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

Joel Robinson

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

Malaysian developer <a href="https://www.apartments.com.au/developers/s-p-setia">SP Setia</a> is the latest to jump into St Leonards booming Transport Oriented Development precinct.

The developer, which has previously delivered Sapphire by the Gardens apartment development in Melbourne, identified the Atchison Street site in 2023. It filed a Scoping Report around 12 months ago, and now has revealed the designs for the new&nbsp;40-storey mixed-use tower.

The State Significant Development Application covers <a href="https://next-portal.urban.com.au/projects/14650/summary">20-22 Atchison Street</a>, a 1,374 sqm site positioned between St Leonards Station and the new Crows Nest Metro station.

Designed by <a href="https://www.apartments.com.au/architects/cox-architecture">COX Architecture</a>, the project would deliver 181 apartments, above a four-storey commercial podium, five basement levels, and new public domain works along Mitchell Street. The apartment mix comprises 35 one-bedroom apartments, 39 one-bedroom-plus-study apartments, 85 two-bedroom apartments, and 22 three-bedroom residences.

The proposal has been lodged as a shop-top housing development under the NSW Government’s TOD planning pathway, which allows increased density around key transport infrastructure. The site sits within the recently rezoned Crows Nest Accelerated TOD Precinct.

<img alt="First look: SP Setia targets St Leonards skyline with 40-storey TOD tower" data-entity-type="file" data-entity-uuid="b799673d-48e2-46b0-801a-0e33a9330100" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/atchinson%20site.png?VersionId=dPh0UfwfaHpbFL1R7H1cbZNbIW0CHbCC" />

SP Setia acquired the Atchison Street site as part of its continued expansion into the Australian apartment market. In comments made to City &amp; Country (The Edge Malaysia) in 2023, SP Setia President and CEO Datuk Choong Kai Wai described the acquisition as “a strategic move” aligned with the group’s post-pandemic market recovery strategy.

“Our target for this exceptional development is local and overseas buyers, including first-home buyers, downsizers and investors,” Choong said.

The tower has been designed as a slender vertical form rising from a mixed-use podium, with COX Architecture positioning the development as a response to the evolving St Leonards and Crows Nest skyline.

“The purpose of the project is to facilitate the delivery of high-quality housing at a strategically located site and deliver a built tower outcome that is consistent with the desired future character of St Leonards and aligns with the TOD controls,” the design report stated.

<img alt="First look: SP Setia targets St Leonards skyline with 40-storey TOD tower" data-entity-type="file" data-entity-uuid="b1a85eee-76f7-436c-a6da-73ba827b9b13" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/atchinson%20entry.png?VersionId=dA9jHGPMcm.dDbwk4QfxqWiY5bfh3UVt" />

The podium would incorporate retail uses fronting Atchison Street, commercial tenancies, landscaped communal areas, and pedestrian improvements along Mitchell Street. Vehicle access and loading would be consolidated via Atchison Lane.

Residents would have access to more than 665 sqm of communal indoor and outdoor spaces, while the development proposes 96 parking spaces across five basement levels.

The proposal also includes a commitment for 10 per cent of residential floor space to be allocated toward affordable housing through a monetary contribution.

COX said the tower form responds directly to the emerging high-density character of the precinct while seeking to maximise solar access, cross ventilation, and outlook from apartments.

<img alt="First look: SP Setia targets St Leonards skyline with 40-storey TOD tower" data-entity-type="file" data-entity-uuid="2163f85c-f63b-4be3-aafa-f8763976cec5" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Article%20Feature%20Image%20%28Grid%29_5.png?VersionId=WiAmtIKJ6.ZQ41EtYEQ1fol7AeorKBlL" />

“The building is orientated towards north,” the Apartment Design Guide compliance report noted, adding that the tower’s slim form was driven by the constrained inner-urban site dimensions.

The design also incorporates landscaped setbacks and communal open space at podium level, intended to soften the interface with surrounding streets and improve pedestrian amenity.

The project adds to a growing wave of redevelopment proposals reshaping St Leonards and Crows Nest following the opening of the Sydney Metro City line and the NSW Government’s push for higher-density housing around major transport nodes.

Last week Stockland filed plans just down the road. They want to build a <a href="https://www.apartments.com.au/new-apartments/601-pacific-highway-st-leonards-nsw-2065">52-storey tower on Pacific Highway</a>.

Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/first-look-stockland-plans-52-storey-538-apartment-st-leonards-tower">First look: Stockland plans 52-storey, 538-apartment St Leonards tower&nbsp;</a>

First look: SP Setia targets St Leonards skyline with 40-storey TOD tower

<a href="https://www.apartments.com.au/developers/urban-property-group">Urban Property Group</a> has revealed plans for a new mixed-use tower at 10 Dangar Street, Wickham, advancing a proposal that would reshape the southern gateway to Newcastle’s city centre with one of the city’s tallest residential buildings.

The State Significant Development proposal, now on exhibition, seeks approval for a <a href="https://www.apartments.com.au/new-apartments/bowline-10-dangar-street-wickham-nsw-2293">43-storey tower</a> immediately adjacent to the Newcastle Interchange. The project would deliver around 200 apartments, including 42 affordable housing dwellings, alongside 99 co-living units, a 171-room hotel, retail space, and new public domain integrated through the site.

The scheme marks a significant escalation of plans previously approved for the site. Urban Property Group took over the prominent 2,904 sqm parcel, where excavation and demolition had already commenced under an earlier consent for a 14-storey mixed-use development.

