The new <a href="https://www.apartments.com.au/new-apartments/yarraville-green-42-stephen-street-yarraville-vic-3013">Yarraville Green</a> development in Melbourne's inner west is showing that landscaping can be just as influential as architecture, with buyers responding strongly to the garden-first approach adopted from the outset by developer Excelon Projects and the project's design team.

Excelon appointed Six Degrees Architects and landscape architects SBLA to work collaboratively on the development, with a brief to create "a sustainable, design-led building with a focus on community."

That approach has resonated with buyers. According to Next Chapter Director Tom Hirini, who is leading the sales campaign, the landscaped communal garden has become one of the project's defining features, alongside its boutique scale and European-inspired cluster housing concept.

Local downsizers, right-sizers and established families already living in Yarraville and surrounding suburbs have accounted for the majority of purchasers.

[smartcode_project:default project_id=144913 project_image_fid=297740]

Yarraville Green will comprise 53 homes, including apartments and townhomes, arranged around the shared central garden to maximise connections to the landscaped open space. Parking has been moved underground, allowing the ground plane to be dedicated to greenery, pedestrian movement and communal spaces.

The landscape extends well beyond passive planting. Productive garden beds, a pergola, communal gathering spaces, garden sheds and a pet wash have all been integrated into the masterplan, creating spaces designed to encourage everyday interaction between residents.

[smartcode_project:default project_id=144913 project_image_fid=297741]

The interiors continue Excelon's focus on craftsmanship, incorporating bespoke elements by Melbourne artisans including leadlight detailing by Adadaz, hand-turned timber hardware by Auburn Woodturning and blown-glass lighting by Ruth Allen.

Sustainability has also been embedded throughout the project, with Yarraville Green targeting an average 7-star NatHERS energy rating through passive design principles, rooftop solar servicing common areas and rainwater harvesting for landscape irrigation.

[smartcode_project:default project_id=144913 project_image_fid=297735]

Construction continues to progress at Yarraville Green, with structural works well underway and framing works approaching completion under builder Balmain &amp; Co. The project remains on track for completion in mid-2027.

Apartments at Yarraville Green are currently priced from $625,000, while townhomes start from $1.4 million.

[smartcode_project_cta:default project_id=144913]

Joel Robinson

Garden-led design drives buyer demand at Yarraville Green

National diversified developer Fortis has officially launched Crest &amp; Walker, its latest Brisbane apartment development, with construction now underway on the 20-storey Newstead project.

Award-winning builder BINAH has commenced construction on the Bureau^Proberts-designed building, which will deliver a limited collection of 65 two and three-bedroom apartments on Kyabra Street.

[smartcode_project:default project_id=145922 project_image_fid=373556]

The project marks Fortis' fourth active residential development in Brisbane, following River House, which is nearing completion, alongside projects in New Farm and Hamilton as the national developer continues to expand its South East Queensland pipeline.

Fortis General Manager – Development Queensland Dan Boman said Crest &amp; Walker reflects the developer's long-term commitment to delivering design-led residential projects in Brisbane's established inner-city suburbs.

"We're proud to be strengthening our presence in Brisbane with Crest &amp; Walker, particularly in such a sought-after lifestyle destination as Newstead," Boman said.

"Every Fortis project is shaped by its context, and we approach each one with the respect and care it deserves.

"Our focus is always on creating places that feel connected to their neighbourhood and elevate the everyday experience for residents. Newstead continues to evolve as one of Brisbane's most sought-after urban communities, and Crest &amp; Walker reflects our ambition to contribute meaningfully to that story."

[smartcode_project:default project_id=145922 project_image_fid=373559]

Positioned between Gasworks Plaza and James Street, <a href="https://www.apartments.com.au/new-apartments/crest-walker-newstead-12-kyabra-street-newstead-qld-4006">Crest &amp; Walker</a> has been designed as a boutique residential address offering privacy and generous living spaces within one of Brisbane's most established lifestyle precincts.

The building features a contemporary brick podium softened by integrated landscaping, while the upper levels are characterised by restrained architecture and enduring materiality. Interiors have been designed to maximise natural light, acoustic performance and long-term liveability.

[smartcode_project:default project_id=145922 project_image_fid=373583]

Residences comprise spacious two and three-bedroom floorplans, with two-bedroom apartments priced from $1.55 million and three-bedroom, half-floor residences from $3.95 million.

