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.

Joel Robinson

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

A collection of just 25 large-format apartments and penthouses overlooking Goodwin Park is entering the Coolangatta market, with <a href="https://www.apartments.com.au/new-apartments/marea-residences-coolangatta-27-27a-dixon-street-coolangatta-qld-4225">Maréa Residences</a> combining a low-density, residential-only approach with uninterrupted park and Pacific Ocean outlooks.

Located at 27 Dixon Street, Maréa comprises three and four-bedroom residences alongside a limited number of dual-level penthouses, with the project positioned between Goodwin Park and <a href="https://www.apartments.com.au/developments/coolangatta-qld-4225">Coolangatta</a>’s coastal precinct.

Construction has commenced, with completion currently estimated for late 2027. Three-bedroom residences are priced from $1.8 million.

[smartcode_project:default project_id=150999 project_image_fid=374005]

The project has been designed around its northern outlook across the park, with the building’s architecture, landscaping and material palette intended to establish a connection with the neighbouring green space. The residences have been configured to maximise natural light and views across Goodwin Park towards the ocean.

Inside, the material palette incorporates timber, stone and brushed brass, complemented by curved detailing and ambient lighting. Kitchens and bathrooms carry the same natural material approach, while residences also include basement parking, storage and lift access.

Maréa’s penthouses are arranged over two levels and include private pools, adding another layer to the project’s focus on larger-format apartment living. Across the development, residences are configured with three or four bedrooms rather than the broader mix of smaller apartment types commonly found in larger projects.

[smartcode_project:default project_id=150999 project_image_fid=374010]

Resident amenity is concentrated at rooftop level, where landscaped entertaining terraces and pools take advantage of elevated views across Coolangatta and the Pacific Ocean.

The project has so far been particularly well received by local owner-occupiers and downsizers, according to Urban Activation Property Sales and Marketing Director Matt George, with the residential-only format, construction quality and northern park outlook among the features resonating with purchasers.

“The uninterrupted northern aspect overlooking Goodwin Park has been a key point of difference, with buyers attracted to the sense of serenity and open space the park provides, while still enjoying easy access to the ocean and being within walking distance of the lifestyle and amenities Coolangatta has to offer,” George said.

[smartcode_project:default project_id=150999 project_image_fid=374002]

“The combination of high-quality construction, a residential-only building, park outlook and proximity to the beach has resonated strongly with the local downsizer market.”

The Dixon Street address is within walking distance of Coolangatta Beach and the broader southern Gold Coast coastline, including the surf breaks at Snapper Rocks and Kirra. Coolangatta’s cafés, restaurants and retail are nearby, while Gold Coast Airport is also within close proximity.

[smartcode_project_cta:default project_id=150999]

Maréa Residences brings parkside apartments to Coolangatta

Interest Rates

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Home loan lender, ME, has announced a range of interest rate cuts across variable and fixed rate products.
It included introducing a variable rate below 4 percent for new owner occupier with a maximum LVR of 80 percent. The variable rate for new owner occupier loans has been discounted by 6 basis points to 3.95 percent. This is an 88 basis point discount off the reference rate for the life of the loan. The variable rate on its investment Flexible Home Loan with Member Package has been reduced by 9 basis points to 4.15 percent. This is a 68 basis point discount off the reference rate. The non-major has also cut its one and two-year fixed rates by 30 basis points on its Flexible Home Loan for owner occupiers to 3.99 percent.
The four and five-year fixed rates have been cut by 10 basis points to 4.49 percent. For investors, the Flexible Home Loan has been discounted by 20 basis points on its one and two-year fixed rates, to 4.09 percent, effective yesterday.
For more information, <a href="https://www.mebank.com.au" target="_blank">click here</a>.
Following the Reserve Bank of Australia’s decision to cut the cash rate in May, demand for variable rate mortgages has risen, according to Mortgage Choice’s latest national home loan approval data.
Variable rate home loans accounted for 76% of all loans written in May – up from 75% the month prior.   “After the Reserve Bank’s decision to cut the cash rate at its May Board meeting, three of the four majors passed on the full rate cut – trimming their variable rates by 25 basis points,” Mortgage Choice chief executive officer John Flavell said.   “With that in mind, it was hardly surprising to see a lift in demand for variable rate products this month. Borrowers are clearly looking to take advantage of the historically low rate environment.   “And, with many economists predicting at least one more rate cut this calendar year, I wouldn’t be surprised to see demand for variable rate products remaining strong for the foreseeable future.”   Across the country, demand for variable rate products was highest in Victoria, with this type of product accounting for 86% of all loans written in May.   Variable rate demand was lowest in New South Wales, with this type of product accounting for 71.47% of all loans written.
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ME drops variable home loan rate to below 4 percent

