<p>Just a few months after acquiring a prime Broadbeach site on the corner of First Avenue and Surf Parade, family-run developer <a href="https://www.apartments.com.au/developers/raptis">Raptis</a> has filed fresh plans for a new apartment development.</p>

<p>Raptis is seeking to deliver a <a href="https://www.apartments.com.au/new-apartments/17-19-first-avenue-broadbeach-qld-4217">29-storey tower with 73 apartments</a> on the 818 sqm site. It will be the developer's seventh project in the suburb, as they are approaching completion of The Sterling on George Avenue.</p>

<p>There will be a pool, barbecue and outdoor dining area, residents lounge and dining, sauna and steam room, gym, and a Yoga and Pilates studio.</p>

<p><img alt="Raptis" data-entity-type="file" data-entity-uuid="b554da3f-7344-49aa-b1c9-44cf459af0d7" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-06-05%20at%2010.41.45%E2%80%AFAM.png?VersionId=zzjWu1iO1wnuYv4EV4fyOyf5nSXjGYut" /></p>

<p>Raptis Joint Managing Director, Evan Raptis, says they remain&nbsp;committed to developing quality infill sites across the Gold Coast in the lead-up to the 2032 Brisbane Olympics.</p>

<p>"This project continues our long track record of delivery in Broadbeach, and we look forward to bringing another premium development to this thriving precinct."</p>

<p>The announcement follows strong delivery momentum for Raptis, with The Sterling Broadbeach nearing completion and construction well underway on the final stage of the Waterpoint community adjacent to Harbour Town. The developer's continued investment in the Gold Coast reflects confidence in the region's apartment market fundamentals, underpinned by sustained Southeast Queensland population growth.&nbsp;</p>

<p>The outlook for the region is further bolstered by infrastructure investment tied to the Brisbane 2032 Olympic Games, which is expected to drive continued economic and population growth across the SEQ corridor.&nbsp;</p>

<p>Subject to a favourable response from Gold Coast City Council, construction on the new First Avenue tower is targeted to commence before the end of 2026.&nbsp;</p>

<p><em>Read more:&nbsp;<a href="https://www.apartments.com.au/news/qld/it-s-all-in-the-family-four-decades-later-raptis-continues-to-shape-the-gold-coast-skyline">It’s all in the family: Four decades later, Raptis continues to shape the Gold Coast skyline</a></em></p>

<p><em>Read more: <a href="https://www.apartments.com.au/news/qld/raptis-secures-prime-surf-parade-site-for-next-broadbeach-apartment-development">Raptis secures prime Surf Parade site for next Broadbeach apartment development</a></em><br />
&nbsp;</p>


Gold Coast developer brings seventh Broadbeach project to market, targeting construction commencement before year end

Joel Robinson

First look: Raptis lodges plans for new 29-storey Broadbeach tower 

<p>Brisbane development veteran Kevin Seymour's Seymour Group is set to deepen its presence on one of Brisbane's most tightly held riverfront addresses, lodging revised plans for a luxury apartment development on Oxlade, just a few doors down from The Oxlade, which it completed in 2024.</p>

<p>The <a href="https://www.apartments.com.au/new-apartments/70-72-oxlade-drive-new-farm-qld-4005">new project at 70-72 Oxlade Drive</a>, directly north of The Oxlade, will have 27 apartments across a seven-storey building&nbsp;overlooking the Brisbane River and Merthyr Park. It's a revision from a 2021-approved design.</p>

<p>Designed by bureau^proberts, the project has evolved from the previously approved 26-apartment scheme, introducing an additional penthouse level while maintaining a low-density, boutique character. The development will comprise 26 three-bedroom apartments and a single four-bedroom penthouse, supported by two basement levels with 86 car spaces and 34 bicycle spaces.</p>

<p>The architectural response is centred around two distinct building forms separated by a landscaped open-air atrium.&nbsp;"This dual composition captures and embraces Brisbane’s subtropical environment whilst breaking down built form and scale," the submission to the Brisbane City Council noted.</p>

<p><img alt="First look: Seymour Group returns to Oxlade Drive with revised riverfront apartment plans in New Farm" data-entity-type="file" data-entity-uuid="c12d84d0-bc11-4067-b46f-5bd2d786a34d" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/new%20farm%20landscape.png?VersionId=YEPc2k5CAdh6aAPlu4uVpgZadh4MEfRd" /></p>

<p>A defining feature of the design is a deep landscaped void running through the centre of the building, creating what bureau^proberts describes as a "natural ravine" that enhances airflow, daylight penetration and resident amenity. The design report notes that the separation of the two building volumes is intended to maximise natural light, cross-ventilation and outlook while strengthening connections to the surrounding riverfront setting.</p>

<p>Curved balcony edges, integrated planting and extensive landscaping throughout the façade reinforce the subtropical design approach. The building's façade is softened by elevated gardens and planter beds, creating a green edge that complements the established landscape character of Oxlade Drive and neighbouring Merthyr Park.</p>

<p>New Farm has become one of Brisbane's most sought-after suburbs for developers delivering premium downsizer-focused apartments.</p>

<p>GRAYA has been particularly active in the precinct, completing both Chalk and York in recent years, while construction of Moray House, being delivered for Spyre, is now nearing completion. Architect-turned-developer Joe Adsett recently launched <a href="https://www.apartments.com.au/new-apartments/arcilla-new-farm-by-joe-adsett-28-maxwell-street-new-farm-qld-4005">Arcilla on Maxwell Street</a>, an exclusive collection of just nine apartments.</p>


First look: Seymour Group returns to New Farm's Oxlade Drive with riverfront apartment plans

<p>A new residential tower will be the first piece of a broader mixed-use precinct set to reshape a prominent Newcastle West site, with local developer <a href="https://www.apartments.com.au/developers/gwh">GWH</a> bringing its <a href="https://www.apartments.com.au/new-apartments/cambridge-quarter-newcastle-west-12-denison-street-newcastle-west-nsw-2302">Cambridge Quarter</a> vision to market.</p>

