Growing national developer Time &amp; Place has announced its fifth new apartment development.

With two projects in Manly and two upcoming in Surry Hills and Potts Point, the developer, which expanded beyond Melbourne just a few years ago, is now heading to Mosman. It is planning 53 new apartments on Redan Street.

The 3,233 sqm site, spanning <a href="https://www.apartments.com.au/new-apartments/40-48-redan-street-mosman-nsw-2088">40–48 Redan Street</a> with frontage to Redan Lane, is located just under 400 metres from Spit Junction Town Centre. It is reported the developer paid around $100 million for the five-site amalgamation.

Time &amp; Place, founded by Tim Price and backed by James Packer’s private investment firm NPACT, has submitted the project as a State Significant Development through the NSW Government’s Housing Delivery Authority pathway.

Of the 53 apartments, 42 will be released to the market, with the remaining 11 allocated as affordable housing in line with NSW Government requirements.

fjc Studio has designed the building. In its Design Report, the architect said the diverse mix of dwelling types and sizes, including 11 two-bedroom affordable housing units, 40 three-bedroom apartments, and two four-bedroom residences, will support a broad demographic, including families, downsizers, and key workers.

The development will rise to nine levels, a height encouraged by the NSW Government due to the site’s proximity to Spit Junction, which has been identified as a low- to mid-rise centre. Developments within a certain proximity to these centres are permitted increased height.

fjc said the project “achieves an appropriate density outcome for its setting by balancing increased housing supply with strong amenity performance,” adding that it “makes a measurable contribution to NSW housing supply targets through the delivery of additional dwellings and dedicated affordable housing.”

The new development will replace five existing two-storey homes.

“By aligning with the objectives of the Housing SEPP and applying careful architectural and urban design principles, the development provides high-quality residential accommodation that integrates sensitively within its established Mosman context and delivers enduring benefits to residents and the wider community.”

Mosman has become increasingly popular with developers in recent years.

Developer Abadeen has been particularly active, with Mosman Residences currently on the market and under construction on Clifford Street. It also has an upcoming Burran Avenue project, comprising just three apartments on the Balmoral Slopes, and recently secured the Midas and Honeysuckle nursery site on Military Road.

Prosker Property has a project on Redan Lane, just a few doors down from Time &amp; Place’s proposed development.

Developers including Toohey Miller, DARE Property Group, and WINIM also have projects underway in the area. In 2024, a five-year target was set for the Mosman LGA to increase housing supply by 500 dwellings by 2029.

Time &amp; Place entered the Sydney market with Two Tides, its under construction Manly development. Given its sales success, it has secured another development in the area, more boutique, facing the beach on North Steyne.

They are hoping to launch their redevelopment of The Chimes in Potts Point this year, and next year will look to take to market Marlborough House, an adaptive re-use of the landmark David Jones warehouse in Surry Hills.

Joel Robinson

Time & Place to take on Mosman apartment market

Brunswick’s civic heart continues to consolidate around the Merri-bek Arts and Culture Precinct, where a growing cluster of cultural institutions, recreation facilities, and public infrastructure has created one of the inner north’s most defined community hubs.&nbsp;

Within this evolving precinct, <a href="https://www.apartments.com.au/new-apartments/saxon-street-by-milieu-brunswick-31-saxon-street-brunswick-vic-3056">Saxon Street by Milieu</a> introduces new housing directly alongside the civic anchors that shape daily life in the suburb.

At 31 Saxon Street, the project sits immediately beside Brunswick Baths and within moments of Brunswick Library and Town Hall, longstanding institutions that support both community services and everyday amenity.&nbsp;

[smartcode_project:default project_id=136434 project_image_fid=348840]

Next door, the newly delivered Balam Balam Place arts precinct has emerged as a central piece of Merri-bek Council’s cultural strategy, bringing together creative studios, exhibition spaces, maternal and child health services, and community programming in a purpose-built civic facility. Together, these destinations have reinforced the surrounding blocks as a focal point for public life in Brunswick.

This part of <a href="https://www.apartments.com.au/developments/brunswick-vic-3056">Brunswick</a> forms a key pocket within the suburb’s designated Major Activity Centre, where long-term planning has prioritised walkability, civic investment, and increased housing supply close to transport and services. The surrounding street network reflects that strategy, with compact blocks, established retail corridors and active transport links supporting a lifestyle that is largely navigable on foot.

Within a few minutes’ walk, Sydney Road delivers one of Melbourne’s most recognisable streets, known for its long-running mix of independent retailers, international dining venues and everyday convenience. Tram routes along Sydney Road provide frequent connections south toward the CBD and north through Brunswick and Coburg, while Jewell Station on the Upfield line sits within roughly a ten-minute walk, offering direct train access into the city.

[smartcode_project:default project_id=136434 project_image_fid=348839]

Active transport also plays a significant role locally. The nearby Upfield Bike Path forms a key north–south cycling corridor linking Brunswick through Parkville and into the central city, reinforcing the area’s reputation as one of Melbourne’s most accessible inner-urban neighbourhoods for cyclists and pedestrians alike.

