Queensland builder-developer MAYD has revealed the first look at its major North Kirra beachfront development, lodging amended plans that reduce the number of apartments and increase the proportion of larger residences.

The project is planned across a substantial 4,742 sqm amalgamated site spanning seven lots at <a href="https://www.apartments.com.au/new-apartments/2-6-pacific-parade-bilinga-qld-4225">2-6 Pacific Parade</a> and 27-33 Golden Four Drive in Bilin​ga, directly opposite Nor​th Kirra Beach.

<a href="https://www.apartments.com.au/developers/mayd-group">MAYD</a> secured the site for $32.5 million in 2025, in what was one of the Gold Coast's largest property transactions of the year.

The development will be delivered across two stages, with the first stage carrying an estimated gross realisation value of around $360 million.

The latest amendments seek to reduce the overall apartment count and shift the project further toward the owner-occupier market, with larger residences designed for buyers wanting considerably more space than traditionally offered in a beachfront apartment.

The residential mix will include townhomes, oversized two-bedroom apartments, substantial three-bedroom residences and four-bedroom homes.

MAYD has appointed Cera Stribley to lead the architecture and interiors, with the Melbourne-based design practice drawing on the beachfront setting through a series of ocean-facing terraces and heavily landscaped balconies.

Strong horizontal forms and curved balconies will define the exterior, with subtropical landscaping integrated throughout the building to soften the built form and increase the connection between the residences and the beachfront.

The project will also include an extensive collection of resident wellness and lifestyle facilities, continuing the broader shift across the Gold Coast's luxury apartment market toward larger homes supported by resort-style amenity.

<img alt="MAYD" data-entity-type="file" data-entity-uuid="d1bcbb05-e659-4b47-8bd4-1e595315e2ad" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-27%20at%202.05.03%E2%80%AFPM.png?VersionId=jj0XEud1X1DuLt7_KyElhjMdZGOXmLHP" />

MAYD Founder Todd Mould said North Kirra was increasingly appealing to buyers attracted to the more established, lower-density character of the southern Gold Coast.

"North Kirra presents one of the most compelling luxury residential opportunities currently emerging in Australia, combining absolute beachfront with the character and authenticity that buyers are increasingly seeking, and the same sense of tight-knit community that defined Burleigh and Currumbin perhaps 10 or 15 years ago," Mould said.

"With Gold Coast Airport on its doorstep, it also offers a level of accessibility that broadens its appeal across almost every market demographic."

The project comes as the southern Gold Coast continues to attract an increasing share of high-end apartment development and buyer activity.

Kirra in particular has emerged as one of the region's more tightly held beachfront markets, with its relatively low-density character, established surf and hospitality scene and proximity to Gold Coast Airport differentiating it from the higher-density markets further north.

Mould said those characteristics had informed the approach MAYD and Cera Stribley had taken to the project.

"We've worked closely with Cera Stribley to create a vision that is deeply connected to its surroundings," he said.

"Inspired by the coastline itself, the architecture has been shaped around space, privacy and resort-style living, creating a collection of homes that reflects the next generation of luxury on the southern Gold Coast."

MOTIV Managing Director Carly Cottam, who has been appointed to market the project, said buyer attention had continued to move south along the Gold Coast.

"Purchasers who may once have defaulted to Broadbeach, Main Beach or Surfers Paradise are increasingly recognising the value of a genuine beachfront location that offers lower density, strong amenity and a more established sense of community," Cottam said.

"Kirra has a powerful combination of growing demand and genuine scarcity. Beachfront supply is inherently constrained, the area remains relatively low density, and buyers are increasingly placing a premium on locations that feel established, uncrowded and authentic rather than heavily developed."

Cottam said the proximity to Gold Coast Airport was also proving increasingly important for interstate and second-home buyers.

"Being minutes from Gold Coast Airport makes it particularly compelling for interstate buyers, frequent travellers and second-home purchasers who can access an authentic coastal lifestyle almost immediately after stepping off a flight."

The acquisition takes MAYD's active development portfolio to more than $500 million, with the North Kirra project representing one of its largest undertakings to date.

MAYD is targeting an early 2027 launch.

Joel Robinson

First look at MAYD's North Kirra mixed-use precinct

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Castle Hill, the longtime hub of the Hills District, has been one of the major beneficiaries of Sydney's Metro expansion, with improved connectivity helping drive continued population growth, development and buyer demand across the Hills District.

But despite that growth, the suburb has seen relatively few major new apartment projects brought to market over the past 18 months.

Hills District developer Reve Group is looking to fill that gap with <a href="https://www.apartments.com.au/new-apartments/nova-r-ve-castle-hill-2-garthowen-crescent-castle-hill-nsw-2154">Nova Rêve</a>, a major new mixed-use precinct on the corner of Garthowen Crescent and Old Castle Hill Road, a short walk from Castle Hill Metro Station and Castle Towers.

[smartcode_project:default project_id=152737 project_image_fid=377679]

The project will comprise three residential towers alongside a hotel, restaurants, cafes and a skybar, more than 1,600 sqm of ground-floor retail and almost an acre of landscaped gardens.

It represents the largest project undertaken by Reve Group, the development arm of the Kassis family, which has been building across the Hills District for more than 30 years through Kassis Homes.

