<a href="https://www.apartments.com.au/developments/broadbeach-qld-4218">Broadbeach</a> offers plenty of reasons to live vertically, but moving from a substantial family home into an apartment can expose the compromises of high-density living. Privacy, room for guests and usable living space tend to matter more when an apartment is intended as a permanent home rather than an occasional coastal base.

A typical residential floor at <a href="https://www.apartments.com.au/new-apartments/the-eveleigh-broadbeach-7-9-surf-parade-broadbeach-qld-4218">The Eveleigh</a>, on Surf Parade,&nbsp;contains just four apartments. The 94-residence development by <a href="https://www.apartments.com.au/developers/hirsch-faigen">Hirsch &amp; Faigen</a> is predominantly made up of expansive three-bedroom homes, with a limited collection of half-floor penthouses above.

Across the apartment floors, <a href="https://www.apartments.com.au/architects/rothelowman">Rothelowman</a> has used the relatively limited number of residences to give each home greater access to natural light and outlook. Living spaces extend towards full-height glazing, while a series of bay windows frame selected views across the Pacific Ocean, city and hinterland rather than treating the building edge as a continuous wall of glass.

&nbsp;

[smartcode_project:default project_id=149670 project_image_fid=360965]

“The apartment floors deliver a collection of homes that embrace controlled outlook via a series of bay windows deliberately framing moments of view,” Rothelowman Director Kim Lowman said.

From outside, those projecting forms contribute to the tower’s faceted profile. Strong horizontal and vertical elements establish its proportions, while the changing position of the sun alters the light, shadow and reflection across the façade throughout the day.

The same attention moves inside the apartments, where the material palette combines warm timber, natural stone, metallic detailing and softer curved forms. Kitchens sit within the main living zone, with stone island benches, integrated joinery and European appliances, before the living areas extend towards the glazing and the outlook.

&nbsp;

[smartcode_project:default project_id=149670 project_image_fid=360981]

Three genuine bedrooms provide room to accommodate family and guests, while two secure car spaces and storage address some of the practical considerations that can become more noticeable when moving from a larger home. Feedback from the display suite has centred on the warmth and restraint of the interiors, with buyers commenting that the residences feel like homes rather than conventional coastal apartments.

A limited collection of half-floor penthouses occupies the upper levels, increasing the scale of the living spaces and adding private balconies and elevated finishes. From this position, the outlook extends between the ocean and hinterland.

Outside the private residences, The Eveleigh separates its shared spaces between the podium and rooftop. The podium is centred on wellness, with subtropical landscaping surrounding a swimming pool and pool terrace, yoga garden, private gymnasium, sauna and hot and cold plunge facilities. Landscaped retreats and pavilions provide additional places to sit away from the main recreation areas.

&nbsp;

[smartcode_project:default project_id=149670 project_image_fid=360966]

Higher in the building, a rooftop pavilion and private dining suite sit alongside resident lounge, barbecue and outdoor dining areas, opening towards panoramic views across the ocean, city and hinterland.

“Buyers are no longer just looking for an apartment, but a lifestyle where they can relax, reset, and enjoy a balanced way of living,” Hirsch &amp; Faigen Director of Sales Matt George said.

Interest to date has come from established owner-occupiers and interstate lifestyle purchasers, including buyers planning a future move to the Gold Coast. Many are coming from larger homes and want to reduce ongoing maintenance without giving up space for family and guests, privacy, two car spaces or the ability to entertain at home.

&nbsp;

[smartcode_project:default project_id=149670 project_image_fid=360969]

Much of that daily life can also take place beyond the building without requiring a drive. Kurrawa Beach and Pratten Park are an easy walk from Surf Parade, while Pacific Fair, Oracle Boulevard, The Oasis, restaurants, cafés, entertainment and public transport are also within walking distance.

The Eveleigh is Hirsch &amp; Faigen's fourth Gold Coast development since entering the market in 2021, following The Hemingway at Palm Beach, The Emerson at Kirra and Yves at Mermaid Beach. Each of the preceding projects sold out before completion.

“Broadbeach had been on our radar throughout our time operating on the Gold Coast,” the developer said. “Following our projects in Palm Beach, Kirra and Mermaid Beach, Broadbeach represented the natural next step for the business.”

The Surf Parade site brought together proximity to the beach, protected coastal outlooks and walkability to dining, shopping and recreation. Hirsch &amp; Faigen also identified the street as an emerging premium residential address, with enough separation from Broadbeach's busier destinations to retain a quieter environment at home.

The Eveleigh is now under construction by Maxcon, with completion forecast for mid-2028. Three-bedroom residences are currently available from $2.87 million.

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Joel Robinson

The Eveleigh brings house-like apartments to Broadbeach

A long-stalled Campbelltown development site is back in play, with new plans for 139 apartments set to supersede a mixed-use scheme approved almost a decade ago but never built.

