Melbourne developer Spacious Group has completed Voyage Altona, one of the closest new apartment developments to Altona Beach.

Off the plan purchasers have started moving into the 49-apartment project on Pier Street, with the remaining move-in-ready one-, two- and three-bedroom apartments starting from just over $500,000.

Display apartments have now been fitted out, allowing prospective buyers to inspect the completed residences by appointment.

[smartcode_project:default project_id=112195 project_image_fid=372638]

The completed apartments feature open-plan living and dining areas which extend onto private balconies and terraces, while full-height glazing maximises natural light throughout the interiors.&nbsp;

Hybrid timber-look flooring, stone benchtops, Miele appliances, porcelain-tiled bathrooms and generous storage feature throughout the building which also features landscaped communal areas, expansive shared terraces, lift access and secure on-grade parking.

Drawing inspiration from its bayside setting, Voyage adopts a restrained palette of warm neutral tones and textured finishes. Many of the apartments take advantage of views across Port Phillip Bay, while the indoor-outdoor living spaces have been designed to make the most of the coastal outlook.

[smartcode_project:default project_id=112195 project_image_fid=3286]

Voyage was developed to address what Spacious Group identified as an undersupply of higher-quality apartment product in Altona, with a focus on owner-occupiers looking to remain within the bayside community.

"Voyage responds to very strong local buyer demand for quality, owner-occupier-focused product," says Barry Plant Projects Director Jarrod Farey, who has handled sales since the project's launch.

"The project delivers an elevated lifestyle proposition, with its design and quality of finish far exceeding anything previously produced in the area, as well as its proximity to Pier Street Village and the beach."

The majority of purchasers have been local downsizers and owner-occupiers looking to stay within the Altona community but who previously had limited opportunities to buy a brand-new apartment.

[smartcode_project_cta:default project_id=112195]

Joel Robinson

Spacious Group completes Voyage Altona in Altona's beachside precinct

Homecorp has secured approval for a $360 million apartment development at Budds Beach, paving the way for one of the Gold Coast's most amenity-rich residential projects to launch later this year.

Gold Coast City Council has approved Lýon Residences, a 32-level tower that will deliver 178 two and three-bedroom apartments across a prominent corner site at 8-10 Acacia Avenue and 25-27 Oak Avenue.

The approval comes as developers continue to invest in premium lifestyle-driven apartment projects on the Gold Coast, where owner occupiers are increasingly prioritising amenity as much as apartment size and location.

<a href="https://www.apartments.com.au/new-apartments/l-on-residences-25-27-oak-avenue-surfers-paradise-qld-4217">Lýon Residences</a> has been designed around a resort-style wellness offering, headlined by a Moroccan-inspired spa precinct featuring treatment rooms, a Nordic sauna and steam room, hot and cold plunge pools, a soaking pool and a residents-only juice bar.

The rooftop will include a heated infinity pool and spa, residents' lounge with private kitchen and bar, gymnasium, yoga and Pilates studio, outdoor entertaining areas and barbecue facilities overlooking the Surfers Paradise skyline.

<img alt="Lyon" data-entity-type="file" data-entity-uuid="2d3e29af-8793-486e-a684-52cef862241f" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-07-15%20at%204.32.26%E2%80%AFPM.png?VersionId=ayG2zpLf3SS6Zy8XmKDcQods4kVWb0gm" />

Homecorp Founder and CEO Ron Bakir said Budds Beach provided the ideal location for the company's latest luxury apartment project.

"Budds Beach represents one of the most unique and sought-after pockets of the Gold Coast, and Lýon Residences has been designed to reflect that sense of rarity and refinement," Bakir said.

The project arrives as wellness continues to become a defining feature of new residential developments both in Australia and internationally.

The latest Global Wellness Institute figures show wellness real estate remains the fastest-growing segment of the global wellness economy and is forecast to exceed $1.8 trillion by 2030. Australia continues to rank among the world's 15 largest wellness real estate markets, with developers increasingly integrating health, recreation and community facilities into apartment projects.

Queensland is also experiencing strong population growth, with the Gold Coast continuing to outperform many other Australian cities as demand for new housing remains elevated ahead of the 2032 Olympic and Paralympic Games.

Bakir said the project had been designed to respond to that shift in buyer expectations.

"Strong population growth and sustained demand across the Gold Coast continue to highlight the need for well-designed new housing supply. Lýon Residences responds directly to this demand while setting a new benchmark for residential living," he said.

Each apartment has been designed to maximise views across the coastline, the Nerang River and the Gold Coast hinterland.

Located just minutes from Surfers Paradise beach and the Broadwater, the development also offers easy access to the light rail network, Broadbeach and Burleigh Heads.

Early site works are underway, with construction expected to commence later this year.

Homecorp approved for Budds Beach apartment tower, Lýon Residences

New apartment developments with uninterrupted, north-facing views over Perth's Swan River are exceptionally rare.

Recognising just how limited those opportunities are, <a href="https://www.apartments.com.au/developers/edge-visionary-living">Edge Visionary Living</a>, one of Perth's most respected builder-developers, targeted <a href="https://www.apartments.com.au/developments/applecross-wa-6153">Applecross</a>, assembling an unrepeatable 6,342 sqm riverfront site on the corner of Moreau Mews and Canning Beach Road to create one of Perth's only new north-facing apartment developments directly overlooking the Swan River.

