<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

<html><body>
This week's low inflation reading has confirmed a rate cut in a week’s time.
Many punters will argue the Reserve Bank did not need to wait for this particular green light before adjusting the cash rate down, and should have been listening to the line-up of angry homeowners, builders, retailers and manufacturers hooting at Glenn Stevens to put the car in gear and get a move on.
Even the likes of <a href="https://www.propertyobserver.com.au/economy/kochie-slams-rba-as-too-slow-in-responding-to-economic-downturn/2012041754314">Channel 7 Sunrise host David Koch </a>(a self-confessed admirer of Glenn Stevens) has hit out at the Reserve Bank for being too overly cautious and too slow in responding to the current economic downturn at a time when the government is determined to cut spending to achieve a budget surplus in the next financial year.
On the ABC’s Inside Business program this weekend stockbrocker Marcus Padley said he could not believe that the Reserve Bank was still waiting for the inflation figure given the struggles facing the retail and housing sectors.
“Inflation surely is not the issue right now – you have a retail sector and a housing market [literally] on fire and here you have the RBA telling us they will wait for the inflation number, they’re simply missing the point,” said a gobsmacked Padley.
Perhaps facetiously, some economists have suggested that if the RBA is so reliant on the quarterly inflation data then perhaps it should only meet every quarter to decide on interest rate settings.
Alternatively, they could put more emphasis on the range of other more regular data in making an assessment or put more faith in the forecasts of economists, which have been forecasting a low March quarter inflation reading for some time now.
For now the debate will continue to rage about how swiftly the Reserve Bank is responding to the two-speed nature of the economy and why it is placing so much emphasis on containing the effects of the mining boom when other sectors are in real strife.
That is until the RBA makes its May 1 rate announcement and we await to hear whether the banks will pass on the full rate cut or leave borrowers with just a few crumbs.
</body></html>

lschlesinger-FZcF9M3vE6

Inflation reading gives RBA the rate cut green light it never really needed

<html><body>
For months the Reserve Bank of Australia has said it would patiently wait for the consumer price data to confirm that the door was open to rate cuts. It got unambiguous affirmation of that reality from the ABS at 11.30am today.
In the best possible news for Australia’s economy, core inflation printed at just 0.35% in the March quarter. Despite some small upward revisions to last year’s fourth-quarter data, core inflation in Australia is sitting near the bottom of the RBA’s target 2% to 3% per annum band at around 2.2%.
But there is possibly more good news to come. Next quarter the annual inflation numbers will lose the very high underlying inflation print from way back in June 2011. This implies that the annual inflation figures could slide further in the second quarter of 2012.
What does this mean for interest rates? In my last column <a target="_blank" href="https://www.propertyobserver.com.au/economy/what-inflation-means-for-rba-interest-rates-in-may-christopher-joye/2012042354399">I provided a “cheat sheet” based on a range of different outcomes today</a>, which I have enclosed below. We ended up getting a result that arrived somewhere between the top two rows of my table. As you can see from the right-hand-side column, this connotes a minimum 25-basis-point cut in the RBA’s official target cash rate come May.
Click to enlarge
<a title="Click to enlarge" rel="shadowbox" href="/images/stories/april233.gif"><img src="/images/stories/april233thumb.gif"></a>
Speculation will mount that the RBA could go even further with a 50-basis-point cut. One of the most persuasive arguments for this action is additional margin expansion by the banking community.
Assuming the RBA cuts by 25 basis points in May, we will have had a total of three cuts, or 75 basis points worth, since November. If the other banks follow ANZ’s six-basis-point hike by a similar margin, the net benefit to Aussie borrowers would have been 55 basis points, or two rate reductions (taking May as given).
Yet the RBA will probably choose to wait until it has the benefit of seeing the Gillard government’s budget after its May meeting. If it does so, its view of the world remains unchanged, and, finally, the banks do not pass on the May cut in its entirety, then the probability of follow-up relief in June would rise materially.
The low inflation numbers deliver the best of all possible worlds for Australia’s torpid housing market. Mortgage rates are currently around their average levels. However, long-term interest rates, as measured by 10 year government bond yields, are at all-time lows. This should allow banks to further cut the cost of fixed-rate home loans, all things being equal.
In addition to lower fixed-rate loans, the 4 million-plus Australian borrowers on variable-rate loans will get a third rate reduction in May with the prospect of a fourth bout of accommodation in June. Given the news on prices today, the RBA will be comfortable pushing lending rates into “stimulatory” territory—that is, levels that are lower than their long-term averages.
The latest auction clearance rate data in the two biggest auction markets, Sydney and Melbourne, suggest that the overall market is travelling okay. Last weekend auction clearance rates in both cities hit circa 60%, according to RP Data. This followed a noticeable slump in clearance rates, and housing conditions more generally, during the traditionally weak Easter period (see chart below).
Click to enlarge
<a title="Click to enlarge" rel="shadowbox" href="/images/stories/april241.gif"><img src="/images/stories/april241thumb.gif"></a>
In 2012, the Aussie housing market has displayed some signs of stability after the consistent declines experienced during 2011. We forecast this result on the basis of the RBA’s two rate cuts in 2011, although the banks have chiselled away at this relief. The market’s 2012 base is evident in the chart below, which illustrates the 30-day moving average attributable to RP Data-Rismark Eight Capital City Dwellings Index.
Click to enlarge
<a title="Click to enlarge" rel="shadowbox" href="/images/stories/april242.gif"><img src="/images/stories/april242thumb.gif"></a>
Finally, there are tentative signs of life in zombie-like, ultra-premium part of the market. <a target="_blank" href="https://www.propertyobserver.com.au/residential/laurie-sutton-the-kingpin-of-sydney-property-as-he-swaps-mosman-for-kalua-in-palm-beach-in-record-setting-sales/2012042354412">It was reported today that a holiday home in Palm Beach sold for a record price well in excess of $20 million</a>, which, if correct, smashes the previous Palm Beach record of around $14 million. This home had only been listed for seven months before it was snapped up. (Disclosure: a related party was involved in the transaction.)
Christopher Joye is a leading financial economist and a director of <a href="https://www.ybr.com.au/savings/index.cfm">Yellow Brick Road Funds Management</a> and Rismark. The above article is not investment advice.
 
