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

Joel Robinson

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

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

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

Maréa Residences brings parkside apartments to Coolangatta

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

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

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

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

Rba Rate Decision

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EXPERT OBSERVER
As discussed in our last weekly Westpac now expects the Reserve Bank to delay its next cut in the cash rate to April with the final cut to 0.25% occurring in August. Prior to the release of the surprisingly strong December employment report we had expected the cuts to be timed for February and June.
The inflation report, which printed on January 29, confirmed that inflation remains 'stuck' well below the Board’s 2–3% target band with the trimmed mean (the key measure of underlying inflation used by the RBA) printing 0.43% for an annual rate of 1.6%. The annual rate of increase of the trimmed mean has been within a 1.5%–1.8% range for the past four years. The RBA’s latest forecasts envisage the annual rate of the trimmed mean holding at 1.8% in 2020 and 1.9% in 2021. When the Bank releases its revised forecasts on February 7 we expect it will reaffirm that inflation outlook.
These are not the forecasts of a central bank (with a 2–3% inflation target range) that expects it has come to the end of its easing cycle.
Such a decision would only be appropriate if the Bank assessed that further easing in policy would be ineffectual or counter productive.
However, in its December minutes, the Board made the case for the effectiveness of monetary policy.
"Members discussed the transmission to the economy of the interest rate reductions since the middle of the year. They noted in particular that the available evidence suggested that more stimulatory monetary policy had been working through the usual channels of lower bond yields, a depreciation of the exchange rate and lower interest rates on mortgages. There had also been an effect on housing prices, increased housing turnover in the established market and some early signs of a stabilisation in housing construction activity ...
... While members recognised the negative confidence effects for some parts of the community arising from lower interest rates, they judged that the impact of these effects was unlikely to outweigh the stimulus to the economy from lower interest rates".
It is also important not to confuse monetary and fiscal policy. There has been some speculation that fiscal policy is the only answer. We accept that a more stimulatory fiscal policy is necessary and have strongly advocated the bringing forward of the Stage 2 personal tax cuts in two tranches beginning in July 2020 and followed by the second tranche in July 2021.
Based on the most recent fiscal update – the Mid-Year Economic and Fiscal Outlook, released December 16 – that policy would risk pushing the 2020/21 and 2021/22 fiscal positions back into modest deficits. We believe that such a 'price' is worth paying if we are to provide a sizeable boost to household incomes and an associated lift in business expectations for stronger demand growth.
Now, of course, it is necessary to superimpose on this discussion the recent exogenous shocks of the bushfires and coronavirus.
Westpac has adjusted its GDP forecasts for the bushfire effect, lowering GDP growth in both the December and March quarters by 0.1%, reflecting the impact on tourism; agriculture; and regional retail of the bushfire crisis.
The other likely effect was always going to be the overriding impact on consumer confidence. The Westpac-MI Index of Consumer Sentiment fell by 1.8% in January to 93.4 – a fairly modest fall compared to the 5.8% fall during the Queensland floods of 2011. However the survey was taken during the first week of rain in January, and the starting point for the Index was much lower than in 2011 (a reading of 111 for Sentiment).
The –0.2% growth impact is seen to be on the conservative side with estimates ranging from –0.1% to –0.5%.
We have also pencilled in a lift in demand of 0.1% of GDP later in 2020 to reflect the rebuild that will follow.
The second risk to the growth outlook is the coronavirus outbreak.
This virus is likely to largely affect Australia through its impact on services exports. This sector has been an important source of growth for the Australian economy. In a year (to the September quarter 2019) where the Australian economy grew by 'only' 2.0%, net service exports contributed 0.4ppts.
Services exports are about $100bn a year. This includes $64bn, 3.2% of GDP, in travel and education – of which Chinese students and tourists represent 27% of those exports, or 0.85% of GDP.
Consequently the direct effect of a complete shutdown of Chinese tourism and student travel for a year would reduce GDP by almost 1ppt with significant additional multiplier effects. However such an outcome is extreme – well beyond the experience during the SARS outbreak of 2003 – and we can only await a clearer picture of developments over the next few months.
Issues of importance in estimating the impact on Australia’s services exports include: the resilience of the virus; the impact on student travel and the impact on tourism.
Westpac has not imputed this effect in its current growth forecasts given the high degree of uncertainty.
The Reserve Bank will also be pondering the impact of the bushfires and coronavirus on its growth forecasts.
We will receive an update on the Bank’s growth forecasts on February 7, while the Governor is giving a speech "The Year Ahead" on February 5.
We expect that the RBA will lower its 2020 growth forecast from 2.8% to 2.6% (rounded down to 2.5% in the main forecast table in the 'Economic Outlook' section). That compares with Westpac’s forecast of 2.1% (no coronavirus effect included) and will be justified by the weaker than expected momentum in 2019 (September quarter GDP was not available for the November forecast) plus some allowance for the bushfires/coronavirus.
However these latter effects will be considered transitory and the 'bold' forecast of 3.1% growth in 2021 will likely be retained.
Markets should not feel that a lowering of the near-term growth forecast to below trend growth should automatically require a rate cut. The assessment of monetary policy involving 'long and variable lags' and an above-trend growth forecast in 2021 is sufficient to justify a 'pause' until the impact of exogenous shocks becomes clear and the sustainability of the recent downtrend in the unemployment rate can be tested.
Such an approach is entirely consistent with Westpac’s expectation that the next rate cut will be in April following the December quarter national accounts and the next 'snapshot' of Australia’s growth momentum.
BILL EVANS is the Chief Economist at Westpac
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RBA to hold until April and cut 2020 economic growth forecast: Bill Evans

