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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EXPERT OBSERVER
As widely expected the RBA left the cash rate on hold at 0.75% at its November board meeting.
While we thought a rate cut was justified, recent commentary from the RBA had suggested little urgency on its part so today’s on hold decision was not surprising. 
The post meeting Statement was a little bit more upbeat referring to: a scaling back in market expectations for interest rate cuts globally; a “gentle turning” point in the local economy; expectations for growth to pick up to 3% by 2021, recent inflation data being broadly as expected; and further signs of a turnaround in the established housing market.
However, while the RBA still sees growth picking up to around 3% in 2021, it has yet again downgraded its growth expectation for this year to “around 2.25%” from 2.5% in August. And don’t forget that a year ago it expected growth this year of 3.25%.
Apart from maybe feeling a bit more upbeat, the RBA probably also decided to pause in easing to give tax and rate cuts to date more time to work. But it’s interesting that it made no reference to September’s very weak retail sales report which along with continuing weak car sales suggests very little boost to consumer spending from the tax and rate cuts so far.
The final paragraph of the RBA’s post meeting Statement repeats that its “reasonable to expect that an extended period of low interest rates will be required” and that “The Board will continue to monitor developments, including in the labour market, and is prepared to ease monetary policy further if needed to support sustainable growth in the economy, full employment and the achievement of the inflation target over time.” Quite clearly the RBA retain an easing bias.
Based on the US experience which has required unemployment and underemployment to fall to 7% just to get wages growth of 3% year on year, full employment in Australia probably means unemployment around 3.5-4% and underemployment around the same level so we have a long way to go!
As a result, we remain of the view that further RBA monetary easing will be required and is likely. Growth is still likely to remain subdued and below trend for longer than the RBA is allowing. This will keep unemployment higher for longer and wages growth and inflation below target for longer. Consequently, more easing will be required to achieve full employment and clear progress to the inflation target. What’s more inflation has been running below target for more than four years now and the longer this is allowed to persist the more the inflation target will lose credibility and won’t be the “strong nominal anchor that people can rely on when making their decisions” that Governor Lowe has stated the Board is seeking to provide.
Ideally more fiscal stimulus is required (such as a bring forward of the stage 2 tax cuts, a boost to Newstart, inducements to large companies to investment more and increased infrastructure spending where possible) as this would give a bigger bang for the buck and could be more fairly targeted. But in the absence of more fiscal stimulus, pressure remains on the RBA for further easing. We continue to see the cash rate being cut to a low of 0.25% in December and February but this could also come with quantitative easing measures designed to lower bank funding costs and increase the banks’ pass through of rate cuts to borrowers.
The RBA’s forward guidance is also likely to be toughened in the next few months to say something along the lines that the RBA “doesn’t expect to consider raising interest rates until inflation is near the mid-point of the 2-3% inflation target.”
Meanwhile, Treasurer Josh Frydenberg’s decision to make no changes to the RBA’s inflation target and the broader Statement on the Conduct of Monetary Policy of which it is a part makes sense. 
The interpretation of meeting the inflation objective as being “on average” and “over time” has served Australia well and has contributed to the relative stability of the Australian economy. To lower the inflation target to 1-3% as some were arguing should occur would have blown its credibility, pushed the $A up sharply and boosted the risk of deflation and falling wages which is the last thing we want given high household debt levels. Making the target stricter – by requiring say a BoE style letter each time the target is breached – could force the RBA to become inflation nutters. So thankfully it remains unchanged.
The only thing now is to get inflation back to target “on average” and “over time.”
SHANE OLIVER is the Chief Economist for AMP Capital 
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soliver-smf6LQXgW9

