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GUEST OBSERVER
After showing some tentative signs of lifting, non-mining business investment has dropped back again as a share of GDP.
The capex survey and non-residential approvals data signal only a modest lift non-mining investment this year.
However there are some more positive signs for business investment.
These include high levels of business conditions and confidence, rising capacity utilisation and a lift in company profits.
The strong pipeline of infrastructure spending and the revival in the manufacturing sector are also supportive of stronger investment. 
Non-mining business investment remains the missing ingredient in the successful transition from mining to non-mining led growth. A pick up in non-mining business investment would be a welcome driver of growth in the short-term. It also boosts productivity in the medium to long-term, which is essential for maintaining growth in the face of an ageing population and a potentially slower population growth rate. 
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Mining sector investment seems to have stabilised for now. However non-mining business investment is yet to show a meaningful lift. In fact, as a share of GDP, 8 non-mining business investment has fallen back close to the recent lows in late 2013. This is despite record low interest rates and a relatively stable, and lower, Australian dollar.
In the past we have discussed some of the reasons for weak non- mining business investment (see here). These included unrealistic hurdle rates and slower growth in consumer spending which has dampened business’ expectations of future demand. Many of these factors are still relevant. 
In this note, we take a fresh look at what the forward indicators of business investment are telling us. We find that the “hard” data such as non-residential approvals and capex spending intentions point to only a very modest increase in business investment in the year ahead. However the background conditions for business investment have improved. In particular there has been a strong lift in business conditions and confidence and a lift in capacity utilisation. Other positives for business investment include the revival in the manufacturing sector.
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And also 208 the big lift in public infrastructure spending underway. The note concludes with our outlook for non-mining business investment in the years ahead. 
Non-residential building approvals: Non-residential building is one component of business investment. The approvals data tells us the amount of building activity that is likely to enter the pipeline. This data suggests that there should be some pick-up in non-residential building activity this year due to a large spike in approvals in September 2016.
The lift in approvals was in the retail, entertainment, recreation &amp; accommodation, and office sectors. However since the spike, approvals have been running broadly in line with their average of recent years. So we need to see a further pick up in the approvals data in order to see this component of business investment lift meaningfully.
Capex survey: The ABS capital expenditure survey includes business’ estimates of new capital expenditure. And the results are not encouraging. Early estimates for spending plans can vary significantly from actual spending. However at this stage, based on the historical relationship between estimates and actual spending, it looks as if non-mining capex spending for the 2017/18 financial year will be similar to 2016/17 (see here). 
However it is possible that these estimates could be revised sharply upwards (or downwards) if the economic landscape changes. Another caveat is that the capex survey also excludes some sectors including health, education and agriculture. Investment in health and education tends to be structural rather than cyclical and demographic factors suggest that it should remain firm.
Business conditions and confidence: Survey measures of business conditions and confidence have generally been on an upward trend for several years now. Business conditions are at their highest level since the GFC. Business confidence is the highest since 2010. Both are well above long run averages
Business conditions are buoyant for most industries, with the exception of retail and more recently construction. Conditions are have improved in most States. The exception is the mining State of WA where conditions remain very weak.  
Capacity utilisation: Capacity utilisation is rising. However it is important to consider in which industries it is rising as some businesses are more capital intensive than others. Research from the RBA finds that goods-related industries plus transport tend to be more capital intensive than services-related industries. So high levels of capital utilisation in the goods plus transport industries are more likely to result in additions to capital stock. Whereas for services industries, high capacity utilisation more often prompts additional labour hire.
Capacity utilisation has trended higher in recent years for these more capital intensive industries and is now around its long run average. This has historically been consistent with a higher level of non-mining business investment than is the case now.
The capital stock has also aged which provides further impetus for new investment. However while business hurdle rates are still high we may need to see capacity utilisation rise to high levels before businesses are willing to investment in more capital. 
Return on investment/Tobin’s Q: In addition to demand conditions, the expected rate of return on investment is also an important determinant for business investment. On that score there appears to be plenty of scope to increase non-mining business investment.
The rate of return on the non-mining capital stock is running around 12% and well above most business borrowing rates. However unrealistic hurdle rates are preventing businesses from undertaking some profitable investments.
Also, according to Tobin’s Q theory of investment, growth in non-mining business investment should also be higher than current rates. Tobin’s Q measures the market value of capital relative to its book value. A ratio greater than one suggests that companies should invest more in capital because it is valued more than its replacement cost. Tobin’s Q is hard to measure in practice. But our proxy shows the Q ratio has been on an upward trend since early 2009 and is now well above one.
