Property developer One Living, backed by former Macquarie banker turned investment manager Chris Green’s investment firm, has unveiled plans to bring more institutional capital into housing to help address the national supply crisis.

The New York-based investor has focused his firm, GreenPoint Partners, on addressing the supply shortage hitting middle market housing in Australia.

It is backing the new One Living business to develop more than 1000 units along the eastern seaboard. The new firm is starting with a development on Mona Vale Road, on the border of Mona Vale and Pymble, in Sydney’s Northern Beaches, with around 140 apartments planned. They are eyeing off more sites across the city.

With cost pressures rising in the industry, One Living’s model is to be a vertically integrated developer-builder, so it can respond directly to the housing gap by removing the cost inefficiencies embedded in traditional residential delivery.

“We are building a platform designed to operate at scale and starting in a market where there’s a clear need for quality, attainable housing,” One Living joint managing director Joseph Scuderi said.

“It’s that missing middle – it’s that attainable end of housing… that’s what most Australians invest into and what Australians can actually afford.”

<img alt="Mona Vale" data-entity-type="file" data-entity-uuid="798dfa93-4941-4db6-a696-31e9dc18e81c" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%202.31.50%E2%80%AFPM.png?VersionId=mKBqi5C_DmeiXS.AtJkcR8LQIxqCqmFi" />

GreenPoint Partners brings years of experience assembling and scaling real estate operating businesses across major markets. And Green sees a big opportunity in Australia.

“For its size, sophistication and importance to the community, Australia’s living sector has remained largely under-institutionalised, which represents significant opportunity,” Green said. “GreenPoint identified that gap, assembled the right team, and is backing One Living to build a platform that is aligned to market needs.”

Green said being a builder-developer would give the company the capacity and flexibility it required to deliver reasonably-priced homes.

“We want it to be at that attainable level; not super high end luxury but at that attainable level,” he said.

<img alt="Mona Vale" data-entity-type="file" data-entity-uuid="74a5344a-4b26-4d4a-ada3-056b1220be77" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%202.32.15%E2%80%AFPM.png?VersionId=vY8hXHO4reBMdO8ZXMWCNtGZJofUPQ3j" />

&nbsp;

One Living will undertake a component of affordable housing in its schemes, which it will own and operate, and it could also run build-to-rent on some sites.

Green praised local policy settings.

“The NSW government is being very supportive, strategic and pragmatic in terms of how do we generate more supply of housing,” he said. “We think it’s actually positive for development and the bit that’s been lacking at that attainable level is that it’s lots of relatively small private developers, whereas we want to create an institutional platform.”

One Living is also&nbsp;looking at high-density projects and could take on more institutional funding in the future.

“The way we will be able to achieve economies of scale is through size,” Green added.

Joel Robinson

One Living enters Sydney's new apartment market with Northern Beaches site acquisition

It's been several years since there's been an opportunity to buy a brand new townhome in Melbourne's coastal suburb of Mordialloc. Even apartment developments in recent times have been few and far between in the area.

Local developer LDS Property identified the gap in new housing, securing a site on White Street, directly opposite&nbsp;Woodlands Golf Club Mordialloc. They've recently launched&nbsp;<a href="https://www.apartments.com.au/new-townhouses/wm-residences-mordialloc-102-white-street-mordialloc-vic-3195">WM Residences</a>, just 13 townhouses which they have already started building.

Projects by Buxton Director Heath Thompson, who is selling WM Residences, says the townhouses x that perfect middle ground be

"Mordialloc residents have had limited options to downsize within the suburb, often forcing them to look elsewhere despite long-standing ties to the area," Thompson says.

"With very little comparable new supply coming to market, projects like WM Residences are well placed, particularly as buyers look to capitalise on current conditions amid constrained supply."

[smartcode_project:default project_id=134646 project_image_fid=6109]

The development, designed by regarded architecture firm&nbsp;<a href="https://www.apartments.com.au/architects/ewert-leaf">Ewert Leaf</a>,&nbsp;adopts a deliberately restrained architectural approach, focusing on simplicity, durability and liveability rather than overt design gestures.

The boutique scale is central to the offering. With only 13 three-bedroom residences, each home is configured to prioritise functional layouts and everyday use, supported by private terraces and secure two-car garages.

Ewert Leaf’s design response leans into a calm, neutral material palette. Interiors are defined by oak flooring, white walls and soft finishes, creating a consistent and understated backdrop. The approach avoids trend-driven detailing in favour of longevity, with an emphasis on natural light and spatial clarity.

[smartcode_project:default project_id=134646 project_image_fid=6110]

Beyond aesthetics, the homes are designed to meet contemporary performance expectations. Each residence targets a minimum 6-star energy rating, incorporating double glazing, comprehensive insulation and all-electric Bosch appliances.

The project’s location supports a walkable coastal lifestyle, sitting within close proximity to Mordialloc’s foreshore, Main Street retail strip and the train station. Local cafés and dining venues, including Suburbia Deli and Hendriks Café, are within a short walk, reinforcing the area’s established neighbourhood character.

[smartcode_project:default project_id=134646 project_image_fid=6116]

While <a href="https://www.apartments.com.au/developments/mordialloc-vic-3195">Mordialloc</a> is often defined by its beach and pier, the project taps into other areas of day to day living, offering easy access to local food, casual dining and transport, rather than positioning itself purely as a lifestyle retreat.

WM Residences reflects a continued trend across Melbourne’s coastal suburbs towards smaller-scale, design-led townhouse developments, particularly on infill sites where proximity to amenity is already established.

