<p data-end="587" data-start="368">Queensland builder-developer MAYD has revealed the first look at its major North Kirra beachfront development, lodging amended plans that reduce the number of apartments and increase the proportion of larger residences.</p>

<p data-end="778" data-start="589">The project is planned across a substantial 4,742 sqm amalgamated site spanning seven lots at <a href="https://www.apartments.com.au/new-apartments/2-6-pacific-parade-bilinga-qld-4225">2-6 Pacific Parade</a> and 27-33 Golden Four Drive in Bilin​ga, directly opposite Nor​th Kirra Beach.</p>

<p data-end="907" data-start="780"><a href="https://www.apartments.com.au/developers/mayd-group">MAYD</a> secured the site for $32.5 million in 2025, in what was one of the Gold Coast's largest property transactions of the year.</p>

<p data-end="1052" data-start="909">The development will be delivered across two stages, with the first stage carrying an estimated gross realisation value of around $360 million.</p>

<p data-end="1311" data-start="1054">The latest amendments seek to reduce the overall apartment count and shift the project further toward the owner-occupier market, with larger residences designed for buyers wanting considerably more space than traditionally offered in a beachfront apartment.</p>

<p data-end="1451" data-start="1313">The residential mix will include townhomes, oversized two-bedroom apartments, substantial three-bedroom residences and four-bedroom homes.</p>

<p data-end="1676" data-start="1453">MAYD has appointed Cera Stribley to lead the architecture and interiors, with the Melbourne-based design practice drawing on the beachfront setting through a series of ocean-facing terraces and heavily landscaped balconies.</p>

<p data-end="1908" data-start="1678">Strong horizontal forms and curved balconies will define the exterior, with subtropical landscaping integrated throughout the building to soften the built form and increase the connection between the residences and the beachfront.</p>

<p data-end="2142" data-start="1910">The project will also include an extensive collection of resident wellness and lifestyle facilities, continuing the broader shift across the Gold Coast's luxury apartment market toward larger homes supported by resort-style amenity.</p>

<p data-end="2142" data-start="1910"><img alt="MAYD" data-entity-type="file" data-entity-uuid="d1bcbb05-e659-4b47-8bd4-1e595315e2ad" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-27%20at%202.05.03%E2%80%AFPM.png?VersionId=jj0XEud1X1DuLt7_KyElhjMdZGOXmLHP" /></p>

<p data-end="2308" data-start="2144">MAYD Founder Todd Mould said North Kirra was increasingly appealing to buyers attracted to the more established, lower-density character of the southern Gold Coast.</p>

<p data-end="2648" data-start="2310">"North Kirra presents one of the most compelling luxury residential opportunities currently emerging in Australia, combining absolute beachfront with the character and authenticity that buyers are increasingly seeking, and the same sense of tight-knit community that defined Burleigh and Currumbin perhaps 10 or 15 years ago," Mould said.</p>

<p data-end="2797" data-start="2650">"With Gold Coast Airport on its doorstep, it also offers a level of accessibility that broadens its appeal across almost every market demographic."</p>

<p data-end="2938" data-start="2799">The project comes as the southern Gold Coast continues to attract an increasing share of high-end apartment development and buyer activity.</p>

<p data-end="3216" data-start="2940">Kirra in particular has emerged as one of the region's more tightly held beachfront markets, with its relatively low-density character, established surf and hospitality scene and proximity to Gold Coast Airport differentiating it from the higher-density markets further north.</p>

<p data-end="3325" data-start="3218">Mould said those characteristics had informed the approach MAYD and Cera Stribley had taken to the project.</p>

<p data-end="3442" data-start="3327">"We've worked closely with Cera Stribley to create a vision that is deeply connected to its surroundings," he said.</p>

<p data-end="3662" data-start="3444">"Inspired by the coastline itself, the architecture has been shaped around space, privacy and resort-style living, creating a collection of homes that reflects the next generation of luxury on the southern Gold Coast."</p>

<p data-end="3818" data-start="3664">MOTIV Managing Director Carly Cottam, who has been appointed to market the project, said buyer attention had continued to move south along the Gold Coast.</p>

<p data-end="4076" data-start="3820">"Purchasers who may once have defaulted to Broadbeach, Main Beach or Surfers Paradise are increasingly recognising the value of a genuine beachfront location that offers lower density, strong amenity and a more established sense of community," Cottam said.</p>

<p data-end="4375" data-start="4078">"Kirra has a powerful combination of growing demand and genuine scarcity. Beachfront supply is inherently constrained, the area remains relatively low density, and buyers are increasingly placing a premium on locations that feel established, uncrowded and authentic rather than heavily developed."</p>

<p data-end="4503" data-start="4377">Cottam said the proximity to Gold Coast Airport was also proving increasingly important for interstate and second-home buyers.</p>

<p data-end="4741" data-start="4505">"Being minutes from Gold Coast Airport makes it particularly compelling for interstate buyers, frequent travellers and second-home purchasers who can access an authentic coastal lifestyle almost immediately after stepping off a flight."</p>

<p data-end="4910" data-start="4743">The acquisition takes MAYD's active development portfolio to more than $500 million, with the North Kirra project representing one of its largest undertakings to date.</p>

<p data-end="4951" data-start="4912">MAYD is targeting an early 2027 launch.</p>


Joel Robinson

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

<main data-perf-region="main">
<p data-end="600" data-start="394">Castle Hill, the longtime hub of the Hills District, has been one of the major beneficiaries of Sydney's Metro expansion, with improved connectivity helping drive continued population growth, development and buyer demand across the Hills District.</p>

<p data-end="733" data-start="602">But despite that growth, the suburb has seen relatively few major new apartment projects brought to market over the past 18 months.</p>

<p data-end="970" data-start="735">Hills District developer Reve Group is looking to fill that gap with <a href="https://www.apartments.com.au/new-apartments/nova-r-ve-castle-hill-2-garthowen-crescent-castle-hill-nsw-2154">Nova Rêve</a>, a major new mixed-use precinct on the corner of Garthowen Crescent and Old Castle Hill Road, a short walk from Castle Hill Metro Station and Castle Towers.</p>

<p data-end="970" data-start="735">[smartcode_project:default project_id=152737 project_image_fid=377679]</p>

