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

Joel Robinson

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

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Castle Hill, the longtime hub of the Hills District, has been one of the major beneficiaries of Sydney's Metro expansion, with improved connectivity helping drive continued population growth, development and buyer demand across the Hills District.

But despite that growth, the suburb has seen relatively few major new apartment projects brought to market over the past 18 months.

Hills District developer Reve Group is looking to fill that gap with <a href="https://www.apartments.com.au/new-apartments/nova-r-ve-castle-hill-2-garthowen-crescent-castle-hill-nsw-2154">Nova Rêve</a>, a major new mixed-use precinct on the corner of Garthowen Crescent and Old Castle Hill Road, a short walk from Castle Hill Metro Station and Castle Towers.

[smartcode_project:default project_id=152737 project_image_fid=377679]

The project will comprise three residential towers alongside a hotel, restaurants, cafes and a skybar, more than 1,600 sqm of ground-floor retail and almost an acre of landscaped gardens.

It represents the largest project undertaken by Reve Group, the development arm of the Kassis family, which has been building across the Hills District for more than 30 years through Kassis Homes.

[smartcode_project:default project_id=152737 project_image_fid=377675]

Nova Rêve also represents a significant step up from the family's first apartment development, Grand Rêve, which was delivered nearby on Garthowen Crescent.

Grand Rêve introduced larger, house-like apartment layouts and premium inclusions including Wolf and Sub-Zero appliances to the Castle Hill market.

Nova Rêve takes that approach to a precinct scale, combining the residential component with hospitality, retail and substantial public and resident landscaping.

[smartcode_project:default project_id=152737 project_image_fid=377685]

Reve Group Managing Director Sam Kassis said the project reflected the family's three decades of building in the Hills, which has evolved from trophy homes on quarter-acre blocks to larger-scale apartment development.

"Grand Rêve was our first apartment project here and it showed us what this pocket of Castle Hill could be. Nova Rêve is the refinement of that idea: not just apartments, but a place the whole suburb can use," Kassis said.

A key part of that approach is the hotel, which has been designed to operate as an amenity for the wider Castle Hill community rather than solely hotel guests.

It will include restaurants, cafes, skybars and all-day dining, alongside conference and event facilities catering to business functions, community groups and private events.

At ground level, more than 1,600 sqm of shops and cafes will open onto the surrounding streets and landscaped areas.

Almost an acre of gardens designed by Land and Form Studios will run through the precinct, incorporating pathways, seating, barbecue areas and children's play spaces.

[smartcode_project:default project_id=152737 project_image_fid=377680]

Reve Group's Romio Georges said creating an active ground plane had been central to the planning of Nova Rêve.

"There are gardens with pathways, barbecues, seating and play areas, shops and cafes opening onto the street, and a hotel with restaurants and a skybar that anyone in Castle Hill can walk into," Georges said.

The project's elevated position on one of Sydney's highest ridgelines will also provide apartments with outlooks toward the Sydney skyline, surrounding parkland and the Blue Mountains.

More than 80 per cent of the apartments will occupy corner positions, with Turner responsible for both the architecture and interiors.

&nbsp;

[smartcode_project_cta:default project_id=152737]

