Sunkin Property Group will welcome buyers later this year to the latest stage of its Bayside masterplanned precinct, <a href="https://www.urban.com.au/new-apartments/highett-common-37-graham-road-highett-vic-3190">Highett Common</a>.

<a href="https://www.urban.com.au/builders/sk-construction">SK Constructions</a>, the building arm of <a href="https://www.urban.com.au/developers/sunkin-property-group">Sunkin Property Group</a>, recently topped out the North Lane building, one of several planned for the unrepeatable 9.3-hectare site next door to Highett Station and its accompanying amenity.

Sunkin held a topping out ceremony in early April to honour the milestone.

<iframe allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" allowfullscreen="" frameborder="0" height="315" referrerpolicy="strict-origin-when-cross-origin" src="https://www.youtube.com/embed/vk4OyV9FSho?si=MfiVFS4GLCPLGPlL" title="YouTube video player" width="560"></iframe>

SK Constructions is now nearing completion of early civil works, with minor final touches underway to support the delivery of the first stage of buildings.&nbsp;

The team is also progressing on the community’s first one-hectare park, with drainage works, cut and fill operations, retaining walls, and new footpaths taking shape.

[smartcode_project:default project_id=108019 project_image_fid=300064]

The second stage of Highett Common, the Highett Common Townhomes Collection,&nbsp;is progressing through the detailed design phase. Construction is scheduled to begin later this year.&nbsp;

The third stage, the Mews Collection, which will deliver six levels of contemporary residences, is preparing for early basement works and piling.

[smartcode_project:default project_id=108019 project_image_fid=331186]

Highett Common’s first residents are expected to move in within the next six months.&nbsp;

Upon arrival, they’ll enjoy access not just to their new homes, but also to the community’s first park and playground, part of a broader vision that places open space and walkability at the heart of the precinct.

Select residences are currently available with stamp duty savings and a $12,000 furniture and styling package by <a href="https://www.urban.com.au/interior-designers/coco-republic-interior-design">Coco Republic</a>, offering added value for early buyers.

[smartcode_project_cta:default project_id=108019]

Joel Robinson

Sunkin tops out next Highett Common building as move-in date approaches

Buyers are preparing to move into their new homes in <a href="https://www.urban.com.au/developments/lane-cove-north-nsw-2066">Lane Cove North</a>, with construction now complete on Sterling, the latest development by builder-developer Scion Group.

The five-level project, located at 2 Merinda Street, comprises just 50 one, two, and three-bedroom apartments to an area starved of new apartments.

Designed by <a href="https://www.urban.com.au/architects/design-corp-architects">Design Corp Architects</a>, Sterling’s architecture draws on Lane Cove’s natural surroundings, with a neutral palette, generous balconies, and integrated landscaping.

[smartcode_project:default project_id=136108 project_image_fid=303417]

The family-run Scion took over the build that had already commenced construction, the first time the company had done so since it was founded by Sam Jabbour in the early 1990s.

Their minds were set at ease instantly when they were told the development had Latent Defects Insurance and had undergone the technical inspection service program by reputable industry experts since commencement.

Sebastian Jabbour, Director of Operations at Scion, says it gave the team confidence to take on the project.

“Because we weren’t the developer who had brought on Latent Defects Insurance, we weren’t fully aware of all the benefits that came with LDI,” Jabbour says.

“It was remarkable how thorough the building inspections by the <a href="https://www.urban.com.au/expert-insights/latent-defects-insurance-101-what-is-the-technical-inspection-service-tis-program">Technical Inspection Service</a> were. It meant we had a third party ratifying the part of the build process we weren’t a part of - which was really the driver in us getting involved in the project.”

&nbsp;

[smartcode_project:default project_id=136108 project_image_fid=303415]

<a href="https://www.urban.com.au/news/resilience-latent-defects-insurance">Latent Defects Insurance</a>, an insurance only offered in Australia by Resilience Insurance and taken out on the building rather than by each individual owner, protects apartment buyers from any structural,&nbsp;

LDI offers 10 years of protection against structural or design defects post-completion, providing a level of assurance that is proving to be a game-changer in the off the plan apartment market.

[smartcode_project:default project_id=136108 project_image_fid=303420]

Ray White Projects Western Sydney Managing Director Mark Bernberg, who is handling the sales, says there have been purchasers who are buying because the development has LDI.

"LDI is a true game-changer for the new and off the plan apartment market," Bernberg says.

<a href="https://www.urban.com.au/buildings/sterling-lane-cove-north-2-merinda-street-lane-cove-north-nsw-2066">Sterling</a> has attracted a diverse mix of buyers, including first homebuyers, downsizers, and investors drawn to the area’s lifestyle offering and connectivity.&nbsp;

There are just a handful of apartments remaining in Sterling.

[smartcode_project_cta:default project_id=136108]

Sterling has attracted a diverse mix of buyers, including first homebuyers, downsizers, and investors drawn to the area’s lifestyle offering and connectivity. 



Buyers to move into Lane Cove North's first LDI-protected apartment development as Scion wraps up Sterling construction

Latent Defects Insurance (LDI) is a game-changer for anyone looking to purchase a brand-new or off-the-plan apartment in Australia. This insurance policy, which can only be taken out by developers or builders (not individual apartment owners), offers a 10-year warranty on new apartments. It covers the cost of fixing any structural defects that may arise in the building. So far, LDI has seen strong adoption from developers, with companies like <a href="https://www.urban.com.au/developers/deicorp">Deicorp</a>, <a href="https://www.urban.com.au/developers/dasco">DASCO</a>, and <a href="https://www.urban.com.au/developers/urban-property-group">Urban Property Group</a> using it to provide their buyers with added peace of mind when purchasing off-the-plan properties.

I recently had the opportunity to sit down with Corey Nugent, CEO of Resilience Insurance—Australia’s only provider of LDI policies—to discuss the ins and outs of the important coverage.

<h2>How has Latent Defects Insurance (LDI) been received since its introduction in Australia?</h2>

<a href="https://www.urban.com.au/news/resilience-latent-defects-insurance">Latent Defects Insurance</a> is a crucial component for the future of Australia’s built environment. Also known as Decennial Liability Insurance, LDI has been part of the <a href="https://www.urban.com.au/expert-insights/buying/the-evolution-of-latent-defects-insurance-worldwide-and-its-nationwide-availability-in-australia">new development landscape in Europe and other regions</a> for over seven decades. In countries like France, Italy, Spain, and Finland, it is mandatory for all new buildings—whether residential or commercial—to carry LDI coverage.

