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>

Joel Robinson

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

Local Little Bay residents, along with buyers from premium postcodes across Sydney’s affluent Eastern Suburbs, have dominated purchases in developer-builder Urban Property Group’s first Eastern Suburbs apartment development, <a href="https://www.apartments.com.au/new-apartments/este-little-bay-jennifer-street-little-bay-nsw-2036">ESTE Little Bay</a>.

The $250 million coastal project, one of the first new developments in the area in several years, has proven particularly popular with downsizers, especially those from Coogee and Bondi. One Double Bay downsizer paid $4.7 million for a four-bedroom penthouse, setting a new local apartment price record in the process.

Buyers have been attracted to the combination of coastal tranquillity, premium design and amenity-rich neighbourhood living. The walkable village setting, along with proximity to three of Sydney’s leading golf courses, New South Wales Golf Club, St Michael’s Golf Club and The Coast Golf Club, has also been a key drawcard.

[smartcode_project:default project_id=112343 project_image_fid=352689]

Built across two low-rise buildings designed by <a href="https://www.apartments.com.au/architects/hill-thalis-architecture-urban-projects-pty-ltd">Hill Thalis</a> and set along a lush, landscaped green spine, designed by leading landscape architect <a href="https://www.apartments.com.au/landscape-architect/arcadia-landscape-architecture">Arcadia</a>, ESTE Little Bay offers a collection of one, two, three and four-bedroom residences with interiors by Richards Stanisich.

<a href="https://www.apartments.com.au/developers/urban-property-group">Urban Property Group</a> Sales Director, Tom McIvor said the response to ESTE has been "nothing short of extraordinary."

“Buyers have been quick to recognise ESTE as a rare opportunity to invest in a coastal sanctuary that offers both seclusion and connectivity to the heart of Sydney,” McIvor said.

[smartcode_project:default project_id=112343 project_image_fid=352687]

<a href="https://www.apartments.com.au/project-marketer/srm-residential">SRM Residential</a> Senior Director, <a href="https://www.apartments.com.au/project-marketer/srm-residential">Clayton Ross</a> said the local market has responded incredibly well, driven by ESTE’s exceptional location and the rarity it offers.

“We’ve seen strong interest from a variety of buyer groups, all of whom are drawn to the exclusivity and quality of the build and construction by the 4.5-star iCIRT-rated builder / developer, Urban Property Group. There’s truly nothing else like it along Sydney’s coastline.”

[smartcode_project:default project_id=112343 project_image_fid=352690]

The project also includes robust buyer protections, including Resilience Insurance’s Latent Defects Insurance, providing 10 years of structural cover, and an independent iCIRT-rating of the developer.

“The iCIRT-rating adds another layer of confidence,” Ross added. “Buyers see it as a safeguard for their investment and their lifestyle.” A highlight of ESTE’s offering is its exclusive wellness amenities, including a heated rooftop infinity pool and outdoor heated spa, a state-of-the-art Technogym fitness centre, and a sauna.

<a href="https://www.apartments.com.au/new-apartments/este-little-bay-jennifer-street-little-bay-nsw-2036">ESTE Little Bay</a> is topped out and is on track to complete towards the end of 2026, with residents moving in before Christmas.

[smartcode_project_cta:default project_id=112343]

Eastern Suburbs buyers snap up ESTE Little Bay apartments

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 majority of borrowers (55%) expect the RBA to leave the cash rate unchanged at 3% at its monetary policy meeting on Tuesday (February 5).
But demonstrating perhaps confusion among homeowners about the future direction of interest rates, a large proportion (44%) expects the RBA to lower rates to record lows.
These were the findings of an online survey of 452 respondents carried out by mortgage broker Loan Market, who asked the question ‘What action do you think the RBA is going to take at its February meeting?’
Loan Market survey results:
<ul>
<li>Lower rates 25 bps                            35%</li>
<li>Lower rates 50 bps                             9%</li>
<li>Raise rates 25 bps                              1%</li>
<li>Leave rates unchanged                     55%</li>
</ul>
Nearly one in ten borrowers are hopeful of an unlikely 50 basis point rate cut, which would take the cash rate to an all-time record low of 2.5%
“It’s very likely the RBA will apply the same wait-and-see approach, it demonstrated throughout 2012 at its meeting next week,” says Loan spokesman Paul Smith
“Most economic indicators are within targeted ranges and it appears home owners aren’t convinced the RBA has enough evidence to lower interest rates,”
“The December rate cut certainly did help inject some confidence into areas of the economy and help spending and consumption over the holiday period. But like most interest rate movements, it takes time to assess the full impact as more data becomes available,” he says.
Smith says that these results could indicate that households do not expect the economy to grow on the heels of RBA rate cuts alone.
“Households have seen four rate cuts in the past year yet housing finance remains flat and sentiment remains quite cautious. If the government is looking to promote confidence in the economy it should look to ease concerns about the two-speed economy or home building,” he says.
 
