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

Joel Robinson

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

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

Sammut secures approval for debut Brisbane apartment development in Toowong

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

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

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

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

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

WM Residences fills gap in Mordialloc townhouse market

Interest Rates

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<img src="https://counter.theconversation.edu.au/content/63455/count.gif" alt="The Conversation" width="1" height="1">
GUEST OBSERVER
Prime Minister Malcolm Turnbull has sternly told the banks they should pass on the whole of Tuesday’s rate cut - or their chief executives must explain why they are not doing so.
After the Reserve Bank cut the cash rate by 25 basis points to 1.5 percent, the four big banks said they would pass on only part of the reduction. They have also said they are putting up their term deposits rates, to a greater or less extent.
Turnbull said the banks should be fully accountable. “It is up to them. They are big institutions. They operate with a very substantial social licence and they owe it to the Australian people and their customers to explain fully and comprehensively why they have not passed on the full rate cut and they must do so,” he said.
“They can’t just say ‘oh, it’s none or your business. Please don’t tell us how to run our business’.”
The banks should pass on the cut because it reduced their cost of funds, Turnbull said.
His tone was considerably tougher than that of Treasurer Scott Morrison on Tuesday - while Morrison said the banks should pass on the cut, he allowed them more slack than Turnbull has done.
“There is no real argument based on cost of funds that would mean that they shouldn’t pass [the cut on],” Morrison said. “But I do note that they have actually taken another action and that is to lift deposit rates. So you’ve got to look at the deposit rate increase and the mortgage rate decrease as a package of response from at least the two banks that have done that. But it’s for them to make that decision.”
The government is under some pressure on the broad issue of banks' behaviour, with Labor running hard in the election campaign on its call for a royal commission into the banks.
Michelle Grattan is professorial fellow, University of Canberra, and author for The Conversation. She can be contacted <a href="https://theconversation.com/profiles/michelle-grattan-20316" target="_blank">here</a>.
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jchancellor-FAypfDUnLy

Turnbull to banks: pass on whole interest rate cut

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The thinking behind yesterday's RBA cash rate is illustrated by today's RBA chart pack. 
Here's five that Property Observer suggests are helpful.
<a href="/images/2016/08/03/Screen%20Shot%202016-08-03%20at%2011.31.32%20AM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/08/03/Screen%20Shot%202016-08-03%20at%2011.31.32%20AM.png" alt="">
 
<a href="/images/2016/08/03/Screen%20Shot%202016-08-03%20at%2011.32.48%20AM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/08/03/Screen%20Shot%202016-08-03%20at%2011.32.48%20AM.png" alt="">
<a href="/images/2016/08/03/Screen%20Shot%202016-08-03%20at%2011.33.49%20AM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/08/03/Screen%20Shot%202016-08-03%20at%2011.33.49%20AM.png" alt="">
<a href="/images/2016/08/03/Screen%20Shot%202016-08-03%20at%2011.35.18%20AM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/08/03/Screen%20Shot%202016-08-03%20at%2011.35.18%20AM.png" alt="">
<a href="/images/2016/08/03/Screen%20Shot%202016-08-03%20at%2011.36.15%20AM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/08/03/Screen%20Shot%202016-08-03%20at%2011.36.15%20AM.png" alt="">
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August 2016 RBA chart pack gives interest rate insights

