Abadeen has released the whole-floor penthouse crowning its recently completed <a href="https://www.apartments.com.au/buildings/park-residences-cremorne-2-sutherland-street-cremorne-nsw-2090">Park Residences</a> development in Cremorne, bringing the near-300 sqm residence to market for the first time.

Occupying the entire top floor of the boutique Lower North Shore development, the penthouse includes 221 sqm of internal living and a 74 sqm wraparound terrace, with a prized north-facing aspect taking in views across Middle Harbour.

The residence has been completed and fully furnished following a collaboration between Abadeen Executive Chairman Justin Brown and internationally recognised interior designer Jack Freeman, Founder and Managing Director of FREEMAN &amp; CO.

<a href="https://www.apartments.com.au/developers/abadeen">Abadeen</a> and Freeman approached the penthouse as a finished home, sourcing furniture, artwork, lighting and objects from Australia and overseas.

[smartcode_project:default project_id=114246 project_image_fid=378718]

Pieces from Parisian design house Pierre Augustin Rose sit alongside contemporary artworks and bespoke lighting, with Freeman drawing on recent visits to PAD Paris and Salone del Mobile Milano for the final collection.

Brown said the aim was to create a penthouse that felt more like a large-scale private home than a traditional apartment.

"The experience begins the moment the lift doors open. You're welcomed into an elegant dining room before the home opens into an extraordinary living space framed by sun-drenched harbour views.

"Every time someone walks through the front door they pause. It's not just the view, it's the incredible sense of space, the warmth created by the northern sunlight that fills the interiors, and the way every room connects so effortlessly.

"It has all the proportions of a luxury home, while delivering the effortless lifestyle and personalised experience of living in a world-class six-star hotel, combined with the simplicity and convenience of apartment living."

[smartcode_project:default project_id=114246 project_image_fid=378713]

A secure lift provides exclusive access to the penthouse level, opening to a dedicated arrival foyer and dining area before the residence expands into its main living and entertaining spaces.

Floor-to-ceiling glazing runs across the northern side of the home, connecting the interiors with the terrace and Middle Harbour outlook.

The penthouse also features a fireplace and substantial chef's kitchen, while the wraparound terrace has been designed to accommodate both everyday outdoor living and larger-scale entertaining.

[smartcode_project:default project_id=114246 project_image_fid=378720]

Freeman said the interiors had been deliberately kept restrained to complement the scale, natural light and outlook already established by the architecture.

"The penthouse is a serene study in quiet luxury," Freeman said.

"The interior pairs soft, sculptural forms with warm timber, pale stone and a restrained neutral palette. Curated artwork and metallic accents add depth, while abundant natural light creates a calm, effortlessly refined atmosphere. In my world, less is always more."

Freeman said the approach was centred around collecting individual pieces rather than simply decorating the apartment.

"Every material, every object and every piece of furniture has been curated with intention. I am a true believer in collecting versus decorating.

"The architecture already provided extraordinary natural light, remarkable volume and an uninterrupted connection to Middle Harbour. Our role was to complement those qualities with unique one-of-a-kind pieces of fine art and collectible design sourced from recent travels around the world."

[smartcode_project:default project_id=114246 project_image_fid=378694]

Among the collection are solid bronze sculptures by Lorenzo Quinn, alongside a curated crystalware collection and pieces sourced from international design fairs.

Park Residences sits opposite Cammeray Golf Club, Cammeray Croquet Club and Grand Slam Tennis Cammeray, around 300 metres from Neutral Bay Village and its established collection of restaurants, cafés and retail.

Brown said the combination of a whole-floor floorplan, northern aspect and proximity to Neutral Bay was becoming increasingly difficult to find on the Lower North Shore.

"Completed whole-floor penthouses with a sun-drenched north-facing aspect and sweeping Middle Harbour views are exceptionally rare," Brown said.

"Add a quiet position opposite golf, croquet and tennis facilities, a level walk to Neutral Bay Village and only minutes to the CBD, and you have a lifestyle that's incredibly difficult to replicate.

"This is a home that offers the privacy and generosity of a luxury residence together with the convenience of one of Sydney's best-connected harbourside locations."

The penthouse will be exclusively marketed by SRM Residential.

[smartcode_project_cta:default project_id=114246]

Joel Robinson

Abadeen unveils penthouse at Park Residences in Cremorne

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

Dalcott targets owner-occupiers with South Brisbane debut Marrone

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

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

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

ODUS releases $18 million penthouse crowning La Mer Main Beach

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

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

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."