Since its rollout in Australia, LDI has been very well received by developers, lenders providing financing to those developers, and most importantly, by buyers. It has quickly become an essential tool in building trust and ensuring long-term security for all parties involved.

<h2>In a nutshell, how exactly does Latent Defects Insurance work?</h2>

While Latent Defects Insurance (LDI) involves several components, the overall process is quite straightforward once the policy is in place.

The LDI process begins even before construction starts. As part of the policy, a <a href="https://www.urban.com.au/expert-insights/latent-defects-insurance-101-what-is-the-technical-inspection-service-tis-program">Technical Inspection Service</a> (TIS) assesses the site before work begins. Throughout the construction phase, the TIS regularly visits the site to ensure everything is progressing as planned. If any issues are found, the TIS provides a detailed report outlining the necessary corrections. By having the TIS involved from the outset, the risk of structural defects in the finished building is significantly reduced, addressing potential problems before they arise.

<h2>What happens when the building is completed?</h2>

Once the building is complete, buyers move in, and LDI is applied to their apartment, as well as the entire building structure, for a period of 10 years.

This coverage not only offers peace of mind but can also increase the resale value of the property. Importantly, the policy stays with the apartment, not the owner. So, if an off the plan buyer <a href="https://www.urban.com.au/expert-insights/resilience-latent-defects-insurance-a-catalyst-for-higher-property-valuations-and-resale-confidence">decides to sell within the first 10 years</a>, the remaining coverage is transferred to the new owner.

<h2>How does LDI benefit developers?</h2>

Developers see several key benefits from Latent Defects Insurance. The most obvious is that it makes their project more attractive compared to others that don’t offer LDI. Many buyers are willing to pay more for the assurance that comes with LDI, and developers often see faster sales as a result. Research, including studies by Urban, shows that over 60% of buyers are willing to pay an additional 1.5% for LDI coverage. This premium often more than covers the cost of the policy for the developer. Typically, developers pay about 1.5% of the build cost for the policy. However, if they can secure a higher sale price on their apartments due to the added value of LDI, they end up profiting.

Another benefit is the added appeal LDI gives to a development, positioning it as a more secure investment for potential buyers.

Finally, LDI provides developers with an extra layer of protection through the Technical Inspection Service (TIS). This third-party oversight ensures quality control throughout the build, which could otherwise cost developers hundreds of thousands of dollars in additional personnel.

The TIS helps catch potential issues early, preventing future liabilities.

While the insurance is designed to protect the buyer, it also safeguards the developer. Should any structural, waterproofing, weatherproofing or MEPS (mechanical, electrical or plumbing systems) issues arise, the developer is covered for out-of-pocket costs. Developers understand the importance of completing projects smoothly and moving on to the next one without lingering problems. Given the large number of trades involved in constructing new buildings, LDI offers significant peace of mind.

<h2>How does LDI benefit buyers?</h2>

In Sydney, past incidents like the Mascot and Opal Towers issues have left many buyers wary of off the plan purchases. While these events occurred over six years ago, they still impact buyer confidence today. However, the new development market is much stronger now, with stricter checks and regulations in place.

Ultimately, Latent Defects Insurance provides protection for all parties. In rare extreme cases, where residents may need to vacate due to major defects, LDI offers first-right protection, ensuring buyers are financially covered. Thanks to the continuous inspections carried out by TIS throughout the construction process, such situations are unlikely to occur, but LDI is there as a safety net if they do.

Since its rollout in Australia, LDI has been very well received by developers, lenders providing financing to those developers, and most importantly, by buyers

Latent Defects Insurance 101: Five minutes with Resilience Insurance CEO Corey Nugent on Australia's most comprehensive new apartment development insurance

National apartment developer Abadeen Group is bringing its expertise from decades of developing luxury apartments in Sydney, and more recently Melbourne, to the Gold Coast.

<a href="https://www.urban.com.au/developers/abadeen-group">Abadeen</a>, founded in 1995 by industry veteran Justin Brown, chose one of the Gold Coast's most popular suburbs for its debut project, Villea, located just 400m away from the sand in<a href="https://www.urban.com.au/developments/palm-beach-qld-4221"> Palm Beach</a>.

<a href="https://www.urban.com.au/new-apartments/villea-palm-beach">Villea</a>, already well under construction and expected to welcome buyers by the end of 2025, will consist of just 69 apartments across an eight-level building designed by BDA Architecture. It presents a rare opportunity to purchase a two-bedroom apartment for under $1 million in a suburb dominated by luxury beachfront projects.

[smartcode_project:default project_id=106840 project_image_fid=336441]

The apartments have been designed to evoke beachside living. They feature a neutral, coastal colour palette, and have been configured to open to the outdoors through large sliding glass doors, to capture views to either the Pacific Ocean, Tallebudgera Creek, Burleigh Headland, and Snapper Rocks.

Villea residents will be well catered for Villea includes private resort-style amenities such as a resort-style pool enveloped in lush landscaping, a fully equipped gym, and a recreational BBQ area.&nbsp;

[smartcode_project:default project_id=106840 project_image_fid=336442]

The Mawarra Street building, one of only a handful under development on the western side of the Gold Coast Highway where prices are much more affordable than the eastern side, sits in a quiet pocket that is dominated by established houses.

While just a short walk to beachside amenity, Abadeen will bring further convenience by activating the ground plane of Villea with a boutique retail precinct.

[smartcode_project:default project_id=106840 project_image_fid=336445]

Villea residents will also benefit from the extended G:Link light rail that will be extended all the way down to Coolangatta. One of the proposed stops in Palm Beach is just 650m away.

SRQ Projects Director, Nick Clydsdale says Villea residents will be able to embrace a lifestyle unlike any other.

“Villea embraces the essence of Palm Beach living, where mornings begin with a great coffee just steps from home, and the beach is the backyard. From sunrise strolls on the sand to paddleboarding at Tally Creek, Villea places you at the heart of Palm Beach’s natural beauty.”

Villea is already well under construction and is expected to complete by the end of 2025, with buyers moving in shortly after.

GV Property Group's Antonio Mercuri and Luke Reaby amalgamated the site for Abadeen.

[smartcode_project_cta:default project_id=106840]

SRQ Projects Director, Nick Clydsdale says Villea residents will be able to embrace a lifestyle unlike any other.

