Malaysian developer <a href="https://www.apartments.com.au/developers/s-p-setia">SP Setia</a> is the latest to jump into St Leonards booming Transport Oriented Development precinct.

The developer, which has previously delivered Sapphire by the Gardens apartment development in Melbourne, identified the Atchison Street site in 2023. It filed a Scoping Report around 12 months ago, and now has revealed the designs for the new&nbsp;40-storey mixed-use tower.

The State Significant Development Application covers <a href="https://next-portal.urban.com.au/projects/14650/summary">20-22 Atchison Street</a>, a 1,374 sqm site positioned between St Leonards Station and the new Crows Nest Metro station.

Designed by <a href="https://www.apartments.com.au/architects/cox-architecture">COX Architecture</a>, the project would deliver 181 apartments, above a four-storey commercial podium, five basement levels, and new public domain works along Mitchell Street. The apartment mix comprises 35 one-bedroom apartments, 39 one-bedroom-plus-study apartments, 85 two-bedroom apartments, and 22 three-bedroom residences.

The proposal has been lodged as a shop-top housing development under the NSW Government’s TOD planning pathway, which allows increased density around key transport infrastructure. The site sits within the recently rezoned Crows Nest Accelerated TOD Precinct.

<img alt="First look: SP Setia targets St Leonards skyline with 40-storey TOD tower" data-entity-type="file" data-entity-uuid="b799673d-48e2-46b0-801a-0e33a9330100" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/atchinson%20site.png?VersionId=dPh0UfwfaHpbFL1R7H1cbZNbIW0CHbCC" />

SP Setia acquired the Atchison Street site as part of its continued expansion into the Australian apartment market. In comments made to City &amp; Country (The Edge Malaysia) in 2023, SP Setia President and CEO Datuk Choong Kai Wai described the acquisition as “a strategic move” aligned with the group’s post-pandemic market recovery strategy.

“Our target for this exceptional development is local and overseas buyers, including first-home buyers, downsizers and investors,” Choong said.

The tower has been designed as a slender vertical form rising from a mixed-use podium, with COX Architecture positioning the development as a response to the evolving St Leonards and Crows Nest skyline.

“The purpose of the project is to facilitate the delivery of high-quality housing at a strategically located site and deliver a built tower outcome that is consistent with the desired future character of St Leonards and aligns with the TOD controls,” the design report stated.

<img alt="First look: SP Setia targets St Leonards skyline with 40-storey TOD tower" data-entity-type="file" data-entity-uuid="b1a85eee-76f7-436c-a6da-73ba827b9b13" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/atchinson%20entry.png?VersionId=dA9jHGPMcm.dDbwk4QfxqWiY5bfh3UVt" />

The podium would incorporate retail uses fronting Atchison Street, commercial tenancies, landscaped communal areas, and pedestrian improvements along Mitchell Street. Vehicle access and loading would be consolidated via Atchison Lane.

Residents would have access to more than 665 sqm of communal indoor and outdoor spaces, while the development proposes 96 parking spaces across five basement levels.

The proposal also includes a commitment for 10 per cent of residential floor space to be allocated toward affordable housing through a monetary contribution.

COX said the tower form responds directly to the emerging high-density character of the precinct while seeking to maximise solar access, cross ventilation, and outlook from apartments.

<img alt="First look: SP Setia targets St Leonards skyline with 40-storey TOD tower" data-entity-type="file" data-entity-uuid="2163f85c-f63b-4be3-aafa-f8763976cec5" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Article%20Feature%20Image%20%28Grid%29_5.png?VersionId=WiAmtIKJ6.ZQ41EtYEQ1fol7AeorKBlL" />

“The building is orientated towards north,” the Apartment Design Guide compliance report noted, adding that the tower’s slim form was driven by the constrained inner-urban site dimensions.

The design also incorporates landscaped setbacks and communal open space at podium level, intended to soften the interface with surrounding streets and improve pedestrian amenity.

The project adds to a growing wave of redevelopment proposals reshaping St Leonards and Crows Nest following the opening of the Sydney Metro City line and the NSW Government’s push for higher-density housing around major transport nodes.

Last week Stockland filed plans just down the road. They want to build a <a href="https://www.apartments.com.au/new-apartments/601-pacific-highway-st-leonards-nsw-2065">52-storey tower on Pacific Highway</a>.

Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/first-look-stockland-plans-52-storey-538-apartment-st-leonards-tower">First look: Stockland plans 52-storey, 538-apartment St Leonards tower&nbsp;</a>

Joel Robinson

First look: SP Setia targets St Leonards skyline with 40-storey TOD tower

<a href="https://www.apartments.com.au/developers/urban-property-group">Urban Property Group</a> has revealed plans for a new mixed-use tower at 10 Dangar Street, Wickham, advancing a proposal that would reshape the southern gateway to Newcastle’s city centre with one of the city’s tallest residential buildings.

