<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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When interest rates are decreasing, property owners paying variable rates are among those who begin to feel a little bit more relaxed about their repayments.
However, the verdict from most economists is that the <a href="/expert-insights/finance/borrowers-warned-of-interest-rate-hikes-by-late-2014">next interest rate movement will be an increase from today’s record lows</a>. While it’s not time to panic quite yet – the general consensus is also that we will have a period of stability – it’s certainly time to put into place some measures if you haven’t thought about the impact of an interest rate increase.
In fact, ME Bank’s latest Household Financial Comfort Report, which noted that a “wait and see” approach is indeed likely from the Reserve Bank, saw 19% of people note that they had not budgeted for any rate increase.
ME Bank’s general manager for asset products Luke Easton told Property Observer that awareness of potential changes is crucial, and then those with mortgages must be allowing for changes.
So, what can you do?
Fixing your home loan
The first thing that jumps to everyone’s minds is fixing your loan while rates are low. While this may be a good solution for some, it can leave you locked in and unable to be as flexible as you may need with your loan.
Easton suggests that splitting your loan into part-fixed and part-variable might actually be a better plan. However, he notes: “Everyone is different. People should be doing what suits their own situation.”
This is good advice – not every investor and home owner will want to fix. While a fixed rate will ensure you have a low rate for a period of time, and regular repayments, it does tend to be higher than the variable rates you can currently achieve. If rates did fall further, you’d be left paying more.
Break costs, such as early repayment penalties, may come into play if you aren’t completely aware of what you’re signing up for with a fixed rate loan.
USEFUL READING: <a href="/expert-insights/finance/analysis-is-it-worth-fixing-your-home-loan">Analysis: Is it worth fixing your home loan?</a>
Creating a buffer
Paying off more now, while you have the opportunity, is a great way to give yourself some breathing space for if rates do suddenly increase, said Easton.
If you put in some extra, then if you suddenly struggle to keep up you will have some space on the other end. Those who pay off the minimum are not necessarily putting themselves in the best situation.
Recently, Smartline suggested that <a href="/expert-insights/finance/now-is-the-time-to-aggressively-make-mortgage-repayments-smartline">now is the best environment in which to be aggressively making mortgage repayments</a> as reduced interest expenses mean you can pay off your principal quickly.
Practice repaying at a higher rate
Consider what might happen to your loan if the interest rate increased. Look to be putting this amount in for each repayment and see how you manage. If you’re struggling, then you need to be looking to solutions quickly – sometimes a visit to your lender, or a financial planner, can assist.
There are also other features you can consider to help you with your home loan – such as offset accounts. There’s an <a href="/expert-insights/finance/how-to-turn-bad-debt-into-good">interesting explanation here as to how offset accounts can be beneficial</a>.
If you’re looking to get a home loan today, then make sure you factor these aspects in to your own personal exploration around what you can afford. At the end of the day, there’s <a href="/expert-insights/finance/theres-more-to-home-loans-than-interest-rates">more to your mortgage than the interest rate</a>.
Timeless mortgage information:
<a href="/expert-insights/finance/10-tips-to-paying-off-your-home-loan-quicker">10 tips for paying off your mortgage quicker</a>
<a href="/expert-insights/finance/using-comparison-websites-to-find-the-lowest-interest-rates">Using comparison websites to find the lowest interest rates</a>
<a href="/expert-insights/one-in-10-happy-to-borrow-close-to-100-loan-market">One in 10 happy to borrow close to 100%</a>: Loan Market
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jduke-EHk3XBmHkn

How to: Prepare for an interest rate increase

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The country’s housing market remains a source of economic strength, according to the Reserve Bank of Australia’s (RBA) May board meeting minutes.
Indicating strong growth in housing investment in the first half of 2014, dwelling approvals and commencements remain at high levels despite a recent decline. The RBA noted that housing price inflation had eased in past months from its recent “rapid pace”, citing softening auction clearance rates and stabilising housing loan approval numbers.
Demand for both established and new housing remains strong according to other indicators, including turnover, first home owner grants and loan approvals.
