As apartment living continues to evolve across Sydney's growth corridors, the quality and distribution of shared spaces is increasingly shaping how residents experience home. Rather than functioning as add-ons, amenities are being embedded into the daily rhythm of a building, supporting everything from quiet retreat to social interaction, often within a single vertical community.

At <a href="https://www.apartments.com.au/new-apartments/aeris-melrose-park-nursery-street-melrose-park-nsw-2114">Aeris</a> in Melrose Park, this approach is resolved through a layered amenity offering that unfolds from ground level through to its upper podium. Developed by <a href="https://www.apartments.com.au/developers/sekisui-house-australia">Sekisui House Australia</a> in partnership with Hankyu Hanshin Properties, the project introduces 468 apartments across two towers and a mid-rise building, positioned at the highest point of the broader masterplan.

[smartcode_project:default project_id=426 project_image_fid=359199]

The amenity experience begins at street level, where two courtyards sit within a landscaped setting that connects residents to the wider network of parks and green spaces. These green spaces are not isolated pockets but part of a wider pedestrian network that links Aeris to the surrounding <a href="https://www.apartments.com.au/developments/melrose-park-nsw-2114">Melrose Park</a> precinct, including Central Park, future schools, and the Town Centre opening in July 2026. The result is a transition that moves from public to private without abrupt boundaries, allowing residents to pass through shaded, tree-lined environments before reaching the building itself.

Moving upward, the focus shifts to the level five podium, where the primary communal facilities are concentrated. This space brings together a 16-metre swimming pool, outdoor seating areas, and a communal BBQ zone arranged to take advantage of elevated outlooks. Seating is positioned beneath pergolas, creating pockets of shade that extend the usability of the space throughout the day. The pool edge aligns with views toward the wider district, reinforcing the sense of elevation that defines the project’s positioning.

In the adjacent building, this is complemented by quieter, more contemplative spaces, including an outdoor cinema set within the same level. Positioned to operate primarily in the evening, it introduces a different tempo to the shared environment, shifting from daytime activity to after-hours use without requiring separate zones.

[smartcode_project:default project_id=426 project_image_fid=360299]

The podium also accommodates an intimate private resident gym. Located on the lower levels, it gives residents convenient access to fitness facilities without leaving the building.

Above, the elevated podium sky deck extends the amenity offering, providing additional open-air spaces with elevated outlooks across the surrounding landscape. While more restrained in program, this upper level reinforces the project’s vertical progression, from ground-level greenery to elevated outlook, allowing residents to move between distinct spatial conditions within a single address.

This distribution of amenities reflects a deliberate response to how residents use space across the day. Sekisui House Australia Sales and Marketing Director Peter Kalaf points to the role these shared areas play in shaping buyer demand. Aeris has been conceived as more than a collection of apartments, with the podium pool, gym and outdoor cinema forming part of a broader lifestyle offering that extends the home beyond each individual residence.

[smartcode_project:default project_id=426 project_image_fid=360300]

What distinguishes Aeris is not the inclusion of these elements individually, but how they are arranged in relation to one another. Active, social, and passive spaces are layered vertically rather than separated, allowing residents to choose between them without leaving the building or moving far from their apartment. This proximity supports both routine use, such as a morning swim or evening workout, and more occasional gatherings, whether around the BBQ area or within the cinema setting.

The amenity design also sits within a broader framework of connectivity across Melrose Park. The Melrose Park Town Centre, anchored by Coles and Dan Murphys, features a mix of retail, dining, health and lifestyle offerings, bringing everyday convenience closer to residents. By the end of the year, more than five hectares of parks and open space, equivalent to around seven football fields of green space on residents' doorstep, will further enhance the precinct, allowing the internal facilities at Aeris to operate as an extension of the wider neighbourhood rather than a substitute for it.

Construction at Aeris continues to gather momentum, with ground floor slabs expected to be completed in late 2026 before the first sections of the buildings begin to rise above ground.

[smartcode_project_cta:default project_id=426]

Joel Robinson

Elevated amenity anchors daily life at Aeris, Melrose Park

Repeat buyers are one of the strongest measures of confidence in any apartment development.

At <a href="https://www.apartments.com.au/new-apartments/era-newcastle-west-124-126-bull-street-newcastle-west-nsw-2302">ERA</a> in Newcastle West, some purchasers are returning to <a href="https://www.apartments.com.au/developers/gwh">GWH</a> after living at the developer's One Apartments. Their decision to purchase again was driven by the quality of life they found after moving into their first GWH home.

Keith Wilton had spent years living in a house in East Maitland before deciding it was time for a change. Apartment living had always been on his radar, but he was selective about what he wanted.

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"I had some boxes I wanted to tick," he says.

Keith points to the open-plan design, generous outdoor areas and considered inclusions as key reasons One Apartments worked for him.

“One of those things was a nice indoor open plan area, but also I wanted a nice outdoor open area that I could entertain on in summer or Christmases or birthdays,” he says.

He also found value in the smaller details, from integrated appliances to shared resident spaces including the pool, cinema and rooftop areas.

[smartcode_project:default project_id=135096 project_image_fid=356818]

After comparing several developments, he chose One Apartments because of GWH's longstanding local reputation and his own experience working with the developer on a commercial project more than a decade earlier.

"I knew that they were local, that the quality of the build was going to be up there. I'd looked at other apartment complexes around and close by, and I just knew that here was a better decision location wise."

