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<div>EXPERT OBSERVER</div>
<div> </div>
<div>As expected, the Reserve Bank Board decided to leave the cash rate unchanged at 1.5% at its July policy meeting. </div>
<div> </div>
<div>The Governor’s decision statement was a little less positive on the global front, and acknowledged uncertainty around the rise in Australia’s short term wholesale interest rates, but retained the core view of growth averaging a bit above 3% a year and an eventual lift in inflation.</div>
<div> </div>
<div>The closing paragraph of the statement was unchanged, retaining the key line that, “Further progress in reducing unemployment and having inflation return to target is expected, although this progress is likely to be gradual.”</div>
<div> </div>
<div>Commentary on the global economy was a little more mixed.</div>
<div> </div>
<div>Last month’s assessment that “The global economy has strengthened over the past year” was replaced with “The global economic expansion is continuing” – suggesting the pace is no longer accelerating.</div>
<div> </div>
<div>The picture is still broadly positive although uncertainties around trade policy and strains in a few emerging markets were again noted.</div>
<div> </div>
<div>The Governor’s comments on short term interest rates were amended as expected.</div>
<div> </div>
<div>Whereas last month the rise in Australian short term rates was ascribed to conditions in the US, this month’s statement acknowledges it is now only partly due to developments in the US with “other factors at work as well” and that “it remains to be seen the extent to which these factors persist”.</div>
<div> </div>
<div>The statement clearly needed to comment on this issue but has done so in a way that reveals very little about the Board’s thinking.</div>
<div> </div>
<div>If anything, the wording, position of the comment in the statement, and other comments about wider financial conditions (“Australian dollar has depreciated a little”; “the average mortgage interest rates on outstanding loans has been declining”) imply it is not overly concerned (at this stage).</div>
<div> </div>
<div>The local data flow continues to be in line with the RBA’s growth view, the strong March quarter GDP result and continued pick up in non-mining business investment noted, as well as the strength in public infrastructure.</div>
<div> </div>
<div>Households are again cited as a source of uncertainty.</div>
<div> </div>
<div>The Governor’s statement was more forthright about prospects for jobs and wages growth, asserting up front that “the outlook for the labour market remains positive”.</div>
<div> </div>
<div>That compares to the more nuanced, and seemingly tentative, discussion in the June decision statement although the observations in both are broadly the same (“forward looking indicators continue to point to solid growth in employment”; “unemployment steady at around 5½% for much of the past year”; “wages growth remains low” but “appears to have troughed”).</div>
<div> </div>
<div>The wording around skill shortages was a little firmer ("increasing reports ... in some areas").</div>
<div> </div>
<div>There was a notable, but secondary, shift in the language about the exchange rate with the July statement dropping the comment that “an appreciating exchange rate would be expected to result in a slower pick-up in economic activity and inflation than currently forecast.”</div>
<div> </div>
<div>This line has been included in some shape or form in every Governor’s statement since March 2016. The implication is that the Bank is less wary of a rising Australian dollar disrupting the outlook with the currency at 74c vs 80c at the start of the year.</div>
<div> </div>
<div>Notably the comment was first introduced in the context of the economy’s wider transition through the wind down in the mining investment boom, a transition the RBA may now view as largely complete.</div>
<div> </div>
<div>On housing the Governor’s statement notes prices are declining in both the Sydney and Melbourne markets but with national measures "little changed" over the last six months.</div>
<div> </div>
<div>APRA’s supervisory measures are again seen as having helped contain the build-up of risk.</div>
<div> </div>
<div>The Governor seems a little less concerned about a further tightening of lending standards by banks, which is viewed as “possible” and set against the observation that average mortgage rates on outstanding loans have declined.</div>
<div> </div>
<div>Again, this remains a 'watch this space' issue.</div>
<div><strong> </strong></div>
<div>Concluding, while there were again several points of interest, the July decision statement showed little substantive change.</div>
<div> </div>
<div>The RBA still looks to be firmly on hold and prepared for a long wait.</div>
<div> </div>
<div>The minutes should reveal more about the Board’s deliberations, the discussion of short term wholesale interest rates will be of particular interest as well as the risks around a further tightening in lending standards.</div>
<div> </div>
<div>However, there’s unlikely to be any shift in rhetoric from the RBA any time soon.</div>
<div> </div>
<div>We at Westpac confirm our long held view that the official cash rate will remain unchanged throughout 2018 and 2019.</div>
<div> </div>
<div><em>Matthew Hassan is a senior economist with Westpac</em></div>
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Matthew_Hassan-HHWHptmrw4

