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GUEST OBSERVER
The Westpac Melbourne Institute Index of Consumer Sentiment rose by 0.1 percent in March from 99.6 in February to 99.7 in March. 
The Index appears to be stabilising around that point where optimists and pessimists are around equal in number. The encouraging 2.3 percent lift we saw in the Index in February has been sustained in March.
In this survey we ask respondents for information on the news items that have affected their views and whether the news has been well received. This gives us an assessment of what may be on the minds of respondents.
<a href="https://www.propertyobserver.com.au/images/2017/03/15/Screen%20Shot%202017-03-15%20at%2010.51.27%20AM.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/03/15/Screen%20Shot%202017-03-15%20at%2010.51.27%20AM.png" alt="">
As we saw in December the two dominant news categories were ‘economic conditions’ (27.9 percent of respondents recalled news on this topic) and ‘budget and taxation’ (25.2 percent). On both counts respondents saw the news as less unfavourable than had been the case in December. In particular ‘economic conditions’ showed a marked improvement.
It is also interesting to note that overall awareness of ‘budget and taxation’ news is down significantly from a year ago when 37.1 percent of respondents recalled news on this topic. That difference can be largely attributed to a fall from 17.6 percent to 3.7 percent in those respondents recalling news on taxation.
Other well-recalled news items covered: employment (15.7 percent,  up from 11.1 percent in December); interest rates (15.6 percent); and international conditions (12.0 percent). Despite no move by the Reserve Bank over the intervening period news on interest rates was much more positively received while the pessimism around international conditions eased. Respondents, who regularly assess the news on employment as unfavourable, were somewhat more concerned in this survey.
The Westpac Melbourne Institute Index of Unemployment Expectations fell by 3.1 percent in March pushing the Index back to around the levels in December. Recall that lower readings on the index mean more consumers expect unemployment to fall in the year ahead. Our take on the index is that respondents’ assessments of the unemployment outlook have stabilised around a level which is consistent with spare capacity consistently available in the labour market with little prospect of that spare capacity actually clearing.
There was one quite significant movement within the components of the Index: the ‘Family finances compared to a year ago’ sub-index fell by 5.3 percent. This component is now at its lowest level since June 2014 when respondents were shaken by the May Budget announcement.
However on that occasion the overall Index was much lower than we see today, indicating that, currently respondents are particularly concerned about their own finances. News from the December quarter national accounts that wage incomes had fallen by 0.5 percent is indicative of the source of these concerns. That news, of course, complemented other recent reports that wages growth had fallen to a record low of 1.9 percent.
Other components of the Index are less newsworthy. The ‘family finances, next 12 months’ sub-index fell 0.2 percent, the ‘economic conditions, next 12 months’ sub-index rose 1.6 percent; the ‘economic conditions, next 5 years’ sub-index rose 3.9 percent and the ‘time to buy a major household item’ sub-index dipped 0.1%.
Housing sentiment lifted in March. The ‘time to buy a dwelling’ index rose by 7.0 percent. However that increase only recovered the 7.8 percent fall in February. The recovery was mainly attributed to a sharp turnaround in Victoria where the state government has recently announced a range of new measures including abolishing stamp duty for first home buyers.
Despite this, the national index still seems to be drifting lower having fallen by 4.9 percent over the last year. That compares with the 13 percent fall we saw over the previous year. The Index is still around 25 percent higher than the deep lows we saw in the 2007/08 period.
<a href="https://www.propertyobserver.com.au/images/2017/03/15/Screen%20Shot%202017-03-15%20at%2010.52.35%20AM.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/03/15/Screen%20Shot%202017-03-15%20at%2010.52.35%20AM.png" alt="">
House price expectations continue to rise. The Westpac Melbourne Institute Index of House Price Expectations rose by 2.2 percent to be 26.7 percent above the level of a year ago.
Every quarter we also ask respondents for their preference for their savings. This can provide us with any evidence that consumers are becoming more or less risk averse. There was a notable shift in March with the proportion nominating ‘pay down debt’ jumping from 20.5 percent in December to 25.7 percent, and the proportion favouring real estate dropping to just 11.6 percent, a record low since we first started asking this question back in 1974. The moves indicate a clear increase in risk aversion.
The Reserve Bank Board next meets on April 4. The Bank will decide to keep rates on hold. Even though income growth and inflation are too low and there remains ample spare capacity in the labour market (unemployment rate of 5.7 percent compared to a ‘full employment‘ rate of around 5 percent) the Bank has no flexibility to cut rates. The evidence is clear that the rate cuts the Bank embraced last year in the face of low inflation fuelled house  prices and household leverage. The Bank is concerned about possible excesses in the housing market.
Markets accept the view that rates will remain on hold in 2017 but are pricing in at least two hikes from the Bank next year. We expect that growth in the economy will slow in 2018 as the residential construction boom unwinds. As we saw in today’s report households are concerned about their finances, largely because of weak income growth. This concern is unlikely to fade in 2018 appropriately constraining household spending and discouraging investment. That is no environment for higher rates. Accordingly, we expect rates will remain on hold throughout 2018 as well. 
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BILL EVANS is chief economist of <a href="https://www.westpac.com.au/" target="_blank">Westpac</a>. Justin Smirk is ‎senior economist, Westpac Group and can be contacted <a href="https://www.westpac.com.au/about-westpac/westpac-group/" target="_blank">here</a>.
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Time to buy dwelling index rises 7 percent: Westpac's Bill Evans

