A landmark former orphanage site in Surrey Hills could be transformed into a new residential community under plans lodged by <a href="https://www.apartments.com.au/developers/antipodean-land-developments">Antipodean Land Developments</a> that would deliver 76 apartments and townhouses while restoring some of the suburb's most significant heritage buildings.

The burgeoninng Melbourne-based developer has submitted plans for the 9,158 sqm site at 1 Kent Road and 24 Durham Road, home to the former St Joseph's Home for Destitute Children, a historic institutional complex dating back to the late 19th century. The proposal seeks to adaptively reuse several heritage buildings while introducing two new four-storey residential buildings set within extensive landscaped grounds.

Designed by <a href="https://www.apartments.com.au/architects/woods-bagot">Woods Bagot</a> and Kerstin Thompson Architects, the project has been conceived as a contemporary residential village embedded within a restored heritage precinct. The development team describes the design approach as "The Village in the Garden," with new buildings positioned among mature landscaping by OCULUS and significant heritage structures.

<img alt="First look: Antipodean Land Developments plans heritage-led apartment community in Surrey Hills" data-entity-type="file" data-entity-uuid="44ec8c1b-c0b6-44ae-859e-5811b3e6a023" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Untitled%20design%20%281%29.png?VersionId=p.p1_KFh4iQoV4nisdnPfQBAsWNi7m79" />

The proposal would deliver 76 dwellings comprising a mix of apartments and duplex-style residences, significantly increasing housing supply on one of the largest privately held residential landholdings in Surrey Hills. The development includes 127 car spaces, 24 bicycle spaces and more than 1,000 sqm of communal amenity, with the existing chapel building earmarked for conversion into resident facilities.

According to the planning submission, the project centres on the restoration and adaptive reuse of the site's most significant heritage assets, including the original c.1889 St Joseph's building, the chapel designed by architect Augustus Andrew Fritsch, and the historic brick perimeter walls and entry gates. The proposal also incorporates the retention of other contributory buildings including the former infirmary and school building.

Tract Consultants, in the planning report accompanying the application, said the scheme had been shaped through extensive heritage analysis and design development.

"The shared vision for the Site by the project team has culminated in a scheme which successfully breathes life back into a historic site while delivering upon the objectives of Victoria's Housing Statement in a carefully curated and contextually responsive manner."

<img alt="First look: Antipodean Land Developments plans heritage-led apartment community in Surrey Hills" data-entity-type="file" data-entity-uuid="7263b7d8-95ea-400f-9531-6ca7d22c3c33" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Untitled%20design%20%282%29.png?VersionId=4cR1tiWOsDpgxEOwZi5vVFcyvvOsYkIE" />

The proposal is being assessed under Victoria's Significant Residential Development with Affordable Housing pathway. As part of the application, three per cent of the project's residential development cost would be contributed to the Social Housing Growth Fund. The development would also provide a diverse mix of one, two and three-bedroom residences targeting a broader range of buyers than typically found in Surrey Hills' detached housing market.

Sustainability initiatives include an anticipated 66 per cent BESS score, natural cross-ventilation to 80 per cent of apartments, 28 per cent deep soil landscaping and a canopy cover outcome exceeding local planning requirements. The proposal also sets aside more than 1,083 sqm for communal indoor and outdoor resident amenity spaces.

<img alt="First look: Antipodean Land Developments plans heritage-led apartment community in Surrey Hills" data-entity-type="file" data-entity-uuid="33fad46f-fe26-4d0a-acfd-6b776e1c6a3d" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Untitled%20design.png?VersionId=D9F6WVSyYCtGvSUmith35LRp6R7PQkw_" />

Planning documents describe the property as one of the largest underutilised residential sites in Surrey Hills, arguing it presents a rare opportunity to introduce "missing middle" housing in an established inner-eastern suburb while preserving and revitalising a significant heritage precinct.

Antipodean Land Developments has built a reputation for design-focused residential projects across Melbourne, particularly in the medium-density sector. Previous developments include Neighbourhood in Brunswick East, delivered with Breathe Architecture, and Balfe Park Lane, designed by Kerstin Thompson Architects.

They've been very active in site acquisition as they build out their future development pipeline. They recently launched Thornubury House, 45 apartments above a mix of commercial, retail, and food and beverage tenancies, and have plans for a boutique project in Fitzroy and another <a href="https://www.apartments.com.au/news/vic/antipodean-plan-apartments-for-deepdenes-missing-middle-on-whitehorse-road">"missing middle" project</a> on Deepdene's Whitehorse Road.

Joel Robinson

First look: Antipodean Land Developments plans heritage-led apartment community in Surrey Hills

Developer <a href="https://www.apartments.com.au/developers/auyin-property-development">Auyin</a> is the latest to turn to the Victorian Government's Development Facilitation Program in an effort to secure approval for its long-planned, mixed-use project in Elsternwick.

In 2018, Auyin lodged plans with Glen Eira City Council for a 14-storey building, however Council approved a reduced eight-storey scheme. A subsequent VCAT appeal in 2019 upheld the eight-storey height limit.

The project was later amended to nine storeys, but Auyin is now seeking to revive something closer to its original vision. The developer argues that the planning context has evolved significantly over the past decade, particularly within the Elsternwick Activity Centre, where higher-density development has increasingly been encouraged along Glen Huntly Road.

The proposal would transform the 1,239 sqm site at <a href="https://www.apartments.com.au/new-apartments/7-12-horne-street-elsternwick-vic-3185">7-15 Horne Street</a>, opposite Elsternwick Railway Station, into a 13-storey residential and retail development designed by CBG Architects, with 40 apartments

The site currently comprises three commercial properties.

