<a href="https://www.apartments.com.au/developments/caulfield-north-vic-3161">Caulfield North</a> isn’t short on prestige, but it is short on boutique new apartment developments with spacious floorplans.

Cue LUMA, the newest development by&nbsp;<a href="https://www.apartments.com.au/developers/skylife-group-pty-ltd">Skylife Group</a>, which offers just nine apartments on Hawthorn Road.

<a href="https://www.apartments.com.au/new-apartments/luma-caulfield-north-226-hawthorn-road-caulfield-north-vic-3161">LUMA</a> occupies a coveted position near Caulfield Park, encircled by Melbourne's finest schools, parks, and culinary destinations. Its low-rise form by Metaxas Architects channels timeless design principles, wrapped in a restrained yet luxurious material palette.

Every residence embraces natural light and outlooks, thanks to expansive glazing and thoughtfully arranged floorplans.

Ranging from 80 sqm to nearly 160 sqm internally, with terraces or balconies extending up to 30 sqm, the homes offer a diversity of configurations, from two-bedroom residences to three-bedroom layouts with up to three bathrooms.&nbsp;

[smartcode_project:default project_id=148933 project_image_fid=335511]

The interiors are unified by a calm, light-infused aesthetic. Organic white walls, soft walnut timber joinery, and Aurora Range European Oak flooring are paired with plush carpeted bedrooms, creating a harmonious tactile experience.

The kitchens at LUMA serve both as culinary workspaces and statement design features. Buyers can choose between a lightGlacier Honed or dark Turko Argento natural stone benchtop, with timber-look Polytec Ravine joinery and fluted glass cabinetry providing contrast.&nbsp;

Miele appliances complete the package, tailored to residence size, with premium upgrades for three-bedroom homes including an 80cm induction cooktop and Gen 7000 speed oven.

Bathrooms echo the same sensibility, with natural stone, black EXON fixtures, and frameless glass showers. Select residences offer freestanding baths.&nbsp;

[smartcode_project:default project_id=148933 project_image_fid=335513]

Private outdoor spaces, secure parking, and options for EV charging reflect a practical yet elevated lifestyle focus.

As the development progresses toward its late 2026 completion, construction is in the hands of <a href="https://www.apartments.com.au/builders/rf-construction-management-pty-ltd">RF Construction Management</a>, bringing over 30 years of local high-end building expertise.

LUMA also offers a five per cent deposit structure, allowing buyers time to plan while securing their place in this tightly held precinct.&nbsp;

[smartcode_project_cta:default project_id=148933]

Joel Robinson

Inside Caulfield North's most boutique address, LUMA

Sekisui House Australia's first apartment development in Sydney's Lower North Shore has been a hit with prospective new home buyers.

They recently released <a href="https://www.apartments.com.au/new-apartments/waterstone-st-leonards-24-berry-road-st-leonards-nsw-2065">Waterstone</a>, on the fringe of Newlands Park in the emerging St Leonards South precinct, a short walk from the Crows Nest Metro and the heart of St Leonards.

The new development will home&nbsp;207 apartments across five mid-rise buildings, rising between four to nine storeys.

We recently visited the display suite at&nbsp;60 Pacific Highway, St Leonards, to find out more about the development that has been one of the most enquired on developments on Apartments.com.au in the last few months.

<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/rO1K7t6GOgY?si=pwmYyqjNBBzjMNeb" title="YouTube video player" width="560"></iframe>

Watersone sales agent Paul Marrum says the orientation of the building was key to Sekisui's wider design philosophy.

“Waterstone has been orientated to face south, capturing views over Newland’s Park and back to the Sydney CBD," Marrum says.

"This deliberate positioning, alongside 30 per cent of the site dedicated to open space designed by <a href="https://www.apartments.com.au/landscape-architect/aspect-studios">Aspect Studios</a>, roots the project in the developer’s Satoyama philosophy - prioritising balance between the built environment and its surrounding ecosystem."

