Longstanding local builder-developer&nbsp;<a href="https://www.apartments.com.au/developers/gwh">GWH</a> has broken ground on its flagship Newcastle West development, ERA,&nbsp;signalling a significant step forward for what will become the city’s tallest residential address.&nbsp;

The milestone marks the beginning of construction on the 266-apartment project, which GWH describes as a defining moment in its continued growth across the region.

<a href="https://www.apartments.com.au/new-apartments/era-newcastle-west-124-126-bull-street-newcastle-west-nsw-2302">ERA</a> has been more than two years in planning, shaped through collaboration with financier Qualitas and its design project partners from&nbsp;<a href="https://www.apartments.com.au/architects/fk-australia">FK Australia</a>&nbsp;and&nbsp;<a href="https://www.apartments.com.au/landscape-architect/oculus">OCULUS</a>.

Before the first sod was turned, over 50 per cent of the building has been snapped up,&nbsp;a sign of buyer confidence in both the development itself and inner-city Newcastle more broadly.

[smartcode_project:default project_id=135096 project_image_fid=351103]

Positioned on Bull Street in Newcastle West, the dual-tower project will introduce 266 one, two and three-bedroom apartments, supported by more than 2,000 sqm of resident amenity including a podium pool deck, gym, sauna, cinema room and two rooftop terraces with harbour and ocean views.

Designed by FK Australia, ERA aims to set a new benchmark for urban living in Newcastle. The architecture positions the towers as a new marker on the city skyline, while the interiors emphasise daylight, generous glazing and modern finishes. Large balconies, thoughtful storage and contemporary kitchens cater to the growing owner-occupier demand in the CBD.

[smartcode_project:default project_id=135096 project_image_fid=351104]

GWH says ERA represents “continued momentum for GWH, continued investment in our region, and continued delivery of projects that raise the benchmark for quality and liveability.”&nbsp;

ERA’s location in the city’s west end, within walking distance of the harbour, the Newcastle Interchange, Honeysuckle dining precinct and the University of Newcastle’s city campus, positions it well for professionals, downsizers and investors seeking both connection and long-term value.

[smartcode_project:default project_id=135096 project_image_fid=351106]

The developer will also construct the project, supported by the Hunter Construction Group, adding an additional layer of certainty for purchasers.

Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/building-from-the-ground-up-gwh-takes-fully-integrated-development-model-to-new-heights">Building from the ground up: GWH takes fully-integrated development model to new heights</a>

Buyers will also be buoyed with the fact GWH has taken out the&nbsp;coveted 10-year Latent Defects Insurance policy on ERA, one of the only new developments under construction in the region with the new cover.

Offered by <a href="https://www.apartments.com.au/news/resilience-latent-defects-insurance">Resilience Insurance</a>, LDI is a first-right insurance product that protects purchasers from structural or waterproofing defects within the first 10 years after completion. Geron Property's adoption of the policy aligns with broader industry movement toward more rigorous assurances and supports buyer expectations around long-term asset performance.

With construction now officially underway and pre-construction pricing still available, the East Tower release offers a selection of remaining two and three-bedroom apartments priced from $980,000 to $2.56 million.&nbsp;

Completion is anticipated for early 2028.

[smartcode_project_cta:default project_id=135096]

Joel Robinson

GWH commences construction at ERA Newcastle, the city's tallest two buildings

Construction at Megara's new North Fremantle apartment development,&nbsp;<a href="https://www.apartments.com.au/new-apartments/serai-north-fremantle-21-mccabe-street-north-fremantle-wa-6159">Serai</a>, has reached a new milestone.

Buyers now have a chance to walk through a completed apartment, ahead of construction completion in early 2026.

The update marks a significant step for the 98-residence development on McCabe Street, where remaining apartments and townhomes continue to be secured by buyers seeking a low maintenance, lock-and-leave lifestyle, especially those seeking an ocean or river view with only a few of those apartments left.

Demand has remained steady among buyers living within 10 to 15 kilometres of <a href="https://www.apartments.com.au/developments/north-fremantle-wa-6159">North Fremantle</a>, largely long-term locals looking to transition from family homes without compromising on space, privacy or outlook.&nbsp;

[smartcode_project:default project_id=110291 project_image_fid=186202]

A completed three-bedroom apartment now offers the clearest preview yet of Serai’s interiors, river views and layout efficiency, with buyers responding strongly to its level of finish and indoor–outdoor connection.&nbsp;

“Many have commented on the quality of the fittings and the spaciousness of the living areas,” Megara's Stephen Vitale noted.

<a href="https://www.apartments.com.au/developers/megara">Megara</a>’s decision to pursue the elevated <a>North Fremantle</a> site followed two years of targeted acquisition work. Perched between the river and the ocean, the position was selected for its panoramic views and proximity to dining, boutique retail and transport connections.&nbsp;

“This exceptional location was meticulously chosen for its unrivalled outlooks and its access to the lifestyle that defines the area,” Megara Director Jamie Clarke said.&nbsp;

[smartcode_project:default project_id=110291 project_image_fid=186197]

The brief to architect Felipe Soto centred on expressing those views through a sculptural building form, a direction influenced by the Amalfi Coast and the local coastal landscape.&nbsp;

The project comprises 87 apartments and 11 townhouses, with one-bedroom residences already sold out and only limited two-bedroom layouts remaining. Three-bedroom apartments start from $1.995 million, townhouses from $2.75 million, and penthouses from $3.95 million.&nbsp;

Buyers are also moving to secure residences ahead of the government’s 37.5 per cent stamp-duty concession (capped at $50,000), which applies for eligible purchases within the timeframe.&nbsp;

[smartcode_project:default project_id=110291 project_image_fid=186198]

Amenity remains a key differentiator at Serai and a consistent point of discussion among those comparing local options.

