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GUEST OBSERVER
Lots of ideas are being thrown about: the test for the Treasurer is to sort the good from the bad. Reports that the government was again considering using superannuation to help first homebuyers won’t inspire confidence.
It’s not the first time a policy like this has been floated within government. While these latest ideas to use super to help first homebuyers are marginally less bad than proposals from 2015, our research shows they still wouldn’t make much difference to housing affordability.
A seductive idea with a long history
Allowing first homebuyers to cash out their super to buy a home is a seductive idea with a long history. Both sides of politics took proposals to the 1993 election, before Prime Minister Paul Keating scrapped it upon his re-election.
Former Treasurer Joe Hockey last raised the idea in 2015 and was roundly criticised, including by then Coalition frontbencher Malcolm Turnbull.
Politicians are understandably attracted to any policy that appears to help first homebuyers build a deposit. Unlike the various first homebuyers’ grants that cost billions each year, letting first homebuyers cash out their super would not hurt the budget bottom line – at least, not in the short term. But as we wrote in 2015, that change would push up house prices, leave many people with less to retire on, and cost taxpayers in the long run.
Having learned from that that experience, the government has instead flagged two different ways to use super to help first homebuyers. Neither proposal would make the mistake of giving first homebuyers complete freedom to access to their super. But nor would they make much difference to housing affordability.
Using voluntary super savings for deposits
The first proposal reportedly supported by some in the Coalition, but now denied by the Treasurer, would allow first homebuyers to withdraw any voluntary super contributions they make to help purchase a home. Any compulsory Super Guarantee contributions, the bulk of Australians’ super savings, could not be touched.
Using super tax breaks to help first homebuyers build their deposit would level the playing field between the tax treatment of the savings of first homebuyers and existing property owners.
First homebuyers’ savings typically sit in bank term deposits, where both the initial amount saved and any interest earned is taxed at full marginal rates of personal income tax. In contrast, the nest eggs of existing property owners are taxed very lightly. For owner occupiers, any capital gain is tax free. For investors, capital gains are taxed at a 50% discount, and they get the benefit of negative gearing.
But even if there’s some merit in allowing first homebuyers to use super tax breaks to save for a home, it’s unlikely to make much difference. Few people are likely to take advantage of the scheme. Households are reluctant to give up access to their savings, especially when they’re already saving 9.5% of their income via compulsory super.
In fact the proposal works out to be very similar to the former Rudd government’s First Home Saver Accounts, and is likely to be just as ineffective. First Home Saver Accounts provided similar financial incentives to help first homebuyers build a deposit. Treasury expected A$6.5 billion to be held in First Home Saver Accounts by 2012. Instead only A$500 million had been saved by 2014, when Joe Hockey abolished the scheme, citing a lack of take up.
A “shared equity” scheme for super funds
The Turnbull government is reportedly also considering a “shared equity scheme” where workers’ super funds would own a portion of the property investment, and money would presumably be returned to the super fund when the property was sold.
Details are scarce, but the proposal raises several questions.
First, would the super fund use only the super savings of the co-investor to help buy the home, or would they add capital from the broader super fund pool?
Second, how would the super fund generate a return on the investment? A super fund that invests in rental housing gets the benefit of a rental income stream. A super fund co-investing in owner-occupied housing would not. The super fund could take a disproportionate share of any capital gains to compensate, but that hardly seems attractive for the funds in a world where interest rates are already at record lows.
Third, why involve super funds in a shared equity scheme in the first place? Australia’s super sector is already notoriously inefficient – total super fund fees equate to more than 1% of Australia’s GDP each year. A shared-equity scheme would inevitably add to super funds’ administration costs.
If the federal government is serious about super funds investing in housing, it needs to encourage wholesale reform of state land taxes, which levy a higher rate of land tax the more investment property a person owns. This discourages institutional investors such as super funds from owning large numbers of residential properties, because they pay much higher rates of land tax on any given property than a mum-and-dad investor.
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Focus on what matters
If Scott Morrison really wants to tackle housing affordability, he can no longer ignore those policies that would make the biggest difference. That means addressing both the demand and the supply side of housing markets.
On the demand side, that means reducing government subsidies for housing investment which have simply added fuel to the fire. Abolishing negative gearing and cutting the capital gains tax discount to 25% would save the budget about A$5.3 billion a year, and reduce house prices a little - we estimate they would be about 2% lower than otherwise.
The government should also include the value of the family home above some threshold – such as A$500,000 – in the Age Pension assets test. This would encourage senior Australians to downsize to more appropriate housing, while helping improve the budget bottom line.
At the same time the government should support policies that boost housing supply, especially in the inner and middle ring suburbs of our major cities where most of the new jobs are being created. Population density in the middle ring has hardly changed in the past 30 years.
The federal government has little control over planning rules, which are administered by state and local governments. But it can provide incentives to those tiers of government, if it is looking to do something that would really improve home ownership.
While there are plenty of ideas to improve affordability, only a few will make a real difference, and these are politically hard. In the meantime, the latest thought bubbles about using super savings for housing might be less bad than in the past, but they would be just as ineffective.
