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

Joel Robinson

The Eveleigh brings house-like apartments to Broadbeach

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

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

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

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

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

<main data-perf-region="main">
Castle Hill, the longtime hub of the Hills District, has been one of the major beneficiaries of Sydney's Metro expansion, with improved connectivity helping drive continued population growth, development and buyer demand across the Hills District.

But despite that growth, the suburb has seen relatively few major new apartment projects brought to market over the past 18 months.

Hills District developer Reve Group is looking to fill that gap with <a href="https://www.apartments.com.au/new-apartments/nova-r-ve-castle-hill-2-garthowen-crescent-castle-hill-nsw-2154">Nova Rêve</a>, a major new mixed-use precinct on the corner of Garthowen Crescent and Old Castle Hill Road, a short walk from Castle Hill Metro Station and Castle Towers.

[smartcode_project:default project_id=152737 project_image_fid=377679]

The project will comprise three residential towers alongside a hotel, restaurants, cafes and a skybar, more than 1,600 sqm of ground-floor retail and almost an acre of landscaped gardens.

It represents the largest project undertaken by Reve Group, the development arm of the Kassis family, which has been building across the Hills District for more than 30 years through Kassis Homes.

[smartcode_project:default project_id=152737 project_image_fid=377675]

Nova Rêve also represents a significant step up from the family's first apartment development, Grand Rêve, which was delivered nearby on Garthowen Crescent.

Grand Rêve introduced larger, house-like apartment layouts and premium inclusions including Wolf and Sub-Zero appliances to the Castle Hill market.

Nova Rêve takes that approach to a precinct scale, combining the residential component with hospitality, retail and substantial public and resident landscaping.

[smartcode_project:default project_id=152737 project_image_fid=377685]

Reve Group Managing Director Sam Kassis said the project reflected the family's three decades of building in the Hills, which has evolved from trophy homes on quarter-acre blocks to larger-scale apartment development.

"Grand Rêve was our first apartment project here and it showed us what this pocket of Castle Hill could be. Nova Rêve is the refinement of that idea: not just apartments, but a place the whole suburb can use," Kassis said.

A key part of that approach is the hotel, which has been designed to operate as an amenity for the wider Castle Hill community rather than solely hotel guests.

It will include restaurants, cafes, skybars and all-day dining, alongside conference and event facilities catering to business functions, community groups and private events.

At ground level, more than 1,600 sqm of shops and cafes will open onto the surrounding streets and landscaped areas.

Almost an acre of gardens designed by Land and Form Studios will run through the precinct, incorporating pathways, seating, barbecue areas and children's play spaces.

[smartcode_project:default project_id=152737 project_image_fid=377680]

Reve Group's Romio Georges said creating an active ground plane had been central to the planning of Nova Rêve.

"There are gardens with pathways, barbecues, seating and play areas, shops and cafes opening onto the street, and a hotel with restaurants and a skybar that anyone in Castle Hill can walk into," Georges said.

The project's elevated position on one of Sydney's highest ridgelines will also provide apartments with outlooks toward the Sydney skyline, surrounding parkland and the Blue Mountains.

More than 80 per cent of the apartments will occupy corner positions, with Turner responsible for both the architecture and interiors.

&nbsp;

[smartcode_project_cta:default project_id=152737]

<h3 data-end="3697" data-section-id="q3n5ak" data-start="3672">&nbsp;</h3>
</main>

