The ever-growing Sydney developer <a href="https://www.apartments.com.au/developers/deicorp">Deicorp</a> has commenced construction on its third project this year.

The new $640 million development, <a href="https://www.apartments.com.au/new-apartments/falcon-alexander-8-alexander-street-crows-nest">Falcon &amp; Alexander</a>&nbsp;in Crows Nest, is Deicorp's&nbsp;first foray into Sydney’s Lower North Shore and will deliver 188 apartments in a new landmark building, with 48 dedicated to Affordable Housing.

Since December, <a href="https://www.apartments.com.au/builders/deicorp-construction">Deicorp</a> has commenced construction on four projects in total that will deliver over 2,000 homes, maintaining their track record of quickly converting development approvals into commencements.&nbsp;

<img alt="Falcon &amp; Alexander" data-entity-type="file" data-entity-uuid="f17b79a0-db7b-48bc-835f-e9b3e3117561" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202025-07-28%20at%203.55.13%E2%80%AFPM.png?VersionId=.UKl.uSBs9zOeElc6jNUeuBB8EMAD5HP" />

&nbsp;

Located a five-minute walk from the new Crows Nest Metro station, prominently positioned at The Five Ways on Pacific Highway, Falcon &amp; Alexander will deliver an exclusive collection of architecturally designed one, two and three-bedroom apartments, with prices starting from $1.3 million.

Conceived by award-winning architects <a href="https://www.apartments.com.au/architects/turner-studio">TURNER</a>, Falcon &amp; Alexander will create a vibrant vertical village in the heart of one of Sydney’s most connected neighbourhoods. Thoughtfully arranged around a central atrium and lush communal gardens, residences will enjoy panoramic views over Sydney Harbour and the Lower North Shore, with interiors designed for modern, light-filled living.

Residents will benefit from premium amenities, including a resident-only skygarden, and boutique retail and dining spaces on the ground floor, all integrated with the local urban fabric.

&nbsp;

With the Crows Nest Metro station just steps from home, residents will enjoy unrivalled connectivity across Sydney’s transport network, placing everything from world-class dining to premier education and healthcare within easy reach.

<img alt="Deicorp" data-entity-type="file" data-entity-uuid="292460e8-2bc9-47c5-8805-cf59570972a2" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202025-07-28%20at%203.55.22%E2%80%AFPM.png?VersionId=UUerYKJzOGzpXyDv1nMlrV_oi6lUyiMS" />

Deicorp Founder Fouad Deiri said Falcon &amp; Alexander marks an exciting new chapter for Deicorp as it expands into Sydney’s Lower North Shore.&nbsp;

“This is a community we deeply respect, and we’re proud to contribute with a project that reflects the character, energy, and potential of Crows Nest,"&nbsp;Deiri said.

“This is an iconic location, and a great location deserves a great design. With Falcon &amp; Alexander, we’re delivering more than just apartments; it will be a new landmark for Crows Next that not only delivers housing but will benefit the community with an activated retail offering."

[smartcode_project_cta:default project_id=135323]

Deicorp Founder Fouad Deiri said Falcon & Alexander marks an exciting new chapter for Deicorp as it expands into Sydney’s Lower North Shore

Joel Robinson

Deicorp breaks ground at Falcon & Alexander, Crows Nest apartments

One of the primary characteristics of a university campus is its location in high-amenity, well-connected suburbs, as it caters to the thousands of students who walk through its doors every day.

It’s this enviable central location that makes Hamton’s newest neighbourhood so appealing to discerning buyers. The 1.6-hectare site was formerly home to a University of Melbourne campus.

This relocation paved the way for <a href="https://www.apartments.com.au/developers/hamton">Hamton</a>, best known for their $3 billion joint venture development Moonee Valley Park, a vibrant new residential community emerging around the Moonee Valley Racecourse.

[smartcode_project:default project_id=149097 project_image_fid=327680]

<a href="https://www.apartments.com.au/new-apartments/scotch-hill-gardens-hawthorn-147-robinson-road-hawthorn-vic-3122">Scotch Hill Gardens</a> benefits from excellent transport connections and local amenities, further enhanced by the revitalisation of Bills Street delivered as part of the development. Thanks to its history as a university campus, the site is within five minutes of Glenferrie and Auburn Villages and 10 minutes to Kooyong Station.

In addition, the site lies within the prestigious Scotch Hill catchment, which includes highly sought-after educational institutions such as Scotch College, Bialik, and Auburn Primary and Auburn High. This makes it an attractive location for both young families and working professionals.

Understanding that the location would appeal to owner-occupiers, particularly rightsizers and downsizers, Hamton focused on creating a collection of residences tailored to this demographic. The design prioritised community over density, with a series of low-rise buildings nestled within nature.

[smartcode_project:default project_id=149097 project_image_fid=327652]

The development retains 77 established trees on the site and will add a further 151, creating a unique topography visible from the upper levels of the building. A collaboration between placemaking specialists Woods Bagot and landscape architect Tract, the design dedicates over 40 percent of the 1.6-hectare site to landscaped green open space, seamlessly woven between the low-rise buildings.

Landscaping subtly defines boundaries between public and private zones, ensuring a harmonious blend of spaces.

[smartcode_project:default project_id=149097 project_image_fid=327686]

Inspired by nature, the masterplan reflects the organic formations of lily pads on a pond, discreet yet interconnected, sitting lightly within their context. Following the principles of “nature-based cities,” the site integrates nature, amenity, wellness, and community.

