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<img src="https://counter.theconversation.edu.au/content/63765/count.gif" alt="The Conversation" width="1" height="1">
GUEST OBSERVER
Outgoing Reserve Bank Governor Glenn Stevens has delivered a strong warning about the need to face up to the issue of repairing the budget.
Stevens, who leaves his post next month, said that “we are kidding ourselves” if we thought a tough discussion about this challenge could be avoided. He highlighted the present gap between a general commitment to action and the unwillingness to make specific changes, after special interests kicked into the debate.
It was no coincidence that the path to budget balance had become a long one, he said. “Very low nominal GDP growth looms large in subduing revenue growth, because of the terms of trade decline. But when the terms of trade stabilise, weaker potential real growth per head of population will still be a problem.”
“More difficult choices will need to be made along the path of budgetary adjustment,” Stevens said.
“At present general public debate starts with commitment to the need for reform and for putting public finances on a sustainable medium-term track. But when specific ideas are proposed that will actually make a difference over the medium to long term, the conversation quickly shifts to rather narrow notions of ‘fairness’, people look to their own positions, the interest groups all come out and the specific proposals often run into the sand.”
“If we think this rather other-worldly discussion will not have to give way to a more hard-nosed conversation, we are kidding ourselves. That will occur should there be a moment of crisis, but it would be better if it occurred before then”.
Speaking in Sydney, Stevens stressed the limits of monetary policy to dial up growth. He said in the end the most powerful growth from low interest rates came when “someone, somewhere, has both the balance sheet capacity and the willingness to take on more debt and spend”. For policy makers looking for low rates to boost growth, the question was which entities in the economy could do this safely.
In Australia, gross public debt for all levels of government totalled some 40% of GDP, while gross household debt was about 125% of GDP.
“This is not unmanageable – but nor is it a low number. It’s an interesting question which sector would have the greater capacity to take on more debt, in the event that we were to need a big demand stimulus.”
He suggested the government had the capacity to take on more debt to stimulate growth – but such added debt had to be for the right purposes. “Let me be clear that I am not advocating an increase in deficit financing of day-to-day government spending. The case for governments being prepared to borrow for the right investment assets - long-lived assets that yield an economic return – does not extend to borrowing to pay pensions, welfare and routine government expenses, other than under the most exceptional circumstances”.
The gap in the recurrent budget had to be closed over a period, because increasing public debt that was not held against assets would become a problem.
“The point I am trying to inject here is simply that popular debate in Australia about government debt and how we limit or reduce it seems so often to be conducted while largely ignoring the size of private debt. To outside observers this seems odd. Foreign visitors to the Reserve Bank over the years have tended to raise questions about household debt much more frequently than they have raised questions about government debt. So the way ahead is going to have to involve a rather more nuanced consideration of all these issues,” he said.
Stevens said the Reserve Bank had run some risks by pushing interest rates so low – last week’s cut took the cash rate to 1.5% - but noted that there were always risk in action, or inaction. “Our job is not to avoid risk – it is to balance the various risks. To date, I think we have done that,” he said.
“Moreover, with the whole developed world in such a prolonged period of ultra-low rates, it would have been fanciful to think we were not going to be affected. But in the end, we are living in a world in which the ability of monetary policy alone to boost growth sustainably is very likely to be a good deal more limited than we might wish.”
Looking back, Stevens, who has been 10 years in the job, said that “over the past decade and in a very volatile world, Australia has achieved the inflation target, avoided a major economic downturn, seen remarkably little variability in real economic activity in the face of enormous shocks, experienced a fairly low average rate of unemployment, and had a stable financial system”.
The challenges ahead for Australia included sustaining a stronger growth outlook. To do this “more than adjustments to interest rates will be needed”.
Michelle Grattan is professorial fellow, University of Canberra and author for The Conversation. She can be contacted <a href="https://theconversation.com/profiles/michelle-grattan-20316" target="_blank">here</a>.
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jchancellor-FAypfDUnLy

Reserve Bank governor calls for hard talk about budget repair

Outgoing Reserve Bank Governor Glenn Stevens highlights limitations and constraints of a super-low interest rate environment

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<img src="https://counter.theconversation.edu.au/content/62630/count.gif" alt="The Conversation" width="1" height="1">
GUEST OBSERVER
Negative gearing was one of the federal election campaign’s fiercest battlegrounds.
While the Labor opposition claimed that the major beneficiaries of the tax policy were almost all in the very highest earnings bracket, the Coalition attacked any proposed changes, saying they would “smash” house prices and unfairly punish “mum and dad investors”.
The fact is, negative gearing can have surprising outcomes.
Using game theory, senior lecturer in mathematics Stephen Woodcock constructed four scenarios that demonstrate exactly who benefits from negative gearing.
You can watch a video explaining it <a href="https://www.youtube.com/watch?v=x2PTCQ2j1mQ" target="_blank">here</a>.
<h2>What happened</h2>
The game maximised the desirability of occupying the best house they could afford, whether this was by buying or renting.
The ultimate outcome was that richer players used negative gearing to keep purchasing multiple houses – forcing others to buy progressively inferior houses and/or rent from others. Some missed out completely and were forced to rent.
At the end of the game, one buyer owned all the houses, with all other players forced to rent from them.
And interestingly, in this game, negative gearing increased prices.
<h2>What does the future hold?</h2>
“It is easy to see how curious (and less than ideal) ownership patterns can arise when tax policies incentivise speculation in the property market. What is less clear is what can, or should, be done now,” says Dr Woodcock.
Dr Woodcock points out that both Sydney and Melbourne rank in the world’s five least affordable cities to buy a house. Despite record low interest rates, first home buyers are at the lowest level in years. First home owner grants have done little to help this and, arguably, have only served to increase prices further.
Instantly scrapping negative gearing would almost certainly cause a huge drop in prices, which would be manifestly unfair to people who made investment choices assuming that tax advantage would be available.
Labor’s proposed restriction of the benefit to newly built properties onlywould provide some relief. It has been argued, though, that this would encourage speculation in certain areas.
“A tax policy which avoids incentivising curious outcomes for society, yet retains basic fairness for existing investors would require subtle measures and crossbench support. Albeit by the narrowest of margins, the Coalition’s retention of power might mean that any such reforms are several years away.”
Interestingly, it was noted earlier this year that federal politicians – from both major parties – averaged more than two investment properties each.
Charis Palmer is deputy business editor, The Conversation and can be contacted <a href="https://theconversation.com/au/team#charis-palmer" target="_blank">here</a>.
Georgina Hall is editor, The Conversation and can be contacted <a href="https://theconversation.com/au/team#georgina-hall" target="_blank">here</a>.
Helen Westerman is business and economy editor, The Conversation.
Jenni Henderson is assistant editor, Business and Economy, The Conversation and can be contacted <a href="https://theconversation.com/au/team#jenni-henderson" target="_blank">here</a>.
Wes Mountain is deputy multimedia editor, The Conversation and can be contacted <a href="https://theconversation.com/au/team#wes-mountain" target="_blank">here</a>.
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Property 101: The curious incentives and consequences of negative gearing

