Malaysian developer <a href="https://www.apartments.com.au/developers/s-p-setia">SP Setia</a> is the latest to jump into St Leonards booming Transport Oriented Development precinct.

The developer, which has previously delivered Sapphire by the Gardens apartment development in Melbourne, identified the Atchison Street site in 2023. It filed a Scoping Report around 12 months ago, and now has revealed the designs for the new&nbsp;40-storey mixed-use tower.

The State Significant Development Application covers <a href="https://next-portal.urban.com.au/projects/14650/summary">20-22 Atchison Street</a>, a 1,374 sqm site positioned between St Leonards Station and the new Crows Nest Metro station.

Designed by <a href="https://www.apartments.com.au/architects/cox-architecture">COX Architecture</a>, the project would deliver 181 apartments, above a four-storey commercial podium, five basement levels, and new public domain works along Mitchell Street. The apartment mix comprises 35 one-bedroom apartments, 39 one-bedroom-plus-study apartments, 85 two-bedroom apartments, and 22 three-bedroom residences.

The proposal has been lodged as a shop-top housing development under the NSW Government’s TOD planning pathway, which allows increased density around key transport infrastructure. The site sits within the recently rezoned Crows Nest Accelerated TOD Precinct.

<img alt="First look: SP Setia targets St Leonards skyline with 40-storey TOD tower" data-entity-type="file" data-entity-uuid="b799673d-48e2-46b0-801a-0e33a9330100" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/atchinson%20site.png?VersionId=dPh0UfwfaHpbFL1R7H1cbZNbIW0CHbCC" />

SP Setia acquired the Atchison Street site as part of its continued expansion into the Australian apartment market. In comments made to City &amp; Country (The Edge Malaysia) in 2023, SP Setia President and CEO Datuk Choong Kai Wai described the acquisition as “a strategic move” aligned with the group’s post-pandemic market recovery strategy.

“Our target for this exceptional development is local and overseas buyers, including first-home buyers, downsizers and investors,” Choong said.

The tower has been designed as a slender vertical form rising from a mixed-use podium, with COX Architecture positioning the development as a response to the evolving St Leonards and Crows Nest skyline.

“The purpose of the project is to facilitate the delivery of high-quality housing at a strategically located site and deliver a built tower outcome that is consistent with the desired future character of St Leonards and aligns with the TOD controls,” the design report stated.

<img alt="First look: SP Setia targets St Leonards skyline with 40-storey TOD tower" data-entity-type="file" data-entity-uuid="b1a85eee-76f7-436c-a6da-73ba827b9b13" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/atchinson%20entry.png?VersionId=dA9jHGPMcm.dDbwk4QfxqWiY5bfh3UVt" />

The podium would incorporate retail uses fronting Atchison Street, commercial tenancies, landscaped communal areas, and pedestrian improvements along Mitchell Street. Vehicle access and loading would be consolidated via Atchison Lane.

Residents would have access to more than 665 sqm of communal indoor and outdoor spaces, while the development proposes 96 parking spaces across five basement levels.

The proposal also includes a commitment for 10 per cent of residential floor space to be allocated toward affordable housing through a monetary contribution.

COX said the tower form responds directly to the emerging high-density character of the precinct while seeking to maximise solar access, cross ventilation, and outlook from apartments.

<img alt="First look: SP Setia targets St Leonards skyline with 40-storey TOD tower" data-entity-type="file" data-entity-uuid="2163f85c-f63b-4be3-aafa-f8763976cec5" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Article%20Feature%20Image%20%28Grid%29_5.png?VersionId=WiAmtIKJ6.ZQ41EtYEQ1fol7AeorKBlL" />

“The building is orientated towards north,” the Apartment Design Guide compliance report noted, adding that the tower’s slim form was driven by the constrained inner-urban site dimensions.

The design also incorporates landscaped setbacks and communal open space at podium level, intended to soften the interface with surrounding streets and improve pedestrian amenity.

The project adds to a growing wave of redevelopment proposals reshaping St Leonards and Crows Nest following the opening of the Sydney Metro City line and the NSW Government’s push for higher-density housing around major transport nodes.

Last week Stockland filed plans just down the road. They want to build a <a href="https://www.apartments.com.au/new-apartments/601-pacific-highway-st-leonards-nsw-2065">52-storey tower on Pacific Highway</a>.

Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/first-look-stockland-plans-52-storey-538-apartment-st-leonards-tower">First look: Stockland plans 52-storey, 538-apartment St Leonards tower&nbsp;</a>

Joel Robinson

First look: SP Setia targets St Leonards skyline with 40-storey TOD tower

<a href="https://www.apartments.com.au/developers/urban-property-group">Urban Property Group</a> has revealed plans for a new mixed-use tower at 10 Dangar Street, Wickham, advancing a proposal that would reshape the southern gateway to Newcastle’s city centre with one of the city’s tallest residential buildings.

The State Significant Development proposal, now on exhibition, seeks approval for a <a href="https://www.apartments.com.au/new-apartments/bowline-10-dangar-street-wickham-nsw-2293">43-storey tower</a> immediately adjacent to the Newcastle Interchange. The project would deliver around 200 apartments, including 42 affordable housing dwellings, alongside 99 co-living units, a 171-room hotel, retail space, and new public domain integrated through the site.

The scheme marks a significant escalation of plans previously approved for the site. Urban Property Group took over the prominent 2,904 sqm parcel, where excavation and demolition had already commenced under an earlier consent for a 14-storey mixed-use development.

