<a href="https://www.apartments.com.au/developers/s-p-setia">SP Setia</a> has lodged plans for a $750 million, three-tower mixed-use precinct that would complete the long-running redevelopment of Carlton's former Carlton United Breweries site.

The proposal at <a href="https://www.apartments.com.au/new-apartments/185-195-queensberry-street-carlton-vic-3053">46-78 Bouverie Street and 185-195 Queensberry Street</a> spans a 6,468 sqm site, the last remaining undeveloped parcels within the former brewery's 2007 masterplan.

Designed by <a href="https://www.apartments.com.au/architects/cox-architecture">COX Architecture</a>, the development will comprise two purpose-built student accommodation towers and a third build-to-sell apartment tower above a shared commercial podium and basement.

Across the three towers, SP Setia is proposing 606 build-to-sell apartments and 1,499 student accommodation units containing 2,009 beds.

The apartments will sit in the tallest tower, which will rise nearly 200m and 55 storeys. It will become&nbsp;one of the more substantial new build-to-sell apartment projects at the northern edge of Melbourne's CBD.

The apartment mix is weighted toward smaller inner-city product, with 188 studios, 206 one-bedroom apartments, 192 two-bedroom apartments and 20 three-bedroom apartments

<img alt="First look: SP Setia plans three-tower finale for Carlton’s former CUB precinct" data-entity-type="file" data-entity-uuid="8271bc87-1b0a-41b7-ac73-a425ee375261" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/3_2.png?VersionId=G4lw23o90B1boX4k4dj7rdz2ZEajS9wy" />

Part of the precinct will be a large-scale&nbsp;3,684 sqm supermarket and a further 2,198 sqm of speciality retail, creating close to 5,900 sqm of new commercial space within the precinct.

But one of the biggest components of the proposal is what sits between the buildings.

Around 4,650 sqm, or roughly 72 per cent of the site, will be publicly accessible open space, incorporating plazas, pedestrian connections, landscaped laneways and retail spill-out areas.

The ground plane is intended to finally complete pedestrian connections envisaged when the CUB masterplan was first approved nearly two decades ago, stitching together Victoria Street, Queensberry Street, Bouverie Street and Swanston Street through the former brewery precinct.

Urbis said the development would "complete the CUB precinct", with the public realm providing important north-south and east-west connections through what is currently the final undeveloped portion of the masterplanned site.

SP Setia is also exploring a new linear park within the Bouverie Street road reserve, with the concept to be developed further with the City of Melbourne through the planning process.

The proposal is being pursued through the Victorian Government's Development Facilitation Program under Clause 53.23 for significant residential development with affordable housing.

The planning report acknowledges the proposed heights exceed those contemplated under the original Comprehensive Development Plan and masterplan, but argues the built-form context has changed considerably over the past two decades.

Urbis said the three towers would instead create a stepped transition between Carlton and the Hoddle Grid, rising progressively from the 94.1-metre Tower One along the Queensberry Street edge to the 199.44-metre Tower Three closer to the established CBD-scale buildings to the south.

<img alt="SP Setia" data-entity-type="file" data-entity-uuid="e885a07a-592c-40fc-bf82-e6dbaf32da54" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-21%20at%208.52.24%E2%80%AFAM.png?VersionId=7s_ErUkSKAdY1mAWp3GRZgMNCGtwhk5m" />

SP Setia plans to deliver the development across three stages.

Stage One would deliver the basement, podium and retail areas for the entire precinct alongside the first student tower. Tower Two would follow in Stage Two, before the 606-apartment Tower Three is delivered as the final stage.

If approved and delivered, the project would close out a redevelopment process that has been underway since the former brewery masterplan was approved in 2007, adding more than 2,600 student beds and apartments to a precinct already home to Swanston Central, the Barak Building, RMIT Design Hub and several large student accommodation developments.

&nbsp;

&nbsp;

Joel Robinson

SP Setia plans three-tower finale for Carlton’s former CUB precinct

Melbourne developer Lowe Living is seeking to add to its growing bayside apartment pipeline, filing plans for a boutique eight-residence development in tightly held Middle Park.

Lowe Living, which has built much of its development portfolio across Melbourne's affluent bayside and south-east suburbs, is behind the plans for the 730 sqm site at <a href="https://www.apartments.com.au/new-apartments/123-125-erskine-street-middle-park-vic-3206">123-125 Erskine Street</a>, just off Armstrong Street and within the Armstrong Street Neighbourhood Activity Centre.

The developer is seeking approval for a five-storey residential building above two basement levels, with just eight large-format apartments and 18 car spaces.

“This is a deliberately very different proposition for us,"&nbsp;Tim Lowe, Co-Founder of Lowe Living, said.

"Eight residences is exceptionally boutique, but that's precisely what this site calls for.

“There is a strong community in Middle Park and the surrounding suburbs who have spent decades building a life here. They no longer want the maintenance of a large period home, but they aren't prepared to compromise on space, quality or location. We think there is a real opportunity to capture that hyper local market. A site like this rarely comes to market.”

<img alt="Lowe " data-entity-type="file" data-entity-uuid="875fe572-0f14-4d90-9e11-55b28dd07731" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-21%20at%208.42.49%E2%80%AFAM.png?VersionId=GDNQRv9BfpR9r1zkZ5UDyUM4ZvpIksut" />

The low-density proposal has been designed by Cera Stribley and is being progressed through the Victorian Government's Great Design Fast Track pathway, having already secured eligibility from the Minister for Planning.

The Office of the Victorian Government Architect supported its eligibility after finding the proposal demonstrated consistency with the program's seven design principles, while the project's financial feasibility has also been independently confirmed by Invest Victoria.