RBA Governor foresees further tightening of lending standards by banks: Matthew Hassan

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<p>EXPERT OBSERVER</p>
<p>Since the housing market’s September peak, the 2% slip in national prices has surpassed the minor correction in 2015-16 that marred the otherwise multi-year upswing since 2012.  <br><br>Unsurprisingly, Australia’s long-treasured dinner party conversation topic is starting to generate more nervous chatter.  <br><br>Firstly, the good news: the rate of decline has moderated a little in the last three months.</p>
<p>The bad?</p>
<p>Buyer sentiment may be showing tentative signs of levelling out but is still not particularly promising, turnover remains near record lows and auction clearance rates are again falling in Sydney and Melbourne.</p>
<p><a href="https://www.propertyobserver.com.au/images/2018/6/19/ride.jpg" target="_blank">Click here to enlarge.</a></p>
<p><a href="https://www.propertyobserver.com.au/images/2018/6/19/ride.jpg" target="_blank"><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/2018/6/19/ride.jpg" alt=""></a><br><br>If it’s any comfort, it’s worth remembering the 2% national decline from the peak remains shallow by historical standards and the declines are narrowly based.</p>
<p>With Sydney leading the decline with a 4.5% fall from the peak, it looks similar to the mid–2000s when the Sydney market experienced a downturn that mostly bypassed other markets, rather than the broader corrections seen during prior major interest rate tightening cycles, such as the mid-1990s.<a href="https://www.propertyobserver.com.au/images/2018/6/19/ride.jpg" target="_blank"></a></p>
<p>Click here <a href="https://www.westpac.com.au/content/dam/public/wbc/news/images/article/2018/06/wbc-news-graph-australian-dwelling-prices.png" target="_blank">to enlarge.</a></p>
<p><img src="https://www.westpac.com.au/content/dam/public/wbc/news/images/article/2018/06/wbc-news-graph-australian-dwelling-prices.png"></p>
<p>Breaking it down further based on our preferred basis – the CoreLogic hedonic series – shows that a third of all properties are recording annual price declines, with just under 6% recording falls greater than 5%.As our May <a href="https://westpaciq.westpac.com.au/wibiqauthoring/_uploads/file/Australia/2018/May/WestpacHousingPulseMay2018.pdf" target="_blank" data-s-object-id="https://westpaciq.westpac.com.au/wibiqauthoring/_uploads/file/australia/2018/may/westpachousingpu_1">Housing Pulse</a> report shows, these falls compare to the more substantial house price corrections in 1994–96, 2004, 2008–09 and 2010–12 when more than half of all properties recorded annual price declines.<br><br>Conditions across the country of course vary widely.<br><br>In NSW, the largest state economy where prices rose the strongest in the recent boom years, slightly more than 25% of properties are now experiencing falls compared to none six months ago, representing the biggest rise in the incidence of price declines since September. What bears watching is whether the price falls spread beyond the middle and “top tier” houses, given several other Sydney segments are on the cusp of declines.<br><br>Victoria is performing better. Only one segment – Melbourne “top tier” houses – are recording declines, accounting for 12% of all properties in the state.</p>
<p>Click here <a href="https://www.westpac.com.au/content/dam/public/wbc/news/images/article/2018/06/wbc-news-graph-share-of-dwellings-by-price.png" target="_blank">to enlarge.</a></p>
<p><img src="https://www.westpac.com.au/content/dam/public/wbc/news/images/article/2018/06/wbc-news-graph-share-of-dwellings-by-price.png"></p>
<p><br>Although not driving the national correction, the mining states are still doing it relatively tough. Nearly 40% of Queensland properties are seeing annual price falls, while in Western Australia the entire state continues to suffer price declines. However, WA’s tentative housing recovery out of the state’s broader recession in recent years looks to be coming through with price slippage moderating and turnover finally lifting.<br><br>Elsewhere, trends are mixed as the rising Tasmanian market experiences virtually no housing segments recording price falls and the South Australian market recording a lift in the incidence of price declines since 2017.<br><br>All this feeds into our view that the housing correction is stabilising but susceptible to deteriorating. One thing to watch closely will be the impact of the banking regulator’s prudential policy measures, given the latest guidance points to some further “micro–prudential” tightening in credit conditions in coming months even as some “macro prudential” limits on lending to investors are removed.</p>
<p>Click here <a href="https://www.westpac.com.au/content/dam/public/wbc/news/images/article/2018/06/wbc-news-graph-macro-prudential-targets.png" target="_blank">to enlarge.</a></p>
<p><img src="https://www.westpac.com.au/content/dam/public/wbc/news/images/article/2018/06/wbc-news-graph-macro-prudential-targets.png"></p>
<p><br>Also, the Reserve Bank estimates that $120 billion of interest only loans are set to roll over to principle and interest terms each year for the next three years. While the RBA suggests this should be a reasonably comfortably transition, there’s the risk of a further weakening in housing markets if it’s not.<br><br>More generally, a thin market with low levels of turnover and persistent price slippage is likely to be more susceptible to shocks, buyer sentiment may have improved on a year ago but a loss of confidence from here would be a cause for concern.<br><br>The chances of discussion about the housing market dying down at the dinner table and everywhere else any time soon appear very low.<br><br><em><strong>Matthew Hassan</strong> is a senior economist at Westpac.</em></p>
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National house price drop surpasses 2012 correction: Westpac's Matthew Hassan

