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Tivoli House at 59 Tivoli Road, South Yarra passed in at $2.71 million at weekend auction, but sold later for $2.85 million.
Kay &amp; Burton agent Grant Samuel secured the higher offer from the highest bidder.
<a href="https://www.realestateview.com.au/Real-Estate/59-tivoli-road-south-yarra/Property-Details-buy-residential-8603692" target="_blank" style="line-height: 1.3em;">The double-fronted, 1880s period home</a> had a $2.6 million opening bid.
It sold for $431,000 in 1990.
CoreLogic RP Data puts the <a href="/news">median house price at a record $1.19 million</a>.
It sold for $431,000 in 1990.
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jchancellor-FAypfDUnLy

Tivoli House, South Yarra sold at $2.85 million

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The <a href="https://www.domain.com.au/property/sold/house/nsw/north-bondi/?adid=2011881009" target="_blank">North Bondi home</a> of the late Luigi Coluzzi sold under the hammer last month for $1.73 million. 
The founder of Bar Coluzzi in Darlinghurst died last year, aged 84, prompting the listing of his single storey Glenayr Avenue semi through McGrath agent Peter Starr and Raine &amp; Horne agent Ric Serreo.
It last traded in 2000 for $571,500.
Luigi Coluzzi's cafe in Darlinghurst was a place for decades where artists rubbed shoulders with politicians, actors, leading lawyers and late night taxi drivers.
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North Bondi home of the late Luigi Coluzzi sold

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Sydney Swans player Daniel Hannebery sold his North Bondi home at auction last night for $2,203,000 
There were three bidders when Ric Serrao of Raine &amp; Horne Double Bay/Bondi offering the two-storey listing.
It was bought in August 2012 pre-auction for $1.48 million.
<a href="/news">CoreLogic RP Data </a>suggest the median house price sits at around $2 million currently. 
The nearby single story <a href="https://www.domain.com.au/property/sold/house/nsw/north-bondi/?adid=2011881009" target="_blank">North Bondi home</a> of the late Luigi Coluzzi sold under the hammer last month for $1.73 million. 
The founder of Bar Coluzzi in Darlinghurst died last year, aged 84, prompting the listing of his single storey Glenayr Avenue semi through McGrath agent Peter Starr and Raine &amp; Horne agent Ric Serreo.
It last traded in 2000 for $571,500.
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Sydney Swan Daniel Hannebery is a Bondi multi-millioniare

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Verde, the 12-story South Brisbane residential building will seek to embrace South East Queensland’s climate, with 82 environmentally sustainable, lifestyle friendly, spacious apartments.
Set 15 minutes walk from the centre of Brisbane, Verde will feature the largest vertical garden in Queensland as its centrepiece.
The north and south facing walls will be covered in 480 square metres of plants including herbs and succulents.
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"It’s my vision to help make Brisbane a greener city,” VCP Developments and Modern Architecture Practice spokesman Paul Obod said.
the 12-story building would embrace South East Queensland’s climate, with 82 environmentally sustainable, lifestyle friendly, spacious apartments.
“Verde blends cutting edge design, innovation and sought after luxuries including a rooftop infinity pool and an expansive barbeque and entertaining area.” 
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Verde is being marketed by CBRE Residential Projects director Jon Rivera, who will launch Verde to the market this month.
There are already 20 lodged expressions of interests from apartment buyers.
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“What’s unrealistic in the southern states is a reality in Brisbane and it all comes together at Verde.” 
Two bedroom, two bathroom apartments, with a carspace, start at $585,000, with three bedroom penthouses starting at $1.4 million. 
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Verde to feature Brisbane's largest vertical garden