<p>The first release, Tempo, will introduce 87 apartments across a 24-storey tower, marking Stage 1 of the residential component of a larger urban regeneration project planned for the western end of Newcastle's city centre, encompassing the former Cambridge Hotel site.</p>

<p>Positioned on Denison Street, Tempo has been designed as the inaugural building within Cambridge Quarter, a precinct that will ultimately combine apartments, retail activation and revitalised public spaces including the revamping of the Cambridge Hotel.</p>

<p>[smartcode_project:default project_id=135876 project_image_fid=368856]</p>

<p>The tower will comprise a mix of one, two and three-bedroom apartments, including layouts with multipurpose rooms, catering to a broad cross-section of owner-occupiers. Apartment sizes range from around 60 sqm to 192 sqm, with a number of residences oriented to capture views across Newcastle Harbour, the city skyline and coastline.</p>

<p>GWH has emphasised liveability in the design, with open-plan layouts extending to generous balconies and terraces. Residents will have a choice of two interior palettes, while specifications include engineered stone benchtops, SMEG appliances, full-height bathroom tiling and secure building access. Premium upgrade packages will also be available</p>

<p>Multiple rooftop resident retreats will provide communal outdoor space overlooking the harbour and city, offering an elevated amenity layer above the activity of the precinct below.</p>

<p>[smartcode_project:default project_id=135876 project_image_fid=368851]</p>

<p>The broader Cambridge Quarter vision extends beyond the residential tower itself. Ground-level retail activation and landscaped public areas are planned throughout the precinct, creating a walkable neighbourhood environment connected to the surrounding renewal of Newcastle West. The Cambridge Hotel is also earmarked for future redevelopment into a family-friendly hospitality venue integrated with the new precinct.</p>

<p>The project is strategically positioned within walking distance of Newcastle Interchange, providing access to light rail, regional rail services and direct connections to Sydney. Residents will also be close to Honeysuckle, Newcastle Harbour and the city's beaches and coastal walkways.</p>

<p>[smartcode_project:default project_id=135876 project_image_fid=368852]</p>

<p>For GWH, Cambridge Quarter represents one of its most significant Newcastle developments to date. The locally based developer, which has operated in the Hunter region since 1995, describes the project as a new chapter in the ongoing transformation of Newcastle West.</p>

<p>GWH Executive Director Jonathan Craig said the project had been shaped by a focus on creating lasting community connections.</p>

<p>"We take pride in creating places that last. Spaces where people feel connected, comfortable and a genuine sense of belonging," Craig said.</p>

<p>"Cambridge Quarter is something we are truly proud of, a place shaped by local knowledge, built with care and designed to be part of Newcastle's next chapter."</p>

<p>[smartcode_project_cta:default project_id=135876]</p>


GWH unveils first release at landmark Cambridge Quarter precinct in Newcastle West

<p><a href="https://www.apartments.com.au/developers/ss-projects">S&amp;S Projects</a>,&nbsp;Rainbow Bay's busiest developer,&nbsp;has officially lodged plans for the largest development in its booming local portfolio, seeking approval for a further 88 apartments on Boundary Street.</p>

<p>The proposal&nbsp;at <a href="https://www.apartments.com.au/new-apartments/209-213-boundary-street-coolangatta-qld-4225">209–213 Boundary Street, Coolangatta</a>,&nbsp;marks the next chapter in the developer's transformation of the southern Gold Coast beachside precinct. It will be its fifth in the area, having already delivered Flow, Awaken and Esprit, while construction continues on the 38-apartment Radia. The new project would rise 57 metres above a consolidated 1,518 sqm site, on the same street as Radia and Esprit.</p>

<p>&nbsp;</p>

<p>Designed by <a href="https://www.apartments.com.au/architects/cottee-parker-architects">Cottee Parker</a>, the proposed development comprises 88 two and three-bedroom apartments across a contemporary podium-and-tower form that integrates extensive landscaping from street level through to the rooftop.</p>

<p>The tower would be delivered above a basement and multi-level podium accommodating resident and visitor parking, with the residential component commencing from level three. The design incorporates cascading planting throughout the façade, landscaped podium edges, and deep planting zones along the Boundary Street frontage.</p>

<p><img alt="First look: S&amp;S Projects lodges plans for 88-apartment wellness tower at Coolangatta's Boundary Street" data-entity-type="file" data-entity-uuid="677e6615-b5c0-4b6c-b4f9-efb14fcde1a6" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/ss%20da%20pers.png?VersionId=YOnPKQm7IFXv0M5H326djEpxk80500Hi" /></p>

<p>A key feature of the development is its expansive rooftop wellness and recreation precinct. Plans reveal a resort-style pool deck, gymnasium, sauna, steam room, hot and cold plunge pools, rooftop terraces, barbecue areas and landscaped relaxation spaces positioned to capture views across the southern Gold Coast coastline.</p>

<p>The rooftop wellness focus builds on the vision S&amp;S Projects first outlined when it acquired the site for $20.25 million last year.</p>

<p>"We are taking every advantage to create a truly unique rooftop wellness experience with a natural feel for residents, offering stone features throughout and an underlying theme that emulates a botanical garden," S&amp;S Projects founder and director Paul Gedoun said at the time.</p>

<p>The proposal seeks a 57-metre building height, representing a 50 per cent uplift on the site's mapped 38-metre height limit. Planning documents argue the additional height is consistent with recently approved and emerging towers in the immediate Boundary Street and Rainbow Bay precinct.</p>

<p>Urbis, acting as planning consultant, said the development would provide "88 dwellings, comprising a mix of two and three-bedroom apartments, contributing to housing choice and supply within an established medium to high-rise coastal urban neighbourhood."</p>