 
 
</body></html>

chrisjoye-JYhJsTrNRC

Interest rate relief now certain for Aussie borrowers: Christopher Joye

<html><body>
The March quarter inflation reading has come in well below economist forecasts, paving the way for a possible 50-basis-point percentage point rate cut on May 1.
Inflation rose just 0.1% over the quarter to be up 1.6% through the year to the March quarter 2012 – significantly below the RBA’s target band of 2% to 3%.
Underlying inflation came in at 2.1% on an annualised basis with CommSec chief economist Craig James said this meant a 0.25% rate cut is now all but certain.
The Australian dollar fell from $US1.031 to $US1.026 following the release of the ABS data.??
The less volatile underlying measure of inflation came in well under expectation with the trimmed mean reading at 0.3% for the quarter and 2.2% annualised with the weighted mean reading of inflation at 0.4% for the quarter and 2.1% on an annualised basis.
Economists had forecast an underlying inflation reading of 0.6% for the March quarter, taking the annual underlying inflation rate from 2.6% in the December quarter to 2.4% in the March quarter.
According to economist Christopher Joye a reading of 0.5% to 0.6% would give the green light to a 25-basis-point cut, with anything lower allowing the RBA to consider a 0.5% rate cut on May 1.
The most significant price rises this quarter were for pharmaceutical products (+14.1%), secondary education (+7.7%), automotive fuel (+2.5%), medical and hospital services (+2.1%), tertiary education (+4.7%) and rents (+1%).
The most significant price falls this quarter were for fruit (-30%), international holiday travel and accommodation (-4.8%), furniture (-6%), audio, visual and computing equipment (-6.3%) and domestic holiday travel and accommodation (-2%).
</body></html>

RBA interest rate cut of 50 basis points possible after very low quarterly inflation of 0.1%

