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 RBA's head of financial stability Luci Ellis has repeated the view that Australia's central bank won't be introducing ‘‘macroprudential’’ policy restrictions on higher-risk lending in order to preserve financial stability.
Despite limits on loans with high loan-to-valuation ratios being introduced in Canada, Sweden, Norway, Israel, Korea and Hong Kong, Ellis defended the RBA's caution.
‘‘We view macroprudential policy as something to be subsumed into the broader financial stability framework,’’ Ellis said in a speech to the University of Adelaide Economics Department.
“We recognise that quantitative restrictions were already tried in the 1960s and 1970s – and didn’t always work so well.
‘‘The division between ‘microprudential’ supervision, narrowly focused on individual institutions, and system-wide ‘macroprudential’ supervision, never made much sense to us in Australia.’’
Ellis stressed the central bank’s tools for promoting financial stability were the ‘‘telephone’’, a reference to calling APRA and raising concerns, and the ‘‘microphone’’, a reference to the RBA's public comments.
"Exposing and warning of risks can ideally change behaviour, and steer the system away from higher-risk outcomes," she said.
Her speech follows last week’s warning from APRA which unveiled new draft guidelines on how to manage risks in the mortgage market.
Ellis said APRA and the RBA were already well equipped to promote financial stability.
‘‘The rationale for carving out particular bits of the prudential framework under separate governance – which is what people mean nowadays by ‘macroprudential tools’ – appears to be that supervisors cannot be relied on to discharge their duties with system-level concerns in mind,’’ she said.
‘‘That might be true in some countries, but not in Australia and at least some other countries.’’
In framing the objectives of financial stability policy, Luci Ellis noted whenever housing prices boomed people worried that housing has become unaffordable. 
"Of course, if prices are rising, it must be that someone can afford those prices.
"If they are motivated by speculative expectations, though, prices can run ahead of levels that can be sustained in the longer term.
"So there can be a financial stability angle to those concerns, if a future fallout is likely to harm the real economy, either directly or via distress in the financial system.
"But the real policy concern here is that other people get priced out.
"It is fundamentally a question of distribution, particularly intergenerational distribution.
"This is not in the remit of financial stability policy, and the two goals should not be conflated.
"But we should be mindful of this equally legitimate goal of public policy, which is to ensure that everyone can access appropriate shelter that they can reasonably afford.
"Sometimes this goal mutually supports the goal of financial stability.
"But as we saw in the US housing meltdown, if you get the policy response to an affordability issue wrong, the consequences for financial stability can be dire," she outlined.
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RBA shies away from macroprudential housing policies, but microphone at the ready

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The ANZ has been named Home Lender of the Year by Money magazine, for the 13th time in 16 years.
ANZ Australia CEO Philip Chronican said buying a home was "arguably the most important financial decision most people will make during their lifetime," so the bank strives to make the process simpler for customers.
“Since we launched the Banking on Australia program in 2012, we’ve been investing in ways to deliver better outcomes for our customers and we’re very pleased to receive industry recognition of our efforts.
ANZ have had the equal lowest home loan variable interest rate for the past 12 months.
It's internal data suggests its has grown its home loans faster than the market for the past 17 consecutive quarters.
2012 was the twelfth time that the ANZ had been awarded Home Lender of the Year when using the CANNEX star ratings, 1,961 home loans offered by 115 lenders were ranked including variable home loans for residential and investment purposes.
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ANZ's tally goes back to being awarded Home Lender of the Year by AFR Smart Investor magazine in 1999, 2000, 2001, 2002, 2004, and 2005 and then by Money magazine in 2005, 2006, 2007, 2008, 2010 and 2012.
NAB won in 2011.
Money Magazine named Newcastle Permanent its Home Lender of the Year for 2013, the first year that the major banks had been overlooked for the award.
 
