Repeat buyers are one of the strongest measures of confidence in any apartment development.

At <a href="https://www.apartments.com.au/new-apartments/era-newcastle-west-124-126-bull-street-newcastle-west-nsw-2302">ERA</a> in Newcastle West, some purchasers are returning to <a href="https://www.apartments.com.au/developers/gwh">GWH</a> after living at the developer's One Apartments. Their decision to purchase again was driven by the quality of life they found after moving into their first GWH home.

Keith Wilton had spent years living in a house in East Maitland before deciding it was time for a change. Apartment living had always been on his radar, but he was selective about what he wanted.

<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/FH_1EzB-1vs?si=XScVlP1ERsTDJoME" title="YouTube video player" width="560"></iframe>

"I had some boxes I wanted to tick," he says.

Keith points to the open-plan design, generous outdoor areas and considered inclusions as key reasons One Apartments worked for him.

“One of those things was a nice indoor open plan area, but also I wanted a nice outdoor open area that I could entertain on in summer or Christmases or birthdays,” he says.

He also found value in the smaller details, from integrated appliances to shared resident spaces including the pool, cinema and rooftop areas.

[smartcode_project:default project_id=135096 project_image_fid=356818]

After comparing several developments, he chose One Apartments because of GWH's longstanding local reputation and his own experience working with the developer on a commercial project more than a decade earlier.

"I knew that they were local, that the quality of the build was going to be up there. I'd looked at other apartment complexes around and close by, and I just knew that here was a better decision location wise."

Today, Keith says the move has completely changed how he experiences Newcastle.

"I enjoy living in this location because it's more of a lifestyle change. That Newcastle city living where you can walk to restaurants and bars and even beaches and parks and even shopping across the road."

[smartcode_project:default project_id=135096 project_image_fid=356828]

Beyond the location, he says it's the sense of community that has surprised him most.

"Everyone loves living here because they chose to live here, but everyone looks out for each other. It's a real great community feel here."

For Aimee and Lyle Goodman, the journey started almost by chance.

<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/tsioMLcnjas?si=zq-ys3JuWpfa5hFv" title="YouTube video player" width="560"></iframe>

The couple happened to be having coffee in Newcastle when they noticed the site where One Apartments was about to begin construction.

"We were aware GWH was planning a development," Aimee says. "We made one phone call and things moved pretty quickly after that."

As busy business owners, they initially thought apartment living would simply reduce the maintenance that came with larger homes. Instead, it fundamentally changed how they spent time together.

"We actually catch up more as a family now," Aimee says.

"We've had homes with big yards and lots of space, but everyone ended up in different rooms. Here we'll have dinner together, the kids can play, and we spend far more quality time together."

[smartcode_project:default project_id=135096 project_image_fid=356829]

Lyle says their confidence came from GWH's reputation within Newcastle's building industry.

"I know people who've worked across different apartment projects, and whenever GWH came up the feedback was always the same. They're rock solid. They're quality."

That confidence only grew throughout the buying process.

"One of the things that really impressed us with GWH was the whole process, was the communication," Lyle says. "It was consistent, it was regular, there was no problem if we had some weird questions, there was no problems in getting answers."

[smartcode_project:default project_id=135096 project_image_fid=351104]

Aimee says one moment stood out.

"The project actually finished on time. We realised we needed to hurry up and sell our house because everything was happening exactly when they said it would."

The positive experience at One Apartments ultimately gave all three buyers the confidence to purchase again with GWH, this time at ERA.

Their confidence reflects what many buyers are seeking in today's apartment market. Location remains important, but so too does certainty around delivery, quality and long-term liveability.

[smartcode_project:default project_id=135096 project_image_fid=356822]

ERA builds on those foundations with 280 one, two and three-bedroom apartments across two landmark towers in <a href="https://www.apartments.com.au/developments/newcastle-west-nsw-2302">Newcastle West</a>.&nbsp;

Designed by <a href="https://www.apartments.com.au/architects/fk-australia">Fender Katsalidis</a>, the project will include more than 2,000 square metres of resident amenities, including a resort-style pool, gym, sauna, private cinema and rooftop entertaining spaces overlooking the harbour and coastline.&nbsp;

The development is also within walking distance of the Newcastle Interchange, Honeysuckle, Darby Street, the harbour foreshore, restaurants, retail and the city’s beaches, continuing the walkable lifestyle that existing GWH buyers say has transformed how they live.