Today, Keith says the move has completely changed how he experiences Newcastle.

"I enjoy living in this location because it's more of a lifestyle change. That Newcastle city living where you can walk to restaurants and bars and even beaches and parks and even shopping across the road."

[smartcode_project:default project_id=135096 project_image_fid=356828]

Beyond the location, he says it's the sense of community that has surprised him most.

"Everyone loves living here because they chose to live here, but everyone looks out for each other. It's a real great community feel here."

For Aimee and Lyle Goodman, the journey started almost by chance.

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The couple happened to be having coffee in Newcastle when they noticed the site where One Apartments was about to begin construction.

"We were aware GWH was planning a development," Aimee says. "We made one phone call and things moved pretty quickly after that."

As busy business owners, they initially thought apartment living would simply reduce the maintenance that came with larger homes. Instead, it fundamentally changed how they spent time together.

"We actually catch up more as a family now," Aimee says.

"We've had homes with big yards and lots of space, but everyone ended up in different rooms. Here we'll have dinner together, the kids can play, and we spend far more quality time together."

[smartcode_project:default project_id=135096 project_image_fid=356829]

Lyle says their confidence came from GWH's reputation within Newcastle's building industry.

"I know people who've worked across different apartment projects, and whenever GWH came up the feedback was always the same. They're rock solid. They're quality."

That confidence only grew throughout the buying process.

"One of the things that really impressed us with GWH was the whole process, was the communication," Lyle says. "It was consistent, it was regular, there was no problem if we had some weird questions, there was no problems in getting answers."

[smartcode_project:default project_id=135096 project_image_fid=351104]

Aimee says one moment stood out.

"The project actually finished on time. We realised we needed to hurry up and sell our house because everything was happening exactly when they said it would."

The positive experience at One Apartments ultimately gave all three buyers the confidence to purchase again with GWH, this time at ERA.

Their confidence reflects what many buyers are seeking in today's apartment market. Location remains important, but so too does certainty around delivery, quality and long-term liveability.

[smartcode_project:default project_id=135096 project_image_fid=356822]

ERA builds on those foundations with 280 one, two and three-bedroom apartments across two landmark towers in <a href="https://www.apartments.com.au/developments/newcastle-west-nsw-2302">Newcastle West</a>.&nbsp;

Designed by <a href="https://www.apartments.com.au/architects/fk-australia">Fender Katsalidis</a>, the project will include more than 2,000 square metres of resident amenities, including a resort-style pool, gym, sauna, private cinema and rooftop entertaining spaces overlooking the harbour and coastline.&nbsp;

The development is also within walking distance of the Newcastle Interchange, Honeysuckle, Darby Street, the harbour foreshore, restaurants, retail and the city’s beaches, continuing the walkable lifestyle that existing GWH buyers say has transformed how they live.

[smartcode_project:default project_id=135096 project_image_fid=356826]

For Keith, the appeal remains straightforward.

"You feel at home even before you've moved into your home."

For Aimee, the change is measured in time.

“I just felt like I had more time,” she says.

[smartcode_project:default project_id=135096 project_image_fid=351102]

Construction at ERA is now underway, with more than half of the residences already sold and limited two and three-bedroom apartments remaining in the East Tower release. Priced from $980,000 for two-bedroom residences and $1.46 million for three-bedroom residences, buyers can secure an apartment with a 10 per cent deposit, with premium homes offering ocean views from Level 8 and harbour views from Level 10.

ERA is also backed by Resilience Insurance's 10-year Latent Defects Insurance policy, providing protection against structural or waterproofing defects for 10 years after completion. The project is anticipated to be completed in early 2028.

[smartcode_project_cta:default project_id=135096]

From ONE to ERA: Why buyers are choosing GWH again in Newcastle West

Virgate Property Group is preparing to commence construction of Verdé, its new apartment development in Melbourne's Arts Precinct at Southbank, following a strong run of sales that has seen more than half of the project's 173 apartments secured.

Verdé has attracted a broad mix of first home buyers, owner-occupiers upgrading from nearby inner-city suburbs and investors, with younger owner-occupier couples aged between 28 and 45 accounting for the strongest enquiry. Many are already living in Southbank, South Melbourne, Albert Park, Port Melbourne, South Yarra and the CBD.

"Verdé is located in one of the most desirable pockets of southern Melbourne," Blair Property Group Director Darren Blair, who is managing sales at Verdé, said.

"It's within walking distance of the Arts Centre, Royal Botanic Gardens, Albert Park Lake, and Southbank's restaurants and retail. It's a great lifestyle location with strong amenity and liveability, which made it a very attractive choice for the project."

[smartcode_project:default project_id=4661 project_image_fid=372549]

Virgate was already familiar with the precinct, having previously delivered the successful Domain House development in neighbouring South Melbourne. That experience gave the developer confidence to acquire the Coventry Street site and continue expanding its presence in Melbourne's inner south.

"We had been keeping an eye on the site and the broader precinct for a few months before deciding to move forward with the acquisition," Virgate said.

The project was ultimately secured in 2020 following feasibility studies, planning assessments and due diligence, with the brief centred on delivering "a high-quality, considered design that feels both refined and fit for purpose."