This commitment to nature complements the already well-established landscape nearby. Adjacent to Gardiners Creek, the site offers both recreational and ecological benefits, while the Yarra River trails, Patterson Reserve, and Hawthorn Velodrome, further enhance the area’s outdoor amenities.

[smartcode_project:default project_id=149097 project_image_fid=327694]

Residents will have access to a range of facilities, including a bathhouse with wellness amenities, a gym, co-working spaces, and communal dining and lounge areas.

Hamton will announce a builder in the coming months. Demolition of the old Campus is underway with construction on the first stage, anticipated to commence early 2026.&nbsp;

[smartcode_project_cta:default project_id=149097]

Scotch Hill Gardens, a new life for the former University of Melbourne Hawthorn Campus

Brisbane-based developer Red &amp; Co. is venturing into the Gold Coast apartment market, spending $8 million on a vacant site in Varsity Lake.

The plan is to developer 156 apartments on the 2,857sqm, 22 Lake Street site, near Varsity Central Park.

Colliers Queensland Residential Development Sites Director Troy Linnane said Colliers had been &nbsp;working closely with Red &amp; Co. to help them secure their first Gold Coast site, with this site offering a great opportunity due to its location and existing approval.&nbsp;

“This off-market transaction highlights the value of strong market knowledge and relationships, we were able to align the right buyer with the right site given the relationships we have with many active &nbsp;developers seeking sites across the SEQ market,” Linnane said.&nbsp;

“Those groups with in-house construction capability or strong builder alliances are leading market activity as they are best positioned to deliver projects in the current market."

Linnane said with&nbsp;confidence strengthening in 2025, they are seeing increased competition for prime development sites.

“Developers are actively seeking well-located sites, to take advantage of the under supply of &nbsp;apartment stock and the significant uplift in revenues due to strong buyer demand."

<img alt="22 Lake St" data-entity-type="file" data-entity-uuid="fcd9176e-4e38-4519-a868-0748419c1d2b" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/22_Lake_Street_001.jpg?VersionId=Z7tUSkVLqv8qf.JTyMXmzasxvudP_u2p" />

Colliers Queensland Residential Site Sales Executive Jackson Robinson said the transaction reflected confidence in the market and increasing demand for well-located, DA-approved sites to develop into &nbsp;housing.&nbsp;

“Red &amp; Co. recognised the depth of unmet demand for well-priced apartment stock on the Gold &nbsp;Coast, particularly in sought-after suburbs like Varsity Lakes, which offers excellent connectivity, expansive views and close proximity to major employment and education hubs,” Robinson said.&nbsp;

There will be a mix of one-, two-, and three-bedroom apartments, with views over&nbsp;Lake Orr and out to Burleigh Headland and the Hinterland, with additional outlooks north towards the Broadbeach skyline.&nbsp;

Red &amp; Co., led by co-founders Keiran Foster and David Laverty, have previously completed several developments across Brisbane.

Red & Co.’s first acquisition on the Gold Coast demonstrates increasing  confidence in the Gold Coast market

Red & Co. plots new Varsity Lake apartments

There’s no slowing down Gold Coast builder-developer&nbsp;<a href="https://www.apartments.com.au/developers/immerse-projects">Immerse Projects</a>.

Led by construction industry veteran John Kearney, the developer has made its move into the Brisbane apartment market, securing a prime site on Sylvan Road in Toowong.

It’s a location filled with nostalgia for Kearney, who studied at the nearby University of Queensland.

"It feels like a full circle moment," Kearney told Apartments.com.au.&nbsp;

“I spent many nights at the Regatta Hotel just down the road — as have most people in Brisbane. It’s one of the city’s most well-known hotels, and with several cafes, restaurants, and a CityCat stop nearby, it’s become an even more attractive place to live.”

Kearney describes Toowong as a suburb with real depth.

"The suburb attracts everyone, from students to retirees, and that's what makes it interesting."

He also noted the opportunity to take advantage of significant view corridors from the new development site: across Toowong Memorial Park, north to the city, and east along the Brisbane River.

CBRE’s Will Carman and John Nucifora brokered the sale of the 1,760 sqm site, citing strong demand for strategically located development opportunities in Brisbane’s inner suburbs.

"Its proximity to transport, retail, and educational facilities made it an opportunity of strong interest to the broader development community," Carman said.

<img alt="22-24 Sylvan Road" data-entity-type="file" data-entity-uuid="49eb466f-69dc-4790-8d50-5173d0cf104a" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/22-24%20Sylvan%20%20Rd%20Toowong_Markups.jpg?VersionId=u4_IGzpYLPFfAZSsgCZynov3bm7umwJ." />

Nucifora said the acquisition reflects confidence in <a href="https://www.apartments.com.au/developments/toowong-qld-4066">Toowong</a>, and more broadly Brisbane, as a market of strength for integrated builder developer groups.

"Those with an integrated model, or with strong existing relationships with builders have continued to be at the forefront of development acquisitions over the past two-year period."

Kearney has long operated Greyburn Constructions, and recently expanded into multi-residential development, with great success. They've delivered a new project in Kirra, and they're currently working towards completion at&nbsp;Ombre Robina. Then they have a new project in Kirra, on Haig Street.

They will submit a development application for Toowong later this year.&nbsp;

It’s a location filled with nostalgia for Kearney, who studied at the nearby University of Queensland.



