<a href="https://www.apartments.com.au/developers/sunland-group">Sunland Group</a> has officially lodged plans for its first Gold Coast apartment project since the departure of the Abedian family from the company three years ago, unveiling a new high-rise proposal for a prominent Broadbeach corner site on Old Burleigh Road.

The application was submitted by an entity directed by Tom Jamieson, stepson of longtime Sunland leader Soheil Abedian, and Riaz Rezvanipour, brother-in-law of Sahba Abedian, Soheil’s son.

Sunland acquired the 1,283 sqm site on the corner of Old Burleigh Road and Armrick Avenue for $9.5 million late last year and is now seeking approval for a <a href="https://www.apartments.com.au/new-apartments/99-101-old-burleigh-road-broadbeach-qld-4218">42-storey tower with 81 apartments</a>.

<img alt="First look: Sunland Group returns to Broadbeach with new Old Burleigh Road tower plans" data-entity-type="file" data-entity-uuid="fea2946d-90ee-4cfc-babe-2a8ad5db2cb6" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/pers.png?VersionId=BV0fihJw31nDIQ8ozY_h3GbS8mxDyhnm" />

Designed by <a href="https://www.apartments.com.au/architects/contreras-earl-architecture">Contreras Earl Architecture</a>, the proposed tower at 99-101 Old Burleigh Road would deliver a predominantly larger-format apartment mix aimed at the owner-occupier market. Plans include 17 two-bedroom apartments, 55 three-bedroom apartments, and nine four-bedroom residences across 35 residential levels.

The development also incorporates three basement levels, four podium parking levels, two levels of communal recreation facilities, and rooftop plant and equipment. A total of 189 car spaces are proposed, significantly exceeding the 90 spaces required under the planning scheme.

The architecture adopts a sculpted, curvilinear form, with deep wraparound balconies and integrated landscaping intended to soften the tower’s vertical expression. The planning report states the building’s “slender footprint/form provides a complimentary yet varied built form within the local streetscape” and contributes to “a varied, yet ordered skyline.”

Contreras Earl noted in its Architectural Statement that from the early stages, the project addressed a fundamental challenge: how to accommodate the required residential yield while avoiding the conventional model of a tower sitting on a rigid, fully resolved parking podium.

“The most direct response would have been to consolidate parking into a singular, flat podium and extrude a repetitive tower above,” the statement said. “While efficient, this approach would result in a consolidated built form with limited engagement with the surrounding landscape and public realm.”

Instead, the conventional podium model was “deliberately rejected”. The architects described the base of the building as “a landscaped architectural condition where structure, planting and circulation are integrated”.

“Rather than presenting a continuous built mass, the base of the building is articulated through a series of concrete planter elements that organise the podium into a fragmented system,” the statement said. “This approach reduces the perceived bulk of the lower levels while establishing a more permeable interface with the streetscape and adjacent open space.”

<img alt="Sunland" data-entity-type="file" data-entity-uuid="923fad8d-c960-4527-8fbe-975cf1ddf88d" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-25%20at%2010.32.03%E2%80%AFAM.png?VersionId=pngwb0hYOIUpq9vDw6F2EsOiVuHF3DiX" />

&nbsp;

The site sits within the High Density Residential Zone and inside the City of Gold Coast’s unrestricted “HX” building height area, where the planning framework anticipates intensified residential development tied to the expanding light rail corridor. The planning report notes the area is undergoing “transition toward more intense development forms” given its proximity to Broadbeach, Surfers Paradise, and high-frequency public transport infrastructure.

Positioned directly opposite Broadbeach Park and within walking distance of Florida Gardens light rail station, the development would sit among a rapidly evolving stretch of Old Burleigh Road that has become one of the Gold Coast’s most active apartment development corridors.

The application joins a growing pipeline of luxury residential projects reshaping Broadbeach, including nearby developments by 5Point Projects, Polycell, and Graya.

The planning report argues the project contributes toward the Gold Coast’s long-term housing targets under the South East Queensland Regional Plan, which forecasts the need for more than 100,000 additional high-rise dwellings across the city by 2046.

<section data-scroll-anchor="false" data-testid="conversation-turn-4" data-turn="assistant" data-turn-id="request-WEB:84a2af5e-d7cf-4ddf-922a-f4d44d6c6caa-1" data-turn-id-container="request-WEB:84a2af5e-d7cf-4ddf-922a-f4d44d6c6caa-1" dir="auto">
The Abedian family departed Sunland Group in late 2023, ending a four-decade association with the company, and subsequently established the private development firm Abedian &amp; Co. The group is currently delivering <a href="https://www.apartments.com.au/new-apartments/greenmount-residences-cnr-hill-street-and-marine-parade-coolangatta-qld-4225">Greenmount Residences</a> at Rainbow Bay and recently launched <a href="https://www.apartments.com.au/new-apartments/18-mary-avenue-14-18-mary-avenue-broadbeach-qld-4218">18 Mary Avenue</a> in Broadbeach.
</section>

Joel Robinson

First look: Sunland Group returns to Broadbeach new apartment market with new Old Burleigh Road tower plans

The Minns Labor Government has established the new Bays West Delivery Authority to lead the development&nbsp;of the Bays West Precinct and Blackwattle Bay Precinct.&nbsp;

The Authority is charged with creating Sydney’s newest precinct, a thriving, connected, sustainable hub with White Bay Power Station as its cultural heart. Its vision is to build on the area’s natural, cultural and industrial history to shape a vibrant new neighbourhood.

The precinct will deliver up to 8,500 well-located homes, including a minimum of 10 per cent affordable and essential worker homes. Combine new housing with public open space, opening public access to the waterfront for the first time in more than 100 years, while retaining important deep-water facilities to support Sydney’s working harbour.

Located just minutes from the Sydney CBD and connected to a world-class metro, ferry, walking and cycling links, the Bays West precinct will rebalance housing growth towards well-serviced inner-city locations and help tackle the state’s housing crisis.

The Bays West Delivery Authority,&nbsp;an agency of the Department of Planning, Housing and Infrastructure, will report to the NSW Minister for Lands and Property who already has oversight of major precinct renewal projects including at Blackwattle Bay and Barangaroo.

As part of the broader Bays West transformation, the Minns Government recently announced that a proposal from Lendlease to redevelop part of the Bays West Precinct has progressed to Stage 2 of the NSW Government’s unsolicited proposals process.

<img alt="Sydney" data-entity-type="file" data-entity-uuid="2ed71eb9-d8e8-4fa7-b9d1-de4531dcf2f3" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-25%20at%209.42.31%E2%80%AFAM.png?VersionId=IDryFIbped9SNDg72LEN_EecvhUsOPvp" />

The Minns Labor Government has also confirmed the Bays West precinct will have a new suburb name. This will be the first major suburb built in close proximity to Sydney’s CBD in decades and will encompass the area currently being referred to as Bays West, including Glebe Island and the White Bay Power Station. Served by a new Metro station just five minutes from the CBD, it will become one of the most populous suburbs in the Inner West and one of Sydney’s premier cultural destinations.

An early works program is taking shape, which&nbsp;includes the first stages of an international design competition.&nbsp;

The aim of the Bays West&nbsp;International&nbsp;Design Competition is to&nbsp;ensure design excellence is embedded in the project from the start. The competition will deliver an&nbsp;urban framework that defines the character, ambition and long-term identity of&nbsp;this&nbsp;former industrial precinct as it transitions to a vibrant, inclusive and sustainable residential&nbsp;neighbourhood.

The competition will be led by the Bays West Delivery Authority in partnership with Government Architect NSW.&nbsp;

It will launch with an invitation for a global Expressions of Interest, before moving to an invitation-only stage that will be assessed by a panel that&nbsp;will provide advice to Cabinet who will select a winner.