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GUEST OBSERVER
Cash interest rates are at 1.75 percent - a historic low in Australia. This low rate means that it is an opportune time to invest in property and the number of investments acquirable is maximised.
However, interest rates are an issue of contention in popular media. There has been much speculation about why they are so low, the Reserve Bank of Australia’s decision to reduce them for this month, and whether interest rates are likely to go up or down next. 
A common question that we are asked is how will an increased interest rate affect my investment property? To understand this, it’s vital to understand what drives interest rates to rise and fall. In short, interest rates respond to a growth, or decline, in the economy. 
For example, a number of investors that I speak to are afraid of history repeating itself, and I’m often reminded of the late eighties, when interest rates were up at 17 per cent. 
This is a significantly higher rate than what we are seeing today, however the median house price grew 50 per cent when interest rates were at that level (between 1987-1989). 
This was a time of extreme inflation and economic growth for Australia, pushing up property prices, but also wages. 
Applying this to 2016, the RBA explains their choice to leave interest rates at historic lows using a few different points. 
It is suggested by the RBA that the global economy is growing at a slower pace than predicted, commodity prices have declined, financial markets remain volatile, and inflation is low. 
These conditions lead to the RBA to their decision, stating that monetary policy must remain accommodative, and low interest rates support demand. 
As demonstrated, the national and global economy has a direct effect on interest rates in Australia, but what happens to your investment if they go up? Investors are often concerned that an increase in interest rates will mean that they will no longer be able to afford to hold their investment property. 
Fortunately, this is not true. As mentioned, interest rates typically move in response to a growth in the economy. This leads to an increase of property values, wages, and rental income. 
Further to this, higher interest rates lead to more advantageous tax benefits becoming available. If the value of your investment property grows significantly, substantial equity is created, in turn increasing your borrowing capacity and number of properties acquirable. 
It is difficult to predict what will happen next, however a fear of increasing interest rates should not deter you from investing in a property. If you’ve been thinking about investing for some time, today’s low interest rates are likely to maximise your success. 
Michael Beresford is director, OpenCorp and can be contacted <a href="https://www.opencorp.com.au" target="_blank">here</a>.
  
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Ambiguous interest rates and their effect on your investments

