<p>A luxury beachfront apartment at Rainbow Bay has more than doubled in value since it sold off the plan six years ago, setting a new local apartment record in the process.</p>

<p>The three-bedroom apartment in the Flow development on Petrie Street, the first of four new projects locally by Paul Gedoun's S&amp;S Projects, has sold for $7.4 million, after originally selling for $3.27 million when the project launched in 2020.</p>

<p>The seventh-floor apartment, comprising 187 sqm of internal living space and a 54 sqm balcony overlooking Froggies Beach and Snapper Rocks, was purchased by a local family.</p>

<p>The transaction was negotiated by Pezet Matheson director Kerry Pezet and equates to more than $30,000 per sqm.</p>

<p>Pezet said the sale reflected the limited opportunities to buy into the boutique beachfront development.</p>

<p>"The sale highlights the rarity of opportunities within the boutique beachfront development, where residences seldom become available," Pezet said.</p>

<p>"Flow is one of the Gold Coast's most tightly held buildings. Buyers from our database move quickly when residences become available, and achieving an off-market sale at $7.4 million demonstrates the depth of demand for property of this calibre."</p>

<p><img alt="Flow" data-entity-type="file" data-entity-uuid="c585b206-2130-4eee-a50c-3f27c51a7c70" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-07-06%20at%208.33.25%E2%80%AFPM.png?VersionId=m3pHRDV62Y3fvN.XQuQHq.52ilTWpRLf" /></p>

<p>Flow was the first of four luxury apartment developments delivered by Paul Gedoun's S&amp;S Projects at Rainbow Bay and was completed in 2023.</p>

<p>Positioned on the beachfront overlooking Snapper Rocks, the residence includes three bedrooms, three bathrooms, a powder room and views stretching north along the coastline towards Surfers Paradise.</p>

<p>Pezet Matheson Residential principal Mitchell Lambert said buyers continued to prioritise quality beachfront apartments in tightly held locations.</p>

<p>"Flow Residences offers a rare combination of elevated beachfront positioning, architectural excellence, comprehensive resident amenity and premium finishes, which is exactly what discerning purchasers are seeking," Lambert said.</p>

<p>"The transaction further reinforces Rainbow Bay's reputation as one of Australia's premier coastal lifestyle destinations, where limited supply and growing demand continue to support strong market performance."</p>

<p>Pezet Matheson originally marketed and sold out Flow off the plan, making the latest transaction a return to one of the project's original buyers.</p>

<p>Paul Gedoun is selling his third project, <a href="https://www.apartments.com.au/new-apartments/radia-rainbow-bay-271-boundary-street-coolangatta-qld-4225">Radia Rainbow Bay</a>, after recently completing, and selling out, <a href="https://www.apartments.com.au/buildings/esprit-217-227-boundary-street-coolangatta-qld-4225">Esprit</a>. He has plans for a <a href="https://www.apartments.com.au/news/qld/first-look-s-s-projects-proposes-88-apartment-wellness-tower-at-coolangattas-boundary-street">fourth building</a>, 88 apartments on <a href="https://www.apartments.com.au/new-apartments/209-213-boundary-street-coolangatta-qld-4225">Boundary Street</a>.</p>


Joel Robinson

Rainbow Bay apartment doubles in price since off the plan sale during pandemic

<p data-end="315" data-start="85">The long-planned transformation of Brisbane's historic Shafston Estate has taken another major step, with Capella Hotel Group announced as the luxury hospitality partner behind what will become Brisbane's first branded residences.</p>

<p data-end="499" data-start="317">The project, to be known as <strong data-end="376" data-start="345">Capella Residences Brisbane</strong>, is being delivered by Verso Projects at the landmark Kangaroo Point riverfront estate, with completion targeted for 2029.</p>

<p data-end="899" data-start="501">The announcement follows a series of planning changes to the project over recent years. The site was originally approved in 2023 for a 15-level, 37-apartment development designed by Rothelowman for Burgundy Group before Verso Projects took over the 10,070 sqm riverfront holding and lodged revised plans with Kerry Hill Architects to increase the development to a 25-level tower with 51 apartments.</p>

<p data-end="1154" data-start="901">The latest announcement confirms Capella Hotel Group will bring its branded residential offering to the project, marking just the second Capella Residences development globally after Seoul, and the group's first branded residential project in Australia.</p>

<p data-end="1387" data-start="1156">The <a href="https://www.apartments.com.au/new-apartments/23-castlebar-street-kangaroo-point-qld-4169">Castlebar Street development</a> will centre around the restoration of the heritage-listed Shafston House, one of Brisbane's oldest residences, originally constructed in 1851 by Reverend Robert Creyke as a single-storey cottage known as Ravenscott.</p>

<p data-end="1387" data-start="1156"><img alt="Capella" data-entity-type="file" data-entity-uuid="2b9f4ce5-638f-4d6b-8082-3ca7e4b75fca" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-07-09%20at%207.20.41%E2%80%AFAM.png?VersionId=f7aeqsW_DzOJI4FymWb3lD8NptSfsP7q" /></p>

<p data-end="1611" data-start="1389">Capella said the project aligns with its focus on heritage-led developments, with the Brisbane estate combining the restored historic residence with a new luxury apartment tower and hospitality-inspired resident amenities.</p>

<p data-end="1823" data-start="1613">Residents will have access to the Capella Living Room, a concierge-led communal space inspired by the group's luxury hotels, alongside landscaped gardens, six swimming pools, wellness and recreation facilities.</p>

<p data-end="2042" data-start="1825">The broader estate will also include two riverfront homes, a six-berth private marina, porte cochère arrival experience, secure basement parking and a new section of public riverwalk along the Brisbane River frontage.</p>

<p data-end="2177" data-start="2044">The heritage Postal Depot Building will also be retained and repurposed as a guest house, in line with the revised development plans.</p>

<p data-end="2420" data-start="2179">The project represents another evolution for the site, which Kerry Hill Architects previously described as a rare opportunity to restore one of Brisbane's most significant heritage estates while creating a new benchmark for apartment living.</p>

<p data-end="2724" data-start="2422">"The Shafston Estate provides a once-in-a-generation opportunity to restore one of Brisbane's finest heritage precincts and to reinstate residential use as a unique site perched on the edge of Kangaroo Point," Kerry Hill Architects said in its Urban Context Report accompanying the planning submission.</p>

<p data-end="2858" data-start="2726">"The project will celebrate excellence in sub-tropical residential design, setting a new benchmark for vertical living in Brisbane."</p>

<p data-end="3130" data-start="2860">Verso Projects, which now has an $8.5 billion development pipeline spanning more than 6,000 dwellings across apartments, townhouses, retail and commercial projects, said the partnership with Capella would elevate the development beyond a traditional residential project.</p>

<p data-end="3415" data-start="3132">"We feel honoured to be restoring Shafston Estate to its former glory, elevating it to new heights of luxury and excellence underpinned by Capella's distinctive service ethos and design philosophy, and making it a standout landmark in Brisbane," Verso Projects CEO Steve Laffey said.</p>

<p data-end="3658" data-start="3417">"By partnering with Capella, globally recognised for its refined approach to luxury hospitality and deep respect for cultural and historical context, we will elevate this project beyond a residential offering into a world-class destination."</p>

<p data-end="3820" data-start="3660">Capella Hotel Group President Roland Fasel said Brisbane's emergence as a global city made it the right location for the company's Australian residential debut.</p>

<p data-end="3961" data-start="3822">"Brisbane is a city on the cusp of something remarkable, and Capella Residences is our commitment to being part of that story," Fasel said.</p>

<p data-end="4083" data-start="3963">"The Capella residential experience is more than luxury. It is about a sense of belonging to a place with deep meaning."</p>

<p data-end="4227" data-start="4085">Private appointments have now opened for the project, with a display suite expected to open in late 2026 ahead of the planned 2029 completion.</p>


