<p>Property developer One Living, backed by former Macquarie banker turned investment manager Chris Green’s investment firm, has unveiled plans to bring more institutional capital into housing to help address the national supply crisis.</p>

<p>The New York-based investor has focused his firm, GreenPoint Partners, on addressing the supply shortage hitting middle market housing in Australia.</p>

<p>It is backing the new One Living business to develop more than 1000 units along the eastern seaboard. The new firm is starting with a development on Mona Vale Road, on the border of Mona Vale and Pymble, in Sydney’s Northern Beaches, with around 140 apartments planned. They are eyeing off more sites across the city.</p>

<p>With cost pressures rising in the industry, One Living’s model is to be a vertically integrated developer-builder, so it can respond directly to the housing gap by removing the cost inefficiencies embedded in traditional residential delivery.</p>

<p>“We are building a platform designed to operate at scale and starting in a market where there’s a clear need for quality, attainable housing,” One Living joint managing director Joseph Scuderi said.</p>

<p>“It’s that missing middle – it’s that attainable end of housing… that’s what most Australians invest into and what Australians can actually afford.”</p>

<p><img alt="Mona Vale" data-entity-type="file" data-entity-uuid="798dfa93-4941-4db6-a696-31e9dc18e81c" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%202.31.50%E2%80%AFPM.png?VersionId=mKBqi5C_DmeiXS.AtJkcR8LQIxqCqmFi" /></p>

<p>GreenPoint Partners brings years of experience assembling and scaling real estate operating businesses across major markets. And Green sees a big opportunity in Australia.</p>

<p>“For its size, sophistication and importance to the community, Australia’s living sector has remained largely under-institutionalised, which represents significant opportunity,” Green said. “GreenPoint identified that gap, assembled the right team, and is backing One Living to build a platform that is aligned to market needs.”</p>

<p>Green said being a builder-developer would give the company the capacity and flexibility it required to deliver reasonably-priced homes.</p>

<p>“We want it to be at that attainable level; not super high end luxury but at that attainable level,” he said.</p>

<p><img alt="Mona Vale" data-entity-type="file" data-entity-uuid="74a5344a-4b26-4d4a-ada3-056b1220be77" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%202.32.15%E2%80%AFPM.png?VersionId=vY8hXHO4reBMdO8ZXMWCNtGZJofUPQ3j" /></p>

<p>&nbsp;</p>

<p>One Living will undertake a component of affordable housing in its schemes, which it will own and operate, and it could also run build-to-rent on some sites.</p>

<p>Green praised local policy settings.</p>

<p>“The NSW government is being very supportive, strategic and pragmatic in terms of how do we generate more supply of housing,” he said. “We think it’s actually positive for development and the bit that’s been lacking at that attainable level is that it’s lots of relatively small private developers, whereas we want to create an institutional platform.”</p>

<p>One Living is also&nbsp;looking at high-density projects and could take on more institutional funding in the future.</p>

<p>“The way we will be able to achieve economies of scale is through size,” Green added.</p>


Joel Robinson

One Living enters Sydney's new apartment market with Northern Beaches site acquisition

<p>It's been several years since there's been an opportunity to buy a brand new townhome in Melbourne's coastal suburb of Mordialloc. Even apartment developments in recent times have been few and far between in the area.</p>

<p>Local developer LDS Property identified the gap in new housing, securing a site on White Street, directly opposite&nbsp;Woodlands Golf Club Mordialloc. They've recently launched&nbsp;<a href="https://www.apartments.com.au/new-townhouses/wm-residences-mordialloc-102-white-street-mordialloc-vic-3195">WM Residences</a>, just 13 townhouses which they have already started building.</p>

<p>Projects by Buxton Director Heath Thompson, who is selling WM Residences, says the townhouses x that perfect middle ground be</p>

<p data-end="683" data-start="511">"Mordialloc residents have had limited options to downsize within the suburb, often forcing them to look elsewhere despite long-standing ties to the area," Thompson says.</p>

<p data-end="882" data-start="690">"With very little comparable new supply coming to market, projects like WM Residences are well placed, particularly as buyers look to capitalise on current conditions amid constrained supply."</p>

<p data-end="882" data-start="690">[smartcode_project:default project_id=134646 project_image_fid=6109]</p>

<p>The development, designed by regarded architecture firm&nbsp;<a href="https://www.apartments.com.au/architects/ewert-leaf">Ewert Leaf</a>,&nbsp;adopts a deliberately restrained architectural approach, focusing on simplicity, durability and liveability rather than overt design gestures.</p>

<p>The boutique scale is central to the offering. With only 13 three-bedroom residences, each home is configured to prioritise functional layouts and everyday use, supported by private terraces and secure two-car garages.</p>

<p>Ewert Leaf’s design response leans into a calm, neutral material palette. Interiors are defined by oak flooring, white walls and soft finishes, creating a consistent and understated backdrop. The approach avoids trend-driven detailing in favour of longevity, with an emphasis on natural light and spatial clarity.</p>

<p>[smartcode_project:default project_id=134646 project_image_fid=6110]</p>

<p>Beyond aesthetics, the homes are designed to meet contemporary performance expectations. Each residence targets a minimum 6-star energy rating, incorporating double glazing, comprehensive insulation and all-electric Bosch appliances.</p>

<p>The project’s location supports a walkable coastal lifestyle, sitting within close proximity to Mordialloc’s foreshore, Main Street retail strip and the train station. Local cafés and dining venues, including Suburbia Deli and Hendriks Café, are within a short walk, reinforcing the area’s established neighbourhood character.</p>

<p>[smartcode_project:default project_id=134646 project_image_fid=6116]</p>

<p data-end="247" data-is-last-node="" data-is-only-node="" data-start="0">While <a href="https://www.apartments.com.au/developments/mordialloc-vic-3195">Mordialloc</a> is often defined by its beach and pier, the project taps into other areas of day to day living, offering easy access to local food, casual dining and transport, rather than positioning itself purely as a lifestyle retreat.</p>

<p>WM Residences reflects a continued trend across Melbourne’s coastal suburbs towards smaller-scale, design-led townhouse developments, particularly on infill sites where proximity to amenity is already established.</p>

<p>With construction commenced prior to its market entry, the project aligns with a growing preference among buyers for developments with visible progress and defined delivery timeframes.</p>

<p>[smartcode_project_cta:default project_id=134646]</p>


WM Residences fills gap in Mordialloc townhouse market

<p>&nbsp;</p>

<p>Developer GURNER™ Group has revealed $1.65 billion in residential sales nationally across the 12 months to December 2025, driven largely by the continued momentum of its Docklands wellness-focused precinct, Elysium Fields.</p>

<p>The sales result was generated across seven projects in Victoria and New South Wales, headlined by Elysium Fields, GURNER™’s $2.75 billion mixed-use precinct planned for Harbour Esplanade in Docklands.</p>

<p>The project has recorded more than $500 million in sales across the first three towers, equating to around 580 apartments sold.</p>

<p>The first tower, Helios, has now sold out of its 240 private residences, with GURNER™ preparing to release a premium penthouse collection comprising 15 three-bedroom penthouses in coming weeks.</p>

<p>[smartcode_project:default project_id=144441 project_image_fid=370975]</p>

<p>Elysium Fields is being developed on the long-held 20,000 sqm Docklands site at 208-226 Harbour Esplanade, which had remained undeveloped for more than two decades prior to GURNER™ taking over the project around four years ago.</p>

<p>Construction has now commenced across four towers ranging between 18 and 30 storeys, with Hamilton Marino and Maxcon appointed as builders.</p>

<p>Once complete, the precinct is expected to comprise around 1,100 residences, alongside retail, hospitality and public realm uses integrated throughout the site.</p>

<p>[smartcode_project:default project_id=144441 project_image_fid=370981]</p>

<p>Designed by Fraser &amp; Partners in collaboration with GURNER™ Design House, the project has been positioned around the developer’s broader focus on wellness-led residential living.</p>

<p>“We don’t sell apartments. We create a true luxury lifestyle that simply doesn’t exist elsewhere in the market today,” Founder and Executive Chairman Tim Gurner said.</p>

<p>“To deliver that requires an extraordinary level of detail, coordination and discipline across multiple verticals, from design and hospitality through to wellness and service.”</p>

<p>“We’ve always believed that living extends far beyond the physical residence. It’s about how you feel the moment you arrive, how you live day-to-day, and the ecosystem that supports that.”<br />
[smartcode_project:default project_id=144441 project_image_fid=370977]</p>

<p>The project’s design places a heavy focus on landscaping, wellness amenities and biophilic design principles.</p>

<p>Plans include around 3,700 sqm of landscaped gardens and open space throughout the precinct, alongside a retail and dining offering spanning approximately 5,000 sqm.</p>

<p>The broader public realm strategy centres around what GURNER™ describes as the “Path of Life”, an urban forest and landscaped pedestrian environment intended to connect the various buildings and wellness spaces across the precinct.</p>

<p>The apartments themselves will incorporate a range of wellness-focused inclusions, including purified air and water systems, circadian lighting, antimicrobial surfaces, and optional in-home wellness upgrades.</p>

<p>[smartcode_project:default project_id=144441 project_image_fid=370980]</p>

<p>Gurner said the company’s experience through its Saint Haven wellness clubs had directly informed the residential offering now being incorporated into Elysium Fields.</p>

<p>“We’re seeing a clear global shift toward longevity, performance and proactive health,” Gurner said.</p>

<p>“Our role is to deliver that in a way that feels seamless, highly private and beautifully resolved within the environments we create.”</p>

<p>A large component of the wellness offering is planned through the resident amenity and health facilities proposed within the precinct.</p>

<p>That includes plans for bathing and recovery facilities spread throughout the towers, incorporating mineral pools, saunas, steam rooms, flotation therapy, red light therapy and wellness lounges.</p>

<p>The developer is also seeking approvals for what it describes as a “reverse ageing medical clinic” within the precinct.</p>

<p>[smartcode_project:default project_id=144441 project_image_fid=370978]</p>

<p>According to project information released by the group, the proposed facility would include cryotherapy, IV infusion therapy, infrared and dry saunas, PEMF beds, MRIs, DEXA scans, brain scans and blood analysis services.</p>

<p>Within the first tower, Helios, residents will also have access to a dedicated amenity offering known as the Sky Private Club.</p>

<p>The upper 15 levels of the building will include private lounges, dining spaces, rooftop amenities and optional private wellness studios integrated within residences.</p>

<p>The Helios tower itself comprises 260 apartments ranging between 60 sqm and 300 sqm, including a collection of penthouses.</p>

<p>That includes a planned two-storey penthouse spanning around 600 sqm with uninterrupted bay views.</p>

<p>The Elysium Fields precinct is being delivered in partnership with Digital Harbour Holdings, a consortium that includes the Liberman family, which controls the development rights across the Docklands site.</p>

<p>[smartcode_project:default project_id=144441 project_image_fid=370979]</p>

<p>The sales result comes as GURNER™ continues expanding its national development pipeline beyond Victoria.</p>

<p>“We have a strong pipeline across Australia and are now focused on scaling into key markets including New South Wales and Queensland, while continuing to build on our Melbourne base,” Gurner said.</p>

<p>“We currently have more than $3 billion in the market, growing to over $5 billion by October, and expect to materially outperform last year in the 2026 calendar year.”</p>

<p>The result also reflects the continued strength of the upper-end apartment market in Melbourne, particularly for owner-occupier-focused product with large-scale amenity and lifestyle offerings.</p>

<p>[smartcode_project_cta:default project_id=144441]</p>


Record result anchored by the Group’s “utopian” Elysium Fields precinct – defying market headwinds in Docklands.

