A luxury beachfront apartment at Rainbow Bay has more than doubled in value since it sold off the plan six years ago, setting a new local apartment record in the process.

The three-bedroom apartment in the Flow development on Petrie Street, the first of four new projects locally by Paul Gedoun's S&amp;S Projects, has sold for $7.4 million, after originally selling for $3.27 million when the project launched in 2020.

The seventh-floor apartment, comprising 187 sqm of internal living space and a 54 sqm balcony overlooking Froggies Beach and Snapper Rocks, was purchased by a local family.

The transaction was negotiated by Pezet Matheson director Kerry Pezet and equates to more than $30,000 per sqm.

Pezet said the sale reflected the limited opportunities to buy into the boutique beachfront development.

"The sale highlights the rarity of opportunities within the boutique beachfront development, where residences seldom become available," Pezet said.

"Flow is one of the Gold Coast's most tightly held buildings. Buyers from our database move quickly when residences become available, and achieving an off-market sale at $7.4 million demonstrates the depth of demand for property of this calibre."

<img alt="Flow" data-entity-type="file" data-entity-uuid="c585b206-2130-4eee-a50c-3f27c51a7c70" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-07-06%20at%208.33.25%E2%80%AFPM.png?VersionId=m3pHRDV62Y3fvN.XQuQHq.52ilTWpRLf" />

Flow was the first of four luxury apartment developments delivered by Paul Gedoun's S&amp;S Projects at Rainbow Bay and was completed in 2023.

Positioned on the beachfront overlooking Snapper Rocks, the residence includes three bedrooms, three bathrooms, a powder room and views stretching north along the coastline towards Surfers Paradise.

Pezet Matheson Residential principal Mitchell Lambert said buyers continued to prioritise quality beachfront apartments in tightly held locations.

"Flow Residences offers a rare combination of elevated beachfront positioning, architectural excellence, comprehensive resident amenity and premium finishes, which is exactly what discerning purchasers are seeking," Lambert said.

"The transaction further reinforces Rainbow Bay's reputation as one of Australia's premier coastal lifestyle destinations, where limited supply and growing demand continue to support strong market performance."

Pezet Matheson originally marketed and sold out Flow off the plan, making the latest transaction a return to one of the project's original buyers.

Paul Gedoun is selling his third project, <a href="https://www.apartments.com.au/new-apartments/radia-rainbow-bay-271-boundary-street-coolangatta-qld-4225">Radia Rainbow Bay</a>, after recently completing, and selling out, <a href="https://www.apartments.com.au/buildings/esprit-217-227-boundary-street-coolangatta-qld-4225">Esprit</a>. He has plans for a <a href="https://www.apartments.com.au/news/qld/first-look-s-s-projects-proposes-88-apartment-wellness-tower-at-coolangattas-boundary-street">fourth building</a>, 88 apartments on <a href="https://www.apartments.com.au/new-apartments/209-213-boundary-street-coolangatta-qld-4225">Boundary Street</a>.

Joel Robinson

Rainbow Bay apartment doubles in price since off the plan sale during pandemic

The long-planned transformation of Brisbane's historic Shafston Estate has taken another major step, with Capella Hotel Group announced as the luxury hospitality partner behind what will become Brisbane's first branded residences.

The project, to be known as Capella Residences Brisbane, is being delivered by Verso Projects at the landmark Kangaroo Point riverfront estate, with completion targeted for 2029.

The announcement follows a series of planning changes to the project over recent years. The site was originally approved in 2023 for a 15-level, 37-apartment development designed by Rothelowman for Burgundy Group before Verso Projects took over the 10,070 sqm riverfront holding and lodged revised plans with Kerry Hill Architects to increase the development to a 25-level tower with 51 apartments.

The latest announcement confirms Capella Hotel Group will bring its branded residential offering to the project, marking just the second Capella Residences development globally after Seoul, and the group's first branded residential project in Australia.

The <a href="https://www.apartments.com.au/new-apartments/23-castlebar-street-kangaroo-point-qld-4169">Castlebar Street development</a> will centre around the restoration of the heritage-listed Shafston House, one of Brisbane's oldest residences, originally constructed in 1851 by Reverend Robert Creyke as a single-storey cottage known as Ravenscott.

<img alt="Capella" data-entity-type="file" data-entity-uuid="2b9f4ce5-638f-4d6b-8082-3ca7e4b75fca" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-07-09%20at%207.20.41%E2%80%AFAM.png?VersionId=f7aeqsW_DzOJI4FymWb3lD8NptSfsP7q" />

Capella said the project aligns with its focus on heritage-led developments, with the Brisbane estate combining the restored historic residence with a new luxury apartment tower and hospitality-inspired resident amenities.

Residents will have access to the Capella Living Room, a concierge-led communal space inspired by the group's luxury hotels, alongside landscaped gardens, six swimming pools, wellness and recreation facilities.

The broader estate will also include two riverfront homes, a six-berth private marina, porte cochère arrival experience, secure basement parking and a new section of public riverwalk along the Brisbane River frontage.

The heritage Postal Depot Building will also be retained and repurposed as a guest house, in line with the revised development plans.

The project represents another evolution for the site, which Kerry Hill Architects previously described as a rare opportunity to restore one of Brisbane's most significant heritage estates while creating a new benchmark for apartment living.

"The Shafston Estate provides a once-in-a-generation opportunity to restore one of Brisbane's finest heritage precincts and to reinstate residential use as a unique site perched on the edge of Kangaroo Point," Kerry Hill Architects said in its Urban Context Report accompanying the planning submission.