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ANZ takes Money magazine's 2014 Home Lender of the Year from Newcastle Permanent

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From the 2014-15 land tax year onwards, the Queensland Land Tax Act 2010 will be amended to provide a new exemption.
It is for land that did not previously receive a home exemption with the owner in the process of selling their old home and moving into a new home, where certain conditions are met. 
The home exemption currently previously only applied to one parcel of land at a land tax liability date.
 However, this limitation resulted in liability where a person is selling their previous home and moving into a new home at the land tax liability date of 30 June. 
The new exemption will mean that an earlier home in the process of being sold, or a new home in the process of being moved into is also exempted, provided that by the next land tax liability date the taxpayer is entitled to the home exemption for the new home, and the taxpayer no longer owns the earlier home.
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Queensland land tax home mover's exemption

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The end of financial year will be upon us in 24 days, and there’s much you should be doing to make the most of it.
Over the next few weeks, Property Observer will attempt to avoid nagging you about timely tax returns, but will provide some tips and advice on how to make the most of this final month.
While you have until 31 October to lodge, your expenses and transactions will only count up until the official end of the financial year – 30 June. The ATO’s <a href="/expert-insights/finance/landlords-tax-deductions-rise-to-38-6-billion-or-23-000-per-tax-return-ato-figures">2010-2011 stats saw the average claimed amount per landlord sitting at $23,000</a> – not something to be sniffed at.
Today’s tip is about working out which expenses you can claim.
In June last year, the <a href="/expert-insights/finance/ato-to-write-to-110-000-rental-property-owners-over-incorrect-rent-deductions">ATO wrote to 110,000 property investors over incorrect rental deductions</a>.
Guess what? They did <a href="/expert-insights/investing/landlords-under-investigation-as-ato-cracks-down">the same thing in 2011, writing to 100,000 property investors </a>about the exact same issue.
You don’t want to be in the ATO’s bad books, so be wary of what you claim ahead of assuming you can.
For instance – that seminar you went to that set you back a few hundred dollars or your ticket to the Home Show, is it deductible? If you don’t know, then you can <a href="/expert-insights/investing/how-much-of-your-property-education-is-actually-tax-deductible">read our article here about the amount of your “property education” that you can actually claim</a>. It’s not as straight forward as you might think.
With the long weekend coming up, it’s time to <a href="/expert-insights/your-weekend-must-do-items-three-things-to-put-on-the-list">sort out your shoebox of receipts and start figuring out what needs to go to the accountant</a>.
For rental properties, here are seven quick rules:
<ol>
<li>Claim straightaway for interests on loans 
</li>
<li>Claim straightaway for depreciating assets 
</li>
<li>Claim straightaway for costs to repair and maintain your rental property 
</li>
<li>Claim straightaway for tenancy costs 
</li>
<li>Claim deductions over a number of years for assets that are part of the property 
</li>
<li>Claim deductions over a number of years for assets on construction costs 
</li>
<li>Claim deductions over a number of years on stamp duty and other fees</li>
</ol>
Source: ATO
Read <a href="/expert-insights/finance/seven-rental-property-deductions-property-investors-are-allowed-to-claim-to-reduce-their-tax-bill">more about these expenses and what you can claim</a>.
Ken Raiss suggests that there are <a href="/expert-insights/finance/nine-tax-tips-for-property-investors">nine things you must know about maximising your tax return</a>. At the top of the list is documentation.
If you’re an industry professional, you can also be useful at tax time. It’s worth reminding your clients about tax depreciation schedules, notes BMT’s managing director Bradley Beer.
“Real estate agents are a critical component in the property-buying process and have a fantastic opportunity, before and after a sale, to enhance their relationships with clients by broadly informing them about how tax depreciation works and the benefits it provides,” said Beer. 
“The result would be a win-win situation for both parties as the buyer maximises his cash flow and the agent strengthens his relationship with the buyer through the process.”
Estimates for deductions are often free ahead of getting an actual schedule undertaken.
USEFUL READING FOR TAX TIME
<a href="/expert-insights/finance/12-tips-for-property-investors-to-reduce-their-tax-bill-ken-raiss">12 tips for property investors to reduce their tax bill</a>: Ken Raiss <a href="/expert-insights/the-top-19-rental-expenses-that-landlords-claim-from-the-ato">The top 19 rental expenses that landlords claim from the ATO</a>: Jonathan Chancellor <a href="/expert-insights/investing/rental-properties-keeping-deductions-working-for-you">Rental properties – keeping deductions working for you</a>: Daniel Deutsch
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End of financial year countdown: Make the most of the next 24 days

