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The Reserve Bank Board meets next week on October 4. There is little prospect of the Board deciding to move rates. 
Since rates fell to 3% in December 2012 all six subsequent cuts have been in the February/May/August months. 
Those months, along with November, allow the RBA to respond to fresh information on inflation – printing quarterly usually around one week before the Board meeting. 
Those months also coincide with the quarterly Statement on Monetary Policy where the Bank releases revised forecasts for growth and inflation. 
Forecast changes at that time are usually used to justify the decisions either revealing significant revisions to growth or inflation forecasts. Based on this recent practice it would be extraordinary to see a policy change in October. 
This meeting also marks the first time in the Chair for Governor Lowe. 
I have written extensively about the need for the new Governor of the Reserve Bank to adjust the inflation target from 2-3% to 1-3% to reflect the reality of lower global inflation relative to the mid-1990’s when the target was originally successfully adopted. 
However, as noted at the time, I held out little hope that the new Governor would take my advice. Accordingly I was not surprised to see last week’s announcement that the target had been “confirmed” as 2-3%.
However there has been a significant change from “on average over the cycle” to “over time”. The Governor also emphasised in his Statement to the House of Representatives last Thursday that “the main drafting change is to make the link between monetary policy and financial stability a little more direct”.
If we weigh those two changes together they go some way to achieving the objective that I was most concerned about. 
My concern was that the new Governor might, when confronted with an impossible task of lifting inflation to above 2.5% in order to “average” 2.5% over the cycle might unnecessarily impact asset markets. By using the vague term “over time” and linking policy directly to financial stability (read asset markets) he has allayed much of my concern on that issue. 
Markets are likely to eventually scale back prospects for further rate cuts given these developments. 
We should not be surprised that this new Governor has chosen that approach. And we should certainly not dismiss this change in approach as “window dressing”. 
Every great professional has a seminal piece of work that they can refer to as a “defining moment”. 
I would argue that such a time came for a young economist, Philip Lowe, who had been seconded from the RBA to the Bank of International Settlements in Basel in the early 2000’s. 
In July 2002 he published a paper in the BIS Working Papers series. 
He argued in his paper, that “financial imbalances can build up in a low inflation environment and that in some circumstances it is appropriate for policy to respond to contain imbalances.....while low and stable inflation promotes financial stability, it also increases the likelihood that excess demand pressures show up first in credit aggregates and asset prices, rather than in goods and services prices.
 Accordingly, in some situations, a monetary response to credit and asset markets may be appropriate to preserve both financial and monetary stability.” He further concluded that “greater co-operation between monetary and prudential authorities is important, not just in management of crises but also in preventing their emergence.” (Philip Lowe and Claudio Borio, BIS Working Papers, no. 114, July 2002).
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Around that time the US housing market was beginning to “stir”. Chairman Greenspan had been cutting the Federal Funds Rate in the face of weak inflation. 
The Federal Funds Rate eventually bottomed out at 1% by June 2003 (a year after Lowe’s paper was published). When Greenspan eventually got around to lifting the Federal Funds Rate in June 2004 he moved at a leisurely and predictable 0.25% per meeting until June 2006 when the Federal Funds rate peaked at 5.25%. 
In Greenspan’s defence it has been argued that lifting the Federal Funds Rate from 1% to 5.25% over 2 years should have had more traction with the bond market – the US 10 year rate only increased from 4.6% to 5.2% over the period. This muted response has generally been attributed to Chinese purchases of US Treasuries over that period as China’s foreign reserves boomed. 
Mortgage rates in the US are priced off long bond rates rather than the Federal funds rate so the response in the mortgage market to Greenspan’s policy was muted. However, if policy had been more pre- emptive, less orderly and predictable the traction with the bond market may have been much more effective. 
Greenspan had clearly ignored the signals which had been emphasised in Lowe’s work – over the 4 years from end 2000 to end 2004 US house prices (Case Schiller Index) had lifted by 46%! 
Greenspan’s response to critics who noted the build-up in pressures particularly in the US housing market was that his objective was to maintain low inflation and if there were any associated imbalances in other markets he could “clean up” in the aftermath of any asset market disturbance. Young Lowe clearly disagreed. 
That paper, all those years ago, gives us a clear insight into the values of the new Governor. Arguably, if his warnings had been heeded by Chairman Greenspan back in 2002 (note that he only started rising rates in June 2004) the world may have avoided the Global Financial Crisis. 
We expect that these values will be an important driver of future policy. Lowe’s adjustment to the agreement with the Government to include financial stability has its origins in that paper all those years ago. 
The balance between driving towards a higher inflation target and over stimulating asset markets (including housing) will take on a sharper edge than we have seen in the past. He is also likely to be open to the use of further macro prudential tools (as highlighted in that paper) should that be seen to be necessary. 
Bill Evans, Chief Economist at Westpac
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Insights into the new RBA governor: Westpac's Bill Evans