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GUEST OBSERVER 
The Reserve Bank Board meets next week on March 7.
We can be certain that the decision from the Board will be to hold rates steady.
Recall the comments from the Governor in his answer to a question during his appearance before the House of Representatives Standing Committee on Economics, “At the moment the market pricing is for interest rates to be constant right through this year. That seems a reasonable proposition to me.... The central scenario of a period of stability of interest rates is quite reasonable to me.”
Now we have never framed our medium term forecasts around the views of the Reserve Bank – after all they are only “mortal” forecasters like the rest of us . Their forecasts can go awry and policy can change accordingly. But for the immediate future ( like next week) we can take the Governor’s views as definitive.
Our view since the rate cut in May last year has always been for a follow up move in August and the steady rates throughout the remainder of 2016 , 2017 and 2018.
We assess that at least the Governor currently has that view for 2017 but has not commented on the market implied two rate hikes in 2018.
His growth forecast in 2018 is 2.75 percent-3.75 percent (down from 3-4 percent) well above our forecast of around 2.5% (with downside risks). Achieving the RBA’s growth forecast in 2018 might be consistent with market pricing but, certainly, our forecast for a slowdown in 2018 is not consistent with rate hikes – below trend growth signals steady rates at best.
In his comments to the House the Governor considers the case for rate cuts in 2017. He points out that inflation is below the target range ( “a bit low”) and the unemployment rate is “a bit high”. We would assess full employment at around 5% so, at 5.8%, there is clear excess capacity in the labour market. Of course, that spare capacity is further emphasised in the latest wages report which showed wages growth at a record low of 1.8 percent.
However, his clear problem with leaning further on interest rates is “The main effect (of a rate cut) would be more borrowing for housing, pushing up house prices...”.
His concerns with the impact of rate cuts on the housing market are well based.
Consider figures 1 and 2.
Figure 1 shows recent trends in house prices in Australia. The recent periods of rate cuts (first half of 2015 - February and May) and second half of 2016 (rate cuts in May and August) are associated with significant increases in house price inflation. However, note the trends in the intervening period. These will not be lost on the Governor.
During the period (second half of 2015) when the Bank and APRA imposed macro prudential guidelines to slow the pace of lending to investors the pace of house price inflation (national) slowed from 13.7% (six month annualised to August 2015) to zero (6 month annualised to March 2016). In response to the May and August rate cuts house price inflation has lifted to 10% (6 month annualised to February 2017). 
<a href="https://www.propertyobserver.com.au/images/2017/03/02/Screen%20Shot%202017-03-02%20at%2011.52.00%20AM.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/03/02/Screen%20Shot%202017-03-02%20at%2011.52.00%20AM.png" alt="">
Figure 2 shows a similar trend for new lending for housing (key to Governor’s concerns about rate cuts just boosting household debt). In response to the rate cuts in 2015 new lending for housing peaked at $26.8 billion in August 2015 . It subsequently slowed to $23.8 billion by January 2016 (down 11%) only to pick up to $27.1 billion (up 14%) by December 2016 in response to the May and August rate cuts.
The conclusion that the Bank would have reached is that macro prudential policies do work and rate cuts stimulate prices and credit despite rates being so low.
Little wonder that the Governor noted at the Hearing when referring to recent macro prudential policies, “For us, that is a first order thing that we can do to limit the growth rate of investor credit and, I think, that has been a successful public policy intervention.” 
I assess that, given that both Sydney and Melbourne prices are up 14% (six month annualised – Core Logic data) the Bank and APRA may be considering even tighter macro prudential policies.
It is not only inflation and the unemployment rate that would be of concern to the Reserve Bank.
Throughout the Hearing he indicated a preference for a lower Australian dollar. He accepts that the AUD is probably around fair value but questioned the feed-back to activity from higher commodity prices with miners apparently reluctant to increase capacity and wage pressures in the sector continuing to ease.
He has also adopted a more conservative attitude to the consumer, expecting that the recent falls in the savings rate are unlikely to be sustained.
Most of this “mood” does not sit well with the expectation that growth will lift in 2018, particularly in the face of a downturn in residential construction. His “faith” that non mining investment will lift to reflect tightening capacity utilisation is not convincing particularly with the higher AUD and a more cautious consumer.
Overall we saw little in the comments at the Hearing to sway our expectation of a slowing economy in 2018. If, as we expect, the Bank will get around to adopting additional macro prudential policies to slow housing in the second half of 2017 the stage will be set for another year of steady rates in 2018.
With the economy slowing and macro prudential policies further tightening housing markets, the risks to rates in 2018 will be to the downside rather the upside as currently expected by markets. 
BILL EVANS is chief economist of <a href="https://www.westpac.com.au/" target="_blank">Westpac</a>. 
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RBA to hold interest rates next week: Westpac's Bill Evans

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GUEST OBSERVER
As expected, the minutes of the February monetary policy meeting of the Board of the Reserve Bank provided little additional insight to the Governor’s post-meeting statement and the February Statement on Monetary Policy.
The surprise 0.5 percent decline in real GDP in the September quarter attracted considerable discussion although it has largely been attributed to temporary factors including disruptions to coal supply for exports and bad weather which impacted residential construction. It is also noted that slower growth in consumption has been an aspect of growth trends in recent quarters.
However this weakness is not expected to have continued into the December quarter with growth in retail sales volumes having already been reported to have increased.
Nevertheless there is an emphasis on increased uncertainty around the outlook for consumption. On the one hand the minutes note the importance of households’ perceptions of their personal finances and job prospects. The assumption that the savings rate will continue to fall and support consumption growth has been discarded with growth in household income now representing a constraint to consumption growth.
On the other hand the minutes also point out that due to the strong lift in the terms of trade national income growth will be boosted providing some scope for upside risks to the forecasts.
The Board remains guardedly optimistic about an improvement in growth in non mining business investment with New South Wales and Victoria leading the way and a recent improvement in approvals for non residential investment also pointing to stronger investment. As we have seen in previous minutes the chasm between housing activity in the mining states and Sydney/Melbourne is emphasised clearly. Prospects for activity in Sydney and Melbourne remain solid with in particular investor housing approvals having risen in recent months.
Prospects for the labour market remain uncertain although the unemployment rate is still forecast to edge lower, albeit at a sufficiently modest pace for spare capacity to persist for some time. 
The Board is relying upon a gradual return to the inflation target coming from a modest boost in labour cost pressures and an easing in competitive pressures on retail prices. Unlike in recent years there is no expectation that the earlier depreciation of the exchange rate will put any upward pressure on tradeables prices. That cycle is assessed to have run its course. 
International conditions are assessed to have been more positive over recent months with GDP growth forecasts for our major trading partners having been revised up a little. Higher oil prices and rising inflation expectations were expected to flow through to higher core inflation in the advanced economies over time. As in previous minutes, uncertainty around China’s growth prospects, including imbalances in the financial sector, are an ongoing concern in the medium term. As with most commentators, uncertainty around the US is high with fiscal policy and deregulation potentially boosting activity although restrictive trade policies pose downside risks. 
Conclusion
We see nothing in these minutes to change our view that the official cash rate will remain on hold throughout 2017 and 2018. Markets continue to anticipate rate hikes in 2018 while a considerable number of commentators are predicting rate cuts in 2017. The middle course seems a much more likely outcome particularly given our view that growth momentum can pick up in 2017 but slow markedly through 2018 posing risks for the labour market and economic activity.
BILL EVANS is chief economist of <a href="https://www.westpac.com.au/">Westpac</a>. 
 
