<p data-end="587" data-start="368">Queensland builder-developer MAYD has revealed the first look at its major North Kirra beachfront development, lodging amended plans that reduce the number of apartments and increase the proportion of larger residences.</p>

<p data-end="778" data-start="589">The project is planned across a substantial 4,742 sqm amalgamated site spanning seven lots at <a href="https://www.apartments.com.au/new-apartments/2-6-pacific-parade-bilinga-qld-4225">2-6 Pacific Parade</a> and 27-33 Golden Four Drive in Bilin​ga, directly opposite Nor​th Kirra Beach.</p>

<p data-end="907" data-start="780"><a href="https://www.apartments.com.au/developers/mayd-group">MAYD</a> secured the site for $32.5 million in 2025, in what was one of the Gold Coast's largest property transactions of the year.</p>

<p data-end="1052" data-start="909">The development will be delivered across two stages, with the first stage carrying an estimated gross realisation value of around $360 million.</p>

<p data-end="1311" data-start="1054">The latest amendments seek to reduce the overall apartment count and shift the project further toward the owner-occupier market, with larger residences designed for buyers wanting considerably more space than traditionally offered in a beachfront apartment.</p>

<p data-end="1451" data-start="1313">The residential mix will include townhomes, oversized two-bedroom apartments, substantial three-bedroom residences and four-bedroom homes.</p>

<p data-end="1676" data-start="1453">MAYD has appointed Cera Stribley to lead the architecture and interiors, with the Melbourne-based design practice drawing on the beachfront setting through a series of ocean-facing terraces and heavily landscaped balconies.</p>

<p data-end="1908" data-start="1678">Strong horizontal forms and curved balconies will define the exterior, with subtropical landscaping integrated throughout the building to soften the built form and increase the connection between the residences and the beachfront.</p>

<p data-end="2142" data-start="1910">The project will also include an extensive collection of resident wellness and lifestyle facilities, continuing the broader shift across the Gold Coast's luxury apartment market toward larger homes supported by resort-style amenity.</p>

<p data-end="2142" data-start="1910"><img alt="MAYD" data-entity-type="file" data-entity-uuid="d1bcbb05-e659-4b47-8bd4-1e595315e2ad" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-27%20at%202.05.03%E2%80%AFPM.png?VersionId=jj0XEud1X1DuLt7_KyElhjMdZGOXmLHP" /></p>

<p data-end="2308" data-start="2144">MAYD Founder Todd Mould said North Kirra was increasingly appealing to buyers attracted to the more established, lower-density character of the southern Gold Coast.</p>

<p data-end="2648" data-start="2310">"North Kirra presents one of the most compelling luxury residential opportunities currently emerging in Australia, combining absolute beachfront with the character and authenticity that buyers are increasingly seeking, and the same sense of tight-knit community that defined Burleigh and Currumbin perhaps 10 or 15 years ago," Mould said.</p>

<p data-end="2797" data-start="2650">"With Gold Coast Airport on its doorstep, it also offers a level of accessibility that broadens its appeal across almost every market demographic."</p>

<p data-end="2938" data-start="2799">The project comes as the southern Gold Coast continues to attract an increasing share of high-end apartment development and buyer activity.</p>

<p data-end="3216" data-start="2940">Kirra in particular has emerged as one of the region's more tightly held beachfront markets, with its relatively low-density character, established surf and hospitality scene and proximity to Gold Coast Airport differentiating it from the higher-density markets further north.</p>

<p data-end="3325" data-start="3218">Mould said those characteristics had informed the approach MAYD and Cera Stribley had taken to the project.</p>

<p data-end="3442" data-start="3327">"We've worked closely with Cera Stribley to create a vision that is deeply connected to its surroundings," he said.</p>

<p data-end="3662" data-start="3444">"Inspired by the coastline itself, the architecture has been shaped around space, privacy and resort-style living, creating a collection of homes that reflects the next generation of luxury on the southern Gold Coast."</p>

<p data-end="3818" data-start="3664">MOTIV Managing Director Carly Cottam, who has been appointed to market the project, said buyer attention had continued to move south along the Gold Coast.</p>

<p data-end="4076" data-start="3820">"Purchasers who may once have defaulted to Broadbeach, Main Beach or Surfers Paradise are increasingly recognising the value of a genuine beachfront location that offers lower density, strong amenity and a more established sense of community," Cottam said.</p>

<p data-end="4375" data-start="4078">"Kirra has a powerful combination of growing demand and genuine scarcity. Beachfront supply is inherently constrained, the area remains relatively low density, and buyers are increasingly placing a premium on locations that feel established, uncrowded and authentic rather than heavily developed."</p>

<p data-end="4503" data-start="4377">Cottam said the proximity to Gold Coast Airport was also proving increasingly important for interstate and second-home buyers.</p>

<p data-end="4741" data-start="4505">"Being minutes from Gold Coast Airport makes it particularly compelling for interstate buyers, frequent travellers and second-home purchasers who can access an authentic coastal lifestyle almost immediately after stepping off a flight."</p>

<p data-end="4910" data-start="4743">The acquisition takes MAYD's active development portfolio to more than $500 million, with the North Kirra project representing one of its largest undertakings to date.</p>

<p data-end="4951" data-start="4912">MAYD is targeting an early 2027 launch.</p>


Joel Robinson

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

<main data-perf-region="main">
<p data-end="600" data-start="394">Castle Hill, the longtime hub of the Hills District, has been one of the major beneficiaries of Sydney's Metro expansion, with improved connectivity helping drive continued population growth, development and buyer demand across the Hills District.</p>

<p data-end="733" data-start="602">But despite that growth, the suburb has seen relatively few major new apartment projects brought to market over the past 18 months.</p>

<p data-end="970" data-start="735">Hills District developer Reve Group is looking to fill that gap with <a href="https://www.apartments.com.au/new-apartments/nova-r-ve-castle-hill-2-garthowen-crescent-castle-hill-nsw-2154">Nova Rêve</a>, a major new mixed-use precinct on the corner of Garthowen Crescent and Old Castle Hill Road, a short walk from Castle Hill Metro Station and Castle Towers.</p>