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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

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Australians have forked out an estimated $47.6 billion in ‘lazy tax’ over the past 10 years by keeping their mortgage with the Big Four banks rather than switching to one of the lowest rates in the market. 
That’s an estimated $14,215 for a borrower with the typical $300,000 mortgage, or $23,692 for borrowers with a $500,000 loan.
Sally Tindall, money editor at <a href="https://www.ratecity.com.au/home-loans" target="_blank">RateCity.com.au</a>, said borrowers shouldn’t set and forget about their home loans.
“Australians, traditionally, haven’t been big switchers but when they do, they are saving thousands of dollars,” she said. 
“It’s not difficult to find an interest rate starting with a three, and it’s not uncommon to find rates starting with five, so the variation between rates is huge in dollar terms.
“People need to start thinking about the rate they are paying and factoring that into their bottom line when they take out a loan.”
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jchancellor-FAypfDUnLy

Switching makes dollars and sense: Ratecity

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The number of prime Australian housing loans in arrears has risen for the fifth consecutive month, figures according to the Standard &amp; Poor’s Performance Index (SPIN) show.
Not by much as 1.13 percent of prime residential mortgage-backed securities (RMBS) were in arrears during March – up from 1.11 percent in February.
“While a decline in outstanding loan balances during the month would have affected this movement, the dollar value of loans in arrears increased, resulting in prime arrears being up overall,” S&amp;P noted.
The proportion of full-doc loans rose to 1.09 per ent in March from 1.07 percent a month earlier.
According to S&amp;P, the SPIN for low-documentation loans meanwhile fell 14 basis points in March to 4.41 percent, with part of the decline reflecting a rise of around 2 percent in outstanding loan balances,” the agency said.
“Low-doc loans represent around 1.3 percent of total loans outstanding that underlie prime RMBS transactions – down from a peak of 13.2 percent in January 2008.”
Regional banks experienced the largest decline in arrears of all loan originator types – down 13 basis points to 2.02 percent – while the major banks’ SPIN rose 7 basis points to 1.01 percent.
Arrears remain below their decade-long average of 1.25 percent, S&amp;P advised.
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jonathanchancellor-7SQnKwU6yx

Mortgage arrears continue slight upward trend

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GUEST OBSERVER
Having cut its cash rate by 25bp last month, in response to the very low Q1 CPI print, we see the RBA on hold this month.
Although inflation is below the 2-3 percent target, strong local growth is expected to gradually lift inflation back to target over time 
Our central case is for a further 25bp cut in August; however, the RBA will have a keen eye on the Fed, as a further large fall in the AUD could obviate the need for another cut 
The Fed and the AUD 
The key local development over the past month has been the upside surprise to Q1 GDP, which grew by a stronger-than-expected 3.1 percent y-o-y. However, most of the surprise was to exports, with growth in domestic demand remaining only modest and local income growth quite weak. 
In short, although the RBA could consider revising up its growth forecasts as a result of the Q1 GDP print, the composition of the growth means that the outlook for low inflation is likely to remain unchanged. 
However, we do think that the stronger GDP combined with the signs of continued modest improvement in the labour market are likely to keep the RBA from considering a cut in June or July. Indeed, given that the driving factor for the 3 May 25bp cut was the surprisingly weak Q1 CPI print, and that the meeting’s minutes revealed that the RBA board was hesitant about that cut, we think the RBA will need to see the Q2 CPI before it would consider a further cut. 
Our central case is for the RBA to cut its cash rate by a further 25bp to 1.50 percent in August, following the Q2 CPI print (we expect the trimmed mean to be around 0.4-0.5% q-o-q), and for the central bank to hold steady at 1.50% over subsequent quarters.
 However, as always, there are risks to this forecast. A key factor in play at the moment is the Federal Reserve. An improving US economy and more hawkish commentary from Fed officials mean that the market is now pricing in a 55 percent likelihood of a Fed hike by July (HSBC’s economists expect a 25bp Fed hike in September). 
A key result of the more hawkish Fed has been a depreciation of the AUD, which has fallen from USD0.78 in mid-April to around USD0.72 recently. At same time, commodity prices have held up, particularly supported by higher iron ore prices. 
If the Fed does lift its policy rate in coming months and this pushed the AUD lower, it could discourage the RBA from cutting. In addition, local housing prices are, once again, rising, which could make the RBA more reluctant to cut further. We see the RBA on hold in June and July, and have a cut pencilled in for August, after the Q2 CPI. However, the risk to this view is that the RBA delivers less, not more, in our view.
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The June meeting is likely to be uneventful
The key development since the RBA’s last meeting has been the upside surprise to the Q1 GDP numbers. GDP rose by a stronger-than-expected 1.1 percent in the first quarter and was 3.1 percent higher y-o-y (Chart 1). However, the upside surprise mainly came from exports, while domestic demand and local income growth remained too weak to lift inflation. The consumption deflator – which is the measure of consumer price inflation in the GDP numbers – was particularly weak, falling -0.1 percent q-o-q and up only 1.2 percent y-o-y. This helps to explain why underlying inflation fell to a more than two-decade low in the first quarter, despite the strong GDP growth.
The range of other domestic indicators has generally shown solid growth. Building approvals were stronger than expected, prolonging the housing construction boom, and the retail numbers for April were solid (3.6 percent y-o-y). Jobs growth was as expected in April (2.1 percent y-o-y) and the unemployment rate was steady at 5.7 percent. Our labour market index, which aggregates a collection of timely jobs market indicators, suggests continued modest improvement in labour market conditions (Chart 2).
In sum, although inflation is too low, and the case could be made for a further cut, an immediate cut seems unlikely. Keep in mind that the RBA has a ‘flexible’ inflation-targeting regime, which allows the CPI to be outside the band for periods of time, without requiring an immediate response. The RBA’s own forecasts have underlying inflation remaining below the bottom edge of the target band until mid-2018 (Chart 3). The key question the RBA will now be asking, month-to-month, is whether developments over the past month make it more or less likely that inflation heads back to target over that time horizon.
In this document HSBC may comment on the potential economic impact dependent on the outcome of the UK Referendum. HSBC is not taking a political position and this document and the information contained herein are not intended to promote or procure, or otherwise be in connection with promoting or procuring, a particular outcome in relation to the question asked in the UK Referendum.
 
