<p><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.</p>

<p>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.</p>

<p>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.</p>

<p>&nbsp;</p>

<p>[smartcode_project:default project_id=149670 project_image_fid=360965]</p>

<p>“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.</p>

<p>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.</p>

<p>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.</p>

<p>&nbsp;</p>

<p>[smartcode_project:default project_id=149670 project_image_fid=360981]</p>

<p>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.</p>

<p>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.</p>

<p>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.</p>

<p>&nbsp;</p>

<p>[smartcode_project:default project_id=149670 project_image_fid=360966]</p>

<p>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.</p>

<p>“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.</p>

<p>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.</p>

<p>&nbsp;</p>

<p>[smartcode_project:default project_id=149670 project_image_fid=360969]</p>

<p>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.</p>

<p data-end="8307" data-start="8063">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.</p>

<p data-end="8543" data-start="8312">“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.”</p>

<p data-end="8915" data-start="8548">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.</p>

<p>The Eveleigh is now under construction by Maxcon, with completion forecast for mid-2028. Three-bedroom residences are currently available from $2.87 million.</p>

<p>[smartcode_project_cta:default project_id=149670]</p>


Joel Robinson

The Eveleigh brings house-like apartments to Broadbeach

<p>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.</p>

<p>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.</p>

<p>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.</p>

<p>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.</p>

<p>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.</p>

<p><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_" /></p>

<p>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.</p>

<p>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.</p>

<p>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."</p>

<p>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.</p>

<p><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" /></p>

<p>Campbelltown has been starved of new residential developments in the last decade.</p>

<p>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.</p>


First look: New 139-apartment plans revive long-stalled Campbelltown city centre site

<p>
<style type="text/css">
</style>
</p>

<p>A 60-apartment building nine storeys tall would be a rarity almost anywhere along this stretch of Moreton Bay, but that's exactly what's been lodged for a modest Deception Bay street better known for its single-storey weatherboard homes.</p>

<p><a href="https://www.apartments.com.au/developers/sherlock-construction-homes">Sherlock Construction Homes</a> is seeking to push Deception Bay’s emerging medium-density housing profile higher, lodging plans for a nine-storey apartment building near the suburb’s shopping centre and foreshore.</p>

<p>Dubbed Grosvenor Apartments, the proposal at 14-20 Grosvenor Terrace would replace two detached homes with a new building designed by&nbsp;<a href="https://www.apartments.com.au/architects/mode">Mode Design</a>&nbsp;which would&nbsp;reach nearly 30 metres, well above the site’s mapped 21-metre building height.</p>

<p><img alt="First Look: Sherlock Construction pitches 9-storey tower for low-rise Deception Bay" data-entity-type="file" data-entity-uuid="86c21a25-5a97-4ca7-a361-80757137ea5b" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Deception%20da%20front.png?VersionId=aXIujfvEhH33sLHOEjHFv9Ii6qxSvAF4" /></p>

<p>The apartment mix is weighted toward larger homes, with 14 three-bedroom apartments, 31 two-bedroom apartments and 15 one-bedroom apartments. Six apartment types are spread across the floors, ranging from 66 sqm one-bedroom units through to three-bedroom apartments of 116 sqm, most with private balconies or terraces.</p>

<p>Levels one through seven follow a consistent layout of six to eight apartments per floor arranged around a central lift and stair core, with the top floor, level eight, trading one apartment for a landscaped community breakout space rather than repeating the standard layout below.</p>

<p>Ground floor is dedicated to arrival and services, with a lobby, mailroom and manager's office, alongside 91 car spaces.</p>

<p><img alt="First Look: Sherlock Construction pitches 9-storey tower for low-rise Deception Bay" data-entity-type="file" data-entity-uuid="b098bde0-5fe1-4e6c-9601-e5446612e5fc" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Deception%20podium.png?VersionId=A0hfENMNxSxkfh9Jl6D4WJ9XIraeOukA" /></p>

<p>Mode Design's brief describes a "serene coastal-inspired design blending soft curves, natural textures and light-filled spaces to reflect the relaxed Deception Bay lifestyle."&nbsp;</p>

<p>The material palette leans on white and grey render, timber-look aluminium screening and stacked-brick-look finishes, with hanging greenery and vine planting proposed across balcony edges and ground-level walls.&nbsp;</p>

<p>Balconies feature asymmetrical geometries intended to vary the building's rhythm rather than repeat a single module up the tower, while lush planting is concentrated over the entry and level one balconies to soften the building's base.</p>

<p><img alt="First Look: Sherlock Construction pitches 9-storey tower for low-rise Deception Bay" data-entity-type="file" data-entity-uuid="c05c5693-3e00-42d0-b075-55c36094f4db" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Deception%20da%201.png?VersionId=cMKJgBsBaaVCd2dA5O22SOT38OT_.BPA" /></p>

<p>The design evolved following an April 2025 prelodgement meeting with council. At that stage, the project was conceived as a seven-storey building containing 45 apartments. The subsequently lodged scheme increases the development to nine storeys and 60 apartments while introducing one-bedroom residences to the mix.</p>

<p>Zone Planning argues the additional scale reflects the site's position within an area earmarked for increased residential intensity. The planning report points to the North Lakes-Redcliffe-Moreton Bay Rail corridor strategy, which identifies Deception Bay as a district-level activity centre and supports greater housing choice within urban neighbourhoods.</p>

<p>Market Square Deception Bay, Deception Bay Sports Centre, Deception Bay State School, public transport, community facilities and the Moreton Bay foreshore are all identified within approximately one kilometre of the site, while the property falls within a 400-metre walking catchment of Market Square.</p>

First Look: Sherlock Construction pitches apartments for low-rise Deception Bay

<p data-end="587" data-start="368">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.</p>

<p data-end="778" data-start="589">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.</p>

<p data-end="907" data-start="780"><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.</p>

<p data-end="1052" data-start="909">The development will be delivered across two stages, with the first stage carrying an estimated gross realisation value of around $360 million.</p>

