<html><body>
<p>EXPERT OBSERVATION</p>
<p>Retail sales rose 0.1% in January, a disappointing result compared to consensus expectations of a 0.3% gain. Retail was coming off a 0.4% fall in the final month of 2018, so the muted January rise speaks to continued weakness carrying into early 2019.</p>
<p>Annual sales growth has slowed to 2.7%yr with the trend pace over the last six months closer to 2%yr.</p>
<p>The detail showed gains were confined to food sub-categories – both basic food and cafes &amp; restaurants up 0.3%mth – with non food categories down 0.1%mth on a combined basis. Within the latter: department stores booked another sizeable decline (–2.1%mth following –1.3% in Dec and a muted 0.4% gain in Nov); clothing was down 0.3% coming off a 3% fall in Dec but a strong 4.4% gain over Oct-Nov; and household goods retail was flat, coming off 0.8% gains in Nov and Dec. The 'other retail' category - mainly 'small ticket' discretionary items – posted a 0.7% gain.</p>
<p>The picture by state did have one slight positive with a solid 0.7% rise in NSW. The state had shown a much weaker finish to 2018, raising concerns that wealth effect drags were starting to bite harder. The Jan gain pares that weakness back a bit although trend sales are still weaker, flat lining vs slight 0.2% a month gains in most other states.</p>
<p>Looking by channel, online sales look to have posted a 2-3% gain for the month, with retail ex online down slightly (–0.1%mth).</p>
<p>By retailer size, small retailers reported a 0.6% fall with non food retailers driving the monthly gain amongst larger retailers. Despite this, large food retailers have still seen the best growth over the last year, sales up 4.9%yr on a combined basis, some of which relates to firmer pricing.</p>
<p>Separate data on vehicle sales have been mixed in early 2019. Our estimates suggest monthly seasonally adjusted sales rose in Jan but slipped back a touch in Feb. Seasonal adjustment is more problematic around this time of year so these moves should be treated with caution. Sales are still down about 10%yr. The Q4 national accounts detail showed a 1.5%qtr decline in consumer vehicle purchases, tracking a 6% annual pace of declines over the last three quarters of 2018.</p>
<p>Overall the slight gain in January retail sales indicates that the soft spending conditions over the second half of 2018 have extended into 2019. While sales may not be contracting in nominal terms they are likely to be down in volume terms once price changes are excluded.</p>
<p><em>MATTHEW HASSAN is a Senior Economist for Westpac</em></p>
</body></html>

Matthew_Hassan-HHWHptmrw4

Australian retail sales tick up, just: Westpac's Matthew Hassan

<html><body>
<p><span><span>EXPERT OBSERVATION</span></span></p>
<p><span><span>While Sydney and Melbourne remain at the centre of the current housing correction there are some significant differences between the two, in terms of the timing, scale and spread of price declines.</span></span></p>
<p><span><span>Melbourne’s price correction started later in the piece but has gathered pace since mid-2018. Prices are now down 8.7% from their peak but have been tracking closer to a 10%+ annual pace of decline over the last 6mths.</span></span></p>
<p><span><span>Notably, the price correction has shown much bigger differences across segments and tiers. For Sydney, there is about a 4ppt wedge between price declines across houses and units, and across different market tiers. For Melbourne, it’s a much larger 8-12pt wedge with units and bottom tier areas holding up much better (indeed, prices across the bottom 25% properties are essentially flat).</span></span></p>
<p><span><span>This theme is also apparent across sub-regions. The big movers over the second half of 2018 were Melbourne’s Inner East and Inner South, with the Inner City and West holding up considerably better. Prices are also performing better across the regional Victoria.</span></span></p>
<p><span><span>Some of this difference may relate to differences in the supply-demand balance across part of Melbourne. Overall, the city’s rental market remains tight with vacancy rates holding around 2%. However, parts of the city are seeing a significant surge in apartment completions, from around 10k a year mid-decade to 17-18k a year currently. </span></span></p>
<p><span><span>Meanwhile, rental vacancy rates are extremely tight across Victoria’s regions, having fallen from 2% in late 2017 to just 1.2% in early 2019. This in turn suggests the uneven performance is likely to continue.</span></span></p>
<p><img src="https://westpaciq.westpac.com.au/wibiqauthoring/_uploads/image/Housing_Pulse/Housing_Pulse_Bites/2019-02/Housing-pulse-bite-2019-02-6.jpg" alt="">  </p>
<p><em>MATTHEW HASSAN is a Senior Economist for Westpac</em></p>
</body></html>