"The project will celebrate excellence in sub-tropical residential design, setting a new benchmark for vertical living in Brisbane."

Verso Projects, which now has an $8.5 billion development pipeline spanning more than 6,000 dwellings across apartments, townhouses, retail and commercial projects, said the partnership with Capella would elevate the development beyond a traditional residential project.

"We feel honoured to be restoring Shafston Estate to its former glory, elevating it to new heights of luxury and excellence underpinned by Capella's distinctive service ethos and design philosophy, and making it a standout landmark in Brisbane," Verso Projects CEO Steve Laffey said.

"By partnering with Capella, globally recognised for its refined approach to luxury hospitality and deep respect for cultural and historical context, we will elevate this project beyond a residential offering into a world-class destination."

Capella Hotel Group President Roland Fasel said Brisbane's emergence as a global city made it the right location for the company's Australian residential debut.

"Brisbane is a city on the cusp of something remarkable, and Capella Residences is our commitment to being part of that story," Fasel said.

"The Capella residential experience is more than luxury. It is about a sense of belonging to a place with deep meaning."

Private appointments have now opened for the project, with a display suite expected to open in late 2026 ahead of the planned 2029 completion.

Capella to launch Brisbane's first branded residences at Shafston House, Kangaroo Point

Lewis Land's latest apartment release within its <a href="https://www.apartments.com.au/new-apartments/harbour-shores-biggera-waters-564-oxley-drive-biggera-waters-qld-4216">Harbour Shores</a> masterplan is targeting one of the Gold Coast's fastest-growing buyer groups, with almost a third of apartments at Solis priced below $1 million.

The seven-storey building at Biggera Waters will comprise 91 apartments, including 24 one-bedroom residences starting from $778,000, a price point Lewis Land says is aimed squarely at first home buyers struggling to enter the Gold Coast market.

<img alt="Harbour Shires" data-entity-type="file" data-entity-uuid="e7486e37-22f6-4c92-b212-9b0622070b8f" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-07-08%20at%209.09.34%E2%80%AFAM.png?VersionId=W8MJwJUCf6HkIyl_EVSksnd.QI6MZryY" />

<a href="https://www.apartments.com.au/developers/lewis-land-group">Lewis Land</a> Head of Development Michael Long said the developer deliberately allocated a significant proportion of the project to more affordable apartment types.

"First home buyers have been priced out of many parts of the Gold Coast, and we saw a clear opportunity to address this and play our part in a longer-term housing solution," Long said.

"That's why 24 of the 91 apartments being delivered at Solis have been designed and priced for the city's next generation of homeowners, quality one-bedroom apartments, half of which include an additional multipurpose room to maximise space and flexibility.

"This approach places 30 per cent of apartments in Solis under $1 million, and with close proximity to Harbour Town's future light rail extension connecting residents to the city's major employment and knowledge hubs, it's a win for buyers looking to secure their first property."

<img alt="Sores" data-entity-type="file" data-entity-uuid="550526d3-73ba-4710-9739-c5f4294a30ef" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-07-08%20at%209.09.29%E2%80%AFAM.png?VersionId=cQQdXHt9wS0UXwZEm5Py5bH_3kAmzyhu" />

Designed by BDA Architecture, Solis will deliver a mix of one, two and three-bedroom apartments, with residences ranging up to 232 sqm. Apartments feature generous balconies and contemporary finishes, while residents will have access to Harbour Shores' lagoon pool, clubhouse, tennis court, gym, yoga studio and sauna.

The focus on first home buyers resonated with purchaser Holly Humphreys, who said she and her boyfriend spent more than a year searching for their first property before shifting their attention from houses to apartments.

"We fell in love with the first house we bid on and got our hopes up, but after repeated knockbacks we learned not to get too attached," Humphreys said.

"We offered at the high end of price guides, but sales kept going even higher. That's where we really struggled and we needed to re-evaluate our budget and our expectations. Standalone houses were off the table, and we pivoted to apartments and townhouses."

Humphreys said it was encouraging to see developers recognising the growing demand from first home buyers.

"There's a growing number of young buyers looking to enter the market earlier because they understand that getting in now can make a real difference as prices continue to rise," she said.

"It's fantastic to see a developer recognise this and then actively take measures to deliver an apartment with us in mind."

Solis is the first development planned within the second stage of the Harbour Shores masterplan, with early works expected to commence in September 2026.

[smartcode_project_cta:default project_id=113271]

Lewis Land targets first home buyers at latest Harbour Shores release, Solis

Luxury apartment developer Abadeen has recorded $19.25 million in apartment sales across two of its Lower North Shore developments in the lead-up to the end of the financial year, headlined by the sale of a $6.75 million penthouse at <a href="https://www.apartments.com.au/buildings/koyo-crows-nest-5-rodborough-avenue-crows-nest-nsw-2065">KOYO in Crows Nest.</a>

The transactions also included the sale of a newly completed three-bedroom apartment at <a href="https://www.apartments.com.au/buildings/park-residences-cremorne-2-sutherland-street-cremorne-nsw-2090">Park Residences in Cremorne</a> for $6.35 million, with the residence selling shortly after the project's first public inspections following completion.

The sales come as completed, owner-occupier-focused apartments continue to attract strong demand across Sydney's Lower North Shore, particularly from buyers looking for certainty and immediate occupancy.

