<p>Nature Based Cities (NBC), the not-for-profit organisation focused on improving biodiversity and nature outcomes in urban development, has launched its latest industry design guidelines and accreditation framework, this time targeting precinct-scale residential communities.</p>

<p>The move extends NBC’s influence beyond its initial focus on medium and high-density residential developments. Several projects have already achieved NBC accreditation since the launch of its Medium &amp; High-Density Residential Guidelines in early 2025.</p>

<p>The expansion into masterplanned communities and new residential precincts reflects the growing need for stronger nature-positive benchmarks as Australia’s outer suburban growth corridors continue to expand at pace.</p>

<p>Paul Hameister OAM, NBC Founder and the Executive Chairman of Melbourne developer Hamton who itself leans heavily into nature and biodiversity in its developments, says the&nbsp;nature-first approach to mitigate the effects of climate change has become standard in other parts of the world such as the UK, but Australia is lagging.&nbsp;Australia’s environmentally sustainable design (ESD) rating tools have no minimum mandatory requirements for living landscapes.</p>

<p>“We’ve always wanted to do more, and we know other developers who want to do more, but the ESD rating tools just aren’t there,” Hameister says. “In Australia, you can have a five-green-star rated building that’s concrete and glass with not a blade of grass.<br />
<br />
“The focus is on reducing emissions, which is laudable, but there hasn’t been enough attention paid to protecting and re-establishing nature. We need both for the health of the environment and for communities.”</p>

<p>He says that having now&nbsp;made good progress in supporting developers of medium and high-density residential projects, NBC is now looking to bolster better nature-based decision-making and recognise developers of greenfield projects in the outer ring and large inner-ring brownfield precincts, who want to champion nature and living landscape as a defining feature.</p>

<p>Since 2022, the not-for-profit has sought to remove the roadblocks preventing developers from incorporating nature and living landscapes into their projects, shifting the conversation from the reduction of emissions and grey infrastructure, toward recognising nature as an essential infrastructure.</p>

<p>The New Communities Design Guidelines and Scorecard arm developers with the tools needed to deliver a nature positive outcome for their new communities. Intended to be adopted at the outset of the planning process, the guidelines are designed to help create communities that are cooler, healthier and more resilient while also enhancing social wellbeing and long-term economic value.&nbsp;</p>

<p>New Communities developers seeking accreditation will be independently assessed across a range of key criteria including ecology, tree canopy, biodiversity, and walkability. Once the masterplan is complete and submitted for approval, the scorecard is formalised based on proposed outcomes. Projects that meet the NBC criteria will receive either Commended or Exemplary accreditation outcomes, creating a clear benchmark for nature-positive new communities in Australia.&nbsp;</p>

<p>Janis Fischer, Director at Tract and NBC Advisory Council member, said the development of new communities in our suburbs can have a substantial impact on nature and biodiversity.</p>

<p>"By incorporating nature-based design principles at the inception of a project, developers and their design teams can achieve nature positive outcomes that are good for both people and the planet.’’&nbsp;</p>

<p>NBC accredited New Community projects will gain access to NBC branding and marketing tools to help communicate their nature-based credentials to purchasers and the broader market.&nbsp;</p>


Joel Robinson

Nature Based Cities: A new Australian benchmark for developing nature-positive new communities

<p>Apartment buildings are increasingly being designed around how people actually live day to day, not just how they want a building to look.</p>

<p>For buyers, that shift is showing up in practical inclusions that respond to changing habits. Work-from-home spaces, EV charging, wellness amenities, secure bike storage and parcel management are becoming part of the broader apartment conversation, reflecting a move toward buildings that reduce friction in everyday life.</p>

<p>Online shopping has become one of the clearest examples of that change.</p>

<p>Australians spent a record $82.6 billion online in 2025, with nearly one in four retail dollars now spent online. That has made parcel delivery a regular part of apartment living, rather than an occasional inconvenience.</p>

<p>For apartment residents, however, the delivery process can be less straightforward than it is for detached homes. Parcels may be left in lobbies, redirected to Post Offices, missed entirely, or placed under the responsibility of building managers and concierge teams.</p>

<p>That is why secure parcel infrastructure is increasingly being considered alongside more familiar apartment amenities.</p>

<p><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/-VjjLwoViX0?si=A3k7ws9NX35Uac7_" title="YouTube video player" width="560"></iframe></p>

