<p data-end="568" data-start="388">Abadeen has released the whole-floor penthouse crowning its recently completed <a href="https://www.apartments.com.au/buildings/park-residences-cremorne-2-sutherland-street-cremorne-nsw-2090">Park Residences</a> development in Cremorne, bringing the near-300 sqm residence to market for the first time.</p>

<p data-end="803" data-start="570">Occupying the entire top floor of the boutique Lower North Shore development, the penthouse includes 221 sqm of internal living and a 74 sqm wraparound terrace, with a prized north-facing aspect taking in views across Middle Harbour.</p>

<p data-end="1041" data-start="805">The residence has been completed and fully furnished following a collaboration between Abadeen Executive Chairman Justin Brown and internationally recognised interior designer Jack Freeman, Founder and Managing Director of FREEMAN &amp; CO.</p>

<p data-end="1239" data-start="1043"><a href="https://www.apartments.com.au/developers/abadeen">Abadeen</a> and Freeman approached the penthouse as a finished home, sourcing furniture, artwork, lighting and objects from Australia and overseas.</p>

<p data-end="1239" data-start="1043">[smartcode_project:default project_id=114246 project_image_fid=378718]</p>

<p data-end="1459" data-start="1241">Pieces from Parisian design house Pierre Augustin Rose sit alongside contemporary artworks and bespoke lighting, with Freeman drawing on recent visits to PAD Paris and Salone del Mobile Milano for the final collection.</p>

<p data-end="1582" data-start="1461">Brown said the aim was to create a penthouse that felt more like a large-scale private home than a traditional apartment.</p>

<p data-end="1777" data-start="1584">"The experience begins the moment the lift doors open. You're welcomed into an elegant dining room before the home opens into an extraordinary living space framed by sun-drenched harbour views.</p>

<p data-end="2018" data-start="1779">"Every time someone walks through the front door they pause. It's not just the view, it's the incredible sense of space, the warmth created by the northern sunlight that fills the interiors, and the way every room connects so effortlessly.</p>

<p data-end="2245" data-start="2020">"It has all the proportions of a luxury home, while delivering the effortless lifestyle and personalised experience of living in a world-class six-star hotel, combined with the simplicity and convenience of apartment living."</p>

<p data-end="2245" data-start="2020">[smartcode_project:default project_id=114246 project_image_fid=378713]</p>

<p data-end="2438" data-start="2247">A secure lift provides exclusive access to the penthouse level, opening to a dedicated arrival foyer and dining area before the residence expands into its main living and entertaining spaces.</p>

<p data-end="2577" data-start="2440">Floor-to-ceiling glazing runs across the northern side of the home, connecting the interiors with the terrace and Middle Harbour outlook.</p>

<p data-end="2772" data-start="2579">The penthouse also features a fireplace and substantial chef's kitchen, while the wraparound terrace has been designed to accommodate both everyday outdoor living and larger-scale entertaining.</p>

<p data-end="2245" data-start="2020">[smartcode_project:default project_id=114246 project_image_fid=378720]</p>

<p data-end="2245" data-start="2020">Freeman said the interiors had been deliberately kept restrained to complement the scale, natural light and outlook already established by the architecture.</p>

<p data-end="2996" data-start="2932">"The penthouse is a serene study in quiet luxury," Freeman said.</p>

<p data-end="3264" data-start="2998">"The interior pairs soft, sculptural forms with warm timber, pale stone and a restrained neutral palette. Curated artwork and metallic accents add depth, while abundant natural light creates a calm, effortlessly refined atmosphere. In my world, less is always more."</p>

<p data-end="3384" data-start="3266">Freeman said the approach was centred around collecting individual pieces rather than simply decorating the apartment.</p>

<p data-end="3531" data-start="3386">"Every material, every object and every piece of furniture has been curated with intention. I am a true believer in collecting versus decorating.</p>

<p data-end="3823" data-start="3533">"The architecture already provided extraordinary natural light, remarkable volume and an uninterrupted connection to Middle Harbour. Our role was to complement those qualities with unique one-of-a-kind pieces of fine art and collectible design sourced from recent travels around the world."</p>

<p data-end="3823" data-start="3533">[smartcode_project:default project_id=114246 project_image_fid=378694]</p>

<p data-end="3986" data-start="3825">Among the collection are solid bronze sculptures by Lorenzo Quinn, alongside a curated crystalware collection and pieces sourced from international design fairs.</p>

<p data-end="4199" data-start="3988">Park Residences sits opposite Cammeray Golf Club, Cammeray Croquet Club and Grand Slam Tennis Cammeray, around 300 metres from Neutral Bay Village and its established collection of restaurants, cafés and retail.</p>

<p data-end="4370" data-start="4201">Brown said the combination of a whole-floor floorplan, northern aspect and proximity to Neutral Bay was becoming increasingly difficult to find on the Lower North Shore.</p>

<p data-end="4516" data-start="4372">"Completed whole-floor penthouses with a sun-drenched north-facing aspect and sweeping Middle Harbour views are exceptionally rare," Brown said.</p>

<p data-end="4717" data-start="4518">"Add a quiet position opposite golf, croquet and tennis facilities, a level walk to Neutral Bay Village and only minutes to the CBD, and you have a lifestyle that's incredibly difficult to replicate.</p>

<p data-end="4883" data-start="4719">"This is a home that offers the privacy and generosity of a luxury residence together with the convenience of one of Sydney's best-connected harbourside locations."</p>

<p data-end="4947" data-start="4885">The penthouse will be exclusively marketed by SRM Residential.</p>

<p data-end="4947" data-start="4885">[smartcode_project_cta:default project_id=114246]</p>


Joel Robinson

Abadeen unveils penthouse at Park Residences in Cremorne

<p>New Brisbane developer Dalcott has unveiled Marrone, the first of three residential projects it is planning in and around Browning Street in South Brisbane.</p>

