Perth’s new apartment market recorded its strongest quarter of sales since Q4 2021, with 412 apartments sold in Q1 2026 and a record quarterly sold value of $537 million, according to Urbis’ latest Apartment Essentials results.

Urbis said the March quarter result reflects strong, highly product‑specific demand across both ends of the market, from more attainable projects delivering at scale, through to premium stock being absorbed by equity‑rich downsizers.&nbsp;

David Cresp, Partner at Urbis, said the key story in Perth is not demand, it is the market’s ability to convert demand into delivered housing.&nbsp;

“This is the strongest sales quarter since Q4 2021, and it reinforces that demand in Perth is real and it’s local,” David Cresp said. “But the task now is delivery, turning that demand into projects that can actually be built and completed.”&nbsp;

[smartcode_project:default project_id=110291 project_image_fid=302785]

<h2>Affordable product leads, premium demand remains resilient</h2>

Sales in Q1 were led by more affordable projects, with The Boulevard (SKS Group) recording 115 sales in the quarter, the presentation noting this is only the second time a single project has surpassed 100 quarterly sales. The project was able to offer more affordable housing product right next to a train station.&nbsp;

Palmyra West (Finbar) also delivered strong results with 28 sales in Q1, following 84 sales in Q4, with an average price of under $800,000, underscoring depth of demand for well‑located, attainable new stock.&nbsp;

At the premium end, Urbis said downsizer demand is continuing, with the results highlighting Romeo (Applecross, Finbar) recording 75 sales and reaching almost 50% sold in one quarter.

Jual (Shenton Park, Celsius Property) also posted a strong quarter with 28 sales, reaching 39% sold in one quarter.

Urbis noted that Perth apartment demand is not speculative, not investor‑led, and not uniform, describing it as localised, often equity‑driven and highly product‑specific, a pattern reflected in the polarisation between strong “attainable” performers and premium downsizer product.&nbsp;

[smartcode_project:default project_id=148957 project_image_fid=364102]

<h2>Prices underpinned by costs, and the delivery risk is growing</h2>

Urbis said pricing pressure is cost not demand‑driven: construction costs and delivery risk are now a central constraint, with the results noting build costs remain elevated and volatile, and that energy, fuel and labour uncertainty weigh on feasibility.

David Cresp said a growing challenge for private Build‑to‑Sell developers is simply securing a builder in the current environment.

“Developers are really feeling the pressure from a building market that was operating at capacity and securing a builder is challenging,” David Cresp said, adding that even where a builder can be secured, “trying to get to the price that makes the development financially viable is incredibly challenging in the current market.”&nbsp;

Urbis’ broader WA commentary also notes that industry remains at or above capacity with lot and housing creation, and that many builders are limiting new sales to manage stretched workforces and fixed‑price contract pressures, conditions that flow directly into apartment feasibility and delivery timing.

[smartcode_project:default project_id=108869 project_image_fid=317905]

<h2>Supply: improving later, but still constrained, and Perth lags eastern benchmarks</h2>

While near‑term supply remains constrained, Urbis’ forecast shows completions lifting “Supply is forecast to be back above 1,500 apartments per annum for the first time since 2019”, with 1,775 completions forecast for 2026, and volumes remaining above that level over the following years.&nbsp;

Looking further ahead, completions are forecast to reach 2,500 in 2028, with the report noting 32% of that total is social/affordable, reflecting the role of government‑supported delivery in rebuilding the pipeline.&nbsp;

However, Urbis said Perth remains behind comparable markets on pipeline scale. In a national comparison of projects under construction, the report shows under construction Perth Build‑to‑Sell (BTS) at 3,446 apartments versus the Gold Coast at 7,922. Mr Cresp said “The challenge for Perth is how to we grow the delivery pipeline”.

Urbis’ conclusion is that Perth’s market is increasingly defined by product discipline and delivery certainty, with the research identifying “delivery certainty is key” and calling out builder risk and procurement models as core success factors, alongside “timing and staging”.&nbsp;

Joel Robinson

Perth apartment sales hit strongest pace since late 2021 as builder capacity tightens

<a href="https://www.apartments.com.au/developers/sammut-developments">Sammut Group</a> has secured development approval for its latest Brisbane apartment project, marking the Sydney developer’s next step in expanding its Queensland pipeline following the success of its debut Gold Coast development, Coast.

The approved project at <a href="https://www.apartments.com.au/new-apartments/44-glen-road-toowong-qld-4066">44 Glen Road, </a><a href="https://www.apartments.com.au/developments/toowong-qld-4066">Toowong</a> will deliver a 15-storey riverfront apartment building with 42 residences, significantly increasing the scale of the site’s previous approval for a smaller luxury scheme. Designed by Bureau^proberts, the development will comprise a mix of predominantly four-bedroom and two-bedroom apartments positioned to maximise Brisbane River and city views.

Sammut Director Julian Sammut said the group had been actively searching Brisbane for several years before identifying Toowong as the right fit.

“Brisbane was the right step for Sammut,” Sammut said.

“With the success of Coast we thought we should definitely look to do more in Queensland alone. We then pushed up to look at Brisbane. We've been looking for I'd say two to three years actually and it was hard to find the right location.”

<img alt="Sammut makes Brisbane apartment play" data-entity-type="" data-entity-uuid="" src="https://res.cloudinary.com/dz9xllyip/image/fetch/f_auto,c_limit,w_1440,q_75/https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/field/image/Screenshot%202025-12-23%20at%203.27.14%E2%80%AFPM.png?VersionId=dYAVIL7qdcGA8ojvkslSrLjczXFejSSx" />

Sammut said suburbs including New Farm and Teneriffe were considered before the group ultimately focused on Toowong due to its strong downsizer demographic and limited supply of developable riverfront land.

The site was acquired off-market after what Sammut described as a lengthy negotiation and planning process, with the developer pursuing an uplift to the original approval.

“We are DA approved now which is very exciting,” Sammut said.

“We've had our change approval come through and we've obviously doubled the height, 15 storeys plus rooftop. We've got 42 amazing apartments that are going to be coming to market soon.”

<img alt="Sammut makes Brisbane apartment play" data-entity-type="" data-entity-uuid="" src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,dpr_2.0,q_auto:good/https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202025-12-23%20at%203.27.26%E2%80%AFPM.png?VersionId=ohkRkY0dIZlqdfME2EZePsCQavRiBadE" />

Bureau^proberts said the design responds to Toowong’s evolving urban character, balancing contemporary apartment living with the area’s established residential identity.

“A place where traditional Queensland living has taken place for centuries; Toowong is seeing a shift of contemporary influence, commercial and retail hubs mixed with well-considered residential offerings – all the while maintaining its character and charm,” the architect noted in planning documents submitted to Brisbane City Council.

