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GUEST OBSERVER
E-commerce giant Amazon has struck a deal to acquire Whole Foods Market, an American supermarket chain with more than 400 stores.
The move has put even more pressure on Australian retailers as Amazon sets up shop in Australia. 
But the real threat to Australian retail lies in Amazon’s business model. It is a low-margin retailer that owns several other highly profitable and fast-growing businesses, such as cloud services. These other businesses can and do cross-subsidise its retail operations.
JB Hi-Fi and Harvey Norman have suggested they will compete with Amazon on price, but given the cost structure of Australian retailers this may not be possible.
Amazon is very lean
While Amazon is extremely large, it is very lean. In 2016 alone, Amazon sold US$94.7 billion of product globally. But the cost of buying (or manufacturing) these products was US$88.3 billion, leading to a gross profit of just US$6.4 billion. 
This means the mark-up Amazon puts on its products is very small. For example, in 2016 Amazon’s gross profit margin (gross profit divided by sales revenue) was just 6.8%. JB Hi-Fi had a margin of 21.9%, Woolworths26.8%, Wesfarmers 31.0%, Harvey Norman 31.4%, Myer 42.1% and Super Retail Group a whopping 43.4%.
But Australian retailers also face high operational costs (wages, advertising, marketing and leases). The two largest, Wesfarmers and Woolworths, both have operating expenses in excess of 24.0% of sales revenue, while Myer, Super Retail Group and Harvey Norman are all around 40.0%. JB Hi-Fi is an outlier at just 16.3%.
Another important measure to consider is the net profit margin. This shows what percentage of each dollar of sales the company ultimately earns after all costs (including tax) are factored in. Net margin is calculated by dividing net profit after tax by sales revenue.
The net profit margins for Australian retailers are, for the most part, quite low – around 2-3%. This means they don’t have much room to move on price. If they drop prices, many will become unprofitable. So even if Amazon doesn’t start a price war in Australia, its business model is such that prices will be extremely competitive. 
Amazon has other businesses
Most Australian retailers are only retailers. Some of the larger groups, such as Myer and Wesfarmers, operate across a few industries. But they ultimately still earn nearly all their revenue from buying and then re-selling physical products.
Amazon, on the other hand, has a profitable and booming services business. Its “services sales” represents about US$41.3 billion in sales, or 30% of its revenue. This covers third-party seller fees (Amazon charges other companies for access to its marketplace and warehouses), Amazon Web Services (a fast-growing provider of cloud services), digital subscriptions, advertising services and co-branded credit card fees.
In its 2016 annual report, Amazon reported US$12.2 billion in revenue from Amazon Web Services alone. The scariest thing for Australian retailers is that this has increased four-fold since 2013, and is responsible for nearly 75% of Amazon’s operating profit. 
Amazon, then, not only has a large, low-margin online retail offering, but is supported by a fast-growing, high-margin cloud service. 
Finding new ways to compete
Most Australian retailers will need to look at other ways of saving costs if they are to remain competitive with Amazon. For example, Coles and Woolworths can put even more pressure on suppliers to reduce their costs. Coles has recently signalled that it will pursue this strategy. And all of our retailers can try to reduce the cost of leases, and shift or reduce staff.
The small margins of most Australian retailers mean reducing prices alone isn’t a viable long-term strategy, especially as Amazon Web Services gains steam and Amazon is profitable in other countries.
Not every retailer will come under the same pressure, though. In the short term at least, groceries are still likely to be purchased in stores. But the same can’t be said of clothing and electronics. This means Woolworths and Wesfarmers should not be as concerned as Myer, Super Retail Group and JB Hi-Fi. 
The answer for retailers may be to look past price and compete on other aspects of the shopping experience, such as convenience or customer service. But only time will tell if that’s what the Australian public wants.
David Bond is Senior Lecturer, Accounting Discipline Group, University of Technology Sydney and author for The Conversation. He can be contacted <a href="https://theconversation.com/profiles/david-bond-172639" target="_blank">here</a>.
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Amazon poses a double threat to Australian retailers

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GUEST OBSERVER
One of the most significant and far-reaching retail legislative changes will quietly come into effect in New South Wales on 1 July 2017.
The amendments to the Retail Leases Act of NSW are numerous and in essence, will change the dynamics of retail leasing as we know it.
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Of the many changes being made, the change I believe that will have the biggest impact on the sector is the requirement for all leases under the Act, over three years in length, to be registered within three months from leases being signed. This will increase transparency in the sector and help to continue levelling the playing field between tenants and landlords. 
Even more transparency will result with the change that requires Landlords to accurately disclose and estimate outgoings in a Disclosure Statement, failing which, that outgoings will not be recoverable. 
The removal of the requirement for a minimum five-year lease term in the new Act will likely result in both longer and shorter-term leases. This is a positive for the market as it will allow greater flexibility in this volatile and ever-changing market. 
Also included in the Act is a change to how bank guarantees need to be handled. Once the Act is in place, Landlords will be required to return bank guarantees to the tenant within two months after the tenant completes performance. 
Another change for landlords means they will no longer be able to request online sales revenue information from tenants, except for goods delivered from the premises or where the centre or the transaction takes place while the customer is in the premises. 
Redundant manual processing of rental bonds will be replaced with a change to the Act that will see the rental bond scheme move to an online platform cutting out the need for physical documents to be lodged. 
Another change includes increasing the penalty notices for offences. These include the right to compensation if a landlord fails to provide a disclosure statement within seven days before the lease is entered into or if it is misleading or incomplete. 
The amendments to the Act will create a more transparent and balanced retail leasing market, enabling greater flexibility and operational efficiency for both tenants and landlords, in a sector that is undergoing significant cyclical and structural change. 
Simon Fonteyn is Managing Director, Leasing Information Systems and can be <a href="https://www.leaseinfo.com.au" target="_blank">contacted here</a>.
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Amendments to the Retail Leases Act of NSW looming

