<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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The decision by the RBA to leave the cash rate on hold today at 3.5% reflects the need for the central bank to wait and measure the impact of the rate cuts in May and June, according to mortgage comparison website Ratecity.com.au.
“We’re not surprised that the Reserve Bank has left the cash rate on hold today at 3.5%,” says Michelle Hutchison, spokesperson for Ratecity.com.au 
“After two consecutive cash rate drops totalling 75 basis points in the past two months, we haven’t seen the RBA move so dramatically for almost three years. 
“The RBA needs time to allow the previous rate cuts to flow through to the economy and measure their impact. The Reserve Bank still has plenty of room to drop the cash rate if economic conditions deteriorate locally or overseas,” says Hutchison. 
She says most borrowers should be aiming for a home loan interest rate of below 6%, especially they have a 20% deposit or 20% plus equity. 
“Lending in Australia is still relatively slow and many lenders are keen to negotiate with borrowers to secure customers,” she says. 
RP Data’s Tim Lawless says it is difficult to gauge how much of the <a target="_blank" href="https://www.propertyobserver.com.au/residential/rate-cuts-help-housing-market-recover-in-june-with-1-rise-in-capital-city-dwelling-prices-rp-data%E2%80%90rismark/2012070255375">1% rise in  capital city dwelling recorded by the RP Data-Rismark Home Value Indices</a> can be attributed to lower interest rates. 
“However it is reasonable to assume that improved housing affordability on the back of lower mortgage rates and lower housing values has been a factor in the positive month on month result. 
"The Reserve Bank is likely to be watching conditions across the housing market quite closely as they walk a fine line of monetary policy settings trying to balance an improvement in consumer sentiment and willingness to spend while also wanting to avoid stimulating house prices. Despite the June rise, capital city home values remain 6.5% lower than their October 2010 peak,” Lawless says. 
Mortgage Choice spokesperson Belinda Williamson says while many borrowers were hoping for a third consecutive monthly rate cut, the data coming out of Australia is strong compared with most world economies. 
“We are approaching near full employment, our banking system is robust, inflation is controlled, interest rates are at historically low levels and borrowers are paying down debts. The contrast with many European nations could not be starker. 
“Borrowers should see the steady cash rate as a vote of confidence in favour of our economy and see this as a prime time to take control of their mortgage to help lessen any hip pocket pain,” she says.
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RBA cash rate holds signals it is still gauging impact of previous rate cuts: RateCity

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The Reserve Bank has, as expected, left the official cash rate unchanged today at 3.5% following its monthly monetary policy meeting. 
The decision to hold follows 75 basis points being shaved off the cash rate in May and June. 
RBA board members will have noted the <a href="https://www.propertyobserver.com.au/residential/rate-cuts-help-housing-market-recover-in-june-with-1-rise-in-capital-city-dwelling-prices-rp-data%E2%80%90rismark/2012070255375">1</a><a href="https://www.propertyobserver.com.au/residential/rate-cuts-help-housing-market-recover-in-june-with-1-rise-in-capital-city-dwelling-prices-rp-data%E2%80%90rismark/2012070255375" target="_blank">% rise in capital city house and unit prices in June</a> as recorded by RP Data-Rismark, and partly attributed to the previous rate cuts. 
In its previous monetary policy statement the RBA remarked on the softening in the housing market. 
Retail sales figures for May will be released tomorrow, with economists expecting 0.2% month-on-month growth. 
A poll of 28 economists by Bloomberg ahead of the decision all expected the RBA to hold today. 
Westpac is still forecasting the cash rate to reach 2.75% by year-end. 
HSBC Australia economist Paul Bloxham expects one more 25 basis point rate cut in the second half of the year.
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RBA leaves cash rate on hold at 3.5%, noting housing market remains subdued

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The Reserve Bank of Australia should keep the official cash rate steady at 3.5%, according to the Centre for Applied Macroeconomic Analysis (CAMA) shadow board, which gives its views ahead of the decision by central bank’s actual board.

