Queensland builder-developer MAYD has revealed the first look at its major North Kirra beachfront development, lodging amended plans that reduce the number of apartments and increase the proportion of larger residences.

The project is planned across a substantial 4,742 sqm amalgamated site spanning seven lots at <a href="https://www.apartments.com.au/new-apartments/2-6-pacific-parade-bilinga-qld-4225">2-6 Pacific Parade</a> and 27-33 Golden Four Drive in Bilin​ga, directly opposite Nor​th Kirra Beach.

<a href="https://www.apartments.com.au/developers/mayd-group">MAYD</a> secured the site for $32.5 million in 2025, in what was one of the Gold Coast's largest property transactions of the year.

The development will be delivered across two stages, with the first stage carrying an estimated gross realisation value of around $360 million.

The latest amendments seek to reduce the overall apartment count and shift the project further toward the owner-occupier market, with larger residences designed for buyers wanting considerably more space than traditionally offered in a beachfront apartment.

The residential mix will include townhomes, oversized two-bedroom apartments, substantial three-bedroom residences and four-bedroom homes.

MAYD has appointed Cera Stribley to lead the architecture and interiors, with the Melbourne-based design practice drawing on the beachfront setting through a series of ocean-facing terraces and heavily landscaped balconies.

Strong horizontal forms and curved balconies will define the exterior, with subtropical landscaping integrated throughout the building to soften the built form and increase the connection between the residences and the beachfront.

The project will also include an extensive collection of resident wellness and lifestyle facilities, continuing the broader shift across the Gold Coast's luxury apartment market toward larger homes supported by resort-style amenity.

<img alt="MAYD" data-entity-type="file" data-entity-uuid="d1bcbb05-e659-4b47-8bd4-1e595315e2ad" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-27%20at%202.05.03%E2%80%AFPM.png?VersionId=jj0XEud1X1DuLt7_KyElhjMdZGOXmLHP" />

MAYD Founder Todd Mould said North Kirra was increasingly appealing to buyers attracted to the more established, lower-density character of the southern Gold Coast.

"North Kirra presents one of the most compelling luxury residential opportunities currently emerging in Australia, combining absolute beachfront with the character and authenticity that buyers are increasingly seeking, and the same sense of tight-knit community that defined Burleigh and Currumbin perhaps 10 or 15 years ago," Mould said.

"With Gold Coast Airport on its doorstep, it also offers a level of accessibility that broadens its appeal across almost every market demographic."

The project comes as the southern Gold Coast continues to attract an increasing share of high-end apartment development and buyer activity.

Kirra in particular has emerged as one of the region's more tightly held beachfront markets, with its relatively low-density character, established surf and hospitality scene and proximity to Gold Coast Airport differentiating it from the higher-density markets further north.

Mould said those characteristics had informed the approach MAYD and Cera Stribley had taken to the project.

"We've worked closely with Cera Stribley to create a vision that is deeply connected to its surroundings," he said.

"Inspired by the coastline itself, the architecture has been shaped around space, privacy and resort-style living, creating a collection of homes that reflects the next generation of luxury on the southern Gold Coast."

MOTIV Managing Director Carly Cottam, who has been appointed to market the project, said buyer attention had continued to move south along the Gold Coast.

"Purchasers who may once have defaulted to Broadbeach, Main Beach or Surfers Paradise are increasingly recognising the value of a genuine beachfront location that offers lower density, strong amenity and a more established sense of community," Cottam said.

"Kirra has a powerful combination of growing demand and genuine scarcity. Beachfront supply is inherently constrained, the area remains relatively low density, and buyers are increasingly placing a premium on locations that feel established, uncrowded and authentic rather than heavily developed."

Cottam said the proximity to Gold Coast Airport was also proving increasingly important for interstate and second-home buyers.

"Being minutes from Gold Coast Airport makes it particularly compelling for interstate buyers, frequent travellers and second-home purchasers who can access an authentic coastal lifestyle almost immediately after stepping off a flight."

The acquisition takes MAYD's active development portfolio to more than $500 million, with the North Kirra project representing one of its largest undertakings to date.

MAYD is targeting an early 2027 launch.

Joel Robinson

First look at MAYD's North Kirra mixed-use precinct

<main data-perf-region="main">
Castle Hill, the longtime hub of the Hills District, has been one of the major beneficiaries of Sydney's Metro expansion, with improved connectivity helping drive continued population growth, development and buyer demand across the Hills District.

But despite that growth, the suburb has seen relatively few major new apartment projects brought to market over the past 18 months.

Hills District developer Reve Group is looking to fill that gap with <a href="https://www.apartments.com.au/new-apartments/nova-r-ve-castle-hill-2-garthowen-crescent-castle-hill-nsw-2154">Nova Rêve</a>, a major new mixed-use precinct on the corner of Garthowen Crescent and Old Castle Hill Road, a short walk from Castle Hill Metro Station and Castle Towers.

[smartcode_project:default project_id=152737 project_image_fid=377679]

The project will comprise three residential towers alongside a hotel, restaurants, cafes and a skybar, more than 1,600 sqm of ground-floor retail and almost an acre of landscaped gardens.

It represents the largest project undertaken by Reve Group, the development arm of the Kassis family, which has been building across the Hills District for more than 30 years through Kassis Homes.

[smartcode_project:default project_id=152737 project_image_fid=377675]

Nova Rêve also represents a significant step up from the family's first apartment development, Grand Rêve, which was delivered nearby on Garthowen Crescent.