Elysium Fields drive Gurner to $1.65 billion in apartment sales over 2025

<p>National Australia Bank (NAB) will fund <a href="https://www.apartments.com.au/new-apartments/palmera-residences-gold-coast-18-garfield-terrace-surfers-paradise-qld-4217">Palmera</a>, a $1 billion, 52-level luxury residential tower being developed by Central Equity in one of the Gold Coast’s most tightly held coastal locations at Northcliffe.</p>

<p>The project, launched recently by <a href="https://www.apartments.com.au/developers/central-equity">Central Equity</a>, one of Victoria’s largest private residential developers, comes at a time when construction funding for large residential developments has become increasingly competitive as lenders tighten exposure to the sector.</p>

<p>Multiplex has been appointed the builder, and construction is now underway.</p>

<p>[smartcode_project:default project_id=108274 project_image_fid=365784]</p>

<p>Since its first project, Central Equity has delivered more than 85 residential developments with a combined end value exceeding $8 billion.</p>

<p>Palmera reflects Central Equity’s growing focus on the Gold Coast luxury apartment market and continues a relationship between Central Equity and NAB that dates back to the late 1980s, when the bank funded one of Melbourne’s earliest inner-city residential towers at a time when high-rise apartment living in the CBD was largely unproven.</p>

<p>“NAB’s funding of Central Equity’s $36 million CBD development in the late 1980’s to the financing of the billion-dollar tower today highlights the long-term relationship between the two organisations in delivering major residential projects” said Central Equity Founder and Chairman Eddie Kutner.</p>

<p>He said NAB’s early support was instrumental in helping establish the company’s development model.</p>

<p>“When we commenced our first residential tower in the late 1980s the concept of funding off-the-plan apartments was still largely untested in Australia,” Kutner said.</p>

<p>“NAB recognised the opportunity early and supported the project when others were uncertain. That relationship has now continued for more than 37 years across many developments.”</p>

<p>[smartcode_project:default project_id=108274 project_image_fid=365771]</p>

<p>Central Equity was established in 1987 when Melbourne’s CBD and Southbank precinct were still dominated by warehouses and commercial buildings. Fewer than 100 residents lived in Southbank at the time, and large-scale residential development in the inner city was not widely considered.</p>

<p>Recognising changing demographics and lifestyle preferences, the company began developing high-rise residential projects designed to bring permanent residents into the city centre.</p>

<p>Central Equity has provided accommodation for approximately 40,000 residents across Melbourne’s CBD and Southbank, while also incorporating supporting infrastructure including essential lifestyle facilities like retail spaces, childcare facilities and neighbourhood activity centres.</p>

<p>Central Equity has spent many years assembling the Palmera development site on the corner of Garfield Terrace and Frederick Street in Northcliffe, creating a supersite of around 3,300 sqm.</p>

<p>The developer said the Palmera apartment tower reflects its long-term view of the Gold Coast as a growing and increasingly diversified economy.</p>

<p>[smartcode_project:default project_id=108274 project_image_fid=365768]</p>

<p>Supported by infrastructure including the light rail network, major road upgrades expanded education, hospital and medical facilities and continued expansion at the Gold Coast Airport with more international and domestic flights.</p>

<p>Positioned in the tightly held Northcliffe precinct, the 52-level tower will deliver 347 apartments, targeting buyers seeking a high-end coastal lifestyle, from downsizers to interstate investors.</p>

<p>Designed by Marchese Partners with interiors by DBI, Palmera has been conceived as a next-generation residential offering, featuring a collection of oversized apartments, with premium three-bedroom residences offering sweeping northern views stretching from Surfers Paradise through to Burleigh Heads.</p>

<p>[smartcode_project_cta:default project_id=108274]</p>


NAB funds $1 billion Surfers Paradise apartment development, Palmera

<p>Two years after completing one of the newest developments in North Sydney, developer <a href="https://www.apartments.com.au/developers/aqualand-australia">Aqualand</a> is turning its attention to the rapidly evolving St Leonards apartment market.</p>

<p>The developer, which completed AURA by Aqualand on North Sydney's Walker Street, has lodged plans for a 5,918 sqm site at <a href="https://www.apartments.com.au/new-apartments/33-37-herbert-street-st-leonards-nsw-2065">33-37 Herbert Street, St Leonards,</a> seeking approval for a pair of residential towers rising above a shared podium opposite Royal North Shore Hospital.</p>

<p>The proposal forms part of the broader transformation underway across the St Leonards-Crows Nest precinct, where former industrial and commercial sites are increasingly being redeveloped into high-density mixed-use projects tied to major transport infrastructure.</p>

<p data-end="792" data-start="529"><img alt="Aqualand" data-entity-type="file" data-entity-uuid="2cc428cf-fe70-4cac-9cd5-264ad53af62c" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%209.51.56%E2%80%AFAM.png?VersionId=otKSnHtbjAvAddOnovyXQMgcAwE6DMe1" /></p>

<p data-end="1040" data-start="794">According to the planning documents, the site sits “within the St Leonards–Crows Nest Strategic Centre, identified by the NSW Government as a key area for accommodating future jobs and housing across Sydney.”</p>

<p>The proposal has been designed by fjcstudio, formerly FJMT Studio, and is being progressed through the State Significant Development pathway due to its scale and affordable housing provision.</p>

<p>The scheme would comprise 413 apartments, including 46 affordable housing units, alongside retail and commercial uses fronting Herbert Street. The project would also include communal open space, landscaping, a swimming pool, gymnasium, children’s play areas and podium-level resident amenities.</p>

<p>Planning documents show the development would consist of a part-13, part-39 storey tower form positioned above a four-storey podium.</p>

<p>“The development comprises a unified podium that activates the street interface, and two setback towers to accommodate new housing supply while maintaining an appropriate human scale at ground level,” fjcstudio noted in its Design Report.</p>

<p>The northern and southern towers have been shaped to respond to the surrounding skyline while also limiting overshadowing impacts to nearby public open space, particularly Talus Reserve.</p>

<p>The design report said the differing tower heights were intended to “contribute to a varied skyline while responding to the surrounding built form context and solar access considerations.”</p>

<p><img alt="Aqualand" data-entity-type="file" data-entity-uuid="36da62dc-ff9e-41f2-a7e3-7be38373751c" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%209.51.45%E2%80%AFAM_0.png?VersionId=Mo6Rp2r.XRLTzIfg_PEEpw8NepDH8UBs" /></p>

<p>The site sits directly opposite Royal North Shore Hospital and within walking distance of both St Leonards Station and the new Crows Nest Metro station.</p>

<p>While the site itself sits just outside the formal Crows Nest Transport Oriented Development boundary, the planning documents repeatedly reference its alignment with the broader TOD objectives reshaping the Lower North Shore.</p>

<p>“The site is located adjacent to St Leonards Station and in close proximity to Crows Nest Metro which is within the Crows Nest Transit Orientated Development Accelerated Precinct which has been identified by the NSW Government to support housing delivery,” the Design Verification Statement noted.</p>

<p>According to fjcstudio, the project has been designed to respond to the broader transition occurring across St Leonards, where increasing residential density is being concentrated around transport infrastructure and employment hubs.</p>

<p>“The broader precinct is undergoing significant change, with a mix of existing mid-rise buildings and newer high-density developments,” the report stated.</p>

<p>“Recent and approved projects indicate a consistent shift toward taller built form, typically organised as tower-and-podium typologies with more active ground levels.”</p>

<p>The proposal includes close to 6,000 sqm of retail and commercial space across the ground floor and podium levels, designed to create a more activated street edge along Herbert Street.</p>

<p>Aqualand’s plans would also introduce a landscaped podium shared between the two towers, with communal open space in the form of a podium rooftop designed to support resident interaction and improve urban greening outcomes. The scheme would also introduce pocket parks at the northern and southern ends of the site, including a landscaped area at the corner of Herbert and Ella streets designed to improve pedestrian amenity and soften the streetscape.</p>

<p>&nbsp;</p>

<p>The proposal is being progressed through the NSW Government’s Housing Delivery Authority pathway, which was introduced to accelerate housing supply across the state. The application was declared State Significant Development in April 2025 following an expression of interest process.</p>

<p><img alt="Aqualand" data-entity-type="file" data-entity-uuid="faf6d97d-2671-454f-b85a-fe1c6a7be608" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%209.51.49%E2%80%AFAM.png?VersionId=diVd28OBVr5.YV.7prrOz.uAanwwwm7a" /></p>

<p>St Leonards has been particularly active with new developments in recent weeks. Developer SP Setia’s <a href="https://www.apartments.com.au/news/nsw/first-look-sp-setia-targets-st-leonards-skyline-with-40-storey-tod-tower">plans for a new 42-storey tower</a> recently went on exhibition through the same pathway, while <a href="https://www.apartments.com.au/news/nsw/first-look-stockland-plans-52-storey-538-apartment-st-leonards-tower">Stockland’s 52-storey tower proposal</a> was also recently unveiled.</p>

<p>Aside from the St Leonards project, which is expected to take around nine months to move through the approvals process ahead of a potential 2027 launch, Aqualand is also preparing to launch Boronia, a new apartment project in Roseville comprising around 111 apartments on Larkin Street.</p>

<p>The developer also has approvals in place for the next stage of the Barangaroo precinct, which will feature new residential, retail, hospitality and community uses, alongside a new metro entry across the five-hectare site.</p>

