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The Reserve Bank reduced the official cash rate to 2.5% last week, which is good news for people with a mortgage.
However, I’m concerned that this low interest rate environment has produced a very confusing borrowing market for consumers.
With rates coming down and competition heating up, lenders have had to pull out all the stops in order to attract and retain customers.
One tactic that has become popular amongst marketers is to highlight the discount rate in mortgage advertising.
Discounting isn’t new.
Back in the 90s, banks used give their high income customers preferential treatment by offering them discounts, otherwise known as professional packs, with the hope that they could reel the customer in and sell them on other products over the medium to long-term.
Now, as interest rates have dropped and margins on each loan are pressured, the discounting strategy is being used as a broader customer acquisition and retention tool. But with one key difference.
Back in 2003, the advertising of honeymoon rates became very popular, whereby the lender would promote a low introductory rate with no mention of the true long term cost of the loan.
So legislation was created to control interest rate advertising by introducing what’s called the comparison rate. 
The comparison rate is a formula that includes all the costs and fees and it factors in any potential short-term discounting to give the borrower a clear picture of the loan’s true rate, the rate they’d be paying over the long-term.
Comparison rate legislation is still in place today.
However, advertisers who are looking to get their product out to the market in the simplest and most effective way possible, have moved away from advertising the interest rate and the comparison rate in favour of advertising just the discount.
So now you’ll see ads spruiking a “1.05% p.a.” discount off for the life of the loan, but the interest rate is nowhere to be seen, leaving the consumer to dig to find the actual rate.
This makes things all the more difficult for the borrower who just wants to know the true rate that they’ll be paying on their loan.
So now that you know how it works, I urge everyone seeking a mortgage to look past the discounts and to focus on the comparison rate, the true rate that you will end up paying over the life of the loan.
This won’t always be easy because the discounts are designed to catch your attention and change your thinking.
They make you feel like you’re getting a good deal, which may be true for a pair of sneakers or a new sofa. But with interest rates, there is a lot more to the equation than just the per cent off.
So at the very least, find out how much your loan is costing you, after the discounts and deals. Go searching for your true rate, and make sure it’s competitive with what else is in the market. If it isn’t, go get a better one.
Mark Bouris is executive chairman of <a target="_blank" rel="nofollow" href="https://www.ybr.com.au/">Yellow Brick Road</a>, a financial services company offering home loans, financial planning, accounting and tax, and insurance.
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Look beyond the discount rate to find the true cost of your mortgage: Mark Bouris

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A noticeable side effect of low-confidence economies is that businesses start to behave more like spectators than participants. They enter a limbo where they are waiting for a ‘sign’.
This is concerning in a nation like Australia where in a population of 22 million we have 2.1 million business owners.
But you can establish your own sense of the economy and decide on your own confidence. Here are five indicators you can analyse for yourself:
<img alt="numberonejuly11" height="44" width="35" src="/images/stories/2013/07/NUMBERS/numberonejuly11.jpg"> Growth: Australia’s growth in gross domestic product is currently around 2.4% per annum, which is below the 50-year average of 3% but higher than the current average of developed economies (1.6%).
Growth is a measure of how much an economy is expanding each year and is a good starting point for confidence: Australia’s GDP growth is forecast to end 2013 at 2.3% and rise to 2.8% in 2014.
<img alt="numbertwojuly11" height="41" width="35" src="/images/stories/2013/07/NUMBERS/numbertwojuly11.jpg"> Inflation: Inflation is the measure of how much the cost of good and services rises in one year.
Australia uses the Consumer Price Index which averages the prices in a basket of 11 typical consumer items.
To get the inflation figure, the RBA uses different analyses of the CPI. The one that matters is probably the ‘trimmed mean’ which takes out the anomalies.
If inflation is too low, there is not enough economic activity; if inflation is too high, there is too much activity.
The perfect zone is between 2 and 3% and the current rate is right in the middle and expected to be the same in 2014.
<img alt="numberthreejuly11" height="46" width="35" src="/images/stories/2013/07/NUMBERS/numberthreejuly11.jpg"> Employment: The rate of unemployment is important for predicting spending and confidence.
Unemployment is currently rising off a low base and expected to be close to 6% by the end of 2013.
When you consider that France has unemployment around 11% and the USA has 7.7%, Australia is not looking too bad.
Our average unemployment rate since 1978 is 6.95%.
<img alt="numberfourjuly11" height="45" width="35" src="/images/stories/2013/07/NUMBERS/numberfourjuly11.jpg"> Interest rates: The Reserve Bank can lower official interest rates to stimulate borrowing and spending, and raise rates to slow exuberance.
The current official rate is 2.75% – the lowest it has been in 50 years.
<img alt="numberfivejuly11" height="38" width="35" src="/images/stories/2013/07/NUMBERS/numberfivejuly11.jpg"> Government net debt: There are many arguments about what constitutes problematic government debt.
The real problem is that the more the government owes, the more it has to use tax revenues to repay debt.
Australia’s net government debt is around 12% of GDP. Compare this to the US on 89% and the UK on 86%.
Anyone can keep an eye on these basic economic indicators and come to their own conclusions.
The Reserve Bank of Australia and the Australian Bureau of Statistics have excellent web sites and news alerts, and we can all use them.
You can’t change economies, but you can absorb information, decide on your own levels of confidence and plan accordingly.
Be informed – take back control.
Mark Bouris is executive chairman of <a target="_blank" rel="nofollow" href="https://www.ybr.com.au/">Yellow Brick Road</a>, a financial services company offering home loans, financial planning, accounting and tax, and insurance.
 
