Abadeen has released the whole-floor penthouse crowning its recently completed <a href="https://www.apartments.com.au/buildings/park-residences-cremorne-2-sutherland-street-cremorne-nsw-2090">Park Residences</a> development in Cremorne, bringing the near-300 sqm residence to market for the first time.

Occupying the entire top floor of the boutique Lower North Shore development, the penthouse includes 221 sqm of internal living and a 74 sqm wraparound terrace, with a prized north-facing aspect taking in views across Middle Harbour.

The residence has been completed and fully furnished following a collaboration between Abadeen Executive Chairman Justin Brown and internationally recognised interior designer Jack Freeman, Founder and Managing Director of FREEMAN &amp; CO.

<a href="https://www.apartments.com.au/developers/abadeen">Abadeen</a> and Freeman approached the penthouse as a finished home, sourcing furniture, artwork, lighting and objects from Australia and overseas.

[smartcode_project:default project_id=114246 project_image_fid=378718]

Pieces from Parisian design house Pierre Augustin Rose sit alongside contemporary artworks and bespoke lighting, with Freeman drawing on recent visits to PAD Paris and Salone del Mobile Milano for the final collection.

Brown said the aim was to create a penthouse that felt more like a large-scale private home than a traditional apartment.

"The experience begins the moment the lift doors open. You're welcomed into an elegant dining room before the home opens into an extraordinary living space framed by sun-drenched harbour views.

"Every time someone walks through the front door they pause. It's not just the view, it's the incredible sense of space, the warmth created by the northern sunlight that fills the interiors, and the way every room connects so effortlessly.

"It has all the proportions of a luxury home, while delivering the effortless lifestyle and personalised experience of living in a world-class six-star hotel, combined with the simplicity and convenience of apartment living."

[smartcode_project:default project_id=114246 project_image_fid=378713]

A secure lift provides exclusive access to the penthouse level, opening to a dedicated arrival foyer and dining area before the residence expands into its main living and entertaining spaces.

Floor-to-ceiling glazing runs across the northern side of the home, connecting the interiors with the terrace and Middle Harbour outlook.

The penthouse also features a fireplace and substantial chef's kitchen, while the wraparound terrace has been designed to accommodate both everyday outdoor living and larger-scale entertaining.

[smartcode_project:default project_id=114246 project_image_fid=378720]

Freeman said the interiors had been deliberately kept restrained to complement the scale, natural light and outlook already established by the architecture.

"The penthouse is a serene study in quiet luxury," Freeman said.

"The interior pairs soft, sculptural forms with warm timber, pale stone and a restrained neutral palette. Curated artwork and metallic accents add depth, while abundant natural light creates a calm, effortlessly refined atmosphere. In my world, less is always more."

Freeman said the approach was centred around collecting individual pieces rather than simply decorating the apartment.

"Every material, every object and every piece of furniture has been curated with intention. I am a true believer in collecting versus decorating.

"The architecture already provided extraordinary natural light, remarkable volume and an uninterrupted connection to Middle Harbour. Our role was to complement those qualities with unique one-of-a-kind pieces of fine art and collectible design sourced from recent travels around the world."

[smartcode_project:default project_id=114246 project_image_fid=378694]

Among the collection are solid bronze sculptures by Lorenzo Quinn, alongside a curated crystalware collection and pieces sourced from international design fairs.

Park Residences sits opposite Cammeray Golf Club, Cammeray Croquet Club and Grand Slam Tennis Cammeray, around 300 metres from Neutral Bay Village and its established collection of restaurants, cafés and retail.

Brown said the combination of a whole-floor floorplan, northern aspect and proximity to Neutral Bay was becoming increasingly difficult to find on the Lower North Shore.

"Completed whole-floor penthouses with a sun-drenched north-facing aspect and sweeping Middle Harbour views are exceptionally rare," Brown said.

"Add a quiet position opposite golf, croquet and tennis facilities, a level walk to Neutral Bay Village and only minutes to the CBD, and you have a lifestyle that's incredibly difficult to replicate.

"This is a home that offers the privacy and generosity of a luxury residence together with the convenience of one of Sydney's best-connected harbourside locations."

The penthouse will be exclusively marketed by SRM Residential.

[smartcode_project_cta:default project_id=114246]

Joel Robinson

Abadeen unveils penthouse at Park Residences in Cremorne

New Brisbane developer Dalcott has unveiled Marrone, the first of three residential projects it is planning in and around Browning Street in South Brisbane.

<a href="https://www.apartments.com.au/new-apartments/marrone-south-brisbane-39-browning-street-south-brisbane-qld-4101">Marrone</a> will comprise 97 predominantly two- and three-bedroom apartments, with larger residences aimed squarely at the owner-occupier market.

The project will sit in a quiet pocket of South Brisbane between South Bank and West End, close to the restaurants, cultural attractions and riverfront amenity that have driven the suburb's continued transformation.

Dalcott is targeting buyers looking for more space and amenity than has traditionally been offered in the inner-city apartment market, particularly downsizers and professionals wanting to remain close to the city.

[smartcode_project:default project_id=149951 project_image_fid=377072]

Resident facilities will be concentrated around an extensive rooftop amenity offering, including a swimming pool, spa, infrared sauna, warm and cold magnesium plunge pools, private lounge, dining room and outdoor entertaining areas.

Dalcott Managing Director Lachlan Cottee said South Brisbane's combination of lifestyle, connectivity and established character had been central to the approach to Marrone.

“South Brisbane offers a combination of lifestyle, connectivity and character that’s difficult to replicate elsewhere in Brisbane,” Cottee said.

“Our focus has been on creating homes that feel connected to that environment while providing the level of design, functionality and quality that today's owner-occupiers expect.”

The residences will feature an expressive material palette. Italian Calacatta Viola marble, known for its deep burgundy veining, will be paired with aged brass tapware, Chestnut engineered timber flooring and Tuscan Oak joinery.

<img alt="Marrone" data-entity-type="file" data-entity-uuid="b8d833da-3b30-496a-ae30-07bdff371b50" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-25%20at%2010.52.35%E2%80%AFAM.png?VersionId=P6DAgOfaQzIXljKKK5j3e5NhWtrHIu9G" />

Bathrooms will feature Nara Japanese ceramics and glass bricks, while clay, walnut and brass lighting will be used throughout the apartments.

Dalcott has appointed Realm Projects, led by Managing Director Shane Foley, to handle sales and marketing following previous sold-out collaborations between the groups.