Abadeen’s Gold Coast debut brings affordable coastal luxury to Palm Beach

<a href="https://www.urban.com.au/developers/arena-property-group">Arena Property</a> has been given the green light to proceed with its new <a href="https://www.urban.com.au/developments/main-beach-qld-4217">Main Beach</a> apartment tower, Belle Vie.

The 28-level tower, on an amalgamated 1,010 sqm on Pacific Street, one row back from Main Beach parade, will comprise 72 apartments. It will replace an original walk-up unit block.

Bella Vie—a French term that translates to beautiful life—is Arena’s most ambitious project to date and represents a significant shift from their previous low-rise luxury offerings, including their recently completed&nbsp;<a href="https://www.urban.com.au/buildings/lana-bilinga-295-golden-four-drive-bilinga">Lana Bilinga development</a>.

Belle Vie features two distinct vertical sections, elegantly separated by a full-floor amenities level on Level 18. This central amenity floor will offer residents a curated collection of luxury lifestyle spaces, including a residents’ lounge, games room, wine cellar, library, private dining space, and a sunset-viewing outdoor dining terrace.&nbsp;

<img alt="Belle Vie" data-entity-type="file" data-entity-uuid="324e8fb5-8e23-481f-8a07-fbd902215abc" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202025-04-09%20at%2012.26.38%E2%80%AFPM.png?VersionId=98xo9EPxdpRCXSbW6BQmEm2wQehdxWgs" />

It will also house a dedicated co-working zone with a boardroom, and a wellness hub complete with a 91 sqm gym, Pilates studio, sunrise yoga deck, and functional training room.

Levels 5 to 17 will host 56 two-bedroom residences, each boasting a study or multi-purpose room.&nbsp;

Above the amenities level, Levels 19 to 27 are reserved for 14 expansive half-floor, three-bedroom apartments, further enhancing Bella Vie’s appeal to the owner-occupier market.&nbsp;

Crowning the tower are two ultra-luxurious penthouses spanning three levels, each featuring four bedrooms, a home office, and a private 120 sqm-plus rooftop with a pool, spa, outdoor kitchen, fire pit, and lawn area.

<img alt="Belle" data-entity-type="file" data-entity-uuid="2dd52c65-24ea-44da-9f99-292450a4e3f6" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202025-04-09%20at%2012.26.41%E2%80%AFPM.png?VersionId=7h9EAbSgQynB4L5mK9bHwVgrVdY1yvCW" />

Complementing the vertical lifestyle offering is a resort-style podium-level amenity deck, which will include a swimming pool with spa and wet deck, hot and cold plunges, and a rejuvenating sauna.&nbsp;

The three-level podium and basement structure will provide parking for 100 vehicles.

Belle Vie, new Main Beach apartment tower, greenlit

National Australia Bank (NAB) has brought forward the timing of the first RBA cash rate cut by three months.

NAB is now expecting a cut in February, in line with ANZ and Westpac, having initially thought a cut wouldn't come until May.

Commonwealth Bank, the nation's largest lender, still thinks the first cut will come in December.

NAB changed its call following the August monthly inflation figures that were released at the end of September, showing it had dropped to 2.7 per cent.

"The risk has been skewed to a first cut earlier in 2025, and today’s change acknowledges the balance of risks has likely shifted sufficiently for the RBA to feel comfortable cutting a little sooner than we earlier expected," NAB noted in its latest update.

They added that the cadence of the cuts may be faster than its central profile.

"Domestic inflation pressures are cooling, but only gradually, and we continue to expect the conditions for a cut will not be in place this year.

NAB believes the easing cycle will end at 3.1 per cent by early 2026, which is five cuts from the current 4.35 per cent cash rate.&nbsp;

CBA also thinks 3.1 per cent will mark the end of the cutting cycle, while Westpac is forecasting 3.35 per cent, and ANZ is the most pessimistic at 3.6 per cent, which would be just three interest rate cuts.

<h2>What would a rate cut in February look like for borrowers?</h2>

According to&nbsp;<a data-saferedirecturl="https://www.google.com/url?q=https://link.mediaoutreach.meltwater.com/ls/click?upn%3Du001.IVvjJ-2BPT0A8C3VxtqKc6e3bj5hBuw27WFEYqovsYs7kPsgFulYrdOzeP8gI7CybJOya3_RgrM7qq-2BfK-2FtAHeRBLv5Qrb-2Bii5fzjLeKcP4w-2FkNgJPXygpiRhVUan3WV3QEggcf617UC8Z60RjQJZAqx7PiO7FtVJQSn0D46Zc3iTVP0kAhTTzG51cPpa5hrqz1OkSA-2BiXAxUajQ686MTtiseWBIdMdknd83aB7cOVgXlVTeHCGf3-2BcMHwfvI8TYlkUovqEhn4dj0KXf2eJGpb9-2BBv20hPXdLlPP9yD7DvFFDBM5yrTqxvcCiMfAsW1onD-2FcriL628eYdhNQE7bwzYrxcOYnmaYfRhGl-2FEHQ6eK2uQcLxs6Cbu6Dx0bYvpi5A6enmxMWU5TkcRYrP6Z8GbXZYtc5qSoKu6eWFBQR9K7fsjXwHMmby3D3X6Yx-2BxcDcdRruTG&amp;source=gmail&amp;ust=1727774368149000&amp;usg=AOvVaw2vK2ujS77CHs9VRvSSXzLC" href="https://link.mediaoutreach.meltwater.com/ls/click?upn=u001.IVvjJ-2BPT0A8C3VxtqKc6e3bj5hBuw27WFEYqovsYs7kPsgFulYrdOzeP8gI7CybJOya3_RgrM7qq-2BfK-2FtAHeRBLv5Qrb-2Bii5fzjLeKcP4w-2FkNgJPXygpiRhVUan3WV3QEggcf617UC8Z60RjQJZAqx7PiO7FtVJQSn0D46Zc3iTVP0kAhTTzG51cPpa5hrqz1OkSA-2BiXAxUajQ686MTtiseWBIdMdknd83aB7cOVgXlVTeHCGf3-2BcMHwfvI8TYlkUovqEhn4dj0KXf2eJGpb9-2BBv20hPXdLlPP9yD7DvFFDBM5yrTqxvcCiMfAsW1onD-2FcriL628eYdhNQE7bwzYrxcOYnmaYfRhGl-2FEHQ6eK2uQcLxs6Cbu6Dx0bYvpi5A6enmxMWU5TkcRYrP6Z8GbXZYtc5qSoKu6eWFBQR9K7fsjXwHMmby3D3X6Yx-2BxcDcdRruTG" target="_blank">Canstar</a>, if there is a cut in February, a borrower with a $600,000 loan today and 25 years remaining would see their monthly repayments drop by $92.&nbsp;