<img alt="First look: Urban Property Group unveils Newcastle’s next supertower at Wickham interchange" data-entity-type="file" data-entity-uuid="58a96dd9-407f-4d20-86b4-94e4bfeef74b" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/wickham%20podium.png?VersionId=LGlf08pdFGAZDzvx_CXC4XakHNZRuEE0" />

Designed by <a href="https://www.apartments.com.au/architects/sjb-architects">SJB</a>, the tower has been conceived as a landmark transit-oriented development anchored to the Newcastle Interchange precinct. The proposal includes 245 build-to-sell apartments across a mix of one, two, and three-bedroom residences, as well as two penthouses. Fifteen apartments and one operational unit are earmarked for NDIS housing. The co-living component would add a further 99 units, while the podium would accommodate retail uses and hotel facilities.

SJB said the site presents “a valuable opportunity to anchor the precinct by setting the standard for design, active ground planes and character at the key southern gateway.”

The architecture responds directly to the site’s position beside major transport infrastructure and within one of Newcastle’s fastest-evolving urban renewal precincts. The tower form sits above a sculpted podium designed to frame new public spaces, including a through-site pedestrian link connecting Station Street to Hannell Street, landscaped plazas, and activated retail edges.

<img alt="First look: Urban Property Group unveils Newcastle’s next supertower at Wickham interchange" data-entity-type="file" data-entity-uuid="a7bd6ff0-f7db-4ce8-a6dc-ea56e72c6149" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/wickham%20lanne.png?VersionId=xzf39VADyhj7zBQY2I9fx9vI62u2tuSb" />

The design report describes the project as part of the broader transition of Wickham into “a vibrant, high-quality mixed-use urban precinct” that leverages proximity to the station, open space, and regional connectivity.

A detailed public art strategy has also been prepared for the development. The strategy positions the project as “a transit-oriented development of state significance at the gateway to Newcastle’s city centre” and outlines a series of integrated artworks responding to Newcastle’s industrial and transport heritage.

Creative Road’s curatorial framework for the project, titled Unveil, draws on “stratified surfaces, carved volumes, and light-filled apertures” while referencing Newcastle’s transformation from an industrial city into a contemporary education and technology hub.

<img alt="First look: Urban Property Group unveils Newcastle’s next supertower at Wickham interchange" data-entity-type="file" data-entity-uuid="77a882bb-14b1-4d28-99ff-9438e39508c0" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/wickham%20site.png?VersionId=cevgo_vN0eKPK78P8YcEu3mKPLkpFqE7" />

The proposal is being advanced through the NSW Housing Delivery Authority pathway after being declared State Significant Development in June 2025. The accompanying scoping report states the development aims to “maximise the site’s proximity to the Newcastle Interchange by delivering transit-oriented development” while increasing housing supply and affordable housing provision within the Newcastle LGA.

Urban Property Group’s plans align with the long-term strategic vision established under the Wickham Master Plan, which identified the interchange precinct as suitable for substantial uplift in height and density. The current proposal would significantly intensify that vision, positioning the tower among the tallest developments proposed for Newcastle.

The site sits immediately north of the Newcastle Interchange, bounded by Dangar Street, Hannell Street, and Charles Street. It is surrounded by a rapidly growing cluster of residential towers and mixed-use projects that have emerged following the completion of the light rail and transport interchange.

First look: Urban Property Group unveils Newcastle’s latest tower at Wickham interchange

Bottega House has completed settlement of a landmark riverfront site in Macquarie Street, St Lucia, representing its first major Brisbane development.&nbsp;

Positioned on the banks of the Brisbane River, the <a href="https://www.apartments.com.au/new-apartments/180-macquarie-street-st-lucia-qld-4067">premium site at 180 Macquarie Street</a> features uninterrupted river frontage in one of Brisbane’s most tightly held residential precincts.&nbsp;

The proposed development, currently under assessment with Brisbane City Council, has been designed by <a href="https://www.apartments.com.au/architects/plus-studio">Plus Studio</a> with interiors by <a href="https://www.apartments.com.au/interior-designers/mim-design">Mim Design</a> and will deliver a boutique collection of premium residences positioned specifically for owner occupiers and downsizers.&nbsp;

The residences are set to redefine luxury apartment living in the area, with a focus on architectural quality, refined finishes, landscape integration and elevated amenities including curated wellness facilities, resort-style pools and recreation spaces rarely seen in the local market.&nbsp;

Exclusive sales for the project will be led by Keenan &amp; Byrne, ahead of an anticipated launch later this year.&nbsp;

Bottega House Managing Director Nick Malloch said the project reflects the group’s ambition to deliver a highly curated residential offering within one of Brisbane’s most tightly held precincts.&nbsp;

“This is an incredibly rare riverfront opportunity and one we have approached with a long-term perspective,” Malloch said.&nbsp;

“Our vision from the outset was to create a boutique collection of residences that feel more like private homes than traditional apartments, with generous proportions, refined finishes and exceptional amenity throughout."

