ASX-listed developer Cedar Woods is progressing its plans for its Southbank arts precinct site.&nbsp;

The developer has filed plans, which are now with the&nbsp;Department of Transport and Planning, for a new 20-level tower at&nbsp;<a href="https://www.apartments.com.au/new-apartments/141-151-sturt-street-southbank-vic-3006">141–151 Sturt Street</a>, a 2,718 sqm block opposite the Habitat Filter sculpture.

The proposal seeks to demolish the two-level&nbsp;commercial building, including a small supermarket and medical tenancies, and create a new building with 180 apartments and a focus on an&nbsp;active public realm and arts integration.

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<img alt="Southbank site" data-entity-type="file" data-entity-uuid="76a72db6-91ef-43ae-827d-a9cfa72893d2" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Site.png?VersionId=DZgtB4K6BswVh0QtCs3iLjXaLp0CbcEb" />

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There will be a full mix of apartment configurations, including 28 studio apartments, 16 one-bedroom, 104 two-bedroom, and 32 three-bedroom units.

Retail, creative arts, and residential amenity functions are integrated across the lower levels. A food and drink tenancy is planned to front Dodds Street, while a retail tenancy fronting Sturt Street will be accessed via an elevated walkway. The first floor includes a substantial 734 sqm creative arts space, envisioned to support Melbourne’s growing cultural and digital industries.

Architecture firm <a href="https://www.apartments.com.au/architects/rothelowman">Rothelowman</a> has put together the plans. In their&nbsp;Urban Design Report they highlighted the project’s ambition to embed itself within Southbank’s evolving cultural fabric.

A central feature of the design is a through-block link connecting Sturt and Dodds Streets, landscaped with native plantings and embedded with universal access ramps.

“The ramp has been thoughtfully integrated as the primary access point, ensuring universal accessibility for all users,” the report noted, with the link offering “a direct response to the urban planning scheme of creating more green spaces within our communities”.

<img alt="Southbank podium" data-entity-type="file" data-entity-uuid="4d24b1b2-d69c-4a11-a11d-ec6df432221c" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/podium.png?VersionId=geWoJyZDmPSLODZ_.PNJ0LvpOmyyCdpo" />

The building’s podium form responds to the mandatory height limits along Dodds Street and maintains a fine-grain interface to adjoining developments. Above the podium, the tower is articulated with recessed balconies and a focus on views toward the CBD and surrounding arts institutions. A communal rooftop recreation deck and indoor lounge are positioned on level four, adjoining seven apartments and providing over 900 sqm of resident amenity space.

Vehicle access and loading will be provided via Dodds Street, with 155 resident car spaces located across two basement levels and the first three above-ground floors. Bicycle storage is more generous, with 226 spaces distributed across resident, staff and visitor needs.

Rothelowman describes the architecture as “humanist,” with ground-level interfaces designed to encourage social interaction and provide a dignified entry for both residents and passers-by. “All street interfaces are crafted to invite and nurture human connections,” the design report states. “The façade transitions to a human scale, providing an approachable and engaging streetscape”.

Cedar Woods, while well-known for its large communities it develops outside of Australia's capital cities, they have recently developed in Melbourne's inner-ring before. They are approaching completion at <a href="https://www.apartments.com.au/new-townhouses/88-leveson-north-melbourne-88-leveson-street-north-melbourne-vic-3051">88 Leveson</a>, just 15 townhouses in the heart of North Melbourne.

Joel Robinson

Cedar Woods progresses with new apartment plans in Southbank arts precinct

Brisbane developers Core Property Partners and Vector Property Australia has teamed up for Brisbane's newest apartment development.

The duo identified <a href="https://www.apartments.com.au/developments/east-brisbane-qld-4169">East Brisbane</a> as their preferred suburb, on the fringe of the Gabba Precinct, where they've just revealed BANKSII, 72 apartments opposite Raymond Park.

[smartcode_project:default project_id=136432 project_image_fid=5481]

The one-, two-, and three-bedroom apartments will sit in a glass-wrapped building that will also feature a rooftop with an&nbsp;infinity-edge pool, a BBQ area and alfresco dining spaces, sun lounges, and a sauna, as well as a resident-only gym and a ground-floor cafe.

Rhett Williams, Director of Vector Property Australia, said the project will lift the quality of the East Brisbane community and set a new benchmark.

"In Brisbane’s current property landscape, <a href="https://www.apartments.com.au/new-apartments/banksii-east-brisbane-169-wellington-road-east-brisbane-qld-4169">BANKSII</a> stands out through its emphasis on lifestyle-oriented living, connectivity and sophisticated design," Williams says.

