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Home loan consumers should be cautious of “phantom rates”, the head of major mortgage group 1300HomeLoan, John Kolenda has warned.
He has questioned the sustainability of some rate offers as lenders have been unfairly baiting consumers with “aggressively priced” mortgage products which turn out not to be true. 
“Some lenders are aggressively pricing products to lure customers and boost their market share and then when they are signed up they increase their mortgage rates independently of any interest rate decisions by the Reserve Bank of Australia (RBA),” Kolenda said. Kolenda says lenders are blaming cost of funding issues and changes to regulations for non-delivery.  “We also had the out of cycle raises on home loan rates in response to rising funding costs and the additional costs coming in for the additional compliance and regulatory increase on reserves that the banks will have to have in place by end of June this year. “But the bank wholesale funding costs did not rise enough to warrant the types of rate increases they imposed. “I think there was an element of a profit grab done under the umbrella of higher regulatory and funding costs at the time when those decisions were made.” Kolenda pointed to the bond market where NAB recently estimated rates over the bank bill swap rate (BBSW) had increased by at least 30 basis points. “This again raises serious concerns as to how lenders will react when it comes to their existing customers, especially when lenders are offering rates as low as 3.69 per cent for new business,” he said. “We question the sustainability of that rate offer with the back drop of current market conditions.”
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John Kolenda warns on phantom mortgage home loan rates

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GUEST OBSERVER
The January update on housing finance approvals was uniformly weak with the total number of owner occupier loans down 3.9 percent, the value of investor loans down 1.6 percent mth and the total value of all loans down 3.4 percent mth.
The consensus forecast was for a somewhat milder 2.8 percent decline.
It should be noted at the outset that housing data is notoriously unreliable over January with the Christmas holiday period making month to month moves more prone to big changes and revisions.
For finance approvals, the raw data for January usually sees about a 20 percent drop in approvals – adjusting for this can produce more volatility in headline seasonally adjusted estimates.  
The detail showed declines in owner occupier finance approvals across all major states: NSW (–4.6 percent mth); Vic (–1.9 percent mth), Qld (–4.1 percent mth), SA (–2.9 percent mth) and WA (–3 percent mth). Annual growth remains positive for NSW and Vic but is about flat for Qld, tracking at –3.7 percent yr in SA and contracting at a solid double digit rate in WA (–12.3 percent yr). Note that the value of investor loans and therefore the total value of loans is not yet available for states (data to be released on Friday).
Construction-related finance approvals were also down about 3 percent.
Overall, the numbers show a broad-based weakening in momentum although the aforementioned issues with January data mean we will need another month or two to get a firm handle on whether we are seeing a more rapid slowdown. Details  Owner–occupiers (no.)   –3.9 percent mth, 7.3 percentyr        – ex-financing (no.)        –3.6 percent mth, 0.6 percent yr                           Construction of dwellings (no.)               –2.8 percent mth, 0 percent yr            Purchase of newly built dwellings (no.)   –3 percent mth, 22.1 percent yr                         
Value of loans:             
Owner-occupiers ($bn)   –4.3 percent mth, 15.9 percent yr       Investors ($bn)              –1.6 percent mth, –14.8 percent yr      Total ($bn)                    –3.4 percent mth, 2.7 percent yr         Total ex refi ($bn)          –3.7 percent mth, –4.1 percent yr  
 
Matthew Hassan is senior economist with <a href="https://www.westpac.com.au/" target="_blank">Westpac</a>.
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January owner occupier loans down 3.9 percent: Matthew Hassan

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Downsizing art dealer Marlene Antico sold her 1930s Double Bay apartment for $1.3 million.
The cosy three bedder was on the fourth floor of the 1930's Princeton art deco block. 
Around $1.2 million had been tipped for the apartment at the rear of the New South Head block.
It sold through James Dunn at Richardson &amp; Wrench Double Bay.
Antico bought the 125 sqm apartment in 2012 for $840,000, having sold her Bellevue Hill apartment for just over $1 million.
Her next gallery exhibition features the works of her son Chris Antico.
 
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Marlene Antico sells in Double Bay

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GUEST OBSERVER
Our cities are getting hotter, more crowded and noisier. Climate change is bringing more heatwaves, placing pressure on human health, urban amenity, productivity and infrastructure.
Urban residents naturally want to stay cool. Air conditioning is the usual choice, but it can be expensive to run. Air conditioning also adds carbon pollution, creates noise and can make outdoor spaces hotter.
So what else can we do to manage increasing urban heat? And who has the ability to act?
Urban planners are increasingly involved in developing and delivering urban greening strategies. While it seems like a “no brainer” to green cities, our international research shows that planners are not always comfortable with this idea.
However, green infrastructure – including street trees, green roofs, vegetated surfaces and green walls – is emerging as a viable way to help cities adapt to increased heat. Uptake of these technologies is slowly increasing in many cities around the world.
The Australian government has recognised this trend. An agenda to green Australia’s cities is now in place. Stated aims include managing climate change impacts, reducing urban heat, improving urban well-being and increasing environmental performance.
This urban greening agenda is part of the Clean Air and Urban Landscapes hub, under the National Environmental Science Program.
<h2>Benefits of urban greening</h2>
The broadening appeal of green infrastructure is helped by the fact it offers multiple benefits.
For example, shading from strategically placed street trees can lower surrounding temperatures by up to 6℃, or up to 20℃ over roads. Green roofs and walls can naturally cool buildings, substantially lowering demand for air conditioning. Green infrastructure can also provide habitat for wildlife, recreational opportunities for people, better management of stormwater runoff and improved urban aesthetics.
Hard surfacing, including concrete, asphalt and stone, is common in cities. It can increase urban temperatures by absorbing heat and radiating it back into the air. Green infrastructure can minimise this difficulty as it better regulates ambient air temperatures. Foliage allows local cooling through evapotranspiration, where plants release water vapour into the surrounding atmosphere.
<h2>Why planners are cautious</h2>
Our research examined urban planners' attitudes towards green infrastructure use in Australia, England and Ireland. We found that planners are broadly aware of green infrastructure as an urban intervention. They understand its use, application and capacity to provide multiple benefits, especially in terms of managing urban heat.
The planners we interviewed, while recognising the potential value of green infrastructure, strongly cautioned that delivering the technology can be an uncertain process. The biggest barrier cited was that planning departments are not experienced with green infrastructure.
Put simply, they tend to avoid it because it has not traditionally featured on planning agendas. Like any new planning endeavour, green infrastructure can create institutional, legal, economic, social and environmental challenges.
Some of the biophysical challenges associated with green infrastructure delivery are novel. Choosing appropriate forms of vegetation, for example, may be difficult. Decisions must be made based on prevailing climactic conditions, drainage capacity and species growth patterns.
Will root systems damage buildings or underground utility networks? Might trees topple during storms and damage houses? Are roofs strong enough to support a rooftop garden? Planners may not be able to answer these questions, which creates a need for external experts to advise them.
Our findings also highlight socio-political factors as barriers. These include governance concerns such as the political context in which planning decisions are made.
Management issues also feature. Chief among these are government commitments to budget for green infrastructure delivery and management.
Planners are also wary of public involvement. They know that public sentiment about green infrastructure can be influenced by perceptions of modified access, changed use, or loss.
<h2>What can be done?</h2>
The urgency for providing urban green infrastructure increases as climate change makes our cities hotter. Our research suggests the principal task for planners is to overcome embedded practices and to accept green infrastructure as an emerging but permanent urban feature.
This will not be easy. For example, a decision to use a road easement for green infrastructure may require multiple meetings with other government departments, utility companies and residents. Planners will need to coordinate these, manage stakeholder expectations and ensure cost sharing where necessary.
Legal, economic, social and environmental issues will require innovative solutions.
Planners will increasingly be tasked to deliver green infrastructure in cities. They will need to be clear on its value, be prepared to lead its delivery and learn from new challenges and solutions encountered along the way.
Urban residents all over the world stand to benefit if planners can successfully meet this challenge, particularly as hotter temperatures threaten urban comfort and habitability.
 
