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 

<section data-scroll-anchor="false" data-testid="conversation-turn-6" data-turn="assistant" data-turn-id="request-WEB:84a2af5e-d7cf-4ddf-922a-f4d44d6c6caa-2" data-turn-id-container="request-WEB:84a2af5e-d7cf-4ddf-922a-f4d44d6c6caa-2" dir="auto">
<section data-scroll-anchor="false" data-testid="conversation-turn-2" data-turn="assistant" data-turn-id="request-WEB:5a5ab36c-8dd3-454c-b456-c501f22f0eb4-0" data-turn-id-container="request-WEB:5a5ab36c-8dd3-454c-b456-c501f22f0eb4-0" dir="auto">
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 message being pushed by mortgage brokers and consumer advocates that borrowers should maintain their current mortgage repayments when interest rates fall and pay off their home loans sooner has well and truly been absorbed by home owners.
Nearly seven out of 10 mortgage holders (68%) surveyed by Nielsen said their number one financial goal was to pay off their home loans, confirming the view that Australians regard owning their home outright as key for their financial future.
This is despite a home not being able to generate any income in retirement apart from when it is sold, meaning future retirees could find themselves debt-free but cash poor.
In a <a href="/news">Property Observer webinar on property and wealth-creation</a>, WHK financial adviser Peter Handberg advised investors against investing extra income in paying off their mortgages but to consider putting the money into a balanced income-generating retirement portfolio made up of a mix of shares, property, bonds and cash.
“You can’t sell a bedroom,” says Handberg.
Only 13% of the 500 borrowers surveyed by Nielsen said their top goal was to save for retirement, while just 8% said purchasing an investment property was their number one goal, confirming the savings culture in Australia highlighted in a <a href="https://www.rba.gov.au/speeches/2012/sp-dg-051212" target="_blank">recent speech by RBA deputy governor Philip Lowe</a>.
The Nielsen study was commissioned by mortgage lender Crown Lending, with chief executive Scott Parry saying results show that the overwhelming majority of Australians wanted to live debt-free.
The propensity for borrowers to make extra mortgage repayments and reduce their home loans comes as banks earn billions more by not passing on interest rate cuts in full.
Following last week’s 25-basis-point rate cut by the RBA, all the major banks and their subsidiaries passed on 20 basis points, increasing their interest margin buffer by a further five basis points.
Notwithstanding the propensity of making prepayments, Mark Lewis, chairman of Adelaide mortgage broker Bernie Lewis, says that in the last five years borrowers have paid $18 billion extra in interest on their home loans due to banks not passing on the RBA interest rate cuts in full.
The banks say higher funding costs and a need for them to raise more expensive funding from retail deposits mean they cannot afford to pass on rate cuts in full anymore.
Lewis says while he agrees “on a grassroots level” that banks are not obliged to move in lockstep with the RBA, he does not buy their funding excuses, which he calls a “bitter pill” for borrowers to swallow as banks continue to generate record profits.
“The gap between the Reserve Bank cash rate and the average standard variable interest rate of the four major banks has nearly doubled since 2007 [from 1.8 percentage points in 2007 to roughly 3.4 percentage points currently]," he says.
 