<table border="1" cellpadding="0" cellspacing="0">
	<tbody>
		<tr>
			<td colspan="3">
			Impact of 0.25% pt cut in February 2025
			</td>
		</tr>
		<tr>
			<td>
			Current loan size
			</td>
			<td>
			Drop in monthly repayment
			</td>
			<td>
			New monthly repayment
			</td>
		</tr>
		<tr>
			<td>
			$600,000
			</td>
			<td>
			-$92
			</td>
			<td>
			$3,907
			</td>
		</tr>
		<tr>
			<td>
			$750,000
			</td>
			<td>
			-$114
			</td>
			<td>
			$4,884
			</td>
		</tr>
		<tr>
			<td>
			$1M
			</td>
			<td>
			-$153
			</td>
			<td>
			$6,512
			</td>
		</tr>
		<tr>
			<td colspan="3">
			Source:&nbsp;<a data-saferedirecturl="https://www.google.com/url?q=https://link.mediaoutreach.meltwater.com/ls/click?upn%3Du001.xWMOP9hChsvn-2BC9O-2FebBihXIZ4cEzbiuENdxm-2Bx3-2FYEEgYMhZlKWNj5Zzy1YZ56RuASD_RgrM7qq-2BfK-2FtAHeRBLv5Qrb-2Bii5fzjLeKcP4w-2FkNgJPXygpiRhVUan3WV3QEggcf617UC8Z60RjQJZAqx7PiO7FtVJQSn0D46Zc3iTVP0kAhTTzG51cPpa5hrqz1OkSA-2BiXAxUajQ686MTtiseWBIdMdknd83aB7cOVgXlVTeHCGf3-2BcMHwfvI8TYlkUovqEhn4dj0KXf2eJGpb9-2BBv20v2akwr6-2BqLyRrlEgkJ4J-2BCCyY0x189xEHZA4Ylf8c7ChBqNIkhmftZzoFuZKFn43pw3oJVg2o1gumrpdA-2B7MB-2FBtmL2rFCI-2FXORATQHySCLVOMg7Vywv-2BqnnQUAtDz6XkvpwxdHFXh70VwKazzhJsICilEYOvP4ju0sIfi5g6TL&amp;source=gmail&amp;ust=1727774368149000&amp;usg=AOvVaw2qVnp6oqATgqDUi2Frm22q" href="https://link.mediaoutreach.meltwater.com/ls/click?upn=u001.xWMOP9hChsvn-2BC9O-2FebBihXIZ4cEzbiuENdxm-2Bx3-2FYEEgYMhZlKWNj5Zzy1YZ56RuASD_RgrM7qq-2BfK-2FtAHeRBLv5Qrb-2Bii5fzjLeKcP4w-2FkNgJPXygpiRhVUan3WV3QEggcf617UC8Z60RjQJZAqx7PiO7FtVJQSn0D46Zc3iTVP0kAhTTzG51cPpa5hrqz1OkSA-2BiXAxUajQ686MTtiseWBIdMdknd83aB7cOVgXlVTeHCGf3-2BcMHwfvI8TYlkUovqEhn4dj0KXf2eJGpb9-2BBv20v2akwr6-2BqLyRrlEgkJ4J-2BCCyY0x189xEHZA4Ylf8c7ChBqNIkhmftZzoFuZKFn43pw3oJVg2o1gumrpdA-2B7MB-2FBtmL2rFCI-2FXORATQHySCLVOMg7Vywv-2BqnnQUAtDz6XkvpwxdHFXh70VwKazzhJsICilEYOvP4ju0sIfi5g6TL" target="_blank">www.canstar.com.au</a>. Starting rate is the RBA existing average owner-occupier variable rate of 6.36%. Assumes banks pass the cash rate cut on in full the month after the meeting.
			</td>
		</tr>
	</tbody>
</table>

Canstar Data Insights Director, Sally Tindall, says if core inflation continues to track in the right direction, or unemployment starts to accelerate significantly, we could well see a cash rate cut as early as February of next year.

“All four big banks now believe the RBA will be ready to cut the cash rate in just over four months’ time, if not before, in the case of CBA.

“However, the outlook for both inflation and unemployment is still highly uncertain. A couple of wobbly sets of inflation data could see the RBA holding for longer, particularly if unemployment remains relatively steady."

&nbsp;

Commonwealth Bank, the nation's largest lender, still thinks the first cut will come in December.

NAB bring forward first RBA cut to February 2025

The following is the statement provided by Michele Bullock which can be <a href="https://www.rba.gov.au/media-releases/2023/mr-23-35.html">found here</a>.

At its meeting today, the Board decided to leave the cash rate target unchanged at 4.35&nbsp;per&nbsp;cent and the interest rate paid on Exchange Settlement balances unchanged at 4.25&nbsp;per&nbsp;cent.

Last month, the Board increased interest rates by 25&nbsp;basis points, following a period of four months where it had held interest rates steady. This decision reflected the Board’s view that progress in bringing inflation back to the target range of 2&nbsp;to 3&nbsp;per&nbsp;cent was looking slower than earlier forecast. While the economy has been experiencing a period of below-trend growth, it was stronger than expected over the first half of the year. Underlying inflation was higher than expected at the time of the August forecasts, including across a broad range of services. Conditions in the labour market had eased but remained tight. Housing prices were continuing to rise across the country as was the number of new mortgages. Given this, the Board judged that the risk of inflation remaining higher for longer had risen and an increase in interest rates was therefore warranted to be more assured that inflation would return to target in a reasonable timeframe.

The limited information received on the domestic economy since the November meeting has been broadly in line with expectations. The monthly CPI indicator for October suggested that inflation is continuing to moderate, driven by the goods sector; the inflation update did not, however, provide much more information on services inflation. Overall, measures of inflation expectations remain consistent with the inflation target. Wages growth picked up in the September quarter but this was expected given that it captured the earlier Fair Work Commission decision on award wages. Wages growth is not expected to increase much further and remains consistent with the inflation target, provided productivity growth picks up. Conditions in the labour market also continued to ease gradually, although they remain tight.

Higher interest rates are working to establish a more sustainable balance between aggregate supply and demand in the economy. The impact of the more recent rate rises, including last month's, will continue to flow through the economy. High inflation is weighing on people’s real incomes and household consumption growth is weak, as is dwelling investment. Holding the cash rate steady at this meeting will allow time to assess the impact of the increases in interest rates on demand, inflation and the labour market.

