<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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An overview of ANZ's home loan portfolio from their half year results investor pack published today shows a big fall its in its investor portfolio along with a big drop in interest-only loan borrowers.
Just 18 percent of their portfolio is IO compared with 26 percent this time last year and 36 percent in 2017.
The number of investor loans has dropped over the two years from 34 percent to 31 percent.
Click here <a href="https://www.propertyobserver.com.au/images/2019/5/1/ANZ-Home-Loan-Portfolio.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/2019/5/1/ANZ-Home-Loan-Portfolio.jpg" alt="">
At $269 billion lent, its entire loan book has 1 million accounts, down on the 1,018,000 this time last year.
Some 82 pecent of loans are variable.
Click here <a href="https://www.propertyobserver.com.au/images/2019/5/1/ANZ-Australi-Division-Portfolio.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/2019/5/1/ANZ-Australi-Division-Portfolio.jpg" alt="">
There is an average 55 percent LVR compared with an originating 67 percent LVR. 
The average loan size has kept up to $269,000, up from $266,000 this time last year.
ANZ says it has 15.1 percent market share.
Around 52 percent of loans are broker originated.
ANZ Banking Group met expectations against a difficult operating environment with 2 per cent rise in cash profit to $3.564 billion.
 
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jchancellor-FAypfDUnLy

ANZ's home loan portfolio shows big drop in interest-only borrowers

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EXPERT OBSERVATION
Surprisingly weak Australian inflation has led to expectations the Reserve Bank will soon cut rates. But what’s driving low inflation? Is it really that bad? Why not just lower the inflation target? Will rate cuts help? And what does it mean for investors?
Inflation surprises on the downside again Australian inflation as measured by the CPI was flat in the March quarter and up just 1.3% over the last year. Sure, the zero outcome in the quarter was partly due to a nearly 9% decline in petrol prices and they have since rebounded to some degree. And high-profile items like food, health and education are up 2.3%, 3.1% and 2.9% respectively from a year ago. But against this price weakness is widespread in areas like clothing, rents, household equipment and services and communications.
<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/2019/4/26/New%20Project%208.jpg" alt="">
Source: ABS, AMP Capital
But why the focus on “underlying inflation”? The increase in the CPI is the best measure of changes in the cost of living. But it can be distorted in the short term by often volatile moves in some items that are due to things like world oil prices, the weather and government administered prices that are unrelated to supply and demand pressures in the economy.
So, economists and policy makers like the RBA focus on what is called underlying inflation to get a handle on underlying price pressures in the economy so as not to jump at shadows. There are various ways of measuring this ranging from excluding items like food and energy as in the US version of core inflation, to excluding items whose prices are largely government administered to statistical measures that exclude items that have volatile moves in each quarter (as with the trimmed mean and weighed median measures of inflation). Right now they all show the same thing ie that underlying inflation is low ranging between 1.2% to 1.6% year on year. The average of the trimmed mean and weighted median measures is shown in the previous chart and is averaging 1.4%. The common criticism of underlying inflation that “if you exclude everything there is no inflation” is funny but irrelevant. The point is that both headline and underlying inflation are below the RBA’s 2-3% target and this has been the case for almost four years now.
What is driving low inflation?
The weakness in inflation is evident globally. Using the US definition, core (ex food and energy) inflation is just 1.8% in the US, 0.8% in the Eurozone, 0.4% in Japan and 1.8% in China.
<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/2019/4/26/New%20Project%209.jpg" alt="">
Sources: Bloomberg, AMP Capital
Several factors have driven the ongoing softness in inflation including: the sub-par recovery in global demand since the GFC which has left high levels of spare capacity in product markets and underutilisation of labour; intense competition exacerbated by technological innovation (online sales, Uber, Airbnb, etc); and softish commodity prices. All of which has meant that companies lack pricing power and workers lack bargaining power.
Why not just lower the inflation target?
Some suggest that the RBA should just lower its inflation target. This reminds me of a similar argument back in 2007-08, when inflation had pushed above 4%, that the RBA should just raise its inflation target. Such arguments are nonsense. First, the whole point of having an inflation target is to anchor inflation expectations. If the target is just raised or lowered each time it’s breached for a while then those expectations - which workers use to form wage demands and companies use in setting wages and prices - will simply move up or down depending on which way inflation and the target moves. And so inflationary or deflationary shocks will turn into permanent shifts up or down in inflation. Inflation targeting would just lose all credibility.
Second, there are problems with allowing too-low inflation. Mostcentral bank inflation targets are set at 2% or so because statistical measures of inflation tend to overstate actual inflation by 1-2% because statisticians have trouble actually adjusting for quality improvements and so some measured price rises often reflect quality improvements. In other words, 1.3% inflation as currently measured could mean we are actually in deflation. And there are problems with deflation.
What’s wrong with falling prices (deflation) anyway?
