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

Joel Robinson

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

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

Sammut secures approval for debut Brisbane apartment development in Toowong

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

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

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

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

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

WM Residences fills gap in Mordialloc townhouse market

Interest Rates

<html><body>
The graphs summarise macroeconomic and financial market trends in Australia as viewed by the Reserve Bank of Australia.
The charts cover Household Saving Ratio, Private Residential Building Approvals (below), Household Finances, Household Wealth and Liabilities, Housing Prices and Housing Loan Approvals. <a href="https://www.rba.gov.au/chart-pack/household-sector" target="_blank">Click here</a> to view them all.
<a href="/images/2015/11/5/Screen%20Shot%202015-11-06%20at%2012.27.59%20PM.png" target="_blank">Click to enlarge</a>
<img src="/images/2015/11/5/Screen%20Shot%202015-11-06%20at%2012.27.59%20PM.png" alt="">
</body></html>

jchancellor-FAypfDUnLy

Six charts that shape RBA rate thinking: November chart pack

<html><body><div class="page" title="Page 1">
<div class="section">
<div class="layoutArea">
<div class="column">
GUEST OBSERVER
The Reserve Bank has not materially changed economic growth forecasts but trimmed short- term inflation forecasts. 
Economic growth is seen at 2.0-3.0% in June 2016, unchanged from the previous forecast. But underlying inflation is now seen between 1.5-2.5% in June 2016, down from the earlier forecast of 2-3%. 
<a href="/images/2015/11/5/Screen%20Shot%202015-11-06%20at%2012.02.29%20PM.png" target="_blank">Click to enlarge</a>
<img src="/images/2015/11/5/Screen%20Shot%202015-11-06%20at%2012.02.29%20PM.png" alt="" width="654" height="253">
<div class="page" title="Page 1">
<div class="section">
<div class="layoutArea">
<div class="column">
What does it all mean? 
The Reserve Bank intimated on Tuesday that the economic outlook was improving while at the same time noting inflation was lower than expected. Clearly that gives the Reserve Bank scope to cut rates, if it was needed. But the Reserve Bank is not giving any indication that it intends to act on that ‘easing bias’ any time soon.
</div>
<div class="column">
 The Statement on Monetary largely fleshes out points noted in the monetary policy decision on Tuesday and Reserve Bank Governor’s speech on Thursday.
</div>
<div class="column">
 No doubt the Reserve Bank would like growth a little stronger than current levels, that way the jobless rate could come down. Still, moderate growth with low inflation and stable unemployment isn’t a bad combination either.
</div>
<div class="column">
 CommSec expects rates to stay low for the foreseeable future. 
</div>
<div class="column"> </div>
<div class="column">The RBA expects annual economic growth around 2.25% and underlying inflation around 2.00% over the next few months. </div>
<div class="column"> </div>
<div class="column">
<div class="page" title="Page 2">
<div class="layoutArea">
<div class="column">
Economic outlook: “Overall, the forecasts for GDP are little changed from the August Statement. GDP growth has been revised down slightly towards the end of the forecast period to reflect updated forecasts for resource exports, which are still expected to make a substantial contribution to growth.” 
“The forecast for growth in economic activity over the next two years is not materially different from what was presented in the previous Statement. GDP growth is expected to be between 2 and 3% over the year to June 2016, rising to 23⁄4–33⁄4% over the year to June 2017, which is around its long-run average.”
“While quarterly inflation outcomes can be volatile, the broad-based nature of the weakness in the September quarter suggests that inflationary pressures are a bit more subdued than earlier anticipated. As a result, the inflation forecasts are lower in the near term. Underlying inflation is now expected to be around 2 per cent over most of next year before picking up to be around 21⁄2 per cent. Inflation expectations remain a little below average..”
“Domestic inflation pressures are likely to remain well contained and the depreciation of the exchange rate is expected to place gradual upward pressure on tradable prices.”
 What is the importance of the economic data? The Reserve Bank releases its Statement on Monetary Policy each quarter. The Statement is the Reserve Bank’s assessment of economic and financial conditions and also contains the latest inflation views. The Statement is crucial is assessing the short-term outlook for interest rates.
What are the implications for interest rates and investors?
If interest rates are going to stay low or move lower, investors need to shop around for the best returns on their investments. There are some solid dividend yields on offer such as: ANZ 6.8 per cent, NAB 6.9 per cent, Westpac 6 per cent, CBA 5.5 per cent, Telstra 5.7 per cent, BHP Billiton 7.2 per cent, Woodside Petroleum 9 per cent. In terms of the high yielding resource company dividends the question relates to the sustainability of recent dividends.
</div>
<div class="column">
 In terms of online savings accounts, returns of up to 3.5 per cent can be achieved for periods up to four months (cash rate 2 per cent)
</div>
<div class="column">
 CommSec expects no change in the cash rate over the next year. 
</div>
<div class="column"> </div>
<div class="column"><a href="/images/2015/11/5/Screen%20Shot%202015-11-06%20at%2012.07.29%20PM.png" target="_blank">Click to enlarge</a></div>
<div class="column"><img src="/images/2015/11/5/Screen%20Shot%202015-11-06%20at%2012.07.29%20PM.png" alt="" width="838" height="541"></div>
<div class="column"> </div>
<div class="column">Craig James is the chief economist at <a href="https://www.comsec.com.au/default.aspx" target="_blank">CommSec</a>.</div>
</div>
</div>
</div>
</div>
</div>
</div>
</div>
</div>
</div>
</div></body></html>