Returning inflation to target within a reasonable timeframe remains the Board’s priority. High inflation makes life difficult for everyone and damages the functioning of the economy. It erodes the value of savings, hurts household budgets, makes it harder for businesses to plan and invest, and worsens income inequality. And if high inflation were to become entrenched in people’s expectations, it would be much more costly to reduce later, involving even higher interest rates and a larger rise in unemployment. To date, medium-term inflation expectations have been consistent with the inflation target and it is important that this remains the case.

There are still significant uncertainties around the outlook. While there have been encouraging signs on goods inflation abroad, services price inflation has remained persistent and the same could occur in Australia. There also remains a high level of uncertainty around the outlook for the Chinese economy and the implications of the conflicts abroad. Domestically, there are uncertainties regarding the lags in the effect of monetary policy and how firms’ pricing decisions and wages will respond to the slower growth in the economy at a time when the labour market remains tight. The outlook for household consumption also remains uncertain, with many households experiencing a painful squeeze on their finances, while some are benefiting from rising housing prices, substantial savings buffers and higher interest income.

Whether further tightening of monetary policy is required to ensure that inflation returns to target in a reasonable timeframe will depend upon the data and the evolving assessment of risks. In making its decisions, the Board will continue to pay close attention to developments in the global economy, trends in domestic demand, and the outlook for inflation and the labour market. The Board remains resolute in its determination to return inflation to target and will do what is necessary to achieve that outcome.

Urban Editorial

RBA keeps rates on hold at final meeting of 2023

The full statement from the Reserve Bank of Australia on its November Cup Day rate hike

At its meeting today, the Board decided to raise the cash rate target by 25&nbsp;basis points to 4.35&nbsp;per&nbsp;cent. It also increased the interest rate paid on Exchange Settlement balances by 25&nbsp;basis points to 4.25&nbsp;per&nbsp;cent.

Inflation in Australia has passed its peak but is still too high and is proving more persistent than expected a few months ago. The latest reading on CPI inflation indicates that while goods price inflation has eased further, the prices of many services are continuing to rise briskly. While the central forecast is for CPI inflation to continue to decline, progress looks to be slower than earlier expected. CPI inflation is now expected to be around 3½&nbsp;per&nbsp;cent by the end of 2024 and at the top of the target range of 2&nbsp;to 3&nbsp;per&nbsp;cent by the end of 2025. The Board judged an increase in interest rates was warranted today to be more assured that inflation would return to target in a reasonable timeframe.

The Board had held interest rates steady since June following an increase of 4&nbsp;percentage points since May last year. It had judged that higher interest rates were working to establish a more sustainable balance between supply and demand in the economy. Furthermore, it had noted that the impact of the more recent rate rises would continue to flow through the economy. It had therefore decided that it was appropriate to hold rates steady to provide time to assess the impact of the increase in interest rates so far. In particular, the Board had indicated that it would be paying close attention to developments in the global economy, trends in household spending, and the outlook for inflation and the labour market.

Since its August meeting, the Board has received updated information on inflation, the labour market, economic activity and the revised set of forecasts. The weight of this information suggests that the risk of inflation remaining higher for longer has increased. While the economy is experiencing a period of below-trend growth, it has been stronger than expected over the first half of the year. Underlying inflation was higher than expected at the time of the August forecasts, including across a broad range of services. Conditions in the labour market have eased but they remain tight. Housing prices are continuing to rise across the country.

At the same time, high inflation is weighing on people’s real incomes and household consumption growth is weak, as is dwelling investment. Given that the economy is forecast to grow below trend, employment is expected to grow slower than the labour force and the unemployment rate is expected to rise gradually to around 4¼&nbsp;per&nbsp;cent. This is a more moderate increase than previously forecast. Wages growth has picked up over the past year but is still consistent with the inflation target, provided that productivity growth picks up.

Returning inflation to target within a reasonable timeframe remains the Board’s priority. High inflation makes life difficult for everyone and damages the functioning of the economy. It erodes the value of savings, hurts household budgets, makes it harder for businesses to plan and invest, and worsens income inequality. And if high inflation were to become entrenched in people’s expectations, it would be much more costly to reduce later, involving even higher interest rates and a larger rise in unemployment. To date, medium-term inflation expectations have been consistent with the inflation target and it is important that this remains the case.

There are still significant uncertainties around the outlook. Services price inflation has been surprisingly persistent overseas and the same could occur in Australia. There are uncertainties regarding the lags in the effect of monetary policy and how firms’ pricing decisions and wages will respond to the slower growth in the economy at a time when the labour market remains tight. The outlook for household consumption also remains uncertain, with many households experiencing a painful squeeze on their finances, while some are benefiting from rising housing prices, substantial savings buffers and higher interest income. And globally, there remains a high level of uncertainty around the outlook for the Chinese economy and the implications of the conflicts abroad.

Whether further tightening of monetary policy is required to ensure that inflation returns to target in a reasonable timeframe will depend upon the data and the evolving assessment of risks. In making its decisions, the Board will continue to pay close attention to developments in the global economy, trends in domestic demand, and the outlook for inflation and the labour market. The Board remains resolute in its determination to return inflation to target and will do what is necessary to achieve that outcome.

Source: <a href="https://www.rba.gov.au/media-releases/2023/mr-23-30.html">www.rba.gov.au</a>

At its meeting today, the Board decided to raise the cash rate target by 25 basis points to 4.35 per cent

RBA hike interest rates at Cup Day meeting

Property values across the country continued to decline over November, research from property data firm CoreLogic found, but there was a further ease in the speed of the declines.

Dwelling values (which incorporates both houses and units), contracted a further one per cent in November, driven by declines in Hobart (-2 per cent), Canberra (-1.2 per cent), and Sydney (-1 per cent).

Capital city housing markets declined -1.2 per cent, with Brisbane (-2.2 per cent), Hobart (-2 per cent) and Sydney (-1.5 per cent), feeling the declines the hardest.

Capital city units however dropped just -0.6 per cent. Hobart (-1.8 per cent), Sydney (-0.9 per cent) and Canberra (-0.8 per cent) the capital's the most affected in the unit market.

Declines however have continued to soften since August when the national index dropped by -1.6 per cent.