Grand Rêve introduced larger, house-like apartment layouts and premium inclusions including Wolf and Sub-Zero appliances to the Castle Hill market.

Nova Rêve takes that approach to a precinct scale, combining the residential component with hospitality, retail and substantial public and resident landscaping.

[smartcode_project:default project_id=152737 project_image_fid=377685]

Reve Group Managing Director Sam Kassis said the project reflected the family's three decades of building in the Hills, which has evolved from trophy homes on quarter-acre blocks to larger-scale apartment development.

"Grand Rêve was our first apartment project here and it showed us what this pocket of Castle Hill could be. Nova Rêve is the refinement of that idea: not just apartments, but a place the whole suburb can use," Kassis said.

A key part of that approach is the hotel, which has been designed to operate as an amenity for the wider Castle Hill community rather than solely hotel guests.

It will include restaurants, cafes, skybars and all-day dining, alongside conference and event facilities catering to business functions, community groups and private events.

At ground level, more than 1,600 sqm of shops and cafes will open onto the surrounding streets and landscaped areas.

Almost an acre of gardens designed by Land and Form Studios will run through the precinct, incorporating pathways, seating, barbecue areas and children's play spaces.

[smartcode_project:default project_id=152737 project_image_fid=377680]

Reve Group's Romio Georges said creating an active ground plane had been central to the planning of Nova Rêve.

"There are gardens with pathways, barbecues, seating and play areas, shops and cafes opening onto the street, and a hotel with restaurants and a skybar that anyone in Castle Hill can walk into," Georges said.

The project's elevated position on one of Sydney's highest ridgelines will also provide apartments with outlooks toward the Sydney skyline, surrounding parkland and the Blue Mountains.

More than 80 per cent of the apartments will occupy corner positions, with Turner responsible for both the architecture and interiors.

&nbsp;

[smartcode_project_cta:default project_id=152737]

<h3 data-end="3697" data-section-id="q3n5ak" data-start="3672">&nbsp;</h3>
</main>

Nova Rêve arrives as Reve Group bets on Castle Hill's next growth phase

A collection of just 25 large-format apartments and penthouses overlooking Goodwin Park is entering the Coolangatta market, with <a href="https://www.apartments.com.au/new-apartments/marea-residences-coolangatta-27-27a-dixon-street-coolangatta-qld-4225">Maréa Residences</a> combining a low-density, residential-only approach with uninterrupted park and Pacific Ocean outlooks.

Located at 27 Dixon Street, Maréa comprises three and four-bedroom residences alongside a limited number of dual-level penthouses, with the project positioned between Goodwin Park and <a href="https://www.apartments.com.au/developments/coolangatta-qld-4225">Coolangatta</a>’s coastal precinct.

Construction has commenced, with completion currently estimated for late 2027. Three-bedroom residences are priced from $1.8 million.

[smartcode_project:default project_id=150999 project_image_fid=374005]

The project has been designed around its northern outlook across the park, with the building’s architecture, landscaping and material palette intended to establish a connection with the neighbouring green space. The residences have been configured to maximise natural light and views across Goodwin Park towards the ocean.

Inside, the material palette incorporates timber, stone and brushed brass, complemented by curved detailing and ambient lighting. Kitchens and bathrooms carry the same natural material approach, while residences also include basement parking, storage and lift access.

Maréa’s penthouses are arranged over two levels and include private pools, adding another layer to the project’s focus on larger-format apartment living. Across the development, residences are configured with three or four bedrooms rather than the broader mix of smaller apartment types commonly found in larger projects.

[smartcode_project:default project_id=150999 project_image_fid=374010]

Resident amenity is concentrated at rooftop level, where landscaped entertaining terraces and pools take advantage of elevated views across Coolangatta and the Pacific Ocean.

The project has so far been particularly well received by local owner-occupiers and downsizers, according to Urban Activation Property Sales and Marketing Director Matt George, with the residential-only format, construction quality and northern park outlook among the features resonating with purchasers.

“The uninterrupted northern aspect overlooking Goodwin Park has been a key point of difference, with buyers attracted to the sense of serenity and open space the park provides, while still enjoying easy access to the ocean and being within walking distance of the lifestyle and amenities Coolangatta has to offer,” George said.

[smartcode_project:default project_id=150999 project_image_fid=374002]

“The combination of high-quality construction, a residential-only building, park outlook and proximity to the beach has resonated strongly with the local downsizer market.”

The Dixon Street address is within walking distance of Coolangatta Beach and the broader southern Gold Coast coastline, including the surf breaks at Snapper Rocks and Kirra. Coolangatta’s cafés, restaurants and retail are nearby, while Gold Coast Airport is also within close proximity.

[smartcode_project_cta:default project_id=150999]

Maréa Residences brings parkside apartments to Coolangatta

Melbourne developer PDG has secured Victorian Government approval for its $1.5 billion Southbank development <a href="https://www.apartments.com.au/new-apartments/the-one-1-queens-bridge-street-southbank-vic-3006">The One</a>, clearing the way for the long-dormant riverfront site opposite Crown to finally be developed.

The Minister for Planning has approved the project at 1-29 Queens Bridge Street, with the Department of Transport and Planning issuing the planning permit following its assessment.

The approval will allow PDG to develop the prominent 5,059 sqm site with a major mixed-use tower comprising premium apartments, including branded residences, a luxury hotel and boutique office space.