Tony Matthews is lecturer in Urban &amp; Environmental Planning, Griffith University and can be contacted <a href="https://theconversation.com/profiles/tony-matthews-234160" target="_blank">here</a>.
Jason Byrne associate professor - Environmental Planning, Griffith University and can be contacted <a href="https://theconversation.com/profiles/jason-byrne-6066" target="_blank">here</a>.
Both are authors for The Conversation.
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Green infrastructure the hot topic amongst city planners

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GUEST OBSERVER
Melbourne’s population is expected to almost double by mid-century, overtaking Sydney as Australia’s biggest city. But all states are growing and the increases are concentrated in the capital cities.
Along with adaptation, developing resilience and decarbonising buildings and other infrastructure – in response to climate change – the expansion and densification of the city present massive challenges for state and local council planners.
Skyscraper residential blocks and ultra-tiny apartments have already created controversy. Will Melbourne end up with a skyline like a pincushion, or Chicago without its grand style?
Are vertical communities feasible? If so, will they be gated communities?
With a two-tier, global-local real estate marke<a href="https://www.afr.com/real-estate/lower-australia-dollar-to-inflate-sydney-melbourne-property-prices-20150903-gje5ua">t</a> and growing numbers of international students, will inner Melbourne become host – or hostage – to a clutter of boarding-house-like apartments? And will those living in oversized, energy-guzzling new homes in fringe suburbs spend hours every day in private cars to reach work, school, retail and medical services?
If planning once seemed a boring job entrenched in the minutiae of approving, rejecting or amending individual development plans, today every level of planner is engaged with stakeholders. They must argue the pros and cons of designing appropriate urban policies across vast and complex economic and social landscapes.
A recent planning proposal by RMIT University researchers Michael Buxton, Kath Phelan and Joe Hurley offers a vision of an environmentally efficient compact city. This would not only protect its cultural heritage and enhance its green spaces, but also create the possibility of building in environmental justice.
<h2>What is environmental justice?</h2>
“Environmental justice” is often spatially expressed. Say a landfill, polluting industry or airport is approved in an area of social deprivation. That means locals bear most disadvantages. Consumers elsewhere not only benefit from the resulting goods and services but are protected from the damaging impacts of their production.
An example of insidious environmental injustice, revealed by Australian health scientists, is air lead concentrations. This has caused almost one-third of the variance in suburban assault rates 21 years after exposure.
A current inquiry will suggest ways that environmental justice can be applied in the Victorian Environmental Protection Authority (EPA). However, many sources of environmental injustice, such as planning, are beyond the EPA’s mandate. That makes these honourable aims a moot point.
Pockets of disadvantage often have historical and geographic sources. However, better urban planning can turn these areas into more desirable and healthy places to live. Appropriate planning strategies can minimise spatial disadvantage by ensuring services are well, and evenly, distributed throughout a city.
<h2>Community-based planning to get the mix right</h2>
The planning proposal focuses on appropriate land supply, infill opportunities and housing types. The goal is to maximise:
<blockquote>
…the effective functioning of the city through access to employment and service provision, avoiding inequitable outcomes and increased social division, and protecting amenity and providing high-quality urban design and environmental conditions.
</blockquote>
This approach respects the current heritage overlay and any pre-1945 building along the city’s tramways. Extensively using brownfield and ex-industrial land in Melbourne’s middle and outer suburbs maximises densification opportunities. It also promises to rehabilitate these neglected environments with well-serviced community-centred developments.
The researchers show that sprawling development in growth areas low in amenities could be minimised and made compact to increase service quality and quantity.
The thrust of the proposal dovetails well with a recently released report by other RMIT University researchers Tania Lewis, Victor Albert and Shae Hunter. They recommend:
<blockquote>
Using an EPA social media campaign to move away from a focus purely on “risk” and “hazards”, where communities are positioned as “victims”, to encouraging a longer-term sense of urban environmental consciousness and engagement.
</blockquote>
Scenarios that result in concrete proposals to oppose, modify and support are essential stages in coherent and engaged community-based planning. The first proposal was written to inspire debate on a pressing cluster of challenges that every Melburnian has a stake in solving.
The authors encourage lively public discussion to develop strong urban planning policies. Without these we risk our future being decided by developers, housing industry players and real estate markets.
<h2>Principles to guide us towards cities that work for all</h2>
Discontent with housing costs and options has become a 2016 election issue. Clear demands based on key principles are needed to steer the debate among our planners, politicians and parties in fruitful directions. Environmental justice is one such principle.
Australian cities should be made to work for all inhabitants. This involves evenly spreading the environmental disadvantages of industrial and commercial activities as well as the advantages of transport, educational and medical services.
This can be done through more appropriate zoning and planning regulations. The importance of this will only increase in coming decades of growth.
A city well planned in terms of environmental justice is more equitable by nature. Such a city is likely to have fewer entrenched and divisive sociopolitical conflicts.
Anitra Nelson is associate professor, Centre for Urban Research (GUSS, RMIT), RMIT University and author for The Conversation. She can be contacted <a href="https://theconversation.com/profiles/anitra-nelson-6527" target="_blank">here</a>.
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An environmentally just city works best for all in the end: Anitra Nelson, RMIT University