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5 indicators for the state of the economy

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People confused about superannuation often ask me how they can make the right decisions about their retirement savings.
As I pointed out <a href="/news">in last week’s column</a>, there are no secret formulas for having enough investments so you can fund a comfortable retirement.
What you should be aiming for is to be able to create an income in retirement that covers around 75% of your working life income.
That’s about the only universal formula for retirement savings, and even then, the mix depends on whether you retire as a couple, retire owning your own home, and how much investment risk you can bear in retirement.
Most retirement strategies are technical and financial. And so they should be.
But retirement savers also need to get their own personalities into the strategy.
For instance, you should <a href="/news">understand your risk profile </a>– preservation, moderate, balanced, growth, aggressive – which helps you decide how much weighting to give to shares, cash, property and fixed interest investments such as bonds.
Then you need to get more personal and understand the impact of your life stage on the financial picture.
With life stages comes decisions and priorities. Here is a guide, based on age, that will help you understand what you should be paying attention to:
-          Aged 25 to 35: you’re in an accumulation phase, taking advantage of higher disposable income and fewer family-related expenses. You have a long investment life ahead of you, so you can and should tend towards ‘aggressive’ asset allocations. Why? You’re young enough to weather downturns in share markets and therefore benefit from long term gains.
-          Aged 35 to 45: you should be paying down a mortgage fast, taking advantage of low interest rates to increase home equity and get ahead of the payment schedule (home owners need less cash in retirement than renters or those with a mortgage). You should be paying more attention to your superannuation and although you’re no longer in your twenties, you should keep your investments in ‘growth’ and weighted to equities.
-          Aged 45 to 55: you should be making additional contributions to your nest egg, taking advantage of tax benefits for salary sacrificing to super. Make eliminating all debt a priority, you don’t want to carry it into retirement. If you haven’t already, meet with a financial planner to begin discussing retirement options
-          Aged 55 to 65: you should shift the majority of your investment to preservation assets – cash, fixed income – and use your last working years to increase personal contributions to super. Consider a strategy for “transition to retirement” which includes a capital preservation strategy rather than chasing growth. Focus on making the right tax decisions and decide which lifetime annuity product suits you best.
Of course, life stages are not definitive on their own. But alongside your risk profile, your goals and your savings strategy, they become useful ways of ensuring your actual life is catered for and you’re always on the right track.
Include yourself in the picture, and good luck.
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Choosing the right risk profile for different stages of your life: Mark Bouris

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Twenty years ago, a financial term such as ‘asset allocation’ would have been reserved for fund mangers and analysts.
But with the advent of compulsory superannuation in Australia, we have all become investors now. Even members of retail and industry super funds have to at least understand the concept of asset allocation and to make good decisions about how their retirement savings are invested.
Asset allocation is about putting the right amount of your investments to cash, bonds (fixed interest), shares and property. The idea is that when some of the asset classes are doing poorly, at least one of the classes is doing well. It’s a balancing act.
But how do you make sure you have the right asset allocation for you? The answer isn’t easy, because every person has different needs.
The two main determinants of asset allocation are your risk profile and your life stage.
Let’s start with risk profile.
Risk profile refers to the amount of risk and volatility you accept. Most people know if they are prepared to accept ups and downs in the equities markets to achieve higher returns in the long haul, or if they are prepared to accept low returns of cash and bonds for very little volatility and a high degree of certainty.
Matching an asset allocation to your risk profile is important, especially for long term investors who want to be really comfortable with how their investments are performing. The five profiles, in order by increasing risk, are: preservation, moderate, balanced, growth and aggressive. This is how fund management professionals typically match those risk profiles to asset weightings:
Preservation: 40% cash, 60% fixed interest and no allocation to other classes.
This is for investors who don’t want any volatility in returns; they want to preserve their capital and have returns slightly in front of inflation.
Moderate: 30% cash, 35% fixed interest, 15% Australian shares, 10% international shares, 10% listed property.
The emphasis on cash and fixed interest keeps this portfolio at the non-volatile end of the spectrum but also retains some growth assets to stay further above inflation.
Balanced: 15% cash, 20% fixed interest, 35% Australian shares, 20% international shares, 10% listed property.
Balanced is for people with an appetite for growth but conservative instincts. It seeks to anchor the portfolio in inflation-beating investments but gives almost two-thirds of the portfolio for potential growth.
Growth: 10% cash, 15% fixed interest, 40% Australian shares, 25% international shares, 10% listed property.
This is for people chasing growth with the chance of volatility. Only a token anchor in conservative investments.
Aggressive: 5% cash, 5% fixed interest, 45% Australian shares, 35% international shares, 10% listed property.
This allocation is for an investor who is willing to let their investments ride with the markets and is prepared to accept the volatility of that decision in order to make the greatest gains (which equities offer).
As you can see, there’s an asset allocation for everyone. Your job is to find the right one for you. And that will involve the further complicating matter of life stage.
For those unsure about this, the first step could be an adviser.
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Determining your investment risk preparedness is important: Mark Bouris