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

Interest Rates

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The Reserve Bank of Australia (RBA) has chosen to leave the overnight cash rate at 2.5% for September.
Australia's cash rate has remained at the record low level since August 2013.
The RBA's decision to leave rates on hold was widely anticipated by industry members, with <a href="/expert-insights/finance/experts-predict-no-interest-rate-change-tomorrow-finder">all 25 experts surveyed by Finder this month</a> predicting that rates would remain unchanged.
John Caelli, general manager of markets at ME Bank predicts that rates won't change until next year.
“The next change is likely to be a rate rise of 25 basis points in the first half of 2015. It’s likely rates will be lifted to less than the normal levels of the past, closer to 4% than 5%," says Caelli.
According to RP Data research director Tim Lawless, the RBA is likely to keep rates at 2.5% in the coming months.
"With inter quarter measures of inflation indicating consumer prices aren’t rising rapidly, it is likely that the RBA will continue to hold interest rates at their current level for the foreseeable future," predicts Lawless.
"With this week marking the beginning of spring, the housing market will come under increased scrutiny to see if the seasonal surge in spring listing numbers is accompanied by an uplift in mortgage demand and buyer numbers.
"The latest indicators show that vendors remain firmly in the driver’s seat, with auction clearance rates averaging in the high 60% to low 70% range week on week and private treaty sales continuing to show a reasonably rapid pace of sale," he notes.
The Real Estate Institute of Australia's president Peter Bushby believes that given July's unemployment rate rise from 6.0% to 6.4% on a seasonally-adjusted basis, low interest rates need to continue to stimulate confidence among buyers.
“Fears around unemployment are a major contributor to a decline in confidence amongst first home buyers,” Bushby says.
"According to Genworth, the First Home Buyer Confidence Index slipped from 85.0 in September 2013 to 82.3 in March 2014 – the lowest level since 2007 – with uncertainty about future employment being given as the biggest barrier to buying a first home after affordability and the deposit gap."
Kirsty Lamont, director of banking and insurance comparison website Mozo, predicts that rates will stay on hold for the rest of the year.
"A total of 56 lenders have slashed their fixed rates since CommBank kicked off the rates war in late July, and the dust has now settled. We've now hit the bottom of the current fixed home loan rates cutting cycle," Lamont says.
"The rates on the market right now are as good as they're going to get this year, so if you're thinking about fixing now is definitely the time to do so."
According to Lamont, 56 lenders have decreased their fixed rate home loans since 23 July.
Photo courtesy of Newtown grafitti/<a href="https://creativecommons.org/licenses/by/2.0/" target="_blank">Creative Commons</a>.
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jrichardson-uRX5hFdKfN

RBA leaves rates unchanged for 13th month

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GUEST OBSERVATION
Over the past year, the Reserve Bank has elected to hold interest rates at an unprecedented low level a level which I’ve never seen during my 42 years practicing real estate.
This has had a marked impact in the property market as historically, continuous periods of low interest rates tend to drive interest in property as an asset class. This is an effect we’ve observed over the past two and a bit years and a contributing factor to the property markets sustained recovery, with the market achieving 15.5% growth since the trough in May 2012.
The Australian property is now entering a very steady adjustment and growth mode driven by the shift to a market where buyers and sellers negotiate a fair price for a property – not one driven by vendor’s expectations.
Despite this, <a href="/expert-insights/buying/moody-s-says-property-market-may-be-overheating-and-could-face-a-correction">Moody’s recently warned of a growing risk</a> of an overheated Australian property market developing into a real estate bubble, driven by low interest rates and growing interest from offshore investors.
My reaction to this is simple: If the Reserve Bank suddenly raises interest rates suddenly and steeply, it will almost certainly look like we’re in a ‘bubble’.
Similarly, if the world was to experience another global financial crisis, it’s likely that many property markets across the world will look overvalued.
At times such as this, it’s important to remember that in the right situation, almost anything could be deemed in a bubble, but it’s currently unlikely that either of these scenarios will eventuate and push the Australian property market in to bubble territory.
However, I would caution investors, home owners and prospective buyers to budget for the effect any interest rate movements could have on their finance. This is because while interest rates are currently steady at 2.5%, it’s unlikely they’ll stay this low forever.
Buyers who fail to budget for the impact of any potential interest rate increases may find themselves in financial difficulty should the Reserve Bank’s next interest rate movement be upwards.
Charles Tarbey is chairman and owner of <a href="https://www.century21.com.au/" target="_blank">Century 21 Australasia</a>.
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ctarbey-W47GL9jwxa