More RBA easing may be necessary in the future: Shane Oliver

<html><body>
EXPERT OBSERVER
The Reserve Bank has left the cash rate at a record low of 0.75 per cent.
What has changed since the last meeting?
- The Consumer Price Index rose by 0.5 per cent in the September quarter; annual rate 1.7 per cent. - The Australian jobless rate fell from 5.3 per cent to 5.2 per cent in September. - The CoreLogic national home price index rose by 1.2 per cent in October. - Retail trade rose 0.2 per cent in September. - Real retail trade fell by 0.1 per cent in the September quarter. - The US Federal Reserve cut the federal funds from 2 per cent to 1.75 per cent. - Job ads fell by 1.0 per cent in October. - Tax refunds totalled $20 billion in the three months to September. - The Australian dollar has generally held around US67o 69 cents. - The US and China are reportedly progressing on a ‘Phase 1’ trade deal. - UK to face a December election; Brexit date now January 31. - US sharemarkets hit record highs.
The Assessment
The Reserve Bank has refreshed its views, commentary and forecasts. Overall, the tone of cautious optimism is maintained as is the easing bias. But the Reserve Bank doesn’t seem to be setting the stage to act on the easing bias by cutting rates again in December. The next opportunity to cut rates is February 2020 after the Reserve Bank assesses economic growth, inflation, unemployment and inflation data.
The Reserve Bank has given its customary ‘sneak peek’ at its latest forecasts. The jobless rate is tipped to remain near 5.25 per cent for some time. Similarly inflation is not expected to budge from near 2 per cent, actually through to 2021. Economic growth is tipped to lift to around 2.25 per cent this financial year and then to 3 per cent in 2021.
Inflation is edging slowly towards the Reserve Bank’s 2o 3 per cent target zone. The Reserve Bank Board believes this progress will continue. The Federal Treasurer has expressed his support for maintaining the target band and made no change to the Statement on the conduct of Monetary Policy.
Perspectives on interest rates
The Reserve Bank has left the cash rate at 0.75 per cent after cutting rates in June, July and October, each by 25 basis points. There have now been 15 rate cuts since November 2011 with the cash rate cut from 4.75 per cent.
Previously rates rose seven times from October 2009 to November 2010 from 3.00 per cent to 4.75 per cent.
What are the implications of today’s decision?
The Reserve Bank Governor continues to express optimism, saying that the economy has reached a ‘gentle turning point’. Home prices have certainly lifted since the election, especially in Sydney and Melbourne. Encouragingly employment continues to grow, lifting purchasing power in the economy.
The labour market and consumer spending will remain in the spotlight. Overseas, the US-China trade talks and Brexit will dominate attention. The Reserve Bank is expected to leave the cash rate unchanged until at least early 2020. 
CRAIG JAMES is the Chief Economist at CommSec
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cjames-5S2v74qSNK

RBA retains tone of cautious optimism for Australian Economy: CommSec's Craig James

