Mark and Roy Makari are expanding their presence in Sydney’s South West with a second major proposal for Leppington, this time envisioning a 900-dwelling mixed-use development just 850 metres from their previously lodged tower trio on Fifth Avenue.

The latest application seeks approval for a multi-building project at <a href="https://www.apartments.com.au/new-apartments/230-rickard-road-leppington-nsw-2179">230 Rickard Road, Leppington</a>. The proposal seeks to establish a new focal point for the precinct through a high-density, transit-oriented development supported by diverse land uses.

According to the Scoping Report prepared for the Department of Planning, the scheme includes around 900 apartments across multiple towers, including 135 dwellings designated for affordable housing. A mix of market and subsidised apartments will be supported by ground-level activation through retail and office space, a childcare centre, and a hotel, forming a comprehensive urban precinct.

<img alt="Mixed Use Development 230 Rickard Rd Leppington" data-entity-type="file" data-entity-uuid="34797362-f3dc-4d84-8235-2657fc5f3bde" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Plan.png?VersionId=Uzckrz9tUpDQl5lX1_WMhjnv16bsr8wG" />

The Design Report by <a href="https://www.apartments.com.au/architects/studiosc-0">Studio SC</a> notes that the project “intends to deliver a high-quality, high-density built form that supports the vision for the Leppington Town Centre, integrating mixed-use outcomes and public domain upgrades.” The development is expected to be delivered in stages, although a precise timeline is yet to be confirmed.

The project will be assessed through a future State Significant Development Application, with the Scoping Report indicating the team will seek design excellence via a competitive process or through an expert design review panel. Early massing diagrams suggest a series of mid- to high-rise buildings framing a central landscaped spine, with emphasis on pedestrian permeability and public space.

The planning documentation flags a strong sustainability agenda, stating that the development will “respond to the urban heat island effect, incorporate water sensitive urban design, and prioritise active transport”.

<img alt="Mixed Use Development 230 Rickard Rd Leppington" data-entity-type="file" data-entity-uuid="369d7b54-1279-4cde-88ec-dcb215594414" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Podium_1.png?VersionId=QArL7B2kkLt63vl5xvL0FNV_ardAlez4" />

The proposal follows in the footsteps of the Makaris’ nearby Fifth Avenue site, where they’ve submitted plans for three towers comprising nearly 500 apartments, with 10 per cent dedicated to affordable housing. That project features commercial podiums, a childcare centre, and a new public park that would occupy more than a third of the site.

Both developments are situated within walking distance of Leppington Train Station and fall under strategic precinct plans promoting higher density housing. The town centre is undergoing substantial transformation, driven by state government planning reforms aimed at fast-tracking housing delivery.

Together, the two projects represent a combined ambition of nearly 1,400 new homes across just under two kilometres of central Leppington.

Staff Writer

First look: 900-home mixed-use precinct planned for Leppington

Leading Australian integrated property development group, <a href="https://www.apartments.com.au/developers/aqualand-australia">Aqualand</a>, has released the signature penthouses crowning its landmark AURA by Aqualand precinct at 168 Walker Street in North Sydney, unveiling Il Magnate and La Divina as the largest and most luxurious penthouses in the suburb.

With prices anticipated to commence from $15 million, and each accompanied by a new Porsche Carrera 911 valued at over $500K, the residences mark the culmination of <a href="https://www.apartments.com.au/buildings/aura-by-aqualand-north-sydney-168-walker-street-north-sydney-nsw-2060">AURA by Aqualand</a>’s decade-long journey and the beginning of its final sales chapter. 
&nbsp; 
Their release follows more than $850 million in record-breaking residential sales and the building’s completion and occupation.

[smartcode_project:default project_id=30959 project_image_fid=358868]

The Richards Stanisich-designed 284 sqm Il Magnate and 224 sqm La Divina penthouses, collectively known as The Icons of AURA, are conceived as grand luxury homes rather than apartments, with expansive proportions, elevated materiality and curated identities that reflect their status as one-off residences.&nbsp;

Il Magnate features a grande master suite, complete with substantial walk-in dressing area and ensuite, three other bedrooms, second ensuite and another bathroom, powder room, open plan kitchen, scullery, substantial dining area and generous living room divided by a feature fireplace, and a multifunction wintergarden, which is ideal for a study and adjoining office breakout space. &nbsp;

Meanwhile, the La Divina residence offers the same amenities, sans the powder room, on a slightly smaller alternate floor plan configuration.