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Revival in the manufacturing sector: There is somewhat of a revival going on in the manufacturing sector (see here). Employment in manufacturing has picked up. Exports have risen too and are not too far below their pre-GFC levels.
A lower and relatively stable Australian dollar in recent years has helped. RBA research shows that a 10% depreciation in the real exchange rate will boost manufacturing exports by more than 15% three years later. The lift in infrastructure spending has also contributed, lifting demand for building materials, metals and transport equipment.
These stronger conditions have seen manufacturing capital expenditure lift 12% over the two quarters to Q1 2017. Although according to the capex survey estimates of future capex spending are still subdued. They imply roughly a 5% fall in capex spending for 2017/18 compared to 2016/17. But given the lift in conditions in the manufacturing sector we may see an upgrade to intentions as the year goes on. 
Positive rural conditions are also pulling out more agricultural capital expenditure. Farm capex spending has picked up with annual growth running at around 13%.
Consumer spending: Current household spending patterns and the outlook for future spending are also important factors to consider when thinking about future business investment. Firms in the RBA’s liaison program have indicated that they are reluctant to commit to a substantial increase in investment until they see a sustained pick up in sales.
Consumer spending growth has been slower on average than before the financial crisis. However spending growth has run ahead of income growth as households have cut their savings ratio. Household debt levels are elevated which means household may be reluctant to cut savings further. We think that we will need to see further improvement in the labour market, particularly a fall in the unemployment and underemployment rates, or a lift in wages growth, to lift growth in spending.
Public infrastructure spending: Increased public infrastructure spending can “crowd in” private business investment. For example, new transport infrastructure can make previously undesirable land, more desirable. This attracts new spending on dwelling construction, which in turn attracts businesses to set up in the these new areas. Private sector businesses also provide inputs into the building of infrastructure so stronger demand can enable these businesses to expand.
Australia is about to go through an infrastructure boom. The State governments have ramped up infrastructure spending. In particular there are many large transport infrastructure projects underway in NSW and Victoria. The Federal government is also planning on a large infrastructure spend. The latest Budget includes $75 billion in transport spending over the next ten years.
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Studies by the IMF find that an increase in public infrastructure spending in advanced economies increases private business investment in both the short and long term.1 They find the effects are largest when spending occurs in periods of economic slack and easy monetary policy, when it is invested efficiently, that is where public spending is allocated to projects with high rates of return, and when spending in financed by debt rather than tax increases.
You could argue that Australia meets these conditions. Firstly, interest rates are at record lows and are likely to stay there for some time yet. There is also a degree of economic slack in the economy.
Over the year to Q1 the economy grew at just 1.7%, below our estimates of potential growth of around 23⁄4%. While we expect growth to lift to above potential in 2018, a decent share is coming from net exports due to the ramp up in commodity exports following the earlier surge in mining investment. Gross national expenditure, which excludes net exports, doesn’t look quite as strong.
Secondly, in the 2017/18 Budget the Federal government has committed to provide funding for four of the seven projects considered to be “high priority” by Infrastructure Australia. A further three projects on the “priority” list will also receive some funding. And thirdly, these projects will be funded by debt with the Budget not expected to return to surplus until 2020/21.
Sources of funding: Business lending remains soft. Commercial lending growth is in negative territory. Business credit growth is showing a similar lacklustre picture, with soft monthly growth rates since early 2016. Over the year business credit is up just 3.1%. Weak lending is consistent with lacklustre investment.
Another way companies can fund new capital expenditure is by using profits. After five years of lacklustre growth, non-mining profits have begun to lift and are around 17% higher over the year to the March quarter. The lift in profits has been broad based with seven out of nine non-mining categories posting an increase in profits over the year. Mining sector profits have also surged which has positive flow-on effects for industries that service the mining sector.
So what’s the outlook for non-mining business investment?
At this stage we are expecting only a very modest lift in non-mining business investment over the remainder of 2017. This is consistent with the capex survey of business’ intentions and relatively subdued non-residential approvals data. Weak business lending data also points to subdued investment ahead.
However the background conditions for investment are improving. Business conditions and confidence are high and business balance sheets have improved due to stronger profits. Capacity utilisation has lifted and the capital stock has aged.
Other positives for business investment are improving conditions in the manufacturing sector. The strong pipeline of infrastructure spending may also work to “crowd in” business investment. One significant hand brake on stronger capex spending is the fact that business hurdle rates are high given the low interest rate/low yield environment we are in. As a result we have a moderate pick up in non-mining investment in 2018 in our forecasts. 
Kristina Clifton is economist and financial market analyst for CBA and can be contacted <a href="https://www.commbank.com.au" target="_blank">here</a>.
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jchancellor-FAypfDUnLy