<p data-end="970" data-start="735">[smartcode_project:default project_id=152737 project_image_fid=377679]</p>

<p data-end="1159" data-start="972">The project will comprise three residential towers alongside a hotel, restaurants, cafes and a skybar, more than 1,600 sqm of ground-floor retail and almost an acre of landscaped gardens.</p>

<p data-end="1357" data-start="1161">It represents the largest project undertaken by Reve Group, the development arm of the Kassis family, which has been building across the Hills District for more than 30 years through Kassis Homes.</p>

<p data-end="3400" data-start="3216">[smartcode_project:default project_id=152737 project_image_fid=377675]</p>

<p data-end="3400" data-start="3216">Nova Rêve also represents a significant step up from the family's first apartment development, Grand Rêve, which was delivered nearby on Garthowen Crescent.</p>

<p data-end="1664" data-start="1517">Grand Rêve introduced larger, house-like apartment layouts and premium inclusions including Wolf and Sub-Zero appliances to the Castle Hill market.</p>

<p data-end="1826" data-start="1666">Nova Rêve takes that approach to a precinct scale, combining the residential component with hospitality, retail and substantial public and resident landscaping.</p>

<p data-end="1826" data-start="1666">[smartcode_project:default project_id=152737 project_image_fid=377685]</p>

<p data-end="2045" data-start="1828">Reve Group Managing Director Sam Kassis said the project reflected the family's three decades of building in the Hills, which has evolved from trophy homes on quarter-acre blocks to larger-scale apartment development.</p>

<p data-end="2269" data-start="2047">"Grand Rêve was our first apartment project here and it showed us what this pocket of Castle Hill could be. Nova Rêve is the refinement of that idea: not just apartments, but a place the whole suburb can use," Kassis said.</p>

<p data-end="2430" data-start="2271">A key part of that approach is the hotel, which has been designed to operate as an amenity for the wider Castle Hill community rather than solely hotel guests.</p>

<p data-end="2606" data-start="2432">It will include restaurants, cafes, skybars and all-day dining, alongside conference and event facilities catering to business functions, community groups and private events.</p>

<p data-end="2724" data-start="2608">At ground level, more than 1,600 sqm of shops and cafes will open onto the surrounding streets and landscaped areas.</p>

<p data-end="2892" data-start="2726">Almost an acre of gardens designed by Land and Form Studios will run through the precinct, incorporating pathways, seating, barbecue areas and children's play spaces.</p>

<p data-end="2892" data-start="2726">[smartcode_project:default project_id=152737 project_image_fid=377680]</p>

<p data-end="3004" data-start="2894">Reve Group's Romio Georges said creating an active ground plane had been central to the planning of Nova Rêve.</p>

<p data-end="3214" data-start="3006">"There are gardens with pathways, barbecues, seating and play areas, shops and cafes opening onto the street, and a hotel with restaurants and a skybar that anyone in Castle Hill can walk into," Georges said.</p>

<p data-end="3400" data-start="3216">The project's elevated position on one of Sydney's highest ridgelines will also provide apartments with outlooks toward the Sydney skyline, surrounding parkland and the Blue Mountains.</p>

<p data-end="3400" data-start="3216">More than 80 per cent of the apartments will occupy corner positions, with Turner responsible for both the architecture and interiors.</p>

<p data-end="3670" data-start="3538">&nbsp;</p>

<p data-end="3670" data-start="3538">[smartcode_project_cta:default project_id=152737]</p>

<h3 data-end="3697" data-section-id="q3n5ak" data-start="3672">&nbsp;</h3>
</main>


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

<p>A collection of just 25 large-format apartments and penthouses overlooking Goodwin Park is entering the Coolangatta market, with <a href="https://www.apartments.com.au/new-apartments/marea-residences-coolangatta-27-27a-dixon-street-coolangatta-qld-4225">Maréa Residences</a> combining a low-density, residential-only approach with uninterrupted park and Pacific Ocean outlooks.</p>

<p>Located at 27 Dixon Street, Maréa comprises three and four-bedroom residences alongside a limited number of dual-level penthouses, with the project positioned between Goodwin Park and <a href="https://www.apartments.com.au/developments/coolangatta-qld-4225">Coolangatta</a>’s coastal precinct.</p>

<p>Construction has commenced, with completion currently estimated for late 2027. Three-bedroom residences are priced from $1.8 million.</p>

<p>[smartcode_project:default project_id=150999 project_image_fid=374005]</p>

<p>The project has been designed around its northern outlook across the park, with the building’s architecture, landscaping and material palette intended to establish a connection with the neighbouring green space. The residences have been configured to maximise natural light and views across Goodwin Park towards the ocean.</p>

<p>Inside, the material palette incorporates timber, stone and brushed brass, complemented by curved detailing and ambient lighting. Kitchens and bathrooms carry the same natural material approach, while residences also include basement parking, storage and lift access.</p>

<p>Maréa’s penthouses are arranged over two levels and include private pools, adding another layer to the project’s focus on larger-format apartment living. Across the development, residences are configured with three or four bedrooms rather than the broader mix of smaller apartment types commonly found in larger projects.</p>

<p>[smartcode_project:default project_id=150999 project_image_fid=374010]</p>

<p>Resident amenity is concentrated at rooftop level, where landscaped entertaining terraces and pools take advantage of elevated views across Coolangatta and the Pacific Ocean.</p>

<p>The project has so far been particularly well received by local owner-occupiers and downsizers, according to Urban Activation Property Sales and Marketing Director Matt George, with the residential-only format, construction quality and northern park outlook among the features resonating with purchasers.</p>

<p>“The uninterrupted northern aspect overlooking Goodwin Park has been a key point of difference, with buyers attracted to the sense of serenity and open space the park provides, while still enjoying easy access to the ocean and being within walking distance of the lifestyle and amenities Coolangatta has to offer,” George said.</p>

<p>[smartcode_project:default project_id=150999 project_image_fid=374002]</p>

<p>“The combination of high-quality construction, a residential-only building, park outlook and proximity to the beach has resonated strongly with the local downsizer market.”</p>

