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.

The New York-based investor has focused his firm, GreenPoint Partners, on addressing the supply shortage hitting middle market housing in Australia.

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.

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.

“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.

“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.”

<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" />

GreenPoint Partners brings years of experience assembling and scaling real estate operating businesses across major markets. And Green sees a big opportunity in Australia.

“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.”

Green said being a builder-developer would give the company the capacity and flexibility it required to deliver reasonably-priced homes.

“We want it to be at that attainable level; not super high end luxury but at that attainable level,” he said.

<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" />

&nbsp;

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.

Green praised local policy settings.

“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.”

One Living is also&nbsp;looking at high-density projects and could take on more institutional funding in the future.

“The way we will be able to achieve economies of scale is through size,” Green added.

Joel Robinson

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

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.

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.

Projects by Buxton Director Heath Thompson, who is selling WM Residences, says the townhouses x that perfect middle ground be

"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.

"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."

[smartcode_project:default project_id=134646 project_image_fid=6109]

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.

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.

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.

[smartcode_project:default project_id=134646 project_image_fid=6110]

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.

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.

[smartcode_project:default project_id=134646 project_image_fid=6116]

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.

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.

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.

[smartcode_project_cta:default project_id=134646]

WM Residences fills gap in Mordialloc townhouse market

&nbsp;

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.

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.

The project has recorded more than $500 million in sales across the first three towers, equating to around 580 apartments sold.

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.

[smartcode_project:default project_id=144441 project_image_fid=370975]

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.

Construction has now commenced across four towers ranging between 18 and 30 storeys, with Hamilton Marino and Maxcon appointed as builders.

Once complete, the precinct is expected to comprise around 1,100 residences, alongside retail, hospitality and public realm uses integrated throughout the site.

[smartcode_project:default project_id=144441 project_image_fid=370981]

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.

“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.

“To deliver that requires an extraordinary level of detail, coordination and discipline across multiple verticals, from design and hospitality through to wellness and service.”

“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.” 
[smartcode_project:default project_id=144441 project_image_fid=370977]

The project’s design places a heavy focus on landscaping, wellness amenities and biophilic design principles.

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.

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.

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.

[smartcode_project:default project_id=144441 project_image_fid=370980]

Gurner said the company’s experience through its Saint Haven wellness clubs had directly informed the residential offering now being incorporated into Elysium Fields.

“We’re seeing a clear global shift toward longevity, performance and proactive health,” Gurner said.

“Our role is to deliver that in a way that feels seamless, highly private and beautifully resolved within the environments we create.”

A large component of the wellness offering is planned through the resident amenity and health facilities proposed within the precinct.

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.

The developer is also seeking approvals for what it describes as a “reverse ageing medical clinic” within the precinct.

[smartcode_project:default project_id=144441 project_image_fid=370978]

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.

Within the first tower, Helios, residents will also have access to a dedicated amenity offering known as the Sky Private Club.

The upper 15 levels of the building will include private lounges, dining spaces, rooftop amenities and optional private wellness studios integrated within residences.

The Helios tower itself comprises 260 apartments ranging between 60 sqm and 300 sqm, including a collection of penthouses.

That includes a planned two-storey penthouse spanning around 600 sqm with uninterrupted bay views.

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.

[smartcode_project:default project_id=144441 project_image_fid=370979]

The sales result comes as GURNER™ continues expanding its national development pipeline beyond Victoria.

“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.

“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.”

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.

[smartcode_project_cta:default project_id=144441]

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

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.

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.

Multiplex has been appointed the builder, and construction is now underway.

[smartcode_project:default project_id=108274 project_image_fid=365784]

Since its first project, Central Equity has delivered more than 85 residential developments with a combined end value exceeding $8 billion.

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.

“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.

He said NAB’s early support was instrumental in helping establish the company’s development model.

“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.

“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.”

[smartcode_project:default project_id=108274 project_image_fid=365771]

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.

Recognising changing demographics and lifestyle preferences, the company began developing high-rise residential projects designed to bring permanent residents into the city centre.

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.

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.

The developer said the Palmera apartment tower reflects its long-term view of the Gold Coast as a growing and increasingly diversified economy.

[smartcode_project:default project_id=108274 project_image_fid=365768]

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.

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.

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.

[smartcode_project_cta:default project_id=108274]

NAB funds $1 billion Surfers Paradise apartment development, Palmera

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.

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.

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.

<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" />

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.”

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.

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.

Planning documents show the development would consist of a part-13, part-39 storey tower form positioned above a four-storey podium.

“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.

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.

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.”

<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" />

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.

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.

“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.

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.

“The broader precinct is undergoing significant change, with a mix of existing mid-rise buildings and newer high-density developments,” the report stated.

“Recent and approved projects indicate a consistent shift toward taller built form, typically organised as tower-and-podium typologies with more active ground levels.”

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.

