National diversified developer Fortis has officially launched Crest &amp; Walker, its latest Brisbane apartment development, with construction now underway on the 20-storey Newstead project.

Award-winning builder BINAH has commenced construction on the Bureau^Proberts-designed building, which will deliver a limited collection of 65 two and three-bedroom apartments on Kyabra Street.

[smartcode_project:default project_id=145922 project_image_fid=373556]

The project marks Fortis' fourth active residential development in Brisbane, following River House, which is nearing completion, alongside projects in New Farm and Hamilton as the national developer continues to expand its South East Queensland pipeline.

Fortis General Manager – Development Queensland Dan Boman said Crest &amp; Walker reflects the developer's long-term commitment to delivering design-led residential projects in Brisbane's established inner-city suburbs.

"We're proud to be strengthening our presence in Brisbane with Crest &amp; Walker, particularly in such a sought-after lifestyle destination as Newstead," Boman said.

"Every Fortis project is shaped by its context, and we approach each one with the respect and care it deserves.

"Our focus is always on creating places that feel connected to their neighbourhood and elevate the everyday experience for residents. Newstead continues to evolve as one of Brisbane's most sought-after urban communities, and Crest &amp; Walker reflects our ambition to contribute meaningfully to that story."

[smartcode_project:default project_id=145922 project_image_fid=373559]

Positioned between Gasworks Plaza and James Street, <a href="https://www.apartments.com.au/new-apartments/crest-walker-newstead-12-kyabra-street-newstead-qld-4006">Crest &amp; Walker</a> has been designed as a boutique residential address offering privacy and generous living spaces within one of Brisbane's most established lifestyle precincts.

The building features a contemporary brick podium softened by integrated landscaping, while the upper levels are characterised by restrained architecture and enduring materiality. Interiors have been designed to maximise natural light, acoustic performance and long-term liveability.

[smartcode_project:default project_id=145922 project_image_fid=373583]

Residences comprise spacious two and three-bedroom floorplans, with two-bedroom apartments priced from $1.55 million and three-bedroom, half-floor residences from $3.95 million.

Residents will have access to a wellness-focused rooftop featuring a swimming pool, sauna, steam room, landscaped dining spaces and outdoor lounge areas overlooking Newstead and the Brisbane CBD.

[smartcode_project:default project_id=145922 project_image_fid=373571]

Sales are being managed by Slaite Projects, with Fortis expecting strong demand from owner-occupiers seeking a high-quality, design-focused apartment in one of Brisbane's most tightly held inner-city suburbs.

Completion of Crest &amp; Walker is slated for late 2028.

[smartcode_project_cta:default project_id=145922]

Joel Robinson

Fortis expands Brisbane pipeline with launch of Crest & Walker in Newstead

The enormity of delivering a true skyscraper in Australia's new development market is often overlooked.

It has taken the best part of a decade since plans for Chevron One were first unveiled, but the 52-storey tower is now complete, with residents collecting their keys and moving into what has become one of the Gold Coast's most recognisable new landmarks.

Rising 127 metres above Chevron Island, Chevron One stands almost twice as high as any other building on the island. Its scale places it alongside the trio of towers at Jewel, arguably the last truly significant addition to the central Gold Coast skyline when they were completed around six years ago.

While there are several developments underway around a similar height to Chevron One, they are more concentrated within clusters of the highest towers in the city. The fact Chevron One sits within a developing precinct, looking back at the other high-rise developments in Surfers Paradise and Broadbeach, makes it a different proposition altogether. It will certainly become a reference point on the Gold Coast skyline.

[smartcode_project:default project_id=6515 project_image_fid=68833]

Developer Bensons Property Group is behind the 52-storey tower, which has just shy of 250 apartments, along with an exhaustive list of resident amenity spread across what is the largest development site ever assembled on Chevron Island.

The tower has been the talk of the town for years, says Ray White Projects Gold Coast agent Caitlin Rosenboom, who is selling the remaining apartments.

"People have been watching Chevron One go up for years," Rosenboom says, adding that many prospective buyers have been surprised by the scale of the views once they step inside.

"It's only when they walk through a completed apartment that they truly understand the position of the building," Rosenboom says.

"The views are jaw-dropping. Whether you're looking east over the ocean, across Surfers Paradise, along the river systems or out to the hinterland, every level offers something different but equally impressive."

[smartcode_project:default project_id=6515 project_image_fid=360215]

One of Chevron One's defining advantages is its location on the eastern side of Chevron Island on Stanhill Drive, a position which protects the views forever.

"There's only one row of houses between Chevron One and the water, and the height restrictions along the river means views from Chevron One can never be built out,"&nbsp;Rosenboom says.

While new apartment developments continue to emerge across the Gold Coast, Rosenboom says opportunities to secure a completed apartment with this level of outlook are becoming increasingly rare.

"The size of the site is something that would be incredibly difficult to replicate today," she says.

"That's allowed Chevron One to deliver the sort of amenity, open space and resident facilities that very few projects can offer. There are not many completed apartment buildings on the Gold Coast right now that can compete with the combination of scale, quality and amenity."

[smartcode_project:default project_id=6515 project_image_fid=68839]

There's around 2,000 sqm of amenity solely for the use of residents of Chevron One. Club One features a uniquely shaped swimming pool that mirrors the footprint of the building itself, set within a extensively landscaped gardens. There's also an indoor pool and spa, a fully equipped gym with a Pilates room, a yoga garden, a bookable private dining area and lounge that can host up to 30 people, and a 24-hour concierge service.