Premier of NSW, Chris Minns said the establishment of the new Authority is the first step in transforming the Bays West precinct into a vibrant, livable suburb minutes from the Sydney CBD and two stops from Hunter St Station on the Metro West line.

“The Authority will deliver well-located homes close to the heart of the city and integrate the new precinct with Blackwattle Bay and the new Sydney Fish Market.

“This is a generational opportunity to build a new suburb on the city’s edge and open the harbour foreshore to the public for the first time in a century.”&nbsp;

Minister for Lands and Property Steve Kamper said the new Bays West Delivery Authority established by the Minns Government will turbocharge the development of Sydney’s newest suburb.

“The Authority is working at a record pace to deliver an international design competition, planning pathways and a financial model so that this development benefits Sydney with well-designed homes in a central location, close to public transport, jobs, entertainment and essential services.

“If we want Sydney to stay liveable and affordable, we need to be bold about using underutilised government-owned land to deliver homes for the future while making sure essential working harbour functions can be accommodated.”

Bays West Delivery Authority established to "turbocharge" Sydney’s newest suburb

Around 400 additional homes could be built at Southwark Grounds on Port Road, lifting total site capacity from 1300 to around 1700 dwellings.

A recently approved code amendment would allow apartment towers of up to 14 storeys in some areas of Renewal SA’s redevelopment of the former West End Brewery.

Renewal SA Acting Chief Executive Shane Wingard said he welcomed the code amendment, with the increase in heights and homes making a positive impact on the supply of high-quality, well-connected housing close to the city.

“By going higher across some parts of Southwark Grounds, we are adding a substantial number of very well-located homes with little impact on project delivery time or planned open space,” Mr Wingard said.

Since the project officially launched in 2025, Mr Wingard said more than 12,000 enquiries had been received about living at Southwark Grounds.

“The very strong early interest we’ve seen since homes were first released in the precinct reinforces our plans to create more housing opportunities,” he said.

The Southwark Grounds code amendment was launched in December last year, with community engagement undertaken over five weeks from January.

It proposed increasing maximum building heights from eight to 14 storeys on the eastern section of Southwark Grounds, and to 12 storeys across the remainder of the site, with minimum building heights ranging from two to four storeys.

The code amendment was implemented through an Early Commencement policy in late January, allowing developers to quickly explore the viability of increased height and housing yield while other planning processes continue.

One of the first developers delivering apartment sites have already finalised redesigns to increase the number of apartments following the code amendment.

Samaras’ development adjacent to the future Colonel Light Park is now planning to deliver 125 apartments across 11 storeys, significantly greater than original plans of around 50 apartments across four storeys.

The developer is also exploring the potential for additional affordable housing outcomes.

Most of the apartments at Southwark Grounds will be delivered within a master-planned precinct on a large parcel of land on the eastern portion of the site, covering around two-thirds of its 8.4 hectares.

Wingard said detailed precinct planning over the coming months may identify further opportunities to increase yield further that could see total apartment numbers at Southwark Grounds, exceed this number.

Affordable homes at Southwark Grounds will also see a net increase, with Renewal SA maintaining its commitment to a minimum of 20 per cent affordable housing across the development.

&nbsp;

&nbsp;

Civil works have begun across the site, with construction under way on the first new roads surrounding a townhouse precinct in the south‑west corner of Southwark Grounds. This includes Renewal SA’s 17 Founder’s Row homes, which are on track for completion by Christmas.

“We expect to have people living at Southwark Grounds by the end of the year, so delivering roads and public spaces for those residents is among our highest priorities.”

Construction of 40 townhouses off Anderson Street, known as West Village and being delivered by Contour, is forecast to begin in mid‑2026. Kolabb’s Anderson Lane development will follow shortly after, delivering a further 26 townhouses.

Southwark Grounds is a state government‑led urban renewal project now set to deliver around 1,700 homes over the next decade.

Homes will be supported by a supermarket, a range of retail and hospitality offerings anchored by a revitalised Walkerville Brew Tower, a childcare centre, car parking and well‑connected public spaces.

400 new homes planned for Adelaide's former West End Brewery site

Brisbane developer&nbsp;<a href="https://www.apartments.com.au/developers/cavcorp">Cavcorp</a> has lodged plans for a new mixed-use residential development at <a href="https://www.apartments.com.au/new-apartments/55-wyandra-street-teneriffe-qld-4005">55 Wyandra Street</a>, Teneriffe, anchored by an 85-metre public laneway designed to reconnect the suburb’s riverfront with the Gasworks precinct.

The buildings, known as Teneriffe House and Teneriffe Lane, would replace the existing Queensland Cotton head office site with a 15-storey residential tower transitioning to eight storeys toward Helen Street. The project has been designed by Plazibat Architects and lodged as a code assessable development application for 93 apartments across a 3,401 sqm mixed-use site within the Newstead and Teneriffe Waterfront neighbourhood plan.

Central to the scheme is the transformation of an existing service easement into a publicly accessible cross-block connection linking Wyandra and Helen Streets. Cavcorp says the new laneway will act as both a pedestrian shortcut and a landscaped civic space between the Teneriffe Riverwalk, ferry terminal, and Gasworks precinct.

<img alt="First Look: Cavcorp unveils Teneriffe House and Teneriffe Lane plans for landmark wellness tower in Teneriffe" data-entity-type="file" data-entity-uuid="26e7f058-b065-4de8-b13d-a2b8cb64dfcc" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/bldg.png?VersionId=sELS0ZKYi361oYipUa1BIKfe_.DLZoFV" />

“The revised proposal delivers a legacy public-realm cross-block link, permanently secured for community use, transforming an existing private easement into a safe, high-quality pedestrian connection between the Teneriffe heritage riverwalk and the Gasworks–Long Island precinct,” the planning report states.

The laneway will sit beneath a large subtropical loggia integrated into the podium levels of the development. The design incorporates deep landscaping, water gardens, lobby spaces, business lounges, and ground-floor apartments to create what Cavcorp describes as a climate-responsive “urban verandah.”

The tower itself has been designed as a slender form with recessed floorplates and curved translucent corners inspired by contemporary Japanese architecture. The building height aligns with the Commercial Road precinct controls, which permit towers up to 15 storeys within proximity to Longland Street.

<img alt="First Look: Cavcorp unveils Teneriffe House and Teneriffe Lane plans for landmark wellness tower in Teneriffe" data-entity-type="file" data-entity-uuid="a8a17d40-43b6-4718-b3fd-67676fcbb485" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/pers%202_1.png?VersionId=i3VwDtp5AmL_8InW7w4qRbDFEpb744Jt" />

The project will comprise a mix of larger-format apartments aimed at owner-occupiers, downsizers, and families. The proposed apartment mix includes 11 loggia apartments across the lower levels, 50 four-bedroom Sky-Terrace apartments from levels three to seven, and 32 Sky-Pool Homes occupying the upper tower levels. The Sky-Pool Homes will feature private thermal plunge pools integrated into oversized balconies.

According to the application, the apartments are intended to reinterpret the scale and character of Teneriffe’s woolstore conversions and Queensland homes within a vertical residential format.

“The sky-pool homes build on Cavcorp’s previous projects and introduce a distinct apartment typology to Teneriffe, informed by both local and international precedent and responding to an identified market demand for enhanced safety, space and amenity,” the planning submission notes.

A major focus of the proposal is its five-level wellness and lifestyle offering, extending from the basement through to the rooftop.

Amenities proposed include a rooftop Swim &amp; Racquet Club with a 25-metre Olympic lap pool and tennis court, coworking spaces and libraries, golf simulators, wine storage, concierge facilities, business lounges, pet wash areas, and rooftop longevity-focused wellness spaces with spas, outdoor fitness zones, and landscaped terraces.

