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

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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

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The year ahead: RBA Governor Philip Lowe

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At its meeting today, the Board decided to leave the cash rate unchanged at 1.50 per cent.
The global economy grew above trend in 2018, although it slowed in the second half of the year. Unemployment rates in most advanced economies are low. The outlook for global growth remains reasonable, although downside risks have increased. The trade tensions are affecting global trade and some investment decisions. Growth in the Chinese economy has continued to slow, with the authorities easing policy while continuing to pay close attention to the risks in the financial sector. Globally, headline inflation rates have moved lower due to the decline in oil prices, although core inflation has picked up in a number of economies.
Financial conditions in the advanced economies tightened in late 2018, but remain accommodative. Equity prices declined and credit spreads increased, but these moves have since been partly reversed. Market participants no longer expect a further tightening of monetary policy in the United States. Government bond yields have declined in most countries, including Australia. The Australian dollar has remained within the narrow range of recent times. The terms of trade have increased over the past couple of years, but are expected to decline over time.
The central scenario is for the Australian economy to grow by around 3 per cent this year and by a little less in 2020 due to slower growth in exports of resources. The growth outlook is being supported by rising business investment and higher levels of spending on public infrastructure. As is the case globally, some downside risks have increased. GDP growth in the September quarter was weaker than expected. This was largely due to slow growth in household consumption and income, although the consumption data have been volatile and subject to revision over recent quarters. Growth in household income has been low over recent years, but is expected to pick up and support household spending. The main domestic uncertainty remains around the outlook for household spending and the effect of falling housing prices in some cities.
The housing markets in Sydney and Melbourne are going through a period of adjustment, after an earlier large run-up in prices. Conditions have weakened further in both markets and rent inflation remains low. Credit conditions for some borrowers are tighter than they have been. At the same time, the demand for credit by investors in the housing market has slowed noticeably as the dynamics of the housing market have changed. Growth in credit extended to owner-occupiers has eased to an annualised pace of 5½ per cent. Mortgage rates remain low and there is strong competition for borrowers of high credit quality.
The labour market remains strong, with the unemployment rate at 5 per cent. A further decline in the unemployment rate to 4¾ per cent is expected over the next couple of years. The vacancy rate is high and there are reports of skills shortages in some areas. The stronger labour market has led to some pick-up in wages growth, which is a welcome development. The improvement in the labour market should see some further lift in wages growth over time, although this is still expected to be a gradual process.
Inflation remains low and stable. Over 2018, CPI inflation was 1.8 per cent and in underlying terms inflation was 1¾ per cent. Underlying inflation is expected to pick up over the next couple of years, with the pick-up likely to be gradual and to take a little longer than earlier expected. The central scenario is for underlying inflation to be 2 per cent this year and 2¼ per cent in 2020. Headline inflation is expected to decline in the near term because of lower petrol prices.
The low level of interest rates is continuing to support the Australian economy. Further progress in reducing unemployment and having inflation return to target is expected, although this progress is likely to be gradual. Taking account of the available information, the Board judged that holding the stance of monetary policy unchanged at this meeting would be consistent with sustainable growth in the economy and achieving the inflation target over time.
Source <a href="https://www.rba.gov.au/media-releases/2019/mr-19-01" target="_blank">RBA</a>
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Weakening house prices as 2018 adjustment continues: RBA Governor Philip Lowe's February 2019 meeting statement

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Downsize risks acknowledged in December 2019 Minutes of Reserve Bank Board