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.

&nbsp;

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.

<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" />

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.

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.

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.

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.

First look: Aqualand joins St Leonards apartment party

Economy

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GUEST OBSERVER
A new monthly uncertainty index has been constructed by the Reserve Bank of Australia (RBA) to track the cost of different factors such as international events and government policy decisions on the economy.
Uncertainty is widely recognised as being a drag for the economy. Workers who become more uncertain about their future wages typically reduce what they buy to save for the future and face events like, say, a pay cut.
Entrepreneurs unsure about the economic environment, such as fiscal incentive or the availability of technology, reduce their investment and wait until the uncertainty dissolves. Research has found in spikes of uncertainty, in a given country, overall demand for goods falls, at least temporarily.
While these sorts of predictions are common among economists and policy makers, it’s a lot harder to quantify the impact of uncertainty. What is needed is a way to measure the consequences of events that cause shocks of uncertainty in the economy. Unfortunately, economic uncertainty is not directly observable.
Economist Angus Moore from the RBA combined information from news (in particular, keywords such as “uncertainty”, “budget”, “policy” and so on), financial indicators (mainly, financial market volatility), and measures of disagreement among forecasters for key economic variables like firms' earnings and real GDP growth, to document the evolution of the Australian economic uncertainty from 1986 to 2014.
The RBA’s index appears to correlate with domestic events, like Paul Keating’s “recession we had to have” speech in November 1990, and even more clearly with external events such as<a href="https://theconversation.com/9-11-fostering-connections-after-the-horror-3105"> </a>the 9/11 terrorist attacks and Lehman Brothers' bankruptcy. Some events, as the Greek debt restructuring in March 2012, actually correspond to decreases in the index because they work in favour of reducing uncertainty.
<a href="https://www.propertyobserver.com.au/images/2016/03/11/image-20160308-15308-1z0kkpl.jpg" target="_blank">Click to enlarge</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/2016/03/11/image-20160308-15308-1z0kkpl.jpg" alt="">
<h4>
Major events and economic uncertainty Angus Moore, Reserve Bank of Australia 
</h4>
One test of this index is how is might relate to key macroeconomic indicators such as unemployment. If an increase in uncertainty is one of the reasons for slow growth, the labour market should show signs of slowdown in the presence of high uncertainty.
A comparison of the employment rate with the uncertainty index shows that economic uncertainty does seem to move hand-in-hand with unemployment in Australia. In particular, the economic uncertainty index is on average 20 points higher when unemployment is rising.
<a href="https://www.propertyobserver.com.au/images/2016/03/11/image-20160308-15291-1bksyr2.jpg" target="_blank">Click to enlarge</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/2016/03/11/image-20160308-15291-1bksyr2.jpg" alt="">
<h4>Unemployment and economic uncertainty Angus Moore, Reserve Bank of Australia</h4>
It may be that major external shocks - like 9/11 - may induce variations in the business cycle and, consequently, generate uncertainty. It’s difficult to factor in the business cycle in the data that used to create an uncertainty index.
The RBA’s model found that increases in uncertainty of a fairly modest amount - such as 30 basis points - are associated with a downturn characterised by lower employment growth, weaker retail sales growth, and a fall in consumer confidence.
However, the size of the impact appears to be small. Uncertainty shocks are found to have a noticeable effect on the level of the cash rate, which decreases by about 20 basis points. This may explain why the impact of uncertainty on real activity is modest, for example, the RBA would have promptly intervened when needed in order to tackle the effects of spikes in uncertainty.
Does this mean that uncertainty is unimportant? No. In fact, the results point to the fact that, in absence of an adequate systematic policy response by the RBA, uncertainty could have more markedly slowed down the Australian economy.
Olivier Blanchard, former chief economist of the International Monetary Fund, famously wrote in the aftermath of the collapse of the US financial markets in 2009 that there was “(nearly) nothing to fear but the fear itself.” Policymakers should aim at reducing uncertainty as much as possible by clearly communicating credible fiscal and monetary plans. This is crucial because, as the US case proves, economic uncertainty is more often than not driven by policy uncertainty.
In light of this relationship, Prime Minister Malcolm Turnbull should bear in mind that carefully managing Australian’s expectations on future economic policy reforms is a delicate task, and that backpedalling does not appear to be an option.
 
