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EXPERT OBSERVATION
After a material 10.7% correction over the previous two years, Australian dwelling prices have posted a clear recovery since mid-2019, the pace accelerating month to month.
The CoreLogic home value index, covering the eight major capital cities rose 2% in Nov following a 1.4% gain in Oct, a 1.1% gain in Sep and a 1% gain in Aug.
Annual price growth ticked up to 0.4%yr, the first positive annual pace since March 2018. Prices are still 5.1% below their Sep 2017 peak but could surpass that level in early 2020 if the rebound continues at its current pace.
Several factors have contributed to the turnaround including: reduced uncertainty around housing-related tax policy following the Federal election in May; 75bps in rate cuts from the RBA; and some easing in regulatory guidelines for loan serviceability assessments. 
<a href="https://www.propertyobserver.com.au/images/2019/12/2/westpac%201.jpg" target="_blank">Click here</a> to enlarge:
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2019/12/2/westpac%201.jpg" alt="">
All major capital cities recorded gains in Nov, as did most smaller capitals and non-capital city areas within states. Only Darwin, and regional areas in WA and NT recorded declines in Nov. In annual growth terms, Sydney and Melbourne are both seeing positive gains, but prices in other major capital cities and are still down on a year ago. 
Sydney recorded a thumping 2.7% gain in Nov, the strongest monthly rise since Oct 1988. Prices are up 1.6%yr but still 9.4% below their peak in mid-2017. Houses and top and middle tier properties are now outpacing other segments.
Melbourne recorded a 2.2% rise following a 2.3% gain in Oct that was the strongest since 2009. Having come through a milder price correction, the gains mean Melbourne prices are now only 3.7% below their late 2017 peak. As with Sydney, houses and top tier properties are leading the gains. 
<a href="https://www.propertyobserver.com.au/images/2019/12/2/westpac%202.jpg" target="_blank">Click here </a>to enlarge: 
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Brisbane dwelling prices posted a solid 0.8% rise for the second month in a row – the best back to back gains the market has seen in a while but with prices still down slightly by 0.5% on a year ago. Houses and 'top tier' property are showing a more meaningful lift. 
Perth dwelling prices posted a 0.4% gain, the first positive month since Apr 2018. The gain was driven by a 0.9% rise in 'top tier' properties, other segments flat or down slightly. Prices overall are still down 7.7%yr. 
Across the other capital city markets: Adelaide dwelling prices rose 0.5% but still down 0.5%yr; Canberra rose 1.6%mth, 3%yr; Hobart rose 2.3%mth, 4.2%yr; and Darwin fell 1.2%mth to be down –10.9%yr.
<a href="https://www.propertyobserver.com.au/images/2019/12/2/westpac%203.jpg" target="_blank">Click here </a>to enlarge: 
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2019/12/2/westpac%203.jpg" alt="">
The recovery that began mid-year has now gained significant momentum and is starting to broaden.
It remains a 'thin' market sales-wise but buyer sentiment points to a further lift in demand in early 2020.
Price gains are expected to moderate as supply starts to lift and as affordability strains re-emerge.
See our latest <a href="https://westpaciq.westpac.com.au/Article/41257/180/" target="_blank">Westpac Housing Pulse</a> report for a more detailed run down on the situation and outlook.
Read the full report: <a href="https://westpaciq.westpac.com.au/wibiqauthoring/_uploads/file/Australia/2019/December/er20191202BullDwellPricesNov.pdf" target="_blank">'Australian dwelling prices November'</a>.
Matthew Hassan is a Senior Economist at Westpac.
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Australian dwelling prices rebound: Matthew Hassan

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EXPERT OBSERVER
The September retail report disappointed in every respect. Monthly sales showed another weak gain, up just 0.2%, and real retail sales contracted 0.1% in the quarter to be down –0.2%yr, the first annual contraction since the early 1990s recession. The consensus forecast was for a 0.4% gain in the month and a 0.3% rise for the quarter.
The monthly profile continues to show little or no response to policy measures – interest rate cuts in June-July and tax relief from July should have added about $3bn to monthly household disposable incomes. With retail sales running at $27bn a month, even a small flow on impact to spending would quickly turn the dial. Monthly sales have instead posted lacklustre gains, flat in July, up 0.4% in August and a 0.2% gain in September. Comparing reactions to fiscal and monetary policy easings historically, the current response is at the lowest end of the range.
Quarterly real retail sales have now declined in three of the last four quarters. Importantly, the slowdown in real terms is due to a combination of moderating nominal sales growth and stronger price gains. In fact, the price side has had the larger effect – over the last year, annual growth in nominal sales has slowed by 0.7ppts but retail price inflation has surged 1.6ppts from 1.1%yr to 2.7%yr. The pick-up reflects a mix of factors including the impact of the drought on food prices and easing disinflation in some AUD-affected segments. There are also some indications that retailers have been shoring up weak margins in recent quarters.
For the September quarter, the storetype breakdown showed a very result for cafes &amp; restaurants (–1%qtr, –0.4%yr); slippage for department stores (–0.1%qtr, +0.5%yr); flat sales for basic food (flat%qtr, –1%yr); but modest gains for clothing (+0.3%qtr, +0.9%yr) and 'other retail' (+0.3%qtr, +0.9%yr); and a surprisingly strong bounce for household goods (0.9%qtr, flat%yr) coming off back to back quarterly declines.
By state, all the eastern states recorded sales declines, WA bucking the trend with a surprisingly strong 0.9%qtr gain but coming off back to back falls. Annual spending growth shows a much clearer pattern with NSW and Vic driving the slowdown over the last year, sales in outright contraction in NSW (–1.7%yr) and contracting in per capita terms across both.
Looking by channel, online sales have posted a solid pick up since June, annual growth back above 15%yr (a double digit pace but subdued for this segment). The performance by firms size remains stark with large retailers recording steady nominal sales growth of around 4.5%yr but small retailers seeing sales falling at around 1.5-2%yr.
Overall the report suggests consumer spending remained very weak through the third quarter, pointing to clear downside risks to the wider consumption measures in the national accounts and near term forecasts for GDP growth. 
Read full article <a href="https://westpaciq.westpac.com.au/wibiqauthoring/_uploads/file/Australia/2019/November/er20191104BullRetailQ3.pdf">'Australian retail sales Q3' (PDF 257kb)</a>
MATTHEW HASSAN is a Senior Economist at Westpac
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Australian retail sales running on empty: Matthew Hassan

