<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 id="post-body-2344560504014387325" class="post-body entry-content">
<div>Just to add to all the other woeful data released today, the preliminary index of commodity prices was down by -3.5 per cent in November, following on from a substantially (downwardly) revised -6.6 per cent decline in October. </div>
<br><div class="separator"><a href="https://1.bp.blogspot.com/-ZpHxPyxhBS8/XeUWD1ePD_I/AAAAAAAAzJ8/cUV_89zPAP8WrA0ZWMBaCF4kiouWAPzKQCNcBGAsYHQ/s1600/Commodity.gif"><img src="https://1.bp.blogspot.com/-ZpHxPyxhBS8/XeUWD1ePD_I/AAAAAAAAzJ8/cUV_89zPAP8WrA0ZWMBaCF4kiouWAPzKQCNcBGAsYHQ/s640/Commodity.gif" width="640" height="498" data-original-height="465" data-original-width="597"></a></div>
<div> </div>
<div>Productivity figures released today were the worst in at least 25 years, and you can follow much of the other underwhelming news <a href="https://jamesfostermacro.blogspot.com/" target="_blank">here</a>. </div>
<div> </div>
<div>The Reserve Bank of Australia meets on Tuesday and the Board will need to work its way through a barrage of dire figures, including the ongoing nosedive in dwelling construction.</div>
<div> </div>
<div class="separator"><a href="https://1.bp.blogspot.com/-mxFbqv6uopM/XeUV7w27ZDI/AAAAAAAAzJ4/-6H8KzN91H8V7WueVcKddgFbefJyG2nQACNcBGAsYHQ/s1600/RW.jpg"><img src="https://1.bp.blogspot.com/-mxFbqv6uopM/XeUV7w27ZDI/AAAAAAAAzJ4/-6H8KzN91H8V7WueVcKddgFbefJyG2nQACNcBGAsYHQ/s640/RW.jpg" width="572" height="640" data-original-height="924" data-original-width="828"></a></div>
<br><div>Futures markets are unsurprisingly pricing further easing, with the economy, inflation, and wages growth all so mired in the doldrums.</div>
<div> </div>
<div>The question the Board will need to consider is: what exactly would waiting until February achieve?</div>
<div> </div>
<div>
<em><span>PETE WARGENT</span> 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><span> </span>
</div>
</div>
</body></html>