<p>The scheme has undergone extensive pre-lodgement consultation with the City of Gold Coast, with the design refined following feedback relating to architectural expression, landscaping, traffic access and podium treatment.</p>

<p><img alt="S&amp;S" data-entity-type="file" data-entity-uuid="0a2d70fd-62ac-4b83-97c6-b798fc1243dd" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-06-05%20at%209.16.31%E2%80%AFAM.png?VersionId=yHmghUwKM3IVGpBktQU1mE.0Lpf3WimG" /></p>

<p>The architectural team is led by Brisbane-based Cottee Parker, one of Australia's most active residential design studios, with landscape architecture by Dunn + Moran. The consultant team also includes ADG Engineers, Windtech and Acoustic Works.</p>

<p>S&amp;S Projects has become one of the most influential private developers operating on the southern Gold Coast. Since entering Rainbow Bay in 2022, the company has assembled a portfolio exceeding $1 billion in end value, establishing itself as a key player in the area's evolution into a premium apartment destination. Pezet Matheson will again handle the sales for S&amp;S.</p>

<p>Coolangatta is entering another wave of apartment development, following the delivery of several prominent residential projects in recent years.</p>

<p>John Kearney's Immerse Projects will launch&nbsp;<a href="https://www.apartments.com.au/new-apartments/kaiya-kirra-beach-5-haig-street-coolangatta-qld-4225">Kaiya on Haig Street</a>&nbsp;soon, meanwhile, Palm Beach-based Sherpa Property Group is preparing to bring its debut Coolangatta development, <a href="https://www.apartments.com.au/new-apartments/flourish-viver-87-griffith-street-coolangatta-qld-4225">Flourish Viveré</a>, to market later this year, subject to approvals.</p>


First look: S&S Projects proposes 88-apartment wellness tower at Coolangatta's Boundary Street

<p>A landmark former orphanage site in Surrey Hills could be transformed into a new residential community under plans lodged by <a href="https://www.apartments.com.au/developers/antipodean-land-developments">Antipodean Land Developments</a> that would deliver 76 apartments and townhouses while restoring some of the suburb's most significant heritage buildings.</p>

<p>The burgeoninng Melbourne-based developer has submitted plans for the 9,158 sqm site at 1 Kent Road and 24 Durham Road, home to the former St Joseph's Home for Destitute Children, a historic institutional complex dating back to the late 19th century. The proposal seeks to adaptively reuse several heritage buildings while introducing two new four-storey residential buildings set within extensive landscaped grounds.</p>

<p>Designed by <a href="https://www.apartments.com.au/architects/woods-bagot">Woods Bagot</a> and Kerstin Thompson Architects, the project has been conceived as a contemporary residential village embedded within a restored heritage precinct. The development team describes the design approach as "The Village in the Garden," with new buildings positioned among mature landscaping by OCULUS and significant heritage structures.</p>

<p><img alt="First look: Antipodean Land Developments plans heritage-led apartment community in Surrey Hills" data-entity-type="file" data-entity-uuid="44ec8c1b-c0b6-44ae-859e-5811b3e6a023" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Untitled%20design%20%281%29.png?VersionId=p.p1_KFh4iQoV4nisdnPfQBAsWNi7m79" /></p>

<p>The proposal would deliver 76 dwellings comprising a mix of apartments and duplex-style residences, significantly increasing housing supply on one of the largest privately held residential landholdings in Surrey Hills. The development includes 127 car spaces, 24 bicycle spaces and more than 1,000 sqm of communal amenity, with the existing chapel building earmarked for conversion into resident facilities.</p>

<p>According to the planning submission, the project centres on the restoration and adaptive reuse of the site's most significant heritage assets, including the original c.1889 St Joseph's building, the chapel designed by architect Augustus Andrew Fritsch, and the historic brick perimeter walls and entry gates. The proposal also incorporates the retention of other contributory buildings including the former infirmary and school building.</p>

<p>Tract Consultants, in the planning report accompanying the application, said the scheme had been shaped through extensive heritage analysis and design development.</p>

<p>"The shared vision for the Site by the project team has culminated in a scheme which successfully breathes life back into a historic site while delivering upon the objectives of Victoria's Housing Statement in a carefully curated and contextually responsive manner."</p>

<p><img alt="First look: Antipodean Land Developments plans heritage-led apartment community in Surrey Hills" data-entity-type="file" data-entity-uuid="7263b7d8-95ea-400f-9531-6ca7d22c3c33" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Untitled%20design%20%282%29.png?VersionId=4cR1tiWOsDpgxEOwZi5vVFcyvvOsYkIE" /></p>

<p>The proposal is being assessed under Victoria's Significant Residential Development with Affordable Housing pathway. As part of the application, three per cent of the project's residential development cost would be contributed to the Social Housing Growth Fund. The development would also provide a diverse mix of one, two and three-bedroom residences targeting a broader range of buyers than typically found in Surrey Hills' detached housing market.</p>

<p>Sustainability initiatives include an anticipated 66 per cent BESS score, natural cross-ventilation to 80 per cent of apartments, 28 per cent deep soil landscaping and a canopy cover outcome exceeding local planning requirements. The proposal also sets aside more than 1,083 sqm for communal indoor and outdoor resident amenity spaces.</p>

<p><img alt="First look: Antipodean Land Developments plans heritage-led apartment community in Surrey Hills" data-entity-type="file" data-entity-uuid="33fad46f-fe26-4d0a-acfd-6b776e1c6a3d" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Untitled%20design.png?VersionId=D9F6WVSyYCtGvSUmith35LRp6R7PQkw_" /></p>

<p>Planning documents describe the property as one of the largest underutilised residential sites in Surrey Hills, arguing it presents a rare opportunity to introduce "missing middle" housing in an established inner-eastern suburb while preserving and revitalising a significant heritage precinct.</p>

