<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

<html><body>
The number of home loans granted in April rose a seasonally adjusted 0.2% to 46,632, according to ABS estimates released today. 
That compares with an upwardly revised 46,519 home loans in March. 
In terms of overall value, total housing finance rose by 1.2% to $20.45 billion.
Analysts had been forecasting the number of home loans to be flat over April.
The value of owner-occupier mortgages increased by 0.9% over April to $13.6 billion and rose 0.2% in number terms to 46,632 loans.
The value of seasonally adjusted owner -occupier loans rose in Queensland (2%), Victoria (0.3%), Tasmania (1.9%) and the ACT (0.2%), while falls were recorded in NSW (0.8%), Western Australia (1.2%), the Northern Territory (18.8%) and South Australia (2%).
Fixed rate loans accounted for 14% of all loans in April, easing from the 4-year high of 14.6% in March.  
The value of investment housing commitments seasonally adjusted rose 1.7% in April 2012.
The HIA noted that the number of loans for the construction or purchase of new homes increased by an encouraging 2.1% in April following a 3.8% rise in March. 
“Given contemporary weakness in new home construction activity, it is encouraging to see a second consecutive, albeit modest rise in this leading housing indicator,” says HIA chief economist Dr Harley Dale.
Number of mortgage commitments for the purchase of new dwellings
<img src="/images/stories/2012/06/hiajune8.jpg">
Source: ABS
Commenting on the data, CommSec economist Savanth Sebastian said it was important to highlight that this data is backward looking.
"There are modest signs of improvement on the housing front, but the gains are still miniscule in nature and follow a period of sustained weakness.
"On an encouraging note there does seem to be light at the end of the tunnel- particularly given that the substantial rate cuts should entice potential home buyers to sign on the dotted line. In addition the lift in loans for newly-erected homes should eventually lead to more building ahead," he says.
"The fundamentals for the housing sector remain sound. The lack of new residential construction has led to pent up demand, and with migration levels at 3½-year highs, demand for new and existing homes should lift. It really comes down to confidence. A substantial pick up in confidence is needed to justify a turnaround and the recent interest rate cuts and strength in employment may just be the catalyst."
In original terms, the number of first home buyer commitments as a percentage of total owner occupied housing finance commitments rose to 16.8% in April 2012 from 16.4% in March 2012. 
Between April 2012 and March 2012, the average loan size for first-home buyers rose $600 to $280,200. The average loan size for all owner-occupied housing commitments rose $4,400 to $288,900 for the same period, down 4.7% over the past year.
The value of owner-occupier refinancing rose 0.3% in April 2012, following a rise of 1.5% in March 2012. 
The number of bank owner-occupier mortgages issued in April was flat following a 0.3% rise in March. 
The number of mortgages for owner-occupied dwellings financed through non-banks rose 1.8% in April following a rise of 5.3% in March. 
The number of permanent building societies owner occupier mortgages fell 9.6% in April 2012, after a rise of 21.5% in March 2012.
</body></html>

lschlesinger-FZcF9M3vE6

Mortgage lending up 0.2% in April with 2.1% rise in new housing loans: ABS

<html><body>
With the ACT government moving to replace stamp duty with land tax, the Real Estate Institute of Victoria (REIV) has weighed into the discussion highlighting a 2012 report by the Australian Housing and Urban Research Institute (AHURI), which shows replacing the current system of state-levied stamp duty with a land tax in Victoria would cause the owners of more expensive land closer to the city to pay a much high proportion of the tax burden.
The AHURI report suggested that properties within 20 kilometres of Melbourne CBD, which currently pay 61% of the stamp duty bill, would pay 84% of a new land tax
The biggest shift in the tax burden would be for those properties within 10 kilometres of the city. The aggregate tax bill for these properties would rise from 29% under stamp duty to 46% under a land tax.
Conversely, those properties built on cheaper land further out from the city would pay less tax.
For properties built on land 20 to 30 kilometres from the CBD, the portion of the tax bill would fall from 17% to 10%, while in the next band (30 to 40 kilometres out from the city) the burden would fall from 8% to just 2%.
 
