Perth’s new apartment market recorded its strongest quarter of sales since Q4 2021, with 412 apartments sold in Q1 2026 and a record quarterly sold value of $537 million, according to Urbis’ latest Apartment Essentials results.

Urbis said the March quarter result reflects strong, highly product‑specific demand across both ends of the market, from more attainable projects delivering at scale, through to premium stock being absorbed by equity‑rich downsizers.&nbsp;

David Cresp, Partner at Urbis, said the key story in Perth is not demand, it is the market’s ability to convert demand into delivered housing.&nbsp;

“This is the strongest sales quarter since Q4 2021, and it reinforces that demand in Perth is real and it’s local,” David Cresp said. “But the task now is delivery, turning that demand into projects that can actually be built and completed.”&nbsp;

[smartcode_project:default project_id=110291 project_image_fid=302785]

<h2>Affordable product leads, premium demand remains resilient</h2>

Sales in Q1 were led by more affordable projects, with The Boulevard (SKS Group) recording 115 sales in the quarter, the presentation noting this is only the second time a single project has surpassed 100 quarterly sales. The project was able to offer more affordable housing product right next to a train station.&nbsp;

Palmyra West (Finbar) also delivered strong results with 28 sales in Q1, following 84 sales in Q4, with an average price of under $800,000, underscoring depth of demand for well‑located, attainable new stock.&nbsp;

At the premium end, Urbis said downsizer demand is continuing, with the results highlighting Romeo (Applecross, Finbar) recording 75 sales and reaching almost 50% sold in one quarter.

Jual (Shenton Park, Celsius Property) also posted a strong quarter with 28 sales, reaching 39% sold in one quarter.

Urbis noted that Perth apartment demand is not speculative, not investor‑led, and not uniform, describing it as localised, often equity‑driven and highly product‑specific, a pattern reflected in the polarisation between strong “attainable” performers and premium downsizer product.&nbsp;

[smartcode_project:default project_id=148957 project_image_fid=364102]

<h2>Prices underpinned by costs, and the delivery risk is growing</h2>

Urbis said pricing pressure is cost not demand‑driven: construction costs and delivery risk are now a central constraint, with the results noting build costs remain elevated and volatile, and that energy, fuel and labour uncertainty weigh on feasibility.

David Cresp said a growing challenge for private Build‑to‑Sell developers is simply securing a builder in the current environment.

“Developers are really feeling the pressure from a building market that was operating at capacity and securing a builder is challenging,” David Cresp said, adding that even where a builder can be secured, “trying to get to the price that makes the development financially viable is incredibly challenging in the current market.”&nbsp;

Urbis’ broader WA commentary also notes that industry remains at or above capacity with lot and housing creation, and that many builders are limiting new sales to manage stretched workforces and fixed‑price contract pressures, conditions that flow directly into apartment feasibility and delivery timing.

[smartcode_project:default project_id=108869 project_image_fid=317905]

<h2>Supply: improving later, but still constrained, and Perth lags eastern benchmarks</h2>

While near‑term supply remains constrained, Urbis’ forecast shows completions lifting “Supply is forecast to be back above 1,500 apartments per annum for the first time since 2019”, with 1,775 completions forecast for 2026, and volumes remaining above that level over the following years.&nbsp;

Looking further ahead, completions are forecast to reach 2,500 in 2028, with the report noting 32% of that total is social/affordable, reflecting the role of government‑supported delivery in rebuilding the pipeline.&nbsp;

However, Urbis said Perth remains behind comparable markets on pipeline scale. In a national comparison of projects under construction, the report shows under construction Perth Build‑to‑Sell (BTS) at 3,446 apartments versus the Gold Coast at 7,922. Mr Cresp said “The challenge for Perth is how to we grow the delivery pipeline”.

Urbis’ conclusion is that Perth’s market is increasingly defined by product discipline and delivery certainty, with the research identifying “delivery certainty is key” and calling out builder risk and procurement models as core success factors, alongside “timing and staging”.&nbsp;

Joel Robinson

Perth apartment sales hit strongest pace since late 2021 as builder capacity tightens

<a href="https://www.apartments.com.au/developers/sammut-developments">Sammut Group</a> has secured development approval for its latest Brisbane apartment project, marking the Sydney developer’s next step in expanding its Queensland pipeline following the success of its debut Gold Coast development, Coast.

The approved project at <a href="https://www.apartments.com.au/new-apartments/44-glen-road-toowong-qld-4066">44 Glen Road, </a><a href="https://www.apartments.com.au/developments/toowong-qld-4066">Toowong</a> will deliver a 15-storey riverfront apartment building with 42 residences, significantly increasing the scale of the site’s previous approval for a smaller luxury scheme. Designed by Bureau^proberts, the development will comprise a mix of predominantly four-bedroom and two-bedroom apartments positioned to maximise Brisbane River and city views.

Sammut Director Julian Sammut said the group had been actively searching Brisbane for several years before identifying Toowong as the right fit.

“Brisbane was the right step for Sammut,” Sammut said.

“With the success of Coast we thought we should definitely look to do more in Queensland alone. We then pushed up to look at Brisbane. We've been looking for I'd say two to three years actually and it was hard to find the right location.”

<img alt="Sammut makes Brisbane apartment play" data-entity-type="" data-entity-uuid="" src="https://res.cloudinary.com/dz9xllyip/image/fetch/f_auto,c_limit,w_1440,q_75/https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/field/image/Screenshot%202025-12-23%20at%203.27.14%E2%80%AFPM.png?VersionId=dYAVIL7qdcGA8ojvkslSrLjczXFejSSx" />

Sammut said suburbs including New Farm and Teneriffe were considered before the group ultimately focused on Toowong due to its strong downsizer demographic and limited supply of developable riverfront land.

The site was acquired off-market after what Sammut described as a lengthy negotiation and planning process, with the developer pursuing an uplift to the original approval.

“We are DA approved now which is very exciting,” Sammut said.

“We've had our change approval come through and we've obviously doubled the height, 15 storeys plus rooftop. We've got 42 amazing apartments that are going to be coming to market soon.”

<img alt="Sammut makes Brisbane apartment play" data-entity-type="" data-entity-uuid="" src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,dpr_2.0,q_auto:good/https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202025-12-23%20at%203.27.26%E2%80%AFPM.png?VersionId=ohkRkY0dIZlqdfME2EZePsCQavRiBadE" />

Bureau^proberts said the design responds to Toowong’s evolving urban character, balancing contemporary apartment living with the area’s established residential identity.