Melbourne's uneven price correction: Matthew Hassan

<html><body><div>
<div>
<div>
<div>
<div>
<p>EXPERT OBSERVATION</p>
<p>Housing finance approvals posted a very weak finish to 2018 with sizeable declines across all components.</p>
<p>The headline number of owner occupier loans fell 6.1%, much weaker than the consensus forecast of a 2% decline. Ex-refi, the number of approvals were down a hefty 8.2% in the final month of 2018, to be off 14.4% for the year. Notably, what was initially an investor-led cycle is now seeing clear weakness in owner occupier activity – both the value and number of loans.</p>
<p>The value of investor loans also declined, a 4.8% fall taking this segment down 21.8% for the year. Note that survey changes mean this measure now excludes investor loans for ‘construction of dwellings for rent or resale’ and for ‘purchase of dwellings by others for rent or resale’ – components that previously accounted for around 15% of the value of investor approvals. Helpfully, the ABS also now provides an ‘ex refi’ measure for the value of investor loans, which dropped 4.6% in the month but is down more substantially by 27.8% over the year.</p>
<p>The combined total value of housing finance approvals including investors but excluding refi declined 5.9%mth to be down 19.8%yr.</p>
<p>Construction finance approvals fared a little better, recording a 2.4% decline but still down over 10% for the full year. Approvals for the purchase of newly built dwellings, including 'off the plan apartment sales' were down more sharply, –5.5%mth, –20.2%yr.</p>
<p>All major states recorded declines in the December month, the number of owner occupier approvals excl refi down 6.1% in NSW, 10.4% in Vic, 6% in Qld, 7% in WA and 3.4% in SA. The value of dwelling approvals including investor loans and excluding refi (estimates of which are now provided on a more timely basis) confirm the wide spread as well with large declines in NSW, Vic, Qld and WA, all down around 20%yr.</p>
<p>There were some notable details in the mix. First home buyer activity, a segment that has been supported by state government incentives, are also starting to show signs of slowing. However, the detail around average loan sizes suggests the biggest decline is coming in the 'upgrader' segment, suggesting changes to borrower assessments and perhaps the impact of lower prices on existing home equity may be impacting.</p>
<p>All up, the December finance approvals data shows a very weak finish to 2018 with weakness coming across the board, confirming the message from other market measures.</p>
<p><em>MATTHEW HASSAN is a senior economist at Westpac</em></p>
</div>
</div>
</div>
</div>
</div></body></html>

Australian housing finance had a broad-based fall late 2018: Matthew Hassan

<html><body>
<p class="article-details">EXPERT OBSERVER</p>
<p class="article-details">Despite the material correction in housing markets, residential property investors remain markedly more optimistic than non-investors.</p>
<div>
<p>Investors sit front and centre in the housing market correction currently unfolding in Australia. For the first time, the<em><strong> </strong>Westpac Melbourne Institute Consumer Sentiment survey</em> provides some insight into who this segment is and how they are assessing things.</p>
<p>An additional classification question added to the survey in Dec now allows us to separately identify consumers that own residential investment properties. The first results show an interesting breakdown on both the characteristics of this sub-group and their sentiment – the latter of particular interest given both the investor-driven housing market downturn and associated concerns about potential ‘wealth effect’ spillovers to demand.</p>
<p>At the aggregate level, 18.7% of respondents reported owning a residential investment property, broadly in line with official statistics.</p>
<p>Consumers in NSW, WA and Vic were slightly more likely to be housing investors while those in Qld showed the lowest incidence (15%). Not surprisingly the share of investors rises steadily across age groups, peaking at 27% for those aged 55-64, dropping back sharply to 14% for those over 65 (noting that this group is less likely to be accessing the tax benefits of negative gearing).</p>
<p>Again in line with the official statistics, the incidence of investor housing ownership is higher for those on high incomes (31%) and amongst consumers that are owner occupiers (24%). So-called ‘rentvesters’ account for just 7% of tenants.</p>
<p>Turning to the sentiment readings, housing investors are markedly more optimistic than non investors with an average sentiment read over Dec-Jan of 114.7 vs 101 for non investors and 103.7 for all consumers.</p>
<p>Note that this does not appear to be a by-product of income differences – across every income band, housing investors have more positive sentiment reads than non investors.</p>
<p>The positive spread is across all index components but is most pronounced for ‘finances vs a year ago’ (+16pts) and least pronounced for ‘finances, next 12mths’ (+6pts) – an intriguing mix that suggests investors have been unperturbed by price falls over the last year but that expectations of further declines may be curbing optimism for the year ahead.</p>
<p>On housing, investors are more positive on ‘time to buy’ but more negative on the price outlook. They also view ‘real estate’ more favourably as the ‘wisest place for savings’, particularly compared to ‘deposits’, but are slightly more inclined towards repaying debt than non investors.</p>
<p>Read the full report: <a href="https://westpaciq.westpac.com.au/wibiqauthoring/_uploads/file/Australia/2019/January/WestpacRedBookJanuary2019.pdf" target="_blank">'Red Book January 2019' (PDF 453kb)</a></p>
<p><img src="https://westpaciq.westpac.com.au/wibiqauthoring/_uploads/image/The_Red_Book/Red_Book_bites/Redbook-bite-20190131-2.jpg" alt=""></p>
<p><em>MATTHEW HASSAN is a Senior Economist for Westpac</em></p>
</div>
</body></html>

Sentiment of housing investors more optimistic than non-investors: Matthew Hassan