<p>The Dixon Street address is within walking distance of Coolangatta Beach and the broader southern Gold Coast coastline, including the surf breaks at Snapper Rocks and Kirra. Coolangatta’s cafés, restaurants and retail are nearby, while Gold Coast Airport is also within close proximity.</p>

<p>[smartcode_project_cta:default project_id=150999]</p>


Maréa Residences brings parkside apartments to Coolangatta

<p data-end="535" data-start="324">Melbourne developer PDG has secured Victorian Government approval for its $1.5 billion Southbank development <a href="https://www.apartments.com.au/new-apartments/the-one-1-queens-bridge-street-southbank-vic-3006">The One</a>, clearing the way for the long-dormant riverfront site opposite Crown to finally be developed.</p>

<p data-end="717" data-start="537">The Minister for Planning has approved the project at 1-29 Queens Bridge Street, with the Department of Transport and Planning issuing the planning permit following its assessment.</p>

<p data-end="918" data-start="719">The approval will allow PDG to develop the prominent 5,059 sqm site with a major mixed-use tower comprising premium apartments, including branded residences, a luxury hotel and boutique office space.</p>

<p data-end="1131" data-start="920">PDG acquired the site in late 2024, with its position directly opposite Crown's main entrance and near Melbourne's Arts Precinct making it one of Southbank's most significant remaining development opportunities.</p>

<p data-end="1131" data-start="920"><img alt="PDG" data-entity-type="file" data-entity-uuid="3933013e-6332-4386-b9be-089df05caf17" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-27%20at%209.29.22%E2%80%AFAM.png?VersionId=sITIgBqDL0N3VNSMwWEmF5UA.uvcsRyu" /></p>

<p data-end="1318" data-start="1133">Designed by COX in collaboration with ODO and PDG, the tower's architecture draws on the movement of the Yarra River, with six vertical pleats running the height of the sculpted facade.</p>

<p data-end="1433" data-start="1320">The project will also see the heritage-listed Queens Bridge Hotel restored and incorporated into the development&nbsp;with new hospitality and public uses, including a rooftop venue.</p>

<p data-end="1658" data-start="1591">A significant component of The One will be its residential amenity.</p>

<p data-end="1864" data-start="1660">More than 5,000 sqm of resident facilities will be delivered across a single level, making it one of the largest consolidated residential amenity offerings proposed in an Australian apartment development.</p>

<p data-end="2011" data-start="1866">The planning approval also incorporates a major upgrade of Queensbridge Square, which PDG will deliver in partnership with the City of Melbourne.</p>

<p data-end="2011" data-start="1866"><img alt="PDG" data-entity-type="file" data-entity-uuid="73167fcd-1031-4b6f-a408-a064cfe45ed1" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-27%20at%209.29.17%E2%80%AFAM.png?VersionId=Pf1AEWxw6SNmBqR0zQW5lyEze.MtxgFp" /></p>

<p data-end="2191" data-start="2013">The existing square will be revitalised as a new civic and pedestrian space along the Yarra River, strengthening the connection between the project, Southbank and the riverfront.</p>

<p data-end="2365" data-start="2193">PDG Founder and Managing Director Vince Giuliano said the approval represented a major milestone for a site which has remained largely underutilised for more than 15 years.</p>

<p data-end="2473" data-start="2367">“This is the most significant Planning Permit approval Melbourne has seen in recent years,” Giuliano said.</p>

<p data-end="2775" data-start="2475">“For more than 15 years, this site has remained underutilised. This approval enables us to deliver a project that will contribute meaningfully to the revitalisation of Southbank, restore and reactivate an important heritage building, and create a new civic and hospitality destination for Melbourne.”</p>

<p data-end="2943" data-start="2777">The latest approval follows an earlier planning permit issued by the City of Melbourne covering demolition works across part of the site at 9-29 Queens Bridge Street. Those demolition and early works are already underway.</p>

<p data-end="3145" data-start="3001">PDG has also started generating early interest in the residential component from owner-occupiers ahead of a planned public launch in early 2027.</p>


PDG secures approval for $1.5bn Southbank apartment development, The One

<p>Local developer Harridan is seeking to turn its Woolloongabba apartment project into the first stage of a broader transformation of Burke Street, using a new 16-storey mixed-use building to establish a greener pedestrian connection toward the rapidly evolving Boggo Road transport and knowledge precinct.</p>

<p>The South East Queensland developer has filed plans for 154 apartments on the <a href="https://www.apartments.com.au/new-apartments/4-burke-street-woolloongabba-qld-4102">southern side of Burke Street</a>, where its proposal has been designed alongside a wider vision by LatStudios for the street.</p>

<p>That vision positions the southern side of Burke Street for buildings of 15 storeys and above, while envisaging lower-rise development of up to five storeys on the northern side to transition into Woolloongabba's existing character housing. It also proposes wider pedestrian verges, deep planting, new street trees and upgrades to the pedestrian approach to Boggo Road Station.</p>

<p>The Harridan development itself has been designed by Brisbane-based Arqus Design and will comprise 154 apartments across 16 storeys. The mix is weighted heavily toward two-bedroom apartments, with 121 proposed alongside 10 one-bedroom and 23 three-bedroom residences. There will typically be around 14 units per floor.</p>

<p>A lower-ground car park and three podium levels will accommodate 156 resident parking spaces, along with visitor and commercial parking. There will also be 154 resident bicycle spaces and 40 visitor bicycle parks.</p>

<p>&nbsp;</p>

<p>Harridan is a family-owned developer and part of the Holmwood Highgate Group, with more than three decades of development activity across South East Queensland. Its portfolio spans residential, commercial and industrial property, with current residential projects including Riverbank on Byron in Bulimba, Esperance Residences in Carina and The Precinct at Kinross Road in Thornlands.</p>

<p>Wooloongabba has been popular for apartment developers, particularly since the announcement of the 2032 Summer Olympics games in Brisbane.</p>

<p>While there have been a lot of development applications, it has failed to materialize into real supply.&nbsp;</p>

