<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

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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]

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</main>

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

Interest Rates

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RBA Governor Glenn Stevens' September 2016 statement
At its meeting today, the Board decided to leave the cash rate unchanged at 1.50 per cent.
The global economy is continuing to grow, at a lower than average pace. Several advanced economies have recorded improved conditions over the past year, but conditions have become more difficult for a number of emerging market economies. Actions by Chinese policymakers have been supporting growth, but the underlying pace of China's growth appears to be moderating.
Commodity prices are above recent lows, but this follows very substantial declines over the past couple of years. Australia's terms of trade remain much lower than they had been in recent years.
Financial markets have continued to function effectively. Funding costs for high-quality borrowers remain low and, globally, monetary policy remains remarkably accommodative.
In Australia, recent data suggest that overall growth is continuing, despite a very large decline in business investment, helped by growth in other areas of domestic demand and exports. Labour market indicators continue to be somewhat mixed, but suggest continued expansion in employment in the near term.
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.
Low interest rates have been supporting domestic demand and the lower exchange rate since 2013 is helping the traded sector. Financial institutions are in a position to lend for worthwhile purposes. These factors are all assisting the economy to make the necessary economic adjustments, though an appreciating exchange rate could complicate this.
Supervisory measures have strengthened lending standards in the housing market. 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.
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.
 
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Moderate house price growth so hold decision in RBA Governor Glenn Stevens' September 2016 statement

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Analysis from RateCity.com.au predicts the cash rate will hold at 1.50 percent at today's Reserve Bank meeting, stating the Board will likely to sit on its hands until the August cut has had a chance to flow through the economy. 
According to <a href="https://www.ratecity.com.au/" target="_blank">RateCity.com.au</a> analysis of over 30 key economic indicators, the RBA will continue its wait-and-see approach in September in the lead up to the busy Spring housing period. 
<a href="/images/2016/09/06/Screen%20Shot%202016-09-06%20at%2010.55.57%20AM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/09/06/Screen%20Shot%202016-09-06%20at%2010.55.57%20AM.png" alt="">
Peter Arnold, data insights director at RateCity.com.au, said a hot housing market, high household debt levels and subdued investor lending has steadied the RBA’s hand. 
“After two rate cuts this year the housing market is heating up, with house prices holding strong and auction clearance rates and building approvals both rising,” he said.   
“Australian households have more debt compared to the size of the country’s economy than any other in the world, partially fuelled by record low rates.
“The higher our debt levels, and the closer we get to a zero cash rate, the less effective each cut becomes and the RBA will be keenly aware of that fact having seen the impact of negative rates around the world. 
“Evidently, consumer confidence took a dive, despite rate cuts in May and August, driven by households' views of the economic outlook.
“In theory, a rate cut gives consumers some more spending money which helps to kick along the economy. But the banks withheld almost half of the last cut, so the Board is unlikely to pull the trigger again this year. 
“On top of that, APRA and the banks are happy with the caps put on investor lending, which gives the RBA further breathing room.” 
“The Federal Reserve is getting closer to lifting US interest rates, while Chinese iron ore futures tumbled late last month putting further pressure on our export prices – both of which have ramifications for our domestic economy."
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jonathanchancellor-7SQnKwU6yx