As for the buyers, Rosenboom is fielding enquiry from everywhere: Sydneysiders and Melburnians looking at the new and off-the-plan market following the changes in the Federal Budget, as well as those looking to relocate, through to South East Queenslanders seeking either a permanent home or a weekender bolthole.

"The Gold Coast lifestyle continues to resonate with people relocating from the southern states, and when they see the views and the quality of what's been delivered at Chevron One, it becomes very easy for them to understand the appeal," Rosenboom says.

A diverse mix of one, two and three-bedroom apartments remain available, with each offering "something a little different", be it the orientation and views, configuration, or level, to suit a wide variety of buyers.

The remaining apartments are ready to inspect in person, by appointment.

[smartcode_project_cta:default project_id=6515]

A decade in the making: Residents to move into Chevron One as construction wraps up

A general rule of thumb in new apartment developments is that the penthouses get the rooftop.

It's a formula that's become commonplace across Australia's apartment market. Residents might have access to a pool, gym or barbecue facilities on a dedicated lower level, but the most desirable outdoor spaces are typically reserved for the highest-priced homes at the top of the building.

<a href="https://www.apartments.com.au/developers/sherpa-property-group">Sherpa Property Group</a> has taken the opposite approach.

Rather than dedicating the rooftop to a handful of buyers, the Gold Coast developer has made it the centrepiece of its Flourish collection, creating expansive shared spaces from the best vantage point in the building.

The philosophy has reached its most ambitious expression at <a href="https://www.apartments.com.au/new-apartments/flourish-soleira-palm-beach-1150-1160-gold-coast-highway-palm-beach-qld-4221">Flourish Soleira</a> in Palm Beach, where two rooftop precincts connected by a skybridge will deliver one of the most extensive lifestyle offerings seen in a residential apartment project on the Gold Coast.

[smartcode_project:default project_id=150017 project_image_fid=374053]

"We're seeing a clear move toward developments that offer more than just an apartment," Sherpa Group founder Christie Leet said.

"People want spaces that support how they actually live, whether that's working from home, staying active, or spending time with family and friends.

"That's where amenity becomes critical. It's not just about what's included, but how those spaces are designed to be used every day."

[smartcode_project:default project_id=150017 project_image_fid=374052]

The breadth of amenity has already attracted buyers across multiple demographics. Younger first home buyers have been drawn to Soleira's one-bedroom apartments, a product rarely delivered in Palm Beach, while families have responded to practical inclusions such as the shallow children's pool adjoining the main lap pool and the extensive communal recreation areas.

Instead of a single rooftop, Soleira delivers two distinct lifestyle zones.

[smartcode_project:default project_id=150017 project_image_fid=372547]

The southern rooftop has been dedicated to wellness, featuring a gym, yoga and Pilates studio, work-from-home facilities, a wellness centre, spa, and hot and cold plunge pools.

The northern rooftop focuses on recreation and entertaining, incorporating a heated resort-style pool, private dining rooms, pizza ovens, barbecues, a golf simulator, children's recreation areas, and what is expected to be the Gold Coast's first rooftop basketball court, which will also double as a squash court.

[smartcode_project:default project_id=150017 project_image_fid=374054]

Beyond the rooftops, Soleira will introduce 1,500 sqm of curated retail beneath the towers, creating one of Palm Beach's first genuinely mixed-use lifestyle precincts where cafés, restaurants and convenience retail become part of residents' everyday lives.

Sherpa has also retained management rights across the development, allowing it to oversee the long-term operation of the building through a 24-hour concierge model. The developer is also exploring additional revenue streams within the precinct aimed at helping offset ongoing body corporate costs for residents.

[smartcode_project:default project_id=150017 project_image_fid=370962]

While Soleira is the largest project Sherpa has delivered, the rooftop-first philosophy has been evolving for several years.

It began with <a href="https://www.apartments.com.au/new-apartments/amargo-6-12-sixth-avenue-palm-beach-qld-4221">Flourish Amargo</a>, the first project released under the Flourish brand. Rather than competing at the ultra-luxury end of the market with oversized half-floor and full-floor residences, Sherpa focused on creating lifestyle-driven apartments supported by resort-style shared spaces.

Amargo introduced more than 800 sqm of rooftop amenity, combining wellness facilities, heated pools, entertaining areas, cabanas, pizza ovens and private dining spaces into what was designed as an extension of residents' homes rather than a facility used only occasionally.

[smartcode_project:default project_id=146527 project_image_fid=366550]

That approach continued with Flourish Oasis, where the same amenity-led philosophy was refined into a more boutique development. Strong demand from Sherpa's growing VIP database saw much of the project sold before it reached the broader market, reinforcing buyer appetite for apartment communities centred around shared lifestyle experiences.

Flourish Amargo is slated for completion mid-way-through next year, with Oasis to be delivered by late 2027. Flourish Soleira is expected to complete in 2030.

[smartcode_project_cta:default project_id=150017]

Sherpa takes amenity to the sky as Flourish Soleira captures booming Palm Beach demand

As apartment living continues to evolve across Sydney's growth corridors, the quality and distribution of shared spaces is increasingly shaping how residents experience home. Rather than functioning as add-ons, amenities are being embedded into the daily rhythm of a building, supporting everything from quiet retreat to social interaction, often within a single vertical community.