Today, <a href="https://www.apartments.com.au/buildings/riviere-residences-applecross-59-canning-beach-road-applecross-wa-6153">Rivière Residences</a> offers buyers a unique opportunity to choose between completed residences ready to move into now and off-the-plan homes in the final stage, Rivière West.

[smartcode_project:default project_id=28384 project_image_fid=3823]

Across the completed East and Central buildings, residents are already enjoying the development's luxury amenity, while two of the precinct's hospitality venues are now open.

The completed component of the development gives buyers the advantage of experiencing the finished product firsthand, including its uninterrupted river views, while still having the opportunity to secure a residence in the final stage.

"People are wowed by the view and the quality of the apartments,"&nbsp;Edge Visionary Living Sales Executive, Holly McSweeney, says.

"They're looking for the convenience of lock-and-leave living, but they're not looking to downsize on quality."

[smartcode_project:default project_id=28384 project_image_fid=3826]

The rarity of the development hasn't been lost on prospective buyers, McSweeney says.

For McSweeney, it all comes back to a location that is becoming increasingly difficult to replicate.

"Location, location, location," she says. "We are nestled right on the front of the Swan River. You can never get built out, so wherever you are in Rivière Residences, you've got views of the river forever."

The unique waterfront position has resonated particularly strongly with local downsizers. McSweeney says many buyers are long-time Applecross residents looking to transition from large family homes into a luxury apartment without sacrificing space, quality or the lifestyle they've enjoyed for decades.

<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/N_FowNW0wu8?si=vb25XFq1wZ-iufAW" title="YouTube video player" width="560"></iframe>

A major focus for Edge in recent years has been resident amenity. Across its apartment portfolio, from beachfront developments in Scarborough to luxury towers in South Perth, the developer has increasingly invested in the spaces beyond the apartment itself.

The strategy has largely been shaped by downsizer demand. Many buyers are moving from large family homes with swimming pools and established gardens. While they're looking to leave the maintenance behind, they don't want to compromise on lifestyle.

At Rivière, <a href="https://www.apartments.com.au/architects/hillam-architects">Hillam Architects</a> designed the resident facilities as an extension of each apartment. A 25-metre heated swimming pool takes advantage of the north-facing river outlook, complemented by a large gym, sauna and steam rooms, private dining spaces, residents' lounges, a cinema, games room, and dedicated wine and whisky rooms.

[smartcode_project:default project_id=28384 project_image_fid=372542]

The waterfront location has also proved to be a major drawcard. Residents are within walking distance of the Raffles Hotel, South of Perth Yacht Club, the Heathcote Cultural Precinct and the cafés, restaurants and boutiques along Ardross Street.

Beyond the location and amenity, McSweeney says many buyers take confidence from Edge's fully integrated development model.

Having delivered apartments across Perth for decades, Edge now designs, develops and constructs its projects in-house, giving the company greater control over quality, delivery and the finished product.

"What I love is when people walk through their apartment for the first time and say, 'This is better than what we imagined,'" McSweeney says. "We hear that all the time."

Completed apartments in the East and Central buildings are now available to inspect by appointment, while Rivière West, the final stage of the precinct, is expected to be completed in the first quarter of 2027.

[smartcode_project_cta:default project_id=28384]

North-facing Swan River views drive demand at Rivière Residences in Applecross

Nearly 60 per cent of apartments at McNab Group's $220 million The Tannery development in Brisbane's West End have sold ahead of the project's public launch, including a suburb-record $2.57 million sale for a two-bedroom apartment.

The early sales campaign has secured buyers for 50 of the project's 87 apartments, highlighting continued demand for larger owner-occupier apartments that combine generous floorplans with premium lifestyle amenities in one of Brisbane's most tightly held inner-city suburbs.

[smartcode_project:default project_id=143337 project_image_fid=374768]

McNab Group Executive Chairman Michael McNab said selling more than half the project before launch reflected changing buyer expectations.

"Selling more than half the project before public sales open tells us buyers are actively seeking apartments that offer something genuinely different," McNab said.

"Today's buyers are looking beyond four walls. They want homes that genuinely enhance the way they live, with spaces that support health, connection and everyday wellbeing."

[smartcode_project:default project_id=143337 project_image_fid=374767]

A key point of difference for the project is the adaptive reuse of the heritage-listed Dixon's Tannery building, which will become The Retreat, a residents-only wellness precinct rather than being redeveloped into additional apartments.

The Retreat will feature a sauna and steam room, hot and cold plunge pools, a commercial-grade gym, Pilates studio, cinema, library, co-working spaces and private dining room. Rooftop amenities will include a swimming pool, landscaped gardens, outdoor entertaining areas and dog-friendly spaces.

[smartcode_project:default project_id=143337 project_image_fid=374760]

Designed by Cottee Parker Architects with interiors by Tom Mark Henry and landscape architecture by Aspect Studios, The Tannery comprises 87 two, three and four-bedroom apartments across 11 levels overlooking the Brisbane River.

Cottee Parker principal Dee Passenger said preserving the original tannery building had been central to the project's design.

"The easy option would have been to maximise the site's development potential with additional apartments. Instead, McNab has chosen to preserve the original tannery as a shared wellness retreat, ensuring this important piece of Brisbane's history remains at the heart of the community."

Passenger said sustainability also played a key role in the design, with materials from the original industrial site salvaged and repurposed throughout the development.

[smartcode_project:default project_id=143337 project_image_fid=374761]

Motiv CEO Carly Cottam said buyers had responded strongly to the combination of larger apartments, wellness facilities and the West End lifestyle.