[smartcode_project:default project_id=152737 project_image_fid=377675]

Nova Rêve also represents a significant step up from the family's first apartment development, Grand Rêve, which was delivered nearby on Garthowen Crescent.

Grand Rêve introduced larger, house-like apartment layouts and premium inclusions including Wolf and Sub-Zero appliances to the Castle Hill market.

Nova Rêve takes that approach to a precinct scale, combining the residential component with hospitality, retail and substantial public and resident landscaping.

[smartcode_project:default project_id=152737 project_image_fid=377685]

Reve Group Managing Director Sam Kassis said the project reflected the family's three decades of building in the Hills, which has evolved from trophy homes on quarter-acre blocks to larger-scale apartment development.

"Grand Rêve was our first apartment project here and it showed us what this pocket of Castle Hill could be. Nova Rêve is the refinement of that idea: not just apartments, but a place the whole suburb can use," Kassis said.

A key part of that approach is the hotel, which has been designed to operate as an amenity for the wider Castle Hill community rather than solely hotel guests.

It will include restaurants, cafes, skybars and all-day dining, alongside conference and event facilities catering to business functions, community groups and private events.

At ground level, more than 1,600 sqm of shops and cafes will open onto the surrounding streets and landscaped areas.

Almost an acre of gardens designed by Land and Form Studios will run through the precinct, incorporating pathways, seating, barbecue areas and children's play spaces.

[smartcode_project:default project_id=152737 project_image_fid=377680]

Reve Group's Romio Georges said creating an active ground plane had been central to the planning of Nova Rêve.

"There are gardens with pathways, barbecues, seating and play areas, shops and cafes opening onto the street, and a hotel with restaurants and a skybar that anyone in Castle Hill can walk into," Georges said.

The project's elevated position on one of Sydney's highest ridgelines will also provide apartments with outlooks toward the Sydney skyline, surrounding parkland and the Blue Mountains.

More than 80 per cent of the apartments will occupy corner positions, with Turner responsible for both the architecture and interiors.

&nbsp;

[smartcode_project_cta:default project_id=152737]

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Nova Rêve arrives as Reve Group bets on Castle Hill's next growth phase

A collection of just 25 large-format apartments and penthouses overlooking Goodwin Park is entering the Coolangatta market, with <a href="https://www.apartments.com.au/new-apartments/marea-residences-coolangatta-27-27a-dixon-street-coolangatta-qld-4225">Maréa Residences</a> combining a low-density, residential-only approach with uninterrupted park and Pacific Ocean outlooks.

Located at 27 Dixon Street, Maréa comprises three and four-bedroom residences alongside a limited number of dual-level penthouses, with the project positioned between Goodwin Park and <a href="https://www.apartments.com.au/developments/coolangatta-qld-4225">Coolangatta</a>’s coastal precinct.

Construction has commenced, with completion currently estimated for late 2027. Three-bedroom residences are priced from $1.8 million.

[smartcode_project:default project_id=150999 project_image_fid=374005]

The project has been designed around its northern outlook across the park, with the building’s architecture, landscaping and material palette intended to establish a connection with the neighbouring green space. The residences have been configured to maximise natural light and views across Goodwin Park towards the ocean.

Inside, the material palette incorporates timber, stone and brushed brass, complemented by curved detailing and ambient lighting. Kitchens and bathrooms carry the same natural material approach, while residences also include basement parking, storage and lift access.

Maréa’s penthouses are arranged over two levels and include private pools, adding another layer to the project’s focus on larger-format apartment living. Across the development, residences are configured with three or four bedrooms rather than the broader mix of smaller apartment types commonly found in larger projects.

[smartcode_project:default project_id=150999 project_image_fid=374010]

Resident amenity is concentrated at rooftop level, where landscaped entertaining terraces and pools take advantage of elevated views across Coolangatta and the Pacific Ocean.

The project has so far been particularly well received by local owner-occupiers and downsizers, according to Urban Activation Property Sales and Marketing Director Matt George, with the residential-only format, construction quality and northern park outlook among the features resonating with purchasers.

“The uninterrupted northern aspect overlooking Goodwin Park has been a key point of difference, with buyers attracted to the sense of serenity and open space the park provides, while still enjoying easy access to the ocean and being within walking distance of the lifestyle and amenities Coolangatta has to offer,” George said.

[smartcode_project:default project_id=150999 project_image_fid=374002]

“The combination of high-quality construction, a residential-only building, park outlook and proximity to the beach has resonated strongly with the local downsizer market.”

The Dixon Street address is within walking distance of Coolangatta Beach and the broader southern Gold Coast coastline, including the surf breaks at Snapper Rocks and Kirra. Coolangatta’s cafés, restaurants and retail are nearby, while Gold Coast Airport is also within close proximity.

[smartcode_project_cta:default project_id=150999]

Maréa Residences brings parkside apartments to Coolangatta

Melbourne developer PDG has secured Victorian Government approval for its $1.5 billion Southbank development <a href="https://www.apartments.com.au/new-apartments/the-one-1-queens-bridge-street-southbank-vic-3006">The One</a>, clearing the way for the long-dormant riverfront site opposite Crown to finally be developed.