<p>Australia Post Parcel Lockers offer one way to address the issue. When a parcel arrives, residents receive a notification through the AusPost app or SMS, then collect it using a QR code or one-time PIN. The parcel is kept secure, accessible and removed from common areas.</p>

<p>The broader Parcel Locker network now includes more than 1,500 locations across Australia, positioned at Post Offices, shopping centres, supermarkets, transport hubs and other accessible locations.</p>

<p>For new apartment projects, the relevance is clear. A building’s amenity offering is no longer only about lifestyle spaces, but also about convenience, security and functionality.</p>

<p>As buyer expectations evolve, secure parcel delivery is becoming part of the same design conversation as flexible working, sustainable transport and resident wellbeing.</p>

<p>It is one less thing for residents to worry about, and another example of apartment design adapting to the way Australians now live.</p>


Apartment design is adapting to the way Australians shop

<p>While school holidays and trips to Europe tend to define the winter property market, there's been no cold snap at <a href="https://www.apartments.com.au/new-apartments/the-walden-north-sydney-177-walker-street-north-sydney-nsw-2060">The Walden</a> in North Sydney.</p>

<p>Developer-builder&nbsp;<a href="https://www.apartments.com.au/developers/aland">ALAND</a> sold more than $35 million worth of apartments throughout June, including a $6.8 million apartment that now ranks among the highest apartment sales ever recorded in North Sydney.</p>

<p>SRM Residential agent Ben Stewart said buyer demand throughout June reflected a mix of improving market confidence and longer-term thinking from owner-occupiers.</p>

<p>"We're seeing strong demand from owner-occupiers who are taking a longer-term view," Stewart said.</p>

<p>"Many recognise the opportunity to secure an apartment in an iconic building and premium location while values remain attractive. They may initially lease the property, but the intention is to eventually move in themselves, rather than purchasing purely as an investment."</p>

<p>[smartcode_project:default project_id=134323 project_image_fid=367129]</p>

<p>Located at 177 Walker Street, The Walden will deliver 161 one, two, three and four-bedroom residences across a 30-storey tower designed by Rothelowman. Every apartment occupies a corner position, maximising natural light, cross ventilation and views across Sydney Harbour, the Opera House, Sydney Heads and the northern districts.</p>

<p>Rather than a traditional balcony, the residences feature winter gardens that seamlessly extend the open plan living areas, creating versatile spaces for relaxing or entertaining throughout the year. Floor-to-ceiling glazing draws in natural light while showcasing sweeping views from the building's elevated Walker Street position.</p>

<p>Every apartment features high-end Calacatta marble, bespoke joinery, and fully integrated appliances.</p>

<p>The larger residences have been planned with distinct entertaining and private zones, with many master suites positioned on corners to capture natural light and harbour views. Walk-in dressing rooms, freestanding baths and refined stone finishes reinforce the house-like feel that has resonated with downsizers and owner-occupiers.</p>

<p>[smartcode_project:default project_id=134323 project_image_fid=6393]</p>

<p>Rothelowman Principal Ben Pomroy said the project was designed to make the most of its unique position overlooking the harbour.</p>

<p>"The Walden is a celebration of all things beautiful, curated for those who expect nothing less than exceptional," Pomroy says.</p>

<p>"Meticulously designed entertaining spaces and light-filled living areas that capitalise on capturing the natural beauty of Sydney's iconic harbour."</p>

<p>Residents will also have exclusive access to The Pavilion, a dedicated amenity building featuring a rooftop pool, wellness studio, gymnasium, sauna, concierge service, residents' lounge, private dining spaces and work-from-home facilities.</p>

<p>[smartcode_project:default project_id=134323 project_image_fid=6402]</p>

<p>The project marks ALAND's first major luxury apartment development in Sydney's inner-city market after more than two decades delivering residential communities across Greater Sydney.</p>

<p>Founder and CEO Andrew Hrsto previously said the rarity of the Walker Street site made it an opportunity the company could not overlook.</p>

<p>"This is a rare opportunity to bring a truly exceptional project to life in one of Sydney's most iconic locations, and to showcase our craftsmanship and design expertise at a world-class level," Hrsto said.</p>

<p>[smartcode_project:default project_id=134323 project_image_fid=6383]</p>

<p>The Walden has been introduced to the market at a time when demand for living in North Sydney is at an all-time high. Billions of dollars have been invested in infrastructure, including the recently opened Victoria Cross Metro station, located just 300 metres from The Walden, providing residents with direct access to the Sydney CBD in just minutes.</p>

