.
The third lesson learned from previous crashes, Stevens said, was the importance of prudential supervision.
“The most elegantly crafted rules will not make much difference if the capacity and will to enforce them is not in place.
“There is probably too much tendency to fall for the easy line that if only we can craft better regulations and bring the bankers under control then all will be well.
“Actually, it is the application of the rules and the framework that matter.
“After all everybody was using some version of Basel II or Basel I. This was more or less the same set of regulatory arrangements pre-crisis. But not everybody had a collapse of their banking system,” he said.
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Lower interest rates following bust can have "toxic consequences": Glenn Stevens

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Australia’s profitable banking sector, cautious lending practices and the “skilful counter-cyclical policies” of the Reserve Bank have been noted by Oxford University macroeconomist John Muellbauer, in  a speech looking at the risks posed to financial stability from "boom-bust" housing cycles.
Muellbauer provided an overall positive assessment of Australia’s prudential and regulatory oversight in a paper published today by the RBA but  delivered to the closed-door Bank for International Settlements (BIS) 24th annual conference held in Sydney in August.
The theme of the  conference was ‘Property Markets and Financial Stability’.
In his paper titled ‘When is a Housing Market Overheated Enough to Threaten Stability?’ Muellbauer warns that Australia’s economy is exposed due to its dependence on China buying its raw commodities.
“Australia’s dependence on exporting to China and more generally its reliance on a permanent improvement in its international terms of trade does point to a potential vulnerability in other economic fundamentals,” says Muellbauer.
“If these fundamentals turned negative, the high levels of household debt in Australia could seriously constrain growth even though the appropriate exchange rate adjustment could very likely be managed without a rise in interest rates, and fiscal policy would also be available, given low levels of government debt.”
But Muellbauer does note that in terms of financial regulation, credit fundamentals are more “robust” in Australia than the US, Ireland, the UK and Spain due to “the relatively modest leverage and continued profitability of its banking system, as well as skilful counter-cyclical policies of its central bank”.
He also says that while Ireland and the UK resorted to “short-maturity money market borrowing” when securitisation markets dried up in 2007 "increasing their vulnerability”, this was not the case in Australia due to “far more cautious” lending practices in Australia and because banks remained profitable”. Muellbauer also praises the RBA’s role in guarding against financial instability.
“Clearly, the quality of financial regulation and the general policy stance of the central bank is another important factor in judging the fragility of the fundamentals.
“In Australia, the Reserve Bank has long had a pragmatically cautious respect for the risks posed by credit and housing price booms, and has been decisive in raising rates to head off incipient booms; the Australian Prudential Regulation Authority has always been tough on bank supervision,” said Muellbauer
Muellbauer is professor of economics and a senior fellow of the Institute for New Economic Thinking at the Oxford Martin School, Oxford University. He is also a Fellow of the British Academy, of the Econometric Society, of the European Economic Association and a Research Fellow at the Centre for Economic Policy Research.
The conference, which took place between August 21 and 22, brought together central bankers and leading academics to discuss important policy issues concerning property markets and financial stability
Discussions examined measurement issues in property prices, housing finance, the effects of macro-prudential policies, the management of banks' risks and securitisation.
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Profitable banks and cautious lending practices protecting Australia against "boom-bust" housing cycles: Oxford University economist

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Property investors who may have missed the best opportunities for growth in the Queensland mining town of Gladstone and should instead consider investing in an up and coming investment hotspot like Geraldton in WA, says hotspotting.com.au’s Terry Ryder.
Ryder urges caution when considering investing in Gladstone and says it's property market is at risk of oversupply.
He says developers have been desperate to get into Gladstone, but because of the time it takes to get approval, they have been a couple of years behind the market, up until now, with projects starting to come on board.
“If you fly into or over Gladstone, you see there are just new housing estates and earth-moving machinery everywhere,” said Ryder in a recent <a target="_blank" href="/news">Property Observer</a><a target="_blank" href="/news"> webinar</a> looking at investment hotspot opportunities in 2013.
Ryder says the best growth opportunities in Gladstone were two year's ago.
Rather, he suggests investors take a good look at Geraldton, which he says has the potential to evolve into a Gladstone.
Geraldton is a coastal town of about 35,000 people about 430 kilometres north of Perth.
“It’s a city with a nice diversity (agriculture, fishing, tourism, mining, ports) to its economy and it receives a lot of benefit from iron-ore mining to the east.
Ryder says there have been delays in getting the $6 billion Oakajee port off the ground, but believes it will happen.
“And when it does go ahead, it will take Geraldton to another level."
Another project which Ryder says tends to be overlooked is the $3 billion Square Kilometre Array (SKA) project, which will be the world’s largest and most sensitive radio telescope, to be designed and constructed in the desert to the east of Geraldton (alongside a twin project in South Africa) between now and 2024.
“This will make Geraldton a city of international importance,” Ryder says.
Looking back over the success of Gladstone and other established hotspots, Ryder says the trend witnessed in boom markets is that rents are the first to rise, before prices go up.
“We noticed this in Gladstone in 2011, where there were massive rental increases but prices did not move at all."
Ryder says the prices rises in Gladstone happened this year with price growth in various Gladstone suburbs of 16% to 17% - about one year after the rent rises.
He says a lot of people have been emailing him about Gladstone asking if it is too late to invest.
 “I think it is too late to get the best growth prospects, although there still will be growth.
“You still have $70 billion worth of LNG projects under construction, a $5 billion steel mill is still to start and there is the expansion of the port and rail, which will bring lots of jobs to Gladstone.
 “But my point is that the best time to invest in Gladstone was two years ago.
“When that new [housing] supply comes in, there is the risk there will be too much – and one for investors to be cautious about,” he says.
For more on Terry Ryder's hotspots selections for 2013 and the three other regional locations that could be the next Gladstone, watch the full free webinar  - <a href="/news">Regions versus capital cities - where to invest in 2013?</a> 
 