The outlook for non-mining business investment

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GUEST OBSERVER
Universities can lead the way in creating opportunities for the economic development of regional cities and outer metropolitan areas under new City Deals.
Regional universities are poised to play a pivotal role as the Australian government rolls out more City Deals. These are based on an urban development model imported from the United Kingdom.
In the UK and Europe, City Deals (including smaller cities and their regions), Growth Deals (outside urban areas), and Smart Specialisations are collaborative agreements between key stakeholders. They include various levels of government, regional development bodies, businesses, and universities. These approaches recognise that policy and funding frameworks that aren’t tailored to local circumstances do not deliver for all.
For the sake of national cohesion and prosperity, Australia cannot afford to leave entire regions and cities behind. Place-based economic development policies offer these communities the sort of hope that only a collaborative plan created from the bottom up can give.
Starting this year, the first competitive round of City Deals in Australia is offering new opportunities for the economic development of regional cities and outer metropolitan areas. Agreements have been signed for Townsville in Queensland and Launceston in Tasmania. Another is being finalised for Western Sydney.
Australian universities are progressively participating in the first tranche of City Deals announced during the 2016 election campaign. An example is the University of Tasmania relocating a campus to the CBD and designing programs for regional workforce needs under the Launceston City Deal.
Similarly, Central Queensland University and James Cook University are participating in the Townsville City Deal. This includes development of new health and knowledge employment hubs, and implementation of the Queensland government’s International Education and Training Destination Strategy.
<h2>Lessons from the UK</h2>
Under the City Deal model, stakeholders commit to a shared vision and development priorities for an area. The resulting programs may build on existing regional advantages and business strengths, or seek to develop expertise in areas of growing need.
In the UK, universities are recognised as anchor institutions for their regions. Local universities are a driving force behind initiatives such as the Inverness and Highland City-Region Deal and the Cardiff Capital Region City Deal.
Although not part of a formal city deal, Keele University has promoted a vision for the development of its region by persuading the local government to sign on to its New Keele Deal.
In response to Brexit, the Higher Education Funding Council for England has been charged with boosting the relationship between universities and their regions. Universities are encouraged to work collaboratively with key local stakeholders for the benefit of their communities.
UK City Deals receive government funding of between £100 million and £1 billion over ten to 20 years. Each deal funds several projects, subject to leveraging significant private sector investment and meeting specified outcomes.
Universities are well placed to lead the way in developing such deals. By virtue of their political neutrality, universities can unite disparate parties by acting as brokers and facilitators. For example, the Cardiff City Deal brought together the Welsh and UK governments and ten local councils.
<h2>A potential game-changer for Australia</h2>
Given the political will and adequate support, the City Deal model could be a game-changer for Australia. Deals should draw together and co-ordinate funding from disparate programs to implement a broad and united vision for regional development.
Universities can also use their knowledge, research and connections – both domestic and international – to inspire a development vision for the local city or region.
Even better, providing education and training relevant to that vision encourages people to study and work locally.
Innovation, commonly centred on university campuses, is a focus of many city deals. For example, a health innovation centre and a broader Northern Scotland Hub is part of the Highland and City Region Deal. The Cardiff University Innovation System, including plans for a social science research park, will feed into the Cardiff Deal.
In the context of regional development in Australia, innovation can be seen as a positive force for jobs and growth, rather than a source of disruption and job losses. Yet innovation measures were noticeably absent in the 2017 Australian budget.
The federal government is, however, considering development of university innovation precincts. These would be ideally suited to be part of City Deals.
Caroline Perkins is an Executive Director, Regional Universities Network, Federation University Australia and author for The Conversation. She can be contacted <a href="https://theconversation.com/profiles/caroline-perkins-378623" target="_blank">here</a>.
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Regional universities have a pivotal role to play in Australia’s City Deals: Caroline Perkins

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GUEST OBSERVER
In 2007 US creative cities “guru” Richard Florida was flown up to Noosa to tell the local city council how they, too, could become a creative city.
Noosa was one of a long line of cities across the globe queuing up to pay big bucks to the US-based academic-entrepreneur. “Being creative” had become an almost universal aspiration. Who would not want to be a creative city?
And so Creative [insert name of city here] signs sprang up in the most unlikely places, along with stock shots of creative young things hunched over laptops in cafes.
Ten years later, different gurus are being flown around and the signs have been replaced by Smart [insert name of city here]. The stock shots are much the same, but now the young things are being innovative, disruptive and above all “smart”. That’s the trouble with fast policy: here today, gone tomorrow.
Below the surface more tectonic shifts can be felt. In its first outing in the mid-1990s the “creative city”, associated with thinkers such as Charles Landry, was an energising vision of a new role for cultural creativity in our cities.
Now expanded in democratic fashion beyond the world of “high art” to embrace popular, everyday creativity, culture would be a key resource for the 21st-century city.
Culture could re-activate the decayed industrial zones of the inner city, breathing new life into the dead infrastructures of factories and power stations, dockyards and tram depots, schools, barracks and banks. Culture could renew stale urban identities, catalyse new aspirations and stamp a different global brand on long-dormant cities.
And with the creative industries – culture plus all things design and digital – all that was needed were some creative people and a bit of entrepreneurial flair. Then we would have one of the industries of the future.
Creativity broke cities away from the old bureaucratic top-down planning silos of the industrial city and let them approach the future holistically. Culture would be what cities do best, earning a living and enjoying it at the same time.
By the time Florida had left Noosa the discontent was growing. Big investments in photogenic CBD developments seemed more intended for the creative class than local citizens, generating massive real estate profits while the suburbs languished unloved.
Creative industries turned out not to be so inclusive after all. They failed to soak up all those unemployed dirty industry workers and were reliant on educated workers willing to work their way up on low pay and high debt.
The turn of the smart city
Since the global financial crisis the energising vision has been around social justice, citizenship and the right to the city, with a return of community and activist-focused arts activities. Creatives are now less Californian start-ups and more counter-cultural “post-capitalists”.
Enter the Smart City, creativity without all those messy cultural bits. The tech start-ups were just as cool, the fab labs and hacker spaces just as disruptive, but now slotted onto a very different agenda.
This too promised a re-invention of the city, not now a cultural re-imagining but a complete re-tooling of the social and governmental infrastructure of the city. Courtesy of some very big global tech companies, a new digital infrastructure could be rolled out, applying sensors, data-capture devices and large-scale computing power to urban life.
Smart cities are data cities, promising efficient management of transport and utilities, security, and customised commerce. If the early Creative City embraced the messiness of city life, viewing it not as chaos but creative fecundity, the Smart City give us a clean utopian picture of the perfectly transparent city.
It’s messy on the surface, but with a big data back-room providing bespoke information for almost any aspect of urban living your care to ask for. What’s not to like?
A corporate taming of creativity
That the brains of the Smart City – as envisioned by its corporate promoters – are increasingly embedded in its walls rather than its inhabitants reveals much about the trajectory of the digital economy so closely tied to Florida’s conception of the Creative City and its industries.
Internet scholar Jonathan Zittrain has described the rise of “app” culture as a betrayal of the creative potential unleashed by the mainstreaming of the internet. If the open internet was messy and chaotic, Zittrain argues that it was correspondingly “generative”, promoting experimentation and creativity.
 