Residents will have access to a wellness-focused rooftop featuring a swimming pool, sauna, steam room, landscaped dining spaces and outdoor lounge areas overlooking Newstead and the Brisbane CBD.

[smartcode_project:default project_id=145922 project_image_fid=373571]

Sales are being managed by Slaite Projects, with Fortis expecting strong demand from owner-occupiers seeking a high-quality, design-focused apartment in one of Brisbane's most tightly held inner-city suburbs.

Completion of Crest &amp; Walker is slated for late 2028.

[smartcode_project_cta:default project_id=145922]

Fortis expands Brisbane pipeline with launch of Crest & Walker in Newstead

The enormity of delivering a true skyscraper in Australia's new development market is often overlooked.

It has taken the best part of a decade since plans for Chevron One were first unveiled, but the 41-storey tower is now complete, with residents collecting their keys and moving into what has become one of the Gold Coast's most recognisable new landmarks.

Rising 127 metres above Chevron Island, Chevron One stands almost twice as high as any other building on the island. Its scale places it alongside the trio of towers at Jewel, arguably the last truly significant addition to the central Gold Coast skyline when they were completed around six years ago.

While there are several developments underway around a similar height to Chevron One, they are more concentrated within clusters of the highest towers in the city. The fact Chevron One sits within a developing precinct, looking back at the other high-rise developments in Surfers Paradise and Broadbeach, makes it a different proposition altogether. It will certainly become a reference point on the Gold Coast skyline.

[smartcode_project:default project_id=6515 project_image_fid=68833]

Developer Bensons Property Group is behind the 41-storey tower, which has 229 apartments, along with an exhaustive list of resident amenity spread across what is the largest development site ever assembled on Chevron Island.

The tower has been the talk of the town for years, says Ray White Projects Gold Coast agent Caitlin Rosenboom, who is selling the remaining apartments.

"People have been watching Chevron One go up for years," Rosenboom says, adding that many prospective buyers have been surprised by the scale of the views once they step inside.

"It's only when they walk through a completed apartment that they truly understand the position of the building," Rosenboom says.

"The views are jaw-dropping. Whether you're looking east over the ocean, across Surfers Paradise, along the river systems or out to the hinterland, every level offers something different but equally impressive."

[smartcode_project:default project_id=6515 project_image_fid=360215]

One of Chevron One's defining advantages is its location on the eastern side of Chevron Island on Stanhill Drive, a position which protects the views forever.

"There's only one row of houses between Chevron One and the water, and the height restrictions along the river means views from Chevron One can never be built out,"&nbsp;Rosenboom says.

While new apartment developments continue to emerge across the Gold Coast, Rosenboom says opportunities to secure a completed apartment with this level of outlook are becoming increasingly rare.

"The size of the site is something that would be incredibly difficult to replicate today," she says.

"That's allowed Chevron One to deliver the sort of amenity, open space and resident facilities that very few projects can offer. There are not many completed apartment buildings on the Gold Coast right now that can compete with the combination of scale, quality and amenity."

[smartcode_project:default project_id=6515 project_image_fid=68839]

There's around 2,000 sqm of amenity solely for the use of residents of Chevron One. Club One features a uniquely shaped swimming pool that mirrors the footprint of the building itself, set within a extensively landscaped gardens. There's also an indoor pool and spa, a fully equipped gym with a Pilates room, a yoga garden, a bookable private dining area and lounge that can host up to 30 people, and a 24-hour concierge service.

As for the buyers, Rosenboom is fielding enquiry from everywhere: Sydneysiders and Melburnians looking at the new and off-the-plan market following the changes in the Federal Budget, as well as those looking to relocate, through to South East Queenslanders seeking either a permanent home or a weekender bolthole.

"The Gold Coast lifestyle continues to resonate with people relocating from the southern states, and when they see the views and the quality of what's been delivered at Chevron One, it becomes very easy for them to understand the appeal," Rosenboom says.

A diverse mix of one, two and three-bedroom apartments remain available, with each offering "something a little different", be it the orientation and views, configuration, or level, to suit a wide variety of buyers.

The remaining apartments are ready to inspect in person, by appointment.

