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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?

Apartment buildings are increasingly being designed around how people actually live day to day, not just how they want a building to look.

For buyers, that shift is showing up in practical inclusions that respond to changing habits. Work-from-home spaces, EV charging, wellness amenities, secure bike storage and parcel management are becoming part of the broader apartment conversation, reflecting a move toward buildings that reduce friction in everyday life.

Online shopping has become one of the clearest examples of that change.

Australians spent a record $82.6 billion online in 2025, with nearly one in four retail dollars now spent online. That has made parcel delivery a regular part of apartment living, rather than an occasional inconvenience.

For apartment residents, however, the delivery process can be less straightforward than it is for detached homes. Parcels may be left in lobbies, redirected to Post Offices, missed entirely, or placed under the responsibility of building managers and concierge teams.

That is why secure parcel infrastructure is increasingly being considered alongside more familiar apartment amenities.

<iframe allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" allowfullscreen="" frameborder="0" height="315" referrerpolicy="strict-origin-when-cross-origin" src="https://www.youtube.com/embed/-VjjLwoViX0?si=A3k7ws9NX35Uac7_" title="YouTube video player" width="560"></iframe>

Australia Post Parcel Lockers offer one way to address the issue. When a parcel arrives, residents receive a notification through the AusPost app or SMS, then collect it using a QR code or one-time PIN. The parcel is kept secure, accessible and removed from common areas.

The broader Parcel Locker network now includes more than 1,500 locations across Australia, positioned at Post Offices, shopping centres, supermarkets, transport hubs and other accessible locations.

For new apartment projects, the relevance is clear. A building’s amenity offering is no longer only about lifestyle spaces, but also about convenience, security and functionality.

As buyer expectations evolve, secure parcel delivery is becoming part of the same design conversation as flexible working, sustainable transport and resident wellbeing.

It is one less thing for residents to worry about, and another example of apartment design adapting to the way Australians now live.

Joel Robinson

Apartment design is adapting to the way Australians shop

While school holidays and trips to Europe tend to define the winter property market, there's been no cold snap at <a href="https://www.apartments.com.au/new-apartments/the-walden-north-sydney-177-walker-street-north-sydney-nsw-2060">The Walden</a> in North Sydney.

Developer-builder&nbsp;<a href="https://www.apartments.com.au/developers/aland">ALAND</a> sold more than $35 million worth of apartments throughout June, including a $6.8 million apartment that now ranks among the highest apartment sales ever recorded in North Sydney.

SRM Residential agent Ben Stewart said buyer demand throughout June reflected a mix of improving market confidence and longer-term thinking from owner-occupiers.

"We're seeing strong demand from owner-occupiers who are taking a longer-term view," Stewart said.

"Many recognise the opportunity to secure an apartment in an iconic building and premium location while values remain attractive. They may initially lease the property, but the intention is to eventually move in themselves, rather than purchasing purely as an investment."

[smartcode_project:default project_id=134323 project_image_fid=367129]

Located at 177 Walker Street, The Walden will deliver 161 one, two, three and four-bedroom residences across a 30-storey tower designed by Rothelowman. Every apartment occupies a corner position, maximising natural light, cross ventilation and views across Sydney Harbour, the Opera House, Sydney Heads and the northern districts.

Rather than a traditional balcony, the residences feature winter gardens that seamlessly extend the open plan living areas, creating versatile spaces for relaxing or entertaining throughout the year. Floor-to-ceiling glazing draws in natural light while showcasing sweeping views from the building's elevated Walker Street position.

Every apartment features high-end Calacatta marble, bespoke joinery, and fully integrated appliances.

The larger residences have been planned with distinct entertaining and private zones, with many master suites positioned on corners to capture natural light and harbour views. Walk-in dressing rooms, freestanding baths and refined stone finishes reinforce the house-like feel that has resonated with downsizers and owner-occupiers.

[smartcode_project:default project_id=134323 project_image_fid=6393]

Rothelowman Principal Ben Pomroy said the project was designed to make the most of its unique position overlooking the harbour.

"The Walden is a celebration of all things beautiful, curated for those who expect nothing less than exceptional," Pomroy says.

"Meticulously designed entertaining spaces and light-filled living areas that capitalise on capturing the natural beauty of Sydney's iconic harbour."

