Lower North Shore developer <a href="https://www.apartments.com.au/developers/abadeen-group">Abadeen</a> has secured development approval for its ultra-luxury residential project on the <a href="https://www.apartments.com.au/new-apartments/34-burran-avenue-mosman-nsw-2088">dress circle Burran Avenue</a>.

The project, just&nbsp;50 metres from Balmoral Beach within Mosman’s prestigious Golden Triangle, will commence construction in early 2026,&nbsp;following the successful completion of its nearby Hampden Mosman project.

Lodged in April 2025 and approved in September 2025, the development will comprise three whole-floor residences, each designed to capture panoramic harbour views through Sydney Heads.

<img alt="34 Burran Avenue, Mosman" data-entity-type="file" data-entity-uuid="7f4c7816-0ac8-4ef7-be0a-8ef23b693b68" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/BURRAN%20EV01%20R04%20option%201%20%281%29.jpg?VersionId=gVzI8pT6_K59Nhzaz0FLEvY6Kj9Kc8Fg" />

Set on an elevated 550 sqm corner site at the junction of Burran Avenue and Stanton Road, the building has been designed to sit within Balmoral’s natural slope. The façade mixes stone and metal cladding with angular forms, while oversized terraces and full-height sliding doors create a connection between interior living spaces and outdoor entertaining areas.

The delivery team from Abadeen’s Hampden Mosman project, which includes construction company Reform Projects and interiors company Mathieson, has been retained to bring the same level of execution and craftsmanship to Burran Avenue.

<a href="https://www.apartments.com.au/architects/platform-architects">Platform Architects</a> has been appointed project architect, bringing extensive experience from recent luxury residential projects in Manly, Fairlight and Freshwater.

&nbsp;

Justin Brown, Executive Chairman and Founder of Abadeen, said sites of this calibre, this close to Balmoral, are incredibly rare.

“Burran Avenue is an extraordinary site; its location, its scale and its outlook make it truly one of a kind. Receiving DA approval marks an exciting milestone for Abadeen."

"We’re proud to be moving forward with an exceptional team to deliver a project that will set a new standard for ultra-luxury living on Sydney’s Lower North Shore. Construction is planned to commence in early 2026, and interest is already strong from discerning local buyers who recognise the uniqueness of this address."

Brown anticipates prices will set new Mosman benchmarks above $20 million. Sales are expected to launch in March 2026.

Joel Robinson

Abadeen approved for Mosman's priciest apartments

Lifestyle developer <a href="https://www.apartments.com.au/developers/gurner">GURNER™ Group</a>, in partnership with Costa Property Group, has announced plans to reimagine Cunningham Pier in Geelong, one of Victoria's most recognisable heritage landmarks.

The announcement follows the City of Greater Geelong’s release of its Draft Geelong Waterfront Master Plan, which seeks to revitalise the waterfront with new energy, tourism, and investment. GURNER and Costa Property Group’s vision aligns with the Council’s ambitions to create a vibrant, connected, and economically powerful precinct for the community.&nbsp;

The future of Cunningham Pier will draw inspiration from Sydney Harbour’s luxury waterfront residences through to Dubai’s sculptural pier-edge towers, blending architectural excellence with &nbsp;resort-style living, hospitality, and public amenity.&nbsp;

The concept, described as “Saint Moritz on the Sea”, is envisioned to include:&nbsp;

<ul>
	<li>Six-star hotel accommodation and services&nbsp;</li>
	<li>World-class restaurants, bars, and public spaces&nbsp;</li>
	<li>High-end residential offerings&nbsp;</li>
	<li>Entertainment and cultural venues&nbsp;</li>
	<li>Potential cruise ship port facilities, integrating Geelong into the global travel network&nbsp;</li>
</ul>

The transformative project aims to become a magnet for tourism, investment, and innovation, while &nbsp;ensuring continued public access and connection to Corio Bay’s pristine waterfront.&nbsp;

Cunningham Pier has been operated by Costa Property Group for more than 15 years, with the City of Greater Geelong expressing strong support for strategic commercial partnerships that unlock &nbsp;tourism-led economic development for the region’s fast-growing population.&nbsp;

Tim Gurner, Founder &amp; Executive Chairman, GURNER™ Group, said the project is a "once-in-a-generation opportunity to put Geelong on the global map," adding that their version will be of what icons like the Opera House, Story Bridge or Empire State Building have done for other great cities.

“We’ll be working hand-in-hand with the Mayor, Council, the local community, and State Government to deliver something truly iconic that positions Geelong on the world stage. This project brings together everything we’ve built our brand on – world-class design, hospitality, &nbsp;lifestyle, and experience – all in one place. From six-star hotels and restaurants to the possibility of a &nbsp;new cruise ship terminal and luxury residences, the vision is extraordinary.”&nbsp;

City of Greater Geelong&nbsp;Mayor Stretch Kontelj said he welcomes the "bold and inspiring vision reimagining our beloved Cunnigham Pier as a global destination."

"This ambitious plan and the opening of Nyaal Banyul Geelong Convention and Event Centre next year have the potential to take our already world-class waterfront to even greater heights.”

