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

Joel Robinson

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

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

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

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.

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.

Construction has commenced, with completion currently estimated for late 2027. Three-bedroom residences are priced from $1.8 million.

[smartcode_project:default project_id=150999 project_image_fid=374005]

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.

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.

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.

[smartcode_project:default project_id=150999 project_image_fid=374010]

Resident amenity is concentrated at rooftop level, where landscaped entertaining terraces and pools take advantage of elevated views across Coolangatta and the Pacific Ocean.

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.

“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.

[smartcode_project:default project_id=150999 project_image_fid=374002]

“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.”

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.

[smartcode_project_cta:default project_id=150999]

Maréa Residences brings parkside apartments to Coolangatta

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.

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.

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.

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.

<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" />

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.

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.

A significant component of The One will be its residential amenity.

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.

The planning approval also incorporates a major upgrade of Queensbridge Square, which PDG will deliver in partnership with the City of Melbourne.

<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" />

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.

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.

“This is the most significant Planning Permit approval Melbourne has seen in recent years,” Giuliano said.

“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.”

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.

PDG has also started generating early interest in the residential component from owner-occupiers ahead of a planned public launch in early 2027.

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

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.

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.

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.

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.

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.

&nbsp;

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.

Wooloongabba has been popular for apartment developers, particularly since the announcement of the 2032 Summer Olympics games in Brisbane.

While there have been a lot of development applications, it has failed to materialize into real supply.&nbsp;

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>.

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

Rba Insights

<html><body>
The RBA cut rates for the first time in nearly three years at its June meeting to a record low 1.25%.
It had previously stood at 1.5%, which had been a record low rate, since it was last cut from 1.75% in August 2016.
Over 90% of the economists and experts surveyed in Finder.com.au's monthly RBA Cash Rate Survey <a href="/expert-insights/finance/over-90-of-experts-and-economists-predict-cut-finders-rba-cash-rate-survey">predicted the cut</a>.
RBA Governor Philip Lowe has <a href="/news/why-the-rba-cut-rates-to-record-lows-governor-philip-lowe">explained the cash rate cut</a>, suggesting the "decision was taken to support employment growth and to provide greater confidence that inflation will be consistent with the medium-term target."
Today the RBA have released their chart pack, which highlights key factors in the Australian economy.
Property Observer takes a look at four key charts which will have been strong influencers in the decision to cut the official interest rate.
1. GDP Growth
Australia's GDP growth continued its decline toward two percent.
The economy only grew 0.3 percent in the September quarter and 0.2 percent in the December quarter, an annualised rate of just one percent. <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/2019/6/5/GDP-growth.jpg" alt="">
2. Consumer Price Inflation
Consumer Price Inflation has continued its downward trajectory towards one percent. 
Income and spending per person fell in the December quarter, following a September quarter where it barely grew.
UNSW's Peter Martin <a href="/expert-insights/finance/the-reserve-bank-will-cut-rates-again-and-again-until-we-lift-spending-and-push-up-prices">says the RBA cut rates</a> because "we aren’t spending or pushing up prices at anything like the rate it would like."
<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/2019/6/5/CPI.jpg" alt=""> 
3. Underlying Inflation
Since 1993, the RBA has targeted inflation of between two and three per cent, on average, over the course of the business cycle.
The latest March quarter figures has the inflation tracking further away from the two to three percent bracket.
<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/2019/6/5/underlying-inflation.jpg" alt=""> 
4. Unemployment
The latest unemployment figures were a mixed bag.
Total employment rose 28,400 in April, stronger than the market median estimate of over 15,000.
Full-time employment in April fell 6,300 with part-time employment growing 34,700.
<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/2019/6/5/Labor-Market.jpg" alt="">
The big surprise in the April results was the jump in the unemployment rate from 5.1% to 5.2%.
This was the result of a jump in the participation rate to a new record high of 65.85%. 
To see the full chart pack from the RBA, <a href="https://www.rba.gov.au/chart-pack/" target="_blank">click here</a>.
 
