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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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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

One of North Sydney's best-known commercial buildings could become hundreds of new homes, with insurance giant Zurich Australia lodging a State Significant Development Application (SSDA) to transform 5 Blue Street into a mixed-use residential development above North Sydney Station.

Rather than demolishing the existing building and starting again, Zurich is proposing an adaptive reuse project that would convert the landmark office building into a 15-level residential development delivering 62 apartments, 86 affordable co-living dwellings, activated retail and significant upgrades to the Blue Street Plaza.

The proposal reflects a growing trend of commercial property owners repositioning ageing office assets into residential housing as Sydney grapples with housing supply shortages and changing workplace demand.

<img alt="Zurich" data-entity-type="file" data-entity-uuid="0bba7d12-06dc-4375-aad7-238c94b21ac5" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-07-22%20at%2010.42.05%E2%80%AFAM.png?VersionId=NJl5oLAEBDGuPmY3RnyliKODjMc8lvRh" />

Located directly above North Sydney Metro and train station, the 3,051 sqm site occupies one of the most strategically positioned parcels of land on Sydney's Lower North Shore.

Designed by fjcstudio, the proposal seeks to retain and adapt much of the existing structure while creating a contemporary residential address that better connects with the public domain surrounding North Sydney Station.

The application proposes two basement levels, ground floor retail, affordable co-living accommodation across the podium levels, and apartments above, while preserving and enhancing the publicly accessible Blue Street Plaza.

Rather than pursuing maximum apartment numbers, Zurich has opted for a housing mix heavily weighted towards larger owner-occupier residences.

The proposal includes 62 build-to-sell apartments comprising 12 one-bedroom, 19 two-bedroom, 29 three-bedroom apartments and two premium penthouses. It also incorporates 86 affordable co-living dwellings, which would be managed in perpetuity by a Community Housing Provider.

That balance between traditional apartments and affordable housing reflects the NSW Government's push to increase housing diversity around major transport infrastructure.

The proposal has been lodged concurrently with a rezoning application, with Zurich arguing the site is ideally positioned to support additional housing given its immediate proximity to public transport, employment and services.

"The proposal aims to respond to the housing challenges facing Sydney through the delivery of diverse housing types in a highly accessible location," the design report by fjcstudio states. It also seeks to improve pedestrian amenity through upgrades to Blue Street Plaza while creating a high-performing residential building that responds to the surrounding context.

<img alt="Zurich" data-entity-type="file" data-entity-uuid="36082e15-c636-4481-bb68-5a5f6443fe39" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-07-22%20at%2010.41.36%E2%80%AFAM.png?VersionId=5P6VD.fvmqjQfIG3TWWMRXxQWiQBjeFB" />

Rather than replacing the commercial building, fjcstudio has developed a design that works with the existing structural framework above the rail corridor, an approach that significantly reduces demolition while allowing the site to be repositioned as a mixed-use residential precinct.

The existing structural constraints have informed much of the building's design, including its relationship with Blue Street and surrounding public spaces.

The building has been designed as a slender tower rising above a clearly defined podium, with vertically expressed façades intended to reduce the perceived bulk while reinforcing North Sydney's emerging skyline.

According to fjcstudio, the architectural language responds directly to the surrounding commercial towers while maintaining a finer grain expression more closely aligned with the neighbouring Lavender Bay streetscape.

The tower incorporates articulated façade elements, landscaped podium edges and recessed upper levels to soften its appearance and improve pedestrian amenity below.

A significant component of the proposal is the revitalisation of Blue Street Plaza.

The existing public space has long served as one of the primary pedestrian connections between North Sydney Station, Greenwood Plaza and Blue Street, yet its role is expected to become even more important following the opening of Sydney Metro.

Zurich's proposal seeks to strengthen that role by improving landscaping, introducing new retail frontages, enhancing pedestrian permeability and creating more active edges throughout the day and evening.

Ground floor retail would wrap the plaza, while separate residential and co-living entries have been designed to improve wayfinding without reducing street activation.

