<a href="https://www.apartments.com.au/developments/broadbeach-qld-4218">Broadbeach</a> offers plenty of reasons to live vertically, but moving from a substantial family home into an apartment can expose the compromises of high-density living. Privacy, room for guests and usable living space tend to matter more when an apartment is intended as a permanent home rather than an occasional coastal base.

A typical residential floor at <a href="https://www.apartments.com.au/new-apartments/the-eveleigh-broadbeach-7-9-surf-parade-broadbeach-qld-4218">The Eveleigh</a>, on Surf Parade,&nbsp;contains just four apartments. The 94-residence development by <a href="https://www.apartments.com.au/developers/hirsch-faigen">Hirsch &amp; Faigen</a> is predominantly made up of expansive three-bedroom homes, with a limited collection of half-floor penthouses above.

Across the apartment floors, <a href="https://www.apartments.com.au/architects/rothelowman">Rothelowman</a> has used the relatively limited number of residences to give each home greater access to natural light and outlook. Living spaces extend towards full-height glazing, while a series of bay windows frame selected views across the Pacific Ocean, city and hinterland rather than treating the building edge as a continuous wall of glass.

&nbsp;

[smartcode_project:default project_id=149670 project_image_fid=360965]

“The apartment floors deliver a collection of homes that embrace controlled outlook via a series of bay windows deliberately framing moments of view,” Rothelowman Director Kim Lowman said.

From outside, those projecting forms contribute to the tower’s faceted profile. Strong horizontal and vertical elements establish its proportions, while the changing position of the sun alters the light, shadow and reflection across the façade throughout the day.

The same attention moves inside the apartments, where the material palette combines warm timber, natural stone, metallic detailing and softer curved forms. Kitchens sit within the main living zone, with stone island benches, integrated joinery and European appliances, before the living areas extend towards the glazing and the outlook.

&nbsp;

[smartcode_project:default project_id=149670 project_image_fid=360981]

Three genuine bedrooms provide room to accommodate family and guests, while two secure car spaces and storage address some of the practical considerations that can become more noticeable when moving from a larger home. Feedback from the display suite has centred on the warmth and restraint of the interiors, with buyers commenting that the residences feel like homes rather than conventional coastal apartments.

A limited collection of half-floor penthouses occupies the upper levels, increasing the scale of the living spaces and adding private balconies and elevated finishes. From this position, the outlook extends between the ocean and hinterland.

Outside the private residences, The Eveleigh separates its shared spaces between the podium and rooftop. The podium is centred on wellness, with subtropical landscaping surrounding a swimming pool and pool terrace, yoga garden, private gymnasium, sauna and hot and cold plunge facilities. Landscaped retreats and pavilions provide additional places to sit away from the main recreation areas.

&nbsp;

[smartcode_project:default project_id=149670 project_image_fid=360966]

Higher in the building, a rooftop pavilion and private dining suite sit alongside resident lounge, barbecue and outdoor dining areas, opening towards panoramic views across the ocean, city and hinterland.

“Buyers are no longer just looking for an apartment, but a lifestyle where they can relax, reset, and enjoy a balanced way of living,” Hirsch &amp; Faigen Director of Sales Matt George said.

Interest to date has come from established owner-occupiers and interstate lifestyle purchasers, including buyers planning a future move to the Gold Coast. Many are coming from larger homes and want to reduce ongoing maintenance without giving up space for family and guests, privacy, two car spaces or the ability to entertain at home.

&nbsp;

[smartcode_project:default project_id=149670 project_image_fid=360969]

Much of that daily life can also take place beyond the building without requiring a drive. Kurrawa Beach and Pratten Park are an easy walk from Surf Parade, while Pacific Fair, Oracle Boulevard, The Oasis, restaurants, cafés, entertainment and public transport are also within walking distance.

The Eveleigh is Hirsch &amp; Faigen's fourth Gold Coast development since entering the market in 2021, following The Hemingway at Palm Beach, The Emerson at Kirra and Yves at Mermaid Beach. Each of the preceding projects sold out before completion.

“Broadbeach had been on our radar throughout our time operating on the Gold Coast,” the developer said. “Following our projects in Palm Beach, Kirra and Mermaid Beach, Broadbeach represented the natural next step for the business.”

The Surf Parade site brought together proximity to the beach, protected coastal outlooks and walkability to dining, shopping and recreation. Hirsch &amp; Faigen also identified the street as an emerging premium residential address, with enough separation from Broadbeach's busier destinations to retain a quieter environment at home.

The Eveleigh is now under construction by Maxcon, with completion forecast for mid-2028. Three-bedroom residences are currently available from $2.87 million.

[smartcode_project_cta:default project_id=149670]

Joel Robinson

The Eveleigh brings house-like apartments to Broadbeach

A long-stalled Campbelltown development site is back in play, with new plans for 139 apartments set to supersede a mixed-use scheme approved almost a decade ago but never built.