The penthouse at KOYO spans 491 sqm across a single level and was designed by architect Koichi Takada. The development is one of Abadeen's flagship boutique projects in Crows Nest.

[smartcode_project:default project_id=108800 project_image_fid=370093]

Abadeen Executive Chairman and Founder Justin Brown said buyer activity lifted noticeably in the lead-up to the end of the financial year.

"We saw a clear increase in enquiry levels, inspection numbers and buyer engagement across our completed projects leading into the end of the financial year," Brown said.

"Buyers have become far more decisive over the past six months. The combination of improving confidence, limited supply and the ability to physically inspect completed residences is creating strong competition for premium apartments in the best locations."

Brown says the&nbsp;response to Park Residences following completion has been particularly strong.

"Buyers want certainty and are responding positively to the opportunity to walk through a finished product, inspect the quality firsthand and move in immediately," Brown suggested.

"Projects such as Park Residences and KOYO demonstrate that when the product is exceptional and the location is irreplaceable, buyers are prepared to act quickly."

[smartcode_project:default project_id=114246 project_image_fid=370116]

Abadeen CEO Joe Tack said quality continued to differentiate projects in the current market.

"Today's buyers are incredibly discerning," Tack said.

"They are seeking larger floorplans, premium finishes, walkability, lifestyle amenity and confidence in the developer delivering the project. Well-designed boutique developments continue to outperform because they offer something genuinely difficult to replace.

"The enquiry we are seeing across our completed and recently completed Lower North Shore portfolio is very encouraging, and we expect this momentum to continue into spring."

The sales follow increased enquiry across Abadeen's Lower North Shore portfolio which also includes <a href="https://www.apartments.com.au/buildings/northcote-collective-naremburn-2-northcote-street-naremburn-nsw-2065">Northcote Collective in Naremburn</a> which also completed recently.

KOYO penthouse headlines Abadeen's $19.25 million EOFY sales flurry

The City of Sydney has approved plans for <a href="https://www.apartments.com.au/developers/billbergia">Billbergia Group</a> and Metrics Credit Partners’ $3.5 billion Castlereagh Place project in the heart of the Sydney CBD

The towers will be among the tallest in <a href="https://www.apartments.com.au/developments/sydney-nsw-2000">Sydney</a>'s CBD, with more floors than any other residential tower in the city.&nbsp;

The 6,000 sqm site was acquired by the joint venture partners in 2024. It is the largest amalgamated land parcel in the Sydney CBD and comprises eight individual sites fronting Castlereagh, Pitt and Liverpool Streets.&nbsp;

<a href="https://www.apartments.com.au/new-apartments/castlereagh-place-sydney-324-348-pitt-street-sydney-nsw-2000">Castlereagh Place</a> will transform an underutilised city block into a landmark mixed-use destination, anchored by two 82-storey towers comprising 607 luxury residences above an 8-level podium housing a 209-room luxury hotel. A 1,000 square metre civic park on ground level features a curated mix of food, beverage and retail.

The plans have been refined over the past year to rebalance the residential and hotel offering, and reconfigure the retail footprint to create a stronger, more dynamic dining experience.

A three-level flagship building on the prominent corner of Pitt and Liverpool Streets will be the gateway to the Castlereagh Place lifestyle precinct. Set to become a Sydney icon, the building is capable of housing multiple hospitality venues.

“Castlereagh Place is designed to be the City's next great urban oasis - an energetic mixed-use precinct that pulses with life, day and night,"&nbsp;said Joseph Kinsella, Group Director of Billbergia.

"It will bring the vibrancy of places like Barangaroo and Darling Quarter into a more accessible, central destination at the very heart of Sydney."

Kinsella said the project will build on&nbsp;Sydney’s growing laneway culture with the City’s largest network of new activated lanes - an expanded, next-generation take on precincts like Angel Place, Palings Lane and Ash Street in Wynyard.

[smartcode_project:default project_id=134477 project_image_fid=374401]

Castlereagh Place has been designed by architects <a href="https://www.apartments.com.au/architects/fjc-studio">fjcstudio</a> in collaboration with Trias Studio, Aileen Sage and Polly Harbison Design, joint winners of an international design competition in 2018.&nbsp;

Signature design elements from the original scheme remain unchanged, while the public domain has been significantly enhanced, delivering 60 per cent more open-to-sky space.

Pedestrian access will also be enhanced through new laneways linking Pitt, Liverpool and Castlereagh Streets, drawing people into a new civic park with outdoor seating, landscaping and integrated public art.

With activated laneways supported by strong hospitality offerings, Castlereagh Place is tipped to become a vibrant new dining destination in the heart of Sydney’s CBD.

It marks the largest undertaking to date for the Billbergia and Metrics Credit Partners partnership. Together they are developing other underutilised Sydney sites into mixed-use precincts, including the $2.2 billion Concord Central and the $1.3 billion Chatswood Grand Residences.

Metrics Managing Partner and Group CEO Andrew Lockhart said Castlereagh Place is a landmark project that will redefine Sydney’s skyline.

"As the tallest residential high-rise development, the revitalised site will offer panoramic views across the CBD and surrounds. We are excited to partner with Billbergia to reinvigorate an underutilised site and create a sophisticated and contemporary mixed-use offering situated in the heart of Sydney.”

Total apartments within the towers have increased to 607 dwellings, with a focus on larger floorplans. Aligned to growing market demand, Castlereagh Place now comprises 299 three-plus-bedroom apartments, 198 two-bedroom units and 110 one-bedroom configurations.

