<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]

<h3 data-end="3697" data-section-id="q3n5ak" data-start="3672">&nbsp;</h3>
</main>

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

Interest Rates

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GUEST OBSERVER
The Reserve Bank Board decided to leave the cash rate unchanged at 2.0%. This decision was widely anticipated coming as absolutely no surprise to markets.
The key policy conclusion: “Members also observed that the outlook for inflation may afford scope for further easing of policy, should that be appropriate to lend support to demand” was unchanged from the November meeting when this mild easing bias was first adopted in the wake of the much lower than expected print for underlying inflation in the September quarter.
The key international themes were retained. However in November the language used was “some further softening in conditions in the Asian region”. This was replaced by “some softening in conditions in the Asian region”. Arguably we could interpret this as indicating that the Bank has not observed any additional deterioration over and above what was expected a month ago. Australia’s terms of trade are still described as “falling” while the Bank not surprisingly continues to expect the Federal Reserve to start increasing its policy rate over the period ahead.
Growth in the domestic economy is still described as moderate but a gradual improvement in business surveys for the non-mining sector has been evident. This has been boosting employment growth and ensuring a stabilisation of the unemployment rate. Confidence around the labour market has been slightly boosted with November discussing “somewhat stronger growth in employment” and this statement referring to “stronger growth in employment”.
In the Statement on Monetary Policy the Bank confirmed the mid-point of its underlying inflation forecast for 2016 as 2.5%. However in the December statement it does confirm the November assessment that inflation will be consistent with the target over the next one to two years but qualifies that by suggesting that it will be “a little lower than earlier expected”.
Along with the observation that business surveys in non-mining are showing a gradual improvement this statement complements confidence around business by pointing out that “credit provided by intermediaries to business picking up”.
Since the last meeting the AUD has increased from USD0.715 to USD0.725 despite a fall in the iron ore price from USD49 to USD43 and a 5% fall in the Westpac’s overall commodity price index. With those contrasting changes there was some possibility that the commentary around the Australian dollar might be a little more urgent. However, with only one month’s data to go by, the Bank has decided to retain the sentiment around the Australian dollar as “the Australian dollar is adjusting to the significant declines in commodity prices”.
Outlook
Markets are currently attributing a 25% probability to a cut of 25bps in February. Of course this pricing has been scaled back from more than 100% over the last five weeks. Westpac still expects rates to be on hold in February. Developments that would be necessary to change our minds would be around the labour market; commodity prices; GDP growth; and confidence. However, we expect that such developments would take time to trigger a policy change and even though the February meeting is two months away we don’t expect sufficient developments in that regard.
The risks for lower rates should be much more focussed on May where the market gives a more than 50% probability of a cut. Our current forecasts do not justify that decision but of course those forecasts are being constantly reviewed.
Certainly if there is to be a move over the next six months it will be down rather than up.
Bill Evans is chief economist of <a href="https://www.westpac.com.au/" target="_blank">Westpac</a>.
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February cut also looks unlikely: Westpac's Bill Evans