<html><body>
<p>EXPERT OBSERVER</p>
<p>Housing weakness in late 2019 was clearly not confined to just turnover and prices with new dwelling approvals sliding sharply into year end – down 26% between Sep and Dec, the last month marking the lowest level for monthly approvals since June 2013. For Q4 as a whole, approvals were down 10.9%qtr and 23.7%yr.</p>
<p>Approvals are now signalling an unambiguous further weakening that will clearly see declining new dwelling investment detract from Australia’s growth in 2019. Westpac expects new dwelling investment to decline 8% in the year with a further 5% contraction in 2020.</p>
<p>The composition of the approvals decline points to downside risks to this outlook. Units continue to drive the cycle with a further 18.8% drop in Dec to be down 38%yr. Within this segment, ‘high rise’ approvals look to be down a further 16% in the month and by over a third in Q4 as a whole. That is outpacing our assumed path of a cumulative 40% decline by the end of 2019, suggesting weakness may be more pronounced and/or 'front loaded'.</p>
<p>More importantly, there continues to be significant weakness in other segments as well – medium density approvals down over 10% in the month and private detached house approvals down –2.2%mth, –11.3%yr. The shorter ‘lags’ on non high rise work means these declines will likely impact activity through the first three quarters of 2019.</p>
<p>The state breakdown shows weakness spread across the major eastern states: NSW –8.1%mth, –21%yr; and Vic –8.1%mth, –23%yr; and Qld –5.8%mth, –29.7%yr. WA posted a slight gain but is also down 30%yr.</p>
<p>The total value of renovation approvals rose 3.1% to be about flat on a year ago but with a modest uptrend in place. While the rise is mild, it is coming across all the major states.</p>
<p>The total value of non res building approvals fell 9.8% to be down about 15%yr. Latest monthly reads have been choppy around a flat trend, albeit with better gains for NSW and Vic and, by sector, for education-related building in the public sector.</p>
<p>Overall the December approvals update clearly challenges the RBA's view from the November Statement on Monetary Policy that "... dwelling investment is expected to decline gradually" and suggests that, as well as incorporating the weaker starting point from the Q3 national accounts, its revised forecasts to be released in Friday's February Statement on Monetary Policy will also need to materially lower the near term outlook for dwelling investment.</p>
<p>Even if the Reserve Bank maintains its view that the negative 'wealth effect' spillovers from falling house prices will be limited, there is a clear ‘real economy’ negative coming through via new dwelling investment.</p>
<p><em>MATTHEW HASSAN is a senior economist at Westpac</em></p>
</body></html>

A clear ‘real economy’ negative coming through via new dwelling investment: Matthew Hassan

<html><body>
<p>EXPERT OBSERVER</p>
<p>Dwelling approvals declined 1.5% in October, in line with the consensus forecast but with both the headline and detail a touch better than we had been expecting.</p>
<p>Approvals remain locked in a clear downtrend but this month's update eases some of the downside risks that had been emerging around non high rise approvals in particular.</p>
<p>Recall that the September approvals report showed a solid headline rise (+5.5% revised up from +3.3% previously) that concealed a much weaker underlying picture.</p>
<p>All of the monthly gain was due to a jump in Vic high rise approvals – excluding this segment, approvals were down 7.5% (since revised to –4.5%).</p>
<p>Moreover, that weak underlying picture followed a sharp 14% drop in approvals over July-August.</p>
<p>Going into the October update we were expecting headline approvals to reconnect with this clear downtrend. Instead the decline is somewhat milder and detail mixed rather than weak.</p>
<p>Private detached house approvals rose 2.7% in October with the previous month's fall pared back to from –2.7% to –1.5%.</p>
<p>The decline in this segment from June's peak is now a much milder 3.5% vs the 7.3% fall presented in September.</p>
<p>Private units posted a 4.8% drop, continuing a volatile run: +13% in September; –23% in August; and –7% in July.</p>
<p>Most of this is due to ‘high rise’ approvals which dropped 40% over July-August, spiked 60% in September and dropped back 40% again in October.</p>
<p>Forward indicators continue to point to a weak outlook for this segment, site purchases in particular.</p>
<p>For the month of October, a strong rise in 'medium density' unit approvals provided a material offset, this small segment up about 25% in the month, reversing a similar sized decline in September.</p>
<p>All states recorded declines in October, Vic showing less of a pull back than might have been expected (–2.6%mth, –13.7%yr) given last month's high rise spike; and SA notably weaker (–17%mth, –24.8%yr).</p>
<p>Across the other majors: NSW approvals were down –0.5%mth, –16.5%yr; Qld –1.1%mth, –13.3%yr; and WA –0.1%mth, –23.1%yr.</p>
<p>The total value of renovation approvals edged up 0.5% but are still down 10%yr with the trend showing no real direction.</p>
<p>The total value of non res building approvals rose 4% but were still down 25%yr.</p>
<p>While trends remain very difficult to discern, recent weakness has been most pronounced across offices.</p>
<p>By state, weakness over the last 3mths has centred on Qld and WA rather than NSW and Vic.</p>
<p>Overall, the October approvals report is weak but not quite as weak as we had feared.</p>
<p>While the detail eases some of the downside risks to the outlook our view remains that residential building will see a significant 5% decline in 2019.</p>
<p><em>MATTHEW HASSAN is a senior economist at Westpac</em></p>
</body></html>

Australian dwelling approvals, another soft month: Matthew Hassan

<html><body>
<p>EXPERT OBSERVATION</p>
<p>Dwelling approvals rose 3.3% in September, reversing part of the 13% slide over the previous two months but with the monthly move a touch below the consensus expectations of a 3.8% rise.</p>
<p>Despite this, the detail was weak. The monthly gain centred on the famously volatile high rise unit segment, which had fallen sharply over the previous two months. The September high rise bounce was also heavily concentrated in Victoria. Approvals outside of this narrow state segment were significantly weaker (our estimates suggest total dwelling approvals ex Vic high rise were down about 7.5%).</p>
<p>Private detached house approvals declined 2.7% to be down 7.3% since June – a significant shift for what is usually a more stable segment.</p>
<p>Private units in total posted a 9.2% bounce, retracing some of the 20% decline over the previous two months. With-in this, ‘high rise’ approvals jumped 40-50% although this looks to be exaggerated by seasonal adjustment. A sharp fall in 'medium density' partially offset the gain.</p>
<p>By state, the Vic recorded an outsized 30.5% gain but was softer ex high rise (we estimate down 2.3% in seasonally adjusted terms). The other major states recorded big falls, NSW down 6.8%, Qld down 10.5% and WA down 19%.</p>
<p>The total value of renovations edged up 0.8%, the slight trend decline over the first half of the year showing signs of leveling out. Notably, trend approvals in NSW and Vic are down 7.6% since the start of the year.</p>
<p>The total value of non res building approvals declined 3.8%. Trends remain difficult to pick out due to high volatility but the segment looks to be tracking lower in most states.</p>
<p>Overall, the headline gain in dwelling approvals this month is a 'head fake'. Excluding a sharp spike in Vic high rise, something that is very unlikely to sustain, reveals a fairly broad based picture of weakness. Tightening credit conditions are clearly impacting both residential and non residential sectors. The pace of decline remains hard to pin-point but building activity is more clearly tracking towards a contraction in activity heading into 2019.</p>
<p><em>Matthew Hassan is a Senior Economist for Westpac</em></p>
</body></html>

