<a href="https://www.apartments.com.au/developers/sunland-group">Sunland Group</a> has officially lodged plans for its first Gold Coast apartment project since the departure of the Abedian family from the company three years ago, unveiling a new high-rise proposal for a prominent Broadbeach corner site on Old Burleigh Road.

The application was submitted by an entity directed by Tom Jamieson, stepson of longtime Sunland leader Soheil Abedian, and Riaz Rezvanipour, brother-in-law of Sahba Abedian, Soheil’s son.

Sunland acquired the 1,283 sqm site on the corner of Old Burleigh Road and Armrick Avenue for $9.5 million late last year and is now seeking approval for a <a href="https://www.apartments.com.au/new-apartments/99-101-old-burleigh-road-broadbeach-qld-4218">42-storey tower with 81 apartments</a>.

<img alt="First look: Sunland Group returns to Broadbeach with new Old Burleigh Road tower plans" data-entity-type="file" data-entity-uuid="fea2946d-90ee-4cfc-babe-2a8ad5db2cb6" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/pers.png?VersionId=BV0fihJw31nDIQ8ozY_h3GbS8mxDyhnm" />

Designed by <a href="https://www.apartments.com.au/architects/contreras-earl-architecture">Contreras Earl Architecture</a>, the proposed tower at 99-101 Old Burleigh Road would deliver a predominantly larger-format apartment mix aimed at the owner-occupier market. Plans include 17 two-bedroom apartments, 55 three-bedroom apartments, and nine four-bedroom residences across 35 residential levels.

The development also incorporates three basement levels, four podium parking levels, two levels of communal recreation facilities, and rooftop plant and equipment. A total of 189 car spaces are proposed, significantly exceeding the 90 spaces required under the planning scheme.

The architecture adopts a sculpted, curvilinear form, with deep wraparound balconies and integrated landscaping intended to soften the tower’s vertical expression. The planning report states the building’s “slender footprint/form provides a complimentary yet varied built form within the local streetscape” and contributes to “a varied, yet ordered skyline.”

Contreras Earl noted in its Architectural Statement that from the early stages, the project addressed a fundamental challenge: how to accommodate the required residential yield while avoiding the conventional model of a tower sitting on a rigid, fully resolved parking podium.

“The most direct response would have been to consolidate parking into a singular, flat podium and extrude a repetitive tower above,” the statement said. “While efficient, this approach would result in a consolidated built form with limited engagement with the surrounding landscape and public realm.”

Instead, the conventional podium model was “deliberately rejected”. The architects described the base of the building as “a landscaped architectural condition where structure, planting and circulation are integrated”.

“Rather than presenting a continuous built mass, the base of the building is articulated through a series of concrete planter elements that organise the podium into a fragmented system,” the statement said. “This approach reduces the perceived bulk of the lower levels while establishing a more permeable interface with the streetscape and adjacent open space.”

<img alt="Sunland" data-entity-type="file" data-entity-uuid="923fad8d-c960-4527-8fbe-975cf1ddf88d" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-25%20at%2010.32.03%E2%80%AFAM.png?VersionId=pngwb0hYOIUpq9vDw6F2EsOiVuHF3DiX" />

&nbsp;

The site sits within the High Density Residential Zone and inside the City of Gold Coast’s unrestricted “HX” building height area, where the planning framework anticipates intensified residential development tied to the expanding light rail corridor. The planning report notes the area is undergoing “transition toward more intense development forms” given its proximity to Broadbeach, Surfers Paradise, and high-frequency public transport infrastructure.

Positioned directly opposite Broadbeach Park and within walking distance of Florida Gardens light rail station, the development would sit among a rapidly evolving stretch of Old Burleigh Road that has become one of the Gold Coast’s most active apartment development corridors.

The application joins a growing pipeline of luxury residential projects reshaping Broadbeach, including nearby developments by 5Point Projects, Polycell, and Graya.

The planning report argues the project contributes toward the Gold Coast’s long-term housing targets under the South East Queensland Regional Plan, which forecasts the need for more than 100,000 additional high-rise dwellings across the city by 2046.

<section data-scroll-anchor="false" data-testid="conversation-turn-4" data-turn="assistant" data-turn-id="request-WEB:84a2af5e-d7cf-4ddf-922a-f4d44d6c6caa-1" data-turn-id-container="request-WEB:84a2af5e-d7cf-4ddf-922a-f4d44d6c6caa-1" dir="auto">
The Abedian family departed Sunland Group in late 2023, ending a four-decade association with the company, and subsequently established the private development firm Abedian &amp; Co. The group is currently delivering <a href="https://www.apartments.com.au/new-apartments/greenmount-residences-cnr-hill-street-and-marine-parade-coolangatta-qld-4225">Greenmount Residences</a> at Rainbow Bay and recently launched <a href="https://www.apartments.com.au/new-apartments/18-mary-avenue-14-18-mary-avenue-broadbeach-qld-4218">18 Mary Avenue</a> in Broadbeach.
</section>

Joel Robinson

First look: Sunland Group returns to Broadbeach new apartment market with new Old Burleigh Road tower plans

The Minns Labor Government has established the new Bays West Delivery Authority to lead the development&nbsp;of the Bays West Precinct and Blackwattle Bay Precinct.&nbsp;

The Authority is charged with creating Sydney’s newest precinct, a thriving, connected, sustainable hub with White Bay Power Station as its cultural heart. Its vision is to build on the area’s natural, cultural and industrial history to shape a vibrant new neighbourhood.

The precinct will deliver up to 8,500 well-located homes, including a minimum of 10 per cent affordable and essential worker homes. Combine new housing with public open space, opening public access to the waterfront for the first time in more than 100 years, while retaining important deep-water facilities to support Sydney’s working harbour.

Located just minutes from the Sydney CBD and connected to a world-class metro, ferry, walking and cycling links, the Bays West precinct will rebalance housing growth towards well-serviced inner-city locations and help tackle the state’s housing crisis.

The Bays West Delivery Authority,&nbsp;an agency of the Department of Planning, Housing and Infrastructure, will report to the NSW Minister for Lands and Property who already has oversight of major precinct renewal projects including at Blackwattle Bay and Barangaroo.

As part of the broader Bays West transformation, the Minns Government recently announced that a proposal from Lendlease to redevelop part of the Bays West Precinct has progressed to Stage 2 of the NSW Government’s unsolicited proposals process.

<img alt="Sydney" data-entity-type="file" data-entity-uuid="2ed71eb9-d8e8-4fa7-b9d1-de4531dcf2f3" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-25%20at%209.42.31%E2%80%AFAM.png?VersionId=IDryFIbped9SNDg72LEN_EecvhUsOPvp" />

The Minns Labor Government has also confirmed the Bays West precinct will have a new suburb name. This will be the first major suburb built in close proximity to Sydney’s CBD in decades and will encompass the area currently being referred to as Bays West, including Glebe Island and the White Bay Power Station. Served by a new Metro station just five minutes from the CBD, it will become one of the most populous suburbs in the Inner West and one of Sydney’s premier cultural destinations.

