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

Joel Robinson

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

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

WM Residences fills gap in Mordialloc townhouse market

&nbsp;

Developer GURNER™ Group has revealed $1.65 billion in residential sales nationally across the 12 months to December 2025, driven largely by the continued momentum of its Docklands wellness-focused precinct, Elysium Fields.

The sales result was generated across seven projects in Victoria and New South Wales, headlined by Elysium Fields, GURNER™’s $2.75 billion mixed-use precinct planned for Harbour Esplanade in Docklands.

The project has recorded more than $500 million in sales across the first three towers, equating to around 580 apartments sold.

The first tower, Helios, has now sold out of its 240 private residences, with GURNER™ preparing to release a premium penthouse collection comprising 15 three-bedroom penthouses in coming weeks.

[smartcode_project:default project_id=144441 project_image_fid=370975]

Elysium Fields is being developed on the long-held 20,000 sqm Docklands site at 208-226 Harbour Esplanade, which had remained undeveloped for more than two decades prior to GURNER™ taking over the project around four years ago.

Construction has now commenced across four towers ranging between 18 and 30 storeys, with Hamilton Marino and Maxcon appointed as builders.

Once complete, the precinct is expected to comprise around 1,100 residences, alongside retail, hospitality and public realm uses integrated throughout the site.

[smartcode_project:default project_id=144441 project_image_fid=370981]

Designed by Fraser &amp; Partners in collaboration with GURNER™ Design House, the project has been positioned around the developer’s broader focus on wellness-led residential living.

“We don’t sell apartments. We create a true luxury lifestyle that simply doesn’t exist elsewhere in the market today,” Founder and Executive Chairman Tim Gurner said.

“To deliver that requires an extraordinary level of detail, coordination and discipline across multiple verticals, from design and hospitality through to wellness and service.”

“We’ve always believed that living extends far beyond the physical residence. It’s about how you feel the moment you arrive, how you live day-to-day, and the ecosystem that supports that.” 
[smartcode_project:default project_id=144441 project_image_fid=370977]

The project’s design places a heavy focus on landscaping, wellness amenities and biophilic design principles.

Plans include around 3,700 sqm of landscaped gardens and open space throughout the precinct, alongside a retail and dining offering spanning approximately 5,000 sqm.

The broader public realm strategy centres around what GURNER™ describes as the “Path of Life”, an urban forest and landscaped pedestrian environment intended to connect the various buildings and wellness spaces across the precinct.

The apartments themselves will incorporate a range of wellness-focused inclusions, including purified air and water systems, circadian lighting, antimicrobial surfaces, and optional in-home wellness upgrades.

[smartcode_project:default project_id=144441 project_image_fid=370980]

Gurner said the company’s experience through its Saint Haven wellness clubs had directly informed the residential offering now being incorporated into Elysium Fields.

“We’re seeing a clear global shift toward longevity, performance and proactive health,” Gurner said.

“Our role is to deliver that in a way that feels seamless, highly private and beautifully resolved within the environments we create.”

A large component of the wellness offering is planned through the resident amenity and health facilities proposed within the precinct.

That includes plans for bathing and recovery facilities spread throughout the towers, incorporating mineral pools, saunas, steam rooms, flotation therapy, red light therapy and wellness lounges.

The developer is also seeking approvals for what it describes as a “reverse ageing medical clinic” within the precinct.

[smartcode_project:default project_id=144441 project_image_fid=370978]

According to project information released by the group, the proposed facility would include cryotherapy, IV infusion therapy, infrared and dry saunas, PEMF beds, MRIs, DEXA scans, brain scans and blood analysis services.

Within the first tower, Helios, residents will also have access to a dedicated amenity offering known as the Sky Private Club.

The upper 15 levels of the building will include private lounges, dining spaces, rooftop amenities and optional private wellness studios integrated within residences.

The Helios tower itself comprises 260 apartments ranging between 60 sqm and 300 sqm, including a collection of penthouses.

That includes a planned two-storey penthouse spanning around 600 sqm with uninterrupted bay views.

The Elysium Fields precinct is being delivered in partnership with Digital Harbour Holdings, a consortium that includes the Liberman family, which controls the development rights across the Docklands site.

[smartcode_project:default project_id=144441 project_image_fid=370979]

The sales result comes as GURNER™ continues expanding its national development pipeline beyond Victoria.

“We have a strong pipeline across Australia and are now focused on scaling into key markets including New South Wales and Queensland, while continuing to build on our Melbourne base,” Gurner said.

“We currently have more than $3 billion in the market, growing to over $5 billion by October, and expect to materially outperform last year in the 2026 calendar year.”