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The role of human sentiment in the economy is important – it creates market momentum, but the sentiment itself doesn’t always stick to the data.
In 2011 and 2012, consumer confidence was low and in most cities house prices dropped. But our unemployment was the envy of the developed world, interest rates were falling, inflation was tame and exports were booming.
The data said ‘boom’ but Australians didn’t have the confidence to buy houses.
In the most recent surveys, we’re again seeing a mismatch of sentiment and data.
Take house prices. In the June RP Data-Rismark Home Value Index, the average capital city house price rose a healthy 1.9% in the month, and recorded a financial year rise in house prices of 3.8% across the eight capital cities.
It’s not a boom, but the trend shows confidence.
In the NAB Monthly Business Survey, confidence among business owners actually rose in June so there are now as many optimists as there are pessimists.
However, while consumer and business owner confidence was fairly good in June, the business data in the survey was terrible.
In terms of forward orders, prices and unused capacity, Australian businesses went backwards in June. Business conditions were at their lowest since May 2009 and the sectors hurting the most were retail, mining and manufacturing.
In other words, sentiment was picking up while the economic data started going backwards, just as in 2011-12 sentiment was low during solid economic data.
What are households and business owners supposed to do with this clash of information?
My advice is to always control the controllable things and stay informed about the big picture, rather than be overwhelmed by it.
For instance, if you own a manufacturing business and the news is all about how energy prices and the collapsing mining boom is hurting your industry, there is not much you can do about it.
But you can cut costs in your business and use historically low interest rates to finance new technology, fund an expansion or refinance expensive debt.
In your household you may be reading about a coming period of economic pain and the recent rise in unemployment.
You can’t alter the information but you can put some savings aside, ensure security for your job and pay down debt. Work with what you’ve got, and that includes some very low fixed mortgage rates.
There’s also your attitude, which is another thing you can control: beware of the exuberance of optimism and the panic of fear. Both will lure you into bad decisions, and bad decisions will bring you undone faster than any economic data.
As I write this, the International Monetary Fund has downgraded global economic growth. At the same time, Wall Street booms: the Dow Jones Industrial Average is currently 1,000 points higher than it was at the height of the boom in 2007.
So, does human confidence hang-on in spite of economic predictions? I would love to know what you think.
Mark Bouris is executive chairman of <a target="_blank" rel="nofollow" href="https://www.ybr.com.au/">Yellow Brick Road</a>, a financial services company offering home loans, financial planning, accounting and tax, and insurance.
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It’s not a property boom, but the trend reflects confidence: Mark Bouris

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One of The Beatles, John Lennon, reckoned that life was what happened when we’re busy making other plans.
But sometimes it’s living that puts major plans on the backburner.
Take retirement saving. Most people understand that they’ll need to replace around 70% of their average earnings in retirement. An average couple needs in the order of $1 million to live comfortably for more than twenty years of not working.
Given the size of this goal, you’d expect a certain focus on retirement savings among working people.
But in a survey we did at Yellow Brick Road during June, we found that saving for retirement ranked 12th in priorities out of 16 financial issues.
The most important issue for our sample of 25-49 year olds was general cost of living, followed (in order) by utility bills, mortgage repayments, credit cards and the cost of raising children.
Other issues greater than saving for retirement were medical bills, saving for a holiday, personal loans, rent/board, vehicle finance, insurance costs and paying for renovations. Retirement ranked higher than saving for a wedding.
So, retirement savings isn’t really ignored, it’s just that ‘life’ gets in the way.
However, most Australians can help their retirement planning without having to find extra money.
If you’re employed, your employer must put aside 9.25% of your wages into a superannuation fund. So you’re already saving. But it’s what you do with this superannuation that makes the difference.
<ul>
<li>Start by focusing. Tell yourself: “it’s my money.”</li>
<li>Secondly, ensure your fund is not charging too much in fees. You shouldn’t pay more than 1% per annum to have your savings managed (yet many do). The difference between 1% and 2% of a $100,000 nest egg is $1000. This is money you should keep in your own savings where it can compound.</li>
<li>Thirdly, avoid trading-off potential returns in order to have ‘risk free’ savings. The difference between a ‘conservative’ option in a super fund and a ‘growth’ option can be the difference between earning 4 per cent and 9%. On a $100,000 nest egg, that’s a difference of $5000 each year. Young people especially should not be too conservative in their investment choices.</li>
<li>At the same time, avoid chasing the fund with last year’s hottest performance. You’ll find the best performing funds by looking at how they measure over a three- or five-year period.</li>
<li>Finally, save money with lower pricing on life insurances through your super fund. If you can save $500 a year in life insurance premiums, that’s more money in your retirement savings.</li>
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As with all important investments, there are no magic solutions with superannuation. The point I make is that your goals come closer to reality when you start to focus and to pay attention. Not everyone can throw more money into their super when life is getting in the way. But anyone can take an interest, compare funds and make good decisions.
Good luck.
Mark Bouris is executive chairman of <a href="https://www.ybr.com.au/" rel="nofollow" target="_blank">Yellow Brick Road</a>, a financial services company offering home loans, financial planning, accounting and tax, and insurance.
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Five ways to improve your retirement savings: Mark Bouris

