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<h1>Minutes of the Monetary Policy Meeting of the Reserve Bank Board</h1>
Sydney – 5 December 2017
<h2>Members Present</h2>
Philip Lowe (Governor and Chair), Guy Debelle (Deputy Governor), Mark Barnaba AM, Kathryn Fagg, Ian Harper, Allan Moss AO, Carol Schwartz AM, Catherine Tanna
Nigel Ray (Deputy Secretary, Macroeconomic Group, Treasury) attended in place of John Fraser (Secretary to the Treasury) in terms of section 22 of the <cite>Reserve Bank Act 1959</cite>.
<h2>Others Present</h2>
Luci Ellis (Assistant Governor, Economic), Christopher Kent (Assistant Governor, Financial Markets), Alexandra Heath (Head, Economic Analysis Department), Ellis Connolly (Deputy Head, Domestic Markets Department)
Anthony Dickman (Secretary), Andrea Brischetto (Deputy Secretary)
<h2>International Economic Conditions</h2>
Members commenced their discussion of the global economy by noting that growth in global industrial production was likely to have increased further in October. The pick-up had been broadly based geographically. Survey measures suggested that conditions in the manufacturing sectors of Australia's largest trading partners had continued to improve; conditions in the services sectors of the major advanced economies had remained favourable. The strength of industrial production in the high-income economies of east Asia had been associated with very strong growth in exports of electronics, specifically of semiconductors. The strength of demand in electronics-related industries had supported business investment and GDP growth in the region, particularly in South Korea.
GDP growth in the major advanced economies had been above potential, supported by accommodative monetary policies. Members noted that recent growth outcomes for the euro area had been stronger than expected. Growth in business investment had picked up in the major advanced economies over the prior year and further solid growth was anticipated over coming quarters. Consumption growth had remained above average, supported by robust growth in employment.
Conditions in labour markets in a number of major advanced economies had continued to tighten. Employment-to-population ratios had increased and unemployment rates had declined to low levels in Japan, Germany and the United States, among other advanced economies. Members noted that this implied there was limited spare capacity in these economies, based on conventional measures of full employment. However, wage growth had picked up only slightly. While observing that there were typically lags between labour markets tightening and wage pressures emerging, members noted that the wage data might suggest these economies had more spare capacity than implied by conventional measures. More generally, members noted that the nature of work was evolving, driven partly by technological change, and that not everyone was benefiting equally from the recent strength in labour demand. Low wage outcomes had contributed to core inflation in the major advanced economies remaining low, even though producer price inflation had been noticeably higher.
In China, GDP growth had been stronger than expected over the first three quarters of 2017, but more recently growth looked to have eased. This was particularly true of residential construction activity in cities where the authorities had implemented policies to address buoyant housing market conditions. The output of some sectors producing inputs for the construction sector, such as glass and steel products, had fallen in preceding months. Production shutdowns designed to deal with environmental concerns had also affected crude steel production. In combination, these factors had led to some levelling off of Chinese bulk commodity imports, including from Australia. Despite this, spot prices for iron ore had increased over the previous month and Chinese producer price inflation had remained elevated, partly reflecting stronger commodity prices. Although consumer price inflation in China had edged higher, it remained below the authorities' objective of 3 per cent in 2017.
<h2>Domestic Economic Conditions</h2>
Members commenced their discussion of the domestic economy by noting that the wage price index continued to suggest that wage growth had been stable at a low rate. The outcome for the September quarter had been slightly lower than expected, despite the 3.3 per cent increase in award and minimum wages in the quarter, as previously determined by the Fair Work Commission. (The award system directly covers around one-quarter of the workforce.) Wage growth in the health and education sectors remained above the national average and a number of sectors had seen an increase in year-ended wage growth compared with a year prior. This had occurred at the same time as spare capacity appeared to have declined and more firms had been reporting difficulty finding suitable labour. The forecast was still for wage growth to increase gradually over the next year or so.
Labour market conditions had remained positive and had been stronger than expected over the previous year. Employment had increased a little in October and growth over the previous year had been well above average. Full-time employment had risen sharply and was growing at around its fastest pace in a decade. The participation rate was notably higher than a year earlier, particularly for women and older workers, who had been staying in the labour force for longer. The unemployment rate had edged lower to be 5.4 per cent in October, which was its lowest level since 2013, and unemployment rates had been on a downward trend in most states. Forward-looking indicators of labour demand suggested employment growth would be somewhat above average over the next few quarters.
Members noted that the September quarter national accounts would be released the day after the meeting and that recent data suggested GDP growth over the year to the September quarter was likely to have picked up to around the economy's potential growth rate.
Information on components of household consumption indicated that growth in aggregate household consumption had moderated in the September quarter; growth in retail sales volumes and motor vehicle sales to households had been subdued. The growth in the value of retail sales in October was consistent with reports from the Bank's liaison suggesting that moderate growth in consumption had continued into the December quarter.
Dwelling investment was expected to have fallen marginally in the September quarter. Dwelling investment had fallen over the preceding year in Queensland and Western Australia, but had remained at a high level in New South Wales and Victoria. Residential building approvals had picked up in preceding months, but remained below the levels of a few years earlier. Together with data on the pipeline of work yet to be done, this suggested that dwelling investment would remain at a high level for the following year or so, but that it was not likely to add materially to GDP growth.
Conditions had eased in the established housing market, most noticeably in Sydney, where housing prices had declined in prior months and auction clearance rates had fallen. Housing price growth had also eased in Melbourne, but remained relatively strong, supported by high population growth. Housing prices in Perth and Brisbane had been little changed in preceding months.
Members observed that business conditions in the non-mining sector had been above average for most industries over the preceding year or so and that non-mining profits had been increasing. Non-mining business investment looked to have risen further in the September quarter and the prospects for continued growth were positive: investment intentions had been revised higher, particularly for the business services sector; survey measures of capacity utilisation had remained well above average; and private non-residential building approvals had remained strong. Mining investment looked to have been little changed in the September quarter, although declines were still anticipated over the next few quarters.
Growth in public investment had picked up over the preceding few years, driven by infrastructure investment. Further growth was expected over the following couple of years, based on projections in state and federal budgets. Members considered macroeconomic modelling of a scenario under which public investment was higher than forecast for the following three years. The demand effects of this scenario included the direct contribution to GDP growth of higher public investment, as well as the multiplier effects through higher profits earned by private sector firms and the higher incomes earned by workers on these projects. Members noted the possibility of ‘crowding out’ of other forms of demand, but did not consider this a major risk given that the economy was currently operating with a degree of spare capacity and inflation was low. Indeed, a sustained pick-up in spending on public infrastructure could even ‘crowd in’ additional investment by the private sector firms undertaking those projects on the public sector's behalf. Members also noted that the higher level of infrastructure investment could boost productivity in the economy.
<h2>Financial Markets</h2>
Members noted that conditions in financial markets generally had been little changed over the previous month, with volatility having remained at a low level throughout 2017. Financial conditions generally remained very accommodative, despite the gradual withdrawal of monetary stimulus in some economies over 2017. However, there had been a noticeable tightening in financial market conditions in China over the year, including in response to regulatory measures.
