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GUEST OBSERVER
As widely expected, the RBA left the official cash rate unchanged at 1.50 percent at its July meeting. The Governor’s decision statement was also largely the same as in June with no substantive changes to the key closing paragraphs and other tweaks mostly minor and even-handed in terms of policy implications.
Indeed, there are only really four changes between the June and July decisions statements:
On commodity prices, last month’s observation that “prices of iron ore and coal have declined over recent months as expected” is dropped with the July statement simply noting the “rise in commodity prices over the past year has boosted Australia’s national income”;
On the global inflation backdrop, the Governor has added a line noting that “wage growth remains subdued in most countries, as does core inflation”;
On growth domestically, the statement seems to take a less positive view: the slowdown in the March quarter which was previously viewed as “reflecting … quarter to quarter variation” now described as only “partly reflecting temporary factors”; consumption growth viewed as subdued and reflecting slow growth in real wages and high household debt; and the line reaffirming the Bank’s positive medium term outlook for growth to increase gradually to “a little above 3 per cent” was dropped (although this may simply reflect the fact that the Bank will be making a full reassessment of its forecasts leading into the August Statement on Monetary Policy).
On labour market conditions, the Governor’s statement removes last month’s observation that “growth in hours worked remains weak”.
The closing three paragraphs – on financial conditions (“outlook … supported by the low level of interest rates”; “an appreciating exchange rate would complicate” the transition following the mining investment boom”); housing markets (varying “considerably around the country”; “additional supply of apartments ... scheduled to come on stream”; “recent supervisory measures should help address risks”); and the policy view (no guidance) – are almost completely unchanged from June.
Notably absent from the Governor’s decision statement is any hawkishness around the medium term policy outlook. With several other developed economy central banks showing a surprisingly hawkish turn of rhetoric in recent weeks the market seemed to toy with the idea the RBA might say something similar – particularly given recent comments from an ex RBA Board member that a significant increase in the cash rate might be required over the medium term to return rates to ‘neutral’.
Also notable in our view is the absence of commentary around labour market slack – aside from solid gains in jobs and hours worked, the May labour force survey also showed a surprise fall in the unemployment rate to 5.5% and in wider measures of labour market slack that include underemployed workers. That suggests the Bank may be wary of making too much of these latest observations, particularly given the more uncertain link to wages growth.
Conclusion
Overall the July decision and Governor’s statement gives little additional information with only incremental changes in commentary. The minutes may provide some additional insight, particularly if medium term policy normalisation issues were discussed. However, we suspect the Bank will continue to hold a pointedly neutral stance on policy guidance.
The August meeting could see a more material review of its commentary, with a key update on CPI inflation due July 26 and the Bank reassessing its economic forecasts ahead of the August Statement on Monetary Policy (due out August 4).
However, even with some potential downgrade to 2018 growth forecasts (Westpac continues to expect growth of 2.5%, well below the Bank’s 3.25% mid-point forecast) none of this is likely to present enough of a case to establish an explicit policy bias. All up, we continue to see no reason to change our current view that the official cash rate will remain on hold throughout 2017 and 2018.
Matthew Hassan is senior economist with <a href="https://www.westpac.com.au/">Westpac</a>.
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Only minor changes to RBA Governor’s decision statement on housing: Matthew Hassan