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GUEST OBSERVER
Consumer Sentiment has been remarkably stable for the last six months. Over that period the Index has averaged 100.3 so today’s reading is just 1.0 percent above this average. 
Indeed the September reading is just 1.7 percent above the average reading over the previous six month period to March as well. 
This stability over the last six months has been despite significant events that can usually be expected to impact confidence: two interest rate cuts from the Reserve Bank and associated reductions in mortgage rates; a Commonwealth Budget; a Federal election; and some major developments offshore such as the surprise UK referendum result (‘Brexit’) and the build -up leading into November’s US election. 
In the September survey we have the benefit of respondents nominating those news categories that they most recalled and whether that news was favourable or unfavourable. There have been some important trends that might explain the stability of confidence at a reasonably solid level.
<a href="/images/2016/09/14/Screen%20Shot%202016-09-15%20at%208.12.24%20AM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/09/14/Screen%20Shot%202016-09-15%20at%208.12.24%20AM.png" alt="">
 
A year ago the most recalled news items were around ‘economic conditions’ (53.9 percent of respondents) and ‘international events’ (41.8 percent of respondents). Recall on these topics is now down to 21.9 percent and 11.4 percent respectively. Not surprisingly, the news is assessed to be considerably less unfavourable today than last year. Having said that there has been a marginal deterioration in the assessment of domestic economic conditions since June. That move has been more than matched by a significant improvement in the assessment of news on international conditions over the last three months. 
The most recalled news category in September was ‘Budget and taxation’ (26 percent). News on this category has been assessed as more unfavourable than in June but still less unfavourable than a year ago. 
Recall levels for news items on ‘interest rates’ (15.2 percent); ‘employment’ (11.9 percent); and ‘inflation’ (6.4 percent) have been fairly steady over the last year. However for all of these categories, we have seen significant improvements in how news has been viewed. 
That theme of improving assessment of the jobs market is supported by the Westpac Melbourne Institute Unemployment Expectations Index. This fell from 141.2 in August to 138.4 in September (down 2 percent, recalling that a lower print means fewer respondents expect the unemployment rate to rise in the year ahead). The Index is now down 11.5 percent over the last year and 10.5 percent since September 2014. The Index was stubbornly high through 2012- 2015 so it is very encouraging that confidence seems to be gradually returning to the jobs market. 
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Confidence in the housing market is improving. The ‘time to buy a dwelling’ index fell 2.5% in September from 112.1 in August to 109.3 in September. The Index is still 7.5 percent above its level from a year ago and 4.3 percent above its average for the last six months. Confidence in both the major markets improved over the month. Sydney lifted by 4.0 percent and Melbourne rose by 5.1 percent. 
Confirmation of a continuation of improvements in the housing market was apparent in the Westpac Melbourne Institute Consumer House Price Expectations Index which increased by 3.0 percent for the month to be up by 6.0 percent for the year. Increases were recorded in NSW, Victoria and Queensland. 
There were mixed messages around the components of the Index. Of most significance was a 3.5 percent jump in the sub-index tracking assessments of ‘family finances vs a year ago’. Readers will recall that the Reserve Bank usually highlights this component when discussing its assessment of the consumer in its quarterly Statement on Monetary Policy. Less encouraging was a 2.3 percent fall in the subindex tracking views on ‘family finances over the next 12 months’. While the overall Index is up 8 percent over the last year both ‘family finances’ components are around the same levels. 
Confidence around the economic outlook deteriorated somewhat. The sub-index tracking views on ‘economic conditions over the next 12 months’ fell by 4.6% while the ‘economic conditions over the next 5 years’ sub index increased by 1.1 percent. 
The sub-index tracking assessments of ‘time to buy major household Item’ increased by 3.5 percent to now be 16.5 percent up on a year ago. 
In this survey, we also receive information on respondents’ saving preferences .These responses are particularly important for assessing whether there has been a change in risk aversion. Consistent with ‘stability’ in the overall survey we saw little change in saving preferences. Most respondents still see bank deposits as the wisest form of saving (29.9 percent up marginally from 29.5 percent in June). That proportion compares to the 40yr peak of 39% in 2012 when risk aversion was much higher.
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A second measure of risk aversion is the component ‘pay down debt’. That proportion increased from 20.0 percent to 21.0 percent and compares with record high of 27 percent in 2010. However the ‘pay down debt’ component has steadily lifted over the last three years. 
The proportions favouring ‘real estate’ (15.4 percent) and ‘shares’ (8.6 percent) remained steady in September. 
The Reserve Bank Board next meets on October 4. This will be the first meeting under the new Governor Lowe. It is extremely unlikely that there will be any change to rates at that meeting. 
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Since the cash rate returned to its historical low of 3% in 2013 all six subsequent cuts have occurred on the meetings in February/ May/August and November when the Bank has a ‘fresh’ print on inflation and is able to communicate any forecast changes in its quarterly Statement on Monetary Policy. That really suggests that the next ‘live’ meeting will be November 1. 
We expect rates will be held steady in November as well. Signs of stability in the real economy, as signalled in this report, point to steady rates being the most appropriate policy. Of course there is always the possibility of a shock from the inflation report on October 26 but both our inflation forecasts and our assessment of current high RBA inertia to moving again this year point to stability in November. 
<a href="/images/2016/09/14/Screen%20Shot%202016-09-15%20at%208.14.34%20AM.png" target="_blank">Click to enlarge</a>
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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 stabilises at solid level: Westpac's Bill Evans