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EXPERT OBSERVER
Good morning and thank you for the opportunity to speak here. Today, I want to talk about long-term developments in the Australian equity market.
Equities are important for the Australian economy. Today, the equity market is one of Australia's largest financial markets. The total value of companies listed here is a bit under $2 trillion; as you can see in Graph 1 this is more than 100 per cent of GDP. This has not always been the case: the equity market has rapidly grown as a share of GDP over the past 20 years. Before the 1960s, the government bond market was by far the most important financial market in Australia.<a id="r1" href="https://www.rba.gov.au/speeches/2018/sp-so-2018-12-13#fn1"> </a>
<div class="image-graph">
<div class="title">Graph 1</div>
<img src="https://www.rba.gov.au/speeches/2018/images/sp-so-2018-12-13-graph1.gif" alt="Graph 1: Australian Financial Markets">
</div>
Equities are also an important part of Australians' retirement savings. While most people don't own shares directly, anyone with superannuation usually holds equities indirectly through their fund's investments. Payments from listed companies, in the form of dividends and share buybacks, were worth almost $100 billion dollars in the past twelve months. By way of comparison, this is equivalent to about 5 per cent of household income.<a id="r2" href="https://www.rba.gov.au/speeches/2018/sp-so-2018-12-13#fn2"> </a>
Listed companies employ a substantial number of people and many of Australia's well-known companies are listed on the stock exchange. This doesn't mean that the performance of the stock exchange is the same thing as the performance of the economy. But by understanding developments affecting listed companies, we can gain timely insights into what's happening in the economy more broadly.
And, the Reserve Bank pays close attention to the equity market in particular because it is a transmission channel for monetary policy. When interest rates go down, share prices tend to increase, and this increases the wealth of households who hold those equities. Higher share prices, in turn, make it relatively cheaper for companies to issue shares, allowing them to expand.
Today I would like to take a step back and look at the Australian equity market through a longer-term lens. I will focus on returns of equities and the composition of the equity market through time. I will conclude with some observations on price to earnings ratios. Many of the graphs and numbers in this presentation draw, in part, from historical datasets compiled by staff at the RBA. These data – like all historical data – should be interpreted with some caution. Nonetheless, we think that they are of a sufficient quality to provide some useful insights and we will soon make them more widely available to interested researchers.
So how do the returns on equity investments compare to other financial assets in Australia? The return on equity includes gains from both share price changes (or ‘capital gains’) and dividends paid out. Graph 2 shows cumulative returns on financial assets from $100 invested in 1900, adjusted for inflation. Over the long run, equities have been worth much more to investors than other investment options: they have returned about 5 percentage points more than long-term bonds on average each year. This accumulates to a very large amount of money over a long period of time. If you had put $100 into the equity market in 1900 in a portfolio that tracked the stock market index, you would have over $100,000 today after adjusting for inflation; this is more than 100 times what you would have earned from a Government bond or a bank deposit. Perhaps more relevant to our own investment decisions, if you had put $100 into the equity market when you were 20 years old, given average returns it would have been worth more than $1,000 when you retired at age 65. If you had invested it in government bonds, it would have been worth only a quarter of that.
<div class="image-graph">
<div class="title">Graph 2</div>
<img src="https://www.rba.gov.au/speeches/2018/images/sp-so-2018-12-13-graph2.gif" alt="Graph 2: Cumulative Real Returns">
</div>
But investing in the equity market comes with risk. The equity market is more volatile than many other markets: average volatility in the returns generated by equities in Graph 2 is double that of bonds. This means that at any point in time, investors get a return that can be very different from the average return. Developments such as the global financial crisis have emphasised this. In the middle of the financial crisis, share prices fell by around 50 per cent. If you had a superannuation portfolio based on equities, the value of your retirement funds would have declined significantly, and remained lower for quite some time. If you were in, or close to, retirement, you may have had to lock in some of these lower share prices. This emphasises the value of a diversified portfolio but also the importance of taking a longer-run view on the equity market.
There are of course different sorts of companies on the stock exchange, and you might expect that they would provide different return profiles. This is true for some: companies like utilities, for example, generally have more bond-like properties (and so are quite correlated with bond prices). At the same time, returns in broader sectors have been remarkably similar over the past century. You can see this in Graph 3 which shows the cumulative returns on equities in three broad sectors over the past 100 years – the Reserve Bank often looks at the broad sectors resources, financials and ‘others’. Indeed, the average annual returns over that period across the three sectors have been within ½ percentage point of each other. Of course, resources stocks have been a bit more volatile, in part reflecting their exposure to volatile commodity prices.
<div class="image-graph">
<div class="title">Graph 3</div>
<img src="https://www.rba.gov.au/speeches/2018/images/sp-so-2018-12-13-graph3.gif" alt="Graph 3: Total Return Indices">
</div>
What about compared with overseas? Graph 4 shows the average annual returns on stocks in Australia, the United States and the United Kingdom since 1900. (The total return is the dividends – the red bars – and the capital gains – the blue bars – taken together.) At around 10 per cent, the average annual returns are very similar. The pattern is not much different if you look at capital gains and dividends separately.
<div class="image-graph">
<div class="title">Graph 4</div>
<img src="https://www.rba.gov.au/speeches/2018/images/sp-so-2018-12-13-graph4.gif" alt="Graph 4: Total Return On Equities Since 1900">
</div>
Over shorter periods there is more divergence, as you can see in Graph 5. In particular, over the past 25 years Australian stock prices have gone up a bit less than the rest of the world, particularly the United States, as you can see in the blue bars in Graph 5. But Australian companies pay high dividends, due in part to the specific tax treatment they receive; I am referring to franking credits, which were initially introduced in 1987. Taking this into account, Australian stocks have generated above-average returns (the combined red and blue bars) over the past 25 years.
<div class="image-graph">
<div class="title">Graph 5</div>
<img src="https://www.rba.gov.au/speeches/2018/images/sp-so-2018-12-13-graph5.gif" alt="Graph 5: Total Return on Equities Since 1993">
</div>
Let's have a closer look at the companies that make up the Australian securities exchange (or, abbreviated, the ASX). Graph 6 compares the concentration of the stock exchange for different countries. The bars show what share of the total market capitalisation is accounted for by the top 10 companies. On this metric, the ASX is quite concentrated in large companies, with the top 10 companies accounting for a bit less than half of the market capitalisation of the ASX.
<div class="image-graph">
<div class="title">Graph 6</div>
<img src="https://www.rba.gov.au/speeches/2018/images/sp-so-2018-12-13-graph6.gif" alt="Graph 6: Largest 10 Companies' Share of Total Exchange">
</div>