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EXPERT OBSERVER
The RBA will stay on hold in February, using the recent improvement in the unemployment rate to buy time – suggesting the bank will continue to react to the accumulation of evidence very gradually.
It is important to note that the framework for monetary policy still suggests that rates should be lower.
Inflationary pressure remains weak and recent headwinds – particularly for consumption and business investment - are likely to persist. Notwithstanding the recent dip in the unemployment rate, a large degree of spare capacity remains in the labour market with little progress having been made over the last year in reducing unemployment.
Nonetheless, unless the RBA wishes to move against market expectations, the February cut appears off the table.
Consequently, we have moved the timing of the next cut to April followed by a second cut around mid-year. Beyond that the risk of a move to ‘unconventional’ policy in H2 2020 will depend critically on whether the labour market deteriorates more significantly than we forecast.
By April, the RBA will have confirmation of another quarter of weak consumer spending with further evidence that interest rate and tax cuts to date have not done enough to boost spending.
We will review our GDP forecasts over the next week or so as more information comes in on the indirect effects of the bushfires and coronavirus on activity and ultimately the labour market. 
The stronger than expected December labour market data has provided time for the RBA to further assess the data flow. While the RBA staying on hold in February is expected by the market, we still think the RBA will regret not moving earlier this year – as was also the case in 2019 – as consumer spending trends remain very soft. The December NAB survey also suggests that private sector economic momentum, while it didn’t collapse in late 2019, remains stalled. 
Ultimately the RBA’s policy path will depend on where the economy and the labour market goes from here. We remain of the view that the economy – and consumer spending in particular - will continue to underperform and probably more than the RBA expects – albeit new RBA forecasts will be published later this week and will likely contain a softer near-term growth outlook. 
An early estimate of the short-term bushfire impact could well see average GDP growth in 2020 slow to around 1.5% or lower, with unemployment starting to rise to around 5.5% by H2 2020. While we will be assessing the indirect disruption effects of the fires over coming weeks it seems likely that Q1 GDP will be negative. We are quite worried that the January NAB Survey will further highlight that the indirect effects were larger than most expect.
Internal data on income growth suggests that wages growth may have weakened in late 2019. Indeed, our analysis suggests household cash flows weakened further in late 2019. It is too early to assess the impact of the Coronavirus but clearly it will also not be a positive. Next week we will formally review our GDP forecasts ahead of the next NAB business survey release. 
The bushfire rebuild will add somewhat to growth in the out years but we do not see that as significant in 2020 – rather it is likely to be a 2021 issue. Also, the fiscal outlay on the fires (at $2billion over two years) is not likely to be a game changer in terms of the near term macroeconomic outlook.
We still see scope for more support from a material fiscal package. That does not appear to be on the government’s agenda. Similarly, we think there is a need for renewed focus on structural policy to lift productivity growth over the medium term, which would in turn provide support for wage growth.
Whether the RBA moves to unconventional policy will very much depend on whether the economy strengthens in H2 2020 and unemployment continues its recent gains. We fear that will not be the case. Beyond that, the shape of the 2020/21 Federal Budget will be important.
While we can understand the RBA’s position of taking more time to assess the outlook, that in our view is only sustainable for a short period. By April it will be clear that private sector growth continues to flat line, consumer spending remains soft and potentially that recent unemployment gains are not sustained. That combination means that further stimulus will be needed.
ALAN OSTER is NAB Group's Chief Economist
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NAB push back RBA rate cut prediction: Alan Oster

