Abadeen has released the whole-floor penthouse crowning its recently completed <a href="https://www.apartments.com.au/buildings/park-residences-cremorne-2-sutherland-street-cremorne-nsw-2090">Park Residences</a> development in Cremorne, bringing the near-300 sqm residence to market for the first time.

Occupying the entire top floor of the boutique Lower North Shore development, the penthouse includes 221 sqm of internal living and a 74 sqm wraparound terrace, with a prized north-facing aspect taking in views across Middle Harbour.

The residence has been completed and fully furnished following a collaboration between Abadeen Executive Chairman Justin Brown and internationally recognised interior designer Jack Freeman, Founder and Managing Director of FREEMAN &amp; CO.

<a href="https://www.apartments.com.au/developers/abadeen">Abadeen</a> and Freeman approached the penthouse as a finished home, sourcing furniture, artwork, lighting and objects from Australia and overseas.

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Pieces from Parisian design house Pierre Augustin Rose sit alongside contemporary artworks and bespoke lighting, with Freeman drawing on recent visits to PAD Paris and Salone del Mobile Milano for the final collection.

Brown said the aim was to create a penthouse that felt more like a large-scale private home than a traditional apartment.

"The experience begins the moment the lift doors open. You're welcomed into an elegant dining room before the home opens into an extraordinary living space framed by sun-drenched harbour views.

"Every time someone walks through the front door they pause. It's not just the view, it's the incredible sense of space, the warmth created by the northern sunlight that fills the interiors, and the way every room connects so effortlessly.

"It has all the proportions of a luxury home, while delivering the effortless lifestyle and personalised experience of living in a world-class six-star hotel, combined with the simplicity and convenience of apartment living."

[smartcode_project:default project_id=114246 project_image_fid=378713]

A secure lift provides exclusive access to the penthouse level, opening to a dedicated arrival foyer and dining area before the residence expands into its main living and entertaining spaces.

Floor-to-ceiling glazing runs across the northern side of the home, connecting the interiors with the terrace and Middle Harbour outlook.

The penthouse also features a fireplace and substantial chef's kitchen, while the wraparound terrace has been designed to accommodate both everyday outdoor living and larger-scale entertaining.

[smartcode_project:default project_id=114246 project_image_fid=378720]

Freeman said the interiors had been deliberately kept restrained to complement the scale, natural light and outlook already established by the architecture.

"The penthouse is a serene study in quiet luxury," Freeman said.

"The interior pairs soft, sculptural forms with warm timber, pale stone and a restrained neutral palette. Curated artwork and metallic accents add depth, while abundant natural light creates a calm, effortlessly refined atmosphere. In my world, less is always more."

Freeman said the approach was centred around collecting individual pieces rather than simply decorating the apartment.

"Every material, every object and every piece of furniture has been curated with intention. I am a true believer in collecting versus decorating.

"The architecture already provided extraordinary natural light, remarkable volume and an uninterrupted connection to Middle Harbour. Our role was to complement those qualities with unique one-of-a-kind pieces of fine art and collectible design sourced from recent travels around the world."

[smartcode_project:default project_id=114246 project_image_fid=378694]

Among the collection are solid bronze sculptures by Lorenzo Quinn, alongside a curated crystalware collection and pieces sourced from international design fairs.

Park Residences sits opposite Cammeray Golf Club, Cammeray Croquet Club and Grand Slam Tennis Cammeray, around 300 metres from Neutral Bay Village and its established collection of restaurants, cafés and retail.

Brown said the combination of a whole-floor floorplan, northern aspect and proximity to Neutral Bay was becoming increasingly difficult to find on the Lower North Shore.

"Completed whole-floor penthouses with a sun-drenched north-facing aspect and sweeping Middle Harbour views are exceptionally rare," Brown said.

"Add a quiet position opposite golf, croquet and tennis facilities, a level walk to Neutral Bay Village and only minutes to the CBD, and you have a lifestyle that's incredibly difficult to replicate.

"This is a home that offers the privacy and generosity of a luxury residence together with the convenience of one of Sydney's best-connected harbourside locations."

The penthouse will be exclusively marketed by SRM Residential.

[smartcode_project_cta:default project_id=114246]

Joel Robinson

Abadeen unveils penthouse at Park Residences in Cremorne

New Brisbane developer Dalcott has unveiled Marrone, the first of three residential projects it is planning in and around Browning Street in South Brisbane.

<a href="https://www.apartments.com.au/new-apartments/marrone-south-brisbane-39-browning-street-south-brisbane-qld-4101">Marrone</a> will comprise 97 predominantly two- and three-bedroom apartments, with larger residences aimed squarely at the owner-occupier market.

The project will sit in a quiet pocket of South Brisbane between South Bank and West End, close to the restaurants, cultural attractions and riverfront amenity that have driven the suburb's continued transformation.

Dalcott is targeting buyers looking for more space and amenity than has traditionally been offered in the inner-city apartment market, particularly downsizers and professionals wanting to remain close to the city.

[smartcode_project:default project_id=149951 project_image_fid=377072]

Resident facilities will be concentrated around an extensive rooftop amenity offering, including a swimming pool, spa, infrared sauna, warm and cold magnesium plunge pools, private lounge, dining room and outdoor entertaining areas.

Dalcott Managing Director Lachlan Cottee said South Brisbane's combination of lifestyle, connectivity and established character had been central to the approach to Marrone.

“South Brisbane offers a combination of lifestyle, connectivity and character that’s difficult to replicate elsewhere in Brisbane,” Cottee said.

“Our focus has been on creating homes that feel connected to that environment while providing the level of design, functionality and quality that today's owner-occupiers expect.”

The residences will feature an expressive material palette. Italian Calacatta Viola marble, known for its deep burgundy veining, will be paired with aged brass tapware, Chestnut engineered timber flooring and Tuscan Oak joinery.

<img alt="Marrone" data-entity-type="file" data-entity-uuid="b8d833da-3b30-496a-ae30-07bdff371b50" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-25%20at%2010.52.35%E2%80%AFAM.png?VersionId=P6DAgOfaQzIXljKKK5j3e5NhWtrHIu9G" />

Bathrooms will feature Nara Japanese ceramics and glass bricks, while clay, walnut and brass lighting will be used throughout the apartments.

Dalcott has appointed Realm Projects, led by Managing Director Shane Foley, to handle sales and marketing following previous sold-out collaborations between the groups.

Foley said the Brisbane apartment buyer had become increasingly focused on the quality of the home itself rather than simply securing an inner-city address.

“We expect to see strong demand from buyers who still want all the advantages of inner-city living but aren’t prepared to compromise on the quality of their home,” Foley said.

“Many will be downsizers looking to leave behind the maintenance of a traditional family home without giving up the space they enjoy, while others are likely to be professionals wanting a residence that reflects the way they live today.”

“Marrone responds directly to that demand, with generous floorplans, exceptional resident amenity and a location that places some of Brisbane’s best dining, entertainment and cultural attractions within walking distance.”

<img alt="Marrone" data-entity-type="file" data-entity-uuid="61f7b22f-899e-4c0f-940a-7d3ab1bfb93a" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-25%20at%2010.52.44%E2%80%AFAM.png?VersionId=PvN1JYxBgUpyCB7efKo52WGdSDs9nmim" />

Marrone will be the first project delivered as part of Dalcott's broader investment in the precinct.

It will be followed by La Terra, a boutique project comprising penthouse-style, single-level apartments on a northeast corner site with extensive resident amenity and city views.

Cottee said Marrone represented the first stage of the group's longer-term plans for the area.

Dalcott was established in 2025 by Lachlan Cottee and Ben Dalgliesh, combining development and construction capability under an integrated model and focusing on architecturally considered residential projects.

Marrone will initially be offered through a pre-release registration campaign ahead of its broader public launch.

Dalcott targets owner-occupiers with South Brisbane debut Marrone

Parnell Developments is the latest to seek significant uplift through the NSW Government's Housing Delivery Authority on a Strathfield site previously approved for a much smaller apartment development.

Parnell has sought approval for a 32-storey mixed use tower across&nbsp;<a href="https://www.apartments.com.au/new-apartments/7-lyons-street-strathfield-nsw-2135">3-7 Lyons Street and 18 Parnell Street</a>, a&nbsp;1,857 sqm site around 400 metres from Strathfield Station. The building would yield 160 apartments, 15 per cent of which will be dedicated affordable as per the government mandate for buildings seeking additional uplift.

Approved previously was a nine-storey building back in 2022 with just over 30 apartments. That approval came prior to the project being&nbsp;progressively reconsidered as planning policy shifted toward greater density around transport hubs.

<img alt="Strathfield" data-entity-type="file" data-entity-uuid="c5af5281-a643-4eb2-b8c4-0081b59c04c7" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-25%20at%209.16.48%E2%80%AFAM.png?VersionId=37bd3mI7rHNpThOV_75VO8xsGFwWOi1u" />

Turner has designed the latest building that would replace&nbsp;existing detached homes across the four lots.

The apartment mix comprises 22 one-bedroom apartments, 107 two-bedroom and two-bedroom-plus configurations, and 31 apartments with three or more bedrooms. The scheme also includes 203 car spaces across six basement levels and 58 bicycle spaces.

The proposal has been designed around a three-storey podium addressing Lyons Street, with the tower rising above and stepping toward its upper levels.

Turner said the podium was deliberately scaled to respond to the existing street, while the taller element has been designed as part of the emerging skyline anticipated around Strathfield Town Centre and the wider Homebush transport-oriented development precinct.

The Lyons Street frontage would have a more active, pedestrian-focused character, incorporating the commercial tenancy, landscaping and a brick-framed podium with an awning.

<img alt="Strathfield" data-entity-type="file" data-entity-uuid="14b20874-b8c3-4ac7-bc03-92be9a69fb78" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-25%20at%209.17.48%E2%80%AFAM.png?VersionId=av.9TxtqIRTC6v3PkSuu1rL9rreWoe2h" />

Parnell Street, which faces the railway corridor, has been given a different architectural treatment, with double-height breeze blocks, landscaping and communal areas used to soften the interface with the rail infrastructure.