<hr class="system-pagebreak">
 
According to Ratecity.com.au, the average standard variable rate across the lenders on its panel in November was 6.62% compared with a cash rate of 3.25% - a difference of 3.37 percentage points.
Assuming that lenders pass on 20 basis points on average – the average standard variable rate would reduce to 6.42% with the cash rate at 3% - a difference of 3.42 percentage points.
Lewis says that despite the RBA’s “emergency” cash rate setting, the increased margins of the banks means the cash rate would need to fall to 2% to have any impact – a fact acknowledged by Philip Lowe, when he said in the same recent speech, that the cash rate was currently 1.5 percentage points lower than it would otherwise be due to bank mortgage rates no longer moving “in near lock step with the cash rate”.
Despite their being better deals on offer through alternative lenders, Lewis says many borrowers appear apathetic to the fact that they are paying more than the need to on their home loan while banks are more than happy to take the extra cash and add it to their bottom line profits.
“You could argue that they have the right to increase, but the other thing that comes into play is the lack of competition in the market. With reduced competition comes lazy banks and a growth in margin,” Lewis says.
Banks have also been gouging extra interest payments from borrowers by the length of time they are taking to pass on rate cuts.
ANZ and Westpac combined are expected to generate more than $53 million in interest by being the last of the big four to pass on the RBA’s cash rate cut, with economists estimating that the major banks earn around $2 million for each day they withhold passing on the rate cut, according to Australian Broker online.
Westpac will pass on 20 basis points on December 17 – a full 13 days after the RBA announced its rate cut, while ANZ borrowers must wait until Friday to hear how much it will pass on as part of its independent rate review with borrowers likely to have to wait at least a week further for any rate cut to take effect (December 21).
The Commonwealth Bank and NAB passed on their 20 basis point rate cuts on December 10, earning an extra $14 million each by delaying the rate cut reaching borrowers.
Only <a href="https://www.propertyobserver.com.au/news/yellow-brick-road-passes-on-the-full-25-bps-reduction/2012120558313?utm_source=po&amp;utm_medium=aida&amp;utm_campaign=news" target="_blank">Yellow Brick Road</a> and <a href="/news">ING Direct</a> have passed on the full 25 basis points to borrowers.
Yellow Brick Road’s rate took effect on December 10, but ING Direct borrowers must wait until Christmas Eve (21 days after the RBA decision) to benefit from lower repayments.
 
</body></html>

lschlesinger-FZcF9M3vE6

Australians focused on paying off home loans, not retirement savings, while banks earns billions more in interest payments

<html><body>
The Greater Building Society has cut its standard variable home loan and basic variable home loan rates by 20 basis points to 6.05% p.a (comparison rate of 6.11%) and 5.69% (comparison rate of 5.75%) respectively.
The Newcastle-based mutual lender has passed on the full rate cut to package home loan borrowers with their rate falling to 5.49% (comparison rate 5.85%).
The reduced variable rates take effect from December 15.
The Greater’s standard variable rate is 0.37 percentage points below the average of the rates of the major four banks (assuming ANZ also reduces its rates by 0.20 per cent next Friday).
“Under the new rates, a person taking out a 30 year $300,000 Greater Building Society standard variable home loan would be $82,000 better off than someone taking out the same loan with Westpac,” says Greater CEO Don Magin
“For little effort you can save thousands of dollars off your loan, that is a pretty hefty pay packet,” he says.
“People are throwing their hard earned money away by not switching and switching is easier than most people think.”
Customers on a 30 year standard variable or basic home loan of $300,000 will see their monthly repayments reduce by $39.
The building society is encouraging borrowers to maintain their current payments and use the rate cut to get ahead on their home loan and pay it off sooner.
The Greater recently surveyed 100 of its customers and 98% indicated they were maintaining their repayments when rates were cut.
A Greater borrower who hasn’t changed their payments since rates fell in May has saved themselves approximately $140,000 in interest over the life of their loan and will repay it six years earlier.
Property Observer readers can get great refinancing tips from two free webinars we have run this year: <a href="/news">How smart property buyers and investors should approach refinancing in the current environment</a> and,<a href="/news">The Do's and Don’ts of Refinancing Your Existing Home Loan ... and How to Avoid Unnecessary Hurdles</a>.
</body></html>

Greater Building Society cuts standard variable rates by 20 basis points to 6.05%

<html><body>
The dust is starting to settle on the Reserve Bank’s decision to cut the cash rate by 25 basis points this week to 3% – the lowest it has been since September 2009.
Most lenders have announced their decisions, with cuts ranging from 20 basis points to the full 25 and with these new rate cuts kicking in between December 10 and December 24.
Unlike previous decisions, the three major banks that still take their cue from the RBA – NAB, Commonwealth Bank and Westpac – have been relatively quick in announcing decisions to pass on 20 basis points to variable rate mortgage holders, all doing so by Wednesday afternoon.
As a result, NAB continues to offer the lowest standard variable of the big four at 6.38%, followed by Commonwealth Bank at 6.40% and Westpac at 6.51%.
<table border="1" cellspacing="0" cellpadding="0" style="width: 470px;"><tbody>
<tr>
<td width="139" valign="top">
 
