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GUEST OBSERVATION
Today, the Reserve Bank Board decided to lower the cash rate by 25bps to 2.25%.
This has been Westpac’s forecast since 4 December when it became clear that demand conditions in the Australian economy had deteriorated more sharply than we expect the Bank had anticipated.
The Governor’s statement confirms this assessment when he refers to growth as being below trend but more importantly “domestic demand growth overall quite weak”.
The Bank has also clearly revised down its growth forecasts and the exact extent of these revisions will be known in the Statement on Monetary Policy to be released on 6 February (we expect that forecast growth in 2015 will be reduced from 3% to 2.5%). It refers to “output growth will probably remain a little below trend for somewhat longer and the rate of unemployment peak a little higher than earlier expected” (the Bank does not provide specific unemployment forecasts).
It is also likely that the Bank will lower its inflation forecast. Recall that in November when the oil price was US$86/bbl, underlying inflation for 2015 was forecast at 2.75% (midpoint of the range). The Governor now refers to underlying inflation currently running at 2.25% and it is reasonable to conclude that he is implying that that low read will continue for some time.
The most popular argument against cutting rates continues to be around overstimulating housing. In that regard, the Governor points out that dwelling prices continue to rise strongly in Sydney whilst recognising that other cities have had more variable performance. As we anticipated the new macroprudential policy around containing growth in loans to investors to 10%pa is deemed by the Bank as an effective insurance policy to contain any housing bubbles. In that regard the statement specifically refers to the Bank’s work with regulators.
Another argument against the rate cut was that the Australian dollar had fallen sufficiently. However the Bank points out that even though the Australian dollar has declined noticeably against the US dollar its performance against other currencies has been more robust. Once again it is stated that the Australian dollar “remains above most estimates of its fundamental value” and the statement calls out for a lower currency.
In the all-important final paragraph it is concluded that based upon assessments of the economy and in particular the updated forecasts, which will be released in the Statement on Monetary Policy, a cut in the cash rate was appropriate. The language in the final sentence which might have referred to “a period of stability” or “scope to cut further” takes a more neutral stance making the obvious point that “this action adds some further support to demand”. This gives the Bank full flexibility to determine its next policy move without making any commitment to the market.
Westpac’s forecast which was released on 4 December, 2014 included not only a 25bp cut in February 2015 but a follow up move of 25bps in March. Our reasoning is that the Bank would not have disturbed such a long period of interest rate stability for just one move. The case to move rates after such a long period would need to be convincing.
We believe that the forecasts that will be released in the Statement on Monetary Policy will depict an economy expected to grow markedly below trend in 2015, barely back at trend by 2016 and with core inflation holding near the bottom of the 2-3% band in 2015. Under those circumstances we think it is justifiable to expect another move with March being the best timing.
Our forecast last December was for rates to then remain on hold for the rest of the year and we are comfortable with that view.
Bill Evans is chief economist of <a href="https://www.westpac.com.au/" target="_blank">Westpac</a>.
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One more, then rates on hold: Westpac's Bill Evans

