Brisbane-based developer <a href="https://www.apartments.com.au/developers/red-co">Red &amp; Co</a> has made a striking debut on the Gold Coast, officially unveiling its $250 million COMO development in Varsity Lakes, a lifestyle-driven residential project anchored by an extensive rooftop wellness and activity precinct.

Having recently launched to market, construction has already been fast-tracked by <a href="https://www.apartments.com.au/builders/5point-projects">5Point Projects</a>, ensuring momentum continues on what is set to become a landmark residential address for the growing Varsity Lakes community.

Located at 22 Lake Street, Varsity Lakes, <a href="https://www.apartments.com.au/new-apartments/como-varsity-lakes-22-lake-street-varsity-lakes-qld-4227">COMO</a> will comprise 156 apartments across 16 levels, comprising one-, two- and three-bedroom residences designed for modern living. However, it is the project’s rooftop amenity offering that sets COMO apart.

[smartcode_project:default project_id=135546 project_image_fid=363510]

Designed as a dedicated wellness and recreation hub, the rooftop will feature a 25-metre lap pool, fully equipped gymnasium, and multiple pickleball and paddleball courts - amenities rarely seen in boutique apartment projects.

Residents will also have access to a sauna and plunge baths, while landscaped gardens and relaxation zones will provide tranquil spaces overlooking sweeping panoramic views across the Gold Coast skyline.

The rooftop precinct has been designed to function as the social and wellness heart of the development, encouraging residents to embrace an active, balanced lifestyle within their own building.

&nbsp;

[smartcode_project:default project_id=135546 project_image_fid=363512]

Red &amp; Co director David Laverty said the amenity offering was central to the project’s design from the outset.

“Amenities were at the forefront of our decisions,” Laverty said.

“Buyers today are looking for more than just an apartment - they want a lifestyle that promotes health, connection and balance.

“The rooftop at COMO has been designed to be the epicentre of that lifestyle, with a suite of wellness and recreation facilities that are quite unique for a boutique development of this scale.”

&nbsp;

[smartcode_project:default project_id=135546 project_image_fid=363514]

Designed by <a href="https://www.apartments.com.au/architects/bda-architecture">BDA Architecture</a>, the residences prioritise liveability, featuring spacious layouts, 2.7-metre ceilings and high-quality finishes throughout.

The development sits beside Bond University, placing residents within walking distance of education, retail and dining options within the vibrant Varsity Lakes precinct, including Robina Town Centre, Varsity Lakes Train Station and a range of leading schools.

[smartcode_project:default project_id=135546 project_image_fid=363511]

Laverty said the location was a key driver behind Red &amp; Co’s decision to bring the project to the Gold Coast.

“<a href="https://www.apartments.com.au/developments/varsity-lakes-qld-4227">Varsity Lakes</a> was a clear choice for us to invest in as it’s a lifestyle hub that seamlessly blends lakeside living with urbanity,” he said.&nbsp;

“Como will capitalize on this great location, delivering a project that not only creates premium homes, but a lifestyle defined by community, wellbeing, and connectivity.”

Red &amp; Co has delivered more than 500 apartments and townhouses across 26 projects in Brisbane in recent years, with COMO marking the company’s first major Gold Coast development.

[smartcode_project_cta:default project_id=135546]

Joel Robinson

Red & Co unveils amenity-rich Como development in Varsity Lakes

Gold Coast developer&nbsp;<a href="https://www.apartments.com.au/developers/big-projects">Big Projects</a> has secured approval for its second Mermaid Beach project.

The developer, currently selling <a href="https://www.apartments.com.au/new-apartments/the-frederick-mermaid-beach-2265-gold-coast-highway-mermaid-beach-qld-4218">The Frederick in Nobby Beach</a>, has secured approval for its next project just 1.5 kilomnetres up the road.

The new development, dubbed&nbsp;<a href="https://www.apartments.com.au/new-apartments/glenelg-residences-2462-2472-gold-coast-highway-mermaid-beach-qld-4218">Glenelg Residences</a>, has been designed by BDA Architecture and&nbsp;will have just under 100 apartments across an 11-storey building&nbsp;at 2462–2472 Gold Coast Highway, on the corner of Glenelg Avenue just under 300m from the future Mermaid Beach Light Rail stop.

The apartments, a mix of two- and three-bedrooms, will sit above a retail-focused ground plane and under extensive rooftop resident amenities.

<img alt="Exclusive: Big Projects plot Mermaid Beach apartment development, Glenelg Residences" 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/Screen%20Shot%202024-06-11%20at%209.55.04%20am.png?VersionId=z6NV4izeuvhBSSVlY6vK6TPO1LxrFeaG" />

BDA said in its planning submission that the project is intended to support the area’s transition toward higher-density, mixed-use living. “This project offers the opportunity to generate appropriate higher-intensity development within the future Light Rail corridor of <a href="https://www.apartments.com.au/developments/mermaid-beach-qld-4218">Mermaid Beach</a>,” the submission noted.

