<a href="https://www.apartments.com.au/developments/broadbeach-qld-4218">Broadbeach</a> offers plenty of reasons to live vertically, but moving from a substantial family home into an apartment can expose the compromises of high-density living. Privacy, room for guests and usable living space tend to matter more when an apartment is intended as a permanent home rather than an occasional coastal base.

A typical residential floor at <a href="https://www.apartments.com.au/new-apartments/the-eveleigh-broadbeach-7-9-surf-parade-broadbeach-qld-4218">The Eveleigh</a>, on Surf Parade,&nbsp;contains just four apartments. The 94-residence development by <a href="https://www.apartments.com.au/developers/hirsch-faigen">Hirsch &amp; Faigen</a> is predominantly made up of expansive three-bedroom homes, with a limited collection of half-floor penthouses above.

Across the apartment floors, <a href="https://www.apartments.com.au/architects/rothelowman">Rothelowman</a> has used the relatively limited number of residences to give each home greater access to natural light and outlook. Living spaces extend towards full-height glazing, while a series of bay windows frame selected views across the Pacific Ocean, city and hinterland rather than treating the building edge as a continuous wall of glass.

&nbsp;

[smartcode_project:default project_id=149670 project_image_fid=360965]

“The apartment floors deliver a collection of homes that embrace controlled outlook via a series of bay windows deliberately framing moments of view,” Rothelowman Director Kim Lowman said.

From outside, those projecting forms contribute to the tower’s faceted profile. Strong horizontal and vertical elements establish its proportions, while the changing position of the sun alters the light, shadow and reflection across the façade throughout the day.

The same attention moves inside the apartments, where the material palette combines warm timber, natural stone, metallic detailing and softer curved forms. Kitchens sit within the main living zone, with stone island benches, integrated joinery and European appliances, before the living areas extend towards the glazing and the outlook.

&nbsp;

[smartcode_project:default project_id=149670 project_image_fid=360981]

Three genuine bedrooms provide room to accommodate family and guests, while two secure car spaces and storage address some of the practical considerations that can become more noticeable when moving from a larger home. Feedback from the display suite has centred on the warmth and restraint of the interiors, with buyers commenting that the residences feel like homes rather than conventional coastal apartments.

A limited collection of half-floor penthouses occupies the upper levels, increasing the scale of the living spaces and adding private balconies and elevated finishes. From this position, the outlook extends between the ocean and hinterland.

Outside the private residences, The Eveleigh separates its shared spaces between the podium and rooftop. The podium is centred on wellness, with subtropical landscaping surrounding a swimming pool and pool terrace, yoga garden, private gymnasium, sauna and hot and cold plunge facilities. Landscaped retreats and pavilions provide additional places to sit away from the main recreation areas.

&nbsp;

[smartcode_project:default project_id=149670 project_image_fid=360966]

Higher in the building, a rooftop pavilion and private dining suite sit alongside resident lounge, barbecue and outdoor dining areas, opening towards panoramic views across the ocean, city and hinterland.

“Buyers are no longer just looking for an apartment, but a lifestyle where they can relax, reset, and enjoy a balanced way of living,” Hirsch &amp; Faigen Director of Sales Matt George said.

Interest to date has come from established owner-occupiers and interstate lifestyle purchasers, including buyers planning a future move to the Gold Coast. Many are coming from larger homes and want to reduce ongoing maintenance without giving up space for family and guests, privacy, two car spaces or the ability to entertain at home.

&nbsp;

[smartcode_project:default project_id=149670 project_image_fid=360969]

Much of that daily life can also take place beyond the building without requiring a drive. Kurrawa Beach and Pratten Park are an easy walk from Surf Parade, while Pacific Fair, Oracle Boulevard, The Oasis, restaurants, cafés, entertainment and public transport are also within walking distance.

The Eveleigh is Hirsch &amp; Faigen's fourth Gold Coast development since entering the market in 2021, following The Hemingway at Palm Beach, The Emerson at Kirra and Yves at Mermaid Beach. Each of the preceding projects sold out before completion.

“Broadbeach had been on our radar throughout our time operating on the Gold Coast,” the developer said. “Following our projects in Palm Beach, Kirra and Mermaid Beach, Broadbeach represented the natural next step for the business.”

The Surf Parade site brought together proximity to the beach, protected coastal outlooks and walkability to dining, shopping and recreation. Hirsch &amp; Faigen also identified the street as an emerging premium residential address, with enough separation from Broadbeach's busier destinations to retain a quieter environment at home.

The Eveleigh is now under construction by Maxcon, with completion forecast for mid-2028. Three-bedroom residences are currently available from $2.87 million.

[smartcode_project_cta:default project_id=149670]

Joel Robinson

The Eveleigh brings house-like apartments to Broadbeach

A long-stalled Campbelltown development site is back in play, with new plans for 139 apartments set to supersede a mixed-use scheme approved almost a decade ago but never built.

The new proposal for 28 Cordeaux Street would deliver 116 market and 23 affordable apartments in a part 14-storey building, bringing a substantial new project into a Campbelltown market where new apartment supply remains limited.

Plans have been filed over the 3,092 sqm corner site at Moore-Oxley Street, around 600 metres from Campbelltown Railway Station and the city-centre retail core.

The site already carries a mixed-use residential approval dating to 2016. Doroch Architects has now been engaged on a larger replacement scheme, which is progressing as a State Significant Development Application following a Housing Delivery Authority determination in August 2025.