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Investors should look at Geraldton as future Gladstone style hotspot: Terry Ryder

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Australia’s already highly-concentrated listed property trust sector is set to consolidate even further following GPT’s $3 billion bid to acquire Australand’s investment property portfolio and commercial and industrial business.
GPT’s non-binding proposal does not include the residential assets and business of Australand.
It has been described as a “semi-friendly” approach with GPT looking to enter into “constructive discussions with the board of Australand with the aim of developing a complete proposal in the interests of both sets of securityholders”.
GPT is seeking to re-weight its portfolio and strategy with an increased exposure to office, logistics and business parks while Australand has been seeking to reduce its non-residential holdings having announced the sale of two Sydney commercial properties in the last week.
It sold 80 Alfred Street in Milsons Point to a private developer for $49 million on December 7 and on December 4 announced the sale of the 111 Darlinghurst Road, Kings Cross (the former Crest Hotel) to the Iris Capital Group for $65 million.
Australand has confirmed the unsolicited approach from GPT Group.
“The proposal involves Australand Holdings Limited retaining the residential business and remaining a listed entity," says Australand.
“The proposal is incomplete, highly conditional and is subject to a number of factors including undertaking due diligence.
“Australand has become aware of market rumours in relation to this proposal and, accordingly, has decided to make this announcement.
“The Board of Australand has not formed a view at this stage on the proposal. There is no guarantee that the proposal or any discussions with The GPT Group will lead to a formal, binding proposal for the acquisition of the Investment Property Portfolio and its Commercial and Industrial business. Accordingly, the Board of Australand recommends that securityholders take no action at this time.”
Both REITS have said they will keep their shareholders and the market updated of any further material developments as they occur.
Australand has appointed Fort Street Advisers as financial adviser and King &amp; Wood Mallesons as legal adviser in relation to the proposal.
GPT Group has been led by Michael Cameron since 2009 while Australand has ben led by Bob Johnson since 2007.
Australia’s listed property trust sector (AREITS) has a market capitalisation of $82 billion with more than 90%  of the market held by the top 10 stocks, with Westfield Group and its shopping centre spin-off Westfield Retail Trust accounting for around 40% of the pie.
The other major A-REITs are Stockland, Goodman Group, GPT, Centro, Mirvac, Dexus, Investa, Charter Hall Office REIT and Multiplex.
The proposed GPT/Australand deal is set to spur renewed merger and acquisition activity, after a quiet 2012 with the Investa Office Fund considered the most vulnerable along with Colonial First State – Commonwealth Property Office Fund and CFS Retail, according to the Australian Financial Review.
According to 2012 BDO A-REIT Survey, this year saw less transactions taking place than in 2011, but more interest from offshore buyers.
Over 2012, “offshore acquirers were at the forefront taking advantage of the opportunity to acquire high quality assets at a discount to net tangible assets with a consortium led by Reco Ambrosia acquiring Charter Hall Office REIT.
According to the BDO survey, while the number of merger and acquisition transactions within the sector declined in comparison to last year, the overall transaction size increased as the transaction activity focused primarily on mid-cap A-REITs.
“Despite the sustained impact on the high Australian dollar, acquisitions were again led by foreign investment, in particular from North America. Overseas buyers have been attracted to A-REITs for two reasons.
“Firstly, some buyers have capitalised on depressed security prices in order to acquire foreign real estate in recovering markets at below asset valuation. Secondly, Australian real estate remains attractive to overseas investors due to the stable economy, and the underlying quality of assets with occupancies and strong tenant registers,” says Sebastian Stevens, BDO corporate finance partner and author of the A-REIT Survey
 
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GPT $3billion bid for Australand portfolio to spur further consolidation activity in already concentrated A-REIT sector

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A heritage-listed  B &amp; B guesthouse in Hobart constructed of sandstone and convict bricks, built in 1829 has been listed for leasehold sale.
This North Hobart guest house has a price tag of $465,000, with a wide and varied history, having had many different uses over the years.
<a href="https://www.thelodge.com.au/" target="_blank">The Lodge on Elizabeth </a>operates as an accredited four-star accommodation abode, with 13 ensuite rooms and a cottage set in a garden at the rear of the property. There is also a breakfast room, guest lounge, small kitchen and  modern two-bedroom owner's  quarters.
The stately Georgian mansion is situated at 249 Elizabeth Street has operated as a guest house since the early 1990s, with the exterior maintained by the interstate landlord.
Lodge on Elizabeth was originally know as the Melbourne Lodge, built by John George Stracey, who was the colony's first auctioneer. It became a private boys' school in 1831, and later the home for George Salier and his 14 children. The Argus newspaper reported that in June 1892, making his way home from his warehouse, George Salier fell dead in Elizabeth Street. He "staggered, fell and never spoke again" .
There were many other notable residents, including Sir Adye Douglas who was the Tasmanian premier between 1884 and 1886.
The lodge promises to offer guests an "olde world" experience as opposed to a bland motel room and includes cellars with evidence as to where convicts have been chained and period furniture.
The property is listed for sale by <a href="https://www.realcommercial.com.au/property-hotel+leisure-tas--500529803" target="_blank">Paul Scott of Tourism Brokers</a>.
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Hobart guesthouse built from convict sandstone with rich colonial history listed for leasehold sale