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EXPERT OBSERVER
Dwelling approvals recorded a sharp 9.7% drop in July coming against expectations that the stabilisation evident in previous months would consolidate. The fall takes approvals to a 6½ year low, down 28% on a year ago. Total approvals are now tracking materially below 'underlying demand' for the first time since 2013.
As is often the case with big monthly moves, the fall was concentrated in unit approvals which posted an 18.4% drop to be down 44.2%yr.
The detail points to similarly-sized monthly falls across both high rise and medium density units with a particularly weak read on high rise approvals in NSW.
The July fall takes high rise approvals to a new low. While this is still broadly consistent with the lead from site purchases, the risk is that continued stress in the sector is leading to more projects being delayed or cancelled and a possible further leg lower in approvals.
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Detached house approvals were also weak in the July month, recording a 3.3% fall – a sizeable move for what is normally a more stable component. The state detail shows very mixed results with unusually big falls in Vic (–10.9%mth) and WA (–14.5%) but strong gain in NSW (+10.1%). Some of the weakness in Vic may reflect the transition to a new building permit system and other changes to duties and concessions.
On a combined basis, approvals ex high rise were down about 6%mth nationally, considerably weaker than the stabilising signal from construction-related finance approvals in recent months. Weakness is centred on Vic (–7.2%mth), Qld (–7.6%mth) and WA (–4.4%mth). Approvals ex high rise were up slightly in NSW (+0.3%) and more firmly in SA (+3.9%).
The total value of renovation approvals rose 0.4% in the July month but is about flat in trend terms having declined slightly in the June quarter.
The total value of non res building approvals fell 9.9%, reversing most of a 10.5% jump in July. Looking through the monthly volatility, approvals are showing some signs of flattening out from what has been a reasonably solid rising trend. The detail shows trends continue to vary significantly across, retail, warehouses, hotels and health still showing solid gains on a 6mth basis but education down sharply offices off its most recent peak.
Overall the July update is clearly much weaker than expected and raises the risk that building activity may take another leg lower. As always, we caution about reading too much into one month's data, particularly with volatile high rise approvals, but there is enough here to warrant careful monitoring in coming months.
As noted in our preview, dwelling construction can often be slow to respond to interest rate cuts and with other factors impacting segments likely high rise and the longer lags on these projects actual building looks set to continue declining well into 2020. Stabilising prices may ease some of the housing headwinds to growth but drags from the construction cycle are likely to persist.
Read the full report <a href="https://westpaciq.westpac.com.au/wibiqauthoring/_uploads/file/Australia/2019/August/er20190830BullDwellApprovJul.pdf">'Australian dwelling approvals July' (PDF 327kb)</a>.
MATTHEW HASSAN is a Senior Economist at Westpac
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Australian dwelling approvals lurch lower: Matthew Hassan

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EXPERT OBSERVER
After tentative improvements earlier in the year, Australia’s housing markets are now showing a much clearer stabilisation.
Our <a href="https://www.propertyobserver.com.au/https://westpaciq.westpac.com.au/Article/39942" target="_blank">August Housing Pulse</a> highlights a strong lift in buyer sentiment that should see a material pick up in sales heading into year end with the Westpac Housing Consumer Sentiment Index giving the most positive signal in over five years. That said, a sustained lift in demand has yet to be confirmed and there are several important caveats including significant variations in conditions across different states. Here we provide a quick ‘flyover’ summary of how the main markets are faring.
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NSW: sparking back into life – Sydney’s price correction has now clearly ended with a marked improvement in auction markets, listings on a much firmer footing and sentiment pointing to a likely lift in demand heading into year end. Sydney dwelling prices rose 1.3% over the 3mths to Aug, the first gain since mid–2017 although prices are still 14% below their peak.
Victoria: conditions firm, confidence returns – the state’s price correction has also ended with a markedly improved tone to conditions and a significant lift in housing-related sentiment. Melbourne continues to show a more varied performance across segments and sub–regions with more pronounced corrections across higher-priced tiers. The turnaround over the last few months has been particularly striking for Melbourne’s Inner East.
Queensland: out of step and out of sorts – the improvement evident elsewhere has been much less convincing in the state. Prices in Brisbane look to have stabilised after a slip lower earlier in the year but buyer sentiment has shown only a marginal improvement and market conditions remain soft. Affordability is in relatively good shape but the market is still clearly lacking a spark.
South Australia: slipping despite positives – Adelaide has seen a modest price correction since the start of the year despite having been largely bypassed by the preceding boom and ‘fundamentals’ that are mostly benign or supportive. Turnover has also tended to drift lower, the mix suggesting weakness may relate to tightening lending conditions.
Western Australia: hope returns but stability elusive – the state continues to struggle with pervasive price weakness. Buyer sentiment has improved, signalling some hope going forward, but with prices down 8.7%yr, the Perth market has yet to find a base.
Tasmania: pressures rebuilding? – after calming down in 2019 following a vigorous two year boom there are signs that pressures in Tasmania’s housing markets may be starting to build quickly again. Prices have been essentially flat amid a sharp pull-back in turnover but conditions look likely to stabilise following a lift in sentiment. The state’s housing market remains very tight with a mix that suggests any lift in demand could be quick to stoke price pressures again.
<img src="https://westpaciq.westpac.com.au/wibiqauthoring/_uploads/image/Housing_Pulse/Housing_Pulse_Bites/2019-08/Housing-pulse-bites-2019-08-01.jpg" alt="">
See the <a href="https://westpaciq.westpac.com.au/wibiqauthoring/_uploads/file/Australia/2019/August/WestpacHousingPulseAugust2019.pdf" target="_blank">full report</a> for a complete rundown.
Matthew Hassan, Senior Economist, Westpac
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A state by state housing sentiment rundown: Matthew Hassan

