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>
There was little consensus on what the next move for interest rates in Australia was.
Several economists have changed their predictions from flat or rising rates through 2015 to forecasts of declines, while others maintain that the next shift will be up.
A key financial market indicator, <a href="https://www.sfe.com.au/content/prices/rtp15SFIB" target="_blank">the ASX 30 Day Interbank Cash Rate Futures</a> February 2015 contract, on 27 January revealed a 38% expectation of an interest rate cut to 2.25% at the RBA’s board meeting on 3 February. But, with the release of higher than anticipated inflation data for the final quarter of 2014 on 28 January, the indicator dropped sharply to 16%, suggesting much lower expectations of a rate cut in February.
Click to open in new window:
<a href="/images/2015/01/30/zoe-jan-30-onem.jpg" target="_blank"><img src="/images/2015/01/30/zoe-jan-30-onem.jpg" alt=""></a>
Source: global-rates.com, Property Observer research.
Some economists, including HSBC Bank’s chief economist for Australia and New Zealand Paul Bloxham, say the latest inflation figure means interest rates are now more likely to remain on hold through 2015 than be cut.
The RBA bases its interest rate decisions on a wide range of economic drivers. Local inflation figures are a critical component. But global economic factors such as falling oil prices and uncertainty in the economic outlook for Australia’s trading partners and other countries also have an influence.
Property Observer had a look at what central banks in other countries are doing with their official interest rates.
The RBA bases its interest rate decisions on a wide range of economic drivers. Local inflation figures are a critical component. But global economic factors such as falling oil prices and uncertainty in the economic outlook for Australia’s trading partners and other countries also have an influence.
Trading partners
China is Australia’s biggest two-way trading partner so its economic health is vital to Australia. China’s economy has been slowing and in November 2014 its central bank cut interest rates for the first time in two years in move to improve the situation. Its official interest rate is now at 5.6%, down from 6% in November.
Australia’s second largest trading partner is Japan. The Japanese economy has been in a poor state for years. Its official interest rate is just 0.1%.
The Federal Reserve, the central bank of Australia’s next biggest trading partner, the USA, has been vocal about its intentions to keep rates low for the near term. Its interest rate has been at 0.25% since December 2008, when the Fed slashed rates from 1%.
The table below shows the current interest rates of several major countries, the previous interest rate and the date of the most recent change.
As the table shows, many countries have been lowering interest rates. Most recently, at the end of January, Canada surprised markets by cutting rates, while Switzerland further lowered its negative interest rate, so customers must pay more to the central bank for holding their money.
Only a handful of countries have boosted rates in recent months, one being New Zealand, which is another of Australia’s top 10 trading partners. New Zealand lifted its interest rate in July last year to 3.5%.
While many countries manage monetary policy through interest rates, Singapore, another of Australia’s most important trading partners, manages its foreign exchange rate instead. On 28 January, the Monetary Authority of Singapore surprised the market by saying it would take measures to slow the rise of its dollar. This could be considered its version of cutting interest rates.
</body></html>

zfielding-GvX3Uq9KTa

What central banks around the world are doing with interest rates

<html><body>
GUEST OBSERVATION
As a financial planner my role is to always be thinking about what is the best strategy and path for my client to take. Since I have been working very closely with mortgage brokers for many years, I have realised the vast majority of brokers and to a greater extent bank employees do not take the same strategic view.
Being a somewhat transactional role, most mortgage brokers take the line of least resistance to get the deal done. Whether they understand structuring strategies or not, very few take the time to educate their clients on the pros and cons of different decisions and how to make the most of their situation. In reality, they are also limited by compliance standards in some cases.
As a warning upfront, this can become very confusing and challenging for new clients to get their head around. If you end up feeling a little unsure, I’m not surprised as it does go against everything you may believe.
Moving forward, whether you should choose to go interest only or principal and interest is a question that every borrower needs to consider and answer when taking out a home loan.  Naturally we rush to find an answer, but before you make that decision, it’s important to truly understand it.
Our natural response is “principal and interest”. Our parents, grandparents and society all tell us that debt is bad and we need to repay it and that is true to a certain extent.
So why would I go interest only when I want to pay my debt down?