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What the Fed could mean for the RBA
A key development that could affect the local inflation outlook and the RBA’s willingness to cut further is the recent shift in policy rate expectations of the Federal Reserve. The main channel through which this impacts the RBA is the effect it could have on the AUD.
The AUD has already fallen from a peak of USD0.78 in mid-April to around USD0.72 recently (Chart 4). At same time, commodity prices have held up, particularly supported by higher iron ore prices, which has driven the commodity price index to an seven-month high in AUD terms. The fall in the AUD should help to support growth, particularly as growth is being more driven by services exports, which are exchange-rate sensitive. The lower AUD should also help to lift inflation.
Watching what the Federal Reserve does in coming months has a bearing on the RBA’s outlook largely through its likely effect on the AUD.
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<a href="https://www.about.hsbc.com.au/hsbc-in-australia/management-team" target="_blank">PAUL BLOXHAM</a> IS CHIEF ECONOMIST (AUSTRALIA AND NEW ZEALAND) FOR HSBC. 
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RBA on hold, with a keen eye on the Fed: HSBC's Paul Bloxham

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Last month’s surprise cash rate cut is unlikely to be the last for 2016, according to finder.com.au, one of Australia’s biggest comparison websites. 
While all 31 experts (100 percent) in the <a href="https://finder.us9.list-manage.com/track/click?u=cc5e9bce699fa1d71a67cf499&amp;id=7dc80c0687&amp;e=58cd8ffd03" target="_blank">finder.com.au Reserve Bank Survey</a> are forecasting the cash rate will hold at the new historic low of 1.75 percent at the Reserve Bank board meeting tomorrow (7 June 2016), 68 percent (21/31) predict there’s a further cut on the way this year 
Most of these experts (14/31 or 45 percent) are tipping August as the month most likely for a rate cut. Three experts (10 percent) are forecasting September for a rate drop, while four experts (13 percent) think we’ll have to wait until November.  
As for how low the cash rate may drop this cycle, the majority (60 percent) of experts are forecasting it will fall to 1.50 percent, while 12 percent believe there’s scope for the cash rate to cut to even lower than this. 
Bessie Hassan, Money Expert at <a href="https://finder.us9.list-manage2.com/track/click?u=cc5e9bce699fa1d71a67cf499&amp;id=8be71cac36&amp;e=58cd8ffd03" target="_blank">finder.com.au</a>, says it’s now more important than ever for first home buyers to do their research before entering the market.
“Despite an attractive low rate market, one-third (33 percent) of experts thought that the market pre-GFC was more suitable for first home buyers. Just 10 percent believed the current combination of economic factors in Australia (low interest rates and fluctuating house prices) makes this the best market for first home buyers since the GFC,” says Ms Hassan.
Reasons cited include deteriorating affordability and lack of government stimulus. 
“State governments have different levels of support for first home buyers. Check your state government website to ensure that you’re aware of any grants or concessions that are available to you.”
For example, under the New South Wales First Home - New Home scheme, eligible first home buyers are exempt from transfer duty on new homes valued up to $550,000, while those residing within Tasmania and the Northern Territory do not have any duty concessions available to them.
First home buyers also need to be careful when considering their home loan options, Ms Hassan says. 
“While the cash rate is at a historic low, don’t be enticed by a low advertised rate alone. Make sure you look at the comparison rate on offer, as this is a better reflection of the cost of the loan.  
“Also factor in the features and flexibility of the loan and think about your current and future lifestyle and how these may be impacted financially. For example, if you’re thinking of having children or if you don’t have job security, you may opt for a fixed rate loan for greater peace of mind.  
“There are some fantastic deals out there – for both variable and fixed loans – but you’ve got to make sure you do the groundwork to reap the benefits of a low rate environment.”
Keep in mind, however, that low rates won’t hang around forever, she says. “Two in five experts are predicting a recovery next year, saying a rate rise is in the pipeline beyond 2016.”  
When asked about recent warnings that Australian property market prices could rise by 10 percent by 2020, 35 percent of experts agreed with this prediction. Thirty percent of experts are forecasting a rise of 5 percent by 2020, while 25% predict no change or a drop in house prices between now and then. 
What our experts had to say in the June Reserve Bank Survey: 
Shane Oliver, AMP Capital: "While I expect the RBA to cut the cash rate again this year, not enough will have happened to bring on another move by the June meeting." 
Peter Munckton, Bank of Queensland: "We have had no new information to change RBA's view that 1.75% is the right rate."
Richard Robinson, BIS Shrapnel: "The last cut successfully engineered a fall in the dollar, which the RBA desired. Although inflation is low, deflation is unlikely (oil prices have already risen sharply since January), and the economic growth is sufficient to prevent a marked increase in the unemployment rate. Better to leave some rate cuts for later – when they might need them."
Chris Caton, BT Financial Group: "The Bank may cut again but it is not in a hurry."
Dr Andrew Wilson, Domain Group: "RBA to take a wait and see approach after last month’s cut with data remaining mixed. Inflation critical but bias remains solidly for another cut this year although a near-term rise in US rates may stay the RBA hand." 