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The minutes to the RBA’s June monetary policy meeting mainly reiterated the key points from the Governor’s decision statement and the additional ‘message’ from previous minutes – that the Bank’s main focus was on developments in labour and housing markets.
That said, there were some notable details: an intriguing new paragraph on financial stability in the ‘Considerations for Monetary Policy’ section; a slightly more bullish/hawkish discussion of international conditions; and several useful snippets from the detailed discussion including those gleaned from the Bank’s liaison programme.
As per the Governor’s decision statement, the slower growth picture for the March quarter was acknowledged but attributed to “quarter to quarter variation” with the Bank’s positive medium term outlook for growth to rise to a little above 3 percent reaffirmed.
The labour market commentary in the minutes was perhaps a little more positive than in the Governor’s statement which explicitly described indicators as “mixed”. The minutes do not use this particular term although the rest of the discussion is the same. Note that the RBA meeting took place well before the surprisingly strong May labour force report released last Thursday.
The more constructive view around business investment that appeared in the decision statement was largely repeated, the detailed discussion downplaying the disappointing forward view from the Capex survey, citing its limited coverage and more positive tone from approvals, liaison feedback and business surveys.
On housing, the decision statement repeated the Governor’s statement comment that price pressures were starting to ease in markets that had seen brisk price rises. The minutes also note that housing credit growth had been steady with some slowing in growth in investor housing credit. However, “APRA’s recent prudential supervision measures … were yet to have their full effect”.
As in both April and May, the minutes concluded with the line that: “the Board continued to judge that developments in the labour and housing markets warranted careful monitoring”. Note that this line does not appear in the Governor’s decision statement, perhaps to avoid the appearance of giving some sort of policy guidance, e.g. these areas warrant monitoring but are not in a situation where they would draw an immediate policy response.
Turning to the ‘notable details’, the new paragraph on financial stability added to the ‘considerations’ section notes this aspect of the RBA’s role sits within its wider medium term inflation targeting framework, the effect of monetary policy decisions within this framework and the role of prudential supervision. It stresses the importance of cooperation and coordination across agencies facilitated by the Council of Financial Regulators.
While there are no ‘overt’ messages in the discussion, its inclusion is intriguing. Is it, for example, implying that a coordinated approach may also apply if the RBA were to consider additional rate cuts? Alternatively, is it simply restating the clear message the Bank has already given about the importance of financial stability concerns for policy and a broad endorsement of the current status quo?
The June meeting minutes sounded less wary on international conditions and more alert to a potential lift in inflation. Whereas previous minutes regularly noted risks to China around residential property markets and rising leverage in the Chinese economy, this line did not feature in June which ran with simpler observations including that the “recovery in residential construction had continued despite the Chinese authorities having again tightened policy measures aimed at reducing speculative activity”. 
More pointedly, the minutes also note that “globally, headline inflation had picked up” and that while this largely reflects higher oil prices with core inflation still low, “unemployment rates in many major advanced economies had been around or below levels that could be associated with a build-up in wage pressures”, with some signs that both wages growth (increasing in the US and Japan) and growth in unit labour costs (above average in the US, Japan and Germany) may be starting to respond.
The general theme is not new – last month’s minutes included the line that “core inflation was expected to rise gradually in the major advanced economies as spare capacity in labour markets declined further” – but the tone seems more hawkish.
Other useful snippets in the detailed discussion mainly come via the Bank’s liaison programme which included: “retail trading conditions had remained challenging”; “isolated reports of localised and skills-specific labour shortages feeding into higher wages”; and “identified a range of commercial property projects that are under consideration for the year ahead” that have yet to appear in the approvals data.
Conclusion
Monetary policy clearly remains firmly on hold as the Board assesses developments in housing and labour markets. The strong May labour force report released the week after the Bank’s June meeting would have eased some of its concerns on this front, although weak wages growth is likely still a factor (indeed this is one aspect of current conditions that could have received more discussion in the minutes which simply noted the link to consumer incomes and spending). It may also be becoming more comfortable around housing market risks as well although the situation here is clearly still evolving.
Overall there appears to be little shifting the Bank away from its positive medium term view on growth. Westpac’s more downbeat forecast for 2018 – based on a more significant drag from housing construction and falling commodity prices – will take time to become apparent and, in our view, will not be sufficient to draw an RBA interest rate response, particularly given its concerns about potential financial stability risks. As such we remain comfortable with our view that rates will remain on hold for the remainder of 2017 and 2018.
Matthew Hassan is senior economist with <a href="https://www.westpac.com.au/" target="_blank">Westpac</a>.
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Interesting detail in June RBA minutes: Matthew Hassan

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GUEST OBSERVER
The March housing finance approvals report was largely in line with expectations.
The number of approvals for owner occupier loans dipped 0.5 percent/mth but were flat ex refi. The consensus forecast was for a flat result. Approvals ex refi were up 3.8 percent yr. The value of investor loans rose 0.8 percent after a sharp 5.7 percent pull back in Feb, annual growth coming in at 14.2 percent/yr.
<a href="https://www.propertyobserver.com.au/images/2017/05/15/Screen%20Shot%202017-05-16%20at%208.39.38%20AM.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/05/15/Screen%20Shot%202017-05-16%20at%208.39.38%20AM.png" alt="">
All up the data was largely as expected – note that the latest round of macro prudential tightening was only announced in late March with impacts likely to come through in Apr-Sep. That said, the more moderate reads on investor loans in Feb-Mar suggest lenders were already reining activity in this segment to keep within APRA’s existing 10 percent limit on investor credit growth (i.e. growth in the total stock of loans).
 
