<p>Roseville is poised for a wave of new apartment development following the NSW Government's rezoning of land around Roseville Station under its Transport Oriented Development program.</p>

<p>The new planning controls have unlocked significant development potential within walking distance of the station, with a number of sites expected to be amalgamated and redeveloped in the coming years as developers seek to take advantage of the increased density allowances.</p>

<p>One of the more restrained developments in the precinct, and set among the first to be delivered having commenced well before the recent changes, is Hyecorp's Juliet. The boutique apartment project is already well under construction and remains on track to welcome residents by the end of the year, offering a markedly different proposition to many of the larger-scale developments now likely to emerge across the suburb.</p>

<p>[smartcode_project:default project_id=7395 project_image_fid=278194]</p>

<p><a href="https://www.apartments.com.au/new-apartments/juliet-roseville-64-pacific-highway-roseville-nsw-2069">Juliet</a> will comprise just&nbsp;34 one-, two-, and three-bedroom apartments opposite Roseville Station. For Hyecorp, which has delivered projects across Sydney's Lower North Shore for more than three decades, Roseville presented a rare opportunity to address a growing gap in the market.</p>

<p>"<a href="https://www.apartments.com.au/developments/roseville-nsw-2069">Roseville</a> has long been one of the North Shore's most tightly held and desirable suburbs, offering a unique combination of village charm, established greenery, excellent transport connections, and proximity to some of Sydney's best schools and lifestyle amenities," Hyecorp said.</p>

<p>"We recognised a growing demand from local homeowners seeking to downsize without leaving the community they have built their lives around. The location presented a rare opportunity to create homes that cater specifically to that buyer profile."</p>

<p>[smartcode_project:default project_id=7395 project_image_fid=278196]</p>

<p>The six-level development has been designed by <a href="https://www.apartments.com.au/architects/pbd-architects">PBD Architects</a> as a collection of residences that feel more like homes than apartments. The brief centred generous floorplans, abundant natural light, quality finishes, and strong connections to outdoor space.</p>

<p>PBD Architects drew inspiration from Roseville's established garden suburb character, creating a building that sits comfortably within its surroundings rather than dominating them. The architecture incorporates natural materials, soft forms, layered landscaping, expansive balconies, and generous setbacks to strengthen the connection between residents and the suburb's leafy environment.</p>

<p>"The focus was on designing spacious, house-like residences for discerning owner-occupiers and downsizers who wanted to remain on the North Shore without compromising on comfort, privacy, or design," PBD said.&nbsp;</p>

<p>"Every apartment was to feel considered, timeless, and highly functional."</p>

<p>[smartcode_project:default project_id=7395 project_image_fid=278195]</p>

<p>Inside, residences feature engineered timber flooring, stone kitchen benchtops and splashbacks, integrated Fisher &amp; Paykel appliances, ducted air conditioning, and large outdoor entertaining areas designed to take advantage of district and treetop views.</p>

<p>Residents will also have access to a rooftop barbecue and lounge area, alongside practical amenities including parcel lockers, EV charging capability, bicycle storage, a dog wash bay, and a basement car wash facility.</p>

<p>The majority of purchasers so far have been local owner-occupiers from Roseville, Lindfield, Chatswood, Killara, and the broader Upper North Shore, many of whom are transitioning from larger family homes.</p>

<p>"Buyers are looking for spacious, house-like apartments that allow them to downsize without feeling like they are sacrificing comfort or functionality," Hyecorp noted.</p>

<p>"They value large kitchens, generous living areas, ample storage, quality finishes, secure parking, lift access, and low-maintenance living."</p>

<p>[smartcode_project:default project_id=7395 project_image_fid=278204]</p>

<p>Juliet sits directly opposite Roseville Train Station and within walking distance of Roseville Village, while Chatswood's retail and dining precinct is only minutes away. The development is also surrounded by some of Sydney's most established schools, including Roseville College, Ravenswood, Pymble Ladies' College, and Knox Grammar, as well as nearby parklands and golf courses.</p>

<p>Juliet is currently more than 75 per cent sold ahead of its anticipated completion in late 2026.</p>

<p>[smartcode_project_cta:default project_id=7395]</p>


Joel Robinson

Juliet to sit quietly amid Roseville apartment boom

<p>Sherpa Property Group has unveiled the third instalment of its Flourish series, securing full approval for the two-tower, $500 million Flourish Soleira development in Palm Beach.</p>

<p><a href="https://www.apartments.com.au/new-apartments/flourish-soleira-1150-1154-gold-coast-highway-palm-beach-qld-4221">Flourish Soleira</a> will rise from a prominent site in the commercial heart of Palm Beach, the long-time home of Cash Converters and a range of local retailers.</p>

<p>The project will introduce a new retail and dining precinct at ground level, beneath 286 apartments.</p>

<p>[smartcode_project:default project_id=150017 project_image_fid=370959]</p>

<p>“We’re very committed to not only providing affordable residential offerings that are much needed in Palm Beach, but also delivering a vibrant new commercial heart that complements the extraordinary growth of the southern Gold Coast,” Sherpa Property Group founder Christie Leet said.</p>

<p>The development will sit under Sherpa's Flourish brand, which is aimed at providing a pathway into the beachside suburb for locals, first-home buyers and downsizers. In a move designed to assist first-home buyers entering the market, Sherpa has reserved all one and two-bedroom, one-bathroom apartments exclusively for eligible first-home buyers.</p>

<p>[smartcode_project:default project_id=150017 project_image_fid=370964]</p>

<p>“Our vision through Flourish is to create a vibrant retail and lifestyle focal point within the Palm Beach centre zone, delivering thriving communities underpinned by lifestyle-rich locations,” Leet said.</p>