At <a href="https://www.apartments.com.au/new-apartments/aeris-melrose-park-nursery-street-melrose-park-nsw-2114">Aeris</a> in Melrose Park, this approach is resolved through a layered amenity offering that unfolds from ground level through to its upper podium. Developed by <a href="https://www.apartments.com.au/developers/sekisui-house-australia">Sekisui House Australia</a> in partnership with Hankyu Hanshin Properties, the project introduces 468 apartments across two towers and a mid-rise building, positioned at the highest point of the broader masterplan.

[smartcode_project:default project_id=426 project_image_fid=359199]

The amenity experience begins at street level, where two courtyards sit within a landscaped setting that connects residents to the wider network of parks and green spaces. These green spaces are not isolated pockets but part of a wider pedestrian network that links Aeris to the surrounding <a href="https://www.apartments.com.au/developments/melrose-park-nsw-2114">Melrose Park</a> precinct, including Central Park, future schools, and the Town Centre opening in July 2026. The result is a transition that moves from public to private without abrupt boundaries, allowing residents to pass through shaded, tree-lined environments before reaching the building itself.

Moving upward, the focus shifts to the level five podium, where the primary communal facilities are concentrated. This space brings together a 16-metre swimming pool, outdoor seating areas, and a communal BBQ zone arranged to take advantage of elevated outlooks. Seating is positioned beneath pergolas, creating pockets of shade that extend the usability of the space throughout the day. The pool edge aligns with views toward the wider district, reinforcing the sense of elevation that defines the project’s positioning.

In the adjacent building, this is complemented by quieter, more contemplative spaces, including an outdoor cinema set within the same level. Positioned to operate primarily in the evening, it introduces a different tempo to the shared environment, shifting from daytime activity to after-hours use without requiring separate zones.

[smartcode_project:default project_id=426 project_image_fid=360299]

The podium also accommodates an intimate private resident gym. Located on the lower levels, it gives residents convenient access to fitness facilities without leaving the building.

Above, the elevated podium sky deck extends the amenity offering, providing additional open-air spaces with elevated outlooks across the surrounding landscape. While more restrained in program, this upper level reinforces the project’s vertical progression, from ground-level greenery to elevated outlook, allowing residents to move between distinct spatial conditions within a single address.

This distribution of amenities reflects a deliberate response to how residents use space across the day. Sekisui House Australia Sales and Marketing Director Peter Kalaf points to the role these shared areas play in shaping buyer demand. Aeris has been conceived as more than a collection of apartments, with the podium pool, gym and outdoor cinema forming part of a broader lifestyle offering that extends the home beyond each individual residence.

[smartcode_project:default project_id=426 project_image_fid=360300]

What distinguishes Aeris is not the inclusion of these elements individually, but how they are arranged in relation to one another. Active, social, and passive spaces are layered vertically rather than separated, allowing residents to choose between them without leaving the building or moving far from their apartment. This proximity supports both routine use, such as a morning swim or evening workout, and more occasional gatherings, whether around the BBQ area or within the cinema setting.

The amenity design also sits within a broader framework of connectivity across Melrose Park. The Melrose Park Town Centre, anchored by Coles and Dan Murphys, features a mix of retail, dining, health and lifestyle offerings, bringing everyday convenience closer to residents. By the end of the year, more than five hectares of parks and open space, equivalent to around seven football fields of green space on residents' doorstep, will further enhance the precinct, allowing the internal facilities at Aeris to operate as an extension of the wider neighbourhood rather than a substitute for it.

Construction at Aeris continues to gather momentum, with ground floor slabs expected to be completed in late 2026 before the first sections of the buildings begin to rise above ground.

[smartcode_project_cta:default project_id=426]

Elevated amenity anchors daily life at Aeris, Melrose Park

Repeat buyers are one of the strongest measures of confidence in any apartment development.

At <a href="https://www.apartments.com.au/new-apartments/era-newcastle-west-124-126-bull-street-newcastle-west-nsw-2302">ERA</a> in Newcastle West, some purchasers are returning to <a href="https://www.apartments.com.au/developers/gwh">GWH</a> after living at the developer's One Apartments. Their decision to purchase again was driven by the quality of life they found after moving into their first GWH home.

Keith Wilton had spent years living in a house in East Maitland before deciding it was time for a change. Apartment living had always been on his radar, but he was selective about what he wanted.

<iframe allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" allowfullscreen="" frameborder="0" height="315" referrerpolicy="strict-origin-when-cross-origin" src="https://www.youtube.com/embed/FH_1EzB-1vs?si=XScVlP1ERsTDJoME" title="YouTube video player" width="560"></iframe>

"I had some boxes I wanted to tick," he says.

Keith points to the open-plan design, generous outdoor areas and considered inclusions as key reasons One Apartments worked for him.

“One of those things was a nice indoor open plan area, but also I wanted a nice outdoor open area that I could entertain on in summer or Christmases or birthdays,” he says.

He also found value in the smaller details, from integrated appliances to shared resident spaces including the pool, cinema and rooftop areas.

[smartcode_project:default project_id=135096 project_image_fid=356818]

After comparing several developments, he chose One Apartments because of GWH's longstanding local reputation and his own experience working with the developer on a commercial project more than a decade earlier.

