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

Joel Robinson

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

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

Sammut secures approval for debut Brisbane apartment development in Toowong

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

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

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

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

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

WM Residences fills gap in Mordialloc townhouse market

Interest Rates

<html><body>
Growth in the global economy is continuing at a moderate pace.
China's growth has generally been in line with policymakers' objectives. While weakening property markets present a challenge in the near term, economic policies have been responding in a way that should support growth. The US economy continues to strengthen, but the euro area and Japan have both seen weakness recently. Some key commodity prices have declined significantly in recent months, reflecting somewhat softer demand and, more importantly, increased supply.
Global financial conditions remain very accommodative and long-term interest rates and risk spreads remain very low. Differences in monetary policies across the large jurisdictions are affecting markets, particularly exchange rates.
In Australia, most data are consistent with moderate growth in the economy. Resources sector investment spending is starting to decline significantly, while some other areas of private demand are seeing expansion, at varying rates. Public spending is scheduled to be subdued. Overall, the Bank still expects growth to be a little below trend for the next several quarters.
Inflation is running between 2 and 3 per cent, as expected, with recent data confirming subdued rises in labour costs. Although some forward indicators of employment have been firming this year, the unemployment rate has edged higher. The labour market has a degree of spare capacity and it will probably be some time yet before unemployment declines consistently. Hence, growth in wages is expected to remain relatively modest over the period ahead, which should keep inflation consistent with the target even with lower levels of the exchange rate.
Monetary policy remains accommodative. Interest rates are very low and have continued to edge lower over the past year or so as competition to lend has increased. Investors continue to look for higher returns in response to low rates on safe instruments. Credit growth is moderate overall, but with a further pick-up in recent months in lending to investors in housing assets. Dwelling prices have continued to rise.
The exchange rate has traded at lower levels recently, in large part reflecting the strengthening US dollar. But the Australian dollar remains above most estimates of its fundamental value, particularly given the significant declines in key commodity prices in recent months. A lower exchange rate is likely to be needed to achieve balanced growth in the economy.
Looking ahead, continued accommodative monetary policy should provide support to demand and help growth to strengthen over time. Inflation is expected to be consistent with the 2–3 per cent target over the next two years.
In the Board's judgement, monetary policy is appropriately configured to foster sustainable growth in demand and inflation outcomes consistent with the target. On present indications, the most prudent course is likely to be a period of stability in interest rates.
</body></html>

po-LsXgBTHBmX

Further pick up in investment lending noted: RBA Governor Glenn Stevens

<html><body>
Deutsche Bank economists have tipped the RBA will cut rates by half a percentage point in 2015.
The cuts would take the cash rate from current historic lows to 2%.
The Deutsche Bank economists previously forecast rates steady until at least mid-2016. 
They forecast the first rate cut late in the June 2015 quarter and then again late in the September quarter, or early in the next quarter.
Higher unemployment prompted the Deutsche Bank forecast given they expect unemployment to peak at around 6.75% in 2015, up from 6.2% now, levels that would “ordinarily be consistent with interest rate reductions”.
“What has prevented us, until now, from actually forecasting rate cuts has been the strength in the housing market – in particular house price growth and the degree of investor activity,” the report said.
The recent “nascent signs” of easing in housing market price growth and prospect of regulatory measures to improve the quality of lending should ease the RBA's concerns, they added.
“As always, there are risks to any economist’s view,” they reported.
“In this case the key risks would appear to be a stronger labour market that we expect, or an absence of moderation in parts of the housing market. Obviously, a much weaker AUD could also, in the absence of further declines in the terms of trade, negate the need for rate cuts.”
The DB chief economist Adam Boyton believes the strength in the housing market that has been supporting the economy is easing.
"When we combine that with our expectations for the unemployment rate - which is that it will rise all the way through next year - all that suggests to us that there is scope for the RBA to cut rates further," he <a href="https://www.propertyobserver.com.au/https://www.abc.net.au/news/2014-12-02/rates-set-to-equal-longest-period-of-stability-since-mid-1990s/5933350" target="_blank">told ABC News</a>.
But both the RBA and APRA will want to see more house price data before they are satisfied that house price growth has slowed to a more sustainable pace, Phil O’Donaghoe, at Deutsche Bank, told The Wall Street Journal.
</body></html>