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Fixed, split or variable? Home buyers are always faced with the dilemma as to which is the best mortgage for their needs.
Interest rates being fickle, bank loan approvals usually take into account rate rises to make sure the repayment is still affordable, though in the end it still boils down to an individual's capacity to repay. 
The current low interest rate environment has translated to a growth in fixed loans. 
Let's look at each type of mortgage:
Fixed
The biggest advantage of fixed-rate loans is the predictability that comes with it, giving you some peace of mind as you are largely insulated from interest rate fluctuations. 
ASX-listed Mortgage Choice reported earlier this year that the demand for fixed rate home loans hit its highest level in more than 12 months, citing national home loan approval data, with fixed rate home loans accounting for 23.62 percent of all loans written in January, up from 19.44 percent in the previous month. 
But while considering fixed-rate loans, you must carefully consider the time period over which you would be comfortable with paying fixed payments.  
If interest rates drop during this period, you might end up paying more. Obviously, how much lower is the question. Because at present, RBA's cash rate of 1.75 percent is already at record lows.
The best aspect of fixed rate, however, is that it allows you to plan ahead as you already know how much to set aside for the mortgage payment each month.
The popular fixed rate products are usually around three to five years. 
Property Observer went looking for the cheapest fixed home loans on <a href="https://mozo.com.au/home-loans/fixed-rate" target="_blank">mozo.com.au</a> and found that Illawarra Credit Union with an interest rate of 3.5 percent for the first year of mortgage was the one with the lowest rate. It was followed by Greater Bank at 3.79 percent, Illawarra Credit Union with 3.85 percent (for two years), loans.com.au at 3.99 percent and last Hunter United Credit Union at 3.98 percent. 
Fixed-rate loans come with a caveat. If you try to pay off your fixed-rate loan, fixed rate break costs and discharge fees apply.
If your home loan is fixed or if it was setup before July 2011, the exit fees can be significant.
So it may be worth considering a variable rate if your plan is to sell the property after some quickly realised gains. 
Some fixed rate loans include redraw facilities, and some have more flexible terms around repayments allowing you to pay extra up to a certain amount.
Variable
When it comes to variable rate loans, flexibility is the buzz word.
Variable interest rates tend to be lower than fixed rate products, and will have more features as well. However, they do come with an added risk, that of rising interest rates increasing your mortgage payments. So you need to be covered when interest rates rise.
If you’re borrowing less than you can handle, then you may decide that a variable rate is a good option in the immediate term – you can always fix later if necessary.
As of May 17, 2016, the top variable rates offered by lenders varied from 3.63 percent to 4.20 percent, according to mozo.com.au.
Independent lender <a href="https://offers.mortgagehouse.com.au/autumn-special/?campaignid=22150&amp;sourceid=45&amp;gclid=CIXG1-q-4swCFVcnvQodjnoJow" target="_blank">www.mortgagehouse.com.au</a> is offering a variable rate of 3.52% for the first six months, which then reverts to 4.02%. The lender also claims that it doesn't have expensive overheads unlike banks, which allows it to better customise its products and offer lower rates to customers.
Another advantage of variable interest rate home loans is that paying lump sums is easier with fewer associated costs than fixed rate loans.
If you know you cannot increase your repayments significantly, and there's a sudden vacancy in an investment property, then a rate rise can impact you. On the other hand, a rate cut will mean you could find yourself with a bit of extra cash on hand or paying off your mortgage sooner. 
Split
A 'split loan' is a comfortable compromise between the pros and cons of fixed and variable interest rate loans, according to a blog on the website of Suncorp Bank. A split mortgage allows you to reap the benefits of both the security of fixed rate loan and the flexibility of a variable interest rate loan. 
How it works is that you can allocate a portion of your loan amount to attract a variable interest rate, and another portion to a fixed rate, thus you have the security and the flexibility. The split may not necessarily be 50/50, it can be what you are comfortable with.
This provides you partial protection from future interest rate changes.
This may be a good option if you plan to pay off your loan earlier. The extra repayments you make can be solely done on the variable component of the loan.
However, you may have to pay the costs should you wish to break the fixed portion as that part is considered a fixed mortgage. 
As always, these are just rough guidelines and one should always consult a loan specialist to figure out which product is best suited to your needs.
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How to decide: Fixed, split and variable home loan interest rates