First look: Immerse Projects moves into Brisbane apartment market with Toowong site acquisition

A track record of delivering new projects not just across the Sunshine Coast, but in <a href="https://www.apartments.com.au/developments/bokarina-qld-4575">Bokarina</a> specifically, gave builder-developer <a href="https://www.apartments.com.au/developers/gardner-vaughan-group">Gardner Vaughan Group</a> (GVG) all the IP needed to make Bask even more refined.&nbsp;

After completing Zinc Bokarina last year - positioned directly adjacent to Bask - GVG leveraged years of feedback from original purchasers and current residents, enabled by its community-focused approach and ongoing engagement.

[smartcode_project:default project_id=141609 project_image_fid=333359]

The feedback pointed to two clear themes: larger apartments with more bedrooms, and amenity suited to the active downsizer.

GVG then designed <a href="https://www.apartments.com.au/new-apartments/bask-bokarina-38-bokarina-boulevard-bokarina-qld-4575">Bask</a> - a collection of one to four-bedroom apartments - tailored to the end user: local downsizers or those seeking more spacious holiday homes than a compact getaway by the beach.

[smartcode_project:default project_id=141609 project_image_fid=333361]

A pool was essential, but a lap pool wasn’t. Instead, GVG designed a heated plunge pool, ideal for a refreshing dip. Key to the amenity offering were shared spaces designed to foster community connection. These include shaded garden areas with barbecue facilities, a firepit zone, and a communal herb and vegetable garden.&nbsp;

There’s also a fully equipped gym, designed specifically for the lifestyle exerciser.&nbsp;

[smartcode_project:default project_id=141609 project_image_fid=333365]

Another key insight was the desire not just for pet-friendly living - but for a development that embraces it. GVG listened and installed a dedicated dog wash bay, perfect for rinsing off after a trip to the dog-friendly Bokarina Beach, just 250 metres from Bask's front door.

Having already helped establish a vibrant lifestyle precinct with retail and amenity at Zinc, GVG is now expanding the offering with more street-level retail, set to complement the existing restaurants, wine bars, convenience, and specialty stores in the precinct.

[smartcode_project:default project_id=141609 project_image_fid=333362]

Bask represents the final new residential offering in the Bokarina Beach precinct. The two buildings, Mydas and Caretta, have been cleverly designed so that every apartment captures glimpses of either the Pacific Ocean, Lake Kawana, or the Glass House Mountains.&nbsp;

Construction is already underway, with GVG expecting residents to move in by summer 2026/27.

[smartcode_project_cta:default project_id=141609]

How GVG is designing for the active downsizer at Bask Bokarina

Matthew Hassan

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EXPERT OBSERVER 
Housing finance came in softer than expected in Feb, the total value of approvals recording a 1.7% decline in the month against expectations of a modest further rise.
The detail was soft across most segments and is despite both price gains and turnover still holding up reasonably well in the month which pre-dated any meaningful impacts from the Coronavirus outbreak.
The detail on owner occuper loans suggests slower volumes were the main driver of the soft result with the number of loans to this segment down 2% but the value down only 1.7%.
The number of approvals is still up 4.9% since the low point in May while the total value is up 22.6% (the difference implying a large rise in average loan sizes consistent with both rising prices and the stronger rebound in activity in higher priced markets such as Sydney and Melbourne).
<a href="https://www.propertyobserver.com.au/images/2020/4/14/housing%20finance%201.png" target="_blank">Click here </a>to enlarge: 
<img src="https://www.urban.com.au/images/2020/4/14/housing%20finance%201.png" alt="">
Investor activity continues to be more subdued. The value of investor loans saw a slightly bigger decline in the months, down 1.9% with the value of approval up 6.3%yr compared to double digit growth for owner occupier loans.
Construction-related loans bucked the wider monthly decline, posting a 1.9% rise, likely supported at the margin but post-bushfire rebuilding activity.
Loans for the purchase of newly built dwellings fell sharply, down 8.9%mth, but were coming off very strong gains over the previous three months and are still up 29%yr (the ABS has identified some data quality concerns with this measure that are likely to see revisions in future relases).
<a href="https://www.propertyobserver.com.au/images/2020/4/14/housing%20finance%202.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/2020/4/14/housing%20finance%202.jpg" alt="">
On a combined basis, the total value of loans was up 1.7%mth and 13.1%yr.
By state, weakness was concentrated in NSW (total value of loans –7.1%mth), SA (–7.2%mth) and, to a lesser extent, Vic (–2.1%mth).
Other states recorded gains, Qld +4.1%mth and WA+5.5%mth.
Overall, while the starting point is a touch softer than expected the main story is still the likely severe decline as coronavirus effects impact in coming months.
<a href="https://www.propertyobserver.com.au/images/2020/4/14/housing%20finance%203.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/2020/4/14/housing%20finance%203.jpg" alt="">
Auction markets have already registered an abrupt slowdown as physical auctions have been banned outright (around half of auctions have been withdrawn prior, the remaining sales going via pre auction sales or online auction).
 