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The cash rate has been left at a record low of 2% for a seventh month (eight months of rates at 2%).
The Reserve Bank Board has noted the moderation in home prices in Melbourne and Sydney.
What does it all mean?
In November, the Reserve Bank re-instituted the ‘easing bias’. That is, the RBA intimated that if rates were to move in coming months it would be down, not up. The ‘easing bias’ hasn’t changed. But this is more of an insurance policy. The economy is actually performing well and momentum appears to be lifting. Of course, if the economy started to lose steam, then the RBA could cut rates again – for the key reason that inflation is actually a bit lower than the RBA had earlier expected.
<a href="/images/2015/12/1/Screen%20Shot%202015-12-01%20at%203.22.28%20PM.png" target="_blank">Click to enlarge</a>
<img src="/images/2015/12/1/Screen%20Shot%202015-12-01%20at%203.22.28%20PM.png" alt="">
The next meeting of the Reserve Bank Board is not until February 2 2016.
On the Australian dollar, the Reserve Bank continued with the same language: “The Australian dollar is adjusting to the significant declines in key commodity prices.” Seemingly, the RBA is “happy” with the current level of the currency. However some could contend that the Aussie is a little firm compared with commodity prices like gold, oil, coal and iron ore.
On the housing market, the RBA noted: “The pace of growth in dwelling prices has moderated in Melbourne and Sydney over recent months and has remained mostly subdued in other cities.” Back in October, the RBA said: “Dwelling prices continue to rise strongly in Sydney and Melbourne, though trends have been more varied in a number of other cities.” The Reserve Bank would be happy that supply and demand in the housing market has become more balanced in Australia’s biggest cities.
The good news is that Aussie consumers and businesses have almost two months of grace before being badgered again by interest rate speculation.
Perspectives on interest rates
The previous rate cut was in May 2015 (25 basis points), taking the cash rate to a record low of 2%.
There have been 10 rate cuts since November 2011.
The Reserve Bank had previously lifted rates seven times from October 2009 to November 2010 – a total of 1.75 percentage points, from 3% to 4.75%.
What are the implications of today’s decision?
CommSec doesn’t expect any change in the cash rate for the foreseeable future. Inflation is under control but the major uncertainty relates to the “pass-through” of the lower exchange rate in lifting prices of imported goods. So far, retailers have been reluctant to pass on higher prices to consumers. The economy is well supported by record building approvals which are serving to lift many boats across the country.
With interest rates poised to stay low or potentially move even lower, investors will need to remain pro-active in embracing the best deals on online bank accounts. Borrowers also need to be on guard as fixed-term rates could edge higher in coming months as the US Federal Reserve seeks to ‘normalise’ interest rates.
Craig James is the chief economist at <a href="https://www.comsec.com.au/default.aspx" target="_blank">CommSec</a>.
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No surprises from the Reserve Bank: CommSec's Craig James

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GUEST OBSERVER
The board of the Reserve Bank of Australia today decided to keep the Official Cash Rate at 2%t - there is no surprise there.
The RBA has signalled that the cash rate will remain on hold for the foreseeable future.
The Bank has also signalled that if there is to be any change in 2016 it will be a further reduction.
That is the appropriate message for now given the uncertainty around future new home construction activity in 2016/17 and beyond. 
Higher variable mortgage rates and a broader reach for investor credit rationing than required is hitting at the very time when the new residential construction cycle is at or close to a peak. That is a risk for the broader Australian economy. 
<a href="/images/2015/12/1/Screen%20Shot%202015-12-01%20at%202.56.18%20PM.png" target="_blank">Click to enlarge</a>
<img src="/images/2015/12/1/Screen%20Shot%202015-12-01%20at%202.56.18%20PM.png" alt="" width="772" height="385">
Harley Dale is chief economist, HIA and can be contacted <a href="https://hia.com.au/en/BusinessInfo/economicInfo/EcoGroup.aspx" target="_blank">here</a>.
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RBA signals cautious approach ahead in 2016: HIA

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Statement by Glenn Stevens, Governor: Monetary Policy Decision
<h3 id="mr-title">Statement by Glenn Stevens, Governor: Monetary Policy Decision</h3>
At its meeting today, the Board decided to leave the cash rate unchanged at 2.0 per cent.
The global economy is expanding at a moderate pace, with some softening in conditions in the Asian region, continuing US growth and a recovery in Europe. Key commodity prices are much lower than a year ago, reflecting increased supply, including from Australia, as well as weaker demand. Australia's terms of trade are falling.
The Federal Reserve is expected to start increasing its policy rate over the period ahead, but some other major central banks are continuing to ease monetary policy. Volatility in financial markets has abated somewhat for the moment. While credit costs for some emerging market countries remain higher than a year ago, global financial conditions overall remain very accommodative.
In Australia, the available information suggests that moderate expansion in the economy continues in the face of a large decline in capital spending in the mining sector. While GDP growth has been somewhat below longer-term averages for some time, business surveys suggest a gradual improvement in conditions in non-mining sectors over the past year. This has been accompanied by stronger growth in employment and a steady rate of unemployment.
Inflation is low and should remain so, with the economy likely to have a degree of spare capacity for some time yet. Inflation is forecast to be consistent with the target over the next one to two years.
In such circumstances, monetary policy needs to be accommodative. Low interest rates are acting to support borrowing and spending. While the recent changes to some lending rates for housing will reduce this support slightly, overall conditions are still quite accommodative. Credit growth has increased a little over recent months, with credit provided by intermediaries to businesses picking up. Growth in lending to investors in the housing market has eased. Supervisory measures are helping to contain risks that may arise from the housing market.
The pace of growth in dwelling prices has moderated in Melbourne and Sydney over recent months and has remained mostly subdued in other cities. In other asset markets, prices for commercial property have been supported by lower long-term interest rates, while equity prices have moved in parallel with developments in global markets. The Australian dollar is adjusting to the significant declines in key commodity prices.
At today's meeting the Board again judged that the prospects for an improvement in economic conditions had firmed a little over recent months and that leaving the cash rate unchanged was appropriate. Members also observed that the outlook for inflation may afford scope for further easing of policy, should that be appropriate to lend support to demand. The Board will continue to assess the outlook, and hence whether the current stance of policy will most effectively foster sustainable growth and inflation consistent with the target.
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po-LsXgBTHBmX