Well the truth is you can pay your debt down and a whole lot more by choosing to take an interest only loan with offset account.
Before I get marching in to why, I recommend nearly all my clients to go interest only, though there are ones from time to time that it is better to go principal and interest. These are generally borrowers who do not have their cash flow under control and feel like they need to be forced to save. This is purely the only benefit of going principal and interest – the bank forcing you to save.
I know I would prefer to choose what I do with my money each month and if I want to pay my debt down I will. If I need to just pay interest this month or use this money to cover short-term additional expenses I will.
So how does it work?
Firstly it’s important that when you setup the interest only loan, you also open an offset account linked to your loan. These are usually included for free with any package loan from a bank. An offset account does exactly that, offset your loan account. For example, if you had a loan of $500,000 and you had $20,000 in your offset account, you in reality only owe the bank $480,000. When they calculate your interest due for that day, you will only be charged interest on $480,000 owing, not $500,000. Without trying to drum the point home further but if you happened to put another $20,000 in your offset account, you would only pay interest on $460,000.
The offset account I believe is the best invention and tool in the financial planning world. I absolutely love them. They give my clients complete flexibility in what they would like to do with their cash flow and savings. We use this as a  “savings account” that will always be getting a greater return than any other savings account. It is completely assessable and can moved wherever needed. So if you do not have an offset account, I suggest you get one and secondly, understand how to best use it.
So if the key to paying down your debt each month is not by principal and interest each month, how do I do it?
I ask all my clients to reassess their lifestyle expenditure every year. This allows them to see what income they are likely to earn and what expenses are going to be this year. On the back of this we choose an affordable amount and my clients commit to this amount for 12 months straight.
Each month this amount goes in to the offset account and when interest is due, the bank takes it out of the offset account. Whatever is left over is build up in that offset account and means they pay less interest the following month.
By growing the offset account as much as possible, we are reducing the interest due and that means they can grow the offset account even further. Each year my clients goal is not to pay down their debt by $50,000 but it would be to increase their offset account by $50,000 for example.
The key benefit to understand is that interest is calculated daily and you would be in the exact same position financially if you decided to save the same amount each month and pay via principal and interest.
For example, If you took two routes over 10 years and saved the exact same amount on a debt of $500,000. One route the debt may now be paid down to $300,000. The other route the debt would still be at $500,000 but you now have $200,000 in an offset account.
At this stage, you may be asking so what is the benefit?
There is no obvious benefit, but I can assure you, you would always want to take the debt of $500,000 and $200,000 in the offset account and I’ll explain.
To make sure we are both on the same page, the key takeaway here is that you can still repay your debt via interest only but the different is, it’s your choice to do so, not the bank forcing you to.  Instead of reducing your loan every month, you are aiming to build your offset account up.
Chris' six reasons are on the next page. Please click below.
<hr class="system-pagebreak">
Why I do not like principal and interest loans
<ol>
<li>
Separating Debt By going interest only on all loans, you keep the original debt at that level forever. You then put any left over savings in an offset account against any debt that is not tax deductible. This flexibility means you can move your savings around to whatever debt is not tax deductible at the present time and it also clearly separates your debt. If you decide to move to another property you own, you transfer your offset account to a different loan and this will save you a lot of tax. 
</li>
<li>
Lower Commitment On a P&amp;I loan the minimum payment due to the bank each month is roughly 20% higher on a 30 year loan. In reality if you cannot afford that 20%, you have probably got too much debt but why would you force yourself to a higher commitment. Personally, I would prefer to have a minimum payment 20% lower and choose to save more regardless in to my offset account. 
</li>
<li>
False Pretenses  I also believe that paying the minimum payment each month gives clients false pretenses that that is the amount they should pay per month. The bank want you to take as long as possible to pay this debt down. That’s why they give you loans for 30 or 40 years. Do you really want to have a loan for 40 years? T he best way to pay your debt down is to pay as much as you can afford each month by undergoing a detailed lifestyle questionnaire each 12 months. Disregard what the bank minimum payment says as that is not what matters. Just save as much as you can above your interest only amount per month. 