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Reserve Bank governor Glenn Stevens appeared before the House of Representatives Standing Committee on Economics on Friday. In his opening statement, the governor set out the RBA’s economic assessment. Naturally, the themes were along the lines of those outlined in the RBA’s quarterly Statement on Monetary Policy, published a fortnight ago. In short, the RBA judges that the Australian economy has been growing close to trend over both the second half of 2011 and up to the middle of 2012. This allows for the likelihood of a more moderate expansion of real GDP in the June quarter than in the March quarter. Growth at around trend pace accords with the RBA’s expectations. Consistent with trend growth, the rate of unemployment remains essentially unchanged from this time last year. On prices, core inflation has moderated to about 2% and the RBA expects inflation to remain consistent with the target. The exchange rate appreciation has had a significant impact on prices for traded goods, but this dampening effect is starting to wane. This will require that the more moderate growth of domestic costs and prices that we have seen will need to continue in order for inflation to remain consistent with the target. On the world economy, the governor emphasised both the risks and that the global slowing to date has “been of the more ordinary variety”. Growth for the world as a whole is close to its long-run average and the IMF forecast for world GDP growth of about 3.5% for this year seems reasonable, although the risks seem weighted to the downside. The governor’s discussion of the Australian economy looked ahead to the peak of resource investment within the next couple of years, as was outlined in the SoMP. The expectation is that growth will still be close to trend, albeit with a different composition (with exports, residential and non-residential construction starting to pick up). Committee chair Julie Owens, a member of the government, opened the Q&amp;A with four leading questions, each of which invited the governor to acknowledge that the Australian economy is performing reasonably well, notwithstanding suggestions to the contrary. Not surprisingly, the governor obliged, agreeing with the proposition of these questions. The governor continues to see the economy as a “glass half full” and referred to his most recent speech of July 24, “The Lucky Country”, where he put the case that Australia is relatively well placed to withstand perceived downside risks. Other questions focused on the currency, the labour market and the mining boom. There were a few key take-outs on these issues. The governor judges the Australian dollar to be “a bit on the high side” but “not dramatically so”. In terms of the risks to the economy, the question was if the dollar was a “long way above” fair value and whether it was above fair value for a “long time”. The governor noted that the RBA has not intervened in the currency market and the tone of his comments could be interpreted as implying that, given current circumstances, there is no plan to do so. As for intervention by the Swiss National Bank, the governor noted the differences between Switzerland and Australia. In an earlier question, on forecasting, the governor referred to the difficulty of predicting the impact of shocks to the economy. He cited the current strength of the Australian dollar despite declines of the terms of trade. With the dollar not playing its normal shock-absorber role, there are important implications for the economy. The governor suggested that it is not inconceivable that the Australian dollar could go higher (due to safe haven effects and generally high rates of return in Australia). The RBA views the labour market not only in terms of national averages, but also sees the labour market as a “patchwork”. The RBA tracks the dispersion of the unemployment rate across regions. This shows that the labour market is currently not more of a patchwork than normal. The governor is surprised that dispersion is not bigger and noted that it could get bigger. On the mining investment pipeline, the RBA’s view on the outlook has not changed in response to recent announcements. The RBA has long expected that the peak of the investment phase will be in the next couple of years and that mining investment as a share of GDP will reach around 9% of GDP. The next phase will be the boost to mining output, the export upswing. As for the Westpac view, we were not surprised by the governor’s comments. Moreover, there was no discernible market reaction to the testimony. In our judgement, additional interest rate relief will be required to ensure robust growth of the Australian economy during 2013. We expect world growth to be sub-trend this year, forecasting a slowing to just 2.8%. The Australian labour market is likely to be soft over the remainder of this year, with the unemployment rate rising to a forecast 5.7%. Structural change, reinforced by the current strength of the Australian dollar despite lower global commodity prices, tighter fiscal policy, both at the state level and federally, household sector deleveraging, and ongoing caution against the backdrop of global uncertainty are all weighing on job prospects. Our central case forecast is for the RBA to reduce the cash rate to a low of 2.75% by the first quarter of 2013, but with the next move not until the December quarter given the RBA’s current wait and see approach.
Bill Evans is chief economist of <a href="https://www.westpac.com.au/" target="_blank">Westpac</a>.
This article originally appeared on <a href="https://www.businessspectator.com.au/" target="_blank">Business Spectator.</a>
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More RBA interest rate relief needed to ensure robust economic growth