[smartcode_project_cta:default project_id=6515]

A decade in the making: Residents to move into Chevron One as construction wraps up

A general rule of thumb in new apartment developments is that the penthouses get the rooftop.

It's a formula that's become commonplace across Australia's apartment market. Residents might have access to a pool, gym or barbecue facilities on a dedicated lower level, but the most desirable outdoor spaces are typically reserved for the highest-priced homes at the top of the building.

<a href="https://www.apartments.com.au/developers/sherpa-property-group">Sherpa Property Group</a> has taken the opposite approach.

Rather than dedicating the rooftop to a handful of buyers, the Gold Coast developer has made it the centrepiece of its Flourish collection, creating expansive shared spaces from the best vantage point in the building.

The philosophy has reached its most ambitious expression at <a href="https://www.apartments.com.au/new-apartments/flourish-soleira-palm-beach-1150-1160-gold-coast-highway-palm-beach-qld-4221">Flourish Soleira</a> in Palm Beach, where two rooftop precincts connected by a skybridge will deliver one of the most extensive lifestyle offerings seen in a residential apartment project on the Gold Coast.

[smartcode_project:default project_id=150017 project_image_fid=374053]

"We're seeing a clear move toward developments that offer more than just an apartment," Sherpa Group founder Christie Leet said.

"People want spaces that support how they actually live, whether that's working from home, staying active, or spending time with family and friends.

"That's where amenity becomes critical. It's not just about what's included, but how those spaces are designed to be used every day."

[smartcode_project:default project_id=150017 project_image_fid=374052]

The breadth of amenity has already attracted buyers across multiple demographics. Younger first home buyers have been drawn to Soleira's one-bedroom apartments, a product rarely delivered in Palm Beach, while families have responded to practical inclusions such as the shallow children's pool adjoining the main lap pool and the extensive communal recreation areas.

Instead of a single rooftop, Soleira delivers two distinct lifestyle zones.

[smartcode_project:default project_id=150017 project_image_fid=372547]

The southern rooftop has been dedicated to wellness, featuring a gym, yoga and Pilates studio, work-from-home facilities, a wellness centre, spa, and hot and cold plunge pools.

The northern rooftop focuses on recreation and entertaining, incorporating a heated resort-style pool, private dining rooms, pizza ovens, barbecues, a golf simulator, children's recreation areas, and what is expected to be the Gold Coast's first rooftop basketball court, which will also double as a squash court.

[smartcode_project:default project_id=150017 project_image_fid=374054]

Beyond the rooftops, Soleira will introduce 1,500 sqm of curated retail beneath the towers, creating one of Palm Beach's first genuinely mixed-use lifestyle precincts where cafés, restaurants and convenience retail become part of residents' everyday lives.

Sherpa has also retained management rights across the development, allowing it to oversee the long-term operation of the building through a 24-hour concierge model. The developer is also exploring additional revenue streams within the precinct aimed at helping offset ongoing body corporate costs for residents.

[smartcode_project:default project_id=150017 project_image_fid=370962]

While Soleira is the largest project Sherpa has delivered, the rooftop-first philosophy has been evolving for several years.

It began with <a href="https://www.apartments.com.au/new-apartments/amargo-6-12-sixth-avenue-palm-beach-qld-4221">Flourish Amargo</a>, the first project released under the Flourish brand. Rather than competing at the ultra-luxury end of the market with oversized half-floor and full-floor residences, Sherpa focused on creating lifestyle-driven apartments supported by resort-style shared spaces.

Amargo introduced more than 800 sqm of rooftop amenity, combining wellness facilities, heated pools, entertaining areas, cabanas, pizza ovens and private dining spaces into what was designed as an extension of residents' homes rather than a facility used only occasionally.

[smartcode_project:default project_id=146527 project_image_fid=366550]

That approach continued with Flourish Oasis, where the same amenity-led philosophy was refined into a more boutique development. Strong demand from Sherpa's growing VIP database saw much of the project sold before it reached the broader market, reinforcing buyer appetite for apartment communities centred around shared lifestyle experiences.

Flourish Amargo is slated for completion mid-way-through next year, with Oasis to be delivered by late 2027. Flourish Soleira is expected to complete in 2030.

