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

Joel Robinson

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

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

Lowe Living unveils Middle Park apartment development

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

DVB Projects to launch second Broadbeach apartment tower as demolition commences

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

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

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

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

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

National Australia Bank (NAB) has brought forward the timing of the first RBA cash rate cut by three months.

NAB is now expecting a cut in February, in line with ANZ and Westpac, having initially thought a cut wouldn't come until May.

Commonwealth Bank, the nation's largest lender, still thinks the first cut will come in December.

NAB changed its call following the August monthly inflation figures that were released at the end of September, showing it had dropped to 2.7 per cent.

"The risk has been skewed to a first cut earlier in 2025, and today’s change acknowledges the balance of risks has likely shifted sufficiently for the RBA to feel comfortable cutting a little sooner than we earlier expected," NAB noted in its latest update.

They added that the cadence of the cuts may be faster than its central profile.

"Domestic inflation pressures are cooling, but only gradually, and we continue to expect the conditions for a cut will not be in place this year.

NAB believes the easing cycle will end at 3.1 per cent by early 2026, which is five cuts from the current 4.35 per cent cash rate.&nbsp;

CBA also thinks 3.1 per cent will mark the end of the cutting cycle, while Westpac is forecasting 3.35 per cent, and ANZ is the most pessimistic at 3.6 per cent, which would be just three interest rate cuts.

<h2>What would a rate cut in February look like for borrowers?</h2>

According to&nbsp;<a data-saferedirecturl="https://www.google.com/url?q=https://link.mediaoutreach.meltwater.com/ls/click?upn%3Du001.IVvjJ-2BPT0A8C3VxtqKc6e3bj5hBuw27WFEYqovsYs7kPsgFulYrdOzeP8gI7CybJOya3_RgrM7qq-2BfK-2FtAHeRBLv5Qrb-2Bii5fzjLeKcP4w-2FkNgJPXygpiRhVUan3WV3QEggcf617UC8Z60RjQJZAqx7PiO7FtVJQSn0D46Zc3iTVP0kAhTTzG51cPpa5hrqz1OkSA-2BiXAxUajQ686MTtiseWBIdMdknd83aB7cOVgXlVTeHCGf3-2BcMHwfvI8TYlkUovqEhn4dj0KXf2eJGpb9-2BBv20hPXdLlPP9yD7DvFFDBM5yrTqxvcCiMfAsW1onD-2FcriL628eYdhNQE7bwzYrxcOYnmaYfRhGl-2FEHQ6eK2uQcLxs6Cbu6Dx0bYvpi5A6enmxMWU5TkcRYrP6Z8GbXZYtc5qSoKu6eWFBQR9K7fsjXwHMmby3D3X6Yx-2BxcDcdRruTG&amp;source=gmail&amp;ust=1727774368149000&amp;usg=AOvVaw2vK2ujS77CHs9VRvSSXzLC" href="https://link.mediaoutreach.meltwater.com/ls/click?upn=u001.IVvjJ-2BPT0A8C3VxtqKc6e3bj5hBuw27WFEYqovsYs7kPsgFulYrdOzeP8gI7CybJOya3_RgrM7qq-2BfK-2FtAHeRBLv5Qrb-2Bii5fzjLeKcP4w-2FkNgJPXygpiRhVUan3WV3QEggcf617UC8Z60RjQJZAqx7PiO7FtVJQSn0D46Zc3iTVP0kAhTTzG51cPpa5hrqz1OkSA-2BiXAxUajQ686MTtiseWBIdMdknd83aB7cOVgXlVTeHCGf3-2BcMHwfvI8TYlkUovqEhn4dj0KXf2eJGpb9-2BBv20hPXdLlPP9yD7DvFFDBM5yrTqxvcCiMfAsW1onD-2FcriL628eYdhNQE7bwzYrxcOYnmaYfRhGl-2FEHQ6eK2uQcLxs6Cbu6Dx0bYvpi5A6enmxMWU5TkcRYrP6Z8GbXZYtc5qSoKu6eWFBQR9K7fsjXwHMmby3D3X6Yx-2BxcDcdRruTG" target="_blank">Canstar</a>, if there is a cut in February, a borrower with a $600,000 loan today and 25 years remaining would see their monthly repayments drop by $92.&nbsp;