<p>More than 50 new retail destinations are planned for Central Barangaroo, alongside a 270-metre-long boulevard connecting Hickson Park to Nawi Cove. Together with Harbour Park, more than 50 per cent of the precinct will comprise public open space and parkland.</p>


First look: Aqualand joins St Leonards apartment party

Economy

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<p>GUEST OBSERVER </p>
<p>In February, more new sports utility vehicles (SUVs) or four-wheel drive vehicles were sold than passenger cars for the first time.</p>
<p>Yes, SUVs have overtaken cars and the gap is likely to grow over time. Buyers are liking the riding position, versatility and fit-out of SUVs and there are now a variety of model sizes to suit all preferences.</p>
<p>  There is a bit of conjecture about which country holds the record for the longest economic expansion. The latest OECD data suggests that Australia already holds the record. The Netherlands had an expansion of 86 quarters (December quarter 1981 to March quarter 2003) while Australia has notched up 102 quarters (September quarter 1991 to December quarter 2016).</p>
<p>The Reserve Bank is unlikely to settle the matter, downplaying the importance of whether Australia has the world’s longest expansion. Still, the bottom line is that the economy is doing well and has done so for quite some time.</p>
<p><a href="https://www.propertyobserver.com.au/images/2017/03/06/Screen%20Shot%202017-03-06%20at%201.40.46%20PM.png" target="_blank">Click to enlarge</a></p>
<p><img src="https://www.urban.com.au/images/2017/03/06/Screen%20Shot%202017-03-06%20at%201.40.46%20PM.png" alt=""></p>
<p>Consumers are spending, not splurging. But the pace of sales is certainly sustainable. The lift in spending in January of 0.4 per cent matched the average pace over the past six months and this exceeds both the 5-year and decade-average sales growth of 0.3 per cent a month. </p>
<p>Spending at takeaway food stores continues to be remarkable – up 1.6 percent in January and up 11.9 percent on a year ago. Competition is strong, keeping prices down, and that is causing people to sample the wares of the large range of food outlets. Ann increased range of “healthy choices” is also causing people to try the new offerings.</p>
<p>Job advertisements have been choppy in recent months while employers work out what their labour requirements are likely to be over 2017. Despite a dip in the seasonally adjusted number of job ads, trend growth is still rising and in fact annual trend growth is the best in seven months. The jobless rate looks set to hold between 5.5-6.0 percent.</p>
<p>National retail petrol prices have eased around 6 cents a litre from recent highs, in line with wholesale prices and Asian import prices. The wholesale price is near 116 cents a litre and that should be a guide for motorists to the cheapest prices that may be offered by retailers – usually at the peak of the discounting cycle in southern and eastern capital cities. </p>
<p>What do the figures show?</p>
<p>Retail trade</p>
<p>Retail trade rose by 0.4 percent in January after falling by 0.1 percent in December. Annual sales growth lifted from 3.0 percent to 3.1 percent (5-year average gain was 4.0 percent)</p>
<p>Non-food retailing rose by 0.6 per cent in January after falling by 0.5 per cent in December. Non-food retail spending is now up 2.9 per cent on a year ago.</p>
<p>Spending rose the most at Electrical and electronic goods retailing (up 2.4 per cent) from Takeaway food services (up 1.6 per cent). Spending fell most at Pharmaceutical, cosmetic and toiletry goods retailing (down 1.4 per cent) from Department stores and Newspaper &amp; book retailing (both down 0.5 per cent).</p>
<p>Spending at takeaway food services was up 11.9 per cent on a year ago.</p>
<p><a href="https://www.propertyobserver.com.au/images/2017/03/06/Screen%20Shot%202017-03-06%20at%201.50.36%20PM.png" target="_blank">Click to enlarge</a></p>
<p><img src="https://www.urban.com.au/images/2017/03/06/Screen%20Shot%202017-03-06%20at%201.50.36%20PM.png" alt=""></p>
<p>Sales by chain-store retailers and other large retailers rose by 0.8 per cent In January after falling 0.1 per cent in December. Sales are up 4.2 per cent over the year (5-year average gain was 5.2 per cent).</p>
<p>Sales rose in six of the eight states and territories: NSW (+0.2 per cent), Victoria (+1.1 per cent), Queensland (unchanged), South Australia (+0.6 per cent), Western Australia (+0.3 per cent), Tasmania (+0.4 per cent), Northern Territory (-0.8 per cent), ACT (+1.2 per cent). Job Advertisements</p>
<p>Job advertisements fell 0.7 per cent in February from 5-year highs to 165,643 ads. Advertisements have been volatile in the past four months. In trend terms, ads rose by 0.4 per cent in the month to be up 6.6 per cent over the year.</p>
<p>New vehicle sales</p>
<p>There were 89,025 new vehicle sales in February, down 7.7 per cent on a year ago (one less selling day in 2017 than 2016). Sports Utility Vehicles (SUV) totalled 35,497 sales during February to record a 39.9 per cent share of total industry sales. Passenger cars totalled 34,740 for a 39.0 per cent share. Light commercials were the third largest segment with an 18.5 per cent share.</p>
<p>State data compared with a year ago: “In percentage terms, Western Australia showed the most marked fall. Its market dropped by 13.7 per cent, or 1,199 vehicle sales, followed by the Northern Territory (-10.7 per cent), South Australia (-10.6 per cent), New South Wales (-7.4 per cent), Victoria (-7.0 per cent) and Queensland (-6.6 per cent). Tasmania (+1.1 per cent) and the ACT (+0.3 per cent) were the only two markets to show an increase.”</p>
<p>Petrol price</p>
<p>According to the Australian Institute of Petroleum, the national average Australian price of unleaded petrol fell by 2.9 cents to 128.7 cents a litre in the past week. The metropolitan petrol price fell by 3.9 cents to 126.5 cents per litre while the regional price fell by 0.8 cents to 133.2 cents per litre.</p>
<p>Average unleaded petrol prices across states and territories over the past week were: Sydney (down by 3.9 cents to 131.5 c/l), Melbourne (down by 2.1 cents to 120.8 c/l), Brisbane (down by 1.9 cents to 123.2 c/l), Adelaide (down by 12.1 cents to 123.7 c/l), Perth (down by 1.0 cents to 130.6 c/l), Darwin (flat at 139.9 c/l), Canberra (flat at 139.6 c/l) and Hobart (down by 0.2 cents to 143.3 c/l).</p>
<p>The national average Australian price of diesel petrol fell 0.1 cents to 130.6 cents per litre in the week to March 5. The metropolitan price fell 0.2 cents to 130.8 c/l, while the regional average price fell 0.2 cents to 130.3 c/l.</p>
<p>  The national average wholesale (terminal gate) unleaded petrol price fell to an 11-week low of 115.7 cents a litre on Monday, down 0.9 cents a litre over the week. The terminal gate diesel price stands at 115.3 cents a litre, broadly flat over the previous week.</p>
<p>  Last week the key Singapore gasoline price fell by US$3.55 or 5.2 per cent to a 13-week low of US$64.85 a barrel. In Australian dollar terms the Singapore gasoline price fell by $2.88 a barrel or 3.3 per cent to $85.76 a barrel or 53.94 cents a litre.</p>
<p>  MotorMouth records the following retail prices for capital cities today: Sydney 128.6c; Melbourne 119.6c; Brisbane 121.4c; Adelaide 118.7c; Perth 123.3c; Canberra 138.5c; Darwin 138.5c; Hobart 142.6c.</p>
<p>What is the importance of the economic data?</p>
<p>  The Bureau of Statistics’ Retail trade publication contains the most current readings on the performance of consumer spending. The ABS surveys 500 ‘larger businesses’ and 2,750 ‘smaller businesses’. Retail trade covers spending at a broad range of retail outlets but excludes both petrol and motor vehicle sales. A weak retail trade result may point to a slowing economy as well weighing on the share prices of listed retail stocks. But retail trade estimates can’t be assessed in isolation – it is important to look at the influences determining future trends in consumer spending, such as income, employment and confidence levels.</p>
<p>  The monthly Job Advertisements release is a leading employment indicator. Employers only seek additional staff if business activity is strong, and more importantly, if they expect that conditions will remain favourable in coming months. It takes around 5-6 months for the new staff to be added to the payrolls. But a fall in job advertisements would have a more immediate impact on monthly employment estimates.</p>
<p>  Weekly figures on petrol prices are compiled by ORIMA Research on behalf of the Australian Institute of Petroleum (AIP). National average retail prices are calculated as the weighted average of each State/Territory's metropolitan and non-metropolitan retail petrol prices, with the weights based on the number of registered petrol vehicles in each of these regions. AIP data for retail petrol prices is based on available market data supplied by MotorMouth.</p>
<p>  The Federal Chamber of Automotive Industries releases estimates of car sales on the third business day of the month. The figures highlight the strength of consumer spending as well as conditions facing auto &amp; components companies.  </p>
<p>What are the implications for interest rates and investors?</p>
<p>The economy is chugging along nicely. Retail spending is growing at a monthly pace just above the long-term average, vehicle sales are healthy and trend growth of job ads has lifted. The Reserve Bank has no reason to lift or cut interest rates.</p>
<p>Petrol prices have retraced from recent highs, and not surprisingly consumer confidence has also lifted – especially the question on family finances.</p>
<p>  The recent falls in petrol prices are positive for retailers – especially discretionary retailers.</p>
<p>  The only thing exercising minds at present is the housing market with conditions varying markedly across the country.</p>
<p><em>Craig James is the chief economist at </em><a href="https://www.comsec.com.au/default.aspx"><span class="s2"><em>CommSec</em></span></a><em>.</em></p>
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jchancellor-FAypfDUnLy

