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

Joel Robinson

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

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

A collection of just 25 large-format apartments and penthouses overlooking Goodwin Park is entering the Coolangatta market, with <a href="https://www.apartments.com.au/new-apartments/marea-residences-coolangatta-27-27a-dixon-street-coolangatta-qld-4225">Maréa Residences</a> combining a low-density, residential-only approach with uninterrupted park and Pacific Ocean outlooks.

Located at 27 Dixon Street, Maréa comprises three and four-bedroom residences alongside a limited number of dual-level penthouses, with the project positioned between Goodwin Park and <a href="https://www.apartments.com.au/developments/coolangatta-qld-4225">Coolangatta</a>’s coastal precinct.

Construction has commenced, with completion currently estimated for late 2027. Three-bedroom residences are priced from $1.8 million.

[smartcode_project:default project_id=150999 project_image_fid=374005]

The project has been designed around its northern outlook across the park, with the building’s architecture, landscaping and material palette intended to establish a connection with the neighbouring green space. The residences have been configured to maximise natural light and views across Goodwin Park towards the ocean.

Inside, the material palette incorporates timber, stone and brushed brass, complemented by curved detailing and ambient lighting. Kitchens and bathrooms carry the same natural material approach, while residences also include basement parking, storage and lift access.

Maréa’s penthouses are arranged over two levels and include private pools, adding another layer to the project’s focus on larger-format apartment living. Across the development, residences are configured with three or four bedrooms rather than the broader mix of smaller apartment types commonly found in larger projects.

[smartcode_project:default project_id=150999 project_image_fid=374010]

Resident amenity is concentrated at rooftop level, where landscaped entertaining terraces and pools take advantage of elevated views across Coolangatta and the Pacific Ocean.

The project has so far been particularly well received by local owner-occupiers and downsizers, according to Urban Activation Property Sales and Marketing Director Matt George, with the residential-only format, construction quality and northern park outlook among the features resonating with purchasers.

“The uninterrupted northern aspect overlooking Goodwin Park has been a key point of difference, with buyers attracted to the sense of serenity and open space the park provides, while still enjoying easy access to the ocean and being within walking distance of the lifestyle and amenities Coolangatta has to offer,” George said.

[smartcode_project:default project_id=150999 project_image_fid=374002]

“The combination of high-quality construction, a residential-only building, park outlook and proximity to the beach has resonated strongly with the local downsizer market.”

The Dixon Street address is within walking distance of Coolangatta Beach and the broader southern Gold Coast coastline, including the surf breaks at Snapper Rocks and Kirra. Coolangatta’s cafés, restaurants and retail are nearby, while Gold Coast Airport is also within close proximity.

[smartcode_project_cta:default project_id=150999]

Maréa Residences brings parkside apartments to Coolangatta

Melbourne developer PDG has secured Victorian Government approval for its $1.5 billion Southbank development <a href="https://www.apartments.com.au/new-apartments/the-one-1-queens-bridge-street-southbank-vic-3006">The One</a>, clearing the way for the long-dormant riverfront site opposite Crown to finally be developed.

The Minister for Planning has approved the project at 1-29 Queens Bridge Street, with the Department of Transport and Planning issuing the planning permit following its assessment.

The approval will allow PDG to develop the prominent 5,059 sqm site with a major mixed-use tower comprising premium apartments, including branded residences, a luxury hotel and boutique office space.

PDG acquired the site in late 2024, with its position directly opposite Crown's main entrance and near Melbourne's Arts Precinct making it one of Southbank's most significant remaining development opportunities.

<img alt="PDG" data-entity-type="file" data-entity-uuid="3933013e-6332-4386-b9be-089df05caf17" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-27%20at%209.29.22%E2%80%AFAM.png?VersionId=sITIgBqDL0N3VNSMwWEmF5UA.uvcsRyu" />

Designed by COX in collaboration with ODO and PDG, the tower's architecture draws on the movement of the Yarra River, with six vertical pleats running the height of the sculpted facade.

The project will also see the heritage-listed Queens Bridge Hotel restored and incorporated into the development&nbsp;with new hospitality and public uses, including a rooftop venue.

A significant component of The One will be its residential amenity.

More than 5,000 sqm of resident facilities will be delivered across a single level, making it one of the largest consolidated residential amenity offerings proposed in an Australian apartment development.

The planning approval also incorporates a major upgrade of Queensbridge Square, which PDG will deliver in partnership with the City of Melbourne.

<img alt="PDG" data-entity-type="file" data-entity-uuid="73167fcd-1031-4b6f-a408-a064cfe45ed1" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-27%20at%209.29.17%E2%80%AFAM.png?VersionId=Pf1AEWxw6SNmBqR0zQW5lyEze.MtxgFp" />

The existing square will be revitalised as a new civic and pedestrian space along the Yarra River, strengthening the connection between the project, Southbank and the riverfront.

