<a href="https://www.urban.com.au/developers/far-east-consortium">Far East Consortium</a>’s 640 Bourke Street stands as a testament to&nbsp;<a href="https://www.urban.com.au/developments/melbourne-vic-3000">Melbourne</a>’s ability to bridge its storied past with a bold vision for the future.&nbsp;

Rising above the heritage-listed Eliza Tinsley building, the development reflects a broader shift toward adaptive reuse in the city, where historical assets are retained and reinterpreted as part of new residential development.

Designed by <a href="https://www.urban.com.au/architects/rothelowman">Rothelowman</a>, <a href="https://www.apartments.com.au/new-apartments/640-bourke-street-melbourne-640-bourke-street-melbourne-vic-3000">640 Bourke Street</a> incorporates the Eliza Tinsley building as its foundation, housing a grand gallery and lobby space that serve as both a functional and symbolic centrepiece. The heritage façade informs the tower’s design, creating a connection between Melbourne’s past and its contemporary skyline.

"It's a significant asset and wants to be celebrated and experienced by all residents every single time they go in and out of the building," Rothelowman Principal Stuart Marsland said.

[smartcode_project:default project_id=509 project_image_fid=365684]

Above this historic base, the 68-storey tower will deliver just over 600 residences, a notable reduction from earlier schemes, reflecting a deliberate move toward larger-format apartments and a stronger owner-occupier focus.

Unlike traditional CBD developments that prioritised investor stock, 640 Bourke Street has been repositioned to respond to changing buyer expectations.

"The discussion was all around making 640 Bourke Street the best residence to live in, to be much more focused on the people in the building rather than people looking at the building," Marsland explained.&nbsp;

This shift is evident in the development’s interiors, which emphasise practical luxury with spacious layouts, high ceilings, and floor-to-ceiling windows framing sweeping views of Melbourne and Port Phillip Bay.&nbsp;

“What it's meant for 640 Bourke is we've actually reduced the number of apartments. We've increased the overall size of the apartments. We don't have any studios in here, and what that does for a project is it elevates it," Lauren Sheldon, Far East Consortium’s Director of Sales and Marketing, said.&nbsp;

[smartcode_project:default project_id=509 project_image_fid=365687]

Rothelowman Associate Jun Chang added, "We were given the opportunity to be more generous. The apartments became bigger and squarer than any other apartments which had been designed in the CBD before that."&nbsp;

Amenities spanning more than 3,000 sqm across multiple levels further reinforce this focus on resident experience. These include a pool, gym, co-working areas, and a range of hospitality-inspired spaces such as a whisky lounge, library, and private dining rooms, many drawing reference from traditional bathhouses and Melbourne’s laneway culture.

"We wanted to make both the pool and the gym area to be absolutely destinational, and when you traverse across to these spaces, there is a gentle familiarity to the beautiful notions of the hammams and the Roman baths, a gentle nod to history," Chang noted.

At street level, the project contributes to the ongoing transformation of the western CBD, with upgrades to Langs Lane and the introduction of retail, hospitality, and gallery spaces designed to activate the precinct and strengthen its connection to the surrounding city fabric.

[smartcode_project:default project_id=509 project_image_fid=365689]

The location places residents within walking distance of Southern Cross Station, Flagstaff Gardens, Queen Victoria Market, and the Docklands waterfront, positioning the development within a rapidly evolving inner-city neighbourhood.

"We believe it's the best site left in the city of Melbourne," Craig Williams, Executive Director at Far East Consortium, said.&nbsp;

640 Bourke Street is Far East Consortium’s 14th building in Melbourne’s western CBD.

"A very elegant designed building. It's going to be a Melbourne statement for many, many years to come."

One-bedroom apartments are priced from around $640,000, with 640 Bourke Street targeting completion in 2029.

Renders shown are Artist's Impressions correct as of May 2026.

[smartcode_project_cta:default project_id=509]

Joel Robinson

Heritage-led design anchors Far East Consortium’s 640 Bourke St, Melbourne

<a href="https://www.apartments.com.au/developers/mayd-group">MAYD Group</a> has set a new residential price record in Queensland with the $30 million sale of the penthouse at its <a href="https://www.apartments.com.au/new-apartments/one-burleigh-88-the-esplanade-burleigh-heads-qld-4220">ONE Burleigh</a> development in Burleigh Heads.

The sale equates to around $37,500 per sqm.

The two-level, 800 sqm penthouse, featuring five bedrooms, five bathrooms, five car spaces, and a private infinity pool overlooking the Pacific Ocean, was acquired by a Gold Coast-based entrepreneur, highlighting continued demand for ultra-premium beachfront product.

Selling agent Freddie Tehle of PRD Burleigh Heads said the result reflects tightening supply of high-quality, large-format apartments in Burleigh.

“There’s very limited opportunity to secure this level of scale and absolute beachfront position in <a href="https://www.apartments.com.au/developments/burleigh-heads-qld-4220">Burleigh Heads</a>,” Tehle said.

“Buyers are increasingly seeking apartments that genuinely replace a standalone home, and this penthouse delivers that with its size, privacy, and direct ocean frontage.”

[smartcode_project:default project_id=146358 project_image_fid=323057]

The sale comes as construction progresses on ONE Burleigh, a boutique development of 17 full-floor residences at 88 The Esplanade, scheduled for completion in early 2027.

Developed by MAYD Group and designed by <a href="https://www.apartments.com.au/architects/mas-architecture-studio">MAS Architecture</a> with interiors by <a href="https://www.apartments.com.au/interior-designers/sici-design">Sici Design</a>, the project has been positioned as a collection of house-sized beachfront apartments, each occupying an entire floor with around 381 sqm of internal and external living space.

When construction commenced, MAYD director Todd Mould pointed to the long-term resilience of premium coastal real estate as a key driver behind the project.

“Real estate, particularly at the premium end, remains one of the most resilient and proven long-term investment avenues,” Mould said.

“Our ambition is that anyone who buys a MAYD-built product can genuinely feel the care, craftsmanship and commitment we bring to every detail.”

[smartcode_project:default project_id=146358 project_image_fid=323055]

Each residence has been configured with four bedrooms, multiple living zones, a private office, and expansive ocean-facing terraces. Interiors draw on a restrained material palette, including travertine stone, timber joinery, and integrated premium appliances.

Interior designer Sici Design said the approach was to reflect the project’s coastal setting through both materiality and spatial planning.

“ONE Burleigh is our vision of luxury living, designed to bring the essence of Burleigh Heads' vibrant coastal beauty into an unparalleled residential experience.”

Residents will have access to a suite of wellness-focused amenities, including pools, sauna facilities, and dedicated relaxation spaces, reflecting a broader shift toward lifestyle-driven apartment design on the Gold Coast.

[smartcode_project:default project_id=146358 project_image_fid=323052]

The project occupies a southern Esplanade site with uninterrupted beachfront frontage, an increasingly rare offering in Burleigh Heads, free from the Norfolk Pines that line much of the coastline and often limit direct ocean outlook.

Mould said the design intent was to balance that outlook with a sense of retreat.

“Living at ONE Burleigh is about how your day naturally unfolds, morning light across the ocean, coffee on the balcony, and being in Burleigh but elevated above the noise.”

The result further reinforces Burleigh Heads’ emergence as one of the Gold Coast’s most tightly held and supply-constrained beachfront markets, where boutique, owner-occupier-focused developments are increasingly setting new price benchmarks.

