Fresh off completing Pienza Neutral Bay, developer <a href="https://www.apartments.com.au/developers/central-element">Central Element</a> is preparing its next move in the coveted Lower North Shore suburb.&nbsp;

Central Element (CE) has lodged plans for an eight-storey apartment building at <a href="https://www.apartments.com.au/new-apartments/54-64-barry-street-neutral-bay-nsw-2089">54–64 Barry Street</a>, a 1,659 sqm site just south of Military Road and the Neutral Bay town centre.

The $52 million development will involve the demolition of four detached homes across four lots to deliver 45 apartments, including eight affordable housing units to be managed by Bridge Housing. The mix will comprise six one-bedroom apartments, 24 two-beds, and 15 three-beds. The apartments will sit above three basement levels with 62 car parking spaces and 50 bicycle spaces.

<a href="https://www.apartments.com.au/architects/mhn-design-union">MHN Design Union</a> (MHNDU) has returned as architect following its work on Pienza, again shaping a mid-rise form with a clear street presence. The design features a lower four-storey podium element that responds to surrounding context, with upper levels recessed to reduce perceived bulk. Communal open space is proposed both at ground level and on the rooftop, the latter including an outdoor kitchen and swimming pool.

“The building has been designed with a lower four-storey element and with building materials commensurate with the character of the area,” Beam Planning noted in its submission to the North Sydney Council.

<img alt="Barry Street, Neutral Bay Nsw 2089" data-entity-type="file" data-entity-uuid="3a28ab3a-b8ba-4476-81cd-e4a8bb84f3a7" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Barry-Street-Neutral-Bay-1327x742.png?VersionId=hlgvxszAWXIHgHtdR5HiwIKiSli2lLZV" />

Bridge Housing will manage the affordable units for a period of 15 years, as required under the Housing SEPP’s incentive provisions.

MHNDU’s design report further highlights the site's strategic location just 250 metres from key bus stops and 1.3 kilometres from North Sydney CBD, positioning it for transit-accessible housing supply. In their planning justification, the design team emphasised the site’s compatibility with emerging local character and scale.

Central Element has a solid apartment pipeline spread all over Sydney. They recently completed&nbsp;Pienza, 37 apartments just 500 metres away from the new project, and are currently building Ethos Chatswood, Ballamac House in Coogee, and Bianca on the harbour in Drummoyne.

They have plans for future projects in Mosman, Bondi Beach, Greenwich, Lavender Bay, along with a tower on the edge of Hyde Park.

Joel Robinson

First look: Central Element unveils second Neutral Bay apartment project

Real estate investment fund Wentworth Wentworth Equities is soon to launch a "Los Angeles-inspired" residential, leisure and lifestyle precinct in Brisbane’s Hamilton riverside ahead of the predicted Olympic-led population explosion for the city.

Drawing its style inspiration and name from Los Angeles’ renowned The Grove, <a href="https://www.apartments.com.au/new-apartments/hamilton-grove-19-hercules-street-hamilton-qld-4007">Hamilton Grove</a> will feature three residential towers and a vibrant street-level public precinct with curated luxury lifestyle, retail and dining offerings.

The first of the three towers, to launch in March 2026, will comprise 61 apartments, in the same building as a premium hotel.<img alt="Hamilton Grove" data-entity-type="file" data-entity-uuid="d227fe61-8392-45b7-b386-9133f29a249f" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-01-19%20at%209.10.56%E2%80%AFAM.png?VersionId=HTCV35HZ4h84jQCmHwhsdIPN0ctO5d7Z" />

Wentworth Equities Executive Chairman Sameh Ibrahim said the precinct will be unique in its appeal to both residents and the wider community.

“Hamilton is already one of Brisbane’s most sought-after riverside suburbs and for good reason,” Ibrahim said.

“Where else in the world can you walk out of your front door and have everything you could possibly need at your fingertips? The city is just around the corner, the airport is only ten minutes away, you have the river and green spaces right there and premium retail and dining on your doorstep."

Wentworth Equities acquired the 7637 sqm Hercules St site in 2014, when Ibrahim said he had a "very clear vision" for the precinct, but ultimately it wasn't the right time to develop. He said Hamilton was still very much an "emerging precinct."

“Since then, Hamilton and surrounding suburbs like Ascot and Albion have significantly grown and matured into a precinct that aligns with our vision for Hamilton Grove. Brisbane as a whole has so much to offer in the way of lifestyle appeal, but as it stands it is so widespread – you go to Howard Smith Wharves for fine dining, you go to James Street for shopping, you go to West End to walk along the river – but what if you could go to Hamilton Grove for everything?