Unprecedented low interest rates won't last forever

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Interest rates have been on hold at record low levels for more than a year now and experts predict there will be no increases for several more months to come.
But when rates turn, they can move quickly and borrowers should be prepared.
The Reserve Bank of Australia cut rates from 7.25% in August 2008 to 3% in April 2009 in a rapid response to the financial crisis. At the start of the recovery, official interest rate rose from 3% up to 4.5% in the eight months to May 2010.
Interest rate movements can still be volatile but the highs and lows have smoothed out over the past 20 years. Rates are now generally lower than they were. In the early 1990s and before the official cash rate was 17%. Fortunately for mortgage holders, economists agree it’s unlikely the RBA will need to lift interest rates as high as that again.
“The key driver of that story is that inflation is now much lower than it was in that earlier period,” says HSBC chief economist Paul Bloxham.
In the 1970s and 1980s, inflation was running at around 7 to 8%. Now it is between 2 and 3% and Bloxham says these lower inflation rates are expected to persist.
“That’s four to five percentage points that have come off interest rates because inflation is much lower than it was,” Bloxham says.
The RBA uses the short-term interest rate to try to control growth in the economy and keep demand increasing in line with supply. When the economy is weak, the RBA lowers the official interest rate to try to boost demand and when it is too strong, it lifts the interest rate to slow things down.
“They only have the interest rate to do that. They use the cash rate and yes, they have been successful,” Bloxham says.
BetaShares chief economist David Bassanese agrees.
“[The RBA] can achieve an increase in the real interest rate – that is the nominal interest rate less inflation - with a lower nominal rate,” he says.
Expectations of inflation have lowered since the 1990s which in itself slows the inflation rate, Bassanese says.
Labour and product markets are more open to trade and more competitive than they used to be. Competition and deregulation helps keep prices down and reduces demand for wage rises.
“You can get a situation where pockets of strength like in the mining sector don’t flow through to other sectors as easily as they did in the past because it’s much more deregulated,” Bassanese says.
The outlook for energy prices is more benign now than it was in the past, which will also help to keep inflation under control, Bassanese says.
In the 1970s and 1980s, world economies faced oil price shocks, which hit inflation rates. The price of oil for energy skyrocketed in the 1970s due to shortages sparked by tensions in the Middle East. That led to a slowdown in world economic growth in the 1980s, which in turn resulted in a glut of oil that caused oil prices to plunge.
“The other issue is that households now have a lot more debt,” Bassanese says. “Household debt to income has gone from 50% to 150% over the past couple of decades so now interest rate changes have a much bigger impact.”
Households are much more sensitive to interest rate changes, so the RBA doesn’t have to move them around as much as in the past to influence consumer behaviour.
Global factors are also having an effect on Australia’s interest rates, Bloxham says.
Interest rates in the rest of the world are much lower than they have been in the past, particularly since the global financial crisis. They are expected to stay lower, which will also help the RBA to keep Australia’s cash rate down.
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zfielding-GvX3Uq9KTa