<img alt="First look: 13-storey mixed-use tower planned for Elsternwick activity centre" data-entity-type="file" data-entity-uuid="5f465dd4-509b-4082-a669-0253b313914b" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/elsternwick%20podium.png?VersionId=72frWi0SmQ5AVJ3ARRhX5ILUYObhTm7x" />

The proposed apartment mix comprises 25 two-bedroom and 15 three-bedroom residences above 200 sqm of retail space at ground level. Residents would have access to a 90 sqm wellness facility, a 351 sqm communal indoor and outdoor terrace on the third level, and extensive landscaped areas throughout the development. A publicly accessible 135 sqm plaza would be created on the north-east corner of the site, providing seating, landscaping, and a new gathering space adjoining Horne Street.

The design adopts a four-storey podium that references the finer-grain character of the surrounding streetscape, with the upper tower recessed behind generous setbacks on all boundaries.

<img alt="First look: 13-storey mixed-use tower planned for Elsternwick activity centre" data-entity-type="file" data-entity-uuid="e637e763-2abc-4c34-a0aa-5c7ad36fae18" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/elsternwick%20open.png?VersionId=J1AoOpZgTyaF.KeeFSX6lMjEScX8KKRi" />

A key element of the proposal is the reconfiguration and widening of the surrounding laneways. Vehicle access would be retained from Lois Lane, with upgraded pedestrian connections linking Ross Street and Horne Street. The development would provide 58 residential car spaces, two retail car spaces, and 52 bicycle spaces across two basement levels and ground-floor facilities.

Architecturally, the building draws inspiration from the established character of Elsternwick Village. The façade combines dark charcoal brickwork, textured concrete, bronze-toned metal detailing, and extensive planting integrated into podium and tower levels. The design also incorporates a chamfered corner treatment and publicly accessible plaza intended to strengthen pedestrian activity around the station precinct.

Elsternwick's last new development completion was&nbsp;EVA Elsternwick by Pitard late last year. <a href="https://www.apartments.com.au/developers/milieu-property">Milieu</a> is working away on its nature-led neighbourhood, <a href="https://www.apartments.com.au/new-apartments/elsternwick-gardens-by-milieu-8-gordon-street-elsternwick-vic-3185">Elsternwick Gardens</a>, on Gordon Street, with its first stage expected to complete next year.

First look: Auyin seeks mixed-use apartment project in growing Elsternwick Activity Centre

<a href="https://www.apartments.com.au/new-apartments/otium-parkdale-123-125-como-parade-east-parkdale-vic-3195">Otium Parkdale</a>, the 13-residence boutique development by&nbsp;<a href="https://www.apartments.com.au/developers/huxtable-property">Huxtable Property</a>, has entered its final stages of delivery, with completion expected within the coming month and more than half of the residences sold.

The Como Parade East project is nearing the finish line at a time when opportunities to purchase new apartments in <a href="https://www.apartments.com.au/developments/parkdale-vic-3195">Parkdale</a> remain exceptionally limited. Fewer than 10 per cent of dwellings in the bayside suburb are apartments, making developments like Otium a relatively rare addition to a market traditionally dominated by detached housing.

[smartcode_project:default project_id=134974 project_image_fid=5427]

The three-level development comprises 13 residences, including ten two-bedroom apartments and three larger three-bedroom homes, all positioned above a secure basement car park.

Designed by <a href="https://www.apartments.com.au/architects/almeida-architects">Almeida Architects</a> with a strong connection to its coastal surroundings, Otium combines red brick, exposed concrete and dark metal detailing with integrated landscaping and greenery. Expansive glazing, generous balconies and terraces have been incorporated throughout the design to maximise natural light and reinforce indoor-outdoor living.

Inside, the residences feature engineered European oak flooring, natural and reconstituted stone benchtops, Bosch kitchen appliances, ducted heating and cooling, lift access and secure entry systems. The larger three-bedroom residences on the upper level have been designed with house-like proportions, while the two-bedroom apartments prioritise functionality, flexibility and low-maintenance living.

[smartcode_project:default project_id=134974 project_image_fid=5421]

The project is now in its final stages, with <a href="https://www.apartments.com.au/builders/labco">Labco</a> completing the remaining landscaping and external finishing works following the completion of the residences' interiors.

Otium's location within the heart of Parkdale continues to underpin its appeal. Residents will be just steps from local cafés, restaurants, shops and the newly elevated Parkdale Station, while the beach is less than a kilometre away.

With the project tracking ahead of schedule, buyers can currently secure a residence with a five per cent deposit and benefit from settlement terms of up to eight months. The advanced stage of construction also provides buyers with the opportunity to walk through the near-complete residences and experience the quality and finishes firsthand ahead of completion.

[smartcode_project_cta:default project_id=134974]

Otium Parkdale enters final month before completion as rare apartment opportunity nears sellout

A new boutique apartment development is entering the market in <a href="https://www.apartments.com.au/developments/chermside-qld-4032">Chermside</a>, with Brisbane-based developer <a href="https://www.apartments.com.au/developers/ausdev">Ausdev</a> bringing 33 residences to a well-connected pocket of Brisbane's north.

<a href="https://www.apartments.com.au/new-apartments/parkdrive-apartments-chermside-25-sammells-drive-chermside-qld-4032">Parkdrive Apartments</a>, at 25 Sammells Drive, will comprise a mix of one- and two-bedroom residences positioned within walking distance of Westfield Chermside, The Prince Charles Hospital, and Bradbury Park.

Established in 1989, Ausdev has a long-standing presence across both development and construction, with Parkdrive Apartments representing its latest residential project in Brisbane's northern suburbs.

[smartcode_project:default project_id=152125 project_image_fid=363778]

The development has been designed around open-plan living and natural light, with residences featuring stone benchtops, timber cabinetry, BOSCH appliances, and private balconies that extend the living areas outdoors.

