Boutique development and construction firm <a href="https://www.apartments.com.au/developers/hsn-property-group">HSN Property Group</a> is the latest to seek a new apartment development through the NSW Government's&nbsp;Housing Delivery Authority.

They've filed a State Significant Development Application for a nine-storey building across nine consolidated lots on <a href="https://www.apartments.com.au/new-apartments/2-16-spencer-street-rose-bay-nsw-2029">Rose Bay's Spencer Street</a>, just 400m from the centre of the affluent suburb.

“The site’s location and context make it well suited to support a more diverse and sustainable residential offering in the area,” the developer stated in community consultation materials.

&nbsp;

The plans are for 54 apartments, 14 of which will be dedicated to affordable housing. There will be a mix of two- and three-bedroom apartments.

The proposal aims to contribute to housing diversity in the Woollahra Local Government Area while taking advantage of recent Low and Mid-Rise Housing Reforms introduced under the NSW Housing SEPP, according to the Scoping Report prepared by Urbis.

The architecture, led by <a href="https://www.apartments.com.au/architects/mhn-design-union">MHNDU</a>, reflects a "contemporary design approach sensitive to the character of Rose Bay." Communal amenities will include a wellness area with a pool and sauna, a gym, a wine lounge, and landscaped spaces with barbecue facilities.&nbsp;

“The proposed development will offer a suite of premium communal amenities designed to enhance resident wellbeing, foster social connection, and promote a healthy lifestyle,” the project team notes in its public materials.

Three levels of basement parking are planned, and EV charging facilities will be included, aligning with sustainability and transport objectives. A comprehensive traffic study is underway to assess and manage local impacts.

With 54 apartments, the proposal by HSN will be one of the largest developments in Rose Bay for decades. It tops the 50 apartments soon to launch by Orosi on <a href="https://www.apartments.com.au/new-apartments/the-avenue-rose-bay-1-the-avenue-nsw-2029">The Avenue</a>, near the Royal Sydney Golf Club.&nbsp;

Joel Robinson

First look: HSN plans Spencer St, Rose Bay apartment project

Lendlease’s Barangaroo South precinct is officially complete, marking the culmination of a 15-year urban regeneration project that has revitalised Sydney’s harbourfront.&nbsp;

In 2009, the NSW Government’s Barangaroo Delivery Authority appointed <a href="https://www.apartments.com.au/developers/lendlease-development">Lendlease</a> as developer to transform what was once an inaccessible container port on the western edge &nbsp;of Sydney’s CBD into one of the city’s most thriving mixed-use destinations. Today, Barangaroo South is home to more than 1,800 residents, 23,000 workers, 95 retailers and welcomes 33,000 visitors each day. The precinct stands as an international benchmark for large-scale urban regeneration.&nbsp;

International Towers Sydney, the three flagship commercial buildings at the centre of &nbsp;Barangaroo South, together with engineered timber buildings Daramu House and &nbsp;International House, attracted major corporate tenants from the outset, including Westpac, &nbsp;PwC and KPMG, who are still there today. These workplaces remain some of the most &nbsp;sought after in Sydney’s CBD with over 95 per cent occupancy– a testament to the appeal of world-class, modern infrastructure alongside the precinct’s dining and entertainment that &nbsp;are a drawcard for businesses.&nbsp;

One Sydney Harbour, the three luxury residential towers designed by world-renowned architect Renzo Piano, has achieved more than $4 billion in sales since its launch in 2019, while setting new Australia property price records. This includes the three-level penthouse that crowns Residences One which sold for more than $141 million in 2019 – the most expensive individual residential property ever sold in Australia. &nbsp;

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Barangaroo South is also Australia’s first mixed-use carbon-neutral development, an accolade achieved through energy-efficient and innovative infrastructure, including a district cooling plant with a harbour water heat rejection system, a recycled water &nbsp;treatment plant, onsite solar and an embedded electricity network.

The precinct has maintained its Climate Active Carbon Neutral certification since 2019, affirming its &nbsp;reputation as the gold standard in large scale, sustainable urban renewal. Additionally, its &nbsp;world leadership status has been validated by the Green Building Council of Australia’s &nbsp;6 Star Green Star Communities recertification (Pilot v.2).

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First Nations cultural values were embedded throughout the planning and delivery of the project. The precinct honours Barangaroo, a prominent First Nations woman, through its &nbsp;name. Public art, street names, and design elements across the precinct reflect and &nbsp;celebrate First Nations cultures and connections to Country.&nbsp;

The project's completion positions Barangaroo South as a legacy urban transformation delivered through long-term partnerships and world-leading urban regeneration and placemaking capabilities. &nbsp;

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Tony Lombardo, Group CEO Lendlease, said&nbsp;Barangaroo South represents one of the most significant urban regeneration projects in Australia.

"[It] demonstrates what can be achieved through an ambitious vision, innovative placemaking, long-term commitment and strong partnerships. The precinct has changed the face of Sydney's waterfront, established new benchmarks &nbsp;for sustainable development, and provided a model for urban regeneration that continues &nbsp;to inform our approach to creating places that deliver long-lasting value.”&nbsp;

Tom Mackellar, CEO Development Lendlease, said&nbsp;Barangaroo South has reconnected the city to its harbour in a way that seemed unimaginable 15 years ago and turned it into a thriving precinct where people can live, work and gather on the harbour’s edge.&nbsp;

“This precinct is the result of countless contributions, led by the NSW Government who set the ambition, supported by investment partners who believed in Lendlease’s vision, imagined by architects and designers, shaped by consultants and artists, and brought to &nbsp;life by our dedicated construction teams. &nbsp;

“What we’ve created here is more than buildings – it’s the best of placemaking, sustainability, arts and culture and quality design. Barangaroo South has become an integral part of Sydney that will serve our city and economy for generations.”