The new proposal for 28 Cordeaux Street would deliver 116 market and 23 affordable apartments in a part 14-storey building, bringing a substantial new project into a Campbelltown market where new apartment supply remains limited.

Plans have been filed over the 3,092 sqm corner site at Moore-Oxley Street, around 600 metres from Campbelltown Railway Station and the city-centre retail core.

The site already carries a mixed-use residential approval dating to 2016. Doroch Architects has now been engaged on a larger replacement scheme, which is progressing as a State Significant Development Application following a Housing Delivery Authority determination in August 2025.

The apartment mix comprises 39 one-bedroom, 72 two-bedroom and 28 three-bedroom residences. Two-bedroom apartments make up just over half of the project, while three-bedroom homes account for 20 per cent.

<img alt="First look: New 139-apartment plans revive long-stalled Campbelltown city centre site" data-entity-type="file" data-entity-uuid="136dd5b9-3791-4da6-9e31-76f533f5b4de" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Campbelltown%20da2.png?VersionId=LgOSy9nwf5u.MGswBBwaGGxuX8QpHSl_" />

Of the 139 apartments, 23 will be delivered as affordable housing under the in-fill affordable housing provisions of the Housing SEPP. The affordable component represents 15 per cent of the residential gross floor area and will be managed by a registered Community Housing Provider.

Doroch has sought to break the scale of the building into two distinct elements, with a masonry podium of around four storeys establishing the street edge before the residential tower steps back above.

The corner position has shaped that approach. Cordeaux Street faces toward the commercial and civic centre, while Moore-Oxley Street leads into the lower-scale residential neighbourhood to the south, and the design verification report describes the site as "bridging the commercial core to the north and established residential areas to the south."

The podium will be expressed predominantly in face brick, while the upper levels shift to brushed and grooved concrete cladding with darker metal detailing. Recessed sections, deep balcony edges and landscaping break down the upper form, with an approximately 11.8-metre setback to the northern boundary addressing the adjoining St Peters Anglican School.

<img alt="First look: New 139-apartment plans revive long-stalled Campbelltown city centre site" data-entity-type="file" data-entity-uuid="c8b3d2d3-c561-4bfc-a5d9-a68c0c10dac1" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Campbelltown%20da1.png?VersionId=AeAEyJU02Gk2k5noUj2StziCvdQ7fW4B" />

Campbelltown has been starved of new residential developments in the last decade.

The only other notable development set to come to market this year is ALAND's Queen Square, a mixed-use precinct on over two hectares that will comprise apartments above a vibrant ground-level retail and hospitality dining precinct.

First look: New 139-apartment plans revive long-stalled Campbelltown city centre site

First Look: Sherlock Construction pitches apartments for low-rise Deception Bay

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.

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

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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]

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</main>

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

Interest Rates

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Statement by Philip Lowe, Governor: Monetary Policy Decision
At its meeting today, the Board decided to leave the cash rate unchanged at 1.50 percent.
The broad-based pick-up in the global economy is continuing. Labour markets have tightened further in many countries and forecasts for global growth have been revised up since last year. Above-trend growth is expected in a number of advanced economies, although uncertainties remain. In China, growth is being supported by increased spending on infrastructure and property construction, with the high level of debt continuing to present a medium-term risk. Commodity prices are generally higher than they were a year ago, providing a boost to Australia's national income. The prices of iron ore and coal, however, have declined over recent months as expected, unwinding some of the earlier increases.
Headline inflation rates in most countries have moved higher over the past year, partly reflecting the higher commodity prices. Core inflation remains low, as do long-term bond yields. Further increases in US interest rates are expected over the year ahead and there is no longer an expectation of additional monetary easing in other major economies. Financial markets have been functioning effectively.
Domestically, the transition to lower levels of mining investment following the mining investment boom is almost complete. Business conditions have improved and capacity utilisation has increased. Business investment has picked up in those parts of the country not directly affected by the decline in mining investment. Year-ended GDP growth is expected to have slowed in the March quarter, reflecting the quarter-to-quarter variation in the growth figures. Looking forward, economic growth is still expected to increase gradually over the next couple of years to a little above 3 per cent.  
Indicators of the labour market remain mixed. Employment growth has been stronger over recent months, although growth in total hours worked remains weak. The various forward-looking indicators point to continued growth in employment over the period ahead. Wage growth remains low and this is likely to continue for a while yet. Inflation is expected to increase gradually as the economy strengthens. Slow growth in real wages is restraining growth in household consumption.
The outlook continues to be supported by the low level of interest rates. The depreciation of the exchange rate since 2013 has also assisted the economy in its transition following the mining investment boom. An appreciating exchange rate would complicate this adjustment.
Conditions in the housing market vary considerably around the country. Prices have been rising briskly in some markets, although there are some signs that these conditions are starting to ease. In other markets, prices are declining. In the eastern capital cities, a considerable additional supply of apartments is scheduled to come on stream over the next couple of years. Rent increases are the slowest for two decades. Growth in housing debt has outpaced the slow growth in household incomes. The recent supervisory measures should help address the risks associated with high and rising levels of indebtedness. Lenders have also announced increases in mortgage rates, particularly those paid by investors and on interest-only loans.
Taking account of the available information, the Board judged that holding the stance of monetary policy unchanged at this meeting would be consistent with sustainable growth in the economy and achieving the inflation target over time.
<a href="https://www.rba.gov.au/media-releases/2017/mr-17-12" target="_blank">The RBA statement</a>.
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jchancellor-FAypfDUnLy