[smartcode_project_cta:default project_id=146358]

MAYD Group sets Queensland record with $30 million penthouse sale at ONE Burleigh in Burleigh Heads

Apartment developers in the Gold Coast are finding new, creative ways to differentiate themselves from competing projects, as new supply starts to flow through up and down the Coast.

Developer BIG Projects brought in the renowned Sydney-based design studio YSG Studio to craft the interiors for The Frederick, BIG Projects' new Mermaid Beach project and YSG Studio's first move into the multi-residential development space.

[smartcode_project:default project_id=110588 project_image_fid=5346]

It was a strategic move for BIG Projects to bring in a Sydney eye to the development.

“Our role is to give our design partners the space and freedom to explore,” says Matt Barrett, Director of BIG Projects.

“We wanted YSG Studio to capture the essence of Nobby’s, to design a building that embraces life, light and connection, while creating a genuine sense of place.”

There are only 39 apartments in The Frederick, including a striking beach house, just 100 metres from the booming Nobby Beach precinct.&nbsp;

[smartcode_project:default project_id=110588 project_image_fid=5347]

Yasmine Ghoniem, Director of YSG Studio, says their vision&nbsp;for The Frederick "reinvents coastal living."

“Nobby’s has such an iconic energy, it’s one of those rare pockets of the Gold Coast where the community, the beach, and the streets all feel connected,” Ghoniem says.

"Responding to the neighbouring coastline, soothing curves add a relaxing regional overlay, while unique detailing really sets it apart. It’s a place that feels lived in from the moment you step inside.”

A standout feature of The Frederick is its rooftop terrace, an uncommon inclusion for a boutique, low-rise building, where amenity is typically concentrated at ground level.

[smartcode_project:default project_id=110588 project_image_fid=5360]

Positioned to capture panoramic views from the hinterland to the ocean, the rooftop has been designed as a series of intimate zones. It includes a pool, sauna, sun decks, workspaces and dedicated entertaining areas.

“The rooftop was conceived as a collection of spaces where residents can unwind and connect, an extension of the Nobby’s lifestyle,” Barrett says.

Architecture for the project was led by Plus Studio, with landscape design by LDG Landscape Architecture.

SRQ Projects Director Nick Clydsdale, who is handling sales at The Frederick, says the majority of enquiry is coming from South East QLD and Victorian buyers who have been actively searching between Broadbeach and Mermaid Beach for some time.

"They’ve reviewed a number of projects, however this one has stood out for its unique detailing and compelling design,"&nbsp;Clydsdale says.

Site demolition is slated for this month, with construction commencing soon after. BIG Projects is targeting a late 2027 completion.

[smartcode_project_cta:default project_id=110588]

Sydney’s YSG Studio makes Gold Coast multi-residential debut with BIG Projects at The Frederick

Melbourne-based property developer ALTA Property has this week achieved planning approval for the adaptive re-use of a former commercial tower into a $200 million, 169-apartment project at 10 Queens Road, one of the last developable sites along the Albert Park Lake-fronting boulevard.&nbsp;

Set within one of Melbourne’s most sought-after precincts and designed by <a href="https://www.apartments.com.au/architects/fraser-partners-0">Fraser and Partners</a>, the illustrious building will offer unparalleled views across Albert Park Lake, Port Phillip Bay and Melbourne CBD.&nbsp;

The mix of 1, 2 and 3-bedroom residences will be complemented by a ground-floor amenity featuring private dining, a lounge bar, gym and wellness spaces, co-working, outdoor communal gardens, and retail.&nbsp;

The 17-storey building is a masterclass in adaptive re-use, with the existing commercial building’s façade, shell and internal structure to be retained, before high-end residences are built from the ground up in a newly built Albert Park facing addition to the building.&nbsp;

Sitting atop the building will be two 320+sqm penthouses with private rooftop terraces, which are expected to be priced between $9 - $11 million.&nbsp;

<img alt="ALTA Property achieves permit approval for $200 million Queens Road tower" data-entity-type="file" data-entity-uuid="aa11211b-5581-43f9-940c-fc84d30a0e61" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/C_04.png?VersionId=Yhf5p_1EgGDu_zOIMFgvA8Ug8j3sTFQs" />

Architecturally, the building will feature a curved, geometric façade that celebrates and elevates the existing structure, with warm, muted tones which were selected to extend the materiality of the existing building rather than contrast it.&nbsp;

Interiors will bring together three metre high ceilings with waffle concrete in some spaces, natural timber, granite and Australian materials, culminating in crafted, generous and considered spaces that are defined by authenticity.&nbsp;

The adaptive re-use means that the Queens Road project will be a sustainability led, high-quality finished product, with a 62% saving in carbon emissions by re-using the existing structure rather than knocking it down and rebuilding.&nbsp;

ALTA Property was launched by Nigel Givoni in 2023, bringing over 25 years of experience in multi level residential delivery.&nbsp;

Melbourne’s property market growth is currently led by apartments. According to RPM VIC Apartments &amp; Townhomes Market Report (April 2026), units are outpacing houses, especially in the middle ring suburbs where median prices hit $757,500 – a four-year high that represents 2.9 percent growth quarter-on-quarter.&nbsp;

<img alt="ALTA Property achieves permit approval for $200 million Queens Road tower" data-entity-type="file" data-entity-uuid="647e13d7-b4bc-433a-9bc9-fe3c3dd4f2ec" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/V_06.png?VersionId=ou4NUCWUgA3NAy.6CQJlEdKX50j3dOk6" />

For ALTA Property Founder Nigel Givoni, this performance speaks to the confidence he has in the Melbourne market.&nbsp;

“Queens Road represents a rare opportunity to continue to shape our presence in the Melbourne market.,"&nbsp;Givoni says.

"With a considered project team and a premier site along one of the city’s most sought-after boulevards, we look forward to contributing to the fabric of this established address.

“Other Australian markets are getting a lot of attention, but I believe the depth of value in Melbourne is being overlooked. The fundamentals are strong, population growth is steady and, based on our preliminary conversations with a leading builder, construction costs are beginning to normalise, creating further opportunity."

Givoni says the project is a&nbsp;highly considered example of adaptive re-use, delivering quality, high-end residences, premium hotel-inspired amenities and an architecturally striking façade, all achieved without the need to remove the existing structure.

"We are really looking forward to the market’s response,” he said.&nbsp;

ALTA Property to deliver $200 million Queens Road apartment tower

Construction is set to begin at <a href="https://www.apartments.com.au/new-townhouses/orchard-mews-glen-iris-18-scott-grove-glen-iris-vic-3146">Orchard Mews</a> in Glen Iris, with&nbsp;PC Whitehall &amp; Sons&nbsp;now appointed as the townhome development moves into its next phase.

The development by&nbsp;<a href="https://www.apartments.com.au/developers/montcoeur">MontCoeur</a>,&nbsp;located at 18 Scott Grove, is now around 30 per cent sold, with completion targeted for late-2027.

Orchard Mews comprises a curated collection of three- and four-bedroom customisable townhomes, positioned within one of <a href="https://www.apartments.com.au/developments/glen-iris-vic-3146">Glen Iris</a>’ more tightly held residential streets. The low-density project has been designed by <a href="https://www.apartments.com.au/architects/cera-stribley-architects">Cera Stribley</a>, with landscape architecture by <a href="https://www.apartments.com.au/landscape-architect/jack-merlo">Jack Merlo</a>, bringing together a team known for high-end residential projects across Melbourne.

