Article summary

<ul data-end="785" data-start="311">
	<li data-end="459" data-section-id="5hbcyr" data-start="311">Pikos Group has released the five-penthouse collection at Skye Kangaroo Point, headlined by a two-storey sky home spanning more than 1,000 sqm.</li>
	<li data-end="561" data-section-id="1p7lq8n" data-start="460">Early buyer interest suggests the residences could set a new Queensland apartment price record.</li>
	<li data-end="667" data-section-id="1y70z0l" data-start="562">The collection includes four move-in ready penthouses and the highly customised Skye One residence.</li>
	<li data-end="785" data-section-id="yvm0y1" data-start="668">The release caps one of Bri​sbane's most ambitious luxury apartment developments overlooking the Brisbane River.</li>
</ul>

<hr data-end="790" data-start="787" />
Pikos Group has released the five-penthouse collection at its <a href="https://www.apartments.com.au/buildings/skye-residences-by-pikos-kangaroo-point-8-river-terrace-kangaroo-point-qld-4169">Skye by Pikos</a> development in Kangaroo Point, with early buyer interest indicating the flagship residences could eclipse every apartment sale previously recorded in Queensland.

The collection crowns the luxury riverfront development with five residences, including four completed penthouses and Skye One, a two-level sky home spanning more than 1,000 sqm that will be tailored to its eventual owner.

[smartcode_project:default project_id=90059 project_image_fid=374075]

Wanting to offer a fully customisable home, Pikos is offering Skye One as a blank canvas, allowing the buyer to work alongside the developer's design team to customise the home's layout, finishes and internal spaces.

The residence will feature a 247 sqm private rooftop terrace with its own swimming pool, sauna, steam room, outdoor kitchen and multiple entertaining areas overlooking the Brisbane River and CBD skyline.

The remaining four penthouses have been completed and are ready for immediate occupation, each offering four bedrooms, expansive open-plan living areas, soaring ceilings and private lift access.

[smartcode_project:default project_id=90059 project_image_fid=374059]

One of the defining features throughout the project is its use of Roman Classic Travertine, with more than 20,000 sqm of the natural stone imported from Italy after being personally selected by Pikos Group Founder and Executive Director Pedro Pikos, interior designer Julie Williamson and third-generation stone specialist Mario Caucci.

Pikos said the penthouse collection represented the culmination of the company's long-term vision for Skye.

"True legacy isn't measured by what we build today, but by what endures tomorrow," Pikos said.

"Our ambition is to create places that become more valuable with time, enrich the lives of generations, and stand as timeless landmarks long after we've stepped away."

[smartcode_project:default project_id=90059 project_image_fid=374060]

Williamson said the interiors were inspired by the natural character of Kangaroo Point and the Brisbane River rather than international design trends.

"Materiality tells the story of a place," Williamson said.

"We looked to the movement of the Brisbane River, the texture of the cliff face and the warmth of the surrounding landscape to create interiors that feel understated, enduring and unmistakably Brisbane."

Positioned above the Kangaroo Point cliffs, Skye places residents within walking distance of Howard Smith Wharves, South Bank and James Street while offering uninterrupted river and city views.

[smartcode_project_cta:default project_id=90059]

Joel Robinson

Brisbane's next apartment price record? Pikos unveils Skye's exclusive penthouse collection

Article summary

<ul data-end="888" data-start="289">
	<li data-end="442" data-section-id="8tsh6o" data-start="289">DVB Projects is preparing to launch its second Gold Coast apartment development, with demolition now underway at 137 Old Burleigh Road, Broadbeach.</li>
	<li data-end="573" data-section-id="1nyxl3e" data-start="443">The 34-level tower will comprise just 49 ultra-luxury residences, including half-floor, full-floor and penthouse apartments.</li>
	<li data-end="717" data-section-id="oiyimj" data-start="574">The launch follows strong demand at DVB's nearby Sea Glass project, which is more than 50 per cent sold and currently under construction.</li>
	<li data-end="888" data-section-id="epk9o9" data-start="718">The development adds to the transformation of Old Burleigh Road, with premium beachfront apartment projects continuing to reshape the tightly held Broadbeach strip.</li>
</ul>

<a href="https://www.apartments.com.au/developers/dvb-projects">DVB Projects</a> is preparing to launch its second Gold Coast apartment development, with demolition now underway on the Broadbeach site as the Sydney developer moves closer to bringing the ultra-luxury project to market.

The 34-level tower at <a href="https://www.apartments.com.au/new-apartments/137-old-burleigh-road-broadbeach-qld-4218">137 Old Burleigh Road</a> will comprise just 49 residences, ranging from half-floor apartments through to full-floor homes and a penthouse. The launch follows the strong sales performance of DVB's nearby Sea Glass development. More than half of the apartments at Sea Glass, on the other side of Broadbeach, have been snapped up, well ahead of its late 2027 completion

<img alt="DVB Projects to commence demolition on $320m Broadbeach luxury tower" data-entity-type="file" data-entity-uuid="2944b4be-c84e-4b54-8dc1-c712e76704c0" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/E02_Exterior_Street%20Level%20Entrance.jpg?VersionId=YoNig7pRdrE3HCue7sUj78LzJteeQf3H" />

The start of demolition at 137 Old Burleigh Road signals DVB Projects’ underlying confidence in the Gold Coast’s luxury beachside apartment sector.

“We see the Gold Coast as one of the most compelling lifestyle markets in Australia, particularly at the premium end where demand continues to deepen,” said Dean Brown, Managing Director of DVB.&nbsp;

“This project has been carefully designed to respond to that demand - delivering large-format residences with a level of quality, privacy and amenity that is still relatively rare in the apartment market on the beachside."

Brown says the site itself is "exceptional."

"Old Burleigh Road is one of the most tightly held beachfront strips, and opportunities to deliver a project of this scale and calibre in this location are extremely limited.”

<img alt="DVB Projects to commence demolition on $320m Broadbeach luxury tower" data-entity-type="file" data-entity-uuid="398f377a-c037-455e-9250-0c5e0d84c35b" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/I12_FF%20Balcony.jpg?VersionId=NwOiRWGMubR1c8wthuEfggklcja7al9." />

The project will comprise 40 half-floor residences of approximately 260 sqm, alongside eight full-floor residences spanning around 524 sqm.

A single penthouse will crown the building, featuring a private pool, barbecue area, indoor gym and dedicated entertaining spaces.

Residents will have access to a resort-style suite of amenities, including a 20-metre pool with daybeds, a gymnasium, hot and cold plunge pools, a sauna, and private residents’ lounge and dining facilities.