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Nest at the Hill, a new 249-apartment development by Singapore-based SHC, aims to add an element of luxe to Doncaster. 
Timber flooring in living areas, wool blend carpet in bedrooms and porcelain tiles in bathrooms.
Private rooftop terraces will be enjoyed by residents of eight of its 10 penthouse apartments.  
<a href="https://www.realestate.com.au/project-nest+at+the+hill-vic-doncaster-600007751" target="_blank">The 642 to 654 Doncaster Road, Doncaster complex</a> will have 249 apartments, four townhouses and six retail spaces. 
<img src="/images/2015/05/07/doncaster-may-7-two.png" alt="">
Apartments range from generous one-bedroom dwellings of around 53 square metre start from $395,000.
Its two bedrooms start from 69 square metre from $520,000 and three-bedroom apartments from 83 square metre range in price of $726,000 to $800,000. 
Being such a large project, it needs to cater for a variety of needs.
The generously sized two-bed two-bath configuration will likely suit owner-occupiers first and foremost, but also investors.
<img src="/images/2015/05/07/doncaster-may-7-three.png" alt="">
It will have a glamorous hotel-style lobby. 
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Nest at the Hill is located at the highest point on top of Doncaster Hill, directly opposite Westfield shopping town. It is 18 kilometres to the CBD and 4 kilometres to Box Hill. 
Recent selling in Doncaster suggests about half the buyers will be ethnically Chinese, with investors coming from the nearby suburbs of Box Hill, Balwyn and Kew, which have a very high proportion of Chinese residents.
SHC (Sin Heng Chan) from Singapore commissioned the Melbourne architects, K2LD. 
The display suite will open 16 May, with construction commencing beginning of 2016 for completion at the end of 2018.
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Nest at the Hill, Doncaster apartment development with hotel style lobby

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The Baker brothers have listed their barn residence at Exeter with $1.85 million hopes.
It last sold through Drew Lindsay at Drew Lindsay Real Estate at $860,000 in 2011. 
No ordinary abode as it was style queen Maggie Tabberer who was its last owner.
<img class="attachment-big wp-post-image" src="https://www.drewlindsay.com.au/wp-content/uploads/2015/05/Original-Barn-front-640x360.jpg" alt="The Barn, Exeter" title="The Barn, Exeter">
But the New England-style barn at Exeter goes back further having been bought by Maggie in 2001 from acclaimed singer Anthony Warlow for $425,000.
<a href="https://www.drewlindsay.com.au/?property=the-barn-exeter" target="_blank">The three-bedroom, lavender-grey barn</a> is on 2050 square metres of established gardens with high hedges.
It was built by Tony and Michelle McAuslan in the early 1990s. 
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Maggie Tabberer's former Southern Highlands barn for sale

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Foreign property investors being used as 'cash cows' by the Victorian government could potentially impact foreign investment in the state, according to property, finance and immigration firm Ausin Group (Ausin). 
The comments came after the Victorian government announced it is set to impose a 3% levy on purchases by foreign citizens who are not permanent residents along with a 0.5% land tax surcharge to absentee property owners who are not citizens or permanent residents.
Joseph Zaja, the Ausin Group managing director believes the Victorian property industry is currently sustaining the state economy with stamp duty generating the highest tax revenue in the state. 
"Overseas investors are an easy revenue raising target for the government," Mr Zaja said. 
“Foreign property investors are the lifeblood for several major property projects across Victoria.
"Without this cash injection many would not be developed and thousands of jobs would be lost. The State government is sending the message to foreign investors that it is not open for business by introducing new property taxes.
“Overseas buyers are about to be slugged with two new property taxes from both Federal and State governments – a double whammy."
 The Federal government is currently considering introducing a $5,000 levy as part of its Foreign Investment Review Board changes for overseas buyers purchasing in Australia. 
Mr Zaja stressed Australia's enviable reputation as a place that welcomes foreign investment was key to future economic prosperity. 
“The Victorian government’s announcement to slug foreign property purchasers with a new tax is short sighted.
"It is hoped the other states don’t follow their lead.
"We expect our foreign purchasers to start looking for more investment opportunities in others states,” Mr Zaja said.
In the last financial year over 60 per cent of Ausin’s property sales totally almost 2000 were to foreigners buying property in Victoria.  
Over half of those sales were to investors seeking to move here in the near future.
Ausin is one of Australia’s largest privately owned companies providing property, immigration and financial services advice to both Australian and Asia Pacific markets. The company sells properties for Australian Stock Exchange (ASX) listed companies and private property developers in Australia and New Zealand.
It employs over 350 staff across its offices.
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Victorian government milking foreign 'cash cow'