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GUEST OBSERVER
There was little change in most of China’s key monthly indicators in May. ‘Old economy’ measures, such as industrial production and fixed asset investment were flat or slightly higher (in real terms), while real retail sales were marginally weaker.
As we suggested last month, these indicators suggest slightly softer economic conditions in Q2, compared with the relatively strong rate in Q1. Our forecasts remain unchanged, with China’s economy to grow by 6.5% in 2017, before slowing to 6.25% next year and 6.0% in 2019. China’s industrial production grew by 6.5% yoy in May – unchanged from the rate recorded in April. Construction related heavy industrial sectors (such as crude steel and cement ) saw much weaker growth. China’s fixed asset investment recorded slightly weaker growth in May – at around 7.9% yoy (from 8.3% in April). That said, weaker inflation trends for investment goods meant that real fixed asset investment was slightly higher (1.5% in May, up from 0.9% in April). Real estate investment has remained comparatively strong, however we continue to anticipate a slowdown in construction activity this year – given tighter financial and policy constraints – which should flow through to industrial production and demand for Australian commodity exports. China’s trade balance edged slightly higher in May – to US$40.8 billion (from US$38.0 billion in April). Both imports and exports were higher month-on-month (with the increase in exports stronger). Commodity prices have had a major impact on import values (and likely export values as well given producer price trends) – with values likely to slow across the second half of the year – in line with weaker commodity price forecasts. Growth in retail sales was unchanged in May – with nominal sales rising by 10.7% yoy. The uptick in inflation during the month meant that real retail sales were slightly weaker – albeit stronger than the growth across most of 2016. Consumer confidence pushed higher in April – up to 113.4 points (the highest level recorded since June 2007). Chinese monetary policy remained comparatively stable in across May and early June – with the 7 day Shibor trading in a narrow range of just under 9 basis points around the 2.9% mark. This represents around 40 basis points of tightening since the start of the year. Our monetary policy views are unchanged – we believe that the PBoC has a tightening bias, but will be cautious in doing so, in an attempt to manage the risks associated with the country’s high corporate debt levels.
China’s industrial production grew by 6.5% yoy in May – unchanged from the rate recorded in April. This was stronger than market expectations (6.4% in the Bloomberg poll and 6.3% in the Thomson Reuters poll) and higher than the trend seen across much of the past two years.
<a href="https://www.propertyobserver.com.au/images/2017/06/19/3a.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/06/19/3a.png" width="700" height="474"> Construction related heavy industrial sectors saw much weaker growth – with crude steel output rising by just 1.8% yoy to 72.3 million tonnes (down from record production levels in April), while cement production rose by just 0.5% yoy. In contrast, motor vehicle production was stronger – up by 4.1% yoy in May (compared with 0.3% in April), while growth in electricity output eased to 5.0% yoy (from 5.4% previously). There were mixed trends in China’s main industrial surveys in May. The official NBS PMI survey was unchanged at 51.2 points. In contrast, the Caixin Markit PMI fell further – down to a slightly negative 49.6 points (from 50.3 points in April).
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<img src="https://www.urban.com.au/images/2017/06/19/3b.png" width="700" height="482">
China’s fixed asset investment recorded slightly weaker growth in May – at around 7.9% yoy (from 8.3% in April). That said, the decline in prices for investment goods probably outpaced the fall in nominal investment – given recent trends in producer prices and commodity markets – meaning that real fixed asset investment has trended slightly higher. Our estimate suggests real investment grew by 1.5% in May, up from 0.9% in April.
<a href="https://www.propertyobserver.com.au/images/2017/06/19/4a.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/06/19/4a.png" width="700" height="468"> Private sector investment edged slightly higher in May – rising by 6.6% yoy(on a three month moving average basis) – albeit this remains below the growth rate of early 2016 (prior to the plunge mid-year). In contrast, investment by state owned enterprises dipped to 12.2% yoy (3mma), from 13.7% previously. Despite measures designed to cool the sector, investment in real estate has continued to grow strongly – rising by 8.8% yoy (3mma) in May – down from 9.3% last month. Manufacturing investment was slightly stronger – at 5.3% yoy (3mma) from 4.8% previously. Efforts by authorities at central and local levels to control property prices (including larger down payments, higher lending rates and purchasing restrictions) are yet to show widespread results. Month-on-month prices rose by 0.5% for new builds and 0.7% for existing properties in April (both stronger than March) according to NBS data. That said, unofficial data for May (released by the Chinese Academy of Social Sciences) suggests that prices in some key cities – including Beijing and Tianjin – may have fallen in May. New residential construction starts recorded weaker growth in May – at 8.4% yoy (down from 16.6% in April) – although it is unclear if this a slowing trend or merely volatility in the data. On a three month moving average basis, the slowdown was less pronounced – at 15.1% yoy (down from 17.5%). We continue to anticipate a slowdown in construction activity this year – given tighter financial and policy constraints – which should flow through industrial production and demand for Australian commodity exports.
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<img src="https://www.urban.com.au/images/2017/06/19/4b.png" width="700" height="474">
China’s trade balance edged slightly higher in May – to US$40.8 billion (from US$38.0 billion in April). Both imports and exports were higher month-on-month (with the increase in exports stronger). China’s imports were stronger in May – at US$150.2 billion (compared with US$142 billion in April) – with this representing a year-on-year increase of 14.6%. This increase was in part driven by commodity price trends – with the RBA Index of Commodity Prices increasing by 29% yoy in May. This means that import values are likely to slow across the second half of the year – in line with forecasts of weaker commodity price growth.
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<img src="https://www.urban.com.au/images/2017/06/19/5b.png" width="700" height="491">
 In contrast, the overall volume of imports has increased more modestly. While import values have risen by around 19% in the first five months of the year, our estimate of volumes is just 6.4% higher. Trends continue to diverge when it comes to the import volumes of key commodities. Coal imports recorded strong year-on-year growth – at almost 17% – although the May level was 18% below last November’s peak. The surge in coal imports – particularly across the second half of last year – was driven by government policy that constrained domestic supply, and there remains considerable uncertainty around the longer term – with both domestic demand and supply falling (the latter through enforced mine closures). Crude oil imports rose by 15% yoy in May, while iron ore imports rose by 5.5% yoy – despite iron ore stocks reaching record levels in May (while prices for ore continued to fall). Copper imports fell by 9.3% yoy – a trend evident for the past nine months.
The value of China’s exports rose in May – totalling US$191.0 billion (from US$180 billion in March) – an increase of 8.7% yoy.
<a href="https://www.propertyobserver.com.au/images/2017/06/19/6a.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/06/19/6a.png" width="700" height="473"> The confidence of exporters has remained relatively flat in recent months – despite the uptick in export values – with the new export orders measure in the NBS PMI survey at 50.7 points in May (up from 50.6 points previously) – below the near five year high of 51.0 points in March. Exports to China’s major trading partners continue to show diverging trends. There was strong growth for the United States – up by 11.7% yoy – and the European Union (9.7% yoy), while exports to other East Asian markets fell by 2.0% yoy. This result continues to be influenced by the historic distortion in Hong Kong-China trade data. Exports to non-Hong Kong Asia rose by 4.1% yoy in May – led by increases in trade with South Korea, Vietnam and Indonesia – while exports to Hong Kong fell by 10.6% yoy. So far this year, there has been a close correlation between the trade values reported by both China and Hong Kong customs – for the first time since 2010. In the first four months of 2017, the total difference between the two totalled RMB 1.9 million, compared with RMB 13.7 billion in the same period of 2016, RMB 12 billion in 2015 and RMB 24.6 billion in 2014. In part this discrepancy reflected capital outflows disguised as trade activity – through methods such as false invoicing – something that Chinese authorities have clamped down on more recently. That said, the overstated historical exports paints a more negative view on current trade data. While Chinese data suggests that exports to Hong Kong fell by over 15% yoy in April, Hong Kong customs data recorded an increase of 4.3% yoy.
Growth in retail sales was unchanged in May – with nominal sales rising by 10.7% yoy. The uptick in inflation (see below) during the month meant that real retail sales were slightly weaker – at around 9.4% yoy (down from 9.7% previously) – although this rate was stronger than the growth recorded across most of 2016.
<a href="https://www.propertyobserver.com.au/images/2017/06/19/7a.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/06/19/7a.png" width="700" height="483"> Despite real sales dipping below 10% last month, consumer confidence pushed higher in April – up to 113.4 points (the highest level recorded since June 2007). China’s headline inflation edged slightly higher in May – with the Consumer Price Index pushing up to 1.5% yoy (from 1.2% in April). Food prices have continued to contract – contributing to the recent weakness in inflation trends. Aggregate food prices fell by 1.6% yoy in May (compared with 3.5% in April and 4.4% in March). Prices for meat &amp; poultry, eggs and fresh vegetables fell year-on-year – albeit vegetables decline was smaller in May – at 6.3% yoy versus 22% in April. In contrast, the stronger trend for non-food prices has continued, with the index rising by 2.3% yoy in May (compared with 2.4% in April) – more than double the rate recorded a year ago. Fuel prices have been a major contributor, with double digit growth for the past six months (10.2% yoy in May).
<a href="https://www.propertyobserver.com.au/images/2017/06/19/7b.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/06/19/7b.png" width="700" height="500"> The acceleration in producer prices has already started to slow – with the producer price index increasing by 5.5% yoy in May (down from 6.4% previously). Commodity prices flowing through the industrial sector has a major influence – with growth in the RBA Index of Commodity Prices slowing to 29% yoy in May (compared with 36% in April). The overall index is below late 2016 peaks and has trended lower, meaning that producer price growth is likely to be less significant in coming months.
Credit issuance data was not available at the time of writing. Chinese monetary policy remained comparatively stable in across May and early June – with the 7 day Shibor trading in a narrow range of just under 9 basis points around the 2.9% mark. This represents around 40 basis points of tightening since the start of the year.
<a href="https://www.propertyobserver.com.au/images/2017/06/19/8.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/06/19/8.png" width="700" height="519"> The People’s Bank of China (PBoC) kept the rates for the Standing Lending Facility, Medium Term Lending Facility and 7 day reverse repos on hold during the past month, while it marginally increased liquidity in May (via open market operations) – by around RMB 20 billion (compared with RMB 210 billion in April). Our monetary policy views are unchanged – we believe that the PBoC has a tightening bias, but will be cautious in doing so, in an attempt to manage the risks associated with the country’s high corporate debt levels.
<a href="https://business.nab.com.au/author/gerard-burg/" target="_blank">Gerard Burg</a> is a Senior Economist - Asia at NAB Group Economics
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China residential construction starts slower: Gerard Burg