"We are seeing more buyers looking for homes in the sky that provide the space and functionality of a traditional home, while benefiting from the convenience and lifestyle that apartment living brings," Cottam said.

She said purchasers included both owner occupiers and investors, with demand coming from local buyers as well as interstate purchasers.

Coinciding with the public launch, McNab also announced a partnership with Queensland Ballet, whose neighbouring Thomas Dixon Centre shares historical ties with the original Dixon family.

Located on a 4,465 sqm site at 439 Montague Road, The Tannery overlooks the Brisbane River and is around 10 minutes from the CBD.

Construction is underway, with completion expected in the second half of 2027.

[smartcode_project_cta:default project_id=143337]

More than half of residences sold before public sales as McNab announces significant partnership with Queensland Ballet

McNab's The Tannery nears 60 per cent sold before public release, sets two-bedroom West End record

Iwan Sunito's vision for a landmark mixed-use precinct in Sydney's Inner West has taken a major step forward, with approval granted for the $1.9 billion Five Dock development first unveiled earlier this year.

The approved scheme by <a href="https://www.apartments.com.au/developers/one-global-capital">One Global Capital</a> will deliver an 80,500 sqm mixed-use precinct comprising 840 apartments, integrated hotel accommodation, commercial and retail space, alongside publicly accessible open space designed to create a new destination for the growing suburb.

"This is a significant milestone for One Global Capital and for the future of housing delivery in Sydney," Sunito said.

"The Housing Delivery Authority was established to identify major housing projects capable of delivering meaningful supply more efficiently, and we are delighted that Spencer Street has been recognised as one of those projects.”

He said the declaration reflected the rapid progress achieved since acquiring control of the site.

"In less than seven months we have progressed from taking control of the site to securing entry into one of the NSW Government's most important planning pathways. It reflects the experience of our team, the strength of our consultant group led by Urbis, and our long-term commitment to delivering transformational projects that contribute to Sydney's future."

When the project was revealed earlier this year, Sunito described the opportunity as one of the strongest development sites he had worked on.

"I probably hadn't appreciated the uniqueness of the site until more recently when putting together the concept plans," Sunito said.

"The proximity to the water, and the golf course opposite, is unlike any other part of Parramatta Road. We have a unique position and view corridors over the water that makes this one of the best sites I've worked on."

The development has evolved since its initial announcement, with the approved plans increasing the residential component from the originally proposed 750 apartments to 840 homes while retaining the project's focus on creating an integrated neighbourhood rather than a standalone residential development.

Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/a-city-within-a-city-iwan-sunito-flags-1-5-billion-mixed-use-precinct-in-five-dock">"A city within a city": Iwan Sunito flags $1.5 billion mixed-use precinct in Five Dock</a>

The precinct will combine apartments with hotel accommodation, commercial workplaces, retail offerings and public spaces, creating a mixed-use environment intended to serve both residents and the broader Five Dock community. The proposal also continues the collaboration between One Global Capital and internationally recognised architect <a href="https://www.apartments.com.au/architects/koichi-takada-architects">Koichi Takada</a>, whose previous work with Sunito includes Infinity, Arc and Skye North Sydney.

Takada previously said the design was driven by a philosophy of integrating nature into the built environment.

"The concept for this development is born from our design approach to naturalising architecture," Takada said.

"The public realm benefits from biophilic design that integrates generous landscaping, and the development is optimised for natural daylight, airflow and water views to foster wellbeing, sustainability and spaces that foster community interaction."

Sunito has consistently described the project as a "city within a city", with a strong emphasis on creating a destination that extends beyond housing.

"We want to create a development that's not only to be seen, but to be experienced by the whole local community," he said.

The approval comes as Five Dock continues its transformation ahead of the opening of the Sydney Metro West line, with the new Five Dock station set to significantly improve connections between the Inner West, Parramatta and the Sydney CBD.&nbsp;

The precinct will also benefit from its proximity to the Parramatta Road corridor, nearby waterfront parklands and established retail and dining offerings that have made Five Dock one of Sydney's most tightly held Inner West suburbs.

Iwan Sunito secures approval for $1.9 billion Five Dock mixed-use precinct

Westpac

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Australia posted a 16k increase in employment in January 2018 which records the longest streak of job gains with a 16th consecutive positive print. The month’s increase was very close to the market and Westpac’s expectation for a 15k rise.
However, the composition of employment changes was quite stark with full-time employment down 49.8k and part-time employment up 65.9k. That comes after a strong 2017 for full-time employment growth and the annual growth rate is still an elevated 3.6%.
In the month, hours worked fell 1.4%. The annual rate of change moderated to +0.5% from +3.2% but the series is volatile and this month’s movements were largely due to base effects. If hours worked holds steady in February, the annual pace will lift to +2.1%.
<img src="https://westpaciq.westpac.com.au/wibiqauthoring/_uploads/image/bulletin/SimonImages/Labour1.jpg" alt="">
 
By state, Queensland posted the highest jobs growth, up 19.7k, maintaining solid momentum but January's lift was driven by gains in part-time employment. On the other hand, a soft month was recorded in NSW (-21.1k) and WA (-8.9k), both coming after some solid gains in December.
<img src="https://westpaciq.westpac.com.au/wibiqauthoring/_uploads/image/bulletin/SimonImages/Labour3.jpg" alt="">
 
