Property developer One Living, backed by former Macquarie banker turned investment manager Chris Green’s investment firm, has unveiled plans to bring more institutional capital into housing to help address the national supply crisis.

The New York-based investor has focused his firm, GreenPoint Partners, on addressing the supply shortage hitting middle market housing in Australia.

It is backing the new One Living business to develop more than 1000 units along the eastern seaboard. The new firm is starting with a development on Mona Vale Road, on the border of Mona Vale and Pymble, in Sydney’s Northern Beaches, with around 140 apartments planned. They are eyeing off more sites across the city.

With cost pressures rising in the industry, One Living’s model is to be a vertically integrated developer-builder, so it can respond directly to the housing gap by removing the cost inefficiencies embedded in traditional residential delivery.

“We are building a platform designed to operate at scale and starting in a market where there’s a clear need for quality, attainable housing,” One Living joint managing director Joseph Scuderi said.

“It’s that missing middle – it’s that attainable end of housing… that’s what most Australians invest into and what Australians can actually afford.”

<img alt="Mona Vale" data-entity-type="file" data-entity-uuid="798dfa93-4941-4db6-a696-31e9dc18e81c" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%202.31.50%E2%80%AFPM.png?VersionId=mKBqi5C_DmeiXS.AtJkcR8LQIxqCqmFi" />

GreenPoint Partners brings years of experience assembling and scaling real estate operating businesses across major markets. And Green sees a big opportunity in Australia.

“For its size, sophistication and importance to the community, Australia’s living sector has remained largely under-institutionalised, which represents significant opportunity,” Green said. “GreenPoint identified that gap, assembled the right team, and is backing One Living to build a platform that is aligned to market needs.”

Green said being a builder-developer would give the company the capacity and flexibility it required to deliver reasonably-priced homes.

“We want it to be at that attainable level; not super high end luxury but at that attainable level,” he said.

<img alt="Mona Vale" data-entity-type="file" data-entity-uuid="74a5344a-4b26-4d4a-ada3-056b1220be77" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%202.32.15%E2%80%AFPM.png?VersionId=vY8hXHO4reBMdO8ZXMWCNtGZJofUPQ3j" />

&nbsp;

One Living will undertake a component of affordable housing in its schemes, which it will own and operate, and it could also run build-to-rent on some sites.

Green praised local policy settings.

“The NSW government is being very supportive, strategic and pragmatic in terms of how do we generate more supply of housing,” he said. “We think it’s actually positive for development and the bit that’s been lacking at that attainable level is that it’s lots of relatively small private developers, whereas we want to create an institutional platform.”

One Living is also&nbsp;looking at high-density projects and could take on more institutional funding in the future.

“The way we will be able to achieve economies of scale is through size,” Green added.

Joel Robinson

One Living enters Sydney's new apartment market with Northern Beaches site acquisition

It's been several years since there's been an opportunity to buy a brand new townhome in Melbourne's coastal suburb of Mordialloc. Even apartment developments in recent times have been few and far between in the area.

Local developer LDS Property identified the gap in new housing, securing a site on White Street, directly opposite&nbsp;Woodlands Golf Club Mordialloc. They've recently launched&nbsp;<a href="https://www.apartments.com.au/new-townhouses/wm-residences-mordialloc-102-white-street-mordialloc-vic-3195">WM Residences</a>, just 13 townhouses which they have already started building.

Projects by Buxton Director Heath Thompson, who is selling WM Residences, says the townhouses x that perfect middle ground be

"Mordialloc residents have had limited options to downsize within the suburb, often forcing them to look elsewhere despite long-standing ties to the area," Thompson says.

"With very little comparable new supply coming to market, projects like WM Residences are well placed, particularly as buyers look to capitalise on current conditions amid constrained supply."

[smartcode_project:default project_id=134646 project_image_fid=6109]

The development, designed by regarded architecture firm&nbsp;<a href="https://www.apartments.com.au/architects/ewert-leaf">Ewert Leaf</a>,&nbsp;adopts a deliberately restrained architectural approach, focusing on simplicity, durability and liveability rather than overt design gestures.

The boutique scale is central to the offering. With only 13 three-bedroom residences, each home is configured to prioritise functional layouts and everyday use, supported by private terraces and secure two-car garages.

Ewert Leaf’s design response leans into a calm, neutral material palette. Interiors are defined by oak flooring, white walls and soft finishes, creating a consistent and understated backdrop. The approach avoids trend-driven detailing in favour of longevity, with an emphasis on natural light and spatial clarity.

[smartcode_project:default project_id=134646 project_image_fid=6110]

Beyond aesthetics, the homes are designed to meet contemporary performance expectations. Each residence targets a minimum 6-star energy rating, incorporating double glazing, comprehensive insulation and all-electric Bosch appliances.

The project’s location supports a walkable coastal lifestyle, sitting within close proximity to Mordialloc’s foreshore, Main Street retail strip and the train station. Local cafés and dining venues, including Suburbia Deli and Hendriks Café, are within a short walk, reinforcing the area’s established neighbourhood character.

[smartcode_project:default project_id=134646 project_image_fid=6116]

While <a href="https://www.apartments.com.au/developments/mordialloc-vic-3195">Mordialloc</a> is often defined by its beach and pier, the project taps into other areas of day to day living, offering easy access to local food, casual dining and transport, rather than positioning itself purely as a lifestyle retreat.

WM Residences reflects a continued trend across Melbourne’s coastal suburbs towards smaller-scale, design-led townhouse developments, particularly on infill sites where proximity to amenity is already established.