</li>
<li>
Flexibility    The negative with paying the extra 20% and more every month, is that this begins to add up to a lot of money over time. There may be times in your life when you cannot afford your minimum repayment each month and you do not have any buffer built up as you have paid it all in to the loan. By paying this amount in to an offset account instead you are building your buffer every month and if you cannot pay this month, that’s ok you have money in the offset account to cover it. 
</li>
<li>
Home becoming an investment property = tax savings  The ATO states that once you pay down your debt you cannot redraw on that debt and get a tax deduction unless it is for investing purposes. In the example above, because the debt has never been paid down, if you moved out of this house and decided to use as an investment property. The tax deductible will be at $300,000 and not at the original loan of  $500,000 not $300,000. A big difference and at current interest rates that you would be $4,000 a year better off in tax. 
</li>
<li>
Home Purchase in Future  It is very common that we are going to purchase a new home in the future and this debt will not be tax deductible as it is your principal place of residence. What you need at this point in time is cash or equity to cover the 20% deposit and costs. But what you would also like is to put every single dollar you have saved over the many years before hand and put this in to an offset account against this new debt. If you pay down your loans via principal and interest, you cannot get this money back to put in to the new offset account. If you have it sitting in an offset account, you can move it straight away and get the tax benefit.</li>
</ol>
As you can see above these are just six points, why I challenge you to rethink how you structure your loans. This is a mental mind shift and that is all that it is. Once you understand it; you still pay down your loans just as you were and just as fast but do this by having a focus to increase your offset account.
I cannot stress the benefit of going interest only and using an offset account. By not doing this, I’ve had many clients who have been forced to sell their homes that they would have kept if they went interest only. 
I’ve seen clients been able to keep their homes through financial tragedies due to having a buffer and I’ve seen clients pay down their debt faster by staying disciplined to the amount they can afford not what the bank tells them to repay.
Chris Bates is a director at boutique financial advisors <a href="https://www.canopyprivate.com.au/" target="_blank">Canopy Private</a>.
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The six reasons why interest only loans are the way to go: Chris Bates

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Most of the 30 experts surveyed by comparison website Finder predict that the official cash rate will remain at its record low of 2.5% for February.
However, Bill Evans of Westpac and Nathan McMullan of RAMS believe there will be some move from the Reserve Bank at today's meeting.
According to Finder, this is the first time since August 2013 that any respondents for their Reserve Bank Survey have predicted a rate change.
Of the 30 experts, 18 expect a cash rate change in 2015, with nine anticipating a change in the first quarter of the year. It seems the last month has given the experts much to think about, with only three survey respondents predicting a first quarter change when surveyed last month.
There is no consensus on whether the next cash rate movement will be upwards or downwards. A slight majority – 16 of the 30 respondents – predict the next change will be an increase, while the remainder believe the Reserve Bank will lower rates first.
Falling oil prices, low consumer confidence, labour force uncertainty and the Australian dollar were all raised by the expert panel.
Shane Oliver, head of Investment Strategy and chief economist of AMP Capital, said: "The RBA at its last meeting in December reiterated that a period of stability in interest rates remained prudent and since then strong data for jobs and building approvals has offset softness in economic growth and inflation indicators."
Meanwhile, NAB's Alan Oster said it was "too early to cut" rates.
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Majority of experts still expect no February rate change from RBA: Finder

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Interest rates decision could boil down to oil: RBA Shadow Board

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Craig James has raised the possibility another rate cut added to risks of a bubble developing in the housing market.
He doesn't make any conclusion while noting home prices are at record highs across Australia and annual price growth of 8% remains well above the long-term average growth rate of 4.8%.
"The strength of the housing market will clearly feature at the Reserve Bank Board meeting," he said today ahead of tomorrow's meeting.
He was also reacting to the CoreLogic RP Data Hedonic Australian Home Value index jump by 1.3% in January after lifting by 0.9% in December.
"Home prices are up by 8.0% on a year ago, after recording 7.9% annual growth to December," he said.
The index noted the most affordable 25% of capital city suburbs have recorded a gain of 7.3% in January compared to 8.8% across the middle 50% of suburbs and 7.9% across the most expensive 25%.
