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If the economists and analysts are correct, this week we’ll be looking at another interest rate cut from the Reserve Bank. Millions of Australian home owners will feel relief on an expected 25-basis-point, but spare a thought for those who rely on the yield of cash assets to fund their retirements. If the cash rate drops to 3% they’ll be left to wonder how far the cash rate will fall in 2013 and whether they can live on these decreasing yields.
The average interest rate on bank deposits and term deposits was 3.5% at October 2012, according to the RBA.
If we agree that underlying inflation is running at around 2%, those living on cash yields are already vulnerable, before even this week’s supposed rate cut.
But depositors have one thing going for them: the banks need their money because it is cheaper than sourcing it from the capital markets. So the banks will compete for those deposits with good rates. You just have to be prepared to look and to act.
I’d start by being active about where your money is and how much it is earning. Make a habit of reading financial media and going to comparison sites such as Canstar or RateCity. Some of the best term deposit rates are 90-day deposits that turn over four times a year. So it pays to be more active.
If the rate offered on your savings account is dropping, look for higher paying alternatives. Don’t worry about having to leave the comfort of your own bank, because your bank may already offer a higher yielding money market account that goes by a name you are unaware of.
There are four main categories that cash investors can use.
Savings accounts: They pay low rates that are variable, have transactional capability at ATMs and branches, and are capital-guaranteed by the government.
Cash management/savings maximiser accounts: They pay higher rates than savings accounts but are also variable; they often lure people in with "honeymoon" rates for four to six months, are commonly online-only; they usually have rules about how many deposits/withdrawals each month, limiting their transactional capability. Also capital guaranteed by the government.
Term Deposits: They pay higher rates than savings accounts (Westpac’s 90-day TD is 4.3%; ING’s 180-day is 4.5%); they are fixed rate and fixed term, so you have no flexibility to withdraw the money during the investment period, but they are capital-guaranteed by the government.
Bond funds: They invest in the corporate and government bond markets, earn higher than TD yields, with very low risk; they pay retrospectively variable rates (same as a managed fund).
Investing in bonds is very low risk and produces yields well over 5%.
Your best way forward is to see an adviser. But if you can’t, commit to being more active with your cash investments and to become an expert on yield.
You can’t control interest rates, but you can decide where you money is invested.
If you’re a retiree or pre-retiree who is concerned about what will happen with your savings, I want to hear from you. <a href="mailto:mark@ybr.com.au">Email me</a>.
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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What savers can do in the face of falling interest rates

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In little over a week the Reserve Bank will meet and decide on official interest rates.
The decision will have symbolic meaning beyond the immediate technical implications of cheaper home loans or lower yields on retirement income.
If the Reserve cuts by 25 basis points – taking us to a 3% cash rate – the broader translation will be that 2013 is going to be a year of low confidence and low growth, meaning lower interest rates.
A rate at 3% would be the lowest cash rate since 1990: it hit 3% as an emergency response in April to September 2009. So how bad are things that the entire market expects us to go to 3% next week?
Lately I’ve been seeing factors that could spell trouble for our economy and suggest a rate reduction before Christmas.
Firstly, growth. The November minutes say growth was above trend at the start of the year but has slackened in the second half. The Reserve does not want to wait too long to see how far growth might weaken, and is likely to reduce rates if it feels the growth forecast is getting worse.
Because China and Japan have slowed industrial output – and their importing of our coal and iron ore is such a large part of our trade performance – you can expect these factors to hit our economic growth.
We also have a problem with productivity, which was once a driver of Australia’s economic growth.
Secondly, employment. For many quarters our unemployment stayed in a range envied by the rest of the world. However, the unemployment rate has started to rise from its 5 to  5.5% levels.
Some of the building approval and house price data in the second half of 2012 is slowly rising and should be fuel for some confidence, but they have not been dramatic upturns. And these sorts of measurements go directly to confidence.
Moreover, confidence has proved stubbornly low in 2012 despite interest rates being at historic lows.
And this week the markets will get data on Australian capital expenditure – a very good indicator of business confidence. A poor result will almost certainly push the RBA to cut.
Of course, we are a middle power in the economic sense, so when the Reserve sets the cash rate it has to balance domestic factors with the international. And some of those international elements have not looked good lately. France, for instance, had it’s government debt downgraded by Moody’s this week, and US unemployment seems fixed around 8%. The Chinese economy has slowed.
I predict a December rate cut of 0.25 percentage points as an early counterweight to slackening growth and rising unemployment. However, if the Reserve still wants to read the December CPI before committing to a rate cut, then the cut will come in February.
Whether it’s December or February, I believe there is evidence of a mild slowdown in Australia’s economy and the Reserve Bank will have to cut rates.
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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Trouble in the economy spells another RBA rate cut

