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

Joel Robinson

Elevated amenity anchors daily life at Aeris, Melrose Park

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

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

Virgate Property Group is preparing to commence construction of Verdé, its new apartment development in Melbourne's Arts Precinct at Southbank, following a strong run of sales that has seen more than half of the project's 173 apartments secured.

Verdé has attracted a broad mix of first home buyers, owner-occupiers upgrading from nearby inner-city suburbs and investors, with younger owner-occupier couples aged between 28 and 45 accounting for the strongest enquiry. Many are already living in Southbank, South Melbourne, Albert Park, Port Melbourne, South Yarra and the CBD.

"Verdé is located in one of the most desirable pockets of southern Melbourne," Blair Property Group Director Darren Blair, who is managing sales at Verdé, said.

"It's within walking distance of the Arts Centre, Royal Botanic Gardens, Albert Park Lake, and Southbank's restaurants and retail. It's a great lifestyle location with strong amenity and liveability, which made it a very attractive choice for the project."

[smartcode_project:default project_id=4661 project_image_fid=372549]

Virgate was already familiar with the precinct, having previously delivered the successful Domain House development in neighbouring South Melbourne. That experience gave the developer confidence to acquire the Coventry Street site and continue expanding its presence in Melbourne's inner south.

"We had been keeping an eye on the site and the broader precinct for a few months before deciding to move forward with the acquisition," Virgate said.

The project was ultimately secured in 2020 following feasibility studies, planning assessments and due diligence, with the brief centred on delivering "a high-quality, considered design that feels both refined and fit for purpose."

[smartcode_project:default project_id=4661 project_image_fid=314259]

Designed by <a href="https://www.apartments.com.au/architects/bruce-henderson-architects">Bruce Henderson Architects</a>, Verdé comprises 173 one, two and three-bedroom apartments priced from $599,000. The architecture is distinguished by a faceted glass façade that responds to both the site's outlook and Melbourne's changing light conditions.

According to Bruce Henderson Architects, the coloured glazing gives the building a distinctive identity while also providing privacy and solar shading, with residences oriented to capture views across the bay, city skyline and surrounding parklands.

Inside, <a href="https://www.apartments.com.au/interior-designers/designoffice">DesignOffice</a> has created interiors focused on natural light, efficient planning and enduring materials. Apartments feature engineered oak flooring, natural stone benchtops, floor-to-ceiling glazing and SMEG appliances, while a restrained material palette aims to complement the expansive outlooks rather than compete with them.

[smartcode_project:default project_id=4661 project_image_fid=372550]

Resident amenity has also been designed around everyday functionality rather than occasional use. Facilities include a concierge-serviced lobby, residents' lounge with fireplace, library and co-working space, gym, terrace garden with barbecue facilities, ground-floor café, and package delivery management.

The project's location continues to be one of its strongest drawcards. Positioned on Coventry Street, Verdé sits within walking distance of the National Gallery of Victoria, Arts Centre Melbourne, Royal Botanic Gardens and Albert Park Lake, while Southbank's dining precinct, Sturt Street trams and the new ANZAC Station are all nearby. The surrounding education catchment also includes Melbourne Grammar, Melbourne Girls Grammar, Mac.Robertson Girls' High School and several major university campuses.

The sales team says buyers have responded particularly well to the combination of location, design quality and long-term liveability.

"They're responding really positively to the quality of the design, premium resident amenities and the uninterrupted views. Many also appreciate the location and how connected it is to everything they need."

The ability to secure stamp duty savings before completion has also been a key factor for purchasers, alongside the opportunity to personalise finishes ahead of settlement.

With construction set to commence soon and more than half the apartments already sold, Verdé enters its next phase as one of the Arts Precinct's more established apartment developments, offering remaining buyers an opportunity to secure a residence before construction advances further. Expected completion is scheduled for late 2027.

[smartcode_project_cta:default project_id=4661]

Virgate's Verdé Southbank moves toward construction as sales fly past halfway stage

Downsizer-focused apartment development Kooyongkoot in Hawthorn has been recognised at the 2026 Better Future Melbourne Design Awards, taking home Gold and Silver awards in two categories.

<a href="https://www.apartments.com.au/new-apartments/kooyongkoot-hawthorn-1-kooyongkoot-road-hawthorn-vic-3122">Kooyongkoot</a>, currently being delivered by developer PQD and designed by Cera Stribley, received Gold in the Interior Design – Proposed category and Silver in the Architecture – Proposed category.

The dual recognition reflects the design approach behind the boutique development on prestigious Kooyongkoot Road, where the focus has been on creating homes for downsizers seeking the space, quality and functionality of a detached house within a low-rise apartment building.

Rather than maximising apartment numbers, <a href="https://www.apartments.com.au/developers/pqd">PQD</a> and <a href="https://www.apartments.com.au/architects/cera-stribley-architects">Cera Stribley</a> limited the development to just 18 residences, allowing for larger floorplans, greater privacy, generous landscaping and expansive communal spaces.&nbsp;The majority of the apartments also benefit from corner aspects, allowing for dual sources of natural light.

Now around 70 per cent complete and on track for completion in November 2026, Kooyongkoot will comprise a mix of garden residences, ter​race apartments, sub-penthouses, and is crowned by two half-floor penthouses with direct lift access and private rooftop terraces.

[smartcode_project:default project_id=102717 project_image_fid=355297]

The Silver Award for Architecture recognised the way the building responds to its prominent corner position at the ent​rance to Hawthorn's Scotch Hill precinct, one of Melbourne's most established residential neighbourhoods.

Rather than competing with the grand homes that line Kooyongkoot Road, the architectural approach focused on restraint and longevity, using curved brickwork, generous landscaping and carefully considered proportions to integrate with the existing streetscape.

"The form feels fluid and timeless, as though shaped by the landscape itself – architecture that belongs, rather than competes," said Chris Stribley, Co-Founder and Managing Principal of Cera Stribley.

The judging submission also highlighted practical innovations throughout the building, including lift cores servicing only nine homes each, a central landscaped lightcourt designed to bring daylight and ventilation into the building, and fully enclosed private storage rooms with lighting, power and shelving to better accommodate residents transitioning from larger family homes.

[smartcode_project:default project_id=102717 project_image_fid=355293]

The Gold Award for Interior Design recognised the project's focus on long-term liveability rather than display-home aesthetics.

According to the awards submission, the interiors were designed from the inside out, prioritising how homes would function over decades of daily use through generous proportions, practical storage, durable natural materials and flexible layouts.

The specification includes natural stone throughout, upgraded acoustic glazing, V-ZUG appliances and fully enclosed storage rooms, alongside an amenity offering focused on wellness, entertainment and everyday convenience.&nbsp;

Residents will have access to a gym and yoga studio, a wellness centre featuring traditional and infrared saunas, a cold therapy shower and treatment room, as well as a residents' lounge and golf simulator/cinema room for entertainment.&nbsp;Kooyongkoot has also considered the everyday convenience of its residents by offering a private carwash and pet wash facilities on site as well as dedicated parcel lockers and oversized fully enclosed storage rooms.&nbsp;

[smartcode_project:default project_id=102717 project_image_fid=355303]

The project's attention to detail has already resonated with buyers. Earlier this year, Kooyongkoot recorded one of Boroondara's highest apartment sales when an $8 million penthouse was purchased by a Melbourne CEO downsizing from a nearby family home.

