A new 25-storey apartment tower proposed for Mercer Street would push Geelong’s western gateway skyline higher, with Morphy Birrell Property Group lodging plans for a project directly beside one of the city’s most significant heritage streetscapes.

The <a href="https://www.apartments.com.au/architects/fk-australia">FK</a>-designed development at <a href="https://www.apartments.com.au/new-apartments/65-67-mercer-street-geelong-vic-3220">65-67 Mercer Street</a> has now been referred to Victoria’s Planning Minister. The site sits opposite the Geelong rail corridor and immediately south of the heritage-listed St Peter and Paul’s Catholic Church and Ashby Hall precinct.

Rather than compete with the neighbouring ecclesiastical buildings, the proposal adopts a sculpted podium intended to reference the materiality and scale of the heritage context. Planning documents note the design draws cues from the “dark stone brick” church and surrounding masonry buildings, while the tower above transitions into a softer, curved form oriented toward Corio Bay and the Geelong waterfront.

<img alt="First look: Morphy Birrell Property Group targets 25-storey Geelong tower beside landmark church precinct" data-entity-type="file" data-entity-uuid="b797d10c-d4a6-47af-b8df-1aeaa3b382be" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/public%20square.png?VersionId=QGIpcz1x1hKB6lQLl2iobyHqb6PS2Ztc" />

The development forms “Stage 5” of Morphy Birrell Property Group’s broader Mercer Street precinct strategy, following the completion of the 21-storey Miramar tower on Cavendish Street and several additional approved redevelopment stages nearby. Planning consultants Ratio said the proposal “represents an exemplary development outcome” aligned with the strategic ambitions for Central Geelong’s continued urban renewal.

The mixed-use project would replace an existing low-rise commercial building and surface parking area on the 3,320 sqm corner site. FK’s urban context report describes the proposal as a residential development comprising apartments, resident amenities, commercial space, and integrated landscaping positioned to maximise bay views and northern sunlight access.

Renders show a deeply articulated tower with curved balconies stepping above a lower masonry podium that frames a landscaped forecourt facing Mercer Street. The design intentionally preserves sightlines toward the adjacent church buildings, with the podium scaled to reinforce the heritage edge before the tower recedes upward.

<img alt="First look: Morphy Birrell Property Group targets 25-storey Geelong tower beside landmark church precinct" data-entity-type="file" data-entity-uuid="2bdca91e-66f7-4ac7-8baa-2f93bd5b564e" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/geelong%20site.png?VersionId=QOhbino4ZgzKYw5dW3QE14E.2yq.Sv87" />

The planning report highlights the site’s strategic location within 400 metres of key Geelong destinations including Cunningham Pier, the Geelong Station precinct, Deakin University, and the convention centre. Bus services run directly along Mercer Street, while the Corio Bay foreshore sits around 100 metres north of the site.

The proposal arrives amid accelerating redevelopment across central Geelong, where planning policy continues to encourage higher-density housing close to transport infrastructure and the waterfront. Mercer Street in particular has emerged as a focal point for taller apartment development due to its proximity to Geelong Station, the bay, and major civic infrastructure.

Joel Robinson

Morphy Birrell Property Group targets 25-storey Geelong tower beside landmark church precinct

Development giant&nbsp;<a href="https://www.apartments.com.au/developers/hamton">Hamton</a> and joint venture partner Hostplus have revealed the next residential stage of their $3 billion Moonee Valley Park masterplan, lodging plans for 512 more apartments within the precinct on surplus racecourse land at 110 Wilson Street, Moonee Ponds.

The proposed development, dubbed&nbsp;<a href="https://www.apartments.com.au/new-apartments/trackside-house-110-wilson-street-moonee-ponds-vic-3039">Trackside Gardens</a>&nbsp;in the planning application, follows the <a href="https://www.apartments.com.au/news/vic/first-look-exclusive-hamton-and-hostplus-reveal-sixth-stage-of-moonee-valley-park-masterplan">recent unveiling of the sixth-stage Cox Place Precinct</a> and continues the long-running transformation of the Moonee Valley Racecourse into one of Melbourne’s largest urban renewal projects.

Positioned on the north-eastern edge of the racecourse adjacent to CityLink, Trackside Gardens will comprise three residential buildings rising between 61.8 metres and 86.4 metres within a heavily landscaped precinct shaped by Hamton’s Nature Based Cities framework.

The project forms part of the broader Moonee Valley Park redevelopment being delivered by Hamton, Hostplus and the Moonee Valley Racing Club, which is reshaping the 40-hectare racecourse site into a mixed-use neighbourhood with housing, retail, commercial space, hotels, parkland and community infrastructure.

Trackside Gardens sits separately to the recently proposed Cox Place Precinct, a five-building stage comprising around 1,100 residences, two build-to-rent buildings, two build-to-sell towers, retail, office space, and a hotel overlooking the racetrack. Together, the projects continue to accelerate housing delivery across the precinct.

<img alt="First look: Hamton expands Moonee Valley Park masterplan with 512-home Trackside Gardens precinct" data-entity-type="file" data-entity-uuid="5fc1941e-52d3-41c6-abc4-0f13fe8ae5ea" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/DA%20Edits%20%281%29.png?VersionId=7qwRHq5dcvXWNot2hNOgoQhN2GIWudNK" />

Designed by <a href="https://www.apartments.com.au/architects/dko-architecture">DKO Architecture</a> with landscape architecture by Tract, Trackside Gardens has been conceived as a botanical-style residential precinct prioritising canopy planting, communal green space, and vertical landscaping.

“The architectural vision for the proposed development centres around buildings in a botanical park setting that champions the important role of nature,” the planning submission states.

“The proposal incorporates principles of biophilic design, with landscape and environmentally sustainable development influencing the ultimate design response of the buildings and prioritising the ground plane to ensure a high amenity for both occupants and visitors.”&nbsp;

Trackside Gardens will deliver 512 apartments across the three buildings, alongside 518 basement car spaces and 523 bicycle spaces. Around 20 per cent affordable housing is proposed across the broader North East Precinct, equating to around 158 dwellings.&nbsp;

The affordable housing component will be concentrated within the Wilson East building, while the remaining apartments are expected to be delivered as build-to-sell residences.

