<a href="https://www.apartments.com.au/developers/s-p-setia">SP Setia</a> has lodged plans for a $750 million, three-tower mixed-use precinct that would complete the long-running redevelopment of Carlton's former Carlton United Breweries site.

The proposal at <a href="https://www.apartments.com.au/new-apartments/185-195-queensberry-street-carlton-vic-3053">46-78 Bouverie Street and 185-195 Queensberry Street</a> spans a 6,468 sqm site, the last remaining undeveloped parcels within the former brewery's 2007 masterplan.

Designed by <a href="https://www.apartments.com.au/architects/cox-architecture">COX Architecture</a>, the development will comprise two purpose-built student accommodation towers and a third build-to-sell apartment tower above a shared commercial podium and basement.

Across the three towers, SP Setia is proposing 606 build-to-sell apartments and 1,499 student accommodation units containing 2,009 beds.

The apartments will sit in the tallest tower, which will rise nearly 200m and 55 storeys. It will become&nbsp;one of the more substantial new build-to-sell apartment projects at the northern edge of Melbourne's CBD.

The apartment mix is weighted toward smaller inner-city product, with 188 studios, 206 one-bedroom apartments, 192 two-bedroom apartments and 20 three-bedroom apartments

<img alt="First look: SP Setia plans three-tower finale for Carlton’s former CUB precinct" data-entity-type="file" data-entity-uuid="8271bc87-1b0a-41b7-ac73-a425ee375261" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/3_2.png?VersionId=G4lw23o90B1boX4k4dj7rdz2ZEajS9wy" />

Part of the precinct will be a large-scale&nbsp;3,684 sqm supermarket and a further 2,198 sqm of speciality retail, creating close to 5,900 sqm of new commercial space within the precinct.

But one of the biggest components of the proposal is what sits between the buildings.

Around 4,650 sqm, or roughly 72 per cent of the site, will be publicly accessible open space, incorporating plazas, pedestrian connections, landscaped laneways and retail spill-out areas.

The ground plane is intended to finally complete pedestrian connections envisaged when the CUB masterplan was first approved nearly two decades ago, stitching together Victoria Street, Queensberry Street, Bouverie Street and Swanston Street through the former brewery precinct.

Urbis said the development would "complete the CUB precinct", with the public realm providing important north-south and east-west connections through what is currently the final undeveloped portion of the masterplanned site.

SP Setia is also exploring a new linear park within the Bouverie Street road reserve, with the concept to be developed further with the City of Melbourne through the planning process.

The proposal is being pursued through the Victorian Government's Development Facilitation Program under Clause 53.23 for significant residential development with affordable housing.

The planning report acknowledges the proposed heights exceed those contemplated under the original Comprehensive Development Plan and masterplan, but argues the built-form context has changed considerably over the past two decades.

Urbis said the three towers would instead create a stepped transition between Carlton and the Hoddle Grid, rising progressively from the 94.1-metre Tower One along the Queensberry Street edge to the 199.44-metre Tower Three closer to the established CBD-scale buildings to the south.

<img alt="SP Setia" data-entity-type="file" data-entity-uuid="e885a07a-592c-40fc-bf82-e6dbaf32da54" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-21%20at%208.52.24%E2%80%AFAM.png?VersionId=7s_ErUkSKAdY1mAWp3GRZgMNCGtwhk5m" />

SP Setia plans to deliver the development across three stages.

Stage One would deliver the basement, podium and retail areas for the entire precinct alongside the first student tower. Tower Two would follow in Stage Two, before the 606-apartment Tower Three is delivered as the final stage.

If approved and delivered, the project would close out a redevelopment process that has been underway since the former brewery masterplan was approved in 2007, adding more than 2,600 student beds and apartments to a precinct already home to Swanston Central, the Barak Building, RMIT Design Hub and several large student accommodation developments.

&nbsp;

&nbsp;

Joel Robinson

SP Setia plans three-tower finale for Carlton’s former CUB precinct

Melbourne developer Lowe Living is seeking to add to its growing bayside apartment pipeline, filing plans for a boutique eight-residence development in tightly held Middle Park.

Lowe Living, which has built much of its development portfolio across Melbourne's affluent bayside and south-east suburbs, is behind the plans for the 730 sqm site at <a href="https://www.apartments.com.au/new-apartments/123-125-erskine-street-middle-park-vic-3206">123-125 Erskine Street</a>, just off Armstrong Street and within the Armstrong Street Neighbourhood Activity Centre.

The developer is seeking approval for a five-storey residential building above two basement levels, with just eight large-format apartments and 18 car spaces.

“This is a deliberately very different proposition for us,"&nbsp;Tim Lowe, Co-Founder of Lowe Living, said.

"Eight residences is exceptionally boutique, but that's precisely what this site calls for.

“There is a strong community in Middle Park and the surrounding suburbs who have spent decades building a life here. They no longer want the maintenance of a large period home, but they aren't prepared to compromise on space, quality or location. We think there is a real opportunity to capture that hyper local market. A site like this rarely comes to market.”

<img alt="Lowe " data-entity-type="file" data-entity-uuid="875fe572-0f14-4d90-9e11-55b28dd07731" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-21%20at%208.42.49%E2%80%AFAM.png?VersionId=GDNQRv9BfpR9r1zkZ5UDyUM4ZvpIksut" />

The low-density proposal has been designed by Cera Stribley and is being progressed through the Victorian Government's Great Design Fast Track pathway, having already secured eligibility from the Minister for Planning.

The Office of the Victorian Government Architect supported its eligibility after finding the proposal demonstrated consistency with the program's seven design principles, while the project's financial feasibility has also been independently confirmed by Invest Victoria.

The project is targeting the downsizer market, with the planning documents describing the homes as larger-format residences and noting the two penthouses could otherwise have been configured as four separate apartments.

<img alt="Lowe 2" data-entity-type="file" data-entity-uuid="60ab0987-2da6-4175-adac-315dcf6053c6" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-21%20at%208.43.15%E2%80%AFAM.png?VersionId=bOCPH0B2MFwlmaRW.TTCF9TzyifgVoQI" />

The site has dual frontage to Erskine Street and Canterbury Place and currently comprises a collection of commercial buildings used as offices, including a former heritage bakehouse, a former stable, a later gabled addition and a central courtyard.

It sits within the Commercial 1 Zone and the Armstrong Street Commercial Precinct heritage overlay, with the existing property classified as a contributory heritage place.

Heritage has subsequently played a significant role in Cera Stribley's design.

The front section of the former bakehouse facing Erskine Street will be retained, including its return walls, street-facing hipped roof and chimneys, while the Erskine Street façade and part of the western return wall of the former stable will also be incorporated into the new development.

Levels four and five will be set back five metres from the retained stable façade, while bricks removed through demolition are proposed to be salvaged and reused within the new building where possible.

<img alt="Lowe 3" data-entity-type="file" data-entity-uuid="e97927a9-a2de-4a0f-83b6-65451238abfa" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-21%20at%208.43.06%E2%80%AFAM.png?VersionId=VR44AChLrX9q1XPB9GvVQV.ALXXbe4gC" />

Rather than presenting as a single five-storey building to Erskine Street, Cera Stribley has broken the development into a series of distinct forms.

A three-storey infill element will sit between the retained bakehouse and stable façades, with the upper levels recessed behind the heritage fabric. Canterbury Place will similarly feature two three-storey podium forms, separated by a central pedestrian accessway, before the upper two levels step back from the street.

A pedestrian through-link will run through the centre of the project between Erskine Street and Canterbury Place, creating entrances from both sides of the site and introducing landscaping and communal areas through the ground plane.

Landscape architect Acre has designed planting across the ground level, private terraces and upper levels, including a feature canopy tree at level three and integrated planting and arbours across the level four terraces. Five existing Erskine Street trees are proposed to be retained.