<p>“So far, Flourish has been an incredible success, and we hope to carry this momentum as we progress the next two Flourish projects in Palm Beach.”</p>

<p>[smartcode_project:default project_id=150017 project_image_fid=371430]</p>

<p>Located across 1150-1164 Gold Coast Highway and 3 Sixth Avenue, the development will comprise two towers. The northern tower will deliver 154 apartments, while the southern tower will add a further 132 residences, helping address ongoing demand for new apartments in the tightly held coastal suburb.</p>

<p>Flourish Soleira will also feature the most extensive rooftop amenity offering ever delivered in Palm Beach.</p>

<p>The two towers will be connected by a skybridge, with residents gaining access to a rooftop recreation deck featuring a full-width swimming pool, hot and cold plunge pools, wellness spaces, a gymnasium, private dining facilities, massage treatment rooms, barbecue areas, a basketball court, golf simulator, indoor and outdoor dining spaces, sun lounges and extensive landscaping.</p>

<p>LPS Group is expected to start construction later this year.</p>

<p>Sherpa is already well advanced on construction of its debut Flourish project, Flourish Amargo, located just around the corner from Soleira. Meanwhile, Flourish Oasis, positioned opposite Amargo, recently commenced construction and has nearly sold out its collection of 47 apartments.</p>

<p>[smartcode_project_cta:default project_id=150017]</p>


Sherpa unveils $500m mixed-use Palm Beach precinct, Flourish Soleira

<p>Are mortgage holders set to get a reprieve from the RBA in 2026?</p>

<p>Big Four bank NAB believes so. They are now expecting the next move from the RBA to be a cut, rather than a hike, which they had pencilled in for August. They are unsure of the timing of the cut however, they note in their latest&nbsp;NAB Economics RBA Watch.</p>

<p>NAB Chief Economist, Dr Sally Auld, said recent data suggests the economy has lost momentum and the outlook for rates has shifted, noting that the broader economic backdrop has changed since earlier in the year.</p>

<p>“The next move in the cash rate is likely to be down, but the timing is uncertain," Dr Auld said.</p>

<p>"In February, growth was above trend, the economy was operating above capacity and there was uncertainty over the restrictiveness of rates. None of these conditions exist today,” she outlined.</p>

<p>Dr Auld said recent data pointed to softer momentum across the economy while acknowledging that at the same time, uncertainty remains a key feature of the outlook.</p>

<p>“Both Q1 GDP data and the NAB business survey suggest momentum in the economy has slowed, meaning that growth has likely peaked for the cycle. That said, we are cognisant there is still considerable uncertainty around the outlook, both with respect to activity and inflation.”</p>

<p>Dr Auld said inflation risks and labour market outcomes would be important to watch.</p>

<p>“On the prices side, we are still forecasting above target core inflation through to mid-2027. Margins will compress and weaker labour market outcomes are a risk.”</p>

<p>She said tighter financial conditions are expected to weigh on housing and activity.</p>

<p>“Tighter financial conditions will be reflected in a slowing in house price growth and housing credit growth. In summary, we have greater conviction that the next move in rates is down, but less conviction on the timing.”</p>


Mortgage relief? NAB forecasts RBA rate cut, not hike, after softer economic conditions

<p>A local downsizer has splashed $6.5 million on a penthouse in Perifa's Alex &amp; Willow development in Crows Nest.<br />
&nbsp;<br />
The purchaser sold their long-held family home in the area before embarking on a six-month search for the right apartment. After inspecting a range of options across the Lower North Shore, the buyer returned to <a href="https://www.apartments.com.au/new-apartments/alex-willow-crows-nest-82-90-alexander-street-crows-nest-nsw-2065">Alex &amp; Willow</a>.<br />
&nbsp;<br />
The buyer profile reflects the project’s broader purchaser mix. <a>Alex &amp; Willow</a> has attracted predominantly local downsizers looking to transition from larger homes without compromising on space or quality, alongside a smaller cohort of upsizers and investors drawn to the project’s location and design credentials.<br />
&nbsp;<br />
The milestone sale comes as the project, developed by&nbsp;<a href="https://www.apartments.com.au/developers/perifa">Perifa</a>&nbsp;and delivered by <a href="https://www.apartments.com.au/builders/versatile-made-construction">Versatile Construction</a>, both part of Versatile Group, reaches 60 per cent sold.</p>

<p>[smartcode_project:default project_id=6680 project_image_fid=371325]<br />
&nbsp;<br />
Eddie Mansour, Managing Partner of <a href="https://www.apartments.com.au/project-marketer/ray-white-projects">Ray White Projects</a>, said the result demonstrates not only a headline price but also depth of demand.<br />
&nbsp;<br />
“This is an exceptional outcome and a clear reflection of sustained buyer demand for premium, well-located downsizer product,” Mansour said.</p>

<p>“We’re seeing a consistent pattern of local homeowners selling family residences and reinvesting into high-quality apartments that allow them to remain within their community. Alex &amp; Willow has resonated strongly with this group because it offers genuine scale, thoughtful design and immediate proximity to the village.”<br />
&nbsp;<br />
The sale reflects a broader and consistent trend of local downsizers actively seeking high-quality, low-maintenance residences close to established village centres. Agents report that demand for this product type has remained resilient, particularly where developments offer a rare combination of scale, design quality and walkable amenity.<br />
&nbsp;&nbsp;<br />
Fabrizio Perilli, Managing Director of Perifa and Versatile Group, said the sale marks a defining moment for the project.<br />
&nbsp;<br />
“The penthouse sale is a strong endorsement of the quality we have delivered, alongside our partners, and the clear demand from local downsizers for premium, boutique residences in this location,” Perilli said.&nbsp;<br />
&nbsp;<br />
“Most importantly, we’re proud to see the Alex &amp; Willow community beginning to take shape. As we move closer to completion, we’re looking forward to welcoming residents and seeing the project come to life.”&nbsp;</p>

