<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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GUEST OBSERVER
Market sentiment has turned more positive, in part because participants realise that the US economy remains solid and as China concerns abate. 
Strong US jobs growth in February boosted risk sentiment and reduced recession fears. 
The RBA remained on hold as expected. Q4 GDP data showed that the economy recorded a strong finish to 2015. 
We still expect further RBA rate cuts, but the data are challenging this view and risks are skewed toward policy easing occurring later than we forecast. 
China nominated a 6.5-7% GDP growth target for 2016. 
INTEREST RATE STRATEGY 
Yields finished higher after a white knuckle ride for the Australian front end last week. 
Risk-on sentiment globally helped push yields higher. 
Focus to remain on higher funding costs as a major bank announced a rise in investor housing loan rates. 
CURRENCY STRATEGY 
The USD is struggling as the data pulse remains strong, but Fed rhetoric remains dovish. This, together with the solid GDP outcome in Australia, is keeping the AUD elevated. 
The sustainability of these AUD levels will depend on the market volatility remaining subdued. 
COMMODITY STRATEGY 
Low prices induce supply response in copper. 
Iron ore supported by hope of further policy support in Chinese steel sector. 
Investor demand for gold remains robust. 
<a href="/images/2016/03/7/Screen%20Shot%202016-03-07%20at%2011.50.39%20AM.png" target="_blank"> Click to enlarge</a>
<img src="/images/2016/03/7/Screen%20Shot%202016-03-07%20at%2011.50.39%20AM.png" alt="" width="794" height="547">
RBA ON HOLD… 
As widely expected, the RBA kept the cash rate on hold at 2 percent last week. The Bank continued to take a positive view of the Australian economy, noting that “the expansion in the non-mining parts of the economy strengthened during 2015”. 
We interpreted two small changes to the Governor’s statement as slightly on the dovish side. First, the Bank noted that low inflation “would” provide scope to ease further rather than its prior reference to “may”. Secondly, the AUD was characterised as “has been adjusting” versus “has continued its adjustment”. Clearly, the Bank would still prefer a lower AUD which has subsequently pushed higher to USD0.74. The Bank would likely become more vocal on the currency again if the activity data started to soften. 
…WHICH WAS JUSTIFIED BY Q4 GDP 
The slightly more dovish tone from the Bank, however, came before the strong Q4 GDP print. Not only did Q4 GDP surprise on the upside at 0.6% q/q, upward revisions meant that growth over the year was well above expectations at 3 percent. The Bank had been flagging the potential for GDP revisions and this rate of growth helps to square the apparent disconnect with the strong labour market data last year.
<a href="/images/2016/03/7/Screen%20Shot%202016-03-07%20at%2011.57.35%20AM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/03/7/Screen%20Shot%202016-03-07%20at%2011.57.35%20AM.png" alt="">
The Bank would have been heartened by the pick-up in household spending. A key feature of the Bank’s forecasts is a strengthening in household spending to slightly above the long-run average of 3 percent. Household consumption grew 2.9 percent y/y in Q4. 
Housing construction also remained strong (+2.2 percent q/q; 10 percent y/y) in Q4. A significant backlog of work is supporting activity at record levels, especially in the key Sydney and Melbourne markets but lower approvals numbers suggest this growth impetus will wane.
<a href="/images/2016/03/7/Screen%20Shot%202016-03-07%20at%2011.59.05%20AM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/03/7/Screen%20Shot%202016-03-07%20at%2011.59.05%20AM.png" alt="">
Meanwhile, business investment fell as expected. Engineering construction drove the quarterly fall as resources projects, particularly LNG, continued to approach completion. But the news on the investment front was not all one-way traffic, with both machinery &amp; equipment spending and non-residential building rising solidly in Q4, the latter despite falling building approvals and a shrinking backlog of work. 
Overall, there were plenty of positives in the national accounts. Growth continues to broaden beyond the mining sector, and the pick-up in consumer spending will be particularly encouraging for the RBA. As such, the economy is on a much firmer footing than previously envisaged. 
WE STILL EXPECT FURTHER RATE CUTS 
Despite the improvement in the economy over the second half of 2015, we continue to expect further RBA rate cuts this year. Our call for the first rate cut to occur in May, however, is being challenged by the incoming data. 
We maintain that the contribution to growth from property market activity – not just housing construction – will ease over 2016. Dwelling construction directly added .ppt to Australia’s GDP growth in 2015 but this is unlikely to be sustained. While the level of building activity will remain high, the fall in residential building approvals over the past year suggests that the impetus to growth will wane (Figure 3).
<a href="/images/2016/03/7/Screen%20Shot%202016-03-07%20at%2012.07.56%20PM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/03/7/Screen%20Shot%202016-03-07%20at%2012.07.56%20PM.png" alt="">
 