Sustainability is also a significant component of the Great Design Fast Track application. The apartments are targeting an average eight-star NatHERS rating, with no residence below 6.5 stars, while the project has achieved a 75 per cent BESS score. Seven of the eight apartments are designed for cross-ventilation, with the remaining residence using mechanically assisted natural ventilation.

The plans also incorporate an 8kWp rooftop solar system, a 5,000-litre rainwater tank and infrastructure allowing future electric vehicle charging for every residence.

Lowe has a strong portfolio across Melbourne's blue-chip suburbs. They recently launched <a href="https://www.apartments.com.au/new-apartments/jardin-house-by-lowe-living-camberwell-335-camberwell-road-camberwell-vic-3124">Jardin House by Lowe Living</a> in Camberwell, their first development in the Stonnington LGA.

Lowe Living unveils Middle Park apartment development

Article summary

<ul data-end="888" data-start="289">
	<li data-end="442" data-section-id="8tsh6o" data-start="289">DVB Projects is preparing to launch its second Gold Coast apartment development, with demolition now underway at 137 Old Burleigh Road, Broadbeach.</li>
	<li data-end="573" data-section-id="1nyxl3e" data-start="443">The 34-level tower will comprise just 49 ultra-luxury residences, including half-floor, full-floor and penthouse apartments.</li>
	<li data-end="717" data-section-id="oiyimj" data-start="574">The launch follows strong demand at DVB's nearby Sea Glass project, which is more than 50 per cent sold and currently under construction.</li>
	<li data-end="888" data-section-id="epk9o9" data-start="718">The development adds to the transformation of Old Burleigh Road, with premium beachfront apartment projects continuing to reshape the tightly held Broadbeach strip.</li>
</ul>

<a href="https://www.apartments.com.au/developers/dvb-projects">DVB Projects</a> is preparing to launch its second Gold Coast apartment development, with demolition now underway on the Broadbeach site as the Sydney developer moves closer to bringing the ultra-luxury project to market.

The 34-level tower at <a href="https://www.apartments.com.au/new-apartments/137-old-burleigh-road-broadbeach-qld-4218">137 Old Burleigh Road</a> will comprise just 49 residences, ranging from half-floor apartments through to full-floor homes and a penthouse. The launch follows the strong sales performance of DVB's nearby Sea Glass development. More than half of the apartments at Sea Glass, on the other side of Broadbeach, have been snapped up, well ahead of its late 2027 completion

<img alt="DVB Projects to commence demolition on $320m Broadbeach luxury tower" data-entity-type="file" data-entity-uuid="2944b4be-c84e-4b54-8dc1-c712e76704c0" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/E02_Exterior_Street%20Level%20Entrance.jpg?VersionId=YoNig7pRdrE3HCue7sUj78LzJteeQf3H" />

The start of demolition at 137 Old Burleigh Road signals DVB Projects’ underlying confidence in the Gold Coast’s luxury beachside apartment sector.

“We see the Gold Coast as one of the most compelling lifestyle markets in Australia, particularly at the premium end where demand continues to deepen,” said Dean Brown, Managing Director of DVB.&nbsp;

“This project has been carefully designed to respond to that demand - delivering large-format residences with a level of quality, privacy and amenity that is still relatively rare in the apartment market on the beachside."

Brown says the site itself is "exceptional."

"Old Burleigh Road is one of the most tightly held beachfront strips, and opportunities to deliver a project of this scale and calibre in this location are extremely limited.”

<img alt="DVB Projects to commence demolition on $320m Broadbeach luxury tower" data-entity-type="file" data-entity-uuid="398f377a-c037-455e-9250-0c5e0d84c35b" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/I12_FF%20Balcony.jpg?VersionId=NwOiRWGMubR1c8wthuEfggklcja7al9." />

The project will comprise 40 half-floor residences of approximately 260 sqm, alongside eight full-floor residences spanning around 524 sqm.

A single penthouse will crown the building, featuring a private pool, barbecue area, indoor gym and dedicated entertaining spaces.

Residents will have access to a resort-style suite of amenities, including a 20-metre pool with daybeds, a gymnasium, hot and cold plunge pools, a sauna, and private residents’ lounge and dining facilities.

<img alt="DVB Projects to commence demolition on $320m Broadbeach luxury tower" data-entity-type="file" data-entity-uuid="d1642bb0-9a66-4427-a022-dfc0988c6287" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/A02_Pool%20to%20View.jpg?VersionId=c0IXPyn_Gp_Kn3XCwzMrqIVkAdCEwVXP" />

Sales agent Todd Matheson, of <a href="https://www.apartments.com.au/project-marketer/pezet-matheson">Pezet Matheson</a>, which is marketing both 137 Old Burleigh Road and Sea Glass, said 137 Old Burleigh Road would address a clear gap in the market for genuine luxury products.

“There are very few opportunities on the Gold Coast where buyers can secure a residence of this size and quality in a new building,” Matheson said.

“What we’re seeing is a growing cohort of downsizers and interstate buyers who still want space - they’re not willing to compromise on living area, entertaining or finishes.

“This project has been designed with that buyer in mind. It offers the scale of a home, combined with the convenience and security of apartment living, in one of the coast’s most desirable positions.”

<img alt="DVB Projects to commence demolition on $320m Broadbeach luxury tower" data-entity-type="file" data-entity-uuid="59aae0ca-5639-4320-8aca-d0bf60f48e43" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/E01_Exterior%20Hero.jpg?VersionId=DS8Zfy2WtgUEtdfe0TEUuf1W1GfcZq8S" />

Located on a 1,156 sqm site one block from the beachfront, the development will replace an ageing walk-up building and is expected to contribute to the ongoing transformation of the Old Burleigh Road strip into one of the Gold Coast’s most prestigious residential corridors.

With the development moving into the delivery phase, 137 Old Burleigh Road is slated to hit the market later this year.

[smartcode_project_cta:default project_id=145141]

DVB Projects to launch second Broadbeach apartment tower as demolition commences

<a data-end="327" data-is-only-node="" data-start="250" href="https://www.apartments.com.au/developers/norus-projects" rel="noopener" target="_new">Norus Developments</a> has lodged plans for a new apartment development in Clayton that would add further momentum to the suburb's emerging Green Street corridor.

Plans have been lodged for the consolidated site at <a href="https://www.apartments.com.au/new-apartments/1359-1365-centre-road-clayton-vic-3168">1359-1365 Centre Road</a>, where Norus is seeking approval for 218 apartments across a 12-storey apartment building designed by <a href="https://www.apartments.com.au/architects/life-architecture-and-urban-design">Life Architecture</a>.

The proposal sits within the Clayton Major Activity Centre at the threshold of the planned Green Street corridor, a landscaped pedestrian connection intended to improve links through the precinct towards Clayton Railway Station.

The development would replace the site's existing collection of low-scale residential and commercial buildings with a single consolidated building, introducing significantly greater housing density to this part of Centre Road.

A retail tenancy is proposed at ground level to activate the Centre Road frontage, accompanied by transparent street interfaces and landscaping intended to create a more pedestrian-focused edge to the development.

<img alt="First look: Norus Developments plans landscape-led apartment project for Clayton’s emerging Green Street" data-entity-type="file" data-entity-uuid="0a5a763a-d9e9-4253-af2f-88008de27ebf" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Clayton%20a.png?VersionId=S2WJJbat1XVkZwB9SnYtygirXgWHiklX" />

The building has been designed with stepped massing and upper-level setbacks to manage its transition towards surrounding residential properties. The planning report describes the approach as one that integrates the building into the landscape rather than treating landscaping as a secondary element.

"A strong landscape and public realm strategy underpins the proposal," Urbis states in the planning report.

"Public benefits include an affordable housing contribution, a new pocket park, generous landscaped setbacks, deep soil planting and integrated Water Sensitive Urban Design."

The report adds that these elements are intended to create "a permeable, pedestrian-focused ground plane that enhances walkability, supports urban cooling and reinforces the emerging Green Street character."