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The biggest financial news for most Australians in the past two years has been the falling cash rate and decreasing mortgage rates.
They’ve come down so far that you can get a variable rate mortgage in the low 5% range and some lenders have 2 or 3-year fixed rate mortgages as low as 4.99%.
But it’s been more complex for small and medium sized enterprises (SMEs). The Reserve Bank, in a recent report, said fees paid in household lending fell in 2012 to $4.1 billion, while bank fees in business lending rose 7% to $7.3 billion.
In another survey, banking analysts East &amp; Partners found that 43% of the SMEs surveyed experienced rate rises on their secured loans in the last six months. Just 0.8% had a rate reduction and 56.1% had no change in their rates. The average rate rise was 5.3%.
I support the workings of a free market, but we should be concerned when official interest rates drop to historic lows while businesses have rate rises.
It’s easy to make this a fight between big corporations and small business, or between big banks and the ‘mums and dads’.
But the problem could go deeper. Australia has so many small and medium sized enterprises (SMEs) – 99.7% of all businesses – that making them pay more for debt than other borrowers will eventually hit the general economy.
If a business pays more for secured debt than the going rate, one response is to raise prices to cover costs. If this reaction gains momentum among businesses, inflation rises.
A business may not be able to raise its prices but it can cut overheads such as reducing employees or cutting back hours and overtime. Given that small and medium sized businesses employ 70% of the private sector work force, this affects employment.
Also, small businesses constrained by the cost of debt find it harder to grow, and then we lose a vital offset to the oligopoly power of corporations – an offset that we all profit from in consumer choice, service and prices.
Here’s another problem: when a small business has cut as much fat as it can in the enterprise, then the owners tighten their belts in the family home. It’s a double effect because they don’t just contract as producers – they contract as consumers.
The worrying aspect of this is that while slightly more than half of the East &amp; Partners respondents said their rates hadn’t moved for six months, the RBA has tracked rising bank fees for business lending. Which means net increases for business owners.
Overriding this issue is the traditional reluctance of SME owners to change banks.
So, are businesses being squeezed by their banks with nowhere else to go? Or, is this a time to attend to the basics of business performance and seek out truly competitive lenders?
Which way will Australian business go?
I would love to know what you think. Talk to me on Twitter.
Mark Bouris is executive chairman of <a target="_blank" rel="nofollow" href="https://www.ybr.com.au/">Yellow Brick Road</a>, a financial services company offering home loans, financial planning, accounting and tax, and insurance.
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Residential interest rates are very attractive but business lending is more challenging: Mark Bouris

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When official interest rates move, mortgage borrowers have decisions to make.
Broadly speaking, you can stick with a variable rate loan which means paying the best market rate in any given month. Or, you can take a fixed rate mortgage where you lock in a rate for a set number of years.
Neither approach is risk-free. If you fix for three years you risk that during that time the variable rate will become cheaper, and you’ll be paying too much on your loan.
The reverse is that you have a variable rate loan during a time when the Reserve Bank puts up the cash rate, and your mortgage goes up too.
So what should borrowers be doing now?
You should think about two perspectives: interest rates and products.
Firstly, form a view on where interest rates are going.
We can gain insight into this by looking at what the professionals think: the ones to watch are the Reserve Bank of Australia and the banks’ swap rate markets.
The Reserve Bank has been cutting the cash rate since November 2011, and it is now at the historically low 2.75%. Will they cut further?
They’re giving themselves the permission to cut again. The latest decision in June included the statement that current inflation ‘might provide some scope for further easing’.
You have to balance that against the fixed rate market. Several lenders currently have 4.99% fixed loans for three years, which is a good deal compared to the best variable loans which are around 5.3%.
The markets that underpin fixed rate mortgages are the ‘swap rates’ – in the past three weeks they slid from around 3.2% to 2.9%, which indicates banks believe the price of money is dropping.
The job for anyone who wants to fix is to look at the RBA and the swap rates and make a determination as to how low the price of money goes and for how long.
You should also look at products. While variable rate mortgages are fairly simple market-linked loans, fixed rate mortgages have potential pitfalls.
If you take a fixed rate at 4.99%, you want to get further ahead than if you took a variable rate. So you want the lender to allow lump sums on the loan so you can pay it out fast. Many fixed rate loans only allow a fixed payment.
Secondly, watch for break fees on fixed loans. If you sell your home during your three-year term and pay out the mortgage, some loans require you to make good on the income the banks otherwise would have earned.
The third point is to know yourself. Some want the certainty of fixing at a low rate while others want the best market rate in any given month. It’s a personality thing and you should understand where you’re comfortable.
As always, be aware of the forces that work on your finances and be informed. If you’re confused, ask an adviser.
Mark Bouris is executive chairman of <a target="_blank" rel="nofollow" href="https://www.ybr.com.au/">Yellow Brick Road</a>, a financial services company offering home loans, financial planning, accounting and tax, and insurance.
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Weighing up fixed vs variable interest rates: Mark Bouris