At ground level, Glenelg Residences will include eight retail tenancies designed to activate the street frontage, complemented by a basement bar offering an additional hospitality element. Above, residents will have access to a rooftop amenity deck featuring an infinity pool, hot and cold plunge spas, day beds, and barbecue facilities.

The architectural approach adopts a restrained material palette of brick, textured concrete, and integrated landscaping, with cantilevered concrete frames and cascading planting intended to soften the built form. BDA described the design as aiming to create “a memorable sculptural mid-rise mixed-use building” that responds to both its coastal setting and urban context.

<img alt="Exclusive: Big Projects plot Mermaid Beach apartment development, Glenelg Residences" 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/Screen%20Shot%202024-06-11%20at%209.55.45%20am.png?VersionId=cpjIVBqcT_sujmo2UMWkVyLcQ7WGJHaQ" />

The approval comes as the City of Gold Coast continues to plan for significant population growth, with regional targets requiring more than 100,000 new high-density dwellings by 2046.

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Big Projects, led by Matthew and John Barrett, is part of a growing cohort of developers that deliver construction in-house, providing a high level of confidence to prospective purchasers.
</section>

[smartcode_project_cta:default project_id=150260]

Big Projects secures approval for Glenelg Residences in Mermaid Beach

Sherpa Group is ramping up its investment in the southern Gold Coast by lodging a development application for <a href="https://www.apartments.com.au/new-apartments/flourish-viver-87-griffith-street-coolangatta-qld-4225">Flourish Viveré</a>, a new $350 million project in Coolangatta.

The move comes after the group’s $27 million acquisition of the 2,029 sqm site on the corner of Griffith and Warner Street, last year.

They will develop 194 apartments across a 26-storey tower, which will become Sherpa’s largest project to date.

Viveré will be the next chapter in the Flourish story, following closely behind Amargo, Oasis, and the Avenues in Palm Beach, as well as Symphony in Brisbane, all designed to deliver affordable housing in lifestyle-rich locations, giving locals a real chance to secure a residence close to the beachfront.

The HAL Architect-designed project will offer a diverse range of residences, from one-, two, and three- bedroom apartments to the premium Canopy range to luxury penthouses.

<img alt="Vivere" data-entity-type="file" data-entity-uuid="c85f5a7e-a22f-4745-8def-400adb3c0b35" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-04-15%20at%209.53.43%E2%80%AFAM.png?VersionId=OY.chur3BPExn1exQ2q8clHqWnW_CaBi" />

“The Gold Coast is undergoing a period of immense growth, with more people drawn to the incredible 
lifestyle that’s available, leading to strong growth in property prices,” said Christie Leet, founder of Sherpa 
Group.

“Our goal at Sherpa is to ensure locals are not priced out of the market in prime locations, which is why we 
created the Flourish collection.

“Flourish Vivere will form the next chapter in our portfolio, and we are so excited to be lodging the DA, marking our first project in Coolangatta.”

A signature of the Flourish developments is the communal rooftop. Flourish Vivere will showcase a private resident’s lounge, outdoor dining with barbecues and pizza ovens, heated pool, fully-equipped gym, and a wellness centre with sauna and steam room.

<img alt="Vivere" data-entity-type="file" data-entity-uuid="c09372cc-aae6-4458-af2e-f291bd19a5e5" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-04-15%20at%209.53.49%E2%80%AFAM.png?VersionId=Sc_RLXl5jiff.tnadogXjQJ_WIpDjf3p" />

The project is strategically located to offer a walkable lifestyle, with the Strand shopping centre, cafes, restaurants, shops and the beach, all just a short stroll away.

“We have meticulously planned Vivere to build on the Flourish legacy, creating a truly special project,”&nbsp;Leet added.

“Wellness, lifestyle and community are at the forefront of every decision we make, and that has not 
changed for Vivere.”

With the DA now lodged with the Gold Coast City Council, Sherpa has moved quickly to secure LPS Group as the builder, offering buyers a level of certainty that is rarely seen in today’s market.

Sherpa has delivered 16 residential projects over the past seven years with a pipeline of $1 billion, with more under construction.

Sherpa takes Flourish brand to Coolangatta, lays plans for Flourish Vivere 

S&amp;S Projects is boosting its investment at Rainbow Bay to more than $1 billion after the prolific Gold Coast developer acquired a new site for $20.25 million and immediately laid plans for a new luxury apartment project in the sought-after precinct.