<p>Private investment has also transformed the area through the arrival of new retail and dining destinations, elevating the lifestyle offering in what was once considered primarily a commercial precinct rather than an aspirational residential address.</p>

<p>The Walden is currently under construction and is scheduled for completion in 2028.</p>

<p>[smartcode_project_cta:default project_id=134323]</p>


ALAND records $35 million in sales in North Sydney as The Walden bucks quiet winter selling season

<p>The long-awaited redevelopment of the former Eastlakes Shopping Centre site has reached a major milestone, with Conquest's plans for a new mixed-use precinct officially placed on public exhibition.</p>

<p>The State Significant Development Application would transform the 1.7-hectare site at <a href="https://www.apartments.com.au/new-apartments/19a-evans-avenue-eastlakes-nsw-2018">19A Evans Avenue</a> into one of Sydney's largest urban renewal projects, delivering 736 apartments above a new shopping centre anchored by Woolworths, alongside specialty retail, dining, commercial space and new public open spaces.</p>

<p>The public exhibition marks the next chapter for the project after <a href="https://www.apartments.com.au/developers/conquest">Conquest</a> acquired the stalled Stage Two development from Crown Group, who completed the first stage across the road prior to their voluntary liquidation.</p>

<p><img alt="First look: Conquest unveils plans for 736-home Eastlakes Shopping Centre redevelopment" data-entity-type="file" data-entity-uuid="5fca22c5-d1ed-4e2c-8801-03f7df1eafc8" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/eastland%20podium.png?VersionId=uomwr41nF8CmLUZRDcu3mHQechlbxucS" /></p>

<p>&nbsp;</p>

<p>Designed by DKO Architecture, the proposal comprises four residential buildings ranging from 14 to 18 storeys above a two-level retail podium. The development would deliver 736 apartments, including 74 affordable homes, 215 Build-to-Rent apartments and 521 market residences. Provision has also been made for dual-key apartments, which could increase the total number of dwellings to 877.</p>

<p>At ground level, the shopping centre has been designed as the suburb's new meeting place, anchored by a full-line Woolworths and complemented by a curated mix of fresh food retailers, cafés, restaurants, health services and everyday convenience shopping. Generous pedestrian links and landscaped public spaces will connect the retail precinct through to Jack Mundey Reserve, creating a more walkable and connected neighbourhood.</p>

<p>Conquest CEO Michael Akkawi said the redevelopment was about far more than replacing a shopping centre.</p>

<p>"Eastlakes has been overlooked for too long, and this is the community’s moment. We are building a shopping centre and homes, a genuine heart for the suburb, and we genuinely want locals to help shape it."</p>

<p>"We enrich communities through the creation of homes, places, and experiences designed for life, built to last, and owner for generations. That starts with listening, so we warmly encourage everyone with a connection to Eastlakes to view the plans and share their thoughts."</p>

<p><img alt="First look: Conquest unveils plans for 736-home Eastlakes Shopping Centre redevelopment" data-entity-type="file" data-entity-uuid="22f6fb20-54fb-4bd7-8a92-48fafdd00608" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/eastland.png?VersionId=cugp7s9hrMHGJJdYzkeAkrFoQgnF4GXf" /></p>

<p>DKO said the design had been shaped by the site's landscape setting and surrounding open space.</p>

<p>"Our vision for the site embraces its unique Bidjigal identity by blending the residential living with generous landscaping and a material palette inspired by the Bidjigal locality, and celebrating the panoramic views to Botany Bay and the wetlands reserves."</p>

<p>"Taking cues from Country, we seek to harmonise built form with the landscape and lightly touch the earth. By reconnecting, retaining and regenerating existing ecology, and weaving in natural elements, we can deepen our connection to Country."</p>

<p>The landscape strategy extends across the podium and rooftops, incorporating communal gardens, children's play areas, lawns, community gardens, family gathering spaces and extensive tree planting. New landscaped links will also strengthen the connection between the precinct and Jack Mundey Reserve, while publicly accessible open spaces have been integrated throughout the development.</p>

<p>The proposal builds on Conquest's broader placemaking strategy for the site. Through an ongoing partnership, local artist Joe Rashbrook has been appointed Urban Art Curator, working alongside young residents to transform the project's site hoardings into a public art gallery that allows the community to engage with the redevelopment before construction is complete.</p>

<p>Conquest has rapidly expanded its development pipeline since acquiring the Eastlakes site, with more than $6 billion worth of mixed-use projects now in planning across Sydney, including Stanmore, Castlecrag and Waterloo.</p>


Conquest CEO Michael Akkawi said the redevelopment was about far more than replacing a shopping centre.