[smartcode_project:default project_id=134477 project_image_fid=374402]

Resident amenities will include an exclusive residents club containing a gym, rooftop pool, dining rooms, co-working spaces, library, golf simulator, games room, cinema room, and access to an exclusive concierge service. There will be around 500 basement car spaces below the towers.

The development will also include a state-of-the-art wellness centre, set to feature a bathhouse with magnesium pools, hot/cold plunge pools and premium amenities.

&nbsp;

According to fjcstudio, the towers will feature distinctive yet elegant architectural design reflecting Sydney’s geometry and urban character, with a network of through-site links and intimate public spaces activating the streetscape.

"Castlereagh Place is a city-making project of significant scale and ambition," said Richard Francis-Jones, Design Director at fjcstudio.

"It will create a rich urban complex of public open spaces, landscaped gardens, and vibrant laneways. Defining these new public spaces and the important streetscape of Castlereagh Street is a sequence of fine-grained, diverse retail and hotel architecture designed in collaboration with Aileen Sage, Polly Harbison Design and Trias.

“Rising above the tree-lined, human-scale streetscape are two slender residential towers that will transform the city skyline and look towards the Harbour, Hyde Park, and the Royal Botanic Garden.”

Demolition and early construction works have commenced onsite at Castlereagh Place.

[smartcode_project_cta:default project_id=134477]

Billbergia, Metrics, approved for $3.5 billion Sydney skyscrapers

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>
In contrast to the sometimes hysterical media coverage yesterday of a minor Fitch report claiming that Australian home loan delinquencies had risen over the second half of 2011, the RBA’s Financial Stability Review released today corrects this error and finds quite the opposite. 
The difference between the two reports is explained by what they cover. The RBA’s analysis includes all home loans on bank balance-sheets plus “securitised” loans: more than $1.2 trillion worth in total. In contrast, Fitch’s research only covers securitised loans, which amount to less than $100 billion. To be clear, these loans are included in the RBA’s sample, but represent less than 10% of the total. 
The RBA concludes that total home loan arrears in Australia declined – not increased (as Fitch argued) – in the second-half of 2011. Specifically, the RBA comments: 
“The arrears rate for housing loans (on banks’ domestic books plus securitised housing loans) declined to 0.6% in December, from 0.7% in mid-2011. The non-performing rate for credit cards has also improved, falling from 1.4% in June 2011 to 1.2% in December, while the rate for other personal loans has been broadly unchanged since mid-2011 at around 2%.”
 
The RBA’s chart below shows that while home loan arrears have risen steadily since their nadir in 2003, they remain no higher than they were in the mid-1990s. The drop-off in delinquencies in the latter half of 2011 is clearly visible at the end of the time-series.
<img src="/images/stories/rbamarch281.gif">
The improved debt-servicing performance of Australian borrowers was also reflected in a trend decline in applications for repossessions of homes across most Australian states. The RBA has been building up its analysis of foreclosures, and the latest Financial Stability Review presents the best parsing yet. The second chart below illustrates trend changes in foreclosures for New South Wales, Victoria, Western Australia, and south-east Queensland through to early 2012. In this context, the RBA observes: 
“Possession rates have generally either stabilised or improved in most other states. Bankruptcy rates have [also] broadly fallen across states since 2009, although less so in Queensland and Western Australia. Overall, though, the number of households whose financial difficulties have deteriorated to the extremes of bankruptcy or lender property possession is very low in absolute terms.”
<img src="/images/stories/rbamarch282.gif">
Another unique RBA data-set released today is the share Australian borrowers who are repaying their home loans more quickly than what is actually required by their lenders (under their “amortisation schedules”). The RBA’s research reveals that these so-called “excess repayments” increased significantly over the course of 2011, which in turn implies that household stress was on the decline (refer to the third chart below): 
“Many borrowers are repaying substantially more than required: data from lenders suggest that the rate at which borrowers were making excess repayments on their mortgages increased over 2011. Total excess repayments were roughly the same as required repayments in the December quarter 2011, up from about 80%in the March quarter.”
<img src="/images/stories/rbamarch283.gif">
Finally, the RBA confirms my recent arguments about advances in home owner affordability, noting, “At the national level, the ratio of dwelling prices to income has fallen over the past year, and is below the average of the past decade, while rental yields have begun to pick up, assisted by stronger rental growth as well as lower prices.” 
It will be fascinating to see how much media prominence is given to the RBA’s findings vis-à-vis the coverage yesterday of Fitch’s report.
Christopher Joye is a leading financial economist and a director of Rismark International and Yellow Brick Road Funds Management. The above article is not investment advice.
 
 
 
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chrisjoye-JYhJsTrNRC

Australian home loan arrears are falling (not increasing): Christopher Joye

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The RBA has released a chart showing the 15 regions with the highest rates of mortgage arrears. Of the 15, six are in Queensland, and six in New South Wales.
Click to enlarge
<a title="Click to enlarge" rel="shadowbox" href="/images/stories/absmarch283.gif"><img src="/images/stories/absmarch283thumb.gif"></a>
The RBA report also shows that <a href="https://www.propertyobserver.com.au/residential/households-continuing-to-deleverage-as-house-prices-fall-rba/2012032854046" target="_blank">households are deleveraging as housing prices fall</a>.
 