<p data-end="1159" data-start="972">The project will comprise three residential towers alongside a hotel, restaurants, cafes and a skybar, more than 1,600 sqm of ground-floor retail and almost an acre of landscaped gardens.</p>

<p data-end="1357" data-start="1161">It represents the largest project undertaken by Reve Group, the development arm of the Kassis family, which has been building across the Hills District for more than 30 years through Kassis Homes.</p>

<p data-end="3400" data-start="3216">[smartcode_project:default project_id=152737 project_image_fid=377675]</p>

<p data-end="3400" data-start="3216">Nova Rêve also represents a significant step up from the family's first apartment development, Grand Rêve, which was delivered nearby on Garthowen Crescent.</p>

<p data-end="1664" data-start="1517">Grand Rêve introduced larger, house-like apartment layouts and premium inclusions including Wolf and Sub-Zero appliances to the Castle Hill market.</p>

<p data-end="1826" data-start="1666">Nova Rêve takes that approach to a precinct scale, combining the residential component with hospitality, retail and substantial public and resident landscaping.</p>

<p data-end="1826" data-start="1666">[smartcode_project:default project_id=152737 project_image_fid=377685]</p>

<p data-end="2045" data-start="1828">Reve Group Managing Director Sam Kassis said the project reflected the family's three decades of building in the Hills, which has evolved from trophy homes on quarter-acre blocks to larger-scale apartment development.</p>

<p data-end="2269" data-start="2047">"Grand Rêve was our first apartment project here and it showed us what this pocket of Castle Hill could be. Nova Rêve is the refinement of that idea: not just apartments, but a place the whole suburb can use," Kassis said.</p>

<p data-end="2430" data-start="2271">A key part of that approach is the hotel, which has been designed to operate as an amenity for the wider Castle Hill community rather than solely hotel guests.</p>

<p data-end="2606" data-start="2432">It will include restaurants, cafes, skybars and all-day dining, alongside conference and event facilities catering to business functions, community groups and private events.</p>

<p data-end="2724" data-start="2608">At ground level, more than 1,600 sqm of shops and cafes will open onto the surrounding streets and landscaped areas.</p>

<p data-end="2892" data-start="2726">Almost an acre of gardens designed by Land and Form Studios will run through the precinct, incorporating pathways, seating, barbecue areas and children's play spaces.</p>

<p data-end="2892" data-start="2726">[smartcode_project:default project_id=152737 project_image_fid=377680]</p>

<p data-end="3004" data-start="2894">Reve Group's Romio Georges said creating an active ground plane had been central to the planning of Nova Rêve.</p>

<p data-end="3214" data-start="3006">"There are gardens with pathways, barbecues, seating and play areas, shops and cafes opening onto the street, and a hotel with restaurants and a skybar that anyone in Castle Hill can walk into," Georges said.</p>

<p data-end="3400" data-start="3216">The project's elevated position on one of Sydney's highest ridgelines will also provide apartments with outlooks toward the Sydney skyline, surrounding parkland and the Blue Mountains.</p>

<p data-end="3400" data-start="3216">More than 80 per cent of the apartments will occupy corner positions, with Turner responsible for both the architecture and interiors.</p>

<p data-end="3670" data-start="3538">&nbsp;</p>

<p data-end="3670" data-start="3538">[smartcode_project_cta:default project_id=152737]</p>

<h3 data-end="3697" data-section-id="q3n5ak" data-start="3672">&nbsp;</h3>
</main>


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

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


Maréa Residences brings parkside apartments to Coolangatta

<p data-end="535" data-start="324">Melbourne developer PDG has secured Victorian Government approval for its $1.5 billion Southbank development <a href="https://www.apartments.com.au/new-apartments/the-one-1-queens-bridge-street-southbank-vic-3006">The One</a>, clearing the way for the long-dormant riverfront site opposite Crown to finally be developed.</p>

<p data-end="717" data-start="537">The Minister for Planning has approved the project at 1-29 Queens Bridge Street, with the Department of Transport and Planning issuing the planning permit following its assessment.</p>

<p data-end="918" data-start="719">The approval will allow PDG to develop the prominent 5,059 sqm site with a major mixed-use tower comprising premium apartments, including branded residences, a luxury hotel and boutique office space.</p>

<p data-end="1131" data-start="920">PDG acquired the site in late 2024, with its position directly opposite Crown's main entrance and near Melbourne's Arts Precinct making it one of Southbank's most significant remaining development opportunities.</p>

<p data-end="1131" data-start="920"><img alt="PDG" data-entity-type="file" data-entity-uuid="3933013e-6332-4386-b9be-089df05caf17" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-27%20at%209.29.22%E2%80%AFAM.png?VersionId=sITIgBqDL0N3VNSMwWEmF5UA.uvcsRyu" /></p>

<p data-end="1318" data-start="1133">Designed by COX in collaboration with ODO and PDG, the tower's architecture draws on the movement of the Yarra River, with six vertical pleats running the height of the sculpted facade.</p>

<p data-end="1433" data-start="1320">The project will also see the heritage-listed Queens Bridge Hotel restored and incorporated into the development&nbsp;with new hospitality and public uses, including a rooftop venue.</p>

<p data-end="1658" data-start="1591">A significant component of The One will be its residential amenity.</p>

<p data-end="1864" data-start="1660">More than 5,000 sqm of resident facilities will be delivered across a single level, making it one of the largest consolidated residential amenity offerings proposed in an Australian apartment development.</p>

<p data-end="2011" data-start="1866">The planning approval also incorporates a major upgrade of Queensbridge Square, which PDG will deliver in partnership with the City of Melbourne.</p>

<p data-end="2011" data-start="1866"><img alt="PDG" data-entity-type="file" data-entity-uuid="73167fcd-1031-4b6f-a408-a064cfe45ed1" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-27%20at%209.29.17%E2%80%AFAM.png?VersionId=Pf1AEWxw6SNmBqR0zQW5lyEze.MtxgFp" /></p>

<p data-end="2191" data-start="2013">The existing square will be revitalised as a new civic and pedestrian space along the Yarra River, strengthening the connection between the project, Southbank and the riverfront.</p>

<p data-end="2365" data-start="2193">PDG Founder and Managing Director Vince Giuliano said the approval represented a major milestone for a site which has remained largely underutilised for more than 15 years.</p>