[smartcode_project:default project_id=150128 project_image_fid=366285]

The development is defined by its focus on flexible living and long-term usability. Each residence includes multiple living zones and a customisable multipurpose room, allowing buyers to tailor spaces to suit changing needs, whether as a home office, additional bedroom, wellness area or entertainment space.

Architecturally, the townhomes emphasise natural light and spatial volume, with dual-aspect layouts and double-height living areas incorporated into the design. Interiors feature natural stone benchtops, premium appliances, and a neutral material palette intended to support everyday functionality rather than statement-driven finishes.

All residences are all-electric and include private lifts and secure double garages, reflecting a broader shift toward sustainability and future-focused housing in Melbourne’s established suburbs.

[smartcode_project:default project_id=150128 project_image_fid=366277]

Outdoor connections are also central to the offering, with a mix of private courtyards and terraces extending internal living spaces and integrating with the landscaped surrounds.

The Scott Grove address places Orchard Mews within close proximity to some of Melbourne’s key lifestyle and education amenities, including Scotch College, Sacré Cœur, Cabrini Hospital and the retail hub of Chadstone. Public transport access is also nearby, with trams and Gardiner Station providing connectivity to the CBD and surrounding suburbs.

[smartcode_project_cta:default project_id=150128]

Construction to commence at luxury Glen Iris townhome project, Orchard Mews

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

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Westpac's chief economist Bill Evans have drastically changed his forecast for the June quarter given the ongoing economic crisis due to COVID-19.
He expects the June quarter will see unemployment rate will rise over 11 per cent, while GDP is expected to contract by 3.5 per cent.
"We do not expect a significant recovery until the December quarter", Evans said.
"Two weeks ago when I last spoke to you we were bold enough to say there will be a recession when most people were in denial about that", Evans said, after predicting a 0.6 per cent decline in the Australian economy in the first half of the year.
"Then four days later, when we analysed the government's first stimulus package, we said no there will still be a recession, even though most commentators thought it would be enough to avoid a recession."
Evans had previously forecast back to back 0.3 per cent quarter contractions before a 2.2 per cent growth in the second half of 2020 as the economy recovered from COVID-19.
"[The shutdowns] have changed the face of the economy quite significantly", Evans said. 
Two weeks ago Evans forecasted a seven per cent unemployment rate, but he notes things have moved a lot further, a lot more quickly than that.
<iframe src="https://www.youtube.com/embed/8fziCgfoVmo" frameborder="0" width="360" height="315"></iframe> Evans full update. Source: WestpacIQ.
"It will involve 814,000 job losses [over the June quarter]".
Evans suggests the September quarter is difficult to predict.
"We were pretty optimistic that we would start to see the recovery blooming in the September quarter.
"The government is now talking a six month period of shutdowns.
"We expect the September quarter will probably see  the turning point in a number of new cases of COVID-19, which will give markets a lot of encouragement, but the economy will still be very soft and the gov will be slow to release a lot of these shutdowns.
Evans forecasts no further job losses over the September quarter, but not much improvement either, which will see an 11 per cent unemployment rate at the end of September
December quarter is where Evans predicts a "substantial improvement" with the shutdowns being ceased and confidence coming back to markets.
We expect about another 350,000 new jobs at the end of December, ending the unemployment year at 8.8 per cent.
"2021 will be a year when things will gradually improve, but we're not optimistic we will see that 5.1 per cent unemployment rate anytime in the future."
Over 2020, Evans says the economy will have contracted by three per cent. 
 
 
 
 
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jrobinson-rf4aSBido9

June quarter to see 11 per cent unemployment and GDP contract 3.5 per cent : Westpac's Bill Evans

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EXPERT OBSERVER
On Tuesday (24 March) I will be <a href="https://www.hotspotting.com.au/events/" target="_blank">hosting a lunchtime webinar</a> in which I will discuss the impact of the coronavirus on real estate with Rich Harvey of propertybuyer. 
We’ve been inundated with registrations and it will the most popular webinar ever hosted by Hotspotting. Not surprisingly, with the virus impact dominating news media, people have an urgent interest in how this will play out for real estate.
The virus impact is creating volatile share markets but I expect the outcomes for property markets to be quite positive by comparison.
At times of extreme uncertainty and volatility, Australians tend to retreat to the solidity and relative safety of bricks and mortar.
We saw that the last time there was a global crisis impacting on our economy and causing the Federal Government and the Reserve Bank to take special action – and that was in the wake of the Global Financial Crisis in 2008. 
At that time we were inundated with economists and others seeking their 15 minutes of fame by forecasting a collapse in housing values. Academic Steve Keen famously predicted that our property values would drop at least 40% in 2009. If he’d been right, it would have been an unprecedented demise of house prices, not only in Australia but anywhere in the world.
And Keen was not alone. At that time, and in subsequent years, there was a seemingly never-ending line-up of doomsday forecasters for Australian real estate. 
One American spruiker, seeking to drum up publicity for an Australian seminar tour, claimed that house values would drop 60% and that land values would fall 90%. 
Renowned doomsday ranter Harry S Dent has claimed our property values were on the point of collapse on at least three separate visits to Australia over the past decade.
Keen, Dent and all the other forecasters have one thing in common: they were all proven spectacularly wrong, every time.
In 2009, at a time when Keen predicted a 40% drop in Australian property values, house values rose 13.6% - that’s the weighted average increase across the eight state and territory capital cities in calendar 2009, according to the Australian Bureau of Statistics.
Every capital city except Adelaide recorded a double-digit rise in house prices in 2009.
And in 2010 property values rose another 6%, according to the ABS, with all capital cities recording some level of growth, except Perth.
One of the messages we received from those times, and from other periods when share markets have over-reacted to situations in the global economy, is that the Australian property market does not follow the lead of the share market.
In fact, often it does the opposite. 
One of the factors that will keep residential real estate solid amid the virus crisis is the general shortage of homes in Australia, amid times of strong demand from owner-occupier buyers, including first-home buyers.
There was relatively little construction of new dwellings in 2019. Vacancies across Australia are very low in most locations and listings of properties for sale remain well down on the levels of recent years.
One measure showing the general shortage of homes is the vacancy rate figures published each month by SQM Research.
Their latest report shows that, for the first time in many years, every one of the eight state and territory capital cities has a vacancy rate below 3%.
In recent years both Perth, Brisbane and Darwin have had quite high vacancy rates and Sydney recently also had a vacancy rate above 3%. But now Perth is down to 2%, Brisbane is 2.2% and Darwin has dropped steadily lately and is now 2.7%. Sydney’s rate has also fallen and it’s now 2.9%.
Hobart, Canberra and Adelaide all have vacancy rates around 1%, which means their rental markets are very tight. Melbourne has fallen lately and well as its vacancy rate is now just 1.9%. 
So four of the capital cities are below 2% and all of them are lower than 3%.
With availability of rental properties so low, we’re seeing rents rising in most of the capital cities.
If vacancies are tight and rents are rising, prices are likely to heading north as well – and that’s certainly the case at the moment.
The price report published by CoreLogic earlier this month showed prices had risen in the previous three months pretty much everywhere in Australia – in all eight capital cities and in all seven state regional jurisdictions.
The SQM Research figures published on 17 March showed strong growth in our largest cities, with Sydney up 11%, Melbourne 9% and Brisbane around 7%.
But Hobart still leads, according to these figures, with house prices 14% higher than a year ago.
And there were also moderate rises in cities like Canberra and Adelaide.
So, overall, the data shows that our property markets are very strong – and well placed to handle whatever outcomes arise from the virus crisis.
Terry Ryder is the founder of hotspotting.com.au
<a href="https://mailto:ryder@hotspotting.com.au">ryder@hotspotting.com.au</a>
twitter.com/hotspotting
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terryryder-YECXbqmri2