The <a href="https://cbe.anu.edu.au/college/schools-centres/cama/pro-pol/" target="_blank">shadow board</a> is made up of <a href="https://cbe.anu.edu.au/college/schools-centres/cama/pro-pol/" target="_blank">influential economists from the private sector and academia</a>.
They were asked to rank their preferred outcomes for the cash rate. Keeping the interest rate unchanged at 3.5% was given a 65% weighting, well above the next most popular, an increase to 3.75%, with a 19% weighting.
Support for a cut in the cash rate of 25 basis points or more received a 16% weighting.
Professors Warwick McKibbin and Jeffrey Sheen were the strongest proponents of higher rates this month, with both indicating a most preferred outcome of 3.75%.
In the longer term, the CAMA shadow board see the risks to rates as equally balanced.
The probability that rates should be higher in 12 months is approximately equal to the probability that rates should be lower.
The comments by individual shadow board members can be obtained from the <a href="https://cbe.anu.edu.au/college/schools-centres/cama/pro-pol/" target="_blank">CAMA website</a> and are reported below.
<img src="/images/stories/2012/07/cama.gif">
Paul Bloxham, Chief Economist (Australia and New Zealand), HSBC Bank Australia Ltd:
“I would recommend the RBA stay on hold this month. Having cut rates by a total of 75 basis points in the past two months, the RBA should now sit still to assess the impact that these rate cuts have had on the economy. Local conditions still look to be fairly solid, with employment growing strongly in May and GDP for Q1 an upside surprise.
“There is a clearly a risk that things have slowed down since then, with business and consumer surveys weakening, and the downside risks from abroad rising. But some part of this risk has already been accounted for in last month’s cut. Rates are now clearly stimulatory. With the AUD no longer appreciating, upside risks to inflation are also building. A discussion about cutting this month could be had around global risks, but I would not recommend a cut this month, having just gone last month.
“There are also risks due to the China slowdown, though these seem much less concerning at this point than those emanating from Europe.”
Saul Eslake, Chief Economist, Bank of America Merrill Lynch Australia
“Noting that last month’s decision to cut rates was "finely balanced” (according to the minutes), and since then we’ve had the second Greek elections (the outcome of which has lowered the near-term probability of a disorderly Greek exit from the euro), and much stronger Q1 GDP and May labour force survey data, I think there’s zero chance that the RBA Board should do anything other than leave rates on hold at this week’s meeting. 
“The six-month view (and my 12-month view) reflects a view that there are (broadly speaking) two plausible monetary policy scenarios – one, with 80% probability, that there isn’t another major global financial shock, and that the Australian economy slows from its Q1 pace (with unemployment riding towards 6%), prompting one (or possibly two) 25 basis points reductions in the cash rate; and a second, with 20% probability, that there is another major global financial shock, prompting a more aggressive easing from the RBA.”
James Morley, Professor, University of New South Wales, CAMA:
Slow adjustment back to neutral, but always ready for quick response to unusual developments in inflation or financial conditions: 
“After cuts in the policy rate over the past few months, monetary policy is currently in an accommodative stance. This provides some insurance against any possible deterioration in the domestic economy or spillovers from continuing problems in the rest of the world. However, in the absence of a full-blown financial crisis in the Eurozone, the main focus of policy should be on the appropriate timing to return to a more neutral stance over the next six to twelve months. This timing will depend in part on the inflation outlook, with the current outlook allowing for a fairly gradual adjustment. 
“As always, monetary policy should be ready to respond immediately to a new global financial crisis. But it should not do so pre-emptively unless the likelihood of a full-blown crisis rises substantially before the next policy meeting.”
Jeffrey Sheen, Professor and Head of Department of Economics, Macquarie University, Editor, The Economic Record, CAMA: 
“The cash rate was cut last month, which was a move that I did not support, but does constrain what I recommend now. Since then, the March quarter national accounts data have come out, showing real GDP growth at 4.3%, well above normal. 
“This may well be revised downward later, but not by enough to justify any further pessimism about the overall Australian economy. The source of expenditure growth was not only (mining) investment, but also consumption, which broadens the base for the recovery. In addition, employment growth (particularly, full-time) in May was positive, as was participation (which actually meant unemployment rose a little, but is still very low). 
Though the trend growth and level of productivity remains a concern, this is not something monetary policy can properly address. Global risks have declined following the outcome of the Greek election, and then the agreement by European leaders to allow direct recapitalisation of troubled banks and to encourage stimulus policies as well as a closer economic union in the longer run. Disaster would seem to be averted, but its hard to see ailing Europe as anything but the new Japan in the medium term."
This article originally appeared on <a href="https://theconversation.edu.au/" target="_blank">The Conversation</a>
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The RBA should keep rates on hold: CAMA shadow board