<p>Antipodean Land Developments has built a reputation for design-focused residential projects across Melbourne, particularly in the medium-density sector. Previous developments include Neighbourhood in Brunswick East, delivered with Breathe Architecture, and Balfe Park Lane, designed by Kerstin Thompson Architects.</p>

<p>They've been very active in site acquisition as they build out their future development pipeline. They recently launched Thornubury House, 45 apartments above a mix of commercial, retail, and food and beverage tenancies, and have plans for a boutique project in Fitzroy and another <a href="https://www.apartments.com.au/news/vic/antipodean-plan-apartments-for-deepdenes-missing-middle-on-whitehorse-road">"missing middle" project</a> on Deepdene's Whitehorse Road.</p>


First look: Antipodean Land Developments plans heritage-led apartment community in Surrey Hills

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<div>Whoa, there! It seems that inflation has disappeared into a puff of dust!</div>
<div> </div>
<div>Nothing like an outlying result to shake things up a bit, and today's Consumer Price Index (CPI) or inflation result for the March quarter was an absolute ripper!</div>
<div> </div>
<div>Headline inflation printed negative at -0.2 percent. </div>
<div> </div>
<div>This was miles below expectations and the second weakest reading in nearly two decades, taking the annual result all the way down to 1.3 percent (which is well below the target inflation range to 2 to 3 percent).</div>
<div> </div>
<div>The falls were broad based, with six out of the eleven CPI groups recording declines.</div>
<p><a href="/images/2016/04/28/A6.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/04/28/A6.jpg" alt=""></p>
<p> </p>
<div>More importantly, the "core" analytical series, which strips out outlying readings, notched an extraordinarily soft set of numbers to take the respective annual readings to a record low. </div>
<div> </div>
<div>I've diced the data up below to four decimal places, but all you really need to know is that the incredibly weak trimmed mean (0.2 per cent) and weighted median (0.1 per cent) inflation for the quarter have taken the annual readings down to exceptionally low levels at 1.7 per cent and only 1.4 per cent respectively.</div>
<div> </div>
<div><a href="/images/2016/04/28/A5.jpg" target="_blank">Click to enlarge</a></div>
<div><img src="/images/2016/04/28/A5.jpg" alt=""></div>
<div> </div>
<div>Non-tradables inflation, which is taken to be a reasonable proxy for domestic price pressures, fell to its lowest annual reading since some seventeen years ago in June 1999. </div>
<div> </div>
<div><a href="/images/2016/04/28/A1.jpg" target="_blank">Click to enlarge</a></div>
<div><img src="/images/2016/04/28/A1.jpg" alt=""></div>
<p> </p>
<div>In the normal course of things this sort of result would make an interest rate cut a no-brainer.</div>
<div> </div>
<div>While markets are suddenly pricing a cut as soon as next week on Budget day as an each-way bet, it would nevertheless still be quite a surprise to see such a change of narrative from the Reserve Bank so soon. </div>
<div> </div>
<div>That said many analysts will now see June and August as potentially live meetings for rate cuts, which could take the cash rate down to a record low of just 1.50 per cent.</div>
<div> </div>
<div>Generally it is said that easy monetary policy brings inflation in time, but if a lack of investment is the underlying problem then it is questionable whether more rate cuts alone will bring this to the party.</div>
<p><br><span>Anyway, what a result, and a game-changer, indeed!</span></p>
<div>
<br><strong><span style="text-decoration: underline;">Rental growth slowest since 1994</span></strong>
</div>
<div> </div>
<div>There isn't space here to run through all of the positive (education, medical services, pharmaceuticals) and negative (fuel, transport, holidays) contributors to inflation this quarter in detail, but we can see that rental growth has slowed to its lowest level since 1994. </div>
<div> </div>
<div>As you can see depicted in the chart below, the periods when investors were spooked out of the market (1985 to 1987, and 2008) were also precisely the periods when rents spiked.</div>
<div>
<br>Correspondingly the record surge in investor activity since 2012 in response to low interest rates - which Blind Freddy could have predicted - has led to near-record low levels of rental growth.</div>
<div> </div>
<div>Rampant investor lending has now been successfully stymied so equilibrium should return in due course, as the construction boom also passes its peak. It's always interesting and strangely satisfying when markets work just as they should. </div>
<p><a href="/images/2016/04/28/A2.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/04/28/A2.jpg" alt=""></p>
<p> </p>
<div>Rents have continued to rise modestly in most cities through this cycle, but Darwin (-4.4 per cent) and Perth (-4.4 per cent) are in significantly negative territory year-on-year. On the other hand rents kept rising in Sydney by another +2.3 per cent over the year to March.</div>
<div> </div>
<div><a href="/images/2016/04/28/A4.jpg" target="_blank">Click to enlarge</a></div>
<div><img src="/images/2016/04/28/A4.jpg" alt=""></div>
<div> </div>
<div>Looking instead at annual rental growth we can see how Perth has gone from star pupil straight into detention, and now must work through its elevated vacancy rates before annual rental growth reverts to the mean.</div>
<div> </div>
<div><a href="/images/2016/04/28/A3.jpg" target="_blank">Click to enlarge</a></div>
<div> </div>
<div class="separator"><img src="/images/2016/04/28/A3.jpg" alt=""></div>
<div class="separator"> </div>
<div>Rental growth was also negative in Canberra over the year to March (-0.6 per cent) but looks to be heading back into positive territory in the national's capital, while annual rental growth in Hobart increased to 1.4 per cent in the first quarter.</div>
<p><strong style="line-height: 1.3em;"><span style="text-decoration: underline;">The wrap</span></strong><span style="line-height: 1.3em;"> </span></p>
<div>Well, well. A stunningly low inflation result which wrong-footed markets and puts interest rate cuts right back into the frame. Game on.</div>
<div> </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>
</div>
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pwargent-M4siyDbqQY