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Have you ever wondered why politicians are so universally distrusted when so many of them work 24/7 for the benefit of their communities?  It’s because they use 90% of their media time telling us that other politicians are not to be trusted.  As a result we don’t trust any of them.
I find it really disappointing when this attitude spills over into other areas of our lives, and so it is with this in mind that I write in response to the article by Margaret Lomas on Property Observer entitled <a target="_blank" href="https://www.propertyobserver.com.au/residential/nras-is-a-tax-scheme-a-property-investment-must-stack-up-on-its-own-margaret-lomas/2012120258187?utm_source=po&amp;utm_medium=aida&amp;utm_campaign=observers">“NRAS is a tax scheme”.</a>
Lomas’s article has sought to demonise NRAS and people associated with NRAS by the use of inflammatory language like “greedy developers”, “flippant claims”, “prostituted for gain” and “misleading in the extreme”.  It is this approach to commenting on property investing that leads to people distrusting property investment in general.  The result is that many Australians may miss out on potential investment benefits through analysis paralysis and “whom do I believe?” syndrome.
Like many other areas of business, and indeed our lives, NRAS and the property investment field in general may have its share of people who do the wrong thing, but there are also many professionals working for the benefit of not only investors but also the NRAS tenants.  Lomas's pen portrait of NRAS is inconsistent with the fact the 57% of all NRAS allocations have been made to endorsed charities that are not-for-profit organisations.
My company has specialised in NRAS property services for well over two years.  We have sold property from most of the major NRAS-approved participants to clients throughout Australia and have provided mortgage broking, financial planning, self-managed superannaution fund and legal services related to NRAS purchases.  We are better placed than any other company or organisation in the country to know the facts of NRAS.  So let me address some facts relevant relating to Lomas's article.
She asserts that “It’s pretty easy to counter the flippant claims of NRAS marketers” and uses three points to support her argument but all three are inaccurate and poorly researched.  Let me take each in turn:
<ul>
<li>“Middlemen” make big commissions – Almost all property (investment and owner-occupier alike) is sold by real estate agents who earn their income from commission on sales.  All property prices factor in agent commissions and marketing costs.  The vast majority of commissions being paid on properties sold are well under the $20,000 that Lomas claims as a minimum.  I accept that commissions offered in Queensland have for years been higher than other parts of the country, but this applies to both NRAS and non-NRAS property.</li>
</ul>
Furthermore the commissions we earn on sale of NRAS properties are well earned.  The government has spent nothing on promoting the scheme or educating investors.  It has been left to companies like ours to do the heavy lifting on educating investors in a highly beneficial and socially responsible investment. It has been appreciated by our clients.  We have provided hundreds (if not thousands) of hours of education, seminars and advice to our clients free of charge that other companies charge for.  Earning commissions from vendors enables us to do this without charging our clients. 
<ul>
<li>
Oversupply – Lomas claims that NRAS allocations are made in lots of 100.  This is incorrect.  The size of allocations has varied.  The minimum allocation size has been 12.</li>
</ul>
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There are only a small number of areas where 100 or more NRAS allocations have been made.  Official government figures show that NRAS allocations have been made across 849 postcode areas.  Of these 639 areas have less than 50 allocations.  There are some postcode areas with large allocations, for example, in <a target="_blank" href="/news">Bruce </a>in the ACT, but these allocations have been made to large institutions such as the Australian National University and will not be available to individual property investors.
The conclusion is that there is no evidence that NRAS properties are being released in large enough numbers into individual markets to push down market rents.
<ul>
<li>
NRAS allocations and hotspots – Lomas claims NRAS properties are rarely in hotspots.  Hotspot locations are a matter of personal opinion, but let’s just look at how NRAS rates in some of the locations Lomas has identified as hotspots in the Property Observer article on  October 8: <a target="_blank" href="https://www.propertyobserver.com.au/hotspots/plenty-of-regional-hotspots-to-tempt-investors-as-market-hovers-at-five-oclock-on-property-clock-margaret-lomas/2012100757021">“Plenty of regional hotspots to tempt investors as market hovers at five o’clock on property clock: Margaret Lomas”</a>.</li>
</ul>
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Here are Lomas's hotspots and the number of NRAS allocations in each:  <a target="_blank" href="/news">Ballarat </a>(443 NRAS allocations), <a target="_blank" href="/news">Bendigo </a>(267), <a target="_blank" href="/news">Gladstone </a>(243), <a target="_blank" href="/news">Mackay </a>(313) and <a target="_blank" href="/news">Toowoomba </a>(146).  I think there is fair opportunity for hotspot buying.
Lomas claims NRAS is purely a tax scheme.  If this is the case then so too is superannuation and non-NRAS property investing.  The provision of tax incentives by the government for superannaution and property investing in general underlie investing in these areas.  We saw when Paul Keating removed negative gearing incentives for property investors that the effect was so dramatic that he had to quickly reinstate them.
 