[smartcode_project_cta:default project_id=150017]

Sherpa takes amenity to the sky as Flourish Soleira captures booming Palm Beach demand

As apartment living continues to evolve across Sydney's growth corridors, the quality and distribution of shared spaces is increasingly shaping how residents experience home. Rather than functioning as add-ons, amenities are being embedded into the daily rhythm of a building, supporting everything from quiet retreat to social interaction, often within a single vertical community.

At <a href="https://www.apartments.com.au/new-apartments/aeris-melrose-park-nursery-street-melrose-park-nsw-2114">Aeris</a> in Melrose Park, this approach is resolved through a layered amenity offering that unfolds from ground level through to its upper podium. Developed by <a href="https://www.apartments.com.au/developers/sekisui-house-australia">Sekisui House Australia</a> in partnership with Hankyu Hanshin Properties, the project introduces 468 apartments across two towers and a mid-rise building, positioned at the highest point of the broader masterplan.

[smartcode_project:default project_id=426 project_image_fid=359199]

The amenity experience begins at street level, where two courtyards sit within a landscaped setting that connects residents to the wider network of parks and green spaces. These green spaces are not isolated pockets but part of a wider pedestrian network that links Aeris to the surrounding <a href="https://www.apartments.com.au/developments/melrose-park-nsw-2114">Melrose Park</a> precinct, including Central Park, future schools, and the Town Centre opening in July 2026. The result is a transition that moves from public to private without abrupt boundaries, allowing residents to pass through shaded, tree-lined environments before reaching the building itself.

Moving upward, the focus shifts to the level five podium, where the primary communal facilities are concentrated. This space brings together a 16-metre swimming pool, outdoor seating areas, and a communal BBQ zone arranged to take advantage of elevated outlooks. Seating is positioned beneath pergolas, creating pockets of shade that extend the usability of the space throughout the day. The pool edge aligns with views toward the wider district, reinforcing the sense of elevation that defines the project’s positioning.

In the adjacent building, this is complemented by quieter, more contemplative spaces, including an outdoor cinema set within the same level. Positioned to operate primarily in the evening, it introduces a different tempo to the shared environment, shifting from daytime activity to after-hours use without requiring separate zones.

[smartcode_project:default project_id=426 project_image_fid=360299]

The podium also accommodates an intimate private resident gym. Located on the lower levels, it gives residents convenient access to fitness facilities without leaving the building.

Above, the elevated podium sky deck extends the amenity offering, providing additional open-air spaces with elevated outlooks across the surrounding landscape. While more restrained in program, this upper level reinforces the project’s vertical progression, from ground-level greenery to elevated outlook, allowing residents to move between distinct spatial conditions within a single address.

This distribution of amenities reflects a deliberate response to how residents use space across the day. Sekisui House Australia Sales and Marketing Director Peter Kalaf points to the role these shared areas play in shaping buyer demand. Aeris has been conceived as more than a collection of apartments, with the podium pool, gym and outdoor cinema forming part of a broader lifestyle offering that extends the home beyond each individual residence.

[smartcode_project:default project_id=426 project_image_fid=360300]

What distinguishes Aeris is not the inclusion of these elements individually, but how they are arranged in relation to one another. Active, social, and passive spaces are layered vertically rather than separated, allowing residents to choose between them without leaving the building or moving far from their apartment. This proximity supports both routine use, such as a morning swim or evening workout, and more occasional gatherings, whether around the BBQ area or within the cinema setting.

The amenity design also sits within a broader framework of connectivity across Melrose Park. The Melrose Park Town Centre, anchored by Coles and Dan Murphys, features a mix of retail, dining, health and lifestyle offerings, bringing everyday convenience closer to residents. By the end of the year, more than five hectares of parks and open space, equivalent to around seven football fields of green space on residents' doorstep, will further enhance the precinct, allowing the internal facilities at Aeris to operate as an extension of the wider neighbourhood rather than a substitute for it.

Construction at Aeris continues to gather momentum, with ground floor slabs expected to be completed in late 2026 before the first sections of the buildings begin to rise above ground.

