Leeka Group has gone down the path of bringing a heightened level of wellness to its recently unveiled Melbourne apartment development, Comme Prahran.

It isn't in the form of a suite of amenities, given the building is more boutique in nature with just 32 apartments, but with clever inclusions designed to uplift their residents lifestyle.

<a href="https://www.apartments.com.au/new-apartments/comme-prahran-182-194-commercial-road-prahran-vic-3181">Comme</a>, directly opposition the iconic Prahran Market on Commercial Road, has been designed by renowned architecture studio <a href="https://www.apartments.com.au/architects/cera-stribley-architects">Cera Stribley</a> and&nbsp;will introduce the first-of-its-kind multi-dimensional wellness offering, where physical, mental, social, environmental, and cultural well-being are embedded throughout.

“Prahran has long been a destination for culture, community and quality of life, and Comme builds on that in a deeply intentional way,” says Leeka Director, Chek Ming Cheng.&nbsp;

“This project introduces a new kind of urban sanctuary, one that adapts to individual definitions of wellness, whether that’s through nutrition, rest, movement, design or connection. Every space has been thoughtfully shaped to support the diverse rhythms of modern life."

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There will be a rooftop with a&nbsp;Zen garden designed by <a href="https://www.apartments.com.au/landscape-architect/plume-studio">Plume Landscape Architects</a>, offering&nbsp;a sensory experience that activates all five senses, an edible herb wall to taste, calming botanicals to smell, reflexology paths to feel, lush plantings to see and the gentle sounds of water and birdsong to hear.

Inside each residence, wellness is deeply personal, and Comme embraces this individuality with a suite of customisation options designed to enhance both health and lifestyle. Residents can tailor their homes with circadian lighting automation, supported by research linking it to improved well-being, better rest, and even longevity.&nbsp;

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Other add-ons residents can opt for include real-time air monitoring and purification systems, ensuring a cleaner, healthier environment, while blackout blinds help optimise sleep quality. Additionally, the option to include integrated smart home technologies and security measures with multiple controlled access points offers ease, convenience, and peace of mind, supporting day-to-day living and contributing to overall mental well-being.

Kitchens can be fitted with healthy cooking appliances such as steam ovens and taps for instant filtered, sparkling or hot water, while ensuites can be transformed into spa-style sanctuaries complete with steam showers, heated floors, rain heads, smart toilets, and sensor night lights to support restful sleep cycles. In the penthouse residence, further options include an outdoor spa for enhanced recovery and indulgence.

“Comme isn’t just about design, it’s about how space can support your day-to-day life," Chek added.

"Whether you like a steam shower, checking your indoor air quality, simply enjoying a quiet moment in the rooftop garden, or reflecting on the artworks in the building, wellness is part of your everyday routine, not an afterthought."

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The residences will feature open-plan layouts compliant with Better Apartment Design Standards (BADS), with floor-to-ceiling windows that maximise ventilation, natural light and thermal comfort. Finishes such as natural stones, timber flooring and low-VOC paints are complemented by facade design that filters dappled light and aids in thermal comfort.

Cera Stribley, Co-Founder, Domenic Cerantonio, said the first thing you notice is the light.

"Natural light floods the living spaces, casting a soft glow that instantly lifts your spirits. It's as if the outside world melts away, and you're cocooned in a peaceful oasis."

The gallery-style residential lobby will feature circadian-inspired lighting and artwork, while the ground-floor will offer retail and hospitality spaces.

The building’s mixed-use design fosters connection, with ground-floor retail and hospitality creating a vibrant, welcoming destination. These spaces are thoughtfully designed to enhance the precinct and bring it to life.

&nbsp;

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Sustainability and environmental responsibility are integral to Comme Prahran’s DNA. All homes are gas-free and designed to a 7-star energy average, with double glazing, WELS-rated plumbing, and EV charging capabilities available. A light-coloured exterior has been chosen to minimise heat absorption, supporting thermal efficiency and reducing reliance on artificial cooling.

Honouring the cultural richness of Prahran, the project reimagines an Edwardian-era landmark, integrating its historic character into a contemporary architectural form. Art experiences will activate the residential and retail lobbies, and a dedicated artwork on the external eastern facade will enrich the building’s street presence, embedding it into the creative fabric of the neighbourhood.

&nbsp;

[smartcode_project_cta:default project_id=108413]

Joel Robinson

Comme Prahran launches opposite Prahran Market

Apartment developer Third.i has seen "overwhelming interest" in its recently unveiled new harbourside apartment project, The Rushcutters.

<a href="https://www.apartments.com.au/new-apartments/the-rushcutters-51-57-bayswater-road-rushcutters-bay-nsw-2011">The Rushcutters</a>, which is being delivered in partnership with James Packer's NPACT, will comprise just 13 luxury two- and three-bedroom apartments.&nbsp;

Demand is predominantly coming from local downsizers.

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“We’ve been absolutely blown away by the level of interest in The Rushcutters,” said Luke Berry, Director and Co-founder Third.i Group.

“It’s clear that buyers are seeking more than just a place to live, they’re looking for a lifestyle upgrade. The ability to amalgamate apartments into expansive, whole-floor homes is a game-changer for downsizers who want space without the maintenance of a traditional house.”

The Rubinstein Group is marketing the project alongside Hume Residential and JLL.

“It’s no surprise that if you’re downsizing from a five-bedroom house in Bellevue Hill, for example, you want to maintain that sense of space and luxury when looking for your next home, "&nbsp;Gavin Rubinstein, Founder of The Rubinstein Group, said.

“The Rushcutters is a great fit. Amalgamating apartments to create a bespoke, whole-floor home is a natural progression for buyers who aren’t willing to compromise on size and/or quality.”

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Amalgamating apartments has become a common theme among high-end buyers across Third.i's portfolio including Muse in Potts Point, and Elevate Hume Place in Crows Nest, which set a Lower North Shore apartment record with the $15.1 million sale of an amalgamation of a penthouse and sub-penthouse.

“We’re witnessing a clear shift towards more amalgamations in a number of our projects across Sydney,” said Jason Fraser, Principal at Woods Bagot.