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EXPERT OBSERVER
Housing-related sentiment has improved but part of the gain looks to be based on an expected further lowering in rates.
Our <a href="https://westpaciq.westpac.com.au/wibiqauthoring/_uploads/file/Australia/2019/August/WestpacHousingPulseAugust2019.pdf" target="_blank">latest Housing Pulse report</a> finds sentiment-based measures giving the most positive signal in over five years. However, a sustained lift in demand has yet to be confirmed and there remain important caveats. In particular much of the lift looks to be based on an expected further improvement in affordability that may not materialise if prices start rising again or if the RBA disappoints on expected rate cuts.
Interest rate expectations have seen a big shift over the last year. Back in Aug 2018 most consumers expected rates to be higher by now. That hawkishness evaporated in Feb following a clear signal from the RBA that rates were more likely to fall than rise. The Bank followed up with two 25bp cuts in June and July, indicating that it is prepared to cut further “if needed”. Accordingly, most consumers now expect rates to be the same or lower in a year’s time with markets and economists expecting rates to be about 50bps lower.
Our August update of an additional question on consumer expectations for mortgage rates. The simplest summary measure – the net % expecting rates to rise – declined to 9.8 from 38.7 in Feb, 50.4 in Aug last year and a peak of 68.2 in Aug 2017. The latest read is a touch below the 9.9 in Aug 2016 and the least hawkish/most dovish since late 2011.
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The history of this question, which has been run since 2010, shows a clear ‘upward bias’. Adjusting for this the latest reading looks to be consistent with about a 45bp decline in rates over the next year. That would place the consumer reading as slightly less dovish than current market pricing which has 60bps in RBA cuts priced in by this time next year but more in line with that of economists. For the record, Westpac expects the RBA to cut rates by 50bps over the next year, with two moves likely coming in Oct and Feb (see <a href="https://westpaciq.westpac.com.au/wibiqauthoring/_uploads/file/Australia/2019/July/er20190724BullRBACashRate.pdf">here</a> for more).
MATTHEW HASSAN is a Senior Economist for Westpac
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Housing sentiment at its most positive in over 5 years: Matthew Hassan

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EXPERT OBSERVER
The June housing finance approval figures were consistent with stabilising market conditions through the middle of 2019.
The number of owner occupier loan approvals rose 0.4%mth, in line with expectations but still down 13.6%yr.
The total value of investor loans also rose 0.5%mth with the combined total value of owner occupier and investor loans up a firm 1.9%mth but with coming off weak May reads (–1.9% and –2.7% respectively).
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2019/8/8/HOUSING%20FINANCE%201.jpg" alt="">
By state, the number of owner occupier approvals rose 0.7%mth in NSW and 0.3%mth in Qld but declined 0.6%mth in Vic – the three big eastern states having recorded the biggest falls over the last year (in the 13-18%yr range). Approvals posted firmer gains in WA (1.1%mth), SA (+2%mth) and Tas (+2.1%mth), these states having seen milder declines over the last year in the 4-7% range.
As the volume and value mix suggests, average loan size rose in the month, the detail showing gains across all states but concentrated in the 'upgrader' segment.
 <img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2019/8/8/Housing%20Finance%20%20Dwelling%20Approvals.jpg" alt="">
Construction-related finance approvals declined 2%mth, reversing all of the previous month's gain although the pace of decline still looks to have moderated since the start of the year suggesting non high rise dwelling approvals should start to level out in coming months.
Timelier data on auction activity, sales and prices have shown a clear improvement through Jun-Aug with a particularly strong lift in auction clearance rates since the start of July.
Reduced uncertainty around housing-related tax policy following the Federal election and the RBA's back to back rate cuts in June and July have been key supports.
Despite the shift, sales activity still looks to be running at low levels by historical standards (judging by turnover data to June and the number of auctions through July-August).
The next few months of approvals data and the performance of auction markets as we head into the Spring selling season will an important gauge of the extent to which the shift is seeing a sustained pick up.
MATTHEW HASSAN is a Senior Economist for Westpac
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More signs of stabilisation in Australian housing finance: Westpac