The State Significant Development proposal, now on exhibition, seeks approval for a <a href="https://www.apartments.com.au/new-apartments/bowline-10-dangar-street-wickham-nsw-2293">43-storey tower</a> immediately adjacent to the Newcastle Interchange. The project would deliver around 200 apartments, including 42 affordable housing dwellings, alongside 99 co-living units, a 171-room hotel, retail space, and new public domain integrated through the site.

The scheme marks a significant escalation of plans previously approved for the site. Urban Property Group took over the prominent 2,904 sqm parcel, where excavation and demolition had already commenced under an earlier consent for a 14-storey mixed-use development.

<img alt="First look: Urban Property Group unveils Newcastle’s next supertower at Wickham interchange" data-entity-type="file" data-entity-uuid="58a96dd9-407f-4d20-86b4-94e4bfeef74b" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/wickham%20podium.png?VersionId=LGlf08pdFGAZDzvx_CXC4XakHNZRuEE0" />

Designed by <a href="https://www.apartments.com.au/architects/sjb-architects">SJB</a>, the tower has been conceived as a landmark transit-oriented development anchored to the Newcastle Interchange precinct. The proposal includes 245 build-to-sell apartments across a mix of one, two, and three-bedroom residences, as well as two penthouses. Fifteen apartments and one operational unit are earmarked for NDIS housing. The co-living component would add a further 99 units, while the podium would accommodate retail uses and hotel facilities.

SJB said the site presents “a valuable opportunity to anchor the precinct by setting the standard for design, active ground planes and character at the key southern gateway.”

The architecture responds directly to the site’s position beside major transport infrastructure and within one of Newcastle’s fastest-evolving urban renewal precincts. The tower form sits above a sculpted podium designed to frame new public spaces, including a through-site pedestrian link connecting Station Street to Hannell Street, landscaped plazas, and activated retail edges.

<img alt="First look: Urban Property Group unveils Newcastle’s next supertower at Wickham interchange" data-entity-type="file" data-entity-uuid="a7bd6ff0-f7db-4ce8-a6dc-ea56e72c6149" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/wickham%20lanne.png?VersionId=xzf39VADyhj7zBQY2I9fx9vI62u2tuSb" />

The design report describes the project as part of the broader transition of Wickham into “a vibrant, high-quality mixed-use urban precinct” that leverages proximity to the station, open space, and regional connectivity.

A detailed public art strategy has also been prepared for the development. The strategy positions the project as “a transit-oriented development of state significance at the gateway to Newcastle’s city centre” and outlines a series of integrated artworks responding to Newcastle’s industrial and transport heritage.

Creative Road’s curatorial framework for the project, titled Unveil, draws on “stratified surfaces, carved volumes, and light-filled apertures” while referencing Newcastle’s transformation from an industrial city into a contemporary education and technology hub.

<img alt="First look: Urban Property Group unveils Newcastle’s next supertower at Wickham interchange" data-entity-type="file" data-entity-uuid="77a882bb-14b1-4d28-99ff-9438e39508c0" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/wickham%20site.png?VersionId=cevgo_vN0eKPK78P8YcEu3mKPLkpFqE7" />

The proposal is being advanced through the NSW Housing Delivery Authority pathway after being declared State Significant Development in June 2025. The accompanying scoping report states the development aims to “maximise the site’s proximity to the Newcastle Interchange by delivering transit-oriented development” while increasing housing supply and affordable housing provision within the Newcastle LGA.

Urban Property Group’s plans align with the long-term strategic vision established under the Wickham Master Plan, which identified the interchange precinct as suitable for substantial uplift in height and density. The current proposal would significantly intensify that vision, positioning the tower among the tallest developments proposed for Newcastle.

The site sits immediately north of the Newcastle Interchange, bounded by Dangar Street, Hannell Street, and Charles Street. It is surrounded by a rapidly growing cluster of residential towers and mixed-use projects that have emerged following the completion of the light rail and transport interchange.

First look: Urban Property Group unveils Newcastle’s latest tower at Wickham interchange

Bottega House has completed settlement of a landmark riverfront site in Macquarie Street, St Lucia, representing its first major Brisbane development.&nbsp;

Positioned on the banks of the Brisbane River, the <a href="https://www.apartments.com.au/new-apartments/180-macquarie-street-st-lucia-qld-4067">premium site at 180 Macquarie Street</a> features uninterrupted river frontage in one of Brisbane’s most tightly held residential precincts.&nbsp;

The proposed development, currently under assessment with Brisbane City Council, has been designed by <a href="https://www.apartments.com.au/architects/plus-studio">Plus Studio</a> with interiors by <a href="https://www.apartments.com.au/interior-designers/mim-design">Mim Design</a> and will deliver a boutique collection of premium residences positioned specifically for owner occupiers and downsizers.&nbsp;

The residences are set to redefine luxury apartment living in the area, with a focus on architectural quality, refined finishes, landscape integration and elevated amenities including curated wellness facilities, resort-style pools and recreation spaces rarely seen in the local market.&nbsp;

Exclusive sales for the project will be led by Keenan &amp; Byrne, ahead of an anticipated launch later this year.&nbsp;

Bottega House Managing Director Nick Malloch said the project reflects the group’s ambition to deliver a highly curated residential offering within one of Brisbane’s most tightly held precincts.&nbsp;

“This is an incredibly rare riverfront opportunity and one we have approached with a long-term perspective,” Malloch said.&nbsp;

“Our vision from the outset was to create a boutique collection of residences that feel more like private homes than traditional apartments, with generous proportions, refined finishes and exceptional amenity throughout."