<a href="https://www.propertyobserver.com.au/images/2017/05/15/Screen%20Shot%202017-05-16%20at%208.40.34%20AM.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/05/15/Screen%20Shot%202017-05-16%20at%208.40.34%20AM.png" alt="">
The detail showed, ex refi, a solid gain in owner occupier approvals in NSW (+2.9 percent/mth) offset by falls in the other major states ranging from –1.3 percent/mth in Vic and –1.8 percent/mth in SA to –3.4 percent/mth in Qld and –4.4 percent/mth in WA. Annual growth remains positive for all states except WA.
Construction-related finance approvals posted a solid 4.3 percent/mth rise led by a 10 percent bounce in finance for the purchase of newly built dwellings (which includes apartments and ‘off the plan’ purchases). This segment showed a similar sized fall in Feb.
The total value of loans ex refi rose 1.3 percent, partially reversing Feb's 2.2 percent fall. Annual growth edged up to 10 percent.
<a href="https://www.propertyobserver.com.au/images/2017/05/15/Screen%20Shot%202017-05-16%20at%208.41.36%20AM.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/05/15/Screen%20Shot%202017-05-16%20at%208.41.36%20AM.png" alt="">
More recent data from weekly auction activity suggests housing market conditions steadied a touch in Apr-May after cooling off earlier in the year from a very strong finish to 2016. Auction volumes remain high although turnover via other channels looks to be very weak. Note that these measures only provide meaningful gauges for the Sydney and Melbourne markets.
Looking ahead, the exact impact of new regulatory guidelines is unclear. The specific limit for investor credit growth was unchanged at 10 percent although lenders were instructed to keep growth 'comfortably below' the target. The main new measure was a 30 percent limit on the 'interest only' share of new loans (currently running at 38  percent overall and 65 percent of investor loans), particularly those with high LVRs.
<a href="https://www.propertyobserver.com.au/images/2017/05/15/Screen%20Shot%202017-05-16%20at%208.42.29%20AM.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/05/15/Screen%20Shot%202017-05-16%20at%208.42.29%20AM.png" alt="">
Lenders have responded with increased rates on both investor and owner occupier loans with larger increases for 'interest only' products (+30bps on average for investor loans, +15bps for owner occupier loans). It remains to be seen how borrowers react but the mix suggests both owner occupier and investor finance approvals will be impacted, perhaps with some 'product switching' refinance flows in the mix as well. 
Matthew Hassan is senior economist with <a href="https://www.westpac.com.au/">Westpac</a>.
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Approvals for owner occupier loans dip: Matthew Hassan

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GUEST OBSERVER
The minutes of the Reserve Bank Board’s March monetary policy meeting conveyed a more downbeat tone than the Governor’s decision statement, the commentary sounding a little more concerned about labour market conditions, household incomes and risks in the housing market.
Recall that the Governor’s decision statement included a mix of positive and negative changes vs February – business and consumer confidence at or above average and the global backdrop more constructive but the picture around household incomes and labour markets less encouraging. Changes to the commentary on housing were limited to a note that “supervisory measures have contributed to some strengthening of lending standards.”
The fuller discussion in the minutes presents a little differently. 
The Bank’s central case is still constructive: “Looking forward, year-ended growth … expected to pick up gradually to be above its potential rate over the forecast period” with spare capacity expected to decline slowly and underlying inflation to gradually rise.
The global backdrop is also noted as a clear upside with a marginally more constructive view on commodity prices (“the recent improvement in global demand suggested that higher commodity prices could be more persistent than previously anticipated”).
However, links back to domestic demand are again questioned with the boost to mining sector profits seen flowing more to dividends than spending with significant ‘leakage’ to non-resident shareholders. Interestingly, comments in the detail also note that “the terms of trade had played an important role in households’ saving and spending decisions” in recent decade, perhaps suggesting that the Bank suspects any ‘windfall’ gains for consumers may tend to be saved rather than spent.
The overall theme is still of upside risks from global growth and commodity prices near term but a likely muted pass through to local conditions and question marks beyond 2017.  
Business and consumer confidence rates less of a mention, with just a watered down comment “household perceptions of their personal finances had also been around average”. The Westpac-Melbourne Institute Consumer survey has shown a material weakening in this component in recent months.
The minutes seem much less certain about labour markets. For example, whereas the Governor’s decision statement noted “forward–looking indicators point to continued expansion in employment over the year ahead” the minutes are more tentative saying they “suggested that there could be some pick-up in employment growth near term“ also suggesting that the labour market “may not be quite as strong as the headline employment and unemployment rate figures indicated”.
The minutes strike a different tone on housing as well, referring to “a build-up of risks associated with the housing market”. That language seems a little more urgent. Also notable is the link drawn between incomes and housing risks:”… household income growth had been low, which, if it were to persist, would have implications for consumption growth and the risks posed by the level of household debt.”
Members also noted that “although credit growth was lower than in previous decades, it had been faster than the subdued growth in household incomes”.
This is important from the point of view of potential changes to macro-prudential policy. Recall that the main ‘macro’ measure introduced in the 2014-15 changes was a 10 percent guide for annual growth in investor credit. In considering the risks around household debt levels, the RBA is really thinking in terms of leverage, i.e. the ‘debt to income ratio’.
Under this framework, if incomes are now seen as growing at a permanently slower pace then the trajectory for credit growth would need to be lowered. The RBA’s next Financial Stability Review, due April 13 may provide more elaboration on these comments. 
Conclusion
While still presenting a constructive growth view on global and local growth prospects, the minutes to the March RBA meeting place more emphasis on weaknesses around labour markets and the consumer and downplay the potential upside from rising commodity prices. They also sound a touch more urgent around risks in the housing market. 
That mix points to an RBA that is slightly more dovish stance on rates but potentially mulling ‘macro-prudential’ policy changes to manage risks. 
Matthew Hassan is senior economist with <a href="https://www.westpac.com.au/" target="_blank">Westpac</a>.
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RBA shows a little more concern around housing risks: Matthew Hassan