The apartment mix comprises 39 one-bedroom, 72 two-bedroom and 28 three-bedroom residences. Two-bedroom apartments make up just over half of the project, while three-bedroom homes account for 20 per cent.

<img alt="First look: New 139-apartment plans revive long-stalled Campbelltown city centre site" data-entity-type="file" data-entity-uuid="136dd5b9-3791-4da6-9e31-76f533f5b4de" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Campbelltown%20da2.png?VersionId=LgOSy9nwf5u.MGswBBwaGGxuX8QpHSl_" />

Of the 139 apartments, 23 will be delivered as affordable housing under the in-fill affordable housing provisions of the Housing SEPP. The affordable component represents 15 per cent of the residential gross floor area and will be managed by a registered Community Housing Provider.

Doroch has sought to break the scale of the building into two distinct elements, with a masonry podium of around four storeys establishing the street edge before the residential tower steps back above.

The corner position has shaped that approach. Cordeaux Street faces toward the commercial and civic centre, while Moore-Oxley Street leads into the lower-scale residential neighbourhood to the south, and the design verification report describes the site as "bridging the commercial core to the north and established residential areas to the south."

The podium will be expressed predominantly in face brick, while the upper levels shift to brushed and grooved concrete cladding with darker metal detailing. Recessed sections, deep balcony edges and landscaping break down the upper form, with an approximately 11.8-metre setback to the northern boundary addressing the adjoining St Peters Anglican School.

<img alt="First look: New 139-apartment plans revive long-stalled Campbelltown city centre site" data-entity-type="file" data-entity-uuid="c8b3d2d3-c561-4bfc-a5d9-a68c0c10dac1" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Campbelltown%20da1.png?VersionId=AeAEyJU02Gk2k5noUj2StziCvdQ7fW4B" />

Campbelltown has been starved of new residential developments in the last decade.

The only other notable development set to come to market this year is ALAND's Queen Square, a mixed-use precinct on over two hectares that will comprise apartments above a vibrant ground-level retail and hospitality dining precinct.

First look: New 139-apartment plans revive long-stalled Campbelltown city centre site

First Look: Sherlock Construction pitches apartments for low-rise Deception Bay

Queensland builder-developer MAYD has revealed the first look at its major North Kirra beachfront development, lodging amended plans that reduce the number of apartments and increase the proportion of larger residences.

The project is planned across a substantial 4,742 sqm amalgamated site spanning seven lots at <a href="https://www.apartments.com.au/new-apartments/2-6-pacific-parade-bilinga-qld-4225">2-6 Pacific Parade</a> and 27-33 Golden Four Drive in Bilin​ga, directly opposite Nor​th Kirra Beach.

<a href="https://www.apartments.com.au/developers/mayd-group">MAYD</a> secured the site for $32.5 million in 2025, in what was one of the Gold Coast's largest property transactions of the year.

The development will be delivered across two stages, with the first stage carrying an estimated gross realisation value of around $360 million.

The latest amendments seek to reduce the overall apartment count and shift the project further toward the owner-occupier market, with larger residences designed for buyers wanting considerably more space than traditionally offered in a beachfront apartment.

The residential mix will include townhomes, oversized two-bedroom apartments, substantial three-bedroom residences and four-bedroom homes.

MAYD has appointed Cera Stribley to lead the architecture and interiors, with the Melbourne-based design practice drawing on the beachfront setting through a series of ocean-facing terraces and heavily landscaped balconies.

Strong horizontal forms and curved balconies will define the exterior, with subtropical landscaping integrated throughout the building to soften the built form and increase the connection between the residences and the beachfront.

The project will also include an extensive collection of resident wellness and lifestyle facilities, continuing the broader shift across the Gold Coast's luxury apartment market toward larger homes supported by resort-style amenity.

<img alt="MAYD" data-entity-type="file" data-entity-uuid="d1bcbb05-e659-4b47-8bd4-1e595315e2ad" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-27%20at%202.05.03%E2%80%AFPM.png?VersionId=jj0XEud1X1DuLt7_KyElhjMdZGOXmLHP" />

MAYD Founder Todd Mould said North Kirra was increasingly appealing to buyers attracted to the more established, lower-density character of the southern Gold Coast.

"North Kirra presents one of the most compelling luxury residential opportunities currently emerging in Australia, combining absolute beachfront with the character and authenticity that buyers are increasingly seeking, and the same sense of tight-knit community that defined Burleigh and Currumbin perhaps 10 or 15 years ago," Mould said.

"With Gold Coast Airport on its doorstep, it also offers a level of accessibility that broadens its appeal across almost every market demographic."

The project comes as the southern Gold Coast continues to attract an increasing share of high-end apartment development and buyer activity.

Kirra in particular has emerged as one of the region's more tightly held beachfront markets, with its relatively low-density character, established surf and hospitality scene and proximity to Gold Coast Airport differentiating it from the higher-density markets further north.

Mould said those characteristics had informed the approach MAYD and Cera Stribley had taken to the project.

"We've worked closely with Cera Stribley to create a vision that is deeply connected to its surroundings," he said.

"Inspired by the coastline itself, the architecture has been shaped around space, privacy and resort-style living, creating a collection of homes that reflects the next generation of luxury on the southern Gold Coast."

MOTIV Managing Director Carly Cottam, who has been appointed to market the project, said buyer attention had continued to move south along the Gold Coast.

"Purchasers who may once have defaulted to Broadbeach, Main Beach or Surfers Paradise are increasingly recognising the value of a genuine beachfront location that offers lower density, strong amenity and a more established sense of community," Cottam said.