Trackside Gardens has been designed around Hamton’s Nature Based Cities initiative, founded by Executive Chair Paul Hameister OAM in partnership with the University of Melbourne, Urbis, Ark Resources and Tract. The initiative promotes integrating higher-density urban development with significant biodiversity, tree canopy and landscape outcomes.

<img alt="First look: Hamton expands Moonee Valley Park masterplan with 512-home Trackside Gardens precinct" data-entity-type="file" data-entity-uuid="89353449-7b3c-42fd-8fd8-8bf64a5ef80f" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Article%20Feature%20Image%20%28Grid%29_4.png?VersionId=X8jRt0P2L7fIWjLhfX6gPknXToXIBeLj" />

A comprehensive landscape strategy would introduce deep soil planting, vertical greening, communal gardens, and new pedestrian links throughout the site.

Planning documents state the development is targeting a 5 Star Green Star Buildings rating, a 7.5-star average NatHERS rating, and “Exemplary” Nature Based Cities certification.&nbsp;

The proposal joins an expanding pipeline of approved and proposed buildings within Moonee Valley Park, including the recently launched Eveline apartments and the approved Grandstand North and South towers.

Hamton has increasingly focused on precinct-scale, nature-led communities across Melbourne’s middle-ring suburbs, with projects spanning Hawthorn, Kew, and Moonee Ponds.

Hampton unveils Trackside Gardens, latest stage of $3 billion Moonee Valley Park masterplan

The Paul Gedoun-led <a href="https://www.apartments.com.au/developers/ss-projects">S&amp;S Group</a> has achieved another milestone in its $1 billion transformation of Rainbow Bay on the southern Gold Coast with the completion of the company’s third project in four years, the $160 million <a href="https://www.apartments.com.au/buildings/esprit-217-227-boundary-street-coolangatta-qld-4225">Esprit</a> residences.

Delivered by <a href="https://www.apartments.com.au/builders/hutchinson-builders">Hutchinson Builders</a> and designed by <a href="https://www.apartments.com.au/architects/cottee-parker-architects">Cottee Parker Architects</a>, Esprit buyers have now moved into the 94 apartments across two interconnected buildings at 217-227 Boundary Street.

The successful settlement of Esprit marks another astounding chapter in the S&amp;S story, which launched its highly successful Flow apartments three years ago and created its own ultra-luxury branded fingerprint on an area craving new luxury residences.

Most early purchasers have secured gains of well over $1 million since the project launched in 2021.&nbsp;

[smartcode_project:default project_id=102921 project_image_fid=172129]

S&amp;S Projects Founding Director Paul Gedoun said the completion of Esprit reflects sustained demand for premium apartments in tightly held coastal locations.&nbsp; 
&nbsp;&nbsp; &nbsp; 
“Esprit has attracted buyers seeking a combination of quality design, considered amenity and a location that is becoming increasingly difficult to replicate,” said Gedoun.

“We identified some years ago that Rainbow Bay is a unique market where supply of luxury residences is limited, and we see the settlements in Esprit further underpinning this thinking - that for both owner-occupiers and investors.”&nbsp;

[smartcode_project:default project_id=102921 project_image_fid=172174]

A key feature of the development is ‘Club Esprit’, a 1,000sqm residents-only rooftop level combining wellness and recreation, believed to be a first for the Gold Coast, and which is fast becoming a signature of the S&amp;S brand.

Positioned to capture views across Snapper Rocks, Rainbow Bay and the Tweed River, the rooftop includes a 25-metre lap pool, gym, yoga lawn, sauna and steam facilities, ice bath, private dining spaces, outdoor cinema and landscaped areas for residents.&nbsp;

<a href="https://www.apartments.com.au/project-marketer/pezet-matheson">Pezet Matheson</a> Director Jayde Pezet, who led the sales campaign for Esprit and S&amp;S’s Flow and Awaken apartments, said the project’s performance reflects both the strength of the product and the depth of demand for premium apartments on the southern Gold Coast.&nbsp;

“In some cases, we’ve seen values double since launch, which is a clear reflection of how tightly held Rainbow Bay has become and the level of demand for well-executed projects in this market,” said Pezet.&nbsp;

“Buyers recognised early what S&amp;S Projects was delivering here, and that conviction has been rewarded as the project has progressed towards completion.”&nbsp;

[smartcode_project:default project_id=102921 project_image_fid=214819]

Esprit offers a mix of two- three and four-bedroom apartments and sits within walking distance of the beachfront, cafés and local amenities, reinforcing its appeal as both a lifestyle and investment destination.

The project is the third completed by S&amp;S Projects in Rainbow Bay, following Flow Residences and Awaken Residences, which together have contributed to the suburb’s emergence as one of the Gold Coast’s most sought-after coastal pockets. &nbsp;

S&amp;S Projects is continuing its investment in the area with Radia, a $215 million development currently under construction.&nbsp;

[smartcode_project:default project_id=102921 project_image_fid=172175]

Gedoun said the completion of Esprit signals continued confidence in the southern Gold Coast market.&nbsp;

“We’ve seen strong interest in well-located, high-quality apartments, particularly in areas where future development opportunities are limited."

“That’s been a key factor in the performance of Esprit and the broader Rainbow Bay market”.

[smartcode_project_cta:default project_id=102921]

Owners move in as Esprit completes at Rainbow Bay

Few developers can boast a portfolio across South East Queensland's luxury markets quite like <a href="https://www.apartments.com.au/developers/mosaic-property-group">Mosaic Property Group</a>.

The builder-developer, founded in 2004 by Managing Director Brook Monahan, has projects in planning, on the market, and under construction, from Burleigh Heads and Broadbeach to Kangaroo Point and South Brisbane.

With a pipeline exceeding $2 billion, Mosaic remains highly selective when it comes to development sites, having spent years refining its strategy around feasibility research and product planning. The group is set to continue growing into 2026 and beyond.

