The residential transformation of St Kilda Road is set to continue into with more new apartment plans for the sought-after boulevard.

Wing Tai Asia has lodged plans for a major residential tower at 464-466 St Kilda Road, replacing the former VACC House with an 18-storey mixed-use development designed around a retained heritage podium and a sculpted contemporary tower.

The proposal, prepared under Victoria’s Significant Residential Development with Affordable Housing pathway, would deliver 325 apartments and ground-floor retail across the prominent 4,653 sqm boulevard site in Melbourne’s St Kilda Road North Precinct.

The project centres on the adaptive reuse of the site’s heritage-listed VACC Building, an eight-storey office designed by Bernard Evans that has occupied the address for decades. Planning documents state the development would involve “carefully dismantling and conserving off-site the original metal fabric of the podium visible from St Kilda Road,” before reinstating it as the defining frontage of the new scheme.

Above the restored podium, Wing Tai is proposing a curvilinear residential tower. The scheme includes 172 one-bedroom apartments, 63 two-bedroom apartments, 66 three-bedroom apartments, and 24 four-bedroom apartments, alongside two ground-floor food and beverage tenancies fronting St Kilda Road.

The tower has been designed with substantial articulation and variable setbacks to minimise perceived bulk and maintain view corridors along the boulevard. Urbis, which prepared the planning report, said the design “has been significantly articulated through a curvilinear design” with “an interplay with materials, façade expression and depth” to create visual separation and visual interest.

The proposal also includes 254 basement car spaces, landscaped pedestrian links connecting St Kilda Road and Queens Lane, and a biophilic landscape strategy featuring canopy trees, raised planters, cascading greenery and a glass oculus pool overlooking the eastern frontage.

Planning documents confirm the $270.1 million development will contribute 3 per cent of project costs to the Social Housing Growth Fund as part of the application process.

Wing Tai acquired the St Kilda Road property in 2018 alongside Abacus Property Group for $95.38 million, before later consolidating ownership of the site. The property previously served as the Victorian Automobile Chamber of Commerce headquarters for around 60 years.

The transformation of the St Kilda Rd boulevard is already beginning to materialise, with a number of high-profile projects recently completed, launched, or approaching launch as developers continue to back the long-term appeal of the precinct.

Among the most notable recent completions is Louise by Samuel Property Group, just off the strip on Queens Lane, the same pocket Hirsch &amp; Faigen recently launched The Queensbury. Mirvac is too on the same street with The Albertine, which is approaching completion.

Dexus recently secured approval for its slice of St Kilda Road, while Gurner also has approved plans for the precinct.

Joel Robinson

Wing Tai unveils 325-apartment St Kilda Road tower on former VACC House site

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>

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 

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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