First look: ‘Far more than replacing a shopping centre’ as Conquest unveils 736-home Eastlakes redevelopment

<p>Abadeen has lodged a State Significant Development Application (SSDA) for one of Mosman's largest apartment developments in recent years, seeking approval to transform the former Honeysuckle Garden and Midas site on Military Road into a 100-apartment mixed-use development.</p>

<p>The SSDA, lodged with investment partner Phoenix Property Investors, proposes around $230 million worth of new housing on the prominent <a href="https://www.apartments.com.au/new-apartments/494-516-military-road-mosman-nsw-2088">494-516 Military Road</a> site.</p>

<p>The proposal comes as Mosman Council continues to progress its recently endorsed Masterplan, which identifies the precinct for increased housing density while maintaining the suburb's established character.</p>

<p>Designed by DKO Architecture, the development would comprise 100 apartments above ground-floor retail, with a rooftop wellness precinct including a gym, sauna, entertaining areas and landscaped communal spaces.</p>

<p>Rather than pushing to the full 12-storey height identified in Council's Masterplan, the proposal ranges between five and nine storeys, stepping down towards Hale Road. A tenth level would accommodate resident amenities rather than additional apartments.</p>

<p>The project has been designed to appeal to a broad range of buyers, from first home buyers and young professionals through to families and local downsizers looking to remain on the Lower North Shore.</p>

<p><img alt="Mosman" data-entity-type="file" data-entity-uuid="5dada03f-5b4c-43ba-ba62-2868add31440" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-07-27%20at%209.57.55%E2%80%AFAM.png?VersionId=7LBy0B.Jo8_iWAFJsClcV7Q3UnXrv49r" /></p>

<p>Abadeen Executive Chairman Justin Brown said the apartments had been designed as genuine long-term homes rather than investor-focused stock.</p>

<p>"The apartments have been designed as genuine long-term homes, with efficient floorplans that maximise usable living areas, generous storage, natural light and strong connections between indoor and outdoor spaces," Brown says."</p>

<p>"We've focused on creating homes for a broad range of buyers, from first home buyers and growing families through to downsizers who want to remain in Mosman."</p>

<p>The rooftop wellness offering forms a key part of the proposal, with residents set to have access to a gym, sauna, outdoor entertaining spaces, communal dining areas, landscaped gardens and a multi-use recreation court overlooking Sydney Harbour.</p>

<p><img alt="Mosman" data-entity-type="file" data-entity-uuid="d37c2d6b-583a-4a0f-b7a9-9f46b893d2f4" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-07-27%20at%209.58.06%E2%80%AFAM.png?VersionId=FPoa5FCm2RtzjhAh2w5FTWJbV6GHfY8D" /></p>

<p>DKO drew heavily on the site's natural and cultural history, undertaking a Connecting with Country process with local Aboriginal Elders to inform the architectural and landscape design.</p>

<p>Senior Associate Matthew Ritchard said the design sought to create a building that responded to both the site's landscape and its cultural significance.</p>

<p>"The architectural language of the project is a deep expression of Connecting with Country, where the materiality and colour palette serve as a bridge between the site's geological history and its future as a residential sanctuary."</p>

<p>The proposal also retains the site's established blue gum tree as the centrepiece of the communal landscaped gardens, while introducing activated retail fronting Military Road to strengthen the connection between Mosman and Cremorne villages.</p>

<p>If approved, the project would deliver 100 new homes within walking distance of shops, public transport, schools and local amenities, adding to the limited pipeline of new apartments on the Lower North Shore.</p>