[smartcode_project:default project_id=30959 project_image_fid=358863]

Each occupies half of AURA by Aqualand’s topmost 28th level, comes with four secure car spaces and pairs sweeping Sydney Harbour panoramas with large-scale living spaces, refined detailing and a level of craftsmanship and amenity rarely offered in the North Shore market.&nbsp;

Penthouse residents will also receive Etymon’s ‘Black Key’ private concierge and lifestyle management service, an invitation only offering providing the ultimate in bespoke personalisation, including a range of everyday discrete services, from dinner party management, grocery deliveries, pet feeding or plants watered, dinners, snacks and coffee deliveries, event ticket sourcing, right up to organising travel visas and international airfares. Rarely seen in Australian properties, the service provides residents the benefits of living in a world-class luxury hotel-style home, akin to The Ritz, or the Waldorf Astoria.

[smartcode_project:default project_id=30959 project_image_fid=358862]

<a href="https://www.apartments.com.au/interior-designers/richards-stanisich">Richards Stanisich</a>’s Director, Kirsten Stanisich, said the studio set out to craft residences that feel profoundly considered, contemporary and deeply connected to their setting.

“From the outset, we approached these penthouses with the sensibility of a grand Parisian residence - generous in scale, elegant in proportion and designed to feel more like a handcrafted home than an apartment," Stanisich said.

“Their elevated position and sweeping harbour outlook informed every decision, creating a rare connection between urban sophistication and natural calm. We shaped each space with expressive materiality, sculptural forms and bespoke detailing that invite touch and interaction.&nbsp;

“The result is a pair of residences defined by volume, light and an inherent softness - refined, flexible and deeply personal. These penthouses are unlike anything else in North Sydney, offering a sanctuary of true luxury framed by some of the city’s most remarkable views.”

For Aqualand’s Head of Sales &amp; Marketing, Alex Adams, the collaboration with Porsche underscores the shared ethos behind the residences.

“Aqualand’s collaboration with Porsche underpins both brand’s sharing an obsession with craftsmanship, design excellence, and enduring value," Adams said.

“Our penthouses are created for those who appreciate the finer details and expect the extraordinary at every touchpoint. Including a Porsche simply extends that experience beyond the residence - it’s a continuation of the lifestyle our buyers already live.”&nbsp;

[smartcode_project:default project_id=30959 project_image_fid=292862]

Aqualand’s Managing Director, Jin Lin, said the penthouses represent both the pinnacle of AURA by Aqualand and an important design benchmark for the company’s future pipeline.&nbsp;

“These stunning penthouses reflect the purest expression of Aqualand’s design ambition," Lin said.

“The unparalleled design intent makes them not only the glistening crown of AURA by Aqualand, but the crown of North Sydney itself. They’re essentially a thank you gift to a burgeoning community that deserves this level of quality and architectural consideration.&nbsp;

“We’re leveraging the unrivalled standard set here as the foundation for what comes next, including our upcoming Anderson Street, Chatswood; 15 Blue Street, North Sydney and Central Barangaroo projects. Purchasers of these penthouses will essentially be living inside the blueprint of Aqualand’s future.

“These landmark residences demonstrate how far North Sydney has evolved and the strength of demand for highly curated, bespoke luxury homes. They’re more than penthouses, they’re legacy residences.&nbsp;

“With AURA by Aqualand now a thriving new precinct with residents well and truly settled, and our in-house world-class lifestyle amenity activated, Il Magnate and La Divina represent a once-in-a-lifetime opportunity to secure an extraordinary piece of North Sydney’s future.”

[smartcode_project_cta:default project_id=30959]

Joel Robinson

Aqualand launches North Sydney penthouses with free Porsche Carrera 911

<a href="https://www.apartments.com.au/developments/bokarina-qld-4575">Bokarina</a> Beach has quietly evolved into one of the Sunshine Coast’s most complete coastal lifestyle precincts, defined not just by proximity to the ocean, but by how residential living, local retail and everyday amenity are stitched together.&nbsp;

Gardner Vaughan Group’s <a href="https://www.apartments.com.au/new-apartments/bask-bokarina-38-bokarina-boulevard-bokarina-qld-4575">Bask Bokarina</a> now represents the final residential chapter in that transformation.

