<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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UBank have announced it will reduce variable rate loans by 0.25% bringing the standard variable headline rate for new Owner Occupier P&amp;I loans down to 3.74 percent p.a. including a discount of 0.43 percent p.a as part of a value offer.
The new standard variable rate will be effective Monday 16 May 2016. 
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po-LsXgBTHBmX

UBank to pass on 0.25 percent p.a. rate reduction to variable rate customers

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<div class="cq-article-content-paras section">
Dr Philip Lowe, the RBA deputy governor since early 2012, takes over the nation's most important economic job in September when governor Glenn Stevens retires.
Both Mr Stevens and his predecessor have endorsed the appointment.
The former governor Ian Macfarlane told The Australian Financial Review "he is absolutely the right person for the job.
"He is an outstanding economist and a very sensible and pragmatic policy maker," Mr Macfarlane said.
After considering a candidate list drawn up by Treasury, the Treasurer Scott Morrison settled on Lowe in a decision that has wide spread support.
"Dr Lowe is well regarded in the central banking community, financial markets, and the Australian business community, and will reinforce existing confidence in the institution," Mr Morrison said.
The University of NSW undergraduate economics medallist joined the Reserve Bank more than three decades ago and has a PhD from the Massachusetts Institute of Technology.
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jonathanchancellor-7SQnKwU6yx

Philip Lowe gets top job at RBA

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<img src="https://counter.theconversation.edu.au/content/57114/count.gif" alt="The Conversation" width="1" height="1">
GUEST OBSERVER
Australia’s federal government clearly sees its program of annual reductions in the company tax rate as the core element in its plan for “jobs and growth”.
There is now a large – though by no means uncontested – body of evidence to support the contention that reductions in company tax rates can support faster rates of GDP growth and higher wages. It does this by stimulating higher levels of investment and hence higher levels of labour productivity.
But there is very little evidence supporting the favouring of small businesses over large in this regard. The significant preference which both this budget and its predecessor have extended to small businesses appears to owe much more to a desire to bow before small business than to any unambiguous economic rationale.
Small businesses have accounted for only 18% of the increase in employment over the most recent five years for which data are available, while firms with more than 200 employees – which the ABS defines as “large” – have accounted for 52 percent of the increase in total employment over the past five years, despite accounting for less than 32% of total employment. And large businesses are more likely to engage in “innovative activities” than small ones, especially ones with four or fewer employees.
In other words, if the government wanted to cut company taxes in a way that was most likely to result in increased job creation or higher levels of innovation (assuming that cutting company taxes would have that effect), it should have cut company taxes for large companies ahead of small ones. But that would have been exceedingly difficult, politically, in the current climate.
<h2>Mixed messages</h2>
The other key element of the government’s ten year enterprise tax plan is the increase in the tax threshold for the second-top marginal rate from $80,000 to $87,000. The government says this will prevent “average full time wage earners … from moving into the second highest tax bracket”. But when you consider the difference between gross and taxable incomes, and that most people use deductions to reduce their taxable income, $87,000 is far from average.
The budget seems to be saying to people with taxable incomes of less than $80,000 – if you want to pay less tax, get yourself a negatively-geared property investment.
The budget is also arguably saying the same thing to people with taxable incomes of more than $250,000, people who have already contributed $500,000 to superannuation over the course of their lifetimes, or people who already have at least $1.6mn in their superannuation accounts. The message is if you put any more into superannuation, we are going to tax you more, but if you put it into a negatively-geared property investment, we won’t touch you, because (in the words of the Treasurer’s Budget Speech), “that would increase the tax burden on Australians just trying to invest and provide a future for their families”.
I am quite comfortable with the budget’s proposed changes to superannuation arrangements. But I can’t see why people – even wealthy people – who are “just trying to invest” through superannuation should be singled out for less generous tax treatment, while people who are doing exactly the same thing through negatively geared property (or other) investments should remain unscathed.
The Treasurer reportedly toyed with the idea of limiting “excesses and abuses” of negative gearing, with caps on claims. This would have more or less exactly paralleled what the budget seeks to do with regard to superannuation.
The decision not to go down that path was reportedly “a political – and not an economic – move”.
But it has, and will have, economic consequences.
Combined with the Reserve Bank’s latest cut in official interest rates, the budget’s decisions and non-decisions with regard to income tax cuts, superannuation and negative gearing are likely to encourage more Australians to borrow more money in order to invest in the property market. At a time when Australia has one of the developed world’s highest ratios of household debt to GDP or personal income, and amongst the developed world’s most expensive residential real estate.
Saul Eslake is vice-chancellor’s fellow, University of Tasmania, and author for The Conversation. He can be contacted <a href="https://theconversation.com/profiles/saul-eslake-665" target="_blank">here</a>.
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jchancellor-FAypfDUnLy