Rates to hold at 1.5 percent until 2017: RateCity.com.au

<html><body>While a rate change is highly unlikely at tomorrow’s Reserve Bank board meeting, home loan sizes are expected to soar this mortgage season, with borrowers looking to take advantage of a historically low-interest rate market, according to finder.com.au.  All 38 economists and experts surveyed last week for the monthly <a href="https://www.finder.com.au/?utm_source=pr_pressrelease_internal&amp;utm_campaign=51641f4a4e-01SEPT20169_2_2016&amp;utm_medium=email&amp;utm_term=0_5921dab448-51641f4a4e-295349757&amp;goal=0_5921dab448-51641f4a4e-295349757" target="_blank">finder.com.au</a> RBA Survey are forecasting a pause to the cash rate at 1.5 percent, following last month’s rate cut.  However, there may be a further fall to come, with 47 percent of the experts predicting a rate cut before 2017. November was the most likely month cited for a cash rate drop. In fact, over seven in 10 (72 percent) of the experts are forecasting the rate to slip below its current value of 1.5 percent. Most of these experts (14, 39 percent overall) expect the cash rate to bottom out at 1.25 percent, with 22 percent (8) expecting a low of 1.00 percent and four economists (11 percent) forecasting the cash rate to dip even further.  With two cash rate cuts already in the bag this year – the 12th cut this rate cycle – all signs are pointing to a strong mortgage season (September to November 2016) with the national home loan size set to swell. While the current average national home loan size is $360,100, new data, which will incorporate the effect of last month’s rate cut, is expected to show that loan sizes are on the rise. Graham Cooke, Insights Manager at finder.com.au says, historically, rate cuts have usually led to loan size increases. “In the months directly following the last 10 RBA rate cuts prior to August 2016, the average home loan size in Australia increased seven times and the first home owner loan size rose eight times.  “The average increase in first home owner loans was 1.57 percent, with the most significant increase in June 2016, when loan sizes increased by 3.6 percent (directly following the May 2016 rate cut).  “The average first home buyer loan size currently sits at $335,000 as of June. Based on this and recent trends we could expect first home buyer loan sizes to jump by about $5,260, while the average loan of $360,100 could increase by 1.80 percent, or $6,480,” he says. “The potential danger with an unprecedented low rate market is that borrowers, particularly first home buyers, may be enticed to increase their borrowing budgets in order to get into the property market. As a result, some may be borrowing more than they can afford in the long-term. “But a home loan is a long-term commitment that needs a conservative approach. When applying for a home loan, always do your research, and this includes factoring in a buffer of 2-3 percent to accommodate future rate hikes.  “While rate hikes may be difficult to imagine right now, thinking ahead may end up saving you money in the long run,” he says. When comparing your home loan options, jump online to see what’s on offer. Pay attention to the maximum insured loan-to-value ratio (LVR) to see how much of a deposit you’ll need to complete and whether or not you’ll need to pay mortgage insurance. To estimate your borrowing capacity, <a href="https://finder.us9.list-manage.com/track/click?u=cc5e9bce699fa1d71a67cf499&amp;id=e4acf67db0&amp;e=58cd8ffd03" target="_blank">use an online calculator</a> to get an indication of how much you can comfortably afford to borrow.  Here’s what our experts had to say: Jordan Eliseo, ABC Bullion: "The RBA will be happy to sit tight after their recent move, though we still see rates heading much lower in this cycle. CAPEX, inflation, wage growth etc are all still soft, and the AUD is still stubbornly sitting above USD $0.75. Headline GDP growth rates are reasonable, but we still expect the RBA to look through that and cut later in this year." Shane Oliver, AMP Capital: "It’s too soon since the last move in August and not much has changed to justify a move." Garry Shilson-Josling, Australian Associated Press: "The RBA prefers to link its cash rate moves to quarterly CPI releases and the next is not until late October." Darryl Gobbett, Baillieu Holst Ltd: "Bias is to cut further with the Aussie dollar still higher than wanted and outlook for continued private sector deflation but RBA wishes to retain some flexibility. Expect cash rate to be cut in November to 1.25%." Peter Munckton, Bank of Queensland: "The RBA has the cash rate at the right level." Richard Robinson, BIS Shrapnel: "Economic growth and the unemployment rate are reasonable at present. The last rate cut failed on three grounds - firstly, the exchange rate was unaffected (and it is our view that the RBA was seeking to engineer a depreciation) and secondly, the housing market saw an increase in sales activity and prices (and the RBA had said it didn't think there was a risk of this happening) and thirdly, only half of the cut was passed on by the commercial banks. The RBA should keep their powder dry for when the economy weakens in 1-2 years time or cut on the back of a rise in US rates to engineer a drop in the dollar." Michael Blythe, CBA: "[The RBA are] waiting for next CPI." Savanth Sebastian, CommSec: "RBA will want to see how the economy responds to the last two rate cuts in a post-election environment. Inflation outcomes will be key to next move on rates." John Hewson, ANU: "[The RBA are in] wait and see mode." Scott Morgan, Greater Bank: "The RBA is currently focussed on what the Australian dollar is doing what the US will do with rates. With the fairly stable dollar