The architecture practice said the project’s form was shaped by its riverfront setting, flood considerations, neighbouring building scales, and view corridors.

“They said the mix of four and two-bedroom apartments capture the ‘fundamental qualities of Queenslander living,’ translated into the context of a contemporary subtropical building.”

The development sits just off Coronation Drive within walking distance of Toowong’s retail precinct and the upgraded Regatta ferry terminal, while also benefiting from proximity to the incoming green bridge connection to West End. Sammut said the accessibility and amenity offering were central to the site’s appeal.

The approval adds to growing residential activity along the Toowong riverfront, joining nearby projects including Consolidated Properties’ Monarch Residences and Spyre Group’s ARC Residences.

Sammut secures approval for debut Brisbane apartment development in Toowong

Developer Lanevick is heading back into Sydney’s apartment market after focusing more heavily on the luxury townhouse and terrace sector in recent years.

Lanevick, founded and directed by Steve Maroun, is expecting to receive approval in the coming months for a new apartment development in Gladesville, with the aim to launch it to the market later this year.

The 51-apartment project, designed by Studio Johnston, will comprise a mix of one-, two-, and three-bedroom apartments positioned toward the Hunters Hill downsizer market.

“Traditionally it’s been difficult for people in that market to downsize because there just hasn’t been the right product available,” Maroun said.

“We’re targeting buyers who might have 30 to 40 per cent of their house value sitting in the bank after downsizing.

“They still want good spacious entertaining areas, they still want quality design, but they also want flexibility and the ability to enjoy life a bit more after working hard for a long time.”

The project sits near Boronia Park and within close proximity to the Parramatta River foreshore, an area Maroun says offers more of a Hunters Hill lifestyle than a traditional apartment precinct.

“From a lifestyle perspective, it’s really more Hunters Hill than Gladesville,” Maroun said. “You’re close to the foreshore, close to parklands, and still connected back into the village precinct.”

From level four and above, apartments will capture water views&nbsp;toward Sydney Harbour. Communal amenity will include rooftop entertaining areas, wellness spaces, and a gym tailored toward owner-occupier buyers.

“We’ve really designed these apartments around that buyer coming from the Hunters Hill LGA and what they’re actually looking for in their next chapter.”

The proposed development has also been designed to respond to the changing character of the broader Gladesville town centre, where a growing number of mixed-use and residential proposals are expected to emerge over the coming years.

“Gladesville presented a rare opportunity to deliver a genuinely design-led residential project within an evolving lifestyle precinct, just moments from the growing Gladesville town centre, and we’ve approached the project with a strong focus on architecture, liveability and long-term community value,” Maroun said.

Maroun said Lanevick saw a first-mover advantage within the precinct as planning controls continue to evolve to accommodate greater housing density.

“We think there’s a real opportunity there that hasn’t really been serviced properly yet,” he said.

“There’s going to be a broader evolution of the whole Gladesville village precinct over time, particularly with more activation and mixed-use outcomes.”

The Venus Street proposal will include a commercial and retail component at ground level designed to contribute to that evolving streetscape activation.

“A big part of the thinking was how do you activate that area properly and create more vibrancy and amenity, which is what Hunters Hill has been looking for,” Maroun said.

Lanevick’s focus since 2020 has largely been on smaller-scale luxury townhouse and terrace developments. The developer recently completed Royale Randwick, also designed by Studio Johnston, where prices reached $3.65 million. The project was featured in the UDIA NSW 2026 Professional Development Prospectus and was also named a finalist for Development of the Year.

&nbsp;

Lanevick to cater for Hunters Hill downsizers with new Gladesville apartment development

Property developer One Living, backed by former Macquarie banker turned investment manager Chris Green’s investment firm, has unveiled plans to bring more institutional capital into housing to help address the national supply crisis.

The New York-based investor has focused his firm, GreenPoint Partners, on addressing the supply shortage hitting middle market housing in Australia.

It is backing the new One Living business to develop more than 1000 units along the eastern seaboard. The new firm is starting with a development on Mona Vale Road, on the border of Mona Vale and Pymble, in Sydney’s Northern Beaches, with around 140 apartments planned. They are eyeing off more sites across the city.

With cost pressures rising in the industry, One Living’s model is to be a vertically integrated developer-builder, so it can respond directly to the housing gap by removing the cost inefficiencies embedded in traditional residential delivery.

“We are building a platform designed to operate at scale and starting in a market where there’s a clear need for quality, attainable housing,” One Living joint managing director Joseph Scuderi said.

“It’s that missing middle – it’s that attainable end of housing… that’s what most Australians invest into and what Australians can actually afford.”

<img alt="Mona Vale" data-entity-type="file" data-entity-uuid="798dfa93-4941-4db6-a696-31e9dc18e81c" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%202.31.50%E2%80%AFPM.png?VersionId=mKBqi5C_DmeiXS.AtJkcR8LQIxqCqmFi" />

GreenPoint Partners brings years of experience assembling and scaling real estate operating businesses across major markets. And Green sees a big opportunity in Australia.

“For its size, sophistication and importance to the community, Australia’s living sector has remained largely under-institutionalised, which represents significant opportunity,” Green said. “GreenPoint identified that gap, assembled the right team, and is backing One Living to build a platform that is aligned to market needs.”

Green said being a builder-developer would give the company the capacity and flexibility it required to deliver reasonably-priced homes.

“We want it to be at that attainable level; not super high end luxury but at that attainable level,” he said.

<img alt="Mona Vale" data-entity-type="file" data-entity-uuid="74a5344a-4b26-4d4a-ada3-056b1220be77" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%202.32.15%E2%80%AFPM.png?VersionId=vY8hXHO4reBMdO8ZXMWCNtGZJofUPQ3j" />

&nbsp;

One Living will undertake a component of affordable housing in its schemes, which it will own and operate, and it could also run build-to-rent on some sites.

Green praised local policy settings.

“The NSW government is being very supportive, strategic and pragmatic in terms of how do we generate more supply of housing,” he said. “We think it’s actually positive for development and the bit that’s been lacking at that attainable level is that it’s lots of relatively small private developers, whereas we want to create an institutional platform.”

One Living is also&nbsp;looking at high-density projects and could take on more institutional funding in the future.

“The way we will be able to achieve economies of scale is through size,” Green added.

One Living enters Sydney's new apartment market with Northern Beaches site acquisition

It's been several years since there's been an opportunity to buy a brand new townhome in Melbourne's coastal suburb of Mordialloc. Even apartment developments in recent times have been few and far between in the area.