On offer are a mix of one-, two-, three-, and four-bedroom apartments, with many including&nbsp;multi-purpose rooms to accommodate shifting lifestyle needs, from work-from-home professionals to growing families and downsizers.&nbsp;

[smartcode_project:default project_id=134191 project_image_fid=234]

“Every apartment is open plan, with interiors flowing to balconies or courtyards," Marrum adds.

"The material palette reinforces this flow: soft-toned tactile stone, fluted glass cabinetry, and warm timber joinery work together to create what he describes as a “refined but relaxed atmosphere.”

There’s a distinct human scale to Waterstone’s design. The community is shaped as a network of boutique buildings threaded by a ‘green spine’, a landscape feature that invites movement, reflection, and connection.

Marrum highlights the presence of sensory gardens and native planting throughout, signalling an approach that enhances both wellness and biodiversity.&nbsp;Yet Waterstone doesn’t forgo amenity for serenity however. Residents will have access to a heated outdoor pool and spa, infrared sauna, co-working lounge, fully equipped gym, and even dedicated resident workspaces.&nbsp;

[smartcode_project:default project_id=134191 project_image_fid=231]

Waterstone will rise from a prime Berry Road site ideally located near the green Newlands Park but also a short walk to the hear of both St Leonards and Crows Nest, two transport nodes with bus, train, and Sydney Metro lines connecting to the rest of Sydney.

Construction is slated to begin in mid-2025, with completion targeted for late 2027.&nbsp;

[smartcode_project_cta:default project_id=134191]

Inside Waterstone St Leonards: Apartments.com.au Video Spotlight

Off the plan buyers at Altona's newest apartment development Voyage, are soon to take their keys, with&nbsp;<a href="https://www.apartments.com.au/developers/spacious-property-development-group-pty-ltd">Spacious Property Development Group</a>&nbsp;approaching completion of the contemporary, coastal building.

Farey &amp; Co can now take prospective buyers through a fully-furnished display apartment on appointment as construction approaches its final stages.

[smartcode_project:default project_id=112195 project_image_fid=3286]

Situated just 13 kilometres from Melbourne’s CBD, Voyage Altona beachside apartment development offers a rare opportunity to live moments from the sand, pier, and thriving village life of Pier Street.

<a href="https://www.apartments.com.au/new-apartments/voyage-altona-102-106-pier-street-altona-vic-3018">Voyage</a> is the only new apartment offering currently on the market in <a>Altona</a>. Comprising one, two, and three-bedroom residences, it has been thoughtfully designed to appeal to a broad spectrum of buyers, from first home purchasers to downsizers and lifestyle-focused owner-occupiers.&nbsp;

Prices start from just over $500,000 for one-bedroom apartments, with three-bedroom configurations topping out just over the $1 million mark.

[smartcode_project:default project_id=112195 project_image_fid=2145]

Voyage's architecture, by <a href="https://www.apartments.com.au/architects/cheah-saw-architecture">Cheah Saw Architecture</a>, is defined by an asymmetrical façade and a refined palette that echoes the surrounding coastal tones.&nbsp;

Inside, a minimalist design language prevails, with full-height glazing inviting expansive views over Port Phillip Bay and hybrid timber flooring grounding the open-plan layouts.&nbsp;

Kitchens are appointed with premium Miele appliances and stone finishes, while the bathrooms feature porcelain tiles and walk-in glass showers.

[smartcode_project:default project_id=112195 project_image_fid=3287]

Voyage's location on Pier Street places residents at the heart of the suburb’s major activity centre. <a href="https://www.apartments.com.au/developments/altona-vic-3018">Altona</a> Station, Altona Beach, and a diverse mix of cafes and shops are all within walking distance.&nbsp;

With the final release now selling, Spacious is offering buyers the chance to secure their future home with just a five per cent deposit, a move that lowers the barrier to entry and positions Voyage as one of the most accessible premium new builds on Melbourne’s bayside fringe.