<img alt="First Look: Cavcorp unveils Teneriffe House and Teneriffe Lane plans for landmark wellness tower in Teneriffe" data-entity-type="file" data-entity-uuid="944b352c-49b9-4247-a4c6-5967b4b69fda" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/amenity.png?VersionId=Ed_qKjAtMwFT.5gfl3jiA9QwdWxSMsaX" />

All parking will be concealed within basement levels accessed from Wyandra and Helen Streets. Cavcorp says the deep-basement engineering approach allows the entire ground plane to prioritise landscaping, pedestrian movement, and active frontage rather than vehicle infrastructure.

The development continues Cavcorp’s concentration in Newstead and Teneriffe, where the Brisbane developer has delivered a number of apartment projects including Lucent, Le Bain, and Luminare, as well as the Long Island Wellness Precinct nearby. Several of those projects have received national design and architecture awards, including recognition under Brisbane’s “Buildings that Breathe” program.

Cavcorp unveils wellness-focused Teneriffe House and Teneriffe Lane apartment buildings

Focus Group Investments has lodged plans for a new apartment development at <a href="https://www.apartments.com.au/new-apartments/64-70-hanover-street-fitzroy-vic-3065">64–70 Hanover Street</a> in Fitzroy, seeking to utilise the Victorian Government’s recently introduced Great Design Fast Track pathway to accelerate approvals for the project.

The proposal is among the latest developments to emerge through the state-led initiative, which was established to fast-track well-designed residential projects in activity centres and transport-connected inner-city locations. The pathway allows qualifying developments that meet elevated design and housing benchmarks to bypass traditional council planning timeframes and instead be assessed directly by the Department of Transport and Planning.

Designed by SJB, the development will comprise a mix of apartments above activated lower levels, with a strong focus on architectural articulation, landscaping, and communal amenity. The design response seeks to balance the industrial character of Richmond’s former warehouse precincts with a more contemporary residential form.

<img alt="First look: Focus Group Investments taps Victoria’s Great Design Fast Track for Richmond apartments" data-entity-type="file" data-entity-uuid="abea51cc-d85b-479e-9aef-a589f3b37ca7" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/ground.png?VersionId=e1Kf8EyPWwyiVumtqQ4rM5S4GpOR3CCz" />

Proposed are 63 new dwellings, a wide ranging mix of studio, one-, two-, and three-bedroom apartments, and townhouses and duplexes. They will be spread across a part-three, part-eight storey building.

The Planning and Urban Context Report by Tract says the development is of an "exemplary architectural standard" and has been carefully crafted by SJB Architects.

"Dwellings&nbsp;will benefit from excellent access to natural light, cross-ventilation opportunities and extensive communal space," the report noted.

The architectural material highlights the project’s integration of landscaped elements and communal spaces throughout the building. The proposal also incorporates sustainability initiatives aligned with the Victorian Government’s push for higher-performing apartment developments under the fast-track program.

The Great Design Fast Track was unveiled by the Victorian Government in 2024 as part of a broader housing supply strategy aimed at accelerating the delivery of new homes. Projects assessed through the pathway must demonstrate high-quality architecture, sustainability outcomes, and housing diversity while being located close to public transport and existing infrastructure.

<img alt="First look: Focus Group Investments taps Victoria’s Great Design Fast Track for Richmond apartments" data-entity-type="file" data-entity-uuid="afdbe834-8dc4-4a77-a943-ba07bc927348" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/site_11.png?VersionId=0J657j.TaChAZfp93wqJYBTqSsnREJx2" />

Focus Group, founder and led by Paul De Lutiis, is increasingly active across Melbourne’s inner suburbs, targeting well-connected urban renewal locations suited to medium and higher-density residential development. The Fitzroy proposal continues that strategy, leveraging the area’s strong transport links, established retail amenity, and proximity to the CBD.

Fitzroy has been one of the most popular spots for developers and buyers in recent years. The likes of PACE Development Group, SMA Projects, Crema Group and Chapter Group, currently selling projects in the suburb.

First look: Focus Group Investments taps Victoria’s Great Design Fast Track for Fitzroy apartments

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

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

NAB bring forward first RBA cut to February 2025

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Australia’s low rate lenders continue to battle it out with variable rates reaching as low as 3.09 per cent.
Over the past few days, non-bank lender Reduce Home Loans launched a new product at 3.09 per cent, receiving the honor of the new lowest ongoing variable rate.
The product is for new customers with a 40 per cent deposit (60% loan-to-value ratio, LVR).
Mortgage House has also dropped its lowest variable rate in the past couple of days, down to 3.14 per cent for people living outside of NSW with a 30 per cent deposit (70% LVR), while loans.com.au has dropped its lowest rate to 3.28 per cent.
<img src="https://www.urban.com.au/images/2019/6/13/Latest%20cuts%201.JPG" alt="">
(Source: Ratecity.com.au)
Ubank, a subsidiary of it's parent company NAB has announced it will be passing on the full 0.25% rate cut effective June 28, and will apply to both new and existing customers.
<div class="cell-value" data-reactid="181">One competitor, Greater Bank, has broken the 3% barrier with a fixed home loan rate of just 2.99% for the first year before being bumped to 4.1%.</div>
<div class="cell-details" data-reactid="182"> </div>
<div class="cell-details" data-reactid="182">Further below are the lowest fixed home loan rates for 1, 3 and 5 year home loans as well as the latest changes to savings and deposit rates.</div>
RateCity.com.au research director Sally Tindall said the non-bank lenders were climbing over each other to claim the lowest rate.
“Ideal borrowers are increasingly being rewarded with lower rates. If you’re an owner-occupier paying down your debt with a bit of equity up your sleeve you’re in the box seat when it comes to rates."
“If the RBA cuts again, we will almost certainly see variable rates drop below 3 per cent,” she said.
A side effect of the ongoing rate cuts is that Australia’s credit card debt accruing interest has slid to the lowest level in over 11. 
The RBA credit card statistics released this week show Australia’s debt accruing interest on personal credit cards is now $29.5 billion, down 4.9 per cent year-on-year, and at it's lowest levels since December 2007.
Notably the number of personal credit card accounts has fallen 3.1 per cent year-on-year.
There are now 470,088 fewer active accounts than there were in April 2018.
In addition to this Sally Tindall said, “banks are cracking the whip at their end under instructions from ASIC to assess a person’s ability to repay their entire credit card limit within three years."
“As a result, credit limits have fallen to the lowest level in more than three and half years as new customers are being forced to cut back," she concluded.
<img src="https://www.urban.com.au/images/2019/6/13/Latest%20cuts%202.JPG" alt="">
(Source: Ratecity.com.au)
New research from Finder found that Australian households could lose over a billion dollars in interest on their savings, following the Reserve Bank’s cash rate cut on Tuesday. 
According to their findings, if banks pass on the RBA’s 25 basis point interest rate cut in full, Australians will lose a whopping $1.3 billion in interest over the course of a year. 
<img src="https://www.urban.com.au/images/2019/6/13/latest%20savings%20cuts.JPG" alt="">
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j.ballantyne1990-6AQqhLzZaK

What are the latest home loan cuts and who's making them? 