This segment only account for about 15% of all property sales, and the industry may do more to adapt to the situation in coming months.
Nevertheless, health concerns, social distancing restrictions and a deep economic shock will heavily impact the wider property market in coming months.
<div>
MATTHEW HASSAN is a Senior Economist for Westpac
 
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Matthew_Hassan-HHWHptmrw4

Housing finance slips ahead of shutdown: Westpac's Matthew Hassan

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EXPERT OBSERVATION 
Dwelling approvals were much weaker than expected in Oct, recording an 8.1% pull back from September's 7.2% gain.
The Consensus had been looking for a milder 1% fall. The fall takes total monthly approvals back near their July cycle low, down 23.6%yr.
The detail was particularly disappointing – rather than a high-rise driven result, weakness in the month was more evenly spread across all dwelling types, detached houses down 11%, mid-low rise unit approvals down an estimated 4.7% and high rise approvals down an estimated 14%.
The renewed weakness in non high rise segments is despite tentative signs of stabilisation in recent months and firmer reads on construction-related finance approvals. These segments are also expected to be more responsive to recent interest rate cuts and the pick up in house prices.
The state detail showed weakness was concentrated in NSW and Qld with other states posting solid gains.
NSW was particularly weak with total dwelling approvals down 16%mth to a 7yr low. Qld approvals fell 10% in the month but look to be chopping around a steadier underlying trend. Vic posted a 5.7% rise but also looks to be stable in trend terms. WA approvals rose 11.5%, off a very weak Sep, and SA rose 14.7% with an uptrend in place.
The total value of renovation approvals declined 2.6%, mostly reversing a 3% gain in Sep month, and still tracking a slight trend decline.
The total value of non res building approvals rose 4.2% but was coming off a very choppy Aug-Sep. Approvals are up strongly on a 3mth basis but tracking about flat in monthly trend terms.
Overall the Oct dwelling approvals report highlights the weak outlook for new dwelling construction. High rise segments look susceptible to further declines and non high rise is still softening despite rate cuts and the improved tone to markets since mid year.
Falling dwelling investment is set to be a continued drag through 2020 – we expect new dwelling investment to be down 11.5% for the full calendar year 2019 and is forecast to fall a further 8% in 2020.
The weakness stands in stark contrast to the rebound coming through in prices (see <a href="https://www.propertyobserver.com.au/https://westpaciq.westpac.com.au/Article/41356">here</a> for more detail on the latest price data) but reflects the long lags on high rise projects and the specific issues facing this particular segment that are likely to preclude a rebound in high rise activity. Price gains are also expected to moderate as we head into 2020 as supply starts to lift and as affordability strains re-emerge. 
Read full report: <a href="https://westpaciq.westpac.com.au/wibiqauthoring/_uploads/file/Australia/2019/December/er20191202BullDwellApprovOct.pdf" target="_blank">'Australian dwelling approvals October' (PDF 319kb)</a>
Matthew Hassan is a Senior Economist at Westpac.
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Australian dwelling approvals weaken: Matthew Hassan

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EXPERT OBSERVATION
After a material 10.7% correction over the previous two years, Australian dwelling prices have posted a clear recovery since mid-2019, the pace accelerating month to month.
The CoreLogic home value index, covering the eight major capital cities rose 2% in Nov following a 1.4% gain in Oct, a 1.1% gain in Sep and a 1% gain in Aug.
Annual price growth ticked up to 0.4%yr, the first positive annual pace since March 2018. Prices are still 5.1% below their Sep 2017 peak but could surpass that level in early 2020 if the rebound continues at its current pace.
Several factors have contributed to the turnaround including: reduced uncertainty around housing-related tax policy following the Federal election in May; 75bps in rate cuts from the RBA; and some easing in regulatory guidelines for loan serviceability assessments. 
<a href="https://www.propertyobserver.com.au/images/2019/12/2/westpac%201.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/2019/12/2/westpac%201.jpg" alt="">
All major capital cities recorded gains in Nov, as did most smaller capitals and non-capital city areas within states. Only Darwin, and regional areas in WA and NT recorded declines in Nov. In annual growth terms, Sydney and Melbourne are both seeing positive gains, but prices in other major capital cities and are still down on a year ago. 
Sydney recorded a thumping 2.7% gain in Nov, the strongest monthly rise since Oct 1988. Prices are up 1.6%yr but still 9.4% below their peak in mid-2017. Houses and top and middle tier properties are now outpacing other segments.
Melbourne recorded a 2.2% rise following a 2.3% gain in Oct that was the strongest since 2009. Having come through a milder price correction, the gains mean Melbourne prices are now only 3.7% below their late 2017 peak. As with Sydney, houses and top tier properties are leading the gains. 
<a href="https://www.propertyobserver.com.au/images/2019/12/2/westpac%202.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/2019/12/2/westpac%202.jpg" alt="">
Brisbane dwelling prices posted a solid 0.8% rise for the second month in a row – the best back to back gains the market has seen in a while but with prices still down slightly by 0.5% on a year ago. Houses and 'top tier' property are showing a more meaningful lift. 
Perth dwelling prices posted a 0.4% gain, the first positive month since Apr 2018. The gain was driven by a 0.9% rise in 'top tier' properties, other segments flat or down slightly. Prices overall are still down 7.7%yr. 
Across the other capital city markets: Adelaide dwelling prices rose 0.5% but still down 0.5%yr; Canberra rose 1.6%mth, 3%yr; Hobart rose 2.3%mth, 4.2%yr; and Darwin fell 1.2%mth to be down –10.9%yr.
<a href="https://www.propertyobserver.com.au/images/2019/12/2/westpac%203.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/2019/12/2/westpac%203.jpg" alt="">
The recovery that began mid-year has now gained significant momentum and is starting to broaden.
It remains a 'thin' market sales-wise but buyer sentiment points to a further lift in demand in early 2020.
Price gains are expected to moderate as supply starts to lift and as affordability strains re-emerge.
See our latest <a href="https://westpaciq.westpac.com.au/Article/41257/180/" target="_blank">Westpac Housing Pulse</a> report for a more detailed run down on the situation and outlook.
Read the full report: <a href="https://westpaciq.westpac.com.au/wibiqauthoring/_uploads/file/Australia/2019/December/er20191202BullDwellPricesNov.pdf" target="_blank">'Australian dwelling prices November'</a>.
Matthew Hassan is a Senior Economist at Westpac.
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Australian dwelling prices rebound: Matthew Hassan