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GUEST OBSERVER
If Reserve Bank Board members had to be “persuaded” to cut rates, it is clear that there was a variety of views.
It also seems clear that there was some reluctance to cut rates. And that is understandable. Ordinarily you cut rates if the economy is weakening and needs and extra kick along. But that is certainly not the case. The issue is solely inflation, more specifically, the outlook for inflation.
Inflation is tipped to remain low and that means that the economy could grow a little faster. Board members also had to be comfortable (“persuaded?) that a rate cut wouldn’t cause the housing market to become over-inflated.
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<img src="/images/2016/05/17/Screen%20Shot%202016-05-17%20at%202.56.54%20PM.png" alt="">
It is important to remember that there is no formal vote at Reserve Bank Board meetings. Decisions are arrived at by consensus (a “collegiate approach”). Reserve Bank Board members are no doubt a touch sceptical that rate cuts still work to lift growth and inflation at low nominal levels.
Some economists and strategists have pushed for another rate cut in June. This is now far from likely. The “rate cut school” are failing to properly understand the position of Reserve Bank Board members. The Reserve Bank Board will wait for the next inflation data at the end of July. There is no rush. And Board members may have to again be convinced that a rate cut is a useful thing to do.
Another rate cut may occur in August but it all depends on inflation. If the economy continues to out-perform and the housing market remains bubbly then the Board will remain firmly on the sidelines. A key question is whether a rate cut would actually do anything – it could up being counter-productive – causing people to fret that the economy is in some form of trouble.   What do the figures show? Reserve Bank Board minutes
The key quotes from the Board minutes:
Summary: “Members discussed the merits of adjusting policy at this meeting or awaiting further information before acting. On balance, members were persuaded that prospects for sustainable growth in the economy, with inflation returning to target over time, would be improved by easing monetary policy at this meeting.”
Summary: “In coming to their policy decision, members noted that developments over recent months had not led to a material change in the outlook for economic activity or the unemployment rate, but the outlook for inflation had been revised lower. At the same time, they took careful note of developments in the housing market, which indicated that supervisory measures were strengthening lending standards and that the potential risks of lowering interest rates therefore were less than they had been a year earlier.”
Australian dollar: “The exchange rate depreciation since early 2013 was assisting with growth and the economic adjustment process, although an appreciating exchange rate could complicate this.”
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Inflation: “…the CPI data had indicated that weakness in domestic cost pressures had been broadly based. Non-tradables inflation had declined further in March to around its lowest year-ended rate since the late 1990s, reflecting low growth in labour costs and a range of other factors, including heightened retail competition, a moderation in conditions in housing rental and construction markets, and declines in the cost of business inputs such as fuel and utilities.”
Wages: “…information from the Bank's business liaison suggested that firms generally had been unwilling to make offers of wage growth below 2 per cent. But if inflation was to be persistently lower than previously forecast, it was possible that, in time, this could be reflected in lower wage growth.
Consumer spending: “Information from the Bank's liaison with retailers suggested some moderation in trading conditions in 2016, although conditions had remained generally positive.”
Consumer confidence
The ANZ/Roy Morgan consumer confidence rating rose by 1.1 per cent to 115.1 in the week to May 15.
Confidence is up 0.4 percent over the year and above the average of 112.1 since 2014. Two of the five components of the index rose in the latest week:
The estimate of family finances compared with a year ago was  down from +5 to +4; The estimate of family finances over the next year was  down from +26 to +25; Economic conditions over the next 12 months was  up from -3 to +3; Economic conditions over the next 5 years was  up from +7 to +10; The measure of whether it was a good time to buy a major household item was down from +34 points to +33 points.
New car sales:
According to the Australian Bureau of Statistics (ABS) new vehicle sales fell by 2.5 per cent in April after rising by 2.2 per cent in seasonally adjusted terms in March. Passenger car sales fell by 1.2 per cent, while sales of sports utility vehicles fell by 2.6 per cent and sales of “other” vehicles (includes utilities, panel vans, cab chassis, goods carrying vans, rigid trucks, prime movers, non-freight carrying trucks, and buses) fell by 4.8 per cent.
New vehicles sales were up by 2.4 percent over the year. Passenger car sales in April were up by 0.6 percent over the year while SUVs sales were up by 1.6 percent and “other vehicles” were up by 7.8 percent.
Sales across the country in April: NSW (-1.5 per cent); Victoria (+0.1 per cent); Queensland (-7.7 per cent); South Australia (-4.5 per cent); Western Australia (-1.3 per cent); Tasmania (+0.9 per cent); Northern Territory (-6.7 per cent); ACT (-1.8 per cent).
In rolling annual terms, a record 1,169,057 new vehicles were sold over the year to April. Sales of SUVs (423,744) hit record highs in annual terms, while annual sales of “other” vehicles stood at a 32-month high of 238,309.
Sales of passenger vehicles lifted from a near 19-year low of 505,348 to 507,004 in the year to April.
SUVs accounted for a record 45.53 per cent of combined  passenger car and SUV sales in the year to April.
What is the importance of the economic data?
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.
The Australian Bureau of Statistics  provides seasonally adjusted and trend estimates of industry data. The Federal Chamber of Automotive Industries  releases estimates of car sales  on the third business day of the month. The figures highlight the strength of consumer spending as well as conditions facing auto &amp; components companies.
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. 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.
Australia is probably the only country in the world where rate cuts aren’t prompted by weakness in the economy.
Twice the Reserve Bank mentioned “heightened retail competition”. Global tech-led disruption is driving down costs, prices, wages and, in turn, interest rates.
Consumer confidence is remarkably positive despite the election now being in full swing and despite a weaker Aussie dollar.
Craig James is the chief economist at <a href="https://www.comsec.com.au/default.aspx" target="_blank">CommSec</a>.
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Reserve Bank Board reluctant to cut rates: CommSec's Craig James