Borrowers need to prepare for interest rate movements

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All 25 experts surveyed by finder.com.au expect the Reserve Bank of Australia (RBA) to keep the overnight cash rate on hold this month.
The RBA has held the cash rate at a record low of 2.5% since August last year. More than half of the experts surveyed predicted that the next interest rate change will come in the second half of 2015, including Property Observer's Jonathan Chancellor.
Only one respondent, Nicki Hutley of Urbis, expects a rise as early as December this year.
“The Australian economy is still seeing growth a little below par," said Hutley. "Inflation is picking up but not yet alarmingly so... so the RBA won’t be in any hurry to move."
"A first rate rise is likely to occur either in December or the new year," she told <a href="https://www.Finder.com.au" target="_blank">Finder.com.au</a>. Of the 25 respondents, 10 surveyed expected an increase would come in the first half of 2015.
The experts surveyed include representatives  from AMP, ANZ, Bank of Queensland, Moody's Analytics and Commsec. James Bond of the Financial Services Council said uncertainty in recent economic indicators will see the RBA hold rates.
"The RBA will wait to see how employment and wages pan out over the next six months before they make a move either way," said Bond.
"The usual tightening cycle that we would expect has been pushed out by uncertainty in the some of the data.”
Janu Chan of St George Bank also believed that the RBA would wait for more solid evidence of an economic recovery.
"The RBA will probably want to see some stronger evidence that the recovery is strengthening before they raise interest rates," Chan said.
"We think the RBA is done cutting rates so the next move we expect will be a hike."
ING Direct's Michael Witts predicted a 25 basis point increase in the first six months of 2015.
"The Bank is trying to balance the strength of the housing and related sectors," said Witts.
"Equally it is mindful that any near term move in interest rates will see the Australian dollar move higher."
To see each expert's prediction, go to the next page.
<hr class="system-pagebreak">
Click to open in new window:
<a href="/images/2014/09/01/finder-sept-1-one.jpg" target="_blank"></a>
<a href="/images/2014/09/01/finder-sept-1-one.jpg" target="_blank"><img src="/images/2014/09/01/finder-sept-1-one.jpg" alt=""></a>
Source: finder.com.au
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Experts predict no interest rate change tomorrow: Finder

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Low interest rates working?
A survey of 23 economists this week showed all 23 of them to believe that the interest rate easing cycle is over, albeit few are expecting hikes any time soon.
A key reason for that is doubtless that lending rates have actually been falling independently of official cash rate decisions made centrally by the Reserve Bank.
Personally I still wonder whether this will be enough, particularly when viewed in the light of an iron ore price which has crashed by 35% in 2014 and a stubbornly high Aussie dollar.
On the flip side, there is some evidence to suggest that low interest rates are having an impact in other areas of the economy in spite if the declining terms of trade.
Consumer confidence is set to rebound above is long term average, retail sales are expected to resume their upwards trend by growing by 0.4% in July and yesterday's capex survey showed that away from mining and resources there are signs of life in the larger services sector of the economy.
For the time being at least interest rates will be stuck on hold until further evidence comes to light.
Financial Aggregates show investor credit growth
The Reserve Bank released its <a href="https://www.rba.gov.au/statistics/frequency/fin-agg/2014/fin-agg-0714" target="_blank">Financial Aggregates data</a> for July today which revealed that easy monetary policy is gradually impacting credit aggregates.