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Future Fund chairman and former Treasurer Peter Costello has urged the Reserve Bank to refrain from cutting official interest rates to a new record low out of fear it could reignite a housing price bubble in Sydney and Melbourne following a “welcome correction” in home values over the past year.
As the RBA board prepares to meet next week for the first time since ­December, Mr Costello told The Australian, the central bank had to be “very careful” it did not risk further pumping up house prices by cutting official interest rates, which he said were failing to stimulate the economy."
He made the comments ahead of the latest Consumer Price Index – the main measure of inflation in Australia – which rose by 0.7 per cent in the December quarter, slightly above expectations. In seasonally adjusted terms the CPI rose by 0.6 per cent. The annual rate of headline inflation lifted from 1.7 per cent to 1.8 per cent. The Aussie dollar rose slightly against the greenback in response.
His comments echoed what Mr Costello said late last year, that interest rate cuts would have a limited impact on the economy.
"What will a rate cut do for the economy? In my view, not much," he said.
“We’ve already got a cash rate of 1 per cent, suppose it goes to 0.75 per cent, suppose it goes to 0.5 per cent. Áll these people who are holding off spending or borrowing or investing are going to say ‘I wouldn’t have done it at 1 per cent, but I’m going out there now that it’s 0.75 per cent?’ I don’t think that’s going to happen,” Mr Costello emphasized.
Peter Costello who was Treasurer for nearly 12 years during the Howard government, said he thought a "very big part" of the RBA's thinking was the prospect that if other countries cut interest rates, Australia would lose the stimulatory impact of having a lower exchange rate.
He described RBA governor Philip Lowe’s speech earlier this week, in which he said the RBA did not want Australia’s exchange rate to go up, as “very interesting”.
Image ABC
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Peter Costello says 2020 rate cuts won't do much

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EXPERT OBSERVER
Westpac now expects that the Reserve Bank will delay its next cut in the cash rate to April with the final cut to 0.25% occurring in August.
Prior to the release of the surprisingly strong December Employment Report we had expected the cuts to be timed for February and June.
Our analysis of the December Board Minutes highlighted that, with the Board committing to review its assessment of the economy in February, it seemed likely that the Board would have been prepared to cut the cash rate by 0.25% at that meeting.
However we did note that, “The flow of economic data over the next six weeks will be critical to that decision, particularly the labour market; retail sales and confidence”. (Economic Bulletin, December 17).
Although the November retail sales report printed a strong 0.9% we were comfortable to attribute much of that out performance to the “Black Friday” effect expecting a sizeable pull back in retail sales in December, (to be released on 6th of February).
The Westpac-MI Consumer Sentiment Index fell by 1.8% in January to 93.4 – consistent with a down beat consumer.
However, the Employment Report was always going to be the most important data release.
Recall that in the December minutes the Board concluded that, "The Board would continue to monitor developments, including in the labour market, and was prepared to ease monetary policy further if needed to support sustainable growth in the economy, full employment and the achievement of the inflation target over time”.
The November report showed a tick down in the unemployment rate from 5.3% to 5.2% – Westpac expected that the December Report would see a reversion back to 5.3% but the actual report printed a further fall in the unemployment rate to 5.1%.
This fall in the unemployment rate is not unprecedented. Over the last five years there have been six occasions when the unemployment rate has fallen in back to back months by a total of 0.2% or more.
Read full report <a href="https://westpaciq.westpac.com.au/wibiqauthoring/_uploads/file/Australia/2020/January/er20200124BullDelayRBACashRate.pdf" target="_blank" data-auth="NotApplicable">'RBA delay cash rate' (PDF 74kb)</a>
BILL EVANS is the Chief Economist for Westpac
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Westpac expects RBA and USA to delay rate cuts: Bill Evans