<h3 data-end="3697" data-section-id="q3n5ak" data-start="3672">&nbsp;</h3>
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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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A survey of 16 economists and experts undertaken by Finder.com.au has found that the Reserve Bank of Australia is unlikely to change their rates in their June meeting tomorrow.
Of course, the question remains as to when the rate will next be increased – with the majority of experts believing we have reached the bottom of the rate cycle.
According to those surveyed, nine forecast an increase next year. This included AMP, ANZ, Bank of Sydney, ING Direct, RAMS, UBS, Heritage Bank, Moody’s Analystics and ME Bank.
Meanwhile, five respondents, from Commonwealth Bank, Commsec, Urbis, HSBC and St George Bank, pointed to a cash rate increase this year.
Of the experts, 10 believed that reactions to the federal budget cuts will delay any change. Nine noted that more stability needs to be seen in the economy before any changes.
Results from Finder survey:
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Economist/expert, organisation
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Snap shot of comments
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<td valign="top" width="215">
Shane Oliver, AMP
</td>
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“...Nothing's really happened. The Reserve Bank has cut interest rates to these record lows, and that has had an impact on the economy...”
</td>
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Warren Hogan, ANZ
</td>
<td valign="top" width="426">
“...There’s no inflation pressure on the economy just yet so they can keep the rates low, and there's no need to cut them...”
</td>
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John Symond, Aussie
</td>
<td valign="top" width="426">
"...We don't think there will be a change to rates, as the economy continues to send out mixed signals..."
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Steven Pambris, Bank of Sydney
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<td valign="top" width="426">
“...The current record low interest rates will have to continue for some time...”
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Michael Blythe, CBA
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“...What will be interesting to see is how the budget's reception will impact household consumption...”
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Craig James, Commsec
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“...There's been a lot of huffing and puffing about the budget, but really it's people's perception. There's no reason for the reserve Bank to be cutting rates...”
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Paul Williams, Heritage Bank
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“...The rba will be keeping an eye on the trends in unemployment, developments in key offshore economies, inflation levels and rising tensions in south east asia and europe...”
</td>
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Paul Bloxham, HSBC
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“...The economy is showing signs of rebalancing but inflation is fairly contained at this stage...”
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Michael Witts, ING Direct
</td>
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“...Although consumers appear to reacted adversely to the measures announced in the budget it is too early tell what the lasting impact will be...”
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John Caelli, ME Bank
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“...Inflation is within the target zone so the RBA can afford to wait and see the recovery unfold…”
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Glenn Levine, Moody’s Analytics
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“...The RBA will leave interest rates on hold, but this competing dynamic between a below-trend economy and a warming housing market will shape monetary policy in the next 12 months...”
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Jonathan Chancellor, Property Observer
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“...Other than the post-budget consumer blues, there's little reason for the RBA board to do anything but issues their monthly minutes this June...”
</td>
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Nathan McMullen, RAMS
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“...Monetary policy settings remain mildly expansionary relative to long run averages and are appropriate given the current outlook...”
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Hans Kunnen, St. George Bank
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“...The economic recovery isn't deep enough for them to be raising money this soon...”
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Scott Haslem, UBS
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“...It's pretty clear the RBA is expecting the economy to only slowly improve over the next couple of years...”
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Nicki Hutley, Urbis
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“...Consumers opened their wallets a little wider in the first few months of the year and the housing cycle is in full swing...”
</td>
</tr>
</tbody></table>
Property Observer’s editor at large, Jonathan Chancellor, who took part in the survey, noted that <a href="/expert-insights/finance/last-months-price-growth-dip-the-first-since-may-2013-so-rba-will-be-content">the RBA will be interested that national house values have fallen in May</a>, as they have in each of the past three May months.
“But May's fall is the first monthly fall in values since May 2013.
“Meanwhile construction is coming along nicely, with NSW taking the rightful crown from Victoria as the national's busiest new home market. That means, other than the post-budget consumer blues, there's little reason for the RBA board to do anything but issues their monthly minutes this June.”
Last week, Property Observer reported that the <a href="/news/no-australian-housing-bubble-but-negative-gearing-induced-affordability-issues-former-rba-governor-ian-macfarlane">RBA's former governor Ian Macfarlane noted that there is no housing bubble</a>, but that affordability is an issue. Part of the affordability issue, he said, is negative gearing's effect.
For more predictions of when the next rate increase will be, you can see <a href="/expert-insights/finance/what-will-happen-to-interest-rates-next-week-and-when-will-the-next-increase-be">a summary of economists' thoughts here</a>.
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jduke-EHk3XBmHkn