Staff Writer

Barangaroo South’s 15-year transformation of  Sydney’s waterfront officially complete

CBE Asia Pacific has lodged plans for a prominent corner site in Fitzroy North, with a proposal that integrates state-significant affordable housing alongside heritage adaptation and new retail.

The application covers a consolidated 2,024 sqm parcel at 201–215 Queens Parade and 6–12 Dummett Crescent. The site includes the heritage-listed Former Clifton Motor Hill Garage, fronting Queens Parade, and vacant land to the rear abutting Dummett Crescent.

According to planning documents prepared by proUrban, the proposal seeks approval for a 12-storey residential building comprising 98 apartments, including a component of affordable housing, over a ground floor retail podium integrated within the heritage structure. Approximately 780 sqm of retail space will occupy the ground floor, while residents will have access to over 850 sqm of communal amenity.

The built form presents as two connected volumes: a 12-storey tower addressing Dummett Crescent and a five-storey volume fronting Queens Parade, the latter consistent with a separate Heritage Victoria permit granted in 2023. The tower reaches a maximum height of 38.26 metres, with upper-level setbacks of 14 metres from the western boundary to reduce visual bulk. A 1.5-metre footpath widening is proposed to Dummett Crescent Lane.

Parking is provided across four basement levels, accessed via Dummett Crescent, with a total of 142 car spaces and 143 bicycle spaces.

The architectural response by <a href="https://www.apartments.com.au/architects/cht-architects">CHT Architects</a> is framed by a need to reconcile new density with a sensitive heritage overlay. The Former Clifton Motor Hill Garage, identified as a place of State heritage significance, will retain its key façades, with demolition and reconstruction limited to approved elements.

As noted in the Heritage Impact Assessment, the proposal remains consistent with the Heritage Victoria permit, which allows "partial demolition, reconstruction and new works, involving the construction of a five-storey multi-use development and three basement levels".

Affordable housing has been embedded into the proposal under Clause 53.23, with specific apartment allocations aimed at enhancing housing diversity within the Queens Parade Activity Centre.

"The proposal is generally consistent with the relevant policy objectives and the intent of the Yarra Planning Scheme," proUrban states in its planning assessment, citing its alignment with strategic documents including Plan Melbourne and Victoria’s Housing Statement.

CHT Architects' plans emphasise a tiered design that acknowledges the site's varied interfaces—from the elevated Heidelberg Road ramp reserve to the recently built Clifton Views aged care facility to the north-east.

CBE Asia Pacific has not been previously active in this precinct, but the project joins a wave of higher-density residential proposals along the Queens Parade corridor, spurred by Melbourne’s broader push to increase affordable housing in well-connected inner-urban areas.

The site benefits from direct access to the Queens Parade tram corridor and proximity to Clifton Hill Station (approximately 200 metres), as well as green open spaces including Mayors Park and Raines Reserve. Clifton Hill Primary School and the Queens Parade retail village lie within walking distance.

First look: CBE Asia Pacific plans 100-apartment Jenkin House on Queens Parade, Fitzroy North

ALT Pasta, one of Melbourne’s most beloved inner-city pasta bars, has been confirmed as one of the first tenancies for the highly anticipated <a href="https://www.apartments.com.au/new-apartments/comme-prahran-182-194-commercial-road-prahran-vic-3181">Comme Prahran</a> development, marking an exciting next chapter for the cult favourite as it prepares to expand into the heart of <a href="https://www.apartments.com.au/developments/prahran-vic-3181">Prahran</a>.

Fresh off being named National Best Italian Restaurant at the 2025 Restaurant &amp; Catering Hostplus Awards for Excellence, ALT continues to solidify its reputation as a quietly confident leader in Melbourne’s dining scene. Lauded for its reinterpretation of Italian pasta through a Korean and Japanese lens, the restaurant has grown into a staple since opening three years ago, and its new Prahran outpost will only deepen its local impact.

“From the very beginning, ALT has been about respect - for tradition, for ingredients, and for the process,” shares Mino Han, ALT’s founder, a Korean-Australian chef whose vision is shaped by cultural duality and craftsmanship.&nbsp;

“We’re not trying to reinvent the wheel, just make something beautifully familiar, feel quietly special,” added Han.

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Positioned at the entrance to Comme Prahran and directly opposite the iconic Prahran Market, the new venue will celebrate the interplay between casual comfort and elevated detail. Designed in collaboration with Rooftop Architecture, the same team behind ALT’s flagship city location, the space will mirror the neighbourhood’s laid-back energy while staying true to the brand’s understated refinement.

Diners can expect a frequently changing menu that takes advantage of the market’s daily produce, along with set menu offerings exclusive to this location. A distinctive chef’s table and open kitchen format are also in the works, allowing guests to experience ALT’s signature intimacy and transparency in a new light.

ALT Prahran won’t replace the original venue; rather, it complements it.