Foley said the Brisbane apartment buyer had become increasingly focused on the quality of the home itself rather than simply securing an inner-city address.

“We expect to see strong demand from buyers who still want all the advantages of inner-city living but aren’t prepared to compromise on the quality of their home,” Foley said.

“Many will be downsizers looking to leave behind the maintenance of a traditional family home without giving up the space they enjoy, while others are likely to be professionals wanting a residence that reflects the way they live today.”

“Marrone responds directly to that demand, with generous floorplans, exceptional resident amenity and a location that places some of Brisbane’s best dining, entertainment and cultural attractions within walking distance.”

<img alt="Marrone" data-entity-type="file" data-entity-uuid="61f7b22f-899e-4c0f-940a-7d3ab1bfb93a" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-25%20at%2010.52.44%E2%80%AFAM.png?VersionId=PvN1JYxBgUpyCB7efKo52WGdSDs9nmim" />

Marrone will be the first project delivered as part of Dalcott's broader investment in the precinct.

It will be followed by La Terra, a boutique project comprising penthouse-style, single-level apartments on a northeast corner site with extensive resident amenity and city views.

Cottee said Marrone represented the first stage of the group's longer-term plans for the area.

Dalcott was established in 2025 by Lachlan Cottee and Ben Dalgliesh, combining development and construction capability under an integrated model and focusing on architecturally considered residential projects.

Marrone will initially be offered through a pre-release registration campaign ahead of its broader public launch.

Dalcott targets owner-occupiers with South Brisbane debut Marrone

Parnell Developments is the latest to seek significant uplift through the NSW Government's Housing Delivery Authority on a Strathfield site previously approved for a much smaller apartment development.

Parnell has sought approval for a 32-storey mixed use tower across&nbsp;<a href="https://www.apartments.com.au/new-apartments/7-lyons-street-strathfield-nsw-2135">3-7 Lyons Street and 18 Parnell Street</a>, a&nbsp;1,857 sqm site around 400 metres from Strathfield Station. The building would yield 160 apartments, 15 per cent of which will be dedicated affordable as per the government mandate for buildings seeking additional uplift.

Approved previously was a nine-storey building back in 2022 with just over 30 apartments. That approval came prior to the project being&nbsp;progressively reconsidered as planning policy shifted toward greater density around transport hubs.

<img alt="Strathfield" data-entity-type="file" data-entity-uuid="c5af5281-a643-4eb2-b8c4-0081b59c04c7" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-25%20at%209.16.48%E2%80%AFAM.png?VersionId=37bd3mI7rHNpThOV_75VO8xsGFwWOi1u" />

Turner has designed the latest building that would replace&nbsp;existing detached homes across the four lots.

The apartment mix comprises 22 one-bedroom apartments, 107 two-bedroom and two-bedroom-plus configurations, and 31 apartments with three or more bedrooms. The scheme also includes 203 car spaces across six basement levels and 58 bicycle spaces.

The proposal has been designed around a three-storey podium addressing Lyons Street, with the tower rising above and stepping toward its upper levels.

Turner said the podium was deliberately scaled to respond to the existing street, while the taller element has been designed as part of the emerging skyline anticipated around Strathfield Town Centre and the wider Homebush transport-oriented development precinct.

The Lyons Street frontage would have a more active, pedestrian-focused character, incorporating the commercial tenancy, landscaping and a brick-framed podium with an awning.

<img alt="Strathfield" data-entity-type="file" data-entity-uuid="14b20874-b8c3-4ac7-bc03-92be9a69fb78" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-25%20at%209.17.48%E2%80%AFAM.png?VersionId=av.9TxtqIRTC6v3PkSuu1rL9rreWoe2h" />

Parnell Street, which faces the railway corridor, has been given a different architectural treatment, with double-height breeze blocks, landscaping and communal areas used to soften the interface with the rail infrastructure.

The tower itself uses curved and recessed facade elements, with wave-like indentations across the northern elevation breaking the building into three vertical forms.

A palette of grey concrete, brick and breeze blocks is complemented by clay and terracotta accents, while the upper tower adopts a lighter expression through articulated slab edges, vertical fins and recessed glazing.

Residents would have access to 467 sqm of communal open space spread across three levels. The ground floor would accommodate the more active resident areas, including barbecue and group gathering spaces and an internal communal room capable of being used for working from home.

A more passive viewing deck is proposed at level three, overlooking the ground-level landscaping and neighbouring tennis courts, while a rooftop "sunset deck" at level 30 would provide another social and relaxation space.

<img alt="Parnell" data-entity-type="file" data-entity-uuid="c3dce401-a80f-4682-8471-4caa01180880" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-25%20at%209.17.34%E2%80%AFAM.png?VersionId=Xyo8JVqbOhSJXNy6Ih.1cHL.O6i0bGR." />

&nbsp;

&nbsp;

&nbsp;

Strathfield has been earmarked for substantial change through the Strathfield Town Centre planning work and the nearby Homebush TOD precinct.

Turner's report says the project has been designed to act as a transition between the existing low and mid-rise development surrounding the site and the taller built form expected to emerge across the town centre.

The proposal is being assessed as State Significant Development under the HDA pathway, alongside the concurrent request to amend the Burwood Local Environmental Plan.

First look: New apartment tower pitched for Strathfield Town Centre precinct

An $18 million penthouse has hit the market in Main Beach as construction tops out on La Mer, the $155 million apartment development rising just metres from the beach.

Spanning around 600 sqm across the top two levels of the 29-storey tower on Main Beach Parade, the four-bedroom penthouse is one of the latest eight-figure residences to test the upper end of the Gold Coast apartment market.

Its launch comes amid continued activity at the very top of the market, following the $30 million off-the-plan sale of a Burleigh Heads penthouse earlier this year, which surpassed the Gold Coast's previous $24 million apartment record set in 2023.

The <a href="https://www.apartments.com.au/new-apartments/la-mer-main-beach-3580-main-beach-parade-main-beach-qld-4217">La Mer penthouse</a> has been designed as a private residence in the sky, with 360-degree views spanning the ocean, Broadwater, hinterland and Gold Coast skyline.

[smartcode_project:default project_id=95606 project_image_fid=378731]

All four bedrooms have ensuites, while the ocean-facing master retreat occupies around half of the upper level and includes its own lounge, private balcony, two walk-in wardrobes and an oversized ensuite with a freestanding stone bath positioned to take in the views.

The residence also features a kitchen designed to accommodate a private chef, a 3.6-metre island bench, expansive butler's pantry, wine cellar and integrated bar.