With construction commenced prior to its market entry, the project aligns with a growing preference among buyers for developments with visible progress and defined delivery timeframes.

[smartcode_project_cta:default project_id=134646]

WM Residences fills gap in Mordialloc townhouse market

&nbsp;

Developer GURNER™ Group has revealed $1.65 billion in residential sales nationally across the 12 months to December 2025, driven largely by the continued momentum of its Docklands wellness-focused precinct, Elysium Fields.

The sales result was generated across seven projects in Victoria and New South Wales, headlined by Elysium Fields, GURNER™’s $2.75 billion mixed-use precinct planned for Harbour Esplanade in Docklands.

The project has recorded more than $500 million in sales across the first three towers, equating to around 580 apartments sold.

The first tower, Helios, has now sold out of its 240 private residences, with GURNER™ preparing to release a premium penthouse collection comprising 15 three-bedroom penthouses in coming weeks.

[smartcode_project:default project_id=144441 project_image_fid=370975]

Elysium Fields is being developed on the long-held 20,000 sqm Docklands site at 208-226 Harbour Esplanade, which had remained undeveloped for more than two decades prior to GURNER™ taking over the project around four years ago.

Construction has now commenced across four towers ranging between 18 and 30 storeys, with Hamilton Marino and Maxcon appointed as builders.

Once complete, the precinct is expected to comprise around 1,100 residences, alongside retail, hospitality and public realm uses integrated throughout the site.

[smartcode_project:default project_id=144441 project_image_fid=370981]

Designed by Fraser &amp; Partners in collaboration with GURNER™ Design House, the project has been positioned around the developer’s broader focus on wellness-led residential living.

“We don’t sell apartments. We create a true luxury lifestyle that simply doesn’t exist elsewhere in the market today,” Founder and Executive Chairman Tim Gurner said.

“To deliver that requires an extraordinary level of detail, coordination and discipline across multiple verticals, from design and hospitality through to wellness and service.”

“We’ve always believed that living extends far beyond the physical residence. It’s about how you feel the moment you arrive, how you live day-to-day, and the ecosystem that supports that.” 
[smartcode_project:default project_id=144441 project_image_fid=370977]

The project’s design places a heavy focus on landscaping, wellness amenities and biophilic design principles.

Plans include around 3,700 sqm of landscaped gardens and open space throughout the precinct, alongside a retail and dining offering spanning approximately 5,000 sqm.

The broader public realm strategy centres around what GURNER™ describes as the “Path of Life”, an urban forest and landscaped pedestrian environment intended to connect the various buildings and wellness spaces across the precinct.

The apartments themselves will incorporate a range of wellness-focused inclusions, including purified air and water systems, circadian lighting, antimicrobial surfaces, and optional in-home wellness upgrades.

[smartcode_project:default project_id=144441 project_image_fid=370980]

Gurner said the company’s experience through its Saint Haven wellness clubs had directly informed the residential offering now being incorporated into Elysium Fields.

“We’re seeing a clear global shift toward longevity, performance and proactive health,” Gurner said.

“Our role is to deliver that in a way that feels seamless, highly private and beautifully resolved within the environments we create.”

A large component of the wellness offering is planned through the resident amenity and health facilities proposed within the precinct.

That includes plans for bathing and recovery facilities spread throughout the towers, incorporating mineral pools, saunas, steam rooms, flotation therapy, red light therapy and wellness lounges.

The developer is also seeking approvals for what it describes as a “reverse ageing medical clinic” within the precinct.

[smartcode_project:default project_id=144441 project_image_fid=370978]

According to project information released by the group, the proposed facility would include cryotherapy, IV infusion therapy, infrared and dry saunas, PEMF beds, MRIs, DEXA scans, brain scans and blood analysis services.

Within the first tower, Helios, residents will also have access to a dedicated amenity offering known as the Sky Private Club.

The upper 15 levels of the building will include private lounges, dining spaces, rooftop amenities and optional private wellness studios integrated within residences.

The Helios tower itself comprises 260 apartments ranging between 60 sqm and 300 sqm, including a collection of penthouses.

That includes a planned two-storey penthouse spanning around 600 sqm with uninterrupted bay views.

The Elysium Fields precinct is being delivered in partnership with Digital Harbour Holdings, a consortium that includes the Liberman family, which controls the development rights across the Docklands site.

[smartcode_project:default project_id=144441 project_image_fid=370979]

The sales result comes as GURNER™ continues expanding its national development pipeline beyond Victoria.

“We have a strong pipeline across Australia and are now focused on scaling into key markets including New South Wales and Queensland, while continuing to build on our Melbourne base,” Gurner said.

“We currently have more than $3 billion in the market, growing to over $5 billion by October, and expect to materially outperform last year in the 2026 calendar year.”

The result also reflects the continued strength of the upper-end apartment market in Melbourne, particularly for owner-occupier-focused product with large-scale amenity and lifestyle offerings.

[smartcode_project_cta:default project_id=144441]

Record result anchored by the Group’s “utopian” Elysium Fields precinct – defying market headwinds in Docklands.

Elysium Fields drive Gurner to $1.65 billion in apartment sales over 2025

National Australia Bank (NAB) will fund <a href="https://www.apartments.com.au/new-apartments/palmera-residences-gold-coast-18-garfield-terrace-surfers-paradise-qld-4217">Palmera</a>, a $1 billion, 52-level luxury residential tower being developed by Central Equity in one of the Gold Coast’s most tightly held coastal locations at Northcliffe.