Australian dwelling approvals had an unconvincing bounce: Matthew Hassan

<html><body>
<p>EXPERT OBSERVATION</p>
<p>Consumer sentiment has tracked back to neutral as the earlier tax cut boost wanes and a variety of negatives impact. The housing market correction is in the mix but the detail suggests the impact on sentiment has been small so far.</p>
<p>The Westpac Melbourne Institute Index of Consumer Sentiment has weakened over the last 3 months, falling 4.2% and retracing all of the gains seen through the middle of the year.</p>
<p>At 100.5, the Index is now broadly unchanged on a year ago and only just above the 100 line, indicating a near even mix of optimists and pessimists.</p>
<p>A waning boost from the income tax cuts announced in May, renewed political instability, mortgage rate increases, further declines in house prices, rising petrol prices and unsettled financial market conditions all look to have contributed to the softer reads. Indeed, given the range of negatives, the pull back in sentiment has arguably been mild.</p>
<p>There is some evidence that positives around economic growth, the labour market and more balanced conditions across states have provided some underlying supports.</p>
<p>A key area of interest is the extent to which the house price correction is having spillover effects on the consumer. Assessments of family finances remain a notable weak spot.</p>
<p>Concerns around interest rates and house prices are both apparent – sentiment amongst households with a mortgage falling 6.4% over Sep-Oct.</p>
<p>That said, the more pronounced house price corrections in Sydney and Melbourne do not appear to be weighing more heavily on sentiment in these regions, at least not yet.</p>
<p><img src="https://westpaciq.westpac.com.au/wibiqauthoring/_uploads/image/The_Red_Book/Red_Book_bites/Redbook-bite-20181023-1.jpg" alt=""> </p>
<p><em><strong>Matthew Hassan</strong> is a Senior Economist for Westpac.</em></p>
</body></html>

Housing market correction impact on consumer sentiment small so far: Matthew Hassan

<html><body>
<p>EXPERT OBSERVER</p>
<p>Australia’s housing market has continued to weaken. Conditions still vary widely across cities but are soft overall, with price corrections underway in the previously strong Sydney and Melbourne markets and Perth's longer running period of price declines also continuing.</p>
<p>The three months to August have seen the Westpac Housing Consumer Sentiment Index (a composite measure based on four housing–related components of the Westpac Consumer Sentiment survey) soften a touch but remain consistent with stabilising demand. The main driver of the lift continues to be less downbeat reads on ‘time to buy’, partly reflecting an improvement in affordability. Small positives around jobs and risk aversion have been offset by weakening price expectations.</p>
<p>Turnover remains very low. Whereas earlier estimates had suggested activity might have been stabilising in the first half of 2018, revised and updated data now show turnover nationally down 6.2% over the year to July. The annual pace of decline has moderated and the most recent monthly figures hint at stabilisation but, without a revival, annual growth is likely to stay negative through to year end.</p>
<p>The continued decline in turnover suggests other factors such as tightening loan criteria and falling investor activity are weighing on activity, essentially preventing what would likely have been a stabilisation in conditions by now.</p>
<p> <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/2018/8/28/WESTPAC.jpg" alt=""></p>
<div> </div>
<div><em>Matthew Hassan is a Senior Economist at Westpac.</em></div>
</body></html>