"Kirra has a powerful combination of growing demand and genuine scarcity. Beachfront supply is inherently constrained, the area remains relatively low density, and buyers are increasingly placing a premium on locations that feel established, uncrowded and authentic rather than heavily developed."

Cottam said the proximity to Gold Coast Airport was also proving increasingly important for interstate and second-home buyers.

"Being minutes from Gold Coast Airport makes it particularly compelling for interstate buyers, frequent travellers and second-home purchasers who can access an authentic coastal lifestyle almost immediately after stepping off a flight."

The acquisition takes MAYD's active development portfolio to more than $500 million, with the North Kirra project representing one of its largest undertakings to date.

MAYD is targeting an early 2027 launch.

First look at MAYD's North Kirra mixed-use precinct

<main data-perf-region="main">
Castle Hill, the longtime hub of the Hills District, has been one of the major beneficiaries of Sydney's Metro expansion, with improved connectivity helping drive continued population growth, development and buyer demand across the Hills District.

But despite that growth, the suburb has seen relatively few major new apartment projects brought to market over the past 18 months.

Hills District developer Reve Group is looking to fill that gap with <a href="https://www.apartments.com.au/new-apartments/nova-r-ve-castle-hill-2-garthowen-crescent-castle-hill-nsw-2154">Nova Rêve</a>, a major new mixed-use precinct on the corner of Garthowen Crescent and Old Castle Hill Road, a short walk from Castle Hill Metro Station and Castle Towers.

[smartcode_project:default project_id=152737 project_image_fid=377679]

The project will comprise three residential towers alongside a hotel, restaurants, cafes and a skybar, more than 1,600 sqm of ground-floor retail and almost an acre of landscaped gardens.

It represents the largest project undertaken by Reve Group, the development arm of the Kassis family, which has been building across the Hills District for more than 30 years through Kassis Homes.

[smartcode_project:default project_id=152737 project_image_fid=377675]

Nova Rêve also represents a significant step up from the family's first apartment development, Grand Rêve, which was delivered nearby on Garthowen Crescent.

Grand Rêve introduced larger, house-like apartment layouts and premium inclusions including Wolf and Sub-Zero appliances to the Castle Hill market.

Nova Rêve takes that approach to a precinct scale, combining the residential component with hospitality, retail and substantial public and resident landscaping.

[smartcode_project:default project_id=152737 project_image_fid=377685]

Reve Group Managing Director Sam Kassis said the project reflected the family's three decades of building in the Hills, which has evolved from trophy homes on quarter-acre blocks to larger-scale apartment development.

"Grand Rêve was our first apartment project here and it showed us what this pocket of Castle Hill could be. Nova Rêve is the refinement of that idea: not just apartments, but a place the whole suburb can use," Kassis said.

A key part of that approach is the hotel, which has been designed to operate as an amenity for the wider Castle Hill community rather than solely hotel guests.

It will include restaurants, cafes, skybars and all-day dining, alongside conference and event facilities catering to business functions, community groups and private events.

At ground level, more than 1,600 sqm of shops and cafes will open onto the surrounding streets and landscaped areas.

Almost an acre of gardens designed by Land and Form Studios will run through the precinct, incorporating pathways, seating, barbecue areas and children's play spaces.

[smartcode_project:default project_id=152737 project_image_fid=377680]

Reve Group's Romio Georges said creating an active ground plane had been central to the planning of Nova Rêve.

"There are gardens with pathways, barbecues, seating and play areas, shops and cafes opening onto the street, and a hotel with restaurants and a skybar that anyone in Castle Hill can walk into," Georges said.

The project's elevated position on one of Sydney's highest ridgelines will also provide apartments with outlooks toward the Sydney skyline, surrounding parkland and the Blue Mountains.

More than 80 per cent of the apartments will occupy corner positions, with Turner responsible for both the architecture and interiors.

&nbsp;

[smartcode_project_cta:default project_id=152737]

<h3 data-end="3697" data-section-id="q3n5ak" data-start="3672">&nbsp;</h3>
</main>

Nova Rêve arrives as Reve Group bets on Castle Hill's next growth phase

Interest Rates

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The NAB will increase its standard variable rate for owner-occupiers and investor property loans.
The standard variable rate for owner-occupiers will increase from 5.25 percent to 5.32 percent.
Investor property loans will increase from 5.5 percent to 5.80 percent. 
The standard variable rate increase may add an extra $13 a month on a $300,000 principal and interest mortgage.
The increase came after the US Federal Reserve increased its key interest rate.
Prime Minister Malcolm Turnbull told Network Seven the increase by NAB is certainly not welcome.
"But as you know, the banks obviously have to manage their own affairs, and they have funding costs," he said.
In the NAB's March Global &amp; Australian Economic Perspective report, group chief economist Alan Oster noted the RBA is becoming increasingly focused on financial stability considerations, particularly household balance sheets in the context of a re-acceleration in house price growth in Sydney and Melbourne amidst elevated levels of household debt. 
"Recent comments from RBA officials raise the possibility that macro-prudential measures may be stepped up and we now consider a further rate cut as unlikely in this environment," he said.
"We have removed our expectation of a 25bp rate cut in late 2017, although continue to flag the risk of further monetary policy easing at some point given our concerns about economic growth and the labour market in 2018.
"As a result of our RBA view change, we are revising up our 2018 AUD/USD forecast slightly while maintaining our 0.70 end-2017 projection. A weaker AUD is still likely on a combination of further US interest rate-driven US dollar strength, lower commodity prices and potentially some deterioration in risk sentiment from current elevated levels. 
"Dwelling investment increased 1.2 percent in Q4, although that only partly unwound the Q3 decline – a subdued result given the anticipated rebound from temporary weather-related disruptions and the record level of construction projects in the pipeline.
"There are, however, signs that the contribution of dwelling investment to economic growth may soon peak.
"New medium-density approvals have come off sharply from their highs, although they are still at elevated levels (especially in Victoria). Meanwhile, housing markets in Sydney and Melbourne continue to defy belief in 2017, with property prices showing no signs of slowing despite tightening credit conditions and concerns about affordability."
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j.ballantyne1990-6AQqhLzZaK