<table border="1" cellpadding="0" cellspacing="0">
	<tbody>
		<tr>
			<td colspan="3">
			Impact of 0.25% pt cut in February 2025
			</td>
		</tr>
		<tr>
			<td>
			Current loan size
			</td>
			<td>
			Drop in monthly repayment
			</td>
			<td>
			New monthly repayment
			</td>
		</tr>
		<tr>
			<td>
			$600,000
			</td>
			<td>
			-$92
			</td>
			<td>
			$3,907
			</td>
		</tr>
		<tr>
			<td>
			$750,000
			</td>
			<td>
			-$114
			</td>
			<td>
			$4,884
			</td>
		</tr>
		<tr>
			<td>
			$1M
			</td>
			<td>
			-$153
			</td>
			<td>
			$6,512
			</td>
		</tr>
		<tr>
			<td colspan="3">
			Source:&nbsp;<a data-saferedirecturl="https://www.google.com/url?q=https://link.mediaoutreach.meltwater.com/ls/click?upn%3Du001.xWMOP9hChsvn-2BC9O-2FebBihXIZ4cEzbiuENdxm-2Bx3-2FYEEgYMhZlKWNj5Zzy1YZ56RuASD_RgrM7qq-2BfK-2FtAHeRBLv5Qrb-2Bii5fzjLeKcP4w-2FkNgJPXygpiRhVUan3WV3QEggcf617UC8Z60RjQJZAqx7PiO7FtVJQSn0D46Zc3iTVP0kAhTTzG51cPpa5hrqz1OkSA-2BiXAxUajQ686MTtiseWBIdMdknd83aB7cOVgXlVTeHCGf3-2BcMHwfvI8TYlkUovqEhn4dj0KXf2eJGpb9-2BBv20v2akwr6-2BqLyRrlEgkJ4J-2BCCyY0x189xEHZA4Ylf8c7ChBqNIkhmftZzoFuZKFn43pw3oJVg2o1gumrpdA-2B7MB-2FBtmL2rFCI-2FXORATQHySCLVOMg7Vywv-2BqnnQUAtDz6XkvpwxdHFXh70VwKazzhJsICilEYOvP4ju0sIfi5g6TL&amp;source=gmail&amp;ust=1727774368149000&amp;usg=AOvVaw2qVnp6oqATgqDUi2Frm22q" href="https://link.mediaoutreach.meltwater.com/ls/click?upn=u001.xWMOP9hChsvn-2BC9O-2FebBihXIZ4cEzbiuENdxm-2Bx3-2FYEEgYMhZlKWNj5Zzy1YZ56RuASD_RgrM7qq-2BfK-2FtAHeRBLv5Qrb-2Bii5fzjLeKcP4w-2FkNgJPXygpiRhVUan3WV3QEggcf617UC8Z60RjQJZAqx7PiO7FtVJQSn0D46Zc3iTVP0kAhTTzG51cPpa5hrqz1OkSA-2BiXAxUajQ686MTtiseWBIdMdknd83aB7cOVgXlVTeHCGf3-2BcMHwfvI8TYlkUovqEhn4dj0KXf2eJGpb9-2BBv20v2akwr6-2BqLyRrlEgkJ4J-2BCCyY0x189xEHZA4Ylf8c7ChBqNIkhmftZzoFuZKFn43pw3oJVg2o1gumrpdA-2B7MB-2FBtmL2rFCI-2FXORATQHySCLVOMg7Vywv-2BqnnQUAtDz6XkvpwxdHFXh70VwKazzhJsICilEYOvP4ju0sIfi5g6TL" target="_blank">www.canstar.com.au</a>. Starting rate is the RBA existing average owner-occupier variable rate of 6.36%. Assumes banks pass the cash rate cut on in full the month after the meeting.
			</td>
		</tr>
	</tbody>
</table>

Canstar Data Insights Director, Sally Tindall, says if core inflation continues to track in the right direction, or unemployment starts to accelerate significantly, we could well see a cash rate cut as early as February of next year.

“All four big banks now believe the RBA will be ready to cut the cash rate in just over four months’ time, if not before, in the case of CBA.

“However, the outlook for both inflation and unemployment is still highly uncertain. A couple of wobbly sets of inflation data could see the RBA holding for longer, particularly if unemployment remains relatively steady."

&nbsp;

Commonwealth Bank, the nation's largest lender, still thinks the first cut will come in December.