<p>Sarazin has been the major player in the area. They are under construction at Murcia Residences, on the fringe of East Brisbane and Woolloongabba. They have just launched <a href="https://www.apartments.com.au/new-apartments/the-stanley-residences-woolloongabba-8-trafalgar-street-woolloongabba-qld-4102">The Stanley Residences</a>, in Woolloongabba on Trafalagar Street. They also have Nuage coming soon on the nearby <a href="https://www.apartments.com.au/new-apartments/nuage-woolloongabba-14-wellington-road-woolloongabba-qld-4102">Wellington Road</a>.</p>


First look: Harridan plans Burke Street transformation beside Boggo Road transport hub

Pete Wargent

<html><body>
<p>EXPERT OBSERVER</p>
<div>A double-shot Friday, with speeches from both Reserve Bank Governor Lowe and Assistant Governor Luci Ellis.</div>
<div> </div>
<div>Lowe's speech effectively confirmed that the inflation target is asymmetric.</div>
<div> </div>
<div>Although 'committed' to the 2 to 3 per cent inflation target, the next move in interest rates will be up, he noted, even though inflation is yet again set to fall below the target.<br><br>As energy and fuel price pressures ease the rate of inflation will likely drop over the second half of the year.<br><br>That's good to the extent that it eases pressure on household budgets, of course.<br><br>But, in the spirit of Mr. Micawber, it is hoped that eventually inflation will pick up again.<br><br>Amazon might have something to say about that as retail price deflation again rears its head.<br><br><strong>Rates on hold</strong>
</div>
<div> </div>
<div>Whether you agree or otherwise, at least it's been made clear: the cash rate is going to be set at 1.5 per cent for a long time!<br><br>Probably a very long time.</div>
<div> </div>
<div>Lowe also delivered an interesting interpretation of housing credit dynamics, noting that the slowing of the housing market had reduced demand for credit by investors, in doing so citing low mortgage rates as evidence that the reduced supply of credit has not been the main story.</div>
<div> </div>
<div>The plural of anecdote is not data, but that's not quite the feedback we've been getting from mortgage brokers. </div>
<div> </div>
<div>Semantics, maybe, given the reflexive nature of such things.</div>
<div> </div>
<div><strong>Luci on lags</strong></div>
<div> </div>
<div>Assistant Governor Ellis also presented an interesting speech on lags, showing how the unemployment rate has been improving (if not very much for the long term unemployed).</div>
<div> </div>
<div>No arguments there, although building permits are now falling away outside Melbourne (OK, and Hobart), while money growth is now at the lowest level in more than a quarter of a century. </div>
<div> </div>
<div>If those weak leading indicators persist, then eventually the economy will start to slow too...yes, it's those pesky lags again!</div>
<div> </div>
<div>Maybe that's already happening, according to the timeliest business surveys.</div>
<div> </div>
<div>The labour force figures released this week also showed that the growth in hours worked is already on the way down. </div>
<p> </p>
<div><a href="https://3.bp.blogspot.com/-kDmz34Ipxs0/W3dJwWlfd7I/AAAAAAAArlU/3SWaE5U_PZwsGrTrZ21uEB5LO6qLF99oACLcBGAs/s1600/a1.jpg"><img src="https://3.bp.blogspot.com/-kDmz34Ipxs0/W3dJwWlfd7I/AAAAAAAArlU/3SWaE5U_PZwsGrTrZ21uEB5LO6qLF99oACLcBGAs/s640/a1.jpg" width="640" height="378" data-original-height="795" data-original-width="1342"></a></div>
<p>Long story short, inflation is low because the economy remains well below its full capacity.</p>
<div><em>PETE WARGENT is the co-founder of AllenWargent property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank">blogger</a>.</em></div>
</body></html>

pwargent-M4siyDbqQY

The cash rate is going to be locked at 1.5 per cent for a very long time: Pete Wargent

<html><body>
<div>EXPERT OBSERVER</div>
<div> </div>
<div>Despite the high rates of apartment construction, strong population growth continues to absorb the rental stock.<br><br>The total number of rental vacancies in Australia has declined over the past year from 75,733 to 72,748, according to the latest figures from SQM Research.<br><br>This represents a decline from in the national vacancy rate from 2.4 per cent to 2.2 per cent - while construction is now set to slow.</div>
<div> </div>
<div>SQM reported that Brisbane continues to experience a sustained 2018 decline in vacancy rates from 3.6 per cent in December to 2.9 per cent by July.<br><br>And this will likely continue as apartment construction falls away and migration from interstate picks up. </div>
<div> </div>
<div>Perth is also now through the worst with vacancy rates trending down (from 5.2 per cent to 4 per cent over the past year) and the oversupply of rentals easing a bit, after several years of rental price declines.<br><br>Meanwhile Adelaide tightened again into just 1.3 per cent - getting pretty tight down there now! - and Canberra...well, Canberra is heading for zero at this rate.<br><br><strong>Sydney indigestion</strong>
</div>
<div> </div>
<div>In Sydney number of vacancies was down from 19,572 to 19,114 in the month - a tight rental market would be represented by more like 12,000 vacancies or fewer - but year-on-year the vacancy rate is considerably higher at 2.8 per cent. </div>
<div> </div>
<div>Click <a href="https://4.bp.blogspot.com/-vinzV9mTVWw/W3JPxfzJ6JI/AAAAAAAArhg/DkJn_IkncbcIwHZt9WN1eAAv5j9VV9UjwCLcBGAs/s1600/SQM1.jpg" target="_blank">here</a> to enlarge</div>
<div> </div>
<div><a href="https://4.bp.blogspot.com/-vinzV9mTVWw/W3JPxfzJ6JI/AAAAAAAArhg/DkJn_IkncbcIwHZt9WN1eAAv5j9VV9UjwCLcBGAs/s1600/SQM1.jpg" target="_blank" rel="noopener noreferrer" data-auth="NotApplicable"><img src="https://4.bp.blogspot.com/-vinzV9mTVWw/W3JPxfzJ6JI/AAAAAAAArhg/DkJn_IkncbcIwHZt9WN1eAAv5j9VV9UjwCLcBGAs/s640/SQM1.jpg" width="640" height="356" data-imagetype="External"></a></div>
<div> </div>
<div> </div>
<div>Sydney tends to be a much busier place in summer these days, so this trend will be one to watch with interest.</div>
<div> </div>
<div><em>PETE WARGENT is the co-founder of AllenWargent property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank">blogger</a>.</em></div>
</body></html>