<p>[smartcode_project:default project_id=6680 project_image_fid=338516]<br />
&nbsp;<br />
Designed by <a href="https://www.apartments.com.au/architects/nettletontribe">Nettleton Tribe</a> with interiors by <a href="https://www.apartments.com.au/interior-designers/richards-stanisich">Richards Stanisich</a>, Alex &amp; Willow is a boutique collection of generously sized two- and three-bedroom residences in the heart of Crows Nest village.&nbsp;</p>

<p>Completion is slated for early 2027.</p>

<p>[smartcode_project_cta:default project_id=6680]</p>


Alex & Willow, Crows Nest penthouse sells off the plan for $6.5 million

<p>Fresh from launching the first stage of its Wollongong precinct, <a href="https://www.apartments.com.au/new-apartments/keira-place-wollongong-120-122-smith-street-wollongong-nsw-2500">Keira Place</a>, builder-developer Urban Property Group has unveiled plans for the next phase of the masterplanned community.</p>

<p>Now on public exhibition through the NSW Government's Housing Delivery Authority pathway is a State Significant Development Application for a further 657 homes on the prominent gateway site opposite Beaton Park.</p>

<p>The proposal comprises three buildings, including two build-to-sell towers rising 25 and 30 storeys, delivering 391 apartments, alongside a 12-storey co-living building with 266 residences, making it one of the largest co-living proposals currently planned in regional New South Wales.</p>

<p>Of the apartments proposed in the build-to-sell towers, the majority, 310, are two-bedroom dwellings. The balance comprises 44 one-bedroom apartments and 37 three-bedroom residences. Apartment sizes range from around 50 sqm for one-bedroom homes to approximately 90 sqm for three-bedroom apartments.</p>

<p><img alt="Smith St" data-entity-type="file" data-entity-uuid="19347059-1612-41a0-9c74-b86a657237f8" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-06-10%20at%2010.02.18%E2%80%AFAM.png?VersionId=sWXnaCcA.cIC6N8YT1dg5pJ2e1V3Z6z7" /></p>

<p>The submission says the proposal has evolved significantly from its original Housing Delivery Authority application following extensive consultation with the State Design Review Panel and Wollongong City Council.</p>

<p>The final scheme has been designed to align with the emerging vision for the Flinders Street Precinct, an area identified by Council as a future high-density mixed-use neighbourhood capable of accommodating substantial housing growth close to transport, employment and community infrastructure.</p>

<p>According to the design report prepared by COX Architecture, the development aims to "deliver a built outcome consistent with the future character of the Wollongong CBD while responding to the site's unique constraints and opportunities."</p>

<p>"Our vision for the next phase of the site evolution in Wollongong is grounded in three design pillars that guide the design response: place, natural environment and celebration," COX said.</p>

<p>"Inspired by its surroundings and grounded in the stories of place on Wodi Wodi Country, the design proposal acknowledges the established character of its setting while creating a unique and timeless identity that sits harmoniously within it.</p>

<p>"The design proposal responds to its specific site conditions, acknowledging the vegetation, climate, wind conditions and solar access of the site."</p>

<p>The architecture responds directly to the site's position between Wollongong's urban core and its natural landscape setting.</p>

<p>COX identified views towards Mount Keira and the Illawarra Escarpment as defining features of the site, while the upper levels of the towers will also capture expansive views across the city and out to the Pacific Ocean.</p>

<p>The design team has positioned the tallest buildings closer to the rail corridor, where overshadowing impacts can be better managed while establishing a landmark built form on the northern approach into the city.</p>

<p><img alt="Smith St" data-entity-type="file" data-entity-uuid="79580d5b-500c-4ebf-9629-797146a4a694" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-06-10%20at%209.51.59%E2%80%AFAM.png?VersionId=WbTB1EKSG.KDfsfz0F3wp1QVa2oCMGR5" /></p>

<p>Urban Property Group secured the 11,000 sqm Smith Street site in 2022 and has since progressed plans for the broader Keira Place precinct.</p>

<p>Construction recently commenced on the first stage of Keira Place, which will deliver 150 apartments across two residential buildings, including 27 affordable housing apartments and 18 specialist disability accommodation dwellings, alongside activated ground-floor retail and commercial space.</p>

<p>Urban Co-CEO Patrick Elias said the commencement of construction marked a significant milestone for Wollongong and reflected the developer's long-term commitment to regional cities.</p>

<p>"Today's groundbreaking is about turning approvals into homes and moving quickly to deliver much-needed housing in Wollongong's city centre," Elias said.</p>

<p>"Keira Place will provide a diverse mix of homes close to jobs, transport and services, while setting a high benchmark for quality, durability and consumer protection."</p>

<p><em>Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/groundbreaking-marks-start-of-construction-at-keira-place-in-wollongong-cbd">Groundbreaking marks start of construction at Keira Place in Wollongong CBD</a></em></p>

<p>&nbsp;</p>

<p>&nbsp;</p>

<p>&nbsp;</p>


Urban Property Group unveils trio of towers for next stage of new Wollongong precinct, Keira Place