Spacious Property Development Group collaborated with <a href="https://www.apartments.com.au/builders/valeo-construction">Valeo Construction</a> to bring this vision to life. The development has advanced significantly, with interior fit-outs and communal landscaping well underway.&nbsp;

Completion is targeted for Q3 2025, with some buyers expected to move in by September.

[smartcode_project_cta:default project_id=112195]

Completion is targeted for Q3 2025, with some buyers expected to move in by September

Buyers to move into Voyage Altona this Spring

<a href="https://www.apartments.com.au/developers/beulah">Beulah</a>&nbsp;has unveiled its latest release of exclusive homes in its sustainable Brunswick townhouse development, Brunswick Established.

The collection, known as ‘The Courtyard House’, has been created in collaboration with Six Degrees Architects to meet the evolving needs of modern families.&nbsp;

With a central courtyard at its heart, the design reimagines the possibilities of multi-generational living, blending flexibility, sustainability and personalisation within a heritage setting. Distinct from a traditional garden, the courtyard delivers natural light, fresh air and a generous sense of space, without the upkeep of a backyard.

Comprised of 23 two-storey townhouses, <a href="https://www.apartments.com.au/new-townhouses/brunswick-established-23-hodgson-st-brunswick-vic-3056">Brunswick Established</a> offers multiple typologies of townhomes to suit different living requirements, allowing residents to grow in place - majority include ground-floor bedrooms for accessibility, while others, known as the ‘The Courtyard House’, provide a unique, flexible detached space separated by a courtyard.

Responsible for both the architecture and interior design, <a href="https://www.apartments.com.au/architects/six-degrees-architects">Six Degrees</a>’ holistic approach enabled the team to ensure an intrinsic link between the design outcomes; a seamless, harmonious flow from the outside to within.

[smartcode_project:default project_id=136451 project_image_fid=275571]

“The modern home should flow from inside to outside - the courtyard provides a space which joins the different parts of the home together as the central outside space of the home,” explains Six Degrees Director, Peter Malatt.

“The courtyard is a model used since ancient times, transforming the home from an object within a space to an object enclosing space. It acts as both the visual and social heart of the home, a space to gather, reflect, or simply pause, offering a moment of calm within a busy urban context."

“Courtyards also offer a deeply cultural and emotional resonance, with their timeless presence across human history. They connect us to the past, while shaping how we live today

Malatt says the courtyard also operates as a micro-climate, which can retain heat in winter and be a shaded haven in summer.

"The ability to take warmed or cooled air into the home from the courtyard space is a great way to improve internal health and minimise energy use through heating and cooling. In a compact urban environment like Brunswick, courtyards are also a clever solution - bringing light, greenery and nature into denser living formats while maintaining a strong sense of privacy and connection."

[smartcode_project:default project_id=136451 project_image_fid=270371]

This concept resonated strongly with early downsizers who recently purchased one of the Courtyard homes at Brunswick Established for themselves and their two adult sons, aged 21 and 24.

“We’re excited to have a home that gives us flexibility as our lives evolve, whether it’s our sons living with us as they finish university, or us being able to lock up and travel. Having separate spaces connected by the courtyard is perfect for our family dynamic, especially as we value our independence but also want to stay close,” they shared.

The couple, who also share their home with two dogs and two cats, highlighted the benefits of multi-generational living in a courtyard home.

“Our sons help care for the pets, we enjoy cooking and spending time together, and the courtyard means we have light, greenery, and privacy all in one. We love that Brunswick Established has thought about sustainability and customisation in such a detailed way, it’s rare to find that in a project.”

Beulah’s approach to design customisation at Brunswick Established, allowing residents to adapt layouts to their lifestyle, has been a major drawcard for buyers seeking homes that evolve alongside them. The detached living space offers flexibility to suit changing needs, whether as a studio, guest retreat, or home office, while maintaining a close link to the main residence, allowing family members to come together or enjoy privacy when needed.

[smartcode_project:default project_id=136451 project_image_fid=275570]

Malatt added that the&nbsp;homes have been designed for residents’ well-being, allowing couples and families to ‘grow’ in their own homes while ensuring they meet their needs for generations to come.