NAB hikes rates for owner-occupiers, property investors

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GUEST OBSERVER
As things go the Dutch election was probably the most important event last night - but I will start with the Fed.
Basically the Fed was more benign than expected. Yes they raised the Fed Funds interest rate by another 0.25 percent to a range of 0.75 percent to 1 percent on the back of ongoing improvements in the labour market and the US economy and progress towards the 2 percent target for core inflation.
The Fed continues to describe the risks to the outlook as roughly balanced and has taken to describing its inflation goal as “symmetric” which highlights that it’s not a hard goal but is to be achieved over the cycle (but no doubt there will be a lot of hot air devoted to what “symmetric” precisely means).
<a href="https://www.propertyobserver.com.au/images/2017/03/16/Screen%20Shot%202017-03-16%20at%2011.15.16%20AM.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/03/16/Screen%20Shot%202017-03-16%20at%2011.15.16%20AM.png" alt="">
But the key was that the Fed did not signal a faster pace of tightening than had already been indicated. The median dot plot of Fed officials interest rate expectations remained unchanged at three hikes for this year and another three hikes for next year and the Fed continues to expect that future hikes will be “gradual” (albeit less gradual than in 2015 and 2016).
Of course this does not mean that the Fed poses no threat. Market expectations still look remarkably complacent being 1% or so below the Fed’s dot plot for 2019 and at some point in the next year the focus will shift to the Fed allowing its balance sheet to start running down (which will probably be achieved by letting bonds roll off as they mature rather than reinvesting the proceeds). This all points to a resumption of the bond bear market at some point.
But for now markets liked the Fed’s decision with bonds rallying, the US dollar falling and shares rallying as fears that the Fed would get more aggressive did not pan out. Support for this benign response also comes from the likelihood that headline inflation measures will soon peak as the low base for commodity prices a year ago starts to drop out of annual inflation measures and indications that the US economy is still far from booming (March quarter GDP growth looks like coming in below 2% again).
Up until around twenty years ago there was a saying that shares reacted to Fed hikes with “three steps and a stumble”, ie the first two Fed rate hikes had little impact but the third caused a stumble.
In the last two decades this appears to have changed such that that first hike causes weakness (as we saw around June 2004) but subsequent hikes are largely looked through because they are seen as reflecting better economic conditions and hence profits, enabling the bull market to continue until eventually monetary policy becomes tight threatening the economy and bringing an end to the bull market.
So far the US share market seems to be following this pattern, with share market falls around the first rate hike in December 2015 but taking the last two hikes in its stride. Back in the 2004-2006 tightening cycle rates were going up at every Fed meeting and it took 17 hikes to ultimately kill the bull market back then off. With rates starting much lower in this cycle and the process being far more gradual this time around we still have a fair way to go before US monetary policy becomes tight in a way that threatens the bull market in shares. 
<a href="https://www.propertyobserver.com.au/images/2017/03/16/Screen%20Shot%202017-03-16%20at%2011.16.28%20AM.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/03/16/Screen%20Shot%202017-03-16%20at%2011.16.28%20AM.png" alt="">
Meanwhile, in the Netherlands exit polls point to the current PM Mark Rutte’s Liberal Party winning 31 seats in the 150 seat parliament against Geert Wilders’ Eurosceptic Freedom party only getting 19. While the Liberal Party is down on 41 seats from the 2012 election it will lead negotiations to form a centrist coalition government (which usually takes months) and Rutte will most likely remain PM.
If confirmed this would be a far worse outcome for the Freedom Party than had been expected, particularly given that turnout was high at over 80 percent. It would mark the third election in the Eurozone in a row since the Brexit vote that has seen support for anti-Euro populists gain less support than expected: support for Podemos declined in the Spanish election straight after Brexit, the Austrian’s voted for the pro-Euro candidate in their December election and now the Netherlands look to have stuck with pro-Euro centrists as well. 
Maybe the Europeans have seen Brexit and Trump and decided that’s not for them! Popular support for the Euro remains high and this is clearly working against populist/nationalist parties and is likely to do so in the elections in France starting next month too. Italy is probably the biggest risk but the key message is that the risk of a break up in the Eurozone is overstated and this leaves Eurozone shares and peripheral bonds looking attractive. It’s also supportive of the Euro.
<a href="https://www.propertyobserver.com.au/https://plus.google.com/110172465327488162875?rel=author">SHANE OLIVER</a> is head of investment strategy and economics and chief economist at <a href="https://www.ampcapital.com.au/home">AMP Capital</a> and is responsible for AMP Capital's diversified investment funds.
 