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jchancellor-FAypfDUnLy

Craig James says housing bubble concerns must be under RBA consideration

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A woman charged over alleged involvement in one of Australia’s largest home loan frauds faced court in Melbourne last week on charges linked to an <a href="https://www.smartcompany.com.au/legal/45172-arrests-follows-after-12-lenders-caught-in-alleged-100-million-myra-home-loan-fraud" target="_blank">alleged $110 million home loan fraud</a>.
Manija Zayee was charged after a lengthy investigation by the Australian Securities and Investments Commission into the activities of her mortgage broker partner Najam Shah and colleague Aizaz Hassan.
The fraud allegedly involved using fake documents to apply for at least 350 loans with numerous lenders, including the Commonwealth Bank, Westpac, ANZ, National Australia Bank and others.
ASIC alleges they submitted bank statements, pay slips, citizenship certificates and statutory declarations on behalf of clients from the now-defunct suburban Footscray company Myra Financial Services, where they worked, for loan applications between 2008 and 2011.
The company was registered in Zayee’s name.
Zayee has been charged with obtaining a financial advantage by deception by submitting false documents to secure a $136,000 loan from the Bank of Queensland.
Siobhan Hayden, chief executive of the Mortgage &amp; Finance Association of Australia (MFAA), said the MFAA only became aware of the fraud when Shah and Hassan were arrested.
Shah was a mortgage broker and previously registered with the MFAA but Hassan only acted as an introducer. 
“It appears that the fraud has been perpetrated around validating deposits and employment credentials,” Hayden says. 
“I’m keen like a lot of people to understand how it has been done, they have obviously used quite a sophisticated system. I would have to assume here the consumers were well aware of what is being structured for them so they could secure the loan.”
Hayden says from her discussion with the lenders involved she understands not one loan is in fault with only a few in slight arrears.
“$110 million has not been lost, it has been fraudulently acquired but the banks are still processing it,” she says.
Hayden says the MFAA did not have to cancel Shah’s registration as it had already expired two months prior to the exposure of the alleged fraud. 
“You can’t mitigate when someone chooses to be fraudulent,” she says.
Hayden says people should still have confidence in the integrity of mortgage brokers.
“Nearly 52% of loans introduced to lenders today are by brokers, so consumer confidence in brokers is still high,” she says.
“If any consumer ever feels uncomfortable about services provided they should contact the MFAA to raise a concern.”
ASIC has come under fire for its investigation of the alleged fraud after it was revealed Hassan was capable of writing loans until his accreditation was stopped on January 6, 2015. 
Hassan appeared before a bail justice on January 2, 2015. 
A spokesperson for ASIC defended the regulators role noting that the investigation into Myra Financial Services had been conducted over several years.
"It has necessarily been a long, complex and at times extremely sensitive operation,” the spokesperson said. 
"There are some important parts of the investigation which we are not able to divulge.”
The spokesperson said ASIC does not as a rule flag an impending arrest to an employer or to other related parties.
"To do so would increase the risk of the person of interest being tipped off, even if this was inadvertent,” the spokesperson said. 
"It would potentially place the employer in a compromised position. For example, the employer may wish to suddenly treat the employee differently – perhaps even sack them.”
A committal hearing for Zayee has been set for 17 April, the same date Shah and Hassan will next appear in court.
This article first appeared on <a href="https://www.smartcompany.com.au/" target="_blank">SmartCompany</a>.
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cwaters-YrtBR88nBe

Mortgage broker faces court over alleged Myra Financial Services $110 million fraud

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The director of comparison site Mozo.com.au predicts that variable home loan rates could dip below 4% this year as the Reserve Bank cuts the official cash rate.
<a href="https://mozo.com.au/home-loans" target="_blank">Mozo</a> director Kirsty Lamont said: "If lenders choose to pass on these cuts to customers, and I'm betting they will, Australians could see variable home loan rates start with the number three."
According to Lamont, competition among lenders has escalated in the past six months, with the popularity of non-bank lenders intensifying the fight for market share.
"It's an odds on bet that any cuts to the official cash rate will be passed on to home loan customers in 2015, as lenders fight it out over customers," she said.
Lamont is tipping two 25 basis point cuts from the Reserve Bank this year. According to <a href="https://mozo.com.au/home-loans" target="_blank">Mozo.com.au</a>, the current lowest variable home loan rate is 4.48%, offered from loans.com.au. If the lender passed on the full 50 basis point rate cut predicted, their variable rate would decrease to 3.98%, the lowest on record.