"Purchasers usually experience multiple lifestyle stages within one home, and we’re looking forward to seeing these unique homes come to life."

As part of this forward-thinking approach, Beulah will also host an exclusive event, The Property Market Decanted, on Wednesday 27 August at The Commons Café &amp; Cocktail Bar, Melbourne. The evening will feature insights from leading property and finance experts on Melbourne’s market outlook and long-term wealth creation strategies, particularly for multi-generational households.&nbsp;

[smartcode_project_cta:default project_id=136451]

Beulah release sustainable courtyard townhouse collection at Brunswick Established

Hampton's High Street offers the best of both worlds; halfway between Hampton Beach and Hampton Station, with a myriad of cafes and shops on its doorstep.

It was this unbeatable combination of convenience and connectivity that attracted Nash Project Management to secure a prime site on the corner of Hampton and Holyrood Streets several years ago.

The result is <a href="https://www.apartments.com.au/buildings/holyrood-hampton-451-461-hampton-street-hampton-vic-3188">Holyrood &amp; Hampton</a>, a newly completed residential development comprising 59 premium apartments set above a full-line Coles supermarket, enhancing the day-to-day ease for residents.

[smartcode_project:default project_id=4629 project_image_fid=1530]

Those who have already moved into Holyrood &amp; Hampton have highlighted several standout features of their new home, with the location topping the list.

Hampton Station on the Sandringham line (Zone 2), is just down Hampton Street, offering regular services to Flinders Street Station. Multiple bus routes connect to Southland, St Kilda, and Berwick, while scenic cycling paths along the bay provide a relaxing alternative for commuters and weekend riders.

A short walk west leads to Picnic Point and Hampton Beach, beloved for its clean sand and family- and dog-friendly spaces. Ferdinando Gardens, near the pier, is perfect for picnics, while coastal walking trails offer peaceful views and breezes.

The surrounding green spaces—Castlefield Reserve, Triangle Gardens, and Hampton High Reserve—offer playgrounds, sports fields, and a sense of calm. Golfers have several options nearby, including Brighton Public Golf Course just a short drive away.

[smartcode_project:default project_id=4629 project_image_fid=1528]

Hampton Street remains the heart of the community, with more than 50 fashion boutiques, cafés, and eateries. A Woolworths anchors the retail strip, while independent shops help maintain its village charm.

Health and community services are easily accessible, with local GPs, dental clinics, and the nearby Sandringham Community Hospital, supported by larger hospitals in Brighton and Cheltenham.

Families are well catered to, with top private and public schools within a 1–2 km radius. These include Haileybury College, St Leonards College, Firbank Grammar, Brighton Grammar, Hampton Primary, and Brighton Secondary College.

[smartcode_project:default project_id=4629 project_image_fid=1532]

The apartments have been designed for longevity, with spacious, home-like layouts. Many include butler’s pantries, oversized kitchen islands, and quality finishes.

Additional features such as a rooftop terrace, EV charging, secure storage, and direct supermarket access support a highly functional and low-maintenance lifestyle.

Designed by Telha Clarke, Holyrood &amp; Hampton reflects how people want to live today—connected, walkable, and move-in ready.

[smartcode_project_cta:default project_id=4629]

Those who have already moved into Holyrood & Hampton have highlighted several standout features of their new home, with the location topping the list.

Holyrood & Hampton presents a walkable, Bayside lifestyle in the heart of Hampton