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soliver-smf6LQXgW9

Fed hikes but more benign than feared: Shane Oliver

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Even if the Reserve Bank of Australia keeps the cash rate steady, a JPMorgan Mortgage Industry Report has warned young property investors who are "materially dependent" on income generated from renting their property could face higher rates in the coming years.
It will occur as banks respond to global regulatory changes that will require them to hold higher levels of capital against such loans.
The report published by JPMorgan says Basel 4 will require banks to hold up to five times the amount of capital against investor loans materially dependent on rental income to repay the loan.
It was speculated this could lead to interest rates for loans to investors with deposits of less than 20 per cent rising 3 percentage points, lifting from the present rate of about 4.5 per cent to 7.5 per cent.
The international Basel 4 reforms, which are expected to be finalised soon and adopted in Australia in the coming years, require banks to carry capital based on loan-to-value (LVR) ratios rather than the probability that a loan will default.
So far the definition of "materially dependency" has been left vague by the Basel committee. According to analysis by JPMorgan and Digital Finance Analytics, property investors have already been hit by higher interest rates as banks try to avoid running into investor loan growth caps of 10 per cent imposed by the prudential regulator in late 2014.Since mid 2015, investor and interest-only loans had increased an average of 65 basis points.
JPMorgan analyst Scott Manning said these increases were just the beginning.
"We think the repricing we have seen to date ... is purely a toe in the water, [with banks] testing the elasticity of the market [and] the response from brokers and politicians," he told The Australian Financial Review.
There is a lot more pricing differential to come through the market ... [and] we can definitely see the prospects for significant amounts of refinancing."
It is tipped ANZ Banking Group would be the biggest beneficiary among the major banks of Basel 4, because it has the lowest market share and slowest growth rate for investor lending. The report co-author Digital Finance Analytics' Martin North noted banks do not necessary capture all expenditures that households have.
"There is more work to be done to capture the cost of living in households.
"Even with a small rate rise, more than 50 per cent [of investors in this categories] will struggle if there is a small rise in rates say up to 3 percent."
North warned the Australian investor market was "growing way too quickly" despite the 10 percent growth rate cap imposed by APRA
.
<div class="cq-article-content-paras section">
 
</div>
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JP Morgan warn low deposit property investors on looming Basel 4 impacts 

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The RBA’s increased focus on financial stability, particularly record high household debts amid rising housing prices will likely keep the central bank from further rate cuts in 2017, according to a recent report by the NAB.
Recent comments from RBA officials raise the possibility that “macro-prudential measures may be stepped up” and a further rate cut is unlikely anytime soon, said the Forward View – Australia,  report for March by NAB Group Economics.
“We have removed our expectation of a 25bp rate cut in late 2017, although continue to flag the risk of further monetary policy easing at some point given our concerns about economic growth and the labour market in 2018,” it said.
It said the property markets in Sydney and Melbourne “continue to defy belief in 2017, with property prices showing no real signs of slowing despite tightening credit conditions and concerns about affordability”.
<a href="https://www.propertyobserver.com.au/images/2017/03/15/NABHousingPrices.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/03/15/NABHousingPrices.png" alt="">
The report said the economy’s contraction in Q3 was only a temporary setback as it bounced back in Q4 with broad-based growth amid higher commodity prices.
But labour income continued to be weak, a fact pointed to recently by RBA Governor Philip Lowe who said that low wages growth and record high household debt are a sobering combination.
The report said housing finance has remained strong, especially for investors. Auction volumes are also solid, and auction clearance rates are up from the levels seen at the same time last year – suggesting the markets remain tight. 
<a href="https://www.propertyobserver.com.au/images/2017/03/15/NABAuctionClearance.png" target="_blank">Click to enlarge</a>
 <img src="https://www.urban.com.au/images/2017/03/15/NABAuctionClearance.png" alt="">
Elsewhere, price movements were relatively mixed in February, but the trends have generally been fairly positive in most markets. 
“Even Perth prices have been showing signs of stabilisation,” it said.
NAB says recent government measures to ease housing affordability, especially for first home buyers (FHB’s), could actually push prices higher.
The Victorian government recently announced stamp duty cuts for house sales under $600,000.
It said government measures along with the “the surprising momentum could suggest some further upside risk to our price forecasts”. 
Although, no further rate cuts would offset it to some extent. 
The research said it was leaving “our property price forecasts unchanged. Our national forecasts for 2017 are 3.4 percent for houses and 0.8 percent for units.”
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prateek24-ezbwHMbNAk