By Mozo's calculations, if a full 50 basis point cut was passed along, the annual saving on the average outstanding home loan balance of $239,000 would equal $840. If repayments were kept constant, a borrower could pay their loan off two years and two months earlier, with Mozo calculating a total saving of $16,957 in interest.
Other lenders which are currently offering variable home loans rates below 4.6% per annum include the NAB-backed UBank. Its UHomeLoan standard variable rate home loan is currently on offer at a 4.54% rate, with a 0.33% per annum offer cutting the product's usual 4.87% per annum rate.
The Queenslanders Credit Unit is offering a special on its Ultimate Home Loan, with the variable rate at 4.59% per annum. Bankwest are offering the same rate on their Super Start Home Loan, but the rate is variable for three years before climbing to 5.77% per annum.
However, Lamont and Mozo don't think rate cuts are coming quite yet, predicting the official cash rate will stay at its record low of 2.5% for February due to "improving housing data, a cooling housing market and lower oil prices".
 
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Mozo tips no cut for February, but 50 basis points to drop in 2015

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A very interesting inflation release last week.
The headline inflation figure of 0.2% for the quarter was very soft, taking the December 2013 to December 2014 reading down to only 1.7%, below the bottom end of the target range.
 <img src="https://1.bp.blogspot.com/-KMDhr1NH0Q4/VMhGBmEMdPI/AAAAAAAAStk/lfZ6LqA8Uus/s1600/CPI1.jpg">
As expected, the plummeting oil price played a key role in that.
<ul>
<li>The most significant price rises this quarter were for domestic holiday travel and accommodation (+5.8%), tobacco (+4.8%) and new dwelling purchase by owner-occupiers (+1.1%).</li>
<li>The most significant offsetting price falls this quarter were for automotive fuel (-6.8%), audio, visual and computing equipment (-5.2%) and audio, visual and computing media and services (-3.8%).</li>
</ul>
Despite this very soft headline print, the figures reported for the less volatile and preferred trimmed mean/weighted median for the December quarter came in stronger than expected at 0.7 and 0.7 respectively.
<img src="https://3.bp.blogspot.com/-m9hniWdCr8Q/VMhlIigckfI/AAAAAAAASu0/_usRuzQeaAc/s1600/CPI.jpg"> 
With downward revisions to earlier quarter figures the annualised underlying figures for these two key underlying measures came in at 2.2% and 2.3% respectively.
These readings are obviously at the lower end of the 2 to 3% range but the twin 0.7 prints for the quarter might just be enough to keep interest rates on hold in February. 
Rents grow at 2.4% An interesting data series hidden within the inflation data is to be found in the sub-indices for rents. Rental growth seems to have stabilised nationally at 2.4% growth over the past year.
<img src="https://3.bp.blogspot.com/-bpuoDW_Mhng/VMhGB1tsnsI/AAAAAAAASts/Zhrk1piLMSQ/s1600/Rent%2Baus.jpg"> 
However this 2.4% reading masks significant variations in fortunes by capital city. Rental growth remains robust in Sydney (+3.0%), Melbourne (+2.4%) and Brisbane (+2.0%).
Rental growth is, however, softer in Adelaide (+1.7%) and falling sharply in Perth (+1.5%).
 <img src="https://2.bp.blogspot.com/-3Jo-zDo2dyM/VMhGDNGrZ-I/AAAAAAAASuE/vJRCe226Ze8/s1600/Rents1%2B-%2BCopy.jpg">
In the smaller capital cities rental growth is also looking very soft.
The rate of rental growth continues to nosedive in Darwin (still +2.7%, but down from above +8% in 2013), remains soft in Hobart (+1.0%) and has turned sharply negative in Canberra (-1.8% and still declining).
 <img src="https://3.bp.blogspot.com/-DovzgHQgLcM/VMhGSEWjGdI/AAAAAAAASuU/yWUFTnDt4-w/s1600/Rents2.jpg">
It is probably worth noting here that despite rental growth being "softer" than it has been, in nominal terms - which is what matters to property investors who own property - the rental index continues to climb to record highs by the quarter.