PDG Founder and Managing Director Vince Giuliano said the approval represented a major milestone for a site which has remained largely underutilised for more than 15 years.

“This is the most significant Planning Permit approval Melbourne has seen in recent years,” Giuliano said.

“For more than 15 years, this site has remained underutilised. This approval enables us to deliver a project that will contribute meaningfully to the revitalisation of Southbank, restore and reactivate an important heritage building, and create a new civic and hospitality destination for Melbourne.”

The latest approval follows an earlier planning permit issued by the City of Melbourne covering demolition works across part of the site at 9-29 Queens Bridge Street. Those demolition and early works are already underway.

PDG has also started generating early interest in the residential component from owner-occupiers ahead of a planned public launch in early 2027.

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

Local developer Harridan is seeking to turn its Woolloongabba apartment project into the first stage of a broader transformation of Burke Street, using a new 16-storey mixed-use building to establish a greener pedestrian connection toward the rapidly evolving Boggo Road transport and knowledge precinct.

The South East Queensland developer has filed plans for 154 apartments on the <a href="https://www.apartments.com.au/new-apartments/4-burke-street-woolloongabba-qld-4102">southern side of Burke Street</a>, where its proposal has been designed alongside a wider vision by LatStudios for the street.

That vision positions the southern side of Burke Street for buildings of 15 storeys and above, while envisaging lower-rise development of up to five storeys on the northern side to transition into Woolloongabba's existing character housing. It also proposes wider pedestrian verges, deep planting, new street trees and upgrades to the pedestrian approach to Boggo Road Station.

The Harridan development itself has been designed by Brisbane-based Arqus Design and will comprise 154 apartments across 16 storeys. The mix is weighted heavily toward two-bedroom apartments, with 121 proposed alongside 10 one-bedroom and 23 three-bedroom residences. There will typically be around 14 units per floor.

A lower-ground car park and three podium levels will accommodate 156 resident parking spaces, along with visitor and commercial parking. There will also be 154 resident bicycle spaces and 40 visitor bicycle parks.

&nbsp;

Harridan is a family-owned developer and part of the Holmwood Highgate Group, with more than three decades of development activity across South East Queensland. Its portfolio spans residential, commercial and industrial property, with current residential projects including Riverbank on Byron in Bulimba, Esperance Residences in Carina and The Precinct at Kinross Road in Thornlands.

Wooloongabba has been popular for apartment developers, particularly since the announcement of the 2032 Summer Olympics games in Brisbane.

While there have been a lot of development applications, it has failed to materialize into real supply.&nbsp;

Sarazin has been the major player in the area. They are under construction at Murcia Residences, on the fringe of East Brisbane and Woolloongabba. They have just launched <a href="https://www.apartments.com.au/new-apartments/the-stanley-residences-woolloongabba-8-trafalgar-street-woolloongabba-qld-4102">The Stanley Residences</a>, in Woolloongabba on Trafalagar Street. They also have Nuage coming soon on the nearby <a href="https://www.apartments.com.au/new-apartments/nuage-woolloongabba-14-wellington-road-woolloongabba-qld-4102">Wellington Road</a>.