Malloch says there is a&nbsp;lack of premium owner-occupier stock of this quality in the market, particularly for downsizers wanting space, privacy and a true lifestyle offering without compromise.&nbsp;

"Demand is expected to be strong given the scarcity of premium riverfront opportunities of this nature within Brisbane’s inner-west."&nbsp;

Bottega House secures landmark riverfront site in St Lucia 

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The arrival of the first piling rig officially marks the commencement of construction at SIERA’s new beachside apartment development, Exhale, in Northcliffe.

<a href="https://www.apartments.com.au/new-apartments/exhale-surfers-paradise-8-enderley-avenue-surfers-paradise-qld-4217">Exhale</a>, a glass-encased tower featuring 54 large-scale apartments at 8 Enderley Avenue, is SIERA’s third Gold Coast development. It follows the recently completed PIPIS Bilinga beachfront project, which achieved suburb-record prices, and the soon-to-be-completed Chevron Island development, Tapestry.

[smartcode_project:default project_id=112661 project_image_fid=359603]

<a href="https://www.apartments.com.au/developers/siera">SIERA</a> Founder and Managing Director Brent Thompson said the arrival of the piling rig represented a significant milestone for the development, which is scheduled for completion in late 2028.

Over the next month, around 260 piles are expected to be installed as work progresses on the basement structure. The building is anticipated to rise above ground level early next year, before unveiling its sculptural glass curtain wall, developed in collaboration with specialist façade engineers.

“The façade was designed to maximise panoramic coastal views while creating a distinctive architectural identity,” Thompson said.

[smartcode_project:default project_id=112661 project_image_fid=355935]

Designed by BDA Architecture, Exhale will comprise just 54 two- and three-bedroom residences across 26 levels, a level of low-density living rarely delivered in this beachside pocket between Surfers Paradise and Broadbeach.

The project has been conceived as a resident-only building, with no short-stay accommodation permitted. SIERA says the model is intended to appeal to long-term owner-occupiers rather than transient holiday demand.

[smartcode_project:default project_id=112661 project_image_fid=361052]

Residences have been designed with large-format layouts and expansive glazing, with most apartments featuring more than 30 metres of glass frontage to maximise natural light and ocean views.

The amenity offering spans two levels and centres on wellness and lifestyle, including a heated magnesium pool, sauna, yoga and Pilates studio, gymnasium, private dining facilities, cinema lounge, and dedicated surfcraft storage.

[smartcode_project:default project_id=112661 project_image_fid=359607]

More than half of the apartments have already sold. SIERA has also opened a sales gallery for Exhale at its Chevron Island commercial premises, near its Tapestry tower and the site of its second Chevron Island apartment development, which is slated to launch in early 2027.
</section>
</section>

[smartcode_project_cta:default project_id=112661]

SIERA kicks off construction at Northcliffe tower Exhale

Local Little Bay residents, along with buyers from premium postcodes across Sydney’s affluent Eastern Suburbs, have dominated purchases in developer-builder Urban Property Group’s first Eastern Suburbs apartment development, <a href="https://www.apartments.com.au/new-apartments/este-little-bay-jennifer-street-little-bay-nsw-2036">ESTE Little Bay</a>.

The $250 million coastal project, one of the first new developments in the area in several years, has proven particularly popular with downsizers, especially those from Coogee and Bondi. One Double Bay downsizer paid $4.7 million for a four-bedroom penthouse, setting a new local apartment price record in the process.

Buyers have been attracted to the combination of coastal tranquillity, premium design and amenity-rich neighbourhood living. The walkable village setting, along with proximity to three of Sydney’s leading golf courses, New South Wales Golf Club, St Michael’s Golf Club and The Coast Golf Club, has also been a key drawcard.

[smartcode_project:default project_id=112343 project_image_fid=352689]

Built across two low-rise buildings designed by <a href="https://www.apartments.com.au/architects/hill-thalis-architecture-urban-projects-pty-ltd">Hill Thalis</a> and set along a lush, landscaped green spine, designed by leading landscape architect <a href="https://www.apartments.com.au/landscape-architect/arcadia-landscape-architecture">Arcadia</a>, ESTE Little Bay offers a collection of one, two, three and four-bedroom residences with interiors by Richards Stanisich.