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EXPERT OBSERVER
As expected, the Reserve Bank Board decided to leave the cash rate unchanged at 0.75%.
The key themes around the policy outlook which have been consistently promoted in these RBA statements in recent months have been repeated.
Firstly, the Board “continues to monitor developments, including in the labour market”, and secondly, “the Board is prepared to ease monetary policy further if needed”.
However, an additional theme appears in today’s Decision Statement, “long and variable lags in the transmission of monetary policy”. This is not a new observation, given that it has appeared in Board minutes in the past but being elevated to the more succinct Decision Statement gives it some enhanced prominence.
The recent surge in established house prices, particularly in Sydney and Melbourne, has attracted further interest. The Governor now notes that the lower cash rate “has also boosted asset prices, which in time should lead to increased spending, including on residential construction”.
The relevance of house prices per se, and their impact on the real economy, will be a major source of policy discussion in the first half of 2020. The only other significant change to the Decision Statement in November is a more balanced outlook for the global economy – “while the risks are still tilted to the downside, some of these risks have lessened recently”.
Other consistent themes are: “economy appears to have reached a gentle turning point”, “the main domestic uncertainty continues to be the outlook for consumption”, and “the unemployment rate… is expected to remain around this level [5¼ per cent] for some time”.
However, in a direct reference to the need for further policy stimulus, the theme that “the Australian economy can sustain lower rates of unemployment and underemployment” stands out.
Finally, in reference to the turnaround in established housing markets, the Decision Statement still notes that “new dwelling activity is still declining and growth in housing credit remains low”.
Conclusion
This Decision Statement is a little more positive than we have seen in the past, mainly through the linking of rising house prices to a potential lift in spending and residential construction. It also continues to emphasise that the Board is prepared to be patient, is monitoring developments, that policy has long and variable lags, and is prepared to ease  "if necessary”.
If we were expecting a policy move over the next month, then this Decision Statement would raise some questions. However, our forecast that there will be a cut at the February meeting looks much safer. Over the course of the next few months, there will be a clear test of the RBA’s view that the unemployment rate will hold steady. There will also be further evidence around the strength of the consumer with the national accounts to be released tomorrow as well as two more retail sales reports.
The response of the Australian dollar to any confidence that the RBA will be on hold in February will also be important. We assess that one of the factors behind the consistently low AUD is the expectation that the RBA will continue down its easing path.
Overall, despite this emphasis on “monitoring” and the slightly more upbeat discussion on the Australian economy, we still feel confident that the rate cut in February will be delivered.
Furthermore, we argue that the growth, the unemployment rate, and inflation developments through 2020 will require further attention from the RBA culminating in a final rate cut to 0.25% in June. From that point, with further easing still required, the RBA will need to move to a form of Quantitative Easing, based on the regular monthly purchase of around AUD 2-3 billion of government securities.
BILL EVANS is Chief Economist for Westpac. 
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RBA holds the cash rate steady; emphasises scope to ease further: Bill Evans

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The Reserve Bank of Australia have kept the official cash rate at 0.75 per cent at its December meeting today.
The outlook for the global economy remains reasonable. While the risks are still tilted to the downside, some of these risks have lessened recently. The US–China trade and technology disputes continue to affect international trade flows and investment as businesses scale back spending plans because of the uncertainty. At the same time, in most advanced economies unemployment rates are low and wages growth has picked up, although inflation remains low. In China, the authorities have taken steps to support the economy while continuing to address risks in the financial system.
Interest rates are very low around the world and a number of central banks have eased monetary policy over recent months in response to the downside risks and subdued inflation. Expectations of further monetary easing have generally been scaled back. Financial market sentiment has continued to improve and long-term government bond yields are around record lows in many countries, including Australia. Borrowing rates for both businesses and households are at historically low levels. The Australian dollar is at the lower end of its range over recent times.
After a soft patch in the second half of last year, the Australian economy appears to have reached a gentle turning point. The central scenario is for growth to pick up gradually to around 3 per cent in 2021. The low level of interest rates, recent tax cuts, ongoing spending on infrastructure, the upswing in housing prices and a brighter outlook for the resources sector should all support growth. The main domestic uncertainty continues to be the outlook for consumption, with the sustained period of only modest increases in household disposable income continuing to weigh on consumer spending. Other sources of uncertainty include the effects of the drought and the evolution of the housing construction cycle.
The unemployment rate has been steady at around 5¼ per cent over recent months. It is expected to remain around this level for some time, before gradually declining to a little below 5 per cent in 2021. Wages growth is subdued and is expected to remain at around its current rate for some time yet. A further gradual lift in wages growth would be a welcome development and is needed for inflation to be sustainably within the 2–3 per cent target range. Taken together, recent outcomes suggest that the Australian economy can sustain lower rates of unemployment and underemployment.
Inflation is expected to pick up, but to do so only gradually. In both headline and underlying terms, inflation is expected to be close to 2 per cent in 2020 and 2021.
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There are further signs of a turnaround in established housing markets. This is especially so in Sydney and Melbourne, but prices in some other markets have also increased recently. In contrast, new dwelling activity is still declining and growth in housing credit remains low. Demand for credit by investors is subdued and credit conditions, especially for small and medium-sized businesses, remain tight. Mortgage rates are at record lows and there is strong competition for borrowers of high credit quality.
The easing of monetary policy this year is supporting employment and income growth in Australia and a return of inflation to the medium-term target range. The lower cash rate has put downward pressure on the exchange rate, which is supporting activity across a range of industries. It has also boosted asset prices, which in time should lead to increased spending, including on residential construction. Lower mortgage rates are also boosting aggregate household disposable income, which, in time, will boost household spending.
Given these effects of lower interest rates and the long and variable lags in the transmission of monetary policy, the Board decided to hold the cash rate steady at this meeting while it continues to monitor developments, including in the labour market. The Board also agreed that due to both global and domestic factors, it was reasonable to expect that an extended period of low interest rates will be required in Australia to reach full employment and achieve the inflation target. The Board is prepared to ease monetary policy further if needed to support sustainable growth in the economy, full employment and the achievement of the inflation target over time.
The statement was released by <a href="https://www.rba.gov.au/media-releases/2019/mr-19-33" target="_blank">the RBA</a>.
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jrobinson-rf4aSBido9