<html><body>
EXPERT OBSERVER
Half a million Australians aged 50 and over lost their homes in the first decade of this century.<a href="https://theconversation.com/profiles/rachel-ong-viforj-113482"> </a>
The number of mature age Australians carrying mortgage debt into retirement is soaring.
And on average each mature age Australian with a mortgage debt owes much more relative to their income than 25 years ago.
Microdata from the Bureau of Statistics <a href="https://www.abs.gov.au/AUSSTATS/abs@.nsf/Lookup/6541.0.30.001Main+Features12013-14" target="_blank">survey of income and housing</a> shows an increase in the proportion of homeowners owing money on mortgages across every home-owning age group between 1990 and 2015. The sharpest increase is among homeowners approaching retirement.
<h2>More mortgaged for longer</h2>
For home owners aged 55 to 64 years, the proportion owing money on mortgages has tripled from 14% to 47%.
Among home owners aged 45 to 54 years, it has doubled.
<hr>
<a href="https://images.theconversation.com/files/278480/original/file-20190607-52741-1gvtikf.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=1000&amp;fit=clip"><img src="https://images.theconversation.com/files/278480/original/file-20190607-52741-1gvtikf.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt=""></a> <a class="source" href="https://www.abs.gov.au/AUSSTATS/abs@.nsf/Lookup/6503.0Main+Features12015-16">Source: Authors’ own calculations from the Surveys of Income and Housing</a>
<hr>
Meanwhile, the average mortgage debt-to-income ratio among those with mortgages has pretty much doubled across every home-owning age group.
In the 45-54 age group the mortgage debt-to-income ratio has blown out from 82% to 169%.
For those aged 55-64 it has blown out from 72% to 132%.
<hr>
<a href="https://images.theconversation.com/files/278619/original/file-20190610-52758-wdha1w.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=1000&amp;fit=clip"><img src="https://images.theconversation.com/files/278619/original/file-20190610-52758-wdha1w.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt=""></a> Among mortgage holders. Source: Authors’ own calculations from the Surveys of Income and Housing
<hr>
<h2>Three reasons why</h2>
The soaring rates of mortgage indebtedness among older Australians have been driven by three distinct factors.
First, property prices have surged ahead of incomes.
Since 1970 the national dwelling price to income ratio <a href="https://www.ceda.com.au/CEDA/media/General/Publication/PDFs/HousingAustraliaFinal_Flipsnack.pdf" target="_blank">has doubled</a>.
<hr>
<a href="https://images.theconversation.com/files/278624/original/file-20190610-52780-1hzmy9f.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=1000&amp;fit=clip"><img src="https://images.theconversation.com/files/278624/original/file-20190610-52780-1hzmy9f.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt=""></a> Prices and wages in 1970 are assigned an index of 100. <a class="source" href="https://www.ceda.com.au/CEDA/media/General/Publication/PDFs/HousingAustraliaFinal_Flipsnack.pdf" target="_blank">Sources: Treasury, ABS, Committee for Economic Development of Australia</a>
<hr>
Despite weaker property prices, the ratio remains historically high. This means households have to borrow more to buy a home. It also delays the transition into home ownership, <a href="https://www.abs.gov.au/ausstats/abs@.nsf/Lookup/by%20Subject/4130.0%7E2015-16%7EMain%20Features%7EAcross%20the%20Generations:%20Twenty%20years%20of%20housing%7E10003" target="_blank">potentially shortening</a> the the remaining working life available to repay the loan.
Second, today’s home owners frequently use flexible mortgage products to draw down on their housing equity as needed for other purposes. During the first decade of this century, one in five home owners aged 45-64 years increased their mortgage debt <a href="/news">even though they did not move house</a>.
Third, older home owners appear to be taking on bigger mortgages or delaying paying them off in the knowledge that they can work longer than their parents did, or draw down their superannuation account balances.
<h2>Super could be changing our behaviour</h2>
For mortgage holders aged 55-64 years, there is evidence to suggest that larger debts <a href="/news">prolong working lives</a>.
In 2017 around <a href="https://www.propertyobserver.com.au/https://www.abs.gov.au/ausstats/abs@.nsf/mf/6238.0" target="_blank">29% </a> of lump sum superannuation withdrawals were used to pay down mortgages or purchase new homes or pay for home improvements, up from <a href="https://www.pc.gov.au/research/completed/superannuation-post-retirement/super-post-retirement-volume1.pdf" target="_blank">25%</a> four years earlier.
In the Netherlands, where a mandatory occupational pension scheme along the lines of Australia’s super scheme has been in place for much longer, <a href="https://opendata.cbs.nl/statline/#/CBS/nl/dataset/81702NED/table?ts=1539244705047" target="_blank">over one-half</a> of home owners aged 65 and over are still paying off mortgages.
<hr>
<a href="https://images.theconversation.com/files/278784/original/file-20190611-52780-kg72kd.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=1000&amp;fit=clip"><img src="https://images.theconversation.com/files/278784/original/file-20190611-52780-kg72kd.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt=""></a> The base is the total number of uses of lump sums rather than the number of people taking lump sums. <a class="source" href="https://www.propertyobserver.com.au/https://www.abs.gov.au/ausstats/abs@.nsf/mf/6238.0" target="_blank">ABS 6238.0 Retirement and Retirement Intentions</a>
<hr>
<h2>The implications are huge</h2>
Internationally, studies have found that indebtedness <a href="https://www.sciencedirect.com/science/article/abs/pii/S0277953615001203?via%3Dihub" target="_blank">adds to psychological distress</a>. The impacts on wellbeing are more profound for older debtors, without the ability to recover from financial shocks.
Debt-free home ownership in old age used to be known as the <a href="https://www.ceda.com.au/CEDA/media/ResearchCatalogueDocuments/PDFs/27922-CEDATheSuperChallengeofRetirementIncomePolicySept2015FINAL.pdf" target="_blank">fourth pillar of the retirement incomes system</a> because of its role in <a href="https://link.springer.com/article/10.1007/s10901-010-9187-4" target="_blank">reducing poverty in old age</a>. It allowed the Australian government to set the <a href="https://melbourneinstitute.unimelb.edu.au/assets/documents/hilda-bibliography/conference-papers-lectures/2013/Haffner-Ong-Wood-ENHR2013-Paper.pdf" target="_blank">age pension at relatively low levels</a>.
Growing indebtedness will increase after-housing-cost poverty among older Australians and create pressure to <a href="/news">boost the age pension</a>.
Mortgage debt burdens late in working life will also expose home owners to unwelcome risks, as health or employment shocks can ruin plans to pay off their mortgages.
During the first decade of this century, around <a href="/news">half a million</a> Australians aged 50 years and over lost their homes.
<h2>Taxpayers will be under pressure to help</h2>
Those losing home ownership are often forced to rely <a href="https://www.propertyobserver.com.au/https://journals.sagepub.com/doi/abs/10.1177/0042098014550955" target="_blank">on rental housing assistance</a>. Moreover, as older tenants they are <a href="https://www.propertyobserver.com.au/https://journals.sagepub.com/doi/abs/10.1177/0042098014550955" target="_blank">unlikely to ever leave housing assistance</a>. This will put pressure on the government to boost spending on housing assistance, which is likely to further boost <a href="https://theconversation.com/when-falling-home-ownership-and-ageing-baby-boomers-collide-102846" target="_blank">demand for housing assistance</a>.
Super and government housing assistance could become the safety nets that allow retirees to escape their mortgages.
It wasn’t the intended purpose of superannuation, and wasn’t the intended purpose of housing assistance. It is a development that ought to be front and centre of the <a href="https://www.afr.com/news/policy/tax/retirement-incomes-face-review-20190524-p51qsi" target="_blank">inquiry into the retirement incomes system</a> announced by Treasurer Josh Frydenberg.
It is a change we’ll have to come to grips with.
<a href="https://theconversation.com/profiles/rachel-ong-viforj-113482" target="_blank">Rachel Ong ViforJ</a>, Professor of Economics, School of Economics, Finance and Property, <a href="http://theconversation.com/institutions/curtin-university-873" target="_blank">Curtin University</a> and <a href="https://theconversation.com/profiles/gavin-wood-113723" target="_blank">Gavin Wood</a>, Emeritus Professor of Housing and Housing Studies, <a href="http://theconversation.com/institutions/rmit-university-1063" target="_blank">RMIT University</a>
This article is republished from <a href="http://theconversation.com" target="_blank">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/more-people-are-retiring-with-high-mortgage-debts-the-implications-are-huge-115134" target="_blank">original article</a>.
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More people are retiring with high mortgage debts. The implications are huge