<img alt="First look: Urban Property Group unveils Newcastle’s next supertower at Wickham interchange" data-entity-type="file" data-entity-uuid="58a96dd9-407f-4d20-86b4-94e4bfeef74b" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/wickham%20podium.png?VersionId=LGlf08pdFGAZDzvx_CXC4XakHNZRuEE0" />

Designed by <a href="https://www.apartments.com.au/architects/sjb-architects">SJB</a>, the tower has been conceived as a landmark transit-oriented development anchored to the Newcastle Interchange precinct. The proposal includes 245 build-to-sell apartments across a mix of one, two, and three-bedroom residences, as well as two penthouses. Fifteen apartments and one operational unit are earmarked for NDIS housing. The co-living component would add a further 99 units, while the podium would accommodate retail uses and hotel facilities.

SJB said the site presents “a valuable opportunity to anchor the precinct by setting the standard for design, active ground planes and character at the key southern gateway.”

The architecture responds directly to the site’s position beside major transport infrastructure and within one of Newcastle’s fastest-evolving urban renewal precincts. The tower form sits above a sculpted podium designed to frame new public spaces, including a through-site pedestrian link connecting Station Street to Hannell Street, landscaped plazas, and activated retail edges.

<img alt="First look: Urban Property Group unveils Newcastle’s next supertower at Wickham interchange" data-entity-type="file" data-entity-uuid="a7bd6ff0-f7db-4ce8-a6dc-ea56e72c6149" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/wickham%20lanne.png?VersionId=xzf39VADyhj7zBQY2I9fx9vI62u2tuSb" />

The design report describes the project as part of the broader transition of Wickham into “a vibrant, high-quality mixed-use urban precinct” that leverages proximity to the station, open space, and regional connectivity.

A detailed public art strategy has also been prepared for the development. The strategy positions the project as “a transit-oriented development of state significance at the gateway to Newcastle’s city centre” and outlines a series of integrated artworks responding to Newcastle’s industrial and transport heritage.

Creative Road’s curatorial framework for the project, titled Unveil, draws on “stratified surfaces, carved volumes, and light-filled apertures” while referencing Newcastle’s transformation from an industrial city into a contemporary education and technology hub.

<img alt="First look: Urban Property Group unveils Newcastle’s next supertower at Wickham interchange" data-entity-type="file" data-entity-uuid="77a882bb-14b1-4d28-99ff-9438e39508c0" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/wickham%20site.png?VersionId=cevgo_vN0eKPK78P8YcEu3mKPLkpFqE7" />

The proposal is being advanced through the NSW Housing Delivery Authority pathway after being declared State Significant Development in June 2025. The accompanying scoping report states the development aims to “maximise the site’s proximity to the Newcastle Interchange by delivering transit-oriented development” while increasing housing supply and affordable housing provision within the Newcastle LGA.

Urban Property Group’s plans align with the long-term strategic vision established under the Wickham Master Plan, which identified the interchange precinct as suitable for substantial uplift in height and density. The current proposal would significantly intensify that vision, positioning the tower among the tallest developments proposed for Newcastle.

The site sits immediately north of the Newcastle Interchange, bounded by Dangar Street, Hannell Street, and Charles Street. It is surrounded by a rapidly growing cluster of residential towers and mixed-use projects that have emerged following the completion of the light rail and transport interchange.

First look: Urban Property Group unveils Newcastle’s latest tower at Wickham interchange

Bottega House has completed settlement of a landmark riverfront site in Macquarie Street, St Lucia, representing its first major Brisbane development.&nbsp;

Positioned on the banks of the Brisbane River, the <a href="https://www.apartments.com.au/new-apartments/180-macquarie-street-st-lucia-qld-4067">premium site at 180 Macquarie Street</a> features uninterrupted river frontage in one of Brisbane’s most tightly held residential precincts.&nbsp;

The proposed development, currently under assessment with Brisbane City Council, has been designed by <a href="https://www.apartments.com.au/architects/plus-studio">Plus Studio</a> with interiors by <a href="https://www.apartments.com.au/interior-designers/mim-design">Mim Design</a> and will deliver a boutique collection of premium residences positioned specifically for owner occupiers and downsizers.&nbsp;

The residences are set to redefine luxury apartment living in the area, with a focus on architectural quality, refined finishes, landscape integration and elevated amenities including curated wellness facilities, resort-style pools and recreation spaces rarely seen in the local market.&nbsp;

Exclusive sales for the project will be led by Keenan &amp; Byrne, ahead of an anticipated launch later this year.&nbsp;

Bottega House Managing Director Nick Malloch said the project reflects the group’s ambition to deliver a highly curated residential offering within one of Brisbane’s most tightly held precincts.&nbsp;

“This is an incredibly rare riverfront opportunity and one we have approached with a long-term perspective,” Malloch said.&nbsp;

“Our vision from the outset was to create a boutique collection of residences that feel more like private homes than traditional apartments, with generous proportions, refined finishes and exceptional amenity throughout."

Malloch says there is a&nbsp;lack of premium owner-occupier stock of this quality in the market, particularly for downsizers wanting space, privacy and a true lifestyle offering without compromise.&nbsp;

"Demand is expected to be strong given the scarcity of premium riverfront opportunities of this nature within Brisbane’s inner-west."&nbsp;

Bottega House secures landmark riverfront site in St Lucia 

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The arrival of the first piling rig officially marks the commencement of construction at SIERA’s new beachside apartment development, Exhale, in Northcliffe.

<a href="https://www.apartments.com.au/new-apartments/exhale-surfers-paradise-8-enderley-avenue-surfers-paradise-qld-4217">Exhale</a>, a glass-encased tower featuring 54 large-scale apartments at 8 Enderley Avenue, is SIERA’s third Gold Coast development. It follows the recently completed PIPIS Bilinga beachfront project, which achieved suburb-record prices, and the soon-to-be-completed Chevron Island development, Tapestry.