"Every detail feels deliberate, from the overall design down to the smallest touches," the purchaser said.

"The level of quality and refinement is exceptional, but what really sold it was how liveable it felt... It felt like a place where everything had been considered, not just a luxury building."

[smartcode_project:default project_id=102717 project_image_fid=355304]

Sustainability also formed a key part of both award submissions. Kooyongkoot is targeting a minimum 7.5-star NatHERS rating across all residences, supported by passive design principles, high-performance glazing, EV charging infrastructure, water reuse systems and a wellness model focused on lower-energy dry facilities rather than pools and large wet areas.

Located within walking distance of Scotch College, Methodist Ladies' College, Koo​yong Lawn Tennis Club, Aubur​n Village and Camberwell Junction, Kooyongkoot continues to target owner-occupiers looking to remain in Melbourne's inner east without compromising on space or quality. A limited selection of two, three and four-bedroom residences remains available, with prices starting from $1.9 million.

[smartcode_project_cta:default project_id=102717]

Kooyongkoot wins Gold and Silver at Better Future Melbourne Design Awards

New apartment supply has become increasingly constrained across <a href="https://www.apartments.com.au/developments/parramatta-nsw-2150">Parramatta</a> in recent years, with fewer projects progressing through to completion as development conditions have become more challenging.

It makes <a href="https://www.apartments.com.au/developers/novm">NOVM</a>'s 2021-completed <a href="https://www.apartments.com.au/buildings/the-lennox-parramatta-12-phillip-street-parramatta-nsw-2150">The Lennox</a> one of the most recently completed residential towers on the Parramatta River, and among the newest apartment developments in Sydney's second CBD.

With the project largely completed before the sharp escalation in construction costs and inflation following the pandemic, The Lennox is now offering pricing that would be difficult to replicate in a comparable new development in Parramatta today, or across much of Western Sydney.

The majority of the 413 apartments at The Lennox sold before and shortly after completion. A limited release of the remaining apartments has recently been brought to market by capital partner <a href="https://www.apartments.com.au/project-marketer/equitifund-group">Equitifund</a>, with entry-level pricing from $700,000 and two-bedroom apartments available from under $1 million.

Rising above the Parramatta River at 12 Phillip Street, The Lennox comprises one, two, three and four-bedroom apartments, appealing to first home buyers, young professionals, families, downsizers and interstate investors seeking a completed apartment in one of Australia's fastest-growing economic centres.

[smartcode_project:default project_id=5743 project_image_fid=372394]

Rather than positioning Parramatta as an alternative to Sydney's CBD, Equitifund believes the city has reached a point where it stands on its own merits.

"Parramatta is no longer simply an alternative to Sydney CBD, it's becoming a destination in its own right," Equitifund Executive Chairman Greg Huxley said.

"The Lennox captures that evolution with a level of quality and amenity that's difficult to match at its price point."

[smartcode_project:default project_id=5743 project_image_fid=953]

Designed by <a href="https://www.apartments.com.au/architects/marchese-partners">Marchese Partners</a>, the tower responds directly to its riverfront setting through expansive glazing and open-plan layouts that maximise views across the Parramatta River and city skyline. Interiors feature engineered timber flooring, stone benchtops, stainless steel appliances and floor-to-ceiling glazing, while generous balconies extend the living spaces outdoors.

Marchese Partners says the project was conceived to balance high-quality apartment living with practical, long-term functionality, pairing larger, efficient floorplans with amenities more commonly associated with five-star hotels.

That emphasis continues through the resident facilities, which include a 20-metre rooftop swimming pool, fully equipped gym and wellness spaces, full-time concierge, a residents' lounge, function room, private lifts, secure basement parking and rooftop communal areas overlooking the Parramatta River. Ground-floor boardwalk retail and dining further activate the riverfront and integrate the building into the surrounding public realm.

[smartcode_project:default project_id=5743 project_image_fid=925]

Australian housing and finance group Equitifund has secured the remaining apartments, believing there are few completed apartment opportunities in Parramatta that offer the same combination of location, amenity and pricing.

Equitifund National Sales Director Ben Hamblett says buyers are increasingly recognising that premium apartment living no longer needs to come with Sydney CBD pricing.

"The Lennox is where aspirational living becomes attainable," Hamblett said.

"Wake to river and mountain views, step into Sydney's Second CBD, and arrive home to resort-calibre amenities, all without the harbour price tag."

Hamblett says owner-occupiers are also attracted by the convenience of having Westfield Parramatta, Church Street's dining precinct, Parramatta Park, Riverside Theatres, Western Sydney University and major transport connections all within walking distance.

"At The Lennox, lifestyle is not an afterthought, it is the foundation."

[smartcode_project:default project_id=5743 project_image_fid=5374]

The Lennox places residents within walking distance of Parramatta Square, Westfield Parramatta, Church Street Eat Street, Parramatta Station, the ferry wharf, Light Rail, the future Sydney Metro West, Parramatta Park and CommBank Stadium, reinforcing Parramatta's position as one of Australia's most connected metropolitan centres outside Sydney's CBD.

Equitifund says buyers visiting the display suite consistently comment on the quality of the finishes, generous floorplans, river and skyline views, and the walkability of the location. The project has attracted a broad mix of local professionals, upsizers, downsizers, buyers relocating from Sydney's inner suburbs and interstate investors seeking long-term growth opportunities.

That demand aligns with Parramatta's continued evolution as an economic powerhouse. Equitifund Research and Market Insights specialist John Bekiaris says sustained population growth, infrastructure investment and expanding employment opportunities continue to support long-term housing demand across the city.

"Parramatta has evolved from a satellite city into one of Australia's most important economic centres. Population growth, infrastructure investment and employment are all supporting sustained long-term housing demand."

[smartcode_project_cta:default project_id=5743]