The new proposal for 28 Cordeaux Street would deliver 116 market and 23 affordable apartments in a part 14-storey building, bringing a substantial new project into a Campbelltown market where new apartment supply remains limited.

Plans have been filed over the 3,092 sqm corner site at Moore-Oxley Street, around 600 metres from Campbelltown Railway Station and the city-centre retail core.

The site already carries a mixed-use residential approval dating to 2016. Doroch Architects has now been engaged on a larger replacement scheme, which is progressing as a State Significant Development Application following a Housing Delivery Authority determination in August 2025.

The apartment mix comprises 39 one-bedroom, 72 two-bedroom and 28 three-bedroom residences. Two-bedroom apartments make up just over half of the project, while three-bedroom homes account for 20 per cent.

<img alt="First look: New 139-apartment plans revive long-stalled Campbelltown city centre site" data-entity-type="file" data-entity-uuid="136dd5b9-3791-4da6-9e31-76f533f5b4de" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Campbelltown%20da2.png?VersionId=LgOSy9nwf5u.MGswBBwaGGxuX8QpHSl_" />

Of the 139 apartments, 23 will be delivered as affordable housing under the in-fill affordable housing provisions of the Housing SEPP. The affordable component represents 15 per cent of the residential gross floor area and will be managed by a registered Community Housing Provider.

Doroch has sought to break the scale of the building into two distinct elements, with a masonry podium of around four storeys establishing the street edge before the residential tower steps back above.

The corner position has shaped that approach. Cordeaux Street faces toward the commercial and civic centre, while Moore-Oxley Street leads into the lower-scale residential neighbourhood to the south, and the design verification report describes the site as "bridging the commercial core to the north and established residential areas to the south."

The podium will be expressed predominantly in face brick, while the upper levels shift to brushed and grooved concrete cladding with darker metal detailing. Recessed sections, deep balcony edges and landscaping break down the upper form, with an approximately 11.8-metre setback to the northern boundary addressing the adjoining St Peters Anglican School.

<img alt="First look: New 139-apartment plans revive long-stalled Campbelltown city centre site" data-entity-type="file" data-entity-uuid="c8b3d2d3-c561-4bfc-a5d9-a68c0c10dac1" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Campbelltown%20da1.png?VersionId=AeAEyJU02Gk2k5noUj2StziCvdQ7fW4B" />

Campbelltown has been starved of new residential developments in the last decade.

The only other notable development set to come to market this year is ALAND's Queen Square, a mixed-use precinct on over two hectares that will comprise apartments above a vibrant ground-level retail and hospitality dining precinct.

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

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

Queensland builder-developer MAYD has revealed the first look at its major North Kirra beachfront development, lodging amended plans that reduce the number of apartments and increase the proportion of larger residences.

The project is planned across a substantial 4,742 sqm amalgamated site spanning seven lots at <a href="https://www.apartments.com.au/new-apartments/2-6-pacific-parade-bilinga-qld-4225">2-6 Pacific Parade</a> and 27-33 Golden Four Drive in Bilin​ga, directly opposite Nor​th Kirra Beach.

<a href="https://www.apartments.com.au/developers/mayd-group">MAYD</a> secured the site for $32.5 million in 2025, in what was one of the Gold Coast's largest property transactions of the year.

The development will be delivered across two stages, with the first stage carrying an estimated gross realisation value of around $360 million.

The latest amendments seek to reduce the overall apartment count and shift the project further toward the owner-occupier market, with larger residences designed for buyers wanting considerably more space than traditionally offered in a beachfront apartment.

The residential mix will include townhomes, oversized two-bedroom apartments, substantial three-bedroom residences and four-bedroom homes.

MAYD has appointed Cera Stribley to lead the architecture and interiors, with the Melbourne-based design practice drawing on the beachfront setting through a series of ocean-facing terraces and heavily landscaped balconies.

Strong horizontal forms and curved balconies will define the exterior, with subtropical landscaping integrated throughout the building to soften the built form and increase the connection between the residences and the beachfront.

The project will also include an extensive collection of resident wellness and lifestyle facilities, continuing the broader shift across the Gold Coast's luxury apartment market toward larger homes supported by resort-style amenity.

<img alt="MAYD" data-entity-type="file" data-entity-uuid="d1bcbb05-e659-4b47-8bd4-1e595315e2ad" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-27%20at%202.05.03%E2%80%AFPM.png?VersionId=jj0XEud1X1DuLt7_KyElhjMdZGOXmLHP" />

MAYD Founder Todd Mould said North Kirra was increasingly appealing to buyers attracted to the more established, lower-density character of the southern Gold Coast.

"North Kirra presents one of the most compelling luxury residential opportunities currently emerging in Australia, combining absolute beachfront with the character and authenticity that buyers are increasingly seeking, and the same sense of tight-knit community that defined Burleigh and Currumbin perhaps 10 or 15 years ago," Mould said.