<p data-end="2473" data-start="2367">“This is the most significant Planning Permit approval Melbourne has seen in recent years,” Giuliano said.</p>

<p data-end="2775" data-start="2475">“For more than 15 years, this site has remained underutilised. This approval enables us to deliver a project that will contribute meaningfully to the revitalisation of Southbank, restore and reactivate an important heritage building, and create a new civic and hospitality destination for Melbourne.”</p>

<p data-end="2943" data-start="2777">The latest approval follows an earlier planning permit issued by the City of Melbourne covering demolition works across part of the site at 9-29 Queens Bridge Street. Those demolition and early works are already underway.</p>

<p data-end="3145" data-start="3001">PDG has also started generating early interest in the residential component from owner-occupiers ahead of a planned public launch in early 2027.</p>


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

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


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

Gdp Growth

<html><body>
<p><strong>EXPERT INSIGHT</strong></p>

<p>We have lifted our growth forecast for 2021 from 4% to 4.5%; the key will remain the household sector, where accumulated savings; ongoing reopening; vaccines and the boom in the housing market are likely to offset the major headwinds of reduced government support and zero net immigration.</p>

<p>Westpac has lifted its GDP growth forecast in 2021 from 4% to 4.5%, with the 2022 forecast holding at 3%.</p>

<p>The December quarter national accounts provided rich evidence of the key dynamics that will emerge as the recovery continues.</p>

<p>They showed continued evidence of Australia’s bounce back from the pandemic induced recession in the first half of 2020.</p>

<p>Growth in GDP printed at 3.1%qtr, following the 3.4% increase in the September quarter. Annual growth is now -1.1% for 2020, compared to market expectations of -2% only a week earlier.</p>

<p>The key components of growth – household consumption; business investment and dwelling construction all surprised on the upside.</p>

<p>Our forecasts for GDP growth anticipate solid ongoing momentum in those components in 2021.</p>

<p>Household consumption lifted by 4.3% in the December quarter 2020, significantly boosted by the reopening of Victoria where spending increased by 10.4%. Spending in the rest of Australia rose by 2.3%. This result provides compelling evidence of the “reopening” effect with Victoria contributing around 2ppts to the growth rate in household spending.</p>
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bevans

Boom in housing market likely to offset major economic headwinds: Westpac's Bill Evans

<html><body>
<p><strong>Expert Observer</strong></p>

<h2><strong>National accounts</strong></h2>

<p><strong><u>‘V-shaped’ recovery:</u> </strong>The Australian economy (as measured by gross domestic product or GDP) grew by 3.1 per cent in the December quarter (consensus: +2.5 per cent) after rising 3.4 per cent in the September quarter and contracting 7 per cent in the June quarter. It was the biggest six-month lift in GDP since quarterly records began in 1959. GDP is still 1.1 per cent smaller than a year ago.</p>

<p><strong><u>Annual result:</u> </strong>In 2020, the economy contracted 2.5 per cent (biggest fall since 1947) after growing 1.9 per cent in 2019.</p>

<p><strong><u>Contribution to growth</u>: </strong>The biggest contributions to growth came from household spending (+2.3 percentage points); business equipment (+0.3pp); ownership transfer costs, dwellings, government consumption (all +0.2pp); and public investment (+0.1pp). But detracting from growth was net exports, commercial construction and inventories (all -0.1pp).</p>

<p>[smartcode_project:default project_id=7275]</p>

<p><strong><u>Income:</u> </strong>Real net national disposable income rose by 4.9 per cent in the December quarter and was up by 2.1 per cent on the year. In nominal terms GDP rose by 4.2 per cent in the quarter and rose by 0.6 per cent over the year.</p>

<p><strong><u>Productivity:</u> </strong>GDP per hours worked was flat in the December quarter but was up by 2.5 per cent on the year.</p>

<p><strong><u>Industry sectors:</u> </strong>Seventeen of the 19 industry sectors grew in the December quarter. The biggest contribution to the overall increase in output came from <em>Agriculture, Forestry and Fishing</em> (+0.5 percentage points) from <em>Professional, Scientific and Technical Services and Administrative and Support Services </em>(both +0.3pp). Output fell 1.0 per cent in <em>Mining</em> in the quarter with <em>Electricity, Gas, Water and Waste Services</em> down 0.9 per cent.</p>

<p>[smartcode_project:default project_id=92985]</p>

<h2><strong>What does it all mean?</strong></h2>

<p>It has been a most curious period for the Australian economy. After entering recession in the first half of 2020, the economy roared back in the final six months of the year. Clearly it has been all about Covid-19. Australian governments and the central bank responded quickly in locking down the economy and in providing the support and stimulus to families and businesses. The moves to suppress the virus were effective as were the support and stimulus measures.</p>

<p><img alt="" height="977" src="https://s3-ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/pictures/article-images/record_gdp_commsec.jpg" width="1200"></p>

<p>The ‘V-shaped’ nature of the recovery is everywhere to see – economic growth, the job market, retail spending and the housing market. The Reserve Bank acknowledges that the recovery has been stronger than expected.</p>

<p>But the job is not done. The economy is still around 1 per cent smaller than a year ago. Unemployment is still too high; inflation and wage growth are still too low. But the forward indicators like job ads and business and consumer surveys are positive.</p>

<p>We expect the economy to rebound 4.2 per cent in 2021 after contracting 2.5 per cent in 2020. Much still depends on Aussies doing the right thing with social distancing measures. The vaccine roll-out is in the infancy. And then there is the risk posed by mutant strains of the virus.</p>

<p>[smartcode_project:default project_id=2772]</p>

<p>Stimulus and support measures are still very much required, and any scale-back needs to be carefully managed. The Reserve Bank certainly hasn’t changed its rhetoric. Rates will remain low for another three years. Bond buying will continue. Cheap loans will remain under offer to business.  </p>

<p>The all-important jobless rate is expected to ease from 6.4 per cent currently to 5.7 per cent by the end of 2021. While still high, clearly it is moving in the right direction. But spare capacity will remain in the job market for a few more years, keeping the cash rate anchored at 0.1 per cent.  </p>

<p>Craig James is the chief economist at CommSec</p>
</body></html>

We expect the economy to rebound 4.2 per cent in 2021 after contracting 2.5 per cent in 2020

