<p data-end="587" data-start="368">Queensland builder-developer MAYD has revealed the first look at its major North Kirra beachfront development, lodging amended plans that reduce the number of apartments and increase the proportion of larger residences.</p>

<p data-end="778" data-start="589">The project is planned across a substantial 4,742 sqm amalgamated site spanning seven lots at <a href="https://www.apartments.com.au/new-apartments/2-6-pacific-parade-bilinga-qld-4225">2-6 Pacific Parade</a> and 27-33 Golden Four Drive in Bilin​ga, directly opposite Nor​th Kirra Beach.</p>

<p data-end="907" data-start="780"><a href="https://www.apartments.com.au/developers/mayd-group">MAYD</a> secured the site for $32.5 million in 2025, in what was one of the Gold Coast's largest property transactions of the year.</p>

<p data-end="1052" data-start="909">The development will be delivered across two stages, with the first stage carrying an estimated gross realisation value of around $360 million.</p>

<p data-end="1311" data-start="1054">The latest amendments seek to reduce the overall apartment count and shift the project further toward the owner-occupier market, with larger residences designed for buyers wanting considerably more space than traditionally offered in a beachfront apartment.</p>

<p data-end="1451" data-start="1313">The residential mix will include townhomes, oversized two-bedroom apartments, substantial three-bedroom residences and four-bedroom homes.</p>

<p data-end="1676" data-start="1453">MAYD has appointed Cera Stribley to lead the architecture and interiors, with the Melbourne-based design practice drawing on the beachfront setting through a series of ocean-facing terraces and heavily landscaped balconies.</p>

<p data-end="1908" data-start="1678">Strong horizontal forms and curved balconies will define the exterior, with subtropical landscaping integrated throughout the building to soften the built form and increase the connection between the residences and the beachfront.</p>

<p data-end="2142" data-start="1910">The project will also include an extensive collection of resident wellness and lifestyle facilities, continuing the broader shift across the Gold Coast's luxury apartment market toward larger homes supported by resort-style amenity.</p>

<p data-end="2142" data-start="1910"><img alt="MAYD" data-entity-type="file" data-entity-uuid="d1bcbb05-e659-4b47-8bd4-1e595315e2ad" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-27%20at%202.05.03%E2%80%AFPM.png?VersionId=jj0XEud1X1DuLt7_KyElhjMdZGOXmLHP" /></p>

<p data-end="2308" data-start="2144">MAYD Founder Todd Mould said North Kirra was increasingly appealing to buyers attracted to the more established, lower-density character of the southern Gold Coast.</p>

<p data-end="2648" data-start="2310">"North Kirra presents one of the most compelling luxury residential opportunities currently emerging in Australia, combining absolute beachfront with the character and authenticity that buyers are increasingly seeking, and the same sense of tight-knit community that defined Burleigh and Currumbin perhaps 10 or 15 years ago," Mould said.</p>

<p data-end="2797" data-start="2650">"With Gold Coast Airport on its doorstep, it also offers a level of accessibility that broadens its appeal across almost every market demographic."</p>

<p data-end="2938" data-start="2799">The project comes as the southern Gold Coast continues to attract an increasing share of high-end apartment development and buyer activity.</p>

<p data-end="3216" data-start="2940">Kirra in particular has emerged as one of the region's more tightly held beachfront markets, with its relatively low-density character, established surf and hospitality scene and proximity to Gold Coast Airport differentiating it from the higher-density markets further north.</p>

<p data-end="3325" data-start="3218">Mould said those characteristics had informed the approach MAYD and Cera Stribley had taken to the project.</p>

<p data-end="3442" data-start="3327">"We've worked closely with Cera Stribley to create a vision that is deeply connected to its surroundings," he said.</p>

<p data-end="3662" data-start="3444">"Inspired by the coastline itself, the architecture has been shaped around space, privacy and resort-style living, creating a collection of homes that reflects the next generation of luxury on the southern Gold Coast."</p>

<p data-end="3818" data-start="3664">MOTIV Managing Director Carly Cottam, who has been appointed to market the project, said buyer attention had continued to move south along the Gold Coast.</p>

<p data-end="4076" data-start="3820">"Purchasers who may once have defaulted to Broadbeach, Main Beach or Surfers Paradise are increasingly recognising the value of a genuine beachfront location that offers lower density, strong amenity and a more established sense of community," Cottam said.</p>