You will notice that the countries with the larger concentrations (on the right-hand side of the graph) tend to be smaller economies. Among similar-sized exchanges, the level of concentration seen at the ASX is not unusual. It means, however, that an investor in a market capitalisation-weighted portfolio of equities is exposed to developments in a smaller set of companies.
This concentration has been a feature of the Australian stock exchange throughout its existence. In fact, it has been largely the same set of companies that have comprised most of the universe of Australian stocks over its history. Graph 7 tries to illustrate this point. The top panel takes all companies listed at the ASX (weighted by market capitalisation) and then distributes them according to the year the company (or its immediate predecessor) was founded. The purple section marks companies that are currently in the top 100 companies of the ASX. The bottom panel does the same aggregated across a number of developed economies. What stands out, is that for the ASX there are a lot of high purple bars on the left hand side of the panel, that is a lot of the top 100 companies are old and they are large in terms of market capitalisation. In fact, the average listed Australian company when weighted by market capitalisation is about 100 years old. This makes our listed companies, on average, substantially older than those in the United States or Japan (which make up a large share of the graph in the bottom panel). But it is comparable to the United Kingdom, France and Germany, although stock exchanges there existed several hundred years before ours.
<div class="image-graph">
<div class="title">Graph 7</div>
<img src="https://www.rba.gov.au/speeches/2018/images/sp-so-2018-12-13-graph7.gif" alt="Graph 1: Listed Companies by Founding Date">
</div>
A striking number of large, still-existing Australian companies were founded in the 1800s, in many cases before the existence of stock exchanges in Australia. These are mostly the predecessors of the banks and mining companies, which have their origins in colonial banks and 19th century mining booms, respectively. By contrast, very few large public Australian companies have been founded in the past 50 years (and many of the large listings, such as the Commonwealth Bank of Australia and Telstra, have been privatisations). In this respect, Australian markets are something of an outlier globally.
That said, the stock exchange has not been completely static over the past century, and there have been substantial compositional shifts at times. Graph 8 shows the ASX shares of the three large sectors – financials, resources and ‘others’ – through time.<a id="r9" href="https://www.rba.gov.au/speeches/2018/sp-so-2018-12-13#fn9"> </a>
<div class="image-graph">
<div class="title">Graph 8</div>
<img src="https://www.rba.gov.au/speeches/2018/images/sp-so-2018-12-13-graph8.gif" alt="Graph 8: Equity Market Sectors">
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The resources sector (in orange) has tended to expand and contract with mining booms and commodity prices. During the mining boom of the 2000s, the share of the stock market capitalisation accounted for by resources companies doubled over a period of about five years: at their peak, resources companies made up about a third of the ASX 200. But this pales in comparison with the experience of the late 1960s boom, where the resources sector was worth at its peak in 1970 around 65 per cent of the exchange by market capitalisation. Of course, resources booms tend to be followed by busts, and so the large share shrunk within a few years. On average, the resources sector has a larger weight on the stock exchange than it has in the real economy.<a id="r11" href="https://www.rba.gov.au/speeches/2018/sp-so-2018-12-13#fn11">[11]</a> This could reflect that financing mines can be a speculative, risky investment; equity can be a more attractive way to finance such investment, allowing investors (with a matching risk appetite) to share in the potentially large upside without saddling the company with large debt repayment obligations if the resources discovery (and the associated revenue) disappoints.
The ASX is bank-heavy and the financial sector (in blue) more broadly makes up about a third of the exchange by market capitalisation: almost exactly the same share as it did 100 years ago. But, in fact, through most of the 20th century the sector was quite small, reflecting the regulation following the Great Depression, and only regaining its historical share in the 1980s and 1990s. The sector has also diversified quite a lot since its early days, with diversified financials and insurance companies accounting for a much larger share than they used to.
Other sectors (in green) have reflected changes in the industry composition of the Australian economy over the past 100 years. The rise and fall of manufacturing was reflected on the exchange, with manufacturers frequently featuring in the top 10 companies through the 1940s and 50s; most of these have since delisted. A company that ferried people across Sydney Harbour was in the top 50 companies on the exchange for decades, until its business model was disrupted by the construction of the Harbour Bridge. More generally in the transportation sector, ferries, steamships and railroads have largely been replaced by road infrastructure and air travel. On the other hand, some sectors played a significant role in the economy but not on the stock exchange. Agriculture, forestry and fishing is one example, which for the first half of the 20th Century accounted for up to 30 per cent of GDP, but has rarely featured in much size on the stock exchange.
More generally, the size of the equity market relative to GDP – one measure of capital market development – has fluctuated around about 100 per cent of GDP over the past two decades. This is broadly in line with the markets of other developed economies. Australian companies have continued to raise capital on the stock market, and the number of listed companies has continued to increase, albeit a bit more slowly of late. All this suggests that equities remain an important source of funds for Australian companies in a wide range of industries.
Finally, I would like to touch on valuations. In the global low-interest environment of recent years, some commentators (including the Reserve Bank) have raised the prospect that this has led to a ‘search for yield’ by global investors, where they bid up the price of risky assets and thus increase the risk of a sharp correction down the road. One simple way of measuring this for the equity market is a price-to-earnings ratio, shown here in Graph 9 for both Australia and the United States. By this measure, Australian equities are not showing signs of heightened valuations.
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<div class="title">Graph 9</div>
<img src="https://www.rba.gov.au/speeches/2018/images/sp-so-2018-12-13-graph9.gif" alt="Graph 9: Price-to-earnings Ratios">
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This graph also emphasises that, in the long run, share prices are driven by fundamentals, that is, company profits or ‘earnings’. The Australian share market will likely be dominated in the future by companies able to sustain profit growth over long periods of time, as it has been in the past. This may be the current large listed companies, many of whom have managed to play a role in Australia's listed equity market for a very long period of time, as I discussed. Or it may be others.
Some of the points I've discussed today are unlikely to change. The stock market will most likely remain both an important source of funds for Australian corporates, and an investment vehicle for Australian households and foreign investors. Equities will be more volatile than safer assets, but will very likely yield higher returns over the long term, and the composition of the market will continue to broadly reflect the structure of the real economy.
Thank you.
Marion Kohler is the RBA's <a id="r*" href="https://www.rba.gov.au/speeches/2018/sp-so-2018-12-13#fn*"></a>Head of Domestic Markets Department.
To read the original article <a href="https://www.rba.gov.au/speeches/2018/sp-so-2018-12-13" target="_blank">click here</a>.
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The RBA's long view on Australian equities