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ME Bank has announced they will be passing on the full RBA rate cut to variable home loan customers.
The announcement comes three days after the <a href="/expert-insights/finance/rba-cut-official-cash-rate-to-a-historic-low-1-25-at-june-2019-meeting">RBA rate decision</a> and comes into effect on 27th June 2019.
On the day of the RBA rate decision all of the Big Four banks as well as a number of smaller lenders announced cuts of varying size.
Both <a href="/expert-insights/finance/nab-joins-cba-in-full-0-25-rate-cut-to-historic-lows">NAB</a> and <a href="/news/cba-announce-full-rate-cut-after-june-rba-meeting">CBA</a> announced they will be passing on the full rate cut. But <a href="/expert-insights/finance/anz-first-to-pass-on-part-of-june-2019-rba-rate-cut">ANZ is only passing on a cut 0.18 basis points</a>, something Treasurer Josh Frydenberg especially disapproved of stating, “I think the ANZ has let down its customers."
<a href="/expert-insights/finance/westpac-to-cut-by-0-2-but-more-for-io-borrowers">Westpac was the last of the big four</a> to announce they were cutting rates, following the RBA's decision they announced their rate cuts late on Tuesday of 0.20 basis points.
ING, the nation’s fifth largest home loan lender chose to pass the full 0.25 per cent cut on to their variable rate customers, effective 25 June 2019.
Popular banks that have yet to announce their intentions include HSBC and AMP.
 
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ME Bank to pass on full RBA rate cut

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EXPERT OBSERVATION
The Customer Owned Banking Association (COBA) has strongly criticised a Treasury proposal to hike levies on smaller banks while cutting levies for the four major banks.
Treasury is proposing dramatic increases in levies on customer owned banks and smaller listed banks while gifting the big four a $3 million levy reduction (see Treasury table below).
The levies are intended to cover higher regulatory costs for the banking regulator APRA flowing from the Financial Services Royal Commission.
Smaller banks’ levies are sharply ratcheted upwards by more than 25% while major bank levies are reduced.
This makes no sense at all given it was the misconduct of the major banks that has prompted the need to increase resourcing for APRA.
Customer owned banking institutions have not engaged in the misconduct examined by the Royal Commission but now face being forced to ‘pay the price’.
These proposals send a very confusing signal about the Government’s intention to hold the major banks accountable for their conduct.
Major banks already have a head start on their smaller competitors through various aspects of the regulatory framework.
They don’t deserve the extra help of a cut in their APRA levies while their much smaller competitors are hit with huge increases.
Click <a href="https://www.propertyobserver.com.au/images/2019/6/6/ADI%20Levies.JPG" target="_blank">here</a> to enlarge
<img src="https://www.urban.com.au/images/2019/6/6/ADI%20Levies.JPG" alt="">
I urge the Treasurer to intervene and rule out these grossly unfair increases in APRA levies on COBA member banking institutions.
Regulator industry levies should be set with sensitivity to the cost burden on smaller banking institutions and with more weighting given to the systemic importance and market power of major banks.
The Productivity Commission describes the banking market as ‘an established oligopoly where the four major banks hold substantial market power and this is substantially supported by regulatory settings which contribute to the major banks’ structural advantages.
Sharply increasing levies paid by smaller banking institutions while reducing levies paid by major banks will make a bad situation worse.
MICHAEL LAWRENCE is the CEO of the Customer Owned Banking Association. 
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Unfair tax hike proposed for smaller banks: COBA's Michael Lawrence

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The good news for homeowners and investors has continued with the Reserve Bank cutting the official cash rate by 25 basis points to a historic low of 1.25%.
This decision follows hot on the heels of APRA calling on lenders to scrap the 7% mortgage interest rate test and the Federal Election result that has ensured that property tax benefits such as negative gearing and the 50% capital gains tax discount are maintained. 
Many of the offices I have spoken to or visited over the last two weeks are reporting their phones started ringing again on the Monday morning after the election.
This result underlines once again that consumers don’t like uncertainty.
The decision by the central bank today will have a similar result on buyer confidence and throw in the Federal Government’s new First Home Loan Deposit Scheme announced during the Federal Election campaign, and the short to medium term outlook for Australian property markets is much stronger than even a month ago.  
However, to achieve the intended impact of the easing, it’s imperative every lender passes the 25-basis point cut on to borrowers in full.
The RBA’s move will help affordability for first home buyers.
The caveat is that the banks must come to the party and pass this rate cut on in full.
First home buyers have all the power in the market right now. They have all the support from the government, the central bank, the lenders, and there are plenty of incentives aimed at first timers seeking to buy off the plan property.
However, the trouble is empty nesters don’t have the incentives to move, which is hindering the housing plans of upgraders and first-time buyers. 
We need governments to look at ways to provide last-time buyer incentives to help encourage the empty nesters to downsize. 
Tax incentives have been proven to work for first-time buyers. Now is the time to try to encourage empty nesters to move through tax incentives.
ANGUS RAINE is the Executive Chairman of Raine &amp; Horne
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Rate cuts help affordability, but governments need to consider last-home buyer incentives: Angus Raine

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Home loan lenders have continued to cut rates following the RBA rate cut announcement on Tuesday.
The <a href="/expert-insights/finance/who-cut-their-interest-rates-following-the-rbas-move">big four banks all cut within a few hours</a> following the decision for the RBA to cut rates to 1.25%, the lowest in history and the first time they've moved since August 2016.
ING, Bank of Queensland, Virgin Money, Qudos Bank and Newcastle Permanent have moved their variable interest rates since the last RateCity.com.au update yesterday.
ING, the nation’s fifth largest home loan lender chose to pass the full 0.25 per cent cut on to their variable rate customers, effective 25 June 2019
BOQ is only passing 0.15 per cent on to their most popular product, the Clear Path variable rate package, while all other variable rate loans will be cut by the full 0.25 per cent.
Virgin Money is passing on 0.22 per cent to their variable rate customer.
Popular banks still yet to announce their intentions include BankWest, Bendigo Bank, Adelaide Bank, ME Bank, HSBC and AMP.
<img src="https://www.urban.com.au/images/2019/6/6/RateCity%20New%20Rates.JPG" alt="">
The first to cut was Athena, a small Sydney-based non-bank lender who only entered the market this year. They cut their rates by the full 25 basis points within 15 minutes of the RBA decision.
The online lender announced a new headline variable rate for owner-occupiers at 3.34 percent.
The <a href="/expert-insights/finance/anz-first-to-pass-on-part-of-june-2019-rba-rate-cut">first big four bank to cut was the ANZ</a>, just nine minutes after the RBA's announcement, however they've been outed by Treasurer Josh Frydenberg because they only cut 18 basis points, as opposed to the 25 basis points the RBA cut by.
“I think the ANZ has let down its customers,” Frydenberg said.
Commonwealth Bank were next, <a href="/news/cba-announce-full-rate-cut-after-june-rba-meeting">announcing their 25 basis point cut</a> at around 3.30pm. 
Effective from June 25, CBA's standard variable rate will drop by 0.25%.
NAB joined CBA with <a href="/expert-insights/finance/nab-joins-cba-in-full-0-25-rate-cut-to-historic-lows">a full 25 basis point cut</a> for their standard variable rate which will be the lowest rate they have offered in four decades.
Westpac were the last to cut, <a href="/expert-insights/finance/westpac-to-cut-by-0-2-but-more-for-io-borrowers">only passing on a 20 basis point cut</a>.
TERM DEPOSITS
We saw a huge flurry of cuts to term deposits in the lead up to Tuesday’s RBA rate announcement, as banks moved to price the expected cut in. Over 50 banks have cut term deposit rates in the past two months.
This week, the term deposit rate cuts continue to come in, particularly from Westpac and ANZ. A stocktake of the big 4 banks below:
<ul type="disc">
<li>ANZ – ANZ has cut almost 20 term deposit rates and has hiked just a couple since Tuesday. The biggest cut on our database is 0.60 per cent;</li>
</ul>
<ul type="disc">
<li>Westpac – Westpac has also changed a range of term deposit rates since the beginning of the week, cutting by up to 0.50 per cent and increasing one by 0.25 per cent. Westpac’s at-call deposits remain under review;</li>
</ul>
<ul type="disc">
<li>CBA – no change to date;</li>
</ul>
<ul type="disc">
<li>NAB – no change to date.</li>
</ul>
RateCity.com.au’s research director Sally Tindall said Tuesday’s rate announcement was like rubbing salt into a wound for savers.
“It’s been a tough slog for savers over the last three years, and while a range of factors influence deposit rates, we’re expecting them to sink even further," Tindall said.
“It is especially frustrating to see ANZ and Westpac hold back part of a home loan rate cut with one hand and slash some of their deposit rates with the other.
“It does still pay to shop around. Right now, you can find term deposit and savings rates that offer up to around 3 per cent, however, these rates are unlikely to last for long,” she said.
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What are lenders doing following the June RBA rate cut? RateCity