pwargent-M4siyDbqQY

Is a recession brewing? Pete Wargent

<html><body>
<p>EXPERT OBSERVER</p>
<div><strong><span style="text-decoration: underline;">Market mispricing?</span></strong></div>
<div> </div>
<div>If you'll kindly indulge a Tuesday night blog post after an evening talking, um, Australian monetary policy at the Clock Hotel (n.b. soft drinks only!), then herewith it follows. </div>
<div> </div>
<div>One week ago the October 2019 RBA Minutes were released, and they stated that, if needed, policy would be eased further <em><strong>to achieve full employment and the inflation target. </strong></em>
</div>
<div> </div>
<div class="separator"><a href="https://1.bp.blogspot.com/-DRBZQLy3u2w/Xa7Rmuaj5lI/AAAAAAAAyb0/9eymjiILxfw9dfOchYSpgYfk1z-bP_JdgCNcBGAsYHQ/s1600/RBA4.jpg"><img src="https://1.bp.blogspot.com/-DRBZQLy3u2w/Xa7Rmuaj5lI/AAAAAAAAyb0/9eymjiILxfw9dfOchYSpgYfk1z-bP_JdgCNcBGAsYHQ/s640/RBA4.jpg" width="640" height="202" data-original-height="263" data-original-width="831"></a></div>
<div> </div>
<div><em><span style="text-decoration: underline;">Source: RBA</span></em></div>
<div> </div>
<div>Then on October 18 the RBA Governor delivered a designedly upbeat speech to the IMF in Washington, which justifiably highlighted Australia's record unbroken stretch of economic growth among other Antipodean successes (including the floating currency, which often - though not always - moves in harmony with commodity prices). </div>
<div> </div>
<div>I didn't listen to the audio live, but while we don't need to link to all of the media pieces, across the board we saw a rash of articles suggesting that the RBA is done with cutting and has hosed down the prospect of further cuts.<br><br>A bit odd, it seemed.<br><br>
</div>
<div class="separator"><a href="https://1.bp.blogspot.com/-yOb6CoNIbAM/Xa7QjD8vWaI/AAAAAAAAybg/bQhRxx6datcUorhTVySG840RkCNgvS_ZACEwYBhgL/s1600/rba.jpg"><img src="https://1.bp.blogspot.com/-yOb6CoNIbAM/Xa7QjD8vWaI/AAAAAAAAybg/bQhRxx6datcUorhTVySG840RkCNgvS_ZACEwYBhgL/s640/rba.jpg" width="640" height="594" data-original-height="687" data-original-width="738"></a></div>
<div class="separator"> </div>
<div class="separator"> </div>
<div>I'll come back to this point, but I broke one of my own golden rules here: at the risk of sounding like an episode of <em>Yes, Prime Minister,</em> always listen to what was actually said, not what was said about what was being said!</div>
<div> </div>
<div><strong><span style="text-decoration: underline;">Inflation smoked</span></strong></div>
<div> </div>
<div>The latest employment figures were <a href="https://petewargent.blogspot.com/2019/10/the-gentlest-of-turning-points" target="_blank">modestly positive</a>, but the leading indicators are weakening and there was no indication that labour force slack will be reduced significantly, or that full employment will be on the horizon any time soon. </div>
<div> </div>
<div>Unemployment was still uppish at 5.2 per cent, and the underemployment rate remained <a href="https://petewargent.blogspot.com/2019/10/the-gentlest-of-turning-points" target="_blank">way high at 8.3 per cent</a>. </div>
<div> </div>
<div>Looking towards next Wednesday's inflation figures for the September quarter, it's hard to see where any inflationary pressures at all are going to come from, except for - yet again - smokes. </div>
<div> </div>
<div>There may well be some food price inflation due to the drought (which itself drags further on economic growth), but rental price growth will be at or close to record lows, and there may be some other offsetting<span> factors. </span>
</div>
<div> </div>
<div><span>Crunching through the numbers, with a hat tip to the ever-brilliant Justin Smirk at Westpac, spits out trimmed mean inflation of, say, 0.3 per cent, and the weighted median may well be even lower still.</span></div>
<div><span> </span></div>
<div><span>So that gets you to annual core inflation of about 1½ per cent for trimmed mean, and just 1.2 per cent for the weighted median, which is so far below the mandated target you could drive a truck through the gap (or an attractively priced new SUV the way new car sales have been tracking!). </span></div>
<div><span> </span></div>
<div><span>If all of this proves to be the case - and, by the way, the mid-point of the inflation target is 2½ per cent - why wouldn't the RBA be cutting with bells on?</span></div>
<div><span> </span></div>
<div><span>Financial markets have effectively priced out a November cut - and almost any further cuts at all - as far as I can tell because some people said that's what the Governor said...but is that what was said?</span></div>
<div> </div>
<div><strong><span style="text-decoration: underline;">What's the French word for nuance?</span></strong></div>
<div> </div>
<div>To recap briefly, we have a 'no' to full employment, and a resounding 'no' for being close to achieving the inflation target, which market expectations see as a distant dream. </div>
<div> </div>
<div>Now let's go back to the IMF speech, and more specifically the very brief Q&amp;A segment.</div>
<div> </div>
<div>And then to a question from the floor!<br><br>Question: has the RBA got 'a lot of work to do' in terms of delivering monetary easing (the cash rate is at 0.75 per cent), and should we assume negative rates or other unorthodox policies?</div>
<div> </div>
<div class="separator"><a href="https://1.bp.blogspot.com/-clR0lulvZts/Xa7QjR6iU9I/AAAAAAAAybk/Gr6cNLxerWop15HuL3ZX5MUE0_VVFXOOQCNcBGAsYHQ/s1600/rba2.jpg"><img src="https://1.bp.blogspot.com/-clR0lulvZts/Xa7QjR6iU9I/AAAAAAAAybk/Gr6cNLxerWop15HuL3ZX5MUE0_VVFXOOQCNcBGAsYHQ/s640/rba2.jpg" width="640" height="314" data-original-height="548" data-original-width="1111"></a></div>
<div>
<span style="text-decoration: underline;"><em><br></em></span><span style="text-decoration: underline;"><em>Source: RBA</em></span>
</div>
<div>To my mind, there's only one way that a central bank Governor could've answered that question given the circumstances, and here it is:</div>
<div> </div>
<div class="separator"><a href="https://1.bp.blogspot.com/-f-5mD8YZPyQ/Xa7QjEC41XI/AAAAAAAAybc/v_-AtHtN2jUVIO0rjd4o_QVHjJNPYIG5QCNcBGAsYHQ/s1600/rba3.jpg"><img src="https://1.bp.blogspot.com/-f-5mD8YZPyQ/Xa7QjEC41XI/AAAAAAAAybc/v_-AtHtN2jUVIO0rjd4o_QVHjJNPYIG5QCNcBGAsYHQ/s640/rba3.jpg" width="640" height="164" data-original-height="286" data-original-width="1112"></a></div>
<p> </p>
<div><em><span style="text-decoration: underline;">Source: RBA</span></em></div>
<p><br><strong><span style="text-decoration: underline;">November live</span></strong><br><br></p>
<div>Now I could be off beam here - it's happened on this blog at least once before! - but this answer, and perhaps some of the remainder of the transcript might have been misinterpreted...and the market pricing may in turn have been led astray. </div>
<div> </div>
<div>No central banker could have reasonably responded 'we have lots more to do' on easing, and the question on negative interest rates was always going to be batted to the fence, which it quite rightly was. </div>
<div> </div>
<div>The consensus view is that there will be no further easing this year, but if inflation is as low as it looks to be - essentially a sin tax on tobacco and a bit of drought-related food price inflation - then the November meeting could be a live one.<br><br>I've leaned heavily here on the analysis of Sophia Rodrigues of Central Bank Intel (if you're an institution you should subscribe to her forthcoming content), and another prominent markets analyst in Sydney (well, it's the Clock Hotel, you can work it out). </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>