[smartcode_project:default project_id=135096 project_image_fid=356826]

For Keith, the appeal remains straightforward.

"You feel at home even before you've moved into your home."

For Aimee, the change is measured in time.

“I just felt like I had more time,” she says.

[smartcode_project:default project_id=135096 project_image_fid=351102]

Construction at ERA is now underway, with more than half of the residences already sold and limited two and three-bedroom apartments remaining in the East Tower release. Priced from $980,000 for two-bedroom residences and $1.46 million for three-bedroom residences, buyers can secure an apartment with a 10 per cent deposit, with premium homes offering ocean views from Level 8 and harbour views from Level 10.

ERA is also backed by Resilience Insurance's 10-year Latent Defects Insurance policy, providing protection against structural or waterproofing defects for 10 years after completion. The project is anticipated to be completed in early 2028.

[smartcode_project_cta:default project_id=135096]

Joel Robinson

From ONE to ERA: Why buyers are choosing GWH again in Newcastle West

Virgate Property Group is preparing to commence construction of Verdé, its new apartment development in Melbourne's Arts Precinct at Southbank, following a strong run of sales that has seen more than half of the project's 173 apartments secured.

Verdé has attracted a broad mix of first home buyers, owner-occupiers upgrading from nearby inner-city suburbs and investors, with younger owner-occupier couples aged between 28 and 45 accounting for the strongest enquiry. Many are already living in Southbank, South Melbourne, Albert Park, Port Melbourne, South Yarra and the CBD.

"Verdé is located in one of the most desirable pockets of southern Melbourne," Blair Property Group Director Darren Blair, who is managing sales at Verdé, said.

"It's within walking distance of the Arts Centre, Royal Botanic Gardens, Albert Park Lake, and Southbank's restaurants and retail. It's a great lifestyle location with strong amenity and liveability, which made it a very attractive choice for the project."

[smartcode_project:default project_id=4661 project_image_fid=372549]

Virgate was already familiar with the precinct, having previously delivered the successful Domain House development in neighbouring South Melbourne. That experience gave the developer confidence to acquire the Coventry Street site and continue expanding its presence in Melbourne's inner south.

"We had been keeping an eye on the site and the broader precinct for a few months before deciding to move forward with the acquisition," Virgate said.

The project was ultimately secured in 2020 following feasibility studies, planning assessments and due diligence, with the brief centred on delivering "a high-quality, considered design that feels both refined and fit for purpose."

[smartcode_project:default project_id=4661 project_image_fid=314259]

Designed by <a href="https://www.apartments.com.au/architects/bruce-henderson-architects">Bruce Henderson Architects</a>, Verdé comprises 173 one, two and three-bedroom apartments priced from $599,000. The architecture is distinguished by a faceted glass façade that responds to both the site's outlook and Melbourne's changing light conditions.

According to Bruce Henderson Architects, the coloured glazing gives the building a distinctive identity while also providing privacy and solar shading, with residences oriented to capture views across the bay, city skyline and surrounding parklands.

Inside, <a href="https://www.apartments.com.au/interior-designers/designoffice">DesignOffice</a> has created interiors focused on natural light, efficient planning and enduring materials. Apartments feature engineered oak flooring, natural stone benchtops, floor-to-ceiling glazing and SMEG appliances, while a restrained material palette aims to complement the expansive outlooks rather than compete with them.

[smartcode_project:default project_id=4661 project_image_fid=372550]

Resident amenity has also been designed around everyday functionality rather than occasional use. Facilities include a concierge-serviced lobby, residents' lounge with fireplace, library and co-working space, gym, terrace garden with barbecue facilities, ground-floor café, and package delivery management.

The project's location continues to be one of its strongest drawcards. Positioned on Coventry Street, Verdé sits within walking distance of the National Gallery of Victoria, Arts Centre Melbourne, Royal Botanic Gardens and Albert Park Lake, while Southbank's dining precinct, Sturt Street trams and the new ANZAC Station are all nearby. The surrounding education catchment also includes Melbourne Grammar, Melbourne Girls Grammar, Mac.Robertson Girls' High School and several major university campuses.

The sales team says buyers have responded particularly well to the combination of location, design quality and long-term liveability.

"They're responding really positively to the quality of the design, premium resident amenities and the uninterrupted views. Many also appreciate the location and how connected it is to everything they need."

The ability to secure stamp duty savings before completion has also been a key factor for purchasers, alongside the opportunity to personalise finishes ahead of settlement.

