<p>The enormity of delivering a true skyscraper in Australia's new development market is often overlooked.</p>

<p>It has taken the best part of a decade since plans for Chevron One were first unveiled, but the 52-storey tower is now complete, with residents collecting their keys and moving into what has become one of the Gold Coast's most recognisable new landmarks.</p>

<p>Rising 127 metres above Chevron Island, Chevron One stands almost twice as high as any other building on the island. Its scale places it alongside the trio of towers at Jewel, arguably the last truly significant addition to the central Gold Coast skyline when they were completed around six years ago.</p>

<p>While there are several developments underway around a similar height to Chevron One, they are more concentrated within clusters of the highest towers in the city. The fact Chevron One sits within a developing precinct, looking back at the other high-rise developments in Surfers Paradise and Broadbeach, makes it a different proposition altogether. It will certainly become a reference point on the Gold Coast skyline.</p>

<p>[smartcode_project:default project_id=6515 project_image_fid=68833]</p>

<p>Developer Bensons Property Group is behind the 52-storey tower, which has just shy of 250 apartments, along with an exhaustive list of resident amenity spread across what is the largest development site ever assembled on Chevron Island.</p>

<p>The tower has been the talk of the town for years, says Ray White Projects Gold Coast agent Caitlin Rosenboom, who is selling the remaining apartments.</p>

<p>"People have been watching Chevron One go up for years," Rosenboom says, adding that many prospective buyers have been surprised by the scale of the views once they step inside.</p>

<p>"It's only when they walk through a completed apartment that they truly understand the position of the building," Rosenboom says.</p>

<p>"The views are jaw-dropping. Whether you're looking east over the ocean, across Surfers Paradise, along the river systems or out to the hinterland, every level offers something different but equally impressive."</p>

<p>[smartcode_project:default project_id=6515 project_image_fid=360215]</p>

<p>One of Chevron One's defining advantages is its location on the eastern side of Chevron Island on Stanhill Drive, a position which protects the views forever.</p>

<p>"There's only one row of houses between Chevron One and the water, and the height restrictions along the river means views from Chevron One can never be built out,"&nbsp;Rosenboom says.</p>

<p>While new apartment developments continue to emerge across the Gold Coast, Rosenboom says opportunities to secure a completed apartment with this level of outlook are becoming increasingly rare.</p>

<p>"The size of the site is something that would be incredibly difficult to replicate today," she says.</p>

<p>"That's allowed Chevron One to deliver the sort of amenity, open space and resident facilities that very few projects can offer. There are not many completed apartment buildings on the Gold Coast right now that can compete with the combination of scale, quality and amenity."</p>

<p>[smartcode_project:default project_id=6515 project_image_fid=68839]</p>

<p>There's around 2,000 sqm of amenity solely for the use of residents of Chevron One. Club One features a uniquely shaped swimming pool that mirrors the footprint of the building itself, set within a extensively landscaped gardens. There's also an indoor pool and spa, a fully equipped gym with a Pilates room, a yoga garden, a bookable private dining area and lounge that can host up to 30 people, and a 24-hour concierge service.</p>

<p>As for the buyers, Rosenboom is fielding enquiry from everywhere: Sydneysiders and Melburnians looking at the new and off-the-plan market following the changes in the Federal Budget, as well as those looking to relocate, through to South East Queenslanders seeking either a permanent home or a weekender bolthole.</p>

<p>"The Gold Coast lifestyle continues to resonate with people relocating from the southern states, and when they see the views and the quality of what's been delivered at Chevron One, it becomes very easy for them to understand the appeal," Rosenboom says.</p>

<p>A diverse mix of one, two and three-bedroom apartments remain available, with each offering "something a little different", be it the orientation and views, configuration, or level, to suit a wide variety of buyers.</p>

<p>The remaining apartments are ready to inspect in person, by appointment.</p>

<p>[smartcode_project_cta:default project_id=6515]</p>


Joel Robinson

A decade in the making: Residents to move into Chevron One as construction wraps up

<p>A general rule of thumb in new apartment developments is that the penthouses get the rooftop.</p>

<p>It's a formula that's become commonplace across Australia's apartment market. Residents might have access to a pool, gym or barbecue facilities on a dedicated lower level, but the most desirable outdoor spaces are typically reserved for the highest-priced homes at the top of the building.</p>

<p><a href="https://www.apartments.com.au/developers/sherpa-property-group">Sherpa Property Group</a> has taken the opposite approach.</p>

<p>Rather than dedicating the rooftop to a handful of buyers, the Gold Coast developer has made it the centrepiece of its Flourish collection, creating expansive shared spaces from the best vantage point in the building.</p>

<p>The philosophy has reached its most ambitious expression at <a href="https://www.apartments.com.au/new-apartments/flourish-soleira-palm-beach-1150-1160-gold-coast-highway-palm-beach-qld-4221">Flourish Soleira</a> in Palm Beach, where two rooftop precincts connected by a skybridge will deliver one of the most extensive lifestyle offerings seen in a residential apartment project on the Gold Coast.</p>

<p>[smartcode_project:default project_id=150017 project_image_fid=374053]</p>

<p>"We're seeing a clear move toward developments that offer more than just an apartment," Sherpa Group founder Christie Leet said.</p>

<p>"People want spaces that support how they actually live, whether that's working from home, staying active, or spending time with family and friends.</p>

<p>"That's where amenity becomes critical. It's not just about what's included, but how those spaces are designed to be used every day."</p>

<p>[smartcode_project:default project_id=150017 project_image_fid=374052]</p>

<p>The breadth of amenity has already attracted buyers across multiple demographics. Younger first home buyers have been drawn to Soleira's one-bedroom apartments, a product rarely delivered in Palm Beach, while families have responded to practical inclusions such as the shallow children's pool adjoining the main lap pool and the extensive communal recreation areas.</p>

<p>Instead of a single rooftop, Soleira delivers two distinct lifestyle zones.</p>