The board noted a lower than expected inflation outcome for the March quarter. This followed on from a “surprisingly high” quarterly inflation figure for December of 0.8%. Underlying inflation in the March quarter was around 2.5-2.75% in year-end terms. The board's forecast for underlying inflation remained consistent.
According to the RBA, the price increase for tradable goods was consistent with the depreciation of the exchange rate over the past year. Price inflation for non-tradables had softened to 3% in year-ended terms, markedly down from the 4% average of the past decade. The board cited declining wage growth over the preceding two years as a key factor in the decline.
Following late 2013’s pick-up in economic activity, indicators for labour market conditions showed some improvement. The unemployment rate was down for March, though it is unclear whether this is due to monthly volatility. However the board also noted strengthening employment growth and an apparently stabilising participation rate over the past few months.
Driven by strong export growth, economic activity increased over the previous six months. Economic growth is unlikely to continue at the same pace over the next few quarters, given that export growth is not expected to remain at the same high levels.
Growth in retail sales seems to have stabilised following strong increases at the beginning of the year. Household consumption remains supported by low interest rates and rising housing prices, with consumer sentiment staying around long-run average levels.
According to a number of surveys, business sentiment remains at average levels after climbing from mid-2013 lows. The board noted that business investment in construction could pick up, despite declines in non-residential building approvals in recent months.
Gross Domestic Product (GDP) growth over 2014-2015 is expected to be slightly below trend, given the decline in mining investment and planned budgetary tightening. However, economic growth is expected to “pick up to an above-trend pace” in 2015-16 due to the contributions of non-mining business investment and liquefied natural gas exports.
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jrichardson-uRX5hFdKfN

RBA notes strong housing market in May board minutes

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Yesterday’s decision at the monthly Reserve Bank of Australia meeting to keep interest rates on hold was unsurprising. However, the response to this period of stability, with a focus largely on next week's budget announcements, has been fascinating.
Housing Industry Association economist, Geordan Murray, said that recent commentary from RBA officials had everyone expecting the no-change result of yesterday, however said that the statement suggests the board’s confidence has been buoyed by positive developments in the household sector. This was, as <a href="/expert-insights/finance/strong-expansion-in-housing-construction-expected-rba-governor-glenn-stevens">you can read in Glenn Stevens’ speech yesterday</a>, largely related to strong leading indicators for residential construction.
Murray noted that it’s the strength of the labour market that is now at the forefront of the Board’s concerns “although the statement belies a confidence that the accommodative monetary policy settings will enable conditions to improve within the foreseeable future”.
Similarly, the strength of the Australian currency struck Murray as something the Board is watching closely, however there is “no sense of urgency” as it sits a level lower than a year ago.
Mortgage Choice spokesperson Jessica Darnbrough explained that inflation is sitting comfortably within the target range, with positive employment data and property prices now climbing modestly.
However, despite this, it appears some are more concerned about increases in the near future than others – while most are now turning their attention to the budget.
“There is no doubt rates will climb eventually, but right now they are sitting at historically low levels. So for those potential borrowers who have the means to get onto the property ladder, now may be a good time to do so,” she said.
CEO of RateCity, Alex Parsons, said that consumers should not be complacent in today’s low-rate environment.
“We're at record low interest rates so over time they are only likely to go up so make sure you can afford to withstand some increases in interest rates,” Parsons explained.
“The second thing is we've heard a lot from the government in the recent few weeks around the prudent budget and so that is going to hit people in the back pocket I would suspect,” he said.
REINSW president Malcolm Gunning also said that it’s the budget that has the attention.
“We are not surprised by the RBA's choice to leave interest rates in a holding pattern. All eyes are now on the federal budget, which could have wide implications for Australians and the future direction of interest rates,” he said.
“While the housing market remains firm, we watch with interest the delivery of the budget, the high Australian dollar and rising unemployment levels which could negatively influence consumer confidence,” Gunning explained.
While Laing+Simmons’ general manager Leanne Pilkington also said that we should now be looking more closely at the changes to be made next week, with the finer details of foreshadowed changes to taxation to be identified.