Annually, jobs growth strength has been fairly broad-based across the states, with the mining states recovering and the south-east expanding. Yet, we will watch the pace of jobs growth in Victoria closely with total employment flattening out over recent months after a very strong run up.
<img src="https://westpaciq.westpac.com.au/wibiqauthoring/_uploads/image/bulletin/SimonImages/StatesTotal.jpg" alt="">
 
Annual employment growth held steady at a brisk pace of 3.3%. Our Westpac Jobs index is still at a high level but the change in the index has moderated in recent months. Our outlook for employment growth in 2018 is positive with a forecast 2.2% annual rate an above trend pace albeit slower than 2017’s very strong performance. 
<img src="https://westpaciq.westpac.com.au/wibiqauthoring/_uploads/image/bulletin/SimonImages/Index.jpg" alt="">
Overall, while January’s update continues the run of positive employment numbers, key questions remain for the labour market.
Firstly, there is uncertainty on how the unemployment rate will change given our solid jobs growth forecast.
<img src="https://westpaciq.westpac.com.au/wibiqauthoring/_uploads/image/bulletin/SimonImages/LabourImage1.jpg" alt="">
In January, the unemployment rate fell slightly to 5.5% from 5.6% in December (revised up from 5.5%). This came with a decline in the participation rate to 65.6% from 65.7%.  Looking back over the past year, while the unemployment rate did fall from a peak of 5.9% in February 2017 to the current 5.5%, the drop was more muted than the gain in employment due to a rising participation rate. To examine how far the unemployment rate could continue to fall, we need to assess how far the participation rate could rise.
The first thing to note is that the uplift in the participation rate has been driven mainly by females joining, re-joining, or remaining for longer in the labour force. However it should be noted that this spike occurred alongside a rising male participation rate which had otherwise been in a downtrend. That compares to 2015’s spike in female participation, where the male participation rate held its level rather than increasing. This suggests that the most recent lift in participation rate has a cyclical aspect to it with stronger employment generally attracting more people to the labour force. In addition, subdued wages growth, high household debt and high house prices may be necessitating dual-income households. However, given the outsized gain in female’s participation there is also likely a structural gender dynamic occurring as well.
<img src="https://westpaciq.westpac.com.au/wibiqauthoring/_uploads/image/bulletin/SimonImages/GenderST.jpg" alt="">
Converging male and female participation rates have been a long-term trend due to the large social change in women joining the workforce. Yet, the rate of convergence had been flattening out as the generational shift filtered its way through the labour market over time. Between the periods of 2009 and 2014, the female participation rate had remained relatively unchanged at around 58-59%. Perhaps this means that in aggregate, the recent increase in female participation is due to structural reasons outside of the generational shift in behaviour. A look at the type of jobs created over the past year suggests a changing composition of employment may have been a significant factor.
<img src="https://westpaciq.westpac.com.au/wibiqauthoring/_uploads/image/bulletin/SimonImages/GenderLong.jpg" alt="">
 
The graphs below show the annual jobs increase in the year to November 2017 (lhs) across different economic sectors broken down by gender. It is ordered by the female share of employment in the individual sector (rhs) with the top graph showing the sectors with the highest proportion of female employees, and the bottom graph the lowest. 
<img src="https://westpaciq.westpac.com.au/wibiqauthoring/_uploads/image/bulletin/SimonImages/Sector1.jpg" alt="">
 
<img src="https://westpaciq.westpac.com.au/wibiqauthoring/_uploads/image/bulletin/SimonImages/Sector2.jpg" alt="">
 
The striking aspect about the top chart is that the four sectors with the largest proportion of female jobs (health care, education, accommodation &amp; food and retail trade) accounted for 242k of the total 387k jobs created over the year to November 2017 and 202k of those new employees in the sectors were female. That contrasts with the bottom chart where the only standout sector is the construction industry which has a very large male proportion and men accounted for 109k of the net 101k increase. This suggests that the rise in female participation is a reaction to strong employment growth in sectors that typically have a higher proportion of female employment. These service sectors have been key to the transitioning economy and therefore strength is likely to continue. On the other hand, the construction sector accounted for 109k of the total 178k annual increase in male jobs. While the level of homebuilding remains at a high level, supply-demand factors look more balanced and slowing house price growth should restrain housing investment. The uncertainty here is whether similar jobs with transferrable skills will be created in other sectors. Given the large transitional shift in the types of jobs created, we will likely see tightness in the labour market in some pockets before others. That leads onto the second question surrounding the unemployment rate in regards to where the NAIRU sits – the rate that we start to see wage pressures come through.
 
<img src="https://westpaciq.westpac.com.au/wibiqauthoring/_uploads/image/bulletin/SimonImages/Labour4.jpg" alt="">
The RBA’s estimate of the NAIRU is around 5%. Yet, even though the unemployment rate has been approaching 5% over the past year, we are yet to see a reaction in wages. In a speech on Tuesday at the ABE Forecasting Conference, Assistant Governor Economic Ellis mentioned that “we are mindful that, as we approach that figure, there's a risk we find there is more room to come down before wage growth picks up in earnest”.
A possible reason for a lower NAIRU is that there is more slack in the labour market than that indicated by the unemployment rate alone. Indeed, the underemployment rate has held a high level with the last seasonally adjusted estimate at 8.3% in November. <img src="https://westpaciq.westpac.com.au/wibiqauthoring/_uploads/image/bulletin/SimonImages/VolumeUnder.jpg" alt="">
 
It is difficult to draw a conclusion on what a high underemployment rate means for overall slack in the labour market. The ABS provides quarterly non-seasonally adjusted data on volume measures of unemployment and underemployment based on the hours of available labour. The data is consistent with the previous headcount measures in terms of directional movement. In terms of quantity, as at November, it shows underemployment at 3.1% and therefore a sizable proportion of the combined 7.2% of underutilised hours. But the readiness of the underemployed pool of labour to be drawn upon is uncertain given that it may require changing jobs rather than going from not employed to employed.
As such, finding the level of NAIRU may only be possible in hindsight - after we start to see wage pressures emerge. With that in mind, next Wednesday’s Wage Price Index data is all the more critical.
 