The project is targeting the downsizer market, with the planning documents describing the homes as larger-format residences and noting the two penthouses could otherwise have been configured as four separate apartments.

<img alt="Lowe 2" data-entity-type="file" data-entity-uuid="60ab0987-2da6-4175-adac-315dcf6053c6" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-21%20at%208.43.15%E2%80%AFAM.png?VersionId=bOCPH0B2MFwlmaRW.TTCF9TzyifgVoQI" />

The site has dual frontage to Erskine Street and Canterbury Place and currently comprises a collection of commercial buildings used as offices, including a former heritage bakehouse, a former stable, a later gabled addition and a central courtyard.

It sits within the Commercial 1 Zone and the Armstrong Street Commercial Precinct heritage overlay, with the existing property classified as a contributory heritage place.

Heritage has subsequently played a significant role in Cera Stribley's design.

The front section of the former bakehouse facing Erskine Street will be retained, including its return walls, street-facing hipped roof and chimneys, while the Erskine Street façade and part of the western return wall of the former stable will also be incorporated into the new development.

Levels four and five will be set back five metres from the retained stable façade, while bricks removed through demolition are proposed to be salvaged and reused within the new building where possible.

<img alt="Lowe 3" data-entity-type="file" data-entity-uuid="e97927a9-a2de-4a0f-83b6-65451238abfa" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-21%20at%208.43.06%E2%80%AFAM.png?VersionId=VR44AChLrX9q1XPB9GvVQV.ALXXbe4gC" />

Rather than presenting as a single five-storey building to Erskine Street, Cera Stribley has broken the development into a series of distinct forms.

A three-storey infill element will sit between the retained bakehouse and stable façades, with the upper levels recessed behind the heritage fabric. Canterbury Place will similarly feature two three-storey podium forms, separated by a central pedestrian accessway, before the upper two levels step back from the street.

A pedestrian through-link will run through the centre of the project between Erskine Street and Canterbury Place, creating entrances from both sides of the site and introducing landscaping and communal areas through the ground plane.

Landscape architect Acre has designed planting across the ground level, private terraces and upper levels, including a feature canopy tree at level three and integrated planting and arbours across the level four terraces. Five existing Erskine Street trees are proposed to be retained.

Sustainability is also a significant component of the Great Design Fast Track application. The apartments are targeting an average eight-star NatHERS rating, with no residence below 6.5 stars, while the project has achieved a 75 per cent BESS score. Seven of the eight apartments are designed for cross-ventilation, with the remaining residence using mechanically assisted natural ventilation.

The plans also incorporate an 8kWp rooftop solar system, a 5,000-litre rainwater tank and infrastructure allowing future electric vehicle charging for every residence.

Lowe has a strong portfolio across Melbourne's blue-chip suburbs. They recently launched <a href="https://www.apartments.com.au/new-apartments/jardin-house-by-lowe-living-camberwell-335-camberwell-road-camberwell-vic-3124">Jardin House by Lowe Living</a> in Camberwell, their first development in the Stonnington LGA.

Lowe Living unveils Middle Park apartment development

Article summary

<ul data-end="888" data-start="289">
	<li data-end="442" data-section-id="8tsh6o" data-start="289">DVB Projects is preparing to launch its second Gold Coast apartment development, with demolition now underway at 137 Old Burleigh Road, Broadbeach.</li>
	<li data-end="573" data-section-id="1nyxl3e" data-start="443">The 34-level tower will comprise just 49 ultra-luxury residences, including half-floor, full-floor and penthouse apartments.</li>
	<li data-end="717" data-section-id="oiyimj" data-start="574">The launch follows strong demand at DVB's nearby Sea Glass project, which is more than 50 per cent sold and currently under construction.</li>
	<li data-end="888" data-section-id="epk9o9" data-start="718">The development adds to the transformation of Old Burleigh Road, with premium beachfront apartment projects continuing to reshape the tightly held Broadbeach strip.</li>
</ul>

<a href="https://www.apartments.com.au/developers/dvb-projects">DVB Projects</a> is preparing to launch its second Gold Coast apartment development, with demolition now underway on the Broadbeach site as the Sydney developer moves closer to bringing the ultra-luxury project to market.

The 34-level tower at <a href="https://www.apartments.com.au/new-apartments/137-old-burleigh-road-broadbeach-qld-4218">137 Old Burleigh Road</a> will comprise just 49 residences, ranging from half-floor apartments through to full-floor homes and a penthouse. The launch follows the strong sales performance of DVB's nearby Sea Glass development. More than half of the apartments at Sea Glass, on the other side of Broadbeach, have been snapped up, well ahead of its late 2027 completion

<img alt="DVB Projects to commence demolition on $320m Broadbeach luxury tower" data-entity-type="file" data-entity-uuid="2944b4be-c84e-4b54-8dc1-c712e76704c0" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/E02_Exterior_Street%20Level%20Entrance.jpg?VersionId=YoNig7pRdrE3HCue7sUj78LzJteeQf3H" />

The start of demolition at 137 Old Burleigh Road signals DVB Projects’ underlying confidence in the Gold Coast’s luxury beachside apartment sector.

“We see the Gold Coast as one of the most compelling lifestyle markets in Australia, particularly at the premium end where demand continues to deepen,” said Dean Brown, Managing Director of DVB.&nbsp;

“This project has been carefully designed to respond to that demand - delivering large-format residences with a level of quality, privacy and amenity that is still relatively rare in the apartment market on the beachside."

Brown says the site itself is "exceptional."

"Old Burleigh Road is one of the most tightly held beachfront strips, and opportunities to deliver a project of this scale and calibre in this location are extremely limited.”