The apartment price gap drawing Sydney buyers west

Rba Rate Decision

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At its meeting today, the Board reaffirmed the targets for the cash rate and the yield on 3-year Australian government bonds of 25 basis points, as well as the other elements of the package announced on 19 March 2020.
The coronavirus remains first and foremost a very major public health issue, but it is also having very significant effects on economies and financial systems around the world. Many countries are expected to experience large economic contractions as a consequence of the public health response. Large increases in unemployment are also expected. Once the virus is contained, a recovery in the global economy is expected, with the recovery supported by both the large fiscal packages and the significant easing in monetary policy that has taken place.
Financial market volatility has been historically high and many markets around the world have been dislocated. There are, however, some signs that markets are working more effectively than they were a few weeks ago. This improvement partly reflects the substantial measures undertaken by central banks.
In Australia, the yield on 3-year Australian Government bonds is now around the target level set by the Board and the functioning of the government bond markets has improved. The Bank will do what is necessary to achieve the 3-year yield target, with the target expected to remain in place until progress is being made towards the goals for full employment and inflation. Since this target was introduced, the Bank has bought around $36 billion of government bonds in secondary markets, including bonds issued by the states and territories. The Bank will continue to promote the smooth functioning of these important markets. If conditions continue to improve, though, it is likely that smaller and less frequent purchases of government bonds will be required.
The Bank has injected substantial liquidity into the financial system through its daily open market operations to support credit and maintain low funding costs in the economy. It will continue to ensure that the financial system has sufficient liquidity. Given the substantial liquidity that is already in the system and the commencement of the Term Funding Facility, the daily open market operations are likely to be on a smaller scale in the near term. Operations at longer terms will continue, but the frequency of these operations will be adjusted as necessary according to market conditions.
The first drawings under the Term Funding Facility were made yesterday. This facility will help lower funding costs across the banking system and provides an incentive for lenders to support credit to businesses, especially small and medium-sized businesses. Authorised deposit-taking institutions have access to at least $90 billion in funding under this facility.
There is considerable uncertainty about the near-term outlook for the Australian economy. Much will depend on the success of the efforts to contain the virus and how long the social distancing measures need to remain in place. A very large economic contraction is, however, expected to be recorded in the June quarter and the unemployment rate is expected to increase to its highest level for many years.
The coordinated monetary and fiscal response, together with complementary measures taken by Australia's banks, will soften the expected contraction and help ensure that the economy is well placed to recover once the health crisis has passed and restrictions are removed. These various responses are providing considerable support to Australian households and businesses through what is a very difficult period. The Australian financial system is resilient. It is well capitalised and in a strong liquidity position, with these financial buffers available to be drawn down if required to support the economy.
The Board is committed to doing what it can to support jobs, incomes and businesses as Australia deals with the coronavirus. The comprehensive policy package announced last month will also support the expected recovery. The Board will not increase the cash rate target until progress is being made towards full employment and it is confident that inflation will be sustainably within the 2–3 per cent target band.
The Board wishes the best to all Australians as our country deals with this very difficult situation.
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No change amid uncertainty: RBA Governor Philip Lowe's April 2020 statement

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The RBA have kept the cash rate on hold at a record low 0.25 per cent at its April meeting.
Mortgage Choice chief executive officer, Susan Mitchell said ttoday’s decision came as no surprise, given the RBA had explicitly ruled out going into negative interest rate territory in the minutes of its special meeting.
 “A cash rate so close to zero is unlikely to have much impact on market rates," she said.
"Going forward, the Reserve Bank will look to monitor the impact of its unconventional monetary policy measures before resorting to cutting the cash rate again.  “While there isn’t much room for home loan interest rates to fall further, a sustained period of low interest rates will support households and businesses alike as they weather the COVID-19 induced storm. Home loan interest rates are sitting at record lows and this is particularly the case with fixed rate home loan interest rates, which are extremely competitive at present. With lenders advertising fixed rates in the low “2”s, now might be a good time to lock in a low rate,” said Ms Mitchell. “The property market will be tested in the coming months, much like many other parts of the economy. While the latest CoreLogic Hedonic Home Value Index revealed that dwelling values continued to rise in March, up 0.7% nationally, it was the lowest monthly gain since the market turned in July last year. “The outlook for dwelling values is uncertain and only time will tell how a contraction in economic activity will impact dwelling values but it’s fair to say that social distancing measures will likely dampen demand in the medium-term,” concluded Ms Mitchell.
CoreLogic's head of research Eliza Owen says the record-low rate may be in place for years to come.
"No doubt the RBA will be closely monitoring the impact of record low interest rates and other stimulus measures on the economy", Owen said. 
"To date, the policy announcements from the RBA and other sectors of government have been well received with the overall level of stimulus now getting close to 17% of Australian GDP." 
Owen says housing market activity is "clearly slowing amid high uncertainty.
"It seems as if monetary and fiscal stimulus has been coordinated so as not to add excessive demand for housing.
"Under normal conditions, such a low interest rate setting would be stimulatory for housing markets, however with confidence plunging amidst an economic slowdown, we are expecting both buyer and seller activity will fall sharply over the coming months.
 
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RBA holds rates in April after emergency double cut in March

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In their emergency meeting in March where they cut the official interest rate to a record low 0.25 per cent, the RBA members noted that there was evidence lower interest rates were benefitting the community as a whole.
RBA governor Philip Lowe said the members noted the decline of 1.25 per cent over the preceding year as a substantial easing of monetary policy.
However he added that to date the lower rates had been "boosting the cash flow of businesses and the household sector as a whole, and also helping trade-exposed industries through the exchange rate channel."
Lowe said that members acknowledged that very low interest rates have uneven effects and negative consequences for some people – especially those relying on interest income – but the evidence was that lower interest rates were benefiting the community as a whole.
"Members supported the proposal and agreed that the cash rate would not be increased from its lower level until progress is made towards full emplyment and there is confidence that inflation will be substantially within the two to three per cent target range", Lowe noted.
The RBA have had a steadfast unemployment rate target of 4.5 per cent. The latest data has it pegged at 5.1 per cent, however that was calculated before the recent COVID-19 job losses.
Some economists are tipping the unemployment rate to reach over 11 per cent, so don't expect a rate hike anytime soon.
Lowe said it was "considered likely that the cash rate would remain at a very low level for an extended period", while he further ruled out any change of rates going in to negative.
To read the full RBA minutes, click here.
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Evidence lower interest rates are benefiting the community: RBA's March emergency meeting minutes