Kitchens are positioned as the centrepiece of the homes, incorporating natural material palettes and integrated appliances, while bathrooms have been designed with a focus on functionality and understated finishes.

Residents will have access to a communal barbecue and entertaining area on Level 3, providing shared outdoor space within the development. Secure parking and lift access are also incorporated into the building.

The project will deliver a limited collection of 33 apartments, with one-bedroom residences priced from $749,000.

[smartcode_project:default project_id=152125 project_image_fid=363782]

Beyond the building itself, the location places residents within easy reach of several of Chermside's key amenities. Bradbury Park is around 350 metres away, while Westfield Chermside is approximately 1.3 kilometres from the site. The Prince Charles Hospital is located within 750 metres, and the Chermside Bus Interchange is around 1.5 kilometres away, providing connections across Brisbane.

Parkdrive Apartments adds to the growing residential pipeline in Chermside, a suburb that continues to evolve as a major retail, healthcare, and transport hub for Brisbane's north.

[smartcode_project_cta:default project_id=152125]

Ausdev introduces boutique Parkdrive Apartments to Chermside's growing centre

<a href="https://www.apartments.com.au/developers/skymark-group">Skymark</a>'s boutique Cronulla development Solis has secured a 10-year Latent Defects Insurance policy through Resilience Insurance, providing buyers of the 16-residence building on Ewos Parade with structural and waterproofing protection that extends a decade beyond the building's completion.

Currently under construction and due for completion in late 2027, <a href="https://www.apartments.com.au/new-apartments/solis-cronulla-8-ewos-parade-cronulla-nsw-2230">Solis</a> is one of a small number of new developments in the Sutherland Shire to carry Resilience LDI coverage, a distinction that carries increasing weight as buyer confidence in the off-the-plan sector continues to be shaped by how developers stand behind their product.

Latent Defects Insurance, which entered the Australian market in 2022 when Resilience Insurance was approved to offer the cover, protects buyers against major structural or waterproofing defects for ten years post-completion. Unlike traditional statutory warranties, it operates as a first-resort policy, if a covered defect arises, the insurer responds directly, without the buyer needing to pursue the builder or developer through a lengthy claims process.

Resilience Insurance CEO Corey Nugent has noted that the product addresses something fundamental to the new apartment market.

"The overarching feedback from prospective buyers in the new development space is that they want more confidence and assurances around the quality of the build," Nugent says.

"Resilience Insurance Latent Defects Insurance not only gives them complete peace of mind for 10 years, but it shows the developer they are buying from is standing by their product."

[smartcode_project:default project_id=150499 project_image_fid=370898]

For Solis, the Resilience LDI policy adds a meaningful layer of accountability to an already considered project. The development comprises nine two-bedroom and seven three-bedroom residences, including one dual-level three-bedroom apartment, across a five-storey building on Ewos Parade, positioned between Shelly Beach and South Cronulla.

Garden apartments connect directly to private landscaped courtyards, while upper-level homes capture beach views to the east from level four and above.&nbsp;

All 16 residences include at least one balcony or courtyard, and select apartments on the upper floors feature bar areas and secondary flexible living spaces.

Hiba Sander, Managing Director of Skymark, says Solis offers a rare balance, nestled between the quiet beauty of secluded beaches and the lively charm of South Cronulla's esplanade.

"It's a place to choose your pace and live gracefully, seaside'," Sander says.

[smartcode_project:default project_id=150499 project_image_fid=370900]

The architecture, designed by <a href="https://www.apartments.com.au/architects/ida-design-group">IDA Design Group</a>'s Michael Trinh, draws from the natural erosion patterns of <a href="https://www.apartments.com.au/developments/cronulla-nsw-2230">Cronulla</a>'s sandstone headlands, translating the organic forms of the coastline into soft curves, pavilion-style massing, and a material palette chosen for longevity in a salt-tinged environment.&nbsp;

Textured natural stone, soft renders, and timber-look battens reference the tones of the surrounding cliffs, while the building has been oriented to maximise natural light and passive ventilation, with primary living spaces facing north and east to capture morning sun and sea breezes.

"At Solis, our aim was to create architecture that feels quietly confident, grounded in natural materials like stone and timber, and elevated by light and landscape," Trinh says.&nbsp;

"The buildings are designed to sit gently within their coastal surrounds, with expansive glazing and abundant greenery creating a seamless dialogue between inside and out."

[smartcode_project:default project_id=150499 project_image_fid=370897]

Interiors by <a href="https://www.apartments.com.au/architects/hot-black">Hot Black</a> carry the same material language through to every room. Kitchens feature integrated Gaggenau appliances, sculpted stone benchtops, and Lo &amp; Co joinery, while bathrooms feature natural stone, timber, and brushed metal finishes.&nbsp;

Hot Black Founder and Design Director Sophie Safrin describes the intent as one of considered restraint: "At Solis, every detail has been thoughtfully considered to create a timeless coastal retreat, calm, refined, and effortlessly liveable. From natural finishes to seamless indoor-outdoor flow, Solis offers a quiet elegance that's deeply connected to its surroundings.

The landscape, designed by Julian Brady of <a href="https://www.apartments.com.au/landscape-architect/sitedesignstudios">Site Design Studios</a>, treats green space as an integral part of the resident experience rather than an afterthought.&nbsp;

"Gentle curves and layered native plantings mirror the ebb and flow of the ocean," Julian Brady says, "creating a serene connection between architecture and place."&nbsp;

Coco Republic has provided bespoke furniture packages tailored to the project's coastal palette.

[smartcode_project:default project_id=150499 project_image_fid=370899]

Skymark has an established track record in the Sutherland Shire, with a portfolio spanning Cronulla, Woolooware and Burraneer that includes Isla, Sylva, Bask, Shells, Sula and Mist. Securing LDI on Solis reflects a broader shift in how the developer is positioning its buildings to buyers, at a time when Resilience Insurance expects the policy to become mandatory in New South Wales by 2028.

