Queensland builder-developer MAYD has revealed the first look at its major North Kirra beachfront development, lodging amended plans that reduce the number of apartments and increase the proportion of larger residences.

The project is planned across a substantial 4,742 sqm amalgamated site spanning seven lots at <a href="https://www.apartments.com.au/new-apartments/2-6-pacific-parade-bilinga-qld-4225">2-6 Pacific Parade</a> and 27-33 Golden Four Drive in Bilin​ga, directly opposite Nor​th Kirra Beach.

<a href="https://www.apartments.com.au/developers/mayd-group">MAYD</a> secured the site for $32.5 million in 2025, in what was one of the Gold Coast's largest property transactions of the year.

The development will be delivered across two stages, with the first stage carrying an estimated gross realisation value of around $360 million.

The latest amendments seek to reduce the overall apartment count and shift the project further toward the owner-occupier market, with larger residences designed for buyers wanting considerably more space than traditionally offered in a beachfront apartment.

The residential mix will include townhomes, oversized two-bedroom apartments, substantial three-bedroom residences and four-bedroom homes.

MAYD has appointed Cera Stribley to lead the architecture and interiors, with the Melbourne-based design practice drawing on the beachfront setting through a series of ocean-facing terraces and heavily landscaped balconies.

Strong horizontal forms and curved balconies will define the exterior, with subtropical landscaping integrated throughout the building to soften the built form and increase the connection between the residences and the beachfront.

The project will also include an extensive collection of resident wellness and lifestyle facilities, continuing the broader shift across the Gold Coast's luxury apartment market toward larger homes supported by resort-style amenity.

<img alt="MAYD" data-entity-type="file" data-entity-uuid="d1bcbb05-e659-4b47-8bd4-1e595315e2ad" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-27%20at%202.05.03%E2%80%AFPM.png?VersionId=jj0XEud1X1DuLt7_KyElhjMdZGOXmLHP" />

MAYD Founder Todd Mould said North Kirra was increasingly appealing to buyers attracted to the more established, lower-density character of the southern Gold Coast.

"North Kirra presents one of the most compelling luxury residential opportunities currently emerging in Australia, combining absolute beachfront with the character and authenticity that buyers are increasingly seeking, and the same sense of tight-knit community that defined Burleigh and Currumbin perhaps 10 or 15 years ago," Mould said.

"With Gold Coast Airport on its doorstep, it also offers a level of accessibility that broadens its appeal across almost every market demographic."

The project comes as the southern Gold Coast continues to attract an increasing share of high-end apartment development and buyer activity.

Kirra in particular has emerged as one of the region's more tightly held beachfront markets, with its relatively low-density character, established surf and hospitality scene and proximity to Gold Coast Airport differentiating it from the higher-density markets further north.

Mould said those characteristics had informed the approach MAYD and Cera Stribley had taken to the project.

"We've worked closely with Cera Stribley to create a vision that is deeply connected to its surroundings," he said.

"Inspired by the coastline itself, the architecture has been shaped around space, privacy and resort-style living, creating a collection of homes that reflects the next generation of luxury on the southern Gold Coast."

MOTIV Managing Director Carly Cottam, who has been appointed to market the project, said buyer attention had continued to move south along the Gold Coast.

"Purchasers who may once have defaulted to Broadbeach, Main Beach or Surfers Paradise are increasingly recognising the value of a genuine beachfront location that offers lower density, strong amenity and a more established sense of community," Cottam said.

"Kirra has a powerful combination of growing demand and genuine scarcity. Beachfront supply is inherently constrained, the area remains relatively low density, and buyers are increasingly placing a premium on locations that feel established, uncrowded and authentic rather than heavily developed."

Cottam said the proximity to Gold Coast Airport was also proving increasingly important for interstate and second-home buyers.

"Being minutes from Gold Coast Airport makes it particularly compelling for interstate buyers, frequent travellers and second-home purchasers who can access an authentic coastal lifestyle almost immediately after stepping off a flight."

The acquisition takes MAYD's active development portfolio to more than $500 million, with the North Kirra project representing one of its largest undertakings to date.

MAYD is targeting an early 2027 launch.

Joel Robinson

First look at MAYD's North Kirra mixed-use precinct

<main data-perf-region="main">
Castle Hill, the longtime hub of the Hills District, has been one of the major beneficiaries of Sydney's Metro expansion, with improved connectivity helping drive continued population growth, development and buyer demand across the Hills District.

But despite that growth, the suburb has seen relatively few major new apartment projects brought to market over the past 18 months.

Hills District developer Reve Group is looking to fill that gap with <a href="https://www.apartments.com.au/new-apartments/nova-r-ve-castle-hill-2-garthowen-crescent-castle-hill-nsw-2154">Nova Rêve</a>, a major new mixed-use precinct on the corner of Garthowen Crescent and Old Castle Hill Road, a short walk from Castle Hill Metro Station and Castle Towers.