Health and lifestyle-focused spaces, including a gym and yoga studio, sauna and steam room, heated pool with cabanas, and a fire-pit lounge, are complemented by an outdoor cinema, games room, dining spaces and a maker’s studio. Secure bike and watercraft storage, washdown areas and EV charging cater to the active coastal lifestyle that defines North Fremantle living.&nbsp;

[smartcode_project:default project_id=110291 project_image_fid=186200]

For many purchasers, the combination of design, amenity and early delivery has been decisive.

“People are purchasing at Serai for the river and ocean views, the prime location within close proximity to the beach, and because they don’t have to wait,” Vitale added, noting that move-in is now less than a year away.&nbsp;

As Megara continues construction toward completion, the opening of the finished apartment provides prospective buyers with a tangible view of life at Serai, clarity that is proving influential in a market where quality, certainty and lifestyle alignment are driving decisions.&nbsp;

[smartcode_project_cta:default project_id=110291]

Staff Writer

Megara releases first completed residence at Serai, North Fremantle as project tracks toward early 2026 completion

Macquarie York has appointed Roberts Co to as the Early Contractor Involvement (ECI) partner for its upcoming new Surfers Paradise apartment development, Sunset Residence.

Located at 50 Sunset Boulevard, Sunset Residences is a riverfront, design-driven tower set to elevate one of Surfers Paradise’s most rapidly transforming enclaves. The refined scheme, designed by Plus Studio, features 72 luxury residences, enhanced amenity, and improved connectivity to the Nerang &nbsp;River.&nbsp;

As ECI partner, Roberts Co is working closely with Macquarie York and the design team to optimise buildability, program, staging and procurement strategies ahead of construction commencement.&nbsp;

&nbsp;

Macquarie York Director, Roy Skaf, said Roberts Co’s early engagement will help ensure the landmark development realises its full potential.&nbsp;

“Sunset Residences is a signature project for Macquarie York, a chance to define a new level of riverfront living in Surfers Paradise," Skaf said.&nbsp;

&nbsp;

&nbsp;

<img alt="Roberts Co appointed Early Contractor Involvement partner for Macquarie York’s Sunset Residences on the Gold Coast" data-entity-type="file" data-entity-uuid="3dd22a45-168b-4e00-b6d2-4e7310b02084" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/SunsetResidences_Interior.jpg?VersionId=NAWvGq7l6BFB4vvh6u0xXWWISboHTi6q" />

“Partnering with Roberts Co under an ECI arrangement gives us the confidence that design decisions, construction methodology and programming are being rigorously considered from day one. Their collaborative mindset and technical capability are exactly what a project of this quality demands.”&nbsp;

&nbsp;

Construction is expected to commence following completion of the ECI phase and final design resolution.

Sunset Residences is one of three projects Macquarie York has locally. They have Rana Palm Beach, 60 apartments on Twenty Third Avenue, and Azariah, just nine residences on the dress circle Jefferson Lane, also in Palm Beach.

Macquarie York appoints Roberts & Co for early works agreement at Sunset Residences

Few developers in South East Queensland have shaped the new development apartment market as profoundly, or as consistently, as Mosaic Property Group. In 2025, the business delivered another very strong year across Brisbane, the Gold Coast, and the Sunshine Coast, building on the foundations of nearly two decades of discipline, long-term thinking, and relentless refinement of its craft.

Their continued success is driven from the top. Founder and Managing Director Brook Monahan, very much credits the success to a workforce of “massive grafters”, and a culture where complacency simply doesn’t exist.

“In every part of our business, we’re constantly pushing to get better” Monahan told <a href="http://apartments.com.au">Apartments.com.au</a>. “We never rest on our laurels.”

The company’s growth continued its upward trajectory, with the developer completing six luxury projects in 2025, representing approximately $850 million in value and delivering 536 new luxury homes. Mosaic also sold over $1.4 billion worth a new luxury apartments at an average price point of $3.41 million in 2025.

Heading into 2026, they have a further five projects under construction and an immediate pipeline across Brisbane and the Gold Coast, representing just shy of $2 billion in value. I spoke with Brook about everything from the evolution of Mosaic’s business to the fundamentals driving the SEQ property market.

<hr />
<h2>A market defined by two forces</h2>

The fundamental drivers of SEQ’s housing dynamics in 2025 are straightforward: a generational transfer of wealth on a scale Australia has never seen, and migration numbers that continue to exceed expectations.

“An enormous amount of wealth will move through the next decade,” Monahan explains. “That wave isn’t going anywhere.” Simultaneously, “you can’t run migration at the numbers we’re seeing, while also having a generational shift of wealth from boomers, and not expect demand to remain strong. People move here, they bring money, they want to buy a home and create a future.”

While top-end product in some pockets has softened from the frenzy of 18 months ago, Monahan believes&nbsp; the wave will remain “pretty strong,” especially for developers with brand trust and a long-term track record.&nbsp;

“The $4 million to $10 million segment remains fairly robust, but buyers are much more educated now than they’ve ever been. They have access to information and they’re smart people. They’re generally not&nbsp; willing to trust a new entrant asking $15 million with no track record.”

This heightened consumer discernment, he notes, is reshaping how premium projects are evaluated by developers.

<hr />
<h2>The problem behind the crisis</h2>

Despite strong demand, SEQ’s housing market remains severely undersupplied. Brisbane needs around 12,000 new homes per year, yet delivered only 4,000 last year. The Gold Coast requires around 6500 but delivered less than half of that. The backlog is massive.

“We’re probably 54,000 homes short in the next five years in Brisbane alone,” Monahan estimates. “Maybe 100,000 across the whole of Queensland.”

The core issue however isn’t planning.&nbsp;

“The planning environment is actually super supportive right now,” he says. “Approvals aren’t the problem. It’s turning approvals into real supply.”

The gap between development approvals and project starts has widened significantly as construction costs escalate, contractors disappear from the market, and inexperienced developers try, and fail, to bring projects to life.