<p><a href="https://www.apartments.com.au/new-apartments/marrone-south-brisbane-39-browning-street-south-brisbane-qld-4101">Marrone</a> will comprise 97 predominantly two- and three-bedroom apartments, with larger residences aimed squarely at the owner-occupier market.</p>

<p>The project will sit in a quiet pocket of South Brisbane between South Bank and West End, close to the restaurants, cultural attractions and riverfront amenity that have driven the suburb's continued transformation.</p>

<p>Dalcott is targeting buyers looking for more space and amenity than has traditionally been offered in the inner-city apartment market, particularly downsizers and professionals wanting to remain close to the city.</p>

<p>[smartcode_project:default project_id=149951 project_image_fid=377072]</p>

<p>Resident facilities will be concentrated around an extensive rooftop amenity offering, including a swimming pool, spa, infrared sauna, warm and cold magnesium plunge pools, private lounge, dining room and outdoor entertaining areas.</p>

<p>Dalcott Managing Director Lachlan Cottee said South Brisbane's combination of lifestyle, connectivity and established character had been central to the approach to Marrone.</p>

<p>“South Brisbane offers a combination of lifestyle, connectivity and character that’s difficult to replicate elsewhere in Brisbane,” Cottee said.</p>

<p>“Our focus has been on creating homes that feel connected to that environment while providing the level of design, functionality and quality that today's owner-occupiers expect.”</p>

<p>The residences will feature an expressive material palette. Italian Calacatta Viola marble, known for its deep burgundy veining, will be paired with aged brass tapware, Chestnut engineered timber flooring and Tuscan Oak joinery.</p>

<p><img alt="Marrone" data-entity-type="file" data-entity-uuid="b8d833da-3b30-496a-ae30-07bdff371b50" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-25%20at%2010.52.35%E2%80%AFAM.png?VersionId=P6DAgOfaQzIXljKKK5j3e5NhWtrHIu9G" /></p>

<p>Bathrooms will feature Nara Japanese ceramics and glass bricks, while clay, walnut and brass lighting will be used throughout the apartments.</p>

<p>Dalcott has appointed Realm Projects, led by Managing Director Shane Foley, to handle sales and marketing following previous sold-out collaborations between the groups.</p>

<p>Foley said the Brisbane apartment buyer had become increasingly focused on the quality of the home itself rather than simply securing an inner-city address.</p>

<p>“We expect to see strong demand from buyers who still want all the advantages of inner-city living but aren’t prepared to compromise on the quality of their home,” Foley said.</p>

<p>“Many will be downsizers looking to leave behind the maintenance of a traditional family home without giving up the space they enjoy, while others are likely to be professionals wanting a residence that reflects the way they live today.”</p>

<p>“Marrone responds directly to that demand, with generous floorplans, exceptional resident amenity and a location that places some of Brisbane’s best dining, entertainment and cultural attractions within walking distance.”</p>

<p><img alt="Marrone" data-entity-type="file" data-entity-uuid="61f7b22f-899e-4c0f-940a-7d3ab1bfb93a" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-25%20at%2010.52.44%E2%80%AFAM.png?VersionId=PvN1JYxBgUpyCB7efKo52WGdSDs9nmim" /></p>

<p>Marrone will be the first project delivered as part of Dalcott's broader investment in the precinct.</p>

<p>It will be followed by La Terra, a boutique project comprising penthouse-style, single-level apartments on a northeast corner site with extensive resident amenity and city views.</p>

<p>Cottee said Marrone represented the first stage of the group's longer-term plans for the area.</p>

<p>Dalcott was established in 2025 by Lachlan Cottee and Ben Dalgliesh, combining development and construction capability under an integrated model and focusing on architecturally considered residential projects.</p>

<p>Marrone will initially be offered through a pre-release registration campaign ahead of its broader public launch.</p>


Dalcott targets owner-occupiers with South Brisbane debut Marrone

<p>Parnell Developments is the latest to seek significant uplift through the NSW Government's Housing Delivery Authority on a Strathfield site previously approved for a much smaller apartment development.</p>

<p>Parnell has sought approval for a 32-storey mixed use tower across&nbsp;<a href="https://www.apartments.com.au/new-apartments/7-lyons-street-strathfield-nsw-2135">3-7 Lyons Street and 18 Parnell Street</a>, a&nbsp;1,857 sqm site around 400 metres from Strathfield Station. The building would yield 160 apartments, 15 per cent of which will be dedicated affordable as per the government mandate for buildings seeking additional uplift.</p>

<p>Approved previously was a nine-storey building back in 2022 with just over 30 apartments. That approval came prior to the project being&nbsp;progressively reconsidered as planning policy shifted toward greater density around transport hubs.</p>

<p><img alt="Strathfield" data-entity-type="file" data-entity-uuid="c5af5281-a643-4eb2-b8c4-0081b59c04c7" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-25%20at%209.16.48%E2%80%AFAM.png?VersionId=37bd3mI7rHNpThOV_75VO8xsGFwWOi1u" /></p>

<p>Turner has designed the latest building that would replace&nbsp;existing detached homes across the four lots.</p>

<p>The apartment mix comprises 22 one-bedroom apartments, 107 two-bedroom and two-bedroom-plus configurations, and 31 apartments with three or more bedrooms. The scheme also includes 203 car spaces across six basement levels and 58 bicycle spaces.</p>

<p>The proposal has been designed around a three-storey podium addressing Lyons Street, with the tower rising above and stepping toward its upper levels.</p>

<p>Turner said the podium was deliberately scaled to respond to the existing street, while the taller element has been designed as part of the emerging skyline anticipated around Strathfield Town Centre and the wider Homebush transport-oriented development precinct.</p>

<p>The Lyons Street frontage would have a more active, pedestrian-focused character, incorporating the commercial tenancy, landscaping and a brick-framed podium with an awning.</p>