[smartcode_project:default project_id=112661 project_image_fid=359603]

<a href="https://www.apartments.com.au/developers/siera">SIERA</a> Founder and Managing Director Brent Thompson said the arrival of the piling rig represented a significant milestone for the development, which is scheduled for completion in late 2028.

Over the next month, around 260 piles are expected to be installed as work progresses on the basement structure. The building is anticipated to rise above ground level early next year, before unveiling its sculptural glass curtain wall, developed in collaboration with specialist façade engineers.

“The façade was designed to maximise panoramic coastal views while creating a distinctive architectural identity,” Thompson said.

[smartcode_project:default project_id=112661 project_image_fid=355935]

Designed by BDA Architecture, Exhale will comprise just 54 two- and three-bedroom residences across 26 levels, a level of low-density living rarely delivered in this beachside pocket between Surfers Paradise and Broadbeach.

The project has been conceived as a resident-only building, with no short-stay accommodation permitted. SIERA says the model is intended to appeal to long-term owner-occupiers rather than transient holiday demand.

[smartcode_project:default project_id=112661 project_image_fid=361052]

Residences have been designed with large-format layouts and expansive glazing, with most apartments featuring more than 30 metres of glass frontage to maximise natural light and ocean views.

The amenity offering spans two levels and centres on wellness and lifestyle, including a heated magnesium pool, sauna, yoga and Pilates studio, gymnasium, private dining facilities, cinema lounge, and dedicated surfcraft storage.

[smartcode_project:default project_id=112661 project_image_fid=359607]

More than half of the apartments have already sold. SIERA has also opened a sales gallery for Exhale at its Chevron Island commercial premises, near its Tapestry tower and the site of its second Chevron Island apartment development, which is slated to launch in early 2027.
</section>
</section>

[smartcode_project_cta:default project_id=112661]

SIERA kicks off construction at Northcliffe tower Exhale

National Australia Bank (NAB) has brought forward the timing of the first RBA cash rate cut by three months.

NAB is now expecting a cut in February, in line with ANZ and Westpac, having initially thought a cut wouldn't come until May.

Commonwealth Bank, the nation's largest lender, still thinks the first cut will come in December.

NAB changed its call following the August monthly inflation figures that were released at the end of September, showing it had dropped to 2.7 per cent.

"The risk has been skewed to a first cut earlier in 2025, and today’s change acknowledges the balance of risks has likely shifted sufficiently for the RBA to feel comfortable cutting a little sooner than we earlier expected," NAB noted in its latest update.

They added that the cadence of the cuts may be faster than its central profile.

"Domestic inflation pressures are cooling, but only gradually, and we continue to expect the conditions for a cut will not be in place this year.

NAB believes the easing cycle will end at 3.1 per cent by early 2026, which is five cuts from the current 4.35 per cent cash rate.&nbsp;

CBA also thinks 3.1 per cent will mark the end of the cutting cycle, while Westpac is forecasting 3.35 per cent, and ANZ is the most pessimistic at 3.6 per cent, which would be just three interest rate cuts.

<h2>What would a rate cut in February look like for borrowers?</h2>

According to&nbsp;<a data-saferedirecturl="https://www.google.com/url?q=https://link.mediaoutreach.meltwater.com/ls/click?upn%3Du001.IVvjJ-2BPT0A8C3VxtqKc6e3bj5hBuw27WFEYqovsYs7kPsgFulYrdOzeP8gI7CybJOya3_RgrM7qq-2BfK-2FtAHeRBLv5Qrb-2Bii5fzjLeKcP4w-2FkNgJPXygpiRhVUan3WV3QEggcf617UC8Z60RjQJZAqx7PiO7FtVJQSn0D46Zc3iTVP0kAhTTzG51cPpa5hrqz1OkSA-2BiXAxUajQ686MTtiseWBIdMdknd83aB7cOVgXlVTeHCGf3-2BcMHwfvI8TYlkUovqEhn4dj0KXf2eJGpb9-2BBv20hPXdLlPP9yD7DvFFDBM5yrTqxvcCiMfAsW1onD-2FcriL628eYdhNQE7bwzYrxcOYnmaYfRhGl-2FEHQ6eK2uQcLxs6Cbu6Dx0bYvpi5A6enmxMWU5TkcRYrP6Z8GbXZYtc5qSoKu6eWFBQR9K7fsjXwHMmby3D3X6Yx-2BxcDcdRruTG&amp;source=gmail&amp;ust=1727774368149000&amp;usg=AOvVaw2vK2ujS77CHs9VRvSSXzLC" href="https://link.mediaoutreach.meltwater.com/ls/click?upn=u001.IVvjJ-2BPT0A8C3VxtqKc6e3bj5hBuw27WFEYqovsYs7kPsgFulYrdOzeP8gI7CybJOya3_RgrM7qq-2BfK-2FtAHeRBLv5Qrb-2Bii5fzjLeKcP4w-2FkNgJPXygpiRhVUan3WV3QEggcf617UC8Z60RjQJZAqx7PiO7FtVJQSn0D46Zc3iTVP0kAhTTzG51cPpa5hrqz1OkSA-2BiXAxUajQ686MTtiseWBIdMdknd83aB7cOVgXlVTeHCGf3-2BcMHwfvI8TYlkUovqEhn4dj0KXf2eJGpb9-2BBv20hPXdLlPP9yD7DvFFDBM5yrTqxvcCiMfAsW1onD-2FcriL628eYdhNQE7bwzYrxcOYnmaYfRhGl-2FEHQ6eK2uQcLxs6Cbu6Dx0bYvpi5A6enmxMWU5TkcRYrP6Z8GbXZYtc5qSoKu6eWFBQR9K7fsjXwHMmby3D3X6Yx-2BxcDcdRruTG" target="_blank">Canstar</a>, if there is a cut in February, a borrower with a $600,000 loan today and 25 years remaining would see their monthly repayments drop by $92.&nbsp;