<html><body>
Mortgage enquiries increased for the first time in eight quarters, according to the latest Consumer Credit Demand Index from consumer credit agency Veda, led by strong gains in Queensland, WA and the Northern Territory.
During the March 2012 quarter, mortgage inquiries increased by 0.2% to be up 1.5% year on year.
There were solid increases in Queensland (up 4.4% for the quarter, 10.2% year-on-year), NT (up 4.7% for the quarter, 9.7% year-on-year) and Western Australia (up 7.6% for the quarter, 6.6% year-on-year) indicating that mortgage enquiries may be stabilising.
Mortgage enquiries in NSW dropped sharply (-7.6%) in the March quarter, the only state or territory to record a year-on-year quarterly decline, “a reflection of the expiration of stamp duty exemptions in NSW at the end of last year which resulted in a pull forward of first home buyer demand followed by a drop in the first quarter of 2012”.
During the past 12 months NSW mortgage enquiries are down 0.7%.;
Victorian mortgage enquiries increased by 2.3% over the quarter, but are still down 2% year on year.
South Australian enquiries increased by 3.1% over the quarter but are down 3.2% for the year.
Click to enlarge
<a href="/images/stories/veda.gif" rel="shadowbox" title="Click to enlarge"><img src="/images/stories/vedathumb.gif"></a>
"Turning points in mortgage enquiries usually occur one to three quarters ahead of turning points in house prices, an early warning sign which could indicate that after a continued decline, mortgage enquiries may have bottomed out,” says Angus Luffman, head of consumer risk at Veda. 
“Veda mortgage enquiries are closely related to the number of housing finance approvals so this is a trend to watch, particularly if you are hoping for a future pick-up in house prices. 
"In terms of state by state mortgage activity we are seeing different trends play out with NSW mortgage enquiries being affected by the expiration of stamp duty and Queenslanders starting to bounce back after a challenging year," he adds. 
Credit card applications declined sharply in SA (-12%), NSW (-11.3%) and Victoria (-8.8%) over the last year, while the decline is less severe in Queensland (-1.6%) and WA (-4.2%).  In part, the weakness in credit card applications reflects the rise in the use of debit cards and the introduction of responsible lending laws in 2011, which has led to more steps being added to credit card application processes.  
Overall credit demand rose 1.2% over the quarter with credit card applications up 2.7% and personal loans down 0.3%. 
Compiled by Veda since 2004, the Consumer Credit Demand Index is a quarterly analysis of changes in consumer demand for credit cards, personal loans and mortgages across Australia.



Personal loan applications decreased 1.4% year on year, with reduced demand in all states and territories in the March quarter with the exception of WA and ACT. In sharp contrast to other states, personal loan applications surged in WA (+8.3%) year on year while weakness in personal loan applications was particularly evident in Tasmania(-7%), NSW (-4.4%) and SA (-3.4%).



"Australian households have spent the post-GFC period firmly in saving rather than spending mode and the results show that consumers are still cautious about taking on credit, " says Luffman.
"While applications for credit cards and personal loans have both declined, the reduction in card applications is far greater, showing that they are increasingly falling out of favour with consumers as households continue to focus on saving.  However, the results indicate that Australia's two-speed economy is still in effect with consumer credit demand significantly stronger in the mining states," Luffman adds.



Compiled by Veda since 2004, the Consumer Credit Demand Index is a quarterly analysis of changes in consumer demand for credit cards, personal loans and mortgages across Australia.