<p data-end="1311" data-start="1054">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.</p>

<p data-end="1451" data-start="1313">The residential mix will include townhomes, oversized two-bedroom apartments, substantial three-bedroom residences and four-bedroom homes.</p>

<p data-end="1676" data-start="1453">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.</p>

<p data-end="1908" data-start="1678">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.</p>

<p data-end="2142" data-start="1910">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.</p>

<p data-end="2142" data-start="1910"><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" /></p>

<p data-end="2308" data-start="2144">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.</p>

<p data-end="2648" data-start="2310">"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.</p>

<p data-end="2797" data-start="2650">"With Gold Coast Airport on its doorstep, it also offers a level of accessibility that broadens its appeal across almost every market demographic."</p>

<p data-end="2938" data-start="2799">The project comes as the southern Gold Coast continues to attract an increasing share of high-end apartment development and buyer activity.</p>

<p data-end="3216" data-start="2940">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.</p>

<p data-end="3325" data-start="3218">Mould said those characteristics had informed the approach MAYD and Cera Stribley had taken to the project.</p>

<p data-end="3442" data-start="3327">"We've worked closely with Cera Stribley to create a vision that is deeply connected to its surroundings," he said.</p>

<p data-end="3662" data-start="3444">"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."</p>

<p data-end="3818" data-start="3664">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.</p>

<p data-end="4076" data-start="3820">"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.</p>

<p data-end="4375" data-start="4078">"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."</p>

<p data-end="4503" data-start="4377">Cottam said the proximity to Gold Coast Airport was also proving increasingly important for interstate and second-home buyers.</p>

<p data-end="4741" data-start="4505">"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."</p>

<p data-end="4910" data-start="4743">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.</p>

<p data-end="4951" data-start="4912">MAYD is targeting an early 2027 launch.</p>


First look at MAYD's North Kirra mixed-use precinct

<main data-perf-region="main">
<p data-end="600" data-start="394">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.</p>

<p data-end="733" data-start="602">But despite that growth, the suburb has seen relatively few major new apartment projects brought to market over the past 18 months.</p>

<p data-end="970" data-start="735">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.</p>

<p data-end="970" data-start="735">[smartcode_project:default project_id=152737 project_image_fid=377679]</p>

<p data-end="1159" data-start="972">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.</p>

<p data-end="1357" data-start="1161">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.</p>

<p data-end="3400" data-start="3216">[smartcode_project:default project_id=152737 project_image_fid=377675]</p>

<p data-end="3400" data-start="3216">Nova Rêve also represents a significant step up from the family's first apartment development, Grand Rêve, which was delivered nearby on Garthowen Crescent.</p>

<p data-end="1664" data-start="1517">Grand Rêve introduced larger, house-like apartment layouts and premium inclusions including Wolf and Sub-Zero appliances to the Castle Hill market.</p>

<p data-end="1826" data-start="1666">Nova Rêve takes that approach to a precinct scale, combining the residential component with hospitality, retail and substantial public and resident landscaping.</p>

<p data-end="1826" data-start="1666">[smartcode_project:default project_id=152737 project_image_fid=377685]</p>

<p data-end="2045" data-start="1828">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.</p>

<p data-end="2269" data-start="2047">"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.</p>

<p data-end="2430" data-start="2271">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.</p>

<p data-end="2606" data-start="2432">It will include restaurants, cafes, skybars and all-day dining, alongside conference and event facilities catering to business functions, community groups and private events.</p>

<p data-end="2724" data-start="2608">At ground level, more than 1,600 sqm of shops and cafes will open onto the surrounding streets and landscaped areas.</p>

<p data-end="2892" data-start="2726">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.</p>

<p data-end="2892" data-start="2726">[smartcode_project:default project_id=152737 project_image_fid=377680]</p>

<p data-end="3004" data-start="2894">Reve Group's Romio Georges said creating an active ground plane had been central to the planning of Nova Rêve.</p>

<p data-end="3214" data-start="3006">"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.</p>

<p data-end="3400" data-start="3216">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.</p>

<p data-end="3400" data-start="3216">More than 80 per cent of the apartments will occupy corner positions, with Turner responsible for both the architecture and interiors.</p>

<p data-end="3670" data-start="3538">&nbsp;</p>

<p data-end="3670" data-start="3538">[smartcode_project_cta:default project_id=152737]</p>