“While many young people struggle to build a suitable deposit, many existing mortgage holders are struggling to meet repayments, and pensioners have also been put on alert,” warned Pilkington.
“There is general acknowledgment that next week's budget must be tough, however it is important that Government supports those already in a precarious financial position,” she said.
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RBA holds rates as expected, but federal budget the focus of the month

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The Reserve Bank has kept the cash rate at a record low of 2.5% for another month. 
Today’s decision marks another month of historic lows for Australia’s interest rates, while many speculate that the Reserve Bank will move to increase rates by the end of the year as price growth stabilises and housing construction expands.
Reserve Bank governer <a href="/expert-insights/finance/strong-expansion-in-housing-construction-expected-rba-governor-glenn-stevens">Glenn Stevens said of today's decision</a>, "financial conditions overall remain very accommodative. Long-term interest rates and most risk spreads remain low. Equity and credit markets are well placed to provide adequate funding."
"In Australia, the economy grew at a below-trend pace in 2013. Recent information suggests moderate growth is occurring in consumer demand and foreshadows a strong expansion in housing construction. Some indicators of business conditions and confidence have improved from a year ago and exports are rising. But at the same time, resources sector investment spending is set to decline significantly and, at this stage, signs of improvement in investment intentions in other sectors are only tentative, as firms wait for more evidence of improved conditions before committing to expansion plans. Public spending is scheduled to be subdued," he said.
Australians can expect interest rate stability in the current inflationary climate.
"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," said Stevens.
"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." 
Michelle Hutchinson, money expert at comparison website finder.com.au, says that a drop in the cash rate is unlikely in the near future.
"While the <a href="https://finder.com.au">finder.com.au</a> Monthly Reserve Bank Survey found all 12 leading economists and money experts were correct with their prediction of no rate change today, most are expecting to see the cash rate rise by the end of the year or next year,” she said. According to Hutchinson, the current interest rate climate has seen some lenders fail to pass on rate cuts to borrowers.
"With no more rate drops on the cards, we found that lenders have kept on average 0.24 percentage points since rates began to fall in November 2011 by not always passing on the full cuts to their customers,” said Hutchinson.
LJ Hooker deputy chairman L Janusz Hooker predicts that a rate increase by the Reserve Bank could be as far away as December.
“There is still a chronic shortage of housing in areas such as Sydney and with this simple supply and demand imbalance continuing, it’s hard to see how the bottom can drop out of the market,” said Hooker.
Low interest rates have seen housing construction approvals pick up in many markets, while residential sales are strengthening in Hobart and even Adelaide, despite concerns about unemployment.
“Sensible buyers are factoring in future rate increases when doing their calculations but I also think there is an acceptance that the rate of growth the market has been enjoying will slow down,” he said.
According to RP Data national research director Tim Lawless, the latest housing market results showed that capital gains across the nation’s housing markets were slowing to more sustainable levels, which would have provided the RBA with some comfort.
“The April results showed a slowdown in dwelling value appreciation, up just 0.3% over the month, which is likely to be a welcome result after such previously strong conditions,” said Lawless.
“The ongoing low interest rate environment is likely to encourage higher levels of housing market activity which provides a fantastic multiplier for the Australian economy; however we anticipate that natural affordability barriers and low rental yields will continue to dampen the exuberance that has been very much evident in Sydney and Melbourne,” he said.
<img src="/images/2014/05/06/quotes-may-6-on.jpg" alt="">
 Source: Finder.com.au
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RBA leaves interest rates on hold as housing price growth slows

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Many economists are tipping the official cash interest rate will stay on hold for several months to come.
Financial market indicators also suggest there are strong expectations of interest rate stability, with a small chance of further cuts.
As late as Thursday 1 May, just days before the latest RBA cash rate announcement, the ASX 30 Day Interbank Cash Rate Futures May 2014 contract (which shows market expectations of an RBA interest rate change) was trading at 97.505. That indicates financial market participants thought there was a 98% chance that interest rates would be left on hold and a 2% chance of a cut to 2.25% at today’s RBA Board meeting.
For mortgage holders, low interest rates are providing opportunities to save considerable sums on their home loans.