and talk of US rate increases, I think they will ‘wait and see’ this month." Mark Brimble, Griffith University: "They will take time to consider their options and explore alternatives as they wait to determine the impact of the previous rate cut (if any)." Peter Haller, Heritage Bank: "The RBA will wait to see what impact the August rate cut has on inflation and the economy more generally." Alex Joiner, IFM Investors: "No catalyst for a further move in terms of the data flow or deterioration of the outlook." Robert Montgomery, Infrastructure Partnerships Australia: "The RBA will hold rates at 1.5% after last month’s cut and wait to see how inflation responds. However, due to broader economic factors, monetary policy is unlikely to stimulate inflation in the near-term, meaning that the RBA will be cautious about further rate cuts in the near future." Michael Witts, ING Bank: "The RBA has done sufficient for the immediate term, much will depend on the US Fed and how the AUD responds." Leanne Pilkington, Laing+Simmons: "The cash rate is already low and any impacts from the recent cut have yet to really be felt in a housing market sense." Nicholas Gruen, Lateral Economics: "Because they are flying by the seat of their pants, and given the recent cut they won't want to do it again too soon." Lynne Jordan, Liberty: "There’s still no doubt another rate cut is on the cards. Completed construction levels dropped sharply in the last quarter, jobs and unemployment are showing no improvement since March and wage growth is expected to remain subdued for some time. However, rumours of a rate hike in the US are expected to apply downward pressure on the Australian dollar, meaning the Reserve Bank’s timeline for an additional rate cut could be pushed back to early next year. The urgency of any rate cut will no doubt take into consideration the impact of Government efforts to return the economy to benchmark GDP growth whilst also fighting deflation. As we’ve seen in overseas markets, in particular Japan, Europe and the US, monetary stimulus hasn’t produced the desired result. That suggests not only is the RBA going to have to push interest rates to even lower record levels, but there will be an increasing need for the government to use other measures such as fiscal stimulation if they are going to succeed in their objectives." Grant Harrod, LJ Hooker: "Concerns another decrease could drive house prices up further." Stephen Koukoulas, Market Economics: "RBA maintains a hint of optimism about the outlook - no need, at this stage, for more monetary policy stimulus." Michael Yardney, Metropole Property Strategists: "Having cut rates last month the RBA will now wait and see the effect of these cuts. The strong property markets, especially in Sydney and Melbourne, are likely to make the RBA wary of further cuts at present." Mark Crosby, Monash Business School: "With the Fed [Federal Reserve] considering raising there is no reason for the RBA to cut given recent cuts to the cash rate haven't had time to feed through to inflation." Emily Dabbs, Moody's Analytics: "Weak inflation data prompted easing earlier in the year, and the central bank will likely wait until the next data point before easing policy further." Jessica Darnbrough, Mortgage Choice: "Given that the Reserve Bank cut the cash rate last month, I think they will take a wait and see approach in September. The RBA will be keen to see what impact last month's rate cut will have on the property market as well as the broader economy before making any further adjustments to the current monetary policy setting." Saul Eslake, Economist: "RBA cut the cash rate at its last meeting, and will want time to evaluate the effects of that move before considering any further change - in the absence of any significant change in the economic environment." Alan Oster, NAB: "It’s too early to see results of last month's cut." Jonathan Chancellor, Property Observer: "Often the RBA cut in quick succession but not this time as with rates at such lows they are unlikely to have the desired outcome. They must be worried too about the Sydney property market resurgence." Matthew Peter, QIC: "Having cut in August, the RBA will await further data on growth and inflation and for signals from the US Fed on their next rate hike, before considering whether to end the current easing cycle." Noel Whittaker, QUT: "It’s too soon to change after last month." Angus Raine, Raine &amp; Horne: "The time of year will most probably drop before Christmas." Christine Williams, Smarter Property Investing: "In my opinion the rate will stay on hold due to last month's decrease together with the decrease of unemployment rate and coming into spring where historically the unemployment rate continues to reduce with seasonal employment in the retail, food and construction industries." Janu Chan, St.George Bank: "The RBA will take their time in assessing the impact of recent rate cuts in August and May." Steven Milch, Suncorp: "No pressing case for a move so soon after the August cut." Brian Parker, Sunsuper: "No material change in the RBAs growth or inflation outlook since last time, and current level of rates isn't holding anyone back!" Scott Haslem, UBS: "We believe now accommodative policy at a 1.5 percent percent cash rate, firm growth data, a likely trend lower in the AUD and concern about financial stability will see the RBA on-hold at 1.5 percent for the foreseeable future. While inflation will remain low, core inflation is likely to drift modestly higher from here." Nicki Hutley, Urbis: "Data is showing growth and employment remain moderately healthy. RBA [will be] reluctant to cut further so will wait for next CPI number to see if there is cause to cut again."</body></html>