Why the November RBA meeting may be live: Pete Wargent

<html><body>
<p>EXPERT OBSERVER</p>
<div>Some blessed relief for housing investors as the number of interest-only loans was finally off the lows in the June 2019 quarter. </div>
<div> </div>
<div>Following changes to serviceability rules further increases should hopefully be observed in the second half of 2019. </div>
<div> </div>
<div class="separator"><a href="https://1.bp.blogspot.com/-4O4lsCRwf3w/XXihJfNIBtI/AAAAAAAAxvI/VFB74vQ0fLkVPLfJdrzacn1_6lJS14RKQCNcBGAsYHQ/s1600/APRA3.jpg" target="_blank"><img src="https://1.bp.blogspot.com/-4O4lsCRwf3w/XXihJfNIBtI/AAAAAAAAxvI/VFB74vQ0fLkVPLfJdrzacn1_6lJS14RKQCNcBGAsYHQ/s640/APRA3.jpg" width="640" height="380" data-original-height="810" data-original-width="1360"></a></div>
<div> </div>
<div>The stock of interest-only loans continued to decline sharply to 21.8 per cent of total mortgages, however - comfortably the lowest share on record - having been at 39 per cent of the stock of outstanding mortgages by value as recently as early 2017. </div>
<div> </div>
<div>This shows how dramatically effective the interest rate differential was in lending and borrowing behaviours, alongside caps and certain other restrictions. </div>
<div> </div>
<div>Despite all the hype, there have been comparatively few signs of forced selling to date, with most borrowers managing the transition comfortably. </div>
<div> </div>
<div>In fact, new stock listings have remained exceptionally low. </div>
<p> </p>
<div class="separator"><a href="https://1.bp.blogspot.com/-qbdYgMvXRC0/XXihJBDCpMI/AAAAAAAAxvE/_ggtTS4Uevoc2v0bCDK5FXu4nIDb4s5lgCNcBGAsYHQ/s1600/APRA1.jpg" target="_blank"><img src="https://1.bp.blogspot.com/-qbdYgMvXRC0/XXihJBDCpMI/AAAAAAAAxvE/_ggtTS4Uevoc2v0bCDK5FXu4nIDb4s5lgCNcBGAsYHQ/s640/APRA1.jpg" width="640" height="360" data-original-height="808" data-original-width="1431"></a></div>
<div class="separator"> </div>
<div class="separator"> </div>
<div>There has been an impact on consumption, though, and NAB now forecasts <strong><span style="text-decoration: underline;">three</span></strong> further interest rate cuts over the next nine months, as indeed does ANZ.<br><br>In fact, NAB also sees a chance of unconventional measures on top of these cuts. </div>
<div> </div>
<div>Of the remaining interest-only loans Westpac retains the largest stock.</div>
<div> </div>
<div>Finally, the 5-year squeeze on higher-LVR lending has finally eased a little, with the majors steadily writing more loans at 80-90 per cent LVRs, which is also a relief to see.</div>
<div> </div>
<div class="separator"><a href="https://1.bp.blogspot.com/-kP14s7e2XO0/XXihJTZDa1I/AAAAAAAAxvA/xt8bOFD1EI4ph6UQAGgzC_czyaFZF6CYwCNcBGAsYHQ/s1600/APRA2.jpg" target="_blank"><img src="https://1.bp.blogspot.com/-kP14s7e2XO0/XXihJTZDa1I/AAAAAAAAxvA/xt8bOFD1EI4ph6UQAGgzC_czyaFZF6CYwCNcBGAsYHQ/s640/APRA2.jpg" width="640" height="368" data-original-height="807" data-original-width="1397"></a></div>
<p>Non-banks wrote a fair chunk of the loans at above 90 per cent LVRs, but there have been fewer exceptions reported as a share of total lending.</p>
<div><strong><span style="text-decoration: underline;">Brink of crisis</span></strong></div>
<div> </div>
<div>Overall, there are some tentative signs that banks are somewhat more willing and able to write mortgages, half a decade after the prudential tightening began.<br><br>Investment lending is now only about half of what it was at the peak, and some loosening is welcomed to allow first homebuyers an opportunity to buy, with prices also lower over the past two years.<br><br>Moreover, the banking Royal Commission brought Australia to the brink of a recession and a related banking crisis.<br><br>At the last count monthly building approvals have crashed to 12,944 (with unit approvals down 44 per cent year-on-year), which is a diabolical leading indicator for activity in the economy, while credit growth is also dreadfully weak.<br><br>Despite these atrocious numbers, there's often a palpable complacency evident in the housing market commentary.<br><br>A banking crisis can still be averted, but only if banks can get some credit flowing again...and soon. </div>
</body></html>