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“The ability to combine apartments is enabling buyers to create truly unique, house-sized residences with high-end finishes, and proximity to vibrant urban precincts. The desire to amalgamate apartments to bespoke, house-sized residences is becoming a defining feature of Sydney’s evolving luxury apartment market."

Due to the City of Sydney’s no net dwelling loss policy, Thirdi is only able to offer one level for amalgamation at The Rushcutters, combining two apartments into a single, expansive residence.

[smartcode_project_cta:default project_id=144646]

The Rushcutters a "great fit" for downsizers

Lower North Shore developer <a href="https://www.apartments.com.au/developers/abadeen-group">Abadeen</a> has secured development approval for its ultra-luxury residential project on the <a href="https://www.apartments.com.au/new-apartments/34-burran-avenue-mosman-nsw-2088">dress circle Burran Avenue</a>.

The project, just&nbsp;50 metres from Balmoral Beach within Mosman’s prestigious Golden Triangle, will commence construction in early 2026,&nbsp;following the successful completion of its nearby Hampden Mosman project.

Lodged in April 2025 and approved in September 2025, the development will comprise three whole-floor residences, each designed to capture panoramic harbour views through Sydney Heads.

<img alt="34 Burran Avenue, Mosman" data-entity-type="file" data-entity-uuid="7f4c7816-0ac8-4ef7-be0a-8ef23b693b68" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/BURRAN%20EV01%20R04%20option%201%20%281%29.jpg?VersionId=gVzI8pT6_K59Nhzaz0FLEvY6Kj9Kc8Fg" />

Set on an elevated 550 sqm corner site at the junction of Burran Avenue and Stanton Road, the building has been designed to sit within Balmoral’s natural slope. The façade mixes stone and metal cladding with angular forms, while oversized terraces and full-height sliding doors create a connection between interior living spaces and outdoor entertaining areas.

The delivery team from Abadeen’s Hampden Mosman project, which includes construction company Reform Projects and interiors company Mathieson, has been retained to bring the same level of execution and craftsmanship to Burran Avenue.

<a href="https://www.apartments.com.au/architects/platform-architects">Platform Architects</a> has been appointed project architect, bringing extensive experience from recent luxury residential projects in Manly, Fairlight and Freshwater.

&nbsp;

Justin Brown, Executive Chairman and Founder of Abadeen, said sites of this calibre, this close to Balmoral, are incredibly rare.

“Burran Avenue is an extraordinary site; its location, its scale and its outlook make it truly one of a kind. Receiving DA approval marks an exciting milestone for Abadeen."

"We’re proud to be moving forward with an exceptional team to deliver a project that will set a new standard for ultra-luxury living on Sydney’s Lower North Shore. Construction is planned to commence in early 2026, and interest is already strong from discerning local buyers who recognise the uniqueness of this address."

Brown anticipates prices will set new Mosman benchmarks above $20 million. Sales are expected to launch in March 2026.

Abadeen approved for Mosman's priciest apartments

Lifestyle developer <a href="https://www.apartments.com.au/developers/gurner">GURNER™ Group</a>, in partnership with Costa Property Group, has announced plans to reimagine Cunningham Pier in Geelong, one of Victoria's most recognisable heritage landmarks.

The announcement follows the City of Greater Geelong’s release of its Draft Geelong Waterfront Master Plan, which seeks to revitalise the waterfront with new energy, tourism, and investment. GURNER and Costa Property Group’s vision aligns with the Council’s ambitions to create a vibrant, connected, and economically powerful precinct for the community.&nbsp;

The future of Cunningham Pier will draw inspiration from Sydney Harbour’s luxury waterfront residences through to Dubai’s sculptural pier-edge towers, blending architectural excellence with &nbsp;resort-style living, hospitality, and public amenity.&nbsp;

The concept, described as “Saint Moritz on the Sea”, is envisioned to include:&nbsp;

<ul>
	<li>Six-star hotel accommodation and services&nbsp;</li>
	<li>World-class restaurants, bars, and public spaces&nbsp;</li>
	<li>High-end residential offerings&nbsp;</li>
	<li>Entertainment and cultural venues&nbsp;</li>
	<li>Potential cruise ship port facilities, integrating Geelong into the global travel network&nbsp;</li>
</ul>

The transformative project aims to become a magnet for tourism, investment, and innovation, while &nbsp;ensuring continued public access and connection to Corio Bay’s pristine waterfront.&nbsp;

Cunningham Pier has been operated by Costa Property Group for more than 15 years, with the City of Greater Geelong expressing strong support for strategic commercial partnerships that unlock &nbsp;tourism-led economic development for the region’s fast-growing population.&nbsp;

Tim Gurner, Founder &amp; Executive Chairman, GURNER™ Group, said the project is a "once-in-a-generation opportunity to put Geelong on the global map," adding that their version will be of what icons like the Opera House, Story Bridge or Empire State Building have done for other great cities.

“We’ll be working hand-in-hand with the Mayor, Council, the local community, and State Government to deliver something truly iconic that positions Geelong on the world stage. This project brings together everything we’ve built our brand on – world-class design, hospitality, &nbsp;lifestyle, and experience – all in one place. From six-star hotels and restaurants to the possibility of a &nbsp;new cruise ship terminal and luxury residences, the vision is extraordinary.”&nbsp;

City of Greater Geelong&nbsp;Mayor Stretch Kontelj said he welcomes the "bold and inspiring vision reimagining our beloved Cunnigham Pier as a global destination."

"This ambitious plan and the opening of Nyaal Banyul Geelong Convention and Event Centre next year have the potential to take our already world-class waterfront to even greater heights.”

Sydney Harbour, Dubai pier towers, to influence Gurner's Cunningham Pier, Geelong development

<a href="https://www.apartments.com.au/architects/bates-smart">Bates Smart</a> is one of Melbourne's longest standing architecture firms.

Founded in Melbourne in 1853 by Joseph Reed, the firm began as Reed &amp; Barnes and has evolved through various partnerships before adopting the Bates Smart name in the 20th century. With a continuous presence spanning more than 170 years, the practice has played a pivotal role in shaping Melbourne’s architectural identity.

