<a href="https://www.apartments.com.au/developers/sunland-group">Sunland Group</a> has officially lodged plans for its first Gold Coast apartment project since the departure of the Abedian family from the company three years ago, unveiling a new high-rise proposal for a prominent Broadbeach corner site on Old Burleigh Road.

The application was submitted by an entity directed by Tom Jamieson, stepson of longtime Sunland leader Soheil Abedian, and Riaz Rezvanipour, brother-in-law of Sahba Abedian, Soheil’s son.

Sunland acquired the 1,283 sqm site on the corner of Old Burleigh Road and Armrick Avenue for $9.5 million late last year and is now seeking approval for a <a href="https://www.apartments.com.au/new-apartments/99-101-old-burleigh-road-broadbeach-qld-4218">42-storey tower with 81 apartments</a>.

<img alt="First look: Sunland Group returns to Broadbeach with new Old Burleigh Road tower plans" data-entity-type="file" data-entity-uuid="fea2946d-90ee-4cfc-babe-2a8ad5db2cb6" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/pers.png?VersionId=BV0fihJw31nDIQ8ozY_h3GbS8mxDyhnm" />

Designed by <a href="https://www.apartments.com.au/architects/contreras-earl-architecture">Contreras Earl Architecture</a>, the proposed tower at 99-101 Old Burleigh Road would deliver a predominantly larger-format apartment mix aimed at the owner-occupier market. Plans include 17 two-bedroom apartments, 55 three-bedroom apartments, and nine four-bedroom residences across 35 residential levels.

The development also incorporates three basement levels, four podium parking levels, two levels of communal recreation facilities, and rooftop plant and equipment. A total of 189 car spaces are proposed, significantly exceeding the 90 spaces required under the planning scheme.

The architecture adopts a sculpted, curvilinear form, with deep wraparound balconies and integrated landscaping intended to soften the tower’s vertical expression. The planning report states the building’s “slender footprint/form provides a complimentary yet varied built form within the local streetscape” and contributes to “a varied, yet ordered skyline.”

Contreras Earl noted in its Architectural Statement that from the early stages, the project addressed a fundamental challenge: how to accommodate the required residential yield while avoiding the conventional model of a tower sitting on a rigid, fully resolved parking podium.

“The most direct response would have been to consolidate parking into a singular, flat podium and extrude a repetitive tower above,” the statement said. “While efficient, this approach would result in a consolidated built form with limited engagement with the surrounding landscape and public realm.”

Instead, the conventional podium model was “deliberately rejected”. The architects described the base of the building as “a landscaped architectural condition where structure, planting and circulation are integrated”.

“Rather than presenting a continuous built mass, the base of the building is articulated through a series of concrete planter elements that organise the podium into a fragmented system,” the statement said. “This approach reduces the perceived bulk of the lower levels while establishing a more permeable interface with the streetscape and adjacent open space.”

<img alt="Sunland" data-entity-type="file" data-entity-uuid="923fad8d-c960-4527-8fbe-975cf1ddf88d" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-25%20at%2010.32.03%E2%80%AFAM.png?VersionId=pngwb0hYOIUpq9vDw6F2EsOiVuHF3DiX" />

&nbsp;

The site sits within the High Density Residential Zone and inside the City of Gold Coast’s unrestricted “HX” building height area, where the planning framework anticipates intensified residential development tied to the expanding light rail corridor. The planning report notes the area is undergoing “transition toward more intense development forms” given its proximity to Broadbeach, Surfers Paradise, and high-frequency public transport infrastructure.

Positioned directly opposite Broadbeach Park and within walking distance of Florida Gardens light rail station, the development would sit among a rapidly evolving stretch of Old Burleigh Road that has become one of the Gold Coast’s most active apartment development corridors.

The application joins a growing pipeline of luxury residential projects reshaping Broadbeach, including nearby developments by 5Point Projects, Polycell, and Graya.

The planning report argues the project contributes toward the Gold Coast’s long-term housing targets under the South East Queensland Regional Plan, which forecasts the need for more than 100,000 additional high-rise dwellings across the city by 2046.

<section data-scroll-anchor="false" data-testid="conversation-turn-4" data-turn="assistant" data-turn-id="request-WEB:84a2af5e-d7cf-4ddf-922a-f4d44d6c6caa-1" data-turn-id-container="request-WEB:84a2af5e-d7cf-4ddf-922a-f4d44d6c6caa-1" dir="auto">
The Abedian family departed Sunland Group in late 2023, ending a four-decade association with the company, and subsequently established the private development firm Abedian &amp; Co. The group is currently delivering <a href="https://www.apartments.com.au/new-apartments/greenmount-residences-cnr-hill-street-and-marine-parade-coolangatta-qld-4225">Greenmount Residences</a> at Rainbow Bay and recently launched <a href="https://www.apartments.com.au/new-apartments/18-mary-avenue-14-18-mary-avenue-broadbeach-qld-4218">18 Mary Avenue</a> in Broadbeach.
</section>

Joel Robinson

First look: Sunland Group returns to Broadbeach new apartment market with new Old Burleigh Road tower plans

The Minns Labor Government has established the new Bays West Delivery Authority to lead the development&nbsp;of the Bays West Precinct and Blackwattle Bay Precinct.&nbsp;

The Authority is charged with creating Sydney’s newest precinct, a thriving, connected, sustainable hub with White Bay Power Station as its cultural heart. Its vision is to build on the area’s natural, cultural and industrial history to shape a vibrant new neighbourhood.