More SUVs sold than cars: Craig James

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<p><img src="https://counter.theconversation.edu.au/content/68802/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1"></p>
<p>GUEST OBSERVER</p>
<p>Over the last few years, we’ve seen a massive shift in the way we work.</p>
<p>Thousands of Australians have abandoned the traditional 40-hour work week to work fewer hours or take on ad-hoc work, such as driving for Uber or doing odd jobs on Airtasker. </p>
<p>But the way we measure the labour market has not kept up. We still rely on the Australian Bureau of Statistics’ labour force survey, a survey from the 1960s conducted according to international conventions that is no longer appropriate for today’s labour market.</p>
<p>Today’s economy – one of independent contractors, ad-hoc work, irregular and flexible hours – needs a new form of measurement. </p>
<h2>How the government measures the workforce</h2>
<p>Every month the Australian Bureau of Statistics (ABS) surveys about 0.32% of the civilian population aged over 15 years about their employment status.</p>
<p>In short, you’re counted as employed if you completed at least one hour of paid work in the week before the survey.</p>
<p>But this doesn’t sound quite right. Clearly, one hour of paid work per week doesn’t fit most people’s idea of employment.</p>
<p>In fact, over one million workers are counted as “underemployed”, meaning they would work more hours if they could. This raises the question of whether these people should really be considered “employed”. The answer depends on what policy question you are trying to address.</p>
<h2>Is our unemployment rate right?</h2>
<p>Let’s get right into how our unemployment rate is calculated.</p>
<p>If respondents haven’t done any paid work in the last week, they are asked two further questions – first, have they actively sought work in the last four weeks, and second, are they currently available to start work? They are only considered unemployed if they answer yes to both of these questions. Otherwise, they’re not counted as part of the labour force. </p>
<p>This means full-time homemakers, carers, the ill and non-working retirees aren’t considered unemployed.</p>
<p>The labour force is the sum of the employed and the unemployed. The unemployment rate is the percentage of the labour force who are unemployed. </p>
<p>Lastly, the participation rate is the percentage of the population aged 15 and older who are in the labour force. According to the latest ABS trend estimates, the participation rate stood at 64.5% in November, no change from October.</p>
<p>The participation rate has been consistently trending upwards over time for women and falling for men. This does not mean women are increasingly doing more work but that over time they have switched from unpaid to paid work. One of the main reasons for falling participation among men is that unskilled manual jobs for older men have been declining over several decades and many men have been reclassified as unemployed, disabled or retired. </p>
<h2>More issues with the survey</h2>
<p>The Labour Force Survey only provides a measure of employment and not the number of jobs. For example, a person might work 20 hours per week at a supermarket and 10 hours per week as an Uber driver. Employment is always classified according to the “main job”, so the ABS deems them as one person employed part-time (working fewer than 35 hours) in the retail industry. </p>
<p>If that person worked five more hours as an Uber driver the next week, they would be classified as full-time (35 hours) but the supermarket job would still determine the industry in which they are employed.</p>
<p>The crucial problem here is that there are two jobs being done, but the ABS employment estimate only counts one. So be wary of commentators and politicians making statements like “the economy gained/lost 10,000 jobs last month”! What jobs are they measuring?</p>
<p>The labour force survey also fails to make distinctions between different types of workers. About two million Australians work as independent contractors like construction workers or other business operators such as hairdressers working from home. However, in the figures they are not distinguished from regular employees.</p>
<p>Whereas it might be relatively easy for an employee to know if they did any paid work in the week before the survey, it might not be so obvious for a non-employee. For instance, an author might work 50 hours on their book one week and three hours the next. Most of their work is basic research rather than writing. They receive a royalty payment twice a year. How would they answer the question of whether they did any paid work in the last week?</p>
<p>For non-employees the question of whether they are prepared to start work and have been actively looking for work can also be complex. Someone doing consultancy work might not actively look for work because clients seek them out instead.</p>
<h2>We need something new</h2>
<p>The ABS has tried tackling some of these issues by conducting some different surveys, including the Characteristics of Employment Surveywhich presents information on all employed persons according to their status of employment. However, the framework classifies jobholders by their main job. That is, only the job in which they usually worked the most hours. This doesn’t capture many of the issues of concern in, say, the “sharing” or “gig” economy </p>
<p>The ABS has also attempted to compare the number of filled jobs to the amount of employed people, using estimates in the labour force survey. This can reveal interesting information about the labour market. For instance, in February 2013 there were 11,628,300 employed people in Australia, but an estimated 12,287,200 filled jobs. That is, there were 658,900 more filled jobs than there were employed people. </p>
<p>But even then, the estimates still use the conventional definition of a job. </p>
<p>The ABS is still working on an Australian Labour Market Account, based on International Labor Organisation (ILO) methodology, which may address some of the issues discussed here. But this will still be based on traditional definitions of jobs, employment, and unemployment.</p>
<p>Our conventional employment measures are no longer equipped to inform us about important aspects of our labour force and a reliance on them could lead to inappropriate policy. We need labour force numbers than can capture the nuances of a modern economy.</p>
<p> </p>
<p><em><span class="fn author-name">Phil Lewis is p</span>rofessor of economics, University of Canberra and author for The Conversation. He can be contacted <a href="https://theconversation.com/profiles/phil-lewis-8714" target="_blank">here</a>.</em></p>
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Finding new ways to measure the Australian labour force

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<p><img src="https://counter.theconversation.edu.au/content/68804/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1"></p>
<p>GUEST OBSERVER</p>
<p>Consumers are key players in the economy, they purchase goods and services, supply labour and make savings and investment decisions. Hence, their sense of what’s happening in the economy has a flow on effect.</p>
<p>If they feel confident, they might spend a bit extra or go into debt. If they don’t, they won’t leave their job to start a risky venture.</p>
<p>Surveying how consumers feel, then, can provide a useful snapshot of how an economy is faring right now, and in the near future.</p>
<h2>The survey</h2>
<p>The idea that consumer confidence - optimism or pessimism – is important for real activity dates back to the Great Depression and John Maynard Keynes. The University of Michigan Survey of Consumers – the first of its kind, was designed in 1946 to track changes in consumer confidence. </p>
<p>The Australian version of the Michigan survey – the Melbourne Institute Consumer Attitudes, Sentiments and Expectations (CASiE) survey began in March 1973. The sample size comprises 1,200 households and is sorted by age, gender and state so that it is representative of the Australian population. </p>
<p>The CASiE survey contains five core questions. Consumers are asked about:</p>
<ol>
<li>their family finances compared to 12 months ago</li>
<li>their expected family finances in the next 12 months</li>
<li>expected economic conditions in the next 12 months</li>
<li>expected economic conditions in the next five years</li>
<li>whether it is good/bad time to buy major household items. </li>
</ol>
<p>The answers are ordinal, such as “better-off”/“good”, “same”, “worse-off”/“bad” or “don’t know”. </p>
<p>The responses to these five questions are used to construct five component indexes, one for each question. The Westpac-Melbourne Institute Consumer Sentiment Index is a simple average of these five component indexes. 100 is the neutral mark, a value greater than 100 indicates that optimism outweighs pessimism and vice versa. </p>
<h2>What the survey shows us</h2>
<p>Since its introduction, the Westpac-Melbourne Institute Consumer Sentiment Index has served as a reliable and timely indicator of economic activity in Australia. Swings in consumer sentiment, as displayed in this first chart, have proven valuable in signalling major turning points in the Australian business cycle such as the early 1980s and 1990s recessions.</p>
<h4>
<a href="https://62e528761d0685343e1c-f3d1b99a743ffa4142d9d7f1978d9686.ssl.cf2.rackcdn.com/files/149189/area14mp/image-20161208-31364-hnlzcu.png"><img src="https://62e528761d0685343e1c-f3d1b99a743ffa4142d9d7f1978d9686.ssl.cf2.rackcdn.com/files/149189/width754/image-20161208-31364-hnlzcu.png" alt=""></a><span style="font-family: Tahoma, Helvetica, Arial, sans-serif;"> </span>
</h4>
<h4>
<span class="caption">Note: Grey areas indicate Australian recessions. Source: Melbourne Institute.</span> <span class="attribution"><span class="source">Westpac-Melbourne Institute Consumer Sentiment Index</span>, <span class="license">Author provided</span></span>
</h4>
<p>Importantly the consumer sentiment index embed both coincident and leading information about current and future real economic activity. In particular, the index relating to family finances over the previous 12 months is a timely indicator of changes in real consumption patterns. </p>
<h4><a href="https://62e528761d0685343e1c-f3d1b99a743ffa4142d9d7f1978d9686.ssl.cf2.rackcdn.com/files/149191/area14mp/image-20161208-31405-1cufqge.png"><img src="https://62e528761d0685343e1c-f3d1b99a743ffa4142d9d7f1978d9686.ssl.cf2.rackcdn.com/files/149191/width754/image-20161208-31405-1cufqge.png" alt=""></a></h4>
<div class="enlarge_hint"> </div>
<h4>
<span class="caption">Note: Grey areas indicate Australian recessions. Source: Melbourne Institute. Smooth series are defined as 4-quarter moving averages.</span> <span class="attribution"><span class="source">Index relating to Family Finances last 12 months vs Real Consumption Growth (smoothed series)</span>, <span class="license">Author provided</span></span>
</h4>
<p>Meanwhile, the expectations index, constructed as an average of three forward-looking components (relating to family finances over the next 12 months, economic conditions over the next 12 months and the next five years), appears to be a reliable indicator of future real activity. For example, it has consistently foreshadowed important changes in Australian labour market conditions.</p>
<h4><a href="https://62e528761d0685343e1c-f3d1b99a743ffa4142d9d7f1978d9686.ssl.cf2.rackcdn.com/files/149190/area14mp/image-20161208-31383-d1nd3g.png"><img src="https://62e528761d0685343e1c-f3d1b99a743ffa4142d9d7f1978d9686.ssl.cf2.rackcdn.com/files/149190/width754/image-20161208-31383-d1nd3g.png" alt=""></a></h4>
<div class="enlarge_hint"> </div>
<h4>
<span class="caption">Note: Grey areas indicate Australian recessions. Source: Melbourne Institute. Smooth series are defined as 4-quarter moving averages.</span> <span class="attribution"><span class="source">Expectations Index vs Employment Growth (smoothed series)</span>, <span class="license">Author provided</span></span>
</h4>
<h2>Changes</h2>
<p>Over its long history, the CASiE survey has also evolved gradually to keep up with changes in technology and demographics. Traditional face-to-face interviews were replaced with telephone interviews in the early 1990s and online surveys have been recently introduced to complement telephone ones. </p>
<p>The decreasing cost of internet usage and the increasing influence of personal mobile devices, such as smartphones and tablets, appear to have improved the flow of information. With easier and faster access to news, consumers appear to be more informed about current affairs. </p>
<p>The average proportion of interviewees replying “don’t know” to the five survey questions used to be around 9% during the 1990s and through to the mid-2000s. This proportion, however, has declined gradually since the introduction of smartphones in 2007 and recently has plateaued to around 3%. </p>
<h4><a href="https://62e528761d0685343e1c-f3d1b99a743ffa4142d9d7f1978d9686.ssl.cf2.rackcdn.com/files/149192/area14mp/image-20161208-31367-39fkok.png"><img src="https://62e528761d0685343e1c-f3d1b99a743ffa4142d9d7f1978d9686.ssl.cf2.rackcdn.com/files/149192/width754/image-20161208-31367-39fkok.png" alt=""></a></h4>
<div class="enlarge_hint"> </div>
<h4>
<span class="caption">Note: Vertical lines indicate Australian Federal Elections. Source: Melbourne Institute. Trend series is computed using Hodrick-Prescott filter.</span> <span class="attribution"><span class="source">Proportion of ‘Don’t Know’ Respondents</span>, <span class="license">Author provided</span></span>
</h4>
<p>In the future, new innovations and advances in information technology will likely help reduce the cost even more. But increasing the frequency of surveys may not be beneficial as they will likely capture more randomness. Research about how people form expectations suggests consumers tend to update their expectations every six to twelve months and most consumers’ current and future family financial conditions are unlikely to change on a weekly or daily basis. </p>
<p>Over the years, the consumer sentiment index has attracted the attention of policy makers, market economists and academics, mainly because it is a useful signal about future household consumption and saving. Since the household sector is the largest sector in the economy, it is no wonder the Index receives a lot of attention as large swings in consumer confidence are often followed by large swings in real activity.</p>
<p><em><span class="fn author-name">Viet Nguyen is s</span>enior research fellow in Applied Macroeconomics, University of Melbourne and author for The Conversation. He can be contacted <a href="https://theconversation.com/profiles/viet-nguyen-265801" target="_blank">here</a>.</em></p>
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Why and how do we measure what consumers feel?