“Our city site is like our heritage bottle; it’ll age gracefully. Prahran is where we’ll play, explore new ingredients, and bring something special to the community,” Mino notes.

[smartcode_project:default project_id=108413 project_image_fid=353584]

For Comme Prahran, a boutique development by Leeka that blends heritage with multi-dimensional wellness, ALT Pasta’s arrival signals a meaningful addition to its vision of cultural connection, food-first living, and local engagement.

“Being part of Comme is more than just opening a second venue. It’s about contributing to a neighbourhood with character, history, and a strong sense of community. That’s something we deeply relate to,” says Mino.

Sustainability and cultural identity are deeply embedded in the ethos of ALT. From ingredient sourcing to interior design, the new location will reflect both environmental mindfulness and a spirit of inclusion, embodying the values of Melbourne’s diverse, forward-thinking culinary scene.

Comme Prahran is scheduled for completion in late 2027, with ALT Pasta expected to be among the first tenancies to open its doors shortly after.

[smartcode_project_cta:default project_id=108413]

National best Italian restaurant ALT Pasta to open at Comme Prahran, bringing refined familiarity to Melbourne’s culinary heart

National BEST Italian restaurant ALT Pasta to open at Comme Prahran

&nbsp;Boutique development and construction firm Ryser has filed plans for its debut apartment building.

Ryser, founded by Jonthan Ryan and Wil Prosser, has sought to develop <a href="https://www.apartments.com.au/new-apartments/sorelle-4a-fern-place-woollahra-nsw-2025">Sorelle</a>, 28 new apartments at 4a Fern Place, Woollahra.

The&nbsp;750 sqm site on the edge of Bondi Junction falls within the Grafton Precinct Heritage Conservation Area, though it is currently vacant and not identified as a contributory item.&nbsp;

<a href="https://www.apartments.com.au/architects/woods-bagot">Woods Bagot</a> has been commissioned to design Sorelle, creating an eight and a nine-storey building with six apartments dedicated to affordable housing to support essential workers&nbsp;under the NSW Government’s low and mid-rise housing policy.

The dwelling mix includes 12 one-bedroom units, six one-bedroom affordable units, six two-bedroom units, and four three-bedroom residences.<img alt="4A Fern Place, Woollahra." data-entity-type="file" data-entity-uuid="86626941-772d-49c5-8d31-a8e42f44cdcc" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Fern%20bldg%20st.png?VersionId=tWIzXYX9gD60nP1L3..Z0BFbY5mafb36" />

According to the planning documents submitted to the Woollahra Council, the development responds to the complex interface of heritage fabric and urban infrastructure with two mid-rise residential buildings oriented to the north and designed to capitalise on sweeping views over Sydney Harbour and Bellevue Hill.&nbsp;

“The proposal aims to hero some of the brick detailing of Woollahra, celebrating the existing datums of Fern Place, whilst embracing the strong verticals of the Holy Cross Church and Bondi Junction with a nod to the historic iron works and iron rich soils of the area,” Woods Bagot noted in their Design Report.

&nbsp;

Only three car parking spaces are proposed, alongside 33 bicycle bays, in a move that leverages the site's proximity to Bondi Junction train station, just 400 metres away.

Architecturally, the material palette incorporates Corten steel and face brickwork to reference the site’s industrial past and local geological character. Landscaping features include a communal garden bridging the two buildings at ground level, landscaped setbacks to protect visual privacy, and a small corner park intended to soften the public interface.

<img alt="4A Fern Place, Woollahra." data-entity-type="file" data-entity-uuid="f71766d6-aa14-44df-9bc5-42f91890fd4a" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Fern%20bldg%20rear.png?VersionId=uh7u1rJ6NJF5OqyRs9iNJcy6R9ssgaXU" />

Ryser said Sorelle "brings together the best of both worlds, the intimacy of village life with the amenity and luxury of modern design."

The developer said the project marks the first of three developments they will be announcing shortly, a key step in their&nbsp;evolution as a builder-developer delivering meaningful, high quality urban outcomes across Sydney.

The expectation is the Woollahra LGA will become popular for developers with the signal from the NSW Government they will deliver&nbsp;<a href="https://www.apartments.com.au/developments/sydney-nsw" target="">Sydney</a>’s first new heavy rail station in more than a decade – enabling up to 10,000 new homes by rezoning land around&nbsp;<a href="https://www.apartments.com.au/developments/woollahra-nsw-2025" target="">Woollahra</a>&nbsp;and&nbsp;<a href="https://www.apartments.com.au/developments/edgecliff-nsw-2027" target="">Edgecliff</a>&nbsp;stations.

Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/next-stop-woollahra-train-station-delivering-up-to-10-000-new-homes-in-the-heart-of-sydney">Next stop Woollahra train station - delivering up to 10,000 new homes in the heart of Sydney&nbsp;</a>

First look: Ryser plans two apartment buildings on Woollahra, Bondi Junction border

Rba Insights

RBA Governor Statement

At its meeting today, the Board decided to:

maintain the cash rate target at 10&nbsp;basis points and the interest rate on Exchange Settlement balances of zero per&nbsp;cent

maintain the target of 10&nbsp;basis points for the April 2024 Australian Government bond

purchase government securities at the rate of $4&nbsp;billion a week and to continue the purchases at this rate until at least mid February 2022.