An early works program is taking shape, which&nbsp;includes the first stages of an international design competition.&nbsp;

The aim of the Bays West&nbsp;International&nbsp;Design Competition is to&nbsp;ensure design excellence is embedded in the project from the start. The competition will deliver an&nbsp;urban framework that defines the character, ambition and long-term identity of&nbsp;this&nbsp;former industrial precinct as it transitions to a vibrant, inclusive and sustainable residential&nbsp;neighbourhood.

The competition will be led by the Bays West Delivery Authority in partnership with Government Architect NSW.&nbsp;

It will launch with an invitation for a global Expressions of Interest, before moving to an invitation-only stage that will be assessed by a panel that&nbsp;will provide advice to Cabinet who will select a winner.

Premier of NSW, Chris Minns said the establishment of the new Authority is the first step in transforming the Bays West precinct into a vibrant, livable suburb minutes from the Sydney CBD and two stops from Hunter St Station on the Metro West line.

“The Authority will deliver well-located homes close to the heart of the city and integrate the new precinct with Blackwattle Bay and the new Sydney Fish Market.

“This is a generational opportunity to build a new suburb on the city’s edge and open the harbour foreshore to the public for the first time in a century.”&nbsp;

Minister for Lands and Property Steve Kamper said the new Bays West Delivery Authority established by the Minns Government will turbocharge the development of Sydney’s newest suburb.

“The Authority is working at a record pace to deliver an international design competition, planning pathways and a financial model so that this development benefits Sydney with well-designed homes in a central location, close to public transport, jobs, entertainment and essential services.

“If we want Sydney to stay liveable and affordable, we need to be bold about using underutilised government-owned land to deliver homes for the future while making sure essential working harbour functions can be accommodated.”

Bays West Delivery Authority established to "turbocharge" Sydney’s newest suburb

Around 400 additional homes could be built at Southwark Grounds on Port Road, lifting total site capacity from 1300 to around 1700 dwellings.

A recently approved code amendment would allow apartment towers of up to 14 storeys in some areas of Renewal SA’s redevelopment of the former West End Brewery.

Renewal SA Acting Chief Executive Shane Wingard said he welcomed the code amendment, with the increase in heights and homes making a positive impact on the supply of high-quality, well-connected housing close to the city.

“By going higher across some parts of Southwark Grounds, we are adding a substantial number of very well-located homes with little impact on project delivery time or planned open space,” Mr Wingard said.

Since the project officially launched in 2025, Mr Wingard said more than 12,000 enquiries had been received about living at Southwark Grounds.

“The very strong early interest we’ve seen since homes were first released in the precinct reinforces our plans to create more housing opportunities,” he said.

The Southwark Grounds code amendment was launched in December last year, with community engagement undertaken over five weeks from January.

It proposed increasing maximum building heights from eight to 14 storeys on the eastern section of Southwark Grounds, and to 12 storeys across the remainder of the site, with minimum building heights ranging from two to four storeys.

The code amendment was implemented through an Early Commencement policy in late January, allowing developers to quickly explore the viability of increased height and housing yield while other planning processes continue.

One of the first developers delivering apartment sites have already finalised redesigns to increase the number of apartments following the code amendment.

Samaras’ development adjacent to the future Colonel Light Park is now planning to deliver 125 apartments across 11 storeys, significantly greater than original plans of around 50 apartments across four storeys.

The developer is also exploring the potential for additional affordable housing outcomes.

Most of the apartments at Southwark Grounds will be delivered within a master-planned precinct on a large parcel of land on the eastern portion of the site, covering around two-thirds of its 8.4 hectares.

Wingard said detailed precinct planning over the coming months may identify further opportunities to increase yield further that could see total apartment numbers at Southwark Grounds, exceed this number.

Affordable homes at Southwark Grounds will also see a net increase, with Renewal SA maintaining its commitment to a minimum of 20 per cent affordable housing across the development.

&nbsp;

&nbsp;

Civil works have begun across the site, with construction under way on the first new roads surrounding a townhouse precinct in the south‑west corner of Southwark Grounds. This includes Renewal SA’s 17 Founder’s Row homes, which are on track for completion by Christmas.

“We expect to have people living at Southwark Grounds by the end of the year, so delivering roads and public spaces for those residents is among our highest priorities.”

Construction of 40 townhouses off Anderson Street, known as West Village and being delivered by Contour, is forecast to begin in mid‑2026. Kolabb’s Anderson Lane development will follow shortly after, delivering a further 26 townhouses.

Southwark Grounds is a state government‑led urban renewal project now set to deliver around 1,700 homes over the next decade.

Homes will be supported by a supermarket, a range of retail and hospitality offerings anchored by a revitalised Walkerville Brew Tower, a childcare centre, car parking and well‑connected public spaces.

400 new homes planned for Adelaide's former West End Brewery site

Brisbane developer&nbsp;<a href="https://www.apartments.com.au/developers/cavcorp">Cavcorp</a> has lodged plans for a new mixed-use residential development at <a href="https://www.apartments.com.au/new-apartments/55-wyandra-street-teneriffe-qld-4005">55 Wyandra Street</a>, Teneriffe, anchored by an 85-metre public laneway designed to reconnect the suburb’s riverfront with the Gasworks precinct.

The buildings, known as Teneriffe House and Teneriffe Lane, would replace the existing Queensland Cotton head office site with a 15-storey residential tower transitioning to eight storeys toward Helen Street. The project has been designed by Plazibat Architects and lodged as a code assessable development application for 93 apartments across a 3,401 sqm mixed-use site within the Newstead and Teneriffe Waterfront neighbourhood plan.

Central to the scheme is the transformation of an existing service easement into a publicly accessible cross-block connection linking Wyandra and Helen Streets. Cavcorp says the new laneway will act as both a pedestrian shortcut and a landscaped civic space between the Teneriffe Riverwalk, ferry terminal, and Gasworks precinct.

<img alt="First Look: Cavcorp unveils Teneriffe House and Teneriffe Lane plans for landmark wellness tower in Teneriffe" data-entity-type="file" data-entity-uuid="26e7f058-b065-4de8-b13d-a2b8cb64dfcc" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/bldg.png?VersionId=sELS0ZKYi361oYipUa1BIKfe_.DLZoFV" />

“The revised proposal delivers a legacy public-realm cross-block link, permanently secured for community use, transforming an existing private easement into a safe, high-quality pedestrian connection between the Teneriffe heritage riverwalk and the Gasworks–Long Island precinct,” the planning report states.

The laneway will sit beneath a large subtropical loggia integrated into the podium levels of the development. The design incorporates deep landscaping, water gardens, lobby spaces, business lounges, and ground-floor apartments to create what Cavcorp describes as a climate-responsive “urban verandah.”

The tower itself has been designed as a slender form with recessed floorplates and curved translucent corners inspired by contemporary Japanese architecture. The building height aligns with the Commercial Road precinct controls, which permit towers up to 15 storeys within proximity to Longland Street.