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It appears media reports that billionaire Tony Fung has purchased the Sheraton Mirage Gold Coast for $160 million are premature.
“Pearls Australasia, owner of Sheraton Mirage Resort and Spa Gold Coast, has not confirmed the sale of the resort and continues to consider perspective owners via sales agency, McVay Real Estate, as reported today in the media,” came the ensuing media statement.
“An announcement will be made by the owning company once a sale agreement has been settled in full."
“The recently refurbished Sheraton Mirage Resort and Spa has been managed as a Sheraton branded resort for 27 years, and a long term management contract is in place with Starwood Hotels and Resorts Asia Pacific Pty Ltd to operate the resort as a Sheraton into the future,” <a href="https://www.hotelmanagement.com.au/2015/05/06/exclusive-owner-denies-sheraton-mirage-gold-coast-sale/" target="_blank">the statement to website hotelmanagement.com.au said</a>.
The Australian said Fung revealed to the publication “his vision to develop the five-star beachfront Sheraton Mirage and Marina Mirage into an integrated casino resort precinct”.
Fung is also busy proposing to develop the Aquis Great Barrier Reef casino resort near Cairns.
Pearls Australasia had been expected to fetch around double the $62.5 million the company paid for the property in 2009.
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Sheraton Mirage Gold Coast sale mystery

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Auswin TWT has emerged as the $96 million buyer of the Surry Hills Shopping Village.
Located at the corner of Cleveland and Baptist Street, Redfer, the sale reflect a yield of 4.48%.
The local, but Chinese-backed developer Auswin TWT are also converting Tabcorp’s long-standing Sydney headquarters in Ultimo into a $78 million Woods Bagot-designed apartment and retail complex.
The Surry Hills neighbourhood shopping mall is anchored by Coles. The 1.519 hectare site has mixed use zoning and has redevelopment potential for 300 apartments with a ground floor shopping complex.
Property Observer reported it had been sold for around $100 million late last month.
The vendor bought it for $6.3 million 30 years ago when it was a mall on the old Wunderlich factory site.
It was listed through Scott Timbrell and Jeff Moxham of <a href="https://www.realcommercial.com.au/property-land+development-nsw-surry+hills-501482783" target="_blank">Ray White Commercial</a> with a current gross passing income from a number of tenancies of $4.3 million a year.
It was 1992 when the shop owners at Redfern Mall voted to change the name to Surry Hills Shopping Village.
Although the site is technically in Redfern, shop owners believed they were missing out on business because of geographical confusion.
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Auswin TWT spend $96 million in Surry Hills, Sydney

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Victorian Treasurer budget papers warned that the most likely risk to predicted Victorian tax revenue was posed by ­reduced stamp duty income if ­investor sentiment wanes.
Treasury figures show stamp duty revenue from Victoria's property market rose by 27% in 2013-14.
Property taxes are forecast to contribute $7.7 billion to the state's total $18.2 billion tax revenue in the current financial year.
The higher income from property offsets recent weaker revenue from gambling taxes.
"As the upward momentum of the current cycle builds, so does the likelihood of a correction, as has been the case in past property cycles," Treasury warned.
The strong property has also boosted land taxes forecast to be around $1.8 billion next financial year.
The new 3% land transfer duty surcharge for non-resident Australians is tipped to add a $39.5 million in 2015-16.
Treasurer Tim Pallas said the government was still working through how its new taxes for foreign buyers would be applied. 
A 0.5% land tax surcharge for absentee owners of Victorian property will also be imposed next year, expected to raise $53 million over four years.
“Let’s be frank — the state of Victoria has a very high dependence on the performance of the property market through both land tax and stamp duty,” Pallas said.
“That that is a risk to the budget is, I think, an undeniable fact.”
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Victorian Treasury fears Melbourne property price correction

One of Brisbane's last major riverfront redevelopment opportunities has taken a significant step forward, with Lendlease selected as the Queensland Government's preferred development partner for the former Visy site in South Brisbane.

