<html><body>
<img src="https://counter.theconversation.edu.au/content/72966/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1">
GUEST OBSERVER
It’s always fascinated me, the place that architecture holds in the public imagination.
I don’t mean that regular people frequently get carried away about buildings, which they generally don’t. I’m talking about the heady, even intoxicating way that architecture as a practice, and architects as practitioners, appear in popular media: on TV, in movies, in books, in toys and games, and increasingly also in art galleries.
The idea of architecture, as a constructive kind of daydreaming, remains strikingly potent in fiction and pop culture. By extension, the idea of architects themselves as feverishly creative individuals, conjuring new worlds into being, remains (sometimes quite literally) seductive.
As a result, if I had a dollar for every stranger who has confided in me (often quite shyly, perhaps a little disappointedly) that they always wanted to be an architect, I would at this moment be retired and lying on a beach.
The construction is almost entirely fantastical. Ask any architect about their actual working life and they will tell another story altogether – albeit one with its own satisfactions and fulfilments.
But the fact that these ideas are fanciful doesn’t diminish their power; and to try and debunk them would anyway be missing the point: they are whimsies, wishful thoughts, romantic reveries. People really seem to want architecture to be this otherworldly, world-making activity. Or maybe they want to believe we live in a world where such wondrous transformations and constructions are possible. Whatever the reason, architects get an awful lot of good press.
(Actually they also get a fair bit of bad press: it’s an eternal irony that architects are on the one hand charged with keeping alive all our most treasured dreams about inspiring places and ways of living, and on the other condemned as out-of-touch prima donna aesthetes who make (ugly) art with other people’s money).
I’ve written about all of these issues before (forgive the shameless self promotion): about how such ideas manifest in childrens’ books and about how the popular conception of architecture seems to link it inexorably with play – framing architectural design as the exercise of childlike creativity; architectural drawings and scale models as dramatic props; architectural instruments as toys; and the work of architects as really a frolic: hardly work at all.
Then, a few weeks back, I saw yet another example of the phenomenon – and it got me thinking again.
Imaginary Architecture
Imaginary architecture was an interactive, “all ages” installation at the Melbourne Arts Centre, which ran for several weeks in January. Conceived by artist Lara Tumak, the exhibition was commissioned by the Arts Centre, following an earlier incarnation developed with ArtPlay – the City of Melbourne’s dedicated children’s cultural centre and program of art workshops.
The installation posed the question, “is it possible to create architecture out of nothing more than dreams?”
Of course in the real world the answer is, emphatically, no. But in the realm of art, and furthermore the realm of fiction and play, of fantastical exploration and imagined occupation, then anything is possible, and architecture becomes an incredibly rich field of conjecture and concoction.
The Imaginary Architecture installation was mounted in the dim downstairs of the Arts Centre, in a space that is as much theatre as foyer, and from the outside it looked like a pile of cardboard boxes. At intervals, mysterious sounds would emerge from within, and coloured lights would flicker and flash. 
A perimeter of large appliance boxes piled up to form a loose enclosing wall, which you entered through a cardboard arch, at the scale of a child, forcing adults to bow their heads. Within, smaller boxes were stepped and stacked all over.
Each of these little boxes had been contributed by a visitor who, having been encouraged to bring a biscuit or cereal or shoe box of their own, could make their own scene inside the box, using art supplies and materials provided. They could then choose to add it to the colony.
Attendees were each given a torch to shine through a specially-made aperture in the top of each box, revealing the scene inside.
The dioramas were inventive, and evidently mostly by children. Some had set a whole house within the box/room, others created outdoor scenes – dinosaur habitats, playgrounds, cemeteries. I saw a pet adoption centre, and a room full of hanging clothes. There were of course many bedroom scenes, with little cardboard kids inside, doing their own things. The attendant told me that some of the most popular had been undersea worlds, and party scenarios.
My own little boy worked diligently to make a paper campsite inside a shoe box - a person sleeping in a tent, under a blanket, while outside a river flowed by. He specified that it was night time, and that there was a “golden night-fish” in the river. It was very serious business.
Working your way around the installation, lining up your torch at the top and illuminating each little interior in turn, was like peering into the windows of innumerable strange and wonderful buildings. But even more than that, it was like peering into other possible realities.
The city as collective space
The installation, unassuming as it was, offered some profound observations.
First was its proposition about urbanity: to me it seemed a new take on showing the human life of a city (as opposed to, say, its infrastructure or built form). It framed the city as a collection of fantastical rooms: as the stacked accumulation of many lives, a colony of people each in their own separate spaces, each engaged in their own pursuits.
Like the lit windows of apartment buildings at night, each box thus represented a life taking place: separate, distant, unknown and yet familiar. This seemed a strangely compassionate vision of cities, of the commonalities of humankind, even alongside its multitudinous, mysterious difference. The vision is humanist without being nostalgic: this is how so many of us now live, in cities, this is how we co-exist in urban space, piled neatly one upon another.
Perhaps one of the reasons that architecture and cities are so frequently appearing in art galleries these days, as an instrument of interaction and “immersive” engagement, is precisely because they represent such collective activity. Like a coral reef or an ant colony, a city is the result of thousands and millions of individual agents, coming together in cooperation.
The interior life, not the exterior form, of architecture
Another refreshing aspect of the installation was its focus on the inner life of architecture – on rooms, and what goes on inside buildings, rather than their external form. With cardboard boxes as literal building blocks, the show was not about “signature” design or buildings as novel sculptural objects.
In this sense it was the opposite of another very popular recent instance of architecture in the art gallery - Olafur Eliasson’s The cubic structural evolution project. That work, recently reprised as part of Queensland’s Gallery of Modern Art’s 10-year celebrations, involves visitors making and remaking a city of white Lego, constructing teetering towers and elaborate, lace-like forms.
I saw that same work at the City Gallery Wellington in their intriguing 2015 show Demented Architecture, and it was amazing to see adults and children alike sitting down, with such commitment and concentration, to build a city together.
But while Eliasson’s work is clearly engaging, and very well loved by public audiences, Tumak’s Imaginary Architecture is another proposition altogether. It is a show about interior space and scenography and human action - the kinds of (both possible and impossible) things that people might conceivably do in a room.
We might even say it was a show about interiority: the quality of insideness that interiors have, and the sense that buildings have a secret and perhaps completely unexpected life going on within, which can rarely be read from the façade.
In this way, the interior becomes a metaphor for imagination itself. The inner life of rooms reflects the inner life of people. Dream homes are not only made from dreams, they are homes for dreams: places where whimsical ideas can take refuge from an increasingly frightening, turbulent world.
Maybe this is why architecture still holds such a particular place in the popular consciousness: it seems to provide a shelter and occasion for the play of the imagination.
Naomi Stead is Professor of Architecture, Monash University and author for The Conversation. She can be contacted <a href="https://theconversation.com/profiles/naomi-stead-108029" target="_blank">here</a>. 
 