<p><img alt="Strathfield" data-entity-type="file" data-entity-uuid="14b20874-b8c3-4ac7-bc03-92be9a69fb78" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-25%20at%209.17.48%E2%80%AFAM.png?VersionId=av.9TxtqIRTC6v3PkSuu1rL9rreWoe2h" /></p>

<p>Parnell Street, which faces the railway corridor, has been given a different architectural treatment, with double-height breeze blocks, landscaping and communal areas used to soften the interface with the rail infrastructure.</p>

<p>The tower itself uses curved and recessed facade elements, with wave-like indentations across the northern elevation breaking the building into three vertical forms.</p>

<p>A palette of grey concrete, brick and breeze blocks is complemented by clay and terracotta accents, while the upper tower adopts a lighter expression through articulated slab edges, vertical fins and recessed glazing.</p>

<p>Residents would have access to 467 sqm of communal open space spread across three levels. The ground floor would accommodate the more active resident areas, including barbecue and group gathering spaces and an internal communal room capable of being used for working from home.</p>

<p>A more passive viewing deck is proposed at level three, overlooking the ground-level landscaping and neighbouring tennis courts, while a rooftop "sunset deck" at level 30 would provide another social and relaxation space.</p>

<p><img alt="Parnell" data-entity-type="file" data-entity-uuid="c3dce401-a80f-4682-8471-4caa01180880" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-25%20at%209.17.34%E2%80%AFAM.png?VersionId=Xyo8JVqbOhSJXNy6Ih.1cHL.O6i0bGR." /></p>

<p>&nbsp;</p>

<p>&nbsp;</p>

<p>&nbsp;</p>

<p>Strathfield has been earmarked for substantial change through the Strathfield Town Centre planning work and the nearby Homebush TOD precinct.</p>

<p>Turner's report says the project has been designed to act as a transition between the existing low and mid-rise development surrounding the site and the taller built form expected to emerge across the town centre.</p>

<p>The proposal is being assessed as State Significant Development under the HDA pathway, alongside the concurrent request to amend the Burwood Local Environmental Plan.</p>


First look: New apartment tower pitched for Strathfield Town Centre precinct

<p>An $18 million penthouse has hit the market in Main Beach as construction tops out on La Mer, the $155 million apartment development rising just metres from the beach.</p>

<p>Spanning around 600 sqm across the top two levels of the 29-storey tower on Main Beach Parade, the four-bedroom penthouse is one of the latest eight-figure residences to test the upper end of the Gold Coast apartment market.</p>

<p>Its launch comes amid continued activity at the very top of the market, following the $30 million off-the-plan sale of a Burleigh Heads penthouse earlier this year, which surpassed the Gold Coast's previous $24 million apartment record set in 2023.</p>

<p>The <a href="https://www.apartments.com.au/new-apartments/la-mer-main-beach-3580-main-beach-parade-main-beach-qld-4217">La Mer penthouse</a> has been designed as a private residence in the sky, with 360-degree views spanning the ocean, Broadwater, hinterland and Gold Coast skyline.</p>

<p>[smartcode_project:default project_id=95606 project_image_fid=378731]</p>

<p>All four bedrooms have ensuites, while the ocean-facing master retreat occupies around half of the upper level and includes its own lounge, private balcony, two walk-in wardrobes and an oversized ensuite with a freestanding stone bath positioned to take in the views.</p>

<p>The residence also features a kitchen designed to accommodate a private chef, a 3.6-metre island bench, expansive butler's pantry, wine cellar and integrated bar.</p>

<p>[smartcode_project:default project_id=95606 project_image_fid=378732]</p>

<p>A rooftop pool and substantial outdoor entertaining area with its own kitchen sit above the residence, while a grand staircase connects the two internal levels. The penthouse also has its own express lift.</p>

<p>OTP Group Director James Elliott, who is marketing La Mer, said the penthouse was expected to appeal to high-net-worth buyers seeking either a permanent Main Beach residence or Gold Coast holiday home.</p>

<p>“The La Mer penthouse represents exceptional value, considering its quality design, size, privacy and location, not to mention the 360-degree views capturing the beach and Gold Coast Broadwater,” Elliott said.</p>

<p>“We’re anticipating interest from high-net-worth individuals and couples seeking a residence or holiday home in the sought-after village enclave of Main Beach, taking advantage of the unprecedented growth underway in the area and neighbouring The Spit.”</p>

<p>[smartcode_project:default project_id=95606 project_image_fid=378736]</p>

<p>La Mer is being developed by developer-builder ODUS and Nazero, in partnership with funder Metrics Credit Partners.</p>

<p>ODUS Director Byron Sakha said topping out the tower had provided the opportunity to release the project's most significant residence.</p>

<p>“We’ve worked with internationally-recognised studio Sici Design on the penthouse interiors, with a focus on ensuring it isn’t luxury for luxury’s sake. Every element has been thoughtfully designed to enhance quality of life for those who call it home,” Sakha said.</p>

<p>“The views are the hero of virtually every space, but we’ve given equal attention to the fittings and finishes, so every detail exudes elegance and refinement.”</p>

<p>Sici Design Founder and Director Maria Papadopoulos said the extensive views became an integral part of the interior design rather than simply something the residence was designed around.</p>

<p>“The views weren't something we designed around, they became part of the design itself, with the true luxury of La Mer in its feeling of peace, calm and wellbeing,” Papadopoulos said.</p>

<p>“Luxury isn't defined by how something looks, but how it makes you feel, and we believe a luxurious home should be beautiful to live in, not stressful to maintain.”</p>

<p>The interiors combine Austral Dream Dolomite natural stone and travertine with timber flooring and a restrained coastal palette.</p>

<p>[smartcode_project:default project_id=95606 project_image_fid=378734]</p>

<p>Designed by Plus Studio, La Mer is one of the more boutique additions to the rapidly changing Main Beach apartment market.</p>