16 experts predict “no change” from RBA tomorrow

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The RBA will be interested that national house values have fallen in May, as they have in each of the past three Mays.
But May's fall is the first monthly fall in values since May 2013. It was down by 1.9% in May – the biggest fall since December 2008.
Meanwhile construction is coming along nicely, with <a href="/news/victoria-loses-residential-building-crown-to-nsw-hia">NSW taking the crown from Victoria as the national's busiest new home market</a>.
That means, other than the post-budget consumer blues, there's little reason for the RBA board to do anything but issue their monthly minutes this June.
But Luci Ellis, the head of the RBA's financial stability department, was spot on when she told the CITI Residential Housing Conference last month that there will be more periods where prices are falling a little in absolute terms in future property market cycles.
<a href="https://www.finder.com.au/rba-cash-rate" target="_blank">My RBA cash rate forecast</a> gets published every month on finder.com.au.
Today's RP Data Rismark Index indicated a national fall in combined capital city dwelling values by 1.9% over the month. Only Darwin and Canberra went up in May.
<img src="/images/2014/06/02/rp-data-june-2-one.gif" alt="">
According to RP Data research director Tim Lawless, the dip can likely be attributed to both seasonality and more moderate housing market conditions.
Across most of the individual capital cities, dwelling values were also down over the month, led by Melbourne with a 3.6% reduction in values.
Sydney, which has been the stand-out performer, experienced a 1.1% fall in prices in May. Prices were up 2.2% over the past quarter.
Since the market low of May 2012, Sydney’s values have climbed 21.1%.
Over the past three months national capital city dwelling values are up 0.7% the lowest rolling quarterly rate of dwelling value appreciation since the three months ending June 2013.
In the May quarter Darwin was the strongest performer, up 5.5%. Melbourne was the weakest over the quarter. Brisbane prices were down 1.7% for the month but rose 2.2% in the quarter.
Prices in Perth and Canberra prices remain flat with little change over the May quarter.
<img src="/images/2014/06/02/rp-data-june-2-two.gif" alt="">
CommSec chief economist Craig James said after the latest data that "house prices couldn’t lift forever."
"At some point there had to be a correction and it seems the Federal Budget caused people to pause and take stock. 
"But the Reserve Bank will take the latest data on home prices in its stride. 
"Auction clearance rates were still healthy over the weekend, so the drop in home prices may just be the pause that refreshes. 
"In addition interest rates are low and there is evidence that the job market is improving. 
"The Reserve Bank can still afford to stay on the interest rate sidelines – perhaps to late 2014 or early 2015," James said
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jchancellor-FAypfDUnLy

Last month's price growth dip the first since May 2013, so RBA will be content

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Ian Macfarlane, the governor of the Reserve Bank of Australia from 1996 to 2006, doesn’t think there's an Australian housing bubble.
"We do have an affordability problem, it makes it tough for young people to acquire a house in a desirable area.
"This is characteristic of every major city in the world that has desirable job opportunities. London, Paris, Berlin, New York, Hong Kong, Singapore," he told the recent Morningstar Investment Conference where he was asked his views on a potential residential property bubble in Australia.
"I think we faced a risk in 2003, not 2014. In 2003, we had lending for housing and prices rising at 20%, half of it speculative lending, negatively geared. 
"There were seven prime time television programmes on how to get rich in property.  Since then, on average, house prices have risen at the same rate as household income.
"For that reason, I don’t think we have a bubble," he said as reported by the <a href="https://cuffelinks.com.au" target="_blank">cufflinks </a>website.    He said the affordability problem was partly due to negative gearing making it tough for young people to acquire a house in a desirable area.
"Some of our policies make that worse, such as the extreme leniency we show towards negative gearing, but I don't think there is a bubble." 
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No Australian housing bubble, but negative gearing-induced affordability issues: Former RBA governor Ian Macfarlane