Several lenders have cut mortgage rates since the start of this year, while the RBA has left the cash rate untouched at 2.5% since August 2013.
At least seven lenders have cut mortgage rates on their variable loans, according to Finder.com.au. The comparison website found Yellow Brick Road, ANZ, Bank of Queensland, Citibank, Homeloans, HSBC and Westpac had all cut their variable rates since January 1. At the end of April, <a href="https://loans.com.au/">Loans.com.au</a> was advertising an ongoing variable rate of just 4.49% on its Dream Home Loan, Finder.com.au reported.
However, <a href="https://finder.com.au/" target="_blank">Finder.com.au</a> money expert Michelle Hutchison says three-year fixed rates are still lower on average than variable rate home loans.
The RBA’s indicator rate for a three-year fixed rate mortgage dropped to 5.2% in March from 5.25% in February, the latest RBA statistics show. The average three-year rate available to consumers is a little lower, at 5.11%, according to Finder.com.au.
History shows lenders typically pre-empt movements in the official cash rate with their fixed rate home loans, so by the time the RBA starts lifting rates, the fixed mortgage rates available to borrowers have already reached their bottom and started to trend higher (See chart).
<img src="/images/2014/05/02/zoe-may-2-one.jpg" alt=""> 
Source: RBA
“If you're worried about interest rates rising in the next few years it might be time to consider locking in a fixed rate,” Hutchison says.
Property Observer asked Finder.com.au to crunch the numbers on the cost over the next four years of taking out a fixed rate home loan now, compared with taking out a variable rate loan.
"The average three-year fixed rate is 5.11% while the average variable rate is 5.39%,” Hutchison says. “If variable interest rates increased back to normal levels of around 7% in four years, borrowers could be better off fixing.”
For this example, we assumed that the average variable interest rate available to consumers of 5.39% would remain in place for 12 months. After that time frame, we assumed interest rates would rise by 0.25 basis points every six months for remaining three years.
We compared that variable rate loan to a mortgage with the average three-year fixed rate of 5.11%. At the end of the three years, we assumed the interest rate for the fixed rate mortgage would revert to the same variable rate as the variable loan in the example: so 6.64% after three years, and then lifting to 6.89% for the last six months of the four year period.
Both sets of figures were calculated based on a loan with an initial size of $300,000.
Results
According to Finder.com.au’s sums, the total cost over four years of the variable loan above was $93,246.
The total cost for the three-year fixed loan, reverting to the average variable loan rate at the end of the fixed period, was $88,732.
In this example, the three-year fixed rate loan would cost $4,514 less than the variable rate loan.
Of course, the results will vary if these assumptions on interest rate movements are off the mark.
Plus, there are other considerations when deciding between a fixed and variable rate mortgage, such as the flexibility to make additional repayments with the view of paying off the loan more quickly, which is usually only possible with a variable rate loan.
We’ve also excluded the affect of fees, and have ignored any other features that might be available with one loan but not the other.
In general, if it’s cost alone that you’re looking at, fixing the rate might still make sense. 
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Analysis: Is it worth fixing your home loan?

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Dwelling price-to-income ratio charts in Australia and in certain other developed countries have shown a dramatic run-up which have benefited existing owners tremendously, particularly over the past couple of decades.
<div class="separator"><a href="https://3.bp.blogspot.com/-scVICW5CkIU/U2CL5ASxdmI/AAAAAAAAM2o/HQWNaynN8jg/s1600/Dereg.jpg"><img src="https://3.bp.blogspot.com/-scVICW5CkIU/U2CL5ASxdmI/AAAAAAAAM2o/HQWNaynN8jg/s1600/Dereg.jpg" width="400" height="316"></a></div>
Most of the causes are obvious enough and have been well documented: there are now many more dual income households than there were previously, there has been and remains an ongoing colossal boom in Australia's population, there has been a structural shift to much lower inflation and interest rates, and so on.
Ultimately, though, all this new debt had to come from somewhere, so how on earth did that happen? The quick and dirty answer lies in the deregulation of the Aussie financial system which took place in the 1980s, a process often alluded to, but less often explained. A quick look at eight key points... 