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There is absolutely no comparison between NRAS properties and failed agriculture investment scheme, as Lomas implies.  NRAS properties are owned outright by the investors and can be sold as non-NRAS properties to investors or owner-occupiers at any time.
NRAS, which has been modeled on similar successful overseas initiatives, provides additional tax incentives on top of other forms of property investment, but it also offers plenty of choice of assets to purchase.  There are apartments, townhouses, and houses across 849 postcode locations Australia-wide.
One point where I do agree with Lomas is that investors should be buying NRAS property, like any other property, on its investment merits.  For residential property the name of the game is capital growth, and we always have this discussion with our clients before they buy.
NRAS properties sit side by side with non-NRAS property and have the same capital growth potential.  But why buy a non-NRAS property with negative cashflow when the NRAS one next door has the same capital growth potential with positive cashflow?
In relation to the private tax ruling that Lomas refers to in the article, we have recently become aware of this private ruling also.  Lomas  implies that this ruling is some proof of a marketers'/developers' plot to mislead property investors.  Conspiracy theories are best left to Hollywood.
Let’s be clear on what the ATO private ruling means.  The ruling that she refers to is specific advice to one person by the ATO in answer to questions raised by that person pertaining to their own personal circumstances.   Whilst the ruling may have general applicability it is not necessarily the case.
We have been in contact with a number of NRAS-approved participants in relation to this advice, and they were not aware of it.  It is clear that this ruling has come out of left field for those involved in NRAS.  I believe that the issue has now been taken up by one or more of the NRAS-approved participants with the government, as it is seen as inconsistent with the intent of the scheme.  The government's NRAS website states “investors are able to apply property expenses and non-cash deductions and allowances against a lower assessable rental income, increasing the negative gearing benefit”.
That said, we have reassessed the cashflow modeling for NRAS properties taking into account this ATO ruling.  Whilst the cashflow is reduced, we disagree with the size of the claimed impact.  Everyone’s circumstances are different, but we would still expect the majority of people to be able to buy an NRAS property with positive cashflow.
When we started with NRAS it was largely unheard of by property investors.  It has gathered momentum now and is more widely known but unfortunately recent promoters of NRAS and promoters of alternatives to NRAS have often not got their facts straight.  So let’s get the facts straight, encourage our clients to embrace property investment no matter what their investment choice, and leave the inflammatory demonising to the politicians.
Ruby Janssen is managing director of <a target="_blank" href="https://onyx.net.au/">Onyx Domain</a> and is an author and a successful property investor.
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NRAS property investment stacks up and shouldn’t be demonised: Ruby Janssen

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Total returns on retail property are averaging around 10% and have dipped slightly over the past six months, according to Colliers International.
The chart below shows that the retail property sector has improved significantly from the GFC slump, but has slipped slightly since peaking in July last year.
"2012 was a watershed year for retail, with the sector undergoing significant structural change: weaker retail sales driven by a shift in the mix of spending, retail price deflation and pressure on retailer margins, challenges posed by the strong Australian dollar, and the continued evolution of online retailing in Australia," says  Nora Farren author of 2012: Retail in the rear view report.
Click to enlarge
<a href="/images/stories/2012/12/colliersdec11.gif" rel="shadowbox" title="Click to enlarge"><img src="/images/stories/2012/12/colliersdec11thumb.gif"></a>
"Up until recently, the performance of retail was supported by the expansion of both domestic and international retailers, which in-turn drove rental growth, centre expansion and development, and sector valuations.
"Nevertheless, over the year to September 2012, retail property actually posted a decline in returns (of 140bps), to record an annual total return of 8.8%, on the back of slowing capital growth.
"While in a low-interest-rate environment, this level of return is satisfactory, super and major regional shopping centres actually experienced a large decline in returns, a result of the negative impacts of weaker discretionary spending.
"This was particularly evident for clothing retailers and department stores.
"While, neighbourhood shopping centres, which are anchored by supermarkets, have been supported by steady growth in food retailing. Income growth for retail remains under pressure with new tenants paying less rent, which is starting to be reflected in valuations. Although, with their relatively higher income yield, neighbourhood centres are expected to outperform larger format centres over the next twelve months," she says.
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Retail property returns dip in 'watershed' year