There are also risks around household spending. While household consumption strengthened over 2015, this was against a weak income backdrop and was heavily assisted by a sharply lower saving ratio (Figure 4).
<a href="/images/2016/03/7/Screen%20Shot%202016-03-07%20at%2012.09.02%20PM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/03/7/Screen%20Shot%202016-03-07%20at%2012.09.02%20PM.png" alt="">
Presumably, the falling saving ratio can be partly attributable to a ‘wealth effect’ amid strong dwelling price growth. But this is expected to wane this year amid slower house price growth (and as equities have weakened). Some of the savings decline, however, will reflect consumption smoothing, with evidence of this particularly in the mining states of WA and Queensland that ran up savings during the commodity price boom. 
More timely data on retail sales (released last week) show that spending has been soft in recent months, with no growth in December and a modest 0.3 percent m/m rise in January. 
With unemployment expected to remain around 5¾– 6 percent, spare labour market capacity will continue to weigh on wages growth. In all, it is difficult to see household consumption accelerating further from here. Consumption growth falling below the RBA’s expectations would certainly increase the likelihood of further rate cuts.
Surveyed business conditions have moderated in the early months of 2016, indicating some slowing in non-mining activity. Ahead of the important NAB survey tomorrow, however, Ai Group’s surveys for February continued to show some consolidation in aggregate at above-average levels (Figure 5). Business confidence may be further weighed down by the negative global sentiment in February.
<a href="/images/2016/03/7/Screen%20Shot%202016-03-07%20at%2012.24.05%20PM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/03/7/Screen%20Shot%202016-03-07%20at%2012.24.05%20PM.png" alt="">
Overall, the incoming data on the Australian economy has remained OK and, for now, allays any concerns about the renewed strength in the currency. China’s target of 6.5–7 percent GDP growth for 2016, coupled with slightly higher budget deficit, lending and money supply growth targets, will also help to further calm anxiety about that economy. 
The rate cut we have pencilled in for May is less than two months away so clearly the risks are skewed towards further RBA policy easing kicking off later than we expect. Markets are only pricing one full rate cut for this year. 
Despite weak wages growth, we can’t rule out being surprised on the upside by household spending. There is room for household saving to fall further to support stronger-than-expected consumption. Housing markets have commenced 2016 in a relatively positive fashion, with auction clearance rates rebounding in Sydney and Melbourne, while price growth has stabilised at solid rates. If these early indicators translate into a second wind for building approvals, the risks would be to the upside for housing construction. Moreover, the RBA would likely be uncomfortable reducing the cash rate further in the face of ongoing strength in house price growth. 
Working in the opposite direction, however, are that the global growth backdrop remains fragile, our interest rates continue to look ‘high’ in a world where negative rates are more commonplace, and creeping upward pressure on actual lending rates in Australia is likely to remain from higher funding costs and tighter capital requirements. 
Stay tuned.
Daniel.Gradwell is economist in ANZ's Australian Research unit and can be contacted <a href="https://www.anz.com/personal/" target="_blank">here</a>.
 
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jchancellor-FAypfDUnLy

Rate cuts still likely, but ANZ says doom and gloom takes a back seat

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GUEST OBSERVER
There have been no surprises from the RBA which left interest rates on hold at its March meeting. This marks the tenth month in a row with the cash rate remaining at 2 percent.
In its Statement accompanying the decision, the RBA made very little changes: continuing to sound less upbeat on the global economic outlook, acknowledging the volatility in financial markets, continuing to see inflation remaining low and seeing property price gains 
in Sydney and Melbourne as having moderated.
The RBA also indicated that it is continuing to wait for more information in order to be able the impact of financial turbulence on the Australian economy and to assess the labour market. 
However, it did make too substantive changes to its post meeting Statement. In removing a reference to above average levels for survey measures of business conditions and in saying that “continued low inflation would [as opposed to “may” in the February Statement] provide scope for easier policy, should that be appropriate…” the RBA appears to have strengthened its easing bias somewhat.  
Our view remains that the RBA will cut interest rates again this year reflecting the risks around the global economy, weaker than expected commodity prices, still subdued growth in Australia at a time when the contribution from housing construction is slowing, a more dovish Fed threatening a higher Australian dollar and continued low inflation. However, this may not come till May. Given the RBA’s focus on inflation the March quarter CPI to be released in late April will be worth watching.
However, whether there is another rate cut or not from the RBA, it remains very hard to see rate hikes any time soon. So the period of low interest rates is set to continue.
<a href="/images/2016/03/image003.png" target="_blank">Click to enlarge</a>
 <img src="/images/2016/03/image003.png" alt="">
<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 on hold as expected, but signals a slightly stronger easing bias: AMP Capital's Shane Oliver