With construction commenced prior to its market entry, the project aligns with a growing preference among buyers for developments with visible progress and defined delivery timeframes.

[smartcode_project_cta:default project_id=134646]

WM Residences fills gap in Mordialloc townhouse market

&nbsp;

Developer GURNER™ Group has revealed $1.65 billion in residential sales nationally across the 12 months to December 2025, driven largely by the continued momentum of its Docklands wellness-focused precinct, Elysium Fields.

The sales result was generated across seven projects in Victoria and New South Wales, headlined by Elysium Fields, GURNER™’s $2.75 billion mixed-use precinct planned for Harbour Esplanade in Docklands.

The project has recorded more than $500 million in sales across the first three towers, equating to around 580 apartments sold.

The first tower, Helios, has now sold out of its 240 private residences, with GURNER™ preparing to release a premium penthouse collection comprising 15 three-bedroom penthouses in coming weeks.

[smartcode_project:default project_id=144441 project_image_fid=370975]

Elysium Fields is being developed on the long-held 20,000 sqm Docklands site at 208-226 Harbour Esplanade, which had remained undeveloped for more than two decades prior to GURNER™ taking over the project around four years ago.

Construction has now commenced across four towers ranging between 18 and 30 storeys, with Hamilton Marino and Maxcon appointed as builders.

Once complete, the precinct is expected to comprise around 1,100 residences, alongside retail, hospitality and public realm uses integrated throughout the site.

[smartcode_project:default project_id=144441 project_image_fid=370981]

Designed by Fraser &amp; Partners in collaboration with GURNER™ Design House, the project has been positioned around the developer’s broader focus on wellness-led residential living.

“We don’t sell apartments. We create a true luxury lifestyle that simply doesn’t exist elsewhere in the market today,” Founder and Executive Chairman Tim Gurner said.

“To deliver that requires an extraordinary level of detail, coordination and discipline across multiple verticals, from design and hospitality through to wellness and service.”

“We’ve always believed that living extends far beyond the physical residence. It’s about how you feel the moment you arrive, how you live day-to-day, and the ecosystem that supports that.” 
[smartcode_project:default project_id=144441 project_image_fid=370977]

The project’s design places a heavy focus on landscaping, wellness amenities and biophilic design principles.

Plans include around 3,700 sqm of landscaped gardens and open space throughout the precinct, alongside a retail and dining offering spanning approximately 5,000 sqm.

The broader public realm strategy centres around what GURNER™ describes as the “Path of Life”, an urban forest and landscaped pedestrian environment intended to connect the various buildings and wellness spaces across the precinct.

The apartments themselves will incorporate a range of wellness-focused inclusions, including purified air and water systems, circadian lighting, antimicrobial surfaces, and optional in-home wellness upgrades.

[smartcode_project:default project_id=144441 project_image_fid=370980]

Gurner said the company’s experience through its Saint Haven wellness clubs had directly informed the residential offering now being incorporated into Elysium Fields.

“We’re seeing a clear global shift toward longevity, performance and proactive health,” Gurner said.

“Our role is to deliver that in a way that feels seamless, highly private and beautifully resolved within the environments we create.”

A large component of the wellness offering is planned through the resident amenity and health facilities proposed within the precinct.

That includes plans for bathing and recovery facilities spread throughout the towers, incorporating mineral pools, saunas, steam rooms, flotation therapy, red light therapy and wellness lounges.

The developer is also seeking approvals for what it describes as a “reverse ageing medical clinic” within the precinct.

[smartcode_project:default project_id=144441 project_image_fid=370978]

According to project information released by the group, the proposed facility would include cryotherapy, IV infusion therapy, infrared and dry saunas, PEMF beds, MRIs, DEXA scans, brain scans and blood analysis services.

Within the first tower, Helios, residents will also have access to a dedicated amenity offering known as the Sky Private Club.

The upper 15 levels of the building will include private lounges, dining spaces, rooftop amenities and optional private wellness studios integrated within residences.

The Helios tower itself comprises 260 apartments ranging between 60 sqm and 300 sqm, including a collection of penthouses.

That includes a planned two-storey penthouse spanning around 600 sqm with uninterrupted bay views.

The Elysium Fields precinct is being delivered in partnership with Digital Harbour Holdings, a consortium that includes the Liberman family, which controls the development rights across the Docklands site.

[smartcode_project:default project_id=144441 project_image_fid=370979]

The sales result comes as GURNER™ continues expanding its national development pipeline beyond Victoria.

“We have a strong pipeline across Australia and are now focused on scaling into key markets including New South Wales and Queensland, while continuing to build on our Melbourne base,” Gurner said.

“We currently have more than $3 billion in the market, growing to over $5 billion by October, and expect to materially outperform last year in the 2026 calendar year.”

The result also reflects the continued strength of the upper-end apartment market in Melbourne, particularly for owner-occupier-focused product with large-scale amenity and lifestyle offerings.

[smartcode_project_cta:default project_id=144441]

Record result anchored by the Group’s “utopian” Elysium Fields precinct – defying market headwinds in Docklands.

Elysium Fields drive Gurner to $1.65 billion in apartment sales over 2025

National Australia Bank (NAB) will fund <a href="https://www.apartments.com.au/new-apartments/palmera-residences-gold-coast-18-garfield-terrace-surfers-paradise-qld-4217">Palmera</a>, a $1 billion, 52-level luxury residential tower being developed by Central Equity in one of the Gold Coast’s most tightly held coastal locations at Northcliffe.