Market pricing suggested that market participants expected the US Federal Open Market Committee (FOMC) to increase the federal funds rate at its December meeting, consistent with the median of FOMC members' projections. However, market pricing continued to suggest a more modest increase in the federal funds rate over 2018 than implied by the median FOMC projection. Members noted that previously announced changes to the composition of the FOMC had not affected market analysts' expectations regarding the stance of US monetary policy. Regulations – particularly on smaller financial institutions – were under review, although members noted that core reforms relevant to capital, liquidity, stress testing and resolution planning were likely to be preserved.
Members observed that the yield on long-term US government bonds had been little changed over preceding months, whereas the yield on shorter-term US government bonds had increased. This in part reflected expectations for an increase in the federal funds rate and the US Treasury shifting its issuance towards securities at shorter maturities. Long-term government bond yields in other major financial markets had also generally remained little changed at low levels.
Members noted that while yields on Australian 10-year government bonds had been little changed, their spread to US Treasury bond yields had declined to a low level over preceding months.
Financing conditions remained favourable for corporations across major markets. Although spreads of high-yield corporate bonds to government bonds had increased a little in November, they remained at very low levels. Also, equity valuations remained high, having risen over 2017, although there had been small declines in some markets over November.
There had been little change in most major exchange rates over November. The US dollar had appreciated a little since early September on a trade-weighted basis, reflecting increased prospects for both future increases in the federal funds rate and US fiscal stimulus. Members noted that while the Australian dollar had depreciated by around 5 per cent in trade-weighted terms over this period, it had moved within a relatively narrow range over the previous two and a half years and was a little higher than the level of early 2016.
In China, a broad range of policy actions had contributed to a tightening in financial market conditions since late 2016 and a reduction in leverage within the financial system. Recent regulatory announcements had been directed towards managing risks in the shadow banking sector. Members noted that Chinese equity valuations had risen strongly over 2017, but had fallen somewhat in November after the authorities had signalled their concern that some stocks were overvalued.
In Australia, housing credit growth had eased a little over the second half of 2017, as growth in lending to owner-occupiers had slowed somewhat and growth in lending to investors had stabilised at a lower level than in the first half of the year. The easing in housing credit growth had been accounted for by the major banks, which had been more affected by the need to restrain interest-only lending to comply with the supervisory measures announced earlier in the year. Growth in housing lending by non-authorised deposit-taking institutions (non-ADIs) had picked up, although these institutions' share of overall housing lending remained small. Members noted that these lenders charged higher interest rates on average than ADIs, which is likely to reflect both the borrower risk profile and higher funding costs of non-ADIs.
Issuance of residential mortgage-backed securities, which are an important source of funding for non-ADIs, had been strong in 2017 and pricing of these securities had declined a little. Major banks' funding costs had declined a little over 2017 and long-term debt funding had grown relatively strongly in the second half of the year.
Members observed that the Australian equity market (on an accumulation basis) had risen in line with global markets over the previous couple of years and that volatility had remained low over the prior year. Australian share prices had been little changed over the preceding month, although banks' share prices had declined, partly in response to lower-than-expected profit increases.
Financial market prices continued to imply that the cash rate was expected to remain unchanged over the following year or so.
Members concluded their review of developments in financial markets with a detailed discussion of Australian businesses' access to finance. They noted that external finance had become available on increasingly favourable terms for large businesses over recent years, with foreign banks having added to competition for large business lending. Nevertheless, business borrowing had grown only moderately, reflecting subdued mergers and acquisitions activity, with investment having been funded largely from internal sources of funds. In contrast, many small businesses continued to find it challenging to obtain finance, particularly in their start-up or expansion phases. Members noted that this was likely to reflect the riskier nature of such lending, but also the less competitive market for small business lending. Participants on the Bank's Small Business Finance Advisory Panel, convened annually, had confirmed the challenges of accessing bank lending. Members observed that equity funding was often more appropriate for the risk profile of start-up businesses, but that there are relatively few avenues for such financing in Australia compared with some other markets. Members were encouraged by the potential for innovations to improve access to finance for small businesses and the willingness of regulators to facilitate these developments, including in the areas of comprehensive credit reporting, open banking and alternative funding platforms.
<h2>Considerations for Monetary Policy</h2>
In considering the stance of monetary policy, members noted that conditions in the global economy had improved over 2017 and that the outlook had also been upgraded. This improvement had been supported by expansionary financial conditions, notwithstanding some withdrawal of monetary stimulus in a number of economies. In the major advanced economies, labour market conditions had continued to tighten, but wage growth and core inflation had remained low. Members recognised that this combination of strength in economic activity and low inflation was a central issue in the global economy. It was possible that this combination could continue for a while yet, but it was also possible that inflation could pick up by more than expected as spare capacity diminished.
Although the global growth outlook had improved, commodity prices and Australia's terms of trade were expected to decline in the period ahead, but to remain at relatively high levels. The Australian dollar had continued to fluctuate within its range of the preceding two and a half years. An appreciating exchange rate would be expected to result in a slower pick-up in domestic economic activity and inflation than currently forecast.
Members noted that the low level of interest rates had been supporting the Australian economy. Recent data suggested that GDP growth had been around its trend rate over the year to the September quarter. Output growth was still expected to pick up gradually over the forecast period. Business conditions were positive and capacity utilisation had remained high. The outlook for non-mining business investment had improved further and the pick-up in public infrastructure investment was also supporting overall growth. However, growth in consumption was expected to have slowed in the September quarter and the outlook for household consumption continued to be a significant risk, given that household incomes were growing slowly and debt levels were high.
Growth in employment, particularly full-time employment, had increased and the unemployment rate had fallen to a four-year low. Although wage growth had been a little lower than expected in the September quarter, it appeared to have stabilised at a low rate. Leading indicators of labour demand had been broadly consistent with continuing strength in the labour market. In these circumstances, spare capacity in the labour market was expected to be absorbed gradually and wage growth was expected to pick up over time.
Housing market conditions had generally eased, especially in Sydney. In the eastern capital cities, a considerable additional supply of apartments is scheduled to come on stream over the next couple of years. To address the medium-term risks associated with high and rising household indebtedness, the Australian Prudential Regulation Authority had introduced a number of supervisory measures earlier in the year and credit standards had been tightened to lower the risk profile of borrowers. Growth in household credit had slowed somewhat, but members agreed that household balance sheets still warranted careful monitoring.
Over the prior year or so, the unemployment rate had fallen and inflation had moved closer to target. Members noted that this had occurred at the same time as risks in household balance sheets had lessened. Recent data had increased confidence that there would be further progress on these fronts over the following year. How far and when stronger conditions in the economy and labour market might feed through into higher wage growth and inflation remained important considerations shaping the outlook. Taking account of the available information, the Board judged that holding the stance of monetary policy unchanged at this meeting would be consistent with sustainable growth in the economy and achieving the inflation target over time.
<h2>The Decision</h2>
The Board decided to leave the cash rate unchanged at 1.5 per cent.
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Dwelling investment remains at a high level but not likely to add materially to GDP growth in 2018: RBA minutes