Residents will also have exclusive access to The Pavilion, a dedicated amenity building featuring a rooftop pool, wellness studio, gymnasium, sauna, concierge service, residents' lounge, private dining spaces and work-from-home facilities.

[smartcode_project:default project_id=134323 project_image_fid=6402]

The project marks ALAND's first major luxury apartment development in Sydney's inner-city market after more than two decades delivering residential communities across Greater Sydney.

Founder and CEO Andrew Hrsto previously said the rarity of the Walker Street site made it an opportunity the company could not overlook.

"This is a rare opportunity to bring a truly exceptional project to life in one of Sydney's most iconic locations, and to showcase our craftsmanship and design expertise at a world-class level," Hrsto said.

[smartcode_project:default project_id=134323 project_image_fid=6383]

The Walden has been introduced to the market at a time when demand for living in North Sydney is at an all-time high. Billions of dollars have been invested in infrastructure, including the recently opened Victoria Cross Metro station, located just 300 metres from The Walden, providing residents with direct access to the Sydney CBD in just minutes.

Private investment has also transformed the area through the arrival of new retail and dining destinations, elevating the lifestyle offering in what was once considered primarily a commercial precinct rather than an aspirational residential address.

The Walden is currently under construction and is scheduled for completion in 2028.

[smartcode_project_cta:default project_id=134323]

ALAND records $35 million in sales in North Sydney as The Walden bucks quiet winter selling season

The long-awaited redevelopment of the former Eastlakes Shopping Centre site has reached a major milestone, with Conquest's plans for a new mixed-use precinct officially placed on public exhibition.

The State Significant Development Application would transform the 1.7-hectare site at <a href="https://www.apartments.com.au/new-apartments/19a-evans-avenue-eastlakes-nsw-2018">19A Evans Avenue</a> into one of Sydney's largest urban renewal projects, delivering 736 apartments above a new shopping centre anchored by Woolworths, alongside specialty retail, dining, commercial space and new public open spaces.

The public exhibition marks the next chapter for the project after <a href="https://www.apartments.com.au/developers/conquest">Conquest</a> acquired the stalled Stage Two development from Crown Group, who completed the first stage across the road prior to their voluntary liquidation.

<img alt="First look: Conquest unveils plans for 736-home Eastlakes Shopping Centre redevelopment" data-entity-type="file" data-entity-uuid="5fca22c5-d1ed-4e2c-8801-03f7df1eafc8" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/eastland%20podium.png?VersionId=uomwr41nF8CmLUZRDcu3mHQechlbxucS" />

&nbsp;

Designed by DKO Architecture, the proposal comprises four residential buildings ranging from 14 to 18 storeys above a two-level retail podium. The development would deliver 736 apartments, including 74 affordable homes, 215 Build-to-Rent apartments and 521 market residences. Provision has also been made for dual-key apartments, which could increase the total number of dwellings to 877.

At ground level, the shopping centre has been designed as the suburb's new meeting place, anchored by a full-line Woolworths and complemented by a curated mix of fresh food retailers, cafés, restaurants, health services and everyday convenience shopping. Generous pedestrian links and landscaped public spaces will connect the retail precinct through to Jack Mundey Reserve, creating a more walkable and connected neighbourhood.

Conquest CEO Michael Akkawi said the redevelopment was about far more than replacing a shopping centre.

"Eastlakes has been overlooked for too long, and this is the community’s moment. We are building a shopping centre and homes, a genuine heart for the suburb, and we genuinely want locals to help shape it."

"We enrich communities through the creation of homes, places, and experiences designed for life, built to last, and owner for generations. That starts with listening, so we warmly encourage everyone with a connection to Eastlakes to view the plans and share their thoughts."

<img alt="First look: Conquest unveils plans for 736-home Eastlakes Shopping Centre redevelopment" data-entity-type="file" data-entity-uuid="22f6fb20-54fb-4bd7-8a92-48fafdd00608" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/eastland.png?VersionId=cugp7s9hrMHGJJdYzkeAkrFoQgnF4GXf" />

DKO said the design had been shaped by the site's landscape setting and surrounding open space.