<p data-end="4375" data-start="4078">"Kirra has a powerful combination of growing demand and genuine scarcity. Beachfront supply is inherently constrained, the area remains relatively low density, and buyers are increasingly placing a premium on locations that feel established, uncrowded and authentic rather than heavily developed."</p>

<p data-end="4503" data-start="4377">Cottam said the proximity to Gold Coast Airport was also proving increasingly important for interstate and second-home buyers.</p>

<p data-end="4741" data-start="4505">"Being minutes from Gold Coast Airport makes it particularly compelling for interstate buyers, frequent travellers and second-home purchasers who can access an authentic coastal lifestyle almost immediately after stepping off a flight."</p>

<p data-end="4910" data-start="4743">The acquisition takes MAYD's active development portfolio to more than $500 million, with the North Kirra project representing one of its largest undertakings to date.</p>

<p data-end="4951" data-start="4912">MAYD is targeting an early 2027 launch.</p>


Joel Robinson

First look at MAYD's North Kirra mixed-use precinct

<main data-perf-region="main">
<p data-end="600" data-start="394">Castle Hill, the longtime hub of the Hills District, has been one of the major beneficiaries of Sydney's Metro expansion, with improved connectivity helping drive continued population growth, development and buyer demand across the Hills District.</p>

<p data-end="733" data-start="602">But despite that growth, the suburb has seen relatively few major new apartment projects brought to market over the past 18 months.</p>

<p data-end="970" data-start="735">Hills District developer Reve Group is looking to fill that gap with <a href="https://www.apartments.com.au/new-apartments/nova-r-ve-castle-hill-2-garthowen-crescent-castle-hill-nsw-2154">Nova Rêve</a>, a major new mixed-use precinct on the corner of Garthowen Crescent and Old Castle Hill Road, a short walk from Castle Hill Metro Station and Castle Towers.</p>

<p data-end="970" data-start="735">[smartcode_project:default project_id=152737 project_image_fid=377679]</p>

<p data-end="1159" data-start="972">The project will comprise three residential towers alongside a hotel, restaurants, cafes and a skybar, more than 1,600 sqm of ground-floor retail and almost an acre of landscaped gardens.</p>

<p data-end="1357" data-start="1161">It represents the largest project undertaken by Reve Group, the development arm of the Kassis family, which has been building across the Hills District for more than 30 years through Kassis Homes.</p>

<p data-end="3400" data-start="3216">[smartcode_project:default project_id=152737 project_image_fid=377675]</p>

<p data-end="3400" data-start="3216">Nova Rêve also represents a significant step up from the family's first apartment development, Grand Rêve, which was delivered nearby on Garthowen Crescent.</p>

<p data-end="1664" data-start="1517">Grand Rêve introduced larger, house-like apartment layouts and premium inclusions including Wolf and Sub-Zero appliances to the Castle Hill market.</p>

<p data-end="1826" data-start="1666">Nova Rêve takes that approach to a precinct scale, combining the residential component with hospitality, retail and substantial public and resident landscaping.</p>

<p data-end="1826" data-start="1666">[smartcode_project:default project_id=152737 project_image_fid=377685]</p>

<p data-end="2045" data-start="1828">Reve Group Managing Director Sam Kassis said the project reflected the family's three decades of building in the Hills, which has evolved from trophy homes on quarter-acre blocks to larger-scale apartment development.</p>

<p data-end="2269" data-start="2047">"Grand Rêve was our first apartment project here and it showed us what this pocket of Castle Hill could be. Nova Rêve is the refinement of that idea: not just apartments, but a place the whole suburb can use," Kassis said.</p>

<p data-end="2430" data-start="2271">A key part of that approach is the hotel, which has been designed to operate as an amenity for the wider Castle Hill community rather than solely hotel guests.</p>

<p data-end="2606" data-start="2432">It will include restaurants, cafes, skybars and all-day dining, alongside conference and event facilities catering to business functions, community groups and private events.</p>

<p data-end="2724" data-start="2608">At ground level, more than 1,600 sqm of shops and cafes will open onto the surrounding streets and landscaped areas.</p>

<p data-end="2892" data-start="2726">Almost an acre of gardens designed by Land and Form Studios will run through the precinct, incorporating pathways, seating, barbecue areas and children's play spaces.</p>

<p data-end="2892" data-start="2726">[smartcode_project:default project_id=152737 project_image_fid=377680]</p>