Biggest economic rebound on record: CommSec's Craig James

<html><body>
<p>Expert Observer</p>

<p>The Q4 National Accounts confirmed a brisk rebound in activity.</p>

<p>GDP printed at 3.1%qtr, -1.1%yr.</p>

<p>This was above expectations, market median and Westpac 2.5%.</p>

<p>[smartcode_project:default project_id=7275]</p>

<p>As we had flagged, the risks were to the upside – with the expenditure partials having surprised to the high side. That is how it played out.</p>

<p>The key theme, the economy rebounded rapidly through Q3, +3.4%, and Q4, +3.1%, with considerable momentum into 2021.</p>

<p>Consumers and businesses are upbeat, state governments are spending up, the housing market is red hot and the vaccine roll-out is underway.</p>

<p>Success on the health front has permitted the rolling back of most, but not all, covid restrictions. Victoria emerging from a second lock-down boosted activity in Q4 and will do so again in Q1.</p>

<p>[smartcode_project:default project_id=92985]</p>

<p>The recovery broadened in Q4:</p>

<p>(1) home building, up 4.1%, following a +1.6% for Q3, the first gains since June 2018, in response to cheap credit and government incentives, and</p>

<p>(2) business investment advanced, up 2.6%, led by equipment spending, +8.1%, in response to the accelerated depreciation allowance. That follows a string of negatives.</p>

<p>Real estate activity (ownership transfer costs) surged a further 15.2%, after a 21.6% rebound in Q3, to be 15.3% higher over the year – with the established housing market booming.</p>

<p>Consumer’s ability and willingness to spend is the key dynamic – certainly the relaxing of covid restrictions provides consumers with more opportunities to spend.</p>

<p>[smartcode_project:default project_id=2772]</p>

<p>The household saving ratio spiked to 22% in Q2, on the drop in spending associated with the lock-down and the wave of government income support. The savings rate moderated to 18.7% in Q3 and retraced to 12% in Q4 and will unwind further in 2021.</p>

<p>The critically important point, while there was a tapering of government support in Q4, which saw business profits moderate off a high level, consumers have a sizeable savings buffer to fund a further lift in spending – and that is what they are choosing to do.</p>

<p>The consumer picture was largely as expected with spending posting another strong gain, led by normalising conditions in Victoria, and despite a material drag on incomes from reduced fiscal supports.</p>

<p>Total consumption rose 4.3%qtr to be down just 2.7%yr. Victoria posted a 10.4% gain in the quarter, spending up 2.3%qtr across the other states combined.</p>

<p>The spending detail was a little stronger than expected around vehicles and retail but a touch softer than expected on services.</p>

<p>[smartcode_project:default project_id=24323]</p>

<p>Around incomes, wages rose 1.4%qtr with a strong increase in employment and hours worked more than offsetting initial drags from the wind-back in JobKeeper support. However real disposable income – including small business and non wage incomes and net of interest and tax – recorded a sizeable 3.3% fall. The rise in spending was thus funded out of a reduction in new savings, the savings rate falling from 18.7% in Q3 to 12% in Q4</p>

<p>Public demand continues to be a growth driver, up 1.0% in the quarter and a very brisk 6.5% over the year, in part driven by the response to covid.</p>

<p>Net exports were a small negative, -0.1ppt, as imports roared back, +4.9%, to meet the brisk rebound in domestic demand. Inventories, in total, subtracted -0.1ppt.</p>

<p>In other detail, the Expenditure measure of GDP printed at 3.0%, Income at 3.3% and Production at 3.1%.</p>

<p>Andrew Hanlan is a senior economist at Westpac.</p>
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Consumers and businesses are upbeat, state governments are spending up, the housing market is red hot and the vaccine roll-out is underway.

December quarter sees GDP grow 3.1%: Westpac's Andrew Hanlan's insights

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<p class="post-title entry-title">EXPERT OBSERVER </p>
<div>GDP growth was estimated at a seasonally adjusted -0.3 per cent for Q1, leading to the inevitably mind-numbing 'recession we had to have' headlines.<br><br>Over the year GDP growth slowed to +1.4 per cent. </div>
<div> </div>
<div>Q1 could yet be revised up, of course - especially the very significant negative drag from inventories - and therefore the technical definition of a recession may yet be avoided. </div>
<div> </div>
<div>However, given that GDP growth in Q2 will clearly be severely negative this is largely semantics.</div>
<div> </div>
<div class="separator"><img src="https://1.bp.blogspot.com/-Pt_Gww_Reuc/XtgnFuMgFeI/AAAAAAAA2HQ/vLAGeFkHn3M9QOwI61ZNNpoOjf5yT5T5ACNcBGAsYHQ/s640/A1.jpg" width="640" height="372" data-original-height="804" data-original-width="1381"></div>
<p class="post-body entry-content"><br>Nominal GDP growth over the year is floundering again.<br><br></p>
<div class="separator"><img src="https://1.bp.blogspot.com/-ZfLhyXG8ULc/XtgnF37tlzI/AAAAAAAA2HU/Mx852eP3OhEMtJBOxcGwPqRhzAM8SiTUQCNcBGAsYHQ/s640/A2.jpg" width="640" height="362" data-original-height="794" data-original-width="1401"></div>
<p class="post-body entry-content"> </p>
<div>Real net national disposable income, as a proxy for living standards, has been fairly flat over the past six months. </div>
<p class="post-body entry-content"> </p>
<div class="separator"><img src="https://1.bp.blogspot.com/-NKWTgSUhZQs/XtgnF3i7aWI/AAAAAAAA2HY/CLQfAtv0DaM99MRoKMCyFkKHUTr-cnZfgCNcBGAsYHQ/s640/A3.jpg" width="640" height="368" data-original-height="804" data-original-width="1394"></div>
<p class="post-body entry-content"><br>And the terms of trade have held up well to date, well above the long-run average.<br><br></p>
<div class="separator"><img src="https://1.bp.blogspot.com/-HXTaXlH0wVI/XtgnGmiASCI/AAAAAAAA2Hg/GtnNP1jk36kKzW5yBz4CndeKKYu-AX0eQCNcBGAsYHQ/s640/A5.jpg" width="640" height="378" data-original-height="800" data-original-width="1348"></div>
<p class="post-body entry-content"> </p>
<div>Meanwhile, the interest payable on dwellings continues to fall, now down to the lowest level since 2009 despite the dramatic increase in the dwelling stock over that time.</div>
<p class="post-body entry-content"> </p>
<div class="separator"><img src="https://1.bp.blogspot.com/-MgkJhBkDCVg/XtgnGUlHiqI/AAAAAAAA2Hc/AKW1kQicX989EsVNqJ18tMPoeYSvBpyeQCNcBGAsYHQ/s640/A4.jpg" width="640" height="376" data-original-height="803" data-original-width="1364"></div>
<p class="post-body entry-content"> </p>
<div><strong><span style="text-decoration: underline;">Stimulus mixed</span></strong></div>
<div> </div>
<div class="separator"> </div>
<div>With the Reserve Bank fading quietly into the background, the government must now do the heavy lifting with its fiscal stimulus.</div>
<div> </div>
<div>The Aussie dollar has accordingly soared back towards US 70 cents, in turn slowing the adjustment process. </div>
<div> </div>
<div>The terms of the $688 million renovation stimulus missed the mark completely, leaving such a skinny cohort of prospective qualifying applicants that the government needn't have bothered with it. </div>
<div> </div>
<div>Essentially you must own a house and undertake an expensive renovation within the next few months, but without having a high income (while a whole heap of renovation options are excluded): </div>
<div> </div>
<div class="separator"><img src="https://1.bp.blogspot.com/-F-4fNLv_G3U/XtgoiKsKFjI/AAAAAAAA2H4/wHgQFtbv05Ixdzimj9Xru2Jnvr8LUCxXQCNcBGAsYHQ/s640/rebo.jpg" width="640" height="606" data-original-height="723" data-original-width="762"></div>
<div>
<br>Perhaps some retirees might qualify for a grant, and maybe a few young homeowners with wealthy parents.<br><br>
</div>
<div>The terms of the HomeBuilder grant scheme for <em>new</em> homes are far better targeted, and will undoubtedly be a net positive for the industry. </div>
<div>
<br><strong>PETE WARGENT</strong><em> is the co-founder of AllenWargent property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank">blogger</a>.</em>
</div>
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pwargent-M4siyDbqQY