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Business owners have traditionally endured a premium pricing on their overdrafts even when the security they put up is the lowest risk short of government bonds: residential property.
This has created the situation where a tradie or a retailer is paying 6.7% for the mortgage on their family home, yet they are paying 9% on their business overdraft.
So the banks are virtually de-risking the overdraft they write for their business customer but then re-pricing the facility so it boasts a greater margin than is charged on the security itself. In the case of the overdraft, almost twice the margin charged on your mortgage.
There are many reasons given by the banks for this practice. They say business overdrafts involve higher administration costs, that the loan amounts are too small, and that business owners have greater income volatility than employees.
However, the technology now exists to reduce the admin costs of business lending; and the volatility of business owner income is precisely why they need working capital.
So, in reality, the ‘business premium’ is a penalty on the business owner for not being an employee.
I have a problem with this. Firstly, the security is the security. If the security you take on a business is residential property, then that is the security. And residential property risk is valued by the market at 6.7%, not 9%.
I’m also troubled by the mentality where a bank says it has more concern about a business owner who has been trading successfully for 20 years than it does with a person who has had a job for 13 months.
It’s particularly troubling when you consider how penalised some sectors are. Construction is consistently the most popular sector for Australia’s 2.1 million businesses. Mostly, this means tradies.
These people experience tight cashflows because they carry overheads on shorter cycles than they can bill a client. Your average tradie has to pay employees, buy materials, run vehicles and pay insurance on shorter cycles than they are paid. Yet they can also generate large annual incomes through early starts, long hours and working weekends.
To carry this, they need working capital – an overdraft, typically – and they pay a premium rate even though they put up their home as security.
This is unfair and makes no economic sense: small business accounts for 95% of all Australian businesses and employs more than half of the work force.
When you look at how a national economy could operate more efficiently, premium charges for business finance are a logical start. Especially if there’s no reason for the premium in most cases.
I believe there is room for change in the method and the pricing of business debt. Powerful technologies, new funding arrangements and an innovative product will give business owners more choice.
However, as in any competitive market, the lender can only offer a product at a certain price: then it’s up to the borrower to make the decision.
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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'Business premium' bank loan pricing unfair, epecially with residential property as security

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In a week in which the ‘people’s choice’ was re-elected as the President of the United States, I was lucky to be associated with an Australian move to democratise mortgages.
Many readers would have seen the stories in the media about the fact that my business – Yellow Brick Road – and Macquarie Bank have come together to market a more affordable mortgage product to everyday Australians.
These mortgages will be offered at a 1.15 percentage point discount on our base variable rate loan in the first year, reverting to up to a 0.86 percentage point discount for the life of the loan.
In the first year these mortgages will have interest rates of around 5.5%.
The big four banks’ standard variable rate mortgages have an average interest rate of around 6.62%, so you’re probably wondering how an organisation like Yellow Brick Road can market its own mortgage for 5.5%.
The answer lies in the difference between a risk premium and a customer discount.
That is, in Australia we can accept that someone who is wealthy will get a discount from the bank on their mortgage rate. But what Australians will not accept is that they pay more than their neighbour because they are perceived as being riskier.
So the banks do something very clever: they place the higher risk premium on all of their standard variable rate loans.
Then the banks offer "professional packages" to customers they perceive will use more services with the bank and add to profitability, so they drop the mortgage rate from 6.62% to 5.9% for their high net-worth customers who borrow more.
Proof that this works can be seen in the fact that all the big banks do it.
We’ve turned that idea around, and democratised the mortgage discount. Rather than customers waiting to be selected for a lower rate, we tell everyone they can have the lower rate, which after the first year, will be set at a similar level to the banks ‘pro pack’ mortgages.
 
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This move is part of a broader philosophy that I’ve been pursuing since starting Yellow Brick Road. And that philosophy is this: only when the consumer is treated as an important and informed part of the banking system, will we have a truly ‘stable’ system.
An informed consumer knows how to take a home loan that is best for her circumstances and knows how to pay it off faster than the bank wants her to.
And the benefits of competition only exist when there is real choice upon which consumers feel they can act.
I worked to offer choice when I ran Wizard in the 1990s and 2000s, and in those days the borrowers responded.
But while lenders like Yellow Brick Road can disrupt the mortgage market with a discounted interest rate, the borrowers must have the confidence to act.
We have a way to go to get Australians back to full confidence, but I hope this new home loan shows all consumers what is possible.
 *all percentage interest rates are annual percentage values
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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YBR and Macquarie Bank democratising mortgages