<a href="https://www.apartments.com.au/developers/urban-property-group">Urban Property Group</a> Sales Director, Tom McIvor said the response to ESTE has been "nothing short of extraordinary."

“Buyers have been quick to recognise ESTE as a rare opportunity to invest in a coastal sanctuary that offers both seclusion and connectivity to the heart of Sydney,” McIvor said.

[smartcode_project:default project_id=112343 project_image_fid=352687]

<a href="https://www.apartments.com.au/project-marketer/srm-residential">SRM Residential</a> Senior Director, <a href="https://www.apartments.com.au/project-marketer/srm-residential">Clayton Ross</a> said the local market has responded incredibly well, driven by ESTE’s exceptional location and the rarity it offers.

“We’ve seen strong interest from a variety of buyer groups, all of whom are drawn to the exclusivity and quality of the build and construction by the 4.5-star iCIRT-rated builder / developer, Urban Property Group. There’s truly nothing else like it along Sydney’s coastline.”

[smartcode_project:default project_id=112343 project_image_fid=352690]

The project also includes robust buyer protections, including Resilience Insurance’s Latent Defects Insurance, providing 10 years of structural cover, and an independent iCIRT-rating of the developer.

“The iCIRT-rating adds another layer of confidence,” Ross added. “Buyers see it as a safeguard for their investment and their lifestyle.” A highlight of ESTE’s offering is its exclusive wellness amenities, including a heated rooftop infinity pool and outdoor heated spa, a state-of-the-art Technogym fitness centre, and a sauna.

<a href="https://www.apartments.com.au/new-apartments/este-little-bay-jennifer-street-little-bay-nsw-2036">ESTE Little Bay</a> is topped out and is on track to complete towards the end of 2026, with residents moving in before Christmas.

[smartcode_project_cta:default project_id=112343]

Eastern Suburbs buyers snap up ESTE Little Bay apartments

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

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

NAB bring forward first RBA cut to February 2025

<html><body>
Westpac has raised its home loan interest rates, soon after NAB announced similar hikes, with both banks citing increasing funding costs.
But the banks are also reacting to heightened regulatory concerns as to the pace of lending.
Today ASIC chairman Greg Medcraft said he had "been saying for a while that I thought it was a bubble and other people are catching up now." 
<div>
"Its Sydney and Melbourne [where prices are rising] so I think macroprudential are useful tools."
He said there were two aspects to macroprudential policies - the "prudential" aspect which impacts capital and the "conduct" aspect which regulated responsible lending.
</div>
<div>Medcraft said ASIC had played an active role with regard to conduct citing ASIC's report on mortgage broking and on interest only loans. </div>
The country’s second-largest bank said variable home loan rate for owner occupiers will increase by 0.03 percent to 5.32 percent per annum for customers with principal and interest repayments.
For owner occupiers on a variable home loan rate and interest-only repayments, there is a 0.08 percent increase to 5.49 percent per annum. The new rates come into effect on March 24.
For investors, the increases are higher with variable loan rate rising by 0.23 percent to 5.79 percent per annum for principal and interest repayments, while for interest only repayments, the increase is 0.28 percent to 5.96 percent per annum. 
The rate hike was because of a economic and regulatory factors, said George Frazis, chief executive of Westpac Consumer Bank.
“Today’s changes are in response to increasing funding costs. Despite home loan interest rates being at historically low levels, both deposits and wholesale funding of mortgages have increased over the last nine months,” he said.
 “We understand the significance of interest rate changes to our home loan customers, so we take a very careful approach to these decisions.”   
Customers with interest only home loans who wish to move to principal and interest repayments can do so without paying a switching fee until 17 June 17, 2017.
Variable lending products for small businesses will also increase by 0.08 percent from April 3, the bank said.
Late last week, National Australia Bank lifted home loan rates by as much as a quarter of a percentage point, citing rising funding costs and increased regulation.
NAB raised its rates for owner-occupiers from 5.25 percent to 5.32 percent while for investors, it is now 5.8 percent from 5.55 percent previously. 
   
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jonathanchancellor-7SQnKwU6yx