Capella to launch Brisbane's first branded residences at Shafston House, Kangaroo Point

<p>Lewis Land's latest apartment release within its <a href="https://www.apartments.com.au/new-apartments/harbour-shores-biggera-waters-564-oxley-drive-biggera-waters-qld-4216">Harbour Shores</a> masterplan is targeting one of the Gold Coast's fastest-growing buyer groups, with almost a third of apartments at Solis priced below $1 million.</p>

<p>The seven-storey building at Biggera Waters will comprise 91 apartments, including 24 one-bedroom residences starting from $778,000, a price point Lewis Land says is aimed squarely at first home buyers struggling to enter the Gold Coast market.</p>

<p><img alt="Harbour Shires" data-entity-type="file" data-entity-uuid="e7486e37-22f6-4c92-b212-9b0622070b8f" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-07-08%20at%209.09.34%E2%80%AFAM.png?VersionId=W8MJwJUCf6HkIyl_EVSksnd.QI6MZryY" /></p>

<p><a href="https://www.apartments.com.au/developers/lewis-land-group">Lewis Land</a> Head of Development Michael Long said the developer deliberately allocated a significant proportion of the project to more affordable apartment types.</p>

<p>"First home buyers have been priced out of many parts of the Gold Coast, and we saw a clear opportunity to address this and play our part in a longer-term housing solution," Long said.</p>

<p>"That's why 24 of the 91 apartments being delivered at Solis have been designed and priced for the city's next generation of homeowners, quality one-bedroom apartments, half of which include an additional multipurpose room to maximise space and flexibility.</p>

<p>"This approach places 30 per cent of apartments in Solis under $1 million, and with close proximity to Harbour Town's future light rail extension connecting residents to the city's major employment and knowledge hubs, it's a win for buyers looking to secure their first property."</p>

<p><img alt="Sores" data-entity-type="file" data-entity-uuid="550526d3-73ba-4710-9739-c5f4294a30ef" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-07-08%20at%209.09.29%E2%80%AFAM.png?VersionId=cQQdXHt9wS0UXwZEm5Py5bH_3kAmzyhu" /></p>

<p>Designed by BDA Architecture, Solis will deliver a mix of one, two and three-bedroom apartments, with residences ranging up to 232 sqm. Apartments feature generous balconies and contemporary finishes, while residents will have access to Harbour Shores' lagoon pool, clubhouse, tennis court, gym, yoga studio and sauna.</p>

<p>The focus on first home buyers resonated with purchaser Holly Humphreys, who said she and her boyfriend spent more than a year searching for their first property before shifting their attention from houses to apartments.</p>

<p>"We fell in love with the first house we bid on and got our hopes up, but after repeated knockbacks we learned not to get too attached," Humphreys said.</p>

<p>"We offered at the high end of price guides, but sales kept going even higher. That's where we really struggled and we needed to re-evaluate our budget and our expectations. Standalone houses were off the table, and we pivoted to apartments and townhouses."</p>

<p>Humphreys said it was encouraging to see developers recognising the growing demand from first home buyers.</p>

<p>"There's a growing number of young buyers looking to enter the market earlier because they understand that getting in now can make a real difference as prices continue to rise," she said.</p>

<p>"It's fantastic to see a developer recognise this and then actively take measures to deliver an apartment with us in mind."</p>

<p>Solis is the first development planned within the second stage of the Harbour Shores masterplan, with early works expected to commence in September 2026.</p>

<p>[smartcode_project_cta:default project_id=113271]</p>


Lewis Land targets first home buyers at latest Harbour Shores release, Solis

<p>Luxury apartment developer Abadeen has recorded $19.25 million in apartment sales across two of its Lower North Shore developments in the lead-up to the end of the financial year, headlined by the sale of a $6.75 million penthouse at <a href="https://www.apartments.com.au/buildings/koyo-crows-nest-5-rodborough-avenue-crows-nest-nsw-2065">KOYO in Crows Nest.</a></p>

<p>The transactions also included the sale of a newly completed three-bedroom apartment at <a href="https://www.apartments.com.au/buildings/park-residences-cremorne-2-sutherland-street-cremorne-nsw-2090">Park Residences in Cremorne</a> for $6.35 million, with the residence selling shortly after the project's first public inspections following completion.</p>

<p>The sales come as completed, owner-occupier-focused apartments continue to attract strong demand across Sydney's Lower North Shore, particularly from buyers looking for certainty and immediate occupancy.</p>

<p>The penthouse at KOYO spans 491 sqm across a single level and was designed by architect Koichi Takada. The development is one of Abadeen's flagship boutique projects in Crows Nest.</p>

<p>[smartcode_project:default project_id=108800 project_image_fid=370093]</p>

<p>Abadeen Executive Chairman and Founder Justin Brown said buyer activity lifted noticeably in the lead-up to the end of the financial year.</p>

<p>"We saw a clear increase in enquiry levels, inspection numbers and buyer engagement across our completed projects leading into the end of the financial year," Brown said.</p>

<p>"Buyers have become far more decisive over the past six months. The combination of improving confidence, limited supply and the ability to physically inspect completed residences is creating strong competition for premium apartments in the best locations."</p>

<p>Brown says the&nbsp;response to Park Residences following completion has been particularly strong.</p>

<p>"Buyers want certainty and are responding positively to the opportunity to walk through a finished product, inspect the quality firsthand and move in immediately," Brown suggested.</p>

<p>"Projects such as Park Residences and KOYO demonstrate that when the product is exceptional and the location is irreplaceable, buyers are prepared to act quickly."</p>

<p>[smartcode_project:default project_id=114246 project_image_fid=370116]</p>

<p>Abadeen CEO Joe Tack said quality continued to differentiate projects in the current market.</p>

<p>"Today's buyers are incredibly discerning," Tack said.</p>

<p>"They are seeking larger floorplans, premium finishes, walkability, lifestyle amenity and confidence in the developer delivering the project. Well-designed boutique developments continue to outperform because they offer something genuinely difficult to replace.</p>

<p>"The enquiry we are seeing across our completed and recently completed Lower North Shore portfolio is very encouraging, and we expect this momentum to continue into spring."</p>

<p>The sales follow increased enquiry across Abadeen's Lower North Shore portfolio which also includes <a href="https://www.apartments.com.au/buildings/northcote-collective-naremburn-2-northcote-street-naremburn-nsw-2065">Northcote Collective in Naremburn</a> which also completed recently.</p>


KOYO penthouse headlines Abadeen's $19.25 million EOFY sales flurry

<p>The City of Sydney has approved plans for <a href="https://www.apartments.com.au/developers/billbergia">Billbergia Group</a> and Metrics Credit Partners’ $3.5 billion Castlereagh Place project in the heart of the Sydney CBD</p>

<p>The towers will be among the tallest in <a href="https://www.apartments.com.au/developments/sydney-nsw-2000">Sydney</a>'s CBD, with more floors than any other residential tower in the city.&nbsp;</p>

<p>The 6,000 sqm site was acquired by the joint venture partners in 2024. It is the largest amalgamated land parcel in the Sydney CBD and comprises eight individual sites fronting Castlereagh, Pitt and Liverpool Streets.&nbsp;</p>

<p><a href="https://www.apartments.com.au/new-apartments/castlereagh-place-sydney-324-348-pitt-street-sydney-nsw-2000">Castlereagh Place</a> will transform an underutilised city block into a landmark mixed-use destination, anchored by two 82-storey towers comprising 607 luxury residences above an 8-level podium housing a 209-room luxury hotel. A 1,000 square metre civic park on ground level features a curated mix of food, beverage and retail.</p>

<p>The plans have been refined over the past year to rebalance the residential and hotel offering, and reconfigure the retail footprint to create a stronger, more dynamic dining experience.</p>