Sales at Solis are launching soon through Ray White Projects, with an official event scheduled for 11 June. Enquire for more information.

[smartcode_project_cta:default project_id=150499]

Skymark takes out 10-year Resilience Insurance LDI at Solis Cronulla

Rba/philip Lowe

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Chair
Members of the Committee
It is a pleasure to be here in Melbourne to explain our thinking on the Australian economy.
My colleagues and I view this as an important part of the accountability process for the Reserve Bank.
As usual, we look forward to answering your questions.
Since we last met in February, the global economy has strengthened.
As a result, in most advanced economies, economic growth has been sufficient to push unemployment rates down further.
A number of countries now have unemployment rates that are close to, or below, conventional estimates of full employment.
Conditions have also improved in many emerging market economies, partly due to an increase in global trade.
Commodity prices have mostly risen over recent months.
In China, growth has surprised on the upside a little of late.
The main challenge there continues to be containing the risks from the build-up of debt, while at the same time keeping growth on a steady path.
This remains a work in progress.
Economic growth has also picked up in the euro area, with conditions the best they have been since the euro area crisis in 2012.
On the other side of the ledger, though, in the United States the earlier optimism that the new administration's fiscal policies would spur stronger growth has dissipated.
Since we last met, the Federal Reserve has increased interest rates twice and the policy rate in the United States now stands at 1¼ per cent.
Despite this, the US dollar has depreciated in global markets, which has surprised many observers.
The Bank of Canada has also increased its interest rate, reversing some of the policy insurance it took out earlier when the outlook was less positive.
Elsewhere, there is no longer an expectation that central banks will announce yet further monetary stimulus and some central banks have indicated that they may scale back some of the current stimulus if conditions continue to improve.
This is a positive development.
As well as this change in the outlook for global monetary policy, another prominent theme in discussions of the global economy of late has been the slow growth in wages.
Despite the success that a number of countries have had in generating jobs, wage growth remains low.
This is contributing to a continuation of inflation rates that are below target in most advanced economies, although in headline terms they are mostly higher than a year ago.
The reasons for the low growth in wages are complex.
The fact that it is a common experience across countries suggests some global factors are at work.
One possibility is that workers feel a heightened sense of potential competition; either from advances in technology or from international competition.
More competition means less opportunity to put your price up. In the case of workers, it means slower rates of increase in wages.
At the same time, many workers feel an increased sense of uncertainty and they feel less secure.
This too is contributing to slow aggregate wage growth.
The slow growth in wages is underpinning the low inflation outcomes in much of the world.
It is possible that these effects will pass and that the normal relationship between tighter labour markets and higher wages will reappear.
It is also possible that the current environment turns out to be quite persistent.
How things turn out on this front is likely to have a significant bearing on the next stage in the global economic cycle.
I would now like to turn to the Australian economy.
The most recent GDP data are quite dated now and are for the March quarter.
They showed growth weaker than we had earlier expected.
This, however, partly reflected temporary factors, including weather-related disruptions to production and quarter-to-quarter volatility in resource exports.
Since then, the recent run of data has been consistent with a pick-up in growth.
There has been an improvement in survey-based measures of business conditions and capacity utilisation has increased.
Employment growth has also picked up and retail spending has been a bit stronger of late.
Financial conditions remain favourable, with interest rates remaining low and banks willing to lend.
The Reserve Bank released its latest forecasts for the economy last Friday.
In summary, our central scenario is for GDP to grow at an average of around 3 per cent over the next couple of years.
This would be better than we have seen for some time.
The transition to lower levels of mining investment following the mining investment boom is now almost complete.
This means that falling levels of mining investment will not be a drag on the economy for much longer.
Instead, with some large LNG projects reaching completion soon, GDP growth is expected to be boosted by a lift in LNG exports.
For some time we have been looking for a strong pick-up in private business investment outside the resources sector.
This is taking longer to occur than expected.
While we do see positive signs in parts of the economy, many firms still show some reluctance to commit to significant investment, often citing a range of uncertainties.
It is possible that this reluctance will continue for a while yet.
But it is also possible that the improvement in business conditions that we have seen will give firms the confidence to invest more, after a period of under-investment.
We have incorporated a middle path into our own forecasts.
On the investment front a positive development has been an increase in spending on public infrastructure, particularly transport.
This is directly supporting aggregate demand and is having some positive spin-offs elsewhere in the economy.
It is also addressing earlier under-investment and should improve the supply side of the economy.
Another factor that has a bearing on the outlook is the behaviour of households.
There is an adjustment going on, with many people getting used to lower growth in their real wages.
Many now see this as more than just a temporary development, with wage increases of 2 point something per cent now the norm.
In my view, the underlying drivers of the slower wage growth in Australia are much the same as we are seeing overseas.
At the same time, the household sector is also dealing with higher levels of debt relative to income.
Higher electricity prices are also affecting household budgets.