<img alt="DVB Projects to commence demolition on $320m Broadbeach luxury tower" data-entity-type="file" data-entity-uuid="d1642bb0-9a66-4427-a022-dfc0988c6287" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/A02_Pool%20to%20View.jpg?VersionId=c0IXPyn_Gp_Kn3XCwzMrqIVkAdCEwVXP" />

Sales agent Todd Matheson, of <a href="https://www.apartments.com.au/project-marketer/pezet-matheson">Pezet Matheson</a>, which is marketing both 137 Old Burleigh Road and Sea Glass, said 137 Old Burleigh Road would address a clear gap in the market for genuine luxury products.

“There are very few opportunities on the Gold Coast where buyers can secure a residence of this size and quality in a new building,” Matheson said.

“What we’re seeing is a growing cohort of downsizers and interstate buyers who still want space - they’re not willing to compromise on living area, entertaining or finishes.

“This project has been designed with that buyer in mind. It offers the scale of a home, combined with the convenience and security of apartment living, in one of the coast’s most desirable positions.”

<img alt="DVB Projects to commence demolition on $320m Broadbeach luxury tower" data-entity-type="file" data-entity-uuid="59aae0ca-5639-4320-8aca-d0bf60f48e43" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/E01_Exterior%20Hero.jpg?VersionId=DS8Zfy2WtgUEtdfe0TEUuf1W1GfcZq8S" />

Located on a 1,156 sqm site one block from the beachfront, the development will replace an ageing walk-up building and is expected to contribute to the ongoing transformation of the Old Burleigh Road strip into one of the Gold Coast’s most prestigious residential corridors.

With the development moving into the delivery phase, 137 Old Burleigh Road is slated to hit the market later this year.

[smartcode_project_cta:default project_id=145141]

DVB Projects to launch second Broadbeach apartment tower as demolition commences

A proposal to redevelop one of North Sydney's ageing commercial buildings has taken another step forward, with plans for a 38-storey mixed-use tower adding momentum to the long-awaited transformation of the Alfred Street precinct.

Now on public exhibition through the NSW Government's Housing Delivery Authority-led State Significant Development pathway, the proposal for 271-273 Alfred Street would replace an underutilised commercial building with 95 apartments, ground-floor retail, commercial space and affordable housing. The proposal was submitted by&nbsp;Tara Shore Pty Ltd, acting for the John Taylor Family Trust.

While the project will deliver much-needed housing on the southern edge of the North Sydney CBD, it also represents another piece of a broader precinct that has spent years in planning limbo.

<img alt="First look: New public domain vision underpins 95-apartment North Sydney tower on Alfred Street" data-entity-type="file" data-entity-uuid="7e1ce1b4-38df-48ab-992f-386814d86308" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Alfred%20St%20da%20podium.png?VersionId=sC_h6w.A9VEoB98qsqowPlIoz__sBZBt" />

Despite its proximity to both North Sydney Station and the Victoria Cross Metro, redevelopment of Alfred Street has progressed slowly over the past decade as broader planning controls, zoning and building heights remained unresolved. The introduction of the Housing Delivery Authority pathway has provided a new avenue for projects to progress, allowing rezoning and development assessment to occur concurrently and unlocking sites that have long been earmarked for renewal.

Designed by Office of Cortese &amp; Gilder, the proposal seeks to do more than replace an ageing office building. The architects have positioned the project as the first stage of a wider public domain vision that would improve pedestrian connectivity and create a more cohesive mixed-use precinct as neighbouring sites are redeveloped over time.

The proposal includes a widened Alfred Street setback, new street trees, landscaping and outdoor seating, along with a landscaped through-site pedestrian link connecting Alfred Street with Little Alfred Street. The connection is intended to become the first section of a future east-west pedestrian network extending across the precinct.

<img alt="First look: New public domain vision underpins 95-apartment North Sydney tower on Alfred Street" data-entity-type="file" data-entity-uuid="8ea39ac3-46ad-4562-b4a0-b862e91c2dda" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Alfred%20St%20da%20site.png?VersionId=K7umCd21KpetEFuVfsPlnJKhUOsmTTdV" />

The mixed-use tower would comprise retail space at ground level, commercial uses on level two and apartments from level three upwards.

In total, the development would deliver 95 apartments, including nine one-bedroom, 28 two-bedroom, 56 three-bedroom and two four-bedroom residences. Twenty-one apartments, representing 15 per cent of the residential gross floor area, would be secured as affordable housing and managed by a registered community housing provider for at least 15 years.

Nine basement levels would provide 133 resident car spaces, seven motorcycle spaces and 111 bicycle spaces.

According to the Architecture and Urban Design Report, the public domain strategy is designed to transform what is currently an inward-facing commercial edge into a more active and connected pedestrian environment, creating a stronger relationship between the commercial core and surrounding residential neighbourhoods.

Office of Cortese &amp; Gilder has also prepared a broader public domain framework spanning neighbouring properties between 263 and 283 Alfred Street, arguing that a coordinated approach to redevelopment will deliver better public spaces, improved tower separation and a more connected streetscape as the precinct evolves.

The proposal comes at a time where North Sydney is slated for future residential growth. Commercial developer FiveX has residential plans for the neighbouring site at 275 Alfred Street. They've proposed a 39-storey mixed-use tower with 184 apartments, while Freecity was recently approved for nearly 300 apartments across a 51-storey building on Walker Street.

Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/first-look-freecity-gets-green-light-for-mixed-use-apartment-and-hotel-tower-in-north-sydney">First look: Freecity gets green light for mixed-use apartment and hotel tower in North Sydney</a>

Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/first-look-fivex-plans-39-storey-residential-tower-in-booming-north-sydney">First look: Fivex plans 39-storey residential tower in booming North Sydney</a>

&nbsp;

Alfred Street the latest North Sydney pocket to be transformed by residential development

Buyers considering a residence at boutique Gordon townhouse development <a href="https://www.apartments.com.au/new-townhouses/lume-gordon-43-47-dumaresq-street-gordon-nsw-2072">Lume</a>&nbsp;now have another reason to bring forward their decision.

For a limited time, purchasers of a residence at Lume will receive a BMW iX3 50 electric SUV, valued at more than $120,000, as part of their purchase. The offer is designed to add value for buyers while complementing the lifestyle envisioned for the architecturally designed Upper North Shore development.

Scott Timmins, Development Manager at <a href="https://www.apartments.com.au/developers/winim">WINIM</a>, said the partnership was created to provide buyers with a compelling reason to act.