Residential prices easing in all capitals, but Melbourne remains strong: RBA minutes

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<h1 class="page-title">Statement by Philip Lowe, Governor: Monetary Policy Decision</h1>
At its meeting today, the Board decided to leave the cash rate unchanged at 1.50 per cent.
Conditions in the global economy are continuing to improve. Labour markets have tightened and further above-trend growth is expected in a number of advanced economies, although uncertainties remain. Growth in the Chinese economy is being supported by increased spending on infrastructure and property construction, with the high level of debt continuing to present a medium-term risk. Australia's terms of trade are expected to decline in the period ahead but remain at relatively high levels.
Wage growth remains low in most countries, as does core inflation. Headline inflation rates are generally lower than at the start of the year, largely reflecting the earlier decline in oil prices. In the United States, the Federal Reserve has started the process of balance sheet normalisation and expects to increase interest rates further. In a number of other major advanced economies, monetary policy has become a bit less accommodative. Equity markets have been strong, credit spreads have narrowed and volatility in financial markets remains low.
The Bank's forecasts for growth in the Australian economy are largely unchanged. The central forecast is for GDP growth to pick up and to average around 3 per cent over the next few years. Business conditions are positive and capacity utilisation has increased. The outlook for non-mining business investment has improved, with the forward-looking indicators being more positive than they have been for some time. Increased public infrastructure investment is also supporting the economy. One continuing source of uncertainty is the outlook for household consumption. Household incomes are growing slowly and debt levels are high.
The labour market has continued to strengthen. Employment has been rising in all states and has been accompanied by a rise in labour force participation. The various forward-looking indicators continue to point to solid growth in employment over the period ahead. The unemployment rate is expected to decline gradually from its current level of 5½ per cent. Wage growth remains low. This is likely to continue for a while yet, although the stronger conditions in the labour market should see some lift in wage growth over time.
Inflation remains low, with both CPI and underlying inflation running a little below 2 per cent. In underlying terms, inflation is likely to remain low for some time, reflecting the slow growth in labour costs and increased competitive pressures, especially in retailing. CPI inflation is being boosted by higher prices for tobacco and electricity. The Bank's central forecast remains for inflation to pick up gradually as the economy strengthens.
The Australian dollar has appreciated since mid year, partly reflecting a lower US dollar. The higher exchange rate is expected to contribute to continued subdued price pressures in the economy. It is also weighing on the outlook for output and employment. An appreciating exchange rate would be expected to result in a slower pick-up in economic activity and inflation than currently forecast.
Growth in housing debt has been outpacing the slow growth in household income for some time. To address the medium-term risks associated with high and rising household indebtedness, APRA has introduced a number of supervisory measures. Credit standards have been tightened in a way that has reduced the risk profile of borrowers. Housing market conditions have eased further in Sydney. In most cities, housing prices have shown little change over recent months, although they are still increasing in Melbourne. In the eastern capital cities, a considerable additional supply of apartments is scheduled to come on stream over the next couple of years. Rent increases remain low in most cities.
The low level of interest rates is continuing to support the Australian economy. Taking account of the available information, the Board judged that holding the stance of monetary policy unchanged at this meeting would be consistent with sustainable growth in the economy and achieving the inflation target over time.
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Sydney easing and little change elsewhere in house prices: November 2017 RBA governor's statement 