 
</body></html>

Mining states lead rise in mortgage inquiries, but NSW falls: Veda

<html><body>
I love reading reports that predict real estate movements.  You’ll hear it trotted out frequently that we’re at “such and such” stage of the “property clock” or property cycle.  Accordingly, over the past few days I’ve read that Brisbane is at <a target="_blank" href="https://bit.ly/ISw7Mq">five o'clock</a>, unless you own a unit that is, in which case you’re at <a target="_blank" href="https://bit.ly/ISxlY2">four o’clock</a> . Adelaide is also at <a target="_blank" href="https://bit.ly/ISw7Mq">five o’clock</a>, but Sydney on the other hand is languishing somewhere between <a target="_blank" href="https://bit.ly/ISyX41">‘3.30 and 5.30’</a> (depending on your “time zone”, no doubt,) and on it goes. 
I’m not averse to predicting property movements.  I’ve done it myself on numerous occasions.  There’s almost an irresistible urge in all of us to “foresee” the future like some modern day-prophet and to be fair, there are fundamental historical patterns that give good hints to the basic principles of timing a market. 
There’s a quirky joke that goes along the lines ‘If you want to tell God a joke, tell him your plans,’ and whether you’re a believer or not it makes the point aptly.
Just take a look at the tumultuous waters over the previous few years that led the majority of economists not only to miss the GFC and the pace of international recovery, but to follow this with continuous misinterpretations on either a rise or fall in the basic cash rate and subsequent strength of the housing market. 
As we’re continually told, on paper Australia has a strong economy, unemployment is low, we’re on the brink of a recourses boom, inflation is “under control”, there’s a shortage of homes, and the population’s growing.  On the surface, it’s the perfect formula for price rises.  However, it didn’t inspire purchasers to get out their wallets in 2011, as record low turnover in overall sales for a decade proved.  Like a snowball effect, as soon as something drops out of sync with a widely accepted formula, a fall in confidence hits the market and impacts predictions even further.
Second-guessing the RBA rate movement has become a popular sport on Twitter and various other media outlets.  Daily I have reports flying into my inbox regarding the most recent RBA rate call. Most are opinions, however a large number have already made predictions assuming a drop in rates for the next meeting.  It’s not based on anything specific, just an interpretation of “hints” contained in the latest minutes as if the decision has already been made – which clearly it hasn’t. 
Furthermore, as far as the home buying market is concerned, it now incurs little relevance – the banks call their own tune regardless of the RBA.  Therefore the auctioneers in Melbourne these past couple of weekends who shouted out in their auction preambles that we’ll soon experience a fall in rates to take us into an upward trajectory of the property cycle are either living in a box or under the impression that the buying market is. 
As for other predictions, it’s true Australia has a shortage of well-located homes where our rising population want and need to live, and it’s true the Australian market is fragmented, with some areas performing better than others as we move through various stages of the property cycle.  However, it’s also true that successive governments have played their part in creating a model of ownership designed to favour the investor and contribute to the shortage of affordable property for home buyers in the areas where most want to settle.
It’s called “negative gearing”, and it’s the proportion of seasoned investors who take advantage of this tax strategy who eagerly watch the property clock I cited above.  Investors make up roughly 35% of the buying market and many have climbed the equity ladder to own a substantial portfolio of property acquisitions.  Figures from the Australian Taxation Office suggest around 2 million Australians claim deductions for net rent, and figures from the RBA show around one-quarter of all household credit is there for the purpose of holding an investment property.  According to the ABS, the level of household debt over the last 18 years grew twice as fast as the value of household assets.  The ratio of household debt over this period has doubled from 9% to 19%. 
On top of this we now have a growing numbers taking advantage of changes in policy that allow investment property to be purchased as part of a self-managed super fund.  So attractive is this proposition that for those with the funds built up to support the strategy, purchasing an established residential property with a long-term trajectory in areas where – under current conditions – an increase in value is inevitable is – for all intense and purposes – a no brainer. 
Real estate industry professionals love investors.  The sales process is generally smoother with less emotional content involved, and the real estate agency often benefit from the rental management of the property, thereby creating a lasting relationship with their client’ and an ongoing income stream.  The majority therefore readily accept the policy.
I can cite all sorts of facts and figures to you regarding negative gearing and arguments for and against the strategy.  It was arguably introduced to increase the supply of housing for those unable or unwilling to buy.  Due to our changing lifestyles and the way we now live and move, most have need for a transitional period in rental accommodation at various points in their lives. Therefore investors make up an important part of the home-buying fabric.  It’s also argued that it reduces demand on public housing.  However, as I pointed out <a href="https://bit.ly/HM8ofY">last week</a>, due to rising prices sandwiching many out the market, demand for public housing is hardly reducing!
Then there are those who take you back to the Hawke/Keeting era during which negative gearing was to some extent “quarantined”.  The result was marginal at best, there was a dampening of investor enthusiasm and a small increase in rental yields in two states.  The changes didn’t stay around long enough to take us through this transitional period and enable effective judgment of the results. Stringent lobbying by the voting real estate fraternity and property investors ensured at first opportunity the policy was re-introduced.
At the time, there was overall fear that the market would crash, which obviously didn’t occur.  However, I have no doubt if the policy were removed, or even scaled down, there would be less demand for established stock and a subsequent dampening in prices.  No vendor enjoys the thought of their property falling in value, however isn’t this precisely what we need if we’re to allow new home buyers to gain a foothold?
Some argue that if housing were to fall in value, home buyers would be discouraged from purchasing fearing a loss on investment.  So embedded is this obsession with watching property prices rise and fall, we seem to have missed the point of why we need it in the first place. Although there’s no doubt, if prices were to stagnate for an extended period of time, or even deflate in value, some would delay a purchase hoping for further drops.  However, it would be a short-term transition.  It’s a natural human desire to own property once you reach a period of life where there’s a need to settle rather than sojourn. The desire for safety and security runs to the very roots of us all.
 