[smartcode_project:default project_id=136432 project_image_fid=5479]

The 10-level building has been designed by MAS Architecture. Their designs were inspired by the native Banksia flower, with the architecture and interiors reflecting the organic symmetry of its namesake flora. MAS has interpreted this throughout the building’s curved form, façade detailing and interior palette.&nbsp;

The building’s flowing geometry and natural tones are complemented by large balconies and floor-to-ceiling glazing, maximising cross-breezes, daylight and views over the city, parklands and river.

“Having a strong narrative for a building helps us architecturally,” MAS noted. "We can choose colours that come off that species of flowers. The trunk and the trees and the flower elements all are now visible in our joinery on the inside and in our architectural finishes on the outside."

[smartcode_project:default project_id=136432 project_image_fid=5485]

Apartments will feature timber floors, soft porcelain tiles, brushed bronze fittings, and stone benchtops with warm veining.&nbsp;

Kitchens feature premium SMEG appliances and generous storage, while bathrooms have been designed as calming retreats with curved cabinetry and twin sinks in the master ensuites.

The building will feature a suite of rooftop and wellness amenities. Residents will have access to an infinity-edge pool, BBQ and alfresco dining areas, sun lounges and a rooftop sauna.&nbsp;

A residents-only gym will be located on the podium level, while a ground-floor café and landscaped laneway will further activate the site and improve neighbourhood connectivity.

[smartcode_project:default project_id=136432 project_image_fid=5488]

BANKSII will rise from a prime Wellington Road site, with the building oriented to overlook the adjacent Raymond Park and take in extensive city views. It is also on the doorstep of key&nbsp;lifestyle infrastructure, including the future Kangaroo Point Green Bridge, The Gabba stadium, and the planned Brisbane Live arena.&nbsp;

Public transport options, including ferry, bus and rail - including the future Cross River Rail Woolloongabba station - are all nearby, supporting a car-optional lifestyle just minutes from the CBD.

Williams said the team spent over a year searching for the ideal site before securing this location.

"We were attracted to <a href="https://www.apartments.com.au/developments/east-brisbane-qld-4169">East Brisbane</a> as it is a vibrant and growing community that offers a perfect balance of urban convenience and natural beauty with the parklands and river on our doorstep.”

The project is part of the broader Woolloongabba Games precinct, which is undergoing significant investment in the lead-up to the 2032 Brisbane Olympics. This urban renewal, coupled with infrastructure upgrades, is expected to enhance long-term liveability and capital growth in the area.

Given the wide max of configurations, BANKSII is expected to suit everyone from first home buyers and investors to families and downsizers.

[smartcode_project_cta:default project_id=136432]

BANKSII sales launch in booming East Brisbane apartment market

The Minns Labor Government will deliver Sydney’s first new heavy rail station in more than a decade – enabling up to 10,000 new homes by rezoning land around Woollahra and Edgecliff stations, right next to the CBD, to tackle the housing crisis and rebalance growth across the city.

Recent reports by the NSW Productivity Commission have warned that Sydney is losing twice as many young people as it is gaining, while also finding that Woollahra is the most feasible Local Government Area (LGA) in New South Wales to build new housing.

Despite this, housing approvals in Woollahra consistently lag well behind other LGAs, and the population has declined by 11 per cent over the past 50 years while Greater Sydney as a whole has grown by 74 per cent.

The new station that will be an eight-minute trip from Sydney CBD, will be located on the Eastern Suburbs train line in Woollahra, where a station build was started in the 1970s but never completed.

To enable the delivery of new homes the NSW Government will lead a rezoning of Woollahra and Edgecliff stations similar to other state led rezonings to allow additional homes to be built around the stations.

Affordable housing will also make up a proportion of development on the site with the final amount of affordable housing required, to be determined as part of the rezoning process.

The area surrounding the new station is within walking distance of major green and recreational space including Cooper, Trumper, Rushcutters Bay and Centennial Parks.

The Eastern Suburbs train line between Bondi Junction and Sydney CBD also has the lowest passenger usage rates during the AM peak of any line on the Sydney network, with only 43 per cent of operating capacity during the AM peak currently being utilised by passengers.

Sydney Water and Infrastructure NSW have confirmed there is capacity in the water and wastewater systems to accommodate the proposed 10,000 dwellings without major upgrades.

The rezoning is expected to take around two years and will further support the Government’s housing targets that rebalance the delivery of new homes around existing infrastructure.

&nbsp;

&nbsp;

Next stop Woollahra train station - delivering up to 10,000 new homes in the heart of Sydney

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Fresh off completing its mixed-use Malvern project Malvern Collective, Kokoda Property Group has acquired a prime site on Richmond's Bridge Road.

They are planning a mid-rise residential development with&nbsp;integrated wellness amenities and a vibrant ground-floor retail and dining offering.