The app increasingly represents the corporate-driven pacification of the internet. AAP
By contrast, the “app” represents the pacification and domestication of the internet: its transformation from a productive medium to an infrastructure for consumption and marketing. Apps sort our music and photos for us, tell us where to eat, how to get there, and what to watch afterwards. The price of the newfound convenience that renders smart phones so addictive is a shift in the balance of control away from the end user.
For Zittrain, the “applified” world is, “one of sterile appliances tethered to a network of control” – which is not a bad description of the corporate blueprint for the Smart City.
As urbanist Adam Greenfield has observed, the corporate world has taken the lead in both envisioning and promoting its version of the “informated” city. It looks suspiciously like the commercial internet projected out into physical space.
The promise is one of efficiency, convenience and security: smart streets that adjust traffic flow in real time, walls that change images to suit our tastes (which have become indistinguishable from market preferences), even floors that cushion us when we fall.
For all the talk of disruption, the paradoxical promise of the smart city is one of data-driven efficiency and predictability. The promotional materials feature the same smart young things, freed up from the impositions of daily life (traffic, shopping, routine decision-making, even driving), to do … what?
Whose city is it?
There are surely possibilities here, but the version of smart city as automated city looks inhuman. It promises to serve people by rendering them increasingly efficient, perhaps to the point of their own redundancy.
To subject the future of the city to the corporate imaginary is to concede too much to the galloping privatisation of our cultural and informational infrastructure.
What if the right to the city were also a right to participate in shaping its information infrastructures and their implementation? Can we envision an alternative to centralised corporate control of the city’s data? And how might public priorities be redefined in ways that distinguish them from the private imperatives of the ruling tech giants?
These are the guiding questions for our June 15 symposium in Melbourne, which explores the possibility of another kind of urban culture beyond the tightly controlled formats of the Smart City/Creative City.
<a href="https://theconversation.com/profiles/justin-oconnor-11847" target="_blank"></a>
<a href="https://theconversation.com/profiles/justin-oconnor-11847" target="_blank">Justin O'Connor </a>is professor of Communications and Cultural Economy, Monash University.
<a href="https://theconversation.com/profiles/justin-oconnor-11847" target="_blank"></a>
<a href="https://theconversation.com/profiles/mark-andrejevic-21617" target="_blank">Mark Andrejevic </a>Guest Lecturer, Monash University; Professor and Chair, Department of Media Studies, Pomona College.
<a href="https://theconversation.com/profiles/justin-oconnor-11847" target="_blank"></a>
Both are authors for The Conversation.
<a href="https://theconversation.com/profiles/justin-oconnor-11847" target="_blank"> </a>
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Creative city, smart city... whose city is it?

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There's not going to be much news for the first home buyers within Tuesday's NSW state government budget.
That's because the Premier Gladys Berejiklian has already announced her housing affordability package which officially starts July 1.
It was a valiant effort, but one I felt without convincing reasoning for the major policy of relief for the first home buyer.
It had the impression of the state government being seen to do something under the weight of all the recent unaffordability headlines.
The NSW Government’s solution for housing affordability sees stamp duty abolished on all houses and apartments up to $650,000 and reduced stamp duty relief for homes up to $800,000.
The valid fear is the government's well intentioned measures could prove counter-productive and lead to an increase in prices if first home buyers who hold off during June, then rush into the market in July.
Indeed the Starr Partners agency quickly noted vendors seeking to prise more of of their offerings by asking their estate agents to list their homes for slightly more, given that first home buyers will soon have more to spend. 
"When first home buyer grants were introduced a few years ago, we saw the same thing," Douglas Driscoll, the Starr Partners chief noted.
Though it's unlikely to impact too deeply in Sydney’s inner and middle-ring suburbs as just 20 per cent of detached housing stock and 33 per cent of unit stock fall within the $650,000 price threshold for stamp duty exemptions.
No suburbs within a 25km radius of the CBD have a median house price under $650,000, while just 38 have median unit prices under the figure which has not been indexed.
CoreLogic noted across in the entire Sydney metropolitan area just 25 per cent of dwelling sales over the past year were at a price of $650,000 or less.
The measure will encourage higher update of apartments given their pricing.
As Driscoll said the affordability crisis is a Sydney issue, not a state wide issue so regional NSW first home buyers are set to benefit the most from the measure.
It will take a big rise in first time buyer demand to prop up the overall housing market, filling any gap by fewer investors should they exit in the market.
There was an historic four percent low of NSW housing finance commitments to owner occupier first home buyers in recent calculations compared to 46 percent of lending to investors. 
Young first home buyers who don't wish to rush the market after July 1 will no doubt seek out the Federal Budget's simple superannuation top-up scheme that offers generous tax breaks.
The Federal Government's headline housing measure also kicks in from July 1 when the first-home buyer can start to salary sacrifice into their super account.
Withdrawals for home purchasing, taxed at marginal tax rates less a 30 percent offset, will be allowed from 1 July 2018.
This article first appeared in The Daily Telegraph.
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Not much not already announced for first home buyers in NSW budget 