Rate change unlikely, home loan sizes to soar

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<div class="column">GUEST OBSERVER 
</div>
<div class="column">The mostly gloomy debate around the Australian economy often gives the impression we are in a constant state of crisis.</div>
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<div class="column">But economic growth is pretty good, the economy has rebalanced without the (“inevitable”) recession, the worst of the mining bust looks to be behind us, public infrastructure spending is ramping up, consumer and business confidence are around long term averages, share market profits have likely bottomed and Australia stacks up well on social considerations.</div>
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 These are all reasons to be reasonably optimistic about the Australian economy and Australian assets. </div>
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Introduction 
Ever since the mining boom ended several years ago it seems a sense of gloom has pervaded debate regarding Australia. There is constant talk of recession whether we don’t do something (like control the budget) or even if we do nothing (with reports titled “Australian Recession 2016 – Why it’s unavoidable and the quickest way to protect your wealth”). This sense of gloom makes me wonder whether it could be harming us – by dulling innovation, investment and a “can do” spirit. This note looks at seven reasons for optimism on Australia. 
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There is always something to worry about 
To be sure Australia does have its problems. Unemployment at 5.7 percent and labour underutilisation at over 14 percent are too high. Housing is too expensive, the Sydney and Melbourne property markets are too hot, we are likely to see an oversupply of apartments and household debt levels are very high. The biggest boom in our history has ended, hitting investment and national income. Given this the $A is arguably still too high. Profits of listed companies fell around 7% over the last financial year. Wage growth and inflation are arguably too low for comfort. And we seem to be in perpetual political grid lock with a difficult Senate and no political ability to control the budget and undertake hard economic reforms. 
But these worries are well known and have been done to death. Of course there is always something to worry about, but the endless whinging we hear in Australia leaves the impression we are in a constant state of crisis &amp; distracts from the good news. 
Seven reasons for optimism on Australia 
There are in fact several reasons for optimism on Australia. 
1. First, economic growth is pretty good with the economy expanding 3.1 percent over the year to the March quarter and looking similar for the June quarter. This is in line with Australia’s long term average. It’s also way above most other advanced countries. Latest annual GDP growth rates are 1.2% in the US, 1.6% in the Eurozone and 0.6% in Japan. Of course I could add that the economy hasn’t had a recession in over 25 years, but that one gets a bit overdone and owes a little bit to luck with statistics!
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2. Second, the economy has rebalanced. The slump in mining investment and national income due to the collapse in our export prices has been offset by a surge in housing construction, solid consumer spending, a pick-up in services exports and a surge in resource export volumes. 
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As a result of all this, post mining boom weakness in WA &amp; NT is being offset by strength in NSW and Victoria as the much talked about two speed economy has just reversed. 
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The bottom line is that the recession many said was inevitable as a result of the mining bust hasn’t happened.
3. Third, the worst of the slump in commodity prices and mining investment looks to be behind us. After sharp falls from their highs around the turn of the decade global prices for iron ore, metals and energy have stabilised as greater balance has started to return to commodity markets and the $US has stopped surging higher. While a new commodity price boom is a long way away the stabilisation should help our terms of trade and national income.