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

Rba Rate Decision

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The Reserve Bank Board meets next week on October 4. There is little prospect of the Board deciding to move rates. 
Since rates fell to 3% in December 2012 all six subsequent cuts have been in the February/May/August months. 
Those months, along with November, allow the RBA to respond to fresh information on inflation – printing quarterly usually around one week before the Board meeting. 
Those months also coincide with the quarterly Statement on Monetary Policy where the Bank releases revised forecasts for growth and inflation. 
Forecast changes at that time are usually used to justify the decisions either revealing significant revisions to growth or inflation forecasts. Based on this recent practice it would be extraordinary to see a policy change in October. 
This meeting also marks the first time in the Chair for Governor Lowe. 
I have written extensively about the need for the new Governor of the Reserve Bank to adjust the inflation target from 2-3% to 1-3% to reflect the reality of lower global inflation relative to the mid-1990’s when the target was originally successfully adopted. 
However, as noted at the time, I held out little hope that the new Governor would take my advice. Accordingly I was not surprised to see last week’s announcement that the target had been “confirmed” as 2-3%.
However there has been a significant change from “on average over the cycle” to “over time”. The Governor also emphasised in his Statement to the House of Representatives last Thursday that “the main drafting change is to make the link between monetary policy and financial stability a little more direct”.
If we weigh those two changes together they go some way to achieving the objective that I was most concerned about. 
My concern was that the new Governor might, when confronted with an impossible task of lifting inflation to above 2.5% in order to “average” 2.5% over the cycle might unnecessarily impact asset markets. By using the vague term “over time” and linking policy directly to financial stability (read asset markets) he has allayed much of my concern on that issue. 
Markets are likely to eventually scale back prospects for further rate cuts given these developments. 
We should not be surprised that this new Governor has chosen that approach. And we should certainly not dismiss this change in approach as “window dressing”. 
Every great professional has a seminal piece of work that they can refer to as a “defining moment”. 
I would argue that such a time came for a young economist, Philip Lowe, who had been seconded from the RBA to the Bank of International Settlements in Basel in the early 2000’s. 
In July 2002 he published a paper in the BIS Working Papers series. 
He argued in his paper, that “financial imbalances can build up in a low inflation environment and that in some circumstances it is appropriate for policy to respond to contain imbalances.....while low and stable inflation promotes financial stability, it also increases the likelihood that excess demand pressures show up first in credit aggregates and asset prices, rather than in goods and services prices.
 Accordingly, in some situations, a monetary response to credit and asset markets may be appropriate to preserve both financial and monetary stability.” He further concluded that “greater co-operation between monetary and prudential authorities is important, not just in management of crises but also in preventing their emergence.” (Philip Lowe and Claudio Borio, BIS Working Papers, no. 114, July 2002).
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Around that time the US housing market was beginning to “stir”. Chairman Greenspan had been cutting the Federal Funds Rate in the face of weak inflation. 
The Federal Funds Rate eventually bottomed out at 1% by June 2003 (a year after Lowe’s paper was published). When Greenspan eventually got around to lifting the Federal Funds Rate in June 2004 he moved at a leisurely and predictable 0.25% per meeting until June 2006 when the Federal Funds rate peaked at 5.25%. 
In Greenspan’s defence it has been argued that lifting the Federal Funds Rate from 1% to 5.25% over 2 years should have had more traction with the bond market – the US 10 year rate only increased from 4.6% to 5.2% over the period. This muted response has generally been attributed to Chinese purchases of US Treasuries over that period as China’s foreign reserves boomed. 
Mortgage rates in the US are priced off long bond rates rather than the Federal funds rate so the response in the mortgage market to Greenspan’s policy was muted. However, if policy had been more pre- emptive, less orderly and predictable the traction with the bond market may have been much more effective. 
Greenspan had clearly ignored the signals which had been emphasised in Lowe’s work – over the 4 years from end 2000 to end 2004 US house prices (Case Schiller Index) had lifted by 46%! 
Greenspan’s response to critics who noted the build-up in pressures particularly in the US housing market was that his objective was to maintain low inflation and if there were any associated imbalances in other markets he could “clean up” in the aftermath of any asset market disturbance. Young Lowe clearly disagreed. 
That paper, all those years ago, gives us a clear insight into the values of the new Governor. Arguably, if his warnings had been heeded by Chairman Greenspan back in 2002 (note that he only started rising rates in June 2004) the world may have avoided the Global Financial Crisis. 
We expect that these values will be an important driver of future policy. Lowe’s adjustment to the agreement with the Government to include financial stability has its origins in that paper all those years ago. 
The balance between driving towards a higher inflation target and over stimulating asset markets (including housing) will take on a sharper edge than we have seen in the past. He is also likely to be open to the use of further macro prudential tools (as highlighted in that paper) should that be seen to be necessary. 
Bill Evans, Chief Economist at Westpac
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Insights into the new RBA governor: Westpac's Bill Evans