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GUEST OBSERVER
Approvals rose 1.8 percent in Jan, retracing most of a downwardly revised 2.5 percent fall in Dec.
The result was above market expectations of a 0.5 percent dip.
As always, January housing data should be treated with extra caution as the summer low season amplified what are already volatile month to month estimates.
Adding to this, the detail showed the Jan monthly gain was driven by ‘units’ – the lumpier, more volatile component up 6.2 percent/mth. In contrast, private detached house approvals were down 3 percent.
Looking by state, the rebound was led by a 24 percent jump in NSW, again suggesting volatility and seasonal adjustment are exaggerating the picture here.
Notably, the weakness in private sector house approvals was broadly-based with all the major eastern states recording declines. 
Details  Private houses  -3%mth, -9.4%yr Private 'units'    6.2%mth, -14%yr          
NSW     24%mth, 9.4%yr Vic       -5.3%mth, 1.5%yr Qld       -11.9%mth, -45.4%yr WA       3.5%mth, -21.8%yr SA        6.5%mth, -16.9%yr       
Alteration &amp; additions^   -17.7%mth, 2.4%yr Non-residential^                         -14%mth, -13.8%yr ^ value 
Matthew Hassan is senior economist with <a href="https://www.westpac.com.au/" target="_blank">Westpac</a>.
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Australian dwelling approvals approvals rise 1.8 percent in Jan: Matthew Hassan

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GUEST OBSERVER
Despite another modest lift this month consumer sentiment remains below its October-November levels.
At just below 100 the Index is in slightly pessimistic territory with consumers reporting family finances under pressure and a mixed outlook for the economy.
All components of the headline Index improved this month. The sub-index tracking views on ‘family finances vs a year ago’ posted the biggest gain, up 4 percent but coming from a weak starting point after a 10.6 percent slide over the previous three months.
The sub-index tracking expectations for ‘finances over the next 12 months’ has been steadier in recent months, posting a small 1.1 percent gain in February. On a combined basis, consumer views on family finances are still down 6.5% on a year ago and are 5.4 percent below their long run average.
<a href="https://www.propertyobserver.com.au/images/2017/02/16/Screen%20Shot%202017-02-16%20at%208.23.29%20AM.png" target="_blank">Click to enlarge</a>
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Consumers are more positive on the economy. Near term expectations posted a solid gain, the ‘economic conditions, next 12 months’ sub-index up 2.8 percent, recovering all of the ground lost following the surprisingly weak September quarter national accounts. 
Recent commentary from the RBA may have helped ease concerns with the Bank re-affirming it positive growth outlook. Consumers are less convinced about medium term prospects though, the ‘economic conditions, next 5 years’ sub- index posting a milder 1.6 percent gain to be only slightly above its long run average read. 
Consumers are a little more inclined towards making major purchases. The ‘time to buy major household item’ sub-index rose 2.2 percent, building on a 4.9 percent bounce in January to be back near November levels. The rebound is a hopeful sign that the soft patch in retail sales late last year has not extended into 2017. 
While sentiment improved in February, the month saw renewed labour market concerns. The Westpac Melbourne Institute Unemployment Expectations Index rose 3.1 percent, the higher read meaning more consumers expect unemployment to rise in the year ahead. 
Notably, consumers are also wary about the outlook for interest rates. In our special question around the outlook for mortgage rates, 60 percent of respondents rates to be higher in 12 months; 35 percent expect rates to be steady; and just 5 percent expect further rate cuts. That compares to just 37 percent expecting higher rates when the question was last run back in August. 
Concerns about potential interest rate increases may have impacted sentiment towards housing. The ‘time to buy a dwelling’ index fell sharply, declining 7.8 percent. The index is now at its lowest 
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level since May 2010 when the RBA was near the end of its last tightening cycle. Victoria, Queensland and WA all recorded 10 percent plus declines in the month although the NSW Index remains the weakest across the states. The fall points to a shaky start to the new year for housing markets. 
Most consumers still expect house prices to move higher. The Westpac Melbourne Institute Index of House Price Expectations rose 0.1 percent, holding on to last month’s 11 percent bounce. Over 64 percent of consumers expect price gains over the next 12 months compared to just 39 percent this time last year. In NSW and Victoria, where market conditions and price gains have been strongest, 70–75 percent of consumers expect prices to rise further in 2017 with one in ten expecting double digit price growth. 
The Reserve Bank Board next meets on March 7. We expect the Board will again decide to keep the official cash rate on hold. Recent commentary clearly sets out the Bank’s current policy approach. That is, to hold rates steady in anticipation of a gradual lift in growth and inflation while imbalances in the housing market remain contained. We expect this thinking will be sustained throughout 2017, being supported by a rising terms of trade, a peaking construction cycle and a gradually falling unemployment rate with rates remaining on hold. 
We expect a similar policy stance in 2018 despite clear preferences in the market for the beginning of a tightening cycle. Indeed, Westpac’s view of a slowdown to below trend growth pitches the risks to the ‘on hold’ call in 2018 to the downside, in clear contrast to current market views.
Matthew Hassan is senior economist with <a href="https://www.westpac.com.au/">Westpac</a>.
 