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The Reserve Bank board meets next on June 5. We expect that the board will decide to further reduce the overnight cash rate from 3.75% to 3.5%.
We now expect that the low point in this easing cycle will be 2.75% rather than 3.25%, which had previously been our expectation. We expect further cuts in July and August to be followed by a final cut in the fourth quarter.
We do not favour the 50bp cut scenario in June. The decision to cut by 50bps in May was mainly driven by direct concerns around the domestic economy. To us, there appeared to be an element of catch up with the bank holding steady in February–April when the domestic case for a cut was strong. The decision will be built around the impact that the deterioration in global confidence will have on the Australian economy. Since the board meeting in May, US 10-year bond rates are down from 1.9% to 1.6% and the Australian equivalent is down from 3.6% to 2.9%. However, there are a number of key risk events over the next few weeks (Greek elections on June 17, for example) which will be critical for global confidence. We expect a more orderly approach to addressing these issues and thus a more “considered” 25bps move. However, nobody can be particularly confident in gauging the bank's meeting-by-meeting strategy for dealing with these issues.
This is a change in our previous forecast position. We had been expecting that the board would decide to hold rates steady in June, with two further moves expected in both July and August of 25bps each. We now expect that the low point in this easing cycle will be 2.75% rather than 3.25.
These two extra cuts are based on our assessment that the global environment – read Europe – has deteriorated even further since we revised down our call for the low point from 3.75% to 3.25%. In turn, this deterioration is expected to have a more severe impact on confidence in Australia than had earlier been expected.
The stance of policy is currently only mildly expansionary despite the official cash rate being at 3.75%, its lowest level outside the global financial crisis.
We gauge that it is only mildly expansionary because the stance of policy should be assessed in the context of private sector interest rates. With the gap between the Standard Variable Mortgage Rate (SVMR) and the official cash rate now being 140bps wider than in 2007, we assess that the neutral rate has fallen from 5.5% in 2007 to 4.1%. That puts the official cash rate only 0.45% below neutral today – certainly only mildly accommodative.
Another way of assessing this stance is to compare the SVMR with its long-term average. The long-term average SVMR is 7.5%, so the current SVMR, at 7.05%, is also only 0.45% below the average.
A move to 2.75% in the official cash rate is likely to see the rate somewhere between 100bps and 145bps below neutral, depending on the movement in private sector rates in response to the fall in the official cash rate. If there was a full 100bp reduction in private rates then the official cash rate would bottom out 145bps below neutral.
If the reduction in private rates was along the lines of the reduction following the rate cut in May then the official cash rate would bottom out 115bps below neutral. The same logic would mean a SVMR of between 6.05% and 6.5%.
In the three previous easing cycles the official cash rate has bottomed out at 150bps (2008/09); 125bps (2001) and 50bps (1996-97) below neutral.
In those periods the SVMR bottomed out at 5.8% (2009); 6.05% (2001); and 6.7% (1997).
The contrast with 2009 is important. Despite the cash rate falling below its GFC trough, we expect the SVMR will bottom out well above the 2009 level.
In the more recent two periods above, the final rate cut in the cycle coincided with an increase in the unemployment rate of one to two percentage points over the preceding year: 6% to 7% in 2001 and 4% to 5.9% in 2008-09. In 1996-97 the increase in the unemployment rate was only around 0.5ppts, as this was a mid-cycle slowdown rather than a fully- fledged slowdown.
The contrast with those earlier periods the implied stance of policy should also take into account the level of the Australian dollar. In 1997 the AUD/USD was around 68 cents; in 2001 around 50 cents and in 2009 around 70 cents. Clearly the AUD was providing a much more complementary stimulatory support for the economy than in current circumstances where, despite recent weakness, it is still around 98 cents.
 