<img alt="First Look: Cavcorp unveils Teneriffe House and Teneriffe Lane plans for landmark wellness tower in Teneriffe" data-entity-type="file" data-entity-uuid="a8a17d40-43b6-4718-b3fd-67676fcbb485" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/pers%202_1.png?VersionId=i3VwDtp5AmL_8InW7w4qRbDFEpb744Jt" />

The project will comprise a mix of larger-format apartments aimed at owner-occupiers, downsizers, and families. The proposed apartment mix includes 11 loggia apartments across the lower levels, 50 four-bedroom Sky-Terrace apartments from levels three to seven, and 32 Sky-Pool Homes occupying the upper tower levels. The Sky-Pool Homes will feature private thermal plunge pools integrated into oversized balconies.

According to the application, the apartments are intended to reinterpret the scale and character of Teneriffe’s woolstore conversions and Queensland homes within a vertical residential format.

“The sky-pool homes build on Cavcorp’s previous projects and introduce a distinct apartment typology to Teneriffe, informed by both local and international precedent and responding to an identified market demand for enhanced safety, space and amenity,” the planning submission notes.

A major focus of the proposal is its five-level wellness and lifestyle offering, extending from the basement through to the rooftop.

Amenities proposed include a rooftop Swim &amp; Racquet Club with a 25-metre Olympic lap pool and tennis court, coworking spaces and libraries, golf simulators, wine storage, concierge facilities, business lounges, pet wash areas, and rooftop longevity-focused wellness spaces with spas, outdoor fitness zones, and landscaped terraces.

<img alt="First Look: Cavcorp unveils Teneriffe House and Teneriffe Lane plans for landmark wellness tower in Teneriffe" data-entity-type="file" data-entity-uuid="944b352c-49b9-4247-a4c6-5967b4b69fda" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/amenity.png?VersionId=Ed_qKjAtMwFT.5gfl3jiA9QwdWxSMsaX" />

All parking will be concealed within basement levels accessed from Wyandra and Helen Streets. Cavcorp says the deep-basement engineering approach allows the entire ground plane to prioritise landscaping, pedestrian movement, and active frontage rather than vehicle infrastructure.

The development continues Cavcorp’s concentration in Newstead and Teneriffe, where the Brisbane developer has delivered a number of apartment projects including Lucent, Le Bain, and Luminare, as well as the Long Island Wellness Precinct nearby. Several of those projects have received national design and architecture awards, including recognition under Brisbane’s “Buildings that Breathe” program.

Cavcorp unveils wellness-focused Teneriffe House and Teneriffe Lane apartment buildings

Focus Group Investments has lodged plans for a new apartment development at <a href="https://www.apartments.com.au/new-apartments/64-70-hanover-street-fitzroy-vic-3065">64–70 Hanover Street</a> in Fitzroy, seeking to utilise the Victorian Government’s recently introduced Great Design Fast Track pathway to accelerate approvals for the project.

The proposal is among the latest developments to emerge through the state-led initiative, which was established to fast-track well-designed residential projects in activity centres and transport-connected inner-city locations. The pathway allows qualifying developments that meet elevated design and housing benchmarks to bypass traditional council planning timeframes and instead be assessed directly by the Department of Transport and Planning.

Designed by SJB, the development will comprise a mix of apartments above activated lower levels, with a strong focus on architectural articulation, landscaping, and communal amenity. The design response seeks to balance the industrial character of Richmond’s former warehouse precincts with a more contemporary residential form.

<img alt="First look: Focus Group Investments taps Victoria’s Great Design Fast Track for Richmond apartments" data-entity-type="file" data-entity-uuid="abea51cc-d85b-479e-9aef-a589f3b37ca7" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/ground.png?VersionId=e1Kf8EyPWwyiVumtqQ4rM5S4GpOR3CCz" />

Proposed are 63 new dwellings, a wide ranging mix of studio, one-, two-, and three-bedroom apartments, and townhouses and duplexes. They will be spread across a part-three, part-eight storey building.

The Planning and Urban Context Report by Tract says the development is of an "exemplary architectural standard" and has been carefully crafted by SJB Architects.

"Dwellings&nbsp;will benefit from excellent access to natural light, cross-ventilation opportunities and extensive communal space," the report noted.

The architectural material highlights the project’s integration of landscaped elements and communal spaces throughout the building. The proposal also incorporates sustainability initiatives aligned with the Victorian Government’s push for higher-performing apartment developments under the fast-track program.

The Great Design Fast Track was unveiled by the Victorian Government in 2024 as part of a broader housing supply strategy aimed at accelerating the delivery of new homes. Projects assessed through the pathway must demonstrate high-quality architecture, sustainability outcomes, and housing diversity while being located close to public transport and existing infrastructure.

<img alt="First look: Focus Group Investments taps Victoria’s Great Design Fast Track for Richmond apartments" data-entity-type="file" data-entity-uuid="afdbe834-8dc4-4a77-a943-ba07bc927348" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/site_11.png?VersionId=0J657j.TaChAZfp93wqJYBTqSsnREJx2" />

Focus Group, founder and led by Paul De Lutiis, is increasingly active across Melbourne’s inner suburbs, targeting well-connected urban renewal locations suited to medium and higher-density residential development. The Fitzroy proposal continues that strategy, leveraging the area’s strong transport links, established retail amenity, and proximity to the CBD.

Fitzroy has been one of the most popular spots for developers and buyers in recent years. The likes of PACE Development Group, SMA Projects, Crema Group and Chapter Group, currently selling projects in the suburb.

First look: Focus Group Investments taps Victoria’s Great Design Fast Track for Fitzroy apartments

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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The Reserve Bank Board does not see a strong case for a near-term adjustment in monetary policy, the Reserve Bank of Australia governor Philip Lowe says.
After noting this week's global financial market turmoil hadn't shaken his optimism that Australia's economy will rebound this year, Dr Lowe said the next move in official Australian interest rates "will be up, not down."
But Dr Lowe indicated that the Reserve Bank was unlikely to follow in lock-step with international moves to tighten monetary policy across global central banks.
<div class="cq-article-content-paras section">
"Just as we did not move in lock-step on the way down, we don't need to do so in the other direction," he told the A50 Australian Economic Forum gathering of global investors hosted by Citigroup in Sydney last night.
<div>
Dr Lowe said he expects there to be "only gradual" progress in reducing the jobless rate and having inflation return to the mid-point of his 2-3 per cent target range.
"If we do make that progress, at some point it will be appropriate for interest rates in Australia to also start moving up.
"If this is how things play out, the likely timing will depend upon the extent and pace of the progress that we make.
</div>
<div>"While we do expect steady progress, that progress is likely to be only gradual.</div>
<div> </div>
<div>"Given this, the Reserve Bank board does not see a strong case for a near-term adjustment in monetary policy."</div>
<div class="cq-article-content-paras section">
The speech included a suggestion that wages growth would eventually pick-up.
"Stronger growth in real wages would also boost household incomes and create a stronger sense of shared prosperity."
On the housing market, he said that prices are up by only around 3 per cent over the past year, with investors reducing borrowing in interest-only loans. <cite> </cite>
"A while back we had become quite concerned about some of the trends in household borrowing, including very fast growth in lending to investors and the high share of loans being made that did not require regular repayment of principal.
"Our concern was not that developments in household balance sheets posed a risk to the stability of the banking system.
"Rather, it was more that they posed a broader macro stability risk – that is, the day might come, when faced with bad economic news, households feel they have borrowed too much and respond by cutting their spending sharply, damaging the overall economy.
"We have worked closely with APRA, including through the Council of Financial Regulators, to address these issues.
"This work, together with other steps taken by APRA, has helped improve the quality of lending in Australia."
In the housing market, dr Lowe said there has also been a change.
"National measures of housing prices are up by only around 3% over the past year, a marked change from the situation a couple of years ago.
"This change is most pronounced in Sydney, where prices are no longer rising and conditions have also cooled in Melbourne.
"These changes in the housing market have reduced the incentive to borrow at low interest rates to invest in an asset whose price is increasing quickly.'
</div>
</div>
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jchancellor-FAypfDUnLy