PDG acquired the site in late 2024, with its position directly opposite Crown's main entrance and near Melbourne's Arts Precinct making it one of Southbank's most significant remaining development opportunities.

<img alt="PDG" data-entity-type="file" data-entity-uuid="3933013e-6332-4386-b9be-089df05caf17" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-27%20at%209.29.22%E2%80%AFAM.png?VersionId=sITIgBqDL0N3VNSMwWEmF5UA.uvcsRyu" />

Designed by COX in collaboration with ODO and PDG, the tower's architecture draws on the movement of the Yarra River, with six vertical pleats running the height of the sculpted facade.

The project will also see the heritage-listed Queens Bridge Hotel restored and incorporated into the development&nbsp;with new hospitality and public uses, including a rooftop venue.

A significant component of The One will be its residential amenity.

More than 5,000 sqm of resident facilities will be delivered across a single level, making it one of the largest consolidated residential amenity offerings proposed in an Australian apartment development.

The planning approval also incorporates a major upgrade of Queensbridge Square, which PDG will deliver in partnership with the City of Melbourne.

<img alt="PDG" data-entity-type="file" data-entity-uuid="73167fcd-1031-4b6f-a408-a064cfe45ed1" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-27%20at%209.29.17%E2%80%AFAM.png?VersionId=Pf1AEWxw6SNmBqR0zQW5lyEze.MtxgFp" />

The existing square will be revitalised as a new civic and pedestrian space along the Yarra River, strengthening the connection between the project, Southbank and the riverfront.

PDG Founder and Managing Director Vince Giuliano said the approval represented a major milestone for a site which has remained largely underutilised for more than 15 years.

“This is the most significant Planning Permit approval Melbourne has seen in recent years,” Giuliano said.

“For more than 15 years, this site has remained underutilised. This approval enables us to deliver a project that will contribute meaningfully to the revitalisation of Southbank, restore and reactivate an important heritage building, and create a new civic and hospitality destination for Melbourne.”

The latest approval follows an earlier planning permit issued by the City of Melbourne covering demolition works across part of the site at 9-29 Queens Bridge Street. Those demolition and early works are already underway.

PDG has also started generating early interest in the residential component from owner-occupiers ahead of a planned public launch in early 2027.

PDG secures approval for $1.5bn Southbank apartment development, The One

Local developer Harridan is seeking to turn its Woolloongabba apartment project into the first stage of a broader transformation of Burke Street, using a new 16-storey mixed-use building to establish a greener pedestrian connection toward the rapidly evolving Boggo Road transport and knowledge precinct.

The South East Queensland developer has filed plans for 154 apartments on the <a href="https://www.apartments.com.au/new-apartments/4-burke-street-woolloongabba-qld-4102">southern side of Burke Street</a>, where its proposal has been designed alongside a wider vision by LatStudios for the street.

That vision positions the southern side of Burke Street for buildings of 15 storeys and above, while envisaging lower-rise development of up to five storeys on the northern side to transition into Woolloongabba's existing character housing. It also proposes wider pedestrian verges, deep planting, new street trees and upgrades to the pedestrian approach to Boggo Road Station.

The Harridan development itself has been designed by Brisbane-based Arqus Design and will comprise 154 apartments across 16 storeys. The mix is weighted heavily toward two-bedroom apartments, with 121 proposed alongside 10 one-bedroom and 23 three-bedroom residences. There will typically be around 14 units per floor.

A lower-ground car park and three podium levels will accommodate 156 resident parking spaces, along with visitor and commercial parking. There will also be 154 resident bicycle spaces and 40 visitor bicycle parks.

&nbsp;

Harridan is a family-owned developer and part of the Holmwood Highgate Group, with more than three decades of development activity across South East Queensland. Its portfolio spans residential, commercial and industrial property, with current residential projects including Riverbank on Byron in Bulimba, Esperance Residences in Carina and The Precinct at Kinross Road in Thornlands.

Wooloongabba has been popular for apartment developers, particularly since the announcement of the 2032 Summer Olympics games in Brisbane.

While there have been a lot of development applications, it has failed to materialize into real supply.&nbsp;

Sarazin has been the major player in the area. They are under construction at Murcia Residences, on the fringe of East Brisbane and Woolloongabba. They have just launched <a href="https://www.apartments.com.au/new-apartments/the-stanley-residences-woolloongabba-8-trafalgar-street-woolloongabba-qld-4102">The Stanley Residences</a>, in Woolloongabba on Trafalagar Street. They also have Nuage coming soon on the nearby <a href="https://www.apartments.com.au/new-apartments/nuage-woolloongabba-14-wellington-road-woolloongabba-qld-4102">Wellington Road</a>.