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GUEST OBSERVER
This week the US Federal Reserve, as expected, raised its benchmark interest rate by 25 basis points, to a range of 1-1.25 percent.
This was the third such hike in the last six months.
Fed Chair Janet Yellen said:
Our decision reflects the progress the economy has made and is expected to make.
Yet not everyone was so jazzed about the decision. In a terrific piece former US Treasury Secretary Larry Summers articulated <a href="https://www.washingtonpost.com/news/wonk/wp/2017/06/14/larry-summers-5-reasons-why-the-fed-may-be-making-a-mistake/?utm_term=.3fd9d567662c">“</a>5 reasons why the Fed may be making a mistake”.
And whether the Fed view or the Summers view is the better one has tremendously important implications for what the Reserve Bank should do here in Australia.
The nub of Summers’s concern revolves around the implicit model of the economy that the Fed is using – and whether it still works in the economic world in which we find ourselves.
The general worry with keeping rates too low, for too long, is that inflation will take off. In the past, policymakers have worried – with good reason – that waiting to raise rates until inflation starts rising much is dangerous because it can get out of control.
If one is not going to wait to see what happens to inflation, then one needs a way to predict the path of it. The traditional approach that policymakers have taken is to look at the relationship between unemployment and inflation – the so-called Phillips Curve – and predict future inflation based on unemployment.
Summers prefers what he calls the “shoot only when you see the whites of the eyes of inflation” paradigm. This – as the imagery suggests – involves waiting until the last possible point before raising rates. In other words, be really sure that the inflation is happening.
This makes sense if the old model is broken, and Summers makes a persuasive case that it is.
First, he points out that the Phillips Curve (the allegedly stable relationship) may not even exist. And even if it did, scholars have pointed out that it would be very hard to estimate statistically the Goldilocks point where unemployment is such that the rate of inflation is stable (the so-called Non-Accelerating Inflation Rate of Unemployment or NAIRU).
Second, Summers offers a different model of the world – at least in part. That model is one where advanced economies – like the US and Australia – are suffering from “secular stagnation”.
According to Summers, the implication for monetary policy of this are as follows:
there is good reason to believe that a given level of rates is much less expansionary than it used to be given the structural forces operating to raise saving propensities and reduce investment propensities.
I am not sure that a 2 percent funds rate is especially expansionary in the current environment.
Moreover, he sees asymmetric risk with getting it wrong, going on to say:
And I am confident that if the Fed errs and tips the economy into recession the consequences will be very serious given that the zero lower bound on interest rates or perhaps a slightly negative rate will not allow the normal countercyclical response.
Maybe the combination of a fire hose of global savings chasing too few productive investment opportunities has changed what level of interest rate can provide a serious boost to economic activity.
Which bring us to Australia. We, too, have relatively low unemployment by historical standards (the ABS just announced a drop in May to 5.5%), yet wage growth is remarkably low. Those two things happening together suggests that our old understanding of the labour market is off the mark. That low wage growth is a major driver of the low inflation we are also experiencing.
If Summers is right, and there isn’t some big point of difference between Australia and the US in this regard, then the unmistakable implication is that the RBA should probably cut rates – perhaps twice – later this year.
But there is that whole housing price thing in Australia. A rate cut could fuel further price rises which, as bad as that is for affordability, is also deeply problematic for financial stability.
Yet, if the Australian economy really does need a rate cut, and governor Philip Lowe holds steady because of housing price fears, then that could trigger a further slowing of GDP growth, put wages under even more pressure, and trigger a recession itself. And that would be bad news for financial stability, too.
Let’s see how the RBA handles that Gordian Knot.
<a href="https://theconversation.com/profiles/richard-holden-118107">Richard Holden</a> is a Professor of Economics and PLuS Alliance Fellow at UNSW and author for <a href="https://theconversation.com/au">The Conversation</a>.
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Australia is facing an interest rates dilemma

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GUEST OBSERVER
The fire at the Grenfell Tower in London has naturally led to speculation about the causal factors and the potential for it to happen in Australia.
Understandably, some have raised questions about the role of building products and the extent to which they contributed to fire and its spread.
It is understood that authorities in London will undertake extensive inquiries into the Grenfell Tower tragedy and it is appropriate to let these run their course. As is the norm, Australian authorities will no doubt monitor these inquiries and make improvements to local laws if appropriate. A 2014 incident at the Lacrosse Tower in Melbourne caused authorities to carry out inspections on building products used in the construction of similar buildings to ensure products were fit for purpose.
The relevant laws we have in Australia are comprehensive and under almost continuous review.
Recent changes to the ABCC laws, for example, gave the Office of the Federal Safety Commissioner a bigger role in monitoring building products used in construction projects funded by the Commonwealth Government. The issue has been on the agenda for various COAG committees, including the Building Ministers Forum.
Master Builders and our members understand the importance of ensuring building products are fit for purpose and installed correctly, but there is always a risk that some products entering Australia don't meet minimum requirements.
Everyone in the building supply chain including manufacturers, importers, and wholesalers, retailers, building designers, builders and contractors have a shared responsibility to ensure building products are safe and fit for purpose.
While the focus is often on builders, greater attention should be given to those involved in importation and distribution. Making sure these products don't enter the Australian market in the first place is a position that Master Builders has made clear in submissions to government and other inquiries.
Denita Wawn is a CEO of <a href="https://www.masterbuilders.com.au/Home" target="_blank">Master Builders Australia.</a>
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London apartment tower fire and possible issues in Australia