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Majority of borrowers expect rates to remain on hold this week: survey

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Mortgages lending remained at record lows over December while the major banks increased their market dominance over non-bank lenders, according to the latest RBA figures.
Housing credit advanced by banks and non-banks increased by 0.3% over December, following an increase of 0.4% over November.
Over the year to December, housing credit rose by 4.5% the slowest annual pace of mortgage lending growth for RBA data going back to 1976.
The slow growth suggests it’s not just a case of borrowers paying down their mortgages and other debts but that banks and non-banks are reluctant to lend.
“If growth in lending is strong then it suggests that credit from financial institutions is freely available, underlying demand for assets such as cars and houses is firm and that the price of credit (interest rates) is attractive,” says Savanth Sebastian, economist at CommSec.
Sebastian says little growth in property prices is one of the factors holding back borrowers from taking on fresh debt.
"The main factor underpinning the conservative approach to lending is weak growth in asset prices, especially property. Clearly you are likely to be less willing to take on a large debt load if the price in the underlying asset is barely growing, or in some cases, going backwards," Sebastian says.
Total credit provided to the private sector by financial intermediaries rose by 0.4% over December 2012, after remaining unchanged over November. Over the year to December, total credit rose by 3.6%.
Other personal credit (credit cards, personal loans) increased by 0.2% over December to be up just 0.3% over 2012 while business credit increased by 0.7% over December to be up 2.8% for the year.
Commonwealth Bank economist Diana Mousina said the figures indicate household borrowing restraint, low business appetite for debt; and deposit growth stronger than credit growth.
“The trend of sluggish credit growth reflects competing factors. Household and business balance sheets are in relatively good health and the household savings ratio is around 11%. Under normal circumstances strong balance sheets and low interest rates create a favourable environment for credit growth. However, business and consumer sentiment are subdued due to uncertainty about the outlook. This acts as a drag on credit growth,” she says.
The figures also show that non-bank lenders continue to lose ground to the banking sector.
Banks added $9.4 billion to their collective mortgage books over December, which now stand at $1, 771.5 billion ($1.77 trillion) while non-bank loan books shrunk by $2.8 billion to $151.3 billion.
Proportionally, banks have 92% of the lending market and non-banks 8%.
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Mortgage growth remains at record lows as non-banks lose market share: RBA