Landscape design has been integrated throughout the podium and public realm, softening what is currently one of the most heavily urbanised parts of North Sydney.

&nbsp;

&nbsp;

fjcstudio has carefully oriented apartments towards Sydney Harbour and the CBD while using privacy blades and articulated façades to minimise overlooking between neighbouring buildings.

Large framed openings along the western elevation maximise harbour outlooks, while the eastern apartments have been angled towards the south-east to improve privacy from neighbouring development.

The project forms part of the continuing transformation of North Sydney from a predominantly commercial CBD into a genuine mixed-use city centre.

Since the completion of Victoria Cross Metro Station, developers have increasingly shifted their attention towards residential projects capable of leveraging the area's unparalleled transport connectivity.

&nbsp;

FiveX recently lodged plans for a 61-storey, 490-apartment tower that would become one of the tallest residential buildings in North Sydney if approved.

Aqualand continues to expand its Lower North Shore presence following the completion of AURA on Walker Street and its recent St Leonards and Roseville proposals.

Developers are also progressing projects throughout Walker Street, Miller Street and the Victoria Cross precinct as demand for well-located owner-occupier apartments continues to strengthen.

Joel Robinson

First look: Zurich targets North Sydney office conversion with 148-unit proposal above Metro station

Busy developer Aqualand Prestige has formally taken the next step in its expansion across Sydney's Lower North Shore, lodging a State Significant Development Application (SSDA) for its long-held Archer Street site in Chatswood.

The application covers <a href="https://www.apartments.com.au/new-apartments/51-55-archer-street-chatswood-nsw-2067">51-55 Archer Street</a>, a 1,767 sqm amalgamated site on the eastern edge of the Chatswood CBD, where the developer is seeking approval for a 45-level mixed-use tower delivering 114 apartments, including a significant affordable housing component, alongside retail, commercial space and six basement levels of parking.

The SSDA marks the latest milestone for a project Aqualand has been quietly progressing over the past two years. The developer first secured the site for its Aqualand Prestige platform before undertaking an alternative design excellence process with PTW Architects, ultimately avoiding a formal design competition through the Housing Delivery Authority pathway.

The proposal has evolved considerably from Aqualand's original concept. The revised scheme has been designed around larger owner-occupier product, with an unusually high proportion of three and four-bedroom apartments, targeting the more affluent buyer profile, and downsizer, emerging across the North Shore.

<img alt="Archer St" data-entity-type="file" data-entity-uuid="0171204c-5811-41b5-9b09-2335d1b7c3d0" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-07-22%20at%208.52.48%E2%80%AFAM.png?VersionId=6YTuxfq.puZo7k2wbfgemcO5K3QfXYGQ" />

The 114-apartment mix comprises six studios, 27 one-bedroom apartments, 18 two-bedroom apartments, 50 three-bedroom residences and 13 four-bedroom homes. A quarter of the building will be dedicated to affordable housing, well above the mandated 15 per cent&nbsp;

PTW has structured the building vertically, with affordable housing across levels one to six, premium apartments through levels seven to 31, duplex skyhomes on klevels 32 to 43, a penthouse on level 44, and a rooftop plant level above. Six basement levels will provide resident parking and servicing.

The tower is proposed to reach approximately 154 metres, placing it among a growing collection of residential high-rises transforming Chatswood's skyline.

Rather than competing purely on height, PTW says the design has been driven by creating a slimmer tower capable of delivering significantly larger apartments.

"The primary objective of this project was to create a distinctive building that stands out from the recently approved or built structures in the Chatswood area," the design report states, noting the structural efficiency allows greater investment into apartment quality and resident amenity.

Residents would have access to more than 450 sqm of communal open space including landscaped gardens, swimming pool, rooftop entertaining areas, fitness spaces, community gardens, children's play areas and barbecue facilities.

A major focus of the design has been the public domain.

The ground plane has been opened up through landscaped terraces inspired by Willoughby's sandstone ridges, with native planting, public seating, artwork, retail activation and a series of gathering spaces intended to soften what has traditionally been a hard commercial streetscape.