Local developer LDS Property identified the gap in new housing, securing a site on White Street, directly opposite&nbsp;Woodlands Golf Club Mordialloc. They've recently launched&nbsp;<a href="https://www.apartments.com.au/new-townhouses/wm-residences-mordialloc-102-white-street-mordialloc-vic-3195">WM Residences</a>, just 13 townhouses which they have already started building.

Projects by Buxton Director Heath Thompson, who is selling WM Residences, says the townhouses x that perfect middle ground be

"Mordialloc residents have had limited options to downsize within the suburb, often forcing them to look elsewhere despite long-standing ties to the area," Thompson says.

"With very little comparable new supply coming to market, projects like WM Residences are well placed, particularly as buyers look to capitalise on current conditions amid constrained supply."

[smartcode_project:default project_id=134646 project_image_fid=6109]

The development, designed by regarded architecture firm&nbsp;<a href="https://www.apartments.com.au/architects/ewert-leaf">Ewert Leaf</a>,&nbsp;adopts a deliberately restrained architectural approach, focusing on simplicity, durability and liveability rather than overt design gestures.

The boutique scale is central to the offering. With only 13 three-bedroom residences, each home is configured to prioritise functional layouts and everyday use, supported by private terraces and secure two-car garages.

Ewert Leaf’s design response leans into a calm, neutral material palette. Interiors are defined by oak flooring, white walls and soft finishes, creating a consistent and understated backdrop. The approach avoids trend-driven detailing in favour of longevity, with an emphasis on natural light and spatial clarity.

[smartcode_project:default project_id=134646 project_image_fid=6110]

Beyond aesthetics, the homes are designed to meet contemporary performance expectations. Each residence targets a minimum 6-star energy rating, incorporating double glazing, comprehensive insulation and all-electric Bosch appliances.

The project’s location supports a walkable coastal lifestyle, sitting within close proximity to Mordialloc’s foreshore, Main Street retail strip and the train station. Local cafés and dining venues, including Suburbia Deli and Hendriks Café, are within a short walk, reinforcing the area’s established neighbourhood character.

[smartcode_project:default project_id=134646 project_image_fid=6116]

While <a href="https://www.apartments.com.au/developments/mordialloc-vic-3195">Mordialloc</a> is often defined by its beach and pier, the project taps into other areas of day to day living, offering easy access to local food, casual dining and transport, rather than positioning itself purely as a lifestyle retreat.

WM Residences reflects a continued trend across Melbourne’s coastal suburbs towards smaller-scale, design-led townhouse developments, particularly on infill sites where proximity to amenity is already established.

With construction commenced prior to its market entry, the project aligns with a growing preference among buyers for developments with visible progress and defined delivery timeframes.

[smartcode_project_cta:default project_id=134646]

WM Residences fills gap in Mordialloc townhouse market

Mortgages

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The RBA rate cut will lure homebuyers into what may be a nightmare journey, the veteran personal finance adviser Noel Whittaker says.
The author of Making Money Made Simple warns FHB against "stretching themselves to achieve the dream of a first home at a time when rates are at historic lows."
<div class="_1665V undefined">
"Eventually, they must start to rise again," he said in a Nine Entertainment column.
<div class="_1665V undefined">
He noted last month the Australian Prudential Regulation Authority instructed lenders to ease up on eligibility criteria. 
</div>
"Relaxing lending standards starts a chain reaction... the number of first-home buyers jumps, the extra demand pushes up house prices and it becomes even harder for young couples to get a foothold into the housing market.
"As prices rise, and affordability worsens, other potential buyers who are saving for a deposit panic, and rush into the market.
<p data-gtm-vis-recent-on-screen-6236702_632="1559705414884" data-gtm-vis-first-on-screen-6236702_632="1559705414884" data-gtm-vis-total-visible-time-6236702_632="4000" data-gtm-vis-has-fired-6236702_632="1">"To make matters worse, before the election the Federal government announced plans to let first-home buyers into the market with just a 5 per cent deposit."
<p data-gtm-vis-recent-on-screen-6236702_632="1559705414884" data-gtm-vis-first-on-screen-6236702_632="1559705414884" data-gtm-vis-total-visible-time-6236702_632="4000" data-gtm-vis-has-fired-6236702_632="1">Whittaker said the final step in the cycle is interest rates rising, homes being foreclosed and housing prices falling, or at least staying flat.
</div>
<div class="_1lC_G">"The latest interest rate cut puts Australia on a slippery slope.</div>
<div class="_1lC_G"> </div>
<div class="_1lC_G">"With rates at historic lows, a cut from 1.5 per cent to 1.25 per cent will do nothing to stimulate the economy.</div>
"Rates are now so low that any changes can make little difference to the economy," he suggested.
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j.ballantyne1990-6AQqhLzZaK