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Challenger banks are leading the response to the RBA’s second rate cut this year with Bank Australia and Bank of Sydney to pass on the full 25 basis point rate cut as the Big 4 hold back up to 15 basis points, says Mozo.com.au.
The financial comparison site says the big banks are also delaying interest rate relief to borrowers by up to 3 weeks, while Bank Australia’s generous cut will be passed on this Friday.
“The Big 4 are set to pocket a whopping $1.6 billion by denying loyal borrowers up to 15 basis points in rate relief and delaying passing on their miserly cuts by up to 20 days,” says Mozo Director Kirsty Lamont.
“At the same time, we’ve already seen two challenger banks announce they will pass on the rate cut in full and Bank Australia’s customers will get their rate relief a full week before the first big bank delivers on its stingy rate cut.”
“The third rate cut in under 18 months is great news for Aussie home borrowers and we are hoping to see a race to rock-bottom rates by challenger banks eager to snatch business away from the big banks,” says Lamont. 
All four of the big banks have announced they will cut variable home loan rates, withholding around half of yesterday’s 25 basis point RBA cut.
NAB, ANZ, CBA and Westpac have confirmed they will pass on just 10, 12, 13 and 14 basis points respectively, in August.
Bank Australia announced it would pass on the full 25 basis points, opening the door for big cuts by other smaller lenders.
<a href="https://mozo.com.au/home-loans/variable-rate" target="_blank">Mozo</a> have Mortgage House as having the lowest variable rate. Borrowers can compare 478 home loans online using Mozo’s Home Loan comparison tool.
Data insights director at RateCity.com.au Peter Arnold said variable mortgage holders were carefully watching the banks’ moves.
“The major banks’ decisions are disappointing, and it means that around 80 per cent of all variable home loan customers will miss out on some of the savings,” he said.
“The fact that all of the Big Four banks have decided to pass on just half yesterday’s RBA cut isn’t surprising and proves shareholders are their number one priority now.
“But the good news for borrowers is that there’s a home loan rate war going on and plenty of lenders will be passing on the cut in full and are actively hunting for new customers with low rates.
“There are plenty of lenders already offering rates below 4 per cent for owner-occupiers, so if you’re on a rate above 4.5 per cent, the chances are you’ll still be behind, even if you do get a cut.”
“Not all lenders passed on the full 0.25 percentage point saving after the May rate cut, with just 0.18 percentage points making its way to customers on average, leaving borrowers $183 million out of pocket,” he said.
<a href="/images/2016/08/03/Screen%20Shot%202016-08-03%20at%2012.53.48%20PM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/08/03/Screen%20Shot%202016-08-03%20at%2012.53.48%20PM.png" alt="">
Source: Rate City calculations based on a 30-year home loan at the average SV rate of 4.71 percent.
 
 
 
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j.ballantyne1990-6AQqhLzZaK

RBA rate cut update: Which banks have moved?

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As foretold by July’s inflation results, the Reserve Bank has slashed the official cash rate to a record 1.5 percent. 
Mozo has calculated the top five numbers you need to know after Tuesday’s announcement:   <img src="/images/2016/08/03/17.png" alt=""> This is the average amount of days taken by lenders to pass on the cut to borrowers since the last time the RBA cut the cash rate in May. <img src="/images/2016/08/03/10.png" alt=""> The big banks are expected to play scrooge this time around holding back as much as 10 bps of the cut to protect their margins that have been squeezed by cost of funding pressures. In fact, ANZ has pocketed around $30 million since May by failing to pass on the last cut in full. <img src="/images/2016/08/03/44.png" alt=""> This is how much the average mortgage holder could save in monthly repayments on a typical, $300,000 loan if their lender passed on the full 0.25 percent rate cut. <img src="/images/2016/08/03/15071.png" alt="">
This is how much the average borrower could save in interest by maintaining their current monthly repayments on a $300,000 loan despite a 25 bps rate cut.
<img src="/images/2016/08/03/49.png" alt="">
Competition in the fixed rate home loan market is heating up with 49 lenders now offering 3 year fixed rates under 4 percent. Borrowers can fix a portion of their home loan from as little as 3.67 percent for three years or 3.99 percent for five years.
For more information, <a href="https://mozo.com.au/" target="_blank">click here</a>.
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jonathanchancellor-7SQnKwU6yx