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The labour market comparison argues that current market pricing is somewhat excessive. Market pricing implies that rates will eventually fall by 140bps (just above 2.25%) which implies a range 125bps to 175bps range below neutral.
Because market expectations are still significantly more aggressive than even this revised view, we still expect fixed rates to increase should our forecasts prove correct. For example, with markets giving a significant probability to a 50bp cut this week we would expect fixed rates to increase modestly if we are correct and "only" a 25bp move is delivered.
Market pricing is reflecting extreme uncertainty, and it is distorted by hedging activity by offshore investors who are not taking a pure position on Australian monetary policy, and it is therefore highly volatile. The uncertainty emanates from:
<ul>
<li>The European outlook, highlighted by the risk of Greece withdrawing from the Euro and excessive instability in the Spanish banking/sovereign nexus.</li>
<li>The state of the Chinese economy and prospects for counter cyclical policies to be a) enacted and b) to gain traction.</li>
<li>Prospects for the US economy where the recovery seems to be losing momentum</li>
<li>The impact on private sector rates in Australia of official rate cuts and the spillover to confidence.</li>
<li>The state of the labour market in Australia following the surprise fall in the unemployment rate from 5.2% to 4.9%.</li>
<li>Prospects for the interest rate sensitive parts of the Australian economy – housing and consumer expenditure and the investment and employment decisions of those firms that service those sectors.</li>
</ul>
Our forecasts are based around a general outlook that while Greece is unlikely to leave the euro the European "scene" will be marked by rolling crises and bailout packages against a back drop of protracted recession in the region. That would avoid the "worst case" scenario that might be partly priced in by the market but would ensure an ongoing drag on confidence, both consumer and business, in this country.
Recent news from Europe has reinforced our concerns for the region, particularly for Greece and Spain. For Greece, the June 17 election looms as a crucial event. The most recent polls point to far-left party Syriza being in the ascendency; if this poll proves correct, then a tense stand-off between the new government and the Troika is almost assured. The eventual outcome is highly uncertain although our base case leaves Greece in the euro.
Spain’s financial ill-health has also rapidly come back to the fore over the past month, primarily due to the need to fully nationalise banking conglomerate Bankia, formed in 2010 through the union of seven stressed regional banks. The €19 billion price tag for the nationalisation is troublesome given the Spanish sovereign’s urgent need for austerity and difficulty in accessing cost-effective capital. However, the reported €180 billion of bad loans (industry estimates) for the system as a whole, combined with the enfeebled financial position of Spain’s regional governments, make a positive outcome increasingly improbable. The need for a support package for Spain would be a serious test for the financial and political capital of the region. Our concerns about the impact of these issues on confidence in Australia have increased in recent weeks.
Recent information out of China has been in accord with our long-held views that the cyclical downturn of the first half of this year will be progressively relieved by policy accommodation. That will see a recovery underway later this year, which will get 2013 started on the front foot. Our forecast for 2012 remains at 7.8% and our 2013 forecast remains 8.7%. A weaker than expected export profile, driven by European problems, would lower near-term growth, but would strengthen the policy response in the second half, which would help the 2013 numbers. We note that the RBA's approach to the Chinese slowdown has been to attribute it to policy choices which can be reversed if needs be. Thus we might expect that the board will have been heartened by the recent move towards growth support in China. That adds up to a position whereby China is a neutral for the policy outlook detailed here.
The US economy is likely to lose further momentum through the Northern spring and into summer. Deteriorating job and domestic demand growth are expected to result in another round of quantitative easing. Further weakness in equity and/or house prices would give further justification for action. As evidenced from the April FOMC meeting minutes, so too would a deterioration in Europe and/or concerns over the potential impact on activity of the 2013 ‘fiscal cliff ’.
Overall, we continue to expect global growth of "only" 2.8% in 2012, compared with official estimates of 3.5%. We expect that recent developments in Europe will prompt a downward revision to official estimates moving towards our own view.
While off shore issues are likely to dominate the board's explanation behind its decision to cut rates this week there is also a domestic case for lower rates. We were surprised by the insipid 0.8% increase in the Westpac Melbourne Institute index of consumer sentiment in May, despite a 35bp cut in mortgage rates – the biggest cut since February 2009. We are wary of the recent fall in the unemployment rate noting the unusual circumstances of a rise in jobs and a fall in the labour force. We note that Treasury is forecasting the unemployment rate to reach 5.5% by mid-2013, with, presumably, a higher rate earlier in the year. We also point to the Westpac Melbourne Institute index of unemployment expectations which has "job insecurity" on a par with 2001. While the headline unemployment rate looks solid the underlying story around the labour market is perplexing.
In the year to April total employment has lifted by 87.3k jobs. However, 71.7k were part-time jobs and 57.3k were female. So the employment growth this year has been concentrated in part-time and/or females jobs. It is also worthwhile noting that to date, WA is still the centre of growth for employment having added 35.7k to its workforce this year.
 