“A place where traditional Queensland living has taken place for centuries; Toowong is seeing a shift of contemporary influence, commercial and retail hubs mixed with well-considered residential offerings – all the while maintaining its character and charm,” the architect noted in planning documents submitted to Brisbane City Council.

The architecture practice said the project’s form was shaped by its riverfront setting, flood considerations, neighbouring building scales, and view corridors.

“They said the mix of four and two-bedroom apartments capture the ‘fundamental qualities of Queenslander living,’ translated into the context of a contemporary subtropical building.”

The development sits just off Coronation Drive within walking distance of Toowong’s retail precinct and the upgraded Regatta ferry terminal, while also benefiting from proximity to the incoming green bridge connection to West End. Sammut said the accessibility and amenity offering were central to the site’s appeal.

The approval adds to growing residential activity along the Toowong riverfront, joining nearby projects including Consolidated Properties’ Monarch Residences and Spyre Group’s ARC Residences.

Sammut secures approval for debut Brisbane apartment development in Toowong

Developer Lanevick is heading back into Sydney’s apartment market after focusing more heavily on the luxury townhouse and terrace sector in recent years.

Lanevick, founded and directed by Steve Maroun, is expecting to receive approval in the coming months for a new apartment development in Gladesville, with the aim to launch it to the market later this year.

The 51-apartment project, designed by Studio Johnston, will comprise a mix of one-, two-, and three-bedroom apartments positioned toward the Hunters Hill downsizer market.

“Traditionally it’s been difficult for people in that market to downsize because there just hasn’t been the right product available,” Maroun said.

“We’re targeting buyers who might have 30 to 40 per cent of their house value sitting in the bank after downsizing.

“They still want good spacious entertaining areas, they still want quality design, but they also want flexibility and the ability to enjoy life a bit more after working hard for a long time.”

The project sits near Boronia Park and within close proximity to the Parramatta River foreshore, an area Maroun says offers more of a Hunters Hill lifestyle than a traditional apartment precinct.

“From a lifestyle perspective, it’s really more Hunters Hill than Gladesville,” Maroun said. “You’re close to the foreshore, close to parklands, and still connected back into the village precinct.”

From level four and above, apartments will capture water views&nbsp;toward Sydney Harbour. Communal amenity will include rooftop entertaining areas, wellness spaces, and a gym tailored toward owner-occupier buyers.

“We’ve really designed these apartments around that buyer coming from the Hunters Hill LGA and what they’re actually looking for in their next chapter.”

The proposed development has also been designed to respond to the changing character of the broader Gladesville town centre, where a growing number of mixed-use and residential proposals are expected to emerge over the coming years.

“Gladesville presented a rare opportunity to deliver a genuinely design-led residential project within an evolving lifestyle precinct, just moments from the growing Gladesville town centre, and we’ve approached the project with a strong focus on architecture, liveability and long-term community value,” Maroun said.

Maroun said Lanevick saw a first-mover advantage within the precinct as planning controls continue to evolve to accommodate greater housing density.

“We think there’s a real opportunity there that hasn’t really been serviced properly yet,” he said.

“There’s going to be a broader evolution of the whole Gladesville village precinct over time, particularly with more activation and mixed-use outcomes.”

The Venus Street proposal will include a commercial and retail component at ground level designed to contribute to that evolving streetscape activation.

“A big part of the thinking was how do you activate that area properly and create more vibrancy and amenity, which is what Hunters Hill has been looking for,” Maroun said.

Lanevick’s focus since 2020 has largely been on smaller-scale luxury townhouse and terrace developments. The developer recently completed Royale Randwick, also designed by Studio Johnston, where prices reached $3.65 million. The project was featured in the UDIA NSW 2026 Professional Development Prospectus and was also named a finalist for Development of the Year.

&nbsp;

Lanevick to cater for Hunters Hill downsizers with new Gladesville apartment development

Property developer One Living, backed by former Macquarie banker turned investment manager Chris Green’s investment firm, has unveiled plans to bring more institutional capital into housing to help address the national supply crisis.

The New York-based investor has focused his firm, GreenPoint Partners, on addressing the supply shortage hitting middle market housing in Australia.

It is backing the new One Living business to develop more than 1000 units along the eastern seaboard. The new firm is starting with a development on Mona Vale Road, on the border of Mona Vale and Pymble, in Sydney’s Northern Beaches, with around 140 apartments planned. They are eyeing off more sites across the city.

With cost pressures rising in the industry, One Living’s model is to be a vertically integrated developer-builder, so it can respond directly to the housing gap by removing the cost inefficiencies embedded in traditional residential delivery.

“We are building a platform designed to operate at scale and starting in a market where there’s a clear need for quality, attainable housing,” One Living joint managing director Joseph Scuderi said.

“It’s that missing middle – it’s that attainable end of housing… that’s what most Australians invest into and what Australians can actually afford.”

<img alt="Mona Vale" data-entity-type="file" data-entity-uuid="798dfa93-4941-4db6-a696-31e9dc18e81c" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%202.31.50%E2%80%AFPM.png?VersionId=mKBqi5C_DmeiXS.AtJkcR8LQIxqCqmFi" />

GreenPoint Partners brings years of experience assembling and scaling real estate operating businesses across major markets. And Green sees a big opportunity in Australia.

“For its size, sophistication and importance to the community, Australia’s living sector has remained largely under-institutionalised, which represents significant opportunity,” Green said. “GreenPoint identified that gap, assembled the right team, and is backing One Living to build a platform that is aligned to market needs.”

Green said being a builder-developer would give the company the capacity and flexibility it required to deliver reasonably-priced homes.

“We want it to be at that attainable level; not super high end luxury but at that attainable level,” he said.

<img alt="Mona Vale" data-entity-type="file" data-entity-uuid="74a5344a-4b26-4d4a-ada3-056b1220be77" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%202.32.15%E2%80%AFPM.png?VersionId=vY8hXHO4reBMdO8ZXMWCNtGZJofUPQ3j" />

&nbsp;

One Living will undertake a component of affordable housing in its schemes, which it will own and operate, and it could also run build-to-rent on some sites.

Green praised local policy settings.