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As expected the Board of the Reserve Bank decided to lower the cash rate by 25bps to 1.5% at its August Board meeting.
The key final paragraph which indicated the Board had no bias: “Taking all these considerations into account, the Board judged that prospects for sustainable growth in the economy, with inflation returning to target over time, would be improved by easing monetary policy at this meeting.”.
This is not surprising since the same policy approach was taken following the May meeting when the Board also cut by 25bps.
It is worth recalling that no bias was indicated at the following June meeting but was restored at the July meeting with a cut in August following.
Consequently, this decision to exclude a bias should not be seen as ruling out another move at the next ‘live’ meeting in November.
As we have been indicating to our customers the key factor behind the cut was low inflation.
In May, the Bank lowered its underlying inflation forecast for 2016 from 2.5% to 1.5% and lowered its forecast for 2017 from 2.5% to 2%.
These sharp changes, for an inflation targeting central bank, were extremely significant and certainly laid the foundation for today’s move.
Not surprisingly, therefore, the commentary around inflation remained downbeat with recent data confirming low inflation and the outlook being for low cost pressures remaining the case for some time.
The most fertile debate around prospects for this meeting centred on housing.
There was some private sector data that indicated that house prices had responded sharply to the May rate cut, potentially posing a risk to today’s decision.
The Governor’s statement has dedicated a particularly long paragraph to the housing market.
In July house prices were described as having “risen again in many parts of the country in recent months”.
However, in today’s statement, he is more downbeat, commenting that: “dwelling prices have been rising only moderately over the course of this year”.
He also notes that the pace of lending for housing has slowed this year. Finally he concludes that “the likelihood of lower interest rates exacerbating risks in the housing market has diminished”. We can conclude from this paragraph that the Bank sees limited risk from the rate cut to a resurgence in house prices.
Commentary on the exchange rate remains the same as last month with “an appreciating exchange rate could complicate this [rebalancing in the economy]”.  So there has been no attempt to talk down the currency with the power of lower rates doing the real job.
Confirmation that the recent slowdown in jobs growth has affected the Board’s thinking comes with the labour market indicators continuing to be described as “mixed … but consistent with a modest pace of expansion in employment”.
There is no explicit clarification as to whether this modest pace will be sufficient to further bring down the unemployment rate. We will get a better indication of the Bank’s likely revised outlook for the unemployment rate in the Statement on Monetary Policy on Friday.
Internationally the focus continues on China with an additional comment that “the underlying pace of China’s growth appears to be moderating”.
The outlook
Since the RBA surprised us with the May rate cut we had expected a follow up move in August.
When we saw the dimension of its inflation forecast changes that follow up move became even more likely.
The only barrier to such a decision was going to be the June quarter inflation report which would provide evidence as to whether the Bank had over-reacted to the shock in the March quarter report. While the June quarter report indicated that inflation was not as weak as in March it still confirmed that most of the disinflationary pressures apparent in March had persisted.
Our current view is that a further cut in November is not likely. With interest rates very close to their effective floor we expect that the Bank will be very patient in gathering information around the likely growth and inflation outlook. From our perspective the near term prospects for the real economy appear to be encouraging with lead indicators for the labour market improving and the lift from housing construction and services exports being sustained.
For us the real issue will be the environment in 2017 when the housing cycle will be in reverse; jobs growth may have cooled; global growth, particularly in this region, will have slowed further; and Australia’s interest rates may still be attractive to international investors. It is likely that any change in our current forecast that rates have bottomed will have been motivated by clearer prospects of those developments.Wee expect that the RBA will be similarly cautious with their assessment.
It is a little early to draw those conclusions given the unusually high degree of uncertainty, particularly around the global environment, but suffice to say that the risks to the rate outlook, particularly in 2017, are firmly to the downside. 
 
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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No surprise the RBA cut: Westpac economist Bill Evans