<div align="center">
<table cellpadding="0" cellspacing="0" border="0"><tbody>
<tr>
<td></td>
<td>
Proposed land tax
</td>
<td>
Stamp duty
</td>
</tr>
<tr>
<td>
 
</td>
<td>
% of aggregate revenue
</td>
<td>
% of aggregate revenue
</td>
</tr>
<tr>
<td>
0km &lt; 10km
</td>
<td>
46
</td>
<td>
29
</td>
</tr>
<tr>
<td>
10km &lt; 20km
</td>
<td>
38
</td>
<td>
32
</td>
</tr>
<tr>
<td>
20km &lt; 30km
</td>
<td>
10
</td>
<td>
17
</td>
</tr>
<tr>
<td>
30km &lt; 40km
</td>
<td>
2
</td>
<td>
8
</td>
</tr>
<tr>
<td>
40km &lt; 50km
</td>
<td>
2
</td>
<td>
7
</td>
</tr>
<tr>
<td>
50km &lt; 60km
</td>
<td>
1
</td>
<td>
3
</td>
</tr>
<tr>
<td>
60km &lt; 70km
</td>
<td>
1
</td>
<td>
3
</td>
</tr>
<tr>
<td>
70km &lt;
</td>
<td>
0.2
</td>
<td>
0.2
</td>
</tr>
</tbody></table>
</div>
Source: REIV (from AHURI report)
According to the REIV, there are a range of impacts to consider from such a shift in tax policy.
“One interesting idea suggests that shifting the burden to the more expensive suburbs would encourage greater turnover in outer suburbs, where the majority of transactions occur,” says the institute.
However, it also notes “significant concerns” in replacing stamp duty with land tax, including “a projected drop in land values; the need for the government to run dual taxation systems; and the issues faced by the asset-rich but cash-poor in meeting the new annual bill”.
“Expect to hear more on this debate over the coming years,” says the REIV.
The recommendation to replace stamp duty with a land tax levied on all land came out of the 2007-2008 Henry Review.
It imagined a “municipal rates-type bill” with the review also noting there would be “significant transitional issues, as government could not charge land tax on a property where stamp duty had already been paid”.
The Henry Review recommended that:
“Existing land tax arrangements should be replaced, subject to a long transition to slow valuation effects and facilitate landholding adjustments, by a land tax applying to all land regardless of use. 
<ul>
<li>The rate scale would be based on the value per square metre of land.</li>
<li>A unit value threshold would effectively exempt most land in agricultural use.</li>
<li>Most residential land could be subject to tax of about 1%. A higher rate may apply to the highest value land (per square metre).</li>
<li>Land tax revenue would also replace stamp duties on land transfers.”</li>
</ul>
</body></html>

Replacing stamp duty with land tax needs debate: REIV

<html><body>
QT Mutual Bank has passed on the full 25-basis-point rate cut to its borrowers – only the second lender to make an announcement about mortgage rates since the RBA cut the cash rate to 3.5% on Tuesday.
The Bank of Queensland reduced its standard variable rate by 20 basis points soon after the announcements.
The major banks and their subsidiaries have all tweeted – in response to queries from borrowers – that they are reviewing their interest rates.
They may wait until tomorrow to make their decisions to force ANZ to move first, as ANZ announces its rates on the second Friday of the month independent of the RBA announcement.
The small mutual lender, formerly the Queensland Teachers Mutual Bank, was started by a group of teachers in 1965.
</body></html>

QT Mutual Bank passes on full rate cut, but major banks stay silent

<html><body>
The discount on the standard variable rate that lenders have been willing to offer borrowers to entice them to fix their home loans has been shrinking since the RBA began cutting rates in November last year, according to figures compiled by RateCity.com.au. 
Based on analysis of 120 lenders in the RateCity.com.au database, the data shows that the gap between the benchmark three-year fixed rate and benchmark standard variable rate has shrunk from 74 basis points to 47 basis points – and is likely to fall further when the latest cash rate cut is passed on in part by lenders.
Click to enlarge
<a title="Click to enlarge" rel="shadowbox" href="/images/stories/2012/06/fixedjune7.gif"><img src="/images/stories/2012/06/fixedjune7thumb.gif"></a>
Source: RateCity.com.au
It could fall even further if predictions by Westpac chief economist Bill Evans that fixed rates will start to rise prove accurate. 
As of June 1, the average standard variable rate was 6.59%, compared with 6.12% for the average three-year fixed rate, according to RateCity.com.au. 
Fixed rates have, on average, been cheaper than standard variable rates since the middle of last year, but the frequency of lenders reducing their fixed rates has slowed since the start of the year.
They remain popular relative to recent historic demand, but have fallen from their peaks of a few months back, May mortgage processing figures recently released by Mortgage Choice and AFG revealed.
 