<p data-end="3004" data-start="2894">Reve Group's Romio Georges said creating an active ground plane had been central to the planning of Nova Rêve.</p>

<p data-end="3214" data-start="3006">"There are gardens with pathways, barbecues, seating and play areas, shops and cafes opening onto the street, and a hotel with restaurants and a skybar that anyone in Castle Hill can walk into," Georges said.</p>

<p data-end="3400" data-start="3216">The project's elevated position on one of Sydney's highest ridgelines will also provide apartments with outlooks toward the Sydney skyline, surrounding parkland and the Blue Mountains.</p>

<p data-end="3400" data-start="3216">More than 80 per cent of the apartments will occupy corner positions, with Turner responsible for both the architecture and interiors.</p>

<p data-end="3670" data-start="3538">&nbsp;</p>

<p data-end="3670" data-start="3538">[smartcode_project_cta:default project_id=152737]</p>

<h3 data-end="3697" data-section-id="q3n5ak" data-start="3672">&nbsp;</h3>
</main>


Nova Rêve arrives as Reve Group bets on Castle Hill's next growth phase

<p>A collection of just 25 large-format apartments and penthouses overlooking Goodwin Park is entering the Coolangatta market, with <a href="https://www.apartments.com.au/new-apartments/marea-residences-coolangatta-27-27a-dixon-street-coolangatta-qld-4225">Maréa Residences</a> combining a low-density, residential-only approach with uninterrupted park and Pacific Ocean outlooks.</p>

<p>Located at 27 Dixon Street, Maréa comprises three and four-bedroom residences alongside a limited number of dual-level penthouses, with the project positioned between Goodwin Park and <a href="https://www.apartments.com.au/developments/coolangatta-qld-4225">Coolangatta</a>’s coastal precinct.</p>

<p>Construction has commenced, with completion currently estimated for late 2027. Three-bedroom residences are priced from $1.8 million.</p>

<p>[smartcode_project:default project_id=150999 project_image_fid=374005]</p>

<p>The project has been designed around its northern outlook across the park, with the building’s architecture, landscaping and material palette intended to establish a connection with the neighbouring green space. The residences have been configured to maximise natural light and views across Goodwin Park towards the ocean.</p>

<p>Inside, the material palette incorporates timber, stone and brushed brass, complemented by curved detailing and ambient lighting. Kitchens and bathrooms carry the same natural material approach, while residences also include basement parking, storage and lift access.</p>

<p>Maréa’s penthouses are arranged over two levels and include private pools, adding another layer to the project’s focus on larger-format apartment living. Across the development, residences are configured with three or four bedrooms rather than the broader mix of smaller apartment types commonly found in larger projects.</p>

<p>[smartcode_project:default project_id=150999 project_image_fid=374010]</p>

<p>Resident amenity is concentrated at rooftop level, where landscaped entertaining terraces and pools take advantage of elevated views across Coolangatta and the Pacific Ocean.</p>

<p>The project has so far been particularly well received by local owner-occupiers and downsizers, according to Urban Activation Property Sales and Marketing Director Matt George, with the residential-only format, construction quality and northern park outlook among the features resonating with purchasers.</p>

<p>“The uninterrupted northern aspect overlooking Goodwin Park has been a key point of difference, with buyers attracted to the sense of serenity and open space the park provides, while still enjoying easy access to the ocean and being within walking distance of the lifestyle and amenities Coolangatta has to offer,” George said.</p>

<p>[smartcode_project:default project_id=150999 project_image_fid=374002]</p>

<p>“The combination of high-quality construction, a residential-only building, park outlook and proximity to the beach has resonated strongly with the local downsizer market.”</p>

<p>The Dixon Street address is within walking distance of Coolangatta Beach and the broader southern Gold Coast coastline, including the surf breaks at Snapper Rocks and Kirra. Coolangatta’s cafés, restaurants and retail are nearby, while Gold Coast Airport is also within close proximity.</p>

<p>[smartcode_project_cta:default project_id=150999]</p>


Maréa Residences brings parkside apartments to Coolangatta

<p data-end="535" data-start="324">Melbourne developer PDG has secured Victorian Government approval for its $1.5 billion Southbank development <a href="https://www.apartments.com.au/new-apartments/the-one-1-queens-bridge-street-southbank-vic-3006">The One</a>, clearing the way for the long-dormant riverfront site opposite Crown to finally be developed.</p>