</td>
<td width="107" valign="top">
Date new rate kicks in
</td>
<td width="125" valign="top">
Standard variable rate
</td>
<td width="118" valign="top">
Three-year fixed rate
</td>
</tr>
<tr>
<td width="139" valign="top">
NAB
</td>
<td width="107" valign="top">
Dec 10
</td>
<td width="125" valign="top">
6.38%
</td>
<td width="118" valign="top">
5.49%
</td>
</tr>
<tr>
<td width="139" valign="top">
CBA
</td>
<td width="107" valign="top">
Dec 10
</td>
<td width="125" valign="top">
6.40%
</td>
<td width="118" valign="top">
5.54%
</td>
</tr>
<tr>
<td width="139" valign="top">
Westpac
</td>
<td width="107" valign="top">
Dec 17
</td>
<td width="125" valign="top">
6.51%
</td>
<td width="118" valign="top">
5.59%
</td>
</tr>
<tr>
<td width="139" valign="top">
ANZ
</td>
<td width="107" valign="top">
??
</td>
<td width="125" valign="top">
6.60%
</td>
<td width="118" valign="top">
5.54%
</td>
</tr>
</tbody></table>
Source: bank websites
The only difference is the timing of the rate cuts, with NAB and the Commonwealth bank’s new variable rates kicking in on December 10 and Westpac borrowers having to wait an extra week.
Bank-bashers will argue Westpac is cashing in at the expense of borrowers by delaying passing on the rate cuts – the big four banks earn an estimated extra $50 million collectively for every day they don't pass on a rate cut.
ANZ borrowers have a longer wait, with the bank making its independent rate review decision on Friday, December 14 – and most likely also passing on 20 basis points to borrowers, meaning a standard variable rate of 6.4%.
Rate cuts are catalysts for many borrowers to reassess their current mortgage and consider refinancing with a more suitable lender, often offering a lower interest rate – a 25-basis-point reduction on a $300,000 home loan over 25 years equals monthly repayment savings of around $50.
The federal government’s ban on exit fees also makes it cheaper to switch lenders, but borrowers should bear in mind that it only applies to variable mortgages dating from July 1, 2011 and does not apply to fixed rate home loans, which still carry hefty exit fees in most cases in the thousands of dollars.
Nevertheless, around one in five borrowers (according to Mortgage Choice figures) are still choosing to refinance into a fixed-rate loan, with one-year fixed rates currently starting from below 5% and three-year fixed rates just over 5%. There is also the option to split your loan between fixed and variable mortgages.
 
<hr class="system-pagebreak">
 
Borrowers should bear in mind that while a fixed rate loan can provide some peace of mind if rates start rising, they can prove a major headache if they continue fall, as <a href="/news">happened  around September 2008</a>, when the average three-year fixed rates was 8.75% but then followed a period of steep variable rate cuts, leaving fixed-rate borrowers paying an enormous premium, while variable borrowers enjoyed rates as low as 5.75%.
Mortgage comparison websites such as <a target="_blank" href="https://www.ratecity.com.au">ratecity.com.au,</a> <a target="_blank" href="https://www.mozo.com.au">mozo.com.au</a> and <a target="_blank" href="https://www.infochoice.com.au">infochoice.com.au</a> are a good way to get a sense of the range of rates being offered in the market place by a variety of lenders, but bear in mind that they may not compare all the advertised rates available and always consider the comparison rate, which is the rate inclusive of fees and charges.
Average standard variable rate vs three-year fixed rates over 2012
<table width="200" cellpadding="0" cellspacing="0" border="0"><tbody>
<tr>
<td valign="bottom" nowrap width="64">
 
</td>
<td valign="bottom" nowrap width="64">
SVR
</td>
<td valign="bottom" nowrap width="16">
 