<div align="center">
<table cellpadding="0" cellspacing="0" border="1" style="width: 428px;"><tbody>
<tr>
<td valign="bottom" colspan="4" nowrap width="428">
Average Home Loan Rates
</td>
</tr>
<tr>
<td valign="bottom" nowrap width="76"></td>
<td valign="bottom" nowrap width="139">
Standard Variable
</td>
<td valign="bottom" nowrap width="107">
3y Fixed
</td>
<td valign="top" width="107">
Difference
</td>
</tr>
<tr>
<td valign="bottom" nowrap width="76">
1-Nov-11
</td>
<td valign="bottom" nowrap width="139">
7.31%
</td>
<td valign="bottom" nowrap width="107">
6.57%
</td>
<td valign="top" width="107">
0.74
</td>
</tr>
<tr>
<td valign="bottom" nowrap width="76">
1-Dec-11
</td>
<td valign="bottom" nowrap width="139">
7.08%
</td>
<td valign="bottom" nowrap width="107">
6.41%
</td>
<td valign="top" width="107">
0.67
</td>
</tr>
<tr>
<td valign="bottom" nowrap width="76">
1-Jan-12
</td>
<td valign="bottom" nowrap width="139">
6.84%
</td>
<td valign="bottom" nowrap width="107">
6.26%
</td>
<td valign="top" width="107">
0.58
</td>
</tr>
<tr>
<td valign="bottom" nowrap width="76">
1-Feb-12
</td>
<td valign="bottom" nowrap width="139">
6.82%
</td>
<td valign="bottom" nowrap width="107">
6.26%
</td>
<td valign="top" width="107">
0.56
</td>
</tr>
<tr>
<td valign="bottom" nowrap width="76">
1-Mar-12
</td>
<td valign="bottom" nowrap width="139">
6.86%
</td>
<td valign="bottom" nowrap width="107">
6.27%
</td>
<td valign="top" width="107">
0.59
</td>
</tr>
<tr>
<td valign="bottom" nowrap width="76">
1-Apr-12
</td>
<td valign="bottom" nowrap width="139">
6.86%
</td>
<td valign="bottom" nowrap width="107">
6.35%
</td>
<td valign="top" width="107">
0.51
</td>
</tr>
<tr>
<td valign="bottom" nowrap width="76">
1-May-12
</td>
<td valign="bottom" nowrap width="139">
6.87%
</td>
<td valign="bottom" nowrap width="107">
6.34%
</td>
<td valign="top" width="107">
0.53
</td>
</tr>
<tr>
<td valign="bottom" nowrap width="76">
1-Jun-12
</td>
<td valign="bottom" nowrap width="139">
6.59%
</td>
<td valign="bottom" nowrap width="107">
6.12%
</td>
<td valign="top" width="107">
0.47
</td>
</tr>
<tr>
<td valign="bottom" colspan="2" nowrap width="215">
Source: www.ratecity.com.au
</td>
<td valign="bottom" nowrap width="107"></td>
<td valign="top" width="107">
 
</td>
</tr>
</tbody></table>
</div>
 
Currently, the Greater Building Society is offering the cheapest three-year fixed rate of 5.79% with seven lenders – ING Direct, ME Bank, CUA and Aussie, Citibank, IMB Building Society – offering a rate of 5.99%. 
RateCity.com.au top variable home loans as of June 5, 2012 are: 
 
<ol start="1">
<li>UBank, UHomeLoan – 5.83%</li>
<li>Loans.com.au, Dream Catcher – 5.85%</li>
<li>Bank MECU, Refinance – 5.94%</li>
<li>State Custodians, Standard Variable Offset – 6.02%</li>
<li>IMB, Budget Home Loan – 6.04%</li>
</ol>
</body></html>