<p data-end="717" data-start="537">The Minister for Planning has approved the project at 1-29 Queens Bridge Street, with the Department of Transport and Planning issuing the planning permit following its assessment.</p>

<p data-end="918" data-start="719">The approval will allow PDG to develop the prominent 5,059 sqm site with a major mixed-use tower comprising premium apartments, including branded residences, a luxury hotel and boutique office space.</p>

<p data-end="1131" data-start="920">PDG acquired the site in late 2024, with its position directly opposite Crown's main entrance and near Melbourne's Arts Precinct making it one of Southbank's most significant remaining development opportunities.</p>

<p data-end="1131" data-start="920"><img alt="PDG" data-entity-type="file" data-entity-uuid="3933013e-6332-4386-b9be-089df05caf17" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-27%20at%209.29.22%E2%80%AFAM.png?VersionId=sITIgBqDL0N3VNSMwWEmF5UA.uvcsRyu" /></p>

<p data-end="1318" data-start="1133">Designed by COX in collaboration with ODO and PDG, the tower's architecture draws on the movement of the Yarra River, with six vertical pleats running the height of the sculpted facade.</p>

<p data-end="1433" data-start="1320">The project will also see the heritage-listed Queens Bridge Hotel restored and incorporated into the development&nbsp;with new hospitality and public uses, including a rooftop venue.</p>

<p data-end="1658" data-start="1591">A significant component of The One will be its residential amenity.</p>

<p data-end="1864" data-start="1660">More than 5,000 sqm of resident facilities will be delivered across a single level, making it one of the largest consolidated residential amenity offerings proposed in an Australian apartment development.</p>

<p data-end="2011" data-start="1866">The planning approval also incorporates a major upgrade of Queensbridge Square, which PDG will deliver in partnership with the City of Melbourne.</p>

<p data-end="2011" data-start="1866"><img alt="PDG" data-entity-type="file" data-entity-uuid="73167fcd-1031-4b6f-a408-a064cfe45ed1" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-27%20at%209.29.17%E2%80%AFAM.png?VersionId=Pf1AEWxw6SNmBqR0zQW5lyEze.MtxgFp" /></p>

<p data-end="2191" data-start="2013">The existing square will be revitalised as a new civic and pedestrian space along the Yarra River, strengthening the connection between the project, Southbank and the riverfront.</p>

<p data-end="2365" data-start="2193">PDG Founder and Managing Director Vince Giuliano said the approval represented a major milestone for a site which has remained largely underutilised for more than 15 years.</p>

<p data-end="2473" data-start="2367">“This is the most significant Planning Permit approval Melbourne has seen in recent years,” Giuliano said.</p>

<p data-end="2775" data-start="2475">“For more than 15 years, this site has remained underutilised. This approval enables us to deliver a project that will contribute meaningfully to the revitalisation of Southbank, restore and reactivate an important heritage building, and create a new civic and hospitality destination for Melbourne.”</p>

<p data-end="2943" data-start="2777">The latest approval follows an earlier planning permit issued by the City of Melbourne covering demolition works across part of the site at 9-29 Queens Bridge Street. Those demolition and early works are already underway.</p>

<p data-end="3145" data-start="3001">PDG has also started generating early interest in the residential component from owner-occupiers ahead of a planned public launch in early 2027.</p>


PDG secures approval for $1.5bn Southbank apartment development, The One

<p>Local developer Harridan is seeking to turn its Woolloongabba apartment project into the first stage of a broader transformation of Burke Street, using a new 16-storey mixed-use building to establish a greener pedestrian connection toward the rapidly evolving Boggo Road transport and knowledge precinct.</p>

<p>The South East Queensland developer has filed plans for 154 apartments on the <a href="https://www.apartments.com.au/new-apartments/4-burke-street-woolloongabba-qld-4102">southern side of Burke Street</a>, where its proposal has been designed alongside a wider vision by LatStudios for the street.</p>

<p>That vision positions the southern side of Burke Street for buildings of 15 storeys and above, while envisaging lower-rise development of up to five storeys on the northern side to transition into Woolloongabba's existing character housing. It also proposes wider pedestrian verges, deep planting, new street trees and upgrades to the pedestrian approach to Boggo Road Station.</p>