</td>
<td valign="bottom" colspan="2" width="56">
3yr Fixed
</td>
</tr>
<tr>
<td nowrap width="64">
1-Jan
</td>
<td nowrap width="64">
7.30%
</td>
<td nowrap width="16"></td>
<td colspan="2" width="56">
6.38%
</td>
</tr>
<tr>
<td nowrap width="64">
1-Feb
</td>
<td nowrap width="64">
7.30%
</td>
<td nowrap width="16"></td>
<td colspan="2" width="56">
6.38%
</td>
</tr>
<tr>
<td nowrap width="64">
1-Mar
</td>
<td nowrap width="64">
7.39%
</td>
<td nowrap width="16"></td>
<td colspan="2" width="56">
6.34%
</td>
</tr>
<tr>
<td nowrap width="64">
1-Apr
</td>
<td nowrap width="64">
7.39%
</td>
<td nowrap width="16"></td>
<td colspan="2" width="56">
6.48%
</td>
</tr>
<tr>
<td nowrap width="64">
1-May
</td>
<td nowrap width="64">
7.40%
</td>
<td nowrap width="16"></td>
<td colspan="2" width="56">
6.45%
</td>
</tr>
<tr>
<td nowrap width="64">
1-Jun
</td>
<td nowrap width="64">
7.04%
</td>
<td nowrap width="16"></td>
<td colspan="2" width="56">
6.14%
</td>
</tr>
<tr>
<td nowrap width="64">
1-Jul
</td>
<td nowrap width="64">
6.82%
</td>
<td nowrap width="16"></td>
<td colspan="2" width="56">
6.12%
</td>
</tr>
<tr>
<td nowrap width="64">
1-Aug
</td>
<td nowrap width="64">
6.82%
</td>
<td nowrap width="16"></td>
<td colspan="2" width="56">
5.94%
</td>
</tr>
<tr>
<td nowrap width="64">
1-Sep-
</td>
<td nowrap width="64">
6.82%
</td>
<td nowrap width="16"></td>
<td colspan="2" width="56">
5.92%
</td>
</tr>
<tr>
<td nowrap width="64">
1-Oct
</td>
<td nowrap width="64">
6.82%
</td>
<td nowrap width="16"></td>
<td colspan="2" width="56">
5.73%
</td>
</tr>
<tr>
<td nowrap width="64">
1-Nov
</td>
<td nowrap width="64">
6.62%
</td>
<td nowrap width="16"></td>
<td colspan="2" width="56">
5.54%
</td>
</tr>
<tr>
<td nowrap width="64">
1-Dec
</td>
<td nowrap width="64">
6.62%
</td>
<td nowrap width="16"></td>
<td colspan="2" width="56">
5.54%
</td>
</tr>
<tr>
<td valign="top" colspan="4" width="192">
 Source: Ratecity.com.au
</td>
</tr>
</tbody></table>
Borrowers should also bear in mind that standard variable rate offerings of the major banks are only headline rates with all the banks offering rate discounts to borrowers who qualify or for their packaged home loan offerings, which can include things like a credit card, an offset account and a transaction account.
Westpac pointed out in its rates announcement that packaged home loan borrowers get a 70-basis-point discount of the standard variable rate mean – a rate of 5.81% from December 17.
Borrowers may also be able to negotiate individual discounts with their bank manager or lender, particularly if they are borrowers of good standing and can present the research showing the cheaper alternatives available in the market place.
Borrowers happy to refinance outside the major banks or their subsidiaries may qualify for variable rate as low as 5.22% offered by loans.com.au, the online offering of non-bank lender FirstMac.
Alternatively UBank, the online home loan and savings arm of NAB, is offering a refinancing variable rate of 5.47%, meaning borrowers can take comfort that they still have the backing of a major bank.
Of course a lower interest rate should not be the soul consideration when refinancing though it can be a good starting point.
Rather refinancing into a loan suited to your financial needs and goals is much more important and speaking to a reputable ASIC-licensed mortgage broker may help in wading through the various fixed and variable offerings in the market.
Credit laws require that mortgage brokers recommend loans that are “not unsuitable”, must provide explanations for their recommendations and disclose all commissions they receive.
 
<hr class="system-pagebreak">
The major bank subsidiary brands have also passed on 20 basis points leaving their standard variable rates as follows: BankWest (6.39% from December 18); St.George Bank (6.49% from December 17) and Bank of Melbourne (6.40% from December 17).
Bank of Melbourne is also promising to beat the variable home loan rate offerings of the big four banks – including its banking parent Westpac – in an effort to separate out the challenger bank brands from the big four in the minds of consumers.
Online bank ING Direct is the only major banking brand to pass on the full rate cut, offering an eye-catching 5.72% on its most popular Mortgage Simplifier variable rate product, but with the caveat that the new rate only kicks in on December 24 while recent APRA banking figures show the Dutch-based lender slowing down its provision of new mortgage considerably in the past year.
Other lenders to have passed on the full rate cut include Yellow Brick Road – with funding from Macquarie group – offering a rate at 5.25% per annum for the first year and as low as 5.54% over the remaining life of its Empower loan.
Credit unions and building societies also offer low rate home loans and a different customer proposition, given they are mutual lenders and are not driven by a need to maximise shareholder returns.
CUA, one of the biggest mutual lenders cut its variable rates by 20 basis points and is offering a new standard variable rate of 5.85% from December 13, which is 62 basis points lower on average than what the major banks are offering.
Another of the bigger mutual lenders, Heritage Bank (formerly Heritage Building Society) has cut variable home loan interest rates by 20 basis points to offer a standard variable interest rate of 6.14%, effective from December 14.
Property Observer readers can get great refinancing tips from two free webinars we have run this year: <a href="/news">How smart property buyers and investors should approach refinancing in the current environment</a> and, <a href="/news">The Do's and Don’ts of Refinancing Your Existing Home Loan ... and How to Avoid Unnecessary Hurdles</a>.
 