In Brisbane, Mosaic currently has three projects in the market. It is in the final release stage at <a href="https://www.apartments.com.au/new-apartments/the-bedford-by-mosaic-16-30-prospect-street-kangaroo-point-qld-4169">The Bedford</a> in Kangaroo Point, which is approaching complete sellout ahead of its late 2027 completion.

[smartcode_project:default project_id=134792 project_image_fid=328123]

Designed in collaboration with <a href="https://www.apartments.com.au/architects/bda-architecture">BDA Architecture</a>, The Bedford comprises 128 two- and three-bedroom residences. A selection of ultra-luxury Masterpiece Series Skyhomes, positioned across the top levels, offer expansive floor plans and sweeping views of the river and city.

High-end inclusions, such as natural stone benchtops, bespoke cabinetry, and Miele appliances, feature throughout all apartments, alongside the Rooftop Recreation &amp; Retreat Sky Terrace. This includes a resort-style pool with sun deck and loungers, spa, cold plunge pool, sauna, steam room, private dining room with a full kitchen, residents' lounge, multiple barbeque and relaxation zones, an outdoor viewing deck, and landscaped gardens with water features, all oriented to sweeping city and river views.

A gym with indoor and outdoor zones, and a golf simulator, further enhances recreational choice within the building.

[smartcode_project:default project_id=134792 project_image_fid=328119]

A defining feature of the development is its integrated mixed-use component, which will deliver Kangaroo Point's first major supermarket, alongside a café and liquor store, bringing long-awaited convenience to the peninsula.

Monahan says The Bedford represents the culmination of a near-decade-long journey, after first identifying the A-grade Prospect Street site in 2016. While they came close to acquiring it at the time, the site was ultimately purchased by Woolworths' development arm, Fabcot. The opportunity resurfaced in 2024 when the site, vacant for nearly three decades, was brought back to market.

Monahan says Mosaic projects often begin years before any formal plans are drawn. Their new South Brisbane development is no exception, with the site first earmarked in 2018.

"We aren't opportunistic," Monahan says. "Every site purchase is carefully considered. As seen with Kangaroo Point and South Brisbane, it can take years to eventuate. There are sites we're looking at now that we may not secure for several years."

[smartcode_project:default project_id=141711 project_image_fid=353495]

A similar story unfolded at <a href="https://www.apartments.com.au/new-apartments/the-carter-by-mosaic-77-linton-street-kangaroo-point-qld-4169">The Carter</a> in Kangaroo Point, opposite The Gabba. Like The Bedford, it is also approaching sellout of its 125 two- and three-bedroom apartments. The majority of sales are attributed to returning customers and referrals, with a balanced mix of investors and a strong majority of owner-occupiers.

BDA Architecture was again engaged to design the 22-storey building, which will feature a suite of wellness and lifestyle amenities, including a golf simulator and cinema, a commercial-grade gym, and a rooftop recreation level with a pool, steam room, sauna, cold plunge, teppanyaki bar, private dining spaces, and landscaped terraces.

Construction is on track for completion in mid-2027.

[smartcode_project:default project_id=151614 project_image_fid=362759]

Mosaic's latest offering is its most ambitious yet, boasting a rare, north-facing riverfront position on Montague Road in South Brisbane.

<a href="https://www.apartments.com.au/new-apartments/the-riversdale-by-mosaic-south-brisbane-91-montague-road-south-brisbane-qld-4101">The Riversdale by Mosaic</a> is a 39-storey tower comprising just over 200 residences and Masterpiece Series Sky Homes. Designed in partnership with Bureau Proberts, it will feature nearly 3,000 sqm of genuine, internationally benchmarked six-star, hotel-style amenities, including a wellness precinct, pool, gym, massage and treatment rooms, cinema, golf simulator, and extensive outdoor dining areas across a two-level rooftop deck.

Early works are underway, with full construction expected to commence in the second half of 2026, and an anticipated late 2029 completion.

[smartcode_project:default project_id=151614 project_image_fid=362759]

Since 2012 alone, Mosaic has completed more than $2 billion in projects and is set to deliver another $2 billion worth of developments, comprising hundreds of luxury apartments, each defined by Mosaic's signature standards of quality, detail, and delivery.

"We never arrive, there is no finish line," says Monahan. "Our ambition is to keep evolving what luxury means, creating design- and lifestyle-led residences in incredible locations, places people genuinely aspire to and want to live, homes that are loved deeply and endure long beyond their moment."

Mosaic's Midas Touch

<a href="https://www.apartments.com.au/developers/urban-property-group">Urban Property Group</a> (Urban) has broken ground at Keira Place, its new major mixed-use residential precinct in the heart of Wollongong CBD.

Held at 120-122 Smith Street, the groundbreaking marked the commencement of construction on Stage 1 of <a href="https://www.apartments.com.au/new-apartments/keira-place-120-122-smith-street-wollongong-nsw-2500">Keira Place</a>, with the opening of the new display suite. 
&nbsp; 
Keira Place is a State Significant Development that will deliver new housing supply, affordable homes and inclusive living options within walking distance of Wollongong’s CBD, coastline, transport, hospital and education precincts.

[smartcode_project:default project_id=144442 project_image_fid=369868] 
&nbsp; 
Stage 1 is now under construction and will deliver 150 apartments across two residential buildings, including 27 affordable housing apartments and 18 specialist disability accommodation dwellings, along with activated ground-floor retail and commercial space. 
&nbsp; 
Urban Co-CEO Patrick Elias said the groundbreaking represented a significant milestone for Wollongong and reflected Urban’s long-term commitment to regional cities.

“Today’s groundbreaking is about turning approvals into homes and moving quickly to deliver much-needed housing in Wollongong’s city centre,” Elias said. 
&nbsp; 
“Keira Place will provide a diverse mix of homes close to jobs, transport and services, while setting a high benchmark for quality, durability and consumer protection.”