Efrem Castelnuovo is principal research fellow, Melbourne Institute of Applied Economic and Social Research, associate professor, Faculty of Economics and Business, University of Melbourne and author for The Conversation. He can be contacted <a href="https://theconversation.com/profiles/efrem-castelnuovo-145615" target="_blank">here</a>.
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jchancellor-FAypfDUnLy

Economic uncertainty; nothing to fear but fear itself

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GUEST OBSERVER
The Westpac Melbourne Institute Index of Consumer Sentiment fell by 2.2 percent in March from 101.3 in February to 99.1 in March.
The Index is back to around its average reading over the last six months. Following the change of leadership of the Federal Government in September the Index lifted by 8.3% over the subsequent two months. It has broadly held those gains with today’s reading off that high in November by 2.5% although we are now slightly back in the region where pessimists outnumber optimists.
Financial markets have maintained significant volatility since the last survey while finishing the month on an encouraging high.
However, responses to additional questions on ‘news items recalled’ indicate that consumers were generally less focussed on international events than in December. The proportion of respondents who reported recalling news on ‘international conditions’ fell from 20.0% in December to 15.5% in March although perceptions of this news remained highly unfavourable.
The highest levels of news recall were for items on ‘budget and taxation’ ( 37.1%) and ‘domestic economic conditions’(36.7%). Perceptions of both topics were less unfavourable in March than in December. Respondents registered low recall rates on new on ‘interest rates’, ‘employment’ and ‘inflation’ although again perceptions were significantly less unfavourable than in December.
However, the market volatility and unfavourable media coverage on property markets appears to have triggered a reassessment of risk preferences. When we asked consumers about the ‘wisest place for savings’ there was a much higher proportion nominating ‘pay down debt’ – 24.4% in March compared to 17.8% in December – with this month’s reading the highest since December 2011( 26.6%) when the European Financial Crisis was in full swing. This move to more risk averse preferences also saw a 4.5 percentage point increase in the proportion of respondents who favoured fixed interest investments, including bank deposits with significant reductions in the proportion nominating real estate (down to 14.7% from 23.4% in December ) and shares (down from 9.9% in December to 7.6% in March).
The Westpac Melbourne Institute Index of Unemployment Expectations increased by 1.3% from 145.3 in February to 147.3 in March. This measures respondents’ assessments of the outlook for the unemployment rate so an increase indicates reduced confidence in the employment outlook. The measure is still 5.8% below its print in September but has steadily lifted (up 9.2%) from the low in October (134.9). However labour market expectations are still considerably less negative today than they were through most of 2014 and 2015.
Three of the five components of the Index fell in March. One of the two components assessing family finances – ‘family finances compared to a year ago’ – declined 8.2%. The Reserve Bank has indicated that it favours this component as a reliable indicator
of spending intentions. As such, it would be of some concern that this component, which unlike the overall Index did not lift significantly following last year’s leadership change, is now down 5.9 percent from a year ago, a considerably weaker read than the 0.4 percent decline in the overall Index. The prudent approach to this sharp move will be to assess the degree to which it is sustained over future months.
The other family finances component – ‘family finances over the next 12 months’ – increased by 0.2 percent. The components measuring the views on the economic outlook sent conflicting messages – ‘economic conditions over the next 12 months’ increased by 8.2 percent while ‘economic conditions over the next 5 years’ fell by 2.5 percent.
The final component, ‘time to buy a major household item’ – fell by 6.6 percent to be 2.5 percent below its level from a year ago.
 
<a href="/images/2016/03/9/Screen%20Shot%202016-03-09%20at%2010.45.37%20AM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/03/9/Screen%20Shot%202016-03-09%20at%2010.45.37%20AM.png" alt="">
While there was a sharp deterioration in respondents’ views on real estate as a wise investment relative to December, assessments of ‘time to buy a dwelling’ suggest broader buyer sentiment may be stabilising. The ‘time to buy a dwelling’ index increased by 5.4 percent from 99.3 in February to 104.7 in March. 
This Index is now 3.0 percent above its level in September but still 13.1 percent below its level of a year ago. The divergence between this index and views on real estate as an investment may reflect uncertainty around potential changes to taxation policy affecting negative gearing. Notably, the state detail on ‘time to buy a dwelling’ shows buyer sentiment in NSW – the weakest state – is now 44 percent above its September low although it is still 19 percent below its level from a year ago. 
This stability is also indicated by the Westpac Melbourne Institute Index of House Price Expectations. The Index lifted by 9.8% in March to be 16.6% higher than its level in December although still 18.4% below its level from a year ago. 
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The Reserve Bank Board next meets on April 5. As we have been successfully arguing since June last year that we expect the Bank will keep rates on hold through 2016. Clear issues for the Bank will be the progress towards stability in the labour market and the value of the Australian dollar. 
Recent dollar strength has been associated with a more positive outlook for China and commodity prices and as such would not be grounds for a policy adjustment. 
Equally, while most indicators, including our own, one of which is quoted in this survey, point to an overall improvement in the labour market over the last six months, actual jobs growth appears to be running ahead of those indicators. The recent lift in the recorded unemployment rate to 6.0% seems consistent with that observation. 
Given the recent GDP report showing Australia grew by a relatively impressive 3% in 2015, the current unemployment rate is a long way short of a print that would prompt a policy response from the Bank. 
We expect growth in the Australian economy of 2.8% in 2016 with the genuine prospect for some stability in our terms of trade through the year laying a foundation for a lift in incomes and spending going into 2017.
Bill Evans is chief economist of <a href="https://www.westpac.com.au/" target="_blank">Westpac</a>.
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Consumer sentiment shows modest March fall: Westpac's Bill Evans