Super and personal tax tweaks will drive more people into the property market: Saul Eslake 

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Member-owned financial services provider CUA will lower its standard variable rate for home owners by 0.25 percent from 19 May.
The new standard variable rate for owner-occupiers will be 4.81 percent p.a.
The standard variable rate for investors will fall by 0.20 percent to 5.22 percent p.a. 
Other interest rate reductions to variable home loan rates for owner occupiers and investors will be applied.
CUA’s Rate Breaker Package will be reduced by 0.24 percent to 4.37 percent p.a., effective 17 May 2016.
The Rate Breaker Package investor rate will fall to 4.67 percent p.a. 
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CUA to cut standard variable rate for home owners by 0.25 percent p.a.

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The big four banks have cut variable home loan rates following Tuesday's RBA announcement.
NAB, CBA and Westpac have all confirmed they will pass on the 25 basis point cut in full, while ANZ has chosen to withhold some of the cut to mitigate current wholesale funding pressures.
BoQ (Bank of Queensland), St George, and Ubank also followed suit, opening the door for cuts by other smaller lenders.
Sally Tindall, money editor at RateCity.com.au, said mortgage holders were carefully watching the banks’ moves.
“The fact that three of the four majors have announced they’ll pass on the full cut is a win for the majority of variable mortgage holders in Australia.
“ANZ’s decision to partially cut rates for residential customers is disappointing but not surprising. Increased global volatility has put the squeeze on their wholesale funding costs.
“It’s an industry-wide concern so there’s every chance other lenders will follow suit.
“If that happens, then it’s up to you to decide whether you want to stay with them.
“Regardless of whether your bank cuts rates or not, it’s also worth seeing what other lenders are offering, because ultimately the lower the comparison rate, the more money you’ll have left in your pocket.
“There are plenty of lenders already offering rates below 4 percent for owner-occupiers, so if you’re on a rate above 4.5 percent, the chances are you’ll still be behind, even if you do get a cut.”
To see a live list of lenders who have cut rates click <a href="https://www.ratecity.com.au/home-loans/mortgage-news/rba-cuts-the-cash-rate-which-banks-have-moved" target="_blank">here</a>.
<a href="/images/2016/05/05/Screen%20Shot%202016-05-04%20at%202.45.02%20PM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/05/05/Screen%20Shot%202016-05-04%20at%202.45.02%20PM.png" alt="" width="724" height="256">
 
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<img src="/images/2016/05/05/Screen%20Shot%202016-05-04%20at%202.46.50%20PM.png" alt="">
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What the RBA rate cut means for your pocket: RateCity

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 GUEST OBSERVER
RBA’s decision today to drop interest rates to 1.75 percent couldn’t have come at a better time for NSW as home approvals start to fall.
The March 2016 home approvals produced by the Australian Bureau of Statistics have dropped to 5,235 from 5,996 in June 2015.
Detached house approvals for March sit at 2,182 in trend terms compared to 3,209 for Victoria.
Higher density approvals continue to decline in NSW from 3,676 in May 2015 to 3,054 in March 2016. It seems the drop has slowed a little and this continues the slowdown from the high point in mid-2015.
<a href="/images/2016/05/03/Screen%20Shot%202016-05-04%20at%2010.42.14%20AM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/05/03/Screen%20Shot%202016-05-04%20at%2010.42.14%20AM.png" alt="">
The biggest drop in approvals has been in the non-residential sector where NSW dropped from a value of $832,561,000 in September 2015 to $618,651,000 in March 2016. This is a large drop particularly as Victoria recorded approvals of $790,675,000 which is well above the NSW figure. With NSW’s population much larger than Victoria’s, this is also an indication that we are not producing enough employment lands in NSW
In the light of the drops to approvals in NSW it is good news that the Reserve Bank has dropped rates by 0.25 percent to 1.75 percent. The Reserve Bank’s reduction was partly influenced by fear of a deflationary spiral and the slowing approval numbers in NSW seem to reflect this.
It is important that the NSW Government support more housing supply by simplifying the approvals system. It is still taking too long to get approvals in NSW which is causing the supply of new homes and jobs to underperform compared to Victoria.
Chris Johnson is chief executive officer of property development industry group Urban Taskforce and can be contacted <a href="https://www.urbantaskforce.com.au/index.php?option=com_content&amp;view=article&amp;id=97&amp;Itemid=126#.Vdaart55dFI" target="_blank">here</a>.
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Interest rate drop couldn’t have come at a better time for NSW home approvals: Chris Johnson