Noel Whittaker says RBA rate cut will lure FHB homebuyers into nightmare journey

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As you would have heard already, earlier today the Reserve Bank Board decided to lower the cash rate by a quarter of a percentage point to 1¼ per cent. This decision comes after more than 2½ years in which we have held the cash rate steady. The last change was back in August 2016.
At its core, today's decision was taken to support employment growth and to provide greater confidence that inflation will be consistent with the medium-term target.
I want to emphasise that the decision is not in response to a deterioration in our economic outlook since the previous update was published in early May. The economic outlook remains reasonable, with the main downside risk being the international trade disputes, which have intensified recently. The Australian economy is still expected to strengthen later this year, supported by the low level of interest rates, a pick-up in growth in household disposable income, ongoing investment in infrastructure and a brighter outlook for the resources sector. So today's decision does not reflect a weaker outlook. Rather it reflects the fact that, even with the expected pick-up in growth, the Australian economy is likely to have spare capacity for a while yet.
Today's easing of monetary policy will help us make further inroads into that spare capacity. It will assist with faster progress on reducing unemployment and will help achieve more assured progress towards the inflation target. So that is our rationale.
I know that many of you are likely to have questions about today's decision. I would like to take this opportunity to provide answers to some of your probable questions. I am also happy to answer your other questions after my prepared remarks.
The four questions that I thought it would be useful to answer are the following:
<ol>
<li>Why did the Board act today, after having held the cash rate steady for more than 2½ years?</li>
<li>Are there more interest rate reductions to come?</li>
<li>Should today's reduction be fully passed through to mortgage rates? and</li>
<li>What about the savers – has the Board forgotten about them?</li>
</ol>
First, why move now, after holding steady for so long?
The answer is the accumulation of evidence. As you would expect, the Board is constantly sifting through masses of data and seeking to understand what are often conflicting signals about the economy. As we have gone about this task over recent times, there has been a progressive accumulation of evidence in support of two conclusions.
The first is that inflation pressures are subdued and they are likely to remain so.
And the second and related conclusion is that there is still significant spare capacity in the Australian labour market.
The most recent batch of data has provided further evidence in support of both conclusions. The March quarter CPI was low and it was below expectations, as was the previous reading on inflation. In addition, the wage data for the March quarter confirmed that wages growth remains subdued, although it has picked up from a year ago. And the recent labour market report also confirmed that strong employment growth is not making material inroads into spare capacity in the labour market. The Board judged that the accumulation of this further evidence meant that it was now appropriate to adjust monetary policy.
Given the importance of these two conclusions, I would like to elaborate a little on them and explore their implications.
The subdued inflation pressures reflect a number of factors. These include slow growth in wages, increased competition in retailing, the adjustment in the housing market – with rents increasing at the slowest pace in decades – and various government initiatives to reduce the cost of living pressures on households. These factors are all putting downward pressure on prices and they are likely to remain with us for some time yet.
Collectively, these factors have contributed to delayed progress in returning inflation to the 2–3 per cent target range. In underlying terms, inflation has now been below 2 per cent for three years and the latest reading was 1½ per cent. Looking forward, inflation is still expected to increase, but it is unlikely to be comfortably within the 2–3 per cent range for some time yet. So the progress on returning inflation to target is more gradual than we had hoped.
It is important to remember, though, that our inflation target is intentionally flexible and that the Australian economy has benefited from this flexibility over the past 25 years. The Board is aiming to ensure that Australia has an average inflation rate of between 2 and 3 per cent over time. The focus is on the average and the medium term.
We have never sought to have inflation always between 2 and 3 per cent. The RBA adopted flexible inflation targeting before other central banks, and this flexibility has served us well. It has allowed the Board to set monetary policy so as best to achieve its broad objectives, with the ultimate aim of contributing to the economic prosperity and welfare of the people of Australia. It has also allowed the Board to look through temporary factors affecting inflation.
This flexibility, however, is not boundless. The point of our inflation target is to provide a strong medium-term anchor that helps deliver low and stable inflation, which, in turn, is an important precondition to sustainable growth in employment and incomes. If inflation stays too low for too long, it is possible that inflation expectations move lower – that Australians come to expect sub-2 per cent inflation on an ongoing basis. If this were to happen, it would be harder to achieve the medium-term inflation goal. So we need to guard against this possibility.
Moving on to our conclusion about spare capacity in the labour market.
For some years, most estimates of full employment, including our own, equated to an unemployment rate of around 5 per cent – it was thought that if unemployment went below that for too long, inflation would rise and become a problem. But, given the combination of the labour market and inflation outcomes we have seen of late, our judgement now is that we can do better than this – that we can sustain an unemployment rate of 4 point something.
It is also worth noting that the supply side of the labour market is turning out to be more flexible than we had earlier expected. The recent evidence is that when jobs are there, more people join the labour force and other Australians stay in work longer. Reflecting this, the participation rate is currently at a record high, despite demographic shifts that we anticipated would reduce participation. It is also the case that people are prepared to work extra hours when there is strong demand for their labour. Together, these observations support the conclusion that there is still spare capacity in the labour market and this is likely to remain the case for a while yet. The recent data have given us more confidence in this assessment and we have responded to this.
Over the past few years, one concern has been that lower interest rates could add to the medium-term risks facing the Australian economy as a result of high household debt. We need to keep a close eye on this issue, but this concern has receded recently. Lending practices have been tightened considerably and many lenders have become quite risk averse. The demand for credit has also slowed due to the changed dynamics of the housing market and slower income growth. So the risks on this front look to be less than they were previously.
This brings me to the second question: are interest rates going to be reduced further?
The answer here is that the Board has not yet made a decision, but it is not unreasonable to expect a lower cash rate. Our latest set of forecasts were prepared on the assumption that the cash rate would follow the path implied by market pricing, which was for the cash rate to be around 1 per cent by the end of the year. There are, of course, a range of other possible scenarios and much will depend on how the evidence evolves, especially on the labour market.
If you accept the argument that a sustainably lower rate of unemployment in Australia is achievable, the question that we should all be thinking about is: how do we get there?
It is possible that the current policy settings will be enough – that we just need to be patient. But it is also possible that the current policy settings will leave us short. Given this, the possibility of lower interest rates remains on the table. Monetary policy does have an important role to play and we have the capacity to play that role if needed.
In saying that, I also want to recognise that monetary policy is not the only option. There are certain downsides from relying just on monetary policy and there are limitations on what, realistically, can be achieved. So, as a country, we should also be looking at other options to reduce unemployment.
One option is for fiscal support, including through spending on infrastructure. This spending not only adds to demand in the economy, but it also adds to the economy's productive capacity. So it works on both the demand and supply side.
Another option is structural policies that support firms expanding, investing, innovating and employing people.
All three options are worth thinking about.
From my perspective, the best option is the third one – structural policies that support firms expanding, investing, innovating and employing people. A strong dynamic business sector is the best way of creating jobs. Structural policies not only help with job creation, but they can also help drive the productivity growth that is the main source of improvement in our living standards. So, as a country, it is important that we keep focused on this.
I will now change tack and move to the third question: should today's reduction in the cash rate be fully passed through to mortgage rates?
My usual practice in answering this question has been to explain that there are a range of other factors that influence mortgage pricing, and then say ‘it all depends’. There are often reasonable explanations for why the standard variable mortgage rate does not move in lock-step with the cash rate.
Today, though, I would like to break with my usual practice and provide a clearer answer. And that is: Yes, this reduction in the cash rate should be fully passed through to variable mortgage rates.
This answer is based on recent reductions in bank funding costs. Not only have these costs declined as a result of the change in monetary policy, but they have also declined because of movements in market-based spreads. Last year, these spreads increased and most lenders responded by increasing their standard variable rates by around 15 basis points. Over recent months, these spreads have reversed all the increase that occurred last year and returned to their 2017 levels. The result is that there has been a substantial reduction – at both the short end and the long end – in the cost of banks raising funds in wholesale markets. Average rates on retail deposits have also come down. This means that the lower cash rate should be fully passed through into standard variable mortgage rates. Full pass-through would also mean that the economy receives the full benefit of today's policy decision.
That brings me to the final question: what about the savers, have we forgotten about them?
I know this question is on the minds of a lot of Australians, especially older Australians. I am reminded of this daily as people write to me telling me how the already low deposit rates are affecting their income. I am expecting to receive more such letters and emails after today's decision.
The Board had a thorough discussion of this issue at our meeting today. We recognise that many Australians have saved hard and rely on interest from term deposits to support their income and spending. Today's decision will reduce their income from this source and we understand why they would be disappointed with the outcome of today's meeting.
At the same time as paying close attention to this issue, the Board considered what was best for the overall economy. Our judgement is that lower interest rates will help the economy as a whole. At the moment, this benefit is likely to come mainly through two channels. The first is a lower value of the exchange rate than otherwise would have been the case. The second is a boost to the disposable income of the household sector. In aggregate, the household sector pays around two dollars in interest for every dollar it receives in interest income. So, in aggregate, lower interest rates reduce the net interest payments of the household sector and so boost overall disposable income.
In time, we would expect the lower exchange rate and the boost to disposable income to lead to more jobs, lower unemployment and a stronger economy. This should benefit us all, although I recognise that in the short run the effects are felt unevenly across the community.
It is partly because of this unevenness that I want to repeat a point I made in answering the second question. And that is: the best approach to delivering lower unemployment and a stronger economy is through structural policies that support firms expanding, investing, innovating and employing people. These policies can have distributional effects too, but the benefits are more broadly based. So, as I said, as we ease monetary policy, it is in the country's interest that other policy options are considered too.
That brings me to the end of my four questions and answers. I hope that this has helped you understand the Board's thinking and why we took the decision today.
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Why the RBA cut rates to record lows: Governor Philip Lowe