"In today's market, buyers need a compelling reason to act now, and the BMW partnership was designed to create that catalyst. We wanted to add genuine value for our future purchasers. Choosing the all-electric BMW iX3 50 also reflects the values behind LUME, forward-thinking design, innovation and a more sustainable way of living. It's a premium incentive that complements the lifestyle our buyers aspire to and rewards those who commit early."

[smartcode_project:default project_id=7354 project_image_fid=374893]

Delivered by WINIM in partnership with Burtonwood Investment Partners, Lume comprises 14 architecturally designed two, three and four-bedroom townhomes created for families seeking the space of a freestanding house with the ease of modern, low-maintenance living.

The three-storey residences, designed by award-winning architecture practice <a href="https://www.apartments.com.au/architects/rothelowman">Rothelowman</a>, have been tailored for families and multi-generational living, featuring private internal lifts, flexible lower-level spaces, generous open-plan living and entertaining areas, media rooms, and landscaped outdoor spaces with custom outdoor kitchens.&nbsp;

Inside, engineered oak flooring, bespoke dining joinery with integrated wine fridges and backlit bars, sculptural porcelain bathrooms, Parisi freestanding baths and Astra Walker tapware create interiors that balance functionality with refined finishes.

Each townhome has been designed to combine generous internal spaces with sustainability initiatives such as EV charging infrastructure, while <a href="https://www.apartments.com.au/landscape-architect/arcadia-landscape-architecture">Arcadia</a>'s landscaped communal areas, centred around a restored creek line and native planting, encourage residents to connect with nature and spend more time outdoors.

[smartcode_project:default project_id=7354 project_image_fid=269527]

Rothelowman's Gary Tsui said the architecture was conceived to respond carefully to its Upper North Shore setting.

"Our vision was to create elegant, uplifting homes that draw on and positively contribute to the local character through meticulously considered design and an interaction with the surroundings."

The communal landscape has been designed as more than an open space between homes. Arcadia's Ben Newell and Kate Phillips said the adjoining reserve provided an opportunity to create a distinctive natural retreat for residents.

"Just as waterways carve their way through Ku-ring-gai's landscape, a raised boardwalk weaves through the reserve, connecting the homes to this tranquil oasis."

[smartcode_project:default project_id=7354 project_image_fid=374892]

Located just 300 metres from <a href="https://www.apartments.com.au/developments/gordon-nsw-2072">Gordon</a> Village and Gordon railway station, Lume offers convenient access to Sydney's CBD while placing residents close to some of the North Shore's leading schools, including Ravenswood, Pymble Ladies' College and Knox Grammar. Lane Cove National Park, Gordon Golf Club and a range of cafés and restaurants further reinforce the family-focused lifestyle on offer, with the BMW iX3 50 complementing everything from local trips around Gordon to weekend drives and city commutes.

Construction is underway with completion expected in mid-2027.

[smartcode_project_cta:default project_id=7354]

Boutique Gordon townhomes now come with a BMW iX3 50

Two apartments have sold for more than $10 million at EADE Byron Bay, setting some of the highest apartment prices ever achieved in the coastal town and underlining the growing appetite for luxury beachfront apartments in Australia's most popular coastal locations.

The $210 million project by Vitale Property Group has now secured more than $70 million in sales, led by residences that changed hands for $12.75 million and $11.75 million.

The record-breaking transactions reinforce the shift occurring in Byron Bay's premium property market, where affluent downsizers and lifestyle buyers are increasingly opting for high-end apartments over large beachfront homes.

<a href="https://www.apartments.com.au/new-apartments/eade-byron-bay-29-shirley-street-byron-bay-nsw-2481">EADE Byron Bay</a> occupies a rare 6,000 sqm absolute beachfront site on the corner of Shirley and Milton Streets overlooking Main Beach and The Wreck surf break, just 350 metres from Byron Bay's town centre.

The 25-residence development is the first beachfront apartment project approved in Byron Bay in more than a decade and is currently under construction, with completion expected in May 2027.

[smartcode_project:default project_id=145590 project_image_fid=359521]

The project has attracted a mix of local Byron Shire residents downsizing from larger homes, alongside interstate buyers from Sydney, Melbourne and Brisbane seeking a permanent coastal lifestyle without compromising on space.

Designed by <a href="https://www.apartments.com.au/architects/hayball">Hayball</a> and with interiors by <a href="https://www.apartments.com.au/interior-designers/alexander-co">Alexander &amp; Co</a>, EADE comprises&nbsp;10 garden apartments ranging from 284 sqm to 622 sqm, nine with private pools, five full-floor apartments and 10 rooftop residences with private plunge pools, expansive outdoor entertaining areas and uninterrupted ocean views.

[smartcode_project:default project_id=145590 project_image_fid=359527]

<a href="https://www.apartments.com.au/developers/vitale-property-group">Vitale Property Group</a> Managing Partner Chris Vitale said the project's combination of scale, location and limited future supply was driving buyer demand.

"There isn't another beachfront holding in Byron Bay of this size and position that could be developed again," Vitale said.

"Buyers are responding to the scarcity and the irreplaceability of a site of this calibre and to floorplans they can't find elsewhere in the market.

"We are seeing buyers place significant value on quality, space, design, resort-style amenities and the rarity of the location. The sales achieved to date demonstrate that discerning purchasers recognise the long-term significance of what is being created at EADE Byron Bay.

"Many are coming from larger homes in the Byron region, or from Sydney, Melbourne and Brisbane, and are after the space, security and convenience, without the upkeep of a house."

&nbsp;

[smartcode_project:default project_id=145590 project_image_fid=359523]

The Byron Bay project follows Vitale Property Group's delivery of the Mondrian Hotel and Private Residences at Burleigh Heads, with EADE continuing the developer's focus on luxury coastal developments.

Residents will have access to a resort-style swimming pool, gymnasium, sauna, cold plunge pool, concierge services and dedicated workspaces, while the project is targeting an 8-Star Green Star rating.

EADE Byron Bay is being exclusively marketed by Projx Australia in conjunction with WHITEFOX Projects.

WHITEFOX National Projects Director Phillip Rand said demand had been driven predominantly by owner-occupiers.

"We are seeing buyers at EADE place significant value on quality, space, design, resort-style amenities and the rarity of this location," Rand says.

"The sales achieved to date demonstrate that purchasers at this level recognise the long-term significance of what is being created at EADE Byron Bay."

Residences at EADE Byron Bay are currently priced between $4.75 million and $15.95 million.