Finance

<html><body>
<p>Today's ASIC submission to the 2014 Financial System Inquiry, released this morning, is filled with much discussion about the financial advice industry. However, it also takes a good look at consumers and the way that we seek out investment advice and information.</p>
<p>It explained that when it comes to investing and making financial decisions, there are five key points that affect our decision.</p>
<blockquote>
<p>"There is potential for effective marketing to target and, in some cases, exploit these biases".</p>
</blockquote>
<p>"Research from psychology indicates that the 'rational' investor that underpins traditional economic theory does not exist. Instead, people are simply 'normal', and their decisions are motivated and influened by a complex mix of cognitive, social and emotional factors," it notes.</p>
<p>The five factors they point out as heavily influencing investment choices, for better or worse, are the following:</p>
<ol>
<li>
<strong>Behavioural biases</strong><br><br>
</li>
<li>
<strong>Low levels of financial literacy</strong><br><br>
</li>
<li>
<strong>Lack of access to good quality financial advice and factual information</strong><br><br>
</li>
<li>
<strong>Information and choice overload</strong><br><br>
</li>
<li><strong>Length and complexity of disclosure</strong></li>
</ol>
<p>These five points might be opening you up to exploitation, but they can also cloud judgement when trying to look logically at comparing investment opportunities.</p>
<p><strong>Behavioural biases</strong></p>
<p>The first, behaviour biases, particularly when it comes to decision making biases, are claimed to be put into a number of groups:</p>
<ul>
<li>Preferences - Often influenced by emotions e.g. immediate gratification often valued over future gain, choices made to avoid negative emotions, such as stress, or to promote positive emotions, such as security.</li>
</ul>
<ul>
<li>Beliefs - People approach decisions with pre-existing beliefs that are likely to influence those decisions e.g. over-extrapolating a small number of observations, or being over-confident about the likelihood of certain events occurring.</li>
</ul>
<p><em>Property Observer</em> likens this to investors who claim that an investment can only be good if it has a view, or is within walking distance to some-amenity-or-other. Sweeping statements can fall into this category.</p>
<ul>
<li>Decision-making shortcuts - Decisions often made using heuristics or 'shortcuts' - for example, unconscious rules of thumb, which may lead people to choose options that appear familiar or unambiguous without weighing up all the options.</li>
</ul>
<p>"Specific attributes of financial and credit products - such as their complexity, risk, uncertainty and long-term nature - can accentuate people's natural inclination to eschew difficult reasoning and fall back on these behavioural biases," explains the report.</p>
<blockquote>
<p><strong>Behavioural biases can include:</strong></p>
<p>PREFERENCES</p>
<p>BELIEFS</p>
<p>DECISION-MAKING SHORTCUTS</p>
</blockquote>
<p>Here, they warn, there is "potential for effective marketing to target and, in some cases, exploit these biases... As a consequence there is a risk that investors and financial consumers will acquire products and services that are not aligned with their financial situation, risk profile, objectives and needs."</p>
<p>Clearly, it's worth investors keeping an eye on their own ingrained biases.</p>
<p><strong>Low levels of financial literacy</strong></p>
<p>Financial literacy is the second mentioned point, and covers the "application of knowledge, understanding, skills and value in consumer and financial contexts and the related decisions."</p>
<p>At present there is no rigorous financial literacy teaching in schools, particularly around property, leaving many to their own devices and others' advice.</p>
<p>"For individual investors and financial consumers, knowing how to make sound money decisions is a crucial skill in today's world, regardless of age. It is a 'core life skill for participating in modern society.' It affects quality of life, opportunities people can pursure, their sense of security and the overall economic health of society," the report continues.</p>
<p>Past conversations with Smart Property Adviser's Kevin Lee has proven that there is a growing support, particularly in the real estate community, for these skills to be taught at school.</p>
<p><strong>Lack of access to good quality financial advice and factual information</strong></p>
<p>The next is access to financial advice. While ASIC is, clearly, discussing financial planners - noting that less than 40% of the Australian adult population has seen a financial planner - there are some interesting observations. Those over 50 or with a higher socioeconomic status are more likely to head to a financial planner, while those with a lower socioeconomic status or who are under 25, are less likely.</p>
<blockquote>
<p>At present there is no rigorous financial literacy teaching in schools, particularly around property.</p>
</blockquote>
<p>Despite this, "Industry studies have shown that investors and financial consumers who access financial advice benefit financially as a result of the advice, even after the cost of the advice is taken into account."</p>
<p>The reasons for not seeking out advice include the aforementioned lack of financial literacy, a perception of advice being out of reach, a lack of trust in advisors, the scale of advice (with some wanting it bit-by-bit rather than all at once), wide access to general advice, and the overall cost of advice itself.</p>
<p><strong>Information and choice overload</strong></p>
<p>Anyone who has spent 10 minutes on Twitter can attest to the abundance of material online, and it doesn't just stop with the ever-growing content available on the internet. Books, catalogues, seminars and even television shows boast huge amounts of information to sift through that can sometimes work out counterproductive, and paralytic.</p>
<p>"Regardless of their demographic characteristics or level of experience, many investors were overwhelmed both by the volume of information available, and the difficulty in assessing the validity of the available information," the report explained.</p>
<blockquote>
<p>Not only is there too much information, but it's not all trustworthy either.</p>
</blockquote>
<p>Not only is there too much information, but it's not all trustworthy either, and it can be difficult to tell the difference.</p>
<p><strong>Length and complexity of disclosure</strong></p>
<p>Lastly, disclosure is a huge issue. The more paperwork thrown at investors, with disclosure sheets and documentation, the safer that everyone is meant to feel. However, with the length of some contracts being almost outrageous, it's hardly surprising that the length and complexity if these documents has made the list.</p>
<p>While ASIC has attempted to help consumers in this respect, bringing in summarised home loans' key fact sheets in the past among other initiatives, it appears that there's still much confusion around this complex information.</p>
<p>Which of these is causing you to spin your wheels the most? What would you like to see the industry fix up?</p>
<p> </p>
<p><strong>MORE ARTICLES ABOUT INVESTMENT PSYCHOLOGY:</strong></p>
<p><a href="/news/the-psychology-of-hotspotting-exclusive-interview-with-ben-kingsley">The psychology of hotspotting, exclusive interview with Ben Kingsley</a></p>
<p><a href="/expert-insights/investing/the-psychology-of-achievement-do-you-have-what-it-takes">Mark Bouris: The psychology of achievement: Do you have what it takes?</a></p>
<p><a href="/news/nsw/the-market-psychology-behind-the-sydney-property-boom-pete-wargent">The market psychology behind the Sydney property boom: Pete Wargent</a></p>
</body></html>