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I’ve been interested in the commentary about the Aussie dollar’s loss of value against the US dollar.
At the start of May, one Australian dollar could buy $1.05 American; this week it was down to buying US.93¢.
The portents have all seemed grim, but what does the Australian dollar actually mean?
For a starters, the relative value of our currency is not always a bellwether on how we are doing as a nation.
In June 1998, Australia’s economy was growing at 3.9% and John Howard called us the 'strongman' of Asia, yet the Aussie dollar could only buy US.58¢.
In mid-June 2006, the Aussie dollar traded at US.73¢ during a time when the government had surpluses, unemployment was low and we had an equities boom.
What lifted the value of Australian dollar above US$1.00 from late 2010 to May of this year was our trade performance relative to the US economy: resources were being exported in large quantities and at high prices at a time when the US economy was flat.
For most readers this phase meant significant purchasing power when traveling overseas and very good terms from online American retailers.
But life isn’t all about cheap holidays and cut-price Nikons. Our manufacturing sector suffered under a high dollar because it was cheaper for Australians to source goods overseas, while local companies found it hard to export because the exchange rate favourable to Australia made the goods expensive for the importing nations.
Over the past two years we saw a ‘two speed’ economy, where resource exporters could thrive regardless of the high Aussie dollar because what they were exporting was in high demand, while local manufacturers went backwards.
Our domestic energy consumption has flattened due in part to manufacturers operating at under-capacity or going out of business during this phase.
Now that the Aussie dollar is buying less than one American dollar perhaps we should remind ourselves why it is not so bad for our local manufacturing, hospitality and tourism.
With a weakening dollar, Australia looks like a reasonably-priced destination for international tourists and a place where Aussies will holiday rather than going overseas. This also gives the tourism ancillaries – cafes, pubs, restaurants and accommodation – a boost.
These industries are not to be trifled with: the services economy is larger than mining, contributing to around 70% of our GDP and about 75% of employment.
And with the Aussie dollar not so high, Australian manufacturers – many of whom operate at a quality and price premium compared to Asian competition – can find opportunities again where the high dollar is not a hindrance.
There is an argument that the resources boom was actually a market distortion, and that a strong dollar and repressed manufacturing was the price to pay.
Now that the resources boom is passing, perhaps the accompanying lower Aussie dollar is better for a much larger slice of the economy than the high dollar was aiding.
Mark Bouris is executive chairman of <a href="https://www.ybr.com.au/" rel="nofollow" target="_blank">Yellow Brick Road</a>, a financial services company offering home loans, financial planning, accounting and tax, and insurance.
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A lower Aussie dollar isn't all bad news: Mark Bouris

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I’m often asked about property: when to buy to buy, when to sell, what’s happening to the market, have we reached bottom yet?
The latest RP Data-Rismark Home Value Index reflects a mixed bag, showing capital city house prices fell by 1.2% in May – disappointing given the Reserve Bank’s rate reduction to the historically low 2.75% at the start of May.
Still, while monthly stats are informative, most of us need more perspective.
The May figures must be put beside the year-on-year house price index, which shows house prices rising in capital cities by 2.9% between May 2012 and May 2013.
A city-specific look illustrates this further. While Sydney saw a drop in house prices of 1.0% in May, it also experienced a rise of 3.9% over the previous year. Melbourne recorded a decline of 2.1% in May but saw a rise in house prices of 2.1% over the year.
Close followers of house prices are often investors who look for total return on their properties, which combines rental yield and capital appreciation. This can be a good test of overall property health.
RP Data has Sydney’s ‘total gross return’ on property at a solid 8.5%, and Melbourne at a respectable 6.0%.
These are not as high as most investors want (or as high as Perth 11.3%, Darwin 11.2% and Canberra 7.8%), but they are not low enough to dump property and move into stocks and bonds.
We also have to put house prices alongside the Bureau of Statistics’ housing approval numbers. April housing approvals were very small (0.4% growth) but the year to April saw 6.3% growth.
So, the picture for property – while divided by geography and seeming to be going backwards – is actually showing a slow recovery.
Moreover, I always urge people interested in property to take this market in five- to 10-year windows.
Take a look at RP Data’s longer series: the median dwelling price in the three months to May 2013 was $491,000.
If you compared this to the median price in 2010 - $507,446 – you’d think you’d gone backwards. But compare the current median price to May 2008 when it was $446,488. That’s a rise of $44,512, or just under 10% growth in five years – five years of global turmoil and financial crisis.
Property, in the end, is a medium/long term asset: one step back can be countered by three steps forward. But you have to be patient and strategic: your investment needs time. It can’t reach the peaks if you sell in the troughs.
So I suggest people act upon what’s under their control rather than becoming unnerved by property headlines.
This means looking at what affects you, and acting on what you can act upon. With the lowest interest rates I’ve ever seen, with unemployment low, and property prices recovering, this is a good time for smart buying.
Mark Bouris is executive chairman of <a target="_blank" rel="nofollow" href="https://www.ybr.com.au/">Yellow Brick Road</a>, a financial services company offering home loans, financial planning, accounting and tax, and insurance.
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When is the best time to buy property? Mark Bouris

Roseville is poised for a wave of new apartment development following the NSW Government's rezoning of land around Roseville Station under its Transport Oriented Development program.