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MARCH EMERGENCY RBA MINUTES
<h2 id="recent-developments">Recent Developments</h2>
In a special meeting convened to consider options for monetary policy responses to the economic effects of the novel coronavirus disease (COVID-19), members commenced their discussion with a review of recent developments. The outbreak was noted as first and foremost a public health issue. Many countries were shutting their borders and placing restrictions on businesses and individuals to slow the spread of COVID-19. This was causing very significant disruption to economies around the world.
Financial markets had been very volatile and there had been sharp falls in the prices of risky assets as market participants struggled to price the risks, given their unprecedented nature. Equity prices in the advanced economies, including in Australia, had fallen by around 30 per cent. The falls had been broadly based across sectors, although equity prices in the energy and tourism sectors had fallen particularly sharply. The equity prices of banks had also fallen significantly, although it was recognised that the capital and liquidity positions of banks had been strengthened over the prior decade.
Liquidity in credit and money markets was very poor and the market for corporate bond issuance was essentially closed to all but the very highest quality borrowers. Credit spreads in corporate bond markets had widened substantially, particularly for high-yield bonds, increasing funding costs for corporations. Members noted that any further widening in spreads would translate directly into higher borrowing costs, since government bond yields had very little further room to fall. Yields in money markets had also risen, although banks and highly rated non-financial corporations were still able to access these markets. The Australian banks had strong funding positions and did not need to source additional funding from bond markets in the near term.
Government bond markets had displayed signs of dysfunction, with many participants seeking to liquidate their portfolios. This had also affected traditionally safe and liquid markets, such as the US Treasury market. The increase in yields and volatility partly reflected the unwinding of highly leveraged positions, and the constrained ability of dealers to absorb additional bonds after having reached leverage and capital constraints. The dysfunction in the US Treasury market had spread widely, given its important role as a pricing benchmark for the global financial system.
In foreign exchange markets, large repatriation flows had supported the yen, and the US dollar had appreciated against most other currencies. Members observed that the Australian dollar had depreciated against the US dollar by around 10 per cent over the preceding month, to be at its lowest level since 2002. Among other advanced economies, the exchange rates of commodity exporters such as Norway, Canada and New Zealand had also depreciated notably. Capital flight had been evident across emerging markets, with exchange rates depreciating against the US dollar and sovereign bond yields moving sharply higher.
In response to these developments, a number of major central banks had made sizable interest rate reductions at unscheduled meetings. The Federal Reserve had cut its policy rate by 100 basis points after an earlier cut of 50 basis points. The Federal Reserve, the Bank of England and the Reserve Bank of New Zealand had each lowered policy rates to ¼ per cent, and interest rates were lower than this in Japan and Europe.
Central banks had expanded their standard open market operations to provide short-term liquidity to financial institutions, including by lengthening the terms on which liquidity is extended. To support Australian financial markets, the Bank had injected liquidity through its open market operations, increasing Exchange Settlement (ES) balances from around $2.5 billion to $14 billion. The Bank had also announced that it would be conducting daily operations at one- and three-month terms and regular repurchase operations on terms of six months or longer. In a number of jurisdictions, including in Australia, central banks had stated that they would purchase government bonds in secondary markets to support their smooth functioning.
Members noted that many central banks were introducing additional measures to support market functioning and promote the resumption of activity in corporate credit markets. The Federal Reserve had introduced a commercial paper funding facility to provide a backstop for the market. The Bank of England, acting as agent for the UK Treasury, had announced that it would purchase unlimited amounts of commercial paper issued by non-financial firms with an investment grade credit rating. The Bank of England and the European Central Bank had expanded funding schemes to encourage banks to lend to businesses. There had also been an easing of bank regulatory requirements in many countries.
The Federal Reserve, in conjunction with a number of other central banks, had also lowered the cost and extended the terms of foreign currency borrowing through foreign exchange swap lines. This was designed to alleviate the very high demand for US dollars from non-US entities that had issued debt in US dollars that needed to be refinanced.
Members discussed how these developments and the rapidly changing situation were affecting the outlook for economic activity. The immediate outlook for the Australian and global economies was highly uncertain, but members viewed it as very likely that most countries would experience a very sharp contraction in economic activity. Members considered the information available for the Chinese economy, which indicated that there had been a large contraction in economic activity in the March quarter. Some indicators, such as coal usage, suggested that economic activity in China was beginning to pick up, although it was too early to assess the extent to which activity would recover in the June quarter.
While it was not possible to provide an updated set of forecasts for the economy given the fluidity of the situation, it was likely that Australia would experience a very material contraction in economic activity, which would spread across the March and June quarters and potentially longer. The size of the fall in economic activity would depend on the extent of the social distancing requirements, and potential lockdowns, put in place to contain the virus. The composition of consumption was changing considerably, with spending at supermarkets and pharmacies increasing substantially, while spending on hospitality and other services was falling sharply. Many service industries were being severely disrupted, with significant spillovers across the economy. There were likely to be significant job losses over the months ahead, although the extent of this would depend on the capacity of businesses to retain employees during this period. At the same time, some industries were employing more workers, particularly those involved in the retail supply chain and delivering goods. In time, following containment of COVID-19, the economy is expected to recover, but the timing of this was uncertain.
<h2 id="considerations-for-monetary-policy">Considerations for Monetary Policy</h2>
Following their review of recent developments in financial markets and the implications for economic activity, members turned to how monetary policy could most effectively support the Australian economy through the challenging period that lay ahead.
Members acknowledged that the primary response to the COVID-19 outbreak was to manage people's health, but that other arms of policy, including monetary and fiscal policy, would play an important role in reducing the economic and financial disruption. Members noted the measures that the Bank had taken to support the Australian economy and operation of financial markets over the days preceding the meeting.
The Governor proposed a package of policy measures, which together would assist in supporting the Australian economy through the period ahead. The focus of the package was on ensuring that funding costs were low across the entire economy and that credit remained available to businesses and households. This would help build the necessary bridge to the economic recovery and support that recovery once the COVID-19 outbreak is contained.
The elements of the package were discussed in turn.
1. A further reduction in the cash rate target to 0.25 per cent.
The proposed cut in the cash rate to 0.25 per cent would bring the cumulative decline over the preceding year to 1¼ percentage points. Members noted that this would be a substantial easing of monetary policy, which, to date, had been boosting the cash flow of businesses and the household sector as a whole and also helping trade-exposed industries through the exchange rate channel. Members acknowledged that very low interest rates have uneven effects and negative consequences for some people – especially those relying on interest income – but the evidence was that lower interest rates were benefiting the community as a whole.
Members supported the proposal and agreed that the cash rate would not be increased from its lower level until progress is made towards full employment and there is confidence that inflation will be sustainably within the 2–3 per target cent range. Given this, it was considered likely that the cash rate would remain at a very low level for an extended period. Members also agreed that the cash rate was now at its effective lower bound. Members had no appetite for negative interest rates in Australia.
2. A target for the yield on 3-year Australian Government bonds of around 0.25 per cent.
Members considered a proposal to extend and complement the longstanding approach to target the cash rate, which forms the anchor point for the risk-free term structure, by also targeting a risk-free interest rate further out along the yield curve. The specific proposal was to target the rate at the three-year mark, given its importance as a benchmark rate in financial markets and its role in funding across much of the Australian economy. Such a target would also be consistent with the expectation that the cash rate would remain at a very low level for several years.
Members supported the intent of the proposal and agreed that it would make most sense, including from a communication perspective, to set the target at the same rate as the target for the cash rate, namely 25 basis points. They acknowledged that the target did not need to be achieved precisely every day. Members noted that some time might be needed before yields would fall to the target from their level over the weeks preceding the meeting – of around 45 basis points. Members discussed the importance of the Bank's communication focusing on how this target would both support the economy in the immediate period and assist with a strong recovery once the COVID-19 outbreak has been contained.
Members noted that the yield target would be achieved by regular auctions in the secondary bond market, whereby the Bank would implement a program to purchase bonds of different maturities, given the high level of substitutability between bonds. The Bank would also be prepared to buy semi-government securities to achieve the target and help facilitate the smooth functioning of the bond market, and would work closely with the Australian Office of Financial Management (AOFM) and state government borrowing authorities. Members noted that, although the program of bond purchases would entail an increase in the size of the Bank's balance sheet, the focus of the program would be on bond yields rather than the quantity and timing of bond purchases. The objective of this component of the proposed policy measures would be to add to the downward pressure on funding costs for financial institutions, households and businesses.
Members thought it likely that the target for three-year yields would be maintained until progress was made towards the Bank's goals of full employment and the inflation target. Furthermore, they expressed the view that it would be appropriate to remove the yield target before the cash rate itself was raised.
3. A term funding facility for the banking system, with particular support for credit to small and medium-sized businesses.
The proposed scheme had two broad objectives. The first was to lower funding costs for the entire banking system to ensure a low cost of credit to households and businesses. This objective would complement the target for the three-year bond yield. The second objective was to provide an incentive for lenders to support credit to businesses, especially small and medium-sized businesses. Members agreed that this aspect would be vital as many small businesses would be likely to find retaining staff in the period ahead extremely challenging.
Under the proposed facility, the Bank would provide a three-year funding facility to authorised deposit-taking institutions (ADIs) at a fixed rate of 0.25 per cent, which was substantially below lenders' current funding costs. ADIs would be able to obtain initial funding of up to 3 per cent of their existing outstanding credit until the end of September 2020, and would have access to additional funding if they increased lending to businesses, especially to small and medium-sized businesses, with these funds able to be drawn upon until the end of March 2021. This size of the proposed facility was at least $90 billion. Members endorsed the proposal that no additional allowance be available to finance growth in lending for housing.
Members expressed support for the proposed scheme and discussed some technical aspects. They noted that institutions accessing the scheme would need to provide eligible collateral to the Bank, with haircuts applying to provide appropriate risk mitigation. The interest rate that would apply would be fixed for the term of the funding, which was consistent with the Bank's expectation that the cash rate was likely to stay at a very low level for some time. Members also agreed that including a penalty rate to counteract the risk of a reduction in lending could act as a disincentive for institutions to participate in the scheme. The Governor indicated that the first drawings under the facility would be possible no later than four weeks from the date of the meeting.
The Governor informed members that he understood that the Australian Prudential Regulation Authority (APRA) would support ADIs using the scheme. In addition, the Australian Government was in the process of developing a complementary program of support for the non-bank financial sector, small lenders and the securitisation market, which would be implemented by the AOFM. Members observed that such support would be important to assist non-bank financial institutions and small lenders to continue to provide credit to households and businesses.
4. Exchange settlement (ES) balances at the Reserve Bank to be remunerated at 10 basis points, rather than zero as would have been the case under the previous arrangements.
The Governor outlined the implications of the proposed policy measures for the cash market. The existing ‘corridor system’ means that the balances financial institutions hold with the Reserve Bank overnight earn an interest rate 25 basis points below the cash rate, and in the event that a financial institution needed to borrow from the Reserve Bank overnight, it would be charged 25 basis points above the cash rate. Should the cash rate be reduced to 25 basis points, the interest rate on ES balances would be zero. In view of the significant increase in the balances held in ES accounts resulting from the combined effect of the Bank's enhanced liquidity operations, bond purchases and the term funding program, maintaining a zero interest rate on these balances would increase the costs to the banking system.
Members agreed that such an outcome would be undesirable in the current environment. They endorsed the proposal to alleviate this cost by increasing the rate of interest on settlement balances to 10 basis points. No change to the arrangements for the top of the corridor were proposed. Members noted that the increase in ES balances would be likely to change the way that the cash market operates. In particular, large increases in ES balances could result in the cash rate drifting below the target as transaction volumes in the cash market decline, as had occurred in other countries in similar circumstances.
In considering the overall package of measures that had been discussed, members acknowledged that the term funding scheme and the three-year bond yield target were both significant policy developments that would not have been under consideration in normal times. Nonetheless, members strongly supported the proposed policy response as a comprehensive package to complement the fiscal response announced by governments in Australia in the preceding week or so.
Members endorsed the continuation of close policy coordination that had been taking place among the Bank, the federal and state governments and government agencies. They expressed the view that, in the Bank's communication, it would be important to emphasise that the Bank expected a recovery once the COVID-19 outbreak has been contained, and that the recovery would be supported by the low cost of funding across the economy.
<h2 id="the-decision">The Decision</h2>
The Board agreed on a package of measures, comprising four elements, namely:
<ul>
<li>a reduction in the cash rate to 0.25 per cent</li>
<li>a target of 0.25 per cent for the yield on 3-year Australian government bonds</li>
<li>a term funding facility to support credit to businesses, particularly small and medium-sized businesses</li>
<li>an adjustment to the interest rate, to be 10 basis points, on ES balances held by financial institutions at the Bank.</li>
</ul>
The measures would be announced in a media release at 2.30 pm AEDT the following afternoon, 19 March, following processes to ensure coordination of related policy announcements by APRA and the AOFM. The Governor would provide further elaboration and take questions at a press conference to be held at the Bank at 4.00 pm AEDT on the same day.
To read the meeting minutes on the RBA website, <a href="https://www.rba.gov.au/monetary-policy/rba-board-minutes/2020/2020-03-18" target="_blank">click here</a>.
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Monetary and fiscal policy to play important role in reducing economic and financial disruption: RBA March emergency meeting minutes