Has the interest-only cliff almost been negotiated? Pete Wargent

<html><body>
<p>Not too many surprises in the Treasurer's 2019 Federal Budget, then.</p>
<p>Tax cuts for households were effectively doubled from around $150 billion to about $300 billion, in rounded numbers. </p>
<p>Quite a substantial saving of tax for households was mooted to be released in stages, and more Aussies eventually set to be paying tax at 30%.</p>
<p>There were some more immediate handouts, something of a boost to infrastructure spending, and a broadening of the scope for business asset write-offs.</p>
<p>Nothing too unexpected nor dramatic, but an expansionary Budget nonetheless. </p>
<p><strong>Rentals tightening ex-Sydney</strong></p>
<p>Assuming the Opposition wins the election, as is widely expected, there may be changes to tax policy for housing. </p>
<p>But although this hasn't showed up in official data yet, the squeeze on property investors is now quietly beginning to hurt some of the people Labor's policy is designed to help, most notably renters.</p>
<p>I'd suspected this might happen, but had no worthwhile evidence for it until this week.</p>
<p>I've been in Melbourne for a few days, and agents are now reporting queues and multiple applications on some rental properties, and offers being made above asking rents prior to settlement for entrant landlords.</p>
<p>This is mainly taking place in the landlocked inner- and middle ring suburbs of Melbourne.</p>
<p>And granted it's far more so the case for trendy terraces and family homes than it is for apartments. </p>
<p>But it's the first hard evidence that a reduced supply of rental stock will eventually lead to an accommodation shortage and a spike in rents, with or without Labor's proposed changes. </p>
<p>The construction pipeline is also now shrinking after a record cycle for housing starts. </p>
<p><strong>Fixed rates falling</strong></p>
<p>Affordability in cities such as Sydney has improved over more than two years since the first quarter of 2017, with transactions taking place at a level about 15% lower than at the heady peak, on average, while incomes are also up modestly by about 5% over the past couple of years. </p>
<p>Unemployment rates in the two most populous cities and states have fallen to multi-decade lows at about 4 to 5%. </p>
<p>Funding costs have eased suddenly and sharply, globally the upwards pressure on interest rates has quickly reversed, and fixed mortgage rates in Australia are now falling. </p>
<p>Yesterday the Reserve Bank took a "surprising and significant step" towards a formal or explicit easing bias after a couple of years in a more balanced position, through amending the closing sentence of its monetary policy decision to a more dovish stance. </p>
<p>That paves the way for an interest rate cut some time between May and August, with another to follow later (markets are pricing about a three in 10 chance of a cut as soon as next month). </p>
<p>We aren't quite there yet, but the end of the downturn in housing market sentiment appears to be closer.</p>
<p>An official cash rate heading towards 1% will do that, of course, even when banks don't pass on the full 50 basis points. </p>
<p>Perhaps more important than all of the above is that there are some tentative signs of lending to investors picking up.</p>
<p>And if leading indicators are our thing, all industry participants I've spoken over the past week or two have reported a noticeable lift in activity of late...especially on the 'buy side'. </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><span> </span></p>
</body></html>

End of housing downturn draws closer: Pete Wargent

<html><body>
<div>EXPERT OBSERVER</div>
<div> </div>
<div>It looks as though tighter deposit requirements have run their course. </div>
<div> </div>
<div>Although December 2018 was a horrible quarter for mortgage lending in the lead-up to the end of the Royal Commission, the squeeze on loan-to-value ratios looks to be just about done. </div>
<div> </div>
<div>
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2019/3/22/interest%20only%201.jpg" alt=""> </div>
<div> </div>
<div>
<div>There are relatively few interest-only (IO) mortgages being written now, and this squeeze also looks to be about done. </div>
<div> </div>
<div>It's a smaller share of a smaller pie, and this is reducing household debt ratios as we speak (contrary to the incorrect claims you might read elsewhere). </div>
<div> </div>
<div>
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2019/3/22/interest%20only%202.jpg" alt=""> </div>
<div>
<div>The ADI stock of outstanding IO loans is now less than ¼ of mortgages by value, the lowest on record across the data series. </div>
<div> </div>
<div>This may sound a lot, but most IO loans revert to principal repayment relatively quickly, and anyway IO mortgages can make a lot of sense for borrowers with offset accounts. </div>
<div> </div>
<div>Many borrowers have opted to revert to principal repayment early for the cheaper mortgage rates on offer. </div>
<div>
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2019/3/22/interest%20only%203.jpg" alt=""> </div>
<div> </div>
<div>
<div>There was previously some debate surrounding what constituted a 'new' IO loan, but the interest-only 'cliff' is no longer a thing, since any mechanically forced reset no longer applies. </div>
<div> </div>
<div>It's in nobody's interests to see stressed borrowers go into arrears, so the reset should now be managed comfortably enough.</div>
<div> </div>
<div>
<div><strong>Left the building</strong></div>
<div> </div>
<div>It's interesting to note that partly thanks to switching across to cheaper rates, interest repayments have now declined to sit well below 10 per cent of household disposable income, down from 16 per cent a decade earlier.</div>
<div> </div>
<div>This is a very significant decline, and this hugely improved level of mortgage serviceability partly accounts for why mortgage arrears remain so low. </div>
<div> </div>
<div>Betwixt the Council of Financial Regulators and the Reserve Bank today the respective authorities confirmed today that there would be no further tightening of lending standards required, instead perhaps implying that banks rather need to write some business.</div>
<div>
<br><strong>From the RBA:</strong>
</div>
<div> </div>
<div><em>"From a financial stability perspective, prudent lending standards are a good thing. They ensure that households and banks are resilient to changes in circumstances. </em></div>
<div><em> </em></div>
<div>
<em>But there needs to be a balance. </em><em>The regulators are not proposing any further tightening in lending standards. </em>
</div>
<div><em> </em></div>
<div><em>And the appropriate amount of credit risk is not zero – banks need to continue to lend and that will inevitably involve some credit losses."</em></div>
<div> </div>
<div>Welcome news, while fixed mortgage rates are being cut widely as funding costs have declined. </div>
<div> </div>
<div>The regulators have left the building (for the time being!). </div>
<div> </div>
<div>
<div id="post-body-36613851729109642" class="post-body entry-content">
<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>
</div>
</div>
</div>
</div>
</div>
</div>
</body></html>