<h2>Project Snapshot</h2>

<p><strong>Project:</strong> Honeysuckle Garden Redevelopment</p>

<p><strong>Address:</strong> 494-516 Military Road, Mosman</p>

<p><strong>Developer:</strong> Abadeen and Phoenix Property Investors</p>

<p><strong>Architect:</strong> DKO Architecture</p>

<p><strong>Lead Architect:</strong> Matthew Ritchard</p>

<p><strong>Value:</strong> $230 million</p>

<p><strong>Residences:</strong> 100 apartments</p>

<p><strong>Key features:</strong></p>

<ul>
	<li>
	<p>Ground-floor retail</p>
	</li>
	<li>
	<p>Rooftop wellness precinct</p>
	</li>
	<li>
	<p>Gym and sauna</p>
	</li>
	<li>
	<p>Outdoor entertaining and BBQ areas</p>
	</li>
	<li>
	<p>Landscaped communal gardens</p>
	</li>
	<li>
	<p>Multi-use recreation court</p>
	</li>
	<li>
	<p>Retained mature blue gum tree</p>
	</li>
	<li>
	<p>Connecting with Country design process</p>
	</li>
	<li>
	<p>Harbour, CBD and Balmoral views from upper-level apartments</p>
	</li>
</ul>


Abadeen Executive Chairman Justin Brown said the apartments had been designed as genuine long-term homes rather than investor-focused stock

First look: Abadeen plans 100 apartments on former Honeysuckle Garden site in Mosman

Home Construction

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<em>CoreLogic-RP Data</em> already appears set to report further dwelling price growth in October for Sydney, with prices once again up at a sprightly pace and moving another +$5,300 higher. </div>
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<div>There has been plenty of spirited debate in the media about what comes next for house prices in Australia.</div>
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<div>Macquarie has suggested that a housing market correction of -7.5 per cent could take place - beginning some time in 2016 before ending in 2017 - while Stockland's Mark Steinert disagrees and sees prices continuing to rise by +3% to +5% through next year.</div>
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<div>This pretty much tells you everything you need to know about short term property market predictions: one analyst thinks prices will rise, another thinks they'll fall!<br><br><strong><span style="text-decoration: underline;">Central Bank</span></strong><br><br>What about the role of the Reserve Bank and monetary policy settings?<br><br>Here's what central bank expert Sophia Rodrigues thinks:</div>
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<strong><span style="text-decoration: underline;">Long term focus</span></strong><br><br>Property owners would do well to retain a long term outlook rather than waste too much energy on short term dwelling price predictions, which are invariably a hit and miss affair at the best of times.</div>
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<div>As for the bubble/crash/correction calls which have continued over the past 15 years or so, Sydney median house prices now need to suffer an enormous correction - a gargantuan fall of $300,000 - even just to get back to where they were a couple of years ago in June 2013, let alone to actually correct from there. </div>
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<strong><span style="text-decoration: underline;">Market variances</span></strong><br><br>One thing that can be said with some certainty is that there will be significant variances across the Sydney property market.</div>
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<div>Outer suburban auction markets in Sydney have already turned in favour of buyers with clearance rates tanking fast in the west, south west, and north west sub-regions.<br><br>More stringent deposit requirements appear to be biting hard in the outer.<br><br>On the other hand clearance rates have remained relatively elevated for now in the eastern suburbs, the inner west, lower north shore, northern beaches, and the city &amp; inner south.<br><br>
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<div>Higher density markets will also almost certainly fare less happily than the metropolitan averages due to a looming stock overhang.</div>
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<span>In terms of other market drivers, Sydney presently has a vacancy rate of around 1.7% but with plenty of supply now in the pipeline, while the unemployment rate for Greater Sydney is only 5.1%.</span><br><br><span>Implied yields on cash rate futures contracts are pricing a 100% chance of an interest rate cut to just 1.75% by April 2016.</span><br><br><span>This morning's Building Activity data release will shed more light on dwelling commencements and completions around the states.</span><br><br><span>Expect to see both commencements and completions respectively at close to their highest ever levels.</span>
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<p><span><em>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>.</em><br></span></p>
<p><em>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>.</em></p>
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pwargent-M4siyDbqQY