The landscape strategy references Blue Gum forests once common throughout the area, while incorporating Indigenous storytelling, public art and lighting installations to strengthen the connection to Country.

Chatswood has been one of Sydney's busiest apartment markets over the past 12 months, with a steady pipeline of both new project launches and fresh development applications.

Hyecorp recently launched Celine, a 122-apartment development just along Archer Street, while Changfa and Huirong Group are progressing The Anderson, an 84-apartment project on Anderson Street.

Develotek recently secured approval for a 101-apartment tower on Pacific Highway, while Tian An LFD received the green light for Hammond Greens, its apartment development on the edge of the Chatswood Bowling Club.

Commercial property developer FiveX is also making its move into the residential market. Last month it lodged plans for a 61-storey tower with 490 apartments, which, if approved, would become one of the tallest residential buildings in Chatswood.

Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/first-look-fivex-targets-chatswood-skyline-with-61-storey-tower-after-north-sydney-plans">First look: FiveX targets Chatswood skyline with 61-storey tower after North Sydney plans</a>

Aqualand is also expanding its development pipeline following the launch of its luxury residential brand, Aqualand Prestige. The developer has delivered a string of high-end apartment projects across Sydney's affluent suburbs over the past decade, most recently AURA by Aqualand on Walker Street in North Sydney.

[smartcode_project:default project_id=30959 project_image_fid=292863]

It has since quietly assembled its next wave of projects.

Earlier this year Aqualand launched Boronia in Roseville, a boutique 111-apartment development on Larkin Street. The project is one of the first significant apartment developments to launch in the suburb ahead of what is expected to become one of Sydney's most active new housing precincts under the NSW Government's Low and Mid-Rise Housing reforms, which allow greater density around train stations.

[smartcode_project:default project_id=152095 project_image_fid=373685]

The developer has also lodged plans for a two-tower, 413-apartment development on Herbert Street in nearby St Leonards, further strengthening its presence across the Lower North Shore.

Beyond that, Aqualand remains behind the final stage of Barangaroo, where plans will deliver a five-hectare mixed-use precinct comprising new homes, retail, hospitality and community facilities, alongside a new Metro entrance and more than two hectares of public open space, completing the Barangaroo precinct.

Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/central-barangaroo-development-takes-big-step-with-concept-proposal-approval">Central Barangaroo development takes big step with concept proposal approval</a>

Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/first-look-aqualand-joins-st-leonards-apartment-party">First look: Aqualand joins St Leonards apartment party</a> 
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First look: Aqualand pushes ahead with Chatswood apartment tower as SSDA lodged for Archer Street

Mass timber is becoming an increasingly popular construction material in apartment developments, but Adelaide developer <a href="https://www.apartments.com.au/developers/otello">Otello</a> is taking the approach a step further.

At its new <a href="https://www.apartments.com.au/new-apartments/flowe-bowden-18-gibson-street-bowden-sa-5007">Flowe Bowden</a> development, the exposed cross-laminated timber (CLT) structure isn't just about reducing the building's environmental footprint. It also forms the foundation of a broader wellness strategy, influencing everything from indoor air quality and natural materials to the way residents move through and experience the building.

The 115-apartment mixed-use development, designed by Melbourne-based architecture practice Fieldwork, will occupy a prominent island site opposite Bowden Village Reserve, combining one, two and three-bedroom apartments with retail and a dedicated wellness destination.

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Wellness isn't confined to a gym or shared resident facility at Flowe. Instead, Fieldwork embedded the concept into the building itself.

The development has been split into two residential wings connected by a naturally ventilated central breezeway, replacing traditional enclosed corridors with open-air walkways that improve natural light, encourage cross ventilation and create more opportunities for neighbourly interaction.

"Rather than treating wellness as something that only happens on the ground floor, our response integrates it throughout the building, which led us to ask what it really means to design a healthy building," Fieldwork Director Quino Holland said.

[smartcode_project:default project_id=152022 project_image_fid=375531]

The building's architecture also reflects Bowden's industrial heritage. The lower podium references the area's historic brick and sandstone buildings, while the upper levels transition to exposed CLT, allowing the timber structure to become a defining feature throughout the apartments and shared spaces.

