Repeat buyers are one of the strongest measures of confidence in any apartment development.

At <a href="https://www.apartments.com.au/new-apartments/era-newcastle-west-124-126-bull-street-newcastle-west-nsw-2302">ERA</a> in Newcastle West, some purchasers are returning to <a href="https://www.apartments.com.au/developers/gwh">GWH</a> after living at the developer's One Apartments. Their decision to purchase again was driven by the quality of life they found after moving into their first GWH home.

Keith Wilton had spent years living in a house in East Maitland before deciding it was time for a change. Apartment living had always been on his radar, but he was selective about what he wanted.

<iframe allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" allowfullscreen="" frameborder="0" height="315" referrerpolicy="strict-origin-when-cross-origin" src="https://www.youtube.com/embed/FH_1EzB-1vs?si=XScVlP1ERsTDJoME" title="YouTube video player" width="560"></iframe>

"I had some boxes I wanted to tick," he says.

Keith points to the open-plan design, generous outdoor areas and considered inclusions as key reasons One Apartments worked for him.

“One of those things was a nice indoor open plan area, but also I wanted a nice outdoor open area that I could entertain on in summer or Christmases or birthdays,” he says.

He also found value in the smaller details, from integrated appliances to shared resident spaces including the pool, cinema and rooftop areas.

[smartcode_project:default project_id=135096 project_image_fid=356818]

After comparing several developments, he chose One Apartments because of GWH's longstanding local reputation and his own experience working with the developer on a commercial project more than a decade earlier.

"I knew that they were local, that the quality of the build was going to be up there. I'd looked at other apartment complexes around and close by, and I just knew that here was a better decision location wise."

Today, Keith says the move has completely changed how he experiences Newcastle.

"I enjoy living in this location because it's more of a lifestyle change. That Newcastle city living where you can walk to restaurants and bars and even beaches and parks and even shopping across the road."

[smartcode_project:default project_id=135096 project_image_fid=356828]

Beyond the location, he says it's the sense of community that has surprised him most.

"Everyone loves living here because they chose to live here, but everyone looks out for each other. It's a real great community feel here."

For Aimee and Lyle Goodman, the journey started almost by chance.

<iframe allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" allowfullscreen="" frameborder="0" height="315" referrerpolicy="strict-origin-when-cross-origin" src="https://www.youtube.com/embed/tsioMLcnjas?si=zq-ys3JuWpfa5hFv" title="YouTube video player" width="560"></iframe>

The couple happened to be having coffee in Newcastle when they noticed the site where One Apartments was about to begin construction.

"We were aware GWH was planning a development," Aimee says. "We made one phone call and things moved pretty quickly after that."

As busy business owners, they initially thought apartment living would simply reduce the maintenance that came with larger homes. Instead, it fundamentally changed how they spent time together.

"We actually catch up more as a family now," Aimee says.

"We've had homes with big yards and lots of space, but everyone ended up in different rooms. Here we'll have dinner together, the kids can play, and we spend far more quality time together."

[smartcode_project:default project_id=135096 project_image_fid=356829]

Lyle says their confidence came from GWH's reputation within Newcastle's building industry.

"I know people who've worked across different apartment projects, and whenever GWH came up the feedback was always the same. They're rock solid. They're quality."

That confidence only grew throughout the buying process.

"One of the things that really impressed us with GWH was the whole process, was the communication," Lyle says. "It was consistent, it was regular, there was no problem if we had some weird questions, there was no problems in getting answers."

[smartcode_project:default project_id=135096 project_image_fid=351104]

Aimee says one moment stood out.

"The project actually finished on time. We realised we needed to hurry up and sell our house because everything was happening exactly when they said it would."

The positive experience at One Apartments ultimately gave all three buyers the confidence to purchase again with GWH, this time at ERA.

Their confidence reflects what many buyers are seeking in today's apartment market. Location remains important, but so too does certainty around delivery, quality and long-term liveability.

[smartcode_project:default project_id=135096 project_image_fid=356822]

ERA builds on those foundations with 280 one, two and three-bedroom apartments across two landmark towers in <a href="https://www.apartments.com.au/developments/newcastle-west-nsw-2302">Newcastle West</a>.&nbsp;

Designed by <a href="https://www.apartments.com.au/architects/fk-australia">Fender Katsalidis</a>, the project will include more than 2,000 square metres of resident amenities, including a resort-style pool, gym, sauna, private cinema and rooftop entertaining spaces overlooking the harbour and coastline.&nbsp;

The development is also within walking distance of the Newcastle Interchange, Honeysuckle, Darby Street, the harbour foreshore, restaurants, retail and the city’s beaches, continuing the walkable lifestyle that existing GWH buyers say has transformed how they live.

