<a href="https://www.apartments.com.au/developers/pdg-corporation">PDG Corporation</a> has been appointed by the Victorian Government and Development Victoria to transform a long-unused infrastructure site in Ivanhoe into a new residential precinct, delivering 275 homes alongside a 2,000 sqm public park.

The project will redevelop the former water tank site on Upper Heidelberg Road, which has been unused since 2004. The appointment follows an eight-year planning process and marks the start of detailed design, with a planning application expected to be lodged in mid-2026.

The redevelopment will introduce a new residential community in one of Melbourne’s established inner-north suburbs, with at least 10 per cent of the homes allocated as affordable housing. In addition to new housing supply, the project will expand local open space through the delivery of the public park, which will be accessible to the broader community.

PDG Managing Director and Founder Vince Giuliano said the partnership with Development Victoria presented an opportunity to deliver a housing outcome aligned with the character of the area.

“PDG is thrilled to partner with Development Victoria to bring new housing options to this popular part of Melbourne,” Giuliano said.

“This exceptional location offers a rare opportunity to create a vibrant, connected community, and we look forward to working closely with Development Victoria and other stakeholders to bring their vision to life.”

The Ivanhoe project continues PDG’s track record of delivering mixed-use and community-focused developments in Melbourne.

PDG has just sought to upscale its plans for its prime Southbank site on Queens Bridge Street. They are seeking to developer 637 apartments across a 71-storey tower.

Joel Robinson

PDG appointed to develop Ivanhoe water tank site by Development Victoria

National developer Fortis has received development approval for Crest &amp; Walker, its Newstead apartment development on Kyabra Street.

Construction by Binah is expected to commence on the 20-storey, Bureau^Proberts-designed building soon. There will be 65 two- and three-bedroom apartments on offer, starting at $1.8 million.

<a href="https://www.apartments.com.au/new-apartments/crest-walker-12-kyabra-street-newstead-qld-4006">Crest &amp; Walker</a> marks the fourth active development to be delivered by Fortis in Brisbane, following River House, now nearing completion, a residential project in New Farm, and a mixed-use development in Hamilton. Several additional projects remain in the pipeline as the development manager continues to grow its footprint across South-East Queensland.

&nbsp;

Dan Boman, General Manager – Development, Queensland, said the continued expansion in Brisbane projects managed by Fortis reflects the company’s commitment to design-led development and thoughtful placemaking.

“We’re proud to be strengthening our presence in Brisbane with Crest &amp; Walker, particularly in such lifestyle destination as Newstead," Bonman says.

"Every Fortis project is shaped by its context, and we approach each one with the respect and care it deserves."

Bonman believes Crest &amp; Walker will&nbsp;attract a discerning buyer who values design, thoughtful amenity and a lifestyle that captures the best of contemporary Brisbane.

"Our focus is always on creating places that feel connected to their neighbourhood and elevate the everyday experience for residents. Newstead continues to evolve as one of Brisbane’s most sought-after urban communities, and Crest &amp; Walker reflects our ambition to contribute meaningfully to that story."

&nbsp;

The building’s design features a contemporary brick podium softened by vertical greenery, creating a distinctive architectural expression within the Newstead streetscape. Positioned between Gasworks and James Street, the project sits within one of Brisbane’s most coveted lifestyle precincts, surrounded by dining, retail and cultural destinations.

A communal rooftop will feature a sun lounge and pool, BBQ facilities and a sauna, all set against panoramic views across Newstead and the Brisbane CBD.

Slaite Projects will handle the sales campaign, which will kick off in May.

[smartcode_project_cta:default project_id=145922]

Fortis to launch Crest & Walker, Newstead following development approval

Singaporean developer <a href="https://www.apartments.com.au/developers/centurion-global">Centurion</a> has unveiled plans for a major mixed-use redevelopment of the former John Martin &amp; Co warehouse building on Adelaide CBD's dress circle North Terrace.

The $300 million redevelopment will comprise three towers, rising behind and above the preserved 19th-century sandstone façade. The proposal would retain and integrate the heritage-listed structure while introducing a trio of contemporary towers that combine student accommodation, residential apartments, and commercial uses.

There will be apartments to purchase, as well as a 30-storey, purpose-built&nbsp;student accommodation tower, designed to respond to growing demand for dedicated student housing in Adelaide’s CBD.&nbsp;Ground and podium levels across the development are expected to host retail, food and beverage, and entertainment uses, helping to activate the street edge and create stronger pedestrian connections between North Terrace and the nearby Rundle Mall retail precinct.

A key element of the proposal is the preservation of the site’s historic sandstone building, constructed in 1867 and designed by prominent colonial architects Edmund Wright, Edward John Woods, and Edward Hamilton. The building originally operated as a warehouse for the well-known Adelaide department store John Martin &amp; Co before the retailer closed in 1998.

&nbsp;

The site sits opposite several of Adelaide’s most significant cultural institutions, including the Art Gallery of South Australia, the South Australian Museum, the State Library, and the university precinct. Its location places it within a corridor that connects the city’s cultural, education, and retail destinations.

It is the second redevelopment proposal on North Terrace in recent months, with Palumbo Group set to redevelop the heritage-listed former Royal Hotel which has laid vacant for over a decade.

They are planning 211 apartments across two towers, just over a kilometre from Centurion's project.