The new planning controls have unlocked significant development potential within walking distance of the station, with a number of sites expected to be amalgamated and redeveloped in the coming years as developers seek to take advantage of the increased density allowances.

One of the more restrained developments in the precinct, and set among the first to be delivered having commenced well before the recent changes, is Hyecorp's Juliet. The boutique apartment project is already well under construction and remains on track to welcome residents by the end of the year, offering a markedly different proposition to many of the larger-scale developments now likely to emerge across the suburb.

[smartcode_project:default project_id=7395 project_image_fid=278194]

<a href="https://www.apartments.com.au/new-apartments/juliet-roseville-64-pacific-highway-roseville-nsw-2069">Juliet</a> will comprise just&nbsp;34 one-, two-, and three-bedroom apartments opposite Roseville Station. For Hyecorp, which has delivered projects across Sydney's Lower North Shore for more than three decades, Roseville presented a rare opportunity to address a growing gap in the market.

"<a href="https://www.apartments.com.au/developments/roseville-nsw-2069">Roseville</a> has long been one of the North Shore's most tightly held and desirable suburbs, offering a unique combination of village charm, established greenery, excellent transport connections, and proximity to some of Sydney's best schools and lifestyle amenities," Hyecorp said.

"We recognised a growing demand from local homeowners seeking to downsize without leaving the community they have built their lives around. The location presented a rare opportunity to create homes that cater specifically to that buyer profile."

[smartcode_project:default project_id=7395 project_image_fid=278196]

The six-level development has been designed by <a href="https://www.apartments.com.au/architects/pbd-architects">PBD Architects</a> as a collection of residences that feel more like homes than apartments. The brief centred generous floorplans, abundant natural light, quality finishes, and strong connections to outdoor space.

PBD Architects drew inspiration from Roseville's established garden suburb character, creating a building that sits comfortably within its surroundings rather than dominating them. The architecture incorporates natural materials, soft forms, layered landscaping, expansive balconies, and generous setbacks to strengthen the connection between residents and the suburb's leafy environment.

"The focus was on designing spacious, house-like residences for discerning owner-occupiers and downsizers who wanted to remain on the North Shore without compromising on comfort, privacy, or design," PBD said.&nbsp;

"Every apartment was to feel considered, timeless, and highly functional."

[smartcode_project:default project_id=7395 project_image_fid=278195]

Inside, residences feature engineered timber flooring, stone kitchen benchtops and splashbacks, integrated Fisher &amp; Paykel appliances, ducted air conditioning, and large outdoor entertaining areas designed to take advantage of district and treetop views.

Residents will also have access to a rooftop barbecue and lounge area, alongside practical amenities including parcel lockers, EV charging capability, bicycle storage, a dog wash bay, and a basement car wash facility.

The majority of purchasers so far have been local owner-occupiers from Roseville, Lindfield, Chatswood, Killara, and the broader Upper North Shore, many of whom are transitioning from larger family homes.

"Buyers are looking for spacious, house-like apartments that allow them to downsize without feeling like they are sacrificing comfort or functionality," Hyecorp noted.

"They value large kitchens, generous living areas, ample storage, quality finishes, secure parking, lift access, and low-maintenance living."

[smartcode_project:default project_id=7395 project_image_fid=278204]

Juliet sits directly opposite Roseville Train Station and within walking distance of Roseville Village, while Chatswood's retail and dining precinct is only minutes away. The development is also surrounded by some of Sydney's most established schools, including Roseville College, Ravenswood, Pymble Ladies' College, and Knox Grammar, as well as nearby parklands and golf courses.

Juliet is currently more than 75 per cent sold ahead of its anticipated completion in late 2026.

[smartcode_project_cta:default project_id=7395]

Joel Robinson

Juliet to sit quietly amid Roseville apartment boom

Sherpa Property Group has unveiled the third instalment of its Flourish series, securing full approval for the two-tower, $500 million Flourish Soleira development in Palm Beach.

<a href="https://www.apartments.com.au/new-apartments/flourish-soleira-1150-1154-gold-coast-highway-palm-beach-qld-4221">Flourish Soleira</a> will rise from a prominent site in the commercial heart of Palm Beach, the long-time home of Cash Converters and a range of local retailers.

The project will introduce a new retail and dining precinct at ground level, beneath 286 apartments.

[smartcode_project:default project_id=150017 project_image_fid=370959]

“We’re very committed to not only providing affordable residential offerings that are much needed in Palm Beach, but also delivering a vibrant new commercial heart that complements the extraordinary growth of the southern Gold Coast,” Sherpa Property Group founder Christie Leet said.

The development will sit under Sherpa's Flourish brand, which is aimed at providing a pathway into the beachside suburb for locals, first-home buyers and downsizers. In a move designed to assist first-home buyers entering the market, Sherpa has reserved all one and two-bedroom, one-bathroom apartments exclusively for eligible first-home buyers.