The surrounding civic cluster extends beyond cultural infrastructure. Siteworks, a nearby creative hub supporting artists and community organisations, adds to the concentration of cultural activity in the immediate area. Educational institutions such as Brunswick North Primary School, Brunswick Secondary College and RMIT’s Brunswick campus are also within easy reach, contributing to the suburb’s diverse resident base spanning families, students and professionals.&nbsp;

[smartcode_project:default project_id=136434 project_image_fid=348841]

Designed by <a href="https://www.apartments.com.au/architects/jackson-clements-burrows-architects">Jackson Clements Burrows Architects</a> in collaboration with <a href="https://www.apartments.com.au/interior-designers/designoffice">DesignOffice</a> and landscape architects <a href="https://www.apartments.com.au/landscape-architect/oculus">OCULUS</a>, the nine-level building has been shaped to respond to the surrounding streetscape, with lower levels aligning to the street and upper storeys stepping back to soften its scale and improve solar access.&nbsp;

Curved balcony forms reference nearby heritage architecture, while the development’s public realm improvements include a widened footpath along Saxon Street to strengthen pedestrian connections between the precinct’s civic sites.

Sustainability also underpins the project’s approach. The building is designed to operate entirely on electric infrastructure supported by rooftop solar, with an average 7.5-star NatHERS energy rating and EV-charging readiness across the development. Shared resident amenities will include a landscaped rooftop terrace with barbecue and covered dining areas intended to encourage informal interaction between residents.

Saxon Street marks developer Milieu's fifth project in Brunswick and continues its focus on design-led infill housing across Melbourne’s inner suburbs.&nbsp;

Construction has commenced through reputable builder Manresa, who will complete the project in 2027.

[smartcode_project_cta:default project_id=136434]

Saxon Street by Milieu connects residents to Brunswick’s cultural and civic core

Within <a href="https://www.apartments.com.au/new-apartments/candela-ivanhoe-40-upper-heidelberg-road-ivanhoe-vic-3079">Candela Ivanhoe</a>, <a href="https://www.apartments.com.au/developers/salter-brothers">Salter Brothers</a>&nbsp;takes a different approach to larger residences, moving away from the constraints of a single level.

In Grand Residence 3.05, known as the Lustre, plays out across two levels, with a mezzanine configuration that is uncommon in apartment living.

Lustre is a four-bathroom residence where the layout creates a clear distinction between shared and private zones, with uninterrupted views toward the Dandenong Ranges extending the sense of openness from the main living areas.

Entry is to the primary living level, where the kitchen, dining, and living areas are arranged as one continuous space. Timber flooring runs throughout, with a fireplace set within the living zone. Full-height glazing brings in natural light, supported by double glazing that improves thermal performance.

[smartcode_project:default project_id=342 project_image_fid=357506]

The kitchen is configured as both a working and social space. A large island bench provides seating, while a walk-in pantry extends storage beyond typical apartment expectations.

Gaggenau appliances, including a 900mm gas cooktop and 600mm oven, are integrated into a layout that connects directly to the adjacent dining and living areas, and outward to the terrace. This balcony includes a built-in BBQ, reinforcing the apartment’s capacity to accommodate larger gatherings without compromising internal space.

A dedicated laundry room, powder room, and a wine cellar area sit discreetly off the main living zone, ensuring that functional requirements are resolved without encroaching on primary living areas. The master suite is also located on this level, designed as a retreat with a walk-through wardrobe and an ensuite that includes double vanities, a bath, and a dedicated dressing table.

[smartcode_project:default project_id=342 project_image_fid=357508]

The mezzanine level introduces a second layer of living, rather than simply additional bedrooms. Two large bedrooms with built-in robes are positioned alongside a central bathroom, while a secondary lounge and study area create a self-contained zone suited to children, guests, or extended family. A large storage room further supports long-term usability, addressing a common shortfall in apartment design.

This separation of levels is central to how the residence functions day-to-day. It allows the lower level to operate as the primary entertaining and living space, while the upper level provides privacy and flexibility. The result is closer in feel to a townhouse or standalone home, but with the benefits of apartment living, security, and low maintenance.

[smartcode_project:default project_id=342 project_image_fid=364553]

Candela is close to 80 per cent complete, with Ironside delivering construction ahead of its expected October 2026 completion. The development comprises 58 residences, with a strong owner-occupier profile and a mix of one to four-bedroom apartments and loft-style townhouses.

Candela has exclusive access to private amenities, including a residential lounge and rooftop terrace. A charming café and a lifestyle wellness centre are located on the ground level, designed to foster community connection and extend the living experience beyond individual apartments without competing with the scale of homes like Lustre.

Candela, positioned in the heart of Ivanhoe Village, reinforces the practicality of the address. With a Walk Score of 90, residents are within immediate reach of cafés, retail, parklands, and Ivanhoe Station, while also benefiting from proximity to established schools and healthcare services.