[smartcode_project:default project_id=152737 project_image_fid=377679]

The project will comprise three residential towers alongside a hotel, restaurants, cafes and a skybar, more than 1,600 sqm of ground-floor retail and almost an acre of landscaped gardens.

It represents the largest project undertaken by Reve Group, the development arm of the Kassis family, which has been building across the Hills District for more than 30 years through Kassis Homes.

[smartcode_project:default project_id=152737 project_image_fid=377675]

Nova Rêve also represents a significant step up from the family's first apartment development, Grand Rêve, which was delivered nearby on Garthowen Crescent.

Grand Rêve introduced larger, house-like apartment layouts and premium inclusions including Wolf and Sub-Zero appliances to the Castle Hill market.

Nova Rêve takes that approach to a precinct scale, combining the residential component with hospitality, retail and substantial public and resident landscaping.

[smartcode_project:default project_id=152737 project_image_fid=377685]

Reve Group Managing Director Sam Kassis said the project reflected the family's three decades of building in the Hills, which has evolved from trophy homes on quarter-acre blocks to larger-scale apartment development.

"Grand Rêve was our first apartment project here and it showed us what this pocket of Castle Hill could be. Nova Rêve is the refinement of that idea: not just apartments, but a place the whole suburb can use," Kassis said.

A key part of that approach is the hotel, which has been designed to operate as an amenity for the wider Castle Hill community rather than solely hotel guests.

It will include restaurants, cafes, skybars and all-day dining, alongside conference and event facilities catering to business functions, community groups and private events.

At ground level, more than 1,600 sqm of shops and cafes will open onto the surrounding streets and landscaped areas.

Almost an acre of gardens designed by Land and Form Studios will run through the precinct, incorporating pathways, seating, barbecue areas and children's play spaces.

[smartcode_project:default project_id=152737 project_image_fid=377680]

Reve Group's Romio Georges said creating an active ground plane had been central to the planning of Nova Rêve.

"There are gardens with pathways, barbecues, seating and play areas, shops and cafes opening onto the street, and a hotel with restaurants and a skybar that anyone in Castle Hill can walk into," Georges said.

The project's elevated position on one of Sydney's highest ridgelines will also provide apartments with outlooks toward the Sydney skyline, surrounding parkland and the Blue Mountains.

More than 80 per cent of the apartments will occupy corner positions, with Turner responsible for both the architecture and interiors.

&nbsp;

[smartcode_project_cta:default project_id=152737]

<h3 data-end="3697" data-section-id="q3n5ak" data-start="3672">&nbsp;</h3>
</main>

Nova Rêve arrives as Reve Group bets on Castle Hill's next growth phase

A collection of just 25 large-format apartments and penthouses overlooking Goodwin Park is entering the Coolangatta market, with <a href="https://www.apartments.com.au/new-apartments/marea-residences-coolangatta-27-27a-dixon-street-coolangatta-qld-4225">Maréa Residences</a> combining a low-density, residential-only approach with uninterrupted park and Pacific Ocean outlooks.

Located at 27 Dixon Street, Maréa comprises three and four-bedroom residences alongside a limited number of dual-level penthouses, with the project positioned between Goodwin Park and <a href="https://www.apartments.com.au/developments/coolangatta-qld-4225">Coolangatta</a>’s coastal precinct.

Construction has commenced, with completion currently estimated for late 2027. Three-bedroom residences are priced from $1.8 million.

[smartcode_project:default project_id=150999 project_image_fid=374005]

The project has been designed around its northern outlook across the park, with the building’s architecture, landscaping and material palette intended to establish a connection with the neighbouring green space. The residences have been configured to maximise natural light and views across Goodwin Park towards the ocean.

Inside, the material palette incorporates timber, stone and brushed brass, complemented by curved detailing and ambient lighting. Kitchens and bathrooms carry the same natural material approach, while residences also include basement parking, storage and lift access.

Maréa’s penthouses are arranged over two levels and include private pools, adding another layer to the project’s focus on larger-format apartment living. Across the development, residences are configured with three or four bedrooms rather than the broader mix of smaller apartment types commonly found in larger projects.

[smartcode_project:default project_id=150999 project_image_fid=374010]

Resident amenity is concentrated at rooftop level, where landscaped entertaining terraces and pools take advantage of elevated views across Coolangatta and the Pacific Ocean.

The project has so far been particularly well received by local owner-occupiers and downsizers, according to Urban Activation Property Sales and Marketing Director Matt George, with the residential-only format, construction quality and northern park outlook among the features resonating with purchasers.