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Official cash rate will remain on hold, maybe until 2018: Westpac's Bill Evans

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GUEST OBSERVER
As expected the Reserve Bank Board decided to hold the overnight cash rate unchanged at 1.5 percent.
The commentary in the Governor’s statement was a little more upbeat than had been the case in December.
In particular the global view has been lifted from global growth “lower than average” to “growth above trend in a number of developed economies.”
Another aspect of the importance of global growth has been the ongoing strength in commodity prices.
This statement notes that the terms of trade have risen and this will boost national incomes.
The Bank confirms its forecast in November that growth in 2017 and 2018 will be around 3 percent.
In fact the 2018 forecast is 3.5 percent and given the more recent official forecasts we saw from the Government in the December Mid Year Economic and Fiscal Outlook that 2018 number is likely to be shaved a little to 3.25 percent.
Nevertheless 3 percent is considered to be above the Bank’s assessment of trend (2.75 percent) and therefore implies a gradually strengthening labour market.
The statement directly addresses the reported contraction in the economy in the September quarter attributing it to “temporary factors” with the RBA expecting a return to reasonable growth in the December quarter.
In that regard while consumption is expected to remain moderate, non mining investment is anticipated to show “some pick up”.
Specific commentary on the labour market is largely unchanged with conditions described as mixed although the Bank notes that leading indicators are pointing to continued expansion.
Commentary on the housing market is also largely in line with the December statement with the market described as strengthening overall and prices rising briskly in some cities.
In fact in December the statement pointed out that turnover had been lower and this comment is absent in this statement.
There is also some emphasis on the tightening in lending conditions from the banks that will give the RBA some comfort with respect to any financial stability risks.
Commentary around inflation remains confident pointing out that the most recent inflation report was in line with expectations and both headline and underlying inflation were expected to rise above 2 percent over the Bank’s forecast period.
This statement clearly sets out the Bank’s current policy approach.
That is, to hold rates steady in anticipation of a gradual lift in growth and inflation while imbalances in the housing market remain contained.
We expect this thinking will be sustained throughout 2017 being supported by a rising terms of trade, a peaking construction cycle and a gradually falling unemployment rate with rates remaining on hold.
Our central view for 2018 would be a similar policy stance despite clear preferences in the market for the beginning of a tightening cycle.
Westpac’s view on growth in 2018 is that is it will slow down to a below trend 2.5 percent with housing construction contracting, the terms of trade falling, and ongoing moderation in consumer spending and business investment.
This pitches the risks to the “on hold” call in 2018 to the downside in clear contrast to current market views.
BILL EVANS is chief economist of <a href="https://www.westpac.com.au/">Westpac</a>
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RBA keeps rates on hold, commentary slightly more upbeat than in December: Bill Evans

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<div class="section">GUEST OBSERVER</div>
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<div class="section">The Westpac Melbourne Institute Index of Consumer Sentiment fell by 1.1 percent in November from 102.4 in October to 101.3 in November. <div class="layoutArea">
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The Index continues to hold in a very tight band. Over the last six months the Index has held within the range of 99.1 to 102.4. 
However if you compare the average level during this period with the average over the comparable six month period in 2015 there has been a clear lift in the Index of 4.7 percent. Most of that improvement has been in the components of the Index that measure expectations which are up by an average of 7.3 percent on last year, whereas the components which measure current conditions have increased by only 1.2 percent. 
Developments of note over the month have included weakness in the share market as investors dealt with the uncertainties around the US election (ASX down by 4.4 percent since the October survey); a spectacular surge in coking coal prices (spot prices are up around 150 percent since August); a disappointing jobs report (annual employment growth slowing to 1.4 percent); and an unchanged rate decision from the Reserve Bank. 
Markets had been giving a decent chance to a November rate cut in earlier months so the fall in confidence amongst respondents holding a mortgage of 3.1 percent was somewhat understandable.
<a href="https://www.propertyobserver.com.au/images/2017/01/18/Screen%20Shot%202017-01-18%20at%2011.29.47%20AM.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/01/18/Screen%20Shot%202017-01-18%20at%2011.29.47%20AM.png" alt="">
Although down 3.4 percent in the latest month the lift in confidence in Queensland – the ‘Sunshine and Coal’ state – over the year has been spectacular. The Queensland index has lifted by 15.9 percent since last November compared to falls in the other major states – NSW (–2.6 percent); Victoria (–5.4 percent) and WA (–7.2 percent).
Disappointment in the jobs market has been signalled in the Westpac Melbourne Institute Index of Unemployment Expectations. The Index rose by 1.4 percent from 138.2 to 140.2. It is now up by 2.9 percent over the last six months and slightly above the level a year ago. Recall that higher reads mean more consumers expect unemployment to rise over the next 12 months and hence mark a deterioration.
Four of the five components of the Index fell slightly in the month. Both measures of family finances were down a little – the sub- index tracking views on ‘family finances compared to year ago’ fell by 1.3 percent while the sub-index tracking expectations for finances over the next 12 months fell by 0.8 percent. ‘Economic conditions over the next 12 months’ increased by 0.6 percent but ‘economic conditions over the next 5 years’ fell by 1.4 percent.
In a slight disappointment for the outlook for Xmas spending there was a 2.4 percent fall in the ‘time to buy a major household item’ sub-index.
In November we traditionally gauge respondents’ Christmas spending intentions. The question is “Do you think that you will spend less, about the same, or more on Christmas gifts compared to last year?” Last year we recorded a net balance – the proportion expecting to spend more minus the proportion expecting to spend less – of minus 13 percent. This year the net balance has declined to minus 20.1 percent. That is around the average since we started asking the question in 2009. That is a disappointing result given the promising improvement in spending plans in 2015.
Confidence in housing has also deteriorated. The ‘time to buy a dwelling’ index fell by 5.1 percent from 105.7 in October to 100.3 in November. We saw significant falls in NSW; Victoria; and Queensland.
Despite confidence in housing deteriorating house price expectations continue to rise. The Westpac Melbourne Institute Index of House Price Expectations increased by 1.3 percent to be up 23 percent on a year ago and reach its highest level since July 2015.
The Reserve Bank Board next meets on December 6. There is little chance of any change in rates at this meeting. The key issue is whether the Bank decides to further cut rates in 2017. Whereas lower than expected inflation was the driver of the two cuts in 2016 the decisions in 2017 will be determined by developments in housing and labour markets.
Westpac is expecting economic growth and employment growth to lift in 2017 boosted by higher commodity prices; ongoing strong residential construction; and booming exports. While the pace of house price appreciation can be expected to slow the case for lower rates under those circumstances does not seem to be strong.
We expect rates to remain on hold in 2017. 
 