 <img src="https://2.bp.blogspot.com/-x39Nfj-7YzY/VMhGDzoXgBI/AAAAAAAASuA/QhXqofg4ezU/s1600/Rents3.jpg">
Mixed bag for inflation figures
A bit of a mixed bag here for the inflation figures, then, and a data series which might easily be interpreted either way.
A very soft headline inflation reading of 1.7% suggests that the next move in interest rates is still likely to be down, particularly given that we have weak GDP growth, uncertain business confidence and low wages growth (hardly a recipe for persistent inflation, one would have thought!).
But trimmed mean and weighted median readings of 0.7% in the quarter will probablyconvince the Reserve Bank to keep interest rates on hold in February.
Nevertheless, annualised core inflation of 2.25% seems unlikely to preclude another interest rate cut should one be deemed necessary. Currency markets weren't entirely convinced about how to interpret the figures either, with the Australian dollar first shooting up and then dribbling back down a bit, then stabilising around 79.9 cents.
Tough to call. If I was a betting man I'd take a punt on a cut in the official cash rate in March to 2.25%.
Article continues on the next page. Please click below.
<hr class="system-pagebreak">
Fastest credit growth in six years
The Reserve Bank today released its Financial Aggregates data for the month of December 2014.
The figures showed credit growth ticking up to 5.9% over the past year, which is the strongest rate of credit growth since the start of the 2009 calendar year.
Housing credit once again lead the way with another 0.6% growth in the month of December to notch up 7.1% growth over the past year.
Business credit also recorded an improved 0.5% growth to grow by 4.8% over the past 12 months.
Personal credit grew by only a paltry 0.9% year-on-year.
<img src="https://4.bp.blogspot.com/-EcW2Y5cR3EE/VMtgA59-w4I/AAAAAAAASxA/oQyaw8PWlig/s1600/RBA5.jpg">
Part one - Business credit growth improves
An improved month for business credit with a slack 0.3% growth in November 2014 being bettered by 0.5% growth in December.
<img src="https://1.bp.blogspot.com/-VnHrs-25fio/VMtgCQQD82I/AAAAAAAASxY/AEG1VMT56HU/s1600/rba4.jpg">
The 4.8% year on year growth in business credit growth is the strongest annualised result since March 2009, although clearly we are coming from a low base.
The chart below shows that while Australia may have avoided a technical recession through the financial crisis, some Australian businesses may have experienced recession-like conditions for a couple of years from the middle of 2009.
<img src="https://1.bp.blogspot.com/-V7hJ0tQq9Q4/VMtgCaExgjI/AAAAAAAASxg/BoOnjDT2qXk/s1600/rba6.jpg">
With housing credit growing faster than business credit this will lead to further debate as to whether property investors are somehow "crowding out" small business lending.
It seems a dubious conclusion, since lending is said to be available for ventures with a sound business case, while it is simpler for many of us as small business owners to use lines of credit secured against housing for the purposes of business expansion. Moreover it's a great deal cheaper, since banks tend to lend at a materially lower rate against an immovable asset such as a house. I looked at this conundrum <a href="https://petewargent.blogspot.com.au/2015/01/housing-investor-credit-accelerates" target="_blank">in much more detail previously here</a>.
The latest stock exchange (ASX) <a href="https://www.asx.com.au/about/market-statistics.htm" target="_blank">Market Statistics</a> shows that there is a bit happening in terms of both initial and secondary capital raisings.
<img src="https://2.bp.blogspot.com/-IcaGs9yqxJI/VMtjAyOhQZI/AAAAAAAASyA/vX7Rrg5zV_k/s1600/RBA8.jpg">
In terms of what businesses at the upper end of town are up to, $29 billion of IPO capital has been raised on the ASX in the past year, which as high as we have seen.
There is also plenty of volume in terms of secondary capital raisings - $35 billion through 2014 - although nothing like the almighty flood of capital raised in 2009 as listed companies licking their wounds looked to shore up their balance sheets.
<img src="https://3.bp.blogspot.com/-JExHmljt-_U/VMtf6vogLTI/AAAAAAAASw0/WpYh2Luwh5s/s1600/RBA7.jpg">
Article continues on the next page. Please click below. 