The tower itself uses curved and recessed facade elements, with wave-like indentations across the northern elevation breaking the building into three vertical forms.

A palette of grey concrete, brick and breeze blocks is complemented by clay and terracotta accents, while the upper tower adopts a lighter expression through articulated slab edges, vertical fins and recessed glazing.

Residents would have access to 467 sqm of communal open space spread across three levels. The ground floor would accommodate the more active resident areas, including barbecue and group gathering spaces and an internal communal room capable of being used for working from home.

A more passive viewing deck is proposed at level three, overlooking the ground-level landscaping and neighbouring tennis courts, while a rooftop "sunset deck" at level 30 would provide another social and relaxation space.

<img alt="Parnell" data-entity-type="file" data-entity-uuid="c3dce401-a80f-4682-8471-4caa01180880" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-25%20at%209.17.34%E2%80%AFAM.png?VersionId=Xyo8JVqbOhSJXNy6Ih.1cHL.O6i0bGR." />

&nbsp;

&nbsp;

&nbsp;

Strathfield has been earmarked for substantial change through the Strathfield Town Centre planning work and the nearby Homebush TOD precinct.

Turner's report says the project has been designed to act as a transition between the existing low and mid-rise development surrounding the site and the taller built form expected to emerge across the town centre.

The proposal is being assessed as State Significant Development under the HDA pathway, alongside the concurrent request to amend the Burwood Local Environmental Plan.

First look: New apartment tower pitched for Strathfield Town Centre precinct

An $18 million penthouse has hit the market in Main Beach as construction tops out on La Mer, the $155 million apartment development rising just metres from the beach.

Spanning around 600 sqm across the top two levels of the 29-storey tower on Main Beach Parade, the four-bedroom penthouse is one of the latest eight-figure residences to test the upper end of the Gold Coast apartment market.

Its launch comes amid continued activity at the very top of the market, following the $30 million off-the-plan sale of a Burleigh Heads penthouse earlier this year, which surpassed the Gold Coast's previous $24 million apartment record set in 2023.

The <a href="https://www.apartments.com.au/new-apartments/la-mer-main-beach-3580-main-beach-parade-main-beach-qld-4217">La Mer penthouse</a> has been designed as a private residence in the sky, with 360-degree views spanning the ocean, Broadwater, hinterland and Gold Coast skyline.

[smartcode_project:default project_id=95606 project_image_fid=378731]

All four bedrooms have ensuites, while the ocean-facing master retreat occupies around half of the upper level and includes its own lounge, private balcony, two walk-in wardrobes and an oversized ensuite with a freestanding stone bath positioned to take in the views.

The residence also features a kitchen designed to accommodate a private chef, a 3.6-metre island bench, expansive butler's pantry, wine cellar and integrated bar.

[smartcode_project:default project_id=95606 project_image_fid=378732]

A rooftop pool and substantial outdoor entertaining area with its own kitchen sit above the residence, while a grand staircase connects the two internal levels. The penthouse also has its own express lift.

OTP Group Director James Elliott, who is marketing La Mer, said the penthouse was expected to appeal to high-net-worth buyers seeking either a permanent Main Beach residence or Gold Coast holiday home.

“The La Mer penthouse represents exceptional value, considering its quality design, size, privacy and location, not to mention the 360-degree views capturing the beach and Gold Coast Broadwater,” Elliott said.

“We’re anticipating interest from high-net-worth individuals and couples seeking a residence or holiday home in the sought-after village enclave of Main Beach, taking advantage of the unprecedented growth underway in the area and neighbouring The Spit.”

[smartcode_project:default project_id=95606 project_image_fid=378736]

La Mer is being developed by developer-builder ODUS and Nazero, in partnership with funder Metrics Credit Partners.

ODUS Director Byron Sakha said topping out the tower had provided the opportunity to release the project's most significant residence.

“We’ve worked with internationally-recognised studio Sici Design on the penthouse interiors, with a focus on ensuring it isn’t luxury for luxury’s sake. Every element has been thoughtfully designed to enhance quality of life for those who call it home,” Sakha said.

“The views are the hero of virtually every space, but we’ve given equal attention to the fittings and finishes, so every detail exudes elegance and refinement.”

Sici Design Founder and Director Maria Papadopoulos said the extensive views became an integral part of the interior design rather than simply something the residence was designed around.

“The views weren't something we designed around, they became part of the design itself, with the true luxury of La Mer in its feeling of peace, calm and wellbeing,” Papadopoulos said.

“Luxury isn't defined by how something looks, but how it makes you feel, and we believe a luxurious home should be beautiful to live in, not stressful to maintain.”

The interiors combine Austral Dream Dolomite natural stone and travertine with timber flooring and a restrained coastal palette.

[smartcode_project:default project_id=95606 project_image_fid=378734]

Designed by Plus Studio, La Mer is one of the more boutique additions to the rapidly changing Main Beach apartment market.

The tower comprises just 24 full-floor, three-bedroom plus multipurpose room apartments below the two-level penthouse, giving the project a considerably lower density than many of the larger towers being developed across the Gold Coast.

Residents will have access to a pool and spa, gym, sauna, barbecue facilities, private sun lounges, yoga lawn and outdoor beach shower.

The penthouse has been released as part of the final collection of residences at La Mer, with remaining apartments priced from $4.3 million.

Construction is expected to complete later this year, with a fully furnished display apartment now open on level four.

[smartcode_project_cta:default project_id=95606]

ODUS releases $18 million penthouse crowning La Mer Main Beach

<a href="https://www.apartments.com.au/developers/far-east-consortium">Far East Consortium</a> is preparing to commence construction on <a href="https://www.apartments.com.au/new-apartments/640-bourke-street-melbourne-640-bourke-street-melbourne-vic-3000">640 Bourke Street</a> this October, marking the next milestone for the Melbourne CBD development and its higher-end Eliza Collection.

Spanning levels 44 to 68 of the 68-storey <a href="https://www.apartments.com.au/architects/rothelowman">Rothelowman</a>-designed tower, the Eliza Collection has been conceived as a lower-density offering within the broader development, with only five apartments on each floor, dedicated lift access and a collection of resident spaces reserved exclusively for Eliza Collection residents.

The Eliza Collection forms part of Far East Consortium's broader move toward larger-format residences at 640 Bourke Street, where the number of apartments was reduced from earlier plans as apartment sizes increased.

[smartcode_project:default project_id=509 project_image_fid=365685]

"What it's meant for 640 Bourke is we've actually reduced the number of apartments. We've increased the overall size of the apartments. We don't have any studios in here, and what that does for a project is it elevates it," Far East Consortium Director of Sales and Marketing Lauren Sheldon said.

Rothelowman Associate Jun Chang said the design process provided an opportunity to create more generous floorplans.

"We were given the opportunity to be more generous. The apartments became bigger and squarer than any other apartments which had been designed in the CBD before that."

[smartcode_project:default project_id=509 project_image_fid=368869]

That thinking carries through to the Eliza Collection, where the residences have been designed around the space and functionality associated with a larger home, but positioned high above the centre of Melbourne.

Kitchens are equipped with Gaggenau appliances, a butler's pantry, temperature-controlled wine cabinet and sculptural pendant lighting, while engineered timber flooring, stone and porcelain finishes and custom cabinetry feature throughout the broader interiors.

Privacy and security are another point of distinction. Eliza Collection residents have dedicated lift access, while 640 Bourke Street will provide concierge services and secure resident parking. Short-stay accommodation, including Airbnb, will not be permitted within the development.

[smartcode_project:default project_id=509 project_image_fid=365689]

Eliza Collection residents will also have exclusive access to selected amenity spaces across levels one and three of the restored Eliza Tinsley building. These include the Salon with grand piano, an art therapy room, private dining rooms and treatment rooms.

They sit within more than 3,000 sqm of amenity planned across 640 Bourke Street, alongside facilities including a pool, gym, whisky lounge and further social and wellness spaces.

The Eliza Tinsley building itself is central to the wider project's identity. Rather than treating the existing Eliza Tinsley façade as a separate element, Rothelowman used it as a starting point for the architecture of the new tower, with the historic building to accommodate the project's gallery and lobby.

"It's a significant asset and wants to be celebrated and experienced by all residents every single time they go in and out of the building," Rothelowman Principal Stuart Marsland said.

[smartcode_project:default project_id=509 project_image_fid=368872]

The tower will rise behind the retained heritage building at 640 Bourke Street, placing residents within walking distance of Southern Cross Station, Flagstaff Gardens, Queen Victoria Market and the Docklands waterfront.

With construction scheduled to begin in October, Far East Consortium has established an onsite display gallery at 640 Bourke Street, including fully built apartments that allow the project's layouts, materials and finishes to be inspected at full scale.

A fully built Eliza Collection apartment is also available to view at the display suite by appointment ahead of the planned October construction commencement.

Eligible purchasers who buy before construction commences can secure the full available off-the-plan stamp duty savings, subject to eligibility and applicable conditions.

[smartcode_project_cta:default project_id=509]

Far East Consortium brings Eliza Collection to 640 Bourke Street ahead of October construction start

Sydney’s property market is known for high prices, competitive bidding, and mounting pressure on first home buyers. But change is on the horizon.

From late 2025, eligible first home buyers in New South Wales will have access to a new federal government initiative aimed at addressing affordability: the Help to Buy Scheme.&nbsp;

<h2>What is the Help to Buy Scheme?</h2>

The program introduces a shared equity model intended to reduce the upfront cost of entering the property market, particularly in high-demand urban areas such as Sydney.

The scheme operates under a shared ownership structure in which the federal government takes an equity stake of up to 40 per cent for new homes, or 30 per cent for existing dwellings. This arrangement allows eligible buyers to significantly reduce their loan size and avoid the added cost of Lenders Mortgage Insurance (LMI).