<img alt="DVB Projects to commence demolition on $320m Broadbeach luxury tower" data-entity-type="file" data-entity-uuid="398f377a-c037-455e-9250-0c5e0d84c35b" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/I12_FF%20Balcony.jpg?VersionId=NwOiRWGMubR1c8wthuEfggklcja7al9." />

The project will comprise 40 half-floor residences of approximately 260 sqm, alongside eight full-floor residences spanning around 524 sqm.

A single penthouse will crown the building, featuring a private pool, barbecue area, indoor gym and dedicated entertaining spaces.

Residents will have access to a resort-style suite of amenities, including a 20-metre pool with daybeds, a gymnasium, hot and cold plunge pools, a sauna, and private residents’ lounge and dining facilities.

<img alt="DVB Projects to commence demolition on $320m Broadbeach luxury tower" data-entity-type="file" data-entity-uuid="d1642bb0-9a66-4427-a022-dfc0988c6287" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/A02_Pool%20to%20View.jpg?VersionId=c0IXPyn_Gp_Kn3XCwzMrqIVkAdCEwVXP" />

Sales agent Todd Matheson, of <a href="https://www.apartments.com.au/project-marketer/pezet-matheson">Pezet Matheson</a>, which is marketing both 137 Old Burleigh Road and Sea Glass, said 137 Old Burleigh Road would address a clear gap in the market for genuine luxury products.

“There are very few opportunities on the Gold Coast where buyers can secure a residence of this size and quality in a new building,” Matheson said.

“What we’re seeing is a growing cohort of downsizers and interstate buyers who still want space - they’re not willing to compromise on living area, entertaining or finishes.

“This project has been designed with that buyer in mind. It offers the scale of a home, combined with the convenience and security of apartment living, in one of the coast’s most desirable positions.”

<img alt="DVB Projects to commence demolition on $320m Broadbeach luxury tower" data-entity-type="file" data-entity-uuid="59aae0ca-5639-4320-8aca-d0bf60f48e43" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/E01_Exterior%20Hero.jpg?VersionId=DS8Zfy2WtgUEtdfe0TEUuf1W1GfcZq8S" />

Located on a 1,156 sqm site one block from the beachfront, the development will replace an ageing walk-up building and is expected to contribute to the ongoing transformation of the Old Burleigh Road strip into one of the Gold Coast’s most prestigious residential corridors.

With the development moving into the delivery phase, 137 Old Burleigh Road is slated to hit the market later this year.

[smartcode_project_cta:default project_id=145141]

DVB Projects to launch second Broadbeach apartment tower as demolition commences

<a data-end="327" data-is-only-node="" data-start="250" href="https://www.apartments.com.au/developers/norus-projects" rel="noopener" target="_new">Norus Developments</a> has lodged plans for a new apartment development in Clayton that would add further momentum to the suburb's emerging Green Street corridor.

Plans have been lodged for the consolidated site at <a href="https://www.apartments.com.au/new-apartments/1359-1365-centre-road-clayton-vic-3168">1359-1365 Centre Road</a>, where Norus is seeking approval for 218 apartments across a 12-storey apartment building designed by <a href="https://www.apartments.com.au/architects/life-architecture-and-urban-design">Life Architecture</a>.

The proposal sits within the Clayton Major Activity Centre at the threshold of the planned Green Street corridor, a landscaped pedestrian connection intended to improve links through the precinct towards Clayton Railway Station.

The development would replace the site's existing collection of low-scale residential and commercial buildings with a single consolidated building, introducing significantly greater housing density to this part of Centre Road.

A retail tenancy is proposed at ground level to activate the Centre Road frontage, accompanied by transparent street interfaces and landscaping intended to create a more pedestrian-focused edge to the development.

<img alt="First look: Norus Developments plans landscape-led apartment project for Clayton’s emerging Green Street" data-entity-type="file" data-entity-uuid="0a5a763a-d9e9-4253-af2f-88008de27ebf" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Clayton%20a.png?VersionId=S2WJJbat1XVkZwB9SnYtygirXgWHiklX" />

The building has been designed with stepped massing and upper-level setbacks to manage its transition towards surrounding residential properties. The planning report describes the approach as one that integrates the building into the landscape rather than treating landscaping as a secondary element.

"A strong landscape and public realm strategy underpins the proposal," Urbis states in the planning report.

"Public benefits include an affordable housing contribution, a new pocket park, generous landscaped setbacks, deep soil planting and integrated Water Sensitive Urban Design."

The report adds that these elements are intended to create "a permeable, pedestrian-focused ground plane that enhances walkability, supports urban cooling and reinforces the emerging Green Street character."

Biophilic and passive design principles extend through the residential levels, with planting, daylight, natural ventilation and views towards landscaped areas forming part of the amenity strategy.

Parking would be concentrated away from the public realm, with 145 car spaces proposed from the rear laneway rather than dominating the Centre Road frontage.

The proposal follows an extensive pre-application process with the City of Monash. Three formal meetings were held between the project team and Council from December 2025 to March 2026, with the scheme evolving through several concept iterations before the current design was lodged.

The project arrives as Clayton prepares for substantial change around its established activity centre and the wider Suburban Rail Loop precinct. Its position on Centre Road places the development within an existing concentration of shops, services and public transport, while the Green Street connection is intended to strengthen pedestrian access towards Clayton Railway Station.

First look: Norus plans landscape-led apartment project for Clayton’s emerging Green Street

<a href="https://www.apartments.com.au/developers/gardner-vaughan-group">Gardner Vaughan Group</a> has officially commenced construction on Bronze on Chevron, celebrating the sod turning of its first-ever Gold Coast development and marking a significant milestone in the company's continued expansion across South East Queensland.&nbsp;

Following the successful delivery of premium residential developments throughout Brisbane and the Sunshine Coast, <a href="https://www.apartments.com.au/new-apartments/bronze-on-chevron-8-mawarra-street-chevron-island-qld-4217">Bronze on Chevron</a> represents Gardner Vaughan Group's entry into the Gold Coast market. Bronze will deliver 119 one, two, three and four-bedroom apartments above two ground-level retail tenancies.