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Now this is a far from a spectacular number (just 21k per month) and the fall in the unemployment rate has been driven by the fall in participation rate. If the participation rate had held constant since September last year, the unemployment rate would have peaked at 5.75% in Feb 2012 and even in April, following a run of better jobs numbers, the unemployment rate would still be 5.5%. Overall we are not inclined to alter our forecast that the unemployment rate will exceed 5.5% by year's end.
Recent data prints are also uninspiring. Retail sales for April (down 0.2%); spending on renovations and additions (down 4.7% in the March quarter) and residential building (down 1.9%) and dwelling approvals (weak even abstracting for the WA element) have all been weak despite the rate cuts in November and December. While investment plans in mining from the Capex survey for 2012-13 remain strong we estimate that both manufacturing and services investment are expected to decline in 2012-13.
On house prices, the RP Data series (apparently favoured by the RBA, and also our favourite measure) estimates that house prices have continued to fall in 2012, despite the rate cuts, being down by 0.8% in to April, with high frequency prints showing that prices fell further in May.
We expect there will also be adequate scope from inflation to further lower rates. With growth pressures mainly in the mining sector where the "escape" valve of imports can be used to contain inflation pressures and with those industries being affected by the high AUD and the deleveraging of the household sector needing to raise productivity, the inflation outlook is particularly encouraging. We expect another respectable productivity and unit labour costs outcome in the March quarter national accounts, due the day after the RBA meets in June. In its May statement on monetary policy the RBA forecast that inflation will remain near the bottom of the 2–3% band over the next year.
We have always expected rates to bottom out in the second half of 2012, with rates on hold for most of 2013.
That was not the case in 2009 when rates got to a more stimulatory level than we expect this time and fiscal policy both domestically and offshore was providing a huge complementary boost. In particular, the government's boost to housing with the First Home Owners Grant was very important.
However, as we progress through 2013, the interest rate debate will shift from anticipating additional rate cuts to the timing of the next RBA tightening cycle. On this, we make two key points.
The rate outlook for 2013 will differ from that during late 2009. On the earlier occasion, the view was that rates needed to be normalised, that borrowing rates needed to be returned to around average levels, in an orderly fashion. We assess that the stance of policy needs to remain on the expansionary side throughout next year. Notably, the global economy will remain fragile and vulnerable to shocks, even if the headline growth numbers return to around trend, as we anticipate. Domestically, the consumer is in a deleveraging phase, which means the housing sector needs more supportive settings. Moreover, the Australian economy is in a transition phase, with the relatively high dollar driving significant structural change. The tightening of monetary conditions associated with the high dollar needs to be taken into consideration.
Equally, it would be inappropriate for the Australian economy, which is on the right side of the shift in global growth to the Asian region, to leave interest rates around historic lows for a prolonged period. As the significant confidence drag from Europe begins to fade, but not disappear (markets become more comfortable with the likely adjustment process in Europe), rates will need to move off their lows. We envisage that the RBA will need to begin raising the cash rate during the second half of 2013. This would have the cash rate at 3% on our forecasts by year's end.
Outlook for the Australian dollar
The AUD has recently reached our base September quarter forecast of 98 cents. At present there are a number of downward pressures operating on the currency – rate differentials, commodity prices, the shift back into trade deficit, weak risk appetite globally, diminished FX reserve accumulation in emerging markets – that will not dissipate in the short term. Therefore we feel that there is more to come in this depreciation phase. We now see a 96 cents rate by end September, with the strong likelihood that it goes lower than that rate in the meantime. In the short-term, we expect the USD index to show considerable strength, the yen's safe haven status to shine through as Japanese investors exhibit strong home bias in a low yield world, while the euro will understandably find few adherents. Asian currencies will also remain under pressure for the moment.
We do however retain the view that AUD/USD will be back above parity by year's end, in line with a pullback in the USD index. That call is largely predicated on an expected series of stimulus policies in Europe; China; and the US that will gain traction, particularly through the December quarter,. The combined effects of the more accommodative global policy environment will reverse the negative dynamics current swirling around the AUD (and other growth assets, like Asian currencies and commodity prices). We see the currency reaching $1.02 by the end of the year and moving even higher in early 2013, before levelling out at mid-year in the $1.05–$1.06 area.
Bill Evans is chief economist of <a href="https://www.westpac.com.au/" target="_blank">Westpac</a>.
This article originally appeared on <a href="https://www.businessspectator.com.au/" target="_blank">Business Spectator.</a>
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Interest rates to fall to a low point of 2.75% by the end of this year: Westpac’s Bill Evans

<a href="https://www.apartments.com.au/developments/broadbeach-qld-4218">Broadbeach</a> offers plenty of reasons to live vertically, but moving from a substantial family home into an apartment can expose the compromises of high-density living. Privacy, room for guests and usable living space tend to matter more when an apartment is intended as a permanent home rather than an occasional coastal base.

A typical residential floor at <a href="https://www.apartments.com.au/new-apartments/the-eveleigh-broadbeach-7-9-surf-parade-broadbeach-qld-4218">The Eveleigh</a>, on Surf Parade,&nbsp;contains just four apartments. The 94-residence development by <a href="https://www.apartments.com.au/developers/hirsch-faigen">Hirsch &amp; Faigen</a> is predominantly made up of expansive three-bedroom homes, with a limited collection of half-floor penthouses above.

Across the apartment floors, <a href="https://www.apartments.com.au/architects/rothelowman">Rothelowman</a> has used the relatively limited number of residences to give each home greater access to natural light and outlook. Living spaces extend towards full-height glazing, while a series of bay windows frame selected views across the Pacific Ocean, city and hinterland rather than treating the building edge as a continuous wall of glass.

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[smartcode_project:default project_id=149670 project_image_fid=360965]

“The apartment floors deliver a collection of homes that embrace controlled outlook via a series of bay windows deliberately framing moments of view,” Rothelowman Director Kim Lowman said.

From outside, those projecting forms contribute to the tower’s faceted profile. Strong horizontal and vertical elements establish its proportions, while the changing position of the sun alters the light, shadow and reflection across the façade throughout the day.