<p>[smartcode_project:default project_id=150017 project_image_fid=372547]</p>

<p>The southern rooftop has been dedicated to wellness, featuring a gym, yoga and Pilates studio, work-from-home facilities, a wellness centre, spa, and hot and cold plunge pools.</p>

<p>The northern rooftop focuses on recreation and entertaining, incorporating a heated resort-style pool, private dining rooms, pizza ovens, barbecues, a golf simulator, children's recreation areas, and what is expected to be the Gold Coast's first rooftop basketball court, which will also double as a squash court.</p>

<p>[smartcode_project:default project_id=150017 project_image_fid=374054]</p>

<p>Beyond the rooftops, Soleira will introduce 1,500 sqm of curated retail beneath the towers, creating one of Palm Beach's first genuinely mixed-use lifestyle precincts where cafés, restaurants and convenience retail become part of residents' everyday lives.</p>

<p>Sherpa has also retained management rights across the development, allowing it to oversee the long-term operation of the building through a 24-hour concierge model. The developer is also exploring additional revenue streams within the precinct aimed at helping offset ongoing body corporate costs for residents.</p>

<p>[smartcode_project:default project_id=150017 project_image_fid=370962]</p>

<p>While Soleira is the largest project Sherpa has delivered, the rooftop-first philosophy has been evolving for several years.</p>

<p>It began with <a href="https://www.apartments.com.au/new-apartments/amargo-6-12-sixth-avenue-palm-beach-qld-4221">Flourish Amargo</a>, the first project released under the Flourish brand. Rather than competing at the ultra-luxury end of the market with oversized half-floor and full-floor residences, Sherpa focused on creating lifestyle-driven apartments supported by resort-style shared spaces.</p>

<p>Amargo introduced more than 800 sqm of rooftop amenity, combining wellness facilities, heated pools, entertaining areas, cabanas, pizza ovens and private dining spaces into what was designed as an extension of residents' homes rather than a facility used only occasionally.</p>

<p>[smartcode_project:default project_id=146527 project_image_fid=366550]</p>

<p>That approach continued with Flourish Oasis, where the same amenity-led philosophy was refined into a more boutique development. Strong demand from Sherpa's growing VIP database saw much of the project sold before it reached the broader market, reinforcing buyer appetite for apartment communities centred around shared lifestyle experiences.</p>

<p>Flourish Amargo is slated for completion mid-way-through next year, with Oasis to be delivered by late 2027. Flourish Soleira is expected to complete in 2030.</p>

<p>[smartcode_project_cta:default project_id=150017]</p>


Sherpa takes amenity to the sky as Flourish Soleira captures booming Palm Beach demand

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


Elevated amenity anchors daily life at Aeris, Melrose Park

<p>Repeat buyers are one of the strongest measures of confidence in any apartment development.</p>

<p>At <a href="https://www.apartments.com.au/new-apartments/era-newcastle-west-124-126-bull-street-newcastle-west-nsw-2302">ERA</a> in Newcastle West, some purchasers are returning to <a href="https://www.apartments.com.au/developers/gwh">GWH</a> after living at the developer's One Apartments. Their decision to purchase again was driven by the quality of life they found after moving into their first GWH home.</p>

<p>Keith Wilton had spent years living in a house in East Maitland before deciding it was time for a change. Apartment living had always been on his radar, but he was selective about what he wanted.</p>

<p><iframe allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" allowfullscreen="" frameborder="0" height="315" referrerpolicy="strict-origin-when-cross-origin" src="https://www.youtube.com/embed/FH_1EzB-1vs?si=XScVlP1ERsTDJoME" title="YouTube video player" width="560"></iframe></p>

<p>"I had some boxes I wanted to tick," he says.</p>

<p>Keith points to the open-plan design, generous outdoor areas and considered inclusions as key reasons One Apartments worked for him.</p>

<p>“One of those things was a nice indoor open plan area, but also I wanted a nice outdoor open area that I could entertain on in summer or Christmases or birthdays,” he says.</p>

<p>He also found value in the smaller details, from integrated appliances to shared resident spaces including the pool, cinema and rooftop areas.</p>

<p>[smartcode_project:default project_id=135096 project_image_fid=356818]</p>

<p>After comparing several developments, he chose One Apartments because of GWH's longstanding local reputation and his own experience working with the developer on a commercial project more than a decade earlier.</p>

<p>"I knew that they were local, that the quality of the build was going to be up there. I'd looked at other apartment complexes around and close by, and I just knew that here was a better decision location wise."</p>

<p>Today, Keith says the move has completely changed how he experiences Newcastle.</p>

<p>"I enjoy living in this location because it's more of a lifestyle change. That Newcastle city living where you can walk to restaurants and bars and even beaches and parks and even shopping across the road."</p>

<p>[smartcode_project:default project_id=135096 project_image_fid=356828]</p>

<p>Beyond the location, he says it's the sense of community that has surprised him most.</p>

<p>"Everyone loves living here because they chose to live here, but everyone looks out for each other. It's a real great community feel here."</p>

<p>For Aimee and Lyle Goodman, the journey started almost by chance.</p>

<p><iframe allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" allowfullscreen="" frameborder="0" height="315" referrerpolicy="strict-origin-when-cross-origin" src="https://www.youtube.com/embed/tsioMLcnjas?si=zq-ys3JuWpfa5hFv" title="YouTube video player" width="560"></iframe></p>

<p>The couple happened to be having coffee in Newcastle when they noticed the site where One Apartments was about to begin construction.</p>

<p>"We were aware GWH was planning a development," Aimee says. "We made one phone call and things moved pretty quickly after that."</p>

<p>As busy business owners, they initially thought apartment living would simply reduce the maintenance that came with larger homes. Instead, it fundamentally changed how they spent time together.</p>

<p>"We actually catch up more as a family now," Aimee says.</p>

<p>"We've had homes with big yards and lots of space, but everyone ended up in different rooms. Here we'll have dinner together, the kids can play, and we spend far more quality time together."</p>

<p>[smartcode_project:default project_id=135096 project_image_fid=356829]</p>

<p>Lyle says their confidence came from GWH's reputation within Newcastle's building industry.</p>