Fixed-rate mortgage discounts diminishing as variable rates play catch-up: RateCity

<html><body>
As quantity surveyors, we’re often telling investors that there are more depreciation deductions available within a unit than a house of similar age and finish. Of course depreciation is just one part of property investment and shouldn’t be the driving reason to choose one investment over another, but I want to look at why a unit returns more depreciation deductions.
Residential units tend to be constructed to a more compact floor plan or layout, rather than the larger open spaces property investors would expect to see within a residential dwelling or house. The cost to build per square metre increases with a compact construction layout, due to more infrastructure (walls, services, etc) and less open spaces than commonly seen within houses. This can make a significant difference to the overall claim, but is not the major reason why residential units will return greater deductions.
In short, the answer is that it’s all about common property.
Most investors are aware that they can claim deductions on the building structure of their unit (subject to age) and the plant and equipment items within such as blinds, carpets, ovens, range hoods and the like. However, many investors aren’t aware that they can claim deductions on the common areas as well.
Unit developments are all different, but generally the more units there are within a development, the more common property there is likely to be. Common property includes things like:
<ul>
<li>Basements</li>
<li>Entry foyers</li>
<li>Foyers and corridors on each level</li>
<li>Barbecues and pool areas</li>
<li>Driveways</li>
</ul>
Now that’s just the building components. You’ve also got the associated plant and equipment items. The list is far more expansive, but some of the more common items include: 
<ul>
<li>Air-conditioning</li>
<li>Automatic gate motors and controls</li>
<li>Barbecue assets</li>
<li>Carpet</li>
<li>Door closers</li>
<li>Emergency warning and intercommunication systems (EWIS)</li>
<li>Fire control assets</li>
<li>Fire extinguishers and hoses</li>
<li>Furniture, freestanding</li>
<li>Garbage compacting systems</li>
<li>Garden watering installations</li>
<li>Generators</li>
<li>Gym assets – cardio and resistance</li>
<li>Hand dryers, electrical</li>
<li>Hot water systems</li>
<li>Intercom system assets</li>
<li>Lifts</li>
<li>Lights</li>
<li>Master antenna television assets (MATV)</li>
<li>Security and monitoring assets</li>
<li>Swimming pool chlorinators</li>
<li>Ventilation fans</li>
</ul>
This is just a sample of some of the plant and equipment items you might find in a unit development.
But how are investors entitled to claim deductions on common property and how does it work?
It’s now all about the strata plan. When you purchase a unit, you’re purchasing a particular lot within a strata plan. A strata plan shows the building on the land, the lots making up the plan and the common property.
Each lot is given a unit entitlement, which is shown on the strata plan.  The amount of the unit entitlement varies depending on a number of factors, such as the size of the lot.  Unit entitlements regulate what proportion of the total annual budgeted levies will be paid by each lot owner.  Unit entitlements also can regulate voting strength at meetings if the value of the votes is required.  Unit entitlements also provide the entitlement that the owner has to claim over the common areas. For example, if there 50 units within a strata plan, the unit entitlement might be something like 1/50.
Using this ratio of 1:50, let’s consider the potential depreciation deductions in this case study.
The total common area written down value is estimated to be $3.5 million.
The total estimated value of common plant and equipment items is $68,000.
The calculation for the building structure in the first full year is $3.5 million x 2.5% x (1/50).
This results in $1,750 per year worth of deductions on the common building(s).
Plant and equipment items all deprecate at different percentages but will normally be somewhere around 20% on average. So using this as an example, the calculation would be; $68,000 x 20% x (1/50), which equates to $272 in the first full year.
Adding the plant and equipment to the depreciation on the building gives us a figure of $2,022 in a single year on just the common areas.
This calculation also ignores some of the legislation that enables you to maximise the depreciation on plant and equipment items such as the ability to claim 100% of the value of all assets under $300 in total, within the year of acquisition.
The extra value that common property depreciation deductions add to the overall claim can be significant, and investors should ensure that they’re claiming deductions on every asset that they’re entitled to claim over.
While high-rise unit developments will return the most common property deductions, even strata-titled villas with a shared drive way and perhaps some solar garden lights will attract deductions on the common areas.
Be sure to contact a tax depreciation quantity surveyor for more information on how to maximise your claim on common areas.
Mike Mortlock is a director of <a href="https://www.mcgqs.com.au" target="_blank">MCG Quantity Surveyors</a>, providing residential and commercial tax depreciation services to property investors.
</body></html>