Mozo's five need to know numbers after the August RBA rate cut

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GUEST OBSERVER
Less than half an hour after the Reserve Bank of Australia cut the official cash rate to the new low of 1.5 percent, some of the nation’s lenders announced their interest rate movements. 
I am disappointed to see some lenders choose shareholder profits over customer outcomes. 
The RBA’s decision to cut the cash rate in August didn’t come as a surprise. 
Against a backdrop of historically low inflation, softening employment and an Australian dollar stubbornly determined to stay above $0.75 USD, it was only a matter of time before we saw the RBA cut the cash rate.
That said, at a time when the economy could do with the lift that a cut to the cash rate would provide, it was deeply disappointing to hear some of the nation’s largest and most profitable lending institutions announce that only 10 or 13 of the 25 basis point reduction would be passed on to their mortgage customers. 
It would be very easy to let this partial rate cut pass under a veil of rhetoric around the cost of wholesale funds, and requirements to hold increased amounts of capital against mortgages.
The reality is however, if all lending institutions chose an equally profit focused approach and held back this proportion of the 25 basis point cut, then this equates to something like $2 billion dollars taken out of the pockets of Australian mortgage holders and placed onto the bottom line of institutions that are already generating tens of billions of dollars in profits every year. 
It is also disappointing to see that whilst some lenders are quick in announcing these partial rate reductions, it takes them a little longer to implement these cuts at all - it can sometimes be weeks and/or months. 
There is no reason why a lending institution cannot pass on rate reductions to their customers as soon as they are announced. By choosing to delay their approved rate cuts, these lenders are further adding to their swelling bottom lines at the expense of their customers. 
Interestingly, while lenders take weeks to pass on any rate cuts to their home loan customers, I wonder how long it takes for the same institutions to reduce the amount of interest they will pay on savings and transaction accounts.
There is still a high degree of market volatility. Unemployment has edged slightly higher over the last month, consumer confidence is down, and housing affordability remains a critical issue for many.
Knowing this, I would like to see more of our lenders act in the interests of their customers.
John Flavell is chief executive officer <a href="https://www.mortgagechoice.com.au/" target="_blank">Mortgage Choice</a>.
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Are Australia's banks being greedy?