NAB drops rate cut forecast for 2017 

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<h1 class="page-title">Statement by Philip Lowe, Governor: Monetary Policy Decision</h1>
At its meeting today, the Board decided to leave the cash rate unchanged at 1.50 per cent.
Conditions in the global economy have continued to improve over recent months. Business and consumer confidence have both picked up. Above-trend growth is expected in a number of advanced economies, although uncertainties remain. In China, growth is being supported by higher spending on infrastructure and property construction. This composition of growth and the rapid increase in borrowing mean that the medium-term risks to Chinese growth remain. The improvement in the global economy has contributed to higher commodity prices, which are providing a significant boost to Australia's national income.
Headline inflation rates have moved higher in most countries, partly reflecting the higher commodity prices. Long-term bond yields are higher than last year, although in a historical context they remain low. Interest rates are expected to increase further in the United States and there is no longer an expectation of additional monetary easing in other major economies. Financial markets have been functioning effectively and stock markets have mostly risen.
The Australian economy is continuing its transition following the end of the mining investment boom, expanding by around 2½ per cent in 2016. Exports have risen strongly and non-mining business investment has risen over the past year. Most measures of business and consumer confidence are at, or above, average. Consumption growth was stronger towards the end of the year, although growth in household income remains low.
The outlook continues to be supported by the low level of interest rates. Financial institutions remain in a good position to lend. The depreciation of the exchange rate since 2013 has also assisted the economy in its transition following the mining investment boom. An appreciating exchange rate would complicate this adjustment.
Labour market indicators continue to be mixed and there is considerable variation in employment outcomes across the country. The unemployment rate has been steady at around 5¾ per cent over the past year, with employment growth concentrated in part-time jobs. The forward-looking indicators point to continued expansion in employment over the period ahead.
Inflation remains quite low. With growth in labour costs remaining subdued, underlying inflation is likely to stay low for some time. Headline inflation is expected to pick up over the course of 2017 to be above 2 per cent, with the rise in underlying inflation expected to be a bit more gradual.
Conditions in the housing market vary considerably around the country. In some markets, conditions are strong and prices are rising briskly. In other markets, prices are declining. In the eastern capital cities, a considerable additional supply of apartments is scheduled to come on stream over the next couple of years. Growth in rents is the slowest for two decades. Borrowing for housing by investors has picked up over recent months. Supervisory measures have contributed to some strengthening of lending standards.
Taking account of the available information the Board judged that holding the stance of policy unchanged at this meeting would be consistent with sustainable growth in the economy and achieving the inflation target over time.
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jchancellor-FAypfDUnLy

Rental growth slowest in two decades: RBA Governor Philip Lowe's March 2017 statement

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At its meeting today, the Board decided to leave the cash rate unchanged at 1.50 percent.
Tim Lawless, CoreLogic head of research said the RBA is unwilling to drop rates because this would likely add further fuel to the housing market.
"They don’t want to push rates higher as this will stifle consumption and investment more broadly as well as potentially place some upwards pressure on the Australian dollar," he said.
"While interest rates remain at their current low level, and in the absence of additional macro prudential measures, we should expect housing demand from investors and owner occupiers to remain strong, particularly in those cities where economic conditions remain strong and migration rates remain high. 
"No doubt, one of the key topics of conversation at this month’s RBA board meeting will be around housing market conditions and the ongoing rebound in the rate of capital gains over the second half of 2016 and first two months of 2017.
"The CoreLogic monthly hedonic index shows capital city dwelling values have increased by 7.8 percent since the May ‘16 rate cut. 
"The renewed exuberance in the housing market over the past eight months is due to more than just low mortgage rates. 
"The reacceleration in capital gains also coincides with a substantial rebound in investment purchasing activity which has been a key driver of market demand and upwards price pressures."
 
 
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Unchanged RBA March 2017 cash rate decision

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More than 20 percent of borrowers are choosing to fix their home loan, new data from a leading mortgage brokers suggests, with the trend likely to go up as lenders continue to lift their interest rates out of cycle with the central bank.
Fixed rate home loans accounted for 22.22 percent of all loans written in February, down slightly from 22.97 percent in January, according to national home loan approval data from Mortgage Choice.
“While fixed rate demand was down slightly in comparison to last month, the fact that over 20 percent of borrowers are choosing to fix their mortgage is still significant,” Mortgage Choice chief executive officer John Flavell said.
“Of course, given that so many lenders have raised their interest rates over the past few weeks, I am not surprised to see one in five borrowers opting for a fixed rate home loan.” 
Flavell said he wouldn’t be surprised to see even more borrowers choosing to fix part or all of their mortgage, as lenders continue to lift their interest rates out of cycle with the Reserve Bank of Australia.
“In recent weeks, the Reserve Bank of Australia’s governor Philip Lowe has made it clear that future rate cuts are now more unlikely than likely. With this in mind, it would appear the only way for rates to go is up,” he said.
“As more lenders start to lift their rates, we may see more borrowers choosing to fix their mortgage in a bid to avoid further rate hikes and provide themselves with some certainty around their regular mortgage repayments.”
<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/2017/03/02/MortgageChoiceCEO.jpg" alt="" width="429" height="643">  Fixed rate demand was highest in New South Wales, making up 24.17 percent of all home loans written throughout the month of February by the broker.   Queensland followed with fixed rate demand accounting for 23.32 percent of all loans written within the state.   Overall however, variable rate home loans – specifically ongoing discount mortgages – still remained the most popular product amongst borrowers.   Within Australia, ongoing discount home loans accounted for 44.34 percent of all mortgages written.   Flavell said with interest rates continuing to sit at near record lows, borrowers should be able to secure a good deal regardless of whether they choose a fixed or variable rate.   “At the end of the day, there is no right or wrong answer when it comes to selecting a home loan product, it all comes down to personal preference,” he said. 
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One in five property owners choosing fixed-rate loans: Mortgage Choice