jduke-EHk3XBmHkn

The five factors inhibiting every investor in today's advice-laden world

<html><body>
<p>Regional banks have called on the Financial System Inquiry to address issues that they say have created competitive advantages for the big four banks in home lending and other financial services.</p>
<p>In a joint submission to the inquiry, Bendigo and Adelaide Bank, BOQ, ME Bank and Suncorp Bank said the fall-out from the global financial crisis had favoured the major players.</p>
<p>“The banking landscape is now characterised by a higher degree of market concentration, consolidation and increasing dominance of the large banks relative to other providers,” the banks noted in their submission, which was prepared with the help of Pegasus Economics.</p>
<p>“While smaller banks and others provide customers with real alternatives and choice when it comes to financial services, these smaller participants do so at a distinct competitive disadvantage.”</p>
<p>Over the past few years, the major banks had become more vertically integrate with mortgage brokers and financial advice networks, which the regional banks’ submission claimed provided advantages in distributing home loans and other financial products.</p>
<p>The regional banks recommended the inquiry consider commissioning the Australian Securities and Investments Commission to survey the market to assess whether the major banks’ multi-brand strategies were confusing consumers about ownership.</p>
<p>“If it is found that confusion does exist, then a strong disclosure obligation must be introduced to ensure customers are making informed decisions,” the banks said in their submission.</p>
<p>The regional banks also noted that significant funding and cost advantages were available to the big banks deemed “systemically important” and that new regulatory and prudential requirements cost more, in relative terms, for the regional banks to implement.</p>
<p>They also claimed that asset requirements under the Basel capital adequacy framework made it more profitable for the big banks than for the regional banks to issue home loans.</p>
<p>The four big Australian banks, which had undertaken advanced Basel accreditation, were required to hold on average 1.3 cents of capital against each $1 of mortgage credit, UBS Securities Australia estimated. Banks operating under the standardised accreditation – including the regional participants – must hold up to three times more capital for the same loan.</p>
<p>The difference in capital requirements meant that the implied return on equity for ANZ to supply a home loan (estimated to be around 50 basis points) was 34.92% while the same mortgage delivered Bank of Queensland a return on equity of just 14.17%.</p>
<p>Other submissions to the Financial System Inquiry did not agree that competition in the mortgage market was inadequate.</p>
<p>The Reserve Bank of Australia in its submission said a good deal of focus had already been placed on competition in the mortgage market since the financial crisis and that competition in the market for small business loans was more of a concern.</p>
<p>“The [Reserve] Bank considers that this market should be the focus of inquiries regarding competition in lending, rather than the mortgage market,” it said.</p>
<p>Commonwealth Bank of Australia and ANZ agreed in their separate submissions that the inquiry should focus on improving the depth and liquidity of debt markets, on ensuring regulatory standards were consistent and on improving consumers’ financial literacy.</p>
<p>ANZ said: “An open market should continue to be the primary mechanism for maintaining an efficient, competitive financial system. Improvements to retail bond markets and removal of interest withholding taxes would promote efficient competition.”</p>
</body></html>

zfielding-GvX3Uq9KTa

Regional banks highlight competitive disadvantages in Financial System Inquiry submission

<html><body>
<p>Queensland’s Great Start Grant, offered to first home buyers buying or building a new house, townhouse or unit valued up to $750,000, saw 5,200 grants paid out, with 500 more approved and ready to be paid. This grant was announced in the 2012/2013 budget.</p>
<p>Treasurer Tim Nicholls said that Great Start Grants have seen the government pay out $79 million in grants through this scheme.</p>
<p>Of the buyers, almost 50% were in the greater Brisbane area, while almost 20% went those in north Queensland and more than 10% to those on the Gold Coast.</p>
<p>“We’ve had 24 consecutive months of growth in the total number of trend dwelling approvals,” said Nicholls.</p>
<p>“Approvals in January this year were 64.3% higher than in January 2012 in trend terms. </p>
<p>“We expect that the construction sector will continue to improve in 2014 with sustained low interest rates and stronger household income growth,” he said.</p>
<p>The Great Start Grant offers $15,000 to eligible first home buyers.</p>
</body></html>