mmortlock-YX58RgDaQB

Why more depreciation deductions are available for units than houses

<html><body>
The Australian economy expanded by an extraordinary 1.3% in the first quarter of 2012 in seasonally adjusted terms, smashing consensus expectations of a 0.6% rise (with Goldman Sachs at just 0.2%). Only one forecaster, ANZ, got anywhere close to the number with a 1% guess. The fourth-quarter GDP results have been revised up from a weak 0.4% to a relatively more normal 0.6%.
The annual year-on-year rate of economic growth in Australia was a way above trend 4.3% in the March quarter, versus the 3.3% expected by economists. This is truly incredible. On the basis of the ABS National Accounts data, the droves of analysts who claimed Australia was growing at a "sub-trend" or "modest" pace, including the RBA, were way wrong. Despite the very high Australian dollar, the economy has been booming. Crucially, this also includes consumer spending.
One of the most important drivers of Australia's above-trend economic growth over the last year has been household consumption. In seasonally adjusted real terms, household consumption rose by a stonking 1.6% in the March quarter alone, and by 4.2% on a year-on-year basis. Household consumption is now running significantly above the 3.6% per annum long-term average since 1959.
Importantly, the GDP data reconciles with the stubbornly strong labour market data – at least as it has been reported thus far (we wait for an update tomorrow, which is expected to be weak).
The RBA has evidently cut rates three times when it did not need to. On the basis of this information, the RBA's "insurance" rate cuts in December 2011, May 2012 and June 2012 were totally unnecessary. As I have regularly argued here, the harangued Australian central bank has been doling out free "insurance" when it did not need to, and has punished hard-working Australian savers in preference to less prudent borrowers. Of course, it has been happy days if you have had a variable rate mortgage, as more than 90% of residential borrowers do!
Yesterday I wrote that if I were running the RBA I would not have cut in December, would have only cut once in May, and would not have cut in June. I have been a fairly lonely voice in arguing that there was no need to slash rates, and that RBA risks over-engineering policy. That domestic growth was not in desperate need of interest rate support as so many analysts claimed.
Expect to see boatloads of spin explaining Australia's official economic growth data. It is a profound embarrassment for the many doomsayers who have incorrectly misled us to believe that Australia was experiencing a household spending recession, that the economy was on the brink of collapse, and that only ultra-low interest rates held out hope for saving our bacon.
Perhaps most significantly, today's economic growth data, combined with the labour market data over the last 12 months, proves once and for all that the RBA's monetary policy settings over 2010 and prior to November 2011 were spot-on.
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.
</body></html>