Housing Risks

<html><body>Recent out-of-cycle rate hikes may be cushioned by subdued property prices with experts and economists predicting the downturn in Sydney and Melbourne to last 20 months on average, according to finder.com.au, the site that compares virtually everything.  In this month’s survey, experts and economists were asked to estimate how long the property downturn in Sydney and Melbourne will last, with the average prediction coming in at 20 months, or nearly two years. However, the downturn may last longer in Sydney with a slightly higher proportion of panellists believing the downturn will last 24 months or more in Sydney (9, 56%) compared to Melbourne (8, 50%). This pairs with greater positive sentiment for housing affordability with 43% of economists feeling positive about this metric, up from just 5% in March 2018 according to finder’s Economic Sentiment Tracker. <img src="https://lh6.googleusercontent.com/GGNPBSrOscmFBiMdZ0hkTADJdxrkDA8qdhUmnGl-jb2Q59PF0O3aWN7t6t2W3ATgkusIzAEj_jRjyffBE6ZoKNrO57Q01dia01Acx5ubBD1MDWaoFVMpqGVlQP2UOVV9a9mQUQQ" width="552" height="359" data-imagetype="External"> Graham Cooke, Insights Manager at finder.com.au, says falling property prices in some of the capital cities means the outlook for housing affordability has improved. “Only 4% of experts feel negatively about this metric, which represents a huge improvement since March this year. <img src="https://lh4.googleusercontent.com/FL-u8Gtfb1J1w5DfKhbrabHbpi-BaWFrWvsWBYkrv4gHsSuGxzXEhkZ54xJWN2LAQaDRXpxXmuFcXlTbWOwRzSttgq548UE2flgmk0IoVklVNXtcdYGTJUtpnTbhL-eFDJ8G_2s" width="553" height="385" data-imagetype="External"> “While the out-of-cycle rate movements aren’t promising for first home buyers, this may be offset by a cooling market as now could be the time for them to get in while prices are low. “For many would-be home buyers, a lower sales price represents a saving that could outweigh the costs of a higher interest rate, so first time buyers may experience some cushioning against rising rates,” he said. Ahead of the board meeting tomorrow (04/09/2018), all 30 members from the finder.com.au RBA survey share the view that the cash rate will be held for the 25th consecutive month.  Cooke said while it’s likely the Reserve Bank will hold the cash rate, this hasn’t stopped lenders from lifting rates independently.  “The belief that the cash rate won’t budge combined with increased funding pressure from overseas has spurred Westpac, Suncorp and other major banks to hike mortgage rates out-of-cycle.  “We expect this trend to continue, with the remaining of the big four and other lenders likely to follow suit in the coming days. “Mortgage holders should brace themselves for higher interest rates – it’s not a matter of if, but when.   “Switching to a new provider with a lower rate could pocket you thousands of dollars over the life of your loan, so don’t be afraid to refinance if you’re unsatisfied with your existing or updated interest rate,” he said.  To view out-of-cycle rate rises in August 2018, visit this page. Here’s what our experts had to say: Jordan Eliseo, ABC Bullion: "The RBA will hold interest rates at 1.50% at their next meeting, continuing a run of stability that now dates back over 2 years. Consumer confidence has been hit by the recent political chaos in Canberra, and job growth in the economy will likely slow down in the lead up to the next election, but the RBA is still reticent to cut, despite numerous headwinds the economy is facing." Tim Nelson, AGL Energy: "RBA has stated that it continues to expect inflation to be around 2.25% over the next couple of years as above-trend GDP growth reduces spare capacity in the labour market and there is an associated pick-up in wages growth." Shane Oliver, AMP Capital: "While economic growth picked up a notch in the first half of the year its premature to start raising rates as uncertainty remains around the outlook for consumer spending, the housing cycle both in terms of construction and home prices has now turned down, and wages growth and inflation remain low. So remaining on hold makes sense and this is likely to remain the case for some time to come." Alison Booth, ANU: "Fundamentals have not changed sufficiently to warrant changing the cash rate." Richard Robinson, BIS Oxford Economics: "inflation and wages growth is low." Paul Dales, Capital Economics: "The RBA is patiently waiting to see if the unemployment rate falls as it is hoping and inflation rises back to the 2-3% target rate. I suspect it will be waiting for a long time yet." Saul Eslake, Corinna Economic Advisory: "The RBA has made it clear that although it thinks the next move in interest rates will most likely be up, it is in no hurry to act on that inclination. And nothing has