Perth’s new apartment market recorded its strongest quarter of sales since Q4 2021, with 412 apartments sold in Q1 2026 and a record quarterly sold value of $537 million, according to Urbis’ latest Apartment Essentials results.

Urbis said the March quarter result reflects strong, highly product‑specific demand across both ends of the market, from more attainable projects delivering at scale, through to premium stock being absorbed by equity‑rich downsizers.&nbsp;

David Cresp, Partner at Urbis, said the key story in Perth is not demand, it is the market’s ability to convert demand into delivered housing.&nbsp;

“This is the strongest sales quarter since Q4 2021, and it reinforces that demand in Perth is real and it’s local,” David Cresp said. “But the task now is delivery, turning that demand into projects that can actually be built and completed.”&nbsp;

[smartcode_project:default project_id=110291 project_image_fid=302785]

<h2>Affordable product leads, premium demand remains resilient</h2>

Sales in Q1 were led by more affordable projects, with The Boulevard (SKS Group) recording 115 sales in the quarter, the presentation noting this is only the second time a single project has surpassed 100 quarterly sales. The project was able to offer more affordable housing product right next to a train station.&nbsp;

Palmyra West (Finbar) also delivered strong results with 28 sales in Q1, following 84 sales in Q4, with an average price of under $800,000, underscoring depth of demand for well‑located, attainable new stock.&nbsp;

At the premium end, Urbis said downsizer demand is continuing, with the results highlighting Romeo (Applecross, Finbar) recording 75 sales and reaching almost 50% sold in one quarter.

Jual (Shenton Park, Celsius Property) also posted a strong quarter with 28 sales, reaching 39% sold in one quarter.

Urbis noted that Perth apartment demand is not speculative, not investor‑led, and not uniform, describing it as localised, often equity‑driven and highly product‑specific, a pattern reflected in the polarisation between strong “attainable” performers and premium downsizer product.&nbsp;

[smartcode_project:default project_id=148957 project_image_fid=364102]

<h2>Prices underpinned by costs, and the delivery risk is growing</h2>

Urbis said pricing pressure is cost not demand‑driven: construction costs and delivery risk are now a central constraint, with the results noting build costs remain elevated and volatile, and that energy, fuel and labour uncertainty weigh on feasibility.

David Cresp said a growing challenge for private Build‑to‑Sell developers is simply securing a builder in the current environment.

“Developers are really feeling the pressure from a building market that was operating at capacity and securing a builder is challenging,” David Cresp said, adding that even where a builder can be secured, “trying to get to the price that makes the development financially viable is incredibly challenging in the current market.”&nbsp;

Urbis’ broader WA commentary also notes that industry remains at or above capacity with lot and housing creation, and that many builders are limiting new sales to manage stretched workforces and fixed‑price contract pressures, conditions that flow directly into apartment feasibility and delivery timing.

[smartcode_project:default project_id=108869 project_image_fid=317905]

<h2>Supply: improving later, but still constrained, and Perth lags eastern benchmarks</h2>

While near‑term supply remains constrained, Urbis’ forecast shows completions lifting “Supply is forecast to be back above 1,500 apartments per annum for the first time since 2019”, with 1,775 completions forecast for 2026, and volumes remaining above that level over the following years.&nbsp;

Looking further ahead, completions are forecast to reach 2,500 in 2028, with the report noting 32% of that total is social/affordable, reflecting the role of government‑supported delivery in rebuilding the pipeline.&nbsp;

However, Urbis said Perth remains behind comparable markets on pipeline scale. In a national comparison of projects under construction, the report shows under construction Perth Build‑to‑Sell (BTS) at 3,446 apartments versus the Gold Coast at 7,922. Mr Cresp said “The challenge for Perth is how to we grow the delivery pipeline”.

Urbis’ conclusion is that Perth’s market is increasingly defined by product discipline and delivery certainty, with the research identifying “delivery certainty is key” and calling out builder risk and procurement models as core success factors, alongside “timing and staging”.&nbsp;

Joel Robinson

Perth apartment sales hit strongest pace since late 2021 as builder capacity tightens

<a href="https://www.apartments.com.au/developers/sammut-developments">Sammut Group</a> has secured development approval for its latest Brisbane apartment project, marking the Sydney developer’s next step in expanding its Queensland pipeline following the success of its debut Gold Coast development, Coast.

The approved project at <a href="https://www.apartments.com.au/new-apartments/44-glen-road-toowong-qld-4066">44 Glen Road, </a><a href="https://www.apartments.com.au/developments/toowong-qld-4066">Toowong</a> will deliver a 15-storey riverfront apartment building with 42 residences, significantly increasing the scale of the site’s previous approval for a smaller luxury scheme. Designed by Bureau^proberts, the development will comprise a mix of predominantly four-bedroom and two-bedroom apartments positioned to maximise Brisbane River and city views.

Sammut Director Julian Sammut said the group had been actively searching Brisbane for several years before identifying Toowong as the right fit.

“Brisbane was the right step for Sammut,” Sammut said.

“With the success of Coast we thought we should definitely look to do more in Queensland alone. We then pushed up to look at Brisbane. We've been looking for I'd say two to three years actually and it was hard to find the right location.”

<img alt="Sammut makes Brisbane apartment play" data-entity-type="" data-entity-uuid="" src="https://res.cloudinary.com/dz9xllyip/image/fetch/f_auto,c_limit,w_1440,q_75/https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/field/image/Screenshot%202025-12-23%20at%203.27.14%E2%80%AFPM.png?VersionId=dYAVIL7qdcGA8ojvkslSrLjczXFejSSx" />

Sammut said suburbs including New Farm and Teneriffe were considered before the group ultimately focused on Toowong due to its strong downsizer demographic and limited supply of developable riverfront land.