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>
GUEST OBSERVER
The minutes from the RBA’s December Board meeting, at which the cash rate was left unchanged at 2%, don’t give too much new information on the Bank’s thinking but have a marginally more positive tone. 
On household consumption, the RBA seems less worried about the outlook, noting the improvement in retail conditions and removing the reference to the risks to the outlook included in the minutes from the November meeting. The Bank is expecting consumption growth to lift to above-average rates from 2016, and while retail outcomes have improved, we continue to see this forecast as somewhat ambitious, given soft wages growth is likely to weigh on consumption for some time. 
The Board seems broadly comfortable with the housing outlook, noting that dwelling investment is likely to continue to grow but at a slower rate. The minutes did, however, highlight that it was still too early to assess the effect of the recent increase in lenders’ mortgage rates on the housing market. 
On non-mining business spending, the Board seems almost unperturbed by the weakness in the CAPEX survey, noting that while non-mining business investment intentions remained weak, business condition were “clearly above average” in the household and business services sector, which were less capital intensive. 
On the labour market, while noting the improvement in the unemployment rate and measures of job vacancies, the Board continues to point to soft wages growth as evidence of spare capacity in the labour market. 
On the AUD, the minutes contained very little commentary, only noting that the AUD had appreciated against the USD “in contrast to most other currencies”. 
Consistent with the post-meeting statement, the minutes again noted that the “outlook for inflation may afford some scope for a further easing of monetary policy should that be appropriate to lend support to demand”. 
We continue to expect the RBA to cut rates next year. We recently pushed back the timing of those moves, and now expect the Bank to cut rates by 25bps in May and August. We still expect the stimulus from housing and the lower AUD to fade next year, but the recent strength in the labour market precludes a cut as early as February. For 2016, there is also a possibility that further rises in lending rates from the banks, to offset regulatory changes that have raised minimum capital requirements, would cause an unwelcome tightening of financial conditions. With the inflation outlook providing no impediment to lower rates, we think the Bank has scope to provide further stimulus. 
This week’s FOMC meeting will also be important to the monetary policy discussion, firstly, to gauge the market impact of the first Fed rate hike in nearly a decade; and secondly to absorb the Fed’s forward guidance on the likely trajectory of US interest rates. 
We are also likely to get a further update on the Bank’s thinking over the next week or so, with a newspaper interview with Glenn Stevens likely to be published, consistent with the experience of the past few years.
Felicity Emmett co-head of Australian economics, ANZ Research and can be contacted <a href="https://www.propertyobserver.com.au/https://au.linkedin.com/pub/felicity-emmett/5a/3ba/256" target="_blank">here</a>.
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RBA feeling more comfortable: ANZ's Felicity Emmett

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GUEST OBSERVER
We’re launching into yet another silly season, and there will no doubt be the annual holiday splurge – in fact, one estimate puts our nation’s Christmas spending to be around $8.9 billion.
And that’s on gifts alone! There is, however, a ray of hope for your back pocket: with variable interest rates on the move this month, you have even more opportunity to shop around for a better rate. On the off-chance that these rate rises continue, an offset can provide even more control over your loan by letting you slice interest off repayments based on your hard-earned savings.
Here are the lowest home loan rates on finder.com.au that also allow a 100% offset account.
finder.com.au’s lowest variable home loan rates with a 100% offset account
<a href="https://www.finder.com.au/mortgage-house-summer-home-loan-review" target="_blank">Mortgage House Summer Home Loan</a>: 3.94%
With no application or ongoing fees, plus redraw facilities on top of your offset account, this home loan can provide some key cushioning for potential homeowners. Just be aware that you’re also signing up for a $395 legal, $200 Settlement and $450 discharge fee.
<a href="https://www.finder.com.au/boq-clear-path-rate-variable-home-loan#14747" target="_blank">Bank of Queensland Clear Path</a>: 3.99%
The Clear Path home loan will allow you to borrow up to 95% of the property’s value, while also waiving application fees and allowing for free redraws and repayments, which could pad out your mortgage nicely. You will have to crank the budgeting up a notch however, as you’ll then be factoring in a $10 monthly fee and a once-off settlement fee of $150. It’s advised you take some time to sit down and calculate the lifetime costs and benefits of your mortgage, especially in the case of revolving expenses. 
<a href="https://www.finder.com.au/bankwest-complete-home-loan-package-variable#10460" target="_blank">Bankwest Complete Home Loan Package</a>: 4.08%
Let it be said from the get-go that this is a package deal, which usually entails an additional expense of some sort – in this case it’s a considerable $395 annual fee. This might be offset in the first year by no application or legal fees, and its split options, redraw and extra repayment facilities could be enough to pull this loan over the line for you. When it comes to considerable annual fees, it’s a good idea to make sure there’s enough funds sitting in your offset account to negate the rolling expense by the time it hits every year.
finder.com.au’s lowest variable home loan rates with a 100% offset account
<a href="https://www.finder.com.au/beyond-bank-total-home-loan-package#12549" target="_blank">Beyond Bank Total Home Loan Package</a>: 4.09%
Perhaps just as powerful as a 100% offset account is the ability to also make free repayments, and this loan allows the best of both worlds. You can also borrow up to 95% of the property value, along with the ability to redraw funds should your financial standing get shaky. Again, this is a packaged home loan, and you will be slugged with a $395 annual fee, which will be exacerbated in the first year by a $150 settlement fee.
<a href="https://www.finder.com.au/mortgage-house-100-offset-fixed-rate-home-loan-review#13193" target="_blank">Mortgage House 100% Offset</a>: 4.39%
Nothing says freedom like no monthly or annual service fees – which is something recipients of this loan will experience. There is also no application fee tied to this loan, and you will be able to make additional repayments and be able to redraw. Just make sure you have some funds available at all times, as the $200 settlement fee will hit you in the earlier stage of the loan, while the $450 discharge fee will come around at the tail-end of the loan.
<a href="https://www.finder.com.au/st-george-fixed-rate-home-loan#1035" target="_blank">St. George Fixed Rate</a>: 4.44%
This loan comes with a waived legal and valuation fee, along with the ability to split your loan and make extra repayments and redraws. That being said, there are some serious fees that come with this product, including a $600 application, $10 monthly service, $100 settlement and $350 discharge fee. This loan could be your best option – but without doing your homework first, these fees could drown your budget and leave your head underwater for the next 30 years. Tread the water carefully!
Bessie Hassan is consumer advocate at <a href="https://www.finder.com.au" target="_blank">finder.com.au</a>.
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3.94% Mortgage House Summer special tops Finder's December home loans roundup