October housing prices: Pete Wargent

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<p><span>According to the minutes of the Monetary Policy Meeting of the Reserve Bank Board,</span><span style="line-height: 1.3em;"> economic growth in Australia's major trading partners had remained close to its long-run average, although growth had eased a little in the June quarter.</span></p>
<p>The forecast for growth in 2015 and 2016 had been revised down slightly, but growth was expected to remain around its long-run average. The increase in global industrial production had slowed over the past year or so, particularly in the Asian region, and this had contributed to lower commodity prices. Members noted that, as a result, the forecast for Australia's terms of trade had been revised down since that presented at the May meeting. Globally, core inflation had been stable in year-ended terms over recent months at rates below the targets of most central banks. Monetary conditions had remained very accommodative.</p>
<p>In China, GDP growth had picked up in the June quarter to be 7 per cent in year-ended terms. However, growth in a range of other indicators of activity had moderated in the first half of 2015. The outlook for Chinese steel demand remained subdued. This had contributed to lower forecasts for iron ore prices, although they were expected to remain above levels seen earlier in the year. Members reviewed evidence that showed conditions in the residential property markets in China had improved further in recent months, but noted that this had not translated into a pick-up in residential property investment outside the largest cities. They observed that downside risks stemming from the weak property market and constraints on local government funding for infrastructure investment had receded somewhat, partly in response to policy measures designed to address these areas. The recent volatility in Chinese equity markets was not expected to have a significant direct effect on consumption, given the relatively limited direct exposure of households to equities.</p>
<p>Economic activity in Japan appeared to have been recovering gradually, but had yet to surpass the levels seen before the increase in the consumption tax in 2014. Nevertheless, the labour market remained relatively tight, wage growth had been higher than a year earlier and the Bank of Japan expected inflation to pick up to the 2 per cent target by around mid 2016. Across the rest of east Asia, output growth looked to have been below average in the June quarter, owing to weakness in both domestic demand and exports. In India, growth in industrial production had strengthened over the past year and a range of indicators pointed to further growth in investment.</p>
<p>In the United States, the economy had returned to moderate growth in the June quarter, following temporary weakness earlier in the year. Business investment was around average as a share of nominal GDP and recent indicators were consistent with above-trend growth in consumption in the period ahead. Members observed that lower oil prices should have a net positive effect on output growth in the United States, while recognising that the oil and gas sector had been adversely affected by the lower prices for its output and that households had saved some of the gains from lower fuel prices. Employment growth had strengthened in the June quarter and the unemployment rate had continued to trend lower, while wage growth had been surprisingly low and underlying inflation remained below the Federal Reserve's target.</p>
<p>The gradual recovery in the euro area had continued, supported by very accommodative monetary policy and low oil prices. Output growth appeared to have picked up in the first half of 2015 and unemployment rates in most countries continued to record modest falls. Members noted that there was considerable variation in outcomes across the euro area; sentiment had been rising in a number of countries but had declined in others, most notably Greece. Core inflation had stabilised in year-ended terms, but remained well below the target of the European Central Bank (ECB). Developments in Greece appeared to date to have had little effect on economic conditions or confidence in the region as a whole.</p>
<h3>Domestic Economic Conditions</h3>
<p>The Board's discussion of the domestic economy commenced with the observation that GDP growth over the next couple of years was expected to be slightly lower than forecast in May, although the revision was minor relative to the usual range of uncertainty. A downward revision to population growth had contributed to lower forecast growth in consumption and non-mining business investment. The forecasts for growth in public demand and business investment had been revised lower in light of new data. In contrast, the recent exchange rate depreciation had led to an upward revision to net exports. Aggregate growth was expected to remain moderate for a time before strengthening. Members recognised that the period of significant structural change for the Australian economy associated with the winding down of the mining investment boom would continue for some time.</p>
<p>Members noted that labour market conditions had been a little better than expected over the previous few months, although spare capacity still remained. The unemployment rate had been around 6 per cent in June, after having stabilised over the course of the past year, in contrast to earlier expectations that the unemployment rate would continue to drift higher. This stabilisation was consistent with both stronger-than-expected demand for labour and lower-than-expected population growth. Members discussed the role that low wage growth had played in the pick-up in the employment-to-population ratio over the past year. They noted that the ABS measure of firms' job vacancies was consistent with the unemployment rate remaining around current levels or even declining a little further in the months ahead. Other forward-looking indicators suggested moderate growth in employment in the near term.</p>