[smartcode_project:default project_id=135096 project_image_fid=356826]

For Keith, the appeal remains straightforward.

"You feel at home even before you've moved into your home."

For Aimee, the change is measured in time.

“I just felt like I had more time,” she says.

[smartcode_project:default project_id=135096 project_image_fid=351102]

Construction at ERA is now underway, with more than half of the residences already sold and limited two and three-bedroom apartments remaining in the East Tower release. Priced from $980,000 for two-bedroom residences and $1.46 million for three-bedroom residences, buyers can secure an apartment with a 10 per cent deposit, with premium homes offering ocean views from Level 8 and harbour views from Level 10.

ERA is also backed by Resilience Insurance's 10-year Latent Defects Insurance policy, providing protection against structural or waterproofing defects for 10 years after completion. The project is anticipated to be completed in early 2028.

[smartcode_project_cta:default project_id=135096]

Joel Robinson

From ONE to ERA: Why buyers are choosing GWH again in Newcastle West

Virgate Property Group is preparing to commence construction of Verdé, its new apartment development in Melbourne's Arts Precinct at Southbank, following a strong run of sales that has seen more than half of the project's 173 apartments secured.

Verdé has attracted a broad mix of first home buyers, owner-occupiers upgrading from nearby inner-city suburbs and investors, with younger owner-occupier couples aged between 28 and 45 accounting for the strongest enquiry. Many are already living in Southbank, South Melbourne, Albert Park, Port Melbourne, South Yarra and the CBD.

"Verdé is located in one of the most desirable pockets of southern Melbourne," Blair Property Group Director Darren Blair, who is managing sales at Verdé, said.

"It's within walking distance of the Arts Centre, Royal Botanic Gardens, Albert Park Lake, and Southbank's restaurants and retail. It's a great lifestyle location with strong amenity and liveability, which made it a very attractive choice for the project."

[smartcode_project:default project_id=4661 project_image_fid=372549]

Virgate was already familiar with the precinct, having previously delivered the successful Domain House development in neighbouring South Melbourne. That experience gave the developer confidence to acquire the Coventry Street site and continue expanding its presence in Melbourne's inner south.

"We had been keeping an eye on the site and the broader precinct for a few months before deciding to move forward with the acquisition," Virgate said.

The project was ultimately secured in 2020 following feasibility studies, planning assessments and due diligence, with the brief centred on delivering "a high-quality, considered design that feels both refined and fit for purpose."

[smartcode_project:default project_id=4661 project_image_fid=314259]

Designed by <a href="https://www.apartments.com.au/architects/bruce-henderson-architects">Bruce Henderson Architects</a>, Verdé comprises 173 one, two and three-bedroom apartments priced from $599,000. The architecture is distinguished by a faceted glass façade that responds to both the site's outlook and Melbourne's changing light conditions.

According to Bruce Henderson Architects, the coloured glazing gives the building a distinctive identity while also providing privacy and solar shading, with residences oriented to capture views across the bay, city skyline and surrounding parklands.

Inside, <a href="https://www.apartments.com.au/interior-designers/designoffice">DesignOffice</a> has created interiors focused on natural light, efficient planning and enduring materials. Apartments feature engineered oak flooring, natural stone benchtops, floor-to-ceiling glazing and SMEG appliances, while a restrained material palette aims to complement the expansive outlooks rather than compete with them.

[smartcode_project:default project_id=4661 project_image_fid=372550]

Resident amenity has also been designed around everyday functionality rather than occasional use. Facilities include a concierge-serviced lobby, residents' lounge with fireplace, library and co-working space, gym, terrace garden with barbecue facilities, ground-floor café, and package delivery management.

The project's location continues to be one of its strongest drawcards. Positioned on Coventry Street, Verdé sits within walking distance of the National Gallery of Victoria, Arts Centre Melbourne, Royal Botanic Gardens and Albert Park Lake, while Southbank's dining precinct, Sturt Street trams and the new ANZAC Station are all nearby. The surrounding education catchment also includes Melbourne Grammar, Melbourne Girls Grammar, Mac.Robertson Girls' High School and several major university campuses.