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<img src="https://counter.theconversation.edu.au/content/63452/count.gif" alt="The Conversation" width="1" height="1">
GUEST OBSERVER
Ecosystem services – the natural processes that allow Earth to sustain life and provide us with everything we have and see – are facing an uncertain future.
Between 1997 and 2011, the global value of ecosystem services declined by up to US$20 trillion per year as a result of changing land use. To put that in context, the world’s entire GDP is currently just under US$74 trillion.
Our research shows that, in the Asia-Pacific region, this downward trend is likely to continue unless there are significant policy changes. By 2050, we predict that ecosystem service values could drop by 34% from their 2011 base value of US$13 trillion.
But, more optimistically, we also forecast that ecosystems could grow in value by 24% by mid-century, if policies are put in place to safeguard these crucial environmental values.
<h2>An Asian century (of ecosystems)</h2>
The Asia-Pacific region has historically followed the global trend in ecosystem depletion. But the future doesn’t have to be like the past. The decisions we make as a society will determine what our world will look like in that future.
With that in mind, our research focused on a range of land-use scenarios to try to forecast the consequences of various social, environmental and economic policies.
We used these scenarios to derive estimates of land-use change (urban, cropland, forest, grassland, wetland, desert), population, GDP and other variables such as inequality up to the year 2050. Changes in total value of ecosystem services in these scenarios were estimated to be due to two factors: the change in area covered by each ecosystem type; and the change in the “unit value” – the total value of all the marketed and non-marketed ecosystem services, per area, per year of each ecosystem type due to degradation or restoration. 
In the Asia-Pacific region, Afghanistan shows the greatest potential losses and gains, as do other countries that are more susceptible to desertification. At the same time, these countries also have the greatest potential for reversing land degradation.
On the other hand, in this region, countries like Japan and New Zealand have the least potential for fluctuations in their ecosystem service values. This is because they are already highly developed and potentially have more stable climates.
<h2>Australia’s prospects</h2>
Australia, second only to China in ecosystem services value, also shows an extensive range of values among our four scenarios. Starting with a terrestrial ecosystem services value of US$3.4 trillion per year in 2011 (roughly three times Australia’s GDP that year), we forecast that by 2050 ecosystem services could grow in value by as much as 21%, or decrease by up to 29%.
This translates to either a gain of US$700 billion per year or a loss of US$980 billion per year – a figure that’s not far short of Australia’s current annual GDP.
The scenarios used incorporate a range of world views and policies, and the impacts of these on the entire, integrated system, including population, energy use, equity, environmental change, climate change and more. Our research features a country-by-country breakdown of the outcomes of each scenario, although it is impossible to separate out the impact of individual policies, especially given the differences in each country.
<h2>The consequences and solutions</h2>
The loss of ecosystem services will be felt most strongly by the poorest in any society, as they depend most directly on ecosystem services. They are the first to feel the effects when those services begin to disappear, and the least able to replace or ameliorate the loss. Increasing ecosystem services, on the other hand, would increase sustainable human well-being.
Around the world, the focus on ecosystem services has been growing quickly. Recent major policy reforms in this direction include a White House memo directing US federal agencies to incorporate ecosystem services into their planning, investment and regulations.
Other countries have also begun to incorporate ecosystem services in their policies. The European Union has mandated all member countries to produce national ecosystem service assessments, for use in policy and decision-making.
At the international level, the United Nations has set up an Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services, analogous in structure and function to the Intergovernmental Panel on Climate Change. The international Ecosystem Services Partnership has also been established to co-ordinate and facilitate the exchange of information and expertise across the world.
We have taken ecosystem services for granted for far too long. The UN Sustainable Development Goals, adopted last year by all UN countries, include specific calls to promote sustainable use of terrestrial ecosystems, to halt and reverse land degradation, to ensure clean water and food security, as well as to safeguard life both on land and in the oceans.
If we are taking these goals seriously, we need to put natural capital and ecosystem services “on the books” as a major contributor to sustainable well-being.
Ida Kubiszewski is senior lecturer at Crawford School of Public Policy, Australian National University and can be contacted <a href="https://theconversation.com/profiles/ida-kubiszewski-142545" target="_blank">here</a>.
Paul Sutton is director of Graduate Studies, University of Denver and can be contacted <a href="https://theconversation.com/profiles/paul-sutton-96333" target="_blank">here</a>.
Robert Constanza is professor and chair in Public Policy at Crawford School of Public Policy, Australian National University and can be contacted <a href="https://theconversation.com/profiles/robert-costanza-145490" target="_blank">here</a>.
Sharolyn Anderson is senior lecturer, School of Natural and Built Environments, University of South Australia and can be contacted <a href="https://theconversation.com/profiles/sharolyn-anderson-288110" target="_blank">here</a>.
All are authors for The Conversation.
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Asia-Pacific ecosystems could lose a third of their value by 2050 without action