“Our vision is a precinct that brings together the best of Brisbane into one central space abundant with culture, class and culinary experience – a place that a lucky few will get to call home, but the rest of Brisbane still get to explore and experience at their leisure.”

<img alt="Hamilton Grove" data-entity-type="file" data-entity-uuid="46550990-8aeb-44d4-bb47-150cdca96529" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-01-19%20at%209.10.50%E2%80%AFAM.png?VersionId=bmCkApPKY_Bj3z02Q8vI7Kyo_caJXOnv" />

Experienced civil engineering contractor Mainland Civil has been appointed to commence early works for the project, adding Hamilton Grove to their extensive portfolio where it will join other iconic Brisbane developments including Queens Wharf, 300 George Street, Infinity Tower and 1 William Street.

Construction on Tower One is scheduled to commence in early 2026 with completion expected in late 2028.

Fast Facts 
 
• Three residential towers and a vibrant street-level public precinct with curated luxury lifestyle, retail and dining offerings. 
• Construction on Tower One is expected to commence in Quarter One 2026, with completion expected in late 2028. 
• 7,637 square metre site at 19 Hercules St, Hamilton (part of Economic Development Queensland’s 304 hectare Northshore Hamilton Priority Development Area). 
• 61 waterfront residences and skyhomes in the first tower, ranging from two to five bedrooms. 
• Hamiton Grove will be officially launched in March 2026.

"LA-inspired" Hamilton Grove to launch on Brisbane riverside

There’s a quiet patch of <a href="https://www.apartments.com.au/developments/hawthorn-vic-3122">Hawthorn</a>, between the bustle of Glenferrie Road and the curve of the Yarra, that rarely sees change, and even more rarely, new apartments. But that’s exactly where <a href="https://www.apartments.com.au/developers/pomeroy-pacific-quattro-corp">PQD</a> is planting Kooyongkoot: a deliberate, 18-residence answer to the question of what downsizers actually want.

“This is something this pocket of Hawthorn has never seen before,” says Fil Gacesa, head of sales at PQD. “<a href="https://www.apartments.com.au/new-apartments/kooyongkoot-hawthorn-1-kooyongkoot-road-hawthorn-vic-3122">Kooyongkoot</a> will deliver just 18 large-scale apartments in the heart of Hawthorn. It is the true definition of resort-style living.”

<iframe allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" allowfullscreen="" frameborder="0" height="315" referrerpolicy="strict-origin-when-cross-origin" src="https://www.youtube.com/embed/59D7VxzltmM?si=1iCzRD7FRneKryfv" title="YouTube video player" width="560"></iframe>

That scale is central to the story. It’s what allows for two dedicated lift cores, short corridors, and a generous lightcourt that draws natural ventilation and sunlight into every residence. It’s also what makes room for the sort of amenity usually confined to high-density towers: a fully equipped wellness centre with infrared and traditional saunas, yoga and pilates studio, cold therapy shower, and treatment room. There’s a golf simulator, car and dog wash stations, and extensive storage too, not bolted on, but baked in from the start.

But more than the checklist, it’s the design intent that carries weight. “This project has been many years in the making,” says Mark Pomeroy, Director of PQD. “Not just in planning, but in listening, to what our buyers and the local community are looking for”.

[smartcode_project:default project_id=102717 project_image_fid=355289]

That listening shows up in the materials, oak floors, natural stone, V-ZUG appliances, and in how space is handled. Penthouses feature private rooftop terraces with pools. Terraces and garden residences embrace outdoor connection. Inside, the layouts skew large and open, geared for hosting, not just housing.

Architecturally, <a href="https://www.apartments.com.au/architects/cera-stribley-architects">Cera Stribley</a>’s approach is grounded. There’s no reaching for spectacle here. Instead, the building offers a sculptural calm, anchored by landscaping from Eckersley Garden Architecture.&nbsp;

“We wanted to create spaces that feel expansive, serene, and meaningfully connected to daily life,” said founding partner Chris Stribley elsewhere.

[smartcode_project:default project_id=102717 project_image_fid=355304]

That sentiment, calm, connection, echoes in the location itself. Kooyongkoot sits just a short stroll from Central Gardens, Fairview Park, and the Rivoli Cinema. Tram lines and schools are close, but the street is tucked, quiet, and leaf-lined.&nbsp;

“Residents of Kooyongkoot will be a short stroll from Fairview Park, Central Gardens, and the Glenferrie Road retail strip," Gacesa notes, "but you're also cocooned in this peaceful pocket behind extensive landscaping by Eckersley Garden Architecture.”

Kooyongkoot is set for completion in late 2026.