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[smartcode_project_cta:default project_id=145590]

Vitale breaks Byron Bay records with EADE sales flurry 

Prominent New Zealand apartment and hotel operator, <a href="/developers/safari-group">Safari Group</a>, is offering up a prime investment opportunity for Australians to purchase off the plan in one of the world’s most popular ski destinations.

They recently took to market Mountain Oak Queenstown Apartments, in the growing precinct of Remarkables Park in Frankton, near the airport and at the foot of The Remarkables - the mountain range the locals like to call “The Remarks”.&nbsp;

Sydney investors have shown interest in the one, two and three-bedroom apartments that secure high-season occupancy six months over the year, primarily over summer and winter months.

They average 90 per cent occupancy across their portfolio over January, February, March, August, November and December, while shoulder season months of April, July, September and October are still occupied 70 per cent of the time, with the growing appeal of Queenstown becoming not just a hotspot for the snow, but a lifestyle destination.

Even in the low seasons of May and June, occupancy levels reach around 40 per cent.

<img alt="Safari Group’s Mountain Oak Apartments brings new investment potential to Queenstown" data-entity-type="" data-entity-uuid="" src="https://res.cloudinary.com/dz9xllyip/image/fetch/f_auto,c_limit,w_1440,q_auto/https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/field/image/Ext_Cam15_Sunny.jpg?VersionId=SJAROUM_1s.Tr5ciMk4EEj5oAt_Vewmv" />

Safari’s Safari Hotels arm can also manage the holiday letting for an investor, from the listing on holiday accommodation websites such as Airbnb and Booking.com to the cleaning and maintenance of the investment. They’ve been in the short stay management business for 15 years and offer 24/7 support for investors, an important convenience benefit for any overseas investor

Another major drawcard for Australians is that New Zealand doesn’t have a stamp duty policy - so the entry price of NZ$639,000 (AU$586,000), is all that is payable on completion.

<img alt="Safari Group’s Mountain Oak Apartments brings new investment potential to Queenstown" data-entity-type="" data-entity-uuid="" src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,dpr_2.0,q_auto:good/https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/313_Livingv2_WEB.jpg?VersionId=nV229fM0ZeYpoxOrX372HyGjfwY_LR8c" />

Safari is starting construction of the 141 apartments in Q2 this year, with a two-year build estimated to complete in mid-to-late 2027.<img alt="" data-entity-type="" data-entity-uuid="" height="15" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXczFpFAb7WuA6f4f9TtKWcqXyNwR8qqtakWv352ERkpqNlP3KwIo8YKxw67jZNHfpjEGIZGv5MQTbnvLZwNt8iu9IVdOrswOjCvBZ4zhSoOOLrpt6etVEZTN1gkBho0r_R72zdHNA?key=yq3daOanqHSb88QFd8jGYKdb" title="Click and drag to move" width="15" />​

The apartments will feature modern amenities and contemporary designs with expansive windows capturing sweeping views of The Remarkables mountain range.&nbsp;

Interiors are equipped with modern finishes, premium appliances, and secure electronic key-locked doors, ensuring a comfortable living experience for residents and guests alike.

With its strategic location near Coronet Peak and Cardrona Alpine Resort, as well as key retail and dining precincts such as Market Street, Five Mile Shopping Centre, and Remarkables Market, Mountain Oak offers a strong proposition for investors seeking high rental yields and capital appreciation in one of New Zealand’s most sought-after locations.&nbsp;

Queenstown’s sustained demand for visitor accommodation and rental properties is underpinned by a shortage of housing options, attracting both local and international buyers.

Safari Group offers low-touch investment proposition in Queenstown’s popular ski fields district

<html><body>
EXPERT OBSERVER
We have revised our growth forecasts in 2020 and 2021 to reflect a more resilient consumer and labour market - particularly in Victoria.
We have revised our growth forecasts for the Australian economy in 2020 from minus 4.7% to minus 3.5%.
Forecast growth in the September quarter has been increased from flat to 1.8% while growth in the December quarter is revised down from 2.8% to 2.2%.
For 2021 we have revised down growth from 3.0% to 2.5%.
The unemployment rate that was expected to reach 8.5% by the end of 2020 has been lowered to 7.8%; while the forecast end 2021 rate has been held around 7.5%.
The GDP Report this week signalled that the Australian economy had contracted by a record 7% in the June quarter. Consumption contracted by a spectacular 12.1% and hours worked fell by 9.8%. The fall in consumption explained 98% of the overall reduction in activity.
Despite that collapse in hours worked total nominal wage income “only” fell by 2.5% and total nominal household income actually rose by 2.2%.
With a sharp fall in spending and an actual increase in incomes the savings rate rose to 19.8% from 6.0%, highlighting the significant improvement in household balance sheets which would be consistent with considerable pent up demand to spend.
BILL EVANS is the Chief Economist at Westpac
</body></html>