The project, launched recently by <a href="https://www.apartments.com.au/developers/central-equity">Central Equity</a>, one of Victoria’s largest private residential developers, comes at a time when construction funding for large residential developments has become increasingly competitive as lenders tighten exposure to the sector.

Multiplex has been appointed the builder, and construction is now underway.

[smartcode_project:default project_id=108274 project_image_fid=365784]

Since its first project, Central Equity has delivered more than 85 residential developments with a combined end value exceeding $8 billion.

Palmera reflects Central Equity’s growing focus on the Gold Coast luxury apartment market and continues a relationship between Central Equity and NAB that dates back to the late 1980s, when the bank funded one of Melbourne’s earliest inner-city residential towers at a time when high-rise apartment living in the CBD was largely unproven.

“NAB’s funding of Central Equity’s $36 million CBD development in the late 1980’s to the financing of the billion-dollar tower today highlights the long-term relationship between the two organisations in delivering major residential projects” said Central Equity Founder and Chairman Eddie Kutner.

He said NAB’s early support was instrumental in helping establish the company’s development model.

“When we commenced our first residential tower in the late 1980s the concept of funding off-the-plan apartments was still largely untested in Australia,” Kutner said.

“NAB recognised the opportunity early and supported the project when others were uncertain. That relationship has now continued for more than 37 years across many developments.”

[smartcode_project:default project_id=108274 project_image_fid=365771]

Central Equity was established in 1987 when Melbourne’s CBD and Southbank precinct were still dominated by warehouses and commercial buildings. Fewer than 100 residents lived in Southbank at the time, and large-scale residential development in the inner city was not widely considered.

Recognising changing demographics and lifestyle preferences, the company began developing high-rise residential projects designed to bring permanent residents into the city centre.

Central Equity has provided accommodation for approximately 40,000 residents across Melbourne’s CBD and Southbank, while also incorporating supporting infrastructure including essential lifestyle facilities like retail spaces, childcare facilities and neighbourhood activity centres.

Central Equity has spent many years assembling the Palmera development site on the corner of Garfield Terrace and Frederick Street in Northcliffe, creating a supersite of around 3,300 sqm.

The developer said the Palmera apartment tower reflects its long-term view of the Gold Coast as a growing and increasingly diversified economy.

[smartcode_project:default project_id=108274 project_image_fid=365768]

Supported by infrastructure including the light rail network, major road upgrades expanded education, hospital and medical facilities and continued expansion at the Gold Coast Airport with more international and domestic flights.

Positioned in the tightly held Northcliffe precinct, the 52-level tower will deliver 347 apartments, targeting buyers seeking a high-end coastal lifestyle, from downsizers to interstate investors.

Designed by Marchese Partners with interiors by DBI, Palmera has been conceived as a next-generation residential offering, featuring a collection of oversized apartments, with premium three-bedroom residences offering sweeping northern views stretching from Surfers Paradise through to Burleigh Heads.

[smartcode_project_cta:default project_id=108274]

NAB funds $1 billion Surfers Paradise apartment development, Palmera

Two years after completing one of the newest developments in North Sydney, developer <a href="https://www.apartments.com.au/developers/aqualand-australia">Aqualand</a> is turning its attention to the rapidly evolving St Leonards apartment market.

The developer, which completed AURA by Aqualand on North Sydney's Walker Street, has lodged plans for a 5,918 sqm site at <a href="https://www.apartments.com.au/new-apartments/33-37-herbert-street-st-leonards-nsw-2065">33-37 Herbert Street, St Leonards,</a> seeking approval for a pair of residential towers rising above a shared podium opposite Royal North Shore Hospital.

The proposal forms part of the broader transformation underway across the St Leonards-Crows Nest precinct, where former industrial and commercial sites are increasingly being redeveloped into high-density mixed-use projects tied to major transport infrastructure.

<img alt="Aqualand" data-entity-type="file" data-entity-uuid="2cc428cf-fe70-4cac-9cd5-264ad53af62c" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%209.51.56%E2%80%AFAM.png?VersionId=otKSnHtbjAvAddOnovyXQMgcAwE6DMe1" />

According to the planning documents, the site sits “within the St Leonards–Crows Nest Strategic Centre, identified by the NSW Government as a key area for accommodating future jobs and housing across Sydney.”

The proposal has been designed by fjcstudio, formerly FJMT Studio, and is being progressed through the State Significant Development pathway due to its scale and affordable housing provision.

The scheme would comprise 413 apartments, including 46 affordable housing units, alongside retail and commercial uses fronting Herbert Street. The project would also include communal open space, landscaping, a swimming pool, gymnasium, children’s play areas and podium-level resident amenities.

Planning documents show the development would consist of a part-13, part-39 storey tower form positioned above a four-storey podium.

“The development comprises a unified podium that activates the street interface, and two setback towers to accommodate new housing supply while maintaining an appropriate human scale at ground level,” fjcstudio noted in its Design Report.

The northern and southern towers have been shaped to respond to the surrounding skyline while also limiting overshadowing impacts to nearby public open space, particularly Talus Reserve.

The design report said the differing tower heights were intended to “contribute to a varied skyline while responding to the surrounding built form context and solar access considerations.”

<img alt="Aqualand" data-entity-type="file" data-entity-uuid="36da62dc-ff9e-41f2-a7e3-7be38373751c" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%209.51.45%E2%80%AFAM_0.png?VersionId=Mo6Rp2r.XRLTzIfg_PEEpw8NepDH8UBs" />

The site sits directly opposite Royal North Shore Hospital and within walking distance of both St Leonards Station and the new Crows Nest Metro station.