Scott Morgan, Greater Bank: "The RBA will wait to see the impact of the most recent cuts. There is no recent economic data that would change the RBA's view." 
Mark Brimble, Griffith University: "While bias remains to easing, the RBA is likely to tread carefully and wait for the reaction to the previous month’s rate cut to emerge and further data in relation to confidence, inflation, lending and capital expenditure prior to easing again."
Mandeep Sodhi, HashChing: "RBA would want to wait till August 2016 to see the flow on effects from rate cut in May 2016. The July 2016 election results will also give some clear directions and would make sense to wait till August 2016. There are no compelling reasons for RBA to change the interest rate in immediate short term. This is a good time for existing homeowners to revisit the interest rate they are getting and negotiate a better rate from existing lender. Home owners do not need to wait for another rate cut in this competitive market where lenders including  big 4 banks are offering home loan interest rates below 4% p.a."
Jason Spencer, homely.com.au: "The Australian economy is looking stronger, global issues are dissipating and the Australian dollar is falling so rates should remain on hold on June 7." 
Shane Garrett, Housing Industry Association: "The RBA will take time to assess the consequences of its May rate cut as well as possible developments in inflation before moving on rates again." 
Paul Bloxham, HSBC: "They just cut last month and, in our view, will want to see the Q2 CPI print before considering a further move."
Michael Witts, ING Bank: "Given low inflation was the driver behind the May decision we would suggest that the RBA will look for further data on this front."
James Boyle, Liberty: "It’s hard to ignore the downgraded inflation forecasts the Board issued earlier in the month, although I still don’t see another cut coming until at least August. This is despite jobs growth and unemployment remaining modest, but steady, and wage growth continuing to slow. The Board will no doubt be monitoring the impacts of the last rate cut on the country’s stronger property markets. Auction clearance rates in Sydney performed strongly on back-to-back weekends in May, while Melbourne is seeing listing numbers similar to the same time as last year. First home buyers and investors are returning to the market with the promise of lower interest rates – and this is improving the outlook for the sector. At the same time Mr Stevens has expressed that there is a bit of flexibility in the RBA’s inflation target, so we’re likely to see the cash rate hold for a few months, despite inflation being low, to see if other improvements come about. Economic recovery abroad in the US and Europe is tipped to be slow and steady over the coming years and I don’t foresee Australia being any different.” 
Grant Harrod, LJ Hooker: "The RBA will now monitor the effect last month's rate cut has on the economy. Lending institutions continue to de-risk the housing market by raising rates to investors, and limiting borrowing by non-resident buyers. This is resulting in price growth moderating and also allows the RBA to cut rates further, later in the year, as needed."
Stephen Koukoulas, Market Economics: "Economy doing reasonably well – no need for further monetary policy stimulus."
John Caelli , ME: "Having just cut, the RBA will likely hold until August to assess CPI figures before cutting again to confirm their initial assessment. The RBA continue to target inflation within a 2 to 3 percent band over the longer term." 
Mark Crosby, Melbourne Business School: "Having just cut, and with the US likely to raise there is no compelling reason to cut despite low inflation numbers."
Effie Zahos, Money Magazine: "The next inflation report isn't due until July 27 so it could be a case of hold steady until August." 
Emily Dabbs, Moody's Analytics: "The central bank will likely wait to see if the May rate cut has bolstered domestic demand and put upward pressure on inflation. Further rate cuts are likely down the track." 
Jessica Darnbrough, Mortgage Choice: "There are a couple of reasons why the Reserve Bank may choose to leave the official cash rate on hold this month. In the first instance, unemployment remains low, sitting at 5.7%. Secondly, consumer sentiment has improved significantly over the last month - both of which are positive signs for the broader economy.”
Christopher Schade, MyState Bank: "There's no urgent need to deliver another cut to the Australian economy with the Australian dollar weaker, the economy going OK and May's cut requiring some time to work through the economy. It is more likely the RBA will take some time to see how the Australian economy and global conditions develop over the coming months before making any further changes to the cash rate."
Saul Eslake, Independent Economist and Financial Commentator: "They have responded to the lower-than-expected CPI, the currency has since fallen quite a lot, their other forecasts for economic growth and unemployment haven't changed, no need to lower rates again."
Alan Oster, NAB: "Too early to judge inflation and non mining outlook."
Jonathan Chancellor, Property Observer: "The last move is enough." 
Matthew Peter, QIC: "Having cut in May, the RBA will await the next read of inflation in July before deciding whether to cut another 25 basis points." 
Noel Whittaker, QUT: "[The RBA are] awaiting the outcome of last cut" 
Angus Raine, Raine &amp; Horne: "The RBA made a big call in dropping interest rates last month, and with the Federal Election on the horizon, I don't expect any movement this month." 
Nathan McMullen, RAMS: "Further assessment of impact of recent monetary easing required."
Janu Chan, St.George Bank: "The RBA will choose to wait a while after the decision to cut rates at its last meeting. "
Scott Pape, The Barefoot Investor: "The cuts are coming… just not this month."
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No rate cut at June RBA meeting