Coronavirus, a threat or opportunity for the housing market? Hotspotting's Terry Ryder

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RBA SPEECH
The Reserve Bank Board met yesterday and decided on a comprehensive package to help support jobs, incomes and businesses as the Australian economy deals with the coronavirus. I would like to use this opportunity to explain this package and to answer your questions.
We are clearly living in extraordinary and challenging times. The coronavirus is first and foremost a very major public health problem. But it has also become a major economic problem, which is having deep ramifications for financial systems around the world. The closure of borders and social distancing measures are affecting us all and they are changing the way we live. Understandably, our communities and our financial markets are both having trouble dealing with a rapidly unfolding situation that they have not seen before.
As our country manages this difficult situation, it is important that we do not lose sight of the fact that we will come through this.
At some point, the virus will be contained and our economy and our financial markets will recover.
Undeniably, what we are facing today is a very serious situation, but it is something that is temporary. As we deal with it as best we can, we also need to look to the other side when things will recover. When we do get to that other side, all those fundamentals that have made Australia such a successful and prosperous country will still be there. We need to remember that.
To help us get to the other side, though, we need a bridge. Without that bridge, there will be more damage, some of which will be permanent, to the economy and to people's lives.
Building that bridge requires a concerted team effort, with us all pulling together in the country's interest. On the economic front, there is very close policy coordination between the Australian Government, the Australian Treasury, the Reserve Bank and Australia's financial regulators. We are all in close contact with one another and are working constructively together and we will continue to do so. This coordination is evident in the various policy statements today.
Governments across Australia are playing their important role in building that bridge to the recovery, with the various fiscal initiatives from the Australian and state governments providing very welcome support. Rightly, the focus is on supporting businesses and households who will suffer a major hit to their incomes. It is increasingly clear that further help will be required on this front and the Australian Government has indicated that additional policy measures will be announced shortly. Australian public finances are in good shape and the country's history of prudent fiscal management gives us the capacity to respond now.
The banks too have an important role to play in building that bridge to the recovery by supporting their customers. Without this support, it will be harder for us all to get to the other side in reasonable shape.
Australia has a strong financial system, which is well placed to provide the needed support to businesses and households. The system has strong capital and liquidity positions and our financial institutions have invested heavily in resilience. As APRA confirmed this afternoon in a public statement, the current large buffers of capital and liquidity are able to be used to support ongoing lending to the economy.
The financial regulators have also confirmed that they are examining how the timing of various regulatory initiatives might be adjusted to allow financial institutions to concentrate on their businesses and work with their customers. APRA and ASIC both stand ready to assist institutions work through regulatory issues arising from the virus. The Council of Financial Regulators is meeting again tomorrow and will also meet with the largest lenders to discuss how they can support their customers and whether there are any regulatory impediments in the way.
The Reserve Bank itself is also playing a role in building that bridge to the recovery. I will now turn to that.
Our major focus is to support jobs, incomes and businesses, so that when the health crisis recedes the country is well placed to recover strongly. Supporting small business over coming months is a particular priority.
Prior to today's announcement, we had already taken several steps over recent days to support the Australian economy.
Over the past week or so we have been injecting substantial extra liquidity into the financial system through our daily market operations. As part of this effort, we will be conducting one-month and three-month repo operations each day. We will also conduct repo operations of six-month maturity or longer at least weekly, as long as market conditions warrant. As a result of these liquidity operations, Exchange Settlement balances have increased from around $2.5 billion a month ago to over $20 billion today.
The Reserve Bank also stands ready to purchase Australian government bonds in the secondary market to support its smooth functioning. The government bond market is a key market for the Australian financial system, because government bonds provide the pricing benchmark for many financial assets. Our approach here is similar in concept to our longstanding approach to the foreign exchange market, where we have been prepared to support smooth market functioning when liquidity conditions are highly stressed. We now stand ready to do the same in the bond market and we are working in close cooperation on this with the Australian Office of Financial Management (AOFM).
In addition to these previously announced measures, today's package has four elements. They are: a reduction in the cash rate to 0.25 per cent; a target of 0.25 per cent for the yield on 3-year government bonds; a term funding facility to support credit to businesses, particularly small and medium-sized businesses; and an adjustment to the interest rate on accounts that financial institutions hold at the RBA.
I will discuss each of these in turn.
<h2 id="1-a-further-reduction-in-the-cash-rate-to-per-cent">1. A Further Reduction in the Cash Rate to ¼ Per Cent</h2>
This brings the cumulative decline over the past year to 1¼ percentage points. This is a substantial easing of monetary policy, which is boosting the cash flow of businesses and the household sector as a whole. It is also helping our trade-exposed industries through the exchange rate channel. At the same time, though, low interest rates do have negative consequences for some people, especially those relying on interest income. The Reserve Bank Board has discussed these consequences extensively, but the evidence is that lower interest rates do benefit the community as a whole, although I acknowledge that the effects are uneven.
With this decision today, the policy rates set by the Reserve Bank of Australia, the United States Federal Reserve, the Bank of England and the Reserve Bank of New Zealand are all effectively at ¼ per cent. Each of us are using all the scope we have with interest rates to support our economies through a very challenging period.
At its meeting yesterday, the Board also agreed that we would not increase the cash rate from its current level until progress was made towards full employment and that we were confident that inflation will be sustainably within the 2–3 per cent range. This means that we are likely to be at this level of interest rates for an extended period.
Before the coronavirus hit, we were expecting to make progress towards full employment and the inflation target, although that progress was expected to be only very gradual. Recent events have obviously changed the situation and we are now likely to remain short of those objectives for somewhat longer.
I am not able to provide you with an updated set of economic forecasts. The situation is just too fluid. But we are expecting a major hit to economic activity and incomes in Australia that will last for a number of months. We are also expecting significant job losses. The scale of these losses will depend on the ability of businesses to keep workers on during this difficult period. We saw during the global financial crisis how flexibility in working arrangements limited job losses and this benefited the entire community. I hope the same is true in the months ahead.
It is also important to repeat that we are expecting a recovery once the virus is contained. The timing and strength of that recovery will depend in part upon how successful we are, as a nation, in building that bridge to the other side. When that recovery does come, it will be supported by the low level of interest rates. We will maintain the current setting of interest rates until a strong recovery is in place and the achievement of our objectives is clearly in sight.
<h2 id="2-a-target-yield-on-3-year-australian-government-bonds">2. A Target Yield on 3-year Australian Government Bonds</h2>
Over recent decades, the Reserve Bank's practice has been to target the cash rate, which forms the anchor point for the risk-free term structure. We are now extending and complementing this by also targeting a risk-free interest rate further out along the yield curve.
In particular, we are targeting the yield on 3-year Australian Government Securities (AGS) and we have set this target at around 0.25 per cent, the same as the cash rate. Over recent weeks, the yield on 3-year AGS has averaged 0.45 per cent, so this represents a material reduction.
We have chosen the three-year horizon as it influences funding rates across much of the Australian economy and is an important rate in financial markets. It is also consistent with the Board's expectation that the cash rate will remain at its current level for some years, but not forever.
To achieve this yield target, we will be conducting regular auctions in the bond market. We published some technical details earlier today and we will keep the market informed of our operations. Our first auction will be tomorrow. As part of this program, our intention is to purchase bonds of different maturities given the high level of substitutability between bonds. We are also prepared to buy semi-government securities to achieve the target and to help facilitate the smooth functioning of Australia's bond market.
I want to make it clear that our purchases will be in the secondary market and we will not be purchasing bonds directly from the Government.
I would also like to emphasise that we are not seeking to have the three-year yield identically at 25 basis points each and every day. There will be some natural variation, and it does not make sense to counter that. It may also take some time for yields to fall from their current level to 25 basis points.
I understand why many people will view this as quantitative easing – or QE. This is because there is a quantitative aspect to what we are doing – achieving this target will involve the Reserve Bank buying bonds and an expansion of our balance sheet.
But our emphasis is not on the quantities – we are not setting objectives for the quantity and timing of bonds that we will buy, as some other central banks have done. How much we need to purchase, and when we need to enter the market, will depend upon market conditions and prices.
Rather than quantities or the size of our balance sheet, our focus is very much on the price of money and credit. Our objective here is to provide support for low funding costs across the entire economy. By lowering this important benchmark interest rate, we will add to the downward pressure on borrowing costs for financial institutions, households and businesses. We are prepared to transact in whatever quantities are necessary to achieve this objective.
We expect to maintain the target for three-year yields until progress is being made towards our goals of full employment and the inflation target. Our expectation, though, is that the yield target will be removed before the cash rate is increased.
<h2 id="3-a-term-funding-facility-for-the-banking-system-with-support-for-business-credit-especially-to-small-and-medium-sized-businesses">3. A Term Funding Facility for the Banking System with Support for Business Credit, Especially to Small and Medium-sized Businesses</h2>
The scheme has two broad objectives.
The first is to lower funding costs for the entire banking system so that the cost of credit to households and businesses is low. In this regard, it will complement the target for the three-year yield on AGS.
The second objective is to provide an incentive for lenders to support credit to businesses, especially small and medium-sized businesses. This is a priority area for us. Many small businesses are going to find the coming months very difficult as their sales dry up and they support their staff. Assisting small businesses through this period will help us make that bridge to the other side when the recovery takes place. If Australia has lost lots of otherwise viable businesses through this period, making that recovery will be harder and we will all pay the price for that. So it is important that we address this.
Under this new facility, authorised deposit-taking institutions (ADIs) in total will have access to at least $90 billion in funding. ADIs will be able to borrow from the Reserve Bank an amount equivalent to 3 per cent of their existing outstanding credit to Australian businesses and households. ADIs will be able to draw on these funds up until the end of September this year.
Lenders will also be able to borrow additional funds from the Reserve Bank if they increase credit to business this year. For every extra dollar lent to large business, lenders will have access to an additional dollar of funding from the Reserve Bank. For every extra dollar of loans to small and medium-sized businesses they will have access to an additional five dollars. These funds can be drawn upon up until the end of March next year. There is no extra borrowing allowance for additional housing loans.
The funding from the Reserve Bank will be for three years at a fixed interest rate of 0.25 per cent, which is substantially below lenders' current funding costs. Institutions accessing this scheme will need to provide the usual collateral to the Reserve Bank, with haircuts applying. The first drawings under this facility will be possible no later than four weeks from today.
This scheme is similar to that introduced by the Bank of England. Unlike the Bank of England's scheme, though, the interest rate is fixed for the term of the funding. This is consistent with our view that the cash rate is likely to stay at its current level for some time. Another difference with the Bank of England's scheme is that we have not included a higher interest rate if credit contracts. While a decline in credit would be undesirable, including a penalty may act as a disincentive for institutions to take part in the scheme.
We are encouraging all ADIs to use the term funding facility to help support their customers. I welcome APRA's confirmation this afternoon that it also supports ADIs using this scheme. I also welcome the Australian Government's announcement that it will support the markets for asset-backed securities through the AOFM. This support is important as it will help non-bank financial institutions and small lenders to continue to provide credit to Australian households and businesses.
<h2 id="4-an-adjustment-to-the-interest-rate-on-exchange-settlement-balances">4. An Adjustment to the Interest Rate on Exchange Settlement Balances</h2>
Under our longstanding framework, the RBA operates a corridor system around the cash rate. Under that system, the balances that banks hold with the RBA overnight in Exchange Settlement accounts earn an interest rate 25 basis points below the cash rate. And on the other side of the corridor, in the event that a bank needed to borrow from the RBA overnight, it would be charged 25 basis points above the cash rate.
Under this arrangement and with the cash rate now at 25 basis points, the interest rate on Exchange Settlement balances would have been zero. We have decided to increase this to 10 basis points. We are not making any change to the arrangements for the top of the corridor.
This adjustment to the corridor reflects the fact that there will be a significant increase in the balances held in Exchange Settlement accounts due to the combined effect of the Bank's enhanced liquidity operations, bond purchases and term funding program. Maintaining a zero interest rate on these balances would increase the costs to the banking system. In the current environment, this would be unhelpful.
The increase in settlement balances is also expected to change the way that the cash market operates. In other countries, where there have been large increases in balances at the central bank, the cash rate equivalent has drifted below the target and transaction volumes in the cash market have declined. It is likely that we will see the same outcome in Australia. The Reserve Bank will continue to monitor the cash market closely and is prepared to adjust arrangements if the situation requires.
So these are the four measures announced earlier this afternoon. Together, they represent a comprehensive package to lower funding costs in Australia and support the supply of credit. Complementary initiatives by APRA and the AOFM are also working towards those same objectives.
The term funding scheme and the three-year yield target are both significant policy developments that would not have been under consideration in normal times. They both carry financial and other risks for the Reserve Bank and they both represent significant interventions by the Bank in Australia's financial markets.
The Reserve Bank Board did not take these decisions lightly. But in the context of extraordinary times and consistent with our broad mandate to promote the economic welfare of the people of Australia, we are seeking to play our full role in building that bridge to the time when the recovery takes place. By doing all that we can to lower funding costs in Australia and support the supply of credit to business, we will help our economy and financial system get through this difficult period.
PHILIP LOWE is the Governor of the RBA
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Monetary policy decisions: RBA Governor Philip Lowe