Prior to the Delta outbreak the Australian economy had considerable momentum. GDP increased by 0.7&nbsp;per&nbsp;cent in the June quarter and by nearly 10&nbsp;per&nbsp;cent over the year. Business investment was picking up and the labour market had strengthened. The unemployment rate had fallen below 5&nbsp;per&nbsp;cent and job vacancies were at a high level.

The recovery in the Australian economy has, however, been interrupted by the Delta outbreak and the associated restrictions on activity. GDP is expected to decline materially in the September quarter and the unemployment rate will move higher over coming months. While the outbreak is affecting most parts of the economy, the impact is uneven, with some areas facing very difficult conditions while others are continuing to grow strongly.

This setback to the economic expansion is expected to be only temporary. The Delta outbreak is expected to delay, but not derail, the recovery. As vaccination rates increase further and restrictions are eased, the economy should bounce back. There is, however, uncertainty about the timing and pace of this bounce-back and it is likely to be slower than that earlier in the year. Much will depend on the health situation and the easing of restrictions on activity. In our central scenario, the economy will be growing again in the December quarter and is expected to be back around its pre-Delta path in the second half of next year.

Notwithstanding the strong economic and labour market outcomes pre-Delta, wage and price pressures remain subdued. Over the year to the June quarter, the Wage Price Index increased by just 1.7&nbsp;per&nbsp;cent.

Housing prices are continuing to rise, although turnover in some markets has declined following the virus outbreak. Housing credit growth has picked up due to stronger demand for credit by both owner-occupiers and investors. Given the environment of rising housing prices and low interest rates, the Bank is monitoring trends in housing borrowing carefully and it is important that lending standards are maintained.

Very accommodative financial conditions will continue to support the recovery of the Australian economy. Borrowing rates are at record lows, sovereign bond yields are at very low levels and the exchange rate has depreciated over recent months. The fiscal responses by the Australian Government and the state and territory governments are also providing welcome assistance in supporting household and business balance sheets.

The Board&#39;s decision to extend the bond purchases at $4&nbsp;billion a week until at least February 2022 reflects the delay in the economic recovery and the increased uncertainty associated with the Delta outbreak. The Board will continue to review the bond purchase program in light of economic conditions and the health situation, and their implications for the expected progress towards full employment and the inflation target. These bond purchases, together with the low level of the cash rate, the yield target and the funding that has been provided under the Term Funding Facility, are providing substantial and ongoing support to the Australian economy.

The Board is committed to maintaining highly supportive monetary conditions to achieve a return to full employment in Australia and inflation consistent with the target. It will not increase the cash rate until actual inflation is sustainably within the 2&nbsp;to 3&nbsp;per&nbsp;cent target range. The central scenario for the economy is that this condition will not be met before 2024. Meeting this condition will require the labour market to be tight enough to generate wages growth that is materially higher than it is currently.

RBA holds rates, turnover declines following the virus outbreak: RBA Governor Philip Lowe's September 2021 meeting statement

The RBA has held interest rates at a record low 0.1 per cent at its September meeting.

RBA Governor Philip Lowe&#39;s said that housing prices are continuing to rise, although turnover in some markets has declined following the virus outbreak.

&quot;Housing credit growth has picked up due to stronger demand for credit by both owner-occupiers and investors, Lowe noted.

&quot;Given the environment of rising housing prices and low interest rates, the Bank is monitoring trends in housing borrowing carefully and it is important that lending standards are maintained.&quot;

In Finder.com.au&#39;s monthly RBA Survey, AMP Capital chief economist Shane Oliver said the lockdown and its hit to the economy&nbsp;has further delayed the time when the effective RBA conditions &ndash; full employment and 3% or more wages growth to sustain 2-3% inflation &ndash; will be met to justify a rate hike.

[smartcode_project:default project_id=103179 project_image_fid=167473]

Commentator Saul Eslake said he takes the RBA at its word&nbsp;when it says it won&#39;t begin tightening monetary policy until the labour market is sufficiently tight to generate wage inflation that&#39;s sufficiently strong to push &#39;underlying&#39; consumer price inflation sustainably into the 2-3% target range.

&quot;While I think that may well be sooner than the RBA&#39;s &lsquo;central case&rsquo; of 2024, I don&#39;t think it will be any earlier than mid-2023,&quot; Eslake says.

Dr Andrew Wilson from My Housing Market says that no change in fundamental economic weakness confirmed again with low wages growth despite robust labour market.

&quot;As usual &ndash; absolutely no plausible case on current data for higher rates over the foreseeable future &ndash; and then there is Covid.&quot;

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New research from Finder reveals that over half of&nbsp;homeowners across the country&nbsp;are concerned about interest rates increasing in the near future.

Around15% fear they may not be able to make their repayments once rates creep up.

Finder.com.au&#39;s head of consumer research Graham Cooke says some homeowners may have purchased beyond their means in the midst of the housing market frenzy.

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&ldquo;The past 12 months have seen property prices explode as record numbers of Australians have fled into the housing market,&quot; Cooke says.

&ldquo;Low interest rates have encouraged many buyers to purchase earlier than they otherwise might have for fear of missing out.

&ldquo;But not all of them will have budgeted for their monthly repayments to go up if or before the cash rate increases,&rdquo; Cooke said.