"Our vision for the site embraces its unique Bidjigal identity by blending the residential living with generous landscaping and a material palette inspired by the Bidjigal locality, and celebrating the panoramic views to Botany Bay and the wetlands reserves."

"Taking cues from Country, we seek to harmonise built form with the landscape and lightly touch the earth. By reconnecting, retaining and regenerating existing ecology, and weaving in natural elements, we can deepen our connection to Country."

The landscape strategy extends across the podium and rooftops, incorporating communal gardens, children's play areas, lawns, community gardens, family gathering spaces and extensive tree planting. New landscaped links will also strengthen the connection between the precinct and Jack Mundey Reserve, while publicly accessible open spaces have been integrated throughout the development.

The proposal builds on Conquest's broader placemaking strategy for the site. Through an ongoing partnership, local artist Joe Rashbrook has been appointed Urban Art Curator, working alongside young residents to transform the project's site hoardings into a public art gallery that allows the community to engage with the redevelopment before construction is complete.

Conquest has rapidly expanded its development pipeline since acquiring the Eastlakes site, with more than $6 billion worth of mixed-use projects now in planning across Sydney, including Stanmore, Castlecrag and Waterloo.

Conquest CEO Michael Akkawi said the redevelopment was about far more than replacing a shopping centre.

First look: ‘Far more than replacing a shopping centre’ as Conquest unveils 736-home Eastlakes redevelopment

Abadeen has lodged a State Significant Development Application (SSDA) for one of Mosman's largest apartment developments in recent years, seeking approval to transform the former Honeysuckle Garden and Midas site on Military Road into a 100-apartment mixed-use development.

The SSDA, lodged with investment partner Phoenix Property Investors, proposes around $230 million worth of new housing on the prominent <a href="https://www.apartments.com.au/new-apartments/494-516-military-road-mosman-nsw-2088">494-516 Military Road</a> site.

The proposal comes as Mosman Council continues to progress its recently endorsed Masterplan, which identifies the precinct for increased housing density while maintaining the suburb's established character.

Designed by DKO Architecture, the development would comprise 100 apartments above ground-floor retail, with a rooftop wellness precinct including a gym, sauna, entertaining areas and landscaped communal spaces.

Rather than pushing to the full 12-storey height identified in Council's Masterplan, the proposal ranges between five and nine storeys, stepping down towards Hale Road. A tenth level would accommodate resident amenities rather than additional apartments.

The project has been designed to appeal to a broad range of buyers, from first home buyers and young professionals through to families and local downsizers looking to remain on the Lower North Shore.

<img alt="Mosman" data-entity-type="file" data-entity-uuid="5dada03f-5b4c-43ba-ba62-2868add31440" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-07-27%20at%209.57.55%E2%80%AFAM.png?VersionId=7LBy0B.Jo8_iWAFJsClcV7Q3UnXrv49r" />

Abadeen Executive Chairman Justin Brown said the apartments had been designed as genuine long-term homes rather than investor-focused stock.

"The apartments have been designed as genuine long-term homes, with efficient floorplans that maximise usable living areas, generous storage, natural light and strong connections between indoor and outdoor spaces," Brown says."

"We've focused on creating homes for a broad range of buyers, from first home buyers and growing families through to downsizers who want to remain in Mosman."

The rooftop wellness offering forms a key part of the proposal, with residents set to have access to a gym, sauna, outdoor entertaining spaces, communal dining areas, landscaped gardens and a multi-use recreation court overlooking Sydney Harbour.

<img alt="Mosman" data-entity-type="file" data-entity-uuid="d37c2d6b-583a-4a0f-b7a9-9f46b893d2f4" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-07-27%20at%209.58.06%E2%80%AFAM.png?VersionId=FPoa5FCm2RtzjhAh2w5FTWJbV6GHfY8D" />

DKO drew heavily on the site's natural and cultural history, undertaking a Connecting with Country process with local Aboriginal Elders to inform the architectural and landscape design.

Senior Associate Matthew Ritchard said the design sought to create a building that responded to both the site's landscape and its cultural significance.

"The architectural language of the project is a deep expression of Connecting with Country, where the materiality and colour palette serve as a bridge between the site's geological history and its future as a residential sanctuary."

The proposal also retains the site's established blue gum tree as the centrepiece of the communal landscaped gardens, while introducing activated retail fronting Military Road to strengthen the connection between Mosman and Cremorne villages.