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GUEST OBSERVER
The proposed review of Mortgage Broker Remuneration Structures, suggested by the Finance systems Inquiry (FSI), posed some interesting questions, and as an experienced lender, Bluestone Mortgages would like to offer our perspective on some of the suggestions made. 
Our view is that the current remuneration system supports positive consumer outcomes, and that any change would, in the words of Gaden’s partner, Jon Denovan, be a “disservice” to the community. 
The reasons for our view are manifold. If the aim of the ASIC Review is to ensure quality consumer outcomes by assessing the impact of different remuneration structures, it is important to look carefully at the potential ramifications of any changes proposed. 
Having assessed the potential impact of alternative structures, we have come to the conclusion that any change to the current structure would negatively affect competition in the sector, due to their potential effect on consumer equity, access and the range of loan products available. 
A question of equity 
First, to equity. No discussion of the remuneration issue at hand is meaningful unless it is first understood that not all lenders, and not all consumers, are created equal. In fact, some lenders and some consumers are likely to be more affected by a move away from the current remuneration structure than others – and not in a positive way. 
We know that over 50 percent of consumers now choose to access home finance via mortgage brokers. Any move to charge a fee for service for brokers is likely to negatively affect consumers who choose non-bank lenders over the banks. 
Which brings us to the question of who these consumers really are? 
Often, they are individuals who, while entirely worthy of credit and able to service a loan, for one of many reasons – often outside their control – do not meet the prescriptive boundaries of traditional banks. Bluestone is one of a number of non-bank lenders which specialises in providing services to the many Australian consumers who find themselves in this category. 
A change in the current remuneration structure would mean that this group of consumers, as well as others who chose a mortgage broker, may be required to pay an upfront fee, whereas consumers (often so-called ‘ideal borrowers’) who choose to deal with the banks directly, would not. 
This is clearly not equitable. 
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A threat to access 
We then come to the interlinked issue of access. The monopoly of size, scale and market share of the big four and other traditional banks means they already have extensive proprietary distribution channels. Some of the banks have over a hundred years of traditional savings and loan infrastructure, and do not in any way see brokers as being essential to their business success, or even necessary. 
Non-bank operators, on the other hand, have shaped their businesses in an entirely different environment. Brokers have played a central role in their business growth, providing distribution services to the lenders and, the crucial other side of the coin, access to the growing group of customers who are no longer required to deal solely with one of a few major players, offering a relatively homogenous product range to a relatively homogenous pool of “ideal borrowers”. 
There’s no question in our mind that a change to current remuneration structures would put the use of brokers out of the financial reach of the vast majority of their target market. 
This would mean that a large and growing group of Australians would be denied access to one of the most fundamentally important financial transactions they are ever likely to make - buying a home. (And that’s without addressing the wider policy considerations around the role of home ownership in reducing the burden of caring for an ageing population into the future). 
Wider choice, more options, more competition 
Which brings us to the third – and also interlinked – part of our argument. And that is the fact that the current model actually promotes healthy and positive competition among lenders, which in turn leads to more options and greater choice for consumers. Which must surely be the kind of outcome the ASIC Review is trying to achieve. 
In fact, it’s clear that it is in fact thanks to the current broker remuneration model, and the free access it offers, that consumers are no longer limited in choice to the products and practices offered by the big four and other traditional banks. And clearly consumers are voting with their feet – more than half now access their home finance through a mortgage broker. 
In summary, from Bluestone’s lender perspective, the mortgage broker remuneration structure as it stands promotes not only consumer choice and competition, it also gives more consumers more access to more options than any alternative model. 
All of which lead to a much higher quality outcome for consumers than any alternatives posed to date. 
Royden D’Vaz is national head of sales &amp; distribution at Bluestone Mortgages and can be contacted <a href="https://www.bluestonemortgages.com.au" target="_blank">here</a>.
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ASIC review into broker commissions: a lender's perspective