 
 
 
</body></html>

jrobinson-rf4aSBido9

The key charts that determined the RBA's June rate cut

<html><body>
The Reserve Bank of Australia have cut the official interest rate to a historic low 1.25% at its June meeting.
It's the first time the cash rate has been cut since August 2016 when it went from 1.75% to 1.5%.
The Federal Treasurer Josh Frydenberg has personally urged the nation's biggest banks to pass on all the 0.25 percentage point cut in official interest rates.
CoreLogic head of research Tim Lawless said the move was widely expected, with the focus now no doubt turning to mortgage rates and how low they will go.
"Mortgage rates for owner occupiers are already around the lowest level since the 1960’s and lenders are generally expected to pass on most, if not all of the cash rate cut to mortgage interest rates. 
"Lower mortgage rates, together with the likelihood of lower borrower serviceability assessments if APRA delivers on a relaxation to the base serviceability rate later this month, as well as renewed confidence following the federal election, are likely to see an improvement in housing market activity. 
"However, with credit policies remaining tight, the stimulus of lower rates isn’t likely to be as effective in kick starting the housing market as what we have seen in the past. 
"Borrowers are facing much closer scrutiny on their income and expenses as lenders become less reliant on HEM (Household Expenditure Measure) benchmarks, and comprehensive credit reporting is providing lenders with greater transparency around borrower debt levels and credit standing. 
"Overall, the latest rate cuts together with lower serviceability assessments for borrowers and greater confidence following the federal election should help to support an earlier than expected trough in housing values, but we aren’t expecting a rapid reversal in house price declines due to ongoing tight credit policies and, more broadly, economic uncertainty as global trade tensions escalate.
</body></html>

RBA cut official cash rate to a historic low 1.25% at June 2019 meeting

<html><body>
The RBA kept the cash rate on hold at 1.5 percent in its May meeting.
It has now stayed at record lows for 30 consecutive meetings. 
The last time the rate changed was in August 2016, under the eye of former RBA governor Glenn Stevens.
CoreLogic's head of research Tim Lawless says despite the hold, a cash rate cut soon seems likely.
"The flat CPI reading for the March quarter wasn’t enough to drag interest rates lower, although the likelihood of a cash rate cut over coming months remains high," Lawless said.
"While inflation remains below the RBA’s target range, labour markets generally remain relatively strong, supported by NSW and Vic, and the decline in housing values has lost some speed over recent months.
"If the cash rate does move lower later this year, a reduction in mortgage rates would provide some support for housing demand, however we may not see quite as much stimulus for housing market conditions that we have seen after previous rate cuts.  
"Generally, housing sentiment remains low and borrower mortgage serviceability is still assessed based on mortgage rates of at least 7%.  
"Households who already have a mortgage, or prospective borrowers who are able to satisfy lender credit policies will be the winners if interest rates do fall later this year."
</body></html>