Biophilic and passive design principles extend through the residential levels, with planting, daylight, natural ventilation and views towards landscaped areas forming part of the amenity strategy.

Parking would be concentrated away from the public realm, with 145 car spaces proposed from the rear laneway rather than dominating the Centre Road frontage.

The proposal follows an extensive pre-application process with the City of Monash. Three formal meetings were held between the project team and Council from December 2025 to March 2026, with the scheme evolving through several concept iterations before the current design was lodged.

The project arrives as Clayton prepares for substantial change around its established activity centre and the wider Suburban Rail Loop precinct. Its position on Centre Road places the development within an existing concentration of shops, services and public transport, while the Green Street connection is intended to strengthen pedestrian access towards Clayton Railway Station.

First look: Norus plans landscape-led apartment project for Clayton’s emerging Green Street

<a href="https://www.apartments.com.au/developers/gardner-vaughan-group">Gardner Vaughan Group</a> has officially commenced construction on Bronze on Chevron, celebrating the sod turning of its first-ever Gold Coast development and marking a significant milestone in the company's continued expansion across South East Queensland.&nbsp;

Following the successful delivery of premium residential developments throughout Brisbane and the Sunshine Coast, <a href="https://www.apartments.com.au/new-apartments/bronze-on-chevron-8-mawarra-street-chevron-island-qld-4217">Bronze on Chevron</a> represents Gardner Vaughan Group's entry into the Gold Coast market. Bronze will deliver 119 one, two, three and four-bedroom apartments above two ground-level retail tenancies.

[smartcode_project:default project_id=107520 project_image_fid=367193]

The recent sod turning ceremony was attended by Deputy Mayor Mark Hammel, President of the Surfers Paradise Surf Life Saving Club, Cassandra Sedgman, project consultants, purchasers, project partners and invited guests to celebrate the commencement of construction.&nbsp;

Gardner Vaughan Group Chief Executive Officer Simon Betteridge said Bronze on Chevron represented an exciting new chapter for the business.&nbsp;

"We've spent almost four decades building homes that respond to the way people want to live, and we're excited to bring that experience to <a href="https://www.apartments.com.au/developments/chevron-island-qld-4217">Chevron Island</a>," Betteridge said.

"Bronze on Chevron is particularly significant because it marks Gardner Vaughan Group's first development on the Gold Coast following many successful projects across Brisbane and the Sunshine Coast."

[smartcode_project:default project_id=107520 project_image_fid=367183]

Betteridge said the ground breaking is a proud moment for the&nbsp;team and their purchasers, who can now see their future homes beginning to take shape.&nbsp;

"As both developer and builder, we're able to oversee every aspect of the project from design through to construction, ensuring the quality and attention to detail Gardner Vaughan Group has become renowned for."&nbsp;

Designed by acclaimed architectural practice <a href="https://www.apartments.com.au/architects/cottee-parker-architects">Cottee Parker</a>, Bronze on Chevron has been thoughtfully designed to complement Chevron Island's evolving streetscape while embracing its relaxed coastal lifestyle.

The development will offer generous residences with refined interiors, premium finishes and resort-style amenities, with completion anticipated in early 2029.&nbsp;

[smartcode_project_cta:default project_id=107520]

The development will offer generous residences with refined interiors, premium finishes and resort-style amenities, with completion anticipated in early 2029

Gardner Vaughan Group breaks ground on first Gold Coast development, Bronze on Chevron

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>
Australian mortgage delinquencies, which increased over the year to November 2018, will continue to increase through 2019, according to Moody's Investors Service latest delinquency report.
"Mortgage delinquencies will continue to increase over 2019, because of high debt levels, subdued wage growth, the conversion of a large number of interest-only mortgages to principal-and-interest loans and declining house prices," says Alena Chen, a Moody's Vice President and Senior Analyst. 
"However, delinquencies will remain low overall, given the rate of economic growth and low unemployment, which will continue to support borrowers' ability to meet their mortgage repayments," says Chen. 
<a href="https://www.propertyobserver.com.au/images/2019/4/3/moody%201.jpg" target="_blank">Click here </a>to enlarge
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2019/4/3/moody%201.jpg" alt="">
The proportion of Australian residential mortgages that were more than 30 days in arrears increased by 0.13 percentage point to 1.58% over the year to November 2018.
Mortgage delinquencies increased in New South Wales (NSW), Victoria, Western Australia, Tasmania, South Australia, Australian Capital Territory and Northern Territory over the year to November 2018, but declined in Queensland.
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2019/4/3/moody%202.jpg" alt="">
In NSW, the delinquency rate increased to the highest in five years, though it remains relatively low compared with most other states and territories and NSW's long-term average.
Regions with exposure to the mining sector continued to dominate the list of areas with the highest delinquencies. 
Moody's semi-annual delinquency map report provides a detailed analysis of the rate of residential mortgage arrears at a national, regional and postcode level in Australia. 
</body></html>

j.ballantyne1990-6AQqhLzZaK

Mortgage delinquencies set to continue rising through 2019: Moody's

<html><body>
EXPERT OBSERVATION
As expected, the Reserve Bank Board decided to leave the cash rate unchanged at 1.50%.
However, our research shows that there has been a very significant change in the Governor’s Statement for this month. Recall that Governor Lowe has not changed monetary policy since he became Governor in September 2016.
Also note that the key concluding sentence, which has been used in every Statement since October 2016 has been “the Board judged that holding the stance of monetary policy unchanged at this meeting would be consistent with sustainable growth in the economy and achieving the inflation target over time”. The clear implication behind that statement is an expectation that policy was likely to be on hold for a considerable period. As we have seen, that was an accurate assessment.
In the April Statement, he has changed this language for the first time ever. He still notes that “the Board judged that it was appropriate to hold the stance of policy unchanged at this meeting”. However, he then changes tact with a new sentence. “The Board will continue to monitor developments and set monetary policy to support sustainable growth in the economy and achieve the inflation target over time”. Although, a cursory glance at this sentence might not indicate any change in stance, it does give greater emphasis to the fluidity of the current situation. If this change was not intended, then clearly he would have continued with the approach that has marked his time as Governor.
Therefore this change appears to be a very clear intention to signal that policy is much more ‘live’ than has been the case since the Governor was appointed.
This signal is consistent with Westpac’s expectation that the Board is likely to adopt an easing bias following the May Board meeting. Our thinking behind that approach has been that the Statement on Monetary Policy for May will include a downward revision of the Bank’s growth forecasts. Further support for this view is apparent in the exclusion of the RBA’s current growth forecasts in the April Governor’s Statement. Arguably, this indicates an uneasiness with the 3% for 2019 and the 2 ¾% for 2020.
In the RBA’s defence, note that the March Governor’s Statement came before the release of the December quarter National Accounts, which showed that six month annualised growth had slowed to 1% in the second half of 2018. We expect that the RBA will lower its 2019 growth forecast from 3% to 2 ¾%, and the 2020 forecast from 2 ¾% to 2 ½%. Those forecasts are either at or below ‘potential growth’ (assessed as 2 ¾%).
In commenting on the low growth rate for 2018 of 2.3%, the Governor pointed out “the GDP data paint a softer picture of the economy than do the labour market data”. Arguably, the RBA may hold off from a specific easing bias( despite forecasting below trend growth), attributing this tension in the data as key to the outlook for policy.
Westpac has argued that the actual rate cut will not occur until August, when a further downward revision of forecast growth will be required and evidence will be building of a slowdown in the labour market.
Last week, we wrote on the potential impact of tonight’s Federal Budget on monetary policy. If the Governor saw the Budget as a significant swing factor in his thinking, it is unlikely that he would have chosen to change the language in the Statement just before the announcement.
It is our view that a boost to disposable income from tax cuts will certainly be of some assistance to the economy, but is unlikely to sufficiently offset the near term drag on incomes and spending from the negative wealth effect from falling house prices; weak wages growth; and a major downturn in activity in the housing market.
We were a little surprised with the Governor’s change in stance but find it consistent with our general view that the RBA is on track to adopt an easing bias in May and cut the overnight cash rate in August and November.
BILL EVANS is Chief Economist for Westpac.
</body></html>