[smartcode_project:default project_id=144442 project_image_fid=369869] 
&nbsp; 
Hon. Paul Scully MP, Minister for Planning and Public Spaces, Member for Wollongong said Keira Place is exactly the kind of development Wollongong needs – delivering new homes close to transport, employment and services, while supporting the continued growth and renewal of the CBD.

"This project reflects the Minns Labor Government's commitment to increasing housing supply in well-located areas." 
&nbsp; 
Wollongong Lord Mayor Cr Tania Brown said Keira Place would deliver lasting community benefits for the city. 
&nbsp; 
"Keira Place is a welcome addition to Wollongong's CBD delivering new housing, affordable homes and activated street-level spaces that will benefit our community for years to come," Brown said. 
&nbsp; 
"Urban Property Group's investment reflects the confidence that quality developers have in Wollongong's future, and I look forward to seeing this precinct come to life."

[smartcode_project:default project_id=144442 project_image_fid=369867] 
&nbsp; 
Designed by <a href="https://www.apartments.com.au/architects/cox-architecture">Cox Architecture</a>, with interiors by <a href="https://www.apartments.com.au/interior-designers/dko">DKO,</a> Keira Place prioritises liveability and long-term performance, with landscaped shared spaces, generous apartment layouts and a pedestrian-friendly streetscape along Smith Street. 
&nbsp; 
Residents will have access to landscaped podium areas, communal rooftop amenities with views to Mount Keira and the Wollongong skyline, and convenient ground-level retail.

The development will have 10-year Latent Defects Insurance by Resilience Insurance.

[smartcode_project_cta:default project_id=144442]

Groundbreaking marks start of construction at Keira Place in Wollongong CBD

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>
December 2016 saw capital city dwelling values rise by 1.4%, taking the annual capital gain for 2016 to 10.9%; the highest growth rate for a calendar year since 2009.
Factoring in gross rental yields and capital gains, housing as an asset class, earned a total annual return of 14.7% based on the combined capital cities index results.
Across Australia’s capital cities, the annual change in dwelling values for 2016 ranged from -4.3% in Perth to 15.5% in Sydney, with Melbourne and Hobart also showing annual capital gains higher than 10%.
Capital city growth rates have also shown a growing divergence between the broad housing product types.
Over the past twelve months we have seen capital city house values rise by 11.6%, while unit values have increased by roughly half the pace at 5.9%.
The divergence in growth rates is the most distinct in Melbourne and Brisbane, where concerns around unit oversupply have eroded buyer confidence.
Melbourne house values are up 15.1% over the year compared with a 1.7% rise in unit values, while Brisbane house values are 4.0% higher over the year, with unit values falling by -0.2%.
Australia’s regional housing markets generally did not experience the same growth conditions as the capital cities, with annual growth to November recorded at 2.8% across the combined regional markets. Regional New South Wales showed the strongest growth conditions, with non-capital city house values rising 7.3% over the 12 month period to November 2016.
The remaining rest-of-state regions showed relatively sedate conditions, with values rising by half a per cent across regional Victoria, 1% across regional Queensland and 1.1% across regional South Australia. Regional Western Australia recorded a 7% fall in house values over the year. Those regional areas with intrinsic ties to the mining and resources sector have continued to record weaker housing market conditions since the end of the mining infrastructure boom, with Perth and Darwin recording the weakest housing market conditions across the capital cities.
Since values peaked in these markets during 2014, values have fallen by a cumulative 7.9% in Perth and 5.9% in Darwin.
More recently both these markets have shown signs of moving through the low point of their respective downturns, with values rising by 2.8% and 5.9% respectively over the final quarter of 2016.
Based on the annual housing market results, it is clear that housing markets across Australia have responded to regional differences in economic and demographic trends; strong population growth and economic activity have driven value growth in Sydney and Melbourne, however, more recently strong growth trends have spread to Hobart and Canberra, as well as many of the coastal and lifestyle markets where values are now also rising swiftly.
Post Global Financial Crisis, the CoreLogic index results show that Sydney’s dwelling values have almost doubled, rising by 97.5% since January 2009, whilst Melbourne dwelling values have increased by 83.5% over the same time frame.
Every other capital city has seen dwelling values rise at substantially lower rates over this period, highlighting just how strong the Sydney and Melbourne housing market conditions have been over the past eight years.
Sydney-siders saw dwelling values increase by approximately $10,000 per month over the past year, creating a significant boost in wealth for home owners; at the same time we’ve seen mounting affordability challenges for aspiring home owners.
The recent CoreLogic Housing Affordability Report shows Sydney dwelling prices were 8.3 times higher than annual household incomes and households were dedicating an average of 44.5% of their income to service a mortgage (based on an 80% loan to valuation ratio and the average discounted variable mortgage rate).
Tim Lawless heads up the CoreLogic RP Data research and analytics team, analysing real estate markets, demographics and economic trends across Australia.
</body></html>

tlawless-5VLUrbAk9s

2016 dwelling value growth rates divergent even within the same capital city: Corelogic's Tim Lawless

<html><body>
<div>A couple of things happened in 2016 that changed the outlook for interest rates in Australia. </div>
<div> </div>
<div>Swaps had been seeking out lower and lower rates, yet fairly abruptly around September time someone or something called time on that particular party.</div>
<div> </div>
<div>Well, what happened?</div>
<div> </div>
<div>It wasn't that the economy suddenly became stronger. Hardly! </div>
<div> </div>
<div>In fact, GDP growth was actually negative for the third quarter of the calendar year, while employment growth went backwards in the months of both August and September too.</div>
<div> </div>
<div>And all measures of inflation are actually below the target 2 to 3 per cent range. Then, what? </div>
<div> </div>
<div>Change of Governor</div>
<div> </div>
<div>While we should be wary of imposing simplistic narratives over historical trends (with hindsight giving the supposed benefit of 20/20 vision), it appears that the change in Reserve Bank Governor may have been a factor.</div>
<div> </div>
<div>During the month of September, Philip Lowe began suggested that interest rate cuts are losing their power, and seemed to infer that further cuts would only be delivered reluctantly, if at all.</div>
<div> </div>
<div>From the first meeting he chaired in the first week of October, the <a href="https://rba.gov.au/media-releases/2016/mr-16-26" target="_blank">wording</a> of the Monetary Policy Statement concluded that policy was consistent with growth and inflation returning to target over time. </div>
<div> </div>
<div>Since the day of that October meeting, 6-month OIS rates have trended only in an hawkish direction, from 1.42 per cent back up to 1.50 per cent.</div>
<div> </div>
<div><a href="https://www.propertyobserver.com.au/images/2017/01/03/RBA1.jpg" target="_blank">Click to enlarge</a></div>
<div> </div>
<div>
<div><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/01/03/RBA1.jpg" alt=""></div>
</div>
 