The Minister for Planning has approved the project at 1-29 Queens Bridge Street, with the Department of Transport and Planning issuing the planning permit following its assessment.

The approval will allow PDG to develop the prominent 5,059 sqm site with a major mixed-use tower comprising premium apartments, including branded residences, a luxury hotel and boutique office space.

PDG acquired the site in late 2024, with its position directly opposite Crown's main entrance and near Melbourne's Arts Precinct making it one of Southbank's most significant remaining development opportunities.

<img alt="PDG" data-entity-type="file" data-entity-uuid="3933013e-6332-4386-b9be-089df05caf17" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-27%20at%209.29.22%E2%80%AFAM.png?VersionId=sITIgBqDL0N3VNSMwWEmF5UA.uvcsRyu" />

Designed by COX in collaboration with ODO and PDG, the tower's architecture draws on the movement of the Yarra River, with six vertical pleats running the height of the sculpted facade.

The project will also see the heritage-listed Queens Bridge Hotel restored and incorporated into the development&nbsp;with new hospitality and public uses, including a rooftop venue.

A significant component of The One will be its residential amenity.

More than 5,000 sqm of resident facilities will be delivered across a single level, making it one of the largest consolidated residential amenity offerings proposed in an Australian apartment development.

The planning approval also incorporates a major upgrade of Queensbridge Square, which PDG will deliver in partnership with the City of Melbourne.

<img alt="PDG" data-entity-type="file" data-entity-uuid="73167fcd-1031-4b6f-a408-a064cfe45ed1" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-27%20at%209.29.17%E2%80%AFAM.png?VersionId=Pf1AEWxw6SNmBqR0zQW5lyEze.MtxgFp" />

The existing square will be revitalised as a new civic and pedestrian space along the Yarra River, strengthening the connection between the project, Southbank and the riverfront.

PDG Founder and Managing Director Vince Giuliano said the approval represented a major milestone for a site which has remained largely underutilised for more than 15 years.

“This is the most significant Planning Permit approval Melbourne has seen in recent years,” Giuliano said.

“For more than 15 years, this site has remained underutilised. This approval enables us to deliver a project that will contribute meaningfully to the revitalisation of Southbank, restore and reactivate an important heritage building, and create a new civic and hospitality destination for Melbourne.”

The latest approval follows an earlier planning permit issued by the City of Melbourne covering demolition works across part of the site at 9-29 Queens Bridge Street. Those demolition and early works are already underway.

PDG has also started generating early interest in the residential component from owner-occupiers ahead of a planned public launch in early 2027.

PDG secures approval for $1.5bn Southbank apartment development, The One

Local developer Harridan is seeking to turn its Woolloongabba apartment project into the first stage of a broader transformation of Burke Street, using a new 16-storey mixed-use building to establish a greener pedestrian connection toward the rapidly evolving Boggo Road transport and knowledge precinct.

The South East Queensland developer has filed plans for 154 apartments on the <a href="https://www.apartments.com.au/new-apartments/4-burke-street-woolloongabba-qld-4102">southern side of Burke Street</a>, where its proposal has been designed alongside a wider vision by LatStudios for the street.

That vision positions the southern side of Burke Street for buildings of 15 storeys and above, while envisaging lower-rise development of up to five storeys on the northern side to transition into Woolloongabba's existing character housing. It also proposes wider pedestrian verges, deep planting, new street trees and upgrades to the pedestrian approach to Boggo Road Station.

The Harridan development itself has been designed by Brisbane-based Arqus Design and will comprise 154 apartments across 16 storeys. The mix is weighted heavily toward two-bedroom apartments, with 121 proposed alongside 10 one-bedroom and 23 three-bedroom residences. There will typically be around 14 units per floor.

A lower-ground car park and three podium levels will accommodate 156 resident parking spaces, along with visitor and commercial parking. There will also be 154 resident bicycle spaces and 40 visitor bicycle parks.

&nbsp;

Harridan is a family-owned developer and part of the Holmwood Highgate Group, with more than three decades of development activity across South East Queensland. Its portfolio spans residential, commercial and industrial property, with current residential projects including Riverbank on Byron in Bulimba, Esperance Residences in Carina and The Precinct at Kinross Road in Thornlands.

Wooloongabba has been popular for apartment developers, particularly since the announcement of the 2032 Summer Olympics games in Brisbane.

While there have been a lot of development applications, it has failed to materialize into real supply.&nbsp;

Sarazin has been the major player in the area. They are under construction at Murcia Residences, on the fringe of East Brisbane and Woolloongabba. They have just launched <a href="https://www.apartments.com.au/new-apartments/the-stanley-residences-woolloongabba-8-trafalgar-street-woolloongabba-qld-4102">The Stanley Residences</a>, in Woolloongabba on Trafalagar Street. They also have Nuage coming soon on the nearby <a href="https://www.apartments.com.au/new-apartments/nuage-woolloongabba-14-wellington-road-woolloongabba-qld-4102">Wellington Road</a>.