[smartcode_project:default project_id=107520 project_image_fid=367193]

The recent sod turning ceremony was attended by Deputy Mayor Mark Hammel, President of the Surfers Paradise Surf Life Saving Club, Cassandra Sedgman, project consultants, purchasers, project partners and invited guests to celebrate the commencement of construction.&nbsp;

Gardner Vaughan Group Chief Executive Officer Simon Betteridge said Bronze on Chevron represented an exciting new chapter for the business.&nbsp;

"We've spent almost four decades building homes that respond to the way people want to live, and we're excited to bring that experience to <a href="https://www.apartments.com.au/developments/chevron-island-qld-4217">Chevron Island</a>," Betteridge said.

"Bronze on Chevron is particularly significant because it marks Gardner Vaughan Group's first development on the Gold Coast following many successful projects across Brisbane and the Sunshine Coast."

[smartcode_project:default project_id=107520 project_image_fid=367183]

Betteridge said the ground breaking is a proud moment for the&nbsp;team and their purchasers, who can now see their future homes beginning to take shape.&nbsp;

"As both developer and builder, we're able to oversee every aspect of the project from design through to construction, ensuring the quality and attention to detail Gardner Vaughan Group has become renowned for."&nbsp;

Designed by acclaimed architectural practice <a href="https://www.apartments.com.au/architects/cottee-parker-architects">Cottee Parker</a>, Bronze on Chevron has been thoughtfully designed to complement Chevron Island's evolving streetscape while embracing its relaxed coastal lifestyle.

The development will offer generous residences with refined interiors, premium finishes and resort-style amenities, with completion anticipated in early 2029.&nbsp;

[smartcode_project_cta:default project_id=107520]

The development will offer generous residences with refined interiors, premium finishes and resort-style amenities, with completion anticipated in early 2029

Gardner Vaughan Group breaks ground on first Gold Coast development, Bronze on Chevron

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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Markedly fewer economists expect the Reserve Bank to cut interest rates in August following last week’s decision to keep the cash rate unchanged at 3.5% at the July 3 meeting.
Of the 25 economists surveyed by Bloomberg on July 6, just over half – 13 out of 25 – expect the RBA to cut rates on August 7.
This compared with more than two-thirds of economists (19 out 28) surveyed a week before the July 3 meeting who said the RBA would cut rates on August 7.
Among the four major banks, ANZ has shifted from expecting a rate cut in August to now anticipating rates to remain on hold. The three other major banks continue to expect the RBA to cut the cash rate in August.
The RBA monetary policy decision statement of July 3 appears to have created more uncertainty about an August rate cut.
The statement noted a “more subdued international outlook than was the case a few months ago” and said that the local economy “continued to grow in the first part of 2012, at a pace somewhat stronger than had been earlier indicated”.
It noted, however, that housing remained “subdued”.
The June statement – following the 25-basis-point cut in June – spoke of a “more uncertain international environment”, deteriorating financial market sentiment and declining house prices.
Looking beyond August, the picture is cloudier about where interest rates may be heading.
The median expectation among the 25 economists survey by Bloomberg is for just one more rate cut over the next 12 months to a cash rate of 3.25%.
However, there is a wide divergence of opinion, with a forecast range from 2.5% to 4% by the end of the financial year. Of the 25 economists surveyed, 13 expect the cash rate setting to be 3.25%, which would mean just one more rate cut.
Westpac is still forecasting a cash rate of 2.75% by year end. According to Westpac chief economist Bill Evans, a cash rate of 2.75%  would mean an average standard variable mortgage rate of between 6.05% and 6.5%, given the current gap in the cash rate and bank mortgage rates.
There is even wider divergence among economists polled by Bloomberg after June 2013. While the median remains at 3.25%, just five economists are forecasting this to be the cash rate, with forecasts ranging from a cash rate of 2.5% to 4.5%.
A separate Saturday Age survey of 22 economists compiled by Tim Colebatch forecasts an average cash rate of 3% by June 2013, equating to two 25-basis-point rate cuts.
Out of the 22 economists polled, 12, expect a cash rate of 3.25% by the end of the financial year, a view held by noted chief economists Alan Oster (NAB), Shane Oliver (AMP Capital) and Paul Bloxham (HSBC).
By far the most bearish is Neville Norman, associate professor in the department of economics at Melbourne University, who forecasts the cash rate to rise to 4.5% by year end.
Forecast of 22 economists polled by Saturday Age:
2.75% Burchell Wilson (ACCI), Des Moore (Institute for Private Enterprise), Andrew Hanlan (Westpac), Julie Toth (Australian Industry Group), Tom Kennedy (JP Morgan)
3% Brad Crofts (Australian Workers Union), Richard Gibbs (Macquarie Bank), Peter Jones (MBA)
3.25% Saul Eslake (Bank of America Merrill Lynch), Richard Robinson (BIS Shrapnel), Chris Caton (BT Financial Group), Michael Workman (CBA),  Andrew Boak (Goldman Sachs Australia), Andrew Harvey (HIA), Paul Bloxham (HSBC), Alan Oster (NAB), Hans Kunnen (St.George), Annette Beacher (TD Securities),
3.5% Jakob Madsen (Monash University)
4.5% Neville Norman (Melbourne University)
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lschlesinger-FZcF9M3vE6