The Reserve Bank of Australia now has a duty to "keep consumer price inflation in the economy to 2 to 3 per cent, on average, over the medium term", apparently implying no immediate need to cut rates.
<div> </div>
<div>Trump bump</div>
<div> </div>
<div>The other significant event in 2016 was Donald Trump's election victory in the US, which promptly changed the inflation outlook.</div>
<div> </div>
<div>Australia's bond yields had already starting ticking back up before Trump's election triumph, with the yield on government bonds with a 10-year maturity recovering from a low of just 1.83 per cent in August to 2.31 per cent.</div>
<div> </div>
<div>But then, after an initial post-election blip, the 10-year bond yield increased sharply to 2.87 per cent, before settling down a bit to finish the year at 2.78 per cent.</div>
<div> </div>
<div><a href="https://www.propertyobserver.com.au/images/2017/01/03/RBA5.jpg" target="_blank">Click to enlarge</a></div>
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/01/03/RBA5.jpg" alt="">
<div> </div>
<div>Easy, tiger!</div>
<div> </div>
<div>Through November the indicative standard variable rate (SVR) for owner-occupier mortgages was 5.25 per cent, although of course by shopping around you can get much better deals than this (the indicative discounted rate was reported at 4.50 per cent, for example). </div>
<div> </div>
<div>The reported 3-year fixed rates for both owner-occupiers and investors were lower again at 4.10 per cent and 4.25 per cent respectively. </div>
</body></html>

pwargent-M4siyDbqQY

Can you comfortably afford to repay a mortgage in a 6% or even 7% scenario?: Pete Wargent

<html><body>
GUEST OBSERVATION
A lot has been made about a first home buyer 'strike' over recent years, but the NAB survey and others have shown that often young people are choosing investment property as their first step onto the ladder. 
As such, the share of the market comprising first time buyers hasn't really changed all that much.
Mentioned far more rarely (or more like never) is that with most people doing things later in life than used to be the case, relatively speaking there just haven't been that many people in the key age bracket to buy their first home either.
This is especially so given that the average first timer is likely to be in their 30s these days, at least in the main capital cities.
This trough in Australia's demographic waves might have been one of the more convincing parts of the bear case for the housing markets in recent years, but in the end policy makers opted to sidestep the potential wipeout by cutting interest rates to record lows.
It largely worked by drawing more investors into the froth rather than through pulling forward demand.
In surfing terminology, we've been in a demographic trough for a long period, but it seems that the swell is now beginning to build.
 The next wave
It's probably not for a few years yet that the number of persons in the 31 to 40 age bracket reaches a critical mass that might be considered compelling.
Yet the demographic statistics figures for the quarter ended June 2016 showed that finally things are beginning to move in that direction, with a significant 2% leap in this cohort during the financial year. 
Between now and 2026 the number of persons in this age bracket is <a href="https://petewargent.blogspot.co.uk/2015/08/making-waves-in-aussie-housing-market" target="_blank">projected to swell dramatically</a>.
Looked at graphically, you can see the trough in the 31 to 40 age bracket becoming emphatic over the last decade. However, the red line shows that the housing market is just beginning reaping the benefits of the ramped up immigration programme (which is tilted heavily towards immigrants aged under 30). 
<img src="https://4.bp.blogspot.com/-bG2S6vRWaqw/WGKN-skn54I/AAAAAAAAg9U/LyJnpIggbCQXm_zF8onwT6DyBNxw2KShACLcB/s640/B1.jpg">
Looked at another way, after mostly treading water for years the number of 31 to 40 year old residents jumped by more than 118,000 in the last 24 months, with hundreds of thousands more to come in a demographic wave between now and 2026.
<img src="https://2.bp.blogspot.com/-PAd8lrtsER0/WGKN9ApG3OI/AAAAAAAAg9Q/3OLVLyzixG83SULWl4fj47n9dxivwpD0wCLcB/s640/B2.jpg">
This is important because although individual choices differ and trends shift over time, in aggregate people tend to do quite predictable things at fairly predictable stages in their lives. 
Variations around the traps 
The bureau's figures showed that although Australia's population is expected to age in a similar way to other developed nations due to a combination of longer life expectancy and lower fertility rates, the immigration programme helped to keep the median age steady at 37 years over the 2016 financial year.
What is clear from analysing the figures, however, is that the states and cities with stronger economies and employment prospects generally have more a favourable demographic outlook than those with rising or elevated unemployment rates.
For example, Tasmania's median age has spiked sharply from 35 to 42 years over the last two decades, as younger adults have chosen the path of interstate migration to the mainland in search of gainful employment.
And while some states saw solid growth in their working age population in 2016, including New South Wales (+1.0%) and Victoria (+1.7%), both Tasmania and the Northern Territory saw their working age populations decline.
The wrap
The picture is quite mixed around the states and cities, but projections show that over the next decade there will be more than three quarters of a million extra persons in the 31 to 40 age bracket, a huge demographic wave to drive new entrants into the housing markets.
That's not to say other cohorts won't expand too - in fact, the total population is projected to expand by a record 4.4 million over the next decade to 28.5 million - but the number of potential new entrants may possibly be the most important driver of demand.
For some reason it's only just dawning on people how population growth will impact traffic congestion in the largest cities.
As a result of this the next big run on housing markets is likely to be towards certain inner suburban locations with transport links at the expense of outer suburbia where infrastructure and jobs are sparse. 
PETE WARGENT is the co-founder of <a href="https://allenwargent.com/" target="_blank" rel="nofollow">AllenWargent</a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank" rel="nofollow">blogger</a>. 
</body></html>