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GUEST OBSERVER
Last week's GDP print was a strong result, considering the global backdrop. 
Australia's economy grew at an above-trend pace of 3.0% y-o-y over 2015, despite falling commodity prices and China's slowdown. 
Monetary policy deserves much of the credit. Cuts to interest rates over the past four years and a significant fall in the AUD have been the key supports for growth.
 Low rates have lifted housing prices and construction, which is feeding through to a positive wealth effect on consumer spending. 
The lower AUD is supporting strong export growth, particularly of tourism and education services to Asia. At the same time, inflation is low and set to remain so. Despite these positive growth stories, the RBA may still need to cut further to keep inflation on target. 
We have long been optimists on the Australian growth outlook. A key part of this story has been our belief that monetary policy is powerful and has been well managed. 
In short, when the mining boom was at its peak, in 2011, monetary policy settings were very tight, which held back the non- mining sectors and kept inflation contained. This meant that there was then significant scope to loosen settings when the mining boom ended, thereby rebalancing and lifting growth. The RBA cut its cash rate from a peak of 4.75% in 2011 to 2.00% and the AUD has fallen from US105 cents to under US75 cents. 
The cut in interest rates supported a 30% rise in housing prices since mid-2012. 
The combination of rising housing prices and low interest rates drove new building approvals to record highs in H2 2015. Last week's GDP numbers provided evidence that rising housing prices are also delivering a positive wealth effect, with the household saving rate falling from 9.1% to 7.6% over the past year. Although income growth has slowed, due to slower wages growth, rising housing prices and greater certainty about employment prospects are seeing households choose to spend more of their disposable income, particularly on services. The pick-up in the service sector is, in turn, driving a pick-up in employment. 
The lower AUD has also supported growth by improving Australia's competitiveness. In particular, and perhaps surprisingly to some observers, this is supporting a strong rise in net services exports. Inbound tourism and international student enrolments have picked up strongly, particularly from Asia. At the same time, Australians are also choosing to take fewer international trips. 
Net services exports have gone from being a drag on the economy of around 0.75ppts of GDP, four years ago, when the currency was high, to contributing around 0.5ppts to GDP growth over the past year. Without this swing, GDP growth of 3.0% in Q4 would be under 2.0%. Importantly, the lift in net services exports has nothing to do with the housing boom. So the rebalancing of growth is not just a shift from mining to housing. Services exports are being driven by Asia's increasing demand for tourism and international education services, helped along by the lower AUD. 
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This great rebalancing act provides strong evidence that Australian monetary policy works.
However, the rebalancing story is not over yet and nor is the role of monetary policy. Although local growth has been solid in recent years, it has not been rapid enough to absorb all of the available spare capacity. The transition from mining- to non-mining-led growth has left GDP growth at a below-trend average of 2.4% over the past three years (even with the 3.0% y-o-y print in Q4).
Although the unemployment rate has fallen from 6.3% to 6.0% over the past year, it is still well above its full employment level of 5.25-5.5% and has been for four years. As a result, wages growth is weak. Indeed, even the state with the strongest economic conditions, New South Wales, is yet to see a pick-up in wage growth. Combined with low global inflation, this has meant that underlying inflation is now at the bottom edge of the RBA's 2-3% target band.
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A number of near term challenges to growth also remain. Mining investment still has further to fall. Global commodity prices also have declined further since last year and over-supply in many markets is set to keep them low. Global growth is below trend and the Asian economies are being held back by weak global trade. 
Australia's housing boom is also cooling, much as it should, given the already substantial run-up in housing prices and residential construction. However, the end of the housing boom means it is unlikely that household consumption will continue at the same strong pace observed late last year. 
The other challenge is the AUD. As we described above, the AUD has been a key driver of the rebalancing act and a key support for growth recently. But low global inflation, further expected rate cuts from the ECB and Bank of Japan and the markets’ doubts about whether the US Federal Reserve will hike again this year, have meant that speculative positions have turned long on the Australian dollar. 
The currency has climbed from its low point of US69 cents in January to now trading around US74 cents. A higher Australian dollar is unhelpful for the rebalancing story and likely to put further downward pressure on already low underlying inflation. 
So although the growth performance is impressive, given the global backdrop, the question is: will there be enough growth to keep inflation on target? At the same time, local financial conditions have been tightening, not loosening, as the AUD has moved higher and the cash rate has been steady while inflation has fallen (meaning real interest rates have increased). Effective mortgage and business lending rates have also been lifted in recent months, despite a steady RBA cash rate, as a result of regulatory changes and higher global funding costs. 
Just to keep the same effective financial conditions settings as delivered the strong H2 GDP growth performance the RBA may have to cut further. Thankfully, with a cash rate at 2.00% and inflation low the RBA has scope to cut further to keep Australia's great rebalancing act underway. Our central case sees another 25bp cut from the RBA around mid-year (Q2). 
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Loose monetary policy is rebalancing growth: HSBC's Paul Bloxham

