<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 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.
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lschlesinger-FZcF9M3vE6

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

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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>
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Replacing stamp duty with land tax needs debate: REIV

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

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

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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.
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mmortlock-YX58RgDaQB

Why more depreciation deductions are available for units than houses

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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.
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chrisjoye-JYhJsTrNRC

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

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

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

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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>
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The RBA could have kept rates on hold

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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.
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