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48 lenders have cut at least one fixed home loan rate in the past week since the RBA's emergency rate cut, according to financial comparison website RateCity.
ING, Australia's fifth largest lender, set to offer the country's lowest home loan rate at just 2.09 per cent, fixed for two years, available from March 26. 
The company announced cuts to its fixed home loan rates by up to 50 per cent for owner-occupiers with the Orange Advantage package. 
<img src="https://www.urban.com.au/images/Screen%20Shot%202020-03-26%20at%2010.22.02%20am.png" alt="">
Around 80 per cent of fixed home loan rates are now below 3 per cent and more than two dozen lenders offering fixed rates under 2.5 per cent.  
Sally Tindall, research director at RateCity.com.au, said the fixed rate space was hitting boiling point.
“Lenders are putting all of their cards on the table as panicked borrowers seek out home loan security in a market that is changing daily,” she said.
“The move from ING comes after the major banks kicked off a rate war last week with Westpac, NAB and ANZ cutting rates to 2.19 per cent. The question is ‘how low can they go?’.
She noted that we are not far from seeing fixed rates below 2.0 per cent. 
Like many banks, ING has chosen not to cut variable rates following Thursday’s RBA announcement, but offered payment deferrals for up to 6 months for home loans, personal loans and credit cards.
“This will support a lot of Australians in the coming months, particularly those who have been impacted financially as a result of the coronavirus,” she said. 
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j.ballantyne1990-6AQqhLzZaK