The sales team says buyers have responded particularly well to the combination of location, design quality and long-term liveability.

"They're responding really positively to the quality of the design, premium resident amenities and the uninterrupted views. Many also appreciate the location and how connected it is to everything they need."

The ability to secure stamp duty savings before completion has also been a key factor for purchasers, alongside the opportunity to personalise finishes ahead of settlement.

With construction set to commence soon and more than half the apartments already sold, Verdé enters its next phase as one of the Arts Precinct's more established apartment developments, offering remaining buyers an opportunity to secure a residence before construction advances further. Expected completion is scheduled for late 2027.

[smartcode_project_cta:default project_id=4661]

Virgate's Verdé Southbank moves toward construction as sales fly past halfway stage

Downsizer-focused apartment development Kooyongkoot in Hawthorn has been recognised at the 2026 Better Future Melbourne Design Awards, taking home Gold and Silver awards in two categories.

<a href="https://www.apartments.com.au/new-apartments/kooyongkoot-hawthorn-1-kooyongkoot-road-hawthorn-vic-3122">Kooyongkoot</a>, currently being delivered by developer PQD and designed by Cera Stribley, received Gold in the Interior Design – Proposed category and Silver in the Architecture – Proposed category.

The dual recognition reflects the design approach behind the boutique development on prestigious Kooyongkoot Road, where the focus has been on creating homes for downsizers seeking the space, quality and functionality of a detached house within a low-rise apartment building.

Rather than maximising apartment numbers, <a href="https://www.apartments.com.au/developers/pqd">PQD</a> and <a href="https://www.apartments.com.au/architects/cera-stribley-architects">Cera Stribley</a> limited the development to just 18 residences, allowing for larger floorplans, greater privacy, generous landscaping and expansive communal spaces.&nbsp;The majority of the apartments also benefit from corner aspects, allowing for dual sources of natural light.

Now around 70 per cent complete and on track for completion in November 2026, Kooyongkoot will comprise a mix of garden residences, ter​race apartments, sub-penthouses, and is crowned by two half-floor penthouses with direct lift access and private rooftop terraces.

[smartcode_project:default project_id=102717 project_image_fid=355297]

The Silver Award for Architecture recognised the way the building responds to its prominent corner position at the ent​rance to Hawthorn's Scotch Hill precinct, one of Melbourne's most established residential neighbourhoods.

Rather than competing with the grand homes that line Kooyongkoot Road, the architectural approach focused on restraint and longevity, using curved brickwork, generous landscaping and carefully considered proportions to integrate with the existing streetscape.

"The form feels fluid and timeless, as though shaped by the landscape itself – architecture that belongs, rather than competes," said Chris Stribley, Co-Founder and Managing Principal of Cera Stribley.

The judging submission also highlighted practical innovations throughout the building, including lift cores servicing only nine homes each, a central landscaped lightcourt designed to bring daylight and ventilation into the building, and fully enclosed private storage rooms with lighting, power and shelving to better accommodate residents transitioning from larger family homes.

[smartcode_project:default project_id=102717 project_image_fid=355293]

The Gold Award for Interior Design recognised the project's focus on long-term liveability rather than display-home aesthetics.

According to the awards submission, the interiors were designed from the inside out, prioritising how homes would function over decades of daily use through generous proportions, practical storage, durable natural materials and flexible layouts.

The specification includes natural stone throughout, upgraded acoustic glazing, V-ZUG appliances and fully enclosed storage rooms, alongside an amenity offering focused on wellness, entertainment and everyday convenience.&nbsp;

Residents will have access to a gym and yoga studio, a wellness centre featuring traditional and infrared saunas, a cold therapy shower and treatment room, as well as a residents' lounge and golf simulator/cinema room for entertainment.&nbsp;Kooyongkoot has also considered the everyday convenience of its residents by offering a private carwash and pet wash facilities on site as well as dedicated parcel lockers and oversized fully enclosed storage rooms.&nbsp;

[smartcode_project:default project_id=102717 project_image_fid=355303]

The project's attention to detail has already resonated with buyers. Earlier this year, Kooyongkoot recorded one of Boroondara's highest apartment sales when an $8 million penthouse was purchased by a Melbourne CEO downsizing from a nearby family home.

"Every detail feels deliberate, from the overall design down to the smallest touches," the purchaser said.