In the year to July 2014 total business credit has spluttered 3.4% higher and personal credit has increased by 0.8%.
Housing credit rose by another 0.5% in July to be a strong 6.5% higher over the year, clear evidence that cheaper credit is set to drive housing markets higher.
<img src="https://2.bp.blogspot.com/-qSVs1pstm5M/VAAwrYJI7sI/AAAAAAAAPYY/SAd8XWcGy5U/s1600/RBA1.jpg">
The gradient of the red line in the chart below shows that housing credit for investors has been outstripping that of credit for owner occupiers over the past year:
<img src="https://3.bp.blogspot.com/-hWwFikc_JCw/VAAwsYVrJII/AAAAAAAAPYg/Sy-4YfSPVKI/s1600/RBA3.jpg">
In terms of annual percentage credit growth the data shows that the housing credit growth rebound has been driven largely by investor credit which has increased by 8.8% over the past 12 months as compared to a 4.8% increase in owner occupier credit.
<img src="https://1.bp.blogspot.com/-pYUrXLAgWdM/VAAwsEDlyjI/AAAAAAAAPYk/cNgjgbqtpLs/s1600/RBA2.jpg">
When smoothed on a rolling annual basis below, the data becomes clearer with the red line denoting a strong uplift in investor credit.
Of course, percentage credit growth is nowhere near as high as it was in decades gone past, but since it is the transaction of dwellings at the margin which drive the market property prices have rebounded very strongly since 2012 and are heading higher still.
<img src="https://3.bp.blogspot.com/-ptfHOAYyNZE/VAAwsuAZcbI/AAAAAAAAPYo/s2lEJtX-e7A/s1600/RBA5.jpg"> 
As a percentage share of housing credit, investor credit has ticked higher again, now representing 33.8% of the total. Interestingly this is exactly the same percentage share of housing credit in the RBA's Financial Aggregates data that we saw a decade ago in July 2004.
<img src="https://2.bp.blogspot.com/-Be87eDNQd-k/VAAws0GGdvI/AAAAAAAAPYs/X4lMYebEjYs/s1600/RBA6.jpg">
Outperforming property types and location
The data continues to imply to us that the property types which will ultimately outperform in this cycle include those which are strongly favoured by investors, particularly well-located properties in Sydney. 
Our previous analysis of rolling 12 monthly investor loans by state has clearly shown that Sydney will be the king of price growth in this period of the cycle:
<img src="https://2.bp.blogspot.com/-8H-Co34r7zk/VAA3WW0QA9I/AAAAAAAAPZQ/34ZBTeQKW9A/s1600/LENDING.jpg">
When you factor in the increasing demand from offshore or Australian real estate which is not well captured in reported data, the bias in favour of Sydney becomes all the more compelling.
The latest statistics from <a href="https://www.rebonline.com.au/blog/8077-what-do-china-s-real-estate-bosses-really-think-of-australia?utm_source=Real+Estate+Business&amp;utm_campaign=Real_Estate_Business_Bulletin29_08_2014&amp;utm_medium=email" target="_blank">Juwai</a> denoted that the favourite locations for Chinese buyers fall in the following order: Sydney, Melbourne, Brisbane. Perth and the Gold Coast.
As the terms of trade have declined dramatically we expect the Australian dollar to fall further from its current elevated point, which may drive significant further demand from offshore.
In this property market cycle, we are following that demand and have thus focused on Sydney real estate. 
Recent property market forecasts from analysts have suggested that the currently property market cycle has another two years to run which fits in tidily with what we have heard from major developers. 
BIS Shrapnel recently forecast price growth of 6 percent per annum for Sydney apartments through to 2016.
You can visit <a href="https://allenwargent.com/" target="_blank" rel="nofollow">AllenWargent</a> property buyers (London, Sydney) or Pete's <a href="https://petewargent.blogspot.com/" target="_blank" rel="nofollow">blog</a>.
His latest book is '<a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx" target="_blank" rel="nofollow">Four Green Houses and a Red Hotel</a>' .
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Which property types and locations are overperforming?