<hr class="system-pagebreak">
Part two - Property investors dominate
On to housing credit growth, and the month's data once again showed investor credit (+0.8% seasonally adjusted) continuing to rise at a significantly faster pace than owner-occupier credit (+0.4%).
In fact the rate of owner-occupier credit growth slowed a touch in seasonally adjusted terms in December, while investor credit has simply kept humming along.
<img src="https://4.bp.blogspot.com/-hqJMoJFPS8U/VMtgAm0WtPI/AAAAAAAASw8/MInuRZXGuJE/s1600/RBA2.jpg">
In terms of rolling annual credit growth, we naturally expect that these figures will remain lower than in decades past, since we are of course starting from a much higher base.
Below we can see the daylight between the growth in owner-occupier credit and investor credit which has grown by 10% over the past year, and nearly as quickly in rolling annual terms.
<img src="https://1.bp.blogspot.com/-7kdlTSdDvCE/VMtgfZbLXTI/AAAAAAAASx0/3P8ST3jnH7I/s1600/rba.jpg">
The will raise the interest of APRA, with the regulator having stated that it will be monitoring lenders which are growing their investor loan books at "materially above" a double digit pace. What "materially above" actually means is another matter, and the general view seems that APRA is keen to wait until it has more data before considering stepping up its role any further.
Unsurprisingly low interest rates have led to investors taking a new record share of total housing credit at 34.3%.
<img src="https://2.bp.blogspot.com/-aR6__55nUK4/VMtgBwGNFQI/AAAAAAAASxU/OBC3CJXFuek/s1600/rba3.jpg">
With Australia continuing to pump relatively high levels of net overseas immigration heavily focussed upon our four largest capital cities, I expect this trend to continue towards a 40% share over time, although this will take a long time to play out.
There is growing evidence to suggest that younger Australians are increasingly choosing to buy an investment property as their first step onto the housing ladder (in fact, it's long been obvious to those in the industry). 
While unconventional this may not be entirely irrational if the duration of the average employment contract is to shorten - particularly given the high frictional costs associated with trading property (most notably stamp duty, but also other acquisition and disposal costs).
The wrap
With interest rates appearing likely to be cut again in the months ahead - and perhaps more than once - 2015 is surely going to be another big year for property investors. 
It will be interesting to see whether the slowing pace of owner-occupier lending continues. 
This suggests that the property types and locations which will outperform are, quite simply, those favoured by investors, which typically means inner- and middle-ring properties in the capital cities.
The data shows <a href="https://petewargent.blogspot.com.au/2015/01/record-sydney-investor-lending-again" target="_blank">Sydney absolutely miles out in front</a> in terms of investor lending growth, although investor finance in Queensland has been <a href="https://petewargent.blogspot.com.au/2015/01/record-sydney-investor-lending-again" target="_blank">steadily increasing</a> now in rolling annual terms since August 2011, and significantly is more than <a href="https://petewargent.blogspot.com.au/2015/01/record-sydney-investor-lending-again" target="_blank">20% higher over the past year</a>. 
The housing finance data suggests that Brisbane will have a strong 2015, although there is likely to be a very significant variance across property types given the mismatch between the new supply and what is in demand by the market.
Business credit growth is now at it highest level in nearly six years, but uncertainty abounds in this sphere and surveys suggest that progress is at best likely to be tentative.
PETE WARGENT is the co-founder of <a href="https://allenwargent.com/" target="_blank" rel="nofollow">AllenWargent</a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank" rel="nofollow">blogger</a>.
His new book '<a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx" target="_blank" rel="nofollow">Four Green Houses and a Red Hotel</a>' is out now.
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Interest rates to fall again - and investors set to dominate: Pete Wargent

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The probability of the Reserve Bank of Australia lowering the cash rate at its February board meeting increased, given the opening Herald Sun paragraph of Terry McCrann’s column late on Wednesday night that declared the Reserve Bank “will almost certainly cut its rate at its first meeting back for next Tuesday”. 
Australian Financial Review coloumnist Christopher Joye noted this morning that traders reacted almost instantly and prospects of a February and/or March rate cut were revived.
Joye does not personally describe the probability of a February easing as “almost certain”.