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GUEST OBSERVER
Consumer confidence slipped 2.2 percent in March seeing it continue to lag behind business confidence which is a bit more upbeat.
Both consumer and business confidence are around their long term averages though.
<a href="/images/2016/03/9/image004.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/03/9/image004.png" alt="">
Source: NAB, Westpac/MI, AMP Capital
Interestingly, all the talk of a crash in the Australian property market looks to have led to a sharp fall in the proportion of Australian’s nominating real estate as the wisest place for savings. It fell from 23.4% in December to 14.7% in March. With interest in shares also falling slightly and superannuation remaining low this saw a renewed spike in interest in bank deposits and paying down debt.
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Source: Westpac/MI, AMP Capital
Housing finance fell a greater than expected 3.4% in January with both finance to investors and particularly owner occupiers falling. The loss of momentum in lending to investors tells us that the APRA measures continue to impact and would probably be welcome by them and the RBA. The slowing in lending to owner occupiers may be more of an issue, but it’s dangerous to read too much into one month’s data. Nevertheless it is consistent with slower growth in housing related debt this year which in turn will likely see slower gains in Sydney and Melbourne property prices compared to last year.
Today’s consumer confidence and housing finance data while soft is unlikely to be enough to prompt the RBA to act on its easing bias just yet.
<a href="https://www.propertyobserver.com.au/https://plus.google.com/110172465327488162875?rel=author" target="_blank">SHANE OLIVER</a> is head of investment strategy and economics and chief economist at <a href="https://www.ampcapital.com.au/home" target="_blank">AMP Capital</a> and is responsible for AMP Capital's diversified investment funds.
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Talk of a crash in the Australian property triggers sentiment shift to wiser investment places: Shane Oliver

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GUEST OBSERVER
The Westpac Melbourne Institute Index of Consumer Sentiment fell by 2.2 percent in March from 101.3 in February to 99.1 in March.
The Index is back to around its average reading over the last six months. Following the change of leadership of the Federal Government in September the Index lifted by 8.3% over the subsequent two months. It has broadly held those gains with today’s reading off that high in November by 2.5% although we are now slightly back in the region where pessimists outnumber optimists.
Financial markets have maintained significant volatility since the last survey while finishing the month on an encouraging high.
However, responses to additional questions on ‘news items recalled’ indicate that consumers were generally less focussed on international events than in December. The proportion of respondents who reported recalling news on ‘international conditions’ fell from 20.0% in December to 15.5% in March although perceptions of this news remained highly unfavourable.
The highest levels of news recall were for items on ‘budget and taxation’ ( 37.1%) and ‘domestic economic conditions’(36.7%). Perceptions of both topics were less unfavourable in March than in December. Respondents registered low recall rates on new on ‘interest rates’, ‘employment’ and ‘inflation’ although again perceptions were significantly less unfavourable than in December.
However, the market volatility and unfavourable media coverage on property markets appears to have triggered a reassessment of risk preferences. When we asked consumers about the ‘wisest place for savings’ there was a much higher proportion nominating ‘pay down debt’ – 24.4% in March compared to 17.8% in December – with this month’s reading the highest since December 2011( 26.6%) when the European Financial Crisis was in full swing. This move to more risk averse preferences also saw a 4.5 percentage point increase in the proportion of respondents who favoured fixed interest investments, including bank deposits with significant reductions in the proportion nominating real estate (down to 14.7% from 23.4% in December ) and shares (down from 9.9% in December to 7.6% in March).
The Westpac Melbourne Institute Index of Unemployment Expectations increased by 1.3% from 145.3 in February to 147.3 in March. This measures respondents’ assessments of the outlook for the unemployment rate so an increase indicates reduced confidence in the employment outlook. The measure is still 5.8% below its print in September but has steadily lifted (up 9.2%) from the low in October (134.9). However labour market expectations are still considerably less negative today than they were through most of 2014 and 2015.
Three of the five components of the Index fell in March. One of the two components assessing family finances – ‘family finances compared to a year ago’ – declined 8.2%. The Reserve Bank has indicated that it favours this component as a reliable indicator
of spending intentions. As such, it would be of some concern that this component, which unlike the overall Index did not lift significantly following last year’s leadership change, is now down 5.9 percent from a year ago, a considerably weaker read than the 0.4 percent decline in the overall Index. The prudent approach to this sharp move will be to assess the degree to which it is sustained over future months.
The other family finances component – ‘family finances over the next 12 months’ – increased by 0.2 percent. The components measuring the views on the economic outlook sent conflicting messages – ‘economic conditions over the next 12 months’ increased by 8.2 percent while ‘economic conditions over the next 5 years’ fell by 2.5 percent.
The final component, ‘time to buy a major household item’ – fell by 6.6 percent to be 2.5 percent below its level from a year ago.
 