“The uninterrupted northern aspect overlooking Goodwin Park has been a key point of difference, with buyers attracted to the sense of serenity and open space the park provides, while still enjoying easy access to the ocean and being within walking distance of the lifestyle and amenities Coolangatta has to offer,” George said.

[smartcode_project:default project_id=150999 project_image_fid=374002]

“The combination of high-quality construction, a residential-only building, park outlook and proximity to the beach has resonated strongly with the local downsizer market.”

The Dixon Street address is within walking distance of Coolangatta Beach and the broader southern Gold Coast coastline, including the surf breaks at Snapper Rocks and Kirra. Coolangatta’s cafés, restaurants and retail are nearby, while Gold Coast Airport is also within close proximity.

[smartcode_project_cta:default project_id=150999]

Maréa Residences brings parkside apartments to Coolangatta

Melbourne developer PDG has secured Victorian Government approval for its $1.5 billion Southbank development <a href="https://www.apartments.com.au/new-apartments/the-one-1-queens-bridge-street-southbank-vic-3006">The One</a>, clearing the way for the long-dormant riverfront site opposite Crown to finally be developed.

The Minister for Planning has approved the project at 1-29 Queens Bridge Street, with the Department of Transport and Planning issuing the planning permit following its assessment.

The approval will allow PDG to develop the prominent 5,059 sqm site with a major mixed-use tower comprising premium apartments, including branded residences, a luxury hotel and boutique office space.

PDG acquired the site in late 2024, with its position directly opposite Crown's main entrance and near Melbourne's Arts Precinct making it one of Southbank's most significant remaining development opportunities.

<img alt="PDG" data-entity-type="file" data-entity-uuid="3933013e-6332-4386-b9be-089df05caf17" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-27%20at%209.29.22%E2%80%AFAM.png?VersionId=sITIgBqDL0N3VNSMwWEmF5UA.uvcsRyu" />

Designed by COX in collaboration with ODO and PDG, the tower's architecture draws on the movement of the Yarra River, with six vertical pleats running the height of the sculpted facade.

The project will also see the heritage-listed Queens Bridge Hotel restored and incorporated into the development&nbsp;with new hospitality and public uses, including a rooftop venue.

A significant component of The One will be its residential amenity.

More than 5,000 sqm of resident facilities will be delivered across a single level, making it one of the largest consolidated residential amenity offerings proposed in an Australian apartment development.

The planning approval also incorporates a major upgrade of Queensbridge Square, which PDG will deliver in partnership with the City of Melbourne.

<img alt="PDG" data-entity-type="file" data-entity-uuid="73167fcd-1031-4b6f-a408-a064cfe45ed1" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-27%20at%209.29.17%E2%80%AFAM.png?VersionId=Pf1AEWxw6SNmBqR0zQW5lyEze.MtxgFp" />

The existing square will be revitalised as a new civic and pedestrian space along the Yarra River, strengthening the connection between the project, Southbank and the riverfront.

PDG Founder and Managing Director Vince Giuliano said the approval represented a major milestone for a site which has remained largely underutilised for more than 15 years.

“This is the most significant Planning Permit approval Melbourne has seen in recent years,” Giuliano said.

“For more than 15 years, this site has remained underutilised. This approval enables us to deliver a project that will contribute meaningfully to the revitalisation of Southbank, restore and reactivate an important heritage building, and create a new civic and hospitality destination for Melbourne.”

The latest approval follows an earlier planning permit issued by the City of Melbourne covering demolition works across part of the site at 9-29 Queens Bridge Street. Those demolition and early works are already underway.

PDG has also started generating early interest in the residential component from owner-occupiers ahead of a planned public launch in early 2027.

PDG secures approval for $1.5bn Southbank apartment development, The One

Local developer Harridan is seeking to turn its Woolloongabba apartment project into the first stage of a broader transformation of Burke Street, using a new 16-storey mixed-use building to establish a greener pedestrian connection toward the rapidly evolving Boggo Road transport and knowledge precinct.

The South East Queensland developer has filed plans for 154 apartments on the <a href="https://www.apartments.com.au/new-apartments/4-burke-street-woolloongabba-qld-4102">southern side of Burke Street</a>, where its proposal has been designed alongside a wider vision by LatStudios for the street.

That vision positions the southern side of Burke Street for buildings of 15 storeys and above, while envisaging lower-rise development of up to five storeys on the northern side to transition into Woolloongabba's existing character housing. It also proposes wider pedestrian verges, deep planting, new street trees and upgrades to the pedestrian approach to Boggo Road Station.

The Harridan development itself has been designed by Brisbane-based Arqus Design and will comprise 154 apartments across 16 storeys. The mix is weighted heavily toward two-bedroom apartments, with 121 proposed alongside 10 one-bedroom and 23 three-bedroom residences. There will typically be around 14 units per floor.