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GUEST OBSERVER
The cash rate has been left at a record low of 2.00 percent for a 10th month (11 months of rates at 2 percent).
The Reserve Bank Board has not adjusted commentary on the Australian dollar, implicitly signalling that the currency is broadly where it should be. The real trade weighted index is near 6-year lows.
What does it all mean?
The Reserve Bank adopted a ‘conditional easing bias’ in November 2015. That is, the Reserve Bank indicated at the time that scope existed for lower interest rates “should that be appropriate to lend support to demand.” But while the Reserve Bank has indicated that rate cuts are more likely than rate hikes, it is no closer to acting on that bias. In fact, the more likely situation is one where interest rates remain on hold for a prolonged period.
It’s not hard to work out why stable rates are the preferred course of action. In simple terms, the economy is doing OK and doesn’t need a kick along. Clearly the economy could be doing better and the Reserve Bank would be hoping that its forecast for stronger growth proves to be right. But it is by no means becalmed. 
Dwelling starts are at record highs, so are car sales, so are tourism numbers. And while there has been some easing of home
demand in Sydney, Melbourne remains strong and other cities are recording stronger conditions. Hobart home prices are rising at the fastest annual rate in 5ó years.
The housing market had been a source of angst for the Reserve Bank. But conditions are becoming more balanced across cities and regions.
The Reserve Bank has maintained its positive commentary on the Australian economy and its cautious view of the global economy. “…the available information suggests that the expansion in the non-mining parts of the economy strengthened during 2015 despite the contraction in spending in mining investment.”
Is the Reserve Bank worried about the recent lift in the Australian dollar? Not in the least. The commentary on the Aussie was brief: “The exchange rate has been adjusting to the evolving economic outlook.”
Perspectives on interest rates
The previous rate cut was in May 2015 (25 basis points), taking the cash rate to a record low of 2.00 per cent.
There have been 10 rate cuts since November 2011.
The Reserve Bank had previously lifted rates seven times from October 2009 to November 2010 – a total of 1.75 percentage points, from 3.00 percent to 4.75 percent.
What are the implications of today’s decision?
CommSec doesn’t expect any change in the cash rate for the foreseeable future. Underlying inflation remains at the bottom of the 2-3 percent target band but should lift over 2016 as import prices gradually lift in response to a weaker exchange rate.
<a href="/images/2016/03/Screen%20Shot%202016-03-01%20at%203.07.41%20PM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/03/Screen%20Shot%202016-03-01%20at%203.07.41%20PM.png" alt="" width="656" height="491">
Craig James is the chief economist at <a href="https://www.comsec.com.au/default.aspx" target="_blank">CommSec</a>.
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cjames-5S2v74qSNK

Reserve Bank keeps rates at record lows: CommSec's Craig James

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The RBA today held rates at 2 percent.
The decision from the RBA came as no surprise today, considering labour markets are holding up and housing market conditions have moderated but remain firm, Tim Lawless at CoreLogic RP Data said.
"The fact that the rate of capital gains has wound down across the housing market and investor activity is reducing from the highs of mid last year are likely to be welcomed developments from the Reserve Bank.
"Based on indices data released today by CoreLogic, capital city dwelling values rose by 1.4% over the most recent three month period and by 7.6% over the past twelve months; a substantial slowdown from the strong housing market conditions that were evident over the first half of 2015."
Lawless suggests if the RBA were to provide another cash rate cut later this year, they probably wouldn’t need to worry too much about over stimulating the housing market; mortgage rates are already higher than a year ago due to the higher capital requirements implemented by APRA and the pace of investment credit growth is tracking well below the 10% speed limit imposed in December 2014. 
"With inflation tracking around the bottom of the RBA target range of two to three per cent, the Reserve Bank can work to stimulate the economy by dropping the cash rate further if they see a requirement to do so."
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No change: RBA March 2016 cash rate decision

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GUEST OBSERVER
A weaker jobs report and a pullback in surveyed business conditions suggests that local growth remains below trend.
At the same time, inflation is low, giving the RBA scope to cut further, if needed, despite its considerable reluctance to do so.
We expect the RBA to be on hold for now, but see another cut in Q2, unless the AUD sees a tangible fall before then.
The past month has delivered a modest pullback in the timely indicators of economic activity, from the much stronger numbers in late 2015. Some part of this may reflect a response to the recent financial turmoil, but it is also likely to reflect some correction for over-statement of the strength in the statistics late last year.
After reaching post-global financial crisis highs in Q3 and Q4 2015, surveyed business conditions have pulled back in December and January. Likewise, employment fell modestly in the past couple of months, following very strong growth in October and November (part of this reflects measurement issues in the official labour force survey).
Job advertisements and job vacancies have continued a modest trend higher, and consumer and business sentiment are around average. Although housing market auction clearance rates have picked up strongly in February, the daily house price numbers continue to show flat housing prices since August.
The modest pullback in the activity indicators leaves the economy growing at a solid, but still below-trend pace. We expect next week’s Q4 2015 GDP print to show growth of 2.5% y-o-y. This pace of growth is insufficient to generate a pick-up in inflation, and we continue to expect the underlying measures of inflation to drop below the bottom edge of the RBA’s target band in coming quarters. Wages numbers, published this week, show wages growth slowing to new lows, and this is expected to continue to weigh on domestic inflation.
A further fall in the AUD could help to lift inflation, but the AUD has been quite sticky at around US70-72 cents. With policy rates set to fall further in Europe and Japan in coming quarters and the market doubting whether the Federal Reserve will hike this year, the global backdrop is putting upward pressure on the AUD. 
Speculative positions have recently shifted to ‘long’ the AUD/USD for the first time in nine months.
Despite the RBA’s considerable reluctance to cut the cash rate further, we expect they may have to cut around mid-year to keep inflation on target. We expect them to remain on hold next week but expect a cut in Q2.
<a href="/images/2016/03/Screen%20Shot%202016-03-01%20at%2011.04.03%20AM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/03/Screen%20Shot%202016-03-01%20at%2011.04.03%20AM.png" alt="" width="730" height="334">
Local activity indicators have pulled back a little
In recent quarters, the RBA has pointed to two key pieces of evidence that growth is lifting: surveyed business conditions and improvements in the labour market. 
Both of these sets of indicators have started to pull back in the past couple of months.
Surveyed business conditions, which had been around their post-global financial crisis highs, fell in December and January (Chart 1). The official labour force survey has also shown that employment fell modestly in December and January, following very strong growth in October and November. In this case, we see part of the pullback as reflecting measurement issues in the official jobs numbers. Our own ‘labour market index’ suggests jobs growth of around 1.5% y-o-y, rather than the official numbers which show growth of 2.5% (See Downunder Digest: Is Australia’s jobs growth really that strong?, 11 February 2016). These indicators suggest that growth remains below trend.
Wages sluggish and investment outlook weak
The key question for the RBA is whether this below-trend growth will be sufficient to keep inflation on target? We remain doubtful. Underlying inflation is currently at the bottom edge of the 2-3% target band we expect it to fall in coming quarters. Despite steady improvement in the labour market, this week’s numbers showed that wages growth has continued to slow to a new record low on the 2.2% in Q4 2015 (Chart 3). State details also reveal that even the regions with the strongest labour markets, New South Wales and Victoria, are seeing continued sluggish wages growth (Downunder Digest: Rebalancing act drives state divergence, 25 February 2016).
<a href="/images/2016/03/Screen%20Shot%202016-03-01%20at%2011.07.12%20AM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/03/Screen%20Shot%202016-03-01%20at%2011.07.12%20AM.png" alt="" width="765" height="334">
 