<p>"I know people who've worked across different apartment projects, and whenever GWH came up the feedback was always the same. They're rock solid. They're quality."</p>

<p>That confidence only grew throughout the buying process.</p>

<p>"One of the things that really impressed us with GWH was the whole process, was the communication," Lyle says. "It was consistent, it was regular, there was no problem if we had some weird questions, there was no problems in getting answers."</p>

<p>[smartcode_project:default project_id=135096 project_image_fid=351104]</p>

<p>Aimee says one moment stood out.</p>

<p>"The project actually finished on time. We realised we needed to hurry up and sell our house because everything was happening exactly when they said it would."</p>

<p>The positive experience at One Apartments ultimately gave all three buyers the confidence to purchase again with GWH, this time at ERA.</p>

<p>Their confidence reflects what many buyers are seeking in today's apartment market. Location remains important, but so too does certainty around delivery, quality and long-term liveability.</p>

<p>[smartcode_project:default project_id=135096 project_image_fid=356822]</p>

<p>ERA builds on those foundations with 280 one, two and three-bedroom apartments across two landmark towers in <a href="https://www.apartments.com.au/developments/newcastle-west-nsw-2302">Newcastle West</a>.&nbsp;</p>

<p>Designed by <a href="https://www.apartments.com.au/architects/fk-australia">Fender Katsalidis</a>, the project will include more than 2,000 square metres of resident amenities, including a resort-style pool, gym, sauna, private cinema and rooftop entertaining spaces overlooking the harbour and coastline.&nbsp;</p>

<p>The development is also within walking distance of the Newcastle Interchange, Honeysuckle, Darby Street, the harbour foreshore, restaurants, retail and the city’s beaches, continuing the walkable lifestyle that existing GWH buyers say has transformed how they live.</p>

<p>[smartcode_project:default project_id=135096 project_image_fid=356826]</p>

<p>For Keith, the appeal remains straightforward.</p>

<p>"You feel at home even before you've moved into your home."</p>

<p>For Aimee, the change is measured in time.</p>

<p>“I just felt like I had more time,” she says.</p>

<p>[smartcode_project:default project_id=135096 project_image_fid=351102]</p>

<p>Construction at ERA is now underway, with more than half of the residences already sold and limited two and three-bedroom apartments remaining in the East Tower release. Priced from $980,000 for two-bedroom residences and $1.46 million for three-bedroom residences, buyers can secure an apartment with a 10 per cent deposit, with premium homes offering ocean views from Level 8 and harbour views from Level 10.</p>

<p>ERA is also backed by Resilience Insurance's 10-year Latent Defects Insurance policy, providing protection against structural or waterproofing defects for 10 years after completion. The project is anticipated to be completed in early 2028.</p>

<p>[smartcode_project_cta:default project_id=135096]</p>


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

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


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

Rba Rate Decision

<html><body>
<p>EXPERT OBSERVER</p>
<p>As widely expected the RBA left the cash rate on hold at 0.75% at its November board meeting.</p>
<p>While we thought a rate cut was justified, recent commentary from the RBA had suggested little urgency on its part so today’s on hold decision was not surprising. </p>
<p>The post meeting Statement was a little bit more upbeat referring to: a scaling back in market expectations for interest rate cuts globally; a “gentle turning” point in the local economy; expectations for growth to pick up to 3% by 2021, recent inflation data being broadly as expected; and further signs of a turnaround in the established housing market.</p>
<p>However, while the RBA still sees growth picking up to around 3% in 2021, it has yet again downgraded its growth expectation for this year to “around 2.25%” from 2.5% in August. And don’t forget that a year ago it expected growth this year of 3.25%.</p>
<p>Apart from maybe feeling a bit more upbeat, the RBA probably also decided to pause in easing to give tax and rate cuts to date more time to work. But it’s interesting that it made no reference to September’s very weak retail sales report which along with continuing weak car sales suggests very little boost to consumer spending from the tax and rate cuts so far.</p>
<p><span>The final paragraph of the RBA’s post meeting Statement repeats that its “reasonable to expect that an extended period of low interest rates will be required” and that “The Board will continue to monitor developments, including in the labour market, and 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.” Quite clearly the RBA retain an easing bias.</span></p>
<p><span>Based on the US experience which has required unemployment and underemployment to fall to 7% just to get wages growth of 3% year on year, full employment in Australia probably means unemployment around 3.5-4% and underemployment around the same level so we have a long way to go!</span></p>
<p><span>As a result, we remain of the view that further RBA monetary easing will be required and is likely. Growth is still likely to remain subdued and below trend for longer than the RBA is allowing. This will keep unemployment higher for longer and wages growth and inflation below target for longer. Consequently, more easing will be required to achieve full employment and clear progress to the inflation target. What’s more inflation has been running below target for more than four years now and the longer this is allowed to persist the more the inflation target will lose credibility and won’t be the “strong nominal anchor that people can rely on when making their decisions” that Governor Lowe has stated the Board is seeking to provide.</span></p>
<p><span>Ideally more fiscal stimulus is required (such as a bring forward of the stage 2 tax cuts, a boost to Newstart, inducements to large companies to investment more and increased infrastructure spending where possible) as this would give a bigger bang for the buck and could be more fairly targeted. But in the absence of more fiscal stimulus, pressure remains on the RBA for further easing. We continue to see the cash rate being cut to a low of 0.25% in December and February but this could also come with quantitative easing measures designed to lower bank funding costs and increase the banks’ pass through of rate cuts to borrowers.</span></p>
<p><span>The RBA’s forward guidance is also likely to be toughened in the next few months to say something along the lines that the RBA “doesn’t expect to consider raising interest rates until inflation is near the mid-point of the 2-3% inflation target.”</span></p>
<p><strong>Meanwhile, Treasurer Josh Frydenberg’s decision to make no changes to the RBA’s inflation target and the broader Statement on the Conduct of Monetary Policy of which it is a part makes sense</strong><span>. </span></p>
<p><span>The interpretation of meeting the inflation objective as being “on average” and “over time” has served Australia well and has contributed to the relative stability of the Australian economy. To lower the inflation target to 1-3% as some were arguing should occur would have blown its credibility, pushed the $A up sharply and boosted the risk of deflation and falling wages which is the last thing we want given high household debt levels. Making the target stricter – by requiring say a BoE style letter each time the target is breached – could force the RBA to become inflation nutters. So thankfully it remains unchanged.</span></p>
<p><span>The only thing now is to get inflation back to target “on average” and “over time.”</span></p>
<p><span><em><strong>SHANE OLIVER</strong> is the Chief Economist for AMP Capital<br></em></span></p>
</body></html>