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GUEST OBSERVER
Australian housing finance approvals to owner occupiers posted a smaller than expected 0.5% decline in Oct – industry data had been pointing to a 1-1.5% decline. 
The detail was on the soft side though. Ex refinance, the number of owner occupier loans declined 1.2%mth, more in line with expectations.
The value of investor loans also declined sharply by -6.1% to be down 13.8% since August and 9.7%yr – the value of loans in this segment are back at June 2014 levels. 
Given the regulatory restraint being applied to investor lending and the indirect spillover boost this appears to be giving to owner occupier loans, the best gauge of broader market conditions is the combined total value of loans.
This declined 2.7% in Oct (ex refi) to be off 5.6% in two months. Annual growth is still positive but at 4.4%yr is much weaker than the strong double-digit growth rates averaged over the three years to August and the slowest annual pace since August 2012. 
In effect the housing market slowdown that has been apparent in buyer sentiment and auction markets is now showing through more clearly in the finance aggregates.
The state detail in today’s release is for owner occupier loans only and as such provides little additional insight into relative state performances. The investor loan split on Friday will allow for a clearer assessment.
 Details  Owner–occupiers (no.)   -0.5%mth, 6.3%yr   – ex-financing (no.)        -1.2%mth, 4.1%yr                                
Construction of dwellings (no.)   -0.4%mth, -9.7%yr         Purchase of newly built dwellings (no.)   -1.6%mth, 8.9%yr                                
Value of loans:             
Owner-occupiers ($bn)  0.4%mth, 21.2%yr   Investors ($bn)  -6.1%mth, -9.2%yr         Total ($bn)  -2%mth, 8.4%yr Total ex refi ($bn)  -2.7%mth, 4.4%yr  
 
Matthew Hassan is senior economist with <a href="https://www.westpac.com.au/" target="_blank">Westpac</a>.
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Owner occupier housing finance approvals down 0.77%: Westpac's Matthew Hassan