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EXPERT OBSERVER
Dwelling approvals declined 1.2% in June following a slight 0.3% rise in May (pared back from a 0.7% gain).
The result was in line with Westpac's view but slightly below consensus expectations of a 0.2% gain.
The detail was also in line with our view with a sharp retracement in high rise approvals, down an estimated 19% in the month following an 11% gain over Apr-May.
Non high rise approvals posted a small gain in the month, detached house approvals up 0.4% and 'low-mid' rise unit approvals up an estimated 0.9%.
We had been looking for high rise to drop back and non high rise to show signs of stabilising.
The state detail showed sharp declines in NSW and WA but a surprise rise in Vic (+9.7%mth). This is almost certainly due to a lumpy high rise project and suggests there may be a further let down in this segment to come.
Overall the update was as expected, dwelling approvals still soft but around what is likely to be a stabilising trend that emerges more clearly over the second half of 2019.
Further weakness in new dwelling construction remains locked in for 2019 and the first half of 2020, with any stabilisation in approvals likely to be slow to play through to activity due to the long lags on high rise projects.
MATTHEW HASSAN is a Senior Economist for Westpac.
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June dwelling approvals down 1.2 percent: Matthew Hassan

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EXPERT OBSERVATION
The May retail update showed sales edging up 0.1% in the month but essentially flat over the April-May period.
This was a touch below the consensus forecast of a 0.2% gain but in line with Westpac's view.
Annual growth slowed to 2.4% over the year, the slowest pace since the start of 2018 and well below the long run average of 4% over the year.
As noted last month, the timing of public holidays may have affected sales over April-May period.
Aside from that our main area of interest is around the sub-category and state detail and the extent to which these show wealth effect drags from the Sydney and Melbourne housing corrections.
The evidence this month is mixed: household goods and NSW remain notable weak spots for sales but the deterioration in these segments remains moderate and sales remain firm across other discretionary categories and in Vic, with a notable firming in the resource states.
<a href="https://www.propertyobserver.com.au/images/2019/7/4/retail%201.jpg" target="_blank">Click here </a>to enlarge: 
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2019/7/4/retail%201.jpg" alt="">
By category, the main source of weakness in May was basic food retail (–0.3% in the month). This category accounts for 40% of total retail.
Food price moves have been a significant driver of fluctuations – the latest dip may be a sign that these are easing. Sales ex basic food rose 0.4%mth.
Across the other categories, household goods recorded a 0.4% fall in the month following a 0.9% decline in April with weakness pronounced in the housing-related 'furniture &amp; floor coverings' sub-category (worth about 25% of the wider category).
That suggests wealth effects are dragging on 'big ticket' discretionary spending (a view supported by recent weakness in vehicle sales).
<a href="https://www.propertyobserver.com.au/images/2019/7/4/retail%202.png" target="_blank">Click here </a>to enlarge:
<img src="https://www.urban.com.au/images/2019/7/4/retail%202.png" alt="">
 
However, the picture is more mixed across 'small ticket' discretionary categories, sales slipping for clothing (–0.2%mth) and department stores (–0.4%mth) but rising for cafes &amp; restaurants (+0.7%mth) and 'other retail' (+0.6%mth).
The state patterns were also mixed. Sales continue to slow abruptly in NSW, down 0.1% in the month but with annual growth down to a very weak 0.5% over the year.
Vic is holding up much better with a 0.6% gain in the month and annual growth above 4% over the year. The two 'mining states' recorded dips in May but continue to see annual growth lift, running at a surprisingly strong 4.7%yr pace in the case of Qld.
<a href="https://www.propertyobserver.com.au/images/2019/7/4/retail%203.jpg" target="_blank">Click here </a>to enlarge:
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2019/7/4/retail%203.jpg" alt="">
Looking by channel, online sales continue to moderate from the big surge in 2018, annual growth slipping below that via 'traditional' channels for the first time since the ABS started collecting monthly online sales data in 2013.
The breakdown by retailer size shows small retailers bearing the brunt of the 2019 slowdown. That said, while sales growth has held up better for larger retailers (running at 4% over the year) it is low by historical standards.
Overall the May update is bleak but not bleaker than expected. Retail sales are treading water in nominal terms rather than contracting.
<a href="https://www.propertyobserver.com.au/images/2019/7/4/retail%204.jpg" target="_blank">Click here</a> to enlarge: 
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2019/7/4/retail%204.jpg" alt="">
 
As such the wash up for the June quarter volumes that feed into national accounts estimates of consumer spending will depend heavily on what has been happening on the price side. We suspect retail price inflation has slowed significantly from the food price driven gains over the last two quarters.
The June quarter CPI update due at the end of the month will be an important pointer on this question and the extent to which growth in consumer demand is slowing.
MATTHEW HASSAN is a Senior Economist for Westpac.
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Australian retail sales tread water: Westpac's Matthew Hassan