If approved, the project would deliver 100 new homes within walking distance of shops, public transport, schools and local amenities, adding to the limited pipeline of new apartments on the Lower North Shore.

<h2>Project Snapshot</h2>

Project: Honeysuckle Garden Redevelopment

Address: 494-516 Military Road, Mosman

Developer: Abadeen and Phoenix Property Investors

Architect: DKO Architecture

Lead Architect: Matthew Ritchard

Value: $230 million

Residences: 100 apartments

Key features:

<ul>
	<li>
	Ground-floor retail
	</li>
	<li>
	Rooftop wellness precinct
	</li>
	<li>
	Gym and sauna
	</li>
	<li>
	Outdoor entertaining and BBQ areas
	</li>
	<li>
	Landscaped communal gardens
	</li>
	<li>
	Multi-use recreation court
	</li>
	<li>
	Retained mature blue gum tree
	</li>
	<li>
	Connecting with Country design process
	</li>
	<li>
	Harbour, CBD and Balmoral views from upper-level apartments
	</li>
</ul>

Abadeen Executive Chairman Justin Brown said the apartments had been designed as genuine long-term homes rather than investor-focused stock

First look: Abadeen plans 100 apartments on former Honeysuckle Garden site in Mosman

The wave of apartment proposals sweeping through Mosman shows no signs of slowing, with another major residential development lodged through the NSW Government's State Significant Development pathway.

Developer First Quadrant Properties, which recently completed Willoughby Grounds and has several projects in planning across the North Shore, has unveiled plans for <a href="https://www.apartments.com.au/new-apartments/cove-on-ourimbah-40-56-ourimbah-road-mosman-nsw-2088">Cove on Ourimbah</a>, a 63-apartment development on Ourimbah Road, adding to the growing pipeline of projects reshaping one of Sydney's most tightly held harbour suburbs.

The proposal would consolidate nine properties at 40-56 Ourimbah Road into a part eight, part nine-storey apartment building, continuing the momentum created by the NSW Government's accelerated planning pathways that have seen several significant developments emerge across Mosman over the past 12 months.

Designed by Doroch Architects, the project would deliver 63 apartments, resident wellness facilities including a gym, pool and sauna, landscaped communal spaces and basement parking, while using recessed upper levels, generous setbacks and extensive planting to reduce the perceived scale of the building.

<img alt="First look: First Quadrant Properties eyes nine-storey Mosman apartment project under State Significant pathway" data-entity-type="file" data-entity-uuid="32ee68e4-141e-4a10-8f83-48e961a5e71e" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Ourimbah%20Road%2C%20Mosman%20a.png?VersionId=CUeILFc6APlwXPc.iplElbxHvREKwjig" />

Doroch Architects said the building had been designed to reinforce Mosman's established character.

"The building's aesthetic is grounded in the existing residential character of Ourimbah Road and the broader Mosman context," the architect noted in the planning documents submitted to the NSW Government.

The design adopts a contemporary material palette of natural stone, textured concrete and brown concave metal cladding, complemented by integrated planters and deep balconies. The podium incorporates softened curved concrete forms, while increased setbacks have been provided adjacent to the heritage-listed property at 60 Ourimbah Road to create a more sympathetic transition.

The site sits around 330 metres from Mosman Town Centre, placing it within the NSW Government's Low and Mid-Rise Housing policy area, where increased residential density is being encouraged close to shops, transport and services.

The proposal follows a string of major apartment projects lodged or declared State Significant in Mosman in recent months, including Abadeen's 100-apartment Honeysuckle Garden redevelopment on Military Road and several other developments across Awaba Street, Redan Street and Muston Street from the likes of Time &amp; Place, HELM and Prosker Property.

&nbsp;

Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/time-place-to-take-on-mosman-apartment-market">Time &amp; Place to take on Mosman apartment market</a>

Read more:&nbsp;<a href="https://www.apartments.com.au/news/qld/first-look-abadeen-plans-100-apartments-on-former-honeysuckle-garden-site-in-mosman">First look: Abadeen plans 100 apartments on former Honeysuckle Garden site in Mosman</a>

&nbsp;

Jonathan Chancellor

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