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When interest rate change is announced each month, industry members take to the media to share their thoughts on what this means for consumers, home buyers and the property market generally.
If you're looking for <a href="/expert-insights/finance/interest-rates-crash-course-whats-the-relationship-to-the-property-market">a quick crash course in interest rates, and the perspectives around them, then read this article first</a>.
Property Observer has cherry picked some of the industry's <a href="/expert-insights/finance/rba-keeps-interest-rates-on-hold-for-june">responses to the RBA's decision to keep the interest rate on hold in June</a>.
Place Estate Agents CEO -  Damian Hackett (discussing the Brisbane market)
Certainly transactions have been taking place and we are seeing buyers active, but there has also been a bit of negative sentiment lingering in the market.
Keeping interest rates on hold will only strengthen confidence amongst buyers as it improves affordability, and that is the key for activating buyers.
As has been widely reported, Brisbane is currently in a very good position affordability-wise – not only are we yet to see the big price rises experienced by Sydney and Melbourne in recent times, but finance is also very affordable, with interest rates low and banks competing to secure business.
 
Laing+Simmons general manager - Leanne Pilkington
Over the past few days we have been confronted by news stories arguing the property boom is over, that confidence is plummeting and other overly dramatic claims.
Taking a step back, those experienced in the industry know that it's simply business as usual for the housing market.
A slight easing in house prices in May is simply a reflection of the current state of the market, with factors like seasonality and prevailing affordability issues exacerbated by a tough budget playing their part.
A property purchase or sale has always been a major financial decision. However it's also a strictly personal decision, and no amount of market speculation and outspoken commentary should detract from the need for people to carefully weigh up their own needs and financial capacity.
There are still impressive prices being achieved by vendors and buyers continue to enjoy an equal balance of power in negotiations. In short, the market keeps on ticking over and today's rate decision should see this continue over the winter months.
 
1300HomeLoan managing director - John Kolenda
The federal budget and its aftermath haven’t done anything to inspire consumer confidence and the latest data also shows property values nationwide have taken a hit
Under these circumstances the RBA remains justified in staying on the sidelines while the budget is flushed through the system and other economic data is assessed.
It’s still 50/50 going forward on whether the next rate movement from the RBA will be an increase or a reduction.
Whatever happens, we don’t expect any big movement in rates and the current level looks like it's the new norm for the foreseeable future.
 
See the next page for thoughts from REINSW, HIA, Mortgage Choice and RateCity.
 
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REINSW president - Malcolm Gunning
The decision to keep interest rates steady came largely as expected. The budget and the fall in consumer sentiment which followed, coupled with the steading demand for housing and a levelling out of the price spiral, left the Reserve Bank with little choice.
The run of historically low interest rates will come to an end and we encourage those who are thinking of entering the property market to factor this into their budgets
 
HIA chief economist - Harley Dale
Today’s statement conveys the RBA Board has a high degree of comfort with the current cash rate of 2.50 per cent, given an environment where competing factors are influencing Australia’s overall economic performance
A shining light for the Australian economy is the recovery in new residential construction activity.
It is encouraging that today the Bank confirmed the message that interest rates are on hold for a considerable period of time. A period of stability will maintain a positive environment for residential construction activity to boost economic growth throughout 2014 and into next year.
Today’s interest rate statement hopefully reduces the recent elevated level of conjecture, and therefore uncertainty, regarding the direction and timing of the next interest rate move. This uncertainty is itself unhelpful for the sustainability of a residential construction recovery.
 