The site, at&nbsp;487–495 Bridge Road, spans&nbsp;1,650 sqm with 50 metres of dual frontage across Bridge Road and Palmer Street. It is currently leased to Adairs, and has a large retail building and 20 onsite car parks.
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Kokoda Property Group’s acquisition forms part of a broader phase of growth in Melbourne, building on momentum from the completion of Malvern Collective and the recent purchase of a Burnley Street site for the developer’s first commercial project.&nbsp;

Mark Stevens, Kokoda Property Group’s Founder and Managing Director, said that the company’s Bridge Road site acquisition signals confidence in a city that is re-accelerating.

“Melbourne is regaining momentum,"&nbsp;Stevens said.

"After a cautious period post-COVID, we’re seeing buyer sentiment stabilise and capital leaning back into well-located, quality projects. Victoria now benefits from deep builder capacity and competitive delivery pricing, creating a rare opportunity to bring design-led inner-city developments to market without compromising on craftsmanship.

“Richmond ticks all the boxes for us – connectivity, culture and everyday amenity – making Bridge Road the perfect address for an amenity-rich, multi-use development."

<img alt="Kokoda" data-entity-type="file" data-entity-uuid="9a8de51d-8092-480a-8b7e-e081816692c2" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202025-08-29%20at%208.54.27%E2%80%AFAM.png?VersionId=VRHpV5.6beOu2cieKHWrw3ErMPuVOAuj" />

Envisioned as an “urban lantern” the building will bring a distinctive new presence to Bridge Road with a sculptural retail frontage, designed to honour the street’s heritage character while contributing to its renewal.

Stevens said the acquisition reflects the developer’s commitment to design-led addresses in Melbourne’s inner city.

“Drawing on Richmond’s rich heritage and dynamic character, we’ve envisioned a contemporary building that respects the past while elevating the way people live today. With dual frontages, curated ground-floor spaces, and a focus on wellness, this project will contribute to the neighbourhood’s evolution, appealing to both downsizers and a new generation of professionals.”

Kokoda Property will now progress concept design ahead of a future planning process.
</section>

Mark Stevens, Kokoda Property Group’s Founder and Managing Director, said that the company’s Bridge Road site acquisition signals confidence in a city that is re-accelerating

First look: Kokoda secures Richmond site for new apartment development

Gold Coast developer Drew Group is fast approaching sell-out at its Main Beach apartment development, Lagoon Main Beach.

In the last nine months, Drew Group and sales partner Pezet Matheson have secured 31 sales totalling over $75 million, as the two-tower development advances towards completion under the expert eye of Hutchinson Builders.

“Today's buyers are more discerning than ever," Drew Group Managing Director Jon Drew says.

"It's essential to provide something truly unique that sets a development apart, and we believe Lagoon has achieved just that."

[smartcode_project:default project_id=108747 project_image_fid=193023]

Just over 50 per cent of recent&nbsp;sales have been to local buyers, reflecting the deep trust and connection within the Gold Coast community that Drew Group has developed over the years.

Demand has been particularly robust at the top end, with two of the three exclusive penthouses already sold, alongside five sub-penthouses. Only seven apartments remain in Lagoon's Signature Series — one&nbsp;penthouse and six sub-penthouses.

[smartcode_project:default project_id=108747 project_image_fid=284864]

Drew Group has also removed the much-maligned sunset clause from all contracts at Lagoon. The sunset clause — although rarely invoked, yet on occasion known to have been — allows developers to take back contracts on apartments should the building not be completed within the timeframe specified in the contract.

Pezet Matheson Co-Director Jayde Pezet says the fact Lagoon is&nbsp;within a year of completion, and has no sunset clause in contracts, provides certainty to buyers.

"This is paramount in the current market," Pezet says.

Drew Group has committed to providing the highest level of security inclusions — none more impressive than the Ubiquity Access Control System, a cutting-edge facial recognition technology that is one of the most state-of-the-art keyless entry systems on the market.

[smartcode_project:default project_id=108747 project_image_fid=190743]

One of the biggest drawcards to Lagoon has been the size of the apartments.

"It is unlikely that any future new development in Main Beach will be able to offer such spacious living at this price point," Drew says.

"Today's buyers are more discerning than ever, carefully evaluating amenities like gyms, spas, workspaces, and beach lockers, along with quality finishes. It's essential to provide something truly unique that sets a development apart, and we believe Lagoon has achieved just that."

Lagoon is set to complete construction in mid-2026.