Finder analysis reveals the average monthly mortgage payments in Sydney are worth 76% of the average worker&rsquo;s after-tax earnings &ndash; the highest in the country. Melbourne (57%) is not far behind, followed by Canberra (49%) and Hobart (49%). Perth is at the bottom of the list, with the average mortgage costing a more reasonable 35% of average earnings.

RBA Governor Philip Lowe's said that housing prices are continuing to rise, although turnover in some markets has declined following the virus outbreak

RBA leave cash rate on hold at September meeting

Investor lending went up in May, according to the latest monthly data from the Australian Prudential Regulation Authority, but the growth rate was down on the prior wo months.

Strong growth in owner-occupied lending continued with a jump of 0.9 per cent.

Investor lending increased by 0.1 per cent (or $900 million) in May, down on April&#39;s growth rate of 0.3 per cent ($2.1 billion) and March, when it increased by 0.2 per cent ($1.6 billion).

<img alt="" height="519" src="https://s3-ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/pictures/article-images/rba_housing_charts.jpg" width="1200" />

Westpac had the largest rise in the owner-occupied portfolio to $236.9 billion in May but its investor loan portfolio dipped to $177 billion.

The CBA was the next biggest lender to investors with a $161 billion loan book, the the NAB at $100 billion and ANZ at $87 billion. The largest lender outside the big four was Macquarie at $27 billion and Bendigo &amp; Adelaide Band at $15 billion.

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APRA said &quot;the recent sustained growth in home lending continues to reflect robust borrower demand&quot; underpinned by record-low interest rates, government measures supporting first home buyers (such as the First Home Loan Deposit Scheme), and new home building, as well as an optimistic employment outlook.

APRA figures for May show a slowing in investor borrowing

jchancellor

May sees reduced growth in property investor lending: APRA

The RBA have held interest rates at a record low 0.1 per cent at the June meeting.

RBA Governor Philip Lowe noted in his meeting statement the increased borrowing by investors in the housing market.

&quot;Housing markets have strengthened further, with prices rising in all major markets. Housing credit growth has picked up, with strong demand from owner-occupiers, especially first-home buyers,&quot; Dr Lowe said.

&quot;There has also been increased borrowing by investors.

&quot;Given the environment of rising housing prices and low interest rates, the Bank will be monitoring trends in housing borrowing carefully and it is important that lending standards are maintained.

Finder&#39;s RBA Cash Rate Survey found that over three quarters of experts surveyed believe the cash rate won&#39;t rise until Q4 2022 or later.

Around 60 per cent of experts expect the cash rate to increase in 2023 or later.&nbsp; Just under 10 per cent believe the cash rate could increase before the end of 2021.

AMP Capital chief economist Shane Oliver said that while the economic recovery is faster than expected, the RBA&rsquo;s conditions for a rate hike are still far from being met.

&quot;The jobs market is still a long way from full employment, wages growth at 1.5% is way below the 3% plus pace necessary to sustain two to three per cent&nbsp;inflation and in any case inflation is still well below its target zone. So a rate hike remains some time off.&quot;

Despite market sentiment, and the RBA&#39;s steadfast view rates won&#39;t move until 2024, banks across Australia have been hiking their four-year fixed home loan rates.

According to Ratecity, at the start of the year&nbsp;were 32 four-year fixed rates under two&nbsp;per cent, including from three of the big four banks. Following BankVic&#39;s recent hike, there now isn&#39;t a single lender offering under two per cent for a four year fixed.

RateCity.com.au research director, Sally Tindall, said the pack was tightening as some lenders took some record low rates off the table, while others trimmed rates to become more competitive.

&ldquo;A number of record low rates have been relegated to the history books over the last two months, as lenders took some of the lowest rates off the table,&rdquo; Tindall&nbsp;said.

&ldquo;There are now just two rates that are still at record lows &ndash; Reduce Home Loan&rsquo;s variable rate at 1.77 per cent and BCU&rsquo;s 1-year fixed rate at 1.67 per cent. All the other lowest rates have been hiked.

&ldquo;We expect more fixed rates will rise after the RBA&rsquo;s term funding facility wraps up at the end of this month and we edge closer to the next cash rate hike.&quot;

Finder's RBA Cash Rate Survey found that over three quarters of experts surveyed believe the cash rate won't rise until Q4 2022 or later

RBA holds rates at June meeting

RBA Governor Philip Lowe&#39;s meeting statement

At its meeting today, the Board decided to maintain the current policy settings, including the targets of 10&nbsp;basis points for the cash rate and the yield on the 3-year Australian Government bond, as well as the parameters of the Term Funding Facility and the government bond purchase program.

The global economy is continuing to recover from the pandemic and the outlook is for strong growth this year and next. The recovery remains uneven, though, and some countries are yet to contain the virus. Global trade in goods has picked up strongly and commodity prices are mostly higher than at the start of the year. However, inflation remains low and below central bank targets.

Sovereign bond yields have been steady recently after increasing earlier in the year due to the positive news on vaccines and the additional fiscal stimulus in the United States. Inflation expectations have lifted from near record lows to be closer to central banks&#39; targets. The 3-year government bond yield in Australia is at the Board&#39;s target of 10&nbsp;basis points and lending rates for most borrowers are at record lows. The Australian dollar remains in the upper end of the range of recent years.