</body></html>

Getting through the mortgage maze: Chasing the lowest rates as most lenders pass on partial cash rate cut

<html><body>
Home loan comparison websites will face greater scrutiny from corporate watchdog ASIC to ensure they provide accurate information and are not misleading consumers.
This follows growth in the number of comparison websites since GFC, filling a need for consumers to be sure they are getting the best deal on mortgages, credit cards, insurance and other products.
However, ASIC has identified a number of concerns with some comparison websites, including that some only compare a limited number of brands/products from a limited number of providers.
“This may not be clearly disclosed which creates the impression that the extent of comparison is much broader than it actually is,” says ASIC.
ASIC is also concerned at the use of ‘ratings’ and ‘rankings’ for products without a clear explanation of the basis for them and websites that refer to ‘special offers’ and ‘featured products’ without properly explaining the basis of selection of certain products.
“For credit comparison websites that advertise loan products, it is important that comparison rates are disclosed as required under the National Credit Code. Given the nature of comparison sites it is important that consumers are provided with accurate information so they can choose financial products that best suit their needs,” says ASIC.
“ASIC recognises that consumers can benefit from the increasing opportunities to research and compare financial products online. For this to occur, operators of comparison websites must take care to ensure they accurately portray the features and limitations of the products compared. They also need to ensure that any information they provide, including quotes, is reliable, accurate and up-to-date,” says ASIC commissioner Peter Kell. "We will be targeting this area of the market and we will take regulatory action where necessary to ensure that operators of financial product comparison websites comply with the law," he says.
The increased scrutiny of comparison websites was welcomed by Rohan Gamble, managing director of Mozo.com.au.
Gamble told SmartCompany.com.au the aggregator industry is filled with so-called affiliates, who simply create an aggregator product that only compares their products.
“This type of announcement makes sure that we do the best we can. We’ve been waiting for this type of thing, and we take the view that we do this seriously, and that everyone else should as well.”
Comparison websites must comply with their obligations under consumer protection laws.
ASIC recently released a new regulatory guide for advertising financial products (Regulatory Guide 234 Advertising financial products and advice services: Good practice guidance), which includes guidance for comparison websites.
These include early disclosing the basis of awards or ratings, disclosing any links to the providers of products that are being compared, including commissions, referral fees, payments for inclusion in comparisons and/or payments for ‘featured’ products including a warning if not all providers are included in the comparison, clearly disclosing advertisements to prevent consumers being misled about the ranking of the product, and where necessary, including a warning that financial products compared do not compare all features that may be relevant to the consumer.
</body></html>

ASIC warns mortgage comparison websites on accuracy, disclosure and compliance

<html><body>
Westpac-owned St George Bank and Bank of Melbourne will pass on 20 basis points to variable mortgage holders from December 17.
The rate cuts mean all three banks will continue to maintain different variable rate settings.
St George Bank it will reduce its standard variable home loan rate by 0.20% to 6.49% per annum while Bank of Melbourne will reduce its standard variable rate to 6.40% per annum.
Yesterday Westpac announced its standard variable rate would reduce to 6.51% on December 17.
In a further move to differentiate the brands in the minds of consumers, Bank of Melbourne is promising to beat any advertised equivalent home loan rate of the big four anks if they take out a new home loan by 21 December.
“On average, Bank of Melbourne has been 15 basis points better than the majors, based on a $300,000 loan over the last 12 months,” said chief executive, Scott Tanner.
This is based on a comparison of a $300,000 loan and average packaged loan rates of Westpac, ANZ, CBA and NAB.
</body></html>

Three brands, three different rates: St George and Bank of Melbourne to cut by 20 basis points