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The popularity of fixed-rate home loans is on the rise.
Around 22% of borrowers who arranged their loans through a Mortgage Choice broker in November chose a fixed-rate product, compared with a six-month average of 19.5%.
Currently, fixed home loan rates are offered at a significant discount to variable rate home loans.
Mortgage comparison website RateCity.com.au calculates the average three-year fixed rate at 5.54%, compared with a standard variable rate of 6.62% – a difference of 108 basis points.
At these rates, using the example of a $300,000 home loan over 25 years would mean a variable rate borrower would pay $2,048 per month while a fixed-rate borrower would pay $1,710 per month –a difference of $338.
These sorts of numbers may tempt borrowers to consider a fixed-rate home loan, but the fact that nearly 80% of borrowers still choose a variable rate home loan should be cause for caution and careful consideration.
As Mortgage Choice spokesperson Belinda Williamson points out, borrowers must carefully weigh up their options, as fixed rate loans have both “pros and cons”.
“Remember, the interest rate is not the only factor to consider, also compare any initial, recurring and break costs, the ability to make extra repayments and redraw, lender service and how long the loan will take to be approved,” she says.
It is worth stating the obvious benefit and potential shortcoming of a fixed rate home loan – that the interest rate is fixed.
If interest rates rise, fixed-rate borrowers are better off as their mortgage repayments remain unchanged, but if interest rates fall, borrowers receive none of the benefits of a lower interest rate – a situation that was illustrated by the estimated 125,000 borrowers who chose to fix their rate in 2008, just before the RBA began cutting the cash rate in big chunks.
As a result fixed-rate borrowers <a href="/news">circa September 2008</a> were paying annual interest rate of around 8.75%  on a three-year fixed loan, while variable borrowers' annual interest rates fell to as low as 5.75% by May 2009, with variable rates remaining below 8% in subsequent years.
The rate you pay, timing and the duration of your fixed-rate home loan are key factors in making a financially astute decision.
 
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While you may be able to secure a three-year fixed-rate home loan as low as 5.13% (the current refinancing fixed rate offered by UBank), borrowers may qualify for a packaged variable home loan with a rate discounts of 70 basis points (as offered by Westpac) negating much of the fixed-rate interest rate saving, while being able to benefit from all the flexibility and features of a variable rate loan.
Conservatively minded borrowers or those who want the ‘insurance’ of knowing their mortgage payments won’t change month-to-month may consider a fixed-rate mortgage a good option, but  should bear in mind  a number of restrictions that may apply.
Firstly, the government’s ban on mortgage exit fees introduced on July 1 last year, designed to make it easier for borrowers to switch mortgage providers, does not apply to fixed-rate mortgages.
Fees can run into the tens of thousands of dollars.
Lenders determine break fees based on a combination of factors: the interest rate you are locked into compared to the current market interest rate, the length of time that remains on your fixed-rate term and the loan amount you initially borrowed.
Financial products data provider Canstar estimates that the break costs on a $250,000 three-year fixed rate loan that still has two-and-a-half years to run would be around $10,300.
According to RateCity.com.au spokesperson Michelle Hutchison, other restrictions include that about half of fixed home loans don't allow for redraw facility, which is the ability to withdraw extra funds from the home loan that you added to the loan.
“This is compared to the majority (98%) of variable home loans offer redraw facility,” she says.
Another restriction is the ability to make additional repayments.
“While most fixed home loans allow for additional repayments, they usually come with restrictions on how much you can add each year during the fixed period. For instance, comparing all the three-year fixed home loans in RateCity's database, 60% of those that allow additional repayments have a limit averaging $15,000 per year,” says Hutchison.
In addition, there may be restrictions on paying the loan off early, with heavy penalties if you do so.
Borrowers also need to consider what happens when the fixed-rate term expires.
“Many borrowers may not realise that after the fixed period, your home loan reverts to a different variable home loan and it may not be the best variable rate they can receive," says Hutchison.
“It's a good idea to keep track of when your fixed period is coming to an end and use RateCity to compare home loans to make sure you get the best deal for your needs."
Fixed-rate home loans may also not have other features that come with variable rate loans, such an offset account, which reduces the interest rate on your mortgage based on the balance in this account.
Resi Mortgage CEO Lisa Montgomery advises borrowers to always read the fine print on their home loan contracts.
Borrowers can also hedge their bets, by splitting their loan with a portion of their borrowings on a fixed interest rate and another portion on a variable rate.
Splitting loans is popular at times when the direction of interest rates is uncertain.
Some lenders, such as non-bank lender eMoney, offers a lower variable rate if a borrower fixes 25% of their home loan.
 
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Fixed home loan interest rates are attractive, but beware the potential pitfalls and restrictions 

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The total number of owner-occupied housing finance commitments rose by just 0.1% over October in seasonally adjusted terms, according to new ABS figures.
This was well below market expectations of 3%, with Westpac forecasting the number of loans to owner-occupiers to rise by 3.4% in the month.
The principal cause of the poor monthly growth was poor take-up of loans commitments for the purchase of established dwellings, which fell 0.1% to 38,900.
Construction loans fell 0.3% to 4,903, while loans for the purchase of new dwellings lifted by 4.2% to 2,673.
Total loans to owner-occupiers totalled 46,477  up from an upwardly revised 46,425 in September.
On a state-by-state basis, finance to owner-occupiers increased in Queensland (1.3%), WA (1.3%) and SA (3.4%), but fell in NSW (-1.7%) and Victoria (-1.3%) partially reversed gains in September.
In original terms, the number of first home buyer commitments as a percentage of total owner occupied housing finance commitments fell to 18.7% in October 2012 from 19.4% in September 2012.
The average size of a first-home buyer loan fell $1,300 to $288,000.
The average loan size for all owner-occupied housing commitments fell $1,300 to $298,900 for the same period.
In value terms, housing finance rose by 1.8%  to $21.56 billion on a seasonally adjusted basis.
According to Westpac, the positives to come out of the October data was lending to existing owner-occupiers (upgraders) advanced 1% in the month, to be 8% higher over the year, while "investor finance, which can be volatile month to month, was up strongly, 5.5% in the month, following an 8.8% jump in Sep, to be 21% higher than a year". 
"Uptrends in lending to upgraders and investors provide confirmation that lower interest rates are providing a boost to the housing market," says Westpac. However, the bank notes that the October outcome was constrained by a dip in lending to first-home buyers (FHBs), down 2.8%, partially reversing a 4.2% rise in September. "The profile of lending to FHBs has been distorted by changes to incentive/stamp duty arrangements in some states.
"Finance to FHBs has jumped 15% since March, although is only 0.5% higher than October 2011. We anticipate that the uptrend in the FHB market evident since March will continue, as people respond to the marked improvement in housing affordability. However, this cycle is likely to be tempered by household's more prudent approach to taking on additional debt.," says Westpac.
According to JP Morgan economist Tom Kennedy, the fall in owner-occupier and first-home buyer loans suggests the RBA may need to cut the cash rate to further stimulate the housing sector  - one of the sectors the RBA is counting on to pick-up as mining investment peaks.
"The data today just reaffirms that there are numerous headwinds out there," he told AAP.
"That's another reason that really supports further rate cuts."
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Owner-occupier lending up just 0.1% in October as first-home buyer numbers fall but investor and upgrader loans rise: ABS