“A development application (DA) is only part of the equation, it means little without the ability to deliver,” he explains. “Many applicants underestimate the complexity involved. It’s not just about securing a site; you need the right formula and all the right ingredients to make it work. Without that, the end result will fall short of expectations and increase the risk of project failure.

The result is market distortion: sites tied up by entrants who lack experience, capital certainty, construction understanding, or a realistic feasibility model. “It’s not good for the industry,” he says. “You get more and more mooted supply but very little real delivery.”

<hr />
<h2>Construction realities and the coming resource crunch</h2>

Beyond development capability, SEQ faces macroeconomic pressures. Over $7 billion must be delivered by late 2031 just for Olympics-related obligations. Add $18 billion in hospital and health infrastructure, and the region faces a “resource drain” Monahan believes will reshape delivery timelines and construction pricing for years.

“It will ultimately be great for SEQ for the next 20 years,” he says. “But it puts enormous pressure on an already chronically undersupplied housing market.”

This pressure will inevitably influence pricing. Double-digit growth cannot continue indefinitely, but Monahan sees no path to meaningfully lower construction costs. “It’s impossible to meet demand at a cheaper price point given labour capability and resource competition,” he says.

“Those who can afford it will keep paying more and the rest are fighting to get a foothold. That’s why the market keeps creeping upward.”

<hr />
<h2>Mosaic’s disciplined blueprint: Only A-Grade, iconic, irreplicable</h2>

With a long track record of delivery and in-house construction expertise, Mosaic works backwards from the cost of delivery to determine the right price for a site—a disciplined acquisition model they’ve adhered to from day one.

&nbsp;“We’re never out of the market,” Monahan says. “But we’re extremely disciplined. We don’t buy B+ sites. We won’t buy run-of-the-mill locations. Ever. That’s not our brand and it’s also not economically viable for us in most instances.”

Mosaic’s nine current developments illustrate this discipline:

<ul>
	<li aria-level="1"><a href="https://www.apartments.com.au/new-apartments/lily-by-mosaic-4-rosewood-avenue-broadbeach-qld-4218">Lily</a> and <a href="https://www.apartments.com.au/buildings/marella-146-surf-parade-broadbeach-qld-4218">Marella</a>, Broadbeach: Two 30-storey buildings with permanently protected views over parkland, beach and coastline 
	&nbsp;</li>
	<li aria-level="1"><a href="https://www.apartments.com.au/new-apartments/isabel-by-mosaic-96-the-esplanade-burleigh-heads-qld-4220">Isabel</a> and, <a href="https://www.apartments.com.au/new-apartments/josephine-by-mosaic-166-the-esplanade-burleigh-heads-qld-4220">Jospehine</a>, Burleigh Heads – all “masterpiece” sites on the Esplanade with enduring view corridors of beach, water and coastline in the heart of Burleigh 
	&nbsp;</li>
	<li aria-level="1"><a href="https://www.apartments.com.au/new-apartments/sophia-by-mosaic-1357-gold-coast-highway-palm-beach-qld-4221">Sophia</a>, Palm Beach- directly on the dunes of the most highly sought after stretch of northern Palm Beach beachfront real estate 
	&nbsp;</li>
	<li aria-level="1"><a href="https://www.apartments.com.au/new-apartments/madeline-by-mosaic-22-mary-avenue-broadbeach-qld-4218">Madeline</a>, Broadbeach – “180 degrees beach, water and coastline views, great walk score” 
	&nbsp;</li>
	<li aria-level="1"><a href="https://www.apartments.com.au/new-apartments/the-bedford-by-mosaic-16-30-prospect-street-kangaroo-point-qld-4169">The Bedford</a>, Kangaroo Point – a site Mosaic first identified in 2016. Amazing walk score, views and inner city connectivity 
	&nbsp;</li>
	<li aria-level="1"><a href="https://www.apartments.com.au/new-apartments/the-carter-by-mosaic-77-linton-street-kangaroo-point-qld-4169">The Carter</a>, Kangaroo Point – in between the Gabba and the Kangaroo Point peninsula with amazing walk score and uninterrupted and expansive northern city and river views 
	&nbsp;</li>
	<li aria-level="1">South Brisbane (launching 2026) – core inner-city Brisbane river waterfront site on the northern end of the peninsula with amazing river connection and permanent river and city views, amazing walk score</li>
</ul>

“Nothing we buy is guesswork,” Monahan says. “It’s always an iconic suburb where people genuinely want to live, with strong connections to water, lifestyle, amenity, or permanent view corridors.”

“Mosaic’s two most recent Brisbane acquisitions were several years in the making. The Bedford, launched on the prestigious Kangaroo Point peninsula and achieving 90 per cent sales within months was a site they identified back in 2016. The second, which is the yet to be released at 91 Montague Road in South Brisbane, has been on Mosaic’s radar since 2017.&nbsp;

Arguably one of Brisbane’s last great inner city riverfront sites, it sits within the city’s most dynamic cultural hub, offering unrivalled connectivity, lifestyle, and amenity, and standing as a landmark opportunity to define the next era of riverfront living.

“We know exactly what is and isn’t a Mosaic project. Strategic site selection is the critical foundation of everything we do. We’re always assessing opportunities, but based on our two most recent Brisbane acquisitions, it’s entirely possible that the sites we’re looking at today won’t transact for several years. That discipline is what ensures every project meets our exacting standards.”

<hr />
<h2>The Mosaic engine: Consistency, capability, and relentless execution</h2>

What separates Mosaic in a crowded field is not the ability to attract capital or buy a site, but the ability to deliver highly complex high end buildings, whether that is 37 storeys or 18 storeys, repeatedly and consistently.

“These buildings are inherently complex to deliver well,” Monahan says. “It takes a long time to know exactly what the market wants, how to deliver it, how to secure the right contractors and consultants, and how to align the product with what the market is actually willing to pay and can afford.”