In the 19th century, Bates Smart designed several of Melbourne’s enduring landmarks, including the Royal Exhibition Building (1880), a UNESCO World Heritage site, and the Melbourne Town Hall. The firm’s influence continued into the 20th century with notable works such as Ici House (1958), considered Melbourne’s first modern skyscraper and a milestone in post-war Australian architecture.

One of their landmark designs was&nbsp;The First Church of Christ, Scientist, at 336-340 St Kilda Road. The building, which is listed on the Victorian Heritage Register, was designed by Bates, Peeble and Smart with construction completed in 1922. Architecturally, the building is significant as a rare example of early twentieth century classicism applied to a religious building. Historically, the building is significant as the first church of the Christian Science movement.

Melbourne developer Time &amp; Place decided to bring Bates Smart back to the area to design their next residential apartment project, Park Modern.

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<a href="https://www.urban.com.au/new-apartments/park-modern-south-melbourne-1-middleton-lane-south-melbourne-vic-3205">Park Modern</a>, on one of the largest island sites on the Melbourne CBD fringe, bordered by Dorcas Street, Wells Street, and Middleton Lane, will comprise two sculptural towers. It is being positioned as a design-forward response to evolving owner-occupier preferences in the Domain precinct.

Tim Price, Director at <a href="https://www.apartments.com.au/developers/time-place">Time &amp; Place</a>, says&nbsp;Bates Smart have got a footprint on this city, probably like no other architect.

"It’s a really nice kind of next chapter story, that they created from a design perspective so long ago," Price told Apartments.com.au.

Park Modern will be the third time Time &amp; Place has worked with Bates Smart, having successfully designed and delivered Collins House and Opera on St Kilda Road together.

The brief focused on creating a built form that would feel contextually appropriate while offering a contemporary evolution of inner-city apartment living.

[smartcode_project:default project_id=138453 project_image_fid=2137]

The focus for Park Modern is squarely on owner-occupiers.

“It’s not always about downsizing," Price says.

"Sometimes it’s just about creating a space which is easily maintained, lock up and leave, reflecting people’s aspirations, whether they’re entertainers, big dining room spaces, big open terraces, they’re important parts of any design consideration.”

The building includes a mix of one, two and three-bedroom apartments, as well as penthouses, with layouts and floor plans designed to suit a broad demographic. The architecture has been shaped to capture&nbsp;view corridors to the Botanic Gardens, Port Phillip Bay and the CBD skyline.

Each apartment has been oriented to maximise natural light and provide a clear outlook, elements often cited by owner-occupiers as key criteria.

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Rather than defaulting to a generic luxury offering, the amenity strategy at Park Modern reflects specific insights into how residents want to live. The ground floor will include co-working areas, wellness facilities, and a concierge-led lobby that blends indoor and outdoor design cues.

“Wellness has become a more thoughtful consideration, not just gyms or lap pools, but things like magnesium plunge pools, saunas, daybeds, and studio spaces for Pilates and the regular cardio workout,” says Price.

One notable inclusion is a substantial porte-cochère, a covered vehicle drop-off zone integrated into the site plan. It’s a feature rarely seen in inner-urban developments and speaks to the team’s emphasis on ease of arrival and departure for residents and guests.

A display suite for Park Modern is now open by appointment, giving prospective buyers an early look at the project.

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100 years on, Bates Smart returns to South Melbourne's Domain Precinct to design Park Modern

Housing Boom

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There's no slowing down property prices all across the nation, with data house CoreLogic reporting prices nationally jumped 2.8 per cent over March, the highest increase since October 1988.

It was also the first time in 12 months that capital city values outpaced the regional markets, music to the ears of the departed investor market who will be monitoring price levels.

CoreLogic's head of research Tim Lawless says they expect housing values to continue to rise throughout 2021 and well in to next year, but it is reasonable to expect the pace of growth will slow.

Sydney led the way over March, with dwelling values jumping 3.7 per cent to be 6.7 per cent up over the quarter. The last time Sydney posted such strong quarterly gains was in June/July 2015, before a rapid slow in growth when limits on investors kicked in to slow the market, which isn't a stumbling block in the current property climate.

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The Harbour City was only bettered by Hobart's strong 7.6 per cent quarterly gains after dwelling growth of 3.3 per cent over March.

Canberra saw the third best dwelling value growth across the capitals, up 2.8 per cent, followed by Melbourne and Brisbane who both saw 2.4 per cent gains. Darwin posted 2.3 per cent growth.

Adelaide (+1.5 per cent) and Perth (+1.8 per cent), trailed the pack.

 

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"As the housing market hits record high values, speculation is mounting as to what will trigger the next downswing phase of the cycle", Lawless says.

"The upswing in buyer demand has not been met with the same level of increase in inventory," Lawless says.

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"This has resulted in strong selling conditions, amidst a palpable sense of urgency amongst buyers, putting upwards pressure on housing prices."

Lawless suggested the substantially less fiscal support will likely contribute to a tapering of demand, as will the prospect of tighter credit policies, however APRA says lending standards remain healthy enough to keep any credit intervention at bay for now.

Houses v Units

Houses continued to outstrip units for price growth in most capitals, however units are now steadily back on the upswing.

“Despite the underperformance, unit markets have turned a corner, with Sydney recording two consecutive months of rising values, while the Melbourne unit market has seen values consistently rising since October last year, with the trend accelerating over recent months," Lawless says.

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Sydney houses jumped 4.3 per cent over March to be 8.2 per cent higher over the first quarter of the year. Units still saw strong growth, up 2.1 per cent over March to be 3.2 per cent up over the quarter.

Melbourne units were close behind, posting 1.7 per cent gains over March and three per cent over the quarter. Houses were up 2.6 per cent in March and 5.6 per cent over the quarter.

The only areas where units outperformed houses was in Hobart and Darwin. Hobart units were up 4.9 per cent, the best performance of any market across March, while houses rose three per cent.
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Sydney led the way over March, with dwelling values jumping 3.7 per cent to be 6.7 per cent up over the quarter

When will the property boom slow down? Property prices see highest monthly gains in 32 years

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The Reserve Bank could seek tightened lending standards if the current record low interest rates triggers a housing boom, according to a RBA document obtained by Nine Entertainment.