Under this model, purchasers can enter the property market with as little as a two per cent deposit, well below the traditional 10 to 20 per cent usually required. The government’s contribution is not a loan but a co-ownership stake in the property. As such, there is no interest or rent charged on its portion.

Because the government’s equity combined with the buyer’s deposit typically meets or exceeds the 20 per cent threshold, LMI does not apply. The remaining balance, generally between 60 and 70 per cent of the property’s value, is financed through a standard home loan with a participating lender.

The government's equity in the property remains in place until the buyer chooses to repay it voluntarily or until the property is sold. Buyers can buy back the government’s share over time, in increments of at least five per cent, depending on their financial situation.

There is no fixed repayment timeline, but the amount to be repaid will be based on the property's market value at the time of repayment, not the original purchase price.

<h2>How do you qualify for the&nbsp;Help to Buy Scheme?</h2>

To qualify for the Help to Buy Scheme, applicants must meet the following conditions:

<ul>
	<li>Be an Australian citizen at least 18 years of age.</li>
	<li>Be a first-home buyer who does not currently own property.</li>
	<li>Intend to live in the property as their primary residence.</li>
	<li>Earn less than $100,000 per year for individuals, or $160,000 for couples.</li>
	<li>Purchase a property within the regional price caps, currently $950,000 in Sydney, though this is expected to rise to approximately $1.3 million ahead of the program’s launch.</li>
</ul>

While the Help to Buy Scheme does not solve affordability challenges across the board, it does offer a more accessible pathway for a defined segment of the market, particularly younger buyers with moderate incomes who have been priced out of traditional lending routes.

The scheme is expected to commence in NSW in late 2025, as part of a national rollout.

Under the new model, purchasers can enter the property market with as little as a two per cent deposit, well below the traditional 10 to 20 per cent usually required

Help to Buy Scheme: What first home buyers in NSW need to know

The First Home Owners Grant (FHOG) is a government initiative designed to help eligible first-time home buyers by offering financial assistance towards the purchase or construction of a new home.

While the FHOG is a nationwide program, it is administered separately by each state and territory, meaning the eligibility criteria, grant amounts, and property requirements can vary depending on your location. This means that the amount available and the conditions attached to the grant will differ, so it is important to check the specific guidelines for your state or territory.

It’s important to note that the FHOG is just one of several incentives available to first home buyers. In most states and territories, the grant is not linked to stamp duty exemptions or concessions, with the exception of the Australian Capital Territory (ACT). The FHOG is typically a one-off payment, reducing the overall cost of purchasing or building a new home before any stamp duty concessions are applied.

Below, we provide a breakdown of the First Home Owner Grants available across Australia, outlining the specific details for each state and territory.

<h2>New South Wales First Home Owner Grant</h2>

First Home Owner Grant: Offers a $10,000 grant for new homes valued up to $600,000. For land purchases and owner-builders, the threshold extends to $750,000.

Stamp Duty Benefits: Provides full stamp duty exemption for homes valued up to $800,000, with concessions available for properties up to $1 million.

<h2>Victoria South Wales First Home Owner Grant</h2>

First Home Owner Grant: Provides a $10,000 grant for first-home buyers purchasing or building new homes valued up to $750,000.

Stamp Duty Benefits: Offers full stamp duty exemption for properties up to $600,000, with concessions available up to $750,000.

<h2>Queensland First Home Owner Grant</h2>

First Home Owner Grant: Offers $30,000 for contracts signed between 20 November 2023 and 30 June 2025. The FHOG applies to new homes valued up to $750,000.

Stamp Duty Concessions: Provides additional concessions for properties valued up to $800,000.

<h2>Western Australia First Home Owner Grant</h2>

&nbsp;

First Home Owner Grant: Offers a $10,000 grant for new homes valued up to $750,000 in the southern regions and up to $1 million in the northern regions.

Stamp Duty Concessions: Available for homes valued up to $600,000 for transactions entered into on or after 9 May 2024.

<h2>Australian Capital Territory First Home Owner Grant</h2>

First Home Owner Grant: Replaced by the Home Buyer Concession Scheme, offering full stamp duty concessions for eligible buyers.

<h2>South Australia First Home Owner Grant</h2>

First Home Owner Grant: Provides up to $15,000 for new homes, including houses, apartments, and townhouses. As of 6 June 2024, there is no property value cap for eligibility.

Stamp Duty Relief: Available for new homes and vacant land purchases.

<h2>Tasmania First Home Owner Grant</h2>

First Home Owner Grant: Offers a $10,000 grant for new homes and off the plan purchases.

Stamp Duty Exemption: Between 18 February 2024 and 30 June 2026, first home buyers of established homes valued up to $750,000 receive a full exemption on property transfer duty.

<h2>Northern Territory First Home Owner Grant</h2>

First Home Owner Grant: The Northern Territory provides a $10,000 grant for new homes only. Additional government grants and concessions are available for first home buyers.

Stamp Duty Exemption: The only stamp duty exemption available to property buyers is the House and Land Package Exemption (HLPE).

Eligibility criteria and application processes differ across states. Prospective buyers should refer to their respective state revenue offices for full details on grant availability, conditions, and additional concessions.

Every First Home Owner Grant for new property by state

In the ever-evolving landscape of sustainable architecture and environmentally conscious design, systems and ratings in place can help determine the energy efficiency of residential buildings in Australia.

Australia has multiple building rating systems that evaluate energy efficiency and sustainability in existing and new building designs.

Some systems assess individual building components, while others provide an overall rating for the entire structure.

A rating system ensures that homes are comfortable and energy-efficient, whether you are buying, renovating, or building.

NatHERS (Nationwide House Energy Rating Scheme) is a common way for new homes to meet energy efficiency requirements.

As new developments continue to shape the urban environment, understanding NatHERS ratings becomes essential for developers and homeowners. This article delves into the concept of NatHERS ratings, their significance, and how they contribute to creating energy-efficient homes.

<h2>What is NatHERS?</h2>

NatHERS is a national initiative implemented by the Australian government to promote energy efficiency in residential buildings. The scheme aims to provide a standardised method for assessing the thermal performance of homes, considering factors such as insulation, orientation, ventilation, and building materials.&nbsp;

NatHERS ratings are the most common way new homes meet the National Construction Code's (NCC's) minimum energy efficiency requirements.&nbsp;

NatHERS assessments provide thermal and whole-home ratings for new homes, townhouses, and apartments.

The rating helps evaluate the energy performance of buildings, guides homeowners and developers to make informed decisions about the energy efficiency of their properties, and encourages the construction of more sustainable, comfortable, and cost-effective homes.

<h2>How NatHERS Ratings Work</h2>

NatHERS ratings are determined through four accredited software tools (AccuRate, BERS Pro, FirstRate5, HERO) using a calculation engine CSIRO developed to predict building temperature based on various factors.

The tools can model complex effects of building mass, insulation, window size, and other elements.

The outcome is a star rating that reflects the building's overall thermal efficiency, indicating how well it can maintain a comfortable indoor temperature without excessive reliance on heating or cooling systems.

The star rating scale ranges from 0 to 10, with a 6-star rating being the minimum requirement for compliance with the National Construction Code (NCC).&nbsp;

Achieving a higher star rating demonstrates a commitment to energy efficiency and sustainability, as the building is better equipped to minimise its environmental impact and reduce long-term energy costs.

Anyone can use NatHERS tools, but accredited assessors can provide certified ratings and professional advice.

<h2>Benefits of Higher NatHERS Ratings</h2>

Energy Efficiency: Buildings with higher NatHERS ratings are more energy-efficient, requiring less heating and cooling energy. This reduces the structure's carbon footprint and lowers occupants' energy bills.

Cost Savings: Homes with higher NatHERS ratings are generally more energy-efficient, resulting in reduced energy consumption for heating and cooling. This translates to lower energy bills for homeowners, making sustainable living environmentally friendly and economically viable in the long run.

Environmental Impact: Lower energy consumption directly translates to a reduced environmental impact. Buildings with higher NatHERS ratings contribute to the overall goal of mitigating climate change by lowering greenhouse gas emissions associated with heating and cooling systems.

Improved Comfort: Buildings with high NatHERS ratings offer better thermal comfort to occupants. Proper insulation, well-designed ventilation, and optimal orientation maintain a consistent and comfortable indoor temperature, providing occupants with a more enjoyable and healthier space.

Market Value and Desirability: Higher NatHERS ratings can enhance the market value of a property. As energy efficiency becomes a more significant consideration for homebuyers, a well-rated building may attract a premium price and stand out in the real estate market.

Compliance with Building Codes: NatHERS ratings are a vital component of the National Construction Code (NCC), and compliance with these ratings is often a mandatory requirement for new developments. Local councils and planning authorities may set minimum energy efficiency standards that must be met to obtain development approval.

The Nationwide House Energy Rating Scheme (NatHERS) is a crucial initiative shaping the future of energy-efficient, resilient, and cost-effective homes. With its recent upgrades, NatHERS has evolved into a world-leading tool for the building sector, supporting the global commitment to achieving net-zero emissions by 2050.

Staff Writer

What is a NatHERS rating in new off the plan apartment developments?

Mixed-use developments have gained significant popularity across Australia in recent years due to their unique blend of residential, commercial, and recreational spaces.

Unlike traditional single-purpose developments, mixed-use projects offer a harmonious integration of various functions within a single locale.

Residential units seamlessly coexist with commercial establishments, retail outlets, dining venues, entertainment hubs, and recreational facilities, with the combination not only enhances convenience but also fosters a vibrant lifestyle and a sense of community.

<h3>Convenience and accessibility</h3>

Mixed-use developments are designed with convenience in mind. They often integrate residential units with commercial spaces, retail outlets, restaurants, and recreational facilities, creating a self-contained community.