Unchanged: RBA Governor Glenn Stevens' December 2015 meeting statement

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GUEST OBSERVER
The big drop in the Australian unemployment rate grabbed the headline this week. Headline inflation, at 1.5% (year-on-year) below the RBA’s target band of 2-3%, remains well contained and GDP growth, at 2% annualized, soft.
The CAMA RBA Shadow Board on balance prefers to keep the cash rate on hold, attaching a 67% probability to this being the appropriate policy setting. The confidence attached to a required rate cut equals 22%, down four percentage points from the previous month, while the confidence in a required rate hike has risen slightly to 11%.
According to the Australian Bureau of Statistics, Australia’s unemployment rate fell in October from 6.2% to 5.9% though the accuracy of recent ABS numbers is questionable. Employment, both full time and part time, has expanded and the participation rate reversed its recent decline. These are all positive signs.
The Aussie dollar continues to trade around 72 US¢. Yields on Australian 10-year government bonds have risen, most recently to 2.82%.
The outlook for the Australian property market has not changed appreciably. At this stage, it appears that the property market is cooling gently, preparing for a soft landing, rather than an abrupt correction. As predicted, the S&amp;P/ASX200 continues to move sideways around the 5200 mark.
Global markets are preparing for the US Federal Reserve to raise the federal funds rate during its last FOMC meeting of the year. Given the most recent rhetoric by the Federal Reserve Bank Governor Janet Yellen, this looks more likely than ever. Recent US growth data have surprised on the upside and other US economic indicators point to a healthy economic expansion. On the other hand there remain risks to the global economy. These include geopolitical tensions, following the terrorist attacks in Paris, as well as economic risks associated with emerging countries’ excessive debt levels.
Consumer and producer sentiment measures continue to paint a motley picture. After successive drops, the Westpac/Melbourne Institute Consumer Sentiment Index rose for a second month in a row, to 102 in November, from 97.8 in October. Business confidence, according to the NAB business survey slid further, fell again, from 5 to 2. The AIG manufacturing and services indices, leading economic indicators, both fell.
The Shadow Board’s confidence that the cash rate should remain at its current level edged up from 65% in November to 67%. After last month’s noticeable shift, the confidence that a rate cut is appropriate has dropped again to 22% (26% in November); the confidence that a rate increase, to 2.25% or higher, is necessary has risen to 11% (9% in November).
The probabilities at longer horizons are as follows: 6 months out, the estimated probability that the cash rate should remain at 2% is nearly unchanged at 23% (24% in November). The estimated need for an interest rate increase has slightly increased, to 60% (58% in November), while the need for a rate decrease has slipped to 17% (19% in November). A year out, the Shadow Board members’ confidence that the cash rate should be held steady is unchanged at 18%, while the confidence in a required cash rate increase equals 67% (unchanged from November) and in a required cash rate decrease 16% (15% in November).
<a href="/images/2015/12/1/Screen%20Shot%202015-12-01%20at%209.42.19%20AM.png" target="_blank">Click to enlarge</a>
<img src="/images/2015/12/1/Screen%20Shot%202015-12-01%20at%209.42.19%20AM.png" alt="" width="747" height="443">
To see the report in full, <a href="https://cama.crawford.anu.edu.au/rba-shadow-board/outcome/2015-12" target="_blank">click here</a>.
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No need for holiday season rate cut: RBA Shadow Board