Certainty of August rate cut dims as economists home in on 3% cash rate forecast by June 2013

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Upset Provident Capital debenture holders have expressed shock at the sudden collapse of the mortgage fund manager as it emerges that 85% of loans their investments funded were six months or more in arrears.
The collapse of fund management and mortgage lender Provident Capital seemingly has the hallmarks of other recent collapses including Elderslie Finance Corporation, Westpoint, Storm Financial,  and Estate Mortgage/Pyramid Building Society.
All attracted small investors with promises of high returns. The Provident investors were lending to developers with high risk, albeit offering first mortgages that totalled $97 million over the projects.
A Federal Court order remains in force that prevents the media naming any of the specific failed property projects that Provident lent against.
But as word gets out about the receivership of Provident Capital, shocked debenture holders have been contacting Property Observer concerned about their investments.
“I had absolutely no idea that the company was struggling, and I feel betrayed by the lack of information given,” said one debenture holder.
Another investor said her investment would be considered “small” by Provident’s terms, but was a “huge” one for her, “as I have very little money”.
Provident says that as of December 31, 2011 there were already 12 loans in the portfolio worth more than $2.5 million (aggregating to $69 million) and eight borrowers who owe more than $4 million each (aggregating to $62.million).
The April information booklet also reveals that:
•             Legal proceedings had commenced against eight loans in the fund with an aggregate amount owed of $6.5 million accounting for 6.7% of the loan book.
•             As of December 31, 2011, the company’s equity capital ratio was 2.73%, compared with ASIC’s benchmark ratio of 20%.
•             The arrears rate across the entire $176 million loan portfolio was 59.4% by value.
•             Provident was heavily exposed to just two markets. Out of a total of 55 loans in the fixed interest term portfolio, 30 were for properties in NSW worth $51.2 million with 15 in Queensland totalling $38.9 million.
The information booklet reveals that Provident stopped accepting new debenture holders after March 31 but would continue to accept reinvestments (rollovers) including interest from existing investors.
Of the $96 million invested by debenture holders, $63.5 million worth of investments mature between March and December 2012, $24.6 million between 2013 and 2017 and $7.6 million beyond 2017.
The receivers have expressed a hope of enabling a "meaningful" return for the 3500 investors.
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Collapsed Provident Capital debenture holders shocked as 85% of loans were six months or more in arrears

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Dim the lights, don the snuggie and pass the chocolate; Downton Abbey is back.
Amid all the mooning over Matthew and Mary, viewers may not have noticed that Downton Abbey is actually about property law. Like Jane Austen’s Pride and Prejudice, the central dilemma of the series is the existence of a <a target="_blank" href="https://legal-dictionary.thefreedictionary.com/Fee+Tail">fee tail</a>.
<img src="/images/stories/2012/07/downton1.jpg">
The fee tail stipulates that Grantham Estate cannot be left to beautiful, intelligent, spoilt Mary, but must pass to the nearest male relative, Matthew, a Manchester solicitor. Arguably worse than Austen’s odious Mr Collins in Pride and Prejudice.
Fee tails served an important purpose for a feudal system in which status and wealth were largely determined by accident of birth. Leaving land by will with an entail ensured it would pass down a specific line of descendants and not be dissipated among people unrelated by blood. In the event that a particular line of descendants stopped, the land would revert to the original donor’s family.
Fee tails suited a feudal system of land ownership, but they did not suit emerging or fully fledged capitalist democracies.
First, fee tails were economically stultifying. The interest was effectively only an interest for the life of the current entail holder and thus (invariably) he could not raise money with it, sell it or lease it for longer than his life. Not surprisingly, tenants didn’t like to invest in leases that abruptly ended when their landlord fell off his perch.
Judges and lawyers waged a war of attrition against fee tails for centuries, developing ingenious legal devices to defeat them.
On a micro level, this would give the current holder the economic freedom to deal with his land as he pleased; on a macro level, it forced land out of the hands of families and on to the emerging, free land market. The Dowager Countess engages Matthew to investigate one of these legal devices, although we can be confident that she was not interested in facilitating the onward march of modern capitalism whose values are so antithetical to her own.
Second, fee tails were not just at odds with economic freedom but personal freedom and autonomy; at the risk of understatement, values that had been gaining traction for some time. In the 17th century, the English middle classes had fought hard to free themselves, and most importantly their property, from the arbitrary interference of monarchs. In the 19th century John Stuart Mill wrote eloquently about the necessary limit of government and social power over the individual; so long as people caused no harm to others, they were free to act as they pleased. This concept underpins modern land law (as long as you don’t live in strata, but that’s another story).
As an early 20th century aristocrat, Lord Grantham’s autonomy is not threatened by the government or monarch, but it is by his own ancestors. The fee tail allowed long-dead ancestors to determine land-use and disposition for generations to come. It is an example of “dead-hand control”, the nemesis of modern property law.
There is a delicious irony in the Dowager Countess and Mary’s frustration with Lord Grantham’s inability to freely determine to whom he leaves the land.
Personal freedom is a concept they have learned from the despised middle classes, the very people they are trying to keep the land from. Further, while they would like autonomy and agency for themselves, unlike the politically progressive Lady Sybil, it is not something they want to extend to their own housemaids or chauffeur.
Lord Grantham is at least consistent in his social theory. He does not want his chauffeur to have control of his own life, but neither does he want it for himself. He believes he is the temporary caretaker of his land, not its absolute owner in any modern sense.
The fee tail dilemma is a metaphor for a family trapped between two worlds. The dying world of an aristocracy with its roots in a feudal system and the new world of the capitalist, democratic state. Fittingly, fee tails were abolished in most common law jurisdictions, including the United Kingdom, by the 1920s.
Of course the fee tail dilemma is also a metaphor for the all important dilemma of love. Should Mary marry in the tradition of her ancestors, for money, status and wealth or should she embrace the values of the modern world, exercise her personal freedom and marry for love?
We’ll all have to get back to the sofa and snuggie to find out.
Cathy Sherry is a senior lecturer in the faculty of law at the University of New South Wales.
This article originally appeared on <a target="_blank" href="https://theconversation.edu.au/">TheConversation</a>.
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cknowlton-QnEa6ntUYP