[smartcode_project:default project_id=4661 project_image_fid=314259]

Designed by <a href="https://www.apartments.com.au/architects/bruce-henderson-architects">Bruce Henderson Architects</a>, Verdé comprises 173 one, two and three-bedroom apartments priced from $599,000. The architecture is distinguished by a faceted glass façade that responds to both the site's outlook and Melbourne's changing light conditions.

According to Bruce Henderson Architects, the coloured glazing gives the building a distinctive identity while also providing privacy and solar shading, with residences oriented to capture views across the bay, city skyline and surrounding parklands.

Inside, <a href="https://www.apartments.com.au/interior-designers/designoffice">DesignOffice</a> has created interiors focused on natural light, efficient planning and enduring materials. Apartments feature engineered oak flooring, natural stone benchtops, floor-to-ceiling glazing and SMEG appliances, while a restrained material palette aims to complement the expansive outlooks rather than compete with them.

[smartcode_project:default project_id=4661 project_image_fid=372550]

Resident amenity has also been designed around everyday functionality rather than occasional use. Facilities include a concierge-serviced lobby, residents' lounge with fireplace, library and co-working space, gym, terrace garden with barbecue facilities, ground-floor café, and package delivery management.

The project's location continues to be one of its strongest drawcards. Positioned on Coventry Street, Verdé sits within walking distance of the National Gallery of Victoria, Arts Centre Melbourne, Royal Botanic Gardens and Albert Park Lake, while Southbank's dining precinct, Sturt Street trams and the new ANZAC Station are all nearby. The surrounding education catchment also includes Melbourne Grammar, Melbourne Girls Grammar, Mac.Robertson Girls' High School and several major university campuses.

The sales team says buyers have responded particularly well to the combination of location, design quality and long-term liveability.

"They're responding really positively to the quality of the design, premium resident amenities and the uninterrupted views. Many also appreciate the location and how connected it is to everything they need."

The ability to secure stamp duty savings before completion has also been a key factor for purchasers, alongside the opportunity to personalise finishes ahead of settlement.

With construction set to commence soon and more than half the apartments already sold, Verdé enters its next phase as one of the Arts Precinct's more established apartment developments, offering remaining buyers an opportunity to secure a residence before construction advances further. Expected completion is scheduled for late 2027.

[smartcode_project_cta:default project_id=4661]

Virgate's Verdé Southbank moves toward construction as sales fly past halfway stage

Downsizer-focused apartment development Kooyongkoot in Hawthorn has been recognised at the 2026 Better Future Melbourne Design Awards, taking home Gold and Silver awards in two categories.

<a href="https://www.apartments.com.au/new-apartments/kooyongkoot-hawthorn-1-kooyongkoot-road-hawthorn-vic-3122">Kooyongkoot</a>, currently being delivered by developer PQD and designed by Cera Stribley, received Gold in the Interior Design – Proposed category and Silver in the Architecture – Proposed category.

The dual recognition reflects the design approach behind the boutique development on prestigious Kooyongkoot Road, where the focus has been on creating homes for downsizers seeking the space, quality and functionality of a detached house within a low-rise apartment building.

Rather than maximising apartment numbers, <a href="https://www.apartments.com.au/developers/pqd">PQD</a> and <a href="https://www.apartments.com.au/architects/cera-stribley-architects">Cera Stribley</a> limited the development to just 18 residences, allowing for larger floorplans, greater privacy, generous landscaping and expansive communal spaces.&nbsp;The majority of the apartments also benefit from corner aspects, allowing for dual sources of natural light.

Now around 70 per cent complete and on track for completion in November 2026, Kooyongkoot will comprise a mix of garden residences, ter​race apartments, sub-penthouses, and is crowned by two half-floor penthouses with direct lift access and private rooftop terraces.

[smartcode_project:default project_id=102717 project_image_fid=355297]

The Silver Award for Architecture recognised the way the building responds to its prominent corner position at the ent​rance to Hawthorn's Scotch Hill precinct, one of Melbourne's most established residential neighbourhoods.

Rather than competing with the grand homes that line Kooyongkoot Road, the architectural approach focused on restraint and longevity, using curved brickwork, generous landscaping and carefully considered proportions to integrate with the existing streetscape.

"The form feels fluid and timeless, as though shaped by the landscape itself – architecture that belongs, rather than competes," said Chris Stribley, Co-Founder and Managing Principal of Cera Stribley.

The judging submission also highlighted practical innovations throughout the building, including lift cores servicing only nine homes each, a central landscaped lightcourt designed to bring daylight and ventilation into the building, and fully enclosed private storage rooms with lighting, power and shelving to better accommodate residents transitioning from larger family homes.

[smartcode_project:default project_id=102717 project_image_fid=355293]

The Gold Award for Interior Design recognised the project's focus on long-term liveability rather than display-home aesthetics.

According to the awards submission, the interiors were designed from the inside out, prioritising how homes would function over decades of daily use through generous proportions, practical storage, durable natural materials and flexible layouts.

The specification includes natural stone throughout, upgraded acoustic glazing, V-ZUG appliances and fully enclosed storage rooms, alongside an amenity offering focused on wellness, entertainment and everyday convenience.&nbsp;

Residents will have access to a gym and yoga studio, a wellness centre featuring traditional and infrared saunas, a cold therapy shower and treatment room, as well as a residents' lounge and golf simulator/cinema room for entertainment.&nbsp;Kooyongkoot has also considered the everyday convenience of its residents by offering a private carwash and pet wash facilities on site as well as dedicated parcel lockers and oversized fully enclosed storage rooms.&nbsp;

[smartcode_project:default project_id=102717 project_image_fid=355303]

The project's attention to detail has already resonated with buyers. Earlier this year, Kooyongkoot recorded one of Boroondara's highest apartment sales when an $8 million penthouse was purchased by a Melbourne CEO downsizing from a nearby family home.