[smartcode_project_cta:default project_id=342]

Inside Lustre: Grand Residence 3.05 at Candela Ivanhoe

<a href="https://www.apartments.com.au/developers/milieu-property">Milieu</a>’s <a href="https://www.apartments.com.au/new-apartments/elsternwick-gardens-by-milieu-8-gordon-street-elsternwick-vic-3185">Elsternwick Gardens</a> is being shaped around a simple but increasingly rare premise in apartment development: that the built environment should actively support residents’ wellbeing.&nbsp;

Located on the former ABC Studios site on Gordon Street in Melbourne’s south-east, the new neighbourhood sits on an expansive 11,740 sqm site neighbouring the heritage-listed Rippon Lea Estate, whose gardens date back more than 140 years.

Rather than positioning wellness as an add-on amenity, the development integrates it into the physical planning of the site. Architecture by <a href="https://www.apartments.com.au/architects/woods-bagot">Woods Bagot</a> is arranged across six low-rise buildings set within extensive landscaping designed by <a href="https://www.apartments.com.au/landscape-architect/oculus">OCULUS</a>, with more than 40 per cent of the land dedicated to gardens and green space. Walking trails, pocket gardens, and mature trees are threaded between buildings, creating a network of green corridors that encourage residents to move through the precinct on foot and spend more time outdoors.

[smartcode_project:default project_id=136535 project_image_fid=288420]

Milieu has intentionally framed these gardens as an extension of the neighbouring Rippon Lea Estate. More than 16,000 new plants will be introduced across the site, with species carefully selected to protect and complement the area’s ecological significance. The approach focuses on strengthening existing environmental conditions while establishing new habitats that support native wildlife, reinforcing the role of the landscape as both an active ecosystem and a defining element of daily life.

A private resident gate will provide direct access to the historic grounds during opening hours, allowing residents to move seamlessly between the development’s landscaped gardens and the estate’s expansive lawns, lakes, and mature trees. The project’s gardens will also be maintained by the same gardeners responsible for Rippon Lea, reinforcing the visual and ecological continuity between the two landscapes.

Complementing the landscape is a dedicated wellness hub designed to support everyday health and recovery. Residents will have access to a gym alongside yoga and Pilates studios, while mineral pools and infrared saunas provide spaces for relaxation and restorative wellbeing. Shared lounges, workshop spaces, and pet care facilities expand the concept of wellness beyond fitness, creating opportunities for social connection and community interaction within the precinct.

Environmental performance is another key component of the project’s wellbeing focus. Elsternwick Gardens will be entirely fossil-fuel-free, with homes designed to operate on renewable electricity rather than gas. Passive design strategies, including cross-flow ventilation, high-performance insulation, and thermally broken double glazing, are intended to maintain comfortable indoor temperatures while reducing energy demand. Solar photovoltaic systems will power common building services, while rainwater harvesting will help irrigate the extensive landscaping across the site.

[smartcode_project:default project_id=136535 project_image_fid=361030]

Milieu Founder and Managing Director Michael McCormack says the scale and setting of the project allowed the team to take a different approach to urban apartment living.

“This site represents a once-in-a-lifetime opportunity to build something truly special,” McCormack says.

“Through that process, we arrived at a design that centres on a fully realised natural landscape – a series of private, interconnected gardens that encircle the homes and extend seamlessly from Rippon Lea Estate.”

Elsternwick Gardens will comprise three residential offerings, Gordon Place, Ripponlea Terrace, and The Garden Pavilion, each designed for owner-occupiers and shaped around high-quality interior design by Woods Bagot, K.P.D.O., and Flack Studio. The first stage, Gordon Place, includes one-, two-, and three-bedroom apartments designed with a strong focus on indoor-outdoor living and sustainability.

[smartcode_project:default project_id=136535 project_image_fid=288412]

Milieu recently appointed <a href="https://www.apartments.com.au/builders/brady-constructions">Brady Constructions</a> to deliver the project, marking a key milestone for the development. The appointment follows the demolition of the former studio buildings on the Gordon Street site, with construction progressing toward the delivery of the nature-led community.

Situated between the established villages of Elsternwick and Ripponlea, the development balances its garden setting with strong urban connectivity. Residents will be within walking distance of cafés, restaurants, and local retail, while nearby train and tram connections provide quick access to Melbourne’s CBD and the beaches of Elwood and St Kilda.

With construction underway and the first residents expected to move in by early 2027, Elsternwick Gardens represents a growing shift in apartment development toward environments that prioritise wellbeing as much as density or location. By placing landscape, sustainability, and shared spaces at the centre of the design, Milieu is positioning the project as a residential neighbourhood where wellness is not just promoted, but built into the structure of everyday life.