bevans-rYk9SxEa4r

Why one small change could signal a big shift in the RBA's thinking: Bill Evans

<html><body>
EXPERT OBSERVATION 
This month’s RBA Board meeting saw interest rates remain on hold for the 29th meeting (or 32nd month) in a row. No surprise there.
But while the RBA’s post meeting statement was little changed in relation to global conditions, the strong labour market and the housing “adjustment”, it did sound a little bit more dovish in two areas.
First in its acknowledgement of weak December quarter GDP growth and consumer spending.
And second in adding at the very end of its statement that it “will continue to monitor developments”.
Of course it would be dangerous to read too much into this but maybe the RBA’s neutral bias on rates is getting a bit less neutral in the direction of easing.
Our view remains that the RBA is underestimating the impact of the housing downturn on the economy – particularly in terms of its impact on consumer spending – and as a consequence we still see weaker growth and lower inflation than the RBA is forecasting.
As a result, our view remains that the RBA will cut the cash rate to 1% by year end.
At this stage it makes sense for the RBA to see what the Budget and the election bring in terms of fiscal stimulus, but our base case is that the first cut will come around June but with the RBA moving to an easing bias at its May meeting.
SHANE OLIVER is the Head of Investment Strategy and Chief Economist at AMP Capital
</body></html>

soliver-smf6LQXgW9

RBA starting to sound a little more dovish: Shane Oliver

<html><body>
The Reserve Bank of Australia (RBA) has today made the decision to leave the nation’s official cash rate (OCR) unchanged at 1.50%.
RBA board members have held the nation’s cash rate yet again, however a range of economic factors are likely to encourage the bank to cut the rate.
The OCR’s function as an anchor to lenders’ interest rates shifted over 2018, as lenders were forced to respond to higher funding costs. Moreover, markets are pricing in a 90% probability of a rate cut by August this year, adding further pressure on the RBA to change its long held stance on monetary policy.
The RBA considers a range of global and domestic economic factors when making its monetary policy decisions. At its March meeting, the US Federal Reserve took a dovish stance on monetary policy, opting to hold the Fed funds rate at 2.25-2.50%. A rate hike was expected by the Fed, however comments from Chairman Powell points to no increases in the near-term due to ongoing economic expansion in the US.
In the minutes of the March Monetary Policy Meeting, RBA board members noted that trade tensions continue to weigh on the global economic outlook. Members noted that in Australia, labour market conditions had continued to improve. The RBA continues to monitor the weakening housing market, drawing attention to Sydney and Melbourne, where dwelling values had fallen 13% and 10% respectively, since their peaks.
The most recent CoreLogic Hedonic Home Value Index revealed that national dwelling values fell by 0.6% over March and have fallen by a cumulative 7.4% since peaking in October 2017.
The most recent data from the Australian Bureau of Statistics revealed that the number of dwelling commitments to owner-occupiers fell 2.6% over January 2019.
Furthermore, National Australia Bank’s most recent Monthly Business Survey points to deteriorating business confidence. Similarly, the Westpac Melbourne Institute Index of Consumer Sentiment revealed the weakest consumer mood since September 2017.
Today’s strict lending practices, born out of lenders’ self-imposed tightening in the wake of the Banking Royal Commission, continues to play a part in the slowing property market. This places greater importance on the need for future home buyers and borrowers alike to get in shape financially.
The slowdown in the nation’s economic growth would also be of concern to RBA board members, with recent GDP data revealing a slowdown in growth due in part to declining dwelling investment.
In the current lending environment, my advice to borrowers would be to speak to a mortgage broker to ensure their home loan applications are as tight as possible. The reality is that lenders are going to call out any and all undeclared living expenses on home loan applications, significantly lengthening the time to approval.
Preparing for a home loan application today is not as simple as saving for a deposit. The high level of scrutiny by loan assessors means prospective buyers, and those looking to refinance their loans, should be: cutting back on discretionary spending at least six months ahead; closing credit cards that are no longer being used and reducing limits where possible; and knowing where they are spending every dollar.
The good news for those with property ownership aspirations is that lenders are aggressively competing for low risk borrowers, which means it’s a great time to learn what your options are.
If you are looking to apply for a home loan this year and need to get home buying ready, speak to your local Mortgage Choice mortgage broker. A broker will assess your financial situation in the same way a lender would and give you a clear indication of your borrowing power.
When the time comes your broker can help you prepare a home loan application that has the best chance of being viewed favourably by the lender you choose.
SUSAN MITCHELL is the Chief Executive Officer of Mortgage Choice
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RBA's stalemate nearing its end: Mortgage Choice CEO Susan Mitchell

<html><body>
The April meeting of the RBA has seen the cash rate remain on hold at 1.5 percent.
It has now stayed at record lows for 29 consecutive meetings. 
The last time the rate changed was in August 2016.
CoreLogic's head of research Tim Lawless said there is a growing likelihood the cash rate will move lower later this year.
"While labour markets remain strong, low unemployment and above average jobs growth is generally confined to New South Wales and Victoria," Lawless said.
"Concerns around slowing consumption as the wealth effect reverses, causing households to pull back on spending and revert to saving were likely a central theme of the RBA’s board meeting deliberations. 
"The ongoing falls in dwelling values have the potential to weigh down consumer attitudes towards spending and cause a sharper than anticipated fall in residential construction activity.
"The latest data from CoreLogic shows the pace of decline has eased off somewhat over the past couple of months, but the geographic scope of weak housing market conditions has broadened. 
"With values trending lower across most regions of Australia, household wealth is being eroded and the risks of a downturn in consumer spending are heightened.  Also, with economic growth losing momentum, as well as inflation and wages growth remaining below expectations, there are plenty of reasons why the RBA might have considered a cut to the cash rate today. 
"The consensus from financial markets remains that interest rates will be cut later this year. 
"We should get a better feel for the RBA’s monetary policy position via the Financial Stability Review, released on April 12, and the Statement on Monetary Policy, released on May 10. 
"Chances are we will see some downwards revisions to the RBA’s forecasts for economic growth and inflation which could set the scene for lower rates over the second half of the year.  
 
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jrobinson-rf4aSBido9

RBA continues to hold rates at record lows in April

<html><body>
<div>
<div class="rss-mr-content">
At its meeting today, the Board decided to leave the cash rate unchanged at 1.50 per cent.
The outlook for the global economy remains reasonable, although growth has slowed and downside risks have increased. Growth in international trade has declined and investment intentions have softened in a number of countries. In China, the authorities have taken steps to ease financing conditions, partly in response to slower growth in the economy. Globally, headline inflation rates have moved lower following the earlier decline in oil prices, although core inflation has picked up in a number of economies. In most advanced economies, unemployment rates are low and wages growth has picked up.
Global financial conditions remain accommodative and have eased recently. Long-term bond yields have declined further, consistent with the subdued outlook for inflation and lower expectations for future policy rates in a number of advanced economies. Across a range of markets, risk premiums remain low. Equity markets have also risen and are being supported by growth in corporate earnings. In Australia, long-term bond yields have fallen to historically low levels and short-term bank funding costs have moderated further. The Australian dollar has remained within its narrow range of recent times. While the terms of trade have increased over the past couple of years, they are expected to decline over time.
The Australian labour market remains strong. There has been a significant increase in employment and the unemployment rate is at 4.9 per cent. The vacancy rate remains high and there are reports of skills shortages in some areas. The stronger labour market has led to some pick-up in wages growth, which is a welcome development. Continued improvement in the labour market is expected to see some further lift in wages growth over time, although this is still expected to be a gradual process.
The GDP data paint a softer picture of the economy than do the labour market data. GDP rose by just 0.2 per cent in the December quarter to be 2.3 per cent higher over 2018. Growth in household consumption is being affected by the protracted period of weakness in real household disposable income and the adjustment in housing markets. The drought in parts of the country has also affected farm output. Offsetting these factors, higher levels of spending on public infrastructure and an upswing in private investment are supporting the growth outlook, as is the steady growth in employment.
The adjustment in established housing markets is continuing, after the earlier large run-up in prices in some cities. Conditions remain soft and rent inflation remains low. Credit conditions for some borrowers have tightened a little further over the past year or so. At the same time, the demand for credit by investors in the housing market has slowed noticeably as the dynamics of the housing market have changed. Growth in credit extended to owner-occupiers has eased. Mortgage rates remain low and there is strong competition for borrowers of high credit quality.
Inflation remains low and stable. Underlying inflation is expected to pick up gradually over the next couple of years, although this has been taking a little longer than earlier expected. The central scenario is for underlying inflation to be 2 per cent this year and 2¼ per cent in 2020. In the near term, headline inflation is expected to decline because of lower petrol prices earlier in the year, while underlying inflation is expected to remain broadly stable.
The low level of interest rates is continuing to support the Australian economy. Further progress in reducing unemployment and having inflation return to target is expected, although this progress is likely to be gradual. Taking account of the available information, the Board judged that it was appropriate to hold the stance of policy unchanged at this meeting. The Board will continue to monitor developments and set monetary policy to support sustainable growth in the economy and achieve the inflation target over time.
</div>
</div>
<div class="box-enquiries"> </div>
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Housing market dynamics have changed to soft: RBA Governor Philip Lowe's April 2019 statement