The huge demographic wave to drive new entrants into the housing market: Pete Wargent

<html><body>
The $300 million Australian Pub Fund run by John Singleton, Geoff Dixon and Mark Carnegie has sold three Sydney hotels.
The off-market sales totalled a combined $47 million.
The Feros family's JDA Hotels bought the Peakhurst Inn in Sydney's southern suburbs for $22.5 million in a deal negotiated by Andrew Jolliffe of Ray White Hotels.
The Bristol Arms on Sussex Street in Sydney and the Como Hotel in the Sutherland Shire were sold to the family-run Oscars Hotel Group for $19.5 million and $5.6 million respectively, in deals negotiated by JLL Hotels &amp; Hospitality Group's John Musca.
The prices offered for all three pubs were at cap rates below 8%, Geoff Dixon, the former CEO of Qantas told The Australian Financial Review.
APF will soon begin on-market campaigns to sell Newtown's Marlborough Hotel and Kinselas in Surry Hills, with expectations of about $60 million - more than double what they were acquired for by the fund.
Kinselas enjoys strong food and beverage patronage. It also has 30 gaming machines that contribute more than $3 million in annual revenue.
"Capital continues to find its way to the sector where a 400-500 basis point spread still exists between sustainable earnings and the cost of debt. This is an attractive proposition for not just experienced operators but increasingly syndicators as well," Musca said.
The Lone Pine Tavern in Rooty Hill was sold in December by the Feros family after being marketed with expectations above $30 million.
Also in December, Merivale boss Justin Hemmes paid $37.05 million for The Tennyson Hotel in Sydney's south.
<img src="https://www.urban.com.au/images/2016/12/02/Screen%20Shot%202016-12-02%20at%2011.54.15%20AM.png" alt="">
The Tennyson, whose design is illustrative of a Sidney Warden-designed inter-war functionalist structure, fetched a record hammer price for hotels. 
The Ray White Hotels Asia Pacific director Andrew Jolliffe listed the top 100 gaming property, The Tennyson Hotel at Mascot.
Set on Botany Rd, the Tennyson Hotel is a popular hotel with 30 gaming machines.
"Notwithstanding the latest ranking at 87 in NSW, the hotel requires an upgrade," Jolliffe advised. 
The leading hotel architect Paul Kelly has designed a renovation which has DA approval for the vendor John Feros of JDA Hotels.
<img src="https://www.urban.com.au/images/2016/12/02/Screen%20Shot%202016-12-02%20at%2011.53.59%20AM.png" alt="">
The hotel, even in its currently unrenovated state, attracts in excess of $8 million in annual receipts from predominantly high gross profit margin revenue centres.
</body></html>

jchancellor-FAypfDUnLy

Kinselas next hotel to be sold by Singo's Australian Pub Fund

<html><body>
GUEST OBSERVATION
Varying from state to state, another factor contributing to the high entry cost to housing is stamp duty, particularly in Australia’s largest two capital cities.
Levied by each state and territory and payable by the receiver when a property is transferred, stamp duty varies remarkably across the states and territories based on the price of the property, the type of buyer (owner occupier / first home buyer / investor) and the type of property. 
Calculating how much stamp duty is applicable on a property purchase can be confusing due to the significant differences regionally, but also due to the complexity of rules, concessions and limits that are applied to the calculation of stamp duty.
Based on the median dwelling value across each capital city, stamp duty estimates can range from a whopping $32,680 in Melbourne to a modest $9,000 in Brisbane.
Even though the median dwelling value is $200,000 higher in Sydney compared with Melbourne, the cost of stamp duty on the median valued home is actually slightly lower in Sydney, at $31,763, due to higher stamp duty rates in Victoria.
In some states, first-time home buyers can be offered substantial concessions on stamp duty; however there is generally an upper limit. 
For example, first home buyer property transactions in Victoria with a price tag of $600,000 or less will enjoy a 50% reduction on their rate of stamp duty. 
In Queensland, first home buyers purchasing a property priced less than $550,000 can realise a discount of more than $8,000.
Stamp duty rates can also be higher for investors.
Surprisingly, New South Wales, which is the state with the largest proportion of investors, does not charge a premium rate of stamp duty on this segment of the market.
The three largest states also charge a stamp duty premium on property purchasers by foreign buyers.
Because stamp duty costs are percentage based, as dwelling values move higher, stamp duty costs can rise disproportionately faster due to bracket creep. 
Over the past five years dwelling values in these two cities have increased by 62% and 38% respectively which implies at least a commensurate rise in stamp duty costs in these cities.
The high transactional costs associated with housing are likely to be one factor that is contributing to a slowdown in the number of sales across the country.
While stamp duty is generally the largest transactional cost associated with buying, there are other costs such as building and pest inspections, conveyancing, removalists and more that also need to be factored in and are likely to be dampening participation in the housing market. 
Add to this the fact that most lenders will be seeking a 20% deposit and the barriers to entry become even more substantial.
For state governments, stamp duty is one of the largest revenue sources. 
In the 2014-15 financial year, state and local government taxation revenue was recorded at $89.278 billion having increased by 7.0% over the year. 
The taxation revenue was comprised of $45.203 billion or 50.6% from property related taxes (mostly stamp duty and municipal rates). 
While total tax revenue increased 7.0% over the year, property tax revenue increased by 10.5% highlighting that property taxes are the largest source of taxation revenue for state and local governments and are rising at a rapid pace.
If transaction numbers across the housing market continue to trend lower, state governments are likely to encounter a budget hole as stamp duty revenue falls.  
For this and associated reasons, we may find state governments become more serious about considering a broader based land tax that is applicable to all property owners rather than a stamp duty that is payable only across the small percentage of properties that transact each year.
Tim Lawless heads up the CoreLogic RP Data research and analytics team, analysing real estate markets, demographics and economic trends across Australia.
</body></html>