[smartcode_project_cta:default project_id=426]

Elevated amenity anchors daily life at Aeris, Melrose Park

Gdp Growth

soliver-smf6LQXgW9

GDP growth disappoints, sliding into "GDP per capita recession": Shane Oliver

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Households are spending more money despite growth in household income remaining low, the RBA's November domestics economic conditions report suggests.
Household consumption growth has been stable at around three percent over the last year, however growth in household income remains low.
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Goods consumption grew by 3.5 per cent over the year to the June quarter.
The strong percentage growth in expenditure on food and clothing more than offset a decline in motor vehicle sales. 
Consumption of services grew by 2.6 per cent, supported by growth in the consumption of recreation and communication services.
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There have been some sizeable upward revisions to consumption growth in recent quarters, notably to consumption of overseas travel services, which has become more complicated to measure after the discontinuation of outgoing passenger cards in mid 2017.
By state, consumption growth continues to be strongest in New South Wales and Victoria. 
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Disposable income growth has been driven by labour income, which is growing at around its fastest year-ended rate since 2012.
It is still tracking however below its long-run average.
"Housing and equity prices will weigh on household wealth," the RBA noted.
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jonathanchancellor-7SQnKwU6yx

Household consumption growth stable but income growth remains low: RBA

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<a href="https://www.propertyobserver.com.au/http://www.abs.gov.au/ausstats/abs@.nsf/mf/5206.0" target="_blank">Wednesday’s GDP figures</a> were good. Growth was up 0.9% in the June quarter and 3.4% over the past 12 months.
As they say in baseball: “You can’t boo a home run.” But you can ask how likely the batter is to do it next time. The detail behind the figures raises further questions.
<h2>How good were they really?</h2>
Even before we get to that, it’s worth noting than GDP per capita was up 0.5% in the quarter, amounting to a 1.8% increase over the year. That’s good, but half as much as headline growth. Per capita growth is what drives living standards.
Even on an annual basis per capita growth bounces around. The following chart shows it is usually less than 2% and only occasionally reaches 3%, but never too far from zero – even excluding the GFC.
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Growth per capita is volatile in no small part because immigration is volatile.
Standard economic theory tells us that in the long run immigration has very little impact on GDP per capita unless it drives a shift in the population’s mix of skills.
But in the short run it depresses GDP per capita because the fixed capital (such as buildings and machines) has to be shared between more workers.
Since immigration is somewhat lumpy, and the skill mix is neither obvious nor constant, there can be pretty substantial swings in GDP per capita in a high-immigration economy. At 1.6% per annum, Australia’s population growth is roughly double the OECD average, so it’s best not to get too hung up on the quarterly numbers.
<h2>Good for how long?</h2>
The larger and more pressing question in whether this quarter’s good numbers will last.
There are reasons to be sceptical. First, household expenditure was a key component of the recent growth numbers. As ABS chief economist Bruce Hockman put it:
Growth in domestic demand accounts for over half the growth in GDP, and reflected strength in household expenditure.
We’ve been sustaining strong household expenditure by saving less, but that’s unlikely to continue.
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In an economy in which heavily indebted households face mortgage rate hikes from three of the big four banks (likely to be four soon) despite no official increase in interest rates, household spending will come under pressure.
Wages growth is still languishing at around 2% (<a href="https://www.propertyobserver.com.au/http://www.abs.gov.au/ausstats/abs@.nsf/mf/6345.0" target="_blank">the most recent wages price index came in at 2.1%</a>), meaning that households aren’t earning much extra income.
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Add to this a lower Australian dollar putting pressure on the price of imports –such as mobile phones, iPads and computers, to name a few – and it seems brave to predict continued robust consumer spending.
<h2>Special for how long?</h2>
It is also worth being a bit cautious about the case for Australian exceptionalism. Yes, we’ve had a run of 27 odd years of continuous economic growth. Yes, we weathered the financial crisis better than most.
But we are also part of a global economy that is yet to see the full effects of the Trump trade war. And we are subject to the same sort of pressures that other advanced economies are facing: stubbornly low wages growth despite historically low unemployment, inflation that won’t grow, and an uncertain outlook for China – our most important trading partner.
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Can we really return to the trend growth rates of the 1990s while the countries we compare ourselves with struggle? I hope so, but I doubt it.
The newly minted treasurer, Josh Frydenberg, couldn’t help but take credit for this week’s good news. Fair enough. But he might want to be cautious. Quarterly numbers have a habit of reversing themselves. And with an election not too far away it’s politically risky to tie oneself too closely to the vagaries of the macroeconomy in general and the forecasts of Treasury and the Reserve Bank in particular.
Reserve Bank Governor Phil Lowe might have mentioned that to Frydenberg in their much photographed recent meeting.<img src="https://counter.theconversation.com/content/102717/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" 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;">
<a href="https://theconversation.com/profiles/richard-holden-118107" target="_blank">Richard Holden</a>, Professor of Economics and PLuS Alliance Fellow, <a href="http://theconversation.com/institutions/unsw-1414" target="_blank">UNSW</a>
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/vital-signs-national-accounts-show-past-performance-no-guarantee-of-future-results-102717" target="_blank">original article</a>.
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j.ballantyne1990-6AQqhLzZaK