[smartcode_project:default project_id=95606 project_image_fid=378732]

A rooftop pool and substantial outdoor entertaining area with its own kitchen sit above the residence, while a grand staircase connects the two internal levels. The penthouse also has its own express lift.

OTP Group Director James Elliott, who is marketing La Mer, said the penthouse was expected to appeal to high-net-worth buyers seeking either a permanent Main Beach residence or Gold Coast holiday home.

“The La Mer penthouse represents exceptional value, considering its quality design, size, privacy and location, not to mention the 360-degree views capturing the beach and Gold Coast Broadwater,” Elliott said.

“We’re anticipating interest from high-net-worth individuals and couples seeking a residence or holiday home in the sought-after village enclave of Main Beach, taking advantage of the unprecedented growth underway in the area and neighbouring The Spit.”

[smartcode_project:default project_id=95606 project_image_fid=378736]

La Mer is being developed by developer-builder ODUS and Nazero, in partnership with funder Metrics Credit Partners.

ODUS Director Byron Sakha said topping out the tower had provided the opportunity to release the project's most significant residence.

“We’ve worked with internationally-recognised studio Sici Design on the penthouse interiors, with a focus on ensuring it isn’t luxury for luxury’s sake. Every element has been thoughtfully designed to enhance quality of life for those who call it home,” Sakha said.

“The views are the hero of virtually every space, but we’ve given equal attention to the fittings and finishes, so every detail exudes elegance and refinement.”

Sici Design Founder and Director Maria Papadopoulos said the extensive views became an integral part of the interior design rather than simply something the residence was designed around.

“The views weren't something we designed around, they became part of the design itself, with the true luxury of La Mer in its feeling of peace, calm and wellbeing,” Papadopoulos said.

“Luxury isn't defined by how something looks, but how it makes you feel, and we believe a luxurious home should be beautiful to live in, not stressful to maintain.”

The interiors combine Austral Dream Dolomite natural stone and travertine with timber flooring and a restrained coastal palette.

[smartcode_project:default project_id=95606 project_image_fid=378734]

Designed by Plus Studio, La Mer is one of the more boutique additions to the rapidly changing Main Beach apartment market.

The tower comprises just 24 full-floor, three-bedroom plus multipurpose room apartments below the two-level penthouse, giving the project a considerably lower density than many of the larger towers being developed across the Gold Coast.

Residents will have access to a pool and spa, gym, sauna, barbecue facilities, private sun lounges, yoga lawn and outdoor beach shower.

The penthouse has been released as part of the final collection of residences at La Mer, with remaining apartments priced from $4.3 million.

Construction is expected to complete later this year, with a fully furnished display apartment now open on level four.

[smartcode_project_cta:default project_id=95606]

ODUS releases $18 million penthouse crowning La Mer Main Beach

<a href="https://www.apartments.com.au/developers/far-east-consortium">Far East Consortium</a> is preparing to commence construction on <a href="https://www.apartments.com.au/new-apartments/640-bourke-street-melbourne-640-bourke-street-melbourne-vic-3000">640 Bourke Street</a> this October, marking the next milestone for the Melbourne CBD development and its higher-end Eliza Collection.

Spanning levels 44 to 68 of the 68-storey <a href="https://www.apartments.com.au/architects/rothelowman">Rothelowman</a>-designed tower, the Eliza Collection has been conceived as a lower-density offering within the broader development, with only five apartments on each floor, dedicated lift access and a collection of resident spaces reserved exclusively for Eliza Collection residents.

The Eliza Collection forms part of Far East Consortium's broader move toward larger-format residences at 640 Bourke Street, where the number of apartments was reduced from earlier plans as apartment sizes increased.

[smartcode_project:default project_id=509 project_image_fid=365685]

"What it's meant for 640 Bourke is we've actually reduced the number of apartments. We've increased the overall size of the apartments. We don't have any studios in here, and what that does for a project is it elevates it," Far East Consortium Director of Sales and Marketing Lauren Sheldon said.

Rothelowman Associate Jun Chang said the design process provided an opportunity to create more generous floorplans.

"We were given the opportunity to be more generous. The apartments became bigger and squarer than any other apartments which had been designed in the CBD before that."

[smartcode_project:default project_id=509 project_image_fid=368869]

That thinking carries through to the Eliza Collection, where the residences have been designed around the space and functionality associated with a larger home, but positioned high above the centre of Melbourne.

Kitchens are equipped with Gaggenau appliances, a butler's pantry, temperature-controlled wine cabinet and sculptural pendant lighting, while engineered timber flooring, stone and porcelain finishes and custom cabinetry feature throughout the broader interiors.

Privacy and security are another point of distinction. Eliza Collection residents have dedicated lift access, while 640 Bourke Street will provide concierge services and secure resident parking. Short-stay accommodation, including Airbnb, will not be permitted within the development.

[smartcode_project:default project_id=509 project_image_fid=365689]

Eliza Collection residents will also have exclusive access to selected amenity spaces across levels one and three of the restored Eliza Tinsley building. These include the Salon with grand piano, an art therapy room, private dining rooms and treatment rooms.

They sit within more than 3,000 sqm of amenity planned across 640 Bourke Street, alongside facilities including a pool, gym, whisky lounge and further social and wellness spaces.

The Eliza Tinsley building itself is central to the wider project's identity. Rather than treating the existing Eliza Tinsley façade as a separate element, Rothelowman used it as a starting point for the architecture of the new tower, with the historic building to accommodate the project's gallery and lobby.

"It's a significant asset and wants to be celebrated and experienced by all residents every single time they go in and out of the building," Rothelowman Principal Stuart Marsland said.

[smartcode_project:default project_id=509 project_image_fid=368872]

The tower will rise behind the retained heritage building at 640 Bourke Street, placing residents within walking distance of Southern Cross Station, Flagstaff Gardens, Queen Victoria Market and the Docklands waterfront.

With construction scheduled to begin in October, Far East Consortium has established an onsite display gallery at 640 Bourke Street, including fully built apartments that allow the project's layouts, materials and finishes to be inspected at full scale.

A fully built Eliza Collection apartment is also available to view at the display suite by appointment ahead of the planned October construction commencement.

Eligible purchasers who buy before construction commences can secure the full available off-the-plan stamp duty savings, subject to eligibility and applicable conditions.

[smartcode_project_cta:default project_id=509]

Far East Consortium brings Eliza Collection to 640 Bourke Street ahead of October construction start

National Australia Bank (NAB) has brought forward the timing of the first RBA cash rate cut by three months.