The seven-hectare industrial site, positioned between South Bank and West End and 1.3 kilometres from the Brisbane CBD, will be transformed into a mixed-use precinct expected to deliver more than 4,000 new homes alongside extensive public open space and riverfront parkland.

The project is one of the largest urban renewal opportunities currently planned in Brisbane and is expected to play a key role in accommodating the city's growing population ahead of the 2032 Olympic and Paralympic Games.

Plans for the precinct include a network of riverfront promenades and boardwalks, new public plazas, parkland, amphitheatre-style gathering spaces and shared pedestrian and cycling links designed to reconnect the long-isolated site with the Brisbane River.

The Queensland Government is targeting delivery of the first homes and key public spaces before the 2032 Games, allowing the precinct to begin contributing new housing and public amenity well before the broader masterplan is complete.

The redevelopment is also expected to support more than 3,000 jobs across planning, construction and ongoing operations.

For Lendlease, the appointment adds another major urban regeneration project to its Queensland portfolio. The developer has operated in the state for more than 70 years and has delivered a number of large-scale mixed-use precincts in partnership with government.

Lendlease Development CEO Claire Johnston said the project represented one of Brisbane's most significant redevelopment opportunities.

"The transformation of the former Visy site represents a rare opportunity to reimagine one of Brisbane's most significant riverfront locations, deliver thousands of much-needed homes, and create long-term legacy," Johnston said.

"In partnership with the Queensland Government, we have the opportunity to create a new riverside destination that will help shape Brisbane's growth and how people experience the city for decades to come.

"This is exactly the type of large-scale, city-shaping development that will provide lasting benefits for Queensland, bringing together housing, jobs and world-class public spaces."

Deputy Premier and Minister for State Development, Infrastructure and Planning Jarrod Bleijie said the riverfront transformation would deliver a thriving new community precinct.

“The Crisafulli Government is delivering this golden opportunity to unlock a riverfront jewel for all Queenslanders,” Deputy Premier Bleijie said.

“This is a once-in-a-generation moment to reshape a significant slice of Brisbane and deliver lasting benefits – thousands of new homes, and public spaces for all Queenslanders to enjoy well beyond the 2032 Olympic and Paralympic Games – unlike Labor’s plan which would have delivered zero benefits and zero new homes.

“Queensland is well and truly open for business and through partnership with the private sector, we are accelerating delivery while ensuring strong housing, community and economic outcomes."

Early works on the precinct are expected to commence in April 2027.

Joel Robinson

Lendlease selected to deliver transformative South Brisbane riverfront precinct

Eddy Haddad's <a href="https://www.apartments.com.au/developers/level-33">Level 33</a> is levelling up its approved Wollongong development, as the coastal city south of Sydney continues to prove popular in the high-density development space.

Level 33, a longtime developer in the Wollongong area, has gone through the NSW Government's Housing Delivery Authority to upsize its approved two-tower development on the corner of Crown Street and Gladstone Avenue, just 100 metres from Wollongong Station.

The developer currently has approval for 252 apartments across two buildings rising to 19 storeys. It is now seeking approval for 33 and 38-storey towers that would deliver 467 apartments, including 67 affordable homes.

Designed by <a href="https://www.apartments.com.au/architects/bka-architecture">BKA Architecture</a>, the development would comprise apartments above a three-level podium with around 1,100 sqm of retail space, along with basement parking for 448 vehicles.

According to the Urban Design Report by BKA, the proposal has the capacity to "reinforce the precinct's identity by strengthening links between health, education, and transport services, while also contributing to Wollongong's ongoing evolution as a key regional centre."

Wollongong is somewhat in vogue. Between Level 33 and Urban Property Group, the two developers have several thousand apartments planned across the city.