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Moving an entire home is not something that is common, but as its been done on The Block, it will no doubt become more fashionable.
The home have been relocated from as nearby as Brighton, along with across town at Pascoe Vale, Moonee Ponds, Preston and Brunswick.
While it is possible to move entire homes it is not as easy as one might think.
There are rules and regulations that must be followed before your home is even lifted off the ground.
Special trailers are needed after the weatherboard is basically cut in half and the roof is taken off.
The Block houses have been given a two storey extension along with triple garage with studio above on the 2989sq m site in Regent St.
Finance is another aspect of the process that needs to be considered while planning the move as it costs money to move homes.
For more information about moving entire homes download our handy eBook (see download upper right).
 
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Houses for removal: The Block Elsternwick makes relocatable secondhand homes fashionable again 

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With tax returns on the way it's time to think whether the 2017 budget has affected your depreciation returns.
This could be important and is something that every property investor needs to know.
Download this <a href="https://washingtonbrown.pages.ontraport.net/budgetchanges" target="_blank">eBook</a> to find out how you can find out what your depreciation returns are.
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Has the 2017 budget affected your depreciation returns: Washington Brown

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With changes to the superannuation system coming up on July 1 property investors need to review their circumstances.
They need to plan ahead to sell their property and contribute it into their superannuation.
Starting on July 1, the maximum you can contribute personally to superannuation (after-tax) will be $100,000 a year, or $300,000 averaged over three years.
Higher limits of $180,000 a year or $540,000 over three years apply now.
<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/2017/05/01/gold%20egg.jpg" alt="">
These changes will affect people who own real estate through a self-managed super fund (SMSF) especially retirees whose property supports pension payments.
Other groups might also be impacted by these changes, however each individual is different and it is advisable to seek individual advice.
For more information download the PDF <a href="https://www.propertyobserver.com.au/images/stories/marketing/ebooks/super-changes-ebook.pdf" target="_blank">here</a>.
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What the July 1, 2017 super changes mean for property investors: Property Observer free eBook

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Experts predict commercial property will continue to perform well in 2017, although results will vary by sector and state so investors will need to be selective.
Low interest rates have led to increases in office, industrial and retail property values in Australia over recent years with buyers seeking yield-producing investments.
This trend is expected to continue.
For more information on what lies ahead in the commercial market, download our <a href="https://www.propertyobserver.com.au/images/2017/commercial_ebook/commercial_forecast.pdf" target="_blank">eBook here</a>.
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Commercial property market forecast for 2017