First look: Harridan plans Burke Street transformation beside Boggo Road transport hub

Interest Rates

<html><body>
The country’s largest lender, Commonwealth Bank, has raised rates for interest-only home loans while reducing owner-occupier principal and interest variable rates.
Variable interest only home loan rates for owner-occupiers and investors will increase by 30 basis points. 
The bank said in a media release that the move to raise interest-only loan rates was “to meet our regulatory requirements”.
CBA followed its rivals by lifting rates for customers who opt for interest-only repayments while offering a small reward to home owners paying down their debt.
For owner-occupiers standard variable rate for those repaying principal and interest there will be a reduction of three basis points to 5.22 percent p.a.
The rates are effective from July 7.
Around 80 per cent of owner-occupier customers are repaying principal and interest, and these changes can help these borrowers own their home sooner, said the bank. A customer with an average mortgage of $350,000 will save $78 a year.
Owner-occupiers paying interest-only will pay an extra $88 a month or $1,056 a year, while investors paying interest-only, will pay CBA an extra $87 a month, or $1,044 a year.
Comparison website RateCity.com.au CEO Paul Marshall said there is now nowhere left to hide for Big 4 mortgage holders paying interest-only.
“The big banks have unanimously decided to hike rates for both new and existing customers despite the fact APRA’s most recent cap on interest-only was for new lending.”
“We are supportive of the banking regulator’s moves to manage the level of growth and resiliency in the housing market,” said a CBA release.
RBA had noted in its latest Financial Stability Review that interest-only loans account for a sizeable and growing share of total housing credit in Australia and such lending could increase households’ vulnerability in part due to the higher average level of indebtedness over the life of an IO loan compared with a regular principal-and-interest loan.
“If you’re an investor who wants to keep paying interest-only, your only reprieve from relatively high rates will be switching to a smaller lender,” said RateCity’s Marshall.
“Right now there are still a couple of investor rates offering interest-only terms under 4 per cent, but they’re earmarked as dying breed.”
Meanwhile, Matt Comyn, group executive of Retail Banking Services at CBA, added that the changes also “help us keep the right balance in our home loan portfolio, in line with what our regulators require”.  
All the major banks have been nudging customers with interest-only payments to switch to principal and interest repayments. 
These interest only changes are not in response to the bank levy that was announced as part of the Federal Budget in May, CBA said.
However, Marshall said that while owner-occupiers paying down their principal would welcome the reduction, the cuts weren’t exactly stacking up with the hikes.
“We would challenge the big banks to pass on more of the savings to mortgage holders who are doing the ‘right’ thing by paying off their loan,” he said, adding borrowers could try to shift to a smaller lender with more competitive rates.
</body></html>

jonathanchancellor-7SQnKwU6yx

Commonwealth Bank raises rates for interest-only loans

<html><body>
National Australia Bank has followed Westpac and ANZ by increasing rates for mortgage holders making interest-only repayments and reducing rates for owner-occupier customers paying off their loan, according to RateCity.
RateCity said investors and owner occupiers who pay interest-only will have to pay an extra $102 a month, or $1,224 a year, based on the average loan size of $350,000 over 30 years while owner-occupiers paying principal and interest have been given a small reprieve with $17 a month off their repayments, a savings of $204 a year.
Sally Tindall, RateCity Money Editor said today's changes were once again attributed to APRA’s new regulatory requirements.
"An astounding 41 percent of loans on the Big4 banks' books are interest-only," she said.
"That's a huge proportion of Australians who aren't paying off a single cent of debt.
"It's no wonder APRA is coming down hard. They want Australian mortgage holders to go on a debt-diet.
“Paying interest-only, particularly when you are an owner-occupier, is an expensive business.
“The average owner-occupier who elects to pay interest-only for the first five years of their loan will pay $67,810 extra to NAB over the life of their loan.
“When you look at the big picture, a couple of hundred dollars in savings each month pales in comparison to the long-term benefits of paying down debt."
<a href="https://www.propertyobserver.com.au/images/2017/06/23/Screen%20Shot%202017-06-23%20at%2011.24.58%20AM.png" target="_blank"> Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/06/23/Screen%20Shot%202017-06-23%20at%2011.24.58%20AM.png" alt="">
</body></html>

NAB follows suit in hiking interest-only rates

<html><body>
The recent interest rate increases by major and non-major banks have contributed to a rise in national mortgage arrears, according to ratings agency Standard &amp; Poor’s.
The number of home loan delinquencies underlying Australian prime residential mortgage backed securities (RMBS) rose to 1.21 percent in April from 1.16 percent in March, according to a recent S&amp;P report, RMBS Arrears Statistics: Australia.
New South Wales, Victoria and Queensland – which account for about 80 percent of total loan balances – all recorded increases in arrears between March and April, according to S&amp;P.
“Part of the increase reflects a decline in outstanding loan balances, but we believe interest-rate rises announced by different lenders during the past few months affected the Standard &amp; Poor's Performance Index (SPIN) for Australian prime mortgages, given that most of the loans are variable-rate mortgages,” S&amp;P analyst Erin Kitson was cited as saying by the Australian Broker. 
The SPIN looks at the weighted average of arrears more than 30 days past due on residential mortgages in publicly and privately rated Australian RMBS transactions and is calculated on a monthly basis.
Arrears increased in all states and territories except the ACT, NT and Tasmania. 
The largest surges in delinquencies in this time period were as follows:
• Queensland (1.58% to 1.66%)
• New South Wales (0.85% to 0.91%)
• Western Australia (2.27% to 2.32%)
However, the number of delinquencies in NSW and Victoria remain below the weighted average SPIN for prime mortgages.
Regional banks recorded the most increase in rise in arrears with mortgage payments more than 30 days late up from 2.02 percent in March to 2.27 percent in April. This was around 1.8 times higher than the prime SPIN, Kitson said.
“We attribute this in part to a decline in outstanding loan balances and the regional banks' greater exposure to Queensland; around half of all regional banks' outstanding loan balances are domiciled in the state.”
In comparison, for non-regional banks arrears increased from 1.10 percent to 1.14 percent between the two months, while non-banks rose from 0.87 percent to 0.95 percent in the same time period. These figures remained below the SPIN.
For non-conforming loans, arrears fell from 6.17 percent to 5.03 percent between April and March, due to a backdrop of increasing loan balances.
“Interestingly, mortgage repayments more than 90 days past due made up around 41% of the total nonconforming arrears in April compared with 60% for prime arrears. The proportion has been broadly consistent in the non-conforming sector for the past 10 years, but has increased more markedly in the prime sector during the period,” the report said.
On the bright side, Kitson said improvements in the seasonally adjusted unemployment rate in May are a credit positive for mortgage arrears.
“Relatively stable employment conditions in Australia have underpinned the low levels of arrears and losses in Australian RMBS transactions; loss of income is a key cause of mortgage default. Declining unemployment and positive jobs growth are fundamental to the ongoing stable collateral performance of Australian RMBS.”
</body></html>