The same attention moves inside the apartments, where the material palette combines warm timber, natural stone, metallic detailing and softer curved forms. Kitchens sit within the main living zone, with stone island benches, integrated joinery and European appliances, before the living areas extend towards the glazing and the outlook.

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[smartcode_project:default project_id=149670 project_image_fid=360981]

Three genuine bedrooms provide room to accommodate family and guests, while two secure car spaces and storage address some of the practical considerations that can become more noticeable when moving from a larger home. Feedback from the display suite has centred on the warmth and restraint of the interiors, with buyers commenting that the residences feel like homes rather than conventional coastal apartments.

A limited collection of half-floor penthouses occupies the upper levels, increasing the scale of the living spaces and adding private balconies and elevated finishes. From this position, the outlook extends between the ocean and hinterland.

Outside the private residences, The Eveleigh separates its shared spaces between the podium and rooftop. The podium is centred on wellness, with subtropical landscaping surrounding a swimming pool and pool terrace, yoga garden, private gymnasium, sauna and hot and cold plunge facilities. Landscaped retreats and pavilions provide additional places to sit away from the main recreation areas.

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[smartcode_project:default project_id=149670 project_image_fid=360966]

Higher in the building, a rooftop pavilion and private dining suite sit alongside resident lounge, barbecue and outdoor dining areas, opening towards panoramic views across the ocean, city and hinterland.

“Buyers are no longer just looking for an apartment, but a lifestyle where they can relax, reset, and enjoy a balanced way of living,” Hirsch &amp; Faigen Director of Sales Matt George said.

Interest to date has come from established owner-occupiers and interstate lifestyle purchasers, including buyers planning a future move to the Gold Coast. Many are coming from larger homes and want to reduce ongoing maintenance without giving up space for family and guests, privacy, two car spaces or the ability to entertain at home.

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[smartcode_project:default project_id=149670 project_image_fid=360969]

Much of that daily life can also take place beyond the building without requiring a drive. Kurrawa Beach and Pratten Park are an easy walk from Surf Parade, while Pacific Fair, Oracle Boulevard, The Oasis, restaurants, cafés, entertainment and public transport are also within walking distance.

The Eveleigh is Hirsch &amp; Faigen's fourth Gold Coast development since entering the market in 2021, following The Hemingway at Palm Beach, The Emerson at Kirra and Yves at Mermaid Beach. Each of the preceding projects sold out before completion.

“Broadbeach had been on our radar throughout our time operating on the Gold Coast,” the developer said. “Following our projects in Palm Beach, Kirra and Mermaid Beach, Broadbeach represented the natural next step for the business.”

The Surf Parade site brought together proximity to the beach, protected coastal outlooks and walkability to dining, shopping and recreation. Hirsch &amp; Faigen also identified the street as an emerging premium residential address, with enough separation from Broadbeach's busier destinations to retain a quieter environment at home.

The Eveleigh is now under construction by Maxcon, with completion forecast for mid-2028. Three-bedroom residences are currently available from $2.87 million.

[smartcode_project_cta:default project_id=149670]

Joel Robinson

The Eveleigh brings house-like apartments to Broadbeach

A long-stalled Campbelltown development site is back in play, with new plans for 139 apartments set to supersede a mixed-use scheme approved almost a decade ago but never built.

The new proposal for 28 Cordeaux Street would deliver 116 market and 23 affordable apartments in a part 14-storey building, bringing a substantial new project into a Campbelltown market where new apartment supply remains limited.

Plans have been filed over the 3,092 sqm corner site at Moore-Oxley Street, around 600 metres from Campbelltown Railway Station and the city-centre retail core.

The site already carries a mixed-use residential approval dating to 2016. Doroch Architects has now been engaged on a larger replacement scheme, which is progressing as a State Significant Development Application following a Housing Delivery Authority determination in August 2025.

The apartment mix comprises 39 one-bedroom, 72 two-bedroom and 28 three-bedroom residences. Two-bedroom apartments make up just over half of the project, while three-bedroom homes account for 20 per cent.

<img alt="First look: New 139-apartment plans revive long-stalled Campbelltown city centre site" data-entity-type="file" data-entity-uuid="136dd5b9-3791-4da6-9e31-76f533f5b4de" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Campbelltown%20da2.png?VersionId=LgOSy9nwf5u.MGswBBwaGGxuX8QpHSl_" />

Of the 139 apartments, 23 will be delivered as affordable housing under the in-fill affordable housing provisions of the Housing SEPP. The affordable component represents 15 per cent of the residential gross floor area and will be managed by a registered Community Housing Provider.