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EXPERT OBSERVER
The correction in Australian dwelling prices that has been running since late 2017 may have ended. 
The CoreLogic home value index, covering the eight major capital cities, dipped 0.1% in June to be down 8.0% over the year – still weak but marking the first month to month improvement in the annual growth rate since its peak at +11.3%yr in mid 2017.
<a href="https://www.propertyobserver.com.au/images/2019/7/1/westpac%201%20.jpg" target="_blank">Click here</a> to enlarge: 
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2019/7/1/westpac%201%20.jpg" alt="">
Sydney and Melbourne both recorded their first monthly price gains since the correction began in 2017. However, prices continued to slip elsewhere with most other capital cities showing a deterioration over the last three months.
Melbourne dwelling prices rose 0.2% in June, paring the annual pace of decline back to 9.2% over the year. Units are leading the turnaround, prices in this segment up 0.7% over the last two months. Prices in the top 25% of properties by value also outperformed slightly, albeit coming off more material declines through the correction.
Sydney dwellings recorded a 0.1% price gain in June, the annual pace of decline slowing to 9.9% over the year. The gain here centred on the middle and top tiers of the market which have moved through a more material correction over the last two years. Units slightly outperformed.
<a href="https://www.propertyobserver.com.au/images/2019/7/1/westpac%202.jpg" target="_blank">Click here </a>to enlarge: 
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2019/7/1/westpac%202.jpg" alt="">
Other major markets were considerably weaker in the month, Brisbane, Perth and Adelaide all recording monthly price declines and accelerating annual rates of contraction. 
Perth's long-running correction is showing few signs of reprieve, prices down 0.6% in the month,  and 9.1% over the year. 
Brisbane, which was stable through 2018, has continued to see modest but worsening price slippage in 2019, prices down 0.6% in the month, and 2.6% over the year. 
 Adelaide has also slipped into a slight correction, prices down 0.5% in the month, and 0.3% over the year.
Conditions were mostly soft cross the smaller markets as well: Canberra down 0.9% in the month, lowering annual growth to just 1.4% over the year; Darwin down 0.9% in the month, the long-running correction re-accelerating to 9.6% over the year (a similar theme to Perth); but Hobart recording a 0.2% gain in the month holding annual growth in positive at 2.9% over the year. 
Overall, the weakness still evident in other markets takes some of the gloss off the clear improvement showing through in Sydney-Melbourne.
<a href="https://www.propertyobserver.com.au/images/2019/7/1/westpac%203.jpg" target="_blank">Click here </a>to enlarge: 
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2019/7/1/westpac%203.jpg" alt="">
 
It also cautions against putting too much emphasis on the improving tone from weekly auction results which are not representative of conditions outside of these two markets.
The contrasting performance of the major cities may be an indication that swings in investor demand around the Federal election have been key – this segment tends to be more active in Sydney and Melbourne – and that other factors such as those around affordability, credit availability and borrowing capacity may still be weighing on owner occupier demand.
The finance approval data should shed some light on this in coming weeks.
The mix should become more balanced over the the second half of 2020 lower interest rates and a likely relaxation in regulatory guidelines for loan assessments comes through.
For the record, Westpac expects dwelling prices to remain patchy in 2019, with a stabilisation showing through more clearly in 2020.
Any rebound in prices before then is likely to quickly run into affordability constraints.
<a href="https://www.propertyobserver.com.au/images/2019/7/1/dwelling%20price%201.jpg" target="_blank">Click here</a> to enlarge: 
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MATTHEW HASSAN is a Senior Economist for Westpac
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Is the dwelling price correction over? Matthew Hassan

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The minutes of the June RBA Board meeting show the decision to cut the cash rate by 25bp at that meeting was driven by a revised assessment of spare capacity in the labour market and that the Board expects to ease policy further.
We continue to expect a further 25bp rate cut in August and a final 25bp cut in November.
Note that much of the information from the minutes is not new. Key aspects have already been covered in a speech by the RBA Governor on the day of the decision and in other commentary from the Bank since then.
Assessments have also likely evolved since June 4, particularly following the March quarter national accounts released a day later.
As such, our main interest in reading the meeting minutes is around the commentary from members and the tone of the discussion – particularly the degree of urgency around policy easing.
The minutes are clear on the prospect of further cuts, noting in the concluding paragraph that “… it was more likely than not that a further easing in monetary policy would be appropriate in the period ahead”.
In the lexicon of RBA statements, “period ahead” signals that policy is ‘live’ in coming meetings but stops short of indicating an imminent move at the next meeting.
The case for easing in June rested firmly on a reassessment of the labour market.
Updates on wage costs, showing growth of 0.5%qtr, 2.3%yr to March, were seen as “further evidence of spare capacity”.
The latest data around jobs and unemployment is assessed as “mixed” – with an increase in unemployment and underemployment and a moderation in employment growth noted, albeit with the latter still running above growth in the labour force and participation rates reaching a record high.
The contrast with the “strong” description in the May minutes is striking.
However, the real change was around the assessment of the extent of spare capacity – i.e. the degree to which unemployment was above the ‘full employment’ levels associated with stable inflation.
As outlined by the Governor, the Bank now sees this as around 4.5% compared to the 4.75-5% cited previously – the shift reflecting the unfolding mix of wage and unemployment outcomes.
The current 5.2% unemployment rate is a sizeable 0.7ppts above this target level. While noting estimates are uncertain, Board members concurred with the change in assessment.
Other factors behind the decision to cut seem less urgent. The outlook for both the global economy and the Australian economy was assessed as “reasonable” albeit with the latter conditioned on market pricing for the cash rate that implied interest rates would be lower in the period ahead.
Around inflation, the persistence of low underlying inflation – below the 2-3% target range for three years and expected to remain low near term – looks to have been a secondary consideration behind the cut, giving scope for the move rather than driving the decision.
That said, there did seem to be some concern that this might start to undermine medium term inflation expectations.
The risks a rate cut would present around high household debt and housing markets were assessed as low.
Members judged it “was unlikely to encourage a material pick-up in borrowing by households that would add to medium term risks”.
Interestingly, members also noted that lower rates would “stimulate activity and thereby improve the resilience of the Australian economy to any future adverse shocks” – perhaps an indication that the Board is a little keener to get the economy moving.
Conclusion
Overall, the minutes confirm more easing is on the way. Board members appear very much aligned to the Governor’s views, particularly around the labour market.
That said, the ‘tone’ is not urgent in the sense that growth outlook still does not seem to be viewed as that challenging and low inflation is not a driving force behind the easing.
We continue to see the next 25bp rate cut coming in August and a final 25bp cut in November.
There are complications. After shifting its view on full employment and having identified more significant spare capacity in the labour market, the Board may see little point in delaying follow-on easing moves – the case having already been made.
However, we expect the next move to instead be framed by a downgrade to the Bank’s forecasts meaning it will be more inclined to move in August when the full set of revised forecasts are released in its Statement on Monetary Policy.
We expect this to include a downward revision to the Bank’s near term growth forecast from ‘around 2.75%’ to something more materially below trend. The disappointing March quarter national accounts release has already lowered the starting point.
Updates on the consumer are likely to show soft conditions extending into the June quarter. Meanwhile weak labour market updates are likely to take the unemployment further away from the Bank’s 4.5% target.
Given the need to adjust, it is much simpler communication-wise, to cut rates at the time the forecast is changed than to cut in July and announce the lower forecast a month later.
MATTHEW HASSAN is a Senior Economist for Westpac
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RBA June minutes allay fear that low rate borrowing has medium term risks: Westpac's Matthew Hassan