NAB is now expecting a cut in February, in line with ANZ and Westpac, having initially thought a cut wouldn't come until May.

Commonwealth Bank, the nation's largest lender, still thinks the first cut will come in December.

NAB changed its call following the August monthly inflation figures that were released at the end of September, showing it had dropped to 2.7 per cent.

"The risk has been skewed to a first cut earlier in 2025, and today’s change acknowledges the balance of risks has likely shifted sufficiently for the RBA to feel comfortable cutting a little sooner than we earlier expected," NAB noted in its latest update.

They added that the cadence of the cuts may be faster than its central profile.

"Domestic inflation pressures are cooling, but only gradually, and we continue to expect the conditions for a cut will not be in place this year.

NAB believes the easing cycle will end at 3.1 per cent by early 2026, which is five cuts from the current 4.35 per cent cash rate.&nbsp;

CBA also thinks 3.1 per cent will mark the end of the cutting cycle, while Westpac is forecasting 3.35 per cent, and ANZ is the most pessimistic at 3.6 per cent, which would be just three interest rate cuts.

<h2>What would a rate cut in February look like for borrowers?</h2>

According to&nbsp;<a data-saferedirecturl="https://www.google.com/url?q=https://link.mediaoutreach.meltwater.com/ls/click?upn%3Du001.IVvjJ-2BPT0A8C3VxtqKc6e3bj5hBuw27WFEYqovsYs7kPsgFulYrdOzeP8gI7CybJOya3_RgrM7qq-2BfK-2FtAHeRBLv5Qrb-2Bii5fzjLeKcP4w-2FkNgJPXygpiRhVUan3WV3QEggcf617UC8Z60RjQJZAqx7PiO7FtVJQSn0D46Zc3iTVP0kAhTTzG51cPpa5hrqz1OkSA-2BiXAxUajQ686MTtiseWBIdMdknd83aB7cOVgXlVTeHCGf3-2BcMHwfvI8TYlkUovqEhn4dj0KXf2eJGpb9-2BBv20hPXdLlPP9yD7DvFFDBM5yrTqxvcCiMfAsW1onD-2FcriL628eYdhNQE7bwzYrxcOYnmaYfRhGl-2FEHQ6eK2uQcLxs6Cbu6Dx0bYvpi5A6enmxMWU5TkcRYrP6Z8GbXZYtc5qSoKu6eWFBQR9K7fsjXwHMmby3D3X6Yx-2BxcDcdRruTG&amp;source=gmail&amp;ust=1727774368149000&amp;usg=AOvVaw2vK2ujS77CHs9VRvSSXzLC" href="https://link.mediaoutreach.meltwater.com/ls/click?upn=u001.IVvjJ-2BPT0A8C3VxtqKc6e3bj5hBuw27WFEYqovsYs7kPsgFulYrdOzeP8gI7CybJOya3_RgrM7qq-2BfK-2FtAHeRBLv5Qrb-2Bii5fzjLeKcP4w-2FkNgJPXygpiRhVUan3WV3QEggcf617UC8Z60RjQJZAqx7PiO7FtVJQSn0D46Zc3iTVP0kAhTTzG51cPpa5hrqz1OkSA-2BiXAxUajQ686MTtiseWBIdMdknd83aB7cOVgXlVTeHCGf3-2BcMHwfvI8TYlkUovqEhn4dj0KXf2eJGpb9-2BBv20hPXdLlPP9yD7DvFFDBM5yrTqxvcCiMfAsW1onD-2FcriL628eYdhNQE7bwzYrxcOYnmaYfRhGl-2FEHQ6eK2uQcLxs6Cbu6Dx0bYvpi5A6enmxMWU5TkcRYrP6Z8GbXZYtc5qSoKu6eWFBQR9K7fsjXwHMmby3D3X6Yx-2BxcDcdRruTG" target="_blank">Canstar</a>, if there is a cut in February, a borrower with a $600,000 loan today and 25 years remaining would see their monthly repayments drop by $92.&nbsp;

<table border="1" cellpadding="0" cellspacing="0">
	<tbody>
		<tr>
			<td colspan="3">
			Impact of 0.25% pt cut in February 2025
			</td>
		</tr>
		<tr>
			<td>
			Current loan size
			</td>
			<td>
			Drop in monthly repayment
			</td>
			<td>
			New monthly repayment
			</td>
		</tr>
		<tr>
			<td>
			$600,000
			</td>
			<td>
			-$92
			</td>
			<td>
			$3,907
			</td>
		</tr>
		<tr>
			<td>
			$750,000
			</td>
			<td>
			-$114
			</td>
			<td>
			$4,884
			</td>
		</tr>
		<tr>
			<td>
			$1M
			</td>
			<td>
			-$153
			</td>
			<td>
			$6,512
			</td>
		</tr>
		<tr>
			<td colspan="3">
			Source:&nbsp;<a data-saferedirecturl="https://www.google.com/url?q=https://link.mediaoutreach.meltwater.com/ls/click?upn%3Du001.xWMOP9hChsvn-2BC9O-2FebBihXIZ4cEzbiuENdxm-2Bx3-2FYEEgYMhZlKWNj5Zzy1YZ56RuASD_RgrM7qq-2BfK-2FtAHeRBLv5Qrb-2Bii5fzjLeKcP4w-2FkNgJPXygpiRhVUan3WV3QEggcf617UC8Z60RjQJZAqx7PiO7FtVJQSn0D46Zc3iTVP0kAhTTzG51cPpa5hrqz1OkSA-2BiXAxUajQ686MTtiseWBIdMdknd83aB7cOVgXlVTeHCGf3-2BcMHwfvI8TYlkUovqEhn4dj0KXf2eJGpb9-2BBv20v2akwr6-2BqLyRrlEgkJ4J-2BCCyY0x189xEHZA4Ylf8c7ChBqNIkhmftZzoFuZKFn43pw3oJVg2o1gumrpdA-2B7MB-2FBtmL2rFCI-2FXORATQHySCLVOMg7Vywv-2BqnnQUAtDz6XkvpwxdHFXh70VwKazzhJsICilEYOvP4ju0sIfi5g6TL&amp;source=gmail&amp;ust=1727774368149000&amp;usg=AOvVaw2qVnp6oqATgqDUi2Frm22q" href="https://link.mediaoutreach.meltwater.com/ls/click?upn=u001.xWMOP9hChsvn-2BC9O-2FebBihXIZ4cEzbiuENdxm-2Bx3-2FYEEgYMhZlKWNj5Zzy1YZ56RuASD_RgrM7qq-2BfK-2FtAHeRBLv5Qrb-2Bii5fzjLeKcP4w-2FkNgJPXygpiRhVUan3WV3QEggcf617UC8Z60RjQJZAqx7PiO7FtVJQSn0D46Zc3iTVP0kAhTTzG51cPpa5hrqz1OkSA-2BiXAxUajQ686MTtiseWBIdMdknd83aB7cOVgXlVTeHCGf3-2BcMHwfvI8TYlkUovqEhn4dj0KXf2eJGpb9-2BBv20v2akwr6-2BqLyRrlEgkJ4J-2BCCyY0x189xEHZA4Ylf8c7ChBqNIkhmftZzoFuZKFn43pw3oJVg2o1gumrpdA-2B7MB-2FBtmL2rFCI-2FXORATQHySCLVOMg7Vywv-2BqnnQUAtDz6XkvpwxdHFXh70VwKazzhJsICilEYOvP4ju0sIfi5g6TL" target="_blank">www.canstar.com.au</a>. Starting rate is the RBA existing average owner-occupier variable rate of 6.36%. Assumes banks pass the cash rate cut on in full the month after the meeting.
			</td>
		</tr>
	</tbody>
</table>