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<p>EXPERT OBSERVATION</p>
<p>Australian housing finance approvals were a touch firmer than expected in April, the number of owner occupier loans down just 1.4% vs expectations of a slightly larger 1.8% decline.</p>
<p>The value of investor loans recorded a 0.9% dip, much milder than March's 9% drop. Despite this, conditions were soft across most of the detail.</p>
<p>The number of new owner occupier approvals, i.e. excluding refinancing, was more in line with consensus, with a 1.9% decline in April taking approvals down 4.4%yr.</p>
<p>The total value of housing finance approvals, including investors but including owner occupier refi, dipped 0.4%mth to be down 5.8%yr (estimates excluding investor refi look to be down about 6.7%yr). Stepping back, the peak to trough move in the value of new finance approvals looks to be a fall of about 10%, roughly on a par with the 2015-16 pull back.</p>
<p>Click here <a href="https://www.propertyobserver.com.au/images/2018/6/13/finance%20approvals.jpg" target="_blank">to enlarge.</a></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/2018/6/13/finance%20approvals.jpg" alt=""></p>
<p>The number of owner occupier construction approvals dipped 0.2% to be down 5.7%yr. The number of owner occupier approvals for the purchase of newly built dwellings fell 3.7%mth but is still up 2.9%yr. On a combined basis, construction-related approvals were down 1.4%mth, –2.9%yr.</p>
<p>The number of approvals to first home buyers (FHBs) continues to ease back from recent highs, declining 1.6%mth. Although approvals are still up 24%yr, they are now 10% off their Nov peak. Activity in this segment has been boosted by increased assistance from state governments in NSW and Vic – measures that in the past have typically generated a significant pull forward in activity that subsequently falls away.</p>
<p>The state breakdown had more detail than usual this month due to the timing of the release which coincided with the release of state lending data for investor loans. The combined figures shows the biggest annual declines in the total value of approvals (incl. investor loans but excl. owner occupier refi) have been in WA (–8.8%yr), NSW (–6%yr) and Qld (–6%yr) with a milder 2.9%yr fall in SA. Vic has seen a slight gain (+1.9%yr) while Tasmania has bucked the national trend with a strong surge (+15.4%yr).</p>
<p>More recent data, from auction markets in particular, suggest housing market conditions have seen a further weakening since April likely reflecting tighter lending criteria. With more stringent assessments also likely to delay loan processing, finance approvals could see a more significant decline in the next few months.</p>
<p><em><span>Matthew Hassan</span> is senior economist with <a href="https://www.westpac.com.au/" target="_blank">Westpac</a>.</em></p>
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Housing finance approvals dip in May: Westpac