<p>The tower comprises just 24 full-floor, three-bedroom plus multipurpose room apartments below the two-level penthouse, giving the project a considerably lower density than many of the larger towers being developed across the Gold Coast.</p>

<p>Residents will have access to a pool and spa, gym, sauna, barbecue facilities, private sun lounges, yoga lawn and outdoor beach shower.</p>

<p>The penthouse has been released as part of the final collection of residences at La Mer, with remaining apartments priced from $4.3 million.</p>

<p>Construction is expected to complete later this year, with a fully furnished display apartment now open on level four.</p>

<p>[smartcode_project_cta:default project_id=95606]</p>


ODUS releases $18 million penthouse crowning La Mer Main Beach

<p><a href="https://www.apartments.com.au/developers/far-east-consortium">Far East Consortium</a> is preparing to commence construction on <a href="https://www.apartments.com.au/new-apartments/640-bourke-street-melbourne-640-bourke-street-melbourne-vic-3000">640 Bourke Street</a> this October, marking the next milestone for the Melbourne CBD development and its higher-end Eliza Collection.</p>

<p>Spanning levels 44 to 68 of the 68-storey <a href="https://www.apartments.com.au/architects/rothelowman">Rothelowman</a>-designed tower, the Eliza Collection has been conceived as a lower-density offering within the broader development, with only five apartments on each floor, dedicated lift access and a collection of resident spaces reserved exclusively for Eliza Collection residents.</p>

<p>The Eliza Collection forms part of Far East Consortium's broader move toward larger-format residences at 640 Bourke Street, where the number of apartments was reduced from earlier plans as apartment sizes increased.</p>

<p>[smartcode_project:default project_id=509 project_image_fid=365685]</p>

<p>"What it's meant for 640 Bourke is we've actually reduced the number of apartments. We've increased the overall size of the apartments. We don't have any studios in here, and what that does for a project is it elevates it," Far East Consortium Director of Sales and Marketing Lauren Sheldon said.</p>

<p>Rothelowman Associate Jun Chang said the design process provided an opportunity to create more generous floorplans.</p>

<p>"We were given the opportunity to be more generous. The apartments became bigger and squarer than any other apartments which had been designed in the CBD before that."</p>

<p>[smartcode_project:default project_id=509 project_image_fid=368869]</p>

<p>That thinking carries through to the Eliza Collection, where the residences have been designed around the space and functionality associated with a larger home, but positioned high above the centre of Melbourne.</p>

<p>Kitchens are equipped with Gaggenau appliances, a butler's pantry, temperature-controlled wine cabinet and sculptural pendant lighting, while engineered timber flooring, stone and porcelain finishes and custom cabinetry feature throughout the broader interiors.</p>

<p>Privacy and security are another point of distinction. Eliza Collection residents have dedicated lift access, while 640 Bourke Street will provide concierge services and secure resident parking. Short-stay accommodation, including Airbnb, will not be permitted within the development.</p>

<p>[smartcode_project:default project_id=509 project_image_fid=365689]</p>

<p>Eliza Collection residents will also have exclusive access to selected amenity spaces across levels one and three of the restored Eliza Tinsley building. These include the Salon with grand piano, an art therapy room, private dining rooms and treatment rooms.</p>

<p>They sit within more than 3,000 sqm of amenity planned across 640 Bourke Street, alongside facilities including a pool, gym, whisky lounge and further social and wellness spaces.</p>

<p>The Eliza Tinsley building itself is central to the wider project's identity. Rather than treating the existing Eliza Tinsley façade as a separate element, Rothelowman used it as a starting point for the architecture of the new tower, with the historic building to accommodate the project's gallery and lobby.</p>

<p>"It's a significant asset and wants to be celebrated and experienced by all residents every single time they go in and out of the building," Rothelowman Principal Stuart Marsland said.</p>

<p>[smartcode_project:default project_id=509 project_image_fid=368872]</p>

<p>The tower will rise behind the retained heritage building at 640 Bourke Street, placing residents within walking distance of Southern Cross Station, Flagstaff Gardens, Queen Victoria Market and the Docklands waterfront.</p>

<p>With construction scheduled to begin in October, Far East Consortium has established an onsite display gallery at 640 Bourke Street, including fully built apartments that allow the project's layouts, materials and finishes to be inspected at full scale.</p>

<p>A fully built Eliza Collection apartment is also available to view at the display suite by appointment ahead of the planned October construction commencement.</p>

<p>Eligible purchasers who buy before construction commences can secure the full available off-the-plan stamp duty savings, subject to eligibility and applicable conditions.</p>

<p>[smartcode_project_cta:default project_id=509]</p>


Far East Consortium brings Eliza Collection to 640 Bourke Street ahead of October construction start

Mortgage Rate

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<p>Australia’s biggest home loan lender, Commonwealth Bank, has scaled back the discounts offered on new home loans.</p>
<p>The <em>Australian Broker</em> website says it did so as it faces increased funding pressures.</p>
<p>The website obtained a memo sent to the broking industry in which the major lender announced it will be reducing discounts by up to 15 basis points on new Mortgage Advantage Packaged Owner Occupied and Investment Home Loan applications.</p>
<p>The bank advised it was not raising or decreasing its headline rates.</p>
<p>The changes only related to a reduction in discounts on a select number of variable rate home and investment home loan products.</p>
<p>The discounts were also being reduced by 8 basis points on its Three-Year Special Rate Saver, Extra Life of Loan and Extra Introductory Rate products for new owner occupied and investment home loan applications. </p>
<p>The reduced discount rates apply to new home loan applications for these products from 26 August 2016.</p>
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jchancellor-FAypfDUnLy