John Daley is Chief Executive Officer, Grattan Institute and can be contacted <a href="https://theconversation.com/profiles/john-daley-1870" target="_blank">here</a>. 
Brendan Coates is Fellow, Grattan Institute and can be contacted <a href="https://theconversation.com/profiles/brendan-coates-154644" target="_blank">here</a>. 
Both are authors for The Conversation.
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jchancellor-FAypfDUnLy

The latest ideas to use super to buy homes are still bad ideas

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GUEST OBSERVER 
The minutes of the March Reserve Bank Board meeting certainly provides interesting reading.
While policymakers are relatively optimistic about the medium term outcomes for the Australian economy, there is clearly a number of ‘hot button’ issues that occupy policymaker thoughts.
To a greater extent it seems that central bank officials are ramping up their discussions and commentary on the housing sector.
In what could be described as the strongest language yet, the minutes discuss the “build-up of risks associated with the housing market”. In particular, the second to last paragraph of the minutes essentially lists a number of these risks, including “briskly” rising home prices; “a considerable” lift in additional supply of apartments scheduled to come on stream over the next few years; slowing growth in rents; rising investor finance; and - probably most concerning - the growth in household debt outstripping incomes. No doubt it is an evolving situation that the Reserve Bank will monitor closely over the coming year. 
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<img src="https://www.urban.com.au/images/2017/03/22/Screen%20Shot%202017-03-22%20at%209.03.05%20AM.png" alt="">
When it comes to the broader economy, the Reserve Bank believes that economic growth and inflation will lift over 2017, ruling out the need to cut interest rates further. If the forecasts were to change and the Reserve Bank became less positive, rate cuts would clearly be back on the radar screen, but the Bank believes risks are balanced. Rate hikes seem some way off.
The Reserve Bank has highlighted that the issues surrounding the housing sector. And while the latest ABS data on residential property prices also confirms the sizeable lift in home prices, data shows the growth in the number of homes is actually smaller in the past 12 months. Surprisingly the number of homes in Australia grew by 172,800 in the year to December after recording annual gains of 185,800 in the year to September and 182,400 in the year to June. It was the smallest annual lift in homes for 15 months.
Consumer confidence eased over the past week with consumers more negative on the outlook for the economy. In fact the reading on economic outlook over the next five years, hit a one-year low. Interestingly the readings on family finances has also weakened in the last few weeks. And while consumers are far from glum, there is no doubt the discussions on potential risks to the housing sector are adding a degree of caution.
Inflation expectations of consumers fell last week to the lowest reading since the start of the year although it still remains above 4 per cent.
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<img src="https://www.urban.com.au/images/2017/03/22/Screen%20Shot%202017-03-22%20at%209.04.45%20AM.png" alt=""> 
What do the figures show?
Reserve Bank Board minutes:
Last two paragraphs: “Given all of these considerations, the Board judged that holding the stance of policy unchanged at this meeting would be consistent with sustainable growth in the economy and achieving the inflation target over time.”
“Recent data continued to suggest that there had been a build-up of risks associated with the housing market. In some markets, conditions had been strong and prices were rising briskly, although in other markets prices were declining. In the eastern capital cities, a considerable additional supply of apartments was scheduled to come on stream over the next few years. Growth in rents had been the slowest for two decades. Borrowing for housing by investors had picked up over recent months and growth in household debt had been faster than that in household income. Supervisory measures had contributed to some strengthening of lending standards.”
“Momentum in the labour market remained difficult to assess, but it was clear that spare capacity remained and there continued to be significant differences in labour market outcomes across the country. Domestic wage pressures remained subdued and household income growth had been low, which, if it were to persist, would have implications for consumption growth and the risks posed by the level of household debt.”
“GDP growth had picked up in the December quarter to be around 21⁄2 per cent over 2016, which was only a little below estimates of the medium-term potential growth rate of the economy. This outcome confirmed that the weakness in the September quarter was temporary. Looking forward, year-ended growth was expected to pick up gradually to be above its potential rate over the forecast period. An appreciating exchange rate would complicate the adjustment of the economy following the end of the mining investment boom.”
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“Domestically, there had been a significant increase in the terms of trade in the second half of 2016 and many commodity prices had risen further in recent months. Although mining companies were expected to increase their dividend payouts following the sharp rise in mining sector profits in the December quarter, a significant proportion of shareholders are non-residents, which would limit the flow-through to an increase in household incomes in Australia.” 
Consumer confidence
The ANZ/Roy Morgan consumer confidence rating fell by 1 per cent to 112 in the week to March 19. Confidence is down 3.4 per cent over the year and below the average of 113.2 since 2014. Two of the five components of the index fell in the latest week:
The estimate of family finances compared with a year ago was up from +5 to +6;
The estimate of family finances over the next year was steady at +21;
Economic conditions over the next 12 months was down from zero to -3;
Economic conditions over the next 5 years was down from +7 to +3;
The measure of whether it was a good time to buy a major household item was up from +32 to +33;
In addition the inflation expectation 2 years ahead, fell from 4.7 per cent to 4.1 per cent. Inflation expectations have now held above 4 per cent for the past 14 weeks.