Sydney Harbour, Dubai pier towers, to influence Gurner's Cunningham Pier, Geelong development

<a href="https://www.apartments.com.au/architects/bates-smart">Bates Smart</a> is one of Melbourne's longest standing architecture firms.

Founded in Melbourne in 1853 by Joseph Reed, the firm began as Reed &amp; Barnes and has evolved through various partnerships before adopting the Bates Smart name in the 20th century. With a continuous presence spanning more than 170 years, the practice has played a pivotal role in shaping Melbourne’s architectural identity.

In the 19th century, Bates Smart designed several of Melbourne’s enduring landmarks, including the Royal Exhibition Building (1880), a UNESCO World Heritage site, and the Melbourne Town Hall. The firm’s influence continued into the 20th century with notable works such as Ici House (1958), considered Melbourne’s first modern skyscraper and a milestone in post-war Australian architecture.

One of their landmark designs was&nbsp;The First Church of Christ, Scientist, at 336-340 St Kilda Road. The building, which is listed on the Victorian Heritage Register, was designed by Bates, Peeble and Smart with construction completed in 1922. Architecturally, the building is significant as a rare example of early twentieth century classicism applied to a religious building. Historically, the building is significant as the first church of the Christian Science movement.

Melbourne developer Time &amp; Place decided to bring Bates Smart back to the area to design their next residential apartment project, Park Modern.

[smartcode_project:default project_id=138453 project_image_fid=2138]

<a href="https://www.urban.com.au/new-apartments/park-modern-south-melbourne-1-middleton-lane-south-melbourne-vic-3205">Park Modern</a>, on one of the largest island sites on the Melbourne CBD fringe, bordered by Dorcas Street, Wells Street, and Middleton Lane, will comprise two sculptural towers. It is being positioned as a design-forward response to evolving owner-occupier preferences in the Domain precinct.

Tim Price, Director at <a href="https://www.apartments.com.au/developers/time-place">Time &amp; Place</a>, says&nbsp;Bates Smart have got a footprint on this city, probably like no other architect.

"It’s a really nice kind of next chapter story, that they created from a design perspective so long ago," Price told Apartments.com.au.

Park Modern will be the third time Time &amp; Place has worked with Bates Smart, having successfully designed and delivered Collins House and Opera on St Kilda Road together.

The brief focused on creating a built form that would feel contextually appropriate while offering a contemporary evolution of inner-city apartment living.

[smartcode_project:default project_id=138453 project_image_fid=2137]

The focus for Park Modern is squarely on owner-occupiers.

“It’s not always about downsizing," Price says.

"Sometimes it’s just about creating a space which is easily maintained, lock up and leave, reflecting people’s aspirations, whether they’re entertainers, big dining room spaces, big open terraces, they’re important parts of any design consideration.”

The building includes a mix of one, two and three-bedroom apartments, as well as penthouses, with layouts and floor plans designed to suit a broad demographic. The architecture has been shaped to capture&nbsp;view corridors to the Botanic Gardens, Port Phillip Bay and the CBD skyline.

Each apartment has been oriented to maximise natural light and provide a clear outlook, elements often cited by owner-occupiers as key criteria.

[smartcode_project:default project_id=138453 project_image_fid=351806]

Rather than defaulting to a generic luxury offering, the amenity strategy at Park Modern reflects specific insights into how residents want to live. The ground floor will include co-working areas, wellness facilities, and a concierge-led lobby that blends indoor and outdoor design cues.

“Wellness has become a more thoughtful consideration, not just gyms or lap pools, but things like magnesium plunge pools, saunas, daybeds, and studio spaces for Pilates and the regular cardio workout,” says Price.

One notable inclusion is a substantial porte-cochère, a covered vehicle drop-off zone integrated into the site plan. It’s a feature rarely seen in inner-urban developments and speaks to the team’s emphasis on ease of arrival and departure for residents and guests.

A display suite for Park Modern is now open by appointment, giving prospective buyers an early look at the project.

[smartcode_project_cta:default project_id=138453]

100 years on, Bates Smart returns to South Melbourne's Domain Precinct to design Park Modern

One of the most significant beachfront projects ever proposed for the small suburb of Miami on the Gold Coast, has taken a major step forward.&nbsp;Monaco Property Group has secured approval for <a href="https://www.apartments.com.au/new-apartments/nalu-miami-122-marine-parade-qld-4220">NALU</a>, a $500 million development comprising just 45 ultra-luxury residences on the iconic former Nobby’s Outlook site.

Acquired by <a href="https://www.apartments.com.au/developers/monaco-property-group">Monaco Property Group</a> in 2024 for $70 million, the rare 7,238 sqm Marine Parade parcel boasts more than 80 metres of uninterrupted ocean frontage.