CommBank cuts is discount mortgage offerings

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<p>GUEST OBSERVER</p>
<p>If you’ve owned your home for a number of years, it’s likely you’ve racked up some impressive gains in home equity – that’s the difference between the property’s market value and the balance of your home loan.</p>
<p>This means there’s a whole stash of cash just waiting to be tapped into either through a home loan refinance or a loan top up. While it’s tempting to spend up big, treating your home as an ATM isn’t healthy. We share some smart, sensible, and downright frivolous ways to use your home equity.</p>
<p><strong>Smart moves</strong></p>
<p>Use equity to renovate your existing home – Quality home improvements can add to your lifestyle; save on the cost and hassle of relocating to a new home, and best of all the renovations can increase the market value of your home.</p>
<p>Invest in a rental property – Using your home to grow wealth? Now that’s a smart move. Tapping into equity may even mean you don’t need to save for a cash deposit.</p>
<p><strong>Sensible – with strings attached</strong></p>
<p>Consolidating personal debt – If you’re juggling a few credit cards, a personal loan and maybe a car loan, consolidating the lot into your home loan can streamline your finances. It means just one monthly repayment to manage, and as home loans usually have a lower rate, you’ll save on interest costs.</p>
<p>But – and it’s a big but – you could be turning short term debts into a long term debt and end up paying more than necessary in long term interest. Use the savings on monthly repayments to make extra home loan repayments and keep a lid on interest costs while you whittle away the loan.</p>
<p>ME’s 10<sup>th</sup> biannual <em>Household Financial Comfort Report </em>shows that more households ‘paying off or owning a home’ reported to be drawing on their home equity to ‘pay off debt’ and ‘to make ends meet’ during the first half of 2016.</p>
<p><strong>Think twice</strong> </p>
<p>Here today, gone tomorrow purchases – using home equity to fund a round the world vacation, a new designer wardrobe, or any purchase with no real lasting value calls for some serious soul searching. Not only will you be whittling away precious equity, you are adding the cost of long term interest to the purchases.  </p>
<p>The time may come when you really need that equity for must-haves rather than luxuries. So think twice and weigh up other finance options like, say, a personal loan, which will allow you to pay off big ticket purchases buys in just a few years.</p>
<p><em><span lang="EN-US">Patrick Nolan is head of home loans for industry super fund-owned bank ME. You can contact Patrick <a href="https://www.mebank.com.au/personal/home-loans/home-loans/" target="_blank">here</a>.</span></em> </p>
<p> </p>
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The good, the bad and the ugly of dipping into home equity: Patrick Nolan

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<p><img src="https://counter.theconversation.edu.au/content/63512/count.gif" alt="The Conversation" width="1" height="1"></p>
<p>GUEST OBSERVER</p>
<p>The big, but completely unsurprising, news this week was the Reserve Bank of Australia cutting the cash rate to an historic low 1.50 percent.</p>
<p>As Vital Signs has been saying for some time, this month was a likely candidate for a cut, once second-quarter inflation was confirmed to be disturbingly low – as it was last week.</p>
<p><a href="/images/2016/08/05/Screen%20Shot%202016-08-05%20at%208.48.39%20AM.png" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/08/05/Screen%20Shot%202016-08-05%20at%208.48.39%20AM.png" alt=""></p>
<p>Australia is faced with extremely low inflation, low effective growth, a squishy labour market, and prudential regulation measures enacted last year partially reigning in the housing market. Given this, it was almost inevitable Glenn Stevens would engineer another cut.</p>
<p>But there were some other figures of note this week. Australian retail trade rose 0.1 percent in June, compared to market expectations of 0.3 percent – further underlining the weak domestic economy.</p>
<p>Adding to that story of gloom, private sector building approvals were down in June, both in absolute terms and relative to expectations. House approvals fell 2.3 percent implying a 5.9 percent drop compared to a year earlier. Apartment approvals fell 2.4 percent, implying a 4.8 percent drop year-on-year.</p>
<p>Chinese manufacturing data was mixed – or perhaps just confusing – with the official Purchasing Managers' Index (PMI) down to 49.9, from 50.0 the month before. Recall that 50 is the break even between expansion and contraction. Meanwhile, the private Caixin index came in at 50.6 in July, up from 48.6 in June. This was the first jump above 50 since February 2015.</p>
<p>Why the difference? The likely answer is that the official government PMI is more relevant for large, state-owned enterprises, while the Caixin index is a better gauge of smaller and medium-size companies.</p>
<p>In the US, payroll processing firm ADP’s latest data revealed a 179,000 increase in non-farm payrolls in July. This was essentially confirmation of the official Bureau of Labor Statistics figures (though on a slightly different scale) of strong job creation in the US. This is further evidence of the likelihood of a rise in official rates by the Fed in the next month or two.</p>
<p>Now, back to Australian interest rates. Lower rates only have a potential stimulatory effect if they are passed on to borrowers by (largely) the big 4 banks. About half of Tuesday’s cut was passed on – with the rest “kept” for bank shareholders.</p>
<p>On Thursday afternoon, Prime Minister Malcolm Turnbull and Treasurer Scott Morrison announced at a press conference that the big 4 banks would have to front the House Economics Committee annually to “explain” their interest rate decisions.</p>
<p>Populist nonsense? Interventionist joke? Meaningless charade? Those are all phrases that come to mind. Turnbull grinned like a Cheshire cat as he described it as a “great opportunity” for the banks. Ho, ho, ho.</p>
<p>I’m no apologist for the banks, but they do have a legitimate argument that their funding costs have been rising. The US money market funds are much harder to tap as they have become significantly more conservative after the Primary Reserve Fund “broke the buck<a href="https://www.investopedia.com/terms/b/broke-the-buck.asp">”</a> during the financial crisis. Deposits now make up about 60% of bank funding, compared to 40 percent in 2007-08 – and those rates have been rising.</p>
<p>Nonetheless, the banks do have a good deal of market power. It’s legitimate for them to use that, unless they are violating competition law. That’s a matter for the Australian Competition and Consumer Commission, not the House Economics Committee.</p>
<p>One final note. To all those people who keep saying “rates have been cut a lot and it hasn’t done any good”: please search my name and the word “counterfactual”.</p>
<p><em><span class="fn author-name">Richard Holden is p</span>rofessor of economics, UNSW Australia and author for The Conversation. He can be contacted <a href="https://theconversation.com/profiles/richard-holden-118107" target="_blank">here</a>.</em></p>
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Vital signs: only the banks know