GDP headed down, recession all but locked in: Pete Wargent

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<p>Mainland China’s rebound accelerates as HSBC Global Research raises GDP growth forecast from 1.7 per cent to 2.4 per cent.</p>
<p>Infrastructure and property investment seem set to be the most important drivers of GDP growth, according to the banking corporation.</p>
<p>Private consumption, however, is likely to continue to lag behind as<span style="font-size: 12.16px;"> demand has yet to pick up. </span></p>
<p><span style="font-size: 12.16px;">"Households facing job-market uncertainty are saving more and likely to stay cautious as virus risks remain", <span>Chief China economist Qu Hongbin reported. </span></span></p>
<p><span style="font-size: 12.16px;">"We thus expect year-on-year rises in retail sales of only 1.3 per cent in the third-quarter and 6.3 per cent in October-December."</span></p>
<p>Infrastructure investment has recovered sharply, funded by 4.75 trillion renminbi (AUD947 billion) of special government bonds, and is set to grow by 15 per cent compared with a year earlier.</p>
<p>Fuelled by credit availability and a quick recovery in real estate transactions, property investment has experienced a similar rebound.</p>
<p>Hongbin noted the government deficit, 3.3 per cent of GDP in the first half of this year, is likely to increase to 7.7 per cent in the second half.</p>
<p>This will provide strong support for further economic recovery.</p>
<p>The HSBC report noted the banking corporation still expect 7.5 per cent growth next year.</p>
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j.ballantyne1990-6AQqhLzZaK

China 2020 GDP forecast raised to 2.4 per cent: HSBC Global Research

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<p>The Australian GDP fell 0.3 per cent in the March quarter, seasonally adjusted, according to figures released by the ABS.</p>
<p>That sees growth slow to 1.4 per cent through the year, the slowest through the year growth sine September 2009 when Australia was in the middle of the GFC.</p>
<p>The 0.3 per cent decline was the first quarterly pullback since 2011.</p>
<p><span>Private demand detracted 0.8 percentage points from GDP, driven primarily by a 1.1 per cent fall in household final consumption expenditure. </span></p>
<p><span>Spending on services fell significantly</span><span style="color: #ff0000;">,</span><span> particularly where restrictions impacted most severely, such as air transport services, hotels, cafes and restaurants, recreation and culture. </span></p>
<p><span>Spending on goods rose, most notably in food and pharmaceuticals, as households prepared for the introduction of restrictions.</span><br><br>Imports of goods fell 3.9 per cent, with falls in consumption and capital goods reflecting weak domestic demand.</p>
<p>Imports of services fell 13.6 per cent, with travel services falling sharply in response to the global outbreak of COVID-19 and associated travel bans.</p>
<p>Exports of services declined 12.8 per cent, with restrictions on overseas arrivals reducing education related travel and tourism in Australia.</p>
<p><span>The household saving to income ratio rose to 5.5 per cent, reflecting a rise in gross disposable income and falls in consumption. </span></p>
<p><span>Gross disposable income was driven by a 6.2 per cent increase in social assistance benefits due to both an increase in the number of recipients and the introduction of new government support packages in response to COVID-19 and bushfires.</span></p>
<p><span>Economists suggest <span class="css-901oao css-16my406 r-1qd0xha r-ad9z0x r-bcqeeo r-qvutc0">Australia is certain to enter its first recession in 29 years</span><span class="css-901oao css-16my406 r-1qd0xha r-ad9z0x r-bcqeeo r-qvutc0">.</span></span></p>
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wdavis-8cCN98p7xp