“The NSW government is being very supportive, strategic and pragmatic in terms of how do we generate more supply of housing,” he said. “We think it’s actually positive for development and the bit that’s been lacking at that attainable level is that it’s lots of relatively small private developers, whereas we want to create an institutional platform.”

One Living is also&nbsp;looking at high-density projects and could take on more institutional funding in the future.

“The way we will be able to achieve economies of scale is through size,” Green added.

One Living enters Sydney's new apartment market with Northern Beaches site acquisition

It's been several years since there's been an opportunity to buy a brand new townhome in Melbourne's coastal suburb of Mordialloc. Even apartment developments in recent times have been few and far between in the area.

Local developer LDS Property identified the gap in new housing, securing a site on White Street, directly opposite&nbsp;Woodlands Golf Club Mordialloc. They've recently launched&nbsp;<a href="https://www.apartments.com.au/new-townhouses/wm-residences-mordialloc-102-white-street-mordialloc-vic-3195">WM Residences</a>, just 13 townhouses which they have already started building.

Projects by Buxton Director Heath Thompson, who is selling WM Residences, says the townhouses x that perfect middle ground be

"Mordialloc residents have had limited options to downsize within the suburb, often forcing them to look elsewhere despite long-standing ties to the area," Thompson says.

"With very little comparable new supply coming to market, projects like WM Residences are well placed, particularly as buyers look to capitalise on current conditions amid constrained supply."

[smartcode_project:default project_id=134646 project_image_fid=6109]

The development, designed by regarded architecture firm&nbsp;<a href="https://www.apartments.com.au/architects/ewert-leaf">Ewert Leaf</a>,&nbsp;adopts a deliberately restrained architectural approach, focusing on simplicity, durability and liveability rather than overt design gestures.

The boutique scale is central to the offering. With only 13 three-bedroom residences, each home is configured to prioritise functional layouts and everyday use, supported by private terraces and secure two-car garages.

Ewert Leaf’s design response leans into a calm, neutral material palette. Interiors are defined by oak flooring, white walls and soft finishes, creating a consistent and understated backdrop. The approach avoids trend-driven detailing in favour of longevity, with an emphasis on natural light and spatial clarity.

[smartcode_project:default project_id=134646 project_image_fid=6110]

Beyond aesthetics, the homes are designed to meet contemporary performance expectations. Each residence targets a minimum 6-star energy rating, incorporating double glazing, comprehensive insulation and all-electric Bosch appliances.

The project’s location supports a walkable coastal lifestyle, sitting within close proximity to Mordialloc’s foreshore, Main Street retail strip and the train station. Local cafés and dining venues, including Suburbia Deli and Hendriks Café, are within a short walk, reinforcing the area’s established neighbourhood character.

[smartcode_project:default project_id=134646 project_image_fid=6116]

While <a href="https://www.apartments.com.au/developments/mordialloc-vic-3195">Mordialloc</a> is often defined by its beach and pier, the project taps into other areas of day to day living, offering easy access to local food, casual dining and transport, rather than positioning itself purely as a lifestyle retreat.

WM Residences reflects a continued trend across Melbourne’s coastal suburbs towards smaller-scale, design-led townhouse developments, particularly on infill sites where proximity to amenity is already established.

With construction commenced prior to its market entry, the project aligns with a growing preference among buyers for developments with visible progress and defined delivery timeframes.

[smartcode_project_cta:default project_id=134646]

WM Residences fills gap in Mordialloc townhouse market

Home Building

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The Simonds home building family, founders of the listed Simonds Group, are preparing to buy out the company with outside assistance from the Roche family.
Simonds are set to leave the ASX boards after an unhappy experience as a listed company since late 2014.
An email was sent to staff on Tuesday flagged a potential change. 
Its shares were placed in a trading halt. 
Simonds' family vehicle and Roche Holdings settled on a 40¢-a-share deal under which a company owned 51 per cent by the Simonds family and 49 per cent by the Roche family would buy all outstanding shares of Simonds Group.
The price represents a 38 per cent premium to the 29¢ price at which the shares last traded before going into a trading halt on Tuesday afternoon.
It gives the company a value of about $57.5 million. 
Gary Simonds retained a 37 per cent stake after listing the company he founded in 1949.
Simonds has seen its share price fall as low as 27¢ from the $1.72 price initial float.
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jchancellor-FAypfDUnLy