<hr class="system-pagebreak">
 
In countries where property prices are suffering under the consequences of the GFC, residents would still rather own than rent if given the choice. However currently in the US and parts of Europe, many aren’t able to qualify for a home loan under present conditions and therefore don’t have the choice. Regardless of this, if the current model of negative gearing were scaled down, we’d still be a long way from having a surplus of homes, making it extremely unlikely we’d see a crash as some have presumed.
Eight years ago, the RBA cited negative gearing as one reason for growing un-affordability in the market place.  However, those advantaging from the policy have argued that this is somehow OK because we’re not the only country to employ negative gearing as a tax strategy.  As Saul Eslake (of the Grattan Institute) has <a href="https://bit.ly/HUUqTU">pointed out</a> on many an occasion – we may not be the only one, however our policy is at the front of the queue in terms of generosity.
The fact that a few other countries also employ similar incentives provides no realistic platform to argue in favour of the policy.  The real estate market in each country, and within the localities of each country, differs in terms of supply, demand, and affordability.  It’s impossible to compare one against another with a sweeping statement to justify a policy affecting the intrinsic needs of <country-region><place>Australia</place></country-region>’s buying market.  Australia is one of the least densely populated countries in the world in terms of head of population per square metre.  Much of our land is currently un-liveable, and yet we have a rate of population growth that beats even that of <country-region><place>Saudi Arabia</place></country-region>!  To top it off, we’re reportedly set to have a housing shortage of 35 million by 2050.  With fewer and fewer able to afford their own place of residence, the future looks anything but sunny for new home buyers.
The call from successive governments to first home buyers looking to get a foothold to go to the periphery of our cities, where housing is marginally cheaper simply because facilities are scarce and public transport is all but non-existent, is hopeless.  The primary reason new estates don’t turn over a reasonable proportion of sales outside of inflationary stimulus packages such as the first-home owners’ grant., isn’t because home buyers don’t like new homes.  It’s because the new areas give no promise of essential community facilities and are hampered with expensive development overlays intended to fund the “ever-promised” schools and public transport systems that seem to take some 20 years to implement. If you want buyers to move there, you’ve got to do more than just build an excess of roof space.
Furthermore, the level of high-rise developments intended to increase the supply of affordable accommodation in our cities are often poorly designed, provide a low-quality living space, and fall out the reach of most first home buyers due to stringent lending restrictions from banks, who see the purchase of this type of oversupplied accommodation a high risk acquisition.  Coupled with this, due to the high number of investors who buy into the new developments looking for a good yield, they don’t offer affordable rental accommodation (hence why so many sit vacant).
The reason why first-home buyers are buffeted out to the outer suburbs is because our models of investment – whether it be negative gearing, land banking, or borrowing to purchase in a self-managed super fund – are solely reliant on capital growth.  You don’t need a master’s degree to understand that the levels of capital growth we’ve been used to seeing in Australia are principally caused by decades of poor planning, which has ensured everyone is squashed around our capital cities for employment and reasonable access to good schools and other essentials such as a local GP and public transport.  For this reason, 93% of investor house and apartment purchases are in the highly sort after inner-suburban locations where most people need to live if they don’t want to face a life stuck in paddock land.
Let’s be realistic about this, it’s essential we encourage personal investment as a plan to support retirement.  Furthermore, there will always be a need for property investors to provide accommodation for those unable to purchase.   However to put policies in place to encourage this in the highly sought-after home buyer suburbs, at the expense of a growing number of people who have no hope of ever owning their own place of residence, does nothing to promote a fair and prosperous democratic nation for all.  It simply splits the population down the centre between those who have and those who have not.
Joe Hockey may want to reduce the country's expenditure on welfare; however under the current system of ownership, which tips the market in favour of the investor and out of reach of the first home buyer, there is little hope of doing so.
The reason we need a policy change isn’t just about reducing affordability in the inner suburbs, it is essential we start creating models of ownership to encourage investment in the outer suburban thresholds where new supply is dearly needed and communities need to grow. At the moment, if forced to locate into an outer suburban zone, until facilities are provided, most would rather rent than buy, at least until the level of population warrants substantial government and private investment to build the facilities to attract “settlers” not “sojourners”. Therefore investment in these areas is sorely needed – investment that does not rely on capital growth to prosper. 
Back in 2007 an article was posted on <a href="https://bit.ly/IIAJA1" target="_blank">Smart Company </a> predicting “within the next two years legislation will reduce the scope of negative gearing as a taxation benefit.”  Last year the Gillard government reportedly <a href="https://bit.ly/IIBEke" target="_blank">sounded out unions</a> opinions on scaling down the system.  It was also a key recommendation in the Henry Tax Review.  However to date, nothing has been done. 
I can’t help thinking back to a talk I attended where a Victorian state minister was lecturing on the state of our economy (I won’t mention names).  During the course of his speech, he revealed he had ownership of nine investment properties – the majority of which are negatively geared.  He’s no fool – he understands under the current system of investor ownership, property prices in the inner- and middle-ring suburbs prices will continue to inflate over the long term.  Therefore, debating with him – or others like him – for a change in policy will obviously inspire opposition. 
Considering we have growing numbers of investors (and voters) employing negative gearing above other investment strategies, there’s no security – should a change in policy be introduced – that it would last the course of the current or even subsequent governments.  However ethically speaking, for the sake of Australia’s growth, a change in policy (through either “quarantining” current rules or scrapping the system in stages) is a much-needed requirement. 
Catherine Cashmore is a market analyst with extensive experience in all aspects relating to property acquisition. She is Channel Ten’s property expert on <a href="https://bit.ly/I7SGaw">The Circle</a> and a senior consultant for <a href="https://www.nationalpropertybuyers.com.au/">National Property Buyers</a> servicing the needs of property owners Australia wide.
 