While not the official position of the central bank, the research paper found low interest rates, along with the RBA's quantitative easing program, were supporting assets including the prices of houses.

It noted higher asset prices could translate into increased spending by "credit-constrained households".

"Housing prices are likely to (increase) alongside other asset prices," it suggested.

The research paper noted loan-to-valuation ratios were increasing but were still well below the levels that prompted APRA to tighten lending standards progressively from 2015.

It raised the spectre of borrowers "likely to be in negative equity".

The paper said the Council of Financial Regulators (CFR) - the RBA, APRA, the federal Treasury and the Australian Securities and Investments Commission - would intercede if required.

"Australia’s financial regulators will monitor and control risks," the paper noted.

"CFR will act if needed."

The document obtained under Freedom of Information date back to late November considerations by the RBA.

The paper cites previous research by RBA economists that a permanent percentage point reduction in official interest rates can drive up real house prices by 30 per cent over a three-year period. 

A "temporary" percentage point reduction would push up real prices by 10 per cent.

The central bank has cut official interest rates by 1.15 percentage points since last June.
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The document obtained under Freedom of Information date back to late November considerations by the RBA.

jchancellor

Reserve Bank may seek tightened lending standards if record low interest rates triggers housing boom

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<div id="post-body-2519359441485115611" class="post-body entry-content">
<div>Given the weak state of other sectors of the economy, the Retail Trade figures for the month and the June quarter took on an added significance.</div>
<div> </div>
<div>In this context, especially given soft wages and slowing population growth, the June data was happily very good.</div>
<div> </div>
<div>In seasonally adjusted terms retail turnover was up by 0.7 per cent for the month leading to a strong annual result to June 2015 as charted below.</div>
<div> </div>
<div><a href="https://2.bp.blogspot.com/-rivhiKoFaUo/VcHqnRk1RpI/AAAAAAAAXXg/LMg9AYRe9MU/s1600/RT1.jpg" target="_blank">Click to enlarge</a></div>
 <div class="separator"><a href="https://2.bp.blogspot.com/-rivhiKoFaUo/VcHqnRk1RpI/AAAAAAAAXXg/LMg9AYRe9MU/s1600/RT1.jpg"><img src="https://2.bp.blogspot.com/-rivhiKoFaUo/VcHqnRk1RpI/AAAAAAAAXXg/LMg9AYRe9MU/s640/RT1.jpg" width="640" height="272"></a></div>
 State versus state <div>At the state level the impact of Sydney's housing boom and to a lesser extent that of Melbourne is evident with retail turnover rising very strongly in New South Wales and Victoria.</div>
<div> </div>
<div><a href="https://4.bp.blogspot.com/-shpWGnWcZqo/VcHqoDxbUTI/AAAAAAAAXXw/BQGk6eE1D-Q/s1600/rt2.jpg" target="_blank">Click to enlarge</a></div>
 <div class="separator"><a href="https://4.bp.blogspot.com/-shpWGnWcZqo/VcHqoDxbUTI/AAAAAAAAXXw/BQGk6eE1D-Q/s1600/rt2.jpg"><img src="https://4.bp.blogspot.com/-shpWGnWcZqo/VcHqoDxbUTI/AAAAAAAAXXw/BQGk6eE1D-Q/s640/rt2.jpg" width="640" height="270"></a></div>
 <div>Perhaps more surprisingly, in turnover terms retail appears to have fired up a little elsewhere too, particularly in South Australia. </div>
<div> </div>
<div><a href="https://2.bp.blogspot.com/-KN4Bjh9HqmY/VcHqoHUFBvI/AAAAAAAAXXs/GoRQd1PsoJk/s1600/rt3.jpg" target="_blank">Click to enlarge</a></div>
 <div class="separator"><a href="https://2.bp.blogspot.com/-KN4Bjh9HqmY/VcHqoHUFBvI/AAAAAAAAXXs/GoRQd1PsoJk/s1600/rt3.jpg"><img src="https://2.bp.blogspot.com/-KN4Bjh9HqmY/VcHqoHUFBvI/AAAAAAAAXXs/GoRQd1PsoJk/s640/rt3.jpg" width="640" height="272"></a></div>
<div class="separator"> </div>
Industry groups <div class="separator"> </div>
<div class="separator">It has been a relatively poor time for department stores retailing, perhaps reflective of increasing demand in the online shopping space.</div>
<div class="separator"> </div>
<div class="separator">The big winner over the past year has been household goods with retail turnover pumped up by the housing prices and construction boom.</div>
<div class="separator"> </div>
<div class="separator"><a href="https://3.bp.blogspot.com/-GEggBGfpMgY/VcHqnWJRVaI/AAAAAAAAXXc/wTRwGxQsAHg/s1600/Rt5.jpg" target="_blank">Click to enlarge</a></div>
 <div class="separator"><a href="https://3.bp.blogspot.com/-GEggBGfpMgY/VcHqnWJRVaI/AAAAAAAAXXc/wTRwGxQsAHg/s1600/Rt5.jpg"><img src="https://3.bp.blogspot.com/-GEggBGfpMgY/VcHqnWJRVaI/AAAAAAAAXXc/wTRwGxQsAHg/s640/Rt5.jpg" width="640" height="270"></a></div>
 <div>
Cafés, restaurants and takeaway expenditure has also continued to rise relentlessly over the past year, a trend which has been ongoing over the past decade, another shift which feeds off increased apartment dwelling.</div>
</div>
<div class="post-body entry-content"> </div>
<div class="post-body entry-content"><a href="https://2.bp.blogspot.com/-YJLrK-Q2toQ/VcHqnU2X9ZI/AAAAAAAAXXk/X8z5SQvVElQ/s1600/Rt6.jpg" target="_blank">Click to enlarge</a></div>
<div class="post-body entry-content">
 <div class="separator"><a href="https://2.bp.blogspot.com/-YJLrK-Q2toQ/VcHqnU2X9ZI/AAAAAAAAXXk/X8z5SQvVElQ/s1600/Rt6.jpg"><img src="https://2.bp.blogspot.com/-YJLrK-Q2toQ/VcHqnU2X9ZI/AAAAAAAAXXk/X8z5SQvVElQ/s640/Rt6.jpg" width="640" height="280"></a></div>
 National accounts for Q2 <div>With June being the last month of the second quarter we also got the turnover figures reported in volume terms, which threw out an excellent result.</div>
 <div>Retail volumes doubled market expectations to be up by 0.8 per cent for the quarter and 3.6 per cent for the year. </div>
<div> </div>
<div><a href="https://1.bp.blogspot.com/-1ZDz1D5_n4Q/VcHqoYIc3SI/AAAAAAAAXX0/4srRCHtdALo/s1600/rt4.jpg" target="_blank">Click to enlarge</a></div>
 <a href="https://1.bp.blogspot.com/-1ZDz1D5_n4Q/VcHqoYIc3SI/AAAAAAAAXX0/4srRCHtdALo/s1600/rt4.jpg"><img src="https://1.bp.blogspot.com/-1ZDz1D5_n4Q/VcHqoYIc3SI/AAAAAAAAXX0/4srRCHtdALo/s640/rt4.jpg" width="640" height="286"></a> <div>I used to do a chart here on quarterly volumes at the state level, but to be frank it's a Sunday morning and believe it or not I actually have better things to do!</div>
<div> </div>
<div>Suffice to say that New South Wales (+4.6 per cent) and Victoria (+4.4 per cent) have been the retail trade linchpins over the year to June 2015.</div>
 This is a very notable result given that net exports (which have contributed significantly to GDP over the past year) will evidently not been doing so in the second quarter. I looked at how Australia racked up a record trade deficit for the second quarter in a little more detail here. The wrap <div> </div>
<div>Overall this was a really good result for retail trade in the second quarter.</div>
<div> </div>
<div>And although the retail trade data is not necessarily representative of all household consumption this suggests that GDP for the second quarter will be held up by the strong capital city economies.</div>
<div> </div>
<div>Lately various surveys have hinted at gradually improving business conditions and confidence - and jobs growth has been strong over the past year at +233,600, particularly so in Sydney.</div>
<div> </div>
<div>On the other hand capital expenditure surveys have pointed towards very weak business investment.</div>
<div>
 In that context, it is important that household consumption continues to produce sound results.</div>
<div> </div>
<div>The other contributor to a surprisingly upbeat GDP print in the first quarter (ex-inventories) was that of new housing, with the dwelling construction boom expected to continue over the next couple of years.</div>
<div> </div>
<div><a href="https://3.bp.blogspot.com/-y0n0iSGst2w/VW7aRC8nfwI/AAAAAAAAV1A/jrn7C21AbNY/s640/gdp6.jpg" target="_blank">Click to enlarge</a></div>
<div> </div>
<div><img src="https://3.bp.blogspot.com/-y0n0iSGst2w/VW7aRC8nfwI/AAAAAAAAV1A/jrn7C21AbNY/s640/gdp6.jpg" width="640" height="275"></div>
<div> </div>
<div> </div>
<div>
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>.
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pwargent-M4siyDbqQY