<a href="https://www.apartments.com.au/developments/broadbeach-qld-4218">Broadbeach</a> offers plenty of reasons to live vertically, but moving from a substantial family home into an apartment can expose the compromises of high-density living. Privacy, room for guests and usable living space tend to matter more when an apartment is intended as a permanent home rather than an occasional coastal base.

A typical residential floor at <a href="https://www.apartments.com.au/new-apartments/the-eveleigh-broadbeach-7-9-surf-parade-broadbeach-qld-4218">The Eveleigh</a>, on Surf Parade,&nbsp;contains just four apartments. The 94-residence development by <a href="https://www.apartments.com.au/developers/hirsch-faigen">Hirsch &amp; Faigen</a> is predominantly made up of expansive three-bedroom homes, with a limited collection of half-floor penthouses above.

Across the apartment floors, <a href="https://www.apartments.com.au/architects/rothelowman">Rothelowman</a> has used the relatively limited number of residences to give each home greater access to natural light and outlook. Living spaces extend towards full-height glazing, while a series of bay windows frame selected views across the Pacific Ocean, city and hinterland rather than treating the building edge as a continuous wall of glass.

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[smartcode_project:default project_id=149670 project_image_fid=360965]

“The apartment floors deliver a collection of homes that embrace controlled outlook via a series of bay windows deliberately framing moments of view,” Rothelowman Director Kim Lowman said.

From outside, those projecting forms contribute to the tower’s faceted profile. Strong horizontal and vertical elements establish its proportions, while the changing position of the sun alters the light, shadow and reflection across the façade throughout the day.

The same attention moves inside the apartments, where the material palette combines warm timber, natural stone, metallic detailing and softer curved forms. Kitchens sit within the main living zone, with stone island benches, integrated joinery and European appliances, before the living areas extend towards the glazing and the outlook.

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[smartcode_project:default project_id=149670 project_image_fid=360981]

Three genuine bedrooms provide room to accommodate family and guests, while two secure car spaces and storage address some of the practical considerations that can become more noticeable when moving from a larger home. Feedback from the display suite has centred on the warmth and restraint of the interiors, with buyers commenting that the residences feel like homes rather than conventional coastal apartments.

A limited collection of half-floor penthouses occupies the upper levels, increasing the scale of the living spaces and adding private balconies and elevated finishes. From this position, the outlook extends between the ocean and hinterland.

Outside the private residences, The Eveleigh separates its shared spaces between the podium and rooftop. The podium is centred on wellness, with subtropical landscaping surrounding a swimming pool and pool terrace, yoga garden, private gymnasium, sauna and hot and cold plunge facilities. Landscaped retreats and pavilions provide additional places to sit away from the main recreation areas.

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[smartcode_project:default project_id=149670 project_image_fid=360966]

Higher in the building, a rooftop pavilion and private dining suite sit alongside resident lounge, barbecue and outdoor dining areas, opening towards panoramic views across the ocean, city and hinterland.

“Buyers are no longer just looking for an apartment, but a lifestyle where they can relax, reset, and enjoy a balanced way of living,” Hirsch &amp; Faigen Director of Sales Matt George said.

Interest to date has come from established owner-occupiers and interstate lifestyle purchasers, including buyers planning a future move to the Gold Coast. Many are coming from larger homes and want to reduce ongoing maintenance without giving up space for family and guests, privacy, two car spaces or the ability to entertain at home.

&nbsp;

[smartcode_project:default project_id=149670 project_image_fid=360969]

Much of that daily life can also take place beyond the building without requiring a drive. Kurrawa Beach and Pratten Park are an easy walk from Surf Parade, while Pacific Fair, Oracle Boulevard, The Oasis, restaurants, cafés, entertainment and public transport are also within walking distance.

The Eveleigh is Hirsch &amp; Faigen's fourth Gold Coast development since entering the market in 2021, following The Hemingway at Palm Beach, The Emerson at Kirra and Yves at Mermaid Beach. Each of the preceding projects sold out before completion.

“Broadbeach had been on our radar throughout our time operating on the Gold Coast,” the developer said. “Following our projects in Palm Beach, Kirra and Mermaid Beach, Broadbeach represented the natural next step for the business.”