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<div class="column">GUEST OBSERVER</div>
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<div class="column">In his final speech as Reserve Bank Governor, Glenn Stevens highlighted the limitations and constraints of a super-low interest rate environment.</div>
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<div class="column">“I have serious reservations about the extent of reliance on monetary policy around the world. It isn't that the central banks were wrong to do what they could, it is that what they could do was not enough, and never could be enough, fully to restore demand after a period of recession associated with a very substantial debt build-up”.</div>
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 Home loans: The number of loans (commitments) for budding home owners (owner-occupiers) rose by 1.2 percent in June. Excluding the refinancing of dwellings, the number of loans was up by 2.1 percent.</div>
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 Consumer confidence: The Westpac/Melbourne Institute survey of consumer sentiment rose by 2 percent in August to 101.0. The confidence index is up 1.6 percent on a year ago. The survey was conducted August 1st-4th.</div>
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 The housing finance data has implications for banks, building material suppliers and retailers. The consumer confidence figures have implications for finance providers, retailers, and companies dependent on consumer and business spending.</div>
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 What does it all mean?</div>
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 The Reserve Bank Governor has used his last public forum as a seminal speech to discuss a number of wide ranging issues from inflation targeting, the effect super low interest rates, a review of the past decade and also what “normal” growth may be in the current environment. The Governor did ask a lot of questions but as is the case with the Reserve Bank left it up to the public for interpretation.</div>
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 However the section of the speech that focussed on looking ahead, discussed the constraints of monetary policy. The Governor highlighted that monetary policy on its own is not enough to boost growth significantly. In fact a combination of public and private investment would be needed to support growth over the medium term. Interestingly the Governor did suggest that the current inflation target is still the right methodology to support longer-term growth outcomes.</div>
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 When it comes to the outlook for rates the Governor suggested that Australia is not in isolation and the negative and super low interest rates on a global front has also pushed the Reserve Bank in that direction.</div>
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<div class="column">“We in Australia have done fewer such things, but we are connected to the world, and the effects of policies adopted elsewhere condition the policy choices available to us”.</div>
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 The latest data on the housing sector could be classified as somewhat old news given that it predates the Reserve Bank interest rate cut last week. What it does do is provide a useful barometer for housing activity earlier this year. And in that context housing activity remains solid. The value of loans to build new homes stood at a just under $3 billion – easing modestly from the record high of $3.45 billion in March. There is a healthy pipeline of work, with owner occupiers likely to dominate home building and buying.</div>
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<div class="column">Interestingly the proportion of fixed rate loans fell sharply <ul>
<li>over the past two months to just 13.4 per cent – a six month</li>
<li>low. In addition the number of home loan refinancing transactions fell for the past two months, although it remains well above decade averages. It may be the expectation of further rates cuts seems to have resulted in home owners holding off from fixing rates. No doubt with the latest rate cut and intense competition by lenders it is likely that more home owners will re-evaluate their home loans in coming months. The anticipated lift in refinancing will eventually provide additional savings to household budgets – injecting fresh spending power into the economy.</li>
</ul>
The average loan size recorded a sizable 5.7 per cent in June. In fact the gain was the strongest percentage increase in nine months. The May rate cut may have been catalyst for the lift in home loan size, providing mortgages holders with the opportunity to comfortably service larger loans. It should be noted that the average home loan is also influenced by home prices, composition of borrowers and the geographic location of home purchases. The monthly consumer confidence data is now merely useful as a check against the timelier weekly survey. The ANZ-Roy Morgan survey has the same number of survey respondents as the monthly series, has been running over the same number of years and covers the same questions but is conducted each week. And what is clear from both surveys is that confidence levels are a little higher than where they were a month ago. The consumer confidence reading on both fronts remains “ok”, with consumers modestly optimistic about life. 
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What do the figures show?
Housing finance - number
The number of loans (commitments) for budding home owners (owner-occupiers) rose by 1.2 per cent in June after falling by 0.8 per cent in June. Excluding the refinancing of dwellings, the number of loans was up by 2.1 per cent.
The number of new home loans was up by 6.7 per cent on a year ago. Loans by owner-occupiers for the construction of homes rose by 2.1 per cent in June.</div>
<div class="column">Loans to buy newly-erected dwellings rose by 2.7 per cent.</div>
<div class="column">Loans for the purchase of established dwellings (excluding refinancing) rose by 1 per cent.</div>
<div class="column">The number of refinancing transactions fell by 0.4 per cent. </div>
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Housing finance - value
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<li> The value of new housing commitments (owner occupier and investment) rose by 2.3 per cent in June after rising by 1.8 per cent in May.</li>
<li>Owner-occupier loans rose by 1.8 per cent while investment loans rose by 3.2 per cent.</li>
<li> The value of loans by owner-occupiers and investors to build new homes fell by 1.3 per cent in June after rising by 3.5 per cent in May.</li>
<li>The value of loans to build new homes eased further from the record highs of $3.45 billion in March to $2.99 billion in June.</li>
</ul>
Housing finance – other statistics The proportion of first-time buyers in the home loan market rose from a 12-year low of 14.2 percent in May to 14.3 percent in June. (However the figures take into account refinancing loans and as such the figures may misrepresent the true situation). 
The proportion of fixed rate loans fell from 14.7 percent to 13.4 percent in June. And the average home loan across Australia stood at $360,100 in June, up 3.5 percent on a year ago. 
Westpac/Melbourne Institute consumer sentiment:
The Westpac/Melbourne Institute index of consumer confidence rose by 2 percent in August to 101.0. The confidence index is up 1.6 percent on a year ago.
The current conditions index rose by 1.3 percent while the expectations index rose by 2.4 percent.
Four of the five components of the index rose in August: The estimate of family finances compared with a year ago was up by 1 per cent;  The estimate of family finances over the next year was up by 4.3 per cent;
<ul>
<li> Economic conditions over the next 12 months was up by 3.5 per cent;</li>
<li> Economic conditions over the next 5 years was down by 0.7 per cent;</li>
<li> The measure on whether it was a good time to buy a major household item was up by 1.6 per cent.</li>
</ul>
Gender &amp; demographics: Men (index reading of 104.1, up 1.5 per ent) were still more optimistic than Women 98.1, up 2.4 percent). The sentiment index for young people rose by 3.9 percent to 112.9 in August. Across the other demographics: 25-44 years (index 103.0, up by 1.1 percent); 45 years plus (index 96.9, up 2.1 per cent).   Housing outlook: A good time to buy a dwelling? – Index up 10.1 per cent in the month and up 9.2 per cent on the year.
  Housing Finance data is produced monthly by the Bureau of Statistics and shows commitments by lenders, such as banks, to provide finance for housing purposes. The lending figures relate to those looking to buy or build homes to live in as well as those seeking to buy or build homes for investment purposes. Generally people get their finance organised first, so the figures are regarded as a leading indicator on the housing market.
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  Westpac and the Melbourne Institute release the Index of Consumer Sentiment each month. According to Melbourne Institute: “The survey of consumer sentiment was first undertaken in 1973 and was conducted on a quarterly basis until 1976, a six-weekly basis from 1976 to 1986, and has been conducted monthly ever since.” Confident consumers may be more inclined to spend, especially on major items.
What are the implications for interest rates and investors?
  The housing sector will continue to be a key driver of growth, given the amount of home building on the horizon. Home prices are lifting, but investors need to be more cautious about the outlook. Arguably we are near the point of maximum velocity. The plethora of cranes dotting skylines across the country indicate that plenty of sparkling new apartments will be coming onto the market over the next few years</div>
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<div class="column">CommSec expects a further interest rate cut in November. </div>
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<div class="column">Savanth Sebastian is an economist for <a href="https://www.commsec.com.au/" target="_blank">CommSec</a></div>
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RBA Governor questions benefit of lower rates: CommSec's Savanth Sebastian

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Anvil Creek, in Lower Hunter Valley, is being offered for sale through Savills Australia with offers closing September 13 for the 423 hectare shovel-ready holding.
Savills expects strong interest from developers in the aged care, freehold residential, golf course tourism and vineyard arenas.  
<a href="https://anvilcreek.com/" target="_blank">Anvil Creek</a> has been owned since 1980 by the Windt family who have secured rezoning after 15 years of planning for the site at 324-325 Camp Road, Allandale and 995 Lovedale Road, Allandale.
The listing agents Stuart Cox and Neil Cooke noted Conybeare Morrison International-designed approvals for 1,364 residential dwellings; 85 tourist villas, a 150 room hotel; an 18-hole Graham Marsh designed international standard golf course and clubhouse; an 8,700 sq m commercial and retail precinct, a 16,000 sq m education precinct, and 20-hectare working vineyard.  Ben Azar, Savills Capital Transactions &amp; Cross Border Investments suggests the large scale diverse redevelopment nature will appeal to Asian developers who are experienced in this type of project throughout Asia.
Anvil Creek is 1.5 hours from Sydney and under 40 minutes to the Newcastle International Airport, being located only one kilometre south of Greta.
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423ha Hunter Valley Anvil Creek holding listed as shovel-ready