cjames-5S2v74qSNK

Reserve Bank tips moderate growth, lower inflation: Craig James

<html><body><div class="page" title="Page 1">
<div class="section">
<div class="layoutArea">
<div class="column">
GUEST OBSERVER
In case there was some lingering uncertainty, the Reserve Bank Governor had made it clear that if rates were to move anywhere in the next six months it would be down, not up.
The Reserve Bank Governor has gone to some length to explain the thinking about recent increases in bank home loan rates and the impact on monetary policy. And the conclusion was that the higher bank loan rates won’t have a big impact on the broader economy, and thus not requiring a response from the Reserve Bank in terms of cutting interest rates.
The speech by the Reserve Bank Governor was entitled the “Path to Prosperity”. And there were key messages. There needs to be improvements in infrastructure. And on this point the Governor said “there are some encouraging developments.” Glenn Stevens also stressed the importance of productivity enhancements: “with the terms of trade-driven improvements now behind us – and at least partly reversing – productivity is the main game.” Stevens also noted the importance of budget repair: “The need for medium-term budget repair also remains.”
Car sales continue to soar to record levels, with SUVs the major catalyst. Record vehicle sales combined with yesterday’s data showing above-average growth of retail spending, confirms the Reserve Bank upbeat view on the economy. The Reserve Bank certainly has no need to act on the easing bias by cutting interest rates.
What do the figures show?
Reserve Bank Governor Speech
Reserve Bank Governor Glenn Stevens delivered a speech “The Path to Prosperity”
On interest rates: “were a change to monetary policy to be required in the near term, it would almost certainly be an easing, not a tightening.”
On higher mortgage rates announced by banks: “my preliminary assessment is that the macroeconomic effect of these actions in themselves may not be large. It is one part of a much bigger and evolving landscape. Nonetheless, the Reserve Bank Board will keep this matter, and that broader landscape, under careful review.” 
</div>
<div class="column"> </div>
<div class="column"><a href="/images/2015/11/5/Screen%20Shot%202015-11-05%20at%201.00.04%20PM.png" target="_blank">Click to enlarge</a></div>
<div class="column"><img src="/images/2015/11/5/Screen%20Shot%202015-11-05%20at%201.00.04%20PM.png" alt=""></div>
<div class="column"> </div>
<div class="column">Impact of higher mortgage rates on sentiment: “Could the ‘shock’ value of the rises in mortgage rates itself lead to a significant change in that trend, gentle as it is, of improvement? While such an outcome is perhaps conceivable, given the starting point and all the above considerations, it seems to me a bit of a leap to draw that conclusion.”</div>
<div class="column">
<div class="page" title="Page 2">
<div class="layoutArea">
<div class="column">
Quantifying impact of bank home rate changes: “Measuring across the total loan book, the recent actions are the equivalent of roughly half of one 25 basis point monetary policy change. They take back perhaps a quarter of the extent of interest rate easing seen since the start of this year, and a smaller proportion of the total easing in lending costs seen over the past two years.”
Reserve Bank distances itself from bank rate hikes: “Let me be clear that in making these comments I am not offering an endorsement of the banks' actions. Nor should an assumption that shareholder returns must not decline as a result of the effects of supervisory measures, or any other factor, simply be accepted without question. The ‘right’ rate of return for bank shareholders is, as others have observed, an open question. It is not a constant of the universe.”
On the Federal Budget: “The need for medium-term budget repair also remains. Here also progress has been made, and the budget deficit at present still compares favourably with what we see in many other countries. But my sense is that a fair bit of the necessary national conversation about how we pay for all the things we have voted for lies ahead. This doesn't imply a need for radical immediate action, but I suspect it does mean an unusually long period of tight budget discipline on recurrent spending is likely to be required.”
New vehicle sales
According to the Federal Chamber of Automotive Industries (FCAI), Australian new motor vehicle sales totalled 94,321 in October, up 3.4% over the year. In the year to October 2015 a record 1,146,194 new vehicles were sold.
Passenger vehicles in October were down 5.3% on a year earlier with heavy commercial vehicles down by 8.3% and light commercial vehicles were down by 1.9%. Sales of sports utility vehicles (SUVs) were up by 20.5% (small SUVs up 37%).
In the year to October, SUVs represented 43.5% of combined passenger car and SUV sales. SUVs accounted for a record 34.8% of all vehicle sales in the year to October.
What is the importance of the economic 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. 
What are the implications for interest rates and investors?
The Reserve Bank has made it clear that monetary policy has an “easing bias” meaning that if rates were to change, it would be down. But with the Reserve Bank seemingly more positive on economic prospects, there are no signs that the Reserve Bank will draw on the insurance policy to actually lower rates. 
CommSec expects the Reserve Bank to remain on the interest rate sidelines over the coming year.
The continued strength of new car sales highlights the underlying strength of consumer spending. It is not out of the question that more SUVs will be sold in coming years than passenger cars.
 