<html><body>
The RBA will continue to maintain a low cash rate setting, according to RBA deputy governor Philip Lowe.
He says Australia now has lower interest rates than it otherwise would have to offset some of the effects of an uncomfortably high exchange rate and in an environment of slower credit growth and greater consumer caution.
But he said it was possible that “normal lending rates will be somewhat lower for a period owing to the combination of global factors and the legacy of the credit boom”.
These remarks where part of a speech delivered in Sydney overnight following the RBA cutting the cash rate to 3% and to its lowest level since the GFC.
Speaking on the topic of “What is normal?” Lowe highlighted how it was now much harder for the RBA to judge what an appropriate economic response was to rate cuts, but re-affirmed that the RBA continues to believe that monetary policy continued to keep inflation in check and have a positive impact on the economy.
“Monetary policy still looks like it is working,” Lowe said.
“There are lags and different parts of the economy respond differently, but lower interest rates are still effective in providing a boost to the overall economy.”
But he also provided numerous examples of how the economy has shifted since the GFC and that a new "normal" had emerged.
He said the Australian propensity to spend every dollar earned between the mid-1980s and into the 2000s (as house prices boomed) was not normal and that “more recently, the saving rate has increased and it is back to the level it was in the mid-1980s”.
<img src="/images/stories/2012/12/rbadec6.gif">
 
<hr class="system-pagebreak">
 
Lowe said the lower cash rate settings were also in response to higher funding costs facing banks, meaning they no longer moved in step with the RBA.
Lowe said that in a new “normal” of lower credit growth and higher funding costs for banks, the cash rate was currently around 150 basis points lower than it otherwise would have been.
“The fact that the bank has offset the effect of higher funding costs on lending rates means that the normal level of the cash rate is lower than it otherwise would have been,” said Lowe.
“A 3% cash rate today is not the same as a 3% cash rate in the past,” he added, implying that this was because headline mortgage rates offered by banks are no longer moving “in near lock step with the cash rate”.
The theme of a new normal was also touched on by AMP Capital Investors economist Shane Oliver, who said that while the RBA has cut the official cash rate back to its post-GFC record low of 3%, “overall policy settings are nowhere near as stimulatory as they were in mid-2009”.
“Bank lending rates are much higher, the Australian dollar is way higher and fiscal policy is being tightened not loosened."
In his latest economic note, Oliver said mining investment was fading rapidly and non-mining growth needed to pick up quickly.
“The trouble is that growth in other areas of the economy is soft. While the Reserve Bank has been cutting interest rates for just over a year the response has been subdued.”
Oliver pointed out that all key indicators – building approvals, credit growth, retail sales – “are currently well below the average level they attained this far into past easing cycles” and that further rate cuts were needed to achieve mortgage rates that will become “stimulatory”.
“Although the RBA has cut the official cash rate to its GFC low, because of bank funding issues bank lending rates are around 0.6-0.8 percentage points above their 2009 lows.
“The standard variable mortgage rate at around 6.42%, assuming banks pass on around 0.2% of the RBA’s latest 0.25% rate cut, is below its long term average of 7.25%.
“But normally rates need to fall well below their long-term average to be confident of stronger growth. And in an environment of household and business caution post GFC the neutral rate has likely fallen, probably to around 6.75% ,which is shown as the “new neutral” level," Oliver said.
"This would suggest that current mortgage rate levels are only just starting to become stimulatory.”
But HSBC chief economist Paul Bloxham disagreed.
"We expect that this could be the last in the easing phase of this cycle given China's economy is bottoming out, local rates are supporting the interest-rate sensitive sectors and inflation may have passed its trough, leaving the RBA will little further room to move," he said.
</body></html>