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Nearly a third of borrowers (30%) say they would ditch their Big Four bank if another lender offered them a 50 basis point discount off the rate they are currently paying, according to a survey by Australia’s biggest mutual lender, CUA.
More than half (56%) said they would “consider” switching for a 50 basis point discount.
Even a smaller discount of 25 basis points would tempt 60% of Big Four borrowers to consider refinancing with another lender.
Overall, the CUA’s National Mortgage Survey found a high level of discontent among borrowers who have their loans with Big Four banks.
A fifth (18%) said they would ditch their Big Four bank if they did not adjust their mortgage rates following an RBA cash rate cut with 60% saying they would “consider” doing so.
In addition, 70% of these borrowers would switch or consider switching for lower fees and charges.
“Overall, Australian mortgage holders are looking for a lender that provides competitive rates and makes decisions that are in the customer’s best interest,” says CUA’s general manager for products and marketing Jason Murray.
Borrowers who opt for a standard variable home loan would be 55 basis point better off with a CUA loan compared with a standard variable rate home loan offered by the Commonwealth Bank.
The CUA's standard variable rate is 5.85% (comparison rate of 5.91%) while the Commonwealth Bank's standard variable rate is 6.40% (comparison rate of 6.54%)
However, the Commonwealth Bank is more competitive on fixed rates and discounted variable rate offerings.
The lowest variable rate mortgage currently offered by CUA is its rate breaker package home loan at 5.42% with a comparison rate of 5.75%.
The CUA offers a three-year fixed rate of 5.30% with a comparison rate of 5.81%.
The Commonwealth Bank, offers a no-fee variable rate home loan at 5.70% with a comparison rate 5.70% and a one-year guaranteed rate of 5.34% with a comparison rate of 6.43%.
Its three-year fixed rate is 5.54% for non-home loan package customers and 5.39% for those that do opt for a packaged home loan deal.
Property Observer <a href="/news">compiled this list of the lowest home loan rates </a>offered by the major banks and their subsidiaries on January 8.
The CUA survey found that across all borrowers (not just those with a Big Four home loan), the propensity to refinance with another lender appears high with more than three-quarters (78%) of all mortgage holders saying they would switch or consider switching if their current lender failed to adjust rates following an RBA rate cut.
The results are based on a survey of 1,514 people carried out by Auspoll, commissioned by the CUA, of which four out of 10 have a mortgage.
Of those respondents that have a mortgage, 62% have their home loan with a major bank, 8% with a credit union or mutual lender and 31% with another lender (smaller bank or non-bank lender).
Respondents were questioned on their attitudes towards interest rates, switching home lenders and fixing their interest rates.
Other key findings from the survey were that fixed home loans remain largely unappealing to the majority of borrowers despite lenders continuing to cut fixed rates.
Only 7% of variable rate mortgage holders said they intended to fix their home loan in the next three months with 71% saying they had no intention of fixing.
The remaining 22% said they would fix their home loan, but not in the near future.
This is slight improvement on the 3% who said they would fix in last year’s survey and the 75% of respondents who said they had no intention to fix at all.
However, even among those survey respondents who expect rates to rise in 2013, fixed rates remain unappealing.
“Of those variable rate mortgage holders surveyed who believe rates are at the bottom of the cycle and will increase in 2013, still only 31% would plan to fix their mortgage in the future,” say CUA’s general manager for products and marketing Jason Murray.
Less than a third of those surveyed expect a cash rate cut in February and remain divided as to what will happen to interest rates in 2013.
Around 37% believe the cash rate will decrease further in 2013 while an almost equal number (38%) believe rates will be higher at the end of the year.
A quarter of respondents expect rates to stay the same in 2013.
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A third of borrowers would ditch big four banks for 50-basis-point discount: CUA

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Mortgage holders have been warned of two illegal tax avoidance schemes being offered by unscrupulous promoters that could result in tax deductions being cancelled and penalties being imposed.
The home loan schemes are included in examples that form part of the ATO’s new guide 'Investigating tax-effective arrangements', which aims to help borrowers “recognise some of the common types of tax avoidance schemes so you can reject them and avoid the negative consequences associated with them”.
The ATO warns of a tax avoidance scheme being promoted as a<a target="_blank" href="https://www.ato.gov.au/atp/content.aspx?menuid=0&amp;doc=/content/00268505.htm&amp;page=8&amp;H8"> 'mortgage management'</a> plan, which involves refinancing your home loan.
“In this arrangement, a tax scheme promoter offers you a means of creating deductible interest payments, equivalent to your home loan interest payments, using the existing equity in your home to obtain additional loans for the purpose of claiming investment deductions.
“This is a scheme because there is no real investment and the dominant purpose of the arrangement is to reduce your assessable income by claiming deductions you are not entitled to,” says the ATO, which warns of “significant commercial risks if you enter into these types of arrangements”.
“Shares in the promoter company may not deliver a reasonable return or be worth far less than you anticipate," says the ATO.
The second property-related tax avoidance scheme is a <a target="_blank" href="https://www.ato.gov.au/atp/content.aspx?menuid=0&amp;doc=/content/00268505.htm&amp;page=11&amp;H11">‘home loan unit trust arrangement’.</a>
“In this arrangement, a promoter claims they can make your home loan interest payments tax deductible.
"Using a unit trust the scheme promoter sets you up to borrow funds to purchase a property. You then live in the property and pay rent to the unit trust at market rates which the trust declares as taxable income.
“The trust claims associated expenses and interest charges as deductions against the rental income and you claim a tax deduction for the interest payments on the borrowing.
“This is a scheme because it involves getting a tax benefit from borrowings for private expenses - your home.
“You would not be entitled to claim the interest payments as deductions and you risk having to pay penalties and interest,” says the ATO.
The ATO warns: “When we identify arrangements where the promised tax benefit isn't available under the law, the arrangement is deemed to be a tax avoidance scheme. As a result, tax deductions for the arrangement are disallowed and participants face potential penalties.
“Tax schemes aren't limited to the 'too good to be true' type of arrangement. They can be more sophisticated than many people realise. Schemes can be complex arrangements that are offered to you by some advisers with claims the availability of tax benefits is confirmed by genuine experts."
The ATO is also warning investors about <a target="_blank" href="/news">illegal SMSF rental property scheme</a>. The guide can be read <a target="_blank" href="https://www.ato.gov.au/atp/content.aspx?menuid=0&amp;doc=/content/00268505.htm&amp;page=1&amp;H1">online</a> or <a href="https://www.ato.gov.au/atp/content.aspx?menuid=0&amp;doc=/content/00268505.htm&amp;page=1&amp;H1">downloaded as a PDF document</a>.</body></html>