Westpac follows NAB in raising home loan interest rates

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A real estate salesman in Western Australia has been banned for 15 years from the industry after being found guilty of fraudulent property deals which netted a profit of $5.4 million.
The State Administrative Tribunal (SAT) found Paul Anthony King guilty of 13 breaches of the code of conduct while working as a sales representative for his father’s real estate agency Colin King Real Estate, based in York.
It was operated by The King and I Pty Ltd.
Both Colin and Paul King were ordered to jointly pay $39,000 in costs incurred by Consumer Protection to prosecute them. The SAT did not have jurisdiction to impose a penalty against Colin King and The King and I Pty Ltd as their licences were not renewed by Consumer Protection in August 2014.
The sale of five lots of land occurred between 2008 and 2010 with Colin and Paul King acting as selling agents for three of them and introducing the ultimate buyers in each sale. The lots were first sold to an intermediary company controlled by another of Colin’s sons Michael King who was not a licensed real estate agent or sales representative.
The land lots were then immediately on-sold to Malaysian-based investors at substantially higher prices resulting in a $5.4 million profit that directly benefited Michael King. The original owners and the Malaysian-based investors were not aware of the on-sale arrangements.
The SAT found that the deal resulted in a significant loss to the original owners and Paul King’s ‘extremely dishonest and deceitful’ conduct was at the upper end of the range of seriousness. He had placed his own interests and the interests of related parties ahead of his principal by concealing from the sellers the existence of another buyer willing to pay a premium for the land. The tribunal said his misleading conduct was a fundamental breach of his duty.
The SAT added that Paul King was deliberately untruthful and his evidence was not credible as he sought to minimise his involvement in the deal to conceal his conduct from the tribunal, described as ‘calculated and sustained dishonesty’.
Acting commissioner for Consumer Protection David Hillyard said the long-term ban reflected the serious nature of the deceptive conduct.
“Paul King failed to act in the best interests of the sellers and the purchaser who became unknowingly involved in a fabricated on-sale scheme which was designed to ensure an intermediary company owned by his brother Michael made massive profits from the sales,” Hillyard said.
“The now proven involvement of his father Colin King in such a web of deceit has vindicated our action in August 2014 not to renew his licence, a decision upheld by the SAT last year.
“The fundamental obligations of the real estate industry’s codes of conduct require agents and sales representatives to act honestly, fairly and in the best interests of their clients at all times and this SAT order shows that there are serious consequences for anyone who breaches those obligations.”
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WA real estate agent gets 15-year-ban for land deal scam

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Nearly $30 million was paid to 1,347 customers who suffered losses after they were misled by financial advisers, while the securities watchdog banned 26 advisers for misconduct as of December 2016. 
These are the findings from a review by the Australian Securities and Investment Commission of how Australia's largest financial advice firms have dealt with past poor advice and non­-compliant advisers, including how these firms have dealt with affected customers. 
The review, which forms part of ASIC’s broader Wealth Management Project, was focussed on the conduct of the financial advice arms of AMP, ANZ, CBA, NAB and Westpac.
ASIC deputy chairman Peter Kell said the report, “sets out the significant work that has been done by the major financial advice institutions to implement large­-scale review and remediation programs to identify and remediate customers impacted by poor advice given in the past”. 
The review looked at: 
<ul>
<li>how the firms identified and dealt with non­compliant conduct by their advisers between 1 January 2009 and 30 June 2015</li>
<li>the development and implementation by the firms of large­-scale review and remediation frameworks to remediate customers impacted by non­compliant advice, and </li>
<li>the processes used to monitor and supervise the firms' advisers, focussing on background and reference ­checking, the adviser audit process and use of data analytics. </li>
</ul>
ASIC Report 515 Financial advice: Review of how large institutions oversee their advisers (REP 515) covers the key findings of this review.
He said that while financial advice institutions had done much to improve their practices and compliance, more work was needed to re­build consumer trust in the financial advice industry.
ASIC has identified a number of areas of concern where further improvements need to be made, including: 
<ul>
<li>failure to notify ASIC about serious non­compliance concerns regarding adviser conduct</li>
<li>significant delays between the institution first becoming aware of the misconduct and reporting it to ASIC</li>
<li>inadequate background and reference-­checking processes, and</li>
<li>inadequate audit processes to assess whether the advice complied with the 'best interest' duty and other obligations. </li>
</ul>
“It is critical that customers are able to get financial advice they can trust. ASIC expects internal processes to support core values of putting the customer first and where there are failings, for advice firms to act quickly to provide a response in the interests of their customers. This is a message for both large and small advice firms,” Kell said. 
“Strengthening breach reporting requirements will be an important issue in the current review of ASIC's enforcement powers announced by Government in October 2016,” he said. 
The Australian Bankers' Association's recently announced a Reference Checking and Information Sharing Protocol, that takes a more rigorous approach to checking and provision of adviser references. Financial institutions regularly use data analytics now to detect irregularities early and take action.
 