Queensland first home buyer Great Start Grant taken up by 5,000

<html><body>
<p>The official cash rate set by the Reserve Bank of Australia has been at a historic low of 2.5% since August 2013. In line with that low rate, borrowers are paying less for home mortgages now than they have in over 15 years.</p>
<p> <img src="/images/2014/03/28/zoe-march-28-one.jpg" alt="" style="line-height: 1.3em;"><span style="line-height: 1.3em;"> </span></p>
<p><em>Source: RBA</em></p>
<p>Lenders typically cut and lift mortgage interest rates roughly in line with the RBA’s movements, charging a margin over the official cash rates. Since late 2007, the extra amount of interest that consumers pay on a variable rate home loan above the official cash has been increasing.</p>
<p>Finder.com.au money expert Michelle Hutchison says lenders have been moving their rates out of cycle with the RBA and failing to pass on rate cuts in full, so the gap between the official cash rate and home loan rates available to borrowers has widened.</p>
<p>RBA data shows that the difference between the official cash rate and the mortgage managers’ basic variable rate – which approximates the average of interest rate actually available to borrowers – was fairly stable at just below 1 percentage point from September 1998 to September 2007. If that relationship still held true, home mortgages with variable interest rates of 3.5% and lower would be common in the market now.</p>
<p>In fact, RBA data shows that the mortgage managers’ basic variable rate was 5% in February 2014, a full 2.5 percentage points more than the official cash rate. Hutchison says the cheapest basic variable rate loan available is 4.49% for a $150,000 mortgage over 30 years from Loans.com.au.</p>
<p> <img src="/images/2014/03/28/zoe-march-28-two.jpg" alt=""></p>
<p><em>Source: Reserve Bank of Australia</em></p>
<p>So, why aren’t headline lending rates lower?</p>
<p>Hutchison says one reason is that borrowers are letting lenders get away with charging more by not shopping around.</p>
<p>“If borrowers are not taking action and doing something about it by comparing home loans and switching to a better, cheaper deal, [lenders are] not going to do anything about it,” she says.</p>
<p>“There are hundreds of home loans on the market and the range of home loan prices is from 4.49% to over 9%. The best thing people can do is keep track of [interest rates]. Don’t sign up to a home loan and forget about it. Review your financial situation every year or two.” </p>
<p>UBS interest rate strategist Matthew Johnson says few people pay the headline interest rates advertised by lenders. Advertised rates are higher in relation to the cash rate, but lenders have realised that people feel good about getting a discount. Those who are prepared to negotiate can get lower rates than the advertised rate.</p>
<p>Another key reason for the widening gap between the official cash rate and mortgage rates on offer to consumers is that the cost of funding and running a bank has gone up, Johnson says.</p>
<p>Two main sources of funding are available to lenders: financial markets and domestic deposits.</p>
<p>During the financial crisis, lenders found it very difficult and costly to borrow on financial markets as investors lost their appetite for risk. The banks were instead forced to tap local deposits to fund lending, using elevated interest rates on term deposits to lure consumers to save their cash.</p>
<p>As the chart below shows, the amount lenders had to offer on deposits over the cash rate increased dramatically from around 2007. Term deposit interest rates have fallen since mid-2012, but they are still high by historical comparisons. At-call savings account interest rates have remained above average.</p>
<p><img src="/images/2014/04/01/zoe-april-1-one.jpg" alt=""></p>
<p>“Banks have shifted their funding base away from financial markets to domestic deposits. Banks have passed on a part of their increased funding costs to borrowers,” Johnson says.</p>
<p>Banks also consider credit risk associated with loans and the liquidity risk of funding long-term assets with short-term liabilities when setting interest rates, according to <a href="https://www.rba.gov.au/publications/bulletin/2014/mar/pdf/bu-0314-8.pdf" target="_blank">a report by the RBA</a>.</p>
<p>“Banks’ growth strategies, competitive pressures and the desire to provide a return to equity holders also affect banks’ lending rates,” the report noted.</p>
<p>“An important element in determining the overall cost of banks’ funding is the level of the cash rate, which acts as an anchor for the broader interest rate structure of the domestic financial system. Nevertheless, changes in the level of compensation demanded by investors to hold bank debt, competitive pressures and non-price factors can exert significant influences on banks’ funding costs.”</p>
<p>Johnson says the trend for lenders to charge a large premium over the cash rate will reverse as financial markets stabilise further and investors in financial instruments regain their appetite for risk.</p>
<p>House prices are rising and banks are well capitalised, easing investor concerns. Fund managers face a shortage of yield-producing assets. Under these conditions, and amid stabilising financial markets, demand will increase for yield-producing assets such as residential mortgage-backed securities (RMBS).</p>
<p>“That will again make securitisation [through RMBS] a viable funding strategy for the mortgage lenders,” Johnson says.</p>
<p>Non-bank lenders that lack the deposit-base of the big banks will be better able to compete as financial market funding costs fall, putting pressure on the banks to reduce their margins over the cash rate. </p>
<p>But Johnson warns that might not lead to lower interest rates for consumers.</p>
<p>He says the wide margin between the RBA cash rate and mortgage rates is a big part of the story of why official interest rates are as low as they are now. The RBA has been compensating for the lenders’ higher costs, he says.</p>
<p>“If that [gap] goes back to 1%, then the official cash rate could rise,” Johnson says.</p>
<p>The RBA estimates in its report that even though funding costs have reduced over the past year, they are likely to remain close to 130 percentage points higher than they were before the global financial crisis.</p>
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Gap between official cash rate and home loans continuing to widen