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As expected the Board of the Reserve Bank decided to lower the cash rate by 25bps to 1.5% at its August Board meeting.
The key final paragraph which indicated the Board had no bias: “Taking all these considerations into account, the Board judged that prospects for sustainable growth in the economy, with inflation returning to target over time, would be improved by easing monetary policy at this meeting.”.
This is not surprising since the same policy approach was taken following the May meeting when the Board also cut by 25bps.
It is worth recalling that no bias was indicated at the following June meeting but was restored at the July meeting with a cut in August following.
Consequently, this decision to exclude a bias should not be seen as ruling out another move at the next ‘live’ meeting in November.
As we have been indicating to our customers the key factor behind the cut was low inflation.
In May, the Bank lowered its underlying inflation forecast for 2016 from 2.5% to 1.5% and lowered its forecast for 2017 from 2.5% to 2%.
These sharp changes, for an inflation targeting central bank, were extremely significant and certainly laid the foundation for today’s move.
Not surprisingly, therefore, the commentary around inflation remained downbeat with recent data confirming low inflation and the outlook being for low cost pressures remaining the case for some time.
The most fertile debate around prospects for this meeting centred on housing.
There was some private sector data that indicated that house prices had responded sharply to the May rate cut, potentially posing a risk to today’s decision.
The Governor’s statement has dedicated a particularly long paragraph to the housing market.
In July house prices were described as having “risen again in many parts of the country in recent months”.
However, in today’s statement, he is more downbeat, commenting that: “dwelling prices have been rising only moderately over the course of this year”.
He also notes that the pace of lending for housing has slowed this year. Finally he concludes that “the likelihood of lower interest rates exacerbating risks in the housing market has diminished”. We can conclude from this paragraph that the Bank sees limited risk from the rate cut to a resurgence in house prices.
Commentary on the exchange rate remains the same as last month with “an appreciating exchange rate could complicate this [rebalancing in the economy]”.  So there has been no attempt to talk down the currency with the power of lower rates doing the real job.
Confirmation that the recent slowdown in jobs growth has affected the Board’s thinking comes with the labour market indicators continuing to be described as “mixed … but consistent with a modest pace of expansion in employment”.
There is no explicit clarification as to whether this modest pace will be sufficient to further bring down the unemployment rate. We will get a better indication of the Bank’s likely revised outlook for the unemployment rate in the Statement on Monetary Policy on Friday.
Internationally the focus continues on China with an additional comment that “the underlying pace of China’s growth appears to be moderating”.
The outlook
Since the RBA surprised us with the May rate cut we had expected a follow up move in August.
When we saw the dimension of its inflation forecast changes that follow up move became even more likely.
The only barrier to such a decision was going to be the June quarter inflation report which would provide evidence as to whether the Bank had over-reacted to the shock in the March quarter report. While the June quarter report indicated that inflation was not as weak as in March it still confirmed that most of the disinflationary pressures apparent in March had persisted.
Our current view is that a further cut in November is not likely. With interest rates very close to their effective floor we expect that the Bank will be very patient in gathering information around the likely growth and inflation outlook. From our perspective the near term prospects for the real economy appear to be encouraging with lead indicators for the labour market improving and the lift from housing construction and services exports being sustained.
For us the real issue will be the environment in 2017 when the housing cycle will be in reverse; jobs growth may have cooled; global growth, particularly in this region, will have slowed further; and Australia’s interest rates may still be attractive to international investors. It is likely that any change in our current forecast that rates have bottomed will have been motivated by clearer prospects of those developments.Wee expect that the RBA will be similarly cautious with their assessment.
It is a little early to draw those conclusions given the unusually high degree of uncertainty, particularly around the global environment, but suffice to say that the risks to the rate outlook, particularly in 2017, are firmly to the downside. 
 
BILL EVANS is chief economist of <a href="https://www.westpac.com.au/" target="_blank">Westpac</a>. Justin Smirk is ‎senior economist, Westpac Group and can be contacted <a href="https://www.westpac.com.au/about-westpac/westpac-group/" target="_blank">here</a>.
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No surprise the RBA cut: Westpac economist Bill Evans

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STATEMENT BY GLENN STEVENS, GOVERNOR: MONETARY POLICY DECISION
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At its meeting today, the Board decided to lower the cash rate by 25 basis points to 1.50 per cent, effective 3 August 2016.
The global economy is continuing to grow, at a lower than average pace. Several advanced economies have recorded improved conditions over the past year, but conditions have become more difficult for a number of emerging market economies. Actions by Chinese policymakers are supporting the near-term growth outlook, but the underlying pace of China's growth appears to be moderating.
Commodity prices are above recent lows, but this follows very substantial declines over the past couple of years. Australia's terms of trade remain much lower than they had been in recent years.
Financial markets have continued to function effectively. Funding costs for high-quality borrowers remain low and, globally, monetary policy remains remarkably accommodative.
In Australia, recent data suggest that overall growth is continuing at a moderate pace, despite a very large decline in business investment. Other areas of domestic demand, as well as exports, have been expanding at a pace at or above trend. Labour market indicators continue to be somewhat mixed, but are consistent with a modest pace of expansion in employment in the near term. 
Recent data confirm that inflation remains quite low. Given very subdued growth in labour costs and very low cost pressures elsewhere in the world, this is expected to remain the case for some time.
Low interest rates have been supporting domestic demand and the lower exchange rate since 2013 is helping the traded sector. Financial institutions are in a position to lend for worthwhile purposes. These factors are all assisting the economy to make the necessary economic adjustments, though an appreciating exchange rate could complicate this.
Supervisory measures have strengthened lending standards in the housing market. Separately, a number of lenders are also taking a more cautious attitude to lending in certain segments. The most recent information suggests that dwelling prices have been rising only moderately over the course of this year, with considerable supply of apartments scheduled to come on stream over the next couple of years, particularly in the eastern capital cities. Growth in lending for housing purposes has slowed a little this year. All this suggests that the likelihood of lower interest rates exacerbating risks in the housing market has diminished. 
Taking all these considerations into account, the Board judged that prospects for sustainable growth in the economy, with inflation returning to target over time, would be improved by easing monetary policy at this meeting.
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Diminished low rate risks of housing boom: RBA Governor Glenn Stevens' August 2016 meeting statement