First look: Harridan plans Burke Street transformation beside Boggo Road transport hub

Interest Rates

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EXPERT OBSERVER
Some positive signs for the economy and a push by the federal government for banks to relax lending standards for small business will allow the Reserve Bank of Australia (RBA) to take a break from cutting official interest rates.
With the cash rate reduced to a record low of 0.75 per cent, the RBA may have done enough for the time being to help boost consumer confidence despite disappointing September retail sales figures.
Having confident consumers is a major contributor to an economic turnaround and the domestic economy is still showing signs of improvement. 
It is good to see the Government talking to the banks about the way they have been applying the responsible lending guidelines to small and medium-sized enterprises. By supporting more lending and our SMEs we should see positive signs of further economic improvement.
In this environment there is no real need for the RBA to do much more until they get a better view of the economy into the first quarter of next year.
It will be good to see consumers break the shackles and start spending again in the lead up to Christmas. Hopefully the central bank’s rate reductions have helped give consumer confidence a boost.
I urge mortgage holders to regularly review their home loans to ensure they were getting the best possible deal.
Mortgage holders should never be complacent about their home loan.
While interest rates are at historic lows, lenders are willing to battle for your business. Contact a mortgage broker to make sure you are getting the best terms possible and, most importantly, save money.
John Kolenda is the managing director at <a href="https://www.finsure.com.au/" target="_blank">Finsure</a>.
 
 
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jrobinson-rf4aSBido9

RBA can take a summer holiday: Finsure's John Kolenda

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At its meeting today, the Board decided to keep the cash rate on hold at 0.75 per cent.
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While the outlook for the global economy remains reasonable, the risks are tilted to the downside. The US–China trade and technology disputes continue to affect international trade flows and investment as businesses scale back spending plans because of the uncertainty. At the same time, in most advanced economies, unemployment rates are low and wages growth has picked up, although inflation remains low. In China, the authorities have taken steps to support the economy while continuing to address risks in the financial system.
Interest rates are very low around the world and a number of central banks have eased monetary policy in response to the persistent downside risks and subdued inflation. Expectations of further monetary easing have generally been scaled back over the past month and financial market sentiment has improved a little. Even so, long-term government bond yields are around record lows in many countries, including Australia. Borrowing rates for both businesses and households are also at historically low levels. The Australian dollar is at the lower end of its range over recent times.
The outlook for the Australian economy is little changed from three months ago. After a soft patch in the second half of last year, a gentle turning point appears to have been reached. The central scenario is for the Australian economy to grow by around 2¼ per cent this year and then for growth gradually to pick up to around 3 per cent in 2021. The low level of interest rates, recent tax cuts, ongoing spending on infrastructure, the upswing in housing prices in some markets and a brighter outlook for the resources sector should all support growth. The main domestic uncertainty continues to be the outlook for consumption, with the sustained period of only modest increases in household disposable income continuing to weigh on consumer spending. Other sources of uncertainty include the effects of the drought and the evolution of the housing construction cycle.
Employment has continued to grow strongly and has been matched by strong growth in labour supply, with labour force participation at a record high. The unemployment rate has remained steady at around 5¼ per cent over recent months. It is expected to remain around this level for some time, before gradually declining to a little below 5 per cent in 2021. Wages growth remains subdued and is expected to remain at around its current rate for some time yet. A further gradual lift in wages growth would be a welcome development and is needed for inflation to be sustainably within the 2–3 per cent target range. Taken together, recent outcomes suggest that the Australian economy can sustain lower rates of unemployment and underemployment.
The recent inflation data were broadly as expected, with headline inflation at 1.7 per cent over the year to the September quarter. The central scenario remains for inflation to pick up, but to do so only gradually. In both headline and underlying terms, inflation is expected to be close to 2 per cent in 2020 and 2021.
There are further signs of a turnaround in established housing markets, especially in Sydney and Melbourne. In contrast, new dwelling activity is still declining and growth in housing credit remains low. Demand for credit by investors is subdued and credit conditions, especially for small and medium-sized businesses, remain tight. Mortgage rates are at record lows and there is strong competition for borrowers of high credit quality.
The easing of monetary policy since June is supporting employment and income growth in Australia and a return of inflation to the medium-term target range. Given global developments and the evidence of the spare capacity in the Australian economy, it is reasonable to expect that an extended period of low interest rates will be required in Australia to reach full employment and achieve the inflation target. The Board will continue to monitor developments, including in the labour market, and is prepared to ease monetary policy further if needed to support sustainable growth in the economy, full employment and the achievement of the inflation target over time.
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Established housing turnaround: RBA Governor Philip Lowe's November 2019 meeting statement