Credit boom unlikely to return but lower rates the new normal: Philip Lowe

<html><body>
OK, Philip Soos, I’ll bite.
Your article earlier this week on negative gearing has really ticked me off – and you can’t call me ‘the property lobby’ because I’m primarily a stay-at-home mum and a part-time journalist who used to run around after politicians for a living on the telly.
I’m a property investor too – thank goodness – but I should warn you that negative gearing on property investments all through my 20s certainly paved the way for me to spend the last seven or so years at home, raising two new little taxpayers. You’re right, what a dreadful policy, only benefiting “the rich”.
Who are these “rich” people?! Let’s find them and burn their houses down! They’re certainly the bad guys <a target="_blank" href="/news">in your article, Mr Soos.</a>
I could go on and on about the benefits of private investment in the property industry, despite your determination not to understand them. Try to think of it, if you would, as the original public-private partnership. Governments always have and always will need private citizens to invest in property, therefore providing a bigger rental pool for other private citizens. I hate to be all anti-progress about it, but there just isn’t a better way of doing it for a lazy $3 billion a year.
For this very large effort and ongoing commitment by the investors, there needs to be some sort of reward. People everywhere are great, but generally speaking in a business sense, people don’t do things for others for free.
The point of my response is not to get bogged down in policy debate. What I can tell you is what’s happening on the ground. Negative-gearing property investors are people, too. We’re workers, we’re mums and dads, we’re small business owners, and we’re taxpayers. We’re putting in the hard yards on the ground in the rental industry, and we’ve been doing it for years. Years and years.
I’ve renovated for profit every night and weekend for months, I’ve responded to tenant disasters in the middle of the night, I’ve picked up the pieces when good tenants go bad, I’ve experienced the best and worst of human nature as a self-managing lessor.
I’ve claimed losses, I’ve paid capital gains tax, I’ve put profits back into the economy and I’ve saved money to live off while our children are small. I’m also unlikely to need a pension in retirement –  here’s hoping, anyway.
 
<hr class="system-pagebreak">
 
I’m far from a blight on society, Mr Soos, and I’m certainly not alone. As you’ve pointed out, there are well over a million property investors just like me. We’re a brave lot, and I firmly believe – no, I know, from experience – that our significant contribution outweighs our tax breaks.
Yes, some of us speculate, but many other taxpayers choose not to take on the associated risks and extra hard work. That’s their choice. That’s the difference.
By the way, your assertion that “a salaried employee” doesn’t get tax breaks associated with earning an income, is also wrong. Anyone who works or studies 20 hours or more per week gets 50% of their childcare costs back, paid quarterly, not annually in a tax return. I have no idea why you think “accommodation” is a legitimate work expense – it’s not. We all have to sleep somewhere, job to go to in the morning or not. That’s why it’s called a living expense.
Don’t get me started on your suggestion that perhaps negative gearing should only be applied to new property. Property investors are clever, but you won’t find many of us out and about on the weekends knocking up our own structures from scratch. Why would we want, as a nation, to hand a bigger break to the multinational building firms, which would no doubt whack a premium on top of their house-and-land or apartment package prices for investors, purely because they’d be the only products able to be negatively geared?
If you think there are any “millionaires” out there receiving low rents as a result of negative gearing, well, you’re wrong there, too. No property investor worth their salt sits down and works out the lowest rent they can charge based on what they’ll get back from negative gearing. It doesn’t work that way. It’s called market forces. I can ask $1,000 per week for a shack, but I won’t get it unless it’s comparable with other shacks on offer at the time. It’s unlikely there are any millionaire or high-income tenants paying less than market rent simply because the landlord is negative gearing.
And finally, a little more sense about the maths, please. Let’s all remember that tax refunds received as a result of negative gearing still represent a portion of the total losses on a property during a financial year. No one is investing in the hope of losing $20,000 per annum on a rental so they can get $10,000 (or less) back. They’re out of pocket by $10,000 on an investment!
Every property investor, big or small, is restricted by income. I can’t speak for the casino-owning Packers of the world, but I can confirm that while many mums and dads would like to own a whole street of rentals, most of us can’t – we couldn’t sustain the out-of-pocket repayments. Making it harder for us to be fairly small fish in the rental sea really doesn’t make sense, or good policy.
The aim of public policy should be to encourage private investment (and wealth creation for all), not whack it mercilessly and stomp on it until it’s shattered, and then wonder why government housing queues are getting longer.
I’m also not sure whether you realise that the perceived health of the property market helps determine that whole Reserve Bank interest rate decision each month? It’s pretty big. Screw with property and watch interest rates move, one way or another. With fairly limited options these days for capital growth, there’s never been a worse time to even think about dropping negative gearing.
Over a million of us would run a mile.
 