The result also reflects the continued strength of the upper-end apartment market in Melbourne, particularly for owner-occupier-focused product with large-scale amenity and lifestyle offerings.

[smartcode_project_cta:default project_id=144441]

Record result anchored by the Group’s “utopian” Elysium Fields precinct – defying market headwinds in Docklands.

Elysium Fields drive Gurner to $1.65 billion in apartment sales over 2025

National Australia Bank (NAB) will fund <a href="https://www.apartments.com.au/new-apartments/palmera-residences-gold-coast-18-garfield-terrace-surfers-paradise-qld-4217">Palmera</a>, a $1 billion, 52-level luxury residential tower being developed by Central Equity in one of the Gold Coast’s most tightly held coastal locations at Northcliffe.

The project, launched recently by <a href="https://www.apartments.com.au/developers/central-equity">Central Equity</a>, one of Victoria’s largest private residential developers, comes at a time when construction funding for large residential developments has become increasingly competitive as lenders tighten exposure to the sector.

Multiplex has been appointed the builder, and construction is now underway.

[smartcode_project:default project_id=108274 project_image_fid=365784]

Since its first project, Central Equity has delivered more than 85 residential developments with a combined end value exceeding $8 billion.

Palmera reflects Central Equity’s growing focus on the Gold Coast luxury apartment market and continues a relationship between Central Equity and NAB that dates back to the late 1980s, when the bank funded one of Melbourne’s earliest inner-city residential towers at a time when high-rise apartment living in the CBD was largely unproven.

“NAB’s funding of Central Equity’s $36 million CBD development in the late 1980’s to the financing of the billion-dollar tower today highlights the long-term relationship between the two organisations in delivering major residential projects” said Central Equity Founder and Chairman Eddie Kutner.

He said NAB’s early support was instrumental in helping establish the company’s development model.

“When we commenced our first residential tower in the late 1980s the concept of funding off-the-plan apartments was still largely untested in Australia,” Kutner said.

“NAB recognised the opportunity early and supported the project when others were uncertain. That relationship has now continued for more than 37 years across many developments.”

[smartcode_project:default project_id=108274 project_image_fid=365771]

Central Equity was established in 1987 when Melbourne’s CBD and Southbank precinct were still dominated by warehouses and commercial buildings. Fewer than 100 residents lived in Southbank at the time, and large-scale residential development in the inner city was not widely considered.

Recognising changing demographics and lifestyle preferences, the company began developing high-rise residential projects designed to bring permanent residents into the city centre.

Central Equity has provided accommodation for approximately 40,000 residents across Melbourne’s CBD and Southbank, while also incorporating supporting infrastructure including essential lifestyle facilities like retail spaces, childcare facilities and neighbourhood activity centres.

Central Equity has spent many years assembling the Palmera development site on the corner of Garfield Terrace and Frederick Street in Northcliffe, creating a supersite of around 3,300 sqm.

The developer said the Palmera apartment tower reflects its long-term view of the Gold Coast as a growing and increasingly diversified economy.

[smartcode_project:default project_id=108274 project_image_fid=365768]

Supported by infrastructure including the light rail network, major road upgrades expanded education, hospital and medical facilities and continued expansion at the Gold Coast Airport with more international and domestic flights.

Positioned in the tightly held Northcliffe precinct, the 52-level tower will deliver 347 apartments, targeting buyers seeking a high-end coastal lifestyle, from downsizers to interstate investors.

Designed by Marchese Partners with interiors by DBI, Palmera has been conceived as a next-generation residential offering, featuring a collection of oversized apartments, with premium three-bedroom residences offering sweeping northern views stretching from Surfers Paradise through to Burleigh Heads.

[smartcode_project_cta:default project_id=108274]

NAB funds $1 billion Surfers Paradise apartment development, Palmera

Two years after completing one of the newest developments in North Sydney, developer <a href="https://www.apartments.com.au/developers/aqualand-australia">Aqualand</a> is turning its attention to the rapidly evolving St Leonards apartment market.

The developer, which completed AURA by Aqualand on North Sydney's Walker Street, has lodged plans for a 5,918 sqm site at <a href="https://www.apartments.com.au/new-apartments/33-37-herbert-street-st-leonards-nsw-2065">33-37 Herbert Street, St Leonards,</a> seeking approval for a pair of residential towers rising above a shared podium opposite Royal North Shore Hospital.

The proposal forms part of the broader transformation underway across the St Leonards-Crows Nest precinct, where former industrial and commercial sites are increasingly being redeveloped into high-density mixed-use projects tied to major transport infrastructure.