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Most of us have focused on the cash rate cycle in recent times, but there’s another cycle I’m interested in: property.
Australian property prices were inflated leading up to the GFC, and then they started falling. Property prices fell more drastically in some of the major cities than in others. However, investment property was hit hard. Many investment apartments were liquidated, as households switched their outlook from debt to savings.
But it could be time to look again.
There are a few observations behind this: firstly, interest rates are near 50-year lows, so debt is cheap.
Secondly, rental vacancies in capital cities are low, meaning strong demand for rental properties.
Thirdly, although house prices are now moving upwards in some cities, it’s a slow recovery nationally, meaning there is value for smart buyers.
Lastly, employment is still strong in Australia, meaning you can find a lender for an investment property.
Where would you start? Personally, I would rather make a profit on my property and pay the tax than be negatively geared, which entails booking a loss. Going for “yield” means buying well and having good equity in the property, so the costs don’t overcome the revenues.
However, if you want to negatively gear a property you must ensure you have an adviser because the ATO does not accept mistakes in your calculations.
But for the basics of what to look for in an investment property, I really like the check list used by RUN Property:
Location: buy close to shops, train stations and schools; Scarcity: Art Deco and scarce architecture increases demand; Features: properties with views, outdoor living spaces or units with off-street parking; Demand: which can be seen in median valued properties, low rental vacancy rates and infrastructure which can support employment; and don’t forget capital growth and rental yield.
Now what about the ‘where’? Tim Lawless, RP Data national research director, has some great property figures via the RP Data Home Value Index. His research shows that, for the quarter, across the major cities, Darwin is the stand-out for rental yields: Darwin houses yielded (5.9%) and units (6%), while Melbourne houses (3.6%) and units (4.5%) were the worst-performing rental yielders in the eight major cities.
Most investors also look for capital gain in the property, and the RP Data figures are interesting for different reasons. In the year to October, only three cities’ dwellings have risen in value: Darwin (8.6%), Perth (3.5%) and Sydney (0.6%).
It’s worth looking also at supply. In Melbourne the supply question is still sorting itself out with apartments, which in the 12 months to October went backwards by 6%.
Regionally, it’s the mining areas where rental yields are strongest: the Bowen Basin and Port Hedland provide high gross rental yields.
When it comes to owning rental property, always do your homework, talk to experts and be realistic (not greedy).
And good luck.
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.
Photograph of Port Hedland by J Thomas McMurray, courtesy of <a href="https://www.flickr.com/" target="_blank">Flickr</a> 
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Do your homework and don't be greedy when investing in property: Mark Bouris

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The announcement of the September quarter Consumer Price Index brought with it a small wave of hope that official interest rates could now be cut by the Reserve Bank on Melbourne Cup Day.
The reason? Wednesday’s CPI came in at 2% for the year, which means the underlying inflation figure should still be at the "low" end of the 2 to 3% inflation target that the RBA operates to, and there is room to cut the cash rate before Christmas.
I’ve been looking at the numbers and talking with economists since the CPI announcement, and we can not assume the Reserve Bank will rush to reduce interest rates.
I’m happy to be proved wrong, however on the balance of probability I now believe the Reserve board is likely to leave interest rates where they are and wait for the December quarter CPI figures, which means the next rate movement would be in February 2013.
Here is my thinking.
The annual CPI of 2% represented a jump from the June quarter’s 1.2%. So, inflation is rising. In the breakdown of the September CPI, electricity rose 15.3%, and ‘gas and other household fuels’ rose 14.2%.
These are extraordinary rises, and I believe the RBA will want at least two quarters of price data on power and gas before deciding where they fit into underlying inflation.
Secondly, we can see rises in cost of living basics such as vegetables (up by more than 10%), housing (4.7%), education (6.1%) and health prices, which increased 7.2% in the year to September. These are direct household cost of living pressures, and the RBA will want to ensure its next move is the right one.
There’s another reason why I think the Reserve will hold interest rates over the holidays and wait for the December CPI: economists themselves have already backed away from predicting a November rate cut. Prior to the CPI announcement, 80% of polled economists predicted a Melbourne Cup Day rate cut. Now it’s 60%.
I know that debt-laden Australians who bought property before the GFC want every rate cut they can get. However, rather than living in hope, it’s better to understand the role of the Reserve Bank: it’s an independent agency charged with issuance of currency, the operation of the financial system, the integrity of the "payments" system and oversight of gold and foreign exchange reserves.
Its broader mission concerns prices, employment and general economic prosperity, which it does by setting the cash rate to meet a medium-term inflation target.”
It is setting the cost of money in order to keep Australia’s inflation rate inside the optimal target range of 2-3%.
I believe the Reserve wants a proper view of where some of the cost of living pressures are going, and it will wait until January 23 when the December CPI is released. It could be the most important number we read about in the next 12 months.
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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Next RBA rate movement likely to be February: Mark Bouris

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When the RBA dropped the cash rate to 3.25% almost three weeks ago, mortgage holders were happy, but retirees and savers missed out.
While mortgage holders stood to save about $38 a month on a $300,000 variable rate loan, there are numerically more Australians saving their money and relying on the yield from those savings than there are people borrowing for a home loan.
The people who have their money in cash savings products are relying on interest rates to sustain them. But the Reserve Bank wants to stimulate the economy so it reduces the cost of money to get people to borrow and spend.
The current situation is poised to create terrible pressure on retirees and those close to retirement, because most economists expect inflation to rise again. Inflation is currently low (around 2%) but its average since 1983 is really 3%.
Economists know that inflation always comes back to trend, and when it does it will be in this context: the online savings accounts, bonus savers and term deposits are yielding in the range of 3% to 4.5%.
So if inflation comes back to around 3% – at time when the RBA is still holding the cash rate around 3% – then the safest forms of saving are not going to produce the income that retirees need.
The first thing to do is assess whether you are getting expert advice. If you have an adviser, call and tell them that you don’t want to be caught between rising inflation and a falling cash rate, and schedule an appointment.
If you’re DIY, then you have to start searching for cash products that take you up the return curve while not taking you too far along the risk axis.
If you want the high yields, you will be typically looking at bank term deposits and online savings accounts, which are safe and can earn up to 2.5 percentage points over inflation.
There are tricks to these. The online “bonus” savers often pay their high rates for the first four to six months, or they punish you for taking money out in any month, or they punish you for not putting money in.
Terms deposits are more straightforward in the rates they pay, but they are inflexible.
Into this environment are creeping high-yield “hybrid” products, some of which are offering yields of 7%.
They seem to be products of the cash variety, but many of them include equity features that expose you to loss.
The problem with these investments that look like cash – but are not really – is that the yields are variable and there is a risk of losing your capital. At which point, you are missing out on the main benefit of a “cash” investment: the safety of it.
There are good cash products with high yields in the current market – do you homework and make sure you know what you’re investing in.
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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Low interest rates to put terrible pressure on retirees