<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

<html><body><div class="page" title="Page 1">
<div class="section">
<div class="layoutArea">
<div class="column"><span style="line-height: 1.3em;">GUEST OBSERVER</span></div>
<div class="column"><span style="line-height: 1.3em;"> </span></div>
<div class="column"><span style="line-height: 1.3em;">Consumer sentiment predictably eased last week after a stellar gain in the previous week. </span></div>
<div class="column"><span style="line-height: 1.3em;"> </span></div>
<div class="column"><span style="line-height: 1.3em;">Concerns about higher interest rates and the outlook for the housing market together with a softer Aussie dollar led to the modest softening of sentiment. But consumers are still more upbeat than a year ago and sentiment is above the short- term average. Also, the Reserve Bank believes that the question on the outlook for family finances is most instructive and the latest result is still well above average levels.</span></div>
<div class="column">
<br><span style="line-height: 1.3em;">The Reserve Bank Board rationalised the soft economic growth figures in the June quarter: </span><span style="line-height: 1.3em;">“The weakness in the June quarter had reflected temporary, weather-related disruptions to resource exports as well as the ongoing decline in mining investment.” </span><span style="line-height: 1.3em;">The Board expects a pickup in the September quarter. If this fails to occur, then this could prompt the Board to assess the need for more stimulus.</span>
</div>
<div class="column">
<br><span style="line-height: 1.3em;">Overall the RBA Board remains watchful – there are no indications that the neutral policy stance was likely to change any time soon.</span>
</div>
<div class="column"><span style="line-height: 1.3em;"> </span></div>
<div class="column"><span style="line-height: 1.3em;">What do the figures show?</span></div>
<div class="column">
<br><span style="line-height: 1.3em;">Consumer sentiment</span>
</div>
<div class="column">
<br><span style="line-height: 1.3em;">The </span><span style="line-height: 1.3em;">weekly ANZ/Roy Morgan consumer confidence rating fell 2.0% to 113.3 in the week to October 18 from a 15-week high. Confidence is up 1.5% over the year and above the average of 111.4 since 2014.</span>
</div>
<div class="column"><span style="line-height: 1.3em;"> </span></div>
<div class="column"><a href="/images/2015/10/20/Screen%20Shot%202015-10-20%20at%201.16.28%20PM.png" target="_blank"><span style="line-height: 1.3em;">Click to enlarge</span></a></div>
<div class="column"><span style="line-height: 1.3em;"> </span></div>
<div class="column"><span style="line-height: 1.3em;"><img src="/images/2015/10/20/Screen%20Shot%202015-10-20%20at%201.16.28%20PM.png" alt=""></span></div>
<div class="column">
<br><span style="line-height: 1.3em;">Four of the five components of the index eased in the latest week:</span>
</div>
<div class="column">
<br><ol>
<li>
<span style="line-height: 1.3em;">The estimate of family finances compared with a year ago was </span><span style="line-height: 1.3em;">down </span><span style="line-height: 1.3em;">from +9 to +8;</span>
</li>
<li>
<span style="line-height: 1.3em;">The estimate of family finances over the next year was </span><span style="line-height: 1.3em;">down </span><span style="line-height: 1.3em;">from +30 to +25;</span>
</li>
<li>
<span style="line-height: 1.3em;">Economic conditions over the next 12 months was </span><span style="line-height: 1.3em;">steady </span><span style="line-height: 1.3em;">at -1; </span>
</li>
<li>
<span style="line-height: 1.3em;">Economic conditions over the next 5 years was </span><span style="line-height: 1.3em;"><span style="line-height: 1.3em;">down </span></span><span style="line-height: 1.3em;">from +13 to +11;</span>
</li>
<li>
<span style="line-height: 1.3em;">The measure of whether it was a good time to buy a major household item was </span><span style="line-height: 1.3em;">down </span><span style="line-height: 1.3em;">from +27 points to +23 points. </span>
</li>
</ol>
</div>
<div class="column">
<p style="line-height: 1.3em;">The key quotes from the Board minutes:</p>
<p><span>Stronger growth expected: “Members noted that overall growth was expected to have strengthened in the September quarter, with indications of growth in resource exports and dwelling investment.”</span></p>
<p><span>Risks: “The key domestic sources of risk to financial stability, and stability of the Australian economy more broadly, revolved around developments in local property markets.”</span></p>
<p><span>Job market: “Members also noted that conditions in the labour market had strengthened further over recent months and were somewhat better than had been expected earlier in the year. Nevertheless, spare capacity remained in the economy, domestic cost pressures were very low and inflation was expected to remain consistent with the target over the next one to two years.”</span></p>
<p><span>Bank lending: “Banks were also reportedly becoming increasingly wary of lending to property developers in markets that were thought to be at risk of becoming oversupplied.”</span></p>
<p><span>Housing data: “In relation to lending for housing, members noted that the data on the split of lending to owner-occupiers and investors were of questionable quality at present.”</span></p>
<p><span>Imports of goods</span></p>
<p><span>The Australian Bureau of Statistics noted the following. “Preliminary analysis shows that goods debits (imports) on a balance of payments basis in original terms rose $1,562m (7%) to $25,043m between August and September 2015.</span></p>
<p><span>In seasonally adjusted terms, goods debits rose $332m (1%) between August and September 2015 to $23,853m. This is the highest on record surpassing the revised August 2015 estimate of $23,521m. Consumption goods rose $264m (3%) and non-monetary gold rose $161m (47%). Intermediate and other merchandise goods fell $59m (1%) and capital goods fell $34m (1%).</span></p>
<p><span>What is the importance of the economic data?</span></p>
<p><span>The ANZ/Roy Morgan weekly survey of consumer confidence closely tracks the monthly Westpac/Melbourne Institute consumer sentiment index but the former measure is a timelier assessment of consumer attitudes and is now closely tracked by the Reserve Bank.</span></p>
<p><span>The Reserve Bank releases minutes of its monthly Board meeting a fortnight after the event. The minutes give a guide to Reserve Bank thinking on interest rate settings.</span></p>
<p><span>What are the implications for interest rates and investors?</span></p>
<p><span>CommSec expects no change to interest rates over the coming year. </span></p>
</div>
<div class="column">
<div class="page" title="Page 2">
<div class="layoutArea">
<div class="column">
<div class="page" title="Page 2">
<div class="layoutArea">
<div class="column"><span style="line-height: 1.3em;"> </span></div>
<div class="column"><a href="/images/2015/10/20/Screen%20Shot%202015-10-20%20at%201.15.28%20PM.png" target="_blank"><span style="line-height: 1.3em;">Click to enlarge</span></a></div>
<div class="column"><span style="line-height: 1.3em;"> </span></div>
<div class="column"><span style="line-height: 1.3em;"><img src="/images/2015/10/20/Screen%20Shot%202015-10-20%20at%201.15.28%20PM.png" alt=""></span></div>
<div class="column"><span style="line-height: 1.3em;"> </span></div>
<div class="column">
<span style="line-height: 1.3em;"><span> </span><em>Savanth Sebastian is an economist for <a href="https://www.commsec.com.au/" target="_blank">CommSec</a>. </em></span><span style="line-height: 1.3em;"> </span>
</div>
</div>
</div>
</div>
</div>
</div>
</div>
</div>
</div>
</div></body></html>