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GUEST OBSERVER 
The Westpac Melbourne Institute Index of Consumer Sentiment increased by 2.0 percent in August from 99.1 in July to 101.0 in August. 
The survey was conducted over the first four days of August, covering the Reserve Bank’s August 2 announcement of a 0.25 percent cut in the overnight cash rate from 1.75 percent to 1.5 percent.
The response to this development has been much more muted than we saw in May when the Bank last cut the rate, from 2.0 percent to 1.75 percent.
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On that earlier occasion the Index lifted by an impressive 8.5 percent from 95.1 to 103.2. That was an exceptionally large positive response and much stronger than the average rise following rate cuts historically. 
That can be explained by a number of factors. Firstly, there was a larger surprise element to the May decision with, arguably, significantly less intense media speculation than we saw in August. Secondly the standard variable mortgage rate offered by most banks was reduced by the full 0.25 percent, whereas in August the four major banks only reduced variable rates by 0.10- 0.14 percent. Finally, the Index was coming from a significantly lower starting point in May (95.1) than in August (99.1). 
Another development that may have unnerved respondents in August has been political unease. With the government having been returned with a wafer thin one seat majority in the House of Representatives and considerable change in the Senate, respondents might also be somewhat uncertain about future prospects around potential political stability. 
Finally we have to accept that as interest rates go progressively lower some respondents, particularly those who may not have a mortgage, may become more unnerved about the signal that record low rates is sending about the economy. For example, in today’s result, while respondents with a mortgage responded strongly, there was a 1.3% fall in the confidence of those respondents who wholly own their properties. 
That negative might have been expected to be even bigger for respondents that have low debt and rely on interest income. However, the decision by banks to raise some term deposit rates following the RBA rate cut has instead given a notable boost – sentiment amongst retirees in particular posted a strong 7% rise. 
Notably, consumers do not expect to see more interest rate relief. In our special question around the outlook for mortgage rates, 37% of respondents expect mortgage rates to rise over the next 12 months; 36 percent expect rates to be steady; and just 27 percent expect further rate cuts. 
Overall the lift in the Index is still consistent with an improved outlook for the Australian economy. We are now back in the range where optimists outnumber pessimists. Over the last thirty months there have only been eight when optimists have been in the ascendency with three of those months figuring in the last four. 
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In particular, prospects for the housing market appear to have been boosted by the rate cut. The confidence of those respondents who hold a mortgage lifted by 7 percent. 
Westpac’s Index of ‘time to buy a dwelling’ rose by 10.1 percent to be up by 9.2 percent over the last year. In particular, the key states of NSW and Victoria showed strong improvements. The Index lifted by 19 percent in NSW and by 12.8 percent in Victoria. This is particularly significant for the key Sydney market where the Index is now 61 percent above the average of the second half of 2015 when confidence collapsed in the Sydney housing market. 
The Westpac Melbourne Institute House Price Expectations Index was basically flat for the month but, consistent with the ‘time to buy’ index is signalling considerably more confidence than we saw at the start of the year. This Index has increased by 28 percent since the end of 2015. 
Despite the lift in overall confidence prospects in the labour market deteriorated somewhat. The Westpac Melbourne Institute Unemployment Expectations Index increased by 1.7 percent from 138.8 to 141.2 (recall that higher reads indicate higher expectations for unemployment and a worsening outlook for labour market conditions). The Index is still 4.4 percent below its level from a year ago. However the promising improvement we saw in the Index near the end of last appears to have stalled over the course of this year. 
Both of the components of the Index that assess family finances increased in the month. The ‘family finances vs a year ago’ sub- index lifted by 1.0 percent and the ‘family finances over the next 12 months’ sub-index was up by 4.3 percent. This is the second highest read on the outlook for finances since October 2013 although there has been no comparable outperformance for the backward- looking component, which is 9.6 percent below its level from a year ago. Note that in its Statement on Monetary Policy the Reserve Bank gives most attention to this component of the Index. 
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Short term confidence in the economy improved. The ‘economic conditions over the next 12 months’ sub-index lifted by 3.5 percent to be up by 10.5 percent over the year. While there was little movement in the ‘economic conditions over the next 5 years’ sub-index (down 0.7 percent) that Index is also up by an encouraging 11.5 percent over the year. 
Retail prospects improved marginally with the ‘time to buy a major item’ sub-index up 1.6 percent (although still down 2.7 percent on a year ago).
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The Reserve Bank Board next meets on September 6. Having cut rates at its last meeting the Board is almost certain to keep rates on hold in September. However it is clear from the Bank’s recent Statement on Monetary Policy that it holds an easing bias. That sentiment has encouraged markets to expect a further cut in November following the release of the next inflation report. The case for a cut is based on Australia’s ongoing low inflation environment. 
However, by November, consistent with some of the messages in this survey we expect that economic conditions will have firmed sufficiently for the Bank to be more patient with its inflation objective. It may recognise that rigid adherence to the current inflation target of 2–3 percent might not be the best way to run policy in this current low inflation world. 
Accordingly we expect that the Bank will decide to hold rates steady in November
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BILL EVANS is chief economist of <a href="https://www.westpac.com.au/" target="_blank">Westpac</a>. Justin Smirk is ‎senior economist, Westpac Group and can be contacted <a href="https://www.westpac.com.au/about-westpac/westpac-group/" target="_blank">here</a>.
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Case for rate cuts based on Australia’s ongoing low inflation: Westpac's Bill Evans

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GUEST OBSERVER
Global: Brexit has had less impact on the global economy than many feared. Financial markets are generally either back to pre-referendum levels or even stronger, and the direct economic fall-out looks like being largely restricted to a UK recession and modest spill-over to European trading partners.
Having dodged yet another bullet, the global economic upturn continues along at its sub-trend pace with only a few inconclusive signs that things are finally about to get better. We have marked down our US forecasts in the wake of disappointing second quarter data but East Asia is doing slightly better and the outcome is 2016 forecast global growth stays at 2.8 percent.
Inflation generally remains sub-target, central banks have used up much of their policy ammunition (although very unorthodox measures like “helicopter money” remain) and the structural factors that have weighed on global growth remain. China and India are driving more than half of global growth, the former by returning to time-honoured pump priming measures that pile up debt and the latter by printing statistics that many view as erring on the side of optimism in measuring GDP.
Global financial markets have digested the latest shock – the UK’s “Brexit” vote – quite well. Equity markets fell in the big advanced economies initially in the wake of the Brexit vote, but are back above their pre-referendum level.
 
Market volatility spiked as the unexpected poll outcome became clear but it soon subsided and is now not only below pre-referendum levels but is very low by historical standards. Interest rates are also exceptionally low with negative Government long bond rates and either very low or negative central bank policy rates in several key economies. Corporate bond spreads have fallen below pre-Brexit levels in the US and UK.
 
Bank lending surveys do not point to much impact of Brexit outside the UK either. Central bank policy has tended to disappoint those looking for quick action to either address deflation and/or slow growth risks (in the Euro, Japan and UK) or move the US further along on its much anticipated rate tightening cycle.
 
The Bank of Japan’s monetary easing measures disappointed the market, the ECB preferred to wait and see how its last raft of asset buying fared. The Bank of England has cut rates but will need to move again and the Fed will not raise rates until December.
 
Global growth remains sub-trend and moderate, but there are a few brighter signs. Although the monthly data bounces around, the pace of growth in the CPB’s measure of world industrial output has picked up slightly, following a soft March quarter. Production in the Asian emerging market economies – who buy the bulk of Australia’s exports - has been looking less subdued. Export volumes from the emerging markets have also been climbing out of a particularly soft patch whereas exports from advanced economies remain very weak.
 
We track industrial growth across a large sample of big economies and some data is available up to June. This data confirms that industrial growth, while still subdued by historical standards, has been gradually rising since the start of the year. Industrial output growth in the 3 months to January was only 0.6 percent yoy, by June it was up to 11⁄4 percent yoy – far from strong and well below its long-run annual average of around 3%, but better than it was.
 
The monthly business surveys are also consistent with ongoing moderate growth. Purchasing manager surveys for the big advanced economies show July readings not far off those in June, despite a big post-Brexit hit to UK business sentiment. Activity was better maintained in services than in manufacturing in the big advanced economies and the former is by far the biggest sector in these economies.
 
Turning to the big emerging markets, latest Chinese business reports are consistent with unchanged growth but they point to slightly more optimism for the future. Indian surveys remain little changed and well below what would be expected in such a fast growing economy. Taken overall, the surveys suggest global growth staying around its moderate pace.
 