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Lately I’ve been asked why banks reduce their mortgage rates less than the Reserve Bank’s cash rate reduction.
And increasingly my answer is: because the borrowers let them.
Almost two weeks ago the cash rate dropped by 0.25 percentage points, and the big banks reduced their mortgage rates by between 0.18 percentage points and 0.2 percentage points. As I write this, just four lenders passed on the full RBA cut: ING Direct, Yellow Brick Road, bankmecu and My Rate. Those rates now sit between 5.49 and 6.19%.
Compare this to the big four banks’ standard variable rate mortgages which are currently sitting between 6.58% and 6.71%.
It’s clear that one group aims to offer competitive rates while the other group is pretty far off the mark.
Yet it’s the group of lenders with the more expensive mortgages that dominates home lending. Our four largest banks account for more than 90% of all new mortgages.
Confidence is the key to this debate.
Post-GFC, most home borrowers don’t want to pick a fight with the organisation that finances their homes.
I understand the reticence. I’m also alarmed at the uncertainty created when consumers cannot see a link between the Reserve’s cash rate and their own mortgages.
I don’t totally blame the government for this. The Reserve Bank is an independent agency charged with running our monetary policy, and a Treasurer should not tinker with the bank’s operations.
Secondly, the Treasurer has made several changes that help borrowers, including banning mortgage exit fees on new home loans, one-page mortgage fact sheets to make it easier for consumers to shop around and covered bonds to give access to cheaper wholesale funding for lenders.
These changes work well on paper, but the lack of confidence among mortgage holders is still the key to the puzzle.
An online poll run by The Age this week – on the back of a Chris Zappone column – showed that 67% of responding mortgage holders would like to move to a small lender, and only 6% want to move to a big bank. The poll was answered by more than 11,000 people.
That’s a huge preference not being acted upon, but what can consumers do? There are good mortgage comparison web sites online and there are excellent mortgage calculators that show you how much you can save by moving to a lower priced lender. You can also use a mortgage broker who will offer expert navigation of the market.
The law is also on your side, in that your current lender should not be able to penalise you for leaving a variable rate mortgage and going to another, depending on when you took out the loan.
It doesn’t seem like it at times, but consumers are more powerful than they think.
Just add some confidence, and they will rule this market again.
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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Banks keep some of RBA's cash rate cuts because borrowers let them

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The cut in official interest rates this week opened up a debate on the differences in opinion between the Treasury and Reserve Bank economists.
While the Reserve Bank was talking about economic growth as something that had been at trend, the Treasury economists – through Treasurer Wayne Swan – were talking about economic growth operating at trend.
The Reserve Bank sees a softening economy in 2013, while the Treasury is holding to an “at trend” growth figure.
While it looks as though the country’s most powerful economists are at odds, they are actually just operating to different briefs.
The Reserve Bank collects domestic and global data and forms an opinion for the medium term. It looks at Chinese manufacturing and commodity prices, and adds those against domestic measurements such as inflation, house prices and employment.
The Treasury brief is typically more focused on domestic economic data, long term trends and historic information.
Treasury plots long economic cycles while the Reserve Bank plots the smaller ups and downs that add up to a longer cycle.
The Reserve controls monetary policy – the price of (or demand for) money – and it makes its cash rate decision once a month, so it has to break down its horizons into months and quarters and price money appropriately for the forces operating in the longer cycle.
The Treasury, on the other hand, is mostly concerned with fiscal policy (collecting taxes and government spending) and economic reform. Its brief includes the phrase “whole-of-economy”.
Nevertheless, we ended up with a situation on Tuesday where the Reserve Bank was cutting official interest rates in anticipation of a slowdown in 2013 while the government was sticking to its Treasury forecast for sustained economic growth into next year.
Perhaps it would help to list the influences that the Reserve prioritises when it sets the cash rate.
In its statement on Tuesday, Reserve Bank governor Glenn Stevens started with the global economy: the soft economy of Europe, the modest improvement in the United States and the slowing pace in China.
Then he looked at commodity prices for Australian producers and the falling balance of trade. Next came the financial markets – bond yields, access to capital markets, the stock market – and mentioned that the “at trend” GDP growth was being propped up by large capital investment in our resources industry, which is expected to peak in 2013.
He added in housing markets, employment figures, and the low inflation numbers that will be threatened by the carbon tax over the next six months.
However, in the end he made the assessment that should get our attention: “on the back of international developments, the growth outlook for next year looked a little weaker…”
Which shows us that even with low inflation, moderate wages growth and good economic growth, the health of our global trading partners still affects how we price money in Australia.
The lesson is important: we operate in a global context and within economic cycles we can not influence.
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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Are Treasury and the RBA at odds about the Australian economy?