NAB bring forward first RBA cut to February 2025

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As any buyer of a home for $550,001 or more will attest to, stamp duty rates in Victoria are in need of revision. 
It will surprise most home buyers to know that if you purchase a home to live in for $550,001 rather than $550,000 then you will be forced pay an additional $3,100 in stamp duty. This is because the stamp duty payable on a home purchased for $550,000 is $24,970 and on a home purchased for $550,001 it is $28,070.
This anomaly dates back to 2007, when stamp duty rates were cut for homes lived in by the purchaser and valued under $550,001. Those purchased for a higher amount were subject to the older stamp duty scales.
There is no rational reason for this, and it seems unfair to penalise buyers who need to pay just a little bit more. To someone buying a new home, $3,100 could, for example, meet relocation costs or legal expenses.
It’s interesting that the distortion to the scales does appear to have created a high number of buyers at the $550,000 price point. In 2011 there were 418 buyers who paid $550,000 and avoided the extra $3,100 in stamp duty and only 28 who paid between $550,001 and $551,001. This, however, may simply be because $550,000 is a round number.
The REIV has campaigned to have stamp duty reduced; however, the unfair distortion of the tax scales at $550,000 shows that the rates could also easily be made fairer.
Enzo Raimondo is CEO of the <a href="https://www.reiv.com.au/" target="_blank">Real Estate Institute of Victoria</a>.
 
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enzoraimond-7fvRFHPR52

When a dollar extra paid for property costs you $3,000 in tax

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In a not surprising (for readers of this column) attempt to politically pressure Australia's central bank, <a href="https://afr.com/p/national/pm_surplus_can_drive_down_rates_fjKXptC6sJlyBIDEPgt7YI" target="_blank">a major media outlet</a> reports today that the Prime Minister has broken with historical convention – for an incumbent government – and called on the RBA to lower interest rates given the government's mooted fiscal promises. This is after the current Labor government controversially took away the RBA board's pay-setting powers because it was too generous with the governor's salary package, replaced one independent (and hawkish) director with a manufacturing industry lobbyist who describes herself as a "growth girl" and an inflation "dove", and broke with long-term convention by replacing the board's standing independent academic expert (another hawk, Professor Warwick McKibbin, who had offered himself up for re-election) with a former advisor to a Labor prime minister, Paul Keating.  Some have also observed that while the current RBA governor contentiously hiked rates in the final month of the 2007 election campaign as the global financial crisis was brewing – an election that the Liberal Party lost that month – he did not touch rates during the subsequent 2010 campaign despite possessing a hawkish bias, waiting until November to raise them pointedly after Labor had scraped home with a hung parliament. In a panel interview with Bloomberg yesterday, the former RBA board member, McKibbin, described the government’s recent elections to the RBA board as "disconcerting". McKibbin advocated a board structure comprising of three RBA staffers (currently there are only two), three independent economics experts (currently there is one), and three "community representatives" with no politically appointed treasury secretary.  The <a href="https://afr.com/p/national/pm_surplus_can_drive_down_rates_fjKXptC6sJlyBIDEPgt7YI" target="_blank">Australian Financial Review</a> reports that today: “Prime Minister Julia Gillard will aggressively link her budget ­surplus goal directly to lower interest rates, saying that the Reserve Bank of Australia has “plenty of room” to cut its 4.25% cash rate... Her speech to business leaders in Perth will also make the case for a reweighting of monetary policy which could help push down the ­Australian dollar and provide relief to manufacturers, exporters and the tourist industry. In effect putting the political success of next month’s budget into the hands of the Reserve Bank board, Ms Gillard will say that the large ­interest rate differential between ­Australia and offshore markets gives the RBA “plenty of room to move ­further if need be”. The Prime Minister is quoted apparently calling on Australia's central bank to re-focus on its antediluvian 1959 mandate, which requires it to give equal weight to employment, growth and price stability. Since that time, however, the treasurer of the day and the governor of the RBA have signed a total five "<a href="https://www.rba.gov.au/monetary-policy/framework/stmt-conduct-mp-5-30092010" target="_blank">Statements on the Conduct of Monetary Policy</a>" documents that explicitly subordinate the employment and growth goals in the 1959 Act to allow the RBA to focus mainly on one medium-term objective: price stability. Specifically, the latest statement signed by Wayne Swan and Glenn Stevens says (emphasis added): "Since the early 1990s, inflation targeting has formed the basis of Australia's monetary policy framework. Since 1996, this framework has been formalised in a Statement on the Conduct of Monetary Policy. The inflation targeting framework has served Australia well and is reaffirmed in the current statement...  [The three objectives outlined by the 1959 Act] allow the Reserve Bank board to focus on price (currency) stability while taking account of the implications of monetary policy for activity and, therefore, employment in the short term. Price stability is a crucial precondition for sustained growth in economic activity and employment. Both the Reserve Bank and the government agree on the importance of low inflation and low inflation expectations...[and] on the objective of keeping consumer price inflation between 2 and 3%, on average, over the cycle." In today's speech the Prime Minister seems to confuse these priorities. Without having the benefit of the first-quarter inflation results, which are expected to be benign, or revisions to the 2011 inflation numbers, the Prime Minister advocates the employment and growth benefits of lower rates with inflation-targeting added as an after-thought:  “In the current economic environment, should the RBA consider it appropriate to change the cash rate, this could deliver widespread benefits for households and business – noting that a number of sectors of the economy most under strain are arguably more sensitive to interest rates...This is fully consistent with the Reserve Bank’s charter obligations to best contribute to economic prosperity and full employment, as well as containing inflation.” One problem for the RBA is, as McKibbin explained yesterday, that the current government's forecasts and commitments to fiscal contraction are already accounted for in the central bank's analysis (since Treasury have always projected a steep fiscal consolidation following a fiscal stimulus that McKibbin believes was twice as large as it needed to be) and are, in any event, merely political promises. At the invitation-only Bloomberg conference, McKibbin argued that the RBA would be far more focused on what policies the government actually delivers given its history of missing commitments. He also suggested that it was unreasonable to ask the RBA to make decisions today on the basis of assumed budget outcomes before it had the benefit of both seeing what is promised on the May 8 and what the government ultimately delivers.
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.
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chrisjoye-JYhJsTrNRC