Malloch says there is a&nbsp;lack of premium owner-occupier stock of this quality in the market, particularly for downsizers wanting space, privacy and a true lifestyle offering without compromise.&nbsp;

"Demand is expected to be strong given the scarcity of premium riverfront opportunities of this nature within Brisbane’s inner-west."&nbsp;

Bottega House secures landmark riverfront site in St Lucia 

<section data-scroll-anchor="false" data-testid="conversation-turn-6" data-turn="assistant" data-turn-id="request-WEB:84a2af5e-d7cf-4ddf-922a-f4d44d6c6caa-2" data-turn-id-container="request-WEB:84a2af5e-d7cf-4ddf-922a-f4d44d6c6caa-2" dir="auto">
<section data-scroll-anchor="false" data-testid="conversation-turn-2" data-turn="assistant" data-turn-id="request-WEB:5a5ab36c-8dd3-454c-b456-c501f22f0eb4-0" data-turn-id-container="request-WEB:5a5ab36c-8dd3-454c-b456-c501f22f0eb4-0" dir="auto">
The arrival of the first piling rig officially marks the commencement of construction at SIERA’s new beachside apartment development, Exhale, in Northcliffe.

<a href="https://www.apartments.com.au/new-apartments/exhale-surfers-paradise-8-enderley-avenue-surfers-paradise-qld-4217">Exhale</a>, a glass-encased tower featuring 54 large-scale apartments at 8 Enderley Avenue, is SIERA’s third Gold Coast development. It follows the recently completed PIPIS Bilinga beachfront project, which achieved suburb-record prices, and the soon-to-be-completed Chevron Island development, Tapestry.

[smartcode_project:default project_id=112661 project_image_fid=359603]

<a href="https://www.apartments.com.au/developers/siera">SIERA</a> Founder and Managing Director Brent Thompson said the arrival of the piling rig represented a significant milestone for the development, which is scheduled for completion in late 2028.

Over the next month, around 260 piles are expected to be installed as work progresses on the basement structure. The building is anticipated to rise above ground level early next year, before unveiling its sculptural glass curtain wall, developed in collaboration with specialist façade engineers.

“The façade was designed to maximise panoramic coastal views while creating a distinctive architectural identity,” Thompson said.

[smartcode_project:default project_id=112661 project_image_fid=355935]

Designed by BDA Architecture, Exhale will comprise just 54 two- and three-bedroom residences across 26 levels, a level of low-density living rarely delivered in this beachside pocket between Surfers Paradise and Broadbeach.

The project has been conceived as a resident-only building, with no short-stay accommodation permitted. SIERA says the model is intended to appeal to long-term owner-occupiers rather than transient holiday demand.

[smartcode_project:default project_id=112661 project_image_fid=361052]

Residences have been designed with large-format layouts and expansive glazing, with most apartments featuring more than 30 metres of glass frontage to maximise natural light and ocean views.

The amenity offering spans two levels and centres on wellness and lifestyle, including a heated magnesium pool, sauna, yoga and Pilates studio, gymnasium, private dining facilities, cinema lounge, and dedicated surfcraft storage.

[smartcode_project:default project_id=112661 project_image_fid=359607]

More than half of the apartments have already sold. SIERA has also opened a sales gallery for Exhale at its Chevron Island commercial premises, near its Tapestry tower and the site of its second Chevron Island apartment development, which is slated to launch in early 2027.
</section>
</section>

[smartcode_project_cta:default project_id=112661]

SIERA kicks off construction at Northcliffe tower Exhale

Local Little Bay residents, along with buyers from premium postcodes across Sydney’s affluent Eastern Suburbs, have dominated purchases in developer-builder Urban Property Group’s first Eastern Suburbs apartment development, <a href="https://www.apartments.com.au/new-apartments/este-little-bay-jennifer-street-little-bay-nsw-2036">ESTE Little Bay</a>.

The $250 million coastal project, one of the first new developments in the area in several years, has proven particularly popular with downsizers, especially those from Coogee and Bondi. One Double Bay downsizer paid $4.7 million for a four-bedroom penthouse, setting a new local apartment price record in the process.

Buyers have been attracted to the combination of coastal tranquillity, premium design and amenity-rich neighbourhood living. The walkable village setting, along with proximity to three of Sydney’s leading golf courses, New South Wales Golf Club, St Michael’s Golf Club and The Coast Golf Club, has also been a key drawcard.

[smartcode_project:default project_id=112343 project_image_fid=352689]

Built across two low-rise buildings designed by <a href="https://www.apartments.com.au/architects/hill-thalis-architecture-urban-projects-pty-ltd">Hill Thalis</a> and set along a lush, landscaped green spine, designed by leading landscape architect <a href="https://www.apartments.com.au/landscape-architect/arcadia-landscape-architecture">Arcadia</a>, ESTE Little Bay offers a collection of one, two, three and four-bedroom residences with interiors by Richards Stanisich.

<a href="https://www.apartments.com.au/developers/urban-property-group">Urban Property Group</a> Sales Director, Tom McIvor said the response to ESTE has been "nothing short of extraordinary."

“Buyers have been quick to recognise ESTE as a rare opportunity to invest in a coastal sanctuary that offers both seclusion and connectivity to the heart of Sydney,” McIvor said.

[smartcode_project:default project_id=112343 project_image_fid=352687]

<a href="https://www.apartments.com.au/project-marketer/srm-residential">SRM Residential</a> Senior Director, <a href="https://www.apartments.com.au/project-marketer/srm-residential">Clayton Ross</a> said the local market has responded incredibly well, driven by ESTE’s exceptional location and the rarity it offers.

“We’ve seen strong interest from a variety of buyer groups, all of whom are drawn to the exclusivity and quality of the build and construction by the 4.5-star iCIRT-rated builder / developer, Urban Property Group. There’s truly nothing else like it along Sydney’s coastline.”

[smartcode_project:default project_id=112343 project_image_fid=352690]

The project also includes robust buyer protections, including Resilience Insurance’s Latent Defects Insurance, providing 10 years of structural cover, and an independent iCIRT-rating of the developer.