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<img src="https://counter.theconversation.edu.au/content/79172/count.gif?distributor=republish-lightbox-advanced" alt="The Conversation" width="1" height="1">GUEST OBSERVER
While there are now more solar panels in Australia than people, the many Australians who live in apartments have largely been locked out of this solar revolution by a minefield of red tape and potentially uninformed strata committees.
In the face of these challenges, Stucco, a small co-operative housing block in Sydney, embarked on a mission to take back the power. Hopefully their experiences can serve as a guide to how other apartment-dwellers can more readily go solar.
From an energy perspective, Stucco was a typical apartment block: each of its eight units had its own connection to the grid and was free to choose its own retailer, but was severely impeded from choosing to supply itself with on-site renewable energy.
Things changed in late 2015 when the co-op was awarded an Innovation Grant from the City of Sydney with a view to becoming the first apartment block in Australia to be equipped with solar and batteries.
A central part of Stucco’s plan was to share the locally produced renewable energy by converting the building into an “embedded network”, whereby the building has a single grid connection and manages the metering and billing of units internally.
Such a conversion seemed like an ideal solution for solar on apartments, but turned into an ideological battle with the electricity regulator that took months and hundreds of hours of pro bono legal support to resolve.
In this way the Stucco project grew to embody the struggle at the heart of the Australian electricity market: a battle between choice and control, between current regulations that mandate consumers to choose between incumbent retailers, and the public’s aspirations for green self-sufficiency.
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A chicken and egg problem
Embedded networks have been around for decades. Yet if the Australian Energy Regulator had its way, they would be banned as soon as possible.
The reason for this is that they inhibit consumers’ choice of retailer: consumers are forced to buy their electricity from the building’s embedded network management company, which may exploit its monopoly power.
Yet it doesn’t have to be this way. At least one company in Germany allows apartment residents to buy power either from their preferred grid retailer or from the building’s solar-powered embedded network. This business model relies on Germany’s smart meter standards that ensure all market participants can access the data they require.
We currently find ourselves in a standoff. The regulator is waiting on companies to offer solar powered embedded networks that include retail competition, while companies are waiting on the regulator to create an accessible playing field that would make such services viable.
The recently released Finkel Report touches on this by recommending a “review of the regulation of individual power systems and microgrids”.
Stucco’s bespoke solution
In the absence of such a solution, Stucco made a unique agreement with the regulator: the co-op committed to cover fully the costs of installing a grid meter for any unit whose occupant wishes to exit the embedded network in the future.
Such a commitment was feasible because Stucco’s residents, as co-op members, have direct input into the management of the network including controlling prices (that are mandated to be cheaper than any grid offer). But it is difficult to image regular strata committees accepting such liabilities.
Embedded networks are therefore not the best general solution for retrofitting solar on apartments, at least not under current regulations. This is unfortunate because they represent the best utilisation of an apartment block’s solar resource (Stucco’s system provides more than 75% of the building’s electricity) and are therefore increasingly being adopted by developers.
Advice for apartments
<a href="https://www.propertyobserver.com.au/images/2017/06/22/Screen%20Shot%202017-06-22%20at%2012.46.14%20PM.png" target="_blank">Click to enlarge</a>
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The good news for residents of existing apartments is that there are easier routes to installing solar. The even better news is that the cost of solar systems has plummeted (and continues to do so), while retail rates continue to skyrocket, so much so that body corporates are reporting rates of return of 15-20% on their solar investments.
The recommended options for apartments are epitomised by the old adage “keep it simple”. They fall into two categories: a single solar system to power the common area, or multiple smaller systems powering individual units. Which of these is best suited to a particular apartment depends primarily on the building’s size (as a proxy for its energy demand).
For buildings with 1 square metre of sunny roof space per 2m² of floor space (typically blocks up three stories high), it is worth installing a solar system for each unit, as these will typically be well matched to unit’s consumption.
Taller buildings (with less sunshine per apartment) are better off installing a single system for the common area, particularly if this contains power-hungry elements such as elevators or heating and cooling systems.
<a href="https://www.propertyobserver.com.au/images/2017/06/22/Screen%20Shot%202017-06-22%20at%2012.44.55%20PM.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/06/22/Screen%20Shot%202017-06-22%20at%2012.44.55%20PM.png" alt="">
But here’s the crux: no apartment can install solar without the political support of its strata committee. While this hurdle has historically tripped up many initiatives, increased public awareness has created a groundswell of support. Plus you may need fewer votes than you think.
While this article focuses on solar, it is important to remember that the first priority for any building should be to improve energy efficiency, by installing items such as LED lights, modern appliances, and insulation and draft proofing. For advice on these opportunities see the City of Sydney’s Smart Green Apartments website and the Smart Blocks website.
Lastly, adding batteries to an apartment solar system creates extra challenges, for instance fire-prevention planning. But it allows for far greater energy independence and resilience, and a chance to join the future of distributed energy currently being enjoyed by so many of Australia’s non-strata householders.
Bjorn Sturmberg is Associate Lecturer in Physics, Macquarie University and author for The Conversation. He can be contacted <a href="https://theconversation.com/profiles/bjorn-sturmberg-377650" target="_blank">here</a>.
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Get in on the ground floor: how apartments can join the solar boom