Interest rate rises by banks driving up mortgage arrears: S&P

<html><body>
Westpac has increased interest only rates for variable home loans for owner occupiers and investors.
Owner occupied interest only rate will increase by 34 basis points to 5.83 percent p.a.
Investor interest only rate will increase by 34 basis points to 6.30 percent p.a.
Westpac have also announced an eight basis points reduction in variable interest rates for customers paying principal and interest on their owner occupier home loans.
It takes the standard variable rate for these owner occupiers to 5.24 percent p.a.
These rate changes are all effective from 30 June 2017.
George Frazis, chief executive of Westpac Consumer Bank, said owner occupier customers who make principal and interest repayments as they will benefit from lower interest rates allowing them to pay off their loans faster.
“We hope the rate reduction will encourage owner occupier customers with interest only home loans to switch to principal and interest repayments, helping them to pay down their home loan in this low interest rate environment. There will be no switching fee. 
“We understand the significance of interest rate changes to our home loan customers, so we try to balance the needs of both owner occupiers and investors in making these decisions.
“APRA’s limit on new interest only lending is 30% of new residential mortgage lending, so we have to continue to make changes to our interest only rates and lending policies to meet this benchmark,” said Mr Frazis.
“Today’s decision is not in response to the Federal Government’s recently announced bank levy,” Mr Frazis told Broker News.
</body></html>

j.ballantyne1990-6AQqhLzZaK

Westpac encourages the switch as its lifts interest only home loan rates

<html><body>
GUEST OBSERVER
<div>
<div>
<div>
<div>
The minutes to the RBA’s June monetary policy meeting mainly reiterated the key points from the Governor’s decision statement and the additional ‘message’ from previous minutes – that the Bank’s main focus was on developments in labour and housing markets.
That said, there were some notable details: an intriguing new paragraph on financial stability in the ‘Considerations for Monetary Policy’ section; a slightly more bullish/hawkish discussion of international conditions; and several useful snippets from the detailed discussion including those gleaned from the Bank’s liaison programme.
As per the Governor’s decision statement, the slower growth picture for the March quarter was acknowledged but attributed to “quarter to quarter variation” with the Bank’s positive medium term outlook for growth to rise to a little above 3 percent reaffirmed.
The labour market commentary in the minutes was perhaps a little more positive than in the Governor’s statement which explicitly described indicators as “mixed”. The minutes do not use this particular term although the rest of the discussion is the same. Note that the RBA meeting took place well before the surprisingly strong May labour force report released last Thursday.
The more constructive view around business investment that appeared in the decision statement was largely repeated, the detailed discussion downplaying the disappointing forward view from the Capex survey, citing its limited coverage and more positive tone from approvals, liaison feedback and business surveys.
On housing, the decision statement repeated the Governor’s statement comment that price pressures were starting to ease in markets that had seen brisk price rises. The minutes also note that housing credit growth had been steady with some slowing in growth in investor housing credit. However, “APRA’s recent prudential supervision measures … were yet to have their full effect”.
As in both April and May, the minutes concluded with the line that: “the Board continued to judge that developments in the labour and housing markets warranted careful monitoring”. Note that this line does not appear in the Governor’s decision statement, perhaps to avoid the appearance of giving some sort of policy guidance, e.g. these areas warrant monitoring but are not in a situation where they would draw an immediate policy response.
Turning to the ‘notable details’, the new paragraph on financial stability added to the ‘considerations’ section notes this aspect of the RBA’s role sits within its wider medium term inflation targeting framework, the effect of monetary policy decisions within this framework and the role of prudential supervision. It stresses the importance of cooperation and coordination across agencies facilitated by the Council of Financial Regulators.
While there are no ‘overt’ messages in the discussion, its inclusion is intriguing. Is it, for example, implying that a coordinated approach may also apply if the RBA were to consider additional rate cuts? Alternatively, is it simply restating the clear message the Bank has already given about the importance of financial stability concerns for policy and a broad endorsement of the current status quo?
The June meeting minutes sounded less wary on international conditions and more alert to a potential lift in inflation. Whereas previous minutes regularly noted risks to China around residential property markets and rising leverage in the Chinese economy, this line did not feature in June which ran with simpler observations including that the “recovery in residential construction had continued despite the Chinese authorities having again tightened policy measures aimed at reducing speculative activity”. 
More pointedly, the minutes also note that “globally, headline inflation had picked up” and that while this largely reflects higher oil prices with core inflation still low, “unemployment rates in many major advanced economies had been around or below levels that could be associated with a build-up in wage pressures”, with some signs that both wages growth (increasing in the US and Japan) and growth in unit labour costs (above average in the US, Japan and Germany) may be starting to respond.
The general theme is not new – last month’s minutes included the line that “core inflation was expected to rise gradually in the major advanced economies as spare capacity in labour markets declined further” – but the tone seems more hawkish.
Other useful snippets in the detailed discussion mainly come via the Bank’s liaison programme which included: “retail trading conditions had remained challenging”; “isolated reports of localised and skills-specific labour shortages feeding into higher wages”; and “identified a range of commercial property projects that are under consideration for the year ahead” that have yet to appear in the approvals data.
Conclusion
Monetary policy clearly remains firmly on hold as the Board assesses developments in housing and labour markets. The strong May labour force report released the week after the Bank’s June meeting would have eased some of its concerns on this front, although weak wages growth is likely still a factor (indeed this is one aspect of current conditions that could have received more discussion in the minutes which simply noted the link to consumer incomes and spending). It may also be becoming more comfortable around housing market risks as well although the situation here is clearly still evolving.
Overall there appears to be little shifting the Bank away from its positive medium term view on growth. Westpac’s more downbeat forecast for 2018 – based on a more significant drag from housing construction and falling commodity prices – will take time to become apparent and, in our view, will not be sufficient to draw an RBA interest rate response, particularly given its concerns about potential financial stability risks. As such we remain comfortable with our view that rates will remain on hold for the remainder of 2017 and 2018.
Matthew Hassan is senior economist with <a href="https://www.westpac.com.au/" target="_blank">Westpac</a>.
</div>
</div>
</div>
</div>
</body></html>