Perth’s new apartment market recorded its strongest quarter of sales since Q4 2021, with 412 apartments sold in Q1 2026 and a record quarterly sold value of $537 million, according to Urbis’ latest Apartment Essentials results.

Urbis said the March quarter result reflects strong, highly product‑specific demand across both ends of the market, from more attainable projects delivering at scale, through to premium stock being absorbed by equity‑rich downsizers.&nbsp;

David Cresp, Partner at Urbis, said the key story in Perth is not demand, it is the market’s ability to convert demand into delivered housing.&nbsp;

“This is the strongest sales quarter since Q4 2021, and it reinforces that demand in Perth is real and it’s local,” David Cresp said. “But the task now is delivery, turning that demand into projects that can actually be built and completed.”&nbsp;

[smartcode_project:default project_id=110291 project_image_fid=302785]

<h2>Affordable product leads, premium demand remains resilient</h2>

Sales in Q1 were led by more affordable projects, with The Boulevard (SKS Group) recording 115 sales in the quarter, the presentation noting this is only the second time a single project has surpassed 100 quarterly sales. The project was able to offer more affordable housing product right next to a train station.&nbsp;

Palmyra West (Finbar) also delivered strong results with 28 sales in Q1, following 84 sales in Q4, with an average price of under $800,000, underscoring depth of demand for well‑located, attainable new stock.&nbsp;

At the premium end, Urbis said downsizer demand is continuing, with the results highlighting Romeo (Applecross, Finbar) recording 75 sales and reaching almost 50% sold in one quarter.

Jual (Shenton Park, Celsius Property) also posted a strong quarter with 28 sales, reaching 39% sold in one quarter.

Urbis noted that Perth apartment demand is not speculative, not investor‑led, and not uniform, describing it as localised, often equity‑driven and highly product‑specific, a pattern reflected in the polarisation between strong “attainable” performers and premium downsizer product.&nbsp;

[smartcode_project:default project_id=148957 project_image_fid=364102]

<h2>Prices underpinned by costs, and the delivery risk is growing</h2>

Urbis said pricing pressure is cost not demand‑driven: construction costs and delivery risk are now a central constraint, with the results noting build costs remain elevated and volatile, and that energy, fuel and labour uncertainty weigh on feasibility.

David Cresp said a growing challenge for private Build‑to‑Sell developers is simply securing a builder in the current environment.

“Developers are really feeling the pressure from a building market that was operating at capacity and securing a builder is challenging,” David Cresp said, adding that even where a builder can be secured, “trying to get to the price that makes the development financially viable is incredibly challenging in the current market.”&nbsp;

Urbis’ broader WA commentary also notes that industry remains at or above capacity with lot and housing creation, and that many builders are limiting new sales to manage stretched workforces and fixed‑price contract pressures, conditions that flow directly into apartment feasibility and delivery timing.

[smartcode_project:default project_id=108869 project_image_fid=317905]

<h2>Supply: improving later, but still constrained, and Perth lags eastern benchmarks</h2>

While near‑term supply remains constrained, Urbis’ forecast shows completions lifting “Supply is forecast to be back above 1,500 apartments per annum for the first time since 2019”, with 1,775 completions forecast for 2026, and volumes remaining above that level over the following years.&nbsp;

Looking further ahead, completions are forecast to reach 2,500 in 2028, with the report noting 32% of that total is social/affordable, reflecting the role of government‑supported delivery in rebuilding the pipeline.&nbsp;

However, Urbis said Perth remains behind comparable markets on pipeline scale. In a national comparison of projects under construction, the report shows under construction Perth Build‑to‑Sell (BTS) at 3,446 apartments versus the Gold Coast at 7,922. Mr Cresp said “The challenge for Perth is how to we grow the delivery pipeline”.

Urbis’ conclusion is that Perth’s market is increasingly defined by product discipline and delivery certainty, with the research identifying “delivery certainty is key” and calling out builder risk and procurement models as core success factors, alongside “timing and staging”.&nbsp;

Joel Robinson

Perth apartment sales hit strongest pace since late 2021 as builder capacity tightens

<a href="https://www.apartments.com.au/developers/sammut-developments">Sammut Group</a> has secured development approval for its latest Brisbane apartment project, marking the Sydney developer’s next step in expanding its Queensland pipeline following the success of its debut Gold Coast development, Coast.

The approved project at <a href="https://www.apartments.com.au/new-apartments/44-glen-road-toowong-qld-4066">44 Glen Road, </a><a href="https://www.apartments.com.au/developments/toowong-qld-4066">Toowong</a> will deliver a 15-storey riverfront apartment building with 42 residences, significantly increasing the scale of the site’s previous approval for a smaller luxury scheme. Designed by Bureau^proberts, the development will comprise a mix of predominantly four-bedroom and two-bedroom apartments positioned to maximise Brisbane River and city views.