Stamp duty a significant cost barrier for Sydney and Melbourne housing markets: Tim Lawless

<html><body>
ASX listed Tian An Australia Limited has purchased an Enfield townhouse site in Sydney's inner west.
The 4 Mitchell Street site comprises 12,600 square metre.
It currently houses an office building and warehouse.
CBRE’s Peter Vines, Victor Sheu and Nick Tuxworth sold the property on behalf of non-profit organization, Vision Australia, for $35 million.
It attracted 26 expressions of interest from local, national and overseas property developers.
“We were expecting around $28 million for the property but the result at $35 million further underpins the need for quality residential development sites, especially in markets with little competing stock,” Vines said.
Vision Australia will stay in the property until late 2017, allowing time to decide where to relocate.
</body></html>

j.ballantyne1990-6AQqhLzZaK

Vision Australia sells Enfield residential development site for $35 million

<html><body>
Cbus Property has now leased more than 40% of its $1.25 billion Collins Arch development at 447 Collins Street.
Its latest deal for almost 20,000 square metres including a third tenant for the mixed-use precinct.
Top 10 Australian law firm Gadens has secured 5,000 square metres of NLA commercial space over levels 11-13, equating to just over 10% of the 49,000 square metres available.
More than 40% of the leasing space is now committed, with Gadens joining King &amp; Wood Mallesons (KWM) and HWL Ebsworth.
KWM secured 8300 square metres across levels 23 to 27 in June, with HWL Ebsworth securing 6500 square metres across levels eight to 10 in October.
The commercial space lies in the western tower of Collins Arch.
The development will also house a five-star hotel in the eastern tower with a luxury residential component above crowned by two luxury penthouses and resident amenity linking the dual towers across Melbourne’s first sky bridge.
Taking up the entire city block between Collins Street, Williams Street, it has been designed by Woods Bagot and SHoP Architects.
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2016/12/20/Cbus%20Property_Collins%20Arch_view2.jpg" alt="">
Colliers national director of office leasing Andrew Beasley said the 447 Collins St address resonated internationally.
”The view south across Melbourne’s Yarra River and Port Phillip Bay and Collins Street-facing northern vista are just part of what makes Collins Arch a major drawcard,” Beasley said.
Construction has commenced on <a href="https://www.collinsarch.com" target="_blank">Collins Arch</a>, with completion due in 2019.
Expressions of interest are currently being accepted for both commercial leasing and the luxury residential apartments, including two sky bridge penthouses.
</body></html>

Collins Arch, Melbourne signs up third law firm office tenants

<html><body>
The Coles supermarket in the NSW Southern Highlands town of Moss Vale has been sold to MPG Funds Management for $9.45 million.
Located at 13-19 Kirkham Street, the property comprises a 2,500 square metre freestanding Coles supermarket – the only full line supermarket servicing the catchment.
The property, which is situated on a 7,199 square metre strata title site, is currently leased to Coles until 2025, generating an estimated income of $561,547 per annum.
CBRE’s Justin Dowers and Nick Willis, who negotiated the sale on behalf of a private Victorian investor, said the sale reflected one of the strongest freestanding supermarket transactions in New South Wales this year translating to a yield of 5.9%.
MPG Funds Management’s Brett Gorman said the property’s strong tenancy profile presented an attractive addition to the MPG Retail Brands Property Trust, which targets well-known tenants on long term leases.
The sale follows the recent transaction of Dan Murphy’s in Wagga Wagga through CBRE on a 5.3% yield to a private Sydney based investor.
</body></html>

Coles in Moss Vale sells for $9.45 million

<html><body>
GUEST OBSERVATION
Whether or not we end up in surplus in five years’ time, <a href="https://www.budget.gov.au/2016-17/content/myefo/html/" target="_blank">yesterday’s Mid Year Economic and Fiscal Outlook (MYEFO)</a> exposes nasty political problems for the Turnbull government in the here and now.
Real GDP growth for 2016-17 has been sensibly but shockingly revised down to 2% – the lowest outcome since the global financial crisis, the second lowest in 16 years and the third lowest since the long upswing began in 1991/92. Sensible, because we know, from the third-quarter GDP numbers and other indicators this year, that the upswing in residential investment has peaked before (and perhaps well before) an upswing in business investment has begun.
Shocking, because if labour productivity continues to run a little above 1% – as it has for the last four years – the implied growth in employment of 1% or so will probably not be enough to stop unemployment rising. The MYEFO projects the unemployment rate in the June quarter next year at 5.5% – lower than today and lower than the average of 5.8% over the last four years.
Yet, at 2.6% year average GDP, growth in those four years has been markedly stronger than the 2% MYEFO now projects for 2016-17. Even with the projected decline in the participation rate, the MYEFO unemployment forecast will be a struggle.
Disappointing GDP growth is political problem number one for Malcolm Turnbull and Treasurer Scott Morrison. Problem number two is the implacable persistence of substantial federal deficits.
These deficits limit the government’s response to problem number one. In 2012-2013 government receipts were 23.0% of GDP, payments 24.0% of GDP, and the deficit 1.2% of GDP. Labor lost office a little over nine weeks after the end of that fiscal year.
In these latest projections for the 2016-17 Budget, four years on from 2012-2013, receipts are expected to be 23.3% of GDP, payments 25.2% of GDP and the deficit 2.1% of GDP. Compared to 2012-13, receipts have increased 0.3% of GDP, spending 1.2% of GDP and the deficit 0.9% of GDP. Receipts are up, but spending is up even more and so is the deficit.
There are plenty of reasons for this woeful fiscal performance, mostly to do with modest increases in profits and wages and the tax-minimisation policy of former Treasurer Peter Costello. But these reasons are not ones that square with Treasurer Morrison’s rhetoric, or which can any longer be laid at the door of the previous Labor government.
Nor does the MYEFO give any confidence that the troubles of the Turnbull government will soon be eased. The path to the return to surplus depends completely on increasing tax revenue.
Spending as a share of GDP is now, according to these MYEFO projections, locked in at 25.2% of GDP right through to the end of the forward estimates period (and beyond the next election) in 2019-20. The projected decline of the deficit arises only because tax receipts are expected to increase over that period by 1.6% of GDP.
A slow economy, a rising tax take, perhaps rising unemployment, and not much room to move. 2017 won’t be cheerful for the prime minister or treasurer – or for the rest of us.
John Edwards<a href="https://theconversation.com/profiles/john-edwards-89846"></a> is nonresident fellow at the Lowy Institute for International Policy and Adjunct Professor with the John Curtin Institute of Public Policy at <a href="https://theconversation.com/institutions/curtin-university-873" target="_blank">Curtin University</a>
This article was originally published on <a href="https://theconversation.com" target="_blank">The Conversation</a>. Read the <a href="https://theconversation.com/there-are-two-big-political-problems-buried-in-the-latest-budget-update-70595" target="_blank">original article</a>.
</body></html>