[smartcode_project:default project_id=141609 project_image_fid=333360]

Over recent years, the Bokarina Beach precinct has taken shape as a walkable, community-oriented neighbourhood, anchored by beachfront access, Lake Kawana to the west, and a growing mix of cafés, specialty retail and public open space.&nbsp;

With Zinc Bokarina already delivered next door by <a href="https://www.apartments.com.au/developers/gardner-vaughan-group">Gardner Vaughan Group</a> (GVG), Bask is the last opportunity to buy a brand new apartment within the precinct, effectively rounding out a fully formed coastal village.

GVG has positioned Bask to strengthen that lifestyle framework. Nine ground-floor retail spaces are planned beneath the residences, extending Bokarina Boulevard’s existing activity and reinforcing the area’s everyday convenience, from casual dining and coffee to local services, within a short walk of the beach.

[smartcode_project:default project_id=141609 project_image_fid=333359]

The residential component comprises 135 apartments across two buildings, Mydas and Caretta, with a clear shift toward larger three- and four-bedroom layouts and penthouses. That mix reflects a maturing buyer profile in Bokarina, where demand is increasingly led by owner-occupiers and active downsizers seeking space, permanence, and connection to place rather than short-term coastal accommodation.

Design and amenity have followed the same logic. Residents will have access to a heated plunge pool, gym, private dining room with a full kitchen, landscaped communal gardens with barbecues and a firepit, and a shared herb and vegetable garden, facilities intended to support daily use rather than resort-style turnover. Pet-friendly features, including a dog wash bay, acknowledge both buyer expectations and the area’s dog-friendly beach, located around 250 metres from the site.

[smartcode_project:default project_id=141609 project_image_fid=333366]

“Bokarina has become one of the Sunshine Coast’s most desirable beachside communities, and Bask represents the very last chance to buy new in this location,” GVG Director Sam Gardner said.&nbsp;

“Our focus has been to create spacious, functional apartments that meet the needs of locals who want to downsize without compromise, as well as those seeking a full-time coastal retreat.”

Positioned between the Pacific Ocean and Lake Kawana, Bask apartments have been oriented to capture outlooks toward the water or the Glass House Mountains, reinforcing the project’s connection to its natural surroundings. With parks, beachfront paths, hospitals, retail and public transport already in place, Bask arrives at a point where the broader precinct is no longer emerging, but established.

Construction is expected to complete in Q3 this year, with apartments ready to move into this Spring.

[smartcode_project_cta:default project_id=141609]

Bask to complete Bokarina’s Sunshine Coast lifestyle precinct as final apartments are released

Property development giant <a href="https://www.apartments.com.au/developers/avid-property-group">AVID Property Group</a> is approaching completion, and sell-out, of its Surry Hills apartment development, <a href="https://www.apartments.com.au/new-apartments/the-rathbone-23-47-flinders-street-surry-hills-nsw-2010">The Rathbone</a>.

The Flinders St project has sold well over half of its 32 apartments, which will sit above two retail spaces.

Now hitting the market are the final 14 one-, two-, and three-bedroom apartments, which start from $1.15 million. AVID is targeting a mid-2026 completion.

[smartcode_project:default project_id=5947 project_image_fid=51208]

AVID General Manager New South Wales Danny Boubli said as more apartments are introduced to increase housing options in inner-city areas, homebuyers are searching for a &nbsp;sense of belonging in addition to location, convenience and value.&nbsp;

“There are very few opportunities for new developments in Surry Hills, and since acquiring the site, we’ve even seen one early purchaser merge two apartments plans together, reflecting the demand for a spacious, premium offering in a prime location,” Boubli said.&nbsp;

“Demand has been strong since we launched to market – we don’t see these final apartments staying on the market for long.”&nbsp;

Architectural firm Studio SC has designed the building which pays homage to the former 1900s Rathbone Terraces that once sat on the 990 sqm island site.

Boubil said the team has made every effort to create "truly liveable apartments", through&nbsp;functional floor plans, security, storage, and the inclusion of quality fittings.