Deflation refers to persistent and generalised price falls. It occurred in the 1800s, 1930s and the last 20 years in Japan. Most people would see falling prices as good because they can buy more with their income. However, deflation can be good or bad. In the period 1870-1895 in the US, deflation occurred against a background of strong growth, reflecting rapid technological innovation. This can be called “good deflation”.
However, falling prices are not good if they are associated with falling wages, rising unemployment, falling asset prices and rising real debt burdens. For example, in the 1930s and more recently in Japan. This is “bad deflation”. Given high debt levels, sustained deflation could cause big problems. Falling wages and prices would make it harder to service debts. Lower nominal growth will make high public debt levels harder to pay off. And when prices fall people put off decisions to spend and invest, which could threaten economic growth. This could risk a debt deflation spiral of falling asset prices and falling incomes leading to rising debt burdens, increasing defaults, spurring more falls in asset prices, etc.
The problem for RBA credibility?
The problem for the RBA is that inflation has been undershooting its forecasts and the target for several years now. The longer this persists the more the RBA will lose credibility, seeing low inflation expectations become entrenched making it harder to get inflation back to target and leaving Australia vulnerable to deflation in the next economic downturn.
<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/2019/4/26/New%20Project%2010.jpg" alt="">
Source: RBA, Bloomberg, AMP Capital
Due to the slowdown in economic growth flowing partly from the housing downturn we have been looking for two rate cuts this year since last December. We had thought that the RBA would prefer to wait till after the election is out of the way before starting to move and coming fiscal stimulus from July also supports the case to wait as does the still strong labour market.
However, with underlying inflation coming in much weaker than expected the RBA its arguably too risky to wait until unemployment starts to trend up. And the RBA has moved in both the 2007 and 2013 election campaigns. So, while it’s a close call our base case is now for the first rate cut to occur at the RBA’s May meeting. Failing that, then in June.
Will the banks pass on RBA rate cuts?
This has been an issue with all rate cuts since the GFC due to a rise in bank funding costs. But most cuts have been passed on largely or in full (the average pass through since the Nov 2011 cut has been 89%), notwithstanding out of cycle hikes. Short term funding costs have fallen lately pointing to a reversal of last year’s 0.1 to 0.15% mortgage rate hikes or at least the banks having little excuse not to pass on any RBA cuts in full.
But will more rate cuts help anyway?
Some worry that rate cuts won’t help as they cut the spending power of retirees and many of those with a mortgage just maintain their payments when rates fall. However, there are several points to note regarding this.
First, the level of household deposits in Australia at $1.1 trillion is swamped by the level of household debt at $2.4 trillion. So the household sector is a net beneficiary of lower interest rates.
Second, the responsiveness to changes in spending power for a family with a mortgage is far greater than for retirees.
Third, even if many with a mortgage just let their debt get paid off faster in response to falling rates this still provides an offset to the negative wealth effect of falling house prices, reducing pressure to cut spending.
Fourth, the fall in rates since 2011 has helped the economy keep growing as mining investment collapsed. And of course,
RBA rate cuts help push the $A lower. So, while rate cuts may not be as potent with higher household debt levels today and tighter bank lending standards, they should provide some help.
Is the RBA out of ammo?
This is a common concern around major central banks. However, they are a long way from being unable to do anything:
the Fed can reverse the 9 rate hikes seen since December 2015 and start quantitative easing again if needed; and both the ECB and Bank of Japan could expand their QE programs. The ultimate option is for central banks to provide direct financing of government spending or tax cuts using printed money. This is often referred to as “helicopter money”. Fortunately, non- traditional monetary policy has worked in the US and so at least these concerns are unlikely to need to be tested. Of course, the RBA still has plenty of scope to cut interest rates if needed (there is 150 basis points to zero) and it could still do quantitative easing if needed so it’s a long way from being out of ammo (not that we think it needs to do a lot more anyway).
Implications for investors?
There are a number of implications for investors. First, low interest rates will remain in place for some time keeping bank deposit rates unattractive. Second, given the absence of inflationary pressure, a 1994-style bond crash remains distant.
Third, the low interest rate environment means the chase for yield is likely to continue supporting commercial property, infrastructure and shares offering sustainable high dividends.
Fourth, an earlier RBA rate cut may bring forward the timing of the bottom in Australian house prices.
Finally, as can be seen in the next chart, low inflation is generally good for shares as it allows shares to trade on higher price to earnings multiples. But deflation tends to be bad for shares as it tends to go with poor growth and profits and as a result shares trade on lower PEs. The same would apply to assets like commercial property and infrastructure.
<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/2019/4/26/New%20Project%2011.jpg" alt="">
Source: Global Financial Data, Bloomberg, AMP Capital
Dr Shane Oliver is Head of Investment Strategy and Chief Economist at AMP Capital.
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soliver-smf6LQXgW9