soliver-smf6LQXgW9

More RBA easing may be necessary in the future: Shane Oliver

<html><body>
<p>EXPERT OBSERVER</p>
<p>Some positive signs for the economy and a push by the federal government for banks to relax lending standards for small business will allow the Reserve Bank of Australia (RBA) to take a break from cutting official interest rates.</p>
<p>With the cash rate reduced to a record low of 0.75 per cent, the RBA may have done enough for the time being to help boost consumer confidence despite disappointing September retail sales figures.</p>
<p>Having confident consumers is a major contributor to an economic turnaround and the domestic economy is still showing signs of improvement. </p>
<p>It is good to see the Government talking to the banks about the way they have been applying the responsible lending guidelines to small and medium-sized enterprises. By supporting more lending and our SMEs we should see positive signs of further economic improvement.</p>
<p>In this environment there is no real need for the RBA to do much more until they get a better view of the economy into the first quarter of next year.</p>
<p>It will be good to see consumers break the shackles and start spending again in the lead up to Christmas. Hopefully the central bank’s rate reductions have helped give consumer confidence a boost.</p>
<p>I urge mortgage holders to regularly review their home loans to ensure they were getting the best possible deal.</p>
<p>Mortgage holders should never be complacent about their home loan.</p>
<p>While interest rates are at historic lows, lenders are willing to battle for your business. Contact a mortgage broker to make sure you are getting the best terms possible and, most importantly, save money.</p>
<p>John Kolenda is the managing director at <a href="https://www.finsure.com.au/" target="_blank">Finsure</a>.</p>
<p> </p>
<p><span> </span></p>
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jrobinson-rf4aSBido9

RBA can take a summer holiday: Finsure's John Kolenda

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<p>EXPERT OBSERVER</p>
<p>The Reserve Bank has left the cash rate at a record low of 0.75 per cent.</p>
<p><em>What has changed since the last meeting?</em></p>
<p>- The Consumer Price Index rose by 0.5 per cent in the September quarter; annual rate 1.7 per cent.<br>- The Australian jobless rate fell from 5.3 per cent to 5.2 per cent in September.<br>- The CoreLogic national home price index rose by 1.2 per cent in October.<br>- Retail trade rose 0.2 per cent in September.<br>- Real retail trade fell by 0.1 per cent in the September quarter.<br>- The US Federal Reserve cut the federal funds from 2 per cent to 1.75 per cent.<br>- Job ads fell by 1.0 per cent in October.<br>- Tax refunds totalled $20 billion in the three months to September.<br>- The Australian dollar has generally held around US67o 69 cents.<br>- The US and China are reportedly progressing on a ‘Phase 1’ trade deal.<br>- UK to face a December election; Brexit date now January 31.<br>- US sharemarkets hit record highs.</p>
<p><strong>The Assessment</strong></p>
<p>The Reserve Bank has refreshed its views, commentary and forecasts. Overall, the tone of cautious optimism is maintained as is the easing bias. But the Reserve Bank doesn’t seem to be setting the stage to act on the easing bias by cutting rates again in December. The next opportunity to cut rates is February 2020 after the Reserve Bank assesses economic growth, inflation, unemployment and inflation data.</p>
<p>The Reserve Bank has given its customary ‘sneak peek’ at its latest forecasts. The jobless rate is tipped to remain near 5.25 per cent for some time. Similarly inflation is not expected to budge from near 2 per cent, actually through to 2021. Economic growth is tipped to lift to around 2.25 per cent this financial year and then to 3 per cent in 2021.</p>
<p>Inflation is edging slowly towards the Reserve Bank’s 2o 3 per cent target zone. The Reserve Bank Board believes this progress will continue. The Federal Treasurer has expressed his support for maintaining the target band and made no change to the Statement on the conduct of Monetary Policy.</p>
<p><strong>Perspectives on interest rates</strong></p>
<p>The Reserve Bank has left the cash rate at 0.75 per cent after cutting rates in June, July and October, each by 25 basis points. There have now been 15 rate cuts since November 2011 with the cash rate cut from 4.75 per cent.</p>
<p>Previously rates rose seven times from October 2009 to November 2010 from 3.00 per cent to 4.75 per cent.</p>
<p><strong>What are the implications of today’s decision?</strong></p>
<p>The Reserve Bank Governor continues to express optimism, saying that the economy has reached a ‘gentle turning point’. Home prices have certainly lifted since the election, especially in Sydney and Melbourne. Encouragingly employment continues to grow, lifting purchasing power in the economy.</p>
<p>The labour market and consumer spending will remain in the spotlight. Overseas, the US-China trade talks and Brexit will dominate attention. The Reserve Bank is expected to leave the cash rate unchanged until at least early 2020.<strong><em><br></em></strong></p>
<p><strong><em>CRAIG JAMES </em></strong><em>is the Chief Economist at CommSec</em></p>
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RBA retains tone of cautious optimism for Australian Economy: CommSec's Craig James