"With Gold Coast Airport on its doorstep, it also offers a level of accessibility that broadens its appeal across almost every market demographic."

The project comes as the southern Gold Coast continues to attract an increasing share of high-end apartment development and buyer activity.

Kirra in particular has emerged as one of the region's more tightly held beachfront markets, with its relatively low-density character, established surf and hospitality scene and proximity to Gold Coast Airport differentiating it from the higher-density markets further north.

Mould said those characteristics had informed the approach MAYD and Cera Stribley had taken to the project.

"We've worked closely with Cera Stribley to create a vision that is deeply connected to its surroundings," he said.

"Inspired by the coastline itself, the architecture has been shaped around space, privacy and resort-style living, creating a collection of homes that reflects the next generation of luxury on the southern Gold Coast."

MOTIV Managing Director Carly Cottam, who has been appointed to market the project, said buyer attention had continued to move south along the Gold Coast.

"Purchasers who may once have defaulted to Broadbeach, Main Beach or Surfers Paradise are increasingly recognising the value of a genuine beachfront location that offers lower density, strong amenity and a more established sense of community," Cottam said.

"Kirra has a powerful combination of growing demand and genuine scarcity. Beachfront supply is inherently constrained, the area remains relatively low density, and buyers are increasingly placing a premium on locations that feel established, uncrowded and authentic rather than heavily developed."

Cottam said the proximity to Gold Coast Airport was also proving increasingly important for interstate and second-home buyers.

"Being minutes from Gold Coast Airport makes it particularly compelling for interstate buyers, frequent travellers and second-home purchasers who can access an authentic coastal lifestyle almost immediately after stepping off a flight."

The acquisition takes MAYD's active development portfolio to more than $500 million, with the North Kirra project representing one of its largest undertakings to date.

MAYD is targeting an early 2027 launch.

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

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Castle Hill, the longtime hub of the Hills District, has been one of the major beneficiaries of Sydney's Metro expansion, with improved connectivity helping drive continued population growth, development and buyer demand across the Hills District.

But despite that growth, the suburb has seen relatively few major new apartment projects brought to market over the past 18 months.

Hills District developer Reve Group is looking to fill that gap with <a href="https://www.apartments.com.au/new-apartments/nova-r-ve-castle-hill-2-garthowen-crescent-castle-hill-nsw-2154">Nova Rêve</a>, a major new mixed-use precinct on the corner of Garthowen Crescent and Old Castle Hill Road, a short walk from Castle Hill Metro Station and Castle Towers.

[smartcode_project:default project_id=152737 project_image_fid=377679]

The project will comprise three residential towers alongside a hotel, restaurants, cafes and a skybar, more than 1,600 sqm of ground-floor retail and almost an acre of landscaped gardens.

It represents the largest project undertaken by Reve Group, the development arm of the Kassis family, which has been building across the Hills District for more than 30 years through Kassis Homes.

[smartcode_project:default project_id=152737 project_image_fid=377675]

Nova Rêve also represents a significant step up from the family's first apartment development, Grand Rêve, which was delivered nearby on Garthowen Crescent.

Grand Rêve introduced larger, house-like apartment layouts and premium inclusions including Wolf and Sub-Zero appliances to the Castle Hill market.

Nova Rêve takes that approach to a precinct scale, combining the residential component with hospitality, retail and substantial public and resident landscaping.

[smartcode_project:default project_id=152737 project_image_fid=377685]

Reve Group Managing Director Sam Kassis said the project reflected the family's three decades of building in the Hills, which has evolved from trophy homes on quarter-acre blocks to larger-scale apartment development.

"Grand Rêve was our first apartment project here and it showed us what this pocket of Castle Hill could be. Nova Rêve is the refinement of that idea: not just apartments, but a place the whole suburb can use," Kassis said.

A key part of that approach is the hotel, which has been designed to operate as an amenity for the wider Castle Hill community rather than solely hotel guests.

It will include restaurants, cafes, skybars and all-day dining, alongside conference and event facilities catering to business functions, community groups and private events.

At ground level, more than 1,600 sqm of shops and cafes will open onto the surrounding streets and landscaped areas.

Almost an acre of gardens designed by Land and Form Studios will run through the precinct, incorporating pathways, seating, barbecue areas and children's play spaces.

[smartcode_project:default project_id=152737 project_image_fid=377680]

Reve Group's Romio Georges said creating an active ground plane had been central to the planning of Nova Rêve.

"There are gardens with pathways, barbecues, seating and play areas, shops and cafes opening onto the street, and a hotel with restaurants and a skybar that anyone in Castle Hill can walk into," Georges said.

The project's elevated position on one of Sydney's highest ridgelines will also provide apartments with outlooks toward the Sydney skyline, surrounding parkland and the Blue Mountains.

More than 80 per cent of the apartments will occupy corner positions, with Turner responsible for both the architecture and interiors.