[smartcode_project_cta:default project_id=102717]

Staff Writer

The project that said no to compromise: Inside Kooyongkoot, Hawthorn

When long-time Ivanhoe locals Graeme and Catherine, decided it was time to downsize, they weren’t necessarily in a rush.&nbsp;

Like many in their stage of life, they had started thinking about apartment living, but anticipated making the shift in two to three years.

That timeline changed when they visited <a href="https://www.urban.com.au/new-apartments/candela-ivanhoe-40-upper-heidelberg-road-ivanhoe">Candela</a>, a new boutique development by <a href="https://www.urban.com.au/developers/salter-brothers">Salter Brothers</a>. The project ticked all the boxes they were looking for: location, quality design, and long-term lifestyle benefits, which prompted them to bring their decision forward.

“It was the right place at the right time,” they said. “We knew immediately it ticked all the boxes, and we didn’t want to wait.”

[smartcode_project:default project_id=342 project_image_fid=358855]

Their decision to downsize was driven by a combination of practical needs and lifestyle considerations. Their existing home, while much loved, had become increasingly difficult to maintain. It spanned multiple levels, included extensive front and back gardens, and was starting to show the wear that comes with age.&nbsp;

They were looking for a more manageable lifestyle, one with less upkeep and more freedom. A brand-new apartment with no maintenance requirements and the ability to simply “lock up and leave” gave them peace of mind and a greater sense of control over their future.

Financially, the purchase made sense as well. The available stamp duty savings, strong price-to-value offering, and timing of the settlement suited their plans, making the transition smoother and more cost-effective. The apartment's design and inclusions further supported their choice.

[smartcode_project:default project_id=342 project_image_fid=357493]

The layout was both functional and flexible: three bedrooms, a butler’s pantry, a separate laundry, and a large open-plan living area. It gave them the freedom to host a family, accommodate guests, or set up a home office. The expansive balcony and elevated views added to the appeal, providing a sense of openness and connection to the outdoors.

“It just had a really good flow,” Catherine noted, something they found lacking in many other apartments they’d considered, particularly in the established market.

Candela’s boutique scale was another deciding factor. With a smaller number of residences and a top-floor penthouse position, the couple felt the development offered the privacy and space they were looking for, without feeling isolated.

“We liked that it wasn’t a huge development. It felt well-balanced, modern but still with a sense of community, not overwhelming,” they said.

[smartcode_project:default project_id=342 project_image_fid=357508]

Equally important was the ability to remain in Ivanhoe, a suburb they know well and have deep roots in. After 46 years in the area, proximity to local parks, shops, and familiar faces mattered just as much as the apartment itself.

“We didn’t want to give up the community we’ve known for decades. Candela allowed us to upgrade our lifestyle while staying in the place we call home.”

With a Walk Score of 90, the village location supports a convenient, connected lifestyle. <a href="https://www.apartments.com.au/developments/ivanhoe-vic-3079">Ivanhoe</a> Station is just a eight-minute walk away, and the neighbourhood offers access to parks, cafes, restaurants, and schools along Upper Heidelberg Road, all within easy reach.

Beyond the apartment, the couple also saw value in the broader vision for Candela, one that integrates residential living with public spaces and local amenities.&nbsp;

The development introduces 58 new apartments as well as a mix of commercial and social spaces that integrate contemporary architecture with the suburb’s existing character.&nbsp;

At ground level, residents will find a charming café and a lifestyle wellness centre, perfect for unwinding and rejuvenating. Meanwhile, the rooftop garden offers a stunning vantage point for residents to enjoy breathtaking sunsets, host gatherings, or enjoy barbecues with family and friends. It's not just a place to live; it's a vibrant community where every moment is an opportunity to connect and create lasting memories.

[smartcode_project_cta:default project_id=342]

Why Ivanhoe locals are choosing to downsize to Candela

Mark and Roy Makari are expanding their presence in Sydney’s South West with a second major proposal for Leppington, this time envisioning a 900-dwelling mixed-use development just 850 metres from their previously lodged tower trio on Fifth Avenue.

Project management and construction management firm Creative Vision filed the plans for the&nbsp;multi-building project at <a href="https://www.apartments.com.au/new-apartments/230-rickard-road-leppington-nsw-2179">230 Rickard Road, Leppington</a>. The proposal seeks to establish a new focal point for the precinct through a high-density, transit-oriented development supported by diverse land uses.

According to the Scoping Report prepared for the Department of Planning, the scheme includes around 900 apartments across multiple towers, including 135 dwellings designated for affordable housing. A mix of market and subsidised apartments will be supported by ground-level activation through retail and office space, a childcare centre, and a hotel, forming a comprehensive urban precinct.