Further signs of property market market turnaround: RBA Governor Philip Lowe's December meeting statement

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The Reserve Bank of Australia have kept the official cash rate at a record low 0.75 per cent at its December meeting today.
"There are further signs of a turnaround in established housing markets," Lowe said.
"This is especially so in Sydney and Melbourne, but prices in some other markets have also increased recently.
The RBA are waiting to see if their three cuts in 2019 will stimulate the local economy enough that a further cut isn't required.
NAB however are forecasting disappointing GDP growth of 0.3 per cent in Q3, slowing marginally from the growth rates seen in the last two quarters and a continuation of the weakness seen over the past year.
"NAB's expectation is that the RBA will ease rates by a further 25bp in February, with the risk that it will ease a further 0.25 per cent an announce unconventional policy should a material fiscal stimulus fail to materialise,", NAB advise. 
Two-thirds of Finder RBA's Cash Rate Survey, a survey of economists and experts, also predict a cut to 0.5 per cent in February.
Julie Toth of the Australian Industry Group said in the absence of tax reform, cuts are one of the only moves the RBA can make.
"Australia's economy is failing to accelerate (again) in 2019-20", Toth said.
“Non-mining business investment remains especially weak, but it is sorely needed to boost our productivity growth and real incomes for all.
“In the absence of meaningful tax reform and micro-economic reform, another rate cut probably won't help much, but it is the only response that the RBA can offer," Toth added.
Westpac's Bill Evans says the RBA <a href="/expert-insights/finance/rba-will-cut-cash-rate-to-0-25-by-june-2020-bill-evans">will cut rates to 0.25 per cent</a> by June 2020.
 
 
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RBA holds rates at December meeting

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Experts predict the Reserve Bank of Australia (RBA) will take unconventional measures to stimulate the economy in 2020, according to the latest survey data from Finder.
In their most recent <a href="https://www.finder.com.au/rba-cash-rate" target="_blank">Finder RBA Cash Rate Survey™</a> – 33 experts and economists weighed in on future cash rate moves and economic indicators, including wage growth and housing affordability.
While economists almost universally expected no cut in December, many experts are forecasting a cut in February. This may be the last for a significant period, with three-quarters (73%) of economists saying a 0% cash rate is unlikely.
RBA Governor Phillip Lowe recently insisted that the federal bank had ‘no appetite’ for quantitative easing (QE), a process where the central bank creates new cash to decrease – or ease – the cost of borrowing.
But nearly half (46%) of experts said it was likely we’d see QE in 2020.
Graham Cooke, insights manager at Finder, said “The RBA said they may look to alternative stimulus methods once the rate hits 0.25%."
“We’re only two cuts away from that, and the three cuts of 2019 have failed to stimulate anything beyond the housing market,” Cooke said.
Click <a href="https://lh5.googleusercontent.com/02a-7JJna6IjqWtAijhZ6rm8W27bou3occx5_PFIeSABS_nb_aiZDZrQrSHUO-dztGbQ2TqccNgDB2tW8J3bBb67RMGMAEcBcM0Kcv6rE9az54GkaxiuiPqsohHaKb_fW7NyRYjm" target="_blank">here</a> to enlarge:
<img src="https://lh5.googleusercontent.com/02a-7JJna6IjqWtAijhZ6rm8W27bou3occx5_PFIeSABS_nb_aiZDZrQrSHUO-dztGbQ2TqccNgDB2tW8J3bBb67RMGMAEcBcM0Kcv6rE9az54GkaxiuiPqsohHaKb_fW7NyRYjm">
On the bright side, a recession looks increasingly unlikely in 2020, with 89% of experts not expecting an economic decline and 88% thinking it unlikely that house prices will fall.
Three quarters of experts (76%) don’t foresee a significant rise in mortgage defaults, 64% think a US-China trade deal is likely and 52% say it is likely that house prices will fully recover.
Cooke said the positive outlook on China is significant because the fate of the US-China trade deal was cited as economists’ number one economic concern in the August survey this year.
While nearly all experts and economists predict a hold in December (97%, 32/33), two-thirds (66%, 22/33) expect the cash rate to drop to 0.50% in February 2020. This figure reflects the 64% of experts who predicted February would be a cut in last month’s survey. 
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Nearly half of surveyed experts forecast quantitative easing in 2020: Finder