BILL EVANS is chief economist of <a href="https://www.westpac.com.au/" target="_blank">Westpac</a>.
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Consumer sentiment dips a little, Christmas spending plans disappoint: Bill Evans

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GUEST OBSERVATION
The new governor of the Reserve Bank Philip Lowe has used the minutes to the December board meeting to clearly lay out his delicate policy challenge over the next year.
We have been used to monetary policy being largely driven by changes in the inflation outlook or prospects for economic growth.
While these factors remain entirely relevant for the bank, the minutes note that the board members took time to assess the policy decisions made since the latest easing cycle began in late 2011.
The key issue for discussion was around the impact of lower interest rates on asset prices and borrowing decisions.
The definitive quote is: “Over recent years the board had sought to balance the benefits of lower interest rates in supporting growth and achieving the inflation target with the potential risks to household balance sheets. Members recognised that this balance would need to be kept under review.”
I think this observation, which figures so prominently in the minutes, is signalling that the hurdle to even lower rates which would be aimed at boosting demand is very high.
With housing markets in the south-east remaining vibrant the risks of further cutting rates appear to be quite concerning for the board.
That view has certainly been a key aspect of our view that the cash rate was likely to remain on  hold for an extended period following the (inflation-motivated) rate cut in August.
Observations around the economy were broadly in line with the governor’s statement on December 6.
At the time of the meeting the board was unaware that the Australian economy contracted by 0.5% in the September quarter.
However it was aware that growth in the September quarter was likely to be weak and certainly weaker than had been expected at the time of the November statement on monetary policy.
However, as we saw in the government’s mid-year economic and fiscal outlook which printed yesterday the official forecasts (not necessarily exactly held by the RBA) imply average quarterly growth rates of 0.8% in the December(2016), March ( 2017) and June (2017) quarters.
Hence the minutes still refer to “growth picking up to be above potential later in the forecast period”.
The views on the labour market are less confident than we saw in the last set of minutes – “there was still considerable uncertainty about the momentum in the labour market”.
Having noted this quote it is however interesting that the detailed discussion on the labour market seeks to align the fall in the unemployment rate with a similar hours-based measure, providing more credibility to that fall.
The commentary on the housing market remains upbeat while recognising that there was considerable variation across the country and between houses and apartments.
There is also some positive commentary around the consumer.
We now know that consumer spending in the September quarter was well below average but the minutes point out that since then retail sales have grown at an above average pace and liaison with retailers suggested that trading conditions had remained “steady”.
The minutes are also seeking to paint a better picture for non-mining investment than the downbeat capital expenditure survey that printed in late November – “Over the past few years the national accounts had tended to report stronger outcomes [than the capex survey]”.
The commentary around China remains unchanged with activity being supported by accommodative policy although longer term risks associated with rising debt remain elevated.
The minutes had no real insights into the outlook for the US or markets. Uncertainty around Mr Trump’s policy agenda remains the challenge.
With the negative GDP print for September not being known at the time of the meeting this was always going to be a difficult set of minutes to write.
In the event the board has chosen to highlight in the minutes aspects of the discussion that provide a reasonably upbeat assessment of the economy: growth is expected to bounce back; spare capacity in the labour market, while ongoing, appears to have been reduced; the housing market has strengthened; consumer spending and non- mining investment prospects have improved.
However of most significance is the policy commentary that, I believe, implies a fairly clear signal that monetary policy is now representing asymmetric forward risks with the benefits to spending from the lower rates not compensating for instability in asset markets. Of most concern here are the elevated levels of household debt.
It has been Westpac’s view for some time that rates are likely to remain on hold through 2017 and 2018 and the discussion in these minutes gives no reason to qualify that view.
Bill Evans is the chief economist with Westpac.
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RBA won't risk financial stability with another rate cut in 2017: Bill Evans

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On August 22, I wrote a note in which I concluded:
<ol>
<li>Record low interest rates have not been effective in stimulating investment to close the savings/investment imbalance. A change in policy from governments on infrastructure and structural reform is urgently required. 
</li>
<li>Central banks are exacerbating the imbalance with (quantitative easing (QE) policies. With these policies now generating negative yields and pressuring the banking system while sending confusing signals on risk free rates there is an urgent need for these policies to be reviewed and abandoned.} 
</li>
<li>When these QE policies are finally abandoned, as they surely must be, there will be a huge re-pricing of risk free assets with rates heading in the direction of nominal GDP growth, although the pace of this adjustment will still depend on the other progress which governments have made in closing the savings/ investment imbalance.</li>
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At that time the US 10 year bond rate was 1.54% while the Australian 10 year bond rate was 1.9%. Today these rates stand at 2.35% and 2.75% respectively.
I nominated nominal GDP growth in the US at around 4% (2% real growth and 2% inflation).
The US bond rate has risen about a third of the way towards what I would call that “equilibrium” despite no clear progress on lifting investment although, of course, markets are pre-emptive.
In the period 1992-2002 when we had more of an alignment between savings and investment, and bond rates were broadly in line with nominal GDP growth, we saw that investment in the US was growing at around 8% compared to the average growth rate in recent years of around zero.
The recent rise in bond rates can be considered in two periods – before and after the Presidential election.
The US bond rate started to rise from around late September from 1.55% to reach 1.85% on the eve of the US presidential election.
A key catalyst for that move was a change in tone from both the Bank of Japan (BOJ) and the European Central Bank (ECB). In the case of Japan policy was adjusted to target a level of the 10 year Japanese Government Bond (0%) rather than continuing to expand the balance sheet.
In the case of the ECB, prospects of further increasing the €80 billion of monthly asset purchases took a downturn and while there is no signal from the Board that tapering is imminent the debate around the effectiveness of QE and negative interest rates has been vigorous both in the market and amongst the officials.
Finally, I expect that markets believed that whoever was elected to the presidency we would see a measure of fiscal stimulus.
Since the election of Mr Trump, the US 10 year Treasury bond rate has risen from 1.85% to 2.35% - the total increase in bond rates, from the lows (80 basis points), represents about a third of the move towards my “equilibrium” target of 4% (250 basis points). As we expect with markets, this adjustment has occurred purely through a change in expectations. I would not expect this to progress much further until we see concrete evidence around progress on infrastructure and reform.
So what else in my “wish list” apart from a significant change in ECB and BOJ approaches has occurred?
The second part of the “wish list” was “change in policy from governments on infrastructure and structural reform”.
Do Mr Trump’s policies provide some comfort in that direction?
Recall that the first policy he referred to in his acceptance speech was to “rebuild” America. Given my emphasis on the need for aggressive infrastructure investment to lightening rod the US economy out of secular stagnation, I was impressed.
Until I looked into the details of his infrastructure policy. The current policy is to invest US$1 trillion (around 5% of GDP) in public infrastructure, over 10 years, with 85% to be financed from the private sector. Unless his team is aware of a massive list of public assets that could be privatised with the funds being used to finance the road/bridge/inner city spend, this policy is likely to fail due to a lack of support from the private sector.
My view is that he needs to redirect a large amount of the tax package towards direct infrastructure investment. The current tax package, which includes reducing the corporate tax rate from 35% to 15%, is estimated to cost (according to the <a href="https://crfb.org/donald-trump" target="_blank">Committee for a Responsible Federal Budget</a>) around US$5-6 trillion over 10 years. The corporate component is around 75% of the total package cost with the remainder representing the cost of lowering personal tax rates. But the <a href="https://www.taxpolicycenter.org/publications/analysis-donald-trumps-tax-plan/full" target="_blank">Tax Policy Centre estimates</a> that 47% of the benefits of the personal cuts will go to the top 1% of income earners.
The starting point for the total government debt position also threatens the tax package. When Reagan adopted his “supply side” economic policies, government debt stood at 24% of GDP compared to 78% today. The tax package could lift debt to around 110% of GDP over the next 10 years.
So my view on policy as it stands is that a much larger and realistic infrastructure package needs to be embraced at the expense of a significantly more modest tax package.
What about reform?
Reform is required to convince businesses that growth is in prospect and therefore investment should be lifted.
US firms pay US taxes on income generated anywhere in the world while allowing the firms to defer tax on these earnings by keeping the money offshore. Trump has considered offering companies a window tax “holiday” to repatriate some of the $2 trillion held outside the US. Such reform would 'spark' new investment if firms anticipated stronger growth in the US. An angle might be to 'link' the tax savings to the proposed private funding of infrastructure.
Currently there is some market belief in his claim to “clean up regulation”, with the unwinding of Dodd-Frank (a complex banking regulation) being the most comprehensive. Policies to unwind excessive regulation and some early successes in that regard will be just as crucial as a much more aggressive infrastructure policy to lift confidence in growth prospects.
The moderated approach to QE and negative interest rates by the ECB and BOJ started the move away from unrealistically low rates.
The emphasis in the Trump rhetoric on infrastructure and reform has been a very welcome development. However, at this stage, Trump’s policies do not signal a clear commitment to infrastructure and there does not appear to be a list of “achievable” reform initiatives.
Markets and firms will need to see clear evidence of Trump’s ability to implement ambitious policies before I could declare that we are on a steady path towards equilibrium and 4% bond rates.
Bill Evans is chief economist at Westpac.
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Trump needs to find balance between infrastructure and tax priorities: Westpac's Bill Evans