GDP falls 0.3 per cent in March quarter as COVID-19 starts to take its toll: ABS

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<p>EXPERT OBSERVATION</p>
<p><span>Headline GDP rose by 0.5 per cent in Q4 to be 2.2 per cent higher over the year, a moderate result ahead of an expected virus-driven fall in output in Q1.</span></p>
<p><span> Notwithstanding a significant contribution from the recovery in housing turnover and small improvement in consumer spending, private domestic demand remains weak with falling residential construction and business investment subtracting 0.3ppt from growth. Net exports and stocks helped offset this weakness. </span></p>
<p><span>While the focus of policy-makers has turned to the impact of the coronavirus on both the global and domestic economies, today’s outcome confirms a below trend pace of growth as a starting point even with the strong recovery in housing turnover, with a turnaround unlikely for some time given residential investment has yet to trough, consumer spending is constrained by weak wage growth and businesses outside of mining remain reluctant to invest.</span></p>
<p><span> Factoring in an initial hit from the virus outbreak, this leads us to forecast growth to remain below trend over the next year or so, before seeing a small improvement. There is significant uncertainty about the extent and duration of the shock from the outbreak, but this outlook points to rising unemployment over 2020 and likely further action from the RBA beyond our expected rate cut in April. </span></p>
<p><span>We will update our forecasts for growth, the labour market and the policy outlook next week.</span></p>
<p><span><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2020/3/5/2_GDP%20Components.jpg" alt="" width="713" height="517"></span></p>
<p><span>In Q4, weak private demand growth was driven by a fall in dwelling investment which is now down 9.7 per cent over the year, and a decline business investment. While consumption growth improved, it also continues to track well below its long- run average, reinforcing our long-held view that tax rebates have failed to provide a significant boost to household spending.</span></p>
<p><span> Indeed, part of the increase in consumption reflects extreme price discounting. Public-sector spending made no contribution following the solid outcome in Q3. Offsetting some of this weakness was a 0.1 contribution from exports - though this is a little weaker than recent quarters. A significant (though likely) temporary boost to the expenditure side came from the recovery in housing turnover which saw a boost to real estate margins. </span></p>
<p><span>Both the production and income measures of GDP were slightly stronger than the expenditure measure in the quarter.</span></p>
<p><span>Looking forward, the magnitude of the bushfires and especially the coronavirus impact on the March quarter will be a focus, as will the ongoing impacts of the latter in subsequent quarters. For now, we have factored in a decline in March quarter GDP, but for a small recovery in quarterly growth thereafter on the assumption that the virus is quickly contained. </span></p>
<p><span>As a result, we see year-average growth of 1.2 per cent in 2020 before an improvement in 2021 to around 2.7 per cent. Should the impact of the virus become more protracted this will necessarily see a down grade to our forecasts for growth. </span></p>
<p><span>Notwithstanding the impact of the virus, our read is that the sluggish pace of underlying growth already warrants further policy action, with below-trend growth over the next 18 months likely to see a deterioration in the labour market with further downside risk as a result of ongoing impacts from the coronavirus.</span></p>
<p><span> Indeed, we see the RBA cutting rates for a second time in 2020 at the April meeting and a significant risk of unconventional policy going forward depending on the severity of the uptick in the unemployment rate as well as the magnitude and impact of any response from fiscal policy.</span></p>
<p>Household consumption growth improved slightly in Q4, rising 0.4 per cent q/q but remains weak at 1.2 per cent y/y – the weakest pace since the GFC. The drivers of consumption growth in the quarter were increases in discretionary categories including clothing &amp; footwear, household goods and recreation and culture – possibly reflecting some impact from the earlier tax cuts.</p>
<p>Nonetheless, spending on discretionary items has remained weak over the year, with spending on essentials having driven the bulk of consumption growth. </p>
<p><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2020/3/5/4_Household.jpg" alt="" width="657" height="487"></p>
<p>Underlying business investment declined by -0.8 per cent q/q, similar to Q3 (-1.1 per cent q/q). Unlike Q3, however, weakness in business investment was driven by non-mining investment which fell 3.6 per cent, while mining investment increased by 5.0 per cent q/q.</p>
<p>Mining investment in Q4 was 3.2 per cent higher than the same time a year ago – the first time annual growth has been positive since 2013 other than one-off gain posted in Q3 2017. The turnaround in mining was not unexpected, but the decline in commodity prices that started towards the end of last year, now reinforced by the coronavirus shock to the world economy, casts doubt on whether this will be sustained. At the same time, weak business conditions remain a headwind for non-mining sector investment.</p>
<div class="page" title="Page 2">
<div class="section">
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<div class="column"><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2020/3/5/5_Business.jpg" alt="" width="564" height="377"></div>
<div class="column">
<br>Dwelling investment fell 3.4 per cent in the quarter driven by a fall in investment in construction (-4.1 per cent) and a fall in alterations &amp; additions (-2.2 per cent). Over the year dwelling investment has fallen 9.7 per cent. This result is unsurprising given the weakness in work done, and the ongoing weakness in dwelling approvals. These data also confirm the downturn in construction is not over. The decline was driven by a fall in NSW and QLD, though construction also declined in WA and Tas. Vic saw a small improvement in the quarter.</div>
<div class="column">
<br>Government demand growth slowed considerably from Q3. Underlying public demand grew by 0.1 per cent q/q, well down from 2.0 per cent in Q3. However, growth over the last year was a still solid 5.1 per cent y/y. Government consumption growth was 0.7 per cent q/q – the lowest growth since Q2 2018 due to a fall in defence spending (a volatile component) and another quarter of very modest state/local government consumption growth. In contrast, Federal non-defence spending grew by 2.4 per cent q/q (10 per cent y/y), likely reflecting disability and aged care spending.</div>
<div class="column"> </div>
<div class="column">Underlying public investment declined 2.3 per cent q/q, but this followed a 6 per cent increase in Q3, and it was 4.2 per cent higher than a year ago. Overall, the roll-out of the NDIS and large infrastructure programs still appear to be supporting the economy – and a fiscal package expected in the next week or so, will also provide additional support to Q2 data.</div>
<div class="column">
<br>Net exports made a 0.1ppts contribution to quarterly GDP growth even with export volumes basically unchanged in the quarter, as imports declined (-0.5 per cent q/q). Exports and imports of non-monetary gold declined substantially masking growth, overall, in other trade flows.</div>
<div class="column"> </div>
<div class="column">On the export side, there was a large increase in manufacturing exports (7.6 per cent q/q), with smaller increases in commodity exports – both rural and non-rural. Capital and intermediate goods imports increased, but services imports fell (driven by travel, which has declined in each of the last four quarters), and there was a small decline in consumption goods imports.</div>
<div class="column"> </div>
<div class="column">Over the last year, total imports have declined by 1.5 per cent, consistent with the weakness in domestic demand. Travel exports and imports will decline sharply in Q1.</div>
<div class="column"> </div>
<div class="column"><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2020/3/5/3_export.jpg" alt="" width="541" height="345"></div>
<div class="column">
<br>Compensation of employees rose by 1.0 per cent in the quarter (5.1 per cent y/y). While employment continued to rise, average COE per employee also increased by a moderate 0.5 per cent in the quarter. COE per hour continued to track above the WPI but saw a moderation in year-ended growth in the quarter. The boost to household income growth from tax cuts in Q3 faded in the quarter which also saw the household savings rate tick down.</div>
<div class="column">
<br>By industry, real estate services saw the strongest quarterly growth (up 2.7 per cent on a quarterly basis), likely reflecting the improvement in housing sales. Manufacturing (notably in food products), transport, healthcare and social assistance and mining also grew strongly, as did mining. Construction contracted 2.3 per cent on a quarterly basis, with building construction, engineering and construction services all hit down. Mining, manufacturing, transport, real estate services, public administration and health care each contributed 0.1 per cent to GDP growth in the December quarter, while construction detracted 0.2 per cent from growth.</div>
<div class="column"> </div>
<div class="column"><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2020/3/5/1_Industry%20growth.jpg" alt="" width="629" height="406"></div>
<div class="column">
<br>By state, the ACT experienced the fastest growth in state final demand (+0.8 per cent q/q), followed by NSW (+0.5 per cent), with the latter result largely reflecting growth in public consumption and investment spending. NT SFD rose by 0.3 per cent, its first increase since Q3 2017, reflecting a big boost in public investment and to a lesser extent petroleum exploration (perhaps driven by the end of the NT’s fracking ban). Queensland recorded growth of 0.2 per cent q/q, while Victoria saw a fall of 0.1 per cent, largely reflecting a slowdown in major road construction. SA and WA both contracted 0.2 per cent, driven by falls in private and public investment. Tasmania fell 1.0 per cent on lower public and private investment; non-dwelling construction fell 18.6 per cent on reduced energy and accommodation project spending.</div>
<div class="column">
<br>The slide in farm GDP was arrested in Q4 on a quarterly basis, up 0.4 per cent, although it remains lower on an annual basis (down 3.0 per cent). While the drought continued to wreak havoc in New South and Queensland in Q4, this led to higher cattle and sheep slaughter and therefore higher meat production. 2020 has brought a deluge to many Australian agricultural regions, which is very welcome relief indeed. However, this may be slow to show up in 2020 GDP as graziers rebuild herds and flocks – reducing meat production. It remains too early to say how the 2020-21 winter cropping season will perform.</div>
</div>
</div>
</div>
<p><strong>ALAN OSTER</strong> <em>is the Chief Economist at NAB Group</em></p>
</div>
</div>
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Coronavirus to slow Australian GDP significantly: NAB's Alan Oster