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Allan Moss, who previously headed investment bank Macquarie Group Limited, has been appointed as a part-time member to the Reserve Bank Board for a five-year period.
Moss is a principal of Allan Moss Pty Ltd and advises investment firms Evans and Partners, and Anchorage Capital Partners.
The Reserve Bank Act 1959, provides for nine board members - the governor, the deputy governor, the secretary to the Treasury and six other members.
Catherine Tanna, who has worked with BHP and Royal Dutch Shell, was also appointed a part-time member to the board for a further five-year period, the release by Treasurer Scott Morrison said. 
The other members are governor Glenn Stevens, deputy chair Philip Lowe, John Fraser (secretary to the treasury), John Akehurst, John Edwards, Kathryn Fagg and Heather Ridout.
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Ex-Macquarie boss Allan Moss appointed to RBA board

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Reserve Bank of Australia governor Glenn Stevens has joked the price of iron ore has even, on occasion, displaced from page one of newspapers the price on which Australians typically focus most intensely – that of a house.
He was speaking in Perth, with the RBA board meeting for the first time in Perth since September 2011. He noted the ‘super-cycle’ in commodity prices, and the associated surge in capital spending, had been of national and international significance.  
"I don't need to tell you that quite a lot has changed in the intervening period.
"At that time, the price of a tonne of iron ore was about US$170.
:A tonne of hard coking coal was bringing in about US$300.
"These were among the prices that saw Australia's terms of trade soar to a level some 75 per cent above their average for the preceding century.
"Few countries have seen such a windfall.
"These extraordinary prices had already, by that time, triggered a massive investment program, which was lifting capacity.
"Four years ago, Australia was shipping about a million tonnes of iron ore each day, which was already double the rate of 2004 - bit under a million tonnes of coal left our shores daily.
"By 2011, capital spending by the resources sector had already roughly trebled since 2005.
"It would peak the following year after rising by a further 50 per cent."
He said the results of that investment have come on stream, or soon will.
"Today, Australia ships around 2 million tonnes of iron ore and 1 million tonnes of coal per day.
"The investment was not just in iron ore and coal.
"On forecasts of strong demand from Asia – not just China but Korea and Japan as well – massive investments are under way in gas.
"LNG exports have begun from some of the Queensland projects and are expected to increase strongly over the coming years.
"As the WA projects come on line in the next few years, Australia's total LNG production capacity will reach over 80 million tonnes per year.
"This compares with a production capacity of around 10 million tonnes a decade ago."
As it happens, about the time the Board was meeting in 2011, resource prices and Australia's terms of trade were about at their peak.
"And what a peak it was.
"On a ten-year average basis, the terms of trade exceeded anything seen for at least a century.
"This was not just a very brief spike like some commodity price events have been (such as the early 1950s rise in the price of wool).
"It was quite persistent.
"Not permanent, but quite persistent.
"Nonetheless, the peak was four years ago.
"Today the price of iron ore is about US$40 per tonne, and coking coal around US$75.
"At a national level, Australia's terms of trade, having been through an extraordinary surge, have fallen by a third and are still declining."
But even at those reduced prices, iron ore is still bringing a price 60 per cent higher than it did in 2000.
Natural gas prices are 50 per cent or more above their 2000 level. 
"The spill-overs of these activities have been felt around the country.
"For the fifty years up to 2005, resources sector investment had averaged just over 1½ per cent of national GDP.
"Periodically, in a boom it tended to reach a peak of perhaps 3 per cent of GDP.
"While the episode is not yet over, at this point the economy overall has been recording growth."
Noting the RBA do not make detailed forecasts at state level, he noted previously, economic activity was very strong in the west and the north-east, driven by the investment boom, while in the south-east of the country it was somewhat subdued.
"Now, as the mining investment boom in the west is in the reversal phase, economic activity here in WA is more subdued, while in the south-east it is picking up.
"Consumer spending and employment growth in WA, which had outpaced the national average by a wide margin, have come back to be a bit below the national average.
"The rate of WA's population growth has slowed.
"Housing prices have declined a little, while those in Sydney and Melbourne have, at least until recently, risen at quite a clip.
"Measures of business conditions in WA are at about their long-run average, having been a long way above that for some years.
"So WA has ‘come back to the pack’, though the pack has actually picked up some speed in the meantime."
He concluded remembering the positive legacy of the events of the past decade.
Household net worth in WA in 2013/14 (the latest available data), at about $950 000 per household, was a good deal higher than in any other state.
"Since then, housing prices in WA have declined while those in some other places have risen, so this gap may have diminished.
"Nonetheless, my guess is that, among the Australian states, the citizens of Western Australia are on average, probably still among the richest.
"Even if the others gradually close the gap over time, as they well might, you are better off for having had the boom."
He said new opportunities for growth will emerge, resulting from things like the growth in the middle class of Asia, with all what that means for demand for services as well as for energy and agricultural production.
"The growth of India is surely also a potential opportunity for WA – facing as you do the Indian Ocean, and with the advantage of relative lesser distance.
"A mere eight hour flight time!" 
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RBA governor Glenn Stevens says WA has come back to the pack