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<p>EXPERT OBSERVATION</p>
<p>After holding relatively steady through most of 2017 and early 2018, Australian housing finance approvals showed a notable pull back in the March month. The total number of owner occupier approvals declined 2.2% to be down 3.5%yr – below market expectations of a 1.5% fall but a touch better than industry figures that had pointed to a 3% decline.</p>
<p>The real weakness was around the value of investor approvals which dropped 9%mth to be down 16.1%yr. Estimates of investor approvals ex refi are down over 26%yr and just over 30% vs their 2016 peak. That puts the 2017-18 slowdown on a par with that seen in response to the macro-prudential tightening in 2015-16.</p>
<p>Combined, the total value of approvals ex refi fell 4.6%mth to be down 6%yr.</p>
<p>The detail on owner-occupiers showed a broad based decline.</p>
<p>The number of owner occupier construction approvals fell 4.4%mth to be down 4.3% on a year ago and 11% over the last two months alone. The number of owner occupier approvals for the purchase of newly built dwellings declined 1.4%mth but is still up over 5% on a year ago.</p>
<p>The number of approvals to first home buyers (FHBs) fell 4.6%mth but is still up 25%yr due to strong demand in NSW and Vic where state governments have increased assistance for first time buyers. The decline suggests the peak of this boost is starting to cycle through.</p>
<p>The state data showed owner occupier approvals ex refi down in most major states, the biggest fall in SA (–9%mth) with more modest declines in NSW (–2.6%), Vic (–1.6%) and Qld (–1.1%). WA (1.2%) and Tas (+1.5%) recorded slight gains. Owner occupier finance approvals ex refi are down on a year ago basis for every major state except Vic (–2.8%).<br>Other, more recent, housing data suggests there has been a slight further softening in auction markets in April-May with price growth continuing to slow, in Melbourne in particular.</p>
<p>Overall, the March update points to a renewed weakening in demand. More slippage looks likely near term as lenders tighten loan criteria and borrowing capacity assessments – with more stringent assessments also potentially slowing loan processing times. Notably, the average value of owner occupier loans rose in the month and over the year to March, suggesting the softening in approvals to date does not reflect a tightening in borrowing capacity (although this may have been a factor in the investor loan decline).</p>
<p>To read the full report, <a href="https://westpaciq.westpac.com.au/wibiqauthoring/_uploads/file/Australia/2018/May/er20180511BullHousingFinanceMar.pdf" target="_blank">click here.</a></p>
<p><em><span>Matthew Hassan</span> is senior economist with <a href="https://www.westpac.com.au/" target="_blank">Westpac</a>.</em></p>
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Australian housing finance approvals pull back: Westpac

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<p>Australia's housing markets continue to see price slippage in early 2018. The CoreLogic home value index, covering the eight major capital cities, dipped another 0.2% in March, the fifth consecutive monthly decline with prices nationally now down 1.4% from their Oct peak. Annual price growth slowed to 0.8%, a new low since the price correction in 2011-12. Note that data updates are now clear of holiday distortions with seasonal factors essentially neutral in the March month.</p>
<p dir="LTR" align="LEFT">The dwelling-type breakdown continues to show more pronounced weakness for houses, prices down 0.2% in the month and barely up 0.2%yr. Unit prices were again flat nationally in March with annual price growth somewhat firmer at 2.6%yr.</p>
<p dir="LTR" align="LEFT">Price weakness continues to be concentrated in Sydney, where the annual rate of decline dropped to –2.1%yr after dipping into negative last month. The detail shows the epicentre of the slowdown is houses (–3.8%yr) and particularly those in the upper end of the market, (–6.5%yr for the top 25% of properties by value). Note that these segments outperformed significantly through the upturn with prices still showing better gains over the last two years than the wider market. Sydney unit prices have been much firmer across the board annual price growth remaining positive.</p>
<p dir="LTR" align="LEFT">Melbourne is starting to see a more material slowing although at 5.3%yr, annual price growth remains comfortably above that in the other major markets. Price growth remains particularly strong at the lower end of the Melbourne market (+12.9%yr for the bottom 25% of properties by value).</p>
<p dir="LTR" align="LEFT">Price growth was coming from much weaker starting points across the other capital cities and showed more muted slowdowns in 2017. Annual price growth has dipped back to 1.3%yr in Brisbane and 1.7%yr in Adelaide. The pace of price declines has eased a touch to 2.4%yr in Perth although stabilisation remains elusive.</p>
<p dir="LTR" align="LEFT"><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/2018/4/4/DWELLING%201.jpg" alt=""></p>
<p dir="LTR" align="LEFT">Performances vary widely across the smaller capitals, Hobart posting a strong 13%yr gain but price gains more moderate in Canberra (+2.9%yr) and struggling to pull out of a sharp multi-year correction in Darwin (+1%mth but down –7.5%yr). Regional areas have been uneven as well, posting 4-5%yr price gains in NSW, Vic and Tas but about flat in Qld, dipping in SA and falling at a 5%yr pace in regional WA.</p>
<p dir="LTR" align="LEFT"><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/2018/4/4/DWELLING%202.jpg" alt=""></p>
<p dir="LTR" align="LEFT">Overall, the March update is another soft read. While the pace of declines nationally may not be accelerating there are few convincing signs that they are moderating.   Indeed, if anything there are signs that price slippage may be extending to a broader range of markets.</p>
<p dir="LTR" align="LEFT"><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/2018/4/4/DWELLING%203.jpg" alt=""> </p>
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Australian dwelling price slippage continues