The site was acquired off-market after what Sammut described as a lengthy negotiation and planning process, with the developer pursuing an uplift to the original approval.

“We are DA approved now which is very exciting,” Sammut said.

“We've had our change approval come through and we've obviously doubled the height, 15 storeys plus rooftop. We've got 42 amazing apartments that are going to be coming to market soon.”

<img alt="Sammut makes Brisbane apartment play" data-entity-type="" data-entity-uuid="" src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,dpr_2.0,q_auto:good/https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202025-12-23%20at%203.27.26%E2%80%AFPM.png?VersionId=ohkRkY0dIZlqdfME2EZePsCQavRiBadE" />

Bureau^proberts said the design responds to Toowong’s evolving urban character, balancing contemporary apartment living with the area’s established residential identity.

“A place where traditional Queensland living has taken place for centuries; Toowong is seeing a shift of contemporary influence, commercial and retail hubs mixed with well-considered residential offerings – all the while maintaining its character and charm,” the architect noted in planning documents submitted to Brisbane City Council.

The architecture practice said the project’s form was shaped by its riverfront setting, flood considerations, neighbouring building scales, and view corridors.

“They said the mix of four and two-bedroom apartments capture the ‘fundamental qualities of Queenslander living,’ translated into the context of a contemporary subtropical building.”

The development sits just off Coronation Drive within walking distance of Toowong’s retail precinct and the upgraded Regatta ferry terminal, while also benefiting from proximity to the incoming green bridge connection to West End. Sammut said the accessibility and amenity offering were central to the site’s appeal.

The approval adds to growing residential activity along the Toowong riverfront, joining nearby projects including Consolidated Properties’ Monarch Residences and Spyre Group’s ARC Residences.

Sammut secures approval for debut Brisbane apartment development in Toowong

Developer Lanevick is heading back into Sydney’s apartment market after focusing more heavily on the luxury townhouse and terrace sector in recent years.

Lanevick, founded and directed by Steve Maroun, is expecting to receive approval in the coming months for a new apartment development in Gladesville, with the aim to launch it to the market later this year.

The 51-apartment project, designed by Studio Johnston, will comprise a mix of one-, two-, and three-bedroom apartments positioned toward the Hunters Hill downsizer market.

“Traditionally it’s been difficult for people in that market to downsize because there just hasn’t been the right product available,” Maroun said.

“We’re targeting buyers who might have 30 to 40 per cent of their house value sitting in the bank after downsizing.

“They still want good spacious entertaining areas, they still want quality design, but they also want flexibility and the ability to enjoy life a bit more after working hard for a long time.”

The project sits near Boronia Park and within close proximity to the Parramatta River foreshore, an area Maroun says offers more of a Hunters Hill lifestyle than a traditional apartment precinct.

“From a lifestyle perspective, it’s really more Hunters Hill than Gladesville,” Maroun said. “You’re close to the foreshore, close to parklands, and still connected back into the village precinct.”

From level four and above, apartments will capture water views&nbsp;toward Sydney Harbour. Communal amenity will include rooftop entertaining areas, wellness spaces, and a gym tailored toward owner-occupier buyers.

“We’ve really designed these apartments around that buyer coming from the Hunters Hill LGA and what they’re actually looking for in their next chapter.”

The proposed development has also been designed to respond to the changing character of the broader Gladesville town centre, where a growing number of mixed-use and residential proposals are expected to emerge over the coming years.

“Gladesville presented a rare opportunity to deliver a genuinely design-led residential project within an evolving lifestyle precinct, just moments from the growing Gladesville town centre, and we’ve approached the project with a strong focus on architecture, liveability and long-term community value,” Maroun said.

Maroun said Lanevick saw a first-mover advantage within the precinct as planning controls continue to evolve to accommodate greater housing density.

“We think there’s a real opportunity there that hasn’t really been serviced properly yet,” he said.

“There’s going to be a broader evolution of the whole Gladesville village precinct over time, particularly with more activation and mixed-use outcomes.”

The Venus Street proposal will include a commercial and retail component at ground level designed to contribute to that evolving streetscape activation.

“A big part of the thinking was how do you activate that area properly and create more vibrancy and amenity, which is what Hunters Hill has been looking for,” Maroun said.

Lanevick’s focus since 2020 has largely been on smaller-scale luxury townhouse and terrace developments. The developer recently completed Royale Randwick, also designed by Studio Johnston, where prices reached $3.65 million. The project was featured in the UDIA NSW 2026 Professional Development Prospectus and was also named a finalist for Development of the Year.

&nbsp;

Lanevick to cater for Hunters Hill downsizers with new Gladesville apartment development

Property developer One Living, backed by former Macquarie banker turned investment manager Chris Green’s investment firm, has unveiled plans to bring more institutional capital into housing to help address the national supply crisis.

The New York-based investor has focused his firm, GreenPoint Partners, on addressing the supply shortage hitting middle market housing in Australia.

It is backing the new One Living business to develop more than 1000 units along the eastern seaboard. The new firm is starting with a development on Mona Vale Road, on the border of Mona Vale and Pymble, in Sydney’s Northern Beaches, with around 140 apartments planned. They are eyeing off more sites across the city.

With cost pressures rising in the industry, One Living’s model is to be a vertically integrated developer-builder, so it can respond directly to the housing gap by removing the cost inefficiencies embedded in traditional residential delivery.

“We are building a platform designed to operate at scale and starting in a market where there’s a clear need for quality, attainable housing,” One Living joint managing director Joseph Scuderi said.

“It’s that missing middle – it’s that attainable end of housing… that’s what most Australians invest into and what Australians can actually afford.”