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GUEST OBSERVER
The Victorian government’s 2017 housing policy contains a bulk transfer of public housing to housing associations. Housing Minister Martin Foley’s explanation is that “the state is a terrible housing manager”. 
A similar rationale underlies the handing of public housing estates to private developers to build private housing, the sales of which fund some new public dwellings with the added justification of increasing social mix.
Our soon-to-be-published research examines the rollout of this program. In inner Melbourne, following redevelopment of the Kensington, Carlton and Prahran estates, nine more estates have been targeted. The tenants of buildings to be demolished will be relocated from mid-2018, according to a government briefing paper.
The federal Greens MP for Melbourne, Adam Bandt, has criticised the program as selling public land to private developers “for a bagful of cash and a smattering of new social housing”. He adds that Melbourne needs “a large-scale build of new public housing on a 1960s scale”. 
Foley’s defence of the rollout, in an odd non sequitur, is that Labor:
… can’t condemn another generation of Victorians to live in housing poverty.
A flawed idea that began with Thatcher
Public housing stock transfer and estate redevelopments in public-private mix are part of a trend that began in Thatcher’s Britain. The Blair government continued the approach, which has become neoliberal policy orthodoxy in the UK and Australia. 
This allows governments to wriggle out of providing housing for people on low incomes by transferring responsibility to non-government and private sectors. 
The thing is, housing associations are not necessarily secure or better managers, especially as they become institutions in their own right. Furthermore, privatisation of public land to fund upgrades to public housing not only fails to deliver good value for taxpayers, but is unsustainable. At some point there will be further upgrades needed and no land left to sell.
The argument that the state should not be in the business of managing or building housing is one we’re hearing more often. It’s connected to the small-government case more broadly: should the state be involved in health care, education, the media?
As the ABC and BBC demonstrate, however, state-owned enterprises can operate perfectly efficiently. And, ironically, they provide a rare source of ideological independence from both government and big business.
Why shouldn’t the state fund an ongoing program of upgrading, replacing and building public housing? Why shouldn’t it establish a regional organisational structure which is locally responsive? There is no case for assuming that, simply because the state is involved, construction and management must be inferior and people will be consigned to “housing poverty”. 
The major determinant is a matter of finance. And the state will always have better and cheaper access to finance than the non-government and private sectors. 
If finance were really as impossible a problem as governments like to make out, and if it were deemed reasonable that privatisating public land could help fund this process – and these are big ifs, which should be publicly debated – then the government should be the developer, to retain control of the profits. These should go back into public housing instead of disappearing with a private developer. 
Lessons from Carlton and Kensington
The Victorian government’s call for tenders for its Public Housing Renewal Program does indicate some learning from the experiences at Kensington and Carlton.
The sale price for the public land “will reflect the land value and must meet a minimum threshold based on a market value mechanism agreed by the Valuer General Victoria [VGV]”. This is an important concession, though VGV valuation is no guarantee of market price. 
The tender document notes that “where the return achieved by the development proceeds exceeds a benchmark, it is anticipated that there will be an agreed sharing of the excess”. The government will need to keep a close eye, though, on the costs and profits declared by the developer. 
The specification for the number of social housing dwellings on the redeveloped estates to “exceed the current number of public housing dwellings by 10%” is a definite improvement on the Kensington project. But replacing three-bedroom family dwellings with studio apartments, as is the case at Carlton, doesn’t constitute an increase in tenants. 
Even if tenant numbers do increase, 10% seems a disappointingly modest aim.
It is the social mix objective that really brings this approach unstuck, however, especially when the favoured model of private developers is to separate public and private residents by buildings, if not entire precincts. 
The minister reacts with horror to the suggestion that inner-city public land should start from the presumption of 100 percent public housing and work back from there according to the development economics. It seems a manufactured horror. Gentrified inner Melbourne is not Brixton or Baltimore – these estates are surrounded by private housing and excellent public services and community facilities where opportunities for interaction are plentiful.
Let’s dismiss the fig leaf of increasing social mix on estates in privileged inner cities. We should concentrate instead on providing as much low-income housing as we possibly can for people who desperately need somewhere decent to live.
<a href="https://theconversation.com/profiles/kate-shaw-39629" target="_blank">Kate Shaw</a> is Future Fellow, University of Melbourne and author for The Conversation.
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Why should the state wriggle out of providing public housing? Kate Shaw

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GUEST OBSERVER
Drones are quickly becoming the new buzz in the business world.
These remotely piloted aircraft have grown in popularity in recent years not only for recreational use, but also in commercial applications. This includes industries like real estate, tourism, insurance, mining, engineering, marketing, entertainment and sports.
The possibilities are endless for all sectors of business to encompass this new technology and with the new relaxed regulations, implementing the use of drones is now an affordable and efficient option.
As demand grows these virtual-eyes are proving their worth in many Australian businesses. But is this new and fascinating technology exposing these industry leading businesses to serious liability? 
For any business utilising this ground-breaking technology, it is important to have adequate and specialised cover.
Not only is it important to protect your investment, but also in consideration to possible liability cases.
A remotely piloted aircraft or drone is defined as an Aircraft1. Under the Damage by Aircraft Act2; owners and operators have strict liability both jointly and individually.
It is imperative that your business understands the implication of strict liability before operating the Drone commercially.
Businesses also need to understand that choosing to operate without adequate insurance could lead to serious liability under the Damage by Aircraft Act3.
It is important to all businesses who operate drones to fully understand the operational limitations imposed by the Civil Aviation Safety Authority.
What is a commercial operation?
<ul>
<li>Any operation which is not conducted for sport or recreation is considered commercial.</li>
<li>Even if the use of the drone was not used specifically for selling that businesses services, the use can still be deemed commercial. </li>
</ul>
Analysis conducted at QBE Aviation in conjunction with external data input indicates common cause of loss when it comes to utilising drone technology.
This includes pilot error during pre-flight and flight, wildlife and battery degradation due to excessive use.
To completely understand the legal operational limitations, O’Brien also suggests all business owners who utilise drones to become members of the Australian Association for Unmanned Systems (AAUS) and also obtain a Remote Operators Certificate (ReOC).
It’s also good professional practise to ensure the owners and controllers of the Drone are correctly trained.
This should be done by a registered training organisation.
John O’Brien is the Director of Kobe Insurance. He can be contacted <a href="https://kobeinsurance.com.au/about-us/" target="_blank">here</a>.
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Rise in drones a liability nightmare: John O’Brien

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<img src="https://counter.theconversation.edu.au/content/78911/count.gif?distributor=republish-lightbox-advanced" alt="The Conversation" width="1" height="1">
GUEST OBSERVER
The National Broadband Network (NBN) is widely considered to be failing Australians, but it isn’t failing them equally.
Our research, undertaken at the Centre for Research Excellence in the Social Determinants of Health Equity, seeks to address health inequities by looking at the geographical distribution of infrastructure, including digital technology. 
Examining the rollout of NBN technologies as of December 2016, our preliminary analyses suggest areas of greatest socio-economic disadvantage overlap with regions typically receiving NBN infrastructure of poorer quality. 
<h2>Comparing NBN technology with inequality</h2>
To determine socio-economic disadvantage, we used the Australian Bureau of Statistics’s (ABS) socio-economic indexes for area (SEIFA) and its index of relative socio-economic advantage and disadvantage (IRSD)from 2011.
Across Australia, we found only 29% of areas with a SEIFA decile of one (the lowest-scoring 10% of areas) had fibre-to-the-premise (FTTP) – considered the best broadband technology solution available – or fibre-to-the-node (FTTN) connections. So far, around 71% of the NBN technology available in these areas involves inferior options, including hybrid fibre-coaxial (HFC), fixed wireless or satellite technologies.
On the other hand, 93% of areas with a SEIFA decile of 10 (the highest-scoring 10% of areas) had FTTP or FTTN.
<a href="https://www.propertyobserver.com.au/images/2017/06/21/Screen%20Shot%202017-06-22%20at%209.32.21%20AM.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/06/21/Screen%20Shot%202017-06-22%20at%209.32.21%20AM.png" alt="">
This result tells a similar story to an early analysis by Sydney University’s Tooran Alizadeh of 60 NBN release sites that were announced in 2011. She found some of the most disadvantaged areas of Australia were not gaining equal access to the new infrastructure. 
If we look only at major cities in Australia – where the level of fibre technology is higher overall – areas with the greatest disadvantage, while exceeding similarly disadvantaged areas nationally, still received significantly less FTTP and FTTN: 65% of areas with a SEIFA decile of one had FTTP and FTTN, compared with 94% of areas with a SEIFA decile of 10. 
<a href="https://www.propertyobserver.com.au/images/2017/06/21/Screen%20Shot%202017-06-22%20at%209.33.26%20AM.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/06/21/Screen%20Shot%202017-06-22%20at%209.33.26%20AM.png" alt="">
Of course Australia is a large, sparsely populated country, which makes the business case for rolling out fibre difficult in some regions. Nevertheless, inequitable access to NBN technology appears even when controlling for the remoteness of the location. 
If we look at outer regional Australia where fibre is less prevalent, the pattern looks worse. Only 12% of the most disadvantaged areas with a SEIFA decile of one received FTTP and FTTN, compared with 88% of the most advantaged outer regional areas with a SEIFA decile of nine.
<a href="https://www.propertyobserver.com.au/images/2017/06/21/Screen%20Shot%202017-06-22%20at%209.34.32%20AM.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/06/21/Screen%20Shot%202017-06-22%20at%209.34.32%20AM.png" alt="">
Receiving FTTP or even FTTN may still be better than receiving HFC, fixed wireless or satellite technologies. While HFC may be able to match maximum speeds of FTTN, this is unlikely to happen during peak times when the increased number of users sharing the same data capacity will slow service considerably. And, similar to FTTN, these technologies provide fewer opportunities to upgrade capacity to meet future demand.
However, given only a limited data set was made publicly available in December 2016 by the NBN company, it is difficult to determine exactly which services are currently installed where. For example, the data set we used does not differentiate between FTTP and the lesser FTTN connection.
It also aggregates some NBN technology into an “other” category, making it impossible to distinguish between HFC and satellite service.
<a href="https://www.propertyobserver.com.au/images/2017/06/21/file-20170619-22129-15bjd9a.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/06/21/file-20170619-22129-15bjd9a.png" alt="">
The NBN company offers a “check your address” search for its most up-to-date rollout information including technology type, but was unable to share this information with us in a single, usable data set.
A NBN spokesperson said the network was being rolled out across Australia regardless of any socio-economic mapping. 
“Determining the sequence is a complex process of weighing up factors including the location of construction resources, current service levels, existing broadband infrastructure, growth forecasts and proximity to nbn infrastructure such as the transit network,” she said in an email. “Only 8 per cent of premises in Australia are not in the fixed-line footprint.”
<h2>Internet access and social inequity</h2>
A faster internet connection is increasingly central to people’s social connections, education opportunities, employment prospects and ability to access services.
This was raised in a 2011 report by the parliamentary Standing Committee on Infrastructure and Communications. It emphasised the potential role of the NBN in enhancing greater equity in digital access to services in regional and rural areas. 
"The Committee heard that, due to the ‘digital divide’, many of the Australians who could benefit the most from broadband currently have the lowest levels of online participation … The extent of accompanying measures implemented by governments will determine whether the NBN narrows or widens this digital divide."
Previous research has also found that people from lower socioeconomic groups are already restricted in their use of digital information and communication technologies. This can limit their access to a range of social determinants of health. 
When populations already facing disadvantage receive poorer quality digital infrastructure, those with the greatest need will continue to slip farther behind. 
Equity must be at the forefront of the NBN company’s considerations as it continues to roll out across Australia. Further entrenching social inequities through digital infrastructure is not the NBN anyone dreamed of.
<a href="https://theconversation.com/profiles/ashley-schram-376758" target="_blank">Ashley Schram</a> is Research Fellow, School of Regulation and Global Governance, Australian National University
<a href="https://theconversation.com/profiles/fran-baum-105532" target="_blank">Fran Baum</a> is Distinguished Professor, Foundation Director, Southgate Institute for Health, Society &amp; Equity, Flinders University
<a href="https://theconversation.com/profiles/matt-fisher-115741" target="_blank">Matt Fisher</a> is Research Fellow in social determinants of health, Flinders University
<a href="https://theconversation.com/profiles/patrick-harris-102775" target="_blank">Patrick Harris</a> is Senior Research Fellow, University of Sydney
<a href="https://theconversation.com/profiles/sharon-friel-91509" target="_blank">Sharon Friel</a> is Director, School of Regulation and Global Governance (RegNet) and Professor of Health Equity, ANU, Australian National University
<a href="https://theconversation.com/profiles/toby-freeman-111682" target="_blank">Toby Freeman</a> is Senior Research Fellow in Health Equity, Flinders University.
All are authors for The Conversation.
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The NBN and Australia’s digital divide