Housing sentiment stable but markets still weakening: Matthew Hassan

<html><body>
<p>EXPERT OBSERVER</p>
<p>The minutes of the Reserve Bank Board’s July monetary policy meeting provide some significant additional colour around the Bank’s current thinking.</p>
<p>The main points of interest are: 1) a slightly more tentative tone around the outlook; 2) the reinstated line that the next cash rate move “would more likely be an increase than a decrease” but with a clearer qualification that this would not be any time soon; 3) expanded comments on the rise in bank funding costs, albeit without any strong conclusions; and 4) additional commentary about a ‘special paper’ prepared for the meeting on Australian household debt.</p>
<div>As to be expected, the main discussion was as per the Governor’s post-meeting decision statement: a little less positive on the global front, acknowledging uncertainty around trade policy abroad and rising short term wholesale interest rates locally, but assessing the Australian data flow as in line with the Bank’s above trend growth view, with a slightly firmer outlook for labour markets but key uncertainties still hanging on the outlook for the consumer.</div>
<div> </div>
<div>However, there were some notable shifts in the closing paragraphs of the ‘Considerations for Monetary Policy’ section, which sets out the decision rationale and framework for policy decisions going forward.</div>
<div> </div>
<div>Usually this just reprises the closing paragraphs from the Governor’s decision statement.</div>
<div> </div>
<div>However, the July minutes provide quite a bit more colour.</div>
<div> </div>
<div>The outlook comes across as a little more tentative – whereas the July decision statement and June minutes carried the simple line that: “Further progress in reducing unemployment and having inflation return to target is expected, although this progress is likely to be gradual”, the July minutes couched this as something “Members continued to view the strengthening economy as likely to deliver”.</div>
<div> </div>
<div>The commentary provides a clearer framework for future policy as well.</div>
<div> </div>
<div>Back in April-May the minutes included a slightly surprising line that: “In the current circumstances, members agreed that it was more likely that the next move in the cash rate would be up, rather than down.” This line was dropped in the June minutes but reinstated in the July minutes.</div>
<div> </div>
<div>However, it was given an important qualifier that “since progress … was likely to be gradual, [members] also agreed there was no strong case for a near-term adjustment in monetary policy” and that “it would be appropriate to hold the cash rate steady … while this progress unfolds”.</div>
<div> </div>
<div>This brings the minutes into line with recent commentary from the RBA Governor, and in particular a speech on June 13 in which he noted that “the environment in which interest rates are increasing is also likely to be one in which people's incomes are growing more quickly than they are now”.</div>
<div> </div>
<div>The bottom line is that official rates are not moving up any time soon.</div>
<div> </div>
<div>One area of keen interest going into the minutes was how they would handle an expanded discussion of the rise in wholesale interest rates.</div>
<div> </div>
<div>The Governor’s decision statement had acknowledged that gains in recent months were due to more than just developments in the US but stopped short of describing the ‘other factors’ at work.</div>
<div> </div>
<div>The minutes go a little further, members noting the tendency for pressures to rise at the end of the quarter and that major bank funding costs had risen “a little over 2018”.</div>
<div> </div>
<div>While the Board clearly remains uncertain about how persistent these pressures will be, the phrasing and the consistent note that “the average mortgage interest rate on outstanding loans had been declining for some time” given more prominence in the minutes and Governor’s statements in recent months suggests the Bank is not overly concerned about the current situation.</div>
<div> </div>
<div>We look forward to a fuller assessment in the RBA’s August Statement on Monetary Policy.</div>
<div> </div>
<div>The July minutes included an extended discussion on Australian household debt levels, with a ‘special paper’ prepared for the meeting.</div>
<div> </div>
<div>Key points were fairly familiar although some comments were notable, in particular that “members recognised that a material share of household debt is held by lower-income households, which generally have higher debt relative to their income”.</div>
<div> </div>
<div>The same group however were seen as likely to have ‘asymmetric’ responses to interest rate moves –sensitive to increases but less likely to borrow more when rates fall.</div>
<div><strong> </strong></div>
<div><strong>Conclusion</strong></div>
<div><strong> </strong></div>
<div>There were many other points of interest in the remainder of the minutes, which were the longest in word count terms since the RBA began publishing full meeting minutes in 2006.</div>
<div> </div>
<div>Many of these were more optimistic than the comments we have singled out – household labour incomes and labour market vacancy rates for example were noted as positives domestically, as were the contributions from public sector activity, infrastructure investment, non-mining business investment more generally, a rise in the terms of trade and evidence of rising wage pressures in major economies abroad.</div>
<div> </div>
<div>Overall though the additional colour from the July meeting minutes again underscores that policy is firmly on hold. We remain of the view that the RBA will leave the cash rate unchanged throughout 2018 and 2019.</div>
<div> </div>
<div><em>Matthew Hassan is a Senior Economist at Westpac.</em></div>
</body></html>

RBA's July board meeting confirms the cash rate isn't changing: Matthew Hassan

<p data-end="587" data-start="368">Queensland builder-developer MAYD has revealed the first look at its major North Kirra beachfront development, lodging amended plans that reduce the number of apartments and increase the proportion of larger residences.</p>

<p data-end="778" data-start="589">The project is planned across a substantial 4,742 sqm amalgamated site spanning seven lots at <a href="https://www.apartments.com.au/new-apartments/2-6-pacific-parade-bilinga-qld-4225">2-6 Pacific Parade</a> and 27-33 Golden Four Drive in Bilin​ga, directly opposite Nor​th Kirra Beach.</p>

<p data-end="907" data-start="780"><a href="https://www.apartments.com.au/developers/mayd-group">MAYD</a> secured the site for $32.5 million in 2025, in what was one of the Gold Coast's largest property transactions of the year.</p>

<p data-end="1052" data-start="909">The development will be delivered across two stages, with the first stage carrying an estimated gross realisation value of around $360 million.</p>

<p data-end="1311" data-start="1054">The latest amendments seek to reduce the overall apartment count and shift the project further toward the owner-occupier market, with larger residences designed for buyers wanting considerably more space than traditionally offered in a beachfront apartment.</p>

<p data-end="1451" data-start="1313">The residential mix will include townhomes, oversized two-bedroom apartments, substantial three-bedroom residences and four-bedroom homes.</p>

<p data-end="1676" data-start="1453">MAYD has appointed Cera Stribley to lead the architecture and interiors, with the Melbourne-based design practice drawing on the beachfront setting through a series of ocean-facing terraces and heavily landscaped balconies.</p>

<p data-end="1908" data-start="1678">Strong horizontal forms and curved balconies will define the exterior, with subtropical landscaping integrated throughout the building to soften the built form and increase the connection between the residences and the beachfront.</p>

<p data-end="2142" data-start="1910">The project will also include an extensive collection of resident wellness and lifestyle facilities, continuing the broader shift across the Gold Coast's luxury apartment market toward larger homes supported by resort-style amenity.</p>

<p data-end="2142" data-start="1910"><img alt="MAYD" data-entity-type="file" data-entity-uuid="d1bcbb05-e659-4b47-8bd4-1e595315e2ad" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-27%20at%202.05.03%E2%80%AFPM.png?VersionId=jj0XEud1X1DuLt7_KyElhjMdZGOXmLHP" /></p>