<p>A three-level flagship building on the prominent corner of Pitt and Liverpool Streets will be the gateway to the Castlereagh Place lifestyle precinct. Set to become a Sydney icon, the building is capable of housing multiple hospitality venues.</p>

<p>“Castlereagh Place is designed to be the City's next great urban oasis - an energetic mixed-use precinct that pulses with life, day and night,"&nbsp;said Joseph Kinsella, Group Director of Billbergia.</p>

<p>"It will bring the vibrancy of places like Barangaroo and Darling Quarter into a more accessible, central destination at the very heart of Sydney."</p>

<p>Kinsella said the project will build on&nbsp;Sydney’s growing laneway culture with the City’s largest network of new activated lanes - an expanded, next-generation take on precincts like Angel Place, Palings Lane and Ash Street in Wynyard.</p>

<p>[smartcode_project:default project_id=134477 project_image_fid=374401]</p>

<p>Castlereagh Place has been designed by architects <a href="https://www.apartments.com.au/architects/fjc-studio">fjcstudio</a> in collaboration with Trias Studio, Aileen Sage and Polly Harbison Design, joint winners of an international design competition in 2018.&nbsp;</p>

<p>Signature design elements from the original scheme remain unchanged, while the public domain has been significantly enhanced, delivering 60 per cent more open-to-sky space.</p>

<p>Pedestrian access will also be enhanced through new laneways linking Pitt, Liverpool and Castlereagh Streets, drawing people into a new civic park with outdoor seating, landscaping and integrated public art.</p>

<p>With activated laneways supported by strong hospitality offerings, Castlereagh Place is tipped to become a vibrant new dining destination in the heart of Sydney’s CBD.</p>

<p>It marks the largest undertaking to date for the Billbergia and Metrics Credit Partners partnership. Together they are developing other underutilised Sydney sites into mixed-use precincts, including the $2.2 billion Concord Central and the $1.3 billion Chatswood Grand Residences.</p>

<p>Metrics Managing Partner and Group CEO Andrew Lockhart said Castlereagh Place is a landmark project that will redefine Sydney’s skyline.</p>

<p>"As the tallest residential high-rise development, the revitalised site will offer panoramic views across the CBD and surrounds. We are excited to partner with Billbergia to reinvigorate an underutilised site and create a sophisticated and contemporary mixed-use offering situated in the heart of Sydney.”</p>

<p>Total apartments within the towers have increased to 607 dwellings, with a focus on larger floorplans. Aligned to growing market demand, Castlereagh Place now comprises 299 three-plus-bedroom apartments, 198 two-bedroom units and 110 one-bedroom configurations.</p>

<p>[smartcode_project:default project_id=134477 project_image_fid=374402]</p>

<p>Resident amenities will include an exclusive residents club containing a gym, rooftop pool, dining rooms, co-working spaces, library, golf simulator, games room, cinema room, and access to an exclusive concierge service. There will be around 500 basement car spaces below the towers.</p>

<p>The development will also include a state-of-the-art wellness centre, set to feature a bathhouse with magnesium pools, hot/cold plunge pools and premium amenities.</p>

<p>&nbsp;</p>

<p>According to fjcstudio, the towers will feature distinctive yet elegant architectural design reflecting Sydney’s geometry and urban character, with a network of through-site links and intimate public spaces activating the streetscape.</p>

<p>"Castlereagh Place is a city-making project of significant scale and ambition," said Richard Francis-Jones, Design Director at fjcstudio.</p>

<p>"It will create a rich urban complex of public open spaces, landscaped gardens, and vibrant laneways. Defining these new public spaces and the important streetscape of Castlereagh Street is a sequence of fine-grained, diverse retail and hotel architecture designed in collaboration with Aileen Sage, Polly Harbison Design and Trias.</p>

<p>“Rising above the tree-lined, human-scale streetscape are two slender residential towers that will transform the city skyline and look towards the Harbour, Hyde Park, and the Royal Botanic Garden.”</p>

<p>Demolition and early construction works have commenced onsite at Castlereagh Place.</p>