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GUEST OBSERVER 
The Premier and Treasurer should be applauded for the record infrastructure spend and strong fiscal outcome in the NSW State budget, but needed to do more to ensure the dollars matched the rhetoric on the Government’s housing affordability plan.
The NSW built environment is being transformed by the Berejiklian Government’s $73 billion infrastructure spend and future generations will benefit enormously from this investment.
But, in a budget that trumpets an upgraded surplus of $4.5 billion this year, $2.7 billion next – and solid surpluses in the out years – it is disappointing to find that half a billion dollars of new taxes could be imposed on the property industry to fund the extra infrastructure investment foreseen in the government’s housing affordability plan.
For the first time, today’s budget papers revealed the Government expects to collect more than half a billion dollars from the property industry over the next four years to fund state infrastructure needed to support increasing housing supply. 
At the end of the day extra taxes on housing supply means extra cost for buyers and more expensive home.
Surely with the state budget so far in the black this impost could be avoided.
Budget papers stated that the expansion of State Infrastructure Contribution Scheme (SICs) to 10 new areas announced in the recently released NSW Government housing affordability plan would raise an additional $545 million in revenue.  
These additional costs were on top of the announcement as part of the Government’s housing affordability plan that the Local Infrastructure Growth Scheme would be closed in 2020 with a potentially significant cost shift to the property industry of almost $400 million.
The budget confirms that with an increase of 9.6 per cent in residential property stamp duty revenue in 2016/17, the rivers of gold flowing from property taxes will fund essential services and programs next year and beyond.  It also now suggests that significant additional costs could be imposed on the supply of the average home. 
By 2020 that could add a billion dollars to the cost of delivering new homes in NSW. 
Sydney’s housing supply pipeline ground to a halt less than a decade ago under the burden of excessive infrastructure taxes, so widening the net risks a repeat of recent history. 
The Property Council is very keen to work with the NSW Government to ensure this scenario does not play out. 
The strong surplus delivered in Treasurer Perrottet’s first budget was a terrific result that should be applauded along with the $72.7 billion infrastructure spend.
On infrastructure investment, overall economic management and managing the bottom-line the Premier and the Treasurer score 10 out of 10 but on improving housing affordability there are still questions to be answered. 
The Government needs to take serious care to ensure that secondary policy decisions, such as the cost shifting the new SICs envisage, do not torpedo the primary policy objective of improving housing affordability in this state. 
It was pleasing to see that the budget papers confirm that wholly or majority owned companies who were positively contributing to housing supply in NSW would be exempt from the foreign investment taxes imposed in last year’s budget and that the exemption would be backdated to June last year.
These were a direct tax on housing supply and the Premier and the Treasurer are to be congratulated for acknowledging and fixing this so quickly.
Jane Fitzgerald is NSW Executive Director of the Property Council,and can be <a href="https://www.propertycouncil.com.au/" target="_blank">contacted here</a>.
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Strong NSW Budget should go further to tackle housing affordability crisis

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The abolition of the off-the-plan transfer duty concession deferral scheme for residential investors in the NSW State Budget will recoup $380 million in a one off annual fillip next financial year.
Investors will then pay another $110 million in 2018-19 ahead of schedule, the NSW treasury papers indicate.
The OTP stamp duty was always going to be paid by investors, but the decision brings forward its payment.
The concession for residential off-the-plan purchases, which allowed for a delay of up to 12 months in the payment of duty, has been amended to allow the government's focus on first home buyers.
The state's finances continue to benefit from Sydney's property boom.
The Government will reap $6.8 billion in residential stamp duty revenue in 2016–17, an increase of almost 10 per cent on the previous year, thanks in part to the strong performance of Sydney's property market.
All the big property decisions were actually announced before today's budget.
The doubling of the foreign investor from four per cent to eight per cent on stamp duty and a rise from 0.75 per cent to 2 per cent on foreigner land tax is forecast to secure $180 million in its first year.
Privatisations have turbocharged NSW finances, with Treasurer Dominic Perrottet announcing a surplus when he delivered his first budget today.
He describing his first state budget as "the envy of the western world."
"Surpluses shield us from difficulties and challenges that may lie ahead. We're [forecasting] 75,000 new homes in the next 12 months; we are about to embark on a housing construction boom," said Mr Perrottet when asked about his level of confidence against the backdrop of a housing crash speculation.
With much foreshadowed, the biggest new announcement on Tuesday was spending on hospitals, with $720 million to upgrade the Prince of Wales Hospital at Randwick.
It added to $632 million for the Campbelltown Hospital, $534 million for Tweed Hospital; $576 million for Nepean Hospital; and $341 million for Concord Hospital that had all been previously announced.
Stamp duty revenues are still edging towards $10 billion annually for the ever increasing property tax-dependent NSW State Government coffers.
Residential stamp duty was up 9.6 percent in the current financial year to $6.8 billion, and will ease to 5.9 percent growth next financial year. Treasurer Perrottet expects transfer duty revenue to continue increasing but at a slower growth rate - down to 4.2 per cent by the 2020-21 financial year. Total transfer duties sit at $9.6 billion.
The budget confirmed first home buyers in New South Wales will be able to buy property up to $650,000 without having to pay stamp duty. 
The policy, which will apply to new and existing homes, will start from July 1 in an attempt to combat the housing affordability issue by the NSW State Government. It will cost $187 million next financial year rising to $310 million in 2019.
The cap had previously been set at $550,000 for first home buyers on  new homes.
Homes up to $800,000 will also see a discounted stamp duty.
Up to $34,360 will be saved under the package, according to the government.
The budget papers reveal that property development companies that are foreign-owned but based in Australia will not be taxed as foreigners  and will be eligible for a refund if they sell their developed properties within five years.
The budget papers confirm the 2016-17 surplus is $856.9 million higher than forecast in last year's budget, largely to stamp duty revenues from the part-privatisation of electricity companies Ausgrid and Endeavour Energy.
The NSW Government will spend more than $720 million over the next four years to address the key issue of housing affordability.
“Our number one priority as a government is to get more houses built and to market to help make new homes more affordable,” Minister for Planning and Housing, Anthony Roberts said.
“We are working on many fronts to make owning a home a reality for more people, by streamlining and simplifying the planning system so housing approvals can be fast-tracked and are continuing to release and rezone more land.
The 2017-18 NSW Budget includes $117.8 million over four years of new investment to deliver infrastructure, housing and employment initiatives, review land use and infrastructure strategies for priority growth areas and implement regional plans.
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Property investors lose out in NSW State Budget