A lower-ground car park and three podium levels will accommodate 156 resident parking spaces, along with visitor and commercial parking. There will also be 154 resident bicycle spaces and 40 visitor bicycle parks.

&nbsp;

Harridan is a family-owned developer and part of the Holmwood Highgate Group, with more than three decades of development activity across South East Queensland. Its portfolio spans residential, commercial and industrial property, with current residential projects including Riverbank on Byron in Bulimba, Esperance Residences in Carina and The Precinct at Kinross Road in Thornlands.

Wooloongabba has been popular for apartment developers, particularly since the announcement of the 2032 Summer Olympics games in Brisbane.

While there have been a lot of development applications, it has failed to materialize into real supply.&nbsp;

Sarazin has been the major player in the area. They are under construction at Murcia Residences, on the fringe of East Brisbane and Woolloongabba. They have just launched <a href="https://www.apartments.com.au/new-apartments/the-stanley-residences-woolloongabba-8-trafalgar-street-woolloongabba-qld-4102">The Stanley Residences</a>, in Woolloongabba on Trafalagar Street. They also have Nuage coming soon on the nearby <a href="https://www.apartments.com.au/new-apartments/nuage-woolloongabba-14-wellington-road-woolloongabba-qld-4102">Wellington Road</a>.

First look: Harridan plans Burke Street transformation beside Boggo Road transport hub