[smartcode_project_cta:default project_id=108747]

Lagoon Main Beach approaches sell-out as local buyers drive $75m in sales

Spending

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GUEST OBSERVER
Household spending can be divided into three broad categories, services, retail trade, and non-retail goods. Where households spend has implications for overall economic activity. 
For example, spending in labour intensive services sectors, such as health, or restaurants, will typically have a larger impact on overall economic and jobs growth than spending on some retail goods, such as furniture and clothes, which are largely imported. In this note we look at the broad long- term trends in the three expenditure categories. 
Retail trade share of household spending has stabilised
<a href="/images/2016/11/16/Screen%20Shot%202016-11-16%20at%208.31.34%20AM.png" target="_blank">Click to enlarge</a>
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The retail trade share of household spending was on a long term downward trend but looks to have stabilised. In the early 1980’s retail trade accounted for over 40% of household spending compared to 31% today. The main beneficiary has been the services sector. Households have increased their share of spending on services from around 50 percent in the early 1980’s to around 60 percent now. 
The long run decline in the retail trade share of household spending reflects the fall in prices of retail goods relative to other goods and services. In volume terms, the retail trade share of total household spending has stayed very close to 30 percent since the data began in the early 1980’s.
<a href="/images/2016/11/16/Screen%20Shot%202016-11-16%20at%208.32.54%20AM.png" target="_blank">Click to enlarge</a>
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However, for the last three years the retail trade share of household spending has been flat. With volumes also being broadly steady, this shows that that the discounting of retail goods relative to other goods and services has eased. 
Part of the stabilisation of retail prices relative to services is due to the depreciation in the Australian dollar. This has helped to lift import prices in Aussie dollar terms. However RBA research shows that this lift has not been as large as would have been expected given the size of the depreciation. Increased competition is limiting the pass through from imported prices to sales prices. 
It also reflects a sharp slowing in services inflation since late 2013. Services inflation has typically been higher than for inflation for goods. However, both are now running at an annual rate of just 1.5 percent over the year to September. Inflation of market based services, such as meals out and hair cuts, has slowed more sharply to an annual rate of just 0.9 percent over the year to September. 
The slowing in services inflation, and inflation more generally, reflects a number of factors. Firstly there is spare capacity in the economy, which can be seen in the high rate of labour market underutilisation. Secondly, increased competition globally and advances in technology have reduced the pricing power in many markets.
<a href="/images/2016/11/16/Screen%20Shot%202016-11-16%20at%208.34.09%20AM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/11/16/Screen%20Shot%202016-11-16%20at%208.34.09%20AM.png" alt="">
 
In a recent speech, RBA Governor Lowe spoke about how reduced pricing power was not just effecting the manufacturing sector, but service sectors too. Thirdly, job security fears have been heightened since the GFC. This means that workers are less inclined to push for wage increases, in sectors where part- time work is replacing full-time permanent positions.
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But services share is still increasing 
The share of household spending on services has increased over time. Spending on purely discretionary services, such as restaurants, accommodation and recreation, accounts for around 15% of household outlays. This share has been broadly stable over time. Contrary to popular perception, the share of spending on “meals out” has declined over time, now accounting for 5.2 percent of spending compared to 6.2 percent 30 years ago. 
So the upward trend has been driven by an increasing share of spending on non-discretionary services, such as rent, health, education, transport and communications. These categories account for 45 percent of household spending, having increased from around 30 percent 30 years ago. The shift in spending reflects relatively stronger price increases for these services as well as a change in preferences towards these areas. 
For example:
Insurance and other financial services – growth in this category is running at 6.5 percent over the year to June. As a share of housing spending, insurance and other financial services now accounts for 9.2 percent, compared to 8.4 percent three years ago.
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Growth in this category has been driven by an increase in the volume of spending. Excluding price effects, the proportion of spending on this category has also increased by a similar magnitude.
Consumers have shown a higher degree of caution around employment prospects in recent years. As a result they may be taking on a greater degree of insurance to guard against the loss of income, a decline in health or loss of other assets. There are also a larger number of products on offer.
Spending on health services rose by almost 10% over the year to June. The share of household spending continues to increase, accounting for around 5% compared to 4% ten years ago. The increase has been driven by both relatively strong price increases as well as an increase in volume of spending. The ageing population has also boosted spending on health and this trend will continue. A higher proportion of the population now has (subsidised) private health insurance which has boosted the number of elective procedures.
Education has also grown at an above average pace, with spending up 5.8% over the year. Education accounts for 4.7% of household spending compared to 3.5% 10 years ago. The increase in the share of spending is due to relatively strong price increases and also a larger volume of spending on this category. For example, a greater proportion of people are finishing year 12 and undertaking further education.
One category of discretionary services spending which has increased over time is overseas travel. As a share of household outlays, expenditure on travel has increased from 2.5 percent in the early 1980’s to around 3.7 percent now. The share of spending on flights has fallen as the relative cost has declined.
However outlays on overseas accommodation and other travel costs has increased.
Spending on non-retail goods is falling
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<div class="column">The retail trade share of household spending has stabilised in recent years. And the services share continues to increase. This means the share of spending on non-retail goods has declined. </div>
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 In particular, the share of spending on vehicles and their maintenance has fallen by 1 percent point over the past three years. There has been a long run downtrend in spending on these categories with the share of households spending around currently 7 percent compared to a peak of 11 percent in the 1980s. This largely reflects price falls – the price deflator for vehicles has declined by 25% since late 2007, while the deflator for the maintenance of vehicles is 7 percent lower over the past three years. Vehicles are cheaper, more reliable and can be funded via mortgage redraws at a lower cost.</div>
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 Summary</div>
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 Changes in relative pricing, which have reduced the price of goods relative to services, have contributed to some very long run trends in household spending. Households have spent an increasing share on the consumption of services, while spending on retail and other goods has declined.</div>
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 However the good news for retailers is that their share of household spending has been stable in recent years. This reflects a lower Australian dollar, which has lifted the price of some retail goods. However it also reflects a fall in the price of other consumption goods, such as cars, and a slowing in services inflation.</div>
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 With plenty of spare capacity in the labour market, wages growth and non- tradeables inflation are likely to remain soft for many years. This means the relative price of services is likely to remain subdued. And the upward trend in the services share of household spending may flatten out. </div>
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Kristina Clifton is economist, Commonwealth Bank, and can be contacted <a href="https://www.commbank.com.au" target="_blank">here</a>.
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jchancellor-FAypfDUnLy