The Surf Parade site brought together proximity to the beach, protected coastal outlooks and walkability to dining, shopping and recreation. Hirsch &amp; Faigen also identified the street as an emerging premium residential address, with enough separation from Broadbeach's busier destinations to retain a quieter environment at home.

The Eveleigh is now under construction by Maxcon, with completion forecast for mid-2028. Three-bedroom residences are currently available from $2.87 million.

[smartcode_project_cta:default project_id=149670]

Joel Robinson

The Eveleigh brings house-like apartments to Broadbeach

A long-stalled Campbelltown development site is back in play, with new plans for 139 apartments set to supersede a mixed-use scheme approved almost a decade ago but never built.

The new proposal for 28 Cordeaux Street would deliver 116 market and 23 affordable apartments in a part 14-storey building, bringing a substantial new project into a Campbelltown market where new apartment supply remains limited.

Plans have been filed over the 3,092 sqm corner site at Moore-Oxley Street, around 600 metres from Campbelltown Railway Station and the city-centre retail core.

The site already carries a mixed-use residential approval dating to 2016. Doroch Architects has now been engaged on a larger replacement scheme, which is progressing as a State Significant Development Application following a Housing Delivery Authority determination in August 2025.

The apartment mix comprises 39 one-bedroom, 72 two-bedroom and 28 three-bedroom residences. Two-bedroom apartments make up just over half of the project, while three-bedroom homes account for 20 per cent.

<img alt="First look: New 139-apartment plans revive long-stalled Campbelltown city centre site" data-entity-type="file" data-entity-uuid="136dd5b9-3791-4da6-9e31-76f533f5b4de" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Campbelltown%20da2.png?VersionId=LgOSy9nwf5u.MGswBBwaGGxuX8QpHSl_" />

Of the 139 apartments, 23 will be delivered as affordable housing under the in-fill affordable housing provisions of the Housing SEPP. The affordable component represents 15 per cent of the residential gross floor area and will be managed by a registered Community Housing Provider.

Doroch has sought to break the scale of the building into two distinct elements, with a masonry podium of around four storeys establishing the street edge before the residential tower steps back above.

The corner position has shaped that approach. Cordeaux Street faces toward the commercial and civic centre, while Moore-Oxley Street leads into the lower-scale residential neighbourhood to the south, and the design verification report describes the site as "bridging the commercial core to the north and established residential areas to the south."

The podium will be expressed predominantly in face brick, while the upper levels shift to brushed and grooved concrete cladding with darker metal detailing. Recessed sections, deep balcony edges and landscaping break down the upper form, with an approximately 11.8-metre setback to the northern boundary addressing the adjoining St Peters Anglican School.

<img alt="First look: New 139-apartment plans revive long-stalled Campbelltown city centre site" data-entity-type="file" data-entity-uuid="c8b3d2d3-c561-4bfc-a5d9-a68c0c10dac1" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Campbelltown%20da1.png?VersionId=AeAEyJU02Gk2k5noUj2StziCvdQ7fW4B" />

Campbelltown has been starved of new residential developments in the last decade.

The only other notable development set to come to market this year is ALAND's Queen Square, a mixed-use precinct on over two hectares that will comprise apartments above a vibrant ground-level retail and hospitality dining precinct.

First look: New 139-apartment plans revive long-stalled Campbelltown city centre site

First Look: Sherlock Construction pitches apartments for low-rise Deception Bay

Queensland builder-developer MAYD has revealed the first look at its major North Kirra beachfront development, lodging amended plans that reduce the number of apartments and increase the proportion of larger residences.

The project is planned across a substantial 4,742 sqm amalgamated site spanning seven lots at <a href="https://www.apartments.com.au/new-apartments/2-6-pacific-parade-bilinga-qld-4225">2-6 Pacific Parade</a> and 27-33 Golden Four Drive in Bilin​ga, directly opposite Nor​th Kirra Beach.

<a href="https://www.apartments.com.au/developers/mayd-group">MAYD</a> secured the site for $32.5 million in 2025, in what was one of the Gold Coast's largest property transactions of the year.

The development will be delivered across two stages, with the first stage carrying an estimated gross realisation value of around $360 million.

The latest amendments seek to reduce the overall apartment count and shift the project further toward the owner-occupier market, with larger residences designed for buyers wanting considerably more space than traditionally offered in a beachfront apartment.

The residential mix will include townhomes, oversized two-bedroom apartments, substantial three-bedroom residences and four-bedroom homes.

MAYD has appointed Cera Stribley to lead the architecture and interiors, with the Melbourne-based design practice drawing on the beachfront setting through a series of ocean-facing terraces and heavily landscaped balconies.

Strong horizontal forms and curved balconies will define the exterior, with subtropical landscaping integrated throughout the building to soften the built form and increase the connection between the residences and the beachfront.

The project will also include an extensive collection of resident wellness and lifestyle facilities, continuing the broader shift across the Gold Coast's luxury apartment market toward larger homes supported by resort-style amenity.

<img alt="MAYD" data-entity-type="file" data-entity-uuid="d1bcbb05-e659-4b47-8bd4-1e595315e2ad" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-27%20at%202.05.03%E2%80%AFPM.png?VersionId=jj0XEud1X1DuLt7_KyElhjMdZGOXmLHP" />

MAYD Founder Todd Mould said North Kirra was increasingly appealing to buyers attracted to the more established, lower-density character of the southern Gold Coast.