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Lifetime earnings, for most Australians, equal between four and six times the value of the equity in their homes.
But while we insure our house, most of us don’t protect our incomes.
We interviewed more than 500 employed people aged 20 to 45, most of them earning between $50,000 and $100,000 per year.
The first thing I noticed? Just 3.1% were unaware of income protection insurance, but only 6% of Australians protect their income.
Interestingly, 31.7% of the respondents didn’t think they had income protection unless it was provided by their super fund.
I like that tax breaks are given to people who source their income protection insurance through their super funds.
However, many members don’t pay much attention to what they are actually getting from their fund: three out of five of the major industry funds don’t have income protection as a default option, so if you’re relying on them to look after you in this respect, you could be out of luck.
Also, funds offering default income protection have strings attached: one of Australia’s largest industry super funds enforces 90-day wait periods before you can draw the income insurance, and it has capped monthly payouts at $850, regardless of how much you earn.
I believe this is a matter that breadwinners should take control of, regardless of the default insurance in their super.
If you haven’t investigated these policies before, I urge you to talk with an insurance broker or financial adviser. You should have a policy that suits a full-time, part-time or self-employed person, and it must be a policy that covers what you need without paying for what is irrelevant.
The cost is also an important factor in relation to income protection. Our research shows 42% thought it was too expensive.
So how much does it cost? It depends on a number of factors, including monthly benefits, age, profession and smoking status.
Here are four scenarios:
<ul>
<li>Finance manager, male, 41, non-smoker, insuring a $5,000 monthly benefit (30-day wait; 12-month benefit). He will pay $39.52 per month.</li>
<li>Nurse manager, female, 35, non-smoker, $4,000 monthly benefit (30-day wait; 12-month benefit). She will pay $41.42 per month (if any “hands on”, it rises to $53.32)</li>
<li>Domestic plumber, male, 29, smoker, $5,000 monthly benefit (30-day wait; 12-month benefit). He will pay $72.21 per month.</li>
<li>Gardener (unqualified), 47, female, non-smoker, $3,000 monthly benefit (30-day wait; 12-month benefit). She will pay $117.56 per month.</li>
</ul>
Remember, you can take income protection insurance in your super, but you can also buy it personally and claim the premiums as a tax deduction. Also, most companies will offer policies that cut off at 60 years old, but many policies are now extended to 70 – so long as you ask, which is why I suggest talking to a professional adviser.
Start by at least asking what you’d do in the event of illness or injury. Be honest to yourself, and then talk to an expert.
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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You insure your home, so why not your income?

A who's who of Australian surfing, business and entertainment has emerged on title records following the completion of Esprit Rainbow Bay, the latest boutique beachfront apartment development by former professional surfer Paul Gedoun's S&amp;S Projects.

The completed project has attracted an enviable collection of owners, many with long-standing ties to the southern Gold Coast and the surf culture that has helped define Rainbow Bay and neighbouring Kirra for generations.

Given Gedoun's own background in surfing, it perhaps comes as little surprise that some of Australia's most recognisable surfers have chosen to buy into the development overlooking one of the country's most celebrated stretches of coastline.

Pezet Matheson directors Jayde Pezet and Todd Matheson launched the project in late 2021, and have managed the sales campaign all the way through to its sell-out and recent completion.

<img alt="Esprit" data-entity-type="file" data-entity-uuid="08fc6261-b84e-4b09-8a44-66d3067fd0d1" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-07-29%20at%208.51.05%E2%80%AFAM.png?VersionId=4AOcb6ETZwNUnMPdTtz1B3pZAIB_jgZ2" />

Former world champion Mick Fanning, who grew up in Coolangatta, secured an apartment in 2023. He paid&nbsp;$2.07 million. Last year he sold his Bilinga home for over $16 million.

Three-time world champion Joel Parkinson also purchased in the development, alongside big wave surfer Mark Mathews. Mathews bought the most expensive apartment in the building, spending just over $4 million.

Joining them is Rip Curl founder Doug Warbrick, whose company helped shape Australia's global surfing industry over the past five decades.

The appeal of Rainbow Bay has extended well beyond the surfing community.

International DJ Paul Fisher purchased an apartment through his investment vehicle, YLB Developments, an abbreviation of his trademark phrase "You Little Beauty".

The purchase comes as Fisher and his wife Chloe are developing their own luxury apartment project further north in Palm Beach. Their boutique beachfront development, Pescado, comprises just seven apartments on Jefferson Lane, which start from just shy of $6 million. The couple intend to retain the two-level penthouse as their Australian base between international touring commitments.