</div>
<div class="column"> </div>
<div class="column"><a href="/images/2015/11/5/Screen%20Shot%202015-11-05%20at%201.08.28%20PM.png" target="_blank">Click to enlarge</a></div>
<div class="column"><img src="/images/2015/11/5/Screen%20Shot%202015-11-05%20at%201.08.28%20PM.png" alt="" width="736" height="252"></div>
<div class="column"> </div>
<div class="column">Craig James is the chief economist at <a href="https://www.comsec.com.au/default.aspx" target="_blank">CommSec</a>.</div>
</div>
</div>
</div>
</div>
</div>
</div></body></html>

Reserve Bank gives view on rates: Craig James

<html><body><div style="text-align: left;" align="center">
Fifteen lenders have announced rate increases to owner-occupied variable home loans according to comparison website finder.com.au, with the biggest increase being 0.20% by Westpac, Macquarie Bank, Citibank and ME Bank.
The Bank of Queensland and CUA are the latest to announce home loan increases, according to finder.com.au consumer advocate Bessie Hassan.
<a href="/images/2015/11/5/Screen%20Shot%202015-11-05%20at%2010.16.22%20AM.png" target="_blank">Click to enlarge</a>
<img src="/images/2015/11/5/Screen%20Shot%202015-11-05%20at%2010.16.22%20AM.png" alt="">
She said 15 lenders monitored by finder.com.au have so far announced variable rate owner-occupier home loan increases of up to 0.20 percentage points, with one lender’s move already reportedly effective (Citibank).
“So far, the biggest increase was 0.20 percentage points by four lenders: Westpac, Macquarie Bank, Citibank and ME Bank, while the average rise was 0.17 percentage points. This will add an extra $33 per month to a $300,000 mortgage, as well as putting more pressure on many households who are preparing for the most expensive time of year at Christmas.," she said.
“Bank of Queensland and CUA were the latest lenders to announce variable rate increases to its owner-occupied home loans yesterday (November 4, 2015), with their standard variable home loan rates set to rise by 0.18 and 0.13 percentage points respectively. CUA also announced a 0.14 percentage point drop to one of its home loan products while raising eight others.
“It’s clear that the Reserve Bank is having less of an impact on interest rate movements so there’s no point for borrowers to wait for a cash rate cut and expect lenders to follow. However, the silver lining is that there are hundreds of home loans out there and many smaller lenders are offering very competitive deals. For instance, the cheapest variable rate home loan is 3.79% by Mortgage House (12-month discounted rate). Now is the time to compare home loans, ask your lender for a discount or switch to a better deal before the rate hikes take effect.”
<a href="/images/2015/11/5/Screen%20Shot%202015-11-05%20at%2010.16.40%20AM.png" target="_blank">Click to enlarge</a>
<img src="/images/2015/11/5/Screen%20Shot%202015-11-05%20at%2010.16.40%20AM.png" alt="">
</div></body></html>