Why is inflation such a concern for the RBA - and for us? AMP's Shane Oliver

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EXPERT OBSERVATION 
The Australian March quarter Consumer Price Index showed flat headline inflation over the quarter and annual inflation falling to 1.3%, missing expectations of a 0.2% quarter on quarter rise.
The bigger downside surprise came from weaker underlying inflation.
Underlying inflation, as measured by the trimmed mean and weighted median, averaged 0.2% over the quarter and 1.4% over the year which missed consensus expectations of 0.4% quarter on quarter and 1.7% year on year.
The RBA uses underlying inflation as the best guide to fundamental price trends in the economy because it excludes volatile price changes.
Inflation continues to track below the RBA’s 2-3% target band (see chart below) and the central bank is likely to revise down its inflation forecasts.
<img src="https://www.urban.com.au/images/2019/4/19/abs%20.png" alt="">
Source: ABS, AMP Capital
In the March quarter, the largest price rises came from the usual seasonal sources (education and medical services), a lift in motor vehicle prices and a rise in food prices (particularly vegetables). But these were offset by price falls for fuel (given a sharp decline in petrol prices) and domestic and international holiday travel (a seasonal effect). 
While the petrol price has since bounced back the lack of underlying pricing pressure in the economy is evident in pricing weakness across areas like clothing, rents, household equipment and services and communications. The weakness in underlying inflation shows that businesses are still finding it challenging to lift prices in the face of ongoing spare capacity, intense competition and weak demand.
Other measures of underlying inflation also remain very low. Inflation excluding food and energy, which is the US core measure of inflation, is running at just 1.3% year on year (in the US its running at 2% year on year) and inflation in the private sector of the economy (excluding volatile items) is at 1.4% year on year (as measured by the “market goods and services ex volatiles items” index).
Implications
The weakness in Australian inflation confirms the spare capacity remains significant in the economy. With GDP growth expected to remain low in 2019 – at around 2.3% - spare capacity and weak demand will continue to put downward pressure on prices and wages.
The March quarter inflation data missed the RBA forecasts (see chart below), which continues the trend over the past few years of the RBA overestimating inflation, and means that the central bank is likely to downgrade its inflation forecasts yet again next month. The longer inflation undershoots the 2-3% target, the greater the risk that the target will lose credibility. This in turn will see low inflation expectations become more entrenched making it in turn even harder to get inflation back to target. 
Lowering the target would be a huge mistake and would see inflation targeting lose all credibility and only lock in low inflation (and the risk of deflation) for longer.
<img src="https://www.urban.com.au/images/2019/4/19/abs%202.png" alt="">
Source: ABS, AMP Capital
We have been looking for two rate cuts this year since last December and had thought that the RBA would wait till after the election before starting to move. However, with underlying inflation coming in much weaker than expected our base case is now that the first cut will come next month, with the RBA likely to conclude that it’s too risky to wait until unemployment starts to trend up.
Shane Oliver is Head of Investment Strategy and Chief Economist AMP Capital.
Diana Mousina is an Economist at AMP Capital. 
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j.ballantyne1990-6AQqhLzZaK