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<p>At its meeting today, the Board decided to keep the cash rate on hold at 0.75 per cent.</p>
<div>
<div class="rss-mr-content">
<p>While the outlook for the global economy remains reasonable, the risks are tilted to the downside. 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.</p>
<p>Interest rates are very low around the world and a number of central banks have eased monetary policy in response to the persistent downside risks and subdued inflation. Expectations of further monetary easing have generally been scaled back over the past month and financial market sentiment has improved a little. Even so, long-term government bond yields are around record lows in many countries, including Australia. Borrowing rates for both businesses and households are also at historically low levels. The Australian dollar is at the lower end of its range over recent times.</p>
<p>The outlook for the Australian economy is little changed from three months ago. After a soft patch in the second half of last year, a gentle turning point appears to have been reached. The central scenario is for the Australian economy to grow by around 2¼ per cent this year and then for growth gradually to pick up 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 in some markets 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.</p>
<p>Employment has continued to grow strongly and has been matched by strong growth in labour supply, with labour force participation at a record high. The unemployment rate has remained 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 remains 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.</p>
<p>The recent inflation data were broadly as expected, with headline inflation at 1.7 per cent over the year to the September quarter. The central scenario remains for inflation 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.</p>
<p>There are further signs of a turnaround in established housing markets, especially in Sydney and Melbourne. 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.</p>
<p>The easing of monetary policy since June is supporting employment and income growth in Australia and a return of inflation to the medium-term target range. Given global developments and the evidence of the spare capacity in the Australian economy, it is 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 will continue to monitor developments, including in the labour market, and 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.</p>
</div>
</div>
<div class="box-enquiries"> </div>
<p> </p>
<p> </p>
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Established housing turnaround: RBA Governor Philip Lowe's November 2019 meeting statement

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<p>The Reserve Bank have decided to leave the cash rate on hold at a historic low 0.75 per cent.</p>
<p>It <a href="/expert-insights/finance/established-housing-turnaround-rba-governor-philip-lowes-november-2019-meeting-statement">noted a further turnaround in established housing</a>, particularly in Sydney and Melbourne.</p>
<p>The decision comes after a month of some positive news for the Reserve Bank, namely in unemployment which <a href="/news/rba-breathe-sigh-of-relief-as-seasonally-adjusted-unemployment-nudges-lower">dropped back to 5.2 per cent</a>.</p>
<p>Last weeks slight inflation uptick was <a href="/expert-insights/investing/inflation-rate-creeps-towards-rba-target-zone-commsec">further good news for the RBA</a>.</p>
<p>CoreLogic's head of research Tim Lawless said the decision to hold rates was widely anticipated given the RBA is running out of conventional monetary policy ammunition.</p>
<p>"The decision to keep rates on hold was supported by the latest labour market and inflation readings, which saw the national unemployment rate nudge lower, while annual headline inflation edged slightly higher," Lawless said.</p>
<p>"Additionally, a rebound in housing values and a rise in buyer activity will hopefully begin to flow through to a gradual improvement in household wealth and spending. </p>
<p>Lawless suggested the RBA will be carefully monitoring other indicators which have continued to lose momentum such as consumer confidence, residential construction activity and retail spending. </p>
<p>"One of the negative side-effects of such historically low interest rates is that Australian households and businesses are reading through the low rate setting and becoming less confident about their household finances and the outlook for the economy, which is offsetting some of the stimulatory benefits of historically low interest rates. </p>
<p>"Although the cash rate has remained on hold, lenders are becoming increasingly competitive, particularly for high quality borrowers – ie those with low debt relative to their incomes and a responsible track record of savings together with expenses that are in line with their incomes. </p>
<p>"No doubt the lowest mortgage rates since at least the 1950’s and improved access to credit following APRA’s decision to adjust the interest rate serviceability floor are contributing to a rebound in housing market conditions. </p>
<p>"While the improved housing market conditions are a positive for broader economic conditions, an increase in speculative activity from property investors or a slip in the quality of lending standards could be the trigger for a new round of macro-prudential policies aimed at maintaining prudent lending standards and keeping a lid on further accrual of housing related debt.</p>
<p>Finder.com.au's RBA Cash Rate Survey saw all of its 38 experts predict a rate hold at today's meeting, however two thirds of the experts surveyed believed the cash rate will drop to 0.5 per cent in February 2020.</p>
<p>Only 21 per cent think there will be a cut in December.</p>
<p>Sally Tindall, research director at RateCity, says that despite there being no movement this month, another rate cut is still very much on the cards for the future: </p>
<p>"When you look at the big 4 banks, on average their 3-year fixed rates are a quarter of a percent lower than their lowest variable rates, which is a strong indication the cash rate will continue to fall," Tindall said.</p>
<p>"In fact, the market is expecting rates will remain low for very long time. Five year fixed rates have hit an all time low of 2.74% while variable rates are as low as 2.69%.</p>
<p>"But these rates are reserved for new customers so if you want to take advantage of this, you might have to turn yourself from an existing customer into a new one."</p>
<p>Shane Oliver, chief economist at AMP Capital, says the are still expecting an easing in December and February.</p>
<p>"<span>With growth likely to remain subdued and the econ a long way from full employment further easing is needed," Oliver tweeted.</span></p>
<p><span>"So in the absence of significant fiscal stimulus soon we still expect another easing in Dec &amp; Feb."</span></p>
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RBA holds interest rates at November Cup Day meeting