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GUEST OBSERVER
The RBA is clearly set to remain on hold next week. This was made clear in a recent speech by Governor Stevens, when, rather unusually, he gave fairly clear guidance on the near-term outlook for rates. 
When asked about whether he was ‘still content with a 2.00% cash rate’ or whether the central bank was ‘going to surprise us all again next February’, he said that, “February is three months away, we’ve got Christmas, we should just chill out… come back… and see what the data says.”
December is seemingly not even in consideration.
So if December is out: what about February?
One thing is clear: the RBA does not want to cut further. Otherwise, it would have done so already. Inflation is low and the central bank is forecasting it to stay low over coming quarters. At the same time, the RBA is forecasting growth to remain below trend until late 2016 and the unemployment rate to stay high over the next two years. The RBA is clearly patient and has set a high bar for delivering any further stimulus.
Between now and February there is also a large number of significant local and global events. Local Q3 GDP data arrive next week and are expected to be on the stronger side. Local jobs numbers come after that and will be worth watching, given the surprisingly strong October result. The Fed’s meeting in mid-December will be important, particularly its implications for the AUD: if the Fed hikes, but delivers a dovish message, the AUD may not fall as many are hoping. At the same time, commodity prices have fallen in recent weeks, as the Chinese slowdown has continued. Finally, the next local CPI print, due on 27 January 2016, will be critical.
We remain optimistic about local growth, but pessimistic about the global inflation outlook. Given low inflation, our central case has the RBA delivering another cut early next year, but there is significant uncertainty, given the large collection of events between now and then, and the RBA’s considerable reluctance about considering the prospect of further cuts.
<a href="/images/2015/11/26/Screen%20Shot%202015-11-27%20at%2011.40.51%20AM.png" target="_blank">Click to enlarge</a>
<img src="/images/2015/11/26/Screen%20Shot%202015-11-27%20at%2011.40.51%20AM.png" alt="" width="760" height="339"> 
 
 
Growth is lifting, as the rebalancing act continues
 
Timely indicators of economic conditions continue to suggest that Australia’s growth is lifting.
 
The NAB business survey, which the RBA has put significant focus on recently in its commentary, shows that business conditions are at around five-year highs (Chart 1). The NAB survey has also shown a further pick-up in capacity utilisation, although business confidence ticked down recently and remains below average. The improvement in business conditions has been led by the services sectors, as growth rebalances away from mining (Chart 2).
 
Jobs growth is also being driven by services sector employment. The recent lift in jobs growth has seen the unemployment rate tick down to 5.9%, which is its lowest level since April 2014
 
(Chart 3). Although the official labour market numbers have been subject to significant measurement issues recently, the collection of labour market indicators suggests gradual improvement in labour market conditions. Job advertisements, job vacancies, internet vacancies and the business surveys have also shown a gradual trend improvement in recent months.
 
Q3 GDP, which is due to be published next week (2 December), is expected to show a solid lift in the quarter, following the weak print in Q2 (Chart 4). A key support for growth is expected to come from net exports, with preliminary numbers showing a strong rise in exports and falling imports. Resources exports are ramping up as new capacity comes on line and coal exports rebound after weather-related disruptions in Q2. Domestic demand is expected to be modest with solid growth in household consumption and housing construction more than offsetting the effect of a sharp fall in mining investment.
<a href="/images/2015/11/26/Screen%20Shot%202015-11-27%20at%2011.43.26%20AM.png" target="_blank">Click to enlarge</a>
 <img src="/images/2015/11/26/Screen%20Shot%202015-11-27%20at%2011.43.26%20AM.png" alt="" width="776" height="389">
<a href="/images/2015/11/26/Screen%20Shot%202015-11-27%20at%2011.44.32%20AM.png" target="_blank">Click to enlarge</a>
<img src="/images/2015/11/26/Screen%20Shot%202015-11-27%20at%2011.44.32%20AM.png" alt="" width="776" height="351">
 