[smartcode_project:default project_id=114215 project_image_fid=204874]

The proximity allows residents to enjoy the convenience of having essential amenities and services within walking distance. Whether it's grabbing a cup of coffee, going grocery shopping, or accessing healthcare services, everything is conveniently located, saving residents time and effort.

<h3>Vibrant lifestyle and community</h3>

One of the major advantages of mixed-use developments is the vibrant lifestyle they offer. With a diverse range of amenities and communal spaces, residents have ample opportunities to interact, socialise, and build a sense of community.

[smartcode_project:default project_id=107714 project_image_fid=214122]

The presence of parks, community centres, and shared spaces fosters a lively atmosphere, encouraging residents to engage in various activities and events. The vibrant lifestyle within these developments creates a unique sense of belonging and camaraderie among the residents.

<h3>Potential for higher rental yields and property value appreciation</h3>

Mixed-use developments tend to attract a broad range of tenants and buyers due to their versatile nature. This high demand can result in higher rental yields for investors and potentially lead to property value appreciation over time.

[smartcode_project:default project_id=139989 project_image_fid=212887]

The integration of commercial and retail spaces attracts businesses, which can provide a stable rental income stream. Additionally, the popularity of mixed-use developments often drives up property values, making them a potentially lucrative investment in the long term.

<h3>Enhanced security and maintenance</h3>

Mixed-use developments typically have comprehensive security measures in place. With controlled access points, CCTV surveillance, and professional security staff, residents can enjoy enhanced safety and peace of mind.

[smartcode_project:default project_id=108019 project_image_fid=212658]

Additionally, these developments often have dedicated maintenance teams responsible for the upkeep of common areas, landscaping, and infrastructure. This ensures that the overall appearance and functionality of the development are well-maintained, creating a pleasant living environment for residents.

<h3>Live-work-play balance</h3>

One of the key attractions of mixed-use developments is the ability to achieve a desirable live-work-play balance. The integration of residential and commercial spaces allows residents to live closer to their workplaces, reducing commuting time and improving work-life balance.

The proximity to various amenities and recreational facilities encourages an active and healthy lifestyle. Residents can easily access fitness centres, parks, restaurants, and entertainment options, all within the same development, leading to a more fulfilling and convenient way of life.

alisonwarters@gmail.com

The top five reasons to buy in a mixed-use development

When buying a property, everyone needs to be aware of the additional costs that come as part of the buying process.

Often the largest outlay, after the deposit which goes to the bank, is stamp duty.

<h2 style="line-height: 1.38;">What is Stamp Duty?</h2>

Stamp duty is an extra tax to pay the government when you buy land, a property, and other certain assets.

It happens when the legal ownership is transferred. It can also be known as property transfer duty or transfer duty.

<iframe allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture" allowfullscreen="" frameborder="0" height="415" src="https://www.youtube.com/embed/C32BWkB5--c" title="YouTube video player" width="660"></iframe>

<h2>Who pays Stamp Duty?</h2>

In some circumstances, you may get an exemption. For some states, you won’t have to pay for stamp duty if you are a first home buyer or a pensioner for houses under a particular price. There are also stamp duty concessions, where you may be entitled to a discount.

<h2>How much does Stamp Duty cost?</h2>

Each state has different rules which affect how much you need to pay. These rules can affect the rate you pay, and the timeframe you will need to pay in. Before you buy land or a property, make sure you check the up-to-date information for your state’s stamp duty.

You can use a free stamp duty calculator online to see approximately how much you’ll need to pay. Find out if you’re eligible for an exemption by enquiring on a project via Urban!

Overall, the stamp duty you need to pay will depend on:

<ul>
	<li aria-level="1">How much your land/property is worth</li>
	<li aria-level="1">Where your land/property is located</li>
	<li aria-level="1">What type of land/property it is</li>
</ul>

Want to find out more? <a href="https://www.youtube.com/@UrbanAustralia?utm_source=YouTube&amp;utm_medium=Video&amp;utm_campaign=Subscribe&amp;utm_id=Subscribe">Subscribe to our YouTube channel</a> for more property videos.

Ellen Walker

Off-the-plan property explained: What is stamp duty?

National Australia Bank (NAB) has brought forward the timing of the first RBA cash rate cut by three months.

NAB is now expecting a cut in February, in line with ANZ and Westpac, having initially thought a cut wouldn't come until May.

Commonwealth Bank, the nation's largest lender, still thinks the first cut will come in December.

NAB changed its call following the August monthly inflation figures that were released at the end of September, showing it had dropped to 2.7 per cent.

"The risk has been skewed to a first cut earlier in 2025, and today’s change acknowledges the balance of risks has likely shifted sufficiently for the RBA to feel comfortable cutting a little sooner than we earlier expected," NAB noted in its latest update.

They added that the cadence of the cuts may be faster than its central profile.

"Domestic inflation pressures are cooling, but only gradually, and we continue to expect the conditions for a cut will not be in place this year.

NAB believes the easing cycle will end at 3.1 per cent by early 2026, which is five cuts from the current 4.35 per cent cash rate.&nbsp;

CBA also thinks 3.1 per cent will mark the end of the cutting cycle, while Westpac is forecasting 3.35 per cent, and ANZ is the most pessimistic at 3.6 per cent, which would be just three interest rate cuts.

<h2>What would a rate cut in February look like for borrowers?</h2>

According to&nbsp;<a data-saferedirecturl="https://www.google.com/url?q=https://link.mediaoutreach.meltwater.com/ls/click?upn%3Du001.IVvjJ-2BPT0A8C3VxtqKc6e3bj5hBuw27WFEYqovsYs7kPsgFulYrdOzeP8gI7CybJOya3_RgrM7qq-2BfK-2FtAHeRBLv5Qrb-2Bii5fzjLeKcP4w-2FkNgJPXygpiRhVUan3WV3QEggcf617UC8Z60RjQJZAqx7PiO7FtVJQSn0D46Zc3iTVP0kAhTTzG51cPpa5hrqz1OkSA-2BiXAxUajQ686MTtiseWBIdMdknd83aB7cOVgXlVTeHCGf3-2BcMHwfvI8TYlkUovqEhn4dj0KXf2eJGpb9-2BBv20hPXdLlPP9yD7DvFFDBM5yrTqxvcCiMfAsW1onD-2FcriL628eYdhNQE7bwzYrxcOYnmaYfRhGl-2FEHQ6eK2uQcLxs6Cbu6Dx0bYvpi5A6enmxMWU5TkcRYrP6Z8GbXZYtc5qSoKu6eWFBQR9K7fsjXwHMmby3D3X6Yx-2BxcDcdRruTG&amp;source=gmail&amp;ust=1727774368149000&amp;usg=AOvVaw2vK2ujS77CHs9VRvSSXzLC" href="https://link.mediaoutreach.meltwater.com/ls/click?upn=u001.IVvjJ-2BPT0A8C3VxtqKc6e3bj5hBuw27WFEYqovsYs7kPsgFulYrdOzeP8gI7CybJOya3_RgrM7qq-2BfK-2FtAHeRBLv5Qrb-2Bii5fzjLeKcP4w-2FkNgJPXygpiRhVUan3WV3QEggcf617UC8Z60RjQJZAqx7PiO7FtVJQSn0D46Zc3iTVP0kAhTTzG51cPpa5hrqz1OkSA-2BiXAxUajQ686MTtiseWBIdMdknd83aB7cOVgXlVTeHCGf3-2BcMHwfvI8TYlkUovqEhn4dj0KXf2eJGpb9-2BBv20hPXdLlPP9yD7DvFFDBM5yrTqxvcCiMfAsW1onD-2FcriL628eYdhNQE7bwzYrxcOYnmaYfRhGl-2FEHQ6eK2uQcLxs6Cbu6Dx0bYvpi5A6enmxMWU5TkcRYrP6Z8GbXZYtc5qSoKu6eWFBQR9K7fsjXwHMmby3D3X6Yx-2BxcDcdRruTG" target="_blank">Canstar</a>, if there is a cut in February, a borrower with a $600,000 loan today and 25 years remaining would see their monthly repayments drop by $92.&nbsp;

<table border="1" cellpadding="0" cellspacing="0">
	<tbody>
		<tr>
			<td colspan="3">
			Impact of 0.25% pt cut in February 2025
			</td>
		</tr>
		<tr>
			<td>
			Current loan size
			</td>
			<td>
			Drop in monthly repayment
			</td>
			<td>
			New monthly repayment
			</td>
		</tr>
		<tr>
			<td>
			$600,000
			</td>
			<td>
			-$92
			</td>
			<td>
			$3,907
			</td>
		</tr>
		<tr>
			<td>
			$750,000
			</td>
			<td>
			-$114
			</td>
			<td>
			$4,884
			</td>
		</tr>
		<tr>
			<td>
			$1M
			</td>
			<td>
			-$153
			</td>
			<td>
			$6,512
			</td>
		</tr>
		<tr>
			<td colspan="3">
			Source:&nbsp;<a data-saferedirecturl="https://www.google.com/url?q=https://link.mediaoutreach.meltwater.com/ls/click?upn%3Du001.xWMOP9hChsvn-2BC9O-2FebBihXIZ4cEzbiuENdxm-2Bx3-2FYEEgYMhZlKWNj5Zzy1YZ56RuASD_RgrM7qq-2BfK-2FtAHeRBLv5Qrb-2Bii5fzjLeKcP4w-2FkNgJPXygpiRhVUan3WV3QEggcf617UC8Z60RjQJZAqx7PiO7FtVJQSn0D46Zc3iTVP0kAhTTzG51cPpa5hrqz1OkSA-2BiXAxUajQ686MTtiseWBIdMdknd83aB7cOVgXlVTeHCGf3-2BcMHwfvI8TYlkUovqEhn4dj0KXf2eJGpb9-2BBv20v2akwr6-2BqLyRrlEgkJ4J-2BCCyY0x189xEHZA4Ylf8c7ChBqNIkhmftZzoFuZKFn43pw3oJVg2o1gumrpdA-2B7MB-2FBtmL2rFCI-2FXORATQHySCLVOMg7Vywv-2BqnnQUAtDz6XkvpwxdHFXh70VwKazzhJsICilEYOvP4ju0sIfi5g6TL&amp;source=gmail&amp;ust=1727774368149000&amp;usg=AOvVaw2qVnp6oqATgqDUi2Frm22q" href="https://link.mediaoutreach.meltwater.com/ls/click?upn=u001.xWMOP9hChsvn-2BC9O-2FebBihXIZ4cEzbiuENdxm-2Bx3-2FYEEgYMhZlKWNj5Zzy1YZ56RuASD_RgrM7qq-2BfK-2FtAHeRBLv5Qrb-2Bii5fzjLeKcP4w-2FkNgJPXygpiRhVUan3WV3QEggcf617UC8Z60RjQJZAqx7PiO7FtVJQSn0D46Zc3iTVP0kAhTTzG51cPpa5hrqz1OkSA-2BiXAxUajQ686MTtiseWBIdMdknd83aB7cOVgXlVTeHCGf3-2BcMHwfvI8TYlkUovqEhn4dj0KXf2eJGpb9-2BBv20v2akwr6-2BqLyRrlEgkJ4J-2BCCyY0x189xEHZA4Ylf8c7ChBqNIkhmftZzoFuZKFn43pw3oJVg2o1gumrpdA-2B7MB-2FBtmL2rFCI-2FXORATQHySCLVOMg7Vywv-2BqnnQUAtDz6XkvpwxdHFXh70VwKazzhJsICilEYOvP4ju0sIfi5g6TL" target="_blank">www.canstar.com.au</a>. Starting rate is the RBA existing average owner-occupier variable rate of 6.36%. Assumes banks pass the cash rate cut on in full the month after the meeting.
			</td>
		</tr>
	</tbody>
</table>