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The expectations that interest rates will be at 1.5 percent by the end of this year are mounting.
The official interest rate is now a record low 1.75 percent cut yesterday from 2 percent in what was the first cut by outgoing Reserve Bank governor Glenn Stevens since May 2015.
National Australia Bank was the first of the Big Four lenders to pass on the rate cut in full, followed by Westpac and Commonwealth Bank.
The ANZ declined to pass the cut on in full.
"The RBA's not being blind to the cycle they're actually adjusting to the cycle," Tim Toohey, Goldman Sachs' economist, said.
He tipped a May cut.
"It's been a pretty successful adjustment period that they've helped engineer without any help on the fiscal side, and with a currency that's not doing them any favours," he told the AFR.
James McIntyre, an economist at Macquarie who foreshadowed the cut, said the RBA's willingness to move showed confidence in their efforts to tame the housing market.
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August rate cut possible: economists 

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GUEST OBSERVER
The RBA cut its cash rate by 25bps to a new record low of 1.75 percent, as we expected. 
Market pricing was 45:55 just prior to the meeting and 12 of 27 economists in the Bloomberg survey expected a cut. The motivation for the cut was the sharply lower than expected Q1 CPI print.
The RBA remained generally upbeat about the rebalancing of the economy, although they suggested that growth would probably run at a 'more moderate pace' this year. In short, although growth is solid, it has been insufficient to keep inflation on target. Continued low global inflation and rates also contributed to today's decision to cut. Given the extent of the downside surprise on Q1 CPI inflation we expect that the RBA will need to follow up with a further cut (pencilled in for Q3). Importantly, today's cut is likely to make any further monetary policy moves unlikely before the 2 July election.
Facts
The RBA cut its cash rate by 25bps to 1.75 percent, as expected by 12 of 27 economists in the Bloomberg survey (including HSBC). Immediately prior to the announcement the market was pricing in a 45 percent chance of a cut.
Implications
The RBA has, for some time now, been reluctant to consider cutting its cash rate further. But last week's sharply weaker than expected Q1 CPI print clearly changed that view. Today's cut reflects that inflationary pressures are materially weaker than expected.
Although growth remains solid, which has supported business conditions and seen the unemployment rate edge lower, it has been insufficient to lift inflation. This partly reflects that the rebalancing of growth following the mining investment boom has seen growth run at a below trend pace for three years so far. Today's statement also suggested that the RBA sees growth moderating a little in 2016. As the central bank noted in today’s statement, growth ‘is continuing in 2016, though probably at a more moderate pace’. And despite the lower unemployment rate, ‘labour market indicators have been more mixed of late.’ This may reflect the fact that the most recent declines in unemployment have had as much to do with lower participation as job gains.
The RBA also noted that risks from the housing market have abated over the past year. In our view, the booming housing market was a factor that contributed to keeping the RBA on hold late last year, even though the Q3 CPI print was also on the low side. Tightened lending standards and slower house price inflation have helped to allow the RBA room to lower rates further, without the risk of overinflating the housing market.
Low global inflation and interest rates were also a contributor to today's decision to cut. Last week's very low Q1 CPI print provides some evidence that Australia is finally being sucked into the centre of gravity of the low global rates and inflation environment. With this in mind, today's cut was needed to ensure that the AUD did not rise significantly from here, which could have weighed further on growth and inflation.
Cutting today, rather than waiting, also has the added advantage that a further RBA move prior to or just after the 2 July election is now unlikely, which helps to keep the central bank out of the way of the political process.
Nonetheless, given the scale of the downside surprise to Q1 inflation, and the continued low global inflation environment, we doubt that today's rate cut will be enough to get underlying inflation back on track. We expect the RBA may need to deliver a further 25bp cut in Q3, probably in August, following the Q2 CPI print.
Paul Bloxham is chief economist (ANZ) for HSBC. Daniel Smith is economist. They can be contacted <a href="https://www.about.hsbc.com.au/hsbc-in-australia/management-team" target="_blank">here</a>.
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Interest rate cut delivered, expect another in Q3: HSBC's Paul Bloxham