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<p>As expected, the Reserve Bank Board decided to leave the cash rate unchanged at 1.5% at its February Board meeting. The Governor’s decision statement indicates that the Bank’s central forecasts for growth and inflation remain unchanged and emphasises that the Board will be patient in assessing progress. Policy is firmly on hold.</p>
<p>The most substantive change is an additional line given prominence in the concluding paragraph stating that: “Further progress in reducing unemployment and having inflation return to target is expected, although this progress is likely to be gradual.” The clear message is that the Bank will not pre-empt things – it is prepared to wait for an improvement in actual conditions to come through before contemplating any changes.</p>
<p>Elsewhere in the statement, the Bank indicates its forecasts are unchanged with growth “to average a bit above 3 per cent” and CPI inflation “to be a bit above 2 per cent in 2018”. Note that the Bank’s current forecasts, from the November Statement on Monetary, have real GDP growth lifting to 3¼% in 2018 and headline CPI inflation lifting to 2¼% (but underlying inflation holding at 1¾%). The Bank will release updated forecasts with the February Statement on Monetary Policy on Friday.</p>
<p>As expected, the Governor’s statement acknowledged the more positive tone from abroad and from some of the domestic data. The global backdrop is now described as a “broad-based pick-up”. China’s growth is described as solid with what seems to be a more positive take on risks (“authorities paying increased attention to the risks in the financial sector and the sustainability of growth”). Global inflation remains low but is now viewed as likely to “increase over the next couple of years”.</p>
<p>On the domestic economy, comments are more mixed with data over the summer viewed as consistent with the Bank’s forecast for growth to pick up but household consumption a “continuing source of uncertainty” given weak growth in household incomes and high debt levels. Commentary around the labour market is largely unchanged from December – strong job gains in 2017 and indicators pointing to solid growth ahead but wages growth low and likely to stay low for a while yet. A new comment that the Bank expects “a further gradual reduction in the unemployment rate” is consistent with its November forecasts but again places the emphasis on shifts being slow to come through.</p>
<p>This slowness is also emphasised in an additional comment on inflation, which is seen as “likely to remain low for some time, reflecting low growth in labour costs and strong competition in retailing”.</p>
<p>Wording on the Australian dollar was unchanged except for a slight qualifier that the view “it remains within the range that it has been in over the past two years” is on a trade-weighted basis. With the AUD/USD cross retracing sharply in recent sessions (currently back to 0.786 USD from well over 0.800 USD) the need to bolster their rhetoric has faded.</p>
<p>Lastly, the Bank again notes that “housing prices are little changed over the past six months” but adds that prices have “recorded falls in some areas” – a slight contrast to the December statement which instead noted “conditions have eased in Sydney” and gave a little less prominence to the observation.</p>
<p>Conclusion</p>
<p>Overall, the February decision and Governor’s statement contained few surprises. The Bank continues to expect a lift in growth and inflation over coming years and, with the improvement expected to be gradual, is signalling that it is prepared to be patient in assessing how conditions are evolving.</p>
<p>The RBA’s ‘patient approach’ ensures policy will remain on hold over the first half of 2018. Westpac continues to see a more challenging year ahead for the Australian consumer and another sub-par year for wider economic growth. As such we continue to expect rates to stay on hold through the remainder of 2018 and in 2019.</p>
<p>Matthew Hassan is senior economist with <a href="https://www.westpac.com.au/" target="_blank">Westpac</a>.</p>
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RBA's patient approach will see rates on hold through to 2019: Matthew Hassan