<img alt="Mixed Use Development 230 Rickard Rd Leppington" data-entity-type="file" data-entity-uuid="34797362-f3dc-4d84-8235-2657fc5f3bde" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Plan.png?VersionId=Uzckrz9tUpDQl5lX1_WMhjnv16bsr8wG" />

The Design Report by <a href="https://www.apartments.com.au/architects/studiosc-0">Studio SC</a> notes that the project “intends to deliver a high-quality, high-density built form that supports the vision for the Leppington Town Centre, integrating mixed-use outcomes and public domain upgrades.” The development is expected to be delivered in stages, although a precise timeline is yet to be confirmed.

The project will be assessed through a future State Significant Development Application, with the Scoping Report indicating the team will seek design excellence via a competitive process or through an expert design review panel. Early massing diagrams suggest a series of mid- to high-rise buildings framing a central landscaped spine, with emphasis on pedestrian permeability and public space.

The planning documentation flags a strong sustainability agenda, stating that the development will “respond to the urban heat island effect, incorporate water sensitive urban design, and prioritise active transport”.

<img alt="Mixed Use Development 230 Rickard Rd Leppington" data-entity-type="file" data-entity-uuid="369d7b54-1279-4cde-88ec-dcb215594414" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Podium_1.png?VersionId=QArL7B2kkLt63vl5xvL0FNV_ardAlez4" />

The proposal follows in the footsteps of the Makaris’ nearby Fifth Avenue site, where they’ve submitted plans for three towers comprising nearly 500 apartments, with 10 per cent dedicated to affordable housing. That project features commercial podiums, a childcare centre, and a new public park that would occupy more than a third of the site.

Both developments are situated within walking distance of Leppington Train Station and fall under strategic precinct plans promoting higher density housing. The town centre is undergoing substantial transformation, driven by state government planning reforms aimed at fast-tracking housing delivery.

Together, the two projects represent a combined ambition of nearly 1,400 new homes across just under two kilometres of central Leppington.