The two big political problems buried in the latest budget update: John Edwards

<html><body>
GUEST OBSERVATION
The economic growth forecasts have undergone a number of revisions to reflect two major surprises since May, namely: conditions across the broader economy are weaker than anticipated; and commodity prices have spiked temporarily. The economic growth forecasts are optimistic in our view. Real GDP growth of 2.0% for 2016/17, downgraded from 2.50%, requires a quick return to solid growth, averaging 0.8% per quarter for the rest of the year. In addition, the medium-term economic projections err on the optimistic side. From 2018/19 to 2022/23 real GDP growth is assumed to be 3.0% each year, a little faster than potential, judged to be 2.75%. The thinking is that spare capacity is gradually absorbed, closing the output gap by the end of 2022/23. The terms of trade are projected to remain flat at around its 2005 level from 2019/20. Nominal GDP growth is assumed to be 5.50% over the long-run (described in a Treasury working paper in 2014 but not specifically mentioned in MYEFO). <a href="/images/2016/12/19/Screen%20Shot%202016-12-19%20at%204.40.36%20pm.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2016/12/19/Screen%20Shot%202016-12-19%20at%204.40.36%20pm.jpg" alt=""> 1) The real GDP growth profile for the four years 2016/17 to 2019/20 is: 2.0% (downgraded by 0.50%); 2.75% (downgraded by 0.25%); 3.0% and 3.0%. The Australian economy began the 2016/17 financial year on a weak note, with output contracting by 0.5%, the sharpest quarterly decline since the GFC. 2) Nominal GDP growth profile is: 5.75% (upgraded by 1.50%); 3.75% (downgraded by 1.25%); 4.25% (downgraded by 0.75%); and 4.50% (downgraded by 0.50%). Notably, the size of the nominal economy is 1.0% smaller at the end of 2019/20 than assumed at budget time. Inflation and incomes are softer than anticipated reflecting the weaker conditions across the broader economy. 3) The terms of trade jumps a forecast 14% in 2016/17 (upgraded from 1.25%) on the spike in commodity prices, followed by a 3.75% decline in 2017/18 (downgraded from 0%) as commodity prices retreat to more sustainable levels. There is considerable uncertainty around the timing / speed of commodity price adjustments. The iron ore price is assumed to decline from its recent average of US$68 per tonne FOB through the March and June quarters of 2017 to reach $55 in September 2017. The budget assumed a year average price of $55. The coking coal price is assumed to be US$200 per tonne FOB in line with the December quarter contract price, before declining through the September and December quarters of 2017 to $120 in March 2018. The Budget year average price was $91. Thermal coal prices are assumed to remain at $62 per tonne FOB, up from $52 at budget time. 4) Labour market forecasts have been downgraded to reflect the soft start to the 2016/17 year. Employment growth has been lowered by 0.5% this year and 0.25% next year, while wages growth has been lowered by 0.25% this year and next. See table 2 below for details. <a href="/images/2016/12/19/Screen%20Shot%202016-12-19%20at%204.40.47%20pm.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2016/12/19/Screen%20Shot%202016-12-19%20at%204.40.47%20pm.jpg" alt=""> The 2016/17 budget deficit forecast is effectively unchanged from that in May, while the cumulative deficit for the four years to 2019/20 has deteriorated by $10.3 billion (with net savings of $2.5 billion partially offsetting $12.8 billion in slippage due to the weaker forecasts). The medium-term projections have the budget returning to surplus in 2020/21, as assumed in May, although the size of the surplus has been trimmed from 0.2% of GDP to 0.1% of GDP. Policy decisions had little net impact on the budget position, with a net saving of $2.5 billion, back-loaded over the two out years. Revisions to the economic growth forecasts (including parameter variations more generally) cost the budget $12.8 billion over the four years, including a saving of $0.5 billion in the current year. Receipts are $30.5 billion lower than at Budget time over the four years, partially offset by a $16.5 billion undershoot on payments. Critically, as noted above, the size of the nominal economy at end 2019/20 is 1.0% smaller than assumed at Budget time. Of the $30.5 billion hit to receipts over the four years, key impacts include: individual income tax collections, down $18.3 billion due to weaker wage and employment outlook; company tax down $5.9 billion with weaker non-mining corporate profits only partially offset by higher mining profits from stronger commodity prices over 2016/17; and lower GST collections, down $5.3 billion.
On the payment side, weaker wages growth and lower inflation help to contain expenditure growth. <a href="/images/2016/12/19/Screen%20Shot%202016-12-19%20at%204.40.58%20pm.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2016/12/19/Screen%20Shot%202016-12-19%20at%204.40.58%20pm.jpg" alt="">
Bill Evans is chief economist with Westpac.
Andrew Hanlan is senior economist with Westpac.
</body></html>

Latest Investing Insights

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

Editor's Picks

Developments

New apartments

New townhouses

News

Latest Investing Insights

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

Editor's Picks

Receive the latest news stories to your inbox

Developments

New apartments

New townhouses

News