Furthermore, after falling for three years from a peak of 7 percent of GDP, mining investment intentions indicate that mining investment will have fallen back to around its long term norm of around 1-2% of GDP by mid next year. Reflecting the slump in mining investment, engineering construction has now fallen back to near its long term trend indicating that the wind down in the mining investment boom is almost complete and that it will be less of a drag on growth next year. This is important because the slump in mining investment has been knocking 0.5 to 1 percentage points of annual GDP growth over the last three years. 
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4. Fourth, public infrastructure investment is ramping up strongly. This is partly driven by former Federal Treasurer Joe Hockey’s Asset Recycling Initiative that is seeing new state infrastructure spending particularly in NSW and the ACT financed from the privatisation of existing public assets. The upshot of a fading growth drag from mining investment and rising public capital spending is that it will offset the inevitable slowing in housing construction that we will see next year.
5. Fifth, despite all the gloom consumer and business confidence are actually around their long term averages. Would be nice to be higher but it ain’t bad.  
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6. Sixth, share market profits have likely bottomed. 2015-16 was not great for listed company profits with earnings per share down around 8% driven by a 47% slump in resources profits and a 4% fall in bank profits. But it is notable that 62% of companies have seen their profits rise on a year ago and the typical or median company has seen profit growth of around 4%. 54% have seen their share price outperform the market the day results were released which suggests results haven’t been worse than expected. While aggregate dividends fell 10% mainly due to a cut in resources company dividends (which were never sustainable anyway), 86% of companies actually increased or maintained their dividends indicating that the median company is doing okay. 
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Overall profits are on track to return to growth in 2016-17 as the slump in resources profits reverses (thanks to higher commodity prices, cost and supply controls) and non- resource stocks see growth. 2016-17 earnings growth is expected to be around 8%.
7. Finally, there are lots of social reasons to be optimistic about Australia. For example, we are living longer, healthier lives – in fact we rank 4th in the world in terms of life expectancy (at 82.8 years). Our cities regularly rank amongst the world’s most liveable cities - with Sydney and Melbourne at 10 and 15 respectively according to one survey. Unlike many developed countries our population is still growing solidly and we seem to do a better job at integrating immigrants than many countries. We are not wracked by the problems of a sharp rise in inequality seen in the US and UK. Despite the usual post-Olympic whinging we outperformed all the other top 10 2016 Olympic medal winning countries with 1.2 medals per million people (with the UK being the closest at 1 and the US at just 0.4).
Implications for investors
While the RBA may still need to cut rates again to help push inflation back up and keep the $A down, there is good reason for optimism regarding the overall Australian growth outlook making our call for one more rate cut a close one. Either way it’s unlikely that Australia will need zero interest rates or quantitative easing. But the key for investors is that there is reason for optimism regarding the outlook for Australian assets (Sydney and Melbourne residential property aside). Shares are due a short term correction with the next few months seeing various global event risks, but the broad trend is likely to remain up. 
 
<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. 
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Seven reasons for optimism on the Australian economy: Shane Oliver