[smartcode_project:default project_id=5947 project_image_fid=51207]

&nbsp;

Sustainable design has also been implemented throughout the development, with natural light flooding each apartment, ventilation throughout, extensive landscaping and where possible, materials with a high level of recycled content and low volatile organic compound paints have been used. &nbsp;

Apartments range in size from 57 sqm for the one-bedrooms to the large-scale 165 sqm three-beds which are priced at $2,575,000.

[smartcode_project_cta:default project_id=5947]

AVID launches final apartments at The Rathbone, Surry Hills

A wave of investment, renewal and precinct growth continues to shape the northern edge of Macquarie Park, where daily life is supported by a rare combination of university activity, corporate employment, major retail, and expansive green corridors. It’s this convergence of amenity and connectivity underpins the setting for <a href="https://www.apartments.com.au/developers/urban-property-group">Urban Property Group</a>’s <a href="https://www.apartments.com.au/new-apartments/la-vera-94-talavera-road-macquarie-park-nsw-2113">La Vera</a>, which has now topped out and is tracking toward completion in mid-2026.

Within this pocket of the precinct, residents move easily between the area’s key anchors. Macquarie Centre, home to more than 360 retailers, fresh food offerings, dining and entertainment, sits at the heart of local convenience and functions as a major transport interchange. The Metro, T1 rail line and extensive bus network place much of Sydney within quick reach, while surrounding arterial links support direct access to neighbouring districts.

[smartcode_project:default project_id=134951 project_image_fid=5829]

Green space remains a defining feature of the immediate environment. Lane Cove National Park stretches along the northern boundary of the precinct, offering bushland trails, cycling routes and quiet riverfront pockets. Shrimptons Creek and the campus grounds of Macquarie University extend these recreational networks, softening the urban setting and creating a daily connection to nature that informs the project’s architectural response.

<a href="https://www.apartments.com.au/architects/cox-architecture">Cox Architecture</a> have shaped La Vera around these contrasts. The building’s northern elevation adopts an organic, curvilinear form that mirrors the natural topography of the national park. Three sculpted forms soften the tower’s profile and encourage a stronger transition between indoor living areas, balconies and the broader landscape.

[smartcode_project:default project_id=134951 project_image_fid=223737]

Cox Director Felipe Miranda says the building’s outlook played a central role in the design process.

“The vision for the project was to conceive a building that adopted an organic and curvilinear form to the northern portion that faces the Lane Cove National Park… The residents that reside in the northern portion of the building benefit by having beautifully crafted curved balconies that speak to the natural context and heighten the relationship of their internal living spaces to the external balconies,” Felipe Miranda of Cox Architecture said.

Toward the city-facing side, the design shifts to a more urban expression. A gridded facade and extensive glazing capture CBD views, creating a dual strategy that blends ecological outlooks with metropolitan orientation.

[smartcode_project:default project_id=134951 project_image_fid=5827]

La Vera delivers 169 residences across one- to four-bedroom layouts, reflecting the needs of young families, downsizers, first-home buyers and investors seeking long-term certainty within a high-amenity location. From the project, residents can walk to Macquarie University, Macquarie Hospital and nearby corporate offices, reach national park trails within minutes, and enjoy retail and dining without relying on a car.

The project is delivered by Urban Property Group, a 4.5-star iCIRT-rated developer-builder with more than three decades of experience. The company has become a leader in adopting 10-Year Latent Defects Insurance (LDI), first introduced on its Parq Bexley development and now embedded into its pipeline.

[smartcode_project:default project_id=134951 project_image_fid=223727]

La Vera is the first development in Macquarie Park approved to offer this 10-year LDI policy, adding another layer of protection for purchasers and reinforcing the transparency of the construction process.

Urban Property Group CEO Patrick Elias says this assurance has become increasingly important for buyers navigating the off-the-plan market.

“Consumers are a lot more weary and a lot more concerned in buying off the plan than they ever have been… Having LDI is a tool to portray the confidence that we have in our product, and a confidence we want buyers to share,” Urban Property Group CEO Patrick Elias said.

Urban Property Group's in-house construction team is forecasting a mid-2026 completion, with <a href="https://www.apartments.com.au/project-marketer/home789">HOME789</a> appointed as the project marketer.