First look: 900-home mixed-use precinct planned for Leppington

Global Market

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EXPERT OBSERVER
There is lots of talk about when the next major economic downturn will be. This interest seems to have been particularly noticeable over the last week or so given the ten-year anniversary of the failure of Lehman Brothers which helped usher in the worst phase of the Global Financial Crisis (GFC), which naturally prompted the question of when the next one will be.
But it’s also been given impetus as the current US bull market and economic expansion are approaching record territory in terms of duration and given the threats from a US driven trade war. The historical experience indicates that share market downturns are much deeper and longer when there is a recession, particularly in the US economy.
So, whether a recession is imminent or not in the US, and more broadly globally, is critically important in terms of whether a major bear market is on the way. Of course, no one really knows for sure (despite many claiming they do!). But certain indicators help provide some guidance as to the risks. This note looks at five charts to monitor in terms of the state of the global economy.
Chart #1 – Global business conditions PMI Global Purchasing Managers Indexes (PMIs), which are surveys of purchasing managers at businesses in most major countries, provide an excellent and timely guide to the state of the global economy. As can be seen in the next chart, while they are down from their peaks of earlier this year they remain very strong indicating that global growth remains strong. This is particularly the case in the US. Quite clearly a sharp downturn, as occurred going into the GFC, would be a concern for global growth but so far so good.
<img src="https://www.urban.com.au/images/2018/9/20/AMP%201.JPG" alt="">
Chart 2 – Global inflation Most major economic downturns are preceded by a rise in inflation to above central bank targets resulting in aggressive monetary tightening. The period prior to the GFC was something of an exception in terms of core inflation, ie inflation excluding food and energy. But average headline inflation rose to around 4% across the US, the Eurozone and Japan at the time as energy prices surged and the run up to the GFC was associated with tight monetary policy in the US and Europe (where the focus at the time was on headline inflation). Source: Bloomberg, AMP Capital At present, core inflation in major global economies is benign. In the US core inflation is around 2%, which is the Fed’s target and headline inflation is falling. Inflation in China is also around 2%, which is below the Government’s 3% target/forecast. And inflation in the Eurozone and Japan, whether headline or core, is below both the European Central Bank’s and the Bank of Japan’s 2% targets. While a lack of spare capacity in the US means that the Fed will continue raising interest rates to more normal levels, with inflation around target (and other signs of
<img src="https://www.urban.com.au/images/2018/9/20/AMP%202.JPG" alt="">
Chart 3 – The US yield curve The yield curve is a good guide to the stance of monetary policy. When short-term interest rates are low relative to long-term rates businesses can borrow short and lend (or invest) long and this grows the economy. But it’s not so good when short rates are above long rates – or the curve is inverted. And an inverted US yield curve has preceded US recessions. So, when it’s heading in this direction some start to worry. As a result, it’s worth keeping an eye on and it’s our third chart. But there are several complications to allow for. First, there are several versions of the yield curve. The traditional yield curve based on the gap between 10-year bond yields and the Fed Funds rate has flattened but only to 1.2%. Moreover, a shorter yield curve based on the gap between 2-year bond yields and the Fed Funds rate predicted past recessions like the longer yield curve but has actually been steepening lately which is positive. So our chart includes both yield curves. Both are yet to go negative as occurred prior to the last three US recessions. Source: NBER, Bloomberg, AMP Capital But there are several other things to allow for. The yield curve can give false signals (circled on the chart) and the lags from an inverted curve to a recession can be around 15 months. Various factors may be flattening the traditional yield curve unrelated to economic growth expectations including low German and Japanese bond yields holding down US yields and higher levels of investor demand for bonds post the GFC as they have proven to be a good diversifier to shares in times of crisis. On top of all this, a flattening yield curve caused by rising short term rates and falling long term-rates is more negative than a flattening when both short and long-term rates go up like recently. So all up the yield curve is worth keeping an eye on but both its long term and short term versions really need to go negative before getting too concerned. So far so good. Of course, it’s worth keeping an eye on other measures of US monetary tightness as well – for example past US recessions have been preceded by the Fed Funds rates being well above inflation and nominal economic growth whereas it’s still a long way from either now.
<img src="https://www.urban.com.au/images/2018/9/20/AMP%203.JPG" alt="">
Chart 4 – The US dollar Moves in most currencies are usually only really of relevance for the country that the currency belongs to. The US dollar is a clear exception to this mainly because debt is often denominated in US dollars. In particular, emerging countries tend to have a lot of US dollar denominated debt so when the $US falls in value versus their own currency, servicing that debt gets cheaper but when the $US goes up in value, servicing that debt gets more expensive. This has been the case lately with the rising US dollar against most currencies including emerging market currencies as shown in our fourth chart, adding to problems in various emerging countries. Further strong gains in the US dollar as the Fed continues to hike risks worsening emerging market problems and the risks that this poses to global growth (as the emerging world is around 60% of global GDP). By contrast if the US dollar moderates, the pressure on emerging countries is likely to recede.
<img src="https://www.urban.com.au/images/2018/9/20/AMP%204.JPG" alt="">
Chart 5 – World trade growth In recent times there has been much debate as to whether the era of globalisation is coming to an end resulting in a peak in world trade. This could be for somewhat benign reasons as services become an ever-greater share of economic activity and manufacturing becomes less labour dependent. But it could also be due to rising protectionism with US policies under Trump a big threat. It’s early days so far with only about 12% of US imports being subject to increased tariffs for an average tariff increase across all US imports of just 1.6% (after the latest tranche is implemented). This is a long way from 1930 that saw all US imports subject to a 20% tariff hike and other countries do the same. While we still see a negotiated solution, it may not come till after the US mid-term elections. Global trade growth has picked up over the last two years but its recently started to slow a bit. It’s too early for this year’s trade conflict to show up in trade data but it’s worth watching this chart as slower global trade growth would pose a threat to global economic growth. Source: CPB World Trade Volume Index, AMP Capital Concluding comments On balance these indicators suggest the outlook remains okay. Perhaps the greatest near-term risks are around the US dollar and Trump’s trade war. Beyond this, cyclical indications are still okay. And while we haven’t had room to fit it in here the signs of cyclical excess that normally precede major economic downturns – eg, very strong wages growth and a high level of cyclical spending (consumer durables, housing and investment) as a share of GDP – aren’t particularly evident in the US and are a long way from being evident in other major countries.
<img src="https://www.urban.com.au/images/2018/9/20/AMP%205.JPG" alt="">Dr Shane Oliver is the Head of Investment Strategy and Chief Economist at AMP Capital
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soliver-smf6LQXgW9