Canstar Data Insights Director, Sally Tindall, says if core inflation continues to track in the right direction, or unemployment starts to accelerate significantly, we could well see a cash rate cut as early as February of next year.

“All four big banks now believe the RBA will be ready to cut the cash rate in just over four months’ time, if not before, in the case of CBA.

“However, the outlook for both inflation and unemployment is still highly uncertain. A couple of wobbly sets of inflation data could see the RBA holding for longer, particularly if unemployment remains relatively steady."

&nbsp;

Commonwealth Bank, the nation's largest lender, still thinks the first cut will come in December.

NAB bring forward first RBA cut to February 2025

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GUEST OBSERVER
As widely expected following a run of mixed economic data, the US Federal Reserve remained on hold with the Fed Funds rate at 0.25-0.5 percent at its September meeting. 
While the Fed judged that the case for a rate hike has “strengthened” and that the risks to the economic outlook are now “roughly balanced” and there were three dissents in favour a rate hike, the overall impression is that the Fed’s hawkishness is very mild.
It is still waiting for more evidence of progress towards its objectives, Chair Janet Yellen repeated that the Fed can more effectively respond to rising inflation than to falling inflation as a reason to remain cautious, the Fed continues to refer to only “gradual” increases in interest rates and the Fed’s dot plot of Fed meeting participants interest rate expectations continues to decline.
It’s now showing just one hike this year (down from four at the start of the year), only two hikes next year and expectations for the long run natural rate have fallen further to 2.9 percent (from 3 percent in June).
Based on the experience of the last few years it’s understandable that the market is sceptical of Fed rate hike expectations as they have been continuously revised down.
Our base remains for the Fed to hike at its December meeting, but this will require more consistently positive economic data from the US over the next three months. The US money market’s probability of a December hike is 61 percent and this sounds about right.
<a href="/images/2016/09/22/image002.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/09/22/image002.png" alt="">
Source: US Federal Reserve, AMP Capital
The bottom line is that with US growth running around 2 percent or a bit less and inflationary pressures remaining below target, global risks remaining and the strength in the $US over the last two years and the recent (regulatory driven) rise in US interbank lending rates doing part of the Fed’s job for its, the Fed remains rightly cautious in removing monetary stimulus.
This is likely to remain the case for some time to come.
So for share markets the Fed remains broadly supportive, although volatility will no doubt increase again as we get closer to the December meeting. 
For Australia, the ongoing delays in Fed rate hikes are a mixed bag.
On the one hand a cautious Fed taking account of US and global economic conditions before raising rates is a good thing as it helps sustain global growth and hence demand for Australian exports. But on the other hand the continuous delays in Fed rate hikes are keeping the $A stronger than would otherwise be the case which in turn could dampen the ongoing rebalancing in the Australian economy.
Thanks to the BoJ’s commitment to continue monetary stimulus for a lengthy period and the Fed’s decision to hold, the $A has bounced above $US0.76 again. Ongoing $A strength keeps alive our expectation for another RBA rate cut, even though it’s now a close call thanks to strong Australian economic growth.
<a href="https://www.propertyobserver.com.au/https://plus.google.com/110172465327488162875?rel=author" target="_blank">SHANE OLIVER</a> is head of investment strategy and economics and chief economist at <a href="https://www.ampcapital.com.au/home" target="_blank">AMP Capital</a> and is responsible for AMP Capital's diversified investment funds.
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Mixed bag as Fed holds as expected, only mildly hawkish: AMP Capital's Shane Oliver

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The next ‘live’ RBA meeting will be November 1, Bill Evans, Westpac's chief economist suggests.
However he expect rates will be held steady in November as well as October.
The Reserve Bank Board next meets on October 4, the first meeting under the new Governor Philip Lowe.
"It is extremely unlikely that there will be any change to rates at that meeting.
"Since the cash rate returned to its historical low of 3 percent in 2013 all six subsequent cuts have occurred at meetings in February, May, August or November when the Bank has a ‘fresh’ print on inflation and is able to communicate any forecast changes in its quarterly Statement on Monetary Policy.
"Signs of stability in the real economy point to steady rates being the most appropriate policy.
"Of course there is always the possibility of a shock from the inflation report on October 26 but both our inflation forecasts and our assessment of current high RBA ‘inertia’ around moving again this year point to stability in November," he said.
<a href="/images/2016/09/21/Screen%20Shot%202016-09-21%20at%2010.55.55%20AM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/09/21/Screen%20Shot%202016-09-21%20at%2010.55.55%20AM.png" alt="">
 
Evans noted the six month annualised growth rate in the WestpacMelbourne Institute Leading Index, which indicates the likely pace of economic activity relative to trend three to nine months into the future, rose from –0.01 percent in July to +0.20 percent in August.
 
He said the August reading is consistent with a trend that has been building for some months now.
 
"The positive Index growth rate follows 15 consecutive months where growth has been below trend.
 
"It is the first above trend result since early last year and the second strongest since December 2013.
 
"The Leading Index is clearly signalling that the economy is likely to continuing growing around its long run trend rate of about 3 percent a year.
 