No near-term rate hike foreseen by RBA governor Phillip Lowe

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<a href="http://www.afr.com/business/banking-and-finance/financial-services/westpac-invests-25m-more-in-uno-in-mortgage-broking-play-20180202-h0sehc"></a>Westpac Banking Corp has doubled its $25 million investment on the digital mortgage broker Uno Home Loans.
It has invested another $25 million for the start-up's brand marketing and sales teams which is currently sending two-thirds of its loans to the non-major banks.
Westpac now owns around 81% of Uno, which seeks a 10% share of the broking market over the next 10 years.
Westpac's head of strategy, Gary Thursby, said Uno presents a different way to create opportunities.
Uno, which was established two years ago, is recruiting a new CEO as the Uno founder Vincent Turner moves to a new role of chief innovation officer, leading product development.
Uno does not disclose loan volumes or customer numbers,
Uno has 22 lenders on its panel, including the four majors. 
Westpac loans do not get favourable treatment on the platform, Thursby told Fairfax Media.
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j.ballantyne1990-6AQqhLzZaK

Westpac invests extra $25 million in digital mortgage broker Uno 

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GUEST OBSERVER
This is an edited extract from RBA Governor Philip Lowe's speech at the recent A50 Dinner.
For a while now we have been expecting the Australian economy to grow more strongly in 2018 and 2019 than it did, on average, over recent years. There are a number of reasons for this. We are all but through the decline in mining investment to more normal levels, there is a large pipeline of urban infrastructure work to be done, the global economy is experiencing a solid upswing, commodity prices are up and financial conditions remain accommodative. All this is helping.
The RBA will be releasing our latest economic forecasts tomorrow in the <cite>Statement on Monetary Policy</cite>. These forecasts will be largely unchanged from the previous set of forecasts. The RBA's central scenario remains for the Australian economy to grow at an average rate of a bit above 3% over the next couple of years. This outlook has not been affected by the volatility in the stock market over recent days. Indeed, it is worth keeping in mind that the catalyst for this volatility was a reassessment in financial markets of the implications of strong growth for inflation in the United States. For some time, many investors had been working under the assumptions that unusually low inflation and unusually low volatility in asset prices would persist, even with above-trend growth at a time of low unemployment. A reassessment of these assumptions now appears to be taking place against the backdrop of strong economic conditions globally.
Looking beyond these financial events, the data we have received on the real economy over the summer have been consistent with our assessment that GDP growth will pick up over 2018. Taken together, the recent domestic and global data on the real economy suggest that 2018 has started on a more positive note than did recent years.
Particularly noteworthy has been the labour market, with employment increasing by 3¼% over the past year. This strong performance has been accompanied by a large number of people joining the workforce, so that the participation rate has returned to around the level reached at the peak of the mining investment boom. There have been noticeable increases in the participation rates of both women and older Australians. At the same time, the unemployment rate has declined to around 5½% and a further gradual decline is expected over the next couple of years.
Business conditions are around their highest level since before the global financial crisis and there has also been an improvement in business confidence. Non-mining business investment has been stronger than we had expected a year ago and the investment outlook has brightened. One ongoing area of uncertainty, though, is consumer spending. Household incomes are growing slowly and debt levels are high. I will return to these issues in a moment.
On the prices front, we continue to experience subdued outcomes, although inflation is higher than it was a year ago. Over 2017, inflation was a bit under 2%, in both headline and underlying terms. Last week's data provided further confirmation of trends we have been witnessing for some time. Increased competition in retailing is contributing to price declines for many consumer durables. And subdued wage increases are contributing to low rates of inflation for a range of market services. The rate of rent inflation also remains low.
The immediate outlook is for a continuation of these broad trends, but for inflation to pick up gradually as the economy and labour market strengthen. We are expecting CPI inflation to be in the 2 to 2½% range over the next couple of years. Underlying inflation, which is less affected by the scheduled increases in tobacco excise, is expected to be a bit lower than CPI inflation.
I would now like to touch on a couple of issues that we are paying close attention to and that could have a significant bearing on the outlook for growth and inflation over the next couple of years.
The first of these is wage growth. Not only are most workers experiencing low wage increases, but following the resources boom some people have moved out of highly paid jobs. The result is that after many years of Australians experiencing strong growth in real incomes, growth in average nominal and real incomes has been much slower over recent times.
The effects of low real wage growth on the economy work in different directions. On the one hand, the restrained growth in labour costs is one of the factors that has boosted employment. But, on the other hand, the slow growth in incomes has weighed on spending, including by making it harder for some households to pay down their debts.
On balance, though, in the current environment, some pick-up in wage growth would be a welcome development. Ideally, this would be on the back of stronger productivity growth. But even if productivity growth were to be around the average of recent years, a faster rate of wage increase should be possible. Indeed, a lift in wage growth is likely to be necessary for inflation to average around the midpoint of the 2–3% medium-term inflation target. Stronger growth in real wages would also boost household incomes and create a stronger sense of shared prosperity.
Our central scenario is for this pick-up in wage growth to occur as the economy strengthens, but to do so only gradually. Through our liaison with business we hear some reports of wage pressures emerging in pockets where labour markets are tight. We expect that over time we will hear more such reports. After all, the laws of supply and demand still work.
I have spoken previously about the factors affecting wages, and they have a global dimension. Globalisation and advances in technology have increased competition, and greater competition means less pricing power. Given the strength and pervasiveness of these forces, it is unlikely that they are going to disappear quickly, so the pick-up in wage growth is likely to be fairly gradual.
A second factor shaping the outlook is the level of household debt. Indeed, the high level of household debt in Australia is remarked upon by international investors almost as often as the fact of 26 years of growth.
A while back we had become quite concerned about some of the trends in household borrowing, including very fast growth in lending to investors and the high share of loans being made that did not require regular repayment of principal. Our concern was not that developments in household balance sheets posed a risk to the stability of the banking system. Rather, it was more that they posed a broader macro stability risk – that is, the day might come, when faced with bad economic news, households feel they have borrowed too much and respond by cutting their spending sharply, damaging the overall economy.
We have worked closely with APRA, including through the Council of Financial Regulators, to address these issues. This work, together with other steps taken by APRA, has helped improve the quality of lending in Australia. In the housing market, there has also been a change. National measures of housing prices are up by only around 3% over the past year, a marked change from the situation a couple of years ago. This change is most pronounced in Sydney, where prices are no longer rising and conditions have also cooled in Melbourne. These changes in the housing market have reduced the incentive to borrow at low interest rates to invest in an asset whose price is increasing quickly.