"North Kirra presents one of the most compelling luxury residential opportunities currently emerging in Australia, combining absolute beachfront with the character and authenticity that buyers are increasingly seeking, and the same sense of tight-knit community that defined Burleigh and Currumbin perhaps 10 or 15 years ago," Mould said.

"With Gold Coast Airport on its doorstep, it also offers a level of accessibility that broadens its appeal across almost every market demographic."

The project comes as the southern Gold Coast continues to attract an increasing share of high-end apartment development and buyer activity.

Kirra in particular has emerged as one of the region's more tightly held beachfront markets, with its relatively low-density character, established surf and hospitality scene and proximity to Gold Coast Airport differentiating it from the higher-density markets further north.

Mould said those characteristics had informed the approach MAYD and Cera Stribley had taken to the project.

"We've worked closely with Cera Stribley to create a vision that is deeply connected to its surroundings," he said.

"Inspired by the coastline itself, the architecture has been shaped around space, privacy and resort-style living, creating a collection of homes that reflects the next generation of luxury on the southern Gold Coast."

MOTIV Managing Director Carly Cottam, who has been appointed to market the project, said buyer attention had continued to move south along the Gold Coast.

"Purchasers who may once have defaulted to Broadbeach, Main Beach or Surfers Paradise are increasingly recognising the value of a genuine beachfront location that offers lower density, strong amenity and a more established sense of community," Cottam said.

"Kirra has a powerful combination of growing demand and genuine scarcity. Beachfront supply is inherently constrained, the area remains relatively low density, and buyers are increasingly placing a premium on locations that feel established, uncrowded and authentic rather than heavily developed."

Cottam said the proximity to Gold Coast Airport was also proving increasingly important for interstate and second-home buyers.

"Being minutes from Gold Coast Airport makes it particularly compelling for interstate buyers, frequent travellers and second-home purchasers who can access an authentic coastal lifestyle almost immediately after stepping off a flight."

The acquisition takes MAYD's active development portfolio to more than $500 million, with the North Kirra project representing one of its largest undertakings to date.

MAYD is targeting an early 2027 launch.

First look at MAYD's North Kirra mixed-use precinct

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Castle Hill, the longtime hub of the Hills District, has been one of the major beneficiaries of Sydney's Metro expansion, with improved connectivity helping drive continued population growth, development and buyer demand across the Hills District.

But despite that growth, the suburb has seen relatively few major new apartment projects brought to market over the past 18 months.

Hills District developer Reve Group is looking to fill that gap with <a href="https://www.apartments.com.au/new-apartments/nova-r-ve-castle-hill-2-garthowen-crescent-castle-hill-nsw-2154">Nova Rêve</a>, a major new mixed-use precinct on the corner of Garthowen Crescent and Old Castle Hill Road, a short walk from Castle Hill Metro Station and Castle Towers.

[smartcode_project:default project_id=152737 project_image_fid=377679]

The project will comprise three residential towers alongside a hotel, restaurants, cafes and a skybar, more than 1,600 sqm of ground-floor retail and almost an acre of landscaped gardens.

It represents the largest project undertaken by Reve Group, the development arm of the Kassis family, which has been building across the Hills District for more than 30 years through Kassis Homes.

[smartcode_project:default project_id=152737 project_image_fid=377675]

Nova Rêve also represents a significant step up from the family's first apartment development, Grand Rêve, which was delivered nearby on Garthowen Crescent.

Grand Rêve introduced larger, house-like apartment layouts and premium inclusions including Wolf and Sub-Zero appliances to the Castle Hill market.

Nova Rêve takes that approach to a precinct scale, combining the residential component with hospitality, retail and substantial public and resident landscaping.

[smartcode_project:default project_id=152737 project_image_fid=377685]

Reve Group Managing Director Sam Kassis said the project reflected the family's three decades of building in the Hills, which has evolved from trophy homes on quarter-acre blocks to larger-scale apartment development.

"Grand Rêve was our first apartment project here and it showed us what this pocket of Castle Hill could be. Nova Rêve is the refinement of that idea: not just apartments, but a place the whole suburb can use," Kassis said.

A key part of that approach is the hotel, which has been designed to operate as an amenity for the wider Castle Hill community rather than solely hotel guests.

It will include restaurants, cafes, skybars and all-day dining, alongside conference and event facilities catering to business functions, community groups and private events.

At ground level, more than 1,600 sqm of shops and cafes will open onto the surrounding streets and landscaped areas.

Almost an acre of gardens designed by Land and Form Studios will run through the precinct, incorporating pathways, seating, barbecue areas and children's play spaces.

[smartcode_project:default project_id=152737 project_image_fid=377680]

Reve Group's Romio Georges said creating an active ground plane had been central to the planning of Nova Rêve.

"There are gardens with pathways, barbecues, seating and play areas, shops and cafes opening onto the street, and a hotel with restaurants and a skybar that anyone in Castle Hill can walk into," Georges said.

The project's elevated position on one of Sydney's highest ridgelines will also provide apartments with outlooks toward the Sydney skyline, surrounding parkland and the Blue Mountains.

More than 80 per cent of the apartments will occupy corner positions, with Turner responsible for both the architecture and interiors.

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Larry Schlesinger

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