ATO warns on home loan tax avoidance schemes

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Adelaide-based mortgage fund and lender Angas Securities has revealed that a third of its loans are now in arrears.
It comes just days after Brisbane mortgage lender Wickham Securities collapsed with $30 million of retiree funds at risk and following the high-profile collapses of debenture-funded mortgage lenders Banksia and Provident Capital last year.
Around 2500 small investors have invested in Angas Securities' debenture fund, which offers returns from 7.5% to 8% and principally lends the money on at high interest rates as commercial property loans.
Angas heavily advertised its debenture products on the radio.
Its latest fixed interest prospectus issued in December, which offers 350 million first ranking securities at $1 each and an annual rate of return of 7.5%, reveals that as of December 2012 it had a loan book worth $229 million with the proportion of loans 90 days in arrears or more tripling in the past six months to $72.3 million.
Around $33 million of these loans are more than a year in arrears.
Loans range in size from $2 million to a $9 million loan, which defaulted in June last year.
The company recently broadcast advertisements on Alan Jones’ 2GB show seeking new investors, reported The Australian.
Angus executive chairman Andrew Luckhurst-Smith told the paper the company was comfortable with its arrears levels due to its conservative lending criteria and had no concerns about recoverability and neither would its auditors, Deloitte Touche Tohmatsu, listed on the prospectus.
The largest loan in the Angas portfolio comprises three mortgages totalling $25.25 million over a “prestigious rural/residential property along with collateral security over harbourside apartments in Sydney”.
Angas says the loan is paid up in terms of interest until December 31, 2012
The second biggest loan is a $21.4 million loan to a “Perth based builder and property developer, with a range of distinct residential, commercial and retail properties providing security”
“The principal activity of Angas is to provide short term loan finance fully secured by registered first mortgages over real property,” reads the prospectus.
First mortgage advances do not exceed maximum loan to valuation ratios of 70% for residential, industrial and commercial loans and 50% for rural loans.
The minimum investment is $10,000 with a maximum of $5 million.
The prospectus warns that “investors may not be able to recover all or part of the principal funds invested in the issue or any fixed interest attaching to these”.
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Adelaide mortgage fund Angas Securities reports a third of loans more than three months in arrears

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The huge competitive advantage the four major banks already enjoy in the mortgage market is being boosted by borrowers getting ahead on their mortgage repayments.
On average more than one in two (56%) borrowers who have their loan with a major bank are ahead on their mortgage repayments, according to research by Morningstar.
A large proportion of these would be variable-rate mortgage holders who have continued to pay off their loan at the same amount, despite interest rates falling since November 2011.
The Commonwealth Bank, Australia’s largest mortgage lender, has the most diligent borrowers with more than two-thirds (69%) ahead on their mortgage repayments.
Second best is Westpac (59%) followed by ANZ (49%) with NAB the laggard at 45%.
“Recent interest rate cuts will increase home loan prepayment rates and provide the banks with an even stronger buffer against future loan loss risks,” says Morningstar financial services and property market analyst David Ellis, who compiled the report.
The latest quarterly ING Direct Financial Wellbeing index also found around one in two households (49%) are ahead on mortgage repayments - the highest proportion since the bank began tracking this figure in mid-2010.
The proportion of households ahead with their repayments is highest in Queensland (58%) and Victoria (57%).
The survey, based on an early January Galaxy Research online survey of over a 1,000 households, also found that 93% of home owners are ‘comfortable’ with their loan, with 64% saying they are ‘very’ comfortable - the highest level since tracking began.
The Morningstar report also looked at loan to value (LVR) ratios of the major banks, which are in a range from 44% to 56%, indicating most borrowers have built up strong financial buffers.
The Commonwealth Bank again rates highest on this measure with an impressive loan to value (LVR) ratio of just 44% with NAB the highest at 56%.
In addition, Morningstar found that the mortgage books of the major banks are also being boosted by improving arrears rates.
“Arrears rates continue to improve with home loan 90-plus day arrears trending down from a four bank average of 0.61% of the total loans outstanding at September 2011 to 0.52% at September 2012,” says Ellis.
All of these factors – borrowers’ propensity to get ahead on mortgage repayments, low LVRs and declining arrears – will provide insulation in the unlikely event of a significant financial shock.
Ellis says a sharp deterioration in credit quality is the major risk to earnings growth, particularly if the economy slides into recession, but ranks as a low possibility.
“Tight credit risk standards limit potential damage, but a sharp increase in business loan losses similar to GFC highs in 2009 will damage earnings, dividends and investor confidence.
“We do not see any material loan loss risks in the residential portfolios of the major banks and at this early stage of the 2013 financial year and overall credit quality remains sound,” says Ellis.
He also says the housing market has stabilised following moderate house price declines in 2011 and early 2012, though “we still expect a slow grind down till 2015”.
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Half of borrowers ahead on mortgage payments: Morningstar and ING Direct