[smartcode_project_cta:default project_id=136535]

Elsternwick Gardens' wellness-first design strategy

Brisbane-based developer <a href="https://www.apartments.com.au/developers/red-co">Red &amp; Co</a> has made a striking debut on the Gold Coast, officially unveiling its $250 million COMO development in Varsity Lakes, a lifestyle-driven residential project anchored by an extensive rooftop wellness and activity precinct.

Having recently launched to market, construction has already been fast-tracked by <a href="https://www.apartments.com.au/builders/5point-projects">5Point Projects</a>, ensuring momentum continues on what is set to become a landmark residential address for the growing Varsity Lakes community.

Located at 22 Lake Street, Varsity Lakes, <a href="https://www.apartments.com.au/new-apartments/como-varsity-lakes-22-lake-street-varsity-lakes-qld-4227">COMO</a> will comprise 156 apartments across 16 levels, comprising one-, two- and three-bedroom residences designed for modern living. However, it is the project’s rooftop amenity offering that sets COMO apart.

[smartcode_project:default project_id=135546 project_image_fid=363510]

Designed as a dedicated wellness and recreation hub, the rooftop will feature a 25-metre lap pool, fully equipped gymnasium, and multiple pickleball and paddleball courts - amenities rarely seen in boutique apartment projects.

Residents will also have access to a sauna and plunge baths, while landscaped gardens and relaxation zones will provide tranquil spaces overlooking sweeping panoramic views across the Gold Coast skyline.

The rooftop precinct has been designed to function as the social and wellness heart of the development, encouraging residents to embrace an active, balanced lifestyle within their own building.

&nbsp;

[smartcode_project:default project_id=135546 project_image_fid=363512]

Red &amp; Co director David Laverty said the amenity offering was central to the project’s design from the outset.

“Amenities were at the forefront of our decisions,” Laverty said.

“Buyers today are looking for more than just an apartment - they want a lifestyle that promotes health, connection and balance.

“The rooftop at COMO has been designed to be the epicentre of that lifestyle, with a suite of wellness and recreation facilities that are quite unique for a boutique development of this scale.”

&nbsp;

[smartcode_project:default project_id=135546 project_image_fid=363514]

Designed by <a href="https://www.apartments.com.au/architects/bda-architecture">BDA Architecture</a>, the residences prioritise liveability, featuring spacious layouts, 2.7-metre ceilings and high-quality finishes throughout.

The development sits beside Bond University, placing residents within walking distance of education, retail and dining options within the vibrant Varsity Lakes precinct, including Robina Town Centre, Varsity Lakes Train Station and a range of leading schools.

[smartcode_project:default project_id=135546 project_image_fid=363511]

Laverty said the location was a key driver behind Red &amp; Co’s decision to bring the project to the Gold Coast.

“<a href="https://www.apartments.com.au/developments/varsity-lakes-qld-4227">Varsity Lakes</a> was a clear choice for us to invest in as it’s a lifestyle hub that seamlessly blends lakeside living with urbanity,” he said.&nbsp;

“Como will capitalize on this great location, delivering a project that not only creates premium homes, but a lifestyle defined by community, wellbeing, and connectivity.”

Red &amp; Co has delivered more than 500 apartments and townhouses across 26 projects in Brisbane in recent years, with COMO marking the company’s first major Gold Coast development.

[smartcode_project_cta:default project_id=135546]

Red & Co unveils amenity-rich Como development in Varsity Lakes

Rate Cuts

Fourteen lenders have hiked their four-year fixed rates in the wake of CBA&rsquo;s controversial rate hike a month ago today.

By contrast, just 1 lender has cut its 4-year rate in this time, a sign that four-year fixed rates might not be at record lows for much longer.

RateCity.com.au research director, Sally Tindall, said record low four-year fixed rates might not be around for much longer.

<img alt="" height="314" src="https://s3-ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/pictures/article-images/rate_hikes.jpg" width="889" />

&ldquo;With the RBA&rsquo;s term funding facility now in its final stretch and the next cash rate hike firming up for early 2024, if not before, the writing is on the wall for ultra-low four- and five-year fixed rate loans,&rdquo; she said.

&ldquo;So far Australia&rsquo;s second largest bank, Westpac, has kept its four-year fixed loan at a record low of 1.89 per cent, but it&rsquo;s hard to see this rate sticking around for long.&quot;

&ldquo;The idea of paying under 2 per cent interest until 2025 is an incredibly attractive proposition for many homeowners, but that doesn&rsquo;t automatically make it a good idea. Take the time to work out what type of loan suits your finances.&quot;

&ldquo;Fixed loans come with extra restrictions such as caps on extra repayments, typically no offset account and break fees if you want to get out early.&quot;

&ldquo;One option is to split your loan so it is part fixed and part variable, which typically lets you make extra repayments on the variable portion.&quot;

&ldquo;Money might be cheap now but in a few years&rsquo; time it&rsquo;s likely to be a very different story, provided the economic recovery stays on track, particularly for anyone coming off a fixed rate,&rdquo; she said.