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Former RBA board member Warwick McKibbin says the central bank made a mistake at its last meeting by cutting the cash rate and misread the economic signals.
He says RBA should raise the cash rate at its meeting today to stem the “boom in the economy”.
McKibbin was a member of the RBA board from July 2001 until the end of July 2011 and is now professor of economics at the Australian National University and a member of its “shadow” RBA board.
McKibbin says the RBA missed reading the boom in the economy as he saw it and cut rates in anticipation of what might happen in Europe.
“If you’re always adjusting to what you think is going to happen, you’ve got the problem that if it doesn’t happen, you’re in the wrong place,” McKibbin said as reported the Australian Financial Review.
Of the other members of the ANU’s shadow board, only Jeffrey Sheen, professor of economics at Macquarie University agreed that the cash rate should go up.
Just 16% of the board called for a rate cut.
The full list of the shadow board is:
<ul>
<li>
Shaun Vahey, Professor, RSE, ANU. (non-voting chair)</li>
<li>
Paul Bloxham, Chief Economist (Australia &amp; New Zealand), HSBC Bank Australia Ltd</li>
<li>
Mark Crosby, Dean of the Global MBA Program, Acting Dean of the Global BBA Program, and Professor of Economics, S P Jain Center of Management in Singapore</li>
<li>
Mardi Dungey, Professor, University of Tasmania, CFAP University of Cambridge, CAMA</li>
<li>
Saul Eslake, Chief Economist, Bank of America Merrill Lynch Australia</li>
<li>
Bob Gregory, Professor Emeritus, RSE, ANU, Professorial Fellow, Centre for Strategic Economic Studies, Victoria University, Adjunct Professor, School of Economics &amp; Finance, Queensland University of Technology</li>
<li>
Warwick McKibbin, Professor, RSE, ANU, CAMA</li>
<li>
James Morley, Professor, University of New South Wales, CAMA</li>
<li>
Jeffrey Sheen, Professor &amp; Head, Department of Economics, Macquarie University,Editor, The Economic Record, CAMA</li>
<li>
Mark Thirlwell, Director, International Economy Program, Lowy Institute for International Policy</li>
</ul>
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RBA should raise interest rates following June rate cut mistake: Warwick McKibbin

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Economists are for once unanimous in their opinion that the official cash rate will remain unchanged today at 3.5%.
All 28 economists polled by Bloomberg expect the RBA to sit tight, but in the past they have often disagreed on the direction of the cash rate and changed their minds as local and global economic factors have shifted.
Here’s a guide to how economists’ thinking has shifted over the past 12 months.
June 6, 2011
Hard for RBA to push up rates: Bill Evans, Westpac
At the time <a href="https://www.propertyobserver.com.au/news/economists-say-the-rba-should-not-raise-rates-but-five-think-it-will/2011060650420">Westpac chief economist Bill Evans</a> said the fall in GDP in the March quarter, the weakest since March 1991, along with the weaker data flow, would make it very difficult for the RBA, “from a public relations perspective, to push up rates in June”.
July 27, 2011



Higher-than-expected inflation figures could trigger rates rise: Warren Hogan, ANZ

<a href="https://www.propertyobserver.com.au/news/higher-than-expected-inflation-figures-could-trigger-rates-rise/2011072750934">ANZ chief economist Warren Hogan</a> said pressure would grow on the RBA to consider an interest rate increase following CPI rising 0.9% in the June quarter. However, Hogan said that given heightened global uncertainty and weak domestic confidence (consumer and business), “we do not think the RBA will respond immediately”.