Interest-only cliff: no longer a thing - Pete Wargent

<html><body>
<p>Let's take a considered look at S&amp;P's mortgage arrears.</p>
<p>Basically unchanged throughout 2018 at 1.38% for 30+ day arrears.<br><br></p>
<div><img src="https://4.bp.blogspot.com/-Vo8SaZNYHOY/XGz3wSX9jCI/AAAAAAAAukc/e-f-TJrPVXQ6rwdaW0bW0UfV4GEgRBzxACLcBGAs/s640/A4.jpg" width="640" height="592" data-original-height="739" data-original-width="797"></div>
<p><br>90+ day arrears are now up a notch to 0.75%.</p>
<div>That's mainly related to major banks locking interest-only (IO) borrowers in as they roll over to P&amp;I loans.</div>
<div> </div>
<div>While this could be a drag on consumption most IO borrowers have buffers measured in years, and most didn't borrow anywhere near to their maximum capacity either.</div>
<div> </div>
<div>I'd argue that most of the little mortgage stress that there is has been inflicted by excruciating mortgage regulation rather than rising unemployment, mortgage rates, or over-stretched borrowers.<br><br>Weakness in Western Australia's economy is the other main contributory factor. </div>
<div> </div>
<div>In fact, job vacancies are at record highs according to the ABS surveys, both in absolute terms and as a share of the labour force. <br><br>The unemployment rate is also at the lowest level in 6½ years at just 4.98%, while the respective unemployment rates in New South Wales and Victoria are actually the lowest on record. </div>
<p> </p>
<div><img src="https://3.bp.blogspot.com/-hy-30cTR-MI/XGz3vrZOGoI/AAAAAAAAukU/RQ2aHjaL1rADByCjEKtZjfV83mPpaFXBgCLcBGAs/s640/A1.jpg" width="640" height="374" data-original-height="808" data-original-width="1377"></div>
<p> </p>
<div>The main deterioration in arrears has clearly been in Western Australia, now at 2.73% for 30+ day arrears.</div>
<p> </p>
<div><img src="https://2.bp.blogspot.com/-G6W_dyRJsAs/XGz3vsE1gzI/AAAAAAAAukY/Kwhx1eVp658hbZ3Qx5Ty-bm9WjanrF38wCLcBGAs/s640/A2.jpg" width="640" height="370" data-original-height="809" data-original-width="1395"></div>
<p><br>And non-confirming arrears remain close to their lowest ever level.<br><br></p>
<div><img src="https://3.bp.blogspot.com/-pZl-i00tyY0/XGz3vhO-h_I/AAAAAAAAukQ/nwOfbvqfZoQFE4QwTJSnZHLnQ8SeNzT_wCLcBGAs/s640/A3.jpg" width="640" height="370" data-original-height="811" data-original-width="1396"></div>
<p><br>Unemployment is low, mortgage rates are low, and there are plenty of job openings.<br><br>Banks just need to lend on a more reasonable and timely basis.</p>
</body></html>