"That outlook is consistent with Westpac’s forecast for growth holding steadily around a 3 percent pace over the course of both this year and next."
 
The Leading Index growth rate has lifted sharply over the course of 2016, from a 1.44 percent below trend reading in March to 0.20 percent above trend in August.
 
Almost all components have contributed to the improvement. The biggest lift has come from: commodity prices (+0.64ppts).
 
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Cup Day is next "live" meeting, but Westpac's Bill Evans expects a hold decision

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September 2016 RBA minutes note weaker housing market conditions

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GUEST OBSERVER
The minutes of the September monetary policy meeting of the Reserve Bank Board provided few surprises.
Of most interest in these minutes is the expanded analysis of the Australian housing market. Media reports and some high frequency industry data had been suggesting that the markets in Sydney and Melbourne were lifting again.
The Bank’s analysis of these developments appears to be more downbeat than had been expected. House prices are described as having “declined at the national level and across most capital cities over the past year”. Inflation in the rental markets was described as “around historical lows” and the aggregate rental vacancy rate “had drifted higher and was close to its long run average”.
The Board also noted the recent lift in auction clearance rates in Sydney. It qualified that signal by noting that “the number of auctions had declined and remained lower than a year earlier”.
It also noted that in the private treaty market turnover had declined and that “the average number of days that a property was on the market had been on an upward trend”. Slowing housing credit growth was also noted. As has been the case with previous remarks from the Bank, a future oversupply in the high rise apartment market seems possible ( but not certain) with “a considerable volume of apartments scheduled to be completed over the next couple of years”.
Conditions in the labour market were assessed as little changed in recent times with the unemployment rate reasonably steady at 5.75 percent in the year. The outlook for the jobs market was noted as “consistent with only a slight change in the unemployment rate in coming months”.
Overall the data suggested that the economy had been growing around potential (2.75-3.00 percent) in the first half of the year.
One important new piece of information since the last Board meeting was the release of the capital expenditure survey. The Board noted that mining investment had continued to fall and investment intentions in that sector implied a further large decline in 2016-17, although the peak subtraction from GDP growth was still expected to have occurred in 2015-16.
Household consumption growth is expected to be around average. The Board pointed out that lower interest rates can be expected to boost consumption since borrowers benefitted more from low interest rates than had been costs to depositors. The concern has always been that borrowers used the improved cash flow to pay down debt rather than lift consumption.
Growth in Australia’s major trading partners continued to be assessed as “a little below its decade average”. In particular, the recent lift in bulk commodity prices was attributed more to a reduction in production by Chinese producers than a sustained lift in demand.
Conclusion
We have been somewhat surprised at the more downbeat tone used around the housing market. Nevertheless this sentiment is not consistent with any imminent decision to adjust rates. The next inflation report will print on October 26 but it is considered to be highly unlikely that it would precipitate any policy response. Our current forecast is for a 0.5 percent underlying print for the quarter further signalling that inflation remains at or near the bottom of the 2-3 percent target zone but there are no grounds for concern, as we saw in April, that inflation was tumbling.
In that regard the Bank has released the Statement on the Conduct of Monetary Policy which sets out the new Governor’s agreement with the Government. We have been writing consistently on the appropriateness of widening the target band from 2-3 percent to 1-3 percent however we were never at all confident that the Bank and the Government would make such a profound change. The agreement that has been adopted is “an appropriate goal is to keep consumer price inflation between 2 and 3 percent on average over time.” This “over time” concept replaces “over the cycle” and appears to provide the Bank with more flexibility for inflation to remain at or below the bottom of the band for an extended period.
It suggests that under this agreement there will be less urgency to push inflation back to within the 2-3 percent medium term goal. The new Governor has also adopted a more explicit recognition that included in his objectives “financial stability”. The most likely channel through which interest rates can affect financial stability is via the housing market. We welcome the recognition of the importance of fostering financial stability when formulating a policy response.
On balance this new agreement reduces the urgency to cut rates further even in the face of another inflation shock.
While no one gives any chance to a policy move on October 4 there is still plenty of anticipation that the Bank will cut rates at its following Board meeting on November 1. We do not think that there is any evidence in the themes set out in these minutes or the recent Statement on the Conduct of Monetary Policy that would lead to a move in November. We remain comfortable with our view that the overnight cash rate will remain steady for the next few years.
BILL EVANS is chief economist of <a href="https://www.westpac.com.au/" target="_blank">Westpac</a> 
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RBA minutes reveal slightly surprising comfort around risks in the housing market: Westpac's Bill Evans

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Tasmania has see a spike in mortgage market activity, according to CoreLogic. But across the mainland activity in financing inquiry has been subdued.
<a href="/images/2016/09/13/Screen%20Shot%202016-09-13%20at%2010.24.03%20AM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/09/13/Screen%20Shot%202016-09-13%20at%2010.24.03%20AM.png" alt="">
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Tasmania sees mortgages market activity spike: CoreLogic