"The level of quality and refinement is exceptional, but what really sold it was how liveable it felt... It felt like a place where everything had been considered, not just a luxury building."

[smartcode_project:default project_id=102717 project_image_fid=355304]

Sustainability also formed a key part of both award submissions. Kooyongkoot is targeting a minimum 7.5-star NatHERS rating across all residences, supported by passive design principles, high-performance glazing, EV charging infrastructure, water reuse systems and a wellness model focused on lower-energy dry facilities rather than pools and large wet areas.

Located within walking distance of Scotch College, Methodist Ladies' College, Koo​yong Lawn Tennis Club, Aubur​n Village and Camberwell Junction, Kooyongkoot continues to target owner-occupiers looking to remain in Melbourne's inner east without compromising on space or quality. A limited selection of two, three and four-bedroom residences remains available, with prices starting from $1.9 million.

[smartcode_project_cta:default project_id=102717]

Kooyongkoot wins Gold and Silver at Better Future Melbourne Design Awards

New apartment supply has become increasingly constrained across <a href="https://www.apartments.com.au/developments/parramatta-nsw-2150">Parramatta</a> in recent years, with fewer projects progressing through to completion as development conditions have become more challenging.

It makes <a href="https://www.apartments.com.au/developers/novm">NOVM</a>'s 2021-completed <a href="https://www.apartments.com.au/buildings/the-lennox-parramatta-12-phillip-street-parramatta-nsw-2150">The Lennox</a> one of the most recently completed residential towers on the Parramatta River, and among the newest apartment developments in Sydney's second CBD.

With the project largely completed before the sharp escalation in construction costs and inflation following the pandemic, The Lennox is now offering pricing that would be difficult to replicate in a comparable new development in Parramatta today, or across much of Western Sydney.

The majority of the 413 apartments at The Lennox sold before and shortly after completion. A limited release of the remaining apartments has recently been brought to market by capital partner <a href="https://www.apartments.com.au/project-marketer/equitifund-group">Equitifund</a>, with entry-level pricing from $700,000 and two-bedroom apartments available from under $1 million.

Rising above the Parramatta River at 12 Phillip Street, The Lennox comprises one, two, three and four-bedroom apartments, appealing to first home buyers, young professionals, families, downsizers and interstate investors seeking a completed apartment in one of Australia's fastest-growing economic centres.

[smartcode_project:default project_id=5743 project_image_fid=372394]

Rather than positioning Parramatta as an alternative to Sydney's CBD, Equitifund believes the city has reached a point where it stands on its own merits.

"Parramatta is no longer simply an alternative to Sydney CBD, it's becoming a destination in its own right," Equitifund Executive Chairman Greg Huxley said.

"The Lennox captures that evolution with a level of quality and amenity that's difficult to match at its price point."

[smartcode_project:default project_id=5743 project_image_fid=953]

Designed by <a href="https://www.apartments.com.au/architects/marchese-partners">Marchese Partners</a>, the tower responds directly to its riverfront setting through expansive glazing and open-plan layouts that maximise views across the Parramatta River and city skyline. Interiors feature engineered timber flooring, stone benchtops, stainless steel appliances and floor-to-ceiling glazing, while generous balconies extend the living spaces outdoors.

Marchese Partners says the project was conceived to balance high-quality apartment living with practical, long-term functionality, pairing larger, efficient floorplans with amenities more commonly associated with five-star hotels.

That emphasis continues through the resident facilities, which include a 20-metre rooftop swimming pool, fully equipped gym and wellness spaces, full-time concierge, a residents' lounge, function room, private lifts, secure basement parking and rooftop communal areas overlooking the Parramatta River. Ground-floor boardwalk retail and dining further activate the riverfront and integrate the building into the surrounding public realm.

[smartcode_project:default project_id=5743 project_image_fid=925]

Australian housing and finance group Equitifund has secured the remaining apartments, believing there are few completed apartment opportunities in Parramatta that offer the same combination of location, amenity and pricing.

Equitifund National Sales Director Ben Hamblett says buyers are increasingly recognising that premium apartment living no longer needs to come with Sydney CBD pricing.

"The Lennox is where aspirational living becomes attainable," Hamblett said.

"Wake to river and mountain views, step into Sydney's Second CBD, and arrive home to resort-calibre amenities, all without the harbour price tag."

Hamblett says owner-occupiers are also attracted by the convenience of having Westfield Parramatta, Church Street's dining precinct, Parramatta Park, Riverside Theatres, Western Sydney University and major transport connections all within walking distance.