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SPONSORED POST
The 2.5% Building Allowance deduction is something most property investors already know about. However, there’s also a 4% Building Allowance available for some buildings.
The Building Allowance (sometimes referred to as the Capital Works Deduction) is a deduction that lets property investors offset the hard construction costs of their investment property against their assessable income.
Hard construction costs may include items such as concrete, brickwork, common property items that are not plant and equipment, and even excavation. This deduction is allowed under Division 43 of the Income Tax Assessment Act (ITAA) 1997, which sets out deductions for Building Allowance.
Now, what’s so good about claiming a 4% Building Allowance? Well obviously the higher the deduction, the less tax you might have to pay.
The Building Allowance is one of those “non-cash deductions”. This means you don’t have to fork out the cash to claim it, you already did when you purchased the property.
For example, if your building was built for $250,000 and the plant and equipment was $30,000 – this leaves a Division 43 claim of $220,000. At 2.5% annually this amounts to a $5500 deduction. At the 4% rate the claim is $8800 per year.
How do you claim the 4% Building Allowance on a property?
Option 1
Buy a manufacturing building where the core activities qualify under Section 43-150 of the ITAA 1997.
Buying a building that qualifies under the industrial activities of s43-150 of the ITAA 1997 is likely to qualify the industrial building for a 4% write off.
For instance, buildings involved in refining petroleum, milling timber, freezing primary products, printing, curing meat, canning or bottling, might qualify.
Other operations that qualify are likely to include buildings in which items are brought in or maintained in the condition in which they are sold. For instance, recently we were able to claim this allowance for a major car manufacturer on the property where its vehicles were serviced.
But not all industrial buildings qualify. If you have purchased a single factory in a complex of 50 factory units, it’s unlikely your building will qualify.
Option 2
If you buy several units that can be defined as “short-term traveller accommodation” you may be able to claim a 4% Building Allowance.
ATO ID 2003/513 has provided clearer definition as to what can now be defined as short-term traveller’s accommodation. Unfortunately, it’s not good news for investors, as most serviced apartments fall back into the 2.5% category.
If your serviced apartment has a kitchen, you should be claiming 2.5% not the 4% building allowance – unless you own 10 in the same building.
Some investors expect to receive the 4% building allowance because they own a holiday house and have it fully furnished. But this type of accommodation does not fit into the category.
The construction needs to have started after February 27, 1992 to be eligible. This type of investment generally has the highest depreciation claim as a proportion of the purchase price. This is in part due to the higher building allowance but also because these types of investments have more plant and equipment in them. They generally have lifts, pools, and also are often fully furnished.
But a high depreciation schedule does not necessarily make a good investment. Many people have been burnt in the past buying these types of investments based upon the available tax deductions.
Any downside?
Surely there must be some downside in claiming the 4% Building Allowance? Well there’s no such thing as a free lunch.
There is one downside: any amount claimed under Division 43 will need to be factored in when calculating your capital gains tax liability. This rule applies generally to assets acquired after July 1, 1997.
But under the principal of “a dollar today is better than a dollar tomorrow”, coupled with the CGT relief allowed, it’s still worth the exercise, especially to higher income earners.
For more news and information about commercial property, visit <a href="https://www.realcommercial.com.au/news" target="_blank">www.realcommercial.com.au/news</a>
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Building allowance: how 2.5% can become 4%

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Property prices are forecast to rise again in 2017, bringing capital gains for home owners and investors who are already in the market.
But experts believe there will also be opportunities for people looking to upgrade or buy for the first time, and for those who plan to make new investments.
The pace of price growth is expected to slow in 2017 from previous years. 
Investors may need to be more discerning about what and where they buy in 2017. 
For your free eBook, The Forecast for Australian Residential Property Markets in 2017, <a href="https://www.propertyobserver.com.au/images/2017/01/investment_ebook/2017_forecast_ebook.pdf" target="_blank">click here</a>.
 
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The forecast for Australian residential property markets in 2017

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As the Chinese usher in the Year of the Rooster, it may be timely to look afresh at property investing in Australia in light of some new rules around foreign investments, especially because Australia remains a favourite with Chinese investors. 
The rooster is said to be the most motivated animal in the Chinese zodiac. Historically and symbolically, the rooster’s crowing acted as a wake up call to start work.
The Chinese New Year starting on January 28 could well be another year of flourishing property investing in Australia for the cashed up Chinese investor. 
To download our handy guide, Buying property in Australia in 2017, the Chinese Year of the Rooster, <a href="https://www.propertyobserver.com.au/images/2017/01/Year_of_the_Rooster/2017_Rooster.pdf" target="_blank">click here.</a>
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Buying property in Australia in 2017, the Chinese Year of the Rooster

Malaysian developer <a href="https://www.apartments.com.au/developers/s-p-setia">SP Setia</a> is the latest to jump into St Leonards booming Transport Oriented Development precinct.

The developer, which has previously delivered Sapphire by the Gardens apartment development in Melbourne, identified the Atchison Street site in 2023. It filed a Scoping Report around 12 months ago, and now has revealed the designs for the new&nbsp;40-storey mixed-use tower.

The State Significant Development Application covers <a href="https://next-portal.urban.com.au/projects/14650/summary">20-22 Atchison Street</a>, a 1,374 sqm site positioned between St Leonards Station and the new Crows Nest Metro station.

Designed by <a href="https://www.apartments.com.au/architects/cox-architecture">COX Architecture</a>, the project would deliver 181 apartments, above a four-storey commercial podium, five basement levels, and new public domain works along Mitchell Street. The apartment mix comprises 35 one-bedroom apartments, 39 one-bedroom-plus-study apartments, 85 two-bedroom apartments, and 22 three-bedroom residences.