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While there was a sharp deterioration in respondents’ views on real estate as a wise investment relative to December, assessments of ‘time to buy a dwelling’ suggest broader buyer sentiment may be stabilising. The ‘time to buy a dwelling’ index increased by 5.4 percent from 99.3 in February to 104.7 in March. 
This Index is now 3.0 percent above its level in September but still 13.1 percent below its level of a year ago. The divergence between this index and views on real estate as an investment may reflect uncertainty around potential changes to taxation policy affecting negative gearing. Notably, the state detail on ‘time to buy a dwelling’ shows buyer sentiment in NSW – the weakest state – is now 44 percent above its September low although it is still 19 percent below its level from a year ago. 
This stability is also indicated by the Westpac Melbourne Institute Index of House Price Expectations. The Index lifted by 9.8% in March to be 16.6% higher than its level in December although still 18.4% below its level from a year ago. 
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The Reserve Bank Board next meets on April 5. As we have been successfully arguing since June last year that we expect the Bank will keep rates on hold through 2016. Clear issues for the Bank will be the progress towards stability in the labour market and the value of the Australian dollar. 
Recent dollar strength has been associated with a more positive outlook for China and commodity prices and as such would not be grounds for a policy adjustment. 
Equally, while most indicators, including our own, one of which is quoted in this survey, point to an overall improvement in the labour market over the last six months, actual jobs growth appears to be running ahead of those indicators. The recent lift in the recorded unemployment rate to 6.0% seems consistent with that observation. 
Given the recent GDP report showing Australia grew by a relatively impressive 3% in 2015, the current unemployment rate is a long way short of a print that would prompt a policy response from the Bank. 
We expect growth in the Australian economy of 2.8% in 2016 with the genuine prospect for some stability in our terms of trade through the year laying a foundation for a lift in incomes and spending going into 2017.
Bill Evans is chief economist of <a href="https://www.westpac.com.au/" target="_blank">Westpac</a>.
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Consumer sentiment shows modest March fall: Westpac's Bill Evans

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GUEST OBSERVER
In a decision before the New South Wales Supreme Court in February 2016, Justice Ball of that Court considered some unusual circumstances surrounding an adjudication application in J Hutchinson Pty Ltd v Glavcon Pty Ltd. 
As the title suggests part of the controversy surrounded allegedly false declarations being relied upon by the subcontractor joiner, Glavcon Pty Ltd (Glavcon), in support of a payment claim with respect to joinery work at the Bondi Pacific Development at Bondi Beach in Sydney. 
What follows is a short review of the case with respect to the providing of an allegedly false declaration and the impact that had upon the validity of the adjudication in light of the provisions making void attempts to contract out of the Act. While there are other interesting issues discussed in the case, these are the ones that we will concentrate on:
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Facts
The subcontract required as a pre-condition to a reference date arising under the New South Wales Security of Payment legislation (SOPA), and consequently being able to make a progress claim, that the subcontractor submit a declaration that not only had the subcontractor’s suppliers  been paid all monies due and payable, but also confirming payment of workers compensation insurance premiums. 
The payment claim in question was accompanied by a statutory declaration signed by the sole director of Glavcon, stating that all workers compensation insurance premiums payable had been paid. 
The matters were not raised in any detail before the adjudicator and indeed J Hutchinson Pty Ltd (Hutchinson) did not become aware of the problems of any declaration until after the adjudication. Hutchinson subsequently became aware of the Workers Compensation insurer commencing proceedings to wind up Glavcon for failing to pay a statutory demand in respect of workers compensation insurance premiums. 
The Adjudicator had already handed down his determination in favour of Glavcon to an extent of approximately $1.2 million plus GST of a $2.9 million claim.  It was alleged by Hutchinson that as a consequence, the adjudication was obtained by fraud as if the matters had been known at the time of adjudication the Adjudicator would have withheld any payment and not resulted in an adjudication in favour of Glavcon.
Findings
During the hearing, the Court paid particular attention to what the sole director did and did not know concerning the workers compensation payments and whether it was reasonable in the circumstance for that director to rely upon advice given to him by others. The following matters were reviewed and taken to be relevant to this consideration:
<ul>
<li>The identity of who administered the paperwork being supplied to the director.</li>
<li>The director's knowledge and recollection of who prepared the statutory declaration.</li>
<li>The assumption by the director that the person responsible would have alerted him to any incorrect material.</li>
<li>The director’s lack of awareness of the non-payment of the workers compensation premium until following any adjudication.</li>
<li>The director’s actions subsequent to becoming aware of non-payment (payment).</li>
<li>The evidence of the solicitor for Glavcon concerning approaches to parties to give evidence, their refusal and the reasons for their refusal.</li>
</ul>
In the end the Court paid due regard to the serious nature of the allegation and the level of satisfaction it needed to have to make out an allegation of fraud. The Court considered that the allegation wasn’t made out and there was insufficient evidence with respect to whether or not the sole director intentionally or with due recklessness executed the declaration.
Evidence was further reviewed in relation to the sole director’s general duties and understanding, and who he relied upon. It was said to be reasonable in the circumstances to rely upon others where his focus was directed elsewhere to sales, contracting and supervision of the workforce and factory. 
The Court held that even if the declaration could be said to be knowingly or recklessly false the precondition for making a reference date was a matter that was void pursuant to the provisions of section 34 of SOPA. Section 34 deals with “no contracting out” and has similar wording to the Queensland and Victorian provisions. 
His Honour took up comments made recently by Justice Applegarth in the Queensland Supreme Court decision of Lean Field Developments Pty Ltd and E&amp;I Global Solutions (Aust) Pty Ltd -
 ‘……in my opinion a provision in the contract that makes the occurrence of a reference date conditional under a provision of a statutory declaration or a true statutory declaration concerning the payment of other amounts owed by the subcontractor falls into that category.  That is not a provision which provides the mechanism for fixing a date.  Rather it is a provision that seeks to add an additional condition to the right to obtain a progress payment….  A condition that sets out a form of a payment claim may, for example fall into that category.  However the apparent purpose in this case of the requirement to supply a statutory declaration in the form of Annexure Part M is to make the payment of progress payments conditional on the payment by Glavcon of the workers compensation premiums.  It is not clear how that furthers the purpose of the Security of Payment Act which is to ensure that those who do construction work have a cash flow from that work they do so that they are in the position to meet their financial obligations.’
The circumstances of this case made it to some extent irrelevant whether the declaration was intentionally false or not because of the non–contracting out provisions, but nevertheless makes some interesting conclusions and demonstrates how difficult it is to prove.
This case adds to a growing number that draw a clear distinction between clauses that serve some practical mechanism for fixing a reference date as opposed to putting further hurdles in front of a subcontractor for no apparent practical reason, which will be struck down as void.
Tony Mylne<a href="https://www.tresscox.com.au/page/our-people/partners/tony-mylne/" target="_blank"></a> is partner, Tress Cox Lawyers Brisbane and can be contacted <a href="https://www.tresscox.com.au/page/our-people/partners/tony-mylne/" target="_blank">here</a>.
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Property 101: Bondi Pacific building & construction CaseFlash: Impact of False Declarations on a Payment Claim