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jrobinson-rf4aSBido9

January employment increase makes new Australia record

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<a href="http://www.afr.com/business/banking-and-finance/financial-services/westpac-invests-25m-more-in-uno-in-mortgage-broking-play-20180202-h0sehc"></a>Westpac Banking Corp has doubled its $25 million investment on the digital mortgage broker Uno Home Loans.
It has invested another $25 million for the start-up's brand marketing and sales teams which is currently sending two-thirds of its loans to the non-major banks.
Westpac now owns around 81% of Uno, which seeks a 10% share of the broking market over the next 10 years.
Westpac's head of strategy, Gary Thursby, said Uno presents a different way to create opportunities.
Uno, which was established two years ago, is recruiting a new CEO as the Uno founder Vincent Turner moves to a new role of chief innovation officer, leading product development.
Uno does not disclose loan volumes or customer numbers,
Uno has 22 lenders on its panel, including the four majors. 
Westpac loans do not get favourable treatment on the platform, Thursby told Fairfax Media.
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j.ballantyne1990-6AQqhLzZaK

Westpac invests extra $25 million in digital mortgage broker Uno 

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Recent history suggests downside risk to the December quarter CPI but due to forecast bias. Also we note there is no clear relationship between the Australian and NZ CPI.
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As we noted in our preview, <a href="https://westpaciq.westpac.com.au/wibiqauthoring/_uploads/file/Australia/2018/January/er20180126AusCPIQ4Preview.pdf" target="_blank">'Australian Q4 CPI preview'</a> there are clear downside risks to the December quarter CPI.
<h4>Sept Qtr CPI: 0.6%qtr</h4>
<h4>Dec Qtr CPI forecasts; WBC f/c: 0.8%qtr, Mkt f/c: 0.7%qtr, Range: 0.4%qtr to 1.4%qtr</h4>
 <img src="https://westpaciq.westpac.com.au/wibiqauthoring/_uploads/image/Eco_Bulletin_Charts/Slide45.JPG" alt="">
Through the last four quarters Australian forecasters have overestimated the quarterly rise in the CPI by just under 0.2ppts (average of 0.175 at three decimal places). 
It appears that Australian forecasters have been slow to react to the disinflationary pulse that has hit the economy for at least a year now. With a median forecast of 0.7%qtr for the December quarter, there is a clear risk that the CPI will undershoot expectations yet again.
<img src="https://westpaciq.westpac.com.au/wibiqauthoring/_uploads/image/Eco_Bulletin_Charts/Slide48.JPG" alt="">
Westpac has left its quarterly forecast for the CPI at 0.8%qtr as that is the best estimate we can get from the partials we have even when we allow for some further disinflationary pressure in consumer goods space. 
However, in our mind the risks are asymmetric to the downside.
<img src="https://westpaciq.westpac.com.au/wibiqauthoring/_uploads/image/Eco_Bulletin_Charts/Slide47.JPG" alt="">
But what of the New Zealand CPI? Didn’t the December print come in at 0.1%qtr against a median expectation of 0.4%qtr? Doesn’t that highlight a significant downside risk to the Australian CPI?
Our research suggests there is very little correlation in the quarterly change in the NZ CPI and the Australian CPI. Nor is there any correlation between the forecasting errors for the NZ and Australian CPIs.
<img src="https://westpaciq.westpac.com.au/wibiqauthoring/_uploads/image/Eco_Bulletin_Charts/Slide52.JPG" alt="">
So while the ongoing disinflationary pressure in the Australian economy points to a downside risk to both Westpac’s and the market's forecast for the December quarter CPI, we would caution against using the New Zealand CPI as an argument.
Justin Smirk is ‎senior economist, Westpac Group and can be contacted <a href="https://www.westpac.com.au/about-westpac/westpac-group/" target="_blank">here</a>.
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Downside risk to the December quarter CPI: Westpac's Justin Smirk

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Dwelling approvals continued to surprise to the upside in November, increasing by 11.7% compared to market expectations for a 1.0% decline. 
November’s uplift was driven by a jump in Victorian approvals, up 38% on the back of a 21% rise in October. 
The rest of Australia was relatively flat, down 2.0% in the month following October’s 8.3% drop. 
On an annual basis, dwelling approvals are tracking at a 17.1% pace.
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2018/1/10/dwelling%20approvals.jpg" alt="">
 