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ME Bank has cut its one-year fixed rate home loan to 4.99% per annum, joining a number of other lenders who offer a one-year rate below 5%.
Other lenders to offer this rate include Newcastle Permanent , Hunter United and the Greater Building Society.
The 4.99% rate is applies to its Super Member Home Loan (SMHL) Standard Home Loan with a member package.
The member package is only available to members of eligible super funds and unions
The Bank also cut its three-year fixed rate to 5.19% p.a. for its SMHL Standard Home Loan with a Member Package.
“Fixed rates are at lows rarely seen in the home loan market and present a unique opportunity for customers seeking to lock in lower repayments," says ME Bank CEO, Jamie McPhee.
 “The average standard variable rate for the big four banks is currently 6.42% p.a., which is 1.43% higher than our new one-year fixed rate.”
 “A borrower could save themselves more than $3,200 over 12 months by borrowing at 4.99%p.a. instead of 6.42%p.a. on a 25-year, $300,000 loan,” he said.
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ME Bank cuts fixed rates

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Self-funded retirees lured by the promise of high returns have again been caught out following the collapse of Brisbane-based specialist lender Wickham Securities. The lender provided property loans.
It’s an all too familiar story –following a similar plot line that led to the demise of Victorian rural lender Banksia and Sydney-based sub-prime lender Provident Capital last year.
Wickham Securities raised money from SMSF investors through $1 unsecured deposit notes promising returns of 9.25%.
The money was then lent the money to what appears to be borrowers of last resort to fund commercial property acquisitions or refinance existing loans, at interest rates in excess of 20%.
A spokesperson for ASIC told Property Observer, that the collapse of Wickham Securities would be included in its internal taskforce investigation into the debenture sector.
“ASIC will be investigating and understanding the circumstances surrounding its failure. ASIC will work with the administrators to maximise the best possible return for debenture holders,” said the spokesperson.
The collapse of Wickham came just a day before Bill Shorten, the minister for financial services and superannuation announced on December 22, that there would be public consultation about possible changes to strengthen the regulation of finance companies that issue debentures to retail investors.
Grant Sparks and David Leigh of corporate recovery firm PPB Advisory in Brisbane were appointed as administrators of Wickham Securities by its board of directors on December 21.
The consultation will likely come too late for Wickham’s unsecured noteholders who received no warning from the directors of the company that it may be facing any financial problems.
While the most recent September quarterly report to trustees of noteholders does not indicate that any loans financed from deposit notes were in arrears, initial investigations by administrators PPB Advisory indicate that some loans have gone bad.
Wickham attracted around 300 investors who invested in $1 deposit notes.
They are being represented by Sandhurst Trustees Limited, who will vote on their behalf alongside secured creditors on the future of Wickham at a creditors meeting to be held on February 6.
Prior to the meeting Sandhurst is seeking direction from noteholders as to how it should vote.
A December 24 update from PPB Advisory, disclosing possible conflicts of interest, suggest recent problems were flagged at the start of December, with the firm asked by Sandhurst to undertaken an independent review of certain aspects of the Wickham loan portfolio.
The review was not completed and PPB Advisory have not been paid Wickham.
However, problems for Wickham appear to date back much further.
In 2009, Wickham Securities along with Bankwest, as secured creditors, appointed Ferrier Hodgson as receiver-managers of Plantation Rise residential development at Woombye on the Sunshine Coast hinterland.
The appointment came just days after Brisbane-based McLeod and Partners was appointed voluntary administrator with Wickham reported owed several millions of dollars.
It’s most recent September quarterly report to trustees stated that it should have enough property "to repay the amount of each debenture when it becomes due and payable" but also warned that they had invested in unsecured deposit notes not bank deposits and risked "losing some or all" of their investment.
Wickham had loaned out $27 million out of but none of the 20 loans were in arrears, and they were secured by $145 million worth of property, the accounts said.
The report stated that Wickham should have enough property "to repay the amount of each debenture when it becomes due and payable".
Annual accounts to the end of June show that Wickham reported a profit of $396,000 following a loss of $839,000 in the previous year and report no significant change to the nature of the company’s activities.
The company earned $5.17 million in interest payments
The directors are listed as Bradley Sherwin (chairman), Peter Siemons, Ian Montgomery and Garth Robertson.
Sherwin, also the company secretary, received a salary of $117,500 and is the only shareholder with 644,556 shares.
The annual report shows that Sherwin’s financial planning business, Sherwin Financial Planners provided consultancy services to Wickham, which along with administration costs totalled $222,954. In the previous financial year, the financial planning business was paid $767,812.
It says the Bradley Sherwin specialised in providing financial advice to high-net worth individuals, private businesses and self-funded retirees.
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Self-funded retirees facing $30 million loss following collapse of lender Wickham Securities