<table border="1" cellpadding="0" cellspacing="0">
	<tbody>
		<tr>
			<td colspan="3">
			Impact of 0.25% pt cut in February 2025
			</td>
		</tr>
		<tr>
			<td>
			Current loan size
			</td>
			<td>
			Drop in monthly repayment
			</td>
			<td>
			New monthly repayment
			</td>
		</tr>
		<tr>
			<td>
			$600,000
			</td>
			<td>
			-$92
			</td>
			<td>
			$3,907
			</td>
		</tr>
		<tr>
			<td>
			$750,000
			</td>
			<td>
			-$114
			</td>
			<td>
			$4,884
			</td>
		</tr>
		<tr>
			<td>
			$1M
			</td>
			<td>
			-$153
			</td>
			<td>
			$6,512
			</td>
		</tr>
		<tr>
			<td colspan="3">
			Source:&nbsp;<a data-saferedirecturl="https://www.google.com/url?q=https://link.mediaoutreach.meltwater.com/ls/click?upn%3Du001.xWMOP9hChsvn-2BC9O-2FebBihXIZ4cEzbiuENdxm-2Bx3-2FYEEgYMhZlKWNj5Zzy1YZ56RuASD_RgrM7qq-2BfK-2FtAHeRBLv5Qrb-2Bii5fzjLeKcP4w-2FkNgJPXygpiRhVUan3WV3QEggcf617UC8Z60RjQJZAqx7PiO7FtVJQSn0D46Zc3iTVP0kAhTTzG51cPpa5hrqz1OkSA-2BiXAxUajQ686MTtiseWBIdMdknd83aB7cOVgXlVTeHCGf3-2BcMHwfvI8TYlkUovqEhn4dj0KXf2eJGpb9-2BBv20v2akwr6-2BqLyRrlEgkJ4J-2BCCyY0x189xEHZA4Ylf8c7ChBqNIkhmftZzoFuZKFn43pw3oJVg2o1gumrpdA-2B7MB-2FBtmL2rFCI-2FXORATQHySCLVOMg7Vywv-2BqnnQUAtDz6XkvpwxdHFXh70VwKazzhJsICilEYOvP4ju0sIfi5g6TL&amp;source=gmail&amp;ust=1727774368149000&amp;usg=AOvVaw2qVnp6oqATgqDUi2Frm22q" href="https://link.mediaoutreach.meltwater.com/ls/click?upn=u001.xWMOP9hChsvn-2BC9O-2FebBihXIZ4cEzbiuENdxm-2Bx3-2FYEEgYMhZlKWNj5Zzy1YZ56RuASD_RgrM7qq-2BfK-2FtAHeRBLv5Qrb-2Bii5fzjLeKcP4w-2FkNgJPXygpiRhVUan3WV3QEggcf617UC8Z60RjQJZAqx7PiO7FtVJQSn0D46Zc3iTVP0kAhTTzG51cPpa5hrqz1OkSA-2BiXAxUajQ686MTtiseWBIdMdknd83aB7cOVgXlVTeHCGf3-2BcMHwfvI8TYlkUovqEhn4dj0KXf2eJGpb9-2BBv20v2akwr6-2BqLyRrlEgkJ4J-2BCCyY0x189xEHZA4Ylf8c7ChBqNIkhmftZzoFuZKFn43pw3oJVg2o1gumrpdA-2B7MB-2FBtmL2rFCI-2FXORATQHySCLVOMg7Vywv-2BqnnQUAtDz6XkvpwxdHFXh70VwKazzhJsICilEYOvP4ju0sIfi5g6TL" target="_blank">www.canstar.com.au</a>. Starting rate is the RBA existing average owner-occupier variable rate of 6.36%. Assumes banks pass the cash rate cut on in full the month after the meeting.
			</td>
		</tr>
	</tbody>
</table>

Canstar Data Insights Director, Sally Tindall, says if core inflation continues to track in the right direction, or unemployment starts to accelerate significantly, we could well see a cash rate cut as early as February of next year.

“All four big banks now believe the RBA will be ready to cut the cash rate in just over four months’ time, if not before, in the case of CBA.

“However, the outlook for both inflation and unemployment is still highly uncertain. A couple of wobbly sets of inflation data could see the RBA holding for longer, particularly if unemployment remains relatively steady."

&nbsp;

Commonwealth Bank, the nation's largest lender, still thinks the first cut will come in December.