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<p>SPONSORED POST</p>
<p>Property owners can claim a tax deduction for interest paid on a loan used to buy an investment property, but not on a mortgage used to buy their own home.</p>
<p>Boutique lender CSC Home Loans has developed Mortgage Down to help investors maximise tax deductions and minimise non-tax deductable interest by optimising the way their property debt is structured.</p>
<p>“Mortgage Down allows the property investor to pay off their home loan sooner and create equity in their own home faster. This gives the property owner more opportunity to create additional investments,” says Mortgage Down group marketing director Venn Williams.</p>
<p>Under a tax ruling from the Australian Taxation Office PR2015/2, the loan structure allows investors to reduce the interest rate on their non-deductable principal and interest home loan and increase the interest rate on their deductable interest-only investment loan.</p>
<p>“If you own your own home and have an investment property, then you could qualify for a home loan rate beginning with a 2,” Williams says.</p>
<p>The average interest rate for a standard variable owner-occupied mortgage from a bank was 5.4 percent in May 2016, according to the Reserve Bank of Australia.</p>
<p>A 1 percent reduction in the interest rate charged on a $250,000 home loan taken over 25 years would save the borrower $43,468 over loan’s term and cut the time to repay the debt by 4 years. A 2 percent drop in the rate would save $84,640 and let the borrower repay the loan 6 and a half years sooner.</p>
<p>The higher interest rate charged on the investment loan means the investor may be able to claim a larger tax deduction.</p>
<p>The innovative loan structure is available to Australian residents who own their home and either already have an investment property or are about to buy one.</p>
<p>The product offers other features such as an o set account, redraw facilities and debit cards. Usual borrowing conditions apply. </p>
<p><span>To download a free ebook on new financial year taxation tips for property investors,</span><a href="http://propertyobserver.com.au/forward-planning/tools/ebooks-and-webinars/55208-new-financial-year-tax-planning-tips-for-property-investors" target="_blank"> click here</a><span>.</span></p>
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Optimise the way your property debt is structured

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<p><span>The tougher lending criteria being imposed by the major banks, particularly in regards to living expenses, is silly and irrelevant, the former CEO of the Australian Institute of Professional Brokers has argued.</span></p>
<p><span>The tougher rules are hurting prime borrowers, said founder and owner of Melbourne-based Universal Wealth Management Maria Rigoni, speaking to MPA's sister publication Australian Broker.</span></p>
<p><span>“Lending criteria is getting harder and harder so really good, credit-worthy borrowers are being declined loans on the most simple and silly of reasons.</span></p>
<p><span>“What is happening is people are finding it harder and harder to borrow or refinance. You might have all these cheaper options out there, but with the way that [the banks] are squeezing down how much people can borrow, consumers are being stuck in high interest rate loans and you can’t move.”<br><br> Rigoni’s argument comes just after ANZ announced in a note to mortgage brokers that it would change the way minimum living expenses were calculated when it decides on home loans.</span></p>
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Broker slams major banks over lending criteria

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<p>Home loan consumers should be cautious of “phantom rates”, the head of major mortgage group 1300HomeLoan, John Kolenda has warned.</p>
<p>He has questioned the sustainability of some rate offers as lenders have been unfairly baiting consumers with “aggressively priced” mortgage products which turn out not to be true. </p>
<p>“Some lenders are aggressively pricing products to lure customers and boost their market share and then when they are signed up they increase their mortgage rates independently of any interest rate decisions by the Reserve Bank of Australia (RBA),” Kolenda said.<br><br>Kolenda says lenders are blaming cost of funding issues and changes to regulations for non-delivery. <br><br>“We also had the out of cycle raises on home loan rates in response to rising funding costs and the additional costs coming in for the additional compliance and regulatory increase on reserves that the banks will have to have in place by end of June this year.<br><br>“But the bank wholesale funding costs did not rise enough to warrant the types of rate increases they imposed.<br><br>“I think there was an element of a profit grab done under the umbrella of higher regulatory and funding costs at the time when those decisions were made.”<br><br>Kolenda pointed to the bond market where NAB recently estimated rates over the bank bill swap rate (BBSW) had increased by at least 30 basis points.<br><br>“This again raises serious concerns as to how lenders will react when it comes to their existing customers, especially when lenders are offering rates as low as 3.69 per cent for new business,” he said.<br><br>“We question the sustainability of that rate offer with the back drop of current market conditions.”</p>
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John Kolenda warns on phantom mortgage home loan rates