Downton Abbey a melodrama about property law – and frocks, intrigue and Matthew and Mary

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Mortgage fund manager Provident Capital was signing on small investors to its fixed-term mortgage fund with promises of returns above 9% in the months before it was placed in receivership yesterday.
Receivers from PBB have taken over the running of the company due to concerns debenture holders could be left short-changed.
Property Observer understands that 3,500 small investors have about $30,000 each invested in fixed-term products that mature at different times, with fears that Provident could run out of money to pay investors with later maturation dates.
The $120 million fund is invested in first mortgages covering residential, commercial and rural properties principally for property development.
In the December 2011 newsletter, Provident Capital managing director Michael O’Sullivan told clients: “We have recently launched a ‘lock in your rate’ campaign for our three-year and five-year fixed term investments, so that you can take advantage of our higher rates of returns before they are reduced.”
As of December 1 2011, Provident was offering new investors an annual return on maturity of 9.2% for a three-year fixed interest term and 9.55% for a five-year term.
<img src="/images/stories/2012/07/provident2.jpg">
In the December letter O’Sullivan added that Provident had a “proud track record of meeting all our investor payments on time, every time, there’s never been a better time to lock in your rates and take another fresh look at Provident Capital”.
In the same newsletter, Provident advertised its monthly income fund as offering an average annual return of 10.61% over the previous 12 months to October 2011 as well as it having previously been voted best-performing mortgage fund by Morningstar.
In its previous September newsletter, O’Sullivan told investors Provident “continues to go from strength to strength” and highlighted its “proud track record of meeting all our investor payments on time, every time during this entire period”.
Six months, later, in an information booklet published in April this year Provident said that as of December 31  the arrears rate across  its $176 million loan portfolio was 59.4% by value, of which the arrears rate for the fixed term investment funded component was 90.2%, "much of which was more than 180 days in arrears".
The lender continued to advertise its low-doc lending products through the mortgage broker channel this year, with an advertisement appearing on page six of Mortgage Professional Australia’s June 2012 issue.
<img src="/images/stories/2012/07/providentad.jpg">
The ad says Provident is offered low-doc non-conforming loans of up to $1.5 million for residential, commercial and rural purchases and promises brokers weekly commissions and no-commission claw-backs.
Non-conforming loans are generally provided to borrowers with poor or impaired credit history.
SQM research withdrew its rating and report of the Provident Capital Monthly Income Fund on June 14 a day before Provident’s $120 million debenture fund was frozen by federal court order.  The monthly income product is a seperate product to the debenture offering.
SQM withdrew its rating after downgrading the fund from 3.75 out of five to 3.25 in April, “a direct result of ongoing deterioration in the manager’s financial position and a lack of satisfactory communication from the manager on the current status of the responsible entity managing the monthly income fund”. 
SQM managing director Louis Christopher said at the time “the ongoing decline in the financial health of its manager cannot be ignored” 
A rating of 3.25 indicates that “caution is required”. 
On January 6 SQM had upgraded its rating of the fund from 3.5 to 3.75, a “good” rating and suitable for inclusion on investors’ approved product list - based on financials to June 30.
Christopher tells Property Observer SQM acted to downgrade the rating of the monthly income fund "the moment" it became aware of problems at Provident.
Provident results for the six months to December 31 (released in April 2012) reveals a loan portfolio worth $176 million
There are 95 residential loans worth just under $100 million, with 24 commercial loans worth $22 million and 17 rural loans worth $33 million.
The company made a half-year loss after tax of $9 million compared to profits of $800,000 in the previous corresponding period.
“The current economic climate presents a number of challenges. In particular, it is taking longer to recover all amounts owing where loans are in arrears and property values may not be sufficient to repay the amount owing,” says Provident
As of December 31 2011, the company’s equity capital ratio was 2.73% as compared to the benchmark ASIC ratio of 20.
The booklet notes that the “loans are designed to meet the needs of borrowers who do not fit the lending criteria of Australia’s traditional financial institutions or who simply choose not to borrow from them”.
 The Australian reported PPB Advisory partner and joint receiver Marcus Ayres as saying it would seek to recover funds by repossessing houses of defaulting borrowers and slowly releasing them into the market or by selling the defaulting loans if an investor could be found.
"This won't be a fire sale and we won't be putting all these properties out on to the market at the same time," Ayres said.
Provident has raised more than $1 billion of investor funds for investment in portfolios of registered first mortgages since 1998.
Have you invested in Provident Capital debentures or do you have a Provident Capital mortgage? Send an email to Property Observer with any news or thoughts:<a href="mailto:news@propertyobserver.com.au">news@propertyobserver.com.au</a>
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Provident Capital signing on new mortgage fund investors with 9% plus on offer in months prior to receivership