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GUEST OBSERVER
The RBA has cut the official cash rate by 0.25 percent taking it to 1.5 percent, a new record low.
Money markets had priced in around a 70 percent probability of a cut and economists were split roughly 80 percent/20 percent in favour of a cut.
In justifying the move the RBA stated that “prospects for sustainable growth in the economy, with inflation returning to target over time, would be improved by easing monetary policy at this meeting.”
With the RBA seeing growth “continuing at a moderate pace”, the latest rate cut is all about adding to confidence that inflation will head back to the 2-3% target zone within a reasonable time and to help maintain downwards pressure on the value of the $A in the face of ongoing delays in Fed rate hikes.
In terms of inflation the RBA is trying to prevent a further fall in inflation expectations that could push wages growth to new record lows and make it even harder to get inflation back to target. The longer inflation remains low and below target the greater the risk that it will become entrenched as we have seen in several other developed countries in recent years.
<a href="/images/2016/08/03/image004.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/08/03/image004.png" alt="">
Source: ABS, AMP Capital
In relation to the $A, the RBA is clearly keen to see it continue to help trade exposed sectors like tourism, manufacturing and higher education. The problem though is that “easy for longer” monetary policy globally – particularly in the US with seemingly endless delays in Fed rate hikes – is putting upwards pressure on the $A. Following the rate cut the $A is actually up slightly – highlighting the upwards pressure that it faces. If the RBA had not cut it would probably be on its way to $US0.78 or maybe $US0.80 – which as the RBA indicates “could complicate” the adjustment in economy. 
Finally, after the full pass through of the May rate cut it looks like we are only seeing partial bank pass through to mortgage rates this time around with a couple of major banks passing on just 0.1-0.13 percent this time around. This may reflect ongoing pressure on the major banks to hold more capital (which is a more expensive source of funding) and competition amongst major banks to offer more attractive term deposits. That said some small lenders may pass the cut on in full in order to expand their market share.
Will there be another cut? As always after a move the RBA’s guidance doesn’t give much away and often leads many to conclude that it has reverted to a neutral bias on future rate moves. However, we are allowing for one more rate cut in November based on our expectation that the September quarter inflation data (due in late October) will remain much lower than desired and that upwards pressure on the $A will likely remain.
Implications
For the economy the RBA’s latest rate cut is positive in that it will help support household spending power (albeit it will be muted by the only partial pass through of the latest cut to mortgage rates) and help keep the $A lower than otherwise would be the case. While low bank deposit rates are bad news for those relying on income from bank deposits it’s worth recalling that the value of household debt is more than double that of household bank deposits. 
Quite clearly, there is a risk that the latest RBA rate cut reinvigorates home price strength in Sydney and Melbourne. However, the RBA is clearly now less concerned given more cautious bank lending attitudes and a considerable supply of apartments set to come on stream. If this is not the case then it can clearly work with APRA again to make sure that it is.
For investors relying on bank interest, the decision by the RBA to cut the cash rate is not good news. That said competitive pressures have seen some banks raise their deposit rates a bit lately.
The trouble is that the they are still very low. Beyond day to day cash requirements, the key for investors currently in cash or term deposits is to work out what is most important to them: absolute certainty regarding the capital value of their investment or obtaining access to a higher more stable income flow at the cost of volatility in the value of their investment.  
In this, there are several alternative investments to cash, including shares offering high and sustainable dividend yields, commercial property, corporate debt and infrastructure investments
<a href="/images/2016/08/03/image005.png" target="_blank">Click to enlarge</a> 
<img src="/images/2016/08/03/image005.png" alt="">
Source: RBA, AMP Capital
<a href="https://www.propertyobserver.com.au/https://plus.google.com/110172465327488162875?rel=author" target="_blank">SHANE OLIVER</a> is head of investment strategy and economics and chief economist at <a href="https://www.ampcapital.com.au/home" target="_blank">AMP Capital</a> and is responsible for AMP Capital's diversified investment funds. 
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RBA cuts the cash rate to a new record low of 1.5 percent: Shane Oliver

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GUEST OBSERVER
The RBA cut its cash rate by 25bp to 1.50 percent, in line with the market and HSBC's expectations.
Although growth is holding up well, inflation is too low. The RBA noted that 'prospects for sustainable growth in the economy, with inflation returning to target over time, would be improved by easing monetary policy at this meeting'.
The statement provided little forward guidance, beyond noting that inflation was expected to remain low for 'some time'. We expect the RBA to now spend the next few months noting that they are waiting to see the full effect of the 50bp of cuts that they have delivered this year.
Looking further out, we see wages growth and local inflation gradually lifting, as the rebalancing act comes to its end (around mid-2017, in our view). We see the RBA on hold in coming quarters, rather than cutting further.
Facts
The RBA cut its cash rate to 1.50 percent today as expected by 20 of 25 economists surveyed in the Bloomberg survey, including HSBC. Just prior to the decision the market was pricing a 72 percent chance of a 25bp cut.
Implications
The RBA cut its cash rate to a new record low of 1.50 percent, driven by concerns about inflation being too low. Although growth has been solid, underlying inflation is below the bottom edge of the RBA's 2-3 percent target band and the balance of risks is for further low inflation to continue.
In the RBA's post-meeting statement, they described the rebalancing of growth that is underway, suggesting that 'overall growth is continuing at a moderate pace, despite a very large decline in business investment' and noted that 'other areas of domestic demand, as well as exports, have been expanding at a pace at or above trend'. However, this has, so far, not generated enough price pressure to keep inflation on target.
With inflation low, there was little standing in the way of the RBA cutting its cash rate further to support more growth and help to return inflation to target sooner than otherwise. Although the RBA could have argued that the inflation target is 'flexible' and allows for inflation to be below (or above) target for periods of time, they were clearly sufficiently concerned about the low level of inflation to cut further nonetheless.
Later this week the RBA will publish its quarterly official statement, which will provide more detail on the motivation for today's cut and set out a new set of forecasts. We expect the growth and inflation forecasts to be largely unchanged from May, with growth expected to a bit above trend over the forecast horizon and inflation expected to gradually lift back to target.
Over the next few months, we expect the RBA to shift its post-board meeting commentary to noting that they are waiting to see the full effect of the 50bp of cuts they have already delivered this year. We expect them to maintain this rhetorical tactic for the rest of this year. We see the next live meeting as likely to be February 2017, barring any significant surprises.
Looking further out, we see wages growth and local inflation gradually lifting, as the rebalancing act comes to its end. In our view, a key driver of the low inflation in Australia has been the rebalancing of growth following the end of the mining boom. As a result, we see inflation as likely to pick-up when the rebalancing act is complete, which we forecast to be around mid-2017. For more detail on this view see: 'Australia's low inflation: It's a part of the rebalancing act', 13 July 2016.
Of course, our view also relies on a few global factors. In particular: that commodity prices are past the trough; that China's growth remains solid and supports demand for Australia's services exports; and, that the Federal Reserve's next move is to lift rates (our US economist is expecting the next hike in Q2 2017). 
 <a href="https://www.about.hsbc.com.au/hsbc-in-australia/management-team">PAUL BLOXHAM</a> IS CHIEF ECONOMIST (AUSTRALIA AND NEW ZEALAND) FOR HSBC. 
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Another cut to help stoke inflation: HSBC's Paul Bloxham