Canstar Data Insights Director, Sally Tindall, says if core inflation continues to track in the right direction, or unemployment starts to accelerate significantly, we could well see a cash rate cut as early as February of next year.

“All four big banks now believe the RBA will be ready to cut the cash rate in just over four months’ time, if not before, in the case of CBA.

“However, the outlook for both inflation and unemployment is still highly uncertain. A couple of wobbly sets of inflation data could see the RBA holding for longer, particularly if unemployment remains relatively steady."

&nbsp;

Commonwealth Bank, the nation's largest lender, still thinks the first cut will come in December.

NAB bring forward first RBA cut to February 2025

<html><body>
Official interest rates are poised to hit a new historic low of 1.75 percent when the Reserve Bank Board meet later today following last week's shock consumer price index results.
Property website RateCity.com.au have suggested that deflation has sparked the May rate cut prospect.
Their analysis of the national and international economic indicators shows that the disappointing inflation figures could be enough to disrupt the RBA's year-long holding pattern.
RateCity.com.au money editor Sally Tindall said the chances of a budget-day cut were over 50 percent.
“Australians should get set for a rate cut, if not this month then within the following two months,” she said.
“The RBA has held an easing bias since October. Last week’s inflation figures should be the final straw.
“Inflation is now at 1.3 per cent and core inflation at 1.55 per cent, which is undeniably well below the RBA’s own target rate – a fact they will find hard to ignore.
“Despite a last-minute plunge, the relatively high dollar will also add to the RBA’s woes,” she said.
“If the RBA does deliver a cut, the big question for mortgage holders on Tuesday won’t be around the budget, but rather whether their bank will pass this savings on.”
“But with the cash rate decision set to be announced hours before Scott Morrison delivers his first Federal Budget and employment figures still holding up, the RBA may opt to wait and see if there’s a post-budget bounce in confidence.” 
<a href="/images/2016/05/02/RATECITY.jpg" target="_blank">Click here to enlarge RateCity.com.au's Rateulator</a>
<a href="/images/2016/05/02/RATECITY.jpg" target="_blank"><img src="/images/2016/05/02/RATECITY.jpg" alt="" width="280" height="197"></a>
Fellow mortgage website finder.com.au however have suggested that the cash rate will complete 12 months without movement as 96 percent of leading economists and experts have widely tipped the rate will hold at 2 percent.
The rate last moved in May when the Reserve Bank cut by 0.25 percent.
27 of 28 experts who took part in the finder.com.au Reserve Bank Survey believed the pause will continue due to a robust labour market, recovering Australian dollar and imminent Federal Budget.
CommSec's Savanth Sebastian is the only economist who has predicted a cut, suggesting the low inflation results opens the door for the Reserve Bank to cut rates if they deem it's necessary. 
As for prospects of a rate movement beyond May, 55 percent of the 22 experts who opted in to this question predict a fall is on the cards in 2016, with the most popular months indicated for a cut being August (four predictions) and November (3). 
Conversely, three experts – Steven Pambris from Bank of Sydney, Mark Crosby from Melbourne Business School and Stephen Koukoulas from Market Economics – predict a rate rise, or multiple rises, this year.  Ten experts (45 percent) predict no movement until 2017. All of this group agreed that a rate rise was the next likely move.  Half of the 24 experts surveyed on the rate cycle thought that the cash rate has already hit rock bottom, and would not drop below 2.00 percent in this period. Nine experts (38 percent) predict a drop to 1.75 percent before a rise, while only three experts (13 percent) predict a drop to 1.5 percent. Twenty-two experts weighed into whether recently reported oversupply of units in capital cities would have an effect on property prices. Eighty-two percent predict this would lead to a drop in unit prices in capital cities, with 36% (8) forecasting growth will slow across the whole capital city property market. Only four economists (18 percent) predict no effect on property prices.  Bessie Hassan, Money Expert at finder.com.au, says these findings, coupled with recent news that three of the big four banks – Westpac, ANZ and Commonwealth Bank – have ceased lending to foreign investors, could pave the way for first home buyers to enter the property market.  “Foreign investors account for nearly nine percent of housing sales, so this crackdown could take the heat out of the property market. If you’re a first home buyer and have a deposit saved up, now may be the best time to nab a bargain, especially if you’re eyeing an apartment.  “First home buyers have had an even tougher time of late, so this will be welcome news. Figures from the Australian Bureau of Statistics show that the number of first home buyers has been dropping consistency since September 2012, when it peaked at 19 percent. The latest figures show first home buyers now account for just 13.4 percent of all home loans financed.  “However, with the cash rate looking likely to remain stable for the foreseeable future, signs are pointing to a long-awaited first home buyer ‘comeback’," says Ms Hassan. “Interestingly, should the cash rate hold on Tuesday as widely expected, RBA figures show this would be only the third time in a decade that the official cash rate has held at the same level for 12 months or more. “That said, the average standard variable home loan rate – currently 5.21 percent – is not expected to hold for much longer with the big four banks having not moved their variable rates in five months.  “This reiterates that shopping around for the best home loan deal has never been more important. Do your homework, compare lenders, read the fine print and always factor in a buffer of 2-3 percent in case of future rate rises so you’re not left with a nasty shock soon after becoming a homeowner."
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jonathanchancellor-7SQnKwU6yx

Deflation sparks May rate cut propsect: ratecity.com.au

<html><body>
GUEST OBSERVER
Whenever you buy a property for the purpose of taking advantage of capital growth, it's going to be a process that comes with an assortment of expenses.
You'll want to be prepared for the various costs you're going to have to cover and know how to get the most out of your investment.
First of all are the costs directly related to the purchase of the property. That means paying stamp duty on top of the property value, which depends on both the price of the home and on which state you're in. Note that you can reduce stamp duty on house and land packages - depending on if the land falls within your particular state's guidelines, you could end up paying it on the land and not the house. You may also have to pay for the services of a solicitor or conveyor, who will oversee the settlement process and ensure it goes smoothly.
If you require investment finance, which you almost certainly will, you'll also need to pay for the various costs involved in a loan application and have a deposit of at least 10 per cent of the value, whether through savings or home equity. Depending on how much of the value you're borrowing, you may also need to pay for lenders mortgage insurance.
<div class="columns small-10 large-5 vgrid-small-offset-bottom-1 vgrid-small-offset-top-0 large-push-1 right">You yourself will have to take out cover for the property, too. You might choose to take out landlords insurance if you're planning to rent the property out, which can protect your property from any damage, whether wilful or accidental. If you're constructing a new home, you'll need building insurance, too. </div>
Finally, don't forget the cost of building inspections and, for existing properties, pest inspections, which will give you peace of mind but can run into hundreds of dollars each. You'll also need to factor in any moving costs for furniture, plus council rates. 
With so many expenses, to take care of, it's a wise idea to do all you can to maximise your profit. This can involve a number of tax-reducing strategies:
<ul>
<li>Claim as many tax deductions as you can on the costs involved in running the property, from advertising for tenants to driving over to inspect the home.</li>
<li>Have a professional quantity surveyor carry out a depreciation schedule, so you can claim the depreciation of your investment property and its contents come tax time.</li>
<li>Consider structural factors like whose name the property is under. If your partner is not earning money, for example, they can't reduce their tax - so it's worth putting it mostly in your name.</li>
<li>Complete a tax variation form so you can receive tax off-sets with every pay cheque</li>
</ul>
Remember to speak to professional property experts like DPN to make sure you've got your bases covered. In some cases, we can access occupation specific benefits which may avoid the need for mortgage insurance.
SAM KHALIL is founder and director of <a href="https://www.dpn.com.au/" target="_blank">Direct Property Network</a>.
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jchancellor-FAypfDUnLy