Sustained decline in Brisbane rental vacancies: Pete Wargent 

<html><body>
<div>EXPERT OBSERVER</div>
<div> </div>
<div>Another substantial surge in jobs was reported for June, with total employment up by a seasonally adjusted 50,900 in the month.</div>
<div> </div>
<div>This led to the usual quibbles about whether the figures are 'right' or not. </div>
<div> </div>
<div>This seldom happens when the number are below expectations.</div>
<div> </div>
<div>But when there's a beat...every time!</div>
<div> </div>
<div>There are even occasional calls to ditch the seasonally adjusted figures entirely in favour of the smoother trend data, but I'm not sure I buy that.</div>
<div> </div>
<div>What are the trend figures, after all, but a representation of the same numbers from the survey? </div>
<div> </div>
<div>The further you disaggregate the figures the more prone they are to throwing out unusual results. </div>
<div> </div>
<div>For example, Macquarie highlighted an oddity in that the bulk of jobs growth over the past four months was accounted for by youth employment, especially from the female cohort.</div>
<div> </div>
<div>The detailed labour force figures at the regional level are similarly prone to volatility, which is why the ABS reports annual average figures in addition to the original survey results. </div>
<div> </div>
<div> </div>
<div>For all of the grouching, the labour force has continued to tighten gradually over the past few years. </div>
<div> </div>
<div>For the monthly doubters, the seasonally adjusted unemployment rate has now fallen by more than one percent from 6.38 per cent in October 2014 to 5.37 per cent in June 2018.</div>
<div> </div>
<div>If you prefer to use the trend rate, then that's plotted below for you too. </div>
<div> </div>
<div>The unemployment rate is now at the lowest level since 2012. </div>
<p> </p>
<div class="separator"><img src="https://1.bp.blogspot.com/-2JWVaIcKwE8/W1MPTWopYJI/AAAAAAAArJk/IQFNOPE6G2YyoZHHpHb87bnv0fECz6rbQCLcBGAs/s640/UE.jpg" width="640" height="376" data-original-height="804" data-original-width="1363"></div>
<p> </p>
<div>Another piece of pessimistic statistical trickery is to highlight the underutilisation rate while neglecting to report the more telling volume measures of underutilisation.</div>
<div> </div>
<div>In other words, yes lots of people want more hours of work, but the numbers of extra hours wanted has been declining over the past four calendar years too. </div>
<p> </p>
<div class="separator"><img src="https://1.bp.blogspot.com/-sVMjYyerNWg/W1MU3jafYNI/AAAAAAAArJ4/jK4rZLKxv_44Z1qA933gSjo2fI98wB8DACLcBGAs/s640/UU.jpg" width="640" height="376" data-original-height="799" data-original-width="1355"></div>
<p><br><span>This is good news, and it should be embraced as such!</span><br><br><span>Welcome to the recovery.</span></p>
<p><em>PETE WARGENT is the co-founder of AllenWargent property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank">blogger</a>.</em></p>
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The labour market is improving: Pete Wargent

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<div>There were nervous onlookers aplenty as APRA Chairman Wayne Byres prepared to speak in Sydney last week on prudential lending standards and sound lending practices.</div>
<div> </div>
<div>They needn't have been quite so fearful, in the event, as Byres reassured markets that while heightened scrutiny had uncovered some displeasing practices, most of the heavy lifting has already been done with regards to tighter lending standards.</div>
<div> </div>
<div>For subscribers to our market reports, a number of familiar themes raised: tightening standards have been applied incrementally over a period of several years (rather than overnight as often assumed), a new focus on comprehensive credit reporting to better capture pre-existing debt commitments of borrowers, and some very useful analysis of lower loan-to-value ratios and the decline of interest-only loans. </div>
<div> </div>
<div>While much has been made of a potential 'credit crunch' - mainly by interests hoping to see a credit crunch, it must be said - Byres reiterated how in aggregate annual credit growth has continued to track at 'very healthy' levels, especially for owner-occupiers at about 8 per cent.<br><br>Of course, there are many unknowns about how this will all play out from here. Some parts of the housing market will fare well where demand from homebuyers is high, and others will struggle where the opposite holds true.<br><br><em>Caveat emptor.</em>
</div>
<div><em> </em></div>
<div><strong><span style="text-decoration: underline;">Computer says no credit crunch</span></strong></div>
<div> </div>
<div>As Byres was busy adjusting his tie pre-speech in Sydney, financial markets were digesting the latest housing finance figures for the month of May.</div>
<div> </div>
<div>Supporting what Byres would go on to say in his speech, there was a seasonally adjusted <em>increase </em>in the number of mortgages written across all loan categories, defying market expectations, and a corresponding increase in the total value of lending.</div>
<div> </div>
<div>The 'trend' figures are still shaping lower, but at $31.9 billion the seasonally adjusted housing finance figures were pointing to anything but a credit crunch, especially for the homebuyer cohort.</div>
<p> </p>
<div class="separator"><img src="https://4.bp.blogspot.com/-9qcKV8e6VMk/W0WgxdkJlzI/AAAAAAAArAU/_QoKjOjlLjACVEwN5shP6yjjT1cHkehbgCLcBGAs/s640/HF1.jpg" width="640" height="364" data-original-height="785" data-original-width="1378"></div>
<div class="separator"> </div>
<div>The average loan size for both first homebuyers ($344,600) and non-first homebuyers ($412,000) also hit a record high in May - both in monthly and rolling annual terms - so it appears that those borrowers able to commit to a loan have not seen borrowing capacity trimmed as much as feared, at least in aggregate. </div>
<div> </div>
<div class="separator"><img src="https://1.bp.blogspot.com/-NeN8sCx2QBU/W0WkChZvp7I/AAAAAAAArAo/b4bh7Uixy3olAUp0eP05tBZDUfIqmftmQCLcBGAs/s640/HF2.jpg" width="640" height="368" data-original-height="802" data-original-width="1388"></div>
<p><br><strong><span style="text-decoration: underline;">Where to from here?</span></strong><br><br></p>
<div>Clearly no credit crunch in these figures, then, but my sense is that everyone would feel a bit happier with the world if the household debt to disposable income ratio was seen to be no longer rising from its present level of 1.9x. </div>
<div> </div>
<div>APRA has played its part in tightening lending standards for investors, rapidly reducing the stock and flow of interest-only loans (meaning more Aussies paying are now down their debt), and ensuring that new borrowers are stress-tested with what are very significant mortgage rate buffers. </div>
<div> </div>
<div>It's interesting to consider momentarily how so much market commentary has become morbidly fixated on a bad news narrative, almost wilfully overlooking a string of upbeat data over recent months.</div>
<div> </div>
<div>Westpac reported this morning that its consumer confidence index had surged to the highest level since all the way back in 2013, mirroring Aig's index showing the services sector expanding at the fastest pace on record, and jobs vacancies firing to their highest ever level.<br><br>So much for it all being doom and gloom!</div>
<div> </div>
<div>Meanwhile the unemployment rate is easing back towards the lowest level in years, exports are tracking at record highs, and the rolling annual Budget deficit is in the best nick in a decade.</div>
<div> </div>
<div>All sanguine observers are quite clear on the missing piece of the puzzle, though: wages growth!</div>
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Lenders gonna lend: Pete Wargent