Simonds home building privatisation on the agenda

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GUEST OBSERVER
Construction work done in the June quarter by 3.7 percent, to be down 10.6 per cent on a year ago.
Engineering work fell by 9 percent in the June quarter – biggest quarterly fall in 151⁄2 years. Engineering construction is down by 24.9 percent on a year ago – biggest annual fall on record. Residential work rose by 0.8 percent in the June quarter to record highs, while commercial building lifted by 2.1 percent.
Building inflation: Building inflation rose by 0.6 percent in the June quarter. The annual rate of construction inflation rose from 2.1 percent to 2.7 percent – marking the fastest annual growth rate in 71⁄2- years.
<a href="/images/2016/08/24/Screen%20Shot%202016-08-24%20at%201.49.52%20PM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/08/24/Screen%20Shot%202016-08-24%20at%201.49.52%20PM.png" alt="">
Construction work fell in four of the states and territories in the June quarter. Leading the falls was Western Australia (down 19 percent), followed by Northern Territory (down 3.2 percent), NSW (down 1.3 percent) and Tasmania (down 0.4 percent). Construction rose in Victoria (up 5.2 percent), Queensland (up 2.7 percent), the ACT (up 0.5 percent) and South Australia (up 0.1 percent).  The data on construction work is important for builders, building material companies and developers.  
What does it all mean?
Inflation in the building sector is lifting. Not only is the annual rate of construction inflation the fastest in over seven years. But inflation in three out of the past four quarters is amongst the strongest results recorded in the past four years. In addition recent construction industry reports forecast a further rise in hourly rates over the medium term at unionised building sites due to new enterprise bargaining agreements and labour shortages. Overall the lift in inflation in the building sector would not concern the Reserve Bank at present given the lack of inflation across the rest of the economy.
The ‘baton pass’ from engineering to residential building is clear for all to see. Engineering work continues to recede while home building has hit new highs. In fact engineering work record the sharpest quarterly decline in almost 16 years. Interestingly the gap between building (residential and commercial) and engineering in terms of total work is the largest in almost 10 years. The results are even more staggering when you consider that just over two years ago engineering work surpassed total building by more than $8 billion. The speed of the turnaround has shown up in the patchiness across the national economy and in effect highlights the difficulties faced by policymakers in trying to shore up growth
Today’s data is unlikely to alter the Reserve Banks thinking when it comes to rates. Focus now turns to the June quarter business investment data released on September 1. And while the Reserve Bank will be particularly interested in estimates of completed non-mining investment, there will be a much greater focus on future spending plans - especially in light of the fact that private sector construction activity continues to disappoint. 
<a href="/images/2016/08/24/Screen%20Shot%202016-08-24%20at%201.50.55%20PM.png" target="_blank">Click to enlarge</a>
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What do the figures show?
Construction Work
Construction work done fell by 3.7 per cent in real (inflation-adjusted) terms in the June quarter after sliding by 0.3 per cent in the March quarter. Work done is down by 10.6 per cent on a year ago. Public sector construction work rose by 5.3 per cent in the quarter while private sector activity fell by 5.7 per cent.
Construction work fell in four of the states and territories in the June quarter. Leading the falls was Western Australia (down 19 per cent), followed by Northern Territory (down 3.2 per cent), NSW (down 1.3 per cent) and Tasmania (down 0.4 per cent). Construction rose in Victoria (up 5.2 per cent), Queensland (up 2.7 per cent), the ACT (up 0.5 per cent) and South Australia (up 0.1 per cent).
Engineering work fell by 9 percent in the June quarter – biggest quarterly fall in 15 1⁄2 years. Engineering construction is down by 24.9 percent on a year ago – biggest annual fall on record.
Commercial (non-residential) building rose by 2.1 percent in the June quarter to be up 0.4 percent over the year.
Residential building rose by 0.8 percent in the June quarter and was up by 9.4 percent over the year. Alterations &amp; additions rose by 5.4 percent in the quarter while new residential work rose by 0.1 percent.
The measure of inflation in the construction sector (deflator) rose by 0.6 per cent in the June quarter. The annual rate of construction inflation rose from 2.1 per cent to 2.7 percent – matching the fastest annual growth rate in almost 71⁄2 years. Engineering prices rose by 0.6 percent in the quarter (up 2.6 percent over the year) while building prices rose by 0.4 percent in the quarter (2 per cent over the year).
What is the importance of the economic data?
The Bureau of Statistics releases quarterly estimates of Construction work done. The estimates are based on a survey and cover around 85 per cent of the construction work done in the period. Revised estimates will be released in coming months. The data is useful largely for historical purposes but the work yet to be done estimates provide an early warning signal of future activity. The residential work figures give a good early guide to the strength of residential investment in the national accounts.
What are the implications for interest rates and investors?
There is plenty of work in the construction sector. But there are winners and losers across states and industry sectors. The Reserve Bank will not be overly concerned with the current trends in construction. Overall activity is correcting as expected and adjusting to the new realities.
While policymakers will continue to discuss the merits of another rate cut, it really comes down to the inflation outlook. CommSec expects a low inflation result over the September quarter should result in the central bank cutting the cash rate once again in November. 
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<div class="column">Savanth Sebastian is an economist for <a href="https://www.commsec.com.au/" target="_blank">CommSec</a></div>
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Building costs rise at the fastest pace in 7.5 years: CommSec's Savanth Sebastian

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Are there government grants available for new home building in your state or territory?
To see if you are eligible, click on the links below that correspond to the state or territory you are looking to build in.
 
New South Wales State Government
<img src="/images/2015/07/28/nsw.jpg" alt="" width="200" height="138">
 
 
Australian Capital Territory 
<a href="https://www.revenue.act.gov.au/home-buyer-assistance/first-home-owner-grant" target="_blank"><img src="/images/2015/07/28/ACT%20Logo.gif" alt=""></a>
 
Northern Territory State Government
<a href="https://www.treasury.nt.gov.au/TaxesRoyaltiesAndGrants/HomeOwnerIncentives/FirstHomeOwnerGrant/Pages/default.aspx" target="_blank"><img src="/images/2015/07/28/nt1.jpg" alt=""></a>
 
Queensland State Government
<a href="https://www.qld.gov.au/housing/buying-owning-home/first-home-vacant-land-concession/" target="_blank"><img src="/images/2015/07/28/qld.png" alt=""></a>
 
Government of South Australia
<a href="https://www.revenuesa.sa.gov.au/grants-and-concessions/housing-construction-grant" target="_blank"><img src="/images/2015/07/28/sa.png" alt="" width="309" height="206"></a>
Tasmanian Government
<a href="https://www.sro.tas.gov.au/domino%5Cdtf%5CSROWebsite.nsf/v-all/8D67B514FA1A41E0CA257AD00009BB85/%24file/FHBB_001.pdf" target="_blank"><img src="/images/2015/07/28/tas.png" alt=""></a>
State Revenue Office of Victoria
<a href="https://www.sro.vic.gov.au/first-home-owner/apply-first-home-owner-grant-fhog" target="_blank"><img src="/images/2015/07/28/album_photos_medium_28.jpg" alt=""></a>
Government of Western Australia
<a href="https://www.finance.wa.gov.au/cms/State_Revenue/FHOG/First_Home_Owner_Grant.aspx" target="_blank"><img src="/images/2015/07/28/govOfWATextColour_283x268.jpg" alt=""></a>
 
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jonathanchancellor-7SQnKwU6yx