Residential property prices
The Bureau of Statistics (ABS) has released its Residential Property Price indexes.
“The price index for residential properties for the weighted average of the eight capital cities rose 4.1 per cent in the December quarter 2016. The index rose 7.7 per cent through the year to the December quarter 2016.
The capital city residential property price indexes rose in Melbourne (+5.3 per cent), Sydney (+5.2 per cent), Brisbane (+2.2 per cent), Adelaide (+1.8 per cent), Canberra (+2.8 per cent), Hobart (+4.5 per cent) and Perth (0.3 per cent), and fell in Darwin (-1.5 per cent).
Annually, residential property prices rose in Melbourne (+10.8 per cent), Sydney (+10.3 per cent), Brisbane (+3.8 per cent), Adelaide (+4.1 per cent), Canberra (+5.5 per cent) and Hobart (+8.8 per cent), and fell in Perth (-4.1 per cent) and Darwin (-7.0 per cent).”
The ABS notes that as at December 2016 there were 9.802 million homes in Australia.
“The total value of residential dwellings in Australia was $6,438,537.3m at the end of the December quarter 2016, rising $274,160.0m over the quarter.
The mean price of residential dwellings rose $25,400 to $656,800 and the number of residential dwellings rose by 39,600 to 9,802,700 in the December quarter 2016.”
CommSec estimate that there were 2.476 people per home in December quarter 2016, down 0.4 per cent on a year ago. The number of people per home have been falling in annual terms for 2 1⁄2 years.
Surprisingly the number of homes in Australia grew by 172,800 in the year to December after recording annual gains of 185,800 in September and 182,400 in June. It was the smallest annual lift in homes for 15 months.
CommSec estimates that wealth accumulated in housing assets rose by $10,547 per person in the December quarter to $265,276. 
The number of transfers (settlements) of houses and attached dwellings in Sydney in the December quarter was the lowest for any December quarter for the past 11 years.
What is the importance of the economic data?
The ANZ/Roy Morgan weekly survey of consumer confidence closely tracks the monthly Westpac/Melbourne Institute consumer sentiment index but the former measure is a timelier assessment of consumer attitudes and is now closely tracked by the Reserve Bank.
The Australian Bureau of Statistics (ABS) provides quarterly data on residential prices. The figures provide further perspectives on the state of the housing purchase sector.
The Reserve Bank releases minutes of its monthly Board meeting a fortnight after the event. The minutes give a guide to Reserve Bank thinking on interest rate settings.
What are the implications for interest rates and investors?
CommSec expects the Reserve Bank to remain on the interest rate sidelines for an extended period.
When it comes to ‘hot button’ issues it’s clear that policymaker concerns are clearly centred on the housing sector. Healthy home prices have been a key driver of rising wealth levels, supporting spending. But the Reserve Bank is worried about the lift in debt levels to buy homes.
If the recent drop in consumer confidence is sustained it could lead to less household activity – a detriment to retailers. 
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Savanth Sebastian is an economist for <a href="https://www.commsec.com.au/">CommSec</a>
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Reserve Bank raises concerns on housing: Savanth Sebastian

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The Avalon Beach restaurant space that cafe queen Jackie Milijash bought just before her death last year is being sold by the administrators of her estate.
The beloved restaurateur and business woman paid $1.95 million for the Old Barrenjoey Road commercial property with a view to opening a new establishment.
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She renovated the existing restaurant and bar premises to make a functioning space for the next few years, with the intention of eventually redeveloping the site. 
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Ian Halliday from BKH had drawn up the concept drawings for a commercial/residential development. 
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Lara Rowell at Fine &amp; Country Avalon Beach has set an April 8 auction date.
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Milijash was credited with helping create Sydney's cool cafe culture when she launched Jackies in Bondi in 1989.
<img src="https://www.urban.com.au/images/2017/03/22/Screen%20Shot%202017-03-22%20at%2012.54.50%20PM.png" alt="">
Now operated by former staffer turned foodie Myles Davis, who's back from the London cafe scene, overseen by her mother, Janina, Jackies Cafe in Paddington remains a favourite of the likes of A-listers Nicole Kidman, Hugh Jackman and Naomi Watts.
<img src="https://www.urban.com.au/images/2017/03/22/Screen%20Shot%202017-03-22%20at%2012.54.45%20PM.png" alt="">
This article first appeared in The Sunday Telegraph.
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Late cafe queen Jackie Milijash's Avalon Beach restaurant space listed

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GUEST OBSERVER 
Today’s Minutes are yet further evidence that the RBA is firmly on hold. The Board have retained a relatively optimistic view of the global and domestic economies.
And concerns around household debt and dwelling prices were once again aired.
This time, however, the Board was more explicit on housing-related risks by noting that, “recent data continued to suggest that there had been a build-up of risks associated with the housing market.” 