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Management and advisers to LJ Hooker are set to embark on a roadshow in May, according to the Australian business column Dataroom.
They suggest the iconic real estate chain, LJ Hooker's long-planned $400 million initial public offering gains some momentum.
It advised LJ Hooker had initially planned to front investors in March but merger negotiations with a Melbourne-based property agency delayed the roadshow.
In a deal that will deliver the enlarged entity an 8 per cent share of the market, The Australian revealed the proposed union with the Barry Plant real estate agency last year, however it’s understood the two companies have yet to finalise discussions.
The company accounts for 6.7 per cent of the national volume of real estate shares residential while Barry Plant accounts for 1.9 per cent.
LJ Hooker has its advisers to the float as Citi and Morgans, who are likely to emphasise the business’s reliance on a franchise model.
LJ Hooker has already secure $22m in a pre-ipo funding round which enabled it to partially pay down a loan owed to Macquarie Group.
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LJ Hooker IPO roadshow set for May

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GUEST OBSERVER
Market sentiment has turned more positive, in part because participants realise that the US economy remains solid and as China concerns abate. 
Strong US jobs growth in February boosted risk sentiment and reduced recession fears. 
The RBA remained on hold as expected. Q4 GDP data showed that the economy recorded a strong finish to 2015. 
We still expect further RBA rate cuts, but the data are challenging this view and risks are skewed toward policy easing occurring later than we forecast. 
China nominated a 6.5-7% GDP growth target for 2016. 
INTEREST RATE STRATEGY 
Yields finished higher after a white knuckle ride for the Australian front end last week. 
Risk-on sentiment globally helped push yields higher. 
Focus to remain on higher funding costs as a major bank announced a rise in investor housing loan rates. 
CURRENCY STRATEGY 
The USD is struggling as the data pulse remains strong, but Fed rhetoric remains dovish. This, together with the solid GDP outcome in Australia, is keeping the AUD elevated. 
The sustainability of these AUD levels will depend on the market volatility remaining subdued. 
COMMODITY STRATEGY 
Low prices induce supply response in copper. 
Iron ore supported by hope of further policy support in Chinese steel sector. 
Investor demand for gold remains robust. 
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RBA ON HOLD… 
As widely expected, the RBA kept the cash rate on hold at 2 percent last week. The Bank continued to take a positive view of the Australian economy, noting that “the expansion in the non-mining parts of the economy strengthened during 2015”. 
We interpreted two small changes to the Governor’s statement as slightly on the dovish side. First, the Bank noted that low inflation “would” provide scope to ease further rather than its prior reference to “may”. Secondly, the AUD was characterised as “has been adjusting” versus “has continued its adjustment”. Clearly, the Bank would still prefer a lower AUD which has subsequently pushed higher to USD0.74. The Bank would likely become more vocal on the currency again if the activity data started to soften. 
…WHICH WAS JUSTIFIED BY Q4 GDP 
The slightly more dovish tone from the Bank, however, came before the strong Q4 GDP print. Not only did Q4 GDP surprise on the upside at 0.6% q/q, upward revisions meant that growth over the year was well above expectations at 3 percent. The Bank had been flagging the potential for GDP revisions and this rate of growth helps to square the apparent disconnect with the strong labour market data last year.
<a href="/images/2016/03/7/Screen%20Shot%202016-03-07%20at%2011.57.35%20AM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/03/7/Screen%20Shot%202016-03-07%20at%2011.57.35%20AM.png" alt="">
The Bank would have been heartened by the pick-up in household spending. A key feature of the Bank’s forecasts is a strengthening in household spending to slightly above the long-run average of 3 percent. Household consumption grew 2.9 percent y/y in Q4. 
Housing construction also remained strong (+2.2 percent q/q; 10 percent y/y) in Q4. A significant backlog of work is supporting activity at record levels, especially in the key Sydney and Melbourne markets but lower approvals numbers suggest this growth impetus will wane.
<a href="/images/2016/03/7/Screen%20Shot%202016-03-07%20at%2011.59.05%20AM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/03/7/Screen%20Shot%202016-03-07%20at%2011.59.05%20AM.png" alt="">
Meanwhile, business investment fell as expected. Engineering construction drove the quarterly fall as resources projects, particularly LNG, continued to approach completion. But the news on the investment front was not all one-way traffic, with both machinery &amp; equipment spending and non-residential building rising solidly in Q4, the latter despite falling building approvals and a shrinking backlog of work. 
Overall, there were plenty of positives in the national accounts. Growth continues to broaden beyond the mining sector, and the pick-up in consumer spending will be particularly encouraging for the RBA. As such, the economy is on a much firmer footing than previously envisaged. 
WE STILL EXPECT FURTHER RATE CUTS 
Despite the improvement in the economy over the second half of 2015, we continue to expect further RBA rate cuts this year. Our call for the first rate cut to occur in May, however, is being challenged by the incoming data. 
We maintain that the contribution to growth from property market activity – not just housing construction – will ease over 2016. Dwelling construction directly added .ppt to Australia’s GDP growth in 2015 but this is unlikely to be sustained. While the level of building activity will remain high, the fall in residential building approvals over the past year suggests that the impetus to growth will wane (Figure 3).
<a href="/images/2016/03/7/Screen%20Shot%202016-03-07%20at%2012.07.56%20PM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/03/7/Screen%20Shot%202016-03-07%20at%2012.07.56%20PM.png" alt="">
 