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Switching mortgages from the average standard variable rate to the average lowest rates on the market could save a mortgage holder nearly $48,000 of interest over the lifetime of a loan, new figures from Canstar reveal.
Canstar, Australia's biggest financial comparison website, calculated the average standard variable rate of a mortgage is 4.43%.
The average of the lowest rates is 3.71%, a difference in repayments of $159 a month, based on a $400,000 home loan.
Over the lifetime of a loan that equates to $47,653 of interest.
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2019/4/2/Can-switch.jpg" alt="">
Canstar finance expert Steve Mickenbecker says what a difference a month makes, as the RBA look likely to cut rates in the not too distant future.
"Weak December quarter GDP numbers followed by lower than expected jobs growth, have taken a rate increase off the agenda altogether," Mickenbecker says.
He says a lower cash rate looks inevitable, however suggested for now the RBA is still monitoring important figures in case there are further declines.
"The RBA could be keeping its powder dry to leave room to move if we start to see even more disturbing GDP and jobs numbers, and property prices in coming quarterly results.
"Lenders are factoring in cuts, with 274 fixed rate cuts this calendar year. The bigger rate cuts are in the 4 and 5 year terms, with funding costs for Australian lenders following the downward trend for US longer term interest rates.
"The increased wholesale funding costs that drove up home loan rates for existing borrowers up from September last year have since been reversed, with the bank bill swap rate falling again.
"Lenders have not returned these rate increases, but have invested them in lower rates for new borrowers.
"When the RBA does move, the questions will be how much will the banks pass on and will cuts be enough to make a difference?
"The most likely answers are not all of it and there will be a long lag before any rate cuts work through the economy.
 
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Switching mortgages could save nearly $48,000 in interest: Canstar