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<img src="https://counter.theconversation.edu.au/content/65328/count.gif" alt="The Conversation" width="1" height="1">
GUEST OBSERVER
Banks may still be evading increased regulation by shifting activities to shadow banking. This system is well established as part of the financial sector, but it provides products that separate an investor from an investment, making it more difficult to evaluate risk and value.
This lack of transparency increases the risk in our financial system overall, making it vulnerable to the types of shocks that caused the 2008 global financial crisis. A current example is the so-called “bespoke tranche opportunity” offered by shadow banks. This is similar to the notorious collateralised debt obligations, packages made up of thousands of mortgage loans some of which were sub-prime, blamed for the global financial crisis.
Shadow banking is comprised of hedge funds, private equity funds, mutual funds, pension funds and endowments, insurance and finance companies providing financial intermediation without explicit public liquidity and credit guarantees from governments. Shadow banking is usually located in lightly regulated offshore financial centres.
In the period leading up to the global financial crisis, a large portion of financing of securitised assets that allowed regulated banks to exceed limitations on their risk-taking was handled by the shadow banking sector.
To this day, shadow banking continues to make a significant contribution to financing the real economy. For example, according to the Financial Stability Board, in 2013 shadow banking assets represented 25% of total financial system assets. While the average annual growth in assets of banks (2011-2014) was 5.6%, shadow banking growth stood at 6.3%.
A comparison of country-based share of shadow banking assets between 2010 and 2014 reveals the largest rise for China from 2% to 8%, while the USA maintains its dominance of the shadow banking markets with around 40%.
The failure of private sector guarantees to help shadow banking endure the global financial crisis can be traced to underestimated tail risks by credit rating agencies, risk managers and investors. Credit rating agencies lack of transparency, when it comes to explaining their methods (often disguised as “commercial-in-confidence”), continue to make it difficult for a third party to check assessments.
An excess supply of inexpensive credit also contributed to risk before the global financial crisis of 2008. This was because investors overestimated the value of private credit and liquidity enhancements.
One of the key challenges for regulators now is to devise rules and standards requiring shadow markets to hold enough liquidity to be sufficiently sensitive to risk. However, where investors and financial intermediaries fail to identify new risks, it is less likely that the regulators – who have fewer resources – will succeed.
Raising capital requirements can limit the capacity of financial intermediaries to expand risky activities, although monitoring overall bank leverage may be better. This is because credit ratings cannot be relied upon in the presence of neglected risks. Similarly, monitoring rising exposure of regulated banks to shadow banking or untested financial innovations can also become part of the regulator’s arsenal.
But there remains a major problem that is unlikely to be resolved by any regulation. Regulation is meant to strike a fine balance between close supervision and allowing space for financial innovation because loss of diversity can create stronger channels of transmission and could expose financial systems to greater systemic risk.
Too little regulation encourages excessive risk taking, while too tight a regulation is bound to strangle the financial sector that provides the lifeline for the economy. Striking such a fine balance is next to impossible in a dynamic, global financial sector.
The Basel Accords, set up to strengthen regulation after the financial crisis, will continue to play a key role in helping manage systemic risk like this. For example regulations can collect data that would be useful in macroprudential regulation, taking action to reduce various risks and remaining alert to unfolding trends on the ground.
Regulators need to heed the trends in shadow banking as part of this, to ensure transparency. However the nature of this sector, the long chains and multiple counterparties with unclear financial obligations, will continue to make the job of the regulator very difficult.
Necmi K Avkiran is associate professor in Banking and Finance, The University of Queensland and author for The Conversation. He can be contacted <a href="https://theconversation.com/profiles/necmi-k-avkiran-298084" target="_blank">here</a>.
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Shadow banking increases the risk of another global financial crisis

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Research from online lender loans.com.au has found many borrowers are paying vastly more than they need to.
Loans.com.au founder Kim Cannon said data from comparison site Canstar showed that a homebuyer who borrowed $450,000 could pay more than $114,000 in extra interest over the life of the loan if they made the wrong choice.
He said homebuyers who assumed that all lenders offered broadly similar value were making a big mistake.
“If buying a home is the biggest financial decision you will ever make, choosing a home loan is the second biggest,” he said
“The wrong decision on an average-sized loan can cost more than $100,000 dollars over the term of the home loan. These are life-changing sums.
"When shopping for a home loan, buyers should avoid distractions and keep their eye firmly on the comparison rate, which combines all costs into a single percentage rate.
“Just as buying property is all about location, location, location, when you take out a loan it is all about comparison rate, comparison rate, comparison rate.”
Loans.com.au recently cut the variable rate for home purchases on its Essentials product to a record-low 3.39 per cent (comparison rate 3.41 per cent).
<a href="/images/2016/09/12/Screen%20Shot%202016-09-12%20at%2011.18.04%20AM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/09/12/Screen%20Shot%202016-09-12%20at%2011.18.04%20AM.png" alt="">
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Aussie borrowers paying more than needed: Loans.com.au

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<img src="https://counter.theconversation.edu.au/content/63396/count.gif" alt="The Conversation" width="1" height="1">
GUEST OBSERVER
The biggest Australian banks are fairing well in a year of increased pressure to reform from politicians, international events like the Britain’s exit from the European Union and more regulation from the Australian Prudential Regulation Authority (APRA).
A number of interrelated factors have contributed to the relatively strong performance of the Australian banks. For instance, the banks have limited exposure to the types of securities which led to massive losses for their counterparts in other countries. The banks also heavily rely on domestic loans, particularly the low risk household sector, so better lending standards and a proactive approach to prudential supervision by APRA may have contributed.
The Basel III regulatory requirements, brought in after the 2008 financial crisis, emphasise holding an increased amount of subordinated debt, as a measure of market discipline. However all the big four banks are holding less and less subordinated borrowings. More specifically, it declined by more than 50% from 2007 to 2014, according to our calculations.
APRA limits banks’ holdings of higher risk securitised assets, these are loans packaged into securities, to a maximum of 25% of the banks' loan portfolio. These are high risk if not properly understood or defined, as happened with United States home loans, blamed for the start of the global financial crisis.
When Australian banks calculate bank capital requirements, they need to fully account for securitised assets. This is a rule from APRA that goes beyond international standards, to reflect the risk inherent in these products.
Inter-bank liquidity tightened significantly with all banks increasing their holdings of Exchange Settlements Accounts at the Reserve Bank, this a form of low risk liquidity. Australian banks have lower interbank deposits compared to their Europe and USA counterparts and are also heavily involved in long term wholesale funding and are required to hold more liquid assets including government debt to deal with liquidity. All of this makes Australian banks less risky in times of crisis because spillover effects from other banks are less likely.
<h2>There has been a significant increase in concentration in the Australian banking industry since the global financial crisis. For example with Westpac and the Commonwealth Bank of Australia taking over St. George Bank and Bank West, respectively.</h2>
Following mergers, the big four account for 88 percent of the Australian banking system assets. This reinforces the idea that the banks are “too big to fail”.
The banks have also moved to more fee generating activities, which increases risk, but to a lesser extent in Australian banks. Data shows between 1998 and 2014, on average, 1.2 percent greater interest income was generated relative to non-interest income for Australian banks, according to our analysis. However, there is also similar evidence for the top eight publicly-listed Canadian banks. They exhibit on an average, a 2.5 percent increase in net interest revenue relative to non-interest income over the same time period.
This reinforces that Australian and Canadian banks demonstrated extra ordinary resilience during the credit turmoil in the global financial crisis. The World Economic Forum in 2008 reported that Australia and Canada were among the top four safest banking systems in the world.
Large banks in Australia are active in international markets through direct ownership of foreign based banks and having offshore operations as a source of capital. Deregulation of banking in countries such as the USA, Canada, Australia and many developing countries has opened up new markets for foreign banks. Australian banks' largest international exposure is to New Zealand, where all big four banks retain sizeable operations.
Although the growing interdependence among international economies and financial markets is certain to continue, the impact of Brexit on Australian banks remains minimal. It remains to be seen in the long-run how Australian banks will weather the international banking/economic developments.
As a last measure of the bank health, we can measure the domestic systemic risk with a methodology based on one used by the official Basel Committee on Banking Supervision. Based on July 2016 monthly data, the big four banks account for 80.38 percent of the systemic risk in the financial system and the riskiest, from highest to lowest, are the National Australia Bank, the Commonwealth Bank of Australia, Westpac and ANZ.
Mamiza Haq is lecturer in Finance, The University of Queensland, and author for The Conversation. She can be contacted <a href="https://theconversation.com/profiles/mamiza-haq-143872" target="_blank">here</a>.
Necmi K Avkiran is associate professor in Banking and Finance, The University of Queensland and author for The Conversation. He can be contacted <a href="https://theconversation.com/profiles/necmi-k-avkiran-298084" target="_blank">here</a>.
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Company results wrap: weighing up the risks behind the profits of Australia’s big four banks