Read more:&nbsp;<a href="https://www.apartments.com.au/news/sa/palumbo-group-to-redevelop-kent-town-pub-into-new-apartment-development">Palumbo Group to redevelop Kent Town pub into new apartment development</a>

Centurion plots $300m triple-tower redevelopment for heritage John Martin’s warehouse on Adelaide’s North Terrace

After laying vacant for over a decade, construction is set to begin on a major residential and mixed-use development at the heritage-listed former Royal Hotel in Kent Town.

The Royal Apartments development by South Australian developer Palumbo Group will deliver 211 new dwellings across two residential towers while preserving and restoring the iconic State Heritage-listed building at 2-8 North Terrace.

<img alt="Royal Hotel" data-entity-type="file" data-entity-uuid="d48b7805-a5b0-42b8-b6bd-64ed49dfb81d" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-03-09%20at%209.15.56%E2%80%AFAM.png?VersionId=vtrtYAaCec5nYrYiNaivmC9d9nyHAXeQ" />

<a href="https://www.apartments.com.au/new-apartments/royal-apartments-2-8-north-terrace-adelaide-sa-5000">Royal Apartments</a> will consist of a 15-level Hills Tower and a 16-level City Tower on the doorstep of the Adelaide Park Lands.

The heritage Royal Hotel building, added to the State Heritage Register in 1986, will be retained and adaptively reused as part of the development.

The development will also include ground-level retail, communal open space including a swimming pool, bicycle parking, and 235 on-site car parks.

<img alt="Royal" data-entity-type="file" data-entity-uuid="c73b6752-a574-4e4a-927d-f36df076b61a" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-03-09%20at%209.20.41%E2%80%AFAM.png?VersionId=EcIGi.Z0ijVPTDkq8jSEFd2pzfw6ryRN" />

Providing housing for key workers is central to this development, with 20 percent of dwellings set aside for doctors, nurses, police officers and other essential workers at a 25 percent reduction of rental costs.

The project is being delivered by South Australian family-owned developer the Palumbo Group, who have over seen several high-quality residential and commercial developments across Adelaide.

Palumbo Group to redevelop Kent Town pub into new apartment development

Southwark Grounds will transform into a fully serviced inner-city neighbourhood, with South Australian developer&nbsp;Commercial &amp; General&nbsp;selected as the master developer to transform two-thirds of the former West End Brewery site.

The State Government will partner with South Australian developer Commercial &amp; General to deliver more than 1,000 homes alongside a supermarket, a childcare centre, an aged care facility and a vibrant hospitality and retail precinct at Adelaide’s newest suburb.

Commercial &amp; General will work with Renewal SA on adaptive reuse of the historic Walkerville Brew Tower, which will anchor the precinct’s public space with hospitality and retail uses.

The newly announced homes, services and amenities form part of the broader 1,300‑home Southwark Grounds development, expanding on five apartment and townhouse projects on the western side of the site announced last year, which will deliver approximately 300 new homes close to services and public transport.

Local development group Commercial &amp; General are known for landmark projects across Adelaide including Eighty‑Eight O’Connell in North Adelaide and WEST at West Lakes.

<img alt="Full vision for Southwark’s transformation revealed" data-entity-type="file" data-entity-uuid="94a4827e-3a6d-4228-85d4-1f209ffd0a00" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Southwark-Grounds-View-2-Artist-Impression.jpg?VersionId=UGDDpeG8RqUm46gmL9p2S3EhO9qUnlwO" />

Commercial &amp; General is now finalising partnerships with a selection of architects and consultants to progress detailed plans and product designs for the precinct. Built form will be delivered by Commercial &amp; General’s integrated building division, Tandem Building, with work expected to begin in 2027.&nbsp;It should take about a decade to deliver the precinct.

Early stages are anticipated to include significant apartment complexes, public parking and the redevelopment of the Walkerville Brew Tower.

Other key elements planned for delivery within the next five years include a vertical residential aged care facility and a purpose-built childcare centre, with a supermarket and supporting retail to follow soon after.

This large section of the precinct will deliver more than 1,000 homes across approximately a dozen apartment buildings, with opportunities for increased yield to be explored through increased height allowances enabled by the recently launched Southwark Grounds Code Amendment.

Commercial &amp; General will also deliver a dedicated 80-space short stay public car park to support anticipated visitor demand, in addition to parking provided within individual apartment developments.

More than 20 per cent of homes within the development area will be allocated to affordable sale or rental, meeting Renewal SA’s increased commitment to affordable housing across the precinct.

Apartment buildings will be framed by activated public thoroughfares and a series of new reserves to be delivered by Renewal SA across 2026 and 2027.

The public realm, which will comprise a minimum of 15 per cent of the overall precinct, will be anchored by a major civic space known as ‘Brewery Green’, connecting the Walkerville Brew Tower to the river.

A detailed masterplan of the precinct alongside product typologies are set to be released later this year.

The State Government has embarked on several strategic infill developments to deliver critical housing supply to South Australia at pace. The Government purchased the Port Road site from Lion Beer Wine &amp; Spirits Pty Ltd in 2023 after the closure of the brewery two years earlier and has since fast tracked the construction of the first homes, set for occupation by the end of this year.

Full vision for Southwark’s transformation revealed

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.
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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.
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<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>
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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.
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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.
<a href="/images/2016/02/09/Screen%20Shot%202016-02-09%20at%209.19.13%20AM.png" target="_blank">Click to enlarge</a>
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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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<img src="/images/2015/12/7/Screen%20Shot%202015-12-07%20at%2010.16.24%20AM.png" alt=""> 
 
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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