Brisbane housing market conditions firm as Sydney and Melbourne continue to strengthen: RBA November minutes

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EXPERT OBSERVER
As expected, the Reserve Bank Board decided to leave the cash rate unchanged at 0.75% at its November Board meeting.
While this result was what was widely expected today, markets had given a 50% probability of a rate cut following the move in October. Westpac was never convinced of that prospect and had pointed to the fact that central banks usually make very strong cases for a decision and markets can over interpret that sentiment. We were also concerned that very low interest rates were likely to adversely affect sentiment, as we saw in the response to the June and July rate cuts where the Westpac-MI Consumer Sentiment Index fell by 4.1%. Readers will be aware that following the October rate cut, the index fell by 5.5%.
For us, the most important aspect of the Governor’s November Decision Statement was the signalling around prospects for a cut in December. It has always been our view that policy would be unchanged in November and December, but when market pricing reached 50% for November, December pricing was around 90%.
There are two key signals to suggest that the Board will take a break in December as well. Firstly, the term “the Board will continue to monitor developments” was included in the final paragraph, with the term “monitor” implying no urgency to move. Secondly, the final paragraph also notes “the easing of monetary policy since June”. It is our experience that when central banks refer back to previous decisions, it is also unlikely that they plan to move in the near future.
However, we are mindful that the Board does not want the market to believe that it has reached the end of the easing cycle. That would put unwelcome upward pressure on the AUD. Consequently, there remains a very clear easing bias: “the Board… is prepared to ease monetary policy further if needed”.
As indicated in our preview to today’s RBA decision, we pointed out that it was unlikely that the RBA would change its forecast for 2020. The Statement refers to growth in 2019 at 2¼ per cent and gradually picking up to 3 per cent in 2021. That indicates that the current growth forecast of 2.8% in 2020, which was adopted in August, is likely to be retained in Friday’s Statement on Monetary Policy.
The growth forecast for 2019 has been lowered from 2½ per cent to 2¼ per cent. When the 2½ per cent forecast was made, the RBA was unaware of the “softish” 0.5% GDP growth for the June quarter. With the first half of 2019 totalling 1 per cent, the 2¼ per cent forecast implies two quarters of around 0.6% growth in the second half of 2019. Westpac expects 0.5% in the September quarter.
Other key themes remain unchanged from the October statement: global economy risks are tilted to the downside; the main domestic uncertainty continues to be the outlook for consumption; the unemployment rate is expected to remain around 5 ¼ per cent for some time, before gradually declining to a little below 5% in 2021; wages growth is expected to remain around the current rate for some time; and there are further signs of a turnaround in established housing markets, especially in Sydney and Melbourne.
Some additional insights are: other sources of uncertainty include the drought and the housing construction cycle; and the recent inflation data were broadly as expected.
Conclusion
There is nothing in this Statement that prompts us to revise our current forecast that rates will be on hold in December with the next and final rate cut occurring in February next year.
Following that move, the state of the economy will be such that further stimulus will still be required, without which an unwelcome lift in the Australian Dollar would pose a significant headwind for the RBA’s current forecast of return to trend growth in 2020. Under those circumstances, it seems reasonable that the RBA might move towards some unconventional measures to boost demand and retain downward pressure on the Australian Dollar
BILL EVANS is the Chief Economist at Westpac
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