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EXPERT OBSERVER
Employment rose by 26,700 jobs in February – after increasing by 12,900 in January (previously estimated at +13,500). Full-time jobs rose by 6,700 with part-time jobs up by 20,000. Economists had tipped an increase in total jobs of around 8,000 and a jobless rate near 5.3 per cent.
The unemployment rate fell from 5.29 per cent (to two decimal places) in January to 5.10 per cent in February in seasonally adjusted terms. In trend terms, the jobless rate was steady at 5.1 per cent in February.
Hours worked fell by 3.0 per cent in February, but were up by 0.5 per cent over the year. In trend terms, hours worked were up by 0.8 per cent on the year.
Participation rate: The participation rate eased from 66.1 per cent to 66.0 per cent in seasonally adjusted terms. In trend terms the participation rate was steady at 66.0 per cent.
Unemployment across states in February: NSW 4.6 per cent (January 4.5 per cent); Victoria 5.3 per cent (5.4 per cent); Queensland 5.6 per cent (6.2 per cent); South Australia 5.8 per cent (5.7 per cent); Western Australia 5.2 per cent (5.7 per cent); Tasmania 5.0 per cent (5.7 per cent). In trend terms, Northern Territory 5.5 per cent (5.5 per cent); ACT 2.9 per cent (3.0 per cent).
What does it all mean?
To some extent today's data is ancient history. The COVID-19 coronavirus crisis really started to impact the broader economy in March. The impact of the virus in February was largely on tourism-dependent businesses and regions, and on the education sector. However the February jobs data would have also incorporated the effects of the bushfires that impacted so many of the country's regions..
That said, there was a positive lead for today's jobs figures from the January Department of Employment skilled vacancies series. And while a lot has happened over March, the jobs data for February – just like the retail trade figures – were indeed encouraging. And especially of encouragement was data showing the female jobless rate equalling the lowest rate in 11 years. And while monthly job figures at a state level are volatile, Tasmania's jobless rate is the lowest for over 8 years with Western Australia's jobless rate the lowest rate in over 5 years. The ACT's trend jobless rate is the lowest in 11 years.
The Bureau of Statistics "confirmed that the disruption from the bushfires did not have a notable impact on key headline statistics".
The outlook for the job market is challenging. While supermarkets, grocery wholesalers and transport groups are looking to hire staff, airlines, hospitality, sporting and cultural sectors will struggle to retain workers. So the next Federal Government support package will be super-important. It will be important for the Government to do all that it takes to keep Aussies in jobs.
It serves no value – and indeed it may be misleading – to try and forecast in the current environment. Much will depend on how quickly active coronavirus cases peak in Australia, how aggressive State and Federal governments are in supporting businesses and how quickly vaccines and treatments are developed to deal with COVID-19.
There is one thing no Australian should do – underestimate the resilience of the economy. Australia hasn't posted a recession in 28 years, despite all manner of shocks, including the global financial crisis. And while it will be more difficult to avoid a downturn this time, our economy should also bounce back quickly.
CRAIG JAMES is the Chief Economist of CommSec
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Job market in good shape ahead of virus crisis: CommSec's Craig James