jchancellor-FAypfDUnLy

RBA tips firmer growth: CommSec's Savanth Sebastian

<html><body>
<p><span>When the RBA board decided to leave the cash rate unchanged at 2% in early October, the members finally noted growth in housing prices in Sydney appeared to have eased slightly in recent months.</span></p>
<p><span>It also noted auction clearance rates in Sydney and Melbourne had declined a little from their recent peaks.</span></p>
<p><span>"However, it was too early to be confident that these signs of slowing in housing price inflation would be sustained," they advised in their notes yesterday.</span></p>
<p><span>In relation to lending for housing, members noted that the data on the split of lending to owner-occupiers and investors were of questionable quality at present.</span></p>
<p><span>The available data suggested that there had been a modest decline in the growth of credit extended to investors in housing of late, which was consistent with the tightening in banks' lending standards in response to actions of the Australian Prudential Regulation Authority (APRA).</span></p>
<p><span>With housing credit growth overall remaining steady over the past year, there had reportedly been a slight pick-up in the growth of housing credit to owner-occupiers.</span></p>
<p><span>Dwelling investment had increased strongly over the year to June, despite recording a decline in the June quarter.</span></p>
<p><span>Building approvals had declined a little from their recent peak, but remained at levels that implied further growth in dwelling investment, albeit at a gradually declining rate.</span></p>
<p><span>Loan approvals for construction of new dwellings had also fallen over the past year. </span></p>
<p><span>Members noted that domestic sources of risk to financial stability in Australia continued to revolve mainly around developments in local property markets.</span></p>
<p><span>"In the context of recent developments in the housing market and household credit, members discussed the findings from the enhanced scrutiny of housing lending practices undertaken by APRA and the Australian Securities and Investments Commission since the end of 2014.</span></p>
<p><span>"This scrutiny and related work had shown that investor activity was considerably higher – and lending standards in some parts of the market weaker – than had originally been thought."</span></p>
<p><span>Members further observed that the risks in commercial property and the property development sector were rising.</span></p>
<p><span>"Building approvals for new apartments remained very strong over 2015, even though rental markets appeared soft in some areas.</span></p>
<p><span>"The divergence between commercial property valuations and rents had widened further, with strong domestic and foreign investor interest for new and existing office buildings in particular, even though vacancy rates were quite high.</span></p>
<p><span>It acknowledged while Australian banks continued to perform well, they were taking steps to enhance their resilience.</span></p>
<p><span>"Banks' asset performance continued to improve, profitability remained high, and the large banks had raised substantial amounts of capital in advance of forthcoming prudential requirements.</span></p>
<p><span>"Most banks had strengthened the serviceability metrics used in their mortgage lending and taken steps to slow the pace of growth in investor lending towards the prudential regulator's expectations.</span></p>
<p><span>"Banks were also reportedly becoming increasingly wary of lending to property developers in markets that were thought to be at risk of becoming oversupplied.</span></p>
<p><span>"Nonetheless, competition among lenders had intensified in the owner-occupied segment of the housing market and had continued to do so in parts of the business lending market.</span></p>
<p><span>"Members observed that a key challenge would be to ensure that lending standards at both Australian and foreign-owned banks did not weaken from this point."</span></p>
<p>Members noted that reductions in the cash rate earlier in the year continued to provide support to aggregate demand, particularly dwelling investment and household consumption.</p>
<p>Members also noted that conditions in the labour market had strengthened further over recent months and were somewhat better than had been expected earlier in the year.</p>
<p>Nevertheless, spare capacity remained in the economy, domestic cost pressures were very low and inflation was expected to remain consistent with the target over the next one to two years.</p>
<p><span>The key domestic sources of risk to financial stability, and stability of the Australian economy more broadly, revolved around developments in local property markets.</span></p>
<p><span>"Members noted that growth in lending for housing had been steady over recent months and that there were some signs of an easing in the strong rate of increase in dwelling prices in Sydney, in particular, although trends had been more varied in a number of other cities.</span></p>
<p><span>"At the same time, members judged that there were signs that the response of the banks to supervisory measures implemented by APRA were helping to manage risks in the housing market."</span></p>
</body></html>