On balance then, from a macro stability perspective, the situation looks less risky than it was a while ago. We do, however, continue to watch household balance sheets carefully as there are still risks here.
Challenges
I would now like to move to the second question that I get asked frequently. Beyond the short term, what are the challenges facing the Australian economy?
When I spoke at this forum last year I talked about four challenges:
<ul>
<li>the need to reinvigorate productivity growth</li>
<li>finding ways of capitalising on the opportunities in Asia</li>
<li>providing the infrastructure needed for a growing population and to support productivity</li>
<li>making sure that our public finances were on the right track and that our tax system was internationally competitive.</li>
</ul>
This is by no means a complete list; at a minimum, you could add some of the issues I have just spoken about. But it remains a reasonable list and I thought it useful to offer an update.
Improving our productivity remains the key to further improvement in our living standards. Average growth in labour productivity has been a bit higher since the peak in the mining boom than it was in the preceding five years, although capital deepening has been an important part of the story here. Late last year the Productivity Commission provided some guidance about how we might lift our performance with the release of the first of its five-yearly reports – the <cite>Shifting the Dial</cite> report. This is another example of Australian policy institutions tackling important issues through serious and systematic reviews. A central theme of the report is the importance of services and cities. Most Australians now work in the service sector and live in cities, so how we deliver services and how our cities function have a major influence on our future living standards. This is yet another area where we will benefit from a strong innovation mindset.
On building our links with Asia, we continue to see progress. New trade agreements are opening up new opportunities for Australian business in the region and the share of Australia's exports going to Asia continues to rise. Last year, the value of Australia's merchandise exports increased by more than 15% to each of China, Japan, Korea, Taiwan, Indonesia and the Philippines. Exports of resources have been an important part of the story, but it is broader than that, with strong growth in exports of services too. Person to person links also continue to deepen, with half of all international visitors to Australia last year coming from Asia.
On infrastructure, the story is also a positive one. Increased public investment in infrastructure in our largest states is currently providing a boost to the economy and it is also building productive capacity for the future. With our population continuing to grow at a relatively fast rate for an advanced economy – around 1½% a year – this is an area for us to continue to focus on. As we do this, we need to pay close attention to the governance of decisions around project selection, the control of construction costs, usage pricing and the allocation of risk between the public and private sectors. Good governance is important in these areas to support sound decision-making and to retain public trust and confidence in governments' spending plans.
Finally, on the fiscal side, the latest estimates are that things are on track to meet the Australian Government's projection of returning the budget to balance by 2020/21. Australia's record of careful management of public finances meant that when the financial crisis hit a decade ago, fiscal policy was able to play a role stabilising the economy. Ensuring that our public finances are on a sustainable footing is important to ensuring that we have similar flexibility in the future. The issue of how the tax system affects the competitiveness of Australia as a destination for investment is one of ongoing political debate. There have been some cuts in company tax and parliament is considering further changes.
Reduction of Monetary Stimulus Globally
I would now like to turn to the final question that I often get asked: as other central banks raise interest rates, won't the RBA have to, too?
It is understandable that this question is asked. Over time, there is a common element to movements in interest rates around the world. The level of interest rates in all countries is influenced by movements in the neutral global real interest rate. During the financial crisis, the neutral global rate fell and this has had an important influence on the setting of interest rates in all countries, including here in Australia. If we had not lowered our interest rates as global rates fell, the Australian economy would have grown by less and inflation would have been even lower than it turned out to be.
The fact that there is a common element in interest rates, however, does not mean that interest rates need to move in lock-step with one another. Countries with a floating exchange rate, like Australia, still retain considerable flexibility to set interest rates based on their domestic considerations. We did not lower our interest rates to the extraordinarily low levels seen elsewhere after the financial crisis. Our circumstances were different: we didn't have a meltdown in the financial system and we experienced a very large cycle in commodity prices and mining investment.
Just as we did not move in lock-step on the way down, we don't need to do so in the other direction. It's understandable that some other central banks are raising rates. They lowered their rates by more than us and, in a number of countries, the unemployment rate is now below conventional estimates of full employment at a time when above-trend growth is expected.
Our circumstances are a little different. We are still some way from what could be considered full employment and our central scenario for inflation is for it to remain below the midpoint of the medium-term target range for the next couple of years.
We expect, though, to make further progress in reducing unemployment and having inflation return to the midpoint of the target range. If we do make that progress, at some point it will be appropriate for interest rates in Australia to also start moving up. So, given recent developments in Australia and overseas, it is likely that the next move in interest rates in Australia will be up, not down. If this is how things play out, the likely timing will depend upon the extent and pace of the progress that we make. As I have discussed, while we do expect steady progress, that progress is likely to be only gradual. Given this, the Reserve Bank Board does not see a strong case for a near-term adjustment in monetary policy. It will of course keep that judgement under review at future meetings.
I hope that these remarks this evening have helped you understand the Australian economy, our opportunities and some of the challenges we face. I look forward to answering your questions.
Philip Lowe is Governor of the Reserve Bank of Australia.
Read the full <a href="https://www.rba.gov.au/speeches/2018/sp-gov-2018-02-08" target="_blank">speech to A50 dinner</a>.
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po-LsXgBTHBmX

The next few years for the Australian economy: RBA Governor Philip Lowe

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The RBA has released its February chart pack which contributed to their decision to leave cash rates on hold again at 1.5 percent.
The full pack can be <a href="http://www.rba.gov.au/chart-pack/pdf/chart-pack.pdf?v=2018-02-08-08-16-04" target="_blank">found here.</a> 
Household debt is still outstripping household prices.
Click here <a href="https://www.propertyobserver.com.au/images/2018/2/8/prices%20and%20debt.jpg" target="_blank">to enlarge.</a>
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2018/2/8/prices%20and%20debt.jpg" alt="">
 
The CPI was lower than anticipated when the ABS released its inflation data last week.
Click here <a href="https://www.propertyobserver.com.au/images/2018/2/8/CPI.jpg" target="_blank">to enlarge.</a>
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2018/2/8/CPI.jpg" alt="">
The gap between disposable income and household consumption isn't getting any closer.
Click here <a href="https://www.propertyobserver.com.au/images/2018/2/8/consumption.jpg" target="_blank">to enlarge.</a>
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2018/2/8/consumption.jpg" alt="">
 
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Three charts that guided the RBA to leave the cash rate unchanged