NAB bring forward first RBA cut to February 2025

<html><body>
The Reserve Bank has been giving a rolling seminar on why economists don’t get real estate.
This has taken the form of speeches by the Guv, Glenn Stevens, and press releases on RBA research and opinions.
The RBA view of residential real estate is a bible for economists, containing various commandments with which most economists comply. They include:
<ul>
<li>There is just one property market in Australia;</li>
<li>Sydney is Australia;</li>
<li>Australians are naughty because they like to invest in real estate;</li>
<li>They’re even naughtier when they borrow to do it;</li>
<li>When property prices rise we’re all very naughty and deserve a smack;</li>
<li>We’re all stupid because we think property prices always rise;</li>
<li>Buying a home is, or should be, a financial decision and emotion or culture shouldn’t intrude;</li>
<li>Financially it’s smarter to rent so how come we all don’t want to rent; and</li>
<li>We’re not building enough houses because that’s what our charts say.</li>
</ul>
Stevens has been getting out and about delivering his core message, which I suspect he lifted from the pages of Real Estate for Dummies. This is - wait for it, drum roll please -“property prices don’t always go up”!
Many media outlets have breathlessly reported that Stevens “has warned home buyers that people should not assume that prices always rise”. Just in case we haven’t got it, he drives home the message with this thunderbolt of wisdom: “Sometimes they fall!”
This is why Stevens earns the big money. He understands things the masses do not.
Seriously, is there anyone in Australia above the age of 11 who doesn’t know that property prices sometimes fall? Maybe someone who’s been meditating in a cave in the Himalayas might have missed the general decline in prices from 2010 to 2012. In my experience, most Australians have a hyper awareness of the value of their home, especially when it’s in reverse.
These days we have not only quarterly and monthly price monitors, we have attention-seekers claiming they can chart weekly price changes, even daily. Pretty soon we’ll have minute-by-minute price barometers.
And all these sporadic movements in prices, both up and down, have been reported ad nauseum by a gullible media.
According to some sources, prices have dropped three times in the past six or seven months.
Why does Stevens think none of us have noticed? He has intoned the “prices don’t always rise” sermon several times recently. Obviously he doesn’t get the emails I get, from people who bought five years ago on the Gold Coast and watched their investment steadily decline in value. Or from people who own Noosa apartments. Or from people who bought during the Gladstone boom and are now dismayed at the drop in values. Or from those who own real estate in Mackay, Moranbah, the Hunter Valley, Port Hedland, Karratha and Broome.
Or people who own a home in Canberra, where values in some areas are now going south.
Another offering of economist-centric advice from the RBA is that we might all be better off renting than investing. According to an RBA research paper, it’s only if prices rise 2.9% or more annually that it may be worth owning your home.
I wonder why they bothered with this research. Nothing better to do? It’s only when you understand that this is the work of economists that it makes any sort of sense.
This really is at the heart of why economists struggle to understand real estate. They think it’s about economics. They get a tad vexed when it doesn’t behave.
Most households don’t give a damn whether home ownership makes economic sense or not. It’s not about economics. It’s about culture. It’s about how they want to live.
According to the logic of the RBA research, unless values are rising around 3% a year on average it’s not worth owning. On this basis, nobody should own a home in Sydney, because it’s capital growth rate over 10 years has barely managed that level. How have so many people got it so wrong?
The RBA paper speculates that price growth in the future will be less than in the recent past, in which case we ‘d all be better off financially if we rented.
One question: price growth where? Everywhere in Australia? Price growth everywhere will be too low to justify home ownership?
This brings us back to one of my original points - that one of the great weaknesses of the RBA and economists generally is that they see Australia as one homogeneous market. That’s why they’ve looked at the national average price growth figure - not for Australia, mind you, but for the eight capital cities - and concluded that because the city average is 10% Australia has been having a real estate boom, oblivious to the reality - that only one city has had growth that big.
They really don’t get it.
You can contact Terry via <a href="https://mailto:ryder@hotspotting.com.au" target="_blank">email</a> or on <a href="https://www.twitter.com/hotspotting" target="_blank">Twitter</a>.
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terryryder-YECXbqmri2

The RBA just doesn't get the housing market

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No doubt as property investors you’re currently preparing your tax return now that the financial year has come to a close.
It is the perfect time to consider a depreciation schedule and how it works into your cash flow.
While, increasingly, savvy investors are aware of depreciation and the benefits of it, many have still not attained the highest level of savings property, explains BMT Tax Depreciation managing director Brad Beer.
“The average tax depreciation schedule saves an investor $10,100 in the first full financial year and $73,500 over 10 years of ownership, however recent research we conducted revealed that 80% of property investors may not be maximising the depreciation deductions available to them,” said Beer.
“With so many new property investors in the market, it’s as important as ever for Australians to familiarise themselves with tax depreciation schedules.”
Essentially, as buildings and its fixtures get older they decrease in value and they wear out. Tax depreciation schedules allow you to claim for this.
“Specialist quantity surveyors are able to make a comprehensive assessment of all the depreciable assets, not just the more frequently-claimed items such as carpet, hot water systems and light fittings,” he said.
“Less obvious items such as garbage bins, mechanical exhausts and door closers may seem insignificant by themselves, however cumulatively can make a significant difference to the cash flow generated by an investment property.”
Two years of “back claiming” can also be organized if investors haven’t yet claimed since purchase.
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jduke-EHk3XBmHkn

How to use depreciation to assist your cash flow: BMT

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The Reserve Bank of Australia’s meeting minutes for the July monetary policy meeting that saw the interest rate held at 2.5% has made particular note of the increase in dwelling investment.
Pointing to the noticeable increase in the March quarter, and mentioning that over the six months to March investment levels are running close to the fastest pace seen in a decade, it doesn’t appear that the RBA is as yet concerned.
"Dwelling investment increased noticeably in the March quarter and, over the six months to March, was running at close to the fastest pace seen in around a decade," the minutes explained.
“Residential building approvals had declined somewhat in recent months, but they remained at relatively high levels and both work yet to be done and loan approvals for new dwellings pointed to further strong growth in dwelling investment in coming quarters.
“At the same time, there had been signs of a tempering in conditions in the established housing market.
Members were said to have particularly observed that looking past the monthly volatility, housing price inflation was recorded as slowing in recent months, auction clearance rates had fallen from their last year highs and loan approvals were little changed over the past six months.
Overall, they noted that GDP growth was above trend in the March quarter, and resource exports were expected to expand in coming quarters, even if not at such a rapid pace as previously.
A gradual improvement in the non-resource sector, and growth in residential construction was a prospect, “despite some easing of conditions in the established housing market over recent months”.
The exchange rate was also noted as high when compared to historical rates, and therefore offering less assistance in achieving economic growth than might be otherwise expected.
It appears the factors they will are now keeping under close watch is the extent to which the low interest rates offset the decline in mining investment that is anticipated, and the effect of planned fiscal consolidation.
A period of interest rate stability was noted as the most prudent course given current indications.
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Dwelling investment close to fastest pace seen in a decade: RBA meeting minutes