Past performance of national accounts no guarantee of future results: Richard Holden

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The national accounts release has the GDP up 0.9 percent in the June quarter, after growing 1.1 percent in the March quarter.
Annual economic growth rose from 3.1 percent to 3.4 percent, the strongest growth rate in almost six years.
It's the 28th consecutive year of growth, Commsec's Craig James said.
The Australian economy expanded at its fastest pace in nearly six years - well above the consensus forecast among economists.
Economists had tipped the national accounts would show 0.7 percent in growth in the June quarter.
CommSec's Craig James says there are good reasons to expect the expansion to continue for some time to come.
"We wouldn’t quibble with the Reserve Bank’s expectation of 3.25 per cent growth during 2018/19 – already the economy is growing at a faster rate," he said.
The biggest contribution to growth came from household consumption, which was up 0.4 percent. 
The new Josh Frydenberg treasurer said the result reflected strong household consumption with spending up in 12 of 17 categories, showing the benefits of "recent strong jobs growth."
 
 
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jrobinson-rf4aSBido9

28th year of growth for Australian economy

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EXPERT OBSERVATION
Westpac's Andrew Hanlan has cited two key events this week, the Central Bank forum being hosted by the ECB and in Australia the RBA minutes.
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Real GDP grew by 1.0% in the March quarter, lifting annual growth to 3.1% - an above trend outcome, with trend judged to be 2.7%. Non-farm GDP grew by 3.6% over the year, the strongest annual outcome since 2012. These results bring output growth more into line with that for employment, which increased by 3.5% over the year.
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Economic conditions have been supported by a combination of global and domestic forces, leading to conditions becoming more synchronised across the state economies, namely:
<ol>
<li>The global backdrop is more favourable. World growth accelerated in 2017 to 3.8%, up from 3.2%, the strongest pace since 2011. We expect world growth to hold around this 3.8% pace in 2018, supported by the US. However, conditions in China are likely to moderate.</li>
<li>Commodity prices are up off the lows of late 2015, improving cash flows for miners and boosting government tax revenues. Going forward, we expect commodity prices to moderate as China slows and supply expands.</li>
<li>The mining investment drag is greatly diminished, albeit not quite complete.</li>
<li>Non-mining investment is trending higher, led by construction activity, to meet the needs of a fast growing population. Notably, total business investment turned the corner in 2017, up 6%, following four years of decline.</li>
<li>Public demand, a quarter of the economy, grew by a brisk 5.5% over the year, directly adding 1.3ppts to activity, with additional positive spill-over effects. Investment in an upswing (centred on transport infrastructure) and additional resources are being directed to health.</li>
<li>Exports are a growth driver, adding 0.9ppts to activity over the year, with strength in LNG (expanding capacity) and services (albeit current estimates suggest a recent consolidation).</li>
</ol>
Weaknesses remain, particularly around the consumer and housing. The consumer is vulnerable at a time of weak wages growth, high debt levels and slipping house prices. The housing sector is cooling as lending conditions tighten, with prices easing back from recent highs. Auction clearance rates in Sydney and Melbourne have slipped further to now be at below average levels.
<img src="https://westpaciq.westpac.com.au/wibiqauthoring/_uploads/image/bulletin/Justin_Images/JuneGDPContrib.jpg" alt="June " title="GDP contr">
Consumer spending is choppy (up only 0.3% in the March quarter) and ‘slightly below trend’ (up 2.9% over the year). Even the current pace of consumer spending appears unsustainable over the forecast period – we expect a slowing to 2.5% for 2018 and 2019. Spending has been supported by a drop in the savings rate, declining to 2.1% from 4.0% a year ago, with the scope for a further run-down diminished. In addition, the turnaround in housing price growth, from 11.3%yr nationally a year ago to –1.5%yr currently, could see negative spill-overs for consumer demand, although ‘wealth effect’ boosts look to have been very muted through the price upturn (see p14).
Total labour income grew by a robust 5.1% over the past year, but this was largely reliant on a very strong hiring burst that looks to have been temporary. Wages, as measured by average compensation of non-farm employees, grew by only 1.6% over the year, to be flat in real terms. Employment increased by 3.5% in the year to the March quarter 2018, twice population growth, in part a catch-up following a hiring pause around the July 2016 Federal election. Jobs growth has subsequently slowed in 2018, to 1.2% annualised for the initial five months - for the full year we expect an increase of around 1.8%.
<img src="https://westpaciq.westpac.com.au/wibiqauthoring/_uploads/image/bulletin/Justin_Images/JuneHHLabourINc.jpg" alt="JuneHh" title="Labour">
As to home building activity, this contracted by 5.0% in 2017, consistent with the decline in dwelling approvals from the historic highs of 2016, largely centred on high rise projects. This downturn has further to run with the contraction accelerating into 2019 after a near-term consolidation early in 2018. Large increases in new supply and a marked slowdown in sales to foreigners are weighing on the outlook for residential building.
In summary, key positives around pubic demand, business construction investment and exports will provide a solid base for overall economic activity However, with weaknesses in consumer spending and housing we expect GDP growth to moderate to 2.7% in the year to December 2018 and then slip to a below trend 2.5% for December 2019.
Andrew Hanlan is senior economist for Westpac and can be contacted <a href="https://www.propertyobserver.com.au/https://au.linkedin.com/pub/andrew-hanlan/3/222/430" target="_blank">here</a>.
 