Trends in household spending: CBA's Kristina Clifton

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GUEST OBSERVER
Consumer confidence slipped 2.2 percent in March seeing it continue to lag behind business confidence which is a bit more upbeat.
Both consumer and business confidence are around their long term averages though.
<a href="/images/2016/03/9/image004.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/03/9/image004.png" alt="">
Source: NAB, Westpac/MI, AMP Capital
Interestingly, all the talk of a crash in the Australian property market looks to have led to a sharp fall in the proportion of Australian’s nominating real estate as the wisest place for savings. It fell from 23.4% in December to 14.7% in March. With interest in shares also falling slightly and superannuation remaining low this saw a renewed spike in interest in bank deposits and paying down debt.
<a href="/images/2016/03/9/image006.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/03/9/image006.png" alt="">
Source: Westpac/MI, AMP Capital
Housing finance fell a greater than expected 3.4% in January with both finance to investors and particularly owner occupiers falling. The loss of momentum in lending to investors tells us that the APRA measures continue to impact and would probably be welcome by them and the RBA. The slowing in lending to owner occupiers may be more of an issue, but it’s dangerous to read too much into one month’s data. Nevertheless it is consistent with slower growth in housing related debt this year which in turn will likely see slower gains in Sydney and Melbourne property prices compared to last year.
Today’s consumer confidence and housing finance data while soft is unlikely to be enough to prompt the RBA to act on its easing bias just yet.
<a href="https://www.propertyobserver.com.au/https://plus.google.com/110172465327488162875?rel=author" target="_blank">SHANE OLIVER</a> is head of investment strategy and economics and chief economist at <a href="https://www.ampcapital.com.au/home" target="_blank">AMP Capital</a> and is responsible for AMP Capital's diversified investment funds.
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Talk of a crash in the Australian property triggers sentiment shift to wiser investment places: Shane Oliver

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The NAB Online Retail Sales Index for the December 2015 quarter edition has estimated the Australian online retail market was worth $19.1bn in the 12 months to December 2015.
The survey noted month-on-month figures to December 2015 grew 2 percent, seasonally adjusted, driven in part by online sales growth on 2.5 percent. Australians spent an estimated $19.1 billion in retail online to December 2015. NAB report this level is equivalent to around 6.5% of the traditional bricks &amp; mortar retail sector.
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mick.cee-iDmgDDAmu8