Doroch has sought to break the scale of the building into two distinct elements, with a masonry podium of around four storeys establishing the street edge before the residential tower steps back above.

The corner position has shaped that approach. Cordeaux Street faces toward the commercial and civic centre, while Moore-Oxley Street leads into the lower-scale residential neighbourhood to the south, and the design verification report describes the site as "bridging the commercial core to the north and established residential areas to the south."

The podium will be expressed predominantly in face brick, while the upper levels shift to brushed and grooved concrete cladding with darker metal detailing. Recessed sections, deep balcony edges and landscaping break down the upper form, with an approximately 11.8-metre setback to the northern boundary addressing the adjoining St Peters Anglican School.

<img alt="First look: New 139-apartment plans revive long-stalled Campbelltown city centre site" data-entity-type="file" data-entity-uuid="c8b3d2d3-c561-4bfc-a5d9-a68c0c10dac1" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Campbelltown%20da1.png?VersionId=AeAEyJU02Gk2k5noUj2StziCvdQ7fW4B" />

Campbelltown has been starved of new residential developments in the last decade.

The only other notable development set to come to market this year is ALAND's Queen Square, a mixed-use precinct on over two hectares that will comprise apartments above a vibrant ground-level retail and hospitality dining precinct.

First look: New 139-apartment plans revive long-stalled Campbelltown city centre site

First Look: Sherlock Construction pitches apartments for low-rise Deception Bay

Queensland builder-developer MAYD has revealed the first look at its major North Kirra beachfront development, lodging amended plans that reduce the number of apartments and increase the proportion of larger residences.

The project is planned across a substantial 4,742 sqm amalgamated site spanning seven lots at <a href="https://www.apartments.com.au/new-apartments/2-6-pacific-parade-bilinga-qld-4225">2-6 Pacific Parade</a> and 27-33 Golden Four Drive in Bilin​ga, directly opposite Nor​th Kirra Beach.

<a href="https://www.apartments.com.au/developers/mayd-group">MAYD</a> secured the site for $32.5 million in 2025, in what was one of the Gold Coast's largest property transactions of the year.

The development will be delivered across two stages, with the first stage carrying an estimated gross realisation value of around $360 million.

The latest amendments seek to reduce the overall apartment count and shift the project further toward the owner-occupier market, with larger residences designed for buyers wanting considerably more space than traditionally offered in a beachfront apartment.

The residential mix will include townhomes, oversized two-bedroom apartments, substantial three-bedroom residences and four-bedroom homes.

MAYD has appointed Cera Stribley to lead the architecture and interiors, with the Melbourne-based design practice drawing on the beachfront setting through a series of ocean-facing terraces and heavily landscaped balconies.

Strong horizontal forms and curved balconies will define the exterior, with subtropical landscaping integrated throughout the building to soften the built form and increase the connection between the residences and the beachfront.

The project will also include an extensive collection of resident wellness and lifestyle facilities, continuing the broader shift across the Gold Coast's luxury apartment market toward larger homes supported by resort-style amenity.

<img alt="MAYD" data-entity-type="file" data-entity-uuid="d1bcbb05-e659-4b47-8bd4-1e595315e2ad" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-27%20at%202.05.03%E2%80%AFPM.png?VersionId=jj0XEud1X1DuLt7_KyElhjMdZGOXmLHP" />

MAYD Founder Todd Mould said North Kirra was increasingly appealing to buyers attracted to the more established, lower-density character of the southern Gold Coast.

"North Kirra presents one of the most compelling luxury residential opportunities currently emerging in Australia, combining absolute beachfront with the character and authenticity that buyers are increasingly seeking, and the same sense of tight-knit community that defined Burleigh and Currumbin perhaps 10 or 15 years ago," Mould said.

"With Gold Coast Airport on its doorstep, it also offers a level of accessibility that broadens its appeal across almost every market demographic."

The project comes as the southern Gold Coast continues to attract an increasing share of high-end apartment development and buyer activity.

Kirra in particular has emerged as one of the region's more tightly held beachfront markets, with its relatively low-density character, established surf and hospitality scene and proximity to Gold Coast Airport differentiating it from the higher-density markets further north.

Mould said those characteristics had informed the approach MAYD and Cera Stribley had taken to the project.