chrisjoye-JYhJsTrNRC

The RBA has cut rates three times when it didn't need to: Christopher Joye

<html><body>
Low interest rates have kept demand for fixed-rate home loans at high levels, according to May mortgage processing figures from Mortgage Choice and AFG.
However, the broker figures also show that the May rate cut encouraged more borrowers to take out variable-rate products, suggesting that demand could rise if most of yesterday’s official rate cut is passed on by the major banks. 
According to Mortgage Choice spokesperson Belinda Williamson, the June rate cut and forecasts of further rate cuts could make variable-rate home loans even more attractive to borrowers. 
“Stronger demand for variable rate home loans is likely to be at the expense of fixed-rate loans,” she says. “More borrowers may choose variable over fixed, in at least the short term, as they become even more comfortable with variable rate loan pricing. In May, Mortgage Choice data suggested that borrowers found comfort in lenders’ decisions to pass on the majority of the rate cut savings. “On the flipside, fixed rate loan uptake levels could be influenced by increasingly attractive fixed-rate loan pricing. In recent months, some lenders dropped their fixed-rate loan pricing to below 6%,” Williamson says. As at June 4, 2012, the average three-year fixed-rate loan interest rate, based on lenders on the Mortgage Choice panel, was 6.28%, one-year was 6.14% and 5-year was 6.69%. "Borrowers will be wise to weigh up the benefits of further rate cuts against the affordability and security of fixed rate loan pricing," says Williamson.
Official ABS data on demand for fixed rates lags two months behind rate decisions (May housing finance data will only be released in July), with April showing 15% of borrowers choosing a fixed-rate product, the highest level in four years. 
So the May results from the two mortgage broking businesses – which combined write around one in five home loans in Australia – provide a good estimate of current consumer appetite for fixed-rate loans.
Mortgage Choice May figures show a small drop in fixed-rate demand in May, though fixed rates still account for one in five home loans written by its brokers.
This is below the six-month average (22.5%) but above the 12-month average (19%). 
Mortgage Choice highlighted that fixed-rate demand fell marginally, despite a number of lenders dropping their fixed-rate pricing below 6% in May. 
The Greater Building society offers a three-year fixed rate of 5.79% while seven lenders (Commonwealth Bank, ING Direct, ME Bank, CUA and Aussie, Citibank, IMB Building Society) offer a three-year fixed rate of 5.99%. 
The May Mortgage Choice figures show that basic variable mortgages were the only product category were demand rose over the month, up from 14% to 17% of all mortgages – above the 12-month average and at a nine-month high. 
According to Williamson, basic variable mortgages “tend to be more affordable but less flexible with fewer features at the borrower’s disposal”. 
“The increased interest in basic variable rate loans, which is now at a nine-month high, could signal a return to the market by first homebuyers, as these loans tend to be more popular with lower income and less experienced borrowers who are still finding their feet in home loan market.”
Click to enlarge
<a href="/images/stories/2012/06/mcjune6.jpg" rel="shadowbox" title="Click to enlarge"><img src="/images/stories/2012/06/mcjune6thumb.jpg"></a>
Similar to Mortgage Choice figures, close to one in five home loans written by AFG brokers in May was for a fixed-rate product. 
For AFG brokers, standard variable loans proved most popular with borrowers – accounting for 59% of all loans processed over May – up from 57.5% and rising for the second straight month having fallen from January to March.
According to Mortgage Choice May figures the biggest increase in variable-rate loan demand was recorded in SA (up 12%, to 85%), followed by NSW (up 4%, to 77%), WA (up 1%, to 79%) and Queensland (up 1%, to 74%). 
The only state to buck this trend was Victoria, where the popularity for variable-rate loans dropped by five percentage points, to 86%. 
Ongoing discount-rate loans – where the interest rate is discounted over the entire loan term, usually in exchange for an annual fee – made up 40% of all variable-rate loans approved in May. This was in line with April, but slightly below the six-month and 12-month average of 41%.
</body></html>

Low interest rates keep fixed mortgage demand high, but popularity of basic and standard variable products rising: Mortgage Choice and AFG

<html><body>
Tasmanian Liberal Senator David Bushby has joined the chorus of voices opposed to the government doubling the withholding tax rate to 15%.
The tax is charged on income foreign investors earn when they invest in Australian managed investments schemes, many of which fund large property and infrastructure projects.
Since the increase was announced in the budget, <a href="https://www.propertyobserver.com.au/tax/lend-lease-slams-15-withholding-tax-as-property-council-fails-to-convince-wayne-swan-to-scrap-it/2012053154915" target="_blank">the Property Council of Australia, Lend Lease and the Financial Services Council</a> have all slammed the decision, saying it will scare off foreign investors, but they have failed to sway Federal Treasurer Wayne Swan.
“The government’s policy reversal on a tax critical to foreign capital inflows sends the wrong signals,” wrote Bushby in a letter published in the Australian Financial Review today.
“Investment banks will reassess investments in listed property and other assets, and advise their clients of lower than expected future returns from Australia.
“For Australian investors who hold wealth and retirement assets in listed property and infrastructure assets, the withdrawal of foreign capital will only add downward pressure on share prices – and cause retirees even more grief,” he wrote.
Bushby accused the federal government of raising the tax without public reviews or industry consultation.
However, he failed to mention that under John Howard’s Coalition government the withholding tax rate stood at 30%.
It was cut to 7.5% by the Rudd government in July 2010.
The federal government has played down suggestions that the latest tax hike will scare off foreign investors.
Tony McDonald, general manager of Treasury’s international tax and treaties division, told a government committee there would be no “flight of capital” though he acknowledged that some transactions would not take place due to the higher tax rate.
He also said the impact of the tax hike on the economy would be “fairly minimal”.
McDonald made his remarks while giving evidence to the House of Representative Standing Committee on Economics earlier this week as it met to consider the withholding tax increase (as contained in the Income Tax Amendment Bill) and other new pieces of legislation.
According to Treasury estimates, the tax increase will bring in additional revenue of $260 million over the next four years.
Also giving evidence, Martin Codina, director of the Financial Services Council, claimed lost investment would be much higher than the increased tax revenue.
He claimed as much as $1 billion in investment had already been lost while goodwill generated by the low tax rate would also be lost.
</body></html>