First signs housing price growth was easing: RBA Governor Philip Lowe's June 2017 statement

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At its meeting today, the Reserve Bank Board decided to leave the cash rate unchanged at 1.5 percent.
RBA Governor Philip Lowe said that conditions in the housing market vary considerably around the country.
"Prices have been rising briskly in some markets, although there are some signs that these conditions are starting to ease," he said.
"In other markets, prices are declining. In the eastern capital cities, a considerable additional supply of apartments is scheduled to come on stream over the next couple of years."
Tim Lawless, CoreLogic head of research, said while the cash rate has remained on hold in June, financial markets are starting to lean more towards a cut in official interest rates rather than a stable rate setting.
"Importantly, one of the key barriers to rate cuts - the hot housing markets of Sydney and Melbourne - have shown signs of slowing," he said.
"CoreLogic has reported only one month of negative dwelling value movements, albeit during the seasonally weak month of May.
"However, if this recent slowing develops into a more sustained trend, the RBA may be able to consider alternative scenarios to a steady cash rate.
"The last time rates were cut, which was May and August of 2016, the housing market reignited with capital gains accelerating and investors surging back into the market.
"The situation is very different now, with new macro prudential regulations dampening investment demand while mortgage rates have stepped higher, particularly for investors and interest only borrowers.
"The housing market will be the subject of much scrutiny over coming months, particularly the Sydney and Melbourne markets where CoreLogic figures show dwelling values have risen by approximately 75 percent and 55 percent respectively over the past five years.
"A longer trend of slowing value growth and overall softer housing conditions will lend further support to the notion that house price growth has moved through its cyclical peak and may take some pressure away from the RBA to keep rates steady especially given that other sectors of the economy other than housing seeming need interest rates set at a lower level to what they currently are.”
AMP Capital chief economist Shane Oliver took to Twitter.
"RBA on hold as exp: slower Q1 growth but to still exps rise to 3% growth; slower growth in wages constraining holds; signs of easing in Syd &amp; Melbourne," he tweeted.
"RBA <a class="twitter-hashtag pretty-link js-nav" href="https://twitter.com/hashtag/RBA?src=hash" data-query-source="hashtag_click"></a>bias still looks neutral overall. Our view remains rising risk of another rate cut given soft consumer, wages &amp; inflation. Housing to slow."
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jonathanchancellor-7SQnKwU6yx

RBA holds again as brisk housing price growth starts to ease: June 2017

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GUEST OBSERVER
Economic indicators for Australia look benign – at least for the moment.
Recent revisions to their economic forecasts by leading financial institutions reveal that another quarter of economic contraction, following the September quarter 2016, may be on the cards. Last month’s budget is unlikely to significantly alter the outlook, nor are the developments overseas.
The RBA Shadow Board continues to advocate a hold-and-wait policy. It attaches a 56 percent probability that this is the appropriate setting.
The confidence attached to a required rate cut equals 3 percent, while the confidence in a required rate hike equals 42 percent.
Headline inflation, which increased to 2.1 percent in the March quarter, lies comfortably within the Reserve Bank of Australia’s official target range of 2-3 percent.
Australia’s seasonally adjusted unemployment rate fell to 5.7 percent in April, according to the Australian Bureau of Statistics, with the economy adding more than 35,000 jobs. However, this increase was due entirely to a swell in part-time employment as full-time employment contracted by nearly 12,000.
Nominal wage growth continues to remain subdued. In fact, in the March quarter real wages fell by 0.2 percent.
The Aussie dollar, relative to the US dollar, recently fell below the 74 US¢ mark, with some financial market analysts predicting a breach of the 70 US¢ threshold before the end of the year. Yields on Australian 10-year government bonds continue to slide; they now equal 2.4 percent. Domestic share prices have pared their recent gains, with the S&amp;P/ASX 200 stock index trading below 5,800.
Commodity export prices dropped a considerable 6.8 percent in May; they are now more than 10% below their January peaks. Even though mining investment increased slightly for the first time in nearly three years, it is expected to fall 22 percent in the year ahead, based on ABS surveys. Non-mining firm investment is expected to increase by 3.7 percent in the same period.
Internationally, there exists no stand-out news item to help guide policy. Economic statistics from Europe and the US look favourable but geostrategic conflicts, uncertain elections and unpredictable US policy could change this swiftly. China is unlikely to experience another round of double-digit growth rates. On the contrary, there remains the possibility that the debt overhang and structural adjustment will further slow the economy.
Consumer and business confidence remain modest. Other measures of economic activity such as capacity utilization, retail sales and inventory behavior remain tightly range-bound.
The Shadow Board’s policy preferences have barely nudged since last month. It is 56 percent confident that keeping interest rates on hold is the appropriate policy, one percentage point down from May.
It attaches an unchanged probability of 3 percent that a rate cut is appropriate and a 42 percent probability (40 percent in May) that a rate rise, to 1.75 percent or higher, is appropriate.
The probabilities at longer horizons are as follows: 6 months out, the estimated probability that the cash rate should remain at 1.50 percent equals 23 percent, unchanged from the previous round.
The estimated need for an interest rate decrease is up two percentage points, from 4 percent to 6 percent, while the probability attached to a required increase equals 71 percent (73 percent in May).
A year out, the Shadow Board members’ confidence that the cash rate should be held steady equals 14 percent (17 percent in the previous month), while the confidence in a required cash rate decrease edged up from 4 percent to 7 percent and in a required cash rate increase remained unchanged at 79 percent.
<a href="https://www.propertyobserver.com.au/images/2017/06/06/Screen%20Shot%202017-06-06%20at%209.46.55%20AM.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/06/06/Screen%20Shot%202017-06-06%20at%209.46.55%20AM.png" alt="">
More information from the CAMA RBA Shadow Board can be found <a href="https://cama.crawford.anu.edu.au/rba-shadow-board" target="_blank">here</a>.
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Hold and wait best policy: RBA Shadow Board