[smartcode_project_cta:default project_id=134951]

La Vera delivers a nature-connected address within Macquarie Park’s core

Petrol

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Significant land banking and value are set to be unlocked due to the major changes to Sydney's public transport and road network system.
Opportunities are likely to be added along major arterials across the city.
CBRE's Victor Sheu told SMH that the new WestConnex tunnel project would divert traffic flow and commuters from the M4, unlocking greater commercial opportunities in the city’s Inner West.
“Service stations are already among the most sought after commercial assets, with properties secured by five – ten year leases achieving record tight yields," Sheu said.
"This is further exemplified by the severe shortage of commercial investment properties readily available to satisfy the growing investment mandate across Sydney at present."
“With 16 service stations located along Parramatta Road, the current changes to the city’s infrastructure network present attractive investment and land banking opportunities – with these properties underpinned by strong underlying land values as well as long term leases for immediate income.”
Sheu said changes in the city’s transport network – coupled with the rise of sustainable energy – could prompt further changes in the service station sector.
“With more leading vehicle manufacturers taking a step towards alternate energy sources, introducing both hybrid and fuel-free models, there is likely to be decreased demand on petrol – and subsequently the stations that service them."
“Given service stations are currently trading at a market peak, we expect owners to look at reassessing the use of these assets – either looking at alternative commercial uses or expanding the service station model to incorporate more of a food and beverage element.”
Caltex has already expanded its service beyond the traditional service station offering, having recently partnered with breakfast cafe ‘The Foodary’.
“With service stations traditionally located on high exposure sites, there is a huge opportunity to expand the service station model to capitalise on the shifting business environment with a food and beverage component,” Sheu said.
“We’re likely to see more service stations adopt this strategy, in addition to some owners looking at re-evaluating their assets all together to maximize value.”
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j.ballantyne1990-6AQqhLzZaK

Sydney’s changing road network fuels major changes to service station market

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MAB Corporation has sold a state-of-the-art service station and convenience store complex on Melbourne's West Gate Freeway for $22.5 million, the largest sale of a petrol station anywhere in Australia for more than 10 years.
The sale reflects a 5.5 percent yield.
The property was sold by Savills Chris Jones, Clinton Baxter and Ben Hegarty, in conjunction with Dawkins Occhiuto's Andrew Dawkins and Walter Occhiuto.
They said the marketing campaign generated strong international and local interest, with the purchaser a Melbourne based private investor.
 
"In addition to numerous local bids, we also generated multiple offers from Asia and Europe, with purchasers particularly driven by the property’s enviable and unique position on the West Gate Freeway, one of Australia’s busiest roads," Chris said.
"It was an opportunity that rarely comes to market and unlikely to be repeated given the dearth of similar sites and properties offering such strong locational advantages."
Clinton said investor interest was also driven by the state-of-the-art facility and the first rate tenancy profile offering stable long-term cash flow.
"The property offered investors a brand new state-of-the-art facility with maximum depreciation benefits to complement the strong income from A-grade tenants Shell, Hungry Jacks and Red Rooster."
"It really ticked all the boxes of a superb commercial investment,’’ he said.
The property at 62 Cook Street, Port Melbourne was constructed and opened earlier this year.
Walter Occhiuto said the property was sold subject to leases to Viva Energy Australia (Shell/Coles Express), Hungry Jack’s and Red Rooster on 15 year terms, for a total net income of $1.41 million.
The brand new complex comprises nearly 700 sqm of buildings, 1200 sqm of canopy and 57 parking spaces on a large 10,000 sqm site.
 
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MAB’s West Gate sells for $22.5 million