<img alt="Mona Vale" data-entity-type="file" data-entity-uuid="798dfa93-4941-4db6-a696-31e9dc18e81c" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%202.31.50%E2%80%AFPM.png?VersionId=mKBqi5C_DmeiXS.AtJkcR8LQIxqCqmFi" />

GreenPoint Partners brings years of experience assembling and scaling real estate operating businesses across major markets. And Green sees a big opportunity in Australia.

“For its size, sophistication and importance to the community, Australia’s living sector has remained largely under-institutionalised, which represents significant opportunity,” Green said. “GreenPoint identified that gap, assembled the right team, and is backing One Living to build a platform that is aligned to market needs.”

Green said being a builder-developer would give the company the capacity and flexibility it required to deliver reasonably-priced homes.

“We want it to be at that attainable level; not super high end luxury but at that attainable level,” he said.

<img alt="Mona Vale" data-entity-type="file" data-entity-uuid="74a5344a-4b26-4d4a-ada3-056b1220be77" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%202.32.15%E2%80%AFPM.png?VersionId=vY8hXHO4reBMdO8ZXMWCNtGZJofUPQ3j" />

&nbsp;

One Living will undertake a component of affordable housing in its schemes, which it will own and operate, and it could also run build-to-rent on some sites.

Green praised local policy settings.

“The NSW government is being very supportive, strategic and pragmatic in terms of how do we generate more supply of housing,” he said. “We think it’s actually positive for development and the bit that’s been lacking at that attainable level is that it’s lots of relatively small private developers, whereas we want to create an institutional platform.”

One Living is also&nbsp;looking at high-density projects and could take on more institutional funding in the future.

“The way we will be able to achieve economies of scale is through size,” Green added.

One Living enters Sydney's new apartment market with Northern Beaches site acquisition

It's been several years since there's been an opportunity to buy a brand new townhome in Melbourne's coastal suburb of Mordialloc. Even apartment developments in recent times have been few and far between in the area.

Local developer LDS Property identified the gap in new housing, securing a site on White Street, directly opposite&nbsp;Woodlands Golf Club Mordialloc. They've recently launched&nbsp;<a href="https://www.apartments.com.au/new-townhouses/wm-residences-mordialloc-102-white-street-mordialloc-vic-3195">WM Residences</a>, just 13 townhouses which they have already started building.

Projects by Buxton Director Heath Thompson, who is selling WM Residences, says the townhouses x that perfect middle ground be

"Mordialloc residents have had limited options to downsize within the suburb, often forcing them to look elsewhere despite long-standing ties to the area," Thompson says.

"With very little comparable new supply coming to market, projects like WM Residences are well placed, particularly as buyers look to capitalise on current conditions amid constrained supply."

[smartcode_project:default project_id=134646 project_image_fid=6109]

The development, designed by regarded architecture firm&nbsp;<a href="https://www.apartments.com.au/architects/ewert-leaf">Ewert Leaf</a>,&nbsp;adopts a deliberately restrained architectural approach, focusing on simplicity, durability and liveability rather than overt design gestures.

The boutique scale is central to the offering. With only 13 three-bedroom residences, each home is configured to prioritise functional layouts and everyday use, supported by private terraces and secure two-car garages.

Ewert Leaf’s design response leans into a calm, neutral material palette. Interiors are defined by oak flooring, white walls and soft finishes, creating a consistent and understated backdrop. The approach avoids trend-driven detailing in favour of longevity, with an emphasis on natural light and spatial clarity.

[smartcode_project:default project_id=134646 project_image_fid=6110]

Beyond aesthetics, the homes are designed to meet contemporary performance expectations. Each residence targets a minimum 6-star energy rating, incorporating double glazing, comprehensive insulation and all-electric Bosch appliances.

The project’s location supports a walkable coastal lifestyle, sitting within close proximity to Mordialloc’s foreshore, Main Street retail strip and the train station. Local cafés and dining venues, including Suburbia Deli and Hendriks Café, are within a short walk, reinforcing the area’s established neighbourhood character.

[smartcode_project:default project_id=134646 project_image_fid=6116]

While <a href="https://www.apartments.com.au/developments/mordialloc-vic-3195">Mordialloc</a> is often defined by its beach and pier, the project taps into other areas of day to day living, offering easy access to local food, casual dining and transport, rather than positioning itself purely as a lifestyle retreat.

WM Residences reflects a continued trend across Melbourne’s coastal suburbs towards smaller-scale, design-led townhouse developments, particularly on infill sites where proximity to amenity is already established.

With construction commenced prior to its market entry, the project aligns with a growing preference among buyers for developments with visible progress and defined delivery timeframes.

[smartcode_project_cta:default project_id=134646]

WM Residences fills gap in Mordialloc townhouse market

Interest Rates

jonathanchancellor-7SQnKwU6yx

September 2016 RBA minutes note weaker housing market conditions

<html><body><div class="page" title="Page 1">
<div class="section">
<div class="layoutArea">
<div class="column">
GEUST OBSERVER
The Reserve Bank Board minutes provide little in the way of new information for consumers or businesses.
It is clear the Board members remain relatively optimistic on the domestic economy and believes that recent rate cuts were having an impact in lifting consumption.
However while the minutes acknowledge the depreciation of the Australian dollar, there was still the usual jawboning on the need for a lower Aussie dollar, with Board members noting that “an appreciating exchange rate could complicate the necessary adjustments in the economy”.
Interestingly the minutes suggested that the Central Bank was clearly less concerned about the housing sector – essentially a property bubble is no longer on its wall of worry. Nevertheless policymakers did discuss the substantial lift in apartment building that is taking place particularly across the Eastern states.
<a href="/images/2016/09/21/Screen%20Shot%202016-09-21%20at%208.13.20%20AM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/09/21/Screen%20Shot%202016-09-21%20at%208.13.20%20AM.png" alt="">
 