Regulation
During the 1980s Australian banking went relatively quickly from being one of the most stringently controlled systems in the world to one of the least controlled, as part of a wider movement which was to some extent reflected in other countries.
Crucially, Australia had previously employed very strict controls on its bank borrowing and lending practices, with few available substitutes to the traditional banks.
Normally such sweeping  industry changes as occurred in that decade would be a pain-inducing and drawn-out exercise, but deregulation was especially swift and effective Down Under because it met with so little resistance from the banks themselves.
This was because the banks saw that although they may have previously benefited from the controls as they carved up housing market loans, they would now stand to benefit more from deregulation since it would allow them to compete more readily with the non-financial institutions.
With the rise of technology and electronic banking, the banks also knew that they had to become more flexible to compete with the non-banks.
The challenges with the pre-existing controls
One of the problems facing the banks was that with there being a ceiling imposed on interest rates they could lend at and on term deposits, in times of high inflation it was exceptionally difficult for them to tempt customers to deposit funds with them (and further, banks offered zero percent interest on current accounts, largely as part of an informal or unspoken cartel agreement between themselves).
With a below market ceiling on lending rates imposed upon the banks, there was in any case little willingness or indeed capability to offer more appealing interest rates on term deposits.
Meanwhile, non-bank financial intermediaries such as building societies began to offer more tempting and competitive deposit rates, which in turn facilitated the ability to lend more. With deregulation, there came too an increase in the velocity of the circulation of funds, which in turn led to an increased focus on the control of monetary aggregates by the central bank.
Government controls over housing finance changed
In the 1980s there was an imposed ceiling on lending rates for housing but this was changed in 1986. From April 1986, while a ceiling remained in place for pre-existing loans (the interest rate cap was set at 13.5% at that time, for the record), new loans written had no such ceiling. 
Since new loans were written at about the same level for some time thereafter, there was initially little effect, but eventually the removal of controls did have an impact.
The traditional distinction between savings banks and trading banks was removed in 1989 and prior to that, in the mid 1980s, 15 foreign banks were given licences to operate in the Australian market. The major change in market was that a number of building societies and credit unions converted to banks.
Becoming a bank allowed these institutions a much greater capacity to expand their capital base, and from the early 1990s forth, a number of factors contributed to the banking system shifting its focus from lending to business towards housing.
Summarily, a lot of bank loans to businesses became impaired during the 1990s recession, so lending for housing got the green light. With <a href="https://www.rba.gov.au/speeches/2010/sp-ag-300310" target="_blank">reduced assets ratios</a> also now required by the banks, it was time for the banks to get lending on homes...and how.
<div><img src="https://www.rba.gov.au/speeches/2010/images/sp-ag-300310-graph1-small.gif" alt="Graph 1: AFI Housing Credit"></div>
Between 1991 and 1995 the share of banks' business loans fell from 63% to 48%, but the share of loans for housing soared from 30% to 46%. Lower inflation, falling interest rates and the strong performance of housing loans saw the percentage of housing loans roar up to nearly 60% by 2010.
Why bother control housing finance at all?
Why would a government even have tried to control housing finance rates in the first place? It's a very valid question!
There is no strong economic argument in favour of such a strategy, but the basic idea I suppose to was to incentivise folk to divert more of there resources towards housing than they may otherwise have been inclined to do.
Personally, I generally prefer free markets all things being equal, but I guess at least part of the underlying notion was that if people invested more heavily in housing, them in turn the housing stock would be of better quality. 
As someone born in a city with some of the worst housing developments imaginable, I can see there is some logic buried deep in there somewhere - slums and infested housing estates can create far deeper social problems than just unsightly dwellings, but what about...
Market distortions?
However, the flaws in the logic of the borrowing rate cap were equally apparent. The government was encouraging people to allocate increasingly disproportionate amounts of their resources towards housing, pushing up prices, squeezing out lower income earners, and so on.
A far better idea, one would have thought, would have been a form of subsidies for the construction of dwellings and for those who rented them - not only a clear benefit for those able to purchase dwellings through borrowing (even cash buyers were excluded from this benefit).