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Forget about a fifth banking pillar emerging and a mortgage discount war in 2013.
The big four banks’ dominance of the mortgage market is set to strengthen this year with regional banks, non-bank lenders and mutual lenders continuing to clutch at their coat-tails.
According to Morningstar analyst David Ellis, the major banks are only going to get stronger in 2013 and the last thing they want is a mortgage war to impact on their “highly profitable oligopoly”,
The possibility of a mortgage war was raised by Business Spectator columnist Robert Gottliebsen in a recent article in The Australian titled "The rate discount that will change banking".
Gottliebsen claimed that because lenders like <a target="_blank" href="/news">Yellow Brick Road now have access to cheaper funding from Macquarie Bank</a>, banks will be forced to match discounted offers in the market place and that a mortgage war will erupt.
Ellis says quite the opposite that, while net interest margins are under pressure, a combination of loan repricing, better conditions in wholesale funding markets, the major banks’ strong competitive position and improving funding mix will provide upside to margins.
“We expect major bank pricing decisions to remain rational, as there is no desire for a home loan price war to upset the highly profitable oligopoly," he says.
In a slow-growth housing market, likely to persist until 2015, Ellis says the major banks managed outstanding housing credit growing of 5.9% to the end of October compared to the 4.7% for the total market, continuing to take market share from non-banks.
According to Ellis the major risk to earnings growth for the major banks is a sharp deterioration in credit quality growth, particularly if the economy slides into recession, “but we rank this a low possibility”.
“We do not see any material loan loss risks in the residential portfolios of the major banks and at this early stage of the 2013 financial year, overall credit quality remains sound,” he says.
And while the outlook for the major banks in the current environment of low loan growth, benign bad debts and strong profitability is strong with Ellis expecting them to generate approximately 50–75 basis points bps in internal capital each year, “providing a growing surplus for capital management initiatives” the outlook is murkier for other lenders.
“Regional banks, building societies and non-bank lenders relying on securitisation as a major funding source will struggle to raise cost effective funds, crimping profitability,” he says.
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The mortgage loans war we won’t have in 2013: Morningstar

<html><body>Take the common example of an Australian expatriate who buys a home back in Australia while still resident of another country, including for tax purposes. In this case study, the house will be rented until the expat eventually returns to Australia, when it will become the family’s home. The capital gains tax (CGT) treatment when the home is eventually sold will be influenced by the length of time when the property was not the expat’s main Australian residence. (Main residences are exempt from Australian CGT).What would be this expat’s CGT position if he or she were to own the property for, say, 10 years and it was his or her Australian home for only the final two of those years? Joe Galea, property tax partner for accountants Deloitte in Sydney, says a fifth of any net capital gain should be taxable. The capital gain or loss is calculated by offsetting the so-called “cost base” against its sale price. (Very broadly, the cost base comprises the cost of buying and selling the property after allowing for any capital depreciation.) For more tips for Australian expats buying back home this summer, <a href="http://propertyobserver.com.au/ebooks/free-ebook-20-top-tips-for-australian-expats-thinking-of-buying-homes-this-summer" target="_blank">download our free eBook.</a></body></html>

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