This week’s capital expenditure survey, which contained the first estimates for financial year 2016/17, also showed that the outlook for business investment remains weak.
Unsurprisingly, mining investment is expected to fall further in 2016/17. At the same time, the capex survey showed that non-mining investment is expected to fall further in 2016/17. This partly reflects measurement issues, with the capex survey excluding a range of services industries, but also provides evidence that the investment outlook remains a challenge.
Housing market still appears to be cooling
Timely indicators of the housing market have been presenting mixed signals over recent weeks.
Auction clearance rates, which typically have a strong positive correlation with housing price growth, have jumped to quite high levels in February (Chart 5). However, this time of year is particularly difficult to assess, given the low turnover around Christmas means that sales are delayed until February. The daily housing price numbers show that housing prices have levelled out since August 2015, both nationally and in Sydney and Melbourne (Chart 6). We continue to expect the housing market to have cooled from its strong pace of activity in 2015 (see Downunder Digest: Australia’s housing market cools, 11 December 2015).
A rising AUD would be unhelpful
Besides low interest rates, the other mechanism that has been a key support for growth andinflation has been the lower AUD. This has worked through directly lifting imported goods prices  but, even more importantly, it has improved Australia’s competitiveness. The combination of  lower interest rates and the lower AUD have been the main drivers of the rebalancing of growth away from mining and towards the housing and services sectors. Tourism and education exports have been supported by the lower AUD.
<a href="/images/2016/03/Screen%20Shot%202016-03-01%20at%2011.09.53%20AM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/03/Screen%20Shot%202016-03-01%20at%2011.09.53%20AM.png" alt="" width="806" height="374">
 
Given the housing boom that has already occurred and the RBA’s increased concerns about financial stability in 2015, the central bank has shown considerable reluctance to cut its cash rate further to boost growth. The RBA would much prefer growth to be supported by a further fall in the AUD than by lowering its cash rate again. However, although the AUD is a long way below its peak levels of 2011, it has now been broadly steady for the past seven months, so is no longer continuing to loosen financial conditions. The AUD is also sitting at a level that is higher than is implied by its previous relationship with commodity prices (Chart 7). The current level of commodity prices implies that an AUD around US60-65 cents may be closer to ideal.
With policy rates set to fall further in Europe and Japan in coming quarters and the market doubting whether the Federal Reserve will hike this year, the global backdrop is putting upward pressure on the AUD. Speculative positions have recently shifted to ‘long’ the AUD/USD for the first time in nine months (Chart 8). For more on market positioning around the AUD, see Clyde Wardle and Daragh Maher, AUD bulls take over from the bears, 19 February 2016.
Recent RBA commentary on the AUD
Despite the AUD not having fallen with commodity prices in recent months, the RBA Governor, Glenn Stevens, has been reluctant to directly ‘jawbone’ the currency lower. At his recent semiannual testimony to a parliamentary committee (12 February 2016) the Governor noted that ‘there was a period when we felt that the exchange rate was not quite doing the job we might have expected, and we said so. It then adjusted, and our language has of late been, “it’s adjusting”. I would still say that. I would also note that commodity prices are continuing to fall as we speak’.
Last week, the market responded to some comments by an RBA board member, John Edwards, to The Australian (19 February 2016). Mr Edwards said ‘I still think it [the AUD] is a bit too high’ and that he’d be more comfortable with the ‘AUD trading around US65 cents’. However, as John Edwards also said to the Australian Financial Review (23 February 2016), ‘I can’t speak for the board at all, but I myself think I’m more comfortable with a lower dollar’. We do not view Mr Edwards’ comments as the commencement of an official RBA ‘jawboning’ campaign. Keep in mind that board members do not vote at the RBA, with the decision on the cash rate reached through consensus based on a recommendation by the staff.
Nonetheless, we think the RBA will be watching the currency carefully at the moment. Without a further fall in the currency (perhaps to around US65 cents) we expect the RBA may need to cut its cash rate further. Another bout of ‘jawboning’ the currency lower by the Governor may be just around the corner.
<a href="/images/2016/03/Screen%20Shot%202016-03-01%20at%2011.12.16%20AM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/03/Screen%20Shot%202016-03-01%20at%2011.12.16%20AM.png" alt="" width="599" height="211">
<a href="https://www.about.hsbc.com.au/hsbc-in-australia/management-team" target="_blank">PAUL BLOXHAM</a> IS CHIEF ECONOMIST (AUSTRALIA AND NEW ZEALAND) FOR HSBC. 
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Expect rates to be on hold, for now: HSBC's Paul Bloxham