A ceiling or cap on housing finance interest rates generally benefits higher salary earners with clean credit histories and the ability to save deposits, with no such benefit to lower income earners who could only afford to rent. And let's face it, if a bank is forced to lend at a capped interest rate, it's going to do so preferentially to persons with a higher salary and a bigger deposit.
Combining a ceiling on housing loans with a ceiling on deposit rates (which themselves were effectively anyway capped by the below market rates accrued from housing loans) tends to hit up lower income earners with a double whammy: paying them crappy rates of interest on their savings (on average most lower income earners hold a higher percentage of their net worth in savings) and squeezing them out of the housing market.
This leads on to a whole other debate about the most appropriate form of housing subsidies for lower income groups...but that's one for another day.
Impacts of the 1986 deregulation
So in 1986 the control over interest rates was removed for new loans, but the cap remained in place for existing loans. The impact of this was a tad confusing!
Older borrowers now benefited from lower rates since they had arranged loans before 1986, although on average the older they were the lower the outstanding mortgage balance, so perhaps you could argue the outcomes of that came out in the wash a little.
And the deregulation also distorted the market in another way, making the labour market more immobile. There was very little incentive for existing owners to move to a location which might be more convenient for employment, since they would lose their entitlement to an interest rate cap upon inception of any new housing loan.
Other encouragement for housing finance
Therefore, as banks became able to offer more competitive rates on deposits, in turn this allowed them to increase their loan books.
It was expected that there would be another change from deregulation: stability. Why? Because before deregulation, when interest rates were rising banks became less competitive on deposit rates thus throttling their lending capability, yet when rates were falling exactly the opposite was true.
But what actually happened was that this great uncertainty for banks was removed by deregulation, giving them far greater control over their level of competitiveness on deposit rates in order to attract business, and thus this made them equivalently far readier to provide housing finance. 
Indeed, you could argue that it now became a race to allocate as much of the new lending as possible to the housing markets.
Product innovation
Another enduring impact of deregulation was that new products sprang up all over the shop such as variable repayment loans or so-called "low-start" mortgages. Banks became more inclined to focus on the ability of borrowers to repay monthly payments rather than capping loans at a low multiple.
There was  product innovation aplenty in the Aussie mortgage market as lenders sought to cater for a wider range of potential borrowers and found new ways to assess their borrowing capacity - an easing in lending standards played its part of course, increasing loan risk, but the over-arching effect was that households had wider access to credit.
With no ceiling on lending rates, banks were now able to charge higher spreads and require bigger deposits on riskier loans, so in due course became more inclined to take them on.
And then of course lenders introduced what the Americans called HELOCS - home-equity loans,as well as redraw facilities and reverse mortgages, all of which allowed households to borrow against the equity they had built up in their place of residence. Lenders also introduced interest-only loans and shared-equity loans which made it easier for households, particularly first home buyers to purchase their home. When interest rates fell, the net result was a borrowing bonanza, and not only in Australia.
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Interest rates are now more important
Pundits like to argue that in theory interest rates have little impact on housing markets, but due to the deregulation of the Aussie financial system and higher household debt today, this is incorrect, as partly evidenced by the impact of rate cuts since 2010.
What is explained above should clarify why shifts in interest rates were formerly somewhat limited in their ability to impact housing markets - since both lending and deposit rates were strictly controlled - yet today the availability and expectations around the cost of capital can be a key driver of market sentiment.
Moreover, since household debt levels are so much more elevated today than they were in the 1970s, the scope for monetary policy and adjustments in interest rates to stimulate or clobber housing markets - and indeed other parts of the Aussie economy - is greater than it was before.
Conclusion
This is all worth remembering when the next round of chart packs rolls around dating back to the mid-1800s which apparently prove that dwelling price multiples will inevitably revert to a long-term median.
They prove nothing of the sort, since credit markets have evolved beyond all recognition in the last 30 years. Unless, that is, you are expecting banks willingly to slice their percentage of lending for housing in half back to less than a third their loan books.