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GUEST OBSERVER
In a decision that surprised Westpac the Reserve Bank Board decided to lower the cash rate by 25bps to 1.75 percent.
However it has not retained its easing bias choosing to end the Governor’s statement with: “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”.
We do not consider that to be particularly significant. After most decisions to move the rate the Board does revert back to a neutral stance. For example we saw that in February last year but that did not preclude a further cut in May. Indeed it is our view that this decision is so significant that it would not be taken without a realistic expectation that a further cut is likely.
We expect that cut will be delivered in August following the release of the June quarter inflation report. Inflation has become the most important policy driver as a result of this decision and we do not expect that the June quarter report will provide the Bank with sufficient comfort around the inflation outlook.
The best guide on this inflation approach will be provided in the forecasts in the next Statement on Monetary Policy to be released at 11.30am on May 6. In our preview to this decision we expected that the staff would advise the Board that on a ‘no policy change’ basis underlying inflation would remain below the 2–3 percent range in 2016 but drift back to around 2¼ percent in 2017.
The forecasts on Friday will entail “market pricing” which envisages a second rate cut by early next year. With two rate cuts relative to  the Bank is likely to indicate a return to the bottom of the 2-3 percent range but is also likely to put a fairly wide confidence interval around that forecast. By relying upon another rate cut to achieve the target we think it is reasonable to expect that the second rate cut will be delivered by August.
The significance of the inflation report in shaping this decision is really highlighted by the Governor’s decision to include “This follows information showing inflationary pressures are lower than expected” in the introductory paragraph. Our check of statements associated with rate moves shows that the last time a reason was highlighted in this way was May 2012, citing weak growth and inflation, and you have to go all the way back to November 2006 to see another example where upward inflation pressures were emphasised.
Further, in the Governor’s statement the recent data is described as “unexpectedly low” along with “very subdued growth in labour costs and very low cost pressures elsewhere in the world”. Given this high degree of sensitivity to the recent change in the inflation environment it is hard to believe that the Bank would not take the opportunity to cut rates further following the next inflation report.
There were some other surprising qualifications around the state of demand in the economy. We thought that the Bank was encouraged by the recent fall in the unemployment rate to 5.7 percent but the statement says: “Labour market indicators have been more mixed of late”.
We also thought that the Bank had been encouraged by the 3% growth print for 2015 but growth in 2016 is now being described as: “continuing … though probably at a more moderate pace”.
Our read of the Banks’ assessment of the household balance sheet suggested that it was concerned about the ongoing high level of household debt but the statement explicitly notes that risks of lower interest rates in the housing market have lessened.
Finally, despite the fact that the trade weighted index has actually fallen modestly since the April Board meeting, concerns around the appreciating exchange rate were once again raised. We believe that the Bank had been expecting the US Federal Reserve to resume raising rates in June. However now with the US data, outside the labour market, slowing and markets giving virtually no chance to a June move the Board is probably now formulating its decisions around a delayed rate hike from the US Federal Reserve. Without interest rate relief in Australia this environment could reasonably be expected to exacerbate concerns around the exchange rate.
We have also revised our own view that the FED will delay its decision to resume raising rates until September from the current forecast of June. While a respectable case remains for June there does not appear to be sufficient urgency from the Federal Reserve to move by June.  From there we expect that the FED will resume its six month timetable with the next move timed for March rather than December.
On the global front the Governor notes that growth forecasts have recently been revised down further and he specifically notes that recent data in China has improved but attributes that to recent actions by policymakers and emphasises that this action may only support the “near term outlook”. We certainly agree with that assessment given the emergence of a substantial property bubble in the ‘Tier 1’ cities.
Conclusion
We have been surprised by the strength of the response of the Bank to the March quarter inflation report. Having once again reverted to lower rates despite much questioning of the effectiveness of monetary policy the Governor has revealed an inclination to continue to use monetary policy in pursuit of his inflation target. With the risks around weak wages growth, global disinflation and potentially slowing demand it seems highly likely that he will choose to cut rates further with the next move timed for August.
That is likely to be the last policy move from this Governor who is scheduled to retire in September.
Bill Evans is chief economist of <a href="https://www.westpac.com.au/" target="_blank">Westpac</a>.
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RBA reacts strongly to March inflation report: Westpac's Bill Evans

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GUEST OBSERVER
Mozo’s Kirsty Lamont shares the five-need-to know numbers
A year on since its last record low rate cut, the Reserve Bank has again slashed the cash rate to a new historical low 1.75 percent. Here's the five numbers you need to know: 
36 percent
Just 36 percent of lenders passed on the full rate cut last time the RBA slashed the cash rate.
$8.88 million
This is how much lenders stand to profit in additional interest each day if they play scrooge and hold onto a potential 25 bps rate cut.  In fact, three out of the Big 4 banks raked in a collective $386.7 million from failing to pass on the last RBA rate cut in full last May. 
1.18 percent
Even if lenders pass on a rate discount, home borrowers still have good reason to refinance onto a better deal with the average Big 4 variable rate 1.18 percent higher than the lowest variable rate on the market right now.
$43
This is how much an average borrower could save in monthly repayments if their lender passed on the full rate cut. Alternatively, if you ignore a 0.25 percent discount and keep your repayments the same, you could save more than $20,000 in interest over the life of the loan.   
3.60 percent
Savers can be rewarded with interest rates up to 3.60 percent despite a record low cash rate. This special rate is on ME’s Online Savings Account to customers prepared to make a weekly Tap &amp; Go purchase with their linked Debit MasterCard.
Kirsty Lamont is marketing director of <a href="https://mozo.com.au/" target="_blank">Mozo</a>.
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