On the international economy, the Board sounds relatively upbeat on recent developments. In particular, it was noted that, “a number of indicators, including growth in global industrial production, global trade volumes and business sentiment, had improved.” And more importantly for monetary policy, “recent data had also confirmed the pick-up in global inflation.”
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The solid 1.1 percent lift in real GDP in the December quarter backed up the Board’s view that the weakness in the September quarter was temporary. Indeed, the 
Minutes note that growth over QIV had been, “above expectations”. The RBA continue to expect growth to pick up above its potential rate over the forecast period. This is clearly a best case scenario with the risk that growth outcomes undershoot the Bank’s expectation. 
The Board continues to lack conviction in its assessment on the labour market, noting that it, “remained difficult to assess”. The RBA expects spare capacity to “decline slowly.” Here we note that the Minutes predate the February employment report (published last week) which showed employment contracted over the month and the unemployment rate lifted to 5.9 percent. Another weak employment report would see the RBA’s forecasts for employment and wages growth tested.
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On housing, the Board has upped its rhetoric around the build-up of risks. The Minutes note that, “borrowing for housing by investors had picked up over recent months and growth in household debt had been faster than that in household income”. These comments coupled with the RBA’s acknowledgment that, “there had been a build-up of risks associated with the housing market” could be interpreted as the Bank calling on APRA to further place restrictions on lending to investors. In other words, watch this space. 
On the AUD, the Board notes that, “an appreciating exchange rate would complicate the adjustment of the economy”. We suspect that the RBA would have been expecting a March Fed rate hike to take some pressure off the AUD. 
But the currency has strengthened since the Fed tightened policy and is edging further away from where we think the RBA views the sweet spot (low USD0.70s).
The RBA’s well telegraphed reluctance to take the cash rate any lower has put more upward pressure on the AUD than would otherwise have been the case.
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The Outlook
We see little chance of further policy easing despite core inflation running below target and the unemployment rate being above the level associated with full employment. The consistent message from the RBA over the last six weeks has been that rate cuts are off the table.
When Governor Lowe appeared before the House of Representatives Standing Committee on Economics in late February he stated that, “the market pricing is for interest rates to be constant right through this year. That seems a reasonable proposition to me.” He further added that, “the main effect (of another rate cut) would be more borrowing for housing, pushing up housing prices.” This is clearly undesirable.
In our view, it would take a sustained loss of momentum in job creation or a fall in dwelling prices for Lowe to entertain the idea of taking the policy rate lower. Neither outcome is in our central scenario and as such, we see the RBA on hold over 2017 and well into 2018. 
 
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Gareth Aird is economist at Commonwealth Bank and can be contacted <a href="https://www.propertyobserver.com.au/https://au.linkedin.com/pub/gareth-aird/14/790/905">here</a>.
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RBA Board minutes confirm policy is on hold over near term: Gareth Aird

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The latest RBA minutes have noted recent data continued to suggest that there had been a build-up of risks associated with the housing market.
"In some markets, conditions had been strong and prices were rising briskly, although in other markets prices were declining.
"In the eastern capital cities, a considerable additional supply of apartments was scheduled to come on stream over the next few years.
"Growth in rents had been the slowest for two decades. Borrowing for housing by investors had picked up over recent months and growth in household debt had been faster than that in household income.
"Supervisory measures had contributed to some strengthening of lending standards."
The bank had recently announced its concerns for the apartment market, warning a flood of new apartments could come onto the market in certain areas could push down prices causing heavy losses for developers.
Last week bank research noted the rate of housing market turnover, or transactions, is on an “unusual decline” with a sharp rise in off-the-plan sales of apartments — which are difficult to measure in a timely manner — likely to be a factor.
According to the central bank, other potential reasons could be lower rates of home ownership, particularly for younger households, and migration trends.
A fall in housing market transactions directly affects the economy as it hurts tax revenue - which made up about 40 per cent of total state tax revenue in 2014/15, besides impacting the creation of more jobs and related occupations such as real estate agents, lawyers and the finance industry, the RBA noted last week.
The RBA’s latest bulletin says the decline in the national housing turnover rate in recent years has come despite “the strength in a number of housing market indicators such as national housing price growth, which has historically been positively correlated with the turnover rate”. 
It says part of the recent weakness could from measurement issues arising from the increased share of apartments in new housing construction. 
 
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RBA notes build-up of risks in housing market

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Minutes of the March Monetary Policy Meeting of the Reserve Bank Board
Members Present
Philip Lowe (Governor and Chair), Guy Debelle (Deputy Governor), John Akehurst, Kathryn Fagg, John Fraser (Secretary to the Treasury), Ian Harper, Allan Moss AO, Carol Schwartz AM, Catherine Tanna
Others Present
Luci Ellis (Assistant Governor, Economic), Christopher Kent (Assistant Governor, Financial Markets), Alexandra Heath (Head, Economic Analysis Department)
Anthony Dickman (Secretary), Andrea Brischetto (Deputy Secretary)
International Economic Conditions
Members commenced their discussion of international developments by noting that forecasts by private sector analysts for growth in the major economies in 2017 had been revised upwards since mid 2016. Growth in global industrial production and merchandise trade had picked up further and survey measures of business conditions had remained at high levels. Headline inflation in the major advanced economies had increased noticeably in recent months, largely as a result of higher oil prices, to be close to most central banks' targets. However, core inflation had generally remained low.