Australian Prime Minister politicises the RBA – again: Christopher Joye

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Generation Y are savvy and sceptical and make up nearly half of the nation’s first-home buyers, according to QBE Insurance’s mortgage report.
The LMI Barometer found that 45% of the first-home buyers it surveyed are under 30 years old, and many borrow money family to help them onto the property ladder. In fact, 20% of this group lives at home while saving, which is up from 18% last year.
While dedicated saving is how 91% of first-time buyers gather their deposits, one in 10 confess to raising money through loans from parents. Indeed, 20% of this group has a guarantor for their loan – usually their parents.
The LMI Barometer found that 41% of first-home buyers have a household income of between $100,000 and $200,000. As a sector, they are also motivated to lenders with low deposit requirements.
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“The average deposit for first home buyer respondents is $60,821, which takes 4.7 years to save and is well below the overall average deposit of $101,767,” the study found.
They are also more pessimistic than other groups, and 83% consider property to be overvalued, which includes 50% who think prices are ‘significantly overvalued’.
But the cynicism does not dampen enthusiasm to spend, with 44% of this group aiming to have bought a property in 12 months. On average Gen Y first-home buyers will borrow $372,259. On their way to that purchase, they do better research and rely on external advice more than other market segments surveyed.
More than half of the first-time buyers’ respondents believe that property prices will be stable or higher in 2012, which is down from the 73% who believed the same in 2011.
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“First-home buyers have a fairly bullish outlook on property over the medium term, with 52% agreeing property prices will increase strongly over the next three years. This is ahead of the national average of 42%,” the report says.
Possibly due to fears about rising property prices, 39% of this group thinks it is more important to enter the market now rather than save for a bigger deposit.
 
 
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andreadixon-oif3j7eKne

Gen Y first-home buyers pessimistic about house prices but eager to get into the market: QBE LMI survey