State by state breakout of new home building grants

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<div class="column">GUEST OBSERVER </div>
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 The ‘baton pass’ from engineering to residential building is clear for all to see.</div>
<div class="column"> </div>
<div class="column">Engineering work continues to recede while home building has hit new highs. Interestingly the gap between building (residential and commercial) and engineering in terms of total work is the largest in almost for six years. The results are even more staggering when you consider that just over two years ago engineering work surpassed total building by more than $11 billion. The speed of the turnaround has shown up in the patchiness across the national economy and in effect highlights the difficulties faced by policymakers in trying to shore up growth.</div>
<div class="column"> </div>
<div class="column">Interestingly inflation in the building sector seems to be more subdued than in the past year. Granted the annual rate of construction inflation is the fastest in almost five years. But it is largely due to a couple of outsized inflation in the September and December quarters last year. In fact the more sedate 0.5 per cent March quarter inflation reading resonates with the modest consolidation taking place in the housing sector and adds to the lack of inflation across the broader economy. The lack of inflation in the rest of the economy is likely to keep the Reserve Bank focussed on supporting price growth. </div>
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 <a href="/images/2016/05/25/Screen%20Shot%202016-05-25%20at%203.53.34%20PM.png" target="_blank">Click to enlarge</a>
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The data is unlikely to alter the Reserve Banks thinking when it comes to rates.
The focus now turns to the March quarter business investment data released tomorrow. And while the Reserve Bank will be particularly interested in estimates of completed non-mining investment, there will be a much greater focus on future spending plans. In the March quarter the first estimate of investment in 2016/17 was just $82.57 billion (weakest result since 2007/08), and 19.5 per cent lower than the first estimate for 2015/16 – marking the largest fall for a first estimate reading in records going back 25 years.
While policymakers will continue to discuss the merits of another rate cut, it really comes down to the inflation outlook. CommSec expects a low inflation result over the June quarter should result in the central bank cutting the cash rate in August.
What do the figures show?
Construction Work
Construction work done fell by 2.6 percent in real (inflation-adjusted) terms in the March quarter after sliding by 2.9 percent in the December quarter. 
Work done is down by 6.7 percent on a year ago. Public sector construction work rose by 2.5 percent in the quarter while private sector activity fell by 3.7 percent. 
Construction work fell in five of the states and territories in the March quarter. Leading the falls was Northern Territory (down 10.2 percent), followed by Western Australia (down 9.3 percent), South Australia (down 3.2 percent), Queensland (down 2.9 percent) and Victoria (down 1 percent). Construction rose in NSW (up 2.6 percent), the ACT (up 2.3 percent) and Tasmania (up 1.9 percent).
Engineering work fell by 4.2 percent in the March quarter. Engineering construction is down by 13.7 percent on a year ago.
Commercial (non-residential) building fell by 5.5 percent in the March quarter to be down 7.2 percent over the year. 
Residential building rose by 1.5 percent in the March quarter and was up by 5.7 percent over the year. Alterations &amp; additions rose by 1.1 percent in the quarter while new residential work rose by 1.5 percent.
The measure of inflation in the construction sector (deflator) rose by 0.5 percent in the March quarter. The annual rate of construction inflation rose from 1.9 percent to 2.3 percent – matching the fastest annual growth rate in almost five years.
Engineering prices rose by 0.6 percent in the quarter (up 1.9 percent over the year) while building prices rose by 0.4 percent in the quarter (2.3 percent over the year).
What is the importance of the economic data?
The Bureau of Statistics releases quarterly estimates of Construction work done. The estimates are based on a survey and cover around 85 per cent of the construction work done in the period. Revised estimates will be released in coming months. The data is useful largely for historical purposes but the work yet to be done estimates provide an early warning signal of future activity. The residential work figures give a good early guide to the strength of residential investment in the national accounts. 
What are the implications for interest rates and investors?
There is plenty of work in the construction sector. But there are winners and losers across states and industry sectors. The Reserve Bank will not be overly concerned with the current trends in construction. Overall activity is correcting as expected and adjusting to the new realities. We expect the Reserve Bank to cut rates once again in August.
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<div class="column"><a href="/images/2016/05/25/Screen%20Shot%202016-05-25%20at%203.58.10%20PM.png" target="_blank">Click to enlarge</a></div>
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<div class="column">Savanth Sebastian is an economist for <a href="https://www.commsec.com.au/" target="_blank">CommSec</a></div>
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Construction eases, home building at record highs: CommSec's Savanth Sebastian

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GUEST OBSERVER
Federal Opposition Leader Bill Shorten has announced plans to change negative gearing and the capital gains tax discount if Labor wins the next federal election.
Under costings released from the Parliamentary Budget Office, Labor’s proposed changes could save the budget $32.1 billion over 10 years once they come into force.
Key measures include:
<ul>
<li>Negative gearing to be restricted to "newly constructed homes"</li>
<li>Capital gains tax discount reduced from 50% to 25%</li>
<li>Both measures would come into force from July 2017</li>
<li>All existing investments under the scheme would be fully "grandfathered" and protected against the changes</li>
</ul>
With pressure on the current government to reduce the growing Budget deficit, and Treasurer Scott Morrison's refusal to rule out any changes in policy across the board, negative gearing would seem to be the one area squarely in the sights of both the government and the opposition, especially when you look at the statistics…
<ul>
<li>There are currently 1.2 million people who have negatively geared property, and most of these people are middle class Australians.</li>
<li>Australian Tax Office statistics show negatively geared property investors claim over $13 billion in losses each year, and the average loss per negatively geared investor is over $11,000</li>
<li>The average loss per negatively geared property doubles for people earning more than $180,000, to over $24,000.</li>
</ul>
Should our governments look beyond the numbers? Is it a false economy just to think that by tinkering with negative gearing it will solve the budgetary problem?
5 Reasons Why the Government Shouldn't Change Negative Gearing
1. Growing Population
With Australia's population set to grow significantly over the coming decades, our governments should be asking "How will we house these people?"
The government does not have the capacity, nor the finance, to provide public housing for the growing population so this is left to the private sector.
Negative gearing allows more Australians to invest in property, as the tax benefits assist with the cash flow to invest and hold onto that property. If negative gearing is changed and CGT concessions are reduced, it will mean less investors, less demand and less houses, and it will place further pressure on the government to fund and provide housing.
2. Financial Pressures of the Ageing Population
There are currently 1.2 million middle class Australians investing in property to generate a capital gain and increase their asset base for retirement, to subsequently ensure that they can maintain a standard of living in their retirement without having to solely rely on the aged pension.
If the government creates a blockage into entry for property investment by chipping away at the tax benefits or reduce capital gain concessions, property investment becomes less attractive. In the long term, this will see more Australians relying on government pensions, meaning less self-funded retirees and therefore further pressure will be placed on future budgets.
The government needs to take a long term view and look beyond today. A change to negative gearing and capital gain concessions will only make matters worse in the future.
3. A Drop in Property Prices
Will a change in negative gearing and capital gain concessions disincentivise investors and, if so, what impact will this have on property prices?
In the short term, we may see a dip in property prices due to lower demand and increased supply – which will impact on the economy across the board. State governments will miss out on a large chunk of revenue (via loss of stamp duties), which could mean less funding to spend on things such as education, hospitals and infrastructure at a state level. The federal government will then have to fork out more to state governments to compensate.
4. Knock On Effect to the Economy
Will the changes deter people from investing in property?
Due to the loss of the tax benefits, people will not be able to fund the cash flow of an investment property, meaning they simply won’t buy investment properties. This will cause a knock on effect similar to what we have seen in the mining industry after the boom.
It could also mean a rise in unemployment in the building sector and associated industries such as white goods, electrical and service related industries like real estate and everything that goes with it. As previously mentioned, state governments will be impacted with less revenue from stamp duties to spend on state infrastructures – which would also mean less jobs.
5. Short Term Thinking
For all of the reasons above, I can understand why the government might look at the numbers in front of them and think changing the rules around negative gearing and capital gain concessions is a win for budgetary reasons, but it is simply a case of short term thinking. The government really needs to take a deep breath, sit back and carefully consider what impact this will have on the economy long term.
Any changes made may increase revenue today, but they – or should I say we – could end up paying for this 10, 20 or 30 years down the track. To put it bluntly, a short term gain for long term pain is not good business.
With 1.2 million middle class Australian property investors impacted, changing the rules are negative gearing and capital gains concessions would be highly unpopular – and it could be a game changer for either political party.
David Naylor is co-founder &amp; non-executive director, Chan and Naylor National Accounting Group and can be contacted <a href="https://www.chan-naylor.com.au/" target="_blank">here</a>.
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Property 101: Five reasons why the government shouldn't change negative gearing