CEO Rate City - Alex Parsons 
In light of the recent Federal Budget, where frankly, most Australians are going to be worse off, it's great news for mortgage borrowers in that their repayments will be steady for another month.
For many Australians out there, particularly those buying their first home in the east coast city markets it's very difficult to get a foot on the property ladder, and it's likely to get harder as Budget cuts hit the hip pocket.
While that may be surprising for certain people trying to get into the house market, a combination of low interest rates plus income increases over that period of time has caused this impact.
Despite the housing affordability being its best position for the last 12 years, for any Australian out there, particularly buying their first home in the east coast city markets, it's still very difficult.
So my tips for those types of home buyers would be to be wary of interest rates going up in the future. We have record low interest rates today, but make sure that you can afford a 2 percentage point increase in interest rates and still be able to make those repayments. If you can't you'll soon find yourself in mortgage stress and that's not a good place to be.
 
Mortgage Choice spokesperson - Jessica Darnbrough
The latest Westpac Melbourne Institute Index of Consumer Sentiment fell by 6.8% to 92.9 – the lowest level since August 2011.
The sharp fall in sentiment is indicative of an unfavourable response to the recent Federal Budget.
According to the Index, 59.2% of Australians said they expect their family finances to “worsen” over the coming 12 months as a result of the Budget.
In the months leading up to the Federal Budget, many economists had predicted interest rates to rise in the not-too-distant future. However, this may no longer be the case. Instead, the Reserve Bank is likely to leave rates on hold for some time and wait and see what happens to consumer sentiment over the coming months.
In fact, in the minutes of the Reserve Bank's May Board meeting, it was suggested that the current accommodative stance of monetary policy was appropriate for some time yet given the current outlook for the economy and the significant degree of monetary stimulus already in place.
 
See the next page for comments provided on the day of the RBA decision from RP Data, Finder and L J Hooker.
<hr class="system-pagebreak">
Comments provided on the day
RP Data research director - Tim Lawless
From a housing market perspective, the Reserve Bank should be less concerned about housing markets overheating, with RP Data yesterday reporting the first fall in dwelling values in a year over the month of May and the trend rate of growth across the housing market has been cooling. Australia’s housing market has seen two years of escalating property values, so from a cyclical perspective the housing market is due for a slowdown.  Cooler housing market conditions shouldn’t surprise the Reserve Bank, who have been warning about overheated conditions and speculative investment activity in the Melbourne and Sydney markets. 
Gross rental yields in both these cities have fallen to near historic lows as value growth has substantially outpaced rental growth.  With the heat potentially coming out of the housing market, the RBA will find it much easier to keep interest rates at their low setting in an effort to continue stimulating housing construction and consumer spending. Add to the recently weak housing market a stubbornly high Australian dollar, lower commodity prices, slowing dwelling approvals and weaker consumer sentiment post budget and it’s clear that the RBA is likely to hold off on rate hikes for the foreseeable future.
 
Finder money expert - Michelle Hutchison
Despite new figures showing a month-on-month drop in property prices across the country, property values are much higher than ever. In fact, our research shows that national average (across five capital cities) property prices have increased by over $133,000 or up 27% to $628,320 (RP Data). 
If you waited for a property to drop before buying, interest rates could rise and outweigh the benefit of waiting. Australia's biggest Reserve Bank survey of leading economists and experts all expected the cash rate to remain unchanged today but the majority predict a rate rise by the end of the year or next year. If you waited a few months for a $500,000 property to drop by 4% to $480,000, with a 10% deposit and a loan size of $432,000, the lowest three-year fixed rates could rise by then to 5.19%. If you purchased a property now at $500,000 and a 10% deposit and loan size of $450,000, locking in the cheapest three-year fixed rate of 4.69% could save you about $1,400 over 3 years compared to waiting for property prices to drop and rates to potentially increase.
 