bevans-rYk9SxEa4r

Optimistic revision of economic growth forecasts: Bill Evans

<html><body>
EXPERT OBSERVER 
One of the most striking responses to the COVID-19 pandemic has been the sudden shift of around half the workforce to working at home.
In many cases, this was combined with an equally sudden shift to home schooling.
Contrary to what might have been expected, working from home was one part of the pandemic response that went remarkably smoothly. Most kinds of office work continued almost as if nothing had changed.
Discussion of the crisis has mostly worked on the assumption that a return to something like the pre-crisis “normal” is both inevitable and desirable.
But the unplanned experiment we have been forced to undertake suggests we might have stumbled upon a massive opportunity for a microeconomic reform, yielding benefits far greater than those of the hard-fought changes of the late 20th century.
The average worker spends an hour on commuting every work day. Remarkably, this is a figure which has remained more or less stable since Neolithic times, a finding known as <a href="https://bigthink.com/strange-maps/marchettis-constant?rebelltitem=5#rebelltitem5" target="_blank">Marchetti’s Law</a>. (The same observation has been attributed to Bertrand Russell.)
<a href="https://images.theconversation.com/files/356223/original/file-20200903-16-ucfv9r.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=1000&amp;fit=clip"><img src="https://images.theconversation.com/files/356223/original/file-20200903-16-ucfv9r.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=237&amp;fit=clip" alt=""></a>
 Marchetti’s Law says we spend about an hour travelling to work whatever the era.
If working from home eliminated an hour of commuting, without changing time spent on work or reducing production, the result would be equivalent to a 13% increase in productivity (assuming a 38-hour working work).
If half the workforce achieved such a gain, it would be equivalent to a 6.5% increase in productivity for the labour force as a whole.
For a comparison, let’s look at the radical microeconomic reforms of the 1990s, including privatisation, deregulation and national competition policy.
In 1995 the main advocate of these reforms, the Productivity Commission, then called the Industry Commission, estimated they would increase national income by <a href="https://www.pc.gov.au/research/supporting/hilmer-reform-implications/hilmer.pdf" target="_blank">5.5%</a>.
In retrospect, that estimate appears to have been over-optimistic.
Although there was an upsurge in measured productivity growth in the mid-1990s, the total increase relative to the long-term trend was less than <a href="https://www.researchgate.net/publication/24125267_Stories_about_productivity" target="_blank">1 percentage point per year</a> above normal. Low productivity growth since then has <a href="https://www.pc.gov.au/research/ongoing/productivity-insights/recent-productivity-trends" target="_blank">wound back</a> those gains.
<h2>These gains are big, compared to those we sweated on</h2>
Even so, those reforms were, and to a large extent still are, widely seen as a crucial contributor to economic prosperity.
So, an improvement of 6.5% would be a huge benefit. It would be enough over a few years to offset the economic costs of the lockdown and many other impacts of the pandemic.
But, as in the case of microeconomic reform, this initial estimate may be misleading. And even if there are real benefits on average, it’s important to ask who will get them and who, if anyone, will lose.
A study by Harvard and New York University economists finds that people working from home spend around 48 minutes more time per day <a href="https://www.nber.org/papers/w27612" target="_blank">connected to their offices</a>, leaving an average gain in free time of only 12 minutes per day.
It seems likely, however, that at least some of this time is spent on household tasks, especially to the extent that workers had to take on child care and home schooling during the lockdown period. And, as well as saving commuting time, workers also save the monetary costs of commuting and at least some of the time spent getting ready for work.
On balance, it seems clear that on average working from home yields net benefits.
However, workers for whom social contacts at work represent a significant “fringe benefit” will lose that benefit, while other workers who value privacy or separating work and social life will gain a benefit.
<h2>It’ll be harder for managers…</h2>
Similarly, those who rely on chatting to colleagues to develop ideas will lose something relative to those who prefer more systematic approaches to obtaining information relying on electronic contact.
Another group of workers who might lose from remote working are <a href="https://www.afr.com/work-and-careers/workplace/middle-management-the-laggards-on-working-from-home-20200524-p54vwb" target="_blank">middle managers</a>.
To the extent that management depends on “presenteeism”, that is, physically keeping an eye on workers, remote working presents problems.
Intrusive checking on computer activity is likely to be resisted and evaded. Managers will have to learn to manage by objectively assessing results rather than observing what people do, and to get that evidence accepted further up in the hierarchy.
<h2>…manageable for employers</h2>
For employers, the shift to working from home has had little immediate impact. Workers wages haven’t changed and, at least in the short run, neither has spending on office space.
But, in the long run, remote working offers the possibility of much greater flexibility in hiring. Some employers such as Facebook’s Mark Zuckerberg have already floated the idea of paying workers less because they can now live in cheaper locations, setting the stage for future conflict.
For the most part, disputes over sharing the benefits of remote office work will be hashed out between employers, workers and unions, in the ordinary workings of the labour market.
But what about the other half of the workforce, who don’t have the option of working from home? In particular, what about the mostly low-paid service workers who depend on people coming into offices?
If the productivity gains made possible through remote work are to be shared by the entire community, substantial government action will be needed to make sure it happens.
Most obviously, the higher rate of JobSeeker allowance has helped us get through the pandemic without the upsurge in suicide and other measures of social distress predicted by many. Returning to the poverty-level unemployment benefit (the old Newstart) would be a disaster.
<h2>We’ll need to change the way we support workers</h2>
The pandemic has shown how whole sectors of the economy, such as aged care, rely on casual workers piecing together multiple jobs, with no access to standard conditions like sick leave. Younger workers in particular suffer from underemployment and difficulties in making the transition to permanent full-time work.
What will be needed is both an expansion of publicly funded employment in a wide range of services, including aged care, and a reversal of trends towards casual and contract employment.
Disastrous though it has been, COVID-19 has taught us a lot about ourselves and about how our economy and society work. If we learn these lessons, we might be able to benefit and mitigate at least some of the harm done by the disaster.<img src="https://counter.theconversation.com/content/145104/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important; text-shadow: none !important;">
<a href="https://theconversation.com/profiles/john-quiggin-2084" target="_blank">John Quiggin</a>, Professor, School of Economics, <a href="https://theconversation.com/institutions/the-university-of-queensland-805" target="_blank">The University of Queensland</a>
This article is republished from <a href="https://theconversation.com" target="_blank">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/have-we-just-stumbled-on-the-biggest-productivity-increase-of-the-century-145104" target="_blank">original article</a>.
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Have we just stumbled on the biggest productivity increase of the century?