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<p>GUEST OBSERVER</p>
<p>The CoreLogic home value index held flat in October taking annual growth to 7%, an abrupt slowdown from the 11.4% peak in May.</p>
<p>Policy measures continue to have a material impact. Although official rates remain near historic lows, regulators introduced a new round of 'macro prudential' tightening measures in late March.</p>
<p>Meanwhile a range of other changes have also seen a progressive tightening of conditions facing foreign buyers.</p>
<p>The CoreLogic indexes were overhauled in August and now provide a much better guide to price changes.</p>
<p>Whereas previously it would take three to six months and/or multiple measures to confirm a market shift, the new series appear to give much cleaner signals month to month and are now the clear 'benchmark' for Australian dwelling prices.</p>
<p>For October, the signals are unambiguously soft. Our estimates suggest the last three months have seen a small dip declining at about a 0.9% annual pace in seasonally adjusted terms (note that the Aug-Sep-Oct period typically sees some firming in prices as the spring selling period begins).</p>
<p>Sydney continues to record the sharpest turnaround in conditions, annual price growth slowing to 7.7% in October, essentially halving since July. Melbourne continues to see a much milder turn with price growth still tracking at 11%.</p>
<p>Price growth remains steady but more subdued elsewhere; tracking at 2.7% in Brisbane; and 4.6% in Adelaide with price continuing so slip lower in Perth (–2.5%).</p>
<p>The houses vs units breakdown shows a more pronounced slowdown for houses with annual price growth slowing to 7.2% from 12.4% in May.</p>
<p>Our monthly seasonally adjusted estimates suggest prices have been declining at about a 2% annualised pace over the last three months.</p>
<p>Unit price growth has been more stable throughout, lower through the peak and with a milder slowdown – annual price growth 6.5% down only slightly since the 8.5% peak in July and momentum holding in positive territory over the last three months. </p>
<p>Notably, the detail suggests the pace of unit price declines in Brisbane and Perth is moderating while price growth in Melbourne units has shown essentially no slowing to date.</p>
<p>The slowdown is likely to carry through to year end. However, the next few months will be a critical gauge of whether markets are starting to stabilise.</p>
<p>To date, the timeliest market measures – buyer sentiment, auction clearance rates and prices – are showing few signs of levelling out. However, some of the pressure from macro-prudential measures may ease off a little.</p>
<p>Click here to read the <a href="https://westpaciq.westpac.com.au/wibiqauthoring/_uploads/file/Australia/2017/October/er20171101BullDwellPricesOct.pdf" target="_blank">full report</a>.</p>
<p>Matthew Hassan is senior economist with <a href="https://www.westpac.com.au/" target="_blank">Westpac</a>.</p>
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Home values flat in October: Westpac's Matt Hassan

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<p>While Australian consumer sentiment has recovered in recent months, views around family finances remain a stand out weak spot. In particular, the ‘finances, last 12mths’ sub-index is down 6.1% vs a year ago and well below long run average levels.</p>
<p>These readings are of real concern.</p>
<p>This backward looking component is already known to have close links with actual spending – something the RBA has noted in the past. Westpac’s latest analysis also confirms the component contains genuine information about current finances.</p>
<p>The ‘finances, last 12mths’  sub-index is closely correlated with growth in labour income, disposable income (i.e. all income after tax and interest) and household net worth with correlations evident at both the national and state level.</p>
<p>The chart below shows how the sub-index tracks vs a combined measure of household finances.</p>
<p>Current readings point to significant added pressure on finances over the last 6mths – our combined per capita measure essentially stalling flat.</p>
<p>Aside from weak wages growth and slowing housing markets, higher mortgage rates for ‘interest only’ and investor loans and associated switching to loans with higher monthly repayments may be impacting.</p>
<p>While some of these drags will dissipate the wider picture suggests family finances will remain under pressure heading into 2018.</p>
<p>Read the full report:<span class="Apple-converted-space"> </span><a href="https://westpaciq.westpac.com.au/wibiqauthoring/_uploads/file/Australia/2017/October/WestpacRedBookOctober2017.pdf" target="_blank">Westpac Red Book October 2017</a>.</p>
<p><a href="https://westpaciq.westpac.com.au/wibiqauthoring/_uploads/image/The_Red_Book/Red_Book_bites/Redbook-bite-20171023-4.jpg" target="_blank">Click to enlarge</a></p>
<p> <img src="https://westpaciq.westpac.com.au/wibiqauthoring/_uploads/image/The_Red_Book/Red_Book_bites/Redbook-bite-20171023-4.jpg" alt=""></p>
<p> </p>
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Why weak sentiment detail around family finances is a real concern: Matthew Hassan