RBA keeps cash rate on hold at May 2019 meeting despite growing pressure

<html><body>
The latest RBA minutes have noted a larger-than-expected fall in dwelling investment.
Dwelling investment appeared to have passed its peak, although there continued to be uncertainty about how quickly dwelling investment might decline over the forecast period, it noted.
Members noted financial market participants' expectations of a rate cut had been brought forward following weaker than expected data, most notably the December quarter national accounts. 
It noted financial market pricing implied that the cash rate was expected to be lowered in the second half of 2019 and then again in 2020.
The board "recognised that the effect on the economy of lower interest rates could be expected to be smaller than in the past, given the high level of household debt and the adjustment that was occurring in housing markets."
But members agreed that there was "not a strong case" for a near-term adjustment in monetary policy.
Members recognised that it was not possible to fine-tune outcomes and that holding monetary policy steady would enable the Bank to be "a source of stability and confidence."
It noted in Australia, conditions in the housing market had remained weak.
Housing prices had fallen further in the capital cities and regional areas.
Over the preceding six months, the falls had been largest in Sydney and Melbourne, but prices in these cities had remained more than 40 per cent higher than in 2012.
Falls in housing prices had resulted in some borrowers having negative equity, where the value of their loans exceeded that of their properties. Nationally, just over 2 per cent of borrowers, accounting for less than 3 per cent of housing debt, were estimated to have negative equity. Around 90 per cent of these borrowers were in Queensland, Western Australia and the Northern Territory.
Members observed that negative equity by itself was not a concern for financial stability.
"However, if unemployment were to rise and borrowers were not able to continue to make repayments, then financial institutions would incur increased losses."
Members noted that the decline in high loan-to-valuation ratio (LVR) lending in recent years was expected to lessen any losses for lenders. In recent quarters, almost all loans to investors had LVRs less than 90 per cent. By contrast, a decade earlier only 85 per cent of loans to investors had LVRs less than 90 per cent. The share of owner-occupiers with high LVR loans had also declined.
Members also noted that total household payments on housing debt as a share of income had been broadly stable in recent years.
"Within the total, however, an increase in scheduled principal repayments had roughly offset a fall in unscheduled principal repayments."
Members noted that households' excess payments amounted to about two-and-a-half years' worth of scheduled repayments on average. Housing loan interest payments had increased slightly as housing debt had increased.
Construction of new dwellings had contracted in the second half of 2018; the largest falls in the December quarter had been for apartments in New South Wales and detached housing in Queensland.
Slower housing activity had also weighed on the incomes of some building contractors and property professionals in the December quarter.
There continued to be a large amount of work in the pipeline, which should support a relatively high level of building activity in the near term.
Members noted that there had been a substantial rise in building approvals for high-density residential projects in February, although this series was volatile and in trend terms remained well below earlier peaks.
Members also noted that population growth was expected to continue to support demand for housing over the medium term.
Conditions in the established housing market had remained weak in recent months, the April minutes noted.
"Housing prices had continued to fall in Sydney, Melbourne and Perth, and had declined a little in most other capital cities and regional areas.
"In March, Sydney prices were 13 per cent below their 2017 peak and Melbourne prices were 10 per cent below their peak.
"Although auction clearance rates in Sydney and Melbourne had increased over the first quarter of 2019, they remained at relatively low levels."
Members noted that in Perth, housing prices had declined over the previous year, while the rental vacancy rate had declined sharply and there were signs that newly advertised rents were starting to increase.
By contrast, rental vacancies in Sydney had risen, particularly in suburbs where the supply of new apartments had increased significantly.
Growth in consumption had clearly slowed in the second half of 2018, it noted.
"The weakness had been concentrated in discretionary items, especially those that have historically been most correlated with housing prices and housing turnover, such as motor vehicles and home furnishings.
"Retail sales data and contacts in the Bank's liaison program suggested that growth in housing-related consumption had remained soft in recent months."
Members noted that growth in household disposable income, which is an important driver of consumption growth, had been subdued for a number of years. 
In 2018, labour income growth had been above the very low rates seen in recent years, supported by a pick-up in growth in average hourly earnings and continued employment growth, but non-labour income growth had remained weak.
The RBA members observed that tax payments by households had been growing noticeably faster than income growth in recent years, partly because of efforts to increase tax compliance.
The members discussed scenarios in which a rate cut might be needed.
"Members agreed that inflation was likely to remain low for some time," the minutes noted.
"Members also discussed the scenario where inflation did not move any higher and unemployment trended up, noting that a decrease in the cash rate would likely be appropriate in these circumstances.
"They recognised that the effect on the economy of lower interest rates could be expected to be smaller than in the past, given the high level of household debt and the adjustment that was occurring in housing markets.
"Nevertheless, a lower level of interest rates could still be expected to support the economy through a depreciation of the exchange rate and by reducing required interest payments on borrowing, freeing up cash for other expenditure."
To read the full RBA minutes, <a href="/expert-insights/finance/minutes-of-april-2019-monetary-policy-meeting-of-the-reserve-bank-board">click here</a>.
</body></html>