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GUEST OBSERVER
The minutes of the May monetary policy meeting of the Reserve Bank Board provide only one additional insights to the Statement on Monetary Policy (SoMP) which printed on May 6.
This insight is in the final paragraph of the “Considerations” section where it emphasised the closeness of the decision to cut the overnight cash rate using the qualification, ”members discussed the merits of adjusting policy at this meeting or awaiting further information before acting.” This wording which may be interpreted as a truism is, nevertheless, not always used and would therefore cast considerable doubt on prospects for a follow up move before our preferred date of August when further information on inflation will be available.
In the SOMP and repeated in these minutes the following key observation was made: “Members noted that developments over recent months had not led to a material change in the outlook for economic activity or the unemployment rate but the outlook for inflation had been revised lower.” The Board also noted that developments in the housing market represented less risk of overstimulating with a further rate cut.
The discussion on inflation highlighted the following points – “weakness in domestic cost pressures had been broadly based reflecting low growth in labour costs and a range of other factors including heightened retail competition, a moderation in conditions in housing rental and construction markets and declines in the cost of business inputs such as fuel and utilities”. It was also noted that low wage growth and heightened retail competition appeared to have limited the extent to which importers were passing on higher import prices to retail prices.
Particular emphasis is given to subdued growth in labour costs (a bit weaker over 2015 than expected). It is important to note that the Bank’s forecasts embody the expectation that growth in the wage price index will stabilise around current rates before gradually picking up later in the forecast period. Bank liaison suggested that firms had been unwilling to make offers of wage growth below 2%. In this regard the next wage price index which prints tomorrow will be closely watched. Westpac expects a 0.4% print down from 0.5% last quarter and 0.6%’s in previous quarters – if correct this result will certainly unnerve the authorities although, in our view, not sufficiently to trigger a rate cut before our current timing of August by which time the Bank will have received the full picture on price developments from the June quarter inflation report.
As discussed above the inflation outlook was the only real change from previous assessments. Employment is expected to continue to grow at a slower pace than had been evident over the previous year and the unemployment rate was expected to remain around 5¾% over the next year or so before gradually declining. This outlook is broadly in line with that set out in February and from our perspective is somewhat cautious. For example, Westpac expects the unemployment rate to have edged down to 5.4% by mid next year.
Consistent with the Bank retaining its 3% growth forecasts for 2016 and 2017 in the May SoMP the commentary around the overall real economy is broadly unchanged. Further strong growth in dwelling investment is expected; house prices are expected to grow moderately; indicators of business investment intentions remain weak with non-mining investment only forecast to gradually pick up later in the forecast period and the magnitude of mining investment was expected to diminish over the next couple of years.
At the time of the May Board meeting the AUD was around USD 0.76 and TWI 63.3 prompting the following observation in the minutes: “the exchange rate depreciation since early 2013 was assisting with growth and the economic adjustment process, although an appreciating exchange rate could complicate this.” That compares with USD 0.73 and TWI 61.4 today, providing the Board with considerable comfort around the impact of the AUD on Australia’s growth prospects.
As discussed in the SoMP the Bank appears to be increasingly nervous about China. While recognising the short term impact of more stimulatory policy settings the minutes conclude that these actions might adversely affect financial stability and the economic outlook in China more broadly in the medium term.
There would also appear to be a scaling back in the RBA’s expectations for US Federal Reserve policy. Rather than refer to the Fed’s tightening cycle the minutes now choose to quote market pricing which implies at most one 25bp increase in the Federal Funds rate during 2016.
Conclusion
It is difficult to see any significant additional insights in these minutes relative to the more comprehensive Statement on Monetary Policy.
With reasonable prospects for ongoing above-trend growth we expect that the Bank will be satisfied that its next rate cut in August will provide further support for its current forecast that underlying inflation will be back near the bottom of the target zone in 2017. However, clearly with the evidence of today’s minutes emphasising the importance of the inflation outlook, risks to our current forecast must remain to the downside.
Bill Evans is chief economist of <a href="https://www.westpac.com.au/" target="_blank">Westpac</a>.
 