<p>[smartcode_project_cta:default project_id=134477]</p>


Billbergia, Metrics, approved for $3.5 billion Sydney skyscrapers

COVID-19

<html><body>
<p>COVID-19 and the growing recession concentrated in the services sector will not just increase social inequality, but accelerate the growing spatial divide in our cities.</p>
<p>As our new research report shows, the pandemic’s impacts reinforce the ongoing trend towards the suburbanisation of inequality.</p>
<p class="legacy">There are two reasons for this. First, the industries vulnerable to the economic impacts of COVID-19 lockdowns rely heavily on low-wage, part-time employment. Second, the inner suburbs are home to the largest concentration of COVID-vulnerable workers.</p>
<p>If we do not act now, more people will get pushed out of inner areas rich in jobs and amenities to lower-cost outer suburbs with poor access to jobs and community services.</p>
<h2>Which industries and workers are vulnerable?</h2>
<p>Our <a href="https://www.monash.edu/mada/research/navigating-economic-uncertainty-in-post-covid-cities" target="_blank">research</a> analyses where people employed in the industries most vulnerable to COVID-19 lockdowns live and the kind of work they do. We map vulnerable employment areas in all suburbs of Australia’s five largest capital cities. We then examine the characteristics of people in vulnerable employment living in all suburbs of Australia’s current coronavirus hotspot, metropolitan Melbourne.</p>
<p>We define vulnerable employment based on a detailed review of industries with one-third or more firms reporting <a href="https://www.abs.gov.au/AUSSTATS/abs@.nsf/Previousproducts/5676.0.55.003Main%20Features3Week%20Commencing%2030%20March%202020?opendocument&amp;tabname=Summary&amp;prodno=5676.0.55.003&amp;issue=Week%20Commencing%2030%20March%202020&amp;num=&amp;view=" target="_blank">reduced worker hours</a> one week after the first COVID-19 lockdown (March 30 2020). These firms are mainly in the consumer, travel and community services sectors. They employ people working in accommodation and food, arts and entertainment, education, “non-essential” <a href="https://www.propertyobserver.com.au/https://www.abc.net.au/news/2020-06-16/coronavirus-leaves-medical-practices-on-verge-of-collapse/12359282" target="_blank">health care</a>, retail and transport.</p>
<p>We profile the characteristics of vulnerable workers in each of these sub-industries and by suburb. We classify suburbs (using <a href="https://www.abs.gov.au/websitedbs/D3310114.nsf/home/Australian+Statistical+Geography+Standard+(ASGS)" target="_blank">SA2 level</a> data from the Australian Bureau of Statistics) by share of vulnerable employment based on the worker’s place of usual residence.</p>
<h2>Many at-risk workers live in inner suburbs</h2>
<p>As the map below shows, the largest shares of vulnerable workers live in Melbourne’s inner suburbs.</p>
<p><a href="https://images.theconversation.com/files/349503/original/file-20200727-25-754ql2.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=1000&amp;fit=clip"><img src="https://images.theconversation.com/files/349503/original/file-20200727-25-754ql2.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt=""></a></p>
<p><span class="attribution"><span class="source">Source: ABS (2016) Census data, by place of residence at SA2 level. Map by Declan Martin and Alexa Gower</span>, <span class="license">Author provided</span></span></p>
<p>Vulnerability levels clearly diminish moving outward from the city centre. In other words, many vulnerable workers live in some of the highest-rent suburbs.</p>
<p>On average, the share of vulnerable workers in the very high vulnerability suburbs is 32.2% of employed residents. The figure exceeds 40% in some of these areas.</p>
<h2>Workers likely to be forced to move</h2>
<p>Living in the inner suburbs, combined with the nature of their jobs, puts many COVID-vulnerable workers at high risk of displacement.</p>
<p>In the very high vulnerability suburbs, 47% of vulnerable workers are on low or very low incomes. And 54.3% work part-time (less than 38 hours a week). A large proportion (41.9%) are aged under 30 and about one-third are 30-44.</p>
<p>In fact, over half (53.5%) of the vulnerable workforce living in very high-vulnerability suburbs hold jobs in the most precarious, low-wage consumer services industries – accommodation and food services and retail and personal services. Another 30% work in arts, entertainment and education.</p>
<p>Suppressed consumer demand will not only have short-run employment impacts, but might permanently alter consumption patterns. The result would be enduring business closures and job losses for workers who live in these areas.</p>
<p>To make ends meet, many of those facing job loss and other employment pressures such as reduced hours will seek more affordable housing in the middle and outer suburbs.</p>
<p>However, although the outer areas are now home to the smallest proportion of vulnerable workers, the vulnerable workers that live there tend to be worse off. Just over 66% are on low or very low incomes and 60% work part-time.</p>
<p>As a result, the migration of COVID-vulnerable workers to the outer areas will add to the existing concentration of spatial inequality in Greater Melbourne.</p>
<p><a href="https://images.theconversation.com/files/350533/original/file-20200731-77137-1yq48ho.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=1000&amp;fit=clip"><img src="https://images.theconversation.com/files/350533/original/file-20200731-77137-1yq48ho.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt="Table showing demographic breakdown of vulnerable employment communities for each level of vulnerability"></a></p>
<p><span class="attribution"><span class="source">Source: ABS 2016 Census data, by place of residence at the SA2 level</span>, <span class="license">Author provided</span></span></p>
<h2>What can be done about this?</h2>
<p>COVID-19 puts people working in low-end <a href="https://theconversation.com/how-the-coronavirus-recession-puts-service-workers-at-risk-134869" target="_blank">service jobs</a> and the <a href="https://theconversation.com/coronavirus-3-in-4-australians-employed-in-the-creative-and-performing-arts-could-lose-their-jobs-136505" target="_blank">creative</a> and educational services at high risk of losing their jobs. Those who manage to live in the high-cost inner suburbs are now particularly vulnerable.</p>
<p>It is therefore crucial to expand rather than retract the JobKeeper and JobSeeker programs. Proposed cuts to JobSeeker are estimated to <a href="https://www.theguardian.com/business/2020/jul/24/weekly-cut-of-150-to-jobseeker-coronavirus-supplement-will-throw-370000-australians-into-poverty" target="_blank">push 370,000 Australians into poverty</a>, 123,000 in Victoria alone. In tandem, we need interim policy in the rental housing market to defuse the impending “<a href="https://www.theguardian.com/australia-news/2020/jul/19/we-dont-know-how-many-time-bombs-are-ticking-australias-rent-deferral-debt-trap" target="_blank">rent bomb</a>” of tenants facing eviction if they can’t pay the accumulated debt of deferred rent.</p>
<p>Longer-term strategies are also needed. We must confront the reality that many service sector jobs will not return.</p>
<p>This requires investment in skills-building courses tied to strengthening the recovery of TAFEs and universities, particularly in areas like “essential manufacturing” – medical supplies, recycling, food – and communications technologies. <a href="https://www.pm.gov.au/media/jobtrainer-skills-package-economic-recovery-and-growth" target="_blank">JobTrainer</a> is a good start.</p>
<p>Given the spatial dimensions of the crisis, place-based programs are crucial too. Preserving <a href="https://theconversation.com/three-ways-to-fix-the-problems-caused-by-rezoning-inner-city-industrial-land-for-mixed-use-apartments-121566" target="_blank">inner suburban industrial land</a> can play a significant role in small enterprise start-ups, firm expansion and job creation. Inner industrial districts provide a flexible mix of space that allows businesses to grow and add quality jobs in place.</p>
<p>At the same time, policymakers can better develop community infrastructure and employment hubs in the outer suburbs. Community hubs provide flexible, multipurpose spaces that cater to various community needs. These services range from youth, aged care and health facilities to collaborative workspaces and settings for workforce training providers.</p>
<p>While COVID-19 is clearly taking an immediate toll on the health and economies of our cities, we need a conversation about the longer-term impacts and responses.<img src="https://counter.theconversation.com/content/143432/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important; text-shadow: none !important;"></p>
<p><span><a href="https://theconversation.com/profiles/carl-grodach-403324" target="_blank">Carl Grodach</a>, Professor and Director of Urban Planning &amp; Design, <em><a href="https://theconversation.com/institutions/monash-university-1065" target="_blank">Monash University</a></em></span></p>
<p>This article is republished from <a href="https://theconversation.com" target="_blank">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/why-coronavirus-will-deepen-the-inequality-of-our-suburbs-143432" target="_blank">original article</a>.</p>
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Why coronavirus will deepen the inequality of our suburbs

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<p><span>During these extraordinary times, NAB has taken the decision to publish aggregated customer data categorised by industry segment with the view to helping provide clarity around which segments of the economy have been most affected by the broader macroeconomic trends at play.</span></p>
<p><span> NAB takes data privacy very seriously. All customer transaction data has been aggregated and no individual’s data is specifically identified or analysed as part of this process. The data used in this report will not be sold or made publicly available, but insights from the data will be shared with the Australian people.</span></p>
<p><span>NAB’s latest Data Insights highlight a slowdown in consumption spending in recent weeks, with overall growth easing to 5.8 per cent y/y for the week ended July 18. Spending slowed in all states and territories (except SA/NT). It is now weakest in VIC (-0.7 per cent) with this result heavily influenced by lockdown in metropolitan Melbourne. NSW is also weakening faster than most. Relative to last year, overall spending growth slowed (or fell further) in all industries, but overall growth continues to be supported mainly by spending on Construction and Retail Trade.</span></p>
<p><span><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/2020/7/24/16_Consumption%20Spending%20by%20State.jpg" alt=""></span></p>
<p> </p>
<p>Source: NAB Group Economics.</p>
<p><span>Payment inflows across all industries were flat (0.1 per cent) in the 4-weeks to July 18 (4-week average terms). Inflows are still falling heaviest for corporates. By industry, they were down most in Mining, Transport and Hospitality, and were strongest in Agriculture, Manufacturing, Retail Trade and Professional, Scientific &amp; Technical Services.</span></p>
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<div class="column">NAB’s latest Data Insights point to a slowdown in consumption spending in recent weeks, with overall growth easing to 5.8 per cent y/y in the week ending July 18 (9.8 per cent in the previous week), but still roughly at levels seen in late-February.</div>
<div class="column"> </div>
<div class="column">Consumption spending eased in all states except SA/NT (8.9 per cent). It fell sharply in VIC, which is now the only state showing a negative result (-0.7 per cent). This spending hit was driven by sharp falls in lockdown areas (-3.6 per cent), with non-lockdown areas still growing by more than 8 per cent. Spending growth halved in NSW (6.1 per cent) compared to the previous week, and was strongest in the NT (19.6 per cent) and WA (12.5 per cent).</div>
<div class="column"> </div>
<div class="column">Relative to last year, overall spending growth eased (or fell faster) in all industries. But overall growth continues to be underpinned mostly by spending on Construction (albeit slowing to 19.6 per cent from 39.9 per cent in the previous week) and Retail Trade (which also eased to 18.3 per cent from 25.1 per cent in the previous week). Spending on Hospitality (the biggest sector of the economy) fell 14.6 per cent (down 10.1 per cent last week). Spending on Administration &amp; Support Services is still very weak (-70.9 per cent), with sizeable falls also persisting in Transport, Postal &amp; Warehousing (-43.0 per cent) and Education &amp; Training (-22.6 per cent). </div>
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<div class="column"><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/2020/7/24/16_By%20Industry%201.jpg" alt="" style="caret-color: #000000; color: #000000;"></div>
<div class="column">Source: NAB Group Economics.</div>
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<div class="column">Payment inflows (in year-on-year 4-week moving average terms) were basically flat (0.1 per cent) for the 4 weeks ending July 18 compared to the same time last year, but improved from the previous week (-2.9 per cent). By business size, inflows grew in both large (5.0 per cent) and emerging (2.7 per cent) firms. Inflows into corporates however fell for the fourth straight week (-6.4 per cent), with smaller falls of around 21⁄2 per cent in both medium and small firms.</div>
<div class="column"> </div>
<div class="column">By industry, payment inflows into Accommodation continue falling steeply (-16.5 per cent), although this was the slowest rate of decline seen since late-March. Inflows into Mining firms however turned down sharply (-26.9 per cent), with inflows into Transport, Postal &amp; Warehousing also still falling heavily (-16.6 per cent). Inflows into Education fell 4.6 per cent after falling 22.0 per cent in the previous week. Payment inflows were strongest into Agriculture (12.2 per cent), Manufacturing (11.4 per cent), Retail Trade (11.2 per cent) and Professional, Scientific &amp; Technical Services (10.0 per cent). </div>
<div class="column"><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/2020/7/24/16_By%20Industry%202.jpg" alt=""></div>
<div class="column">Source: NAB Group Economics.</div>
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Impacts of coronavirus on consumption based spending and business payment inflows: NAB