While the site itself sits just outside the formal Crows Nest Transport Oriented Development boundary, the planning documents repeatedly reference its alignment with the broader TOD objectives reshaping the Lower North Shore.

“The site is located adjacent to St Leonards Station and in close proximity to Crows Nest Metro which is within the Crows Nest Transit Orientated Development Accelerated Precinct which has been identified by the NSW Government to support housing delivery,” the Design Verification Statement noted.

According to fjcstudio, the project has been designed to respond to the broader transition occurring across St Leonards, where increasing residential density is being concentrated around transport infrastructure and employment hubs.

“The broader precinct is undergoing significant change, with a mix of existing mid-rise buildings and newer high-density developments,” the report stated.

“Recent and approved projects indicate a consistent shift toward taller built form, typically organised as tower-and-podium typologies with more active ground levels.”

The proposal includes close to 6,000 sqm of retail and commercial space across the ground floor and podium levels, designed to create a more activated street edge along Herbert Street.

Aqualand’s plans would also introduce a landscaped podium shared between the two towers, with communal open space in the form of a podium rooftop designed to support resident interaction and improve urban greening outcomes. The scheme would also introduce pocket parks at the northern and southern ends of the site, including a landscaped area at the corner of Herbert and Ella streets designed to improve pedestrian amenity and soften the streetscape.

&nbsp;

The proposal is being progressed through the NSW Government’s Housing Delivery Authority pathway, which was introduced to accelerate housing supply across the state. The application was declared State Significant Development in April 2025 following an expression of interest process.

<img alt="Aqualand" data-entity-type="file" data-entity-uuid="faf6d97d-2671-454f-b85a-fe1c6a7be608" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%209.51.49%E2%80%AFAM.png?VersionId=diVd28OBVr5.YV.7prrOz.uAanwwwm7a" />

St Leonards has been particularly active with new developments in recent weeks. Developer SP Setia’s <a href="https://www.apartments.com.au/news/nsw/first-look-sp-setia-targets-st-leonards-skyline-with-40-storey-tod-tower">plans for a new 42-storey tower</a> recently went on exhibition through the same pathway, while <a href="https://www.apartments.com.au/news/nsw/first-look-stockland-plans-52-storey-538-apartment-st-leonards-tower">Stockland’s 52-storey tower proposal</a> was also recently unveiled.

Aside from the St Leonards project, which is expected to take around nine months to move through the approvals process ahead of a potential 2027 launch, Aqualand is also preparing to launch Boronia, a new apartment project in Roseville comprising around 111 apartments on Larkin Street.

The developer also has approvals in place for the next stage of the Barangaroo precinct, which will feature new residential, retail, hospitality and community uses, alongside a new metro entry across the five-hectare site.

More than 50 new retail destinations are planned for Central Barangaroo, alongside a 270-metre-long boulevard connecting Hickson Park to Nawi Cove. Together with Harbour Park, more than 50 per cent of the precinct will comprise public open space and parkland.

First look: Aqualand joins St Leonards apartment party

Westpac

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Brisbane dwelling prices will outperform those in Sydney and Melbourne in 2020, according to Westpac.
They believe the Queensland capital will see eight per cent increases next year, above the six forecasted for the two major capital city markets.
Westpac suggest the strong momentum in Sydney and Melbourne will fade as affordability issues re-emerge and population slows.
Brisbane is well positioned due to its affordability and population inflows.
 "Momentum heading into 2020 is clearly positive, albeit uneven across markets," Westpac advised.
They said in the near term, the main guidance comes from current price momentum, auction markets, listings and their buyer sentiment measures.
"Nationally, these are all showing positive prospects for early 2020 with price growth accelerating, auction clearance rates riding high in Sydney and Melbourne, listings showing a clear tightening and a positive pulse from buyer sentiment pointing to a further lift in demand.
"The cyclical momentum is strongest in Sydney and Melbourne but is also showing a notable pick up in Brisbane. Adelaide and Hobart are seeing a more muted lift with Perth yet to pull out of its multi year price decline.
<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/2019/11/26/Westpac%20forecast.jpg" alt=""> 
They predict a number of factors to shape residential property over 2020.
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<div class="column">"The first is policy - we expect the RBA to cut rates by another 25bps at its February meeting and to turn to so-called unconventional policy measures to provide additional stimulus," Westpac advise.</div>
<div class="column"> </div>
<div class="column">The second factor is supply, both in the form of sellers returning to the market and the physical supply of new dwellings. New listings fell to extreme lows in 2019.</div>
<div class="column"> </div>
<div class="column">"Our analysis suggests the listing cycle tends to follow the sales cycle by about six months. A likely lift in new listings will test the depth of demand in the first half of 2020. The supply of newly built dwellings will also remain elevated. Completions eased back from a record 218k in 2018 to an estimated 205k in 2019.</div>
<div class="column"> </div>
<div class="column">"Our projections have this easing to around 175k in 2020, still well above average pre-boom levels with about 50k of that high rise dwellings. New supply could prove difficult to absorb and will weigh on prices and rents in some segments – Sydney’s rental vacancy rate and Melbourne’s stock of unsold units being key areas to watch.</div>
<div class="column"> </div>
<div class="column">Westpac believe would-be buyers in Sydney and Melbourne will be priced out of the markets and will seek more affordable markets if the current price resurgence continues, which will slow growth.</div>
<div class="column"> </div>
<div class="column">"As 2020 unfolds we expect another dynamic to come to the fore around affordability and population flows.</div>
<div class="column"> </div>
<div class="column">"Despite the price correction in 2017-18 and a further lowering in interest rates, affordability remains relatively stretched in Sydney and Melbourne.</div>
<div class="column"> </div>
<div class="column">"The resurgence in prices see these markets run into the same affordability constraints that emerged in 2016-17 as prices near previous peaks.</div>
<div class="column"> </div>
<div class="column">"Investor activity will lift as low deposit rates and equity volatility drive more interest in real estate but funding is likely to remain a constraint on investors."</div>
</div>
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jrobinson-rf4aSBido9