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After last month’s rout, global stock markets bounced back but financial markets remain edgy. The unemployment rate rose to 6%, and inflation, at 1.7%, remains below the RBA’s target band of 2-3%. Overall, the outlook for the Australian economy is modest.
The CAMA RBA Shadow Board continues to have a strong preference for keeping the cash rate on hold, attaching a 68% probability to this being the appropriate policy setting. The confidence attached to a required rate cut equals 22%, down five percentage points from the previous month, while the confidence in a required rate hike only equals 10%.
Australia’s unemployment, according to the Australian Bureau of Statistics, climbed to 6%. Full-time employment shrank by over 40,000 in January, while the participation rate remain unchanged. At less than 0.5%, there is still no real wage growth to speak of, making it more difficult for households to stimulate the economy with higher consumption expenditure.
The Aussie dollar remains range-bound between 70 US¢ and 73 US¢. The benefits of a weak domestic currency are not yet obvious from the trade data. In December 2015 the trade deficit equalled $3.5 billion which is greater than the previous five months. Yields on Australian 10-year government bonds have fallen yet again, most recently to 2.39%, indicating that financial markets are expecting sustained weakness in the Australian economy.
Worldwide, particularly in the emerging markets, the economic outlook looks feeble. Global share markets have rebounded a little but volatility and uncertainty, as measured by the VIX, remain high.
World trade fell 13.8% in dollar terms in 2015, making it the worst year for global trade since the global financial crisis, according to the Netherlands Bureau of Economic Policy World Trade Monitor. However, much of this decline can be attributed to falling commodity prices; in volume terms the picture looks much less grim.
While the US economy continues to expand at a modest clip, Europe and the emerging markets are straining. High indebtedness, both private and public, limits the extent to which these economies can fuel demand, even at historically low interest rates. Thus, global growth will likely remain weak, and there may be further disruptions in financial markets.
The Shadow Board’s confidence that the cash rate should remain at its current level is virtually unchanged at 68% (69% in February). The confidence that a rate cut is appropriate has, after two consecutive drops, risen again and now equals 22% (17% in February); the confidence that a rate increase, to 2.25% or higher, is necessary has fallen to 10% (14% in February).
The probabilities at longer horizons are as follows: 6 months out, the estimated probability that the cash rate should remain at 2% has jumped to 30% (24% in February). The estimated need for an interest rate increase has fallen 13 percentage point to 47%, while the need for a rate decrease has risen to 23% (16% in February). A year out, the Shadow Board members’ confidence that the cash rate should be held steady edged up three percentage points, from 19% to 22%, while the confidence in a required cash rate increase equals 63% (66% in February) and in a required cash rate decrease 16% (unchanged from February).
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More of the same from the Reserve Bank: Shadow Board