However, given the series is typically volatile, we prefer to assess the data on a rolling 3 month basis. Under that smoothed measure, approvals were up 3.8% in the month and 11.0% over the year but this is still partly inflated by base effects due to a dip in October 2016. 
Looking at the dwelling type detail, the increase in Victoria was concentrated in private apartment approvals, in particular the high rise component (four or more storey blocks). 
We caution that the high rise series is very volatile, and November’s surge likely reflects a lumpy project pipeline. This raises the risk of a sharp correction lower in apartment approvals in coming months even though Victoria continues to see strong population growth.
Nationwide, private apartment approvals rose 30.6%, mainly due to the aforementioned jump in Victoria but also because of gains in Queensland and WA on a much lower scale. On a rolling 3 month basis, Australian apartment approvals rose 8.8% in November and 21.3% over the year.
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2018/1/10/dwelling%20approvals%20type.jpg" alt="">
 
In regards to houses, detached dwellings were down 2% in November and relatively flat in yearly terms, +2.2%. By state, Queensland retraced past gains (-6.7%) but the trend is up over 2017, consistent with a resurgence in population growth. 
Victoria too was down 1.1% though approvals have moved higher through the year. NSW detached dwelling approvals rose 2.6% in the month but are broadly flat over the year. WA continued to trend down, falling 8.7%. 
The value of renovation approvals fell back 3.5% in November after increasing by 24.4% in October to be 17.8% higher in yearly terms. Mining states lifted through the second part of 2017 while Victoria held a high level. 
The value of non-residential building approvals were broadly flat in November and up 35.5% over the year. However, after a choppy previous three months, total monthly approvals are relatively unchanged from April's level. State detail shows that much of the increase from last year is concentrated in Victoria and to a lesser extent NSW. By type, offices have been the main driver but warehouses and 'other' segments have also risen from last year. 
Overall, the jump higher in Victorian high rise approvals raises the risk of a sharp fall in coming months. Yet, the firming trend in Victorian detached dwelling approvals is in line with stronger population growth. Momentum elsewhere in Australia looks to be limited. 
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Australian dwelling approvals surprise higher in November: Westpac

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Westpac says uncertainty around the economic and fiscal outlook is ever present, but the downside risks have diminished somewhat relative to a year ago, with the world economy surprising to the upside.
The comments came ahead of the pending release by the Treasurer of the Federal Government's Mid-Year Economic &amp; Fiscal Outlook (MYEFO) on Monday next week, December 18.
The 2017 half yearly budget update will likely see minimal changes to the economic and fiscal forecasts and projections, Westpac economist Andrew Hanlan suggests.
"That is a welcome change from the experience for much of the post GFC period, when Treasurers so often had to mark down the revenue outlook.
In the May 2017 Budget, the budget deficit was forecast to moderate from $29.4bn, 1.6% of GDP, in 2017/18 to be approaching balance in 2019/20 and then edge into surplus in 2020/21, a forecast $7.4bn, 0.4% of GDP. 
Economic growth in 2017/18, in nominal terms, is set to exceed the Budget forecast, at a likely 4.5% vs an expected 4.0%. The mix of activity differs, with consumer spending softer, offset by investment by businesses and government.
Commodity prices over past months proved to be more resilient than anticipated, boosting national income. More recently, commodity prices have moderated, suggesting that the MYEFO commodity price assumptions for the out years will be largely as in the Budget.
The MYEFO profile for nominal GDP growth for the three years from 2018/19 is expected to be: 3.75% (downgraded from 4.00%); 4.50% (unchanged); and 4.75% (unchanged). The downgrade to 2018/19 reflects the risk that real GDP growth is revised to 2.75% from 3.0%, incorporating a weaker starting position for the household sector. 
The revenue profile across the four years will be boosted by the stronger starting position for the economy, by an expected: $2.4bn, $1.4bn, $1.0bn and $1.1bn.
The expenditure profile is expected to be unchanged, with a modest $1bn undershoot on expenditures in 2017/18 to be offset by the cost of new policy measures.
On these figures, the cumulative deficit for the four years is $40bn, $6bn lower than at Budget time, with the profile of: -$27bn (a $2bn upgrade); -$20bn, -$1.5bn and +$8.5bn.
"The case could be made for modest personal income tax relief, potentially to be announced in the May 2018 Budget," Andrew Hanlan said.
"This could be along the lines of those announced in the May 2016 Budget, shifting the income tax thresholds, costing $4bn over four years.
"There is also the scope to amend the ten year company tax cut plan, which is already incorporated into the fiscal estimates."
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Westpac sees fewer downside risks and scope for tax cuts

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Westpac will provide interest refunds to 13,000 owner-occupier borrowers who have interest-only home loans.
 The refunds amount to $11 million for 9,400 of those customers. The remediation follows an error in Westpac's systems which meant that these interest-only home loans were not automatically switched to principal and interest repayments at the end of the contracted interest-only period. To remediate the affected customers, Westpac will now:
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<li>Refund the additional interest paid from when the loan was contracted to convert to principal and interest repayments</li>
<li>Discount the interest rate for the remaining term of the loan.</li>
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This remediation has been designed so that customers pay no more interest over the life of the loan than they would have if the system error had not occurred. ASIC will monitor Westpac's remediation. ASIC and Westpac are yet to conclude an appropriate remediation program for investor customers with interest-only loans affected by the same system error. This has been a long-standing error between 1993 and August 2016.
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Westpac yet to deal with IO investor refunds after systems error