Growth in the big S. Hemisphere commodity exporters has been hard hit by the weak primary product prices that stem from subdued global growth and supply growth. Recent $US weakness has helped lift some commodity markets and their $US export receipts are stabilising.
 
Our view of the world economy has not changed. There have been downward revisions to US data as well weaker than expected second quarter US economic numbers, reflecting the way that US firms met demand by running down stocks. We expect this to be only a temporary disappointment with growth running around 2% through the next couple of years.
 
Nevertheless, the low second quarter reading still contributes to a cut in our 2016 US growth forecast from 1.8 percent to 1.5 percent. We have also cut our Euro-zone numbers for 2017 as the predicted UK recession hits demand for their exports and rising populist sentiment delays investment plans. East Asian emerging market growth is looking a little stronger.
 
 
Australia: Australian economic growth is expected to remain resilient at 2.9 percent in 2016 and 2017, despite significant variation across industries and states. However the risks to the outlook going into 2018 are becoming increasingly apparent, as LNG exports flatten off at a high level and the dwelling construction cycle turns down.
 
Against these headwinds, the economy may require additional policy action to support growth, especially if the RBA hopes to see inflation return to within its 2-3 percent target band. We now expect the RBA will see the need to provide further support through two more 25bp cuts in May and August 2017 (to a new low of 1 percent), which should be enough to stabilise the unemployment rate at just over 5 1⁄2 percent and prevent economic growth from dropping below our forecast of 2.6 percent in 2018.
 
Monetary policy deliberations may then turn to the possible use of non-conventional policy measures if the outlook deteriorates further. Additionally, persistent weakness in CPI inflation could potentially trigger a rate cut even sooner than expected.
 
Business sentiment has shown great resilience to external shocks in the July NAB Monthly Business Survey, with firms choosing to remain focussed on the positive trends within their own business.
 
The business confidence index remained positive, despite easing slightly. Business conditions dropped back as well, but are still at an elevated level that is well above the long run average. While trading conditions and profitability have been the main driver of elevated business conditions, both of these contributed to the deterioration during the month. Encouragingly, the employment component managed to hold onto the gains seen in June, suggesting ongoing employment growth. Inflation measures in the Survey generally stayed soft, although there was a surprise spike in retail prices. Leading indicators were mixed, with forward orders a little softer but spare capacity was down.
 
Employment growth for June was moderate (7.9k), although there was a notable detraction from sample rotation effects. The moderate increase and a rise in the participation rate saw the unemployment rate edge up modestly to 5.8 percent.
 
Additionally, average hours worked continued to trend lower, pointing to a build-up of spare capacity. By state, labour market conditions remain mixed, with further evidence that mining states are lagging further behind. Forward indicators are generally quite positive. The employment index from the June NAB Survey was consistent with employment gains (of 18k per month) in the next six months. In light of our forecasts for economic growth, and subdued wages growth, we expect the unemployment rate to stabilise at around 5.6 percent from end-17. 
 
Overall, household spending has been holding up relatively well, despite the recent slowdown in employment growth and low wages growth. That said, higher frequency data such as retail sales, our monthly NAB Online Retail Index and NAB Business Survey have lost some momentum. While soft wages growth will remain a constraint, we continue to expect reasonably resilient household consumption growth in coming quarters, supported by the recent RBA rate cut (albeit only partially passed on by banks) and resilient house prices, especially in Sydney and Melbourne.
 
National dwelling prices (hedonic) continued their rise in July, although recent strength reflects adjustments made for the quality of houses hitting the market. Prices may continue to see support in the near term from the recent RBA rate cut and solid population growth in NSW and Victoria. However, we still believe that the major eastern housing markets will see relatively flat / modest growth in prices into 2017 as affordability, slowing rents and prudential constraints, as well as the growing supply of housing (especially apartments) begin to bite.
 
Lower interest rates, less spare capacity and positive business confidence should all lend support to non-mining business investment, which was relatively lacklustre in Q1 2016. Indeed, the NAB Survey is showing good rates of non-mining capex activity and future capex plans. Also, growth in business credit has steadily improved in the last two years, although it appears to have lost momentum in the past two months.
 
Other indicators suggest a more mixed outlook for business investment. The value of non-residential building approvals has not been very responsive to interest rate cuts, although the trend has started to improve modestly. We remain optimistic that non-mining investment will improve, albeit gradually. On dwelling investment, the pipeline in apartment construction remains substantial, and will fuel strong rates of dwelling investment well into 2017, but will drag on activity from 2018.
 
New shipments of LNG and fewer supply disruptions should boost export figures from July onwards. However, depressed LNG prices threaten the export outlook. Other commodity prices have risen over the month to be well above the low levels at the turn of the year. Meanwhile, the lower AUD and rising wealth in Asia continue to support short term visitor arrivals and international student enrolments.
With inflation forecasts still very low and the RBA showing its hand as a committed inflation targeter, it is seemingly less worried reducing its valuable monetary policy ammunition than we thought. We now expect two cuts of 25bps in May and August 2017 – although persistent weakness in CPI inflation could trigger a rate cut sooner. By that time, the RBA will be looking towards 2018, for which our forecasts also suggest some loss of momentum in economic activity (although the RBA’s forecasts are more optimistic for now).
Our forecast for more aggressive easing next year than priced in the market provides a counter to other upside AUD risks. This leaves us comfortable maintaining our existing AUD forecasts, with AUD/USD falling to just below 70 cents in H2 2017 before gradually recovering.
Alan Oster is group chief economist, National Australia Bank, and can be contacted <a href="https://business.nab.com.au/author/alan-oster/" target="_blank">here</a>.
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RBA showing its hand as a committed inflation targeter: NAB's Alan Oster

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Real estate agency New Zealand Sotheby’s International Realty (NZSIR) is rolling out a nationwide expansion plan.
The new offices at Waiheke Island and Kerikeri take the total to 15 offices, including new-look offices in Matakana and Blenheim.
There is also a major expansion of its head office in Queenstown launching this month and a new Auckland flagship office in Parnell scheduled for later this year.
An office in Takapuna is due to open in November.
It all comes as the specialist agency celebrates 10 years in business, after co-owners Mark Harris and Julian Brown bought the NZ rights to the prestigious global brand and launched it from Queenstown in 2005.
Back then, Harris and Brown were the only agents for NZSIR.
The duo have facilitated some of NZ’s most high-profile property sales, such as Eagles Nest in the Bay of Islands for over $20 million, Matakauri Lodge in Queenstown and individually hold residential sales records in the Southern Lakes region.
There are now more than 100 licensed NZSIR agents and employees.
NZSIR currently has more than $500m worth of property listed and is on track to complete $750m in sales this financial year. The national average sale price is $1.5 million. 
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Sotheby's New Zealand expands to 15 offices