Fixed rates plunge after RBA emergency rate cut

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RBA SPEECH
The Reserve Bank Board met yesterday and decided on a comprehensive package to help support jobs, incomes and businesses as the Australian economy deals with the coronavirus. I would like to use this opportunity to explain this package and to answer your questions.
We are clearly living in extraordinary and challenging times. The coronavirus is first and foremost a very major public health problem. But it has also become a major economic problem, which is having deep ramifications for financial systems around the world. The closure of borders and social distancing measures are affecting us all and they are changing the way we live. Understandably, our communities and our financial markets are both having trouble dealing with a rapidly unfolding situation that they have not seen before.
As our country manages this difficult situation, it is important that we do not lose sight of the fact that we will come through this.
At some point, the virus will be contained and our economy and our financial markets will recover.
Undeniably, what we are facing today is a very serious situation, but it is something that is temporary. As we deal with it as best we can, we also need to look to the other side when things will recover. When we do get to that other side, all those fundamentals that have made Australia such a successful and prosperous country will still be there. We need to remember that.
To help us get to the other side, though, we need a bridge. Without that bridge, there will be more damage, some of which will be permanent, to the economy and to people's lives.
Building that bridge requires a concerted team effort, with us all pulling together in the country's interest. On the economic front, there is very close policy coordination between the Australian Government, the Australian Treasury, the Reserve Bank and Australia's financial regulators. We are all in close contact with one another and are working constructively together and we will continue to do so. This coordination is evident in the various policy statements today.
Governments across Australia are playing their important role in building that bridge to the recovery, with the various fiscal initiatives from the Australian and state governments providing very welcome support. Rightly, the focus is on supporting businesses and households who will suffer a major hit to their incomes. It is increasingly clear that further help will be required on this front and the Australian Government has indicated that additional policy measures will be announced shortly. Australian public finances are in good shape and the country's history of prudent fiscal management gives us the capacity to respond now.
The banks too have an important role to play in building that bridge to the recovery by supporting their customers. Without this support, it will be harder for us all to get to the other side in reasonable shape.
Australia has a strong financial system, which is well placed to provide the needed support to businesses and households. The system has strong capital and liquidity positions and our financial institutions have invested heavily in resilience. As APRA confirmed this afternoon in a public statement, the current large buffers of capital and liquidity are able to be used to support ongoing lending to the economy.
The financial regulators have also confirmed that they are examining how the timing of various regulatory initiatives might be adjusted to allow financial institutions to concentrate on their businesses and work with their customers. APRA and ASIC both stand ready to assist institutions work through regulatory issues arising from the virus. The Council of Financial Regulators is meeting again tomorrow and will also meet with the largest lenders to discuss how they can support their customers and whether there are any regulatory impediments in the way.
The Reserve Bank itself is also playing a role in building that bridge to the recovery. I will now turn to that.
Our major focus is to support jobs, incomes and businesses, so that when the health crisis recedes the country is well placed to recover strongly. Supporting small business over coming months is a particular priority.
Prior to today's announcement, we had already taken several steps over recent days to support the Australian economy.
Over the past week or so we have been injecting substantial extra liquidity into the financial system through our daily market operations. As part of this effort, we will be conducting one-month and three-month repo operations each day. We will also conduct repo operations of six-month maturity or longer at least weekly, as long as market conditions warrant. As a result of these liquidity operations, Exchange Settlement balances have increased from around $2.5 billion a month ago to over $20 billion today.
The Reserve Bank also stands ready to purchase Australian government bonds in the secondary market to support its smooth functioning. The government bond market is a key market for the Australian financial system, because government bonds provide the pricing benchmark for many financial assets. Our approach here is similar in concept to our longstanding approach to the foreign exchange market, where we have been prepared to support smooth market functioning when liquidity conditions are highly stressed. We now stand ready to do the same in the bond market and we are working in close cooperation on this with the Australian Office of Financial Management (AOFM).
In addition to these previously announced measures, today's package has four elements. They are: a reduction in the cash rate to 0.25 per cent; a target of 0.25 per cent for the yield on 3-year government bonds; a term funding facility to support credit to businesses, particularly small and medium-sized businesses; and an adjustment to the interest rate on accounts that financial institutions hold at the RBA.
I will discuss each of these in turn.
<h2 id="1-a-further-reduction-in-the-cash-rate-to-per-cent">1. A Further Reduction in the Cash Rate to ¼ Per Cent</h2>
This brings the cumulative decline over the past year to 1¼ percentage points. This is a substantial easing of monetary policy, which is boosting the cash flow of businesses and the household sector as a whole. It is also helping our trade-exposed industries through the exchange rate channel. At the same time, though, low interest rates do have negative consequences for some people, especially those relying on interest income. The Reserve Bank Board has discussed these consequences extensively, but the evidence is that lower interest rates do benefit the community as a whole, although I acknowledge that the effects are uneven.
With this decision today, the policy rates set by the Reserve Bank of Australia, the United States Federal Reserve, the Bank of England and the Reserve Bank of New Zealand are all effectively at ¼ per cent. Each of us are using all the scope we have with interest rates to support our economies through a very challenging period.
At its meeting yesterday, the Board also agreed that we would not increase the cash rate from its current level until progress was made towards full employment and that we were confident that inflation will be sustainably within the 2–3 per cent range. This means that we are likely to be at this level of interest rates for an extended period.
Before the coronavirus hit, we were expecting to make progress towards full employment and the inflation target, although that progress was expected to be only very gradual. Recent events have obviously changed the situation and we are now likely to remain short of those objectives for somewhat longer.
I am not able to provide you with an updated set of economic forecasts. The situation is just too fluid. But we are expecting a major hit to economic activity and incomes in Australia that will last for a number of months. We are also expecting significant job losses. The scale of these losses will depend on the ability of businesses to keep workers on during this difficult period. We saw during the global financial crisis how flexibility in working arrangements limited job losses and this benefited the entire community. I hope the same is true in the months ahead.
It is also important to repeat that we are expecting a recovery once the virus is contained. The timing and strength of that recovery will depend in part upon how successful we are, as a nation, in building that bridge to the other side. When that recovery does come, it will be supported by the low level of interest rates. We will maintain the current setting of interest rates until a strong recovery is in place and the achievement of our objectives is clearly in sight.
<h2 id="2-a-target-yield-on-3-year-australian-government-bonds">2. A Target Yield on 3-year Australian Government Bonds</h2>
Over recent decades, the Reserve Bank's practice has been to target the cash rate, which forms the anchor point for the risk-free term structure. We are now extending and complementing this by also targeting a risk-free interest rate further out along the yield curve.
In particular, we are targeting the yield on 3-year Australian Government Securities (AGS) and we have set this target at around 0.25 per cent, the same as the cash rate. Over recent weeks, the yield on 3-year AGS has averaged 0.45 per cent, so this represents a material reduction.
We have chosen the three-year horizon as it influences funding rates across much of the Australian economy and is an important rate in financial markets. It is also consistent with the Board's expectation that the cash rate will remain at its current level for some years, but not forever.
To achieve this yield target, we will be conducting regular auctions in the bond market. We published some technical details earlier today and we will keep the market informed of our operations. Our first auction will be tomorrow. As part of this program, our intention is to purchase bonds of different maturities given the high level of substitutability between bonds. We are also prepared to buy semi-government securities to achieve the target and to help facilitate the smooth functioning of Australia's bond market.
I want to make it clear that our purchases will be in the secondary market and we will not be purchasing bonds directly from the Government.
I would also like to emphasise that we are not seeking to have the three-year yield identically at 25 basis points each and every day. There will be some natural variation, and it does not make sense to counter that. It may also take some time for yields to fall from their current level to 25 basis points.
I understand why many people will view this as quantitative easing – or QE. This is because there is a quantitative aspect to what we are doing – achieving this target will involve the Reserve Bank buying bonds and an expansion of our balance sheet.
But our emphasis is not on the quantities – we are not setting objectives for the quantity and timing of bonds that we will buy, as some other central banks have done. How much we need to purchase, and when we need to enter the market, will depend upon market conditions and prices.
Rather than quantities or the size of our balance sheet, our focus is very much on the price of money and credit. Our objective here is to provide support for low funding costs across the entire economy. By lowering this important benchmark interest rate, we will add to the downward pressure on borrowing costs for financial institutions, households and businesses. We are prepared to transact in whatever quantities are necessary to achieve this objective.
We expect to maintain the target for three-year yields until progress is being made towards our goals of full employment and the inflation target. Our expectation, though, is that the yield target will be removed before the cash rate is increased.
<h2 id="3-a-term-funding-facility-for-the-banking-system-with-support-for-business-credit-especially-to-small-and-medium-sized-businesses">3. A Term Funding Facility for the Banking System with Support for Business Credit, Especially to Small and Medium-sized Businesses</h2>
The scheme has two broad objectives.
The first is to lower funding costs for the entire banking system so that the cost of credit to households and businesses is low. In this regard, it will complement the target for the three-year yield on AGS.
The second objective is to provide an incentive for lenders to support credit to businesses, especially small and medium-sized businesses. This is a priority area for us. Many small businesses are going to find the coming months very difficult as their sales dry up and they support their staff. Assisting small businesses through this period will help us make that bridge to the other side when the recovery takes place. If Australia has lost lots of otherwise viable businesses through this period, making that recovery will be harder and we will all pay the price for that. So it is important that we address this.
Under this new facility, authorised deposit-taking institutions (ADIs) in total will have access to at least $90 billion in funding. ADIs will be able to borrow from the Reserve Bank an amount equivalent to 3 per cent of their existing outstanding credit to Australian businesses and households. ADIs will be able to draw on these funds up until the end of September this year.
Lenders will also be able to borrow additional funds from the Reserve Bank if they increase credit to business this year. For every extra dollar lent to large business, lenders will have access to an additional dollar of funding from the Reserve Bank. For every extra dollar of loans to small and medium-sized businesses they will have access to an additional five dollars. These funds can be drawn upon up until the end of March next year. There is no extra borrowing allowance for additional housing loans.
The funding from the Reserve Bank will be for three years at a fixed interest rate of 0.25 per cent, which is substantially below lenders' current funding costs. Institutions accessing this scheme will need to provide the usual collateral to the Reserve Bank, with haircuts applying. The first drawings under this facility will be possible no later than four weeks from today.
This scheme is similar to that introduced by the Bank of England. Unlike the Bank of England's scheme, though, the interest rate is fixed for the term of the funding. This is consistent with our view that the cash rate is likely to stay at its current level for some time. Another difference with the Bank of England's scheme is that we have not included a higher interest rate if credit contracts. While a decline in credit would be undesirable, including a penalty may act as a disincentive for institutions to take part in the scheme.
We are encouraging all ADIs to use the term funding facility to help support their customers. I welcome APRA's confirmation this afternoon that it also supports ADIs using this scheme. I also welcome the Australian Government's announcement that it will support the markets for asset-backed securities through the AOFM. This support is important as it will help non-bank financial institutions and small lenders to continue to provide credit to Australian households and businesses.
<h2 id="4-an-adjustment-to-the-interest-rate-on-exchange-settlement-balances">4. An Adjustment to the Interest Rate on Exchange Settlement Balances</h2>
Under our longstanding framework, the RBA operates a corridor system around the cash rate. Under that system, the balances that banks hold with the RBA overnight in Exchange Settlement accounts earn an interest rate 25 basis points below the cash rate. And on the other side of the corridor, in the event that a bank needed to borrow from the RBA overnight, it would be charged 25 basis points above the cash rate.
Under this arrangement and with the cash rate now at 25 basis points, the interest rate on Exchange Settlement balances would have been zero. We have decided to increase this to 10 basis points. We are not making any change to the arrangements for the top of the corridor.
This adjustment to the corridor reflects the fact that there will be a significant increase in the balances held in Exchange Settlement accounts due to the combined effect of the Bank's enhanced liquidity operations, bond purchases and term funding program. Maintaining a zero interest rate on these balances would increase the costs to the banking system. In the current environment, this would be unhelpful.
The increase in settlement balances is also expected to change the way that the cash market operates. In other countries, where there have been large increases in balances at the central bank, the cash rate equivalent has drifted below the target and transaction volumes in the cash market have declined. It is likely that we will see the same outcome in Australia. The Reserve Bank will continue to monitor the cash market closely and is prepared to adjust arrangements if the situation requires.
So these are the four measures announced earlier this afternoon. Together, they represent a comprehensive package to lower funding costs in Australia and support the supply of credit. Complementary initiatives by APRA and the AOFM are also working towards those same objectives.
The term funding scheme and the three-year yield target are both significant policy developments that would not have been under consideration in normal times. They both carry financial and other risks for the Reserve Bank and they both represent significant interventions by the Bank in Australia's financial markets.
The Reserve Bank Board did not take these decisions lightly. But in the context of extraordinary times and consistent with our broad mandate to promote the economic welfare of the people of Australia, we are seeking to play our full role in building that bridge to the time when the recovery takes place. By doing all that we can to lower funding costs in Australia and support the supply of credit to business, we will help our economy and financial system get through this difficult period.
PHILIP LOWE is the Governor of the RBA
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Monetary policy decisions: RBA Governor Philip Lowe