"I knew that they were local, that the quality of the build was going to be up there. I'd looked at other apartment complexes around and close by, and I just knew that here was a better decision location wise."

Today, Keith says the move has completely changed how he experiences Newcastle.

"I enjoy living in this location because it's more of a lifestyle change. That Newcastle city living where you can walk to restaurants and bars and even beaches and parks and even shopping across the road."

[smartcode_project:default project_id=135096 project_image_fid=356828]

Beyond the location, he says it's the sense of community that has surprised him most.

"Everyone loves living here because they chose to live here, but everyone looks out for each other. It's a real great community feel here."

For Aimee and Lyle Goodman, the journey started almost by chance.

<iframe allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" allowfullscreen="" frameborder="0" height="315" referrerpolicy="strict-origin-when-cross-origin" src="https://www.youtube.com/embed/tsioMLcnjas?si=zq-ys3JuWpfa5hFv" title="YouTube video player" width="560"></iframe>

The couple happened to be having coffee in Newcastle when they noticed the site where One Apartments was about to begin construction.

"We were aware GWH was planning a development," Aimee says. "We made one phone call and things moved pretty quickly after that."

As busy business owners, they initially thought apartment living would simply reduce the maintenance that came with larger homes. Instead, it fundamentally changed how they spent time together.

"We actually catch up more as a family now," Aimee says.

"We've had homes with big yards and lots of space, but everyone ended up in different rooms. Here we'll have dinner together, the kids can play, and we spend far more quality time together."

[smartcode_project:default project_id=135096 project_image_fid=356829]

Lyle says their confidence came from GWH's reputation within Newcastle's building industry.

"I know people who've worked across different apartment projects, and whenever GWH came up the feedback was always the same. They're rock solid. They're quality."

That confidence only grew throughout the buying process.

"One of the things that really impressed us with GWH was the whole process, was the communication," Lyle says. "It was consistent, it was regular, there was no problem if we had some weird questions, there was no problems in getting answers."

[smartcode_project:default project_id=135096 project_image_fid=351104]

Aimee says one moment stood out.

"The project actually finished on time. We realised we needed to hurry up and sell our house because everything was happening exactly when they said it would."

The positive experience at One Apartments ultimately gave all three buyers the confidence to purchase again with GWH, this time at ERA.

Their confidence reflects what many buyers are seeking in today's apartment market. Location remains important, but so too does certainty around delivery, quality and long-term liveability.

[smartcode_project:default project_id=135096 project_image_fid=356822]

ERA builds on those foundations with 280 one, two and three-bedroom apartments across two landmark towers in <a href="https://www.apartments.com.au/developments/newcastle-west-nsw-2302">Newcastle West</a>.&nbsp;

Designed by <a href="https://www.apartments.com.au/architects/fk-australia">Fender Katsalidis</a>, the project will include more than 2,000 square metres of resident amenities, including a resort-style pool, gym, sauna, private cinema and rooftop entertaining spaces overlooking the harbour and coastline.&nbsp;

The development is also within walking distance of the Newcastle Interchange, Honeysuckle, Darby Street, the harbour foreshore, restaurants, retail and the city’s beaches, continuing the walkable lifestyle that existing GWH buyers say has transformed how they live.

[smartcode_project:default project_id=135096 project_image_fid=356826]

For Keith, the appeal remains straightforward.

"You feel at home even before you've moved into your home."

For Aimee, the change is measured in time.

“I just felt like I had more time,” she says.

[smartcode_project:default project_id=135096 project_image_fid=351102]

Construction at ERA is now underway, with more than half of the residences already sold and limited two and three-bedroom apartments remaining in the East Tower release. Priced from $980,000 for two-bedroom residences and $1.46 million for three-bedroom residences, buyers can secure an apartment with a 10 per cent deposit, with premium homes offering ocean views from Level 8 and harbour views from Level 10.

ERA is also backed by Resilience Insurance's 10-year Latent Defects Insurance policy, providing protection against structural or waterproofing defects for 10 years after completion. The project is anticipated to be completed in early 2028.

[smartcode_project_cta:default project_id=135096]