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<img src="https://counter.theconversation.edu.au/content/63638/count.gif" alt="The Conversation" width="1" height="1">
GUEST OBSERVER
A plethora of new and personalised ways of getting around cities are emerging – electric bikes, motorised scooters, electric vehicles, car sharing and re-interpretations of the taxi by Uber.
How might we realise the potential of these transport disruptions? How does the combination of culture, regulation and technology shape sustainable transport futures? The extent to which technologies align with social, political and policy norms is a critical factor in their uptake and success.
Technology is politically, socially and culturally mediated. Its success relies on how it relates to existing lifestyles and aspirations. Technologies need to be accommodated in the ways we want to move around cities. The most amazing technological intervention will quickly atrophy if it is disconnected from daily needs and desires.
Regulatory settings can impede or foster new technologies. We can make space for different ways of moving around – such as cycleways, footpaths and roads. We can prohibit or encourage disruptive forces, as so starkly evident with Uber. We can set tax and other pricing mechanisms, as incentives or disincentives for modes of transport.
Some argue that new technologies are so disruptive because they have no predecessor to show us the way. But examples are emerging that show us where society, regulation and technology have or have not aligned, underpinning their success or failure.
<h2>Car sharing – an obedient disruption</h2>
Car sharing in Australia’s inner cities has been phenomenally successful. There are an estimated 50,000 car sharers across the country.
The disruptions of car sharing are mild: it draws on technologies and skills shared with other aspects of social life. The concept of sharing is disruptive but easily accommodated; regulation adapted quickly to the subtle shifts required. It is an obedient disruption, and this obedience is one of the pillars of its success.
Car sharing is technologically disruptive as it relies on smart technologies to function. It is booked online, unlocked by a smart card, automatically paid by credit card and invisibly monitored via GPS.
It is socially disruptive. Car sharing relies on people deferring or giving up car ownership. Importantly, it asks us to give up the emotional and cultural attachments we have to cars. Evidence is mounting that millennials are swapping out the car for the phone as a status symbol.
Car sharing does not significantly challenge regulatory frameworks or political interests. It does rely on parking space, though, and local governments have quickly developed car-sharing policies to balance the needs of sustainable transport with access to on-street and off-street parking. While providing dedicated parking space to car-share organisations has been politically controversial, the regulatory supports were easily identified and mobilised.
Car sharing is a case where the lifestyles, values, technologies and regulation are aligned – a sustainability success story.
<h2>Personal mobility devices – a disruption in limbo</h2>
Personal mobility devices, known as PMDs, are more disruptive and a less successful sustainable transport option thus far in Australia. These are personal, battery-powered or motorised modes of transport designed for an individual to use on footpaths or shared paths. They include Segway, YikeBike or two-wheel motorised “Razor” scooters.
These devices allow the rider to travel short distances quickly without physical effort. Their small size makes them easily transferable between transport. This means they can bridge the “first and last mile” – between home and transit and work.
Despite their popularity, which is visible on city streets, PMDs are unable to be legally ridden on roads, footpaths, shared paths or cycleways in most Australian states. They do not meet vehicle standards and cannot be registered or legally used on roads.
Most of these devices are too dissimilar from bicycles, even electric bikes, to be classed as bicycles. Motorisation and wheels also rule out their classification as a pedestrian.
With the exception of some devices for tourism, PMDs remain in limbo in most Australian states. There was a move in Queensland in 2013 when a policy framework to regulate the use of PMDs was implemented. These regulations specified what a PMD is and how/where it can be used.
PMDs were defined as pedestrians to be used in pedestrian environments. Strict rules applied. Riders must:
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not exceed 12 kilometres per hour;
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be 12 years or over; and
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wear a helmet.
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In short, regulatory settings were modified to allow these new forms of technology, though not without debate.
How might these means of moving about the city be accommodated or become part of ordinary transport? For these devices to be used as transport, they need to get people travelling faster than walking without compromising safety.
<h2>Driverless cars – are we ready?</h2>
The stuff of science fiction 50 years ago, some technological optimists today predict driverless cars will be in our cities within five years. Indeed, autonomous cars are already here. New cars have adaptive cruise control, lane departure warnings, collision avoidance and parking assist.
Robotic vehicles are increasingly common in agriculture and mining. With researchers turning their attention to the realities of life with driverless cars, regulation and social impact are once again emerging as key issues.
A recent assessment by the National Transport Commission of Australia found that 716 provisions from two conventions, 32 acts and 21 regulations need to be addressed before autonomous vehicles become commonplace. Fundamentally, legal and insurance frameworks need to rethink a driver, and who is responsible when there is no driver.
There are also considerable privacy implications of tracking and the ubiquitous sensing and data collection that these vehicles require. While the technology is almost there, our policy frameworks are not quite there.
Research also shows that people are not quite ready for autonomous cars. Car makers are working in more sophisticated ways to ensure that autonomous cars talk to passengers, telling them when they are and are not in control and what is around them.
Businesses, on the other hand, are increasingly ready for autonomous cars, especially through shared transport. In the US, General Motors has invested significantly in ride-sharing business Lyft. General Motors expects autonomous cars to be operating within ten years.
Uber is conducting its own trials of autonomous vehicles. Increasingly, it appears that economic and social conditions are more likely to support driverless buses, at least short term.
Evidence is mounting that our cities, citizens, businesses and policymakers are getting ready for a future where transport technologies that are neither car nor public transport are commonplace. Mismatches remain between technology, social life and regulation, but their alignments, especially around shared transport, are proving successful.
Robyn Dowling is professor and associate dean Research, University of Sydney and author for The Conversation. She can be contacted <a href="https://theconversation.com/profiles/robyn-dowling-90213" target="_blank">here</a>.
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Smart cities: does this mean more transport disruptions?

A landmark former orphanage site in Surrey Hills could be transformed into a new residential community under plans lodged by <a href="https://www.apartments.com.au/developers/antipodean-land-developments">Antipodean Land Developments</a> that would deliver 76 apartments and townhouses while restoring some of the suburb's most significant heritage buildings.

The burgeoninng Melbourne-based developer has submitted plans for the 9,158 sqm site at 1 Kent Road and 24 Durham Road, home to the former St Joseph's Home for Destitute Children, a historic institutional complex dating back to the late 19th century. The proposal seeks to adaptively reuse several heritage buildings while introducing two new four-storey residential buildings set within extensive landscaped grounds.

Designed by <a href="https://www.apartments.com.au/architects/woods-bagot">Woods Bagot</a> and Kerstin Thompson Architects, the project has been conceived as a contemporary residential village embedded within a restored heritage precinct. The development team describes the design approach as "The Village in the Garden," with new buildings positioned among mature landscaping by OCULUS and significant heritage structures.

<img alt="First look: Antipodean Land Developments plans heritage-led apartment community in Surrey Hills" data-entity-type="file" data-entity-uuid="44ec8c1b-c0b6-44ae-859e-5811b3e6a023" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Untitled%20design%20%281%29.png?VersionId=p.p1_KFh4iQoV4nisdnPfQBAsWNi7m79" />

The proposal would deliver 76 dwellings comprising a mix of apartments and duplex-style residences, significantly increasing housing supply on one of the largest privately held residential landholdings in Surrey Hills. The development includes 127 car spaces, 24 bicycle spaces and more than 1,000 sqm of communal amenity, with the existing chapel building earmarked for conversion into resident facilities.

According to the planning submission, the project centres on the restoration and adaptive reuse of the site's most significant heritage assets, including the original c.1889 St Joseph's building, the chapel designed by architect Augustus Andrew Fritsch, and the historic brick perimeter walls and entry gates. The proposal also incorporates the retention of other contributory buildings including the former infirmary and school building.

Tract Consultants, in the planning report accompanying the application, said the scheme had been shaped through extensive heritage analysis and design development.

"The shared vision for the Site by the project team has culminated in a scheme which successfully breathes life back into a historic site while delivering upon the objectives of Victoria's Housing Statement in a carefully curated and contextually responsive manner."