The site, which is the company’s fifth acquisition at Rainbow Bay in the past four years, will be home to the company’s largest project to date after delivering 3 sold-out projects and construction progresses on Radia worth a combined $215m. 
S&amp;S Projects is currently finalising plans for its latest strategic acquisition, a 1,518 sqm site located 209-213 Boundary Street in Coolangatta, with a development application expected to be lodged within weeks.

The luxury residential development will build on the company’s highly successful projects at Rainbow Bay, comprising Flow, Awaken, Esprit and Radia, with Radia currently under construction by Hutchinson Builders.

“We have been unflinching in our commitment to Rainbow Bay and the transformation we have helped drive in this incredible part of the Gold Coast, which is among the city’s most desirable residential locations,” said S&amp;S Projects founder and director Paul Gedoun.

“Our fifth project will reflect the best of what we have done so far to create a lifestyle precinct that is second to none.”

The latest development, which has yet to be named, is proposed to accommodate 88 luxury apartments in a design that will immerse residents in a unique wellness lifestyle that expands on the legacy of S&amp;S Project’s earlier developments at Rainbow Bay.

The development will feature an expansive rooftop garden and wellness centre with a resort- style pool, among a host of lifestyle amenities planned for residents.

“Rainbow Bay, with its beautiful, protected beach and alongside one of the world’s best surf breaks at Snapper Rocks, is the natural wellness heartland of the Gold Coast,” said Gedoun.

“We are taking every advantage to create a truly unique rooftop wellness experience with a natural feel for residents, offering stone features throughout and an underlying theme that emulates a botanical garden.”

The latest acquisition comes as S&amp;S Projects is at the completion of Esprit and construction continues on Radia, which are part of their significant portfolio undertaken by the company at Rainbow Bay since 2022.

The $215 million Radia, which comprises 38 apartments, is currently the flagship development by S&amp;S Projects at Rainbow Bay which is expected to be completed in 2027.

Jayde Pezet, of Pezet Matheson, which has managed sales and marketing for S&amp;S Projects across their Gold Coast portfolio, emphasised the developer’s commitment to continuous improvement and excellence.

“S&amp;S Projects continue to elevate the benchmark of luxury with each development," Pezet said.

“We have worked with S&amp;amp;S on their 4 other projects in Rainbow Bay and their approach reflects a team that is constantly learning, refining, and pushing the standard higher.

“Their hyper-local knowledge and deep expertise within the luxury property sector are what truly set them apart, allowing them to deliver projects that feel both globally sophisticated and authentically connected to their coastal environment”

S&amp;S Projects plans to officially launch its latest project at Rainbow Bay in the second half of this year.

“As we embark on our largest project yet, we have pulled out all stops to create another landmark development that truly reflects the relaxed southern Gold Coast lifestyle,” Gedoun added.

S&S buys $20m Rainbow Bay site for fifth beachside apartment project

Japandi, an emerging design trend that combines Scandinavian functionality with Japanese rustic minimalism, remains relatively untested in Australia’s residential development market.

As developers look to differentiate their projects and offer something distinct to buyers, Brisbane-based developer Lantona has embraced the hybrid style for its recently launched Toowong apartment project, <a href="https://www.apartments.com.au/new-apartments/koya-residences-6-josling-street-toowong-qld-4066">Koya Residences</a>, with early response to the design proving positive.

Lantona entrusted Red Door Architecture and interiors practice Luma Design Co with delivering the Japandi brief. The approach blends Japanese minimalism with Scandinavian functionality, emphasising warm, restrained interiors, natural materials and clean lines. Drawing on the Japanese concept of wabi-sabi (beauty in imperfection) and the Scandinavian principle of hygge (comfort and cosiness), it creates serene, uncluttered and sustainable living environments.

These design principles are expressed throughout the Josling Street development, both in its exterior form and across the 40 one-, two- and three-bedroom residences within.

[smartcode_project:default project_id=150787 project_image_fid=366229]

Koya reflects a deliberately scaled approach, with the five-storey form designed to align with the surrounding residential streetscape rather than dominate it.

“Koya is conceived as a building that sits comfortably within its surroundings. Every decision, from material selection to spatial planning, has been guided by long-term liveability and enduring relevance,” the developer said.

[smartcode_project:default project_id=150787 project_image_fid=366243]

Positioned within an established inner-west neighbourhood, the development sits near riverfront parklands and the Bicentennial Bikeway, while remaining within walking distance of Toowong Village and multiple public transport options connecting to the CBD, St Lucia and West End.

Lantona said the location was central to the project’s conception, pointing to Toowong’s balance of green space, transport access and proximity to major education institutions.

“<a href="https://www.apartments.com.au/developments/toowong-qld-4066">Toowong</a> combines river access, walkability, immediate CBD connection and a strong educational presence. That balance made it the obvious setting for Koya.”