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Consumer sentiment posts modest lift: Matthew Hassan

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GUEST OBSERVER
Retailers enjoyed a rare gain in August, sales lifting 0.4 percent in the month, the result coming in a touch above Westpac’s 0.3 percent forecast and the consensus expectation of a 0.2 percent gain.
While a win vs expectations and the best monthly gain since October last year, that is not saying much – ‘par’ for retail sales is about 0.5 percent a month.
Annual sales growth is still running at an insipid 2.8%yr with trend sales growth tracking an even poorer 1.7 percent annualised pace.
The detail was in line with expectations as well. As mentioned in our preview, July sales were ‘held back’ by an abnormally large 5.8% fall for department stores that reflected the earlier timing of winter sales. Sales in this category rebounded 3.5 percent in August – ‘normalising’ but still to a weak underlying trend reflecting the specific challenges facing this type of retailing.
Across the other categories: food was up 0.3 percent and household goods up 0.2 percent (another disappointing read given the current boom in housing construction that should be boosting spending in housing related categories).
Both clothing (–0.4 percent/mth) and ‘other’ retail (–0.6 percent/mth) had a soft August. However cafes and restaurants saw another solid gain up 1.2 percent/mth following a 1.4 percent rise in July.
By state, better gains for NSW (0.5 percent), Vic (0.7 percent), Qld (0.7 percent) were partially offset by a 0.5 percent fall in WA.
Matthew Hassan is senior economist with <a href="https://www.westpac.com.au/" target="_blank">Westpac</a>.
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Australian retail sales growth still insipid: Westpac's Matthew Hassan

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Dwelling approvals were stronger than expected in April, posting a 3 percent rise against expectations of a 3 percent fall.
Approvals have risen 6 percent over the last 2mths with the monthly trend rate lifting back to 1.2 percent, an double-digit annualised pace.
However, the detail carries a strong warning that this renewed uptrend is unlikely to sustain and may be prone to a sharp reversal in coming months. 
All of the gain is coming from a resurgence in ‘high rise’ approvals, up an estimated 16% in April alone and nearly 40% since Feb (Westpac estimates of seasonally adjusted approvals).
That is unlikely to continue both in light of the segment’s typically ‘lumpy’ monthly profile and its exposure to investor activity – a segment currently coming under additional pressure from tightening lending conditions domestically and efforts to rein in non-resident purchases.
Meanwhile, other segments are looking much more subdued: private detached house approvals declined 2.3 percent mth and ‘low-mid-rise’ unit approvals posted a small rise but coming off a sharp fall in March (Westpac estimates of seasonally adjusted approvals).
The state detail shows the high rise increase was concentrated in NSW and Qld.
Ex high-rise, approvals are showing tentative signs of stabilising in NSW and WA and are continuing to track higher in Qld and Vic, giving a very mixed read on trends overall.  The value of renovation and non res building approvals both posted strong gains in April, lifting trend growth into strong positive for renovations but just flat for non res building.
Overall, approvals continue to surprise to the upside but the detail is much less positive given the extent to which high rise approvals are driving gains. Details  Private houses  –2.3%mth, –8.9%yr      
Private 'units'    8.7%mth, 13%yr                       
NSW     10.4%mth, 18.8%yr   Vic       –2.7%mth, –4.6%yr   Qld       6.7%mth, 16.8%yr     WA       –0.6%mth, –28.4%yr SA        13.7%mth, 30%yr                  
Alteration &amp; additions^   18.7%mth, 13.7%yr     Non-residential^                         47.3%mth, 32.4%yr       ^ value      
 
Matthew Hassan is senior economist with <a href="https://www.westpac.com.au/" target="_blank">Westpac</a>.
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High-rise resurgence offsetting slowdown in other housing segments: Westpac's Matthew Hassan