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prateek24-ezbwHMbNAk

ASIC says $30 million paid to customers misled by wrong advice in its review of financial institutions

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Three rate hikes of even 25 basis points by the central bank could deliver a bigger increase in debt-servicing costs for households than 10-11 rate hikes did in the mid-1990s, according to Macquarie Bank’s head of economic research, whose analysis adds to the debate on the impact of the economy in the event of a housing market crash.
Macquarie Bank’s James McIntyre found after studying previous tightening cycles in the mid 1990s and turn of the century, the first of which involved 11 quarter-point hikes, that the subsequent surge in households' debt servicing ratio -- interest costs as a portion of disposable income -- would be achieved with less than a third of those hikes today, thanks to record high private debt levels, Bloomberg reported.
McIntyre, however, doesn't expect a rate increase until early 2019 when core inflation is likely back inside its 2 percent to 3 percent target.
"The RBA's reticence about further increases in household debt-to-income ratios is clear when you begin to consider how potent interest-rate rises might be from a debt-servicing perspective,'' McIntyre was cited by Bloomberg as saying.
“At the current level of debt-to-income, we estimate that three to four 25 basis-point rate hikes would deliver a bigger increase in debt-servicing costs for households than 10 to 11 rate hikes did in the mid-1990s.''
He said the other difference between the periods is a wider spread between the cash rate and lenders' mortgage rates: from 180 basis points to about 375 basis points. Current households' debt levels are at a record 187 percent of income and a one percentage point increase in the RBA's cash rate would, excluding further increases in lenders' borrowing rates, push the household debt servicing ratio beyond 10 per cent,  the analysis found.
RBA Governor recently sounded an alarm, saying inflation will only rise slowly but the combination of record high household debt to income when wages were growing slowly was a “sobering combination”.
Even the OECD said recently that a potential hard landing in the property market could morph into a recession fuelled by record high household debt.
<a href="https://www.propertyobserver.com.au/images/2017/03/17/700_bloomberg.jpg" target="_blank">Click to enlarge</a>
<div><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/2017/03/17/700_bloomberg.jpg" alt=""></div>
<div>
SOURCE BLOOMBERG 
<div id="adspot-300x250-pos3"> </div>
<div>The Bloomberg article cites a hypothetical scenario where the Federal Reserve turns aggressive in lifting rates, the Australian dollar tumbles, and the RBA seeks to tame a subsequent boost in inflation with monetary policy: too much household debt would pose a risk of the central bank crushing the economy with the hit from rate rises.</div>
<div> </div>
<div>Frontier Advisors, a consultancy for institutional investors, similarly said this week that while household debt serviceability is currently manageable given the record low rates, the risk is when they increase.</div>
<div>
It analysis found that Australian house prices are 15 to 20 per cent overvalued, and that a rate rise of more than 1.5 per cent would imply a higher level of overvaluation -- at which point a correction would become more likely. The Melbourne-based consultant said it doesn't expect a house price collapse.
"Given the sensitivity of the housing market to monetary policy, this is likely to provide a cap on how high interest rates will rise,'' said Chris Trevillyan, director of capital markets and asset allocation research at Frontier.
"The RBA will avoid triggering the kind of house price collapse that will have a major impact on bank capital.''
</div>
</div>
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j.ballantyne1990-6AQqhLzZaK

Future RBA rate hikes' impact likely far greater than previous cycles: Macquarie economist

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The NAB will increase its standard variable rate for owner-occupiers and investor property loans.
The standard variable rate for owner-occupiers will increase from 5.25 percent to 5.32 percent.
Investor property loans will increase from 5.5 percent to 5.80 percent. 
The standard variable rate increase may add an extra $13 a month on a $300,000 principal and interest mortgage.
The increase came after the US Federal Reserve increased its key interest rate.
Prime Minister Malcolm Turnbull told Network Seven the increase by NAB is certainly not welcome.
"But as you know, the banks obviously have to manage their own affairs, and they have funding costs," he said.
In the NAB's March Global &amp; Australian Economic Perspective report, group chief economist Alan Oster noted the RBA is becoming increasingly focused on financial stability considerations, particularly household balance sheets in the context of a re-acceleration in house price growth in Sydney and Melbourne amidst elevated levels of household debt. 
"Recent comments from RBA officials raise the possibility that macro-prudential measures may be stepped up and we now consider a further rate cut as unlikely in this environment," he said.
"We have removed our expectation of a 25bp rate cut in late 2017, although continue to flag the risk of further monetary policy easing at some point given our concerns about economic growth and the labour market in 2018.
"As a result of our RBA view change, we are revising up our 2018 AUD/USD forecast slightly while maintaining our 0.70 end-2017 projection. A weaker AUD is still likely on a combination of further US interest rate-driven US dollar strength, lower commodity prices and potentially some deterioration in risk sentiment from current elevated levels. 
"Dwelling investment increased 1.2 percent in Q4, although that only partly unwound the Q3 decline – a subdued result given the anticipated rebound from temporary weather-related disruptions and the record level of construction projects in the pipeline.
"There are, however, signs that the contribution of dwelling investment to economic growth may soon peak.
"New medium-density approvals have come off sharply from their highs, although they are still at elevated levels (especially in Victoria). Meanwhile, housing markets in Sydney and Melbourne continue to defy belief in 2017, with property prices showing no signs of slowing despite tightening credit conditions and concerns about affordability."
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NAB hikes rates for owner-occupiers, property investors

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Australian housing market turnover - the RBA's nine chart insights