<p data-end="2308" data-start="2144">MAYD Founder Todd Mould said North Kirra was increasingly appealing to buyers attracted to the more established, lower-density character of the southern Gold Coast.</p>

<p data-end="2648" data-start="2310">"North Kirra presents one of the most compelling luxury residential opportunities currently emerging in Australia, combining absolute beachfront with the character and authenticity that buyers are increasingly seeking, and the same sense of tight-knit community that defined Burleigh and Currumbin perhaps 10 or 15 years ago," Mould said.</p>

<p data-end="2797" data-start="2650">"With Gold Coast Airport on its doorstep, it also offers a level of accessibility that broadens its appeal across almost every market demographic."</p>

<p data-end="2938" data-start="2799">The project comes as the southern Gold Coast continues to attract an increasing share of high-end apartment development and buyer activity.</p>

<p data-end="3216" data-start="2940">Kirra in particular has emerged as one of the region's more tightly held beachfront markets, with its relatively low-density character, established surf and hospitality scene and proximity to Gold Coast Airport differentiating it from the higher-density markets further north.</p>

<p data-end="3325" data-start="3218">Mould said those characteristics had informed the approach MAYD and Cera Stribley had taken to the project.</p>

<p data-end="3442" data-start="3327">"We've worked closely with Cera Stribley to create a vision that is deeply connected to its surroundings," he said.</p>

<p data-end="3662" data-start="3444">"Inspired by the coastline itself, the architecture has been shaped around space, privacy and resort-style living, creating a collection of homes that reflects the next generation of luxury on the southern Gold Coast."</p>

<p data-end="3818" data-start="3664">MOTIV Managing Director Carly Cottam, who has been appointed to market the project, said buyer attention had continued to move south along the Gold Coast.</p>

<p data-end="4076" data-start="3820">"Purchasers who may once have defaulted to Broadbeach, Main Beach or Surfers Paradise are increasingly recognising the value of a genuine beachfront location that offers lower density, strong amenity and a more established sense of community," Cottam said.</p>

<p data-end="4375" data-start="4078">"Kirra has a powerful combination of growing demand and genuine scarcity. Beachfront supply is inherently constrained, the area remains relatively low density, and buyers are increasingly placing a premium on locations that feel established, uncrowded and authentic rather than heavily developed."</p>

<p data-end="4503" data-start="4377">Cottam said the proximity to Gold Coast Airport was also proving increasingly important for interstate and second-home buyers.</p>

<p data-end="4741" data-start="4505">"Being minutes from Gold Coast Airport makes it particularly compelling for interstate buyers, frequent travellers and second-home purchasers who can access an authentic coastal lifestyle almost immediately after stepping off a flight."</p>

<p data-end="4910" data-start="4743">The acquisition takes MAYD's active development portfolio to more than $500 million, with the North Kirra project representing one of its largest undertakings to date.</p>

<p data-end="4951" data-start="4912">MAYD is targeting an early 2027 launch.</p>


Joel Robinson

First look at MAYD's North Kirra mixed-use precinct

<main data-perf-region="main">
<p data-end="600" data-start="394">Castle Hill, the longtime hub of the Hills District, has been one of the major beneficiaries of Sydney's Metro expansion, with improved connectivity helping drive continued population growth, development and buyer demand across the Hills District.</p>

<p data-end="733" data-start="602">But despite that growth, the suburb has seen relatively few major new apartment projects brought to market over the past 18 months.</p>

<p data-end="970" data-start="735">Hills District developer Reve Group is looking to fill that gap with <a href="https://www.apartments.com.au/new-apartments/nova-r-ve-castle-hill-2-garthowen-crescent-castle-hill-nsw-2154">Nova Rêve</a>, a major new mixed-use precinct on the corner of Garthowen Crescent and Old Castle Hill Road, a short walk from Castle Hill Metro Station and Castle Towers.</p>

<p data-end="970" data-start="735">[smartcode_project:default project_id=152737 project_image_fid=377679]</p>

<p data-end="1159" data-start="972">The project will comprise three residential towers alongside a hotel, restaurants, cafes and a skybar, more than 1,600 sqm of ground-floor retail and almost an acre of landscaped gardens.</p>

<p data-end="1357" data-start="1161">It represents the largest project undertaken by Reve Group, the development arm of the Kassis family, which has been building across the Hills District for more than 30 years through Kassis Homes.</p>

<p data-end="3400" data-start="3216">[smartcode_project:default project_id=152737 project_image_fid=377675]</p>

<p data-end="3400" data-start="3216">Nova Rêve also represents a significant step up from the family's first apartment development, Grand Rêve, which was delivered nearby on Garthowen Crescent.</p>

<p data-end="1664" data-start="1517">Grand Rêve introduced larger, house-like apartment layouts and premium inclusions including Wolf and Sub-Zero appliances to the Castle Hill market.</p>

<p data-end="1826" data-start="1666">Nova Rêve takes that approach to a precinct scale, combining the residential component with hospitality, retail and substantial public and resident landscaping.</p>

<p data-end="1826" data-start="1666">[smartcode_project:default project_id=152737 project_image_fid=377685]</p>

<p data-end="2045" data-start="1828">Reve Group Managing Director Sam Kassis said the project reflected the family's three decades of building in the Hills, which has evolved from trophy homes on quarter-acre blocks to larger-scale apartment development.</p>

<p data-end="2269" data-start="2047">"Grand Rêve was our first apartment project here and it showed us what this pocket of Castle Hill could be. Nova Rêve is the refinement of that idea: not just apartments, but a place the whole suburb can use," Kassis said.</p>