The Chinese National People's Congress had announced a growth target for the Chinese economy in 2017 of around 6.5 per cent (or higher, if possible), which is only slightly lower than the pace of growth recorded for 2016. This suggested that the authorities would continue to use policy to support near-term growth. However, policymakers had also increased their focus on addressing the risks to longer-term growth. The People's Bank of China had signalled a reduction in monetary stimulus, reflecting concerns about rising financial stability risks, and the target for growth in total social financing had been lowered slightly to 12 per cent. Additional measures had also been put in place to curb rapid housing price growth in some cities. Members noted that there had been a pick-up in the growth of non-bank and off-balance sheet lending.
In the United States, consumption had been the key driver of expenditure growth over 2016, supported by continuing improvements in labour market conditions. Investment intentions had picked up significantly and the number of active oil rigs had increased in response to the higher level of oil prices. Fiscal policy was also expected to be expansionary under the new administration and the US economy was expected to grow above its potential rate in 2017. Members noted that the volume of trade destined for the United States had fallen significantly as a share of total global trade since the late 1990s. Nevertheless, a move to more protectionist policies would still be damaging for the medium-term outlook for both the US and global economies. Above-average growth in unit labour costs, higher oil prices and more expansionary fiscal policy were all expected to contribute to a further rise in core inflation, which had increased since 2015 to be only a little below the Federal Reserve's goal.
The euro area and Japanese economies had grown faster than their potential growth rates over 2016, resulting in further improvements in labour market conditions. The unemployment rate in the euro area had fallen to its lowest level in seven years, while the unemployment rate in Japan had declined to a two-decade low. In both economies, core inflation had remained low, while headline inflation had increased, largely as a result of higher oil prices. In the euro area, headline inflation had increased to be consistent with the European Central Bank's target. Measures of inflation expectations in both economies had been steady or had increased.
Members observed that merchandise exports had picked up for the euro area and Japan towards the end of 2016. A significant increase in merchandise exports had also contributed to growth in East Asia. Members noted that the increase in global trade over the second half of 2016 had been underpinned by an improvement in global economic conditions, both for Australia's major trading partners and other parts of the world that were important sources of external demand for output from East Asia.
Australia's terms of trade had risen by around 15 per cent over the second half of 2016 and were expected to rise again in the March quarter. In February, prices for iron ore, base metals and crude oil had all reached their highest level in more than a year, although the price of coking coal had fallen from its peak in November. Some reversal in the terms of trade was still expected, although the recent improvement in global demand suggested that higher commodity prices could be more persistent than previously anticipated. Members noted that generalised strength in commodity prices tended to indicate an improvement in global demand conditions, but that factors affecting the supply of commodities had also affected prices.
Domestic Economic Conditions
GDP growth in the December quarter of 1.1 per cent had been above expectations. The outcome partly reflected the reversal of some of the temporary factors that had contributed to the fall in output in the September quarter. Most notably, there had been a solid pick-up in export growth in the December quarter; in addition, growth in both consumption and business investment had been higher than expected. Total nominal income had risen strongly, driven by growth in mining sector profits as a result of the higher terms of trade; in contrast, growth in labour incomes had been unusually weak.
The mining sector had contributed to growth in the December quarter, reflecting higher exports and an unexpected increase in investment. Members observed that some resource firms may have been able to increase their exports to take advantage of higher commodity prices by running down inventories. Consistent with previous staff forecasts, the capital expenditure survey of investment intentions continued to indicate that mining investment would fall further over the following year or so, but that the drag on growth would dissipate over this period.
Non-mining business investment had risen in the December quarter, largely as a result of higher non-residential construction, although machinery and equipment investment had also risen. Non-mining business investment had picked up over the previous two years or so and business conditions had been more positive in recent months. In contrast to these more positive signs, non-residential building approvals had declined further and the capital expenditure survey continued to suggest that, in aggregate, firms do not intend to increase their spending on non-mining investment over the following year or so. Members observed, however, that this survey does not cover some important sectors, including education and health, and also does not include investment in intellectual property, which has become an increasingly important share of non-mining business investment in the national accounts measure. Members noted that in most sectors there had been little evidence that non-mining business investment had been held back by lack of access to credit.
Dwelling investment had rebounded in the December quarter; much of the strength had been concentrated in New South Wales. Even though building approvals had fallen significantly in recent months, the substantial amount of building work in the pipeline suggested that dwelling investment would continue to contribute to growth in coming quarters. Conditions in established housing markets had continued to differ significantly across the country. Over recent months, conditions appeared to have strengthened in Sydney and had remained strong in Melbourne; these cities had continued to record brisk growth in housing prices, and auction clearance rates had remained high. Housing loan approvals and credit growth had picked up for investors, primarily in New South Wales and Victoria. In contrast, housing prices and rents had fallen in Perth for two years or so, and apartment prices had declined in Brisbane.