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Central banks in focus this week: Westpac video update

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EXPERT OBSERVATION
The Australian economy as measured by GDP grew by 1.0% in the March quarter of 2018, which was above consensus estimates for a 0.9% lift and indicates that the economy started the year off strongly. Annual growth rose to 3.1% (from 2.4% - see chart below) which is running above estimates for Australia’s growth potential (which is around 2¾%). But, the strength in GDP growth over first quarter is unlikely to be repeated again in the June quarter. Australian GDP has had a tendency to run hot and cold lately. Looking back at history, the last three strong GDP prints (around 0.9% or 1.0%) have been followed by a weaker outcome in the following quarter which is often caused by “one-off” impacts like strong net exports or an inventory build that are then unwound in the following period.
But, the Australian economy is still expected to hold up over the near-term and there is little risk of a recession. The GDP data also shows a slow trend up in productivity growth, which is positive for living standards. Compared to our global peers, Australia’s headline growth profile also looks favourable (US at around 2.5% currently, Eurozone around 2% and Japan near 2%) although much of this growth “outperformance” can be explained by higher population growth in Australia.
Click here <a href="https://www.propertyobserver.com.au/images/2018/6/6/GDP-Growth.jpg" target="_blank">to enlarge. </a>
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2018/6/6/GDP-Growth.jpg" alt=""> 
The main points from the March quarter GDP data are: 
<ul type="disc">
<li class="x_MsoNormal">
Continued weakness in consumer spending. Consumer spending rose by 0.3% in the quarter (contributing 0.2 percentage points to growth with retail volumes flat over the quarter).The weakness in consumers is well known – real wages growth is running flat, the savings ratio is now very low at just 2.1% and debt levels are very high. It is difficult to see households gaining confidence to run down their savings rate further in the current environment of low wages growth, slowing wealth accumulation (as home price growth weakens) and high debt levels. Proposed income tax cuts from the government are not large enough to change this outlook. Its worth noting that while the National Accounts reports “compensation of employees” as being up a strong 5.1% over the last year, this mainly reflects the strong employment growth of the last year as “average compensation per employee” is up just 1.6% over the last year consistent with other measures of low wages growth. </li>
</ul>
<ul type="disc">
<li class="x_MsoNormal">
Residential construction contributed 0.1 percentage points to growth. Housing construction has passed its peak but building approvals continue to run at elevated levels compared to recent years so housing investment is still making small contributions to growth. Housing investment will slow over the next year or two though, but large detractions from growth are unlikely.</li>
</ul>
<ul type="disc">
<li class="x_MsoNormal">
Underlying business investment (which takes into account asset transfers between the private and public sector) made no contribution to growth, with non-residential building down, engineering construction up marginally and machinery &amp; equipment spending up. Business investment is slowly lifting in Australia, as the mining investment decline has nearly finished and non-mining investment is improving. There is still more downside for mining investment, but a lift in non-mining expenditure is providing an offset. However, the lift in non-mining investment has been slow and very gradual and capital spending intensions data released last week suggests that this is likely to remain the case. Non-mining investment is still well below its historical average as a share of the economy, so there is still plenty of capacity to lift non-mining investment growth. 
</li>
</ul>