The pipeline of dwelling construction will support growth however does increase risks of an oversupply of apartments in 12-18 months times. 
<div class="page" title="Page 2">
<div class="layoutArea">
<div class="column">Overall the minutes seemed to be more of a neutral setting rather than one that suggested further rate cuts were on the cards. But policymakers are well aware that the low inflation environment provides the central bank with scope to cut rates further if deemed necessary.</div>
<div class="column">
 The next round of inflation data is released in late October and essentially means that the mostly likely scenario for another rate cut would be at the November Board meeting – provided inflation remains well below the 2-3 percent target band.</div>
<div class="column"> </div>
<div class="column">The Bureau of Statistics has released data on home prices for the March quarter. However the better measures on home prices are those produced by CoreLogic RP Data. Overall it is clear that higher home prices are boosting wealth levels and supporting consumer spending. The modest decline in the weekly consumer sentiment reading is not concerning – particularly given confidence levels have lifting substantially in prior weeks. Overall consumers are in a happy place, particularly with household budgets in good order.
<a href="/images/2016/09/21/Screen%20Shot%202016-09-21%20at%208.14.30%20AM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/09/21/Screen%20Shot%202016-09-21%20at%208.14.30%20AM.png" alt="">
What do the figures show?
Reserve Bank Board minutes
The key quotes from the Board minutes:
Economic growth: “data suggested that growth had been around estimates of potential growth over the first half of 2016, despite further large falls in business investment. Interest-sensitive sectors of the economy were being supported by accommodative monetary policy.”</div>
<div class="column"> </div>
<div class="column">Unemployment: “The unemployment rate had been little changed at around 53⁄4 per cent over 2016 and employment growth had been steady at around 2 percent in year-ended terms. Strong growth in part-time employment had been apparent in most states, while full-time employment had fallen in the mining-exposed states. Forward-looking indicators had been consistent with only a slight change in the unemployment rate in coming months. Domestic cost pressures, including wage growth, had remained low and were expected to remain so for some time.”</div>
<div class="column">
 Housing sector: “Housing market conditions overall appeared to have eased since the previous year, although the dwelling construction cycle remained in a strong upswing. The best available information suggested that housing prices had risen modestly over the past year and turnover had been below average. Consistent with this and supervisory measures that had strengthened lending standards in the housing market, housing credit growth had slowed over 2016. Members noted that there continued to be a considerable volume of apartments scheduled to be completed over the next couple of years, particularly in the eastern states”. Summary: “Taking into account the recent data, and having eased monetary policy at its May and August meetings, the Board judged that the current stance of monetary policy was consistent with sustainable growth in the Australian economy and achieving the inflation target over time...”
Consumer confidence
The ANZ/Roy Morgan consumer confidence rating fell by 2.2 per cent to 115.5 in the week to September 18. Confidence is up 0.9 per cent over the year and well above the average of 112.6 since 2014. All five components of the index fell in the latest week:</div>
<div class="column">
 <ul>
<li>  The estimate of family finances compared with a year ago was down from +12 to +10;</li>
<li>  The estimate of family finances over the next year was down from +27 to +25;</li>
<li>  Economic conditions over the next 12 months was down from +2 to +1;</li>
<li>  Economic conditions over the next 5 years was down from +10 to +9;</li>
</ul>
  The measure of whether it was a good time to buy a major household item was down from +40 points to +33 points.
Residential property prices The Bureau of Statistics (ABS) has released its Residential Property Price indexes.
“The price index for residential properties for the weighted average of the eight capital cities rose 2.0 percent in the June quarter 2016. The index rose 4.1 per cent through the year to the June quarter 2016”.
<div class="page" title="Page 3">
<div class="layoutArea">
<div class="column">The capital city residential property price indexes fell in Sydney (+2.8 percent), Melbourne (+2.7 percent), Brisbane (+1.1 percent), Canberra (+2.2 percent), Adelaide (+0.8 percent) and Hobart (+0.7 percent) and fell in Perth (-1.2 percent) and Darwin (-2.4 percent).</div>
<div class="column">
 Annually, residential property prices rose in Melbourne (+8.2 percent), Canberra (+6.0 percent), Hobart (+4.9 percent), Brisbane (+4.3 percent), Sydney (+3.6 percent) and Adelaide (+3.5 percent) and fell in Darwin (-6.5 percent) and Perth (-4.8 percent)”. </div>
<div class="column"> </div>
<div class="column">The ABS notes that as at June 2016 there were 9.703 million homes in Australia.</div>
<div class="column"> </div>
<div class="column">  “The total value of residential dwellings in Australia was $6,045,080.8m at the end of the June quarter 2016, rising $138,302.8m over the quarter.</div>
<div class="column"> </div>
<div class="column">  The mean price of residential dwellings rose $11,800 to $623,000 and the number of residential dwellings rose by 39,100 to $9,703,500 in the June quarter 2016”.</div>
<div class="column"> </div>
<div class="column">What is the importance of the economic data?</div>
<div class="column"> </div>
<div class="column">The ANZ/Roy Morgan weekly survey of consumer confidence closely tracks the monthly Westpac/Melbourne Institute consumer sentiment index but the former measure is a timelier assessment of consumer attitudes and is now closely tracked by the Reserve Bank.</div>
<div class="column"> </div>
<div class="column">The Australian Bureau of Statistics (ABS) provides quarterly data on residential prices. The figures provide further perspectives on the state of the housing purchase sector.</div>
<div class="column"> </div>
<div class="column">The Reserve Bank releases minutes of its monthly Board meeting a fortnight after the event. The minutes give a guide to Reserve Bank thinking on interest rate settings.</div>
<div class="column"> </div>
<div class="column"><a href="/images/2016/09/21/Screen%20Shot%202016-09-21%20at%208.15.40%20AM.png" target="_blank">Click to enlarge</a></div>
<div class="column"><img src="/images/2016/09/21/Screen%20Shot%202016-09-21%20at%208.15.40%20AM.png" alt=""></div>
<div class="column">
What are the implications for interest rates and investors?
Future rate cuts are wholly dependent on inflation. If the next inflation figures are even slightly above RBA and market forecasts, then the Reserve Bank Board members will stay on the interest rate sidelines. For the record CommSec has a further interest rate cut pencilled in for the November meeting.</div>
<div class="column"> </div>
<div class="column">Consumer confidence is healthy and is supporting a lift in spending - a result that was largely confirmed in the latest Commonwealth Bank Business Sales Index. </div>
<div class="column"> </div>
<div class="column">Savanth Sebastian is an economist for <a href="https://www.commsec.com.au/" target="_blank">CommSec</a></div>
</div>
</div>
</div>
</div>
</div>
</div>
</div>
</div>
</div></body></html>