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It’s hardly surprising that the Reserve Bank of Australia (RBA) decided to park the cash rate indefinitely, given the complexities associated with Australia’s fascination of owning real estate. 
When one looks closely at the RBA data, our household debt has now climbed to a record $1.870 trillion. Its cause has certainly not been assisted by the avalanche of "<a href="/expert-insights/autopilot-investing-a-major-problem-for-the-property-market">autopilot investors</a>" which led the RBA to announce this week that it has concerns about ‘significant’ uncertainty.
Of great concern globally, is that all the central banks presently have their respective cash rates parked at close to zero which has resulted in even greater debt, even though growth keeps trending well below expectations. It is becoming quite clear that those who subscribed to the modern theory that short-term pain would be exceeded by significant long-term gains, have been proved wrong. When growth is trending at below expectation levels, so too are wages, which is why Australia has a ‘significant’ problem. It reminds me of the saying: 'After all, life is really simple, we ourselves create the circumstances that complicate it.'
Once upon a time cash was king – today, debt is king. If you cast your minds back to last year when RBA governor Glenn Stevens addressed the Wall Street Journal he said recession in Australia has a “more or less” 100% probability; only timing is uncertain. It has become clear that a record low cash rate for many has become a 'fool's gold'. Having said that, the money lending market has expanded to unprecedented levels with Coles and Woolworths the latest to apply for entry into the home lending markets.
When one looks a bit deeper into the demographic property markets (over bundling them all together to hide the weak performers) the top end markets have clearly demonstrated a much more cautious outlook. Without a doubt they were the hardest hit during the global financial crisis (GFC) although this time around they are throwing caution to the wind.
I would not be alone by saying the eagerly awaited detailed release of the Murray financial system will make for riveting reading given it is the first inquiry in over 17 years for the property industry – which is absolutely ridiculous. It’s already been announced that the former CBA chief wants to “leave his mark” by setting stringent lending guidelines as against the current format of the 'Big Four' banks boasting who has the greatest market share in Australian property – combined they hold nearly 80% of the overall debt.
<img src="/images/2014/08/25/simeon%20aug%2025%20one.jpg" alt="">
When the RBA does decide to raise the cash rate there will be a tsunami of bad debt which explains the latest RBA decision to park the Australian property market (for the time being). Globally the property markets are cactus – Alan Kohler wrote a great piece this week – '<a href="https://www.businessspectator.com.au/article/2014/8/18/global-financial-crisis/world-must-inflate-or-bust-australia-mustnt-join" target="_blank" title="The world must inflate or bust; Australia mustn’t join in.">The world must inflate or bust; Australia mustn’t join in</a>'. “The world’s central banks are overly trying to increase inflation because it’s the only realistic solution for the world’s (still) excessive debt, and the Reserve Bank of Australia will soon have to decide whether to join in or bear down on inflation with relatively higher interest rates.”
“A central banker on one panel noted that, in his view, too much is being asked of monetary policy; the main thing that low interest rates and quantitative easing are producing at the moment is more risk taking by financial institutions.
“That’s the problem with too much debt: the only easy solution is more debt, which is no solution at all.”
I have never been a fan of mortgagee in possession sales as they clearly demonstrate a panic mentality which inevitably results in heartbreak together with considerable capital losses. Having worked through the boom of the late 80s and then the “recession we had to have” in the early 1990s, we don’t appear to have learnt much.
I would prefer to see when a home owner is deemed to be in financial difficulty that the property (principal place of residence only) is placed into quarantine for five years. When the property value recovers only then is it sold – with the parties deciding (depending on the circumstances) if it is mutually agreed that it be rented out over that period. If this were to happen maybe then a home loan may be scrutinised much more closely – as against what we are seeing and reading today.
In a perfect world the authorities would make such an announcement sooner rather than when the proverbial hits the fan.
The lending institutions could make the landing a lot softer when and if a recession eventuates.
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With the RBA's help, debt has become king