The project, launched recently by <a href="https://www.apartments.com.au/developers/central-equity">Central Equity</a>, one of Victoria’s largest private residential developers, comes at a time when construction funding for large residential developments has become increasingly competitive as lenders tighten exposure to the sector.

Multiplex has been appointed the builder, and construction is now underway.

[smartcode_project:default project_id=108274 project_image_fid=365784]

Since its first project, Central Equity has delivered more than 85 residential developments with a combined end value exceeding $8 billion.

Palmera reflects Central Equity’s growing focus on the Gold Coast luxury apartment market and continues a relationship between Central Equity and NAB that dates back to the late 1980s, when the bank funded one of Melbourne’s earliest inner-city residential towers at a time when high-rise apartment living in the CBD was largely unproven.

“NAB’s funding of Central Equity’s $36 million CBD development in the late 1980’s to the financing of the billion-dollar tower today highlights the long-term relationship between the two organisations in delivering major residential projects” said Central Equity Founder and Chairman Eddie Kutner.

He said NAB’s early support was instrumental in helping establish the company’s development model.

“When we commenced our first residential tower in the late 1980s the concept of funding off-the-plan apartments was still largely untested in Australia,” Kutner said.

“NAB recognised the opportunity early and supported the project when others were uncertain. That relationship has now continued for more than 37 years across many developments.”

[smartcode_project:default project_id=108274 project_image_fid=365771]

Central Equity was established in 1987 when Melbourne’s CBD and Southbank precinct were still dominated by warehouses and commercial buildings. Fewer than 100 residents lived in Southbank at the time, and large-scale residential development in the inner city was not widely considered.

Recognising changing demographics and lifestyle preferences, the company began developing high-rise residential projects designed to bring permanent residents into the city centre.

Central Equity has provided accommodation for approximately 40,000 residents across Melbourne’s CBD and Southbank, while also incorporating supporting infrastructure including essential lifestyle facilities like retail spaces, childcare facilities and neighbourhood activity centres.

Central Equity has spent many years assembling the Palmera development site on the corner of Garfield Terrace and Frederick Street in Northcliffe, creating a supersite of around 3,300 sqm.

The developer said the Palmera apartment tower reflects its long-term view of the Gold Coast as a growing and increasingly diversified economy.

[smartcode_project:default project_id=108274 project_image_fid=365768]

Supported by infrastructure including the light rail network, major road upgrades expanded education, hospital and medical facilities and continued expansion at the Gold Coast Airport with more internation and domestic flights.

Positioned in the tightly held Northcliffe precinct, the 52-level tower will deliver 347 apartments, targeting buyers seeking a high-end coastal lifestyle, from downsizers to interstate investors.

Designed by Marchese Partners with interiors by DBI, Palmera has been conceived as a next-generation residential offering, featuring a collection of oversized apartments, with premium three-bedroom residences offering sweeping northern views stretching from Surfers Paradise through to Burleigh Heads.

[smartcode_project_cta:default project_id=108274]

NAB funds $1 billion Surfers Paradise apartment development, Palmera

Two years after completing one of the newest developments in North Sydney, developer <a href="https://www.apartments.com.au/developers/aqualand-australia">Aqualand</a> is turning its attention to the rapidly evolving St Leonards apartment market.

The developer, which completed AURA by Aqualand on North Sydney's Walker Street, has lodged plans for a 5,918 sqm site at <a href="https://www.apartments.com.au/new-apartments/33-37-herbert-street-st-leonards-nsw-2065">33-37 Herbert Street, St Leonards,</a> seeking approval for a pair of residential towers rising above a shared podium opposite Royal North Shore Hospital.

The proposal forms part of the broader transformation underway across the St Leonards-Crows Nest precinct, where former industrial and commercial sites are increasingly being redeveloped into high-density mixed-use projects tied to major transport infrastructure.

<img alt="Aqualand" data-entity-type="file" data-entity-uuid="2cc428cf-fe70-4cac-9cd5-264ad53af62c" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%209.51.56%E2%80%AFAM.png?VersionId=otKSnHtbjAvAddOnovyXQMgcAwE6DMe1" />

According to the planning documents, the site sits “within the St Leonards–Crows Nest Strategic Centre, identified by the NSW Government as a key area for accommodating future jobs and housing across Sydney.”

The proposal has been designed by fjcstudio, formerly FJMT Studio, and is being progressed through the State Significant Development pathway due to its scale and affordable housing provision.

The scheme would comprise 413 apartments, including 46 affordable housing units, alongside retail and commercial uses fronting Herbert Street. The project would also include communal open space, landscaping, a swimming pool, gymnasium, children’s play areas and podium-level resident amenities.

Planning documents show the development would consist of a part-13, part-39 storey tower form positioned above a four-storey podium.

“The development comprises a unified podium that activates the street interface, and two setback towers to accommodate new housing supply while maintaining an appropriate human scale at ground level,” fjcstudio noted in its Design Report.

The northern and southern towers have been shaped to respond to the surrounding skyline while also limiting overshadowing impacts to nearby public open space, particularly Talus Reserve.

The design report said the differing tower heights were intended to “contribute to a varied skyline while responding to the surrounding built form context and solar access considerations.”

<img alt="Aqualand" data-entity-type="file" data-entity-uuid="36da62dc-ff9e-41f2-a7e3-7be38373751c" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%209.51.45%E2%80%AFAM_0.png?VersionId=Mo6Rp2r.XRLTzIfg_PEEpw8NepDH8UBs" />

The site sits directly opposite Royal North Shore Hospital and within walking distance of both St Leonards Station and the new Crows Nest Metro station.