<html><body>
EXPERT OBSERVER
The services sector dominates the Australian economy, representing around 70 per cent of gross domestic product (GDP) and employing four out of five Aussies. According to the AiGroup, activity in the services sector expanded at its fastest rate in 11 months in October.
The pace of expansion has picked up for three successive months with sales, new orders, employment and deliveries all up during October in positive signs that some ‘green shoots’ may finally be emerging for the Aussie economy.
Last week, the Aussie dollar rose in value by 1.2 per cent against the greenback – the best weekly gain since early September - hitting intra-day highs of US69.30 cents on October 31 due to US-China trade deal optimism. The Aussie dollar had been stuck in a tight US67-68 cent range since August.
While Reserve Bank policymakers would prefer a lower Aussie dollar to support economic growth, consumers on the other hand generally benefit from a cheapening in imported goods purchase costs and lower overseas travel costs, perhaps brightening shopper sentiment.
Lower unleaded petrol prices (down by 4.6-7.9 cents a litre in Sydney, Melbourne and Brisbane) and confirmation of a strengthening in October home prices (up by the most in 4½ years) could also be considered reasons for the biggest lift in consumer confidence in five weeks.
What do the figures show?
The Australian Industry Group (AiG) Performance of Services Index (PSI) rose from 51.5 points to an 11-month high of 54.2 points in October. But the ‘final’ CBA/IHS Markit Services Purchasing Managers’ Index (PMI) fell from 52.4 points in September to 50.1 points in October. A reading above 50 indicates an expansion of services sector activity.
According to the AiGroup: “Following two months of mildly positive results, October saw a substantial pickup in business conditions, and particularly sales, for services businesses. Some respondents reported strong demand from new customers and good domestic and international demand. Increased discretionary spending was evident across the consumer sectors.”
The CBA/IHS Markit October PMI data “showed little change in Australian services business activity at the start of the fourth quarter. This was accompanied by marginal sales growth, which was limited by a first decline in export demand for over two years. Business confidence subsequently dropped to the lowest since March whilst employment barely rose. Input price inflation remained solid, contributing to an accelerated rise in output charges.”
Consumer Sentiment
The weekly ANZ-Roy Morgan consumer confidence rating rose by 2.8 per cent - the biggest lift in five weeks - to 113.5 points. Sentiment is still below the average of 114.4 points held since 2014, but above the longer term average of 113.1 points held since 1990.
All five of the major components of the index rose last week:
The estimate of family finances compared with a year ago was up from +12.5 points to +14.3 points;
The estimate of family finances over the next year was up from +24.5 points to +27.7 points;
Economic conditions over the next 12 months was up from -7.9 points to -5.5 points;
Economic conditions over the next 5 years was up from -1.0 point to +5.7 points;
The measure of whether it was a good time to buy a major household item was up from +23.9 points to +25.5 points.
The measure of inflation expectations was unchanged at 3.9 per cent.
What are the implications for interest rates and investors?
It appears that the all-important Aussie services sector growth engine could be reaching a ‘gentle turning point’ – as hoped for by the Reserve Bank. The AiGroup reported that “there are tentative signs that lower interest rates and recently paid tax rebates are (very mildly) boosting discretionary local retail spending.” The commentary will be ‘music to the ears’ of policymakers after the release of yesterday’s disappointing September retail trade report.
The Reserve Bank is expected to sit back for a few months before deciding the next move in interest rates with no policy change expected later today by CommBank Group economists. We’ve pencilled in a cut in February 2020.
Policymakers will be watching the recent upward movement in the Aussie dollar very closely. The currency is closely correlated to China’s offshore currency – the Yuan – which has been heading higher against the greenback on increasing trade optimism. The central bank will be concerned with the Aussie’s recent momentum - due to US rate cuts and improving risk sentiment - with any push-through the US70 cent ‘ceiling’ potentially constraining already weak economic activity.
CRAIG JAMES is the Chief Economist at CommSec
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Services sector activity hits 11 month high, consumer confidence up: CommSec's Craig James

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EXPERT OBSERVER
The Reserve Bank Board meets on November 5 next week.
There is little chance that the Board will decide to cut the cash rate at that meeting.
Westpac confirms its forecast which was “refreshed” on July 24 that the Board would cut the rate by 25 basis points at the October meeting (done) and the February meeting in 2020.
Markets are pricing in a probability of a miniscule 4% for a November move.
However it was not always like that.
Back on October 4, I wrote, “we cannot concur with the markets pricing in a 50% probability of a follow up move in November".
There are a number of reasons for this caution.
Firstly, markets should understand that central banks will usually bias their comments on days on which they make policy changes to justify the decision. We saw some examples of that approach in the Governor’s Statement.
For example, he has, for no reason that is justified by the data, adopted a bolder objective than had been the case before by aiming for “full employment” rather than the more modest, “reduce unemployment” that we saw in September.
With the unemployment rate trending away from his full employment target and, by his own admission, "forward-looking indicators of labour demand indicate that employment growth is likely to slow from its recent fast rate" the introduction of that full employment target as a substitute for the more realistic “reduce unemployment” seems curious and is probably less significant than markets may have assessed.
We also think the RBA will be mindful of the response of the Westpac Melbourne Institute Consumer Sentiment Index to the consecutive cuts in June/July. Following the cut in July the Index fell by 4.1%. There was an apparent “spooking” of the consumer around the policy action.
With the RBA seeing the consumer as the key to the growth outlook, a “back to back” series of rate cuts leaving limited scope to cut further and risking a similar response from the consumer would counsel against that November move.”
Since that note we saw the Westpac MI Consumer Sentiment Index fall by 5.5% in response to the October rate cut, providing further evidence of the fragility of Confidence to low rates. Under such circumstances consecutive rate cuts would seem to be a significant policy mistake.
Apart from the arguments I put forward on October 4 we have also seen an absence of downside surprises in both the Employment and Inflation reports with both the unemployment rate falling modestly from 5.3% to 5.2% and the trimmed mean annual inflation rate holding steady at 1.6%.
Looking further out, markets have turned against prospects for a December rate cut with probabilities falling from 80% back on October 4 to 25%.
We concur with that assessment but are surprised that market pricing for February has tumbled from 100% on October 4 to 50% today.
Read full report <a href="https://westpaciq.westpac.com.au/wibiqauthoring/_uploads/file/Australia/2019/November/er20191101BullRBAonHoldNov.pdf">'RBA on hold in November' (PDF 73kb)</a>
BILL EVANS is the Chief Economist at Westpac 
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RBA on hold in November, 2020 growth and inflation forecasts unchanged: Bill Evans