L J Hooker deputy chair - L Janusz Hooker
Looking forward, the only hiccup appears to be the uncertainty surrounding which federal budget measures will pass parliament.
Initially this caused a drop in consumer confidence but that appears to have passed.
The good news for home owners is the longer this uncertainty remains in place the longer interest rates will remain on hold.
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Industry perspectives on the RBA’s interest rate hold

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Macquarie Group’s domestic mortgage book will almost double to $30 billion in two years, according to a JPMorgan research note.
The doubling will transform the investment bank into one of most significant players in the market.
It still has some way yet to go if it is to become the so-called 'fifth-pillar' in banking behind the four major banks - a position long occupied by ING Bank, which has a $28 billion owner-occupier mortgage book.
But in the short-term the biggest threat is to Australia's regional banks.
Already larger than AMP, Citi and HSBC, JPMorgan noted that the investment bank's growth has been exceptional over the past two years with the portfolio expanding by around 50% to $17 billion.
Recent initiatives include the acquisition of a 25% stake in mortgage aggregator Connective.
Further growth will be fuelled by the redeployment of some $10 billion of surplus cash management account (CMA) deposits, noted JPMorgan.
JPMorgan analysts describe Macquarie's recent push into domestic mortgages as “more meaningful than investors or even Macquarie management themselves may suggest”.
Last July, Property Observer wrote that APRA monthly banking figures showed that <a href="/expert-insights/finance/macquarie-profits-forecast-to-rise-in-2014-financial-year-as-home-loans-business-grows-22-4-in-three-months">Macquarie Bank had grown its owner occupier home loan book by 22.4%</a> in the space of three months, from $3.96 billion in February 2013 to $4.85 billion in May 2013, and more than doubled it in the past 12 months (in May 2012, the loan book was worth $2.2 billion).
APRA ranked Macquarie as the 11th biggest mortgage lender to owner-occupiers.
Macquarie's investor home loan book had also been surging, having risen 21% over the three months from $1.77 billion to $2.14 billion in May 2013.
Alongside its growing home loan book, Macquarie is branching into new areas of mortgage finance funding while cementing relationships with niche home loan players.
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Regional banks face heightened Macquarie Group mortgage competition

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The Reserve Bank of Australia (RBA) has again chosen to keep the overnight cash rate at its record low level of 2.5%. The cash rate has not moved since August 2013.
The decision was widely anticipated by property industry commentators, with 16 surveyed industry experts recently <a href="/expert-insights/finance/16-experts-predict-no-change-from-rba-tomorrow">predicting the cash rate would stay on hold</a>.
RP Data’s research director Tim Lawless says that recent results in the property market provide a backdrop for the RBA’s decision.
“From a housing market perspective, the Reserve Bank should be less concerned about housing markets overheating, with RP Data yesterday reporting the first fall in dwelling values in a year over the month of May and the trend rate of growth across the housing market has been cooling,” he says.
“Australia’s housing market has seen two years of escalating property values, so from a cyclical perspective the housing market is due for a slowdown.  Cooler housing market conditions shouldn’t surprise the Reserve Bank, who have been warning about overheated conditions and speculative investment activity in the Melbourne and Sydney markets.”
According to Lawless, the current housing market will encourage the RBA to keep rates low for now.
“Gross rental yields in both these cities have fallen to near historic lows as value growth has substantially outpaced rental growth.  With the heat potentially coming out of the housing market, the RBA will find it much easier to keep interest rates at their low setting in an effort to continue stimulating housing construction and consumer spending.
“Add to the recently weak housing market a stubbornly high Australian dollar, lower commodity prices, slowing dwelling approvals and weaker consumer sentiment post budget and it’s clear that the RBA is likely to hold off on rate hikes for the foreseeable future,” said Lawless.
Property Observer’s Jonathan Chancellor agrees, writing yesterday that the <a href="/expert-insights/finance/last-months-price-growth-dip-the-first-since-may-2013-so-rba-will-be-content">Reserve Bank will be content with a slight dip in home values</a> over May. 
LJ Hooker deputy chair L Janusz Hooker said today’s decision is unsurprising given the stability of the economy.
"Looking forward, the only hiccup appears to be the uncertainty surrounding which federal budget measures will pass parliament," said Hooker.
"Initially this caused a drop in consumer confidence but that appears to have passed.
"The good news for home owners is the longer this uncertainty remains in place the longer interest rates will remain on hold."
Hooker predicts that the economy’s movement away from the mining sector will lead to future rate increases, but probably not until the end of this year or the beginning of 2015.
Michelle Hutchison of finder.com.au says that while interest rates are low, buyers shouldn’t wait for property prices to drop before investing.
"While there was no change to the cash rate today, interest rates are set to rise so it's a good time to consider locking in a fixed interest rate,” says Hutchison.
“For first home buyers, don't wait for property prices to fall as rising interest rates could outweigh the benefit of a cheaper property,” she says.
Low interest rates and slowing property price appreciation have made <a href="/expert-insights/finance/thanks-to-low-interest-rates-affordability-at-highest-level-for-over-a-decade-hia-cba-index">housing more affordable at a national level</a> than it has been for more than a decade, according to the March 2014 quarter HIA-CBA Housing Affordability Index, released last week.
For more on how to take advantage of low rates and prepare for a rise, <a href="/expert-insights/finance/how-to-prepare-for-an-interest-rate-increase">click here</a>.
 