With so many contractors exiting the market in recent years, genuine delivery capability has become increasingly rare. Monahan welcomes credible new entrants but cautions that underestimating the complexity of luxury development can lead to poor outcomes.&nbsp;

“It’s easy to assume high-end projects equal high returns, but without the right experience, track record, and capability, it’s a tough road. Attracting capital is one thing—delivering on expectations is another, and when that doesn’t happen, it impacts the entire market.’”

<hr />
<h2>Looking to 2026: A pipeline built on patience and precision</h2>

As 2025 draws to a close, Mosaic stands at the strongest point in its history. Since 2012 alone, the company has completed more than $2 billion in projects and is set to deliver another $2 billion worth of developments, hundreds of luxury apartments, all bearing Mosaic’s hallmark of impeccable delivery.&nbsp;

Next to launch are two standout projects: Josephine, an exclusive collection of just 30 half- and full-floor ultra-luxury residences coming soon to the Burleigh Heads beachfront, and a landmark tower on Montague Road in South Brisbane, comprising 204 apartments in the heart of the city’s cultural hub on the banks of the Brisbane river.

“We never arrive. There’s no finish line for us,” said Monahan. “Our focus is on continuing to evolve in the luxury space, creating incredible, design- and lifestyle-led properties that people love living in and that stand the test of time.” 
&nbsp;

What’s ahead for South East Queensland’s next development wave: Five minutes with Mosaic’s Brook Monahan

Developer Third.i has topped out its luxury Potts Point apartment development, <a href="https://www.apartments.com.au/new-apartments/muse-potts-point-30-34-brougham-street-potts-point-nsw-2011">Muse</a>.

Under construction by Dilcara and expected to complete in mid-2026, Muse comprises just 13 apartments designed by acclaimed architects <a href="https://www.apartments.com.au/architects/wmk-architecture">WMK Architecture</a> and Mathieson. The building’s design celebrates Potts Point’s heritage character while introducing refined modern elements like advanced building technology and private balconies and terraces that offer views of the Sydney city skyline.

[smartcode_project:default project_id=112613 project_image_fid=231687]

Luke Berry, Director &amp; Co-Founder at Thirdi Group, said Muse is a celebration of Potts Point’s unique character and charm.

"With only 13 residences, we’ve created something truly special for those who appreciate exclusivity and design excellence," Berry says"

"The views, the location, and the lifestyle make Muse a rare opportunity in Sydney’s property market. We’re thrilled to see the project take shape and look forward to welcoming our residents in mid-2026.”

[smartcode_project:default project_id=112613 project_image_fid=231686]

Only a limited number of residences remain at Muse.

Third.i recently launched The Rushcutters nearby, also just 13 large-scale apartments. The two-bedroom apartments were all snapped up in double-quick time. The three-bedroom apartments are priced from just under $5 million.

Potts Point has always been popular for apartment living, but given the lack of suitable development sites in the affluent suburb, new apartment developments have been few and far between.

Early next year Ceerose will launch <a href="https://www.apartments.com.au/new-apartments/belgravia-potts-point-117-victoria-street-potts-point-nsw-2011">Belgravia</a>, a mix of two- and three-bedroom apartments on Victoria Street.

[smartcode_project_cta:default project_id=112613]

Third.i tops out Muse, Potts Point apartments

Rba/philip Lowe

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The RBA kept the official cash rate at a record low 0.1 per cent at its December 2020 meeting.
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<div class="rss-mr-content">
At its meeting today, the Board decided to maintain the current policy settings, including the targets of 10 basis points for the cash rate and the yield on 3-year Australian Government bonds, as well as the parameters of the Term Funding Facility and the government bond purchase program.
Globally, the news has been mixed recently. On the one hand, infection rates have risen sharply in Europe and the United States and the recoveries in these economies have lost momentum. On the other hand, there has been positive news on the vaccine front, which should support the recovery of the global economy.
The recovery is also dependent on ongoing support from both fiscal and monetary policy. Hours worked in most countries remain noticeably below pre-pandemic levels and inflation is low and below central bank targets.
Financial conditions remain accommodative around the world, with bond yields near historically low levels. The positive news on vaccines has boosted equity markets, lowered risk premiums and supported further increases in some commodity prices.
The improvement in risk sentiment has also been associated with a depreciation of the US dollar and an appreciation of the Australian dollar.
In Australia, the economic recovery is under way and recent data have generally been better than expected.
This is good news, but the recovery is still expected to be uneven and drawn out and it remains dependent on significant policy support. In the RBA's central scenario, it will not be until the end of 2021 that the level of GDP reaches the level attained at the end of 2019.
In the central scenario, GDP is expected to grow by around 5 per cent next year and 4 per cent over 2022.
Employment growth was again strong in October, although the unemployment rate increased to 7 per cent as more people rejoined the workforce. A further rise in the unemployment rate is still expected, as businesses restructure in response to the pandemic and more people rejoin the workforce. The unemployment rate is forecast to decline next year, but only slowly and still to be around 6 per cent at the end of 2022.
The extended period of high unemployment and excess capacity is expected to result in subdued increases in wages and prices over coming years. In the September quarter, the Wage Price Index increased by just 0.1 per cent, to be 1.4 per cent higher over the year.
In underlying terms, inflation is forecast to be 1 per cent in 2021 and 1½ per cent in 2022.
The Board views addressing the high rate of unemployment as an important national priority. Its policy decisions over recent months will help here. These decisions are complementary to the significant steps taken by Australian governments to support jobs and economic growth.
The Bank's policy response has lowered interest rates across the yield curve, which will assist the recovery by: lowering financing costs for borrowers; contributing to a lower exchange rate than otherwise; and supporting asset prices and balance sheets.
The Term Funding Facility is also supporting the supply of credit to businesses. To date, authorised deposit-taking institutions have drawn down $84 billion under this facility and have access to a further $105 billion.
Over the past month, the Bank has bought $19 billion of government bonds under the bond purchase program and a further $5 billion of Australian government securities in support of the 3-year yield target. Since the start of this year, the RBA's balance sheet has increased by around $130 billion.
Given the outlook for both employment and inflation, monetary and fiscal support will be required for some time. For its part, the Board will not increase the cash rate until actual inflation is sustainably within the 2 to 3 per cent target range.
For this to occur, wages growth will have to be materially higher than it is currently. This will require significant gains in employment and a return to a tight labour market. Given the outlook, the Board is not expecting to increase the cash rate for at least 3 years.
The Board will keep the size of the bond purchase program under review, particularly in light of the evolving outlook for jobs and inflation.
The Board is prepared to do more if necessary.
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<div class="box-enquiries"> </div>
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jrobinson-rf4aSBido9