Melbourne Storm coach Craig Bellamy and his wife Wendy have also invested in Esprit, purchasing two apartments after spending decades holidaying on the southern Gold Coast. They also have a luxury apartment in Joe Adsett's Rockpool, less than 400m away from Esprit.

<h2>Boutique project draws owner-occupiers</h2>

Esprit launched in 2021 and sold strongly, with buyers drawn to its boutique scale, beachfront position and contemporary design.

The completed development comprises 94 apartments across 11 levels, offering expansive floorplans designed primarily for owner-occupiers rather than the investor market.

Crowning the building is Club Esprit, pitched as being the Gold Coast's first residential rooftop wellness centre. The roof features a&nbsp;25 metre magnesium lap pool, which is surrounded by wet daybeds and poolside cabanas,&nbsp;multiple barbecue areas,&nbsp;a yoga and relaxation play lawn, and a private dining room with a kitchen scullery, bar, lounges, and an outdoor terrace.

The wellness centre is&nbsp;fully equipped with a Technogym, ice bath, infra-red sauna, steam room, thermal room, and treatment room. The roof has views spanning&nbsp;Rainbow Bay, Snapper Rocks and the Pacific Ocean.

<h2>S&amp;S Projects continues to shape Rainbow Bay</h2>

S&amp;S Projects founder Paul Gedoun has become one of the key figures behind Rainbow Bay's evolution over the past several years.

After establishing S&amp;S Projects, Gedoun has focused on delivering lifestyle-driven apartment developments designed primarily for owner-occupiers seeking a permanent coastal home.

Esprit is Gedoun's third completed project in Rainbow Bay, following Flow and Awaken, both of which achieved record prices for the suburb.

He is now delivering <a href="https://www.apartments.com.au/new-apartments/radia-rainbow-bay-271-boundary-street-coolangatta-qld-4225">Radia Rainbow Bay</a>, a 38-apartment development on Boundary Street that is currently selling, and has no plans to leave the precinct anytime soon. S&amp;S Projects has also lodged plans for its fifth Rainbow Bay development, an 88-apartment project on Boundary Street featuring a strong wellness focus.

Read more:&nbsp;<a href="https://www.apartments.com.au/news/qld/first-look-s-s-projects-proposes-88-apartment-wellness-tower-at-coolangattas-boundary-street">First look: S&amp;S Projects proposes 88-apartment wellness tower at Coolangatta's Boundary Street</a>

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Joel Robinson

Who's who of buyers revealed as Esprit Rainbow Bay settles

Nature Based Cities (NBC), the not-for-profit organisation focused on improving biodiversity and nature outcomes in urban development, has launched its latest industry design guidelines and accreditation framework, this time targeting precinct-scale residential communities.

The move extends NBC’s influence beyond its initial focus on medium and high-density residential developments. Several projects have already achieved NBC accreditation since the launch of its Medium &amp; High-Density Residential Guidelines in early 2025.

The expansion into masterplanned communities and new residential precincts reflects the growing need for stronger nature-positive benchmarks as Australia’s outer suburban growth corridors continue to expand at pace.

Paul Hameister OAM, NBC Founder and the Executive Chairman of Melbourne developer Hamton who itself leans heavily into nature and biodiversity in its developments, says the&nbsp;nature-first approach to mitigate the effects of climate change has become standard in other parts of the world such as the UK, but Australia is lagging.&nbsp;Australia’s environmentally sustainable design (ESD) rating tools have no minimum mandatory requirements for living landscapes.

“We’ve always wanted to do more, and we know other developers who want to do more, but the ESD rating tools just aren’t there,” Hameister says. “In Australia, you can have a five-green-star rated building that’s concrete and glass with not a blade of grass. 
 
“The focus is on reducing emissions, which is laudable, but there hasn’t been enough attention paid to protecting and re-establishing nature. We need both for the health of the environment and for communities.”

He says that having now&nbsp;made good progress in supporting developers of medium and high-density residential projects, NBC is now looking to bolster better nature-based decision-making and recognise developers of greenfield projects in the outer ring and large inner-ring brownfield precincts, who want to champion nature and living landscape as a defining feature.

Since 2022, the not-for-profit has sought to remove the roadblocks preventing developers from incorporating nature and living landscapes into their projects, shifting the conversation from the reduction of emissions and grey infrastructure, toward recognising nature as an essential infrastructure.

The New Communities Design Guidelines and Scorecard arm developers with the tools needed to deliver a nature positive outcome for their new communities. Intended to be adopted at the outset of the planning process, the guidelines are designed to help create communities that are cooler, healthier and more resilient while also enhancing social wellbeing and long-term economic value.&nbsp;

New Communities developers seeking accreditation will be independently assessed across a range of key criteria including ecology, tree canopy, biodiversity, and walkability. Once the masterplan is complete and submitted for approval, the scorecard is formalised based on proposed outcomes. Projects that meet the NBC criteria will receive either Commended or Exemplary accreditation outcomes, creating a clear benchmark for nature-positive new communities in Australia.&nbsp;

Janis Fischer, Director at Tract and NBC Advisory Council member, said the development of new communities in our suburbs can have a substantial impact on nature and biodiversity.