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<p>GUEST OBSERVER</p>
<p>Approvals dipped 1.7% in July, the pull-back from June’s 11.7% jump much milder than expected (market forecast was –5%, Westpac –4%).<br><br>The detail even showed a further small rise in high rise approvals (about 4%) which had been a big driver of the June gain (up about 15%mth).</p>
<p>Non high rise approvals look to have pulled back about 3% from an 8.7% gain in June with private house approvals holding flat showed more Mid-rise approvals look to have pulled back while detached house approvals were flat.</p>
<p>Note that this is broadly consistent with construction related finance approvals which have shown a clear firming in recent months.</p>
<p>By state, a solid gain in NSW was offset by declines elsewhere. <br><span><br>Details</span> <br>Private houses  flat%mth, 2.3%yr<br>Private 'units'    –6.7%mth, –29.5%yr     </p>
<p>NSW     1.5%mth, –15.9%yr<br>Vic       –0.3%mth, –7.8%yr<br>Qld       –2.6%mth, –20.1%yr<br>WA       –11.1%mth, –21%yr<br>SA        0.3%mth, 6.3%yr          </p>
<p>Alteration &amp; additions^   –5.3%mth, 4.3%yr<br>Non-residential^             2.4%mth, 19%yr<br>^ value  </p>
<p> </p>
<p><em><span>Matthew Hassan</span> is senior economist with <a href="https://www.westpac.com.au/" target="_blank">Westpac</a>.</em></p>
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Australian dwelling approvals dipped in July: Matthew Hassan

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<p>GUEST OBSERVER</p>
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<p>Australian housing finance approvals to owner occupiers edged up 0.5% in June, undershooting market expectations of a 1.5% gain. The total number of approvals is down 4%yr.</p>
<p>The picture was ex-refinancing was more in line with expectations with a 1.9% gain to be up 3.4%yr.</p>
<p>Note that the macro prudential tightening measures introduced in late March and associated increases in increase rates for investor and 'interest only' loans have likely given indirect support to owner occupier loan activity.</p>
<p>That said, the value of investor loans was stronger than expected, posting a 1.6% gain to be up 5.7%yr. The total value of loans was up 0.8%mth – ex refi up 1.5%mth, 7.1%yr.</p>
<p>Note that a second round of mortgage rate increases for 'interest only' loans came through late in the month and is likely to impact in coming months.</p>
<p>The state detail is of limited use as investor loans are not split out in this release.</p>
<p>However a notable point in the loan type detail is the continued surge in construction-related finance approvals – finance for construction up 3.6%mth and finance for the purchase of newly built dwellings (which includes for settlement of ‘off the plan’ apartment purchases) up 3.5%mth. The former suggests non high rise construction is likely to lift while the latter is likely related to the wave of high rise apartment completions.</p>
<p>Overall, the numbers will be disappointing for regulators looking for a more material slowing in investor activity although the full impact of macroprudential measures has yet to come through.</p>
<p><span>Details</span><br>Owner–occupiers (no.) 0.5%mth, –4%yr</p>
<p>– ex-financing (no.) 1.9%mth, 3.4%yr</p>
<p>Construction of dwellings (no.) 3.6%mth, 8.9%yr</p>
<p>Purchase of newly built dwellings (no.) 3.5%mth, 10.2%yr</p>
<p>Value of loans:</p>
<p>Owner-occupiers ($bn) 0.3%mth, 1.2%yr</p>
<p>Investors ($bn) 1.6%mth, 5.7%yr</p>
<p>Total ($bn) 0.8%mth, 2.9%yr</p>
<p>Total ex refi ($bn) 1.5%mth, 7.1%yr</p>
<p> </p>
<p><em><span>Matthew Hassan</span> is senior economist with <a href="https://www.westpac.com.au/" target="_blank">Westpac</a>.</em></p>
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Housing finance approvals to owner occupiers edged up in June

<p>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.</p>

<p>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;</p>

<p>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;</p>

<p>“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;</p>

<p>[smartcode_project:default project_id=110291 project_image_fid=302785]</p>

<h2>Affordable product leads, premium demand remains resilient</h2>

<p>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;</p>

<p>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;</p>

<p>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.</p>

<p>Jual (Shenton Park, Celsius Property) also posted a strong quarter with 28 sales, reaching 39% sold in one quarter.</p>

<p>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;</p>

<p>[smartcode_project:default project_id=148957 project_image_fid=364102]</p>

<h2>Prices underpinned by costs, and the delivery risk is growing</h2>

<p>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.</p>

<p>David Cresp said a growing challenge for private Build‑to‑Sell developers is simply securing a builder in the current environment.</p>