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<div class="storysegment2 segmentContentFull">
Dubbed the “rate cut whisperer­” for his foresight in tipping RBA moves, Westpac chief economist Bill Evans says there will be no Melbourne Cup Day rate cut.
Despite the downbeat economic climate, Evans says the Reserve Bank of Australia will sit on their hands tomorrow.
“There is little chance that the board will decide to cut the cash rate,” Evans (below) advised­ Westpac clients.
While few economists think there is any probability of a November move, Evans said he was “surprised” that the market pricing for a February cut had recently tumbled.
His next forecast rate cut — the fourth since June — is for the February 2020 meeting, when Evans fears the unemployment rate will be trending away from the central bank’s full employment target.
He said the RBA was “mindful” of the recent movement in the Westpac Melbourne Institute Consumer Sentiment Index.
The index suggests that, following the consecutive rate cuts in June/July, there had been an ­apparent “spooking” of retail consumers.
While most economists had stridently tipped interest rates to be on hold during 2019, Evans was the first of the big bank economists to break from the pack in ­seeing the need for rate cuts.
Evans has maintained for several months that “there is ample evidence” that the economy is weak.
“But this is not a ­recession with the associated extreme pain for households, businesses and institutions, as experienced in the early 1990s, and 1974 and 1982-83 before that,” he said.
“Fiscal policy has considerable scope to act quickly if the recession signals strengthen; there will be a Budget surplus in 2019-20 and debt-to-GDP ratio at the federal level is low.”
Evans, who joined Westpac as the chief economist in 1991, had previously worked in the RBA’s research ­department.
Meanwhile, Sydney’s weekend auction clearance rate dipped to 79 per cent — the first time below 80 per cent since late September.
There were 672 auctions with 510 results captured and 404 properties sold.
Agents say there have been few signs of obvious hesitancy in the market where 16,000 properties have changed hands since spring began.
“Sydney has been the strongest capital city over the past quarter,” realestate.com.au chief economist Nerida ­Conisbee noted, tipping that “the supply-demand imbalance is reflective of an early cycle that will lead to strong price rises in premium suburbs”.
Last month Conisbee said: “The current correction looks like it is coming to an end. Nervousness about access to finance was the main factor driving a complete shift in sentiment towards ­housing.”
This article was first published in the Daily Telegraph.
 
</div>
 
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Bill Evans, the rates ‘whisperer’ says the best bet is no RBA Cup Day cut