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With the major events of ‘Brexit’ and prolonged election uncertainty it is not surprising to see a fall in the Index. In fact, given these developments, this fall appears to be surprisingly modest. 
The survey was conducted over the period July 4 to July 7. 
By the time of the survey market volatility associated with ‘Brexit’ had largely settled down and media commentary was, correctly in my view, concentrating on the implications for the UK economy rather than the initial reaction which speculated on some disastrous contagion for the whole of Europe. 
However concerns would have lingered for many respondents given the blanket publicity which the ‘Brexit’ development received. 
On the other hand election uncertainty persisted throughout most of the survey period. 
Respondents would have been particularly unnerved about the prospect of an inconclusive election result given the experience during the last ‘hung’ Parliament in 2010 to 2013. 
Consequently, to see the Index fall by only 3%, back to its level of March 2016 and still 4.2% above its April level is encouraging. 
Since the end of the survey period we have seen some welcome political certainty with the prospect of a hung Parliament avoided. It is reasonable to speculate that had the survey been conducted over the last few days the results would have been more positive. 
Furthermore, we expect the Reserve Bank to move to cut rates again following its meeting on August 2. 
Following the cut in May the Index surged by 8.5% putting it firmly in positive territory above 100, indicating optimists outnumber pessimists. With 
the Index currently poised only slightly below 100 we can be reasonably confident that the Index will be back above a 100 next month despite having to negotiate two major shocks in ‘Brexit’ and election uncertainty. 
With a 3% fall in the overall Index it is not surprising that respondents were a little less confident around the labour market. 
The Westpac Melbourne Institute Index of Unemployment Expectations rose 1.9% in July but the Index is still 4% below its level in April and, most importantly, 8.0% below its level of a year ago. 
Our assessment of that Index is that it is indicating a steady improvement in the labour market. 
Reflecting market volatility and political uncertainty, both components of the Index that relate to households’ assessments of their own finances were weaker. The sub-index tracking assessments of ‘family finances compared to a year ago’ fell by 
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5.2% while the ‘family finances over the next 12 months’ sub- index fell by 2.7%. 
Concerns about the short term economic outlook intensified with the component ‘economic conditions over the next 12 months’ falling by 6.1% although the 5 year outlook was steady. 
The sub-index tracking vies on ‘time to buy a major household item’ fell by 1.5%. 
Over the last 12 months the overall Index has increased by a healthy 7.4%. However that improvement has been dominated by the ‘economic outlook’ components which have risen by nearly 20% on average whereas the ‘family finances’ components have only improved by an average of 2.4%. Respondents may be buoyed by reports of overall improving economic conditions but they are not feeling the same improvement in their own financial position, pointing to a less encouraging basis for boosting consumer spending than may be implied by the overall Index. 
Signals in the housing market were mixed. The ‘time to buy a dwelling’ index fell by 1.8% to 101.8. 
This Index has been markedly weaker since the middle of last year although there has been no sign of further deterioration in 2016. 
On the other hand respondents are regaining their confidence in the outlook for prices. The Westpac Melbourne Institute Index of House Price Expectations lifted by 4.3% in July to its highest level since August last year and up around 17.3% on the average of the last quarter of last year. 
The Reserve Bank Board next meets on August 2. We expect that it will decide to further reduce the overnight cash rate to 1.5%. 
This will follow the decision to lower rates by 0.25% at its Board meeting in May. 
Westpac had not expected that move because we underestimated the significance which the Board had read into the March quarter inflation report. On the basis of that report the Board lowered its forecasts of underlying inflation in 2016 from 2.5% to 1.5% and in 2017 from 2.5% to 2.0% – the bottom of the Bank’s target range.
We do not believe that it would have made such significant changes to its assessment of the inflation outlook without being prepared to cut rates further. Indeed its own forecast of 2% in 2017 incorporated the market forecast of a further rate cut.
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With the AUD lifting above USD 0.76 and the inflation target at risk it seems a sensible policy option to cut rates further. 
However we are mindful that despite cutting rates the Board did not lower its growth forecasts indicating that the motivation behind the May decision was entirely around the need to credibly achieve the inflation target over the forecast period. Rigid adherence to that policy in future might be questioned particularly, as hinted at in this survey, if the rate cuts spill over into excessive exuberance in asset markets. Hence we expect that this cut will, most likely, be the last in the current easing cycle. 
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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 falls on Brexit and election concerns: Westpac's Bill Evans

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GUEST OBSERVER
As expected the Board of the Reserve Bank decided to leave the cash rate unchanged at 2 percent.
It also retained the key final sentence in the Governor’s statement: “Continued low inflation would provide scope for easier policy, should that be appropriate to lend support to demand.”
As we indicated in the preview by far the most important section of the statement was going to be the commentary around the Australian dollar. Since the March meeting the AUD has risen from 71.50c US to 75.75 (at the time of the meeting) having exceeded 76.50 just before the meeting. Astute observers of the Reserve Bank know that the key currency measure is the Australian trade weighted index which also had risen from 61.30 to 64.20 between meetings (an increase of 4.7%). The question was whether the Governor would attempt to ‘talk down’ the AUD along the lines he used through 2014 and up until July 2015. In fact in July 2015 when the AUD was 74.5c US and the TWI 62.5 he noted “further depreciation seems both likely and necessary”.The broad commodity price index was around the same level in July last year as it is today.
In our preview we commented that it was unlikely that the Governor would attempt to talk down the currency. In the event that proved to be correct. He certainly recognised that the AUD had risen (“somewhat”) and partly attributed it to monetary policy overseas. He also noted that an appreciating exchange rate could complicate the economic adjustment. All of these remarks are factual rather than indicating a clear intention to bring down the AUD. We can only conclude that a further substantial appreciation in the AUD would be necessary to trigger a policy response. It is interesting that the AUD lifted above 76c US in the aftermath of the statement indicating that currency markets at least were expecting stronger negative sentiment towards the recent rise in the AUD.
There has been recent talk about the importance of the upcoming inflation report due out on April 27. Westpac expects that the underlying inflation will print at 0.6%qtr consistent with the Bank’s current forecast that underlying inflation print 2.5% for the year. Surprises on inflation are always important indicators for policy and it is significant that the Governor referred to “new information … to assess the outlook for inflation”. With global financial markets settling down since the March statement the inflation report has replaced “recent financial turbulence” as the important new source of information along with labour market conditions.
A possible compromise for the Bank to put indirect downward pressure on the AUD would have been a more downbeat view on China than we saw in March. In the event the statement’s line on China was the same as March: “China’s growth rate has continued to moderate”.
Since the March meeting the Board has had the benefit of the December quarter GDP report which showed that the Australian economy grew by 3% in 2015 compared to the Bank’s forecast in February 2016 of 2.5%. Such results encouraged the Governor to continue to be reasonably upbeat about the economy: “available information suggested the economy is continuing to rebalance”; “the Board judged that there were reasonable prospects for continued growth in the economy”.
There was no change in the commentary on the housing market while the stronger growth confirmed, from the Bank’s perspective, the improved labour market conditions.
Conclusion
We are retaining our call that rates will remain on hold for the remainder of the year. That is predicated on the Australian dollar remaining broadly in the 70-76c US range. Factors that will assist the containment of the recent lift in the AUD will be a tightening by the US Federal Reserve in June and ongoing concerns about stability in China. Today’s statement certainly does not identify a trigger level for the AUD to elicit a policy response. We do not envisage a further significant surge in the AUD and remain comfortable with a steady policy outlook.
BILL EVANS is chief economist of <a href="https://www.westpac.com.au/" target="_blank">Westpac</a>.
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Rates will remain on hold for the remainder of the year: Westpac's Bill Evans