j.ballantyne1990-6AQqhLzZaK

RBA notes larger-than-expected fall in dwelling investment

Minutes of April 2019 Monetary Policy Meeting of the Reserve Bank Board

<html><body>
The RBA has noted despite the relatively weak picture for household income growth, the tax revenue collected from households has grown solidly in recent years.
In the past year, taxes paid by households increased by around eight per cent, more than double the rate of growth in gross household income of 3½ per cent, according to the RBA assistant governor Luci Ellis, in a speech to the Housing Industry Association.
"It's normal for growth in tax revenue to outpace income growth a bit: that is how a progressive tax system works," Ellis said in the speech titled What's Up (and Down) with Households?
"A useful rule of thumb is that, in the absence of adjustments to tax brackets to allow for bracket creep, for every one percentage point of growth in household income, taxes paid by households will on average increase by about 1.4 percentage points. 
"So the ratio is more like a bit over two-to-one at the moment, rather than 1.4 to one.
"That is at the high end of the range this ratio reaches, but as this graph shows, it is not unprecedented (Graph 12).
"But this effect has cumulated over time, so that the share of income that is paid in tax has been rising (Graph 12, bottom panel).
Ellis noted that household income growth has remained slow even as labour market conditions have been improving.
"Unlike slow wages growth, though, it is less clear how much weak non-labour income growth will weigh on consumer spending."
"There might be reasons to think that weak non-labour income growth is less worrisome than weak wages growth.
"But you would not want to rely on that possibility to underpin your views on the outlook for consumption.
"So this is an area we need to watch closely.
"Household consumption spending is a large part of economic activity.
"A significant retrenchment there would lower growth and feed back into a weaker labour market, as well as into decisions to purchase housing," she said.
<div>
<div> </div>
<img src="https://www.rba.gov.au/speeches/2019/images/sp-ag-2019-03-26-graph12.gif" alt="Graph 12: Household Income and Tax">
</div>
Ellis noted what is noteworthy is that for all of the past six years, growth in tax paid has exceeded income growth by an above-average margin, at a time when income growth itself has been slow (Graph 13).
<div>
<div> </div>
<img src="https://www.rba.gov.au/speeches/2019/images/sp-ag-2019-03-26-graph13.gif" alt="Graph 13: Household Income and Tax scatter">
</div>
"Aside from the usual bracket creep, some deductions and offsets have declined, boosting the overall tax take.
"Interest rates on investment property loans are now higher than for owner-occupiers, but overall the interest rate structure on mortgages is lower than it was a few years ago.
"So landlords will have lower tax deductions for interest payments on loans on investment properties.
"At the same time, the significant run-up in housing prices in some cities over the past decade will have increased the capital gains tax liability paid by investors selling a property.
"Turnover in the housing market has declined.
"But as best we can tell, the price effect has dominated the effect of declining volumes, and total capital gains tax paid has increased."
She noted compliance efforts and technological progress in tax collection have boosted revenue collected from a given income. 
Eliis further noted some of these drivers boosting tax paid could persist for a while, but they aren't permanent.
"For example, the earlier period of strong housing price growth will only increase capital gains tax revenue if the asset was owned during that period.
"It can be expected to become less important, the further into history it passes.
"Similarly, increased compliance increases the <cite>level </cite>of tax paid on a given level of income.
"It is not a change in the trend growth rate in tax paid. That said, the effect could last for a while as efforts shift to different aspects of compliance."
Ellis's speech concluded that without enough income, and so without a strong labour market, confidence and capacity would be in doubt.
"This is not the only reason we are watching labour market developments closely.
"But the nexus between labour markets, households and housing are crucial to our assessment of the broader outlook," Ellis said.
To read Ellis' full speech, <a href="/expert-insights/investing/whats-up-and-down-with-households-rba-assistant-governor-luci-ellis">click here</a>.
</body></html>

Nexus between wages, labour markets, household spending and housing being watched by RBA 