jchancellor-FAypfDUnLy

Reserve Bank in a happy place, confidence eases: CommSec's Savanth Sebastian

<html><body>
GUEST OBSERVER
The minutes of the September monetary policy meeting of the Reserve Bank Board provided few surprises.
Of most interest in these minutes is the expanded analysis of the Australian housing market. Media reports and some high frequency industry data had been suggesting that the markets in Sydney and Melbourne were lifting again.
The Bank’s analysis of these developments appears to be more downbeat than had been expected. House prices are described as having “declined at the national level and across most capital cities over the past year”. Inflation in the rental markets was described as “around historical lows” and the aggregate rental vacancy rate “had drifted higher and was close to its long run average”.
The Board also noted the recent lift in auction clearance rates in Sydney. It qualified that signal by noting that “the number of auctions had declined and remained lower than a year earlier”.
It also noted that in the private treaty market turnover had declined and that “the average number of days that a property was on the market had been on an upward trend”. Slowing housing credit growth was also noted. As has been the case with previous remarks from the Bank, a future oversupply in the high rise apartment market seems possible ( but not certain) with “a considerable volume of apartments scheduled to be completed over the next couple of years”.
Conditions in the labour market were assessed as little changed in recent times with the unemployment rate reasonably steady at 5.75 percent in the year. The outlook for the jobs market was noted as “consistent with only a slight change in the unemployment rate in coming months”.
Overall the data suggested that the economy had been growing around potential (2.75-3.00 percent) in the first half of the year.
One important new piece of information since the last Board meeting was the release of the capital expenditure survey. The Board noted that mining investment had continued to fall and investment intentions in that sector implied a further large decline in 2016-17, although the peak subtraction from GDP growth was still expected to have occurred in 2015-16.
Household consumption growth is expected to be around average. The Board pointed out that lower interest rates can be expected to boost consumption since borrowers benefitted more from low interest rates than had been costs to depositors. The concern has always been that borrowers used the improved cash flow to pay down debt rather than lift consumption.
Growth in Australia’s major trading partners continued to be assessed as “a little below its decade average”. In particular, the recent lift in bulk commodity prices was attributed more to a reduction in production by Chinese producers than a sustained lift in demand.
Conclusion
We have been somewhat surprised at the more downbeat tone used around the housing market. Nevertheless this sentiment is not consistent with any imminent decision to adjust rates. The next inflation report will print on October 26 but it is considered to be highly unlikely that it would precipitate any policy response. Our current forecast is for a 0.5 percent underlying print for the quarter further signalling that inflation remains at or near the bottom of the 2-3 percent target zone but there are no grounds for concern, as we saw in April, that inflation was tumbling.
In that regard the Bank has released the Statement on the Conduct of Monetary Policy which sets out the new Governor’s agreement with the Government. We have been writing consistently on the appropriateness of widening the target band from 2-3 percent to 1-3 percent however we were never at all confident that the Bank and the Government would make such a profound change. The agreement that has been adopted is “an appropriate goal is to keep consumer price inflation between 2 and 3 percent on average over time.” This “over time” concept replaces “over the cycle” and appears to provide the Bank with more flexibility for inflation to remain at or below the bottom of the band for an extended period.
It suggests that under this agreement there will be less urgency to push inflation back to within the 2-3 percent medium term goal. The new Governor has also adopted a more explicit recognition that included in his objectives “financial stability”. The most likely channel through which interest rates can affect financial stability is via the housing market. We welcome the recognition of the importance of fostering financial stability when formulating a policy response.
On balance this new agreement reduces the urgency to cut rates further even in the face of another inflation shock.
While no one gives any chance to a policy move on October 4 there is still plenty of anticipation that the Bank will cut rates at its following Board meeting on November 1. We do not think that there is any evidence in the themes set out in these minutes or the recent Statement on the Conduct of Monetary Policy that would lead to a move in November. We remain comfortable with our view that the overnight cash rate will remain steady for the next few years.
BILL EVANS is chief economist of <a href="https://www.westpac.com.au/" target="_blank">Westpac</a> 
</body></html>

RBA minutes reveal slightly surprising comfort around risks in the housing market: Westpac's Bill Evans