jchancellor-FAypfDUnLy

Deutsche Bank tips two rate cuts in 2015 as house price growth eases

<html><body>
Australia's close links to Asia, the fastest growing part of the world economy, was reason to be confident of the economy's future strengths, according to Philip Lowe, Deputy Governor of the Reserve Bank of Australia.
He noted exports to Asia are up by around 30% over the past five years in his address to the recent Australian Business Economists' annual dinner.
Speaking on factors affecting the national psyche and weigh on the national economic mood, Lowe stressed the Australian economy does have the foundations for a successful and prosperous future.
"How well we take advantage of those foundations depends increasingly on investment not in physical capital, but in human capital."
"I sense a degree of nervousness about our future among some commentators who sometimes ask: what happens to Australia after this mining boom is over?; how can Australian businesses compete internationally given our high costs?; and, where will the jobs come from in the future?
"These are all good questions," he said adding uncertainty was normal. 
"Given this, it is important that we guard against the possibility that this uncertainty mutates into chronic pessimism – that is, for it to become normal for us to think that our prospects are limited.
"If this were to become our normal mindset, then we would be well on the way to finding ourselves in the very world that we feared.
"We certainly have a number of strong foundations that provide the basis for this optimism. The question is how well we can use those foundations over the years ahead," adding he wanted to focus on the people-to-people relationship.
"Currently, around 8% of the Australian population was born in east and south-east Asia or India (Graph 1 below).
"This is up from less than 1% of the population around the time that I was born.
"In comparison, in the United States, only around 3½% of the population was born in Asia and for most European countries the figure is below 2%."
Graph 1
<a href="https://www.rba.gov.au/speeches/2014/images/sp-dg-251114-graph1.gif" target="_blank" title="Link, opening in a new window, to larger image."><img src="https://www.rba.gov.au/speeches/2014/images/sp-dg-251114-graph1-small.gif" alt="Graph 1: Population Born in Asia" title="Graph 1: Population Born in Asia" width="373" height="322"></a>  <a class="displayNone" href="https://www.rba.gov.au/speeches/2014/images/sp-dg-251114-graph1.gif" target="_blank" title="Link, opening in a new window, to larger image.">Click to view larger</a>
"There are also large numbers of students from Asia studying in Australia," Lowe said.
"Currently there are around 150,000 Chinese student enrolments at Australian educational institutions, more than double the number a decade ago (Graph 2 below).
"There are also large numbers of students from India, South Korea, Malaysia, Thailand, Vietnam and Singapore.
"All up, there are more than a quarter of a million Asian students studying here.
"In time, these students will add to the already vast network of our alumni across the region."
Graph 2
<a href="https://www.rba.gov.au/speeches/2014/images/sp-dg-251114-graph2.gif" target="_blank" title="Link, opening in a new window, to larger image."><img src="https://www.rba.gov.au/speeches/2014/images/sp-dg-251114-graph2-small.gif" alt="Graph 2: Chinese Student Enrolments" title="Graph 2: Chinese Student Enrolments" width="373" height="311"></a>  <a class="displayNone" href="https://www.rba.gov.au/speeches/2014/images/sp-dg-251114-graph2.gif" target="_blank" title="Link, opening in a new window, to larger image.">Click to view larger</a>
"The strong people-to-people linkages can also be seen in the broader data on international short-term arrivals (Graph 3 below)," he noted.
"At the moment, more than 250,000 citizens from Asia are travelling to Australia every month, with arrivals from China reaching nearly 80,000 a month.
"As is evident from the graph, these figures have grown very strongly over recent years.
"There has, of course, also been very strong growth in the number of Australians travelling to Asia for both business and leisure."
Graph 3
<a href="https://www.rba.gov.au/speeches/2014/images/sp-dg-251114-graph3.gif" target="_blank" title="Link, opening in a new window, to larger image."><img src="https://www.rba.gov.au/speeches/2014/images/sp-dg-251114-graph3-small.gif" alt="Graph 3: Short-term Overseas Arrivals to Australia" title="Graph 3: Short-term Overseas Arrivals to Australia" width="374" height="288"></a>  <a class="displayNone" href="https://www.rba.gov.au/speeches/2014/images/sp-dg-251114-graph3.gif" target="_blank" title="Link, opening in a new window, to larger image.">Click to view larger</a>
"Taken together, this deep and growing people-to-people engagement is an increasingly important national asset," he said.
"It helps us better understand the most dynamic part of the global economy.
"It promotes goodwill and can help identify cross-border business opportunities.
"Some of the students studying here will hopefully become ‘champions’ for our country when they return home.
"Others will remain here and use their knowledge and relationships in their country of birth to build new and stronger business ventures between our countries," he noted in the aim of achieving a highly productive, globally competitive economy that is operating close to, or at, full employment.
"Such an economy would be characterised by: a national currency with sustainably high purchasing power; sustainably high real wages; and sustainably high real returns on capital.
"High purchasing power and high wages mean that for each hour that we work we are able to buy more goods and services.
"And high returns mean that savers get rewarded when they take a risk or defer their spending and save for the future," Lowe noted.
</body></html>