With approvals now secured, Monaco Property Group will move NALU into its delivery phase. The project has been designed by&nbsp;<a href="https://www.apartments.com.au/architects/bda-architecture">BDA Architecture</a>, who collaborated with&nbsp;<a href="https://www.apartments.com.au/landscape-architect/ldg-landscape-architecture">LDG Landscape Architecture</a> and <a href="https://www.apartments.com.au/interior-designers/tom-mark-henry">Tom Mark Henry Interiors</a>&nbsp;to create the low-rise building, its landscaping, and interiors.

<img alt="NALU" data-entity-type="file" data-entity-uuid="3fdf578e-7cc4-4b17-bbc2-ba853522a5d8" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/122_Marine_Parade_002.jpg?VersionId=zFhJWVzX0jmCO.5iIIxNELImHesTjWS4" />

Residences will range from 237 sqm layouts to beachfront homes exceeding 1,400 sqm.

At the heart of the project is a 2,200 sqm lifestyle precinct with a bathhouse, fitness centre and resort-style pool, elevated by a concierge service.

Jonathan Grasso, Co-Founder of Monaco Property Group, said the council approval marks an exciting milestone for NALU, which will launch in Q1 2026.

“The project will now progress toward construction, working alongside our world-class collaborators to bring NALU to life," Grasso said.

“Our vision is to create a legacy project for the Gold Coast, one that not only honours the history of the site but also elevates its future, setting a new standard for coastal living in Australia. NALU embodies the pinnacle of design and location and will stand as an enduring icon of prestige and liveability.”

<img alt="NALU" data-entity-type="file" data-entity-uuid="6ae8545b-87ca-4dea-90ed-ac273ec6515d" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Image7.jpg?VersionId=Wnmie4bu3x2WQonnG4Pwmh39NdZVKeOV" />

Originally developed in the 1970s as Nobby’s Outlook and later refurbished in 2019 as Nalu, the property has long held a place in the local community’s coastal identity. The new vision will build on this legacy, creating luxury residences that capture ocean views while fostering a lifestyle defined by wellness, connection, and ease.&nbsp;

Beyond its residential offering, NALU will deliver significant economic benefits to the Gold Coast through job creation and opportunities for local suppliers and contractors. Construction is anticipated to commence in early 2026, with completion expected in Q3 2028.

Monaco Property Group approved for $500 million NALU apartments on Miami beach

The most elevated residential tower in Palm Beach, <a href="https://www.apartments.com.au/new-apartments/corallo-palm-beach-5-palm-beach-avenue-palm-beach-qld-4221">Corallo</a>, has officially launched this week, however only a handful of buyers will have an opportunity to buy in to the 17-storey project.

The $200 million mixed-use project includes ground floor dining and retail and is considered so valuable its developer, <a href="https://www.apartments.com.au/developers/changfa-group">Changfa Group</a>, will be staging its release of one-, two- and three-bedroom apartments and penthouses to the market.

[smartcode_project:default project_id=112194 project_image_fid=806]

<a href="https://www.apartments.com.au/project-marketer/colliers">Colliers</a> International, Director, David Higgins, said the development’s location just metres from the beach on the corner of Palm Beach Avenue and the Gold Coast Highway influenced the sculptural design by the acclaimed Plus Architecture studio.

“<a href="https://www.apartments.com.au/developments/palm-beach-qld-4221">Palm Beach</a> locals understand the rare opportunity here at Corallo, particularly being the tallest building in the suburb and its proximity to the beach and local restaurants, and they’ve represented the bulk of pre-launch enquiries,” Higgins said.

“The orientation of the apartments captures views of the coastline from Surfers Paradise to Currumbin, and the diversity of floor plans and apartment types provide an exceptional level of choice.

“The first release includes just 59 one-, two and three-bedroom apartments and two half-floor penthouses, with flexible use designed to appeal to both owner-occupiers and investors."

&nbsp;

[smartcode_project:default project_id=112194 project_image_fid=799]

In addition to the ground floor amenity, residents will also have access to a private dedicated wellness level offering 734 sqm of resort-style amenities including a pool, cold plunge, wet deck, steam room, sauna, gym, day bed, fire pit, barbecue area, dining area and yoga/stretch deck.

The project is located within walking distance of Tallebudgera Creek, Burleigh Heads village, Currumbin Alley and Palm Beach Currumbin High School. The Gold Coast Airport is under 10 minutes away.

[smartcode_project:default project_id=112194 project_image_fid=814]

Higgins said Palm Beach remained a hotly contested suburb for home buyers, with prices doubling in the past five years.

“What makes Corallo so appealing to the local market is the diversity of apartment types and pricing, with one-bedroom apartments starting from $841,000 and two-bedroom apartments starting from $1.34 million,” he said.

“The ground floor retail and dining offering will further expand on Palm Beach’s village atmosphere and create a meeting place for locals, and those opportunities for connection are highly valued.”

&nbsp;

[smartcode_project:default project_id=112194 project_image_fid=807]

The on-site sales display, which includes a fully fitted kitchen, bathroom and bedroom, will be open until early works commence in Q1 2026. Each residence at Corallo will feature premium finishes including natural stone, artisanal brickwork, and warm copper accents.