mick.cee-iDmgDDAmu8

Fifteen lenders announce owner-occupied variable rate increases

<html><body>
Heritage Bank has today cut its discount variable home loan rate to 3.98%.
The special discount variable rate is available for owner-occupier loans of more than $150,000, with a maximum LVR of 90%.
Heritage has also cut the rates on its Home Advantage Variable package product, which bundles together a home loan, credit card and transaction account.
The Home Advantage Variable rate for a loan of $700,000 or more is 3.98%; for a loan from $250,000 to $700,000 it is 4.03% and for a loan of $150,000 to $250,000 it is 4.13%.
The new rates are effective from Thursday, 5 November.  
</body></html>

jonathanchancellor-7SQnKwU6yx

Heritage Bank cuts discount variable home loan rate to 3.98%

<html><body>
GUEST OBSERVER
The Reserve Bank of Australia has decided to leave the official cash rate unchanged at a record low of 2%, but said there was scope for a rate cut down the line.
In a statement on the RBA website, governor Glenn Stevens said:
"At today’s meeting the Board 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 at this meeting. 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 US Federal Reserve is expected to start increasing its policy rate in the period ahead, the statement said.
Recent attention has focused on the widening gap between the official cash rate and the mortgage rates set by the major lenders.
All of the big four banks have raised their variable home loan rates, after the introduction of tougher new capital requirements designed to act as a buffer in case of financial crisis. The new prudential regulations followed the Murray report into the financial system.
Australia’s estimated seasonally adjusted unemployment rate for September 2015 sits at 6.2%. The RBA said today that there had been “stronger growth in employment and a steady rate of unemployment.”
The RBA said inflation is low and should remain so, forecasting it to be “consistent with the target over the next one to two years, but a little lower than earlier expected.”
We asked experts to respond to the RBA decision.
Timo Henckel, Research Associate, Centre for Applied Macroeconomic Analysis, Australian National University:
This is the right decision. There are signs of weakness in the economy and financial conditions have changed, with the four big banks raising their home loan rates and global financial markets remaining nervous, but there’s not enough there to lower rates further. They are already very low by historical standards.
Inflation is low, that’s true – but a number of the CAMA Shadow Board members are still concerned about easy money and the danger of fuelling asset prices bubbles. I think several Shadow board members would not be unhappy about the banks recently increasing the mortgage rate.
Moreover, this year has witnessed a dramatic fall in energy prices, which would have exerted downward pressure on prices, albeit only temporarily. At this stage it is not clear to what extent lower inflation is supply-side or demand-side driven.
Monetary policy has been expansionary for a long time and this is helping to rebalance the Australian economy, away from the resource sector to manufacturing and the service sector. Whatever slack is left in the system is probably best left to other policy measures, like fiscal and micro-economic policy.
Today’s decision will probably not affect the gap between the official cash rate and the big four rates. When the banks lifted their mortgage rates, they presumably did not do this in anticipation of the RBA changing policy. It would have been interesting had the RBA dropped rates – would the banks have reversed their recent rate increase? Probably not. I cannot judge whether the additional regulatory measures imposed on the banks exactly justify the increase in their home loan rates. No doubt these measures were also a welcome excuse for the banks to squeeze a little but of extra profit margin for their shareholders.
Recent events have confirmed that the RBA is not the only institution assigned with macroprudential objectives. There’s been a vigorous debate, both in policy and academic circles, about whether central banks should be concerned with asset price inflation and excessive credit growth and whether they should use interest rates to prevent asset price price bubbles from becoming too large. It is reassuring to see the Australian Prudential Regulation Authority taking its role seriously and assuming responsibility.
Guay Lim, Professorial Fellow, University of Melbourne
I support and agree with the no-change, wait-and-see decision. I have concerns that further cuts will fuel asset prices with little effect on real spending.
In coming weeks, we will probably better understand what’s happening with fiscal policy and what’s happening with the US rate.
Richard Holden, Professor of Economics, UNSW Australia
The RBA’s announcement following their decision to keep the cash rate on hold at 2% had a fair bit of hedging language including:
"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."
So, basically, the RBA will cut rates down the track if it decides to cut rates down the track. Got it!
The big four banks are unlikely to further change mortgage rates in response, having already hiked recently in response to heightened capital requirements, but a cut in the months ahead by the RBA still looks like a definite possibility.
 