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<p>EXPERT OBSERVER</p>
<div>
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<div>There was a resurgence in homebuyer finance in June, but not in Victoria, where finance commitments dropped sharply. </div>
<div> </div>
<div>Unfortunately for Melbourne, this trend will only continue through July and August...and into September.</div>
<div> </div>
<div class="separator"><img src="https://1.bp.blogspot.com/-gF79nLAcUM4/XyoSdvUDgtI/AAAAAAAA3d0/0FQojubIv-c-xXccTfWU79gepvpeC7t5ACNcBGAsYHQ/s640/A3.jpg" width="640" data-original-height="804" data-original-width="1388"></div>
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<div>First homebuyer commitments zipped higher, but there was another sharp 9 per cent drop in Victoria, following on from a similar decline in the month of May.</div>
<div> </div>
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<div>Overall, stripping out refinancing housing finance jumped +6.2 per cent, despite Victoria's woes. </div>
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<div>The average mortgage size has been a bit all over the place of late, possibly due to there being more first homebuyers in the market. </div>
<div> </div>
<div>AFG's quarterly numbers showed a record high mortgage size in Q2, albeit only just.</div>
<div> </div>
<div>Basically flat would be another way to describe the figures (and the same for the ABS data).  </div>
<br><div class="separator"><img src="https://1.bp.blogspot.com/-SLMdAg1gUlc/XyoSeorD_JI/AAAAAAAA3eE/CmCCLxqbo2k84D06MWp6qUdpVhUXOASIACNcBGAsYHQ/s640/afg2.jpg" width="640" data-original-height="801" data-original-width="1372"></div>
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<div>There was enormous strength in the average mortgage size in New South Wales, which hit a record high, but not so in Victoria. </div>
<br><div class="separator"><img src="https://1.bp.blogspot.com/-Hc8xWagT5ig/XyoSeWzCIpI/AAAAAAAA3eA/nFg25VvGcW0_53ZOQT7J_FRHrrFBYfLeQCNcBGAsYHQ/s640/afg.jpg" width="640" data-original-height="800" data-original-width="1364"></div>
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<div>Overall, a decent rebound ex-Melbourne.</div>
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<div>Note that this bounce was also before the HomeBuilder boom kicks in.</div>
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<div>New South Wales will also see a surge in activity up to $1 million resulting from the stamp duty discounts announced on July 27. </div>
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<div>Victoria recorded some 725 cases of COVID-19 over the past 24 hours, ensuring that the Stage 4 lockdown will almost certainly run for weeks to come. </div>
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<p><strong>PETE WARGENT</strong><em><strong> </strong>is the co-founder of AllenWargent property buyers and a best-selling author and blogger </em></p>
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Homebuyers returning, but not in Victoria: Pete Wargent

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<p>Not every Australian housing market has performed the same way since the onset of the COVID-19 pandemic.</p>
<p>The latest CoreLogic Home Value Index results revealed that since March, Melbourne property values fell 3.5%. Meanwhile, the ACT dwelling market reached a record high.</p>
<p>From June to July, the rate of decline eased across Perth from -1.1% to -0.6%, but deepened across Melbourne and Sydney.</p>
<p><img src="https://www.urban.com.au/images/2020/8/6/Cumulative%20CL.JPG" alt=""></p>
<p>The chart above shows the varied trajectories of capital city markets from the end of March.</p>
<p>The end of March is a good place for dating the ‘start’ of the COVID-19 pandemic in Australia, because Australia recorded its 100th case of COVID-19 on the 14th of the month, and the 25th of March saw the national rollout of stage 2 restrictions, which created much of the economic shock as business activity slowed.</p>
<p>Melbourne has so far seen the largest cumulative declines in property values since March (3.5%). This was led by a 5.2% decline across the Inner East region.</p>
<p>As has been explored in recent weeks, the steeper decline across the Melbourne market is two-fold. Cyclically, Melbourne property is subject to more volatile growth rates, and is also presenting strong declines off the back of very high growth rates through the previous upswing.</p>
<p>Structurally, there has been an enormous demand shock to the Melbourne property market with the closure of international borders, where Melbourne previously had the highest level of net overseas migration of the capital city markets. This is similar to the Sydney housing market, which received the second highest volume of net interstate migrants over 2018-19.</p>
<p>Victoria has also seen the largest decline in payroll jobs of the states and territories, according to ABS data. Conversely, the ACT has seen property value increases of 1.3% since March. While the performance of the ACT market may seem like an anomaly, the ACT dwelling market is one of the few markets performing as may be expected amid the record low cash rate setting.</p>
<p>RBA research has noted that reductions in the cash rate typically increase property values over time, because debt becomes cheaper and purchasing capacity increases.</p>
<p>However, it is still striking that 70% of food and accommodation employers reported a reduction in staff hours. Food and accommodation employs about 8% of Australians, or about 1.2 million people. This is where a more granular view of employment data can highlight risks to the property market.</p>
<p>The detailed quarterly survey data provides insight into what industry residents work in, at the SA4 level. The February edition suggests that most food and accommodation workers are highly concentrated in Sydney’s Inner West, followed by the Sunshine Coast and the Coffs Harbour-Grafton region.</p>
<p>This market has likely been buoyed by the relative stability in employment across sectors where workers are on higher incomes, and are more likely to be home owners or prospective buyers. For example, ABS payroll data shows the number of jobs across the financial and insurance industry in the ACT has actually increased 0.7% since the start of the pandemic.</p>
<p>A ‘two tiered’ state of the labour market is highlighted by the fact the ACT accommodation and food services sector has seen the largest rate of decline of the states and territories. This industry is more likely to be comprised of renters, and rental values have fallen half a percent across the ACT since March, with larger falls across the unit sector (-1.0%). Smaller housing markets have seen better capital growth results since March.</p>
<p>Adelaide is a relatively steady market that has traditionally not seen volatile movements in response to negative economic shocks. This may be partly to do with the relatively low level of investment activity across the market. CoreLogic estimates that the portion of dwellings across Adelaide that were owned by investors as of July 2020 was 28.9%, compared with 34.5% nationally. While Adelaide has seen modest growth during the pandemic, this has not traditionally been a market with strong capital growth returns.</p>
<p>Annualised growth across Adelaide dwellings over the past 10 years was 1.3%, compared with 3.0% across the combined capital cities market. It is also worth noting that while cumulative price changes show 4 of the 8 capital city markets have not declined in value since March, almost all markets are showing a slowdown in growth rates. This suggests that, as with past downturns, most housing markets will be subject to a downswing phase.</p>
<p><strong> What to expect going forward</strong></p>
<p>Looking forward, there are a variety of factors that will influence the outlook for home values. Of immediate concern is the steepening curve of the virus in Victoria.</p>
<p>Considering Victoria accounts for around one quarter of the nation’s economy, the stage four lockdown has already dampened both consumer and business sentiment nationally and the interruption to economic activity will deepen and lengthen Australia’s recession.</p>
<p>Cities where labour markets are more impacted are also likely to under-perform, as will those with more significant exposure to overseas migration as a source of housing demand.</p>
<p>As federal government fiscal support moves from around $18 billion per month to around $3 billion from October, housing market conditions will be tested more broadly; this is when we are likely to see a rise in the number of households facing financial distress and a lift in urgent sales.</p>
<p>The expiry of mortgage repayment holidays is another downside factor for the market. Pre-COVID, mortgage arrears remained around 1% of the mortgage book, but with unemployment expected to reach 10%, along with less fiscal support and an expectation that mortgagors taking a repayment holiday will need to face up to their debts by April next year, it’s reasonable to expect a sharp rise in mortgage arrears which could see a lift in distressed properties hitting the market. The RBA has previously noted for every 1 per cent rise in the unemployment rate, 90 day mortgage arrears generally increase by 80 basis points.</p>
<p> </p>
<p>If unemployment rises to 10%, that implies a 90 day mortgage arrears rate around 5%. Arguably, this may be an overstatement, considering weak labour market conditions are skewed to more casualised workers who tend to be renters rather than home owners.</p>
<p>The outlook for both the economy and housing markets remains extremely uncertain, but risk remains skewed to the downside.</p>
<p><strong>ELIZA OWEN </strong><em>is the</em><em> Head of Research Australia at CoreLogic</em></p>
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Why capital cities performed differently amid COVID-19: CoreLogic's Eliza Owen