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EXPERT OBSERVATION
The May retail update showed sales edging up 0.1% in the month but essentially flat over the April-May period.
This was a touch below the consensus forecast of a 0.2% gain but in line with Westpac's view.
Annual growth slowed to 2.4% over the year, the slowest pace since the start of 2018 and well below the long run average of 4% over the year.
As noted last month, the timing of public holidays may have affected sales over April-May period.
Aside from that our main area of interest is around the sub-category and state detail and the extent to which these show wealth effect drags from the Sydney and Melbourne housing corrections.
The evidence this month is mixed: household goods and NSW remain notable weak spots for sales but the deterioration in these segments remains moderate and sales remain firm across other discretionary categories and in Vic, with a notable firming in the resource states.
<a href="https://www.propertyobserver.com.au/images/2019/7/4/retail%201.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/2019/7/4/retail%201.jpg" alt="">
By category, the main source of weakness in May was basic food retail (–0.3% in the month). This category accounts for 40% of total retail.
Food price moves have been a significant driver of fluctuations – the latest dip may be a sign that these are easing. Sales ex basic food rose 0.4%mth.
Across the other categories, household goods recorded a 0.4% fall in the month following a 0.9% decline in April with weakness pronounced in the housing-related 'furniture &amp; floor coverings' sub-category (worth about 25% of the wider category).
That suggests wealth effects are dragging on 'big ticket' discretionary spending (a view supported by recent weakness in vehicle sales).
<a href="https://www.propertyobserver.com.au/images/2019/7/4/retail%202.png" target="_blank">Click here </a>to enlarge:
<img src="https://www.urban.com.au/images/2019/7/4/retail%202.png" alt="">
 
However, the picture is more mixed across 'small ticket' discretionary categories, sales slipping for clothing (–0.2%mth) and department stores (–0.4%mth) but rising for cafes &amp; restaurants (+0.7%mth) and 'other retail' (+0.6%mth).
The state patterns were also mixed. Sales continue to slow abruptly in NSW, down 0.1% in the month but with annual growth down to a very weak 0.5% over the year.
Vic is holding up much better with a 0.6% gain in the month and annual growth above 4% over the year. The two 'mining states' recorded dips in May but continue to see annual growth lift, running at a surprisingly strong 4.7%yr pace in the case of Qld.
<a href="https://www.propertyobserver.com.au/images/2019/7/4/retail%203.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/2019/7/4/retail%203.jpg" alt="">
Looking by channel, online sales continue to moderate from the big surge in 2018, annual growth slipping below that via 'traditional' channels for the first time since the ABS started collecting monthly online sales data in 2013.
The breakdown by retailer size shows small retailers bearing the brunt of the 2019 slowdown. That said, while sales growth has held up better for larger retailers (running at 4% over the year) it is low by historical standards.
Overall the May update is bleak but not bleaker than expected. Retail sales are treading water in nominal terms rather than contracting.
<a href="https://www.propertyobserver.com.au/images/2019/7/4/retail%204.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/2019/7/4/retail%204.jpg" alt="">
 
As such the wash up for the June quarter volumes that feed into national accounts estimates of consumer spending will depend heavily on what has been happening on the price side. We suspect retail price inflation has slowed significantly from the food price driven gains over the last two quarters.
The June quarter CPI update due at the end of the month will be an important pointer on this question and the extent to which growth in consumer demand is slowing.
MATTHEW HASSAN is a Senior Economist for Westpac.
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Australian retail sales tread water: Westpac's Matthew Hassan