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	At present the Australian GST is levied at 10% on the majority of goods and services produced in Australia which are then on sold to Australian individuals and businesses.  The money raised by the GST is then put through a process called <a href="http://www.gstdistributionreview.gov.au/content/Content.aspx?doc=reports/interimmarch2012/Chapter1.htm" target="_blank">Horizontal Fiscal Equilisation</a> where the Federal government then allocates each state and territory an amount based on the HFE formula.  </div>
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<div>
	Given the primary income for State/Territory Governments is GST and the basic consumer and business processes already exist, adapting the GST could be argued as one of the most prudent ways for Governments to raise more revenue to pay for transport infrastructure expansion or interest bills on debt used to build new infrastructure.  As GST is linked to consumption, the more money spent in the economy, the more money raised.</div>
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	 </div>
<div>
	Cities are the engine rooms of any economy - it's where the overwhelming majority of us choose to live and work.  Living near to centres of employment, social and retail hubs offers up choice - and the great enabler of this choice is transport.  Without efficient transport modes providing greater capacity we're unable to get to where we need to go in order to work, go shopping or conduct our lifestyles how we see fit.  </div>
<div>
	 </div>
<div>
	Sourcing capital to build new or expand existing infrastructure has become an interesting exercise to watch over the past 1-2 decades with a multitude of Public Private Partnerships having built differing pieces of city transport infrastructure all around the country.  Governments of both persuasions have increasingly looked to the private sector to fund projects like Citylink and Eastlink as ideology from both sides has incrementally shifted Governments away from directly raising revenue in order to fund expansion or use as capital for the respective State/Territory's needs.  </div>
<div>
	 </div>
<div>
	This PPP trend has produced a dubious outcome where public secrecy of big ticket infrastructure projects like the East-West link in inner Melbourne becomes commonplace and the taxpayer - the ultimate user - does not have a clear picture of the true benefits due to the Government's fear of compromising Private Sector investment.  </div>
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<div>
	Yes - I'm advocating a tax increase and one which isn't offset by other sectors of our entire taxation regime.  </div>
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	We require a two-pronged approach to provide greater transport capacity and alternatives to the existing private transport regime: secure a reliable funding source (this article) and expand Infrastructure project assessment capabilities downstream of Canberra (future article).</div>
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<div>
	<strong>The reliable fund source</strong>
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<ul>
<li>
		Raise the GST rate by 2.5% to 12.5%</li>
	<li>
		State and Territory Governments are required to create Infrastructure funds to be managed by their respective Funds Management agencies, for instance <a href="http://www.vfmc.vic.gov.au/" target="_blank">Victoria's Funds Management Corporation</a>
</li>
	<li>
		The extra revenue raised above the existing 10% of GST should bypass the HFE process and be directly returned to the State or Territory the good or service was bought from and paid directly into the Infrastructure funds.</li>
	<li>
		The Infrastructure funds should have an enshrined purpose to purely fund transport infrastructure investment - public transport, roads and ports.</li>
</ul>
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<div>
	Key to all of this is communicating the increase in the GST is for a specific purpose: Infrastructure investment.  Without this critical point, what I outline below is pointless and similarly having infrastructure spending decisions distanced, in part, from the political process as much as possible should be the secondary goal. This could be achieved via State-based Infrastructure agencies like the Federal <a href="http://www.infrastructureaustralia.gov.au/" target="_blank">Infrastructure Australia</a> or by setting up joint State-Federal branches of Infrastructure Australia in each state capital ensuring public sector manpower is better deployed working with the largest service provider - the States and Territories - and the largest purse - the Federal Government.  </div>
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	I'd like to see a distinction made between the current level of GST and any future increases - such as the current Horizontal Fiscal Equilisation regime remains as is on the 10% portion of the GST - I think most people would understand the need for wealthier states to in part help out other states and territories in providing services there.  However the wealth-generating states also need to fund their own infrastructure pipelines to ensure they can achieve consistent growth and keep on supporting the "have-not" States/Territories.  To cut out the inevitable quarrel amongst State Premiers / Territory Chief Ministers which revolve around "we're not getting our fair share" then let's keep it simple: the 2.5% increase above the existing 10% would go back to the State/Territory where the GST is levied. </div>
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	<strong>How it could work and impacts on entities paying GST</strong>
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	Small, medium and large businesses are the entities, generally, which pay the GST to the ATO.  This is captured through a BAS Statement where the business tallies the amount of GST it has received from its goods and services sales, offsets the GST it has paid itself and produces a total figure which is the $ amount the ATO receives with each quarterly BAS lodgement.</div>
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<div>
	In order to capture the amount of GST a business or organisation levies on customers in each state, every entity collecting GST would need to know their customers, more specifically they would need to know where they are located.  </div>
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<div>
	This is simple for a small retail outlet/corner shop: all their sales are in the one state therefore the added paperwork would be minimal.  It would be relatively simple to ascertain for an online business - billing addresses which accompany credit card or paypal transactions (which already must be captured) can be used to capture the jurisdictional data.  For large multi-state businesses (think Woolworths, Coles, Telstra, Origin Energy) POS terminals and internal accounting systems would need to be altered to produce sales figures per jurisdiction breaking down their state-by-state sales &amp; associated GST component (if they don't already).</div>
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<div>
	Essentially 8 new boxes would appear on the BAS Statement - one for each state and territory plus the existing total figure businesses currently used to inform the ATO of their GST obligations.  Small, medium and large, online or bricks and mortar business would then simply provide their state-by-state breakdown - providing the grand total and then the GST paying entity would provide a figure for GST levied in Victoria, New South Wales, Queensland, South Australia and so on.  </div>
<div>
	 </div>
<div>
	The business/organisation would pay the GST in one single payment to the ATO, as is the case now, but the extra information would then be used by the ATO to strip out the extra 2.5% and redirect the cash straight to State/Territory Government funds on a quarterly basis with the existing 10% component running through the existing HFE process.</div>
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<div>
	Key to aiding the transition to the new GST regime will be the ATO/Federal Government devising and publishing the guidelines for accounting system integration touchpoints in order for software packages provided by MYOB, Xero, Oracle and SAP to automatically generate GST breakdowns based on customer and sales ledger data. </div>
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<div>
	<strong>Show us the money</strong>
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<div>
	What does the extra 2.5% look like in real numbers?  According to the <a href="http://www.cgc.gov.au/attachments/article/43/2012_Update_report.pdf" target="_blank">Commonwealth Grants Commission's</a> State Relatives 2012 Update report, Victoria was forecast to receive $11,782,000,000 in GST revenue for the 2012-2013 financial year.  HFE/relative changes aside (in case you were wondering Victoria was forecast to receive $0.92 for every $1 paid in GST in 2012-2013) let's assume the $11.7billion figure is a straight 10% and if a model such as the one I've outlined were to be implemented, Victoria's new Infrastructure Fund would have been filled with $2.5-$3billion in 2012-2013.</div>
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<div>
	<img alt="" class="image-article_full_width_702px" height="661" src="/sites/urbanmelbourne.info/files/styles/article_full_width_702px/public/pictures/article-images/gst_breakdown.jpg?itok=j25ic6qV" title="Commonwealth GRants Commission State Relatives report 2013" width="702">
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<div>
	Let your mind run wild, $2.5 to $3billion a year, could:</div>
<ul>
<li>
		Remove 25 level crossing removals a year, assuming an average cost of $100 million per crossing (we have well over 100 to remove in Melbourne alone).</li>
	<li>
		Commence major bus lane construction right across the metro and regional cities coupled with countless bus route improvements state-wide.</li>
	<li>
		Assuming an 8-10 year construction timeframe, Melbourne Metro Tunnel could be paid for directly with this fund and thereafter all the other subsequent heavy rail links as outlined by the PTV plan.</li>
	<li>
		Build the missing link in the ring road from Metropolitan Ring Road at Greensborough bypass to the Eastern Freeway at Thompson's road - offering an alternative to the Monash-West Gate corridor.</li>
	<li>
		Increase the amount of regional highway duplication projects: Princes HWY West from Winchlesea to Colac and beyond, Western Highway from Ararat to Horsham, accelerate plans to remove the last remaining at-grade intersections on the Hume and Princes "Freeways" between Craigieburn &amp; Wodonga and Pakenham &amp; Traralgon.</li>
</ul>
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	 </div>
<div>
	Let's not kid ourselves - this is not about creating a new tax to only have it funded by a "saving" elsewhere - this is about reversing the trend of the past couple of decades and flushing cash into an area that business, unions and community all agree needs a lot more attention.  Regardless of your socio-economic profile, we must all contribute and doing it through adapting existing system and increasing the rate by an amount inside the Reserve Bank's inflation range will hit everyone's hip pocket, but it has a very specific and important purpose.</div>
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	 </div>
<div>
	Big or small ticket transport infrastructure projects have flow-on productivity, social and environmental benefits for everyone and key to the success is rational discussion around tying the tax increase it to specific outcomes - projects and programmes selected on merit with greater community engagement outside the electoral cycle.</div>
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	 </div>
<div>
	Would you accept a 2.5% increase in the GST if you knew every dollar raised was for the sole purpose of expanding transport infrastructure in our cities and regional areas? </div>
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	 </div>
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Alastair Taylor