Tasmanian Liberal senator joins chorus against doubling of foreign investor tax – but keeps quiet on Howard-era 30% tax rate

<html><body>
The Reserve Bank could easily have sat on its hands for a while longer and waited to see how the crisis within the eurozone and the slowing of China’s economy plays out before following up last month’s 50-basis-point cut to the cash rate. The fact that it didn’t signals its concern about the conditions both offshore and within the domestic economy.
The 25-basis-point cut announced today takes the cash rate back to where it was in November 2009, when the world was emerging from the nadir of the original financial crisis and within a single 25-basis-point move of the low point of that cycle in official rates. That provides a useful barometer of the current economic and financial climate.
There were a number of reasons why the RBA shouldn’t have cut today.
The new Greek elections on June 17 are likely to be another flashpoint in the eurozone crisis. European leaders are trying desperately to put together a new (some cynics might say ‘first’) ‘’masterplan’’ to escape a eurozone implosion. China is trying to rekindle growth.
Within the Australian economy we’ve yet to see the full impact of last month’s 50-basis-point reduction in official rates (less what the banks retained), or the impact of the Gillard government’s latest $2.5 billion cash splash or the recent significant decline in the value of the Australian dollar.
There was also, <a target="_blank" href="/news">as discussed previously</a>, the issue of preserving as much of the RBA’s diminished capacity to stimulate as it could in case the eurozone does blow up.
There were, therefore, reasons why deferring a move until both the global and local circumstances became a bit clearer might have been a rational decision.
Yet the RBA decided to move, albeit by a modest 25 basis points, which will probably end up being slightly less than that after the banks have trimmed it to offset their increased funding costs. By itself, 25 basis points, or whatever ultimately flows through to households, isn’t going to turnaround the increasingly defensive sentiment of consumers.
That says that the RBA is concerned. It is worried about Europe. It is worried about China. It is worried about the domestic economy. As it should be.
Europe is a basket case and has, as the RBA noted, the potential to generate shocks that would be transmitted through the global financial system and economy. Issues of fiscal sustainability (the eurozone’s fiscal settings can’t be sustained) and its under-capitalised banking system represents a severe threat to global economic and financial stability.
The US is experiencing anaemic growth and faces a shock of its own next January, when the withdrawal of the Bush administration’s tax cuts and mandatory cuts to government spending will yank about $US7 trillion out of its economy, probably forcing it back into recession.
China’s attempt to stamp out a property-centric bubble has been successful, perhaps too successful and it is now, in a year when its leadership will change, trying to rekindle its growth rate.
Its slowdown, and the reality that Europe and the US – approaching half the world’s GDP and China’s two biggest markets – are under continuing pressure has impacted commodity prices, and the Australian dollar and placed a question mark over the uncommitted slabs of what had been a $500 million-plus pipeline of resource project investments in this economy. It hasn’t helped, of course, that the costs of developing those mining projects have been blowing out at a greater rate than almost anywhere else in the world.
The RBA noted significant variations between sectors of the Australian economy, while saying there had been modest growth in the first part of 2012. It also referred to ‘’job shedding’’ in some industries (which appears to be accelerating in the non-resource segments of the economy) and the ‘’precautionary’’ behaviour of households and businesses. (The imminent carbon tax got only a passing reference in relation to its technical impact on inflation rather than its psychological, and real, impact on households and businesses).
After last month’s rate cuts the actual lending rates for borrowers were slightly below their long-term averages but demand for credit remains low as households and businesses continue to deleverage. Despite the cut, house prices – which had been stabilising – have resumed their decline.
The litany of woe and worry and the likelihood that the banks will hang onto at least a sliver of the 25 basis points was, if anything, an argument for a 50-basis-point cut.
The 25 basis points could suggest a bet each way – preserving firepower, keeping the stimulatory impact (once the banks have taken their share of the reduction) modest, seeing whether the weakening of the dollar alleviates some of the pressures on the industrial economy and awaiting anxiously the denouement of the eurozone crisis that the Greek election and Spanish banking crisis might provide.
This article originally appeared on<a target="_blank" href="https://www.businessspectator.com.au/"> Business Spectator.</a>
</body></html>