There are also risks around household spending. While household consumption strengthened over 2015, this was against a weak income backdrop and was heavily assisted by a sharply lower saving ratio (Figure 4).
<a href="/images/2016/03/7/Screen%20Shot%202016-03-07%20at%2012.09.02%20PM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/03/7/Screen%20Shot%202016-03-07%20at%2012.09.02%20PM.png" alt="">
Presumably, the falling saving ratio can be partly attributable to a ‘wealth effect’ amid strong dwelling price growth. But this is expected to wane this year amid slower house price growth (and as equities have weakened). Some of the savings decline, however, will reflect consumption smoothing, with evidence of this particularly in the mining states of WA and Queensland that ran up savings during the commodity price boom. 
More timely data on retail sales (released last week) show that spending has been soft in recent months, with no growth in December and a modest 0.3 percent m/m rise in January. 
With unemployment expected to remain around 5¾– 6 percent, spare labour market capacity will continue to weigh on wages growth. In all, it is difficult to see household consumption accelerating further from here. Consumption growth falling below the RBA’s expectations would certainly increase the likelihood of further rate cuts.
Surveyed business conditions have moderated in the early months of 2016, indicating some slowing in non-mining activity. Ahead of the important NAB survey tomorrow, however, Ai Group’s surveys for February continued to show some consolidation in aggregate at above-average levels (Figure 5). Business confidence may be further weighed down by the negative global sentiment in February.
<a href="/images/2016/03/7/Screen%20Shot%202016-03-07%20at%2012.24.05%20PM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/03/7/Screen%20Shot%202016-03-07%20at%2012.24.05%20PM.png" alt="">
Overall, the incoming data on the Australian economy has remained OK and, for now, allays any concerns about the renewed strength in the currency. China’s target of 6.5–7 percent GDP growth for 2016, coupled with slightly higher budget deficit, lending and money supply growth targets, will also help to further calm anxiety about that economy. 
The rate cut we have pencilled in for May is less than two months away so clearly the risks are skewed towards further RBA policy easing kicking off later than we expect. Markets are only pricing one full rate cut for this year. 
Despite weak wages growth, we can’t rule out being surprised on the upside by household spending. There is room for household saving to fall further to support stronger-than-expected consumption. Housing markets have commenced 2016 in a relatively positive fashion, with auction clearance rates rebounding in Sydney and Melbourne, while price growth has stabilised at solid rates. If these early indicators translate into a second wind for building approvals, the risks would be to the upside for housing construction. Moreover, the RBA would likely be uncomfortable reducing the cash rate further in the face of ongoing strength in house price growth. 
Working in the opposite direction, however, are that the global growth backdrop remains fragile, our interest rates continue to look ‘high’ in a world where negative rates are more commonplace, and creeping upward pressure on actual lending rates in Australia is likely to remain from higher funding costs and tighter capital requirements. 
Stay tuned.
Daniel.Gradwell is economist in ANZ's Australian Research unit and can be contacted <a href="https://www.anz.com/personal/" target="_blank">here</a>.
 
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Rate cuts still likely, but ANZ says doom and gloom takes a back seat

An entity directed by HSN's Rafi Assouline and Rebel Property's Allen Linz has filed plans for an impressive new precinct in Woolloomooloo.

The major mixed-use development would transform a prominent William Street site into a new residential village anchored by affordable housing and a large public park.

The proposal, submitted as a State Significant Development Application, covers 164-172 and 174-194 William Street, a 6,398 sqm site between Forbes Street and Dowling Street on the southern edge of Woolloomooloo.

Designed by fjcstudio in collaboration with Bangawarra, Studio Bright and Tribe Studio Architects, the scheme would deliver 227 apartments across four residential buildings ranging in height up to 18 storeys, alongside retail space, public domain improvements and a new publicly accessible park.

<img alt="Rebel" data-entity-type="file" data-entity-uuid="0eb59b7c-914a-4a5c-b849-3a56749f5e93" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-06-12%20at%2011.18.51%E2%80%AFAM.png?VersionId=mxM6EEqeoLjrCiTlCzTKTvzpKuh6kSkH" />

It's another design scheme for Rebel, who took <a href="https://www.apartments.com.au/news/nsw/first-look-rebel-property-group-takes-woolloomooloo-precinct-to-nsw-government">concept plans to the NSW Gov late last year</a>.

The latest plans will be a mix of 167 build-to-sell apartments and 60 affordable apartments, with the affordable housing component representing 15 per cent of the project's gross floor area. The apartment mix includes 12 one-bedroom, 53 two-bedroom, 89 three-bedroom apartments and 13 penthouses, while the affordable housing component would comprise 42 one-bedroom and 18 two-bedroom apartments.

<img alt="Rebel" data-entity-type="file" data-entity-uuid="3b3d4553-8a8c-4af5-aa8c-519ffb1e28c6" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-06-12%20at%2011.20.12%E2%80%AFAM.png?VersionId=_Yb6ibN7eDnOtQjCNDK2eviORa4qzgv." />

Rebel Property is seeking to take advantage of the NSW Government's infill affordable housing bonus provisions under the Housing SEPP, which provide additional floor space and height in exchange for the delivery of affordable housing for a minimum of 15 years. The planning pathway allows a 30 per cent increase in floor space ratio and building height where 15 per cent of the development is dedicated to affordable housing.

&nbsp;

At the centre of the development is a 1,356 sqm sunlit public park designed to become a new community gathering space at the gateway to Woolloomooloo. The park would be complemented by a network of pedestrian laneways connecting William Street with the surrounding streets, improving permeability through what is currently a largely impermeable block.

<img alt="Rebel" data-entity-type="file" data-entity-uuid="257af931-a393-4007-8c6d-7219796df58d" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-06-12%20at%2011.20.51%E2%80%AFAM.png?VersionId=KAHy94GrhaReFsWTGDKfy39EDJ8gEEv4" />

The design team says the public domain has been heavily influenced by the site's topography and Aboriginal cultural heritage, drawing on the escarpments, gullies and landscape characteristics that historically defined the area before urbanisation. The landscape design has been developed in partnership with First Nations consultancy Bangawarra.

The project would be delivered across four separate buildings. The William Street East and William Street West buildings, designed by fjcstudio, would contain the majority of the apartments. Melbourne-based Studio Bright has designed the Forbes Street building, while Tribe Studio Architects is responsible for the Dowling Street building.

Rebel had secured approval for the concept plans late last year.

Joel Robinson

First look: HSN, Rebel, advances Woolloomooloo precinct plans

A locally heritage-listed furniture showroom on Water Street is set to become the centrepiece of a new mixed-use residential development as local developer&nbsp;<a href="https://www.apartments.com.au/developers/keylin-group">Keylin</a> seeks approval for <a href="https://www.apartments.com.au/new-apartments/lotus-on-water-street-290-water-street-fortitude-valley-qld-4006">Lotus on Water Street</a>, a 15-storey project on the Fortitude Valley side of Spring Hill.

The proposal spans 290 Water Street and 137-141 Warry Street, combining several properties into a 2,869 sqm site that sits between Fortitude Valley, Spring Hill and the rapidly evolving Victoria Park precinct. Keylin's plans would deliver 132 apartments alongside new retail, hospitality and commercial space, while retaining and repurposing the historic Brunswick Home Furnishers Showroom that fronts Water Street.