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The Reserve Bank have decided to leave the cash rate on hold at a historic low 0.75 per cent.
It <a href="/expert-insights/finance/established-housing-turnaround-rba-governor-philip-lowes-november-2019-meeting-statement">noted a further turnaround in established housing</a>, particularly in Sydney and Melbourne.
The decision comes after a month of some positive news for the Reserve Bank, namely in unemployment which <a href="/news/rba-breathe-sigh-of-relief-as-seasonally-adjusted-unemployment-nudges-lower">dropped back to 5.2 per cent</a>.
Last weeks slight inflation uptick was <a href="/expert-insights/investing/inflation-rate-creeps-towards-rba-target-zone-commsec">further good news for the RBA</a>.
CoreLogic's head of research Tim Lawless said the decision to hold rates was widely anticipated given the RBA is running out of conventional monetary policy ammunition.
"The decision to keep rates on hold was supported by the latest labour market and inflation readings, which saw the national unemployment rate nudge lower, while annual headline inflation edged slightly higher," Lawless said.
"Additionally, a rebound in housing values and a rise in buyer activity will hopefully begin to flow through to a gradual improvement in household wealth and spending. 
Lawless suggested the RBA will be carefully monitoring other indicators which have continued to lose momentum such as consumer confidence, residential construction activity and retail spending. 
"One of the negative side-effects of such historically low interest rates is that Australian households and businesses are reading through the low rate setting and becoming less confident about their household finances and the outlook for the economy, which is offsetting some of the stimulatory benefits of historically low interest rates. 
"Although the cash rate has remained on hold, lenders are becoming increasingly competitive, particularly for high quality borrowers – ie those with low debt relative to their incomes and a responsible track record of savings together with expenses that are in line with their incomes. 
"No doubt the lowest mortgage rates since at least the 1950’s and improved access to credit following APRA’s decision to adjust the interest rate serviceability floor are contributing to a rebound in housing market conditions. 
"While the improved housing market conditions are a positive for broader economic conditions, an increase in speculative activity from property investors or a slip in the quality of lending standards could be the trigger for a new round of macro-prudential policies aimed at maintaining prudent lending standards and keeping a lid on further accrual of housing related debt.
Finder.com.au's RBA Cash Rate Survey saw all of its 38 experts predict a rate hold at today's meeting, however two thirds of the experts surveyed believed the cash rate will drop to 0.5 per cent in February 2020.
Only 21 per cent think there will be a cut in December.
Sally Tindall, research director at RateCity, says that despite there being no movement this month, another rate cut is still very much on the cards for the future: 
"When you look at the big 4 banks, on average their 3-year fixed rates are a quarter of a percent lower than their lowest variable rates, which is a strong indication the cash rate will continue to fall," Tindall said.
"In fact, the market is expecting rates will remain low for very long time. Five year fixed rates have hit an all time low of 2.74% while variable rates are as low as 2.69%.
"But these rates are reserved for new customers so if you want to take advantage of this, you might have to turn yourself from an existing customer into a new one."
Shane Oliver, chief economist at AMP Capital, says the are still expecting an easing in December and February.
"With growth likely to remain subdued and the econ a long way from full employment further easing is needed," Oliver tweeted.
"So in the absence of significant fiscal stimulus soon we still expect another easing in Dec &amp; Feb."
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RBA holds interest rates at November Cup Day meeting

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EXPERT OBSERVER
The employment report for September printed a modest fall in the unemployment rate from 5.26% to 5.20%. Further, the underemployment rate fell from 8.53% to 8.35%.
That will be sufficient to avert another rate cut from the RBA in November.
Westpac has consistently argued that a cut in November was unlikely and the Employment Report strengthened our case.
The October RBA meeting minutes made an important point that had not been part of earlier commentaries:
“Members also discussed the possibility that policy stimulus might be less effective than past experience suggests. They recognised that some transmission channels, such as a pick-up in borrowing or the effect on the home-building sector, may not be operating in the same way as in the past, and that the negative effect of low interest rates on the income and confidence of savers might be more significant. Notwithstanding this, transmission through the exchange rate channel was still considered likely to work effectively, and evidence suggested that the positive effects of lower interest rates on aggregate household cash flows via lower debt repayments was likely to support household spending, given that household interest payments exceed receipts by more than two to one”.
This point is highly relevant for any discussion around the Effective Lower Bound (ELB) for the cash rate in this cycle.
Certainly, with the Board targeting full employment (currently assessed by the RBA as 4.5% compared to the actual of 5.2%)and a move into the 2–3% target zone for underlying inflation, it seems certain that the RBA will reach its ELB before it achieves its objectives.
Westpac’s current forecast (first set out on July 24) is that the ELB is 0.5% and will be reached at the February Board meeting.
However this process is different to the normal process for forecasting the end point of any policy cycle. That forecast typically hinges around forecasting how far below (or above) neutral (or R*) the cash rate will need to be pushed before the authorities can be comfortable of achieving the objectives of full employment and inflation sustainably in the 2–3% target range.
So the policy around choosing the ELB will likely be determined by the trade-off between the expected impact of further cuts and unanticipated consequences of ultra-low interest rates.
The minutes have already highlighted one risk – the impact of ultra-low rates on confidence. That effect was further emphasised by the 5.5% fall in the Westpac-MI Consumer Sentiment Index in October to its lowest level for four years. The survey was conducted during the week of the announcement of the 0.25% cut in the cash rate from 1% to 0.75%.
Read full report <a href="https://westpaciq.westpac.com.au/wibiqauthoring/_uploads/file/Australia/2019/October/er20191021BullPolicyDebate.pdf" target="_blank">'Policy debate' (PDF 99kb)</a>
BILL EVANS is the Chief Economist at Westpac
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Policy debate hinges around risks of ultra low interest rates: Bill Evans