<p>The Harridan development itself has been designed by Brisbane-based Arqus Design and will comprise 154 apartments across 16 storeys. The mix is weighted heavily toward two-bedroom apartments, with 121 proposed alongside 10 one-bedroom and 23 three-bedroom residences. There will typically be around 14 units per floor.</p>

<p>A lower-ground car park and three podium levels will accommodate 156 resident parking spaces, along with visitor and commercial parking. There will also be 154 resident bicycle spaces and 40 visitor bicycle parks.</p>

<p>&nbsp;</p>

<p>Harridan is a family-owned developer and part of the Holmwood Highgate Group, with more than three decades of development activity across South East Queensland. Its portfolio spans residential, commercial and industrial property, with current residential projects including Riverbank on Byron in Bulimba, Esperance Residences in Carina and The Precinct at Kinross Road in Thornlands.</p>

<p>Wooloongabba has been popular for apartment developers, particularly since the announcement of the 2032 Summer Olympics games in Brisbane.</p>

<p>While there have been a lot of development applications, it has failed to materialize into real supply.&nbsp;</p>

<p>Sarazin has been the major player in the area. They are under construction at Murcia Residences, on the fringe of East Brisbane and Woolloongabba. They have just launched <a href="https://www.apartments.com.au/new-apartments/the-stanley-residences-woolloongabba-8-trafalgar-street-woolloongabba-qld-4102">The Stanley Residences</a>, in Woolloongabba on Trafalagar Street. They also have Nuage coming soon on the nearby <a href="https://www.apartments.com.au/new-apartments/nuage-woolloongabba-14-wellington-road-woolloongabba-qld-4102">Wellington Road</a>.</p>


First look: Harridan plans Burke Street transformation beside Boggo Road transport hub

Housing Markets

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<div>The ONS released its latest data in the UK which showed that inflation or CPI has dug in obdurately at zero year-on-year (a 0.4 reading drops off next month too, so we could be heading negative), suggesting that interest rate hikes are as far as way as they ever were, even after seven years at the effective zero lower bound.</div>
<div> </div>
<div>The latest house prices indices from the ONS for July 2015 showed prices rising over the past year in England (+5.6%) with the mix-adjusted average house price in England rising to an all-<span>time high of <span>£299,000.</span></span>
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<div><span><span><br>House prices in England have busted through record highs and are now +19.1% from their pre-downturn peak of January 2008 in seasonally adjusted terms.</span></span></div>
<div><span><span> </span></span></div>
<div><span>By comparison growth over the past year has been flat in Wales (+0.3%) and negative in Scotland (-1.3%), while house prices in Northern Ireland remain a whopping -42.3% below their crazy August 2007 peak levels in seasonally adjusted terms. Woosah.</span></div>
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<div>
<span>London house prices continued to power on to a new high of </span><span>£525,000 (not seasonally adjusted), while annual price gains have been driven largely by the areas immediately surrounding London, namely the East (+8.3%) and the South East (+6.7%) of England. </span>
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<div>
<div>In short, since the January 2008 peak if you've owned property in London (+46.2% in seasonally adjusted terms), or in nearby cities such as Cambridge or Oxford, then you have continued to do exceptionally well. </div>
<div> </div>
<div>House prices in seasonally adjusted terms are also up reasonably strongly in the areas surrounding London such as the South East (+20.0%) and East (+18.8%) since the preceding January 2008 peak.</div>
<div> </div>
<div>Elsewhere prices are now rising again but in real terms are generally well below previous peaks, although in nominal terms 7 of the 9 regions have finally recovered to hit new highs.</div>
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<div><img src="/images/2015/09/17/HPI.jpg" alt=""></div>
<div> </div>
<div><span>At a national level the UK house price index sits at 216.9 which is +16.9% higher than the pre-downturn peak of 185.5 seen in January 2008, with London and the South East accounting for the bulk of the increase. </span></div>
<div><span> </span></div>
<div>
<p><span><em>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>.</em><br></span></p>
<p><em>His latest book is <a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx" target="_blank" rel="nofollow">Four Green Houses and a Red Hotel</a>.</em></p>
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pwargent-M4siyDbqQY