 
 
 
</body></html>

catherinecashmore-6LXia3pPQj

Negative gearing is unethical

<html><body>
Rams, Bank of Melbourne and St George have reinforced their unofficial tag as Westpac “budget” brands by all cutting their fixed-rate mortgage products ahead of an expected interest rate cut on May 1.
Mortgage lender Rams has cut its two-year and three-year fixed rate to 5.99%, while its one-year fixed rate of 6.19%
NSW-based St George Bank and Bank of Melbourne have both cut their fixed one-, two- and three-year home loan rates to 5.99% per annum under the Advantage Package for a “limited time”.
Since September last year St George has cut its fixed rates two times, Bank of Melbourne three times and Rams twice.
In contrast, Westpac has not cut its fixed rate mortgage rate since late September last year and offers fixed rates mortgages at a significantly higher rate than its three subsidiary lenders.
On September 27 Westpac cut its fixed rates by 20 basis points, offering a new one-and two-year fixed rate of 6.49%, and 6.44% for three-year term home loans.
In addition to the lower fixed rates, both Bank of Melbourne and St George are promoting other home loan incentives aimed at encouraging borrowers to switch over.
Until 30 April, Bank of Melbourne is offering discounts of up to 0.9% per annum off new standard variable rate home loans for total borrowings over $500,000 as part of Advantage Package. Great lower discounts of up to .85% p.a. are also available for home loan amounts between $250,000 and $500,000 under Advantage package.
St George is offering new customers $700 towards switching costs on selected new home loans under the Advantage Package, if they switch their current loan of $250,000 or more from another financial institution. The switching costs offer applies for new home loan applications received by May 31 and settled by July 15, 2012.
RAMS chief executive Melos Sulicich says there is “simply no better time to forget the banks and forget rate rises” following its fixed rate cuts.
“With greater competition in the lending market, home buyers now have more choice and flexibility than ever before making it the perfect time to make the break from their current lender,” he adds.
Sulicich highlighted recent research by Rams that shows that “62% of home seekers would prefer an alternative lender such as a credit union or non-bank lender”.
“Only 28% of home owners told us that the major banks generally offer the best mortgage deals. By comparison, 44% felt that the various alternative lenders provide a better deal.”
 
 
</body></html>

Rams, Bank of Melbourne and St George undercut parent company Westpac on fixed rates

<html><body>
Federal Treasurer Wayne Swan has come under attack from non-bank lending pioneers John Symond and Mark Bouris for hindering competition in mortgage lending and allowing the major banks to increase their dominance of the home lending market.