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<p> </p>
<p>GUEST OBSERVER</p>
<p> </p>
<p>Current Account: The broadest measure of the trade accounts – the current account – improved in the December quarter (smaller deficit), with the deficit falling from $10.2 billion to $3.85 billion – the smallest deficit in over 15 years.</p>
<p> </p>
<p>Stronger trade sector: Net exports (exports less import_s) will contribute 0.2 percentage points to economic growth in the December quarter. CommSec estimates that the economy grew by 0.7 percent in the December quarter to be up 1.9 per cent over the year.</p>
<p> </p>
<p>Consumer confidence hits 6-week high: The weekly ANZ/Roy Morgan consumer confidence rating rose by 6.1 points (4.7 percent) to a 6-week high of 119.1 in the week to February 26.</p>
<p> </p>
<p>Government sector GDP: Overall, spending by the government sector rose by 1.5 percent in the December quarter and should contribute 0.3 percentage points to December quarter economic growth.</p>
<p> </p>
<p>Lending lifts: Private sector credit rose by 0.2 percent in January after a 0.7 percent gain in December. Investor housing finance lifted 0.6 percent in January to stand 6.6 percent higher over the year – the fastest growth in 11 months.</p>
<p> </p>
<p>The balance of payments data has implications for trade-exposed businesses and companies vulnerable to changes in the Aussie dollar. The consumer confidence figures have implications for retailers, and other consumer-focussed businesses. Private sector credit figures have implications for finance providers, retailers, and companies dependent on business spending.</p>
<p> </p>
<p>WHAT DOES IT ALL MEAN?</p>
<p> </p>
<p>The Australian economy may have gone backwards in the September quarter, but the result for the December quarter is likely to be the polar opposite. Based on all the components currently available, the economy looks to have grown by a healthy 0.7 percent in the December. And while forecasts do have a margin for error the strength in dwelling investment, government spending, household consumption and net exports should ensure that Australia managed to stay clear of a technical recession. More importantly it is clear that activity levels have continued to improve in the past couple of months.</p>
<p> </p>
<p>The shift from an economic contraction to an expansion is more important for household and business confidence. And in that context the latest reading on weekly consumer confidence is encouraging. Confidence levels lifted by almost 5 percent in the past week and are now holding at 6-week highs. Interestingly the outlook on family finances was far more positive – despite the news last week on the cuts to penalty rates.</p>
<p> </p>
<p>The latest lending (private sector credit) figures suggest a modest pullback in borrowing. But it is import_ant to point out that lending recorded the biggest lift in 15 months in December and only partially gave some of that back in January. The weakness was largely due to a modest slide in business credit which would be expected given the slowdown in financing in the post-Christmas period.</p>
<p> </p>
<p>Interestingly home lending continues to lift, dominated by investor credit growth. In fact annual growth in investor finance is now at an 11-month high. The measures taken by regulators to curb investment lending had a temporary impact that is now fading.</p>
<p> </p>
<p>Overall the Reserve Bank is unlikely to be surprised with the latest results. No doubt policymakers will continue to discuss key issues like housing affordability, but overall the central bank seems upbeat on the medium-term outlook for the Australian economy. CommSec expects no change to interest rates over the rest of 2017.</p>
<p><a href="https://www.propertyobserver.com.au/%20Image%20URL%09%20%20http:/www.propertyobserver.com.au/images/2017/03/1/1%20eo.jpg" target="_blank" style="font-size: 12.16px;"><span class="s1">Click to enlarge</span></a></p>
<p class="caption"><strong><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/03/1/1%20eo.jpg" width="247" height="185"></strong></p>
<p class="caption"><strong>What do the figures show?</strong></p>
<p class="p1"><span class="s1">BALANCE OF PAYMENTS</span></p>
<p class="p2"><span class="s1">The broadest measure of Australia's external position - the current account – improved in the December quarter (smaller deficit), with the deficit falling from $10.2 billion to $3.85 billion.</span></p>
<p class="p2"><span class="s1">The balance of goods and services was in deficit by $4.7 billion in the December quarter after a $3.5 billion deficit in the September quarter.</span></p>
<p class="p2"><span class="s1">At the end of the December quarter, net foreign equity was $1.4 billion – essentially Australians own more assets overseas than foreign investors own here in Australia. But the positive net foreign equity position weakened by $5.8 billion over the December quarter.</span></p>
<p class="p2"><span class="s1">The trade sector (exports less import_s) will contribute 0.2 percentage points to economic growth in the December quarter.</span></p>
<p class="p2"><span class="s1">Terms of trade (ratio of export to import_ prices) rose by 9.1 cent to a 27-month high of 102.9 in the December quarter after a 2.3 percent increase in the June quarter. The terms of trade for goods rose by 11.3 percent and the terms of trade for services rose by 1.3 percent.</span></p>
<p class="p2"><span class="s1">Net foreign debt fell from $1,048.6 billion to $1,023.1 billion as at the end of the December quarter.</span></p>
<p class="p1"><span class="s1">GOVERNMENT FINANCES</span></p>
<ul class="ul1">
<li class="li3"><span class="s1">Government consumption spending was flat in the December quarter after a 0.2 per cent fall in the September quarter. Total public investment rose by 7.7 per cent in the December quarter after falling by 7.8 per cent in the September quarter. Overall, spending by the government sector rose by 1.5 per cent in the December quarter.</span></li>
</ul>
<p class="p1"><span class="s1">CONSUMER SENTIMENT</span></p>
<p class="p2"><span class="s1">The weekly ANZ/Roy Morgan consumer confidence rating rose by 6.1 points (4.7 percent) to a 6-week high of 119.1 in the week to February 26. Confidence is up 7 percent over the year and above the average of 119.1 since 2014.</span></p>
<p class="p2"><span class="s1">All five components of the index rose in the latest week</span></p>
<p class="p2"><span class="s1">The estimate of family finances compared with a year ago was up from +2 to +11;</span></p>
<p class="p2"><span class="s1">The estimate of family finances over the next year was up from at +26 to +34;</span></p>
<p class="p2"><span class="s1">Economic conditions over the next 12 months was up from 0 to +5;</span></p>
<p class="p2"><span class="s1">Economic conditions over the next 5 years was up from +5 to +7;</span></p>
<p class="p2"><span class="s1">The measure of whether it was a good time to buy a major household item was up from +36 to +40:</span></p>
<p class="p2"><span class="s1">The reading of inflation expectations two years ahead rose from 4.5 percent to 4.7 percent. Inflation expectations have now held above 4 per cent for the past 11 weeks.</span></p>
<p class="p4"><span class="s1">PRIVATE SECTOR CREDIT</span></p>
<p class="p2"><span class="s1">Private sector credit (lending) rose by 0.2 percent in January after a 0.7 percent gain in December. Annual credit growth eased from 5.6 percent to 5.4 percent.</span></p>
<p class="p2"><span class="s1">Housing credit grew by 0.5 percent in January to be up 6.3 percent on a year ago – equalling the December result and the slowest annual growth in 30 months.</span></p>
<p class="p2"><span class="s1">Owner occupier housing credit rose by 0.5 percent in January to stand 6.3 percent higher than a year ago – the slowest growth in 15 months. Investor housing finance lifted 0.6 percent in January to stand 6.6 percent higher over the year – the fastest growth in 11 months.</span></p>
<p class="p2"><span class="s1">Personal credit fell by 0.2 percent in January to be down 1.3 percent over the year – near the biggest annual decline in 4 ½ years.</span></p>
<p class="p2"><span class="s1">Business credit fell by 0.3 percent in December after rising by a sizeable 1.1 percent in November. Business credit is 4.7 percent higher than a year ago.</span></p>
<p><a href="https://www.propertyobserver.com.au/images/2017/03/1/2%20ex%20obs.jpg" target="_blank"><span class="s1">Click to enlarge</span></a></p>
<p><a href="https://www.propertyobserver.com.au/images/2017/03/1/2%20ex%20obs.jpg"><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/03/1/2%20ex%20obs.jpg" width="519" height="185"></a></p>
<p>WHAT IS THE IMPORTANCE OF THE ECONOMIC DATA?</p>
<p>The quarterly Balance of Payments figures have few short-term effects on financial markets. The importance of the data is merely to highlight Australia’s trading position with the rest of the world as well as the contribution of foreign trade (exports less import_s) to the latest estimates of economic growth.</p>
<p>The Australian Bureau of Statistics releases the quarterly Government Finance Statistics near the start of March, June, September and December. The data details public sector consumption and investment spending and indicates the sector’s contribution to economic growth.</p>
<p>The ANZ/Roy Morgan weekly survey of consumer confidence closely tracks the monthly Westpac/Melbourne Institute consumer sentiment index but the former measure is a timelier assessment of consumer attitudes and is now closely tracked by the Reserve Bank.</p>
<p>Private sector credit figures are released by the Reserve Bank on the last working day of the month. Credit is separated into three categories – housing, other personal and business. Private sector credit is effectively the amount of loans outstanding in the economy. If growth in lending is strong then it suggests that credit from financial institutions is freely available, underlying demand for assets such as cars and houses is firm and that the price of credit (interest rates) is attractive.</p>
<p>WHAT ARE THE IMPLICATIONS FOR INTEREST RATES AND INVESTORS?</p>
<p>The improvement in our broadest trade measure – the current account – is expected to continue. The mining investment boom has left us with expanded productive capacity. And exports of liquefied natural gas (LNG) will ramp up over the next year or so.</p>
<p>The ongoing strength in exports and improvement in the current account deficit will keep upward pressure on the Aussie dollar. No doubt the Reserve Bank would prefer a lower Australian dollar to help rebalance the economy away from mining to the non-mining sector.</p>
<p>The jobless rate is at a multi-year lows, interest rates are super-low, more homes are being built than ever before, retail spending is lifting and the farm sector prospects are bright. Even the global picture is brightening.</p>
<p>Interest rates will remain on hold over the rest of 2017.</p>
<p><a href="https://www.propertyobserver.com.au/images/2017/03/1/3%20exp%20obs.jpg" target="_blank"><span class="s1">Click to enlarge</span></a></p>
<p><a href="https://www.propertyobserver.com.au/images/2017/03/1/3%20exp%20obs.jpg"> </a><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/03/1/3%20exp%20obs.jpg" width="519" height="185"></p>
<p><em>Savanth Sebastian is an economist for <a href="https://www.commsec.com.au/" target="_blank">CommSec</a></em></p>
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Economy set to rebound, consumers confident: Savanth Sebastian 