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Reserve Bank of Australia analysis recently put the national residential property market at just 1.9% off prior records set in the 2007 and 2010.
The RBA supplied the Australian Financial Review columnist Christopher Joye with its price-to-income ratio estimates after an information request.
The data was as at 31 March, with Joye noting that since March, home values across the capital cities have corrected modestly by 0.9%, according to RP Data-Rismark’s index.
"While this apparent improvement in affordability is welcome news, it does not necessarily mean alarm bells should stop ringing," Joye advised.
Some optimistic pundits claim that the softening in auction clearance rates and prices heralds a moderation in activity where capital gains will not exceed Australia’s 3% household income growth rate (to avoid heading into bona fide “bubble” territory)."
Joye says Australian household debt relative to incomes is 28% above the level that prevailed in December 2002 (based on the RBA’s numbers).
"And the dwelling price-to-income ratio is 15% more expensive than it was a decade ago."
Joye says there are some reasons to think that the current May slowdown is a "seasonal air pocket".
He says analysis shows that during the months of April through June, inclusive, house price growth is normally about 1% weaker than it is over the rest of the year.
"If there are no rate hikes this year and the marginal buyer supposes (irrationally) that the record low 4.8% mortgage rates they can get are here to stay, there is scope for them to bid up prices another 5 to 10%," he tipped.
"My own perspective is that we are unlikely to see any real correction in prices until borrowing rates normalise.
"That in turn requires hikes from the RBA, which is currently entrenched on the sidelines."
His concern is that when the RBA does recalibrate rates, home values could decline "sharply."
"Investors must therefore focus maniacally on getting value for money."
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RBA housing bubble alarm bells should be ringing despite May price correction: Christopher Joye

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The country’s housing market remains a source of economic strength, according to the Reserve Bank of Australia’s (RBA) May board meeting minutes.
Indicating strong growth in housing investment in the first half of 2014, dwelling approvals and commencements remain at high levels despite a recent decline. The RBA noted that housing price inflation had eased in past months from its recent “rapid pace”, citing softening auction clearance rates and stabilising housing loan approval numbers.
Demand for both established and new housing remains strong according to other indicators, including turnover, first home owner grants and loan approvals.
The board noted a lower than expected inflation outcome for the March quarter. This followed on from a “surprisingly high” quarterly inflation figure for December of 0.8%. Underlying inflation in the March quarter was around 2.5-2.75% in year-end terms. The board's forecast for underlying inflation remained consistent.
According to the RBA, the price increase for tradable goods was consistent with the depreciation of the exchange rate over the past year. Price inflation for non-tradables had softened to 3% in year-ended terms, markedly down from the 4% average of the past decade. The board cited declining wage growth over the preceding two years as a key factor in the decline.
Following late 2013’s pick-up in economic activity, indicators for labour market conditions showed some improvement. The unemployment rate was down for March, though it is unclear whether this is due to monthly volatility. However the board also noted strengthening employment growth and an apparently stabilising participation rate over the past few months.
Driven by strong export growth, economic activity increased over the previous six months. Economic growth is unlikely to continue at the same pace over the next few quarters, given that export growth is not expected to remain at the same high levels.
Growth in retail sales seems to have stabilised following strong increases at the beginning of the year. Household consumption remains supported by low interest rates and rising housing prices, with consumer sentiment staying around long-run average levels.
According to a number of surveys, business sentiment remains at average levels after climbing from mid-2013 lows. The board noted that business investment in construction could pick up, despite declines in non-residential building approvals in recent months.
Gross Domestic Product (GDP) growth over 2014-2015 is expected to be slightly below trend, given the decline in mining investment and planned budgetary tightening. However, economic growth is expected to “pick up to an above-trend pace” in 2015-16 due to the contributions of non-mining business investment and liquefied natural gas exports.
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jrichardson-uRX5hFdKfN