With construction set to commence soon and more than half the apartments already sold, Verdé enters its next phase as one of the Arts Precinct's more established apartment developments, offering remaining buyers an opportunity to secure a residence before construction advances further. Expected completion is scheduled for late 2027.

[smartcode_project_cta:default project_id=4661]

Virgate's Verdé Southbank moves toward construction as sales fly past halfway stage

Downsizer-focused apartment development Kooyongkoot in Hawthorn has been recognised at the 2026 Better Future Melbourne Design Awards, taking home Gold and Silver awards in two categories.

<a href="https://www.apartments.com.au/new-apartments/kooyongkoot-hawthorn-1-kooyongkoot-road-hawthorn-vic-3122">Kooyongkoot</a>, currently being delivered by developer PQD and designed by Cera Stribley, received Gold in the Interior Design – Proposed category and Silver in the Architecture – Proposed category.

The dual recognition reflects the design approach behind the boutique development on prestigious Kooyongkoot Road, where the focus has been on creating homes for downsizers seeking the space, quality and functionality of a detached house within a low-rise apartment building.

Rather than maximising apartment numbers, <a href="https://www.apartments.com.au/developers/pqd">PQD</a> and <a href="https://www.apartments.com.au/architects/cera-stribley-architects">Cera Stribley</a> limited the development to just 18 residences, allowing for larger floorplans, greater privacy, generous landscaping and expansive communal spaces.&nbsp;The majority of the apartments also benefit from corner aspects, allowing for dual sources of natural light.

Now around 70 per cent complete and on track for completion in November 2026, Kooyongkoot will comprise a mix of garden residences, ter​race apartments, sub-penthouses, and is crowned by two half-floor penthouses with direct lift access and private rooftop terraces.

[smartcode_project:default project_id=102717 project_image_fid=355297]

The Silver Award for Architecture recognised the way the building responds to its prominent corner position at the ent​rance to Hawthorn's Scotch Hill precinct, one of Melbourne's most established residential neighbourhoods.

Rather than competing with the grand homes that line Kooyongkoot Road, the architectural approach focused on restraint and longevity, using curved brickwork, generous landscaping and carefully considered proportions to integrate with the existing streetscape.

"The form feels fluid and timeless, as though shaped by the landscape itself – architecture that belongs, rather than competes," said Chris Stribley, Co-Founder and Managing Principal of Cera Stribley.

The judging submission also highlighted practical innovations throughout the building, including lift cores servicing only nine homes each, a central landscaped lightcourt designed to bring daylight and ventilation into the building, and fully enclosed private storage rooms with lighting, power and shelving to better accommodate residents transitioning from larger family homes.

[smartcode_project:default project_id=102717 project_image_fid=355293]

The Gold Award for Interior Design recognised the project's focus on long-term liveability rather than display-home aesthetics.

According to the awards submission, the interiors were designed from the inside out, prioritising how homes would function over decades of daily use through generous proportions, practical storage, durable natural materials and flexible layouts.

The specification includes natural stone throughout, upgraded acoustic glazing, V-ZUG appliances and fully enclosed storage rooms, alongside an amenity offering focused on wellness, entertainment and everyday convenience.&nbsp;

Residents will have access to a gym and yoga studio, a wellness centre featuring traditional and infrared saunas, a cold therapy shower and treatment room, as well as a residents' lounge and golf simulator/cinema room for entertainment.&nbsp;Kooyongkoot has also considered the everyday convenience of its residents by offering a private carwash and pet wash facilities on site as well as dedicated parcel lockers and oversized fully enclosed storage rooms.&nbsp;

[smartcode_project:default project_id=102717 project_image_fid=355303]

The project's attention to detail has already resonated with buyers. Earlier this year, Kooyongkoot recorded one of Boroondara's highest apartment sales when an $8 million penthouse was purchased by a Melbourne CEO downsizing from a nearby family home.

"Every detail feels deliberate, from the overall design down to the smallest touches," the purchaser said.

"The level of quality and refinement is exceptional, but what really sold it was how liveable it felt... It felt like a place where everything had been considered, not just a luxury building."

[smartcode_project:default project_id=102717 project_image_fid=355304]

Sustainability also formed a key part of both award submissions. Kooyongkoot is targeting a minimum 7.5-star NatHERS rating across all residences, supported by passive design principles, high-performance glazing, EV charging infrastructure, water reuse systems and a wellness model focused on lower-energy dry facilities rather than pools and large wet areas.