[smartcode_project:default project_id=150787 project_image_fid=366230]

Communal amenity is concentrated on the rooftop, where a shared retreat will include a pool, dining areas and outdoor spaces oriented towards neighbourhood and city views. The design allows for both private use and small gatherings, extending the living environment beyond individual apartments.

Koya enters the market at a time when smaller-scale developments are becoming less common in established suburbs, with many recent projects in the suburb shooting for the sky.

In a nod of confidence,&nbsp;<a href="https://www.apartments.com.au/builders/brisbane-builders">Brisbane Builders</a>&nbsp;has already commenced construction on the building, which is slated for completion in early 2027. Keenan &amp; Byrne is marketing Koya.

[smartcode_project_cta:default project_id=150787]

Japandi-inspired Koya Residences launch in Toowong

Financial Regulation

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Investors should expect regulations that allow self-managed superannuation funds to borrow to buy property to come under government scruitiny in the coming months, an expert in the area has said.
In February, Assistant Treasurer Arthur Sinodinos ruled out a specific review into limited recourse borrowing arrangements which SMSFs use when taking out loans to buy property.
Macquarie Bank executive director David Shirlow told Property Observer it was unlikely that the government would change its position, despite Senator Sinodinos standing aside and Finance Minister Mathias Cormann taking over as Acting Assistant Treasurer.
“Whilst the prospect of a separate and specific review of the matter is off the policy agenda for the time being, there are still some live policy issues in borrowing through super,” said Shirlow, who specialises in SMSFs and sits on the board of the SMSF Professionals’ Association of Australia (SPAA).
He said some stakeholders had argued that it was inappropriate for SMSFs to borrow for property investment at all, and that further constraints on advice provided regarding limited recourse borrowing arrangements and product offerings could be considered.
The arrangements are likely to be examined as part of the Financial System Inquiry, which is due to publish an interim report in mid-2014 and a final report by November.
Numerous submissions to the Inquiry have called for government to review SMSF borrowing and put in place additional consumer protection measures and education for trustees.
Big four accounting firm KPMG noted in its submission that super funds were tax-exempt in the pension phase, which provided incentives for SMSFs to invest in long-term assets such as residential property, and even more so if the property was negatively geared.
The Institute of Chartered Accountants in Australia strongly encouraged a review of existing arrangements to ascertain whether borrowing was appropriate and, if it was, to ensure the right legislative and regulatory frameworks were in place.
Mid-tier accounting firm Chan &amp; Naylor called for urgent action to create a dedicated national SMSF educational framework, lead by the Australian Securities and Investments Commission (ASIC), to teach the public about the merits and pitfalls of SMSF investments.
The Reserve Bank of Australia noted that SMSFs borrowing could expose members to greater financial risks (including excessive concentration in a single asset) than they understood they were taking.
CPA Australia raised concerns about the appropriateness of advice received by SMSF trustees and members, and potential misinformation being provided by unlicensed advisers such as real estate agents, mortgage brokers and property developers.
Shirlow said ASIC considered itself to have jurisdiction, under the Corporations Act, over some aspects of property sales people giving advice on limited recourse borrowing arrangements.
“Stakeholders such as SPAA would argue that there should be some more definite consumer protection rules in place to make sure that property spruiking is not going to lead to disaster,” he added.
The Association of Superannuation Funds of Australia has previously advocated for advice to SMSFs on asset classes such as investment property and limited recourse loans to be provided only through licensed financial planners.
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Investors should expect SMSF borrowing to come under greater government scrutiny

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The Council of Financial Regulators (CFR) met to discuss financing conditions, the housing market, Cyber risk initiatives and the lending market.
During the meeting they said that growth in housing credit remains subdued overall, with credit to investors particularly weak.
Owner-occupier loan commitments and housing turnover in Sydney and Melbourne have picked up, suggesting that a strengthening in credit growth is likely.
Mortgage lending standards have been broadly unchanged recently.
Overall, near-term risks related to the housing market have lessened as housing market conditions nationally have improved.
Members discussed the potential for the current weakness in apartment construction to place upward pressure on prices in some cities over time unless construction picks up. They also discussed the tight credit conditions for small businesses and the reduced risk appetite by many lenders for lending to small business.
Concerning responsible lending new ASIC guidance will confirm that responsible lending requirements do not apply to loans made predominantly for business purposes, regardless of the type of security offered for the loan.
Council members stressed that the flow of credit is fundamentally important to the functioning of the Australian economy and discussed the concern that lenders' risk appetite for some types of lending may have swung too far towards caution.
The CFR met with representatives of the Department of Home Affairs and the Australian Cyber Security Centre (ACSC) to review the current cyber security environment. They also discussed key initiatives to improve cyber resilience, including the development of the Government's 2020 Cyber Security Strategy, and application to the financial sector.
Council agencies, the Department of Home Affairs and the ACSC will continue to cooperate to improve the preparedness of the financial sector.
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j.ballantyne1990-6AQqhLzZaK