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GUEST OBSERVER
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The six month annualised growth rate in the Westpac- Melbourne Institute Leading Index, which indicates the likely pace of economic activity relative to trend three to nine months into the future, fell from +0.63 percent in September to +0.43 percent in October. 
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The October reading is the third consecutive above trend result and follows fifteen months of persistent below trend reads. Although the growth rate has slowed a little, it is still a clear positive signal for the near term economic outlook. That signal is broadly consistent with Westpac’s forecast for growth to hold around a 3 percent pace over the course of this year and to lift to 3.3 percent in 2017.
Westpac has recently lifted its growth forecast for 2017 from 3 percent to 3.3 percent. That reflects the recent improvement in the terms of trade following the sustained boost in bulk commodity prices; a more confident assessment of the sustainability of the residential construction cycle and continuing evidence of a strong outlook for growth in both resource and services exports.
The Leading Index growth rate has lifted over the last six months from a 0.34 percent below trend reading in May to the current 0.43% above trend result. 
Offshore factors continue to dominate the sources of improvement in the Index. Of the net 77 basis points in improvement over the last six months, three of the four externally driven components contributed 90 basis points – commodity prices (45 basis points); US industrial production (25 basis points); and a steepening yield curve (25 basis points). The other component of the Index which is heavily influenced by global forces (ASX 200) actually subtracted 8 basis points from the overall movement over the six months. Of course we can expect another story in November following the post-election boom in the share market.
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Contributions from the domestic components of the Index were mixed over the six month period. Aggregate hours worked have improved, contributing 31 basis points to the lift. However, confidence measures have weighed on the Index. The Westpac-MI Consumer Expectations Index subtracted 14 basis points and the Westpac-MI Unemployment Expectations Index subtracted 13 basis points. A slowdown in dwelling approvals has also seen this component subtract 13 basis points.
The Reserve Bank Board next meets on December 6. There is virtually no chance of a policy move coming from that meeting. 
The minutes from the November meeting signalled that the Bank is in a ‘wait and see’ mode. There was an air of uncertainty around both the housing market and the labour market. Considerable time will be required before the picture around both becomes clearer. From our perspective we expect stability in the housing market and some gradual pick-up in labour market conditions as stronger overall growth lifts it out of the current ‘slow patch’. 
Consequently, we expect that a central bank, which must be questioning the effectiveness of yet more monetary stimulus, will be unlikely to see the need to adjust policy throughout the entire run of 2017. 
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BILL EVANS is chief economist of <a href="https://www.westpac.com.au/" target="_blank">Westpac</a>.
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No chance of a policy move from RBA in December: Westpac's Bill Evans

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GUEST OBSERVER
The minutes of the November monetary policy meeting of the Reserve Bank Board provided no real surprises. 
This is to be expected given that we have seen the Statement on Monetary Policy only a week or so ago.
The three areas worthy of attention in the minutes are: the Bank’s take on the recent lift in bulk commodity prices; its assessment of the trends in the labour market; and any update on its sentiment towards the housing market.
The commentary around the commodity story appears to be more positive – “the terms of trade had risen for the first time in two and a half years and had been revised higher over the forecast period.” As with most observers of this recent development the minutes emphasise “uncertainty” about the outlook for the terms of trade. However the Board offers no speculation as to the sustainability of these increases.
There is a much longer than normal discussion around the labour market. The Board noted that “the current experience of relatively strong growth in part time employment (compared to full time employment) was unusual insofar as such a pattern was typically associated with rising unemployment rates." The discussion also clarified the Board’s view on the state of spare capacity in the labour market emphasising that it depended up “how many additional hours workers were seeking” which they concluded was not readily available data. The minutes confirmed that the unemployment rate is expected to edge lower although forecasts incorporated a small downward revision to the outlook for employment growth and more than compensated by a fall in the participation rate.
Just as there is uncertainty around the outlook for the labour market, the Board has become more ambivalent around the housing market: “Members noted that assessing conditions in the housing market had become more complicated.… housing price growth had picked up notably in Sydney and Melbourne but turnover had slowed.” The Bank continues to make the statement of fact: “A considerable supply of apartments is scheduled to come on stream in the next few years” but provides no guidance as to its view on the implications for both prices and the medium term outlook for activity. We are, at least, pleased however that the Board recognises that building activity is likely to support growth “for some time yet.”
The views on inflation are more confident. The forecast that underlying inflation will lift from 1½% in 2016 to 2% in 2017 is supported by the key assertions that firstly that the slowdown in labour costs has bottomed out and secondly that the disinflationary effect of retail competition is expected to dissipate. On the other hand, low rental inflation is expected to persist while the inflationary effect of the fall in the AUD appears to have run its course.
Internationally, the turning point in government bond rates is recognised partly because expectations of further increases in asset purchases by the ECB and BoJ have been toned down. (The Board meeting occurred before the US election had taken place).
On the growth front downside risks to the near term outlook for China have diminished although the Board continues to note that longer term risks to China’s economy associated with high and rising debt remain.
The conclusion in the key “Considerations for Monetary Policy” section emphasises the ongoing neutral policy bias.
Conclusion
Westpac has consistently argued that, following the rate cut in August, the Bank was likely to keep rates on hold through-out the course of 2016 and 2017. The risk to that view remains to the downside associated with an unexpected extended deterioration in the labour market. As discussed, the Board is not confident about the outlook for the labour market. The forecast that the unemployment rate will remain steady is qualified by a number of conditions particularly around the assessment that the data for the best measure of spare capacity is “not readily available.”
Our view on the growth and employment outlook is more positive and we expect that the probability of the type of adverse development in the labour market that would trigger a further policy response remains quite low.
While markets have substantially priced out the prospect of rate cuts next year, in line with our view, there is some evidence that they are flirting with the possibility of a tightening in the second half of 2017. From our perspective that prospect is extremely remote, particularly given the inflation outlook and given our own forecasts for economic growth.
BILL EVANS is chief economist of <a href="https://www.westpac.com.au/" target="_blank">Westpac</a>.
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Reserve Bank minutes highlight uncertainty around the labour market, housing: Westpac's Bill Evans