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While current market pricing points to around a 50% chance of further easing by the end of the year, ANZ modelling puts the prospect at less than 10% chance of occurring. 
"The results of our probit model are consistent with ANZ’s view of how the economy is evolving and suggests that the market is too complacent about prospects of monetary policy nominalisation," the report by ANZ Research economists Dylan Eades, Savita Singh, and Felicity Emmett said.
The bank said while momentum in the domestic economy has softened recently, most indicators are continuing to point to a gradual improvement in the non-mining sectors of the economy. 
"As such, we continue to expect the RBA to be on hold for some time, before commencing a gradual hiking cycle in early 2015. 
"While we think that the hurdle for further rate cuts is high, we remain cognisant that a number of risks remain that could push out the start of the RBA’s tightening cycle.
"Indeed, the ongoing strength in the Australian dollar combined with a moderation in domestic dataflow suggests that the risks, at this stage, are tilted towards a slightly later start to the tightening cycle, rather than the risk being that the next move in rates is down."
After testing a number of indicators, ANZ found that the indicators which had the best power to predict a cut in the cash rate were:
<ul>
<li>
The NAB business survey’s index of profitability (with a five month lag),
</li>
<li>Three-month ended growth in retail sales (with a six month lag),</li>
<li>The level of building approvals (with a six month lag),</li>
<li>
A subseries in Westpac-Melbourne-Institute’s consumer confidence survey that is more correlated with household consumption growth, ‘family finances compared to a year ago’ (with a five month lag),
</li>
<li>The spread between the Australian 10-year bond yield and 90-day bank bill (with a six month lag), and</li>
<li>The level of the cash rate</li>
</ul>
 
 
 
 
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jchancellor-FAypfDUnLy

Forget 50/50: Rate cut prospect less than 10%: ANZ

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Reverse mortgages could become more popular as cash-poor home owners begin to retire and need extra money to fund major expenses such as positions in aged care facilities, according to Deloitte and the Senior Australian Equity Release Association (SEQUAL).
The take-up rate for reverse mortgages in Australia is very low, said Deloitte partner financial services James Hickey, who authored this year’s Deloitte annual Reverse Mortgages Report.
There are around 40,000 reverse mortgages outstanding in Australia now, representing only about 1% to 2% of retiree households, the report found.
“It’s interesting to think about why that may be, and in our view it’s the lack of awareness, the lack of understanding and the lack of support to discuss home equity release with retirees,” Hickey said.
Reverse mortgages were starting to gain popularity around 2005 to 2007 but the products suffered reputational damage when consumer groups came out with warnings that mortgage brokers had been pushing the elderly to take larger loans than they needed.
Several major lenders withdrew from the market when money markets froze during the financial crisis and it became difficult to source funds to back the mortgages.
Only $404 million of new reverse mortgage borrowings were approved in 2013, down from $714 million in 2006.
 <img src="/images/2014/07/14/del-july-14-one.gif" alt="">
Source: Deloitte Reverse Mortgage Report, 2014
The major providers of the loans still in the market are Commonwealth Bank of Australia, Bank West and St George. Macquarie Bank relaunched its offering to the market in March.
Last year, the products were included under the National Consumer Credit Protection Act and all of the providers in the market are members of SEQUAL and are bound by its code of conduct.
Hickey said most people have around two thirds of their wealth locked up as equity in their homes when they retire but few think to access the capital to meet their spending needs.
Deloitte estimates that about half of the people who take out a reverse mortgage use the proceeds for regular income. About one third use the money to repay debt, such as a prime mortgage if they are retiring with an outstanding debt.
“It’s a very powerful mechanism to allow the retiree to maximise their cash flow in retirement if they are going into retirement with debt,” Hickey said.
Deloitte estimates about one in seven use the money for home improvements. Other common uses include buying a new car and taking a holiday.
SEQUAL executive chairman John Thomas said most retirees were conservative with their borrowings through reverse mortgages.
“We find with seniors they take what they need not what they can borrow,” Thomas said.
The average settlement amount was $71,000.
New reverse mortgages are only available to people aged over 65 years. The maximum loan to value ratios offered to 65 year olds is between 15% and 20% of the value of the home. The maximum LVR offered increases according to the borrower’s age. An 80 year old would be able to access more than 25% of the value of their property.
Hickey said lenders used actuarial models to determine the maximum LVR they would offer to people at each age. The maximums were low because there was no requirement for borrowers to repay the debt until they sold the property or passed away.
The lenders also provide a “no negative equity guarantee”.
“The lender wears all the risk ... If the value of the house should be less than the mortgage debt they cannot ask the borrower, estate or beneficiaries for any more money than the value of the home,” Hickey said.
While there is no requirement for people who take out a reverse mortgage to repay the loan until they die or sell the property, Deloitte’s research suggests that people typically repaid the loan in full after around seven or eight years.
A larger number of people repaid the loans in 2013 compared with previous years ($504 million discharges compared with $350 million in 2012).
Hickey said anecdotal evidence suggested that retirees with reverse mortgages had taken advantage of capital growth in the property market to sell their home at a profit and repay the loan. 
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zfielding-GvX3Uq9KTa