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The Federal Treasurer Josh Frydenberg has asked the ACCC to investigate the banking sector over its refusal to pass on interest rate cuts to customers in full. 
He has asked the Australian Competition and Consumer Commission to look into the pricing of residential mortgage products.
The competition watchdog will also report back on any obstacles customers face in switching banks. 
It will examine the entire sector but the Government has made it clear that the big four banks will be the focus.
The ACCC is able to use “compulsory information-gathering powers” to obtain data from financial institutions, through holding an inquiry under Part VIIA of the Competition and Consumer Act (2010).
“We will aim to provide answers to the questions that banking customers have long asked,” said ACCC chair Rod Sims.
Mr Frydenberg said customers are "sick and tired of the merry dance" as the banks have neglected to pass on the rate in full despite consistent calls from the Government and the RBA. 
"The banks have just ignored that advice and that call," Mr Frydenberg said. 
"We need the ACCC to use its particular powers to compel documentation to lift the hood and get to the bottom of this issue." 
"The Aust people are sick of the merry dance where the RBA reduces the cash rate, political leaders AND the RBA call on the banks to pass them on in full AND that advice is ignored."
However Mr Frydenberg ruled out introducing legislation to force the banks to pass on the rate in full.
He phoned the chief executives of the big four banks on Sunday and told them the inquiry could help them "clear the air" and explain why they had not passed on the rate in full. 
The Australian Banking Association (ABA) has said the banks stand ready to assist the ACCC in the inquiry.
"Banks are no stranger to public scrutiny and look forward to the opportunity to cast more light on mortgage pricing and the many important factors that influence the setting of interest rates," the ABA advised.
"The first priority of Australia’s banks is the implementation of the Royal Commission.
"Banks are also working night and day to prepare for the Consumer Data Right to empower customers to more easily shop around for the financial service that best meets their needs."
The Customer Owned Banking Association (COBA) has welcomed the ACCC's inquiry into home loan pricing and competition in the retail banking market.
COBA’s director of strategy Sally Mackenzie said it’s important that the inquiry investigates ways to make it easier for consumers to switch banks while avoiding more red tape.
“This inquiry is an opportunity to deliver a more competitive banking sector by examining what is holding consumers back from switching bank providers.
“Empowering consumers to switch their banking and to shop around is an unambiguously good thing.
“A more competitive market will make all players care more about their customers.
“There are barriers that prevent consumers from switching, which makes it challenging for smaller banks to win market share from the big four banks.
“Consumers can benefit personally by shopping around, and the market will function more effectively if there is more intense competition for borrowers.
“It’s important that policy makers empower consumers to drive competition.
“Policy makers need to careful consider regulatory interventions because smaller players are already subject to a disproportionately high regulatory burden.
“We look forward to this inquiry coming up with creative new ways to unleash consumer power.”
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Banks' failure to pass on rate cuts to home loan customers prompts ACCC inquiry

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Borrowers refinancing are at the highest levels in three years, according to data released by the ABS.
They're taking advantage of the lower interest rates, with a 7.7 per cent jump in the value of new homes loans being refinanced.
Owner-occupiers lead the charge, posting an 8.4 per cent jump in value, the highest value of refinanced loans since September 2016.
There was a surprise to see a drop in the number of loans to first home buyers over the month, down 0.7 per cent.
Sally Tindall, research director at RateCity.com.au, said the increase in refinancing activity came on the back of the June and July rate cuts.
“The first two rate cuts have clearly encouraged borrowers to sit up and take notice of their home loan rates.
<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/2019/10/11/Housing%20Finance%20August%20Westpac.jpg" alt=""> Source: Westpac
“We expect this trend will continue as refinance applications, that are still in the pipeline, are settled.
"The most recent cash rate cut, and the decision by most banks not to pass it on in full, is also likely to spur more refinancing activity."
There are suggestions the loosening of serviceability is starting to effect the market. 
Despite the value of owner-occupier loans soaring, the number of new loans for owner-occupiers rose just 0.7 per cent, suggesting there are bigger loans being approved as opposed to a large uptick in number of loans.
Westpac's Matthew Hassan said the 0.7 per cent rise in owner-occupier loans was considerably softer than the consensus forecast of a 2.3 per cent gain, however he noted approvals have risen 5.9 per cent from their April low.
<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/2019/10/11/New%20finance%20approvals%20Westpac.jpg" alt=""> Source: Westpac
Approvals are still down -5.1 per cent over the year.
Investors are well and truly back in the market. The 5.7 per cent increase in value of investor loans over August puts the value of loans approved up 10 per cent over the last two months, adding to the 4.2 per cent rise in July.
The values however are still 13 per cent lower than they were a year ago.
Mortgage Choice chief executive Susan Mitchell said the growth in demand from investors is unsurprising given the factors which may be positively impacting their appetite.
"The result of the Federal Election took the potential removal of property tax concessions off the table," Mitchell said.
"“Things are looking up for investors with the election now behind them, and the threat of negative gearing changes gone. 
<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/2019/10/11/Housing%20finance%20approvals%20by%20segment.jpg" alt=""> Source: Westpac
"As a result, once cautious investors may have been encouraged to put their buying plans in action. 
“Policy and pricing on investment loans are now much more favourable," Mitchell added.
"Investor rates have continued to tumble, in many cases further than owner occupier rates.
"This, combined with the relaxing of APRA’s serviceability requirements means the market is looking increasingly appealing for investors."
 