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<p>There's an increasing number of consumers who think now is a good time to buy property, however Finder.com.au's RBA Cash Rate Survey found experts and economists weren't so sure.</p>
<p>In April 2019, nearly 60 per cent of experts reported positive sentiment about housing affordability in Australia, however that number has now dropped to 17 per cent. </p>
<div><strong id="docs-internal-guid-c802fc80-7fff-e67d-e999-b8d7117cba26"><img src="https://lh5.googleusercontent.com/14mfL2vxFbPOJ3cFpZOa6i62wsnie6nBWosnmUPQHx3uQibyOWzOFucfx1Z0dBHBKXm7J4Th7ODSM1BoAF3Y9Y1q2A4DUrCEZs-ImIKUnHVcrQjX5fXYYxQeWvVFfI2hZu1CdbyQ" width="602" height="416"></strong></div>
<div><strong> </strong></div>
<div>Graham Cooke, insights manager at Finder, said economists clearly haven’t been persuaded by this year’s three RBA rate cuts when it comes to housing.</div>
<div> </div>
<div>“Housing affordability cuts both ways. When it is high or economists feel positive, property prices can be relatively low meaning more Aussies have a chance to buy," Cooke said.</div>
<div> </div>
<div>"The flipside of course is home values might be trending in the wrong direction and no one wants to catch a falling knife.</div>
<div> </div>
<div>“When housing affordability is low or economists feel negative, the cheery news is that property values are on the way up, but unfortunately it also means that those ready to buy might not be getting a bargain,” Cooke said.</div>
<div> </div>
<div>Peter Boehm of KVB Kunlun said the RBA cuts are actually doing more harm than good.</div>
<div> </div>
<div>"House prices have been increasing (making it harder for first time buyers to get into the market), existing mortgage holders are maintaining repayments at current levels to help reduce their debt quicker, and therefore not spending this "freed up" cash," Boehm said.</div>
<div> </div>
<div>“There's been little or no impact on the unemployment rate, corporate investment has not rebounded, business confidence is low, and the continuing reduction, and signalling of future rate reductions is sending negative messages to consumers about their economic outlook,” Boehm said.</div>
<div> </div>
<div>Despite this lack of faith from economists, consumer sentiment is on the uptick.</div>
<div> </div>
<div>The Finder Consumer Sentiment Tracker™ – established in May 2019 – surveys more than 1,000 Australians each month and among other things, asks consumers a simple yes or no question: do they believe now is a good time to buy property?</div>
<div> </div>
<div>In October, 59% agreed it was a good time to buy property, up from 54% in May.</div>
<div> </div>
<div><strong id="docs-internal-guid-5297ecab-7fff-f2b9-8c6b-de54502d1961"><img src="https://lh3.googleusercontent.com/425R06iHRsilioYVuEpEucV9KGYoEYe2-EU7-VP3lhxeAdb_0kZVcNscMt3VBCTvzJPZk88zH7DZv0jjK_WGUfBYpL5-yKvbQd5GRt2fvc-idwF-yvR4t3BubeiTKaKDez8x9GKQ" width="602" height="333"></strong></div>
<div><strong> </strong></div>
<div>Cooke said consumers are likely responding to the positive news they are seeing about house prices in Australia.</div>
<div> </div>
<div>“Buying property is still considered ‘safe as houses’ in Australia, but it’s taken with a grain of salt in many countries since the global financial crisis.</div>
<div> </div>
<div>“House prices don’t always rise and the economy doesn’t always perform well.</div>
<div> </div>
<div>“We’re seeing house prices now increasing fairly consistently, while other economic factors have not really improved.“This shows that the surge in prices is likely due to cheaper borrowing from three RBA cuts of 2019, rather than an indication of an improving economy,” Cooke said.</div>
<div> </div>
<div>“Nobody knows what’s around the corner, but the chances that this price boost is a dead-cat-bounce seems less and less likely as prices continue to recover,” Cooke added.</div>
<div> </div>
<div>“First time buyers with a deposit saved<span class="Apple-converted-space"> </span>may miss the good-value window if they don’t get into the market soon.</div>
<div> </div>
<div>“If we keep seeing prices increase as dramatically as they’re doing now, the market will have fully recovered within a year,” he said.</div>
<div> </div>
<div>Cooke said the key for anyone looking to save a deposit is to maximise their savings.</div>
<div> </div>
<div>“You’ll find better ongoing rates with smaller banks such as UBank and ING and neobanks such as 86 400 and Up than you will with the bigger banks. A little bit of homework can go a long way to boosting your deposit,” he said.</div>
<div><strong><span> </span></strong></div>
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wdavis-8cCN98p7xp

Is it time to buy property? Consumers keen, but experts not so sure: Finder

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<p>EXPERT OBSERVER</p>
<p>The Reserve Bank Board meets on November 5 next week.</p>
<p>There is little chance that the Board will decide to cut the cash rate at that meeting.</p>
<p>Westpac confirms its forecast which was “refreshed” on July 24 that the Board would cut the rate by 25 basis points at the October meeting (done) and the February meeting in 2020.</p>
<p>Markets are pricing in a probability of a miniscule 4% for a November move.</p>
<p>However it was not always like that.</p>
<p>Back on October 4, I wrote, “we cannot concur with the markets pricing in a 50% probability of a follow up move in November".</p>
<p>There are a number of reasons for this caution.</p>
<p>Firstly, markets should understand that central banks will usually bias their comments on days on which they make policy changes to justify the decision. We saw some examples of that approach in the Governor’s Statement.</p>
<p>For example, he has, for no reason that is justified by the data, adopted a bolder objective than had been the case before by aiming for “full employment” rather than the more modest, “reduce unemployment” that we saw in September.</p>
<p>With the unemployment rate trending away from his full employment target and, by his own admission, "forward-looking indicators of labour demand indicate that employment growth is likely to slow from its recent fast rate" the introduction of that full employment target as a substitute for the more realistic “reduce unemployment” seems curious and is probably less significant than markets may have assessed.</p>
<p>We also think the RBA will be mindful of the response of the Westpac Melbourne Institute Consumer Sentiment Index to the consecutive cuts in June/July. Following the cut in July the Index fell by 4.1%. There was an apparent “spooking” of the consumer around the policy action.</p>
<p>With the RBA seeing the consumer as the key to the growth outlook, a “back to back” series of rate cuts leaving limited scope to cut further and risking a similar response from the consumer would counsel against that November move.”</p>
<p>Since that note we saw the Westpac MI Consumer Sentiment Index fall by 5.5% in response to the October rate cut, providing further evidence of the fragility of Confidence to low rates.<br>Under such circumstances consecutive rate cuts would seem to be a significant policy mistake.</p>
<p>Apart from the arguments I put forward on October 4 we have also seen an absence of downside surprises in both the Employment and Inflation reports with both the unemployment rate falling modestly from 5.3% to 5.2% and the trimmed mean annual inflation rate holding steady at 1.6%.</p>
<p>Looking further out, markets have turned against prospects for a December rate cut with probabilities falling from 80% back on October 4 to 25%.</p>
<p>We concur with that assessment but are surprised that market pricing for February has tumbled from 100% on October 4 to 50% today.</p>
<p><em>Read full report <a href="https://westpaciq.westpac.com.au/wibiqauthoring/_uploads/file/Australia/2019/November/er20191101BullRBAonHoldNov.pdf">'RBA on hold in November' (PDF 73kb)</a></em></p>
<p><em><strong>BILL EVANS </strong>is the Chief Economist at Westpac<br></em></p>
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RBA on hold in November, 2020 growth and inflation forecasts unchanged: Bill Evans