Inflation show stopper: Pete Wargent

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<p>GUEST OBSERVER</p>
<p>The headline CPI surprised in Q1, falling 0.2 percent compared to Westpac’s forecast for +0.4 percent.</p>
<p>The market median was +0.2 percent. The annual rate is now just 1.3 percentyr compared to 1.7 percent/yr in Q4. </p>
<p>The core measures, which are seasonally adjusted and exclude extreme moves, rose 0.2 percent compared to the market’s expectation of 0.5 percent rise, Westpac was slightly higher at 0.6 percent. In the quarter, the trimmed mean gained 0.21 percent while the weighted median lifted 0.14 percent. The annual pace of the average of the core inflation measures is now 1.5 percent from 2.0 percent in Q4 (Q4 was unrevised).</p>
<p>The six month annualised pace of core inflation came in well below the band at a very modest 1.4 percentyr pace, this is the third quarter in a row it has been below the band and the lowest six month annualised pace since the 1.3 percenty print in March 1999 (a seventeen year low). </p>
<p>Traded goods prices fell 1.4 percentqtr following a stronger 0.5 percent in Q4. It is true that the significant fall in auto fuels and, if to a lesser extent, falling fruit prices had a big role to play. But even excluding fuel, food and tobacco traded goods fell 1.3 percentqtr. This is much weaker than we had anticipated. </p>
<p>Non-traded prices rose just 0.4 percentqtr which matched the softer print in Q4. This was due to the softer than expected annual price resetting for health and education. However, more critical to the outlook was the very soft 0.3 percent rise for housing owing to the continue moderation in rents inflation (0.1 percentqtr vs 0.2 percent in Q4) and a very modest update in dwelling prices (just 0.2 percentqtr when we had been looking for a modest bounce from the 0.1 percent print in Q1.</p>
<p><a href="/images/2016/04/27/Screen%20Shot%202016-04-27%20at%204.25.29%20PM.png" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/04/27/Screen%20Shot%202016-04-27%20at%204.25.29%20PM.png" alt=""><span style="line-height: 1.3em;">The key observation in the March quarter is the across the board weakness in Australia retail prices highlighted by the first disinflationary CPI headline print in seven years and the lowest six month annualised pace of core inflation in seventeen years.</span></p>
<p>All together this highlights downside risks for our medium term inflation forecasts. </p>
<p>But low inflation, on its own, is not a trigger for a rate cut.</p>
<p>Sure, it unlocks the interest rate door for the RBA should it decide it needs to walk through that door as the Bank would not have to wait for another CPI update before doing so. However, it does not mean that the RBA will cut rates! A rate cut is dependent on local economic conditions demanding a rate cut.</p>
<p>With unemployment on a new downtrend this is not so at the moment and we suggest that the RBA is waiting to see a new weaker trend in domestic activity and employment before it would embark on such a strategy. </p>
<p><em>Justin Smirk is ‎senior economist, Westpac Group and can be contacted <a href="https://www.westpac.com.au/about-westpac/westpac-group/" target="_blank">here</a>.</em></p>
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Headline CPI surprised in Q1: Westpac's Justin Smirk