The use of mass timber sits alongside a range of sustainability initiatives, including a fully electric, gas-free design, rooftop solar and a targeted 5 Star Green Star rating.

[smartcode_project:default project_id=152022 project_image_fid=375524]

Inside the residences, the focus remains on natural, durable materials. Blackbutt engineered timber flooring, exposed CLT ceilings, porcelain surfaces and warm timber joinery create a calming interior palette, while low-VOC finishes and responsibly sourced materials have been selected to improve indoor air quality.

Kitchens have been designed as the centrepiece of each apartment, featuring porcelain island benchtops, timber-look cabinetry and brushed steel tapware, with layouts that maximise natural light and ventilation.

[smartcode_project:default project_id=152022 project_image_fid=375530]

The more traditional interpretation of wellness comes in the form of Level Eleven, a two-storey wellness club spanning the ground floor, mezzanine and first floor.

The facility will include a gym, yoga and reformer Pilates studios, Finnish and infrared saunas, magnesium hot and cold plunge pools, and dedicated recovery spaces. Unlike many residential wellness facilities, Level Eleven will also operate commercially, allowing the broader Bowden community to access the venue while giving residents exclusive membership benefits.

The ground floor has also been designed around everyday living. A café overlooking Bowden Village Reserve will activate the street frontage, while a bike workshop with tool storage, co-working space and dog wash has been incorporated to support daily routines and encourage interaction between residents.

"Flowe brings together my two biggest passions, creating places and creating healthier lives," Otello founder Daniel Harris said.

"We wanted to create something Adelaide hasn't seen before, a genuinely healthy building, where the way you live is lifted without even trying."

Flowe is positioned directly opposite Bowden Village Reserve and within walking distance of Bowden Railway Station and the Adelaide Entertainment Centre, placing future residents just minutes from the Adelaide CBD while remaining connected to one of the city's most established urban renewal precincts.

[smartcode_project_cta:default project_id=152022]

Otello launches wellness-focused Flowe Bowden with Adelaide-first mass timber apartment design

Not all apartment amenities are immediately visible.

Swimming pools, gyms, rooftop terraces and residents' lounges have long featured on buyers' wishlists, but as the way Australians live has changed, so too have the features that make apartment living more convenient.

Increasingly, buyers are placing value on the practical aspects of day-to-day life. Fast internet, EV charging, secure bike storage, flexible workspaces and parcel management are becoming just as relevant as lifestyle amenities, reflecting changing habits and expectations.

Online shopping has been one of the biggest drivers of that shift.

Australians spent a record $82.6 billion shopping online in 2025, with almost one in every four retail dollars now spent digitally, making parcel deliveries a routine part of everyday life rather than an occasional convenience.

For apartment residents, however, receiving those deliveries isn't always straightforward.

Without someone home to accept a parcel, deliveries can be redirected to a nearby Post Office, left in building foyers or common areas, or require building management to temporarily store packages. As apartment living continues to grow across Australia's cities, parcel management has become an increasingly important consideration for both residents and developers.

Australia Post's Parcel Locker network is one response to that shift.

<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/KPZ9j5FRdsQ?si=Qztc1dNP3ZvEIUhb" title="YouTube video player" width="560"></iframe>

Rather than relying on home delivery, eligible parcels can be directed to a nominated Parcel Locker, where they're securely stored until collected. Once a parcel arrives, residents receive a notification through the AusPost app or SMS and can retrieve it using a one-time code or QR code at a time that suits them.

The network has expanded to more than 1,500 locations nationwide, with Parcel Lockers positioned at Post Offices, shopping centres, supermarkets, transport hubs and, increasingly, within or alongside residential developments.

That growing presence reflects a broader change in how apartment buildings are being planned.

Developers are increasingly considering the operational side of apartment living alongside traditional lifestyle amenities. Just as secure mailrooms, bicycle storage and EV charging have become more common inclusions, parcel management is emerging as another feature that supports everyday convenience.