"Every detail feels deliberate, from the overall design down to the smallest touches," the purchaser said.

"The level of quality and refinement is exceptional, but what really sold it was how liveable it felt... It felt like a place where everything had been considered, not just a luxury building."

[smartcode_project:default project_id=102717 project_image_fid=355304]

Sustainability also formed a key part of both award submissions. Kooyongkoot is targeting a minimum 7.5-star NatHERS rating across all residences, supported by passive design principles, high-performance glazing, EV charging infrastructure, water reuse systems and a wellness model focused on lower-energy dry facilities rather than pools and large wet areas.

Located within walking distance of Scotch College, Methodist Ladies' College, Koo​yong Lawn Tennis Club, Aubur​n Village and Camberwell Junction, Kooyongkoot continues to target owner-occupiers looking to remain in Melbourne's inner east without compromising on space or quality. A limited selection of two, three and four-bedroom residences remains available, with prices starting from $1.9 million.

[smartcode_project_cta:default project_id=102717]

Kooyongkoot wins Gold and Silver at Better Future Melbourne Design Awards

New apartment supply has become increasingly constrained across <a href="https://www.apartments.com.au/developments/parramatta-nsw-2150">Parramatta</a> in recent years, with fewer projects progressing through to completion as development conditions have become more challenging.

It makes <a href="https://www.apartments.com.au/developers/novm">NOVM</a>'s 2021-completed <a href="https://www.apartments.com.au/buildings/the-lennox-parramatta-12-phillip-street-parramatta-nsw-2150">The Lennox</a> one of the most recently completed residential towers on the Parramatta River, and among the newest apartment developments in Sydney's second CBD.

With the project largely completed before the sharp escalation in construction costs and inflation following the pandemic, The Lennox is now offering pricing that would be difficult to replicate in a comparable new development in Parramatta today, or across much of Western Sydney.

The majority of the 413 apartments at The Lennox sold before and shortly after completion. A limited release of the remaining apartments has recently been brought to market by capital partner <a href="https://www.apartments.com.au/project-marketer/equitifund-group">Equitifund</a>, with entry-level pricing from $700,000 and two-bedroom apartments available from under $1 million.

Rising above the Parramatta River at 12 Phillip Street, The Lennox comprises one, two, three and four-bedroom apartments, appealing to first home buyers, young professionals, families, downsizers and interstate investors seeking a completed apartment in one of Australia's fastest-growing economic centres.

[smartcode_project:default project_id=5743 project_image_fid=372394]

Rather than positioning Parramatta as an alternative to Sydney's CBD, Equitifund believes the city has reached a point where it stands on its own merits.

"Parramatta is no longer simply an alternative to Sydney CBD, it's becoming a destination in its own right," Equitifund Executive Chairman Greg Huxley said.

"The Lennox captures that evolution with a level of quality and amenity that's difficult to match at its price point."

[smartcode_project:default project_id=5743 project_image_fid=953]

Designed by <a href="https://www.apartments.com.au/architects/marchese-partners">Marchese Partners</a>, the tower responds directly to its riverfront setting through expansive glazing and open-plan layouts that maximise views across the Parramatta River and city skyline. Interiors feature engineered timber flooring, stone benchtops, stainless steel appliances and floor-to-ceiling glazing, while generous balconies extend the living spaces outdoors.

Marchese Partners says the project was conceived to balance high-quality apartment living with practical, long-term functionality, pairing larger, efficient floorplans with amenities more commonly associated with five-star hotels.

That emphasis continues through the resident facilities, which include a 20-metre rooftop swimming pool, fully equipped gym and wellness spaces, full-time concierge, a residents' lounge, function room, private lifts, secure basement parking and rooftop communal areas overlooking the Parramatta River. Ground-floor boardwalk retail and dining further activate the riverfront and integrate the building into the surrounding public realm.

[smartcode_project:default project_id=5743 project_image_fid=925]

Australian housing and finance group Equitifund has secured the remaining apartments, believing there are few completed apartment opportunities in Parramatta that offer the same combination of location, amenity and pricing.

Equitifund National Sales Director Ben Hamblett says buyers are increasingly recognising that premium apartment living no longer needs to come with Sydney CBD pricing.

"The Lennox is where aspirational living becomes attainable," Hamblett said.

"Wake to river and mountain views, step into Sydney's Second CBD, and arrive home to resort-calibre amenities, all without the harbour price tag."

Hamblett says owner-occupiers are also attracted by the convenience of having Westfield Parramatta, Church Street's dining precinct, Parramatta Park, Riverside Theatres, Western Sydney University and major transport connections all within walking distance.

"At The Lennox, lifestyle is not an afterthought, it is the foundation."

[smartcode_project:default project_id=5743 project_image_fid=5374]

The Lennox places residents within walking distance of Parramatta Square, Westfield Parramatta, Church Street Eat Street, Parramatta Station, the ferry wharf, Light Rail, the future Sydney Metro West, Parramatta Park and CommBank Stadium, reinforcing Parramatta's position as one of Australia's most connected metropolitan centres outside Sydney's CBD.