August 4, 2011
Case for cut steadily building: Shane Oliver, AMP
<a href="https://www.propertyobserver.com.au/news/case-for-interest-rates-cut-steadily-building-shane-oliver/2011080451032">AMP Capital Investors chief economist Dr Shane Oliver</a> said the global outlook was looking softer than the Reserve Bank of Australia had been assuming. “In fact, the case is steadily building that the next move in the cash rate will be down,” he said.
September 15, 2011
Interest rates likely on hold until November 2012: Alan Oster, NAB
 
NAB chief economist Alan Oster <a href="https://www.propertyobserver.com.au/economy/interest-rates-on-hold-until-november-2012-nab/2011091551567">predicted the cash rate could stay on hold until November 2012</a> following the release of revised, softer inflation figures. The bank had previously anticipated rates would stay on hold until May 2012, but Oster and fellow NAB economist Rob Henderson said the inflation figures “fundamentally altered the history of the underlying CPI”.
September 27, 2011
Slowing spending makes rate cut more likely: Bill Evans 
<a href="https://www.propertyobserver.com.au/economy/slowing-spending-makes-rate-cut-more-likely-bill-evans/2011092751697">Evans forecasted consumer spending growth to slow to below 2%</a> for the four quarters to June 2012 and said that would make the case for a rate cut even stronger.  Along with “anaemic credit growth of 3% and modest falls in house prices it seems clear that interest rates are well into the contractionary zone,” wrote Evans in the September Coast-to-Coast report.
October 19, 2011
RBA to keep hand on pause button: Michael Workman, CBA,
ANZ, Westpac and the Commonwealth Bank all expected the Reserve Bank to keep its hand on the pause button for at least another month as it weighed up solid domestic growth prospects against global economic concerns. <a href="https://www.propertyobserver.com.au/economy/rba-rate-cut-coming-but-not-this-month-say-major-banks/2011101851975">Commonwealth Bank senior economist Michael Workman</a> said the most likely scenario was that the RBA would leave the cash rate at 4.75% in coming months rather than opt for a rate cut.
October 28, 2011
History suggests the RBA will sit in November: Paul Bloxham, HSBC
History suggested the RBA preferred to hold steady for long periods, rather than fine-tune, so <a href="https://www.propertyobserver.com.au/economy/history-suggests-rba-will-sit-still-next-week-hsbc-s-paul-bloxham/2011102852110">former RBA insider and now HSBC Bank Australia economist Paul Bloxham</a> suggested the RBA would keep the cash rate on hold in November. 
November 2, 2011
The RBA cut rates by 25 basis points, bringing the cash rate down to 4.5.%.
December 7, 2011
The RBA cut rates by 25 basis points again, bringing the cash rate down to 4.25%.
January 13, 2012
Two rate cuts in 2012 starting in February: Besa Deda, St.George
<a href="https://www.propertyobserver.com.au/economy/february-rate-cut-tipped-to-boost-australian-housing-market/2012011253030">St George Bank’s chief economist Besa Deda</a> forecast a February rate cut mainly as a result of continued uncertainty in Europe. She said two cuts were likely in 2012 but that external factors were likely to play a large part in determining what the RBA would do.
April 24, 2012
Further relief now certain for borrowers: Christopher Joye, Rismark
Rismark International and Yellow Brick Road director Christopher Joye said the RBA will “probably choose to wait until it has the benefit of seeing the Gillard government’s budget (May 8) after its May 2 meeting” and cut by 25 basis points rather than go with a 50-basis-point cut. “If it does so, its view of the world remains unchanged, and, finally, the banks do not pass on the May cut in its entirety, then the probability of follow-up relief in June would rise materially.”
May 2, 2012
The RBA cut rates by 50 basis points, bringing the cash rate down to 3.75%.
May 31, 2012

Cash rate to reach to 2.75% by year-end: Bill Evans, Westpac

Taking into consideration the gap between the cash rate and bank mortgage rates, <a href="https://www.propertyobserver.com.au/news/rba-to-cut-rates-by-25-basis-points-next-week-with-three-more-to-come-taking-cash-rate-to-reach-275-by-year-end-westpac/2012053154924">Westpac chief economist Bill Evans said a move to 2.75% in the official cash rate</a> was likely to bring the cash rate somewhere between 100 basis points and 145 basis points below neutral. Evans said the two extra rate cuts are based on the banks assessment that “the global environment – read Europe - has deteriorated even further since we revised down our call for the low point from 3.75% to 3.25%”.