Brisbane to outshine Sydney and Melbourne dwelling prices in 2020: Westpac

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EXPERT OBSERVER
Despite a slight improvement in the month, the Leading Index growth rate remains materially below trend and continues to point to weak economic momentum carrying well into 2020.
This below trend "theme" for the Australian economy is consistent with Westpac’s current forecast for GDP growth in 2020 of 2.4%, compared to a trend growth rate of 2.75%.
The Reserve Bank has recently released its revised growth forecasts for 2019, 2020 and 2021. It has maintained its view that year on year growth in 2020 will return to trend, at 2.8%, for the first calendar year since 2016.
The main differences between Westpac and the RBA are around the timing and extent of the recovery in residential dwelling investment and the outlook for business investment.
We are broadly in agreement that another below trend year for household expenditure can be expected with the outlook particularly dependent on policy responses and the risks being to the downside.
<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/2019/11/20/Westpac%20Leading%20Index.jpg" alt="">
The Leading Index growth rate has deteriorated over the last six months from –0.53% in May to –0.91% in October. The main components driving the 0.39ppt shift have been a sell-off in commodity prices (–0.43ppts); a more mixed performance on the Australian sharemarket (–0.20ppts); a deterioration in consumers’ unemployment expectations (–0.17ppts), in consumer expectations more generally (–0.10ppts); and a slowdown in monthly hours worked (–0.07ppts).
These negatives have been partially offset by a further improvement in the yield spread following the RBA’s October rate cut (+0.31ppts) and marginal improvements in US industrial production (+0.17ppts) and dwelling approvals (+0.11ppts).
The Reserve Bank Board next meets on December 3. Westpac expects the Board to hold the cash rate steady at that meeting. The minutes of the November Board meeting signalled that the Board continues to hold a clear easing bias while, for now, remaining in ‘monitor mode’.
We expect that by next February the Board will have received enough information on the impact of the three cuts we have seen since June to acknowledge the need to reduce the cash rate by a further 0.25%, maintain a clear easing bias and consider introducing unconventional policies.
BILL EVANS is the Chief Economist at Westpac.
This was first published on <a href="https://westpaciq.westpac.com.au/Article/41208/14186/" target="_blank">Westpac IQ</a>.
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bevans-rYk9SxEa4r

Westpac's Leading Index remains below trend

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Westpac shares are down nearly five per cent in early morning trading after they returned to the ASX.
The share price decline came after Westpac announced its profits slid 16 per cent over FY2019.
Shares slipped from $27.88 to $26.50 per share.
Prior to the market opening, Westpac announced at 8:00am their $2 billion capital raising, announced only yesterday, has been completed.
Some 79 million new fully paid ordinary shares have been issued at $25.32 per share
Westpac Group CEO Brian Hartzer said 2019 has been a disappointing year.
"Financial results are down significantly in a challenging, low-growth, low interest rate environment," he said, adding that 2020 will "continue to be challenging".
"However, we believe our service led strategy, disciplined growth and solid portfolio of businesses will deliver for shareholders and customers," Hartzer added.
Westpac's mortgage portfolio looked relatively healthy <a href="/news/small-uptick-in-westpacs-mortgage-arrears-despite-dip-in-perth">despite an uptick in arrears</a>.
They continued to reduce their number of interest only loans, which now make up around a quarter of their loan book.
Their total home loan portfolio grew, albeit at a slow rate.
 
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Westpac shares fall on ASX capital raising

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Westpac has posted a 16 per cent loss in profits over the FY2019. 
They wrote $61 billion worth of home loans over the 12 months to September, with their mortgage portfolio growing from $444.7 billion to $449.2 billion.
Their home loan delinquencies have continued to rise over the year across the board, with a slight uptick over the last six months.
Mortgage holders behind on their mortgage over 30 days, and 90 bays behind are now up around 20bps since this time last year.
The biggest jump came in the first half yearly update, but they've continued to nudge higher in the second half of 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/2019/11/4/Westpac%20mortgage%20portfolio.jpg" alt="">
Western Australia accounted for the spike in the first half of the year for delinquencies over 90 days, however they have started to fade following suggestions the housing market has bottomed.
The spike came from Queensland, with New South Wales, the Australian Capital Territory and Victoria continuing to head in the wrong direction.
Some 160 more properties over the year were taken over by the bank.
<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/2019/11/4/Mortgage%20delinquencies%20Westpac.jpg" alt=""> 
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Westpac Group CEO Brian Hartzer said 2019 has been a disappointing year.
"Financial results are down significantly in a challenging, low-growth, low interest rate environment," he said, adding that 2020 will "continue to be challenging".
"However, we believe our service led strategy, disciplined growth and solid portfolio of businesses will deliver for shareholders and customers," Hartzer added.
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<h1>Mortgage Portfolio</h1>
Westpac's owner-occupier percentage continued to grow, as did their percentage of first home buyers taking out home loans.
They continued to trim their interest only home loans which is down eight per cent over the year, now just over a quarter of their loan book.
Investor property loans dropped off slightly over the last six months, having been unmoved in the first half of the financial year.
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Small uptick in Westpac's mortgage arrears despite dip in Perth