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GUEST OBSERVER
The potential for the city of Parramatta to become an equal city centre with the Sydney CBD could be under threat from significant taxes proposed on development. 
Many developers keen to build in Parramatta are now reconsidering their projects as the City of Parramatta adds excessive taxes on developments.
I have been amazed at the number of developers who have contacted me about the latest proposal to require developers to give 10 percent of their apartments to the council. 
When this tax is added to the value capture proposals of the council that require half the land value of uplift along with the State Government's levy of $20,000 per apartment the viability of development in Parramatta is under threat.
There seems to be an unrealistic ‘Magic Pudding’ attitude that the staff of the City of Parramatta Council have that developers will fund all of their desires and needs. 
If the same logic was applied to the council they should ask their own rate payers to cover the rates of the 10 percent of the residents most in need or for the council to require the Parramatta supermarkets to give away food to 10 percent of shoppers.
Some Urban Taskforce members have estimated that the combination of levies and taxes proposed in Parramatta will add $100,000 to the cost of an average two bedroom apartment. 
While council may be hoping to help those who are struggling to get into the Sydney market the end result of the levies will be to make most dwellings far less affordable and this price hike will pull even the affordable homes up in price.
We are concerned that the Greater Sydney Commission (GSC) has asked each council to develop their own affordable housing policy rather than give leadership to ensure a long term sustainable approach occurs across Sydney. 
The Greater Sydney Commission in their draft District Plans did propose an approach that was based on floor space uplift from rezoning and that this would only be where it was economically sustainable. It now seems that councils across Sydney are ignoring the GSC approach and only responding to the requirement to develop their own approach. Many councils are under administration and administrators seem to be taking a popularist approach that simply forces developers to pay for affordable housing.
The Urban Taskforce has proposed an approach to affordable housing for Sydney that could yield 40,000 affordable homes over 10 years. This would modify the government’s Affordable Rental Housing SEPP of 2009 to ensure that if 20 percent of a project was affordable apartments then a 20 percent floor space and height uplift would be given.
The SEPP provides for the affordable units to be available for 10 years and then returned to the developer. This approach would provide a continual supply of affordable rental homes across Sydney.
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We are concerned that, if implemented, the Parramatta approach could spread to most councils across metropolitan Sydney and the end result would be a dramatic slowdown in housing supply. 
The Urban Taskforce calls on the NSW Government to step in to the out of control free-for-all that is happening with councils that are adding a variety of taxes for affordable housing so that a consistent approach can be developed.
Chris Johnson is chief executive officer of property development industry group Urban Taskforce and can be contacted <a href="https://www.urbantaskforce.com.au/index.php?option=com_content&amp;view=article&amp;id=97&amp;Itemid=126#.Vdaart55dFI" target="_blank">here</a>.
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Parramatta Council affordable housing tax will slow down housing supply

South East Queensland’s apartment market is entering a new phase defined by rising prices, constrained affordability, and mounting pressure on the construction pipeline, according to RPM Group’s latest SEQ Apartments &amp; Townhomes Market Report.

The May 2026 report highlights a widening divide between what buyers can afford and what developers can viably deliver, with detached house prices continuing to push more buyers toward apartments across Brisbane, the Gold Coast, and the Sunshine Coast.

RPM says Brisbane’s median house price has reached around $1.5 million, accelerating the shift toward higher-density housing as buyers are increasingly priced out of the detached market.

[smartcode_project:default project_id=135094 project_image_fid=356540]

Median unit prices rose across all three major SEQ markets in the March quarter. Brisbane City recorded the strongest annual growth, with median unit prices climbing 21 per cent to $862,000, while the Gold Coast reached the highest overall median at $950,000, up 17 per cent year-on-year. The Sunshine Coast followed at $870,000, representing annual growth of nine per cent.

RPM noted the affordability gap between houses and units remains significant, with detached homes commanding premiums of 67 per cent in Brisbane and 68 per cent on the Gold Coast relative to apartments.

The report suggests this price disparity is increasingly consolidating buyer demand within the apartment market, particularly among downsizers and owner-occupiers.

“Demand is real. Supply is moving. But they’re operating on different timelines and the gap between what’s being built and what buyers can afford is the defining tension in this market right now,” RPM Queensland and NSW Managing Directors Peter Neale and Clinton Trezise said in the report.

[smartcode_project:default project_id=150787 project_image_fid=366230]

While approvals and commencements are strengthening, RPM argues the delivery pipeline remains constrained by construction costs, labour shortages, and extended build timelines.

Apartment approvals across Queensland increased 86 per cent over the year to February 2026, reaching 12,682 approvals, the highest level recorded since 2016. Brisbane overtook the Gold Coast as the state’s most active apartment approval market, with nearly 5,000 apartments approved over the past 12 months.

Unit commencements also strengthened considerably, rising 48 per cent year-on-year to 5,453 commencements in the December 2025 quarter, the highest level since 2018.

However, RPM’s research found apartment delivery timeframes have expanded sharply compared to the previous cycle. Projects are now averaging around 30 months from approval to completion, compared to roughly 20 months a decade ago.

[smartcode_project:default project_id=143932 project_image_fid=367515]

The number of units under construction has climbed to approximately 31,530 dwellings, nearing the previous 2016 peak, though projects are remaining in the pipeline for considerably longer.

Construction costs continue to weigh heavily on feasibility. RPM found the average apartment construction cost in Greater Brisbane reached $630,000 per dwelling in 2025, exceeding both Sydney and Melbourne. Coastal Queensland markets, including the Gold Coast and Sunshine Coast, were even higher at an average of $817,418 per apartment due to the prevalence of larger premium product.

The report also points to increasing pressure from Olympic-related infrastructure spending ahead of Brisbane 2032, with labour competition expected to intensify over the next several years.

[smartcode_project:default project_id=150017 project_image_fid=370960]

ANZ Associate Director of Property Daniel Gradwell said the underlying demand drivers across South East Queensland remain strong, supported by interstate migration, downsizers, and population growth.

“The challenge is bringing enough supply to market to meet that demand, and nothing on the horizon makes that straightforward,” Gradwell said.

RPM’s analysis found the affordability challenge is becoming more pronounced in the new apartment market itself, with only three per cent of surveyed new apartments priced below $1 million.

Instead, the market is increasingly concentrated in higher price brackets, with the most common new apartment price band across SEQ sitting between $1.5 million and $1.75 million. Around half of all new apartment stock surveyed is priced below $2 million.

The report suggests developers are not necessarily avoiding lower price points by choice, but because current construction economics make delivering affordable apartments increasingly difficult at scale.