<p>The unemployment rate was expected to be a little lower than previously forecast, despite the revised growth profile, partly because the unemployment rate had been lower than expected in the June quarter, and partly because the revision to forecast aggregate demand had been broadly matched by a revision to forecast growth of the economy's productive capacity as a result of lower population growth. However, members noted that there would always be uncertainty about the balance between the growth of aggregate demand and supply.</p>
<p>Members noted that the key forces operating on the domestic economy had remained much as they had been for some time. Consumption growth had picked up a little since 2013 and the most recent data on retail sales and liaison information were consistent with the momentum in consumption growth being sustained. In addition, measures of consumer sentiment had remained around average levels. The forecast for consumption growth implied a further gradual decline in the saving ratio in an environment of continued low wage growth. The uncertainties around future consumption and saving decisions of households were discussed.</p>
<p>Housing market conditions had remained strong, supported by low interest rates. House price inflation continued to be strongest in Sydney and Melbourne, while price growth for apartments in these cities had been less rapid, consistent with increased construction of higher-density housing. Outside the two largest cities, housing price growth remained weak and prices had declined in some segments. Forward-looking indicators, such as building approvals and loan approvals for new dwellings, pointed to further strength in dwelling investment in coming quarters.</p>
<p>Housing credit growth had been stable over recent months at around 7 per cent on an annualised basis, while growth in credit to investors in housing had been steady at a bit above 10 per cent. Members noted that growth in credit to investors had been revised up as a result of a reclassification of one bank's loans, but that aggregate growth in housing credit had been unaffected. Members also noted that the Australian Prudential Regulation Authority (APRA) had announced an increase in the amount of regulatory capital the major banks and Macquarie Bank were required to hold for their residential mortgage exposures, to take effect in 2016. A number of banks had also announced increases in the standard variable rate for investor-related housing loans for new and existing borrowers of at least 25 basis points, and there had also been a tightening in lending conditions in this sector.</p>
<p>Non-mining business investment was expected to remain subdued for some time. Although little new information had been received since the previous meeting, survey measures of business conditions, confidence and capacity utilisation had been more positive. Members observed that survey measures of business conditions had been strongest for household and business services, which were also the sectors that had experienced the strongest employment growth over recent years. In contrast, business conditions and employment had been weaker in those sectors of the economy mainly involved in goods production and distribution. Members also noted that, on average, household services used significantly lower amounts of capital per worker than goods-related sectors and were not as well represented in the capital expenditure survey, which by itself implied a weaker forecast profile for non-mining business investment for 2015/16. Members acknowledged that there remained considerable uncertainty around the timing and strength of the recovery in non-mining business investment.</p>
<p>Export volumes appeared to have declined in the June quarter following a strong increase in the previous quarter. The weakness in resource exports partly reflected some temporary factors affecting coal and liquefied natural gas production, but a moderation in demand from China may have contributed to lower iron ore exports. Net service exports had made a strong contribution to output growth over the past year, supported by the earlier depreciation of the exchange rate.</p>
<p>Inflation in the June quarter had been broadly as expected and domestic inflationary pressures had remained well contained. The consumer price index had increased by 0.8 per cent in the June quarter (in seasonally adjusted terms) and by 1.5 per cent over the year. The quarterly outcome reflected a rebound in the price of fuel, although it was still around 10 per cent lower than a year earlier. The various measures suggested that underlying inflation was around ½ per cent in the June quarter and 2¼ per cent over the year.</p>
<p>Members noted that spare capacity in the labour market and the low growth of labour costs were reflected in low inflation for market services, while inflation in the cost of new dwellings had remained strong, particularly in Sydney. Domestic cost pressures were expected to remain contained over the forecast period. The prices of tradable items (excluding volatile items and tobacco) had declined modestly in the June quarter and over the preceding year. However, members observed that the recent depreciation of the Australian dollar would place further upward pressure on the final prices of tradable items over the next few years, which had led to a slight upward revision to the inflation forecast. Underlying inflation was expected to be around 2½ per cent over the forecast period, consistent with the inflation target.</p>
<h3>Financial Markets</h3>
<p>The Board's discussion of financial markets commenced with a focus on the US Federal Reserve's monetary policy. While policy was unchanged at the July meeting of the Federal Open Market Committee, recent commentary from Fed officials continued to suggest that policy tightening could start at the September meeting, whereas financial markets had only fully priced in a rate increase by December. Members noted that when the Fed actually delivered its first interest rate increase in nine years, there was likely to be a sizeable market impact notwithstanding how well telegraphed the change in policy had been. It was likely that financial market volatility would increase and the US dollar could appreciate further, including against the Australian dollar and a number of other currencies in Asia.</p>