Changfa Group has a two-decade history of delivering premium developments in Australia and internationally, having recently completed its collection of premium townhomes at Lyra, Hope Island, as well as apartment projects in Leichhardt, Carlingford, and Chatswood in New South Wales.

[smartcode_project_cta:default project_id=112194]

$200 million Corallo Palm Beach launches with limited apartment release

Consumer Finance

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EXPERT OBSERVER
The last time consumer prices fell by 1.9 per cent over a quarter – that is, over a three month period – was in 1931.
Back then it was the ‘C series index’ rather than the ‘consumer price index’. Just like today, those times – back in the late 1920s and early 1930s – were remarkable, being the time of a global depression. But fortunately policymakers today have responded differently to back then, applying significant fiscal and monetary stimulus to limit the length and severity of the economic downturn.
So prices are tipped to rebound in the current quarter. The last thing anyone wants to see is deflation – a sustained period of falling prices – because that could see the current economic downturn being extended.
Prices fell sharply in the June quarter for a number of reasons – principally, low rents, subsidised child care, free preschool and lower petrol prices. The best guide to underlying prices is the ‘trimmed mean’. This measure shows prices down 0.1 per cent in the quarter to be up 1.2 per cent over the year. So low annual inflation, not deflation.
In the current quarter – the September quarter – consumer prices are expected to lift from the lows. The headline rate of inflation is tipped to lift 1.4 per cent, pushing the annual growth rate up to 0.4 per cent. The annual trimmed mean is expected near 1.4 per cent.
While deflation is not expected to take hold, there is no room for complacency. Consumers should be given every encouragement to keep spending. If consumers start holding off on purchases on the hope of cheaper prices, then we will have a problem – a problem that would require more fiscal and monetary stimulus being applied.
The Reserve Bank has a long-run series on inflation back to 1922. Data can be found here:
<a href="https://www.rba.gov.au/inflation/measures-cpi" target="_blank">https://www.rba.gov.au/inflation/measures-cpi.html</a>
What do the figures show?
Overall result: The Consumer Price Index – the main measure of inflation in Australia – fell by 1.9 per cent in the June quarter (consensus: -2.0 per cent). It was the biggest ever quarterly fall for the CPI (since 1948). The last time consumer prices fell as much (C series index) was in September quarter 1931. In seasonally adjusted terms the CPI fell by 2.0 per cent in the June quarter. The annual rate of headline eased from a 5½-year high of 2.2 per cent to -0.3 per cent – the lowest result since September quarter 1997.
Underlying measures: The Reserve Bank monitors three measures to derive the underlying inflation rate. The trimmed mean fell by 0.1 per cent in the June quarter (1.2 per cent annual); the weighted median rose by 0.1 per cent (1.3 per cent annual) and the CPI less volatile items fell by 1.3 per cent (0.4 per cent annual). Overall, underlying inflation was flat in the quarter and rose by around 1.25 per cent over the year. Market goods and services less volatile items rose by 0.3 per cent in the quarter to be up 2.0 per cent on the year.
Capital cities: Sydney -2.3 per cent in the quarter (annual -1.0 per cent); Melbourne -0.8 per cent (+0.3 per cent); Brisbane -2.2 per cent (-1.0 per cent); Adelaide -1.0 per cent (+0.8 per cent); Perth -1.2 per cent (+0.1 per cent); Hobart -1.4 per cent (+1.3 per cent); Darwin -2.5 per cent (-1.8 per cent); Canberra -2.3 per cent (-0.6 per cent).
Main Negative Contributors:
The most significant price falls in the June quarter were child care (-95.0 per cent), automotive fuel (-19.3 per cent), preschool and primary education (-16.2 per cent) and rents (-1.3 per cent).
Child care: The ABS reported, “A fall of 95.0 per cent in child care was the main contributor due to free child care during the quarter. Excluding the impact of child care, this group would have risen 2.3 per cent.”
Housing: The ABS said, “Rents recorded the first quarterly fall since the series commenced in 1972. Weak rental market conditions as a result of COVID-19 lockdown restrictions and rising vacancy rates saw rents fall in most capital cities in the June quarter.”
The 2.5 per cent “fall in electricity was mainly driven by utility rebates in some capital cities to support households from the impacts of COVID-19.”
Automotive fuel: The ABS said, the “19.3 per cent fall in automotive fuel (was) due to low global demand resulting from COVID-19 restrictions. Automotive fuel fell in April (-15.9 per cent), and rose in May (+0.9 per cent) and June (+9.2 per cent)”