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<p><span>GUEST OBSERVER</span></p>
<p><span>The headline CPI lifted 0.4 percent in Q4 compared to Westpac’s and the market’s 0.3 percent forecast. The annual rate is reported as 1.7 percent/yr compared to 1.5 percent/yr in Q3.</span></p>
<p><span>The core measures, which are seasonally adjusted and exclude extreme moves, rose 0.5 percent/qtr on par with the market’s expectation (Westpac was slightly higher at 0.6 percent/qtr). In the quarter, the trimmed mean gained 0.57 percent while the weighted median lifted 0.47 percent. The annual pace of the average of the core inflation measures is now 2.0 percent from 2.1 percent in Q3 (Q3 was revised from 2.2 percent).</span></p>
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<p><span>Of note in Q4 was some signs of pass through from a weaker AUD in the stronger than expected rise in clothing &amp; footwear (1.6 percent/qtr). However, in the quarter this was more than offset by the weaker than expected print from housing (0.1 percent/qtr). </span></p>
<p><span>The March quarter brings solid “knowns” but many ‘unknowns’ linger.</span></p>
<p><span> The March quarter will bring the usual inflationary pressure from health and education. We also see meaningful seasonal increases in tobacco. Another solid known is the significant offset from the fall in automotive fuel prices. But, as always, a large number of unknowns remain. We don’t have access to a lot of the data the ABS uses and, in many cases, it is not possible to replicate the survey process the ABS uses causing many small errors along the way. We use many alternative sources and surveys to guide our forecasts but in the end a large part of the forecast remains a judgement call.</span></p>
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<p><span>Automotive fuels are again a significant negative.</span></p>
<p><span>One of the most obvious events in the last few quarters has been the extreme volatility in the pump price of automotive fuels. From a peak at the start of the quarter of $1.20/l, the pump price fell to a low of $1.04/l by the end of February before finishing the quarter around $1.12/l. In terms of the quarterly averages, we forecast that the price of automotive fuels will fall around 11percent producing </span><span style="line-height: 1.3em;">a significant —0.39ppt drag on the CPI. Fuel is again the most significant negative we have found for the December quarter CPI.</span></p>
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<p><span style="line-height: 1.3em;"><img src="/images/2016/04/19/Screen%20Shot%202016-04-19%20at%202.57.22%20PM.png" alt=""></span></p>
<p><span>We have noted before that the fall in Australian pump prices has lagged behind the Australian dollar price of Singapore gasoline. But at the end of the March quarter there was a lift in the AUD value of Singapore gasoline that was not reflected in the pump price. We previously had wondered if Australian prices had room to fall further, even with no additional fall in Singapore prices, as the spread returned to more normal levels. For now, at least, that spread has been normalised by rising Singapore prices.</span></p>
<p><span>Fruit &amp; vegetables set to be a modest drag.</span></p>
<p><span>This quarter our forecast for a 3 percent rise in vegetable prices is more than offset by the 7 percent fall in fruit prices. All up the 2.4 percent fall in fruit &amp; vegetable prices will provide a 0.07ppt drag on the CPI.</span></p>
<p><span>There are the usual seasonal rises in cereal products, pork and food additives. However, we are careful to contrast the ongoing price discounting we are seeing in the very competitive groceries space against the ongoing pass through of the weaker AUD to import foodstuffs. Our forecasts see food &amp; non-alcoholic beverages contribute less than 0.1ppt to the CPI.</span></p>
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<p><span><img src="/images/2016/04/19/Screen%20Shot%202016-04-19%20at%202.58.30%20PM.png" alt=""></span></p>
<p><span>Seasonal rise in tobacco prices.</span></p>
<p><span>There is no indexing of tobacco in the March quarter but historically this quarter has tended to see strong rises anyway. We have taken the view that there is a clear risk of a strong rise in tobacco prices again this March quarter. We also note that the Inflation Gauge also reported solid price rises for tobacco in Q1.</span></p>
<p><span>Holiday travel costs will be reversed in Q3.</span></p>
<p><span>Holiday travel was a touch stronger than expected in Q4 following on from a weaker than expected print in Q3. So it would be tempting to put in a softer than usual forecast for Q1 but BITRE (Bureau of Infrastructure, Transport &amp; Regional Economics) data on best price economy airfares is pointing to just a modest decline, as good as flat. So with the Inflation Gauge highlighting some modest gains in domestic holiday travel we have pencilled in a 2percent rise in domestic holiday costs, added to the small 0.5percent rise in international holidays. The rise in international holidays is due to the trickle through impact of the depreciation of the AUD offsetting the usual out of season discounting.</span></p>
<p><span>Dwelling prices have moderated.</span></p>
<p><span>Dwelling prices have been very volatile of late. Melbourne dwelling prices were particularly volatile in 2015 but as the year ended we were surprised by a 0.2percent decline in Sydney dwelling prices - the softest print since Q4 2011. Just as we saw in Melbourne in 2014, we don’t expect this to be repeated and, in fact, a bit of a bounce </span></p>
<p><span>Sydney dwelling prices is very likely.</span></p>
<p><span>Westpac is expecting dwelling prices to hold their more modest pace in Melbourne and Brisbane with the mix of outcomes in the other cities pointing to a 0.6percent gain in Q4.</span></p>
<p><span>Housing overall makes a positive contribution of 0.11ppts.</span></p>
<p><span>Rents are expected to remain on a very benign path with a gain of just 0.3percent (was 0.2percent in Q1 so there are downside risks to this forecast) with modest gains in other housing costs and utilities.</span></p>
<p><span>AUD depreciation will have a modest impact.</span></p>
<p><span>We also expect to see more, if still modest, pass through of the inflationary impact of the AUD depreciation. This will appear as a moderation to the usual seasonal discounting of household contents and services; our forecast for a 0.7percent fall follows on from a 0.6 percent rise in Q4 and an average fall of 1.1 percent in the previous three March quarters. We also expect to see more modest than usual discounting for clothing &amp; footwear, –1.1 percent/qtr compared to –2.5 percent/qtr in the last three March quarters.</span></p>
<p><span>Overall seasonality tends to be negative in Q1.</span></p>
<p><span>Despite the usual seasonal rise in pharmaceutical, heath services and education in Q1, the ABS now reports Q1 with a seasonal negative as our seasonally adjusted estimate, using the current ABS seasonal factors for March 2016, is 0.1ppt stronger at 0.5 percent than our headline CPI forecast. In fact rounding hides the full impact of the seasonal adjustment, 0.15ppts at two decimal places. Seasonal discounting in clothing &amp; footwear and household contents are now having a greater impact on seasonality in the survey than the annual price resetting in administrative prices.</span></p>
<p><span>There is an important caveat however: the ABS conducts concurrent seasonal re-analysis and the revisions to the seasonal factors can sometimes be quite significant. As such, we caution that we can’t be sure what the ABS will estimate as the seasonal impact in Q1. This matters as the components of the CPI are seasonally adjusted before they are trimmed for the core measures. As such, revisions to the seasonal factors can impact not just the current estimate of core inflation but also historical estimates.</span></p>
<p><a href="/images/2016/04/19/Screen%20Shot%202016-04-19%20at%203.04.07%20PM.png" target="_blank"><span>Click to enlarge</span></a></p>
<p><span><img src="/images/2016/04/19/Screen%20Shot%202016-04-19%20at%203.04.07%20PM.png" alt=""></span></p>
<p><span>Core inflation to remain at the bottom of the band, just.</span></p>
<p><span>Westpac is forecasting the average of the core measures to rise 0.6percent in Q4 with the annual pace holding flat at 2.0percentyr.</span></p>
<p><span>Traded goods &amp; services are forecast to fall 1.3 percent/qtr moderating the annual pace to 0.7 percent/yr from 0.8percentyr; non-traded prices are also forecast to rise 1.2 percent/qtr lifting the annual pace to 2.5 percent/yr from 2.3 percent/yr. Non-traded prices remain the key source of inflationary pressures with the focus still on housing and recreation.</span></p>
<p><span>Risks balaced for headline, downside for core.</span></p>
<p><span>A seasonally soft March quarter is a recent phenomena that emerged during the time of a very robust AUD which appears to have inspired greater post-Christmas sales discounting. This March, we are expecting some modest pass through from the weaker AUD but falling petrol prices and modest gains in housing costs will keep the lid on both headline and core inflation. While the Melbourne Institute Inflation Gauge points to a robust Q1 CPI print, we acknowledge downside risks to our core inflation forecast as core inflation has recently tended to surprise us on the soft side. </span></p>
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<p><em>Justin Smirk is ‎senior economist, Westpac Group and can be contacted <a href="https://www.westpac.com.au/about-westpac/westpac-group/" target="_blank">here</a>.\</em></p>
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jchancellor-FAypfDUnLy