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A fundamental truism of economics is that if you tax something, you get less of it. Tax is thus a good place to start in seeking to explain why Australia’s housing market is chronically under-supplied, with adverse implications for housing affordability.
Many commentators have argued that housing is tax advantaged because of the principal residence exemption from capital gains tax. They see the exemption as a source of increased demand for housing and a negative influence on housing affordability rather than a boost to housing supply.
This leads to the incorrect conclusion that housing affordability could somehow be improved by abolishing the principal residence exemption and other tax concessions. For example, journalist George Megalogenis has written that “housing can only become more affordable if prices stop rising… It can only be done by making property less attractive than other investments, such as shares or superannuation… bricks-and-mortar should lose its taxpayer supports.”
The Henry Tax Review was commendable for rejecting the view that saving via owner-occupied housing should be taxed. The Henry Review favoured an expenditure tax benchmark that exempts the returns to saving from tax, including saving via housing. The final report’s recommendation that saving via owner-occupied housing remain tax-exempt was explicitly based on this benchmark. The final report also recommended that the returns to other forms of saving, including capital gains on other assets and net residential income and losses, should enjoy a 40% tax discount.
The Henry tax review made clear that the problem with Australia’s tax system is not that saving via housing is taxed too lightly, but that other forms of saving are taxed too heavily. The principal residence exemption from capital gains tax is in fact model tax policy based on an expenditure tax benchmark.
Henry’s suggested move to a 40% savings income discount is designed, among other things, to remove “the current bias towards negatively geared investment in rental property and shares.” However, this recommendation was made subject to the important proviso that supply-side constraints in the housing market need to be tackled first and that phase-in arrangements should apply to minimise disruption to the housing market.
The final report noted that “changing the taxation of investment properties could have an adverse impact in the short to medium term on the housing market… reducing net rental losses and capital gains tax concessions may in the short-term reduce residential property investment. In a market facing supply constraints, these reforms could place further pressure on the availability of affordable rental accommodation.”
The pre-occupation of many commentators with the principal residence exemption from capital gains tax and negative gearing has diverted attention from the fact that housing in Australia, far from being supported by the tax system, is in fact very heavily taxed. A recent report by private consultancy, the Centre for International Economics (CIE), “<a target="_blank" href="https://hia.com.au/media/Industry-policy/~/media/Files/documents/CIE%20Tax%20Report.ashx">Taxation of the Housing Sector in Australia</a>,” prepared for the Housing Industry Association, quantifies the tax burden and its adverse implications for housing affordability.
The tax burden on new housing includes direct taxes such as the goods and services tax, stamp duty, land tax and council rates, as well as a variety of indirect taxes on inputs into housing and hidden taxes that arise from the planning and approvals process. CIE estimate that these taxes account for 44% of the purchase price of a representative new home in Sydney or around $267,879. Most of the burden of these taxes falls on home buyers and not home builders because the demand side of the housing market is less price sensitive than the supply-side.
The tax burden on housing also accounts for much of the financing cost of a new home and thus the burden of mortgage debt and associated interest payments. The cost of financing the tax component of the price of a new house in Sydney is equivalent to 33% of the after-tax income of a young couple aged between 24 and 35 on average wages. The burden is even higher in the first year when stamp duty is paid, accounting for a staggering 72% of after-tax income.
Australia’s under-supplied housing market and housing affordability problem is largely due to the tax burden on housing. Abolishing the principal residence exemption from capital gains tax and negative gearing would only add to this tax burden and further reduce housing supply.
Substantial gains in the efficiency of the tax system and housing affordability could be achieved through the substitution of more efficient taxes such as the goods and services tax for inefficient taxes on residential property. CIE estimate that replacing taxes on housing with a broadening of the GST base could increase GDP by around 2% and increase residential construction by 14%, providing a much needed boost to housing supply.
The main obstacle to a reform of this type is the dependence of state and local governments on residential property taxes, accounting for around 40% of their total revenues. This points to the need for a federal-state compact on tax reform that finances the abolition of inefficient taxes on residential property through changes in the GST rate or base. State and federal governments unwilling to consider such a compact are not serious about addressing housing affordability.
The solution to Australia’s housing affordability problem is to build more and cheaper houses. This can only be achieved by easing the tax burden on housing and not through the abolition of existing tax concessions.
Dr Stephen Kirchener is a senior lecturer ineconomics at the University of Technology Sydney Business School and a Research Fellow at the Centre for Independent Studies. 
This article originally appeared on <a target="_blank" href="https://theconversation.edu.au/">The Conversation</a>.
 