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<p>Economists at ANZ and National Australia Bank are tipping the economy will shrink in the first three months of this year as the coronavirus and bushfires weigh down an already soft Australian economy.</p>
<p>The bearish assessments come as RBA governor Philip Lowe said he would be surprised it the economy shrunk in the March quarter.</p>
<p>ANZ estimates the impact of the coronavirus will slash 0.5 of a percentage point off March quarter gross domestic product and a smaller hit from the bushfires.</p>
<p>The bank forecasts the economy to contract 0.1 per cent in the first quarter, before recovering later in the year.</p>
<div>
<p>"The understandable travel ban in place in Australia on all foreign nationals who have been in China, as well as airline cancellations, will act to sharply reduce the level of tourist arrivals," ANZ economists said in a research note.</p>
<p>"There is a very wide range of uncertainties around the outlook. The virus’s timeline, the behaviour of non-China tourism, the impact on broader Chinese and global growth, and the degree to which Australians limit their travel abroad.</p>
<p>"While the hit to near-term growth is large, we expect the number of arrivals from China to turn around in Q2, with the rebound in tourism adding to growth in Q3 and Q4.</p>
<p>"Consequently, the impact on year-end growth is likely to be small."</p>
<p>NAB chief economist Alan Oster is also expecting a negative March quarter, suggesting that the effects of the coronavirus and bushfires will hit consumption levels, which he expects to be lower than what most economists forecast.</p>
<p>"We haven't put a number on it but we expect GDP to go negative in the March quarter. The question will be: is it a big negative or a small negative?"</p>
<p>While not officially forecasting a negative December quarter, Mr Oster said.</p>
</div>
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Australian economy expected to shrink for first three months of 2020: ANZ, NAB

<html><body>
<p>EXPERT OBSERVER</p>

<p>Australians saved rather than spent most of the budget tax cuts, almost doubling the proportion of household income saved, leaving spending languishing.</p>

<p>The September quarter <a href="https://www.propertyobserver.com.au/https://www.abs.gov.au/ausstats/abs@.nsf/mf/5206.0" target="_blank">national accounts</a> show that in the first three months of the financial year real household spending grew by just <a href="https://www.abs.gov.au/ausstats/abs@.nsf/Latestproducts/5206.0Main%20Features3Sep%202019">0.1%</a>, the least since the global financial crisis.</p>

<p>Over the year to September, inflation-adjusted spending grew by a mere 1.2%, also the least since the financial crisis. Australia’s population grew by 1.6% in that time, meaning the volume of goods and services bought per person went backwards.</p>

<hr>
<h2>Quarterly growth in household spending</h2>

<p><a href="https://images.theconversation.com/files/305094/original/file-20191204-70149-1ixi708.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=1000&amp;fit=clip"><img alt="" src="https://images.theconversation.com/files/305094/original/file-20191204-70149-1ixi708.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip"></a></p>

<p><span class="caption">Household final consumption expenditure, quarterly real growth.</span> <span class="attribution"><a class="source" href="https://www.abs.gov.au/ausstats/abs@.nsf/Latestproducts/5206.0Main%20Features3Sep%202019" target="_blank">Australian National Accounts</a></span></p>

<p>Separate figures released by the Federal Chamber of Automotive Industries on Wednesday show November new car sales were <a href="/news">down 9.8%</a> on November 2018.</p>