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GUEST OBSERVER
According to the Australian Institute of Petroleum, the national average Australian price of unleaded petrol fell 3 cents per litre to 113.9 cents per litre in the week to April 24.
The national average wholesale (terminal gate) unleaded petrol price stands at 102.4 cents per litre, down 1.5 cents per litre on a week ago and still up 6.7 cents a litre on the lows set in mid-February.
The petrol figures have implications for retailers, especially petrol marketing groups.
What does it all mean?
The latest data on petrol prices confirms that - contrary to popular belief and media reports – pump prices do not tend to rise ahead of a long weekend. Motorists enjoyed the cheapest petrol ahead of ANZAC Day in 11 years, with the national average price falling by 3 cents a litre.
As always, competitive factors, the discounting cycles and variable lags between wholesale and retail prices determine how capital cities and regional centres fare. But at present the key driver of pump prices is the variations in the discounting cycle across the capital cities. In Sydney, prices have been falling for 18 days and in
Melbourne prices have been falling for almost four weeks, with petrol at around $1.08 a litre in both capital cities.
Brisbane prices have been falling for a fortnight and are closer to $1.14 a litre. Adelaide prices spiked a week ago and have started to drift lower. Adelaide motorists would benefit by holding off from filling up the family vehicle.
Not only have global oil prices eased in the past week but the Aussie dollar has held up relatively well – ensuring that any saving in regional oil prices should get passed through to the bowser within the next fortnight.
In the short term, oil production disruptions in Kuwait and speculation of a further lift in potential supply by major oil producers will keep oil markets volatile. CBA commodity analysts expect oil to potentially drift to US$30-35 a barrel in the near term.
Importantly cheap fuel continues to keep inflation contained and the Reserve Bank will keep an implicit easing bias in play over the next six months.
<a href="/images/2016/04/27/Screen%20Shot%202016-04-27%20at%209.57.20%20AM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/04/27/Screen%20Shot%202016-04-27%20at%209.57.20%20AM.png" alt="">
What do the figures show?
Petrol prices
According to the Australian Institute of Petroleum, the national average Australian price of unleaded petrol fell 3 cents per litre to 113.9 cents per litre in the week to April 24. The metropolitan petrol price fell by 4.9 cents to 113.6 cents per litre while the regional price rose by 0.9 cents to 114.5 cents per litre.
The national average Australian price of diesel petrol fell by 0.2 cents to 111.8 cents per litre in the week to April 24. Last week the metropolitan price fell by 0.3 cents to 110.6 c/l, while the regional average price was down 0.1 cents to 112.8 c/l.
Average unleaded petrol prices across states and territories over the past week were: Sydney (down 9.3 cents to 108.5 c/l), Melbourne (down 6.2 cents to 111.5 c/l), Brisbane (down 7.8 cents to 118.9 c/l), Adelaide (up 6.7 cents to 124.4 c/l), Perth (up 1.2 cents to 111.5 c/l), Darwin (down by 0.3 cents to 115 c/l), Canberra (down 0.7 cents to 115.9 c/l) and Hobart (unchanged at 117.4 c/l).
Today the national average wholesale (terminal gate) unleaded petrol price stands at 102.4 cents per litre, down 1.5 cents per litre on a week ago and still up 6.7 cents a litre on the lows set in mid-February. The terminal gate diesel price stands today at 98.5 cents a litre, up 0.2 cents a litre over the week.
Last week the key Singapore gasoline price rose by US$1.75 or 3.2 per cent to US$56.10 a barrel. However prices eased yesterday to US$55.30 a barrel. In Australian dollar terms the Singapore gasoline price rose by $2.13 a barrel (0.2 per cent) to $72.61 a barrel or 45.7 cents a litre. Yesterday prices eased to $71.73 a barrel or 45.1 cents a litre.
MotorMouth records the following retail prices for capital cities today: Sydney 108.1c; Melbourne 107.5c; Brisbane 113.7c; Adelaide 119.4c; Perth 120.5c; Canberra 107.5c; Darwin 113.8c; Hobart 117.8c.
What is the importance of the economic data?
Weekly figures on petrol prices are compiled by ORIMA Research on behalf of the Australian Institute of Petroleum (AIP). National average retail prices are calculated as the weighted average of each State/Territory's metropolitan and non-metropolitan retail petrol prices, with the weights based on the number of registered petrol vehicles in each of these regions. AIP data for retail petrol prices is based on available market data supplied by MotorMouth.
<a href="/images/2016/04/27/Screen%20Shot%202016-04-27%20at%209.59.05%20AM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/04/27/Screen%20Shot%202016-04-27%20at%209.59.05%20AM.png" alt="">
What are the implications for interest rates and investors?
Lower oil prices may add further downward pressure on energy stocks and increase volatility across sharemarkets. However cheap fuel is a positive for a number of sectors including transport and logistics.
Filling up the car with petrol is the single biggest weekly purchase for most families. So the savings being reaped at the petrol bowser are serving to boost discretionary spending in areas such as cafes, restaurants and takeaway outlets.
Savanth Sebastian is an economist for <a href="https://www.commsec.com.au/" target="_blank">CommSec</a>
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jchancellor-FAypfDUnLy