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GUEST OBSERVER 
The Reserve Bank Board meets next week on March 7.
We can be certain that the decision from the Board will be to hold rates steady.
Recall the comments from the Governor in his answer to a question during his appearance before the House of Representatives Standing Committee on Economics, “At the moment the market pricing is for interest rates to be constant right through this year. That seems a reasonable proposition to me.... The central scenario of a period of stability of interest rates is quite reasonable to me.”
Now we have never framed our medium term forecasts around the views of the Reserve Bank – after all they are only “mortal” forecasters like the rest of us . Their forecasts can go awry and policy can change accordingly. But for the immediate future ( like next week) we can take the Governor’s views as definitive.
Our view since the rate cut in May last year has always been for a follow up move in August and the steady rates throughout the remainder of 2016 , 2017 and 2018.
We assess that at least the Governor currently has that view for 2017 but has not commented on the market implied two rate hikes in 2018.
His growth forecast in 2018 is 2.75 percent-3.75 percent (down from 3-4 percent) well above our forecast of around 2.5% (with downside risks). Achieving the RBA’s growth forecast in 2018 might be consistent with market pricing but, certainly, our forecast for a slowdown in 2018 is not consistent with rate hikes – below trend growth signals steady rates at best.
In his comments to the House the Governor considers the case for rate cuts in 2017. He points out that inflation is below the target range ( “a bit low”) and the unemployment rate is “a bit high”. We would assess full employment at around 5% so, at 5.8%, there is clear excess capacity in the labour market. Of course, that spare capacity is further emphasised in the latest wages report which showed wages growth at a record low of 1.8 percent.
However, his clear problem with leaning further on interest rates is “The main effect (of a rate cut) would be more borrowing for housing, pushing up house prices...”.
His concerns with the impact of rate cuts on the housing market are well based.
Consider figures 1 and 2.
Figure 1 shows recent trends in house prices in Australia. The recent periods of rate cuts (first half of 2015 - February and May) and second half of 2016 (rate cuts in May and August) are associated with significant increases in house price inflation. However, note the trends in the intervening period. These will not be lost on the Governor.
During the period (second half of 2015) when the Bank and APRA imposed macro prudential guidelines to slow the pace of lending to investors the pace of house price inflation (national) slowed from 13.7% (six month annualised to August 2015) to zero (6 month annualised to March 2016). In response to the May and August rate cuts house price inflation has lifted to 10% (6 month annualised to February 2017). 
<a href="https://www.propertyobserver.com.au/images/2017/03/02/Screen%20Shot%202017-03-02%20at%2011.52.00%20AM.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/03/02/Screen%20Shot%202017-03-02%20at%2011.52.00%20AM.png" alt="">
Figure 2 shows a similar trend for new lending for housing (key to Governor’s concerns about rate cuts just boosting household debt). In response to the rate cuts in 2015 new lending for housing peaked at $26.8 billion in August 2015 . It subsequently slowed to $23.8 billion by January 2016 (down 11%) only to pick up to $27.1 billion (up 14%) by December 2016 in response to the May and August rate cuts.
The conclusion that the Bank would have reached is that macro prudential policies do work and rate cuts stimulate prices and credit despite rates being so low.
Little wonder that the Governor noted at the Hearing when referring to recent macro prudential policies, “For us, that is a first order thing that we can do to limit the growth rate of investor credit and, I think, that has been a successful public policy intervention.” 
I assess that, given that both Sydney and Melbourne prices are up 14% (six month annualised – Core Logic data) the Bank and APRA may be considering even tighter macro prudential policies.
It is not only inflation and the unemployment rate that would be of concern to the Reserve Bank.
Throughout the Hearing he indicated a preference for a lower Australian dollar. He accepts that the AUD is probably around fair value but questioned the feed-back to activity from higher commodity prices with miners apparently reluctant to increase capacity and wage pressures in the sector continuing to ease.
He has also adopted a more conservative attitude to the consumer, expecting that the recent falls in the savings rate are unlikely to be sustained.
Most of this “mood” does not sit well with the expectation that growth will lift in 2018, particularly in the face of a downturn in residential construction. His “faith” that non mining investment will lift to reflect tightening capacity utilisation is not convincing particularly with the higher AUD and a more cautious consumer.
Overall we saw little in the comments at the Hearing to sway our expectation of a slowing economy in 2018. If, as we expect, the Bank will get around to adopting additional macro prudential policies to slow housing in the second half of 2017 the stage will be set for another year of steady rates in 2018.
With the economy slowing and macro prudential policies further tightening housing markets, the risks to rates in 2018 will be to the downside rather the upside as currently expected by markets. 
BILL EVANS is chief economist of <a href="https://www.westpac.com.au/" target="_blank">Westpac</a>. 
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RBA to hold interest rates next week: Westpac's Bill Evans