Matthew_Hassan-HHWHptmrw4

Interesting detail in June RBA minutes: Matthew Hassan

<html><body><div class="page" title="Page 1">
<div class="section">
<div class="layoutArea">
<div class="column">
GUEST OBSERVER
Higher home prices: The Bureau of Statistics reports that Australian home prices rose by 2.2 per cent in the March quarter to stand 10.2 per cent higher over the year.
More homes: At the end of March there were 39,800 more homes than at the end of December. But the number of NSW homes rose by just 7,600 – the smallest quarterly gain in three years.
Reserve Bank Board minutes: The minutes from the June 6 Board meeting shows the Reserve Bank weighing up a raft of factors including the Federal Budget, signs of improvement in retail spending and reports of localised labour shortages feeding into higher wages.
Consumer confidence eases: The weekly ANZ/Roy Morgan consumer confidence rating eased from an 8- week high of 112.9 to 112.4 in the week to June 18.
The Reserve Bank Board minutes provides guidance on interest rate settings. Consumer confidence data is important for retailers. The residential property price data is important for housing-dependent businesses.
<a href="https://www.propertyobserver.com.au/images/2017/06/20/Screen%20Shot%202017-06-21%20at%208.18.33%20AM.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/06/20/Screen%20Shot%202017-06-21%20at%208.18.33%20AM.png" alt="">
What does it all mean?
It is taking some time for homes to be built to meet the demands of the population. That is particularly the case in NSW where the number of homes lifted by just 7,600 in the March quarter – the smallest gain in three years. Based on recent trends, the NSW population may have lifted by around 30,000 people in the March quarter. As the Reserve Bank has observed, the preference for apartment building is creating delays for home supply to bridge the gap with demand.
The wealth held in Aussie homes has passed $6,600 billion, up almost 11 per cent over the past year. While many bemoan poor housing affordability, wealth levels continue to soar for the two-thirds of Aussies that own homes or are paying them off.
The Reserve Bank Board has given no hints that rates will change any time soon. Board members considered all manner of factors at the June meeting although it is clear that the housing are job markets are being watched carefully. Since the meeting, data shows stronger job markets but softer home prices, further entrenching the Reserve Bank on the interest rate sidelines.
Consumer confidence remains just OK. Aussie consumers still believe that it is a good time to buy a major household item like a fridge or TV, but they are fretting over bills like council and utility rates and insurance premiums. And then there is the on-going adjustment to the new reality that annual wage growth will be closer to 2 per cent rather than 3- 4 per cent as in the past. 
What do the figures show?
Reserve Bank Board minutes:
Last paragraph: “The Board continued to judge that developments in the labour and housing markets warranted careful monitoring. Taking into account all the available information, including that year-ended growth in output was expected to have slowed in the March quarter, the Board judged that holding the accommodative stance of monetary policy unchanged at this meeting would be consistent with sustainable growth in the economy and achieving the inflation target over time.”
“ wage growth and inflation were expected to increase gradually as the economy strengthened.”
“ economic growth was still expected to increase gradually over the next couple of years to a little above 3 per cent per annum.”
“Over recent times, with interest rates at low levels, the Board has set monetary policy to support the economy in its transition following the mining investment boom, while also paying close attention to trends in household borrowing and related financial stability considerations. Members discussed the effect of monetary policy decisions on financial stability and on future inflation, employment and output. They also discussed the role that prudential supervision can play in promoting financial stability. In view of this, members acknowledged the importance of a strong relationship between the Bank and other regulators, particularly APRA.”
“According to liaison and survey data, retail trading conditions had remained challenging, although they had appeared to have improved a little since the start of the year, and this assessment had been supported by the large rise in retail sales in April.”
“Liaison suggested that, while wage growth is likely to remain subdued for some time yet, there had been isolated reports of localised and skills-specific labour shortages feeding into higher wages.”
“The Australian Government Budget had reported little change to the expected cash deficits over the next few years and, as a result, had had little effect on the Bank's near-term outlook for the Australian economy. Some new large infrastructure projects had been announced as a part of the Budget, but most of that spending would occur after 2019.”
Residential property prices