Rural exports had grown strongly in the December quarter, reflecting strong farm production following favourable weather conditions in many areas over the second half of 2016. As a result of this and the higher prices for bulk commodity exports, there had been a trade surplus in the December quarter for the first time in almost three years. The current account deficit had narrowed to less than 1 per cent of GDP, the smallest deficit since 1980; the trade surplus was partly offset by a widening in the net income deficit as some of the increase in mining profits had accrued to foreign owners.
Household consumption growth, which had been relatively subdued in mid 2016, picked up in the December quarter, consistent with retail sales. Liaison with retailers suggested that recent trading conditions had been around average and household perceptions of their personal finances had also been around average.
The pick-up in consumption growth stood in contrast to the ongoing weakness in labour incomes, with the household saving ratio declining in the December quarter. Members noted that over the past two decades movements in the Australian household saving ratio had been much larger than those in other similar economies. One contributing factor was likely to have been that Australia had experienced a much larger terms of trade cycle than other developed economies with significant commodity exports. Differences in the evolution of household saving ratios across the states suggested that the terms of trade had played an important role in households' saving and spending decisions.
Indicators of labour market conditions had remained mixed. Employment growth had picked up in recent months and the unemployment rate had edged down to 5.7 per cent in January. Leading indicators, including job advertisements and firms' employment intentions, suggested that there could be some pick-up in employment growth in the near term. Members noted that although experience had varied across the states, in recent years employment growth had generally been stronger in the capital cities than in regional areas. Employment growth had continued to be concentrated in part-time jobs over the past year and wage growth had remained low, suggesting that the labour market had not been quite as strong as the headline employment and unemployment rate figures had indicated.
The wage price index had increased by 1.9 per cent over 2016, in line with the staff forecasts. Subdued wage growth appeared to have been broad based and was most pronounced in mining-related industries and states. Average earnings per hour in the national accounts had fallen sharply in the December quarter, as had the wage bill as a share of nominal GDP. Although quarterly movements in average earnings per hour are volatile, this measure of wage growth had also been subdued in year-ended terms, continuing to suggest there was very little labour cost pressure in the economy. Members noted that the recent experience of low inflation may also have contributed to lower wage outcomes and that other business costs, such as rents, are often linked to inflation. Members observed that although credit growth was lower than in previous decades, it had been faster than the subdued growth in household incomes.
Financial Markets
Members commenced their discussion by noting that global financial markets had been relatively quiet over the preceding month, with market participants focused on evolving expectations about the upcoming US Federal Reserve meeting, the new US administration's policies and national elections in Europe in coming months. Globally, monetary policy remained very stimulatory and financing remained readily available on favourable terms.
Financial market participants' expectations for an increase in the federal funds rate at the March meeting of the US Federal Open Market Committee (FOMC) had risen to over 90 per cent. This followed continued positive economic news in the United States as well as statements by FOMC members. Members noted the widely held expectations for no change in monetary policy settings in the euro area and Japan, compared with the general view earlier in the previous year that further monetary easing was in prospect in these economies.
In major markets, 10-year government bond yields remained above their lows of mid 2016, reflecting the run of more positive economic news since then, as well as expectations that the new US administration's policies would support US growth. Members observed that, although euro area government bond spreads to German government bonds had increased over recent months in response to political developments, yields remained relatively low by historical standards. Corporate bond yields in developed markets remained very low, with spreads to government bonds having narrowed markedly over the previous year, particularly for non-investment grade bonds. Australian government bond yields had been little changed over the month and the spread to US Treasury yields had also been steady at a low level. As in other markets, Australian corporate bond spreads had narrowed over the preceding year.
Global equity prices had moved higher over the prior month in response to continued positive economic data. In the United States, financial sector share prices had increased strongly following the new administration's orders for a review of financial market regulations. In the euro area, banks' share prices had declined following lower-than-expected earnings, which were largely related to loan-loss provisions. Over the previous year or so, Australian share prices had moved broadly in line with those in the rest of the world excluding the United States, where share prices had risen further. Recent Australian company earnings results had been generally positive, driven by strong profits in the resources sector.
The US dollar had been little changed over the prior month in nominal trade-weighted terms, while the euro had depreciated a little against the US dollar, in part reflecting political uncertainty around the upcoming national elections. The Chinese renminbi had been broadly unchanged over the preceding month against the US dollar and in trade-weighted terms.
Members noted that the People's Bank of China had tightened monetary policy a little and indicated that further tightening was likely in response to rising inflationary pressures and to address leverage, including of financial institutions. The tightening had flowed through to increased corporate bond spreads; recent bond issuance in China had been weak after a sustained period of strength, although yields had remained low. In emerging markets more broadly, financial market conditions had been favourable and flows into emerging market funds had resumed as the global economic outlook had improved since mid 2016.