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 OBSERVATION
I am a member of the <a href="https://cama.crawford.anu.edu.au/pro-pol/" target="_blank">“Shadow” RBA Board</a>, which is made up of a collection of industry and academic economists. Just before every meeting of the real-world RBA Board, we announce our recommendations for monetary policy.
Prior to the February meeting, we argued that <a href="https://theconversation.com/interest-rates-decision-could-boil-down-to-oil-rba-shadow-board-37037" target="_blank">RBA board members should hold the policy rate steady at 2.5%</a>. But they cut the rate for the first time in 18 months to 2.25%. This was a surprise to many, including financial markets which responded with big gyrations in the dollar and equity prices.
So did we, like many others, simply get it wrong?
Not really, because a key distinction between the Shadow Board and many market commentators is that we are supposed to recommend what the RBA should do, not predict what it will do.
Of course we hope that the reasons behind our recommendation are so compelling that the RBA would come to the same conclusion, even if it does not directly follow our advice. So this distinction between what it should do and what it will do gets blurred somewhat in practice.
Was the RBA wrong to cut rates?
What to make of the RBA cut then? Did it make a mistake?
The short answer is “not exactly”. (I know, you’re thinking that’s a typical <a href="https://quotationsbook.com/quote/11809/" target="_blank">two-handed economist</a> answer to a simple question. But I will explain.)
In <a href="https://cama.crawford.anu.edu.au/sites/default/files/outcome/attachments/2015-01/shadow_board_comments_february2015.pdf">my recommendation</a> not to cut, I focused on the huge recent drop in oil prices. I argued that this contributed to a temporary decline in inflation below the RBA’s target range of 2-3%, with the latest CPI annual rate at 1.7%. I acknowledged that low inflation provided some scope for the RBA to cut rates. But I suggested that the fall in oil prices, along with the fall in the dollar and robust growth in the US, would help broaden growth beyond interest-rate-sensitive sectors such as the housing market. So a cut could be delayed until the RBA had better prepared financial markets for one.
In the <a href="https://www.rba.gov.au/media-releases/2015/mr-15-01" target="_blank">policy statement</a> and the subsequently released <a href="https://www.rba.gov.au/monetary-policy/rba-board-minutes/2015/2015-02-03" target="_blank">minutes</a> from its February meeting, the RBA actually covered a lot of similar ground, albeit in much more detail.
The big difference was the RBA emphasised that the unemployment rate would, according to its forecasts, peak at a higher level than previously thought. This change in the forecast was driven in part by revisions of GDP data which suggested weaker growth over the past year.
Given this new information and the RBA’s modelling of how it changes the forecast for the unemployment rate, an immediate cut in the policy rate was deemed to be the best course of action. Its concerns were subsequently confirmed by the latest unemployment rate data that showed a jump up to 6.4% in January, the highest rate in more than 12 years.
So the RBA looks prescient. At the same time, trying to prop up demand in a way that stimulates the housing market has its risks. The US experience in the early 2000s makes this abundantly clear. Ultimately, we won’t know whether the RBA made the right call for years, if ever.
Known unknowns
The last Shadow Board recommendation wasn’t actually as simple as saying the RBA should hold rates steady. In general, we acknowledge uncertainty about the appropriate level for the policy rate by assigning probabilities to different possibilities. Think of this as like placing bets on what the right thing to do is.
Averaging across all of our members, we assigned a 68% probability that the appropriate policy was to hold steady, with a 13% probability for a cut and a 19% probability for a rise.
Importantly, we assign individual probabilities without conferring first. This is designed to avoid “group think” and there is a fair amount of variation in recommendations across members. (In February, I assigned 65% to holding steady, 20% to a cut, and 15% to a rise, which wasn’t too far off the average probabilities. The reasons for these probabilities can be discerned from my current and <a href="https://cama.crawford.anu.edu.au/rba-shadow-board/past-outcomes">past written comments</a>.)
Not trying to sell newspapers
Unfortunately for those who might enjoy a little controversy, we’re not in this to criticise the RBA.
This is in contrast to the original <a href="https://en.wikipedia.org/wiki/Shadow_Open_Market_Committee" target="_blank">“Shadow” Fed</a> in the US, which was founded in the 1970s. It was quite critical of the Federal Reserve’s policy at the time, not just in terms of policy actions, but its whole policy framework.
Monetary policy has changed a lot since the 1970s, with the adaption throughout much of the world of the remarkably successful Kiwi export of <a href="https://en.wikipedia.org/wiki/Inflation_targeting" target="_blank">inflation targeting</a>. This policy framework emphasises transparency and a nominal anchor (i.e., stable CPI inflation) that stands in stark contrast to the secretive and scattershot policies that were carried out in the 1970s.
The RBA has an inflation target and it is guided in its policy actions by forecasts of inflation and the unemployment rate. It explains in a transparent way why the policy rate is set at a given level, including how it will bring inflation within its 2-3% target range.
This framework has allowed the RBA to achieve very close to 2.5% inflation on average since the introduction of inflation targeting in 1994. So it is hard to be critical of the policy framework.
The Shadow Board, what is it good for?
So what is the Shadow Board’s role then? I believe one answer is to provide some independent thought on monetary policy, including why it can sometimes make sense to raise rates, rather than cut them.
I’ve noticed a fairly unremitting enthusiasm in the financial press for rate cuts. And these do stimulate the economy, so why not? The answer, of course, is that these rate cuts can also lead to inflation and various imbalances that create long-run pain after the short-run gain.
At the same time, we need to avoid what Paul Krugman refers to as VSP (“very serious people”) Syndrome, which leads to a constant and highly irresponsible call for short-run pain to somehow prove our economic virtue. Despite such economic bloodletting being equally as bad as the long-discredited medical version, VSPs keep pushing their <a href="https://www.afr.com/p/markets/australia_needs_recession_to_concentrate_W6pbeWWbdXJmpouyxXGvRM" target="_blank">shockingly bad advice</a> and sometimes even get to <a href="https://theconversation.com/crisis-envy-and-the-budget-a-very-serious-problem-26060" target="_blank">try it out with fiscal policy</a>.
Monetary policy will always involve dilemmas with no easy solutions. A record low policy rate of 2.25% helps the Australian economy adjust to the end of the mining boom. But it almost certainly overstimulates the housing market, which will cause problems down the road.
The Shadow Board won’t provide a definitive answer as to what the RBA should do. We are clear about our own doubts. But we try to think through the possibilities in an objective way and hope to contribute to the public discourse on monetary policy.
Just don’t ask us to predict what the RBA will do at the next meeting.
<img src="https://counter.theconversation.edu.au/content/37666/count.gif" alt="The Conversation" width="1" height="1">James Morley is professor of economics and associate dean (Research) at UNSW Australia Business School.
This article was originally published on <a href="https://theconversation.com">The Conversation</a>.
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jmorley-2PQc6nmtuL

The RBA cut rates, I said it shouldn’t. Here’s why: James Morley

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Small lenders, including the Bank of China, are leading the strong growth in lending to residential property investors, according to the latest Reserve Bank (RBA) credit data report.
The December mortgage data showed balances grew by 7.1%. Owner-occupier mortgage balances grew by 5.6% annually, while investor mortgage balances grew by 10.1%.
The total value of outstanding loans to owner-occupiers is $936 billion and loans to property investors sit at around $487 billion.
The Australian Prudential Regulation Authority (APRA) banking statistics show the lenders who have grown their books above average include the ANZ, NAB, Macquarie Bank, Teachers Mutual Bank, Defence Bank, QT Mutual Bank and bankmecu.
Emerging investment loan lenders include Bank of China, Arab Bank, Defence Bank, Macquarie Bank and the Teachers Mutual Bank. 
A Sydney-based investment management company is planning to set up the first privately owned Chinese bank in Australia.
It will raise close to $200 million aiming at a start-up asset book of $1 billion, project manager Howard Ting told Reuters.
"Rather than being backed by a government enterprise it will be backed by private Chinese individuals which makes us the first in the Australian market," Ting said.
The proposed bank's parent company, Australia Capital Investment Group, has yet to apply formally to the regulator.
Recently Glenn Stevens, the RBA governor, noted the opportunities for Australian and Chinese investors to invest in each other's financial markets could grow significantly in the coming years.
"By increasing their familiarity with the RMB as an international transaction currency, local financial institutions, investors and firms are likely to be better placed to take advantage of these future opportunities as they arise," Stevens told the Bank of China (Sydney) on the official launch of RMB clearing facilities in Sydney.
"This is a further important step in what continues to be a fascinating journey."
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jchancellor-FAypfDUnLy