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Energy and resources minister Josh Frydenberg said recently that the latest employment figures show extremely strong job growth, the greatest Australia's had since 2006. Is that right?
With shakes in the global stock market and uncertainty abroad, politicians are understandably keen to reassure voters that Australia’s economic fundamentals are strong.
Employment data produced by the Australian Bureau of Statistics (ABS) is one way we can test Australia’s economic waters, and resources and energy minister Josh Frydenberg said recently that the latest employment figures show extremely strong job growth.
Is he right?
Checking the numbers
The ABS' December Labour Force survey release showed that over the course of 2015, total employment was up by 301,300 people (adjusted for regular seasonal fluctuations and rounded to closest 100 people). Of those 301,300 jobs, the majority (187,200) were full time.
In the last three months of 2015, growth compared to same time the previous year has fluctuated between 2.6% and 3%. That’s above the average annual growth in employment since 2000 of around 1.9%. In short, employment growth recently has been strong.
Is it the greatest level of job growth since 2006?
Table 1 of the release shows that this growth is indeed the strongest of any calendar year since 2006.
However, one could also look at changes over the 12 months to any month. Doing that, you could say, for example, that November 2010 with a figure of around 314,300 had a stronger level of job growth than the latest employment figure show. It was also stronger in November of 2015, when it was at about 344,900.
In other words, if you look only at changes for calendar years (between the beginning and the end of any given year), Frydenberg is right to say it’s the greatest level of job growth since 200
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That said, comparing the recent data to particular points in the past is less important than what the data tell us about the current trends in the labour market.
<h2>Trends</h2>
While the ABS devotes considerable resources to undertaking the survey, it is worth remembering that published employment growth is an estimate. The survey is only a sample of the population. The ABS reports on page 40 of its release that the standard error of monthly employment growth is 29,300 people, so, while employment growth recently has been strong, considerable uncertainty surrounds the numbers.
More generally, monthly movements in these data are volatile. For example, in December employment actually fell marginally, although this followed two months of strong growth and therefore was still a good outcome.
Due to this volatility in the monthly series, the ABS' trend series may provide a better guide about the extent to which recent growth is likely to persist in the future.
Over the last three months of 2015, growth in trend employment averaged around 30,300 people, compared to 43,000 based on the data adjusted only for regular seasonal fluctuations.
In other words, the data show us that the underlying trends in the job market recently have been pretty good.
Other, unofficial, data point to an improvement in the labour market. The December 2015 ANZ Job Advertisement Index showed growth compared to the same time in 2014 in their trend estimate at 11.4%, compared to around 10% in the middle of 2015.
<h2>The unemployment rate</h2>
The unemployment rate, which is also produced by the ABS in the labour force survey, has improved over the last three months. At <a href="https://www.propertyobserver.com.au/https://www.abs.gov.au/ausstats/abs@.nsf/mf/6202.0">5.8%</a>, it is down from 6.2%, where it had fluctuated around since mid 2014 (see Table 1 of the release). Similarly, the trend unemployment rate has also improved and in December reached 5.8%.
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Is 5.8% a good outcome for the unemployment rate? A simple benchmark is that average unemployment in Australia since 2000 is 5.5% – so it’s still currently a little above average.
Another way to judge the level of the unemployment rate is to look at developments in wages. If the unemployment rate was too low, growth in private sector wages would pick up. However, in the September quarter (which predates the recent drop in the unemployment rate) wages growth was soft.
To put Australian unemployment in a global context, the average unemployment rate of the Organisation for Economic Co-operation and Development (OECD) nations was 6.6% in November 2015. However, we need to caveat this comparison. Many countries, such as some in Europe, have unemployment rates that are, on average, higher than Australia’s, reflecting the different structure of their labour markets.
Australia’s unemployment rate has shifted down and that has persisted for three months, which gives greater confidence that it might not be temporary. However, given the volatility of these data and the uncertainty presently surrounding the outlook for the global economy it will be important to see whether these gains are maintained in coming months.
<h2>Verdict</h2>
Josh Frydenberg was right. Employment growth in 2015 was the strongest of any calendar year since 2006, although comparable growth also occurred over the 12 months to November 2010. It is also fair to say Australia has recently experienced strong jobs growth.
Review
This FactCheck is excellent in its comprehensive review and interpretation of the Labour Force Survey data. It is pointed out that labour market statistics, such as the unemployment rate and the number of people employed, are only estimates not the actual numbers in the population.
The statistics are based on the Labour Force Survey, which is a sample of 0.33% of the population about the employment status of everyone in the household aged 15 years and older. Because they are based on a sample of the population, the statistics have errors. In its monthly report the ABS publishes these “sampling errors” and clearly says that the estimate of the monthly change in the employment has a “95% confidence interval”. The media and the government rarely, if ever, report the range of estimates.
It is well known among economists that “you don’t trust one month’s figures” – the trend in labour force statistics is what’s important in understanding what’s going on in the labour market.
This FactCheck does a good job of explaining that the ABS “trend estimates” are much more reliable than the actual raw estimates. Again, the media (and politicians, when it suits them) tend to concentrate on the actual number, particularly whether it has risen or fallen. As the author also pointed out, the start and end date of the change usually makes a difference to the estimate of the change.
As the above states, although the minister’s assertion can be questioned somewhat by adopting a different start and end date, the overall conclusion that jobs growth is reasonably strong is correct. <a href="https://theconversation.com/profiles/tim-robinson-138270" rel="author" style="line-height: 1.3em;"></a>
 