Equitifund says buyers visiting the display suite consistently comment on the quality of the finishes, generous floorplans, river and skyline views, and the walkability of the location. The project has attracted a broad mix of local professionals, upsizers, downsizers, buyers relocating from Sydney's inner suburbs and interstate investors seeking long-term growth opportunities.

That demand aligns with Parramatta's continued evolution as an economic powerhouse. Equitifund Research and Market Insights specialist John Bekiaris says sustained population growth, infrastructure investment and expanding employment opportunities continue to support long-term housing demand across the city.

"Parramatta has evolved from a satellite city into one of Australia's most important economic centres. Population growth, infrastructure investment and employment are all supporting sustained long-term housing demand."

[smartcode_project_cta:default project_id=5743]

The apartment price gap drawing Sydney buyers west

Rba Rate Decision

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At its meeting today, the Board decided to maintain the targets for the cash rate and the yield on 3-year Australian Government bonds of 25 basis points. It also decided to increase the size of the Term Funding Facility and make the facility available for longer.
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Under the expanded Term Funding Facility, authorised deposit-taking institutions (ADIs) will have access to additional funding, equivalent to 2 per cent of their outstanding credit, at a fixed rate of 25 basis points for three years. ADIs will be able to draw on this extra funding up until the end of June 2021. This extension will ensure that all ADIs continue to have access to the Term Funding Facility after the end of September, when the window for drawings under the initial allowance of 3 per cent of outstanding credit closes. Additional allowances associated with an ADI's growth of business credit will now also be available until the end of June 2021. Further details are provided in the accompanying notice.
To date, ADIs have drawn $52 billion under the Term Funding Facility and further drawings are expected over coming weeks. Today's change brings the total amount available under this facility to around $200 billion. This will help keep interest rates low for borrowers and support the provision of credit by providing ADIs greater confidence about continued access to low-cost funding.
The Term Funding Facility and the other elements of the Bank's mid-March package are helping to support the Australian economy. There is a very high level of liquidity in the Australian financial system and borrowing rates are at historical lows. Government bond markets are functioning normally, alongside a significant increase in issuance. Over the past month, the Bank bought a further $10 billion of Australian Government Securities (AGS) in support of its 3-year yield target of 25 basis points. Since March, the Bank has bought a total of $61 billion of government securities. Further purchases will be undertaken as necessary. The yield target will remain in place until progress is being made towards the goals for full employment and inflation.
Globally, an uneven economic recovery is under way after a very severe contraction in the first half of 2020. The future path of that recovery is highly dependent on containment of the virus. High or rising infection rates have seen a recent loss of growth momentum in some economies. By contrast, in China, economic growth has been relatively strong. In financial markets, volatility is low and the prices of many assets have risen substantially despite the high level of uncertainty about the economic outlook. Bond yields remain at historically low levels. The US dollar has depreciated against most currencies over recent months. Given this and higher commodity prices, the Australian dollar has appreciated, to be around its highest level in nearly two years.
In Australia, the economy is going through a very difficult period and is experiencing the biggest contraction since the 1930s. As difficult as this is, the downturn is not as severe as earlier expected and a recovery is now under way in most of Australia. This recovery is, however, likely to be both uneven and bumpy, with the coronavirus outbreak in Victoria having a major effect on the Victorian economy.
Employment increased in June and July, although unemployment and underemployment remain high. The virus outbreak in Victoria and subdued growth in aggregate demand more broadly mean that it is likely to be some months before a meaningful recovery in the labour market is under way. In the Bank's central scenario, the unemployment rate rises to around 10 per cent later in 2020 and then declines gradually to be to still around 7 per cent in two years' time.
Wage and prices pressures remain subdued and this is likely to continue for some time. Inflation is expected to average between 1 and 1½ per cent over the next couple of years.
The economy is being supported by the substantial, coordinated and unprecedented policy easing over the past six months. Fiscal policy is playing an important role. Public sector balance sheets in Australia are in good shape, which allows for continued support. Indeed, fiscal and monetary support will be required for some time given the outlook for the economy and the prospect of high unemployment. In addition, support for the recovery is being provided by Australia's financial institutions, which also have strong balance sheets and access to high levels of liquidity.
The Board is committed to do what it can to support jobs, incomes and businesses in Australia. Its actions, including today's extension of the Term Funding Facility, are keeping funding costs low and assisting with the supply of credit to households and businesses. The Board will maintain highly accommodative settings as long as is required and continues to consider how further monetary measures could support the recovery. It will not increase the cash rate target until progress is being made towards full employment and it is confident that inflation will be sustainably within the 2–3 per cent target band.
To read the original meeting statement, <a href="https://www.rba.gov.au/media-releases/2020/mr-20-20" target="_blank">click here</a>.
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jrobinson-rf4aSBido9

RBA extend term funding facility: RBA Governor Philip Lowe's September 2020 meeting statement