happened since the last meeting to have prompted them to change that view." Peter Gilmore, Gateway Bank: "The economic fundamentals remain largely unchanged." Mark Brimble, Griffith Uni: "No reason to move with inherent weakness in the economy exacerbated by political and regulatory uncertainty both domestically and internationally." Peter Haller, Heritage Bank: "There is no reason for the RBA to change rates at the present time." Paul Bloxham, HSBC Bank Australia Limited: "Inflation is still below the target band." Alex Joiner, IFM Investors: "The RBA finds itself between a rock and a hard place, the economy does not as yet justify higher policy rates, but equally it can not foster any better conditions that might see inflation accelerate more quickly because of the financial stability constraints it has, rightly in my view, it has also chosen to focus on." Michael Witts, ING Bank: "Despite the increase in mortgage rates from one of the majors, this is unlikely to alter the RBA stance." Leanne Pilkington, Laing+Simmons: "There’s no compelling reason for the RBA to adjust the official cash rate at this time. Of greater interest is the approach the banks are taking with their lending terms. Some are cutting fixed rates in an attempt to build market share. Honeymoon interest rate deals are in vogue to attract first home buyer attention, but it’s necessary to crunch repayment numbers based on the actual rate you’ll be paying once the honeymoon is over. There’s significant rate movement irrespective of the RBA at the moment." Nicholas Gruen, Lateral Economics: "That's what they keep saying they'll do." Mathew Tiller, LJ Hooker: "No major changes to economic conditions over the past months will see RBA hold the cash rate steady. In addition banks and lenders continue to change their interest rates independently of the RBA." Michael Yardney, Metropole Property Strategists: "There is no reason to alter interest rates. Our weakening housing markets, low inflation rate and soft wages growth suggest no rise in rates is imminent in the medium term. If anything this would dampen already sluggish consumer confidence which has already taken a hit over the last month." Mark Crosby, Monash University: "The RBA has signalled its intent to hold rates for some months yet, though it is good to see some discussion about whether the current inflation target remains appropriate." Dr Andrew Wilson, My Housing Market: "Macro environment relatively unchanged although out of cycle rate rises will be closely monitored by RBA if the level of increases impacts already constrained consumption." Alan Oster, NAB: "The RBA has stated that for the time being, they wish to be a source of stability and confidence in the economy. Rates are low and supporting economic growth which should see employment continue to grow and the unemployment rate decline further. At present there appears to be some degree of spare capacity in the labour market with relatively weak wages growth and inflation only just around the bottom of the RBA’s target band. The RBA is likely to continue this on this track until it is convinced spare capacity has fallen, wages growth is lifting and inflation rising more generally. This is only expected to occur gradually." Jonathan Chancellor, Property Observer: "The central bank doesn't need to make any move." Matthew Peter, QIC: "While the RBA is clearly on hold for the time being, the market is not pricing a rate hike until 2020. But with growth picking up, the labour market tightening and the AUD heading to US70c, the RBA will surprise markets with a rate hike, probably as soon as the June quarter of 2019." Noel Whittaker, QUT: "No reason to move either way." Nerida Conisbee, REA Group: "The next move is still likely to be an increase but for now, the economy is not strong enough to start increasing." Christine Williams, Smarter Property Investing Pty Ltd: "We have had a positive effect re unemployment, now under 6% together with a strong outlook in the job sector, both with full time and part-time positions. I feel this needs to stay on an upward trend [for] least 1 more quarter before the Reserve Bank increases rates." Janu Chan, St.George Bank: "Ongoing low inflation and expectations it will stay low for some time allows the RBA room to leave rates on hold." Brian Parker, Sunsuper: "Still plenty of labour market slack, and wage and price inflation not picking up anywhere near fast enough to prompt higher rates." Richard Holden, UNSW: "They should cut but can't. Labor market is weak. Inflation low." Clement Tisdell, UQ-School of Economics: "The Australian economy is not overheated. Demand pullinflation is not at work. Cost push could become a problem. Private interest rates are liable to increase." </body></html>