Too early to conclude housing price inflation tamed: October RBA minutes

<html><body>
<div>Having recently listed on the securities exchange, Australian Finance Group (AFG) now opts to release its aggregate mortgage data on a quarterly basis, having previously released monthly figures.</div>
<div> </div>
<div>The figures for the September 2015 quarter, which are not seasonally adjusted, revealed a +16% year-on-year increase in mortgage volumes.</div>
<div> </div>
<div><a href="/images/2015/10/15/AFG1.jpg" target="_blank">Click to enlarge</a></div>
<div> </div>
<div><img src="/images/2015/10/15/AFG1.jpg" alt=""></div>
<div> </div>
<div>
<span>Mortgage volumes have increased by more than +68% over the past three years, which may be partly reflective of changes in market share. </span><br><br><strong><span style="text-decoration: underline;">Average mortgage size soars</span></strong><br><br><div>Significantly the average new mortgage size in Australia has soared further from $433,000 to $471,000 over the past year.</div>
<div> </div>
<div><a href="/images/2015/10/15/AFG2.jpg" target="_blank">Click to enlarge</a></div>
<div> </div>
<div><img src="/images/2015/10/15/AFG2.jpg" alt=""></div>
<div> </div>
<div>
<div>Unsurprisingly, the main driver of the gains has been the average size of mortgages sold in New South Wales which has jumped by more than $60,000 over the past year, and has soared from $454,000 to $584,000 over the past three years. </div>
<div> </div>
<div>Over the past year the average mortgage size also increased significantly in Victoria (+$34,000), Queensland (+$24,000), South Australia (+$30,000).</div>
<div> </div>
<div>There were also increases over the last year in Western Australia and the Northern Territory, but these resources states saw declines in their respective average mortgage sizes in Q3 2015.</div>
<div> </div>
<div><a href="/images/2015/10/15/AFG3.jpg" target="_blank">Click to enlarge</a></div>
<div> </div>
<div><img src="/images/2015/10/15/AFG3.jpg" alt=""></div>
<div> </div>
<div>
<div><strong><span style="text-decoration: underline;">Investor market share declines</span></strong></div>
<div> </div>
<div>Perhaps the most significant aspect of this release was the very sharp drop in investor market share.</div>
<div> </div>
<div>According to AFG the investor share appears to have stabilised in recent months at around 32 to 33% of the mortgage market.</div>
<div> </div>
<div>Notably investor market share for Q3 2015 of just 33% was well below the 3 year average of 38%.</div>
<div> </div>
<div><a href="/images/2015/10/15/AFG4.jpg" target="_blank">Click to enlarge</a></div>
<div><img src="/images/2015/10/15/AFG4.jpg" alt=""></div>
<div> </div>
<div>
<div class="separator">This once again implies that APRA's advisory speed limit of +10 per cent annualised credit growth in relation to invetsment loans will be comfortably met in due course, and the housing market story going forward will largely be one of to what extent owner-occupier loans pick up the slack.</div>
<div class="separator"> </div>
<div class="separator"><strong><span style="text-decoration: underline;">Westpac taps the market with raising</span></strong></div>
<div class="separator"> </div>
<div class="separator">This morning Westpac went into a trading halt and announced that it would be tapping investors for a $3.5 billion renounceable entitlement offer in order to bolster its capital position, while noting in a separate announcement to the ASX that it will be whacking 20bps onto its home loan and investment loan rates, effective from November.</div>
<div class="separator"> </div>
<div class="separator">It is widely expected that the other retail banks will follow suit in due course in respect to mortgage rates.</div>
<div class="separator"> </div>
<div class="separator">This move seems likely to be a game changer for cash rate futures markets, with another interest rate cut from the Reserve Bank as soon as next month already considered by some to be an each way bet.</div>
<div class="separator"> </div>
<div class="separator">If Thursday's employment data is weaker than expected then a rate cut in November may become more likely than not.</div>
<div class="separator"> </div>
<div class="separator">AFG noted in its release that many borrowers consider further rate cuts to be increasingly likely, with fixed rate mortgages declining to just 11.3% of total loans processed for the quarter, which is the lowest level for more than three years. </div>
<div class="separator"> </div>
<div class="separator">
<p><span><em>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>.</em><br></span></p>
<p><em>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>.</em></p>
</div>
</div>
</div>
</div>
</div>
</body></html>

pwargent-M4siyDbqQY

Average mortgage size soars: Pete Wargent

<html><body><div class="page" title="Page 1">
<div class="layoutArea">
<div class="column">
<p><span>GEUST OBSERVER</span></p>
<p><span>Westpac’s move to increase interest rates on its owner occupier loans will be the first from many lenders</span><span>. </span></p>
<p><span>We find that when one of the majors make a change like this, others </span><span>follow.</span></p>
<p><span>Mozo calculates Westpac will earn an extra $1.59 million in interest each day from its decision which will impact existing and new owner occupier and investor loan customers. </span></p>
<p><span>With APRA’s requirements not due until 1 July 2016, Westpac has made a bold move to increase rates so early, but we’re going to see a lot more of it over the coming months.</span></p>
<p><span style="line-height: 1.3em;">Despite rates being at record lows, lenders are looking at ways to meet APRA”s capital requirements including raising rates, not passing on official interest rate cuts or curbing discounts.</span></p>
<p><span>If the RBA cuts rates on Melbourne Cup day, we could see banks holding back part of a rate cut or not passing on cuts altogether.</span></p>
<p><span>The ‘borrower bonanza’ of sub 4% variable rates and incentives we’ve seen lately may become a distant memory come 2016.</span></p>
<p><span>In another measure to increase the ratio of deposits as a funding channel, Westpac, St George, </span><span>Bank of Melbourne and Bank of SA have increased at call and term deposit rates. </span></p>
<p><span>Westpac upped the introductory </span><span>rate on its eSaver account by 6 basis points to 3.31% and its 4 and 6 month term deposits by 10 basis points and 1 year term deposit by 5 basis points in September. This comes after a 14 basis point increase in August for the eSaver introductory rate to 3.25%. </span></p>
<p><span>After a long period of uncompetitive savings rates, deposit holders might have some light at the end of the tunnel with rates likely to increase over the next six months, thanks to the new capital rules.</span></p>
<p><span>It would be highly unlikely for any of the Big 4 banks not to follow Westpac’s early lead - which will also see them gain new deposit business.</span></p>
<p><em>Kirsty Lamont is marketing director of <a href="https://mozo.com.au" target="_blank">Mozo</a>.</em></p>
</div>
</div>
</div></body></html>

More rate hikes to follow Westpac move: Mozo's Kirsty Lamont

<html><body>
<p><span>Westpac will raise its home lending rates by 20 basis points to help boost its capital reserves. </span></p>
<p><span>The surprise move lifts mortgage rates on residential property by 20 basis points, for owner occupiers and property investors.</span></p>
<p><span>The new rates will take effect from November 20.</span></p>
<p><span>The country's second biggest bank will increase headline owner-occupier rates to 5.68%, and investor rates to 5.95%.</span></p>
<p><span>Chief executive Brian Hartzer said the capital raising places its capital ratio "within the top quartile of banks globally".</span></p>
<p><span>"Capital raised responds to changes in mortgage risk weights that will increase the amount of capital required to be held against mortgages by more than 50%, with the increased regulatory required to be applied from July 1, 2016," the bank statement said.</span></p>
<p><span>The increase in mortgage rates would also help meet the capital requirements, it said. </span></p>
<p><span>UBS and Merrill Lynch are handling the capital raising for the bank. <span>The changes apply only to Westpac-branded loans, not St George, Bank of Melbourne or BankSA.</span></span></p>
<p><span>The <em>Australian Financial Review's Chanticleer</em> columnist Tony Boyd wrote <span>Westpac's decision to share the pain of higher capital charges with shareholders and home loan borrowers will "deliver a big jolt to the economy - and fend off a potential hedge fund attack."</span></span></p>
</body></html>