&nbsp;

[smartcode_project_cta:default project_id=152737]

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Nova Rêve arrives as Reve Group bets on Castle Hill's next growth phase

Interest Rates

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GUEST OBSERVER
Our September target for AUD/USD had been 73¢ since we last adjusted our forecasts back in April. At the time the AUD was trading around 79¢. Our year-end target at that time was 72¢, implying a reasonably sized fall through the middle of the year and stability (with downside risk) beyond.
With our September target now achieved, we have decided to lower our year-end target by 2¢ to 70¢ to reflect lower forecasts for global growth and commodity prices and our assessment that markets are largely in denial that the US Federal Reserve is likely to begin raising interest rates in September with a follow up move in December.
When we adopted the end year-end target of 72¢ in April, our contemporaneous estimate of fair value was around 74¢ compared to an actual of 79¢ - a premium of 5¢. (The AUD has traded at a consistent margin above fair value through most of its depreciation in recent years.) At that time our projection of fair value by year end was 69¢, based on our forecasts for commodity prices, interest rate differentials and Australia’s net foreign debt – the key drivers of fair value.
We have recently revised down our outlook for commodity prices and we have also increased our projected net foreign debt, both of which lower fair value. The net effect has subtracted 3¢ from our prior figure, leaving our fair value projection for the end of the year at 66¢.
On the commodity front, in April, when we forecast AUD/USD to reach 72¢ by year’s end we expected the Australian commodities index to reach 188. That has now been revised down to 165 (–12%), with the bulk commodity component forecast falling from 227 to 203 (–11%).
A significant explanation for this downward revision has been our lower forecast for global growth in both 2015 and 2016. The 2015 forecast has been reduced from 3.5% in April to 3.2% and the 2016 forecast has been reduced from 4.1% to 3.6%. Downward adjustments to the growth outlook in the US, China and East Asia have been largely responsible for these changes.
A potential supporting factor for the AUD has been our expectation that market pricing, which had been giving a 60-80% probability of a rate cut by the RBA by year’s end would prove to be unfounded. Recently the market has moved to lower that probability as the Bank appeared to be less committed to a lower exchange rate. The Governor’s statement following the August board meeting omitted the key sentiment around “further depreciation”. 
Prior to August the Bank had been quite successful in assisting the fall in the AUD from 79¢ to 73¢ with a consistent commentary that “further depreciation seems both likely and necessary”. In the August statement the Governor merely noted that the AUD had been adjusting, arguably implying that he was satisfied with its current level.
Pressure for further rate cuts accordingly eased and the currency rebounded almost a cent from its lows, before settling around 73.5¢. This uplift, which was clearly associated with the market’s revision to the outlook for the RBA appears to have now largely run its course.
Moving on to the other major factor at play, the market remains in denial that the Federal Reserve is likely to decide to raise its policy rate at the September 16/17 meeting. Current market pricing is only giving around a 25% probability to a Fed rate hike in September and an 80% probability of one hike by December. We expect hikes in both September and December – events that are likely to give a solid boost to the USD as markets adjust to the “surprise”.
This adjustment is likely to further weigh on high yield currencies such as the AUD as markets begin to alter their expectations about the pace of the narrowing of the interest rate differential between Australia and the US. For example, further out along the curve markets are currently expecting slightly less than three rate hikes by the Fed by the end of 2016. After moves in both September and December markets are likely to scramble to price in at least two more hikes by end 2016, further pressuring the Australian dollar.
We suspect that the potential for this sort of scenario to play out may be influencing the tactical thinking of the RBA. The Bank would see a strengthening of the US dollar as a beneficial trend which would allow for a lower Australian dollar without the need for additional interest rate cuts.
BILL EVANS is chief economist of <a href="https://www.westpac.com.au/" target="_blank">Westpac</a>.
 
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bevans-rYk9SxEa4r

Reserve Bank's eyes on a strong US dollar: Bill Evans

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GUEST OBSERVATION
A widely expected ‘no change’ decision has now been announced over three consecutive months.
There is still the possibility of a further rate cut this cycle and chatter about this prospect will ebb and flow through the remainder of 2015.
A very low mortgage rate environment is very supportive of new home construction activity. The RBA’s signal that they won’t be taking rates higher in 2015/16 is obviously welcome.
Governments can complement the RBA’s current interest rate environment by progressing vital economic and taxation reform. The imperative for supply-side reforms in housing around planning timelines, land supply, infrastructure delivery, and inefficient taxation has never been greater. 
Successful reform outcomes would generate improved economic and productivity growth, greatly assisting the rebalancing of Australia’s economic growth.
The credit rationing to residential investors and higher barriers to new foreign property investment is, however, a different story entirely. These moves will have some adverse impact on new home building activity. 
You wouldn’t want these controls to get out of hand given new home construction is the key driver of domestic growth through the economy’s current rebalancing.
Harley Dale is chief economist at the Housing Industry Association and can be contacted <a href="https://au.linkedin.com/pub/harley-dale/52/bb7/b8" target="_blank">here</a>.
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hdale-dmt8BT4Sf8