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<p><span>Fixed-rate mortgages accounted for more than one in every five home loans in February, despite a small drop in demand, Mortgage Choice advised.</span></p>
<p><span>Fixed-rate home loans accounted for 22.28% of all loans written throughout February – just 1.34 percent down from the 23.62 percent from the previous month, according to the mortgage broker’s latest national home loan approval data. Mortgage Choice based its research on new borrowers who sourced a loan through it in February.</span></p>
<p><span>Chief executive John Flavell said while fixed rates saw a small drop in demand throughout February, they continue to prove a popular home loan product choice for many Australians.</span></p>
<p><span>“We are still seeing quite a bit of volatility in the interest rate market, causing many borrowers to opt for the security of a fixed rate home loan,” he said, while adding that going forward, he wouldn’t be surprised to see demand for fixed rate products taper off.</span></p>
<p><span>“Given the Reserve Bank of Australia has indicated that they won’t hesitate to cut rates again if the need arises, borrowers may be encouraged to take out variable rate home loans and take full advantage of the current low interest environment,” he said.</span></p>
<p><span>Across the country, demand for fixed rate products was highest in New South Wales, accounting for 28.42 percent of all home loans written in February.</span></p>
<p><span>Queensland and South Australia were not far behind, with fixed-rate demand at  23.64 percent and 17.29 percent respectively.</span></p>
<p><span>Meanwhile, Victoria and Western Australia saw lower demand for fixed rates, with only 16.92 percent and 13.23 percent of all loans written in each state respectively.</span></p>
<p><span>Overall, variable rate home loans remained the most popular with borrowers, with 77.72 percent opting for a variable rate mortgage in February.</span></p>
<p><span>“The property market may still be showing signs of volatility, but the reality is that interest rates continue to sit at all-time lows. So, regardless of whether a borrower takes on a variable or fixed rate mortgage they can rest assured that they’re securing a great deal,” Flavell said.</span></p>
<p>Property Observer looked up the best fixed rate products on <a href="https://mozo.com.au/home-loans/fixed-rate" target="_blank">www.mozo.com.au</a> and found interest rates ranging from 3.79% to 4.44% on a period of one to three years.</p>
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Fixed rate home loans dip in February, says Mortgage Choice

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<p><span style="line-height: 1.3em;">Fixed rate home loans accounted for nearly a quarter of all home loans in Australia in January, reflecting the uncertain interest rate environment, says lending broker Mortgage Choice.</span></p>
<p>Demand for fixed rate home loans has hit its highest level in more than 12 months, national home loan approval data from ASX-listed Mortgage Choice shows.</p>
<p>Fixed rate home loans accounted for 23.62% of all loans written in January, up from 19.44% in the previous month. </p>
<p>“Home loan interest rates are incredibly volatile at the moment. Consumers are unsure whether or not Australia’s lending institutions are going to raise or cut their home loan interest rates,” said Mortgage Choice chief executive officer John Flavell.</p>
<p>“With that in mind, it is not surprising to see a growing number of borrowers looking for some safety and security around their home loan repayments in the form of a fixed rate mortgage.”</p>
<p>Flavell said the last time demand for fixed rate home loans was this high was back in November 2014 when there was a similar level of complexity and confusion around interest rates. </p>
<p>“Over the coming few months, I wouldn’t be surprised to see demand for fixed rates continue to increase slightly.”</p>
<p>Queensland recorded the strongest demand for fixed rate products, with this type of loan accounting for 31.12% of all home loans written throughout January. </p>
<p>New South Wales and Western Australia were next, with 24.07% and 23.15% respectively. </p>
<p>Victoria and South Australia were at the other end of the spectrum, with fixed rate products making up 13.09% and 20.03% of all loans written in each state respectively. </p>
<p>But while demand for fixed rate products across Australia grew in January, variable rate home loans – specifically ongoing discount mortgages – remained most popular with borrowers. </p>
<p>Across Australia, 49.53% of borrowers took out an ongoing discount variable rate home loan – down from 52.07% in the previous month.</p>
<p><a href="/images/2016/02/16/Screen%20Shot%202016-02-16%20at%208.42.50%20AM.png" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/02/16/Screen%20Shot%202016-02-16%20at%208.42.50%20AM.png" alt=""> </p>
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One in four home loans are fixed: Mortgage Choice 