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<div class="storysegment2 segmentContentFull">
<p>Dubbed the “rate cut whisperer­” for his foresight in tipping RBA moves, Westpac chief economist Bill Evans says there will be no Melbourne Cup Day rate cut.</p>
<p>Despite the downbeat economic climate, Evans says the Reserve Bank of Australia will sit on their hands tomorrow.</p>
<p>“There is little chance that the board will decide to cut the cash rate,” Evans (below) advised­ Westpac clients.</p>
<p>While few economists think there is any probability of a November move, Evans said he was “surprised” that the market pricing for a February cut had recently tumbled.</p>
<p>His next forecast rate cut — the fourth since June — is for the February 2020 meeting, when Evans fears the unemployment rate will be trending away from the central bank’s full employment target.</p>
<p>He said the RBA was “mindful” of the recent movement in the Westpac Melbourne Institute Consumer Sentiment Index.</p>
<p>The index suggests that, following the consecutive rate cuts in June/July, there had been an ­apparent “spooking” of retail consumers.</p>
<p>While most economists had stridently tipped interest rates to be on hold during 2019, Evans was the first of the big bank economists to break from the pack in ­seeing the need for rate cuts.</p>
<p>Evans has maintained for several months that “there is ample evidence” that the economy is weak.</p>
<p>“But this is not a ­recession with the associated extreme pain for households, businesses and institutions, as experienced in the early 1990s, and 1974 and 1982-83 before that,” he said.</p>
<p>“Fiscal policy has considerable scope to act quickly if the recession signals strengthen; there will be a Budget surplus in 2019-20 and debt-to-GDP ratio at the federal level is low.”</p>
<p>Evans, who joined Westpac as the chief economist in 1991, had previously worked in the RBA’s research ­department.</p>
<p>Meanwhile, Sydney’s weekend auction clearance rate dipped to 79 per cent — the first time below 80 per cent since late September.</p>
<p>There were 672 auctions with 510 results captured and 404 properties sold.</p>
<p>Agents say there have been few signs of obvious hesitancy in the market where 16,000 properties have changed hands since spring began.</p>
<p>“Sydney has been the strongest capital city over the past quarter,” realestate.com.au chief economist Nerida ­Conisbee noted, tipping that “the supply-demand imbalance is reflective of an early cycle that will lead to strong price rises in premium suburbs”.</p>
<p>Last month Conisbee said: “The current correction looks like it is coming to an end. Nervousness about access to finance was the main factor driving a complete shift in sentiment towards ­housing.”</p>
<p>This article was first published in the Daily Telegraph.</p>
<p> </p>
</div>
<p> </p>
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jchancellor-FAypfDUnLy