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Even if the Reserve Bank of Australia keeps the cash rate steady, a JPMorgan Mortgage Industry Report has warned young property investors who are "materially dependent" on income generated from renting their property could face higher rates in the coming years.
It will occur as banks respond to global regulatory changes that will require them to hold higher levels of capital against such loans.
The report published by JPMorgan says Basel 4 will require banks to hold up to five times the amount of capital against investor loans materially dependent on rental income to repay the loan.
It was speculated this could lead to interest rates for loans to investors with deposits of less than 20 per cent rising 3 percentage points, lifting from the present rate of about 4.5 per cent to 7.5 per cent.
The international Basel 4 reforms, which are expected to be finalised soon and adopted in Australia in the coming years, require banks to carry capital based on loan-to-value (LVR) ratios rather than the probability that a loan will default.
So far the definition of "materially dependency" has been left vague by the Basel committee. According to analysis by JPMorgan and Digital Finance Analytics, property investors have already been hit by higher interest rates as banks try to avoid running into investor loan growth caps of 10 per cent imposed by the prudential regulator in late 2014.Since mid 2015, investor and interest-only loans had increased an average of 65 basis points.
JPMorgan analyst Scott Manning said these increases were just the beginning.
"We think the repricing we have seen to date ... is purely a toe in the water, [with banks] testing the elasticity of the market [and] the response from brokers and politicians," he told The Australian Financial Review.
There is a lot more pricing differential to come through the market ... [and] we can definitely see the prospects for significant amounts of refinancing."
It is tipped ANZ Banking Group would be the biggest beneficiary among the major banks of Basel 4, because it has the lowest market share and slowest growth rate for investor lending. The report co-author Digital Finance Analytics' Martin North noted banks do not necessary capture all expenditures that households have.
"There is more work to be done to capture the cost of living in households.
"Even with a small rate rise, more than 50 per cent [of investors in this categories] will struggle if there is a small rise in rates say up to 3 percent."
North warned the Australian investor market was "growing way too quickly" despite the 10 percent growth rate cap imposed by APRA
.
<div class="cq-article-content-paras section">
 
</div>
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JP Morgan warn low deposit property investors on looming Basel 4 impacts 

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The RBA’s increased focus on financial stability, particularly record high household debts amid rising housing prices will likely keep the central bank from further rate cuts in 2017, according to a recent report by the NAB.
Recent comments from RBA officials raise the possibility that “macro-prudential measures may be stepped up” and a further rate cut is unlikely anytime soon, said the Forward View – Australia,  report for March by NAB Group Economics.
“We have removed our expectation of a 25bp rate cut in late 2017, although continue to flag the risk of further monetary policy easing at some point given our concerns about economic growth and the labour market in 2018,” it said.
It said the property markets in Sydney and Melbourne “continue to defy belief in 2017, with property prices showing no real signs of slowing despite tightening credit conditions and concerns about affordability”.
<a href="https://www.propertyobserver.com.au/images/2017/03/15/NABHousingPrices.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/03/15/NABHousingPrices.png" alt="">
The report said the economy’s contraction in Q3 was only a temporary setback as it bounced back in Q4 with broad-based growth amid higher commodity prices.
But labour income continued to be weak, a fact pointed to recently by RBA Governor Philip Lowe who said that low wages growth and record high household debt are a sobering combination.
The report said housing finance has remained strong, especially for investors. Auction volumes are also solid, and auction clearance rates are up from the levels seen at the same time last year – suggesting the markets remain tight. 
<a href="https://www.propertyobserver.com.au/images/2017/03/15/NABAuctionClearance.png" target="_blank">Click to enlarge</a>
 <img src="https://www.urban.com.au/images/2017/03/15/NABAuctionClearance.png" alt="">
Elsewhere, price movements were relatively mixed in February, but the trends have generally been fairly positive in most markets. 
“Even Perth prices have been showing signs of stabilisation,” it said.
NAB says recent government measures to ease housing affordability, especially for first home buyers (FHB’s), could actually push prices higher.
The Victorian government recently announced stamp duty cuts for house sales under $600,000.
It said government measures along with the “the surprising momentum could suggest some further upside risk to our price forecasts”. 
Although, no further rate cuts would offset it to some extent. 
The research said it was leaving “our property price forecasts unchanged. Our national forecasts for 2017 are 3.4 percent for houses and 0.8 percent for units.”
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NAB drops rate cut forecast for 2017 