Housing construction helps retail remain robust: Pete Wargent

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Research on price growth over time often contradics long-held beliefs about where you get the best growth.
Information put together recently by PIPA found that Hobart had achieved the highest percentage growth in house prices among the capital cities over the past 15 years, while Sydney had recorded the lowest growth.
There are similarly surprising outcomes from publication by CoreLogic of the growth in various jurisdictions across Australia in the four most recent five-year periods.
One of the things this shows is that, overall, the past five years have been quite tame for growth in house prices.
Media has often referred in the past few years to an unprecedented national property boom, but I have maintained that we have not had a national boom and the growth recorded in the places with strong markets, such as Sydney and Melbourne, has been far from unprecedented.
These CoreLogic figures would tend to confirm that. They examine the five-year periods up to January in each of 2003, 2008, 2013 and 2018.
In terms of national average price growth, the five-year period to January 2003 was the most prolific, by a considerable margin. Values (national average) grew 62 percent in the five years to 2003, while in the five years to January 2018 the growth was just 38 percent. The five-year period up to 2008 (national rise of 44 percent) was also higher than the most recent period.
There were all kinds of regional differences within each of those five-year periods, reinforcing once again that we do not have a single national market, but many different local markets.
In the five years up to 2003, which was the last time we had a genuine national property boom, the combined capitals grew 64 percent and the combined rest of state (the regional areas) rose 54 percent. But the leading jurisdiction in the nation for that period was Regional NSW, which rose 84 percent, followed by Canberra (up 79 percent) and Regional Victoria (up 66 percent).
Five of the capital cities grew more than 55 percent in that period, while Perth rose 46 percent and Hobart was up 38 percent. Everywhere in Australia, both city and regional, showed some kind of meaningful growth.
In the five years to 2008, regional areas were dominant, with the combined regional areas up 53 percent while the capital cities increased only 42 percent.
This was a period when Western Australia was the leading market in the nation, with Regional WA up 121 percent in five years - mostly resources centres like Port Hedland and Karratha, as well as lifestyle towns like Mandurah, recording extraordinary growth. The Perth market rose 102 percent in that period.
That was also the time frame in which Tasmania caught the boom wave from the mainland (rather similar to Tasmania right now), with Hobart (up 75 percent) the No.2 city for growth after Perth, while Regional Tasmania grew 89 percent. 
The regional areas of Queensland and the Northern Territory also had substantial price rises in that five-year period.
Meanwhile, in those five years to 2008, Sydney rose only 12 percent. It was mediocre also during the next five-year period, up to 2013, growing just 9 percent over five years. This is why Sydney ranked eighth and last among the capital cities in the 15-year capital growth figures published by PIPA.
Overall, that five-year period up to 2013 was the weakest nationally in recent times. The only place that showed much uplift during that time was the Northern Territory, with Darwin up 32 percent and Regional NT up 38 percent.
At that time, prices were going backwards in Brisbane, Perth, Hobart and a number of regional areas.
Then, in the most recent five-year stanza, Sydney rose 64 percent and Melbourne 56 percent. To put into perspective, remember that leading markets in the five years to 2008 grew more than 100 percent and the national leaders in the five years to 2003 increased 79-84 percent.
The only other places to show much uplift in the past five years were Regional NSW (up 38 percent) and Hobart, which started to show the beginnings of its current boom 12-18 months ago.
In this latest five years, prices went backwards in Perth and Regional WA, as well as in Darwin (whicb dropped 20 percent ) and Regional NT.
Overall, the figures confirm that we have many different markets in Australia and that, at any given point in time, they are not all moving in the same direction or at the same speed.
And that, contrary to popular belief, the major cities do not always out-perform the smaller cities or the regional areas. 
Terry Ryder is the founder of hotspotting.com.au
<a href="https://mailto:ryder@hotspotting.com.au">ryder@hotspotting.com.au</a>
twitter.com/hotspotting
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terryryder-YECXbqmri2