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GUEST OBSERVATION 
The recent case of Burgess v Burgess [2018] WASC 279 (‘Burgess’) continues a line of cases that consider the conflict that arises where a person acts as executor of a deceased estate while also receiving superannuation death benefits in their personal capacity.
Broadly, Burgess and the following cases revolve around the executor/administrator’s duty to collect assets of the deceased on behalf of an estate. As a fiduciary role, an executor/administrator must not, without proper authorisation, allow their personal interests to conflict with their obligations owed to the estate.
These cases are sure to have an increasing impact on death and succession planning in an SMSF context as around 70% of SMSFs are two-member funds and, in relation to couples, each spouse typically appoints their spouse as executor of their estate. Accordingly, many surviving spouses may thrust into a position of potential conflict in relation to their duties as an SMSF trustee\director and as an executor.
McIntosh v McIntosh – administrator was held to be conflicted
McIntosh v McIntosh [2014] QSC 99 (‘McIntosh’) involved a mother who was appointed as the administrator of her deceased son’s estate. While acting in that role, the mother also applied to three of her son’s industry/retail super funds to receive his death benefits in her personal capacity, which she received. If these death benefits had instead been paid to the estate they would have been distributed equally between her and her former husband (as the deceased parents) under the laws of intestacy in Queensland as their son died without a will. 
After some legal posturing between the mother’s and the father’s lawyers, the mother filed an application in the Queensland Supreme Court to determine the matter which found:
… there was a clear conflict of duty … contrary to her fiduciary duties as administrator. When the mother made application to each of the superannuation funds for the moneys to be paid to her personally rather than to the estate, she was preferring her own interests to her duty as legal personal representative to make an application for the funds to be paid to her as legal personal representative. She was in a situation of conflict which she resolved in favour of her own interests. As such she acted … in breach of her fiduciary duty as administrator of the estate …
Accordingly, the mother was required to account to the estate for the super benefits she had personally received. Also of note was in this case was the fact that the mother was a nominated beneficiary in respect of each of the super funds via non-binding nominations. Had binding death benefit nominations (‘BDBNs’) been in place, no conflict would have arisen. For further analysis of this case <a id="LPlnk850753" href="https://www.dbalawyers.com.au/smsf-strategy/mcintosh-v-mcintosh-2014-qsc-99-important-implications-smsf-succession-planning/" target="_blank" rel="noopener noreferrer" data-auth="NotApplicable">click here</a>.
Brine v Carter – executor was held not to be conflicted
Brine v Carter [2015] SASC 205 examined a potential conflict arising in the case of an executor which did not require the executor to account to the estate. Professor Brine had appointed his three children and Ms Carter, his de facto spouse, as the executors of his estate. Professor Brine had two super accounts/pensions in the same industry super fund. As one pension had no residual value and could only be paid to his surviving spouse, the dispute related to the remaining pension, which could be paid to a dependant or the legal personal representative (deceased estate). Professor Brine had completed a non-binding death benefit nomination in favour of his legal personal representative to receive this pension amount.
Ms Carter applied to the super fund trustee to receive the benefits in both accounts in her personal capacity.
Ms Carter had previously represented to the other three executors on multiple occasions that the estate was not an eligible beneficiary of the super benefits. However, after making their own enquiries, the deceased’s three children found out that they could claim the death benefit on behalf of the estate and proceeded with this claim.
The super fund trustee then exercised its discretion to pay both pension benefits to Ms Carter and the remaining executors formally disputed this decision. Due to her conflict, Ms Carter recused herself from any discussions or actions relating to the dispute notice issued to the fund trustee by the executors and did not object to it but remained an executor. Ms Carter in fact made further submissions to the trustee in her personal capacity claiming the benefits.
After the super fund trustee affirmed its decision and other dispute processes provided no further recourse, the remaining executors applied to the South Australian Supreme Court for an order that Ms Carter account to the estate for these benefits. The court found that:
<ul>
<li>Ms Carter was in a position of conflict regarding her duties as an executor.</li>
<li>Ms Carter’s appointment as an executor via the deceased’s will, while providing some acknowledgement by the deceased of a conflict, was not by itself sufficient to overcome her position of conflict. Rather, a specific conflict authorisation was required.</li>
<li>As the other executors claimed the super benefits on behalf of the estate and had full knowledge about their rights prior to the super fund trustee’s decision, they effectively consented to Ms Carter claiming the benefits in her personal capacity despite her conflict. From that point, Ms Carter did not act in breach of her duty as an executor as there was no connection between her breach and the benefit she received.</li>
<li>Ms Carter was not required to account to the estate.</li>
</ul>
Brine v Carter provides a particular set of facts that resulted in a somewhat incongruous outcome that allowed an executor to apply for and receive death benefits in her personal capacity despite a potential conflict arising. The court noted that had the other executors not been aware of Ms Carter’s application, and had they also not made an application on behalf of the estate, Ms Carter would have been liable to account to the estate. This outcome was therefore due to the particular facts in this case. In many other factual scenarios, the conflict could easily have resulted in the spouse having to account to the estate.
Burgess v Burgess – sacred trustee obligations
In Burgess v Burgess [2018] WASC 279 Mr Burgess died without leaving a will in May 2015 and was survived by his wife and two minor children. A year after his death, Mrs Burgess applied to become administrator of his estate and was appointed on 27 June 2016.
Mr Burgess had super benefits in four large public offer funds and Mrs Burgess made a claim to two of those funds to be paid her deceased husband’s death benefits. She applied for and received benefits from one fund prior to her appointment as administrator and applied for and received benefits from another fund after her appointment.
Mr Burgess’ estate (including any super paid to the estate) would be split among Mrs Burgess and their two young children. By the time of hearing, one super fund had paid benefits to the estate. The fourth fund had not yet made any payment and Mrs Burgess had not made any application to it. Further, there were no BDBNs in place in relation to any of the funds.
Due to the uncertainties, Mrs Burgess herself made an application to the Western Australian Supreme Court. Ultimately, the court followed the principles in McIntosh and found that:
<ul>
<li>Mrs Burgess would retain the benefits from the first super fund, as she was not an administrator at the time of application and thus no conflict had arisen in relation to the first fund.</li>
<li>Mrs Burgess was required to account to the estate for the benefits applied for and received after she was appointed. There was a conflict of interest and as administrator she was bound to claim the benefits on behalf of the estate after she was appointed administrator.</li>
<li>Mrs Burgess was bound to claim the remaining super benefits on behalf of the estate.</li>
</ul>
The court’s comments in Burgess demonstrate the strict fiduciary obligations placed on an executor or administrator. Martin J explained Mrs Burgess’ obligations at para [84] as follows:
In an age of increasing moral ambivalence in western society the rigour of a court of equity must endure. It will not be shaken as regards what is a sacred obligation of total and uncompromised fidelity required of a trustee. Here, that required the administrator not just to disclose the existence of the (rival) estate interest when claiming the superannuation moneys in her own right from the fund trustee. It required more. It required her to apply as administrator of the estate for it to receive the funds in any exercise of the fund trustee's discretion.
Martin J gave the following comments at para [85] regarding the fiduciary duties of an executor:
The interests of a deceased estate require a 'champion' who cannot be seen (even if they are not) to be acting half-heartedly, or with an eye to achieving outcomes other than an outcome that thoroughly advances the interests of the estate - to the exclusion of other claimants.
Martin J made the point that the undesirable outcome in this case might have been avoided had Mr Burgess made a will that explicitly contained a conflict authorisation or if he had signed BDBNs in relation to his super benefits. In lamenting the outcome Martin J at para [91] stated:
The result is, of course, messy for the family and less clear cut than might otherwise have been desired. However, that is a result of wider trustee integrity policy principles of the law which take effect and prevail. They are of vital importance and are applicable to universal circumstances extending well beyond the present rather regrettable factual situation. The present is a situation, I reiterate, that might have been avoided by the two measures I earlier mentioned.
Other important cases
In the case of Re Narumon [2018] QSC 185 the court considered whether attorneys under an enduring power of attorney (‘EPoA’) could validly execute both a BDBN confirmation/extension as well as a new BDBN on behalf of a member. Whether an attorney will have such power will depend on the SMSF governing rules, the EPoA document, the relevant powers of attorney legislation in the applicable state/territory and the federal superannuation legislation.
In Re Narumon the member (Mr Giles) became incapacitated and his attorneys under an EPoA, his wife (Mrs Giles) and his sister (Mrs Keenan), purported to both extend a prior lapsed BDBN and to execute a new BDBN, both of which provided for death benefits to be paid to them. The EPoA document did not expressly authorise the attorneys to enter into a conflict transaction. The Court found that the extension of the prior BDBN was valid since:
<ul>
<li>the fund’s governing rules allowed the prior BDBN to be confirmed and provided that any power or right of a member could be exercised by an attorney;</li>
<li>while the EPoA document did not expressly deal with superannuation matters, the meaning of ‘financial matters’ in the relevant (Queensland) legislation was wide enough to cover superannuation; and</li>
<li>while a ‘conflict transaction’ entered into by an attorney can invalidate a transaction, the confirmation of the prior BDBN was not a conflict transaction. While the BDBN benefited the attorneys it was found not to amount to a conflict as it simply ensured the continuity of Mr Giles’ prior wishes.</li>
</ul>
However, the new BDBN executed by Mrs Giles and Mrs Keenan was found to be a conflict transaction as it provided for a different payment of death benefits which slightly benefited Mrs Giles more than the extended BDBN. Thus, the new BDBN was invalid. For a detailed analysis of this case and its lessons <a id="LPlnk492694" href="https://www.dbalawyers.com.au/announcements/important-supreme-court-decision-provides-further-guidance-on-binding-death-benefit-nominations/" target="_blank" rel="noopener noreferrer" data-auth="NotApplicable">click here</a>.
In the case of Re Marsella; Marsella v Wareham (No 2) [2019] VSC 65 the deceased’s daughter, who was also a co-trustee, was ordered to repay death benefits back to the fund and was removed as a trustee along with her co-trustee husband for acting ‘grotesquely unreasonable’ in conflict of her trustee duties and in bad faith. This case explores the high legal standards placed on SMSF trustees and highlights the need for careful attention to SMSF succession planning. For a detailed analysis of this case and its lessons <a id="LPlnk205523" href="https://www.dbalawyers.com.au/announcements/grotesquely-unreasonable-and-smsf-trustees-paying-death-benefits-re-marsella/" target="_blank" rel="noopener noreferrer" data-auth="NotApplicable">click here</a>.
SMSFs
It is important to consider the impact of these cases from an SMSF perspective as it is typical for the spouse of a deceased SMSF member to also be an executor or administrator of that member’s estate. In such a situation, a potential and real conflict may arise between the executor/administrator’s obligations as trustee of the estate and their desire to receive superannuation death benefits in their personal capacity. 
These cases reiterate the importance of planning for death and SMSF succession. In all cases, the conflict difficulties would likely have been avoided had the deceased had a will with appropriate conflict authorisations and/or BDBNs were in place to remove the trustee’s discretion as to whom death benefits could be paid.
In any super death benefits matter, advisers and trustees should ensure that applications to receive benefits are not made without first considering, among other things, the possible conflict implications. Moreover, advisers should recommend that their clients proactively implement SMSF succession and death benefit strategies that ensures the surviving spouse is not placed in a position of conflict that could undermine their ability to receive their spouse’s death benefits. This might involve special provisions in wills, EPoAs, BDBNs, death benefit deeds and other legal documents.
Conclusion
This line of cases illustrates that the courts treat the fiduciary duties of an executor/administrator in a strict and ‘sacred’ manner. Further, the courts will uphold these obligations despite what might be seen as a strict and inflexible approach resulting in an ‘unfair’ outcome.
DBA Lawyers is well placed to advise and document succession strategies to overcome these risks. We offer, among other services:
<ul>
<li>Succession planning advice</li>
<li>BDBNs</li>
<li>Death benefit deeds</li>
<li>Constitutions with successor directors</li>
<li>SMSF deeds with numerous succession strategies</li>
</ul>
For an article on succession planning strategies <a id="LPlnk80306" href="https://www.dbalawyers.com.au/smsf-deeds/smsf-succession-strategies-2/" target="_blank" rel="noopener noreferrer" data-auth="NotApplicable">click here</a>.
Without proper prior planning, SMSF members could be left with conflicts, resulting in substantial time and cost hurdles in the event there is any dispute.
Shaun Backhaus is a Lawyer at DBA Lawyers  and can be contacted <a id="LPlnk319001" href="mailto:sbackhaus@dbalawyers.com.au" target="_blank" rel="noopener noreferrer" data-auth="NotApplicable">here</a>.
Daniel Butler is a Director at DBA Lawyers and can be contacted <a id="LPlnk625190" href="mailto:dbutler@dbalawyers.com.au" target="_blank" rel="noopener noreferrer" data-auth="NotApplicable">here</a>.
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Can a spouse claim their deceased partner's super if they are also the estate executor?