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EXPERT OBSERVER
It became official on Wednesday. The Australian economy is in recession for the first time in nearly three decades.
And the drop in economic activity is unprecedented. GDP fell 7% in the June quarter. The previous biggest post-war fall in Australia was 2% in June 1974.
But Treasurer Josh Frydenberg noted that in March he was told the June quarter contraction might be 20%. In Britain it was.
Bookkeeping aside, the question that matters is how to fight this recession.
Answering it requires an understanding that it is a different type of recession to those we’ve seen before.
As I pointed out <a href="https://theconversation.com/vital-signs-covid-19-recession-is-different-and-we-need-more-stimulus-to-deal-with-it-141037" target="_blank">earlier this year</a> the recessions some of us grew up with in the early 1980s and 1990s were “business cycle” recessions.
They happened because the economy overtook its inbuilt speed limit and pushed up inflation. To curb it, central banks pushed up interest rates, pushed them up too far and choked off investment and spending, sending economic activity backwards.
<h2>A recession like no other</h2>
In 2020 we face a different sort of shock.
COVID-19 has hammered economic activity, even more so in countries such as the United States where it has run out of control.
Many of the opportunities we used to have to spend money (such as airlines, theatre tickets and cafe meals) simply haven’t been there.
They’ll come back when things return to closer to normal, perhaps though the wide deployment of a vaccine.
But we might not spend as we used to.
Some people, out of work or on shorter hours won’t have the capacity to spend. Others will want to rebuild their savings.
And others who have been saving big might decide to keep doing it.
<hr>
Household saving ratio
<a href="https://images.theconversation.com/files/355997/original/file-20200902-22-yq9rjf.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=1000&amp;fit=clip"><img src="https://images.theconversation.com/files/355997/original/file-20200902-22-yq9rjf.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt=""></a> 
ABS Australian National Accounts
Australia’s household saving ratio surged to 19.7% in the June quarter.
It’s a peak not reached since 1974 at a time when there was much less of an age pension and superannuation, no Medicare and surging unemployment. In other words, its at a height not reached since people really needed to save.
The Bureau of Statistics says that if household income from all sources including early access to super was counted, the ratio is even higher. Its estimate of what it calls the “household experience savings ratio” is 24.8%.
That means households saved an extraordinary one in every four dollars that came through their doors in the June quarter, up from mere percentage points a few quarters earlier.
Much of it would have been what economists call <a href="https://www.propertyobserver.com.au/https://academic.oup.com/qje/article/132/3/1427/3071924?casa_token=NaR4tX3aSioAAAAA:5a0tN7y4nXtjvyxhO1tit2wcRHuU-NmyYeUJD2Md_gw6wnoLrLkYAwfNWxBE4XkYCfTVh4NeLIfL4rQ" target="_blank">precautionary saving</a>, understandable given how much of the future is uncertain.
<h2>There’s such a thing as too much saving</h2>
But what if this extraordinarily high saving rate lasts beyond the point it is understandable, as it did in Japan.
As with Japan in the 1990s when saving soared, real interest rates are negative. We are so <a href="https://web.mit.edu/krugman/www/japtrap" target="_blank">keen to save</a> we don’t need a financial return.
There were signs of it worldwide, well before the pandemic. President’s Clinton’s Treasury Secretary Larry Summers referred to it as <a href="http://larrysummers.com/2016/02/17/the-age-of-secular-stagnation/" target="_blank">secular stagnation</a>, a term first coined in the 1930s.
Saving more than we are prepared to invest shrinks economic activity. It creates unemployment which itself creates uncertainly, prodding people to save still more than they invest.
It’s one of the reasons worldwide economic growth is low, interest rates are low, and inflation is low.
During the pandemic the government is spending more than A$100 billion on measures such as JobKeeper and JobSeeker.
<h2>If we won’t spend, out government will have to</h2>
Post pandemic it might have to keep spending big on physical and social infrastructure – things such as major projects and better aged care and health care.
If we won’t spend big again, it’ll have to. It’ll need to get the economy’s long term growth rate back up to 2%, or even the <a href="https://treasury.gov.au/speech/the-macroeconomic-context" target="_blank">near 3%</a> the Treasury thinks it is capable of.
It’ll require a lot. 
Australia used to have one of the lowest company tax rates in the developed world, now we have one of the highest. We tax labour income too much and consumption too little. And we have a hopelessly out of date and absurdly complex industrial relations system.
Each of those things are a handbrake on economic growth.
This is an unusual recession and an unusually deep one.
Digging our way out will require us to at first contain and defeat the virus, and then spend like Keynes and <a href="https://www.afr.com/policy/economy/we-can-spend-like-keynes-and-cut-taxes-like-friedman-20200728-p55g2s" target="_blank">cut taxes like Friedman</a>.<img src="https://counter.theconversation.com/content/145484/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important; text-shadow: none !important;">
<a href="https://theconversation.com/profiles/richard-holden-118107" target="_blank">Richard Holden</a>, Professor of Economics, <a href="https://theconversation.com/institutions/unsw-1414" target="_blank">UNSW</a>
This article is republished from <a href="https://theconversation.com" target="_blank">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/vital-signs-how-do-you-fight-a-recession-without-precedent-145484" target="_blank">original article</a>.
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Vital Signs: How do you fight a recession without precedent?

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EXPERT OBSERVER
The busiest markets in Australia are the cities and towns where Covid-19 is contained and life is relatively unrestricted – apart from the border closures, of course.
The busiest markets also include those where first-home buyers are the most active cohort, boosted by high levels of government help and low levels of interest rates.
And the busiest markets also include those where vacancies are ultra-low and there is upward pressure on rents – a situation that usually translates into rising prices.
One city has all three of those trends highly prominent right now. That city is Perth.
The Perth market has shown greater resistance to the pandemic impact than most Australian markets in terms of sales activity.
And its market is now pumping strongly, led by first-home buyers.
A standout feature is that many of the precincts with the best performance are at the affordable end of the market, reflecting the reality that first-home buyers are a major force in the market at present, more so than investors.
This trend has been enhanced by the Federal Government’s HomeBuilder grant, which has inspired people to buy residential land to build new homes.
The data shows major increases in Perth residential sales in July, for houses and especially for residential land.
Sales overall in Perth rose 68% in July, compared to April, while sales of residential land increased 121% - in other words, land sales more than doubled.
Perth has become the most affordable of the Australian capital cities – so it’s a great time to be buying there as a first-home buyer – and as an investor.
A further boost to the case for Perth comes from renowned demographer and author Bernard Salt. He says Perth is “the right place for the moment” and predicts the Perth property market will boom for the next several years.
Salt is the author of five books, including The Big Shift and Man Drought, and a columnist for The Australian and Herald Sun. He was awarded the Order of Australia in the 2017 Australia Day Honours and is the Chair of the Tourism Forecasting Committee at Tourism Australia.
He says WA’s successful management of the pandemic, emerging growth economy and the growing trend towards working from home are all factors pointing towards a new boom in the Perth property market.
“Perth is the right place for the moment,” he says. “It all augurs well for the confidence level in the property market in Perth.”
He suggests that Perth’s new property boom will endure throughout “the first half of the 2020s”.
Certainly, Perth is due. Indeed, overdue. It’s been on the cusp of revival a couple of times recently before speed bumps appeared (in early 2019 the banking royal commission and the looming federal election – and in early 2020 the onset of the pandemic).
But the gathering forces are building a perfect storm for the next Perth up-cycle.
Terry Ryder is the founder of hotspotting.com.au ryder@hotspotting.com.au twitter.com/hotspotting
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Perth is set for a property market boom: Terry Ryder

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Household spending was the biggest drag on the economy: Shane Oliver