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<p><img src="https://counter.theconversation.edu.au/content/70581/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1"></p>
<p>GUEST OBSERVER</p>
<p>Rural and regional Australia have had a hard time of late. The economies of Sydney and Melbourne are growing, but much of the rest of their states are not. The population of regional areas is stagnating and agriculture is struggling. </p>
<p>Perhaps worst of all there is a feeling that no-one in Canberra or in the booming coastal periphery cares about this. The people of Orange have apparently spoken.</p>
<p>Outside Sydney, behind what seems like an impervious sandstone curtain, not all is well. Even the largest towns in regional New South Wales are struggling to retain their populations and have faced difficult economic times through the present decade, although the drought years have faded away.</p>
<h4><img src="https://62e528761d0685343e1c-f3d1b99a743ffa4142d9d7f1978d9686.ssl.cf2.rackcdn.com/files/150658/width754/image-20161219-24265-1sg00b7.png" alt=""></h4>
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<span class="caption">Outside the big cities, many populations in regional and rural Australia are declining or static.</span> <span class="attribution">ABS, Regional Population Growth, Australia, 2014-15, CC BY</span>
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<p>Agriculture still matters, for employment and exports, but mechanisation has cost jobs. Farming is still how people see rural and regional Australia, but it is certainly not the only thing.</p>
<p>There is more to rural Australia than agriculture, and most places have shifted away from the mass production of agricultural commodities – move over the wheat-sheep belt – towards the marketing of rural lifestyles and landscapes. Farming becomes valuable as scenery.</p>
<p>City people can be tempted for weekends away and old-fashioned farm stays have evolved. But that works most easily for NSW coastal towns – like Berry and Kiama – that are within striking distances of capital cities. More distant inland places have had to work a little harder to diversify.</p>
<p>Ironically, Orange is one of the towns that have led the way in terms of change. An enormously successful FOOD (Food of Orange District) festival has drawn in city crowds and tempted some to remain. At the other end of the state, the Tamworth Country Music Festival has grown every year and been a massive boost to regional income.</p>
<h2>Jumpsuiting on the bandwagon</h2>
<p>But it is probably even smaller towns that have benefited most from festivals. Most successful of all has been Parkes, otherwise simply a transport centre on the wheat and sheep plains. This week it celebrates the 25th anniversary of the Elvis Festival. </p>
<p>The whim of a handful of townsfolk, one of whom later changed his name to Elvis Lennox, the festival began in a tiny way in 1993. Parkes citizens were doubtful – what had Elvis to do with rural Australia? But the local newspaper, the tourism office and the rugby club – in jumpsuited style – got on board, and the festival boomed.</p>
<p>Once it lasted barely a weekend. Now it lasts five days. Two hundred people came to the first festival – now there are 20,000, almost twice the town’s population. Accommodation is booked five years in advance, home hosting extends to nearby towns like Forbes and even Orange, and tents overflow on Graceland on the Green. </p>
<p>The festival brings in more than A$10 million, employs many people, and has enabled even improbable local businesses to prosper. The local vet offers “Elvis costumes for the smaller dog”. The two tattoo parlours bring in new seasonal Elvis designs. Only the funeral directors appear to have failed to gain any trickle-down effects.</p>
<p>Certainly luck helps, but inspiration, patience and creativity – which are not only metropolitan traits – really work. Parkes now has its King’s Castle, an Elvis museum that ensures that Elvis and his famous gold lamé suit never leave town.</p>
<p>Where Parkes has succeeded, its neighbours have sought to follow. Trundle, once famous for having the widest main street in the country, is now more famous for its ABBA festival. Kandos, not much further from Parkes, is working hard to develop its Bob Marley Festival. </p>
<p>Who will claim Leonard Cohen? Unlike Elvis, he at least had visited Australia.</p>
<h2>Musters and other big celebrations</h2>
<p>There is music in the air in NSW and that music is creating employment, placing and keeping some small towns on the map and simply being a source of enjoyment when, as in the drought years of earlier this century, times were particularly tough.</p>
<p>The annual Deni Ute Muster has spurred revival in Deniliquin. The more static Utes in the Paddock – an open-air gallery of utes mounted in a parody of Stonehenge – breathed new life into tiny Ootha. Glen Innes remembered its Celtic ancestry and constructed an impressive circle of standing stones. </p>
<p>Meanwhile, the citizens of Nyngan, at the centre of Bogan Shire, are trusting that the statue of the Big Bogan (“who stands proud with his mullet, stubbies singlet and Southern Cross tattoo”) will breathe some new life into the town in the wake of the success of the Big Banana in Coffs Harbour. And who could resist Priscilla Queen of the Desert’s birthday bash at Broken Hill’s Broken Heel Festival?</p>
<p>But it is not only festivals. Mountain-biking trails may work just as well. Silverton has protected its heritage buildings and become a centre for the visual arts. Bowral can thank Don Bradman for growing up there. Hill End has set the pace in reviving gold panning.</p>
<p>None of these activities can ever effectively replace agriculture, but all have a part to play in making regional Australia a richer and more vibrant place.</p>
<p>Regional Australia cannot be written off. Services, tourism and the creative industries have become a vital part of the regional mix. And the smartest regions are those that have recognised this, sought diversity and flexibility, and become creative. </p>
<p>On January 12, the Elvis Express will roll into town, and Parkes will celebrate 25 years of a festival that has created employment, generated income, provided a degree of pleasure in the drought years and given one town more than a reason to hope.</p>
<p><em><span class="fn author-name">John Connell is p</span>rofessor of Human Geography, University of Sydney and can be contacted <a href="https://theconversation.com/profiles/john-connell-94439" target="_blank">here</a>.</em></p>
<p><em><span class="fn author-name">Chris Gibson is d</span>irector, UOW Global Challenges Program &amp; Professor of Human Geography, University of Wollongong and can be contacted <a href="https://theconversation.com/profiles/chris-gibson-9277" target="_blank">here</a>.</em></p>
<p><em>Both are authors for The Conversation.</em></p>
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Wheat, sheep or Elvis Presley? Rural Australia has had to change its tune