The economic recovery in Australia has been stronger than expected and is forecast to continue. This recovery is especially evident in the strong growth in employment, with the unemployment rate falling further to 5.6&nbsp;per&nbsp;cent in March and the number of people with a job now exceeding the pre-pandemic level.

The Bank&#39;s central scenario for GDP growth has been revised up further, with growth of 4&frac34;&nbsp;per&nbsp;cent expected over 2021 and 3&frac12;&nbsp;per&nbsp;cent over 2022. A pick-up in business investment is expected and household spending will be supported by the strengthening in balance sheets over the past year. The unemployment rate is expected to continue to decline, to be around 5&nbsp;per&nbsp;cent at the end of this year and around 4&frac12;&nbsp;per&nbsp;cent at the end of 2022.

Despite the strong recovery in economic activity, the recent CPI data confirmed that inflation pressures remain subdued in most parts of the Australian economy. A pick-up in inflation and wages growth is expected, but it is likely to be only gradual and modest. In the central scenario, inflation in underlying terms is expected to be 1&frac12;&nbsp;per&nbsp;cent in 2021 and 2&nbsp;per&nbsp;cent in mid&nbsp;2023. In the short term, CPI inflation is expected to rise temporarily to be above 3&nbsp;per&nbsp;cent in the June quarter because of the reversal of some&nbsp;COVID-19-related price reductions.

Housing markets have strengthened further, with prices rising in all major markets. Housing credit growth has picked up, with strong demand from owner-occupiers, especially first-home buyers. Given the environment of rising housing prices and low interest rates, the Bank will be monitoring trends in housing borrowing carefully and it is important that lending standards are maintained.

At its July meeting, the Board will consider whether to retain the April 2024 bond as the target bond for the 3-year yield target or to shift to the next maturity, the November 2024 bond. The Board is not considering a change to the target of 10&nbsp;basis points. At the July meeting, the Board will also consider future bond purchases following the completion of the second $100&nbsp;billion of purchases under the government bond purchase program in September. The Board is prepared to undertake further bond purchases to assist with progress towards the goals of full employment and inflation. The Board places a high priority on a return to full employment.

The date for final drawings under the Term Funding Facility is 30&nbsp;June 2021. Given that financial markets in Australia are operating well, the Board is not considering a further extension of this facility. Authorised deposit-taking institutions have drawn $100&nbsp;billion so far and a further $100&nbsp;billion is currently available. Given the facility provides funding for 3&nbsp;years, it will continue to support low funding costs in Australia until mid&nbsp;2024.

The Board is committed to maintaining highly supportive monetary conditions to support a return to full employment in Australia and inflation consistent with the target. It will not increase the cash rate until actual inflation is sustainably within the 2&nbsp;to 3&nbsp;per&nbsp;cent target range. For this to occur, the labour market will need to be tight enough to generate wages growth that is materially higher than it is currently. This is unlikely to be until 2024 at the earliest.

The RBA kept the official cash rate at record lows at its May meeting

Housing markets strengthen further in all major markets: RBA Governor Philip Lowe's May 2021 meeting statement

The RBA maintained its current policy settings at its May meeting, keeping the official cash rate at a record low 0.1 per cent.

RBA governor Philip Lowe said housing markets have strengthened further, with prices rising in all major markets.

&quot;Housing credit growth has picked up, with strong demand from owner-occupiers, especially first-home buyers,&quot; Mr Lowe said.

&quot;Given the environment of rising housing prices and low interest rates, the Bank will be monitoring trends in housing borrowing carefully and it is important that lending standards are maintained.&quot;

The RBA stood by their view that rates won&#39;t likely change until 2024. Around&nbsp;65 per cent of experts surveyed in Finder&#39;s monthly RBA Cash Rate Survey believe there won&#39;t be any rate change until 2023.

AMP Capital chief economist Shane Oliver is one who believes a rate change will come before 2024.

&quot;While&nbsp;the economy is recovering faster than expected, the RBA is still a long way away from seeing its stated requirements for a rate hike &ndash; being a tight jobs market, wages growth well above 3% and actual inflation sustainably within the 2-3% target range,&quot; Oliver said.

&quot;A rate hike is still a fair way off although I think it will come before the RBA&rsquo;s expectation for &lsquo;2024 at the earliest&rsquo;.&rdquo;

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The clear&nbsp;message from the RBA however&nbsp;hasn&#39;t stopped banks changing their fixed rates, with Westpac, including their subsidiary banks including St George, Bank of Melbourne and BankSA, lifting their four-year fixed from 1.89 per cent to 2.19 per cent. They also raised their five-year fixed to 2.49 per cent.

The four-year rise copied the move by CBA in March, however CBA reduced its one and two-year fixed rates at the same time.

UHomeLoan also raised their three-year fixed by 10 basis points to 1.85 per cent.

&ldquo;This sudden wave of lenders increasing longer-term rates and decreasing shorter-term rates reveals a strategy to lock their customers in for shorter time periods,&quot; Graham Cooke, insights manager at Finder said.

&ldquo;This can be seen as a bet on variable rates increasing sooner than expected. It also reveals that the tide could be turning on our historically low fixed home loan rate environment.&quot;

AMP Capital chief economist Shane Oliver is one who believes a rate change will come before 2024.

RBA hold rates at May meeting

Australia&#39;s inflation, a key metric in the RBA&#39;s future interest rate calls, rose 0.6 per cent over the March quarter, according to data released by the ABS.