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Confidence means a lot to real estate markets. And it’s been a long time since Australian real estate has had such a concerted shot in the arm as on Tuesday this week.
Against the predictions of virtually every economist in the land, proving yet again how little they understand, the RBA dropped its official interest rate to depths not seen before. Most of the major lenders have dropped their mortgage rates accordingly.
The same economists who incorrectly predicted the RBA board’s decision will also tell you that record low interest rates equals a property boom. Goodness knows where that comes from – certainly not from any historical precedent and certainly not from the experience of recent years where only Sydney has had a market worthy of being described as a boom (no, not even Melbourne’s performance warrants the boom tag).
I note that RBA Governor Glenn Stevens doesn’t see the rate cut reigniting boom scenarios. "In reaching today's decision, the board took careful note of developments in the housing market, where indications are that the effects of supervisory measures are strengthening lending standards and that price pressures have tended to abate," he said in a statement. "At present, the potential risks of lower interest rates in this area are less than they were a year ago."
So I don’t expect the rate cut, replicated by three of the four major banks, to generate anything dramatic in the market. But it will generally help the psyche of property consumers. And the next affordability index will likely show a further improvement.
On the same day, Federal Treasurer Scott Morrison delivered his first Budget, which reiterated strongly that negative gearing won't change, nor will investors be slugged more on capital gains tax.
“We will not remove or limit negative gearing,” Morrison said in his Budget speech. “Those earning less than $80,000 make up two-thirds of those who use negative gearing. They are teachers, nurses, police officers, office workers and tradesmen. We do not consider that taxing them more on their investments is a plan for jobs and growth.”
Amen to that. The tragic thing about those who justify their anti-gearing stance on the grounds that it’s all about housing affordability is that scrapping negative gearing won’t make housing cheaper. Even Bill Shorten says it won’t force down the value of homes, therefore affordability won’t improve. Shorten, like so many others, doesn’t understand the affordability issue and is targeting the wrong culprits.
Another event on Tuesday was publication of building approvals data which showed there’s still some life in building approvals, although the monthly bounce may be an aberration because the longer-term trend is down (from record high levels, it must be said).
This closely followed the release of price data for April, which shows that the home value index has risen in the past three months of the year in seven of the eight capital cities.
That includes a 3.9% rise in Sydney. That would tend to rubbish claims of a collapse in values and a bursting of the bubble. I say “tend” because this is one set of figures from one source and it’s not uncommon for another major source to publish figures that are largely contradictory.
Based on the CoreLogic numbers, however, Adelaide’s prices rose 4.5% in the past three months and Brisbane was up 2.8%. I’ve been predicting good growth in those two cities, but I’m not getting overly excited because of what I said in the previous paragraph.
But, according to these figures, even Perth and Darwin showed glimmers of price growth in the latest quarter.
 
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j.ballantyne1990-6AQqhLzZaK

Going against economists show how little the RBA understands:Terry Ryder

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<div>Well, the Reserve Bank of Australia (RBA) went ahead and did it anyway, with no telegraphing needed!</div>
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<div>With global interest rates and inflation remaining stubbornly low, the Official Cash Rate was cut by 25 basis points at 2.30pm to its lowest level in history, on the back of much softer than expected inflation figures.</div>
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<div>The cash rate is now at a historic low of 1.75 percent. Obviously this is unbelievably happy news for homeowners who can probably barely believe the affordability dividend that has been slung their way since the financial crisis.</div>
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<div class="separator"><a href="/images/2016/05/03/A4.jpg" target="_blank">Click to enlarge</a></div>
<div class="separator"><img src="/images/2016/05/03/A4.jpg" alt=""></div>
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<div>
<div>This will pull forward demand for homebuyer loans, although restrictions on investor credit will mean that this interest rate cut may be somewhat less stimulatory than some of those delivered previously. </div>
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It will be interesting to see who passes on what from the three major lenders that haven't yet announced, but it wouldn't be a surprise to see some of the major banks holding back a few basis points of the 25bps cut. </div>
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<div>That said with the guillotine threat of a Royal Commission hovering above their respective heads, perhaps the majors will need to pass on a minimum 22bps...lol.</div>
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<div>Interestingly National Australia Bank (NAB) immediately announced that it would pass on the full 25 basis points to variable rate homeowners. </div>
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<div>It is interesting to remember that an interest rate cut is rarely a "lone wolf", and this potentially makes it much more likely that we'll see a "double tap" (i.e. interest rates only tend to be cut if significant action is deemed necessary).  Counting against this, however, the wording of the statement's final paragraph which noted that "at this meeting" growth prospects would be improved by monetary easing. Does this mean that no further cuts are expected? Perhaps so, though that's open to interpretation. The RBA's policy decision is <a href="https://www.rba.gov.au/media-releases/2016/mr-16-10" target="_blank">here</a>.</div>
<div> </div>
<div>
PETE WARGENT is the co-founder of <a href="https://allenwargent.com/" target="_blank" rel="nofollow">AllenWargent</a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank" rel="nofollow">blogger</a>. 
His latest book is <a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx" target="_blank" rel="nofollow">Four Green Houses and a Red Hotel</a>.
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pwargent-M4siyDbqQY