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The latest chart pack gives an insight into how the RBA came to its decision to leave the cash rate on hold at a record low 1.5 percent.
GDP growth continues to rise towards the four percent mark.
It is now at its highest point since 2012.
Click here <a href="https://www.propertyobserver.com.au/images/2018/12/5/GDP.jpg" target="_blank">to enlarge.</a>
<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/2018/12/5/GDP.jpg" alt="">
CPI remains unpredictable, hovering above or below the two percent region.
Click here <a href="https://www.propertyobserver.com.au/images/2018/12/5/CPI.jpg" target="_blank">to enlarge.</a>
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The gap between disposable income and consumption is narrowing.
Click here <a href="https://www.propertyobserver.com.au/images/2018/12/5/income-consumption.jpg" target="_blank">to enlarge.</a>
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Consumer sentiment continues to rise to levels not seen since mid 2016.
Click here <a href="https://www.propertyobserver.com.au/images/2018/12/5/consumer-sent.jpg" target="_blank">to enlarge.</a>
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Housing loan approvals for investors and owner occupiers continue their downward trajectory after tighter lending criteria.
Click here <a href="https://www.propertyobserver.com.au/images/2018/12/5/loans.jpg" target="_blank">to enlarge.</a>
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Housing loan approvals for investors head lower given tighter lending: RBA chart park