From ONE to ERA: Why buyers are choosing GWH again in Newcastle West

Interest Rates

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EXPERT OBSERVER
We now expect the RBA to cut the cash rate today by 25bp and again in April, taking the cash rate to the RBA’s self-imposed floor of 0.25% sooner than our original forecast of April and June cuts.
We also see a risk of a 50bp cut tomorrow in an aggressive response to the unfolding growth shock resulting from the spread of coronavirus.
The RBA should also signal its willingness to consider other measures should stress emerge in the financial system and markets (e.g. measures to support liquidity and ongoing access to credit markets).
While we have long factored in further rate cuts given an underperforming economy, the coronavirus is having a large negative effect on China, which is Australia’s largest trading partner, and also in the local economy, with the travel ban curbing tourism and education exports and spill-overs to local spending and disruptions to supply chains. T
he virus outbreak represents both a supply shock and a demand shock, likely significantly weighing on business and consumer sentiment.
Lower interest rates can help cash flows, lower the exchange rate and potentially boost confidence, but easier fiscal policy will also be required, particularly when both the household sector and business investment are already weak.
Measures to assist firms manage across cash flow impacts (such as delaying tax payments) would likely be helpful. We also expect the US Federal Reserve will cut rates by at least 25 bps this month.
Since the RBA’s previous board meeting the spread of coronavirus has worsened and markets have become increasingly concerned about the impact to the real economy and global growth.
While little official data is available to confirm the magnitude of the impacts on global growth, partial data point to a collapse in activity in February and China’s importance as a consumer and in global supply chains presents a significant risk to global trade and therefore growth in trade-exposed economies.
The virus’s rapid spread to other countries presents further risk with the likelihood of consumers and businesses unable to go about their usual activities in those countries as well. 
The RBA is also likely to react to policy action by other central banks, with the exchange rate also playing an important role in the transmission of easier policy.
To date we have factored in the impact of the virus in the short-term, and see a small fall in GDP in Q1. Beyond that we have pencilled in a small recovery in growth, but for growth to remain below trend for the most part of the next two years (1.3% in 2020 and 2.7% in 2021). Consequently, this sees the unemployment rate drift higher, reaching around 5.5% by end 2020.
Inflation risk remains low and poses no constraint to easier monetary policy. A key risk to our forecasts is that the impact of the coronavirus is both deeper and more protracted, this would necessarily see a downgrade to our outlook for growth, a sharper deterioration in the labour market and the need for unconventional policy as the RBA reaches the zero lower bound.
That said, fiscal policy could also play a role, and in our opinion, should be used to support monetary policy in addressing the current virus outbreak. 
The US Federal Reserve is also likely to cut the fed funds rate this month by at least 25bps. The Fed Chair put out a statement last Friday indicating that the Fed was ready to use its tools to support the economy, foreshadowing the possibility of a rate cut this month.
While a rate cut will not address the direct risks associated with the coronavirus, and related containment efforts and community reaction, the Fed will be keen to ensure that financial market disruption does not add to the damage. A theme of US Fed research has been that, with policy room limited, the best response to a shock is to act quickly and aggressively – so a 50bp cut is possible. 
We will update out rate track further out, alongside our usual update to our growth and labour market forecasts over the next week. Alongside this, we will revisit the magnitude and timing of expected unconventional policy. We will also provide an update to our US and Global forecasts.
ALAN OSTER is the NAB Group chief economist 
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j.ballantyne1990-6AQqhLzZaK

RBA to cut rates in March and April: NAB's Alan Oster

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EXPERT OBSERVER
After the developments of the weekend we now expect the RBA to cut the cash rate by 0.25% at its meeting on March 3 and the FOMC to cut by 0.50% at its meeting on March 17/18.
On Friday we published our outlook for RBA and FOMC policy.
We confirmed our forecast for an April cut from the RBA and moved forward our first cut from the FOMC from June to March.
Over the weekend there have been major developments:
<ul>
<li>Following a further 900 point sell off in the US share market on Friday FED Chair Powell made a highly unusual unscheduled intervention, near the close of trading, noting that: “We will use our tools and act as appropriate to support the economy”.</li>
<li>This statement is likely to be seen as a “call to action” for other central banks around the world.</li>
<li>The Chinese PMI’s were released for February showing a plunge to 35.7 (from 50 in January) in the manufacturing PMI (even lower than the previous record low of 38.8 in November 2008 – during the GFC); the non-manufacturing PMI fell from 54.1 to 29.6. Both these levels were significantly below formal market expectations.</li>
<li>Reports of meetings over the weekend of Government and Financial Regulators to prepare Australia’s economic defences.</li>
<li>Market pricing for a 25 basis point cut from the RBA on March 2 has increased from 18% (Australia 5 pm Friday) to 120%.</li>
<li>Market pricing for a 50 basis point cut from the FOMC in March has moved from 50% (Australia 5pm Friday) to 75%.</li>
<li>There is reasonable speculation that the confidence hit to the share market and the overall economy we have seen over the last week may impact confidence in the housing market – particularly at the top end of the market.</li>
<li>Developments outside China around the Coronavirus continue to alarm. (Last five days we have seen cases reported in 20 new countries, with 20 countries now reporting local transmission).</li>
</ul>
All these developments in this very volatile time mean that we have reviewed our forecasts for the RBA and the FOMC.
We now expect the RBA to cut the cash rate by 0.25%  to 0.5% at tomorrow’s meeting.
That is likely to be followed up by a second cut to 0.25% at the April board meeting.
The Governor has previously indicated that he would consider quantitative easing once the cash rate reached 0.25%.
QE has always been part of Westpac’s forecasts but we envisaged the policy starting in the fourth quarter of 2020. These developments are likely to bring that timetable forward to mid year.
We have long argued that the FOMC would cut by 75 basis points over 2020. That reflected our view about a slowing economy coupled with consistent under shoot on inflation.
We now see that 75 basis points being made up of 50 in March and 25 in April.
We expect that given the FOMC's focus on market liquidity these rate cuts will be supplemented by specific liquidity policies. 
A key driver of the more aggressive stance from the RBA will be to ensure the AUD remains competitive. Since the advent of the Corona Virus the AUD has fallen from USD 0.69 to USD 0.65. With the RBA now likely to be more aggressive and the recovery in China likely to be delayed (and coming from an even weaker position, based on the recent PMI’s) we have also lowered our near term (March) forecast for the AUD from USD0.65 to USD 0.63.
I am primarily responsible for the content of this research report and I certify that:
<ol class="d">
<li>to the best of my knowledge, I am not in receipt of inside information and the research does not contain inside information; and</li>
<li>no other part of the licensee has made any attempt to influence the research.</li>
</ol>
This article was <a href="https://www.propertyobserver.com.au/https://westpaciq.westpac.com.au/Article/42362" target="_blank">first published on WestpacIQ</a>
<div>
BILL EVANS is the <a href="https://www.westpac.com.au/news/authors/bill-evans/" target="_blank">chief economist at Westpac</a>.
 