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GUEST OBSERVER
Despite the horror of the fire at Grenfell Tower, UK regulations for tall buildings are ahead of the curve in comparison with other countries.
There have been huge improvements in construction materials and technological solutions throughout the modern era. And testing and certification methods have became even more rigorous, to ensure the quality of new products.
Of course, many people are now asking what more could have been done to prevent the tragic loss of life in the Grenfell blaze. The truth is, while architects and engineers can work to mitigate the risk of fire, it cannot be completely eliminated. The addition of some materials to buildings, such as cladding, will obviously now come under scrutiny. But there are several improvements that can be made to old 20th-century tower blocks like Grenfell, to make them safer places to live.
When it comes to managing the risk of fire, builders and architects are guided by three simple principles: prevent risk, evacuate users and minimise damage – in that order. But updating or “retrofitting” older buildings to meet modern safety standards isn’t always straightforward. That’s why architects, builders and other experts work alongside fire engineers to ensure evacuation systems are adequate for the building’s structure, function and users.
There is no single formula. Each building is studied in detail by a design team, which works together to decide what approach is best. It’s important to consider how the building is being used; for instance, while offices are at risk because they contain large amounts of flammable stationary and electronic equipment, in residential units the biggest risks arise from cooking, heaters and other domestic equipment, which can start fires.
Human factors such as forgetfulness, physical limitations and human error must also play a role in fire safety planning – especially when children or elderly people are frequent users. People are also more relaxed at home, which can lead them to lose awareness of some of the risks. People often leave pans on the hob or place heaters near curtains and other combustibles for example. A team must bear all these factors in mind, as they decide how to approach each project: smoke and heat detectors can prevent some accidents, placing sockets away from windows can also help.
Safe evacuation routes
Some buildings rely heavily on evacuation routes to keep users safe when disaster strikes. This requires sound alarm systems, fire barriers in the form of fire doors and walls, and smoke extractors. These features are especially important in historic buildings, where escape routes are narrow or intricate, and have not been designed in accordance with current building regulation standards. Wherever possible, fire stairs should be partly sealed, to prevent smoke from entering, while automatic ventilation systems can be installed, which allow smoke to escape upwards like a chimney.
Done right, this can provide a safe, smoke free escape route. But it is not always possible to achieve this standard in existing buildings, which is why users are sometimes advised to stay in their flats and steer clear of stairs and corridors where smoke can build up. Smoke inhalation is the most common cause of death in fires so residents are often advised to remain in a smoke-free zone and wait to be rescued. It appears this was the case at Grenfell Tower link to stay put.
Likewise, technical considerations can prevent the use of certain types of fire safety technology – for example, when there is no space to accommodate the installation. Installing sprinkler systems is not always feasible because they often require large tanks to store water, which are heavy and need space to allow access for maintenance.
Proper emergency access
It’s hugely important for buildings to be designed to accommodate emergency responses, by making space for fire fighters to take control of and extinguish fires, if and when they occur. Some measures affect the internal layout, such as the installation of fire-fighting lifts. Others relate to the areas surrounding the building and the provision of services. For this reason, large structures must have a water source available, to reinforce the fire brigade’s own supply.
Fire engines can only reach certain heights and cannot cover the upper floors. In new buildings, dry risers are installed, providing an empty vertical pipe which fire fighters can use to pump water up to the higher storeys. In order to function properly, these need to be regularly tested and maintained. They might not be not suitable for some retrofits, due to the lack of space.
Pavements around buildings are often required to be a specific width and strength, to take the size and weight of local fire engines. All of these design measures help fire fighters keeping us safe but they are also highly reliant on maintenance. Residents of Grenfell Tower reported obstructions to emergency access routes, in one of a series of complaints about the safety and maintenance of the building.
Measures to minimise damage
When planning for fires, the team will also try to find ways to minimise the damage to the structure. This is to avoid the risk of collapse, as well as preserve as much of the building as possible, in case it can be reused after the fire.
To do this, the design team can use new building modelling software (BIM) to predict with reasonable accuracy how quickly a fire could spread through a building. All construction materials come with a set of technical data, which designers can input into the software in order to select the most suitable technology and materials for the building.
If a material is highly combustible, then alarm systems become more relevant, while escape routes require better protection and ease of movement. When a building or refurbishment is completed, the designer hands over the key and a maintenance manual to the landlord. Maintenance manuals are very detailed, providing contact information, time schedules and guarantee documents for the upkeep of the building.
A fatal flaw
But even with all these measures in place, there’s still a one major problem: materials are tested in isolation, which means that their technical data does not take into account how they will react when used in combination with other technologies – or when there are human errors in the design or assembling process. These issues are not picked up by BIM software.
Fire can spread rapidly in the small gap between the external face of the building, and the internal walls. Thermal insulation is often placed inside this cavity, and sometimes it is part of the external cladding. Some aluminium panels are made with a rock wool insulation – these are fire resistant. But aluminium gets hot and expands very quickly, heating the insulation layer. If this layer is combustible, fire can spread at speed by travelling through the cavity – which acts as a chimney – producing vast amounts of toxic smoke.
Fire barriers can be used to create compartments within the cavity, installed horizontally and vertically between the cladding and the internal wall at critical points to delay the spread of fire. But this product has to be installed with great skill for it to work efficiently, and it’s not always possible to use it for retrofits, depending on the type and condition of the existing walls.
This explains why, despite all the design efforts, the risk of fire cannot be completely eliminated by design. What’s more, designers and managers can only predict human factors and behaviours to a certain degree. For this reason, communities and schools must work together with designers, fire brigades and building managers to help prevent fires. Meanwhile, building contractors and maintenance professionals must use these techniques to ensure that residents are properly protected from harm. 
Laura B Alvarez is architectural technologist and Urban Designer, Nottingham Trent University and author for The Conversation. <a href="https://theconversation.com/profiles/laura-b-alvarez-209966" target="_blank">She can be contacted here</a>.
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Grenfell fire aftermath: how 20th-century buildings can be made safer, not more dangerous