Sammut Director Julian Sammut said the group had been actively searching Brisbane for several years before identifying Toowong as the right fit.

“Brisbane was the right step for Sammut,” Sammut said.

“With the success of Coast we thought we should definitely look to do more in Queensland alone. We then pushed up to look at Brisbane. We've been looking for I'd say two to three years actually and it was hard to find the right location.”

<img alt="Sammut makes Brisbane apartment play" data-entity-type="" data-entity-uuid="" src="https://res.cloudinary.com/dz9xllyip/image/fetch/f_auto,c_limit,w_1440,q_75/https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/field/image/Screenshot%202025-12-23%20at%203.27.14%E2%80%AFPM.png?VersionId=dYAVIL7qdcGA8ojvkslSrLjczXFejSSx" />

Sammut said suburbs including New Farm and Teneriffe were considered before the group ultimately focused on Toowong due to its strong downsizer demographic and limited supply of developable riverfront land.

The site was acquired off-market after what Sammut described as a lengthy negotiation and planning process, with the developer pursuing an uplift to the original approval.

“We are DA approved now which is very exciting,” Sammut said.

“We've had our change approval come through and we've obviously doubled the height, 15 storeys plus rooftop. We've got 42 amazing apartments that are going to be coming to market soon.”

<img alt="Sammut makes Brisbane apartment play" data-entity-type="" data-entity-uuid="" src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,dpr_2.0,q_auto:good/https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202025-12-23%20at%203.27.26%E2%80%AFPM.png?VersionId=ohkRkY0dIZlqdfME2EZePsCQavRiBadE" />

Bureau^proberts said the design responds to Toowong’s evolving urban character, balancing contemporary apartment living with the area’s established residential identity.

“A place where traditional Queensland living has taken place for centuries; Toowong is seeing a shift of contemporary influence, commercial and retail hubs mixed with well-considered residential offerings – all the while maintaining its character and charm,” the architect noted in planning documents submitted to Brisbane City Council.

The architecture practice said the project’s form was shaped by its riverfront setting, flood considerations, neighbouring building scales, and view corridors.

“They said the mix of four and two-bedroom apartments capture the ‘fundamental qualities of Queenslander living,’ translated into the context of a contemporary subtropical building.”

The development sits just off Coronation Drive within walking distance of Toowong’s retail precinct and the upgraded Regatta ferry terminal, while also benefiting from proximity to the incoming green bridge connection to West End. Sammut said the accessibility and amenity offering were central to the site’s appeal.

The approval adds to growing residential activity along the Toowong riverfront, joining nearby projects including Consolidated Properties’ Monarch Residences and Spyre Group’s ARC Residences.

Sammut secures approval for debut Brisbane apartment development in Toowong

Developer Lanevick is heading back into Sydney’s apartment market after focusing more heavily on the luxury townhouse and terrace sector in recent years.

Lanevick, founded and directed by Steve Maroun, is expecting to receive approval in the coming months for a new apartment development in Gladesville, with the aim to launch it to the market later this year.

The 51-apartment project, designed by Studio Johnston, will comprise a mix of one-, two-, and three-bedroom apartments positioned toward the Hunters Hill downsizer market.

“Traditionally it’s been difficult for people in that market to downsize because there just hasn’t been the right product available,” Maroun said.

“We’re targeting buyers who might have 30 to 40 per cent of their house value sitting in the bank after downsizing.

“They still want good spacious entertaining areas, they still want quality design, but they also want flexibility and the ability to enjoy life a bit more after working hard for a long time.”

The project sits near Boronia Park and within close proximity to the Parramatta River foreshore, an area Maroun says offers more of a Hunters Hill lifestyle than a traditional apartment precinct.

“From a lifestyle perspective, it’s really more Hunters Hill than Gladesville,” Maroun said. “You’re close to the foreshore, close to parklands, and still connected back into the village precinct.”

From level four and above, apartments will capture water views&nbsp;toward Sydney Harbour. Communal amenity will include rooftop entertaining areas, wellness spaces, and a gym tailored toward owner-occupier buyers.

“We’ve really designed these apartments around that buyer coming from the Hunters Hill LGA and what they’re actually looking for in their next chapter.”

The proposed development has also been designed to respond to the changing character of the broader Gladesville town centre, where a growing number of mixed-use and residential proposals are expected to emerge over the coming years.

“Gladesville presented a rare opportunity to deliver a genuinely design-led residential project within an evolving lifestyle precinct, just moments from the growing Gladesville town centre, and we’ve approached the project with a strong focus on architecture, liveability and long-term community value,” Maroun said.

Maroun said Lanevick saw a first-mover advantage within the precinct as planning controls continue to evolve to accommodate greater housing density.

“We think there’s a real opportunity there that hasn’t really been serviced properly yet,” he said.

“There’s going to be a broader evolution of the whole Gladesville village precinct over time, particularly with more activation and mixed-use outcomes.”

The Venus Street proposal will include a commercial and retail component at ground level designed to contribute to that evolving streetscape activation.

“A big part of the thinking was how do you activate that area properly and create more vibrancy and amenity, which is what Hunters Hill has been looking for,” Maroun said.

Lanevick’s focus since 2020 has largely been on smaller-scale luxury townhouse and terrace developments. The developer recently completed Royale Randwick, also designed by Studio Johnston, where prices reached $3.65 million. The project was featured in the UDIA NSW 2026 Professional Development Prospectus and was also named a finalist for Development of the Year.

&nbsp;

Lanevick to cater for Hunters Hill downsizers with new Gladesville apartment development

Property developer One Living, backed by former Macquarie banker turned investment manager Chris Green’s investment firm, has unveiled plans to bring more institutional capital into housing to help address the national supply crisis.