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RBA to cut rates at March and April meetings: Westpac's Bill Evans

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Australia’s largest bank, CBA, has today cut fixed rate home loans by up to 0.50 per cent.
Commonwealth Bank has slashed all its investment fixed rates, as well as its 1, 4 and 5 year fixed owner-occupier mortgage rates.
The biggest cuts are to the 4- and 5-year fixed investment interest-only loans, which have dropped by 0.50 per cent.
<img src="https://www.urban.com.au/images/2020/2/14/CBA%20new%20rates%201.JPG" alt="">
RateCity.com.au research shows 30 lenders have cut fixed rates this year, including Suncorp, Westpac and Bankwest.
As a result of today’s changes, CBA now has the lowest 1-year fixed rate out of the big four banks and equal lowest 4- and 5-year fixed rate for owner-occupiers.
<img src="https://www.urban.com.au/images/2020/2/14/CBA%20new%20rates%202.JPG" alt="">
RateCity.com.au research director Sally Tindall said the Commonwealth Bank was cutting fixed rates to stay competitive.
“With fixed rates now as low as 2.50 per cent, banks are being forced to take the knife to their home loan rates to attract new business,” she said.
“CBA’s decision to cut all investor fixed rates is a sign it wants them back on the books."
“Since the APRA caps on investors and interest-only lending have been scrapped, banks have been increasingly shaving investor rates."
“Although fixed rate cuts are often a sign of an imminent RBA cut, these latest changes could be more about CBA drumming up new business," she concluded.
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CBA cuts fixed home loan rates by up to 0.5%

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The RBA kept the official cash rate at a record low 0.75 per cent at its February meeting, the first of 2020. 
Tim Lawless, CoreLogic's head of research, said the result wasn't a surprise given the ongoing uncertainty brought about by the extent of the bush fires and the unfolding implications of the Corona virus outbreak.
"The RBA may need to keep some rate cutting ammunition up their sleeve should these scenarios play out more severely than expected.", Lawless said.
"To date, lower interest rates haven’t flowed through to a material improvement in economic conditions, but housing markets have well and truly responded, with national housing values rising 6.7% since the first rate cut in June through to the end of January. 
Lawless said that, importantly, we may be seeing some early signs that strength in housing markets is transferring through to other sectors.
"Dwelling approvals recorded their first annual rise since mid-2018 and the value of new mortgage commitments up 5.9% over the year to November, driven by a 10% increase in owner-occupier commitments. 
"Although rates remained on hold today, we are expecting the RBA to cut the cash rate later in 2020. 
"Further rate cuts could fuel home buyer demand, although we don’t expect future cuts to the cash rate to be passed on in full to mortgage rates.
 Finder's RBA survey suggests the retail slowdown will continue as the cash rate holds.
Some 79 per cent of survey respondents said we will see further store closures through 2020, following the likes of retailers Big W, Bose, Curris Planet and EB Games all closing stores.
Graham Cooke, insights manager at Finder, said the outlook is grim.
“While FMCG retailers such as Woolies and Coles will generally continue to operate successfully, clothing and other retailers must adapt or perish", Cooke said.
“In an environment where people are spending less and ordering more online – if you don’t have a seat at the table, you might be on the menu.
 Mozo director Kirsty Lamont says the likelihood of a cut in the next few months is very high.
“The full economic impact of the bushfire crisis and coronavirus is still unknown and the RBA will need to account for these factors to an already stagnant economy", Lamont said, adding that recent improvements in employment and inflation data gave the Reserve Bank enough breathing room to hold rates.
 
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jrobinson-rf4aSBido9

RBA hold rates at first meeting of 2020

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Future Fund chairman and former Treasurer Peter Costello has urged the Reserve Bank to refrain from cutting official interest rates to a new record low out of fear it could reignite a housing price bubble in Sydney and Melbourne following a “welcome correction” in home values over the past year.
As the RBA board prepares to meet next week for the first time since ­December, Mr Costello told The Australian, the central bank had to be “very careful” it did not risk further pumping up house prices by cutting official interest rates, which he said were failing to stimulate the economy."
He made the comments ahead of the latest Consumer Price Index – the main measure of inflation in Australia – which rose by 0.7 per cent in the December quarter, slightly above expectations. In seasonally adjusted terms the CPI rose by 0.6 per cent. The annual rate of headline inflation lifted from 1.7 per cent to 1.8 per cent. The Aussie dollar rose slightly against the greenback in response.
His comments echoed what Mr Costello said late last year, that interest rate cuts would have a limited impact on the economy.
"What will a rate cut do for the economy? In my view, not much," he said.
“We’ve already got a cash rate of 1 per cent, suppose it goes to 0.75 per cent, suppose it goes to 0.5 per cent. Áll these people who are holding off spending or borrowing or investing are going to say ‘I wouldn’t have done it at 1 per cent, but I’m going out there now that it’s 0.75 per cent?’ I don’t think that’s going to happen,” Mr Costello emphasized.
Peter Costello who was Treasurer for nearly 12 years during the Howard government, said he thought a "very big part" of the RBA's thinking was the prospect that if other countries cut interest rates, Australia would lose the stimulatory impact of having a lower exchange rate.
He described RBA governor Philip Lowe’s speech earlier this week, in which he said the RBA did not want Australia’s exchange rate to go up, as “very interesting”.
Image ABC
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Peter Costello says 2020 rate cuts won't do much