It strikes me that if you want to see house prices back at the oft-quoted "three times incomes", you'd need some kind of trigger. One such trigger could be a severe recession with very high unemployment.
It's simply way too easy for employed, dual-income couples in the current environment to service mortgage repayments with rock bottom borrowing rates. If you really want to see a downward reversion in dwelling prices, then we need to see higher interest rates which would quickly remove the speculative heat from the market.
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You can visit <a href="https://allenwargent.com/" target="_blank" rel="nofollow">AllenWargent</a> property buyers (London, Sydney) or Pete's <a href="https://petewargent.blogspot.com/" target="_blank" rel="nofollow">blog</a>.
His new book '<a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx" target="_blank" rel="nofollow">Four Green Houses and a Red Hotel</a>' is out now.
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Interest rates are more important than they have ever been

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The Reserve Bank will meet again next week to determine whether they will move the interest rate, and with discussions that the next move will be an increase it appears fixing is back in favour, according to Mortgage Choice spokesperson Jessica Darnbrough.
Mortgage Choice's latest home loan approval figures saw fixed rate mortgages totalling 26.49% of all mortgages written through April. This was an increase, albeit modest, on March.
"Last month, fixed rates accounted for 24.22% of all mortgages written," said Darnbrough.
"This month, fixed rate demand swung back towards near record highs as more borrowers opted for this type of mortgage product."
Demand for these mortgages increased in every state across Australia, apart from Queensland and South Australia, while New South Wales recorded the strongest demand for this product, at 33.6%.
"While variable rates continue to prove more popular with borrowers, we are starting to see fixed rate demand head back to levels not seen since last year when all of the lenders were aggressively competing on price in the fixed rate arena," she said.
Ongoing discount rates continue to be the most popular product - accounting for 43.19% of all loans written, and up to 51.89% in Western Australia.
"Regardless of whether borrowers choose a fixed or variable rate mortgage, they will no doubt secure themselves a sharp rate. Interest rates continue to hover around record lows and lenders are still competing on price for market share. With that in mind, it is fair to say that potential borrowers who are keen to buy and have the ability to do so, now may be a good time for them to get onto the property ladder," she concluded.
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Fixed rates increase as speculation of rate rise continues: Mortgage Choice

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While seven lenders have dropped 20 variable home loans by up to 0.17% this year, according to Finder.com.au, their money expert Michelle Hutchison warns that they aren’t always all they’re cracked up to be. In fact, this discount could cost you more if you don’t look beyond the figure.
A discount can mean good things for those looking for a better deal, however Hutchison notes that borrowers could be missing out on thousands of dollars.
"It's extremely important for borrowers to compare home loan deals, read between the lines, and be wary of discounted home loan rates,” she notes.
"Some lenders, including the major banks, market their home loans based on a discount off their standard variable rate. But the rate you end up with could be much more than other home loans in the market.”
Yellow Brick Road executive chairman, Mark Bouris, said that shopping around is crucial as they might not be as attractive when looking beyond the rate.
“People visit their bank thinking their loyalty is going to get them the best home loan rate, or they're attracted to a special offer, oblivious to the fact that the discount rate might not be competitive in the long run,” he said.
Bouris has regularly <a href="/expert-insights/finance/look-beyond-the-discount-rate-to-find-the-true-cost-of-your-mortgage-mark-bouris">urged borrowers to look beyond the discount to find out what it will really cost them</a>. He noted that advertisers often just advertise the discount, rather than the actual interest rate itself, which can make people think they are getting a better deal than they are.
Always look at the true costs, and have all the numbers at hand before you make a decision.
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Investor warning: Look closely at discount interest rates before switching

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The RBA’s decision to leave interest rates on hold earlier this month is unlikely to have any negative effect on the property market. Interest rates have already fallen to a point where investors are being enticed to act and when investors come out so do the property marketers ready to sell.
But when you’re leafing through the glossy brochures and touring the display suites, remember that today’s financial benefits could be tomorrow’s financial headaches. These benefits are nothing new to the market as they are rolled out each time investors get active. Here are the most common ones to look out for:
Depreciation benefits
Buildings and their contents depreciate (decrease) in value, whilst land appreciates (increases). When you buy a new property, the tax office will enable you to defray part of the purchase price by allowing you to claim depreciation on certain items. This can be helpful in increasing your cash flow, particularly during the early years when the property is likely to be negatively geared.