Get the most out of your investment: DPN's Sam Khalil

<html><body>
A majority of economists and experts say abolishing negative gearing would affect housing affordability in the future, according to a recent survey by leading comparison website finder.com.au.
The survey, released in the wake of Reserve Bank of Australia's recent decision to keep cash rates on hold at 2 percent, also revealed that the central bank's decision was expected. 
The cash rate has been on pause for almost a year with the last change – a cut – occurring in May 2015.
On the topic of negative gearing, 65 percent of respondents said there was a chance that eliminating negative gearing would result in a drop in property prices, with 23 percent predicting a "significant" drop of over 5 percent.
However, when looking at the effect of removing negative gearing on the market overall, a total of 30 percent thought that this had a some chance or a slight chance of increasing the likelihood of a significant market contraction, or triggering the collapse of a "housing bubble". The remaining 70% of economists said it would not trigger a market contraction. A third (33 percent) said there was no housing bubble in the Australian market.
On the brighter side, a softening of property prices combined with record low interest rates could encourage more first home buyers into the market, according to Bessie Hassan, money expert at finder.com.au.
In addition, the size of Australian mortgages continues to fall, hitting a low of $372,400 in January, dropping from an all-time high of $386,300 in November 2015, indicating uncertainty in the market – which could play out in first home buyers' favour. The average loan size for first time buyers has fallen from $355,500 in October 2015 to $338,800 in January.
"For those first home buyers who have been priced out of the property market to date, now may be their chance to get their foot on the ladder," Hassan said.
"A decline in average national mortgage size shows that borrowers are feeling less comfortable within the low rate environment than they were months ago, and are therefore borrowing less money to buy.
"All borrowers need to remember that these record low interest rate are not here to stay. If and when rates rise, this will lead to higher repayments – approximately $50 per month more for a $300,000 loan size, and thousands of dollars more over the life of your loan.
"Before jumping into the property market, do your research and factor in a buffer of 2-3 percent to accommodate for future rate rises, so you're not stung with a nasty shock months into becoming a homeowner."
The survey, the biggest of its kind, according to finder.com.au, revealed that 34 of 35 leading economists and experts (97 percent) had predicted that RBA would hold rates.
Hassan added that the majority of experts believed the economy was still tracking well and there would be no movement for the rest of the year.
"60 percent (21 experts) forecast the cash rate will hold at 2 percent for the rest of the year, while 20 experts are predicting a rate rise – but not until 2017 at earliest."
Just three experts (9 percent) expect a fall beyond 2016.
Of the economists (31) who weighed in on how low the cash rate would drop this cycle, 52% (16) said it would drop no lower than its current value. Twenty-nine percent (9 experts) predicted a low of 1.75 percent, and 19 percent (6) forecast the rate to drop to 1.50 percent or lower.
 
<a href="/images/2016/04/28/Screen%20Shot%202016-04-28%20at%202.33.27%20PM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/04/28/Screen%20Shot%202016-04-28%20at%202.33.27%20PM.png" alt="">
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prateek24-ezbwHMbNAk

Eliminating negative gearing could shake, but not shatter property market: finder.com.au survey

<html><body>
GUEST OBSERVER
Australian CPI numbers surprised significantly to the downside. The RBA’s preferred measures of underlying inflation both fell well short of market expectation and are tracking well below the RBA’s last set of forecasts. 
These core measures of inflation have also declined to be convincingly below the bottom edge of the RBA’s 2-3 percent target band. The average of these underlying measures was 1.55% y-o-y.
This puts the RBA in a tricky spot. Most of the demand indicators have held up recently, with the unemployment rate falling and business conditions improving.
Normally a lift in the activity generates a solid rate of inflation. However, although growth has been solid, it has not been strong enough to keep inflation on target.
Low inflation partly reflects that the end of the mining investment boom has brought an extended period of below-trend growth, which has weighed on wages and price pressures in the economy. Global inflation has also been very low. More recently, low global inflation and rates have seen the AUD climb, which is set to weigh further on the outlook for inflation and could also weigh on growth.
All of this adds up to suggesting that the RBA will need to cut its cash rate further. It now also seems likely that a 25bp cut may not be enough.
The RBA also faces a tricky timing issue. The government is due to hand down the federal budget on 3 May, which is the same day as the RBA meets next week and a federal election looks likely on 2 July. The RBA typically looks to stay out of the political process, so cutting rates around these events is less than ideal.
Weighing all of this up, there is no denying that inflation is too low, which means that the cash rate almost certainly needs to be cut. The usual rule of thumb is the sooner the better. We retain our view that the RBA is likely to cut by 25bp in Q2. We now expect that a cut in May is likely, despite the budget. We now also expect a follow-up 25bp cut in Q3 and for the cash rate to remain at 1.50% over the forecast horizon.
<a href="/images/2016/04/27/Screen%20Shot%202016-04-28%20at%208.22.30%20AM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/04/27/Screen%20Shot%202016-04-28%20at%208.22.30%20AM.png" alt="">
Q1 CPI was very weak
Today’s CPI numbers showed that inflation was weak across the board. The headline CPI print showed a fall of -0.2% q-o-q, which was the first decline in seven years (Chart 1). The y-o-y rate of headline CPI inflation has now been below the RBA’s 2-3% target band for six quarters, which is the longest period of below-target headline inflation since 1999. The fall in the headline CPI rate reflected weakness in imported prices, but also, and more worryingly, a fall in domestic inflationary pressures (Chart 2).
Of course, the RBA focuses on its preferred underlying measures of inflation – the trimmed mean and weighted median – which strip out the volatile items. Here the news is even less promising. The average of the two preferred underlying measures fell to its lowest rate in the history of Australia’s inflation-targeting regime (since mid-1993) (Chart 3). The average of the two underlying measures was running at 0.15% q-o-q in Q1. In y-o-y terms, underlying inflation is well below the RBA’s 2-3% target band and also at its lowest level on record (Chart 4).
The challenge is that this has occurred at the same time that domestic demand indicators have been lifting. Surveyed business conditions also remained at high levels in Q1 and the unemployment rate has continued to edge lower. As we have pointed out recently though, the improvement in the labour market has not yet been enough to lift wages growth (see Downunder Digest: Looking for signs of rising wages, 15 April 2016). At the same time, the rising AUD is likely to weigh on growth and inflation (see Downunder Digest: Services exports and the AUD, 30 March 2016).
<a href="/images/2016/04/27/Screen%20Shot%202016-04-28%20at%208.23.49%20AM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/04/27/Screen%20Shot%202016-04-28%20at%208.23.49%20AM.png" alt="">
 
The timing is tricky, given the budget and election
 
With the Prime Minister, Malcolm Turnbull, having pulled the budget forward by a week to 3 May in order to facilitate calling an early election on 2 July, the budget is now due to be handed down on the same day as the RBA board meeting. This is less than ideal for the RBA, if it is looking to cut rates on that day. Typically, the RBA would like to stay apolitical and the Governor, Glenn Stevens, has also spoken on a number of occasions about monetary policy reaching its limits and other arms of policy (fiscal policy) needing to be more supportive of growth. Ideally, we would be hoping this allows the government to announce its policies without a cash rate cut also being part of the message. The RBA may also be reluctant to cut in the lead-up to an election (likely on 2 July) as it typically seeks to remain apolitical.
 
However, if the RBA deems that rates will need to be lowered at some point, the typical rule of thumb is: the sooner the better. Governor Stevens also has a track record of setting policy independent of the political cycle, having lifted the cash rate only a few weeks before the 2007 election. With this in mind, if the RBA does consider that the CPI print warrants it cutting further, as we think is likely, getting it done in May seems a little easier than waiting until June, given that it can more easily point to the lower-than-expected CPI as the trigger.
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<a href="https://www.about.hsbc.com.au/hsbc-in-australia/management-team" target="_blank">PAUL BLOXHAM</a> IS CHIEF ECONOMIST (AUSTRALIA AND NEW ZEALAND) FOR HSBC. 
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Tricky, but expect RBA rate cut next week: HSBC's Paul Bloxham