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Conditions in the established housing market remain strong, according to latest meeting minutes from the RBA.
"While house price inflation across the country in 2014 had not been as rapid as over the second half of 2013, it had remained robust," <a href="https://www.propertyobserver.com.au/https://www.rba.gov.au/monetary-policy/rba-board-minutes/2014/05082014" target="_blank">the August minutes noted</a>.
"Auction clearance rates in Sydney had eased from their high levels in late 2013, although they had increased in Melbourne more recently."
Members also observed that residential dwelling approvals had declined somewhat in recent months, but remained at a high level and, in combination with the substantial amount of residential work yet to be done, suggested that dwelling investment was likely to remain strong in the period ahead.
"Staff forecasts suggested that inflation, despite recent higher readings, was likely to be consistent with the 2–3% target over the next two years.
"Members noted that there was inevitably a significant degree of uncertainty about the outlook, given the number of forces working in different directions.
"The Board judged that monetary policy was appropriately configured and that, on present indications, the most prudent course was likely to be a period of stability in interest rates."
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jchancellor-FAypfDUnLy

House price inflation "remained robust": RBA's August minutes

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Australia's established housing market remained "strong overall", according to the Reserve Bank of Australia.
 The time taken to sell properties and the average size of vendor discounts are at low levels, and auction clearance rates are above average, albeit not as high as late last year, the bank's latest statement of monetary policy advised. 
Stock turnover appears to have increased a bit in the June quarter, though is still a little below average. 
The RBA noted the nationwide rental vacancy rate has been little changed over recent quarters at a relatively low level, but conditions in the rental market appear to have generally eased.
"Rent inflation has declined to its slowest pace since the mid 2000s."
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"Combined with strong growth of housing prices over the past year or so, rental yields have fallen to around their average of the past decade. 
"A strong recovery in dwelling investment is well under way, driven by low borrowing rates, growth of housing prices, significant population growth and a retargeting of government assistance for first home buyers to new homes. 
"Dwelling construction increased by almost 5% in the March quarter to be 8% higher over the year, as the substantial pick-up in residential building approvals over 2013 continued to flow through to activity.
"The increase was driven by a rise in new dwelling construction, particularly for higher- density dwellings. Alterations and additions activity also increased a little in the March quarter, after an extended period of weakness.
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More recently, residential building approvals have declined a little in trend terms, but remain at a high level consistent with further growth of dwelling investment (Graph 3.9 below). The recent trend decline owes mostly to a decline in higher-density approvals from the very high levels seen in late 2013. Approvals for detached houses have trended higher in all mainland states over the past couple of years, notwithstanding a recent decline in South Australia.
<img src="/images/2014/08/08/rba-graph-aug-8-one.jpg" alt="">
 
Other timely indicators of housing construction also point to a sustained recovery in dwelling investment. Loan approvals for new dwellings remained at a high level in May and first home owner grants for new dwellings have increased by 22% over the past year. Liaison reports indicate that demand for new dwellings remains firm, with ongoing strong demand by foreign buyers for inner- city apartments, particularly in Melbourne."
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The statement suggested household wealth has grown strongly over the past 18 months or so, buoyed by higher housing and equity prices and ongoing saving by households, although more recently growth has eased a little.
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 In most of the capital cities, housing price inflation was less rapid over the first half of 2014 than it was over the latter part of 2013.
 While prices appear to have levelled out in Perth and Adelaide, growth has remained relatively strong in Sydney and Melbourne. 
Surveys indicate that, compared with earlier in the year, fewer households expect housing prices to rise over the next 12 months, and households view buying conditions for dwellings as less favourable than they did a year ago," the latest RBA Statement on Monetary Policy suggested.
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It concluded that housing price inflation over 2014 to date has not been as rapid as it was over the second half of 2013, but prices continue to rise. 
"Loan approvals are higher than they were a year ago, but have been little changed since late last year.
"At this level, they are consistent with growth in housing credit stabilising at a rate that is a bit faster than income growth, although the growth of investor credit has continued to outpace that of owner-occupiers.
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"The high rate of housing price inflation has underpinned strong growth in standard measures of household wealth. 
"Along with the very low level of interest rates, this has seen consumption growing a little faster than household income, leading to a gradual decline in the saving rate over the past 18 months or so. 
"Nevertheless, after picking up through 2013, consumption growth looks to have slowed in the first half of this year, with weaker retail sales growth and consumer sentiment falling to below-average levels. 
"It remains to be seen whether this slower growth of consumption is temporary. 
"Indeed, a timely measure of consumer sentiment has rebounded recently to be back above average."
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Property investors advised rent inflation in decline, yields back to average: RBA