Vast alumni across Asia is one of Australia's economic strengths: RBA

<html><body>
The proportion of interest only loans from banks hit 42.5% in the September 2014 quarter, up from 35% of investor loans early last year. APRA's quarterly data comes as the Reserve Bank of Australia warns lending practices such as interest only loans indicate risks to banks were increasing. But the data showed the second risk factor noted by the RBA - loans with loan to valuation ratios of more than 90% - may be easing. Loans of this type represented 12% of new business in September down from 15% in the early part of 2013.
The recent study by Reserve Bank of Australia researchers urges both lenders and regulators to be watchful before borrowers get into trouble.
The study looked at which home borrowers, and which types of home loan, ended up falling more than 90 days behind on payments.
The findings of the research were the views of its authors, Matthew Read, Chris Stewart and Gianni La Cava, rather than the official RBA view.
Its key findings:
<ul>
<li>The higher the loan is as a proportion of the property value when the loan is taken out, the greater the chance the borrower will fall behind.</li>
<li>
The probability of falling behind is particularly high for loans greater than 90% of the property valuation.
</li>
<li>The probability of a loan going into arrears is lower for loans that are repaid relatively quickly.</li>
<li>Low-documentation loans are more likely to go into arrears.</li>
<li>The higher the starting interest rate, the higher the chance the loans will go into arrears (probably because banks charge higher rates for borrowers they see as riskier, the authors say).</li>
<li>The probability of missing a mortgage payment is particularly high for households with relatively high repayments compared with their incomes.</li>
</ul>
</body></html>

Interest only loans soar as LVR concerns ease for RBA

<html><body>
While all 37 leading economists and experts surveyed by Finder ahead of today's Reserve Bank meeting expect the cash rate to stay on hold this afternoon, three experts are tipping another cut to occur next year.
Last month, the Finder Reserve Bank Survey saw Australian Property Monitors’ Andrew Wilson tip a rate cut for the future, and he is now joined by two other experts.
Market Economics’ Stephen Koukoulas, joining the panel for the first time, and David Scutt from Scutt Partners also expect a drop next year. This would bring the cash rate from the current low of 2.50% to a new record low.
However, they are vastly outnumbered by those tipping the next move to be up – 92% of the panel. In total, 94% of the panel expect the cash rate to move in 2015, while 6% expect the next move to in 2016.
<img src="/images/2014/12/02/finder-dec-2-one.jpg" alt="">
Source: Finder Reserve Bank Survey
Michelle Hutchison, Money Expert at finder.com.au, said that it was interesting to see some experts tip a cut.
“It was also interesting to find some experts in the survey discussing the reality of a rate cut next year, with factors that could occur such as a falling housing market and slower growth in China and other foreign economies,” she said.
“There is a definite shift in the direction that the cash rate could take, with last month’s survey results showing all 33 experts were forecasting the cash rate to rise next year, including one expert (Andrew Wilson, Domain Group) predicting a rate cut before an upward cycle begins,” said Hutchison.
“But now there are three experts on the panel who are betting on a rate cut and others citing a possibility of a drop.”
In terms of today’s meeting, Wilson notes that there will be no impact from any change until next year.
“House price growth will track around inflation depending on local demand and supply drivers,” he said.
Koukoulas noted that the RBA has been slow to acknowledge the subdued nature of the economy, with an “unhealthy obsession” with Sydney house prices.
Meanwhile, Scutt said that the Australian Dollar remains overvalued, labour market conditions are still soft and commodity export prices have declined with the economy expected to grow below trend until 2016.
“They should be easing now but won't, at least in December. With house price appreciation slowing and targeted macroprudential tools still a strong possibility, if current domestic and international economic conditions remain subdued, the RBA will have little to prevent them easing early in the New Year.”
</body></html>

