CBA chief executive Matt Comyn has three cuts pegged in 2025.

A shock jump in home loan arrears has failed to stop several banks from quashing expectation of mega rate cuts as frenzy builds ahead of Tuesday’s Reserve Bank meeting.

The head of the country’s biggest bank Commonwealth Bank CEO Matt Comyn is among those moving to temper rate cut expectations, after releasing his third quarter 2025 trading update for the period to March 31 which saw profit of $2.6 billion.

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Home loan arrears are above historic averages for the Commonwealth Bank now.

CBA consumer arrears data released May 14. Source: CBA/ASX.

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Mr Comyn expects a 25 bps cut to the cash rate target by the Reserve Bank board on Tuesday – a view reinforced by CBA senior economist Belinda Allen who on Thursday stuck with their call due to the unemployment rate and wages growth coming in within RBA expectations.

CBA has also flagged two more cuts over the year for a total 75bp ahead to close 2025 at 3.35pc – almost half the projections of rival National Australia Bank which has pegged a 150bp fall by February next year.

The market is virtually 50-50 at this stage on whether RBA will go 50bps, with the ASX rate tracker currently at a 51pc expectation (down from 56pc on May 1) of an interest rate decrease to 3.6pc come Tuesday. That would make it a 50bp cut, similar to the NAB view of the equivalent of a double rate cut on Tuesday.

This as CBA, the country’s biggest bank, on Wednesday highlighted a rise in its problem loans forcing an impairment expense of $223m during the quarter, with Mr Comyn flagging “increases in consumer arrears and corporate troublesome and non-performing exposures”.

Mr Comyn said in a statement to the stock exchange that “home loan arrears have increased over the quarter to 0.71pc” – up 5 basis points to sit above its historic average (0.65pc).

CBA home loan arrears are back up to the level they were at in March 2019, a year before the pandemic hit, and at a time when cash rate had languished at a low 1.5pc for more than three years.

“We know it has been another challenging period for many Australian households and businesses dealing with cost of living pressures,” Mr Comyn said. “We have remained focused on proactively engaging with our customers on a range of support options to help those who need it most.”

How the ASX Rate Tracker is trending. Source: ASX.

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Global investment banker TD Securities has also flagged that the RBA would be “slow and steady and in no rush” to slash rates this year.

An update to clients overnight by Prashant Newnaha, senior Asia-Pacific rates strategist, said “our current forecast is for the RBA to deliver two further 25 bps cuts, in May and in August”.

That would bring the cash rate target down to 3.85pc on May 20 and then 3.6pc in August.

“We continue to believe it’s highly unlikely the Bank delivers cuts in between (Statement of Monetary Policy) meetings given the outlook for tariffs is nowhere as dire as it was a few weeks back.”

The SoMP is released four times a year alongside the February, May, August and November monetary policy decisions of the RBA’s monetary policy board.

The only other rate cut that TD Securities flagged was a further 25 bps reduction in November, which would bring the cash rate target down to 3.35pc.

“The risk to our call is for the RBA to deliver another 25 bps cut in Nov, but the market is priced for this outcome.”

TD Securities said the decline in the cost of building a new dwelling has dropped for 3 straight months now and the annual series has provided a good lead for where trimmed mean CPI is heading. Source: TD Securities

TD Securities believes “CPI and labour market outcomes have landed close to the Bank’s Feb’25 Statement on Monetary Policy forecasts and should support the Bank easing at next week’s meeting”.

It said inflation had continued to decline steadily.

“With respect to CPI, the Bank has paid more attention to housing inflation and in that respect the outcomes are moving in the right direction for the RBA. The decline in the cost of building a new dwelling has dropped for three straight months now and the annual series has provided a good lead for where trimmed mean CPI is heading. The trend suggests the Bank is on course to hit its 2.5pc target.”

It said actual annual rental growth was also slowing.

Analysts were keen to see how the RBA board approached the question of risks around tariffs.

“Of particular focus will be the RBA’s assessment of the risks around tariffs. There are downside risks to growth, but we see no compelling case for trimmed mean CPI forecasts to deviate from 2.7pc. They could be lowered a smidge, but unlikely as low as 2.5pc.”

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A half-built house on a huge block in Brisbane’s west has come up for sale, opening the next chapter in the 17-year history of the epic build.