[smartcode_project:default project_id=29917 project_image_fid=133242]

jordan_55689

Rates on the rise following CBA's hike last month

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ANZ has today revealed it is cutting its variable package rates for new borrowers by between 0.35% and 0.90%, bringing its package rates into line for all loan amounts.  

Canstar’s research shows the average variable package rate from the major banks is 3.43% and ANZ now offers the lowest of the major banks’ variable package rate offers for owner occupiers at 2.99% (3.42% comparison rate).

The changes for owner occupiers paying principal and interest (80% LVR) are as follows: 

<img alt="" height="231" src="https://s3-ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/pictures/article-images/anz_rate_cut.jpg" width="741">

Canstar Group Executive, Financial Services, Steve Mickenbecker says “Today’s cut from ANZ is the first cut to a variable rate by one of the big four banks since September last year, as interest rate cuts have since been focused on fixed rates.”

“The decrease from ANZ is being passed on to new borrowers by way of increasing the discount applied to its standard variable rate and will not be passed on to existing borrowers. "

“ANZ now offers the lowest package rate among the major banks and it would not be surprising to see others moving down the same path."

[smartcode_project:default project_id=4939]

“ANZ is seeking to grow its share of low risk business, with the gap between lending to borrowers with equity below 20 per cent and those with greater equity widening from 5 to 20 basis points," he concluded.
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ANZ has today revealed it is cutting its variable package rates for new borrowers by between 0.35% and 0.90%

ANZ cuts variable rates by up to 0.9%

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As of today, NAB cut various fixed, investment, interest-only and package home loans by up to 15 basis points. 

The lowest rate among the affected loans is 1.89% p.a, belonging to the Choice Package Tailored Fixed loan for two years, paying principal and interest.

Another NAB loan cut to the sub 2% mark is the Tailored Fixed loan for two years (P&amp;I), with an advertised rate of 1.99% p.a (4.20% p.a. comparison rate). 

Other rate cuts are as follows:

<ul>
<li>NAB Inv Tailored Fixed - IO in arrears 2 yrs: 10 basis point cut to 2.59% p.a (4.87% p.a. comparison rate*)</li>
	<li>NAB Inv Tailored Fixed  - P&amp;I 2yrs: 15 basis point cut to 2.39% p.a (4.75% p.a. comparison rate)</li>
	<li>NAB Choice Package Inv Tailored Fixed - IO in arrears 2 yrs: 10 basis point cut to 2.49% p.a (4.60% p.a. comparison rate*)</li>
	<li>NAB Choice Package Inv Tailored Fixed - P&amp;I 2 yrs: 15 basis point cut to 2.29% p.a (4.51% p.a. comparison rate*)</li>
</ul>
These cuts by NAB follow a plethora of recent rate cuts, many of which were made to two year fixed loans.

In recent months, fellow big four banks Westpac and Commonwealth Bank had each cut at least one home loan rate to below 2% p.a - only ANZ is yet to do so. 

Recently Homestar Finance cut out the competition  offering the lowest two-year fixed interest rate in history at just 1.74% with its variable rate also the lowest at just 1.79%:

<h2>Residences where buyers could benefit from the cuts:</h2>

[smartcode_project:default project_id=600]

[smartcode_project:default project_id=29935]

[smartcode_project:default project_id=6201]
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In recent months, fellow big four banks Westpac and Commonwealth Bank had each cut at least one home loan rate to below 2% p.a with only ANZ still yet to do so

NAB drops some fixed home rates to sub 2%

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NAB has today announced cuts to fixed home loan rates with decreases of up to -0.55% for owner occupied and up to -0.15% for investment loans.

Today’s cuts position NAB’s owner occupier 3-year fixed principal and interest package rate of 1.98% (3.83% comparison rate) ahead of the other major banks’ rates for the same term.

Canstar analysis reveals that moving from the average variable rate of 3.28% to a 3-year fixed rate of 1.98% could see an owner occupier paying principal and interest on a $400,000 home loan slash their repayments by $273 each month or $9,828 over three years. However, moving to the lowest 3-year fixed rate in the market of 1.75% (comparison rate 2.22%) from NAB’s subsidiary bank, Ubank would cut repayments by $318 per month. 

<img alt="" height="502" src="https://s3-ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/pictures/article-images/nab_rates_2021_1.jpg" width="680">

Canstar Group Executive, Financial Services, Steve Mickenbecker says the move shows NAB is competing for new business by taking advantage of low cost funding.

“Interest rates continue on their downward path for homeowners and investors. NAB’s 11 basis point cut to its three year fixed rate for homeowners means that it has undercut the rates of competitors to deliver the lowest interest rate of the major banks for this popular fixed term.”

“Low cost funding has made fixed rates the playground for the big banks and while the Reserve Bank term funding facility remains available, the great deals should stay strong. Mid-year could see a small upward adjustment when the term funding is expected to be fully allocated and expire."