The precinct will deliver up to 8,500 well-located homes, including a minimum of 10 per cent affordable and essential worker homes. Combine new housing with public open space, opening public access to the waterfront for the first time in more than 100 years, while retaining important deep-water facilities to support Sydney’s working harbour.

Located just minutes from the Sydney CBD and connected to a world-class metro, ferry, walking and cycling links, the Bays West precinct will rebalance housing growth towards well-serviced inner-city locations and help tackle the state’s housing crisis.

The Bays West Delivery Authority,&nbsp;an agency of the Department of Planning, Housing and Infrastructure, will report to the NSW Minister for Lands and Property who already has oversight of major precinct renewal projects including at Blackwattle Bay and Barangaroo.

As part of the broader Bays West transformation, the Minns Government recently announced that a proposal from Lendlease to redevelop part of the Bays West Precinct has progressed to Stage 2 of the NSW Government’s unsolicited proposals process.

<img alt="Sydney" data-entity-type="file" data-entity-uuid="2ed71eb9-d8e8-4fa7-b9d1-de4531dcf2f3" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-25%20at%209.42.31%E2%80%AFAM.png?VersionId=IDryFIbped9SNDg72LEN_EecvhUsOPvp" />

The Minns Labor Government has also confirmed the Bays West precinct will have a new suburb name. This will be the first major suburb built in close proximity to Sydney’s CBD in decades and will encompass the area currently being referred to as Bays West, including Glebe Island and the White Bay Power Station. Served by a new Metro station just five minutes from the CBD, it will become one of the most populous suburbs in the Inner West and one of Sydney’s premier cultural destinations.

An early works program is taking shape, which&nbsp;includes the first stages of an international design competition.&nbsp;

The aim of the Bays West&nbsp;International&nbsp;Design Competition is to&nbsp;ensure design excellence is embedded in the project from the start. The competition will deliver an&nbsp;urban framework that defines the character, ambition and long-term identity of&nbsp;this&nbsp;former industrial precinct as it transitions to a vibrant, inclusive and sustainable residential&nbsp;neighbourhood.

The competition will be led by the Bays West Delivery Authority in partnership with Government Architect NSW.&nbsp;

It will launch with an invitation for a global Expressions of Interest, before moving to an invitation-only stage that will be assessed by a panel that&nbsp;will provide advice to Cabinet who will select a winner.

Premier of NSW, Chris Minns said the establishment of the new Authority is the first step in transforming the Bays West precinct into a vibrant, livable suburb minutes from the Sydney CBD and two stops from Hunter St Station on the Metro West line.

“The Authority will deliver well-located homes close to the heart of the city and integrate the new precinct with Blackwattle Bay and the new Sydney Fish Market.

“This is a generational opportunity to build a new suburb on the city’s edge and open the harbour foreshore to the public for the first time in a century.”&nbsp;

Minister for Lands and Property Steve Kamper said the new Bays West Delivery Authority established by the Minns Government will turbocharge the development of Sydney’s newest suburb.

“The Authority is working at a record pace to deliver an international design competition, planning pathways and a financial model so that this development benefits Sydney with well-designed homes in a central location, close to public transport, jobs, entertainment and essential services.

“If we want Sydney to stay liveable and affordable, we need to be bold about using underutilised government-owned land to deliver homes for the future while making sure essential working harbour functions can be accommodated.”

Bays West Delivery Authority established to "turbocharge" Sydney’s newest suburb

Around 400 additional homes could be built at Southwark Grounds on Port Road, lifting total site capacity from 1300 to around 1700 dwellings.

A recently approved code amendment would allow apartment towers of up to 14 storeys in some areas of Renewal SA’s redevelopment of the former West End Brewery.

Renewal SA Acting Chief Executive Shane Wingard said he welcomed the code amendment, with the increase in heights and homes making a positive impact on the supply of high-quality, well-connected housing close to the city.

“By going higher across some parts of Southwark Grounds, we are adding a substantial number of very well-located homes with little impact on project delivery time or planned open space,” Mr Wingard said.

Since the project officially launched in 2025, Mr Wingard said more than 12,000 enquiries had been received about living at Southwark Grounds.

“The very strong early interest we’ve seen since homes were first released in the precinct reinforces our plans to create more housing opportunities,” he said.

The Southwark Grounds code amendment was launched in December last year, with community engagement undertaken over five weeks from January.

It proposed increasing maximum building heights from eight to 14 storeys on the eastern section of Southwark Grounds, and to 12 storeys across the remainder of the site, with minimum building heights ranging from two to four storeys.

The code amendment was implemented through an Early Commencement policy in late January, allowing developers to quickly explore the viability of increased height and housing yield while other planning processes continue.

One of the first developers delivering apartment sites have already finalised redesigns to increase the number of apartments following the code amendment.

Samaras’ development adjacent to the future Colonel Light Park is now planning to deliver 125 apartments across 11 storeys, significantly greater than original plans of around 50 apartments across four storeys.

The developer is also exploring the potential for additional affordable housing outcomes.

Most of the apartments at Southwark Grounds will be delivered within a master-planned precinct on a large parcel of land on the eastern portion of the site, covering around two-thirds of its 8.4 hectares.

Wingard said detailed precinct planning over the coming months may identify further opportunities to increase yield further that could see total apartment numbers at Southwark Grounds, exceed this number.

Affordable homes at Southwark Grounds will also see a net increase, with Renewal SA maintaining its commitment to a minimum of 20 per cent affordable housing across the development.