Education: The ABS said, “A fall of 16.2 per cent in preschool and primary education was the main contributor driven by free before and after school care and free preschool for term 2 in NSW, Victoria and Queensland.”
Food: the ABS said, “Falls of 1.4 per cent in vegetables and 1.1 per cent in beef and veal partially offset the rise this quarter. Improved weather conditions saw a range of fresh produce return to typical seasonal prices, while mince meat saw temporary discounts.”
Main Positive Contributors:
The most significant offsetting price falls June quarter were tobacco (+2.7 per cent), other non-durable household products (+4.5 per cent) and furniture (+3.8 per cent).
Furnishings, household equipment and services: the ABS said, “Rises of 3.8 per cent in furniture and 3.0 per cent in major household appliances partially offset the fall, due to strong demand for products such as home office furniture and fridges and freezers.”
Rises of 4.5 per cent in other non-durable household products and 6.2 per cent in cleaning and maintenance products were seen due to a reduction in specials and genuine price increases for toilet paper and cleaning products.
Recreation and culture: the ABS said, “A rise of 1.8 per cent in Audio, visual and computing equipment was due to strong demand for products such as TVs. This was the first quarterly rise in this series since 2015.”
Health: the ABS said, “falls of 0.5 per cent in pharmaceutical products and 0.2 per cent in medical and hospital services were the main contributors. The fall in pharmaceutical products was due to increases in the proportion of consumers who qualify for subsidies under the Pharmaceutical Benefits Scheme (PBS). The fall in medical and hospital services was due to a combination of increased bulk billing as well as a freeze on private health insurance premiums, which typically rise on 1 April each year.”
Food: the ABS said, “Rises of 0.8 per cent in take-away and fast foods, 3.8 per cent in fish and other seafood, 2.0 per cent in water, soft drinks and juices, and 6.1 per cent in other cereal products, were the main contributors this quarter. High demand saw a reduction in specials and genuine price increases on a range of long-life products such as canned tuna and canned meat, rice and pasta.” 
Prices of tradables: The tradables component of the ‘All groups CPI’ fell by 1.3 per cent in the June quarter to be down 0.5 per cent over the year.
Tradable goods component fell 1.3 per cent mainly due to automotive fuel (-19.3 per cent).
Tradable services component fell 1.9 per cent due to international holiday travel and accommodation (-2.0 per cent).
Prices of non-tradables: The non-tradables component of the ‘All groups CPI’ fell by 2.3 per cent in the June quarter to be down 0.2 per cent over the year.
Non-tradable goods component rose 0.2 per cent, due to tobacco products (+2.7 per cent).
Non-tradable services component fell 3.6 per cent, due to child care (-95.0 per cent).
In seasonally adjusted terms, the tradables component of the ‘All groups CPI’ fell 1.3 per cent and the non-tradables component fell 2.2 per cent.
Tradable goods are those items whose prices are largely determined on the world market. Non-tradable prices are more affected by domestic economic conditions.
What are the implications for interest rates and investors?
The Reserve Bank sets interest rates with a view of keeping inflation between 2-3 per cent over an economic cycle. Inflation is well below the lower bound of the range at present. And the expectation is that inflation will remain contained for some time. As a result, interest rates will spend an extended period at generational lows.
Super-low rates is a great result for borrowers. But it represents on-going challenges for savers. The added complication that listed companies are expected to slash dividends when they report over the next month.
Businesses that want an inflation guide for setting selling prices or rents are best advised to use the ‘trimmed mean’. The Reserve Bank expects annual trimmed inflation to be 1.25-1.50 per cent through to mid-2022.
Does it feel like deflation? Does it feel like the biggest quarterly fall in prices in 89 years? If you were outfitting your home office with furniture and computers, probably not. If you are renting, with children in child care, and paid electricity bills and health insurance premiums in the past quarter, then you probably noticed a big drop in outlays. Similarly if you drive a fair bit – petrol prices slumped in the quarter.
But apart from Victoria, expect more ‘normal’ growth of consumer prices in the months ahead. Petrol prices have certainly lifted and the period of free child care has come to an end.
The inflation measure ‘market goods and services, excluding volatile items’, rose 0.3 per cent in the quarter and 2 per cent over the year. This measure gives a better sense of ‘normal’.
CRAIG JAMES is the Chief Economist at CommSec
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cjames-5S2v74qSNK