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Construction activity eases: Construction work done in the December quarter fell by 3.6 percent, driven by a 9.5 percent slump in engineering work. Residential work lifted by 2.8 per cent to record highs while commercial building rose 2.5 percent.
Building inflation: Building inflation rose by 1.1 per cent in the December quarter, the biggest quarterly gain in seven years. The annual rate of construction inflation rose from 1 per cent to 1.9 percent – matching the fastest annual growth rate in four years.
Slow wage growth: The wage price index rose by 0.5 percent in the December quarter after a 0.6 percent rise in the September quarter. Annual wage growth eased from 2.3 percent to a record (18-year) low of 2.2 percent.
Industry with fastest annual wage growth: Financial and insurance services (up 2.8 percent) followed by education &amp; training (up 2.6 percent).
Industries with slowest annual wage growth: Administrative and support services (up 1.4 percent), followed by Mining (up 1.5 percent).
The data on construction work is important for builders, building material companies and developers.
What does it all mean?
The ‘baton pass’ from engineering to residential building is clear for all to see. Engineering work continues to recede while home building has hit new highs. Interestingly building (residential and commercial) has surpassed engineering in terms of total work for the first time in five years. The results are even more staggering when you consider that just two years ago engineering work surpassed total building by more than $11 billion. 
The speed of the turnaround has shown up in the patchiness across the national economy and in effect highlights the difficulties faced by policymakers in trying to shore up growth.
<a href="/images/2016/02/25/Screen%20Shot%202016-02-25%20at%209.02.12%20AM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/02/25/Screen%20Shot%202016-02-25%20at%209.02.12%20AM.png" alt="">
The wages data confirmed that inflation is well and truly in check. However an area to watch over the next couple of quarters is inflationary pressures in the high-flying home building sector. Inflation in the construction sector rose by the 1.1 percent in the December quarter – the fastest quarterly growth rate in seven years. The lack of inflation in the rest of the economy should ensure that for the moment the latest result doesn’t trouble the Reserve Bank.
<a href="/images/2016/02/25/Screen%20Shot%202016-02-25%20at%209.05.59%20AM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/02/25/Screen%20Shot%202016-02-25%20at%209.05.59%20AM.png" alt="">
Clearly, the job market is improving because the cost of labour has become more affordable for businesses. While low wage growth is good for keeping costs down for businesses, modest real wage growth (wages less prices) makes it more difficult for consumer-focussed businesses.
Real wage growth remains positive – around 0.5 percentage points if judged against “headline” inflation (15-year average 0.7 percentage points) and around 0.2 percentage points when judged against “underlying” inflation.
Today’s data is unlikely to alter the Reserve Banks thinking when it comes to rates. While policymakers may discuss the merits of another rate cut, they are unlikely to pull the trigger on domestic conditions. Rather a rate cut would be driven by changes in the global environment.
What do the figures show?
Construction Work
Construction work done fell by 3.6 per cent in real (inflation-adjusted) terms in the December quarter after sliding by 1.8 percent in the September quarter. Work done is down by 4.3 percent on a year ago. Public sector construction work rose by 1.2 percent in the quarter while private sector activity fell by 4.6 percent.
Construction work fell in five of the states and territories in the December quarter. Leading the falls was Northern Territory (down 17.7 percent), followed by Western Australia (down 9.5 percent), Tasmania (down 4.3 percent), South Australia (down 3.1 percent), and Queensland (down 1.4 percent). Tasmania (down 1.8 percent) and ACT (down 0.6 percent). Construction rose in Victoria (up 1.1 percent), ACT (up 1 percent) and NSW (up 0.2 percent).
Engineering work fell by 9.5 percent in the December quarter and has now fallen almost 25 percent in the past three years. Engineering construction is down by 14.7 percent on a year ago.
Commercial (non-residential) building rose by 2.5 percent in the December quarter to be up 2.2 percent over the year.
Residential building rose by 2.8 percent in the December quarter and was up by 11.5 percent over the year.
Alterations &amp; additions fell by 1.2 percent in the quarter while new residential work rose by 3.3 percent.
The measure of inflation in the construction sector (deflator) rose by 1.1 percent in the December quarter, the biggest gain in 7 years. The annual rate of construction inflation rose from 1 percent to 1.9 percent – matching the fastest annual growth rate in four years. Engineering prices rose by 1.5 per cent in the quarter (up 0.8 percent over the year) while building prices rose by 0.5 percent in the quarter (2.7 percent over the year).
Wage price index
The wage price index rose by 0.5 percent in the December quarter after a 0.6 percent rise in the September.
Annual wage growth eased from 2.3 percent to a record (18-year) low of 2.2 percent.
Private sector wages rose by 0.5 percent in the quarter while  public sector wages also rose by 0.5 percent.
Annual growth of private sector wages fell from 2.1 percent in the September quarter to a record low of 2.0 percent in the December quarter. Public sector wage growth fell from 2.8 percent to 2.6 percent in the December quarter.
<a href="/images/2016/02/25/Screen%20Shot%202016-02-25%20at%209.13.15%20AM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/02/25/Screen%20Shot%202016-02-25%20at%209.13.15%20AM.png" alt="">
 