Here's why a GST rate increase should be on the table

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<p>For the five years to the end of 2007 Australian property developers were spoilt for choice with the simplicity and availability of property development finance. Lenders were aggressively pricing to win deals and presales were not a major precondition or were merely a litmus test to the acceptability of the developer’s price point and market demand rather than the driver of debt clearance upon completion of the project.</p>

<p>Fast forward to 2013 and the lending environment could not be more opposite. Lenders, particularly the major banks, and cash, drive the market. Capital is scarce, lenders are conservative, lending margins have increased, lending approvals take longer and presales are now a crucial prerequisite to pushing forward with any development finance application.</p>

<p><strong>So how does the modern day developer evolve to this environment?</strong></p>

<p>By understanding the key requirements of Lenders such as:</p>

<p><strong>Debt vs. Equity</strong> – The ability to structure debt facilities and knowing the vagaries of each lender is a key component to underwriting the success of a finance application. Equally important is which cost items will be acknowledged by the lender and also understanding each lender’s lending idiosyncrasies and parameters, including which lenders will accept mezzanine (second mortgage) finance, offshore sales, apartment sizes etc. Ultimately every developer wants to minimise the risk of nasty surprises during a project and one critical component is a successful finance application so the project can start on time – Balmain’s role is to use its lending expertise to assist its clients in securing credit for their project and to communicate realistic outcomes.</p>

<p><strong>Presales</strong> – Identification of the specific presale requirements of each lender is a key component of any successful development finance application. This includes and is not limited to; understanding what percentage of stock will be required to be sold to trigger construction finance; selecting an appropriate sales agent; knowing what is deemed to be acceptable in terms of contract sunset clauses, sales concentration risk, deposit type and amount; understanding FIRB restrictions, settlement risk and lender limitations on stock sold to overseas purchasers and takeout of the residual debt upon completion.</p>

<p><strong>Builder</strong> – Selection of the right type of builder and understanding the lenders’ requirements of the builder in terms of the financial requirements, references, tripartite agreements, retentions, experience and builder liquidity is key.</p>

<p><strong>The finance application</strong> – There is usually only one opportunity for a development finance application to succeed with any lender and Balmain understands that a comprehensive finance application for the transaction is paramount in achieving a positive outcome. Understanding the rulebooks of each lender and targeting the loan application at lenders with appetite for that type of transaction is a key component of Balmain’s success.</p>

<p>Balmain specialises in structuring loan applications, preparing feasibilities and funding tables, undertaking market competition analysis and detailing the key risks and risk mitigants of transactions. Critically, answering the lenders questions before they are asked is a key component of Balmain’s success in arranging construction finance, particularly in the current credit constrained market.</p>

<p>Paul Cleary is a Partner at <a href="http://www.balmain.com.au/" target="_blank">Balmain Group</a>, Australia's largest non-bank commercial loan manager.</p>
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