Five year periods actually show tame house price growth: Terry Ryder

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Fitch Ratings does not expect a "sharp or subdued" correction in the housing market because economic growth and unemployment will remain "benign."
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Fitch forecasts 2.7 per cent economic growth, 5.5 per cent unemployment and reliance on commodity exports as a possible source of volatility.
"High residential property prices and borrower indebtedness could also cause economic stress," the report concludes.
As part of a housing "stress test", the global credit rating agency recently calculated that the big four would suffer $24 billion in losses if house prices fell 43 per cent and defaults hit 13 per cent.
However, recoveries from lenders' mortgage insurers would cut the loss to about $19 billion.
It suggested the $1.3 trillion mortgage books of Australia's big four banks could withstand an Ireland-style correction in property prices but the lenders' ability to deal with second-order impacts remained uncertain.
"CBA would experience the largest losses under our analysis, followed by Westpac, reflecting these banks' larger exposures to Australian mortgages than ANZ and NAB," the agency said.
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Fitch's forecast for Australian economic growth came as the Reserve Bank of Australia warned that high domestic debt makes households more sensitive to changes in income and interest rates.
It estimated households should be able to afford a mortgage rate "well more than 2 per cent higher than it is currently".
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The most probable source of an economic shock would be external, Fitch suggests.
"A rapid increase in the unemployment rate remains the most likely driver of a significant housing market correction, although sharply higher interest rates would also pressure some borrowers – given the level of household debt."
The agency said another risk was the rollover of $480 billion of interest-only loans over the next three years.
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<div>Fitch foresees a further tightening of underwriting standards, given the increased scrutiny of the Hayne royal commission, which could affect the housing market. </div>
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"This will probably result in a further decline in the maximum amount many borrowers can obtain from a bank, and could have an adverse impact on house prices as a result."
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j.ballantyne1990-6AQqhLzZaK

Fitch doesn't expect sharp property correction

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<h1>Richard Holden, UNSW</h1>
Vital Signs is a weekly economic wrap from UNSW economics professor and Harvard PhD Richard Holden (@profholden). Vital Signs aims to contextualise weekly economic events and cut through the noise of the data affecting global economies.
This week: the housing market is still cooling, but not disastrously so, consumers remain optimistic, but business is cautious, and all eyes will soon turn to Christmas retail sales.
<hr>
Since housing is the main thing that Australians seem to talk about (even when the Ashes is on), let’s start with that.
The ABS <a href="https://www.propertyobserver.com.au/http://www.abs.gov.au/ausstats/abs@.nsf/mf/6416.0" target="_blank">residential house price index</a> for the September quarter showed a small decline Australia wide, with prices falling 0.2%. Sydney prices were down 1.4%, while Melbourne was still up 1.1%.
This was, as we are now used to, met with press commentary about how the <a href="https://www.propertyobserver.com.au/http://www.abc.net.au/news/2017-12-12/house-prices-off-the-boil-will-population-keep-things-simmering/9250146" target="_blank">housing boom is well-and-truly over</a>, and with various other shrieks of angst. Really? Melbourne just didn’t grow as fast is it did before. And Sydney, though down 1.4% on the quarter, is still up a whopping 9.4% over the past 12 months.
On one level, the reaction makes no sense at all. On another, as I wrote <a href="https://theconversation.com/vital-signs-the-spooky-mortgage-risk-signs-our-bankers-are-ignoring-85591" target="_blank" style="font-size: 12.16px;">in a previous column</a>, the implications of even modest falls could be large, given how residential lending is structured. If Australia’s banks are lending people a massive chunk of their disposable income, marking-to-market on a regular basis and issuing a lot of interest-only loans, then even small falls can have big effects on household spending and even defaults. And. They. Are.
The Westpac consumer sentiment index came in stronger than expected, rising 3.6% in December to 103.3 points (recall 100 in these indices is the breakeven between optimists and pessimists). Westpac’s chief economist Bill Evans said:
This is a surprisingly strong result and confirms the lift we have seen in the index over the last three months.
This contrasted with the news on business confidence. The <a href="https://business.nab.com.au/wp-content/uploads/2017/12/201711-nab-business-survey.pdf" target="_blank">NAB Monthly Business Survey</a> business conditions index dropped 9 points. This still left it at +12, however, which is above the long-run average of +5 index points. Moreover, it appeared that some of the business concern was about wages edging higher, which would be a good thing for workers and the economy more generally.
As I have said in Vital Signs many times, sluggish wage growth has been a persistent problem among advanced economies, and Australia is no exception. Even early signs of an increase bode well for the economy more broadly – and business will ultimately benefit from that. But these are very early signs.
Unemployment in Australia remained stubbornly high at 5.4% in November. A large 61,600 jobs were created, but the labour force participation rate rose to 65.5%, leaving the overall unemployment rate unchanged. It will be important to see in coming months if that pace of job creation can be maintained – for that is a prerequisite for a genuine drop in unemployment.
Thursday morning Australian time, the US Federal Reserve raised interest rates for the third time this year, bringing the target Fed Funds Rate to the 1.25-1.50% band.
The Fed also suggested in <a href="https://www.federalreserve.gov/newsevents/pressreleases/monetary20171213a.htm" target="_blank">its statement</a> that we can expect further, gradual rises, in 2018, saying:
The Committee expects that economic conditions will evolve in a manner that will warrant gradual increases in the federal funds rate; the federal funds rate is likely to remain, for some time, below levels that are expected to prevail in the longer run.
Most market participants interpret this as meaning we can expected three 25 basis point hikes next year.
As has been the case for some time now, the recovery in the US looks to be self-sustaining and robust. In Australia, we continue to see very mixed signals across different aspects of the economic map.
The housing market looms as a huge potential problem, with regulators only taking action relatively recently to begin to rein in the extravagant lending of a decade or more. And pretty modest action at that.
<img src="https://counter.theconversation.com/content/89144/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1">The next major thing to watch for in Australia is the all-important holiday season retail sales figures. And, as ever, the housing market.
<a href="https://theconversation.com/profiles/richard-holden-118107" target="_blank">Richard Holden</a>, Professor of Economics and PLuS Alliance Fellow, <a href="http://theconversation.com/institutions/unsw-1414" target="_blank">UNSW</a>
This article was originally published on <a href="http://theconversation.com" target="_blank">The Conversation</a>. Read the <a href="https://theconversation.com/vital-signs-australia-heads-into-2018-with-mixed-economic-signals-89144" target="_blank">original article</a>.
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Australia heads into 2018 with mixed economic signals