Tim Robinson is research fellow, Melbourne Institute, University of Melbourne and author for The Conversation. He can be contacted <a href="https://theconversation.com/profiles/tim-robinson-138270" target="_blank">here</a>.
Phil Lewis is professor 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>.
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FactCheck: is job growth in Australia the greatest it’s been since 2006?

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Westpac chief economist Bill Evans has released the Westpac-Melbourne institute index of consumer sentiment.
There was a decline overall, but some optimism to be had with a spike in time to buy dwelling confidence.
The report showed an overall confidence decline of 3.5 percent from 100.8 in December to 97.3 in January, it's lowest level since September 2015.
However the index remains 4.3 percent above its level this time last year.
There were quick responses on twitter from Forex and FX options trader Mark Carrington (<a href="https://twitter.com/go4forexprofits" target="_blank">@go4forexprofits</a>).
The senior manager at research group BIS Shrapnel Angie Zigomanis was also quick to respond to the news, telling Domain there may still be some growth for New South Wales and Victoria.
The figures have received worldwide attention with tweets coming from Miami and England.
Global markets and economics reporter for Business Insider Australia David Scutt (<a href="https://twitter.com/David_Scutt" target="_blank">@David_Scutt</a>) tweeted a summary from Westpac regarding the housing sentiment. 
<a href="/news/nsw-cautious-but-encouraging-spike-in-housing-confidence-westpacs-bill-evans">For Bill Evans full commentary click here</a>
 
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Tweet of the day: Westpac-Melbourne index sees January confidence decline, but housing up

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HSBC's chief economist Paul Bloxham has suggested that the Australian services economy could be driven by Chinese consumer demand.
The article was tweeted by Asian Practice lead at PWC Andrew Parker through his twitter handle <a href="https://twitter.com/A_JParker" target="_blank">@A_JParker</a> and can be read in <a href="https://www.afr.com/opinion/chinese-consumer-demand-set-to-drive-services-economy-20160118-gm8edt" target="_blank">full here</a>.
Property Observer listened into Paul's briefing outlook today where he further referred to the anticipated Chinese consumer demand. 
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Paul also released information regarding Australia's economic future for the year 2016, with the Chinese featuring predominantly.
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Tweet of the day: HSBC's Paul Bloxham on the continued Chinese impact on the Australian economy

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GUEST OBSERVER
The Australian Chamber-Westpac Survey of Industrial Trends, the longest running business survey in Australia, dating from 1966, provides a timely update on the manufacturing sector and insights into economy-wide trends.
The Westpac-AusChamber Actual Composite index moderated in the December quarter to 53.5, down 3.2pts, from 56.7 in September. This is a still solid reading, above the historic average of 49 and up from an average of 52.4 for 2014.
The trend strengthening of the Composite index in 2015 has been centred on new orders, output and overtime, with some moderation in new orders and output in the final months of the year.
Manufacturing is benefitting from a strong upswing in new home building activity, as well as the lift in renovation activity and from the significant improvement in competitiveness flowing from the sharply lower currency, down 25% against the US dollar from mid-2014. However, the cycle remains constrained. Consumer spending is below trend, mining investment is turning down sharply and global fragilities persist. 
Exports are rising modestly, supported by the lower currency but constrained by still sluggish world growth. A net 3% of firms reported a lift in exports.
Expectations are positive, centred on new orders and output. Firms expect to respond to this strength by increasing overtime. The Expected Composite index is at 60.8, up 1.0pt on September. A net 38% expect the general business environment to strengthen over the next six months, up from 19% in September.
Businesses are looking to 2016 to be a positive year for profitability, driven by increased turnover and a lower Australian dollar boosting export returns. A net 19% expect profits to increase.
There are tentative signs that investment by the sector is nearing a turning point, consistent with a trend reduction in the sector's spare capacity. A solid net 15% of firms expect to increase equipment spending in the next year. The improvement has, to date, been centred on fewer firms looking to reduce spending.
On jobs, the survey's Labour Market composite was at a solid 52.2 in December, albeit down from a five year of 55.9 in September. The Index correctly foreshadowed the strengthening in economy wide jobs growth evident over the past year. It points to further solid gains into 2016.
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Andrew Hanlan is senior economist for Westpac and can be contacted <a href="https://www.propertyobserver.com.au/https://au.linkedin.com/pub/andrew-hanlan/3/222/430" target="_blank">here</a>. 
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Conditions moderate, but still positive: Westpac's Andrew Hanlan