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RBA Assistant Governor Michele Bullock has sounded a caveat, saying the essence of macroprudential policy lay in recognising potential system-wide risks and reacting accordingly, implying the bank and APRA could further tighten lending rules to contain buildup of potential risks from a runaway housing market.
“We are continuing to monitor their ongoing effects and are prepared to do more if needed,” she said at a speech during an event organised by financial news service Bloomberg.
Her speech ‘Has the way we look at financial stability changed since the GFC?’ looked at the history of the RBA’s role since it was formed to the way it monitors the financial system now in the aftermath of the global financial crisis in 2008.
“At the big picture level, the way we look at it hasn't changed that much. But we are even more attuned to the tail risks than we were and more attuned to the need to take action if we sense that the risks are building,” she said.
Her words come amid concerns of property prices picking up sharply and the steps taken by the Australian Prudential Regulation Authority to cap investor lending not having the desired effect after an initial slowing of growth.
The OECD recently warned that a crash in Australia’s housing market could plunge the country into depression.
She stated that the central bank’s mandate was “to ensure that financial disturbances in any part of the financial system do not ultimately threaten the health of the economy”. 
Coming back to the question at how GFC has changed its outlook towards financial stability, Bullock said, “It hasn't fundamentally changed the way think about financial system stability, though we now have a deeper understanding of the nature of the risks and the potential channels of contagion.” 
She added that the bank had “also built significant capacity to better monitor risks both in the banking and non-bank sectors”.
“The experience with losses in commercial property in the late 1980s, the collapse of HIH in 2001 and the housing boom in the early 2000s perhaps made Australian regulators a little more circumspect. APRA had therefore maintained a strong supervisory focus on the Australian financial institutions.”
She cited that APRA reacted to the risks that were building in the housing market in 2014, especially from investment lending, but putting in place an annual 10 percent cap on growth in investment lending for banks.
“There was very strong demand for residential housing loans, particularly by investors. Price competition in the mortgage market had intensified and discounts on advertised variable rates were common. There also seemed to be a relaxation in non-price lending terms. The share of new loans that were interest only was drifting up and the growth of lending for investment properties was accelerating. Unsurprisingly in this environment, the growth in housing prices was strong, particularly in Melbourne and Sydney.”
“The regulators judged that more targeted action was needed to address the risks – to put a bit of sand in the gears.” 
“So APRA indicated that it would be alert to annual growth in a bank's investor housing lending above a benchmark of 10 per cent. It also set some more prescriptive guidelines for serviceability assessments and intensified its scrutiny of lending practices.”
“ASIC also undertook a review of lending with a focus on whether lenders were complying with responsible lending obligations.”
But while the measures worked for a time, “the resilience of both borrowers and lenders has no doubt improved…” and “the initial effects on credit and some other indicators we use to assess risk may fade over time.”
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Bullock says RBA 'prepared to do more' to curb risks in housing market

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<h1 class="page-title">Statement by Philip Lowe, Governor: Monetary Policy Decision</h1>
At its meeting today, the Board decided to leave the cash rate unchanged at 1.50 per cent.
Conditions in the global economy have continued to improve over recent months. Business and consumer confidence have both picked up. Above-trend growth is expected in a number of advanced economies, although uncertainties remain. In China, growth is being supported by higher spending on infrastructure and property construction. This composition of growth and the rapid increase in borrowing mean that the medium-term risks to Chinese growth remain. The improvement in the global economy has contributed to higher commodity prices, which are providing a significant boost to Australia's national income.
Headline inflation rates have moved higher in most countries, partly reflecting the higher commodity prices. Long-term bond yields are higher than last year, although in a historical context they remain low. Interest rates are expected to increase further in the United States and there is no longer an expectation of additional monetary easing in other major economies. Financial markets have been functioning effectively and stock markets have mostly risen.
The Australian economy is continuing its transition following the end of the mining investment boom, expanding by around 2½ per cent in 2016. Exports have risen strongly and non-mining business investment has risen over the past year. Most measures of business and consumer confidence are at, or above, average. Consumption growth was stronger towards the end of the year, although growth in household income remains low.
The outlook continues to be supported by the low level of interest rates. Financial institutions remain in a good position to lend. The depreciation of the exchange rate since 2013 has also assisted the economy in its transition following the mining investment boom. An appreciating exchange rate would complicate this adjustment.
Labour market indicators continue to be mixed and there is considerable variation in employment outcomes across the country. The unemployment rate has been steady at around 5¾ per cent over the past year, with employment growth concentrated in part-time jobs. The forward-looking indicators point to continued expansion in employment over the period ahead.
Inflation remains quite low. With growth in labour costs remaining subdued, underlying inflation is likely to stay low for some time. Headline inflation is expected to pick up over the course of 2017 to be above 2 per cent, with the rise in underlying inflation expected to be a bit more gradual.
Conditions in the housing market vary considerably around the country. In some markets, conditions are strong and prices are rising briskly. In other markets, prices are declining. In the eastern capital cities, a considerable additional supply of apartments is scheduled to come on stream over the next couple of years. Growth in rents is the slowest for two decades. Borrowing for housing by investors has picked up over recent months. Supervisory measures have contributed to some strengthening of lending standards.
Taking account of the available information the Board judged that holding the stance of policy unchanged at this meeting would be consistent with sustainable growth in the economy and achieving the inflation target over time.
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