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Borrowers disappointed by the RBA’s decision to keep interest rates on hold can still get an early Christmas rate cut on their home loan by haggling their lender for a better deal, according to <a href="https://mozo.com.au/" target="_blank">Mozo.com.au</a>.
In a recent mystery shopping exercise, Mozo staff posing as borrowers were able to haggle huge discounts of up to 1.25% off the standard variable home loan rate, simply by calling up the banks and asking. 
“The Big 4 are competing more fiercely for owner occupiers in the wake of the crackdown on investor lending, with discounts on offer to these borrowers the biggest we’ve seen,” said Mozo Director Kirsty Lamont.
Mozo data shows that by haggling 1.25% off the average standard variable rate, borrowers could save $223 a month on their repayments on a $300,000, 30-year loan.
“When pushed banks are prepared to offer better discounts beyond their advertised home loan deals which can lead to savings of $2676 each year for borrowers,” said Lamont.
As well as discounts on interest rates, lenders also offered other bonuses including cash back offers and frequent flyer points.
“With 27 home loan providers increasing their variable rates in this month alone, borrowers need to be prepared to do some hard negotiating to get the biggest discounts.” 
Here are Mozo’s top tips to get a better deal on your home loan:
1.    Don’t settle for the advertised price
2.    Research what the best deals are on the market and what competitor lenders are offering
3.    Start negotiating only when the lender knows you’re a good loan candidate
4.    If you can’t haggle on the interest rate, haggle on other aspects of the loan like asking them to waive your home loan application fees
5.    Be willing to move other banking products such as credit cards and transaction accounts to your new lender.
 
Kirsty Lamont is marketing director of <a href="https://mozo.com.au/" target="_blank">Mozo</a>.
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Five tips for a better home loan deal: Mozo's Kirsty Lamont 

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GUEST OBSERVER
In a move that surprised no one, the RBA left the cash rate unchanged at 2% at its board meeting. 
Moreover the post-meeting statement was a virtual carbon copy of last month’s. Clearly the Bank is waiting and watching the data. The labour market numbers are important, as are the inflation numbers due out in late January. But in the meantime, the data the Bank will be most interested in will be tomorrow’s Q3 household spending numbers. Internationally, any market volatility around the US Fed’s meeting on 16-17 December (AEDT) will be of interest, even though a rate hike is priced by the market. 
The changes to the statement were minimal: 
• The improvement in growth in business credit was noted. 
• The language around housing finance was changed slightly – the statement continued to highlight the easing in lending to investors, but omitted the comment about owner-occupier finance picking up. 
• The last paragraph reiterated last month’s comment that “members also observed that the outlook for inflation may afford scope for further easing of policy, should that be appropriate to lend support to demand”. 
 