Located within walking distance of Scotch College, Methodist Ladies' College, Koo​yong Lawn Tennis Club, Aubur​n Village and Camberwell Junction, Kooyongkoot continues to target owner-occupiers looking to remain in Melbourne's inner east without compromising on space or quality. A limited selection of two, three and four-bedroom residences remains available, with prices starting from $1.9 million.

[smartcode_project_cta:default project_id=102717]

Kooyongkoot wins Gold and Silver at Better Future Melbourne Design Awards

New apartment supply has become increasingly constrained across <a href="https://www.apartments.com.au/developments/parramatta-nsw-2150">Parramatta</a> in recent years, with fewer projects progressing through to completion as development conditions have become more challenging.

It makes <a href="https://www.apartments.com.au/developers/novm">NOVM</a>'s 2021-completed <a href="https://www.apartments.com.au/buildings/the-lennox-parramatta-12-phillip-street-parramatta-nsw-2150">The Lennox</a> one of the most recently completed residential towers on the Parramatta River, and among the newest apartment developments in Sydney's second CBD.

With the project largely completed before the sharp escalation in construction costs and inflation following the pandemic, The Lennox is now offering pricing that would be difficult to replicate in a comparable new development in Parramatta today, or across much of Western Sydney.

The majority of the 413 apartments at The Lennox sold before and shortly after completion. A limited release of the remaining apartments has recently been brought to market by capital partner <a href="https://www.apartments.com.au/project-marketer/equitifund-group">Equitifund</a>, with entry-level pricing from $700,000 and two-bedroom apartments available from under $1 million.

Rising above the Parramatta River at 12 Phillip Street, The Lennox comprises one, two, three and four-bedroom apartments, appealing to first home buyers, young professionals, families, downsizers and interstate investors seeking a completed apartment in one of Australia's fastest-growing economic centres.

[smartcode_project:default project_id=5743 project_image_fid=372394]

Rather than positioning Parramatta as an alternative to Sydney's CBD, Equitifund believes the city has reached a point where it stands on its own merits.

"Parramatta is no longer simply an alternative to Sydney CBD, it's becoming a destination in its own right," Equitifund Executive Chairman Greg Huxley said.

"The Lennox captures that evolution with a level of quality and amenity that's difficult to match at its price point."

[smartcode_project:default project_id=5743 project_image_fid=953]

Designed by <a href="https://www.apartments.com.au/architects/marchese-partners">Marchese Partners</a>, the tower responds directly to its riverfront setting through expansive glazing and open-plan layouts that maximise views across the Parramatta River and city skyline. Interiors feature engineered timber flooring, stone benchtops, stainless steel appliances and floor-to-ceiling glazing, while generous balconies extend the living spaces outdoors.

Marchese Partners says the project was conceived to balance high-quality apartment living with practical, long-term functionality, pairing larger, efficient floorplans with amenities more commonly associated with five-star hotels.

That emphasis continues through the resident facilities, which include a 20-metre rooftop swimming pool, fully equipped gym and wellness spaces, full-time concierge, a residents' lounge, function room, private lifts, secure basement parking and rooftop communal areas overlooking the Parramatta River. Ground-floor boardwalk retail and dining further activate the riverfront and integrate the building into the surrounding public realm.

[smartcode_project:default project_id=5743 project_image_fid=925]

Australian housing and finance group Equitifund has secured the remaining apartments, believing there are few completed apartment opportunities in Parramatta that offer the same combination of location, amenity and pricing.

Equitifund National Sales Director Ben Hamblett says buyers are increasingly recognising that premium apartment living no longer needs to come with Sydney CBD pricing.

"The Lennox is where aspirational living becomes attainable," Hamblett said.

"Wake to river and mountain views, step into Sydney's Second CBD, and arrive home to resort-calibre amenities, all without the harbour price tag."

Hamblett says owner-occupiers are also attracted by the convenience of having Westfield Parramatta, Church Street's dining precinct, Parramatta Park, Riverside Theatres, Western Sydney University and major transport connections all within walking distance.

"At The Lennox, lifestyle is not an afterthought, it is the foundation."

[smartcode_project:default project_id=5743 project_image_fid=5374]

The Lennox places residents within walking distance of Parramatta Square, Westfield Parramatta, Church Street Eat Street, Parramatta Station, the ferry wharf, Light Rail, the future Sydney Metro West, Parramatta Park and CommBank Stadium, reinforcing Parramatta's position as one of Australia's most connected metropolitan centres outside Sydney's CBD.