The proposal has been lodged as a shop-top housing development under the NSW Government’s TOD planning pathway, which allows increased density around key transport infrastructure. The site sits within the recently rezoned Crows Nest Accelerated TOD Precinct.

<img alt="First look: SP Setia targets St Leonards skyline with 40-storey TOD tower" data-entity-type="file" data-entity-uuid="b799673d-48e2-46b0-801a-0e33a9330100" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/atchinson%20site.png?VersionId=dPh0UfwfaHpbFL1R7H1cbZNbIW0CHbCC" />

SP Setia acquired the Atchison Street site as part of its continued expansion into the Australian apartment market. In comments made to City &amp; Country (The Edge Malaysia) in 2023, SP Setia President and CEO Datuk Choong Kai Wai described the acquisition as “a strategic move” aligned with the group’s post-pandemic market recovery strategy.

“Our target for this exceptional development is local and overseas buyers, including first-home buyers, downsizers and investors,” Choong said.

The tower has been designed as a slender vertical form rising from a mixed-use podium, with COX Architecture positioning the development as a response to the evolving St Leonards and Crows Nest skyline.

“The purpose of the project is to facilitate the delivery of high-quality housing at a strategically located site and deliver a built tower outcome that is consistent with the desired future character of St Leonards and aligns with the TOD controls,” the design report stated.

<img alt="First look: SP Setia targets St Leonards skyline with 40-storey TOD tower" data-entity-type="file" data-entity-uuid="b1a85eee-76f7-436c-a6da-73ba827b9b13" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/atchinson%20entry.png?VersionId=dA9jHGPMcm.dDbwk4QfxqWiY5bfh3UVt" />

The podium would incorporate retail uses fronting Atchison Street, commercial tenancies, landscaped communal areas, and pedestrian improvements along Mitchell Street. Vehicle access and loading would be consolidated via Atchison Lane.

Residents would have access to more than 665 sqm of communal indoor and outdoor spaces, while the development proposes 96 parking spaces across five basement levels.

The proposal also includes a commitment for 10 per cent of residential floor space to be allocated toward affordable housing through a monetary contribution.

COX said the tower form responds directly to the emerging high-density character of the precinct while seeking to maximise solar access, cross ventilation, and outlook from apartments.

<img alt="First look: SP Setia targets St Leonards skyline with 40-storey TOD tower" data-entity-type="file" data-entity-uuid="2163f85c-f63b-4be3-aafa-f8763976cec5" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Article%20Feature%20Image%20%28Grid%29_5.png?VersionId=WiAmtIKJ6.ZQ41EtYEQ1fol7AeorKBlL" />

“The building is orientated towards north,” the Apartment Design Guide compliance report noted, adding that the tower’s slim form was driven by the constrained inner-urban site dimensions.

The design also incorporates landscaped setbacks and communal open space at podium level, intended to soften the interface with surrounding streets and improve pedestrian amenity.

The project adds to a growing wave of redevelopment proposals reshaping St Leonards and Crows Nest following the opening of the Sydney Metro City line and the NSW Government’s push for higher-density housing around major transport nodes.

Last week Stockland filed plans just down the road. They want to build a <a href="https://www.apartments.com.au/new-apartments/601-pacific-highway-st-leonards-nsw-2065">52-storey tower on Pacific Highway</a>.

Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/first-look-stockland-plans-52-storey-538-apartment-st-leonards-tower">First look: Stockland plans 52-storey, 538-apartment St Leonards tower&nbsp;</a>

Joel Robinson

First look: SP Setia targets St Leonards skyline with 40-storey TOD tower

<a href="https://www.apartments.com.au/developers/urban-property-group">Urban Property Group</a> has revealed plans for a new mixed-use tower at 10 Dangar Street, Wickham, advancing a proposal that would reshape the southern gateway to Newcastle’s city centre with one of the city’s tallest residential buildings.

The State Significant Development proposal, now on exhibition, seeks approval for a <a href="https://www.apartments.com.au/new-apartments/bowline-10-dangar-street-wickham-nsw-2293">43-storey tower</a> immediately adjacent to the Newcastle Interchange. The project would deliver around 200 apartments, including 42 affordable housing dwellings, alongside 99 co-living units, a 171-room hotel, retail space, and new public domain integrated through the site.

The scheme marks a significant escalation of plans previously approved for the site. Urban Property Group took over the prominent 2,904 sqm parcel, where excavation and demolition had already commenced under an earlier consent for a 14-storey mixed-use development.

<img alt="First look: Urban Property Group unveils Newcastle’s next supertower at Wickham interchange" data-entity-type="file" data-entity-uuid="58a96dd9-407f-4d20-86b4-94e4bfeef74b" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/wickham%20podium.png?VersionId=LGlf08pdFGAZDzvx_CXC4XakHNZRuEE0" />

Designed by <a href="https://www.apartments.com.au/architects/sjb-architects">SJB</a>, the tower has been conceived as a landmark transit-oriented development anchored to the Newcastle Interchange precinct. The proposal includes 245 build-to-sell apartments across a mix of one, two, and three-bedroom residences, as well as two penthouses. Fifteen apartments and one operational unit are earmarked for NDIS housing. The co-living component would add a further 99 units, while the podium would accommodate retail uses and hotel facilities.