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<p>EXPERT OBSERVER</p>
<p class="p1"><span class="s1">The stubborn resistance of house prices to the negative forces on the pandemic, and the economic downturn it has created, is shown by the month by month data from CoreLogic – with the latest figures published today (3 August).</span></p>
<p class="p1"><span class="s1">An analysis of the monthly figures for the past five months covering the pandemic period shows that - generally speaking - there has been a gradual deterioration in price outcomes. Looking at the average national result, house prices were up 0.7% in March, up by a smaller amount in April, down marginally in May, down by a larger amount in June and then a similar, though slightly better, result in July.</span></p>
<p class="p1"><span class="s1">But looking at the figures at a more local level shows that some locations have been more resilient than others. The latest figures show that half the market jurisdictions managed to produce some level of growth in their house prices during July.</span></p>
<p class="p1"><span class="s1">The “jurisdictions” are the eight capital cities and the seven state or territory regional markets. Of those 15 jurisdictions, seven produced some level of growth in house prices in July. Remarkable in the circumstances.</span></p>
<p class="p1"><span class="s1">Those figures illustrate a point I have making regularly in recent months: that regional markets are generally doing better than capital city markets.<span class="Apple-converted-space"> </span></span></p>
<p class="p1"><span class="s1">In July, five of the seven regional jurisdictions produced house price growth, compared to two of the eight capital city markets.</span></p>
<p class="p1"><span class="s1">The figures from the past five months deliver other important messages. One is that month-to-month figures can be highly erratic and we need to be careful about placing too much significance on one month’s results.</span></p>
<p class="p1"><span class="s1">In Darwin, for example, house prices rose in April, fell in May, rose in June and fell in July (according to the CoreLogic data - other sources have different figures).</span></p>
<p class="p1"><span class="s1">In Hobart, house prices rose in March, fell in April, rose in May and June, then fell in July. Again, if you believe the CoreLogic figures.</span></p>
<p class="p1"><span class="s1">Another message in the data is that we don’t have a single market in Australia. We have many different markets with different outcomes from one market to the next.<span class="Apple-converted-space"> </span></span></p>
<p class="p1"><span class="s1">That’s an important point because media will report that Australian property prices fell in July, when in reality there were price rises in Canberra, Adelaide and five regional jurisdictions. Again, according to these figures.</span></p>
<p class="p1"><span class="s1">Looking at the longer-term patterns, some markets stand out for their consistency and strong resistance to the national economic forces.</span></p>
<p class="p1"><span class="s1">Canberra has delivered some level of growth in each of the past five months. This tends to confirm our view that the national capital is the most Covid-proof city in the nation.</span></p>
<p class="p1"><span class="s1">Adelaide has also shown great consistency, with small rises in four of the past five months, including in July. This confirms my positive opinion about the solidity of this under-rated city.</span></p>
<p class="p1"><span class="s1">Two of the regional markets, South Australia and Tasmania, have delivered price growth in all of the past five months. And two others - NSW and Queensland - have achieved growth in four of the past five months, including during July.</span></p>
<p class="p2"><span class="s1">Central message: prices have not collapsed anywhere and some places continue to grow.</span></p>
<p class="p3">It’s a different message to one delivered by mainstream media. One major newspaper has reacted to the latest figures with the claim that they show that house prices are “plunging” right across Australia.</p>
<p class="p2"><span class="s1">Nothing of the sort is happening.</span> </p>
<p class="p2"><span class="s1">The CoreLogic figures indicate that house prices are higher than they were a year ago in 11 of the 15 market jurisdictions.</span></p>
<p class="p2"><span class="s1">That simple truth demonstrates that the forecasts back in March-April of a dramatic and immediate collapse of house prices was sensationalist nonsense.</span></p>
<p class="p3"> </p>
<p class="p4">T<em>erry Ryder is the founder of hotspotting.com.au</em></p>
<p class="p4"><span class="s2"><a href="https://mailto:ryder@hotspotting.com.au"><em>ryder@hotspotting.com.au</em></a></span></p>
<p class="p5"><em>twitter.com/hotspotting</em></p>
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Australian house prices resilient in COVID-19 downturn: Hotspotting's Terry Ryder

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<p>A dozen COVID-19 infections have emerged at the Melbourne residential high-rise tower construction site.</p>
<p>The Victorian Department of Health and Human Services (DHHS) notified construction company Multiplex of 12 cases at the Multiplex Premier Apartments site at 134-160 Spencer St, Melbourne.</p>
<p>Construction at the $315 million Premier Tower in Melbourne has been halted following the emergence of the COVID-19 cases.<br>Multiplex management and the unions involved have agreed to a full site shut down.</p>
<p>The site has undergone a ‘hospital grade’ clean.</p>
<p>Multiplex recently celebrated the topping out of the 79-level Fragrance Group tower that will have 172 hotel rooms plus 796 apartments that replaced the Savoy Tavern.</p>
<p class="selectionShareable"><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/2019/1/11/Beyonce%202.jpg" alt=""></p>
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<p class="selectionShareable">The building that stands at 246m above the Spencer and Bourke street corner saw some 35,000 cubic metres of concrete poured.</p>
<p>It had secured 60% off the plan pre-sales in its 2015 stage one launch with a selection of one bedroom, one bedroom-plus-study and two bedroom configurations.</p>
<p>Around half went to offshore buyers seemingly galvanised by the new Victorian Government stamp duty on foreign buyers that began July 1.  </p>
<p>There will also be a boutique hotel housed in the podium levels hosting 175 rooms. </p>
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COVID-19 infections hit Melbourne's Beyonce inspired tower construction site