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EXPERT OBSERVER
The 7 per cent fall in the economy in the June quarter is the biggest decline since quarterly records began in 1959. In annual terms, the economy fell 6.3 per cent in the June quarter. The annual decline is similar to the 5.8 per cent fall in the economy in 1945 (5.8 per cent fall) but smaller than the 14.3 per cent decline recorded in 1931.
This is not your typical recession. It hasn’t occurred because there has been some policy mistake – like the Reserve Bank leaving interest rates too high. Inflation remains under control – prices are neither surging nor plunging. There has been no balance of payments crisis – record trade surpluses are being reported. And the federal budget was broadly balanced at the start of 2020. Rather the recession is the result of a community lockdown to battle a one-in-a-hundred-year pandemic. And the whole world has been similarly affected. 
Policymakers certainly aren’t sitting on their hands. An unprecedented amount of stimulus has been applied to the economy by governments and the Reserve Bank. Barring more second waves from the virus, the worst appears to be over for the economy. The hope over the coming months is that Victoria – and to a lesser extent, NSW, - can join the rest of the country in being relative ‘virus free’. 
It’s not your typical recession because home prices are still at or near record highs. Annual growth of retail spending is at 19-year highs. The Aussie dollar is just off two-month highs. And share prices are 36 per cent up from lows. 
The economic recovery has begun. But the path is uncertain and likely to be bumpy. The battle for normalcy has only just begun. 
We expect the jobless rate will rise from 7.5 per cent currently to around 9 per cent in the next few months. The aim will be to quickly get people back to work as the longer they are away from workplaces, the less employable they are likely to be. 
Somewhat perversely, there were two positive aspects in the data. Aussies saved more – the household saving ratio rose by 19.8 per cent in the quarter. Clearly it was hard to spend in lockdown but the government topped up people’s bank accounts. And productivity increased. GDP per hours worked rose 3.1 per cent. These are two elements that had been causing angst for policymakers in recent times.
What do the figures show? 
Economic Growth: The Aussie economy contracted 7.0 per cent in the June quarter after easing 0.3 per cent in the March quarter. It was the biggest contraction in gross domestic product (GDP) in the 60-year history of the series. 
The economy contracted by 6.3 per cent in the year to June. Growth has previously averaged 2.6 per cent over the decade and averaged 2.7 per cent over the last 15 years.
The non-farm economy fell by 7.1 per cent in the June quarter after a 0.2 per cent fall in the March quarter. Nonfarm GDP is down 6.3 per cent over the year. 
Farm GDP fell by 2.3 per cent in the June quarter to be down 6.0 per cent over the year.  At current prices, GDP fell by 7.6 per cent in the June quarter after rising by 0.9 per cent in the quarter. Nominal GDP fell 5.9 per cent on the year (decade average +4.5 per cent).
As at June 2020 the Australian economy was valued at $1,981.6 billion.
GDP per capita fell 7.2 per cent in the June quarter to be down 7.4 per cent. 
Contribution to the overall result: The biggest contributions to growth came from net exports (+1.0 percentage points); public investment (+0.1pp) and government consumption (+0.6pp). But detracting from growth was household spending (-6.7pp); inventories (-0.6pp); dwellings (-0.4pp); business equipment (-0.5pp) and other private investment (-0.4pp). 
Inflation &amp; wages: In terms of domestic price pressures, the household consumption implicit price deflator fell by 0.8 per cent in the June quarter. Annual growth eased from 1.9 per cent to 0.5 per cent. Real non-farm unit labour costs fell by 9.8 per cent in the June quarter and was down 9.3 per cent over the year.
The terms of trade rose 0.2 per cent in the June quarter to be down 1.8 per cent on the year. 
Productivity: GDP per hour worked rose by 3.1 per cent in the June quarter to be up by 4.1 per cent on the year. GDP per hours worked in the market sector soared 5.9 per cent in the quarter to be up 7.3 per cent on the year.
States &amp; Territories: The only data available is state final demand (more accurate data would include net exports but it is not available for all states and territories). State final demand in the June quarter: NSW (down 8.6 per cent); Victoria (down 8.5 per cent); Queensland (down 5.9 per cent); South Australia (down 5.8 per cent); Western Australia (down 6.0 per cent); Tasmania (down 7.4 per cent); Northern Territory (down 4.9 per cent); and ACT (down 2.2 per cent).
Consumer spending: Household spending fell by a record 12.1 per cent in the March quarter to be down 12.7 per cent for the year. Hotels, cafes and restaurants fell 56.1 per cent and Transport services fell by 85.9 per cent. Spending on furnishings and household equipment rose 9.5 per cent with Alcoholic beverages up 13.0 per cent.
The ABS notes: “Spending on services fell 17.6 per cent reflecting temporary shutdown of businesses and movement restrictions. Spending on goods fell 2.8 per cent driven by record falls in operation of vehicles and clothing and footwear, while spending on food recorded the biggest decline since June 1983.”
Industry sectors: Fifteen of the 19 industry sectors contracted in the June quarter. The biggest contribution to the overall decline in output came from Transport postal and warehousing (-0.9 percentage points) from Accommodation and food services (- 0.8pp) and Administration and support services (- 0.7pp). Output rose in Mining, Education and training; Public administration and safety; and Financial and Insurance Services. 
Other points: Profit share at record high. In seasonally adjusted terms, the ratio of profits to total factor income rose from 29.0 per cent in the March quarter to 31.1 per cent in the June quarter. The wages share fell from a 2-year high of 52.5 per cent to 49.4 per cent. 
Household savings ratio. The household saving ratio rose from 6.0 per cent in the March quarter to 19.8 per cent in the June quarter in seasonally adjusted terms. 
Imports rose as a share of spending. The imports to sales ratio fell from an 11-year high of 0.378 to 0.397 in the June quarter – not far from 11-year highs. 
The private non-farm inventories to total sales ratio rose from 0.581 to 0.604 in the June quarter.
What are the implications for interest rates and investors? 
In the current September quarter the economy may end up contracting around 1 per cent, due largely to the lockdown in Victoria. Over the 2020 year the economy may contract by around 4 per cent – the biggest annual decline in 75 years. 
But it could’ve been worse. The Reserve Bank initially estimated that the pandemic contraction would be near 10 per cent in the June quarter. And GDP has contracted by an average of 11 per cent in the quarter for the 20 or so advanced economies to report so far. 
There is no shortage of stimulus to get the economy back on its feet. But money is not the problem – this is a health crisis, causing an economic downturn. There are encouraging signs of virus suppression in Victoria and NSW. But the path is uncertain. 
The fiscal roadmap in next month’s federal budget will be critical to economic recovery – as will developments on virus treatments and vaccines. 
Quite amazingly, data today showed a record 7 per cent economic contraction and the sharemarket was untroubled – currently up by around 1.8 per cent. The Aussie dollar eased from highs near US73.80 cents to US73.35 cents after the data release.
CRAIG JAMES is the Chief Economist at CommSec
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It's not a typical recession: CommSec's Craig James