Australian online retail market worth $19.1bn in 2015: NAB

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GUEST OBSERVER
Retail sales were largely flat in December after rising for the prior four months. Aussie retailers have certainly faced their share of headwinds over the past year. And while it’s pretty clear that December was a soft month in terms of retail activity, the December quarter was essentially in line with longer-term averages.
What the result highlights is a momentum shift. Activity levels were strong at the start of the quarter but seem to have pulled back over the Christmas spending period. Interestingly the soft result was also mirrored in the Commonwealth Bank Business Sales Index (which measures all the debit and credit transactions that are processed across CBA eftpos terminals).
<a href="/images/2016/02/09/Screen%20Shot%202016-02-09%20at%209.04.29%20AM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/02/09/Screen%20Shot%202016-02-09%20at%209.04.29%20AM.png" alt="" width="672" height="213">
The Reserve Bank has slightly downgraded growth forecasts in 2017 and 2018. However it is important to note that the forecast changes are downward tweaks rather substantial cuts.
And rather than any serious signs of panic or concern, the downward revisions effectively opened the door to another rate cut if it becomes necessary. 
Interestingly, the accompanying commentary certainly suggests that Board Members remain uncertain about the near term outlook for the domestic economy but the longer term prospects remain relatively sound.
Importantly the weaker near term growth story is really driven by the uncertainty in non-mining business investment. However given the rather more positive view on the longer term prospects – particularly the expectations for an ongoing slide in unemployment it is by no means assured that another interest rate cut is on the cards.
Two key concerns dominate central bank thinking. The first include how the rebalancing of the domestic economy (away from mining investment) is keeping pace. And the second is the uncertain impact of the recent financial turbulence – it has the potential to see businesses and households pullback in terms of activity. Interestingly the weakness in non-mining business investment is the one area that continues to occupy policymakers thoughts. A lift in business investment is the key to supporting growth and in providing an overall lift in jobs.
The policy stance is clearly slanted towards the potential for further rate cuts rather than rate hikes. Subdued global growth, a lower terms of trade, coupled with a lack of non-mining investment are some of the risks to domestic growth.
The Reserve Bank intimated on Tuesday that the economic outlook was improving while at the same time noting inflation was lower than expected. Clearly that gives the Reserve Bank scope to cut rates, if it was needed. But the Reserve Bank is not giving any indication that it intends to act on that ‘easing bias ’ any time soon. In fact we expect the Reserve Bank to keep rates on hold over the rest of 2016.
<a href="/images/2016/02/09/Screen%20Shot%202016-02-09%20at%209.08.03%20AM.png" target="_blank">Click to enlarge</a>
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What do the figures show?
Retail trade – December month
Retail trade was flat in December after rising for the prior four months.  In trend terms, retail trade grew by 0.3 per cent in December.
Non-food retailing fell by 0.5 per cent in December after rising by 0.5 per cent in November. Non-food retail spending is up 4.6 per cent on a year ago.
Sales by chain-store retailers and other large retailers rose by 0.4 per cent in December to be up 6.4 per cent over the year.
Sales rose in five of the eight states and territories, led by the ACT (up 2.5 per cent), Northern Territory (up 0.3 per cent), Queensland and South Australia (both up 0.2 per cent), and NSW (up 0.1 per cent). Sales fell the most in Western Australia and Tasmania (both down 0.6 per cent), and Victoria (down 0.1 per cent).
Strongest growth in the month was by “Liquor retailing” (up 1.3 per cent) followed by “Footwear and other personal accessory retailing” (up 1.2 per cent) and clothing (up 1 per cent).
The biggest drop in sales in the month was recorded by “Electrical, Electronic &amp; Gas Goods Retailing” (down 1.7  per cent) followed by “Other recreational good retailing” (down 1.5 per cent) and “Hardware, building and garden supplies retailing” (down 1 per cent).
“Newspaper and book retailing”  (down 2.6 per cent) and “Department stores”  (down 0.9 per cent).
Retail trade – December quarter
In real (inflation-adjusted) terms, retail trade rose by 0.6 percent in the December quarter – marginally below the decade average of 0.7 per cent. In real terms sales were up 2.5 percent on a year ago – below the decade average of 2.9 percent.
Strongest growth in the quarter was by “Electrical, Electronic &amp; Gas Goods Retailing” (up 5.4 per cent – the best result in a year), followed by “Other recreational good retailing” (up 4.2 percent – the best result in two years.) and “Department stores” (up 1.8 per cent).
The biggest drop in sales in the quarter was recorded by “Other retailing – stationery goods, flowers, antiques” (down 4.4 per cent), followed by “Footwear and other personal accessory retailing” (down 2.8 per cent – the weakest quarterly result in three years), and “Other specialised retailing” (down 2.6 per cent).
Retail inflation lifted by 0.7 per cent in the December quarter – the biggest quarterly rise in two years. Retail prices are up 1.6 per cent over the year. Prices of goods at “Footwear and other personal accessory retailing” rose by 3.1 per cent, with “Other retailing – stationery goods, flowers, antiques” up 2.2 per cent, and “Supermarkets &amp; grocery stores” up 1.2 per cent.
Key take-aways from the Reserve Bank report
Below are our key “take-aways” from the Reserve Bank’s latest quarterly reviews. The full Statement on Monetary Policy can be found <a href="https://www.rba.gov.au/publications/smp/2016/feb/" target="_blank">here</a>: 
Forecasts: The RBA expects annual economic growth 2-3 cent and underlying inflation around 2.00 percent over the next few months.
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Economic outlook: “Forecasts for GDP growth are little changed from those presented in the November statement. Year ended GDP growth is forecast to be 2ó–3ó per cent over the year to December 2016, and to increase to 3–4 per cent over the year to June 2018.”
Inflation forecasts: “The December quarter inflation outcome was broadly in line with expectations in the previous Statement. The forecast for underlying inflation is little changed. Underlying inflation is expected to remain low over the forecast period...”
Non-mining business investment: “The outlook is for non-mining business investment to remain subdued in the near term. The ABS capital expenditure survey of firms’ investment intentions and the low level of non-residential building approvals suggest that the profile of nonmining investment will be a bit weaker than earlier”.
Labour market: “Labour market conditions have improved by more than expected at the time of the November Statement. Employment growth was above average over 2015 and the unemployment rate was around ó percentage point lower in the December quarter than earlier anticipated.”
“While employment growth is expected to slow somewhat from the rapid pace seen in the December quarter, it is forecast to remain strong enough to reduce the unemployment rate further. The participation rate is likely to rise further over coming years as individuals are encouraged to enter the labour market as employment opportunities improve.”
Foreign buyers: “ Information from the Bank’s liaison suggests that foreign buyers tend to have longterm motivations for investment and may be relatively unconcerned about temporary fluctuations in housing price growth.”
What is the importance of the economic data?
The Bureau of Statistics’  Retail trade publication contains the most current readings on the performance of consumer spending. The ABS surveys 500 ‘larger businesses’ and 2,750 ‘smaller businesses’. Retail trade covers spending at a broad range of retail outlets but excludes both petrol and motor vehicle sales. A weak retail trade result may point to a slowing economy as well weighing on the share prices of listed retail stocks. But retail trade estimates can’t be assessed in isolation – it is important to look at the influences determining future trends in consumer spending, such as income, employment and confidence levels.
The Reserve Bank releases its Statement on Monetary Policy each quarter. The Statement is the Reserve Bank’s assessment of economic and financial conditions and also contains the latest inflation views. The Statement is crucial is assessing the short-term outlook for interest rates.
What are the implications for interest rates and investors?
The outlook for retailers remains positive. Lower petrol prices, firm confidence levels, strong home construction and rising employment all serve to boost spending levels. The only area that could instil some hesitancy in the average consumer is the weaker performance of the sharemarket.
The Reserve Bank will closely monitor developments in China and financial markets more generally. Encouragingly the Reserve Bank has plenty of firepower to provide stimulus to the economy. CommSec expects no change in the cash rate over the next year.
 