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Young smart workers in Building, Design and Construction, Finance, Corporate and IT have been offered the biggest remuneration rises to September 2019, according to the latest Avdiev Remuneration Report.
Although stable business conditions continue for 63% of subscribers surveyed, 27%, mainly in the Consultants sector, report being worse off than last year, but 10% are doing better.
Business conditions vary from state to state, and are market sector and government stimulus related – infrastructure projects are attracting top talent with top pay.
“The Australian property industry is remaining stable and positive, but in an environment of mixed signals Avdiev Report subscribers are watching and waiting” said Rita Avdiev, managing director of The Avdiev Group, who are remuneration consultants.
“With the May 2019 Federal elections out of the way there is political stability but uncertainty about the global economy and its impact on Australia’s future. The mood is mixed," she added.
Property industry remuneration reflects the fluctuating business conditions in the sectors.
The median increases across all sectors continue at 2.5% for senior and mid-level staff and 3% for the juniors.
However pay rise ranges have increased, with salary rises in several strong market sectors ranging from 2.5% to 15% and 1.9% to 2.9% in sectors where activity has been more subdued. But top performers in those sectors continue to be well paid.
Employers know to ”keep the best people for the worst times” in case of a downturn in business. 75% of companies plan to pay the usual increase or a catch up component, 25% intend minimal or no increases.
These pay rises are in most cases still above the general workforce increases with the Wage Price Index and Consumer Price Index both increasing for the year to June 2019 at 2.3% and 1.6% respectively.
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The biggest pay rises are amongst workers in building, design and construction: Avdiev

Bumps, Lumps and Waves in the Australian economy: Luci Ellis

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EXPERT OBSERVER
I welcome today's official cash rate cut, of 25 basis points, from the Reserve Bank of Australia (RBA).
A string of soft and underwhelming economic data results (GDP, unemployment and retail sales) ensured that the RBA had to reduce the official cash rate by 25 basis points this month. This pushes the cash rate down to 0.75% leaving little room for further cuts if required.
Given the muted economic effect of the last two rate cuts, the RBA will continue to push its message that more fiscal stimulus is required to boost economic growth – a call out to the government to reassess its expenditure.
We have a situation where the government’s tightening of fiscal policy is working against the RBA’s loosening of monetary policy. The federal government recently announced that the budget was ‘back in balance’ at a time when it needed to be spending more to help businesses create jobs, support household budgets and deliver large infrastructure projects.
Property markets have been one of the few beneficiaries of recent rate cuts with higher levels of buyer demand pushing prices higher, particularly in Sydney and Melbourne. The rapid improvement in mortgage affordability has been a key driver of increased buyer enquiry; as interest rates have continued to decline and banks have reduced their serviceability rate, meaning buyers have the ability to borrow more.
The other major driver, pushing up property prices over recent months, has been the low number of properties on the market for sale. Home owners have been reluctant to list their properties due to the lack of choice to relocate. That said, LJ Hooker agents have reported higher levels of appraisals, over the past month, which will result in a higher number of listings over coming weeks as we move into summer.
MATHEW TILLER is LJ Hooker’s head of research
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Government needs to do more than cut interest rates: Mathew Tiller