Steady RBA rate is only part of the story: HIA's Harley Dale

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What does it all mean?
The biggest change in the text accompanying the interest rate decision were the comments relating to the Aussie dollar. Since May last year the RBA has suggested that the Aussie dollar was too high in relation to commodity prices. In April 2015 the RBA indicated that further depreciation of the Aussie dollar was “likely”. And in recent months it has noted depreciation was “likely and necessary”. In the latest statement the RBA merely says that “The Australian dollar is adjusting to the significant declines in key commodity prices.” 
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<div class="column">That doesn’t mean that the Aussie dollar won’t fall further, but the RBA is seemingly happy with the adjustment that has occurred to date. In other words, the dollar is broadly where it needs to be. </div>
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<div class="column">In terms of the economy, the only real issue is the exuberance by property purchasers in Melbourne and Sydney. Still, banks have lifted interest rates on residential investment loans in response to requests from APRA to restrain investor enthusiasm. At the same time, the supply of residential properties is set to lift in Melbourne and Sydney over the coming 18 months judging by data on council approvals to build new dwellings. The increased supply of homes (new construction) will gradually meet the elevated demand and therefore temper growth in home prices. </div>
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<div class="column">The majority of private sector economists believe that official interest rates will be unchanged over the coming year. However, a small number of economists still believe that there is scope for the Reserve Bank to cut rates again. </div>
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On the economy, the Reserve Bank continues to mull whether the speed limit of the economy has declined: “In Australia, the available information suggests that the economy has continued to grow. While the rate of growth has been somewhat below longer-term averages, it has been associated with somewhat stronger growth of employment and a steady rate of unemployment over the past year.” 
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On home prices, the Reserve Bank is watching developments closely: “Dwelling prices continue to rise strongly in Sydney, though trends have been more varied in a number of other cities. The Bank is working with other regulators to assess and contain risks that may arise from the housing market.” 
<ul>
<li>Perspectives on interest rates </li>
<li>The previous rate cut was in May 2015 (25 basis points), taking the cash rate to a record low of 2.00%. </li>
<li>There have been 10 rate cuts since November 2011. </li>
<li>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% </li>
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<a href="/images/2015/08/04/Screen%20Shot%202015-08-04%20at%203.55.09%20PM.png" target="_blank">Click to enlarge</a>
<img src="/images/2015/08/04/Screen%20Shot%202015-08-04%20at%203.55.09%20PM.png" alt="">
What are the implications of today’s decision?
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We remain on the belief that the Reserve Bank is reluctant to cut rates again, with the central bank questioning whether another rate cut would actually give the economy a boost or whether it would be counter-productive. If the Reserve Bank was to cut interest rates again – and it wasn’t in response to a major negative event – then it may very well be the case that many Australians would become less, rather than more, confident, questioning just how bad the economy really was if further rate cuts are deemed necessary. 
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<li>
Residential property investors need to do their homework. Some lenders have lifted interest rates; other lenders have retreated either in part or in full from the residential investment property market. At the same time, a large number of apartment projects are underway across the country, especially in Melbourne and Sydney. 
</li>
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Those seeking a return on cash investments also have homework to do to ensure they are receiving the best returns available. 
CRAIG JAMES is the chief economist at <a href="https://www.comsec.com.au/default.aspx" target="_blank">CommSec</a>.
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Biggest change from RBA on Aussie dollar: Craig James