 
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skirchener-WSVU77PjD8

How taxing housing diminishes affordability

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Following a raft of economic data that has come out recently I felt it was important to reflect on this data.  It is obvious that the Reserve Bank  is currently in a very tough predicament. While much of the data is proving to be quite negative and providing a clear case for interest rate cuts, every now and then other pieces of data highlight that perhaps things aren’t so bad.  Most notable of these data releases was the labour force data. Despite most economists expecting an increase to the unemployment rate, it remained at 5.2% and the participation rate actually increased.
As most people will know, official interest rates are currently sitting at 4.25%.  Now over the past 20 years, the cash rate has sat at an average of 5.15%, much higher than its current setting.  Although the cash rate is at above-average levels, standard variable mortgage rates are sitting at 7.4%, which is fairly close to the 20-year average level (7.35%).  In recent years the major banks have sought to de-couple mortgage rates from official interest rates.  As a result, we now have a situation where the official cash rate is almost 100 basis points below the long-term average however; mortgage rates are sitting at average levels.  As a result, the amount by which the RBA is able to influence repayments on our largest asset class (housing) has been lessened over recent years.
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Looking at the RBA website, its official role is detailed at this <a href="https://www.rba.gov.au/about-rba/our-role">link</a>.  A lot of the data suggests that we are pretty close to full employment and that we still enjoy economic prosperity and welfare.  However, many would argue that the current high currency is providing instability. In its agreement with federal government the RBA is also charged with keeping inflation between 2% and 3% over the economic cycle.
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So looking at inflation and keeping in mind new data will be out later this month, headline inflation is currently recorded at an annual rate of 3%.  The RBA’s preferred measures of ‘underlying inflation’, the trimmed mean and weighted median are both well within the target range, recorded at 2.6%.  The most recent data available shows that headline inflation is at the top end of the target range (but it is falling) and underlying inflation is right around the middle of the band. 
Obviously the RBA is concerned about inflation and with good reason.  Glenn Stevens was made governor of the RBA in September 2006 and since December 2006, headline inflation has been recorded at an average of 3%, right at the top of the target band.  More concerning is the fact that the RBA’s preferred measures have been recorded at an average of 3.2% (trimmed mean) and 3.5% (weighted median).  Given this, it is no real wonder that the RBA decided not to cut interest rates this month. The RBA’s track record of hitting their inflation target has not been strong, and it wants to be as sure as possible before making any decision.
As I see it, it is fairly clear cut that another interest rate cut is required to help the economy, particularly if you take just a quick look at some of the recent negative economic data releases:
<ol>
<li>GDP – Australia’s economy continues to grow however, it is growing below the long-term trend</li>
<li>Property values – despite a stabilization over the first quarter of 2012, they are down -4.4% over the year</li>
<li>Consumer sentiment – the index continues to fall with pessimism outweighing optimism and the index is -10.2% lower than at the same time last year.</li>
<li>Business conditions – improving but still not particularly strong</li>
<li>Building approvals – continue to weaken and are -15.2% lower than they were at the same time last year</li>
<li>Housing finance data:<ol>
<li>When refinances are removed the value of finance commitments has risen by just 1.7% over the past year</li>
<li>The number of non-refinance commitments remains at low levels and has increased by just 3.6% over the year</li>
<li>Retail trade – remains quite sluggish having increased by just 2.0% over the past year</li>
<li>Growth in demand for credit by the private sector remains benign:<ol>
<li>Total credit has risen by just 3.5% over the past year</li>
<li>Housing credit has risen at an historic low rate of 5.3% over the year</li>
</ol>
</li>
</ol>
</li>
</ol>
Of course, times have changed in the Australian economy; consumers are saving again and credit isn’t as freely available as it used to be.  Although the Australian economy hasn’t entered into a recession it certainly seems that our mind set has changed and we are at least trying to be less reliant on borrowed money.  What that is likely to mean is that property values, building approvals, housing finance, retail trade and credit demand will grow at levels lower than those we have become accustomed to.  In saying this, just because the consumer mindset has changed it doesn’t mean we have to have a recession.
In my mind, we will see an interest rate cut next month as long as inflation is within the target range.  However, I don’t envy the RBA’s position, although a lot of the economic data looks bad they have been caught out before.  The significant growth in the mining sector is boosting the overall economy, the unfortunate thing being that most of us aren’t reaping these benefits.  Factors such as falling property values and lower levels of construction feed back in to consumers showing less inclination to spend which in-turn feeds back in to lower levels of consumer and business sentiment.  If we aren’t careful it could also lead to higher levels of unemployment and lower levels of economic growth or even a recession.
Let me know what you think. Was the RBA right to leave interest rates on hold and do you think it will do so again next month?
Cameron Kusher is senior research analyst at<a target="_blank" href="https://www.rpdata.com.au/"> RP Data</a>.
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ckusher-ujnxiKuFQs

The RBA is in a real bind on interest rate movements: RP Data's Cameron Kusher

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John Symond of Aussie Home Loans has given tentative support to the proposed scheme that would allow first-home buyers to pay off their stamp duty over three years rather than in one upfront lump sum.
The Real Estate Institute of NSW (REINSW) <a href="https://www.propertyobserver.com.au/tax/pay-as-you-go-stamp-duty-scheme-needed-for-first-home-buyers-reinsw/2012041654290" target="_blank">is urging the state government to allow first-home buyers to gradually pay off their stamp duty</a>.
But Symond says while the proposed scheme looked good on paper that young first-home buyers needed to vigilantly do their sums.
"I think you've got to be careful. Young, inexperienced buyers can easily get over their heads," he told News Limited.
"Australians have traditionally been better borrowers than savers. If first-home buyers have the possibility to repay it in time then great, but I wouldn't like to see it impede young people ... by just deferring the inevitable."
Australian Mortgage Options founder Robert Projeski<a href="https://www.propertyobserver.com.au/tax/stamp-duty-lay-by-scheme-could-help-first-time-buyers-get-into-the-market-robert-projeski/2012041754322" target="_blank"> has also backed the proposal</a>.
 