&nbsp;

&nbsp;

Civil works have begun across the site, with construction under way on the first new roads surrounding a townhouse precinct in the south‑west corner of Southwark Grounds. This includes Renewal SA’s 17 Founder’s Row homes, which are on track for completion by Christmas.

“We expect to have people living at Southwark Grounds by the end of the year, so delivering roads and public spaces for those residents is among our highest priorities.”

Construction of 40 townhouses off Anderson Street, known as West Village and being delivered by Contour, is forecast to begin in mid‑2026. Kolabb’s Anderson Lane development will follow shortly after, delivering a further 26 townhouses.

Southwark Grounds is a state government‑led urban renewal project now set to deliver around 1,700 homes over the next decade.

Homes will be supported by a supermarket, a range of retail and hospitality offerings anchored by a revitalised Walkerville Brew Tower, a childcare centre, car parking and well‑connected public spaces.

400 new homes planned for Adelaide's former West End Brewery site

Brisbane developer&nbsp;<a href="https://www.apartments.com.au/developers/cavcorp">Cavcorp</a> has lodged plans for a new mixed-use residential development at <a href="https://www.apartments.com.au/new-apartments/55-wyandra-street-teneriffe-qld-4005">55 Wyandra Street</a>, Teneriffe, anchored by an 85-metre public laneway designed to reconnect the suburb’s riverfront with the Gasworks precinct.

The buildings, known as Teneriffe House and Teneriffe Lane, would replace the existing Queensland Cotton head office site with a 15-storey residential tower transitioning to eight storeys toward Helen Street. The project has been designed by Plazibat Architects and lodged as a code assessable development application for 93 apartments across a 3,401 sqm mixed-use site within the Newstead and Teneriffe Waterfront neighbourhood plan.

Central to the scheme is the transformation of an existing service easement into a publicly accessible cross-block connection linking Wyandra and Helen Streets. Cavcorp says the new laneway will act as both a pedestrian shortcut and a landscaped civic space between the Teneriffe Riverwalk, ferry terminal, and Gasworks precinct.

<img alt="First Look: Cavcorp unveils Teneriffe House and Teneriffe Lane plans for landmark wellness tower in Teneriffe" data-entity-type="file" data-entity-uuid="26e7f058-b065-4de8-b13d-a2b8cb64dfcc" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/bldg.png?VersionId=sELS0ZKYi361oYipUa1BIKfe_.DLZoFV" />

“The revised proposal delivers a legacy public-realm cross-block link, permanently secured for community use, transforming an existing private easement into a safe, high-quality pedestrian connection between the Teneriffe heritage riverwalk and the Gasworks–Long Island precinct,” the planning report states.

The laneway will sit beneath a large subtropical loggia integrated into the podium levels of the development. The design incorporates deep landscaping, water gardens, lobby spaces, business lounges, and ground-floor apartments to create what Cavcorp describes as a climate-responsive “urban verandah.”

The tower itself has been designed as a slender form with recessed floorplates and curved translucent corners inspired by contemporary Japanese architecture. The building height aligns with the Commercial Road precinct controls, which permit towers up to 15 storeys within proximity to Longland Street.

<img alt="First Look: Cavcorp unveils Teneriffe House and Teneriffe Lane plans for landmark wellness tower in Teneriffe" data-entity-type="file" data-entity-uuid="a8a17d40-43b6-4718-b3fd-67676fcbb485" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/pers%202_1.png?VersionId=i3VwDtp5AmL_8InW7w4qRbDFEpb744Jt" />

The project will comprise a mix of larger-format apartments aimed at owner-occupiers, downsizers, and families. The proposed apartment mix includes 11 loggia apartments across the lower levels, 50 four-bedroom Sky-Terrace apartments from levels three to seven, and 32 Sky-Pool Homes occupying the upper tower levels. The Sky-Pool Homes will feature private thermal plunge pools integrated into oversized balconies.

According to the application, the apartments are intended to reinterpret the scale and character of Teneriffe’s woolstore conversions and Queensland homes within a vertical residential format.

“The sky-pool homes build on Cavcorp’s previous projects and introduce a distinct apartment typology to Teneriffe, informed by both local and international precedent and responding to an identified market demand for enhanced safety, space and amenity,” the planning submission notes.

A major focus of the proposal is its five-level wellness and lifestyle offering, extending from the basement through to the rooftop.

Amenities proposed include a rooftop Swim &amp; Racquet Club with a 25-metre Olympic lap pool and tennis court, coworking spaces and libraries, golf simulators, wine storage, concierge facilities, business lounges, pet wash areas, and rooftop longevity-focused wellness spaces with spas, outdoor fitness zones, and landscaped terraces.

<img alt="First Look: Cavcorp unveils Teneriffe House and Teneriffe Lane plans for landmark wellness tower in Teneriffe" data-entity-type="file" data-entity-uuid="944b352c-49b9-4247-a4c6-5967b4b69fda" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/amenity.png?VersionId=Ed_qKjAtMwFT.5gfl3jiA9QwdWxSMsaX" />

All parking will be concealed within basement levels accessed from Wyandra and Helen Streets. Cavcorp says the deep-basement engineering approach allows the entire ground plane to prioritise landscaping, pedestrian movement, and active frontage rather than vehicle infrastructure.

The development continues Cavcorp’s concentration in Newstead and Teneriffe, where the Brisbane developer has delivered a number of apartment projects including Lucent, Le Bain, and Luminare, as well as the Long Island Wellness Precinct nearby. Several of those projects have received national design and architecture awards, including recognition under Brisbane’s “Buildings that Breathe” program.