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GUEST OBSERVER
Today’s extraordinarily low annual headline and underlying inflation rates reflect not only lower petrol prices but widespread price discounting by retailers. Six of the eleven CPI categories had price falls in the quarter.
The QI CPI fell by 0.2 percent, sharply lower than the market expectation which centred on a rise of 0.2 percent (CBA (f) 0.3%). The AUD fell about US1 cent and interest rate futures are now pricing in a 55 percent chance of an RBA rate cut next Tuesday. While the headline inflation rate in annual terms is low, at 1.3 percent, it is the underlying inflation rate which is the big issue. It is running at 1.5 percent, the lowest rate on record. 
The 10% fall in petrol prices was largely expected. But the big expenditure categories also surprised with low results. Food prices (fruit, dairy, cakes and cereals) fell by 0.2% in the March quarter to be unchanged over the past year. It most probably reflects the competitive pressures between the big supermarkets and the new entrants. Housing costs, the largest expenditure category, rose by only 0.3 percent to be just 1.7 percent higher over the year. Even the highly regulated sectors, health and education, had relatively low QI rises (for them) of 1.9 percent and 3.1 percent. 
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The lower AUD over the past year has not, so far, produced the usual higher imported consumer goods and services prices. Tradables inflation fell by 1.4 percent in QI, reflecting the falls in petrol, furnishings, clothing, audio-visual equipment and international holiday travel. 
We are reviewing our RBA rate call in light of the lower than expected inflation trends. Clearly the chances of a rate cut next week have moved a lot higher. But today’s numbers may still not “demand” a rate cut. 
The RBA has tolerated below target inflation on a number of occasions. It is after all how the inflation targeting regime is supposed to work. The last time we saw inflation rates around the current figures was in 1997-98. Back then there were 6 out of 7 quarters where underlying inflation was below target. For most of that period the RBA left the cash rate at 5 percent.
There was a one-off 25bpt cut at the very end of 1998 (after 6 quarters of below target inflation). That cut was justified more on a deteriorating global outlook rather than low inflation. When thinking about what today’s CPI outcome will mean for RBA forecasts it is worth remembering that the Q4 GDP numbers were noticeably stronger than the RBA was expecting (2.5 percent expected versus 3 percent actual). Higher GDP and a lower unemployment rate, now 5.7 percent, mean the “if needed” components for a rate cut are not quite as pressing. With the release of today’s Australian CPI our replica of the RBA’s model suggests the Australian real TWI is less overvalued than previously estimated. In fact, the Australian real TWI is just inside the fair value band (+/- one standard deviation).
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The detail 
As anticipated, the volatile items had a major impact on the much lower than expected headline CPI outcome of a 0.2 percent fall. The QI CPI (excluding volatile items) rose by 0.2 percent (to be up 1.7 percent on a year ago). In other words, the volatile items sliced 0.4 percent from the headline QI CPI. 
Leading the volatiles deflationary impact were petrol prices which dived by 10 percent over QI, to be 6.4 percent lower over the year. The QI petrol prices drop sliced 0.31ppts from the QI CPI outcome. The other key volatile item, namely fruit and vegetable prices sliced 0.11pts from the headline QI CPI. The key driver was an 11.1percent drop in fruit prices (down 6.9 percent pa) which made a 0.13ppt negative contribution to headline inflation. This impact was partially offset by a 1.5 percent rise in vegetable prices in QI (but which were down 4.3 percent in annual terms). 
These volatile items account for most of the gap between underlying and headline inflation forecasts. 
Price falls 
Six of the eleven components of the headline CPI registered price falls in QI. As mentioned above and as expected, the sharp decline in automotive fuel prices was the most prominent factor deflating the quarterly headline CPI result. 
Other CPI items weighing down on the headline outcome were clothing and footwear prices which dropped by 2.6 percent in QI and made a negative 0.1ppt contribution. The main contributor to the decline in this component was accessories prices which declined by 4.3 percent in QI. 
The other CPI categories posting falls in QI were the recreation and culture group, (-1.0 percent), the communications group (-1.5 percent), and furnishings household equipment and services (-0.4 percent). The main contributors to the fall in the recreation and culture group prices were international holiday travel and accommodation (-2.0 percent) and domestic holiday travel and accommodation (-1.9 percent). 
Elsewhere, a 1.7 percent drop in telecommunications equipment and services was the key driver of the 1.5 percent fall in communications group prices. Meanwhile, a 4.1 percent fall in household textiles prices and a 1.6 percent decline in furniture prices contributed to the 0.4 percent decrease in furnishings and household equipment and services prices. 
Price rises 
The largest offsetting price rises in QI were secondary education (+4.6percent), medical and hospital services (+1.6percent) and pharmaceutical products prices (+ 4.8percent). These outcomes are largely due to seasonal factors but were smaller than usual. Overall, these health and education groups contributed 0.2ppts to the QI CPI. 
Also contributing in a positive way to the quarterly headline CPI outcome were increases in household fuels (+3.0percent) and new dwelling purchasing by owner occupiers (+0.2percent) suggesting housing activity may well be cooling but it certainly isn’t crashing. 
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Imported or “tradables” inflation 
Tradables prices fell by 1.4percent in QI and were up by a modest 0.6percent over the year to March. The quarterly fall in tradables prices was due to a combination of the higher AUD in QI, falling fuel prices, and falling international holiday travel and accommodation prices. Tradable prices make up 40percent of the CPI basket and are a reflection of imported prices. 
Domestic or “non-tradables” inflation 
Domestic inflation or non-tradables inflation rose by a modest 0.4percent over QI and lifted by a tame 1.7percent on a year ago. This category accounts for around 60percent of the total CPI basket. The most significant contributors to the QI rise in non-tradables inflation were increases in gas and other household fuels and beer prices. Also, the non tradables services of secondary education and medical and hospital services prices helped the quarterly rise in this component. The key offsetting declines in 
non tradables inflation were electricity prices and domestic holiday and accommodation and telecommunication equipment prices. 
Plenty of spare capacity in the economy and softer wages growth has helped cap non-tradables inflation in recent quarters. 
States 
It is very unusual to see uniformly low inflation across all the capital cities. Prices rose in Canberra by 0.2percent in QI, were flat in Brisbane and fell in the other capitals. 
The price falls were in Sydney, -0.2percent, Melbourne -0.1percent, Adelaide -0.3percent, Perth -0.6percent, Hobart -0.2percent and Darwin -0.9percent. Perth and Darwin had the largest QI price falls. 
In annual terms, inflation was running highest in Melbourne and Brisbane at 1.7percent, then 1.3percent in Sydney and Hobart, 1.0percent in Canberra, 0.7percent in Perth and Adelaide, and -0.3percent in Darwin. 
The capital cities with the weakest retail activity, like Perth, Adelaide and Darwin have the weakest inflation outcomes, indicating the widespread retail discounting pressure. But there are other issues underway. Perth’s residential rents have fallen 4.4percent over the past year. 
Wages trends and inflation 
Wages trends provide a major input to structural inflation in the Australian economy. The trend around private sector wages over the past few years is towards consistently lower than expected outcomes. There are also clear compressions in wages outcomes across industry sectors and regions which are relatively new phenomenon and have been a feature of the post-mining investment and construction boom landscape. 
Annual private sector wages growth was running at a paltry 2percent in the year to December 2015, the weakest growth rate since the series began in 1997, and well below the 3percent to 4percent annual growth that has been the norm from the late 1990s until after the mining boom started to dissipate. Ongoing spare capacity in the labour market and job security anxieties are likely to continue to cap wages growth by workers limiting wage claims. 
Nationally, QIV wages growth continued to track lower in a range of industries and all industries have experienced wages growth well below their decade averages. On an industry basis across all sectors (i.e. public and private) the strongest annual wages growth was posted in financial and insurance services at 2.8percentpa, and weakest in mining at 1.5percentpa. 
The industry sector wages outcomes show that about 80 percent of industries are paying less than 2.5percent wage increases and the remaining 20percent are between 2.5percent and 3.0percent. The regional trends are also similar, with a trend towards State wage growth below 2.5percent. WA, the State with the highest wages growth for the decade up to 2013, now has growth of just 2percent. The end of the mining boom is having similar effects on wages trends in Queensland and NT. 
The sectors with the strongest jobs growth over the past few years are health, accommodation, cafes and retail. They also tend to be ones where part-time employment is significantly higher than in other sectors. The sectors with mainly full-time employment, like mining, utilities and construction, are losing jobs. So the pressures in the labour market that favour more part-time employment are producing a period of distinctly lower wages outcomes. 
A key reason behind ongoing tepid wages growth recently could be that a much more flexible labour market in recent years has enabled companies’ greater capacity to cap wages growth in a lacklustre labour market. In a period of labour market slack employees tend to be more satisfied to accept lower wages growth in return for more job security. 
The resultant ongoing tame wages growth seems to have contributed to more jobs growth than normally would have been the case. Indeed, the latest employment data showed annual jobs growth of 2.0percentpa. (I.e. +235.3k or an average +19.6k a month) in March. The unemployment rate stood at 5.7percent in March.
Ongoing soft wages growth and labour costs have helped wind back non-tradables (or domestic) inflation in recent quarters. This is especially the case for services inflation (with its very high labour component). Thus modest wages growth is a very handy tool in maintaining the current low inflation environment. 
Inflation expectations 
Central banks and policy makers care about inflation rates and where they may be headed. But they also care about the inflation expectations held by businesses and consumers. These expectations influence how economic agents act, with a flow on to economic activity. And these expectations influence the support or restraint that a given level of interest rates provides. 
The extended period of weak inflation in many countries has seen inflation expectations move lower. Some central banks have become concerned about the impact of low expectations. And certainly some recent policy easings in Europe, Japan and New Zealand reflect these concerns. Even in the US, where interest rates have been nudged higher, Fed Chair Yellen has recently expressed concerns about low inflation expectations. They are yet another reason for a caution approach to rate changes by the Fed. 
Our thoughts on global inflation expectation trends and what they mean for policy directions can be found here. 
The RBA monitors inflation expectations. But they are of less concern than for other central banks. They are rarely mentioned in post RBA meeting Statements. And comments are generally limited to a summary paragraph in the quarterly Statement on Monetary Policy (SMP). 
More importantly, inflation expectations in Australia are low but look well anchored. They have not been influenced by low headline inflation rates and the general lack of business pricing power. 
Policy makers are actually probably quite happy with aspects of the inflation expectations story. The decline in house price expectations as views on the housing market have softened will be seen as a desirable outcome. Especially given the concerns evident about rapid price growth and elevated expectations in 2015. The restraint in wage expectations is seen as a positive through the support it gives to labour demand.
Michael Workman is senior economist, <a href="https://www.commbank.com.au/corporate/research?ei=mv_research" target="_blank">Commonwealth Bank</a>.
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Low inflation raises the chances of an RBA rate cut next week: CBA's Michael Workman

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Westpac has decided to stop lending to offshore customers who are not citizens or residents of Australia with an eligible visa.
“It continues to be Westpac's priority to support Australian citizens and permanent residents (including applicable visa classes) living outside of Australia on their journey to own a home or investment property in Australia,” the bank said.
Effective immediately, changes to applicants earning foreign income policy will also occur.
For non-residents, no lending is permitted even if the applicant income is not relied on to meet serviceability, a letter to brokers obtained by Mortgage Business advised.
Local applications that include foreign income will be given a lower loan-to-value ratio of 70 per cent, down from 80 per cent. 
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The new policy from April 26 will apply to all loans that were pre-approved but have not been issued. 
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Last week developers said any withdrawal of bank lending could lead to a possible self-fulfilling fear of "apartment collapse". 
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"The problem is they [Chinese buyers] don't know how much the banks will give till the end," the Meriton boss Harry Triguboff said. 
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Westpac tightens residential lending to foreign buyers