<p>The US dollar had appreciated over the past month, particularly against the currencies of commodity exporters, including those of Australia as well as Canada and New Zealand, where the central banks had eased policy in July. The Australian dollar had depreciated by 5 per cent against the US dollar and by 4 per cent on a trade-weighted basis over the past month, taking the exchange rate to around its lowest level since 2009 on both measures. The New Zealand dollar had also depreciated sharply against the US dollar to a level that was around 15 per cent lower than in late April.</p>
<p>In sharp contrast, the Chinese renmimbi had continued to be little changed against the US dollar. Chinese international reserves had declined by around 7 per cent in recent quarters to help achieve stability against the US dollar in the face of an outflow of capital. Chinese equity markets remained volatile, despite measures introduced by the Chinese Government in early July that had steadied the Chinese equity market for a time. Large falls in Chinese equity prices had occurred again more recently, resulting in cumulative falls from recent peaks being back around 30 per cent, although equity prices remained 70 per cent higher than a year earlier.</p>
<p>Equity prices in the advanced economies had generally been little changed over the past month. This included the euro area, where equity prices had been more volatile but had recovered their earlier falls when Greece had moved closer to an agreement with its creditors. Australian equity prices had risen since the end of June.</p>
<p>Turning to developments in Greece, members noted that the Greek Government and its official sector creditors had reached an agreement to start negotiations on a new three-year bailout program. Much of the program would be used to refinance existing obligations as they fell due, as well as to recapitalise the Greek banks. The Eurogroup had arranged a €7 billion bridging loan to enable Greece to meet its short-term commitments, including clearing its arrears at the International Monetary Fund and repaying a maturing bond held by the ECB. Greek banks had reopened on 20 July following the ECB's decision to increase its emergency lending assistance, but capital controls remained in place.</p>
<p>Government bond yields in the major economies had mostly fallen over the past month, mainly fluctuating alongside market concerns about Greece. Bond yields in Australia had largely tracked those in the United States over the past month. With state issuance of bonds projected at modest levels, spreads and yields on state government debt remained low.</p>
<p>Australian financial market pricing indicated no likelihood of an easing of monetary policy at the present meeting.</p>
<h3>Considerations for Monetary Policy</h3>
<p>Global economic conditions were expected to continue to be supported by the lower level of oil prices and accommodative global financial conditions. Global industrial production growth had eased further this year, particularly in the Asian region, and this had contributed to lower commodity prices. Growth of Australia's major trading partners was expected to be around its long-run average over the next two years. Members observed that the downside risks to the outlook for Chinese growth identified over the past year had receded somewhat, although the Government's policy response to the recent volatility in Chinese equity markets had clouded the medium-term economic outlook. Uncertainties arising from the expected start of monetary policy tightening in the United States had moved into sharper focus.</p>
<p>Domestically, economic activity had generally been more positive over recent months. Very low interest rates were continuing to support strong growth in dwelling investment and consumption, and the further depreciation of the Australian dollar was expected to impart stimulus to the economy through stronger net exports. Although surveys of business investment intentions and non-residential building approvals suggested that non-mining business investment would remain subdued for some time, members noted that non-mining business profits had increased, business conditions were clearly above average and businesses had been hiring more labour, partly encouraged by very low wage growth. As a result, employment had risen as a share of the working age population and the unemployment rate had been relatively stable, in contrast to earlier expectations of a further increase. The recent data on inflation were largely as expected.</p>
<p>Members noted that output growth was expected to pick up gradually from its below-average pace over the past year to exceed 3 per cent in 2017. The forecast for the unemployment rate had been revised lower since the previous forecasts had been presented. The further depreciation of the Australian dollar had resulted in a slight upward revision to the forecast for inflation. Nonetheless, inflation was expected to remain consistent with the target over the forecast period given that domestic cost pressures were likely to remain well contained.</p>
<p>Credit was growing moderately overall, with growth in lending to the housing market broadly steady over recent months. House prices continued to rise strongly in Sydney and Melbourne, but trends had been more varied in a number of other cities. Members observed that recent responses by banks to the suite of measures implemented by APRA in respect of lending to investors in housing, including a tightening in lending conditions, would be expected to reduce the risks relating to the housing market, although it was too early to gauge their full effects.</p>
<p>Members noted that an accommodative monetary policy setting remained appropriate given the forecasts, while observing that the Australian economy had been adjusting to the shift in activity in the resources sector from the investment to the production phase. This shift had been accompanied by significant declines in key commodity prices and was being assisted by the depreciation of the exchange rate over recent months.</p>
<p>In light of these considerations, the Board judged that it was appropriate to leave the cash rate unchanged. New information about economic and financial conditions would continue to inform the Board's assessment of the outlook and determine whether the current stance of policy remained appropriate to foster sustainable growth and inflation consistent with target. </p>
<h3>The Decision</h3>
<p>The Board decided to leave the cash rate unchanged at 2.0 per cent.</p>
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