The consumer price index (CPI)&nbsp;came in materially lower than what was forecasted across markets and broadly in line with the RBA&#39;s below market expectation.

Westpac was forecasting a one per cent lift in the CPI, with AMP Capital forecasting a 0.9 per cent rise.

The RBA&nbsp;say they will not increase the cash rate until actual inflation is sustainably within the two to three per cent range.

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For this to occur, wages growth will have to be materially higher than it is currently, which&nbsp;will require significant gains in employment and a return to a tight labour market, the RBA noted at its April board meeting.

The latest results will unlikely change the RBA&#39;s thinking that rates won&#39;t move until 2024 at the earliest.

CPI was 1.1 per cent up annually, compared to the forecasted 1.4 per cent.

New dwelling prices declined 0.1 per cent over the quarter, namely due to the impact of the Federal Government&#39;s HomeBuilder grant and similar grants by Western Australian and Tasmania state governments.

&quot;Without the offset from these grants, the price of new dwelling would have risen, reflecting increases in materials and labour prices in response to strong demand&quot;, head of prices statistics at the&nbsp;ABS&nbsp;Michelle&nbsp;Marquardt said.

&nbsp;

The consumer price index (CPI) came in materially lower than what was forecasted across markets



RBA unlikely to advance interest rate moves after lower than expected inflation figures

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As expected the Board of the Reserve Bank maintained its current policy settings, including the targets of 10 basis points for the cash rate and the yield on the 3 year Australian Government bond, as well as the parameters of the Term Funding Facility and the government bond purchase program.

Since the last Board meeting on March 2 the most important economic developments have been the announcement of the surprise fall in the unemployment rate from 6.4% in January to 5.8% in February and reports of extraordinary strength in the national housing market.

The unemployment report has prompted only a minor change in the Governor’s rhetoric from “the economy is still operating with considerable spare capacity and the unemployment rate remains higher than it has been for some years” (March) to “the economy is operating with considerable spare capacity and unemployment is still too high.” (April).

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The key sentiments from March are repeated, “it will take some time to reduce this spare capacity and for the labour market to be tight enough to generate wage increases that are consistent with achieving the inflation target” and “wage and price pressures are subdued and are expected to remain so for some years.”

Rising house prices are recognised, “prices rising in most markets.” But the same approach we saw in March is adopted where lending standards are emphasised, “the Bank will be monitoring trends in housing borrowing carefully and it is important that lending standards are maintained.”

Importantly the Governor points out that “investor credit growth remains subdued.”

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It is interesting that he did not comment, at this stage, on the recent trend for new lending for housing. In February new lending for investors lifted by 4.5% in the month compared to -0.8% for “upgraders” and -4% for First Home Buyers.

In fact the six month growth rate for new investor finance approvals (31%) is now above the upgraders’ rate (24%) and First Home Buyers (30%). No doubt the Board will be watching these trends very closely.

The commitment to the 3 year bond rate target at 0.1% was confirmed and it was noted that “The Board remains committed to the 3 year government bond yield target of 10 basis points” while noting that “Later in the year it will consider whether to retain the April 2024 bond as the target bond or to shift to the next maturity.” That would be the November 2024 bond – a likely decision which would be supported by the consistent observation that “the Board does not expect these conditions (necessary to increase the cash rate) to be met until 2024 at the earliest.”

Insisting that it will be 2024 “at the earliest” is not consistent with restricting the target bond to an April 2024 maturity.

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As with March the Governor remains supportive of the bond purchase program, “the Bank is prepared to undertake further bond purchases if doing so would assist with progress towards the goals of full employment and inflation.” Note that in the March Statement the Governor indicated his preparedness to extend the policy “if necessary” – the April sentiment seems even more supportive of the bond buying approach.

Since the March Board meeting the AUD has fallen by around US 1.5c but there is no indication of “job done” with respect to the bond buying program which is directly aimed at lowering the AUD (recall that Assistant Governor, Financial Markets, Chris Kent recently estimated that the QE program had lowered the AUD by up to 5%).

Conclusion

Westpac recently confirmed its views that the Bank will extend the new $100 billion bond purchasing program (which is set to begin next week) with a further $100 billion when the new program concludes in the week ending August 27.

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However, we expect that the new program which we expect to begin in the following week will be at a slightly slower pace ($4 billion in purchases rather than $5 billion) so that it can extend into early March. Maintaining the $5 billion pace for the next program would see it concluding in late January requiring the Bank to make an announcement about any future program at the December Board meeting.

We expect that the Board will decide to taper the following program to $50 billion but such a decision will be better made at the February 2022 Board meeting rather than in December when much more information, including the intentions of the Federal Reserve, might be available.

Consistent with the tapering decision we also expect that, having extended the Yield Curve Control policy to target the November 2024 bond, the Board will announce that it is not extending Yield Curve Control beyond the November bond, making the February 2022 Board meeting an important milestone in the Bank’s long road to normalising policy.

Bill Evans is the chief economist at Westpac.
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The Governor’s Statement following the April Board meeting is as expected

bevans

Rising house prices recognised in April RBA minutes: Westpac's Bill Evans

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The RBA have stood firm on record low interest rates at the April 2021 cash rate meeting, nothing that house prices are continuing to soar across across the nation.

The board, with newly appointed board members Carolyn Hewson and Alison Watkins, noted that housing markets have strengthened further, with prices rising in most markets.