Cheapest ANZAC Day petrol in 11 years: CommSec's Savanth Sebastian

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GUEST OBSERVER
The headline CPI lifted 0.4 percent in Q4 compared to Westpac’s and the market’s 0.3 percent forecast. The annual rate is reported as 1.7 percent/yr compared to 1.5 percent/yr in Q3.
The core measures, which are seasonally adjusted and exclude extreme moves, rose 0.5 percent/qtr on par with the market’s expectation (Westpac was slightly higher at 0.6 percent/qtr). In the quarter, the trimmed mean gained 0.57 percent while the weighted median lifted 0.47 percent. The annual pace of the average of the core inflation measures is now 2.0 percent from 2.1 percent in Q3 (Q3 was revised from 2.2 percent).
<a href="/images/2016/04/19/Screen%20Shot%202016-04-19%20at%202.51.51%20PM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/04/19/Screen%20Shot%202016-04-19%20at%202.51.51%20PM.png" alt="">
Of note in Q4 was some signs of pass through from a weaker AUD in the stronger than expected rise in clothing &amp; footwear (1.6 percent/qtr). However, in the quarter this was more than offset by the weaker than expected print from housing (0.1 percent/qtr). 
The March quarter brings solid “knowns” but many ‘unknowns’ linger.
 The March quarter will bring the usual inflationary pressure from health and education. We also see meaningful seasonal increases in tobacco. Another solid known is the significant offset from the fall in automotive fuel prices. But, as always, a large number of unknowns remain. We don’t have access to a lot of the data the ABS uses and, in many cases, it is not possible to replicate the survey process the ABS uses causing many small errors along the way. We use many alternative sources and surveys to guide our forecasts but in the end a large part of the forecast remains a judgement call.
<a href="/images/2016/04/19/Screen%20Shot%202016-04-19%20at%202.53.44%20PM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/04/19/Screen%20Shot%202016-04-19%20at%202.53.44%20PM.png" alt="">
Automotive fuels are again a significant negative.
One of the most obvious events in the last few quarters has been the extreme volatility in the pump price of automotive fuels. From a peak at the start of the quarter of $1.20/l, the pump price fell to a low of $1.04/l by the end of February before finishing the quarter around $1.12/l. In terms of the quarterly averages, we forecast that the price of automotive fuels will fall around 11percent producing a significant —0.39ppt drag on the CPI. Fuel is again the most significant negative we have found for the December quarter CPI.
<a href="/images/2016/04/19/Screen%20Shot%202016-04-19%20at%202.57.22%20PM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/04/19/Screen%20Shot%202016-04-19%20at%202.57.22%20PM.png" alt="">
We have noted before that the fall in Australian pump prices has lagged behind the Australian dollar price of Singapore gasoline. But at the end of the March quarter there was a lift in the AUD value of Singapore gasoline that was not reflected in the pump price. We previously had wondered if Australian prices had room to fall further, even with no additional fall in Singapore prices, as the spread returned to more normal levels. For now, at least, that spread has been normalised by rising Singapore prices.
Fruit &amp; vegetables set to be a modest drag.
This quarter our forecast for a 3 percent rise in vegetable prices is more than offset by the 7 percent fall in fruit prices. All up the 2.4 percent fall in fruit &amp; vegetable prices will provide a 0.07ppt drag on the CPI.
There are the usual seasonal rises in cereal products, pork and food additives. However, we are careful to contrast the ongoing price discounting we are seeing in the very competitive groceries space against the ongoing pass through of the weaker AUD to import foodstuffs. Our forecasts see food &amp; non-alcoholic beverages contribute less than 0.1ppt to the CPI.
<a href="/images/2016/04/19/Screen%20Shot%202016-04-19%20at%202.58.30%20PM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/04/19/Screen%20Shot%202016-04-19%20at%202.58.30%20PM.png" alt="">
Seasonal rise in tobacco prices.
There is no indexing of tobacco in the March quarter but historically this quarter has tended to see strong rises anyway. We have taken the view that there is a clear risk of a strong rise in tobacco prices again this March quarter. We also note that the Inflation Gauge also reported solid price rises for tobacco in Q1.
Holiday travel costs will be reversed in Q3.