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GUEST OBSERVER
The Westpac Melbourne Institute Index of Consumer Sentiment fell by 1.1 percent in November from 102.4 in October to 101.3 in November.
The Index continues to hold in a very tight band. Over the last six months the Index has held within the range of 99.1 to 102.4.
However if you compare the average level during this period with the average over the comparable six month period in 2015 there has been a clear lift in the Index of 4.7 percent.
Most of that improvement has been in the components of the Index that measure expectations which are up by an average of 7.3 percent on last year, whereas the components which measure current conditions have increased by only 1.2 percent.
Developments of note over the month have included weakness in the share market as investors dealt with the uncertainties around the US election (ASX down by 4.4 percent since the October survey); a spectacular surge in coking coal prices (spot prices are up around 150 percent since August); a disappointing jobs report (annual employment growth slowing to 1.4 percent); and an unchanged rate decision from the Reserve Bank.
Markets had been giving a decent chance to a November rate cut in earlier months so the fall in confidence amongst respondents holding a mortgage of 3.1 percent was somewhat understandable.
Although down 3.4 percent in the latest month the lift in confidence in Queensland – the ‘Sunshine and Coal’ state – over the year has been spectacular. The Queensland index has lifted by 15.9 percent since last November compared to falls in the other major states – NSW (–2.6 percent); Victoria (–5.4 percent) and WA (–7.2 percent).
Disappointment in the jobs market has been signalled in the Westpac Melbourne Institute Index of Unemployment Expectations. The Index rose by 1.4 percent from 138.2 to 140.2. It is now up by 2.9 percent over the last six months and slightly above the level a year ago. Recall that higher reads mean more consumers expect unemployment to rise over the next 12 months and hence mark a deterioration.
Four of the five components of the Index fell slightly in the month. Both measures of family finances were down a little – the sub- index tracking views on ‘family finances compared to year ago’ fell by 1.3 percent while the sub-index tracking expectations for finances over the next 12 months fell by 0.8 percent. ‘Economic conditions over the next 12 months’ increased by 0.6 percent but ‘economic conditions over the next 5 years’ fell by 1.4 percent.
In a slight disappointment for the outlook for Xmas spending there was a 2.4 percent fall in the ‘time to buy a major household item’ sub-index. 
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In November we traditionally gauge respondents’ Christmas spending intentions. The question is “Do you think that you will spend less, about the same, or more on Christmas gifts compared to last year?” Last year we recorded a net balance – the proportion expecting to spend more minus the proportion expecting to spend less – of minus 13 percent. This year the net balance has declined to minus 20.1 percent. That is around the average since we started asking the question in 2009. That is a disappointing result given the promising improvement in spending plans in 2015. 
Confidence in housing has also deteriorated. The ‘time to buy a dwelling’ index fell by 5.1 percent from 105.7 in October to 100.3 in November. We saw significant falls in NSW; Victoria; and Queensland. 
Despite confidence in housing deteriorating house price expectations continue to rise. The Westpac Melbourne Institute Index of House Price Expectations increased by 1.3 percent to be up 23 percent on a year ago and reach its highest level since July 2015. 
The Reserve Bank Board next meets on December 6. There is little chance of any change in rates at this meeting. The key issue is whether the Bank decides to further cut rates in 2017. Whereas lower than expected inflation was the driver of the two cuts in 2016 the decisions in 2017 will be determined by developments in housing and labour markets.
Westpac is expecting economic growth and employment growth to lift in 2017 boosted by higher commodity prices; ongoing strong residential construction; and booming exports. While the pace of house price appreciation can be expected to slow the case for lower rates under those circumstances does not seem to be strong.
We expect rates to remain on hold in 2017. 
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BILL EVANS is chief economist of <a href="https://www.westpac.com.au/" target="_blank">Westpac</a>.
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Consumer sentiment dips a little, Christmas spending plans disappoint: Westpac's Bill Evans

Perth’s new apartment market recorded its strongest quarter of sales since Q4 2021, with 412 apartments sold in Q1 2026 and a record quarterly sold value of $537 million, according to Urbis’ latest Apartment Essentials results.

Urbis said the March quarter result reflects strong, highly product‑specific demand across both ends of the market, from more attainable projects delivering at scale, through to premium stock being absorbed by equity‑rich downsizers.&nbsp;

David Cresp, Partner at Urbis, said the key story in Perth is not demand, it is the market’s ability to convert demand into delivered housing.&nbsp;

“This is the strongest sales quarter since Q4 2021, and it reinforces that demand in Perth is real and it’s local,” David Cresp said. “But the task now is delivery, turning that demand into projects that can actually be built and completed.”&nbsp;

[smartcode_project:default project_id=110291 project_image_fid=302785]

<h2>Affordable product leads, premium demand remains resilient</h2>

Sales in Q1 were led by more affordable projects, with The Boulevard (SKS Group) recording 115 sales in the quarter, the presentation noting this is only the second time a single project has surpassed 100 quarterly sales. The project was able to offer more affordable housing product right next to a train station.&nbsp;

Palmyra West (Finbar) also delivered strong results with 28 sales in Q1, following 84 sales in Q4, with an average price of under $800,000, underscoring depth of demand for well‑located, attainable new stock.&nbsp;

At the premium end, Urbis said downsizer demand is continuing, with the results highlighting Romeo (Applecross, Finbar) recording 75 sales and reaching almost 50% sold in one quarter.

Jual (Shenton Park, Celsius Property) also posted a strong quarter with 28 sales, reaching 39% sold in one quarter.

Urbis noted that Perth apartment demand is not speculative, not investor‑led, and not uniform, describing it as localised, often equity‑driven and highly product‑specific, a pattern reflected in the polarisation between strong “attainable” performers and premium downsizer product.&nbsp;

[smartcode_project:default project_id=148957 project_image_fid=364102]

<h2>Prices underpinned by costs, and the delivery risk is growing</h2>

Urbis said pricing pressure is cost not demand‑driven: construction costs and delivery risk are now a central constraint, with the results noting build costs remain elevated and volatile, and that energy, fuel and labour uncertainty weigh on feasibility.