Timo Henckel is research associate, Centre for Applied Macroeconomic Analysis, Australian National University and can be contacted <a href="https://theconversation.com/profiles/timo-henckel-990" target="_blank">here</a>.
Guay Lim is professorial fellow, University of Melbourne and can be contacted <a href="https://theconversation.com/profiles/guay-lim-103128" target="_blank">here</a>.
Richard Holden is professor of economics, UNSW Australia and can be contacted <a href="https://theconversation.com/profiles/richard-holden-118107" target="_blank">here</a>. All are authors for The Conversation.
</body></html>

RBA leaves cash rate unchanged at record low 2%

<html><body><div class="page" title="Page 1">
<div class="section">
<div class="layoutArea">
<div class="column">
Despite some growing conjecture around an imminent rate cut, the board of the Reserve Bank of Australia today decided to keep the official cash rate at 2.00%.
There was some risk that the RBA cut the cash rate today, but financial institutions may then have failed to pass the full cut on to mortgage and business borrowers. 
That would have been perceived as a double hit by mortgage holders who have just experienced a hike in their discounted variable mortgage rate.
It is dangerous timing for the economy to be undergoing a wide-sweeping rationing of credit to investors followed up by an increase in variable mortgage rates. This combined action hits the housing market more heavily than any other industry, yet new home construction has been the key direct and indirect driver of domestic economic activity in recent years. 
Any further interest rate reduction by the RBA – which seems less likely post their November decision – would need to be timed and communicated to ensure it mitigated rather than exacerbated the adverse impact of a tighter financing environment. 
<a href="/images/2015/11/Screen%20Shot%202015-11-03%20at%205.01.55%20PM.png" target="_blank">Click to enlarge</a>
<img src="/images/2015/11/Screen%20Shot%202015-11-03%20at%205.01.55%20PM.png" alt="" width="721" height="376">
 
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>.
</div>
</div>
</div>
</div></body></html>

RBA treads most likely path in November: HIA's Harley Dale

<html><body>
GUEST OBSERVER
The Reserve Bank Board decided to leave the cash rate unchanged at 2%.
Following the print of the September quarter Consumer Price Index markets priced a probability of a rate cut at around 70%. With the clearer guidance from the US Federal Reserve that a Fed rate hike in December was a realistic prospect markets revised down that probability to around 50%.
In the last 24 hours that market probability drifted a little further down to around 40%.
It has always been our view that policy would be unchanged at this meeting. That was because the low inflation print allowed the Bank scope to cut if it so desired but that decision would be predicated on a substantial downward revision in the outlook for economic growth.
We could not see how that downward revision could be justified and therefore were prepared to look through the low CPI. In the event the Bank confirmed its somewhat more confident view around the growth outlook citing “business surveys suggest a gradual improvement in conditions over the past year” and “somewhat stronger growth in employment”; “prospects for an improvement in economic conditions had firmed a little over recent months”.
There was some risk that the very low (0.3%) quarterly print for the CPI in the December quarter may have led the Bank to question the prospect that inflation would remain within the target band of 2-3%. However in the Governor’s statement he confirms his view that inflation will remain within the target over the next one to two years, albeit a little lower than earlier expected.
This theme around inflation is confirmed in the all-important final paragraph where the Bank adopts an explicit, although moderate, easing bias. This bias is expressed with the words “the inflation outlook MAY afford scope for further easing of policy, should that be appropriate to lend support to demand”. This is a weaker easing bias than the terms that had been used around inflation in the past, e.g. “were demand conditions to weaken materially the inflation outlook WOULD provide scope for easier monetary policy” (April 2012). Further evidence that this is a softer bias comes with the first sentence in the closing paragraph where the Governor assesses that “prospects for an improvement in economic conditions had firmed a little over recent months”.
Commentary around housing and credit was also consistent with the “unchanged” decision. Overall conditions in the housing market are still described as “accommodative” and credit growth has increased a little in recent months. Dwelling prices in Melbourne and Sydney and reported to be continuing to rise albeit at a more moderate pace.
There is no change in the assessment of the prospects that the Fed will start increasing its policy rate – just being described as “in the period ahead” and global financial conditions continue to be “very accommodative”.
In previous statements the Governor has singled out weakening prospects in China but China does not rate a mention in this statement although recent falls in our terms of trade are noted.
There is no change in the commentary around the Australian dollar: “the Australian dollar is adjusting to significant declines in key commodity prices”.
Outlook
Over the last week or so market pricing for a full 25bp reduction in the cash rate by December reached almost 100%. Despite the Bank adopting an easing bias we do not consider it likely that the cash rate will be reduced at the December Board meeting. The data flow over the next few weeks will be concentrated on economic activity rather than any further news on inflation. It seems unlikely that, given the Bank’s somewhat more constructive view on the growth outlook such data would trigger a rate cut by December. Of most interest will be the impact on confidence from the increase in mortgage rates by the banks and that will be known with the release of the Westpac Consumer Sentiment survey on November 11.
Other important data events will be the employment report; the quarterly wage price index; housing-related activity and prices; and the capital expenditure survey. The all-important GDP report for the September quarter will not be available until after the December meeting. Furthermore, the December Board meeting will be held only two weeks before the next meeting of the Federal Reserve where a Fed rate hike can be realistically expected.
Markets continue to price 100% probability of a rate cut by February. That is a much more realistic assessment given more time will be available to assess growth momentum and most importantly the December quarter inflation report. It is our view and, apparently, the view of the RBA that the next report will see core inflation move back to the normal “trend” number of around 0.6%. In that event our assessment of the likely growth momentum in the economy will point to rates remaining on hold in February and thereafter.
Any change in that view will be largely driven by an assessment that growth prospects in the economy are likely to lose significant momentum through 2016. 
Bill Evans is chief economist of <a href="https://www.westpac.com.au/" target="_blank">Westpac</a>.
</body></html>