“It’s a great time to be thinking about fixing a rate when you can lock in for three or four years with an interest rate below 2%. Today’s move from NAB suggests competition at the low interest rate end of the market will be with us for a little longer,” Mr Mickenbecker concluded.

<img alt="" height="502" src="https://s3-ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/pictures/article-images/nab_rates_2021_2.jpg" width="683">

<h2>Properties you may like:</h2>

[smartcode_project:default project_id=22700]

[smartcode_project:default project_id=2807]
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Today’s cuts position NAB’s owner occupier 3-year fixed principal and interest package rate of 1.98% ahead of the other major banks’ rates for the same term

NAB cuts fixed rates by up to -0.55%

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EXPERT OBSERVER
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Last Wednesday we released a bulletin in which we forecast that the RBA was set to cut the overnight cash rate to 0.1%; the three year target bond rate to 0.1%; the rate on the Term Funding Facility to 0.1%; and the rate the RBA pays on Exchange Settlement balances to 0.01%. 
We also forecast that the Bank would commit to further purchases of Australian and semi government bonds in maturities between 5 and 10 years. 
We expected that the action would be announced at the next Board meeting on October 6. 
We now expect the move will come a month later at the Board meeting on November 3.
October 6 happened to be Budget Day so our expectation was that it would be another “Team Australia” initiative with both the fiscal and monetary authorities working together to address the economic crisis. 
The dimension of the crisis is best summarised by the official forecasts that the unemployment rate is set to rise to 10% by the end of the year and only be back to around 7% by the end of 2022. 
Admittedly, the choice of Budget Day to announce a series of further monetary stimulus steps was without precedent (the Budget is usually on the second Tuesday of the month and the RBA Board meeting is on the first Tuesday of the month). 
But the current crisis is without precedent as the blowout in the Budget deficit from $1 billion in 2028/19; to $85 billion in 2019/20; to an expected $230 billion in 2020/21 testifies. 
The timing of the key speech from Deputy Governor Debelle, from our perspective, pointed to the October timing. 
The speech indicated more concern from the RBA with respect to the outlook and emphasised that the Bank had more scope to ease policy. 
It came a week before the “black out” period for the October meeting and was the last scheduled speech before that “black out”. 
Our reading of the speech was that any policy changes were likely to come very soon. 
In fact he noted that it would be better to err on the side of doing too much rather than too little. 
As we discussed last week, the arguments for the RBA not changing policy near a Budget due to the need to assess the contents of the Budget did not stand up especially in a crisis period. 
For example, it is very unlikely that the RBA will lower its 7% forecast for the unemployment rate by end 2022 as a result of the contents of the Budget. 
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The “wait and see" argument also does not pass the “history test”. 
Since 2000 the RBA has changed the cash rate in May (a week before the Budget) on eight occasions. 
May has been the “most popular “month over the whole year for adjusting policy in those 20 years(ironically, second is November with seven changes). 
But certainly cutting the cash rate a week before the Budget announcement has a much less significant effect on the government’s capacity to sell the Budget than acting on Budget Day. 
A central bank moving on Budget Day could be interpreted by the government and the bank itself as diverting attention away from the Budget and complicating the government’s task in “selling” the Budget. 
The Governor himself, who has been such a strong proponent of fiscal policy, may also see the advantages of allowing space for the government to promote its Budget. 
So in the eyes of the authorities, there was probably a trade- off between a “Team Australia” moment and the government having the clear air to sell its Budget without any distractions from other policy makers. 
We saw the package of measures in March (widely described as a Team Australia policy approach) as boosting confidence through the impact of the combined policies. 
Central banks are influenced by and aim to influence expectations. 
For our “Team Australia” theme to have been viable we needed to see expectations and support for the concept build over the course of last week following Dr Debelle’s speech on Tuesday and our note on Wednesday. 
That has not happened. 
But the arguments for RBA providing a further policy boost to the economy are just as relevant. 
Consequently, we expect that the policy initiatives that we have outlined will now be introduced on November 3 giving the government adequate time to sell its Budget without any distractions coming from monetary policy. 
Bill Evans is the chief economist at Westpac.
This was first published <a href="https://westpaciq.westpac.com.au/wibiqauthoring/_uploads/file/Australia/2020/September/er20200928BullRBAPolicyChanges.pdf" target="_blank">on WestpacIQ</a>.
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bevans-rYk9SxEa4r