Rising from lush green fields in Brisbane’s outer west, what at first might appear to be the ruins of an ancient civilisation is in fact an unfinished mansion that’s just hit the market.

Occupying a 10,000sqm block, 29 Landing Place, Moggill stands in stark contrast to the lavish acreage homes in the tranquil semi-rural suburb.

The property, advertised for offers above $1.2 million, includes the incomplete shell of a mansion that’s been under construction since 2008.

Described in the listing as a “blank canvas, waiting to be transformed into your vision”, the house includes a concrete slab, brick walls, and not much else. 

It’s not the first time the property has been sold in an incomplete state, according to selling agent Liam Workman of RE/MAX.

“It was previously unfinished when it was bought by the current owners,” he said.

“They were looking to continue on with the renovation and decided to extend it and make it into a mammoth home.”

“They were looking to include seven bedrooms, seven bathrooms, two kitchens, a pool and full landscaping.”

“But new opportunities have come up so it is now for sale.”

The property last traded in 2023 for $900,000 as a six-bedroom home, although perhaps surprisingly, it was in a more complete state back then, with a roof, internal walls, a staircase and even some bathroom fixtures.

However, most of that has since been stripped out to accommodate the current owners’ expanded plans, which have since been shelved.

Mr Workman said that despite being only partially built, the property had a lot of potential, and would likely appeal to a buyer with a construction background.

“It does look a little bit like Stonehenge,” he said. “[But] If somebody does complete it will be absolutely amazing.”

An alternative would be to demolish the remaining structure and start fresh with a completely new home, Mr Workman said.

“It is a rarity to have the opportunity for 10,000qsm of flat land that close to Brisbane CBD.”

The listing states that the property is being sold in its current state of completion, and that any plans, permits or additional construction work are the responsibility of the prospective buyer.

The median sale price for houses in Moggill is $1.2 million, according to PropTrack, which is about 24% higher than a year ago.

The post Stonehenge of Brisbane: ‘Mammoth’ unfinished house resembling ancient ruins rocks the market appeared first on realestate.com.au.

The national critical defect rate for mortgages fell to 1.16% in the fourth quarter of 2024. That marked the second-lowest level on record, according to a report released Thursday by ACES Quality Management.

For the entire calendar year of 2024, the average critical defect rate was 1.52%, down 9.52% from 2023.

Post-closing quality control data is collected through ACES’ quality management and control software and offers a snapshot of mortgage industry underwriting trends.

Key findings

• The Q4 2024 critical defect rate dropped 23.2% from the third quarter to reach 1.16%.
• Three of the four major underwriting categories — assets, income/employment, and credit — improved in Q4. But defects in the legal/regulatory/compliance and product eligibility categories increased.
• Legal/regulatory/compliance emerged as the leading defect category in Q4, followed closely by assets and income/employment.
• Income/employment and assets were the top defect categories for the year as a whole, followed by credit and legal/regulatory/compliance.

Within specific subcategories, the report noted declines in documentation and calculation/analysis issues in the income/employment category. Conversely, eligibility-related defects rose across multiple categories, including income/employment, assets and credit. Documentation-related issues also increased in the assets category.

On a transactional basis, the share of refinance reviews grew in Q4 2024 while purchase reviews declined. The defect rate for refinance transactions increased modestly, while purchase transaction defects decreased.

In terms of loan types:

• Federal Housing Administration (FHA) loan review share grew in Q4, with associated defect rates declining.
• Conventional review share held steady, although defects in that category rose slightly.
• U.S. Department of Veterans Affairs (VA) loan defect rates remained largely unchanged, while U.S. Department of Agriculture (USDA) volumes remained low.

Across the year, FHA and USDA loans saw declines in defect rates, while conventional loan defects edged up and VA loan rates remained flat.

“Lenders made meaningful progress in loan quality in 2024, closing the year with one of the lowest quarterly critical defect rates we’ve ever observed,” Nick Volpe, executive vice president at ACES, said in a statement.

“However, continued volatility across the Legal/Regulatory/Compliance and Insurance categories, as well as within the Income/Employment Eligibility subcategory, highlights the importance of ongoing diligence in quality control efforts.”

The findings are based on post-closing audit data submitted by lenders and analyzed through the ACES benchmarking system, incorporating historical data for context.

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