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GUEST OBSERVER
The Reserve Bank Board meets next week on April 5. We expect that the Board will decide to hold rates steady.
It remains our long held view that the RBA will keep rates on hold for the remainder of 2016.
Steady rates will come as no surprise to markets with the probability of a move that is priced into the curve running at just around 5 percent.
We have consistently argued that any move from here, at these low rate levels, is only likely to occur at the February, May, August, and November meetings. Those meetings precede the quarterly Statement on Monetary Policy when the Bank can release revised forecasts which are likely to be used to justify any move.
Market probabilities for the next “live” month, May, are only around 25 percent. A complication for the meeting in May is that it will now coincide with the release of the Federal Budget rather than precede the Budget by one week.
The market based probability of a cut by June has moved to 40 percent with a 100 percent probability of a cut priced in for December.
The most important market development since the last Board meeting on March 1 has been the surge in the Australian dollar. The currency has jumped from USD0.715 to USD 0.765, a 7 percent appreciation against the USD.
The Reserve Bank puts its emphasis on the Trade Weighted Index (TWI) where the movement has been from 61.3 to 64.2 (an increase of 4.7 percent).
Supporting the lift in the TWI has been a rise in Australia’s export commodity prices. Westpac ‘s Index of Commodity Export prices (including Iron Ore and Coal – WCFI) has lifted from 155 to 166 (up 7 percent) since the Board meeting in March. The spot iron ore price has surprised by increasing to US$54/t, up from $50 at the end of February and bouncing off the December low of $38 - despite plentiful supply and weak demand.
By far the most important issue around the announcement at 2:30pm next Tuesday will be whether the Governor decides to strengthen his commentary around the Australian dollar. Since August last year the commentary has been along the lines of the March Statement “the exchange rate has been adjusting to the evolving economic outlook”.
Recall that back in July last year he stated, “Further depreciation seems both likely and necessary…”. At that time the AUD was at USD 0.745 and the TWI at 62.5. Westpac’s broad commodity price Index stood at 176.
However by August he had adopted the benign, “The exchange rate has been adjusting to the significant declines in key commodity prices”.
By that time the AUD had stabilised at USD 0.74 and the TWI had settled at 62.0. Westpac’s Commodity Price Index had also held at 171.
Given there was little change between July and August the decision to soften the language in August implies that consideration must have been given to softening the language around the AUD at the July meeting. The Bank was probably looking for some sign of stability before changing the message.
Using strong language around the AUD had, arguably, proved to be a successful strategy in the period from March 2014 (when the Governor first referred to the AUD as being high by historical standards) until August 2015 when he adopted the “adjusting” commentary. Over that period the AUD had fallen from USD 0.895 to USD 0.74 (down 17 percent) while the TWI had fallen from 68.7 to 62.0 (down 11 percent).
Certainly other factors also assisted – Westpac’s Commodity Price Index fell from 304 to 171 (down 44 percent) while the Governor cut the overnight cash rate from 2.5 percent to 2.0 percent in the latter stages of that period.
Consider two points – the RBA would have assessed the “talk down” strategy as having been successful (although the AUD was little changed until November 2014 when markets started to detect a possible rate cut) and the precedent from July 2015 (TWI at 62.5; commodities at 176) compared with today (TWI at 64.2 and commodities at 166).
Those two points indicate that the Governor will certainly discuss reintroducing the strategy of “talking down” the AUD. That would imply changing the language around the AUD from “adjusting to the evolving economic outlook” to something like “a lower AUD seems both likely and necessary”.
Such a change in strategy around the AUD commentary would be very significant.
Most importantly it would alert markets that the Bank was uncomfortable with recent developments in the AUD and may be prepared to use interest rates to achieve its objective. (Arguably, the lesson from 2014, where there was little impact on AUD until markets started anticipating lower rates, points to that conclusion). Changing that commentary would certainly see markets increasing rate cut probabilities in the face of any further appreciation in the AUD.
But we also need to remember that central banks are inherently conservative institutions. We expect that, like ourselves, the RBA will be sceptical about the recent “recovery” in commodity prices and, more importantly, like ourselves, still expects the Federal Reserve to raise rates in June.
Buying some time before changing the strategy seems like the most prudent approach in the current circumstances. After all, the boost in the AUD has occurred suddenly in the space of just one month and a prudent patient approach seems the more likely policy outcome at this stage.
Accordingly, we do not expect to see any significant changes in the Governor’s Statement next week.
Bill Evans is chief economist of <a href="https://www.westpac.com.au/" target="_blank">Westpac</a>.
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RBA on hold, unchanged rhetoric on AUD: Westpac's Bill Evans