High unemployment rate is the priority: RBA Governor Philip Lowe's December 2020 meeting statement

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<div>
<div class="rss-mr-content">
At its meeting today, the Board decided to maintain the current policy settings, including the targets for the cash rate, the yield on 3-year Australian Government bonds, and the parameters for the expanded Term Funding Facility.
The global economy is gradually recovering after a severe contraction due to the pandemic. However, the recovery is uneven and its continuation is dependent on containment of the virus. While infection rates have declined in some countries, they have increased in others. The recovery is most advanced in China, where conditions have improved substantially over recent months. Globally, inflation remains very low and below central bank targets.
Financial conditions remain accommodative around the world and supportive of the economic recovery. Financial market volatility is low and the prices of many assets have risen substantially despite the high level of uncertainty about the economic outlook. Bond yields are at historically low levels, as are interest rates for most businesses and households. The Australian dollar remains just a little below its peak of the past couple of years.
The Australian economy experienced a sharp contraction in the June quarter, with output falling by 7 per cent. As difficult as this was, the decline in output was smaller than in most other countries and smaller than was earlier expected. A recovery is now under way in most of Australia, although the second-wave outbreak in Victoria has resulted in a further contraction in output there. The national recovery is likely to be bumpy and uneven and it will be some time before the level of output returns to its end 2019 level.
Labour market conditions have improved somewhat over the past few months and the unemployment rate is likely to peak at a lower rate than earlier expected. Even so, unemployment and underemployment are likely to remain high for an extended period. Wage and inflation pressures remain very subdued. The Bank will publish a full set of updated forecasts next month.
Over the past six months, the Australian economy has been supported by a substantial easing of fiscal policy. Public sector balance sheets in Australia are in good shape, which allows for continued support, with the Australian Government budget to be announced this evening. Both fiscal and monetary support will be required for some time given the outlook for the economy and the prospect of high unemployment.
The Bank's policy package is working as expected and is underpinning very low borrowing costs and the supply of credit to households and businesses. There is a very high level of liquidity in the Australian financial system and borrowing costs are at record lows. $81 billion of low-cost funding for authorised deposit-taking institutions (ADIs) has been advanced under the initial allowance of the Term Funding Facility. ADIs currently have access to a further $120 billion under this facility. As this is drawn down, there will be a further very significant expansion of the Reserve Bank's balance sheet.
Government bond markets are functioning well, alongside a significant increase in issuance. Bond yields are around record lows. Early in September, the Bank bought a further $2 billion of Australian Government Securities (AGS) in support of its 3-year yield target, bringing total purchases of government securities since March to $63 billion. Over the past couple of weeks, 3-year yields have fallen to around 18 basis points as markets price in some probability of further monetary policy easing.
The Board is committed to do what it can to support jobs, incomes and businesses in Australia. Its actions, including last month's decision to expand the Term Funding Facility, are keeping funding costs low and assisting with the supply of credit. The Board views addressing the high rate of unemployment as an important national priority. It will maintain highly accommodative policy settings as long as is required and will not increase the cash rate target until progress is being made towards full employment and it is confident that inflation will be sustainably within the 2–3 per cent target band. The Board continues to consider how additional monetary easing could support jobs as the economy opens up further.
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</div>
<div class="box-enquiries">For the official meeting statement on the RBA website, <a href="https://www.rba.gov.au/media-releases/2020/mr-20-24" target="_blank">click here</a>. </div>
 
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Board continues to consider how additional monetary easing could support jobs: RBA Governor Philip Lowe's October 2020 meeting statement