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Aussie John Symond has said not to panic with the talk of apartment oversupply across Australia.
Speaking to 2GB broadcaster Ross Greenwood, Symond suggested that a purchase in the current market needs to be well thought out.
"I'm saying not to panic.
"If you were a buyer you're going to win out, in terms of if you're after an apartment to buy, but you're really going to have to do your homework," he said.
"Some areas will be impacted and prices will be softer, or lower in certain areas and not other areas.
'"My suggestion is don't buy until you do all your homework, seek independent advice then go and talk to a broker to make sure you get the right home loan," he added.
In reply to the restricted lending criteria which may see a 30 percent deposit required to buy an apartment in a block higher than six levels, he said it's been a long time coming.
"It's been a long time coming with the potential of oversupply of apartments.
"But we've got to remember it's (the oversupply) in different areas so you've got to be careful."
He said that there might be an opportunity to buy an apartment for a significant discount.
"You might get up to 20 percent under where values were a year ago.
"It's unfortunate if you're locked in and you've already paid the deposit, you're taking that risk, but if you're coming in looking for an investment or home to live in, you're going to be able to buy much much better than you would have a year ago."
He did have a warning for investors however.
"You've got to remember, if you're buying to rent, those are oversupplied areas you'll find it much more difficult to find a tenant and you've got to be prepared to have it empty for some time or take a substantial discount on the first year or two with the rent you'll get.
On comments made about the market doing well, Symond suggested that he thinks investors are probably spurred on a bit.
"Not just with the lower interest rates but the fear if Labor was to get in and hit existing properties on the head in terms of negative gearing going forward.
"Labor said that they will grandfathers those so you do have some people saying I better get in because i need to get the negative gearing to make the investment work for me," he said.
"So i think there's a combination of reasons why the market is still bubbling along quite healthily."
Symond also suggested that Harry Triguboff, who topped the rich list for 2016, has done an amazing job.
"I think Harry's in the great position where if he can't sell them he keeps them and rents them out." 
To listen to the interview in full <a href="https://www.2gb.com/article/john-symond-31-may-2016" target="_blank">click here.</a>
 
 
 
 
 
 
 
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John Symond suggests there's no need to panic in the current apartment oversupply

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The amount of money Australia’s homeowners owe their banks rose above $1 trillion for the first time in April.
The latest rise in the value of outstanding home loans since March was only a modest 0.5 percent, but the annual growth rate sits at a five-year high of 7.4 percent.
The total of owner-occupier housing debt held by Australian lenders rose to $1.005 trillion in April from $998.8 billion in March.
The seasonally adjusted figures from the Reserve Bank of Australia showed the value of homeowner debt is now eight times where it was two decades ago, at $124 billion in January 1995.
It doubled to $248 billion in 2001, then to just under $500 billion by 2006.
While home loans are still growing strongly, the latest data suggests lending to housing investors has slowed.
Investor housing loans totalled $551 million in April, a rise of 0.3 percent, the RBA figures showed.
The last time a smaller increase in investor loans was recorded was in May 2009.
Annual growth in investor housing loans has now slowed to 6.5 percent, from 10.9 percent a year ago.
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Our $1 trillion home lending debt