Savanth Sebastian is an economist for <a href="https://www.commsec.com.au/" target="_blank">CommSec</a>
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Spending stalls, RBA tips lower jobless rate: Savanth Sebastian

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GUEST OBSERVER
Retail sales posted a 0.5% rise in Oct, mid-way between the consensus forecast of 0.4% and Westpac’s 0.6% (although at 0.549%, closer to Westpac’s call in unrounded terms).That follows 0.4% gains in Aug and Sep.
Store categories recorded a mixed month with solid gains for basic food (+0.6% off a soft Sep), household goods (1.1% but still subdued given housing strength) and a decent bounce for department stores (+3.5% more than reversing the 1.6% drop in Sep. These were partially offset by a dip in cafes and restaurants (–0.6%) and basically flat results for clothing and ‘other retail’.
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The state results ranged high to low from NSW (+0.8% after a quiet Aug-Sep), to Vic &amp; Qld (0.5%, the former after solid gains in Aug-Sep, the latter after back to back declines), SA (+0.3% holding at insipid growth rates), and WA (flat, implying worsening per capita cuts in spending).
The monthly trend sales estimate suggests a slight improvement with annual growth lifting from a 3.6% annualised mid-year to around 3.9%yr currently. 
On a 3mth rolling basis however, annual sales growth is still softening from a peak of 4.6%yr in Q2 to 4% currently. On a broad store-type basis, the slowdown is coming from more moderate growth in household goods retail and a marginal softening in basic food, the contribution from other categories lifting a little. By state, it is mainly centred on NSW &amp; ACT, where strong sales growth had been driving about half of the gains nationally up until earlier this year.
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A significant wedge is starting to emerge between large and small retailers with the latter struggling again (sales down 0.4%yr). Growth is particularly strong for large non-food retailers (+8.9%yr).
October was a poor month for retailers' sales via online channels, with non seasonally adjusted sales up just 3.5%yr, the first time sales in this channel have dipped below non- online retail since the ABS started providing a split in 2013. Over that short period, online retail has typically grown at 51⁄2 times faster than total retail (i.e. 20%yr+).
All up the pace of sales growth remains sub-par, particularly given that retailers should be indirectly benefitting from the lower AUD's boost to Australia's tourism sector and a consistently more upbeat picture from private sector business surveys. Some of this likely reflects continued aggressive price competition in a range of sub-sectors (the monthly figures are nominal and thus include the impact of both volume and price changes). Recent reads from the Westpac-Melbourne Institute Consumer Sentiment survey point to a more positive tone particularly around Christmas spending plans. Dec-Jan may see some better retail results.
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Matthew Hassan is senior economist with <a href="https://www.westpac.com.au/" target="_blank">Westpac</a>.
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Australian retail sales on the up: Westpac's Matthew Hassan