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The Westpac Melbourne Institute Index of Consumer Sentiment rose 3.6% to 103.3 in December from 99.7 in November.
This is a surprisingly strong result and confirms the lift we have seen in the Index over the last three months. The average reading for the Index in the December quarter is 5% above the average for the September quarter when we saw a disturbing slump in consumer spending. This result is supportive of the view that consumer confidence may have bottomed out during that September quarter.
In turn, growth in consumer spending is likely to have also bottomed out in the September quarter. However, with ongoing weak income growth; a low savings rate; and high debt levels we cannot be confident that consumers have the capacity to sharply lift spending despite higher confidence.
A less threatening outlook for interest rates appears to have boosted confidence. During that September quarter households were spooked by media and many commentators saying that interest rates were likely to start rising in the new year. That effect has now calmed down significantly.
Also supporting a more positive assessment for respondents’ finances is coverage of the government’s recent speculation around possible tax cuts.
With the labour market remaining strong respondents are generally more confident about the domestic economy and there is likely to have been a ‘feelgood effect’ from the passing of marriage equality legislation.
Media coverage of tax cuts in the US combined with easing tensions in North Korea, may also be supporting an improved outlook for international conditions.
All five components of the Index improved in December. Responses on family finances support the assessment around interest rates and tax cuts although it is unlikely that respondents are experiencing any relief in terms of wage increases. The ‘finances vs a year ago’ sub-index posted the biggest gain, rising 5.6% to 89.6 – an 18 month high but still well below the 100 mark indicating more consumers are seeing their finances deteriorate than improve. The forward view continues to be more positive the ‘finances, next 12mths’ sub-index posted a further 1.8% rise to 107.3, the most positive reading in a little over two years.
Views on the economy also posted solid gains, the ‘economic conditions, next 12 months’ sub-index rose 5% and the ‘economic outlook over the next five years’ sub-index was up 3.4%.
The ‘time to buy a major household item’ sub-index rose 2.8% but at 122.1 remains well below the long run average of 127.5 and still pointing to subdued consumer spending plans for the Christmas period.
The December survey included additional questions on news recall that provide insight into the factors shaping sentiment. Overall, recall levels were again low suggesting consumers are getting less exposure to news in general. The highest recall rates were for news on ‘economic conditions’ (19%); ‘budget and taxation’ (19%); interest rates (19%); inflation (10%); jobs (10%); and international conditions (9%). News on all of these topics was viewed as more favourable than three months ago, with particularly big improvements around international conditions, the economy and interest rates.
Consumers continue to become more comfortable about the outlook for jobs. The Westpac Melbourne Institute Unemployment Expectations Index declined 2.4% to 127.6 in December, the index reaching its lowest level since May 2011 (recall that lower reads mean more consumers expect unemployment to fall in the year ahead). The index can be viewed as a measure of consumers’ sense of job security. Qld consumers showed a particularly big improvement in December. Notably, all major states now have index reads below their long run averages, meaning consumer expectations for labour markets are marginally better than average.
The ‘time to buy a dwelling’ index rose 2.3% to 100.6, the first reading over 100 since the start of the year. The state detail continues to show materially weaker reads in NSW (90) and Vic (88) as affordability remains a constraint whereas there are much more positive assessments in Qld (121) and WA (122).
The Westpac Melbourne Institute Index of House Price Expectations edged 0.4% lower to 135. Price expectations continue show a sharp slide in NSW where the state index fell a further 12% in December to be down by 24% over the year. In contrast the Vic index was up 2% for the month and 10% for the year, with Qld and WA posting strong gains in the month (up 8% and 9% respectively). The variations mainly reflect the sharper slowdown in price growth evident in the Sydney market.
Responses to additional questions on the ‘wisest place for savings’ continue to indicate high levels of risk aversion. Nearly two thirds of consumers still favour safe options – deposits, superannuation or paying down debt – with only 12.8% nominating real estate and 8% nominating shares. About the same proportion of consumers favour ‘pay down debt’ (20.4%) as favour real estate and shares combined.
The Reserve Bank Board next meets on February 6. As discussed above, markets and general commentary have cooled their fervour for rate hikes in 2018. In turn that has helped boost Consumer Sentiment along with other factors discussed above.
However we doubt whether this welcome lift to confidence will be sufficient to see the Bank achieve its ambitious growth forecast in 2018 of 3.25%. Constraints around incomes; savings; and debt are still likely to keep consumer spending growth below trend.
The Bank’s forecasts for core inflation (1.75% in 2018) and the cooling in the Sydney property market (which is once again apparent in this survey) are also likely to be significant headwinds to higher interest rates.
We confirm our view that the cash rate is likely to remain on hold at 1.5% through 2018.
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Time to buy NSW dwelling sentiment weakening: Westpac's Bill Evans

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Westpac is cutting fixed interest rates on new interest-only loans by up to 0.4 percentage points.
Interest-only loans for owner-occupiers are being cut by 0.15 percentage points for two and three-year terms, to 4.09% and 4.19%, respectively.
Westpac said the lower rates would be available only to new customers, in a sign the lender is looking to grab market share from rivals.
It comes after several SMALLER banks have cut their fixed interest lending rates in recent weeks, with the Mozo comparison website, signalling lenders including Bankwest, CUA, Heritage Bank, ME Bank and Teachers Mutual Bank all reduced some fixed interest rates over the past month.
Westpac-owned brands are joining smaller rivals by cutting fixed rates across two and three-year terms, for both owner-occupiers and property investors.
Westpac-owned St George, Bank of Melbourne and BankSA have cut rates on two-year fixed loans for investors paying only interest by 0.4 percentage points, to 4.09%.
Fairfax Media recently noted fixed interest rates are set off bond rates, and tend to move in response to expectations about the future direction of the cash rate. 
A note to mortgage brokers said the deepest cuts would be for interest-only loans, where the Australian Prudential Regulation Authority had forced banks to clamp down earlier this year because of "heightened risks" in the housing market.
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Westpac joins smaller banks in cutting rates for IO property loans