Australian Q1 CPI preview: Westpac's Justin Smirk

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<p>Renovation costs in New South Wales rose a sharp 8.11% year-on-year, compared to a national increase of only 1.48%, reveals a new report by services marketplace ServiceSeeking.com.au.</p>
<p>The Renovation Consumer Price Index (RCPI) is a quarterly report by serviceseeking.com.au, analysing 52,000 quotes submitted by tradesman on the website. The report compares the cost of renovating in Q2 FY16 versus the prior year.</p>
<p>For the report, the company used an interactive map that plots price changes across 10 popular renovation services in New South Wales year on year.</p>
<p>NSW was the only state to see a price increase in 10 out of 10 popular renovation services, in part because of trades shortage.</p>
<p>“We're now really starting to see the effects of a cooling property market" said CEO Jeremy Levitt. "As homeowners steer away from purchasing new property, they're investing in their existing properties through value-adding renovations which has pushed prices up.”</p>
<p>The average tradesman charges $64.09/hr, making NSW the second most expensive state to renovate a home (and now more expensive than Queensland).</p>
<p>Carpentry and building saw the largest price increases, up 26.26% and 18.48% respectively.</p>
<p>Although there were across-the-board increases, some services didn’t fluctuate much. For example, prices for electrical work increased 1.23% and concreting rose by 3.18%.</p>
<p><a href="https://www.serviceseeking.com.au" target="_blank">Serviceseeking.com.au</a> has more than 1.96 million jobs listed on its website to date with over 6.8 million quotes compared.</p>
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prateek24-ezbwHMbNAk

Home renovations jump 8% in New South Wales: serviceseeking.com report

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<p>GUEST OBSERVER</p>
<p><strong>The rise in the CPI was well below expectations ... </strong></p>
<p>Regarding the headline, the CPI rose 0.5% in Q3, well below expectations. The annual rate was flat at 1.5%yr and only marginally up on the recent low of 1.3%yr in the March quarter. </p>
<p>When you compare the chart of expected contributions to the Q3 CPI with the chart of actual contributions you can see there was widespread weakness or dissapointment. The one upside surprise is motor vehicles where prices rose slightly rather than falling as expected.</p>
<p><strong>... &amp; the ABS estimates a significant positive seasonality ... </strong></p>
<p>The ABS estimates significant positive seasonality for the Septmember quarter of –0.4ppts. That is prices tend to see a larger rise in Q3. As such, the seasonally adjusted CPI rose just 0.1%qtr in the September quarter. </p>
<p><strong>... so core measures softer at 0.3%qtr.</strong></p>
<p>The core measures, which are seasonally adjusted, came in at an average of 0.3%qtr, softer than expectations for a 0.5%qtr print. In the quarter, the trimmed mean rose 0.28%qtr while the weighted median lifted 0.29%qtr.</p>
<p>The annual pace of the average of the core inflation measures is now 2.2%yr, which is below the mid-point of the RBA’s target band. In addition, the six month annualised pace is just 2.5%yr, a moderated from the recent peak of 2.7%yr in Q1. Before that, the peak for the six month annualised pace of core inflation was 3.1% in 2013Q4. </p>
<p><strong>Is retail competition holding back traded goods inflation? </strong></p>
<p>What was particularly interesting was the very modest rise in food prices of just 0.1%qtr. There was a softer than expect 0.2% rise in fresh fruit &amp; vegetables due to the mix of a 8.2% rise in fruit mostly offset by a 5.9% fall in vegetables. Also falling in price in the quarter were bread &amp; cereal products, dairy &amp; related products, other food products and non-alcoholic beverages. We know that Australia’s grocery chains have been under increasing competition from new entrants who have been improving their domestic supply chains, opening new stores and openly competing with the incumbents on price. We suspect that this is not only holding prices down, despite rising wholesale prices associated with seasonal conditions and the weaker AUD, but actually pushing prices lower.</p>
<p><strong>We were surprise in Q2 by the soft 0.3%qtr rise in meals out &amp; take away foods; in Q3 there was the more normal rise of 0.6%qtr. </strong></p>
<p>Other areas where we are saw ongoing deflationary pressures in tradable goods in the quarter was in telecommunications equipment &amp; services (–2.0%), clothing &amp; footwear (–1.1%), fuel (–1.7%), audio visual &amp; computing equipment (–1.4%) and somewhat surprisingly, domestic holiday travel &amp; accommodation (–0.9%). The later followed a surprising 5.4% fall in domestic holiday prices, which was much weaker than what the airfare data was suggesting. Was the correction or transfer into the CPI data delayed until the December quarter?</p>
<p>We had expected that sometime weaker AUD impact on international holiday prices to appear sometime in 2015 but in the June quarter we were surprised with the fall of 1.3%. We may now be seeing the start of the AUD depreciation impact of the with the 4.6% rise in the September quarter.</p>
<p><strong>Non-traded prices are steady </strong></p>
<p>The pace of non-traded inflation remains modest with a 0.4% gain in Q3 holding the annual pace flat at 2.6%yr, up from the recent low of 2.3%yr in the December quarter 2014.</p>
<p>Helping to hold back momentum in non-traded inflation this quarter were ongoing modest gains in housing costs. This is due, in part, to a moderation in dwelling prices (0.7%qtr/4.3%yr) as the pace eased back in Sydney (1.1%qtr/7.0%yr from 2.4%qtr/8.1%yr in Q2) and we saw the first outright fall in Perth (–0.3%qtr/1.9%yr) since June 2009.</p>
<p>Dwelling costs inflation is starting to ease in Sydney as it has been doing for some time in the other capital cities. In addition, rental inflation continues to moderate, as does utility price inflation. This all matters. Where housing inflation goes, so too goes non-traded inflation.</p>
<p><strong>Looking forward it is housing remains key but watch the spread of price increases</strong></p>
<p>For Q4, as long as crude oil prices don’t surge again from here, or the AUD collapses, then transport fuel should be a modest drag on the CPI. To some extent, the magnitude of the drag will depend on the refining margin for Singapore gasoline, which we don’t expect to narrow in any meaningful way between now and year end.</p>
<p>We are surprised that the weaker AUD has not shown up more in some price resetting for clothing &amp; footwear, household furnishings and, possibly, audio visual and computing equipment. As such, we have tempered our view on AUD pass through this year. We are also closely watching what is happening to motor vehicle prices; the lower AUD is a positive for prices but the Free Trade Agreements we have signed with major auto producers represent a meaningful offset. Was the 1.1% rise in Q3 just a one off price reset or the start of a more meaningful adjustment for Australian auto prices. We expect to see a little more in Q4.</p>
<p><strong>For non-traded inflation, rents continues to ease and dwelling prices have moderated a touch as Sydney prices come off the boil. </strong></p>
<p>Of course after seasonal adjustment and the trimming of the more extreme moves, housing inflation remains a key factor determining the outlook for core inflation. Our preliminary estimate for the average of the core measures for Q4 is 0.6%qtr/2.2%yr with more negatives trimmed out.</p>
<p> </p>
<p><em>Justin Smirk is ‎senior economist, Westpac Group and can be contacted <a href="https://www.westpac.com.au/about-westpac/westpac-group/" target="_blank">here</a>.</em></p>
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Broad based softness points to a retail price squeeze: Westpac's Justin Smirk