June 6, 2011 
The RBA cut rates by 25 basis points, bringing the cash rate down to 3.5%.
June 29, 2012
Only one more rate cut in second half of 2012: Paul Bloxham, HSBC
<a href="https://www.propertyobserver.com.au/news/rba-to-leave-cash-rate-on-hold-next-week-with-one-more-cut-likely-this-year-hsbcs-paul-bloxham/2012062855336">The Reserve Bank was “ahead of the curve” on its cash rate setting</a> and was set to leave the rate unchanged at 3.5% at its July meeting on Tuesday, said HSBC Australia chief economist Paul Bloxham. He said interest rate markets pricing in 90 basis points in cuts was “overdone”.
For tips on investing in property following times of turmoil, <a target="_blank" href="http://propertyobserver.com.au/ebooks/investing-in-property-in-times-of-turmoil-free-ebook">download our free eBook.</a>
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The 12 twists and turns in the RBA interest rate debate in a year of economic turmoil

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Tax experts have welcomed a decision by the federal government to delay changes to the Living Away From Home allowance for a further three months, although a survey of clients made by accounting firm PwC shows businesses are already changing their plans.
The changes, which restrict who can claim the allowance, were expected to <a href="https://www.smartcompany.com.au/tax/048546-smes-employing-overseas-workers-to-be-hit-by-changes-to-living-away-from-home-allowance">come into effect</a> from this Sunday, July 1. But federal Assistant Treasurer David Bradbury announced yesterday the changes will start from October instead.
"These reforms will better target the tax concession for LAFH allowances and benefits to people who are legitimately maintaining a home away from their actual home in Australia for an initial period," Bradbury said.
The introduction of the laws will now be shifted to October 1.
"This deferral will give employers and employees more time to prepare for the new arrangements," Bradbury said.
The changes mean temporary residents will need to maintain a home for their own use in Australia to get the concession, and all individuals will need to substantiate their expenditure on accommodation and food.
In the budget, the government also announced changes requiring permanent residents to maintain a home for their own use in Australia if they are to claim the concession, and a 12-month limit on how long individuals can use the concession.
Senior tax counsel at the Tax Institute Robert Jeremenko says the delay is a welcome change.
"The government really did listen to the concerns of the Tax Institute and the fact you need an appropriate amount of time in this case to help employers adjust."
"Of course, it doesn't change the overall policy, but they do deserve plaudits for delaying this for three months, particularly as they introduced the bill yesterday."
But according to a new survey from PwC, businesses are already getting their affairs in order. Out of a survey of 121 clients, 14% said at least one employee has left or changed plans because of the new laws.
Also, 99% had considered the impact the changes will have, and 55% said attracting new employees as a result of the changes was a concern.
One participant pointed out they have had two employees give notice to return home before June 30 as a "direct result" of the changes.
PwC director Jennifer Miller said in the report the reality of the reforms "is now being felt by a number of organisations".
"Employees are returning home, both voluntarily and at the direction of employers. Recruitment strategies, remuneration strategies and assignment policies are being changed."
"A broad range of support measures are being implemented to help impacted employees adjust to the change in their financial position."
Jeremenko says while there are still details to be worked out, an initial reading of the draft bill suggests the government has listened to the industry's concerns with regard to transitional arrangements.
"The changes are coming, but the government does deserve some recognition for the delay."
This article originally appeared on <a href="https://www.smartcompany.com.au/" target="_blank">SmartCompany</a>.
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Tax experts welcome federal government delay for living away from home changes