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Australia's housing boom has cooled after five years of expansion. Sydney housing prices have stopped rising and price growth is slowing in Melbourne. The housing construction boom is past its peak. Thankfully, this is arriving just as the drag from falling mining investment and commodity prices is coming to its end.
 Importantly, the mining decline was much bigger, so the net effect should still be growth-positive. We see any negative 'wealth effect' from the end of housing boom as negligible. We see growth lifting in 2018 and expect it to be more broad-based across industries and regions than it has been in at least a decade.
Australia's housing boom has helped to fill the gap left by falling mining investment over the past five years, as the economy has needed to rebalance. Now, the housing boom is coming to its end (Chart 1). House prices have levelled out in Sydney since April and house price growth has slowed in Melbourne. The housing construction boom is also past its peak. Dwelling investment has already levelled out and is set to be a drag on overall growth from the second half of 2018, as the pipeline of apartment construction is completed.
Click here <a href="https://www.propertyobserver.com.au/images/2017/11/20/Figure1.jpg" target="_blank">to enlarge</a>. 
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/11/20/Figure1.jpg" alt="">
Thankfully, the fall in dwelling investment is arriving just as the mining investment drag is coming to its end and, importantly, the drag from mining was much bigger. The mining investment decline is set to go from a maximum drag of around 1.5ppts of GDP in mid-2016, to no drag at all by mid-2018 (Chart 2). By comparison, the dwelling investment contribution to growth, which was a maximum of around 0.5ppts of GDP in mid-2016, is forecast to be a drag of around 0.25ppts by 2019. The collective effect from these two sectors is that a net drag on GDP of around 1ppt in mid-2016 is set to be almost no drag at all in 2018 and 2019.
Click here <a href="https://www.propertyobserver.com.au/images/2017/11/20/Figure2.jpg" target="_blank">to enlarge.</a>
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/11/20/Figure2.jpg" alt="">
Of course, there are also other forces at work. Falling commodity prices, between 2011 and 2016, were a large drag on national incomes. The lift in commodity prices from their trough levels in early 2016 is now supporting growth in national incomes. There has also been a ramp up in investment in urban infrastructure, largely funded by state government asset sales, which is supporting local growth and is set to continue to ramp up through 2018. Finally, tourism and education exports, supported by a much lower AUD in recent years and rising middle class incomes in Asia, are helping to fill the gap left by falling mining investment.
Nonetheless, some observers have argued that the end of the housing boom may have a strong negative effect on the economy, which could weigh on overall growth over the next couple of years. The argument is that households will be less inclined to spend as the cooling of the housing boom means they are no longer seeing wealth gains. However, in our view, there has been little evidence of a positive wealth effect in recent years, so we see a large negative wealth effect as unlikely. 
The more downbeat observers point to the fall in the national household saving rate as evidence of a positive wealth effect. We disagree. Although the national household saving rate has fallen in recent years, the state-level numbers show that the saving rate has not fallen in the states which have had housing prices boom (NSW and Victoria) (Chart 3). If the rise in wealth had driven households to consume more, surely it would have happened in the states where wealth has been rising? Instead, household saving rates have only fallen in the mining states (WA and Queensland), after rising during the mining boom.
Click here <a href="https://www.propertyobserver.com.au/images/2017/11/20/Figure3.jpg" target="_blank">to enlarge.</a>
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/11/20/Figure3.jpg" alt="">
The moves in household saving rates therefore appear to reflect the impact of the resources cycle on incomes, not a wealth effect. Estimates of housing equity flows also suggest that households have been injecting equity into their dwellings in recent years, rather than withdrawing it, which is further evidence that there has not been a wealth effect. With no positive wealth effect, a negative wealth effect from the end of the housing boom seems unlikely.
Rather than wealth changes, the critical factor that has driven trends in household consumption in recent years has been household income growth. Weak growth in household consumption has been due to the slow growth in household incomes, reflecting weak jobs and wages growth at the end of the mining boom. However, as the mining sector starts to stabilise, we are now seeing the strongest growth in employment is coming from the mining states (WA and Queensland) (Chart 4). This should start to lift household income in those states and support consumption growth.
Click here <a href="https://www.propertyobserver.com.au/images/2017/11/20/Figure4.jpg" target="_blank">to enlarge.</a>
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/11/20/Figure4.jpg" alt="">
What we have not seen yet is a pick-up in wages growth. This is the final stage of the 'rebalancing act' at the end of the mining boom. The cyclical factors are now supportive of a pick-up in wages growth, although there are also structural factors weighing on wages. On the cyclical story, commodity prices have lifted, corporate profitability has improved, business conditions are at high levels and, critically, the labour market is tightening up. However, the structural factors weighing on wages growth include, the changing nature of work, due to technology, offshoring, as a result of globalisation, decreased unionisation, and, increasing casualization of the workforce, amongst others.
 