Five charts to keep an eye on regarding the global economy: Shane Oliver

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The number of people with US$500 million or more in net assets in Asia is going to overtake North America in the next five years, according to new research.
Knight Frank’s The Wealth Report analyses the population of the super wealthy, which is terms ‘demi-billionaires’.  
According to wealth data specialists Wealth-X, the amount of demi-billionaires based in Asia is set to rise to nearly 3000 in the next five years pushed by strong economic growth and rising asset prices.
However, in terms of country, the US will still dominate this segment of the population with its current tally of 1,830 set to rise to nearly 2500 in the next five years.
<a href="https://www.propertyobserver.com.au/images/2018/9/7/wealth-spotlight.jpg" target="_blank">Click here 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/2018/9/7/wealth-spotlight.jpg" alt="">
Australiasian demi-billionaires are also set to increase 29% from 70 to 90 by 2022, says Knight Frank’s Head of Residential Research, Australia Michelle Ciesielski.
“The methodology for projecting this increase looks at GDP growth, the performance of equity markets and other investments, as well as wealth distribution trends. Currency also plays a significant role.
“The continued increase in wealth in Australasia is being encouraged by stronger local economic conditions and performance of property investments over the past several years. In addition, international drivers including equity and bond performance has spurred on confidence.”
Wealthy investors are driving the demand for prime property, with Australia a top target, says Knight Frank’s Head of Residential, Australia Sarah Harding.
“We need to look on this global platform to truly appreciate the level of sophistication expected by the world’s wealthiest, including where they spend and invest; where they enjoy their downtime; and where they educate their children – now, and in the future.
“For the first time, Australia is delivering super-prime projects like One Barangaroo in Sydney and The Muse in Melbourne to the market – on par with world-class developments in established global cities such as London and New York.”
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jonathanchancellor-7SQnKwU6yx

Australasian demi-billionaires to increase by 29% over next five years

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EXPERT OBSERVER
However the minutes of the Monetary Policy Meeting of the Reserve Bank Board contain increased confidence for the consumer outlook.
The themes we have seen in previous minutes around a continuing global economic expansion tempered by some policy induced slowdown in the Chinese economy remain. As before, the issue around international trade is highlighted as a source of uncertainty for the global outlook. The forecasts for the Australian economy which were set out in the recent August Statement on Monetary Policy are described as largely unchanged.
Of most interest in the commentary around the economy relates to a more confident assessment of the risks around the consumer. “Recent data on wages growth and expectations of a further tightening in labour market conditions had provided more comfort that household income growth would continue to increase gradually and support the outlook for consumption”. In previous minutes, the outlook for household spending was described as a source of uncertainty. In these minutes, the Board points out that “the more recent increase in minimum wages, the announcement of future tax cuts, and expectations of a further tightening in labour market conditions had reduced some of the uncertainty around the outlook for consumption.”
Commentary around the housing market is unchanged with Sydney and Melbourne house prices having “declined further in July and across a broad range of properties”. No real outlook is provided, although the Board continues to point out that “some further tightening of lending standards by banks was possible”.
The investment outlook remained positive, although non-mining business investment was expected to grow at a more moderate pace than over the previous year. The pipeline for building construction work was still reasonable supporting the growth outlook in the near-term but, by implication, slowing further out.
The minutes confirm the forecasts in the August SoMP which anticipate both headline and underlying inflation failing below 2 per cent to 1 ¾ per cent in 2018. This downward revision to the previous 2 ¼ per cent and 2 per cent respectively is attributed to some one-offs on childcare, TAFE and car registration fees and utilities prices. Appropriately, Board Members note that there is a risk that the recent decline in wholesale electricity prices could have more persistent effects. Certainly Westpac is of that view.
Finally, as expected, the minutes emphasise that reducing the unemployment rate and returning inflation towards to the mid-point of the target remain the necessary conditions to support higher rates. It is reiterated that the next move in the cash rate would more likely be an increase rather than  a decrease.
Conclusion
Today Westpac released an update to its forecasts, extending them out to the end of 2020. We anticipate the cash rate remaining on hold through 2018, 2019 and 2020. Factors which we consider important in this profile are: a steady weakening in the housing market through 2018 and 2019, low inflation, benign wages growth, and clear signs of a slowdown in the world economy.
The Minutes mention most of these factors but appear to be overly hopeful that economic activity and income growth will be sufficient to justify a rate hike at some point.
Bill Evans is the Chief Economist for Westpac
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bevans-rYk9SxEa4r