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Economists believe the Reserve Bank will keep the cash rate on hold at 2 percent ahead of Tuesday's monthly board meeting.
31 experts surveyed for the <a href="https://www.finder.com.au" target="_blank">finder.com.au</a> Reserve Bank Survey believe the Reserve Bank is comfortable with the current cash rate setting, with Shane Oliver from AMP Capital saying it's basically in 'wait and see mode' regarding the jobs market and the potential impact of global financial turmoil.
Westpac's Bill Evans said the Board will be assessing whether the recent improvement in labour market conditions was to continue and whether recent financial market turbulence presaged weaker global and domestic demand.
According to the survey, 39 percent of respondents  predict ‘out of cycle’ interest rate changes this year despite the overwhelming majority expecting that the Reserve Bank will keep the cash rate on hold or drop it in 2016.
Some 45 percent of respondents believe we are at the bottom of the cycle and 26 percent forecast one further rate cut to 1.75 percent. 10 percent of those surveyed predict the cash rate will fall to 1.50 percent this cycle. Nearly half of those polled believe the next move from the RBA will be to increase rates, however not until 2017.
Finder.com.au consumer advocate Bessie Hassan said some lenders have a tendency to keep their rate hikes quiet and with the uncertainty in the market, it’s really important that homeowners don’t become complacent about their mortgages and therefore miss any important news that may impact their finances. “Australians should be cautious – experts are divided about what lenders will do next. While we don’t expect a dramatic upswing in rates, they can turn very quickly and catch borrowers by surprise.  “But if you do your homework now those changes won’t become a burden. A little planning can go a long way.”  
Tips on how to maximise your mortgage now 
<ul>
<li dir="ltr">
Consider fixing your home loan. Look around at other financial institutions, not just your current lender, to find the best deals. The lowest 3-year fixed rates on finder.com.au currently sit at 3.99 percent.
</li>
<li dir="ltr">
Pay off more on your mortgage each month or drop money into an offset account while interest rates are at record lows to give  yourself a buffer against possible increases.
</li>
<li dir="ltr">
Cut back on spending to be better placed with a rise in interest rates. Those savings can help service your mortgage debt.
</li>
</ul>
 What our experts had to say in the March Reserve Bank Survey: Shane Oliver, AMP Capital: “Recent Reserve Bank commentary suggests a degree of comfort with the current level for the cash rate and while it retains an easing bias not enough has changed to suggest it is about to act on it. It's basically in wait and see mode regarding the jobs market and the potential impact of global financial turmoil.”
Garry Shilson-Josling, Australian Associated Press: “For the Reserve Bank, it's a matter of "so far, so good". In his testimony to parliament on Friday, Reserve Bank governor Stevens made it pretty clear he was in no hurry to move the cash rate.The big question for the RBA is to reconcile the strong labour market data and the weaker GDP data. If jobs growth continues in line with its recent trend, talk of rate hikes will be grow louder over the second half of this year.”
Steven Pambris, Bank Of Sydney: “Current Market Conditions remain subdued.”
Richard Robinson, BIS Shrapnel: “Although below trend, economic growth is still holding, with enough positives to outweigh the negatives. Confidence rebounded in February, so consumers are not panicking, and households will continue to spend, albeit with modest growth.”
Mark Brimble, Griffith University: “The majority of indicators are weakening (employment, confidence, sentiment, output, market volatility, capex, the ill advised Fed movement last year, default rates, oil related debt concerns, etc) and the rise in rates by banks (which they argued was due to APRA capital requirements) has further dampened growth.  The Reserve Bank has room to move on rates and the economy needs the support - both the actual and the psychological.”
Chris Caton, BT Financial Group: “No reason to do anything else.”
Michael Blythe, CBA: “Economy is responding to low rates and lower AUD. So no need for more stimulus at this point.”
Savanth Sebastian, CommSec: “Reserve Bank Board Members will wait on more data on just how well the economy is tracking in early 2016.”
Dr Andrew Wilson, Domain: “Labour market still holding.”
Jason Spencer, Homely.com.au: “Credit growth is growing at a moderate pace while the dollar remains around the reasonable 70c mark.”
Shane Garrett, Housing Industry Association: “The Reserve Bank remains open to the possibility of reducing interest rates, but is only likely to do so should the economic situation internationally deteriorate further.”
Paul Bloxham, HSBC: “Gross is solid.”
Michael Witts, ING Bank: “The domestic economy is continuing to be resilient in the face of the global volatility. the Bank will want to see more information prior to making a call.”
Grant Harrod, LJ Hooker: “Despite a slight increase in the unemployment rate, there are no clear signs that the Australian economy has deteriorated. This will see the Reserve Bank continue its wait and see approach. Slower house price growth and low levels of inflation provide the Reserve Bank with enough room to cut rates should they need to stimulate growth during the first half of 2016.”
John Caelli, ME: “Weaker than expected global growth.”
Mark Crosby, Melbourne Business School: “Despite a volatile international environment the local economy is still stable and the inflation outlook would warrant holding for the moment.The current environment is quite volatile, and my expectation is that this will subside as China in particular stabilises. But there is a non-trivial downside risk which would alter the path for rates.”
Lisa Montgomery, Mortgage &amp; Consumer Finance Expert: “There is no economic data to support any change in cash rate.”
Jessica Darnbrough, Mortgage Choice: “Domestic data has been relatively upbeat of late, thus providing the Reserve Bank with no real reason to change their stance on monetary policy.”
Ken Sayer, Mortgage House: “Economic indicators ‘lack lustre’.”
Chris Schade, MyState Bank: “Whilst it remains more likely the Reserve Bank will cut as oppose to raise rates in 2016, conditions in the domestic economy do not currently warrant such. That said, the Board will be closely watching economic developments over the coming period and remains ready to act if required.”
Saul Eslake, Independent Economist: “There is no good reason for the Reserve Bank to change the cash rate. Monetary policy is already highly accommodative; although the economy is growing at a below-trend pace, the unemployment rate has been falling of late and 'underlying' inflation is comfortably within the Reserve Bank's target band. Although the ongoing turmoil on financial markets potentially represents a source of downside risk, there is as yet no evidence of that potential being realized: and as the Reserve Bank has noted, they have scope to cut rates further should that prove necessary.”
Alan Oster, NAB: “Too early to tell what is happening in non mining post equity route.”
Peter Boehm, onthehouse.com.au: “Holding rates seems like the sensible option at this stage. With inflation under control (and unlikely to be a problem for the next twelve months or so), unemployment at sub 6% with good participation rates and reasonable albeit below trend economic growth as measured by GDP, there is no need to help stimulate the economy by dropping rates further right now.  In any event, there is some doubt that a drop in the Reserve Bank’s Cash Rate would be passed on to consumers in full through lower borrowing costs as lenders aim to shore up their balance sheets and bottom line. Further, it is also doubtful that any further reduction in interest rates would help stimulate economic activity to the extent hoped given the effect of global forces currently impacting market sentiment here in Australia – with China’s response to its economic situation topping the list.  It is also worth noting that dropping rates further may hurt older Australians who rely on earnings from their savings to help fund their retirement living.   If rates were to fall further it’s a signal that our economy is probably in a lot worse shape then we’re led to believe.  A key area of economic focus should be on how to effectively fund the provision of what has been described as “expensive government services” and this relies on reform of the tax system and not interest rates.” 
Zoe Pointon, OpenAgent.com.au: “Uncertainty in the equity markets and slowing property price growth.”
Jonathan Chancellor, Property Observer: “The Reserve Bank loves to move slowly when lowering rates, so not yet.”
Noel Whittaker, QUT: “Uncertainty.”
Angus Raine, Raine &amp; Horne: “The Reserve Bank will stick with its 'wait and see' approach from February. It will seek to weigh inflation data, financial and commodity market turmoil, and business confidence, against local real estate data which appears to be on the improve compared to the end of 2015.There are plenty of buyers and investors in the Sydney, Melbourne and Brisbane markets, who missed out in 2015 and have decided to return to the market for a second shot at buying a property. While we don't expect the double-digit growth of 2015, we still expect to see growth in some of Australia's biggest real estate markets, especially in light of ongoing share market volatility.”
Nathan McMullen, RAMS: “Reasonable prospects for growth in the economy remain driven by current accommodative interest rate settings.”
Janu Chan, St.George Bank: “The Reserve Bank is in a wait and see stance. Low inflation and global uncertainty keeps the possibility of a rate cut alive, but it won't feel the need to while the labour market is performing quite well.”
Nicki Hutley, Urbis: “The domestic economy continues to post moderate growth on output and employment. The impact of recent global instability on the real economy is as yet unknown.”
Bill Evans, Westpac: “The Board will be assessing whether “the recent improvement in labour market conditions was continuing and whether recent financial market turbulence presaged weaker global and domestic demand...  We assess that the balance of these forces will see the unemployment rate hold around 6.0% during 2016 before grinding lower in 2017, as the economy gains momentum.” 
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1.5% cash rate forecast, but no move at March RBA: finder.com.au