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First home buyers are typically priced out of the stand-alone housing market for the Gold Coast’s central localities within two kilometres of the beach, according to the latest report from valuation firm Herron Todd White.  
“With a non-western front renovator in Mermaid Waters generally starting at around $700,000, this market appeals more to the second or third home buyer looking to secure a good position close to the beach and facilities,” the March report found.
“Typically in this suburb, house buyers are upgrading with some equity behind them or downsizing from a higher priced waterfront home, ditching the mortgage but still benefiting from the lifestyle amenity of the central location.
Currently prices are generally stable with purchasers either looking to renovate and flip for a quick profit as there is steady local demand for recently renovated, just move in, nothing to do type houses.
This is evidenced on the Isle of Capri, a residential locality within the suburb of Surfers Paradise, with recent sales for non-waterfront properties at stronger price levels.
“This locality has benefited from gentrification in recent years with the local shopping centre, Capri on Via Roma, being completely revamped and remodelled within the past few years and the tram line within walking distance,” the report said.
An example is 5 Saint Andrews Avenue, Isle of Capri which transacted in August 2019 for $1.84 million to a local buyer.
Built in 2019, the dwelling is an architect-designed, contemporary, two-level, fourbedroom plus study or bedroom, four-bathroom dwelling with rendered masonry, fibro cement sheet walls, skillion metal roof and double car garage.
It features a high standard quality fit out, two-level void over the living room, catwalk hallway, polished timber flooring, timber bi-fold doors, ducted air conditioning, wine room, inground swimming pool and established landscaping. The land area is 539 square metres.
The site was previously sold with an older dwelling for $890,000 in March 2018.
First home buyers in these central localities are mainly confined to the unit market with agents reporting that affordability is the main driver. $400,000 is generally the price point cut off and body corporate fees are a significant factor.
“First home buyers are also competing with investors who also factor in likely achievable rental income with outgoings including body corporate fees,” according to the report.
“The first home buyer generally must look for a house in the more outlying suburbs such as Carrara where it’s possible to get a semi modern three bedroom duplex unit for circa $400,000. House prices start around the mid $400,000s for a three bedroom house,” the report said.
“Mudgeeraba has seen increased townhouse and unit development within recent years with product increasingly including four bedrooms or three bedrooms plus a study or bedroom which is appealing to investors and first home buyer families alike. Mudgeeraba, located west of the M1, is also a sought-after locale for first home buyers.”
It has its own local shopping centre, schools and is within close proximity to Robina Town Centre.
Entry level three-bedroom townhouses in Mudgeeraba start at around $315,000 for something built in the 1980s with a largely dated fit out. Modern, circa 2018 built two-level townhouses providing four bedrooms, two bathrooms plus powder room with a single garage and single open carport are around $490,000.
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FHB's priced out of Central Gold coast property market: Herron Todd White

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Brisbane’s residential real estate sector performs relatively steadily throughout its price cycle, avoiding dramatic dips, swings, peaks and fluctuations, according to the latest report from valuation firm Herron Todd White.
“Long-term property owners tend to do fairly well as long as their asset selection is on the mark,” the March report found.
“There is also a fairly typical range of buyer types. Our first home owners are motivated by affordability and getting the most bang for their buck. Their tick list will obviously be driven by location, but they’re also keen to find decent size allotments, potential for renovation, proximity to amenities and easy access to the CBD or a wellestablished lifestyle hub,” the report continued.
“While many of our first home buyers would no doubt like to buy within the five-kilometre radius, their price point usually means a balance between location and property type and quality. As such, there are those able to cope with a second-hand unit in a prime near-city position, while others will seek a newer home on a larger lot in a suburb a bit further out.”
“Both options could appeal to first home buyers at a similar price point Of note also is that first home buyers are becoming more prominent in our market.”
“The $15,000 state government first home buyer grant (which is limited to new property) and federal government deposit scheme are helping to boost their numbers. Add to that low interest rates as a motivation to getting first timers on the property ladder.”
Conversely, upgraders in Brisbane are looking to draw on increased value in their existing homes to secure better-quality accommodation in their location of choice.
“Their desired suburb will probably be dictated by their households needs. Young professional couples might look to move out of units and head towards a detached home with some renovation potential so there’s opportunity to build fast equity.”
Upgraders are mostly looking for the advantage of more space or larger yards and hopefully improved location compared to their first home - While upgraders will reside anywhere from outer suburbs through to near CBD depending on the budget, many find themselves in mid-range suburbs with easy access to the city.
“Family buyers could almost be considered an advanced subset of upgraders. These buyers are typically driven to certain properties by school catchments, proximity to public transport, parks, amenities and lifestyle amenities.”
“While many family buyers might want to look for renovation potential, there are plenty who are motivated to acquire something ready to live in so as not to tie up their weekends doing upgrade work.”
Brisbane downsizers and empty nesters are looking for low-maintenance homes with lock-and-leave potential to allow for trips out of town - a smaller detached dwelling of good quality and with a low maintenance yard, the report found.
“We are also seeing ever increasing numbers seeking accommodation in high-end units of minimum two (even three) bedrooms. They like the security while still having space for the kids and grandkids to stay. Downsizer locations vary from the CBD through to the bayside suburbs.”
Downsizers are also drawn to large apartments in suburban nodes within close proximity of shopping centres, amenities and hospitals.
The final buyer group highlighted in the report is the business professional - These buyers want to be close to the CBD or suburban nodes so their commute is short.
“Again, low maintenance is a priority as is public transport and lifestyle facilities. It’s suspected that these buyer numbers may well increase from the interstate migrant cohort coming to Brisbane chasing a better lifestyle than in Sydney or Melbourne,” the report found.  
“The above list is, of course, not exhaustive. We are seeing a societal demographic shift with the rise of single-person households, multi-generational homes, single-parent families and share ownership among friends.”
“It’s envisaged that these varying household makeups will spur innovative and thoughtful design changes that will become more common over the next few years,” the report concluded.
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Brisbane’s real estate sector holds steady: Herron Todd White

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EXPERT OBSERVER
More carnage overnight with US stocks down another -10 per cent again in early trade to smash into the circuit breakers, with the Dow Jones shedding -36 per cent in less than a month, before a late rally.
<div id="post-body-2582528096951691734" class="post-body entry-content">
The oil price (WTI) was down at nearly $20 at one stage, before a bouncing to $22, nestling in at the lowest level since the early 2000s...so there are some value plays emerging there.
But overall, cash is king at the moment while stock market valuations continue to mean revert.
This risks sounding like a broken record, but it bears repeating that overall US stocks are still far too expensive given the outlook, and could yet fall another -30 per cent even from here (if things got really bad they could go much lower).
 