Westpac push RBA rate cut forecast to November

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EXPERT OBSERVER
In a speech yesterday the Deputy Governor of the Reserve Bank gave a fairly clear hint that the Board is set to cut the cash rate and other key policy rates at its October Board meeting.
The Bank is also likely to extend its objectives for bond purchases to include general support for the Australian and semi government yield curves in the five to ten year maturity range. It is likely to leave this commitment open ended at this stage.
We have discussed these issues in previous notes but did not expect the action as soon as the next Board meeting as now seems to be the case.
The theme is likely to be, as we saw in March, a Team Australia moment where the Reserve Bank is directly supporting a bold Federal Budget.
The prospect of the RBA “sitting back” to assess the Budget, which has been seen as the “norm” in previous years is not appropriate for these unique times.
We now expect the RBA to cut the overnight cash rate to 10 basis points; to adopt a 10 basis point three year bond target; and to adjust the rate on any new drawdowns of the Term Funding Facility to 10 basis points. All these rates are currently set at 25 basis points , which the Governor has generally described as the effective lower bound for the cash rate.
The Bank is also likely to reduce the rate which the Bank pays on Exchange Settlement Account balances from 10 basis points to 1 basis point.
If the banks are only earning 1 basis point on their ESA balances there will be significant incentive to purchase bonds, even if the bond is only yielding 10 basis points, or lend to the private sector.
BILL EVANS is <a href="https://westpaciq.westpac.com.au/Article/44613/14186/" target="_blank">Westpac's chief economist</a>
 
 
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Westpac now expect RBA to cut in October: Bill Evans

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In April there were 81 cuts to variable interest rates for homeowners, and 71 for investors, a clear sign of the competition heating up, according to Canstar.com.au.
For homeowners, variable rates were cut by an average of -0.20% for those paying principal and interest and -0.30% for those paying interest only, while for investors, the average cut was -0.21% for both principal and interest and interest only.
By swapping from the average variable rate of 3.49% to the lowest variable rate in the market (2.39% with a loan to property value ratio of 80%) mortgage holders can reduce their monthly repayments by $236.
Likewise, by moving from the average 3-year fixed rate of 2.68% to the lowest rate of 2.09% borrowers can pocket an extra $122 every month.
Canstar home loan expert, Steve Mickenbecker says, “with rates as low as 2.09%, you should be looking to lower your loan costs to put more money in your pocket each month or allow you to pay off the loan faster.”
“Even the big guys have come to the party, with one of the major banks offering a 2-year fixed rate at 2.19% and all of the major banks offering 3-year fixed rates down to 2.29%."
“With restrictions in some states lifting on open houses and auctions, the record low interest rates might now encourage buyers back into the market. Buyers should be bargain hunting for the right loan, not just the right property.”
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j.ballantyne1990-6AQqhLzZaK

152 rate cuts across financial institutions in April: Canstar

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EXPERT OBSERVER
This week the Reserve Bank of Australia did something everyone expected and the US Federal Reserve did something almost nobody expected. Both are revealing.
At its monthly meeting Australia’s central bank cut official interest rates by 25 basis points to a record low of 0.5%.
The Fed cut rates by 50 basis points – not at a regular meeting but “off cycle” – in response to the COVID-19 crisis, which looks likely to become a global pandemic.
The Reserve Bank of Australia’s announcement of its <a href="https://www.rba.gov.au/media-releases/2020/-20-06" target="_blank">decision</a> made it seem COVID-19 was the main, if not only, reason it was cutting rates.
In reality, the bank was always going to cut rates sooner rather than later. Australia’s economic growth remains sluggish on a per capita basis, wage growth is still hovering about 2%, unemployment is 5.3% and inflation has been below the 2-3% target band for Philip Lowe’s entire time as governor (since September 2016).
The US economy, by contrast, is doing better on all these measures. Unemployment is at its lowest rate in several decades. Wage growth is <a href="https://tradingeconomics.com/united-states/wage-growth">above</a> 3.6% on an annual basis.
That makes the US rate cut far more revealing about the Fed’s view on the economic effects of COVID-19.
The Fed’s Open Market Committee is worried. US stock markets responded to the announcement by <a href="https://www.nytimes.com/2020/03/04/business/stock-markets-today">dropping about 3%</a>, before recovering the next day.
One tool in the box
There is a narrative in Australian business circles, among certain commentators – and voiced by former treasurer Peter Costello – that the Reserve Bank’s interest rate cuts no longer do anything to spur investment and growth because rates are already so low.
Moreover, the argument goes, by cutting rates the central bank sends a negative message about the state of the Australian economy.
The hard truth is the economy is in bad shape.
Interest-rate cuts alone won’t solve the problem. But it is the tool the Reserve Bank has at its disposal. There is also good reason, as I <a href="https://theconversation.com/vital-signs-does-monetary-policy-work-any-more-126579">wrote late last year</a>, to believe the normal transmission mechanisms of monetary policy are still working.
As almost every mainstream economist has said, prior to the COVID-19 outbreak the Australian economy needed significant fiscal stimulus rather than the balanced-budget fetishism of the current Coalition government (and, to be fair, also the current Labor opposition).
We are now going to see some targeted stimulus because of COVID-19, but that won’t address the Australian economy’s pre-existing problems.
Sending a message
Curiously enough, the critique of the Reserve Bank of Australia just mentioned applies quite well to the US Federal Reserve’s decision to cut rates dramatically – and do so off-cycle.
The Fed cut its rate range from 1.5%-1.75% to 1.0%-1.25%. Doing so used up a lot of its remaining monetary policy ammunition.
And the virus crisis is not just a demand-side problem where consumers aren’t spending. It’s also a supply-side problem where businesses are unable to produce what consumers might be willing to buy. No rate cut can repair global supply chains disrupted by mass factory closures in China.
What the Fed definitely did do is send a message that the virus crisis is going to be a really big deal. That helps create its own vicious cycle of beliefs on the demand side as consumers respond to the rate cut by increasing precautionary savings and cutting back on spending.
So the Fed used some of its limited ammunition in a way unlikely to be very effective, and has freaked out markets and consumers. Oops.
A time to borrow and spend
Coming back to Australia, it will be important to unpack both the Reserve Bank’s monetary response and the federal government’s fiscal response. How much is a response to COVID-19 and how much to the underlying weakness of the Australian economy?
The real fear is that too little will be done, especially with fiscal policy, to address that underlying economic weakness.
There is some hope, now the prospect of a budget surplus has essentially evaporated, the Coalition government will be free to do what it should have been doing all along – making long-term investments in the Australian economy.
Let’s not forget the government can borrow for 10 years at 1% in nominal terms – a negative interest rate when adjusted for inflation. Debt markets will essentially pay us to borrow from them. That is a rare opportunity to make smart investments that will pay huge dividends in years to come.<img src="https://counter.theconversation.com/content/132970/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important; text-shadow: none !important;">
<a href="https://theconversation.com/profiles/richard-holden-118107">Richard Holden</a>, Professor of Economics, <a href="https://theconversation.com/institutions/unsw-1414">UNSW</a>
This article is republished from <a href="http://theconversation.com">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/vital-signs-australian-and-us-rate-cuts-underline-seriousness-of-the-coronavirus-crisis-132970">original article</a>.
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rh-YsoTT2xMuQ