 
 
 
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Borrowers taking advantage of falling interest rates

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EXPERT OBSERVER
Despite ACCC chair Rod Sims’ recent criticism of the bank practice of charging higher rates to loyal existing borrowers than they do for new business, lenders are rolling out big fixed rate home loan cuts - that apply to new customers only.
In October, many lenders have reserved their biggest rate cuts for the fixed rate home loan market – where rates only apply to new loans. The 2 and 3-year fixed rate market in particular is active right now with plenty of rate cut announcements. 
All of the big four banks have slashed fixed rates in recent weeks. 
From today, 10th October, Commonwealth Bank’s advertised 2 and 3 year (OO, P&amp;I) fixed rates in the “Wealth Package” have been cut to 2.99 per cent pa (Comparison rates from 4.46 per cent pa). 
Commonwealth Bank have now cut two and three-year fixed rates by 0.80 percentage points since June. The RBA has cut the official rate by 0.75 percentage points. Commonwealth Bank’s variable (OO, P&amp;I) advertised home loan rate has come down by 0.57 percentage points in the same period.
ANZ Bank cut two and three-year fixed rates last week by up to 0.30 percentage points. ANZ Bank now boasts 2 and 3-year fixed rates from 2.98 per cent pa (comparison rates from 4.45 per cent pa) with a package deal discount. ANZ cut variable rates last week by 0.14 percentage points. 
NAB have cut their fixed rates by up to 0.40 percentage points (OO, P&amp;I). NAB’s two-year rate is now 2.98 per cent pa (comparison rate 4.47 per cent pa).
Westpac (and subsidiaries) cut fixed rates by up to 1.3 percentage points in September. Westpac’sone-year Premier Advantage (OO, P&amp;I) rate was cut by 0.80 percentage points to 3.29 per cent pa (comparison rate 4.05 per cent pa)
Other lenders have also announced big rate cuts on fixed home loans with more announcements expected in coming days. 
From yesterday, 9th October, ING cut two and three-year fixed rates (OO, P&amp;I) by up to 0.20 per cent pa. ING now has fixed home loan rates starting at 2.89 per cent pa (comparison rate 4.23 per cent pa) and variable rates starting at 3.14 per cent pa (comparison rate 3.17 per cent pa).
There are now 44 two-year fixed rate home loan products (OO, P&amp;I) with advertised headline rates under 3.0 per cent on the InfoChoice database of 145 institutions.
There are now 48 three-year fixed rate home loan products (OO, P&amp;I) with advertised headline rates under 3.0 per cent on the InfoChoice database of 145 institutions.
There are 11 variable rate home loans (OO, P&amp;I) with advertised rates under 3.0 per cent listed by InfoChoice. 
Borrowers can not expect a great deal simply because they have been loyal to a particular institution for many years. 
When lenders announce rate cuts for fixed rate loans, they only apply to new customers. Existing customers continue to pay the fixed rate that applied at the beginning of the loan.
Banks and other lenders are competing with other and constantly trying to win new business.
Fixed rates are clearly now being set with the future in mind. Banks are apparently expecting the RBA to keep rates low well into 2021 and 2022 and that’s why they are setting 2 and 3-year fixed rates at these very low levels.
Borrowers who don’t like their rate are entitled to ask for a better deal and move to a better offer if they don’t get a good deal.
Borrowers need to factor this into their calculations. If rates change, a fixed rate will stay the same until the end of the term.
Vadim Taube is the CEO of leading Australian financial comparison site InfoChoice.com.au.
 
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More banks cut rates – for new customers only