 
 
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cknowlton-QnEa6ntUYP

Ipswich City, SW Sydney and Gold Coast lead list of 15 regions with highest mortgage arrears rates: RBA

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Declining house prices are the major threat to Australian mortgage performance, according to Fitch Ratings.
The forecast comes as delinquencies in the Australian prime mortgage sector unexpectedly increased partly as new borrowers faced affordability constraints.
"It is too early to judge which factors contributed to the increase in arrears during the December quarter, but to a measurable extent, declining house prices were the only key driver of mortgage performance to show a negative trend," says James Zanesi, director in Fitch's structured finance team.
Fitch notes house price stagnation tends to keep 90-plus-day arrears high, as it can lead to longer periods between the initiation of the legal enforcement and the final sale of properties.
Any prolonged period of house price decline might also indirectly lead to an increase in 30- to 59-day arrears with additional financing scarce, leaving the borrower more vulnerable to external events such as unemployment.
The deterioration was forecast to temporarily deteriorate in the March quarter given seasonal Christmas spending, in combination with minor increases in bank standard variable rates.
Click to enlarge
<a title="Click to enlarge" rel="shadowbox" href="/images/stories/fitchmarch27.gif"><img src="/images/stories/fitchmarch27thumb.gif"></a>
The Fitch report noted that the housing market deterioration during 2011 – when median house prices fell nationally by 4.8% – had limited the refinance and sale options for borrowers in financial distress.
“When the borrower exhausts the available funds the arrears will materialise, as the loan that might otherwise have been refinanced or repaid will fall into delinquency,” report co-author Natasha Vojvodic notes.
Fitch notes the change comes despite the macro-economic environment including interest rates, consumer spending and unemployment either remaining unchanged or improving during the quarter.
Fitch notes although delinquency rates are increasing and are above the historical Australian average, they remain low relative to other countries and well within the expectations used to derive Fitch's ratings for Australian RMBS transactions.
Delinquencies in the Australian prime residential mortgage sector increased to 1.57% in the final quarter of 2011, up from 1.52% as new borrowers faced affordability constraints.
Click to enlarge
<a title="Click to enlarge" rel="shadowbox" href="/images/stories/fitchmarch273.gif"><img src="/images/stories/fitchmarch273thumb.gif"></a>
The increase in 30-plus-day arrears was mainly driven by a rise in the 30- to 59-day arrears, which is usually associated with a temporary shock in affordability.
Fitch expects 30- to 59-day delinquencies to remain stable in the absence of temporary adverse events such as interest rate rises, excessive spending, significant changes in employment markets or catastrophic events.
But the more susceptible borrowers such as self-employed households still face challenges in meeting their mortgage obligations, which recorded an increase in 30-plus-day arrears to 6.62% in the December quarter up from the 6.26% rate in the September quarter.
“Low-doc loans are experiencing considerable deterioration, as Fitch expected,” Zanesi says.
“The agency continues to believe that low-doc borrowers are likely to take longer than historically to cure their delinquency status.”
 
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Falling housing prices could lead to even higher mortgage delinquency rates: Fitch Ratings

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More New South Wales borrowers (14.6%) owe more than $300,000 on their mortgages than borrowers in any other state, ABS data has revealed.
Click to enlarge
<a href="/images/stories/mortgage1.gif" rel="shadowbox" title="Click to enlarge"><img src="/images/stories/mortgage1thumb.gif"></a>
Source: ABS
Tasmanian borrowers on average owe the least on their mortgages, with 12.9% of borrowers owing $100,000 or less.
Click to enlarge
<a href="/images/stories/mortgage2.gif" rel="shadowbox" title="Click to enlarge"><img src="/images/stories/mortgage2thumb.gif"></a>
Source: ABS
The state with the next-smallest average mortgage size is Victoria, with just 4.7% of borrowers owing more than $300,000.
The ABS data also reveals the <a target="_blank" href="/news">amount of equity home owners have in their properties</a>.
 
 
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Mortgage size: The official ABS state-by-state data

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The number of homes with mortgages worth more than the property's estimated value increased late last year as house prices fell.
Recent home buyers incurred the biggest jump in so-called negative equity.
RP Data says 6.4% of homes were valued at less than their purchase price in the December 2011 quarter, rising from 4.9% in the September quarter.
Since late 2010, capital city home values have fallen by 5.5%, RP Data suggests. The analysis does not look at debt levels by owners, only the price paid for properties and their estimated current value.
While the trend has potentially pushed more owners into negative equity, only 1% of owners who have held their properties for 10 years faced the prospect of negative equity on their homes.
Since late 2010, the Australian housing market has been quite weak, with home values falling by 5.5% across the combined capital cities since the market peaked, research analyst Cameron Kusher says.
"Buyers who purchased a home since this time have in many instances seen the value of their home move below their contract price," Kusher says.
RP Data notes prices tracked lower through 2011 as interest rate uncertainty, economic jitters and the unwillingness by many households to take on more debt sapped demand.
Far north Queensland had the highest proportion of mortgages in negative equity, at 22%, followed by the Gold Coast, with 19%.
The Sunshine Coast was in the third spot at 15%.
The area with the lowest amount of negative equity was Loddon, Victoria, with 1.9%, followed by Canberra with 2%.
Brisbane fared the worst among capital cities, with 9.2% of property deemed to be "underwater" in financial terms, followed by Perth at 7.4%
Sydney had 3.6% of properties in negative equity, pipping Melbourne with a 3.5% rate. In Hobart, 6.2% of properties were in negative equity, compared with 5.5% for Adelaide.
But 42% of Australian home owners find their properties are now worth more than twice the purchase price.
Kusher says it highlights the long-term nature of the housing market and investment.
"The first few years of owning a property are always the toughest because you don’t have much equity and aren’t paying off much of the principal,” he says.
Victoria had the highest incidence of homes worth double their purchase price, as half of all homes in the state are in this category.
 