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First home buyers have significantly reprioritised what matters most when searching for their ideal home, according to the Westpac’s 2017 Home Ownership Report.
The research, commissioned by Westpac in September, surveyed over 1,000 Australian home owners and first home buyers, and features trend data from the past two years.
The latest report demonstrates in 2017 first home buyers are less focused on buying a home in an area that is trendy or close to work, with both significantly decreasing in the ranking of “essential features” by 83 percent and 48 percent respectively, compared to 2016.
A quiet neighbourhood, access to public transport, and safety are features that have also become less important during the decision-making process, with each decreasing by 37 percent, 21 percent and 9 percent respectively.
Andy Wright, Head of Home Ownership for Westpac Group, said in the face of housing affordability challenges and rising household costs, the research suggests first home buyers are becoming increasingly flexible and willing to shift their priorities in order to achieve their ultimate goal.
“These attitudinal shifts among first-home buyers towards home ownership suggest we may see more looking to buy in areas that they hadn’t considered, with many previously thought ‘essential’ features now just ‘nice-to-have’,” Wright said.
“In fact, the market saw home loans to first home buyers rise to a four year high of 17.4 percent in September of this year, which suggests we may be already seeing the positive results of these shifts, combined with government incentives in New South Wales and Victoria.”
First home buyers are turning their attention to the inside of a home instead, as modern bathrooms and kitchens become more essential, increasing by 25% and 10% respectively since 2016.
Nearly one in five first home buyers plan to support the purchase of their first home with help from family or friends, including guarantor loans.
Meanwhile, home owner-occupiers are opting to maximise their current home and are increasingly considering renovating, growing 14 percent since 2015. The number of those considering selling a home has decreased by 11 percent compared to last year, bringing it back to the same level as 2015.
“Our data shows that home owner-occupiers are increasingly choosing to focus on improving their current home rather than selling and relocating,” Mr Wright said.
The majority of home owners (62 percent) prioritising renovating plan to use their savings as their main funding method to renovate, and 17 percent of home owners who are dipping into their savings will complement this with their home loan, possibly accessing the equity they’ve built up.
“No matter what your housing priorities are in the next year, it is important to do thorough research, make a realistic plan, and consider the best pathway to purchase that suits your individual situation,” Wright said.
“At Westpac, we have specialised home lending experts available to chat to anyone considering their next move. We’re committed to helping our customers with information and products that are best suited to their needs, and personalised advice based on their circumstances.”
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KEY TRENDS AND FINDINGS:
 Among first home buyers, many aspects of a property’s location have become less essential since 2016:
o Trendy (3% in 2017 vs 15% in 2016) o Proximity to work (25% in 2017 vs 48% in 2016) o A safe area (67% in 2017 vs 2016 73%) o Access to public transport (37% in 2017 vs 2016 47%) o Quiet (36% in 2017 vs 2016 56%)
 Among first home buyers, modern bathrooms (45% in 2017 vs 36% in 2016) and kitchens (44% in 2017 vs 40% in 2016) are increasingly considered to be essential
 Trends among home owner-occupiers who are considering a house-related action: o Renovating up by 14% since 2015 (33% in 2017, 30% in 2016, 29% in 2015)
o Selling a home down by 11% since 2016 (18% in 2017, 21% in 2016, 18% in 2015)
 Pathways to purchase: o 17% of first home buyers will complement their primary funding method for the purchase of their first home with help from family and friends
o 62% of home owners considering renovating plan to use their savings as their main funding method
o 17% of home owners will complement their savings with their home loan, possibly accessing the equity they have built up
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First home buyers reprioritised what matters when buying their first home: Westpac

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Westpac Group hopes to thwart "liar loans" by introducing stringent tests on residential property borrowers' existing and future capacity to meet repayments.
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Mortgage brokers' onus of proof will be switched from establishing whether a loan is suitable for a client to making a declaration as to why it is "not unsuitable".
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There are concerns lenders and brokers, paid by commission linked to the size of the loan, have overestimated borrower incomes and underestimated expenses.
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<a href="https://www.afr.com/business/banking-and-finance/liar-loans-hit-500b-mortgagors-are-more-stretched-than-banks-believe-ubs-20170911-gyew5j">Investment bank UBS estimated recently there are about $500 billion</a> "liar loans", which could cause problems when rates rise from record lows.
<a href="https://www.afr.com/business/banking-and-finance/banks-face-margin-squeeze-as-borrowers-forced-out-of-interestonly-loans-20171016-gz1ury">The tough new lending changes </a>from November 14 will apply to Westpac and Bank of Melbourne, BankSA and St George Bank.
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"Westpac is committed to responsible lending and meeting our conduct obligations," a bank spokesman told Fairfax Media.
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"The questions are designed to help understand your client's motivations and align the product to their requirements."
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"The declarations are there to prompt [a mortgage broker] to explain the implications of product choice and their features so a client can make more informed decisions."
 Clients will even be quizzed on having dependents with special needs that might require long-term spending on care and treatment.
It will apply to eight types of loans including fixed interest, interest only, loans for refinancing and debt construction and mixed purpose.
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<div>Questions will cover clients' foreseeable changes, but also special circumstances, such as those approaching retirement age during the loan term.</div>
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