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At its meeting today, the Board decided to maintain the targets for the cash rate and the yield on 3-year Australian Government bonds of 25 basis points. It also decided to increase the size of the Term Funding Facility and make the facility available for longer.
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Under the expanded Term Funding Facility, authorised deposit-taking institutions (ADIs) will have access to additional funding, equivalent to 2 per cent of their outstanding credit, at a fixed rate of 25 basis points for three years. ADIs will be able to draw on this extra funding up until the end of June 2021. This extension will ensure that all ADIs continue to have access to the Term Funding Facility after the end of September, when the window for drawings under the initial allowance of 3 per cent of outstanding credit closes. Additional allowances associated with an ADI's growth of business credit will now also be available until the end of June 2021. Further details are provided in the accompanying notice.
To date, ADIs have drawn $52 billion under the Term Funding Facility and further drawings are expected over coming weeks. Today's change brings the total amount available under this facility to around $200 billion. This will help keep interest rates low for borrowers and support the provision of credit by providing ADIs greater confidence about continued access to low-cost funding.
The Term Funding Facility and the other elements of the Bank's mid-March package are helping to support the Australian economy. There is a very high level of liquidity in the Australian financial system and borrowing rates are at historical lows. Government bond markets are functioning normally, alongside a significant increase in issuance. Over the past month, the Bank bought a further $10 billion of Australian Government Securities (AGS) in support of its 3-year yield target of 25 basis points. Since March, the Bank has bought a total of $61 billion of government securities. Further purchases will be undertaken as necessary. The yield target will remain in place until progress is being made towards the goals for full employment and inflation.
Globally, an uneven economic recovery is under way after a very severe contraction in the first half of 2020. The future path of that recovery is highly dependent on containment of the virus. High or rising infection rates have seen a recent loss of growth momentum in some economies. By contrast, in China, economic growth has been relatively strong. In financial markets, volatility is low and the prices of many assets have risen substantially despite the high level of uncertainty about the economic outlook. Bond yields remain at historically low levels. The US dollar has depreciated against most currencies over recent months. Given this and higher commodity prices, the Australian dollar has appreciated, to be around its highest level in nearly two years.
In Australia, the economy is going through a very difficult period and is experiencing the biggest contraction since the 1930s. As difficult as this is, the downturn is not as severe as earlier expected and a recovery is now under way in most of Australia. This recovery is, however, likely to be both uneven and bumpy, with the coronavirus outbreak in Victoria having a major effect on the Victorian economy.
Employment increased in June and July, although unemployment and underemployment remain high. The virus outbreak in Victoria and subdued growth in aggregate demand more broadly mean that it is likely to be some months before a meaningful recovery in the labour market is under way. In the Bank's central scenario, the unemployment rate rises to around 10 per cent later in 2020 and then declines gradually to be to still around 7 per cent in two years' time.
Wage and prices pressures remain subdued and this is likely to continue for some time. Inflation is expected to average between 1 and 1½ per cent over the next couple of years.
The economy is being supported by the substantial, coordinated and unprecedented policy easing over the past six months. Fiscal policy is playing an important role. Public sector balance sheets in Australia are in good shape, which allows for continued support. Indeed, fiscal and monetary support will be required for some time given the outlook for the economy and the prospect of high unemployment. In addition, support for the recovery is being provided by Australia's financial institutions, which also have strong balance sheets and access to high levels of liquidity.
The Board is committed to do what it can to support jobs, incomes and businesses in Australia. Its actions, including today's extension of the Term Funding Facility, are keeping funding costs low and assisting with the supply of credit to households and businesses. The Board will maintain highly accommodative settings as long as is required and continues to consider how further monetary measures could support the recovery. It will not increase the cash rate target until progress is being made towards full employment and it is confident that inflation will be sustainably within the 2–3 per cent target band.
To read the original meeting statement, <a href="https://www.rba.gov.au/media-releases/2020/mr-20-20" target="_blank">click here</a>.
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RBA extend term funding facility: RBA Governor Philip Lowe's September 2020 meeting statement

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At its meeting today, the Board decided to maintain the current policy settings, including the targets for the cash rate and the yield on 3-year Australian Government bonds of 25 basis points.
The global economy is experiencing a severe contraction as countries seek to contain the coronavirus. Even though the worst of this contraction has now passed, the outlook remains highly uncertain. The recovery is expected to be only gradual and its shape is dependent on containment of the virus. While infection rates have declined in some countries, they are still very high and rising in others. International trade remains weak, although there has been a strong recovery in industrial activity in China over recent months.
Globally, conditions in financial markets remain accommodative. Volatility has declined and there have been large raisings of both debt and equity. The prices of many assets have risen substantially despite the high level of uncertainty about the economic outlook. Bond yields remain at historically low levels.
The Bank's mid-March package of support for the Australian economy is working as expected. There is a very high level of liquidity in the Australian financial system and borrowing rates are at historical lows. Authorised deposit-taking institutions are continuing to draw on the Term Funding Facility, with total drawings to date of around $29 billion. Further use of this facility is expected over coming months.
Government bond markets are functioning normally alongside a significant increase in issuance. The yield on 3-year Australian Government Securities (AGS) has been consistent with the target of around 25 basis points. The yield has, however, been a little higher than 25 basis points over recent weeks. Given this, tomorrow the Bank will purchase AGS in the secondary market to ensure that the yield on 3-year bonds remains consistent with the target. Further purchases will be undertaken as necessary. The yield target will remain in place until progress is being made towards the goals for full employment and inflation.
The Australian economy is going through a very difficult period and is experiencing the biggest contraction since the 1930s. As difficult as this is, the downturn is not as severe as earlier expected and a recovery is now underway in most of Australia. This recovery is, however, likely to be both uneven and bumpy, with the coronavirus outbreak in Victoria having a major effect on the Victorian economy. Given the uncertainties about the overall outlook, the Board considered a range of scenarios at its meeting. In the baseline scenario, output falls by 6 per cent over 2020 and then grows by 5 per cent over the following year. In this scenario, the unemployment rate rises to around 10 per cent later in 2020 due to further job losses in Victoria and more people elsewhere in Australia looking for jobs. Over the following couple of years, the unemployment rate is expected to decline gradually to around 7 per cent.
The Board also considered other scenarios. A stronger recovery is possible if progress is made in containing the virus in the near future. This progress would support an improvement in confidence and a less cautious approach by households and businesses to their spending. On the other hand, if Australia and other countries were to experience further widespread lockdowns, the recovery in both output and the labour market would be delayed. Details on these scenarios will be provided in the <cite>Statement on Monetary Policy</cite> on 7 August.
In each of the scenarios considered by the Board, inflation remains below 2 per cent over the next couple of years. In the most recent quarter, CPI inflation fell to –0.3 per cent in year-ended terms, reflecting lower oil prices and the effects of various policy measures, including the decisions to make child care and some pre-school free for a period. Inflation is expected to return to positive territory in the current quarter. Beyond that, given the ongoing spare capacity in the economy, inflation is expected to average between 1 and 1½ per cent over the next couple of years.
As Australians deal with the coronavirus, the economy is being supported by the substantial, coordinated and unprecedented easing of fiscal and monetary policy. The Australian Government's recent announcement that various income support measures will be extended is a welcome development and will support aggregate demand. It is likely that fiscal and monetary stimulus will be required for some time given the outlook for the economy and the labour market.
The Board is committed to do what it can to support jobs, incomes and businesses in Australia. Its actions are keeping funding costs low and assisting with the supply of credit to households and businesses. This accommodative approach will be maintained as long as it is required. The Board will not increase the cash rate target until progress is being made towards full employment and it is confident that inflation will be sustainably within the 2–3 per cent target band.
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Australia's bumpy and uneven recovery: RBA Governor Philip Lowe's August 2020 statement