Cavcorp unveils wellness-focused Teneriffe House and Teneriffe Lane apartment buildings

Focus Group Investments has lodged plans for a new apartment development at <a href="https://www.apartments.com.au/new-apartments/64-70-hanover-street-fitzroy-vic-3065">64–70 Hanover Street</a> in Fitzroy, seeking to utilise the Victorian Government’s recently introduced Great Design Fast Track pathway to accelerate approvals for the project.

The proposal is among the latest developments to emerge through the state-led initiative, which was established to fast-track well-designed residential projects in activity centres and transport-connected inner-city locations. The pathway allows qualifying developments that meet elevated design and housing benchmarks to bypass traditional council planning timeframes and instead be assessed directly by the Department of Transport and Planning.

Designed by SJB, the development will comprise a mix of apartments above activated lower levels, with a strong focus on architectural articulation, landscaping, and communal amenity. The design response seeks to balance the industrial character of Richmond’s former warehouse precincts with a more contemporary residential form.

<img alt="First look: Focus Group Investments taps Victoria’s Great Design Fast Track for Richmond apartments" data-entity-type="file" data-entity-uuid="abea51cc-d85b-479e-9aef-a589f3b37ca7" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/ground.png?VersionId=e1Kf8EyPWwyiVumtqQ4rM5S4GpOR3CCz" />

Proposed are 63 new dwellings, a wide ranging mix of studio, one-, two-, and three-bedroom apartments, and townhouses and duplexes. They will be spread across a part-three, part-eight storey building.

The Planning and Urban Context Report by Tract says the development is of an "exemplary architectural standard" and has been carefully crafted by SJB Architects.

"Dwellings&nbsp;will benefit from excellent access to natural light, cross-ventilation opportunities and extensive communal space," the report noted.

The architectural material highlights the project’s integration of landscaped elements and communal spaces throughout the building. The proposal also incorporates sustainability initiatives aligned with the Victorian Government’s push for higher-performing apartment developments under the fast-track program.

The Great Design Fast Track was unveiled by the Victorian Government in 2024 as part of a broader housing supply strategy aimed at accelerating the delivery of new homes. Projects assessed through the pathway must demonstrate high-quality architecture, sustainability outcomes, and housing diversity while being located close to public transport and existing infrastructure.

<img alt="First look: Focus Group Investments taps Victoria’s Great Design Fast Track for Richmond apartments" data-entity-type="file" data-entity-uuid="afdbe834-8dc4-4a77-a943-ba07bc927348" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/site_11.png?VersionId=0J657j.TaChAZfp93wqJYBTqSsnREJx2" />

Focus Group, founder and led by Paul De Lutiis, is increasingly active across Melbourne’s inner suburbs, targeting well-connected urban renewal locations suited to medium and higher-density residential development. The Fitzroy proposal continues that strategy, leveraging the area’s strong transport links, established retail amenity, and proximity to the CBD.

Fitzroy has been one of the most popular spots for developers and buyers in recent years. The likes of PACE Development Group, SMA Projects, Crema Group and Chapter Group, currently selling projects in the suburb.

First look: Focus Group Investments taps Victoria’s Great Design Fast Track for Fitzroy 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

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More than half (53%) of Australian households have no income left at the end of the month once they have paid their mortgage and other bills, according to the latest ME Bank Household Financial Comfort Report.
The report found that 43% of households break even and 10% spend more than they earn by drawing on savings, loans, credit or equity in their homes.
The most financially vulnerable are single parents, with 43% indicating they would not be able to maintain their lifestyle for a fortnight without a pay cheque, compared with 20% of couples with young children, 16% of couples with older children, and 9% of retirees.
The findings were based on a survey of 1,500 households and show that retirees (5.56 out of 10) and couples with older children (5.15) are households most comfortable with their level of savings.
Click to enlarge
<a title="Click to enlarge" rel="shadowbox" href="/images/stories/2012/09/meoct1.jpg"><img src="/images/stories/2012/09/meoct1thumb.jpg"></a>
Source: ME Bank
Evidence of a lack of a financial buffer for many Australian households comes a day before the RBA makes a decision about whether to lower the cash rate at its October monetary policy meeting.
A 25-basis-point rate cut would cut mortgage repayments by about $50 a month on a $280,000 variable mortgage.
It also provides some granularity to ABS household savings data, which shows that the saving rate from current household disposable income was at about 9.5% in the first half of 2012, relatively high by historical standards.
Jamie McPhee, CEO of ME Bank, says the findings indicate large segments of the Australian population are finding it difficult to save from current income.
“A savings buffer is critical if households lose an income and unsurprisingly it is those households who have low comfort with their level of savings who also report they would struggle to manage if they lost their income.”
“Banks have a responsibility to help people save through helping customers better understand their finances, providing lower cost banking products, and being straightforward and responsible in their interactions with customers,” he adds.
Despite the struggle for many to save money, the report found an overall improvement in household financial comfort, which increased to 5.39 (out of 10) in June 2011 from 5.20 in October 2011 as measured by ME Bank’s Household Financial Comfort Index.
The index measures overall household financial comfort, by asking respondents to estimate their financial comfort as well as their expectations and confidence across 11 measures, and the gap between perceived financial comfort and an objective measure of their actual financial situation.
The index also showed household financial comfort is influenced by employment status, with part-time (4.87 out of 10) and casual workers (5.07 out of 10) having the lowest financial comfort of people with jobs, while unemployed people (4.40 out of 10) had the lowest financial comfort of all.
Superannuation was shown to be the most significant driver of higher levels of financial comfort, with high comfort levels (greater than eight out of 10) observed for households with super balances of greater than $200,000.
On a state-by-state basis ACT households are the most financially comfortable (6.22 out of 10) followed by Western Australia (5.64), Victoria (5.62) and Tasmania (5.60), which are all above the national average (5.39).
Both Victorian households and Tasmanian households recorded an improvement in financial comfort compared with the October index.
South Australians are the least comfortable with a comfort rating of just 4.84
“The fall in financial comfort for South Australian households reflected deterioration in all components of the Index and was also related to greater perceived difficulties in finding a job in South Australia compared to the rest of the country,” say McPhee.
“Financial comfort remained fairly stable for New South Wales and Western Australia, with the former less comfortable than Australia as a whole and the latter significantly more comfortable.
“Financial comfort for Queensland households is similar to Australia as a whole, reflecting a significant improvement up from a low in October 2011 that was associated with the earlier negative impacts of last year’s widespread flooding and Cyclone Yasi," he says.
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lschlesinger-FZcF9M3vE6