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Westpac have cut their interest rate after today's RBA meeting by 0.2 percent.
It is understood there will be higher rate cuts for its IO borrowers at 35bps for investors.
Westpac's rate cut is effective Tuesday 18 June.
David Lindberg at Westpac said the bank took many factors into account in making the decision.
“We are operating in a historically low interest rate environment, which creates the opportunity for home-owners to get ahead on their repayments,” he said.
“It is also a good time for first home buyers to get onto the property ladder with some of the lowest rates in the history of the Australian mortgage market available.”
Westpac announced a range of mortgage interest rate cuts for variable home loan customers and introduced a new first home buyer special for owner occupier principal and interest customers with a fixed rate of 3.49% p.a. for five years.
Westpac customers who choose to package their home loan with the Premier Advantage package receive an additional discount on their home loan rate.  
The following interest rate changes will come into effect on Tuesday 18 June, 2019.  
<ul>
<li>Variable home loan (owner occupier) rate has been reduced by .20% p.a. to 5.18% p.a. for customers with principal and interest repayments.</li>
<li>Variable residential investment property loan reduced by .20% p.a. to 5.73% p.a. for customers with principal and interest repayments.</li>
<li>Variable home loan (owner occupier) rate reduced by .20% p.a. to 5.77% p.a. for customers with interest only repayments.</li>
<li>Variable residential investment property loan rate reduced by .35% p.a. to 6.09% p.a. for customers with interest only repayments.</li>
</ul>
 
David Lindberg, Westpac Chief Executive, Consumer said today’s rate change was carefully considered by the business. 
Currently 69% of Westpac home loan customers are ahead on their repayments, including offset balances.
NAB and CBA cut by the full 0.25 percent.
ANZ cut by 0.18 percent, saying it also had obligations to its deposit holders.
ANZ's new lowest rate will be 3.63%, however they are only passing on a cut of 0.18 basis points effective June 14.
Effective from June 25 CBA's standard variable rate home loans will be reduced by 0.25% p.a.
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Westpac to cut by 0.2% but more for IO borrowers

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Housing markets had remained weak, the RBA has noted today.
The rental vacancy rate in Sydney had increased to the highest level in around 15 years and housing prices in established markets had continued to decline.
"More positively, the pace of price declines had moderated and the modest recovery in auction clearance rates since the start of the year had been sustained," it added.
Sales conditions for off-the-plan apartments and new detached housing had been difficult.
The spike in residential building approvals in February had largely been unwound in March, confirming that underlying conditions for new dwelling activity remained weak.
Data released since the previous meeting had shown that the pipeline of residential work to be done had decreased in the December quarter, but remained high.
RBA board members noted that the forecasts for dwelling investment suggested that population growth could exceed growth in the stock of housing towards the end of the forecast period.
The minutes noted housing credit growth had slowed over the preceding year, but the monthly pace of growth had stabilised over recent months.
In three-month-ended annualised terms, growth in housing lending was around 4½ per cent for owner-occupiers and ½ per cent for investors.
Loan approvals also appeared to have stabilised in recent months.
The central bank noted that, although lending practices were tighter than they had been for some time, the decline in housing credit growth over the preceding year had been driven largely by weaker demand for finance, associated with the decline in housing prices.
The average interest rate charged on outstanding variable-rate housing loans had remained broadly steady.
While banks had increased their standard variable reference rates since mid 2018, rates on new loans had remained materially below the average of those on outstanding loans.
Members noted that banks had recently reduced the rates charged on new fixed-rate loans.
Members discussed the outlook for the domestic labour market in some detail. 
As in the previous meeting, members discussed the scenario where inflation did not move any higher and unemployment trended up, recognising that in those circumstances a decrease in the cash rate would likely be appropriate. 
As noted at the previous meeting, members recognised that the effect on the economy of lower interest rates could be expected to be smaller than in the past, given the high level of household debt and the adjustment that was occurring in housing markets. 
"Nevertheless, a lower level of interest rates could still be expected to support the economy through a depreciation of the exchange rate and by reducing required interest payments on borrowing, freeing up cash for other expenditure," it noted.
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jchancellor-FAypfDUnLy

Housing markets remain weak: RBA minutes

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Australia’s headline inflation rate softened to just 0.1 per cent for the March quarter pushing the annual rate down in seasonally adjusted terms to 1.3 percent from 1.8 percent.
Today’s inflation figures for the Q1 showed a bleak picture, with both the headline and core figures missing economist expectations.
With the CPI coming in at zero, the Aussie dollar plunged. The Aussie dollar fell over half a cent against the greenback in quick response.
Interest rate cuts are now surely on the table at the next RBA meeting, economists suggest.
Columnist Pete Wargent described it as an "epic miss."
"The incompetence, ineptitude and policy failure of the RBA is now there for all to see," tweeted Stephen Koukoulas.
"An interest rate cut on 7 May - based on a weak economy - will be hugely interesting during the election campaign," he added.
The core figures matched expectations, keeping the annualized inflation rates below the Reserve Bank of Australia’s (RBA) 2-3 percent target range.
The Commsec economist Craig James noted: "Inflation is clearly not an issue."
"The published rate of inflation didn’t budge in the first three months of the year.
"Strip out volatile items and ‘underlying’ prices advanced around 0.2 per cent.
"In annual terms, annual inflation stands at a 2½-year low.
"Arguably the annual rate of ‘underlying’ inflation is the lowest on record at 1.4 per cent," James said.
James said the door "remains ajar to a rate cut."
"That is, should a rate cut be needed.
"The unemployment rate remains near decade lows – indeed the NSW trend jobless rate is at record lows."
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CPI stays low