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Securitisation and the housing market: RBA's Christopher Kent

Trade policy development pose significant risk to solid growth outlook: RBA November minutes

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Households are spending more money despite growth in household income remaining low, the RBA's November domestics economic conditions report suggests.
Household consumption growth has been stable at around three percent over the last year, however growth in household income remains low.
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Goods consumption grew by 3.5 per cent over the year to the June quarter.
The strong percentage growth in expenditure on food and clothing more than offset a decline in motor vehicle sales. 
Consumption of services grew by 2.6 per cent, supported by growth in the consumption of recreation and communication services.
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There have been some sizeable upward revisions to consumption growth in recent quarters, notably to consumption of overseas travel services, which has become more complicated to measure after the discontinuation of outgoing passenger cards in mid 2017.
By state, consumption growth continues to be strongest in New South Wales and Victoria. 
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Disposable income growth has been driven by labour income, which is growing at around its fastest year-ended rate since 2012.
It is still tracking however below its long-run average.
"Housing and equity prices will weigh on household wealth," the RBA noted.
Click here to enlarge.
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Household consumption growth stable but income growth remains low: RBA

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The latest chart pack gives an insight into how the RBA came to its decision to leave the cash rate on hold at a record low 1.5 percent.
House prices continue to decline from the late 2017 peak.
Click here <a href="https://www.propertyobserver.com.au/images/2018/11/8/RBA%20statpack%201.JPG" target="_blank">to enlarge.</a>
<a href="https://www.propertyobserver.com.au/images/2018/11/8/RBA%20statpack%201.JPG" target="_blank"><img src="https://www.urban.com.au/images/2018/11/8/RBA%20statpack%201.JPG" alt=""></a>
Housing loan approvals for owner-occupiers and investors continue to decline.
In 2016 there were a similar amount of approvals for investor loans and owner-occupier, but since then the gap has grown.
Investor haven't been higher the owner-occupier approvals since 2015.
Click here <a href="https://www.propertyobserver.com.au/images/2018/11/8/RBA%20statpack%202.JPG" target="_blank">to enlarge.</a>
<a href="https://www.propertyobserver.com.au/images/2018/11/8/RBA%20statpack%202.JPG" target="_blank"><img src="https://www.urban.com.au/images/2018/11/8/RBA%20statpack%202.JPG" alt=""></a>
Wage price index growth has shown a steadiness over the last few months, coming after a steady decline over the last four years.
The index sits just over two percent, well down on its highs of over four percent some 10 years ago.
Click here <a href="https://www.propertyobserver.com.au/images/2018/11/8/RBA%20statpack%203.JPG" target="_blank">to enlarge.</a>
<img src="https://www.urban.com.au/images/2018/11/8/RBA%20statpack%203.JPG" alt="">
Despite no official rate rises for 26 consecutive months, variable interest rates continue to fluctuate.
The average standard variable reference rate has been hovering around the 5.5 percent mark for the last four years, but saw a sharp increase half way through 2018, when three of the big four decided to hike their rates.
New loans continue to decline to four year lows.
Click here <a href="https://www.propertyobserver.com.au/images/2018/11/8/RBA%20statpack%204.JPG" target="_blank">to enlarge.</a>
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Fixed interest rates are slowly heading down towards the four percent mark, having been nearly eight percent 10 years ago.
It's the lowest fixed interest rates have been in three years.
Click here <a href="https://www.propertyobserver.com.au/images/2018/11/8/RBA%20statpack%205.JPG" target="_blank">to enlarge.</a>
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Variable rates fluctuate as fixed rates continue to decline: RBA Chart Pack