Westpac to raise home loan rates for all by 20 basis points in November

<html><body><div class="page" title="Page 1">
<div class="section">
<div class="layoutArea">
<div class="column"><span style="line-height: 1.3em;">GUEST OBSERVER</span></div>
<div class="column"><span style="line-height: 1.3em;"> </span></div>
<div class="column"><span style="line-height: 1.3em;">The latest housing finance statistics certainly point to some interesting reading. Not only is the size of the average home loan holding at a record high, but it is growing at the fastest pace in 12 years. </span></div>
<div class="column"><span style="line-height: 1.3em;"> </span></div>
<div class="column"><span style="line-height: 1.3em;">Over the past year the average home loan grew by 15.4% and is showing no signs of slowing down. Clearly the lift is been fuelled by the low interest rate environment.</span></div>
<div class="column">
<br><span style="line-height: 1.3em;">Policymakers would be encouraged by the lift in owner-occupied loans at the expense of investor finance. The value of investment loans has now fallen for three out of the past four months. Overall the housing finance statistics do not suggest a huge pullback in home landing, although there are signs that activity levels are starting to ease. Over the next few months the tighter bank lending standards will filter through to the housing statistics.</span>
</div>
<div class="column">
<br><span style="line-height: 1.3em;"><span style="line-height: 1.3em;">There is no doubt the pullback in investor loans is a positive, and will help to cool property prices but housing is all about demand and supply. Encouragingly loans to build new homes lifted after falling for the prior three months. If there is a substantial pullback in new construction it could be more of a detriment in the longer-term. The situation bears watching but at present the anticipated lift in supply over the coming year coupled with tighter lending  </span></span><span style="line-height: 1.3em;">standards should result in home prices easing and rents also falling. </span>
</div>
<div class="column"><span style="line-height: 1.3em;"> </span></div>
<div class="column"><a href="/images/2015/10/09/Screen%20Shot%202015-10-09%20at%201.38.50%20PM.png" target="_blank"><span style="line-height: 1.3em;">Click to enlarge</span></a></div>
<div class="column"><img src="/images/2015/10/09/Screen%20Shot%202015-10-09%20at%201.38.50%20PM.png" alt="" width="732" height="243"></div>
<div class="column">
<div class="page" title="Page 2">
<div class="layoutArea">
<div class="column">
<p><span>What do the figures show? </span></p>
<p><span>Housing finance</span></p>
<span style="line-height: 1.3em;">The </span><span style="line-height: 1.3em;">number </span><span style="line-height: 1.3em;">of new owner-occupier housing loans (commitments) rose by 2.9% in August. Excluding the refinancing of dwellings, the number of loans was up by 5.2%.</span><br><p style="line-height: 1.3em;">Loans by owner-occupiers for the construction of homes rose by 2.4% in August; loans to buy newly-erected dwellings rose by 2.6% and loans for the purchase of established dwellings (excluding refinancing) rose by 6.0%. The number of refinancing transactions fell by 1.5%.</p>
<p style="line-height: 1.3em;"><span style="line-height: 1.3em;">Housing finance - value</span></p>
<p style="line-height: 1.3em;">The value of new housing commitments (owner occupier and investment) rose by 3.5% in August.</p>
<p style="line-height: 1.3em;">Owner-<span style="line-height: 1.3em;">occupier loans rose by 6.1% while investment loans fell by 0.4%.</span></p>
<p style="line-height: 1.3em;">The value of loans by owner-occupiers and investors to build new homes rose by 2.8% in August after falling by 0.4% July. The value of loans to build stood at $2.6 billion, easing further from the record high of $2.9 billion in December 2014.</p>
<p style="line-height: 1.3em;">Housing finance – other statistics</p>
<p><span>The proportion of first-time buyers </span><span>in the home loan market rose from 15.4% to 15.7%in August. (However the figures take into account refinancing loans and as such the figures may be skewed). </span><span>Fixed rate loans </span><span>fell from 9.9% to 9.6% of all loans in August – a four year low. And the </span><span>average home loan </span><span>across Australia stood at $371,200 in August, up 15.4% on a year ago – the fastest pace of growth in 12 years. </span></p>
<p><span>What is the importance of the economic data? </span></p>
<p><span>Housing Finance </span><span>data is produced monthly by the Bureau of Statistics and shows commitments by lenders, such as banks, to provide finance for housing purposes. The lending figures relate to those looking to buy or build homes to live in as well as those seeking to buy or build homes for investment purposes. Generally people get their finance organised first, so the figures are regarded as a leading indicator on the housing market. </span></p>
<p><span>What are the implications for interest rates and investors? </span></p>
<span style="line-height: 1.3em;">The Reserve Bank will be keeping a close eye on the housing market. The hope would be that while housing plays an integral part in driving the broader growth story, other sectors step up to the plate given the attractive low interest rate environment. In particular policymakers would be hoping that the non-mining business sector looks to invest and create more employment over the coming year.</span>
</div>
<div class="column"><span style="line-height: 1.3em;"> </span></div>
<div class="column"><span style="line-height: 1.3em;">CommSec expects the Reserve Bank to remain on the interest rate side lines over the coming year. </span></div>
<div class="column"><span style="line-height: 1.3em;"> </span></div>
<div class="column"><a href="/images/2015/10/09/Screen%20Shot%202015-10-09%20at%201.40.28%20PM.png" target="_blank"><span style="line-height: 1.3em;">Click to enlarge</span></a></div>
<div class="column"><span style="line-height: 1.3em;"><img src="/images/2015/10/09/Screen%20Shot%202015-10-09%20at%201.40.28%20PM.png" alt="" width="791" height="273"></span></div>
<div class="column"> </div>
<div class="column"><em>Savanth Sebastian is an economist for <a href="https://www.commsec.com.au/" target="_blank">CommSec</a></em></div>
</div>
</div>
</div>
</div>
</div>
</div></body></html>