The Bureau of Statistics (ABS) has released its Residential Property Price indexes.
“The price index for residential properties for the weighted average of the eight capital cities rose 2.2 per cent in the March quarter 2017. The index rose 10.2 per cent through the year to the March quarter 2017.
The capital city residential property price indexes rose in Sydney (+3.0 per cent), Melbourne (+3.1 per cent), Adelaide (+1.5 per cent), Canberra (+2.8 per cent) and Hobart (+3.4 per cent) and fell in Perth (-1.0 per cent) and Darwin (-0.9 per cent). Brisbane was flat (0.0 per cent).
Annually, residential property prices rose in Sydney (+14.4 per cent), Melbourne (+13.4 per cent), Hobart (+11.3 per cent), Canberra (+8.9 per cent), Adelaide (+5.0 per cent) and Brisbane (+3.5 per cent) and fell in Darwin (-5.9 per cent) and Perth (-3.5 per cent).
The ABS notes that as at March 2017 there were 9.858 million homes in Australia. In the March quarter the number of homes rose by 39,800 with an extra 11,200 homes in Victoria, 9,600 homes in Queensland and 7,600 homes in NSW.
<a href="https://www.propertyobserver.com.au/images/2017/06/20/Screen%20Shot%202017-06-21%20at%208.19.43%20AM.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/06/20/Screen%20Shot%202017-06-21%20at%208.19.43%20AM.png" alt="">
“The total value of residential dwellings in Australia was $6,602,132.3 million at the end of the March quarter 2017, rising $163,122.9m over the quarter.
The mean price of residential dwellings rose $13,900 to $669,700 and the number of residential dwellings rose by 39,800 to 9,858,400 in the March quarter 2017
Consumer sentiment
The weekly ANZ/Roy Morgan consumer confidence rating eased from 112.9 to 112.4 in the week to June 18.
But confidence is down 3.3 per cent over the year and below the average of 113.2 since 2014. 
Three of the five components of the index rose in the latest week:
<ul>
<li> The estimate of family finances compared with a year ago was down from +9 to zero;</li>
<li> The estimate of family finances over the next year was unchanged at +23;</li>
<li> Economic conditions over the next 12 months was up from -7 to -6;</li>
<li> Economic conditions over the next 5 years was up from +1 to +4;</li>
<li>The measure of whether it was a good time to buy a major household item was up from +38 to +41:</li>
</ul>
What is the importance of the economic data?
The Reserve Bank releases minutes of its monthly Board meeting a fortnight after the event. The minutes give a guide to Reserve Bank thinking on interest rate settings.
The Australian Bureau of Statistics (ABS) provides quarterly data on residential prices. The figures provide further perspectives on the state of the housing purchase sector.
The ANZ/Roy Morgan weekly survey of consumer confidence closely tracks the monthly Westpac/Melbourne Institute consumer sentiment index but the former measure is a timelier assessment of consumer attitudes and is now closely tracked by the Reserve Bank.
What are the implications for interest rates and investors?
CommSec expects the Reserve Bank to remain on the interest rate sidelines for an extended period.
It takes time to build apartments – especially in light of the more common high-rise developments that dot the Sydney landscape. The homes are coming but the gap between demand and supply is closing only slowly. The longer it takes for the homes to be built, the greater the upward pressure on prices. The risk is that housing supply will come on with a rush, leading to a messy correction of home prices.
According to the Bureau of Statistics, sales of combined houses and apartments in Sydney in the March quarter were the lowest in 14 years. That is remarkable in a city where population is growing faster than the average rate over the past decade.
The Reserve Bank Board has highlighted the importance of the ‘third wheel’ – that is, regulatory policy to complement monetary and fiscal policy. But no arm of policy is precise in its impact on the economy so regulators must stand ready to change policy when required. 
Craig James is the chief economist at <a href="https://www.comsec.com.au/default.aspx" target="_blank">CommSec</a>.
</div>
</div>
</div>
</div></body></html>

cjames-5S2v74qSNK

Not enough homes, rates firmly on hold: Craig James

Minutes of June 2017 Monetary Policy Meeting of the Reserve Bank Board

<html><body>
AMP has announced changes to investor lending saying it was to manage its portfolio responsibly and align with regulatory requirements.
Its variable interest rates for new and existing investment property loans will increase by 35 basis points.
For all new investor property loans, the maximum loan-to-value ratio (LVR) is reducing to 50 percent.
This change applies to all new loans with an investment property as security and includes loans to SMSFs.
The changes to interest rates are effective 23 June 2017 for new customers and from 26 June 2017 for existing customers.
The LVR change is from 21 June for new investment property loans and 1 July for SMSF investor loans. Sally Bruce, Group Executive AMP Bank, said the measures are needed to operate within its regulatory obligations.
</body></html>