This all means that consumer spending behaviour is something we continue to watch carefully.
One positive development in this area over recent times has been a pick-up in employment growth, which should boost incomes.
A little while ago, employment growth was on the weak side and the unemployment rate had ticked up.
In contrast, in recent months employment growth has been noticeably stronger and more people have entered the labour force.
Encouragingly, the gain in jobs is evident in all states, including in Western Australia and Queensland, which have been adjusting to lower levels of mining investment.
Our central scenario is for the national unemployment rate to move gradually lower, although it is likely to be some time before we reach what could be considered full employment in Australia.
Another area that we continue to watch closely is the housing market. Conditions continue to vary significantly across the country.
The Melbourne and Sydney markets have been much stronger than elsewhere.
There are some signs of slowing in these two markets, although these signs are not yet definitive.
In some markets, a large increase in the supply of new dwellings is expected over the next year as new buildings are completed.
This increase in supply is expected to have an effect on prices.
In terms of inflation, when we last met I suggested that inflation was at a trough and was expected to increase gradually.
Recent outcomes have been consistent with this.
Both headline and underlying inflation have risen and are currently running a little under 2 per cent.
Inflation is likely to continue to move higher gradually, with the headline measure boosted by higher prices for tobacco, electricity and gas.
A consideration working in the other direction is increased competition in the retail sector, particularly from new entrants.
This is likely to continue for a while yet.
The low wage increases are also contributing to the subdued inflation outcomes.
One factor that is influencing the outlook for both economic growth and inflation is the exchange rate.
The recent appreciation means lower prices for imported goods and it is weighing on the outlook for domestic output and employment.
Further appreciation, all else constant, would cause a slower pick-up in inflation and slower progress in reducing unemployment.
Since August last year, the Reserve Bank Board has held the cash rate steady at 1.5 per cent.
This setting of monetary policy is supporting employment growth and a return of inflation to around its average rate of the past couple of decades.
The Board is seeking to do this in a way that does not add to the medium-term balance-sheet risks facing the economy.
It has been conscious that a balance needs to be struck between the benefits of monetary stimulus and the medium-term risks associated with rising levels of debt relative to our incomes.
As a result, the Board has been prepared to be patient.
The fact that the unemployment rate has been broadly steady has allowed us this patience.
We have preferred a prudent approach, which is most likely to promote both macroeconomic and financial stability consistent with the medium-term inflation target.
The Reserve Bank has continued to work closely with APRA through the Council of Financial Regulators to address financial risks.
Our assessment is that the various supervisory measures – including a focus on lending standards and placing limits on investor and interest-only lending – will work to strengthen household balance sheets over time.
Financial institutions have adjusted to the new requirements and these requirements are contributing to the resilience of the system as a whole.
I would now like to briefly mention three matters related to the Bank's other functions that may be of interest to the Committee.
The first is that the banking industry is in the final stretch of developing the New Payments Platform (NPP).
As we have spoken about previously, this new payments infrastructure will provide Australians with the ability to make real-time, information-rich payments on a 24/7 basis.
It will also make addressing of payments much simpler, using email addresses and mobile phone numbers, rather than BSB and account numbers.
It has been a complex project and the Reserve Bank has played an important role, both in policy terms and as a provider of a key part of the infrastructure.
As the government's bank, the Reserve Bank will also make the new payment capabilities available to its government banking customers.
The new system is expected to commence processing payments later this year.
It is likely to start off small and gradually ramp up next year as financial institutions gain experience with a new way of operating 24/7.
The second matter is that when we met in February, I said that I had commissioned an external review of the efficiency of the Bank's operations.
That review has now been completed. It concluded that our support areas were functioning well and assisted the achievement of the Bank's important public policy objectives.
At the same time, it suggested some areas for us to focus on.
One was the development of a shared internal services centre to drive continuous improvement.
Another was further evolution in our approach to IT as some of our major IT-related projects come to an end.
These projects are in the banking and payments areas and have been undertaken in the national interest.
As these projects wind down we are looking to make sure that the size and structure of our IT function remains appropriate.
More broadly, as some of these projects finish this year, the Bank's overall staff numbers will decline.
Finally, I would like to take this opportunity to announce that we will be releasing the new $10 banknote next month, on 20 September.
Printing of the new notes has been completed at our printing works in outer Melbourne.
The new notes contain the same world-leading security features as the new $5 note that we issued last September, including the clear top-to-bottom window, and the tactile feature so that it can be recognised by vision-impaired members of the community.
Construction has also recently been completed on our new banknote storage and processing facility at Craigieburn, which will soon commence operations.
Thank you. My colleagues and I are here to answer your questions.
The speech was delivered to the House of Representatives Standing Committee on Economics.
For more information click <a href="https://www.rba.gov.au" target="_blank">here</a>.
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j.ballantyne1990-6AQqhLzZaK