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GUEST OBSERVER
Typically one would expect a rate hike cycle to cause mortgage rates to rise, at least at the margin. 
In a nation such as the US, where the mortgage rate is a long-term fixed rate, this should occur as market interest rate expectations firm. Yet for the US hiking cycle that began in late-2015, this has proven to not be the case. 
Not only did the US’ 30-year mortgage rate remain largely unchanged before and after the first rate hike (near 3.90 percent). But eight months on, the prime mortgage rate now stands at just 3.40 percent, having reached a cycle-low of 3.35 percent in early August.
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Taking a longer-term perspective, it is apparent that this decline is not a one off. Instead it is the continuation of a multi-year trend: the 2015 average 30-year mortgage rate of 3.90% also being well below 2014’s 4.21%. 
What is behind this downtrend in the mortgage rate? Weaker long- term Fed Fund Rate expectations have certainly played a part. Note that even the FOMC’s own longer-run Fed Funds expectation has been materially marked down over the past year, from 3.75% in mid- 2015 to 3.00% currently. But the relationship between the 30-year mortgage rate and the US 10-year Treasury yield adds a further element to consider: the impact of global liquidity. 
Simply, global liquidity has not only reduced borrowing costs for the US government (like many other nations across the globe), but thanks to the strong link between the US mortgage rate and Treasury rates, the benefit has also flowed to US households. Indeed, households who meet bank credit criteria have never been able to borrow so cheaply. 
Given continued robust job gains and a burgeoning improvement in wages growth, it is not surprising that not only has price momentum been sustained, but so too has sales activity. Indeed, abstracting from the monthly noise, recent months have shown evidence of strengthening real momentum in new home sales. 
The three-month average sales pace for new homes is 22% higher than its year-ago level; for 2016-to-date, the gain from 2015 to 2016 is a more modest (but still robust) 12%. A recent operational update from major US builder Toll Brothers also points to a robust pipeline of sales activity, with reservation deposits for the first three weeks of August reported to be up 23%yr versus 18%yr growth in contracts in Q2. Gains in activity were reported to be broad based across the firms many product lines and geographic regions. 
For existing home sales, having already experienced a material improvement through 2010–2015, recent gains have been much more muted. That said, the level of sales continues to slowly trend higher, which is indicative of robust, broad-based belief in housing as an asset class.
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If new home sales and the lead provided by the Toll Brothers update proves an accurate representation of current activity, then we are likely to see renewed momentum build in dwelling construction through the second half of 2016. This contribution is likely to be marginal, but nonetheless positive. Permits data points to much of this growth coming in the form of medium-to-high rise multiple dwelling buildings. As such, the activity is likely to be concentrated geographically but have a prolonged life, well into 2017.
With regards to policy, the momentum building is not cause for alarm, but it does highlight a need for the FOMC to be conscious of their ability to control market interest rates given rapidly growing global liquidity and all-important long-term market expectations. 
Elliot Clarke is director and senior economist, Westpac Institutional Bank, and can be contacted <a href="https://www.westpac.com.au" target="_blank">here</a>.
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The global weight of money and US housing: Westpac's Elliot Clarke

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Australia’s biggest home loan lender, Commonwealth Bank, has scaled back the discounts offered on new home loans.
The Australian Broker website says it did so as it faces increased funding pressures.
The website obtained a memo sent to the broking industry in which the major lender announced it will be reducing discounts by up to 15 basis points on new Mortgage Advantage Packaged Owner Occupied and Investment Home Loan applications.
The bank advised it was not raising or decreasing its headline rates.
The changes only related to a reduction in discounts on a select number of variable rate home and investment home loan products.
The discounts were also being reduced by 8 basis points on its Three-Year Special Rate Saver, Extra Life of Loan and Extra Introductory Rate products for new owner occupied and investment home loan applications. 
The reduced discount rates apply to new home loan applications for these products from 26 August 2016.
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CommBank cuts is discount mortgage offerings