Joye's best guess is it a still high 60% plus chance. And if they don’t go in February, they have laid the groundwork for doing so in March.
But Joye does note McCrann's past predictions immediately before board meetings used to be lethal, after he’d got the good oil from senior staff. But Joye says the RBA link isn't now as strong with McCrann.
McCrann has dubbed this the year of the mousetrap. 
"Beware of getting caught, snatching for seemingly easy succulent cheese," he warned.
"This year was supposed to the year where the ‘experts’ could build their predictions — for share prices, for property, for interest rates, for the critically important value of the Aussie dollar — around one foundational certainty.
"This was that the US economy was picking up steam; so US interest rates would start going up after being at zero for nearly six extraordinary years, and would take the US dollar with them. Hullo an Aussie dollar heading for US70c, or even lower.
"But the year kicked off with a big event that nobody, and I mean nobody, predicted — the Swiss abandoning their attempt to keep the Swiss franc fixed against the euro.
"That’s combined with the almost as unpredicted plunge in the price of oil. 
"At the start of every year, it’s worth repeating that the future is unpredictable. 
"The greatest danger this year is thinking — and then acting on, or taking the advice of those ‘experts’ — as if it’s less unpredictable. 
"In fact it’s probably more unpredictable than normal; and we are going to get a taste of that at the Reserve Bank’s meeting on Tuesday week.
"The RBA spent all of last year defying, first, confident calls that it was going to hike; and then demands that in fact it slash rates.
"It left rates, sensibly, calmly, unchanged.
"Now there’s absolutely no chance of a rate hike.
"The question is whether it signals it might cut; while a really low inflation number would put a rate cut smack on the table.
"What is absolutely certain is that the key language in RBA governor Glenn Stevens’s post-meeting statement will change.
"That would obviously be the case if he’s announcing a 25-point cut, but it would change to “signalling a future cut” even in the now unlikely case the rate was left unchanged," McCrann advised his readers.
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Terry McCrann says February RBA rate cut almost certain

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Another quarter or half percent interest rate cut won't make the property market hotter, John Symond thinks.
The founder of Aussie Home Loans noted parts of the real estate market had cooled.
"Certainly the lower rates go the more affordable it is for borrowers, but I think we have rates at the moment where another quarter or half percent rate cut I don't think will push the property market to be hotter."
He envisaged rates would be cut because of the non-housing sector which needs "every bit of help they can get."
But with falling oil prices a boost to mum and dad wallets, Symond reckons the Reserve Bank might wait on the first cut in 2015.
"They might wait a little bit longer to drop than next week," he told Ross Greenwood on 2GB Money News.
"The political situation is not helping the economy," he said.
<a href="/expert-insights/finance/john-symond-expects-five-year-fixed-interest-rates-to-dip-to-4-75">Late last year</a> John Symond tipped five-year fixed loans were heading to 4.75%.
His comments came before today's CPI data which was was mixed, with a further slowing in headline inflation but some pick up in underlying measures.
Headline inflation printed at 0.2% q/q and 1.7% y/y, the weakest annual rate since Q2 2012.
At the component level, ANZ said the largest downside surprises were for fruit and vegetables, as well as retailing components such as clothing &amp; footwear and household furnishings and audio, visual and computing equipment. 
"Indeed, tradables measures were very weak, confirming our view that global disinflationary trends and weak demand conditions are partially offsetting the impact of pass-through from the weaker currency."
Meanwhile ANZ Banking Group chief executive Mike Smith has suggested the Reserve Bank of Australia should resist calls to cut official interest rates saying he was optimistic about Australia’s outlook – particularly with a falling dollar making exporters more competitive.
“If I was the central bank I would wait and see how this plays out because if the currency can take most of the shock, it’s a much better way to deal with it,” he said in remarks ­published by the bank on its <a href="https://bluenotes.anz.com/posts/2015/01/no-need-for-rate-cuts-mike-smith/" target="_blank">Bluenotes website</a>.
Speaking exclusively to BlueNotes on video, Smith said while plunging commodity prices were having an effect, the declining Australian dollar was mitigating some of the damage. “And of course it does leave you the option of monetary policy later.”
“I still see Australia as relatively well placed. I’m still not too worried by the Australian economy.”
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