Half of households just managing to pay mortgage and other bills: ME Bank survey

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ANZ recorded a lift in its customer satisfaction rating in August, reversing a slide that began soon after the bank announcing that it would make interest rate decisions independently of the RBA.
The move to go it alone from the RBA since January has been widely described as a poor public relations move.
ANZ’s customer satisfaction rating improved by 0.8 points – it still remain in fourth place on 73.9% but is only just behind Westpac on 74.7%, according to the latest Roy Morgan Research survey.
All the major banks improved their customer satisfaction ratings over August.
Click to enlarge
<a href="/images/stories/2012/09/morganoct1.gif" rel="shadowbox" title="Click to enlarge"><img src="/images/stories/2012/09/morganoct1thumb.gif"></a>
NAB extended its lead as the major bank with the most satisfied customers, recording the biggest improvement over the month with a 1.3-percentage-point gain to 79.8%.
NAB leads the big four for both the most satisfied home loan and non-home loan customers.
NAB has had the lowest standard variable rate of the major banks for the past three years and has committed to maintaining this position throughout 2012 recorded the biggest improvement coming from NAB customers who increased by 1.3% points to make them a clear leader on 79.8%.
CBA remains in second place with 77.8% satisfaction but fell further behind NAB during August because it only showed a 0.2-percentage-point improvement.
But it remains well behind NAB in customer satisfaction for home loan customers (-3.5% points) and to a lesser extent their non-home loan customers (-2.1% points).
In August the business customers of the big four banks all showed a decline in satisfaction, which was in stark contrast to the improvement they all showed among their personal customers.
NAB shows the biggest gap in the satisfaction rating between personal and business customers, with a 16.7-point lower rating among their business customers. Westpac remains the clear leader among the big four with 66.6% business customer satisfaction, but Suncorp is the best performer among the major banks, with 72.1%.
Norman Morris, industry communications director at Roy Morgan Research, says the widening gap between satisfaction levels of the major banks personal and business customers should be of major concern as it is potentially an indication that in this uncertain economic environment more focus may have been placed on the relative safety of the personal bank customers at the expense of business.
“As a result, when the business outlook turns around the banks will have considerable ground to make up in order to gain and retain customers,” he says. 
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ANZ halts slide in customer satisfaction but NAB still best among mortgage holders: Roy Morgan Research

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The majority of economists expect the Reserve Bank to wait until the November Melbourne Cup day meeting to cut the cash rate, according to the latest Bloomberg poll.
Nineteen out of 28 economists polled by Bloomberg ahead of Tuesday’s monetary policy meeting expect the RBA to leave the cash rate on hold at 3.5%.
The major banks are giving no help with direction with two (ANZ and Westpac) expecting the RBA to cut the cash rate to 3.25% and two (Commonwealth Bank and NAB) tipping no change.
<a target="_blank" href="/news">Both ANZ and Westpac changed their minds last week </a>from a cash rate hold to a rate cut.
Others tipping an October rate cut include AMP Capital (Shane Oliver), Market Economics (Stephen Koukoulas), Macquarie Research, Moody’s Economy.com and UBS.
Economist Adam Carr – not polled by Bloomberg – is definitely not entertaining a rate cut next week.
“RBA should be hiking rates 25 with growth as strong as we've got! Crazy that they're even discussing cuts," <a href="https://twitter.com/AdamCarrEcon">he tweeted.</a>
November rate cut expectations are much stronger with 18 out of 28 economists tipping the Reserve Bank to continue to loosen monetary policy.
The RBA will make its decision at 2.30pm on October 2.
An earlier version attributed an Adam Carr tweet to AFR columnist Christopher Joye.
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Two-thirds of economists tipping rate hold next week, with the major banks divided: Bloomberg 