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Number of homes in negative equity rising, particularly for recent buyers: RP Data

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Borrowers who bought their homes with small deposits may struggle to refinance their mortgages in 2012 due to falling property values, RateCity.com.au has warned.
The problem would apply to both variable-rate and fixed-rate mortgage holders looking to refinance into a new fixed or variable-rate loan but not to those that have signed a contract where a fixed-term loan automatically rolls over into a variable-rate mortgage from the same lender.
Mortgagees on high loan-to-value (LVR) ratios in Brisbane, Melbourne and Hobart will be most at risk of not being able to refinance, as their mortgage debt may now be greater than the value of their homes.
House prices fell by 6.8% in Brisbane in 2011, by 6.1% in Melbourne and by 5.9% in Hobart leading a 3.6% fall nationally, according to figures compiled by RP Data-Rismark.
A 3.6% decline in 2011 would translate into a $400,000 home falling to a value of $385,600 over the course of the year.
Changes in capital city property values year-on-year
<div align="center">
<table cellpadding="0" cellspacing="0" border="0" style="width: 470px;"><tbody>
<tr>
<td width="213">
City
</td>
<td width="213">
Median dwelling price
</td>
<td width="213">
Year-on-year change
</td>
</tr>
<tr>
<td width="213">
Sydney
</td>
<td width="213">
$485,000
</td>
<td width="213">
-0.3%
</td>
</tr>
<tr>
<td width="213">
Melbourne
</td>
<td width="213">
$462,500
</td>
<td width="213">
-6.1%
</td>
</tr>
<tr>
<td width="213">
Brisbane
</td>
<td width="213">
$420,000
</td>
<td width="213">
-6.8%
</td>
</tr>
<tr>
<td width="213">
Adelaide
</td>
<td width="213">
$370,000
</td>
<td width="213">
-4.4%
</td>
</tr>
<tr>
<td width="213">
Perth
</td>
<td width="213">
$450,000
</td>
<td width="213">
-4.3%
</td>
</tr>
<tr>
<td width="213">
Darwin
</td>
<td width="213">
$450,000
</td>
<td width="213">
-2.3%
</td>
</tr>
<tr>
<td width="213">
Canberra
</td>
<td width="213">
$488,000
</td>
<td width="213">
-2.2%
</td>
</tr>
<tr>
<td width="213">
Hobart
</td>
<td width="213">
$328,000
</td>
<td width="213">
-5.9%
</td>
</tr>
<tr>
<td width="213">
Capitals
</td>
<td width="213">
$450,000
</td>
<td width="213">
-3.6%
</td>
</tr>
</tbody></table>
</div>
Source: RP Data
“Imagine buying a $400,000 property with a 5% deposit,” says RateCity.com.au chief executive Damian Smith.
“On day one, you’d assume you had $20,000 of equity value in the property. But if the property’s value declines by 10%, then it’s worth just $360,000 – and you have no equity at all.
“If you try to refinance in those circumstances, you will find yourself owing more than the property is worth – a mortgage of $380,000 as against property value of just $360,000.”
Besides creating problems for buyers with high LVRs, Smith says a downturn in refinancing this year due to uncertain property values would be a serious blow to Australia’s lenders.
“The industry relies on refinancing of existing mortgages for a big proportion of their business. Refinancing was the main driver of home loan volume in 2011, as in fact it has been over the past decade.
“According to RateCity research, 51% of all home loans last year were from refinanced mortgages – this is the highest proportion of refinanced loans on record for at least the past 20 years,” Smith says.
“If property values drop further and it discourages borrowers from refinancing, the mortgage market could be in for a very slow year.
“But on the flip side, first home buyers and borrowers with more than 20% equity in their home are in the best position to find a great value home loan as lenders will be desperate to find new business.”
To make a more informed decision before you refinance, download Property Observer’s free eBook: <a href="http://propertyobserver.com.au/ebooks/free-ebook-12-tips-for-refinancing-your-mortgage" target="_blank">12 tips for refinancing your mortgage – how to find the best home loan in 2012</a>
 
 
 
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Refinancing trouble looms for borrowers with small deposits: RateCity

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 The REIV has released its state budget submission for 2012–13, highlighting a need to continue\ state-based tax reform, assist first home buyers and reduce taxes to promote investment in Victoria.
With stamp duty revenues reducing due to the slowing economy, it is timely to reform the structure and level of property taxes to improve equity, remove double taxation and promote investment.
The current structure of property taxes in Victoria is inefficient and discourages the necessary investment in housing and commercial property.
Residential home buyers are subject to bracket creep when prices rise, leading to an increasingly high level of taxation. This not only results in a higher level of stamp duty for every dollar spent on a home but also discourages people relocating.
An anomaly of the tax system is that investors are subject to higher stamp duty at the same time as the community relies on them to provide the majority of rental homes.
Another anomaly is that when a buyer spends $550,001 rather than $550,000 on a home, they pay an extra $3,100 in duty. There is no sensible reason for that.
The REIV also applauds the focus on assisting all first-home buyers through cuts to stamp duty and encourages the government to continue the program, even extending it if budget constraints permit.
It is also clear that the policy aim of the bonus – boosting the construction of new homes – has been met, making it unnecessary to provide additional funding for the program at this time.
Equalising assistance for all first-home buyers will provide them the choice about where to live, rather than encouraging them only into new homes.
It is also high time for the levying of stamp duty on GST in non-residential transactions to cease. When an office block, warehouse or factory is purchased, the new owner has to pay GST on the purchase itself and then stamp duty not only on the value of the property but the GST component as well.
This anomaly has been in place since the GST was introduced, and it is time it was corrected.
Enzo Raimondo is CEO of the <a target="_blank" href="https://www.reiv.com.au/">Real Estate Institute of Victoria</a>.
 