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Westpac are seeking to take market share as interest-only loans approach their expiry by offering a $2,000 rebate to new customers refinancing with them.
Westpac and its subsidiaries will offer the $2,000 rebate for anyone refinancing with a loan amount of over $250,000, according to the Australian Financial Review.
The group is also offering a $1,000 purchase rebate for every property bought with a loan amount of over $250,000.
A record $170 billion of IO loans are set to expire over the next two years.
Around 45 percent of the Westpac loan book last year was made up of interest-only loans, followed by Commonwealth Bank, the nation's biggest lender, who had around 40 percent.
According to a recent analysis by investment bank Morgan Stanley, IO lending is expected to fall from around 40 percent of the big four's total loan book at the height of the real estate boom in 2017 to around 20 percent by next year.
This year around 25 percent of major lenders' IO loans, which equates to around $104 billion, is set to expire, the investment bank's analysis showed.
 
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jonathanchancellor-7SQnKwU6yx

Westpac to offer new borrowers $2000 refinancing rebate on IO reset

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GUEST OBSERVATION
Banks’ funding costs increased a little over 2018, driven by a rise in the cost of wholesale funding linked to money market rates, but with some offset from reductions in the cost of retail deposits. Most lenders passed the increase in funding costs through to their lending rates, including for mortgages. Nevertheless, funding costs and lending rates remain low by historical standards.
Funding costs typically influence lending rates
The rates that banks offer on loans to households and businesses are partly driven by the cost of their funding. Banks also take into account the risks inherent in lending, such as the credit risk associated with loans and the liquidity risk involved in funding long-term assets with short-term liabilities. Competition in the financial sector, banks’ growth strategies and the rate of return desired by equity holders also affect their lending rates.
The level of the cash rate is an important determinant of banks’ funding costs (Graph 1). This is because the cash rate acts as an anchor for the broader interest rate structure of the domestic financial system. The pass-through from the cash rate to funding costs and lending rates is an important channel of monetary policy transmission. Nevertheless, there are other factors that influence funding costs, such as changes in the level of compensation required by investors for holding bank debt. The full effect of such changes can take some time to flow through to funding costs and lending rates. This article updates previous Reserve Bank research, focusing on developments in major banks’ funding costs and lending rates over 2018.
<div class="image-graph">
<div class="title">Graph 1</div>
<img src="https://www.rba.gov.au/publications/bulletin/2019/mar/images/graph-0319-2-01.gif" alt="Graph 1: Cash Rate and Funding Costs">
</div>
The cost of banks’ funding increased a little over 2018, driven by the higher cost of raising funds in wholesale debt markets as a result of increases in money market rates, in particular the rise in bank bill swap (BBSW) rates. The costs of around two-thirds of the major banks’ debt and deposit funding are ultimately linked to BBSW rates, either directly or as a result of their interest rate hedging practices. The major banks’ overall funding costs have increased by less than money market rates because of the decline in interest rates on retail deposits, which account for around one-third of their non-equity funding.
Most lenders, including the major banks, have passed the increase in funding costs through to their lending rates. However, the average interest rate on outstanding housing loans increased only a little toward the end of 2018, and by less than the increases in banks’ standard variable rates (SVRs) for housing loans. This owed in large part to strong competition for low-risk borrowers, as observed through the larger discounts that banks offered from their SVRs. Rates on loans to businesses also increased, particularly for large business loans, since many of these loans are linked to BBSW rates. Despite the increases, both funding costs and lending rates remain historically low, consistent with the low level of the cash rate.
Banks’ funding composition was little changed over 2018
Banks obtain funding from four main sources: retail deposits, wholesale deposits, wholesale debt and equity. Excluding equity, around one-third of major banks’ funding is from retail deposits. These are sourced from households and small- to medium-sized businesses. Another third of non-equity funding is from wholesale deposits, such as those from large corporations, pension funds and the government. Short- and long-term wholesale debt account for most of the remaining third of funding. The composition of major banks’ funding was little changed over 2018 (Graph 2).
<div class="image-graph">
<div class="title">Graph 2</div>
<img src="https://www.rba.gov.au/publications/bulletin/2019/mar/images/graph-0319-2-02.gif" alt="Graph 2: Major Banks Funding Composition">
</div>
In aggregate, deposits account for around two-thirds of major banks’ non-equity funding. This share has been relatively stable over recent years, following a large increase in the share of deposits in the aftermath of the global financial crisis. That increase was consistent with banks seeking more stable funding, particularly from term deposits (Graph 3). The introduction of new liquidity regulations – such as the Net Stable Funding Ratio requirement that came into force at the start of 2018 – has also supported the banks’ demand for stable funding over recent years. Deposit growth slowed in 2018, in line with the generally subdued growth in banks’ assets.
<div class="image-graph">
<div class="title">Graph 3</div>
<img src="https://www.rba.gov.au/publications/bulletin/2019/mar/images/graph-0319-2-03.gif" alt="Graph 3: Deposit Growth">
</div>
The share of funding sourced by the major banks from wholesale debt markets was little changed over 2018. Within this, the major banks shifted their funding slightly, moving away from short-term debt toward long-term debt (Graph 4). A large share of wholesale debt funding for the major banks is sourced from offshore markets, mainly in US dollars. Australian banks transform most of these foreign-currency denominated exposures into Australian-dollar denominated exposures using the cross-currency swap market. As a result, Australian banks are far less sensitive to changes in interest rates in other jurisdictions than their share of offshore funding may suggest.
<div class="image-graph">
<div class="title">Graph 4</div>
<img src="https://www.rba.gov.au/publications/bulletin/2019/mar/images/graph-0319-2-04.gif" alt="Graph 4: Major Banks' Wholesale Debt">
</div>
The share of funding from equity has been stable
In addition to deposits and debt, banks obtain a small portion of their funding from equity. The share of funding from equity has been stable over recent years. Since mid 2015, banks have increased their stock of equity funding by around $40 billion. This was largely in response to changes in prudential regulations that have increased the average mortgage risk weights, and therefore the amount of capital that banks are required to hold. The major banks continue to indicate that they are on track to meet the Australian Prudential Regulation Authority’s (APRA) increased ‘unquestionably strong’ capital benchmarks by 2020 (as expected by APRA). Distinct from its ‘unquestionably strong’ benchmarks, APRA consulted on plans in late 2018 to implement a loss-absorbing capacity regime in Australia from 2023 (APRA 2018).
Banks' funding costs are a little higher than in recent years but remain low
We estimate that overall debt and deposit funding costs for the major banks increased by around 10 basis points over 2018 (Graph 5). This was driven by increases in the costs of wholesale debt and wholesale deposits. Nevertheless, funding costs remain low by historical standards.
<div class="image-graph">
<div class="title">Graph 5</div>
<img src="https://www.rba.gov.au/publications/bulletin/2019/mar/images/graph-0319-2-05.gif" alt="Graph 5: Major Banks' Funding Costs">
</div>
The cost of wholesale funding increased …
Wholesale funding – which includes both wholesale debt and wholesale deposits – accounts for around two-thirds of major banks’ non-equity funding. Wholesale funding costs tend to be roughly linked to BBSW rates, which increased in 2018 (Graph 6).
<div class="image-graph">
Graph 6
<img src="https://www.rba.gov.au/publications/bulletin/2019/mar/images/graph-0319-2-06.gif" alt="Graph 6: Bank Bill Swap Rates">
</div>