Level 33 is currently delivering Easterly Wollongong, one of its most boutique projects to date with just 21 high-end apartments, as well as Atchison &amp; Kenny, a 329-apartment development due for completion later this year.

The developer plans to redevelop the 13,088 sqm WIN Grand megasite into <a href="https://www.apartments.com.au/new-apartments/crown-square-216-238-keira-street-wollongong-nsw-2500">Crown Square</a>, a new $500 million precinct with nearly 600 apartments. It also has more than 900 apartments planned for the former Bunnings Warehouse site at the intersection of Gipps and Flinders streets.

Urban Property Group is also playing a major role in the city's transformation. Its five-tower Keira Place precinct will deliver more than 800 homes, and it has recently lodged plans for a further 300 apartments near Wollongong Station.

First look: Level 33 upsizes Wollongong apartment towers

Just a week after filing plans for the final stage of its major Keira Place masterplan, <a href="https://www.apartments.com.au/developers/urban-property-group">Urban Property Group</a> has unveiled another significant housing proposal in Wollongong, this time targeting a prominent site opposite North Wollongong Station.

The developer has lodged a State Significant Development Application for a 38-storey mixed-use tower at <a href="https://www.apartments.com.au/new-apartments/4-4a-flinders-street-north-wollongong-nsw-2500">4-4A Flinders Street</a>, around one kilometre north of the <a href="https://www.apartments.com.au/new-apartments/keira-place-wollongong-120-122-smith-street-wollongong-nsw-2500">Keira Place precinct</a> currently taking shape on the edge of the CBD.

<img alt="First look: Urban Property Group plans 38-storey North Wollongong tower as Keira Place expansion gathers pace" data-entity-type="file" data-entity-uuid="2b6428f1-6405-4038-8476-897de440e90d" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/flinders%20podium.png?VersionId=QLqEvK0OuCEwRC47oHNftrw2B1YqaHF8" />

Designed by Studio.SC, the proposal comprises a 38-storey mixed-use development containing 303 apartments, including 45 affordable housing units, alongside 174 co-living residences. The scheme also includes ground-floor retail space, extensive landscaping and public domain improvements.

Studio.SC noted in the proposal it "outlines a vision for a landmark transit-oriented mixed-use development centred around North Wollongong Station, designed to support the city’s future growth while responding to the NSW Government’s housing and planning reforms."

The architecture firm said the proposal responds to the opportunities and constraints shaping future growth within the 400-metre catchment of the station and represents "a coordinated and future-focused approach to urban intensification, contributing to the long-term evolution of North Wollongong as a connected, walkable and high-density station precinct."

The site occupies a strategic corner bounded by Flinders Street, Station Street, Stafford Street and the Princes Highway, directly opposite North Wollongong Station.

<img alt="First look: Urban Property Group plans 38-storey North Wollongong tower as Keira Place expansion gathers pace" data-entity-type="file" data-entity-uuid="7863adad-1f71-4022-b850-f44b252738fd" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/flinders%20podium%20a.png?VersionId=WsU7av0g8_8R2tGHWxgHeFSlhu7yeY1V" />

The proposal follows Urban Property Group's recent submission for the second and final stage of Keira Place, which would deliver a further three buildings comprising 657 homes opposite Beaton Park. It builds on the first stage, which features 150 apartments across two towers and recently commenced construction.

Urban Property Group CEO Patrick Elias said breaking ground on the first stage marked a significant milestone for Wollongong and reflected the developer's long-term commitment to regional cities.

"Today's groundbreaking is about turning approvals into homes and moving quickly to deliver much-needed housing in Wollongong's city centre," Elias said.

"Keira Place will provide a diverse mix of homes close to jobs, transport and services, while setting a high benchmark for quality, durability and consumer protection."

Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/urban-property-group-unveils-trio-of-towers-for-next-stage-of-new-wollongong-precinct-keira-place">Urban Property Group unveils trio of towers for next stage of new Wollongong precinct, Keira Place</a>

First look: Urban Property Group plans next major Wollongong tower

<a href="https://www.apartments.com.au/developers/arada">Arada Australia</a> has wasted little time expanding its ambitions in Campsie, lodging plans for a second major project in the rapidly transforming town centre just months after unveiling its three-tower One Campsie proposal on Beamish Street.

The UAE-backed developer has now taken aim at one of the suburb’s most strategically positioned sites, filing a State Significant Development Application for a <a href="https://www.apartments.com.au/new-apartments/10-north-parade-campsie-nsw-2194">33-storey mixed-use tower</a> at 10 London Street and 43 North Parade, directly opposite the future Campsie Metro Station. The proposal is currently on public exhibition and represents another significant vote of confidence in Campsie's emergence as one of Sydney’s key transit-oriented growth centres.

Designed by <a href="https://www.apartments.com.au/architects/woods-bagot">Woods Bagot</a>, the development would deliver 156 apartments above a podium containing retail and commercial space, creating a new residential and commercial gateway to the town centre. The scheme also includes a four-level above-ground parking podium and a dedicated residential amenity floor featuring wellness and recreation facilities. At least 10 per cent of the apartments would be allocated as affordable housing for a period of 10 years.

The proposal occupies a 1,631 sqm site bounded by London Street, North Parade and Dispensary Lane, immediately adjoining the future Metro station precinct and just metres from Beamish Street’s retail and dining strip. According to the Urban Design Report, the project seeks to deliver "a great place that prioritises human-scaled experience and provides spatial improvements to the area."

<img alt="First look: Arada doubles down in Campsie with 33-storey Metro-front tower plans" data-entity-type="file" data-entity-uuid="175a8324-015b-4856-abe3-ce6f23199fa7" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/podium%20campsie.png?VersionId=742UGwXFhFBX4GEl6wX4PYIWREAgn6il" />

Woods Bagot describes the tower as a key marker within Campsie's next phase of growth.

"Located directly opposite the new Campsie Metro Station on North Parade, 10 London Street is a thoughtfully composed 33-storey mixed-use tower that contributes to the ongoing transformation of the town centre," the Architectural Design Report states. The report says the project is intended to provide "high-quality homes within a vibrant, connected urban environment, while helping define Campsie's future skyline."

A strong emphasis has been placed on the public realm. The ground floor incorporates over 500 sqm of retail space and active frontages along both London Street and North Parade, while the podium is wrapped by extensive landscaped planting intended to soften the building's scale and strengthen the pedestrian experience. The development would also widen surrounding footpaths and improve connections between the Metro station and the broader town centre.

Above the podium, residents would have access to more than 1,400 sqm of communal amenities, including a pool, gym and landscaped recreation spaces. A distinctive green-wall treatment extending across four podium levels forms a major architectural feature, helping differentiate the project within the emerging high-density precinct.

The tower's design is closely tied to the broader Campsie Town Centre Master Plan and the arrival of Sydney Metro. The Urban Design Report notes the proposal "directly supports the Campsie Town Centre Master Plan by delivering new homes in a location explicitly identified for growth, improved accessibility, and high-quality urban renewal." It adds that the project contributes to the master plan's vision for a strengthened town centre supported by thousands of new homes around the future Metro station.

<img alt="First look: Arada doubles down in Campsie with 33-storey Metro-front tower plans" data-entity-type="file" data-entity-uuid="bfd17654-253e-489a-bade-6278d63db412" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/base%20campsie.png?VersionId=3roJPMQGs36dazpkhvpvbDDP73Ld.Ica" />

The application follows Arada Australia's recently lodged One Campsie project at 124–142 Beamish Street and 16–18 Ninth Avenue, where the developer is seeking approval for 346 apartments across three towers rising 24, 32 and 39 storeys. Together, the two proposals would cement Arada Australia as one of the most influential developers shaping Campsie's future urban form.

Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/first-look-arada-files-for-trio-of-apartment-towers-in-campsie-town-centre">First Look: Arada Australia files for trio of apartment towers in Campsie town centre</a>

Arada Australia entered the Australian market in 2024 and has rapidly assembled a significant development pipeline across Sydney. Alongside its Campsie holdings, the developer is soon to launch <a href="https://www.apartments.com.au/new-apartments/wattle-green-2-fishburn-crescent-castle-hill-nsw-2154">Wattle Green</a> in Castle Hill, and has expanded its local operations following its acquisition of construction firm Roberts &amp; Co.

Located around 14 kilometres south-west of the Sydney CBD, the site sits at the centre of one of Sydney's fastest-changing middle-ring precincts. The Metro conversion of Campsie Station, combined with Canterbury-Bankstown Council's master planning framework, is driving significant residential intensification around Beamish Street and North Parade, with thousands of new homes expected over coming decades.

First look: Arada Australia doubles down in Campsie with 33-storey Metro-front tower plans

For the first time in a long time, Australia's inflation story is starting to look more like a landing than a fight.

The latest Consumer Price Index figures from the Australian Bureau of Statistics showed annual inflation eased to four per cent in May, down from 4.2 per cent in April. On the surface, that might not seem like a major move. Inflation remains above the Reserve Bank's target range and some categories continue to record stubborn price growth.

But the significance of this result lies less in where inflation sits today and more in what it means for where interest rates are likely heading next.

The biggest takeaway is that inflation continues to move in the right direction.

Markets had been bracing for another sticky result after a period where progress appeared to stall. Instead, headline inflation came in softer than expected, helped by falling fuel prices and easing transport costs. Annual transport inflation halved from 6.6 per cent in April to 3.3 per cent in May, while automotive fuel prices fell 11.9 per cent during the month following lower oil prices and the impact of reduced fuel excise measures.

While petrol prices don't solve Australia's affordability challenges, they are one of the most visible and immediate costs for consumers. Falling fuel costs feed through the economy quickly, helping ease pressure on household budgets and business operating expenses.

The ABS data also showed headline inflation is now sitting at its lowest annual level in several months, reinforcing the broader trend that price growth is gradually moderating.

That trend is important because it aligns with what many economists and lenders have been saying for the last month.

Prior to this week's inflation data, ANZ, NAB and Commonwealth Bank had all shifted their forecasts, now believing the Reserve Bank had likely reached the peak of the interest rate cycle. Following the May inflation release, ANZ reaffirmed that view.

In its latest economic update, ANZ said it expects quarterly trimmed mean inflation to come in at 3.7 per cent for the June quarter, slightly below the Reserve Bank's forecast of 3.8 per cent. Importantly, the bank said that outcome, when combined with slowing economic activity, "supports our view that the cash rate has peaked".

The Reserve Bank has spent the better part of three years attempting to bring inflation under control through higher interest rates. If Australia's major banks are correct and rates have now peaked, the conversation shifts from how much higher rates could go to when they might begin coming down.

Westpac's caution comes from underlying inflation. The trimmed mean, the measure most closely watched by the Reserve Bank, increased from 3.4 per cent to 3.6 per cent annually. Housing inflation remains elevated at 6.5 per cent, reflecting ongoing increases in rents, electricity costs and new dwelling construction.

Electricity prices remain particularly problematic, rising 21.1 per cent over the past year following the removal of government rebates.

Housing construction costs are also showing signs of renewed pressure. ANZ noted new dwelling costs rose 0.9 per cent in May and are now running at an annualised pace of 8.6 per cent over the past three months. Builders continue to face higher labour, fuel and material costs, a reminder that inflationary pressures have not completely disappeared.

Housing affordability has deteriorated largely because of higher interest rates rather than higher property prices alone. Even modest reductions in mortgage rates would improve borrowing capacity, increase buyer confidence and reduce repayment pressure on existing homeowners.

While August is far from a certainty, the latest inflation result has strengthened the view that the next move in rates is more likely to be down than up. For borrowers, buyers and the development sector, that alone represents a significant shift from the conversation that dominated much of the past two years.

Jonathan Chancellor

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