Including bonuses, wages rose by 0.5 percent in original terms in the December quarter to be up 2.2 percent on a year ago – a record low. Private sector wages including bonuses rose by 0.5 percent in the quarter to be up 2.1 percent on a year ago (or up 2.2 per cent at a total hourly rate).
Industries with fastest annual wage growth: Financial and insurance services (up 2.8 percent), followed by education &amp; training (up 2.6 percent) and Manufacturing and retail trade (both up 2.5 percent).
Industries with slowest annual wage growth: Administrative and support services (up 1.4 percent), followed by Mining (up 1.5 percent), Professional, scientific and technical services and Construction (both up 1.6 percent).
Annual wage growth across States &amp; Territories: NSW, 2.1 percent; Victoria, 2.4 percent; Queensland, 1.9 percent; South Australia, 2.3 percent; Western Australia, 1.8 percent; Tasmania, 2.2 percent; Northern Territory, 2.4 percent; and ACT, 1.6 percent.
What is the importance of the economic data?
The Bureau of Statistics releases quarterly estimates of  Construction work done. The estimates are based on a survey and cover around 85 percent of the construction work done in the period. Revised estimates will be released in coming months. The data is useful largely for historical purposes but the work yet to be done estimates provide an early warning signal of future activity. The residential work figures give a good early guide to the strength of residential investment in the national accounts.
The Wage Price Index has been compiled since September quarter 1997 and measures quarterly changes in wage and salary costs for employees. The index is based on a representative sample of employees, and includes measures of non-wage costs including superannuation, payroll tax, public holiday and workers compensation.
The Wage Price Index is useful in measuring wage pressures in the economy. While strong growth in wages would boost domestic spending, it could also serve to lift employer costs and prices and add to economy-wide inflationary pressures. The wage price index is a measure of hourly pay rates (excluding bonuses).
What are the implications for interest rates and investors?
There is plenty of work in the construction sector. But there are winners and losers across states and industry sectors. Construction activity in Queensland remains a concern. In the past two years, construction work has slumped by 45 percent in Queensland – the most of any state or territory. The lack of construction work in Queensland needs to be addressed by the State Government as it is robbing the economy of momentum.
In contrast to Queensland, construction activity in Victoria hit record highs in the December quarter. Builders, tradespeople and construction firms need to be mobile in the current environment.
The Reserve Bank will be pleased about current trends in construction. Overall activity is correcting as expected and adjusting to the new realities. And while inflation in the home building is higher than in the rest of construction and higher than consumer prices, that is to be expected given soaring activity.
We expect the Reserve Bank to stay on the interest rate sidelines over coming months.
<a href="/images/2016/02/25/Screen%20Shot%202016-02-25%20at%209.21.01%20AM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/02/25/Screen%20Shot%202016-02-25%20at%209.21.01%20AM.png" alt="">
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Tame wages and home building at record highs: Savanth Sebastian

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<img src="/images/2015/11/NEW_RAMS_LOGO.jpg" alt="">
You may decide that rather than buying an established property as your first home, it would suit you better to build. 
Building allows you to customise your home from the outset, creating a property that perfectly suits your needs without having to renovate. 
You’ll probably have lower maintenance costs on a newly built property than an older home and you may be able to incorporate energy and water efficient features that save on utility bills. 
In addition, government grants are more widely available on newly built properties. Check what’s available in your state or territory. 
But there are some points to bear in mind if you’re planning to build: 
<ul>
<li>
Building your own home may take longer than finding an existing property to buy. There may be delays due to bad weather or council approvals taking longer than expected. 
</li>
<li>You may need to factor in the cost of paying rent while you’re building.</li>
<li>
Standard building packages often include only basic fixtures and finishes. You may have to pay more for higher quality options.
</li>
<li>
In some cases, particularly when you’re buying off-the-plan, there may be charges for services such as site preparation, laying foundations, and connecting to water and electricity mains. Make sure you’re aware of all the extra costs and have funds available to pay. 
</li>
</ul>
If you’re building, it might be worth considering a construction home loan rather than a standard mortgage. These loans allow you to draw funds progressively as needed up to an approved credit limit. Interest is charged only on the portion of the loan you’ve used. The lender may be able to make payments directly to the builder. 
Quick tip: Confirm the builders and contractors you’re hiring are licensed and insured. Keep a close watch on construction to make sure they are delivering the high quality results you expect. 
 
TO FIND OUT HOW RAMS CAN HELP EASE YOU THROUGH THE PROCESS, GET IN TOUCH WITH YOUR LOCAL RAMS HOME LOAN EXPERT OR DROP IN FOR YOUR <a href="https://ad.doubleclick.net/ddm/clk/297185263;124283895;u" target="_blank">FREE FIRST HOME BUYERS’ GUIDE</a>.
For more great property advice and tips on buying your first home from RAMS subscribe to <a href="https://ad.doubleclick.net/ddm/clk/297186218;124283892;s" target="_blank">The Great Australian Dream property series</a>.
For your free Property Observer eBook from RAMS, 12 tips for first-time buyers, covering everything you need to know when it comes to purchasing property, click here.
Disclaimer: Information in this material is general and does not take into account your objectives, financial situation or needs and you should consider whether it is appropriate for you. You should also obtain independent professional advice relevant to your financial circumstances.
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Building your first home

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OK so the ABS Building Activity data series doesn't quite run back to 1788, but take a Captain Cook at this:
<a href="/images/2015/10/19/BA3.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2015/10/19/BA3.jpg" alt="">
 