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

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RBA members have noted their uncertainty about the extent and speed of the downturn in the dwelling investment cycle.
Dwelling investment was likely to have been close to its peak in the second half of 2018, the February minutes of the central bank advised.
"Although there was still a large pipeline of residential work to be done and few signs that projects already under way were being cancelled, it had become more difficult for new apartment projects to obtain finance, and building approvals were the lowest they had been for five years. 
"As a result, dwelling investment was expected to remain at a high level in the near term, but then to decline faster than previously expected."
From a longer-run perspective, the RBA members assessed that, following such large increases in housing prices, the effect of the recent price falls on overall economic activity was expected to be relatively small. 
"However, members observed that if prices were to fall much further, consumption could be weaker than forecast, which would result in lower GDP growth, higher unemployment and lower inflation than forecast. 
"From a financial stability perspective, tighter lending standards, an improving labour market and low interest rates were all likely to support households' capacity to service their debt. 
"Few households were in negative equity positions despite the falls in housing prices, implying that banks' losses would be limited even if household financial stress were to become more widespread."
Members spent some time considering a paper on the implications of recent developments in housing markets for the economic outlook.
After rising by almost 50 percent over the five years to September 2017, national housing prices had fallen by around 8 per cent to be back around mid-2016 levels.
Members noted the significantly different developments in housing prices across the country.
Housing prices had fallen by 12 percent in Sydney and by 9 percent in Melbourne from their peaks in 2017.
There had also been significant falls in housing prices in Perth and Darwin over recent years.
By contrast, housing prices in Hobart and Canberra had increased over 2018, while housing prices in Adelaide, Brisbane and many regional centres had been flat.
Members noted that the cumulative falls in housing prices in Sydney and Melbourne were relatively large by historical standards, and that it was unusual for housing prices to fall significantly in an environment of low mortgage interest rates and a declining unemployment rate.
Members noted that some of the dynamics in housing prices could be explained by the fact that the supply of housing does not respond quickly to changes in demand.
In particular, the run-up in housing prices had occurred during a period when housing supply had not picked up sufficiently to match higher demand from more rapid population growth.
Over time, higher housing prices had eventually led to a sizeable increase in supply, but this had taken longer than in previous cycles.
Another factor weighing on prices was a noticeable decline in demand from foreign buyers in recent years, which had also been apparent in housing markets in some other economies.
The RBA minutes noted rental vacancy rates are one key indicator of the balance of supply and demand in the housing market.
In most states, rental vacancies had been around or somewhat below average at the end of 2018, suggesting supply and demand for housing had been roughly balanced.
In Melbourne, despite the fall in prices and large increase in supply, the vacancy rate had declined.
By contrast, rental vacancies in Sydney had been increasing and advertised rents had fallen.
Members also noted that housing credit growth had declined further in preceding months and that there had been a notable drop in loan approvals by the major banks.
Growth in lending to investors had slowed sharply since mid 2017 to be close to zero, while growth in lending to owner-occupiers had moderated to around 5½ per cent in six-month-ended annualised terms.
The slower growth in lending for housing over the preceding year appeared to reflect weaker demand, the minutes advised.
"Nevertheless, credit conditions for some borrowers had remained tighter than they had been for some time following the strengthening of lending policies and practices over recent years.
"Liaison with mortgage brokers suggested that the increased public scrutiny associated with the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry may have led some individual loan assessors at banks to apply stricter criteria than specified in official lending requirements.
"However, banks reported that while loan assessors had been referring more approvals to credit officers, final loan approval rates had remained high.
"Moreover, lenders had continued to compete for borrowers of high credit quality by offering new loans at lower interest rates than those offered on existing loans."
To read the full minutes, <a href="/expert-insights/finance/minutes-of-february-2019-monetary-policy-meeting-of-the-reserve-bank-board">click here.</a>
 
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RBA has uncertainty about the extent and speed of the downturn in dwelling investment cycle: February 2019 minutes

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The Reserve Bank assistant governor Christopher Kent says the recent depreciation in the Australian dollar has been "helpful" at a time where inflation remains weak and the economy is still using up spare capacity.
“While the exchange rate is still within the relatively narrow range of the past few years, the recent depreciation is helpful at the margin given that there remains spare capacity in the economy and inflation remains below target,” Reserve Bank of Australia Assistant Governor Christopher Kent said in a speech in Melbourne last Friday hosted by FX provider XE.
<div class="hardwall" data-position="2">The address traced the fluctuating outlook in recent months as “modest revisions” to global economic growth and inflation combined with greater attention to downside risks from central banks and investors.</div>
<div class="hardwall" data-position="2"> </div>
<div class="hardwall" data-position="2">"After a lengthy period of relative stability, global financial markets have been more volatile over the past few months.</div>
<div class="hardwall" data-position="2"> </div>
<div class="hardwall" data-position="2">"The incoming data from around the end of 2018 was associated with a tightening in financial conditions: global equity prices declined; corporate credit spreads widened; issuance of corporate debt eased; and volatility picked up across most markets.</div>
<div class="hardwall" data-position="2"> </div>
<div class="hardwall" data-position="2">"And in the space of only a couple of months, the market's expectations for monetary policies changed markedly and there was a notable downward shift in yield curves."</div>
<div class="hardwall" data-position="2"> </div>
<div class="hardwall" data-position="2">Kent noted local money markets switched their assessment of the next move in the cash rate to “more likely to be down than up.”</div>
<div class="hardwall" data-position="2"> </div>
<div class="hardwall" data-position="2">Earlier this month Governor Philip Lowe tempered the bank's more optimistic language when the RBA kept the cash rate at a record low 1.5 per cent for a 30th month, but dropped its longstanding prediction that an improving economy meant the next move was likely to be upwards.
</div>
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A$ adjustment assisting economy: RBA's Christopher Kent