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Westpac is raising the maximum loan-to-valuation ratio (LVR) for interest-only loans to property investors to 90 per cent, from 80 per cent.
This move will allow property investors to take out interest-only loans with smaller deposits.
New interest-only loans to owner-occupiers will remain subject to an LVR cap of 80 per cent.
The bank's general manager of home ownership Will Ranken told Domain that the "change will provide a competitive proposition for investors looking to purchase their next property."
Since APRA removed the cap on the proportion of new interest-only lending Westpac haven't been the only Bank in the Big Four to make a move like this.
Earlier this year ANZ also raised LVR limits for property investors with interest-only loans.
There have also been a series of rate cuts as banks bring their interest rate down in line with the recent cash rate cuts.
Bell Potter analyst TS Lim said banks would try to attract property investors now that property prices had bottomed, but he thought lenders would still be "pretty measured."
"It's an area where the banks are chasing market share. I think it's going to grow, but not as quickly as before. People are still wary," Mr Lim said.
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j.ballantyne1990-6AQqhLzZaK

Westpac loosens investor loan restrictions on interest only loans

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EXPERT OBSERVATION
The growth rate is now materially below trend and is signalling that growth through the first half of 2020 is likely to remain below trend.
That profile is broadly consistent with Westpac’s forecasts which have growth in the first half of 2020 at an annualised pace of 2.4% consistent with the overall growth pace in 2020 of 2.4%.
This forecast contrasts with the Reserve Bank’s current forecast of 2.8% although that forecast may be revised when the Bank releases its new forecasts on November 8.
<a href="https://www.propertyobserver.com.au/images/2019/10/16/LEADING%20INDEX.jpg" target="_blank">Click here</a> to enlarge: 
<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/2019/10/16/LEADING%20INDEX.jpg" alt="">
The Leading Index growth rate has deteriorated over the last six months from –0.56% in April to –0.92% in September.
The main components driving the 0.36ppt shift have been a further weakening in dwelling approvals (–0.25ppts); a deterioration in consumer sentiment (–0.21ppts); a sell-off in commodity prices (–0.20ppts); and slower growth in monthly hours worked (–0.11ppts).
These negatives have been partially offset by a reduced drag from the yield spread as the RBA’s rate cuts have lowered short term interest rates (+0.24ppts), and a slight improvement in US industrial production (+0.23ppts).
The Reserve Bank Board next meets on November 5. Westpac expects the Board to hold the cash rate steady at that meeting.
On October 15 the Bank released the minutes of the October Board meeting. The minutes contained a detailed justification for the decision to ease the cash rate from 1% to 0.75% at that meeting.
In particular it emphasised the benefits to the economy of a lower currency and improved cash flow for households, while recognising some potential negative impact on confidence of ultra-low rates.
That issue was subsequently highlighted by the 5.5% fall in the Westpac MI Consumer Sentiment Index in response to the October rate cut.
It seems clear that the Board expects to ease rates further although we believe the November meeting will be a little too soon. Westpac continues to expect that the next rate cut will come in February next year.
Read full report '<a href="https://westpaciq.westpac.com.au/wibiqauthoring/_uploads/file/Australia/2019/October/er20191016BullLeadingIndex.pdf" target="_blank">Westpac-MI Leading Index September' (PDF 116kb)</a>
BILL EVANS is Chief Economist for Westpac
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Economic growth likely to remain below current RBA forecast: Bill Evans

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Westpac are the last of the big four to fail to pass on the full rate cut.
They've <a href="/expert-insights/finance/nab-and-cba-fail-to-pass-on-full-rate-cut">cut the same amount as NAB</a>, dropping their variable home loan rates by 15 basis points.
Commonwealth Bank drops their rates by just 0.13 per cent, the lowest out of the big four. ANZ were <a href="/expert-insights/finance/anz-cut-interest-rates-by-just-0-14">the third to cut their rates</a>, by 0.14 per cent.
“Westpac will be decreasing interest rates by 15 basis points for variable home loan customers, bringing our Standard Variable Rate (SVR) to the lowest we have on record for owner occupiers with principal and interest repayments,” David Lindberg, Westpac chief executive, consumer said.
“In making the decision, we took into account the reduction of the official cash rate and the commercial pressures of the low interest rate environment.
<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/2019/10/2/Westpac%20rate%20cut.jpg" alt="">
“For an owner occupier customer with a standard variable home loan of $400,000 on principal and interest repayments, this reduction could result in a saving of $36 per month, or $432 each year.
“Providing the support and finance to help Australians into their homes is a core part of our business strategy.
"Today’s announcement will assist customers wanting to get ahead on home loan repayments, as well as new home buyers looking to purchase a property,” Lindberg said.
The following interest rate changes will come into effect on Wednesday 16 October 2019:
<ul>
<li>Variable home loan (owner occupier) rate has been reduced by .15% p.a. to 4.83% p.a. for customers with principal and interest repayments.</li>
<li>Variable residential investment property loan rate reduced by .15% p.a. to 5.38% p.a. for customers with principal and interest repayments.</li>
<li>Variable home loan (owner occupier) rate reduced by .15% p.a. to 5.42% p.a. for customers with interest only repayments.</li>
<li>Variable residential investment property loan rate reduced by .15% p.a. to 5.64% p.a. for customers with interest only repayments.</li>
</ul>
 
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Westpac the final big four bank to fail to pass on full rate cut