jduke-EHk3XBmHkn

Three experts tip interest rates to fall further: Finder RBA survey

<html><body>
A significant increase in interest rates may see property prices enter a correction phase, according to Empower Wealth’s Ben Kingsley.
In <a href="https://www.lookatproperty.com.au/episode/3308/look-at-property/Is-there-a-Property-Bubble" target="_blank">a panel discussion on Look at Property</a> this week, Ben Kingsley and observer Catherine Cashmore discussed the current market cycle and when a downturn may be expected.
Both were in agreement that a rise in interest rates may be a signal for an impending correction.
“Right now, because interest rates are so low, affordability looks still great back to 2002, according to CBA data … When interest rates are low, it makes values look higher,” explained Kingsley.
“If interest rates start to actually increase significantly, we’ll probably see a correction of some description in the market place,” he said.
Cashmore looked towards the common cycles in housing markets to draw similar conclusion.
“Housing cycles are long-term affairs, so they typically run around 18 to 20 years and within that period they have a mid-cycle downturn, which usually happens around nine years after the low,” she said, pointing to Christopher Joye’s expectation of a mid-cycle downturn.
“You will probably see that happen as interest rates start to rise and you could see a correction in prices. It won’t effectively be a crash as such, we have longer to go,” she said.
Interest rates are expected to begin increasing next year, with the majority of experts in <a href="/expert-insights/finance/interest-rates-expected-to-rise-for-three-years-here-s-when-the-first-hike-will-be-finder">Finder’s Reserve Bank survey opting for this forecast</a>.
At present, June 2015 is the most common prediction for the first increase.
ANZ is on record <a href="/expert-insights/finance/more-than-one-interest-rate-rise-on-the-cards-for-2015-anz">predicting multiple interest rate increases across 2015</a>.
The Organisation for Economic Cooperation and Development (OECD) have also <a href="/expert-insights/finance/oecd-advises-rba-to-lift-interest-rates-and-cool-house-prices-in-2015">advised the Reserve Bank to lift interest rates </a>from the second quarter of 2015.
The move would prevent housing prices rising to risky levels and then unwinding sharply, say the OECD.
 
</body></html>

Property price correction will happen if RBA lifts interest rates: Ben Kingsley

<html><body>
The Organisation for Economic Cooperation and Development (OECD) has advised the Reserve Bank of Australia to lift interest rates in the first half of 2015.
It would prevent housing prices rising to risky levels and then unwinding sharply, say the OECD.
The OECD’s semi-annual economic outlook from the Paris-based agency forecasts the Australian economy to expand at a below average 2.5% next year and recommends the Reserve Bank begin lifting interest rates from the second quarter of 2015.
Noting the cash rate at an historic low of 2.5% since August 2013, the OECD suggested persistent low rates were causing a “search for return” among investors.
“This requires close oversight of asset-market developments, particularly rising housing credit, which is now being driven by investors,” the OECD said, according to a Fairfax Media report.
“Further prudential measures on mortgage lending should be considered as a targeted means to cool the market, thereby heading off risks to financial stability,” the OECD says.
The think tank said "the momentum in property prices is uncertain and could unwind sharply.” 
“Any economy faces the risk that debt build-ups particularly from real estate and problematic loan origination, will lead to financial accidents with the real economy,” said Catherine Mann, the OECD’s chief economist.
 