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GUEST OBSERVER
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The latest data on economy-wide spending is best described as encouraging. Spending rose in September but slightly slower than the July and August results. Spending was mixed across sectors and states. But the good news is that the annual rate of economy-wide spending remains above longer-term averages.
While spending was up in the Business services category, it can prove volatile so it will be important to see a follow-up lift in sales. The large Retail Stores category (33% of economy-wide sales) rose by 0.5% in trend terms to be up 7.7% over the year – well above the long-term average growth pace of 5.7%.
There are few reasons to prompt the Reserve Bank to cut rates again. The economy is growing, sales are up, business and consumer sentiment are above average and our largest trading partner, China, is rebalancing from an industrial focus to a consumer spending focus and with some degree of success.
What does the data show?
The Commonwealth Bank Business Sales Indicator (BSI), a measure of economy-wide spending, recorded moderate sales growth in September, although down from previous months. The BSI lifted by 0.3% in September, the slowest growth in 35 months and down from 0.5% gains in July and August. Annual growth of spending eased for the third month to 6.8%, but still above the decade- average of 5.1%.
The seasonally-adjusted measure of sales posted a solid 2.8% gain in September – the strongest growth since May 2013. And annual growth lifted from 5.7% to a 10-month high of 8.9%. 
The Commonwealth Bank BSI is obtained by tracking the value of credit and debit card transactions processed through Commonwealth Bank merchant facilities. And in line with the practice of the Bureau of Statistics with its retail trade data, seasonally adjusted and trend estimates of the BSI are obtained by applying statistical software. The seasonally adjusted and trend BSI results are derived from the same SEASABS statistical software. This allows analysis of the broader underlying trends that may be hidden in the raw data. 
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Across sectors, eight of the 19 industry sectors fell in trend terms in September. But encouragingly, spending in the volatile Business Services category rose by 5.3%. Also notably sales rose at Miscellaneous Stores (up 1.2%), Transportation (up 0.9%), Contracted Services (up 0.8%).
The large Retail Stores sector grew by 0.5% in September after rising between 0.6-0.7% per month over the previous seven months.
Among the weakest sectors in September were Airlines (down 3.6%); Government services (down 1.6%), and Utilities (down by 0.7%). Sales at Personal Service Providers, Service Providers and Mail Order/Telephone Order Providers all fell by 0.2%. 
In annual terms in September, five of the 19 industry sectors contracted including: Utilities, Mail Order/Telephone Order Providers, Automobile and Vehicle Sales and Airlines.
At the other end of the scale, sectors with strongest annual growth in September included: Hotels &amp; Motels; Miscellaneous Stores; Amusement &amp; Entertainment, Service Providers and Wholesale Distributors &amp; Manufacturers.
Sales rose in only four of the states and territories in September: Tasmania (up 1.0%), South Australia (up 0.5%), Western Australia (up 0.4%) and Queensland (up by less than 0.1%). Sales fell the most in Victoria (down 0.8%), ACT (down 0.7%), Northern Territory (down 0.5%) and NSW (down 0.1%).
In annual terms, three states and territories had sales below a year ago in September: Northern Territory (down 8.3%), NSW (down 4.7%) and Victoria (down 1.7%). At the other end of the scale, growth was strongest in Tasmania (up 9.1%) from the ACT and South Australia (up 8.4%), Western Australia (up 7.9%), and Queensland (up 5.9%).
What is the importance of the report?
The Commonwealth Bank releases its Business Sales Index around the 20th each month. The data provides a broader perspective of consumer spending. The Business Sales Indicator includes transactions made at traditional retail establishments such as supermarkets, clothing stores and cafes &amp; restaurants and as such is more comparable to the ABS Household Final Consumption Expenditure released on a quarterly basis. The Business Sales Indicator also covers businesses such as airlines, car dealers and utilities such as water and electricity companies as well as motels, business, professional and government services and wholesalers.
What are the implications for interest rates and investors?
The latest data adds to our view that the Reserve Bank will leave official rates unchanged in coming months. 
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Craig James is chief economist, CommSec and Savanth Sebastian is economist, CommSec. Both can be contacted <a href="https://www.commsec.com.au" target="_blank">here</a>.
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