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The Reserve Bank of Australia is losing credibility every time it cuts and claims the world's dearest residential property prices are nothing to worry about, according to the Australian Financial Review columnist Chris Joye. 
Joye noted the alleged that "the likelihood of lower interest rates exacerbating risks in the housing market has diminished".
Yet auction clearance rates in our two largest cities, Sydney and Melbourne, which account for 47 per cent of the metro population, are back to boom-time levels, he noted.
Joye suggests while the RBA argues that much lower sales volumes in 2016 signal weakness, "this is likely more a reflection of a four-year boom exhausting supply."
He says after the numerous occasions since the RBA began cutting rates in earnest in 2012, the RBA has assured the community that excessively cheap money would not drive dangerous house price growth that undermines affordability or financial stability.
"The ensuing data have proven these predictions to be bogus," he suggested.
Since January 2013, home values across Australia's eight capital cities have risen at an annual pace of 8.8 per cent, multiples annual growth in wages (2 per cent) and core inflation (2 per cent). 
Joye noted, according to UBS, Australia's dwelling price-to-income multiple hit an historic high of 5.6 times in September 2015 and inflated to an unprecedented 5.7 times in June 2016.
"The reason the RBA has got the Aussie housing market so wrong so often is likely related to two facts.
"First, it has never dealt with an economy that is carrying this much debt, and hence interest elasticity, before.
"And, second, it has never dropped the cash rate this low, and would never have conceived of doing so when economic growth was running above trend and house prices were rapidly scaling record heights."
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Chris Joye on bogus RBA claims that there's not dangerous house price growth

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GUEST OBSERVERS
The RBA minutes suggest a higher degree of uncertainty around the Bank’s outlook, with board members concerned about the labour market, potential negative feedback from the housing market into the CPI, and the effect of easy international monetary policy on the exchange rate.
While we still expect the RBA to keep the cash rate on hold at 1.5 percent as it assess the impact of the May and August rate cuts, we continue to see the risks as tilted firmly to the downside.
DETAILS
The RBA remains more than usually uncertain about the labour market. “Members noted that there continued to be considerably uncertainty about momentum in the domestic labour market and the extent to which domestic inflationary pressures would rise over the next few years.”
These concerns relate to the degree of slack currently in the labour market, with measures of underemployment suggesting that overall labour underutilisation remains high. Moreover, the Bank is concerned that while the expansion of LNG export capacity will make a significant contribution to growth over the coming years, its low labour intensity will not see a similar boost to employment.
The Board is concerned about a negative feedback loop from housing into inflation. The minutes note that the risk of housing oversupply was “important for the inflation outlook because housing costs make up a significant share of the CPI basket”.</div>
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<div class="column">The pressure on housing costs as measured by the CPI is likely to come through in both rents, which are barely growing, as well as new house purchase costs. Together, rents and new house prices make up 16 percent of the inflation basket and are the two largest components of the CPI.</div>
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 The impact of international monetary policy on the exchange rate continues to be a bugbear. The Board noted that “changes to expectations about central banks’ policies continues to have an important influence on global exchange rate developments”, after acknowledging that a rate risk in the US was not priced in until late 2017 and further easing was likely in Europe and the UK.</div>
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<div class="column">They reiterated the comment that “an appreciating exchange rate could complicate the necessary economic adjustments”.</div>
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 OUTLOOK</div>
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 While the minutes did not include any explicit forward guidance, we think that the RBA retains a strong easing bias. With inflation set to remain below or at the bottom of the Bank’s 2-3 percent target band for the entire forecast period, we expect that the easing bias is quite strong, particularly when banks passed on only half the August rate cut to variable home loan customers.</div>
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 Our central case is that the cash rate will remain unchanged at 1.5 percent, but we see a clear risk of further easing given the low inflation outlook, where there is a lack of drivers for a meaningful pickup in prices.</div>
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 We think that the RBA will want to assess the impact of the May and August cuts on the labour market and housing market, while inflation data come into play when the Q3 CPI is published on 26 October. The exchange rate also will continue to be an important input into monetary policy deliberations given that it appreciated after the August rate cut and is near the high reached in April. 
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<div class="column">Felicity Emmett co-head of Australian economics, ANZ Research and can be contacted <a href="https://www.propertyobserver.com.au/https://au.linkedin.com/pub/felicity-emmett/5a/3ba/256" target="_blank">here</a>.</div>
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<div class="column">Kieran Davies is an economist for ANZ and can be contacted <a href="https://www.anz.com/personal/" target="_blank">here</a>.</div>
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Uncertainty reigns in August RBA board minutes: ANZ 