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With the Australian Prudential Regulation Authority (APRA) clamping down on interest-only loans, experts and economists think interest-only borrowers may have a hard time refinancing to principal and interest loans, according to finder.com.au, the comparison website.   All 33 experts and economists in the monthly <a href="https://www.finder.com.au/rba-cash-rate" target="_blank" rel="noopener noreferrer">finder.com.au RBA survey</a>, which is the largest of its kind in Australia, are expecting the cash rate to hold at 1.5 percent at today's board meeting.   When asked about future cash rate movements (regardless of when it will happen), the majority (80 percent, 24 of 30) of panellists think the next move will be a rise.    Of the minority who are expecting a cash rate fall, most of this group believe the rate will dip no lower than 1.00 percent. However, Stephen Koukoulas of Market Economics and Jordan Eliseo of ABC Bullion believe the rate will fall even lower to 0.75 percent and 0.50 percent respectively.
"The RBA continues to place far too much weight on Sydney and Melbourne housing markets and not enough on the rest of the economy which is crying out for lower interest rates," Stephen Koukoulas, Market Economics said.   The majority of experts and economists (74 percent) expect the next rise to come in 2018. However, some are indicating that a rise may be due sooner with four respondents anticipating a rise between October and December this year.   As APRA is aiming to keep all new interest-only loans below 30% of total new residential mortgages, most panellists (57 percent) surveyed on this topic believe borrowers switching from interest-only to principal and interest, or those whose fixed interest-only terms are nearing expiring, may have a hard time refinancing.   Graham Cooke, Insights Analyst, at finder.com.au, says with potential rate rises in store, interest-only borrowers may be hit the hardest.   “Borrowers shifting from an interest-only loan to a principal and interest loan may be struck with a higher repayment initially, and they may find it difficult to service the principal portion, but ultimately it’s important to pay down the principal of the loan.   “With the next rate move likely to be in a positive direction, and with many lenders already lifting product rates, interest-only mortgage holders will be the most directly affected,” he says.   For example, for a $800,000 interest-only loan with 4 percent interest, repayments will be $2,667 versus $3,819 for those borrowers also paying down the principal.    However, increasing the interest rate from 4 percent to 6 percent would up the interest-only loan repayments by $1,333 per month, yet the principal and interest repayments would rise by only $997.   “To shield yourself from rate rises, look at your budget and find ways to free up your cash flow so you can cope with higher repayments. For instance, you may decide to consolidate personal debt to save on account fees or ongoing interest charges,” he says.   Regarding Standard &amp; Poor (S&amp;P)’s recent downgrading of 23 Australian financial institutions, most panellists (15, 63 percent) thought S&amp;P’s perception of the increased risk of a sharp fall in property prices was not justified. However, nine (37 percent) disagreed.   “We’re looking at a higher-interest future. So it’s time to start planning for higher interest rates," Mr Cooke says.    “Interest-only investors are reliant on prices continuously going up, but we’re starting to see prices either slow or fall in some cities across the country, so ensure you have a 2-3% buffer to cushion yourself against any future rate rises." Here’s what our experts had to say:
 Jordan Eliseo, ABC Bullion (Hold): "There is no compelling case to move rates in either direction at this stage. Despite generally soft economic data (today's retail sales notwithstanding), we expect the RBA will wait to see further evidence that the Australian property market is indeed cooling, before cutting rates in the second half of this year."   Shane Oliver, AMP Capital (Hold): "Not enough has changed since the last meeting when the RBA actually revised up slightly its growth outlook."   John Hewson, ANU (Hold): "Insufficient info so monitoring data."   Alison Booth, Australian National University (Hold): "The fundamentals are little changed."   Darryl Gobbett, Baillieu Holst (Hold): "The RBA will still be concerned about systemic stability being possibly adversely impacted by increased debt if rates were cut while likely seeing little benefit to increased growth. Uncertainty about impacts of  a rate rise with the current economic, property and political uncertainties put well off the possibility of a rate rise."   Peter Munckton, Bank of Queensland (Hold): "The economy is improving, and the RBA would prefer not to reduce rates."   Dr Kishti Sen, BIS Oxford Economics (Hold): "The Reserve Bank won't cut rates because it won't improve business investment. Business investment remains weak despite historically low financing rates. In addition, recent increases in the residential property market have been too high. They won't raise rates as underlying inflation is expected to remain close to 2% over the next two years."   Paul Dales, Capital Economics (Hold): "The RBA is willing to put up with underlying inflation being below its 2-3% target range as long as the unemployment rate remains below 6% and as long as it is still worried about the strong housing market and high level of household debt. In other words, lower interest rates may just exacerbate the housing issue."   