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

Joel Robinson

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

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

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

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

Maréa Residences brings parkside apartments to Coolangatta

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

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

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

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

Economy

<html><body>
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>.
</body></html>

jchancellor-FAypfDUnLy

Economic uncertainty; nothing to fear but fear itself

<html><body><div class="page" title="Page 1">
<div class="section">
<div class="layoutArea">
<div class="column">
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. 
<div class="page" title="Page 2">
<div class="section">
<div class="layoutArea">
<div class="column">
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>.
</div>
</div>
</div>
</div>
 
</div>
</div>
</div>
</div></body></html>

Consumer sentiment shows modest March fall: Westpac's Bill Evans

<html><body>
<div class="page" title="Page 1">
<div class="section">
<div class="layoutArea">
<div class="column">
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. 
</div>
</div>
<div class="layoutArea">
<div class="column">
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.
</div>
</div>
</div>
</div>
<div class="page" title="Page 2">
<div class="layoutArea">
<div class="column">
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). 
</div>
</div>
</div>
</body></html>

jonathanchancellor-7SQnKwU6yx

Loose monetary policy is rebalancing growth: HSBC's Paul Bloxham

<html><body>
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
<a href="/images/2016/01/25/Screen%20Shot%202016-01-25%20at%209.55.00%20AM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/01/25/Screen%20Shot%202016-01-25%20at%209.55.00%20AM.png" alt="" width="844" height="620">
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%.
<a href="/images/2016/01/25/Screen%20Shot%202016-01-25%20at%209.59.59%20AM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/01/25/Screen%20Shot%202016-01-25%20at%209.59.59%20AM.png" alt="" width="742" height="490">
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>.
</body></html>

FactCheck: is job growth in Australia the greatest it’s been since 2006?

<html><body>
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>
 
</body></html>

jrobinson-rf4aSBido9

Tweet of the day: Westpac-Melbourne index sees January confidence decline, but housing up

<html><body>
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. 
<a href="/images/Screen%20Shot%202016-01-19%20at%2010.26.06%20am.png" target="_blank">Click here to enlarge</a>
<img src="/images/Screen%20Shot%202016-01-19%20at%2010.26.06%20am.png" alt="" width="346" height="289">
 
Paul also released information regarding Australia's economic future for the year 2016, with the Chinese featuring predominantly.
<a href="/images/2016/01/19/Screen%20Shot%202016-01-19%20at%2010.45.09%20am.png" target="_blank">Click here to enlarge</a>
<img src="/images/2016/01/19/Screen%20Shot%202016-01-19%20at%2010.45.09%20am.png" alt="" width="268" height="237">
<a href="/images/2016/01/19/Screen%20Shot%202016-01-19%20at%2010.44.49%20am.png" target="_blank"> Click here to enlarge</a>
<img src="/images/2016/01/19/Screen%20Shot%202016-01-19%20at%2010.44.49%20am.png" alt="" width="252" height="221">
</body></html>

Tweet of the day: HSBC's Paul Bloxham on the continued Chinese impact on the Australian economy

<html><body>
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.
<a href="/images/2015/12/9/Screen%20Shot%202015-12-10%20at%2011.13.24%20AM.png" target="_blank">Click to enlarge</a>
<img src="/images/2015/12/9/Screen%20Shot%202015-12-10%20at%2011.13.24%20AM.png" alt="">
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>. 
</body></html>

mick.cee-iDmgDDAmu8

Conditions moderate, but still positive: Westpac's Andrew Hanlan

<html><body>
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). 
Click to enlarge
<img src="/images/2015/12/8/Screen%20Shot%202015-12-08%20at%2011.41.34%20AM.png" alt="">
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>.
</body></html>

Business conditions remain buoyed by the non-mining recovery: NAB's Alan Oster

<html><body>
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. 
<a href="/images/2015/11/24/Screen%20Shot%202015-11-24%20at%2010.54.59%20AM.png" target="_blank">Click to enlarge</a>
<img src="/images/2015/11/24/Screen%20Shot%202015-11-24%20at%2010.54.59%20AM.png" alt="">
<div class="page" title="Page 1">
<div class="section">
<div class="layoutArea">
<div class="column">
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. 
</div>
</div>
</div>
</div>
<a href="/images/2015/11/24/Screen%20Shot%202015-11-24%20at%2010.56.14%20AM.png" target="_blank">Click to enlarge</a>
<img src="/images/2015/11/24/Screen%20Shot%202015-11-24%20at%2010.56.14%20AM.png" alt="">
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.
<div class="page" title="Page 2">
<div class="section">
<div class="layoutArea">
<div class="column">
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. 
</div>
</div>
</div>
</div>
<a href="/images/2015/11/24/Screen%20Shot%202015-11-24%20at%2010.47.50%20AM.png" target="_blank">Click to enlarge</a>
<img src="/images/2015/11/24/Screen%20Shot%202015-11-24%20at%2010.47.50%20AM.png" alt="" width="702" height="453">
Andrew Hanlan is senior economist for Westpac and can be contacted <a href="https://www.westpac.com.au" target="_blank">here</a>. 
</body></html>

Australian economic growth state by state 2014/15 update: Andrew Hanlan

<html><body>
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.
<a href="/images/2015/11/17/Screen%20Shot%202015-11-17%20at%2012.20.41%20PM.png" target="_blank">Click to enlarge</a>
<img src="/images/2015/11/17/Screen%20Shot%202015-11-17%20at%2012.20.41%20PM.png" alt="">
<a href="/images/2015/11/17/Screen%20Shot%202015-11-17%20at%2012.24.51%20PM.png" target="_blank">Click to enlarge</a>
<img src="/images/2015/11/17/Screen%20Shot%202015-11-17%20at%2012.24.51%20PM.png" alt="">
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.
<a href="/images/2015/11/17/Screen%20Shot%202015-11-17%20at%2012.13.36%20PM.png" target="_blank">Click to enlarge</a>
<img src="/images/2015/11/17/Screen%20Shot%202015-11-17%20at%2012.13.36%20PM.png" alt="">
 
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.
<a href="/images/2015/11/17/Screen%20Shot%202015-11-17%20at%2012.16.03%20PM.png" target="_blank">Click to enlarge</a>
<img src="/images/2015/11/17/Screen%20Shot%202015-11-17%20at%2012.16.03%20PM.png" alt="">
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.
<a href="/images/2015/11/17/Screen%20Shot%202015-11-17%20at%2012.17.46%20PM.png" target="_blank">Click to enlarge</a>
<img src="/images/2015/11/17/Screen%20Shot%202015-11-17%20at%2012.17.46%20PM.png" alt="">
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>.
</body></html>

Economy

Editor's Picks

Have something to contribute?

Developments

New apartments

New townhouses

News

Economy

Editor's Picks

Receive the latest news stories to your inbox

Have something to contribute?

Developments

New apartments

New townhouses

News