CPI fell for the first time since 1931: CommSec's Craig James

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EXPERT OBSERVER
The Consumer Price Index – the main measure of inflation in Australia – rose by 0.6 per cent in the June quarter, above expectations.
In seasonally adjusted terms the CPI rose by 0.7 per cent. The annual rate of headline inflation lifted from 1.3 per cent to 1.6 per cent. The Aussie dollar rose by almost a quarter of a cent against the greenback in response.
The Reserve Bank monitors three measures to derive the underlying inflation rate. The trimmed mean rose by 0.4 per cent in the June quarter (1.6 per cent annual); the weighted median rose by 0.4 per cent (1.2 per cent annual) and the CPI less volatile items rose by 0.3 per cent (1.5 per cent annual). Overall, underlying inflation rose by around 0.4 per cent in the quarter and by around 1.5 per cent over the year. Market goods and services less volatile items rose by 0.5 per cent in the quarter to be up 1.6 per cent on the year.
Automotive fuel (+10.2 per cent), medical and hospital services (+2.6 per cent) and international holiday travel (+2.7%) recorded the most significant price gains. The most significant offsetting price falls this quarter are fruit (-4.1 per cent), electricity (-1.7 per cent) and domestic travel (-1.5 per cent).
<h1>What does it all mean?</h1>
- Inflation remains contained. But we can never claim that the inflation dragon is dead, rather resting. Higher fuel prices can be passed through in terms of higher taxi and public transport fares as well as freight and courier prices. Weather events like the current drought in eastern Australia can push up prices of supermarket goods as well as café, restaurant and takeaway food prices. The high activity in infrastructure building can put upward pressure on construction sector wages, in turn lifting prices of newly-built dwellings.   
- Clearly fuel and food prices are volatile. Fuel lifted 10.2 per cent in the June quarter, but over the past month, petrol is down by 3 per cent.
- If we are looking where future inflation pulses can come from, fuel prices, weather events, administered prices (such as utilities and child care), the exchange rate, construction and wages are the things to watch.
- Headline inflation has averaged 1.7 per cent over the past five years and averaged 2.1 per cent over the past decade. So clearly inflation remains below ‘normal’ levels and certainly still below the Reserve Bank’s 2-3 per cent target band.
- The key underlying measures of inflation rose 0.3-0.5 per cent in the June quarter. Even if the latest results were annualised, inflation would be below the Reserve Bank’s 2-3 per cent inflation target.
- Wages are still growing at a slower pace than in the past. But wages are outpacing prices and have lifted from lows. And businesses can’t absorb higher costs forever. The next wage price index data is released on August 14. 
- The Reserve Bank has cut rates in quick succession. At the same time there are indications that economic momentum has improved since the election. The US Federal Reserve is poised to cut rates. So it is opportune that the RBA stays on the interest rate sidelines for now. But with inflation below the target band and likely to remain low, the Reserve Bank can cut rates further if it believed it would be successful in generating faster economic growth, higher wages and lower unemployment. 
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CRAIG JAMES is the chief economist at <a href="https://www.comsec.com.au/default.aspx" target="_blank">CommSec</a>. 
 
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Inflation dragon still dozing: CommSec

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Australia's Consumer Price Index has risen 0.6 percent over the June quarter, slightly higher than expectations. 
The biggest drivers in the uptick of prices was fuel, up 10 percent.
International holiday travel and accomodation was up 2.7 percent, medical and hospital services was up 2.6 percent and tobacco was up 2.4 percent.
On the flip side, prices for fruit and vegetables were down 2.8 percent), domestic holiday travel and accommodation was down 1.5 per cent and electricity was down -1.7 per cent over the quarter.
"Inflation remains contained," noted CommSec chief economist Craig James.
"But we can never claim that the inflation dragon is dead, rather resting. 
"Higher fuel prices can be passed through in terms of higher taxi and public transport fares as well as freight and courier prices. 
"Weather events like the current drought in eastern Australia can push up prices of supermarket goods as well as café, restaurant and takeaway food prices. 
"The high activity in infrastructure building can put upward pressure on construction sector wages, in turn lifting prices of newly-built dwellings,' James advised.   
ABS chief economist Bruce Hockman said automotive fuel price rise of 10.2 per cent in the June quarter 2019 contributed to half of the 0.6 per cent rise this quarter.
<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/2019/7/31/CPI%20quarterly%20change.jpg" alt="">
 
"Automotive fuel prices returned to levels recorded in late 2018 after falling 8.7 per cent in the March quarter 2019." The CPI rose 1.6 per cent through the year to the June quarter 2019, after increasing 1.3 per cent through the year to the March quarter. 
"Annual growth in the CPI continues to be subdued due to falls in a number of administered prices. Through the year, utility prices have fallen 0.2 per cent and child care has fallen 7.9 per cent following the introduction of the Child Care Subsidy package in July 2018."
Westpac had been <a href="/expert-insights/investing/cpi-forecast-to-rise-for-june-quarter-westpacs-justin-smirk">forecasting a 0.5% rise</a> in the June quarter CPI, taking the annual pace to a 1.5% rise from 1.3%.
"The June quarter tends to be a seasonally soft quarter with the ABS projecting a seasonal factor of 0.2ppt increase," Westpac's Justin Smirk said.
IFM economist Alex Joiner says the figures were a slight upside surprise, however it is inline with expectations on core measures.
ANU professor Ben Phillips says CPI for child care shows that since 2002 prices after subsidies up 69% or 14% (real terms). About -6% relative to incomes.
Darwin saw the biggest increase in inflation, up 0.8 percent, driven by a 14 percent rise in domestic holiday, travel and accomodation prices.
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jrobinson-rf4aSBido9