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The CBA home loan arrears jumped in WA in the last six months of 2017, triggering the lender's overall bad loan book to the highest level in four years. 
Australia's largest mortgage lender reported home loans 90 or more days in arrears accounted for about 0.6% of its loan book.
The proportion of bad loans in WA rose to about 1.3%, well above Queensland, the next closest mining region in terms of arrears.
Click here <a href="https://www.propertyobserver.com.au/images/2018/2/8/arrears%20wa.jpg" target="_blank">to enlarge.</a>
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2018/2/8/arrears%20wa.jpg" alt="">
"Loan impairment expense was $356 million, an increase of 1% on the prior comparative period," CBA said.
"The result was mainly driven by increased home loan and personal loan collective provisions, which include the impact of slightly higher home loan arrears, predominantly in WA."
The figures show the continuing fallout of the WA housing market with the proportion of bad home loans having more than doubled over the past three years.
CBA reduced its exposure to the WA market over the six-month period.
Click here <a href="https://www.propertyobserver.com.au/images/2018/2/8/arrears.jpg" target="_blank">to enlarge.</a>
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2018/2/8/arrears.jpg" alt="">
The balance of home loans in the state fell 0.3% to account for 16% of the bank's total home loan book. 
Last August, Western Australia was noted as having the most problem home loans in Australia.
The Perth property market ended 2017 on a positive note, with December quarter data showing improvements in median prices, sales activity, listing levels and average selling days, according to REIWA President Hayden Groves. 
“The Perth market found its floor and stabilised in the back half of 2017,” Mr Groves said. 
Perth’s preliminary median house price increased 1.2 per cent to $516,000 in the December quarter 2017. 
“Once all sales have settled, we expect the final December quarter median to lift to $520,000, which is a notable improvement on the September quarter median of $510,000. 
“On an annual basis, the Perth market is very stable. We’ve observed consistent price levels between the December 2016 and 2017 quarters which is a strong signifier the market has turned a corner,” Mr Groves said. 
Perth’s median unit price is $405,000 for the December 2017 quarter which is a 1.3 per cent increase on the September quarter. 
“It’s encouraging to see Perth’s house and unit medians increase over the quarter because it suggests one sector hasn’t recovered at the expense of the other,” Mr Groves said. 
There were 4,946 dwelling sales in Perth in the December quarter. 
Mr Groves said this figure was expected to lift to 6,700 once all sales had settled, putting it significantly above the September quarter sales figure.
“Traditionally, the September quarter outperforms the December quarter, but that wasn’t the case in 2017. The December quarter is on track to record 14 per cent more sales than the September quarter,” Mr Groves said. 
REIWA analysis shows the composition of sales shifted in the December quarter in Perth, with more transactions occurring above $700,000. 
“We’ve observed a surge of activity in Perth’s aspirational suburbs, with buyers recognising there is good opportunity to secure a home in these areas which might have previously been considered unattainable by many,” Mr Groves said. 
“This spike in sales above $700,000 has also contributed to Perth’s median house price increasing over the quarter.” 
There were 13,088 properties for sale in Perth at the end of the December quarter. 
Mr Groves said this was on par with the September quarter figure and six per cent less than the December 2016 quarter figure. 
“There were 800 fewer listings in Perth at the end of 2017 than there was in 2016 and some 1,300 less than there were at the same time 2015. We have consistently seen stock levels decline over the last two years as the market trends towards parity,” Mr Groves said. 
“Declining listing levels combined with notable improvements in sales activity has helped restore net-demand. With buyer activity increasing, stock levels are being absorbed faster,” Mr Groves said. 
It was 10 days faster to sell in the December quarter than it was in the September quarter, with it taking on average 60 days to secure a sale. 
“It’s been two years since it was this quick to sell in Perth. The combination of sellers’ preparedness to meet the market and buyer appetite for well-priced property has significantly shortened days-on-market,” Mr Groves said.
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CBA home loan mortgage delinquencies rise in WA

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The minutes of the monetary policy meeting of the Reserve bank Board on 5 December contains some noteworthy changes in the wording relative to the November minutes.
In describing the key issue for the Board, the following sentence was used in the concluding paragraph: “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”.
The sentence was used “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”. This is the same wording that was used at the conclusion of the minutes to the October meeting, whereas in November “at this meeting” was excluded. A reasonable person might interpret the decision to include “at this meeting” as indicating a greater urgency about moving policy. However, we notice that this term has been used intermittently over the course of 2017 (March, June, July and October). Consequently it would be inappropriate to read anything into the use of this term.
The Board maintains its forecast that wage growth will “increase gradually over the next year or so”. But, of course, we are aware of the official forecasts that underlying inflation will hold at 1.75% in 2018, only lifting to 2% in 2019. As we have seen in recent speeches from the Governor, much store is being given to surveys which indicate that “more firms had been reporting difficulty in finding suitable labour”. This is not surprising given that full-time employment is currently growing at around its fastest pace in a decade although this is partly offset by the rise in the participation rate, leaving the unemployment rate at 5.4%, still well-above the generally accepted full-employment level of 5%.
The Bank seems somewhat tentative that the current strong labour market will continue with the outlook indicating that “employment growth would be somewhat above average over the next few quarters”.
Other encouraging signals from the economy continue around business investment with “investment intentions had been revised higher, particularly for the business services sector."
At the meeting the Board was also presented with scenarios under which public investment was higher than currently forecast over the following three years. These scenarios were encouraging, particularly around higher profits; worker’s incomes; productivity; and private investment prospects. With housing markets slowing substantially, the finances of state governments are likely to come under some pressure with the expected result that scenarios for public investment lifting even further than currently expected seem unlikely to prove accurate.
Of course, the source of concern remains the consumer. The meeting occurred the day before the release of the September quarter national accounts which showed that consumer spending growth slowed to the weakest we have seen since the December quarter 2008. The minutes report that “household consumption continued to be a significant risk, given that household incomes were growing slowly and debt levels were high”. This is a more concerning description of the outlook compared to November which used the term “uncertain.”
The slowdown in the Sydney housing market is recognised with prices declining. House price growth was reported as easing in Melbourne, while prices in Perth and Brisbane had been unchanged. The minutes note that “growth in household credit had slowed somewhat, but members agreed that household balance sheets still warranted careful monitoring”. It is worth noting that in response to a question around household leverage which I asked the Governor at a public dinner on November 21, he noted that household credit growth of around 6% was “okay”.
The developments described in the minutes are consistent with our own view that household credit growth will slow to around 4½% in 2018, still modestly boosting household leverage due to ongoing weak income growth but not representing any threat to financial stability.
In the Governor’s statement following the December 5 Board meeting, he changed the wording around the Australian dollar to indicate that there was no longer any official sensitivity around the level of the AUD; “the Australian dollar remains within the range that it has been in over the past few years”. The minutes provide a little more colour on this issue, noting that “members noted that while the Australian dollar had depreciated by around 5% in trade weighted terms over this period (November) it had moved within a relatively narrow range over the previous 2½ years and was a little higher than the level of early 2016”. This confirms the reasonable view that the Bank is relatively comfortable with the current level of the AUD. Despite a generally upbeat assessment of the world economy, the minutes confirm that the Bank still expects Australia’s terms of trade to fall over the forecast period. No doubt the Bank’s ongoing caution around China is a factor here. The minutes point out a tightening in financial market conditions in direct response to managing risks in the shadow banking sector. These concerns around China’s financial stability have been a consistent theme from the Bank for some time. Conclusion: The concluding paragraph in the minutes clearly lays out the compass for policy. Strength in the labour market and expected associated spill-over effects is expected to continue, although policy will only be adjusted when it is clear that wage and price pressures return.
Westpac has a more cautious view on the sustainability of the current jobs and business environment while expecting that soft income growth and high debt levels will continue to constrain the consumer. We note that even the RBA now describes household consumption as  a “significant risk”. Accordingly, we do not expect to see the necessary conditions which are outlined by the RBA to emerge over the course of 2018.
We retain our view that the overnight cash rate will remain on hold in 2018 and 2019.
BILL EVANS is chief economist of <a href="https://www.westpac.com.au/" target="_blank">Westpac</a>.
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bevans-rYk9SxEa4r