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Consumers continue to be hawkish about interest rates hikes, though the percentage expecting mortgage rates to rise has fallen in the last six months, reveals a recent survey.
The February results from the Westpac–Melbourne Institute Consumer Sentiment Index shows a majority (52 percent) expecting rates to rise, down from 57% in August, while 41 percent expect no change and 7 percent said rates could fall.
Though the majority figure has fallen, it is still a hawkish mix given the RBA’s mild easing bias, says the Westpac report. While official rates look to be ﬁrmly on hold, the RBA Governor’s decision statements have noted the “potential scope for easier policy, should that be appropriate”.
Even allowing for an apparent ‘upward bias’ to consumers’ rate expectations, this is a signiﬁcantly more hawkish view than economist forecasts and market expectations. "In other words, even though rates have declined more often than they have risen, consumers have rarely expected them to fall. Indeed, there is only one period – June 2012 – when the ‘net balance’ was for rates to fall," says the report.
There has been a modest rise in mortgage rates since August, with banks increasing their standard variable rates by an average of 20bps in November, citing increased capital requirements due to regulatory changes.
Prior to this, banks had already increased rates on investor loans by an average of 27bps.
The change in standard variable rates is broadly consistent with surveyed consumer expectations back in August with the median expectation at the time was for a 19bp increase. The median expectation from this month’s survey implies a further 7bp rise and a year ahead point estimate for mortgage rates of 5.72 percent.
The apparent ‘upward bias’ to consumers’ mortgage rate expectations makes it a little difficult to compare them with other benchmark measures of interest rate expectations, says the report.
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Consumers still hawkish on rates, at odds with market expectations: Westpac Red Book

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Australians are becoming more savvy with saving money on their home loans, with the number of mortgage customers opting to refinance their loans at an all-time high, according to new analysis by the comparison website finder.com.au.
The finder.com.au analysis of the latest Australian Bureau of Statistics (ABS) Housing Finance data reveals that almost 22,000 Australians refinanced their mortgages in December 2015.
<a href="/images/2016/02/22/pasted%20image%200.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/02/22/pasted%20image%200.png" alt="">
 Bessie Hassan, Consumer Advocate at<a href="https://finder.us9.list-manage1.com/track/click?u=cc5e9bce699fa1d71a67cf499&amp;id=2e5f42edd2&amp;e=58cd8ffd03" target="_blank"> </a>finder.com.au, says that trend is expected to continue as customers rush to take advantage of historically low interest rates. “In fact, the total value of refinanced home loans is forecasted to reach $100 billion this year, an increase from the record $77 billion in 2015, according to finder.com.au research. “With signs pointing to a rate rise in the near future, now is a great time for homeowners to consider refinancing. As it stands, the cash rate is at a historical low and providers are offering among the lowest rates ever seen – borrowers can potentially save thousands of dollars per year by making the switch to a better deal. “For example, the 21,896 Australians who refinanced their home loans last December collectively would have saved about $148 million in interest by <a href="https://finder.us9.list-manage.com/track/click?u=cc5e9bce699fa1d71a67cf499&amp;id=5235f5664e&amp;e=58cd8ffd03" target="_blank">fixing their mortgage</a> for three years at a cheaper rate,” says Ms Hassan. That’s based on a $354,614 average 30-year home loan refinanced from the current 5.11% standard variable rate (SVR) to the average 3-year fixed rate at 4.59%, assuming a return to the current SVR after three years. “That’s an impressive $6,771 saving per homeowner over the fixed period of the loan,” says Ms Hassan. The number of home loans being refinanced has surged by 20 percent in the past twelve months compared to December 2014 (18,183 refinances in December 2014 vs 21,896 refinances in December 2015). Further to this, interest in finder.com.au’s<a href="https://finder.us9.list-manage1.com/track/click?u=cc5e9bce699fa1d71a67cf499&amp;id=f2375a9e33&amp;e=58cd8ffd03" target="_blank"> refinancing home loans hub</a> has skyrocketed 331% in the past month, compared to the same period last year. “This indicates that low interest rates and money savings are top of mind for borrowers – which is the way it should be,” says Hassan. “As with any major financial decision, shop around, because rates and fees can vary significantly between lenders.  “If you’d prefer to stick with your current lender, get in touch with the customer retention team and try to negotiate a better rate. “Remember, there could be huge financial rewards to be reaped, but first you’ve got to do your homework.”
The top variable loans monitored by <a href="https://finder.us9.list-manage.com/track/click?u=cc5e9bce699fa1d71a67cf499&amp;id=7746572958&amp;e=58cd8ffd03" target="_blank">finder.com.au</a> right now are:
<a href="/images/2016/02/22/8cfe836e-f966-4e79-98a9-67adf2e19422.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/02/22/8cfe836e-f966-4e79-98a9-67adf2e19422.png" alt="">
The top 3-year fixed loans monitored by <a href="https://finder.us9.list-manage.com/track/click?u=cc5e9bce699fa1d71a67cf499&amp;id=612c441eef&amp;e=58cd8ffd03" target="_blank">finder.com.au</a> right now are:
<a href="/images/2016/02/22/2d757f50-3bdd-493a-8afb-1f268314e9b3.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/02/22/2d757f50-3bdd-493a-8afb-1f268314e9b3.png" alt="">
 