<p>By the end of November the Tax Office had issued more than 8.8. million tax refunds totalling A$25 billion, 30% more than a year before.</p>

<p>Instead of being largely spent, they were mostly saved, pushing up the household saving ratio from 2.7% to 4.8%, its highest point in more than two years.</p>

<hr>
<h2>Household saving ratio</h2>

<p><a href="https://images.theconversation.com/files/305092/original/file-20191204-70144-nfcimx.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=1000&amp;fit=clip"><img alt="" src="https://images.theconversation.com/files/305092/original/file-20191204-70144-nfcimx.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip"></a><br><span class="caption">Ratio of household net saving to household disposable income.</span> <span class="attribution"><a class="source" href="https://www.abs.gov.au/ausstats/abs@.nsf/Latestproducts/5206.0Main%20Features1Sep%202019">Australian National Accounts</a></span></p>

<hr>
<p>Treasurer Josh Frydenberg put the best face on the result, saying whether they had been spent or saved, the cuts had put households in a stronger position.</p>

<p>The government’s goal has always been to put more money into the pockets of the Australian people, and it’s their choice as to whether they spend or save that money</p>

<p>Separately calculated <a href="https://www.abs.gov.au/AUSSTATS/abs@.nsf/Lookup/8501.0Main+Features1Sep%202019" target="_blank">retail figures</a> show that in the three months to September the volume of goods and services bought fell 0.1%.</p>

<p>The disposable income households had available to spend grew an outsized 2.5%, driven by what the Bureau of Statistics said were the <a href="https://www.abs.gov.au/ausstats/abs@.nsf/Latestproducts/5206.0Main%20Features2Sep%202019" target="_blank">budget tax cuts</a>.</p>

<h2>Growth at GFC lows</h2>

<p>The Australian economy grew just 0.4% in the three months to September, down from 0.6% in the June quarter, and 0.5% in the March quarter.</p>

<p>Over the year to September it grew <a href="https://www.abs.gov.au/AUSSTATS/abs@.nsf/Latestproducts/5206.0Main%20Features1Sep%202019" target="_blank">1.7%</a>, well short of the <a href="https://budget.gov.au/2019-20/content/bp1/download/bp1_bs2.pdf" target="_blank">budget forecasts</a>, which in year average terms were 2.25% for 2018-19 and 2.75% for 2019-20.</p>

<hr>
<h2>Real GDP growth</h2>

<p><a href="https://images.theconversation.com/files/305100/original/file-20191204-70126-15uhedo.JPG?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=1000&amp;fit=clip"><img alt="" src="https://images.theconversation.com/files/305100/original/file-20191204-70126-15uhedo.JPG?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip"></a><br><span class="attribution"><a class="source" href="https://www.abs.gov.au/ausstats/abs@.nsf/Latestproducts/5206.0Main%20Features1Sep%202019" target="_blank">ABS, Commonwealth Treasury</a></span></p>

<hr>
<p>After taking account of population growth, GDP per person grew not at all in the September quarter. Over the year to September living standards grew a bare 0.2%.</p>

<p>Gross domestic product per hour worked, which is a measure of productivity, fell 0.2% during the quarter and fell 0.2% over the year.</p>

<p>Company profits were up 2.2% in the quarter and 12.7% over the year. Wage and superannuation payments grew at about half those rates: 1.2% and 5.1%.</p>

<p>Housing investment was down 1.7% over the quarter and 9.6% over the year.</p>

<p>What household spending growth there was was concentrated on essentials, led by health and rent. So-called discretionary or non-essential expenditures fell, led down by spending on cars, dining out and tobacco.</p>

<hr>
<h2>Consumption growth by category, quarterly</h2>

<p><a href="https://images.theconversation.com/files/305120/original/file-20191204-70174-1ez6pr1.JPG?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=1000&amp;fit=clip"><img alt="" src="https://images.theconversation.com/files/305120/original/file-20191204-70174-1ez6pr1.JPG?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip"></a><br><span class="caption">Treasury definitions of discretionary and non discretionary spending.</span> <span class="attribution"><span class="source">ABS, Commonwealth Treasury</span></span></p>

<hr>
<p>The economy was kept afloat by a surge in government spending. It grew 0.9% in the quarter and 6% over the year. Growth in government spending and investment together accounted for 0.3 of the quarter’s 0.4 points of economic growth.</p>

<h2>Government and mining to the rescue</h2>

<p>Mining production grew 0.7% over the quarter and 7.4% over the year. A mining-fuelled surge in exports (which eclipsed imports for the first time since the 1970s) contributed almost as much to economic growth as government spending.</p>

<p>Drought-affected farm production fell 2.1% over the quarter and 6.1% over the year.</p>

<p>Business investment fell 4% in the quarter and 1.7% over the year, led down by a 7.8% fall in mining investment in the quarter and a 11.2% fall over the year, as liquefied natural gas projects came to completion. Non-mining investment fell 0.4%.</p>

<p>Asked whether the December budget update would contain tax measures designed to boost business investment, the treasurer said he was in discussions with business. The update is expected in the week before Christmas.</p>

<p>There’s little evidence in today’s figures of the “<a href="https://www.rba.gov.au/media-releases/2019/mr-19-33" target="_blank">gentle turning point</a>” spoken about hopefully by the Reserve Bank governor as recently as Tuesday.</p>

<p>If things don’t pick by the bank’s first board meeting for the year in February, it is a fair bet it will cut its cash rate again. By then it will know what the treasurer did (or didn’t) do in the budget update and whether we decided to spend over Christmas.<img alt="The Conversation" height="1" src="https://counter.theconversation.com/content/128297/count.gif?distributor=republish-lightbox-basic" style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important; text-shadow: none !important;" width="1"></p>

<p><span><a href="https://theconversation.com/profiles/peter-martin-682709" target="_blank">Peter Martin</a>, Visiting Fellow, <em><a href="http://theconversation.com/institutions/crawford-school-of-public-policy-australian-national-university-3292" target="_blank">Crawford School of Public Policy, Australian National University</a></em></span></p>

<p>This article is republished from <a href="http://theconversation.com" target="_blank">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/gdp-update-spending-dips-and-saving-soars-as-we-stash-rather-than-spend-our-tax-cuts-128297" target="_blank">original article</a>.</p>
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