“The iCIRT-rating adds another layer of confidence,” Ross added. “Buyers see it as a safeguard for their investment and their lifestyle.” A highlight of ESTE’s offering is its exclusive wellness amenities, including a heated rooftop infinity pool and outdoor heated spa, a state-of-the-art Technogym fitness centre, and a sauna.

<a href="https://www.apartments.com.au/new-apartments/este-little-bay-jennifer-street-little-bay-nsw-2036">ESTE Little Bay</a> is topped out and is on track to complete towards the end of 2026, with residents moving in before Christmas.

[smartcode_project_cta:default project_id=112343]

Eastern Suburbs buyers snap up ESTE Little Bay apartments

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>While a rate change is highly unlikely at tomorrow’s Reserve Bank board meeting, home loan sizes are expected to soar this mortgage season, with borrowers looking to take advantage of a historically low-interest rate market, according to finder.com.au.  All 38 economists and experts surveyed last week for the monthly <a href="https://www.finder.com.au/?utm_source=pr_pressrelease_internal&amp;utm_campaign=51641f4a4e-01SEPT20169_2_2016&amp;utm_medium=email&amp;utm_term=0_5921dab448-51641f4a4e-295349757&amp;goal=0_5921dab448-51641f4a4e-295349757" target="_blank">finder.com.au</a> RBA Survey are forecasting a pause to the cash rate at 1.5 percent, following last month’s rate cut.  However, there may be a further fall to come, with 47 percent of the experts predicting a rate cut before 2017. November was the most likely month cited for a cash rate drop. In fact, over seven in 10 (72 percent) of the experts are forecasting the rate to slip below its current value of 1.5 percent. Most of these experts (14, 39 percent overall) expect the cash rate to bottom out at 1.25 percent, with 22 percent (8) expecting a low of 1.00 percent and four economists (11 percent) forecasting the cash rate to dip even further.  With two cash rate cuts already in the bag this year – the 12th cut this rate cycle – all signs are pointing to a strong mortgage season (September to November 2016) with the national home loan size set to swell. While the current average national home loan size is $360,100, new data, which will incorporate the effect of last month’s rate cut, is expected to show that loan sizes are on the rise. Graham Cooke, Insights Manager at finder.com.au says, historically, rate cuts have usually led to loan size increases. “In the months directly following the last 10 RBA rate cuts prior to August 2016, the average home loan size in Australia increased seven times and the first home owner loan size rose eight times.  “The average increase in first home owner loans was 1.57 percent, with the most significant increase in June 2016, when loan sizes increased by 3.6 percent (directly following the May 2016 rate cut).  “The average first home buyer loan size currently sits at $335,000 as of June. Based on this and recent trends we could expect first home buyer loan sizes to jump by about $5,260, while the average loan of $360,100 could increase by 1.80 percent, or $6,480,” he says. “The potential danger with an unprecedented low rate market is that borrowers, particularly first home buyers, may be enticed to increase their borrowing budgets in order to get into the property market. As a result, some may be borrowing more than they can afford in the long-term. “But a home loan is a long-term commitment that needs a conservative approach. When applying for a home loan, always do your research, and this includes factoring in a buffer of 2-3 percent to accommodate future rate hikes.  “While rate hikes may be difficult to imagine right now, thinking ahead may end up saving you money in the long run,” he says. When comparing your home loan options, jump online to see what’s on offer. Pay attention to the maximum insured loan-to-value ratio (LVR) to see how much of a deposit you’ll need to complete and whether or not you’ll need to pay mortgage insurance. To estimate your borrowing capacity, <a href="https://finder.us9.list-manage.com/track/click?u=cc5e9bce699fa1d71a67cf499&amp;id=e4acf67db0&amp;e=58cd8ffd03" target="_blank">use an online calculator</a> to get an indication of how much you can comfortably afford to borrow.  Here’s what our experts had to say: Jordan Eliseo, ABC Bullion: "The RBA will be happy to sit tight after their recent move, though we still see rates heading much lower in this cycle. CAPEX, inflation, wage growth etc are all still soft, and the AUD is still stubbornly sitting above USD $0.75. Headline GDP growth rates are reasonable, but we still expect the RBA to look through that and cut later in this year." Shane Oliver, AMP Capital: "It’s too soon since the last move in August and not much has changed to justify a move." Garry Shilson-Josling, Australian Associated Press: "The RBA prefers to link its cash rate moves to quarterly CPI releases and the next is not until late October." Darryl Gobbett, Baillieu Holst Ltd: "Bias is to cut further with the Aussie dollar still higher than wanted and outlook for continued private sector deflation but RBA wishes to retain some flexibility. Expect cash rate to be cut in November to 1.25%." Peter Munckton, Bank of Queensland: "The RBA has the cash rate at the right level." Richard Robinson, BIS Shrapnel: "Economic growth and the unemployment rate are reasonable at present. The last rate cut failed on three grounds - firstly, the exchange rate was unaffected (and it is our view that the RBA was seeking to engineer a depreciation) and secondly, the housing market saw an increase in sales activity and prices (and the RBA had said it didn't think there was a risk of this happening) and thirdly, only half of the cut was passed on by the commercial banks. The RBA should keep their powder dry for when the economy weakens in 1-2 years time or cut on the back of a rise in US rates to engineer a drop in the dollar." Michael Blythe, CBA: "[The RBA are] waiting for next CPI." Savanth Sebastian, CommSec: "RBA will want to see how the economy responds