Rental conditions also remain tight across the region. Median rents for one-bedroom apartments rose 12 per cent in Brisbane over the past year to $580 per week, while Gold Coast one-bedroom rents increased nine per cent to $630.

Despite rising rents, RPM noted bond lodgements have generally trended downward over the past five years, indicating more apartments are being absorbed by owner-occupiers rather than retained as investor-held rental stock.

Looking ahead, RPM expects projects targeting the mid-market owner-occupier segment between $1.25 million and $2 million to remain the most viable part of the market, while premium projects in highly constrained coastal or riverfront locations continue to attract demand.

“Construction costs are rewriting the feasibility rulebook across Greater Brisbane, and with little relief in sight, only projects in the right price band, right location, and with presales secured early will make it through,” the report concludes.

Joel Robinson

SEQ apartment demand outpacing affordable supply as construction timelines stretch: RPM

Camberwell Junction has long been the epicentre of amenity in Melbourne’s Boroondara region.

For nearly a century, it has drawn both locals and visitors, anchored by the Camberwell Sunday Market, which first operated in 1929 and quickly became a fixture of the suburb’s identity. Over time, the Junction evolved into one of Melbourne’s most established retail and lifestyle precincts, now comprising more than 400 stores and over 300 commercial businesses.

Despite that depth of amenity, one thing has remained notably limited: the supply of new apartments.

In a suburb defined by its heritage streetscapes and tightly held residential stock, new development opportunities have been scarce, particularly within the core of the Junction itself. That lack of supply has left a gap in the market for larger, design-led apartments suited to downsizers and owner-occupiers wanting to remain in the area.

Boutique developer Above Zero identified that gap when it secured a prime site on Burke Road, in the heart of Camberwell Junction.

[smartcode_project:default project_id=4896 project_image_fid=368543]

The site has a long planning history. Various proposals have been put forward over more than a decade, many of which were knocked back by the City of Boroondara, with initial applications dating back to 2015. Above Zero acquired the site in 2022 and returned with a revised scheme, refining both the building’s height and its ground-level interface to better align with Council expectations.

That process has culminated in approval for Camberwell House.

The Cera Stribley-designed development will deliver 57 residences on a 1,950 sqm site within the Camberwell Activity Centre, placing it directly within one of Melbourne’s most established retail and transport hubs.

It is expected to be one of the only new apartment developments to launch in the Junction in recent years, reinforcing the rarity of new supply in the precinct. Currently, there are just a handful of projects on the market in Camberwell, underscoring the significance of a development of this scale and positioning.

[smartcode_project:default project_id=4896 project_image_fid=368544]

Camberwell House has been conceived with a clear focus on larger-format apartments. The project will offer a mix of two-, three- and four-bedroom residences, alongside a limited number of penthouses, targeting owner-occupiers seeking scale rather than volume-driven product.

The building’s vertical presence will also set it apart.

Positioned on Burke Road, the development is set to become one of the taller buildings in its immediate context, allowing for elevated outlooks across Melbourne’s CBD skyline and toward the Dandenong Ranges. In a precinct characterised by lower-scale built form, that height provides a point of differentiation, particularly for buyers seeking outlook and natural light.

[smartcode_project:default project_id=4896 project_image_fid=368568]

Architecture has been led by Cera Stribley, with interiors by GOLDEN and landscape design by Florian Wild. The design approach centres on material consistency and restraint, with residences oriented to maximise light, ventilation and connection to outdoor spaces.

Full-height glazing and generous terraces form a key part of that strategy, allowing apartments to extend beyond their internal footprint and engage with the surrounding environment.

Beyond the private residences, a significant component of the project is its amenity offering.

Above Zero has positioned Camberwell House as a “complete living environment”, incorporating a full floor dedicated to resident facilities. At the centre of that is a wellness zone, including a 12.5-metre lap pool, spa, sauna and treatment spaces, alongside a gym and recovery-focused amenities.

This level of amenity is more commonly associated with inner-city developments, rather than established middle-ring suburbs like Camberwell.

[smartcode_project:default project_id=4896 project_image_fid=368588]

Additional shared spaces include a private library lounge, dining and entertaining areas, and an indoor golf simulator. A self-contained guest suite has also been incorporated, allowing residents to accommodate visiting family or friends without impacting their primary living space.

The inclusion of these facilities reflects a broader shift in buyer expectations.

As more downsizers look to transition from larger family homes into apartments, there is increasing demand for developments that offer not just a residence, but a lifestyle. That includes access to wellness, social and entertaining spaces within the building itself, reducing the reliance on external amenity while still maintaining proximity to established precincts.

Camberwell House is positioned to benefit from both.

Its location places it within immediate walking distance of Camberwell Junction’s retail and dining offering, as well as public transport connections, including tram and train services. That combination of internal amenity and external convenience is central to its appeal.

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Jellis Craig Projects Director Stephen Bowtell is handling sales for the project and says Camberwell House offers a rare entry point into one of Melbourne’s most tightly held markets.

“Buyers are recognising that Camberwell House offers something they simply haven’t seen before in Boroondara,”&nbsp;Bowtell&nbsp;says.

“It combines a level of resident amenity and service typically associated with Melbourne’s premium inner-city developments, while being positioned right in the heart of Camberwell Junction.

“The response to the concierge offering has been particularly strong. Buyers appreciate not only the convenience, but also the sense of security and peace of mind that comes from having a dedicated presence in the building every day.

“When you combine that with the wellness facilities, the exceptional arrival experience, and panoramic views across both the CBD skyline and the Dandenong Ranges, it creates a lifestyle proposition that is genuinely unique within the local market.”
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[smartcode_project_cta:default project_id=4896]

Above Zero launches Camberwell House in undersupplied Camberwell Junction precinct

<a href="https://www.apartments.com.au/developers/consolidated-properties">Consolidated Properties Group</a> (CPG) is approaching the launch of its latest Brisbane riverfront development, <a href="https://www.apartments.com.au/new-apartments/castile-47-skyring-terrace-newstead-qld-4006">Castile</a>, on the dress circle Skyring Terrace in Newstead.

VIP buyers are now being engaged, with a full public sales launch coming later this year.

Positioned as the final opportunity to secure a new absolute riverfront residence on the East bank of Newstead, Teneriffe or New Farm, Castile at 47 Skyring Terrace has been designed by <a href="https://www.apartments.com.au/architects/woods-bagot">Woods Bagot</a> as a timeless addition to the Brisbane skyline.&nbsp;

[smartcode_project:default project_id=150489 project_image_fid=371113]

The name Castile draws on themes of permanence, sophistication and legacy, reflecting a broader vision centred on enduring architecture and timelessness in the rarest of riverfront positions.&nbsp;

CPG Chairman and CEO Don O’Rorke said the project had been envisioned as a future Brisbane icon.&nbsp;

“With 47 metres of direct river frontage and never to be built out views, 47 Skyring Terrace is the definitive address on the Brisbane River,” O’Rorke said.&nbsp;

[smartcode_project:default project_id=150489 project_image_fid=371114]

“Rather than following trend-based apartment design, Castile draws inspiration from Brisbane’s great heritage buildings, reinterpreting classical architecture into a contemporary riverfront landmark designed to stand proudly for the next 100 years,” he said.&nbsp;

The approved development will comprise 227 apartments across a 25-storey tower alongside a boutique six-storey riverfront building of just 12 residences.&nbsp;

Construction is scheduled to commence in September 2026.

[smartcode_project_cta:default project_id=150489]

CPG unveils Castile Newstead ahead of upcoming sales launch

Australia’s online shopping habits have shifted dramatically over the last decade. As eCommerce volumes surged, so too did the frustrations that came with traditional parcel delivery: missed deliveries, long Post Office queues, parcel theft and the challenge of being home during business hours.

Australia Post’s Parcel Lockers emerged as one of the more practical responses to that changing consumer behaviour.