<p>“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;</p>

<p>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.</p>

<p>[smartcode_project:default project_id=108869 project_image_fid=317905]</p>

<h2>Supply: improving later, but still constrained, and Perth lags eastern benchmarks</h2>

<p>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;</p>

<p>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;</p>

<p>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”.</p>

<p>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;</p>


Joel Robinson

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

<p><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.</p>

<p>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.</p>

<p>Sammut Director Julian Sammut said the group had been actively searching Brisbane for several years before identifying Toowong as the right fit.</p>

<p>“Brisbane was the right step for Sammut,” Sammut said.</p>

<p>“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.”</p>

<p><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" /></p>

<p>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.</p>

<p>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.</p>

<p>“We are DA approved now which is very exciting,” Sammut said.</p>

<p>“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.”</p>

<p><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" /></p>

<p>Bureau^proberts said the design responds to Toowong’s evolving urban character, balancing contemporary apartment living with the area’s established residential identity.</p>

<p>“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.</p>

<p>The architecture practice said the project’s form was shaped by its riverfront setting, flood considerations, neighbouring building scales, and view corridors.</p>

<p>“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.”</p>

<p>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.</p>

<p>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.</p>


Sammut secures approval for debut Brisbane apartment development in Toowong

<p>Developer Lanevick is heading back into Sydney’s apartment market after focusing more heavily on the luxury townhouse and terrace sector in recent years.</p>

<p>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.</p>

<p>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.</p>

<p>“Traditionally it’s been difficult for people in that market to downsize because there just hasn’t been the right product available,” Maroun said.</p>

<p>“We’re targeting buyers who might have 30 to 40 per cent of their house value sitting in the bank after downsizing.</p>

<p>“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.”</p>

<p>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.</p>

<p>“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.”</p>

<p>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.</p>

<p>“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.”</p>

<p>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.</p>

<p>“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.</p>

<p>Maroun said Lanevick saw a first-mover advantage within the precinct as planning controls continue to evolve to accommodate greater housing density.</p>

<p>“We think there’s a real opportunity there that hasn’t really been serviced properly yet,” he said.</p>

<p>“There’s going to be a broader evolution of the whole Gladesville village precinct over time, particularly with more activation and mixed-use outcomes.”</p>

<p>The Venus Street proposal will include a commercial and retail component at ground level designed to contribute to that evolving streetscape activation.</p>

<p>“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.</p>

<p>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.</p>

<p>&nbsp;</p>


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

<p>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.</p>

<p>The New York-based investor has focused his firm, GreenPoint Partners, on addressing the supply shortage hitting middle market housing in Australia.</p>

<p>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.</p>

<p>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.</p>

<p>“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.</p>

<p>“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.”</p>

<p><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" /></p>

<p>GreenPoint Partners brings years of experience assembling and scaling real estate operating businesses across major markets. And Green sees a big opportunity in Australia.</p>

<p>“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.”</p>

<p>Green said being a builder-developer would give the company the capacity and flexibility it required to deliver reasonably-priced homes.</p>

<p>“We want it to be at that attainable level; not super high end luxury but at that attainable level,” he said.</p>

<p><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" /></p>

<p>&nbsp;</p>

<p>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.</p>

<p>Green praised local policy settings.</p>

<p>“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.”</p>

<p>One Living is also&nbsp;looking at high-density projects and could take on more institutional funding in the future.</p>

<p>“The way we will be able to achieve economies of scale is through size,” Green added.</p>


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

<p>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.</p>

<p>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.</p>

<p>Projects by Buxton Director Heath Thompson, who is selling WM Residences, says the townhouses x that perfect middle ground be</p>

<p data-end="683" data-start="511">"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.</p>

<p data-end="882" data-start="690">"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."</p>

<p data-end="882" data-start="690">[smartcode_project:default project_id=134646 project_image_fid=6109]</p>

<p>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.</p>

<p>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.</p>

<p>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.</p>

<p>[smartcode_project:default project_id=134646 project_image_fid=6110]</p>

<p>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.</p>

<p>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.</p>

<p>[smartcode_project:default project_id=134646 project_image_fid=6116]</p>

<p data-end="247" data-is-last-node="" data-is-only-node="" data-start="0">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.</p>

<p>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.</p>

<p>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.</p>

<p>[smartcode_project_cta:default project_id=134646]</p>


Matthew Hassan

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