to the last two rate cuts in a post-election environment. Inflation outcomes will be key to next move on rates." John Hewson, ANU: "[The RBA are in] wait and see mode." Scott Morgan, Greater Bank: "The RBA is currently focussed on what the Australian dollar is doing what the US will do with rates. With the fairly stable dollar and talk of US rate increases, I think they will ‘wait and see’ this month." Mark Brimble, Griffith University: "They will take time to consider their options and explore alternatives as they wait to determine the impact of the previous rate cut (if any)." Peter Haller, Heritage Bank: "The RBA will wait to see what impact the August rate cut has on inflation and the economy more generally." Alex Joiner, IFM Investors: "No catalyst for a further move in terms of the data flow or deterioration of the outlook." Robert Montgomery, Infrastructure Partnerships Australia: "The RBA will hold rates at 1.5% after last month’s cut and wait to see how inflation responds. However, due to broader economic factors, monetary policy is unlikely to stimulate inflation in the near-term, meaning that the RBA will be cautious about further rate cuts in the near future." Michael Witts, ING Bank: "The RBA has done sufficient for the immediate term, much will depend on the US Fed and how the AUD responds." Leanne Pilkington, Laing+Simmons: "The cash rate is already low and any impacts from the recent cut have yet to really be felt in a housing market sense." Nicholas Gruen, Lateral Economics: "Because they are flying by the seat of their pants, and given the recent cut they won't want to do it again too soon." Lynne Jordan, Liberty: "There’s still no doubt another rate cut is on the cards. Completed construction levels dropped sharply in the last quarter, jobs and unemployment are showing no improvement since March and wage growth is expected to remain subdued for some time. However, rumours of a rate hike in the US are expected to apply downward pressure on the Australian dollar, meaning the Reserve Bank’s timeline for an additional rate cut could be pushed back to early next year. The urgency of any rate cut will no doubt take into consideration the impact of Government efforts to return the economy to benchmark GDP growth whilst also fighting deflation. As we’ve seen in overseas markets, in particular Japan, Europe and the US, monetary stimulus hasn’t produced the desired result. That suggests not only is the RBA going to have to push interest rates to even lower record levels, but there will be an increasing need for the government to use other measures such as fiscal stimulation if they are going to succeed in their objectives." Grant Harrod, LJ Hooker: "Concerns another decrease could drive house prices up further." Stephen Koukoulas, Market Economics: "RBA maintains a hint of optimism about the outlook - no need, at this stage, for more monetary policy stimulus." Michael Yardney, Metropole Property Strategists: "Having cut rates last month the RBA will now wait and see the effect of these cuts. The strong property markets, especially in Sydney and Melbourne, are likely to make the RBA wary of further cuts at present." Mark Crosby, Monash Business School: "With the Fed [Federal Reserve] considering raising there is no reason for the RBA to cut given recent cuts to the cash rate haven't had time to feed through to inflation." Emily Dabbs, Moody's Analytics: "Weak inflation data prompted easing earlier in the year, and the central bank will likely wait until the next data point before easing policy further." Jessica Darnbrough, Mortgage Choice: "Given that the Reserve Bank cut the cash rate last month, I think they will take a wait and see approach in September. The RBA will be keen to see what impact last month's rate cut will have on the property market as well as the broader economy before making any further adjustments to the current monetary policy setting." Saul Eslake, Economist: "RBA cut the cash rate at its last meeting, and will want time to evaluate the effects of that move before considering any further change - in the absence of any significant change in the economic environment." Alan Oster, NAB: "It’s too early to see results of last month's cut." Jonathan Chancellor, Property Observer: "Often the RBA cut in quick succession but not this time as with rates at such lows they are unlikely to have the desired outcome. They must be worried too about the Sydney property market resurgence." Matthew Peter, QIC: "Having cut in August, the RBA will await further data on growth and inflation and for signals from the US Fed on their next rate hike, before considering whether to end the current easing cycle." Noel Whittaker, QUT: "It’s too soon to change after last month." Angus Raine, Raine &amp; Horne: "The time of year will most probably drop before Christmas." Christine Williams, Smarter Property Investing: "In my opinion the rate will stay on hold due to last month's decrease together with the decrease of unemployment rate and coming into spring where historically the unemployment rate continues to reduce with seasonal employment in the retail, food and construction industries." Janu Chan, St.George Bank: "The RBA will take their time in assessing the impact of recent rate cuts in August and May." Steven Milch, Suncorp: "No pressing case for a move so soon after the August cut." Brian Parker, Sunsuper: "No material change in the RBAs growth or inflation outlook since last time, and current level of rates isn't holding anyone back!" Scott Haslem, UBS: "We believe now accommodative policy at a 1.5 percent percent cash rate, firm growth data, a likely trend lower in the AUD and concern about financial stability will see the RBA on-hold at 1.5 percent for the foreseeable future. While inflation will remain low, core inflation is likely to drift modestly higher from here." Nicki Hutley, Urbis: "Data is showing growth and employment remain moderately healthy. RBA [will be] reluctant to cut further so will wait for next CPI number to see if there is cause to cut again."</body></html>