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At its meeting today, the Board decided to maintain the current policy settings, including the targets for the cash rate and the yield on 3-year Australian Government bonds of 25 basis points.
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The global economy has experienced a severe downturn as countries seek to contain the coronavirus. Many people have lost their jobs and there has been a sharp rise in unemployment. Leading indicators have generally picked up recently, suggesting the worst of the global economic contraction has now passed. Despite this, the outlook remains uncertain and the recovery is expected to be bumpy and will depend upon containment of the coronavirus. Over the past month, infection rates have declined in many countries, but they are still very high and rising in others.
Globally, conditions in financial markets have improved. Volatility has declined and there have been large raisings of both debt and equity. The prices of many assets have risen substantially despite the high level of uncertainty about the economic outlook. Bond yields remain at historically low levels.
In Australia, the government bond markets are operating effectively and the yield on 3-year Australian Government Securities (AGS) is at the target of around 25 basis points. Given these developments, the Bank has not purchased government bonds for some time, with total purchases to date of around $50 billion. The Bank is prepared to scale-up its bond purchases again and will do whatever is necessary to ensure bond markets remain functional and to achieve the yield target for 3-year AGS. The yield target will remain in place until progress is being made towards the goals for full employment and inflation.
The Bank's market operations are continuing to support a high level of liquidity in the Australian financial system. Authorised deposit-taking institutions are continuing to draw on the Term Funding Facility, with total drawings to date of around $15 billion. Further use of this facility is expected over coming months.
The Australian economy is going through a very difficult period and is experiencing the biggest contraction since the 1930s. Since March, an unprecedented 800,000 people have lost their jobs, with many others retaining their job only because of government and other support programs. Conditions have, however, stabilised recently and the downturn has been less severe than earlier expected. While total hours worked in Australia continued to decline in May, the decline was considerably smaller than in April and less than previously thought likely. There has also been a pick-up in retail spending in response to the decline in infections and the easing of restrictions in most of the country.
Notwithstanding the signs of a gradual improvement, the nature and speed of the economic recovery remains highly uncertain. Uncertainty about the health situation and the future strength of the economy is making many households and businesses cautious, and this is affecting consumption and investment plans. The pandemic is also prompting many firms to reconsider their business models. As some businesses rehire workers as demand returns, others are restructuring their operations.
The substantial, coordinated and unprecedented easing of fiscal and monetary policy in Australia is helping the economy through this difficult period. It is likely that fiscal and monetary support will be required for some time.
The Board is committed to do what it can to support jobs, incomes and businesses and to make sure that Australia is well placed for the recovery. Its actions are keeping funding costs low and supporting the supply of credit to households and businesses. This accommodative approach will be maintained as long as it is required. The Board will not increase the cash rate target until progress is being made towards full employment and it is confident that inflation will be sustainably within the 2–3 per cent target band.
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Uncertainty remains among cautious households: RBA Governor Philip Lowe's July 2020 statement

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Even as the recovery gets under way, the RBA Governor Dr Philip Lowe expects there will still be a shadow cast by the pandemic.
"As a country, we will need to turn our minds as to how to move out of this shadow," Lowe said today.
"A reform agenda that makes Australia a great place for businesses to expand, invest, innovate and hire people would certainly help. For its part, the RBA will maintain its expansionary settings until progress is being made towards full employment and we are confident that inflation will be sustainably within the 2–3 per cent target band."
When answering questions he said the number of job losses has been lower than initially expected.
He described the pandemic as a "black swan event."
He re-affirmed negative interest rates were not on the policy agenda and were "extraordinarily unlikely" to happen in Australia. 
"I don't think they work," he said.
Lowe said, we need to re-examine the way we tax consumption as well as property among a number of other things he mentioned.
In light of APRA's estimated residential mortgage rate buffer of 2.5% he said the odds of the cash rate increasing by such a significant amount wasn't likely
He also discussed his fears of a lack of dynamism in the economy, that we would go too far in the movement towards regulation and impact the future and growth of the economy.
If we want to have a better standard of living for us and our children then dynamism and growth in the economy are vital.
In his opening statement he said, "the evidence so far is that our mid-March package is working as expected and it is helping build the necessary bridge to the recovery."
"The shape and timing of that recovery depends not only on when restrictions are lifted, but also on the confidence that Australians have about their own health and their finances."
"With the national health outcomes better than earlier feared, it is possible that the economic downturn will not be severe as earlier thought. Much depends on how quickly confidence can be restored."
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j.ballantyne1990-6AQqhLzZaK