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A cash rate cut from the Reserve Bank of Australia (RBA) seems more likely now than it has in years, according to Finder, Australia’s most visited comparison site.
All 28 experts and economists in Finder’s <a href="https://protect-au.mimecast.com/s/tJ9mCD1v12hB883nI54aSQ?domain=finder.us9.list-manage.com" target="_blank" data-saferedirecturl="https://www.google.com/url?q=https://protect-au.mimecast.com/s/tJ9mCD1v12hB883nI54aSQ?domain%3Dfinder.us9.list-manage.com&amp;source=gmail&amp;ust=1549307762488000&amp;usg=AFQjCNGD0AHNNDFlCBL10yngE2qDdo6OcQ">RBA cash rate survey</a> are expecting a hold at 1.50% on Tuesday, but their predictions swung dramatically about the direction of the next move to come. For the past two years, about 80% of experts have predicted a hike as the next cash rate move. This month, only 40% (11/28) did so. Stephen Koukoulas, managing director at Market Economics said he could see a change happen in as little as a month. "[The RBA] will acknowledge the economy is weaker than when it last met and will signal a change in bias towards an easing.  “It may wait a month or two before acting on that bias," Koukoulas said. Graham Cooke, insights manager at Finder, said of the panelists who put a date on their rate drop, predictions were pretty evenly spread throughout the year from March to November.  “This is the most dramatic shift I have seen in four years of running our cash rate survey.  “Economists are now swinging significantly in favour of a cut this year, but nobody can agree on exactly when this will happen,” Cooke said. <img src="https://ci6.googleusercontent.com/proxy/jiQUG11OCkOuDP24-WepAOoFyrIk9BDpJgv2AKWF_icw0Ye8ix0d5ISsYpWprAnHuVcasZ_fHx4aki29ZKq7UToHuGO5TTl9hM5aYykkShFrjcDhrMhuBikrl8cdYTAs-5ILoyi0PMSCulAN5UCcItvUGC6yPd4m1y4=s0-d-e1-ft#https://gallery.mailchimp.com/cc5e9bce699fa1d71a67cf499/images/5db05eb6-ce37-4c6f-a434-8ecf89c51a59.png" width="600" height="355"> Cooke said that the severity of the housing downturn in recent months was the top reason cited by experts who changed their prediction.  “Along with housing concerns, inflation is still sitting below two per cent, so another cut may be needed to stimulate the economy.  “The only issue with further cuts is that it reduces the ability of the RBA to adapt to softer economic conditions in the future,” Cooke said.  Finder’s Economic Sentiment Tracker has also seen a significant shift.  Positivity regarding employment in Australia fell from 56% in December to just 29% in February.  Economists indicated that, though unemployment is still low, a weakening of job prospects looms on the horizon.  Koukoulas said the economy is on a slower growth path,  judging by GDP.  “Looking at many economic factors, it looks like growth will be weaker in the next quarter.  “The labour market tends to lag behind the greater economy by a couple of quarters. “This trend – combined with lower job vacancy advertising numbers – indicates a risk that employment will be weaker in the first half of this year versus previous years,” Koukoulas said.        <img src="https://ci3.googleusercontent.com/proxy/5_PXx_mfrsOnYwep55QO0q4W2B8Ghup7SDytJG92y9i9uMgMlr3E06ZaOfSYGdSC_9a_nRaOLIrB4VT0mi6Ll6r5UhoQpSOJp2x40ohsTmrypEMuXbtqr5FYaiKHo121x-Qk4I-tbxjp4VJaGjMImWWZii9dJWoslZs=s0-d-e1-ft#https://gallery.mailchimp.com/cc5e9bce699fa1d71a67cf499/images/82b136ff-b0b6-4e3b-bfa6-d84b2ff9d648.png" width="550" height="382"> Cooke said the results aren’t all gloom and doom. “With house prices continuing to tumble, the outlook for housing affordability remains strong. “It’s true some lenders are making out-of-cycle rate hikes – we’ve seen 96 i<a href="https://protect-au.mimecast.com/s/rzkpCE8w82hWZZpgFp6ssI?domain=finder.us9.list-manage.com" target="_blank" data-saferedirecturl="https://www.google.com/url?q=https://protect-au.mimecast.com/s/rzkpCE8w82hWZZpgFp6ssI?domain%3Dfinder.us9.list-manage.com&amp;source=gmail&amp;ust=1549307762489000&amp;usg=AFQjCNHKpyCRSjUveLfLU96MBZVAB7QunQ">n the </a><a href="https://protect-au.mimecast.com/s/lMzUCGv0v2sJzzA0CQwB-C?domain=finder.us9.list-manage.com" target="_blank" data-saferedirecturl="https://www.google.com/url?q=https://protect-au.mimecast.com/s/lMzUCGv0v2sJzzA0CQwB-C?domain%3Dfinder.us9.list-manage.com&amp;source=gmail&amp;ust=1549307762489000&amp;usg=AFQjCNExrbXqujboxTfDArQUy2YXJpYoFw">loans we compare on Finder</a> so far this year – but not all banks are raising rates. In fact we’ve also seen 69 lenders cut rates. “The bottom line is if you’re looking to buy now, it’s overwhelmingly a buyer’s market. Use your bargaining power and look for value before you buy,” Cooke said.       <img src="https://ci4.googleusercontent.com/proxy/kpJqBzCgbPeX5NZzFJOP3U_BaptvJcaG5I4ZczF0wQ5Lmyd8JHTObAXDUApObu4ZJZxZYeutkcvEDGEe40Zd85JDnCP5d4y-d53RaSZvNy-eU8l0az_BfD1yBrA6H92JEIEoXUdCvR4y5yIfyoODMhkAqYTaWCCqwrs=s0-d-e1-ft#https://gallery.mailchimp.com/cc5e9bce699fa1d71a67cf499/images/ede2ba44-596b-4d3d-b21e-79a352b72bf9.png" width="550" height="358"> Here’s what our experts had to say: Shane Oliver, AMP Capital: "While economic data has generally been soft since the last Board meeting in December, it's unlikely to have been weak enough yet to prompt the RBA to cut rates, particularly given that its bias has still been to raise rates." Alison Booth, ANU: "The fundamentals have not yet altered sufficiently to warrant [the RBA] to change." John Hewson, ANU: "Data uncertainty and concern economy is slowing." Malcolm Wood, Baillieu: "Underlying inflation is below the low end of the RBA's target band and underlying economic momentum appears to be deteriorating." Ben Udy, Capital Economics: "The housing downturn is becoming more severe and will weigh on the economy over 2019. But given the labour market remains in good shape for now, we suspect the RBA will remain on hold for the time being." Michael Blythe, CBA: "Reasonable economic backdrop says next move is probably up.  But low inflation means no hurry to act." Trent Wiltshire, Domain: "The RBA is very reluctant to cut rates. Despite some weak economic data since the December meeting the RBA will maintain a fairly optimistic outlook for the economy." Peter Gilmore, Gateway Bank: "Growth is still likely to be above trend." Mark Brimble, Griffith Uni: "There is little net direction from indicators, with an overall bias to more support being needed given the out of cycle increases of rates by institutions." Tim Nelson, Griffith University: "There is no strong case for an adjustment of monetary policy." Peter Haller, Heritage Bank: "Economic conditions have not materially changed since the previous RBA meeting in December and there is no basis for a change at this time." Tim Reardon, Housing Industry Association: "GDP remains solid. Unemployment low and no evidence of inflationary pressure." Michael Witts, ING: "Despite the increased market talk about the prospect of an easier stance from the RBA, if this scenario is to emerge it is likely to be around mid year. Underlying economic data remains positive for the time being." Peter Boehm, KVB Kunlun: "No reason to move rates at this stage." Leanne Pilkington, Laing+Simmons: "Some economists now believe the next official rate movement will be down instead of up. The Reserve Bank will need firm justification as a move either way will be heavily scrutinised. We don’t see any justification to adjust rates at this time." Stephen Koukoulas, Market Economics: "It will acknowledge the economy is weaker than when it last met and will signal a change in bias towards an easing. It may wait a month or two before acting on that bias." John Caelli, ME Bank: "Given low unemployment and wages are starting to rise, the Reserve Bank is unlikely to cut rates in the near term. Likewise, with house prices continuing to fall, tightening credit, and CPI below the target band, a rise in the cash rate is also unlikely. It’s wait and see for now." Michael Yardney, Metropole Property Strategists: "The jobs growth figures for December will give the RBA comfort at a time of slower local economic growth and difficult world economic circumstances. With no wages growth and our challenging property markets and the real likelihood of further falls in property values especially in Sydney and Melbourne, the RBA will now have to seriously consider the option of lowering rates this year." Mark Crosby, Monash University: "While the international situation is deteriorating, there is no reason to move rates at the February meeting." Jacqueline Dearle, Mortgage Choice: "As wages continue to flat line and spending appears to be fuelled by a mix of credit and savings, consumers may be entering 2019 with a slightly pessimistic view. Continued low inflation, that’s sitting below Governor Lowe’s target; and the softening property market coupled with the tightened lending environment, only adds to disappointing Australian GDP/economic and global concerns stemming from Trump’s trade war with China. The upcoming federal election also adds a feeling of stasis to lacklustre economic data. In February, a myriad of signposts continue to suggest rates remaining on hold but down the track the next move in the cash rate could well be downward. However this could impact on the Aussie dollar, giving the RBA a lot of big issues to consider as the New Year kicks off." Dr Andrew Wilson, My Housing Market: "Although recent data is clearly increasing the chances of a near-term cut in official rates, recent statements by the RBA continue to indicate an ongoing conservative stance on rate settings. This however is likely to change if GDP data to be released on March 6 is again disappointing. In those circumstances the RBA will be motivated to cut rates  - particularly prior to the onset of a likely lengthy federal election campaign." Matthew Peter, QIC: "The market is now pricing the next move of the RBA to be a 0.25% cut sometime in early 2020 as China slows and the housing market continues to correct. These headwinds are yet to derail the economy, as shown by the strong December labour market data. The RBA will stay on hold until 2020, but failing a crash in China and the housing market, the next move in rates will be up." Noel Whittaker, QUT: "There is no way they will increase them with the housing market the way it is – and I can't see them reducing them." Nerida Conisbee, REA Group: "Economic data coming out is still too mixed to make a decision to move rates. While CPI remains low, and GDP growth in September was lower than expected, unemployment is now at just 5%. In Sydney, it is at its lowest rate since 1974." Christine Williams, Smarter Property Investing P/L: "The economy is not as strong as expected.  Also I believe the RBA is waiting for Royal Commission Report to be released." Janu Chan, St.George Bank: "There continues to be strength in the labour market. However, the downside risks for the global economy has increased. The Australian economy is also not growing as strongly as previously thought. The balance of these risks suggests the RBA could tone down its stance of the next move being up but to remain on hold for some time. However, not likely to the extent that the RBA will be ready to lower rates." Richard Holden, UNSW: "No chance they raise given housing and inflation."
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RBA to hold rates in February, but 2019 cut prospect looms