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EXPERT OBSERVATION
Australian GDP rose by 0.4% in the March quarter and annual growth slowed to 1.8%, which missed market forecasts of 0.5% and is also a little weaker than the RBA's recent forecasts. This was the weakest annual growth since September 2009.
The weakness in the Australian economy that started in mid-2018 has continued into early 2019 with the latest GDP data showing low economic growth in the March quarter (see chart below).
What’s more the make-up of growth in the March quarter remains concerning with falling private final demand for the second quarter in a row. Were it not for government spending and net exports GDP growth would have been zero.
We expect that this low growth environment will continue in Australia for now and we see GDP growth averaging around 1.75% over 2019, which is below RBA’s forecasts for growth around 2.75%.  
The economy is now in its 28th year of recession-free economic growth, and while the near-term outlook for growth still looks positive as the various parts of the economy muddle through, the outlook for 2020 looks challenging as government infrastructure spending looks like it will slow after this year, residential construction looks likely to continue to decline, the consumer is expected to remain weak and risks are building around the global economic outlook as a result of Trump’s trade wars. So we see a higher risk of an Australian recession in 2020 (risk of around 25% from 15% before).
More RBA interest rate cuts along with fiscal stimulus are likely to be necessary to offset the threat to growth. 
<a href="https://www.propertyobserver.com.au/images/2019/6/5/gdp%20growth.png" target="_blank">Click here</a> to enlarge: 
<img src="https://www.urban.com.au/images/2019/6/5/gdp%20growth.png" alt="">
Source: ABS, AMP Capital
The key components of the data are:
<ul type="disc">
<li>
Consumer spending rose by 0.3%, contributing 0.1 percentage points to March quarter GDP, and annual growth in spending declined to 1.8%. The household savings rate increased again, to 2.8% after bottoming at 2.5% in the September quarter. We expect that the fall in home prices and the associated negative wealth effect will push the household savings ratio higher over the next 1-2 years which will be a drag on consumer spending as wages growth is stuck at just over 2%. But consumer spending will benefit from the latest RBA interest rate cut (and further potential cuts) as well as tax stimulus, announced in the Federal Budget which will be paid after July when households do their tax return.</li>
</ul>
<ul type="disc">
<li>
Housing investment continues to decline with residential construction down by 1.8% in the March quarter, alterations and additions spending falling by 3.8% and ownership transfer costs (a proxy for housing turnover activity) plummeting by 13.0% which all detracted 0.3 percentage points from growth. Building approvals for residential property have continued to fall so there is still further downside to residential construction. </li>
</ul>
<ul type="disc">
<li>
Underlying business investment (which takes into account asset transfers between the private and public sector) rose by 0.5% and contributed 0.1 percentage points to growth. Non-residential building activity is lifting after many quarters of weakness, engineering construction fell and machinery and equipment investment declined marginally. The outlook for non-mining investment is still looking okay, particularly for manufacturing, and mining investment looks like it is starting to lift again after falling since 2012 as commodity prices have held up well. </li>
</ul>
<ul type="disc">
<li>
Underlying government spending (which takes into account asset transfers between the private and public sector) rose by 0.7% and contributed 0.2 percentage points to growth. State and Federal government spending on infrastructure has been driving public spending over the past few years. While there are still many projects in the construction pipeline (particularly for transport), the pace of growth in public spending is declining and recent state government budgets indicate lower revenue (as stamp duty collections have fallen) and therefore some tightening in state fiscal spending which means that government spending growth will start to slow and in the absence of more infrastructure projects may become a drag on the economy later in 2020.</li>
</ul>
<ul type="disc">
<li>
Inventories detracted 0.1 percentage points from growth as farm and public inventories collapsed (following a build up in the prior quarter) but private inventories increased.</li>
</ul>
<ul type="disc">
<li>
Net exports contributed 0.2 percentage points to growth with a rise in export volumes and a fall in import volumes. Australia’s external sector is doing extremely well from the booming iron ore price (around $100USD/tonne) which is a boost to the government’s budget. But the risk is that the weakening global environment, particularly around trade, will hit net exports.</li>
</ul>
<ul type="disc">
<li>
Inflation pressures and wages growth are still poor. Inflation as measured by the private final consumption deflator was just 0.4% in the March quarter or 1.5% over the year. Average compensation per employee was up by just 0.4% or 1.4% over the year which is well below the wage price data (of 2.3% year on year) reflecting compositional changes.</li>
</ul>
<ul type="disc">
<li>
Productivity declined by 0.4% in the March quarter and is down by 0.9% which reconciles the divergence between strong employment growth and the weakening GDP numbers. </li>
</ul>
Implications
With economic growth running well below potential, which is around 2.75%, the RBA will need to cut interest rates multiple times to get growth up and get the unemployment rate down below 4.5% (it is currently 5.2%) in order to get inflation back into its 2 to 3% target range.
We see another 0.25% rate cut in July or August and two more rate cuts in the first half of 2020 which will take the cash rate to 0.5% in 2020. Hopefully additional fiscal stimulus will help too. The need for quantitative easing is a rising risk, but hopefully it won’t be necessary.  
DR SHANE OLIVER is the Head of Investment Strategy and Chief Economist at AMP Capital.
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soliver-smf6LQXgW9