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ANZ Bank has cut both its home loan and deposit rates in the lead up to the RBA's first meeting of the year.
They've cut the variable rate for new owner occupiers paying principal and interest with a 20 per cent deposit or more by 0.12 per cent. It is now at 3.12 per cent.
ANZ now offer the second lowest ongoing variable rate of the big four.
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2020/1/23/Big%20Four%20Variable.jpg" alt=""> Source: RateCity.
RateCity.com.au research director Sally Tindall said ANZ appeared to be doing some "spring cleaning" ahead of the RBA’s meeting next month.Note: the above rates are new customer variable rates for owner occupiers paying principal and interest.
“ANZ’s recalibration of their deposit rates ahead of the next Reserve Bank meeting suggests they are getting their house in order ahead of a potential cash rate cut", Tindall said.
“Today’s home loan cuts are testament to the ongoing competition in the mortgage market. Yesterday we saw <a href="/expert-insights/finance/westpac-makes-big-cuts-to-fixed-rate-loans">Westpac slash investor fixed rates by up to 0.50 per cent</a> and we expect others will follow in coming days,” she said.
Following <a href="/news/nab-slashes-saving-rates-again">NAB's saving rate cut earlier in the month</a>, ANZ have followed suit, cutting their Online Saver account base rate from 0.10 per cent to just 0.05 per cent, the worst of the big four.
The old introductory rate for the first three months has been trimmed from 1.6 per cent to 1.55 per cent also.
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2020/1/23/Big%20four%20savings%20rates.jpg" alt=""> Source: RateCity
“With a new ongoing rate of 0.05 per cent, ANZ’s online saver account is down there at the bottom of the barrel.“What’s disappointing is that while the home loan cuts are largely reserved for new customers, the savings cuts will hit everyone with an ANZ online saver account", Tindall added.
"A person with $10,000 in one of these accounts would be getting less than 50 cents in interest a month once the introductory rate expires. That’s not even enough for a litre of milk."
 
 
 
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ANZ follow Westpac with interest rate cuts

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The average mortgage holder is $127 a month better off after three rate cuts since June, research from RateCity.com.au has found.
The figures are based on a big four customer with a discounted variable rate and a $400,000 loan with 25 years remaining.
If the borrower chose to invest the savings back in to their mortgage by leaving their repayments the same, they would be over $24,000 ahead over the remainder of the mortgage, which would be paid off two years and three months sooner.
Sally Tindall, RateCity research director said, despite no rate cut yesterday, variable mortgage holders have come out in front this year.
“Home owners are very much ahead this year – our research shows that the average Australian mortgage holder is now saving an estimated $127 a month thanks to the three RBA cuts this year, even though they weren’t passed on in full,” she said.
Impact of three rate cuts in 2019 – average mortgage holder
<table border="0" cellspacing="0" cellpadding="0"><tbody>
<tr>
<td valign="bottom" nowrap width="321">
Estimated savings June to December
</td>
<td nowrap width="109">
$595
</td>
</tr>
<tr>
<td nowrap width="321">
RBA cumulative cuts since June
</td>
<td nowrap width="109">
0.75%
</td>
</tr>
<tr>
<td nowrap width="321">
Average cumulative cuts from big four banks
</td>
<td nowrap width="109">
0.57%
</td>
</tr>
</tbody></table>
“While it’s tempting to spend your money at the shops, putting the money into your mortgage could help you pay it off months, even years earlier.
“Our research also shows while the average owner-occupier rate has dropped 0.57 per cent in the last year, the lowest rate has dropped by 0.75 per cent. 
“If you’re willing to shop around there are rock bottom rates available,” she said. 
 
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Average mortgage holder $127 a month better off after 2019 cuts

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The Reserve Bank of Australia have kept the official cash rate at a record low 0.75 per cent at its December meeting today.
"There are further signs of a turnaround in established housing markets," Lowe said.
"This is especially so in Sydney and Melbourne, but prices in some other markets have also increased recently.
The RBA are waiting to see if their three cuts in 2019 will stimulate the local economy enough that a further cut isn't required.
NAB however are forecasting disappointing GDP growth of 0.3 per cent in Q3, slowing marginally from the growth rates seen in the last two quarters and a continuation of the weakness seen over the past year.
"NAB's expectation is that the RBA will ease rates by a further 25bp in February, with the risk that it will ease a further 0.25 per cent an announce unconventional policy should a material fiscal stimulus fail to materialise,", NAB advise. 
Two-thirds of Finder RBA's Cash Rate Survey, a survey of economists and experts, also predict a cut to 0.5 per cent in February.
Julie Toth of the Australian Industry Group said in the absence of tax reform, cuts are one of the only moves the RBA can make.
"Australia's economy is failing to accelerate (again) in 2019-20", Toth said.
“Non-mining business investment remains especially weak, but it is sorely needed to boost our productivity growth and real incomes for all.
“In the absence of meaningful tax reform and micro-economic reform, another rate cut probably won't help much, but it is the only response that the RBA can offer," Toth added.
Westpac's Bill Evans says the RBA <a href="/expert-insights/finance/rba-will-cut-cash-rate-to-0-25-by-june-2020-bill-evans">will cut rates to 0.25 per cent</a> by June 2020.
 