Symond and Bouris, as respective founders of non-bank lenders Aussie Home Loans and Wizard Home Loans, were at the forefront of the rise of the non-bank lending sector in the late 1990s up until the start of the GFC.

Prior to the GFC, non-bank lenders accounted for around 15% of all mortgage, but Bouris and Symond have watched the sector founder since, as the major banks have taken a stranglehold on the market. 

Non-bank lenders accounted for just 3% of all mortgages written in February, according to ABS data.

The graph below shows how the market share of the major banks has jumped from around 80% of the market to over 90% since the onset of the GFC.
Click to enlarge
<a title="Click to enlarge" rel="shadowbox" href="/images/stories/feb23.gif"><img src="/images/stories/feb23thumb.gif"></a>
Source: ABS
Symond says the Treasurer’s decision to ban exit fees on new mortgages from July 1 last year had made it tougher for non-bank lenders to compete.
Non-banks charge low upfront fees as a way of differentiating themselves from the major banks and prior to the ban could recoup the fees if the borrower exited a loan early.
Symond says the exit fee made a good headline for Swan but in reality was “bad news for consumers, because it made it even harder for the non-bank sector to compete”.
“At the moment, there is no competition,” Symond told the Australian Financial Review.
“Wayne Swan, regardless of what he has said, he hasn’t helped competition with the small lenders. In fact he has made it tougher.”
Symond does not expect the Treasurer to reverse the government policy on exit fees but says the government could improve competition if the Australian Office of Financial Management (AOFM) were to buy more residential mortgage-backed securities (RMBS) from non-banks.
Non-bank lending virtually collapsed as a result of securitisation markets closing following the GFC.
In September 2008, the AOFM instigated a program of buying RMBS from lenders with the aim of helping support competition in lending.
However, while some non-banks were recipients of the scheme, many of the investment mandates were awarded to the major banks to assist their wholesale lending operations.
Mark Bouris, chairman of Yellow Brick Road and former adversary of Symond in the late 1990s heyday of non-bank lending when running Wizard Home Loans, places the blame squarely on the shoulders of the Treasurer and not on the shoulders of RBA governor Glenn Stevens.
“Don’t blame the Reserve Bank: it only has interest rates to use against a dynamic set of forces that haven’t yet settled into their new shape,” says Bouris.
Bouris does not advocate more regulation of lending markets but says there is a case for “using incentives to alter the structural problems”.
“A first step could be to foster competition by encouraging our regional banks and foreign banks to compete in mortgage lending,” Bouris says.
“There are tax incentives that could be used, and there are models where the Australian government could guarantee the small and non-banks, and not the big banks.
“It doesn’t matter how we get there, but we do need more competition in lending. Competition will bring down the margins on variable rate mortgages and lure the big banks towards business lending again, where they can charge higher margins.
“The market is actually poised to correct itself, but there has to be an incentive,” he says.
Despite their miniscule share of the market, Swan claimed in his February economic update that there was more competition in the banking sector due to the government’s decision to ban exit fees on new mortgages from July 1 last year and other reforms such as the introduction of <a target="_blank" href="/news">one-page fact sheet</a>s to make it easier to compare mortgage products.
“Reforms like these have clearly turned up the heat on competition in the banking sector,” said Swan as part of the note, highlighting that smaller banks had increased their share of mortgage lending by $9.7 billion over the 12 months since the reforms were implemented.
 
 
 
 
 
</body></html>

Mark Bouris and John Symond slam Treasurer Wayne Swan for allowing major banks to dominate mortgage market