Home loans growing at fastest rate in 12 years: CommSec's Savanth Sebastian

<html><body>
<p>GUEST OBSERVER</p>
<p>As expected, the Reserve Bank Board decided to leave the cash rate unchanged at 2%.</p>
<p>Arguably the Governor’s statement in October represents the fewest number of changes to the previous month’s statement that we have ever seen. This may be a clear strategy to discourage markets from expecting any imminent change in policy. Of course this is particularly important given that the next meeting will be in November, which is one of the four meetings per year where the Bank reviews its forecasts for both growth and inflation and therefore represents the most likely timing for a policy adjustment. In providing minimal wording changes the signal seems quite clear that it is unlikely that the Bank will see the need to substantially revise its growth forecasts and therefore need to further ease rates.</p>
<p>The most important change in wording was around the assessment of “regulatory measures”. In September the statement merely recognised that the policies were in place whereas in October “regulatory measures are helping to contain risks that may arise from the housing market”. This might seem to be a marked increase in confidence over the month although the minutes to the September meeting noted that “there were indications that the measures implemented by APRA had slowed the growth in lending for investment housing”.</p>
<p>Another change was around house prices where in September prices were acknowledged to have continued to rise strongly in Sydney whereas in the October statement both Sydney and Melbourne were singled out for “strongly rising prices”.</p>
<p>The key consistent themes around “softening conditions in China and east Asia”; “moderate expansion in the Australian economy”; “stronger growth of employment and a steady rate of unemployment over the past year”; “economy operating with a degree of spare capacity”; “inflation under control even with a lower exchange rate” were repeated in this statement.</p>
<p>As expected the wording around the Australian dollar was unchanged,” The Australian dollar is adjusting to the significant declines in commodity prices.” There was also no reason to change the commentary around the Australian dollar which prior to the September meeting was around US 71.20 and today is around US 70.80, with iron ore prices generally stable.</p>
<p>Of course the most important part of the statement is the closing paragraph which is repeated word for word from the September statement. Recall that this statement is ‘middle of the road’. On the one hand not signalling a specific change with terms such as ‘for the time being’ or ‘scope’  but  also not using the language of 2014  ‘the most prudent course is likely to be a period of stability in interest rates’.</p>
<p><strong>Outlook</strong></p>
<p>Markets have shaved the probability of a move this year to around 40% but still have a 100% probability of a move by February/March next year.</p>
<p>It is our view that the Bank will not need to sufficiently change its growth forecasts for 2015 and 2016 that would necessitate further policy support. That would mean rates on hold in both 2015 and 2016. However, risks on rates remain to the downside particularly around the global outlook; the terms of trade; and the labour market.</p>
<p><span><em>Bill Evans </em></span><em>is chief economist of <a href="https://www.westpac.com.au/" target="_blank">Westpac</a>.</em></p>
</body></html>

bevans-rYk9SxEa4r

Governor’s recent statement discourages November rate move: Westpac's Bill Evans

<html><body><div class="page" title="Page 1">
<div class="section">
<div class="layoutArea">
<div class="column">
<p><span style="line-height: 1.3em;">GUEST OBSERVER</span></p>
<p><span style="line-height: 1.3em;">The cash rate has been left at a record low of 2% for a fifth month (six months of rates at 2%). The Reserve Bank has left the accompanying statement the same – almost word-for-word.</span></p>
<p><span>The Aussie dollar rose by a third of a cent as investors gave up on hopes for a rate cut in the future. </span><span>What does it all mean?</span></p>
<p><span style="line-height: 1.3em;">In outlining where the Reserve Bank stands on interest rate settings, the Governor recently told the House of Representatives Economics Committee, </span><span style="line-height: 1.3em;">"I think we are pretty content where we are right now.” </span><span style="line-height: 1.3em;">And little more needs to be said.</span></p>
<p><span style="line-height: 1.3em;">The key question now, is what will be the next move on rates? It is clear to us that the economy is picking up momentum but there are still challenges ahead, so interest rates should remain on hold. But there is certainly no case for rate cuts. </span></p>
<p><span style="line-height: 1.3em;">Consider:</span></p>
<p><span style="line-height: 1.3em;">Car sales are at record highs</span></p>
<p style="line-height: 1.3em;"><span style="line-height: 1.3em;">Building approvals are at record highs</span></p>
<p style="line-height: 1.3em;"><span style="line-height: 1.3em;">Job ads have lifted for 14 of the last 16 months</span></p>
<p style="line-height: 1.3em;"><span style="line-height: 1.3em;">Employment has posted the biggest 6-month gain in 41⁄2 years</span></p>
<p style="line-height: 1.3em;"><span style="line-height: 1.3em;">Manufacturing &amp; services sectors are expanding</span></p>
<p style="line-height: 1.3em;"><span style="line-height: 1.3em;">The Aussie dollar has fallen around US17 cents over the past year</span></p>
<p style="line-height: 1.3em;"><span style="line-height: 1.3em;">The only real changes to the text of the statement. In September: </span><span style="line-height: 1.3em;">“Equity markets have been considerably more volatile of late, associated with developments in China, though other financial markets have been relatively stable”</span><span style="line-height: 1.3em;">. In October: </span><span style="line-height: 1.3em;">“Equity market volatility has continued, but the functioning of financial markets generally has not, to date, been impaired.”</span></p>
<p style="line-height: 1.3em;"><span style="line-height: 1.3em;">Also, in September: </span><span style="line-height: 1.3em;">“The Bank is working with other regulators to assess and contain risks that may arise from the housing market.” </span><span style="line-height: 1.3em;">In October: </span><span style="line-height: 1.3em;">“Regulatory measures are </span><span style="line-height: 1.3em;">helping to contain risks that may arise from the housing </span><span style="line-height: 1.3em;">market.”</span></p>
<p style="line-height: 1.3em;"><span style="line-height: 1.3em;">The only other change: the Reserve Bank noted </span><span style="line-height: 1.3em;">“Dwelling prices continue to rise strongly in Sydney and Melbourne...” </span><span style="line-height: 1.3em;">In September it only referred to prices in Sydney.</span></p>
<p style="line-height: 1.3em;"><span style="line-height: 1.3em;">Bottom line is that there has been no change to the neutral policy stance – a stance that suggests that the next move in rates could be either up or down. </span></p>
<p style="line-height: 1.3em;"><a href="/images/2015/10/06/Screen%20Shot%202015-10-06%20at%209.24.39%20PM.png" target="_blank"><span style="line-height: 1.3em;">Click to enlarge</span></a></p>
<p style="line-height: 1.3em;"><span style="line-height: 1.3em;"><img src="/images/2015/10/06/Screen%20Shot%202015-10-06%20at%209.24.39%20PM.png" alt=""></span></p>
<p style="line-height: 1.3em;"> </p>
<p style="line-height: 1.3em;"><em>Craig James is the chief economist at <a href="https://www.comsec.com.au/default.aspx" target="_blank">CommSec</a>.</em></p>
</div>
</div>
</div>
</div></body></html>