Cash rate will remain on hold in 2018 and 2019: Westpac's Bill Evans

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At its meeting today, the Board decided to leave the cash rate unchanged at 1.50 per cent.
There was a broad-based pick-up in the global economy in 2017. A number of advanced economies are growing at an above-trend rate and unemployment rates are low. Growth has also picked up in the Asian economies, partly supported by increased international trade. The Chinese economy continues to grow solidly, with the authorities paying increased attention to the risks in the financial sector and the sustainability of growth.
The pick-up in the global economy has contributed to a rise in oil and other commodity prices over recent months. Even so, Australia's terms of trade are expected to decline over the next couple of years, but remain at a relatively high level.
Globally, inflation remains low, although higher commodity prices and tight labour markets are likely to see inflation increase over the next couple of years. Long-term bond yields have risen but are still low. As conditions have improved in the global economy, a number of central banks have withdrawn some monetary stimulus. Financial conditions remain expansionary, with credit spreads narrow.
The Bank's central forecast for the Australian economy is for GDP growth to pick up, to average a bit above 3 per cent over the next couple of years. The data over the summer have been consistent with this outlook. Business conditions are positive and the outlook for non-mining business investment has improved. 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.
Employment grew strongly over 2017 and the unemployment rate declined. Employment has been rising in all states and has been accompanied by a significant rise in labour force participation. The various forward-looking indicators continue to point to solid growth in employment over the period ahead, with a further gradual reduction in the unemployment rate expected. Notwithstanding the improving labour market, wage growth remains low. This is likely to continue for a while yet, although the stronger economy should see some lift in wage growth over time. There are reports that some employers are finding it more difficult to hire workers with the necessary skills.
Inflation is low, with both CPI and underlying inflation running a little below 2 per cent. Inflation is likely to remain low for some time, reflecting low growth in labour costs and strong competition in retailing. A gradual pick-up in inflation is, however, expected as the economy strengthens. The central forecast is for CPI inflation to be a bit above 2 per cent in 2018.
On a trade-weighted basis, the Australian dollar remains within the range that it has been in over the past two years. An appreciating exchange rate would be expected to result in a slower pick-up in economic activity and inflation than currently forecast.
Nationwide measures of housing prices are little changed over the past six months, with prices having recorded falls in some areas. 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, APRA introduced a number of supervisory measures. Tighter credit standards have also been helpful in containing the build-up of risk in household balance sheets.
The low level of interest rates is continuing to support the Australian economy. Further progress in reducing unemployment and having inflation return to target is expected, although this progress is likely to be gradual. 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.
Click here to read the <a href="http://www.rba.gov.au/media-releases/2018/mr-18-01" target="_blank">governor's statement.</a>
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Little property price change noted: RBA February 2018 Governor's statement 

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The first meeting of the Reserve Bank of Australia for 2018 saw no change in the official cash rate.
The central bank's last move saw it go to 1.5 percent at the August 2016 meeting, so rates have been held steady for 17 meetings.
It is the longest run of steady rates as there were 16 meetings (inclusive) between their August 2013 meeting and December 2014 where they held at 2.5 percent. There was another run of 16 meetings between July 2002 and October 2003 where rates were held at 4.75 percent.
Almost all economists predicted a hold at the first meeting of the year.
Most don't foresee any change throughout much of 2018.
Tim Lawless, CoreLogic's head of research and analytics, said the hold decision was expected.
"With headline inflation remaining below the RBA’s target range of 2-3%, housing markets moving through a controlled slow down, a higher than forecast Australian dollar and household debt at record highs, the hold decision from the Reserve Bank was widely expected.
"With national dwelling values now drifting lower, the RBA can now focus more on economic trends outside of the housing market when contemplating monetary policy settings. 
According to CoreLogic’s’ hedonic indices, the heat has come out of the Australian housing market, with national dwelling values falling by 0.7% since peaking in September last year.
Falling dwelling values are the result of tighter credit conditions rather than any changes in monetary policy settings.   Despite the stable cash rate, investors have seen an average 40 basis points increase in their mortgage rates due to higher capital requirements from lenders, which has helped to slow investment demand and quell rapidly rising home values.
Interest rates won’t stay at their record lows forever.  Financial markets have fully priced a 25 basis point rise by February next year.  In the meantime, we expect housing market demand to be supported by low mortgage rates and high rates of population growth, despite the easing in capital growth rates that have been most evident in Sydney and, to a lesser extent, Melbourne dwellings. 
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jonathanchancellor-7SQnKwU6yx

RBA carries over same official cash rate into third year after February 2018 decision 

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ASIC has banned Michael Wilkins, of Watanobbi, NSW, from engaging in credit activities for three years.
Mr Wilkins was a mortgage broker and helped clients to arrange finance to purchase properties. ASIC found that on five occasions in June and July 2010, Mr Wilkins submitted loan applications on behalf of clients in which he deliberately overstated their savings by between about $130,000 and $179,000.
By submitting these loan applications, ASIC found that Mr Wilkins gave to the bank information or a document that was false or misleading.
Mr Wilkins has the right to appeal to the Administrative Appeals Tribunal for a review of ASIC's decision.
Background
Mr Wilkins' banning arises from ASIC's ongoing investigation into a group of companies and people known as ‘the Heritage Group’.  The Heritage Group advised its clients to set up self-managed superannuation funds (SMSF) and buy property with their superannuation.
In the course of its investigation into the Heritage Group, ASIC also achieved the following outcomes:
<ul>
<li>permanently banning Mr John Dimitropoulos from providing financial services or engaging in credit activity (refer: <a href="http://asic.gov.au/about-asic/media-centre/find-a-media-release/2017-releases/17-322mr-john-dimitropoulos-permanently-banned-by-asic-from-financial-services-and-credit-in-connection-with-property-and-smsf-spruiking/" target="_blank">17-322MR</a>). Mr Dimitropoulos appealed to the Administrative Appeals Tribunal. The review is yet to be heard;</li>
<li>cancelling the credit licence of a company formerly called Heritage Financial Solutions Australia Pty Ltd and Heritage – Freedom &amp; Security Pty Ltd (refer: <a href="http://asic.gov.au/about-asic/media-centre/find-a-media-release/2015-releases/15-102mr-asic-cancels-australian-credit-licence-of-property-spruiking-firm/" target="_blank">15-102MR</a>);</li>
<li>cancelling the credit licence of a company formerly called Sunpac Finance Pty Ltd on its own application;</li>
<li>cancelling the credit licence of Smithson &amp; Baye Pty Ltd. This cancellation is currently subject to a decision on appeal to the AAT (refer: <a href="http://asic.gov.au/about-asic/media-centre/find-a-media-release/2015-releases/15-228mr-asic-cancels-australian-credit-licence-of-queensland-company-involved-with-property-promoting-group/" target="_blank">15-228MR</a>). </li>
</ul>
ASIC has concerns about the way The Heritage Group structured the loans and property ownership within its clients SMSFs.
Investors who obtained advice or finance from people associated with this group should contact their lender and if necessary, obtain independent professional advice to ensure that the loans to their SMSFs and their property ownership have been structured in compliance with the trustees' superannuation law obligations.
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jrobinson-rf4aSBido9