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EXPERT OBSERVER
The claim that Australia has gone 28 years without a recession since the early 1990s recession ended in 1991 has been subject to some criticism in recent times with the economy sliding into a “per capita recession” where economic growth has been below population growth. Some have latched on to a recent Federal Reserve Bank of St Louis analysis that noted the 28 year claim should be “taken with a grain of salt” because “Australia has had three recessions since 1991 when looking at GDP per capita, the most recent one being from the second quarter of 2018 to the first quarter of 2019.”
GDP per capita
It’s true that Australia’s relatively strong population growth helps grow the economy. And in terms of living standards it’s GDP per person or per capita that really matters and the recent slowdown in GDP growth to 1.4% year on year which is below 1.6% population growth is a big concern. I even wrote a note after the release of the December quarter GDP data entitled “Australia enters a per capita recession”. But it does not measure up as a conventional recession.
Recession definitions The conventional definition of recession is two or more consecutive quarters of falling real GDP.
On this basis Australia’s last recession ended back in 1991, ie 28 years ago. However, if GDP per capita is looked at then Australia has had three per capita recessions since 1991 using the two or more consecutive quarters of decline approach – in the September and December quarters of 2000, the March and June quarters of 2006 and the September and December quarters of 2018. There was also a per capita recession in 1985-86.
However, while it may be reasonable to call them “per capita recessions” they don’t compare at all to the scale of the conventional recessions in 1981-83 and 1990-91 that saw far deeper and longer falls in GDP and per capita GDP.
But what about through the GFC? To be sure, Australian confidence had a recession-like fall through the global financial crisis (GFC) reflecting the dyer global news at the time and annual growth in GDP per capita fell, but there was only one quarter of contraction in both GDP and GDP per capita and there was no recession like slump in employment or rise in unemployment. What’s more the fall in per capita GDP at the time of the GFC was trivial compared to that in the US, Europe and Japan suggesting again that other things must have helped Australia beyond strong population growth
Wider definitions of recession
Nor would the per capita recessions of 1985-86, 2000, 2006 and 2018 comply with wider definitions of recession such as that of the US National Bureau of Economic Research that defines a recession as “a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales. For example, the next chart shows employment growth and unemployment since 1980 with per capita recessions shaded.
Only the per capita recessions of 1981-83 and 1990-91 which were also conventional recessions saw a significant slump in employment (both of around 4%) and sharp rises in unemployment (with both seeing around a 5 percentage point rise).
The other per capita recessions saw very little or no fall in employment and only small or no rises in unemployment. In fact, through the last per capita recession of 2006 jobs growth remained solid and unemployment fell, which makes a nonsense of calling it a recession particularly given it was in the midst of the mining boom! The recessions of the early 1980s and 1990s were horrendous events in terms of mass job losses, corporate collapses and financial failures. The per capita recessions of 2000, 2006 and more recently do not compare.
Which brings us to the smell test. For Australians like myself who lived through the early 1980s and early 1990s recessions it’s doubtful that they would recall the per capita recessions of 1985-86, 2000 or 2006 as real recessions.
Which is why they are often just referred to as slowdowns. The 2000 slowdown occurred because of the pull forward of spending due to the start up of the GST and also the end of the Olympics and the 2006 per capita recession can hardly be seen as a recession given it was in one of the biggest booms in Australian history, ie the mining boom. And a common question in relation to the recent episode is “things aren’t that bad, so why is the RBA cutting?” (The answer being that waiting for a real recession is likely leaving it too late.)
Consistent with this, consumer and business confidence was bouncing around average levels in 2000, 2006 and more recently in contrast to the slump of the early 1990s.
It’s not just strong population growth
While strong population growth helps grow the Australian economy as the Fed Reserve Bank of St Louis notes, it didn’t stop real recessions in 1981-83 and 1990-91. Going into the early 1980s recession population growth was 1.8% year on year and going into the early 1990s recession it was 1.5% year on year. So, if strong population growth didn’t stop conventional recessions in the past, other factors must have been playing a roll in heading off conventional recessions over the last 28 years.
These include:
1. economic reforms of the 1980s and 1990s that made the economy more flexible;  2. the floating of the $A that has seen it fall whenever there is a major economic problem providing a shock absorber for the economy; 3. desynchronised cycles across industry sectors and states; • strong growth in China that helped export demand through the GFC; 4. counter cyclical economic policy – like stimulus payments and monetary easing that helped in the GFC; and 5. good luck – which can never be ignored lest hubris set in!
But what about through the GFC?
To be sure, Australian confidence had a recession-like fall through the global financial crisis (GFC) reflecting the dyer global news at the time and annual growth in GDP per capita fell, but there was only one quarter of contraction in both GDP and GDP per capita and there was no recession like slump in employment or rise in unemployment. What’s more the fall in per capita GDP at the time of the GFC was trivial compared to that in the US, Europe and Japan suggesting again that other things must have helped Australia beyond strong population growth.
Concluding comment
The slowdown in Australian growth to below the level of population growth at a time of weak wages growth and high underemployment is a real concern and highlights the need to boost growth and productivity.
However, a per capita recession on its own is not the same as a real recession, and the three seen over the last 28 years do not compare to the recessions of the early 1980s and early 1990s in terms of their impact on jobs, economic welfare and confidence.
Which is why they are normally just referred to as growth slowdowns as opposed to being recessions. To be sure the risk of conventional recession in Australia has increased – although for the reasons noted here I think it remains unlikely. But there is clearly more to Australia’s 28 years without a conventional recession than just strong population growth.
Dr Shane Oliver Head of Investment Strategy and Chief Economist AMP Capital
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Has Australia really had three recessions in the last 28 years? Shane Oliver