cjames-5S2v74qSNK

RBA's contentment with neutral stance maintained: CommSec's Craig James

<html><body>
<p>The Reserve Bank of Australia (RBA) has kept the official cash rate at 2%, for the fifth month. The meeting noted r<span>egulatory measures are helping to contain risks that may arise from the housing market. </span></p>
<p>CoreLogic RP Data head of research Tim Lawless said the flat rate of growth across the Sydney housing market last month, together with a slowdown in investment related mortgage activity wasn’t enough to sway the RBA into another interest rate cut this month. </p>
<p>"We saw the rate of capital gain flatten out across the Sydney housing market during September, however the trend rate of growth remains very strong, with Sydney values almost 17% higher over the past twelve months and 4.6% higher over the September quarter," he said.</p>
<p>"In contrast, Australia’s second largest housing market has gathered some momentum over the past quarter, outperforming Sydney with a 2.4% rise in dwelling values last month and a 7.4% shift over the quarter. Other housing market data is suggesting that conditions may be slowing, with clearance rates reducing to the low 70% range in both Sydney and Melbourne on higher volumes and the number of homes available for sale rising higher than a year ago, providing prospective buyers with more options and less urgency in their decision making. </p>
<p>"With the Aussie dollar holding around the US$0.71 mark, inflation remaining low and labour market conditions relatively steady, the RBA is in a good position to keep interest rates at their record lows.</p>
<p>"The slower capital gain conditions in Sydney may give the RBA some flexibility when considering future interest rate movements, however if the Melbourne market continues to gather pace as Sydney slows down, the effects of slower conditions in Sydney may not be seen in the headline readings for housing market performance. </p>
<p>"With interest rates remaining on hold, borrowers are still enjoying historically low mortgage rates which should continue to drive demand for housing."</p>
<p> </p>
<p>Laing+Simmons managing director Leanne Pilkington supported the RBA’s decision to leave interest rates on hold as the wider market undergoes several key shifts heading towards summer.</p>
<p> </p>
<p>“By maintaining the low interest rate environment for the foreseeable future, the Reserve Bank is providing stability to a real estate market that is otherwise undergoing a significant transition at the moment,” Ms Pilkington said.</p>
<p> </p>
<p>“Firstly – and at long last – we are beginning to see new stock come online and present some more options for buyers. This is the result of a combination of factors, including a new wave of development bringing new supply as well as the spring selling season playing out.</p>
<p> </p>
<p>“As a consequence auction clearance rates have been lower in recent weeks, albeit from an extremely high base, as buyers exercise the discretion that comes with more alternatives.</p>
<p> </p>
<p>“Nevertheless, warnings about auction bloodbaths and plummeting prices remain the domain of doomsayers as opposed to actual experts in the market."</p>
</body></html>

mick.cee-iDmgDDAmu8

RBA holds rates at 2% for fifth month

<html><body>
<p>Statement by Glenn Stevens, Governor: Monetary Policy Decision</p>
<p>At its meeting today, the Board decided to leave the cash rate unchanged at 2.0 per cent.</p>
<p>The global economy is expanding at a moderate pace, with some further softening in conditions in China and east Asia of late, but stronger US growth. Key commodity prices are much lower than a year ago, in part reflecting increased supply, including from Australia. Australia's terms of trade are falling.</p>
<p>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 policy. Equity market volatility has continued, but the functioning of financial markets generally has not, to date, been impaired. Long-term borrowing rates for most sovereigns and creditworthy private borrowers remain remarkably low. Overall, global financial conditions remain very accommodative.</p>
<p>In Australia, the available information suggests that moderate expansion in the economy continues. While growth has been somewhat below longer-term averages for some time, it has been accompanied with somewhat stronger growth of employment and a steady rate of unemployment over the past year. Overall, the economy is likely to be operating with a degree of spare capacity for some time yet, with domestic inflationary pressures contained. Inflation is thus forecast to remain consistent with the target over the next one to two years, even with a lower exchange rate.</p>
<p>In such circumstances, monetary policy needs to be accommodative. Low interest rates are acting to support borrowing and spending. Credit is recording moderate growth overall, with growth in lending to the housing market broadly steady over recent months. Dwelling prices continue to rise strongly in Sydney and Melbourne, though trends have been more varied in a number of other cities. Regulatory measures are helping to contain risks that may arise from the housing market. In other asset markets, prices for commercial property have been supported by lower long-term interest rates, while equity prices have moved lower and been more volatile recently, in parallel with developments in global markets. The Australian dollar is adjusting to the significant declines in key commodity prices.</p>
<p>The Board today judged that leaving the cash rate unchanged was appropriate at this meeting. Further information on economic and financial conditions to be received over the period ahead will inform the Board's ongoing assessment of the outlook and hence whether the current stance of policy will most effectively foster sustainable growth and inflation consistent with the target.</p>
<p> </p>
</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