<ul type="disc">
<li class="x_MsoNormal">
Underlying government spending (which takes into account asset transfers between the private and public sector) was up strongly again and contributed 0.3 percentage points to growth. Public infrastructure spending remains very high, with both the Federal &amp; State governments allocating more funds towards infrastructure over recent periods which will continue contributing to GDP growth.</li>
</ul>
<ul type="disc">
<li class="x_MsoNormal">
Inventories contributed 0.2 percentage points in the March quarter and this is unlikely to be sustained in the June quarter. 
</li>
</ul>
<ul type="disc">
<li class="x_MsoNormal">
Net exports contributed 0.3 percentage points to growth with strong export growth. The outlook for export growth is still positive, thanks to resource exports and global demand for Australian resources and as service exports like tourism and education continue to grow. But the contribution to growth is likely to slow going forward and it can be volatile from quarter to quarter.</li>
</ul>
<ul type="disc">
<li class="x_MsoNormal">
Inflation pressures and wages remain subdued with the household consumption deflator (an alternative measure of inflation) up by 1.6% year on year which is below the rate of inflation as measured by the CPI and average compensation per employee is up by just 1.6% over the past year – below the 2.0% wages growth recorded in the wage price index (this is due to jobs growth being faster for low paid jobs than for high paid jobs).</li>
</ul>
Implications
While the March quarter GDP data shows that the Australian economy started the year strongly, we still expect Australian growth in 2018 to be a little below the RBA’s forecast of “a bit above 3%” because of a constrained consumer and a slowing housing market. And while non-mining business investment is rising, public infrastructure spending is surging and the labour market is strong, there are few signs of noticeable cost pressures as the economy is still running below its capacity as indicated by high levels of labour market underutilisation.
Growth needs to be stronger on a sustained basis to work through this spare capacity and lift wages and inflation. We remain of the view that the constrained inflation backdrop will keep the Reserve Bank on hold until early 2020 at least, when we see the central bank starting to lift interest rates. But, given the weakness in home prices and the negative wealth effect that will flow from that its premature to rule out the next move in official rates being a cut.
<a href="https://www.propertyobserver.com.au/https://plus.google.com/110172465327488162875?rel=author">SHANE OLIVER</a> is head of investment strategy and economics and chief economist at <a href="https://www.ampcapital.com.au/home">AMP Capital</a> and is responsible for AMP Capital's diversified investment funds.
 
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March quarter GDP solid but consumers still weak, few signs of inflation & wages pressure

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The following charts describes what the Reserve Bank of Australia knows about Australia's economy especially GDP growth and inflation:
<a href="https://www.propertyobserver.com.au/images/2017/01/06/RBA%20CHART-1.jpg" target="_blank">Click to enlarge</a>
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/01/06/RBA%20CHART-1.jpg" alt="">
<a href="https://www.propertyobserver.com.au/images/2017/01/06/RBA%20CHART-2.jpg" target="_blank">Click to enlarge</a>
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/01/06/RBA%20CHART-2.jpg" alt="">
<a href="https://www.propertyobserver.com.au/images/2017/01/06/RBA%20CHART-3.jpg" target="_blank">Click to enlarge</a>
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/01/06/RBA%20CHART-3.jpg" alt="">
<a href="https://www.propertyobserver.com.au/images/2017/01/06/RBA%20CHART-4.jpg" target="_blank">Click to enlarge</a>
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/01/06/RBA%20CHART-4.jpg" alt="">
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