RBA rate cuts imminent, probably starting in May: Shane Oliver

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EXPERT OBSERVATION 
The RBA minutes clearly indicate that they are willing to cut the cash rate and have set out the conditions that need to be fulfilled for it to occur.
We are encouraged by this new detail, and continue to believe the RBA will cut the cash rate in August and November this year.
The minutes of the April monetary policy meeting of the Reserve Bank Board have provided the clearest signal yet that the Bank would be prepared to cut the cash rate.
Firstly, the final section “Considerations for Monetary Policy” states “a lower level of interest rates could still be expected to support the economy through a depreciation of the exchange rate and via reducing required interest payments on borrowing, freeing up cash for other expenditure”.
The Board even sets out the conditions for a rate cut, “members also discussed the scenario where inflation did not move any higher and unemployment trended up, noting that a decrease in the cash rate would likely be appropriate in these circumstances”.
The Board also notes that “members agreed that there was not a strong case for a near-term adjustment in monetary policy”. We would interpret the “near-term” concept as referring to the next Board meeting in May. We do not believe that statement excludes the possibility of our target timing of August for the first rate cut.
Of course, while the Board refers to “continued strength in the labour market data and moderating GDP growth sending different signals”, it would appear that the labour market data has a higher weighting from a policy perspective.
We are somewhat perplexed by that approach, given that employment is seen to be a lagging variable, and while the lags may be longer in this cycle, we think it is reasonable that the slowdown in expenditure and income growth will eventually weigh on jobs growth.
The minutes even refer to the evidence around forward looking indicators of labour demand being mixed with job advertisements having eased but job vacancies having increased as a share of the labour force. What is unclear is whether businesses, in a climate of softening demand, actually intend filling these vacancies.
We were interested that the Governor excluded his standard growth forecast for the current year in his Statement immediately following the April Board meeting. The minutes also exclude that forecast while pointing out that the 2018 growth rate of 2.3% was “below the forecasts presented in the February Statement on Monetary Policy”.
It appears almost certain that the RBA will lower its growth forecast for 2019 from 3% (above-trend) to 2.75% (around trend). Of course, the RBA has consistently argued that growth in 2020 will be a 0.25% below 2019 due to a slowdown in the contribution to growth from LNG exports. If it is to be true to that approach then it will have to forecast growth in 2020 at 2.5% (below trend).
Traditionally, central banks which are forecasting below trend growth should at the least be adopting an easing bias.
The tension between growth and the labour market data may allow a looser interpretation of the policy stance. Certainly, the approach taken in these minutes appears to point to a bias towards lower rather than higher rates, although ongoing strength in the labour market will keep rates on hold, at least for the time being.
Further support for this ‘bias’ interpretation comes with the observation that “financial market pricing implied that the cash rate was expected to be lowered in the second half of 2019 and then again in 2020”.
While in previous commentaries, the RBA was dismissive of a significant wealth effect, or a near-term downturn in dwelling construction, these minutes are more realistic.
Weakness in consumption, is noted to be concentrated in those items that are historically most correlated with housing prices and housing turnover, and the RBA’s liaison suggested that growth in housing related consumption had remained soft in recent months.
Dwelling investment is noted to be past its peak but there is still uncertainty about how quickly dwelling investment might decline with a large amount of work still in the pipeline. Westpac expects a contraction in new dwelling investment of around 10% in 2019.
Conditions in the established housing market are noted to have remained weak in recent months, with house prices continuing to fall in Sydney, Melbourne and Perth, and even declining in most other capital cities and regional areas.
The RBA offers no forward guidance as to how far this cycle has to run. Westpac expects that this market will remain soft throughout the course of 2019 and well into 2020.
Conclusion
We have been encouraged by these minutes from the perspective of our rate cut call.
The Board has made a clear case for the benefits of lower interest rates, discounting arguments to suggest that it sees little benefit from lowering rates given the very low starting point.
The Board also lays out clearly the conditions for lowering those rates around inflation and the labour market. It appears that it has resolved the uncertainty around the conflicting signals between growth and employment by favouring the labour market.
That is disappointing for us, given that the previous policy responses have been linked to growth forecasts, although we expect that persistently slow growth should begin weigh on the labour market.
While prospects for a policy response in May have disappeared, there is still ample time and data releases to justify our timing that there will be cash rate cuts in August and November.
BILL EVANS is Chief Economist for Westpac.
You can read the full <a href="https://www.rba.gov.au/monetary-policy/rba-board-minutes/2019/2019-04-02">RBA Statement here</a>.
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bevans-rYk9SxEa4r