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<p>Opening Statement to the House of Representatives Standing Committee on Economics by Philip Lowe, Governor, Reserve Bank.</p>
<p class="p1"><span class="s1">Thank you for the opportunity to appear today to explain how we see the Australian economy as well as to discuss some of the work we have been doing at the Reserve Bank.</span></p>
<p class="p1"><span class="s1">At the equivalent hearing a year ago, the tone of the global economy was pretty sombre. We had seen turbulence in Chinese financial markets. Commodity and equity prices were declining. Some overseas central banks had pushed their interest rates into negative territory. And global growth forecasts were being lowered again.</span></p>
<p class="p1"><span class="s1">Twelve months on, the global economy looks to be on a firmer footing. In China, the growth target for 2016 was achieved despite the nervousness early in the year. In the United States, growth has strengthened and the economy is operating at close to full employment. And in Europe, the recovery is continuing, although it has a fair way to go in some countries. The Federal Reserve increased interest rates in December and further rises are expected this year. Elsewhere in the major economies there is no longer an expectation of further monetary easing, although some central banks are still continuing to expand their balance sheets. </span></p>
<p class="p1"><span class="s1">Commodity prices have moved higher. Long-term bond yields have also increased and most investors are no longer paying governments to look after their money for 10 years. Headline inflation has risen in most countries, and is much closer to target than it has been for some years. And forecasts for global growth have been revised up over recent months. This is the first time this has happened for quite a few years.</span></p>
<p class="p1"><span class="s1">So, overall it is a more positive picture. That is the good news. There are, though, still a number of significant risks on the horizon.</span></p>
<p class="p1"><span class="s1">In China, the growth target was achieved last year partly through a further build-up in debt especially to finance infrastructure investment and property development. This strategy was clearly helpful in the short run and it supported commodity prices, and Australia has benefited from that. But it runs counter to the Chinese authorities' goal of addressing the high levels of debt and getting domestic finances on a more stable footing. </span></p>
<p class="p1"><span class="s1">So we can't be sure about the longer-run implications. Recently, the Chinese authorities have taken some steps to tighten things up a bit. They have also been managing a depreciation of their currency against the US dollar and increased capital outflows as Chinese citizens send funds abroad. It's a difficult balancing act.</span></p>
<p class="p1"><span class="s1">Turning to the United States, we can't be confident about how things will play out. It is possible that the new administration's policies could boost US and global growth. More infrastructure investment, tax reform and deregulation could all work to that end. On the other hand, if there were to be a retreat from the open international trading system, that would be damaging to the global economy, including to us here in Australia. We have much to lose if this were to occur. It is too early to tell which way things will go. Like others, we are in ‘wait and see’ mode.</span></p>
<p class="p1"><span class="s1">In Europe, while there have been no major problems for some time, there are still a number of faultlines. Some of these could be put under pressure in the year ahead, in many cases depending on the outcomes of elections.</span></p>
<p class="p1"><span class="s1">So there are still a number of risks in the global economy, although they no longer seem tilted to the downside. There are reasonable scenarios in which global growth picks up further and other scenarios in which it disappoints again.</span></p>
<p class="p1"><span class="s1">I would now like to turn to the domestic economy.</span></p>
<p class="p1"><span class="s1">A year ago, we were expecting the Australian economy to grow by around 2½–3 per cent in 2016. We haven't yet received the final figures for the year, but the outcome is likely to be lower, at around 2 per cent. The September quarter was surprisingly weak, largely reflecting temporary factors. We are not expecting a repeat of this for the December quarter, with most of the available indictors suggesting a return to reasonable growth in the quarter.</span></p>
<p class="p1"><span class="s1">Looking forward, we still expect the Australian economy to grow by around 3 per cent this year and next. For most of the time since 2012 we have been facing headwinds from declining mining investment and falling commodity prices. Then, around the middle of last year, the headwind from falling commodity prices turned into a gentle tailwind as commodity prices lifted. And the headwind from falling mining investment should blow itself out before too long as mining investment returns to more normal levels. We will also benefit over the next few years from large increases in production of liquefied natural gas.</span></p>
<p class="p1"><span class="s1">Economic conditions continue to vary significantly across the country. They are weaker in those parts of the country adjusting to the lower levels of mining investment and they are stronger elsewhere. Nationally, measures of business conditions have picked up noticeably recently. For some time we have been waiting for a lift in non-mining business investment. It has been a long time coming. Encouragingly, in New South Wales and Victoria we have now seen a reasonable pick-up in investment. However, we are yet to see this in most other states, where the unwinding of the mining investment boom continues to affect the overall business climate. With the decline in mining investment coming to an end, we hope to see a broader pick-up over time.</span></p>
<p class="p1"><span class="s1">One area that we are watching closely is the cycle in residential construction activity, as the upswing has helped support the economy over recent years. The rate of new building approvals has slowed, but there is a large amount of work still in the pipeline, particularly for apartments, so we still expect some further growth in this part of the economy this year. There has, however, been some tightening in conditions for property developers in some markets.</span></p>
<p class="p1"><span class="s1">In the broader housing market, the picture remains quite complicated. There is not a single story across the country. In parts of the country that have been adjusting to the downswing in mining investment or where there have been big increases in supply of apartments, housing prices have declined. In other parts, where the economy has been stronger and the supply-side has had trouble keeping up with strong population growth, housing prices are still rising quickly. In most areas, growth in rents is low. And recently we have seen a pick-up in growth in credit to investors, which needs to be watched carefully.</span></p>
<p class="p1"><span class="s1">In terms of consumer prices, a year ago we had expected the inflation rate to remain above 2 per cent. It has turned out to be lower than this last year, at around 1½ per cent. Wage growth has been quite subdued, reflecting spare capacity in the labour market and the adjustment to the unwinding of the mining investment boom. We anticipate the subdued outcomes to continue for a while yet. Increased competition in retailing is also having an effect on prices, as is the low rate of increase in rents.</span></p>
<p class="p1"><span class="s1">We do not expect the rate of inflation to fall further. Our judgement is that there are reasonable prospects for inflation to rise towards the middle of the target over time. The recent improvement in the global economy provides some extra assurance on this front. Headline inflation is expected to be back above 2 per cent later this year, boosted by higher prices for petrol and tobacco. The pick-up in underlying inflation is expected to be more gradual.</span></p>
<p class="p1"><span class="s1">Since we appeared before this Committee last September, the Reserve Bank Board has kept the cash rate unchanged at 1.5 per cent.</span></p>
<p class="p1"><span class="s1">At its recent meetings the Board has been paying close attention to the outlook for inflation as well as two other issues: trends in household borrowing and in the labour market.</span></p>
<p class="p1"><span class="s1">One of the ways in which monetary policy works is to make it easier for people to borrow and spend. But there is a balance to be struck. Too much borrowing today can create problems for tomorrow, because debt does have to be repaid. At the moment, most households with borrowings do seem to be coping pretty well. But the current high level of debt, combined with low nominal income growth, is affecting the appetite of households to spend, and we are seeing some evidence of this in the consumption figures. The balance that is required is to support spending in the economy today while avoiding creating fragilities in household balance sheets that could cause problems for the economy later on. This is also something we need to watch carefully.</span></p>
<p class="p1"><span class="s1">Trends in the labour market are also important. As in the housing market, the picture in the labour market varies significantly around the country. Overall, the unemployment rate has been steady now for a little over a year at around 5¾ per cent. In a historical context this would have been considered a good outcome, although, today, a sustainably lower unemployment rate should be possible in Australia. The other aspect of the labour market that is worth noting is the continuing trend towards part-time employment. Over the past year, all the growth in employment is accounted for by part-time jobs. There is a structural element to this, but it is also partly cyclical. We expect that the unemployment rate will remain around its current level for a while yet.</span></p>
<p class="p1"><span class="s1">The Reserve Bank Board continues to balance these various issues within the framework of our flexible medium-term inflation target, which aims to achieve an average rate of inflation over time of 2 point something. Our judgement is that the current setting of the cash rate is consistent with both this and achieving sustainable growth in our economy. We will continue to review that judgement at future meetings.</span></p>
<p class="p1"><span class="s1">I would like to turn to some other aspects of the work we do at the Reserve Bank.</span></p>
<p class="p1"><span class="s1">In the area of payments, the Reserve Bank is continuing to work with industry on the development of the new payments infrastructure that will allow us all to move money around and make electronic payments more easily. The Bank is building part of the infrastructure that stands at the centre of this new system that will allow funds to be exchanged instantaneously so that customers can have very quick access to their funds. Our work is on schedule and is now being used in industry testing. Financial institutions are also working hard on their internal systems so that customers can take advantage of the new system. Developments look to be on track to allow the first payments to be made through this new system towards the end of the year.</span></p>
<p class="p1"><span class="s1">A related focus of the Payments System Board is the important role that new technologies can play in promoting efficiency and competition. In recent meetings the Board has discussed the opportunities that distributed ledger technology could offer in the payments system and in financial market infrastructures. And it is also interested in the potential for fintech to deliver improved customer experiences. The Board is therefore taking a keen interest in the work being done by the Australian Payments Council on digital identity and customers' access to their banking and payments data.</span></p>
<p class="p1"><span class="s1">I hope that you have all come across the new $5 banknote, which was issued by the Bank from early September last year. The note was well received by the community. You might also have noticed that last Friday we released the design for the new $10 banknote. Like the new $5, the new $10 will have world-leading security features, including the clear top-to-bottom window and a rolling colour effect that changes as the banknote is tilted. It will also have two raised bumps to assist people with vision impairment. Just like the current $10 note, the new note will feature two of Australia's most famous writers, Dame Mary Gilmore and Banjo Paterson. The printing presses are busy printing the new notes and they will be issued from September this year. We are also finalising the design of the new $50 banknote, which we plan to issue next year.</span></p>
<p class="p1"><span class="s1">One other matter that I would like to bring to your attention is that we are in the process of commissioning an external review of the efficiency of our operations. We want to make sure that we are continuously improving as an organisation and we are seeking outside assistance to identify opportunities for improvement. The review will be focused primarily on operational and administrative matters and not on our policy frameworks. It will commence within the next month and I will be in a position to share the key conclusions with the Committee when we meet later in the year.</span></p>
<p class="p1"><span class="s1">Finally, at previous hearings members of the Committee asked about the number of women at senior levels of the Reserve Bank. I am pleased to be able to report that we have made further progress here. Of the three assistant governors responsible for monetary and financial policies at the Reserve Bank, two are women. And women run over a third of the departments in the Bank, including those responsible for the Bank's economic analysis function and for the implementation of monetary policy. So it's quite a big change from days gone by when almost all of these important positions were held by men. </span></p>
<p class="p1"><span class="s1">I want to highlight these changes in the hope that they might provide some inspiration to women who are thinking of studying economics, finance and business. There are fantastic career opportunities out there and it would be great to see more women studying these disciplines, and perhaps considering a career at Australia's central bank. We are currently working on some initiatives to encourage this, at both the school and university level.</span></p>
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Most households with borrowings seem to be coping pretty well: RBA's Philip Lowe

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<p>GUEST OBSERVER</p>
<p>Despite another modest lift this month consumer sentiment remains below its October-November levels.</p>
<p>At just below 100 the Index is in slightly pessimistic territory with consumers reporting family finances under pressure and a mixed outlook for the economy.</p>
<p>All components of the headline Index improved this month. The sub-index tracking views on ‘family finances vs a year ago’ posted the biggest gain, up 4 percent but coming from a weak starting point after a 10.6 percent slide over the previous three months.</p>
<p>The sub-index tracking expectations for ‘finances over the next 12 months’ has been steadier in recent months, posting a small 1.1 percent gain in February. On a combined basis, consumer views on family finances are still down 6.5% on a year ago and are 5.4 percent below their long run average<span style="font-size: 12.16px;">.</span></p>
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<p><span>Consumers are more positive on the economy. Near term expectations posted a solid gain, the ‘economic conditions, next 12 months’ sub-index up 2.8 percent, recovering all of the ground lost following the surprisingly weak September quarter national accounts. </span></p>
<p><span>Recent commentary from the RBA may have helped ease concerns with the Bank re-affirming it positive growth outlook. Consumers are less convinced about medium term prospects though, the ‘economic conditions, next 5 years’ sub- index posting a milder 1.6 percent gain to be only slightly above its long run average read. </span></p>
<p><span>Consumers are a little more inclined towards making major purchases. The ‘time to buy major household item’ sub-index rose 2.2 percent, building on a 4.9 percent bounce in January to be back near November levels. The rebound is a hopeful sign that the soft patch in retail sales late last year has not extended into 2017. </span></p>
<p><span>While sentiment improved in February, the month saw renewed labour market concerns. The Westpac Melbourne Institute Unemployment Expectations Index rose 3.1 percent, the higher read meaning more consumers expect unemployment to rise in the year ahead. </span></p>
<p><span>Notably, consumers are also wary about the outlook for interest rates. In our special question around the outlook for mortgage rates, 60 percent of respondents rates to be higher in 12 months; 35 percent expect rates to be steady; and just 5 percent expect further rate cuts. That compares to just 37 percent expecting higher rates when the question was last run back in August. </span></p>
<p><span>Concerns about potential interest rate increases may have impacted sentiment towards housing. The ‘time to buy a dwelling’ index fell sharply, declining 7.8 percent. The index is now at its lowest </span></p>
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<p><span>level since May 2010 when the RBA was near the end of its last tightening cycle. Victoria, Queensland and WA all recorded 10 percent plus declines in the month although the NSW Index remains the weakest across the states. The fall points to a shaky start to the new year for housing markets. </span></p>
<p><span>Most consumers still expect house prices to move higher. The Westpac Melbourne Institute Index of House Price Expectations rose 0.1 percent, holding on to last month’s 11 percent bounce. Over 64 percent of consumers expect price gains over the next 12 months compared to just 39 percent this time last year. In NSW and Victoria, where market conditions and price gains have been strongest, 70–75 percent of consumers expect prices to rise further in 2017 with one in ten expecting double digit price growth. </span></p>
<p><span>The Reserve Bank Board next meets on March 7. We expect the Board will again decide to keep the official cash rate on hold. Recent commentary clearly sets out the Bank’s current policy approach. That is, to hold rates steady in anticipation of a gradual lift in growth and inflation while imbalances in the housing market remain contained. We expect this thinking will be sustained throughout 2017, being supported by a rising terms of trade, a peaking construction cycle and a gradually falling unemployment rate with rates remaining on hold. </span></p>
<p><span>We expect a similar policy stance in 2018 despite clear preferences in the market for the beginning of a tightening cycle. Indeed, Westpac’s view of a slowdown to below trend growth pitches the risks to the ‘on hold’ call in 2018 to the downside, in clear contrast to current market views.</span></p>
<p class="p1"><span class="s1">Matthew Hassan is senior economist with <a href="https://www.westpac.com.au/"><span class="s2">Westpac</span></a>.</span></p>
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Consumer sentiment posts modest lift: Matthew Hassan