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The RBA continued to hold rates at a record low 0.25 per cent and maintain its current policy settings at its September meeting.
Experts say they have never felt better about housing affordability around the country, according to Finder.com.au's RBA Cash Rate Survey of 40 experts and economists.
62 per cent of participants responded with positive sentiment about housing affordability, a record percentage since Finder first started collecting data on it in March 2018.
Graham Cooke, insights manager at Finder, said housing affordability is a two-way street.
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2020/9/1/Housing%20affordability%20sentiment%20Finder.jpg" alt="">
“When experts feel good about housing affordability there are two ways to look at it.
“On the one hand, prices are down so those who are ready to buy or who want to negotiate rent are in a good position to do so.
“On the other hand, those who own or are looking to sell, may see that their property isn’t worth what it once was.
“What is certain here is that the drop in prices, rock-bottom rates and increased competition for non-investment buyers combined with government stimulus will likely get a lot of the next generation onto the housing ladder for the first time,” Cooke said.
Finder's Economic Sentiment Tracker gauges experts' confidence in five key indicators: housing affordability, employment, wage growth, cost of living and household debt.
CreditorWatch chief executive Patrick Coghlan says the RBA's decision to hold interest rates was a sensible measure to ensure cash stays in the economy as much as possible.
"This follows last month’s extension of the JobKeeper and JobSeeker schemes that demonstrate the extent to which the government is having to step in and support the economy," Coghlan said.
"However, our concern is that government support, in whatever form, will have to come to an end eventually and when it does, there will be a seismic shock as companies have to fend for themselves or admit defeat. 
CreditorWatch's data showed there was a 15 per cent increase in credit enquiries in the first few weeks of August compared to the July average.
"This is an important indicator that businesses are starting to onboard new customers.
"Whilst we can’t count on green shoots just yet, it's my view that government stimulus packages should be eased off, where possible, to avoid just kicking the can down the road.”
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RBA holds rates at record low and maintain fiscal policy at September meeting

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Saving rates have continued to plunge even though the Reserve Bank isn’t expected to cut the cash rate today, says Australian financial comparison website RateCity.
RateCity analysis shows that more than 40 banks cut saving account rates, including CBA, NAB, Macquarie Bank and AMP.
Average ongoing saving rates now sit at 0.59 per cent.
Research director Sally Tindall says complacent savers are earning next to nothing in this low rate environment.
“Seventy-six per cent of all household deposits are held by the big four banks, yet they’re the ones offering some of the lowest ongoing savings rates on the market.”
Westpac is the only big bank bucking the trend, offering an impressive 3 per cent rate for customers aged 18 to 29.
At the same time interest rates have continued to fall, deposits have hit an all-time high, according to the latest APRA statistics.
This means banks don’t need to attract new savers, Tindall says.
“They can’t even afford to offer respectable returns to the customers they’ve got.”
Just last week, Macquarie Bank slashed its introductory rate by 0.50 per cent to 1.50 per cent while AMP terminated its welcome rate altogether.
<img src="https://www.urban.com.au/images/Screen%20Shot%202020-09-01%20at%2012.51.53%20pm.png" alt=""> 
Introductory rates across the big four banks have dropped by an average of 1.12 per cent while the ongoing savings rate has dropped by 0.09 per cent.
The average cash rate has dropped by 0.75 per cent in the last year for the big four, while the conditional savings rate has dropped to 0.92 per cent.
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Savers stung by falling rates, despite no likely RBA cut: RateCity

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Banks may increase variable mortgage rates to recoup pandemic-induced losses despite a stagnant cash rate, according to surveyed experts.
In this month's Finder RBA Cash Rate Survey, while all the experts surveyed expect a cash rate hold in September (40/40), more than half of those who weighed in (57%, 16) believe that banks will raise their variable mortgage rates despite the Reserve Bank indicating that the cash rate will remain motionless for some time.
When asked about the expected time frame for this movement, half of the respondents (50%, 8) said banks are likely to announce out-of-cycle rate hikes during the first half of 2021.
Graham Cooke, insights manager at Finder, said that prospective variable rate increases mean future homebuyers should tread cautiously.
“Banking profits have nosedived off the back of billions of dollars worth of loan deferrals, a shrinking pool of first-time buyers, low-interest rates and minimal credit growth."
“This may send banks scrambling to recoup lost funds by pushing up home loan rates to absorb some of these costs, which will come at a detriment to mortgage customers."
“A flat cash rate does not mean homeowners are in the clear. We learned this during the most recent period of cash rate stagnation. While the rate held at 1.25% for 34 months starting in 2016, banks increased their variable rates 7 times."
“This means that homebuyers considering a variable mortgage should still factor in a potential repayment increase of 2-3% to their budget to prevent rate shock,” Cooke concluded.
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Banks raise variable mortgage rates independent of the RBA: Finder RBA Survey