RBA on electricity and property price watch: RBA Governor Philip Lowe

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Finder.com.au’s RBA cash rate survey shows all 34 experts and economists (100%) are expecting the central bank to leave the cash rate at 1.5% for July 2017.
The vast majority of <a href="https://www.finder.com.au/rba-cash-rate" target="_blank">experts and economists surveyed</a> (88%, 28) believe the next cash rate move will be in a positive direction.
Only four experts (13%) are expecting a rate cut. Predictions for when a rise may occur, however, are spread across the board.
Interestingly, eight rate hikes over two years, as recently predicted by ex-RBA board member John Edwards, looks unlikely according to the panellists. Only three respondents (Nicholas Gruen of Lateral Economics, Saul Eslake and Steven Milch of Suncorp Group) are predicting two or more rate rises in 2018.
Graham Cooke, Insights Manager at finder.com.au, says mortgage holders should brace for rate increases.
“It’s no secret that rates will start rising soon, it’s just a matter of when.
“To minimise rate shock, think about fixing a portion of your interest rate or even switching to a provider that offers more competitive interest,” he says.
With falling clearance rates in Sydney, panellists were asked if this was a sign that property prices may fall. In response, a third of respondents said prices will fall by 5% by the end of the year, a third said prices will not fall, and a further third said there may be some cooling, but no major changes.
“Low auction clearance rates may signal less demand which could see house prices dip, so we may see a cooling period in some capital city markets, but it won’t be dramatic,” he says.   According to Census data released this week, 22% of Sydney households are spending more than a third of their monthly income on rent. When asked if rent and mortgage stress were increasing in Australia’s capital cities, 58% of respondents agreed with this statement, saying those in Sydney and Melbourne most likely to bear the brunt. Meanwhile, 42% disagreed with this view.    When asked about the NSW Government’s plan to remove stamp duty for first time buyers on homes valued under $650,000 (with discounts for homes up to $800,000), a slight majority (53%, 9) thought this was a good policy, while the remaining 47% (8) did not.   While there’s been criticism of the $650,000 limit being too low, most of the panellists (9, 53%) believe it shouldn’t be any higher. Interestingly, two economists, (Savanth Sebastian of CommSec, and Nicholas Gruen of Lateral Economics) think the limit should be lifted to $1,000,000.   “The initiative to remove the duty concession for some purchases will give first homebuyers a reprieve, but with house prices in some capital cities nearing $1 million, the $650,000 cap may not be generous enough,” he says.   “Removing stamp duty for some purchases will remove a barrier of entry for first home buyers which could stimulate demand and push up property prices,” Mr Cooke says.   Here’s what our experts had to say:   Jordan Eliseo, ABC Bullion (Hold): "The RBA will have been fairly encouraged by the recent run of economic data, which will (temporarily in my view) give them confidence that they have the appropriate cash rate in place for now."   Tim Nelson, AGL Energy (Hold): "No material change in conditions from previous month. Prudential regulation is doing the 'heavy lifting' in relation to residential property market pricing. "   Shane Oliver, AMP Capital (Hold): "While downside risks to the growth and inflation outlook have increased, the RBA remains upbeat that growth will pick up particularly after recent solid jobs data. It probably also remains wary as to whether the Sydney and Melbourne property markets have really started to cool or not."   Alison Booth, Australian National University (Hold): "Insufficient change to justify moving rates either up or down."   Darryl Gobbett, Baillieu Holst (Hold): "Future potential risks of increased household leverage from lower rates still out-way any expected benefits to growth of another cut."   Dr Kishti Sen, BIS Oxford Economics (Hold): "I don't think the interest rates will fall further because of: 1. The Reserve Bank is keen to limit the amplitude of the residential cycle amid concerns about household debt and financial stability risks. Hence, it would not want to reignite the housing boom. 2. A lower cash rate will reduce the dollar but it will have little effect on investment. Meanwhile, the Federal Reserve is on a tightening phase and rate rises in the United States will narrow the interest rate differential with Australia and put downward pressure on the A$. 3. The Reserve Bank is also concerned that the more they reduce rates now, the sooner they will have to raise interest rates. I therefore expect the cash rate to stay at 1.5% over calendar year 2017 and 2018."   Richard Robinson, BIS Oxford Economics (Hold): "Inflation is low, but the RBA doesn't want to cut rates as it fears pumping up the already overheated residential property sector"   Paul Dales, Capital Economics (Hold): "The RBA will almost certainly keep rates on hold at 1.50% at this meeting. And while the recent improvement in the labour market has quashed talk of further rate cuts, weak underlying inflation will prevent the RBA from hiking rates until 2019. "   Michael Blythe, CBA (Hold): "Economy is not in need of any extra interest rate assistance" Savanth Sebastian, CommSec (Hold): "Reserve Bank looks comfortable on the interest rate sidelines. Policymakers will keep a close eye on the property market."   Dr Andrew Wilson, Domain Group (Hold): "Better recent economic news supports clear recent steady bias by the Bank"   Saul Eslake, Economist (Hold): "Data releases and other evidence since the last meeting will not have prompted any material change in the RBA's assessment of the economic outlook or the appropriate stance for monetary policy"   Mark Brimble, Griffith University  (Hold): " Bias remains to the downside with the economy struggling to generate momentum.  With banks (and apra) tightening credit the markets and sentiment are softening. Further support is required, but the rba is likely to not be willing to provide this as this stage"   Paul Bloxham, HSBC (Hold): "Underlying inflation is still below its 2-3% target."   Michael Witts, ING Bank (Hold): "The slowdown in the housing  market is occurring via the adjustment to rates for investors and interest only loans. This enables the RBA to maintain the cash rate at 1.5% for the benefit of the broader economy."   Glen Hawke, Karis Communications (Hold): "The current economic data is inconclusive of a need for a shift."   Brendan Rynne, KPMG Economics (Hold): "Continuation of excess capacity in the labour market, and the maintenance of inflation below RBA target band."   Leanne Pilkington, Laing+Simmons (Hold): "There appears to be a growing consensus among economists that the next rate move will be up, especially if some of the RBA’s forecasts around economic growth come to fruition. However, we believe that current economic, employment, political and household debt scenarios support a status quo in fiscal policy in the near term."   Nicholas Gruen, Lateral Economics (Hold): "Because they've not signalled anything else and I think they won't have the confidence to raise the rate, even if they'd like to."   Matthew Tiller, LJ Hooker (Hold): "Little discernible change in the domestic economic environment over the past month."   John Caelli, ME (Hold): "The RBA won’t cut rates because it remains concerned about fuelling further increases in house prices and household debt."   Michael Yardney, Metropole Property Strategists (Hold): "Our property markets have slowed down over the last few months taking pressure of the RBA to raise interest rates. On the other hand the RBA can't afford to drop rates to bolster our bumbling economy and further fuel our property markets. So rates will remain on hold."   Mark Crosby, Monash University (Hold): "While globally rate movements are beginning the long path back to normalisation in some key economies, the strong exchange rate and economic fragility locally point to holding rather than raising rates at this meeting."   Jessica Darnbrough, Mortgage Choice (Hold): "There is no urgent reason for the Reserve Bank of Australia to adjust the current cash rate setting. All of the latest economic data is looking fairly positive at the moment, providing the RBA with no incentive to adjust their long-standing plan of attack."   Alan Oster, NAB (Hold): "Too early to see what is happening re the labour market v house prices."   Jonathan Chancellor, Property Observer (Hold): "There is no risk in holding this July."   Matthew Peter, QIC (Hold): "The holding pattern will continue, despite a weak growth and inflation outlook, until the housing market is clearly in retreat. "   Noel Whittaker, QUT (Hold): "There is no reason to lower – and no reason to raise."   Janu Chan, St.George Banking Group (Hold): "The RBA will be encouraged by the improvement in the labour market, but will still be of the view that there remains spare capacity in the economy. That would prevent any thought of raising rates. However, ongoing concerns regarding risks from the housing market and high household debt is preventing any cuts to rates. "   Steven Milch, Suncorp Group (Hold): "Labour market strengthening balances against sub target inflation.  Little case to ease yet too early to tighten."   Brian Parker, Sunsuper (Hold): "RBA has made it pretty clear that they'd be very reluctant to cut rates again, and their view probably hasn't changed over the month."
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Experts tip July RBA rates to hold