CPI rises 0.6 percent in June quarter 

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EXPERT OBSERVER
The main measure of consumer prices in Australia – and a key guide to the cost of living for families – is the Consumer Price Index. In the March quarter the CPI was unchanged in original terms, the lowest result in three years. And the annual rate of inflation eased from 1.8 per cent to a 2½-year low of 1.3 per cent. 
While the cost of living has slowed markedly in the latest quarter, this is a trend that has been operating for quite some time. Over the last five years, annual inflation has averaged just 1.74 per cent – the lowest equivalent result since late in 1963. If 20-year averages are used, you would have to go back to 1952 to find a lower outcome. 
While wage growth has slowed over time, so has inflation – and to a greater extent. Aussie consumers have rarely had it better. 
But while the CPI provides a broad gauge of the cost of living, in practice living costs will vary across demographic groups and across regional areas. It all depends on the relative importance of the good or service in your household budget. Clearly younger people purchase markedly different items to those purchases by aged pensioners. 
The other important point is that living costs should be tracked in relation to incomes. For instance if wages are growing at a faster rate than prices, purchasing power will have increased, and, more broadly, the standard of living. Of course the standard of living is more subjective and may include things like traffic congestion and access to medical services. 
The other complication is the time period for measurement. The cost of living may have improved in recent times, but that may have occurred after a long period where living costs were soaring. 
The bottom line is that purchasing power has continued to improve for Australian consumers. For average wage earners, wage growth has exceeded growth of prices over the past five years and over the past decade. Quite remarkably the prices of 26 of the 87 expenditure class items tracked by the ABS are actually lower now than a decade ago. Only 16 of 87 expenditure class items have recorded faster price increases than wages over the past decade.
Living cost indexes 
The Consumer Price Index measures “price inflation for the household sector as a whole”. But to measure purchasing power for different groups in the economy, the Bureau of Statistics compiles living cost indexes. The March quarter figures were issued yesterday. The living cost index (LCI) changes were: employees (flat; +1.4 per cent annual); aged pensioners (up 0.3 per cent; +1.4 per cent annual); self-funded retirees (down 0.2 per cent; +1.6 per cent annual); ‘other government transfer recipient households’ (up 0.2 per cent; +1.6 per cent annual); pensioner and beneficiary households (up 0.3 per cent; +1.6 per cent annual). 
Over the past decade, arguably employee households have had more to celebrate than other groups. The LCI for employees lifted by only 19.3 per cent, followed by self-funded retirees (up 22.8 per cent); age pensioners (up 23.8 per cent), pensioner and beneficiary households (up 25.1 per cent) and ‘other government transfer recipient households’ (up 26.1 per cent).
Prices and incomes
Over the past five years the Consumer Price Index (CPI) rose by 8.3 per cent. And over the past decade, prices rose by 23.4 per cent. The main measure of wages is the wage price index. But data on the WPI is only available to December 2018. Still, the WPI has grown at a faster rate than prices over the past five and ten years. Wages have grown by 11.3 per cent over the past five years and grown by 30.9 per cent over the past decade. 
Using a different measure of wages – average ordinary time earnings for full-time adults – wages rose 11.7 per cent in the five years to November (December quarter) and lifted 38.6 per cent over the past decade. 
The maximum standard rate of the aged pension has lifted by 10 per cent over the past five years and increased by 53 per cent over the decade. The maximum partnered rate of the aged pension increase by 10 per cent over the past five years and increased by 38 per cent over the past decade. 
Cheaper prices 
Most Aussie consumers would be surprised at the breadth and depth of goods that have become cheaper over time. Together with items like clothes, shoes and electrical goods, cars are cheaper than a decade ago – down by over 9 per cent. And then there are staples like eggs (-0.8 per cent), bread (-0.9 per cent) and milk (-14.4 per cent).
Clothing, footwear, cars and a raft of electrical goods have become cheaper over time. In part, this is a global trend, reflecting more efficient production techniques for large scale manufactured goods. Consumers across the globe have benefitted from the greater availability of higher-quality/lower-priced goods. 
Internet purchases have also proven beneficial. Consumers can buy goods whenever they want and wherever they are. In economics, this can be explained as an expansion of supply or choice of goods – putting downward pressure on selling prices. Dearer prices
 When people bemoan the rising cost of living, they are primarily thinking about utilities, child care, education and medical services such as health insurance. The prices of these items have lifted notably over both the last five years and the past decade. 
The good news is that governments have been successful in reducing utility prices with both gas and electricity now cheaper than a year ago. Child care costs have also fallen over the past year. But health insurance fees have lifted by 4.1 per cent over the past year, well ahead of the rate of inflation.
What are the implications?
The conventional wisdom is that the cost of living is soaring. The reality is that the cost of living is growing at the slowest pace in a generation. Now while the cost of living is rising as it always does in a growing economy, annual inflation has actually eased – not just in the past five years but on far longer timeframes.
Our parents and grandparents would been accustomed to inflation rates near 2 per cent and indeed current-day inflation is more akin to that seen in the 1950s and 1960s. 
A raft of goods and services has become cheaper – not just over the past year but many items are cheaper than a decade ago. Thank technology, thank the efficiency and productivity of businesses across the globe.
While price growth has eased, so has wage growth. In a globalised world, businesses are finding it harder to lift prices of their finished products or services. So it is harder for companies to give out pay increases similar to those awarded a decade ago.
Importantly, incomes are growing at a faster pace than prices, so many goods and services have become more affordable.
In the globalised world, businesses needs to stand out. That is, businesses need to find that point of difference with their competitors or their ‘uncommon offering’. Aussie businesses not only can win more market share at home, they can tap into the global marketplace.
Craig James is the chief economist at <a href="https://www.comsec.com.au/default.aspx" target="_blank">CommSec</a>.
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Inflation is at a 55-year low: CommSec's Craig James