RBA to cut interest rates to 0.5%: Shane Oliver 

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The RBA cut rates for the first time in nearly three years at its June meeting to a record low 1.25%.
It had previously stood at 1.5%, which had been a record low rate, since it was last cut from 1.75% in August 2016.
Over 90% of the economists and experts surveyed in Finder.com.au's monthly RBA Cash Rate Survey <a href="/expert-insights/finance/over-90-of-experts-and-economists-predict-cut-finders-rba-cash-rate-survey">predicted the cut</a>.
RBA Governor Philip Lowe has <a href="/news/why-the-rba-cut-rates-to-record-lows-governor-philip-lowe">explained the cash rate cut</a>, suggesting the "decision was taken to support employment growth and to provide greater confidence that inflation will be consistent with the medium-term target."
Today the RBA have released their chart pack, which highlights key factors in the Australian economy.
Property Observer takes a look at four key charts which will have been strong influencers in the decision to cut the official interest rate.
1. GDP Growth
Australia's GDP growth continued its decline toward two percent.
The economy only grew 0.3 percent in the September quarter and 0.2 percent in the December quarter, an annualised rate of just one percent. <img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2019/6/5/GDP-growth.jpg" alt="">
2. Consumer Price Inflation
Consumer Price Inflation has continued its downward trajectory towards one percent. 
Income and spending per person fell in the December quarter, following a September quarter where it barely grew.
UNSW's Peter Martin <a href="/expert-insights/finance/the-reserve-bank-will-cut-rates-again-and-again-until-we-lift-spending-and-push-up-prices">says the RBA cut rates</a> because "we aren’t spending or pushing up prices at anything like the rate it would like."
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2019/6/5/CPI.jpg" alt=""> 
3. Underlying Inflation
Since 1993, the RBA has targeted inflation of between two and three per cent, on average, over the course of the business cycle.
The latest March quarter figures has the inflation tracking further away from the two to three percent bracket.
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2019/6/5/underlying-inflation.jpg" alt=""> 
4. Unemployment
The latest unemployment figures were a mixed bag.
Total employment rose 28,400 in April, stronger than the market median estimate of over 15,000.
Full-time employment in April fell 6,300 with part-time employment growing 34,700.
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2019/6/5/Labor-Market.jpg" alt="">
The big surprise in the April results was the jump in the unemployment rate from 5.1% to 5.2%.
This was the result of a jump in the participation rate to a new record high of 65.85%. 
To see the full chart pack from the RBA, <a href="https://www.rba.gov.au/chart-pack/" target="_blank">click here</a>.
 
 
 
 
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The key charts that determined the RBA's June rate cut

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The RBA cut the official cash rate to a historic low 1.25% in its June meeting, the first time it's cut the rate in nearly three years.
A number of lenders followed suit, cutting their rates, some within the hour, after the announcement.
The first to cut was Athena, a small Sydney-based non-bank lender who only entered the market this year. They cut their rates by the full 25 basis points within 15 minutes of the RBA decision.
The online lender announced a new headline variable rate for owner-occupiers at 3.34 percent.
The <a href="/expert-insights/finance/anz-first-to-pass-on-part-of-june-2019-rba-rate-cut">first big four bank to cut was the ANZ</a>, just nine minutes after the RBA's announcement, however they've been outed by Treasurer Josh Frydenberg because they only cut 18 basis points, as opposed to the 25 basis points the RBA cut by.
“I think the ANZ has let down its customers,” Frydenberg said.
“This is deeply disappointing from the ANZ.
"We heard from Commissioner Hayne just months ago that the banks were putting profits before people. Actions like this don't give the Australian people any comfort that the banks have changed their behaviour”
ANZ chief executive Shayne Elliott said it was unfair to keep cutting depositor rates and penalising people who rely on interest income.
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2019/6/5/Banks-interest0-rates.jpg" alt=""> The banks rate moves since January 2018. Source: DFA
The other big four banks weren't all going to follow suit.
Commonwealth Bank were next, <a href="/news/cba-announce-full-rate-cut-after-june-rba-meeting">announcing their 25 basis point cut</a> at around 3.30pm. 
Effective from June 25, CBA's standard variable rate will drop by 0.25%.
Angus Sullivan, group executive retail banking services, said “we have carefully considered the RBA rate decision and the current funding environment, together with how we continue to meet our regulatory commitments, capital requirements, and community expectations."
NAB joined CBA with <a href="/expert-insights/finance/nab-joins-cba-in-full-0-25-rate-cut-to-historic-lows">a full 25 basis point cut</a> for their standard variable rate which will be the lowest rate they have offered in four decades.
Mike Baird, chief customer officer of consumer banking, said “we strongly believe reducing rates is the right thing to do by our customers and reflects our focus on earning trust in the community and rewarding our loyal existing customers."
Westpac were the last to cut, <a href="/expert-insights/finance/westpac-to-cut-by-0-2-but-more-for-io-borrowers">only passing on a 20 basis point cut</a>.
There will be higher rate cuts for its investor only borrowers who will be a 35 basis point cut.
David Lindberg at Westpac said the bank took many factors into account in making the decision.
“We are operating in a historically low interest rate environment, which creates the opportunity for home-owners to get ahead on their repayments,” he said.
“It is also a good time for first home buyers to get onto the property ladder with some of the lowest rates in the history of the Australian mortgage market available.”
The quick moves from the big four is in stark contrast to when the RBA last cut the cash rate in August 2016.
Only three of the big four banks passed on the full cut last time around, and waited up to 20 days to do so.
Graham Cooke, insights manager at home loan comparison site Finder.com.au, said if your bank doesn't cut, then you should look elsewhere.
“If you don’t get the full rate cut, vote with your feet," Cooke said. “A lower cash rate will spur even further competition within the market so it is the perfect time to weigh up your options as you have the bargaining power.
"The best value home loan rates right now start with a ‘3’,” he said. 
Finder's research shows the average variable rate across all lenders is 4.91%. If lenders cut the full 25 basis points, mortgage holders could save $1,812 a year on a $1 million loan.
Click here <a href="https://www.propertyobserver.com.au/images/2019/6/5/Potential-savings-finder.jpg" target="_blank">to enlarge</a>.
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2019/6/5/Potential-savings-finder.jpg" alt="">
Other lenders who have either cut or have announced they will be cutting their home loan rates.
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2019/6/5/Rate-cutters.jpg" alt="">
 
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Who cut their interest rates following the RBA's move?