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Interest rates will remain at record lows for another month, with the Reserve Bank of Australia (RBA) choosing not to change the overnight cash rate of 2.5%.
The cash rate has remained at 2.5% since August 2013.
The decision will come as no surprise to property industry commentators, with <a href="/expert-insights/finance/start-planning-for-a-rate-rise-finder-com-au">all 20 experts surveyed by finder.com.au</a> predicting the cash rate would stay on hold this month.
Property Observer's editor at large Jonathan Chancellor told finder.com.au that the RBA prefers to "let the economy look after itself as much as possible".
"We probably won't see any shift until 2015 when it will most likely be upwards," he said.
According to LJ Hooker chief executive Grant Harrod, the RBA's decision will keep demand from investors at a strong level.
“It’s a finely balanced domestic economy that has made the RBA reluctant to shift its current ‘neutral’ monetary policy position,” says Harrod.
“It now looks likely interest rates will remain on hold for the rest of the year, barring any unforeseen events and it should boost consumer confidence as we approach spring.
“There is some speculation rates could be dropped even further if the Australian dollar remains high.”
Harrod doesn't expect that rising house prices will cause the Reserve Bank to increase interest rates, so long as inflation remains in the 2-3% target range and the unemployment rate continues at under 6%.
“Price growth has helped boost construction activity and in turn economic growth in general which is essential as we adjust to the fall in mining investment,” says Harrod.
RP Data research director Tim Lawless says the decision comes as value growth continues across the housing market at a moderated pace, with RP Data reporting a 1.1% increase in dwelling values over the quarter to June.
"Although the rate of growth is slowing, policy makers, including the RBA, are likely to be keeping a close eye on the ongoing increases in home values across the two largest cities (Sydney and Melbourne)," says Lawless.
He predicts that the cash rate will remain unchanged until next year.
"It is looking increasingly like the official cash rate will remain at its low setting, at least for the remainder of this year, which should continue to support housing demand.
"Capital gains over the past 12 months were recorded at 10.2% across the combined capital cities, however we are expecting growth rates to moderate over the coming months as natural affordability constraints and low rental yields in the largest capital cities work to slow the rate of capital gains," Lawless notes.
Photo courtesy of Newtown grafitti/<a href="https://creativecommons.org/licenses/by/2.0/" target="_blank">Creative Commons</a>.
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A year of record low rates as RBA leaves cash rate at 2.5%

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Borrowers should begin planning ahead for a rate rise, according to comparison website finder.com.au.
Experts surveyed by <a href="https://finder.com.au">finder.com.au</a>, including senior economists from the big four banks, all agreed that the cash rate will most likely remain on hold at 2.5% this month.
The majority of the 20 respondents to finder.com.au's survey expect the cash rate to increase next year, with two experts predicting that rates will rise before the end of 2014.
Seven of the 17 experts who predicted a rate rise for 2015 believe it will happen in the first half of the year, while six think it won't come until after June 2015. Three were undecided, while one did not comment.
A senior economist from Commonwealth Bank and an expert from Urbis both expect rates will rise before 2015.
According to Michelle Hutchison, money expert at finder.com.au, interest rates will likely increase by 1.5 percentage points from next year.
“While lenders are competing harder to lock in borrowers with a fixed home loan, the finder.com.au monthly Reserve Bank Survey shows that we can expect to see interest rates rise to a new normal level of 150 basis points higher from next year," says Hutchison.
“Most of our experts believe the cash rate won’t reach the historical average of about 5%, but rather reach around 4%, which is 150 basis points above the current cash rate of 2.50%. And with 17 out of the 20 respondents betting on rates to start their way up from next year, borrowers need to ensure they can afford the extra cost.”
The website's database shows that more lenders have dropped the rates on their five-year fixed loans to under 5% this week, following NAB, Commonwealth and Westpac which all dropped their rates to 4.99% following last week's CPI announcement.
St George Bank, Citibank and St George Bank have all reduced their five-year fixed rates to 4.99%. Newcastle Permanent now offers a 4.95% rate on its five-year fixed loan, and Mortgage House's five year product is offered at a 4.97% interest rate.
Hutchison says borrowers should take advantage of the low rate deals before they change.
“Interest rate hikes are on the horizon and look set to start rising very soon, so borrowers need to start preparing now before it’s too late. For instance, variable rate borrowers with a $300,000 mortgage will need to factor in an extra $300 per month to keep up with repayments should their interest rate increase by 150 basis points," she says.
“Fixed home loan rates are among the lowest levels we’ve ever seen so if you are concerned about rising rates and higher repayments, it could be worthwhile locking in before these potential savings are gone.
“We calculated that borrowers with a $300,000 mortgage who switch from the average variable rate of about 5.50 percent to the lowest five-year fixed rate of 4.95 percent, could save almost $16,000 in five years if variable rates rise by 150 basis points," explains Hutchison.
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