While the site itself sits just outside the formal Crows Nest Transport Oriented Development boundary, the planning documents repeatedly reference its alignment with the broader TOD objectives reshaping the Lower North Shore.

“The site is located adjacent to St Leonards Station and in close proximity to Crows Nest Metro which is within the Crows Nest Transit Orientated Development Accelerated Precinct which has been identified by the NSW Government to support housing delivery,” the Design Verification Statement noted.

According to fjcstudio, the project has been designed to respond to the broader transition occurring across St Leonards, where increasing residential density is being concentrated around transport infrastructure and employment hubs.

“The broader precinct is undergoing significant change, with a mix of existing mid-rise buildings and newer high-density developments,” the report stated.

“Recent and approved projects indicate a consistent shift toward taller built form, typically organised as tower-and-podium typologies with more active ground levels.”

The proposal includes close to 6,000 sqm of retail and commercial space across the ground floor and podium levels, designed to create a more activated street edge along Herbert Street.

Aqualand’s plans would also introduce a landscaped podium shared between the two towers, with communal open space in the form of a podium rooftop designed to support resident interaction and improve urban greening outcomes. The scheme would also introduce pocket parks at the northern and southern ends of the site, including a landscaped area at the corner of Herbert and Ella streets designed to improve pedestrian amenity and soften the streetscape.

&nbsp;

The proposal is being progressed through the NSW Government’s Housing Delivery Authority pathway, which was introduced to accelerate housing supply across the state. The application was declared State Significant Development in April 2025 following an expression of interest process.

<img alt="Aqualand" data-entity-type="file" data-entity-uuid="faf6d97d-2671-454f-b85a-fe1c6a7be608" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%209.51.49%E2%80%AFAM.png?VersionId=diVd28OBVr5.YV.7prrOz.uAanwwwm7a" />

St Leonards has been particularly active with new developments in recent weeks. Developer SP Setia’s <a href="https://www.apartments.com.au/news/nsw/first-look-sp-setia-targets-st-leonards-skyline-with-40-storey-tod-tower">plans for a new 42-storey tower</a> recently went on exhibition through the same pathway, while <a href="https://www.apartments.com.au/news/nsw/first-look-stockland-plans-52-storey-538-apartment-st-leonards-tower">Stockland’s 52-storey tower proposal</a> was also recently unveiled.

Aside from the St Leonards project, which is expected to take around nine months to move through the approvals process ahead of a potential 2027 launch, Aqualand is also preparing to launch Boronia, a new apartment project in Roseville comprising around 111 apartments on Larkin Street.

The developer also has approvals in place for the next stage of the Barangaroo precinct, which will feature new residential, retail, hospitality and community uses, alongside a new metro entry across the five-hectare site.

More than 50 new retail destinations are planned for Central Barangaroo, alongside a 270-metre-long boulevard connecting Hickson Park to Nawi Cove. Together with Harbour Park, more than 50 per cent of the precinct will comprise public open space and parkland.

First look: Aqualand joins St Leonards apartment party

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

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RBA board members remained alert to the possibility that the low levels of interest rates could foster imbalances in the housing market, the latest minutes showed.
"The most recent data suggested that activity in the housing market had remained strong, but there had been little change to housing market conditions overall or in the growth of housing credit in early 2015," the minutes read.
"Although prices continued to rise rapidly in Sydney and, to a lesser extent, Melbourne, trends elsewhere were more varied. 
"Members noted that the Bank was working with other regulators to assess and contain risks arising from the housing market."
The minutes noted overall members considered that the current setting of monetary policy was accommodative and providing support to the economy. 
They also acknowledged that a lower exchange rate would help achieve more balanced growth in the economy. 
"Further depreciation of the Australian dollar was likely given the recent declines in key commodity prices."
In considering whether or not to reduce the cash rate further at this meeting, members discussed the various channels through which monetary policy was affecting the economy at present, including the asset price and exchange rate channels.
"In assessing the operation of the cash flow channel in particular, they noted that the responsiveness of borrowers and savers to changes in interest rates and asset prices was unusually uncertain in a world of very low interest rates and high household leverage.
"Members also saw advantages in receiving more data, including on inflation, to assess whether or not the economy was on the previously forecast path and allowing more time for the economy to respond to the reduction in the cash rate earlier in the year."
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jchancellor-FAypfDUnLy