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EXPERT OBSERVER
The national vacancy rate held steady for the third consecutive month, remaining at 2.1 per cent and below the April peak of 2.6 per cent.
A two-speed vacancy rate has emerged as Melbourne entered its first month of heightened stage four restrictions in early August. Elsewhere, other capitals have avoided secondary lockdowns despite minor outbreaks occurring.
Melbourne’s stricter stage four lockdown has disrupted the rental market, with estimated vacant rental listings surging by 20.6 per cent over the month, and a staggering 140.7 per cent higher compared to last year.
In all other capital cities, vacant rental listings continue to see a downward trend in vacant rentals since the April peak.
Vacancy rates across the capitals continued to decline for the fourth consecutive month, except Melbourne, Sydney and Adelaide.
Melbourne has seen a steady rise since April, overtaking Sydney for the first time in the Domain’s vacancy rate series to become Australia’s highest vacancy rate market. Also, vacancy rates in Adelaide and Sydney remained stable over the month but are lower than the April peak.
Sydney’s vacancy rate held steady at 3.5 per cent, now the second highest of all capital cities. This is 50 basis points higher than one year ago. There were an estimated 21,828 vacant rental listings at the end of August, a fall of 0.5 per cent from the previous month.
In Melbourne, vacancy rates surged in August, increasing 60 basis points to 3.8 per cent, the highest rate ever recorded in the Domain vacancy rate series and 220 basis points higher than last year.
This was due to a 20.6 per cent rise in estimated vacancies, with 21,509 rentals sitting vacant by the end of the month. The elevated vacancy rate will continue to put downward pressure on rents in the months to follow.
In Brisbane, the vacancy rate declined 10 basis points to 2.2 per cent. There were an estimated 6679 vacant rental listings at the end of August, a fall of 240 over the month. Year-on-year the vacancy rate remains steady.
Conditions have tightened for Hobart tenants, with the vacancy rate now returning to pre-pandemic levels of March, contracting 10 basis points to 0.6 per cent. This makes Hobart the tightest capital city rental market.
In a small rental market, this represents 28 fewer vacant rentals by the end of the month. Over the year, Hobart’s vacancy rate is still 20 basis points higher than than the extraordinarily tight 0.4 per cent.
In Perth, the vacancy rate has continued its long-term downward trend despite the COVID-19 pandemic shock in April, a sign Perth’s property market is recovering.
The vacancy rate continues to fall, contracting 30 basis points to 1 per cent, and is the lowest vacancy rate recorded in Perth since the inception of the Domain vacancy rate series. This is down from the peak of 5 per cent in June 2017 and down 170 basis points year on year.
The vacancy rate in Canberra continues to fall, declining 10 basis points to 1 per cent, to become the second tightest rental market across the capital cities. Over the year, Canberra is 10 basis points lower.
In Adelaide, the vacancy rate held steady at 0.9 per cent, 10 basis points higher than last year.
Darwin’s vacancy rate continues to see a sharp decline, falling 40 basis points to 1.3 per cent, 210 basis points lower than last year.
NICOLA POWELL is a Senior Research Analyst at Domain
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Melbourne's rental vacancy rate surged 20% in August: Domain's Nicola Powell

Home prices hit record highs in 11 regions: CommSec's Ryan Felsman

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EXPERT OBSERVER
Interesting move from the birthday boy Warren Buffett, swinging hard into Japanese stocks.
Japan's stock market was arguably the biggest bubble in history, accounting for nearly half the global market cap at one stage.
Even the US only hit half of Japan's lofty peaks as measured by CAPE during the tech exuberance.
Japan took 30 years to reach fair value, after land values fell the country sank into deflation with its ageing and declining population.
The US market now looks very expensive again, while the UK looks relatively cheap by comparison.
Australia lies in the middle, with quite a bit (as ever) resting on your views on the outlook for banks.
<img src="https://1.bp.blogspot.com/-U4PeFvbZUCo/X0w_k08hi5I/AAAAAAAA33k/WHn2YfsV7q8PmF4F532STWkVhNDyFp9SwCNcBGAsYHQ/s640/Japan%2BCAPE.jpg" width="640" data-original-height="815" data-original-width="1382">
Buffett has bought shares in Japan's five largest trading companies, including Mitsubishi and Sumitomo, perhaps in part a foreign currency play.
This equates to an investment of about $6.25 billion per CNBC, and Buffett may increase holdings up to 9.9 per cent stakes, to be held for the long term.
PETE WARGENT is the co-founder of AllenWargent property buyers and a best-selling author and blogger 
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Warren Buffet swings billions into Japanese stocks: Pete Wargent

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Banks may increase variable mortgage rates to recoup pandemic-induced losses despite a stagnant cash rate, according to experts.  In this month's <a href="https://www.finder.com.au/rba-cash-rate" target="_blank" rel="noopener noreferrer" data-auth="NotApplicable">Finder RBA Cash Rate Survey</a>, all the experts surveyed expect a cash rate hold in September (40/40), more than half of those who weighed in (57%, 16) believe that banks will raise their variable mortgage rates despite the Reserve Bank indicating that the cash rate will remain motionless for some time.
Another course of action the banks took is, earlier in August, Westpac and ANZ announced that they are cutting or deferring dividends to shore up company profits.
The majority of economists who weighed in (88%, 22) believe that the nation’s other big banks will soon follow suit by slashing dividends or removing them altogether.
Cooke said that banks are taking a cautious approach as we enter a period of economic uncertainty.
“Banks are slashing shareholder dividends in an attempt to mitigate the financial disruption caused by the virus."
“This won’t come as welcome news for existing shareholders, but many investors will be seeing these plunging share prices as a great opportunity to buy discounted stocks,” he said.
Economic sentiment spikes
Finder’s Economic Sentiment Tracker, which gauges five key indicators – housing affordability, employment, wage growth, cost of living and household debt– shows a significant increase in overall economic sentiment since its lowest point in March 2020, rising from 8% to 24% in August
<img src="https://mcusercontent.com/cc5e9bce699fa1d71a67cf499/images/232c13b1-5dcf-4681-b36f-67bd31c9a816.png" data-imagetype="External"> Despite the uncertainty regarding the virus, more than half (57%, 20) of respondents believe that Australia will see GDP growth in 2020.  Leanne Pilkington of Laing+Simmons said Australia has been able to weather the economic storm of coronavirus better than other nations.  "Relatively speaking, the economic fallout of the coronavirus that is reverberating around global markets has not impacted Australia as hard as many other nations.  Even considering Victoria’s second wave and the potential for subsequent outbreaks elsewhere, employment figures are encouraging and other key indicators point to our economy’s overall resilience,” she said. 
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