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

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The RBA kept interest rates at a record low 0.25 per cent at its August meeting, maintaining the current policy settings.
Experts in Finder.com.au's RBA Cash Rate Survey suggest the economy is yet to "turn a corner", despite RBA governor Philip Lowe's comments after the June ABS figures that it had done exactly that.
More than half of the 26 respondents disagree with Lowe's statement, saying that the total economic impact is impossible to forecast with a second outbreak unfolding across Victoria and NSW.
Graham Cooke, insights manager at Finder, said that Australia’s economic fate rests on how well authorities can limit the spread of the virus.
“The virus situation has rapidly deteriorated since June. 
“As Melbourne enters a Stage 4 lockdown, businesses are once again bracing for restrictions and closures that will no doubt send economic shock waves across the country", Cooke added.
Rebecca Cassells of Bankwest Curtin Economics Centre said that the recent surge in infections is threatening retail recovery.
"Thousands of jobs were recovered in June, retail sales improved and business and consumer confidence was up. But virus outbreaks in Victoria and NSW have very rapidly undone this trajectory", Cassells said.
“JobKeeper and JobSeeker offer some economic certainty, but getting the virus back under control will offer more,” she said.
Patrick Coghlan, chief executive at CreditorWatch, says the holding of the interest rates is sympathetic to the balancing act the Australian economy faces.
He does suggest however that there is concern that by extending the likes of the government’s business stimulus packages, we are simply kicking the can down the road.
"Once the likes of JobKeeper, JobSeeker, Mortgage Holidays and Safe Harbour do eventually come to an end, there will be a seismic shock to the economy as companies will have to either fend for themselves or admit defeat", Coghlan says.
“With ten per cent of all businesses in Australia in danger of failing because of lack of cash, we could potentially end up seeing ten years’ worth of administration in the next six months."
 
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RBA holds official cash rate at August meeting

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EXPERT OBSERVER
The theme around the economic outlook from both the July Board Minutes and the Governor’s speech, which was delivered 90 minutes after the release of the Minutes, is best summarised by the conclusion in the Minutes “Economic conditions had stabilised and the down turn had been less severe than earlier expected” .
However, appropriately, the outlook hinged on developments around the virus both domestically and globally. The Board concludes, “However the nature and speed of the economic recovery remained highly uncertain”.
Perhaps the best “summary” of the degree of positive surprise to the Board is set out in the Minutes when the Board refers to the Bank’s original forecast of a 20% reduction in hours worked in the June quarter.
Having fallen by 9.5% in April and a further 0.7% in May, hours worked recovered by 4% in June (not known at the time of the Board meeting) resulting in the overall fall being only around a third of the Board’s original expectations.
From my perspective the most interesting insights in the Minutes and the Speech are around the discussion of policy options.
The Minutes discuss “How the elements of the Bank’s March policy package could have been configured differently” ­– setting a lower cash rate (say 0.1%) or purchasing more bonds than necessary to achieve the target bond rate.
The Board concluded that there was “no need to adjust the package of policy measures in Australia in the current environment”.
The policies which were considered included: “negative interest rates; foreign exchange intervention; the purchase of private sector assets; and direct government financing”.
The conclusion was “all such options entail significant costs and involve very difficult trade offs and, for some policies, there are legitimate questions about their effectiveness”.
These issues were covered in more detail in the Governor’s speech.
He quickly dismissed negative interest rates confirming the Board’s view in the Minutes as being “extraordinarily unlikely”. He accepted that the main potential benefit was “downward pressure on the currency” (in the Q and A he did extol the benefits of a lower currency) but referred to a dislocation of the supply of credit and “encourage people to save more”. Unfortunately, as with the last time he referred to negative rates (November last year) he did not provide any detail to the dynamics he had in mind.
In contrast, he spent a great deal of time discussing direct government financing partly, I expect, because Stan Fischer ( Vice Chair of the Federal Reserve during the Janet Yellen period) “recently argued that central bank financing of government spending may be appropriate in some circumstances” provided there are strong safeguards to avoid the inflation problem which might result  from printing money. That could be done principally through the central bank determining the degree of financing – not the government. While recognising this argument he dismissed money printing for Australia since the government was able to finance itself in the market on very favourable terms, therefore maintaining fiscal discipline.
The practice of QE which the RBA now embraces is considered different because the RBA only buys in the secondary market and the government is committed to paying interest to the RBA rather than just issuing an “IOU” to the RBA which might threaten its profits; its contribution to government revenue and, potentially, requiring a recapitalisation. In the Fischer model that policy is close to printing money where the central bank has control of the process.
While I felt that the arguments around negative rates were not developed there were some serious arguments against intervention in the FX markets. These arguments against intervening (including when the AUD is broadly in line with fundamentals) are complicated by “financial risks to the public balance sheet” and “complicate international relationships”.
While these assessments are fairly definitive he did conclude that “the Board has not ruled out future changes while” recognising that there are limitations to what more can be achieved through monetary policy”.
He clearly supported the use of fiscal policy maintaining that the government’s balance sheet is sound with low debt ratios compared to most countries.
With interest rates at record lows “the public balance sheet is well placed to smooth out the shock to private incomes and support the economy through the pandemic”.
The speech and the Minutes present unified cases for steady policy while still leaving the door slightly ajar for further stimulus if absolutely necessary.
In the Q and A I reminded the Governor of the final words in a recent speech from Deputy Governor Debelle which concluded “ the Reserve Bank will maintain the current policies to keep borrowing costs low and credit available, and stands ready to do more as the circumstances warrant.” I asked for some clarity on “do more” but, given the theme of the speech, did not make any progress.
The key to any future policy developments might lie with the Australian dollar – certainly the Governor was particularly enthusiastic in his admiration for a low AUD.
Bill Evans is the chief economist at Westpac 
 
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RBA minutes and governor’s speech closed the door on any further stimulus, for now: Westpac's Bill Evans