AMP raises rates for property investors

<html><body>
<img src="https://counter.theconversation.edu.au/content/79340/count.gif?distributor=republish-lightbox-advanced" alt="The Conversation" width="1" height="1">
GUEST OBSERVER
This week the US Federal Reserve, as expected, raised its benchmark interest rate by 25 basis points, to a range of 1-1.25 percent.
This was the third such hike in the last six months.
Fed Chair Janet Yellen said:
Our decision reflects the progress the economy has made and is expected to make.
Yet not everyone was so jazzed about the decision. In a terrific piece former US Treasury Secretary Larry Summers articulated <a href="https://www.washingtonpost.com/news/wonk/wp/2017/06/14/larry-summers-5-reasons-why-the-fed-may-be-making-a-mistake/?utm_term=.3fd9d567662c">“</a>5 reasons why the Fed may be making a mistake”.
And whether the Fed view or the Summers view is the better one has tremendously important implications for what the Reserve Bank should do here in Australia.
The nub of Summers’s concern revolves around the implicit model of the economy that the Fed is using – and whether it still works in the economic world in which we find ourselves.
The general worry with keeping rates too low, for too long, is that inflation will take off. In the past, policymakers have worried – with good reason – that waiting to raise rates until inflation starts rising much is dangerous because it can get out of control.
If one is not going to wait to see what happens to inflation, then one needs a way to predict the path of it. The traditional approach that policymakers have taken is to look at the relationship between unemployment and inflation – the so-called Phillips Curve – and predict future inflation based on unemployment.
Summers prefers what he calls the “shoot only when you see the whites of the eyes of inflation” paradigm. This – as the imagery suggests – involves waiting until the last possible point before raising rates. In other words, be really sure that the inflation is happening.
This makes sense if the old model is broken, and Summers makes a persuasive case that it is.
First, he points out that the Phillips Curve (the allegedly stable relationship) may not even exist. And even if it did, scholars have pointed out that it would be very hard to estimate statistically the Goldilocks point where unemployment is such that the rate of inflation is stable (the so-called Non-Accelerating Inflation Rate of Unemployment or NAIRU).
Second, Summers offers a different model of the world – at least in part. That model is one where advanced economies – like the US and Australia – are suffering from “secular stagnation”.
According to Summers, the implication for monetary policy of this are as follows:
there is good reason to believe that a given level of rates is much less expansionary than it used to be given the structural forces operating to raise saving propensities and reduce investment propensities.
I am not sure that a 2 percent funds rate is especially expansionary in the current environment.
Moreover, he sees asymmetric risk with getting it wrong, going on to say:
And I am confident that if the Fed errs and tips the economy into recession the consequences will be very serious given that the zero lower bound on interest rates or perhaps a slightly negative rate will not allow the normal countercyclical response.
Maybe the combination of a fire hose of global savings chasing too few productive investment opportunities has changed what level of interest rate can provide a serious boost to economic activity.
Which bring us to Australia. We, too, have relatively low unemployment by historical standards (the ABS just announced a drop in May to 5.5%), yet wage growth is remarkably low. Those two things happening together suggests that our old understanding of the labour market is off the mark. That low wage growth is a major driver of the low inflation we are also experiencing.
If Summers is right, and there isn’t some big point of difference between Australia and the US in this regard, then the unmistakable implication is that the RBA should probably cut rates – perhaps twice – later this year.
But there is that whole housing price thing in Australia. A rate cut could fuel further price rises which, as bad as that is for affordability, is also deeply problematic for financial stability.
Yet, if the Australian economy really does need a rate cut, and governor Philip Lowe holds steady because of housing price fears, then that could trigger a further slowing of GDP growth, put wages under even more pressure, and trigger a recession itself. And that would be bad news for financial stability, too.
Let’s see how the RBA handles that Gordian Knot.
<a href="https://theconversation.com/profiles/richard-holden-118107">Richard Holden</a> is a Professor of Economics and PLuS Alliance Fellow at UNSW and author for <a href="https://theconversation.com/au">The Conversation</a>.
</body></html>

jchancellor-FAypfDUnLy

Australia is facing an interest rates dilemma

<html><body><div class="page" title="Page 1">
<div class="layoutArea">
<div class="column">
ANZ has announced a five basis point reduction in variable interest rates for customers paying principal and interest on home loans, effective 16 June. 
The bank’s standard variable rate for owner-occupiers is at 5.20 percent/pa.
Customers with an investor loan paying principal and interest will receive a five basis point reduction on their standard variable rates.
Variable interest-only home loan rates for investors and owner-occupiers will increase 30 basis points, which the bank says is in response to regulatory and market condition.
Fred Ohlsson, ANZ Group Executive Australia said many Australians are finding it difficult to manage household budgets at present and ANZ is pleased to be able to reduce rates for the majority of our customers who are working hard to pay off their homes.
“While we know those only paying interest on their loans will be disappointed, we need to manage our regulatory obligations and we are now required to hold additional capital against our home loans. We also need to better balance our portfolio towards those paying off their homes," he said.
“There are clear benefits for our customers to be paying off their loans and we have made this as easy as possible by removing fees associated with moving across from interest-only loans.
“Today’s decision is not in response to the recently announced bank levy and we are still to determine the final impact of the tax.
“We do however recognise the work regulators are doing to manage the growth of both investor and interest-only loans and we will continue to be transparent on the impact this will have on how we structure and price our home loan products,” he said.
<a href="https://www.propertyobserver.com.au/images/2017/06/09/Screen%20Shot%202017-06-09%20at%2011.49.29%20AM.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/06/09/Screen%20Shot%202017-06-09%20at%2011.49.29%20AM.png" alt="">
</div>
</div>
</div></body></html>

Interest Rates

Editor's Picks

Have something to contribute?

Developments

New apartments

New townhouses

News

Interest Rates

Editor's Picks

Receive the latest news stories to your inbox

Have something to contribute?

Developments

New apartments

New townhouses

News