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EXPERT OBSERVER
The correction in Australian dwelling prices that has been running since late 2017 may have ended. 
The CoreLogic home value index, covering the eight major capital cities, dipped 0.1% in June to be down 8.0% over the year – still weak but marking the first month to month improvement in the annual growth rate since its peak at +11.3%yr in mid 2017.
<a href="https://www.propertyobserver.com.au/images/2019/7/1/westpac%201%20.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/2019/7/1/westpac%201%20.jpg" alt="">
Sydney and Melbourne both recorded their first monthly price gains since the correction began in 2017. However, prices continued to slip elsewhere with most other capital cities showing a deterioration over the last three months.
Melbourne dwelling prices rose 0.2% in June, paring the annual pace of decline back to 9.2% over the year. Units are leading the turnaround, prices in this segment up 0.7% over the last two months. Prices in the top 25% of properties by value also outperformed slightly, albeit coming off more material declines through the correction.
Sydney dwellings recorded a 0.1% price gain in June, the annual pace of decline slowing to 9.9% over the year. The gain here centred on the middle and top tiers of the market which have moved through a more material correction over the last two years. Units slightly outperformed.
<a href="https://www.propertyobserver.com.au/images/2019/7/1/westpac%202.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/2019/7/1/westpac%202.jpg" alt="">
Other major markets were considerably weaker in the month, Brisbane, Perth and Adelaide all recording monthly price declines and accelerating annual rates of contraction. 
Perth's long-running correction is showing few signs of reprieve, prices down 0.6% in the month,  and 9.1% over the year. 
Brisbane, which was stable through 2018, has continued to see modest but worsening price slippage in 2019, prices down 0.6% in the month, and 2.6% over the year. 
 Adelaide has also slipped into a slight correction, prices down 0.5% in the month, and 0.3% over the year.
Conditions were mostly soft cross the smaller markets as well: Canberra down 0.9% in the month, lowering annual growth to just 1.4% over the year; Darwin down 0.9% in the month, the long-running correction re-accelerating to 9.6% over the year (a similar theme to Perth); but Hobart recording a 0.2% gain in the month holding annual growth in positive at 2.9% over the year. 
Overall, the weakness still evident in other markets takes some of the gloss off the clear improvement showing through in Sydney-Melbourne.
<a href="https://www.propertyobserver.com.au/images/2019/7/1/westpac%203.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/2019/7/1/westpac%203.jpg" alt="">
 
It also cautions against putting too much emphasis on the improving tone from weekly auction results which are not representative of conditions outside of these two markets.
The contrasting performance of the major cities may be an indication that swings in investor demand around the Federal election have been key – this segment tends to be more active in Sydney and Melbourne – and that other factors such as those around affordability, credit availability and borrowing capacity may still be weighing on owner occupier demand.
The finance approval data should shed some light on this in coming weeks.
The mix should become more balanced over the the second half of 2020 lower interest rates and a likely relaxation in regulatory guidelines for loan assessments comes through.
For the record, Westpac expects dwelling prices to remain patchy in 2019, with a stabilisation showing through more clearly in 2020.
Any rebound in prices before then is likely to quickly run into affordability constraints.
<a href="https://www.propertyobserver.com.au/images/2019/7/1/dwelling%20price%201.jpg" target="_blank">Click here</a> to enlarge: 
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<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/2019/7/1/property%20value%205.jpg" alt="">
<a href="https://www.propertyobserver.com.au/images/2019/7/1/property%20value%206.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/2019/7/1/property%20value%206.jpg" alt="">
<a href="https://www.propertyobserver.com.au/images/2019/7/2/auction%201.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/2019/7/2/auction%201.jpg" alt="">
<a href="https://www.propertyobserver.com.au/images/2019/7/2/real%20price.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/2019/7/2/real%20price.jpg" alt="">
 
MATTHEW HASSAN is a Senior Economist for Westpac
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Is the dwelling price correction over? Matthew Hassan

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The minutes of the June RBA Board meeting show the decision to cut the cash rate by 25bp at that meeting was driven by a revised assessment of spare capacity in the labour market and that the Board expects to ease policy further.
We continue to expect a further 25bp rate cut in August and a final 25bp cut in November.
Note that much of the information from the minutes is not new. Key aspects have already been covered in a speech by the RBA Governor on the day of the decision and in other commentary from the Bank since then.
Assessments have also likely evolved since June 4, particularly following the March quarter national accounts released a day later.
As such, our main interest in reading the meeting minutes is around the commentary from members and the tone of the discussion – particularly the degree of urgency around policy easing.
The minutes are clear on the prospect of further cuts, noting in the concluding paragraph that “… it was more likely than not that a further easing in monetary policy would be appropriate in the period ahead”.
In the lexicon of RBA statements, “period ahead” signals that policy is ‘live’ in coming meetings but stops short of indicating an imminent move at the next meeting.
The case for easing in June rested firmly on a reassessment of the labour market.
Updates on wage costs, showing growth of 0.5%qtr, 2.3%yr to March, were seen as “further evidence of spare capacity”.
The latest data around jobs and unemployment is assessed as “mixed” – with an increase in unemployment and underemployment and a moderation in employment growth noted, albeit with the latter still running above growth in the labour force and participation rates reaching a record high.
The contrast with the “strong” description in the May minutes is striking.
However, the real change was around the assessment of the extent of spare capacity – i.e. the degree to which unemployment was above the ‘full employment’ levels associated with stable inflation.
As outlined by the Governor, the Bank now sees this as around 4.5% compared to the 4.75-5% cited previously – the shift reflecting the unfolding mix of wage and unemployment outcomes.
The current 5.2% unemployment rate is a sizeable 0.7ppts above this target level. While noting estimates are uncertain, Board members concurred with the change in assessment.
Other factors behind the decision to cut seem less urgent. The outlook for both the global economy and the Australian economy was assessed as “reasonable” albeit with the latter conditioned on market pricing for the cash rate that implied interest rates would be lower in the period ahead.
Around inflation, the persistence of low underlying inflation – below the 2-3% target range for three years and expected to remain low near term – looks to have been a secondary consideration behind the cut, giving scope for the move rather than driving the decision.
That said, there did seem to be some concern that this might start to undermine medium term inflation expectations.
The risks a rate cut would present around high household debt and housing markets were assessed as low.
Members judged it “was unlikely to encourage a material pick-up in borrowing by households that would add to medium term risks”.
Interestingly, members also noted that lower rates would “stimulate activity and thereby improve the resilience of the Australian economy to any future adverse shocks” – perhaps an indication that the Board is a little keener to get the economy moving.
Conclusion
Overall, the minutes confirm more easing is on the way. Board members appear very much aligned to the Governor’s views, particularly around the labour market.
That said, the ‘tone’ is not urgent in the sense that growth outlook still does not seem to be viewed as that challenging and low inflation is not a driving force behind the easing.
We continue to see the next 25bp rate cut coming in August and a final 25bp cut in November.
There are complications. After shifting its view on full employment and having identified more significant spare capacity in the labour market, the Board may see little point in delaying follow-on easing moves – the case having already been made.
However, we expect the next move to instead be framed by a downgrade to the Bank’s forecasts meaning it will be more inclined to move in August when the full set of revised forecasts are released in its Statement on Monetary Policy.
We expect this to include a downward revision to the Bank’s near term growth forecast from ‘around 2.75%’ to something more materially below trend. The disappointing March quarter national accounts release has already lowered the starting point.
Updates on the consumer are likely to show soft conditions extending into the June quarter. Meanwhile weak labour market updates are likely to take the unemployment further away from the Bank’s 4.5% target.
Given the need to adjust, it is much simpler communication-wise, to cut rates at the time the forecast is changed than to cut in July and announce the lower forecast a month later.
MATTHEW HASSAN is a Senior Economist for Westpac
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RBA June minutes allay fear that low rate borrowing has medium term risks: Westpac's Matthew Hassan