However, the downside is that most of the depreciation you can claim comes from fittings and fixtures like the oven, air conditioner, blinds and carpets, which fully depreciate in five to 10 years. Furthermore, depending on the way you calculate your depreciation allowance, the amount you can claim may decrease each year. This means it will cost you more to hold the property as each year goes by.
Claiming depreciation can also have a hidden tax consequence because it will also increase the amount of capital gains tax you pay when you sell. I’m not saying you shouldn’t claim depreciation – but you should be aware that it may have financial consequences later down the track.
Stamp duty savings 
When you buy property off the plan in Victoria, you will only be liable to pay stamp duty on the property’s value on the date of purchase. If construction is partially completed, you’ll only pay stamp duty on that portion of the building, plus the land value. If construction hasn’t begun, you’ll only pay stamp duty on the land value.
<blockquote>
Don’t let short-term benefits hold too much sway when you’re choosing an investment property.
</blockquote>
Whilst this can help considerably when you first buy a property, it’s only a one-off saving that won’t help you after the loan has settled and you have to make repayments. What’s more, when you come to sell the property, potential buyers won’t have the same benefit of a stamp duty reduction, so there’s less incentive for them to buy it.
Rental guarantees 
When you buy a property brand new or off the plan, the developer will often undertake to provide a guaranteed level of rent each week for the first year or two that you hold the property. This kind of guarantee generally applies even when the property isn’t tenanted, because the developer picks up the tab.
Although it is reassuring to have certainty of rental income during the early stages of holding an investment property, there are two significant downsides. First, you’ll pay a premium to secure the rental guarantee; the developer will build it in to the sale price. Second, in accepting a guaranteed rent level, you’re insulated from market forces. Once the guarantee expires, the amount of rent your property can command will depend on a range of factors including supply and demand.
As newer properties come on to the market and tenants have a wider choice of places to live, the market rent for your property could fall. This is a particular risk in areas like the CBD and Docklands where there’s likely to be a substantial amount of new construction during 2009 and 2010 as developers scramble to keep up with demand from investors returning to the market.
Remember also that when you’re no longer protected by the rental guarantee, you’ll have to have sufficient cash flow to hold the property during periods when your property is not tenanted.
In summary, don’t let short-term benefits hold too much sway when you’re choosing an investment property. Focus instead on the long-term factors that will influence capital growth and rental demand: land values, demographic trends and the balance of supply versus demand. If these factors don’t add up, move on to another property.
You can visit Mark's website <a href="https://www.ipropertyplan.com.au/">iProperty Plan</a>.
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Buying an investment property? Be aware of short-lived benefits

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It appears that the floor hasn’t been seen for some home loan products, with Greater Building Society cutting their fixed rates on two, three, four and five year fixed rates for its packaged home loan, the Ultimate Home Loan, from today.
In early February, it was found that <a href="/expert-insights/finance/lenders-make-out-of-cycle-rate-cuts-ahead-of-rba-announcement">20 lenders had made cuts since the beginning of 2014</a>.
The Greater Building Society changes:
<ul>
<li>Three year rates: 26 basis points, to 4.99% </li>
<li>Two year rates: 20 basis points, to 4.79% </li>
<li>Four year rates: 11 basis points, to 5.49% </li>
<li>Five year rates: 15 basis points, to 5.64%</li>
</ul>
Greater Building Society’s CEO, Don Magin, said that those looking for a fixed rate should avoid the “revert rate rort” where customers end up on a higher, or even the highest, standard variable rate when the fixed loan term is completed.
Fees around transaction accounts, insurance costs, financial planning fees, redraw facilities and any annual fees on linked cards should be looked at.
As Property Observer previously reported, the <a href="/expert-insights/finance/gap-between-official-cash-rate-and-home-loans-continuing-to-widen">gap between the official cash rate and home loans continues to widen</a>.
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