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GUEST OBSERVER
The latest NAB Monthly Business Survey suggests the apparent recovery in the non-mining economy has remained on track, with business conditions holding up at above average levels for the past nine months. 
The NAB Business Conditions Index remained at +10 points in the month of November – the fourth consecutive month of conditions at this level – which is well above its long-term average (+5 points). 
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This is basically another strong result for the NAB Survey, which in conjunction with signs of improvement in the labour market, means we can put more faith in the building non-mining sector recovery”. 
Interest rate and AUD sensitive industries have generally outperformed, while improvements in areas such as retail in November are an encouraging sign that the recovery is becoming more entrenched. In contrast, mining continues to weaken. This is also reflected in variations across states. 
“In fact, the survey is showing a widening gap between deteriorating mining/mining services (-21) and the rest of the economy” said Mr Oster. 
However, business confidence has been disappointingly muted, despite recouping some of the losses from last month. The confidence index rose from +3 to +5, which is still marginally below its long-run average. 
According to Mr Oster, “Given improved prospects for the domestic economy outside of mining, relatively subdued confidence is most likely a reflection of the uncertain global economic environment. In any case, it was good to see a broad-based increase in confidence across industries”. 
NAB’s measure of capacity utilisation eased back in November (to 80.9% from 81.2%), despite better trading conditions. The decline in capacity utilisation was particularly heavy in the mining industry, but mixed elsewhere. 
“Capacity utilisation is a useful measure of the underlying health of the economy. It eased a little this month, but the trend remains distinctly positive, which bodes well for business investment and the labour market” said Mr Oster. 
NAB continues to see no change to the RBA cash rate in coming months. The RBA’s recent policy statement continues to reference a “gradual improvement in conditions in non-mining sectors” and further easing would require a significant deterioration in the economic outlook or a reassessment of growth in the non-mining economy. Today’s survey suggests maintaining the status quo
 
Alan Oster is group chief economist, National Australia Bank, and can be contacted <a href="https://business.nab.com.au/author/alan-oster/" target="_blank">here</a>.
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Business conditions remain buoyed by the non-mining recovery: NAB's Alan Oster