RBA on watch for housing market imbalances and risks: RBA April meeting minutes

<html><body>
Sydney prices – up by a third since 2012 – look rather exuberant, the Reserve Bank of Australia governor Glenn Stevens says.
But he added: "popular commentary is, in my opinion, too focused on Sydney prices and pays too little attention to the more disparate trends among the other 80% of Australia."
He noted the continued role of Australian Prudential Regulation Authority and Australian Securities and Investments Commission on addressing risks in the housing market.
"APRA has announced benchmarks for a few aspects of banks' housing lending standards and both APRA and the Reserve Bank will be monitoring the effects of these measures carefully; at this stage, it is still too early to judge them.
"We can only say that over the past few months, the rate of growth of credit for housing has not picked up further."
He said credit conditions are only one of several factors at work here.
"But credit conditions are very easy.
'So while the conduct of monetary policy can’t allow these financial considerations to dominate the ‘real economy’ ones completely, nor can it simply ignore them.
"A balance has to be found," he said speaking to business executives in New York on Monday, at a luncheon of The American Australian Association hosted by Goldman Sachs.
Stevens laid out why further interest rate cuts were possible, suggesting the economy was too soft to generate significant inflation and that weak employment growth meant there is very little prospect of a wages-driven prices breakout.
<div>
"Interest rates should be quite accommodative and the question of whether they should be reduced further has to be on the table," he said.
However, he indicated the bank's outlook on monetary policy was heavily complicated by the fact household debt is at record levels.
</div>
<div>"The extent to which further increases in leverage should be encouraged is not easily answered, but nor can it be conveniently side-stepped," Stevens said.</div>
<div> </div>
<div>"The Board has, moreover, clearly signalled a willingness to lower it even further, should that be helpful in securing sustainable economic growth."</div>
<div> </div>
<div>"A good deal of the effect of easier monetary policy comes via the housing sector – through higher prices, which increase perceived wealth and encourage higher construction, through higher spending on durables associated with new dwellings, and so on.</div>
<div> </div>
<div>"These are not the only channels but, according to research, together they account for quite a bit of the direct effects of easier monetary policy.</div>
<div> </div>
<div>"And they do appear to be working, thus far.</div>
<div> </div>
<div>"Housing starts will reach high levels this year and wealth effects do appear to be helping consumption, which is rising faster than income.
"But household leverage starts from a high level, having risen a great deal in the 1990s and early 2000s.
"The extent to which further increases in leverage should be encouraged is not easily answered, but nor can it be conveniently side-stepped.
"Even if we chose to ignore it, monetary policy's ability to support demand by inducing households to bring forward spending that would otherwise be done in future might well turn out to be weaker than it used to be.
"For a start, households already did a lot of that in the past and, in any event, future income growth itself looks lower than it did a few years ago."
</div>
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Disparate housing markets, but Sydney prices look rather exuberant: RBA Governor Glenn Stevens

<html><body>
GUEST OBSERVATION
Australia’s ‘property inferno’ is well and truly alight this month.
With property prices set to continue rising through 2015 and more cash rate cuts on the horizon, potential home buyers need to seriously consider whether they’ll make the most of favourable opportunities to dive into the market.
If property prices are on the up and up, and variable rates set to follow the cash rate to new lows, it makes sense that securing a property sooner rather than later will help to reduce your long-term costs. By choosing the lowest rate available to you, you may be able to offset some of the costs associated with higher property values, before they rise any further.
finder.com.au’s lowest variable rate home loans
<ol>
<li>
<a href="https://www.finder.com.au/loans-com-au-dream-essentials-home-loan">loans.com.au Dream Home Loan Essentials: </a><a href="https://www.finder.com.au/loans-com-au-dream-essentials-home-loan">4.23% </a>This is the lowest variable rate on finder.com.au and a heavy contender in terms of additional features. While you’ll have access to extra payment and redraw facilities, portability and splitting options, you won’t have access to an offset account or physical branches – loans.com.au is a solely online lender. This paired with a $375 annual fee could sway some potential buyers.  </li>
<li>
<a href="https://www.finder.com.au/ubank-uhomeloan-variable-rate#9384">UBank UHomeloan: </a>4.29% This loan is only available to those who have secured a 20% deposit on their loan, however this dedication is rewarded in the form of $0 application or ongoing admin fees, which is a welcome change in the home loan market. Provided you’re an Australian resident with a Pay As You Go (PAYG) income from an employer, this loan can provide you with some cushy features such as free, unlimited redraws and various splitting options.  </li>
<li>
<a href="https://www.finder.com.au/state-custodians-standard-variable-offset-loan">State Custodians Standard Variable: </a><a href="https://www.finder.com.au/state-custodians-standard-variable-offset-loan">4.34% </a>If you can pay the $299 Annual Service Fee, $275 Valuation fee and $300 discharge fee, you’ll have access to a flexible loan with 100% offset options, as well as extra repayments, redraw facilities and split loan options.</li>
</ol>
finder.com.au’s lowest three-year fixed home loans
<ol>
<li>
<a href="https://www.finder.com.au/newcastle-permanent-fixed-rate-home-loan#851">Newcastle Permanent: </a><a href="https://www.finder.com.au/newcastle-permanent-fixed-rate-home-loan#851">3.99% </a>This is the lowest 3-year fixed rate on finder.com.au and home to a limited-time cashback offer of $1000 on applications made before May 1, settled before June 26 and over $150,000. Just be aware that there are no redraw services for this loan, so make sure the repayments are a financial commitment you can dedicate to – as you won’t be able to use the money elsewhere once it’s deposited.  </li>
<li>
<a href="https://www.finder.com.au/ubank-uhomeloan-fixed-rate-home-loan#885">UBank UHomeloan:</a><a href="https://www.finder.com.au/ubank-uhomeloan-fixed-rate-home-loan#885"> 4.18% </a>This loan is designed for the sure-footed as it does not allow extra-repayments or redraws on the fixed term of your loan – you’ll have to look elsewhere should you need extra money in the first three years. Aside from a $395 application fee, there is no annual service fee and you’ll be allowed to change up the repayment frequencies, which is a key consideration should you need to make strategic repayments around other lifestyle factors such as transitioning between jobs. 
</li>
<li>
<a href="https://www.finder.com.au/loans-com-au-dream-home-loan-fixed#1468">loans.com.au Dream Home Loan: </a><a href="https://www.finder.com.au/loans-com-au-dream-home-loan-fixed#1468">4.29% </a>This loan allows five free splits, which could be a highly valuable option for many first home buyers, especially being in the middle of cash rate movements. With additional repayment options and no application or ongoing fees, it may provide a smooth transition for those apprehensive to enter the market – provided you’re adequately braced for an initial $220 valuation fee and $300 settlement fee.</li>
</ol>
Michelle Hutchison is spokesperson for comparison website <a href="https://finder.com.au/" target="_blank">finder.com.au</a>.
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mhutchison-SWt6qigzDX