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The reduced flow of new arrivals to Australia is affecting some real estate markets, RBA Governor Philip Lowe noted in the July RBA meeting minutes released today.
He was referring primarily to the rental market, with vacancy rates increasing sharply in Sydney and Melbourne to just above four per cent.
Lowe cited the increase in the supply of rental housing in some areas.
He said soft conditions in the rental market were expected to weigh on rent inflation for some time.
The RBA members also noted conditions in the established housing market remained mixed.
"Housing prices in some larger cities had declined in June, though were only a little below recent peaks in the case of Sydney and Melbourne", Lowe said, adding that house prices in a number of smaller cities were broadly unchanged.
He said housing turnover has recovered somewhat after a "significant decline" when in-person auctions and open homes were banned owing to physical distancing restrictions.
Refinancing activity had risen sharply, Lowe noted, as borrowers had taken advantage of lower rates and the strong competition for lower-risk borrowers.
"Interest rates on new fixed-rate mortgages were noticeably lower than on new variable rate mortgages, which had led to an increasing share of new or refinanced loans on fixed rates", Lowe said.
"While some existing borrowers had deferred their loan payments, payments into offset accounts had remained high.
"This was consistent with many home loan borrowers saving for precautionary reasons and having reduced opportunities for spending."
Investor credit continued to contract, while credit extended to owner-occupiers continued to grow steadily at around the pace of preceding months. Lowe said credit growth overall was likely to slow in the months ahead, with commitments for new housing loans having fallen sharply in May.
"Members noted that this was consistent with weak economic conditions and the soft outlook for the housing market".
The RBA board also touched on how the elements of their emergency March policy package could have been configured differently.
"There has been variation across countries in the design of these measures.
"It would have been possible, for example, to set lower, but still positive, interest rate targets and to have purchased a quantity of government bonds above that necessary to achieve the bond yield target.
To read the full RBA minutes, click here.
 
 
 
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Overseas buyers absence hurts Australian property market: RBA governor Philip Lowe

Conditions in the established housing market remained mixed: RBA July 2020 meeting minutes

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EXPERT OBSERVER
As expected, the Reserve Bank board kept its policy settings unchanged at the Board meeting in July.
The assessment in July confirms the theme in the June Board meeting (“it is possible that the depth of the downturn will be less than earlier expected”) with, “Conditions have stabilised recently and the downturn has been less severe than earlier expected”.
However, as with June, the outlook is described as “highly uncertain”.
On August 7, the Bank will release its revised forecasts out to December 2022 (extended from June 2022 in May).
We will be interested in how this more positive assessment channels into the forecasts.
From a policy perspective the most interest will be in the assessment of the medium term outlook.
We assess that the Bank expects it is extraordinarily unlikely to see the need to adjust policy settings in 2021.
But recall that in its “upside scenario” in the May Statement on Monetary Policy the Bank assessed an unemployment rate of 5% by June 2022. Such an improvement in the unemployment rate would probably see it considering a move in its three year bond target at that time since it confirmed today ”the yield target will remain in place until progress is being made towards the goals of full employment and inflation”.
The unemployment rate in the base case is forecast to be six and a half per cent by June 2022 – down from nine per cent in December 2020.
That nine per cent  is likely to be reduced (Westpac is currently at eight per cent) reflecting the “less severe” near term conditions but I would be surprised if the Bank has seen enough evidence around the growth risks to lower the base  unemployment forecast in June 2022, particularly given the Governor’s understandable caution around the virus both domestically and internationally.
Growth through to December 2020 is also likely to be revised up from minus six per cent to nearer Westpac’s forecast of around minus four per cent.
But that will be largely offset by a considerable reduction in the 2021 growth forecast of six per cent (Westpac’s forecast is three per cent).
Evidence that the Bank may adjust its 2021 forecasts downwards comes through the Governor’s observation that “As some businesses rehire workers as demand returns, others are restructuring their operations”.
Of considerable interest will be the Bank’s assessment of the level of activity in the economy by end 2021 relative to the end of 2019. Current forecasts are for activity to be only around 0.4 percentage points below that level.
Westpac is more cautious at around 1.2 percentage points but both estimates will have activity more than five percentage points below trend over those two years.
And, of course, bear in mind that those forecasts in May assumed an AUD at USD 0.64 over the forecast period. Readers will be aware that Westpac expects the AUD to lift to USD 0.72 by December 2020 and to USD0.76 by end 2021.
Markets have been expecting that the Governor might comment on the AUD’s current level which is above USD 0.695.
However, while I am sure that he would like a lower AUD there is not much point in criticising its level if he has no intention of addressing the issue through policy. Policies such as negative interest rates and/or unsterilized intervention have been variously described as extraordinarily unlikely.
The Statement today clearly signalled steady policy except with respect to targeting the three year bond rate “will do whatever is necessary to ensure bond markets remain functional and to achieve the yield target for three year AGS”.
That statement implies that the Bank has adequate commitment to add to the AUD 40 billion it has already purchased, although only around a quarter was purchased in the two – three year maturity range.
Those purchases were in a year when the Budget deficit lifted from “balance” to a deficit of (we forecast) AUD 95 billion. This year (2020/2021) we expect the deficit to balloon to AUD 240 billion, making for a more active RBA, specifically if domestic and global growth surprise to the upside or market stability falters.
The Deputy Governor Guy Debelle seemed more flexible by ending his speech to the Economic Society last week with, “the Reserve Bank will maintain the current policies to keep borrowing costs low and credit available, and stands ready to do more as the circumstances warrant”.
Candidates for those “circumstances” range from a rampant AUD to another global crisis.
Bill Evans is the chief economist at Westpac
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