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<div>EXPERT OBSERVATION</div>
<div> </div>
<div>There was a flurry of excitement back in January when previously reported 2017 figures implied that Australia's household debt pile had temporarily nudged against twice disposable income. </div>
<div> </div>
<div>However, the headline number was subsequently revised down.</div>
<div> </div>
<div>The latest ratios from the Reserve Bank of Australia (RBA) show household debt now sitting at at 1.9x disposable income.</div>
<div> </div>
<div>Or 190.13 per cent as at March 2018, to use a bit of false precision, up from 183.51 per cent a year earlier. </div>
<div> </div>
<div>Click here <a href="https://4.bp.blogspot.com/-Jg6DW-0Q4mU/WzqepI3WnUI/AAAAAAAAq2g/IgMCJx3uRN4KTafsk-RgZdhKL9lqNlKiACLcBGAs/s640/RBA1.jpg" target="_blank">to enlarge.</a>
</div>
<div> </div>
<div class="separator"><img src="https://4.bp.blogspot.com/-Jg6DW-0Q4mU/WzqepI3WnUI/AAAAAAAAq2g/IgMCJx3uRN4KTafsk-RgZdhKL9lqNlKiACLcBGAs/s640/RBA1.jpg" width="640" height="392" data-original-height="803" data-original-width="1310"></div>
<div> </div>
<div>There's a lot of debate about what this debt ratio should or shouldn't be.</div>
<div> </div>
<div>It will probably remain higher than was previously normal given the structure of Australia's population and immigration profile, with policy generally taking a keener regard of interest payments and serviceability. </div>
<div> </div>
<div>Although this is a revised series high, the rate of increase has slowed somewhat (while the gross figure also doesn't account for the record mortgage buffers and use of offset accounts racked up through this cycle).</div>
<div> </div>
<div>Moreover, given the precipitous drop in both the stock and flow of interest-only mortgages the ratio is likely to peak relatively soon as income growth also moves beyond the nadir. </div>
<div> </div>
<div>Anecdotally lenders are making it very difficult for brokers and borrowers to see loans written at the present time, which I believe will see the seasonally adjusted monthly value of investment loans pushed down to around $10 billion by the middle of the year, from nearly $15 billion at the 2015 peak.</div>
<div> </div>
<div>Money growth is now at its lowest level in 26 years, and investor credit growth is at a record low of just 2 per cent, even before accounting for headcount growth and inflation. </div>
<div> </div>
<div>
<span>PETE WARGENT is the co-founder of AllenWargent property buyers (London, Sydney) and a best-selling author and </span><a href="https://petewargent.blogspot.com/" target="_blank">blogger</a><span>.</span>
</div>
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Household debt higher over 12 months to March

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<div>In August 2017 I attempted to estimate the value and timing of forced interest-only ('IO') resets as a result of tighter lending standards. </div>
<div> </div>
<div>Since that time many rational borrowers have elected to switch to principal and interest (P&amp;I) loans to benefit from the more attractive mortgage rates on offer. </div>
<div> </div>
<div>APRA's quarterly ADI figures showed that the flow of new IO loans was under 16 per cent for a second consecutive quarter. </div>
<div> </div>
<div>This dynamic combination has had a marked impact on the stock value of outstanding IO loans, declining by $93.2 billion of 16.1 per cent year-on-year.</div>
<div> </div>
<div>As a share of ADI residential term loan exposures IO loans have therefore been reduced to 31 per cent as at March 2018, well down from close to 39 per cent a year earlier. </div>
<p> </p>
<div class="separator"><img src="https://1.bp.blogspot.com/-8ZXOTXlNodQ/Wy8El82AoVI/AAAAAAAAqwI/Ksa4JePKI1oQlWmiti6A7-46KuZ3uYeugCLcBGAs/s640/APRA1.jpg" width="640" height="374" data-original-height="803" data-original-width="1367"></div>
<p> </p>
<div>Most borrowers appear to be handling the switch comfortably.</div>
<div> </div>
<div>Those most impacted are likely to be portfolio investors, although many of this cohort built their portfolios over a long period of time, building equity and cashflow in doing so. </div>
<div> </div>
<div>Some may have to sell a property or two in order to reduce debt. </div>
<div> </div>
<div>The share of higher loan-to-value (LVR) ratio lending continued to tighten in the March quarter, having already declined considerably since 2014. </div>
<div> </div>
<div class="separator"><img src="https://1.bp.blogspot.com/-xenupVlmdH4/Wy8El_m7iWI/AAAAAAAAqwQ/-WTHJbrtXA4wGT7M1HI2xxF-dGZjeU-_ACEwYBhgL/s640/APRA2.jpg" width="640" height="366" data-original-height="790" data-original-width="1378"></div>
<div> </div>
<div>The latest figures relate to the first three months of 2018, so it's difficult to know whether the Royal Commission had any further impact over the following period through to June.</div>
<div> </div>
<div>It's interesting to note that the major lenders have lost some market share over time.</div>
<div> </div>
<div>Yet bank share prices saw a punchy rebound this week, possibly relating to a short squeeze, or more likely a pervading sense of relief as the media loses its appetite for daily stories from the Royal Commission. </div>
<div> </div>
<div>
<span>PETE WARGENT is the co-founder of AllenWargent property buyers (London, Sydney) and a best-selling author and </span><a href="https://petewargent.blogspot.com/" target="_blank">blogger</a><span>.</span>
</div>
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Most IO borrowers handling the switch to P&I comfortably