Equitifund says buyers visiting the display suite consistently comment on the quality of the finishes, generous floorplans, river and skyline views, and the walkability of the location. The project has attracted a broad mix of local professionals, upsizers, downsizers, buyers relocating from Sydney's inner suburbs and interstate investors seeking long-term growth opportunities.

That demand aligns with Parramatta's continued evolution as an economic powerhouse. Equitifund Research and Market Insights specialist John Bekiaris says sustained population growth, infrastructure investment and expanding employment opportunities continue to support long-term housing demand across the city.

"Parramatta has evolved from a satellite city into one of Australia's most important economic centres. Population growth, infrastructure investment and employment are all supporting sustained long-term housing demand."

[smartcode_project_cta:default project_id=5743]

The apartment price gap drawing Sydney buyers west

A luxury beachfront apartment at Rainbow Bay has more than doubled in value since it sold off the plan six years ago, setting a new local apartment record in the process.

The three-bedroom apartment in the Flow development on Petrie Street, the first of four new projects locally by Paul Gedoun's S&amp;S Projects, has sold for $7.4 million, after originally selling for $3.27 million when the project launched in 2020.

The seventh-floor apartment, comprising 187 sqm of internal living space and a 54 sqm balcony overlooking Froggies Beach and Snapper Rocks, was purchased by a local family.

The transaction was negotiated by Pezet Matheson director Kerry Pezet and equates to more than $30,000 per sqm.

Pezet said the sale reflected the limited opportunities to buy into the boutique beachfront development.

"The sale highlights the rarity of opportunities within the boutique beachfront development, where residences seldom become available," Pezet said.

"Flow is one of the Gold Coast's most tightly held buildings. Buyers from our database move quickly when residences become available, and achieving an off-market sale at $7.4 million demonstrates the depth of demand for property of this calibre."

<img alt="Flow" data-entity-type="file" data-entity-uuid="c585b206-2130-4eee-a50c-3f27c51a7c70" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-07-06%20at%208.33.25%E2%80%AFPM.png?VersionId=m3pHRDV62Y3fvN.XQuQHq.52ilTWpRLf" />

Flow was the first of four luxury apartment developments delivered by Paul Gedoun's S&amp;S Projects at Rainbow Bay and was completed in 2023.

Positioned on the beachfront overlooking Snapper Rocks, the residence includes three bedrooms, three bathrooms, a powder room and views stretching north along the coastline towards Surfers Paradise.

Pezet Matheson Residential principal Mitchell Lambert said buyers continued to prioritise quality beachfront apartments in tightly held locations.

"Flow Residences offers a rare combination of elevated beachfront positioning, architectural excellence, comprehensive resident amenity and premium finishes, which is exactly what discerning purchasers are seeking," Lambert said.

"The transaction further reinforces Rainbow Bay's reputation as one of Australia's premier coastal lifestyle destinations, where limited supply and growing demand continue to support strong market performance."

Pezet Matheson originally marketed and sold out Flow off the plan, making the latest transaction a return to one of the project's original buyers.

Paul Gedoun is selling his third project, <a href="https://www.apartments.com.au/new-apartments/radia-rainbow-bay-271-boundary-street-coolangatta-qld-4225">Radia Rainbow Bay</a>, after recently completing, and selling out, <a href="https://www.apartments.com.au/buildings/esprit-217-227-boundary-street-coolangatta-qld-4225">Esprit</a>. He has plans for a <a href="https://www.apartments.com.au/news/qld/first-look-s-s-projects-proposes-88-apartment-wellness-tower-at-coolangattas-boundary-street">fourth building</a>, 88 apartments on <a href="https://www.apartments.com.au/new-apartments/209-213-boundary-street-coolangatta-qld-4225">Boundary Street</a>.