[smartcode_project:default project_id=150017 project_image_fid=370964]

“Our vision through Flourish is to create a vibrant retail and lifestyle focal point within the Palm Beach centre zone, delivering thriving communities underpinned by lifestyle-rich locations,” Leet said.

“So far, Flourish has been an incredible success, and we hope to carry this momentum as we progress the next two Flourish projects in Palm Beach.”

[smartcode_project:default project_id=150017 project_image_fid=371430]

Located across 1150-1164 Gold Coast Highway and 3 Sixth Avenue, the development will comprise two towers. The northern tower will deliver 154 apartments, while the southern tower will add a further 132 residences, helping address ongoing demand for new apartments in the tightly held coastal suburb.

Flourish Soleira will also feature the most extensive rooftop amenity offering ever delivered in Palm Beach.

The two towers will be connected by a skybridge, with residents gaining access to a rooftop recreation deck featuring a full-width swimming pool, hot and cold plunge pools, wellness spaces, a gymnasium, private dining facilities, massage treatment rooms, barbecue areas, a basketball court, golf simulator, indoor and outdoor dining spaces, sun lounges and extensive landscaping.

LPS Group is expected to start construction later this year.

Sherpa is already well advanced on construction of its debut Flourish project, Flourish Amargo, located just around the corner from Soleira. Meanwhile, Flourish Oasis, positioned opposite Amargo, recently commenced construction and has nearly sold out its collection of 47 apartments.

[smartcode_project_cta:default project_id=150017]

Sherpa unveils $500m mixed-use Palm Beach precinct, Flourish Soleira

Are mortgage holders set to get a reprieve from the RBA in 2026?

Big Four bank NAB believes so. They are now expecting the next move from the RBA to be a cut, rather than a hike, which they had pencilled in for August. They are unsure of the timing of the cut however, they note in their latest&nbsp;NAB Economics RBA Watch.

NAB Chief Economist, Dr Sally Auld, said recent data suggests the economy has lost momentum and the outlook for rates has shifted, noting that the broader economic backdrop has changed since earlier in the year.

“The next move in the cash rate is likely to be down, but the timing is uncertain," Dr Auld said.

"In February, growth was above trend, the economy was operating above capacity and there was uncertainty over the restrictiveness of rates. None of these conditions exist today,” she outlined.

Dr Auld said recent data pointed to softer momentum across the economy while acknowledging that at the same time, uncertainty remains a key feature of the outlook.

“Both Q1 GDP data and the NAB business survey suggest momentum in the economy has slowed, meaning that growth has likely peaked for the cycle. That said, we are cognisant there is still considerable uncertainty around the outlook, both with respect to activity and inflation.”

Dr Auld said inflation risks and labour market outcomes would be important to watch.

“On the prices side, we are still forecasting above target core inflation through to mid-2027. Margins will compress and weaker labour market outcomes are a risk.”

She said tighter financial conditions are expected to weigh on housing and activity.

“Tighter financial conditions will be reflected in a slowing in house price growth and housing credit growth. In summary, we have greater conviction that the next move in rates is down, but less conviction on the timing.”

Mortgage relief? NAB forecasts RBA rate cut, not hike, after softer economic conditions

A local downsizer has splashed $6.5 million on a penthouse in Perifa's Alex &amp; Willow development in Crows Nest. 
&nbsp; 
The purchaser sold their long-held family home in the area before embarking on a six-month search for the right apartment. After inspecting a range of options across the Lower North Shore, the buyer returned to <a href="https://www.apartments.com.au/new-apartments/alex-willow-crows-nest-82-90-alexander-street-crows-nest-nsw-2065">Alex &amp; Willow</a>. 
&nbsp; 
The buyer profile reflects the project’s broader purchaser mix. <a>Alex &amp; Willow</a> has attracted predominantly local downsizers looking to transition from larger homes without compromising on space or quality, alongside a smaller cohort of upsizers and investors drawn to the project’s location and design credentials. 
&nbsp; 
The milestone sale comes as the project, developed by&nbsp;<a href="https://www.apartments.com.au/developers/perifa">Perifa</a>&nbsp;and delivered by <a href="https://www.apartments.com.au/builders/versatile-made-construction">Versatile Construction</a>, both part of Versatile Group, reaches 60 per cent sold.

[smartcode_project:default project_id=6680 project_image_fid=371325] 
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Eddie Mansour, Managing Partner of <a href="https://www.apartments.com.au/project-marketer/ray-white-projects">Ray White Projects</a>, said the result demonstrates not only a headline price but also depth of demand. 
&nbsp; 
“This is an exceptional outcome and a clear reflection of sustained buyer demand for premium, well-located downsizer product,” Mansour said.