David Cresp said a growing challenge for private Build‑to‑Sell developers is simply securing a builder in the current environment.

“Developers are really feeling the pressure from a building market that was operating at capacity and securing a builder is challenging,” David Cresp said, adding that even where a builder can be secured, “trying to get to the price that makes the development financially viable is incredibly challenging in the current market.”&nbsp;

Urbis’ broader WA commentary also notes that industry remains at or above capacity with lot and housing creation, and that many builders are limiting new sales to manage stretched workforces and fixed‑price contract pressures, conditions that flow directly into apartment feasibility and delivery timing.

[smartcode_project:default project_id=108869 project_image_fid=317905]

<h2>Supply: improving later, but still constrained, and Perth lags eastern benchmarks</h2>

While near‑term supply remains constrained, Urbis’ forecast shows completions lifting “Supply is forecast to be back above 1,500 apartments per annum for the first time since 2019”, with 1,775 completions forecast for 2026, and volumes remaining above that level over the following years.&nbsp;

Looking further ahead, completions are forecast to reach 2,500 in 2028, with the report noting 32% of that total is social/affordable, reflecting the role of government‑supported delivery in rebuilding the pipeline.&nbsp;

However, Urbis said Perth remains behind comparable markets on pipeline scale. In a national comparison of projects under construction, the report shows under construction Perth Build‑to‑Sell (BTS) at 3,446 apartments versus the Gold Coast at 7,922. Mr Cresp said “The challenge for Perth is how to we grow the delivery pipeline”.

Urbis’ conclusion is that Perth’s market is increasingly defined by product discipline and delivery certainty, with the research identifying “delivery certainty is key” and calling out builder risk and procurement models as core success factors, alongside “timing and staging”.&nbsp;

Joel Robinson

Perth apartment sales hit strongest pace since late 2021 as builder capacity tightens

<a href="https://www.apartments.com.au/developers/sammut-developments">Sammut Group</a> has secured development approval for its latest Brisbane apartment project, marking the Sydney developer’s next step in expanding its Queensland pipeline following the success of its debut Gold Coast development, Coast.

The approved project at <a href="https://www.apartments.com.au/new-apartments/44-glen-road-toowong-qld-4066">44 Glen Road, </a><a href="https://www.apartments.com.au/developments/toowong-qld-4066">Toowong</a> will deliver a 15-storey riverfront apartment building with 42 residences, significantly increasing the scale of the site’s previous approval for a smaller luxury scheme. Designed by Bureau^proberts, the development will comprise a mix of predominantly four-bedroom and two-bedroom apartments positioned to maximise Brisbane River and city views.

Sammut Director Julian Sammut said the group had been actively searching Brisbane for several years before identifying Toowong as the right fit.

“Brisbane was the right step for Sammut,” Sammut said.

“With the success of Coast we thought we should definitely look to do more in Queensland alone. We then pushed up to look at Brisbane. We've been looking for I'd say two to three years actually and it was hard to find the right location.”

<img alt="Sammut makes Brisbane apartment play" data-entity-type="" data-entity-uuid="" src="https://res.cloudinary.com/dz9xllyip/image/fetch/f_auto,c_limit,w_1440,q_75/https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/field/image/Screenshot%202025-12-23%20at%203.27.14%E2%80%AFPM.png?VersionId=dYAVIL7qdcGA8ojvkslSrLjczXFejSSx" />

Sammut said suburbs including New Farm and Teneriffe were considered before the group ultimately focused on Toowong due to its strong downsizer demographic and limited supply of developable riverfront land.

The site was acquired off-market after what Sammut described as a lengthy negotiation and planning process, with the developer pursuing an uplift to the original approval.

“We are DA approved now which is very exciting,” Sammut said.

“We've had our change approval come through and we've obviously doubled the height, 15 storeys plus rooftop. We've got 42 amazing apartments that are going to be coming to market soon.”

<img alt="Sammut makes Brisbane apartment play" data-entity-type="" data-entity-uuid="" src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,dpr_2.0,q_auto:good/https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202025-12-23%20at%203.27.26%E2%80%AFPM.png?VersionId=ohkRkY0dIZlqdfME2EZePsCQavRiBadE" />

Bureau^proberts said the design responds to Toowong’s evolving urban character, balancing contemporary apartment living with the area’s established residential identity.

“A place where traditional Queensland living has taken place for centuries; Toowong is seeing a shift of contemporary influence, commercial and retail hubs mixed with well-considered residential offerings – all the while maintaining its character and charm,” the architect noted in planning documents submitted to Brisbane City Council.

The architecture practice said the project’s form was shaped by its riverfront setting, flood considerations, neighbouring building scales, and view corridors.

“They said the mix of four and two-bedroom apartments capture the ‘fundamental qualities of Queenslander living,’ translated into the context of a contemporary subtropical building.”

The development sits just off Coronation Drive within walking distance of Toowong’s retail precinct and the upgraded Regatta ferry terminal, while also benefiting from proximity to the incoming green bridge connection to West End. Sammut said the accessibility and amenity offering were central to the site’s appeal.

The approval adds to growing residential activity along the Toowong riverfront, joining nearby projects including Consolidated Properties’ Monarch Residences and Spyre Group’s ARC Residences.

Sammut secures approval for debut Brisbane apartment development in Toowong

Developer Lanevick is heading back into Sydney’s apartment market after focusing more heavily on the luxury townhouse and terrace sector in recent years.

Lanevick, founded and directed by Steve Maroun, is expecting to receive approval in the coming months for a new apartment development in Gladesville, with the aim to launch it to the market later this year.

The 51-apartment project, designed by Studio Johnston, will comprise a mix of one-, two-, and three-bedroom apartments positioned toward the Hunters Hill downsizer market.

“Traditionally it’s been difficult for people in that market to downsize because there just hasn’t been the right product available,” Maroun said.

“We’re targeting buyers who might have 30 to 40 per cent of their house value sitting in the bank after downsizing.

“They still want good spacious entertaining areas, they still want quality design, but they also want flexibility and the ability to enjoy life a bit more after working hard for a long time.”

The project sits near Boronia Park and within close proximity to the Parramatta River foreshore, an area Maroun says offers more of a Hunters Hill lifestyle than a traditional apartment precinct.

“From a lifestyle perspective, it’s really more Hunters Hill than Gladesville,” Maroun said. “You’re close to the foreshore, close to parklands, and still connected back into the village precinct.”

From level four and above, apartments will capture water views&nbsp;toward Sydney Harbour. Communal amenity will include rooftop entertaining areas, wellness spaces, and a gym tailored toward owner-occupier buyers.

“We’ve really designed these apartments around that buyer coming from the Hunters Hill LGA and what they’re actually looking for in their next chapter.”

The proposed development has also been designed to respond to the changing character of the broader Gladesville town centre, where a growing number of mixed-use and residential proposals are expected to emerge over the coming years.