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Victorian budget provides opportunity for taxation reform

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Being the chairman of a national accounting firm that specialises in property investors gives you a special insight into the ATO’s areas of interest. We have noticed an interesting trend over recent months: the ATO is becoming more aggressive in its approach to collections of revenues and taxes when assessing claims. This could be a directive from the top, with so much discussion about budget deficits and the government trying to keep to their promises of balancing the books by certain dates there may be external pressures placed upon their biggest collection agency the ATO. Generally we find that the behaviour of people within businesses and organisations is a direct result of the management above who place directives upon their staff to reach certain targets.
The collections and assessment people hired within the ATO are no different than those debt collectors or assessors outside – they are employed for a reason, and that reason is to ensure that all taxes are paid and collected. That involves monitoring closely what individuals claim in their tax returns each year because this has a direct impact on the revenues and the budget. The  ATO simply through being more efficient and diligent can literally save hundreds of  millions – according to ATO sources more than $16 billion worth of deductions are claimed by taxpayers each year, and  if 10% of claims are incorrect… well, you get the picture.
Having completed more than half the tax year I thought it timely that I share with you some of the common mistakes made by taxpayers have been, what you can and cannot claim, how to ensure that the taxman does not come knocking on your door and if he does how you can survive the audit. The ATO is targeting property investors among others, and the most common errors are failing to keep receipts, wrongly claiming capital items as expenses, generally tardy record-keeping and misunderstandings about what you can and cannot claim.
Property investors
The ATO see the property area as an area where there is potential huge leakage of revenue due to incorrect claims. This year the ATO has said that more than 100,000 property investors will be contacted. Here are some useful tips to ensure you comply if you receive that ATO letter.
1. We always suggest to clients to get the real estate agent to pay for all expenses of the property from the rental it has collected. There are several reasons for this. Firstly, you are already paying the agency a commission for handling the management, so you may as well make use of the service. Secondly, you are working your money harder (rent sitting in the agency’s trust account). Lastly, when its tax time you simply ask for a yearly summary of rents and expenses, and you give this to your accountant, which will save in accounting costs. Than all you need to do is provide your accountant with a list of other expenses that you have paid for out of your own pocket.
2. Ensure you have a quantity surveyor’s report to back up the depreciation claims. Any capital works can be claimed as depreciation over many years, and you need a quantity surveyors report to claim this back
3. Also, if you have renovated you can claim back the items that have been thrown out such as old kitchens and demolishing of walls and other structures. To get these as a tax deduction you will need to secure a scrapping schedule from a quantity surveyor. 
4. Ask your bank to provide you with an annual loan interest summary that relates to each property so you claim the appropriate interest against the appropriate property.
5. If you have undertaken any major works to your property, be careful what you can claim as a repair vs a capital improvement, this is an area the ATO likes to focus on as many people get it wrong because it is quite grey . A repair is fixing something to bring it back into close to original workable condition, and a capital improvement is replacing it with something better. To provide an example,  if you had an oven and you just replaced the fans that is a repair, but purchasing a new oven  is a capital improvement. If you replace the roof tiles of the entire roof with new terracotta that is a capital investment, but if you replace a few broken slate tiles that is a repair. A word of advice: if the amount is substantial this will more than likely trigger an audit, so seek professional advice beforehand  or even go to the extent of contacting the ATO for a ruling.
6. Depending on the size of your portfolio you are entitled to claim an apportionment of things like use of home computers and home office costs to manage the properties, travel to view the property if the sole intention is just that (however, if the intention is say 50% to view property and 50% to holiday you will need to keep a diary record and receipts to justify the apportionment of expenses including airfares and accommodation).
7. If you have purchased an investment property in the last financial year, prepare a purchase statement that includes the purchase price, legal costs, stamp duties, borrowing costs and other capital costs, which are not tax deductible but carried forward to form part of the cost base. If and when you sell in the future you will have this information to help reduce the capital gain tax payable at that time.
8. Land tax paid by you for the property is tax deductible.
9. A word of warning: if you have incurred travel costs to inspect a property to purchase the cost is not deductible because it is part of the initial purchase cost, such as stamp duty.
10. Always seek professional advice if in doubt, as fees paid to professionals like your accountant are fully tax deductible.
Audit insurance 
Some accounting firms like Chan &amp; Naylor offer audit insurance, for a small tax-deductible fee per year you can insure yourself against the costs of having a professional represent your case on your behalf to the ATO. An ATO audit can be a very expensive exercise, time-consuming and stressful, and this type of insurance provides you with peace of mind knowing that your professional will be the go between and handle everything for you at little or no cost to you. This is simply risk management, and I believe is something everyone should consider especially with the ATO being so active. 
One last thing: we recommend that you get your work to your accountant on time to avoid the standard rush periods which helps avoid late lodgement penalties. Also note that the ATO standard work-related deduction amount of $500 does not apply until this year, and the standard deduction would be available regardless of whether relevant expenditure was actually incurred. For example, a person who completes his own tax return would be able to claim a deduction for his own efforts.  The standard deduction will translate into a $157.50 saving for a person on a 30% marginal tax rate in the first year of the measure; it remains at $300 for 2011.
Above all else, if in doubt we recommend you seek professional advice when lodging your tax returns, the tax-deductible fee paid to the accountant may be a lot cheaper exercise than getting it wrong and triggering an ATO audit.
Ed Chan is a founding partner of <a href="https://www.chan-naylor.com.au/" target="_blank">Chan and Naylor</a> accountants and a leading property tax specialist. He has co-authored three best-selling books as a seasoned property investor who understands the relationship between property investment and tax.
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echan-hSGJw4wwC5