Michael Blythe , CBA (Hold): "House price concerns vs low inflation."   Savanth Sebastian, CommSec (Hold): "RBA comfortable about the medium term outlook for Australia. Is likely to keep a close eye on how household consumption evolves over the rest of this year."   Dr Andrew Wilson, Domain Group (Hold): "Although case growing for a cut in rates Bank still more likely to continue with optimistic steady settings - but decision should be closer than recent as ANOTHER negative quarter of GDP looms."   Scott Morgan, Greater Bank (Hold): "Current data indicates that there will not be a change."   Mark Brimble, Griffith University (Hold): "The outlook is weak for the next 12-24 months and thus the bias is for the economy needing more support.  The financial institutions have not helped by pushing rates up, however this has assisted with APRA's desire to reduce property and credit risks.  All in all, the RBA is likely to sit on its hands again."   Shane Garrett, Housing Industry Association (Hold): "Inflation is at comfortable rate, growth does not require further support at this time. The foreign exchange rate is balanced."   Paul Bloxham, HSBC (Hold): "Because underlying inflation is past its trough."   Alex Joiner, IFM Investors (Hold): "There is no justification for a rate move. If anything economic performance and risks still suggest there should be an easing bias and property markets/debt accumulation suggest a tightening one. The former argument remains stronger in my view."   Michael Witts, ING Bank (Hold): "The RBA would be happy with the current state of the economy and will await until the release of Q1 GDP data before considering interest rate changes."   Leanne Pilkington, Laing+Simmons (Hold): "The latest data suggests subdued house price easing is occurring in major markets, there are conflicting opinions on the near-term growth prospects of the economy, the crackdown on interest-only loans seems to have caused investors to back off, and the threat of the major banks adjusting rates to counter the bank levy cannot be entirely discounted. A steady cash rate is the constant among this broader uncertainty.”   Nicholas Gruen, Lateral Economics (Hold): "Because the economic is flat and, though it would like to increase rates, the economy remains sluggish."   Matthew Tiller, LJ Hooker (Hold): "No material change in economic environment since RBA last met."   Stephen Koukoulas, Market Economics (Hold): "RBA continues to place far too much weight on Sydney and Melbourne housing markets and not enough on the rest of the economy which is crying out for lower interest rates."   John Caelli, ME (Hold): "The RBA won’t cut rates because it remains concerned about fuelling further increases in house prices and household debt."   Michael Yardney, Metropole Property Strategists (Hold): "Our economy is stumbling along so until job numbers improve it would be safe to assume the RBA won’t be hiking interest rates to slow the property markets down. On the other hand they can't afford to drop rates and fuel our property markets. So rates will remain on hold."   Mark Crosby, Monash University (Hold): "While there are some indicators of softening inflation and weakness in the economy, including slowing house price growth there is no case for a rate cut. Given this weakness and a softer US inflation outlook reducing the probability of an imminent Fed rate increase, there is also little case for raising rates."   Christopher Schade, MyState Bank (Hold): "The hurdle for another cut is high. While inflation remains subdued and the outlook for economic growth over the next year couple of years is slightly below trend, interest rate settings in Australia are very accommodative and remain appropriate at their current level. The RBA appears particularly reluctant to deliver further cuts given heightened financial risks on the back of high household debt levels."   Saul Eslake, Economist (Hold): "Nothing has happened since the last meeting that is likely to have materially altered the RBA's view of the outlook for inflation, economic growth or unemployment from that set out in the May Statement on Monetary Policy, and hence nothing will have altered their view that current monetary policy settings are appropriate."   Alan Oster, Nab (Hold): "RBA still weighing rates v house prices. Too early to tell"
Jonathan Chancellor, Property Observer (Hold): "They are low enough for the bank to continue to watch as is."   Noel Whittaker, QUT (Hold): "No reason to move either way."   Nerida Conisbee, REA (Hold): "The RBA still likely to be concerned about economic growth and particularly underemployment and low inflation. Unwilling to cut due to the state of housing. RBA will be cautious not to accelerate. For home buyers the RBA's decision doesn't really matter as banks will increase rates anyway driven by APRA and potential banking tax."   Christine Williams, Smarter Property Investing (Hold): "Retail spending over this month will increase due to retail sales and EOFY, which in turn will increase the nation's credit card debt. This will portray a false positive outlook from an economic point of view."   Janu Chan, St.George Bank (Hold): "RBA unlikely to have altered its on hold stance over the past month. Housing indicators suggest cooling conditions but its concerns over risks associated with housing and household debt will remain. Employment was the other development the rba is watching closely. On this front the fall in the unemployment rate would have been encouraging."   Steven Milch, Suncorp (Hold): "Mixed economic signals don't adequately make the case to cut or hike at this stage."
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j.ballantyne1990-6AQqhLzZaK