Australian and US rate cuts underline seriousness of the coronavirus crisis: Richard Holden

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EXPERT OBSERVER
Westpac now expects that the Reserve Bank will delay its next cut in the cash rate to April with the final cut to 0.25% occurring in August.
Prior to the release of the surprisingly strong December Employment Report we had expected the cuts to be timed for February and June.
Our analysis of the December Board Minutes highlighted that, with the Board committing to review its assessment of the economy in February, it seemed likely that the Board would have been prepared to cut the cash rate by 0.25% at that meeting.
However we did note that, “The flow of economic data over the next six weeks will be critical to that decision, particularly the labour market; retail sales and confidence”. (Economic Bulletin, December 17).
Although the November retail sales report printed a strong 0.9% we were comfortable to attribute much of that out performance to the “Black Friday” effect expecting a sizeable pull back in retail sales in December, (to be released on 6th of February).
The Westpac-MI Consumer Sentiment Index fell by 1.8% in January to 93.4 – consistent with a down beat consumer.
However, the Employment Report was always going to be the most important data release.
Recall that in the December minutes the Board concluded that, "The Board would continue to monitor developments, including in the labour market, and was 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”.
The November report showed a tick down in the unemployment rate from 5.3% to 5.2% – Westpac expected that the December Report would see a reversion back to 5.3% but the actual report printed a further fall in the unemployment rate to 5.1%.
This fall in the unemployment rate is not unprecedented. Over the last five years there have been six occasions when the unemployment rate has fallen in back to back months by a total of 0.2% or more.
Read full report <a href="https://westpaciq.westpac.com.au/wibiqauthoring/_uploads/file/Australia/2020/January/er20200124BullDelayRBACashRate.pdf" target="_blank" data-auth="NotApplicable">'RBA delay cash rate' (PDF 74kb)</a>
BILL EVANS is the Chief Economist for Westpac
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Westpac expects RBA and USA to delay rate cuts: Bill Evans

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Westpac has made interest rate cuts of between 0.19% and 0.50% to its package fixed rate investment loans across all terms for both interest only and principal and interest repayments.
Westpac’s 0.50% interest rate cut puts its 5-year fixed rate loan for investment lending with principal and interest payments at 3.19%.
It is now the lowest rate of its kind, according to Canstar.com.au and Westpac has positioned itself in the lowest priced 10 loans in the market in all fixed investment loan categories.
<img src="https://www.urban.com.au/images/2020/1/22/Westpac%20rate%20cuts%201.JPG" alt="">
Canstar finance expert, Steve Mickenbecker said, "you know the home loan market has become competitive when a loan from a major bank has the top rate in its category."
“The investment lending market has remained sluggish, as lending to owner occupiers has shown recovery, and Westpac is clearly working to lift its share of that market.
“While Westpac’s new rates are competitive, the comparison rates are much higher, incorporating the $395 package fee and with a higher rate attaching when the loan moves to variable interest after the fixed rate period," he said.
<img src="https://www.urban.com.au/images/2020/1/22/Westpac%20rate%20cuts%202.JPG" alt="">
"Investors will have to be on their toes at the end of the fixed rate period to assure a competitive rate, he warned.
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