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Consumers should not expect the recent variable rate cuts to last for long, a mortgage industry veteran, 1300 HomeLoan managing director John Kolenda says.
He expects many lenders to reprice sometime this year as the current margins are unsustainable with the additional costs banks are facing along with the pressures of return on equity for their shareholders, Kolenda said.
Kolenda said consumers can at least count on interest rates to stay low for the foreseeable future.
Some 17 more lenders have passed on the interest rate cut, according to finder.com.au.
This includes online banks who have cut interest rates from between 10 to 15 basis points.
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Variable rate cuts will not last long: John Kolenda

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GUEST OBSERVER
The minutes of the August monetary policy meeting of the Reserve Bank Board, in which it reduced the overnight cash rate by 25bps to 1.5 percent, provided little in the way of additional insight around the Bank’s forward view.
With the Governor’s decision statement released on the day, the Bank’s full Statement on Monetary Policy (SoMP) released a few days later and a speech from the outgoing RBA Governor since the decision, the minutes are mostly of interest for any additional detail they may provide on the decision rationale and points picked up in the Board’s discussion.
The ‘Considerations for Monetary Policy’ section sets out the rationale and largely restates the Governor’s decision statement but with a couple of minor tweaks.
One of these is picking up a phrase we had noted from the SoMP that “[members] observed that while prospects for growth were positive, there was room for stronger growth, which could be assisted by lower interest rates.” In contrast to its slightly ambiguous usage in the August SoMP, the phrase in the minutes is simply used as part of the explanation of the August rate cut decision rather than anything that might be construed as explicit forward guidance.
The other slight change – nuance perhaps – was around the description of the inflation outlook. The minutes state: “Underlying inflation was expected to remain low for a time before picking up gradually as spare capacity in labour and many product markets diminished.” This is a slightly different colour to the Bank’s straight numerical forecasts which have underlying inflation lifting from 1½ percent in 2016 to 2 percent (mid-point of 1½-2½ percent range) by June 2017 holding at 2 percent thereafter.
The ‘gradual pick up’ suggests a little more ‘shape’ to the outlook beyond 2017 perhaps alluding to a return to the target range beyond the forecast horizon of December 2018. Certainly ‘tone-wise’ it’s a bit different to the phrasing in the SoMP overview which noted that “inflation is likely to remain below 2 per cent over most of the forecast period”.
The central rationale for the August move was set out as per previous communication: expectations around external conditions and growth were little changed but the weaker trajectory for inflation had been confirmed and with room for stronger growth and risks around household sector leverage seen as diminished, a further rate cut was viewed as improving prospects for sustainable growth and inflation returning to target.
Comments attributed specifically to ‘members’ highlighted areas of uncertainty or concern within the Board including: “…considerable uncertainty about momentum in the domestic labour market and the extent to which domestic inflationary pressures would rise over the next few years”; that for a forecast gradual rise in household consumption “there was some uncertainty about whether households would respond to developments affecting their disposable incomes by adjusting consumption growth or altering their saving rates.”; and that the “very high levels” of dwellings under construction “had increased the risk of oversupply in parts of the country”.
Around financial markets, members noted that ‘Brexit’ volatility had subsided but that market pricing for the Fed did not have another rate rise priced until late 2017. On the AUD, the minutes repeat the exact same wording that “an appreciating exchange rate could complicate” the support coming from low interest rates and previous exchange rate depreciation.
Conclusion
Having cut rates in August, the RBA is clearly in ‘watch and see’ mode. In contrast to the Jun-Jul ‘hiatus’ the Bank will not only be interested in growth and inflation developments but will now also be trying to gauge the impact of its May and Aug moves.
The Board is almost certain to keep rates on hold in September. However we continue to view the Reserve Bank as carrying an easing bias – implicit in its inflation forecasts and in our view in much of its rhetoric. However, we expect that downside risks around economic conditions will diminish sufficiently in coming months to see the Bank retain a more patient approach to its inflation objective. Accordingly we expect that the Bank will keep rates on hold over the remainder of 2016 despite an apparent easing bias.
Matthew Hassan is senior economist with <a href="https://www.westpac.com.au/" target="_blank">Westpac</a>.
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