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According to SMSF Association CEO and managing director Andrea Slattery, the cut in the official interest rate to a new low of 1.5 percent will hurt SMSF trustees who have large cash balances in retirement phase.
“Although this low interest rate environment is cause for concern for some trustees, the Association is, however, greatly heartened by the fact that a current research report shows that those SMSFs in the transition to retirement or pension phases are typically coping “very well”, she said.
“Research by the SMSF Association and the retirement experts Accurium shows that the medium average return of funds in these two phases of transition to retirement and full retirement is 4.2% – a real return of more than 3% after inflation, an excellent result in this volatile investment environment. 
“Quite clearly such a real return shows SMSF trustees are getting good advice and are making informed decisions to ensure they are both safeguarding their capital and generating an income.” 
Slattery says the research should help dispel the myth that trustees – especially in the retirement phase – are a one-trick pony with their money only in cash or fixed deposits and blue-chip Australian equities.
“The reality is trustees have been able to find ways of diversifying their investment portfolios to generate healthy returns after inflation, especially considering low interest rates and difficult investment markets, highlighting, yet again, the value of sound strategic advice," she said.
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SMSF trustees in retirement phase set to be hurt after official RBA rate cut

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STATEMENT BY GLENN STEVENS, GOVERNOR: MONETARY POLICY DECISION
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At its meeting today, the Board decided to lower the cash rate by 25 basis points to 1.50 per cent, effective 3 August 2016.
The global economy is continuing to grow, at a lower than average pace. Several advanced economies have recorded improved conditions over the past year, but conditions have become more difficult for a number of emerging market economies. Actions by Chinese policymakers are supporting the near-term growth outlook, but the underlying pace of China's growth appears to be moderating.
Commodity prices are above recent lows, but this follows very substantial declines over the past couple of years. Australia's terms of trade remain much lower than they had been in recent years.
Financial markets have continued to function effectively. Funding costs for high-quality borrowers remain low and, globally, monetary policy remains remarkably accommodative.
In Australia, recent data suggest that overall growth is continuing at a moderate pace, despite a very large decline in business investment. Other areas of domestic demand, as well as exports, have been expanding at a pace at or above trend. Labour market indicators continue to be somewhat mixed, but are consistent with a modest pace of expansion in employment in the near term. 
Recent data confirm that inflation remains quite low. Given very subdued growth in labour costs and very low cost pressures elsewhere in the world, this is expected to remain the case for some time.
Low interest rates have been supporting domestic demand and the lower exchange rate since 2013 is helping the traded sector. Financial institutions are in a position to lend for worthwhile purposes. These factors are all assisting the economy to make the necessary economic adjustments, though an appreciating exchange rate could complicate this.
Supervisory measures have strengthened lending standards in the housing market. Separately, a number of lenders are also taking a more cautious attitude to lending in certain segments. The most recent information suggests that dwelling prices have been rising only moderately over the course of this year, with considerable supply of apartments scheduled to come on stream over the next couple of years, particularly in the eastern capital cities. Growth in lending for housing purposes has slowed a little this year. All this suggests that the likelihood of lower interest rates exacerbating risks in the housing market has diminished. 
Taking all these considerations into account, the Board judged that prospects for sustainable growth in the economy, with inflation returning to target over time, would be improved by easing monetary policy at this meeting.
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Diminished low rate risks of housing boom: RBA Governor Glenn Stevens' August 2016 meeting statement