RBA to hold at June 2017 meeting, but the Kouk expects three more cuts

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The Reserve Bank of Australia might need to cut interest rates several times due to the weakness in the labour market, according to Credit Suisse, a view which goes against the general market expectations.
While jobs growth in April beat expectations and the unemployment rate fell to a four-month low, full-time jobs edged down and the weakness in the detail would have been bigger if not for another month of bias from the sample rotation, Credit Suisse analysts, led by Damien Boey, said in a note to investors, the Business Insider reported.
The current cash rate is at a record low of 1.5 percent and many industry observers say the RBA will actually lift its cash rate, though this won’t be anytime soon. 
HSBC’s senior economist Paul Bloxham also recently suggested that the Q1 CPI numbers also suggest that rate rises are not likely any time soon. 
“The output gap is at levels historically consistent with another cash rate cut,” Credit Suisse said. “We believe there is a case for multiple cuts, because our measure of the output gap is based on upwardly-biased labour market data, and probably understates the degree of slack in the economy.”
That said, Credit Suisse felt the positive headline data means the RBA is yet to get a trigger to change its policy stance, the Business Insider said.
Latest ABS data showed Australia added 37,400 jobs, well above expectations for an increase of 5,000.
However, full-time employment fell by 11,600 over the month, while part-time employment surged by 49,000.
“Employment quality was even more questionable considering statistical distortions. For yet another month, the ABS rotated its sample in favour of cohorts with higher full-time employment to population ratios,” noted Credit Suisse.
“There is a notable net upward bias to the full-time employment data since late 2016. In our view, this means that if we were to remove upward statistical biases, the decline in full-time employment in April would have been even greater than officially reported.”
Employment leading indicators, based on business and consumer confidence, as well as trend growth in loan approvals point to a near-term bottoming out in the labour market, the bank said.
However, the official data, thanks to the statistical problem, has stolen the march and shows the jobs market has already bottomed out and when the sample bias reverses, it could start throwing out some ugly numbers.
Credit Suisse is not alone in blaming the data. Commonwealth Bank of Australia economists said the jobs report left them scratching their heads and pointed to the fact the job additions over the last two months were the equivalent of 1.2 million increase in US non-farm payrolls over the same period.
“Our cash rate model currently points to one further cut,” Credit Suisse analysts said.
“However, because of our belief that full-time employment gains have been significantly overstated, we think that our output gap proxy understates the amount of slack in the economy. We remain of the view that the RBA needs to cut rates multiple times this year.”
 
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RBA needs to cut interest rates several times: Credit Suisse

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Shadow banks are charging interest-only investors nearly 60 basis points less for standard variable loans than the big bank competitors.
The big savings for property buyers explains their growing popularity, analysts have suggested.
Shadow bankers are however bracing for growth speed limits and pressures to constrain interest-only lending as faced by their major peers. 
John Khall, chief executive and founder of Pacific Mortgage Group, said it has not happened yet "but we expect some changes."
Their acceptance been facilitated by their prominence on online best-price comparator websites.
Moves by prudential regulators to increase regulation of the big banks has assisted in the shift to shadow banking finance. 
The shadow banks are non-authorised deposit taking institutions known as non-bank lenders.
Data suggests almost half their loan portfolios are interest-only borrowers, well above new regulatory standards intended to slow speculative lending. 
The big banks now need to keep interest-only loans to a 30 percent limit with their overall loan book. 
Shadow banks typically use securitisations to raise funding.
The are able to use low-cost distribution and lower regulatory capital requirements to out-price rivals.
Shadow banks on average out-price the majors on standard variable residential principal and interest by 60 basis points, standard variable investment principal and interest by 64 basis points, standard variable residential interest-only by 43 basis points and standard variable investment interest-only by 57 basis points.
The analysis published in Fairfax Media by Canstar, which monitors financial service products, is based on a $1 million loan with a loan-to-value ratio of 80 percent.
Using the ‘other financial intermediaries’ (OFIs) measure, the RBA said some time back that Australia's shadow banking sector is small relative to the global average, although they have surged after the APRA restrictions on investor lending. The RBA said earlier this year that it is watching the sector.
</div>
<div> </div>
<div>
 