In our view, soft inflation probably does give the RBA the scope to cut rates to give the economy a bit of stimulus. The question will be if, by February when the Bank next meets, it judges that demand does need a bit more of a kick-along. 
Until then, each data release will take on added significance. The labour market data are clearly important, in particularly whether the unemployment rate’s dip below 6% is sustained. The inflation number in late January will also be key. Tomorrow’s Q3 GDP, while somewhat dated, will be important in giving a guide to where things are at currently. 
What will be particularly important in tomorrow’s release will be the household spending numbers. The RBA is forecasting consumption to lift to above average from 2016. Above average is about 3½% y/y. It’s currently running at 2½%, so it will need to accelerate pretty quickly to keep the RBA comfortable with that forecast. With household incomes under pressure, due mainly to soft wages growth, we are doubtful that households will have the capacity to lift their spending to this degree. So tomorrow’s numbers are important to gauge how achievable the Bank’s forecasts are. It will be one of the key numbers the RBA will be watching.
Felicity Emmett co-head of Australian economics, ANZ Research and can be contacted <a href="https://www.propertyobserver.com.au/https://au.linkedin.com/pub/felicity-emmett/5a/3ba/256" target="_blank">here</a>.
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The RBA's decision that surprised no one: ANZ's Felicity Emmett

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GUEST OBSERVER
The Reserve Bank Board decided to leave the cash rate unchanged at 2.0%. This decision was widely anticipated coming as absolutely no surprise to markets.
The key policy conclusion: “Members also observed that the outlook for inflation may afford scope for further easing of policy, should that be appropriate to lend support to demand” was unchanged from the November meeting when this mild easing bias was first adopted in the wake of the much lower than expected print for underlying inflation in the September quarter.
The key international themes were retained. However in November the language used was “some further softening in conditions in the Asian region”. This was replaced by “some softening in conditions in the Asian region”. Arguably we could interpret this as indicating that the Bank has not observed any additional deterioration over and above what was expected a month ago. Australia’s terms of trade are still described as “falling” while the Bank not surprisingly continues to expect the Federal Reserve to start increasing its policy rate over the period ahead.
Growth in the domestic economy is still described as moderate but a gradual improvement in business surveys for the non-mining sector has been evident. This has been boosting employment growth and ensuring a stabilisation of the unemployment rate. Confidence around the labour market has been slightly boosted with November discussing “somewhat stronger growth in employment” and this statement referring to “stronger growth in employment”.
In the Statement on Monetary Policy the Bank confirmed the mid-point of its underlying inflation forecast for 2016 as 2.5%. However in the December statement it does confirm the November assessment that inflation will be consistent with the target over the next one to two years but qualifies that by suggesting that it will be “a little lower than earlier expected”.
Along with the observation that business surveys in non-mining are showing a gradual improvement this statement complements confidence around business by pointing out that “credit provided by intermediaries to business picking up”.
Since the last meeting the AUD has increased from USD0.715 to USD0.725 despite a fall in the iron ore price from USD49 to USD43 and a 5% fall in the Westpac’s overall commodity price index. With those contrasting changes there was some possibility that the commentary around the Australian dollar might be a little more urgent. However, with only one month’s data to go by, the Bank has decided to retain the sentiment around the Australian dollar as “the Australian dollar is adjusting to the significant declines in commodity prices”.
Outlook
Markets are currently attributing a 25% probability to a cut of 25bps in February. Of course this pricing has been scaled back from more than 100% over the last five weeks. Westpac still expects rates to be on hold in February. Developments that would be necessary to change our minds would be around the labour market; commodity prices; GDP growth; and confidence. However, we expect that such developments would take time to trigger a policy change and even though the February meeting is two months away we don’t expect sufficient developments in that regard.
The risks for lower rates should be much more focussed on May where the market gives a more than 50% probability of a cut. Our current forecasts do not justify that decision but of course those forecasts are being constantly reviewed.
Certainly if there is to be a move over the next six months it will be down rather than up.
Bill Evans is chief economist of <a href="https://www.westpac.com.au/" target="_blank">Westpac</a>.
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February cut also looks unlikely: Westpac's Bill Evans