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GUEST OBSERVER
The Australian Bureau of Statistics have released the annual State Accounts.
The State Accounts provide annual estimates of output growth by state, Gross State Product. Quarterly estimates are not available.
The accounts for the 2014/15 financial year (July to June) confirm that a growth transition is underway. The mining states of the north-west, Qld and WA, are slowing; while the southern states, Victoria, South Australia and Tasmania, are improving.
Western Australia, despite a loss of momentum, still managed to top the growth charts in 2014/15, at 3.5%, moderating from 5.6%. The two largest states came in next, with Victoria at 2.5%, accelerating from 1.0%; and NSW, at 2.4%, rounding up from 2.3%. Next were South Australia, at 1.6%, rebounding from a soft 0.8%; and Tasmania, also at 1.6%, extending its recovery from 1.3%. Qld tumbled from 2nd place to 6th, with output growth of only 0.5%, slowing from 2.8%.
The maturing of the mining investment boom, as construction work on major gas and iron ore projects is progressively completed, was central to the loss of momentum in WA and Qld. Across the south-east, conditions benefitted from the significant easing of monetary conditions - with record low interest rates and a sharply lower currency. 
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Western Australia 
Output growth in the West slowed to 3.5% in 2014/15, from 5.6%, although that was still a little better than the state government forecast of 3.25%. The 2014/15 outcome is the slowest pace since 2008/09 and is below the state's long-run average of 4.7%. 
The state government expects growth to slow further in 2015/16, to 2.0%, with state demand expected to contract for a 3rd consecutive year. 
By industry, mining was the major driver of growth in 2014/15, contributing 3.0ppts of the 3.5%, as iron ore exports expand. Having said that, the contribution from mining was a moderation from 3.8ppts the year prior. A loss of momentum in 2014/15 was evident across: agriculture, construction, and real estate. 
Queensland 
The Qld economy slowed significantly as work on major gas projects neared completion and before output from these projects ramped-up. GSP growth was only 0.5% in 2014/15, moderating from 2.8%, well below the state's long run average of 4.0% and the softest outcome since 2010/11 and before that, 1990/91. 
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The outcome for 2014/15 fell short of the state government's forecast of 2.0%. The government expects GSP growth to bounce to 4.5% in 2015/16 as gas export begin to flow.
By industry, mining output added 0.6ppts to growth in 2014/15, up from 0.4ppts for the two previous years. Construction was the swing factor, turning from a +1.4ppts in 2013/14 to a –1.5ppts. Professional business services was also a headwind in 2014/15, subtracting 0.3ppts.
NSW
The NSW economy grew by 2.4% in 2014/15, rounding up from 2.3% in 2013/14 and an improvement on 2.0% in 2012/13. The outcome is in line with the state's long-run average (2.5%) and the forecast of the state government (2.5%). The government expects a strengthening to 3.0% in 2015/16.
While overall output growth was little changed in 2014/15, this masked a number of changes at the industry level. The key service sectors (namely, retail, hospitality, recreational services, education and communications) had a stellar year - together contributing 1.1pts to growth, up from 0.1ppt in 2013/14 and eclipsing the previous peak of 1.0ppt in 1994/95. This was offset by a moderation across a number of industries.
Victoria
The Victorian economy experienced a significant rebound following a couple of disappointing years. GSP grew by 2.5%, up from 1.0%, an outcome close to the state's long-run average of 2.7% and a little above the state government forecast of 2.25%. The government expects growth of 2.5% in 2015/16.
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As in NSW, the key service industries strengthened, adding 0.7ppts, up from 0.4ptps. In addition, it was a good year for both construction (0.5ppts) and finance (0.4ppts), as the housing sector responded strongly to low interest rates and an expanding population. 
South Australia 
SA's economy bounced back, expanding by 1.6%, following a sluggish 0.8% gain in 2013/14. As with NSW and Victoria, the key service sectors were the growth engine (particularly retail, hospitality and communications), adding 0.6ppts, up from only a 0.1ppt contribution in the previous year. Health, finance and real estate added 0.9ppts, up from 0.6ppts, while conditions were mixed elsewhere. 
The outcome for 2014/15 of 1.6% was only a touch shy of the 1.75% expected by the state government, ahead of an anticipated rise of 2.0% in 2015/16. 
Tasmania 
Tasmania's economic recovery continued, output grew by 1.3% in 2013/14 and increased by 1.6% in 2014/15, following a contraction of 1.2% in 2012/13. The state government had expected growth to be 1.75% in 2014/15, before strengthening further to an above trend rise of 2.5% in 2015/16. 
The acceleration of conditions was centred on services, construction and agriculture. The sharply lower currency and stronger demand on the mainland are key pluses for the state. 
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Andrew Hanlan is senior economist for Westpac and can be contacted <a href="https://www.westpac.com.au" target="_blank">here</a>. 
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Australian economic growth state by state 2014/15 update: Andrew Hanlan

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GUEST OBSERVER
‘Surprising’ survey results are often the most interesting. That was undoubtedly the case with the Nov Westpac–Melbourne Institute Consumer Sentiment survey.
Despite what can be viewed as a de facto tightening in financial conditions following moves by banks to increase mortgage rates, sentiment posted a solid gain in the month to climb back over the 100 level for only the third time in the last 21 months.
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Clearly there were some powerful offsetting positives at work this month. These all centred on the outlook for the economy, with the ‘economic outlook’ sub-indexes up over 20% in the last 2mths on a combined basis.
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The circumstantial evidence strongly implicates the leadership change in mid Sep as a key positive catalyst. Disentangling the various influences on consumer sentiment can often be very difficult but this month we have a closer look at how views on the ‘economic outlook, next 5yrs’ relates to sentiment more generally and responses to opinion polls. The analysis points to recent gains being due to a mix of improved polling, a ‘honeymoon’ effect following leadership changes and a more general improvement in sentiment.
Of course, it remains to be seen how well this resurgence in economic confidence is sustained. And views on the economy tend to have less influence on actual spending decisions than those around family finances and buyer sentiment.
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On this front, the Nov survey was a more mixed update. On the more sober side, our preferred gauges of demand momentum remain subdued in line with the soft spending seen through much of 2015. Sentiment around housing also remains weak with assessments of ‘time to buy a dwelling’ pointing to a material correction and price expectations cooling rapidly.
On the more positive side, responses to direct questions about planned Christmas spending were the most upbeat we have seen since the GFC. The Westpac–Melbourne Institute Unemployment Expectations Index also sustained most of last month’s big improvement, suggesting a genuine breakout from the intense pessimism around job security that has hung over the consumer since 2011.
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On balance, sentiment is starting to look more conducive to a lift in spending but there are clearly still some weaknesses.
Bill Evans is chief economist of <a href="https://www.westpac.com.au/" target="_blank">Westpac</a>.
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