"At The Lennox, lifestyle is not an afterthought, it is the foundation."

[smartcode_project:default project_id=5743 project_image_fid=5374]

The Lennox places residents within walking distance of Parramatta Square, Westfield Parramatta, Church Street Eat Street, Parramatta Station, the ferry wharf, Light Rail, the future Sydney Metro West, Parramatta Park and CommBank Stadium, reinforcing Parramatta's position as one of Australia's most connected metropolitan centres outside Sydney's CBD.

Equitifund says buyers visiting the display suite consistently comment on the quality of the finishes, generous floorplans, river and skyline views, and the walkability of the location. The project has attracted a broad mix of local professionals, upsizers, downsizers, buyers relocating from Sydney's inner suburbs and interstate investors seeking long-term growth opportunities.

That demand aligns with Parramatta's continued evolution as an economic powerhouse. Equitifund Research and Market Insights specialist John Bekiaris says sustained population growth, infrastructure investment and expanding employment opportunities continue to support long-term housing demand across the city.

"Parramatta has evolved from a satellite city into one of Australia's most important economic centres. Population growth, infrastructure investment and employment are all supporting sustained long-term housing demand."

[smartcode_project_cta:default project_id=5743]

The apartment price gap drawing Sydney buyers west

A luxury beachfront apartment at Rainbow Bay has more than doubled in value since it sold off the plan six years ago, setting a new local apartment record in the process.

The three-bedroom apartment in the Flow development on Petrie Street, the first of four new projects locally by Paul Gedoun's S&amp;S Projects, has sold for $7.4 million, after originally selling for $3.27 million when the project launched in 2020.

The seventh-floor apartment, comprising 187 sqm of internal living space and a 54 sqm balcony overlooking Froggies Beach and Snapper Rocks, was purchased by a local family.

The transaction was negotiated by Pezet Matheson director Kerry Pezet and equates to more than $30,000 per sqm.

Pezet said the sale reflected the limited opportunities to buy into the boutique beachfront development.

"The sale highlights the rarity of opportunities within the boutique beachfront development, where residences seldom become available," Pezet said.

"Flow is one of the Gold Coast's most tightly held buildings. Buyers from our database move quickly when residences become available, and achieving an off-market sale at $7.4 million demonstrates the depth of demand for property of this calibre."

<img alt="Flow" data-entity-type="file" data-entity-uuid="c585b206-2130-4eee-a50c-3f27c51a7c70" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-07-06%20at%208.33.25%E2%80%AFPM.png?VersionId=m3pHRDV62Y3fvN.XQuQHq.52ilTWpRLf" />

Flow was the first of four luxury apartment developments delivered by Paul Gedoun's S&amp;S Projects at Rainbow Bay and was completed in 2023.

Positioned on the beachfront overlooking Snapper Rocks, the residence includes three bedrooms, three bathrooms, a powder room and views stretching north along the coastline towards Surfers Paradise.

Pezet Matheson Residential principal Mitchell Lambert said buyers continued to prioritise quality beachfront apartments in tightly held locations.

"Flow Residences offers a rare combination of elevated beachfront positioning, architectural excellence, comprehensive resident amenity and premium finishes, which is exactly what discerning purchasers are seeking," Lambert said.

"The transaction further reinforces Rainbow Bay's reputation as one of Australia's premier coastal lifestyle destinations, where limited supply and growing demand continue to support strong market performance."

Pezet Matheson originally marketed and sold out Flow off the plan, making the latest transaction a return to one of the project's original buyers.

Paul Gedoun is selling his third project, <a href="https://www.apartments.com.au/new-apartments/radia-rainbow-bay-271-boundary-street-coolangatta-qld-4225">Radia Rainbow Bay</a>, after recently completing, and selling out, <a href="https://www.apartments.com.au/buildings/esprit-217-227-boundary-street-coolangatta-qld-4225">Esprit</a>. He has plans for a <a href="https://www.apartments.com.au/news/qld/first-look-s-s-projects-proposes-88-apartment-wellness-tower-at-coolangattas-boundary-street">fourth building</a>, 88 apartments on <a href="https://www.apartments.com.au/new-apartments/209-213-boundary-street-coolangatta-qld-4225">Boundary Street</a>.

Rainbow Bay apartment doubles in price since off the plan sale during pandemic

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

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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.
 
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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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