<html><body>
An underlying quarterly inflation reading of around 0.6% tomorrow would give the RBA the green light to cut interest rates on May 1, say economists.
This is the median underlying inflation forecast by market economists, which would take the annual underlying inflation rate from 2.6% in the December quarter to 2.4% in the March quarter.
According to a survey of 17 economists by AAP, CPI is forecast to rise by 0.7% in the March quarter for an annualised rate of 2.1%, with median underlying inflation forecast at 0.6% for the quarter and 2.4% over the year.
The RBA targets an annualised average inflation reading of between 2% and 3%.
RBA governor Glenn Stevens stressed the importance of the inflation outcome in the release of April monetary policy meetings:
“If slower growth in demand could be expected to result in a more moderate inflation outcome, then a case could be made for a further easing of monetary policy.
“The Board would have the opportunity at its next meeting to review the inflation outlook based on comprehensive new data on prices, as well as information on demand and output. Members judged it prudent to evaluate those data before considering a further policy adjustment,” said Stevens.
The Commonwealth Bank is forecasting underlying inflation of 0.6% in the March quarter, with CBA chief economist Michael Blythe saying the data is “unlikely to stand in the way of a rate cut”.
Similarly, HSBC chief economist Paul Bloxham wrote in his most recent RBA Observer update: “We are sticking by our view that a trimmed mean CPI print of 0.6% or below would be enough to the see the RBA cut rates in early May, while at 0.7% it would be a close call and a 0.8% would see them on hold”. 
Borrowers will be hoping the major banks pass on the full rate cut.
It is now over a week since <a href="https://www.propertyobserver.com.au/mortgages/anz-lifts-rates-again-after-keeping-consumers-in-suspense-until-knock-off-time-rba-interest-rates-aftermath">ANZ raised its variable mortgage rate by 0.06% to 7.42%</a> as part of its monthly independent rate review, with the higher rate kicking in on Friday.
None of the other major banks have lifted their standard variable rates in April to date.
Westpac subsidiary brands <a href="https://www.propertyobserver.com.au/mortgages/no-variable-interest-rate-decision-from-remaining-big-banks-as-st-george-trims-fixed-rates">St George</a> and Bank of Melbourne along with mortgage lender RAMS have all cut their fixed-rate home loans, with Mortgage Choice tweeting that this could be an indication that borrowers should not expect variable rate increases.
 
 
</body></html>

Quarterly inflation number will decide May RBA interest rate cut: Economists

<html><body>
Federal Finance Minister Penny Wong has denied that the Prime Minister is putting pressure on the Reserve Bank to cut rates, insisting that the government’s focus is returning Australia to surplus. 
Yesterday, Julia Gillard said that a budget surplus would give the RBA the opportunity to lower interest rates. 
Wong later said that Gillard wasn’t trying to “heavy” the central bank into cutting rates. 
Economist Christopher Joye said yeseterday that the Prime Minister's speech was an <a target="_blank" href="/news">attempt to politicise the RBA.</a> 
This article originally appeared on <a target="_blank" href="https://www.startupsmart.com.au/">StartupSmart</a>.
</body></html>

cknowlton-QnEa6ntUYP

Finance Minister Penny Wong denies government pressure on RBA to cut rates

<html><body>
Many borrowers may not have heard of Collins Home Loans, which currently offers a standard variable mortgage rate of 6.32%, the lowest in Australia. 
The decision by ANZ to raise it is variable mortgage rates by six basis points to 7.42% on Friday means it currently offers a standard variable mortgage that 110 basis points more expensive the Collins Home Loans. 
The Melbourne-based mortgage lender was founded by CEO Rob Emmett in 1992 and currently has mortgage book of about $800 million. 
Collins Home Loans finances its lending through a mix of its own residential mortgage backed securities program, on-balance sheet lending and from residential mortgage-back securities funding from other lenders. 
Its home loans are distributed nationally via mortgage brokers. 
“We broadcast ourselves far and wide… We have found a sweet spot with the first-home buyer market and also with borrowers seeking construction finance,” Emmett, a qualified CPA and fellow of the Mortgage and Finance Industry Association, tells Property Observer.
“We have a healthy mix of loans,” he says.
The Collins Home Loans mission statement says that it sources its funds in “exactly the same way as the banks”.
“The only difference is that we deliver a much more competitive and flexible product because we don’t have to accommodate a branch network and over-priced marketing budgets like the banks.”
In March, Collins Home Loans general manager Allan Willoughby told mortgage broking magazine The Adviser that non-bank lenders were ready to step in when major banks lifted rates out of the RBA cycle.
“People are already expecting the majors to move out of cycle with the Reserve Bank. If and when this happens, the non-bank sector will be ready to swoop in and reclaim some of that all-important market share,” he said.
The range of Collins Home Loans includes first-home buyer loans, investment loans, fixed rate loans, self-employed loans and low-doc loans.
 
 
</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