Overly hopeful RBA board minutes contain few surprises: Bill Evans

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EXPERT OBSERVER
For the 12 months to 30 June, equity markets posted solid gains both in Australia and offshore, up 13.7% and 15.4% respectively.
Returns were also positive across other asset classes such as direct property and infrastructure, and bond returns, although modest, were much stronger than the previous year.
Overall, global growth conditions helped to drive earnings and although the US Fed continued to raise rates over the past 12 months, monetary policy conditions both in the US and globally remained accommodative.
In this article, we look at what’s been driving these returns and consider the outlook for returns over the medium term.
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2017/18 was characterised as a year of two halves where volatility featured heavily over the second half.
Equity markets were particularly weak at the start of 2018 due to concern that inflation was emerging in the US and that growth had reached a cyclical peak.
These fears quickly settled, and the markets were able to recover but volatility resumed on the back of rising geopolitical tension, specifically the threat of a global trade war between the US and China.
<img src="https://www.urban.com.au/images/2018/7/18/AMP%20cap%20p1.JPG" alt="">
Looking forward, we are mindful that the market may be underestimating inflation and the threat of additional interest rate increases in the US.
We are coming to the end of a long expansion period and there is uncertainty as to how far interest rates can rise before they become negative for equities and how central banks will respond once inflation shows signs of life.
These factors alongside ongoing geopolitical uncertainty suggest that trading conditions could be less supportive over the year ahead and returns in this environment are likely to moderate.
Volatility will continue to feature over the medium-term and while often viewed in a negative context, it can create trading opportunities for our super portfolios that have a longer-term investment horizon.
That said, we are mindful of building portfolios that can better withstand downside volatility. Not only does investing across a broad combination of assets achieve this but actively managing within and across asset classes can also deliver a better risk and return outcome.
Deborah Alliston is the head of Multi-Asset Portfolio Management for AMP Capital in Sydney, Australia.
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j.ballantyne1990-6AQqhLzZaK

How did property stack up as an investment option this past financial year: Deborah Alliston

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The future is looking "very bright" for global construction markets with synchronised activity upswing in Australia, the USA, Europe, Japan and China, according to a new survey.
Turner &amp; Townsend’s International Construction Market Survey 2018 shows that of the 46 global markets examined, 21 expect to warm up, 23 are set for stability, and only two are likely to cool.
Sydney and Melbourne are considered hot, Brisbane is lukewarm and Perth is cold. 
Global construction costs are expected to rise 4.3% in 2018, following a 4.1% increase in 2017.
New York repeated its ranking taking the number one spot for the most expensive place to undertake construction activities.
San Francisco, Hong Kong, Zurich and London subsequently followed. Sydney was again positioned at number nine, with Melbourne ranked at 19, Brisbane placed at 21 and Perth at 23.
Sydney construction costs are expected to increase by 4% in 2018, the same as 2017.
Melbourne will rise by 2% to 4%, Perth is expected to increase by 1.5%, and Brisbane to ease by 1% to 3% overall for 2018.
Global construction costs are set to rise 4.3% in 2018, following a 4.1% increase in 2017.
The survey analyses input costs, such as labour and materials, and charts the average construction cost per square metre for residential, commercial, industrial, retail, hotels, hospitals, schools, car parks and airports (buildings only).
 <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/2018/5/23/Crane%20and%20building%20construction%20site%20against%20blue%20sky_Med%20Res.jpg" alt="">
Gary Emmett, economist for Turner &amp; Townsend, says 2018 was set to be the strongest construction year that we have witnessed since the Global Financial Crisis (GFC), which is boosting optimism.
"The GFC cast a black cloud over the industry for many years, however that has now lifted," Emmett said.
"Since the GFC, growth amongst the major advanced economies averaged half the pace of the previous 10 years.
“Synchronised global growth looks set to increase the construction industry activity, driven by Australia, the USA, Europe, Japan and China."
The Middle East and UK are notable exceptions to experiencing an upswing. 
He added that Federal and state governments in Australia are planning to invest over $50 billon in significant infrastructure projects over the next decade, including Western Sydney Airport. Major road and rail projects are ramping up, boosting the local economies and demand for trade skills.
"Tunneling is a focus. Sydney Metro Rail is delivering 15 kilometres of tunnels, and Westconnex, a mostly underground 33 kilometre roadway, is underway. 
"Melbourne is starting the West Gate Tunnel project and Monash freeway upgrade, while Queensland is delivering Cross River Rail.”
The report noted Sydney and Melbourne are witnessing strong growth in financial services, and real estate, with 17% jobs growth during the year. Unemployment has fallen to 5.4%.
Sydney residential construction spend is up by 47% since the 2016 international report.
Over the same period construction costs are showing an average 11% increase, while non-residential construction (hotels, offices and retail) activity was up by 11%.
The Melbourne residential construction market grew by 17% during the same period, showing an average cost increase of 4%, while non-residential market activity rose by 17%.
Brisbane’s residential construction market increased by 12%, showing an average cost upswing of 9%. Non-residential market activity also grew by 12%.
Perth’s residential construction market fell by 31%. Construction costs were also down by 2% and non-residential construction activity fell by 8%.
<a href="https://www.propertyobserver.com.au/images/2018/5/23/CONSTRUCTION%201.jpg" target="_blank">Click here</a> to enlarge: 
<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/2018/5/23/CONSTRUCTION%201.jpg" alt="">
<a href="https://www.propertyobserver.com.au/images/2018/5/23/CONSTRUCTION%202.jpg" target="_blank">Click here</a> to enlarge:
 