RBA governor expects long shadow cast by the pandemic as recovery gets underway

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At its meeting today, the Board decided to maintain the current policy settings, including the targets for the cash rate and the yield on 3-year Australian Government bonds of 25 basis points.
The global economy is experiencing a severe downturn as countries seek to contain the coronavirus. Many people have lost their jobs and a sharp rise in unemployment is occurring. At the same time, the containment measures have reduced infection rates in a number of countries. If this continues, a recovery in the global economy will start later this year, supported by both the large fiscal packages and the significant easing in monetary policies.
Globally, financial markets are working more effectively than they were a month ago, although conditions have not completely normalised. This improvement reflects both the decline in infection rates and the substantial measures undertaken by central banks and fiscal authorities. Credit markets have progressively opened to more firms and long-term bond rates remain at historically low levels.
In Australia, the functioning of the government bond markets has improved and the yield on 3-year Australian Government Securities (AGS) is at the target of around 25 basis points. Given these developments, the Bank has scaled back the size and frequency of bond purchases, which to date have totalled around $50 billion. The Bank is prepared to scale-up these purchases again and will do whatever is necessary to ensure bond markets remain functional and to achieve the yield target for 3-year AGS. The target will remain in place until progress is being made towards the goals for full employment and inflation.
The Bank's daily open market operations are continuing to support credit and maintain low funding costs in the economy. To assist with the smooth functioning of Australia's capital markets, the Bank has decided to broaden the range of eligible collateral for these operations to include Australian dollar securities issued by non-bank corporations with an investment grade credit rating. More details are provided in the accompanying market notice.
The Australian economy is going through a very difficult period and there is considerable uncertainty about the outlook. Reflecting this uncertainty, the Board considered a range of scenarios at its meeting. In the baseline scenario, output falls by around 10 per cent over the first half of 2020 and by around 6 per cent over the year as a whole. This is followed by a bounce-back of 6 per cent next year.
There has been a substantial, coordinated and unprecedented fiscal and monetary response in Australia to the coronavirus. Without this response, the outlook would have been even more challenging. These policies are supporting the economy right now and will help when the recovery comes. They are supporting people's incomes, maintaining the important connections between businesses and their employees, underpinning the supply of credit to businesses and households, and keeping borrowing costs low. The deferral of loan and other payments is helping people manage their cash flows. The Australian banking system, with its strong buffers of capital and liquidity, is also helping the economy traverse this difficult period.
In the baseline scenario considered by the Board, the unemployment rate peaks at around 10 per cent over coming months and is still above 7 per cent at the end of next year. A lower unemployment rate than this is possible if the reduction in labour demand is accompanied by a larger reduction in average hours worked, rather than by people losing their jobs.
The Board also considered other scenarios. A stronger economic recovery is possible if there is further substantial progress in containing the coronavirus in the near term and there is a faster return to normal economic activity. On the other hand, if the lifting of restrictions is delayed or the restrictions need to be reimposed or household and business confidence remains low, the outcomes would be even more challenging than those in the baseline scenario. These scenarios will be discussed in the <cite>Statement on Monetary Policy</cite>, to be released later this week.
In the various scenarios considered by the Board, inflation remains below 2 per cent over the next few years. In the March quarter just passed, CPI inflation rose to 2.2 per cent, but it is expected to turn negative temporarily in the June quarter, due to falls in oil prices, the introduction of free child care and deferrals of various price increases. Further out, in the baseline scenario inflation is 1 to 1½ per cent in 2021 and gradually picks up further from there.
Given this outlook, the Bank will maintain its efforts to keep funding costs low in Australia and credit available to households and businesses. The Board is committed to do what it can to support jobs, incomes and businesses during this difficult period and to make sure that Australia is well placed for the expected recovery. The Board will not increase the cash rate target until progress is being made towards full employment and it is confident that inflation will be sustainably within the 2–3 per cent target band.
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Deferral of loans helping manage COVID-19 fallout: RBA Governor Philip Lowe's May 2020 meeting statement

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The recent economic contraction, uncertainty and social distancing measures were likely to result in very little turnover in the housing market, according to the latest RBA minutes.
"It remained unclear how this would affect residential property prices," the board advised.
Most households with mortgages had significant buffers of accumulated prepayments, with around half of these loans having prepayments that exceeded six months of payments, it noted.
The share of mortgages that may not have a buffer of liquid assets was around 15 per cent.
Measures of household financial stress had been at relatively low levels prior to the COVID-19 outbreak, the latest board minutes had noted.
Members were informed that, at the time of the April meeting, banks had reported that around 5 per cent of households had enquired about deferring mortgage repayments.
It noted that the risks from residential property markets had diminished over the course of the preceding year as increases in housing prices in Sydney and Melbourne had led to a reduction in the share of households at risk of having negative equity on their housing assets.
Nationally, around 3 per cent of mortgages had negative equity positions, with most of these in Western Australia.
The bank noted for households, a large proportion of the monetary policy easing since May 2019 had flowed through to mortgage rates paid. 
Lenders had reduced their interest rates on variable rate housing loans by 25 basis points following the reduction in the cash rate on 3 March. 
"While most lenders did not reduce their standard variable rates following the further cut in the cash rate on 19 March, they had announced a reduction for interest rates on fixed rate loans and measures to defer interest and loan payments for distressed households," the minutes noted.
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Unclear how very little turnover will affect residential property prices: RBA

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The RBA boss says it is highly probable that the severe shocks we are now experiencing will change the mindsets of some people and businesses.
"Even after the restrictions are lifted, it is likely that some of the precautionary behaviour will persist," Dr Philip Lowe said in a speech today <a href="https://www.rba.gov.au/speeches/2020/sp-gov-2020-04-21" target="_blank">giving an economic update</a>.
"In the months ahead, we are likely to lose some businesses, despite best efforts, and some of these businesses will not reopen.
"There will also be a higher level of debt and some households might revaluate the risks of having highly leveraged balance sheets.
"It is also probable that there will be structural changes in the economy.
"We are all learning to work, shop and travel differently.
"Some of these changes will probably stay with us, requiring a rethinking of business models.
"So the crisis will have reverberations through our economy for some time to come," Dr Lowe said.
"On the optimistic side, the restrictions could be lifted more quickly, with the virus being contained.
"In that case, a stronger recovery could be expected, particularly in light of the very large monetary and fiscal support that is in place.
"On the other hand, if the restrictions stay in place longer, or they have to be reimposed, the recovery will be delayed and interrupted.
"In that case, the loss of incomes and jobs would be even more pronounced.
"Whatever the timing of the recovery, when it does come, we should not be expecting that we will return quickly to business as usual.
"Rather, the twin health and economic emergencies that we are experiencing now will cast a shadow over our economy for some time to come."
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Rba/philip Lowe

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