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Australian housing finance approvals firmed in Dec. The number of new approvals for owner occupiers rose 2.6%, broadly in line with market expectations and consolidating on a 1.9% gain in Nov to be up 9.8%yr. Ex-refi, the number of 'new' loan approvals was up 1.6%mth, 4.6%yr.
Note that changes in lending criteria and borrowing rates for investor loans is indirectly boosting owner occupier activity. Although the bulk of the initial ‘switching’ effect seemed to come through between June and Sep. On the other side of this effect, the value of loans to investors dropped 19% between April and Oct but stabilised in the closing months of 2015, rising 1% in Nov and a further 0.6% in Dec (though still down 13.6%yr).
The total combined value of loans – our preferred gauge of housing demand at the moment given the aforementioned category switching – was up 0.8%mth, 6.4%yr. Growth is significantly flatter once refinance is excluded – the value of refi approvals surged 36% over the year to Dec 2015, accounting for almost all of the growth in the total value of new loans (ex refi, the value of loans is up just 0.2%yr).
Construction-related finance approvals posted a particularly strong month, up 5.2%mth led by 12.4% jump in approvals for the purchase of newly-built dwellings, which incudes 'off the plan' purchases. Note that many of these loans will be post the completion of building rather than a forward indicator of future work. That said, loans for construction were also up 1.8%mth, suggesting a degree of resilience outside the 'high rise' segment that has driven the declinein dwelling construction approvals to date.
Unfortunately, the state detail from the report is of limited use as the value of investor loans and total loans is not available until additional data is published next week. That said, the number of owner-occupier loans ex refi is showing strong gains across both NSW and Vic, with WA the only state showing material weakness.
Overall the picture is of some stabilisation after a sharp investor-led softening over the second half of last year. This weekend’s auction results will be the first meaningful reading on how much this may have carried into 2016. This week's update on consumer sentiment showed assessments of 'time to buy a dwelling' at still weak levels, albeit with some improvement in NSW &amp; Vic. Price measures hint at some firming in recent months although the summer holiday hiatus makes this and other housing data notoriously unreliable over Jan-Feb period.
Matthew Hassan is senior economist with <a href="https://www.westpac.com.au/" target="_blank">Westpac</a>.
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Australian housing finance December 2015: Westpac's Matthew Hassan

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GUEST OBSERVER
Dwelling approvals posted a better than expected rebound in Dec with a surprisingly strong rise in detached house approvals aiding an expected partial recovery in units from a big fall in Nov. Total approvals rose 9.2%, well above the consensus expectations of +4%. While approvals are still down 4.3% over the 2mths, the Dec detail was positive.
In particular, private detached house approvals posted a surprisingly strong 5.4% gain (+4.5%yr). This segment is typically more stable than total approvals and for most of 2015 was drifting lower at 0.6% a month. The gain accounted for the upside surprise vs expectations in Dec.
In contrast, the ‘other housing’ segment, i.e. units, posted a solid 12.8% rebound in line with expectations following the 22% slump in Nov (approvals down 6.5%yr). The detail shows a ‘modest’ partial rebound in high rise approvals (we estimate +12% in seasonally adjusted terms vs a 33% drop in Nov) with a slight gain in ‘low-mid-rise’ approvals. Interestingly, on a combined basis, detached housing and non-high rise units are now showing a reasonable uptrend running around +4% in annualised terms.
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Looking by state, the bulk of the monthly volatility was in Vic which whipped around ±35% in Nov-Dec. Approvals posted a solid 2.1% gain in NSW, pulled back 4.6% in Qld (though following a strong gain in Nov) and jumped in WA (though still down 29%yr). The state detail on detached houses showed gains in all states with a very strong 13.9% surge in Qld. The latter suggests some of the Dec gain in total detached housing could be an anomaly (Qld accounted for 2.1ppts of the 5.4%mth surge). 
The value of renovation approvals rose 3.5% in Dec to be up 11%yr, a reasonably solid uptrend in place albeit heavily concentrated in NSW where approvals recorded a big jump in Dec (+9.8%mth, +28.6%yr).
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In stark contrast, the value of non res building approvals continues to bump around a weak level with unconvincing momentum. A 6.1% fall in Dec left approvals flat vs a year ago with quarterly results suggesting activity will pull back sharply once current projects start to wind down.
Looking at 2015 as a whole, the calendar year saw a record 232k dwellings approved, a 13.7% jump on 2014 and blitzing previous records (prior to 2014, the record high was 201k in 1973). For the first time ever there was virtually a 50:50 split between detached houses and unit approvals with the latter accounting for almost all of the growth in the year.
The Dec report showed a better than expected finish to the hear, also hinting at some residual momentum in non-high rise sectors holding the construction cycle up. More generally, the concentration of units and longer time required for these projects points to another significant leg higher in actual construction work before an eventual peak comes in late 2016.
Matthew Hassan is senior economist with <a href="https://www.westpac.com.au/" target="_blank">Westpac</a>.
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2015 saw a record 232,000 dwellings approved: Westpac's Matthew Hassan

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.

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.

Construction has commenced, with completion currently estimated for late 2027. Three-bedroom residences are priced from $1.8 million.

[smartcode_project:default project_id=150999 project_image_fid=374005]

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.

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.

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.

[smartcode_project:default project_id=150999 project_image_fid=374010]

Resident amenity is concentrated at rooftop level, where landscaped entertaining terraces and pools take advantage of elevated views across Coolangatta and the Pacific Ocean.

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.

“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.

[smartcode_project:default project_id=150999 project_image_fid=374002]

“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.”

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.

[smartcode_project_cta:default project_id=150999]

Joel Robinson

Maréa Residences brings parkside apartments to Coolangatta

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.

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.

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.

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.

<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" />

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.

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.

A significant component of The One will be its residential amenity.

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.

The planning approval also incorporates a major upgrade of Queensbridge Square, which PDG will deliver in partnership with the City of Melbourne.

<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" />

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.