Bank of China among the keenest property investor lenders in Australia

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The Reserve Bank (RBA) February minutes noted activity and prices in the housing market continued to be bolstered by the low level of lending rates and strong population growth.
"A range of indicators, including residential building approvals, suggested further growth of dwelling investment in the near term," the minutes read.
"Housing price inflation had moderated from the rapid rates seen in late 2013, but remained high and in Sydney and Melbourne had been well above the growth rate of household income.
"Growth of owner-occupier housing credit had remained around 6% in year-ended terms, while investor credit had continued to grow at a noticeably faster rate."
The minutes noted given the large increases in housing prices in some cities and ongoing strength in lending to investors in housing assets, that developments in the housing market would "bear careful monitoring."
 They noted that it would be important to assess the effects of the measures designed to reinforce sound residential mortgage lending practices announced by APRA in December.
Members noted that the data released since the December meeting suggested that the domestic economy had continued to grow at a below-trend pace over the second half of 2014.
"Members noted that there was considerable uncertainty around the timing and extent of the expected increase in household consumption growth and non-mining business investment. 
"Although fundamental factors such as low interest rates and strong population growth remained in place, they had not been sufficient to see a significant pick-up in the growth of these variables or a decline in the degree of spare capacity in the labour market. 
"In addition, recent data suggested that the expected improvement in economic conditions would occur later than had been previously expected. 
"Members commented that a strengthening in non-mining investment was a necessary element for growth to pick up to an above-trend pace, and noted the importance of confidence in underpinning such an outcome. 
"Indeed, an improvement in the appetite for businesses to take on risk had the potential, should it occur, to lead to much stronger growth in non-mining business investment than currently forecast," the minutes advised.
Those attending were Glenn Stevens (Governor and Chair), Philip Lowe (Deputy Governor), John Akehurst, Roger Corbett AO, John Edwards, Kathryn Fagg, John Fraser (Secretary to the Treasury), Heather Ridout AO and Catherine Tanna. The others present were Guy Debelle (Assistant Governor, Financial Markets), Malcolm Edey (Assistant Governor, Financial System), Christopher Kent (Assistant Governor, Economic), Alexandra Heath (Head, Economic Analysis Department), Anthony Dickman (Secretary), and Peter Stebbing (Deputy Secretary).
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RBA says Sydney and Melbourne house price inflation remains high

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CUA lent its customers $1.8 billion in the last six months of 2014, up $800 million from the same period the year before.
According to general manager of products and marketing Jason Murray, the result, a record breaker for CUA, was largely a result of the final three months of the year.
"In December alone, we issued $373 million in new loans, with more than 95% of that being for housing. That is highest value for new lending in one month that CUA has ever achieved in our 70-year history," said Murray.
"The record breaking run started in October when we issued a massive $350 million in new loans. In November, we broke that record with $357 million of new loans. And we topped it yet again in December."
CUA claims the October to December results "helped CUA grow at more than three times the average rate of the industry for that period".
Murray noted the growing influence of mortgage brokers.
"Mortgage brokers are also contributing to our lending growth, generating close to half of our new loans, which reflects a trend across the industry. Consumers are increasingly using comparison services and brokers for everything from hotel bookings to insurance, and banking is no different."
As of 24 February, CUA will offer a variable rate home loan for 4.43% per annum to customers with at least 20% equity in their property or a 20% deposit.
Their standard variable home loan interest rate will be 5.15%.
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jrichardson-uRX5hFdKfN

CUA's new loans up 75% over the year

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ANZ today announced that Mark Whelan will succeed Philip Chronican as CEO Australia reporting to chief executive officer Mike Smith.
Chronican, who joined the bank in 2009, intends pursuing a non-executive career following a 32-year career in banking.
Whelan is currently managing director global commercial banking and has been a member of the ANZ Management Board since October 2014. 
Previously at ANZ, Whelan was managing director commercial Australia and was formerly managing director institutional APEA based in Hong Kong where he was responsible for institutional, commercial and private banking across Asia Pacific, Europe and America.
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Mark Whelan to replace Philip Chronican at ANZ