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RBA keeps interest rates on hold for June

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Today is the fifth Reserve Bank meeting of 2014.
RBA Day, as it’s unofficially called here at the Property Observer office, has the whole industry pausing to check in at 2.30 – regardless of how sure they are that any change, or non-change as has most recently been experienced, is likely to be announced. Until 2.30, it's anyone's guess what could happen - and of course, "anyone" does indeed guess.
Forecasting, predicting or, indeed, downright guessing the RBA's next move, is now a favourite pass time of everyone from economists from the head of our big four banks, to the first home buyer tuning in to the news. We <a href="/expert-insights/finance/interest-rate-stays-on-hold-did-our-experts-get-it-right">regularly survey different experts and ask them to explain their reasoning</a>, which has provided some interesting insight into how the Reserve Bank may balance the different market forces in their own decisions.
However, just as it's not always clear when the RBA will make a change, and what that change might be, it’s also not always clear what the impact actually is.
Can extended periods of low interest rates really cause a property bust (as <a href="/expert-insights/investing/economists-warn-of-a-property-bust-if-interest-rates-stay-too-low">warned by some economists in this article here</a>)?
Do lower interest rates actually cause people to jump into the property market (as was <a href="/expert-insights/investing/effects-of-lower-interest-rates-clearly-evident-in-housing-market-christopher-kent">discussed at the Bloomberg Australia Economic Summit here</a>)?
The real impact of interest rates is heavily debated. Observer Catherine Cashmore, back in January 2013, argued that <a href="/expert-insights/investing/interest-rates-do-little-to-influence-australian-property-prices">interest rates actually have very little effect on property</a>. And then, last month, observer <a href="/expert-insights/finance/interest-rates-are-more-important-than-they-have-ever-been">Pete Wargent called interest rates more important now than ever before</a>.
"Pundits like to argue that in theory interest rates have little impact on housing markets, but due to the deregulation of the Aussie financial system and higher household debt today, this is incorrect, as partly evidenced by the impact of rate cuts since 2010," said Wargent.
"Shifts in interest rates were formerly somewhat limited in their ability to impact housing markets - since both lending and deposit rates were strictly controlled - yet today the availability and expectations around the cost of capital can be a key driver of market sentiment," he explained.
Regardless of who is right or wrong, it doesn’t stop the first Tuesday of the month being of fascination across the country and something that may have at least some impact on sentiment, if nothing more material.
Quick terminology
RBA: The Reserve Bank of Australia. Also, The Reserve Bank, Reserve Bank, The Reserve.
On hold: No change from the Reserve Bank
Basis points: One basis point equals one hundredth of a percent. So 100 basis points equals 1%. You’re most likely to hear this in terms of 25 basis points (0.25%) or 50 basis points (0.50%) as these are routinely the most used changes from the RBA.
The Official Cash Rate (or Cash Rate): The term describing the rate of interest on which the Reserve Bank charges on loans to banks. Some use this term interchangeably with interest rate.
Quick answers to FAQs 
When does the Reserve Bank meet?
The Reserve Bank meets on the first Tuesday of the month, excluding January. They announce their decision at 2.30pm.
Why did they make a decision?
Currently, Governor Glenn Stevens publishes his meeting minutes at the same time. You can read these on Property Observer. They use a range of different data sets to make their choice, including looking at the housing industry.
Does this mean my home loan rate will change?
While some years ago it was expected that the banks would change their interest rates in line with the Reserve Bank, in recent times this has changed. The banks and lending institutions now have their own meetings to decide on whether to pass on changes, or to cut or increase rates out of cycle. You can <a href="/expert-insights/finance/gap-between-official-cash-rate-and-home-loans-continuing-to-widen">see how far out of step they tend to be with the Reserve Bank in this article</a>.