SJB said the site presents “a valuable opportunity to anchor the precinct by setting the standard for design, active ground planes and character at the key southern gateway.”

The architecture responds directly to the site’s position beside major transport infrastructure and within one of Newcastle’s fastest-evolving urban renewal precincts. The tower form sits above a sculpted podium designed to frame new public spaces, including a through-site pedestrian link connecting Station Street to Hannell Street, landscaped plazas, and activated retail edges.

<img alt="First look: Urban Property Group unveils Newcastle’s next supertower at Wickham interchange" data-entity-type="file" data-entity-uuid="a7bd6ff0-f7db-4ce8-a6dc-ea56e72c6149" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/wickham%20lanne.png?VersionId=xzf39VADyhj7zBQY2I9fx9vI62u2tuSb" />

The design report describes the project as part of the broader transition of Wickham into “a vibrant, high-quality mixed-use urban precinct” that leverages proximity to the station, open space, and regional connectivity.

A detailed public art strategy has also been prepared for the development. The strategy positions the project as “a transit-oriented development of state significance at the gateway to Newcastle’s city centre” and outlines a series of integrated artworks responding to Newcastle’s industrial and transport heritage.

Creative Road’s curatorial framework for the project, titled Unveil, draws on “stratified surfaces, carved volumes, and light-filled apertures” while referencing Newcastle’s transformation from an industrial city into a contemporary education and technology hub.

<img alt="First look: Urban Property Group unveils Newcastle’s next supertower at Wickham interchange" data-entity-type="file" data-entity-uuid="77a882bb-14b1-4d28-99ff-9438e39508c0" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/wickham%20site.png?VersionId=cevgo_vN0eKPK78P8YcEu3mKPLkpFqE7" />

The proposal is being advanced through the NSW Housing Delivery Authority pathway after being declared State Significant Development in June 2025. The accompanying scoping report states the development aims to “maximise the site’s proximity to the Newcastle Interchange by delivering transit-oriented development” while increasing housing supply and affordable housing provision within the Newcastle LGA.

Urban Property Group’s plans align with the long-term strategic vision established under the Wickham Master Plan, which identified the interchange precinct as suitable for substantial uplift in height and density. The current proposal would significantly intensify that vision, positioning the tower among the tallest developments proposed for Newcastle.

The site sits immediately north of the Newcastle Interchange, bounded by Dangar Street, Hannell Street, and Charles Street. It is surrounded by a rapidly growing cluster of residential towers and mixed-use projects that have emerged following the completion of the light rail and transport interchange.

First look: Urban Property Group unveils Newcastle’s latest tower at Wickham interchange

Bottega House has completed settlement of a landmark riverfront site in Macquarie Street, St Lucia, representing its first major Brisbane development.&nbsp;

Positioned on the banks of the Brisbane River, the <a href="https://www.apartments.com.au/new-apartments/180-macquarie-street-st-lucia-qld-4067">premium site at 180 Macquarie Street</a> features uninterrupted river frontage in one of Brisbane’s most tightly held residential precincts.&nbsp;

The proposed development, currently under assessment with Brisbane City Council, has been designed by <a href="https://www.apartments.com.au/architects/plus-studio">Plus Studio</a> with interiors by <a href="https://www.apartments.com.au/interior-designers/mim-design">Mim Design</a> and will deliver a boutique collection of premium residences positioned specifically for owner occupiers and downsizers.&nbsp;

The residences are set to redefine luxury apartment living in the area, with a focus on architectural quality, refined finishes, landscape integration and elevated amenities including curated wellness facilities, resort-style pools and recreation spaces rarely seen in the local market.&nbsp;

Exclusive sales for the project will be led by Keenan &amp; Byrne, ahead of an anticipated launch later this year.&nbsp;

Bottega House Managing Director Nick Malloch said the project reflects the group’s ambition to deliver a highly curated residential offering within one of Brisbane’s most tightly held precincts.&nbsp;

“This is an incredibly rare riverfront opportunity and one we have approached with a long-term perspective,” Malloch said.&nbsp;

“Our vision from the outset was to create a boutique collection of residences that feel more like private homes than traditional apartments, with generous proportions, refined finishes and exceptional amenity throughout."

Malloch says there is a&nbsp;lack of premium owner-occupier stock of this quality in the market, particularly for downsizers wanting space, privacy and a true lifestyle offering without compromise.&nbsp;

"Demand is expected to be strong given the scarcity of premium riverfront opportunities of this nature within Brisbane’s inner-west."&nbsp;

Bottega House secures landmark riverfront site in St Lucia 

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The arrival of the first piling rig officially marks the commencement of construction at SIERA’s new beachside apartment development, Exhale, in Northcliffe.

<a href="https://www.apartments.com.au/new-apartments/exhale-surfers-paradise-8-enderley-avenue-surfers-paradise-qld-4217">Exhale</a>, a glass-encased tower featuring 54 large-scale apartments at 8 Enderley Avenue, is SIERA’s third Gold Coast development. It follows the recently completed PIPIS Bilinga beachfront project, which achieved suburb-record prices, and the soon-to-be-completed Chevron Island development, Tapestry.