Arrears pain is dull but mortgage regulation is excruciating: Pete Wargent 

<html><body>
<p>EXPERT OBSERVER<a href="http://petewargent.blogspot.com/2019/02/vic-closes-in-on-full-employment" style="font-family: Helvetica, Arial, sans-serif; font-size: 13px;"> </a></p>
<div id="post-body-310214148269562303" class="post-body entry-content">
<div><strong><span style="text-decoration: underline;">Wages tick along</span></strong></div>
<div><span> </span></div>
<div><span>More wages weakness reported in the December 2018 quarter, though I doubt it'll be enough to move the needle for the Reserve Bank's view too much. </span></div>
<div><span> </span></div>
<div><span>Wages growth was +0.6 per cent for the private sector, and +0.6 per cent for the public sector, seasonally adjusted, decimal point quibbles aside. </span></div>
<div><span> </span></div>
<div><span>Annual growth in private sector wages of +2.29 per cent was still plenty slower than in the public sector at +2.53 per cent.</span></div>
<div><span> </span></div>
<div><span>However, this was the 'fastest' annual pace of growth in private sector - if you can justifiably use the word fast in this context - in the four years since December 2014.</span></div>
<div><span> </span></div>
<div><span>And it's also well ahead of headline inflation, which could feasibly sink to just 1½ per cent next quarter on lower fuel prices. </span></div>
<br><div class="separator"><a href="https://1.bp.blogspot.com/-nBZjMNpaef8/XG0O7o2sr4I/AAAAAAAAulA/VZ8K7fIX80EqIqcd4CJw4MWLe2mV9yFEwCLcBGAs/s1600/A1.jpg" target="_blank"><img src="https://1.bp.blogspot.com/-nBZjMNpaef8/XG0O7o2sr4I/AAAAAAAAulA/VZ8K7fIX80EqIqcd4CJw4MWLe2mV9yFEwCLcBGAs/s640/A1.jpg" width="640" height="352" data-original-height="791" data-original-width="1436"></a></div>
<br><div>As noted here previously (h/t Justin Smirk, Westpac) Victoria has been creating a thunderous volume of job openings and is nipping along nicely towards full employment, so wages will almost certainly pick up here. </div>
<br><div class="separator"><a href="https://4.bp.blogspot.com/-MkBSZfoxosY/XG0O8haXWeI/AAAAAAAAulI/oH4WaHmCGAAdtoZwbf9GSyZRrOTO1xxdQCLcBGAs/s1600/A4.jpg" target="_blank"><img src="https://4.bp.blogspot.com/-MkBSZfoxosY/XG0O8haXWeI/AAAAAAAAulI/oH4WaHmCGAAdtoZwbf9GSyZRrOTO1xxdQCLcBGAs/s640/A4.jpg" width="640" height="380" data-original-height="801" data-original-width="1348"></a></div>
<br><div>Indeed, at the state level for all sectors Victoria (+2.7 per cent) and New South Wales (+2.4 per cent) have accounted for most of the improvement since the nadir, while sprightly Tasmania (+2.6 per cent) is resurgent from a low base. </div>
<br><div class="separator"><a href="https://4.bp.blogspot.com/-kOwyXgYwYH8/XG0O7pPxALI/AAAAAAAAulE/FB4OU2W9HY8VVAIUx81m-k742UxlNDErQCLcBGAs/s1600/A2.jpg" target="_blank"><img src="https://4.bp.blogspot.com/-kOwyXgYwYH8/XG0O7pPxALI/AAAAAAAAulE/FB4OU2W9HY8VVAIUx81m-k742UxlNDErQCLcBGAs/s640/A2.jpg" width="640" height="374" data-original-height="815" data-original-width="1393"></a></div>
<br><div>Not much joy here in Western Australia, though we should acknowledge that WA has seen by some margin the greatest increase in wages over the past two decades, so a bit of post-boom payback was perhaps due. </div>
<br><div class="separator"><a href="https://1.bp.blogspot.com/-OhfQGmdLmDE/XG0O7stD8dI/AAAAAAAAuk8/GXmnh0QeLxgHwBqZiLw-Lg_0WGNeBgGPgCLcBGAs/s1600/A3.jpg" target="_blank"><img src="https://1.bp.blogspot.com/-OhfQGmdLmDE/XG0O7stD8dI/AAAAAAAAuk8/GXmnh0QeLxgHwBqZiLw-Lg_0WGNeBgGPgCLcBGAs/s640/A3.jpg" width="640" height="382" data-original-height="820" data-original-width="1371"></a></div>
<br><div>At the industry level the strongest wages growth was seen in healthcare and social assistance (+2.8 per cent), and electricity, gas, water, and waste (+2.8 per cent), while the weakest growth was in IT &amp; Telcos (+1.6 per cent). </div>
<div> </div>
<div><strong><span style="text-decoration: underline;"><span>The wrap</span></span></strong></div>
<div><span> </span></div>
<div>
<span>Still pretty sluggish overall, but skilled job vacancies came in at a near </span><span>7-</span><span>year high today, so there's still probably just enough evidence that the jobs market might pull through, provided credit flows a bit more freely in 2019. </span>
</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>
</div>
<div class="post-footer"> </div>
</body></html>