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May and June rate cuts have yet to stimulate a pick-up in mortgage lending.
According to  the latest RBA figures, housing credit increased by just 0.3% over August, matching  an increase of 0.3% over July.
Over the year to August, housing credit rose by 4.8% – the weakest annual growth in records going back 34 years.
“Housing credit has lost momentum under the weight of earlier tight monetary policy with the sector facing a number of headwinds,” notes Westpac.
The bank says owner-occupier credit is particularly subdued as the household sector continues to deleverage.
 “Three month annualised growth is now 3.1%, moderating from 6.9% at the end of 2010.
“In recent months many have maintained mortgage repayments at current levels, notwithstanding interest rate reductions. This results in a more rapid paying down of the loan.
“The investor market has been a little more resilient, with credit to investors up 5.4% over the year and 5.5% annualised over the last three months. 
“Monetary policy moved into the expansionary zone with the RBA's May and June rate cuts and further rate cuts are in prospect. We expect a lift in housing credit growth over the year ahead as people respond to the improvement in housing affordability. Although, a sustained strong upswing is unlikely in the current environment,” says Westpac.
Total credit provided to the private sector by financial intermediaries rose by 0.2% over August 2012, after rising by 0.2%over July.
Over the year to August, total credit rose by 4.1%.
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Mortgage lending up just 0.3% in August as owner-occupiers continue to deleverage: RBA 

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Unsecured creditors of Provident Capital have voted today to maintain Tony McGrath and Joseph Hayes of McGrath Nicol as joint and several voluntary administrators of the collapsed fund manager and non-bank lender.
McGrath Nicol were appointed by Australian Executor Trustees Limited (AET) on September 18.
AET represents debenture holders and successfully petitioned the Federal Court in July to place Provident in receivership and to freeze its mortgage funds.
Phil Carter, Tony Sims and Marcus Ayres of PPB Advisory <a href="/news">c</a><a target="_blank" href="/news">ontinue to represent AET debenture holders as receivers and managers of Provident Capital </a>and to seek to sell properties secured against loans to pay back $70 million owed to Bendigo Bank and then re-start payments to debenture holders.
Debenture holders are secured creditors.
“The Voluntary Administration process is another step which AET has undertaken to preserve potential actions that the Company may have against third parties which could give rise to future recoveries to repay debentureholder claims,” explains PPB Advisory.
“It also allows unsecured creditors to lodge their claim against the company.
“As all Debentureholders are secured creditors by virtue of AET’s security interest, individual debentureholders are not required to prove their claim in the Voluntary Administration, nor are they required to vote at any meeting of creditors.
“Rather AET in its capacity as security trustee will represent all debentureholders in the voluntary administration process.
“Control of the Company’s assets and business operations will otherwise remain with the receivers and managers.
“Any updates on the status of the Receivership will be communicated directly to debentureholders via post or on our website," sasy PPB Advisory.
All creditors will receive a detailed report from McGrath Nicol on October 17 regarding the company’s affairs and recommendations as to its future, which could include Provident being liquidated.
A second statutory meeting of creditors is due to be held on October 24 where creditors will vote on the recommendations made by McGrath Nicol.
A decision on Provident’s future will be made at the second statutory meeting.
Tell us what you know about the Provident collapse.
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Unsecured Provident Capital creditors meet

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The Reserve Bank is likely to leave interest rates on hold at its October monetary policy meeting next week, though it will be a close call, says HSBC Australia chief economist Paul Bloxham.
Bloxham says with inflation low, the RBA has scope to cut rates if it needs to.
“But we don’t think the hurdle has been met for a cut next week.
“We still favour a cut in November, assuming China’s economy does not show definite signs of recovery, and think that the 100 basis points of loosening priced in over the next year is too much," he says.
In his last RBA bulletin before Tuesday’s monetary policy meeting, Bloxham notes that housing prices are lifting, with a “solid rise in prices in September; home auctions in Sydney and Melbourne in recent weeks have seen rising clearance rates, a signal of improving turnover.
“Building approvals for housing are past their trough. Business credit has been growing in recent months, after falling in recent years.”
He has also not been swayed by the<a href="/news"> likes of Westpac’s Bill Evans</a>, who shifted his view last week from a November rate cut to an October rate cut.
Other economists tipping a rate cut next week include AMP Capital’s Shane Oliver, Stephen Koukoulas from Market Economics, Dominic Bryant from BNP Paribas Asia and ANZ Research.
Bloxham says there are two narratives the RBA board is following that will dictate its decision-making – where the global economy is heading and how previous rate cuts are impacting locally - and says other economists and commentators are over-analysing speeches and statements made by the central bank.
“Reading more into the RBA’s recent individual word choices, or phrasing, is false precision,” says Bloxham.
On the global front, Bloxham says the mid-year rate cuts of 75 basis points in May and June were made to get the RBA “ahead of the game” and that the “more subdued global outlook was needed to justify the current policy stance”.
Further deterioration globally would be necessary for the RBA to contemplate a rate cut.
“Globally, we think things are about the same as they were last month, on balance, from Australia’s perspective. China’s PMI (manufacturing index) was stable, commodity prices bounced back a little and QE3 (the US government bond-buying program) has removed some of the downside risk of a sharper US slowing. European conditions have weakened, but probably no more than expected,” says Bloxham.
Domestically, Bloxham says the RBA narrative has been that “the full effect of the previous cuts is yet to flow through, though they noted tentative signs that monetary policy is supporting the housing market and lifting business credit”.
“Domestic indicators suggest growth has been modest into the third quarter of 2012. Retail sales fell in July, but the RBA told us their liaison suggested sales rose in August.
“Business conditions and confidence tracked broadly sideways into August, and consumer sentiment has been steady. Employment and hours worked eased in August, but the unemployment rate remains low at 5.1%, despite RBA forecasts that it would head towards 5.5% in the second half of 2012.
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Stronger housing market among factors that will cause the RBA to keep the cash rate on hold next week: HSBC’s Paul Bloxham