Inflation is low and expected to stay there for some time
Although growth is picking up, inflation is low. This partly reflects that growth has been below trend for the past three years and the unemployment rate remains at a level that is well above full employment (around 5-5.25%). This has dampened wages growth and kept domestic price pressures at bay.
This month brought the wage price index, which showed that wages growth remains at its slowest pace in at least 18 years (Chart 5). The wage price index showed growth of 2.3% y-o-y in Q3, unchanged from Q2. However, growth in the private sector wage price index fell to a new record low of 2.1% y-o-y. Real wages have been broadly flat for the past two years.
Low wages growth is contributing to low inflation, with the underlying measures of inflation having surprised on the downside in Q3. Underlying inflation was running at 2.2% y-o-y in the Q3, which is near the bottom edge of the RBA’s 2-3% target band. Our own modelling, which is based on the RBA’s own work-horse models and using similar assumptions to the central bank, show that underlying inflation is expected to skirt the bottom edge of the target band over coming quarters (Chart 6). 
Considerable reluctance to cut
With growth running below its trend pace, the unemployment rate still well above its full employment level and underlying inflation at the lower edge of the target band, the RBA has scope to cut interest rates further, if it deems that this is needed. As Governor Stevens pointed out in a recent key speech, the RBA is “more than content to lower [the cash rate] if that actually helps”. At the same time, given the recent lift in business conditions and improving labour market, the RBA appears to have considerable reluctance to cut further. Part of this reflects that monetary policy is clearly doing what it is supposed to do and the RBA clearly sees the costs of a further cut outweighing the benefits at this stage.
One of these costs is financial stability. The central bank’s recent financial stability review suggested that the RBA remains concerned about potentially over-inflating the Sydney and
Melbourne housing markets, which have both seen significant housing price growth in recent years. The RBA has also recently expressed concerns about potential over-building in the housing and commercial property markets in some cities. Notably, there are signs that the housing market is cooling, particularly in Sydney, which may reduce the RBA’s concerns about financial stability issues over time (Chart 7).
<a href="/images/2015/11/26/Screen%20Shot%202015-11-27%20at%2011.47.20%20AM.png" target="_blank">Click to enlarge</a>
<img src="/images/2015/11/26/Screen%20Shot%202015-11-27%20at%2011.47.20%20AM.png" alt="">
 
The RBA’s reluctance to cut further may also reflect timing and uncertainty. The RBA’s recent official statement emphasised a large number of risks at the current juncture.
One risk is what path the Fed might take in coming months and what that could mean for the AUD. The chances of Fed ‘lift-off’ this year have risen in recent weeks, particularly following the strong payrolls numbers for October. Although this could put some downward pressure on the AUD, much depends on the Fed’s subsequent path for rates. If the AUD falls noticeably from here, this could help to lift inflation faster, which could help the RBA hit its target. However, if the Fed’s commentary is more dovish the AUD could rise, putting further downward pressure on already low Australian inflation.
Another risk is what the slowdown in China will mean for commodity prices. The iron ore price has recently fallen to a 10-year low of around USD45 per tonne. The RBA has been content with the level of the AUD recently, partly because it had fallen in line with commodity prices and partly because there are clear signs that the lower AUD is lifting growth (Chart 8). If commodity prices were to fall further and the AUD rose, this could squeeze local income and become a concern for the RBA.
Importantly, we also get a swathe of local data for Australia before February. Next week we get Q3 GDP, which we expect to show solid growth (0.8% q-o-q and 2.5% y-o-y). The following week we get official labour market numbers for November, which will be of particular interest, given the strong result in October. Another critical piece of information ahead of the February RBA meeting will be Q4 CPI print, which is due on 27 January 2016. A low CPI print could encourage the RBA to cut further, although the central bank’s own forecasts already anticipate underlying inflation of 2.0% y-o-y, so it would take a weak result to surprise the RBA to the downside.
 