<p data-end="2430" data-start="2271">A key part of that approach is the hotel, which has been designed to operate as an amenity for the wider Castle Hill community rather than solely hotel guests.</p>

<p data-end="2606" data-start="2432">It will include restaurants, cafes, skybars and all-day dining, alongside conference and event facilities catering to business functions, community groups and private events.</p>

<p data-end="2724" data-start="2608">At ground level, more than 1,600 sqm of shops and cafes will open onto the surrounding streets and landscaped areas.</p>

<p data-end="2892" data-start="2726">Almost an acre of gardens designed by Land and Form Studios will run through the precinct, incorporating pathways, seating, barbecue areas and children's play spaces.</p>

<p data-end="2892" data-start="2726">[smartcode_project:default project_id=152737 project_image_fid=377680]</p>

<p data-end="3004" data-start="2894">Reve Group's Romio Georges said creating an active ground plane had been central to the planning of Nova Rêve.</p>

<p data-end="3214" data-start="3006">"There are gardens with pathways, barbecues, seating and play areas, shops and cafes opening onto the street, and a hotel with restaurants and a skybar that anyone in Castle Hill can walk into," Georges said.</p>

<p data-end="3400" data-start="3216">The project's elevated position on one of Sydney's highest ridgelines will also provide apartments with outlooks toward the Sydney skyline, surrounding parkland and the Blue Mountains.</p>

<p data-end="3400" data-start="3216">More than 80 per cent of the apartments will occupy corner positions, with Turner responsible for both the architecture and interiors.</p>

<p data-end="3670" data-start="3538">&nbsp;</p>

<p data-end="3670" data-start="3538">[smartcode_project_cta:default project_id=152737]</p>

<h3 data-end="3697" data-section-id="q3n5ak" data-start="3672">&nbsp;</h3>
</main>


Nova Rêve arrives as Reve Group bets on Castle Hill's next growth phase

<p>A collection of just 25 large-format apartments and penthouses overlooking Goodwin Park is entering the Coolangatta market, with <a href="https://www.apartments.com.au/new-apartments/marea-residences-coolangatta-27-27a-dixon-street-coolangatta-qld-4225">Maréa Residences</a> combining a low-density, residential-only approach with uninterrupted park and Pacific Ocean outlooks.</p>

<p>Located at 27 Dixon Street, Maréa comprises three and four-bedroom residences alongside a limited number of dual-level penthouses, with the project positioned between Goodwin Park and <a href="https://www.apartments.com.au/developments/coolangatta-qld-4225">Coolangatta</a>’s coastal precinct.</p>

<p>Construction has commenced, with completion currently estimated for late 2027. Three-bedroom residences are priced from $1.8 million.</p>

<p>[smartcode_project:default project_id=150999 project_image_fid=374005]</p>

<p>The project has been designed around its northern outlook across the park, with the building’s architecture, landscaping and material palette intended to establish a connection with the neighbouring green space. The residences have been configured to maximise natural light and views across Goodwin Park towards the ocean.</p>

<p>Inside, the material palette incorporates timber, stone and brushed brass, complemented by curved detailing and ambient lighting. Kitchens and bathrooms carry the same natural material approach, while residences also include basement parking, storage and lift access.</p>

<p>Maréa’s penthouses are arranged over two levels and include private pools, adding another layer to the project’s focus on larger-format apartment living. Across the development, residences are configured with three or four bedrooms rather than the broader mix of smaller apartment types commonly found in larger projects.</p>

<p>[smartcode_project:default project_id=150999 project_image_fid=374010]</p>

<p>Resident amenity is concentrated at rooftop level, where landscaped entertaining terraces and pools take advantage of elevated views across Coolangatta and the Pacific Ocean.</p>

<p>The project has so far been particularly well received by local owner-occupiers and downsizers, according to Urban Activation Property Sales and Marketing Director Matt George, with the residential-only format, construction quality and northern park outlook among the features resonating with purchasers.</p>

<p>“The uninterrupted northern aspect overlooking Goodwin Park has been a key point of difference, with buyers attracted to the sense of serenity and open space the park provides, while still enjoying easy access to the ocean and being within walking distance of the lifestyle and amenities Coolangatta has to offer,” George said.</p>

<p>[smartcode_project:default project_id=150999 project_image_fid=374002]</p>

<p>“The combination of high-quality construction, a residential-only building, park outlook and proximity to the beach has resonated strongly with the local downsizer market.”</p>

<p>The Dixon Street address is within walking distance of Coolangatta Beach and the broader southern Gold Coast coastline, including the surf breaks at Snapper Rocks and Kirra. Coolangatta’s cafés, restaurants and retail are nearby, while Gold Coast Airport is also within close proximity.</p>

<p>[smartcode_project_cta:default project_id=150999]</p>


Maréa Residences brings parkside apartments to Coolangatta

<p data-end="535" data-start="324">Melbourne developer PDG has secured Victorian Government approval for its $1.5 billion Southbank development <a href="https://www.apartments.com.au/new-apartments/the-one-1-queens-bridge-street-southbank-vic-3006">The One</a>, clearing the way for the long-dormant riverfront site opposite Crown to finally be developed.</p>

<p data-end="717" data-start="537">The Minister for Planning has approved the project at 1-29 Queens Bridge Street, with the Department of Transport and Planning issuing the planning permit following its assessment.</p>

<p data-end="918" data-start="719">The approval will allow PDG to develop the prominent 5,059 sqm site with a major mixed-use tower comprising premium apartments, including branded residences, a luxury hotel and boutique office space.</p>