RBA Board minutes set out the conditions for a rate cut: Westpac's Bill Evans 

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Independent online mortgage marketplace HashChing has brought to market a conveyancing partnership that provides customers with a one stop shop solution for legal assistance on home loan settlements.
Removing one of the major pain points of property transactions, for a fixed fee, customers can be instantly partnered with experienced solicitors who specialise in real estate settlement.
HashChing is a mortgage marketplace that connects customers looking for home loan deals with experienced community rated mortgage brokers nationwide.
Since launching less than four years ago, HashChing has settled more than $1.3 billion worth of home loan applications and has helped more than 46,000 Australians get a better deal on their home loans. 
“We know that around 20% of settlements are delayed due to a conveyancer’s inefficiency and we’re tackling this problem head on,” said HashChing CEO Mandeep Sodhi. 
“We also know that many transactions are very complex and often end up requiring litigation, which is why partnering with experienced solicitors makes so much sense.”
Sodhi said research showed two out of three first home buyers did not know what conveyancing was, with nearly 40% mistakenly believing it referred to checking property boundaries or other physical matters with the property.
“Our army of community rated mortgage brokers already help Australian borrowers by dealing with banks and lenders on their behalf, and the online mortgage marketplace is now looking to streamline the legal part of the process as well.” he said.
Once a HashChing mortgage broker lodges the loan, borrowers can utilise conveyancing services and get connected to certified solicitors within minutes from their HashChing consumer portal.  
“Getting all the legal documents organised has traditionally been one of the most time-consuming and inefficient parts of buying a property.
"Borrowers are at the mercy of conveyancers, who can sometimes drag the process out unnecessarily and worse – charge more for their own delay.  
Sodhi said borrowers looking to purchase a property without an experienced solicitor were potentially gambling with hundreds of thousands of dollars. 
“By integrating a conveyancing solution into the HashChing online portal, our prices are fixed starting from $995 incl GST plus disbursements, there are no nasty surprises or hidden fees for borrowers, either,” he said.
Customers can log-in to the online dashboard at any stage to check progress of their application with the solicitor.
In addition to the real-time updates to borrower, the HashChing partner broker is also kept updated on the progress through their portal with the exact breakdown of the home loan costs that need to be lodged with the lender.  
 
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New conveyancing service to make HashChing home loan process faster