More wage weakness but VIC close in on full employment

<html><body>
<p>An interesting series of charts was posted by Simon Pressley of Propertyology, showing how a number of Brisbane construction hotspots have seen the rental supply tightening back into balance.</p>
<p>Pressley showed tightening vacancy rates in Nundah (1.6%), Bulimba (2.8%), and Chermside (2.2%) as a few prime examples, while West End and Fortitude Valley were still chewing through the their glut in January 2019. </p>
<p>A bit closer in, here's New Farm and Teneriffe with the rental supply at the tightest level since 2013.</p>
<p><a href="https://1.bp.blogspot.com/-BoPSEDLF9Qc/XGclMjbarMI/AAAAAAAAud4/5aE0-lar1Zo7unykmnj8FjPOAHK2U-_JACLcBGAs/s1600/4005.jpg" target="_blank"><img src="https://1.bp.blogspot.com/-BoPSEDLF9Qc/XGclMjbarMI/AAAAAAAAud4/5aE0-lar1Zo7unykmnj8FjPOAHK2U-_JACLcBGAs/s640/4005.jpg" width="640" height="370" data-original-height="604" data-original-width="1042"></a></p>
<p><em>Source: SQM Research</em></p>
<p>Hamilton also recorded its lowest vacancy rate since 2013.</p>
<p>Commencements and units under construction have levelled off, while new approvals continue to slide back towards historic averages.</p>
<p><a href="https://3.bp.blogspot.com/-kFNTHPXnuUc/XGcmXCOSJnI/AAAAAAAAueE/Ux_4nPAi9IIsRykVgkeDyHzIpzust4x3gCLcBGAs/s1600/A1.jpg" target="_blank"><img src="https://3.bp.blogspot.com/-kFNTHPXnuUc/XGcmXCOSJnI/AAAAAAAAueE/Ux_4nPAi9IIsRykVgkeDyHzIpzust4x3gCLcBGAs/s640/A1.jpg" width="640" height="362" data-original-height="799" data-original-width="1409"></a></p>
<p>And while not all internal migrants head to the capital cities, as I write, this interstate migration to Queensland is at its highest level in about 13 years, those heady pre-crisis days when when the mining boom was in full swing. </p>
<p><a href="https://3.bp.blogspot.com/-IuA2xbvjQNk/XGcnJnkNq8I/AAAAAAAAueM/ej7ZA6C_KO0zK7dI3LOhGl_1W6hpYf1gACLcBGAs/s1600/NIM.jpg" target="_blank"><img src="https://3.bp.blogspot.com/-IuA2xbvjQNk/XGcnJnkNq8I/AAAAAAAAueM/ej7ZA6C_KO0zK7dI3LOhGl_1W6hpYf1gACLcBGAs/s640/NIM.jpg" width="640" height="372" data-original-height="796" data-original-width="1368"></a></p>
<p>While developers aim to manage risk as well as they can, there's always an element of forecasting of demand when strategies are put together.</p>
<p>For a while it looked as though the demand for units and rentals wouldn't keep up with the record rates of construction.</p>
<p>But it increasingly looks as though things have swung back into balance in the nick of time, as Queensland draws more and more internal migrants away from the major capitals. </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>
<div>
<div id="cpgAdsenseContainerId"><ins id="aswift_0_expand" data-ad-slot="3195360564"></ins></div>
</div>
</body></html>

Brisbane filling up with rental supply tightening: Pete Wargent

<html><body>
<div>EXPERT OBSERVATION</div>
<div> </div>
<div>It's a happy new year, and all that, but not so much for bankers, with lending growth continuing to flounder. </div>
<div> </div>
<div>The Reserve Bank's latest figures showed credit growth slowing to 4.4 per cent, down from 5.2 per cent a year earlier, and broad money growth at fresh quarter-century lows of just 1.86 per cent. </div>
<p> </p>
<div class="separator"><img src="https://1.bp.blogspot.com/-1I8fNGCXk6k/XCqUFoyKJPI/AAAAAAAAtsc/xXakammeXQAlHhvGQp9I_UB9FnMLp02cwCLcBGAs/s640/RBA1.jpg" width="640" height="370" data-original-height="801" data-original-width="1383"></div>
<p> </p>
<div class="separator"> </div>
<div>It was noteworthy to hear last week that the RBA has been watching the gross household debt-to-income ratio as a main point of concern, especially as <a href="http://petewargent.blogspot.com/2018/12/debt-ratio-revised-lower-now-falling" target="_blank">this ratio has already peaked and is now falling</a>. </div>
<div> </div>
<div>The distinction from <em>housing</em> debt-to-income was quite interesting (to me at least) as the lines between housing, small business, and personal credit are blurred at best, with small business loans often secured against a home, and so on. </div>
<div> </div>
<div>As you can see in the chart below, changes in the direction of housing credit growth have tended to lead changes in dwelling price growth. </div>
<div> </div>
<div>You can also see that no such change had occurred by the end of November 2018. </div>
<p> </p>
<div class="separator"><img src="https://1.bp.blogspot.com/-Dqi23bcB6-Q/XCqUHZwLEgI/AAAAAAAAtsg/RKoxndSCpVUL5OIvz-ZGLEb4G8XspSL5gCLcBGAs/s640/RBA3.jpg" width="640" height="378" data-original-height="795" data-original-width="1346"></div>
<p> </p>
<div>A simple credit impulse model as favoured by ANZ economists suggests that capital city (i.e. Sydney and Melbourne) dwelling price declines should moderate, although there are several factors unique to this cycle - not least the boom and bust in Chinese investors - that could throw the model a bit off course (this may have already happened to some extent since 2014). </div>
<p> </p>
<div class="separator"><img src="https://2.bp.blogspot.com/-hg19s7pQfzU/XCqUE6b5LmI/AAAAAAAAtsY/pvq8s6-v7MEhCHqgIJamHA7GeoF0vQUcQCLcBGAs/s640/RBA2.jpg" width="640" height="374" data-original-height="787" data-original-width="1341"></div>
<p> </p>
<div>Investor credit growth was already at the lowest level on record, and it fell to even lower levels last month, allowing APRA to remove another of its now-redundant arbitrary caps, this time on interest-only lending. </div>
<div> </div>
<div>Given the enormous growth in the population aged 25 to 34 in particular, this is now a remarkably low level of growth in investor credit, even if it did follow on from a boom. </div>
<div> </div>
<div class="separator"><img src="https://4.bp.blogspot.com/-LmCPOkyIAMs/XCqUDn5r1zI/AAAAAAAAtsU/43fTNK6yncENxThK3etijkbED9oHjaPAgCLcBGAs/s640/RBA.jpg" width="640" height="366" data-original-height="803" data-original-width="1402"></div>
<p> </p>
<div>Not surprisingly the growth in owner-occupier credit also declined for a ninth consecutive month.</div>
<div> </div>
<div>CoreLogic will release its latest home value index for the month of December, and this will show significant declines for Sydney and Melbourne in 2018.<br><br><strong><span style="text-decoration: underline;">The wrap</span></strong><br><br>In short, business credit was moderate, personal credit was negative, and housing credit has no pulse - let's hope that doesn't turn into a full-blown coronary.</div>
<div> </div>
<div>Happy New Year! </div>
<div> </div>
<div><em>PETE WARGENT is the co-founder of AllenWargent property buyers (London, Sydney) and a best-selling author and blogger.</em></div>
</body></html>