RBA notes strong housing market in May board minutes

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The first Coalition budget was always to going to be a fiasco – should the Coalition significantly reduce the budget deficit this would put the ALP in the untenable position of being seen as incapable of managing the nation’s finances given their past track record.
So when it goes to the Senate it will be rejected given the Coalition simply don’t have the numbers to get it through. In the meantime let’s have a look at what I perceive as a major housing affordability issue – actually it’s horrendous.
In a nutshell, the budget forecasts economic growth to be 2.5% in 2014-15 and moving to 3.5% in 2017-18. Unemployment to sit at 6.25% in 2014-15 then falling to 5.75% in 2017-18 and inflation sitting around 2.25% in 2014-15 rising to 2.5% in 2017-18. The big mover is debt which will reduce from $667 billion to $389 billion over the next 10 years.
All very good, but what are the Reserve Bank of Australia’s (RBA) cash rate projections as this is the sleeping elephant in the china shop.
Cue the Australian Bureau of Statistics (ABS) who released this week what many are saying is the real debt crisis in Australia and we should be very afraid about these statistics. Australian household debt at the end of 2013 came in at approximately $1.84 trillion which then calculates out at approximately 180% of disposable household income. Little wonder we are now starting to see household debt slowing – this should come as a major concern. Government debt is currently sitting at around 30% of GDP – Australian household debt today is sitting at around 120% of GDP.
Household debt is today at the highest level for 25 years and when you deduct 25 from 2014 you come up with 1989. Whilst the vast majority may not remember what happened in 1989, I clearly do as I <a href="/expert-insights/why-property-bubbles-are-like-the-loch-ness-monster">recently wrote about it</a>.
Now to put these statistics into greater context it needs to be remembered that back in 1989 the cash rate was sitting between 17.5% and 19% as against 2.5% today. The cash rate is crucial to the Australian housing industry given once the RBA starts to raise it there will be collateral damage along the way as “some” households will not be able to meet their repayments given our high cost of living. The areas that have been over heated in recent times are a natural example where previously they witnessed dramatic property value corrections.
<a href="https://www.rwm.com.au/files/2014/05/14-05-2014-10-15-49-AM.jpg"><img class="aligncenter size-full wp-image-8543" src="https://www.rwm.com.au/files/2014/05/14-05-2014-10-15-49-AM.jpg" alt="14-05-2014 10-15-49 AM" width="614" height="401"></a>
Source: Digital Finance Analytics
<a href="https://www.rwm.com.au/files/2014/05/14-05-2014-10-18-14-AM.jpg"><img class="aligncenter size-full wp-image-8544" src="https://www.rwm.com.au/files/2014/05/14-05-2014-10-18-14-AM.jpg" alt="14-05-2014 10-18-14 AM" width="689" height="387"></a>
Source: Digital Finance Analytics
So the ABS has released in its March 2014 data that Australia’s total housing stock is estimated currently at $5.1 trillion which equated to a rise of $105,348.0 million over that quarter – with the total number of residences calculated at 9.33 million.
The June housing numbers will make for compelling viewing given so many Australians see their homes as an appreciating ATM that can easily be borrowed against – which is fine so long as homes are in capital appreciation mode. In recent times we have seen areas posting annual capital appreciation of around 30% plus which signals dangerous debt loading.
<blockquote>
Until household debt starts showing signs of improvement the RBA could well be forced to lower the cash rate further to say 2.00%.
</blockquote>
Historically what we see next is the banks tightening their loan ratios which many would agree is long overdue given their recent ‘lend at all costs’ mandate to increase their respective market shares. We would all remember that as we entered the global financial crisis the first thing expected of the government is to guarantee bank deposits – to stop a run on the banks.
What is assured is that until household debt starts showing signs of improvement the RBA could well be forced to lower the cash rate further to say 2.00%.
When one takes a moment to seriously consider the economic ramifications we are presently observing in the housing industry, it makes a mockery of all the political bickering of what is currently being argued in Canberra.
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robertsimeon-hRNTwJyXkQ