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Commonwealth Bank are the first of the big four to cut interest rates following the emergency rate cut by the RBA.
They are now offering fixed rates at 2.29 per cent, their lowest rates in their history. They've cut 70 basis points off their one, two and three year fixed home loans to make them the lowest on the market.
They haven't cut variable rates.
CBA, who passed on the cut minutes after the RBA's announcement, still haven't passed on their full rate cut to variable home loan customers from the early March RBA cut, which is scheduled for March 24.
"These are unprecedented times, and they call for unprecedented measures," Commonwealth Bank chief executive Matt Comyn said.
Sally Tindall, research director at RateCity.com.au, said CBA's decision will frustrate its variable home loan customers.
She added however that it is a win for small business borrowers who are struggling to make ends meet and keep their businesses afloat.
“This move from CBA is designed to put money back into the pockets of small businesses, but its existing home loan customers have all missed out,” Tindall said.
“CBA has cut some of its fixed rates to a new market low of 2.29 per cent, but this is little comfort to customers wanting to stay on a variable rate loan.
“Banks are between a rock and a hard place when it comes to passing on rate cuts to their mortgage holders, particularly as many savings rates are already so close to zero," Tindall noted.
The RBA cut rates to a historic low 0.25 per cent earlier today.
They announced a money printing program for the first time in history.
It will buy government bonds as its first ever quantitative easing.
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CBA first to cut rates after emergency RBA cut