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.

“This is the most significant Planning Permit approval Melbourne has seen in recent years,” Giuliano said.

“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.”

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.

PDG has also started generating early interest in the residential component from owner-occupiers ahead of a planned public launch in early 2027.

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

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.

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.

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.

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.

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.

&nbsp;

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.

Wooloongabba has been popular for apartment developers, particularly since the announcement of the 2032 Summer Olympics games in Brisbane.

While there have been a lot of development applications, it has failed to materialize into real supply.&nbsp;

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>.

First look: Harridan plans Burke Street transformation beside Boggo Road transport hub

IN BRIEF

<ul>
	<li>
	Just three double-storey Sky Homes sit at the top of The Waterline, each with its own private marina berth and rooftop terrace.
	</li>
	<li>
	Construction on The Waterline is complete, with the first residents expected to move in from mid-October.
	</li>
	<li>
	Sky Homes range from 282 sqm to 367 sqm and are priced from $3.65 million.
	</li>
</ul>

<hr />
Lewis Land has opened the first completed sky home for inspection at Harbour Shores, giving buyers their first opportunity to step inside one of just three double-storey residences crowning The Waterline.

Each sky home comes with its own private marina berth, rooftop terrace and Broadwater views, combining the scale of a larger home with direct access to the boating lifestyle that underpins the wider <a href="https://www.apartments.com.au/new-apartments/harbour-shores-biggera-waters-564-oxley-drive-biggera-waters-qld-4216">Harbour Shores</a> masterplan.

[smartcode_project:default project_id=113271 project_image_fid=366708]

Lewis Land Head of Development Michael Long said the inclusion of a berth with every Sky Home had become increasingly valuable as marina access across the Gold Coast tightened.

“Marina berths are becoming increasingly difficult to secure across the Gold Coast, so including one with every Sky Home makes this a genuinely rare offering,” Long said.

“The private 70-berth marina will accommodate boats up to 12 metres in length and is positioned just 2.5 kilometres from the Broadwater, placing the open ocean only 15 minutes away.

“Being able to step out of your home onto your boat is a rare luxury, and it’s something residents here can look forward to when it opens later this year.”

[smartcode_project:default project_id=113271 project_image_fid=366709]

The display opening comes as construction completes on The Waterline, with the first residents expected to move in from mid-October.

The three Sky Homes range from 282 sqm to 367 sqm and each feature three bedrooms, three bathrooms, multiple living zones, expansive kitchens with butler's pantries and large balconies taking in the Broadwater outlook.

Each residence also has three secure basement car spaces and additional storage.

“This is the first opportunity the Gold Coast has had to step into Harbour Shores and see, touch and feel what we’re bringing to life here,” Long said.

“There are only three Sky Homes within The Waterline, ranging in size from 282sqm to 367sqm, with each residence featuring three large bedrooms, three bathrooms, multiple living zones, expansive custom-built kitchens with butler’s pantry, and large balconies capturing Broadwater views.”

<img alt="Harbour Shores" data-entity-type="file" data-entity-uuid="bab65e10-4fab-45e1-92d8-fc56e2ab98ff" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-25%20at%202.00.16%E2%80%AFPM.png?VersionId=XT8q76LsPkw3cYTsvN3JfFDaPLud90PN" />

Residents of The Waterline will have access to a private pool, along with Harbour Shores' wider collection of amenity including a lagoon pool, social clubhouse, tennis court, gym, yoga facilities and sauna.

Lewis Land partnered with Studio Collective to furnish the completed display, with the interiors designed to demonstrate how the residences could function as permanent homes rather than simply as show apartments.

Studio Collective Director Melissa Park said the surrounding waterways informed the interiors, but in a more restrained way than a traditional coastal scheme.

“We drew inspiration from the canals and coastal surrounds, but our approach was to interpret that subtly through layered materials and a grounded palette of earthy tones, rather than literal coastal references,” Park said.

“We introduced hero moments of green and teal to reference the surrounding waterways, while mirrored elements help reflect natural light.

“The result is a residence that feels elevated yet comfortable, somewhere buyers can genuinely imagine themselves living, entertaining and unwinding.”

Sky Homes are priced from $3.65 million.

Lewis Land is also offering private marina berths with The Residences, its limited collection of three and four-bedroom villas positioned directly along the Harbour Shores waterfront boardwalk.

Three-bedroom villas are priced from $2.99 million, while four-bedroom residences start from $3.19 million.

Harbour Shores is being marketed by Colliers International.

[smartcode_project_cta:default project_id=113271]

Lewis Land opens sky home display as The Waterline completes at Harbour Shores

St Vincent de Paul Society Housing Australia has filed plans for a major mixed-use housing precinct on the southern edge of the North Sydney CBD, adding another significant proposal to a pocket around North Sydn​ey Station that is quickly becoming one of the LGA's busiest development zones.