The long slow march to zero? Pete Wargent

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GUEST OBSERVER
The minutes of the March monetary policy meeting of the Board of the RBA provided no real surprises. When we assessed the Governor’s statement following the March meeting we pointed out that the key sentence “Members noted that continued low inflation would provide scope to ease monetary policy further, should that be appropriate to lend support to demand” had been changed from the February statement to include the word “would” instead of “may”. We interpreted that as a clear strengthening of the easing bias.
That decision may have been prompted by a concern that the December quarter GDP report that was set to be released the following day was going to show a significant slowdown in growth. As it turned out the report showed growth in 2015 to be 3%, comfortably above trend growth of 2.75%. In the minutes it is noted that it was reported to the Board that based on data available “growth appeared to have been slightly below average in the December quarter and over 2015 as a whole”. Clearly this assessment proved to be more cautious than turned out to be the final result. It is reasonable to argue that knowledge of the stronger GDP may have allowed the Board to retain its earlier more modest easing bias.
Of course we were also interested in the assessment of the surprise rise in the unemployment rate from 5.8% to 6.0% in January. The minutes while recognising that development point out that “leading indicators of employment had increased further and were consistent with employment growth in the months ahead”.
The minutes also clarified the relevance of the Capex survey. While the particularly weak Capex survey pointed out further but not surprising large falls in mining investment the picture around non-mining investment from the survey seemed to be overly pessimistic. The minutes point out that roughly half of non-mining investment is not covered by the Capex survey and that it had on occasions proved to be unreliable. Further boosting the view around business is the observation that surveys continue to point to conditions and capacity utilisation remaining above average levels.
The minutes have qualified the assessment that low wage growth points to some spare capacity in the labour market. They speculate that weak wages growth may be due to increasing globalisation. 
There is a long discussion on China, particularly around longer run economic performance and risks to growth. The discussion covers potential financial problems in China but concludes that China’s low household debt and low level of foreign currency debt gave it much more protection from a crisis than in other emerging economies.
At the time of the last meeting the AUD was around USD0.715, little changed from the February meeting. With the currency subsequently rising to USD0.75 there may have been some temptation to use this document to signal any discomfort. This has not happened and the term “responded to the evolving economic outlook” has been maintained.
Conclusion
The minutes provide some insight into expectations around GDP; reaction to the surprise rise in the unemployment rate in January; and the weak Capex report. The ‘spin’ on all of these developments indicates a Bank that is comfortably on hold. However clearly considerable attention is being paid by the Bank to developments in China and sudden adverse developments in that region would undoubtedly prompt consideration for policy change.
We will have to await new communication from the Bank to assess its degree of unrest around the recent sharp jump in the AUD.
Westpac continues to expect that the Bank will remain on hold for the remainder of the course of 2016.
Bill Evans is chief economist of <a href="https://www.westpac.com.au/" target="_blank">Westpac</a>.
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No surprises in RBA minutes; positive spin on key data points to rates on hold: Westpac's Bill Evans