Council of Financial Regulators say short term housing market risks lessen

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Louise Sylvan's review of Financial Counselling Services has been released with banks hoping it will help them chart a path towards strengthening Australia’s financial counselling sector.
The Review highlights systematic issues that have plagued the the industry, while noting the importance of financial counsellors in helping Australians who are struggling to repay their debts, manage their household budgets, and provide for their families in a difficult environment.  
The CEO of the Australian Banking Association, Anna Bligh, said that financial counsellors were important to Australians and the banking industry who see them as valuable partners in helping vulnerable customers.
“Financial counsellors get people back on track when they’re experiencing some of the most difficult moments in their lives and provide a valuable education service to people with lower levels of financial literacy and capability,” Ms Bligh said.
“This review charts an important path forward to strengthen Australia’s financial counselling sector.”
Louise Sylvan, who is the former deputy chair of the ACCC, was appointed to lead the review earlier this year, after the Royal Commission (into Misconduct in the Banking, Superannuation and Financial Services Industry) highlighted widespread unethical and criminal behaviour in financial counselling sector.  
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Banks to step up after review into financial counselling sector

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GUEST OBSERVATION
Will the banking services royal commission have a lasting effect of improving the banking and financial sector? The answer is “no”. A temporary change is apparent, but the problems lie deeper than those <a href="https://theconversation.com/banking-royal-commission-no-commissions-no-exemptions-no-fees-without-permission-hayne-gets-the-government-to-do-a-u-turn-110974" target="_blank">addressed by the royal commissioner</a>.
The worldwide pervasiveness of financial sector misconduct is an indication.
This is not a criticism of the Royal Commission as such. It had a limited mandate and limited time, although its approach of focusing on Australian case studies further limited its scope. And a broader investigation of economic and social underpinnings of financial sector misconduct would have required a different sort of Inquiry.
It’ll be hard to act on the report we had
Even then, any recommendations for fundamental changes to financial sector structure and activities needed to inhibit misbehaviour would have to run the gauntlet of gaining political support in the face of vested interests.
The response to, and government capitulation on, the Hayne recommendation regarding <a href="https://theconversation.com/sam-and-the-honest-broker-why-commissioner-hayne-wants-mortgage-brokers-to-charge-fees-114071" target="_blank">mortgage broking fees</a> starkly illustrates the point.
Why will the recommendations not be a lasting solution? An important reason is that the royal commission interpreted “behaviour consistent with community standards” in a limited way to refer to situations in which customers were actually harmed.
But much of community angst over financial sector conduct relates to the broader use of market power and superior knowledge to extract an “unfair” share of the benefits from transactions with customers.
And it missed the broader problem…
Customers don’t get a fair share of the benefits from transactions, competition doesn’t work to make sure they do, and customers are often unaware that they have been exploited.
Why is it happening? The answer lies partly in this comment of Royal Commissioner Kenneth Hayne on page 54 of his <a href="https://financialservices.royalcommission.gov.au/Pages/reports.aspx#interim" target="_blank">interim report</a>: "Much if not all of the conduct identified in the first round of hearings can be traced to entities preferring pursuit of profit to pursuit of any other purpose"
Economists will rightly argue that there is nothing inherently wrong with the pursuit of profit or self-interest. It facilitates the efficient allocation of resources.
But unless it is accompanied by a concern with fairness (“do unto others as you would have them do unto you”) in situations of market power and superior information, as typically occurs in financial markets, it will lead to vulnerable consumers being exploited.
…which is a grey zone of unfairness
There is a large and poorly defined grey area between self-interested but clearly fair behaviour and self-interested unfair behaviour, which, in turn, merges into misconduct and illegal activity.
It is difficult for (particularly large) institutions operating in that grey area, even if committed to “fairness”, to ensure their employees do not slide towards the boundary. Or over it.
Moreover, competition between financial institutions in search of profits can lead to a “race to the bottom” in terms of lower financial product quality. This is not always apparent to some (or many) consumers – at their expense.
The financial sector particularly vulnerable to this problem.
First, many financial products and services are “<a href="https://www.investopedia.com/terms/c/credence-good.asp" target="_blank">credence goods</a>” where the consumer needs them but is unable to assess their real worth either before or after the purchase.
A perfect example is a visit to the doctor. Often the reason we are visiting the doctor is because we don’t know what’s wrong with us. It makes it necessarily difficult or impossible to tell whether the doctor is good at her job.
Bankers sharpen their claws on each other
Second, much of the activity in financial markets is about trading and making profits (supposedly using superior information and expertise) at the expense of the another party in those markets.
If it is “right” for that part of the entity that does that to make money at someone else’s expense, why is it wrong for the part of the entity that deals with consumers to do that?
Here’s how the Commission could have tackled these problems in order to achieve real, longer term benefits.
Yet we license them…
First, it could have considered whether giving financial institutions a valuable “social licence” to operate in important business areas under advantageous institutional structures should bring with it extra enforceable obligations.
It could have also considered whether, given the lack of misconduct found in the mutual and cooperative sector, banks and other financial institutions could be organised more like mutuals.
Second, it could have recommended changes that would have given stakeholders other than shareholders (such as depositors and employees) a greater say in running those organisations (perhaps at board level) and a say in shaping their culture.
…and we could change the way they’re run
Third, it could have recommended structural separation between the retail and wholesale arms of firms to reduce complexity and the risks of deficiencies in control systems.
Structural separation could have also reduced the risk that the culture of trading and position-taking, in which profits are made at the expense of another party, spilled over into other parts of the institution where it wasn’t wanted.
Finally, it could (and should) have concentrated more on consumer protection.
It is a much broader issue than deterring and penalising misconduct.
Until consumer financial literacy catches up with financial product innovation and complexity, there will continue to be a big “market for financial misconduct”.
Exhorting institutions to do no harm won’t take it away.
Kevin Davis, Professor of Finance, University of Melbourne
This article is republished from <a href="http://theconversation.com" target="_blank">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/do-no-harm-isnt-enough-why-the-banking-royal-commission-will-ultimately-achieve-little-116076" target="_blank">original article</a>.
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Why the banking royal commission will ultimately achieve little