<img alt="First look: Antipodean Land Developments plans heritage-led apartment community in Surrey Hills" data-entity-type="file" data-entity-uuid="7263b7d8-95ea-400f-9531-6ca7d22c3c33" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Untitled%20design%20%282%29.png?VersionId=4cR1tiWOsDpgxEOwZi5vVFcyvvOsYkIE" />

The proposal is being assessed under Victoria's Significant Residential Development with Affordable Housing pathway. As part of the application, three per cent of the project's residential development cost would be contributed to the Social Housing Growth Fund. The development would also provide a diverse mix of one, two and three-bedroom residences targeting a broader range of buyers than typically found in Surrey Hills' detached housing market.

Sustainability initiatives include an anticipated 66 per cent BESS score, natural cross-ventilation to 80 per cent of apartments, 28 per cent deep soil landscaping and a canopy cover outcome exceeding local planning requirements. The proposal also sets aside more than 1,083 sqm for communal indoor and outdoor resident amenity spaces.

<img alt="First look: Antipodean Land Developments plans heritage-led apartment community in Surrey Hills" data-entity-type="file" data-entity-uuid="33fad46f-fe26-4d0a-acfd-6b776e1c6a3d" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Untitled%20design.png?VersionId=D9F6WVSyYCtGvSUmith35LRp6R7PQkw_" />

Planning documents describe the property as one of the largest underutilised residential sites in Surrey Hills, arguing it presents a rare opportunity to introduce "missing middle" housing in an established inner-eastern suburb while preserving and revitalising a significant heritage precinct.

Antipodean Land Developments has built a reputation for design-focused residential projects across Melbourne, particularly in the medium-density sector. Previous developments include Neighbourhood in Brunswick East, delivered with Breathe Architecture, and Balfe Park Lane, designed by Kerstin Thompson Architects.

They've been very active in site acquisition as they build out their future development pipeline. They recently launched Thornubury House, 45 apartments above a mix of commercial, retail, and food and beverage tenancies, and have plans for a boutique project in Fitzroy and another <a href="https://www.apartments.com.au/news/vic/antipodean-plan-apartments-for-deepdenes-missing-middle-on-whitehorse-road">"missing middle" project</a> on Deepdene's Whitehorse Road.

Joel Robinson

First look: Antipodean Land Developments plans heritage-led apartment community in Surrey Hills

Developer <a href="https://www.apartments.com.au/developers/auyin-property-development">Auyin</a> is the latest to turn to the Victorian Government's Development Facilitation Program in an effort to secure approval for its long-planned, mixed-use project in Elsternwick.

In 2018, Auyin lodged plans with Glen Eira City Council for a 14-storey building, however Council approved a reduced eight-storey scheme. A subsequent VCAT appeal in 2019 upheld the eight-storey height limit.

The project was later amended to nine storeys, but Auyin is now seeking to revive something closer to its original vision. The developer argues that the planning context has evolved significantly over the past decade, particularly within the Elsternwick Activity Centre, where higher-density development has increasingly been encouraged along Glen Huntly Road.

The proposal would transform the 1,239 sqm site at <a href="https://www.apartments.com.au/new-apartments/7-12-horne-street-elsternwick-vic-3185">7-15 Horne Street</a>, opposite Elsternwick Railway Station, into a 13-storey residential and retail development designed by CBG Architects, with 40 apartments

The site currently comprises three commercial properties.

<img alt="First look: 13-storey mixed-use tower planned for Elsternwick activity centre" data-entity-type="file" data-entity-uuid="5f465dd4-509b-4082-a669-0253b313914b" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/elsternwick%20podium.png?VersionId=72frWi0SmQ5AVJ3ARRhX5ILUYObhTm7x" />

The proposed apartment mix comprises 25 two-bedroom and 15 three-bedroom residences above 200 sqm of retail space at ground level. Residents would have access to a 90 sqm wellness facility, a 351 sqm communal indoor and outdoor terrace on the third level, and extensive landscaped areas throughout the development. A publicly accessible 135 sqm plaza would be created on the north-east corner of the site, providing seating, landscaping, and a new gathering space adjoining Horne Street.

The design adopts a four-storey podium that references the finer-grain character of the surrounding streetscape, with the upper tower recessed behind generous setbacks on all boundaries.

<img alt="First look: 13-storey mixed-use tower planned for Elsternwick activity centre" data-entity-type="file" data-entity-uuid="e637e763-2abc-4c34-a0aa-5c7ad36fae18" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/elsternwick%20open.png?VersionId=J1AoOpZgTyaF.KeeFSX6lMjEScX8KKRi" />

A key element of the proposal is the reconfiguration and widening of the surrounding laneways. Vehicle access would be retained from Lois Lane, with upgraded pedestrian connections linking Ross Street and Horne Street. The development would provide 58 residential car spaces, two retail car spaces, and 52 bicycle spaces across two basement levels and ground-floor facilities.

Architecturally, the building draws inspiration from the established character of Elsternwick Village. The façade combines dark charcoal brickwork, textured concrete, bronze-toned metal detailing, and extensive planting integrated into podium and tower levels. The design also incorporates a chamfered corner treatment and publicly accessible plaza intended to strengthen pedestrian activity around the station precinct.

Elsternwick's last new development completion was&nbsp;EVA Elsternwick by Pitard late last year. <a href="https://www.apartments.com.au/developers/milieu-property">Milieu</a> is working away on its nature-led neighbourhood, <a href="https://www.apartments.com.au/new-apartments/elsternwick-gardens-by-milieu-8-gordon-street-elsternwick-vic-3185">Elsternwick Gardens</a>, on Gordon Street, with its first stage expected to complete next year.

First look: Auyin seeks mixed-use apartment project in growing Elsternwick Activity Centre

<a href="https://www.apartments.com.au/new-apartments/otium-parkdale-123-125-como-parade-east-parkdale-vic-3195">Otium Parkdale</a>, the 13-residence boutique development by&nbsp;<a href="https://www.apartments.com.au/developers/huxtable-property">Huxtable Property</a>, has entered its final stages of delivery, with completion expected within the coming month and more than half of the residences sold.

The Como Parade East project is nearing the finish line at a time when opportunities to purchase new apartments in <a href="https://www.apartments.com.au/developments/parkdale-vic-3195">Parkdale</a> remain exceptionally limited. Fewer than 10 per cent of dwellings in the bayside suburb are apartments, making developments like Otium a relatively rare addition to a market traditionally dominated by detached housing.

[smartcode_project:default project_id=134974 project_image_fid=5427]

The three-level development comprises 13 residences, including ten two-bedroom apartments and three larger three-bedroom homes, all positioned above a secure basement car park.

Designed by <a href="https://www.apartments.com.au/architects/almeida-architects">Almeida Architects</a> with a strong connection to its coastal surroundings, Otium combines red brick, exposed concrete and dark metal detailing with integrated landscaping and greenery. Expansive glazing, generous balconies and terraces have been incorporated throughout the design to maximise natural light and reinforce indoor-outdoor living.

Inside, the residences feature engineered European oak flooring, natural and reconstituted stone benchtops, Bosch kitchen appliances, ducted heating and cooling, lift access and secure entry systems. The larger three-bedroom residences on the upper level have been designed with house-like proportions, while the two-bedroom apartments prioritise functionality, flexibility and low-maintenance living.

[smartcode_project:default project_id=134974 project_image_fid=5421]

The project is now in its final stages, with <a href="https://www.apartments.com.au/builders/labco">Labco</a> completing the remaining landscaping and external finishing works following the completion of the residences' interiors.