<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 chilling out for Christmas: HSBC's Paul Bloxham

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When it comes to the question of who pays the mortgage interest, the answer is that New South Wales and Victoria do: well over half of the national interest payable in fact.
<a href="/images/2015/11/25/Interest%20Payable.jpg" target="_blank">Click to enlarge</a>
 <img src="/images/2015/11/25/Interest%20Payable.jpg" alt="">
<div>While this might seem surprising, in fact the share of interest paid by the largest two states has declined over the past two decades.</div>
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<div>The reason for this has been the expansion of both the population and mortgage sizes in Queensland (its share of the mortgage interest pie increasing from 15%to 19%) and Western Australia (its share increasing from 9 to 13%).</div>
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<div>The changes elsewhere have been negligible when viewed from the national level.</div>
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<div>Despite the Australian population having increased by well over 1 million persons (or about 4.7%) over the past three years, total interest payable has declined by nearly 22% thanks to the slashing of interest rates.</div>
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PETE WARGENT is the co-founder of <a href="https://allenwargent.com/" target="_blank" rel="nofollow">AllenWargent</a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank" rel="nofollow">blogger</a>. 
His latest book is <a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx" target="_blank" rel="nofollow">Four Green Houses and a Red Hotel</a>.
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Who pays the interest? Pete Wargent

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Thirteen lenders are predicted to increase variable rates for both owner occupiers and investors.
Analysis by RateCity, titled "Rate Hike Friday" predicts mortgage holders will be hit by an average of 0.17 percentage points or $372 per year on a $300,000 home loan.
<a href="/images/2015/11/20/Screen%20Shot%202015-11-20%20at%2010.34.20%20AM.png" target="_blank">Click to enlarge</a>
<img src="/images/2015/11/20/Screen%20Shot%202015-11-20%20at%2010.34.20%20AM.png" alt="">
RateCity money editor Sally Tindall said just one bank, CUA, is dropping its basic variable rate for existing customers as well as new ones - a strike rate of 1%.
“We’ve identified least 24 lenders who have dropped their variable home loan rates in recent months – but there’s a catch – the overwhelming majority of these lenders will only give you the new deal if you’re a new customer,” she said.
“Loyalty has well and truly left the home loan market. If you want one of the lowest rates, the chances are you’ll have to switch."
<a href="/images/2015/11/20/Screen%20Shot%202015-11-20%20at%2010.33.56%20AM.png" target="_blank">Click to enlarge</a>
<img src="/images/2015/11/20/Screen%20Shot%202015-11-20%20at%2010.33.56%20AM.png" alt="" width="837" height="407">
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Thirteen lenders predicted to increase variable rates

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GUEST OBSERVER
A cash rate rise is coming to the Australian property market – experts are confident of that much.
When that rise will come, however, is a little unclear – 30% of respondents in the finder.com.au Reserve Bank Survey predict a rate move before the year is out, while more than half don’t expect any upward movements until at least 2017. In the meantime, we’re seeing out of cycle rate hikes hit the market, just weeks out from Christmas.
If you’ve been considering a home loan but haven’t yet made the plunge, now may be time to make the transition without worrying about further hikes.
Here are the lowest variable and 3-year fixed home loans on finder.com.au with no ongoing fees.
finder.com.au’s lowest variable rate home loans with no ongoing fees
1.     Mortgage House Summer Home Loan: 3.79%
This low rate is available for a 12 month period, at which point the rate will revert to 3.99%. It allows for a 100% offset account, the benefit of no application fees and additional repayment and redraw features. Provided you’ve braced for the $200 settlement, $450 discharge and $395 legal fees.
2.     Reduce Home Loans Rate Buster Fee Free: 3.85%
If you’re the type of person who can save a 30% deposit and still have a little left over to foot the $440 application and $130 settlement fees, this loan is a worthy contender among your options. The 100% offset account, repayment and redraw facilities as well as splitting options all give you the tools to create a formidable financial product. 
3.     loans.com.au Essentials Home Loan: 3.98%
While you won’t be accessing a 100% offset account  with this loan, you can put ongoing, legal and application fees worries to rest. This is particularly powerful when paired with the ability to make unlimited additional repayments, slicing interest off your mortgage. Just have your 20% deposit saved up, as you’ll only be able to borrow up to 80% of the total property value.
 