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The April retail update came in weaker than expected, sales dipping 0.1% in the month compared to consensus forecasts of a 0.2% gain.
Annual growth slowed to 2.8% per year, the slowest pace since mid 2018.
The timing of public holidays may have been a factor in April, with Easter falling in the month this year and the ANZAC day public holiday a week later encouraging many to take leave.
While the ABS tries to adjust for these shifting seasonal effects, there may have been more of a dampening effect compared to previous years.
<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/2019/6/4/retail%201.jpg" alt="">
That said, both the sub-category and state detail in April point to wealth effect spillovers from the Sydney and Melbourne led housing market corrections weighing on sales.
In particular, household goods retail sales – a bellwether for discretionary 'durables' spending – fell 0.9% in the month and NSW and Vic both recorded more pronounced 0.4% declines.
<a href="https://www.propertyobserver.com.au/images/2019/6/4/retail%202.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/2019/6/4/retail%202.jpg" alt="">
The remaining sub-category detail shows a 0.2% gain in the large basic food retail category and more mixed results elsewhere – clothing down 1.2% month and cafes &amp; restaurants down 0.7% month but both coming off sold gains in March; and department stores up 1.8% month and 'other retailing' up 0.8% month but both coming off declines last month.
<a href="https://www.propertyobserver.com.au/images/2019/6/4/retail%203.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/2019/6/4/retail%203.jpg" alt="">
Needless to say it pays to look through the monthly volatility.
Looking at sales across the major states: NSW –0.4%mth, +1.2%yr; Vic –0.4%mth, +3.7%yr; Qld +0.7%mth, +6.0%yr; SA +0.6%mth, +0.5%yr; and WA +0.1%mth, +2.6%yr.
<a href="https://www.propertyobserver.com.au/images/2019/6/4/retail%204.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/2019/6/4/retail%204.jpg" alt="">
Looking by channel, online sales look to have posted a reasonably solid 1.1% gain in the April month, although the annual pace of growth in this segment continues to slow. 
The breakdown by retailer size shows weakness concentrated amongst small retailers, sales in the segment down 0.9%mth. Large non-food retailers saw a flat result while large food retailers recorded a 0.6% gain.
Overall the April retail update is clearly on the soft side, marking a weak start to the June quarter and with some worrying signs that wealth effect drags may be intensifying.
<a href="https://www.propertyobserver.com.au/images/2019/6/4/retail%205.jpg" target="_blank">Click here</a> to enlarge: 
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<a href="https://www.propertyobserver.com.au/images/2019/6/4/retail%208.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/2019/6/4/retail%208.jpg" alt="">
<a href="https://www.propertyobserver.com.au/images/2019/6/4/retail%209.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/2019/6/4/retail%209.jpg" alt="">
<a href="https://www.propertyobserver.com.au/images/2019/6/4/retail%2010.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/2019/6/4/retail%2010.jpg" alt="">
MATTHEW HASSAN is a Senior Economist for Westpac
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Australian retail sales soften again: Westpac's Matthew Hassan

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EXPERT OBSERVER
Australia’s housing market has continued to weaken. Conditions still vary widely across cities but are soft overall, with price corrections underway in the previously strong Sydney and Melbourne markets and Perth's longer running period of price declines also continuing.
The three months to August have seen the Westpac Housing Consumer Sentiment Index (a composite measure based on four housing–related components of the Westpac Consumer Sentiment survey) soften a touch but remain consistent with stabilising demand. The main driver of the lift continues to be less downbeat reads on ‘time to buy’, partly reflecting an improvement in affordability. Small positives around jobs and risk aversion have been offset by weakening price expectations.
Turnover remains very low. Whereas earlier estimates had suggested activity might have been stabilising in the first half of 2018, revised and updated data now show turnover nationally down 6.2% over the year to July. The annual pace of decline has moderated and the most recent monthly figures hint at stabilisation but, without a revival, annual growth is likely to stay negative through to year end.
The continued decline in turnover suggests other factors such as tightening loan criteria and falling investor activity are weighing on activity, essentially preventing what would likely have been a stabilisation in conditions by now.
 <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/2018/8/28/WESTPAC.jpg" alt="">
<div> </div>
<div>Matthew Hassan is a Senior Economist at Westpac.</div>
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Housing sentiment stable but markets still weakening: Matthew Hassan