 
 
 
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jchancellor-FAypfDUnLy

John Symond tentatively backs REINSW stamp duty deferral proposal for first-home buyers

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Victorian borrowers feel more comfortable about their level of long-term debt than borrowers in the other states and territories, according the ING Household Financial Wellbeing Index.
Victorian borrowers scored 5.8 out of seven in this category, up from 5.5 a year ago.
A score of one indicates “very uncomfortable” and a seven indicates “very comfortable”.
Victoria scored above the national average of 5.5 and higher than NSW/ACT (5.6 up from 5.4 a year ago), Queensland (5.6 up from 5.4) and WA (5.6 up from 5.4).
South Australians feel least comfortable about their level of mortgage debt, with a comfort rating of 5.4. It is the only state to record a decline in mortgage comfort, down from 5.5 a year ago.
Victoria has the lowest percentage of borrowers (34%) paying extra on their mortgages, with the highest proportion found in WA and Queensland (46% paying extra on their mortgages).
Overall borrowers are more comfortable with their level of mortgage debt than they were a year ago, with the national index rising from 5.4 to 5.6.
The survey, which is based on the responses of 1,015 households between March 27 and April 2, 2012, found that the vast majority (93%) of households are comfortable with their home loan, with 63% “very comfortable” – the highest level recorded since the third quarter of 2010.
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Four out of 10 (40%) mortgage holders are paying off their loan ahead of schedule, according to the survey.
The survey found that nearly a third (31%) of households have share market investments (up from 24% in the fourth quarter), while more than half (51%) of households have no assets or investments outside of the family home.
The median value of total assets in each household (including equity in the family home) is $306,993.
One in five (21%) households say that they don’t have any investments or assets at all.
Long-term assets remains a weak spot of financial wellbeing, with 28% of households saying they are “very uncomfortable” with their level of investments and long-term assets, down from 31% in the fourth quarter of last year.
Nationally however there has been a slight increase in the numbers of households owning long-term investments – 17% own a rental property, up from 15% three months ago, and 31% hold sharemarket investments, up from 24%.
The overall Household Financial Wellbeing Index reached 106.9 in the first quarter of 2012 up from 105.6 in the fourth quarter of 2011.
Although this is below the reading of 107.5 achieved on inception of the index in the first quarter of 2010, it confirms an ongoing uptrend in financial wellbeing since the index plunged in the first quarter of 2011.
 
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lschlesinger-FZcF9M3vE6

Victorian borrowers most comfortable with level of mortgage debt: ING Household Financial Wellbeing Index

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The Real Estate Institute of NSW has proposed several options to the state government in order to encourage first-home buyers into the market. One such scheme would allow first time buyers to pay off their stamp duty over a three-year period, making it less costly for them at the time of purchase, if adopted.

Since the laps of the stamp-duty waver for first-home buyers at the end of last year, many would-be first timers have been stalled in order to save up to meet their stamp duty obligation, resulting in a drop in first home buyer activity since.

Marketing consultant Michael Willcocks, 28, who missed out on the stamp duty relief late last year could envision getting into a property much sooner, should a stamp-duty ‘lay-by’ scheme be put in place. 

“It would cut out several months of saving up the stamp duty and get me into a property sooner,” he says. 

With housing affordability a pressing issue for first-time buyers, such a scheme would reduce the initial cost of getting into a property by spreading this out over 36 months. The adoption of a stamp-duty ‘lay-by’ scheme would surely encourage more first-time buyers to get into the market. 

Currently, there is only the original $7,000 federally-supplied first-home owners’ grant on offer, which applies only to pre-existing properties and therefore does not push for the construction of new dwellings. 

We already have a housing shortage in Australia, which is expected to fall short by over 150,000 dwellings by the year 2020, going by figures released by the Housing Industry Association last year. 

Setting out schemes that drive construction of new homes and encourages new buyers into the market would benefit both the construction and real estate industry.

Other schemes presented to the state government by the REINSW look at concessions for buyers over 65 in an aim to make it easier for them to down-size their homes.