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GUEST OBSERVER
The minutes of the March monetary policy meeting of the Board of the RBA provided no real surprises. When we assessed the Governor’s statement following the March meeting we pointed out that the key sentence “Members noted that continued low inflation would provide scope to ease monetary policy further, should that be appropriate to lend support to demand” had been changed from the February statement to include the word “would” instead of “may”. We interpreted that as a clear strengthening of the easing bias.
That decision may have been prompted by a concern that the December quarter GDP report that was set to be released the following day was going to show a significant slowdown in growth. As it turned out the report showed growth in 2015 to be 3%, comfortably above trend growth of 2.75%. In the minutes it is noted that it was reported to the Board that based on data available “growth appeared to have been slightly below average in the December quarter and over 2015 as a whole”. Clearly this assessment proved to be more cautious than turned out to be the final result. It is reasonable to argue that knowledge of the stronger GDP may have allowed the Board to retain its earlier more modest easing bias.
Of course we were also interested in the assessment of the surprise rise in the unemployment rate from 5.8% to 6.0% in January. The minutes while recognising that development point out that “leading indicators of employment had increased further and were consistent with employment growth in the months ahead”.
The minutes also clarified the relevance of the Capex survey. While the particularly weak Capex survey pointed out further but not surprising large falls in mining investment the picture around non-mining investment from the survey seemed to be overly pessimistic. The minutes point out that roughly half of non-mining investment is not covered by the Capex survey and that it had on occasions proved to be unreliable. Further boosting the view around business is the observation that surveys continue to point to conditions and capacity utilisation remaining above average levels.
The minutes have qualified the assessment that low wage growth points to some spare capacity in the labour market. They speculate that weak wages growth may be due to increasing globalisation. 
There is a long discussion on China, particularly around longer run economic performance and risks to growth. The discussion covers potential financial problems in China but concludes that China’s low household debt and low level of foreign currency debt gave it much more protection from a crisis than in other emerging economies.
At the time of the last meeting the AUD was around USD0.715, little changed from the February meeting. With the currency subsequently rising to USD0.75 there may have been some temptation to use this document to signal any discomfort. This has not happened and the term “responded to the evolving economic outlook” has been maintained.
Conclusion
The minutes provide some insight into expectations around GDP; reaction to the surprise rise in the unemployment rate in January; and the weak Capex report. The ‘spin’ on all of these developments indicates a Bank that is comfortably on hold. However clearly considerable attention is being paid by the Bank to developments in China and sudden adverse developments in that region would undoubtedly prompt consideration for policy change.
We will have to await new communication from the Bank to assess its degree of unrest around the recent sharp jump in the AUD.
Westpac continues to expect that the Bank will remain on hold for the remainder of the course of 2016.
Bill Evans is chief economist of <a href="https://www.westpac.com.au/" target="_blank">Westpac</a>.
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No surprises in RBA minutes; positive spin on key data points to rates on hold: Westpac's Bill Evans