The latest movements
The Reserve Bank has been on hold for an extended period of time. Having plotted the last 27 meetings (since February 2012, the first meeting for that year) including today’s, we’re in one of the lengthier periods of stability.
{plotalot id="16"}
The last interest rate increase was November 2010, when a 25 basis point change increased the cash rate to 4.75 from 4.50. 10 meetings of no change ensued until one year later, November 2011, the rate cutting cycle began, bringing the rates back to 4.50 and then to 4.25 after the December meeting.
The other decisions are visible in the graph above, bringing us to our record historic low interest rate of 2.50. In May, RBA governor Glenn Stevens said that it is <a href="/expert-insights/finance/strong-expansion-in-housing-construction-expected-rba-governor-glenn-stevens">likely the most prudent course of action to have a long period of interest rate stability</a>.
This low, and the general direction of the rates from the banks on offer being historically low as well, basically means that you can <a href="/expert-insights/finance/now-is-the-time-to-aggressively-make-mortgage-repayments-smartline">potentially aggressively pay down your principal</a> to give yourself some later breathing room and build some equity, with extra repayments or even by retaining your usual rate of repayment that you had prior to any decrease.
How low can it go and where are we heading from here?
As we're currently at lows that would have been seen as unprecedented, it's unsurprising that many do not believe it can fall much further, despite 1300HomeLoan managing director <a href="/expert-insights/finance/low-interest-rates-may-be-new-normal-john-kolenda">John Kolenda suggesting that this new low interest rate environment might just be the new normal</a>. 
“Prior to the global financial crisis the norm for the RBA's official rate was around the 5% mark,” Kolenda said in April.
“The historical rates over the last 30 years have been much higher than for the previous few years. Consumer confidence is playing a bigger role in determining rate movements.”
However, if it isn't the new normal - and rates return to previously seen highs, such as those during 2008 where the rate hit 7.25, <a href="/news/act/interest-rate-increases-an-eventual-risk-for-borrowers-fitch-warning">home loan repayments could rise by up to 40%, according to Fitch Ratings</a>. Bad news for those stuck with the repayments, and bad news for those lending if they don't bear this in mind.
And, in fact, the next movement is actually likely to be up - although there have been no alarmists suggesting a return to GFC-style 2008 interest rates as of yet.
According to a recent survey of economists and property experts from Finder, which included our editor at large Jonathan Chancellor, <a href="/expert-insights/finance/16-experts-predict-no-change-from-rba-tomorrow">every single one of the 16 on the panel accurately believed there was to be no change this month</a>.
However, nine of those surveyed forecast an increase for next year (including AMP, ANZ, Bank of Sydney, ING Direct, RAMS, UBS, Heritage Bank, Moody’s Analystics and ME Bank).
A further five respondents said that cash rate would likely be increasing this year (Commonwealth Bank, Commsec, Urbis, HSBC and St George Bank).
And observer articles, such as from Robert Simeon, are tending to <a href="/expert-insights/investing/when-it-comes-to-interest-rates-investors-should-learn-a-bit-from-history">suggest that there could be significant interest rate increases</a> over the next year.
For borrowers, this prompts the consideration (particularly for those on variable rates) as to how to handle interest rate increases, particularly if you haven't really thought about it until now. If you're in this category, you can read our <a href="/expert-insights/finance/how-to-prepare-for-an-interest-rate-increase">"How To: Prepare for an interest rate rise" article</a>.
CLICK HERE FOR MORE INFORMATION ABOUT INTEREST RATES
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Interest rates crash course: What's the relationship to the property market?