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EXPERT OBSERVER
The Reserve Bank cut interest rates on Tuesday because we aren’t spending or pushing up prices at anything like the rate it would like. And things are even worse than it might have realised.
As the board met in Martin Place in Sydney, in Canberra at 11.30 am the Bureau of Statistics released details of retail spending in April, one month beyond the March quarter figures the bank was using to make its decision.
They show the dollars spent in shops fell in April, slipping 0.1%, notwithstanding weakly growing prices and a more strongly growing population.
The March quarter figures the board was looking at were adjusted for prices. They show that the volume of goods and services bought, but not the amount paid for them, fell in seasonally adjusted terms during the March quarter.
Adjusted for population, the volume bought would have fallen further.
<h2>We’ll know more on Wednesday</h2>
The Bureau of Statistics will release population-adjusted figures as part of the national accounts on Wednesday.
The figures for the September quarter show that income and spending per person barely grew. The figures for the December quarter show income and spending per person fell.
A second fall in the March quarter will mean two in a row – what some people call a per capita recession.
<hr>
<a href="https://images.theconversation.com/files/275325/original/file-20190520-69186-1pvxbji.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=1000&amp;fit=clip"><img src="https://images.theconversation.com/files/275325/original/file-20190520-69186-1pvxbji.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt=""></a> <a class="source" href="https://www.propertyobserver.com.au/http://www.abs.gov.au/ausstats/abs@.nsf/mf/5206.0" target="_blank">Australian National Accounts</a>
<hr>
Even unadjusted for population, economic growth is dismal.
During the September and December quarters the economy grew just <a href="https://www.propertyobserver.com.au/http://www.abs.gov.au/ausstats/abs@.nsf/mf/5206.0" target="_blank">0.3% and 0.2%</a> – an annualised rate of just 1%.
That’s well short of the <a href="https://www.smh.com.au/business/the-economy/myefo-treasury-downgrades-its-budget-projections-20151124-gl6mfd" target="_blank">2.75%</a> the treasury believes we are capable of, and the lower than normal <a href="https://budget.gov.au/2019-20/content/overview.htm" target="_blank">2.25%</a> it has forecast for the year to June.
<hr>
<a href="https://images.theconversation.com/files/275322/original/file-20190520-69199-1ir7rrj.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=1000&amp;fit=clip"><img src="https://images.theconversation.com/files/275322/original/file-20190520-69199-1ir7rrj.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt=""></a> <a class="source" href="https://www.propertyobserver.com.au/http://www.abs.gov.au/ausstats/abs@.nsf/mf/5206.0" target="_blank">Australian National Accounts</a>
<hr>
We’ve been doing it by ourselves. As Reserve Bank Governor Philip Lowe said in <a href="https://www.rba.gov.au/media-releases/2019/mr-19-15" target="_blank">announcing the rates decision</a> on Tuesday:
"The main domestic uncertainty continues to be the outlook for household consumption, which is being affected by a protracted period of low income growth and declining housing prices."
The bank wants both inflation and employment higher, and it wants us to spend more in order to do it. Lower rates should help, although <a href="https://theconversation.com/why-the-reserve-bank-shouldnt-but-might-cut-interest-rates-on-tuesday-116354" target="_blank">not for everybody</a>.
Lowe acknowledged this in a <a href="https://www.rba.gov.au/speeches/2019/sp-gov-2019-06-04" target="_blank">speech to a Sydney business audience on Tuesday night</a>, but he said households paid two dollars in interest for every one dollar of interest they received. So while rate cuts hurt savers, they benefit borrowers by more, and over time should benefit all households by boosting the economy. They also drive the dollar lower, making Australian businesses more competitive.
Tuesday’s cut should free up an extra A$60 a month for a typical mortgage holder. Another one will free up a total of A$120.
It’s not much, and there’s doubt about whether it will do much, but interest rates are about the only tool the Reserve Bank has.
It is required by its agreement with the government to aim for an inflation rate of between <a href="https://rba.gov.au/monetary-policy/framework/stmt-conduct-mp-7-2016-09-19" target="_blank">2% and 3%</a>, “on average, over time”.
<img src="https://images.theconversation.com/files/270879/original/file-20190425-121220-1csg8ma.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt="">Treasurer and Reserve Bank Governor, Statement on the Conduct of Monetary Policy, September 19, 2016. <a class="source" href="https://rba.gov.au/monetary-policy/framework/stmt-conduct-mp-7-2016-09-19" target="_blank">Reserve Bank of Australia</a>
Uncomfortably for Governor Lowe, underlying inflation (abstracting from unusual moves which are quickly reversed) has been below 2% ever since he was appointed governor in late 2016.
Explaining his push for higher inflation to a business audience in Sydney on Tuesday night he said that while adherence to the target was intended to be flexible, that flexibility was “not boundless”.
"If inflation stays too low for too long, it is possible that inflation expectations move lower – that Australians come to expect sub-2% inflation on an ongoing basis. If this were to happen, it would be harder to achieve the medium term inflation goal. So we need to guard against this possibility."
He is also required to <a href="https://rba.gov.au/monetary-policy/framework/stmt-conduct-mp-7-2016-09-19" target="_blank">aim for full employment</a>.
He told the business audience that while for some years the bank and others had thought full employment meant an unemployment rate of 5%, the absence of inflation at 5% and the persistence of underemployment (where people wanted more hours) meant it could and should go lower.
"Our judgement now is that we can do better than this – that we can sustain an unemployment rate of 4 point something."
Lower interest rates should help by making it easier to businesses to borrow to expand, and giving consumers something in their pockets to buy from them.
<h2>If you don’t succeed…</h2>
If that doesn’t happen, the bank will cut again.
Tuesday’s statement as good as said so:
"The board will continue to monitor developments in the labour market closely and adjust monetary policy to support sustainable growth in the economy and the achievement of the inflation target over time."
Tuesday’s cut and the next will take the bank into uncharted waters, where its so-called cash rate – what it pays to banks to deposit money with it overnight – is close to zero.
As far as can be discerned it has never been that low in the 100+ years the Reserve Bank has been in operation, originally as the Commonwealth Bank of Australia.
<hr>
Reserve Bank cash rate since 1990
<a href="https://images.theconversation.com/files/277841/original/file-20190604-69059-1j2m4r9.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=1000&amp;fit=clip"><img src="https://images.theconversation.com/files/277841/original/file-20190604-69059-1j2m4r9.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt=""></a> <a class="source" href="https://www.rba.gov.au/media-releases/2019/mr-19-15" target="_blank">Reserve Bank of Australia</a>
<hr>
Should inflation still not pick up and employment still not fall as far as it believes it could, it will have to effectively cut its cash rate below zero, forcing cash into the hands of banks by aggressively buying government bonds, giving them little choice but to lend it to households and businesses, in a process known as quantitative easing. It has been done in the United States, Europe, the United Kingdom and Japan, and is by now <a href="https://www.bankofengland.co.uk/monetary-policy/quantitative-easing" target="_blank">anything but unconventional</a>.
Governor Lowe would prefer the government to pull its weight by cutting tax and boosting spending, especially on infrastructure, and by policies that make Australia more productive.
He said so on Tuesday night
"The best approach to delivering lower unemployment and a stronger economy is through structural policies that support firms expanding, investing, innovating and employing people. As we ease monetary policy, it is in the country’s interest that other policy options are considered too.
Treasurer Josh Frydenberg gets it.
He pointed out on Tuesday that the yet-to-be-approved tax offsets in the budget will give Australians on up to A$126,000 a cash bonus of up to A$1,080 when they submit this year’s tax return, far more than the rate cut.
His biggest concern, and the biggest concern of the governor, might be that they don’t spend it. Another concern would be that the banks don’t pass the rate cut on.
The ANZ has said it will only cut mortgage rates by 0.18 points instead of the full 0.25, a decision Frydenberg said “let down” customers. Westpac has cut by only 0.20 points. The National Australia and Commonwealth banks have passed on the cut in full.
On Tuesday night in Sydney Governor Lowe addressed the question of whether the banks should have passed on the full cut head on:
"My usual practice in answering this question has been to explain that there are a range of other factors that influence mortgage pricing, and then say “it all depends”.
"Today, though, I would like to break with my usual practice and provide a clearer answer. And that is: Yes. There has been a substantial reduction in the cost of banks raising funds in wholesale markets. Average rates on retail deposits have also come down.
This means that the lower cash rate should be fully passed through into standard variable mortgage rates. Full pass-through would also mean that the economy receives the full benefit of today’s policy decision.
The Governor is concerned that, for their own reasons, lenders such as ANZ and Westpac are forcing him to cut rates lower than he should and making an already difficult job harder.
If he has to cut further he will, but with the cash rate at just 1.25%, he would dearly love not to have to.
<a href="https://images.theconversation.com/files/277854/original/file-20190604-69071-xecu9u.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=1000&amp;fit=clip"><img src="https://images.theconversation.com/files/277854/original/file-20190604-69071-xecu9u.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt=""></a> <a class="source" href="https://www.rba.gov.au/media-releases/2019/mr-19-15" target="_blank">Reserve Bank of Australia</a>
<a href="https://theconversation.com/profiles/peter-martin-682709" target="_blank">Peter Martin</a>, Visiting Fellow, <a href="http://theconversation.com/institutions/crawford-school-of-public-policy-australian-national-university-3292" target="_blank">Crawford School of Public Policy, Australian National University</a>
This article is republished from <a href="http://theconversation.com" target="_blank">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/the-reserve-bank-will-cut-rates-again-and-again-until-we-lift-spending-and-push-up-prices-118263" target="_blank">original article</a>.
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