Designed by <a href="https://www.apartments.com.au/architects/jackson-teece">Jackson Teece</a>, Lotus on Water Street comprises a 12-storey residential tower rising above a three-storey podium and communal rooftop terrace. The development includes 76 apartments classified as multiple dwellings and a further 56 units proposed as short-term accommodation, designed to be flexibly used as either accommodation or permanent residences. The apartment mix comprises six one-bedroom, 54 two-bedroom and 16 three-bedroom homes.

<img alt="First look: Keylin unveils heritage-led Lotus on Water Street tower in Fortitude Valley" data-entity-type="file" data-entity-uuid="9822bb79-6c49-49c9-95ba-319e8c8d81c3" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/fortitude%20valley%20front.png?VersionId=ioW8zbN4UVebbLetTFuv92t.HkdgfR5e" />

Residents would have access to an extensive rooftop recreation level spanning more than 1,200 sqm of communal open space. Plans include a pool, gym, sauna, infrared sauna, yoga area, library, private dining room, barbecue facilities and landscaped entertainment spaces, making the rooftop the project's largest shared amenity offering.

At street level, the proposal focuses on the adaptive reuse of the heritage buildings along Water Street, where 518 sqm of retail and commercial space is planned across shop, office and food and drink outlet uses. A permeable residential lobby would be positioned between the retained heritage buildings, creating a pedestrian connection between the historic streetscape and the new tower behind.

<img alt="First look: Keylin unveils heritage-led Lotus on Water Street tower in Fortitude Valley" data-entity-type="file" data-entity-uuid="269cf3e0-7d13-48bf-a318-05a00deb5c10" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/fortitude%20valley%20podium.png?VersionId=DLXmTCLsp6GOcLpQ0h.0z7wKCw59EhN_" />

The heritage retention strategy is central to the scheme. The development application notes that the Brunswick Home Furnishers Showroom and adjoining heritage buildings will remain, with only non-significant structures on the site earmarked for removal under a previously issued Heritage Exemption Certificate. Levels one and two of the new podium are recessed behind the heritage façades to maintain their prominence within the streetscape.

Jackson Teece has drawn inspiration from the site's manufacturing history when designing the podium. The planning documents state that the façade incorporates perforated metal screening that references the woven and rattan furniture historically produced on the site. Cascading and climbing plants are integrated throughout the podium to soften the building's presentation and screen parking levels behind. The landscape strategy also informs the project's name, Lotus on Water Street, drawing on the historic Spring Hollow waterholes that once ran through Spring Hill and the blue water lilies associated with Meeanjin, Brisbane's traditional name.

The proposal also incorporates the neighbouring property at 141 Warry Street, currently occupied by a healthcare service. The existing building would remain, with nine dedicated parking spaces allocated within the new development to support its ongoing operation. In total, Lotus on Water Street proposes 117 car spaces, including 110 resident spaces and seven visitor bays, alongside 100 bicycle spaces.

<img alt="First look: Keylin unveils heritage-led Lotus on Water Street tower in Fortitude Valley" data-entity-type="file" data-entity-uuid="70cf07bc-4fd8-4e70-92dd-be8b21c4e4f0" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/fortitude%20valley%20site.png?VersionId=txlxrJImM0Sm_vTzHVKh5DDUkyL_CiiA" />

The site sits within the Spring Hill East Precinct of the Spring Hill Neighbourhood Plan and is positioned around 650 metres from both Fortitude Valley Station and Exhibition Station. It is also within walking distance of the King Street precinct, Royal Brisbane and Women's Hospital, Herston Quarter and Victoria Park, which is earmarked to become a major venue precinct ahead of the Brisbane 2032 Olympic and Paralympic Games.

Planning documents describe the location as a key gateway between Spring Hill and Fortitude Valley and highlight the area's increasing importance as new transport infrastructure and Olympic-related investment reshape Brisbane's inner north. The development team argues the project will contribute additional housing supply while activating a section of Water Street that has historically received less investment than other parts of the Valley.

Keylin has become increasingly active across Brisbane and southeast Queensland, assembling sites in strategic inner-city locations. They are currently selling and delivering <a href="https://www.apartments.com.au/new-apartments/oria-spring-hill-447-gregory-terrace-spring-hill-qld-4000">Oria Spring Hill</a>, just over 140 apartments due for completion in 2027.

Keylin plans heritage-led Lotus on Water Street apartment development in Fortitude Valley

Roseville is poised for a wave of new apartment development following the NSW Government's rezoning of land around Roseville Station under its Transport Oriented Development program.

The new planning controls have unlocked significant development potential within walking distance of the station, with a number of sites expected to be amalgamated and redeveloped in the coming years as developers seek to take advantage of the increased density allowances.

One of the more restrained developments in the precinct, and set among the first to be delivered having commenced well before the recent changes, is Hyecorp's Juliet. The boutique apartment project is already well under construction and remains on track to welcome residents by the end of the year, offering a markedly different proposition to many of the larger-scale developments now likely to emerge across the suburb.

[smartcode_project:default project_id=7395 project_image_fid=278194]

<a href="https://www.apartments.com.au/new-apartments/juliet-roseville-64-pacific-highway-roseville-nsw-2069">Juliet</a> will comprise just&nbsp;34 one-, two-, and three-bedroom apartments opposite Roseville Station. For Hyecorp, which has delivered projects across Sydney's Lower North Shore for more than three decades, Roseville presented a rare opportunity to address a growing gap in the market.

"<a href="https://www.apartments.com.au/developments/roseville-nsw-2069">Roseville</a> has long been one of the North Shore's most tightly held and desirable suburbs, offering a unique combination of village charm, established greenery, excellent transport connections, and proximity to some of Sydney's best schools and lifestyle amenities," Hyecorp said.

"We recognised a growing demand from local homeowners seeking to downsize without leaving the community they have built their lives around. The location presented a rare opportunity to create homes that cater specifically to that buyer profile."

[smartcode_project:default project_id=7395 project_image_fid=278196]

The six-level development has been designed by <a href="https://www.apartments.com.au/architects/pbd-architects">PBD Architects</a> as a collection of residences that feel more like homes than apartments. The brief centred generous floorplans, abundant natural light, quality finishes, and strong connections to outdoor space.