“Gladesville presented a rare opportunity to deliver a genuinely design-led residential project within an evolving lifestyle precinct, just moments from the growing Gladesville town centre, and we’ve approached the project with a strong focus on architecture, liveability and long-term community value,” Maroun said.

Maroun said Lanevick saw a first-mover advantage within the precinct as planning controls continue to evolve to accommodate greater housing density.

“We think there’s a real opportunity there that hasn’t really been serviced properly yet,” he said.

“There’s going to be a broader evolution of the whole Gladesville village precinct over time, particularly with more activation and mixed-use outcomes.”

The Venus Street proposal will include a commercial and retail component at ground level designed to contribute to that evolving streetscape activation.

“A big part of the thinking was how do you activate that area properly and create more vibrancy and amenity, which is what Hunters Hill has been looking for,” Maroun said.

Lanevick’s focus since 2020 has largely been on smaller-scale luxury townhouse and terrace developments. The developer recently completed Royale Randwick, also designed by Studio Johnston, where prices reached $3.65 million. The project was featured in the UDIA NSW 2026 Professional Development Prospectus and was also named a finalist for Development of the Year.

&nbsp;

Lanevick to cater for Hunters Hill downsizers with new Gladesville apartment development

Property developer One Living, backed by former Macquarie banker turned investment manager Chris Green’s investment firm, has unveiled plans to bring more institutional capital into housing to help address the national supply crisis.

The New York-based investor has focused his firm, GreenPoint Partners, on addressing the supply shortage hitting middle market housing in Australia.

It is backing the new One Living business to develop more than 1000 units along the eastern seaboard. The new firm is starting with a development on Mona Vale Road, on the border of Mona Vale and Pymble, in Sydney’s Northern Beaches, with around 140 apartments planned. They are eyeing off more sites across the city.

With cost pressures rising in the industry, One Living’s model is to be a vertically integrated developer-builder, so it can respond directly to the housing gap by removing the cost inefficiencies embedded in traditional residential delivery.

“We are building a platform designed to operate at scale and starting in a market where there’s a clear need for quality, attainable housing,” One Living joint managing director Joseph Scuderi said.

“It’s that missing middle – it’s that attainable end of housing… that’s what most Australians invest into and what Australians can actually afford.”

<img alt="Mona Vale" data-entity-type="file" data-entity-uuid="798dfa93-4941-4db6-a696-31e9dc18e81c" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%202.31.50%E2%80%AFPM.png?VersionId=mKBqi5C_DmeiXS.AtJkcR8LQIxqCqmFi" />

GreenPoint Partners brings years of experience assembling and scaling real estate operating businesses across major markets. And Green sees a big opportunity in Australia.

“For its size, sophistication and importance to the community, Australia’s living sector has remained largely under-institutionalised, which represents significant opportunity,” Green said. “GreenPoint identified that gap, assembled the right team, and is backing One Living to build a platform that is aligned to market needs.”

Green said being a builder-developer would give the company the capacity and flexibility it required to deliver reasonably-priced homes.

“We want it to be at that attainable level; not super high end luxury but at that attainable level,” he said.

<img alt="Mona Vale" data-entity-type="file" data-entity-uuid="74a5344a-4b26-4d4a-ada3-056b1220be77" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%202.32.15%E2%80%AFPM.png?VersionId=vY8hXHO4reBMdO8ZXMWCNtGZJofUPQ3j" />

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One Living will undertake a component of affordable housing in its schemes, which it will own and operate, and it could also run build-to-rent on some sites.

Green praised local policy settings.

“The NSW government is being very supportive, strategic and pragmatic in terms of how do we generate more supply of housing,” he said. “We think it’s actually positive for development and the bit that’s been lacking at that attainable level is that it’s lots of relatively small private developers, whereas we want to create an institutional platform.”

One Living is also&nbsp;looking at high-density projects and could take on more institutional funding in the future.

“The way we will be able to achieve economies of scale is through size,” Green added.

One Living enters Sydney's new apartment market with Northern Beaches site acquisition

It's been several years since there's been an opportunity to buy a brand new townhome in Melbourne's coastal suburb of Mordialloc. Even apartment developments in recent times have been few and far between in the area.

Local developer LDS Property identified the gap in new housing, securing a site on White Street, directly opposite&nbsp;Woodlands Golf Club Mordialloc. They've recently launched&nbsp;<a href="https://www.apartments.com.au/new-townhouses/wm-residences-mordialloc-102-white-street-mordialloc-vic-3195">WM Residences</a>, just 13 townhouses which they have already started building.

Projects by Buxton Director Heath Thompson, who is selling WM Residences, says the townhouses x that perfect middle ground be

"Mordialloc residents have had limited options to downsize within the suburb, often forcing them to look elsewhere despite long-standing ties to the area," Thompson says.

"With very little comparable new supply coming to market, projects like WM Residences are well placed, particularly as buyers look to capitalise on current conditions amid constrained supply."

[smartcode_project:default project_id=134646 project_image_fid=6109]

The development, designed by regarded architecture firm&nbsp;<a href="https://www.apartments.com.au/architects/ewert-leaf">Ewert Leaf</a>,&nbsp;adopts a deliberately restrained architectural approach, focusing on simplicity, durability and liveability rather than overt design gestures.

The boutique scale is central to the offering. With only 13 three-bedroom residences, each home is configured to prioritise functional layouts and everyday use, supported by private terraces and secure two-car garages.

Ewert Leaf’s design response leans into a calm, neutral material palette. Interiors are defined by oak flooring, white walls and soft finishes, creating a consistent and understated backdrop. The approach avoids trend-driven detailing in favour of longevity, with an emphasis on natural light and spatial clarity.

[smartcode_project:default project_id=134646 project_image_fid=6110]

Beyond aesthetics, the homes are designed to meet contemporary performance expectations. Each residence targets a minimum 6-star energy rating, incorporating double glazing, comprehensive insulation and all-electric Bosch appliances.

The project’s location supports a walkable coastal lifestyle, sitting within close proximity to Mordialloc’s foreshore, Main Street retail strip and the train station. Local cafés and dining venues, including Suburbia Deli and Hendriks Café, are within a short walk, reinforcing the area’s established neighbourhood character.

[smartcode_project:default project_id=134646 project_image_fid=6116]

While <a href="https://www.apartments.com.au/developments/mordialloc-vic-3195">Mordialloc</a> is often defined by its beach and pier, the project taps into other areas of day to day living, offering easy access to local food, casual dining and transport, rather than positioning itself purely as a lifestyle retreat.

WM Residences reflects a continued trend across Melbourne’s coastal suburbs towards smaller-scale, design-led townhouse developments, particularly on infill sites where proximity to amenity is already established.

With construction commenced prior to its market entry, the project aligns with a growing preference among buyers for developments with visible progress and defined delivery timeframes.

[smartcode_project_cta:default project_id=134646]

Bill Evans

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