<html><body><div class="page" title="Page 1">
<div class="layoutArea">
<div class="column">
GUEST OBSERVER
The results from this month’s survey remain broadly consistent with our prior view of the economy and the near- term outlook. 
It points to a patchy, but sustained, improvement in the non-mining economy, with the major services sectors and construction leading the way. 
That said, recent negative movements in retail and wholesale conditions will be a cause for concern if they continue, and we are watching to see if they represent the start of a new trend. 
Beyond the near-term the outlook becomes more uncertain, as the effects of previous AUD depreciation, higher commodity exports and the housing construction cycle begin to wane. 
All of these factors are expected to come to a head around 2018, and the economy will likely require additional policy support from the RBA ahead of this to firm up growth and stabilise the unemployment rate.
NAB economics currently expect two more 25bp cuts by the RBA in mid 2017. 
<a href="/images/2016/09/13/Screen%20Shot%202016-09-13%20at%2010.57.59%20AM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/09/13/Screen%20Shot%202016-09-13%20at%2010.57.59%20AM.png" alt="">
<div class="page" title="Page 1">
<div class="layoutArea">
<div class="column">
The August NAB Monthly Business Survey is still showing solid performance in the non-mining economy, although some of the previous momentum has been lost. 
The RBA’s recent 25bp cut to the cash rate appears to have helped underpin business confidence, which remained impressively resilient to challenging headwinds. The business confidence index rose slightly to +6 index points in August (from +4), which is consistent with the long-run average for the series. 
On the other hand, business conditions (an aggregation of trading conditions (sales), profitability and employment) dropped back slightly in the month, to +7 index points (from +9), but this is still well above the long run average of +5. Both trading conditions and profitability have continued to ease from their previously very high levels. 
In contrast, the employment component has managed to hold onto the gains seen in recent months, although it remains the weakest of the three components. 
<a href="/images/2016/09/13/Screen%20Shot%202016-09-13%20at%2011.05.22%20AM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/09/13/Screen%20Shot%202016-09-13%20at%2011.05.22%20AM.png" alt="">
The recent downward trend in business conditions suggests that the non-mining recovery may have lost some vigour, but headline results from the survey still suggest these segments are performing well. 
The Survey still gives us confident in the near-term outlook for the economy, even though things may have cooled a bit. It is particularly encouraging to see that firms demand for labour remains quite solid, which will hopefully have some positive flow on effects to households. The employment index in the NAB Survey has continually exhibited a better trend than official labour market statistics in recent months”
There continues to be a fairly large disparity in business conditions across industries, although most are recording positive conditions in trend terms. 
The strength in business conditions remains largely confined to the major services and construction industries, while relatively subdued conditions in wholesale and retail warrant close monitoring, particularly in light of disappointing consumption growth in the Q2 National Accounts. We had been hoping to see more consistent signs of a broadening economic recovery in the Survey by now, and this did appear to be the case earlier in the year but it has not been sustained.
The Survey’s leading indicators are pointing to a solid near-term outlook. Forward orders were steady and have been positive for most of the past year. NAB’s measure of capacity utilisation eased back, but remains around long-run levels, supporting the index of capital expenditure. However, the Survey is yet to reflect our growing concerns over the longer-term outlook. We expect the economy will see a material slowdown in 2017/18 as resource exports slow and residential construction begins to dry up.
 For now, however, business confidence in the construction industry actually remains relatively upbeat. 
</div>
</div>
</div>
 
Alan Oster is group chief economist, National Australia Bank, and can be contacted <a href="https://business.nab.com.au/author/alan-oster/" target="_blank">here</a>.
</div>
</div>
</div></body></html>

Property 101: Expect two more 25bp cuts by the RBA in mid 2017: NAB's Alan Oster

<html><body>
Research from online lender loans.com.au has found many borrowers are paying vastly more than they need to.
Loans.com.au founder Kim Cannon said data from comparison site Canstar showed that a homebuyer who borrowed $450,000 could pay more than $114,000 in extra interest over the life of the loan if they made the wrong choice.
He said homebuyers who assumed that all lenders offered broadly similar value were making a big mistake.
“If buying a home is the biggest financial decision you will ever make, choosing a home loan is the second biggest,” he said
“The wrong decision on an average-sized loan can cost more than $100,000 dollars over the term of the home loan. These are life-changing sums.
"When shopping for a home loan, buyers should avoid distractions and keep their eye firmly on the comparison rate, which combines all costs into a single percentage rate.
“Just as buying property is all about location, location, location, when you take out a loan it is all about comparison rate, comparison rate, comparison rate.”
Loans.com.au recently cut the variable rate for home purchases on its Essentials product to a record-low 3.39 per cent (comparison rate 3.41 per cent).
<a href="/images/2016/09/12/Screen%20Shot%202016-09-12%20at%2011.18.04%20AM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/09/12/Screen%20Shot%202016-09-12%20at%2011.18.04%20AM.png" alt="">
</body></html>