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Statement by Glenn Stevens, Governor: Monetary Policy Decision
<h3 id="mr-title">Statement by Glenn Stevens, Governor: Monetary Policy Decision</h3>
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<div class="rss-mr-content">
At its meeting today, the Board decided to leave the cash rate unchanged at 2 per cent.
Recent information suggests that the global economy is continuing to grow, though at a slightly lower pace than earlier expected. While several advanced economies have recorded improved growth over the past year, conditions have become more difficult for a number of emerging market economies. China's growth rate has continued to moderate.
Commodity prices have declined very substantially over the past couple of years. This partly reflects slower growth in demand but also, in some key instances, large increases in supply. The decline in Australia's terms of trade has continued.
Financial markets have once again exhibited heightened volatility over recent months, as participants grapple with uncertainty about the global economic outlook and policy settings among the major jurisdictions. Appetite for risk has diminished somewhat and funding conditions for emerging market sovereigns and lesser-rated corporates have tightened. But funding costs for high-quality borrowers remain very low and, globally, monetary policy remains remarkably accommodative.
In Australia, the available information suggests that the expansion in the non-mining parts of the economy strengthened during 2015 despite the contraction in spending in mining investment. This was reflected in improved labour market conditions. The pace of lending to businesses also picked up.
Inflation is quite low. With growth in labour costs continuing to be quite subdued as well, and inflation restrained elsewhere in the world, inflation is likely to remain low over the next year or two.
Given these conditions, it is appropriate for monetary policy to be accommodative. Low interest rates are supporting demand, while supervisory measures are working to emphasise prudent lending standards and so to contain risks in the housing market. Credit growth to households continues at a moderate pace, albeit with a changed composition between investors and owner-occupiers. The pace of growth in dwelling prices has moderated in Melbourne and Sydney and has remained mostly subdued in other cities. The exchange rate has been adjusting to the evolving economic outlook.
At today's meeting, the Board judged that there were reasonable prospects for continued growth in the economy, with inflation close to target. The Board therefore decided that the current setting of monetary policy remained appropriate.
Over the period ahead, new information should allow the Board to judge whether the improvement in labour market conditions is continuing and whether the recent financial turbulence portends weaker global and domestic demand. Continued low inflation would provide scope for easier policy, should that be appropriate to lend support to demand.
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<div class="box-enquiries"> </div>
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Changed composition between investors and owner occupiers: RBA Governor Glenn Stevens' March 2016 statement

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GUEST OBSERVER
The cash rate has been left at a record low of 2 percent for a 9th month (10 months of rates at 2 per cent).
The Reserve Bank Board noted that the "expansion in the non-mining parts of the economy strengthened during 2015.
What does it all mean? 
The Reserve Bank adopted a ‘conditional easing bias’ in November. That is, the Reserve Bank indicated at the time that scope existed for lower interest rates “should that be appropriate to lend support to demand.” The Reserve Bank Board didn’t feel the need to act on that bias in December, and nor did it decide to take action at the latest meeting.
And if anything, the Reserve Bank has watered down the ‘easing bias’. It may not have become more hawkish (removed the bias or moved in favour of higher rates) but it certainly hasn’t become more dovish as some commentators expected it would.
The Reserve Bank has clearly become more upbeat on the Australian economy, highlighting lower unemployment, stronger business lending, and above-average business conditions.
However, at the same time the RBA upgraded commentary on the Australian economy, it became a touch more downbeat on the global economy. Not markedly mind you, but clearly if rates were to be cut in Australia, it would be because the global economy had deteriorated: “Recent information suggests the global economy is continuing to grow, though at a slightly lower pace than earlier expected.”
Is the Reserve Bank worried about the recent lift in the Australian dollar? Not in the least. The commentary on the Aussie was brief: “The exchange rate has continued its adjustment to the evolving economic outlook.”
On the housing market, RBA noted: “The pace of growth in dwelling prices has moderated in Melbourne and Sydney over recent months and has remained mostly subdued in other cities. “ In other words, scrub out one of the issues that was on the wall of worry in 2015 – the housing market has become more balanced.
Perspectives on interest rates
The previous rate cut was in May 2015 (25 basis points), taking the cash rate to a record low of 2.00 per cent.
There have been 10 rate cuts since November 2011.
The Reserve Bank had previously lifted rates seven times from October 2009 to November 2010 – a total of 1.75 percentage points, from 3.00 per cent to 4.75 per cent.
What are the implications?
CommSec doesn’t expect any change in the cash rate for the foreseeable future. Underlying inflation remains at the bottom of the 2-3 per cent target band but should lift over 2016 as import prices gradually lift in response to a weaker exchange rate.
If the Reserve Bank was to cut rates it would be because of global factors – certainly not domestic considerations.
With interest rates poised to stay low or potentially move even lower, investors will need to remain pro-active in embracing the best deals on online bank accounts. Borrowers also need to be on guard as fixed-term rates could move either way in coming months. While the US Federal Reserve is seeking to ‘normalise’ interest rates, lower oil prices, sharemarket volatility and uncertainty on the Chinese economy may stay the Fed’s hand.
Craig James is the chief economist at <a href="https://www.comsec.com.au/default.aspx" target="_blank">CommSec</a>.
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jchancellor-FAypfDUnLy