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GUEST OBSERVER
As expected the Reserve Bank Board decided to leave the cash rate unchanged at 2.0%.
However, we were very surprised that in the Governor’s statement on the Australian dollar he did not repeat the sentence “Further depreciation seems both likely and necessary”. Since he introduced that language in May, the AUD has fallen from USD0.787 to USD0.728. This strategy had proved to be quite successful in ‘talking down’ the Australian dollar.
It was reasonable to expect that the strategy would be repeated given that even at USD0.728 the AUD was still above most estimates of fair value. However, the Governor’s statement was scaled back to merely observe that “The Australian dollar is adjusting to the significant declines in key commodity prices”. It is reasonable that markets will interpret this comment as indicating that the Bank no longer sees further depreciation of the AUD as “likely and necessary”.
This perception will impact market pricing for both the AUD and the outlook for interest rates. It is reasonable that a key explanation for markets pricing in around a 60% probability of a rate cut by November is the expectation that the Bank would continue to openly discuss the possibility of rate cuts. A key motivation behind cutting rates would be to further lower the AUD. That motivation now seems to have dissipated.
As we did expect, there are very few additional changes to this statement. The Bank remains confident that inflation will remain consistent with the target over the next one or two years and also notes that the economy is likely to be operating with a degree of spare capacity for some time yet.
In July, we noted that the Governor commented that the unemployment rate had been little changed recently and this was emphasised once again, noting somewhat stronger growth in employment and observing that the unemployment rate had been steady now over the past year. In a recent speech the Governor raised the issue that trend growth in the Australian economy may be lower than 3-3.25% partly explaining the stable unemployment rate despite growth only being 2.5%.
Despite recent evidence of rapid house price growth in both Sydney and Melbourne there was no elevated concern around the house price issue. Strong price rises were noted in Sydney with the qualification that trends were more varied in other cities.
Recent increases in interest rates for housing investors were not noted although the observation that the Bank was working with regulators to contain risks was repeated.
There was a mild surprise in the observation that weaker commodity prices largely reflected increased supply given that softer demand conditions must also be a relevant factor.
Finally, the Bank repeated its expectation that the Federal Reserve will start increasing its policy rate later this year. That move of course is likely to contribute to slowing down any recovery in the AUD that might come as a result of the markets’ perception that the RBA is no longer calling for a lower AUD. The Fed’s decision will be known by 17 September although markets are likely to become more focussed on that event than is currently the case where only a modest probability is given to a Fed move at that time.
Outlook
Clearly there is nothing in this statement that would motivate us to move away from our call that rates will remain on hold in 2015 and through the course of 2016.
As discussed, less urgency around the AUD weakens one argument for lower rates in 2015, although if the RBA observes a very strong market response then it may need to reinstitute its successful strategy at the September and/or October statements.
BILL EVANS is chief economist of <a href="https://www.westpac.com.au/" target="_blank">Westpac</a>.
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RBA Governor's statement scaled back on dollar: Bill Evans

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GUEST OBSERVER
Going in to today’s meeting, economists and market participants were in agreement that rates would be left unchanged. As such, there was no surprise in the RBA’s decision to leave the cash rate unchanged at 2.0%.
There were a number of familiar themes in the Governor’s accompanying Statement. Indeed, a large chunk of the Statement was left unchanged from the July Statement (see page 2 for a comparison).
There was a distinct lack of forward guidance with the Bank noting, like last month, that “information on economic and financial conditions to be received over the period ahead will inform the Board's assessment of the outlook and hence whether the current stance of policy will most effectively foster sustainable growth and inflation consistent with the target”. In other words, another rate cut has not been ruled out. But equally, the RBA doesn’t have an explicit easing bias. What we previously described as a soft implicit easing bias has been further watered down by a change in narrative around the labour market and AUD.
The Bank has clearly become more comfortable with conditions in the labour market. After refraining from commenting on the labour market in last month’s statement, Governor Stevens stated that below trend growth, “has been associated with somewhat stronger growth of employment and a steady rate of unemployment over the past year.”
The previous mantra around AUD depreciation seeming likely and necessary to foster growth was noticeable in its absence. Instead, the Governor simply noted that, “the Australian dollar is adjusting to the significant declines in key commodity prices.” In our view, the change in rhetoric on the exchange rate is likely to reflect the Bank’s assessment that the AUD is trading in the ‘sweet spot’. That is, it’s now low enough to help the Australian economy rebalance, but not so low that is poses a risk to the inflation outlook.
The outlook
We have had a 2% terminal cash rate target for a while now and that remains our base case. Steven’s declaration two weeks ago that further rate cuts remain, “on the table” was hosed down when he said that, “it is not quite good enough simply to say that evidence of continuing softness should necessarily result in further cuts in rates, without considering the longer-term risks involved.”
The change in language today on the AUD and labour market was telling. The RBA would need to see conditions deviate from where they are now to pull the interest rate trigger again. Our take is that further monetary policy easing will be data dependent. This means that the recent strength in the labour market, coupled with a lift in a range of leading indicators, makes a near term rate cut look unlikely.
The focus now turns to Thursday’s employment report and the August Statement on Monetary Policy (SMP), published on Friday. In our view, the RBA is likely to leave its growth and inflation forecasts unchanged. Mechanically a lower AUD means some upside risk to growth and inflation forecasts. But these are likely to be tempered by a bigger than expected fall in the terms of trade. These opposing forces are likely to cancel each other out. 
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The RBA left the cash rate unchanged at a record low of 2.0% at the August meeting. 
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<div class="column">Gareth Aird is economist at Commonwealth Bank and can be contacted <a href="https://www.propertyobserver.com.au/https://au.linkedin.com/pub/gareth-aird/14/790/905" target="_blank">here</a>.</div>
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No surprise in the RBA’s August decision: Gareth Aird