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The cash rate has been left at a record low of 2% for a seventh month (eight months of rates at 2%).
The Reserve Bank Board has noted the moderation in home prices in Melbourne and Sydney.
What does it all mean?
In November, the Reserve Bank re-instituted the ‘easing bias’. That is, the RBA intimated that if rates were to move in coming months it would be down, not up. The ‘easing bias’ hasn’t changed. But this is more of an insurance policy. The economy is actually performing well and momentum appears to be lifting. Of course, if the economy started to lose steam, then the RBA could cut rates again – for the key reason that inflation is actually a bit lower than the RBA had earlier expected.
<a href="/images/2015/12/1/Screen%20Shot%202015-12-01%20at%203.22.28%20PM.png" target="_blank">Click to enlarge</a>
<img src="/images/2015/12/1/Screen%20Shot%202015-12-01%20at%203.22.28%20PM.png" alt="">
The next meeting of the Reserve Bank Board is not until February 2 2016.
On the Australian dollar, the Reserve Bank continued with the same language: “The Australian dollar is adjusting to the significant declines in key commodity prices.” Seemingly, the RBA is “happy” with the current level of the currency. However some could contend that the Aussie is a little firm compared with commodity prices like gold, oil, coal and iron ore.
On the housing market, the RBA noted: “The pace of growth in dwelling prices has moderated in Melbourne and Sydney over recent months and has remained mostly subdued in other cities.” Back in October, the RBA said: “Dwelling prices continue to rise strongly in Sydney and Melbourne, though trends have been more varied in a number of other cities.” The Reserve Bank would be happy that supply and demand in the housing market has become more balanced in Australia’s biggest cities.
The good news is that Aussie consumers and businesses have almost two months of grace before being badgered again by interest rate speculation.
Perspectives on interest rates
The previous rate cut was in May 2015 (25 basis points), taking the cash rate to a record low of 2%.
There have been 10 rate cuts since November 2011.
The Reserve Bank had previously lifted rates seven times from October 2009 to November 2010 – a total of 1.75 percentage points, from 3% to 4.75%.
What are the implications of today’s decision?
CommSec doesn’t expect any change in the cash rate for the foreseeable future. Inflation is under control but the major uncertainty relates to the “pass-through” of the lower exchange rate in lifting prices of imported goods. So far, retailers have been reluctant to pass on higher prices to consumers. The economy is well supported by record building approvals which are serving to lift many boats across the country.
With interest rates poised to stay low or potentially move even lower, investors will need to remain pro-active in embracing the best deals on online bank accounts. Borrowers also need to be on guard as fixed-term rates could edge higher in coming months as the US Federal Reserve seeks to ‘normalise’ interest rates.
Craig James is the chief economist at <a href="https://www.comsec.com.au/default.aspx" target="_blank">CommSec</a>.
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No surprises from the Reserve Bank: CommSec's Craig James

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GUEST OBSERVER
The board of the Reserve Bank of Australia today decided to keep the Official Cash Rate at 2%t - there is no surprise there.
The RBA has signalled that the cash rate will remain on hold for the foreseeable future.
The Bank has also signalled that if there is to be any change in 2016 it will be a further reduction.
That is the appropriate message for now given the uncertainty around future new home construction activity in 2016/17 and beyond. 
Higher variable mortgage rates and a broader reach for investor credit rationing than required is hitting at the very time when the new residential construction cycle is at or close to a peak. That is a risk for the broader Australian economy. 
<a href="/images/2015/12/1/Screen%20Shot%202015-12-01%20at%202.56.18%20PM.png" target="_blank">Click to enlarge</a>
<img src="/images/2015/12/1/Screen%20Shot%202015-12-01%20at%202.56.18%20PM.png" alt="" width="772" height="385">
Harley Dale is chief economist, HIA and can be contacted <a href="https://hia.com.au/en/BusinessInfo/economicInfo/EcoGroup.aspx" target="_blank">here</a>.
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