jonathanchancellor-7SQnKwU6yx

Rate change unlikely, home loan sizes to soar

<html><body>
GUEST OBSERVER
Retail sales disappointed in July coming in flat vs expectations of a 0.3 percent gain. Annual growth slowed to 2.7 percent with the monthly trend estimate tracking a very weak 1.1 percent annualised pace.
There are some caveats to the July number however. In particular, the storetype breakdown showed an unusually large fall in department store sales – down 6.2 percent in the month in seasonally adjusted terms, coming off a decent 4.5 percent gain in June.
That volatility may reflect shifts in the timing of sales which can be exaggerated by seasonal adjustment (we had similar issues in 2013 and 2012 with a strong June followed by a sharp fall in July that mostly reversed in August).
Weather conditions may also have played a part with an abnormally mild July (the 5th warmest on records back to 1961 according to the Bureau of Meteorology) although this did not stop clothing retailers from posting a 0.3 percent gain.
Ex department stores, retail sales were up a much more respectable 0.4 percent mth, 3.1 percent yr.
Looking across other categories: basic food retail bounced back with a 0.7 percent gain following a very weak June (–0.5 percent mth, the second biggest monthly decline in the last six years); household goods disappointed again with a 0.7 percent fall, ‘other’ retail rose 0.2 percent and cafes and restaurants saw a robust 1.2 percent gain.
As noted in previous reports, some of the ‘mixed messages’ from retail at the moment likely reflect widely diverging performances by state with consumers in the growth centres in the south-east boosting discretionary spend but those in mining states cutting back.
For total sales this pattern reversed somewhat in July with sales softer in Vic (–0.6 percent mth) and NSW (–0.2 percent mth) vs modest gains in Qld (0.5 percent mth) SA (0.5 percent mth) and WA (0.3 percent mth).
Note that all sales figures are in dollar value terms so include any price effects from discounting.
Matthew Hassan is senior economist with <a href="https://www.westpac.com.au/" target="_blank">Westpac</a>.
</body></html>

jchancellor-FAypfDUnLy

Australian July retail sales flat: Westpac's Matthew Hassan

<html><body><div class="page" title="Page 1">
<div class="layoutArea">
<div class="column">
A poor understanding of finance maybe costing homebuyers as they fail to spot hidden fees and charges on their home loans accoding to a survey commissioned by financial services provider CUA.
More than 1,000 Australians aged from 25-49 were surveyed in the CUA National Mortgage Survey during July, with half of the survey respondents currently holding a mortgage. 
<a href="/images/2016/09/02/Screen%20Shot%202016-09-02%20at%2010.32.17%20AM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/09/02/Screen%20Shot%202016-09-02%20at%2010.32.17%20AM.png" alt="">
The survey revealed that 43 per cent of people misunderstood what was meant by a comparison rate and a further 28 percent admitted they didn’t know what was meant by a comparison rate.
It also found 33 percent of non-mortgage holders did not think they could ever afford to buy a property and 39 percent of respondents feared they would be priced out of the market unless property prices stay the same or decrease.
Andy Rigg, CUA chief operating officer, member services, said property buyers need to be careful that what looks like a very low rate doesn’t actually have lots of nasty hidden fees and charges.
“Comparison rates are useful in helping property owners choose the most suitable rate for existing and new home owners by looking behind the headline interest rate to also factor in fees and charges,” he said.
"It is a concern that fewer than one in three Australians (29 percent) understood what was meant by a home loan “comparison rate”. Lenders are required to disclose the comparison rate so home owners can compare lenders on an even playing field by seeing what the actual cost of their loan will be, including fees, rather than just the annual percentage rate.
"It’s also clear that many home owners are still watching and waiting to see if rates fall to even lower levels, before deciding whether to switch from a variable to fixed-rate loan.”
 
</div>
</div>
</div></body></html>

Poor understanding of finance maybe costing homebuyers: CUA 

<html><body>
Westpac, in a memo sent to mortgage brokers, has announced it was introducing a new Flexi First Option Home Loan and Flexi First Investment Property Loan offer for a limited time, to replace the existing Flexi First offers in market.
New principal-and-interest owner-occupied loan applications will receive an 89 basis point introductory discount for the first three years of the loan.
This would revert to a 45 basis point discount for the remaining loan term.
New principal-and-interest investment loan applications will receive a 96 basis point introductory discount for the first three years of the loan.
This would revert to a 52 basis point discount for the remaining loan term.
Westpac’s new Flexi First Option discounts came into effect Tuesday 23 August, the Australian Broker website advised.
</body></html>

Westpac offers 89 basis point introductory home loan discount

<html><body>
Australia’s biggest home loan lender, Commonwealth Bank, has scaled back the discounts offered on new home loans.
The Australian Broker website says it did so as it faces increased funding pressures.
The website obtained a memo sent to the broking industry in which the major lender announced it will be reducing discounts by up to 15 basis points on new Mortgage Advantage Packaged Owner Occupied and Investment Home Loan applications.
The bank advised it was not raising or decreasing its headline rates.
The changes only related to a reduction in discounts on a select number of variable rate home and investment home loan products.
The discounts were also being reduced by 8 basis points on its Three-Year Special Rate Saver, Extra Life of Loan and Extra Introductory Rate products for new owner occupied and investment home loan applications. 
The reduced discount rates apply to new home loan applications for these products from 26 August 2016.
</body></html>