What's up (and down) with households? RBA assistant governor Luci Ellis

<html><body>
Despite pressures to cut rates, the RBA have held firm, suggesting there is no need for an adjustment to the cash rate in the near term.
"Members agreed to continue to assess the outlook carefully," RBA Governor Philip Lowe said in the <a href="/expert-insights/finance/minutes-of-march-2019-monetary-policy-meeting-of-the-reserve-bank-board">March meeting minutes</a>.
"Given that further progress in reducing unemployment and lifting inflation was a reasonable expectation, members agreed that there was not a strong case for a near-term adjustment in monetary policy.
"Rather, they assessed that it would be appropriate to hold the cash rate steady while new information became available that could help resolve the current tensions in the domestic economic data."
On housing, Lowe said the process of adjustment in the housing market had continued. 
"Housing prices in Sydney, Melbourne and Perth had declined further, and turnover in the housing market had fallen significantly," he said.
Lowe noted that available data showed continued declines in Sydney, Melbourne and Perth into 2019, however also said the data was difficult to interpret when taking into account the always quiet January period.
"In Sydney, housing prices were 13 per cent lower than their July 2017 peak, while in Melbourne housing prices were 10 per cent lower than their November 2017 peak," Lowe suggested.
He highlighted the auction clearance rates picking up in Sydney and Melbourne over February, although added that demand for housing credit had slowed 'noticeably' as conditions in the housing market changed.
Lowe noted that despite the likelihood dwelling investment was expected to decrease in the December quarter, however the pipeline of work to be done remained large.
"Members noted that the pipeline of work to be done remained large and was expected to support dwelling investment through 2019, particularly in New South Wales and Victoria," Lowe said, although added there will be a marked slowing in dwelling investment soon.
"Residential building approvals and information from the Bank's liaison program pointed to a marked slowing in dwelling investment in one to two years' time, unless pre-sales increased significantly in the following few quarters.
"The recent weakness in sales of detached new houses had been most pronounced in Sydney and Melbourne, but had also been evident in other locations.
"Contacts had reported that tighter access to credit for off-the-plan and project homes had been constraining buyer demand," Lowe said.
The RBA are still hopeful of growth in GDP of around three percent of 2019 and a further decline in the unemployment rate to 4.75% over the next couple of years.
 
 
 
 
 
 
 
 
 
 
</body></html>

No strong case for cash rate hike as housing turnover 'falls significantly': RBA March 2019 minutes

Minutes of March 2019 Monetary Policy Meeting of the Reserve Bank Board

<html><body>
The RBA held the cash rate firm at 1.5 percent at the March meeting, making it 28 consecutive meetings since the rates last moved.
There is growing expectation from economists, and pressure from housing markets, for the RBA to cut rates.
In February Westpac's Bill Evans was the first to <a href="/expert-insights/finance/westpac-now-expects-the-rba-to-cut-the-cash-rate-twice-bill-evans">forecast two rate cuts</a>, one in August and one in November.
He was joined earlier this month by <a href="/news/nab-now-predicting-two-cash-rate-cuts-in-2019-alan-oster">NAB's Alan Oster,</a> who said cuts may come sooner, in July, and November.
The RBA March chart pack has given the central bank little relief from the expected looming rate cut by commentators.
The RBA's biggest concern will be to growing gap between the declining house prices and housing debt.
The pair have continued to go in opposite directions, and as far as the RBA is concerned, the wrong direction, for well over a year.
Household continues to hit record highs month after month, with no sign of debt, nor the house price decline, slowing down.
Click here to enlarge.
<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/2019/3/19/RBA0.jpg" alt="">
With house prices declining, home owners are cautious.
They're not wanting to spend money on unnecessary items until house prices have stopped declining.
Growth in consumption has been slow, but it is somewhat holding firm, unlike a households disposable income.
The average household's disposable income is declining toward levels not seen since half way through 2016.
Click here to enlarge.
<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/2019/3/19/RBA1.jpg" alt="">
Home loan approvals are continuing to decline across the board.
When house prices started declining and investors were hit with higher home loan rates, first home buyers were back in the driving seat.
But due to the continued declines, first home buyers are in no hurry to enter the market just yet.
Back in late 2018 Finder's RBA survey suggested tightened lending could <a href="/expert-insights/finance/tightening-lending-practices-could-negatively-effect-economy-finders-rba-survey">affect the economy negatively</a>.
However in February the RBA stressed that the tightening of lending <a href="/news/tightening-in-lending-standards-not-the-cause-of-housing-credit-growth-decline-rba">was not the cause</a> for the house price falls.
Click here to enlarge.
<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/2019/3/19/RBA3.jpg" alt="">
To see the full chart pack <a href="https://www.rba.gov.au/chart-pack/" target="_blank">click here</a>.
</body></html>

Rba Insights

Editor's Picks

Have something to contribute?

Developments

New apartments

New townhouses

News

Rba Insights

Editor's Picks

Receive the latest news stories to your inbox

Have something to contribute?

Developments

New apartments

New townhouses

News