CoreLogic Research Director Tim Lawless said the easing in the rate of decline is mostly emanating from the Sydney and Melbourne markets, but is also evident across many of the smaller capitals and most regional markets.&nbsp;

“Three months ago, Sydney housing values were falling at the monthly rate of -2.3 per cent. That has now reduced by a full percentage point to a decline of -1.3 per cent in November," Lawless said.&nbsp;

"In July, Melbourne home values were down -1.5 per cent over the month, with the monthly decline almost halving last month to -0.8 per cent.

“The rate of decline has also eased across the ACT (from a -1.7% fall in August), and is no longer accelerating in Brisbane. Most of the broad rest-of-state markets have also seen the pace of declines decelerate."

Lawless said that it is possible we are seeing the initial uncertainty around buying in a higher interest rate environment wearing off, while persistently low advertised stock levels have likely contributed to this trend towards smaller value falls. He does however note that housing risk remains skewed to the downside while interest rates are still rising and household balance sheets become more thinly stretched.

“There is still the possibility that the pace of declines could reaccelerate, especially if the current rate hiking cycle persists longer than expected.

"Next year will be a particular test of serviceability and housing market stability, as the record-low fixed rate terms secured in 2021 start to expire."

<h2>Melbourne Market Snapshot</h2>

<ul>
	<li>Unit values across Melbourne dropped just -0.2 per cent across November, the lowest declines the Victorian capital has seen since May. 
	&nbsp;</li>
	<li>It's stark comparison to the housing market, which dropped another -1 per cent.</li>
</ul>

[smartcode_project:default project_id=112174 project_image_fid=199593]

<ul>
	<li>Unit values are now -4.1 per cent down over 2022, almost half the declines felt in the housing market, now -8.1 per cent since the turn of the year. 
	&nbsp;</li>
	<li>The median Melbourne unit value is now $597,000, and houses $759,000.</li>
</ul>

<h2>Sydney Market Snapshot</h2>

<ul>
	<li>Unit values across Sydney dropped just -0.9&nbsp;per cent across November, the third highest of all the capital city markets. 
	&nbsp;</li>
	<li>Sydney houses dropped another -1.5 per cent in November.</li>
</ul>

[smartcode_project:default project_id=22748 project_image_fid=204929]

<ul>
	<li>Unit values are now -8.2 per cent down over 2022, which is double the declines in Melbourne. Houses in the Harbour capital are down -11.9 per cent in the same period. 
	&nbsp;</li>
	<li>The median Sydney unit value is now $781,000, and houses $1,025,000.</li>
</ul>

<h2>Brisbane Market Snapshot</h2>

<ul>
	<li>Brisbane had the biggest divergence between the house and unit market in November 
	&nbsp;</li>
	<li>Unit values across Brisbane dropped just -0.2&nbsp;per cent across November, the third best performing unit market across the capitals. 
	&nbsp;</li>
	<li>Brisbane houses however were the worst performer, down -2.2 per cent</li>
</ul>

[smartcode_project:default project_id=102309 project_image_fid=163977]

<ul>
	<li>The Brisbane unit market has been one of the biggest success stories of 2022, bucking the trend of the downturn. Values are still 7.1 per cent higher than they were at the start of the year. 
	&nbsp;</li>
	<li>The Brisbane house market has also remained resilient, just ticking into negative territory, down -0.8 per cent this year. 
	&nbsp;</li>
	<li>The median Brisbane unit value is now $492,000, and houses $798,000.</li>
</ul>

CoreLogic Research Director Tim Lawless said the easing in the rate of decline is mostly emanating from the Sydney and Melbourne markets

Property downturn continues, but rate of decline softens again: CoreLogic

The RBA has hiked rates for the sixth month in a row, with the Tuesday meeting seeing rates rise by 0.25 per cent.

Three of the big four banks expected a half a percentage point rise, with just Commonwealth Bank predicting the 25 basis point rise.

The official cash rate is now at 2.6 per cent.

The RBA noted in their statement that, as is the case in most countries, inflation in Australia is too high.

"Global factors explain much of this high inflation, but strong domestic demand relative to the ability of the economy to meet that demand is also playing a role," RBA Governor Philip Lowe noted in the announcement.

The RBA predicted a further increase in inflation over the months ahead, before it then declines back toward the two to three per cent range.

"The expected moderation in inflation next year reflects the ongoing resolution of global supply-side problems, recent declines in some commodity prices and the impact of rising interest rates.

"Medium-term inflation expectations remain well anchored, and it is important that this remains the case. The Bank’s central forecast is for CPI inflation to be around 7¾ per cent over 2022, a little above 4 per cent over 2023 and around 3 per cent over 2024."

As for mortgages, Lowe noted that higher inflation and higher interest rates are putting pressure on household budgets, with the full effects of higher interest rates yet to be felt in mortgage payments.

"Consumer confidence has also fallen and housing prices are declining after the earlier large increases.," Lowe suggested.

"Working in the other direction, people are finding jobs, gaining more hours of work and receiving higher wages. Many households have also built up large financial buffers and the saving rate still remains higher than it was before the pandemic."

Graham Cooke, head of consumer research at Finder, said Aussies with a $500,000 mortgage will be paying almost $9,000 more a year in interest compared to just six months ago.

“Australians with a $500,000 mortgage will be forking out $735 more per month compared to what they were paying in April.&nbsp; 
 
“That’s a whopping amount of extra money to pay every month – especially when everyday items like groceries and petrol are skyrocketing in price."

The RBA noted in their statement that, as is the case in most countries, inflation in Australia is too high.



RBA hike interest rates by 0.25 per cent, points to high inflation

Affordability issues appeared to have curbed borrowing activity of first home buyers and owner occupiers, but not investor loans in September, according to the latest Australian Bureau of Statistics data.

The value of new home loans dropped for the second month in a row.

In September, $30 billion of new mortgages were settled, down 1.4 per cent from August, in seasonally-adjusted terms.

Owner-occupier lending dropped 2.7 percent from August.

Investor lending continued to climb, reaching its highest level since April 2015 with $9.62 billion in loans settled in September, up 1.4 per cent month-on-month.

Increased investor loan commitments were seen across most states, with particular strength in Queensland (up 4.2 per cent), South Australia (up 16.4 per cent) and Western Australia (up 7.3 per cent). Smaller rises in investor borrowing were seen in Victoria (up 1.4 per cent), New South Wales (up 0.1 per cent), the Australian Capital Territory (up 1.0 per cent) and Tasmania (up 1.4 per cent). 