CommBank cuts is discount mortgage offerings

<html><body>
<img src="https://counter.theconversation.edu.au/content/64265/count.gif" alt="The Conversation" width="1" height="1">
GUEST OBSERVER
In the revolving door of economic ideas, the old can be suddenly new again. Independent Senator Nick Xenophon resurrected one such idea this week.
He said the Reserve Bank of Australia should replace its inflation target of 2-3 percent per annum with a target of nominal GDP growth of around 5.5 percent per annum.
This is more than just an armchair economics debate – it could seriously affect all households and businesses in Australia.
First, a short primer. The RBA determines the general level of interest rates that we all pay on loans and earn on deposits. It has no legislative power to directly set rates, but it might as well have because its indirect control is so precise via other legislative requirements on banks.
The RBA’s aim is to restrict inflation – the average rate of increase in prices – to a band between 2 and 3 percent over a period of years between economic booms and downturns. Why 2-3 percent? Because too much inflation is bad, and so is too little inflation. 2-3 percent is the sweet spot.
A higher rate of inflation (remember it’s an average) means some prices are going up more than others creating uncertainty about future costs and selling prices, which discourages investment expenditure. Higher inflation also encourages speculative investments in housing and other assets, which can create speculative bubbles. And as we know, bubbles can burst.
Inflation that is too low, say 0-1 percent, means some businesses are selling at prices that are stagnant or falling, but their debts are not falling. That leads to difficulty in meeting debt repayments. So if the RBA thinks inflation is heading up beyond its target, it will raise interest rates to stop households and businesses borrowing and spending, which reduces pressure on prices. If it thinks inflation is too low it will cut rates to encourage us all to borrow and spend.
Now back to Xenophon’s idea. He, and some respected economistsbefore him, think inflation is the wrong target. What if, they argue, inflation is going up only because energy prices are going up? High energy prices can’t be good news for businesses and households. So why would the RBA want to make life even harder by raising interest rates to lower inflation? Madness they say. Better to target the sum of the inflation rate plus the growth in national output of goods and services (GDP), what is called nominal GDP growth.
So if inflation is going up but output is going down because of the depressing effect of high energy prices, nominal GDP would be flat and the RBA would do nothing, neither contracting nor expanding nominal GDP growth – the right policy.
Economists are split on this and have been for years. In August 2011 The Economist newspaper decided it was a good idea, and then three months later published an article against the idea. This is not unusual in economic debates incidentally – many economic “principles” are in fact contested, as is the case for most social sciences.
One big problem with Xenophon’s idea is that the theory does not fit the times. It is not the right policy for today.
Energy prices are not going up; they have been falling and are now flat. Yes, electricity prices have been going through the roof in South Australia and to a lesser extent elsewhere. But oil prices have been falling or flat over recent years, and this has a more pervasive effect than government bungling of the electricity market.
So output growth and inflation are not moving in opposite directions – both have fallen in recent years. Inflation is now below the bottom of the RBA’s target zone of 2-3 percent on any of the alternative measures.
The RBA, along with most central banks of advanced countries, would actually like to see more inflation, not less. Annual output growth is struggling to reach 3 percent, which is below the long run average of 3.5 percent. Hence nominal GDP growth is below the 5.5 percent long-run average that Xenophon would target. So whether the RBA targets inflation or nominal GDP growth doesn’t matter – the policy would be the same – that is, stimulate spending by lowering interest rates, which is exactly what it has been doing.
Another downside is that although nominal GDP growth would be more stable, inflation would tend to be more volatile. Inflation could jump up and down, but as long as output growth moved in the opposite direction the RBA would do nothing to dampen the volatility in inflation. Volatile inflation increases the uncertainty about future prices, which inhibits investment spending by firms and households.
A bigger problem with the RBA’s inflation target that would not be resolved by adopting a nominal GDP target, is that the inflation target only refers to prices of goods and services – it ignores asset price inflation. The rapid rise in house prices in Sydney and Melbourne in recent years is a potentially serious problem that has been essentially ignored by the RBA. A better idea than nominal GDP targeting would be to include asset prices as well as the prices of goods and services in its inflation target.
And finally, if a nominal GDP target is such a good idea, then why is no country doing it? It is within the charter of most central banks to target nominal GDP growth instead of inflation, but none are, at least not formally.
Many central banks look at wider economic conditions as well as inflation. They will temporarily tolerate higher inflation when output growth, but the inflation rate remains their primary target. This flexibility seems reasonable, keeping inflation as the primary target. We would be the first to experiment with a strict nominal GDP target. Do we really want our Reserve Bank to be the world’s guinea pig?
Ross Guest is professor of Economics and National Senior Teaching Fellow, Griffith University and author for The Conversation. He can be contacted <a href="https://theconversation.com/profiles/ross-guest-13155" target="_blank">here</a>.
</body></html>