<p data-end="1131" data-start="920">PDG acquired the site in late 2024, with its position directly opposite Crown's main entrance and near Melbourne's Arts Precinct making it one of Southbank's most significant remaining development opportunities.</p>

<p data-end="1131" data-start="920"><img alt="PDG" data-entity-type="file" data-entity-uuid="3933013e-6332-4386-b9be-089df05caf17" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-27%20at%209.29.22%E2%80%AFAM.png?VersionId=sITIgBqDL0N3VNSMwWEmF5UA.uvcsRyu" /></p>

<p data-end="1318" data-start="1133">Designed by COX in collaboration with ODO and PDG, the tower's architecture draws on the movement of the Yarra River, with six vertical pleats running the height of the sculpted facade.</p>

<p data-end="1433" data-start="1320">The project will also see the heritage-listed Queens Bridge Hotel restored and incorporated into the development&nbsp;with new hospitality and public uses, including a rooftop venue.</p>

<p data-end="1658" data-start="1591">A significant component of The One will be its residential amenity.</p>

<p data-end="1864" data-start="1660">More than 5,000 sqm of resident facilities will be delivered across a single level, making it one of the largest consolidated residential amenity offerings proposed in an Australian apartment development.</p>

<p data-end="2011" data-start="1866">The planning approval also incorporates a major upgrade of Queensbridge Square, which PDG will deliver in partnership with the City of Melbourne.</p>

<p data-end="2011" data-start="1866"><img alt="PDG" data-entity-type="file" data-entity-uuid="73167fcd-1031-4b6f-a408-a064cfe45ed1" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-27%20at%209.29.17%E2%80%AFAM.png?VersionId=Pf1AEWxw6SNmBqR0zQW5lyEze.MtxgFp" /></p>

<p data-end="2191" data-start="2013">The existing square will be revitalised as a new civic and pedestrian space along the Yarra River, strengthening the connection between the project, Southbank and the riverfront.</p>

<p data-end="2365" data-start="2193">PDG Founder and Managing Director Vince Giuliano said the approval represented a major milestone for a site which has remained largely underutilised for more than 15 years.</p>

<p data-end="2473" data-start="2367">“This is the most significant Planning Permit approval Melbourne has seen in recent years,” Giuliano said.</p>

<p data-end="2775" data-start="2475">“For more than 15 years, this site has remained underutilised. This approval enables us to deliver a project that will contribute meaningfully to the revitalisation of Southbank, restore and reactivate an important heritage building, and create a new civic and hospitality destination for Melbourne.”</p>

<p data-end="2943" data-start="2777">The latest approval follows an earlier planning permit issued by the City of Melbourne covering demolition works across part of the site at 9-29 Queens Bridge Street. Those demolition and early works are already underway.</p>

<p data-end="3145" data-start="3001">PDG has also started generating early interest in the residential component from owner-occupiers ahead of a planned public launch in early 2027.</p>


PDG secures approval for $1.5bn Southbank apartment development, The One

<p>Local developer Harridan is seeking to turn its Woolloongabba apartment project into the first stage of a broader transformation of Burke Street, using a new 16-storey mixed-use building to establish a greener pedestrian connection toward the rapidly evolving Boggo Road transport and knowledge precinct.</p>

<p>The South East Queensland developer has filed plans for 154 apartments on the <a href="https://www.apartments.com.au/new-apartments/4-burke-street-woolloongabba-qld-4102">southern side of Burke Street</a>, where its proposal has been designed alongside a wider vision by LatStudios for the street.</p>

<p>That vision positions the southern side of Burke Street for buildings of 15 storeys and above, while envisaging lower-rise development of up to five storeys on the northern side to transition into Woolloongabba's existing character housing. It also proposes wider pedestrian verges, deep planting, new street trees and upgrades to the pedestrian approach to Boggo Road Station.</p>

<p>The Harridan development itself has been designed by Brisbane-based Arqus Design and will comprise 154 apartments across 16 storeys. The mix is weighted heavily toward two-bedroom apartments, with 121 proposed alongside 10 one-bedroom and 23 three-bedroom residences. There will typically be around 14 units per floor.</p>

<p>A lower-ground car park and three podium levels will accommodate 156 resident parking spaces, along with visitor and commercial parking. There will also be 154 resident bicycle spaces and 40 visitor bicycle parks.</p>

<p>&nbsp;</p>

<p>Harridan is a family-owned developer and part of the Holmwood Highgate Group, with more than three decades of development activity across South East Queensland. Its portfolio spans residential, commercial and industrial property, with current residential projects including Riverbank on Byron in Bulimba, Esperance Residences in Carina and The Precinct at Kinross Road in Thornlands.</p>

<p>Wooloongabba has been popular for apartment developers, particularly since the announcement of the 2032 Summer Olympics games in Brisbane.</p>

<p>While there have been a lot of development applications, it has failed to materialize into real supply.&nbsp;</p>

<p>Sarazin has been the major player in the area. They are under construction at Murcia Residences, on the fringe of East Brisbane and Woolloongabba. They have just launched <a href="https://www.apartments.com.au/new-apartments/the-stanley-residences-woolloongabba-8-trafalgar-street-woolloongabba-qld-4102">The Stanley Residences</a>, in Woolloongabba on Trafalagar Street. They also have Nuage coming soon on the nearby <a href="https://www.apartments.com.au/new-apartments/nuage-woolloongabba-14-wellington-road-woolloongabba-qld-4102">Wellington Road</a>.</p>


Matthew Hassan

Editor's Picks

Have something to contribute?

Developments

New apartments

New townhouses

News