What started as a relatively niche delivery option has evolved into a nationwide network of more than 1,400 self-service Parcel Lockers positioned at train stations, shopping centres, supermarkets and Post Offices across the country. The system allows Australians to send, collect and return parcels 24 hours a day, fundamentally changing how many people interact with deliveries.

The appeal is relatively straightforward: flexibility.

Instead of waiting at home for a delivery driver or rushing to a Post Office before closing time, users can direct eligible parcels to a Parcel Locker location of their choice. Once the parcel arrives, Australia Post sends a notification with a collection code or QR access through the AusPost app, allowing customers to retrieve their package at any time within the collection window.

For apartment residents in particular, the system has become increasingly valuable.

Higher-density living has created logistical challenges around deliveries, especially in buildings without concierge services or secure parcel rooms. Missed deliveries are common, while parcel theft has become an increasing concern as online shopping volumes continue to rise.

Australia Post itself has repeatedly highlighted the growing issue of “porch pirates” during peak shopping periods, encouraging customers to use Parcel Lockers as a safer alternative to unattended home deliveries.

That security aspect is one of the key reasons the Australia Post Parcel Locker network has grown so rapidly.

Parcel Lockers are positioned as secure, monitored collection points that reduce the risk of theft while also improving delivery efficiency for Australia Post. Instead of multiple redelivery attempts, parcels can be consolidated into a single secure destination.

The Parcel Lockers themselves are free to use through a MyPost account and support a range of parcel sizes up to 16 kilograms and dimensions of approximately 35 x 44 x 61 centimetres.

Beyond receiving parcels, the system has increasingly become integrated into the broader eCommerce ecosystem.

Customers can now use Parcel Lockers to return online purchases, while retailers have embraced the model as a way to improve delivery success rates and reduce friction in the shopping process. Australia Post has actively expanded partnerships with major retailers and promoted Parcel Lockers as part of a broader out-of-home strategy.

The timing of that expansion aligns with broader changes in Australian shopping behaviour.

The acceleration of online retail during and after the pandemic placed enormous pressure on delivery infrastructure. Parcel volumes reached record highs, particularly during Black Friday and Christmas periods, with Australia Post delivering more than 100 million parcels during peak festive seasons.

That growth forced logistics providers to rethink the “last mile” of delivery, widely regarded as the most expensive and operationally difficult stage of the process.

Parcel Locker systems have increasingly been viewed as part of the long-term solution.

The concept itself is not unique to Australia. Parcel Locker networks have become common globally, particularly across Europe and Asia, where dense urban environments and apartment living create similar logistical challenges. But Australia’s geography and suburban sprawl made adoption slower initially.

Now, however, the convenience factor is driving mainstream usage.

For commuters, Parcel Lockers near train stations allow parcels to be collected on the way home from work. For apartment dwellers, they remove the uncertainty around access and missed deliveries.

The rise of the AusPost app has also streamlined the experience, centralising notifications, tracking and Parcel Locker access into a single platform. Australia Post has increasingly pushed customers toward app-based delivery management, partly as a way to combat phishing scams and fake delivery notifications, which have become more sophisticated in recent years.

The Parcel Locker model is also beginning to influence property development itself.

Parcel management has become a growing consideration in apartment building design, particularly as online shopping becomes embedded in everyday life. Many new residential developments are now incorporating dedicated parcel rooms or Parcel Locker systems into foyers and communal spaces.

For developers, parcel management is increasingly viewed as part of the broader resident amenity offering, alongside gyms, wellness spaces and communal work areas.

That reflects a wider evolution in how residential buildings are designed.

Apartment buyers are placing greater emphasis on convenience, security and operational functionality, particularly in higher-density urban environments. Parcel delivery, once considered a minor operational detail, has become an increasingly important part of that equation.

Australia Post’s Parcel Locker network sits at the centre of that behavioural shift.

What began as a simple alternative delivery option has evolved into a key piece of infrastructure supporting Australia’s growing eCommerce economy and changing urban lifestyles.

And as online shopping continues to expand, the role of Parcel Lockers is likely to become even more embedded in how Australians live, shop and receive goods.

How Australia Post Parcel Lockers changed parcel delivery convenience in Australia

Perth’s new apartment market recorded its strongest quarter of sales since Q4 2021, with 412 apartments sold in Q1 2026 and a record quarterly sold value of $537 million, according to Urbis’ latest Apartment Essentials results.

Urbis said the March quarter result reflects strong, highly product‑specific demand across both ends of the market, from more attainable projects delivering at scale, through to premium stock being absorbed by equity‑rich downsizers.&nbsp;

David Cresp, Partner at Urbis, said the key story in Perth is not demand, it is the market’s ability to convert demand into delivered housing.&nbsp;

“This is the strongest sales quarter since Q4 2021, and it reinforces that demand in Perth is real and it’s local,” David Cresp said. “But the task now is delivery, turning that demand into projects that can actually be built and completed.”&nbsp;

[smartcode_project:default project_id=110291 project_image_fid=302785]

<h2>Affordable product leads, premium demand remains resilient</h2>

Sales in Q1 were led by more affordable projects, with The Boulevard (SKS Group) recording 115 sales in the quarter, the presentation noting this is only the second time a single project has surpassed 100 quarterly sales. The project was able to offer more affordable housing product right next to a train station.&nbsp;

Palmyra West (Finbar) also delivered strong results with 28 sales in Q1, following 84 sales in Q4, with an average price of under $800,000, underscoring depth of demand for well‑located, attainable new stock.&nbsp;

At the premium end, Urbis said downsizer demand is continuing, with the results highlighting Romeo (Applecross, Finbar) recording 75 sales and reaching almost 50% sold in one quarter.

Jual (Shenton Park, Celsius Property) also posted a strong quarter with 28 sales, reaching 39% sold in one quarter.

Urbis noted that Perth apartment demand is not speculative, not investor‑led, and not uniform, describing it as localised, often equity‑driven and highly product‑specific, a pattern reflected in the polarisation between strong “attainable” performers and premium downsizer product.&nbsp;

[smartcode_project:default project_id=148957 project_image_fid=364102]

<h2>Prices underpinned by costs, and the delivery risk is growing</h2>

Urbis said pricing pressure is cost not demand‑driven: construction costs and delivery risk are now a central constraint, with the results noting build costs remain elevated and volatile, and that energy, fuel and labour uncertainty weigh on feasibility.

David Cresp said a growing challenge for private Build‑to‑Sell developers is simply securing a builder in the current environment.

“Developers are really feeling the pressure from a building market that was operating at capacity and securing a builder is challenging,” David Cresp said, adding that even where a builder can be secured, “trying to get to the price that makes the development financially viable is incredibly challenging in the current market.”&nbsp;

Urbis’ broader WA commentary also notes that industry remains at or above capacity with lot and housing creation, and that many builders are limiting new sales to manage stretched workforces and fixed‑price contract pressures, conditions that flow directly into apartment feasibility and delivery timing.

[smartcode_project:default project_id=108869 project_image_fid=317905]

<h2>Supply: improving later, but still constrained, and Perth lags eastern benchmarks</h2>

While near‑term supply remains constrained, Urbis’ forecast shows completions lifting “Supply is forecast to be back above 1,500 apartments per annum for the first time since 2019”, with 1,775 completions forecast for 2026, and volumes remaining above that level over the following years.&nbsp;

Looking further ahead, completions are forecast to reach 2,500 in 2028, with the report noting 32% of that total is social/affordable, reflecting the role of government‑supported delivery in rebuilding the pipeline.&nbsp;

However, Urbis said Perth remains behind comparable markets on pipeline scale. In a national comparison of projects under construction, the report shows under construction Perth Build‑to‑Sell (BTS) at 3,446 apartments versus the Gold Coast at 7,922. Mr Cresp said “The challenge for Perth is how to we grow the delivery pipeline”.

Urbis’ conclusion is that Perth’s market is increasingly defined by product discipline and delivery certainty, with the research identifying “delivery certainty is key” and calling out builder risk and procurement models as core success factors, alongside “timing and staging”.&nbsp;

Jonathan Chancellor

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