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<p><strong>Expert Observation by Shane Oliver, Head of Investment Strategy and Chief Economist, AMP Capital</strong></p>
<p><strong>Introduction</strong></p>
<p><span>This economic and fiscal update is the first since December</span><span>’s </span><span>Mid-Year Economic and Fiscal Outlook when budget surpluses looked just around the corner. Since then things have changed dramatically due to the hit from coronavirus and necessary support measures from the Government.</span></p>
<p><strong>Policy stimulus</strong></p>
<p><span>The statement provided no new policy stimulus measures beyond those that have been announced in the last two weeks:</span></p>
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<li>
<p><span>$2bn in spending on subsidies for apprentices &amp; JobTrainer;</span></p>
</li>
<li>An estimated $16bn to extend JobKeeper to March next year but with payments stepping down to $1200 and then $1000 a fortnight for those who worked 20 hours or more per week in February and to $750 and then $650 for others and businesses having to meet the turnover reduction test at the end of the September and December quarters to keep receiving it; and</li>
<li>An estimated $3.8bn to extend the JobSeeker Supplement to December at the pared back rate of $250 a fortnight.</li>
</ul>
<p>This additional $22bn in spending along with prior coronavirus- related economic support (in the form of actual spending, tax breaks and health measures) takes the COVID-19 response package to nearly $174bn. JobKeeper is the main element in this, but it also includes the JobSeeker supplement, payments to businesses and payments to eligible households. There is also loans &amp; guarantee support (from the government and RBA) worth $125bn or just over 6% of GDP.</p>
<p>Proposals to bring forward the tax cuts and provide additional investment incentives look to have been pushed out to the October budget and additional industry support packages are also likely. The Government may have delayed this extra stimulus to gauge how much additional help will be required with a lot riding on how quickly the latest outbreak of coronavirus is brought back under control. Spreading out the announcement of new stimulus measures may also get more bang for the buck in terms of the boost to confidence. </p>
<p><strong>Economic assumptions </strong></p>
<p>The Government is forecasting the economy to contract this financial year by -2.5 per cent, its biggest financial year contraction since 1946-47. But this masks a "record" -7 per cent contraction in June quarter GDP and a gradual recovery from the second half of this year. The Government is a bit more optimistic than we are in terms of economic growth and unemployment. </p>
<p><img src="https://www.urban.com.au/images/2020/7/24/27_Economic%20Assumptions.png" alt=""></p>
<p><strong>Budget deficit projections </strong></p>
<p>The Government's revised budget projections and our own are shown below. These should be treated with greater than normal caution given the uncertain economic outlook. </p>
<p><img src="https://www.urban.com.au/images/2020/7/24/27_Budgets.png" alt=""></p>
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<p><span>The hit to the economy and hence revenue and expenditure since the Mid-Year Economic and Fiscal Outlook last December is huge at $72bn for this financial year and is shown in the line called </span><span>“parameter changes”</span><span>. It should gradually start to diminish as the economy recovers. Policy stimulus (mainly due to the coronavirus response but also other things) since last December is shown in the line labelled </span><span>“</span><span>Total </span><span>stimulus”.</span></p>
<p><span>As a result of </span><span>the Government’s fiscal response </span><span>and the hit to revenue from the economic downturn, the Government projects the budget deficit to further blow out from around $86bn for the past financial year to a record $184.5bn this financial year.</span></p>
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<p><span>While it does not provide projections beyond this financial year the implication is that the deficit will decline in future years as support programs phase down and the economy recovers. On the Governme</span><span>nt’s projections t</span><span>his would see the budget deficit as a share of GDP peak at around 9.7% of GDP in 2020-21, which would be its highest since World War 2. We continue to see a bigger deficit for this financial year of around $220bn reflecting both a bigger hit to revenue and additional stimulus of around $17bn to be announced in the months ahead, including in the October budget. This is likely to include the bring forward of the 2022 tax cuts, more investment incentives and more industry support programs. The budget deficit blow-out will add about 20 per cent of GDP to public debt out to 2022. </span></p>
<p><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/2020/7/24/27_Deficit%20.jpg" alt=""></p>
<p><strong>Assessment</strong></p>
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<p><span>The additional $22bn in stimulus announced over the last two weeks is welcome and will help turn the fiscal cliff in October into a fiscal slope. The boost to stimulus announced in the last two weeks takes Australia</span><span>’s total level of </span><span>coronavirus related fiscal stimulus (excluding loans and guarantees) this year up to 8.7% of GDP, which is well and truly at the high end of comparable countries. This should aid the economic recovery.</span></p>
<p><span><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/2020/7/24/27_4.jpg" alt=""></span></p>
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<p><span>However, </span><span>it’s </span><span>doubtful that this will be enough given the long tail of unemployment flowing from the coronavirus shock. We estimate that were it not for JobKeeper and people leaving the workforce the effective unemployment rate would currently be 11.3%, which is well above the official measured rate of 7.4%. This has fallen from 14.8% in April thanks to the reopening of the economy, but with the threat to the recovery posed by the second wave of cases in Victoria and the lockdown in Melbourne and the risk of a flow on to NSW, effective unemployment may only fall to around 10% or so by September and maybe 9% or more going into next year, so continued income support is essential. The Government</span><span>’s </span><span>focus now shifts to economic reforms in the October budget and this is likely to include even more fiscal support, as noted earlier.</span></p>
<p><span>Our assessment remains that the blow out in the budget deficit is affordable. First, </span><span>it’s </span><span>absolutely necessary as were it not for the support measures the economic hit would be far greater.</span></p>
<p><span>Second, it makes sense for the public sector to borrow from households and businesses at a time when they have cut their spending, and to give the borrowed funds to help those businesses and individuals that need help.</span></p>
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<p><span>Third, the support programs are targeted at current needs so </span><span>shouldn’t lead to </span><span>permanently higher government spending.</span></p>
<p><span>Fourth</span><span>, Australia’s </span><span>starting point for net public debt last year was low at 23% of GDP compared with other advanced countries averaging 83%. See the next chart. And even with </span>projected budget deficits it will remain relatively small.</p>
<p><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/2020/7/24/27_5.jpg" alt=""></p>
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<p><span>Fifth, borrowing to finance the budget deficit is in Australian dollars and we are not dependent on foreign creditors, so we </span><span>are not vulnerable to a “foreign currency crisis</span><span>.</span><span>”</span></p>
<p><span>Finally, the cost of Government borrowing is very low at around 0.85% for ten years and 0.25% for three years.</span></p>
<p><strong>Implications for the RBA</strong></p>
<p><span>Ongoing Government support for households and businesses is not enough to change our assessment that the RBA will need to keep cash rate near zero for years ahead and possibly need to undertake more quantitative easing in the face of ongoing spare capacity in the economy and below target inflation.</span></p>
<p><strong>Implications for Australian assets</strong></p>
<p><span>Cash and term deposits </span><span>– </span><span>with the cash rate unlikely to rise from 0.25% for years, returns from cash and bank term deposits will remain low for a long time to come. That said the budget stimulus and increase in money supply holds out at the prospect that at some point inflation and interest rates will rise. But it</span><span>’</span><span>s probably at least three years away.</span></p>
<p><strong>Bonds </strong><span>– </span><span>the surge in public debt and bond supply would all other things being equal, point to higher bond yields, but this is offset by massive spare capacity, low private sector borrowing, very low inflation and the cash rate capped at 0.25% for years it</span><span>’</span><span>s hard to see a lot of upside in bonds yields. That said, if coronavirus comes under control it</span><span>’</span><span>s hard to see a lot of downside either so medium-term bond returns are likely to be low.</span></p>
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<p><strong>Shares </strong><span>– </span><span>the addition of extra policy stimulus further helps to offset the hit from coronavirus and adds to confidence that growth will recover which is supportive of shares.</span></p>
<p><strong>Property </strong><span>– </span><span>ongoing income support is continuing to help the property market avoid a sharp fall in home prices but the negatives around high effective unemployment, the weak rental market and the collapse in immigration point to ongoing falls in prices into next year, particularly in Sydney and Melbourne.</span></p>
<p><span><strong>The $A</strong> </span><span>– </span><span>ongoing fiscal stimulus at the high end of comparable countries coming at a time of rising commodity prices and a declining US dollar point to more upside for the $A.</span></p>
<p><strong>Concluding comment</strong></p>
<p><span>With private sector spending hit by coronavirus it makes sense for the Government to continue to help fill the breach and support the economy. The best approach to getting debt back down is to grow the economy aided by a reinvigorated economic reform agenda, but for a while yet government fiscal support will continue to be needed.</span></p>
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Australian economic and fiscal update – record budget deficits, but more to come