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RBA minutes show importance of inflation to rate cut decision: Westpac's Bill Evans

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GUEST OBSERVER
Today's RBA minutes, which record the deliberations that led to the 3 May cut in the cash rate, showed that the central bank had discussed both the possibility of cutting rates at that meeting or 'awaiting further information before acting'. 
The minutes note that the board had an extensive discussion about the Q1 CPI figures and the outlook for inflation given the dynamics of the labour market and current weak wages growth. The apparent hesitancy to cut, relayed in the minutes, supports our view that the RBA will probably choose to wait for the Q2 CPI print, due on 27 July, before cutting further. Our central case sees the RBA cutting to 1.50% in August and holding steady at that level over the subsequent quarters.
Facts
The RBA published the minutes for its 3 May board meeting at which the central bank decided to cut its cash rate by 25bp to 1.75%. A cut was only 45:55 priced going into the meeting and 12 of 27 economists in the Bloomberg survey expected a cut (HSBC expected a cut).
Implications
Today's minutes revealed that the 3 May board meeting, in which the RBA cut its cash rate by 25bp to 1.75%, was a fairly close call. As the minutes noted, the board had 'discussed the merits of adjusting policy at [that] meeting or awaiting further information before acting'.
The minutes report that the board spent a considerable amount of time discussing the Q1 CPI numbers and the outlook for inflation. The key question was the extent to which the new CPI numbers, which had surprised significantly to the downside, provided a signal about the on-going trend in inflation and to what extent the weaker inflation print was temporary or due to measurement error.
In the end, the board determined that the new information did materially change the inflation outlook and they delivered a 25bp cut in the cash rate to 1.75% (as we had expected).
However, the degree of hesitancy revealed in the minutes suggests that the RBA is likely to be reluctant to follow-up with a further cut without further clear information on the disinflationary trend. To us, this suggests that the RBA is unlikely to cut further until after the next CPI print, which is due to be published on 27 July.
Despite making no changes to the RBA's growth forecasts, the central bank did make a significant downward revision to its inflation forecasts. Underlying inflation had previously been expected to run near the bottom edge of the 2-3% target band, but the new forecasts showed that it was expected to remain around 1-2% over 2016 and to pick up to 1.5-2.5% by mid-2018.
This adjustment to the forecasts seemingly reflects much more than just the downside surprise to the Q1 CPI print. Rather, it is significant shift in the way the RBA sees the interaction of growth, the labour market, wages growth and inflation.
We also see a significant part of the downward adjustment to the underlying inflation forecasts as tactical. In our view, the RBA now wanted a set of inflation forecasts where the chances of a downside surprise are very low. Further downside surprises to the inflation numbers could put the credibility of the inflation targeting regime at risk. They also wanted the inflation forecasts to bolster the easing bias, despite the cut that was delivered, and in doing so, put further downward pressure on the AUD. The sharp fall in the AUD since the board meeting suggests that this tactic has worked.
We see the RBA as likely to cut further. Our central case has another 25bp cut in the cash rate to 1.50%, delivered in August, just after the Q2 CPI print. We then expect that, over time, underlying inflation may very well be a touch stronger than the RBA is forecasting, allowing the central bank to hold steady and point out that, although underlying inflation is below target, it is moving in the right direction and ahead of the forecasts. In doing this, the RBA would make use of the flexibility that is explicit in its inflation targeting regime. We see the forecasts themselves as a device that the RBA is using to loosen financial conditions.
<a href="https://www.about.hsbc.com.au/hsbc-in-australia/management-team" target="_blank">PAUL BLOXHAM</a> IS CHIEF ECONOMIST (AUSTRALIA AND NEW ZEALAND) FOR HSBC.
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RBA likely to wait until August to cut again: HSBC's Paul Bloxham