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EXPERT OBSERVATION 
Comments by policy makers and global politics have given market participants many a point to consider.
For Australia, RBA Governor Lowe’s “Economic Update” speech in Armidale on Tuesday was the event of note. Overall, the speech had a cautious and concerned tone over the domestic and global economies respectively. Notably it was recognised that Australian growth has been weaker than anticipated, central to which is the stalling of growth in consumption per capita – highlighted by Governor Lowe as an “unusual outcome at a time when employment is growing strongly”.
While the RBA continues to expect a return to trend growth over the coming year, Governor Lowe added that “there are some obvious risks to this outlook”, and further that, while seeing the economy at a “gentle turning point”, “the strength and durability of this pick-up remains to be seen”. A key risk looking forward for consumption is that “the lift in wages growth looks to have stalled recently”. We would add that, as employment growth slows and participation and population growth remain historically high, the unemployment rate is set to lift, further hindering wages growth. 
On the world economy, concern over the impact of global uncertainties was evident, particularly for manufacturing and business investment. The risk that businesses might “also defer hiring” was emphasised too, as was the significance of central bank responses elsewhere in the world. 
On the latter, for the RBA, as a “small open economy, we have to take the world and global interest rates as we find them” and “if we did seek to ignore these shifts, our exchange rate would appreciate, which, in the current environment, would be unhelpful in terms of achieving both the inflation target and full employment”. 
<a href="https://www.propertyobserver.com.au/https://westpaciq.westpac.com.au/Article/40369" target="_blank">Westpac retains our call for an October RBA rate cut,</a> to be followed by another come February 2020. This will leave the cash rate at 0.50%. 
Turning to New Zealand, <a href="https://westpaciq.westpac.com.au/wibiqauthoring/_uploads/file/New_Zealand/2019/September_2019/OCR_Review_September_2019.pdf" target="_blank">the RBNZ met this week</a>. Their September decision was as expected, with the cash rate unchanged after August’s 50bp cut. However, a less dovish tone to their communications disappointed the market. Our New Zealand economics team continues to see a November cut as most probable, but there is a clear risk it does not eventuate. A November cut will require negative data surprises between now and then.
For the US, economic signals were mixed this week. New and pending home sales surprised to the upside in August. But home prices continued to decelerate in July, and Conference Board consumer sentiment began to wilt. Mixed messages were also provided by Federal Reserve officials, with Evans emphasising he believed the FOMC had done enough (to see inflation return to their 2.0%yr target) just as September dissenter Bullard continued to call for another 25bp cut by year end.
At this stage, it seems the Committee continues to place their faith in the spending power of the US consumer. <a href="https://www.propertyobserver.com.au/https://westpaciq.westpac.com.au/Article/40382" target="_blank">We instead believe that GDP growth will slow</a> to and then below trend over the forecast horizon. This view is built on the weakness already evident in business investment feeding through to employment and hence consumption. While some ‘green shoots’ continue to be seen regarding trade, we are a long way from a deal and considerable damage has already been done to the US economy. This week’s developments in Washington regarding a formal impeachment inquiry against President Trump will create yet more uncertainty.
Finally to Europe, the most significant outcome was Germany’s flash manufacturing PMI falling to its lowest level since the GFC in September. German IFO business expectations also deteriorated further in the month, though the view on current conditions edged higher.
It is not surprising then that, in his last Parliamentary testimony before his term ends, ECB President Draghi emphasised that recent data points “do not show convincing signs of a rebound in growth in the near future and [that] the balance of risks to the growth outlook [therefore] remains tilted to the downside”. He went on to state that the “longer the weakness in manufacturing persists, the greater the risks that other sectors of the economy will be affected by the slowdown”.
Global central bankers have already taken decisive steps to ease policy this year. But, very clearly, there is a lot more to consider into year-end – let alone come 2020. 
ANDREW HANLAN is a senior economist for Westpac.
ELLIOT CLARKE is a senior economist at Westpac.
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