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GUEST OBSERVER
The closure of the Gatwick Hotel in St Kilda represents a new front in the ongoing gentrification debate in inner Melbourne.
It highlights inconvenient truths about cultural appropriation, heritage as a driver of urban renewal, and the marginalisation of the city’s most vulnerable residents.
Gentrification taps into the fundamental urban planning and social issues facing Melbourne and other big Australian cities in coming decades. In particular, it has impacts on liveability, housing affordability, and social cohesion.
Gentrification has its benefits
Gentrification and the financial investment it represents can be a positive and transformative process for local communities. Better access to education and health services, as well as welcoming, attractive and vibrant streetscapes, are just some of the benefits of urban regeneration.
But, too often, the economic benefits of regeneration are separated from its social impact on existing residents. Rising property prices and rents are inevitable with gentrification. As a result, people on low incomes or who rely on social welfare are forced out as the wealthier middle class moves in.
The adaptive reuse or restoration of heritage buildings plays a key role in this process. Such developments can provide a sustainable and culturally sensitive solution to the challenge of increasing population density in our cities. Nonetheless, the debate on the role and value of heritage buildings is often paradoxical and divisive.
At its simplest, the divide is between those who passionately argue for preserving these buildings for their historical and cultural value, and those who see heritage as an unnecessary restriction on urban development.
Sometimes, the two sides align, as is largely the case with the Gatwick. Those in charge of the building’s redevelopment buy into the benefits of gentrification, with this development creating an opportunity to market luxury apartments at a substantial premium.
Trading on edginess and authenticity
The issues surrounding the Gatwick feed into a much more complex and potentially problematic debate about how we value our urban environment.
The threat to heritage is not destruction of the building itself. It’s the loss of a more intangible and hard-to-commodify aspect: the “collective memory” of stories, folklore and history. This forms the cultural fabric that contributes to the urban character and identity of an area.
The reality of life at the Gatwick was sometimes difficult. But, for decades, it provided a home for those most in need of shelter and safety. In the public consciousness, however, the Gatwick was a potent symbol of the inner city’s social problems: homelessness, drug addiction, prostitution and violent crime.
Local traders, residents and politicians all campaigned for its closure. Even the retail decline of Fitzroy Street was blamed on the hotel’s reputation.
It could be argued, though, that this very notoriety played a pivotal role in moving St Kilda along the path of gentrification. In recent decades, property developers have successfully marketed St Kilda as an edgy – but safe – place to live.
The area’s undeniable heritage, set against the backdrop of drugs, prostitution and a healthy dose of rock ’n’ roll folklore, knits together in an irresistible narrative that feeds the public appetite for “cultural authenticity”. In street after street, elegant but tarnished historic buildings have allowed investors to buy into this local mythology with relative ease.
Those who gave area its character lose out
The bitter irony is that this quest for authenticity has left long-term locals, such as the former Gatwick residents, vulnerable to the pitfalls of gentrification. The narrative, of which they formed an integral part, has moved on. New residents have co-opted the authenticity of St Kilda’s past while rejecting the challenging reality of how these social issues play out locally.
In effect, the very people who arguably contributed most to the local community’s cultural diversity and vibrancy are the first to be excluded. This pattern of appropriation, commodification and finally exclusion is replicated in historic suburbs across Melbourne and other cities.
The producers of Channel Nine’s The Block have bought the Gatwick. Under the TV spotlight, the gritty boarding house will undoubtedly be transformed into stylish and desirable apartments aimed at wealthy buyers.
But what does the future look like for its former residents? By ignoring the impact of urban regeneration on the homeless and vulnerable, are we acknowledging that closing the gap between our wealthiest and poorest residents is an impossible task?
Reducing urban regeneration to a system largely driven by the accumulation of personal wealth, with little or no thought for the profound social displacement that gentrification can bring, risks further marginalising those residents who already have little or no say in the future of our cities.
Gareth Wilson is researcher at the Australian Centre for Architectural History, Urban and Cultural Heritage, University of Melbourne and author for The Conversation.
He can be contacted <a href="https://theconversation.com/profiles/gareth-wilson-378123" target="_blank">here</a>.
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Goodbye to the Gatwick, and to so much of the old St Kilda