Offset rising property prices by making the most of your home loan: Michelle Hutchison

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Sydney purchasers need to be very careful, because at some point there has to be some correction, HSBC Australia chief economist Paul Bloxham has again warned.
"Sydney house prices are running at an unsustainable pace," he told AAP.
Following recent strong gains that are set to continue, HSBC is forecasting Sydney house prices will be broadly flat in 2016, though not experiencing a big fall.
"The more Sydney house prices go up, the more likely it is that they will have to correct, and that's not necessarily a bubble," the former RBA economist said.
Earlier this year, after the February rate cute, he noted he was worried about the Sydney property market.
Speaking at the Australian Mortgage Innovation Summit, HSBC’s chief economist, Paul Bloxham, said the only housing market that the RBA and APRA needed to be cautious of was Sydney.  "In Sydney, this is going to be quite a challenge.
"The rest of the market doesn’t look over inflated. 
"I don’t think there is a housing bubble in Australia. 
"I think that if Sydney sees the same trends as we have seen over the last year or two, that is house prices is running at an annual inflation rate of 13% year on year, then if that continues for very much longer than you will need to see prices at some point will come down.”
The summit was hosted by Asia-Pacific Banking &amp; Finance.
 
</body></html>

Not necessarily a bubble: HSBC's Paul Bloxham on Sydney house prices

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For the potential buyers of The Block Triple Threat townhouses, the fully-furnished properties with new interiors offer a hidden benefit.
If their purchase is used for investment purposes, the buyer of one apartment could make almost $1.4 million worth of deductions within the course of their ownership.
BMT Tax Depreciation, which assembles the depreciation reports for The Block properties each season, has revealed that investors will be able to claim between $39,986 and $54,163 in depreciation benefits in their first year of ownership.
Tim and Anastasia's renovation at 2/27 Darling Street in South Yarra offers the greatest deductions, with between $44,316 and $54,163 claimable in the first year. In total, their apartment offers a maximum deduction of $1,389,708.
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2015/04/14/graph%20april%2014%20one.jpg" alt="">
Source: BMT Tax Depreciation
Depreciation, the declining value of a property or its items, can be claimed as a loss in investment properties, and therefore offers a significant tax benefit for investors.
Of all the items in the Block townhouses, it's the pricey designer kitchen appliances that offer the greatest depreciation benefits.
In Tim and Anastasia's triple level unit, for example, there is a total deduction of $19,842 available over five years for their kitchen appliances. In just the first year, investors could make a deduction of $3,445 on kitchen items.
Air conditioning offers the next greatest deduction, with $12,300 available over five years. Televisions and audio-visual equipment, window coverings and gas heating all also provide thousands of dollars in deductions.
The tax deductions peak for each couple's projects in the second year of ownership, with almost $60,000 potentially deductible in Tim and Anastasia's project in the second year.
<ul>
<li>Tim and Anastasia's depreciation:</li>
</ul>
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2015/04/14/depreciation-april-14-two.jpg" alt="">
<ul>
<li>Josh and Charlotte's depreciation:</li>
</ul>
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2015/04/14/depreciation-april-14-one.jpg" alt="">
<ul>
<li>Ayden and Jess's depreciation:</li>
</ul>
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2015/04/14/depreciation-april-14-three.jpg" alt="">
<ul>
<li>Darren and Dee's depreciation:</li>
</ul>
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2015/04/14/depreciation-april-14-four.jpg" alt="">
Source: BMT Tax Depreciation
The Block Triple Threat townhouses go to auction on 28 April.
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jrichardson-uRX5hFdKfN

The Block Triple Threat's depreciation tax treat for investors

<html><body>
The low official cash rate and an increasingly competitive home loan market has prompted ME Bank to cut its three year fixed rate product by 29 basis points.
Its three year standard home loan is now offered with a 3.99% per annum interest rate. Its one year fixed loan rate was cut by 40 basis points to 4.29%, and its five year loan is now down 20 basis points to 4.39% per annum.
Although the Reserve Bank did not cut the official cash rate in April, ME Bank head of home loans Patrick Nolan says money markets have begun pricing in two more rate cuts.
He also attributes the bank's rate cut to increased competition in the market.
"With competition hotting up, many Banks will pass these fixed rate savings directly on to customers," says Nolan.
"Banks are fighting over a smaller slice of the lending pie which is helping to push fixed rates to never before seen lows."
The bank also now allows new borrowers to pay an extra $30,000 over the fixed term of their loan.
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ME Bank drops three year fixed rate below 4%