<html><body>
<div>EXPERT OBSERVATION</div>
<div> </div>
<div>The regulatory throttling of mortgage lending maintained its firm stranglehold in the first quarter of 2018, with interest-only lending remaining at just 15.7 per cent of new residential term loans by value (a far cry from 45.6 per cent at the September 2015 peak). </div>
<div> </div>
<div>Both the stock and flow of interest-only loans has been significantly reduced by the introduced macroprudential measures. </div>
<p> </p>
<div><a href="https://4.bp.blogspot.com/-2jv1gfRCvAw/Wysf2SDxvrI/AAAAAAAAqss/WcKMXyO_Hp0MOWLqTZC2PrTCLWw5XHb9ACLcBGAs/s1600/APRA1.jpg"><img src="https://4.bp.blogspot.com/-2jv1gfRCvAw/Wysf2SDxvrI/AAAAAAAAqss/WcKMXyO_Hp0MOWLqTZC2PrTCLWw5XHb9ACLcBGAs/s640/APRA1.jpg" width="640" height="370" data-original-height="798" data-original-width="1374"></a></div>
<p> </p>
<div>Tighter loan-to-value (LVR) ratios also continued to be applied in Q1, with just 6.8 per cent of new residential lending at LVRs of 90 per cent or greater in the March 2018 quarter. </div>
<div> </div>
<p> </p>
<div><a href="https://3.bp.blogspot.com/-7mEIZLUEhXo/Wysf2kwS39I/AAAAAAAAqsw/oNlM9WmxH6sZOhK4rQHu8m3clxqeyt0bgCLcBGAs/s1600/APRA3.jpg"><img src="https://3.bp.blogspot.com/-7mEIZLUEhXo/Wysf2kwS39I/AAAAAAAAqsw/oNlM9WmxH6sZOhK4rQHu8m3clxqeyt0bgCLcBGAs/s640/APRA3.jpg" width="640" height="370" data-original-height="797" data-original-width="1378"></a></div>
<p> </p>
<div>Loans approved outside serviceability were well down from the December 2017 quarter spike, but remained at an elevated level implying that tighter standards almost certainly continued to bite throughout the first half of 2018. </div>
<p> </p>
<div><a href="https://1.bp.blogspot.com/-TAISqpuzD5s/Wysf2uTdZ5I/AAAAAAAAqtA/m_X8X5T_vl82Rt4rcFuuj19tw9Z8pcYRACEwYBhgL/s1600/APRA2.jpg"><img src="https://1.bp.blogspot.com/-TAISqpuzD5s/Wysf2uTdZ5I/AAAAAAAAqtA/m_X8X5T_vl82Rt4rcFuuj19tw9Z8pcYRACEwYBhgL/s640/APRA2.jpg" width="640" height="372" data-original-height="792" data-original-width="1360"></a></div>
<div> </div>
<div> </div>
<div><em>PETE WARGENT is the co-founder of AllenWargent property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank">blogger</a>.</em></div>
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Interest-only loans stay low: Pete Wargent

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<div>SQM Research reported its always-excellent vacancy rates index today for the month of May 2018, with vacancy rates nationally at 2.1 per cent, down marginally from 2.3 per cent a year earlier. </div>
<div> </div>
<div>And the figures showed a fifth consecutive decline for vacancies in Brisbane.</div>
<div> </div>
<div>Brisbane's city-wide vacancy rate was down to 2.9 per cent, from 3.5 per cent a year earlier. </div>
<div> </div>
<div>This accords well with what we've been seeing on the ground in Brisbane.</div>
<div> </div>
<div>Indeed, family-appropriate dwelling stock is now often renting at the first open home, with numerous instances of multiple offers and rentals achieving above the asking price. </div>
<div> </div>
<div>There are still some notable pockets of pain, of course, most evidently in the inner-city high rise 'investor stock', where rental guarantees mask what is often optimistically pitched product.</div>
<div> </div>
<div>There are also more high-rise units in the post for the CBD, with the SkyTower construction now well underway. </div>
<div> </div>
<div>Generally speaking and across the city, however, the rental market is rebalancing as construction slows, thanks to positive interstate migration and somewhat pacier net overseas migration, and is in better nick than a year earlier.</div>
<div> </div>
<div>Plotted below are the vacancy rate figures by capital city smoothed on a 6mMA basis (not seasonally adjusted). </div>
<div> </div>
<div>As you can see, while Brisbane has now turned a corner, Sydney is now experiencing a high rate of unit completions with considerably more new apartment stock choice for renters. </div>
<div> </div>
<div>Sydney's vacancy rate of 2.5 per cent was well up from 1.7 per cent in May 2017. </div>
<div> </div>
<div class="separator"><img src="https://2.bp.blogspot.com/-R1Whw2TAGEA/Wyh6EPlQOqI/AAAAAAAAqpM/hLFxcsPFy80keuHyZQR13T_y6O6xMJCrgCLcBGAs/s640/SQM1.jpg" width="640" height="362" data-original-height="800" data-original-width="1410"></div>
<p> </p>
<div>Elsewhere, Perth is grinding its way back from its punishing rental market nadir (please don't email about terminology: if you don't like it substitute with an antonym; it's really not that difficult!), while Hobart remains a tight rental market despite a slight loosening year-on-year.<br><br>It will be interesting to see at what point rising prices in Hobart spark a significant supply response, in what is a relatively small city, though some developers are reluctant to stray from the mainland due to the additional logistical challenges. </div>
<div> </div>
<div>Melbourne's vacancy rate was the same as it was a year earlier at just 1.4 per cent, despite hectic rates of dwelling construction. </div>
<div> </div>
<div>The Adelaide rental market has generally been tightening for some time now.<br><br>And finally, Canberra's rental vacancies have plummeted since the experiment with housing taxation, and it remains to be seen when a new rental market equilibrium is reached. </div>
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Brisbane rental guarantees mask optimistically pitched apartment product: Pete Wargent