The Tax Office has property investors in its sights

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Borrowers who choose heavily discounted home loans are at risk of being caught up in a “bait and switch” manoeuvre, according to Aussie Home Loans chief executive Stephen Porges.

Porges hit out at lenders offering home loans at “underwater” interest rates as part of a panel discussion on mortgage competition at the AB+F Mortgage Innovation Forum 2012 Sydney this week.

Porges said Aussie welcomed competition but expressed concerns about this form of “unhealthy competition”, which would force lenders to push up rates in the future to protect margins.

“Healthy competition is based around capabilities, and long-term relationship and actually valuing what the customer is trying to achieve in a holistic focus. It's not just trying to get a cheap rate,” he said.

He said some lender practices were very close to bait–and-switch tactics, which came to prominence in light of the US sub-prime mortgage crisis, when borrowers were enticed by advertisements of cheap rates and low fees but then pressured to sign up for more expensive loans by being told they did not qualify for the special offer.
Porges said he expected APRA would start to show an interest at some point in some of these discounted mortgage offerings.

Also speaking on the same panel discussion, Yellow Brick Road CEO Matt Lawler said much of the industry had moved beyond just offering a cheap rate and was now focused on how to add value after the product is sold.

“A very cheap rate on a certain day may not be the cheapest rate later on, so we have to do something to add value,” he said.

The major banks are among those offering (and advertising in their branch windows) discounts of up to one percentage point off the standard variable rate.

At the same time the same banks are warning borrowers to expect more independent rate announcements, with <a href="https://www.propertyobserver.com.au/economy/mark-bouris-takes-aim-at-rba-as-gail-kelly-warns-of-frequent-independent-bank-rate-rises/2012030853747" target="_blank">Westpac boss Gail Kelly warning last week of frequent incremental rate rises in the future</a>.

In an earlier address at the conference, Steven Münchenberg, chief executive of the Australian Bankers’ Association (ABA), admitted that the most of the public viewed banks as powerful and greedy.

“We will always struggle to persuade people that higher funding costs justify rate changes, or that our profits are reasonable and necessary, when their starting point is that we are all-powerful and greedy.

“People see us this way because there is a big and possibly growing gap, between what they expect of the industry and what they see us deliver,” he said.
 
 
 


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Home borrowers warned to avoid ‘bait and switch’ tactics: Aussie Home Loans CEO

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The number of owner-occupier mortgage commitments fell 6.3% in NSW in January following a 7.6% rise in December, according to the latest seasonally adjusted ABS figures.
The drop in NSW was the result, in part, of  the end of the rush in mortgage commitments in December as first home buyer beat stamp duty concessions on established properties that ended on December 31.
Nationally, mortgage commitments fell 1.2% to 47,768 following a downwardly revised figure of 48,370 in December, breaking a run of six straight rises between July and December. Excluding no growth in June, owner owner occupier mortgage commitments had increased for 10 straight months going back to March 2011.
Loans were expected to have risen by 2% in the month, according to CommSec analysts.
Commenting on the January housing finance figures as well as the NAB business confidence index, which fell from +4.0 to a five month low of +0.9 in February, CommSec chief economist Craig James says they suggest the economy is "largely running on the spot with new home loans going backwards and businesses lacking the confidence to ramp up activity".
"Higher bank interest rates in February probably restrained business confidence. It is also disappointing that the two rate cuts by the Reserve Bank have not provided much in the way of a lift for the housing market.
"Home prices are stagnant, so the average home loan is also not budging. Eventually the combination of a low jobless rate, flat home prices, tight rental markets and stable interest rates will lead to a wave of new home buyers. Builders will hope this happens sooner, not later," James says.
In value terms owner-occupier mortgages commitments were flat at $14.15 billion.
Among the major housing markets, Western Australian was the strongest, with a 3.8% increase in owner-occupier mortgage commitments in January, followed by South Australia (up 1.3%) and Victoria (0.9%), with Queensland mortgage growth flat.
The struggling Tasmanian market received a boost with a 3.2% rise in owner-occupier mortgage commitments.
In total the number of loans for the purchase of established dwellings fell 1.2% to 40,825.
The total value of mortgage commitments excluding alterations and additions fell 2.3% to $20.7 billion on a seasonally adjusted basis, according to the latest ABS figures.
Fixed loans for investment purposes fell 7.1% to $6.58 billion.
New home lending remained flat with the number of loans for the purchase of new dwellings down 6% to 1,953 while the number of construction loans up just 0.2% to 4,990.
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