Aussie borrowers paying more than needed: Loans.com.au

<html><body>
<img src="https://counter.theconversation.edu.au/content/64875/count.gif" alt="The Conversation" width="1" height="1">
GUEST OBSERVER
On Tuesday, in its last board meeting with Glenn Stevens as Governor, the Reserve Bank of Australia left the cash rate unchanged at 1.50 percent.
This was widely anticipated by markets. Glenn Steven’s statement basically said: growth is pretty low, but not horrible; business investment is way down, but other investment is up; commodity prices are up; but they fell a lot in the last two years; and so on.
Essentially, things are bad, but not too bad. In other words, the glass is half “fumpty”.
The two things he made a non-bland statement about were inflation and the exchange rate, saying:
“Inflation remains quite low. Given very subdued growth in labour costs and very low cost pressures elsewhere in the world, this is expected to remain the case for some time.”
and:
“Low interest rates have been supporting domestic demand and the lower exchange rate since 2013 is helping the traded sector…though an appreciating exchange rate could complicate this.”
And therein lies the key to future rate moves in Australia. If inflation drops below 1 percent, or if the Aussie dollar gets above 78 or so cents, then the RBA will strongly consider another rate cut.
There was somewhat positive news from the ABS on the trade front for Australia. The seasonally-adjusted trade deficit was A$2.41 billion in July, compared to A$3.25 billion in June, and better than market expectations. This was driven largely by a big jump in gold exports, while imports did not rise, staying at A$28.8 billion. The latter figure was, in part, due to a 6 percent fall in imports on consumption goods. This helped the trade deficit, but one wonders whether it is a sign of reduced consumer confidence.
GDP growth in Australia came in at 0.5 percent for the June quarter, slightly below expectations of 0.6 percent. Still, that put year-on-year growth at 3.3 percent, leading Treasurer Scott Morrison to say:
“Today’s June Quarter National Accounts confirm that 2015-16 was Australia’s 25th consecutive year of economic growth and show our economy growing at the fastest rate in four years, but we must continue to push for stronger growth.”
As they say in baseball, “you can’t boo a home run,” but there was a little less to cheer about in the figures than it might seem at first glance. A big chunk of the growth came from pre election government spending, something that is unlikely to continue (note to ABS: don’t you want to seasonally adjust for this?) Our terms of trade also increased by 2.3%, aiding growth.
Nominal GDP growth remained below trend and below Treasury budget forecasts at an annual rate of 3.4%. This is the key figure for tax receipts. Remember that the budget – which still had a lot of flowing red ink involved in it – forecast a return to 5% nominal GDP growth over the coming years. That still looks a way off.
Speaking of growth, as the G20 met in China the IMF laid the groundwork for a lowering of its 3.1% global GDP growth target when it revises its figures in October. It warned the original goal would not be met: “without quick implementation of all announced measures and significant additional efforts to boost productivity, especially in advanced economies”. Translation: “Houston, we have a problem.” Again.
This week also saw the announced of the US Federal Reserve “beige book”. This odd-sounding object is a compendium of anecdotal evidence – collected by the constituent Federal Reserve Bank – published eight times per year.
The book provided further evidence, albeit anecdotal, that the US economy is slowly bouncing back:
“Reports from the twelve Federal Reserve Districts suggest that national economic activity continued to expand at a modest pace on balance during the reporting period of July through late August. Most Districts reported a "modest” or “moderate” pace of overall growth."
What we know for sure is that global growth is low and below expectations. It looks like the US economy is bouncing back. And GDP numbers in Australia look good, but when one looks one level below, the picture isn’t so good.
Richard Holden is professor of economics and PLuS Alliance Fellow, UNSW Australia and author for The Conversation. He can be contacted <a href="https://theconversation.com/profiles/richard-holden-118107" target="_blank">here</a>.
</body></html>

Scrape below the surface and the economy doesn’t look so good 

<html><body>
The onset of spring has brought good news for commercial property in Australia, with record low interest rates driving significant interest in the sector, according to property firm Raine &amp; Horne.
The Spring 2016 issue of Raine &amp; Horne Commercial Insights says a trifecta of factors –  low interest rates, a supportive federal government and lacklustre returns on many other investment classes – is proving to be a boon for commercial property. 
“Today’s low interest rates make now the ideal time to review commercial portfolios and add new assets,” said Angus Raine, executive chairman, Raine &amp; Horne Commercial.
“Small business owners are well-placed to take advantage of the current favourable market to step into their own premises, or upgrade business premises, and strengthen their enterprise’s asset base.”
In Sydney, vacancy rates are approaching 5 percent in North Sydney as commercial properties are increasingly redeveloped for residential housing. The Northern Beaches is also experiencing exceptionally low vacancy rates, it says.
“Yields of 5-7 percent are achievable on the Northern Beaches, and the construction of Dee Why town centre will further cement Dee Why as a true commercial hub,” said Raine.
The western suburb of Parramatta is experiencing near-zero vacancy rates on prime office space as blue-chip government tenants including the NSW Department of Education move into the area. 
“We’re seeing yields are as high as 7.5 percent on Parramatta office space,” said Raine.
In Penrith, the announcement that Badgerys Creek will be the site of Sydney’s second international airport is seeing a rise in land values. 
In the Macarthur (Campbelltown) area, Raine said  “The commercial market is being driven by owner occupiers, who are taking advantage of low interest rates to move into their own premises. In the sub-$5 million market there simply aren’t enough properties to meet demand.”
In the Hunter, Newcastle vacancy rates for office and retail space, especially in the smaller size ranges, have tightened dramatically as the city’s microbusinesses take their first growth steps.
“Auction is the preferred sale method for the Newcastle market right now, and around 50 percent of commercial properties in the sub-$2 million price range are selling to investors prior to auction,” said Raine. 
In Brisbane, demand from self-managed super funds (SMSFs) is driving up prices for commercial assets in the city’s north. 
“There is a lack of quality secure industrial and retail property investment opportunities, with demand from SMSFs ten-fold stronger than supply. Securely leased investments priced between $2 million-$5 million are attracting 70-100 enquiries during the course of a sales campaign, and can sell on yields of 5.5-7.5%,” said Raine.
The commercial market is also showing robust growth across many other parts of Australia. 
In Adelaide, the Torrens Road to River Torrens South Road Upgrade Project has increasing prospects for commercial property by improving transit flows, and in Melbourne, vacancy rates remain minimal with yields in the order of 5.0-7.0 percent across the city.
</body></html>

Australian commercial property markets primed for take-off this spring: Raine and Horne

<html><body>
The thinking behind yesterday's RBA cash rate is illustrated by today's RBA chart pack.
<a href="https://www.propertyobserver.com.au/images/2016/09/07/Screen%20Shot%202016-09-07%20at%2011.33.09%20AM.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2016/09/07/Screen%20Shot%202016-09-07%20at%2011.33.09%20AM.png" alt="">
 