bevans-rYk9SxEa4r

December RBA rate cut seems unlikely: Westpac's Bill Evans

<html><body><div class="page" title="Page 1">
<div class="layoutArea">
<div class="column">
GUEST OBSERVER
After one of the most anticipated Board meetings for months, the RBA today left rates unchanged, but changed their forward guidance to open up the possibility of a near-term rate cut.
Specifically, the Bank included the comment “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 fact that the Bank included this statement despite noting that “prospects for an improvement in economic conditions had firmed a little over recent months” highlights to us the importance of the 2-3% target band for inflation for the Bank.
Overall there were quite a few changes in the statement compared with the October one:
Concerns over financial market volatility have eased with the comment that “volatility in financial markets has abated somewhat”, although the Bank noted that “credit costs for some emerging market countries remain higher than a year ago”.
</div>
<div class="column">
 The statement acknowledged the recent low inflation print, but repeated that “inflation is forecast to be consistent with the target over the next one to two years”. The recent out of cycle mortgage rate increases were alluded to, but the RBA noted that “overall [lending] conditions are still quite accommodative”. Importantly, the Bank seems more comfortable with Sydney and Melbourne house price developments, noting the recent moderation in growth.
Overall, today’s statement highlights the importance of inflation to the Bank. That is, despite the prospect of some improvement in activity the Bank seems prepared to ease monetary policy on the back of a lower inflation outlook. This then suggests that a move in December is unlikely. The RBA seems more likely to wait until February when it will have another inflation number which will likely confirm the lower than previously anticipated inflation trajectory. Then the Bank is likely to deliver the first of at least two cuts next year in our view.
While today’s statement suggested a better outlook for activity, we are not so sure. Our own view is that next year growth is likely to remain challenged as the boost from housing starts to fade, and the support to trade from the lower AUD lessens. While the upward trend in consumer confidence coming on the back of Malcolm Turnbull’s appointment as Prime Minister is encouraging, it’s difficult to see that it will be translated into sustained strength in spending in the medium-term given the prospect of ongoing soft wages growth amid high levels of household debt. 
And any rise in the unemployment rate from its current elevated rate would be unpalatable for the RBA. So some further stimulus will be necessary, even if the impact is primary felt via a lower currency.
The easing in housing market activity in Sydney and Melbourne is also an important prerequisite for rate cuts. And today’s comments on housing suggests this key hurdle for further rate cuts is likely to be removed by early next year.
From here on it seems that a rate cut in February is most likely, and the data (both activity and inflation) will have to be sufficiently stronger to persuade the Bank otherwise. 
Felicity Emmett co-head of Australian economics, ANZ Research and can be contacted <a href="https://www.propertyobserver.com.au/https://au.linkedin.com/pub/felicity-emmett/5a/3ba/256" target="_blank">here</a>.
</div>
</div>
</div></body></html>