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<p>First home buyers and the construction industry will benefit greatly from the elimination of stamp duty on newly-built homes below $800,000 and a reduction in thousands of dollars for properties up to $1 million.</p>
<p>Premier Gladys Berejiklian said the change to stamp duty thresholds would also support new home construction and create jobs as part of the Government’s COVID19 Recovery Plan.</p>
<p>“Thousands of people will see their bank balances benefit from this change - it will help get more keys into more front doors of more new homes,” Ms Berejiklian said.</p>
<p>“It will also boost housing construction across NSW and support jobs in the building industry at a time when we need them more than ever before.”</p>
<p><img src="https://www.urban.com.au/images/2020/7/27/Tax%20Threshold.JPG" alt=""></p>
<p>Under the changes the threshold above which stamp duty will be charged on new homes for first home buyers will increase from the current $650,000 to $800,000, with the concession reducing on higher values before phasing out at $1 million.</p>
<p>The Government forecasts more than 6,000 first home buyers will benefit from the changes, saving eligible first homebuyers thousands of dollars.</p>
<p>Under the changes the stamp duty threshold on vacant land will rise from $350,000 to $400,000 and will phase out at $500,000. The change to the thresholds will only apply to newly-built homes and vacant land, not to existing homes, and will last for a 12-month period, commencing on 1 August 2020.</p>
<p>The NSW Government will also continue to offer a $10,000 First Home Owner Grant, which is available to people buying a new first home worth no more than $600,000, or buying land and building a new first home worth no more than $750,000 in total. This means the maximum amount of benefit a home owner could be entitled to is $32,335 if purchasing a new home and accessing the grant.</p>
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NSW FHB stamp duty to be slashed as part of COVID-19 recovery plan

<html><body><p><span>A COVID-induced spike in real estate enquiry has experts predicting a strong Whitsundays in the ‘new normal’.</span><br><br><span>Reports across the country state city-dwellers are making a COVID-19-change and are trading their CBD cubicle for a remote office with room to enjoy tranquility.</span><br><br><span>This newfound flexibility is believed to be behind the near-record number of online searches for Whitsunday property in recent months. </span><br><br><span>The lure of acreage seems to be the strongest, with leading real estate website </span><a href="http://domain.com.au/" target="_blank">Domain.com.au</a><span> experiencing a 507 per cent increase in searches for rural residential property in Cannonvale, and surrounding areas. </span><br><br><a href="https://ecomms.raywhite.com/collect/click.aspx?u=V1I3c3ZNeXdEbDVDRmVndkZYMmJYT01wQzNoTU43Zk10SDRYRmRwZDB3QUdIb2k1M0RZNzZRK25pSWxLSXpSU0NJK0xDcnZJZlljMThnNFFMZEt1ckE9PQ==&amp;rh=ff006465a85cb54541341c264f419930d26ae172" target="_blank">Ray White Whitsunday</a><span> Sales Associate Brett Dwyer said he had been surprised by the increase in enquiry. </span><br><br><span>“It seems like anyone that has had the Whitsundays as their 'one-day' dream address has decided that now is the time to move, and the latest stimulus announcements have magnified this further,” Mr Dwyer said.</span><br><br><a href="https://ecomms.raywhite.com/collect/click.aspx?u=V1I3c3ZNeXdEbDVDRmVndkZYMmJYT01wQzNoTU43Zk10SDRYRmRwZDB3RGsyVUtad1h5clQ5dktQcnFTbGtrSzU4SnR4UC82dmkzamRXZ3k3UXZtWHc9PQ==&amp;rh=ff006465a85cb54541341c264f419930d26ae172" target="_blank">Hidden Valley Whitsundays</a><span>, a new estate outside of Cannonvale may well be the epicentre of new interest, receiving over $1.3 million of land offers in May alone. </span><br><br><span>Hidden Valley Project Manager Brett Evans was less surprised that southern eyes were looking north for an escape. </span><br><br><span>“I lived in the Whitsundays for years but I live in the city right now and I can tell you where I’d rather be when things get crazy. We all felt the walls closing in down here,” Mr Evans said.</span><br><br><span>“After a few weeks of empty grocery shelves and being outsmarted by grade one home-schooling, we were definitely ready to hook the boat up and head north.” </span><br><br><span>With ten lots in the first stage of Hidden Valley sold to local buyers, it seems it’s not just the southern city-dwellers feeling claustrophobic. Locals are also looking for the security that comes with a few extra acres. </span><br><br><span>“The prospect of a more self-sufficient lifestyle and the security that comes with a few extra acres seem to be really strong motivators, which is understandable,” Mr Dwyer said.</span><br><br><span>“Who hasn’t found themselves in lockdown staring at the neighbours’ fences on either side and thinking that a little extra space, a veggie garden and a few chickens sounds pretty good?” </span><br><br><span>Senior Analyst for </span><a href="https://ecomms.raywhite.com/collect/click.aspx?u=V1I3c3ZNeXdEbDVDRmVndkZYMmJYT01wQzNoTU43Zk10SDRYRmRwZDB3QUdIb2k1M0RZNzZWNkdQbFYzNnBuVktEOWJQZHIzaGVjYjV4Q0UwUkRxV0h1V2RROEp6eDRSWUlxNlIzZzljZUFwR2FjbmR2TFdtUT09&amp;rh=ff006465a85cb54541341c264f419930d26ae172" target="_blank">Ray White Northern Corridor Group</a><span>, Ashley Rees, said supply of quality acreage land could soon become an unexpected issue in the region. </span><br><br><span>“When the pandemic began, stock levels were already 14 per cent lower than they were at the same time last year,” Mr Rees said.</span><br><br><span>“Add the new pressure of buyers cashing out of a strong southern market, to this renewed local demand, and we may soon find buyers struggling to find quality options. </span><br><br><span>“The Whitsundays has always offered an unbeatable lifestyle, but has been hamstrung by the lack of diverse employment options. </span><br><br><span>“For many it seems, the newfound acceptance of remote working in a post-lockdown world may have removed the last great barrier to living in this tropical playground.”</span></p></body></html>

Whitsundays proving to be a post-COVID-19 hotspot

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<p>The ANZ-Property Council Survey for the September quarter showed a modest improvement in sentiment across Australia’s property sectors, although it remains deep in negative territory as COVID-19 and the associated shutdown of economic activity cuts across the economy.</p>
<p>The impact of COVID-19 is immense. Nationwide, almost all respondents report being negatively hit.</p>
<p>Encouragingly, 60% of businesses expect the impact to improve over the coming quarter, however keep in mind that this survey closed on 1 July, before Melbourne’s shutdown was announced.</p>
<p>In the residential sector, overall sentiment remains negative across all states and territories.</p>
<p>Price expectations fell further into negative territory, while the employment outlook remains challenging. The outlook for construction and forward orders, however, are both now positive and improving, clearly helped by the HomeBuilder scheme.</p>
<p>In a special question on the Commonwealth Government’s HomeBuilder program, respondents within the residential sector were broadly positive about the scheme, with 60% reporting that it would have a positive impact on their business.</p>
<p>In commercial property, sentiment remains deeply negative across all sectors except industrial, where confidence is now back in positive territory. Sentiment in the office sector declined and was broadly flat in the tourism sector where confidence is the weakest.</p>
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