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EXPERT OBSERVER
The robust update on employment continues but with strong growth in working age population, and rising participation, it is not enough to prevent a rise in unemployment. Participation hit a new record high of 66.2 with the unemployment rate drifting up to 5.3% from 5.2%. Underemployment is also moving higher, 8.56% from 8.42% in July and back to on par with May 2019 which was the recent high. 
Westpac is forecasting the unemployment rate to continue to rise from here, on the back of a soft patch in employment, to 5.4% by end 2019 but given unemployment is now 5.3%, this is no longer a big call. 
In the year to August, the largest share of employment gains have been for full-time females (3.1%yr), male full-time employment (1.9%yr) has grown slower than total employment (2.5%yr), suggesting employment gains remain focused in the services industries that are rich in female employment. We get an industry update on employment next week. 
Rising unemployment in this update gives us some comfort that the RBA is on track to cut rates at the October Board meeting. The RBA has also given more attention to underemployment, than just unemployment on its own, when thinking about the outlook for wages a further indicator the labour market is moving in the wrong direction. 
The August Labour Force Survey reported a 34.7k gain in employment. As we head through the third quarter of the year, growth in employment remains quite robust with a three month average gain of 24k in August, almost unchanged from 25.9k in July and only slightly down from 31.9k in May.
<img src="https://westpaciq.westpac.com.au/wibiqauthoring/_uploads/image/bulletin/Justin_Images/Sept_OCt18/EmpAug2019.JPG" alt=""> 
Back in May the survey reported a strong +40.4k gain in employment with participation surging to 66.0%, boosting the labour force and therefore holding unemployment flat at 5.2% despite the very strong gain in employment. Since then, while there has been some month to month volatility in employment, the trend remains robust and yet the unemployment has drifted up to 5.3%.
Why is this so? A combination of robust working age population growth and, perhaps more importantly, participation rising to new record high.
<img src="https://westpaciq.westpac.com.au/wibiqauthoring/_uploads/image/bulletin/Justin_Images/Sept_OCt18/AugLFUnempPart.JPG" alt="">
In the year to July, employment has grown 311.0k or 2.5%. The pace of employment growth has eased back from 2.8%yr in May but it is still stronger than the 2.2%yr at the end of 2018, while the six month annualised pace has lifted to 2.6%yr from 2.3%yr in July. Our Jobs Index suggests employment should be growing around 2.3%yr currently before slowing to 2.0%yr by year end.
<img src="https://westpaciq.westpac.com.au/wibiqauthoring/_uploads/image/bulletin/Justin_Images/Sept_OCt18/AUgLF6mthAnn.JPG" alt="">
In August, unemployment rounded up to 5.3% but given that at two decimal places it was 5.25% from 5.24% in July we think it is better to describe it as being flat. Nevertheless given the robust gains in employment this is still a disappointing outcome.
In August participation hit a new record high of 66.2% (66.15% at two decimal places from 66.06% in July) resulting in a solid 38.8k gain in the labour force. We had expected that a soft employment print associated with flat participation would have driven a rise in unemployment but given the ongoing strength in population growth, it seems that employment growth can remain sound but not robust enough to bring down, or even hold, unemployment.
Today’s update is further confirmation that we are observing a robust upward trend in participation in both NSW and Victoria and while participation has eased a little in NSW, since the May record high of 66.2%; participation in Victoria hit a new record high of 66.2%.
<img src="https://westpaciq.westpac.com.au/wibiqauthoring/_uploads/image/bulletin/Justin_Images/Sept_OCt18/FemPArtRateAug209.JPG" alt="">
Back in June we were surprised by the drop in underemployment (those employed who are willing and able to work more hours) which fell 0.4ppts to 8.2%.
Underemployment did not improve as much as unemployment through 2018 and in early 2019 had been trending higher compared to the unemployment rate.
So we were not surprised that in July underemployment bumped back up to 8.4% and in August it rose again to 8.6%. Rising underemployment is a further sign that that labour market continues to underperform and that excess capacity is rising in the economy.
<img src="https://westpaciq.westpac.com.au/wibiqauthoring/_uploads/image/bulletin/Justin_Images/Sept_OCt18/AugLFUnderemp.JPG" alt="">
Justin Smirk is ‎senior economist at the Westpac Group.
This article was <a href="https://westpaciq.westpac.com.au/Article/40323/14186/" target="_blank">first published on Westpac IQ</a>.
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Robust employment not enough to prevent rising unemployment: Westpac