Otium's location within the heart of Parkdale continues to underpin its appeal. Residents will be just steps from local cafés, restaurants, shops and the newly elevated Parkdale Station, while the beach is less than a kilometre away.

With the project tracking ahead of schedule, buyers can currently secure a residence with a five per cent deposit and benefit from settlement terms of up to eight months. The advanced stage of construction also provides buyers with the opportunity to walk through the near-complete residences and experience the quality and finishes firsthand ahead of completion.

[smartcode_project_cta:default project_id=134974]

Otium Parkdale enters final month before completion as rare apartment opportunity nears sellout

A new boutique apartment development is entering the market in <a href="https://www.apartments.com.au/developments/chermside-qld-4032">Chermside</a>, with Brisbane-based developer <a href="https://www.apartments.com.au/developers/ausdev">Ausdev</a> bringing 33 residences to a well-connected pocket of Brisbane's north.

<a href="https://www.apartments.com.au/new-apartments/parkdrive-apartments-chermside-25-sammells-drive-chermside-qld-4032">Parkdrive Apartments</a>, at 25 Sammells Drive, will comprise a mix of one- and two-bedroom residences positioned within walking distance of Westfield Chermside, The Prince Charles Hospital, and Bradbury Park.

Established in 1989, Ausdev has a long-standing presence across both development and construction, with Parkdrive Apartments representing its latest residential project in Brisbane's northern suburbs.

[smartcode_project:default project_id=152125 project_image_fid=363778]

The development has been designed around open-plan living and natural light, with residences featuring stone benchtops, timber cabinetry, BOSCH appliances, and private balconies that extend the living areas outdoors.

Kitchens are positioned as the centrepiece of the homes, incorporating natural material palettes and integrated appliances, while bathrooms have been designed with a focus on functionality and understated finishes.

Residents will have access to a communal barbecue and entertaining area on Level 3, providing shared outdoor space within the development. Secure parking and lift access are also incorporated into the building.

The project will deliver a limited collection of 33 apartments, with one-bedroom residences priced from $749,000.

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Beyond the building itself, the location places residents within easy reach of several of Chermside's key amenities. Bradbury Park is around 350 metres away, while Westfield Chermside is approximately 1.3 kilometres from the site. The Prince Charles Hospital is located within 750 metres, and the Chermside Bus Interchange is around 1.5 kilometres away, providing connections across Brisbane.

Parkdrive Apartments adds to the growing residential pipeline in Chermside, a suburb that continues to evolve as a major retail, healthcare, and transport hub for Brisbane's north.

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Ausdev introduces boutique Parkdrive Apartments to Chermside's growing centre

<a href="https://www.apartments.com.au/developers/skymark-group">Skymark</a>'s boutique Cronulla development Solis has secured a 10-year Latent Defects Insurance policy through Resilience Insurance, providing buyers of the 16-residence building on Ewos Parade with structural and waterproofing protection that extends a decade beyond the building's completion.

Currently under construction and due for completion in late 2027, <a href="https://www.apartments.com.au/new-apartments/solis-cronulla-8-ewos-parade-cronulla-nsw-2230">Solis</a> is one of a small number of new developments in the Sutherland Shire to carry Resilience LDI coverage, a distinction that carries increasing weight as buyer confidence in the off-the-plan sector continues to be shaped by how developers stand behind their product.

Latent Defects Insurance, which entered the Australian market in 2022 when Resilience Insurance was approved to offer the cover, protects buyers against major structural or waterproofing defects for ten years post-completion. Unlike traditional statutory warranties, it operates as a first-resort policy, if a covered defect arises, the insurer responds directly, without the buyer needing to pursue the builder or developer through a lengthy claims process.

Resilience Insurance CEO Corey Nugent has noted that the product addresses something fundamental to the new apartment market.

"The overarching feedback from prospective buyers in the new development space is that they want more confidence and assurances around the quality of the build," Nugent says.

"Resilience Insurance Latent Defects Insurance not only gives them complete peace of mind for 10 years, but it shows the developer they are buying from is standing by their product."

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For Solis, the Resilience LDI policy adds a meaningful layer of accountability to an already considered project. The development comprises nine two-bedroom and seven three-bedroom residences, including one dual-level three-bedroom apartment, across a five-storey building on Ewos Parade, positioned between Shelly Beach and South Cronulla.

Garden apartments connect directly to private landscaped courtyards, while upper-level homes capture beach views to the east from level four and above.&nbsp;

All 16 residences include at least one balcony or courtyard, and select apartments on the upper floors feature bar areas and secondary flexible living spaces.

Hiba Sander, Managing Director of Skymark, says Solis offers a rare balance, nestled between the quiet beauty of secluded beaches and the lively charm of South Cronulla's esplanade.

"It's a place to choose your pace and live gracefully, seaside'," Sander says.

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The architecture, designed by <a href="https://www.apartments.com.au/architects/ida-design-group">IDA Design Group</a>'s Michael Trinh, draws from the natural erosion patterns of <a href="https://www.apartments.com.au/developments/cronulla-nsw-2230">Cronulla</a>'s sandstone headlands, translating the organic forms of the coastline into soft curves, pavilion-style massing, and a material palette chosen for longevity in a salt-tinged environment.&nbsp;

Textured natural stone, soft renders, and timber-look battens reference the tones of the surrounding cliffs, while the building has been oriented to maximise natural light and passive ventilation, with primary living spaces facing north and east to capture morning sun and sea breezes.

"At Solis, our aim was to create architecture that feels quietly confident, grounded in natural materials like stone and timber, and elevated by light and landscape," Trinh says.&nbsp;

"The buildings are designed to sit gently within their coastal surrounds, with expansive glazing and abundant greenery creating a seamless dialogue between inside and out."

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Interiors by <a href="https://www.apartments.com.au/architects/hot-black">Hot Black</a> carry the same material language through to every room. Kitchens feature integrated Gaggenau appliances, sculpted stone benchtops, and Lo &amp; Co joinery, while bathrooms feature natural stone, timber, and brushed metal finishes.&nbsp;

Hot Black Founder and Design Director Sophie Safrin describes the intent as one of considered restraint: "At Solis, every detail has been thoughtfully considered to create a timeless coastal retreat, calm, refined, and effortlessly liveable. From natural finishes to seamless indoor-outdoor flow, Solis offers a quiet elegance that's deeply connected to its surroundings.

The landscape, designed by Julian Brady of <a href="https://www.apartments.com.au/landscape-architect/sitedesignstudios">Site Design Studios</a>, treats green space as an integral part of the resident experience rather than an afterthought.&nbsp;

"Gentle curves and layered native plantings mirror the ebb and flow of the ocean," Julian Brady says, "creating a serene connection between architecture and place."&nbsp;

Coco Republic has provided bespoke furniture packages tailored to the project's coastal palette.

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Skymark has an established track record in the Sutherland Shire, with a portfolio spanning Cronulla, Woolooware and Burraneer that includes Isla, Sylva, Bask, Shells, Sula and Mist. Securing LDI on Solis reflects a broader shift in how the developer is positioning its buildings to buyers, at a time when Resilience Insurance expects the policy to become mandatory in New South Wales by 2028.

Sales at Solis are launching soon through Ray White Projects, with an official event scheduled for 11 June. Enquire for more information.

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Jonathan Chancellor

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