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Interest only buyers seeking shadow banks to outprice the majors

Minutes of the May Monetary Policy Meeting of the Reserve Bank Board

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More than 30 percent of potential first home buyers have said they may have to put their property plans on the back-burner if interest rates rise, new research has revealed.  
According to Mortgage Choice and Core Data’s Evolving Great Australian Dream whitepaper, 33.7 percent of prospective buyers said they would be “increasingly unlikely to buy a home” if rates started to climb.
For 33.4 percent of respondents, rate rises would not affect their property purchasing intentions, while the remaining 32.9 percent said they were unsure how rate adjustments may impact their property plans.
“The fact that a rate increase would encourage more than one in three first home buyers to put their property plans on the backburner concerns me,” Mortgage Choice chief executive officer John Flavell said.
“The fact is, rate rises are inevitable. In fact, over the past few weeks, the majority of lenders have increased the interest rates across their suite of home loan products.
"These rate increases have come outside of any rate adjustments by the Reserve Bank of Australia.
"According to our lenders, increased funding pressures have forced them to lift their rates.
"The reality is, even with the latest rate increases, mortgage interest rates are still sitting at historically low levels, which ensures the cost of borrowing is still incredibly affordable.”
Mr Flavell said it was important for first home buyers to do their research when applying for a home loan.
“When you are applying for a home loan, you should always dot your ‘i’s’ and cross your ‘t’s’ so you understand what you’re signing up for,” he said.
“It is important to check that you are not only able to service a mortgage at current interest rates, but at increased rates, which will be inevitable.
You should also consider your current and future personal circumstances, as this will impact your ability to repay the mortgage.
A qualified mortgage professional can walk you through your options and recommend the best product to suit your current and future needs.” 
Mr Flavell said brokers were highly regulated and worked hard to ensure customers were placed in a home loan that suited their unique goals and financial circumstances.
“At Mortgage Choice, we always factor in a financial buffer, as do our lender partners.
This financial buffer is usually several percentage points higher than a customers’ interest rate.
By doing this, we make sure all customers can not only comfortably afford their mortgage repayments now, but they can also afford their repayments if and when interest rates rise,” he said.
“Having a customer in a home loan they cannot afford doesn’t benefit anyone.
It’s for this reason why, at Mortgage Choice, we ensure every customer is put in the right financial product for their circumstances.”
Table 1: How will you be impacted when rates rise? 
<table border="1" cellspacing="0" cellpadding="0"><tbody>
<tr>
<td valign="top" width="213">
With mortgage interest rates at record lows and property prices at record highs, how are you likely to be impacted when rates eventually and inevitably start climbing?
</td>
<td width="78">
National
</td>
</tr>
<tr>
<td valign="bottom" width="213">
I will be increasingly unlikely to buy a home
</td>
<td valign="bottom" width="78">
33.70%
</td>
</tr>
<tr>
<td valign="bottom" width="213">
It will not affect my intentions
</td>
<td valign="bottom" width="78">
33.40%
</td>
</tr>
<tr>
<td valign="bottom" width="213">
Unsure
</td>
<td valign="bottom" width="78">
32.90%
</td>
</tr>
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One in three FHBs unlikely to buy home if rates rise