Reverse mortgages could become more popular: Deloitte

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Reserve Bank of Australia research has suggested that house prices would have to continue to rise at the same rate as over the last six decades for property owners to be as well off financially as renters.
Home ownership is more attractive the longer a house is owned, because transactions costs are amortised over a longer period, it concluded.
Assuming real house prices increased at the historical 2.4%, after inflation, buying beats renting when the owner held for more than eight years.
But with the 1.7% rate, after inflation, experienced over just the past 10 years, owning only beat renting over an ownership period longer than 30 years.
“Consistent with conventional wisdom, households expecting to move again in a few years’ time are better off renting, unless they believe they can sell the property for an unusually large capital gain,” the 45 page research paper said.
"We find that if real house prices grow at their historical average pace, then owning a home is about as expensive as renting.
"If prices grow more slowly, as some forecasters predict, the framework used in this paper suggests that the average home buyer would be financially better off renting.
"We decompose house prices into contributions from rents, interest rates and expected capital gains, which may help policy makers in the detection of housing bubbles.
"Recent data do not show signs of a bubble," the RBA researchers Ryan Fox and Peter Tulip suggested.
Given that individual circumstances vary, the paper noted that no-one should base personal investment decisions solely on the estimates. 
The key limitation within the paper, the RBA noted was that it focused on owner-occupied purchases, as investors in housing may be better off because of tax reasons.
The RBA also noted non-financial benefits such as security of tenure, pride of ownership and freedom to renovate.
Real house prices have increased at an average annual rate of slightly less than 21⁄2 per cent since 1955.
"If this rate of appreciation is expected to continue then our estimates suggest that houses are fairly valued.
"Forecasting house price growth is subject to considerable uncertainty.
"That said, many observers have suggested that future house price growth is likely to be somewhat less than this historic average.
"In that case, at current prices, rents, interest rates and so on, the average household is probably financially better off renting than buying."
It noted overfall prices were overvalued in the early 2000s, becoming undervalued in the second half of the decade, then switching back to overvalued following the global financial crisis. 
The discussion paper series is intended to make the results of the current economic research within the Reserve Bank available to other economists. Its aim is to present preliminary results of research so as to encourage discussion and comment. 
The views expressed are those of the authors and not necessarily those of the Reserve Bank. 
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No property bubble, but RBA pinpoints the possible future wisdom in renting

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ACT real estate agent Mark Blinksell, ex-director of Grapevine Property &amp; Business, has been fined $10,000 after using a client’s deposit from a trust fund to pay down his own mortgage.
In February, <a href="/news/act/canberra-agent-s-license-cancelled-after-taking-trust-money-to-fund-home-loan">Property Observer reported that Blinksell had his license cancelled for five years</a> and had been disqualified for applying for a real estate of business salesperson’s registration for three years after he was found guilty of engaging in dishonest conduct by misapplying deposit monies received in 2013.
The deposit funds, that had been received around 7 January, 2013, in his role as vendor’s agent, were effectively stolen. He subsequently misrepresented and lied about where the funds were. He had been engaged by the vendor in October 2012, and received $22,000 in a deposit cheque from the buyers in the January.
Blinksell was given a six-month suspended jail sentence and a three year good behaviour bond. He had paid back the money with interest.
ACT Commissioner for Fair Trading Brett Phillips said that the ACT government takes real estate agents’ breaches of the law seriously.
"Real estate agents regularly handle large sums of money for their clients, and it is vital that they understand the gravity of such a responsibility," said Phillips.
Blinksell had operated Grapevine since 2009. He previously held positions at Mirvac and Capital Property Trust.
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Agent fined for using client’s deposit to pay off own mortgage

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An ASIC investigation found that Shashi Kanta Prasad of Chipping Norton, New South Wales, had created false loan documents for seven clients to achieve loans totalling more than $3.6 million.
She pleaded guilty in the Downing Centre Local Court to making seven false statements, producing 41 fake documents and using those documents to obtain a financial advantage for her employer in the form of commissions.
She was employed by <a href="https://www.rajprasad.com.au/contact" target="_blank">Raj Prasad &amp; Co Pty Ltd</a>, trading as <a href="https://www.platinumaccountants.com.au/" target="_blank">Premium Financial &amp; Retirement Solutions</a>.
She faces a maximum imprisonment of five years for one offence of obtaining a financial advantage by false or misleading statements, a maximum penalty of five years for one offence of intention to defraud by false or misleading statement, a 10 year maximum penalty for one offence of using false instruments, and  a maximum penalty of 10 years for one offence of using false documents.
The Commonwealth Director of Public Prosecutions is prosecuting the case, with sentencing at the Sydney District Court on 18 July 2014.
A previous July 2012 MFAA notice said: "The MFAA Tribunal has expelled Mrs Shashi Prasad from MFAA membership on the basis that she engaged in, or was vicariously liable for conduct of a misleading, deceptive, dishonest or fraudulent nature. The Tribunal had before it four allegations of such conduct."
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Financial advisor found guilty of $3.6 million of loan fraud

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Yellow Brick Road has announced that it will acquire the non-bank lender RESI Mortgage.
YBR will pay $36 million for the business, $28 million in cash, $5.5 million in shares and $2.5 million in deferred cash payments.
RESI foundation shareholder Peter James said it represented a "sound strategic move for the RESI business".
The Resi business would remain a separate brand and maintain its current management structure, with Angelo Malizis as the RESI CEO.
YBR executive chairman Mark Bouris said the acquisition of the 30-year old company would enhance YBR's national presence.
The company also announced that it had secured $42.05 million of commitments in a raising placement to existing shareholders and institutional clients of Bell Potter.
Existing shareholders Macquarie Bank and Nine Entertainment subsidiary subscribed to $12 million each in the placement while other institutional investors took the remaining $18.5 million.
YPR said the funds will be used to pay for the cash considerations of the Resi acquisition and also the recent Vow acquisition.
“We welcome the Resi franchisees, management and staff to the YBR group and look forward to leveraging our marketing platforms to significantly increase Resi’s lead flow as part of our combined group,” Bouris said. “The complementary skills and relative strengths of the YBR, Vow and Resi brands and businesses will combine to provide Resi franchisees, YBR branch licensees and Vow brokers with unparalleled opportunities to build revenues and market position as we progress our strategy to be a leader in the “non-bank” sector,” he said.
Bouris has extended his consultancy agreement with YBR for another four years until 2019.
The acquisition of Resi remains subject to a general meeting of YBR shareholders expected to be convened for late August 2014.
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Mark Bouris at the helm until 2019, as expansionary Yellow Brick Road acquires RESI Mortgage