"Housing credit growth to owner-occupiers has picked up, with strong demand from first-home buyers," RBA Governor Philip Lowe's meeting statement read.

The statement concluded with Lowe stating the board does not see a cash rate hike until 2024 at the earliest.

There are a few economists who believe there will be a cash rate hike by the end of the calendar year.

Finder's RBA cash rate survey saw six out of its 39 experts and economists it surveys every RBA month suggest there will be a rate hike, with Dale Gillham, the chief analyst at Wealth Within, expecting a rise as early as July.

Tony Makin from Griffith University, Nicholas Gruen at Lateral Economics, Noel Whittaker, QUT, Jakob B. Madsen, University of Western Australia and Clement Tisdell, UQ-School of Economics, all predict a cash rate rise in Q4 2021.

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Griffith University's professor of economics Tony Makin says that despite what the RBA is saying, a cash rate rise will be inevitable should inflationary pressures suddenly build here and overseas.

"Massive government bond issues worldwide to cover large ongoing budget deficits will also continue to exert upward pressure on bond yields.

"Although asset price inflation is not officially targeted, continued escalation of housing and share prices also suggests tighter monetary policy could be warranted sooner than expected."

Harley Dale, chief economist at CreditorWatch, says the decision comes as no surprise with the RBA injecting substantial liquidity into Australia’s financial system.

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"As a result, Australia’s economy appears to be firmly in recovery mode, but we tend to gauge the situation based on aggregates and averages, which is misleading," Dale says.

“There is talk of re-emerging inflationary pressures as the economy regrows itself. That would be a good thing for the Australian economy, but as long as we stay below the aggregate the economic recovery remains fractured. 

“There are still significant parts of the economy being left behind despite overall improving conditions. If we can sustain an improvement in unemployment rates and the broader labour market, we will be well on our way to a full-blown recovery. We’re not there yet though and monthly statements from the RBA will likely reflect that fact in coming months.”
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There are a few economists who believe there will be a cash rate hike by the end of the calendar year

No cash rate rise to 2024: RBA holds interest rate at record low 0.1 per cent at April 2021 meeting

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Expert Observer

At its meeting today, the Board decided to maintain the current policy settings, including the targets of 10 basis points for the cash rate and the yield on the 3-year Australian Government bond, as well as the parameters of the Term Funding Facility and the government bond purchase program.

The rollout of vaccines is supporting the recovery of the global economy, although the recovery is uneven. While there are still considerable uncertainties regarding the outlook, the central case has improved. Global trade has picked up and commodity prices are mostly higher than at the start of the year. Inflation remains low and below central bank targets.

Sovereign bond yields have increased over recent months due to the positive news on vaccines and the additional fiscal stimulus in the United States. Inflation expectations have also lifted from near record lows to be now closer to central banks' targets. The 3-year government bond yield in Australia is at the Board's target of 10 basis points and lending rates for most borrowers are at record lows. The Australian dollar remains in the upper end of the range of recent years.

The economic recovery in Australia is well under way and is stronger than had been expected. The unemployment rate fell to 5.8 per cent in February and the number of people with a job has returned to the pre-pandemic level. GDP increased by a strong 3.1 per cent in the December quarter, boosted by a further lift in household consumption as the health situation improved. The recovery is expected to continue, with above-trend growth this year and next. Household and business balance sheets are in good shape and should continue to support spending.

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Nevertheless, wage and price pressures are subdued and are expected to remain so for some years. The economy is operating with considerable spare capacity and unemployment is still too high. It will take some time to reduce this spare capacity and for the labour market to be tight enough to generate wage increases that are consistent with achieving the inflation target. In the short term, CPI inflation is expected to rise temporarily because of the reversal of some COVID-19-related price reductions. Looking through this, underlying inflation is expected to remain below 2 per cent over the next few years.

Housing markets have strengthened further, with prices rising in most markets. Housing credit growth to owner-occupiers has picked up, with strong demand from first-home buyers. In contrast, investor credit growth remains subdued. Given the environment of rising housing prices and low interest rates, the Bank will be monitoring trends in housing borrowing carefully and it is important that lending standards are maintained.

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The Board remains committed to the 3-year government bond yield target of 10 basis points. Later in the year it will consider whether to retain the April 2024 bond as the target bond or to shift to the next maturity. The initial $100 billion government bond purchase program is almost complete and the second $100 billion program will commence next week. Beyond this, the Bank is prepared to undertake further bond purchases if doing so would assist with progress towards the goals of full employment and inflation. Authorised deposit-taking institutions have drawn $95 billion under the Term Funding Facility and have access to a further $95 billion. Since the start of 2020, the RBA's balance sheet has increased by around $215 billion.

These various monetary measures are continuing to help the economy by keeping financing costs very low, contributing to a lower exchange rate than otherwise, and supporting the supply of credit and household and business balance sheets. Together, monetary and fiscal policy are contributing to the recovery in aggregate demand and the pick-up in employment.

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The Board is committed to maintaining highly supportive monetary conditions until its goals are achieved. The Board will not increase the cash rate until actual inflation is sustainably within the 2 to 3 per cent target range. For this to occur, wages growth will have to be materially higher than it is currently. This will require significant gains in employment and a return to a tight labour market. The Board does not expect these conditions to be met until 2024 at the earliest.
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