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The Australian Securities and Investments Commission (ASIC) has noted the decision by Premier Investments Limited (Premier) to write down the value of its casual wear brand name assets by $30 million in its financial report for the year ended 28 July 2018.
ASIC had raised concerns on the value of these assets in Premier’s financial report for the year ended 29 July 2017.
They had questioned the "reasonableness and supportability of royalty rate assumptions and sales growth forecasts used in testing the assets for impairment".
ASIC stated: "Premier has referred to the increasingly competitive retail landscape and structural changes impacting the apparel industry in Australia and New Zealand."
The impairment of non-financial assets remains a "focus area of ASIC’s financial reporting surveillance program".
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Premier Investments write down brand name assets

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The financial services Royal Commission seems set to have significant consequences for home borrowers, and the impact will hit a lot quicker than any interim or final report to the Federal Government.
It already seems likely Commissioner Kenneth Hayne will recommend sweeping changes to the home loan industry arising out of just the first few weeks' hearings.
He has uncovered dreadful lending practices by banks and mortgage brokers.
The worst was NAB employees in greater western Sydney accepting cash bribes over the counter in white envelopes to facilitate loans they knew were based on fake documents in order to collect bonuses.
The fraud and bribery came with the manipulation of a mortgage commission incentive program that incentivised gym owners, taxi drivers, hairdressers and sporting clubs who made money by referring customers to the bank.
Then there's the more prevalent, so-called liar loans, where mum and dad borrowers simply skirt around the reality of their income, expenses, debts and assets when filling in their successful loan applications without much checking by the banks.
"By and large customers are poor historians when it comes to identifying their outgoings," Commissioner Hayne drily noted.
The regulatory backdrop has been Wayne Byres, the chairman of the Australian Prudential Regulation Authority, moving over recent times to put the brakes on dubious lending.
Byres has sought to ensure that standards for property lending are prudent, particularly in what he viewed as an environment of heightened risk.
Given the Australian banking system's very high exposure to both the residential mortgage and commercial property markets, APRA's ultimate goal was to protect bank depositors, because it's their money that banks are lending.
You would expect as Commissioner Kenneth Hayne uncovers further misconduct or poor lending oversight, getting an honest home or investment loan will become a lot harder for borrowers.
And any reining in the bank's zealous willingness to lend will trigger the possibility of a Royal Commission-induced credit slowdown.
This could impact on interest rates.
According to Shane Oliver, chief economist at AMP Capital, tighter lending may have the effect of pushing the next interest rate rise back to 2020, rather than 2019.
"It seems a real risk around the issues of lax lending standards is that banks move to a far more rigorous assessment of applications for loans," Shane Oliver noted.
This was unlikely to cause a full-on credit crunch, Oliver forecasts, but more likely a slowing in credit growth.
UBS analysts have warned too there is a growing risk the RBA was under-estimating the downside risk from tightening lending standards.
“While a tightening of mortgage underwriting standards is prudent, it has a material impact on the economy,” UBS noted.
“It must be remembered that house prices are determined by the demand and supply of credit, not the demand for and supply of housing,” UBS advised.
This article first appeared in The Daily Telegraph.
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jchancellor-FAypfDUnLy