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The latest RBA minutes have noted a larger-than-expected fall in dwelling investment.
Dwelling investment appeared to have passed its peak, although there continued to be uncertainty about how quickly dwelling investment might decline over the forecast period, it noted.
Members noted financial market participants' expectations of a rate cut had been brought forward following weaker than expected data, most notably the December quarter national accounts. 
It noted financial market pricing implied that the cash rate was expected to be lowered in the second half of 2019 and then again in 2020.
The board "recognised that the effect on the economy of lower interest rates could be expected to be smaller than in the past, given the high level of household debt and the adjustment that was occurring in housing markets."
But members agreed that there was "not a strong case" for a near-term adjustment in monetary policy.
Members recognised that it was not possible to fine-tune outcomes and that holding monetary policy steady would enable the Bank to be "a source of stability and confidence."
It noted in Australia, conditions in the housing market had remained weak.
Housing prices had fallen further in the capital cities and regional areas.
Over the preceding six months, the falls had been largest in Sydney and Melbourne, but prices in these cities had remained more than 40 per cent higher than in 2012.
Falls in housing prices had resulted in some borrowers having negative equity, where the value of their loans exceeded that of their properties. Nationally, just over 2 per cent of borrowers, accounting for less than 3 per cent of housing debt, were estimated to have negative equity. Around 90 per cent of these borrowers were in Queensland, Western Australia and the Northern Territory.
Members observed that negative equity by itself was not a concern for financial stability.
"However, if unemployment were to rise and borrowers were not able to continue to make repayments, then financial institutions would incur increased losses."
Members noted that the decline in high loan-to-valuation ratio (LVR) lending in recent years was expected to lessen any losses for lenders. In recent quarters, almost all loans to investors had LVRs less than 90 per cent. By contrast, a decade earlier only 85 per cent of loans to investors had LVRs less than 90 per cent. The share of owner-occupiers with high LVR loans had also declined.
Members also noted that total household payments on housing debt as a share of income had been broadly stable in recent years.
"Within the total, however, an increase in scheduled principal repayments had roughly offset a fall in unscheduled principal repayments."
Members noted that households' excess payments amounted to about two-and-a-half years' worth of scheduled repayments on average. Housing loan interest payments had increased slightly as housing debt had increased.
Construction of new dwellings had contracted in the second half of 2018; the largest falls in the December quarter had been for apartments in New South Wales and detached housing in Queensland.
Slower housing activity had also weighed on the incomes of some building contractors and property professionals in the December quarter.
There continued to be a large amount of work in the pipeline, which should support a relatively high level of building activity in the near term.
Members noted that there had been a substantial rise in building approvals for high-density residential projects in February, although this series was volatile and in trend terms remained well below earlier peaks.
Members also noted that population growth was expected to continue to support demand for housing over the medium term.
Conditions in the established housing market had remained weak in recent months, the April minutes noted.
"Housing prices had continued to fall in Sydney, Melbourne and Perth, and had declined a little in most other capital cities and regional areas.
"In March, Sydney prices were 13 per cent below their 2017 peak and Melbourne prices were 10 per cent below their peak.
"Although auction clearance rates in Sydney and Melbourne had increased over the first quarter of 2019, they remained at relatively low levels."
Members noted that in Perth, housing prices had declined over the previous year, while the rental vacancy rate had declined sharply and there were signs that newly advertised rents were starting to increase.
By contrast, rental vacancies in Sydney had risen, particularly in suburbs where the supply of new apartments had increased significantly.
Growth in consumption had clearly slowed in the second half of 2018, it noted.
"The weakness had been concentrated in discretionary items, especially those that have historically been most correlated with housing prices and housing turnover, such as motor vehicles and home furnishings.
"Retail sales data and contacts in the Bank's liaison program suggested that growth in housing-related consumption had remained soft in recent months."
Members noted that growth in household disposable income, which is an important driver of consumption growth, had been subdued for a number of years. 
In 2018, labour income growth had been above the very low rates seen in recent years, supported by a pick-up in growth in average hourly earnings and continued employment growth, but non-labour income growth had remained weak.
The RBA members observed that tax payments by households had been growing noticeably faster than income growth in recent years, partly because of efforts to increase tax compliance.
The members discussed scenarios in which a rate cut might be needed.
"Members agreed that inflation was likely to remain low for some time," the minutes noted.
"Members also discussed the scenario where inflation did not move any higher and unemployment trended up, noting that a decrease in the cash rate would likely be appropriate in these circumstances.
"They recognised that the effect on the economy of lower interest rates could be expected to be smaller than in the past, given the high level of household debt and the adjustment that was occurring in housing markets.
"Nevertheless, a lower level of interest rates could still be expected to support the economy through a depreciation of the exchange rate and by reducing required interest payments on borrowing, freeing up cash for other expenditure."
To read the full RBA minutes, <a href="/expert-insights/finance/minutes-of-april-2019-monetary-policy-meeting-of-the-reserve-bank-board">click here</a>.
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RBA notes larger-than-expected fall in dwelling investment