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The RBA cash rate decision came out at 2.30 today with the historic decision to further cut rates to 1.5%.
"At its meeting today, the Board decided to lower the cash rate by 25 basis points to 1.50 per cent, effective 3 August 2016."
The Board judged that prospects for sustainable growth in the economy, with inflation returning to target over time, would be improved by easing monetary policy at this meeting.
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The bank board noted supervisory measures have strengthened lending standards in the housing market.
"Separately, a number of lenders are also taking a more cautious attitude to lending in certain segments.
"The most recent information suggests that dwelling prices have been rising only moderately over the course of this year, with considerable supply of apartments scheduled to come on stream over the next couple of years, particularly in the eastern capital cities.
"Growth in lending for housing purposes has slowed a little this year.
"All this suggests that the likelihood of lower interest rates exacerbating risks in the housing market has diminished."  
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CoreLogic head of research Tim Lawless said a slowdown in dwelling value growth may have made it easier for the RBA to cut the cash rate for the second time this year, however the primary reason for rates moving lower was likely to be the low inflation reading over the June quarter and the stubborn strength of the Aussie dollar.  
"CoreLogic’s hedonic home value index reported a 6.1 percent annual rise in capital city dwelling values over the year ending July, which is the lowest rate of annual growth since September 2013 and substantially lower than a year ago when dwelling values were rising at almost double the pace," he said.
"The annual trend of growth in Sydney has more than halved over the past 12 months, falling from 18.4 percent in July last year to 9.1 percent over the past twelve months. 
"Presuming the cash rate cut is passed on to mortgage rates, there is likely to be a renewed level of scrutiny on the housing market, with policy makers wary of a reversal in the slowing housing market growth trend. 
"A resurgence of growth could trigger a new round of regulation from APRA aimed at limiting growth in investment lending and/or tightening loan to valuation ratio requirements for lenders.  The latest interest decision is likely to keep a base level of demand across the housing market, however other factors such as affordability constraints, higher supply levels, tighter lending conditions and weak rental markets are likely to see growth conditions continue moderating back to more sustainable levels."
LJ Hooker chief executive officer Grant Harrod said the shortage of stock had underpinned price growth in the NSW and Victorian capitals over the past quarter with CoreLogic reporting Sydney’s median house price increased 5.6 percent in the quarter to June, while Melbourne rose 3.5 percent.
“There’s a sharp lack of stock on the East Coast. Auction results in Sydney and Melbourne have been consistently north of 70 per cent showing the buyer demand is still very healthy,” he said.
“We’re now a month away from the peak selling season and the RBA’s move will motivate buyers even further. Most pundits thought Sydney and Melbourne’s price growth would slow over the year – especially over winter. But very few anticipated the levels of new stock would be so low.
“There’s plenty of room in the market for sellers wanting to list now; more listings will actually bring greater levels of sustainability to the market."
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