<div class="separator"><img src="https://1.bp.blogspot.com/-lq18M1eZhts/XnKhiiXFqbI/AAAAAAAA0vY/zUHAiE2ggegAqwyOYEAT9qR84VyY8a3tQCNcBGAsYHQ/s640/CAPE.jpg" width="640" height="308" data-original-height="526" data-original-width="1090"></div>
 <div>Source: Shiller PE</div>
 Don't forget that previously healthy earnings are about to be decimated, with JPM forecasting US GDP to shrink by 4 per cent in Q1 and 14 per cent in Q2. I can't watch another fund manager video demanding that you stay fully invested with them. It's time to step away from the noise and remember the <a href="https://lowrateshighreturns.com/2020/03/16/applying-the-8-timeless-principles-in-a-bear-market/" target="_blank">8 timeless principles</a>! The <a href="https://lowrateshighreturns.com/2020/01/04/maximising-your-long-term-wealth-with-the-kelly-criterion/" target="_blank">Kelly criterion</a> demands that you keep cash aside and live to fight another day - especially when markets are as overvalued as they have been - as better opportunities will always come around in the future. Remember Rule #1: don't lose money. The Aussie market stock index may catch a bid after a European stimulus announcement this morning. This is Lagarde's own 'whatever it takes' moment, but the ECB promising no limits to its commitment to the Euro, and another massive asset purchase programme. Still on the balance of probabilities the Aussie index increasingly looks likely to hit late 2009 levels this week in the 4,800s range this month. This is a swift and brutal lesson in the importance of <a href="https://lowrateshighreturns.com/2019/12/29/the-magic-of-rebalancing/" target="_blank">rebalancing</a> and keeping cash aside for future opportunities arising, with a decade of price gains erased in about 20 trades. Buy and hold at all times has been mistaken at times as a panacea or even a religion, but it's not; you need and do whatever it takes to keep yourself around to capitalise on the opportunities. 'Whatever it takes' moment
 
A historic An historic A momentous day ahead for Australian financial markets.
The Reserve Bank is set to make a landmark announcement at 2.30pm Sydney time, with Governor Lowe lined up to speak thereafter at 4pm.
Lowe will likely discuss an emergency cut in the official cash rate to 0.25 per cent, central bank purchases of government bonds, the ongoing conducting of repo operations, and other measures to ensure that credit continues to flow to households and businesses. 
Global cases of the coronavirus continue to increase at this stage, suggesting that a serious disruption to the global economy lies squarely ahead, although known cases in Australia remain relatively low at this stage. 
 
<img src="https://1.bp.blogspot.com/-PpQcwNO9df0/XnKlqpCKgHI/AAAAAAAA0vg/zHXvgYR03PYK6i4HO-HDdOhrRudmyWKYACNcBGAsYHQ/s640/CV.jpg" width="640" height="388" data-original-height="503" data-original-width="828">
Daily new cases hit fresh highs yesterday (the February 12 spike was a data collation or measurement issue).
<div class="separator"><img src="https://1.bp.blogspot.com/-QesSeFEsy4A/XnKs4AK_b6I/AAAAAAAA0vo/i5BTQupD2EEaQuoc-z-AD4xeoeGEq6pVACNcBGAsYHQ/s640/Cases.jpg" width="640" height="342" data-original-height="482" data-original-width="897"></div>
 The biggest surge in cases lately has been in Italy, with 35,713 cases and 2,978 deaths recorded to date. Recession ahead Major bank economists see the Aussie unemployment rate rising to 7 to 8 per cent (not that you can really forecast in the present environment), while the government's initial stimulus package probably isn't enough to save the economy from printing negative growth for both the first and the second quarter of the year.  
This would lock in Australia's first recession in three decades. 
Recent years been characterised by the Reserve Bank 'leaning against' asset prices and continually undershooting the inflation target, with persistently slow growth in wages and living standards.
Nobody could've predicted the great trifecta of drought, bushfires, and a global pandemic, of course, but the economy was already running well below potential before these shocks. 
At this stage all we have is mostly anecdotes about the likely state of the economy, but so many of them reflect sharp drops in revenue, income, commissions, and profits, that this is no time for half measures.
Markets will be looking for a 'whatever it takes' pledge and from Lowe, and the use of unlimited monetary ammunition until things stabilise. Anything less than that will be brushed aside in the savage market conditions. From the government's perspective infrastructure programs and tax cuts aren't going to cut it. What's needed is putting cash into the hands of households and small businesses today...to prevent the R from becoming a D. They'll write books about all this next year; it's been a momentous month. 
PETE WARGENT is the co-founder of AllenWargent property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank">blogger</a>.
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Infrastructure programs and tax cuts won't be enough: Pete Wargent

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EXPERT OBSERVER
The Governor of the Reserve Bank has announced a number of important initiatives to support the Australian economy and the financial system. Most of these initiatives come as no surprise. Westpac released a note on March 16 which set out its expectation for these initiatives.
<ol>
<li>The cash rate target has been reduced from 0.5% to 0.25%. Furthermore, it will not be increased until the Board believes that progress has been made towards full employment and inflation is sustainably within the 2–3% target band. Since exchange settlement balances are remunerated at the cash rate minus 0.25%, the Reserve Bank has committed to increase the remuneration to 0.10% in recognition that exchange settlement balances are likely to increase significantly as a result of this policy package. 
</li>
<li>The RBA has now adopted Quantitative Easing. However, instead of nominating a volume of bond purchases, it has nominated a target yield for the three year Australian government bond rate of “around 0.25%”. This is a bold move given that, in admittedly light trading, the yield on these bonds had been around 0.6% up until the announcement. Since the announcement, the rate has fallen to around 0.4%, and further adjustments to market rates may occur. Of considerable interest has been the reaction of the bond market in longer term securities, where the rate has increased to a volatile 1.6%, indicating a very steep yield curve. This yield objective is expected to be achieved through purchases of government bonds and semi government bonds, with the purchases to occur across the yield curve. These will commence tomorrow. 
</li>
<li>Westpac is particularly pleased to see that the RBA is offering a term funding facility for the banking system. This facility will be provided for three years to authorised deposit taking institutions (ADI’s) at a fixed rate of 0.25%. ADIs will be able to obtain funding for up to 3% of existing outstanding credit. The objective is to support small and medium sized business. ADIs will still be required to take on the credit risk associated with these facilities, but may consider switching more expensive facilities for existing borrowers into these facilities, providing a cash flow boost to small and medium sized businesses. 
</li>
<li>These initiatives will not affect the Bank’s ongoing provision of liquidity to Australian financial markets through repo operations which have recently been extended to six month maturities or longer.</li>
</ol>
In addition to these initiatives announced by the RBA, the Treasurer’s Office has announced that the Australian Office of Financial Management (AOFM) will be provided with an investment capacity of $15 billion to invest in wholesale funding markets used by small ADIs and non-ADI lenders. As signalled in Westpac’s note of March 16,  this initiative parallels a similar initiative by the AOFM  during the Global Financial Crisis. It will be of particular support to issuers of Mortgage Backed Securities.
Comment
The Bank is adopting a bold policy response to target the three year bond rate at well below current market pricing. This means that they are using their balance sheet to make a significant difference to the risk-free yield curve and therefore providing support to the financial system.
The market will no doubt take full advantage of this policy decision, and it will be interesting to see the volume of required purchases to achieve the interest rate target.
Westpac has been promoting the use of term funding facilities since around July last year, and we are particularly supportive of this initiative.
This article was <a href="https://westpaciq.westpac.com.au/Article/42641/14186/" target="_blank">first published on WestpacIQ</a>
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BILL EVANS is the <a href="https://www.westpac.com.au/news/authors/bill-evans/" target="_blank">chief economist at Westpac</a>.
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RBA and Commonwealth Treasury announce initiatives to support financial system: Bill Evans