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The RBA's emergency March meeting saw the official cash rate dropped to deal with the ongoing economic threat of COVID-19.
The governor Philp Lowe published a monetary policy announcement, today, after it meet on Wednesday.
The coronavirus is first and foremost a public health issue, but it is also having a very major impact on the economy and the financial system. As the virus has spread, countries have restricted the movement of people across borders and have implemented social distancing measures, including restricting movements within countries and within cities. The result has been major disruptions to economic activity across the world. This is likely to remain the case for some time yet as efforts continue to contain the virus.
Financial market volatility has been very high. Equity prices have experienced large declines. Government bond yields have declined to historic lows. However, the functioning of major government bond markets has been impaired, which has disrupted other markets given their important role as a financial benchmark. Funding markets are open to only the highest quality borrowers.
The primary response to the virus is to manage the health of the population, but other arms of policy, including monetary and fiscal policy, play an important role in reducing the economic and financial disruption resulting from the virus.
At some point, the virus will be contained and the Australian economy will recover. In the interim, a priority for the Reserve Bank is to support jobs, incomes and businesses, so that when the health crisis recedes, the country is well placed to recover strongly.
At a meeting yesterday, the Reserve Bank Board agreed to the following comprehensive package to support the Australian economy through this challenging period:
<ol>
<li>
A reduction in the cash rate target to 0.25 per cent.
The Board will not increase the cash rate target until progress is being made towards full employment and it is confident that inflation will be sustainably within the 2–3 per cent target band.
</li>
<li>
A target for the yield on 3-year Australian Government bonds of around 0.25 per cent.
This will be achieved through purchases of Government bonds in the secondary market. Purchases of Government bonds and semi-government securities across the yield curve will be conducted to help achieve this target as well as to address market dislocations. These purchases will commence tomorrow. The Bank will work closely with the Australian Office of Financial Management (AOFM) and state government borrowing authorities to ensure the efficacy of its actions. Further details about the implementation of this are provided in the accompanying notice.
</li>
<li>
A term funding facility for the banking system, with particular support for credit to small and medium-sized businesses.
The Reserve Bank will provide a three-year funding facility to authorised deposit-taking institutions (ADIs) at a fixed rate of 0.25 per cent. ADIs will be able to obtain initial funding of up to 3 per cent of their existing outstanding credit. They will have access to additional funding if they increase lending to business, especially to small and medium-sized businesses. This facility is for at least $90 billion. Further details are available in the accompanying notice.
The Australian Government has also developed a complementary program of support for the non-bank financial sector, small lenders and the securitisation market, which will be implemented by the AOFM.
</li>
<li>
Exchange settlement balances at the Reserve Bank will be remunerated at 10 basis points, rather than zero as would have been the case under the previous arrangements.
This will mitigate the cost to the banking system associated with the large increase in banks' settlement balances at the Reserve Bank that will occur following these policy actions.
</li>
</ol>
The Reserve Bank will also continue to provide liquidity to Australian financial markets by conducting one-month and three-month repo operations in its daily market operations until further notice. In addition, the Bank will conduct longer-term repo operations of six-month maturity or longer at least weekly, as long as market conditions warrant.
The various elements of this package reinforce one another and will help to lower funding costs across the economy and support the provision of credit, especially to small and medium-sized businesses.
Australia's financial system is resilient and well placed to deal with the effects of the coronavirus. The banking system is well capitalised and is in a strong liquidity position. Substantial financial buffers are available to be drawn down if required to support the economy. The Reserve Bank is working closely with the other financial regulators and the Australian Government to help ensure that Australia's financial markets continue to operate effectively and that credit is available to households and businesses.
Today's policy package from the Reserve Bank complements the welcome fiscal response from governments in Australia. Together, these measures will support jobs, incomes and businesses through this difficult period and they will also assist the Australian economy in the recovery.
There will be a press conference with further details at 4.00pm AEDT today.
 
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RBA cuts again in March: governor Philip Lowe's emergency March meeting statement

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The RBA have officially cut the cash rate to a record low 0.25 per cent at its emergency March meeting amid the economic downturn, as COVID-19 continues to dominate financial markets. 
It's the lowest the interest rate is set to given, as the RBA has already said 0.25 per cent is its lower bound.
The board met on Wednesday with the announcement made this afternoon.
"The RBA will not increase the cash rate target until progress is being made towards full employment and it is confident that inflation will be sustainably within the 2–3 per cent target band RBA Governor Philip Lowe said.
They want to hit 4.5 per cent unemployment rate. Today's ABS figures were at 5.1 per cent, although Westpac's Bill Evans says the unemployment rate could rise to seven per cent.
The Reserve Bank will provide a three-year funding facility to authorised deposit-taking institutions (ADIs) at a fixed rate of 0.25 per cent. 
They will have access to additional funding if they increase lending to business, especially to small and medium-sized businesses. 
This facility is for at least $90 billion.
Lowe opened with the coronavirus implications.
"The coronavirus is first and foremost a public health issue, but it is also having a very major impact on the economy and the financial system" Lowe said.
"As the virus has spread, countries have restricted the movement of people across borders and have implemented social distancing measures, including restricting movements within countries and within cities", Lowe added.
"The result has been major disruptions to economic activity across the world. This is likely to remain the case for some time yet as efforts continue to contain the virus."
They Reserve Bank also have said they will also continue to provide liquidity to Australian financial markets by conducting one-month and three-month repo operations in its daily market operations until further notice.
The RBA closely watch the US Federal Reserve, who cut their rates out-of-cycle earlier this month, cut again on Sunday night, slashing 100 basis points to a near zero cash rate.
In 2009 following the GFC, Labor's second stimulus package was around four per cent of GDP, which saved a recession.
In today's economy, that's around $80 billion.
 
 
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RBA cut rates to 0.25 at emergency March meeting

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RBA STAFF DISCUSSION PAPER
Most of the cumulative 75 basis points of cash rate reductions in 2019 has flowed through to mortgage rates paid by households.
Interest rates on outstanding variable-rate housing loans have declined by almost 70 basis points (Graph 11). Following the reductions in the cash rate in 2019, lenders lowered their SVRs on housing loans by an average of 60 basis points, which automatically flowed through to all variable-rate loans.
The average rate paid on outstanding variable-rate loans declined by more than this, reflecting strong competition for new high-quality borrowers as well as households switching away from interest-only loans (which generally have higher interest rates). Following the 25 basis point reduction in the cash rate in March 2020, the major banks have lowered their SVRs on housing loans by 25 basis points.
Rates for fixed-rate housing loans have also declined. Over the past year, the major banks reduced their advertised 3-year fixed lending rates by around 100 basis points for owner-occupiers. This decline was consistent with a similar decline in interest rate swap rates, which are often used as a benchmark for pricing fixed-rate loans (given that they reflect expectations about the future path of the cash rate). 
<div><img src="https://www.rba.gov.au/publications/bulletin/2020/mar/images/graph-0320-4-11.svg" alt="Graph 11: Variable
					Housing Interest Rates" width="620" height="482" data-imagetype="External"></div>
Interest rates on loans to large businesses – which tend to move with BBSW rates – are estimated to have declined over recent months and are at very low levels (Graph 12). Lending rates for medium and, to a lesser extent, small businesses have also decreased over recent months. 
<div><img src="https://www.rba.gov.au/publications/bulletin/2020/mar/images/graph-0320-4-12.svg" alt="Graph 12: Business
					Lending Rates" width="620" height="482" data-imagetype="External"></div>
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