Introducing new legislation that works toward the reduction of our housing shortage, increases affordability and hence home ownership, combined with further interest rate cuts would create an up-swing that would strengthen the property market and our economy.



Robert Projeski is a leading property finance expert and the founder and managing director of <a target="_blank" href="https://%20www.amo.com.au">Australian Mortgage Options</a>. He has appeared on radio and TV and written extensively on property and finance matters.


 
 

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rprojeski-4QFJisNwt8

Stamp duty ‘lay-by’ scheme could help first-time buyers get into the market

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Aussie Home Loans executive chairman John Symond has warned a standard 0.25 percentage point easing by the RBA at its May meeting would not be enough, given the banks have lifted home loan rates since the last cash rate cut in December.
“We have a situation where since Christmas we have had two increases by the banks out of cycle. So, 25 basis points is just playing catch-up for the punter,” Symond suggests.
“If the Reserve Bank wants to make a difference and instil confidence, they now have to go more than 25 basis points and go 50 basis points,” Fairfax Media reported Symond as saying today.
Last month the Aussie Home Loans founder said the RBA was “a bit out of touch by not accepting that parts of the economy, especially small businesses, is doing it really tough at the moment”.
“As well as the Australian economy has performed relative to other economies, we could easily get into the situation where the economy could stall,” warned Symond.
“We need an injection of good news and an injection of confidence – the best way to do that is to start dropping interest rates.”
 
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John Symond says only 50-basis-point RBA interest rate reduction will cut it for borrowers

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The minutes of the April RBA board meeting have strengthened the case for a rate cut at the May 1 meeting, according to Westpac.
“We are confident that the RBA will deliver a 0.25% rate cut on May 1," Westpac chief economist Bill Evans suggests, based on his expectations that the underlying first quarter 2012 inflation data, due for release April 24, will be 0.6% for the quarter and 2.3% for the year, down from 2.5% in quarter four in 2011.
Westpac suggests the data could provide the RBA with ample scope to cut rates again in June or July given the sentiment of the minutes particularly in recognising the sharp regional and sectoral differences in the economy and the likely impact of a significant fiscal tightening.
The minutes gave a number of additions to the bank's insights around the current economic environment, the Westpac chief economist notes.
“Firstly, stronger emphasis is given to the divergences between sectors and regions in the economy.
“Whereas the governor referred to ‘differences’ these minutes refer to ‘sharp differences’,” Evans notes.
The analysis of the minutes by Westpac also noted there was recognition that "the level of non-mining investment had been flat over 2011, and recent surveys of business intentions suggested that non-mining investment was likely to remain sluggish for some time".
Noting the RBA members spent some time exploring reasons for the weakness in many of the indicators for housing turnover and building activity, Westpac concluded the minutes did not go so far as to question why there appears to have been only muted response to the recent rate cuts.
“But one can sense some degree of frustration in the likely discussion,” Evans says.
Westpac also suggests the RBA attitude towards the labour market appears to have become more realistic.
“In previous discussions the emphasis has been around the unemployment rate alone whereas the board now points out that "an easing in average hours worked and a decline in the participation rate were indicative of a softer labour market than that implied by the unemployment rate".
Evans was also encouraged to see that the board had made special note of the Westpac-Melbourne Institute index of unemployment expectations by noting that "household concerns regarding future unemployment (were) at their highest level since mid-2009".
“Probably the most surprising aspect of these minutes was the direct comment on fiscal policy,” Evans says.
“The bank specifically points out that economic conditions will be impacted by ‘significant fiscal tightening in the next few years’.
“Despite the government indicating the intention to return the budget to surplus from a deficit of around $40 billion we cannot recall the bank specifically referring to fiscal tightening in previous statements.”
“The message from the governor's statement on April 3 was that there was scope to cut rates as long as the inflation report indicated that inflation pressures remained benign.
“This message has been repeated with the additional dimension of indicating that slower growth could be expected to result in a more moderate inflation outcome.”
Finally, Bill Evans notes there was an extensive discussion at the April RBA board meeting on the funding costs of banks.
“The importance of term deposits to the banks' overall funding profile has been emphasised.
“Recall that the bank has noted that ‘since the middle of 2011 there has been a further increase in banks' funding costs relative to the cash rate of the order of 20-25bps’.”
Westpac notes that the mismatch was explained in terms of the general principle that the RBA cash rate had become a less important influence on the banks' funding costs due to competition for deposits and the increased costs of term funding.
 
 
 
 
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