<a href="https://www.propertyobserver.com.au/images/2016/09/07/Screen%20Shot%202016-09-07%20at%2011.34.38%20AM.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2016/09/07/Screen%20Shot%202016-09-07%20at%2011.34.38%20AM.png" alt="">
<a href="https://www.propertyobserver.com.au/images/2016/09/07/Screen%20Shot%202016-09-07%20at%2011.35.39%20AM.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2016/09/07/Screen%20Shot%202016-09-07%20at%2011.35.39%20AM.png" alt="">
<a href="https://www.propertyobserver.com.au/images/2016/09/07/Screen%20Shot%202016-09-07%20at%2011.36.42%20AM.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2016/09/07/Screen%20Shot%202016-09-07%20at%2011.36.42%20AM.png" alt="">
<a href="https://www.propertyobserver.com.au/images/2016/09/07/Screen%20Shot%202016-09-07%20at%2011.37.36%20AM.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2016/09/07/Screen%20Shot%202016-09-07%20at%2011.37.36%20AM.png" alt="">
</body></html>

September RBA chart pack gives interest rate insights

<html><body>
GUEST OBSERVER
Having just cut rates again last month and with the economy running okay and nothing new on inflation in the last month, it was no surprise to see the Reserve Bank of Australia leave rates on hold at 1.5 percent at its September meeting.
This was the consensus and our own expectation.
The Statement accompanying the RBA’s decision to leave interest rates on hold was little changed bar a bit of tweaking here and there…maybe Philip Lowe will do a bigger re-write when he takes over for the next meeting. 
The RBA continues to see the global economy growing, financial markets functioning effectively and the Australian economy continuing to grow but labour market indicators being somewhat mixed, inflation remaining quite low, an appreciating $A complicating the adjustment in the economy and seems rather sanguine regarding the housing market.
While the RBA’s statement lacks a clear easing bias it is noteworthy that its June statement  (the RBA having just eased in May) was also largely interpreted as neutral with an easing bias only returning (expressed via a reference to the Bank awaiting “further information”) in July ahead of inflation data to be released later that month. So if history is any guide the October statement should be watched for any return to an easing bias ahead of September quarter inflation data due later that month.
Perhaps a surprising aspect of the RBA’s statement is its relatively sanguine comments regarding the housing market. I would have thought the bounce back up in auction clearance rates in Sydney and Melbourne and renewed strength in housing finance would suggest that this year’s rate cuts have reinvigorated the already hot property markets in those cities suggesting the case for another bout of RBA “jaw boning” and possible APRA action to cool things down again. At this stage the RBA appears more comfortable in waiting for surging apartment supply to cool things down.
We remain of the view that the RBA will cut rates again at its November meeting when it reviews its economic forecasts after the release of the September quarter inflation data in late October. The risks to inflation are on the downside thanks to underlying deflationary pressures globally and record low wages growth domestically and the $A is still too high and at risk of further appreciation given the Fed’s endless delays in raising rates again.
However, with economic growth holding up very well – data for public spending, sales, profits and inventories released over the last few days points to June quarter GDP growth accelerating further to 3.5 percent year on year – this is a close call and is now critically dependent on seeing a lower than expected September quarter inflation result. Either way a cut in the cash rate to 1% or below and the adoption of quantitative easing looks very unlikely in Australia.
<a href="https://www.propertyobserver.com.au/https://plus.google.com/110172465327488162875?rel=author" target="_blank">SHANE OLIVER</a> is head of investment strategy and economics and chief economist at <a href="https://www.ampcapital.com.au/home" target="_blank">AMP Capital</a> and is responsible for AMP Capital's diversified investment funds.
</body></html>

RBA relatively relaxed about the housing market: AMP Capital's Shane Oliver

<html><body>
The RBA cash rate decision came out at 2.30 today with the decision to hold rates at 1.5 percent.
Taking account of the available information, and having eased monetary policy at its May and August meetings, 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.
"Separately, a number of lenders are also taking a more cautious attitude to lending in certain segments.
"The best available information suggests that dwelling prices overall have risen moderately over the past year and growth in lending for housing purposes has slowed.
"Considerable supply of apartments is scheduled to come on stream over the next couple of years, particularly in the eastern capital cities," it advised.
After two rates cuts already this year the hold decision was widely anticipated as the RBA monitors the effects of the record low cash rate on the economy and currency according to Tim Lawless, CoreLogic head of research.
"The RBA is likely to be keeping a keen eye on the housing market; since the May rate cut and subsequent cut in August, many of the key housing market indicators have bounced higher," he said.
"Auction clearance rates have returned to the highest reading in more than a year, albeit on lower volumes.  
"CoreLogic’s hedonic index has seen some acceleration in the rate of capital gain across the already hot Sydney and Melbourne markets and the value of investor housing finance commitments have recently rebounded to the highest levels since August last year.  In contrast, there has been a consistent wind down in transaction numbers which implies market demand may be getting exhausted. 
"While affordability barriers and tighter lending conditions are likely to be contributing to the slowdown in transactional activity, another factor is simply that there are historically low numbers of homes being advertised for sale in Sydney and Melbourne which is contributing to the upwards pressure in the market and limiting transaction activity due to low stock levels. 
"With monthly indicators of inflation remaining low and the Australian dollar remaining relatively high, there remains a strong chance of another rate cut later this year. The most likely timing will be the November RBA meeting when September quarter inflation data is available. 
"Another low inflation reading combined with a stubbornly high dollar could result in the cash rate moving lower."
</body></html>

Interest Rates

Editor's Picks

Have something to contribute?

Developments

New apartments

New townhouses

News

Interest Rates

Editor's Picks

Receive the latest news stories to your inbox

Have something to contribute?

Developments

New apartments

New townhouses

News