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RBA Governor Philip Lowe says inflation will only rise slowly but the combination of record high household debt to income when wages were growing slowly was a “sobering combination”.
Speaking at the Australia-Canada Leadership forum, Lowe said “households are carrying more debt than they have before and, at the same time, they are experiencing slower growth in their nominal incomes than they have for some decades. For many, this is a sobering combination”.
He said “wage growth has been subdued given the ongoing slack in the labour market” and there was “downward pressure on retail prices from intensified competition”.
Although, low level of interest rates means that the debt-servicing burdens are not that high at the moment.
He said with given that outlook, underlying inflation would only increase gradually.
“Our central forecast is for headline inflation to increase to above 2 per cent later this year, boosted by increases in oil and tobacco prices. The increase in underlying inflation is expected to be a bit more gradual.”
The RBA has stuck to its forecast of 3 percent economic growth over the next couple of years. 
“If inflation is low for a long period of time, it is certainly possible that inflation expectations adjust, making it harder to achieve the objective. At the moment though, I don't see a particularly high risk of this in Australia. The recent lift in headline inflation is helpful here and most measures of inflation expectations are within the range seen over recent decades,” he said.
In relation to the risks from additional borrowing, he said it was possible that continuing rises in indebtedness, partly as a result of low interest rates, increase the fragility of household balance sheets and hurt the overall economy.  
In summary, Lowe said “flexible inflation targeting with a medium-term focus remains the right monetary policy framework for Australia”. 
 
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High debt, weak wages a 'sobering combination', warns RBA’s Lowe

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RBA Governor Philip Lowe has given a clear message that interest rates have bottomed, implying the central bank won’t be cutting the overnight cash rate anytime soon, according to CBA chief economist Craig James.
At his first speech of the year during the A50 Australian Economic Forum, Governor Lowe said the “bank's central scenario is for some pick-up in economic growth and for inflation to move gradually higher”.  
The RBA is tipping economic growth of 3 per cent over 2017 and 2018. 
On inflation, he said that while it remains low, running at around 11⁄2 per cent in both headline and underlying terms, inflation is not expected to fall further. 
“Instead, our central forecast is for underlying inflation to gradually rise over the next couple of years,” he said. 
Clearly, that signals the bank is not in a hurry to cut rates, says James.
The Governor was also asked about the Aussie dollar, and based on the answer reported by the <a href="https://www.afr.com/news/economy/monetary-policy/donald-trump-might-even-be-good-news-says-rbas-philip-lowe-20170209-gu9iw6" target="_blank">Financial Review</a>, he also seems happy with current levels. 
"At the moment we think it'll deliver (economic growth of) 3 per cent, which is pretty good. While ever that's the case it's hard to say the exchange rate is fundamentally too high. At the moment I struggle to say the configuration that we have is leading to growth outcomes that are unsatisfactory." 
He also spoke of mixed conditions in the housing and job markets and the challenge in keeping high household debt under control. The Governor also said the RBA was closely monitoring the housing market and household balance sheets. 
He said, “the picture varies widely across the country. Prices for houses in Sydney and Melbourne are rising strongly, but apartment prices in some cities, including Perth and Brisbane have fallen. The population is growing strongly, but there is a large number of additional dwellings to come onto the overall market this year”. 
“Growth in rents is weak, but vacancy rates in most markets are not unusually high. And investor demand looks to have strengthened in the closing months of 2016. So it is a complex picture.”
While saying that high household debts are a risk, he was positive about the tightening of lending standards by banks over the past couple of years.
While upbeat on Australia and Australia’s prospects, the RBA Governor highlighted challenges including lifting productivity growth, greater engagement with Asia, lifting spending on infrastructure and keeping public finances in good shape.
On the unwinding of the mining boom, encouragingly the Governor said “we are already around 90 per cent of the way through the fall from the peak to expected trough in mining investment”. 
His near-term outlook was positive, according to James, though he did say the GDP fall in the September quarter was a surprise, but the economy was expected to have returned to growth in the December quarter.
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CBA economist Craig James says RBA has given clear message rates have bottomed