Holiday travel was a touch stronger than expected in Q4 following on from a weaker than expected print in Q3. So it would be tempting to put in a softer than usual forecast for Q1 but BITRE (Bureau of Infrastructure, Transport &amp; Regional Economics) data on best price economy airfares is pointing to just a modest decline, as good as flat. So with the Inflation Gauge highlighting some modest gains in domestic holiday travel we have pencilled in a 2percent rise in domestic holiday costs, added to the small 0.5percent rise in international holidays. The rise in international holidays is due to the trickle through impact of the depreciation of the AUD offsetting the usual out of season discounting.
Dwelling prices have moderated.
Dwelling prices have been very volatile of late. Melbourne dwelling prices were particularly volatile in 2015 but as the year ended we were surprised by a 0.2percent decline in Sydney dwelling prices - the softest print since Q4 2011. Just as we saw in Melbourne in 2014, we don’t expect this to be repeated and, in fact, a bit of a bounce 
Sydney dwelling prices is very likely.
Westpac is expecting dwelling prices to hold their more modest pace in Melbourne and Brisbane with the mix of outcomes in the other cities pointing to a 0.6percent gain in Q4.
Housing overall makes a positive contribution of 0.11ppts.
Rents are expected to remain on a very benign path with a gain of just 0.3percent (was 0.2percent in Q1 so there are downside risks to this forecast) with modest gains in other housing costs and utilities.
AUD depreciation will have a modest impact.
We also expect to see more, if still modest, pass through of the inflationary impact of the AUD depreciation. This will appear as a moderation to the usual seasonal discounting of household contents and services; our forecast for a 0.7percent fall follows on from a 0.6 percent rise in Q4 and an average fall of 1.1 percent in the previous three March quarters. We also expect to see more modest than usual discounting for clothing &amp; footwear, –1.1 percent/qtr compared to –2.5 percent/qtr in the last three March quarters.
Overall seasonality tends to be negative in Q1.
Despite the usual seasonal rise in pharmaceutical, heath services and education in Q1, the ABS now reports Q1 with a seasonal negative as our seasonally adjusted estimate, using the current ABS seasonal factors for March 2016, is 0.1ppt stronger at 0.5 percent than our headline CPI forecast. In fact rounding hides the full impact of the seasonal adjustment, 0.15ppts at two decimal places. Seasonal discounting in clothing &amp; footwear and household contents are now having a greater impact on seasonality in the survey than the annual price resetting in administrative prices.
There is an important caveat however: the ABS conducts concurrent seasonal re-analysis and the revisions to the seasonal factors can sometimes be quite significant. As such, we caution that we can’t be sure what the ABS will estimate as the seasonal impact in Q1. This matters as the components of the CPI are seasonally adjusted before they are trimmed for the core measures. As such, revisions to the seasonal factors can impact not just the current estimate of core inflation but also historical estimates.
<a href="/images/2016/04/19/Screen%20Shot%202016-04-19%20at%203.04.07%20PM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/04/19/Screen%20Shot%202016-04-19%20at%203.04.07%20PM.png" alt="">
Core inflation to remain at the bottom of the band, just.
Westpac is forecasting the average of the core measures to rise 0.6percent in Q4 with the annual pace holding flat at 2.0percentyr.
Traded goods &amp; services are forecast to fall 1.3 percent/qtr moderating the annual pace to 0.7 percent/yr from 0.8percentyr; non-traded prices are also forecast to rise 1.2 percent/qtr lifting the annual pace to 2.5 percent/yr from 2.3 percent/yr. Non-traded prices remain the key source of inflationary pressures with the focus still on housing and recreation.
Risks balaced for headline, downside for core.
A seasonally soft March quarter is a recent phenomena that emerged during the time of a very robust AUD which appears to have inspired greater post-Christmas sales discounting. This March, we are expecting some modest pass through from the weaker AUD but falling petrol prices and modest gains in housing costs will keep the lid on both headline and core inflation. While the Melbourne Institute Inflation Gauge points to a robust Q1 CPI print, we acknowledge downside risks to our core inflation forecast as core inflation has recently tended to surprise us on the soft side. 
 
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Justin Smirk is ‎senior economist, Westpac Group and can be contacted <a href="https://www.westpac.com.au/about-westpac/westpac-group/" target="_blank">here</a>.\
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