Financial Services Royal Commission to have big impact on home borrowers

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GUEST OBSERVER
A Productivity Commission report analysing competition in the financial sector has pointed out that our finance regulators have become enablers of an industry that is an impediment to our economic competitiveness and exploitative of their most loyal customers.
It proves the need for a board to oversee the conduct of our financial regulators, policing the bodies that are supposed to be keeping our financial system in check.
It could not have come at a worse time for our big four banks. Perennially pilloried for their rampant market misconduct (fraudulently manipulating benchmark interest rates) and their equally rampant abuse of upwards of hundreds of thousands of consumers across every one of their retail operations at one stage or another – financial advice, life insurance and credit card insurance, just to name a few.
The Australian Securities and Investments Commission (ASIC) most recently launched a bank-bill swap rate manipulation case against the Commonwealth Bank, but only across a very narrow range of infringements. The bulk of the infringements can’t be prosecuted because ASIC has dithered for so long, the statute of limitations has run out, and the alleged crimes have proscribed.
And what of our other financial regulator - the Australian Prudential Regulation Authority (APRA)? The Productivity Commission reckons that APRA’s ham-fisted use of macro-prudential tools, usually used to reduce risk in our financial system, has benefited the big four banks to the tune of A$1 billion.
APRA has been criticised for pursuing stability in a manner that has killed competition, hurt consumers, and starved small businesses of life-giving capital. The dominance by a few banks, whose profits are based on runaway property prices, is its own systemic threat.
The result is that small banks are squeezed out, big banks raking in higher rates, and investors offsetting higher rates against their taxes and so costing the Australian Taxation Office an estimated A$500 million in deductions. As the old saying goes, when your only tool is a hammer, every problem looks like a nail.
Who will regulate the regulators?
So what to do about ASIC and APRA? Back in 2014, the Financial System Inquiry recommended a board of oversight – a regulator for the regulators – to ensure that the regulators discharge their mandates.
So, for example, to ensure that ASIC acts like a cop, not a co-op; that APRA acts with foresight and finesse, as opposed to damaging competition. APRA and ASIC pushed back at the time, and the Abbott government rejected the recommendation.
Now to add impetus to the Financial System Inquiry recommendation, the Productivity Commission says there is a lack of transparency and accountability exhibited by our regulators. Add to that the implications regarding regulator’s efficacy that comes with the establishment of the Financial Services Royal Commission. The public deserves better than this.
A regulator for the regulators – a Financial Regulator Assessment Board – would conduct ex post analyses of how regulators had discharged their mandates, evaluate their policies and the efficacy of their policy tools. It would be a sober second thought, and a crucial mechanism of double redundancy – to pick up on crucial elements that the regulator may have overlooked.
The idea has form. The British have created something similar, called a Financial Policy Committee, this body’s aim is to review the British regulators, while keeping a look-out for where the next “bombshell” may come from.
That development in turn builds on the work of James Barth, Gerard Caprio and Ross Levine whose research indicates that regulators simply cannot be trusted to perform these crucial functions as the guardians of finance, without oversight. The researchers call their proposed board of oversight the “Sentinel”, and point out that no industry is more adept and more practised at suborning the guardians of finance than banks and insurers. Sound familiar?
<img src="https://counter.theconversation.com/content/91396/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1">Australia’s financial system is increasingly governed by a lawless financial sector, presided over by regulators that are at best misguided, and at worst captured. A board of oversight is the least we can do.
Andrew Schmulow, Senior Lecturer, Faculty of Law, University of Western Australia
This article was originally published on <a href="http://theconversation.com" target="_blank">The Conversation</a>. Read the <a href="https://theconversation.com/australias-financial-regulators-need-policing-91396" target="_blank">original article</a>.
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Australia's financial regulators need policing: Andrew Schmulow