ASIC ban NSW mortgage broker for three years

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It’s not often there are <a href="https://www.businessinsider.com.au/anz-forecasts-another-interest-rate-hike-in-may-as-australias-inflation-outlook-picks-up-2018-1" target="_blank" style="font-family: Tahoma, Helvetica, Arial, sans-serif; font-size: 12.16px;">news stories</a> anticipating Australian Bureau of Statistics data a week before it comes out. But Wednesday’s Consumer Price Index was an exception. <a href="https://www.propertyobserver.com.au/https://www.abs.gov.au/ausstats/abs@.nsf/mf/6401.0" target="_blank" style="font-family: Tahoma, Helvetica, Arial, sans-serif; font-size: 12.16px;">The data showed</a> a 0.6% rise in the Consumer Price Index for the December quarter, bringing the annual rate up to 1.9% (from 1.8% in the 12 months to September).
This is still below the Reserve Bank of Australia’s <a href="https://www.rba.gov.au/inflation/inflation-target" target="_blank">target range</a> of 2-3%, but it’s edging closer. Kind of. It was still below what was <a href="https://www.rba.gov.au/publications/smp/2017/aug/pdf/06-economic-outlook.pdf" target="_blank">forecasted</a>.
One reason why market participants follow the Consumer Price Index so closely is the impact it has on the RBA in setting the official cash rate. For the RBA to start raising interest rates would require it to be pretty confident that the <a href="https://www.investopedia.com/terms/d/disinflation.asp" target="_blank">disinflationary</a> pressures in the Australian economy have abated.
That still seems unclear, which is why it is a near certainty they will leave the cash rate unchanged at the next board meeting on Tuesday.
Two changes to how the Consumer Price Index is calculated were also introduced. Firstly, the weights that different categories of expenditure receive were tweaked, as they are periodically. This is to make sure that the goods in the “basket” reflect what households are actually spending their money on.
In the new calculation, items like childcare (now 1.35%) and education (now 4.27%) <a href="https://www.ausstats.abs.gov.au/ausstats/subscriber.nsf/0/B1D241EA20B49DA0CA258225000D7F1F/%24File/64400_2017.pdf" target="_blank">get a larger weighting</a>.
A less routine and more interesting change was to use scanner data from retailers at point-of-sale in calculating the Consumer Price Index. This was spearheaded by the work of my UNSW School of Economics colleague Professor Kevin Fox, who <a href="http://www.abs.gov.au/ausstats/abs@.nsf/latestProducts/6401.0Media%20Release1Dec%202017?OpenDocument">was quoted by the ABS</a>:
I strongly support the ABS decision to implement new CPI methods for the treatment of transactions data… These new methods will enhance the accuracy of the Australian CPI, provide additional analytics and better inform policy formulation.
Scanner data has been used in the Australian CPI since 2014, and makes up about one quarter of the expenditure basket. There were some issues, however, in how that data was incorporated. Roughly speaking (<a href="https://www.ausstats.abs.gov.au/ausstats/subscriber.nsf/0/79CD01D5D060B163CA2581400020AC01/%24File/6401060004_2017.pdf" target="_blank">for technical details see the ABS report</a>), the changes involve using all the products available (rather than a sample) and weighting products by their economic importance. A bonus for the cash-strapped ABS is that, as they put it
The use of multilateral methods will require fewer resources in the medium term.
Using more data, and using it better is definitely a good idea. And in the long run it will give us more informative, and reliable inflation figures.
<a href="http://www.rba.gov.au/statistics/frequency/fin-agg/2017/fin-agg-1217" target="_blank">Reserve Bank of Australia data</a> released Wednesday showed fairly steady credit growth compared to previous months. Housing credit grew at 6.3% for the year to December, as in 2016. Of course, one doesn’t want this to be too high given concerns about property bubbles, not too low given the importance of the housing market to the broader economy.
Meanwhile, in the US, this week marked the final board meeting of outgoing Federal Reserve Chair Janet Yellen. As expected, they left official interest rates unchanged at 1.25-1.50%, <a href="https://www.federalreserve.gov/monetarypolicy/files/monetary20180131a1.pdf" target="_blank">issuing this statement.</a>
The Fed continues to be heavily focused on inflation, much like the RBA. The Federal Open Market Committee statement made that point, stating:
<blockquote>
Inflation on a 12‑month basis is expected to move up this year and to stabilise around the Committee’s 2% objective over the medium term. Near-term risks to the economic outlook appear roughly balanced, but the Committee is monitoring inflation developments closely.
</blockquote>
This is best read as a sign that another rate rise at the March meeting is likely, unless material new information arrives in the interim.
<img src="https://counter.theconversation.com/content/90924/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1">One of the significant economic stories of 2018 seems likely to be the divergence between US and Australian interest rates, what it means for the Australian dollar, and what it means for capital flows to Australia. At the moment, it seems the Fed will steadily raise US interest rates this year, while the RBA will be stuck with hard choices and may be reticent to begin a tightening cycle.
<a href="https://theconversation.com/profiles/richard-holden-118107" target="_blank">Richard Holden</a>, Professor of Economics and PLuS Alliance Fellow, <a href="http://theconversation.com/institutions/unsw-1414" target="_blank">UNSW</a>
This article was originally published on <a href="http://theconversation.com" target="_blank">The Conversation</a>. Read the <a href="https://theconversation.com/vital-signs-weak-inflation-means-interest-rates-arent-rising-anytime-soon-90924" target="_blank">original article</a>.
Vital Signs is a weekly economic wrap from UNSW economics professor and Harvard PhD Richard Holden (<a href="https://twitter.com/profholden" target="_blank">@profholden</a>). Vital Signs aims to contextualise weekly economic events and cut through the noise of the data affecting global economies.
 
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