Rainbow Bay apartment doubles in price since off the plan sale during pandemic

Inflation Rate

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EXPERT OBSERVER
For the seventh quarter in a row inflation has underperformed market expectations with the headline CPI lifting 0.4% in the quarter compared to an median expectation of 0.5% qtr.
Westpac’s forecast was for 0.4% qtr.
Interestingly the mix of sectors prices was broadly as we had expected with some small downside and upside surprises but the overall print was slightly to the downside of our expectations.
At two decimal places the CPI rose 0.36% in the quarter while our forecast was 0.42%.
Following the December quarter CPI Westpac argued that searching for inflation in the Australian economy has been a fruitless as Vladimir and Estragon’s wait for Godot.
We are now looking at the play having a record run with the ABS for while there may be some anecdotal hints that inflation is around, the ABS is yet to report its appearance in any solid form in the CPI Survey.
Core inflation came in as expected rising 0.5% qtr (0.46% at two decimal places so a soft 0.5%) suggesting that Australian forecasters, as a group, are broadly getting the core inflation pulse corrected but continue to underestimate the deflationary pulse that is hitting certain sectors leading to greater than usual discounting (or less than usual post sales repricing) in those sectors.
The six month annualised pace of headline inflation printed 1.6%yr, down from 2.2%yr in Q1 and the recent peak of 2.5%yr in Q4 2017.
For core inflation, the six month annualised pace is now 2.0%yr from 2.0%yr in Q1, 1.7%yr in Q4 2017and 2.0%yr in Q3.
With core inflation just at the bottom of the RBA’s target band, inflation remains well contained at a very modest pace. This would leave the RBA quite comfortable with the current stance of monetary policy.
Without a doubt the Australian economy remains locked in a low inflation environment. Sectors that are experiencing some inflation –particularly tobacco and auto fuel then to a lesser extent, housing, health and education – are mostly being offset by the disinflationary pressure of the competitive squeeze in consumer goods. There are no signs we are about to experience a broader upswing in prices that you would normally expect to see at this late stage of an economic recovery.
Breaking it down a bit further prices came in broadly as expected with a mix of upside and downside surprises. However, given that the two decimal place print from the CPI was just 0.36%, compared to our forecast for 0.42%, then overall there was a very modest downside surprise in the survey.
Food prices were a touch softer than expected falling 0.4% vs our –0.2% forecast with a larger than expected fall in fruit &amp; vegetables (–2.7% vs –0.5%). Alcohol &amp; tobacco was stronger than expected (1.6% vs 0.6% expected) with a robust 2.8% rise in tobacco prices.
Clothing &amp; footwear came in as expected with a 1.3% seasonal re-pricing while housing costs were close to expectations rising 0.2% vs 0.1% expected. However the mix was very interesting with rents flat (0.2% expected), dwelling purchase rose 0.8% (vs. 0.5% expected) while the fall in utilities was great than expected (–1.2% vs –0.9% expected).
An area where the downside pressure appear to be significant was the smaller than expected seasonal re-pricing for household contents &amp; services (0.3% vs 0.8% expected) while health rose just 1.9% vs. the 2.6% expected this is despite a smaller than expected fall in pharmaceutical (–1.0% vs –1.6%)
Tradables rose 0.5% in the June quarter. Tradables goods rose 0.4% mainly due to automotive fuel (+6.9%qtr), audio, visual &amp; computing media and services (+3.0%qtr), garments for women (+2.2%qtr), and glassware, tableware &amp; household utensils (+3.5%qtr). The tradable services component rose 1.3%qtr due to international holiday travel and accommodation (+1.3%qtr) in response to peak period pricing for Europe and America. Tradables represent approximately 35% of the CPI.
Non-tradables rose 0.3% in the June quarter. Non-tradables goods rose 0.7%, mainly due to tobacco (+2.8%qtr), new dwelling purchases by owner occupiers (+0.8%qtr) and takeaway and fast foods (+0.8%qtr). The non-tradable services component rose 0.2%, mainly due to medical and hospital services (+3.1%qtr) and child care (+1.0%qtr). Non-tradables represent approximately 65% of the CPI.
Low inflation remains embedded in the economy.
We have seen inflationary expectations drift a little higher (we suspect rising fuel prices and until this year, rising power bills are responsible for this) but despite this the ABS CPI Survey again revealed little to suggest that the Australian economy is about to break out of its low inflation trap.
Through 2017, the big story was the rise in energy bills, particularly for electricity but also gas. However, in late 2018 there was a significant change in the wholesale electricity market as the expansion of renewable generation exceeded expectations, and power storage facilities enter commercial application, driving down wholesale prices. Some modest discounting of power bills has been reported and we are expecting this to continue through the remainder of 2018 and into 2019 which was a key reason for the recent downgrade to our inflation profile, for both headline and core, out to the end of 2019.
We will provide a full update on our forecasts in the CPI Economic Bulletin but at this stage, given that the run of soft updates that point to the Australian economy being in a low inflation trap, the risks to these forecasts still lie to the downside.
Justin Smirk is a commodity analyst for Westpac
</body></html>

j.ballantyne1990-6AQqhLzZaK

CPI inflation is below expectations for the seventh quarter running: Justin Smirk