Our central case is that the cyclical factors, particularly the tightening of the labour market, will see a pick-up in wages growth in 2018, which will complete Australia's 'great rebalancing act'. We also expect growth to be more broad-based across industries and regions than it has been in at least a decade, which should help to see a pick-up in wages pressures as spare capacity from across the economy is absorbed. Of course, the clear risk is that this process takes longer than we have factored in, as the structural factors continue to offset the impact of the positive cyclical forces. The outlook for wages growth remains the main focus of the story.
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jrobinson-rf4aSBido9

Australia's housing boom finished, but so is the drag from mining: HSBC'S Paul Bloxham

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Just months after UBS called the top of Australia’s property market, the investment bank has now declared the housing boom is “officially” over.
In the wake of the latest home price figures for October, its economists forecast a “persistent and sharp slowdown” unfolding in response to lending restrictions and out-of-cycle mortgage rate hikes.
The weakness in auction clearance rates, and the near flat month-on-month growth in prices in the last five months, "suggest the cooling may be happening a bit more quickly than even we expected.”
UBS expects the Reserve Bank of Australia to keep the official cash rate on hold until the second half of 2018.
CoreLogic’s latest monthly read on home values found price growth was flat nationally during October and up just 6.6 per cent annually — the weakest pace of growth since 2016.
Values fell half a per cent in the nation’s biggest housing market, Sydney.
“This is broadly consistent with our housing deep dive ‘calling the top’, which forecast a moderation to 7% year-on-year by end-2017, before dropping further to 0-3% year-on-year in 2018,” UBS economists George Tharenou and Carlos Cacho said.
Now the duo have downgraded their growth forecasts for this year to just 5 percent.
“Australia’s world record housing boom is ‘officially’ over after a large ‘upswing’ of 6556% price growth in 55 years,” he says.
<div id="taboola-mid-article-stream-thumbnails" class=" trc_related_container trc_spotlight_widget">“After dwelling price growth was resilient at a booming 10% [plus annual] pace earlier this year, there is now a persistent and sharp slowdown unfolding."</div>
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UBS calls property boom over and lowers national price growth forecast from 7 to 5 percent

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GUEST OBSERVER
Strong house price growth in Sydney and Melbourne in recent years largely reflects fundamentals.
Interest rates have been low, population growth and foreign demand have been strong and supply has been insufficient in these cities.
Tightened prudential settings and higher mortgage are expected to cool the Sydney and Melbourne housing markets in 2018.
Prices have risen most where housing supply is inadequate.
Australia has had a housing construction and price boom in recent years.
<a href="https://www.propertyobserver.com.au/images/2017/09/01/Screen%20Shot%202017-09-01%20at%2010.41.44%20AM.png">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/09/01/Screen%20Shot%202017-09-01%20at%2010.41.44%20AM.png" alt="">
Much of the boom reflects the central bank's use of its cash rate setting to manage the mining boom.
A high cash rate in the earlier period (4.75% in 2011), held back housing to make way for the mining boom.
Subsequent cash rate cuts (to 1.50%) drove a housing construction and price boom.
This has been mostly a good story.
The housing construction boom has helped to fill the growth gap left by falling mining investment and has reduced an accumulated housing undersupply.
Not many houses were built during the mining boom.
<a href="https://www.propertyobserver.com.au/images/2017/09/01/Screen%20Shot%202017-09-01%20at%2010.42.38%20AM.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/09/01/Screen%20Shot%202017-09-01%20at%2010.42.38%20AM.png" alt="">
The challenge has been that national housing prices have risen by 50% since mid-2012 and much of the rise has been driven by rising household debt.
This has reduced housing affordability and raised questions about whether Australia has a housing bubble. 
However, just because prices and housing debt have risen does not necessarily mean that there is a bubble.
The key question is whether the rise is in line with fundamentals? In our view, to a large degree, it has been.
Housing prices have risen very little in regions where housing demand has been weak, or supply has been boosted.
In contrast, where supply has not kept up with demand, house price growth has been strong.
For example, housing prices have only risen by 6% in Perth, 11% in Adelaide and 21% in Brisbane since 2012, where the mining retreat has had its biggest effects (Chars 25 &amp; 26). By contrast, Melbourne and Sydney prices have risen by 60% and 80%, respectively. In addition to low interest rates, demand for housing has been supported by migration (both international and domestic) and foreign investment: factors which have been strongest in Sydney and Melbourne.
Although supply has increased in the Sydney and Melbourne markets, it has still been insufficient to meet demand (Chart 27).
These fundamental factors largely explain the price boom and, as a result, we do not judge it to be a bubble.
It’s the distribution of debt that matters the most
Another element that could indicate a housing bubble would be misallocated lending.
If the lending that has driven the housing boom has been to households that may be unable to service it when interest rates rise, then this could cause a sharper fall in housing prices than otherwise, much as the sub-prime crisis did in the US last decade.
It is therefore the distribution of debt that matters most, rather than the aggregate level.
Although Australia has high household debt levels, in our view, they are high for fundamental reasons.
There is also strong evidence that the distribution of debt is fairly favourable and the institutional features of the mortgage market should help to ensure financial stability.
First, all of Australia's mortgages are full recourse loans. Second, Australia does not have sub- prime or low documentation loans.
Third, most of the household debt is held by higher income households (Chart 28). Fourth, although household debt is high when compared with other countries, this partly reflects differences in the tax system. In Australia, households are able to deduct the expenses related to investment properties from their broader income tax liabilities.
As a result, around one-quarter of household debt is investors that own rental properties. In many other countries, these rental properties are owned by the corporate sector.
Fifth, given the lack of tax deductibility of expenses on a first, owner-occupied, mortgage, households have an incentive to pay down their owner-occupied mortgages ahead of schedule.
As a result, the average mortgage in Australia is over 2.5 years pre-paid, which offers a significant buffer in the face of a negative income shock.
Finally, prudential settings have been tightened in Australia since late 2014, given concerns that authorities have had about the booming Sydney and Melbourne housing markets.
Tightened prudential settings make it unlikely that there has been a large enough mis-allocation of housing lending to be a systemic risk.
Overall, we expect housing price growth to slow in Sydney and Melbourne over the next couple of years, as new supply ramps up, the foreign bid pulls back (partly due to new state taxes on foreigners) and interest rates rise. 
<a href="https://www.about.hsbc.com.au/hsbc-in-australia/management-team" target="_blank">PAUL BLOXHAM</a> IS CHIEF ECONOMIST (AUSTRALIA AND NEW ZEALAND) FOR HSBC. 
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