jrobinson-rf4aSBido9

Minutes of April 2019 Monetary Policy Meeting of the Reserve Bank Board

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GUEST OBSERVATION
Suncorp Bank is now offering fixed home loans with some of the lowest advertised interest rates on the market.
The Brisbane-based bank’s packaged home loans for both owner-occupiers and investors have three-year fixed rates that rival most variable-rate products.
From today, the Home Package Plus Special Offer home loans offer interest rates of:
<ul type="disc">
<li>3.49% p.a. (4.24% comparison rate) for owner occupier, principal and interest borrowers</li>
<li>3.69% (4.50% comparison rate) for investment, principal and interest or interest-only borrowers</li>
</ul>
Both of these new interest rates are available for loan-to-value ratios (LVR) of up to 90% – that’s a minimum deposit of 10%.
In addition, owner occupier and investment customers can get rates as low as 3.44% and 3.64% respectively if they use Suncorp’s fast refinance (owner-occupied refinancers can also get $1,500 cashback with Suncorp).
It should be noted these are packaged home loan products, meaning borrowers would need to combine the loan with a Suncorp bank account to be eligible for the rate.
This means they come with a higher comparison rate compared to other non-packaged products, which reflects higher fees.
Suncorp’s packaged products come with a $375 package fee, but the comparison rate on the special offer products are still much lower than its non-packaged products.
Suncorp’s standard fixed owner-occupier loan, for example, has an advertised rate of 3.94% and a comparison rate of 5.43%.
On its website, Suncorp promises to waive this $375 fee in the first year.
How do these new rates compare?
These new interest rates are among the lowest on the market at the time of writing, and are a testament to the sheer number of rate drops there have been lately, particularly when it comes to fixed rates.
Big four banks Westpac and the Commonwealth Bank also began offering lower fixed home loan interest rates this week, but their new rates pale in comparison to Suncorp’s latest rates.
Commbank’s new three-year fixed package home loan for owner-occupiers offers a rate of 3.79% (4.98% comparison rate) while Westpac is offering 3.89% (4.92% comparison rate) on its three-year fixed package.
These rate cuts follow a similar move in late March, where Suncorp cut some of its other fixed-rate home loans by as much as 70 basis points.
This article was originally published on <a id="LPlnk675834" href="https://www.savings.com.au/home-loans/suncorps-new-fixed-home-loan-rates-among-the-lowest-on-the-market/" target="_blank" rel="noopener noreferrer" data-auth="NotApplicable">Savings.com.au</a>.
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Suncorp’s new fixed home loan rates among the lowest on the market

 Decline in housing prices has led to slowing consumption: RBA's Guy Debelle

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Australian prime home loan arrears rose in January, according to a recently published report by S&amp;P Global Ratings.
The Standard &amp; Poor's Performance Index (SPIN) for Australian prime mortgages rose to 1.45% in January, up from 1.38% in December.
The increase however was down from its December to January hike 12 months ago.
Mortgage arrears are generally at their peak in January, following spending over the Christmas and summer holiday months.
The Northern Territory's SPIN is the highest at 3.16%, having seen the highest increase over January (+0.39%).
Western Australia's SPIN follows, up 0.21% to 2.94%.
Click here to enlarge.
<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/2019/4/9/State-Arrears.jpg" alt="">
Tasmania was the only state to see its arrears fall in January, from 1.12% to 1.10%.
Investor loans recorded a larger increase in arrears than owner-occupier loans, rising to 1.40% in January from 1.27% in December.
Owner-occupier arrears are still higher than investor arrears. Their 0.09% rise in January took them to 1.69%.
S&amp;P suggest the increases might reflect the ongoing transition from interest-only to principal and interest repayments, which is more common for investor loans.
"We expect refinancing pressures to continue in the current environment of tightened lending conditions. High household indebtedness increases borrowers' sensitivity to changing economic conditions and interest-rate movements," the S&amp;P report stated.
"This vulnerability is greater for borrowers with weaker credit attributes, such as those with high loan-to-value ratio loans. Exposure to loans with higher credit risk is not material in most RMBS portfolios and is unlikely to put any significant pressure on arrears in the short to medium term while employment conditions remain stable.
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