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GUEST OBSERVER
The RBA left the cash rate unchanged at 1.5 percent at today’s meeting.
The recent data flow, coupled with RBA commentary, suggests the decision to leave policy unchanged was straight forward.
We have the RBA on hold at 1.5 percent throughout 2017 and well into 2018.
The RBA’s decision to leave policy unchanged today was no surprise. Governor Philip Lowe has made it crystal clear that concerns around rapid dwelling price growth and the level of household debt mean that the cash rate is unlikely go lower unless there is a sustained loss of momentum in job creation.
The strong, albeit questionable, March employment report has allayed fears at the RBA that the labour market was softening given the weakness in the February data.
<a href="https://www.propertyobserver.com.au/images/2017/05/02/Screen%20Shot%202017-05-03%20at%208.21.28%20AM.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/05/02/Screen%20Shot%202017-05-03%20at%208.21.28%20AM.png" alt="">
There was very little to gain in the way of new insights in today’s Statement. In our view, the most noteworthy change was around the outlook for wages growth. Lowe expanded on last month’s assessment that “wage growth remains slow,” and added that, “this is likely to remain the case for a while yet.” We agree given the significant amount of slack in the labour market (see here).
The Governor commented on recent developments in the labour market and noted that although, “the unemployment rate has moved a little higher over recent months, employment growth has been a little stronger.” He also added that, “the unemployment rate is expected to decline gradually over time.” In other words, the Governor views the recent lift in the unemployment rate as temporary. We agree and would add that it was driven higher by rising participation.
On inflation, the Governor noted that the headline QI CPI, published last week, was “in line with the Bank’s expectations”. And that, “a gradual further increase in underlying inflation is expected as the economy strengthens”.
The rest of today’s Statement contained only cosmetic changes compared with the April Statement.
The outlook
Our monetary policy call has the RBA on the sidelines in 2017 and well into 2018. We see jobs growth sufficient enough for policy to remain on hold. But the risk lies with another cut given very weak wages growth, below target core inflation and an expected further downturn in hard commodity prices. In our view, the recent additional measures announced by APRA to address risks in the housing market marginally lower the hurdle for another rate cut. In that context, market pricing, which implies a 13 percent chance that policy is eased again, is a fair assessment of the balance of risks.
The near term focus for the monetary policy outlook turns to Thursday when Governor Lowe will speak at a luncheon. The title of his speech, “Household Debt, Housing Prices and Resilience” – suggests the Governor will once again emphasise the RBA’s reluctance to cut the cash rate from here.
On Friday the RBA publishes its quarterly Statement on Monetary Policy (SMP). The Bank’s near-term GDP forecasts may be nudged up a little, but underlying CPI projections are expected to remain unchanged.
Gareth Aird is economist at Commonwealth Bank and can be contacted <a href="https://www.propertyobserver.com.au/https://au.linkedin.com/pub/gareth-aird/14/790/905">here</a>.
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mick.cee-iDmgDDAmu8

RBA's neutral bias reaffirmed: Gareth Aird

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GUEST OBSERVER
As expected, the Reserve Bank Board decided to leave the cash rate unchanged at 1.5 percent.
The minutes of the April Board meeting noted that “the Board judged that developments in the labour and housing market warranted careful monitoring over coming months”. It was therefore a little surprising that the Governor did not repeat that same sentiment in his statement.
Instead, the statement finished in the usual way “the Board judged that holding the stance of monetary policy unchanged at this meeting would be consistent with sustainable growth in the economy and achieving the inflation target over time”.
Possibly explaining this approach is a more confident assessment of the labour market. This comes in response to the March employment report which showed that full-time jobs increased by 74.5k and total jobs rose by 60.9k.
This one month report seems to have calmed concerns at the Bank. For example, in April the Governor commented that “indicators of conditions in the labour market have softened recently… the unemployment rate has moved a little higher and employment growth is modest”. In this statement, he notes that “the unemployment rate is expected to decline gradually over time” and employment growth has been a little stronger.
It is unlikely that we will be able to discern an improved outlook for the labour market in the Bank’s forecasts, which will be updated for the May Statement on Monetary Policy, to be released on September 5.
That is because the unemployment rate forecast is a rather timid “5-6 percent". As we predicted in the preview of the SoMP, it now seems likely that the key growth and inflation forecasts will remain unchanged from the February SoMP.
In the Governor’s statement today, he foreshadows that “growth is expected to increase gradually over the next couple of years to a little above 3 percent”. Note that the growth forecasts for the February SoMP are 2.5-3.5 percent for 2017 and 2.75-3.75 percent for 2018 (mid-points of 3 percent and 3.25%).
Similar comments can be made about the inflation forecasts. The Statement refers to underlying inflation running at “around 1.75 percent” and gradually increasing. The forecasts for underlying inflation in the February SoMP are 1.5-2.5 percent in both 2017 and 2018 (or 2 percent mid-point).
While the Governor clearly responded to the better than expected employment report, there is no change in the assessment of the housing market despite recent reports that house price growth in April was the weakest for sixteen months. He still worries that growth in household debt is outpacing household incomes and notes that “prices have been rising briskly in some markets”. As in April, he points out that recently announced supervisory measures should help address housing risks.
Commentary on other aspects of the domestic economy remains downbeat. Indeed, whereas in April, he referred to “non-mining business investment has risen over the past year”, he now talks about non-mining investment” remaining low as a share of GDP“.
Finally, commentary on the global economy is more confident than in April. He talks about a “broad based pick up in the global economy” whilst recognising that commodity prices have recently reversed.
Conclusion
Westpac has been forecasting that the official cash rate will remain on hold throughout 2017 and 2018. With our view that growth is likely to slow in 2018 under the weight of a contraction in the residential construction cycle and falling terms of trade, the case for raising rates in that year will prove to be fragile.
BILL EVANS is chief economist of <a href="https://www.westpac.com.au/">Westpac</a>. 
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