Why some economists think the RBA should drop its inflation target

<html><body>
<div class="x_WordSection1">
 GUEST OBSERVER
<a name="x_OLE_LINK5" target="_blank" href=""></a>Employment rose by 26,200 in July after rising by 10,800 people in June (previously reported as a rise in jobs of 7,900).
Full-time jobs fell by 45,400 while part-time jobs rose by 71,600. Economists had tipped a 10,000 increase in jobs.
Hours worked rose by 0.2 percent in July. Hours worked are up by 1.1 percent on the year.
Jobless rate: The unemployment rate fell from 5.8 percent to 5.7 percent in July. To two decimal points the jobless rate fell from 5.77 percent to 5.72 percent (lowest rate recorded in almost three years). The trend unemployment rate was steady at 5.7 percent (hasn’t been lower in three years). The participation rate was steady at 64.9 percent.
Unemployment across states in July: NSW 5.2 percent (June 5.3 percent); Victoria 5.9 percent (5.7 percent); Queensland 6.1 percent (6.4 percent); South Australia 6.4 percent (7.0 percent); Western Australia 6.3 percent (5.7 percent); Tasmania 6.2 percent (6.6 percent). In trend terms unemployment in the Northern Territory fell from 3.7 percent to 3.5 percent; ACT unemployment fell from 3.7 percent to 3.6 percent.
A raft of companies is affected by the employment data but especially those dependent on consumer spending. Amongst stocks affected are Fairfax, West Australian Newspapers, Seek Limited, McMillan Shakespeare and Skilled Group.
</div>
<div class="x_WordSection2">
What does it all mean?
The headline employment result was certainly encouraging. Over 26,000 new jobs were created in July and the unemployment rate fell to a three-year low of 5.7 per cent. However the breakup of the figures, suggests the labour market has been largely marking time over the last few months, influenced by election uncertainty. Hours worked lifted in July, however it has fallen for six out of the past nine months. 
Given the month to month volatility it is better to look at the longer term results. And in that regard, employment has totalled almost 72,000 new jobs in the first seven months of 2016, compared with over 150,000 in the same period last year. And the results are markedly more polarising when you compare the growth in full-time jobs. 
Full-time jobs growth has gone backward by almost 65,000 so far in 2016 compared with jobs growth of almost 90,000 in the same period last year. It is clear that a slowdown in hiring has taken place – a result that has also seemingly shown up in the more sedate growth in the job ads series earlier this year. 
The softer results across the labour market mirror other indicators across the economy, including retail sales. It’s pretty clear that the sluggish first half of 2016 resulted in employers managing their major cost base (employees) more carefully.
Importantly the election would have played a significant part in the pullback in hiring momentum over the first half of the year. And you could easily argue that the employment results are backward looking. Highlighting the economic environment 4-5 months ago.
The hope would be that now the election is out of the way consumers and businesses will go back to spending, investing and hiring - particularly given the ultra-low interest rates on offer and significant improvements in the household budget.
The Reserve Bank is likely to look through the latest result and wait on timelier forward looking data. Recent Reserve Bank commentary suggests policymakers are relatively optimistic about Australia’s medium-term growth prospects. Over the next few months the Reserve Bank would be looking at the impact of the last couple of rate cuts. Further rate cuts are more dependent on inflation outcomes, and from that regard CommSec expects another interest rate cut in November.
Savanth Sebastian is an economist for <a href="https://www.commsec.com.au/" target="_blank">CommSec</a>
 
</div>
</body></html>

November rate cut still on despite unemployment to a 3-year low: CommSec's Savanth Sebastian

<html><body><div class="cq-article-content-paras section">
The Reserve Bank of Australia is losing credibility every time it cuts and claims the world's dearest residential property prices are nothing to worry about, according to the Australian Financial Review columnist Chris Joye. 
Joye noted the alleged that "the likelihood of lower interest rates exacerbating risks in the housing market has diminished".
Yet auction clearance rates in our two largest cities, Sydney and Melbourne, which account for 47 per cent of the metro population, are back to boom-time levels, he noted.
Joye suggests while the RBA argues that much lower sales volumes in 2016 signal weakness, "this is likely more a reflection of a four-year boom exhausting supply."
He says after the numerous occasions since the RBA began cutting rates in earnest in 2012, the RBA has assured the community that excessively cheap money would not drive dangerous house price growth that undermines affordability or financial stability.
"The ensuing data have proven these predictions to be bogus," he suggested.
Since January 2013, home values across Australia's eight capital cities have risen at an annual pace of 8.8 per cent, multiples annual growth in wages (2 per cent) and core inflation (2 per cent). 
Joye noted, according to UBS, Australia's dwelling price-to-income multiple hit an historic high of 5.6 times in September 2015 and inflated to an unprecedented 5.7 times in June 2016.
"The reason the RBA has got the Aussie housing market so wrong so often is likely related to two facts.
"First, it has never dealt with an economy that is carrying this much debt, and hence interest elasticity, before.
"And, second, it has never dropped the cash rate this low, and would never have conceived of doing so when economic growth was running above trend and house prices were rapidly scaling record heights."
</div></body></html>

Chris Joye on bogus RBA claims that there's not dangerous house price growth

<html><body>
The Reserve Bank governor Glenn Stevens is confident Australia’s banks would survive a large fall in house prices.
Mr Stevens told the The Australian and The Wall Street Journal that whether a property price fall was damaging depended on how much debt was behind it.
“You care, of course, whether asset prices seem divorced from their fundamentals. That’s often in the eye of the beholder,’’ he said.
“But the thing you most care about is, ‘is there a lot of borrowed money behind the assets’. “(With) housing, the debt being carried there is pretty significant now, but I don’t think we’re seeing another massive step up in leverage at the moment, and, as you know, we’ve been watching that fairly carefully. Every attempt to stress-test housing portfolios that I’m aware of ... none of those show a very bad outcome for the system.
“Now, some losses get incurred, but by and large the system manages with that OK.
“We wouldn’t have major institutions getting even close to failure. Not even close.
“They’d wear some losses and they’d have to, again, strengthen balance sheets at some point, but you wouldn’t have a systemic event,’’ he said. “Whatever you thought the risks posed to financial stability and macroeconomic stability might’ve been from the housing sector a year ago, they’ve probably diminished a bit since then,’’ Mr Stevens said.
 
</body></html>

Latest Finance Insights

NAB bring forward first RBA cut to February 2025

Editor's Picks

Developments

New apartments

New townhouses

News

Latest Finance Insights

NAB bring forward first RBA cut to February 2025

Editor's Picks

Receive the latest news stories to your inbox

Developments

New apartments

New townhouses

News