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The Reserve Bank of Australia (RBA) has kept the official cash rate at 2.0% for August.
CoreLogic RP Data head of research Tim Lawless said rather than lifting interest rates in an effort to slow down the pace of appreciation in Sydney and Melbourne home values, the RBA will be looking towards recent prudential supervisory activities by APRA to dampen investment demand.
"We are expecting investor demand will start to moderate as investment loans are both more difficult and costly to obtain," Mr Lawless said
"Additionally, the cumulative effect of low rental yields, worsening affordability, record levels of new dwelling construction and the maturity of the growth cycle are likely to act as a disincentive to any further acceleration in investment demand across Sydney and Melbourne, despite the steady interest rate environment.
"With dwelling values continuing their stellar run of growth through July, the housing market was likely to be a key topic of conversation for the Reserve Bank when they deliberated the cash rate today. Australian regulators, including the RBA and APRA, were probably hoping to see value growth in the housing market decelerating during the winter months, however the opposite has been true in Sydney and Melbourne."
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mick.cee-iDmgDDAmu8

RBA keeps rates on hold at August meeting

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Governor of the Reserve Bank, Glenn Stevens August 2015 statement.
At its meeting today, the Board decided to leave the cash rate unchanged at 2.0 per cent.
The global economy is expanding at a moderate pace, but some key commodity prices are much lower than a year ago. Much of this trend appears to reflect increased supply, including from Australia. Australia's terms of trade are falling nonetheless.
The Federal Reserve is expected to start increasing its policy rate later this year, but some other major central banks are continuing to ease policy. Hence, global financial conditions remain very accommodative. Despite fluctuations in markets associated with the respective developments in China and Greece, long-term borrowing rates for most sovereigns and creditworthy private borrowers remain remarkably low.
In Australia, the available information suggests that the economy has continued to grow. While the rate of growth has been somewhat below longer-term averages, it has been associated 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. Recent information confirms that domestic inflationary pressures have been contained. That should remain the case for some time, given the very slow growth in labour costs. Inflation is thus forecast to remain consistent with the target over the next one to two years, even with a lower exchange rate.
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, though trends have been more varied in a number of other cities. The Bank is working with other regulators to assess and contain risks that may arise from the housing market. In other asset markets, prices for equities and commercial property have been supported by lower long-term interest rates. The Australian dollar is adjusting to the significant declines in key commodity prices.
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.
 
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Sydney property rising strongly: RBA Governor Glenn Stevens' August 2015 statement

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Property investors are urged to brace for higher housing prices despite experts tipping the Reserve Bank to leave the cash rate at 2.00% ahead of its board meeting on Tuesday, August 4, 2015.
Experts who responded to the finder.com.au <a href="https://www.finder.com.au/rba-cash-rate" target="_blank">Reserve Bank Survey </a>suggested given the latest two rate cuts in February and May are yet to filter through the economy and with unemployment stable, the Reserve Bank has no reason to move the cash rate in August.
31 economists and property experts were surveyed and unanimously agreed the RBA will hold rates at 2.00%.
19% of the experts surveyed forecast a rate cut by the end of the year, with Mark Crosby from the Melbourne Business School and Peter Boehm from onthehouse.com.au expecting the cash rate to rise in the last quarter of 2015.
55% believe the cash rate will start rising next year and 39% consider there will be long stability before the cash rate will start rising beyond 2016.
Finder.com.au money expert Michelle Hutchison said while we may not see another rate cut this year, it’s still likely that property prices will continue to rise, which means higher costs for new borrowers.
 “According to the finder.com.au Reserve Bank Survey, the majority of experts surveyed (21 or 68%) are expecting property prices will keep rising this year, while almost one in five (six of 19%) believe property prices will remain at the same level for the remainder of 2015. For the hottest property market in Australia, almost one in five experts (19%) believe the Sydney property market won’t ease for the next few years, while 61% expect it to ease next year and five experts think it could be as early as this year," Michelle said. 
“Despite this, the vast majority (81% or 25 of the 31 experts surveyed) believe there is no housing bubble. However 5 experts (16 percent) expect the housing bubble will burst within the next 18 months. One of the experts – Shane Oliver from AMP – said there is one housing bubble in Sydney and it’s likely to start reversing in 2017.
“We’re expecting more borrowers to start hitting the market in spring, which is traditionally the busiest time for the property and home loan markets. If you’re planning to hit the market this mortgage season, be careful with your budget as it won’t be worth over-stretching yourself in the heat of the moment to buy a home when rate rises are also around the corner.”
 