Household debt is the sleeping elephant in the china shop

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Luci Ellis, the head of the RBA's financial stability department, hopes Australians can see an upswing in housing prices in the larger metropolitian centres and say, ‘I don't have to buy into that. I don't have to stretch my finances’.
Not that Australian household finances are looking too stretched at the moment.
"And we'd like to see it stay that way," Luci Ellis said.
Her speech to the CITI Residential Housing Conference noted that the 15 years to 2005 saw housing prices rise noticeably faster than incomes.
"This was in large part a transition to a new equilibrium of lower inflation and interest rates, and thus higher debt and housing prices relative to incomes. That transition is over now. Housing prices are therefore going to be cycling around a slower trend than they did in the past. There will be more periods where prices are falling a little in absolute terms," she said.
The means that there was "less scope for rising markets to cover mistakes if you fall in love with a property and overpay for it".
"It means there is little room for another round of property exuberance of the type we saw just over a decade ago, in 2002 and 2003. Australia managed to have its housing boom end without a major disaster. Plenty of other countries weren't so lucky.
"Usually it's the property developers that are the source of loan defaults and financial instability, not the households with mortgages. But an overstretched household sector is hardly a good environment to have if something should go wrong elsewhere in the economy.
"That is why the Reserve Bank and the Australian Prudential Regulation Authority (APRA) have emphasised loan serviceability so much of late."
She commented that lenders had become more sophisticated in the ways they assess households' capacity to repay mortgage loans.
"Most of them have moved beyond a crude approach of applying a blanket repayment-to-income test, more likely to take people's actual living expenses into account, not just some version of the Henderson Poverty Line. After all, it doesn't seem reasonable to expect people to have a poverty-level lifestyle to pay off a million-dollar home.
"Importantly, lenders are now more likely to apply an add-on to current interest rates when calculating the repayment they use in their serviceability tests. 
"It's fair to say that serviceability calculations are binding for first home buyers and less binding for trade-up buyers and investors. So it's no surprise that as interest rates have fallen, it's the trade-up buyers and investors whose demand has increased.
"Meanwhile first home buyers will feel squeezed out. This is probably more a cyclical phenomenon than a structural one. It is still probably quite disheartening for potential first home buyers.
"As such, it would not be a good outcome if they responded by overstretching themselves to try to get into the market during upswings."
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Disheartened FHBs warned not to overstretch home loan borrowings: RBA's Luci Ellis

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The Reserve Bank of Australia has noted that the strong established housing market has stimulated consumption in its latest Statement of Monetary Policy.
In its outlook for 2014-15, the Reserve Bank predicts that low interest rates will continue to support the housing market. Low rates are also expected to boost the construction of new dwellings and household consumption.
According to the Reserve Bank, a “pronounced increase in dwelling investment is underway”, with growth higher than was forecast three months ago. Increasing housing turnover is expected to stimulate renovation activity, which the Bank notes has “to date been quite subdued.”
The market for new housing remains strong, with building approvals also surpassing previous expectations. Forward looking indicators such as loan approvals and first home owner grants for new dwellings are also showing strong growth.
The Reserve Bank cites low interest rates, rising housing prices, average rental yields and first home owner grants for new dwellings as key drivers for housing investment.
Nationally, house price inflation has moderated somewhat in recent months. The Reserve Bank also notes that auction clearance rates have declined from their recent highs, while loan approvals remain stable. According to the Reserve Bank, "it remains to be seen whether these signs of tempering conditions represent a shift to a more sustainable growth rate for housing prices."
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RBA’s May 2014 statement: Dwelling investment increasing