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Hi Margaret,
I have had an investment property for the past seven years that is negatively geared in the inner Melbourne Inner East. 
The house is very old and has had numerous problems due to its age. We are looking at demolishing this house and rebuilding a new home.
 On completion of construction, our intent is to either rent it out or making this our principle place of residence (PPOR) if we can't rent it out. 
Could you please advise, if we decide to sell it in a few years' time (after we have used it as a PPOR), would we be liable for capital gains tax (CGT) or is there a sunset clause after which CGT does not apply? 
Regards,
David
Hi David
It would seem that CGT, when it applies and whether there are time limits or statutes on it, is one of the most misunderstood areas of our tax law that there is.
In your case, the property you refer to has been your investment property since around 2008, and therefore it is well within the era that CGT is charged on any property which is not your PPOR.
Being rented out is not a criteria which must apply. Whether it is rented or not, if it isn't your own home, CGT applies (unless it started out as being your own home and then you moved out). 
Under these circumstances you may qualify for the six year rule exemption, which allows you to move out for a period of up to six years and not incur any CGT if you subsequently move back in or sell.  This of course depends upon you not claiming this exemption on any other property - you can only have one exempted property at a time.
If you were to move in to this property, and had only this property on which your principal place of residence exemption was placed, it would not matter how long you stayed in it, there would still be some assessable gain for the period of time it was not your PPOR.  This is because it was an investment when you bought it and no amount of living in it can wipe this fact away.
If you go down this pathway you must keep accurate records of your purchase price and everything you spend on the property, so that pro-rated capital gains tax can be established when the time come for you to finally sell the property.
Regards,
Maragret
Have a property question? <a href="mailto:askmargaret@propertyobserver.com.au" target="_blank">Ask Margaret!</a>
Please not that due to the number of requests, Margaret may not be able to answer every question.
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mlomas-KC9MUPZ6Ca

Ask Margaret: Will CGT still apply if I move into my investment property?

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The Reserve Bank of Australia has held the official cash rate at 2.25% for April.
The decision comes after the Reserve Bank dropped the interest rate in February from 2.50% to 2.25%.
The <a href="/expert-insights/finance/most-experts-expect-reserve-bank-will-hold-rates-for-april-finder">majority of experts surveyed</a> by comparison website Finder, including NAB's Alan Oster, anticipated that the Reserve Bank would announce that rates would not change this month.
CoreLogic RP Data's head of research Tim Lawless says a potential rate cut later in the year is likely to see home values continue to rise.
"The Reserve Bank has previously stated that they will be looking towards the regulatory framework to minimise risk in the housing market and it is clear that APRA are vigilant for any deterioration in lending standards across Australia's lenders," says Lawless.
"The buoyant housing market conditions should continue to support growth in housing construction which in turn provides a strong multiplier effect on the Australian economy, with increased housing activity flowing through more spending on items such as building materials, appliances, home furnishings and white goods. 
"More importantly, with population growth slowing and construction increasing the disconnect between housing demand and housing supply is also reducing which may also alleviate some of the increases in home values."
Michelle Hutchison, of comparison website Finder, notes the benefit of the Reserve Bank's decision to first home buyers.
"Today's decision by the Reserve Bank to leave the cash rate unchanged at 2.25% is great news for first home buyers, as lower rates have led to higher consumer confidence and increasing property prices," says Hutchison.
"The past year saw the median property price increase by 7.4 percent to $559,000 (CoreLogic RP Data). If first home buyers have to borrow over $38,000 more for an average property – from $520,484 to $559,000 – the higher property price would outweigh the last rate cut."
"In fact, even if there was another cash rate cut, it won't outweigh the extra cost in monthly repayments if you paid $38,000 more for a property," she explains.
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Reserve Bank keeps cash rate at 2.25% for April

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At its meeting today, the Board decided to leave the cash rate unchanged at 2.25%.
Moderate growth in the global economy is expected in 2015, with the US economy continuing to strengthen, even as China's growth slows a little from last year's outcome.
Commodity prices have declined over the past year, in some cases sharply. The price of oil in particular is much lower than it was a year ago. These trends appear to reflect a combination of lower growth in demand and, more importantly, significant increases in supply. The much lower levels of energy prices will act to strengthen global output and temporarily to lower CPI inflation rates. Prices for key Australian exports have also been falling and therefore Australia's terms of trade are continuing to decline.
Financial conditions are very accommodative globally, with long-term borrowing rates for several major sovereigns at all-time lows. Financing costs for creditworthy borrowers remain remarkably low.
In Australia the available information suggests that growth is continuing at a below-trend pace, with overall domestic demand growth quite weak as business capital expenditure falls. As a result, the unemployment rate has gradually moved higher over the past year. The economy is likely to be operating with a degree of spare capacity for some time yet. With growth in labour costs subdued, it appears likely that inflation will remain consistent with the target over the next one to two years, even with a lower exchange rate.
Credit is recording moderate growth overall. Growth in lending to investors in housing assets is stronger than to owner-occupiers, though neither appears to be picking up further at present. Lending to businesses, on the other hand, has been strengthening recently. Dwelling prices continue to rise strongly in Sydney, though trends have been more varied in a number of other cities. The Bank is working with other regulators to assess and contain risks that may arise from the housing market. In other asset markets, prices for equities and commercial property have risen, in part as a result of declining long-term interest rates.
The Australian dollar has declined noticeably against a rising US dollar over the past year, though less so against a basket of currencies. Further depreciation seems likely, particularly given the significant declines in key commodity prices. A lower exchange rate is likely to be needed to achieve balanced growth in the economy.
At today's meeting the Board judged that it was appropriate to hold interest rates steady for the time being. Further easing of policy may be appropriate over the period ahead, in order to foster sustainable growth in demand and inflation consistent with the target. The Board will continue to assess the case for such action at forthcoming meetings.
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po-LsXgBTHBmX

Prices varied, though Sydney strong says RBA Governor Glenn Stevens' April statement