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The May 2 cash rate cut of 50 basis points has failed to stimulate demand for mortgages, with just 0.3% growth in housing credit issued by lenders over the month, according to RBA seasonally adjusted figures.
Annualised growth has now fallen to 5.1% setting a new record low for RBA records dating back to August 1977.
The last time monthly mortgage growth slumped to 0.3% was in June last year. Monthly mortgage growth has not been above 1% since June 2007, when it rose 1.3% over the month.
The May 0.3% figure follows growth of just 0.4% in February, March and April and 0.5% in January.
Owner-occupier lending rose 0.3% over May, and loans for investment housing rose 0.4%.
Savanth Sebastian, economist at CommSec, says the housing sector has been a "key area of weakness over the past year"
"And the latest data on housing credit suggest that the sector is not turning around all that quickly.
"Granted there does seem to be a pickup in enquiry levels as more potential homebuyers are enticed by the attractive lower interest rates on offer, but it will take time for activity levels to pick up," he says.
Also commenting on the figures, John Peters senior economist at the Commonwealth Bank says consumer sentiment surveys reveal "deep household pessimism regarding Australia’s economic outlook, employment prospects, and consumer’s future financial situations".
"Combined with softening house prices and wilting local equities, consumers are currently unwilling to take on additional debt, and are in fact paying down debt at a great rate of knots," he says.
The total value of owner-occupier mortgages increased from $838.2 billion to $840.8 billion.
The total value of loans for investment purposes increased from $401.8 billion to $403.8 billion.
Business lending increased by 0.8% over May, after growing by 0.7% over April, to be up 3.3% for the year to May.
Personal lending increased by 0.1% over May, after decreasing by 0.3% over April, to be down 1.6% for the year to May.</body></html>

Mortgage lending growth slumps to new record low in May despite 50-basis-point cash rate cut: RBA

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The Reserve Bank is “ahead of the curve” on its cash rate setting and is set to leave the rate unchanged at 3.5% at its July meeting on Tuesday, says HSBC Australia chief economist Paul Bloxham.
He says the rate cut in June was insurance taken out against the risk of global conditions worsening further.
“As such, it seems highly unlikely the RBA will cut again next week.
“As it has already accounted for some of the downside risk to global growth, it also suggests there may be fewer rate cuts to come than there might otherwise have been," Bloxham says.
Bloxham expects one more rate cut in the second half of the year due to “global risks” playing out, but thinks a further 80 basis points of cuts being priced by interest rate markets  by the end of the year is overdone.
Bloxham says that the in the days following the June 25 basis point rate cut, “it became apparent that momentum in the local economy was stronger than had generally been expected.
“GDP growth was strong in the first quarter (4.3% year-on-year), as was employment in May (up 39,000 jobs).”
He also highlighted the RBA’s monetary policy statement released two weeks after the June decision, which said it was a “finely balanced” call.
“It is clear to us that the RBA’s last cut was global risk insurance, not a response to local conditions.
“But insurance is not free. By cutting rates further the RBA takes the risk that inflation could pick up more. This risk was clearly weighed against the risk that global conditions worsen further, thereby weakening the local economy.
“In the RBA’s view, it seems that the ‘path of least regret’ was to cut rates in the face of global risks."
Bloxham says the RBA was in the position to cut rates at its June meeting due to inflation being currently low at an underlying rate of 2.2%
He expects inflation will rise in the second half of 2012 – but only marginally – due to the carbon tax .
The carbon tax is forecast to boost headline inflation in the third quarter by around 0.7  percentage points and underlying inflation by around 0.2 percentage points.
"The RBA will look through the impact of the carbon tax on inflation. It is already publishing inflationforecasts that exclude the impact," says Bloxham.
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RBA to leave cash rate on hold next week with one more cut likely this year: HSBC’s Paul Bloxham