The Australian dollar had been little changed over the prior month and had remained more than 10 per cent higher against the US dollar and in trade-weighted terms since early 2016, reflecting the significant increase in commodity prices since then.
Members observed that Australian banks' funding costs and average outstanding housing and business lending rates were estimated to have been broadly steady over recent months. Interest rates had increased slightly over prior months for some investor and interest-only housing loans.
Financial market pricing indicated that market participants expected the cash rate to remain unchanged at the March meeting.
Considerations for Monetary Policy
In considering the stance of monetary policy, members noted that recent data had continued to support a more positive outlook for growth of Australia's major trading partners than had been apparent a few quarters earlier. A number of indicators, including growth in global industrial production, global trade volumes and business sentiment, had improved. Recent data had also confirmed the pick-up in global inflation. Financial market data suggested that the probability of the Federal Reserve increasing the federal funds rate at the March meeting had increased markedly and there was no longer an expectation of further monetary easing in other major economies. At the same time, however, there continued to be significant uncertainty about policy in China and the United States and the implications for global growth and trade after 2017.
Domestically, there had been a significant increase in the terms of trade in the second half of 2016 and many commodity prices had risen further in recent months. Although mining companies were expected to increase their dividend payouts following the sharp rise in mining sector profits in the December quarter, a significant proportion of shareholders are non-residents, which would limit the flow-through to an increase in household incomes in Australia. However, the fact that the recent increases in commodity prices had been supported by a pick-up in global demand raised the possibility that commodity prices could be higher than expected, in which case the flow-through to the domestic economy could be larger than currently forecast.
The Australian economy had continued to make its transition following the end of the mining investment boom, supported by the low level of interest rates and the depreciation of the exchange rate since 2013. GDP growth had picked up in the December quarter to be around 2½ per cent over 2016, which was only a little below estimates of the medium-term potential growth rate of the economy. This outcome confirmed that the weakness in the September quarter was temporary. Looking forward, year-ended growth was expected to pick up gradually to be above its potential rate over the forecast period. An appreciating exchange rate would complicate the adjustment of the economy following the end of the mining investment boom.
Momentum in the labour market remained difficult to assess, but it was clear that spare capacity remained and there continued to be significant differences in labour market outcomes across the country. Domestic wage pressures remained subdued and household income growth had been low, which, if it were to persist, would have implications for consumption growth and the risks posed by the level of household debt. Spare capacity was expected to decline slowly as momentum in the economy built; wage growth and underlying inflation were expected to rise, but only gradually.
Recent data continued to suggest that there had been a build-up of risks associated with the housing market. In some markets, conditions had been strong and prices were rising briskly, although in other markets prices were declining. In the eastern capital cities, a considerable additional supply of apartments was scheduled to come on stream over the next few years. Growth in rents had been the slowest for two decades. Borrowing for housing by investors had picked up over recent months and growth in household debt had been faster than that in household income. Supervisory measures had contributed to some strengthening of lending standards.
Given all of these considerations, the Board judged that holding the stance of policy unchanged at this meeting would be consistent with sustainable growth in the economy and achieving the inflation target over time.
The Decision
The Board decided to leave the cash rate unchanged at 1.5 percent.
For more information, go to the Reserve Bank website <a href="https://www.rba.gov.au" target="_blank">here</a>.
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Minutes of March 2017 Monetary Policy meeting of the Reserve Bank Board

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GUEST OBSERVER
Not being able to pay loan repayments on time is one of the most frightening and common concerns of property investors, and rightly so.
Last year over 50,000 full-time jobs were lost in Australia alone, and with less than half of the country having private health insurance, many investors would be at risk of losing their portfolio if an unforeseen circumstance such as being fired or becoming ill, arose.
Preparing for situations that may result in a loss or diversion of income is essential when it comes to safeguarding your property portfolio. Although preparation is paramount, there are also processes that can be followed once unexpected financial difficulties strike that can offer assistance to avoid an investor having to sell.