PBD Architects drew inspiration from Roseville's established garden suburb character, creating a building that sits comfortably within its surroundings rather than dominating them. The architecture incorporates natural materials, soft forms, layered landscaping, expansive balconies, and generous setbacks to strengthen the connection between residents and the suburb's leafy environment.

"The focus was on designing spacious, house-like residences for discerning owner-occupiers and downsizers who wanted to remain on the North Shore without compromising on comfort, privacy, or design," PBD said.&nbsp;

"Every apartment was to feel considered, timeless, and highly functional."

[smartcode_project:default project_id=7395 project_image_fid=278195]

Inside, residences feature engineered timber flooring, stone kitchen benchtops and splashbacks, integrated Fisher &amp; Paykel appliances, ducted air conditioning, and large outdoor entertaining areas designed to take advantage of district and treetop views.

Residents will also have access to a rooftop barbecue and lounge area, alongside practical amenities including parcel lockers, EV charging capability, bicycle storage, a dog wash bay, and a basement car wash facility.

The majority of purchasers so far have been local owner-occupiers from Roseville, Lindfield, Chatswood, Killara, and the broader Upper North Shore, many of whom are transitioning from larger family homes.

"Buyers are looking for spacious, house-like apartments that allow them to downsize without feeling like they are sacrificing comfort or functionality," Hyecorp noted.

"They value large kitchens, generous living areas, ample storage, quality finishes, secure parking, lift access, and low-maintenance living."

[smartcode_project:default project_id=7395 project_image_fid=278204]

Juliet sits directly opposite Roseville Train Station and within walking distance of Roseville Village, while Chatswood's retail and dining precinct is only minutes away. The development is also surrounded by some of Sydney's most established schools, including Roseville College, Ravenswood, Pymble Ladies' College, and Knox Grammar, as well as nearby parklands and golf courses.

Juliet is currently more than 75 per cent sold ahead of its anticipated completion in late 2026.

[smartcode_project_cta:default project_id=7395]

Juliet to sit quietly amid Roseville apartment boom

Sherpa Property Group has unveiled the third instalment of its Flourish series, securing full approval for the two-tower, $500 million Flourish Soleira development in Palm Beach.

<a href="https://www.apartments.com.au/new-apartments/flourish-soleira-1150-1154-gold-coast-highway-palm-beach-qld-4221">Flourish Soleira</a> will rise from a prominent site in the commercial heart of Palm Beach, the long-time home of Cash Converters and a range of local retailers.

The project will introduce a new retail and dining precinct at ground level, beneath 286 apartments.

[smartcode_project:default project_id=150017 project_image_fid=370959]

“We’re very committed to not only providing affordable residential offerings that are much needed in Palm Beach, but also delivering a vibrant new commercial heart that complements the extraordinary growth of the southern Gold Coast,” Sherpa Property Group founder Christie Leet said.

The development will sit under Sherpa's Flourish brand, which is aimed at providing a pathway into the beachside suburb for locals, first-home buyers and downsizers. In a move designed to assist first-home buyers entering the market, Sherpa has reserved all one and two-bedroom, one-bathroom apartments exclusively for eligible first-home buyers.

[smartcode_project:default project_id=150017 project_image_fid=370964]

“Our vision through Flourish is to create a vibrant retail and lifestyle focal point within the Palm Beach centre zone, delivering thriving communities underpinned by lifestyle-rich locations,” Leet said.

“So far, Flourish has been an incredible success, and we hope to carry this momentum as we progress the next two Flourish projects in Palm Beach.”

[smartcode_project:default project_id=150017 project_image_fid=371430]

Located across 1150-1164 Gold Coast Highway and 3 Sixth Avenue, the development will comprise two towers. The northern tower will deliver 154 apartments, while the southern tower will add a further 132 residences, helping address ongoing demand for new apartments in the tightly held coastal suburb.

Flourish Soleira will also feature the most extensive rooftop amenity offering ever delivered in Palm Beach.

The two towers will be connected by a skybridge, with residents gaining access to a rooftop recreation deck featuring a full-width swimming pool, hot and cold plunge pools, wellness spaces, a gymnasium, private dining facilities, massage treatment rooms, barbecue areas, a basketball court, golf simulator, indoor and outdoor dining spaces, sun lounges and extensive landscaping.

LPS Group is expected to start construction later this year.

Sherpa is already well advanced on construction of its debut Flourish project, Flourish Amargo, located just around the corner from Soleira. Meanwhile, Flourish Oasis, positioned opposite Amargo, recently commenced construction and has nearly sold out its collection of 47 apartments.

[smartcode_project_cta:default project_id=150017]

Sherpa unveils $500m mixed-use Palm Beach precinct, Flourish Soleira

Are mortgage holders set to get a reprieve from the RBA in 2026?

Big Four bank NAB believes so. They are now expecting the next move from the RBA to be a cut, rather than a hike, which they had pencilled in for August. They are unsure of the timing of the cut however, they note in their latest&nbsp;NAB Economics RBA Watch.

NAB Chief Economist, Dr Sally Auld, said recent data suggests the economy has lost momentum and the outlook for rates has shifted, noting that the broader economic backdrop has changed since earlier in the year.

“The next move in the cash rate is likely to be down, but the timing is uncertain," Dr Auld said.

"In February, growth was above trend, the economy was operating above capacity and there was uncertainty over the restrictiveness of rates. None of these conditions exist today,” she outlined.

Dr Auld said recent data pointed to softer momentum across the economy while acknowledging that at the same time, uncertainty remains a key feature of the outlook.

“Both Q1 GDP data and the NAB business survey suggest momentum in the economy has slowed, meaning that growth has likely peaked for the cycle. That said, we are cognisant there is still considerable uncertainty around the outlook, both with respect to activity and inflation.”

Dr Auld said inflation risks and labour market outcomes would be important to watch.

“On the prices side, we are still forecasting above target core inflation through to mid-2027. Margins will compress and weaker labour market outcomes are a risk.”

She said tighter financial conditions are expected to weigh on housing and activity.

“Tighter financial conditions will be reflected in a slowing in house price growth and housing credit growth. In summary, we have greater conviction that the next move in rates is down, but less conviction on the timing.”

Jonathan Chancellor

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