For the eighth conscutive month, the number of owner-occupier first home buyer loans fell, down 5.6 per cent in September, to be down 27.1 percent since the January peak.

Ratecity noted Victoria, in lockdown, led the retreat with the number of first home buyer loans dropping 16.7 percent in the month, while NSW dropped by 3.1 percent.

Western Australia fhbs had the largest rise of 5.9 percent, while Queensland rose 2.1 percent and South Australia rose 4.3 percent.

ABS head of finance and wealth, Katherine Keenan, said the average loan size for owner occupiers has grown, but the value of new loan commitments for owner-occupier housing fell for the fourth month in a row, to $20.7 billion in September.

"Affordability constraints are biting in the first home buyer space, with dwelling prices rising by over 20% on an annual basis," the Comm Bank said.

NSW owner occupiers borrowed an average of $750,000 in September which was a record high.

The big banks are all now applying stricter loan criteria on applications as of November 1 given lending requirements imposed by APRA.

There has been positive growth in investors taking on mortgages since October last year

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Investors return to property with six year borrowing high: ABS 

RBA Governor Statement

At its meeting today, the Board decided to:

maintain the cash rate target at 10&nbsp;basis points and the interest rate on Exchange Settlement balances of zero per&nbsp;cent

maintain the target of 10&nbsp;basis points for the April 2024 Australian Government bond

purchase government securities at the rate of $4&nbsp;billion a week and to continue the purchases at this rate until at least mid February 2022.

Prior to the Delta outbreak the Australian economy had considerable momentum. GDP increased by 0.7&nbsp;per&nbsp;cent in the June quarter and by nearly 10&nbsp;per&nbsp;cent over the year. Business investment was picking up and the labour market had strengthened. The unemployment rate had fallen below 5&nbsp;per&nbsp;cent and job vacancies were at a high level.

The recovery in the Australian economy has, however, been interrupted by the Delta outbreak and the associated restrictions on activity. GDP is expected to decline materially in the September quarter and the unemployment rate will move higher over coming months. While the outbreak is affecting most parts of the economy, the impact is uneven, with some areas facing very difficult conditions while others are continuing to grow strongly.

This setback to the economic expansion is expected to be only temporary. The Delta outbreak is expected to delay, but not derail, the recovery. As vaccination rates increase further and restrictions are eased, the economy should bounce back. There is, however, uncertainty about the timing and pace of this bounce-back and it is likely to be slower than that earlier in the year. Much will depend on the health situation and the easing of restrictions on activity. In our central scenario, the economy will be growing again in the December quarter and is expected to be back around its pre-Delta path in the second half of next year.

Notwithstanding the strong economic and labour market outcomes pre-Delta, wage and price pressures remain subdued. Over the year to the June quarter, the Wage Price Index increased by just 1.7&nbsp;per&nbsp;cent.

Housing prices are continuing to rise, although turnover in some markets has declined following the virus outbreak. Housing credit growth has picked up due to stronger demand for credit by both owner-occupiers and investors. Given the environment of rising housing prices and low interest rates, the Bank is monitoring trends in housing borrowing carefully and it is important that lending standards are maintained.

Very accommodative financial conditions will continue to support the recovery of the Australian economy. Borrowing rates are at record lows, sovereign bond yields are at very low levels and the exchange rate has depreciated over recent months. The fiscal responses by the Australian Government and the state and territory governments are also providing welcome assistance in supporting household and business balance sheets.

The Board&#39;s decision to extend the bond purchases at $4&nbsp;billion a week until at least February 2022 reflects the delay in the economic recovery and the increased uncertainty associated with the Delta outbreak. The Board will continue to review the bond purchase program in light of economic conditions and the health situation, and their implications for the expected progress towards full employment and the inflation target. These bond purchases, together with the low level of the cash rate, the yield target and the funding that has been provided under the Term Funding Facility, are providing substantial and ongoing support to the Australian economy.

The Board is committed to maintaining highly supportive monetary conditions to achieve a return to full employment in Australia and inflation consistent with the target. It will not increase the cash rate until actual inflation is sustainably within the 2&nbsp;to 3&nbsp;per&nbsp;cent target range. The central scenario for the economy is that this condition will not be met before 2024. Meeting this condition will require the labour market to be tight enough to generate wages growth that is materially higher than it is currently.

RBA holds rates, turnover declines following the virus outbreak: RBA Governor Philip Lowe's September 2021 meeting statement

The RBA has held interest rates at a record low 0.1 per cent at its September meeting.

RBA Governor Philip Lowe&#39;s said that housing prices are continuing to rise, although turnover in some markets has declined following the virus outbreak.

&quot;Housing credit growth has picked up due to stronger demand for credit by both owner-occupiers and investors, Lowe noted.

&quot;Given the environment of rising housing prices and low interest rates, the Bank is monitoring trends in housing borrowing carefully and it is important that lending standards are maintained.&quot;

In Finder.com.au&#39;s monthly RBA Survey, AMP Capital chief economist Shane Oliver said the lockdown and its hit to the economy&nbsp;has further delayed the time when the effective RBA conditions &ndash; full employment and 3% or more wages growth to sustain 2-3% inflation &ndash; will be met to justify a rate hike.

[smartcode_project:default project_id=103179 project_image_fid=167473]

Commentator Saul Eslake said he takes the RBA at its word&nbsp;when it says it won&#39;t begin tightening monetary policy until the labour market is sufficiently tight to generate wage inflation that&#39;s sufficiently strong to push &#39;underlying&#39; consumer price inflation sustainably into the 2-3% target range.

&quot;While I think that may well be sooner than the RBA&#39;s &lsquo;central case&rsquo; of 2024, I don&#39;t think it will be any earlier than mid-2023,&quot; Eslake says.

Dr Andrew Wilson from My Housing Market says that no change in fundamental economic weakness confirmed again with low wages growth despite robust labour market.

&quot;As usual &ndash; absolutely no plausible case on current data for higher rates over the foreseeable future &ndash; and then there is Covid.&quot;

[smartcode_project:default project_id=102580 project_image_fid=167435]

New research from Finder reveals that over half of&nbsp;homeowners across the country&nbsp;are concerned about interest rates increasing in the near future.

Around15% fear they may not be able to make their repayments once rates creep up.

Finder.com.au&#39;s head of consumer research Graham Cooke says some homeowners may have purchased beyond their means in the midst of the housing market frenzy.

[smartcode_project:default project_id=22308 project_image_fid=75031]

&ldquo;The past 12 months have seen property prices explode as record numbers of Australians have fled into the housing market,&quot; Cooke says.