Melanie Stott is a freelance journalist and regular contributor to <a href="https://www.hotspotting.com.au" target="_blank">The Ryder Report</a>. She also writes for Michael Matusik and works as a TV News producer in Brisbane. Melanie and her husband Andrew own <a href="https://www.paradiseatthepoint.com.au" target="_blank">Paradise at the Point</a>, the Gold Coast holiday house featured in 2012’s Big Brother series– and it’s positively geared.
</body></html>

mslott-9JQARaBEN9

Negatively geared property investors' contributions far exceed their tax breaks

<html><body>
Currently around 20% of borrowers choose a fixed-rate home loan, according to Mortgage Choice, with a three-year fixed rate the most popular fixed-rate product.
However, as the chart below prepared by RateCity.com.au shows, timing is key when fixing.
Borrowers who fixed around September 2008, when the average three-year fixed rate was 8.75% and just before the RBA began drastically cutting the cash rate, would have had to endure three years of substantially higher mortgage repayment than those who chose a variable-rate mortgage.
Even those who took out just a one-year fixed rate would have felt mortgage pain.
The standard variable rate was 9.61% in September 2008 but dropped to  5.75% by May 2009 and was well below 8% over the three-year period.
<img alt="ratecity_chart" src="/images/stories/2012/12/ratecity_chart.gif" width="470" height="270">
The chart also shows how the gap between fixed and variable rates has widened since the federal government introduced its ban on exit fees on variable rate mortgages.
“The major banks’ three-year fixed home loans have followed generally followed their standard variable rates quite closely over the past five years," says Michelle Hutchison, spokesperson at financial comparison website RateCity.com.au.
"But since 2011, we’ve seen three-year fixed rates start to fall lower than the banks’ standard variable rates. It’s unusual to see fixed rates so much lower than standard variable rates, but several factors have resulted in lenders making their fixed rates more attractive.
"One of the reasons was banking reforms banned exit fees on variable home loans from July 1, 2011, making fixed loans a more secure investment for lenders.”
</body></html>

Winners and losers on the interest rate rollercoaster: Fixed and variable rates since 2007

<html><body>
Westpac  will pass on 20 basis points of the RBA's 25 basis point cash rate cut to borrowers.
It's standard variable rate will reduce to 6.51% from December 17.
It follows both <a target="_blank" href="/news">NAB and Commonwealth Bank</a> announcing rate cuts of 20 basis points, taking effect from December 10.
NAB's new standard variable rate will reduce to 6.38% and Commonwealth Bank's will fall to 6.40%.
Westpac taking an extra week to reduce its variable rates compared with the Commonwealth Bank and NAB is significant.
Earlier this year, <a target="_blank" href="/news">The Australia Institute</a> calculated that every day that the big four banks delay passing on the Reserve Bank’s latest interest rate cut represents a deprivation of $12 million from home owners’ pockets.
Westpac is taking 12 days to pass on 20 basis points this month compared with a big four bank<a target="_blank" href="/news"> average of 10.6 days </a>calculated by the Economic Record, published by the Economic Society of Australia.
In contrast, NAB and the Commonwealth Bank will take only five days to pass on the rate cut.
ING Direct announced yesterday it would pass on the full rate cut, but this will only take effect on December 24 - 19 days after the RBA reduction.
Westpac's reduction in home loan rates will save homeowners $38 a month or $456 a year in total monthly repayments on an average mortgage of $300,000.
Since October 2011, Westpac has cut its variable mortgage rates by 1.35 percentage points, equating to an annual saving of $3,192 on an average home loan.
The RBA has reduced the cash rate by 175 basis points since October.
</body></html>

Westpac joints CBA and NAB by passing on 20 basis points

<html><body>
The Commonwealth Bank has become the second of the big four banks to announce its interest rate decision, passing on 20 basis points to borrowers.
From December 10, the bank's standard variable rate will reduce to 6.40% per annum.
This follows <a target="_blank" href="/news">NAB cutting its variable rates by 20 basis points</a> to 6.38%, also from December 10.
The Commonwealth bank once again said that it had to "balance the needs of 1.8 million home loan borrowers with those of its 11 million depositors and its shareholders, who include 800,000 Australians who own its shares directly, and millions more Australians who own shares through superannuation funds" in making the decision.
"A significant factor impacting this balancing of needs has been the increased competition in the domestic deposit market which has benefitted many customers, including those who rely on interest earnings to meet their living expenses," said the bank.
</body></html>

Latest Finance Insights

NAB bring forward first RBA cut to February 2025

Editor's Picks

Developments

New apartments

New townhouses

News

Latest Finance Insights

NAB bring forward first RBA cut to February 2025

Editor's Picks

Receive the latest news stories to your inbox

Developments

New apartments

New townhouses

News