To ensure investors are properly prepared prior to any unforeseen circumstances arising, see below:
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<li>
Make income protection insurance a priority. Often income insurance is considered too expensive or unnecessary; however as an investor it is vital to safeguard your portfolio. Although it will be an additional cost to pay monthly, if an illness or injury occurs, most policies will cover 80 percent of your income, meaning expenses incurred via your portfolio are still covered until you recover.  Also, in most cases income protection premiums are a tax deduction.</li>
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<li>
Research and ensure you have the policy which best suits you. Unfortunately there isn’t one specific income protection policy that suits everyone. To ensure you are choosing the most cost-effective and beneficial option for your situation, make sure you compare various options before committing to a policy. </li>
</ul>
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<li>
Aim to have a neutral to positive cash flow portfolio. If overall across a property portfolio the rents equal or exceed the costs and repayments, sustaining the portfolio will not be contingent on job income and will give peace of mind in the event you are forced to stop working.</li>
</ul>
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<li>
Create a buffer in your offset account. Once an investor has an offset account set up, you can keep surplus funds there which will give you two primary benefits:</li>
</ul>
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<li>Offset a portion of the interest being paid on the home loan.</li>
</ul>
<ul>
<li>If the property is negatively geared and you experience an unforeseen circumstance, these funds could be used to cover the weekly shortfall in rent.</li>
</ul>
If unforeseen circumstances arise that investors aren’t prepared for:
<ul>
<li>
Seek immediate expert counsel. If an unforeseen circumstance has caught you off guard and you are fearful for how this will affect your finances, arrange to meet with an accountant or financial planner immediately to implement a plan that ensures the obligatory loan repayment is able to be made.</li>
</ul>
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<li>
Advise the bank of the situation. All lenders have a financial hardship line, so take the time to work with them on a suitable payment arrangement so you keep on top of your repayments.</li>
</ul>
<ul>
<li>
Research what the current market rent is on each of your properties.  The average rent in each market changes constantly. Keeping up to date with the current rate ensures you are able to see where you can increase the rent for better cash flow.</li>
</ul>
Zaki Ameer is founder of Dream Design Property and can be contacted <a href="https://www.ddpproperty.com.au/" target="_blank">here</a>.
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How to safeguard your property: Zaki Ameer

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GUEST OBSERVER
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Federal government plans to restrict foreigners from buying more than half the homes or apartments in any new development will only discourage offshore developers from doing business in Australia.
The proposal pitched as one of a raft of possible measures in the May budget to help young Australians enter the property market would be a waste of taxpayers’ money and potentially disastrous for the economy.
Foreign buyers already faced a wide range of restrictions and fees when it comes to investing in property in Australia.
Enough is enough.
The roll-on effect if this latest proposal is included in the May budget could be an economic disaster for Australia. 
This is just a ploy from the Government to make it look like they are doing something for first home buyers but it will just discourage offshore developers from investing in Australia.
The foreign buyer restriction could be the last straw and could result in driving away foreign buyers investing in Australian property. Excessive surcharges and further restrictions on foreign buyers could also lead to fewer international students coming to Australia as well as a slower population growth and a rise in unemployment.
Most buildings developed by onshore developers rely on local funding which typically limits their sales to foreign investors at 15-20 percent of the total sales.
This was not the first-time foreign buyers have faced a limit on the dwellings they can buy in Australia.
Before 2009, there was a regulation that meant developers could only sell half of their new dwellings in any development to foreign buyers.
But this all changed when the Global Financial Crisis (GFC) hit and the then Labor government decided to abolish the foreign limit for off the plan properties. This meant foreign buyers could buy whole developments if they were marketed both locally and overseas.
 
Mark Mendel, is founder and chief executive officer of iBuyNew.com.au and can be contacted <a href="https://www.ibuynew.com.au/" target="_blank">here.</a>
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Foreign investor restrictions could be disastrous: Mark Mendel

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GUEST OBSERVER
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The unsolicited proposal for the development of the Martin Place metro station demonstrates the innovation that can come from the private sector. 
Macquarie Bank’s proposal to fund a new metro station by developing two commercial towers linked by retail arcades is good news for Sydney.
The tax payers do not have to fund the new station as a result of the development opportunities on adjacent sites.
The Martin Place station development follows a similar approach for the renewal of Wynyard station by Brookfield who own adjacent sites to Wynyard. In both cases it is the private sector that has come up with world class designs for the station infrastructure as well as for adjacent tall commercial buildings. 
Both of the new station proposals also include major retail outlets to activate the transport concourses which uses private sector expertise in making bustling public spaces.
Sydney is developing an extensive underground pedestrian network that still connects to natural light through the station redevelopments. This dry pedestrian network will be the perfect route for commuters during future wet weather like the current heavy rain that Sydney is going through.
The Urban Taskforce encourages the NSW Government to use the unsolicited proposal process in other locations where private sector innovation can deliver quality public domain outcomes.
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">here</a>.
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Private sector innovation provides quality public outcomes for Martin Place Metro

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A historic cable tram shed and workshop in North Melbourne that has been converted into a family home has been sold for $6.5 million.
It was bought three years ago for $3.35 million by car collector Chris Page because he wanted to grow his car collection.
He and his family moved from their Carlton home and renovated the historic 1918 building which had previously sold in 1978 at $155,000.
It is now a vast five bedroom home with a big garage downstairs as well as a street-facing mechanic business.
Page hoped that another like-minded car lovers will secure the property which was also advertised as a development site.
His hopes came true, as the buyer is a fellow car enthusiast who has a car collection.
The property first began as a cable tram shed in the 1920s before being converted into a tramways administration office and then finally into a Mediterranean grocer before being converted into the current home.
The reported pre-auction price indications were $5.5 million for the property that includes the mechanic business space.
The business owner would be happy to stay if the new owner wishes.
The property was offered through Jellis Craig agents John Morello and Simon Mason.
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Historic North Melbourne cable tram shed conversion sold

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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