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The November meeting of the RBA has seen the cash rate remain on hold at 1.5 percent.
It has now stayed at record lows for 27 consecutive months.
The August rate hold marked the two year anniversary of the last change to the cash rate by the RBA. 
CoreLogic head of Research Tim Lawless said that despite record cash rate lows, rates are still rising.
"Although the cash rate remained on hold for a record 27th month, it’s important to note that mortgage rates to investors are up as much as fifty basis points over the same time frame," Lawless said.
"That’s the equivalent of two cash rate hikes, and variable rates for owner occupiers have increased by 15 basis points over the past two months alone. 
"The rise in mortgage rates, particularly for investors who are now paying a 55 basis point premium over owner occupiers, together with tighter lending conditions more broadly, has been a key factor in taking the heat out of the housing market. 
Lawless said that despite relatively strong economic conditions, with GDP running at a six year high and unemployment at a six year low, the recent core inflation reading was tracking at 1.7% and wages growth remains subdued.
"The ongoing fall in Australian dwelling values is also likely to be weighing more heavily on the RBA’s deliberations, with CoreLogic indices showing the housing market downturn is becoming more broad based, with most regions around Australia showing a clear slowdown in growth rates, if not declining values," Lawless suggested.
"Although mortgage rates have edged higher over recent months, the cost of debt remains at the lowest levels since the 1960’s. 
"With the cash rate remaining on hold for the foreseeable future and funding cost pressures easing, we are likely to see mortgage rates remain close to their current levels which should help to keep a floor under housing demand, especially with housing affordability now improving and labour markets strengthening. "
The Reserve Bank has left the cash rate on hold today at 1.50 per cent, marking eight years since the last cash rate hike in November 2010.
In November 2010 the average loan size was $309,900. Today it is $395,800; a 28 per cent increase, according to RateCity research.
Rates have also changed significantly in this time. The average discounted variable rate in November 2010 was 7.15 per cent. Today it is 4.65 per cent.
As a result, the average Australian is paying approximately $52 less in loan repayments each month, based on a 30-year loan.
RateCity<a href="http://ratecity.com.au/">.</a>com<a href="http://ratecity.com.au/">.</a>au research director, Sally Tindall, said it’s incredible to think there is a now a generation of first home buyers who’ve never experienced an RBA rate hike. 
“Eight years is a long time between increases. Interestingly, the average home owner is paying less per month on their mortgage repayments now – but only marginally,” she said.  
“The RBA is unlikely to hike rates in the near future, but that doesn’t mean people should become complacent about paying down their debt.
“Keep an eye on your rate and shop around to see what other lenders are offering. The banks are desperate for new business, particularly as their profit margins are squeezed which is a win for borrowers.”
1300HomeLoan Managing Director John Kolenda said all signs point to the RBA leaving official rates at the all-time low of 1.5 per cent until next year and possibly 2020 with a rate cut now more likely in the long term than an increase.
Kolenda said the RBA once had form for getting amongst the action on Cup Day, but it has now been eight years since the central bank lifted its cash rate on the day that stops the nation, while its last rate movement was in August, 2016.
“It’s a pretty safe bet that the RBA’s cash rate will stay at 1.5 per cent when the Melbourne Cup is next held in November, 2019,” Kolenda said. 
“While there are some good signs for the domestic economy with lower unemployment and more first home buyers getting back into the market, the US-China trade war, housing conditions easing in Sydney and Melbourne, uncertain household consumption and the coming federal election will all influence the RBA to maintain its watching brief.
“Lenders have already increased rates out-of-cycle so there is no need for the RBA to do anything.”
 
 
 
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