Not today, but February for RBA rate cut: ANZ's Felicity Emmett

<html><body><div class="page" title="Page 1">
<div class="section">
<div class="layoutArea">
<div class="column">
The cash rate has been left at a record low of 2.00% for a sixth month (seven months of rates at 2%).
The Reserve Bank Board has re-instituted the easing bias – meaning that if rates are going to change, it is more likely to be a rate cut.
What does it all mean?
When appearing before the House of Representatives Economics Committee on September 18, the Reserve Bank Governor made the following remarks on official interest rates: "I think we are pretty content where we are right now.” The Governor did note however: “But the question has more been, for us: do we hold or should we go down a little bit more?” Well, the Reserve Bank Board has had another long, hard look at monetary settings and concluded that current rate settings still remain appropriate. But the easing bias is back. Just as the Governor said in September, the question is whether rates need to fall further.
</div>
<div class="column">
 It is important to stress that the ‘easing bias’ is more of an insurance policy rather a definite indication that rates are going to fall in future. The Reserve Bank has actually upgraded its view on the economic outlook: “the Board judged that the prospects for an improvement in economic conditions had firmed a little over recent months”.
</div>
<div class="column">
 The ‘easing bias’ is driven more by the fact that inflation is well contained: “the outlook for inflation may afford scope for further easing of policy, should that be appropriate to lend support to demand”. In short, it is a very smart decision.
</div>
<div class="column">
 Over the last month the main developments were the decisions by major banks to lift mortgage rates to cover the cost of higher capital requirements. Most of these increases will be effective later in November. In terms of economic data, inflation printed at the low end of market expectations. But there is still the prospect of retailers passing through to consumers the higher cost of imported goods.
</div>
<div class="column">
 Overseas, the US Federal Reserve left interest rates unchanged but hinted at a rate hike in September. But China cut interest rates and the European Central Bank confirmed that it would do all that it required to lift economic growth in the region and eliminate deflationary risks. In Australia, economic data has been generally positive – as highlighted in the Reserve Bank’s upgrade to the economic outlook. Consumer and business confidence levels have lifted; building approvals and car sales both lifted to record highs on an annual basis; consumer spending and job ads both rose in the latest month.
Perspectives on interest rates
The previous rate cut was in May 2015 (25 basis points), taking the cash rate to a record low of 2.00%. There have been 10 rate cuts since November 2011.
</div>
<div class="column">
The Reserve Bank had previously lifted rates seven times from October 2009 to November 2010 – a total of 1.75 percentage points, from 3.00% to 4.75%. 
</div>
<div class="column"> </div>
<div class="column"><a href="/images/2015/11/Screen%20Shot%202015-11-03%20at%203.32.43%20PM.png" target="_blank">Click to enlarge</a></div>
<div class="column"><img src="/images/2015/11/Screen%20Shot%202015-11-03%20at%203.32.43%20PM.png" alt=""></div>
<div class="column"> </div>
<div class="column">
<div class="page" title="Page 2">
<div class="layoutArea">
<div class="column">
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 we believe it has more potential to rise rather than fall with the lower exchange rate pushing up prices of imported goods. The economy is well supported by record building approvals which are serving to lift many boats across the country.
</div>
<div class="column">
 Investors will need to continue researching the best returns on their investments with both interest rates and inflation remaining at historically low levels. In terms of ‘safe-haven’ cash-based investments, online bank accounts may offer better value than term deposits. Certainly blue-chip Australian companies offer attractive fully- franked dividends, especially for investors with longer-term time horizons. 
</div>
<div class="column"> </div>
<div class="column">Craig James is the chief economist at <a href="https://www.comsec.com.au/default.aspx" target="_blank">CommSec</a>.</div>
</div>
</div>
</div>
</div>
</div>
</div></body></html>

Interest Rates

Editor's Picks

Have something to contribute?

Developments

New apartments

New townhouses

News

Interest Rates

Editor's Picks

Receive the latest news stories to your inbox

Have something to contribute?

Developments

New apartments

New townhouses

News