<img alt="Aqualand" data-entity-type="file" data-entity-uuid="2cc428cf-fe70-4cac-9cd5-264ad53af62c" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%209.51.56%E2%80%AFAM.png?VersionId=otKSnHtbjAvAddOnovyXQMgcAwE6DMe1" />

According to the planning documents, the site sits “within the St Leonards–Crows Nest Strategic Centre, identified by the NSW Government as a key area for accommodating future jobs and housing across Sydney.”

The proposal has been designed by fjcstudio, formerly FJMT Studio, and is being progressed through the State Significant Development pathway due to its scale and affordable housing provision.

The scheme would comprise 413 apartments, including 46 affordable housing units, alongside retail and commercial uses fronting Herbert Street. The project would also include communal open space, landscaping, a swimming pool, gymnasium, children’s play areas and podium-level resident amenities.

Planning documents show the development would consist of a part-13, part-39 storey tower form positioned above a four-storey podium.

“The development comprises a unified podium that activates the street interface, and two setback towers to accommodate new housing supply while maintaining an appropriate human scale at ground level,” fjcstudio noted in its Design Report.

The northern and southern towers have been shaped to respond to the surrounding skyline while also limiting overshadowing impacts to nearby public open space, particularly Talus Reserve.

The design report said the differing tower heights were intended to “contribute to a varied skyline while responding to the surrounding built form context and solar access considerations.”

<img alt="Aqualand" data-entity-type="file" data-entity-uuid="36da62dc-ff9e-41f2-a7e3-7be38373751c" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%209.51.45%E2%80%AFAM_0.png?VersionId=Mo6Rp2r.XRLTzIfg_PEEpw8NepDH8UBs" />

The site sits directly opposite Royal North Shore Hospital and within walking distance of both St Leonards Station and the new Crows Nest Metro station.

While the site itself sits just outside the formal Crows Nest Transport Oriented Development boundary, the planning documents repeatedly reference its alignment with the broader TOD objectives reshaping the Lower North Shore.

“The site is located adjacent to St Leonards Station and in close proximity to Crows Nest Metro which is within the Crows Nest Transit Orientated Development Accelerated Precinct which has been identified by the NSW Government to support housing delivery,” the Design Verification Statement noted.

According to fjcstudio, the project has been designed to respond to the broader transition occurring across St Leonards, where increasing residential density is being concentrated around transport infrastructure and employment hubs.

“The broader precinct is undergoing significant change, with a mix of existing mid-rise buildings and newer high-density developments,” the report stated.

“Recent and approved projects indicate a consistent shift toward taller built form, typically organised as tower-and-podium typologies with more active ground levels.”

The proposal includes close to 6,000 sqm of retail and commercial space across the ground floor and podium levels, designed to create a more activated street edge along Herbert Street.

Aqualand’s plans would also introduce a landscaped podium shared between the two towers, with communal open space in the form of a podium rooftop designed to support resident interaction and improve urban greening outcomes. The scheme would also introduce pocket parks at the northern and southern ends of the site, including a landscaped area at the corner of Herbert and Ella streets designed to improve pedestrian amenity and soften the streetscape.

&nbsp;

The proposal is being progressed through the NSW Government’s Housing Delivery Authority pathway, which was introduced to accelerate housing supply across the state. The application was declared State Significant Development in April 2025 following an expression of interest process.

<img alt="Aqualand" data-entity-type="file" data-entity-uuid="faf6d97d-2671-454f-b85a-fe1c6a7be608" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%209.51.49%E2%80%AFAM.png?VersionId=diVd28OBVr5.YV.7prrOz.uAanwwwm7a" />

St Leonards has been particularly active with new developments in recent weeks. Developer SP Setia’s <a href="https://www.apartments.com.au/news/nsw/first-look-sp-setia-targets-st-leonards-skyline-with-40-storey-tod-tower">plans for a new 42-storey tower</a> recently went on exhibition through the same pathway, while <a href="https://www.apartments.com.au/news/nsw/first-look-stockland-plans-52-storey-538-apartment-st-leonards-tower">Stockland’s 52-storey tower proposal</a> was also recently unveiled.

Aside from the St Leonards project, which is expected to take around nine months to move through the approvals process ahead of a potential 2027 launch, Aqualand is also preparing to launch Boronia, a new apartment project in Roseville comprising around 111 apartments on Larkin Street.

The developer also has approvals in place for the next stage of the Barangaroo precinct, which will feature new residential, retail, hospitality and community uses, alongside a new metro entry across the five-hectare site.

More than 50 new retail destinations are planned for Central Barangaroo, alongside a 270-metre-long boulevard connecting Hickson Park to Nawi Cove. Together with Harbour Park, more than 50 per cent of the precinct will comprise public open space and parkland.

First look: Aqualand joins St Leonards apartment party

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>
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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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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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