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Stabilising house prices: May monetary Reserve Bank board minutes

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The former head of the property division of Macquarie Group Bill Moss has said property prices could see a 30 percent price reduction should negative gearing change under the property Labor opposition plans.
Speaking to Macquarie Radio broadcaster, Ross Greenwood on Money News yesterday, Moss said it will be like a brand new car and a second hand car.
"It's going to be like buying a brand new car, as soon as you take it on the road the value drops," he said.
"It'll be the same in real estate.
"What's the difference going to be?
"Well its going to depend on interest rates, the economy at the time, it could be 30 percent, it could be more," he said.
Moss said that negative gearing just seems to work and like other commentators clearly feels it shouldn't be tampered with.
"We've seen it have a bit of oversupply, a bit of undersupply, but ultimately there are plenty of people out there putting their own equity into buy real estate so others can rent.
"If you start playing with it you can have some major consequences," he said.
"You can see property moving outwards and I think you could possibly even see a lot of people say 'well look I'm not going to be in that sector of investment'".
Moss said that if you play with negative gearing and reduce it there will be less houses being built, which has a number of effects.
"Number one there will be less jobs in the construction industry," he said.
"We're going to see a major downturn in growth in the economy, a lot more people unemployed."
"Ultimately, if you take it away people aren't going to invest in real estate, it's as simple as that."
To listed to the full interview <a href="https://www.2gb.com/article/former-macquarie-bank-executive-and-founder-fshd-global-research-foundation-bill-moss" target="_blank">click here.</a>
Aussie John Symond has warned of a potential recession if Labor's plan to limit negative gearing to freshly constructed dwellings goes ahead, calling it "frightening" in an appearance on Seven's Sunrise program on Sunday. 
"Who knows? I don't know whether prices will drop 10 percent, 20 percent or more," he said.
The property tycoon and founder of Aussie Home Loans predicted a slide in home prices under Labor.
"It is frightening and it will frighten others . . . and it creates this stampede. And that's my concern that there could be a glut of properties come on the market, force the prices down, and then all of a sudden it could be Armageddon with the housing industry that's propped up the Australian economy the last four years."
Symond joins another industry leader, Stockland boss who expressed a similiar recession fear last week. 
Mark Steinert, chief executive of Australia's largest residential property developer, Stockland, believes Labor's housing policy has "the potential to destabilise the entire economy" – to the extent of "risking a recession".
"At the end of the day, house prices are unlikely to adjust so much that it would really change that affordability equation anyway," Steinert told the Australian Financial Review.
"And if they do, believe me it won't be a recession. It will be a depression."
Steinert told columnist Jennifer Hewitt property is such a major force driving Australian growth and activity, that even a small change in the market and in sentiment flows through the entire economy. 
"Housing represents $6.5 trillion of the Australian people's wealth," he told The Australian Financial Review.  
{mijopolls 142}
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Bill Moss predicts up to 30 percent price reduction under Labor's negative gearing, like old versus new car