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GUEST OBSERVER
The minutes of the monetary policy meeting of the Reserve Bank Board for February provided no surprises given that we have recently seen the Statement on Monetary Policy (SoMP) and the Governor’s testimony to the House of Reps Standing Committee on Economics.
The key theme in those communications is repeated - that the Board will be assessing whether “the recent improvement in labour market conditions was continuing and whether recent financial market turbulence presaged weaker global and domestic demand”.
The tone of the discussion on the domestic economy was positive.
The minutes noted that domestic data had on balance been positive and that there were reasonable prospects for growth to increase gradually over the forecast period. Household consumption was seen to be growing around trend and there was evidence that the low interest rates were supporting growth in consumption and dwelling investment with the lower exchange rate boosting demand.
Whereas over the last year or so the commentary on the drag from mining investment tended to point to an intensifying of that drag the commentary now points out that the peak drag from mining investment is now likely to be in 2015-16 and the drag will lessen over subsequent years.
We are aware that the Bank has been frustrated by the lack of pick up in non mining business investment and the minutes conclude that there is now little prospect of that pick up in the near term. However, the minutes do point out that business surveys are at above average levels and business lending has picked up.
There is more information on the Banks’ liaison contacts around the economy. They note that the demand for high density housing outside Perth has been sufficient to absorb the increase in supply, although an increasing number of projects have been put on hold.
Other liaison shows that in the retail sector trading conditions had improved in the Christmas and post-Christmas periods. Low interest rates, lower petrol prices and increasing employment were expected to continue to support household consumption growth.
The minutes also provided further interpretation of the strong employment data pointing out that output growth in the services sector had been strong with this sector being more labour intensive than others. Of course the Governor indicated in his Parliamentary Q&amp;A that while he recognised there may be some technical difficulties with the current employment data he expected that the signal around the unemployment rate itself was reliable.
In the recent SoMP the Bank forecast that the unemployment rate would continue to fall from current levels. While this was the Governor’s interpretation of the strong data the minutes do balance this view somewhat by pointing out that strong employment growth in conjunction with below average GDP growth created some uncertainty.
The commentary around international conditions was broadly unchanged with the forecast for trading partner growth expected to remain a little below decade average.
The one exception to this steady commentary was around China. Here the detail seems to be more pessimistic. Longer term structural factors such as declining growth in productivity and the urban working age population were also seen to be important. Deflationary pressures were persisting and there are concerns that the interaction between slowing growth, low inflation, and high and increasing levels of debt intensified uncertainty around the outlook. The minutes even speculated on the impact of a sharp slowing in economic activity that would spill over into the region including Australia.
The minutes contained a detailed discussion of global financial markets including the challenges for the Chinese authorities in managing the exchange rate in the face of depreciation pressure from private capital outflows. However, there was no evidence or speculation that these developments would pose substantial risks for Australia including funding costs for Australian banks which “had increased a little from their low levels recently”. As was the case with the Governor in his Parliamentary presentation, the minutes pointed out that the cost of new long term wholesale funding remained below the cost of maturing debt.
Conclusion
The minutes of course repeat the “soft easing bias” stance with the words “the outlook for continued low inflation may provide scope for easier monetary policy, should that be appropriate to lend further support to demand”.
Our reading of the minutes however suggest that at the moment the Board does not believe that further support will be necessary and it will take some months to determine whether that approach should change. Although we must be mindful of the risks of the feedback to the domestic economy of the current global financial turbulence we continue to maintain the view that rates will remain on hold in 2016.
Bill Evans is chief economist of <a href="https://www.westpac.com.au/" target="_blank">Westpac</a>.
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RBA's positive outlook for the Australian economy: Westpac's Bill Evans

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<div class="section">The Westpac Melbourne Institute Index of Consumer Sentiment rose by 4.2% in February to 101.3 from 97.3 in January. <div class="layoutArea">
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The Index has now recovered all the ground it lost in January when it fell by 3.5%. 
The Index has now returned to a level (above 100) where optimists outnumber pessimists. This is good news in that there have only been five months over the last two years when we have had optimists in the ascendency. 
Last month we interpreted the 3.5% fall in the Index as being mainly due to respondents’ concerns with the sharp falls in share markets and the oil price from the beginning of the year. 
Between the beginning of the year and the final day of the January survey Australia’s share price Index fell by around 8% and the oil price was down by 20%. 
Over the four weeks to the end of this February survey there has been little net movement in either share markets or the oil price although we have continued to see significant volatility. Respondents were clearly relieved that markets did not follow on from the steep declines we saw in early January. 
While the plunge in the oil price is disturbing from a market perspective, households are now benefitting from lower petrol prices. 
Since the survey in January “average pump price” has fallen by 8.5% providing households with a decent boost to disposable incomes. 
It is important to note that since the February survey closed on February 6 there has been renewed weakness with the Australian share market down by nearly 3% and oil prices down by 8%. 
Of course it is too early to speculate whether markets will continue to weaken over the next few weeks. 
The significant influence of markets on the recent Confidence measures is best demonstrated in the component of the Index measuring how respondents assess family finances relative to a year ago. 
In its recent Statement on Monetary Policy the Reserve Bank highlighted this component in its discussion on consumption indicators. 
In today’s survey ‘family finances relative to a year ago’ lifted by 11.3% following a 9.4% fall in January. This component of the Index is now up by 3.4% compared to a year ago. 
The other component of the Index which measures respondents’ assessments of their own financial position – ‘family finances over the next 12 months’ – was also strong – rising by 3.8%. 
The outlook for the economy improved by less than respondents’ own financial assessments. The sub-indexes tracking expectations for ‘economic conditions over the next 12 months’ fell by 0.6% and ‘economic conditions over the next 5 years’ increased by 4.0%.
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Retail signals were also encouraging with the ‘time to buy a major household item’ sub-index up by 3.1%. 
There has been a disappointing deterioration in respondents’ confidence around the jobs market. Despite ongoing strong employment reports and a marked fall in the unemployment rate the Westpac Melbourne Institute Index of Unemployment Expectations increased by 1.9% to now be 7.7% above its recent low in October (recall that higher reads indicate a more pessimistic outlook for unemployment). Certainly, the Index is still below its level from a year ago by 1.7% but that compares with October when it was down by 9.2% over the previous year and was providing a signal quite consistent with the improving employment reports. 
After sending some encouraging signals in January, sentiment toward housing soured again in February. Some of this variation is likely to be seasonal. The ‘time to buy a dwelling’ index fell 12% to 99.3 after increasing by 14% in January. The Index is now back at its December level. It is 21% below its level of a year ago. 
Despite the overall Index being back at its December level there has been significant movement amongst the states with NSW and Victoria substantially above the December levels and the smaller states all well below. 
We saw a similar story for House Price Expectations. After lifting by 20.5% in January this Index fell by 12.5% in February. However the Index is still comfortably above its December lows. 
The Reserve Bank Board next meets on March 1. Following the recent turmoil, markets are convinced that the Reserve Bank will be cutting rates by May, if not earlier. Today’s report highlights that one of the Bank’s most significant concerns of whether international developments will weigh on domestic demand will need more time to resolve. Certainly the resilience of Consumer 
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Sentiment, and in particular, respondents’ assessments of their own financial position are not pointing to a significant deterioration in domestic demand. 
The other key issue for the Bank is whether recent momentum in the labour market can be sustained. In that regard today’s report provides a less encouraging insight with the Westpac Melbourne Institute Index of Unemployment Expectations printing a disappointing result. 
We are maintaining our call that rates will remain on hold over the course of 2016.
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Consumer sentiment bounces back: Westpac's chief economist Bill Evans