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Since the GFC Australians have paid down a massive amount of their debt. So why have we seen record savings over the last four years? 
Well, consider this. 
Over the last four years we had predictions by some analyst of falls in property prices or at the very least subdued property prices. There are mixed predictions moving forward. Some are saying there won't be much growth for several years to come. 
If there is no growth it's much better to pay down loans because if you are not paying interest at say 6.15% then you are earning 6.15%. 
There are not many investments that are currently paying 6.15% return on your investment. 
Once the property market experiences growth again you will see investors going back to interest-only loans. 
At a normal long term capital growth of 8% per year plus a net rental return of 4%per year net giving a total return of 12% per year, it's better not to pay down the principal but to pay interest only. 
Instead of paying the principal back you would use the principal payments to cover another interest-only loan to buy another property. 
Two properties giving a return of 12% per annum less interest of 6% per annum gives you a net return on two properties instead of one property. This makes sense in a growth environment. 
But this does not make sense in a declining or flat environment. 
So one needs to roll with the punches. 
The rule of thumb is: 
1. In a growth environment pay interest only and maximise your cashflow to increase your asset base. 
2. In a down market or subdued market pay down the principal. It's the best return on your cash you will get.
Ed Chan is a founding partner of <a target="_blank" href="https://www.chan-naylor.com.au/">Chan and Naylor</a> accountants and a leading property tax specialist. He has co-authored three best-selling books as a seasoned property investor who understands the relationship between property investment and tax.
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echan-hSGJw4wwC5

When property investors should pay principal and interest on your mortgage

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High land prices have all but killed the Australian housing industry.
Lower housing starts has led to lower GST revenues (house construction attracts full GST), and lower stamp duty receipts are crippling state budgets and cruelling the chances of low and middle income earners to get a start in the housing market.
What has caused this slump in housing starts? Land prices.
Raw land for new housing developments should be close to its agricultural value – in other words, around $10,000 per hectare. But land released for residential development fetches up to $1 million per hectare – 100 times the agricultural price.
Government land management agencies and private land developers may well argue a lot of land has been released for residential development, but clearly it is not enough.
Only when urban growth boundaries are removed will we know a piece of land’s true value. It will then be a trade-off between price and distance. People may be prepared to travel another 10 or 15 minutes by car (10 to 20 kilometres) to get a cheaper block.
To highlight the “‘X’ years supply of land available” argument, I heard a state bureaucrat say recently that the government had released enough land for 15 years’ supply. I raised my hand and asked “15 years’ supply – at what price?” He didn’t know what I meant. I said “at $200,000 a block it may well take 15 years to sell. So why don’t you double the price and then you’ll have 30 years’ supply?”
These points highlight the fact that, as with most central planning, housing planning is based on a fundamental flaw – that price does not matter. But as we know, price does matter. Imagine the demand for housing if land was $100,000 per block cheaper. Think LCD, LED and plasma TVs over the past five years.
Australia does not have, and never has had, a housing affordability problem, it has a land affordability problem. The cost of building a new house has hardly moved in 20 years. Land prices however have skyrocketed. By restricting the amount of land available on the urban fringes of our cities, state governments have sent the price of entry-level housing through the roof.
The reasons state governments give for these restrictions all centre on urban planning. They have persisted with their policies of urban densification (squeezing more and more people into existing suburbs), an idea that has failed all over the world.
 
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Whether it’s traffic congestion, air pollution, the destruction of bio-diversity or the unsustainable pressure on electricity, water, sewage or stormwater infrastructure, urban densification has been a disaster. The evidence is overwhelming; urban densification is not good for the environment, it does not save water, it does not lead to a reduction in motor vehicle use, it does not result in nicer neighbourhoods, it does not stem the loss of agricultural land, it does not save on infrastructure costs for government and, worst of all, it puts home ownership out of the reach of those on low and middle incomes.
State governments use urban planning laws to restrict the amount of fringe land available and then drip feed it through their land management agencies to a land- starved housing industry at inflated prices. Hmmm. After a change of state government a few years ago, a former cabinet minister was asked why her government didn’t release more land to kick-start the housing industry. She replied: “We needed the money.” So much for urban planning.
And of course land developers with massive land banks on their books urge state governments to maintain the scarcity to maintain the ‘value’ of the developers’ inventory. Developers would be better off if they supported the removal of urban growth boundaries and allowed more broadacre land to come onto the market, which they could buy at greatly reduced prices. With land prices significantly lower than they are today it wouldn’t take long for the industry to recover. Until land prices fall, there will be no recovery.
The Australian housing industry is building 40,000 fewer homes a year than it should be. That’s more than $10 billion worth of work a year the industry is missing out on. That’s a lot of bricks, concrete, timber, tiles, steel and, of course, labour.
Governments and industry associations have known for years this was coming but just played footsies with each other – read US economist George Stigler’s book Regulatory Capture to understand how and why this happens.
Australia’s economy has been seriously distorted due to a massive over-investment in household debt. We have a housing industry on its knees. Getting all this back into alignment with reality will take time, but it is a realignment that is necessary.
We cannot continue to deny the next generation a home of their own merely to satisfy the indulgences of urban planners and state government treasury officials.
Bob Day AO is managing director of national home builder <a href="https://www.homeaustralia.com.au/" target="_blank">Home Australia</a>
This article originally appeared on <a href="https://www.businessspectator.com.au/" target="_blank">Business Spectator.</a>
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High land prices are killing the housing construction industry: Bob Day

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The procession of mortgage lenders cutting fixed rates has continued, with Suncorp Bank reducing its three-year fixed home loan to 5.48% per annum effective today.
The bank now offers the lowest three-year fixed home loan of both the major banks and the regional banks.
Yesterday <a href="/news">St George cut its three-year fixed home loan to 5.49%</a> under its Advantage Package offering. 
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<tr>
<td valign="top" width="242">
 