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GUEST OBSERVER
News of Macquarie Bank tightening its loan to value ratio (LVR) for apartment high-rises has sparked fears of an oversupply in certain markets.
The bank named 46 postcodes where high-rise apartment lending would shrink to 70 percent of the value of the property.
The problem in these postcodes – which are concentrated in inner Sydney, Melbourne and Brisbane – is not one of supply and demand, at least not in the sense that there are more apartments than there are people to live in them. Supply and demand in these markets is not a question of how many people need a place to live versus how many places there are to live. Rather it is how many owner-occupiers and investors demand assets.
The former conception of supply and demand ignores the tax and finance incentives that encourage people to hold more property than they need to live in. These incentives include cash-free equity deposits, negative gearing and capital gains concessions, which have been introduced one by one into the housing market over the last 30 years. It makes sense then, that our understanding of supply and demand in real estate should be dynamic. As long as there is an investor looking for a property to put their money in, there is demand. As long as there is an investor demanding property, a developer is willing to supply.
Professor Laurence Murphy of the University of Auckland notes that when the price of property begins to fall, developers become less willing to supply dwellings. Graph 1 and 2 compares high-rise approval data in Victoria and NSW (which we have to assume is a proxy for inner city unit development) with quarterly growth rates in their respective unit markets.
Graph 1: Quarterly Approval Figures Victoria vs. Melbourne Units Quarterly Growth Rates
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Source: Residex
Graph 2: Quarterly Approval Figures NSW vs. Sydney Units Quarterly Growth Rates
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Source: Residex
The graphs show that approvals are highly responsive to changes in unit growth rates.
As demand for units falls away due to tighter LVRs, slowed wage growth and higher premiums on foreign investment purchases<a href="https://www.blog.residex.com.au.tmp.anchor.net.au/2016/05/26/may-market-update/?utm_source=membersNewsletter&amp;utm_medium=email&amp;utm_campaign=Cid=ResiMay16&amp;mc_cid=d432d199da&amp;mc_eid=1c64ff30b3#footnote-1">[1]</a>, the first thing to crash will most likely be applications and construction of dwellings. This has wider economic implications, particularly for NSW and VIC, where construction has been a significant contributor to growth in gross state product.
The construction of units – whether in the application phase, construction phase or completion phase – moves in much larger fluctuations than the values of the units themselves. For example, in the September quarter of 2010, the number of approvals for units in blocks of four or more stories grew by 124% in NSW, yet nothing dramatic happened with Sydney unit value growth. Values grew steadily until 2013 when they began to grow at a higher rate. I am not saying that the supply of units to speculative investors is sustainable where population growth is low, nor is it optimal for the people living in them. However, it is clear that price movements and investor interest in units are a better indicator of expected supply movements than population growth rates.
The graphs also show the approval figures for other dwelling types over the past decade. Most strikingly, the number of high-rise units began outperforming detached housing approvals from March 2011. The salience of this phenomenon increased around the beginning of the 2013 housing boom.
Less important than the effect of supply on the value of a unit is the way units are supplied and how they are integrated with wider planning. Residential dwellings crowding out commercial and cultural facilities, which are partly what makes a city desirable in the first place, can limit a city’s desirability. A lack of diverse planning can also increase pressure on transport and road congestion. This is one of the many risks of investing in rapid high-rise growth areas, and has caused some young families and retirees to move to regional parts of the state.
Eliza Owen is housing market analyst for onthehouse.com.au and can be contacted <a href="https://www.onthehouse.com.au" target="_blank">here</a>.
 
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Oversupply fears rise as LVRs drop: Eliza Owen

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Home loan lender, ME, has announced a range of interest rate cuts across variable and fixed rate products.
It included introducing a variable rate below 4 percent for new owner occupier with a maximum LVR of 80 percent. The variable rate for new owner occupier loans has been discounted by 6 basis points to 3.95 percent. This is an 88 basis point discount off the reference rate for the life of the loan. The variable rate on its investment Flexible Home Loan with Member Package has been reduced by 9 basis points to 4.15 percent. This is a 68 basis point discount off the reference rate. The non-major has also cut its one and two-year fixed rates by 30 basis points on its Flexible Home Loan for owner occupiers to 3.99 percent.
The four and five-year fixed rates have been cut by 10 basis points to 4.49 percent. For investors, the Flexible Home Loan has been discounted by 20 basis points on its one and two-year fixed rates, to 4.09 percent, effective yesterday.
For more information, <a href="https://www.mebank.com.au" target="_blank">click here</a>.
Following the Reserve Bank of Australia’s decision to cut the cash rate in May, demand for variable rate mortgages has risen, according to Mortgage Choice’s latest national home loan approval data.
Variable rate home loans accounted for 76% of all loans written in May – up from 75% the month prior.   “After the Reserve Bank’s decision to cut the cash rate at its May Board meeting, three of the four majors passed on the full rate cut – trimming their variable rates by 25 basis points,” Mortgage Choice chief executive officer John Flavell said.   “With that in mind, it was hardly surprising to see a lift in demand for variable rate products this month. Borrowers are clearly looking to take advantage of the historically low rate environment.   “And, with many economists predicting at least one more rate cut this calendar year, I wouldn’t be surprised to see demand for variable rate products remaining strong for the foreseeable future.”   Across the country, demand for variable rate products was highest in Victoria, with this type of product accounting for 86% of all loans written in May.   Variable rate demand was lowest in New South Wales, with this type of product accounting for 71.47% of all loans written.
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ME drops variable home loan rate to below 4 percent