finder.com.au’s lowest 3-year fixed home loans with no ongoing fees
1.     Newcastle Permanent Fixed Rate Home Loan: 3.89%
This loan is not only a super low rate but it’s fee-friendly – there’s no application, legal, valuation or settlement fees. You can also make additional payments to this loan but beware, as you will not be able to access this money once you do decide to make those deposits.
 2.     CUA Fixed Rate Home Loan: 4.09%
This low rate comes with a high application fee, but don’t be disheartened by the $600 application tag – this loan has some great cushions to soften the blow. With no valuation fees, the ability to make additional repayments (capped at three repayments for the fixed period) and the ability to switch into interest only options, this flexible number can get your house on its feet sooner, provided you manage it well.
3.     Australian Unity Health, Wealth and Happiness Fixed Rate Package: 4.15%
If you can swallow a $600 settlement fee, don’t need to borrow more than 90% and are okay with no 100% offset account, this home loan is a serious heavyweight in the fixed space. With no application, legal or valuation fees and the ability to redraw your extra deposits, there is still quite a bit of breathing space in this low rate loan.
 
MICHELLE HUTCHISON is spokesperson for comparison website <a href="https://finder.com.au/" target="_blank">finder.com.au</a>.
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Six essential home loans: finder.com.au's Michelle Hutchison 

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GUEST OBSERVER 
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The minutes from the RBA’s November Board meeting, at which it left the cash rate at 2%, do not reveal substantial additional detail on the Bank’s outlook. 
The meeting predated the release of the strong October labour force numbers, which showed the unemployment rate falling nearly 0.3ppts to 5.9%, the lowest reading since April 2014. These numbers are broadly in line with the RBA’s relatively upbeat observations about labour market developments and help explain (post-script) why the Board chose not to implement a November rate cut, despite markets pricing a 50% probability just prior to the meeting. The Bank noted in the statement after the meeting and in the minutes that “prospects for an improvement in economic conditions had firmed a little over recent months”. 
But the Bank also noted that spare capacity in the economy would persist for some time and remains quite uncertain about its consumption forecasts, noting “households' decisions about consumption and saving continued to represent an important source of uncertainty for the forecasts”. The Bank is expecting above-average consumption growth at some point, but we do not share that view. At 55% of the economy, this is a large proportion of expenditure and so any uncertainty could be influential to the Bank’s thinking. 
In isolation, the labour force report makes our expectation of a February rate cut more difficult to achieve. But of course the data cannot be read in isolation and the notoriously volatile labour force figures could paint quite a different picture over the next two months. Also, there is a possibility of further rises in lending rates from the banks to offset the regulatory changes that have raised minimum capital requirements. This would force an unwelcome – although probably small – tightening of financial conditions. The RBA’s November Statement on Monetary Policy (SoMP) (released after the Board meeting, but before the strong labour force report) also showed that the RBA lowered its growth and inflation forecasts, and these changes also support our view that the outlook is precarious and lower rates will be necessary in 2016. 
Consistent with the post-meeting statement, the minutes said the “inflation outlook may afford some scope for further easing of monetary policy”. While acknowledging that inflation was lower than earlier expected, “inflation was forecast to be consistent with the target over the next one to two years”. The RBA said that while tight competition was limiting the higher price of imports being passed on to final consumer prices, some increase in tradable prices is expected in coming years. 
The Bank noted that although there would be further growth in dwelling investment, the pace of house price growth in Sydney and Melbourne “had moderated” and “supervisory measures were helping to contain risks”. On the international front, the slowing in growth in Asia “was likely to be more persistent than expected” and “Australia's trading partners was expected to be slightly below its decade average over the period ahead”. These comments are consistent with the SoMP. 
Bottom line, we think the RBA will be looking for a clearer picture before making any decisions. We see a very low likelihood of a move at the next RBA Board meeting on 1 December. This is especially the case with the crucial US central bank policy meeting on 16-17 December, two Australian labour force reports due before February, and the December quarter CPI due on 27 January. 
We maintain our view that the RBA will cut rates in the first half of next year. With the stimulus from housing and the lower AUD likely to fade next year, and the inflation outlook providing no impediment to lower rates, we think the cash rate will be cut twice by 25bps, most likely in February and May. 
Cherelle Murphy is co-head of Australian Economics, ANZ Research and can be contacted <a href="https://bluenotes.anz.com/authors/our-economists/" target="_blank">here</a>.
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