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Reserve Bank Governor Glenn Stevens has acknowledged concerns that the Reserve Bank's influence on demand may be limited, given the official cash rate's record low level.
Speaking at the House of Representatives Economic Committee in Sydney, the Governor noted that the Reserve Bank (RBA) board is "very conscious of the possibility that monetary policy's power to summon up additional growth in demand could, at these levels of interest rates, be less than it was in the past".
"A decade ago, when there was, it seems, an underlying latent desire among households to borrow and spend, it was perhaps easier for a reduction in interest rates to spark additional demand in the economy," said Stevens.
"Today, such a channel may be less effective."
Stevens does, however, believe that cash rate adjustments still have some effect on growth.
"Nonetheless we do not think that monetary policy has reached the point where it has no ability at all to give additional support to demand. Our judgement is that it still has some ability to assist the transition the economy is making, and we regarded it as appropriate to provide that support."
In his speech on Australia's economic outlook, he noted that strong housing price growth was a factor of consideration in the RBA's decision to cut the cash rate by 25 basis points to 2.25%.
"Another factor in our consideration was dwelling prices, which have continued to increase. Price rises in Sydney are very strong, and they are pretty solid in Melbourne," he said.
However, Stevens noted that the performance of property markets Australia wide are "much more mixed".
"Excluding Sydney, the rise for Australia as a whole over the past year was about 5%.
"That is a healthy pace but not alarming, and some cities have seen price falls. Developments in the Sydney market remain concerning, but in the end we did not see these trends as overwhelming a case for a further easing in monetary policy that was made on more general grounds."
Following Stevens' remarks, the Commonwealth Bank commented: "The Governor sounds reasonably relaxed about house price trends and that any stimulus from rate cuts to housing activity can be contained.
"This is clearly an area that needs to be watched closely, particularly given the Governor’s comments about the changing effectiveness of interest rate changes. It probably also underlies remarks about the need to reload the fiscal cannon.
"The Governor believes that we should be on a better fiscal trajectory than we currently are." During his speech, Stevens reiterated the importance of supporting the non-mining economy, saying that "at this point non-mining business investment spending is still very subdued".
"While several key fundamentals are in place for stronger performance, clear signs of a near-term strengthening remain unconvincing at this stage. This is a weaker outcome than we had expected six months ago," he said.
Stevens noted that although growth in non-mining sectors had occurred, it remained below average.
"Our expectation had been that a further pick-up would occur in 2015," said Stevens.
"When we reviewed our forecasts in late January, we didn't feel that growth in the recent past had been materially different from what we had estimated a few months ago. But when we tried to look ahead, we concluded that there were fewer signs of a further pick-up in non-mining activity than we had hoped to see by now.
"As a result, the revised forecasts we took to the February Board meeting embodied a longer period of below-trend growth, and a higher peak in the rate of unemployment, than earlier forecasts."
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Is the Reserve Bank losing its influence? Governor Glenn Stevens' admission during economic outlook update

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Online lender loans.com.au has reported that the home loan applications they receive have doubled since it passed on the Reserve Bank's (RBA) full 25 basis point February cut.
The online lender now offers its variable rate loan at 4.23% per annum.
Kim Cannon, managing director of Firstmac, which funds loans.com.au, said in the past week, loan applications have increased by more than 100%.
According to comparison website Finder, loans.com.au offers the lowest standard variable rate of any lender in the market.
Cannon said the majority of borrowers are seeking variable rate loans, despite the official cash rate's record low.
"Some sectors of the market speculate that the RBA is not quite finished with cutting the cash rate, which would mean we could see another drop before the year is out," said Cannon.
"With variable rates being as low as they are, many borrowers feel they have nothing to lose by watching and waiting to see if they go any lower."
Loans.com.au reports that a "significant portion" of its customer base is on a rate-linked loan product, so automatically received some benefit from last week's cash rate cut.
"For those who didn't get the rate cut automatically, we are passing on the full rate cut to ensure we are still at the pointy end of the market," said Cannon.
Loans.com.au estimates that the rate cut drop would lower monthly repayments by around $44 per month on a $300,000 loan.
The lender notes that their rate is 1.42% per annum lower than the Commonwealth Bank's standard variable home loan rate.
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Loan applications double for lender after rate cut