<div>Dwelling completions have surged to their highest ever level with more than 186,000 homes completed over the past year. Furthermore there are presently some 184,000 dwellings under construction, which is the highest number in Australia's history.</div>
<div> </div>
<div>Many pundits scoffed at the Reserve Bank's plan to stimulate construction, but prices are rising and supply has responded with a vengeance, despite inflation in the cost of trades and materials. </div>
<div> </div>
<div>As the largest cities have become denser over time, this construction cycle has largely been a story of units, townhouses and apartments - the "attached dwellings" sector. </div>
 Building work done 
<div>It should be acknowledged that in spite of all the numbers that are being thrown around in relation to record home starts, record completions and record dwellings under construction, the residential construction boom has likely now nudged against its peak. </div>
<div> </div>
<div>Despite being higher over the year the value of new residential building work done slipped -3.4 per cent lower in the June quarter to $12.8 billion, although the resi sector was held up to some extent by a long overdue +4.0 per cent surge in major renovations work. </div>
<div> </div>
<div>There has not been much to shout about from the non-residential sector since the financial crisis stimulus. </div>
<div> </div>
<div><a href="/images/2015/10/19/BA1.jpg" target="_blank">Click to enlarge</a></div>
<div><img src="/images/2015/10/19/BA1.jpg" alt=""></div>
<div> </div>
<div>At the state level the economies of the most populous states have benefited from a building boom, but the value of building work done appears to have peaked, albeit remaining at a historically high level. </div>
<div> </div>
<div><a href="/images/2015/10/19/BA2.jpg" target="_blank">Click to enlarge</a></div>
<div> </div>
<div><img src="/images/2015/10/19/BA2.jpg" alt=""></div>
<div> </div>
<div> </div>
<div>
Dwelling completions by state <div>Where are new houses coming online? Mainly in Victoria with more than 31,000 houses completed over the past year.</div>
<div> </div>
<div><a href="/images/2015/10/19/BA4.jpg" target="_blank">Click to enlarge</a></div>
<div> </div>
<div><img src="/images/2015/10/19/BA4.jpg" alt=""></div>
<div> </div>
<div>As for units and apartments there has been a strong completion rate across most of the larger states, with Victoria again leading the way in completing nearly 25,000 units over the past year. </div>
<div> </div>
<div><a href="/images/2015/10/19/BA5.jpg" target="_blank">Click to enlarge</a></div>
<div> </div>
<div><img src="/images/2015/10/19/BA5.jpg" alt=""></div>
<div> </div>
<div> </div>
<div>
<div>Although it will be the topic of a separate blog post, these figures show why the "Sydney oversupply" meme has been wide of the mark. </div>
<div> </div>
<div>The above charts represent state level figures, and it is clear that the supply of new units and apartments has ramped up impressively over the past four years. But despite the improvement, total dwelling completions in New South Wales of 144,000 dwellings is barely keeping pace with a population which has surged by close to 400,000 over that time, while this follows on from a weak half decade of completions in the harbour city which ran from 2005.</div>
<div> </div>
<div>After accounting for stock obsolescence and demolitions, the thousands of apartments which are left vacant, and the fact that close to half of new dwellings in NSW over that time have been units (which typically house only provide accommodation for a couple)...well, there's not much overbuilding in aggregate to be found in those numbers, even if the rentals market is now fully supplied. It is much more difficult for a growing city with a population the size of Greater Sydney (approaching 5 million) to overbuild housing than it is for a city the size of, say, Belfast, although Melbourne is certainly giving its best shot. For all that, there are of course plenty of sub-regions around Australia with localised oversupply, and particularly so the case of higher-density dwellings. </div>
 Commencements peak at record high 
<div>Total commencements have increased by +14 per cent over the past year to a new high of nearly 210,000.</div>
<div> </div>
<div>It was another strong quarter in June, but the 53,314 commencements result was below that of two of the preceding three quarters, and it is forecast that commencements will now decline through 2015/16.</div>
<a href="/images/2015/10/19/BA6.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2015/10/19/BA6.jpg" alt="">
 
Finally, there are 184,000 dwellings under construction at the present time, which is the highest figure in Australia's history. 
Click to enlarge
<img src="/images/2015/10/19/BA7.jpg" alt="">
 
This should keep the residential construction sector operating at or close to its full capacity for some time to come.
 
PETE WARGENT is the co-founder of <a href="https://allenwargent.com/" target="_blank" rel="nofollow">AllenWargent</a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank" rel="nofollow">blogger</a>. 
His latest book is <a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx" target="_blank" rel="nofollow">Four Green Houses and a Red Hotel</a>.
 
</div>
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pwargent-M4siyDbqQY

Strongest homebuilding since 1788: Pete Wargent

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GUEST OBSERVER
Approvals rose 4% in July, coming in a touch above Westpac and the consensus forecast of a 3% rise.
A partial rebound was widely recovered after last months’ report showed a sharp fall in high-rise approvals driving an 8.2% drop overall.
That previous fall has been pared back to just –5.2% meaning approvals are only down 1.2% over the two months combined and 4.7% below their March peak. 
Volatility continues to affect much of the survey detail making trends difficult to pinpoint. 
The dwelling type breakdown shows the dominance of ‘high rise’ approvals – private ‘unit’ approvals rose 6.1%, coming off a 14% drop in Jun (previously estimated as –20%) with the detail suggesting all of the change reflecting high rise approvals (low-mid rise approvals look to be down a touch in the month). Private sector house approvals were down 3%mth but were coming off a 3.7% rise in June, quite a strong increase for this more stable segment. 
The state breakdown shows the rebound concentrated in NSW which saw a big 27% jump in the month. Vic approvals rose 8.3% with other states recording declines – notably, approvals in WA are now down 30%yr.
The picture ex high rise suggests approvals suggests a flattening uptrend in NSW and Qld and downtrends in Vic and WA. 
The headline and revision was more positive than expected but much of this appears to relate to the size of volatility in the high rise segment with ex-high rise approvals showing conditions are more mixed.
Stepping back from the month to month variations, approvals have clearly passed their peak but the degree to which conditions are now softening remains unclear.   Details  Private houses  –3%mth,    –2.2%yr    Private 'units'    6.1%mth,    25.2%yr                               
NSW     27.1%mth,      67.7%yr  Vic       8.3%mth,        15.6%yr         Qld       –17.2%mth,      2.2%yr       WA       –1.1%mth,    –29.9%yr      SA        –8.1%mth,    –11.6%yr                            
Alteration &amp; additions^   –1.3%mth,    12%yr    Non-residential^             12.2%mth,    14.6%yr       ^ value               
 
Strategy
For the AUD The Aussie rose from lows of 0.7102 in the Australia morning. It touched 0.7133, popping up around 5 pips, with the upside surprise in building approvals. However net exports, which was released at the same time, showed a larger detraction from GDP than expected and the current account deficit was larger than forecast. This brought AUD/USD to trade back down towards 0.7105.
Matthew Hassan is senior economist with <a href="https://www.westpac.com.au/" target="_blank">Westpac</a>.
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