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The number of houses being passed in at auctions and the easy availability of inner-city apartments is not just the result of regulatory measures, but also a loss of confidence stemming from the extremely tight bank lending rules.
Columnist Robert Gottliebsen labels it as the “tea, coffee and cosmetics” (TCC) approach to home lending in his recent piece in The Australian.
While attempting to explain the confusion among many young real estate agents about the number of houses passed in and the desperation of apartment developers to sell, Gottliebsen says there are many reasons, but “none so powerful and potent in what is happening in the lower management levels of some of the big banks”.
He says it’s conventional to blame the APRA and the regulators for the credit squeeze but the problem is “multiplied by a middle management loss of confidence stemming from the looming retrenchments and the bank scandals”.
This has forced the banks to be more restrictive, especially the ones facing scandals such as the Commonwealth Bank.
TCC has even spread to small business lending, writes Gottliebsen.
He says borrowers are shocked that the new tests by banks had slashed the amount they would lend by a quarter and even a third. 
Borrowers are being asked for information about basic living expenses, such as clothing, footwear, cosmetics, dining out, after-hours school care, dining out to name a few.
Gottliebsen states that this banking approach, which he has spoken of earlier, if it continues will see more serious falls in the prices of dwellings, widening the 10% fall in Sydney apartments to other areas of the residential market, including Melbourne.
This is already the case in inner city markets of Sydney, Melbourne and Brisbane now, which also have many unsold houses now.
He says the “crackdown is much wider than TCC and covers restrictions on interest-only loans, higher interest rates for investors, threats of higher interest rates, no money for Chinese borrowers” and so on.
Also, the rising gas and electricity bills further hit confidence.
“The trouble with these uncoordinated attacks is that they start with the aim of stopping a boom, which threatened to turn into a bubble collapse.”
According to Gottliebsen, this activity looks very little on the surface initially and as the squeeze continues, it hurts confidence.
“We are not there yet but once it happens — and the illogical approach of TCC lending will bring it on — confidence will take a long while to restore.
“And it spreads to small business.”
But the banks’ reluctance has opened up opportunity for non-bank lenders, which are seizing the opportunity.
The “regulators’ response is to clamp down on filling the bank-created void, so damaging the nation”.
In conclusion, Gottliebsen suggests that a banking royal commission is not a “good idea at this time”, but if there is one, it should cover regulators too.
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jonathanchancellor-7SQnKwU6yx

Borrowers face shock when banks slash home loan approvals by at least a quarter: Gottliebsen 

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Australian Prudential Regulation Authority chairman Wayne Byres has said the “community trust and confidence was an important consideration” behind its recent inquiry into money laundering involving the Commonwealth Bank.
He said the CBA has experienced a number of incidents over recent years that have damaged its reputation.
“After the AUSTRAC matter came to light, it was difficult to see how the bank could quickly remedy the situation by itself,” he said.
The APRA chairman’s statement came during his opening statement to the House of Representatives Standing Committee on Economics.
Byres said the inquiry is expected to reaffirm to the larger public of that regulators were working on addressing irregularities and would send a signal to other lenders as well.
“In that sense, we very much see the Inquiry as making a constructive contribution to strengthening the reputation and public standing of the bank,” he said.
“As an added benefit, any issues identified will provide useful learnings to others in the industry.”
He also said that the the risks in the housing market that were pointed out in APRA’s 2015/16 Annual Report still hold.
“We called out risks in the housing market, the funding profile of the banking system, poor experience in some segments of the insurance industry, and the need to enhance governance and transparency in the superannuation industry. These issues remain prominent today,” said Byres.
Although he said that at a macro level, Australia continues to benefit from a sound financial system that reflects a long period of economic growth and resilience in financial institutions. 
However, there was no room for complacency.
Byres also used the opening remarks to update the committee on APRA’s response to the recommendations from the Committee’s Review of the Four Major Banks.
One of the recommendations was for a review of the licensing requirements for Authorised Deposit-taking Institutions (ADIs) and there were several others designed to strengthen accountability and transparency of financial institutions.
The Banking Executive Accountability Regime (known as the BEAR), will increase APRA's powers, that among other things, include fines to be imposed on errant ADIs.
He said the core objective of the BEAR was "establishing clearer accountabilities for, and expected standards of behaviour by, senior executives within banks" and was being constructed in a manner that is consistent with APRA’s prudential mandate.
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APRA chairman says CBA inquiry will establish public trust

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Jana Jaros and Jackson Laurence Malcolm Capper have appeared in the Southport Magistrates Court on charges of operating an unlicensed financial services business following an ASIC investigation.
ASIC documents state Ms Jaros and Mr Capper have been charged under section 911A of the Corporations Act for allegedly aiding and abetting Astra Group Pty Ltd and Old Cambridge Pty Ltd to carry on a financial services business without holding an Australian Financial Services licence.
They also face two charges each under section 1308(2) of the Corporations Act for lodging with ASIC documents containing false or misleading material.
Providing assistance to operate an unlicensed financial services business carries a potential maximum penalty of $36,000 or two years' imprisonment or both, while providing false or misleading documents carries a maximum penalty of $36,000 or five years' imprisonment or both.
This matter is being prosecuted by the Commonwealth Director of Public Prosecutions.
Ms Jaros and Mr Capper appeared on 7 August 2017. The matter was adjourned until 4 September 2017.
Background
ASIC alleges that Ms Jaros and Mr Caper set up the websites www.investradirect.com and later www.investradirect.co to attract and service clients of Astra Group Pty Ltd and Old Cambridge Pty Ltd.
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