sbartholomesusz-jWVzVSPmF8

The RBA could have kept rates on hold

<html><body>
The publication of yesterday's monetary policy statement shows the Reserve Bank board appears to have finally gotten the message that the residential housing market is not just treading water but is actually in decline. 
Previous monetary policy statements have acknowledged that the housing market had declined in 2011, but appeared to skirt around the issue of falling house prices in 2012 with some ambiguous-sounding adjectives. 
In May the RBA suggested the housing market was “subdued” and in April the RBA said it was “soft”. 
However, finally in its June statement, the bank has come out and admitted that the market is fallen again in 2012. 
“Housing prices had shown some signs of stabilising around the turn of the year, but have recently declined again,” reads the June statement, though it could not resist adding: “Generally, the housing market remains subdued.” 
This change in perspective on the housing market was noted by Bill Evans, Westpac’s chief economist. 
“In May, house prices were described as 'stabilising', whereas one month on the governor chooses to point out that prices have 'recently declined again',” Evan said in a note following the June cash rate announcement. 
Perhaps taking note of the RBA’s acknowledgement of the decline in the housing sector this year, the Housing Industry Association (HIA) for once did not have an angry word to say about the central bank, reserving its testiness for the banks. 
The HIA press releasebegan with the back-patting headline: “RBA deserves a policy tick of approval for rate cut” and went on to say that the decision to cut rates would “help confidence and activity in residential construction and the wider domestic economy”. 
“Today’s rate cut sends a clear signal that the Reserve Bank is serious about two things: insulating the Australian economy from volatility in the world economy; and improving confidence and activity in the domestic economy,” says HIA senior economist Andrew Harvey.
Harvey says the attention now is on Australia’s banks, which have a “social obligation in such volatile times to pass through 100% of the official rate cut to businesses and households”.
However, others were quick to warn that the rate cut would not be a magic pill for the residential property market. 
Mark Courtney, Colliers International research director, says banks are unlikely to pass on the rate cut in full – “if they pass on any rate cut at all”. 
“Consequently, today’s RBA decision is likely to have only a minimal impact on the real estate sector,” he says. 
“For a greater impact, additional cuts are still needed. Ideally, the RBA will be looking to reduce the official cash rate by another 25 to 50 basis points over the next few months.” 
Paul Nugent, director at Wakelin Property Advisory, warned property market participants not to expect a dramatic reaction in the residential property market off the back of the June rate cut, “at least not in the coming weeks”. 
“There won’t be a massive jump in auction clearance rates and certainly not a spike in property prices. Instead, I anticipate the market to remain steady.
“The market is finely balanced. On one side it’s been held back by weak consumer confidence off the back of international economic uncertainty. On the other side, we have reasonable local economic conditions, lower interest rates, improved affordability, and a transparent market," he says. 
Nugent says that if the interest rate reduction cycle continues, “at some moment a tipping point will be reached when the economic and property fundamentals become so compelling that it will overcome the current inertia born from uncertainty”.
“Keep an eye on the gap between net rental yields and the standard variable mortgage rate. It is currently around 4%, which is its long-term average.  If this gap falls to 3% as a result of falling interest rates and steady-to-rising rents, that will be a green light signal that the property market is ‘good value.’  This may be the tipping point for a more sustained recovery,” he says.
</body></html>

Latest Finance Insights

NAB bring forward first RBA cut to February 2025

Editor's Picks

Developments

New apartments

New townhouses

News

Latest Finance Insights

NAB bring forward first RBA cut to February 2025

Editor's Picks

Receive the latest news stories to your inbox

Developments

New apartments

New townhouses

News