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EXPERT OBSERVATION
Australia's housing market continues to correct. The CoreLogic home value index, covering the eight major capital cities, dipped 0.3% in June marking the ninth successive monthly decline. Prices nationally are down 1.6%yr and 2.2% from the peak in Sep last year.
The correction remains both relatively shallow and narrowly-based, concentrated in the previously strong Sydney and Melbourne markets. These two markets have now seen no net gain in prices since late 2016 and mid-2017 respectively. The Perth market is also seeing a price correction although this has been ongoing for the best part of five years.
For the June month, unit prices showed a slightly milder fall than houses (–0.2% vs –0.3%) although annual growth for units remains positive and is significantly outperforming price growth for houses (+0.4%yr vs –2.2%yr for houses).
Click here <a href="https://www.propertyobserver.com.au/images/2018/7/3/value-index.jpg" target="_blank">to enlarge.</a>
<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/2018/7/3/value-index.jpg" alt="">
Perth recorded the biggest price decline in the June month, down –0.5%mth, –2.1%yr with the city's unit market showing a renewed price contraction. Perth unit prices are back at their 2006 levels and have not kept pace with inflation since mid-2003.
Amongst the major eastern capitals, Melbourne was again a touch weaker, prices falling –0.4%mth vs –0.3%mth in Sydney, although prices are still up a touch (+1%mth) on a year ago compared to a 4.5% decline in Sydney. Brisbane and Adelaide continue to see a steadier performance with prices ticking up slightly in the month and up 1.1%yr. The detail suggests the Brisbane unit market is on a firmer footing.
Price performances continue to vary widely across the smaller capitals, Hobart's boom possibly cooling a touch but still showing double digit annual growth (+12.7%yr), Canberra subdued (+2.3%yr) and Darwin showing few signs of pulling out of its steep correction (–7.7%yr). Performances in regional areas have also varied but have been slightly better overall (Aus ex capital city prices flat in the month but up +2.2%yr).
All tiers recorded price slippage in the June month although declines remains larger for the 'top 25%' of properties by value down –0.5%mth, –3.8%yr compared to the 'middle 50% down –0.2%mth, +0.8%yr and the 'bottom 25%' down –0.1%mth, +1.3%yr.
Auction clearance rates weakened notably through May-June, suggesting an additional drag from tightening loan criteria and longer approval processing times. Buyer sentiment has lifted off last year's lows but the change in credit conditions looks to have overshadowed any positives from the marginal improvement in affordability. Any stabilisation still looks to be a long way off.
Matthew Hassan is senior economist with <a href="https://www.westpac.com.au/" target="_blank">Westpac</a>.
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jrobinson-rf4aSBido9

Correction continues in Australian dwelling prices: Matthew Hassan

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EXPERT OBSERVATION
Australian housing finance approvals were a touch firmer than expected in April, the number of owner occupier loans down just 1.4% vs expectations of a slightly larger 1.8% decline.
The value of investor loans recorded a 0.9% dip, much milder than March's 9% drop. Despite this, conditions were soft across most of the detail.
The number of new owner occupier approvals, i.e. excluding refinancing, was more in line with consensus, with a 1.9% decline in April taking approvals down 4.4%yr.
The total value of housing finance approvals, including investors but including owner occupier refi, dipped 0.4%mth to be down 5.8%yr (estimates excluding investor refi look to be down about 6.7%yr). Stepping back, the peak to trough move in the value of new finance approvals looks to be a fall of about 10%, roughly on a par with the 2015-16 pull back.
Click here <a href="https://www.propertyobserver.com.au/images/2018/6/13/finance%20approvals.jpg" target="_blank">to enlarge.</a>
<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/2018/6/13/finance%20approvals.jpg" alt="">
The number of owner occupier construction approvals dipped 0.2% to be down 5.7%yr. The number of owner occupier approvals for the purchase of newly built dwellings fell 3.7%mth but is still up 2.9%yr. On a combined basis, construction-related approvals were down 1.4%mth, –2.9%yr.
The number of approvals to first home buyers (FHBs) continues to ease back from recent highs, declining 1.6%mth. Although approvals are still up 24%yr, they are now 10% off their Nov peak. Activity in this segment has been boosted by increased assistance from state governments in NSW and Vic – measures that in the past have typically generated a significant pull forward in activity that subsequently falls away.
The state breakdown had more detail than usual this month due to the timing of the release which coincided with the release of state lending data for investor loans. The combined figures shows the biggest annual declines in the total value of approvals (incl. investor loans but excl. owner occupier refi) have been in WA (–8.8%yr), NSW (–6%yr) and Qld (–6%yr) with a milder 2.9%yr fall in SA. Vic has seen a slight gain (+1.9%yr) while Tasmania has bucked the national trend with a strong surge (+15.4%yr).
More recent data, from auction markets in particular, suggest housing market conditions have seen a further weakening since April likely reflecting tighter lending criteria. With more stringent assessments also likely to delay loan processing, finance approvals could see a more significant decline in the next few months.
Matthew Hassan is senior economist with <a href="https://www.westpac.com.au/" target="_blank">Westpac</a>.
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