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<div>A surprisingly soft inflation result, and one which puts further interest rate cuts right back in the frame, if indeed they ever snuck out of shot.<br><br>
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<div>Headline CPI printed at 0.5% for the June quarter for an annual result of just 1.5%, well beneath the target range of inflation, thereby locking in the weakest run of inflation results we have seen in years.<br><br>Indeed the index numbers show that the headline result was weaker still, and only rounding took the headline figure up to 0.5% for the September quarter.</div>
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<div>The soft result was influenced by the declining price of vegetables (!), telco quipment &amp; services, and perhaps more predictably, automotive fuel. </div>
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<div><span>Non tradables or domestic inflation came in at a soft 0.4% for the quarter and 2.6% for the year, suggesting that domestic price pressures are fairly subdued, while tradables inflation remained very soft. </span></div>
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<span>Despite the Aussie dollar having tanked all the way from above parity against the US dollar to around 71.3 cents after this release, there still seems to be little evidence of inflationary pressure.</span><br><br><span>This is generally viewed as a sign of weakness for the economy, with wages growth sundued and sentiment too weak to see the higher prices of imports to be passed on to consumers.</span><br><br><span>Most significantly of all the underlying measures of inflation - the trimmed mean and weighted median - both came in at just 0.3% for the quarter, for annual prints of  2.1 and 2.2% respectively.</span>
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<div>These figures will be seen to add to the case for further interest rate cuts with inflation sinking towards the bottom end of the target range and unemployment remaining above 6%.</div>
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<div>Futures markets are undecided about an interest rate cut on Melbourne Cup Day next week (62% chance), but hav priced in a high probability of the cash rate being dropped once again before the Christmas break.</div>
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<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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Veggie price decline influences inflation outcome: Pete Wargent

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<p><span>GUEST OBSERVER</span></p>
<p><span>The headline CPI lifted 0.7% in Q2 compared to Westpac’s 1.0% forecast and the market’s expectation for 0.8%. The annual rate is now 1.5%yr compared to 1.3%yr in Q1, 1.7% in Q4 and 2.3%yr in Q3.  </span></p>
<p><span>The core measures, which are seasonally adjusted and exclude extreme moves, rose 0.5%qtr compared to market expectations of 0.6%qtr and Westpac’s estimate of 0.5%qtr. In the quarter, the trimmed mean gained 0.56% while the weighted median lifted 0.51%. The annual pace of the average of the core inflation measures is now 2.3%yr, a slight moderation from the 2.4%yr pace in Q1.</span></p>
<p><span>The six month annualised pace of core inflation was 2.5%yr in Q2 a moderation from the 2.8%yr in Q1 and moving back toward the 2.1%yr pace at the end of 2015. Core inflation continues to meet the RBA’s expectations for inflation to remain within the band.</span></p>
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<p><span>In the June quarter the expected surge in petrol prices was there (12.2%qtr) but the big surprise for us was the soft print on food, –0.2%qtr, in part due to a very soft –1.2% from fresh fruit &amp; vegetables. Also surprising us on the downside was a –3.4% fall in holiday travel. Clothing &amp; footwear rose much as expected at 1.3%qtr.</span></p>
<p><span>Housing costs continue to underpin both core and non-tradeable inflation rising 0.7%qtr driven by a very solid 1.5% rise in dwelling purchase prices. To this was added the solid gains in hospital &amp; medical services (3.4%qtr) and alcohol &amp; tobacco (1.2%qtr). The modest offsets came from pharmaceuticals (–1.8%qtr), audio visual &amp; computing services (–1.6%qtr) and communications (–0.6%qtr). </span></p>
<p><span>Traded goods, boosted by fuel, gained 1.2%qtr/–0.3%yr, while non-traded goods (housing, health and education) were around expectations at 0.5%qtr/2.6%yr. </span></p>
<p><span>Despite the downside surprise on food, the CPI came in much as expected with housing continuing to underpin modest outcomes for core and non-tradeable inflation. </span></p>
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<p><em>Justin Smirk is senior economist, Westpac Group and can be contacted <a href="https://au.linkedin.com/pub/justin-smirk/9/1b9/b2a" target="_blank">here</a>.</em></p>
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