The State Significant Development Application covers a 5,990 sqm site at <a href="https://www.apartments.com.au/new-apartments/1-19-mackenzie-street-lavender-bay-nsw-2060">1-19 MacKenzie Street and 211 Blues Point Road in Lavender Bay</a>, immediately south of Nor​th Sydney Station and between the commercial core and the lower-rise Lavender Bay Heritage Conservation Area.

Designed by Wardle, the proposal would deliver a new residential tower comprising 88 build-to-sell apartments and 19 affordable apartments, alongside a separate co-living building with 57 rooms and a building manager's studio.

It would also see the significant restoration and upgrade of St Francis Xavier Catholic Church, the adaptive reuse of the former school building, new parish facilities, retail, a new public square and around 1,000 sqm of publicly accessible open space.

<img alt="Vinnies North Sydney" data-entity-type="file" data-entity-uuid="d5dd7f87-a617-463e-b577-17541e01f0e9" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-26%20at%209.10.13%E2%80%AFAM.png?VersionId=4R8TsFN3P_LrrXO2HswTOIrx2blil8lh" />

The project is seeking a concurrent rezoning of the site to R4 High Density Residential and an increase in the maximum building height to allow a tower reaching RL120, or up to 20 storeys. The proposal was progressed through the NSW Government's Housing Delivery Authority pathway.

The build-to-sell component will be weighted toward larger apartments, with just six one-bedroom apartments compared with 31 two-beds, 43 three-beds and eight four-bedroom residences.

The 19 affordable apartments will comprise two studios, 15 one-bedroom apartments and two two-bedroom apartments, taking the total apartment component to 107 residences before the 58 co-living rooms are included.

<img alt="Vnnies" data-entity-type="file" data-entity-uuid="7d568ca5-cb90-4e18-96c6-d9795dba0c56" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-26%20at%209.10.05%E2%80%AFAM.png?VersionId=GY2R5M9VtQh0EKy1vajaea19PSLOPuRD" />

Wardle's design for the Vinnies site has sought to negotiate that emerging high-rise context while retaining the lower-scale character of MacKenzie Street and the adjoining heritage conservation area.

The main building adopts a three-storey podium and tower arrangement, with the podium aligned to the ridgeline and front setback of St Francis Xavier Church.&nbsp;Wardle has designed the podium with colonnades, seating, recessed entries and active ground-floor frontages, with sandstone-toned precast concrete and face brick referencing the materiality of the existing church.

The tower then steps back eight metres to the south and six metres to the north before rising in a sculpted form comprising four interlocking quadrants. Wardle has also introduced rounded forms and chamfered corners to reduce the tower's perceived bulk and improve view sharing with neighbouring development sites.

Resident facilities and outdoor areas are planned at the separation between the podium and tower at Level 3, oriented toward Sydney Harbour and the CBD skyline.

The tower itself will feature a glass reinforced concrete facade, with recessed balconies and deep reveals used both to provide shading and privacy and frame views toward the harbour and city. The lower levels take a different architectural approach, using brick and sandstone-toned finishes intended to establish a stronger relationship with St Francis Xavier Church. The Church itself will be conserved and upgraded for its continued use, while the former school building will be adaptively reused as part of the co-living component.

<img alt="Lavendar Bay" data-entity-type="file" data-entity-uuid="2d4418ad-90aa-4d49-af93-c80b140aea80" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-26%20at%209.09.47%E2%80%AFAM.png?VersionId=Kv4gzbsACaGvZSRuaqcfGC54jEJRXIDJ" />

&nbsp;

The proposal adds to an increasingly concentrated pipeline of residential development around Blue Street, MacKenzie Street and Lavender Bay.

Just west of the site, Central Element lodged plans earlier this year for one of the most significant residential developments proposed in Lavender Bay in recent years.

Central Element's SJB-designed scheme at 64-66 Lavender Street and 3-7 Middlemiss Street would deliver 163 apartments across two towers rising 23 and 32 storeys, replacing five existing apartment buildings containing 32 homes. The project also forms part of the Housing Delivery Authority pathway.

<a href="https://www.apartments.com.au/news/nsw/first-look-central-element-reveals-lavender-bay-apartment-plans?utm_source=chatgpt.com" rel="noopener" target="_blank">First look: Central Element reveals Lavender Bay apartment plans</a>

Immediately around North Sy​dney Station, another two significant proposals have emerged at 5 and 15 Blue Street.

Zurich Australian Insurance Properties is seeking to adaptively reuse its longstanding commercial building at 5 Blue Street, directly above North Sydney Station, rather than demolishing the structure.

Its SSDA proposes converting the building into a 14-storey mixed-use development with 62 apartments and 86 co-living rooms, together with ground-floor retail and a major refurbishment of Blue Street Plaza. The application is currently at the Response to Submissions stage.

<a href="https://www.apartments.com.au/news/nsw/first-look-zurich-targets-north-sydney-office-conversion-with-148-unit-proposal-above-metro-station">First look: Zurich targets North Sydney office conversion with 148-unit proposal above Metro station</a>

&nbsp;

Matthew Hassan

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