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EXPERT OBSERVATION
With the Reserve Bank of Australia cutting official rates to 0.75% on Tuesday, has been a wave of commentary about the move doing little to help the economy apart from boosting housing prices.
There are two parts to assessing this claim. First, do rate cuts drive up property prices? Second, is that all they do?
Do rate cuts drive up property prices?
Economists have a precise answer to this question, and also a more practical one.
The precise answer is that all assets – stocks, bonds, property, stamps, vintage baseball cards, you name it – can be priced using <a href="https://faculty.chicagobooth.edu/john.cochrane/research/papers/samplechapters.pdf" target="_blank">what is known as</a> the stochastic discount factor (SDF).
This says that in pricing an asset you should factor in all the future cash flows the asset will generate (rent or dividends or capital gains) and then translate those returns into today’s money, adjusting for the riskiness of those cash flows.
An easier way to think about how rate cuts might affect property prices – consistent with the asset-pricing approach – goes like this.
People look at how much money they can borrow based on what they can afford to pay back. An interest rate cut boosts their borrowing power.
Even though the major banks have only passed on about half of the Reserve Bank’s latest cut (owner-occupied mortgage rates have been cut by 13-15 basis points), that’s enough to give a household with income of $150,000 about another $12,000 to $14,000 in borrowing power.
They thus spend more and, because there is a limited supply of properties, this pushes prices up. So, yes, lower interest rates do tend to boost property prices.
Is that all rate cuts do?
But boosting property prices is not all that rate cuts do.
Higher prices for new dwellings help developers. They often lead to an increase in construction jobs as developers anticipate better conditions for selling properties. New property construction has a number of other effects, too, such as changing <a href="https://www.rba.gov.au/publications/rdp/2019/pdf/rdp2019-01.pdf" target="_blank">the average quality of the rental stock</a> and spurring more retail spending (because those new homes need to be furnished).
Perhaps even more important is the pseudo-psychological effect of existing home owners feeling wealthier when house prices go up. This can lead to increased consumer spending – and this can have a big economic effect, given consumer spending accounts for about 60% of GDP.
This “wealth effect”, rational or not, seems to be real. It is part of the reason the Reserve Bank’s governor, Philip Lowe, appeared to be concerned about Sydney and Melbourne house prices falling in the past couple of years. It is also why federal treasurer Josh Frydenberg is happy to see property prices again on the rise.
Finally, lower interest rates do make business investment cheaper.
Would corporate tax cuts provide a bigger boost to investment? You bet. Are there diminishing returns to rate cuts as the cash rate approaches zero? That’s very likely to be the case.
But would businesses invest more if rates were two percentage points higher? No way. And would business like rates to be higher? I seriously doubt it.
Rate cuts do something to drive down unemployment, drive up consumer prices, and boost investment generally.
Are rate-cut driven prices increases bad?
But they certainly do also drive up residential property prices.
The important question is whether that’s bad or not. The answer to this question is a little murkier.
Let’s start with the fact borrowers should be thinking about how much to borrow.
If they borrow too much and are unable to repay their loans, that’s very bad news for them. Defaulting on a mortgage is a wrenching experience. Most people try hard to avoid that.
That said, sometimes people make poor choices through lack of information, lack of thought or lack of willpower. Occasionally an unscrupulous third party will encourage them to borrow more than they should.
But it’s not in the interest of banks to make too many loans that don’t get repaid. If borrowers are the first line of defence again bad price increases, lenders are the second line of defence.
There is a third line of defence: prudential regulation. The <a href="https://www.apra.gov.au/" target="_blank">Australian Prudential Regulation Authority</a> and the <a href="https://asic.gov.au/" target="_blank">Australian Securities and Investments Commission</a> are charged with enforcing “responsible lending laws” and ensuring the animal spirits and (sometimes) bad incentives of borrowers and lenders don’t get out of control.
So property prices increasing a few percent on the back of the rate cuts is unlikely to be problem – though as the Reserve Bank governor is fond of saying, “<a href="https://www.rba.gov.au/speeches/2019/sp-gov-2019-09-24" target="_blank">time will tell</a>”.<img src="https://counter.theconversation.com/content/124600/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1">
Richard Holden, Professor of Economics, UNSW.
This article is republished from <a href="http://theconversation.com" target="_blank">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/vital-signs-yes-house-prices-will-rise-with-lower-interest-rates-but-thats-not-the-only-effect-124600" target="_blank">original article</a>.
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House prices will rise with lower interest rates, but that’s not the only effect

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Three of the Big Four Banks have dropped rates on their fixed home loans in the past week, with NAB the latest all set to cut its rates by up to 0.40%.
In total, 17 lenders – including CBA and ANZ – have cut rates on fixed home loans since the RBA's October 1 decision.
In the month before the October rate cut, 27 lenders cut fixed rates, in particular Westpac, which slashed rates by up to 1.30%.
<img src="https://www.urban.com.au/images/2019/10/8/Rate%20cuts%201.JPG" alt="">
(Source: RateCity.com.au)
Paul Marshall, chief executive at RateCIty.com.au, said this flurry of rate cuts is a sign banks are foreseeing a further cash rate cut, which could come as soon as next month.
“Fixed rates have been tumbling since the last rate cut, which indicates lenders could be pricing in yet another RBA cut,” he said.
“As a result, we are seeing record low fixed rates and it’s now possible to lock in a rate under 3% for five years. This suggests many banks are forecasting a sustained period of low rates.
“Many punters appear to be betting on a further rate cut as soon as Melbourne Cup day where we could see the cash rate drop to 0.50%.”
<img src="https://www.urban.com.au/images/2019/10/8/Rate%20cuts%202.jgp.JPG" alt="">
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NAB announce fixed rate cuts following RBA's October decision

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Australia’s fifth largest bank, ING, has announced that it is cutting home loan interest rates by 0.15%.
The bank’s interest rates will drop for both new and existing customers, and will be effective from October 16.
The cuts take ING’s lowest variable interest rate for new customers to 2.99%, for home loans over $1 million, and 3.03% for loans under $1 million.
A total of 26 lenders have announced rate cuts for their customers three days after the Reserve Bank cut the official cash rate to 0.75%.
The average interest rate reduction across the owner-occupier home loan market is currently 0.17% and just five lenders are passing on the full 0.25% RBA cut.
The chief executive of RateCity.com.au, Paul Marshall, said there are still dozens of lenders yet to announce what cuts they’ll make.
“With the cash rate now below one%, banks are cautiously considering what to pass onto home loan customers, while still appeasing shareholders and savers,” Marshall said.
“If your bank hasn’t declared their hand, you should call, email or even tweet them into action.”
 
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