It also helps preserve the arrival experience within a building. Carefully designed lobbies and communal spaces can quickly become cluttered when deliveries accumulate, while secure parcel solutions reduce the likelihood of missed deliveries or parcels being left unattended.

For buyers comparing apartments, these everyday details are becoming part of the decision-making process.

Location, floorplans and finishes remain fundamental, but the features that simplify daily life are carrying greater weight than they once did. As online shopping continues to shape consumer behaviour, secure parcel delivery is increasingly becoming another amenity worth looking for.

Parcel delivery is joining the apartment amenity checklist

Inca Property Group has lodged a State Significant Development Application (SSDA) for Dawn, a 53-apartment oceanfront development overlooking Mona Vale Beach.

The proposal, at 35-39 Darley Street East, would replace an existing 18-apartment strata building with a new owner-occupier-focused development comprising 53 two and three-bedroom apartments, including nine affordable built-to-rent residences delivered under the State's infill affordable housing scheme.

Positioned on a 2,679 sqm elevated site around 280 metres from Mona Vale Beach, the development has been designed to maximise panoramic ocean views while responding to the site's sloping topography.

<a href="https://www.apartments.com.au/developers/inca-property-group">Inca Property Group</a> Managing Director Josh Thompson said the State Significant pathway provided greater certainty for projects of this scale.

"This State Significant pathway gives the team real certainty to progress <a href="https://www.apartments.com.au/new-apartments/dawn-35-39-darley-street-east-mona-vale-nsw-2103">Dawn</a> through to completion," Thompson said.

"It allows us to acquire a one-off site, design it carefully and deliver the right offering for the suburb, assessed by the NSW Government's planning department."

The project is one of the first developments in the area to be assessed under the NSW Government's Low and Mid-Rise Housing policy, with the site sitting on the edge of the policy's designated inner area.

The proposal includes three basement levels providing 124 car spaces, alongside a range of resident amenities including a swimming pool, gym, sauna, wellness facilities and private plunge pools for selected ground-floor and penthouse apartments.

<img alt="Dawn" data-entity-type="file" data-entity-uuid="fc1a1daf-0ce4-4f12-9076-b1fa553c7a91" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-07-21%20at%208.42.11%E2%80%AFAM.png?VersionId=4GZ9h.gpNkTljbxyAET8Jfhv51XUamDm" />

Thompson said Dawn had been designed specifically for owner-occupiers and downsizers, a buyer profile that has driven demand across Inca's recent Upper North Shore developments.

"The majority of buyers in our recent North Shore projects have been downsizers, and we are learning exactly what this market is looking for. Beyond the location itself, we have included resort-style amenities to deliver a genuine lifestyle offering," Thompson said.

Located within walking distance of Mona Vale Beach, the town centre, Mona Vale Golf Club and the Royal Motor Yacht Club, Dawn represents Inca's first Northern Beaches project following the sell-out of Tara on Park in Waitara and Ellis Residences, currently under construction in St Ives.

Construction will be undertaken by Inca's in-house construction arm, GOP Constructions.

Dawn is the latest major apartment proposal for Mona Vale, with the suburb emerging as one of the key beneficiaries of the NSW Government's new Low and Mid-Rise Housing policy.

New developer One Living, led by industry veteran Joseph Scuderi, recently secured a site on Mona Vale Road, on the border of Mona Vale and Pymble, where it is planning around 140 apartments.

IPM is also planning its third project in Mona Vale, significantly increasing the scale of its previous developments with an 82-apartment proposal at <a href="https://www.apartments.com.au/new-apartments/159-167-darley-street-west-mona-vale-nsw-2103">159-167 Darley Street West</a>, opposite Bayview Golf Course and less than 800 metres from Mona Vale town centre.

Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/one-living-enters-sydneys-new-apartment-market-with-northern-beaches-site-acquisition">One Living enters Sydney's new apartment market with Northern Beaches site acquisition</a>

Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/first-look-ipm-plans-third-mona-vale-project">First look: IPM plans third Mona Vale project</a>

Jonathan Chancellor

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