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<div>The ABS released its residential property price indexes for the March 2017 quarter.</div>
<div> </div>
<div>Although these figures are retrospective, they are always instructive, and reflected tighter lending conditions this quarter.<br><br>The total value of the dwelling stock was a nick lower at $6.9 billion - albeit well up from $4.4 trillion in 2011 - putting the mean price of residential dwellings at $687,700, and leaving housing market equity of around $5.1 trillion or so.<br><br>At the national level there was a quarterly decline in prices of 0.7 per cent, now leaving prices just 2 per cent higher than a year earlier.<br><br><div><img src="https://3.bp.blogspot.com/-9R8EKvyr-OM/Wyj1MIgAlSI/AAAAAAAAqqs/5G67ClzQiVoeyNpa8vqZZzemSMEV9LrEACLcBGAs/s640/A4.jpg" width="640" height="366" data-original-height="799" data-original-width="1395"></div>
<br>The quarterly price decline was mainly accounted for by the most populous city, Sydney, with Melbourne also posting a moderate 0.6 per cent decline. </div>
<p> </p>
<div><img src="https://2.bp.blogspot.com/-_I8O3aTkJ5o/WyiF8ypih3I/AAAAAAAAqpo/R3vnm6-7XlATYOwm8AF8keBapidus9SHgCLcBGAs/s640/A1.jpg" width="640" height="366" data-original-height="802" data-original-width="1395"></div>
<p> </p>
<div>Zooming in on the New South Wales capital, from a year earlier attached dwelling prices in Sydney were still 0.4 per cent higher, but house prices were 0.8 per cent lower (though all dwelling types were below their respective June 2017 cyclical peaks).  </div>
<div> </div>
<div><img src="https://3.bp.blogspot.com/-wNnHFlyHk1U/WyiF8slwydI/AAAAAAAAqpk/_RjURGNUegYrdMBsqwgjfrbrq_qZ-6NYgCLcBGAs/s640/A2.jpg" width="640" height="352" data-original-height="803" data-original-width="1457"></div>
<p> </p>
<div>Over the year to March 2018 the strongest price growth was seen in Hobart at 14.1 per cent, and the weakest was seen in Darwin at negative 6.5 per cent.<br><br>There was moderate year-on-year price growth in Melbourne (6.2 per cent), Canberra (3.8 per cent), Adelaide (2.6 per cent), and two-speed Brisbane (1.6 per cent), while Perth looks (-1.5 per cent) looks to be bottoming out.<br><br>Finally, there was all the usual explosive commentary about crashing transaction volumes at unprecedented lows (and imploding dwelling completions), as there is each and every quarter.<br><br>But, of course, these numbers are preliminary, and as such they are always apparently crashing or at unprecedented lows - until they are revised up next quarter.</div>
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ABS suggests Perth property downturn looks looks to be bottoming out: Pete Wargent

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<div>I took a look <a href="http://petewargent.blogspot.com/2018/06/unemployment-falls-to-54pc" target="_blank">here</a> at the employment growth figures during the week, which broadly showed that the unemployment rate in Australia is back down to where it was in 2013. </div>
<div> </div>
<div>The number of unemployed persons dropped sharply in the month of May, down by 26,800 to 714,600, taking the unemployment rate down from 5.6 per cent to 5.4 per cent. </div>
<div> </div>
<div>So that's the good news. </div>
<div> </div>
<div>The state making the most substantial inroads lately has been Victoria, with the number of unemployed persons down to 174,400 from 208,500 a year earlier.</div>
<div> </div>
<div>Very good news!</div>
<div> </div>
<div>The unemployment rate in Victoria has declined accordingly to 5.1 per cent, down from 6.1 per cent a year ago.</div>
<div> </div>
<div>So that's getting quite close to the 4.9 per cent of New South Wales. </div>
<div> </div>
<div>Like Sydney before it, Melbourne is enjoying the fruits of its construction boom.</div>
<div> </div>
<div>Some progress, then, but overall there are still more than 700,000 out of work, and there remains plenty of slack in the labour force nationally. </div>
<div> </div>
<div>A look at the trend chart for unemployed persons underscores this point.</div>
<div> </div>
<div>In October 2014 the two most populous states had a combined 442,900 unemployed persons, a figure that's since fallen by about 60,000 or 14 per cent. </div>
<div> </div>
<div class="separator"><img src="https://3.bp.blogspot.com/-wxFOA13nJc8/WyQxuec63KI/AAAAAAAAqkg/-i5Ua9cfvEAOpAUXxC42-sr0pzY3aOaDACLcBGAs/s640/A1.jpg" width="640" height="366" data-original-height="804" data-original-width="1400"></div>
<p> </p>
<div>Elsewhere, however, in aggregate there's been little meaningful progress. </div>
<div> </div>
<div>With regards to underemployment, the the trend rate declined to 8.5 per cent in May 2017, which is a bit below peak of 8.7 per cent seen in 2017. </div>
<div> </div>
<div>Meanwhile, the underutilisation rate also declined by 0.4 per cent to 13.9 per cent over the past year. </div>
<div> </div>
<div>Just about enough evidence here to suggest an ongoing improvement.</div>
<div> </div>
<div>PETE WARGENT is the co-founder of AllenWargent property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank">blogger</a>.</div>
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