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<img src="https://counter.theconversation.edu.au/content/73355/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1">GUEST OBSERVER
The two central banks that matter most for Australians - the Reserve Bank of Australia (RBA) and the US Federal Reserve (the Fed) - released minutes from their latest meetings this week. And although there were not a lot of surprises, there was a fair bit of detail about what we can expect on interest rates going forward.
The Federal Open Market Committee’s (FOMC) main message was unmistakable -expect interest rate rises, and expect them sooner rather than later:
Many participants expressed the view that it might be appropriate to raise the federal funds rate again fairly soon if incoming information on the labor market and inflation was in line with or stronger than their current expectations or if the risks of overshooting the committee’s maximum-employment and inflation objectives increased.
and that they:
continued to see only a modest risk of a scenario in which the unemployment rate would substantially undershoot its longer-run normal level and inflation pressures would increase significantly.
This is exactly what markets have been expecting, and it seems clear that the balance of risks is no longer that the labour market is too weak or inflation too low, but that the Fed might wait too long to continue its path of rate rises.
The really big unknown is how the Fed goes about unwinding a good chunk of its balance sheet, which involves US$2.64 trillion (with a “T”) of treasury bonds that were purchased as part of its effort to stimulate the economy in the wake of the financial crisis. The Fed also holds around US$1.75 trillion of mortgage-backed securities (“MBSs”).
The natural way to unwind this is by not reinvesting those funds when the securities mature. The Fed gets its money back and doesn’t purchase new treasuries or MBSs.
But it’s more complicated than that. New post-crisis capital rules require commercial banks to keep a large amount of reserves sitting at the Fed. This is now around US$2 trillion. The Fed has to match this liability with assets, like treasuries.
Nobody knows, but my guess is that the Fed shifts MBSs to treasuries over time, but has to keep a large asset side of the balance sheet. This suggests that maybe the whole balance sheet unwinding problem may not be as significant an issue as first thought. But this is genuinely unchartered territory.
At home, the RBA minutes confirmed the ongoing dilemma governor Philip Lowe faces. Like his predecessor, Glenn Stevens, Lowe is trying to manage: unemployment, the Aussie dollar exchange rate, business investment, overall growth, inflation and housing price stability all at the same time, but with only one instrument: the cash rate.
To see this, just look at the opening sentences of the long section of the RBA minutes titled “Considerations for Monetary Policy”. They read as follows:
In considering the stance of monetary policy, members viewed the near-term prospects for global growth as being more positive, although recognised the risks from policy uncertainty in the medium term… Domestically, the economy was continuing its transition following the end of the mining investment boom… Non-mining business investment was also expected to gain some momentum…
Conditions in housing markets varied considerably across the country… Inflation outcomes for the December quarter were much as had been expected and there had been very little change to the forecast for inflation…Labour cost pressures were expected to build gradually from their current low levels…
Wow. That’s a whole lot of targets to try and hit with a single (non-magic, non-silver) bullet. No wonder Dr Lowe has now taken to giving speeches that essentially plead businesses to invest.
It hasn’t quite gotten to “there’s never been a better time to be a business in Australia”. But close. It may, however, be that it’s never been a tougher time to be a governor of the RBA.
Richard Holden is professor of Economics and PLuS Alliance Fellow, UNSW and author for The Conversation. He can be contacted <a href="https://theconversation.com/profiles/richard-holden-118107" target="_blank">here</a>.
 
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There’s never been a tougher time to be a central banker

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GUEST OBSERVER
RBA Governor Lowe delivered a speech in Sydney titled “Australia and Canada – Shared Experiences”. It could have easily been titled, “Household debt, inflation targeting and monetary policy”.
The Governor’s remarks reaffirmed the increased importance that the RBA is placing on financial stability. And they were another strong hint that the hurdle for policy easing under Dr Lowe is higher than it was under former Governor Glenn Stevens.
A significant chuck of the speech was devoted to recent trends in housing and borrowing. While some policymakers have chosen to focus only on supply, Dr Lowe pointed to the impact that both demand and supply factors have had on price growth.
Specifically, the Governor put forward three explanations for high demand: (i) a population growing quickly for an advanced industrialised country (i.e. high immigration); (ii) “strong” demand from overseas residents; and (iii) the global monetary environment (i.e. low rates). On the supply side, Lowe noted that there has been, “underinvestment in transport infrastructure, which has limited the supply of well- located land at a time when demand for such land has been growing quickly”.
<a href="https://www.propertyobserver.com.au/images/2017/02/22/Screen%20Shot%202017-02-22%20at%2010.32.41%20AM.png" target="_blank">Click to enlarge</a> <img src="https://www.urban.com.au/images/2017/02/22/Screen%20Shot%202017-02-22%20at%2010.32.41%20AM.png" alt="">
This is a call from the Governor to further lift public investment. And he noted in the Q&amp;A that governments should not be afraid to borrow more to fund it.
Dr Lowe then went on to say that dwelling price rises have “gone hand in hand with a further pick-up in household indebtedness”. In other words, Australia has blown up the household balance sheet. This has been facilitated by rate cuts which have reduced the debt-servicing burden. As we argued recently, we think that this has brought down the neutral interest rate in Australia to just 3 percent. The Governor noted the “sobering” combination of households carrying more debt than ever before and multi-decade low nominal income growth. Basically Lowe does not want to see household indebtedness rise further.
Dr Lowe then went on to talk about inflation targeting and more specifically, how the RBA is dealing with, “sustained low inflation and rapid increases in borrowing and housing prices”. The Governor explicitly stated that choosing the right path back to target inflation is the one that “best promotes the welfare of the Australian people”. This statement is yet another indication that the Governor is willing to take a more flexible approach to the inflation target if it reduces the further build-up of household debt and risks to financial stability. One wonders whether the RBA would have eased policy in May and August last year if Lowe had been Governor.
From a monetary policy perspective, the overriding message from the Governor is that he is very reluctant to cut the cash rate from here. Lowe basically stated that it would take the unemployment rate to rise from here for policy to be eased again. As we have argued more recently, trends in the labour market are the one to watch in 2017 rather than the inflation prints. We expect core inflation to continue to print below the Bank’s target but that won’t be enough for Lowe to cut the cash rate.
<a href="https://www.propertyobserver.com.au/images/2017/02/22/Screen%20Shot%202017-02-22%20at%2010.33.46%20AM.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/02/22/Screen%20Shot%202017-02-22%20at%2010.33.46%20AM.png" alt="">
Finally, in the Q&amp;A session the Governor expressed concerns that wages growth is too slow. And he suggested that “some pickup in wages growth would be welcome”. We’d agree and would add that it is desirable that the fruits of rising commodity prices spill over to higher wages growth as has historically been the case. 
Gareth Aird is economist at Commonwealth Bank and can be contacted <a href="https://www.propertyobserver.com.au/https://au.linkedin.com/pub/gareth-aird/14/790/905">here</a>.
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