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<img src="https://counter.theconversation.edu.au/content/57114/count.gif" alt="The Conversation" width="1" height="1">
GUEST OBSERVER
The Australian Securities and Investments Commission (ASIC) inquiry into the way mortgage brokers are paid may uncover some isolated shady dealings but the system of remuneration for brokers is already regulated well enough by intense competition.
Assistant Treasurer Kelly O’Dwyer announced the inquiry last year in line with recommendations from the Financial System Inquiry and ASIC recently commenced the inquiry with a scoping paper. The focus is likely to be on whether the advice of brokers is in the best interests of the customers.
As always, there are questions about whether the remuneration incentives for brokers distort their advice. And, again as always, there are questions about whether the fact that big banks own some brokers leads these brokers to favour the products of their owners, and not necessarily to offer the products most appropriate to the customer.
In many ways, the inquiry is just part of the ongoing reviews of different parts of the finance sector. The same arguments are likely to be rehashed.
In announcing the review, ASIC Commissioner Peter Kell was clear that:
“We are focused on consumer protection issues in the context of personal credit products, ranging from small amount credit contracts through to home loans."
There has been some discussion in the press that loans organised by brokers default at a higher rate than loans written by banks. The Australian Prudential Regulation Authority (APRA) might regard this as a concern for financial stability, but ASIC will be concerned with whether people are getting loans they really should not be. The focus will clearly be on consumer outcomes.
It’s worth looking at the mortgage broking sector mainly because it has been growing rapidly and is now quite big. About half of all mortgages are provided through brokers, up from 40 percent a decade ago. The upfront commissions for brokers are about 0.5%, which yields annual revenue of close to A$2 billion.
So it is a big and rapidly growing financial sector and ASIC has duly been charged to have a look around for problems. Australia already has laws addressing any concerns. The National Consumer Protection Act has, since 2011, put the onus on providers to act in the best interests of customers. ASIC is really just checking up that the law is being complied with.
While there may be some bad behaviour, it is hard to see what the concern is. People have a choice.
They can go to their own financial institution and buy a mortgage direct from the manufacturer. Alternatively, they can look around among financial institutions to find the mortgage that works for them.
Now they can also go to one of the dozens of mortgage brokers to see if one of them can find a better deal. From the customers’ point of view, there are hundreds of retail outlets (banks and mortgage brokers) offering mortgages.
The fact that mortgage brokers are taking market share away from the banks suggests that customers really appreciate the mortgage broker effectively cutting the buyer’s cost of searching.
There shouldn’t be a problem with the banks paying the broker for delivering the customer, as there is a clear cost saving to the bank. It does not need to have as many branches or as many staff.
Seen from the bank’s point of view, it can originate the mortgage through its own branch and incur some overhead and running costs, or initiate the loan through the broker channel and pay the broker for its overhead and running costs.
Ultimately, the client is buying a product, in this case a mortgage. The price the customer pays is transparent, as are the terms and conditions.
If brokers were not providing a good service, customers could easily swing back to searching for their own mortgage among the banks, or simply walk down the street to another broker. Smart customers will thus keep the providers honest and make sure competition works as it should.
There is a not a lot of academic research into the issues associated with remunerating mortgage brokers. What there is tends to be from the US, which has not had a good record in managing mortgages over recent years. The most relevant paper suggests that loan quality can be improved though requiring registration, higher education standards and continuing education and/or by requiring brokers to post bonds.
The ASIC inquiry will uncover more information about the sector. It may also find some people have behaved badly (as in any area of human endeavour), but it’s hard to see a significant structural problem in a very competitive market.
Rodney Maddock is vice chancellor's fellow at Victoria University and Adjunct Professor of Economics, Monash University and author for The Conversation. He can be contacted <a href="https://theconversation.com/profiles/rodney-maddock-107543" target="_blank">here</a>.
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