"We've worked closely with Cera Stribley to create a vision that is deeply connected to its surroundings," he said.

"Inspired by the coastline itself, the architecture has been shaped around space, privacy and resort-style living, creating a collection of homes that reflects the next generation of luxury on the southern Gold Coast."

MOTIV Managing Director Carly Cottam, who has been appointed to market the project, said buyer attention had continued to move south along the Gold Coast.

"Purchasers who may once have defaulted to Broadbeach, Main Beach or Surfers Paradise are increasingly recognising the value of a genuine beachfront location that offers lower density, strong amenity and a more established sense of community," Cottam said.

"Kirra has a powerful combination of growing demand and genuine scarcity. Beachfront supply is inherently constrained, the area remains relatively low density, and buyers are increasingly placing a premium on locations that feel established, uncrowded and authentic rather than heavily developed."

Cottam said the proximity to Gold Coast Airport was also proving increasingly important for interstate and second-home buyers.

"Being minutes from Gold Coast Airport makes it particularly compelling for interstate buyers, frequent travellers and second-home purchasers who can access an authentic coastal lifestyle almost immediately after stepping off a flight."

The acquisition takes MAYD's active development portfolio to more than $500 million, with the North Kirra project representing one of its largest undertakings to date.

MAYD is targeting an early 2027 launch.

First look at MAYD's North Kirra mixed-use precinct

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Castle Hill, the longtime hub of the Hills District, has been one of the major beneficiaries of Sydney's Metro expansion, with improved connectivity helping drive continued population growth, development and buyer demand across the Hills District.

But despite that growth, the suburb has seen relatively few major new apartment projects brought to market over the past 18 months.

Hills District developer Reve Group is looking to fill that gap with <a href="https://www.apartments.com.au/new-apartments/nova-r-ve-castle-hill-2-garthowen-crescent-castle-hill-nsw-2154">Nova Rêve</a>, a major new mixed-use precinct on the corner of Garthowen Crescent and Old Castle Hill Road, a short walk from Castle Hill Metro Station and Castle Towers.

[smartcode_project:default project_id=152737 project_image_fid=377679]

The project will comprise three residential towers alongside a hotel, restaurants, cafes and a skybar, more than 1,600 sqm of ground-floor retail and almost an acre of landscaped gardens.

It represents the largest project undertaken by Reve Group, the development arm of the Kassis family, which has been building across the Hills District for more than 30 years through Kassis Homes.

[smartcode_project:default project_id=152737 project_image_fid=377675]

Nova Rêve also represents a significant step up from the family's first apartment development, Grand Rêve, which was delivered nearby on Garthowen Crescent.

Grand Rêve introduced larger, house-like apartment layouts and premium inclusions including Wolf and Sub-Zero appliances to the Castle Hill market.

Nova Rêve takes that approach to a precinct scale, combining the residential component with hospitality, retail and substantial public and resident landscaping.

[smartcode_project:default project_id=152737 project_image_fid=377685]

Reve Group Managing Director Sam Kassis said the project reflected the family's three decades of building in the Hills, which has evolved from trophy homes on quarter-acre blocks to larger-scale apartment development.

"Grand Rêve was our first apartment project here and it showed us what this pocket of Castle Hill could be. Nova Rêve is the refinement of that idea: not just apartments, but a place the whole suburb can use," Kassis said.

A key part of that approach is the hotel, which has been designed to operate as an amenity for the wider Castle Hill community rather than solely hotel guests.

It will include restaurants, cafes, skybars and all-day dining, alongside conference and event facilities catering to business functions, community groups and private events.

At ground level, more than 1,600 sqm of shops and cafes will open onto the surrounding streets and landscaped areas.

Almost an acre of gardens designed by Land and Form Studios will run through the precinct, incorporating pathways, seating, barbecue areas and children's play spaces.

[smartcode_project:default project_id=152737 project_image_fid=377680]

Reve Group's Romio Georges said creating an active ground plane had been central to the planning of Nova Rêve.

"There are gardens with pathways, barbecues, seating and play areas, shops and cafes opening onto the street, and a hotel with restaurants and a skybar that anyone in Castle Hill can walk into," Georges said.

The project's elevated position on one of Sydney's highest ridgelines will also provide apartments with outlooks toward the Sydney skyline, surrounding parkland and the Blue Mountains.

More than 80 per cent of the apartments will occupy corner positions, with Turner responsible for both the architecture and interiors.

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[smartcode_project_cta:default project_id=152737]

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Bill Evans

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