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EXPERT OBSERVER
The minutes of the Reserve Bank Board’s September meeting contain similar themes to the August minutes but indicate that the Board acknowledges that it is getting closer to its next move on policy.
In August the Board minutes concluded that: “Having eased monetary policy at the previous two meetings, the Board judged it appropriate to assess developments in the global and domestic economies before considering further change to the setting of monetary policy. Members would consider a further easing of monetary policy if the accumulation of additional evidence suggested this was needed to support sustainable growth in the economy and the achievement of the inflation target over time”.
In these minutes there is no reference to previous actions. Arguably reference to previous actions is a clear sign that the Board is content to observe developments whereas not referring to previous actions there is less emphasis on the need to wait.
It is also interesting that the theme that drove the June and July decisions to cut rates: “the Australian economy could sustain lower rates of unemployment and underemployment” was repeated in these minutes whereas that particular theme was absent in the August minutes.
The minutes refer to three “developments that had a bearing on the monetary policy decision”.
<ul>
<li>The labour market – strong employment growth was recognised but the unemployment rate had remained steady at 5.2% (recall that the Governor has noted on other occasions that he would like to see the unemployment rate at 4.5%) and that wages growth “had remained low”. Indeed the minutes point out that “the upward trend in wages growth appeared to have stalled”. We are aware that the Governor sees rising wages growth as the key to a sustained lift in spending growth and higher inflation. In addition the minutes noted that “forward – looking indicators had continued to suggest that employment growth would moderate over the following six months.”</li>
</ul>
<ul>
<li>The housing market – it was noted that there was “a turnaround in established housing markets” but from the perspective of economic activity there was “further weakness in dwelling investment in the near term” and low turnover in the housing market meant that “spending on home furnishings and other housing related items was not expected to contribute to consumption growth in the near term”.</li>
</ul>
<ul>
<li>GDP growth – the Board meeting was held the day before the release of the June quarter national accounts. When the RBA released its forecasts on August 9 it was expecting GDP growth in the June quarter to be 0.8%; in the minutes it referred to an expectation of 0.5% due to the weakness of the partials in the lead up to the release. That forecast proved to be correct but the minutes did note that “private final demand was expected to be weak”. (In fact it was flat in the June quarter and down 0.4% for the year! – “weak” is probably an overstatement of the state of final demand).</li>
</ul>
On the international front the overriding theme was that “the escalation of the US–China trade and technology disputes, …had intensified the downside risks to the global outlook”. The outlook for China deteriorated somewhat and the trade disputes were weighing on East Asia generally.
On monetary policy the minutes note that markets priced in 100 basis points of easing from the Federal Reserve while generally “further monetary policy easing was widely expected “from a number of central banks.
Finally, the minutes point out that, for Australia, “ financial market pricing continued to imply that the cash rate was expected to be lowered by another 25 basis points by November, with a further cut expected in the early part of 2020”.
Conclusion
The minutes make a fairly clear case for another rate cut in 2019.
With two meetings now having passed since the last move and , from my perspective, most importantly, the key rate cut theme that “ the Australian economy could sustain lower rates of unemployment and underemployment” returning to the narrative, our central view that there is no reason to wait until November for the next move still seems reasonable.
November is typically favoured by the RBA since it is a time when it can refresh its forecasts although we are not expecting any significant changes along the lines of August when the forecast unemployment rate was lifted; the forecast pace of wages growth was lowered; and the timing of the return of inflation to the 2–3% band was pushed out by a year. The growth forecast in 2019 is likely to be lowered but the 2020 forecast should remain intact.
However, as the minutes warn, “developments in the international and domestic economies, including the labour market” will be assessed to see whether a further easing of policy is “needed”.
Westpac continues to predict cuts in the cash rate of 25 basis points in both October and February next year.
BILL EVANS is the Chief Economist at Westpac.
This was first published on <a href="https://westpaciq.westpac.com.au/Article/40295/52930/" target="_blank">Westpac IQ</a>.
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Case for RBA October rate cut intact: Westpac's Bill Evans

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ASIC has filed an appeal with the Full Federal Court of Australia against the decision of the Honourable Justice Perram regarding ASIC’s allegations against Westpac for contraventions of responsible lending provisions of the National Consumer Credit Protection Act 2009 (Credit Act). 
It has been dubbed the 'wagyu and shiraz' case.
Federal Court judge Nye Perram's judgment noted: “I may eat Wagyu beef every day washed down with the finest shiraz but if I really want my new home I can make do on much more modest fare”.
Justice Perram rejected ASIC’s action against Westpac.
ASIC had alleged that Westpac breached the laws by failing to properly take account of customers' individual declared expenses when they were applying for home loans.
It instead relied on a benchmark Household Expenditure Measure (HEM), which was criticised at the earlier banking royal commission as set too low for many customers.
By using the benchmark, thousands of Westpac customers were given loans larger than they would have been granted had the bank assessed them on their actual living costs.
On 1 March 2017, ASIC commenced Federal Court proceedings alleging, during the period between December 2011 and March 2015, Westpac failed to properly assess whether borrowers could meet their repayment obligations before entering into home loan contracts.
On 13 August 2019, the <a href="/news/westpac-win-responsible-home-loan-case-taken-by-asic">Federal Court found Westpac had not breached the responsible lending provisions</a> of the Credit Act, as Perram J decided that a lender ‘may do what it wants in the assessment process’.
 ‘The Credit Act imposes a number of legal obligations on credit providers, including the need to make reasonable inquiries about a borrower’s financial circumstances, verifying information obtained from borrowers and making an assessment of whether a loan is unsuitable for the borrower. ASIC considers that the Federal Court’s decision creates uncertainty as to what is required for a lender to comply with its assessment obligation, nor does ASIC regard the decision as consistent with the legislative intention of the responsible lending regime. For those reasons, ASIC will appeal to the Full Court of the Federal Court’, said ASIC Commissioner Sean Hughes
ASIC is currently consulting on updates to its responsible lending regulatory guidance – Regulatory Guide 209: Credit licensing: Responsible lending conduct . In February this year ASIC released a consultation paper. ASIC received 72 submissions, with 64 non-confidential submissions published on the ASIC website.
As part of our consultation ASIC recently conducted public hearings. In these hearings, ASIC heard from industry representatives, consumer groups, academics and service providers. Industry indicated it would appreciate the guidance including further clarification to assist it in complying with its obligations, for example by the use of additional case studies and examples. The hearings also highlighted that industry supports the continuation of guidance giving licensees flexibility.
ASIC intends to publish an updated RG 209 by the end of the year.
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