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Corporate watchdog ASIC has continued its crackdown on mortgage and savings advertised offerings that it feels may mislead consumers.
Having required <a href="https://www.propertyobserver.com.au/industry-news/asic-demands-equal-prominence-for-mortgage-comparison-rate-in-online-mortgage-advertising/2012061955177" target="_blank">mortgage lender Resi</a> to give equal prominence to mortgage comparison rates, ASIC has now prompted RAMS to change how it advertises its 5.75% savings account, which is issued by parent company Westpac.
ASIC Commissioner Peter Kell says advertisements should give balanced information to ensure the overall effect creates realistic expectations about a financial product or service.  He reminds promoters of financial services that ASIC will be regularly reviewing ads and will take action when they don’t comply with the law.
The RAMS 5.75% savings account includes a bonus 0.8%, which is only payable subject to a number of conditions being met including making a minimum deposit of $200 per month and making no withdrawals in the month.
<img src="/images/stories/2012/07/ramssaver.jpg">
The ASIC press release noted its concerns surrounding the online, television and outdoor ads, which featured a prominent headline claim offering a 5.75% interest rate, followed with smaller statements that it included a “0.8% p.a. Bonus” and “monthly deposit conditions apply”.
ASIC notes “concerns that ads promoting the online savings account were potentially misleading or likely to mislead”.
“ASIC was concerned that the ads left out important information and failed to give enough prominence to the conditions associated with the 0.8% bonus.
“Of particular concern to ASIC was that the ads did not disclose that in order to achieve the monthly bonus rate, consumers could not make any withdrawals from the account during the month,” said ASIC.
A spokesperson for RAMS says the company responded promptly to ASIC’s concerns and no customers have been adversely affected.
“ASIC advised us of some concerns relating to the prominence and completeness of conditions to qualify for the high bonus variable rate of 5.75% p.a. in our advertising.
“RAMS moved quickly to address these concerns by promptly amending all advertising including additional text and voice over to specify the conditions (such as no withdrawals during the month) more prominently in television commercials,” says a spokesperson.
ASIC recently released a   Regulatory Guide 234 Advertising financial products and advice services: Good practice guidance.
“ASIC’s guidance will help industry participants understand their obligations but we are also sending a message that we will take action in response to misleading ads for financial products and services,” says Kell.
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ASIC warns mortgage lenders over misleading advertising

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A Sony Bank online mortgage lending operation could be a profitable venture in Australia but does not pose an immediate threat to the market share of the major banks, according to analysts at Nomura.
This follows reports that <a target="_blank" href="https://www.propertyobserver.com.au/industry-news/tokyo-based-sony-bank-investigating-online-mortgage-lending-in-australia/2012070355392">Sony Bank has been granted permission by APRA to undertake a feasibility study</a> into launching an offering in Australia.
Nomura analyst Victor German says Sony Bank's success in profitably offering mortgages in the Australian market “rests on its ability to fund growth using Australia dollar-denominated deposits in Japan”.
“At the current rate of around 2% (which Sony offers in Japan for Australian dollar one-year term deposits), Japanese banks can generate returns of around 50%, while with a 3.5% [Australian cash] rate, returns are lower but still remain attractive at around 20%,” says German.
German says a bank like Sony would pose a small risk to the major banks – “even if successful, we believe it will take some time for the Japanese banks to take market share”.
However, if Australian dollar-denominated deposits in Japan become a more popular product, German says Japanese banks “could provide a cheaper alternative in the Australian mortgage market, which may result in pricing and market share pressure”.
“This however, rests on both Japanese households and the regulator being comfortable with households taking on foreign exchange rate risk,” he says.
According to German, a more profitable option than raising deposits in Japan would be for the bank to purchase residential mortgage-backed securities (RMBS).
“We estimate that return on capital would be twice as high if banks buy RMBS instead of directly offering mortgages, predominantly due to more favourable capital treatment for AAA-rated paper,” says German.
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Sony Bank online mortgage lending could be profitable in Australia: Nomura

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After each monthly board meeting, the RBA publishes its official "<a href="https://www.rba.gov.au/chart-pack/household-sector" target="_blank">chart pack</a>", which is a detailed 30-page presentation on the Australian economy that it uses to brief members. The RBA's chart pack includes one chart on Australian house prices, covering the individual capital cities, a national weighted average of the capital cities, and a rest of state index. For many years the RBA used to only use the ABS house price data in this chart. Some time ago the RBA switched to RP Data-Rismark. RP Data-Rismark's <a href="https://www.rpdata.com/research/rp_data-rismark_home_value_index" target="_blank">new daily house price index</a> is the only house price data used by the RBA in the chart pack. Specifically, the RBA takes the daily index number for the end of each month, and then seasonally adjusts the data over time. (The RBA was also consulted as part of the daily index development process.) The chart below was published by the RBA yesterday. It illustrates RP Data-Rismark's daily index data through to the end of May (i.e., it does not include the latest June data). Further to my <a href="https://christopherjoye.blogspot.com.au/2012/07/house-price-indices-for-dummies-redux" target="_blank">post here</a> on different house price measures, I would note that the RBA's team of 100-plus economists can use whatever house price data that they deem provides the best possible insights into the market. In every quarterly Statement on Monetary Policy the RBA chooses to report three different indices – from RP Data-Rismark, APM and the ABS – although the charts in the SMP, and the RBA's official conclusions in the text, all normally reference the RP Data-Rismark findings.
For the avoidance of doubt, the RBA does not rely exclusively on any one index provider. The RBA inspects and analyses at least three (i.e., RP Data-Rismark, APM and the ABS). But given the significant differences in the technical methods, it has developed preferences over time.
 