</body></html>

OECD advises RBA to lift interest rates and cool house prices in 2015

<html><body>
The Reserve Bank of Australia governor Glenn Stevens expects interest rates can remain low for some time yet, as long as housing market “pockets of potential over-exuberance” and "over excitement" remain in check.
The need for stronger growth outside the resources sector justified the present low interest rate settings, he said in a speech to the Committee for Economic Development in Melbourne last night.
“Inflation is well under control and is likely to remain so over the next couple of years,” he said.
“In such circumstances, monetary policy should be accommodative and, on present indications, is likely to be that way for some time yet.
“But for accommodative monetary policy to support the economy most effectively overall, it’s helpful if pockets of potential over-exuberance don’t get too carried away.”
The CommSec chief economist Craig James noted the Reserve Bank Governor delivered a powerful speech that could only be described as a “call for action”, targeted at the conservativeness of the business sector.
"It implores Australian business people to believe in themselves and take greater risks," James said.
"It was the type of speech that a coach delivers to his players.
"It is definitely a speech worth reading."
James further noted the Reserve Bank Governor attempts to set the record straight with his views on housing, pointing to three quotes within the speech
“Credit outstanding to households in total is rising at about 6–7% per year. I see no particular concern with that,” he said.
“It is not clear whether price increases will continue or abate. Furthermore, it is not to be assumed that investor activity is problematic, per se. A proportion of the investor transactions are financing additions to the stock of dwellings, which is helpful. It can also be observed that a bit more of the ‘animal spirits’ evident in the housing market would be welcome in some other sectors of the economy.”
“Nor, let me be clear, have we seen these dynamics, thus far, as an immediate threat to financial stability. The Bank's most recent Financial Stability Review made that clear. So we don't just assume that all this is a terrible problem.”
The Reserve Bank Governor does acknowledge that there are signs in the investor housing market where “some people might be starting to get just a little overexcited”. 
The Reserve Bank is working with other agencies on reviewing lending standards. But he makes clear the purpose of the review. 
“Let's be clear what this is not about," says Stevens.
"It is not an attempt to restrain construction activity. On the contrary, it is an attempt to stretch out the upswing.
"Nor is it a return to widespread attempts to restrict lending via direct controls.”
The Reserve Bank Governor makes it clear that rates aren’t set to rise to address the strong growth in investor housing lending.
“The economy has spare capacity. Inflation is well under control and is likely to remain so over the next couple of years," Stevens advised.
"In such circumstances, monetary policy should be accommodative and, on present indications, is likely to be that way for some time yet
"But for accommodative monetary policy to support the economy most effectively overall, it's helpful if pockets of potential over-exuberance don't get too carried away."
</body></html>

Interest rates can remain low if property over exuberance curtailed: RBA's Glenn Stevens

<html><body>
The Reserve Banks’s (RBA) decision to keep interest rates on hold earlier this week came as no great surprise.
Of the 33 economists <a href="/expert-insights/finance/rates-tipped-to-start-rising-in-2015-but-how-long-will-the-cycle-continue">surveyed by Finder</a> prior to the meeting, 91% expect rises in 2015, while two tipped 2016 as the earliest date for an increase.
But the lack of interest rate movement, the Bank has now left interest rates on hold for 16 consecutive months, has one property expert scratching his head.
Buyer’s agent and founder of Dream Design Property, Zaki Ameer, says that the RBA’s usual reaction to increasing house prices and unemployment is to raise interest rates.
“However, interest rates have remained unchanged for two years now, and in my opinion, that's because there is still some local uncertainty within our economy, which may be caused by local involvement in international terrorism,” Ameer said.
Ameer said that due to unrest in the Middle East and Ukraine, the RBA is unsure whether they should raise interest rates since, he believes, they are uncertain what is driving current economic conditions.
Eventually, it could be a global event that forces the RBA to act, Ameer told Property Observer.
Despite the continual presence of ominous global threats, Ameer believes that low interest rates are creating a fantastic environment in which to invest.
“Aside from the obvious benefits, which is low interest repayments for those who have fixed, what many people do not realise is that when the Reserve Bank does increase its interest rates, rent prices usually increase too, and this then creates more cash flow for investors,” he said.
</body></html>

owisniewski-RiYLqnXfKH

Global events may be shaping RBA's interest rate decisions: Buyer's agent

<html><body>
For those who don't have time to read Governor Glenn Stevens' full November statement or trawl through the latest figures from the Australian Bureau of Statistics, the Reserve Bank (RBA) has tweeted a visual update on Australia's economy.
<a href="https://www.propertyobserver.com.au/https://twitter.com/RBAInfo/status/529835809172492289" target="_blank"><img src="/images/2014/11/06/tweet-nov-6-one.jpg" alt=""></a>
The infographic also serves as a handy reminder of what the Reserve Bank takes into account when deciding the overnight cash rate, which this month remained at 2.5%.
At 2.3%, inflation continues to stay within the RBA's 2-3% target band, while it keeps an eye on the value of <a href="/expert-insights/investing/how-does-the-aussie-dollar-affect-commercial-property">the Australian dollar</a>.
With the average home now valued at $555,000, the RBA continues to flag increasing <a href="/expert-insights/finance/dwelling-prices-continue-to-climb-governor-glenn-stevens-november-statement">dwelling prices</a>.
</body></html>

Interest Rates

Editor's Picks

Have something to contribute?

Developments

New apartments

New townhouses

News

Interest Rates

Editor's Picks

Receive the latest news stories to your inbox

Have something to contribute?

Developments

New apartments

New townhouses

News