“We’re seeing a consistent pattern of local homeowners selling family residences and reinvesting into high-quality apartments that allow them to remain within their community. Alex &amp; Willow has resonated strongly with this group because it offers genuine scale, thoughtful design and immediate proximity to the village.” 
&nbsp; 
The sale reflects a broader and consistent trend of local downsizers actively seeking high-quality, low-maintenance residences close to established village centres. Agents report that demand for this product type has remained resilient, particularly where developments offer a rare combination of scale, design quality and walkable amenity. 
&nbsp;&nbsp; 
Fabrizio Perilli, Managing Director of Perifa and Versatile Group, said the sale marks a defining moment for the project. 
&nbsp; 
“The penthouse sale is a strong endorsement of the quality we have delivered, alongside our partners, and the clear demand from local downsizers for premium, boutique residences in this location,” Perilli said.&nbsp; 
&nbsp; 
“Most importantly, we’re proud to see the Alex &amp; Willow community beginning to take shape. As we move closer to completion, we’re looking forward to welcoming residents and seeing the project come to life.”&nbsp;

[smartcode_project:default project_id=6680 project_image_fid=338516] 
&nbsp; 
Designed by <a href="https://www.apartments.com.au/architects/nettletontribe">Nettleton Tribe</a> with interiors by <a href="https://www.apartments.com.au/interior-designers/richards-stanisich">Richards Stanisich</a>, Alex &amp; Willow is a boutique collection of generously sized two- and three-bedroom residences in the heart of Crows Nest village.&nbsp;

Completion is slated for early 2027.

[smartcode_project_cta:default project_id=6680]

Alex & Willow, Crows Nest penthouse sells off the plan for $6.5 million

Fresh from launching the first stage of its Wollongong precinct, <a href="https://www.apartments.com.au/new-apartments/keira-place-wollongong-120-122-smith-street-wollongong-nsw-2500">Keira Place</a>, builder-developer Urban Property Group has unveiled plans for the next phase of the masterplanned community.

Now on public exhibition through the NSW Government's Housing Delivery Authority pathway is a State Significant Development Application for a further 657 homes on the prominent gateway site opposite Beaton Park.

The proposal comprises three buildings, including two build-to-sell towers rising 25 and 30 storeys, delivering 391 apartments, alongside a 12-storey co-living building with 266 residences, making it one of the largest co-living proposals currently planned in regional New South Wales.

Of the apartments proposed in the build-to-sell towers, the majority, 310, are two-bedroom dwellings. The balance comprises 44 one-bedroom apartments and 37 three-bedroom residences. Apartment sizes range from around 50 sqm for one-bedroom homes to approximately 90 sqm for three-bedroom apartments.

<img alt="Smith St" data-entity-type="file" data-entity-uuid="19347059-1612-41a0-9c74-b86a657237f8" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-06-10%20at%2010.02.18%E2%80%AFAM.png?VersionId=sWXnaCcA.cIC6N8YT1dg5pJ2e1V3Z6z7" />

The submission says the proposal has evolved significantly from its original Housing Delivery Authority application following extensive consultation with the State Design Review Panel and Wollongong City Council.

The final scheme has been designed to align with the emerging vision for the Flinders Street Precinct, an area identified by Council as a future high-density mixed-use neighbourhood capable of accommodating substantial housing growth close to transport, employment and community infrastructure.

According to the design report prepared by COX Architecture, the development aims to "deliver a built outcome consistent with the future character of the Wollongong CBD while responding to the site's unique constraints and opportunities."

"Our vision for the next phase of the site evolution in Wollongong is grounded in three design pillars that guide the design response: place, natural environment and celebration," COX said.

"Inspired by its surroundings and grounded in the stories of place on Wodi Wodi Country, the design proposal acknowledges the established character of its setting while creating a unique and timeless identity that sits harmoniously within it.

"The design proposal responds to its specific site conditions, acknowledging the vegetation, climate, wind conditions and solar access of the site."

The architecture responds directly to the site's position between Wollongong's urban core and its natural landscape setting.

COX identified views towards Mount Keira and the Illawarra Escarpment as defining features of the site, while the upper levels of the towers will also capture expansive views across the city and out to the Pacific Ocean.

The design team has positioned the tallest buildings closer to the rail corridor, where overshadowing impacts can be better managed while establishing a landmark built form on the northern approach into the city.

<img alt="Smith St" data-entity-type="file" data-entity-uuid="79580d5b-500c-4ebf-9629-797146a4a694" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-06-10%20at%209.51.59%E2%80%AFAM.png?VersionId=WbTB1EKSG.KDfsfz0F3wp1QVa2oCMGR5" />

Urban Property Group secured the 11,000 sqm Smith Street site in 2022 and has since progressed plans for the broader Keira Place precinct.

Construction recently commenced on the first stage of Keira Place, which will deliver 150 apartments across two residential buildings, including 27 affordable housing apartments and 18 specialist disability accommodation dwellings, alongside activated ground-floor retail and commercial space.

Urban Co-CEO Patrick Elias said the commencement of construction marked a significant milestone for Wollongong and reflected the developer's long-term commitment to regional cities.

"Today's groundbreaking is about turning approvals into homes and moving quickly to deliver much-needed housing in Wollongong's city centre," Elias said.

"Keira Place will provide a diverse mix of homes close to jobs, transport and services, while setting a high benchmark for quality, durability and consumer protection."

Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/groundbreaking-marks-start-of-construction-at-keira-place-in-wollongong-cbd">Groundbreaking marks start of construction at Keira Place in Wollongong CBD</a>

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Mark Bouris

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