<img src="/images/stories/2012/07/rbajuly4.png" style="display: block; margin-left: auto; margin-right: auto;">
Christopher Joye is a leading financial economist and a director of <a target="_blank" href="https://www.ybr.com.au/savings/index.cfm">Yellow Brick Road Funds Management</a> and Rismark. The author may have an economic interest in any of the items discussed in this article. These are the author’s personal views and do not represent the opinions of any other individual or institution. This material is not intended to provide, and should not be relied upon for, investment advice or recommendations.
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chrisjoye-JYhJsTrNRC

The house price data the RBA uses: Christopher Joye

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Westpac is sticking with its forecast of three more rate cuts before the end of the year, taking the cash rate to 2.75% but says the RBA will need a low quarterly inflation update – due on July 27 - to move back onto its easing path.
The bank expects a 25-basis-point rate cut in August, another one in September and one more in December.
“With borrowing rates still only described as  ‘a little below their medium-term averages’, and given the range of economic threats associated with the global economy, a high Australian dollar, and cautious business and households, our view is that rates need to go down further,” says Westpac senior economist Huw McKay.
“However, our reading of today’s statement indicates that on the basis of information currently to hand, the RBA would prefer to stay on hold and assess the impact of the ‘material easing’ it has already delivered.
“For the bank to move back onto an easing path in the short term, it will need more than an accommodative (low) inflation update later this month.
“It will need further evidence of weak global growth and a rise in financial tensions; and further proof that there has been an intensification of precautionary behaviour by firms and households at home. That is a high threshold to reach within four weeks, but recent history has shown that confidence can unravel extremely quickly.”
McKay says the latest statement reveals the bank to be “far more relaxed on the domestic economy” and has a more positive outlook on international markets.
“On the international front, whereas in June the governor assessed that ‘financial market sentiment has deteriorated’; that ‘spreads have increased’ and ‘long term interest rates faced by highly rated sovereigns have fallen to exceptionally low levels’ he now notes that ‘Financial markets have initially responded positively to signs of further progress towards longer-term sustainability in European financial affairs ...’ while ‘Capital markets remain open to corporations and well-rated banks’,” says McKay.
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Westpac still expects three more RBA cash rate cuts by end of the year

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Remarks made by RBA governor Glenn Stevens in his monetary policy decision statement today after the central bank kept the cash rate on hold suggest the central bank is not predisposed to cutting the cash rate again soon, says Brian Redican, senior economist at Macquarie Bank.
“As a result of the sequence of earlier decisions, there has been a material easing in monetary policy over the past six months. At today's meeting, the board judged that, with inflation expected to be consistent with the target and growth close to trend, but with a more subdued international outlook than was the case a few months ago, the stance of monetary policy remained appropriate,” Stevens said in his statement.
Redican says there is “certainly no hint that the RBA was eagerly awaiting the upcoming CPI data (out on July 25) to confirm that inflation was low or that it would be closely monitoring international developments to ensure that the stance of policy remained appropriate”.
Ahead of the rate decision, 18 out of 28 economists polled by Bloomberg had forecast a rate cut at the next RBA meeting on August 7.
But Redican says it is Macquarie’s view that “the popularity of an August rate cut with economists could just be an artefact of recent history”.
“The market has had very aggressive rate cuts priced in over 2012 and the RBA's decision to cut rates by 50bps in May was perceived as confirming that trajectory.
“Suddenly, the debate was not whether the RBA would cut again in June, but whether they would cut by 25bps or 50bps (and possibly even more). And it was during this period that most people pencilled in an August rate cut.
“Since then, the RBA governor has delivered markets a reality check. The minutes of the June board meeting revealed that it was a toss of the coin whether the RBA would cut at all in June. And the justification for cutting in June – taking out some insurance against the risk of a European implosion – turned out to be a policy loosening for something that failed to materialise,” Redican says.
“That doesn't mean that such a move was a mistake. But presumably it does raise the bar for further rate cuts,” says Redican.
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No sign RBA is predisposed to cut rates soon: Macquarie’s Brian Redican

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<a target="_blank" href="https://www.rba.gov.au/media-releases/2012/mr-12-16">RBA governor Glenn Stevens has released a statement </a>explaining the bank's decision.
"At its meeting today, the board decided to leave the cash rate unchanged at 3.5%," Stevens says.
"Growth in the world economy picked up in the early months of 2012, having slowed in the second half of 2011. But more recent indicators continue to suggest weakening in Europe and a slower pace of growth in China. Conditions in other parts of Asia have recovered from the effects of last year's natural disasters, but the ongoing trend is unclear and could be dampened by the effects of slower growth outside the region. The United States continues to grow at a modest pace. Commodity prices have declined, which is helping to reduce inflation and providing scope for some countries to ease macroeconomic policies. Australia's terms of trade have peaked, though they remain historically high.
"Financial markets have initially responded positively to signs of further progress towards longer-term sustainability in European financial affairs, but Europe will remain a potential source of adverse shocks for some time. While capital markets remain open to corporations and well-rated banks, low appetite for risk has seen long-term interest rates faced by highly rated sovereigns, including Australia, decline to exceptionally low levels. Share markets have remained volatile.
"In Australia, recent data suggest that the economy continued to grow in the first part of 2012, at a pace somewhat stronger than had been earlier indicated. Labour market conditions also firmed a little, notwithstanding job shedding in some industries; the rate of unemployment remains low.
"There have been no changes to the bank's outlook for inflation. Over the coming one to two years, and abstracting from the effects of the carbon price, inflation is expected to be consistent with the target. Maintaining low inflation over the longer term will, however, require growth in domestic costs to slow as the effects of the earlier exchange rate appreciation wane.
"Interest rates for borrowers have declined, to be a little below their medium-term averages. Business credit has increased more strongly in recent months, though credit growth remains modest overall. The housing market remains subdued. The exchange rate has been volatile recently, but overall remains high.
"As a result of the sequence of earlier decisions, there has been a material easing in monetary policy over the past six months. At today's meeting, the Board judged that, with inflation expected to be consistent with the target and growth close to trend, but with a more subdued international outlook than was the case a few months ago, the stance of monetary policy remained appropriate," Stevens says.
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