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<div class="rss-mr-content">
At its meeting today, the Board decided to leave the cash rate unchanged at 1.50 per cent.
Conditions in the global economy have improved over recent months.
Business and consumer confidence have both picked up.
Above-trend growth is expected in a number of advanced economies, although uncertainties remain.
In China, growth was stronger over the second half of 2016, supported by higher spending on infrastructure and property construction.
This composition of growth and the rapid increase in borrowing mean that the medium-term risks to Chinese growth remain.
The improvement in the global economy has contributed to higher commodity prices, which are providing a boost to Australia's national income.
Headline inflation rates have moved higher in most countries, partly reflecting the higher commodity prices.
Long-term bond yields have also moved higher, although in a historical context they remain low.
Interest rates have increased in the United States and there is no longer an expectation of further monetary easing in other major economies.
Financial markets have been functioning effectively and stock markets have mostly risen.
In Australia, the economy is continuing its transition following the end of the mining investment boom.
GDP was weaker than expected in the September quarter, largely reflecting temporary factors.
A return to reasonable growth is expected in the December quarter.
The Bank's central scenario remains for economic growth to be around 3 per cent over the next couple of years.
Growth will be boosted by further increases in resource exports and by the period of declining mining investment coming to an end.
Consumption growth is expected to pick up from recent outcomes, but to remain moderate.
Some further pick-up in non-mining business investment is also expected.
The outlook continues to be supported by the low level of interest rates.
Financial institutions remain in a position to lend.
The depreciation of the exchange rate since 2013 has also assisted the economy in its transition following the mining investment boom.
An appreciating exchange rate would complicate this adjustment.
Labour market indicators continue to be mixed and there is considerable variation in employment outcomes across the country.
The unemployment rate has moved a little higher recently, but growth in full-time employment turned positive late in 2016.
The forward-looking indicators point to continued expansion in employment over the period ahead.
Inflation remains quite low. The December quarter outcome was as expected, with both headline and underlying inflation of around 1½ per cent.
The Bank's inflation forecasts are largely unchanged.
The continuing subdued growth in labour costs means that inflation is expected to remain low for some time.
Headline inflation is expected to pick up over the course of 2017 to be above 2 per cent, with the rise in underlying inflation expected to be a bit more gradual.
Conditions in the housing market vary considerably around the country.
In some markets, conditions have strengthened further and prices are rising briskly.
In other markets, prices are declining.
In the eastern capital cities, a considerable additional supply of apartments is scheduled to come on stream over the next couple of years.
Growth in rents is the slowest for a couple of decades.
Borrowing for housing has picked up a little, with stronger demand by investors.
With leverage increasing, supervisory measures have strengthened lending standards and some lenders are taking a more cautious attitude to lending in certain segments.
Taking account of the available information, and having eased monetary policy in 2016, the Board judged that holding the stance of policy unchanged at this meeting would be consistent with sustainable growth in the economy and achieving the inflation target over time.
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House prices varying between decline and rising briskly: RBA February 2017 Governor Philip Lowe statement

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In his first speech as Reserve Bank of Australia governor, Philip Lowe left the door open to further official rate cuts so long as inflation remains low.
He also suggested there could be a fresh surge in Sydney house prices.
He said that inflation is likely to remain low and that the economy is still some way from generating enough jobs to reignite strong wages growth.
"We too have now joined the club of countries with headline inflation noticeably below the medium-term average, although we are a more recent member than many others," he said.
"Headline inflation here is 1 per cent and measures of underlying inflation are running at around 1.5 per cent.
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<div><img src="https://ci6.googleusercontent.com/proxy/APq8nbMYSluOKgE4Cy8-wBMf3ZAnBKPD2VfcjLlQD6XOxylEsNMf7FBzSE2lfkqu8EYymJkIDu9o2JcX46tpz38jisjV4NzVu-fAI78j0V_TLVteSW8Ppd3F975HHZpY6QzQsva4xNCc8VwCekf6VAi7Rkv1rypzQVU-4rFyV8j62Q=s0-d-e1-ft#https://www.afr.com/content/dam/images/g/s/4/j/8/z/image.imgtype.afrArticleInline.620x0.png/1476741841997.jpg" alt=" " width="345" height="343"></div>
<div>
<h2> </h2>
<div>Lowe revealed figures and research from the Australian Bureau of Statistics and bank officials which shows a big fall in the size and frequency of wage gains in recent years.</div>
<div> </div>
<div>Six years ago, almost 40 percent of the 18,000 individual job categories tracked by the ABS received a wage increase of between two and three percent.</div>
<div>
By contrast, less than 10 percent of jobs got this type of wage increase and almost half had a wage increase of between two and three percent.
</div>
<div>
"Looking to the future, we expect that the various factors holding inflation down will continue for a while yet," Lowe said.
"But this does not mean that we have drifted into a world of permanently lower inflation in Australia."
He said the economy should gradually strengthen as the negative drag caused by the end of the mining boom exhausts and the labour market tightens.
</div>
<div>The bank are determined to ensure inflation quickens, Lowe said. He highlighted they wanted to avoid the trap that countries like Japan have fallen into.</div>
Lowe described the housing picture as 'complex'. It's one of the sectors of the economy at greatest risk of a blow out if rates are cut too low. 
</div>
"Prices seem to be increasing quite briskly again in some areas, although are falling in others," he said.
"Growth in rents is very low and there is a big increase in housing supply still to come. 
<div>
"To add to the picture, credit growth is still exceeding income growth, although by a smaller margin than last year.
"It is also noteworthy that much of this credit is being used to finance new housing construction rather than consumption."
He suggested inflation should pick up over the next two years, however said it's still likely to be "closer to two percent than three percent."
</div>
<div>Lowe said that achieving the quickest return of inflation would be unlikely to be in the public interest.</div>
<div>
"Achieving the quickest return of inflation back to 2.5 per cent would be unlikely to be in the public interest if it came at the cost of a weakening of balance sheets and an unsustainable build-up of leverage in response to historically low interest rates," he said.
"Conversely, the case for moving more quickly would be strengthened in a world where the labour market was deteriorating and people were having increasing difficulty finding jobs."
</div>
<div>The new governor defended the Reserve Bank's ability to be flexible about maintaining its 2 to 3 percent inflation target.</div>
<div> </div>
<div>He suggested he doesn't believe in even more dramatic interest rate cuts. </div>
<div>
Lowe concluded by highlighting the GFC, admitting it has left "scars" by creating uncertainty and a lack of job security for companies and workers.
"This increased value put on job security has made many workers less inclined to push for large wage rises."
</div>
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