j.ballantyne1990-6AQqhLzZaK

Sydney price downturn to last two years: Finder survey

<html><body>
GUEST OBSERVER
<div>
As expected the Board of the Reserve Bank decided to leave the cash rate unchanged at 1.50 percent.
We were most interested in how the Governor assessed the housing market in the light of strong auction clearance rates and some evidence of higher price growth in Sydney and Melbourne.
Recall that the key assertion in the statement following the August cut was that “the likelihood of lower interest rates exacerbating risks in the housing market has diminished”. It is not surprising that this sentence was not repeated in the September statement. Arguably if we had not seen the evidence in the Sydney and Melbourne markets the Governor would have been sufficiently emboldened to repeat that assertion.
The other key theme around housing in the August statement was that “dwelling prices have been rising only moderately over the course of this year”. This statement repeats that assertion with an important qualification: “dwelling prices OVERALL have risen moderately over the past year”. That would appear to be recognition that the term “moderate” no longer applies to some parts of the country, specifically Sydney and Melbourne.
There have been some other subtle changes of language in this statement. In August, overall growth was described as continuing “at a moderate pace”. In this statement growth is described as: “overall growth is continuing”, arguably leaving out the word moderate indicates that he is not prepared to commit until tomorrow’s release of the GDP report. Equally, in August, areas of domestic demand were described as “expanding at a pace at or above trend”. In this statement areas of domestic demand are merely described as growing.
There is no change in the assessment of the key policy variables – inflation and employment. Inflation continues to be described as “quite low” and is expected to remain so for some time. Labour market indicators are still described as “somewhat mixed”.
The global outlook remains the same. The global economy is expected to grow at a lower than average pace and “China’s growth appears to be moderating”.
The final paragraph in the statement is a replica of the statement used in June following the May rate cut with a very clear neutral bias being signalled. While this is an accurate assessment of current thinking it seems highly unlikely that the outgoing Governor would have left the new Governor with any particular commitment. Better to allow total flexibility over the next few months.
Conclusion
Since the beginning of 2013 when interest rates had dropped to 3.00% the Bank has cut rates on six occasions and all of them have been in the months February, May, August and November. These dates are significant in that they coincide with an update on the inflation outlook and also the release of the Bank’s quarterly Statement on Monetary Policy when the Bank’s forecasts are reviewed. This means that the next possible time of a rate cut would be November this year.
We expect that rates will remain on hold in November. Our forecast for underlying inflation in the September quarter is 0.5% which, following a 0.5% for the June quarter, allays concerns that the Bank may have had( following the 0.2% print for the March quarter) that inflation was tumbling out of control.
We would also like to think that the new Governor might adopt a slightly wider target band (1-3%) when he reaches agreement with the Government on the new Inflation Target. A decision like that would take further pressure off a  pursuit of a 2.50% inflation print given current global conditions. It would not be a good policy approach to pursue an unrealistic inflation target at the possible expense of destabilising asset markets and a further increase in in household debt ratios.
This expectation is not contingent on our forecast of steady rates in November given that we have to reluctantly recognise that a change in target is not likely.
Other factors that might prompt a rate cut in November would be a rampant AUD in response to further evidence that the Fed will remain on hold in December. However, whilst we think that decision by the Fed is unlikely we also expect that commodity prices will be weighing on the fair value of the AUD by that time.
Today’s statement really only provides a reasonable signal that the confidence around housing we saw in August has been shaken a little, slightly lowering the chances of that November cut.
Developments in the real economy will also be important. We expect tomorrow’s GDP report to print 0.5% for the quarter and 3.3% through the year. That will be the most up to date real sector information for the November meeting and of course represents around half a percent faster growth than the RBA’s current trend assessment.
While the Governor continues to describe labour market indicators as “somewhat mixed” our own research is more encouraging with employment growth likely to hold in the 1.5-2 percent range.
Overall we do not expect any change at the October meeting and are also anticipating steady rates in November.
 
</div>
BILL EVANS is chief economist of <a href="https://www.westpac.com.au/" target="_blank">Westpac</a>.
</body></html>

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