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Interest rates are set to stay low for some time but uncertainty remains over which way they’ll move over the medium to longer term.
Variable rates are popular with borrowers. More than four out of five loans written nationally in February through Mortgage Choice had a variable rate, the broker’s latest data shows.
“In December 2013, fixed rate demand peaked at 33.06%, while today this type of home loan accounts for just 19.56% of all loans written,” Mortgage Choice spokesperson Jessica Darnbrough says.
“While fixed rate pricing has dropped dramatically across the board in recent months, it seems borrowers are more comfortable taking out a variable rate mortgage.”
For people who want some certainty and protection from rate increases but don’t want to miss out completely if rates fall further, split rate loans offer an alternative.
Split rate home loans allow borrowers to fix the interest rate on a portion of the loan and leave the rest variable.
It’s difficult to tell exactly how many people are taking out split loans because most mortgage products offer the option lenders don’t report the figures separately. Anecdotally, split loans do seem to be gaining popularity.
Michelle Hutchison, money expert at comparison website <a href="https://finder.com.au/" target="_blank">Finder.com.au</a> says it wouldn't be surprising to see more borrowers choosing to split their home loan as there’s increasing uncertainty about the direction of interest rate movements.
“The <a href="https://finder.com.au/" target="_blank">Finder.com.au</a> Reserve Bank Survey shows mixed results with which direction the cash rate will move this year. Another indicator is that most lenders have not followed every cash rate movement throughout this downward cycle over the past three and a half years,” Hutchison says.
“Borrowers may not know which option is better so hedging your bets and splitting your loan with part fixed and part variable divides the risk.”
The benefit of splitting a home loan is that it combines the features of a fixed and variable rate loan. The variable portion offers flexibility, allowing you to participate in subsequent interest rate cuts, while typically being able to make extra repayments or redraw from the mortgage. The fixed portion is usually more restrictive but does lock in the interest rate shielding you from increases in the required repayments if rates rise.
It’s common to fix 50% of the loan but most lenders will allow you to choose whatever combination of fixed and variable rates you want.
Many lenders will allow borrowers to split rates using their existing mortgage without having to refinance. Check with your lender on their policies.
As with all types of loans, interest rates vary between lenders.
One example is from Homeloans.com.au which is offering a split rate mortgage where up to half of the loan is split with a comparison rate of 4.72% on the variable component and 4.72% on the fixed rate for a three-year term. For a one-year fixed rate component the rate is 4.74% and for five years it’s 4.84%.
Using those rates as an example, let’s say you have a $300,000 loan over 30 years. You fix half of the loan over three years using the mortgage product above and leave the other half on the variable rate.
Initially, the monthly repayment will be $1,560, comprising of $780 for the fixed component and $780 for the variable component (see table below). Since the fixed and variable rates are the same in this example, the cost is the same as for a loan with a 100% variable rate.
If the RBA cuts interest rates by 0.25 percentage points, and the lender passes on the rate cut in full to its variable rate loans, the interest rate on the variable component will drop to 4.47% but the fixed rate will remain at 4.72%. The monthly repayment will drop to $1,537. However, if you had a completely variable rate loan, the monthly repayment would be $22* less, at $1,515.
Similarly, if the RBA lifted rates by 0.25 percentage points and the lender passed on the increase, monthly repayments on the split rate loan would rise to $1,582, while monthly repayments on a loan with 100% variable rate would go up by $23* more to $1,605.
While $20-something a month doesn’t make a huge difference to most budgets, if the economy picks up over the next three years and interest rates rise more dramatically, the saving will become more significant.
Looking back three years ago to April 2012, the official cash rate was 4.25%, a full 2 percentage points above what it is today. It’s possible that over the next three years conditions will improve enough for the official rate to be lifted again back 4.25%.
Assuming lenders passed on the rate rises, the variable rate on the mortgage in the example above would increase to 6.72%, while the fixed rate would of course remain at 4.72%. Monthly repayments in this instance would rise to $1,750. In contrast, the monthly repayments on a mortgage with a 100% variable interest rate would be $1,940. That $190 a month would make a sizeable difference to most budgets.
Monthly repayments on a $300,000 loan over 30 years 
<table border="1" cellspacing="0" cellpadding="0"><tbody>
<tr>
<td valign="top" width="97">
 
</td>
<td valign="top" width="105">
Interest on fixed rate component (50%)
</td>
<td valign="top" width="105">
Interest on variable rate component (50%)
</td>
<td valign="top" width="104">
Total repayment
</td>
<td valign="top" width="105">
Repayment for 100% variable rate loan
</td>
</tr>
<tr>
<td valign="top" width="97">
Variable rate: 4.72%
</td>
<td valign="top" width="105">
$780
</td>
<td valign="top" width="105">
$780
</td>
<td valign="top" width="104">
$1560
</td>
<td valign="top" width="105">
$1560
</td>
</tr>
<tr>
<td valign="top" width="97">
Variable rate: 4.47%
</td>
<td valign="top" width="105">
$780
</td>
<td valign="top" width="105">
$757
</td>
<td valign="top" width="104">
$1537
</td>
<td valign="top" width="105">
$1515
</td>
</tr>
<tr>
<td valign="top" width="97">
Variable rate: 4.97%
</td>
<td valign="top" width="105">
$780
</td>
<td valign="top" width="105">
$802
</td>
<td valign="top" width="104">
$1582
</td>
<td valign="top" width="105">
$1605
</td>
</tr>
<tr>
<td valign="top" width="97">
Variable rate: 6.72%
</td>
<td valign="top" width="105">
$780
</td>
<td valign="top" width="105">
$970
</td>
<td valign="top" width="104">
$1750
</td>
<td valign="top" width="105">
$1940
</td>
</tr>
</tbody></table>
Source: Property Observer using Homeloans.com.au split loan and variable rate loan calculators.
*Note: the difference between these figures is due to rounding throughout the example. 
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