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EXPERT OBSERVER
On Monday, March 9, we forecast that the Australian economy would experience a recession in 2020 with the economy contracting by 0.6% in the first half although we expected growth in the second half of 2.2% as the economy recovered from the disruption associated with COVID-19.
Our central assumption was that the COVID-19 threat would peak in the June quarter and by quarter’s end confidence and activity would begin to recover.
We described 2020 as a severe disruption or technical recession to differentiate from the last two recessions in Australia when the unemployment rate spiralled from 6% to 11%.
Our figuring last week set the forecast peak in the unemployment rate at around 5.8%- 6%, up from the current level of 5.3%.
The relatively modest increase in the unemployment rate was particularly reflective of the expectation that the disruption would be relatively short when compared to earlier recessions and viewed as such by business that there would be a degree of labour hoarding.
Later in the week we analysed the Government’s $17.6 billion Stimulus Package and concluded that the Package would not be sufficiently stimulative to avert a recession in 2020.
Our key assumptions around the Package focussed on the likely impact on spending from the $4.76 billion payments to pensioners and social security recipients and the instant asset write off provisions.
We assessed that pensioners would save around 75% of payments and social security recipients would save around 60%.
Pensioners are likely to be cautious given the collapse in bank deposit rates and health concerns. In that regard the 13.8% collapse in confidence amongst the over 65 year olds in the latest Westpac MI Consumer Sentiment Survey signals caution. Social security recipients will be unnerved by the COVID -19 threats and discouraged by the “one off” nature of the income boost.
We differed with the Government’s figuring around the lift in business investment associated with the “instant asset write off” package assuming around $2 billion compared to the Government’s estimate of $5-6 billion. With business confidence fragile going into the COVID-19 shock and weakening further we expect businesses will be cautious around boosting spending.
Nevertheless, we noted that the Package was likely to boost activity in the June quarter by 0.4% of GDP largely offsetting the estimated contraction. However we noted that conditions had deteriorated over the week and the “pre-package” contraction was now likely to be larger than estimated early last week.
In that regard our revised estimates of GDP growth in the March and June quarters, after adjusting for the Stimulus Package, are minus 0.7% and minus 0.3% respectively - a total contraction of 1% of GDP.
Recall that our estimate early last week was a total contraction of 0.6%, before adjusting for the Stimulus Package.
So what has changed?
Most notably we have seen mandatory quarantine requirements for international travellers; restrictions on large public gatherings; a brutal sell off in the global equity markets; and reports of limited liquidity in government and corporate debt markets.
Not surprisingly, as these events have moved quickly, we have made some major changes to our estimates of the impact of COVID-19 in both the March quarter and the June quarter.
We have increased our estimate of the shock to the most exposed component of consumer spending (hotels; restaurants and cafes; recreational services; and air travel) to minus 40% over the two quarters from minus 25%.
We have increased the expected shock to consumer durables to minus 7% and revised up the negative impact on home renovations and additions.
We expect outbound and inbound tourism to contract by 80% over the two quarters.
Overall we now see consumer spending contracting by 0.1% (March quarter) and 2.8% (June quarter) before recovering by 1.9% in the September quarter and 1.0% in the December quarter.
We have also made adjustments to inventories; government spending (lifting health expenditure further).
Growth through 2020 is now estimated at 1.5% with minus 1% in the first half and 2.5% in the second half.
The unemployment rate is now forecast to reach 7% by October 2020 (up from the previous estimate of 5.8%-6.0%) due to the larger negative shocks to the labour intensive sectors such as recreation; tourism; education; renovations and additions; and dwelling construction. This lift in the unemployment rate is despite reducing the participation rate from 66.1% to 65.4% as a discouraged worker effect – that is, as workers respond to a deteriorating labour market the participation rate is likely to decline.
Please note that these forecasts are not based on Australia following a European style full lock down. Not surprisingly, the forecasts are subject to downward revision in the event of such an occurrence.
This article was <a href="https://www.propertyobserver.com.au/https://westpaciq.westpac.com.au/Article/42362" target="_blank">first published on WestpacIQ</a>
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BILL EVANS is the <a href="https://www.westpac.com.au/news/authors/bill-evans/" target="_blank">chief economist at Westpac</a>.
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Westpac revise 2020 forecasts, deeper recession and 7% unemployment: Bill Evans

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Nearly 90 per cent of Finder.com.au's RBA Survey have predicted Australia will see a recession this year.
The 15 strong survey of experts and economists saw 13 say a recession was now likely. Back in December, around the same number of experts said there wouldn't be a recession.
Graham Cooke, insights manager at Finder.com.au, said fear of recession among the general public had been brewing for a while, although economists had until now, were more optimistic. "We've seen fear of recession among the Australian public grow over recent months, while the vast majority of economists were saying it wouldn't happen.  “COVID-19 pouncing unexpectedly on an already weakened Australian economy, has very much changed the game."
Two thirds of the experts surveyed however believe any recession would be over by the end of the year.
Over half of the survey (53%) predict an emergency rate cut this week, which would see rates drop to a historic low 0.25 per cent.
"Only a few days before the last RBA cut two weeks ago, 85% of economists said they did not expect a cut and only half thought the ASX 200 would drop by 10% in value", Cooke said. “Within a week, we had a cut and a 20% drop. This signals the sheer severity and speed of the coronavirus impact." Around half of the economists who responded to the last-minute survey (53%) expected the RBA to make an emergency cash rate cut this week.
Yesterday Westpac announced that they expect an interest rate cut and an announcement for quantitative easing to happen this week.
Most experts believe house prices will be negatively affected, with 20 per cent expecting a significant drop and 60 per cent expecting a slight drop.
Cooke said a downturn in the market could present a window for cashed-up Aussies ready to buy. “If you’re one of the first-time buyers who missed out on the 2019 price dip, 2020 could provide a second bite at the apple.  “Keep a close eye on your local market, but be careful – nobody knows what may be around the corner or how long this coronavirus dampening could really last,” Cooke said.
 
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