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The proportion of mortgage holders a month or more behind in their mortgage repayments rose only marginally in the first quarter of the year, according to ratings agency Fitch, which says falling interest rates prevented a greater rise.
In its latest Dinkum Index for the first quarter of 2012 Fitch records that mortgage delinquencies rose from 1.57% in the December 2011 quarter to 1.6% in the first quarter of 2012 – equating to about $35 million loans turning bad.
Click to enlarge
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The rise was mainly due to the number of loans more than 90 days in arrears, which increased by six basis points.
Fitch usually anticipates a higher rise in mortgage delinquencies in the first quarter of the calendar year due to “a portion of Australian borrowers temporarily affected by Christmas spending”.
“The two cash rates cuts in the fourth quarter of 2011 have indeed outweighed the seasonal Christmas spending in combination with minor increases in bank standard variable rates, as shown by the stable 30-59-day arrears,” says James Zanesi, director of Fitch's structured finance team.
"The decision by the Reserve Bank of Australia to cut cash rates by 25 basis points both in November and December 2011 to 4.25% has given some temporary relief to borrowers, as 30-59-day arrears have been stable overall and have not increased as much as others," he says.
Fitch expects the interest rate cuts on May 2 and June 6 to “impact positively on Australian mortgage performance”, with lower interest rates expected to result in improved affordability for existing borrowers and thus to lower arrears levels.
“Although delinquency rates are increasing and are above the historical Australian average, they remain low relative to other countries and well within the expectations used to derive Fitch's ratings for Australian RMBS transactions,” says Fitch.
It says the only major threat to Australian mortgage performance is declining house prices.
“A drop in housing prices could negatively affect transactions, in terms of recovery rates and time. As house prices drop, eventual sales prices are more likely to be below the mortgage balance, leading to losses and LMI (lenders mortgage insurance) claims. This depends on when the loan was written. Less seasoned mortgages tend to have amortised less and therefore tend to be more sensitive to house price changes,” says the ratings agency.
Zanesi says an increase in the proportion of loans 90 days or more in arrears is usually associated with a stagnating housing market, but in the third quarter Fitch monitored an increase in hardship cases and this may have contributed to the increase.
There was a notable rise in delinquencies among self-employed households.
Fitch's Dinkum Low-Doc Index recorded a growth in 30+ day arrears to 7.08% in the first quarter of 2012 from 6.62% in the December 2011 quarter.
Delinquencies in the low-doc segment tend to be two to 2.5 times those of full-doc loans, but in the 12 months to the end of March 2012 they were four to 4.5 times higher.
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Mortgage delinquencies rise marginally in first quarter, but rate cut forestalled higher increase: Fitch

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It is a rare thing for me to say I agree with the Prime Minister, but I believe she has it entirely right when she says state government-based property taxes are standing in the way of economic growth in this country.
As Australia’s largest independent real estate network, we do everything we can to help people with workforce- and lifestyle-driven mobility, but the state governments are not doing anything to help – a fact we have been on the record as raising on numerous occasions over the last 12 to 18 months.
Research has shown that a lot of city dwellers would like to make a move to the country, but they find the costs of selling and buying a home, including stamp duty, prohibitive.
Last month, we were proud to sponsor the inaugural Regional Victoria Living Expo, which promotes the attractions of regional centres and smaller townships throughout rural Victoria.
At that event, Victorian Deputy Premier Peter Ryan released research that indicates 11% of Melbourne’s metropolitan residents, around 450,000 people, are contemplating moving to regional Victoria in the next three years.
The main thing standing in their way is the cost of buying and selling a home, and stamp duty is a large part of that cost. So, on the one hand state governments want people to move within their state and the federal government needs them to be able to move between states, but the state governments’ stamp duty is one of the major costs that are stopping that happening.
Last year, stamp duty accounted for 37% of total property related taxes in Australia, and I believe the reliance of governments on property taxes is standing in the way of Australia’s economic growth.
We need to stop penalising people who have saved enough money to buy a house or who are prepared to follow job opportunities interstate.  Stamp duty is an anti-growth tax and is a lazy way for governments to keep their budgets in check.
Ray Ellis is CEO of <a target="_blank" href="https://www.firstnationalnews.com">First National Real Estate</a>. 
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