</td>
<td valign="top" width="242">
 Three-year fixed
</td>
</tr>
<tr>
<td valign="top" width="242">
1. Suncorp Bank
</td>
<td valign="top" width="242">
5.48%
</td>
</tr>
<tr>
<td valign="top" width="242">
2. Bankwest
</td>
<td valign="top" width="242">
5.54%
</td>
</tr>
<tr>
<td valign="top" width="242">
3. BOQ
</td>
<td valign="top" width="242">
5.55%
</td>
</tr>
<tr>
<td valign="top" width="242">
4. St George
</td>
<td valign="top" width="242">
5.49%
</td>
</tr>
<tr>
<td valign="top" width="242">
5. CBA, Westpac and NAB
</td>
<td valign="top" width="242">
5.74%
</td>
</tr>
<tr>
<td valign="top" width="242">
6. ANZ
</td>
<td valign="top" width="242">
5.79%
</td>
</tr>
<tr>
<td valign="top" width="242">
7. Bendigo
</td>
<td valign="top" width="242">
5.94%
</td>
</tr>
</tbody></table>
“The advantage of the Suncorp Bank three-year fixed-rate is that it can be taken as part of a package or as a standalone rate, unlike other offers that only allow discounted rates as part of a package,” says Suncorp Bank’s  Steven Heavey.
“The benefit of a fixed-rate loan is that you know exactly how much you have to repay each fortnight or month and can budget accordingly. This feature can be especially beneficial for first home owners as they adjust to having a mortgage.
“One disadvantage, however, is the loss of flexibility. For example, you generally can’t make additional repayments on fixed loans.
“If you want to hedge your bets, consider partially fixing your loan and keeping the rest at a variable rate,” he says.
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Suncorp Bank cuts three-year fixed-rate home loan to 5.48%

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Earlier this month, the big four banks gave their predictions on the official cash rate’s likely movements over the next year. Although none of them predicted an increase, the figures were startlingly different. 
NAB: No change
Commonwealth: -0.25 percentage points
ANZ: -0.5 percentage points
Westpac: -0.75 percentage points 
The big four’s predictions varied by three quarters of a percentage point – demonstrating that even chief economists, who are highly knowledgeable about and attuned to interest rate cycles, are really only making an educated guess. 
Small wonder that most home buyers and investors are confused about interest rate movements. It doesn’t help, of course, that most people decide to choose or switch to a fixed rate based on commentary about likely variable rate movements. 
The fixed-rate interest cycle always runs about six months ahead of variable-rate interest cycle. That’s why, even though the big four’s recent variable rate predictions differed wildly, their fixed rates are almost identical. Their current three-year fixed rates range from 5.59% to 5.64% – hardly a piece of paper between them. 
Fear and greed: the sure routes to poor decision-making 
History tells us that when the variable rate is rising, a fear of further rate rises drives people to lock in their interest rates. By contrast, when the variable rate is falling, greed drives them to avoid locking in their interest rate. In both cases, they are motivated by a desire to get the timing exactly right. 
The following graph from RP Data shows the percentage of fixed term loans as a proportion of all home loans over the last 10 years.
<img src="/images/stories/2012/09/xaviersept25.jpg">
The graph shows that in 2007, when the share market was booming and interest rates were at 7%, around a quarter of all new loans were fixed. Because a fixed interest rate is essentially a hedge against future variable interest rate rises, most people would have fixed their home loan at this time based on a fear that variable rates would keep rising. 
By contrast, in 2009, when the cash rate was down at 3%, less than 5% of new loans were fixed. Based on a desire to obtain the lowest possible variable rate, the other 95% would have waited until they believed variable rates had hit bottom before making a decision about fixing their loans.
 
<hr class="system-pagebreak">
Fixed rate cycle set to bottom out 
Home buyers and investors who wait to fix their loan until the variable rate bottoms out will always be around six months behind the fixed interest rate cycle – meaning they will never fix at the most advantageous time. 
The current standard variable rate home loan for all the major banks is around 6.9%, and most home loans include a 0.7 percentage point discount off the standard variable rate. This means most people are on a variable rate of 6.2%. 
Even if the Reserve Bank cuts the cash rate by the most bullish prediction of 0.75 percentage points over the next year, and even if all the banks pass on the rate cut in full (which, on recent form, isn’t likely), this will only bring retail variable rates down to a similar level as the current three-year fixed rate. 
What's more, the best fixed rate of any major lender in the downwards phase of the last fixed rate cycle was around 4.99%; and that offer only lasted a couple of weeks. There is no doubt that we are very close to the bottom of the current fixed rate cycle. Historically speaking, this means the current three-year fixed rates are extremely good value. 
The bottom line? 
Any decision about whether or not to fix your interest rate should always be guided by your individual circumstances. However no one, not even the big four’s chief economists, ever knows for sure what will happen to the variable interest rate. If it is right for you and you lock in now, you can be sure you are not making a big mistake. 
Yes, lenders may put slightly better offers on the table over the next six months, but that won't mean you've made a blunder. You might not have gotten it 100% right, but you might have gotten 90% right — and as Warren Buffett says, I'd rather be vaguely right than precisely wrong! 
Xavier Perronnet is a director of <a target="_blank" href="https://www.ipropertyplan.com.au/">iProperty Plan</a>, which provides independent analysis and tailored advice to investors and home buyers.
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