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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?

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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