[smartcode_project:default project_id=112661 project_image_fid=359603]

<a href="https://www.apartments.com.au/developers/siera">SIERA</a> Founder and Managing Director Brent Thompson said the arrival of the piling rig represented a significant milestone for the development, which is scheduled for completion in late 2028.

Over the next month, around 260 piles are expected to be installed as work progresses on the basement structure. The building is anticipated to rise above ground level early next year, before unveiling its sculptural glass curtain wall, developed in collaboration with specialist façade engineers.

“The façade was designed to maximise panoramic coastal views while creating a distinctive architectural identity,” Thompson said.

[smartcode_project:default project_id=112661 project_image_fid=355935]

Designed by BDA Architecture, Exhale will comprise just 54 two- and three-bedroom residences across 26 levels, a level of low-density living rarely delivered in this beachside pocket between Surfers Paradise and Broadbeach.

The project has been conceived as a resident-only building, with no short-stay accommodation permitted. SIERA says the model is intended to appeal to long-term owner-occupiers rather than transient holiday demand.

[smartcode_project:default project_id=112661 project_image_fid=361052]

Residences have been designed with large-format layouts and expansive glazing, with most apartments featuring more than 30 metres of glass frontage to maximise natural light and ocean views.

The amenity offering spans two levels and centres on wellness and lifestyle, including a heated magnesium pool, sauna, yoga and Pilates studio, gymnasium, private dining facilities, cinema lounge, and dedicated surfcraft storage.

[smartcode_project:default project_id=112661 project_image_fid=359607]

More than half of the apartments have already sold. SIERA has also opened a sales gallery for Exhale at its Chevron Island commercial premises, near its Tapestry tower and the site of its second Chevron Island apartment development, which is slated to launch in early 2027.
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[smartcode_project_cta:default project_id=112661]

SIERA kicks off construction at Northcliffe tower Exhale

Local Little Bay residents, along with buyers from premium postcodes across Sydney’s affluent Eastern Suburbs, have dominated purchases in developer-builder Urban Property Group’s first Eastern Suburbs apartment development, <a href="https://www.apartments.com.au/new-apartments/este-little-bay-jennifer-street-little-bay-nsw-2036">ESTE Little Bay</a>.

The $250 million coastal project, one of the first new developments in the area in several years, has proven particularly popular with downsizers, especially those from Coogee and Bondi. One Double Bay downsizer paid $4.7 million for a four-bedroom penthouse, setting a new local apartment price record in the process.

Buyers have been attracted to the combination of coastal tranquillity, premium design and amenity-rich neighbourhood living. The walkable village setting, along with proximity to three of Sydney’s leading golf courses, New South Wales Golf Club, St Michael’s Golf Club and The Coast Golf Club, has also been a key drawcard.

[smartcode_project:default project_id=112343 project_image_fid=352689]

Built across two low-rise buildings designed by <a href="https://www.apartments.com.au/architects/hill-thalis-architecture-urban-projects-pty-ltd">Hill Thalis</a> and set along a lush, landscaped green spine, designed by leading landscape architect <a href="https://www.apartments.com.au/landscape-architect/arcadia-landscape-architecture">Arcadia</a>, ESTE Little Bay offers a collection of one, two, three and four-bedroom residences with interiors by Richards Stanisich.

<a href="https://www.apartments.com.au/developers/urban-property-group">Urban Property Group</a> Sales Director, Tom McIvor said the response to ESTE has been "nothing short of extraordinary."

“Buyers have been quick to recognise ESTE as a rare opportunity to invest in a coastal sanctuary that offers both seclusion and connectivity to the heart of Sydney,” McIvor said.

[smartcode_project:default project_id=112343 project_image_fid=352687]

<a href="https://www.apartments.com.au/project-marketer/srm-residential">SRM Residential</a> Senior Director, <a href="https://www.apartments.com.au/project-marketer/srm-residential">Clayton Ross</a> said the local market has responded incredibly well, driven by ESTE’s exceptional location and the rarity it offers.

“We’ve seen strong interest from a variety of buyer groups, all of whom are drawn to the exclusivity and quality of the build and construction by the 4.5-star iCIRT-rated builder / developer, Urban Property Group. There’s truly nothing else like it along Sydney’s coastline.”

[smartcode_project:default project_id=112343 project_image_fid=352690]

The project also includes robust buyer protections, including Resilience Insurance’s Latent Defects Insurance, providing 10 years of structural cover, and an independent iCIRT-rating of the developer.

“The iCIRT-rating adds another layer of confidence,” Ross added. “Buyers see it as a safeguard for their investment and their lifestyle.” A highlight of ESTE’s offering is its exclusive wellness amenities, including a heated rooftop infinity pool and outdoor heated spa, a state-of-the-art Technogym fitness centre, and a sauna.

<a href="https://www.apartments.com.au/new-apartments/este-little-bay-jennifer-street-little-bay-nsw-2036">ESTE Little Bay</a> is topped out and is on track to complete towards the end of 2026, with residents moving in before Christmas.

[smartcode_project_cta:default project_id=112343]

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