<html><body>
The Consumer Price Index (CPI) rose 0.6 per cent in the December quarter 2017, the latest Australian Bureau of Statistics (ABS) figures reveal.
It was below expectation, with some economists suggesting there was still scope for another rate cut.
Certainly no early RBA hike here! was Shane Oliver's immediate tweet.
The latest figure follows a rise of 0.6 per cent in the September quarter 2017.
The Australian dollar dipped on the latest data. The most significant price rises this quarter are automotive fuel (+10.4%), tobacco (+8.5%), domestic holiday travel and accommodation (+6.3%) and fruit (+9.3%). 
These price rises were partially offset by falls in international holiday travel and accommodation (-1.7%), audio visual and computing equipment (-3.5%) and telecommunication equipment and services (-1.4%). The CPI rose 1.9 per cent through the year to December quarter 2017 having increased 1.8 per cent through the year to September quarter 2017.
What the economist say
Chief Economist for the ABS, Bruce Hockman, said while the annual CPI rose 1.9 per cent, annual inflation in most East Coast cities rose above 2 per cent, due in part to the strength in prices related to housing.
"Softer economic conditions in Darwin and Perth have resulted in annual inflation remaining subdued at 1.0 and 0.8 per cent respectively."
AMP Capital's Shane Oliver shared the below chart on his Twitter.
Click here <a href="https://www.propertyobserver.com.au/images/2018/1/31/inflation%20below.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/2018/1/31/inflation%20below.jpg" alt="">
Economist Stephen Koukoulas says the inflation data continue's to scream "rate cut."
"Another qtr below target. Underlying looks like it's decelerating RBA says "sorry folks" to the 730,000 people unemployed, 1.1 million underemployed &amp; the 12 million lucky to get a 2% pay rise," Koukoulas tweeted.
IFM chief economist Alex Joiner disagreed.
"AU  CPI data slightly weaker than expected on headline and 'core' measures, unlikely to shift the RBA's assessment of the inflation/wages environment materially at next week's board meeting."<a class="gmail-twitter-hashtag gmail-pretty-link gmail-js-nav" href="https://twitter.com/hashtag/ausbiz?src=hash"> </a>
Veteran ABC business journalist Peter Ryan says the RBA may be concerned at softer trimmed mean of 0.4 percent and 1.8 percent, with CPI inflation "a little weaker than expected."
CommSec's Ryan Felsman noted inflation is still under control.
"Inflationary pressures remain subdued so the Reserve Bank will remain on the sidelines for some time yet.
"But there was a modest lift in the rate of annual headline inflation, finishing a touch below the Reserve Bank’s forecast of 2.0 per cent for 2017. Petrol, tobacco, fruit and domestic travel and accommodation prices all rose over the quarter.
"Though this was partially offset by the continued decline in computing and telecommunications-related goods and services prices. 
"Underlying inflation - which excludes the more volatile energy and food components – also remained below the Reserve Bank’s target band of 2-3 per cent. 
"But the 2017 annual print was a touch above the Board’s 1.75 per cent forecast. 
"And underlying inflation looks well placed to be a touch above the Reserve Bank forecast for 2018 of 1.75 per cent.
"Still, not enough to prompt any action on interest rates," he said.
Pete Wargent shared a chart on underlying inflation which sits at 1.9 percent.
Click here <a href="https://www.propertyobserver.com.au/images/2018/1/31/wargent_chart.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/2018/1/31/wargent_chart.jpg" alt="">
To find out more information <a href="http://www.abs.gov.au/ausstats/abs@.nsf/latestProducts/6401.0Media%20Release1Dec%202017?OpenDocument" target="_blank">click here.</a>  
Westpac had suggested there was a downside risk to the December quarter CPI.
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jrobinson-rf4aSBido9