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Experts tip RBA will keep rate at 2%: Finder.com.au

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The Reserve Bank Board meets on August 4. We expect the Board will decide to keep rates on hold. 
Markets are in full agreement with this view with only a negligible probability of a rate cut being priced in. 
It is a different story for November with market pricing oscillating between 60% and 80% probability of a cut by then. 
With this in mind, attention will focus on the Governor’s decision statement, released at 2:30pm on August 4, and the Statement on Monetary Policy which will print at 11.30am on August 7. 
We are not expecting any surprises in the Governor’ statement. He has finally found the right approach to ‘talking down’ the Australian dollar with the language:
 “Further depreciation seems both likely AND necessary, particularly given the significant declines in commodity prices”. He first used that sentence in May when the AUD was around USD 0.787; followed up in June (USD 0.7682) and then in July (USD 0.744). 
Now at USD 0.73 the AUD has certainly not fallen sufficiently for the Governor to abandon a successful strategy. Further, we suspect that the key reason behind his referring to potential further easing (“We remain open to the possibilities of further easing if that is, on balance, beneficial for sustainable growth”) in speeches is also a desire to maintain downward pressure on the Australian dollar. 
The forecasts for growth and inflation presented in the Statement on Monetary Policy will be of critical interest. 
Recall that in February this year the Bank adopted an approach of assuming ‘market pricing’ for the cash rate profile. At the time the market had a near 100% probability of a further rate cut by June to complement the cut in February. Markets could be excused 
for interpreting that change of approach as, in effect, franking its pricing for another rate cut. The Bank repeated the approach in its May Statement on Monetary Policy, when market pricing only had a 40% probability of a follow-up cut by year’s end price in – not a high enough probability to encourage speculation. 
Next week, with markets pricing in a 65% probability of a further rate cut by year’s end and an 80% probably of a move by early next year, considerable attention will be given to whether the assumption of market pricing is retained. I expect that for the purposes of continuity the Bank will retain the market pricing assumption but would not interpret this as any kind of signal. 
On the other hand, if the Bank drops that assumption, it would be a most discouraging signal for those folks expecting a near term rate cut. 
Note that in the May Statement on Monetary Policy the Bank forecast that underlying inflation would centre around 2.25% in 2016. Apart from during the depths of concerns around the Global Financial Crisis in 2009, this is the first time since the Bank started publishing forecasts that it has forecast underlying inflation to be below than the midpoint of the target range in the next calendar year.
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This is surely a very dovish signal from the authorities. Even though the AUD has fallen from USD 0.80 (the assumption used for its inflation and growth forecasts in May) to USD 0.73 I expect that the Bank will retain its dovish inflation forecast. 
The other risk is around the Bank’s assessment of trend growth. 
As discussed in last week’s note the Governor indicated that the Bank would be reviewing its assumption of trend growth, which has generally been assessed as 3–3.25%. 
Australia has been consistently growing below that pace since the GFC. The assessed negative output gap has weighed on inflation. If however, the trend growth rate was, say, 2.75% then the negative output gap would be smaller and disinflationary pressures less intense. Theoretically, all else being equal, that would imply a need to raise the inflation forecasts. 
We expect that the Bank may make that adjustment in future but not in the next Statement on Monetary Policy. 
Recall that the growth forecasts are currently 2.5% for 2015 and 3.25% for 2016, down from 2.75% and 3.5% respectively in the February Statement. 
Since May the data releases around the real economy have generally been disappointing. In particular the March quarter national accounts and the March quarter Capex survey have revealed a weaker than expected investment profile for both mining and non-mining and no evidence of a recovery in the downbeat 2.5% annualised pace of consumer spending. 
The ‘sticker shock’ effect of further lowering the 2015 forecast seems too high to consider but it does seem likely that the growth forecast for 2016 will be reduced to 3%. 
Policy will be targeted on growth in 2016. At 3%, growth would still be assessed at ‘around’ current estimates of trend and would still be consistent with no policy change. 
However, markets might seize on the disturbing downtrend in the 2016 growth forecasts and speculate on a ‘below trend’ forecast for 2016 in the November Statement on Monetary Policy. 
That would not be a good strategy. 
By then the Bank is likely to have adopted a lower trend growth assumption (say 2.5–2.75%). Even with a further downward revision to the growth forecast in 2016, from 3% to 2.75%, this would still be at or above the newly assessed trend precluding the need for a policy response. 
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BILL EVANS is chief economist of <a href="https://www.westpac.com.au/" target="_blank">Westpac</a>.
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RBA will hold: Westpac's Bill Evans

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Latest figures from HSBC's global research team expect the Reserve Bank to keep rates on hold next week in order to further stabilise growth and keep a lid on asset prices.
Recent moves by APRA to slow investor lending will begin to take effect in the next few months, according to Paul Bloxham, chief economist of HSBC, with concerns the benefits of cutting rates further could be outweighed by the costs. 
"The prudential regulator is now requiring banks to hold more capital and, to this end, has announced that mortgage risk weightings will be increased for the major banks from approximately 16% currently to at least 25% by 1 July 2016," Mr Bloxham said. 
"The banks are responding to the APRA’s increased scrutiny by toughening up requirements for investor mortgages. Actions taken so far have included lifting interest rates on investor loans, imposing limits onmaximum loan-to-value and increasing servicing requirements."
"We expect the cash rate to be held steady at 2.00% next week and for the RBA to repeat its emphasis on the need for the AUD to fall to assist the ongoing rebalancing of growth."
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