"By incorporating nature-based design principles at the inception of a project, developers and their design teams can achieve nature positive outcomes that are good for both people and the planet.’’&nbsp;

NBC accredited New Community projects will gain access to NBC branding and marketing tools to help communicate their nature-based credentials to purchasers and the broader market.&nbsp;

Nature Based Cities: A new Australian benchmark for developing nature-positive new communities

Apartment buildings are increasingly being designed around how people actually live day to day, not just how they want a building to look.

For buyers, that shift is showing up in practical inclusions that respond to changing habits. Work-from-home spaces, EV charging, wellness amenities, secure bike storage and parcel management are becoming part of the broader apartment conversation, reflecting a move toward buildings that reduce friction in everyday life.

Online shopping has become one of the clearest examples of that change.

Australians spent a record $82.6 billion online in 2025, with nearly one in four retail dollars now spent online. That has made parcel delivery a regular part of apartment living, rather than an occasional inconvenience.

For apartment residents, however, the delivery process can be less straightforward than it is for detached homes. Parcels may be left in lobbies, redirected to Post Offices, missed entirely, or placed under the responsibility of building managers and concierge teams.

That is why secure parcel infrastructure is increasingly being considered alongside more familiar apartment amenities.

<iframe allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" allowfullscreen="" frameborder="0" height="315" referrerpolicy="strict-origin-when-cross-origin" src="https://www.youtube.com/embed/-VjjLwoViX0?si=A3k7ws9NX35Uac7_" title="YouTube video player" width="560"></iframe>

Australia Post Parcel Lockers offer one way to address the issue. When a parcel arrives, residents receive a notification through the AusPost app or SMS, then collect it using a QR code or one-time PIN. The parcel is kept secure, accessible and removed from common areas.

The broader Parcel Locker network now includes more than 1,500 locations across Australia, positioned at Post Offices, shopping centres, supermarkets, transport hubs and other accessible locations.

For new apartment projects, the relevance is clear. A building’s amenity offering is no longer only about lifestyle spaces, but also about convenience, security and functionality.

As buyer expectations evolve, secure parcel delivery is becoming part of the same design conversation as flexible working, sustainable transport and resident wellbeing.

It is one less thing for residents to worry about, and another example of apartment design adapting to the way Australians now live.

Apartment design is adapting to the way Australians shop

While school holidays and trips to Europe tend to define the winter property market, there's been no cold snap at <a href="https://www.apartments.com.au/new-apartments/the-walden-north-sydney-177-walker-street-north-sydney-nsw-2060">The Walden</a> in North Sydney.

Developer-builder&nbsp;<a href="https://www.apartments.com.au/developers/aland">ALAND</a> sold more than $35 million worth of apartments throughout June, including a $6.8 million apartment that now ranks among the highest apartment sales ever recorded in North Sydney.

SRM Residential agent Ben Stewart said buyer demand throughout June reflected a mix of improving market confidence and longer-term thinking from owner-occupiers.

"We're seeing strong demand from owner-occupiers who are taking a longer-term view," Stewart said.

"Many recognise the opportunity to secure an apartment in an iconic building and premium location while values remain attractive. They may initially lease the property, but the intention is to eventually move in themselves, rather than purchasing purely as an investment."

[smartcode_project:default project_id=134323 project_image_fid=367129]

Located at 177 Walker Street, The Walden will deliver 161 one, two, three and four-bedroom residences across a 30-storey tower designed by Rothelowman. Every apartment occupies a corner position, maximising natural light, cross ventilation and views across Sydney Harbour, the Opera House, Sydney Heads and the northern districts.

Rather than a traditional balcony, the residences feature winter gardens that seamlessly extend the open plan living areas, creating versatile spaces for relaxing or entertaining throughout the year. Floor-to-ceiling glazing draws in natural light while showcasing sweeping views from the building's elevated Walker Street position.

Every apartment features high-end Calacatta marble, bespoke joinery, and fully integrated appliances.

The larger residences have been planned with distinct entertaining and private zones, with many master suites positioned on corners to capture natural light and harbour views. Walk-in dressing rooms, freestanding baths and refined stone finishes reinforce the house-like feel that has resonated with downsizers and owner-occupiers.

[smartcode_project:default project_id=134323 project_image_fid=6393]

Rothelowman Principal Ben Pomroy said the project was designed to make the most of its unique position overlooking the harbour.

"The Walden is a celebration of all things beautiful, curated for those who expect nothing less than exceptional," Pomroy says.

"Meticulously designed entertaining spaces and light-filled living areas that capitalise on capturing the natural beauty of Sydney's iconic harbour."

Residents will also have exclusive access to The Pavilion, a dedicated amenity building featuring a rooftop pool, wellness studio, gymnasium, sauna, concierge service, residents' lounge, private dining spaces and work-from-home facilities.