BBSW rates measure the cost for highly rated banks in Australia to issue short-term bank paper with tenors of up to six months. These rates are some of the key interest rate benchmarks for the Australian dollar and are widely used as reference rates in contracts including derivatives, loans and securities (Alim and Connolly 2018). BBSW rates are heavily influenced by expectations for the cash rate, although they are also affected by other factors, including developments in offshore money markets and changes in the demand for short-term bank paper from investors.<a id="r1" href="https://www.rba.gov.au/publications/bulletin/2019/mar/developments-in-banks-funding-costs-and-lending-rates#fn1"> </a>
The cost of wholesale debt for Australian banks is ultimately linked to BBSW rates either directly or as a result of their interest rate hedging practices. In addition to issuing floating-rate Australian-dollar denominated debt (at a spread to BBSW rates), banks swap much of their foreign-currency denominated or fixed-rate debt into Australian-dollar floating-rate exposures by using derivatives that typically use a BBSW rate as the reference rate. These hedging practices better align movements in the rates on Australian banks’ funding with those that they receive on their assets, which consist largely of loans that are variable rate and denominated in Australian dollars. Rates on wholesale deposits also tend to be closely linked to BBSW rates. In particular, wholesale term deposits are close substitutes for bank paper of the same tenor, so the rates offered on these deposits tend to move with BBSW rates.
Wholesale funding costs moved broadly in line with BBSW rates over 2018, with BBSW rates around 20 basis points higher than their average in 2017 (Graph 6). In particular, BBSW rates rose noticeably toward the end of the March, June and December quarters, as did other short-term money market rates in Australia and offshore. Most of the impact of a change in BBSW rates flows through to wholesale funding costs in three to six months, with the time frame varying between banks based on the maturity profiles of their short-term debt, wholesale deposits and interest rate hedging instruments. The increases in BBSW rates were reflected in higher costs for outstanding short-term and, to a lesser extent, long-term wholesale debt. Nevertheless, wholesale funding costs remain low relative to recent history (Graph 7).
<div class="image-graph">
Graph 7
<img src="https://www.rba.gov.au/publications/bulletin/2019/mar/images/graph-0319-2-07.gif" alt="Graph 7: Major Banks' Wholesale Debt Costs">
</div>
A few factors other than BBSW rates also put upward pressure on the cost of wholesale debt in 2018, although their contributions were relatively small. The major banks’ wholesale debt that is issued offshore was affected by increases in cross-currency basis swap spreads, which measure the cost of swapping foreign-currency exposures into Australian-dollar exposures. In particular, the major banks’ cost of sourcing short-term debt funding in US dollars and swapping it into Australian dollars increased by a little more than the increases in BBSW rates (Graph 8). Nevertheless, Australian banks may still prefer to issue offshore – even when it appears to be relatively more expensive – to diversify their funding base (Kent 2018). The slight shift in the composition of wholesale debt from short term to long term added a little to funding costs, along with an increase in the average original tenor of the major banks’ long-term debt.
<div class="image-graph">
<div class="title">Graph 8</div>
<img src="https://www.rba.gov.au/publications/bulletin/2019/mar/images/graph-0319-2-08.gif" alt="Graph 8: Major Banks Marginal Cost of Short-term Debt">
</div>
Banks continued to issue wholesale debt at relatively low yields in 2018. Australian banks issued bonds at a similar pace to previous years, with around $115 billion of bonds issued in the year. Net issuance, which takes into account bond maturities, was high in 2018, with issuance outpacing scheduled maturities by around $25 billion. Although spreads to benchmark rates for the major banks’ bonds widened over 2018, yields remained little changed around the low levels of recent years (Graph 9).
<div class="image-graph">
<div class="title">Graph 9</div>
<img src="https://www.rba.gov.au/publications/bulletin/2019/mar/images/graph-0319-2-09.gif" alt="Graph 9: Major Banks Bond Pricing">
</div>
… but this was partly offset by a decrease in the cost of retail deposits
Major banks’ funding costs increased by less than money market rates because the cost of retail deposits declined. Major banks’ overall deposit costs therefore fell over 2018, even though wholesale deposit rates increased (Graph 5). The decline in the cost of retail deposits was in large part due to substantial reductions in all of the major banks’ base rates on online savings accounts (excluding any ‘honeymoon’ or introductory bonus rates) (Graph 10). Honeymoon rates on online savings accounts were little changed. Partly offsetting this, there was a small increase in the major banks’ average rate on bonus savings accounts. Major banks’ advertised rates on retail at-call deposits remain low relative both to historical rates and to rates currently offered by non-major banks.
<div class="image-graph">
Graph 10
<img src="https://www.rba.gov.au/publications/bulletin/2019/mar/images/graph-0319-2-10.gif" alt="Graph 10: Major Banks' Retail Deposit Rates">
</div>
Although rates on new retail term deposits were little changed over 2018, the cost of outstanding term deposits fell slightly because some term deposits that were contracted at higher rates in earlier years have since been replaced by term deposits at lower rates. However, the impact of this on overall funding costs was somewhat offset by a change in the mix of deposits toward term deposits, which typically have higher interest rates than at-call deposits.
Banks increased their lending rates a little, but they remain low
Most lenders passed the increase in funding costs through to their lending rates for households and businesses. But lending rates remain low, consistent with funding costs and the cash rate.
Interest rates on housing loans rose a little for many borrowers over 2018. Most banks increased their SVRs on housing loans in the second half of 2018 by around 10–15 basis points. The banks generally attributed the increases to higher funding costs. However, the average interest rate on outstanding variable rate housing loans increased by only a few basis points over the second half of the year (Graph 11). This was partly because not all lenders raised their SVRs in that period; one of the major banks increased its housing SVRs in early 2019. In addition, interest rates on new housing loans continued to be significantly lower than interest rates on outstanding loans, which provides an indication of the strength of competition for low-risk borrowers. Some existing borrowers refinanced at a lower rate with a different lender or renegotiated the rate of their loan with their existing lender. Moreover, advertised interest rates on fixed-rate housing loans, which account for around one-fifth of outstanding housing credit, declined throughout 2018.
<div class="image-graph">
<div class="title">Graph 11</div>
<img src="https://www.rba.gov.au/publications/bulletin/2019/mar/images/graph-0319-2-11.gif" alt="Graph 11: Variable Housing Interest Rates">
</div>
Interest rates on outstanding loans to large businesses are estimated to have increased by around 35 basis points over 2018, reflecting in part the increases in BBSW rates (Graph 12). Most loans to large businesses are linked to BBSW rates. Rates on loans to small businesses were little changed over the year, though they remain noticeably higher than those for large businesses. Some banks increased their advertised rates for small businesses toward the end of 2018, citing higher funding costs.
<div class="image-graph">
Graph 12
<img src="https://www.rba.gov.au/publications/bulletin/2019/mar/images/graph-0319-2-12.gif" alt="Graph 12: Variable Business Lending Rates">
</div>
Banks’ implied lending spread narrowed a little
A bank’s implied spread on its outstanding lending is the difference between its average lending rates and overall funding costs. We estimate that this spread narrowed slightly for the major banks over 2018 (Graph 13). The implied lending spread did not narrow by as much as the increase in funding costs because much of this increase was passed through to an increase in lending rates, including for mortgages and large business loans.
<div class="image-graph">
<div class="title">Graph 13</div>
<img src="https://www.rba.gov.au/publications/bulletin/2019/mar/images/graph-0319-2-13.gif" alt="Graph 13: Major Banks Funding Costs and Lending Rates">
</div>
The implied lending spread differs from some commonly reported measures of bank profitability (for example, the net interest margin), because it excludes the returns on banks’ other interest-earning assets, such as high-quality liquid asset holdings. Yields on some of the banks’ liquid assets rose over 2018, consistent with increases in BBSW rates. The effect of this was to dampen the impact of higher funding costs on banks’ net interest margins.
Susan Black and Dmitry Titkov are from Domestic Markets Department at the Reserve Bank of Australia (RBA). 
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