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John Symond, the founder of Aussie Home Loans, forecasts another two rate cuts, in part because of the political shenanigans and ensuing lack of confidence.
"I think the Reserve Bank realised what is going on in Canberra is going to cause further problems with confidence and I think it was probably one of the reasons to get them to drop interest rates," he told Ross Greenwood's Money News on 2GB.
"When you you talk to businessmen, taxi drivers and shop keepers, everyone is so sick of it."
He says the low rates, for those people who have jobs and can afford it, would assist to spur things along, "but not in a crazy sense".
"Why wouldn't you go and buy a property and rent it out rather than put your money in the bank and get 2.5% less tax," Symond said.
The turbulence on the political sphere for the next several months will hurt confidence even more, he bemoaned.
"That's why I'm now thinking the Reserve Bank will continue to drop rates.
"I think there's probably a couple more there."
{mijopolls 90}
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John Symond sees another two rate cuts

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GUEST OBSERVATION
The Reserve Bank’s recent decision to introduce an interest rate reduction is a strong indication that there are changes brewing for Australia’s property market.
To fully understand how this rate cut will affect our housing markets, I think it’s essential to firstly understand how they have performed over the last 12 months. My research shows that there has definitely been some ‘winners and losers’ in the state comparisons.
The clear winner of the housing market battle is Sydney, which has documented a 16.78% annual growth rate from the period of December 2013 to December 2014. Performing equally as well in the unit market with an annual growth of 12.90%. By all accounts, what we have just witnessed is one of the largest boom periods in Sydney’s housing market history.
Taking this into consideration - along with its strong annual economic growth throughout 2014 that saw its state final demand increase by 3.5% - it is clear to see why people who are looking to enter the housing market would choose New South Wales. This compares to Western Australia, for example, whose economy is arguable in recession with its state final demand falling in the last three reported quarters.
This aside, when we take a deeper look at the Sydney market we uncover some unfavourable facts, including:
<ol start="1">
<li>The ABS’ latest reported commencements in new housing currently sits at 4,082 dwellings above the median commencement rate of the last five years. 
</li>
<li>New housing approvals, as last reported by the ABS, are running at 2,591 dwellings above the five year median. 
</li>
<li>Population growth, as last reported by the ABS, is slowing and currently running at 1,728 people below the five year median. 
</li>
<li>Residex estimates that there are currently some 7,000 dwellings surplus to need. 
</li>
<li>Unemployment is increasing, and is likely to increase a little more than was anticipated, given the lower crude oil prices and a consequential likely reduction in employment in the LNG development and exploration area.</li>
</ol>
These observations suggest that the Sydney market is heading into considerably oversupplied territory, which could lead to some significant corrections. In fact, analysis right across Australia indicates that there is a national stock overhang, and in many states it is significant.
So what does this all mean in a situation where interest rates have decreased?
We can anticipate that the interest rate decrease is likely to stimulate the markets, so house prices will probably move forward from here, with the lending control of the major banks hopefully keeping the markets from overheating.
But is this a good outcome for the property market? My simple answer is… no!
While it may be good in the short-term for existing house owners, throughout my three decades of monitoring house price growth, I can confirm that each period of growth always ends with a number of people who bought close to the top of the market getting burned due to their excessive leverage. 
I issue a warning to all, and that is that we have passed the top of a normal growth period, and we are now about to have the market further stimulated. This will take the growth into unchartered waters where affordability will be worse than we have previously seen.
If you are an investor wanting to get into the market, take care and make sure you don’t pay a premium for any purchase you make, especially if you are buying new units.
John Edwards is a consulting analyst for <a href="https://www.onthehouse.com.au/" target="_blank">Onthehouse.com.au</a>.
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jedwards-8kHM8GNY6d

The interest rate cut was a bad outcome for the property market: John Edwards

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GUEST OBSERVATION
Prospective home owners and investors should be careful not to go overboard with the current low interest rate.
Last week the Reserve Bank cut interest rates to a historic low of 2.25% after weeks of speculation.
I encourage home owners to continue to pay off their mortgage with the same or higher repayments in order to build up a buffer to be used in tough times.
Prospective home buyers often get so excited about buying their own place that they forget about evaluating the future.
They base their home loan on their current financial circumstances and don’t take into account their future plans like starting a family or allowing for the fact that rates will rise at some time in the future.
While rates are at historic lows now, it’s important to keep in mind that they won’t stay at these levels for the long term.
There’s no downside to making repayments above your required level as it gives you a safety net in case of difficult financial times or allows you to pay off your mortgage sooner.
In contrast, borrowing to your maximum at this, or any, time is a recipe for disaster.
I recommend people follow my 20-25-20 rule if they want to avoid financial stress where you put down a 20% deposit, ensure no more than 25% of your income is required for repayments and have a term of no longer than 20 years.
Patrick Bright is the founder of Sydney-based buyer’s agency <a href="https://%20www.epspropertysearch.com.au/" target="_blank" rel="nofollow">EPS Property Search</a>.
Patrick is the author of four best-selling real estate books known as “The Insider’s Guide to Buying Real Estate Series”.
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