[smartcode_project:default project_id=134323 project_image_fid=6402]

The project marks ALAND's first major luxury apartment development in Sydney's inner-city market after more than two decades delivering residential communities across Greater Sydney.

Founder and CEO Andrew Hrsto previously said the rarity of the Walker Street site made it an opportunity the company could not overlook.

"This is a rare opportunity to bring a truly exceptional project to life in one of Sydney's most iconic locations, and to showcase our craftsmanship and design expertise at a world-class level," Hrsto said.

[smartcode_project:default project_id=134323 project_image_fid=6383]

The Walden has been introduced to the market at a time when demand for living in North Sydney is at an all-time high. Billions of dollars have been invested in infrastructure, including the recently opened Victoria Cross Metro station, located just 300 metres from The Walden, providing residents with direct access to the Sydney CBD in just minutes.

Private investment has also transformed the area through the arrival of new retail and dining destinations, elevating the lifestyle offering in what was once considered primarily a commercial precinct rather than an aspirational residential address.

The Walden is currently under construction and is scheduled for completion in 2028.

[smartcode_project_cta:default project_id=134323]

ALAND records $35 million in sales in North Sydney as The Walden bucks quiet winter selling season

The long-awaited redevelopment of the former Eastlakes Shopping Centre site has reached a major milestone, with Conquest's plans for a new mixed-use precinct officially placed on public exhibition.

The State Significant Development Application would transform the 1.7-hectare site at <a href="https://www.apartments.com.au/new-apartments/19a-evans-avenue-eastlakes-nsw-2018">19A Evans Avenue</a> into one of Sydney's largest urban renewal projects, delivering 736 apartments above a new shopping centre anchored by Woolworths, alongside specialty retail, dining, commercial space and new public open spaces.

The public exhibition marks the next chapter for the project after <a href="https://www.apartments.com.au/developers/conquest">Conquest</a> acquired the stalled Stage Two development from Crown Group, who completed the first stage across the road prior to their voluntary liquidation.

<img alt="First look: Conquest unveils plans for 736-home Eastlakes Shopping Centre redevelopment" data-entity-type="file" data-entity-uuid="5fca22c5-d1ed-4e2c-8801-03f7df1eafc8" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/eastland%20podium.png?VersionId=uomwr41nF8CmLUZRDcu3mHQechlbxucS" />

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Designed by DKO Architecture, the proposal comprises four residential buildings ranging from 14 to 18 storeys above a two-level retail podium. The development would deliver 736 apartments, including 74 affordable homes, 215 Build-to-Rent apartments and 521 market residences. Provision has also been made for dual-key apartments, which could increase the total number of dwellings to 877.

At ground level, the shopping centre has been designed as the suburb's new meeting place, anchored by a full-line Woolworths and complemented by a curated mix of fresh food retailers, cafés, restaurants, health services and everyday convenience shopping. Generous pedestrian links and landscaped public spaces will connect the retail precinct through to Jack Mundey Reserve, creating a more walkable and connected neighbourhood.

Conquest CEO Michael Akkawi said the redevelopment was about far more than replacing a shopping centre.

"Eastlakes has been overlooked for too long, and this is the community’s moment. We are building a shopping centre and homes, a genuine heart for the suburb, and we genuinely want locals to help shape it."

"We enrich communities through the creation of homes, places, and experiences designed for life, built to last, and owner for generations. That starts with listening, so we warmly encourage everyone with a connection to Eastlakes to view the plans and share their thoughts."

<img alt="First look: Conquest unveils plans for 736-home Eastlakes Shopping Centre redevelopment" data-entity-type="file" data-entity-uuid="22f6fb20-54fb-4bd7-8a92-48fafdd00608" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/eastland.png?VersionId=cugp7s9hrMHGJJdYzkeAkrFoQgnF4GXf" />

DKO said the design had been shaped by the site's landscape setting and surrounding open space.

"Our vision for the site embraces its unique Bidjigal identity by blending the residential living with generous landscaping and a material palette inspired by the Bidjigal locality, and celebrating the panoramic views to Botany Bay and the wetlands reserves."

"Taking cues from Country, we seek to harmonise built form with the landscape and lightly touch the earth. By reconnecting, retaining and regenerating existing ecology, and weaving in natural elements, we can deepen our connection to Country."

The landscape strategy extends across the podium and rooftops, incorporating communal gardens, children's play areas, lawns, community gardens, family gathering spaces and extensive tree planting. New landscaped links will also strengthen the connection between the precinct and Jack Mundey Reserve, while publicly accessible open spaces have been integrated throughout the development.

The proposal builds on Conquest's broader placemaking strategy for the site. Through an ongoing partnership, local artist Joe Rashbrook has been appointed Urban Art Curator, working alongside young residents to transform the project's site hoardings into a public art gallery that allows the community to engage with the redevelopment before construction is complete.

Conquest has rapidly expanded its development pipeline since acquiring the Eastlakes site, with more than $6 billion worth of mixed-use projects now in planning across Sydney, including Stanmore, Castlecrag and Waterloo.

Conquest CEO Michael Akkawi said the redevelopment was about far more than replacing a shopping centre.

Mark Bouris

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