The RBA February 2016 hold decision, what it means: CommSec's Craig James

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GUEST OBSERVER
As had been widely expected the RBA left interest rates on hold at its February meeting.
This marks the ninth month in a row with the cash rate remaining at 2%.
While the RBA is less upbeat on the global economic outlook, particularly for emerging countries, and has acknowledged a further slide in commodity prices and reduced appetite for risk it seems more upbeat on the Australian economy at least in terms of information released over the last few months.
Inflation continues to be seen by the RBA as remaining low and it has also acknowledged slowing property price gains in Sydney and Melbourne.
While the RBA retained an easing bias on the back of the low inflation outlook, the balancing of more positive domestic developments against recent negative global developments clearly enabled it to remain on hold for now.
However, the RBA is clearly concerned about recent global and financial market developments and is waiting for more information in order to be able to judge its impact on global growth and the Australian economy.
Our view remains the RBA will cut interest rates again this year reflecting the risks around the global economy, weaker than expected commodity prices, still subdued growth in Australia at a time when the contribution from housing construction is slowing, a more dovish Fed threatening a higher Australian dollar and continued low inflation. 
However, this may not come till April or May.
However, whether there is another rate cut or not from the RBA, it’s hard to see rate hikes any time soon. 
So the period of low interest rates – with the cash rate at a record low and bank deposit rates at their lowest since the 1950s – is set to continue.
<a href="https://www.propertyobserver.com.au/https://plus.google.com/110172465327488162875?rel=author" target="_blank">SHANE OLIVER</a> is head of investment strategy and economics and chief economist at <a href="https://www.ampcapital.com.au/home" target="_blank">AMP Capital</a> and is responsible for AMP Capital's diversified investment funds.
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soliver-smf6LQXgW9

No cash rate hike anytime soon: AMP Capital's Shane Oliver

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GUEST OBSERVER
As expected, the Board of the Reserve Bank decided to leave the cash rate unchanged at 2.0% in February.
In a departure from recent practise the Governor highlighted the two key forces that will be most significant in the Board’s future decisions are: firstly, “whether the recent improvement in labour market conditions is continuing”; and secondly, “whether the recent financial turbulence portends weaker global and domestic demand”.
This is significant in that global market conditions have been elevated as important factors in the bank’s thinking.
However as indicated global volatility will be insufficient in its own right if there is no clear evidence of a feed through effect, particularly to domestic demand.
Measures of particular importance here will be consumer and business confidence.
To date the Bank notes that business conditions have moved to above average levels and we add that the recent 3.5% fall in the Westpac Consumer Sentiment Index, in response to market fluctuations, could well have been an over-reaction given the lack of other information available over the holiday period.
Certainly, to date the Bank appears to be gaining confidence around domestic economic momentum pointing out in today’s statement that: “the non mining parts of the economy strengthened during 2015”.
That compared with the December statement: “business surveys suggest a gradual improvement in conditions in non mining sectors over the past year.”
As we expected, the Board retained the moderate easing bias sentence: “Continued low inflation may provide scope for easier policy, should that be appropriate to lend support to demand”.
This is in fact somewhat stronger than the December statement which referred to “the outlook for inflation may afford scope ...” In fact, the commentary around inflation appears to recognise a lower inflation trajectory than indicated in December.
In December: “inflation is forecast to be consistent with the target over the next one to two years”. In today’s statement: “consumer price inflation is likely to remain low over the next year or two”.
The test of whether this wording is significantly different will come with the Bank’s inflation forecasts which are refreshed in February.
These forecasts will be released with the February Statement on Monetary Policy on February 5.
Our assessment has been that the Bank will retain the 2-3% inflation range in 2016 but there must be some doubt to this assessment based on the wording in the Governor’s statement today.
Other parts of the statement provided no surprises.
With the AUD having fallen from USD 0.73 to USD 0.71 since the December Board meeting it was expected that the Governor would continue to describe the currency as having “continued its adjustment to the evolving economic outlook”.
In December the housing market was described as: “the pace of growth in dwelling prices has moderated in Melbourne and Sydney over recent months”.
Despite a sharper than expected slowdown in prices in the last few months the description of the housing market remains the same.
In some recognition of the global volatility the Bank assesses that the global economy will grow “at a lower pace than earlier expected” highlighting weakness in emerging market economies including China.
Conclusion
Through all this market volatility and confident market pricing that RBA rate cuts could be expected as early as November last year Westpac has held the line that rates would remain on hold for the second half of 2015 and throughout 2016.
There is not enough in today’s statement for us to change that view.
In terms of the key issues highlighted by the Governor we do not expect to see a sustained continuation of current market volatility and certainly do not anticipate financial volatility substantially weakening domestic demand.
We do accept that recent job reports have run somewhat ahead of our expectations and anticipate a modest ( catch up) lift in the unemployment rate over the course of the next six months.
That development alone will continue to give markets hope that the RBA will cut rates further but we do not believe that the conditions will be there to drive that eventual result.
Bill Evans is chief economist of <a href="https://www.westpac.com.au/" target="_blank">Westpac</a>.
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