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Aussie Home Loans executive chairman John Symond fears an overly tough budget could "knock the wind out of the sails" of consumer confidence.
"We have seen consumer confidence only very slowly improve.
"We don't want a kick in the guts with a budget that is too tough,"
"It could slow the economy down," he told Ross Greenwood on <a href="https://www.2gb.com/article/money-news-ross-greenwood-may-6th#.U2l-xFxK4Us" target="_blank">2GB MoneyNews</a>.
John Symond says he foresees more of the same when it comes to interest rates.
"I am not convinced there was a bias either way," he said on the RBA thinking.
"There are mixed signals in the economy and in the global economy."
"There may be stable rates for months to come," he suggested.
His comments on consumer confidence followed the weekly ANZ-Roy Morgan consumer confidence pulse which was down around 8% over the past two weeks.
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John Symond fears fallout from overly tough federal budget

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The Reserve Bank has kept the cash rate at a record low of 2.5% for another month. 
Today’s decision marks another month of historic lows for Australia’s interest rates, while many speculate that the Reserve Bank will move to increase rates by the end of the year as price growth stabilises and housing construction expands.
Reserve Bank governer <a href="/expert-insights/finance/strong-expansion-in-housing-construction-expected-rba-governor-glenn-stevens">Glenn Stevens said of today's decision</a>, "financial conditions overall remain very accommodative. Long-term interest rates and most risk spreads remain low. Equity and credit markets are well placed to provide adequate funding."
"In Australia, the economy grew at a below-trend pace in 2013. Recent information suggests moderate growth is occurring in consumer demand and foreshadows a strong expansion in housing construction. Some indicators of business conditions and confidence have improved from a year ago and exports are rising. But at the same time, resources sector investment spending is set to decline significantly and, at this stage, signs of improvement in investment intentions in other sectors are only tentative, as firms wait for more evidence of improved conditions before committing to expansion plans. Public spending is scheduled to be subdued," he said.
Australians can expect interest rate stability in the current inflationary climate.
"Looking ahead, continued accommodative monetary policy should provide support to demand, and help growth to strengthen over time. Inflation is expected to be consistent with the 2–3 per cent target over the next two years," said Stevens.
"In the Board's judgement, monetary policy is appropriately configured to foster sustainable growth in demand and inflation outcomes consistent with the target. On present indications, the most prudent course is likely to be a period of stability in interest rates." 
Michelle Hutchinson, money expert at comparison website finder.com.au, says that a drop in the cash rate is unlikely in the near future.
"While the <a href="https://finder.com.au">finder.com.au</a> Monthly Reserve Bank Survey found all 12 leading economists and money experts were correct with their prediction of no rate change today, most are expecting to see the cash rate rise by the end of the year or next year,” she said. According to Hutchinson, the current interest rate climate has seen some lenders fail to pass on rate cuts to borrowers.
"With no more rate drops on the cards, we found that lenders have kept on average 0.24 percentage points since rates began to fall in November 2011 by not always passing on the full cuts to their customers,” said Hutchinson.
LJ Hooker deputy chairman L Janusz Hooker predicts that a rate increase by the Reserve Bank could be as far away as December.
“There is still a chronic shortage of housing in areas such as Sydney and with this simple supply and demand imbalance continuing, it’s hard to see how the bottom can drop out of the market,” said Hooker.
Low interest rates have seen housing construction approvals pick up in many markets, while residential sales are strengthening in Hobart and even Adelaide, despite concerns about unemployment.
“Sensible buyers are factoring in future rate increases when doing their calculations but I also think there is an acceptance that the rate of growth the market has been enjoying will slow down,” he said.
According to RP Data national research director Tim Lawless, the latest housing market results showed that capital gains across the nation’s housing markets were slowing to more sustainable levels, which would have provided the RBA with some comfort.
“The April results showed a slowdown in dwelling value appreciation, up just 0.3% over the month, which is likely to be a welcome result after such previously strong conditions,” said Lawless.
“The ongoing low interest rate environment is likely to encourage higher levels of housing market activity which provides a fantastic multiplier for the Australian economy; however we anticipate that natural affordability barriers and low rental yields will continue to dampen the exuberance that has been very much evident in Sydney and Melbourne,” he said.
<img src="/images/2014/05/06/quotes-may-6-on.jpg" alt="">
 Source: Finder.com.au
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