Inflation still weak as prices rise 0.6 percent in December quarter

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GUEST OBSERVER
The Westpac Melbourne Institute Index of Consumer Sentiment declined by 1.2 percent in August from 96.6 in July to 95.5 in August. 
The consumer mood has deteriorated over the last year with August marking the ninth consecutive month where pessimists are outnumbering optimists. We have not seen such a succession of weak reads since 2008.
The survey detail suggests increased pressures on family finances; concerns around interest rates; and housing affordability in NSW and Victoria are more than outweighing increased confidence around jobs.
The further weakening in consumer sentiment comes despite some positives leading into this month’s survey. The RBA again opted to leave interest rates unchanged at its August meeting while the Governor sent a clear signal in a recent speech that rates were on hold in the immediate future. Other positives include: a continued improvement in labour market conditions; lower petrol prices (average pump prices down 15c/litre nationally since early June) and a booming Australian dollar, which briefly touched USD 0.80.
<a href="https://www.propertyobserver.com.au/images/2017/08/09/Screen%20Shot%202017-08-09%20at%2010.48.03%20AM.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/08/09/Screen%20Shot%202017-08-09%20at%2010.48.03%20AM.png" alt="">
The Index components point to clear pressure on family finances. The sub-index tracking views on ‘finances vs a year ago’ fell 5.1% to 78.1, the lowest level since June 2014, when consumers were shocked by the Abbott government’s first Budget. Much of the weakness is likely to reflect a mix of weak growth in wages; increases in key costs such as electricity and emerging concerns about rising interest rates.
Despite the bleak picture around current finances, consumer expectations are more upbeat. The sub-index tracking expectations for ‘finances over the next 12 months’ firmed 2.1% to 100.4 in August. A reading over 100 indicates that optimists slightly outnumber pessimists. Consumers were also a touch more positive on the economy: the ‘economic conditions, next 12 months’ sub-index nudged up 0.4%; and the ‘economic conditions, next 5 years’ sub-index posted a stronger 2.3% gain, though coming off a sharp 9.6% drop over the previous two months.
However the weak picture on current finances appears to be affecting consumer attitudes towards major purchases. The ‘time to buy major a household item’ sub-index fell 4.9%, unwinding most of the 6% improvement seen over June- July. Notably, the pull-back has come despite increasingly aggressive price discounting amongst retailers and a likely further improvement in purchasing power from a higher Australian dollar – up over 6c US from its low in May to nearly US 0.80.
Some of the softening in sentiment in August may be a delayed reaction to recent mortgage rate increases – the major banks raised rates on ‘interest only’ mortgages in  late June. After posting a surprisingly firm 4.7 percent rise in July, sentiment amongst consumers with a mortgage fell 6.3 percent in August. Note that despite the increase in ‘interest only’ rates, the average standard variable mortgage rate declined a little between June and August.
Perhaps more importantly, most consumers expect rates to move higher over the next year. Responses to an extra question this month around the outlook for mortgage rates show that, of those consumers with a view, 71 percent expect rates to be higher in 12 months; 27 percent expect rates to be steady; and just 2.6 percent expect further rate cuts. That compares to 60 percent expecting higher rates when the question was last run in February and just 37 percent this time last year.
The one relative bright spot for consumers continues to be around jobs. The Westpac Melbourne Institute Unemployment Expectations Index declined 2.6 percent to 132.5 in August  (recall that lower reads mean fewer consumers expect unemployment to rise in the year ahead). The Index is now at its lowest level since November 2011.
<a href="https://www.propertyobserver.com.au/images/2017/08/09/Screen%20Shot%202017-08-09%20at%2010.49.23%20AM.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/08/09/Screen%20Shot%202017-08-09%20at%2010.49.23%20AM.png" alt="">
Sentiment around housing improved slightly in August. The ‘time to buy a dwelling’ index edged 0.8% higher but remained at a low level by historical standards. The detail shows mixed moves across different regions with buyer sentiment falling towards very low levels in Sydney and Melbourne – where affordability pressures remain acute – but surging in Western Australia, where affordability has improved markedly.
Consumer expectations for house prices also firmed slightly overall. The Westpac Melbourne Institute Index of House Price Expectations rose 0.6%, extending last month’s 8.6% bounce. Expectations consolidated in the major eastern states but rose strongly in WA which posted its second strongest reading since late 2014.
The Reserve Bank Board next meets on September 5. There is no doubt that the Board will continue to leave the cash rate on hold. The more interesting question is whether, as expected by markets and signalled by consumers’ responses in this survey, the RBA will raise rates next year. High business confidence and improving employment conditions along with the Bank’s own upbeat growth forecasts support the case for higher rates. On the other hand we continue to see evidence of a downbeat consumer and signs that the housing markets are set to slow under the weight of stretched affordability.
Our view is that these factors will slow growth and, along with an inflation rate which remains stubbornly below the Bank’s target zone, will preclude the need for higher rates next year. 
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BILL EVANS is chief economist of <a href="https://www.westpac.com.au/" target="_blank">Westpac</a>.
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