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<div>The latest AMP.NATSEM Household Debt report showed that the average household debt in Australia has increased to a new high of $245,000, continuing a prolonged run-up which has seen the average debt per household increase by a factor four since 1988, up from $60,000.</div>
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<div>While the bulk of the rise in mortgage debt has been driven by 30 to 50 year olds, the over 65s cohort also accounts for a fair proportion of the increase in household debt, with more Australians than ever before taking liabilities into retirement.</div>
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<div>Despite this, the latest Australian National Accounts implied that interest serviceability has continued to become easier.</div>
<div> </div>
<div>There are a thousand possible ways to measure this, nine of which is satisfactory: the blue points on the chart below denote interest paid on dwellings as a percentage of total employee compensation minus income tax, while the red points show total interest paid inclusive of consumer debt (excluding unincorporated enterprises) as a percentage of gross household income.</div>
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<div><a href="/images/2015/12/14/Interest.jpg" target="_blank">Click to enlarge</a></div>
<div><img src="/images/2015/12/14/Interest.jpg" alt=""></div>
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<div>You could spend forever debating what should or should not be included in household income (imputed interest on dwellings, benefits receivable etc.) or backed out of gross household income (e.g. other taxes, transfers, insurance premiums etc.) but the results tend to be broadly similar. </div>
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<div>Of course the results generally appear to be "too low" due to the significant number of debt free households. The important thing to note is the trend, which shows that while the mining boom was in full swing the aggregate mortgage interest repayment burden was tending towards excruciating levels by September 2008 (when the official cash rate was still as high as 7 per cent). but since that time serviceability has become relatively speaking very easy.</div>
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<div><strong><span style="text-decoration: underline;">Buffers at record highs</span></strong></div>
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<div>The Reserve Bank of Australia (RBA) has noted in its Financial Stability Review that indicators of household financial stress are presently low, with households pushing ahead on repayments to the extent that aggregate mortgage buffers - as measured by balances in offset and redraw facilities - remain at around 16 per cent of outstanding loan balances, or the equivalent of well over two years of scheduled repayments at current interest rates. </div>
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<div><a href="/images/2015/12/14/Buffers.gif" target="_blank">Click to enlarge</a></div>
<div><img src="/images/2015/12/14/Buffers.gif" alt=""></div>
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<div>Loan arrears and mortage delinquencies data are also tracking at historically low levels, with favourable delinquency developments having cascaded lower since the 2008 book year. </div>
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<div>A crude comparison the aggregate interest paid to the total stock of outstanding housing credit implies that the average mortgage rate is well under 5 per cent, suggesting in turn that Australians have taken advantage of the very generous fixed rates available through 2015.</div>
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<strong><span style="text-decoration: underline;">The outlook</span></strong><br><br><div>The first chart above shows the sensitivity of household finances, and especially mortgage repayments, to the unpredictable changes in interest rates. Mortgage repayments are on average clearly very affordable now, but may not be so if interest rates rise sharply.</div>
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<div>The AMP.NATSEM report found that the highest typical debt repayment burdens are to be found in the outer suburbs of our capital cities.</div>
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<div>If interest rates were to rise by 2.5 percentage points - essentially the equivalent of ten interest rate hikes - then the most indebted households could see mortgage repayments rise from 42 per cent of household income to a stress-inducing 58 per cent, while perhaps unsurprisingly the most indebted low income households would be the hardest hit of all.</div>
<div> </div>
<div>An increase in interest rates of 2.5 percentage points would also see repayments for the typical first homebuyer rising from 21 per cent to 30 per cent of household income, or a shade over an extra $8,000 per year.</div>
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<div>There are few indications that the official cash rate is set to move materially higher any time soon, although shifts in capital requirements and funding costs may be another matter. </div>
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<div><strong><span style="text-decoration: underline;">Fragile markets</span></strong></div>
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<div>Unemployment rates have generally been trending down since January 2015, although unemployment rates in Western Australia and the Australian Capital Territory are in an uptrend, and the housing market in Darwin looks exceptionally fragile.</div>
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<div><a href="/images/2015/12/14/UERATE.jpg" target="_blank">Click to enlarge</a></div>
<div><img src="/images/2015/12/14/UERATE.jpg" alt=""></div>
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<div>Although household financial stress is currently low, it seems likely that there will be some vulnerable housing markets in 2016, which may include;</div>
<div> </div>
<div>-resources regions and markets, with the terms of trade crunch likely to result in multiple mass lay-offs to add to the winding down of capital investment;</div>
<div> </div>
<div>-suburbs and sub-regions which are experiencing extensive over-building of apartments. particularly inner city high-rise stock, and those areas with already elevated and rising vacancy rates; </div>
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<div>-off-the-plan developments which will be adversely impacted by APRA's tougher deposit measures; and</div>
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<div>-outer suburban fringe locations in Sydney which saw a massive spike in investor activity and rapid price growth in 2015.</div>
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<div>I'd include a generic entry here for "mining towns", but many have been so utterly smashed already, leading to investor defaults and bankruptcies, since not only were prices unsustainable, so too were rents, and even tenancies. </div>
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<div><strong><span style="text-decoration: underline;">Auctions</span></strong></div>
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<div>Sydney's preliminary auction clearance rate rebounded a bit to 55.2 per cent this week, with outer suburban markets looking particularly dormant, The strongest auction market was a resurgent inner west, with a strong preliminary auction clearance rate of 74.6 per cent (<em>CoreLogic-RP Data</em>).</div>
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<div>This month's Labour Force data showed that New South Wales economy has generated a seasonally adjusted +176,000 jobs over the past year, for an outrageous employment growth rate of +4.9 per cent (trend +160,000 jobs, or +4.4 per cent). The Detailed Labour Force figures, which provide more colour by city, region and industry will be released on Thursday. So stay tuned for that and more this week. </div>
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<p><span><em>PETE WARGENT is the co-founder of <a href="https://allenwargent.com/" target="_blank" rel="nofollow">AllenWargent</a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank" rel="nofollow">blogger</a>.</em><br></span></p>
<p><em>His latest book is <a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx" target="_blank" rel="nofollow">Four Green Houses and a Red Hotel</a>.</em></p>
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Record household debt of $245,000: Pete Wargent

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<p><span>GUEST OBSERVER</span></p>
<p><span>The Big 4 banks have no excuse to hold onto any rate cut made today and customers should be prepared to ditch and switch if the banks hold out.</span></p>
<p><span>Mozo data shows that the average Big 4 Bank standard variable rate of 5.61% is now 0.52 basis points higher than the market average of 5.09%. </span></p>
<p><span>Last month’s out of cycle rate hikes will already cost big bank home loan customers an extra $372 in interest repayments annually . </span></p>
<p><span>Any moves by the Big 4 to hold onto cuts today will be deeply unpopular, especially in light of the windfall profits announced by NAB and ANZ last week.</span></p>
<p><span style="line-height: 1.3em;">Last month's rate hikes sparked a 25% increase in refinancing activity </span><span style="line-height: 1.3em;">on </span><span style="line-height: 1.3em;">Mozo.com.au </span><span style="line-height: 1.3em;">and we'd expect to see the big banks lose more customers if they hold out today.</span></p>
<p><span>Since Westpac hiked rates on 14 October, just 9 lenders have followed suit, but in this instance no news is not necessarily good news for borrowers. </span></p>
<p><span>Regardless of which way today’s Reserve Bank decision goes, Mozo is predicting a second wave of home loan rate changes as lenders take the opportunity to make their move.</span></p>
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<span style="line-height: 1.3em;">Intense competition among online and non-bank lenders means we could see them pass on the full 25 basis point discount to really increase their market lead.</span>
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<p><span>Seventeen lenders now have interest rates below 4%, see graph below: </span></p>
<p><a href="/images/2015/11/Screen%20Shot%202015-11-03%20at%2010.58.35%20AM.png" target="_blank"><span>Click to enlarge</span></a></p>
<p><span><img src="/images/2015/11/Screen%20Shot%202015-11-03%20at%2010.58.35%20AM.png" alt="" width="832" height="521"></span></p>
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<p><a href="/images/2015/11/Screen%20Shot%202015-11-03%20at%2010.59.27%20AM.png" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2015/11/Screen%20Shot%202015-11-03%20at%2010.59.27%20AM.png" alt="" width="762" height="317"></p>
<p> </p>
<p><em>Kirsty Lamont is marketing director of <a href="https://mozo.com.au/" target="_blank">Mozo</a>.</em></p>
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