Bill Evans, the rates ‘whisperer’ says the best bet is no RBA Cup Day cut

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<p>EXPERT OBSERVER</p>
<div><strong><span style="text-decoration: underline;">Market mispricing?</span></strong></div>
<div> </div>
<div>If you'll kindly indulge a Tuesday night blog post after an evening talking, um, Australian monetary policy at the Clock Hotel (n.b. soft drinks only!), then herewith it follows. </div>
<div> </div>
<div>One week ago the October 2019 RBA Minutes were released, and they stated that, if needed, policy would be eased further <em><strong>to achieve full employment and the inflation target. </strong></em>
</div>
<div> </div>
<div class="separator"><a href="https://1.bp.blogspot.com/-DRBZQLy3u2w/Xa7Rmuaj5lI/AAAAAAAAyb0/9eymjiILxfw9dfOchYSpgYfk1z-bP_JdgCNcBGAsYHQ/s1600/RBA4.jpg"><img src="https://1.bp.blogspot.com/-DRBZQLy3u2w/Xa7Rmuaj5lI/AAAAAAAAyb0/9eymjiILxfw9dfOchYSpgYfk1z-bP_JdgCNcBGAsYHQ/s640/RBA4.jpg" width="640" height="202" data-original-height="263" data-original-width="831"></a></div>
<div> </div>
<div><em><span style="text-decoration: underline;">Source: RBA</span></em></div>
<div> </div>
<div>Then on October 18 the RBA Governor delivered a designedly upbeat speech to the IMF in Washington, which justifiably highlighted Australia's record unbroken stretch of economic growth among other Antipodean successes (including the floating currency, which often - though not always - moves in harmony with commodity prices). </div>
<div> </div>
<div>I didn't listen to the audio live, but while we don't need to link to all of the media pieces, across the board we saw a rash of articles suggesting that the RBA is done with cutting and has hosed down the prospect of further cuts.<br><br>A bit odd, it seemed.<br><br>
</div>
<div class="separator"><a href="https://1.bp.blogspot.com/-yOb6CoNIbAM/Xa7QjD8vWaI/AAAAAAAAybg/bQhRxx6datcUorhTVySG840RkCNgvS_ZACEwYBhgL/s1600/rba.jpg"><img src="https://1.bp.blogspot.com/-yOb6CoNIbAM/Xa7QjD8vWaI/AAAAAAAAybg/bQhRxx6datcUorhTVySG840RkCNgvS_ZACEwYBhgL/s640/rba.jpg" width="640" height="594" data-original-height="687" data-original-width="738"></a></div>
<div class="separator"> </div>
<div class="separator"> </div>
<div>I'll come back to this point, but I broke one of my own golden rules here: at the risk of sounding like an episode of <em>Yes, Prime Minister,</em> always listen to what was actually said, not what was said about what was being said!</div>
<div> </div>
<div><strong><span style="text-decoration: underline;">Inflation smoked</span></strong></div>
<div> </div>
<div>The latest employment figures were <a href="https://petewargent.blogspot.com/2019/10/the-gentlest-of-turning-points" target="_blank">modestly positive</a>, but the leading indicators are weakening and there was no indication that labour force slack will be reduced significantly, or that full employment will be on the horizon any time soon. </div>
<div> </div>
<div>Unemployment was still uppish at 5.2 per cent, and the underemployment rate remained <a href="https://petewargent.blogspot.com/2019/10/the-gentlest-of-turning-points" target="_blank">way high at 8.3 per cent</a>. </div>
<div> </div>
<div>Looking towards next Wednesday's inflation figures for the September quarter, it's hard to see where any inflationary pressures at all are going to come from, except for - yet again - smokes. </div>
<div> </div>
<div>There may well be some food price inflation due to the drought (which itself drags further on economic growth), but rental price growth will be at or close to record lows, and there may be some other offsetting<span> factors. </span>
</div>
<div> </div>
<div><span>Crunching through the numbers, with a hat tip to the ever-brilliant Justin Smirk at Westpac, spits out trimmed mean inflation of, say, 0.3 per cent, and the weighted median may well be even lower still.</span></div>
<div><span> </span></div>
<div><span>So that gets you to annual core inflation of about 1½ per cent for trimmed mean, and just 1.2 per cent for the weighted median, which is so far below the mandated target you could drive a truck through the gap (or an attractively priced new SUV the way new car sales have been tracking!). </span></div>
<div><span> </span></div>
<div><span>If all of this proves to be the case - and, by the way, the mid-point of the inflation target is 2½ per cent - why wouldn't the RBA be cutting with bells on?</span></div>
<div><span> </span></div>
<div><span>Financial markets have effectively priced out a November cut - and almost any further cuts at all - as far as I can tell because some people said that's what the Governor said...but is that what was said?</span></div>
<div> </div>
<div><strong><span style="text-decoration: underline;">What's the French word for nuance?</span></strong></div>
<div> </div>
<div>To recap briefly, we have a 'no' to full employment, and a resounding 'no' for being close to achieving the inflation target, which market expectations see as a distant dream. </div>
<div> </div>
<div>Now let's go back to the IMF speech, and more specifically the very brief Q&amp;A segment.</div>
<div> </div>
<div>And then to a question from the floor!<br><br>Question: has the RBA got 'a lot of work to do' in terms of delivering monetary easing (the cash rate is at 0.75 per cent), and should we assume negative rates or other unorthodox policies?</div>
<div> </div>
<div class="separator"><a href="https://1.bp.blogspot.com/-clR0lulvZts/Xa7QjR6iU9I/AAAAAAAAybk/Gr6cNLxerWop15HuL3ZX5MUE0_VVFXOOQCNcBGAsYHQ/s1600/rba2.jpg"><img src="https://1.bp.blogspot.com/-clR0lulvZts/Xa7QjR6iU9I/AAAAAAAAybk/Gr6cNLxerWop15HuL3ZX5MUE0_VVFXOOQCNcBGAsYHQ/s640/rba2.jpg" width="640" height="314" data-original-height="548" data-original-width="1111"></a></div>
<div>
<span style="text-decoration: underline;"><em><br></em></span><span style="text-decoration: underline;"><em>Source: RBA</em></span>
</div>
<div>To my mind, there's only one way that a central bank Governor could've answered that question given the circumstances, and here it is:</div>
<div> </div>
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<div><em><span style="text-decoration: underline;">Source: RBA</span></em></div>
<p><br><strong><span style="text-decoration: underline;">November live</span></strong><br><br></p>
<div>Now I could be off beam here - it's happened on this blog at least once before! - but this answer, and perhaps some of the remainder of the transcript might have been misinterpreted...and the market pricing may in turn have been led astray. </div>
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<div>No central banker could have reasonably responded 'we have lots more to do' on easing, and the question on negative interest rates was always going to be batted to the fence, which it quite rightly was. </div>
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<div>The consensus view is that there will be no further easing this year, but if inflation is as low as it looks to be - essentially a sin tax on tobacco and a bit of drought-related food price inflation - then the November meeting could be a live one.<br><br>I've leaned heavily here on the analysis of Sophia Rodrigues of Central Bank Intel (if you're an institution you should subscribe to her forthcoming content), and another prominent markets analyst in Sydney (well, it's the Clock Hotel, you can work it out). </div>
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<div><em>PETE WARGENT is the co-founder of AllenWargent property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank">blogger</a>. </em></div>
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Why the November RBA meeting may be live: Pete Wargent

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<p>EXPERT OBSERVER</p>
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<p><span>Why has the treasurer of Australia, Mr Josh Frydenberg let the banks off the hook for not passing on the full interest rate cut when the RBA reduced interest rates by 0.25% of a 1% earlier this week to stimulate the economy.</span></p>
<p>Two of the big banks CBA &amp; NAB have refused to pass on the full interest rate cut to their customers, profiting on the back of everyday Australians.</p>
<p>When the Treasurer, Mr Josh Frydenberg was interviewed by Ross Greenwood on the today show of Channel 9, instead of bringing the banks to account threatening them with new legislation to force them to pass on 100% of the rate cut he put the earnest on the customers to shop around for a better deal.</p>
<p><span>The process of changing lenders is very difficult and intrusive, and the banks have too much control over their clients. </span></p>
<p><span>The federal government of Australia needs to be held to account to stop the big banks holding their mortgage holders to ransom and not passing on the rates cuts which are meant to stimulate the economy not their bottom line. </span></p>
<p><span>This has an effect of stifling economic growth, short changing every day Australians and damping confidence and restricting the growth of new jobs.</span></p>
<p>Glenn Farah is a partner at real estate agency NGFarah.</p>
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