 
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RBA holds rates at December meeting

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Australia's official interest rate isn't likely to go below zero, according to RBA Governor Philip Lowe.
At the Business Economics Dinner in Sydney last night, Lowe said negative rates are "extraordinarily unlikely."
A method used in Europe and Japan, Lowe said the tool is truly unconventional.
"Prior to the financial crisis, it was widely thought that zero was the lower bound for the policy interest rate.
"It was thought that if interest rates went below zero, people would hold their savings in banknotes rather than be charged by their bank to deposit their money.
Lowe said that having examined the international evident, it is not clear that negative interest rates has been a success.
"While negative rates have put downward pressure on exchange rates and long-term bond yields, they have come with other effects too.
"It has become increasingly apparent that negative rates create strains in parts of the banking system that can impair the ability of some banks to provide credit.
"Negative interest rates also create problems for pension funds that need to fund long-term liabilities.
"In addition, there is evidence that they can encourage households to save more and spend less, especially when people are concerned about the possibility of lower income in retirement.
"A move to negative interest rates can also damage confidence in the general economic outlook and make people more cautious.
Policy interest rates have been negative in Denmark, Sweden and Switzerland. Rates have been lowest in Switzerland, at minus ¾ per cent.
The only country outside of Europe that has had negative policy interest rates is Japan, at minus 0.1 per cent.
Lowe said Australia is not in the same situation that has been faced in Europe and Japan.
"Our growth prospects are stronger, our banking system is in much better shape, our demographic profile is better and we have not had a period of deflation. So we are in a much stronger position."
Lowe said low interest rates are not a temporary phenomenon and are "likely to be with us for some time."
The full speech was <a href="https://www.rba.gov.au/speeches/2019/pdf/sp-gov-2019-11-26.pdf" target="_blank">first published here</a>.
 
 
 
 
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Negative interest rates in Australia extraordinarily unlikely: RBA Governor Philip Lowe

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EXPERT OBSERVER
As expected, the Reserve Bank Board decided to leave the cash rate unchanged at 0.75% at its November Board meeting.
While this result was what was widely expected today, markets had given a 50% probability of a rate cut following the move in October. Westpac was never convinced of that prospect and had pointed to the fact that central banks usually make very strong cases for a decision and markets can over interpret that sentiment. We were also concerned that very low interest rates were likely to adversely affect sentiment, as we saw in the response to the June and July rate cuts where the Westpac-MI Consumer Sentiment Index fell by 4.1%. Readers will be aware that following the October rate cut, the index fell by 5.5%.
For us, the most important aspect of the Governor’s November Decision Statement was the signalling around prospects for a cut in December. It has always been our view that policy would be unchanged in November and December, but when market pricing reached 50% for November, December pricing was around 90%.
There are two key signals to suggest that the Board will take a break in December as well. Firstly, the term “the Board will continue to monitor developments” was included in the final paragraph, with the term “monitor” implying no urgency to move. Secondly, the final paragraph also notes “the easing of monetary policy since June”. It is our experience that when central banks refer back to previous decisions, it is also unlikely that they plan to move in the near future.
However, we are mindful that the Board does not want the market to believe that it has reached the end of the easing cycle. That would put unwelcome upward pressure on the AUD. Consequently, there remains a very clear easing bias: “the Board… is prepared to ease monetary policy further if needed”.
As indicated in our preview to today’s RBA decision, we pointed out that it was unlikely that the RBA would change its forecast for 2020. The Statement refers to growth in 2019 at 2¼ per cent and gradually picking up to 3 per cent in 2021. That indicates that the current growth forecast of 2.8% in 2020, which was adopted in August, is likely to be retained in Friday’s Statement on Monetary Policy.
The growth forecast for 2019 has been lowered from 2½ per cent to 2¼ per cent. When the 2½ per cent forecast was made, the RBA was unaware of the “softish” 0.5% GDP growth for the June quarter. With the first half of 2019 totalling 1 per cent, the 2¼ per cent forecast implies two quarters of around 0.6% growth in the second half of 2019. Westpac expects 0.5% in the September quarter.
Other key themes remain unchanged from the October statement: global economy risks are tilted to the downside; the main domestic uncertainty continues to be the outlook for consumption; the unemployment rate is expected to remain around 5 ¼ per cent for some time, before gradually declining to a little below 5% in 2021; wages growth is expected to remain around the current rate for some time; and there are further signs of a turnaround in established housing markets, especially in Sydney and Melbourne.
Some additional insights are: other sources of uncertainty include the drought and the housing construction cycle; and the recent inflation data were broadly as expected.
Conclusion
There is nothing in this Statement that prompts us to revise our current forecast that rates will be on hold in December with the next and final rate cut occurring in February next year.
Following that move, the state of the economy will be such that further stimulus will still be required, without which an unwelcome lift in the Australian Dollar would pose a significant headwind for the RBA’s current forecast of return to trend growth in 2020. Under those circumstances, it seems reasonable that the RBA might move towards some unconventional measures to boost demand and retain downward pressure on the Australian Dollar
BILL EVANS is the Chief Economist at Westpac
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