&ldquo;Low interest rates have encouraged many buyers to purchase earlier than they otherwise might have for fear of missing out.

&ldquo;But not all of them will have budgeted for their monthly repayments to go up if or before the cash rate increases,&rdquo; Cooke said.

Finder analysis reveals the average monthly mortgage payments in Sydney are worth 76% of the average worker&rsquo;s after-tax earnings &ndash; the highest in the country. Melbourne (57%) is not far behind, followed by Canberra (49%) and Hobart (49%). Perth is at the bottom of the list, with the average mortgage costing a more reasonable 35% of average earnings.

RBA Governor Philip Lowe's said that housing prices are continuing to rise, although turnover in some markets has declined following the virus outbreak

RBA leave cash rate on hold at September meeting

The RBA has held interest rates at a record low 0.1 per cent at its August meeting.

RBA Governor Philip Lowe&#39;s comments on the housing market were much the same, noting all markets continuing to strengthen, with prices rising in all major markets.

He did cite an increase in borrowing by investors, and that given the environment of rising housing prices and low interest rates, the Bank is monitoring trends in housing borrowing carefully and it is important that lending standards are maintained.

The experts and economists surveyed in Finder.com.au&#39;s RBA Cash Rate Survey all called the cash rate hold, with 75 per cent predicting the increase won&#39;t happen until 2023.

Tony Makin of Griffith University was the lone expert predicting the rate to rise before 2022.

&quot;In coming months a clearer picture will emerge of underlying inflation trends both in the US and [in Australia]. The recent US inflation spike is unlikely to be temporary given the massive money supply increase, recovery from the pandemic, and substantial US fiscal expansion.&quot;

AMP Capital&#39;s Shane Oliver said the RBA is still a long way from meeting its conditions for a rate hike &ndash; namely inflation sustainably back in the 2&ndash;3% target range which will require full employment and wages growth sustainably above 3%. And the latest coronavirus outbreaks and lockdowns risk delaying progress towards its goals.

Over a third of experts (71%), called for a change in stamp duty.

They agree that changes need to be made to either stamp duty or government stimulus in order to help buyers enter the property market.

Just over half (54%) think that only stamp duty should be changed, while another third (29%) think neither should be changed.

Finder&#39;s insights manager Graham Cooke said an easing of stamp duty could reduce the burden for first time buyers and establish a more even playing field.

&ldquo;Stamp duty is essentially a tax that slows down the turnover of property. It discourages current&nbsp;homeowners from downsizing, which locks up some of the market. &ldquo;A long-term land tax would provide a fairer long-term solution, while adding liquidity to the housing market,&rdquo; Cooke said.

RBA holds rates at August meeting, experts call for stamp duty changes

RBA Governor Statement

The economic recovery in Australia has been stronger than was earlier expected. The recent outbreaks of the virus are, however, interrupting the recovery and GDP is expected to decline in the September quarter. The experience to date has been that once virus outbreaks are contained, the economy bounces back quickly. Prior to the current virus outbreaks, the Australian economy had considerable momentum and it is still expected to grow strongly again next year. The economy is benefiting from significant additional policy support and the vaccination program will also assist with the recovery.

The economic outlook for the coming months is uncertain and depends upon the evolution of the health situation and the containment measures. Beyond that, the Bank&#39;s central scenario is for the economy to grow by a little over 4&nbsp;per&nbsp;cent over 2022 and by around 2&frac12; per&nbsp;cent over 2023. This scenario is based on a significant share of the population being vaccinated by the end of this year and a gradual opening up of the international border from the middle of 2022. The Board also considered a range of other scenarios, with the main source of uncertainty being the health situation.

The labour market has recovered faster than expected, with the unemployment rate declining further to 4.9&nbsp;per&nbsp;cent in June. Job vacancies have remained at a high level and there are reports of labour shortages in parts of the economy. Some increase in the unemployment rate is expected in the near term due to the current lockdowns, but most of the adjustment in the labour market is likely to take place through a reduction in hours worked and in participation. In the central scenario, the unemployment rate continues to trend lower next year, to be around 4&frac14; per&nbsp;cent at the end of 2022 and 4&nbsp;per&nbsp;cent at the end of 2023.

The CPI inflation rate spiked to 3.8&nbsp;per&nbsp;cent for the year to the June quarter, largely reflecting the unwinding of some earlier&nbsp;COVID-19-related price declines. In underlying terms, inflation remains low, at around 1&frac34; per&nbsp;cent.

Looking forward, a pick-up in both wages growth and underlying inflation is expected, but this pick-up is likely to be only gradual. In the Bank&#39;s central scenario, it takes some years for the stronger economy to feed through into wage and price increases that are consistent with the inflation target. In underlying terms, inflation is expected to be 1&frac34; per&nbsp;cent over 2022 and 2&frac14; per&nbsp;cent over 2023. One source of uncertainty is the behaviour of wages and prices at the low levels of forecast unemployment, including because it is some decades since Australia has sustained an unemployment rate around 4&nbsp;per&nbsp;cent.

Housing markets have continued to strengthen, with prices rising in all major markets. Housing credit growth has picked up, with strong demand from owner-occupiers, including first-home buyers. There has also been increased borrowing by investors. Given the environment of rising housing prices and low interest rates, the Bank is monitoring trends in housing borrowing carefully and it is important that lending standards are maintained.

Domestic financial conditions remain very accommodative, sovereign bond yields have declined and the exchange rate has depreciated to around its lowest level this year, despite elevated levels of commodity prices. The recent fiscal responses by the Australian Government and the state and territory governments are also providing welcome support to the economy at a time of significant short-term disruption.

The Board remains committed to maintaining highly accommodative monetary conditions to support a return to full employment in Australia and inflation consistent with the target. Together, the low level of the cash rate, the bond purchase program, the yield target and the ongoing funding that has been provided under the Term Funding Facility are providing substantial support to the Australian economy in the face of lockdowns in parts of the country and the expected resumption of the economic expansion.

The Board will maintain its flexible approach to the rate of bond purchases. The program will continue to be reviewed in light of economic conditions and the health situation, and their implications for the expected progress towards full employment and the inflation target. The Board will not increase the cash rate until actual inflation is sustainably within the 2&nbsp;to 3&nbsp;per&nbsp;cent target range. The central scenario for the economy is that this condition will not be met before 2024. Meeting this condition will require the labour market to be tight enough to generate wages growth that is materially higher than it is currently.

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