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The best home loan rates on offer: finder.com.au

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GUEST OBSERVER
The minutes of the monetary policy meeting of the Reserve Bank Board for February provided no surprises given that we have recently seen the Statement on Monetary Policy (SoMP) and the Governor’s testimony to the House of Reps Standing Committee on Economics.
The key theme in those communications is repeated - that the Board will be assessing whether “the recent improvement in labour market conditions was continuing and whether recent financial market turbulence presaged weaker global and domestic demand”.
The tone of the discussion on the domestic economy was positive.
The minutes noted that domestic data had on balance been positive and that there were reasonable prospects for growth to increase gradually over the forecast period. Household consumption was seen to be growing around trend and there was evidence that the low interest rates were supporting growth in consumption and dwelling investment with the lower exchange rate boosting demand.
Whereas over the last year or so the commentary on the drag from mining investment tended to point to an intensifying of that drag the commentary now points out that the peak drag from mining investment is now likely to be in 2015-16 and the drag will lessen over subsequent years.
We are aware that the Bank has been frustrated by the lack of pick up in non mining business investment and the minutes conclude that there is now little prospect of that pick up in the near term. However, the minutes do point out that business surveys are at above average levels and business lending has picked up.
There is more information on the Banks’ liaison contacts around the economy. They note that the demand for high density housing outside Perth has been sufficient to absorb the increase in supply, although an increasing number of projects have been put on hold.
Other liaison shows that in the retail sector trading conditions had improved in the Christmas and post-Christmas periods. Low interest rates, lower petrol prices and increasing employment were expected to continue to support household consumption growth.
The minutes also provided further interpretation of the strong employment data pointing out that output growth in the services sector had been strong with this sector being more labour intensive than others. Of course the Governor indicated in his Parliamentary Q&amp;A that while he recognised there may be some technical difficulties with the current employment data he expected that the signal around the unemployment rate itself was reliable.
In the recent SoMP the Bank forecast that the unemployment rate would continue to fall from current levels. While this was the Governor’s interpretation of the strong data the minutes do balance this view somewhat by pointing out that strong employment growth in conjunction with below average GDP growth created some uncertainty.
The commentary around international conditions was broadly unchanged with the forecast for trading partner growth expected to remain a little below decade average.
The one exception to this steady commentary was around China. Here the detail seems to be more pessimistic. Longer term structural factors such as declining growth in productivity and the urban working age population were also seen to be important. Deflationary pressures were persisting and there are concerns that the interaction between slowing growth, low inflation, and high and increasing levels of debt intensified uncertainty around the outlook. The minutes even speculated on the impact of a sharp slowing in economic activity that would spill over into the region including Australia.
The minutes contained a detailed discussion of global financial markets including the challenges for the Chinese authorities in managing the exchange rate in the face of depreciation pressure from private capital outflows. However, there was no evidence or speculation that these developments would pose substantial risks for Australia including funding costs for Australian banks which “had increased a little from their low levels recently”. As was the case with the Governor in his Parliamentary presentation, the minutes pointed out that the cost of new long term wholesale funding remained below the cost of maturing debt.
Conclusion
The minutes of course repeat the “soft easing bias” stance with the words “the outlook for continued low inflation may provide scope for easier monetary policy, should that be appropriate to lend further support to demand”.
Our reading of the minutes however suggest that at the moment the Board does not believe that further support will be necessary and it will take some months to determine whether that approach should change. Although we must be mindful of the risks of the feedback to the domestic economy of the current global financial turbulence we continue to maintain the view that rates will remain on hold in 2016.
Bill Evans is chief economist of <a href="https://www.westpac.com.au/" target="_blank">Westpac</a>.
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