England house prices power on: Pete Wargent

<html><body>
<p><span style="line-height: 1.3em;">GUEST OBSERVER</span></p>
<p><span style="line-height: 1.3em;">The timely indicators of local economic activity have generally been improving in recent months. Business conditions and confidence have been on a rising trend. Jobs growth has been strong and forward-looking indicators suggest that hiring intentions have been improving. Mining investment has been trending lower, but growth is rebalancing towards housing and the services sectors. As non-mining sectors are more labour-intensive than mining, this is creating jobs, even if it is not a big support for business investment. </span></p>
<p><span style="line-height: 1.3em;">These local developments have helped to make the RBA more comfortable with its policy setting over the past month or so. The lower AUD is also now providing more support to Australia’s rebalancing act. The 15% fall in the AUD trade-weighted index over the past year means the local currency is now close to a level the RBA deems to be ‘fair value’. </span></p>
<p><span style="line-height: 1.3em;"><br></span><span style="line-height: 1.3em;">However, offshore risks are brewing. Falls in China’s stock prices, adjustments to the RMB’s fixing mechanism and weaker Chinese indicators have seen increased market volatility as global investors become more concerned about China’s growth outlook. Commodity prices have fallen, with oil and copper prices declining to new six-year lows in recent weeks. Markets have also sold off on concerns about what a rise in the Federal Reserve’s policy rate before the end of the year could mean for emerging economy growth. </span></p>
<p><span style="line-height: 1.3em;"><br></span><span style="line-height: 1.3em;">These global events are likely to be the focus of the RBA’s meeting next week. Importantly, though, the RBA’s recent statements have been flagging that an increase in market volatility was expected as the Fed got closer to lift-off. Weak commodity prices also do little to change the already weak outlook for new mining investment. </span></p>
<p><span style="line-height: 1.3em;">In next week’s statement we expect the RBA to note that it is too early to know the impact of recent market volatility on global growth. We expect the RBA’s cash rate to be held steady at 2.00% next week and the statement to contain little guidance about the likely future direction of policy. </span></p>
<p><a href="/images/2015/08/28/Screen%20Shot%202015-08-28%20at%2012.36.56%20PM.png" target="_blank"><span style="line-height: 1.3em;">Click to enlarge</span></a></p>
<p><span style="line-height: 1.3em;"><img src="/images/2015/08/28/Screen%20Shot%202015-08-28%20at%2012.36.56%20PM.png" alt="" width="640" height="290"></span></p>
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<p><span>Local economic indicators have been positive </span></p>
<p><span>Australia’s rebalancing act is running its course. A strong upswing in housing prices and residential construction is now combining with the next stage of the rebalancing act: an upswing in the services sectors. The clearest sign of the on-going rebalancing of growth is the upswing in jobs growth, which is being driven by employment in the household and business services sectors (Chart 1). As a result, the unemployment rate has stabilised at around 6-6.25% over the past year. </span></p>
<p><span>Surveys of business conditions also show that growth is shifting away from the mining to non-mining sectors (Chart 2). We expect the services sector to be the next driver of growth (see </span><span>Australia’s next growth driver: The rise of the services sector</span><span>, 10 July 2015). Recent falls in the AUD are helping to support the rebalancing act. Indeed, the 15% fall in the AUD trade-weighted index over the past year has brought the currency to a level that is making the RBA more comfortable (see </span><span>Downunder Digest: Lower AUD is helping Australia's rebalancing act</span><span>, 21 August 2015). </span></p>
<p><span>China’s economic indicators have weakened </span></p>
<p><span>Although local conditions have been improving, timely indicators suggest that China’s growth has continued to slow. The Caixin manufacturing PMI fell to its lowest level since 2009 in August (Chart 3). </span></p>
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<p><span>Matching the weakness in manufacturing activity has been a further slowdown in investment in the manufacturing industry (Chart 4). </span></p>
<p><span>Although housing sales and prices have been lifting in recent months, this is yet to translate into a pick-up in housing investment, which is growing at its slowest pace since early 2009. </span></p>
<p><span>Growth is getting support from better conditions in non-manufacturing industries and continued solid growth in infrastructure investment, but growth in overall fixed asset investment has slowed.</span></p>
<p><span>Weaker growth indicators combined with recent falls in stock prices and changes in the way the People’s Bank of China manages China’s currency have all contributed to a marked increase in financial market volatility recently (discussed further below). China’s authorities have responded to recent concerns about weaker growth with further cuts to interest rates and the reserve requirement ratio. More investment in infrastructure is also expected to be a key support for growth. For more on HSBC’s view on China see HSBC China Economics and FX Strategy, 25 August 2015.</span></p>
<p><span>China and an expected Fed move are driving market volatility </span></p>
<p><span>Together, developments in China and concerns about the impact of a possible increase in the Federal Reserve’s policy rate, expected before the end of the year, have contributed to a significant increase in financial market volatility in recent weeks. Commodity prices have fallen particularly sharply, with copper and oil prices both falling to six-year lows (Chart 5). Iron ore prices have held up better, having fallen sharply earlier in the year. </span></p>
<p><span>Global equity markets have also seen sharp falls and a substantial increase in volatility. Western equity markets have been volatile, as investors assess the possible impact on global growth of weaker growth in emerging economies, which are under pressure from both falling commodity prices and an expected rise in US interest rates. Asia’s markets have been particularly volatile, as concerns about China’s growth and the Federal Reserve weigh on the region (Chart 6). </span></p>
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<p><span>The RBA’s tactics and commentary </span></p>
<p><span>We expect the RBA’s meeting to be uneventful, with the central bank likely to remain comfortable that the economy is continuing to grow, that growth is creating sufficient jobs to keep the unemployment rate steady, and that the AUD is now at a level where it is helping to support the rebalancing of growth. The RBA is likely to acknowledge the recent increase in volatility in financial markets; however, the RBA is also to note that it is too early to determine the impact of these developments on the outlook for global growth. </span></p>
<p><span>We remain of the view that the most likely course for Australia’s monetary policy is that the cash rate remains at its current level in coming quarters. This is particularly the case as the AUD is now providing more support to local growth than previously. However, it does seem likely that the recent developments, particularly the fall in commodity prices, do increase the downside risks to Australia’s growth and, therefore, increase the possibilities that further monetary policy easing may be needed. </span></p>
<p><a href="/images/2015/08/28/Screen%20Shot%202015-08-28%20at%2012.42.16%20PM.png" target="_blank"><span>Click to enlarge</span></a></p>
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<p><span><em><span><a href="https://www.about.hsbc.com.au/hsbc-in-australia/management-team" target="_blank">PAUL BLOXHAM</a> IS CHIEF ECONOMIST (AUSTRALIA AND NEW ZEALAND) FOR HSBC. </span></em></span></p>
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jchancellor-FAypfDUnLy