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<p>GUEST OBSERVER</p>
<p>Employment rose by 13,00 in December after rising by 37,100 in November (previously reported as a rise of 39,100 jobs).</p>
<p>Full-time jobs rose by 9,300 while part-time jobs rose by 4,200. Economists had tipped a 10,000 increase in jobs.</p>
<p>Fulltime employment lifted by 95,000 in the December quarter – best result since the September quarter 2010. Over the calendar year 2016 a total of 91,500 jobs were added – the weakest result since 2013.</p>
<p>Hours worked rose by 0.4 percent in December to be up 0.7 percent over the year.</p>
<p>The unemployment rate rose from 5.7 percent to 5.8 percent in December.</p>
<p>Unemployment across states in December: NSW 5.2 per ent (November 4.9 percent); Victoria 6.0 percent (6.0 percent); Queensland 6.2 percent (6.0 percent); South Australia 6.8 percent (7.0 percent); Western Australia 6.6 percent (6.9 percent); Tasmania 6.4 percent (6.3 percent). In trend terms unemployment in the Northern Territory was steady at 3.6 percent; ACT unemployment was steady at 3.7 percent.</p>
<p>A raft of companies is affected by the employment data but especially those dependent on consumer spending. Amongst stocks affected are Fairfax, West Australian Newspapers, Seek Limited, McMillan Shakespeare and Skilled Group.</p>
<p>What does it all mean?</p>
<p>Employment rose by marginally more than forecast with 13,400 new jobs created in December. For the 2016 calendar year a total of 91,500 jobs were added – the weakest result since 2013. From the perspective of the labour market, 2016 could be classified as a mixed year. One that also confused policymakers - with employment growth was soft over the year but the unemployment rate kept sliding, eventually falling to three-year lows. It was clearly a year, where employers were managing their workforce (cost base) very closely due to a subdued economic environment. In effect, the labour market was largely marking time over the majority of 2016 but there are initial signs of a shift coming.</p>
<p>The modest jobs growth in December, may not sound like much, but couple it with the solid job gains in October and November and it clearly shows a shift in trend. Over the last three months of 2016, more than 67,000 new jobs were created and more importantly all of that was in full-time employment. Full time jobs surged by 95,000 in the December quarter – marking the strongest quarterly growth in more than six years. The shift in the employment landscape is even more evident when you consider that the first nine months of 2016 saw paltry jobs growth of just over 24,000 with full-time jobs going backwards.</p>
<p>Looking forward, the outlook is certainly more encouraging. Job vacancies are holding near 5-year highs, in addition anecdotal evidence suggest activity levels amongst the business sector is lifting. The strength in commodity prices is also a positive and should support an improvement in employment across the resource states in coming months. It is still early days, but the last three months are certainly more upbeat.</p>
<p>The Reserve Bank is likely to look through the latest result and wait on timelier forward looking data. Reserve Bank commentary towards the end of 2016, suggests policymakers are relatively optimistic about Australia’s medium-term growth prospects. Over the next few months the Reserve Bank would be looking to see the impact of the lift in commodity prices - on growth as well as inflation. However the key would be a lift in non-mining business investment. CommSec expects interest rates to remain on hold over 2017.</p>
<p class="x_csbulletlv10"> <em>Savanth Sebastian is an economist for <a href="https://www.commsec.com.au/" target="_blank">CommSec</a></em></p>
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Full-time jobs post best quarterly growth in six years: CommSec's Savanth Sebastian

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<div>Retail trade turnover missed expectations in rising by a seasonally adjusted 0.2 percent to $25.66 billion, although this was the first miss in four months and came off the back of a 0.5 percent gain in October. </div>
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<br><div>The annual rate of turnover growth has eased back to 3.3 percent, comfortably below the half decade average. </div>
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<div><strong><span style="text-decoration: underline;">Around the traps</span></strong></div>
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<div>There were decent gains in November in New South Wales and Victoria, but not much to write home about elsewhere. </div>
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<br><div>The Australian Capital Territory has long been the leader in annual retail turnover growth since the opening of the Canberra IKEA, with New South Wales slotting into second spot, but growth has stalled in Western Australia. </div>
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<br><div><strong><span style="text-decoration: underline;">Smashed avo rally over?</span></strong></div>
<br><div>The best performing sector this month was 'threads 'n' treads' - clothing and footwear - and the worst, surprisingly enough, was eating out!</div>
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<br><div>Still, I wouldn't read too much into one month of figures - the trend figures show a 14.21 per cent share of total retail accounted for by takeaway food and eating out. It's never been higher. </div>
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<div><a href="https://www.propertyobserver.com.au/images/2017/01/11/A6.jpg" target="_blank">Click to enlarge</a></div>
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<div>A somewhat underwhelming result for retail trade this month, though when spending on services are included Commsec estimated that spending was galloping along at its fastest level since the financial crisis. </div>
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<div class="post-footer"><em><span>PETE WARGENT </span>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></div>
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pwargent-M4siyDbqQY

Retail trade consolidates: Pete Wargent

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<h3 class="post-title entry-title"><span style="color: #333333; font-family: Tahoma, Helvetica, Arial, sans-serif; font-size: 12px;">It's become traditional at this time of year for the media to mention all the potential gloom and risks facing the economy - the auto assembly industry shutting down is an old favourite, and resources construction declining, of course.</span></h3>
<p>Thing is, we've known about these issues for aeons now.  </p>
<p>What is rarely mentioned is that if the all of the downside events do play out the declining Aussie dollar would bear the brunt of the adjustment, quickly declining to 40 to 50 cents.</p>
<p>Given that the Reserve Bank seems unwilling to cut interest rates further, a strong increase in business investment over the next couple of years admittedly doesn't seem all that probable. </p>
<p>Regardless, nothing is all good or all bad, and here are a few possible upside risks for the economy.</p>
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<p><span style="text-decoration: underline;"><strong>1 - Manufacturing jobs increase </strong></span></p>
<p>The car industry will see some manufacturing jobs go this year. Still, manufacturing employment soared by +102,000 last year, and the PMI gauge is in positive territory too. Any more to come where this came from with the lower dollar?</p>
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<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/01/09/A2.jpg" alt=""><br><span><span><br></span></span><span><span><strong><span style="text-decoration: underline;">2 - Unemployment rate drops towards 4 per cent (&amp; wages breakout)</span></strong></span></span><br><span><br></span><span>The unemployment rate has declined from 6.3 percent to 5.7 percent at the latest reading. A sharp decline towards 4 per cent isn't in anyone's base case, but it's not out of the question either according to the Reserve Bank's modelling. </span>
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<div><span><strong><span style="text-decoration: underline;">3 - Mining investment bust ends</span></strong></span></div>
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<div>Commodity prices soared by 45 percent last year, and bulk commodities ripped higher by 145 percent, so it wouldn't be a huge surprise if the nadir is in sooner than expected, possibly before the calendar year is out.   </div>
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<div><strong><span style="text-decoration: underline;">4 - LNG price increases 50pc</span></strong></div>
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<div>LNG export volumes are forecast by Treasury to triple between 2015 and 2021. </div>
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<div>The Henry Hub natural gas spot prices is up by more than 75 percent from one year ago, and there could be more to come yet as oil prices rebound. </div>
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<div><span><strong><span style="text-decoration: underline;">5 - Property prices rise 12pc in 2017, unleashing a wealth effect</span></strong></span></div>
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<div>SQM Research see strong price gains nationally as possible, with prices in Sydney to rise by as much as 18 percent.</div>
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<div><span><em><span style="text-decoration: underline;">Source: SQM Research</span></em></span></div>
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<div>The wealth effect on household expenditure doesn't seem all that likely, but stranger things have happened, especially with household wealth passing a record $9 trillion last year.<br><br>
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<div><span><strong><span style="text-decoration: underline;">6 - Infrastructure booms</span></strong></span></div>
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<div>The NSW state government has zero net debt for the first time on record on the back of the biggest stamp duty boom in Australia's history, which should fund some serious infrastructure investment. </div>
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<div><span>Nationally, an infrastructure boom could be underway...</span></div>
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<div><span><strong><span style="text-decoration: underline;">7 - China unleashes its capital account</span></strong></span></div>
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<div>China has a rapidly urbanising population of 1.4 billion. If the capital account ever gets unleashed to buy international assets in earnest... well, there are only 24 million of us...</div>
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<strong><span style="text-decoration: underline;">8 - Tourism &amp; education boom</span></strong><br><strong><span style="text-decoration: underline;"><br></span></strong>Tourism and international student arrivals are already booming, and arrivals could rise 10 to 15 per cent over the next year following a streamlining of student visa rules, helping to send annual population growth back towards 450,000 per annum. Chinese visitor spend is also already exploding. <br><br><strong><span style="text-decoration: underline;">9 - Global growth accelerates, Australian GDP to above 5 percent</span></strong>
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<div>The Trump victory becomes a global turning point, and a combination of expansionary policy overseas and a revival of the animal spirits sees Australia's GDP growth accelerate to above 5 percent.</div>
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<div><strong><span style="text-decoration: underline;">The wrap</span></strong></div>
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<div>We won't see all of these unfold of course, but four or five of them could easily play out. </div>
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<div><em><span>PETE WARGENT </span>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></div>
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