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GUEST OBSERVATION
Heightened competition among home lenders has prompted the banking regulator to issue a reminder of what constitutes prudent lending, but its suggestion that loans being generated by mortgage brokers should come in for scrutiny has not gone down well in some quarters.
The Australian Prudential Regulation Authority (APRA) released a draft prudential practice guide on residential mortgage lending in May, with <a href="https://www.apra.gov.au/mediareleases/pages/14_11.aspx" target="_blank">retiring chairman John Laker</a> saying that “in this environment, APRA is seeing increasing evidence of lending with higher risk characteristics and it does not want this trend to continue”.
Residential mortgages constitute the largest credit exposure in the Australian banking system and APRA has made it clear it wants to ensure prudential lending standards are maintained.
Lending standards apply to the loan origination process, the risk appraisal of the borrower and to the style of mortgage product – including standard mortgage loans, <a href="https://theconversation.com/reverse-mortgages-need-a-rethink-if-theyre-the-new-age-pension-26433" target="_blank">reverse mortgages</a>, home equity lines of credit and interest-only loans. APRA’s draft – which is still the subject of consultation – also provides guidance on hardship loans, “stress-testing” of loan exposures and on mortgage insurance.
The draft has triggered controversy among mortgage brokers, however, because the guidelines encourage banks to scrutinise loans that are originated by brokers. The Mortgage and Finance Association of Australia has questioned whether broker-originated loans are more risky than bank-originated ones.
Mortgage brokers generally assess the financial situation of borrowers, recommend mortgage loan products and lenders, and then manage the application process. It is common in Australia for banks to pay mortgage brokers upfront or ongoing fees for this “origination” of a loan.
Their remuneration is generally tied to the loan amount and is payable by the bank to the broker either upfront or over time. As a result, there could be an incentive for brokers to advise consumers to borrow a higher amount than they might need. Another common practice is for borrowers to be directed to interest-only loans, to be used in combination with a mortgage offset account.
As well as new loans, brokers also help consumers refinance existing mortgages often to purchase additional property. In this process, houses are revalued and consumers can take the opportunity to reduce their equity in a property – in effect, withdrawing cash.
Lenders are happy to originate loans at loan-to-value ratios of 80%, which implies equity funding of 20%. The risk of a mortgage loan decreases over time as the borrower builds up equity. Interest-only loans and loans made with the intention to cash out equity maintain the risk to the lending bank at a high level.
The recent global financial crisis has shown that real estate values and home loan defaults are closely related. Economic downturns can trigger house price devaluations and cause mortgage defaults.
Australian house prices have grown by double-digit percentages in recent years, and some people argue the property market is ripe for a correction. Some home owners would face negative equity if double-digit decreases were to occur and could have incentives to default on their loans. Such a scenario was realised in the US during the GFC, when there was a dramatic increase in default rates.
But the interests of brokers and banks are not necessarily aligned when it comes to the consideration of borrower risk. A broker may have a low incentive to consider risk if they are paid regardless of what happens to the loan in the future.
APRA says that “experience has shown that commissions paid upfront tend to encourage less rigorous attention to loan application quality”. Trailing commissions, which are paid over time, are on the other hand more likely to provide incentives for brokers to retain and monitor customers, it says.
APRA wants to encourage banks to link broker remuneration to mortgage delinquency risk.
There is limited academic research on the issue of whether broker-originated loans are more risky, partly because of the difficulty of accessing this information.
<a href="https://www.mitpressjournals.org/doi/pdf/10.1162/REST_a_00387" target="_blank">The research that is available</a> does confirm that broker-originated loans are more risky, but it also shows that about three-quarters of this additional risk can be explained by observable information such as higher loan to valuation ratios or lower credit scores.
In response, banks could charge higher risk borrowers an increased mortgage rate, or alternatively, reduce the remuneration it is prepared to pay the broker originating the higher risk loan.
<blockquote>
An economic shock affecting property prices or borrowers’ ability to repay could cause tremors in Australia’s financial system.
</blockquote>
This research is important because it highlights the need for a bank to include this sort of information on risk into its pricing, provisioning, capital and stress-testing calculations – something APRA aims to encourage with its guidance note. It is reasonable to include this cost differential in mortgage pricing and/or broker remuneration.
The current APRA initiative supports the resilience of the Australian financial system and are in line with actions by regulators in other countries, including the US. But more needs to be done.
Australian banks are exposed to mortgages to a larger degree than their international counterparts, with a high allocation to these loans versus other banking products. This means an economic shock affecting property prices or borrowers’ ability to repay could cause tremors in Australia’s financial system. We need to think of creative ways to limit the exposure of Australian lenders to mortgages.
This could occur, for example, by encouraging the internationalisation or diversification of bank assets, something that could be supported by further development of financial market instruments such as covered bonds, derivatives, insurance policies and asset securitisation.
Harry Scheule is associate professor of finance at the <a href="https://www.uts.edu.au/" target="_blank">University of Technology, Sydney</a>. He is a regional director of the Global Association of Risk Professionals. His expertise is in the area of banking, financial risk measurement and management, insurance, mortgages, prudential regulation, securities evaluation and structured finance.
This article was originally published on <a href="https://theconversation.com">The Conversation</a>.
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