Housing investment growing slowest since early 2009: HSBC's Paul Bloxham

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<p><span>In spite of high growth in Sydney and Melbourne, growth in Australia as a whole is significantly lower than other housing markets around the world – according to the latest Knight Frank Global House Price Index.</span></p>
<p><span>Onthehouse.com.au data reveals that the annual median capital growth rate for Australia’s houses and units was just 5.7% and 5.6% </span><span style="line-height: 1.3em;">respectively. It is likely that nationally, houses and units are similar in their growth rate because there are more units in dense, high growth areas.</span></p>
<p><span>The two significant resource markets – Darwin and Perth – have showed poor performance over the last year. Houses in Darwin fell -3.74% in the last year, from $575,000 in May 2014 to $554,000 in May 2015.</span></p>
<p><span>The deepening downward trend for these markets can be seen below.</span></p>
<p><a href="/images/2015/07/24/G3_Resource_State_Trends.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2015/07/24/G3_Resource_State_Trends.jpg" alt=""></p>
<p><span>The differing trends represent the persistent, two tiered housing market that makes growth across the board seem stable. The Iron Ore price remains low at just US$60 per dry metric tonne, a commodity which averaged over US$100 per unit this time last year. Little has been done to create sustainable employment following low resource prices, and the end of the construction phase in the mining boom.</span></p>
<p><span>It is therefore misleading to look at data in such aggregation. The two tiered housing market makes it difficult for policy makers and Reserve Bank to influence housing growth.</span></p>
<p><span>With a boom on the south east coast that sets a higher deposit hurdle, and a bust in the resource states that has an unclear future, the state of the Australian housing market seems dismal. However, sustainable house and unit growth are an indicator of the strength of the economy. Though we present a summary of statistics by city metropolitan regions, there are suburbs with idiosyncrasies that make them a promising for investment. These include diverse employment opportunities, planning regulation, quality properties and affordability. Exploring such places outside of the major cities could present a more accessible growth or high yield strategy.</span></p>
<p><span><em><span>ELIZA OWEN</span> is a market analyst for <a href="https://www.onthehouse.com.au/" target="_blank">Onthehouse.com.au</a>.</em></span></p>
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