The New York-based investor has focused his firm, GreenPoint Partners, on addressing the supply shortage hitting middle market housing in Australia.

It is backing the new One Living business to develop more than 1000 units along the eastern seaboard. The new firm is starting with a development on Mona Vale Road, on the border of Mona Vale and Pymble, in Sydney’s Northern Beaches, with around 140 apartments planned. They are eyeing off more sites across the city.

With cost pressures rising in the industry, One Living’s model is to be a vertically integrated developer-builder, so it can respond directly to the housing gap by removing the cost inefficiencies embedded in traditional residential delivery.

“We are building a platform designed to operate at scale and starting in a market where there’s a clear need for quality, attainable housing,” One Living joint managing director Joseph Scuderi said.

“It’s that missing middle – it’s that attainable end of housing… that’s what most Australians invest into and what Australians can actually afford.”

<img alt="Mona Vale" data-entity-type="file" data-entity-uuid="798dfa93-4941-4db6-a696-31e9dc18e81c" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%202.31.50%E2%80%AFPM.png?VersionId=mKBqi5C_DmeiXS.AtJkcR8LQIxqCqmFi" />

GreenPoint Partners brings years of experience assembling and scaling real estate operating businesses across major markets. And Green sees a big opportunity in Australia.

“For its size, sophistication and importance to the community, Australia’s living sector has remained largely under-institutionalised, which represents significant opportunity,” Green said. “GreenPoint identified that gap, assembled the right team, and is backing One Living to build a platform that is aligned to market needs.”

Green said being a builder-developer would give the company the capacity and flexibility it required to deliver reasonably-priced homes.

“We want it to be at that attainable level; not super high end luxury but at that attainable level,” he said.

<img alt="Mona Vale" data-entity-type="file" data-entity-uuid="74a5344a-4b26-4d4a-ada3-056b1220be77" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%202.32.15%E2%80%AFPM.png?VersionId=vY8hXHO4reBMdO8ZXMWCNtGZJofUPQ3j" />

&nbsp;

One Living will undertake a component of affordable housing in its schemes, which it will own and operate, and it could also run build-to-rent on some sites.

Green praised local policy settings.

“The NSW government is being very supportive, strategic and pragmatic in terms of how do we generate more supply of housing,” he said. “We think it’s actually positive for development and the bit that’s been lacking at that attainable level is that it’s lots of relatively small private developers, whereas we want to create an institutional platform.”

One Living is also&nbsp;looking at high-density projects and could take on more institutional funding in the future.

“The way we will be able to achieve economies of scale is through size,” Green added.

One Living enters Sydney's new apartment market with Northern Beaches site acquisition

It's been several years since there's been an opportunity to buy a brand new townhome in Melbourne's coastal suburb of Mordialloc. Even apartment developments in recent times have been few and far between in the area.

Local developer LDS Property identified the gap in new housing, securing a site on White Street, directly opposite&nbsp;Woodlands Golf Club Mordialloc. They've recently launched&nbsp;<a href="https://www.apartments.com.au/new-townhouses/wm-residences-mordialloc-102-white-street-mordialloc-vic-3195">WM Residences</a>, just 13 townhouses which they have already started building.

Projects by Buxton Director Heath Thompson, who is selling WM Residences, says the townhouses x that perfect middle ground be

"Mordialloc residents have had limited options to downsize within the suburb, often forcing them to look elsewhere despite long-standing ties to the area," Thompson says.

"With very little comparable new supply coming to market, projects like WM Residences are well placed, particularly as buyers look to capitalise on current conditions amid constrained supply."

[smartcode_project:default project_id=134646 project_image_fid=6109]

The development, designed by regarded architecture firm&nbsp;<a href="https://www.apartments.com.au/architects/ewert-leaf">Ewert Leaf</a>,&nbsp;adopts a deliberately restrained architectural approach, focusing on simplicity, durability and liveability rather than overt design gestures.

The boutique scale is central to the offering. With only 13 three-bedroom residences, each home is configured to prioritise functional layouts and everyday use, supported by private terraces and secure two-car garages.

Ewert Leaf’s design response leans into a calm, neutral material palette. Interiors are defined by oak flooring, white walls and soft finishes, creating a consistent and understated backdrop. The approach avoids trend-driven detailing in favour of longevity, with an emphasis on natural light and spatial clarity.

[smartcode_project:default project_id=134646 project_image_fid=6110]

Beyond aesthetics, the homes are designed to meet contemporary performance expectations. Each residence targets a minimum 6-star energy rating, incorporating double glazing, comprehensive insulation and all-electric Bosch appliances.

The project’s location supports a walkable coastal lifestyle, sitting within close proximity to Mordialloc’s foreshore, Main Street retail strip and the train station. Local cafés and dining venues, including Suburbia Deli and Hendriks Café, are within a short walk, reinforcing the area’s established neighbourhood character.

[smartcode_project:default project_id=134646 project_image_fid=6116]

While <a href="https://www.apartments.com.au/developments/mordialloc-vic-3195">Mordialloc</a> is often defined by its beach and pier, the project taps into other areas of day to day living, offering easy access to local food, casual dining and transport, rather than positioning itself purely as a lifestyle retreat.

WM Residences reflects a continued trend across Melbourne’s coastal suburbs towards smaller-scale, design-led townhouse developments, particularly on infill sites where proximity to amenity is already established.

With construction commenced prior to its market entry, the project aligns with a growing preference among buyers for developments with visible progress and defined delivery timeframes.

[smartcode_project_cta:default project_id=134646]

Matthew Hassan

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