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RBA governor Glenn Stevens' June statement:
At its meeting today, the Board decided to leave the cash rate unchanged at 2.5 per cent.
Growth in the global economy is continuing at a moderate pace, helped by firmer conditions in the advanced countries. China's growth appears to have slowed a little in early 2014 but remains generally in line with policymakers' objectives. Commodity prices in historical terms remain high, but some of those important to Australia have continued to decline of late.
Financial conditions overall remain very accommodative. Long-term interest rates have fallen further and risk spreads remain low. Emerging market economies are once again receiving capital inflows. Volatility in many financial prices is currently unusually low. Markets appear to be attaching a very low probability to any rise in global interest rates over the period ahead.
In Australia, the economy grew at a below-trend pace in 2013 overall, but growth looks to have been somewhat firmer around the turn of the year. This has resulted partly from very strong increases in resource exports as new capacity has come on stream, but smaller increases in such exports are likely in coming quarters. Moderate growth has been occurring in consumer demand and a strong expansion in housing construction is now under way. At the same time, resources sector investment spending is set to decline significantly. Signs of improvement in investment intentions in some other sectors are emerging, but these plans remain tentative, as firms wait for more evidence of improved conditions before committing to significant expansion. Public spending is scheduled to be subdued.
There has been some improvement in indicators for the labour market in recent months, but it will probably be some time yet before unemployment declines consistently. Recent data confirm that growth in wages has declined noticeably. If these and other domestic costs remain contained, inflation should remain consistent with the target over the next one to two years, even with lower levels of the exchange rate.
Monetary policy remains accommodative. Interest rates are very low and for some borrowers have edged lower over recent months. Savers continue to look for higher returns in response to low rates on safe instruments. Credit growth has picked up a little. Dwelling prices have increased significantly over the past year, though there have been some signs of a moderation in the pace of increase recently. The earlier decline in the exchange rate is assisting in achieving balanced growth in the economy, but less so than previously as a result of the higher levels over the past few months. The exchange rate remains high by historical standards, particularly given the further decline in commodity prices.
Looking ahead, continued accommodative monetary policy should provide support to demand, and help growth to strengthen over time. Inflation is expected to be consistent with the 2–3 per cent target over the next two years.
In the Board's judgement, monetary policy is appropriately configured to foster sustainable growth in demand and inflation outcomes consistent with the target. On present indications, the most prudent course is likely to be a period of stability in interest rates.
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Moderation in pace of house prices lately, despite significant yearly growth: Glenn Stevens' June statement

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Almost three quarters (74.13%) of those financing a loan are opting for variable rate products, up 0.62% over May, according to Mortgage Choice’s latest home loan approval figures.
Mortgage Choice spokesperson Jessica Darnbrough said that this is unsurprising as an increasing number of lenders are offering discounts on their variable rate products.
“Australia's lenders are hungry for business and they have been offering some sensational variable rate discounts in a bid to attract borrowers and grow their market share,” Darnbrough said.
“We have seen some lenders offering discounts of up to 1.3% and even 1.4% off the standard variable rate. We haven't seen this level of discounting for some time, so it is no surprise to see the popularity of variable rate products on the rise.”
Victoria and Queensland, however, have bucked the trend by being the only two states not recording an increase in demand and recording the lowest demand from the product – at 71.92% and 570.16% respectively.
New South Wales saw strong variable rate demand increases, with 7.25% growth over May to reach 73.65%.
Western Australia and South Australia recorded high popularity levels for variable rate products, at 80.15% and 78.24% respectively, and bringing up the national total.
“While variable rate demand was sluggish in both Victoria and Queensland, fixed rate demand was on the rise, with the popularity of this loan product surging 8% in Victoria to sit at 28.08% and 4.62% in Queensland to sit at 29.84%,” Darnbrough noted.
Fixed rate demand for the other states and territories was down nationally, at 25.87%, down from 33.06% recorded in December 2013.
If you're asking <a href="/expert-insights/finance/analysis-is-it-worth-fixing-your-home-loan">whether you should fix your rate, here's a recent analysis that may help</a>.
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