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<img src="/images/2016/04/27/Holdencapital_banner.jpg" alt="" width="631" height="133">
SPONSORED POST
Post the GFC we saw the major banks consolidate their stranglehold on the Australian construction finance sector however, there are changes afoot which will likely see a major restructuring of the status quo.
As we have previously commented on, the additional capital requirements recently imposed on the Australia’s big 4 Banks in order to ensure their compliance with the ongoing BASEL standards is having a significant effect on the construction finance sector and we believe it’s the beginning of a permanent change in how funding will be both obtained but also who provides it.
These overriding regulatory requirements are not temporary responses to a specific event; they actually represent a permanent constraint on the banks which is impacting both their pricing and the terms and conditions being applied.
We have previously discussed how the need to rebalance their capital allocations has resulted in a need for the banks to reduce their exposure to the sector as construction finance requires a significant level of capital reserve allocation and as such is no longer an overly profitable product from their perspective, hence their reduced appetite.
While there is no doubt that as loans run off their book they will look to replenish, the reduced loan to value ratio’s and other more conservative terms and conditions are permanent changes to bank lending policies which will now fluctuate within certain lower risk parameters. we expect that there will be pricing increases albeit competition will keep that to a reasonable level.
So there is likely to be pressure on the banks to satisfy their client base but remain competitive with the competition which will rise from the second tier banks, specialist funds, private lenders and the like.
This represents a new world order in construction finance and has been clearly demonstrated with all four banks being currently either closed for “new to bank” business or operating with significantly reduced appetite and drastically reduced lending parameters.
Having said this, we don’t expect them to give up their market share without something of a fight once their capital positions allow. One major area they can attack is operational costs and there are two fundamental options open to them.
The first is systems and the second is staffing. With the risk assessment process rapidly becoming automated, we are seeing the banks become more and more reliant on data being input into models using cheaper offshore labour for overnight spread sheeting of financials and with loan approval itself becoming more automated utilising more and more specialised risk models, it is only a matter of time before most transactions are approved based on a simple process of relevant data being entered into the model and then “computer says” Approved! If this sounds like an oversimplification, think about how quickly we all adapted to the home loan process undergoing a similar revolution.
Staff are the single largest cost in this process and there is no doubt the banks are looking to manage those costs to their advantage. The other change we are seeing is a greater reliance on brokers to source deals. Again, if look at the housing mortgage market, current estimates are projecting that 60 percent of all new business will be sourced from brokers by the end of this year following the UK trend where it is estimated to be 75 percent.
In the construction finance sector, it is estimated that 16% of new business is broker generated and this is growing rapidly. We are seeing banks reduce their business development teams and actively courting brokers, effectively reducing staff overheads.
As we recently commented, developers can no longer expect their house bank to provide the necessary funding just because “they have always done it in the past”. They may well have had a sound 30+ year relationship with their bank but this does not guarantee their ability to borrow funds on the same terms that they have been used to.
The risk model will determine this as will their brokers ability to ensure that all the facts, good and less so are properly spelled out become key to a good outcome. For this reason, a professional broker who understands the bank requirements as much as those of his client is a key element in the process.
Today’s developer is now seeing an ever increasing number of options as competitors look to move into competition with the banks and other existing funders. The challenge is identifying which ones best fit both their specific project needs and a readjustment of expectations as to what constitutes an appropriate finance cost when assessing project viability as the cost of these funds is generally between 2-3 percent higher.
The challenge for brokers is that to be successful they need to deliver on both sides of the equation. That is, they need to deliver the best possible outcome for their client while ensuring they deliver a professional presentation to the bank/lender which meets their expectations in terms of detail and accuracy. The trust of both parties is key!
So, just as the housing mortgage market completely restructured with the coming of the wholesale funds and brokerage structures, so we expect to see the construction finance industry undergo a similar metamorphosis, ultimately with similar positive results for the end user. We are already seeing the re-emergence of various second tier banks, investment funds, managed trusts and various private lenders all vying for a share of what will continue to be a growingly sophisticated market.
Brokers now provide Australians with the best way to source cheap and competitive housing loans, so your construction finance broker also holds the key to successfully securing competitive construction funding for your next successful property development.
This article was written by Dan Holden of HoldenCAPITAL, who are a bespoke construction finance firm, they arrange construction finance and invest in projects through their equity fund, Queen Street INVEST. To discuss your project finance requirement please call (07) 3171 4200 or visit HoldenCAPITAL <a href="https://www.holdencapital.com.au/" target="_blank">here</a>.
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The changing face of brokerage and construction finance: HoldenCAPITAL

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The <a href="https://www.greater.com.au/" target="_blank">Greater Building Society</a> has confirmed it will change its name to Greater Bank in May after receiving approval from the regulator, APRA, to better explain what it does.
Chairman Wayne Russell said the new name would help The Greater position it for further growth and stressed there is no change to ownership structure.
He said research shows an increasing number of people don’t understand the term ‘building society’ so they don’t know all the financial products and services The Greater offers. 
“Using ‘bank’ takes the work out of explaining what we do as it is well understood and makes sense to customers of all generations,” Russell said. 
The name change was approved at the Greater’s AGM last November. The Greater has changed its name a number of times in its 90-year history.
Unlike the major banks, Greater Bank will still be customer-owned and not by shareholders.
“The name change is part of continuing changes we’re making to our products and services to remain a viable challenger to the big banks for local people,” added CEO Scott Morgan.
“As a customer-owned bank our focus on customers and community will remain the same.” 
“We will still be offering the same great rates, low fees and outstanding service.”  
The Greater currently provides banking services to around a quarter of a million customers in NSW and South East Queensland.
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Greater Building Society to become Greater Bank in May

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GUEST OBSERVER
Today’s RBA Minutes are similar in most respects to the Statement following the April meeting. But the wording around the considerations for monetary policy implies to us that the easing bias is stronger.
Mainly because the higher Australian dollar (AUD) will “complicate” the economy’s adjustment to different growth drivers.
It may be that the RBA has decided that the fundamental drivers of the AUD, like global bulk commodity prices, are now more likely to be higher over the rest of the 2016.
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The minutes have a comment that the terms of trade is set to rise modestly because of the pick-up in bulk commodity prices. It means the risks on the AUD may be rebalancing to the upside, and away from the more comfortable (for the economy) levels under USD0.75. A higher AUD complicates lots of things, especially the inflation outlook. Lower inflation outcomes could justify lower cash rate settings than current. Especially if some more downside growth risks, like significant global financial market volatility, become reality.
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The minutes indicate a number of positive developments in the domestic economy. Established house price growth has continued to ease, reducing the risks around the property sector. The strong lift in supply of new apartments has also resulted in an easing of their prices. But demand conditions across the country vary considerably. Surveys of national business conditions have been more favourable recently, with signs of a pick-up in non-mining profits. But non-mining investment intentions remain broadly unchanged even though business credit growth has lifted over the past six months.
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Employment growth in the non-mining sectors has been strong. While the recent jobs data was weak, the RBA said it needed to be compared to the unusual strength of activity through late 2015. The unemployment rate looks to have peaked in mid-2015 and leading indicators of the jobs market are mixed. Wages growth remains subdued despite firm jobs growth. Unit labour costs growth has been negligible for the past four years.
There was no RBA commentary on the AUD that indicated that it was out of line with fundamentals. The minutes list the reasons for the AUD moving higher since late 2015. Namely, higher bulk commodity prices and above-trend GDP growth for 2015 of 3% and easy US monetary policy.
We expect the RBA to keep the cash rate at 2 percent over coming months. The domestic economy is rebalancing towards different growth drivers and employment growth is firm. The major issue is the trend to lower inflation outcomes. The higher AUD complicates the picture. So a very low underlying inflation result, say near 0.3%q/q and 1.7%pa, next Wednesday could support a rate cut.
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Michael Workman is senior economist, <a href="https://www.commbank.com.au/corporate/research?ei=mv_research" target="_blank">Commonwealth Bank</a>.
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RBA adopts stronger easing bias as higher AUD complicates economic adjustment

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The average size of the home loan is falling across Australia, the most dramatic slide since 2000, reveals a report by a leading comparison website using ABS data.
<a href="https://www.finder.com.au/">A</a>n analysis of data from the Australian Bureau of Statistics shows the national average home loan size now sitting at $357,200, a slide of 4.08% in February from the previous month, according to <a href="https://www.finder.com.au/">finder.com.au</a>.
In fact, the national home loan size has declined by 7.71% in total in the past three months to February, or $29,100 – which is the biggest three-month drop since May-July 2000, when the national average declined 7.74%. 
It is also the first time the average loan size has dropped by more than 1% in three consecutive months.
South Australia was the only state where the size of home loans increased, with a hike of 0.62% in February.
The sharpest decline was in New South Wales, where the average home loan size dropped by 5.75% in February. It dropped 10.15%, or $45,500, in the last quarter – the biggest decline on record.
On this three-month timescale, home loan sizes are down in every state in Australia. Victoria and Queensland are down around 6%, while South Australia, Western Australia and Tasmania are down 2-3%.
The impact of tougher bank lending policies introduced during mid-2015 is finally being felt, says Bessie Hassan, money expert at <a href="https://www.finder.com.au/" target="_blank">finder.com.au</a>.
“A cooling property market has led to shrinking maximum loan sizes following the Australian Prudential Regulatory Authority’s changes to investment lending,” she said.   “Banks are scrutinising new loan applications more closely, taking a tougher line when assessing borrowers income.” This is thought to be a key reason the housing market has been decelerating. Latest figures from CoreLogic show the rate of house price growth is slowing year-on-year – March data reveals that median capital city prices rose just 0.2%.
Data from credit reporting bureau Veda also shows that the demand for mortgages slowed significantly in the last quarter of 2015, with growth in mortgage applications decreasing by 2.9% compared to December quarter 2014. This is the second quarterly decline in a row. “The upshot of this is that the home loan market will be under pressure, and banks will be eager to secure new customers,” says Hassan. “This could lead to an increase in housing affordability with interest rates declining even further.” “We’re seeing variable home loan rates as low as 3.69% being offered by Mortgage House for 12 months – the lowest rates we’ve seen in years.  “This could be a great time for first time buyers to flex their muscles as low interest rates and cooling property prices boost their purchasing power.”
 
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