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<img src="https://counter.theconversation.edu.au/content/57114/count.gif" alt="The Conversation" width="1" height="1">
GUEST OBSERVER
For economists and others who ‘grew up’ being challenged to achieve low and stable inflation against the background of high and volatile inflation rates that emerged in Western countries in the 1970s (and persisted in Australia through the 1980s), the possibility inflation could be ‘too low’ can seem like something from another universe.
The Reserve Bank of Australia’s 2-3% inflation target was more-or-less unilaterally promulgated by Bernie Fraser (who was RBA Governor from 1989 until 2006).
In a speech just after the 1993 election (at which the Liberal Opposition had advocated the introduction of a 0-2 percent inflation target, similar to that which had been adopted in New Zealand in 1989), Fraser suggested that:
“If the rate of inflation in underlying terms could be held to an average of 2-3 percent over a period of years, that would be a good outcome. Such a rate would be unlikely to materially affect business and consumer decisions, and it would avoid the unnecessary costs entailed in pursuing a lower rate.”
Although Bernie Fraser was initially “rather wary of inflation targets”, he explicitly couched the series of interest rate hikes he implemented during the second half of 1994 as being undertaken in order to maintain inflation within the 2-3 percent range.
The target was formally embodied in a Statement on the Conduct of Monetary Policy agreed between newly-installed Treasurer Peter Costello and newly-appointed RBA Governor Ian Macfarlane shortly after the 1996 election, and has been re-iterated after each change of government and upon each appointment of a new RBA Governor ever since.
Australia’s approach to inflation targeting differs from that of most other countries which have inflation targets in two important respects. First, it does not stem from a government directive, nor is it enshrined in legislation. As former Governor Ian Macfarlane has said, “the government didn’t introduce it, we introduced it”.
The Reserve Bank does not have to “explain itself” to politicians if it “misses” its target for some reason. Second, the target is intentionally and explicitly flexible. It is expressed as a range, to be achieved “on average” and “over the course of the business cycle” (a term which is not anywhere defined), rather than at all times and in all places, as it were.
This means that the Reserve Bank can “tolerate” inflation being either above or below the target for a temporary period if it has good reason to believe that the deviation is only temporary, or is the result of some one-off factor whose influence will soon pass, without needing to take monetary policy actions to push it back into the target range more quickly but which would, in the RBA’s judgement, not otherwise be necessary.
This “flexible inflation targeting regime” has served Australia well over the past two-and-a-bit decades. The target is widely perceived to be “credible” – that is, it is widely recognised and understood that the Reserve Bank will do what it needs to do in order to ensure that it is achieved (as it demonstrated, for example, in 1994 and in 2007).
As a result, it has served to “anchor” inflationary expectations – that is, to give participants in the economy (businesses, consumers, union officials, governments and others) a sound basis for expecting that inflation will average somewhere between 2 and 3% over the medium-to-longer term – as it was intended to do.
And it has allowed the RBA to keep interest rates more stable than would have been the case if it had been required to chase after inflation on each and every occasion on which it temporarily departed from the target range.
With the annual “headline” rate of inflation having been below the bottom end of the 2-3% target range since the December quarter of 2014, and more recently the annual “underlying” inflation rate also having dropped below 2 percent, some have suggested that the inflation target should itself be lowered.
This would allow the central bank more room to accommodate unusually low inflation without having to cut rates to levels which might risk triggering unsustainable rates of credit growth and/or an asset price bubble.
Ironically, the opposite proposition was put during the resources boom of 2010-12, when some suggested that the RBA should increase its inflation target so as not to have to raise interest rates as much in the face of the inflationary pressures which it was feared that boom might engender.
The RBA resisted such calls on that occasion, and should do so on this. As it is formulated, the RBA’s flexible inflation target gives it latitude to determine how dogmatic it needs to be in pursuit of “low and stable” inflation.
If it were to change its target every time it appeared as though inflation might be either above or below the target range for an extended period, the target would eventually lose whatever role it has as an “anchor” for inflation expectations, increasing the chance that inflation would – as a result of the well-documented propensity of inflation expectations to become self-fulfilling – remain above or below the target for even longer, and perhaps by even wider margins.
Australia’s inflation targeting regime has served the country well, and the challenges it faces at this time are not so great as to warrant altering it.
Saul Eslake is Vice-Chancellor’s Fellow, University of Tasmania and author for The Conversation. He can be contacted <a href="https://theconversation.com/profiles/saul-eslake-665" target="_blank">here</a>.
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Why the Reserve Bank should resist calls to alter its inflation range: Saul Eslake

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Greater Bank has cut fixed home loan rates (owner occupier and investment) by up to 0.25 percent and announced a 5 year fixed home loan rate under 4 percent.
The 5 year Ultimate Home Loan will be 3.99 percent from Monday May 16.  
The rate applies to owner occupier loans worth more than $150,000 where the loan to value ratio does not exceed 85 percent. 
The comparison rate is 4.48 percent. The three and four year rates are also 3.99 percent (comparison rates 4.51 percent and 4.49 percent respectively).
Greater Bank also cut all variable home loan rates by 0.25 percent this month.
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