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<img src="https://counter.theconversation.edu.au/content/83211/count.gif?distributor=republish-lightbox-advanced" alt="The Conversation" width="1" height="1">
GUEST OBSERVER
A contradiction is emerging between how consumers should be feeling and what the heads of companies expect them to do.
What we know about low wages growth and underemployment seems to suggest households would be tightening the purse strings but the sentiment of business leaders is very positive in sectors relying on consumer spending.
Wages are struggling to keep pace with the prices of the things we buy and average hours worked (per worker) have also been trending down or flat at best. This is not a picture of robust consumer finances.
On top of this retailers are facing the threat of competition from US giant Amazon. Yet according to our analysis of the outlook of leaders of Australia’s ASX 200 companies, positivity has increased.
<a href="https://www.propertyobserver.com.au/images/2017/09/01/Screen%20Shot%202017-09-01%20at%208.36.49%20AM.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/09/01/Screen%20Shot%202017-09-01%20at%208.36.49%20AM.png" alt=""> 
The sentiment of business leaders has remained positive and improved over the past 12 months according to our analysis. The “polarity” score, which measures whether the sentiment is positive or negative, has increased from 0.11 to 0.15 (a statistically significant improvement).
We also looked at how subjective these statements were and found there’s been no significant increase in how opinionated these statements are.
Our findings also mirror other business confidence surveys and even the Reserve Bank of Australia’s own outlook, which also paints a buoyant picture. The RBA expects growth in the economy to strengthen gradually to be around 3% in the first half of 2018. The RBA expects wage growth to gradually pick up over the next year or two and for average hours worked to increase somewhat.
Similarly, the Westpac-AusChamber Actual Composite index strengthened in June 2017, rising 1.8 points to 65.0. This factored in a strengthening in the labour market, as manufacturing firms plan to hire more workers and manufacturing wages rise. And the NAB business confidence survey also reveals that business conditions and confidence are improving.
The positive outlook for economic growth according to the RBA is driven by resource exports notably iron ore and liquid natural gas (LNG) production, household consumption including retail sales, and non-mining business investment. The RBA also expects wage growth to soon pick up.
<a href="https://www.propertyobserver.com.au/images/2017/09/01/Screen%20Shot%202017-09-01%20at%208.37.59%20AM.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/09/01/Screen%20Shot%202017-09-01%20at%208.37.59%20AM.png" alt=""> 
<a href="https://www.propertyobserver.com.au/images/2017/09/01/Screen%20Shot%202017-09-01%20at%208.39.08%20AM.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/09/01/Screen%20Shot%202017-09-01%20at%208.39.08%20AM.png" alt=""> 
<a href="https://www.propertyobserver.com.au/images/2017/09/01/Screen%20Shot%202017-09-01%20at%208.40.00%20AM.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/09/01/Screen%20Shot%202017-09-01%20at%208.40.00%20AM.png" alt="">
These drivers are reflected in our sentiment analysis. Business leaders in ASX categories relying on household spending, have stronger than average positive outlook on the future, with an average score of 0.18.
This was led by businesses like JB HiFi (0.41), TabCorp (0.23) and Flight Centre (0.18); and also consumer staples led by Ardent Leisure (0.50), Treasury Wine Estates (0.38) and Coca-Cola Amatil (0.18).
The outlook for manufacturing is also positive due to a range of factors such as infrastructure spending by governments, stronger world growth, and improved international competitiveness due to a lower currency, commercial construction and home building, according to the Westpac-AusChamber index. This is supported by our analysis which found stronger than average sentiment from business leaders in the materials sector (0.17), through companies such as Amcor (0.26).
But the outlook isn’t all positive among our business leaders. Sentiment was weaker than average in utilities (0.07) led by AGL (-0.03). This is hardly surprising given the high uncertainty around energy policy – AGL for example owns coal-fired power plants. Also sentiment was somewhat weaker (0.13) than average among industrial company leaders, the sentiment in Qantas’ outlook was negative (-0.03) and property/real estate company Lend Lease (0.09) was also weak.
Perhaps the gloomy slow wage growth and underemployment will catch up to the more positive sentiment on consumer goods and services in company reports. Or this contradiction might simply reflect the high uncertainty in the global environment.
Consumers certainly seem a little confused: the weekly ANZ-Roy Morgan Consumer confidence Index ticked up slightly last week but has jumped around in recent months. Certainly the positive sentiment from business leaders about consumer spending we see in company reports seems optimistic.
<a href="https://theconversation.com/profiles/ross-guest-13155" target="_blank">Ross Guest </a>is Professor of Economics and National Senior Teaching Fellow, Griffith University.
<a href="https://theconversation.com/profiles/ben-hachey-337155" target="_blank">Ben Hachey is</a> Honorary Associate, School of Information Technologies, University of Sydney.
Both are authors for <a href="https://theconversation.com/au" target="_blank">The Conversation</a>.
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