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The December meeting of the RBA has seen the cash rate remain on hold at 1.5 percent.
It has now stayed at record lows for 28 consecutive months, and 26 consecutive meetings.
The August rate hold marked the two year anniversary of the last change to the cash rate by the RBA.  
Australian mortgage holders could "go a decade without experiencing an increase in official interest rates by the Reserve Bank of Australia (RBA), says mortgage broker 1300HomeLoan Managing Director John Kolenda.
"Its last rate rise from 4.5 per cent to 4.75 per cent was way back in November, 2010.
“Since the central bank last lifted official rates there have been 12 rate reductions, with the RBA now staying on the sidelines for more than two years,” Mr Kolenda said.
“With no evidence of a significant improvement in the domestic economy, many forecasters expect the cash rate will remain on hold through 2019 and also the following year.
“That means a whole generation of mortgage holders could go an entire decade without seeing official rates rise, although they will have experienced out of cycle rate movements from lenders.”
CoreLogic's head of research Tim Lawless said its hard to gauge the RBA's view on housing market conditions.
"The longest period of interest rate stability on record has extended out another month, with the RBA keeping the cash rate on hold at 1.5% where it has remained since they cut the cash rate by 25 basis points in May and August of 2016. 
"Considering the diversity of economic conditions, the hold decision comes as no surprise. 
"Labour markets are improving, but wages growth remains sluggish and inflation has softened. 
"It’s a bit harder to gauge the RBA’s view on housing market conditions, with the RBA continuing to call out weakening conditions in Sydney and Melbourne. 
"CoreLogic data to the end of November highlighted that the Sydney market has already recorded a 9.5% decline in values since peaking in July last year and will likely surpass the previous record peak to trough decline of 9.6% which was set during the last recession between 1989 and 1991.
"Despite this weakness in the largest cites, dwelling values in Sydney remain 41% higher than they were five years ago and Melbourne values are still 38% higher both of which show five year growth rates well in excess of most other capital city markets. 
"Additionally, five of the eight capital cities have posted a capital gain over year to date however, from a macro view they have much less of an influence on the national figures than Sydney and Melbourne do.
"To date we haven’t seen the housing downturn impacting on household consumption or saving, however this is likely to be a key factor the RBA will be monitoring.  
Siobhan Hayden, COO of online home loan marketplace HashChing, said Christmas is the best time to hunt around for a new home loan.
“The Christmas and New Year period is an expensive time of year, and one that forces many of us to consider our current financial position. The great thing is that it’s also a highly competitive season in the market – making it the perfect time to hunt around for a new home loan, or even help a loved one find the best rate on theirs.
“It’s fantastic to see an uptick in borrower’s actively taking charge of their financial position and getting ahead of likely interest rate rises in 2019.”
“As anticipated, falling house prices have warmed the market, particularly in the lower end of the market (&gt;$1.3m), however with the cash rate expected to increase next year it will be interesting to see whether this demand continues."
HashChing's broker survey found almost half (48 per cent) of the brokers surveyed agree with Morgan Stanley’s forecast that national house prices could fall by up to 15 per cent in 2019. 
 
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