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No one should underestimate how home improvements contribute to Sydney's rising residential prices.
We are going through a renovation boom, with time poor buyers willing to pay extra if the renovation is completed to a high standard.
Rather than undertaking the work themselves, strong demand is being shown by buyers for quality renovations completed, valuers Herron Todd White have advised.
They note the popularity of renovation shows on television, sees more and more people jumping on board.
Channel 7’s The Aussie Property Flippers program recently featured a Tamarama property. The small Fletcher Street two bedroom, one bathroom unit was purchased in early 2016 for $780,000. With a renovation cost of around $80,000, the 58 sq m property sold last December for $1.065 million. 
In Sydney’s CBD a one bedroom, one bathroom unit with car space in a converted heritage Clarence Street building was purchased in early 2016 for $710,000.
After full renovation to a high standard it sold in April for $1.13 million. 
There has been limited flipping within the prestige market but one was in Bellevue Hill where $3.9 million was paid in 2015 and $5.75 million secured recently after what HTW noted was "a good quality cosmetic renovation,. 
Agents says sellers across Sydney who've undertaken very basic renovations are not doing as well as those who undertake more extensive renovations.  
But HTW warn one of the biggest mistakes renovators can make is to over capitalise.
"This is more common in suburbs with lower price points where even minor blowouts in budgets can result in an over capitalisation," their June report advised.
"The best way to ensure this doesn’t occur is look at any examples of the end product that have sold in the local area.
"If sales of renovated properties are within a certain price point it will give you a target and assist your budget to ensure the project will stack up." 
Success was secured at a Smithfield property purchased in original but poor condition in early 2016 for $575,000.
The property was fully renovated, slightly extended and reconfigured to include an additional fourth bedroom and bathroom.
It then sold in March for $860,000.
With the renovation carried out correctly to meet market demand in the area, the success represented a 50 percent value increase in just over 12 months, albeit HTW noted that overall market growth had a big part to play.
The strong market conditions over the past few years has certainly been a major factor in not only the profits made but also lifting the confidence of the people undertaking these renovations. 
There aren't just the flippers of course. 
There have been increased number of frustrated home owners seeking to add value to their current properties rather than upgrading amid the recent price surge and listings shortage.
This article first appeared in the Daily Telegraph.
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Flipping success across Sydney comes from matching market needs

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GUEST OBSERVER
It is yet too soon to gauge the true impact of recent macro-prudential measures on the housing market, but recent reads on prices suggest the market could already be close to its peak.
According to CoreLogic’s hedonic price measure, property prices fell in May, including in the major boom cities of Sydney and Melbourne – prices fell for both detached houses and units, although the latter fell by more. Declines were not uniform, however, with dwelling prices rising in both Brisbane and Adelaide.
Mortgage lending has cooled only slightly, but is expected to be weighed down as lenders look to stem the flow of interest only loans (with the biggest impact likely to be seen in investor credit). Mortgage credit rose by a steady (albeit subdued) 0.5% m/m in April, as investor credit actually outpaced owner-occupied credit modestly.
Looming headwinds from prudential tightening, combined with rising housing supply, affordability constraints and modest wages growth (which looks set to continue), validate our expectation for the housing market to cool from here.
That said, while the risks have certainly compounded, we continue to expect an orderly conclusion to the long-running housing boom in major markets, with the profile also helped by additional policy announcements of late to support first home buyers.
Our national forecasts for houses in 2017 are 7.2 percent in 2017 and 4.3 percent in 2018. Unit prices are forecast to rise 6.8 percent in 2017, but will fall modestly in 2018 (-0.4 percent).
Forecasts for 2017 anticipate additional modest growth in coming months, suggesting a degree of downside risk.
Dwelling investment dropped by a greater than expected 4.4 percent in Q4, occurring despite a pipeline of construction projects that is close to record levels – although weather related disruptions may have contributed to the result.
However, it is possible that supply is being constrained by other factors, including deliberate delays by developers in response to rising settlement concerns. Capacity constraints and tighter credit availability are other possible explanations.
Declines were seen across both new and used dwellings (down 4 percent) and alterations &amp; additions (renovations, down 5.2 percent). Growth in dwelling investment over the year was also soft at -2.5 percent y/y.
New building approvals have come off from their highs, but have held steady at higher than expected levels in recent months.
That might suggest the housing construction boom has a little further to run (despite recent declines in dwelling investment), although our economic modelling still points to significant downside risks to the outlook. Overall, dwelling investment is expected to be flat in 2017 (revised down due to very weak Q1 outcome), before turning modestly negative (-0.4 percent and -2.5 percent in 2018 and 2019 respectively). 
Hints that housing prices are starting to peak will be welcome by the Reserve Bank who remain concerned about elevated household debt. While it is early days, this is consistent with our view that housing prices will slow from here, particularly given further tightening in credit growth as banks are forced to cut back on interest only loans. No rate hikes are likely however until mid- 2019.  
Alan Oster is group chief economist, National Australia Bank, and can be contacted <a href="https://business.nab.com.au/author/alan-oster/">here</a>.
 
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Property market could already be close to its peak: Alan Oster

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.

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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.

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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.

[smartcode_project:default project_id=152022 project_image_fid=375528]

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.

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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.

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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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