2018 finishes with housing credit having no pulse: Pete Wargent

<html><body>
<p class="post-title entry-title">EXPERT OBSERVER</p>
<div id="post-body-6685871502057582012" class="post-body entry-content">
<div>The Coalition, have been crushed in the Victorian elections at the hands of Labor.</div>
<div> </div>
<div>Voting was so one-sided it was effectively all over by 7pm.</div>
<div> </div>
<div>Not too long now until the Federal election, and it all looks pretty gloomy for Prime Minister Morrison.</div>
<div>
<br>Some interesting news that quietly slipped out on Friday is that the government's financials are in enormously good nick when compared to the Budget profile. </div>
<div> </div>
<div>The year-to-date cash balance showed a deficit nearly $9 billion ahead of the Budget profile (with the year-to-date deficit of $15 billion miles ahead of the $24 profile deficit).</div>
<br><div class="separator"><a href="https://4.bp.blogspot.com/-WO4oj3X5o9M/W_m_w6YrtmI/AAAAAAAAtCk/o39wSjwGIr0XdKBW8UmG97Gd04s3_cOtACLcBGAs/s1600/IMG_9793.PNG"><img src="https://4.bp.blogspot.com/-WO4oj3X5o9M/W_m_w6YrtmI/AAAAAAAAtCk/o39wSjwGIr0XdKBW8UmG97Gd04s3_cOtACLcBGAs/s640/IMG_9793.PNG" width="640" height="556" data-original-height="1165" data-original-width="1338"></a></div>
<div> </div>
<div><em><span style="text-decoration: underline;">Source: Commonwealth Government</span></em></div>
<div> </div>
<div>This is mainly thanks to a sharp fall in unemployment and stronger commodity prices, leading to a tremendous surge in tax receipts, combined with lower payments. </div>
<div> </div>
<div class="separator"><a href="https://3.bp.blogspot.com/-3NCvarkC4RU/W_m_w8UzUmI/AAAAAAAAtCo/C6xsiM1KABgk0kOYgMu4lUq_leqXKiAswCLcBGAs/s1600/IMG_9794.PNG"><img src="https://3.bp.blogspot.com/-3NCvarkC4RU/W_m_w8UzUmI/AAAAAAAAtCo/C6xsiM1KABgk0kOYgMu4lUq_leqXKiAswCLcBGAs/s640/IMG_9794.PNG" width="640" height="408" data-original-height="921" data-original-width="1441"></a></div>
<div> </div>
<div>The latest labour force figure<a href="http://petewargent.blogspot.com/2018/11/blessed-relief" target="_blank">s</a> revealed annual employment growth surging back up to 2½ per cent, or +308,100, with an unemployment rate at a six-year low of 5 per cent. </div>
<div><span> </span></div>
<div><span>The Budget has been in deficit for more than a decade, but on these numbers a surplus might be withing striking distance as soon as next month when the mid-year Budget update is normally scheduled. </span></div>
<div><span> </span></div>
<div><span>The electorate may not like them much - an understatement - but at least this is a strong result for the Coalition's management of the Budget. </span></div>
</div>
</body></html>

Pete Wargent

Editor's Picks

Have something to contribute?

Developments

New apartments

New townhouses

News

Pete Wargent

Editor's Picks

Receive the latest news stories to your inbox

Have something to contribute?

Developments

New apartments

New townhouses

News