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GUEST OBSERVER
As expected, the Board of the Reserve Bank decided to leave the cash rate unchanged at 2.0% in February.
In a departure from recent practise the Governor highlighted the two key forces that will be most significant in the Board’s future decisions are: firstly, “whether the recent improvement in labour market conditions is continuing”; and secondly, “whether the recent financial turbulence portends weaker global and domestic demand”.
This is significant in that global market conditions have been elevated as important factors in the bank’s thinking.
However as indicated global volatility will be insufficient in its own right if there is no clear evidence of a feed through effect, particularly to domestic demand.
Measures of particular importance here will be consumer and business confidence.
To date the Bank notes that business conditions have moved to above average levels and we add that the recent 3.5% fall in the Westpac Consumer Sentiment Index, in response to market fluctuations, could well have been an over-reaction given the lack of other information available over the holiday period.
Certainly, to date the Bank appears to be gaining confidence around domestic economic momentum pointing out in today’s statement that: “the non mining parts of the economy strengthened during 2015”.
That compared with the December statement: “business surveys suggest a gradual improvement in conditions in non mining sectors over the past year.”
As we expected, the Board retained the moderate easing bias sentence: “Continued low inflation may provide scope for easier policy, should that be appropriate to lend support to demand”.
This is in fact somewhat stronger than the December statement which referred to “the outlook for inflation may afford scope ...” In fact, the commentary around inflation appears to recognise a lower inflation trajectory than indicated in December.
In December: “inflation is forecast to be consistent with the target over the next one to two years”. In today’s statement: “consumer price inflation is likely to remain low over the next year or two”.
The test of whether this wording is significantly different will come with the Bank’s inflation forecasts which are refreshed in February.
These forecasts will be released with the February Statement on Monetary Policy on February 5.
Our assessment has been that the Bank will retain the 2-3% inflation range in 2016 but there must be some doubt to this assessment based on the wording in the Governor’s statement today.
Other parts of the statement provided no surprises.
With the AUD having fallen from USD 0.73 to USD 0.71 since the December Board meeting it was expected that the Governor would continue to describe the currency as having “continued its adjustment to the evolving economic outlook”.
In December the housing market was described as: “the pace of growth in dwelling prices has moderated in Melbourne and Sydney over recent months”.
Despite a sharper than expected slowdown in prices in the last few months the description of the housing market remains the same.
In some recognition of the global volatility the Bank assesses that the global economy will grow “at a lower pace than earlier expected” highlighting weakness in emerging market economies including China.
Conclusion
Through all this market volatility and confident market pricing that RBA rate cuts could be expected as early as November last year Westpac has held the line that rates would remain on hold for the second half of 2015 and throughout 2016.
There is not enough in today’s statement for us to change that view.
In terms of the key issues highlighted by the Governor we do not expect to see a sustained continuation of current market volatility and certainly do not anticipate financial volatility substantially weakening domestic demand.
We do accept that recent job reports have run somewhat ahead of our expectations and anticipate a modest ( catch up) lift in the unemployment rate over the course of the next six months.
That development alone will continue to give markets hope that the RBA will cut rates further but we do not believe that the conditions will be there to drive that eventual result.
Bill Evans is chief economist of <a href="https://www.westpac.com.au/" target="_blank">Westpac</a>.
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Rates on hold through 2016: 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" />

&nbsp;

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.

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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.

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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.

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Bill Evans

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