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Reserve Bank governor Glenn Stevens has conceded that he has "some discomfort' about rising Sydney house prices, but argued that these concerns need to be weighed up against the need to stimulate economic activity across the nation. 
He said the Reserve Bank remained confident there was little evidence of a widespread bubble in house prices.
Australia had a new "two speed" economy, with strong growth in states such as NSW, while resource-rich states, such as Western Australia and Queensland, had seen growth rates slump as the mining boom had ended.
Hie final interview with The Australian Financial Review, mentioned some mixed evidence as to the strength of the housing market. 
"Prices are probably rising smartly in some areas, but in other areas they're not, and in some cities in the country, they're falling," he said.
"So I think it's a mixed picture. It's not without risk, and it certainly gives me some discomfort, but then we're balancing that against the other obligations we have to pursue."
He said the RBA was tasked "to balance all these things and make a decision that neither completely ignores the financial stability and housing concerns, nor let them completely dictate the decision.
"That's the balance that we've tried to strike".
"Most of the domestic effects of cheap money comes through the household sector. Higher house prices than otherwise, more borrowing than otherwise, wealth effects, lower saving rate, etc."
But he added, "the thing that I've tried to grapple with is – that's where we get the effects, but do we actually want households to engage in a major levering-up from here?
"It's not that what they did before was disastrous – that clearly hasn't been. But from here, how much more do you want?"
"As the facts at the moment are, the credit growth of households is running about 6 percent. Fractionally less if you take account of a build-up in mortgage offsets and so on".
He added, "I don't think you can say this is a terrible risk. If it was 10 percent or 15 percent – that would be a different story".
He noted two speed housing price movements.
"It's probably not that surprising that parts of Sydney are leading the charge, because this economy is leading the country at the present time."
This, he added, is something "which, actually, we needed if we're to manage the transition after the mining boom".
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Housing markets not without risk as Sydney leads the charge: RBA's Glenn Stevens

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<img src="https://counter.theconversation.edu.au/content/64875/count.gif" alt="The Conversation" width="1" height="1">
GUEST OBSERVER
On Tuesday, in its last board meeting with Glenn Stevens as Governor, the Reserve Bank of Australia left the cash rate unchanged at 1.50 percent.
This was widely anticipated by markets. Glenn Steven’s statement basically said: growth is pretty low, but not horrible; business investment is way down, but other investment is up; commodity prices are up; but they fell a lot in the last two years; and so on.
Essentially, things are bad, but not too bad. In other words, the glass is half “fumpty”.
The two things he made a non-bland statement about were inflation and the exchange rate, saying:
“Inflation remains quite low. Given very subdued growth in labour costs and very low cost pressures elsewhere in the world, this is expected to remain the case for some time.”
and:
“Low interest rates have been supporting domestic demand and the lower exchange rate since 2013 is helping the traded sector…though an appreciating exchange rate could complicate this.”
And therein lies the key to future rate moves in Australia. If inflation drops below 1 percent, or if the Aussie dollar gets above 78 or so cents, then the RBA will strongly consider another rate cut.
There was somewhat positive news from the ABS on the trade front for Australia. The seasonally-adjusted trade deficit was A$2.41 billion in July, compared to A$3.25 billion in June, and better than market expectations. This was driven largely by a big jump in gold exports, while imports did not rise, staying at A$28.8 billion. The latter figure was, in part, due to a 6 percent fall in imports on consumption goods. This helped the trade deficit, but one wonders whether it is a sign of reduced consumer confidence.
GDP growth in Australia came in at 0.5 percent for the June quarter, slightly below expectations of 0.6 percent. Still, that put year-on-year growth at 3.3 percent, leading Treasurer Scott Morrison to say:
“Today’s June Quarter National Accounts confirm that 2015-16 was Australia’s 25th consecutive year of economic growth and show our economy growing at the fastest rate in four years, but we must continue to push for stronger growth.”
As they say in baseball, “you can’t boo a home run,” but there was a little less to cheer about in the figures than it might seem at first glance. A big chunk of the growth came from pre election government spending, something that is unlikely to continue (note to ABS: don’t you want to seasonally adjust for this?) Our terms of trade also increased by 2.3%, aiding growth.
Nominal GDP growth remained below trend and below Treasury budget forecasts at an annual rate of 3.4%. This is the key figure for tax receipts. Remember that the budget – which still had a lot of flowing red ink involved in it – forecast a return to 5% nominal GDP growth over the coming years. That still looks a way off.
Speaking of growth, as the G20 met in China the IMF laid the groundwork for a lowering of its 3.1% global GDP growth target when it revises its figures in October. It warned the original goal would not be met: “without quick implementation of all announced measures and significant additional efforts to boost productivity, especially in advanced economies”. Translation: “Houston, we have a problem.” Again.
This week also saw the announced of the US Federal Reserve “beige book”. This odd-sounding object is a compendium of anecdotal evidence – collected by the constituent Federal Reserve Bank – published eight times per year.
The book provided further evidence, albeit anecdotal, that the US economy is slowly bouncing back:
“Reports from the twelve Federal Reserve Districts suggest that national economic activity continued to expand at a modest pace on balance during the reporting period of July through late August. Most Districts reported a "modest” or “moderate” pace of overall growth."
What we know for sure is that global growth is low and below expectations. It looks like the US economy is bouncing back. And GDP numbers in Australia look good, but when one looks one level below, the picture isn’t so good.
Richard Holden is professor of economics and PLuS Alliance Fellow, UNSW Australia and author for The Conversation. He can be contacted <a href="https://theconversation.com/profiles/richard-holden-118107" target="_blank">here</a>.
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