<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/2018/5/23/CONSTRUCTION%202.jpg" alt="">
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Global construction activity the strongest since GFC, says new survey

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<img src="https://counter.theconversation.edu.au/content/68060/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1">
GUEST OBSERVER
It came as no surprise that the Reserve Bank left the cash rate at its historic low 1.5 percent on Tuesday. Governor Philip Lowe’s statement contained most of the boilerplate phrases: “the economy is growing at a moderate rate”. “Labour market indicators continue to be somewhat mixed.” “Measures of household and business sentiment remain above average.”
But it was the following paragraph that piqued my interest:
“Low interest rates have been supporting domestic demand and the lower exchange rate since 2013 has been helping the traded sector. Financial institutions are in a position to lend for worthwhile purposes. These factors are assisting the economy to make the necessary adjustments, though an appreciating exchange rate could complicate this.”
Not to go all deconstructionist, but it’s worth parsing those words carefully. “Low interest rates have been supporting domestic demand”: i.e. the usual effect of cheaper borrowing costs has worked. 
<a href="/images/2016/11/04/Screen%20Shot%202016-11-04%20at%209.14.33%20AM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/11/04/Screen%20Shot%202016-11-04%20at%209.14.33%20AM.png" alt="">
The “lower exchange rate has helped the traded sector”: i.e. a lower dollar makes our exports cheaper for foreigners to buy. 
“An appreciating exchange rate could complicate this” underlines the long-held concern the RBA has in the Aussie dollar rising above about 75 US cents. This could happen, for instance, if the US Federal Reserve fails to raise rates as aggressively as markets expect, or if there is a continued flight out of Europe to Australia’s relative safety and positive interest rates.
The fact that the RBA is so concerned about this highlights how interconnected Australian monetary policy is with international events and policy. And in a world as uncertain as the one we are in, it’s dangerous to make strong predictions about the future course of monetary policy.
The most interesting sentence of all in Dr Lowe’s statement is:
“Financial institutions are in a position to lend for worthwhile purposes.” 
This is a comment about the ability of Australian banks (essentially the big four) to take risk. That is, a comment about the strength of their balance sheets. Assuming it’s accurate, this is both comforting and important. If business and consumer confidence do pick up further, and businesses want to invest, then they should be able to borrow to do so, according to Dr Lowe.
Meanwhile, building approvals fell sharply in September, down 8.7 percent on a seasonally adjusted basis – well beyond market expectations. Housing approvals were up slightly, 2.3 percent, but apartment approvals fell 16.3 percent. That sounds bad, but the apartment sector is volatile, and there have been concerns about oversupply – especially in Brisbane and Melbourne. Still, overall approvals are down 6.4 percent on last year.
That’s no good for housing affordability, but it also has a monetary policy implication. If it fuels a continued escalation in housing prices – especially in Sydney and Melbourne, then the RBA may well feel constrained to cut interest rates in the event that they otherwise might want to.
There was mixed news about the Australian services sector – the largest and most economically important in the economy – with the Australian Industry Group’s Performance of Services Indicator up 1.6 points to 50.5. This is well below levels of around 56 before the financial crisis, and below the 54s recorded in mid 2015.
The ABS reported Thursday that the trade deficit fell 35% in September to A$1.227 billion, in seasonally adjusted terms. This was largely due to the recent increase in commodity prices – something over which Australia has no control, and which are devilishly difficult to forecast going forward.
Overseas, there was positive news from China where both the official Purchasing Managers’ Index (PMI) and the unofficial Caixin index came in at 51.2, ahead of expectations and indicating expansion (as numbers above 50 do). The official PMI is more relevant for large, state-owned enterprises, while the Caixin index is useful for understand medium-sized business. Often they don’t align, so this may be an early signal of a general positive trend. Stay tuned in coming months.
In fact, that will depend in no small part on whether Dr Lowe’s comment about banks in Australia having the balance-sheet capacity to lend is true in China. There are serious concerns about household indebtedness and the quality of bank balance sheets in China. A sustained increase in the PMI might be a hint that things are not quite so bad. September, however, is one datum point.
The Australian economy continues to show some positive signs, but there are pockets of weakness and cause for concern every month. And these aren’t concentrated to one sector, like the mining sector. In recent months there have been (and continue to be) legitimate concerns about: the labour market, business confidence, consumer confidence, inflation, growth, and more.
It looks like it will be some time before we see a consistent run of data indicating that we should have confidence in a genuine recovery.
Richard Holden is professor of economics and PLuS Alliance Fellow, UNSW Australia and author for The Conversation. He can be contacted <a href="https://theconversation.com/profiles/richard-holden-118107" target="_blank">here</a>.
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