</body></html>

jchancellor-FAypfDUnLy

Dream homes: Architecture and popular imagination

<html><body><div class="page" title="Page 2">
<div class="section">
<div class="layoutArea">
<div class="column">
GUEST OBSERVER
On a state basis, NSW is the standout, with private non-residential building work done rising since late 2012. 
Work done in the retail, office, aged care and entertainment have driven the increase. More recently the construction of new office space has slowed. 
After trending higher since 2011, non-residential building work has declined in Victoria over 2016. The recent decline has been largest in health and warehouses, although this follows strong growth previously. There has been a solid lift in work done in the retail sectors over 2016. Non-residential building work has also risen at a solid pace in Queensland. There has been a particularly large lift in construction in the tourism, education, health and aged-care sectors.
<a href="https://www.propertyobserver.com.au/images/2017/02/17/Screen%20Shot%202017-02-17%20at%208.41.55%20AM.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/02/17/Screen%20Shot%202017-02-17%20at%208.41.55%20AM.png" alt="">
Non-residential construction remains soft in both WA and SA. In WA, office building has more than halved as the effects of the mining downturn are still playing out. Despite the decline, office space remains oversupplied in Perth with vacancy rates increasing sharply since 2012.
In SA, construction in the commercial and industrial categories has declined over the past two years. However this is partly offset by a lift in health, tourism and education. 
In the public sector, non-residential construction has picked up a little in most States.
What’s in the pipeline?
The approvals data also shows us the value of building work in the pipeline. Private sector non-residential approvals have lifted strongly since September 2016 for all the broad categories. Approvals translate into actual work done with different lags depending on factors such as the size of the project and the industry. However most approvals translate to work done with a lag of between three and twelve months. So the recent lift in approvals means stronger building activity in 2017.  
Within commercial approvals both retail &amp; wholesale and office approvals have lifted strongly in the States of NSW, Victoria and QLD. Approvals for building in the “other” category have also picked up driven by rising approvals in accommodation, entertainment, health and aged care. NSW and Victoria are behind the increase, with approvals down in Queensland and flat in WA and SA 
Industrial approvals have lifted too, due to rising approvals in Victoria and QLD. In QLD there has been a lift in approvals for factories, warehouses and agriculture. In Victoria approvals for warehouses and agricultural have picked up.
Public sector non-residential approvals have also lifted in recent years. However approvals have turned down a little in recent months. This is largely due a drop in approvals in NSW and VIC 
Going further through the pipeline, the building work yet to be done data shows the estimated value of remaining work on buildings that have been started but not yet completed. The amount of building work yet to be done has been broadly steady over 2016.
The pipeline of commercial building work done has fallen as the amount of office building yet to be done has declined sharply. However there has been an offsetting lift in work yet to be done in the industrial and other category. Within the other category work yet to be done in accommodation and aged care have lifted sharply. And education has risen too. In the industrial category, work yet to be done in factories and agriculture has lifted. 
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" target="_blank">here</a>.
</div>
</div>
</div>
</div></body></html>

Private non-residential building work a standout in NSW: Gareth Aird

<html><body>
GUEST OBSERVER
For the last two weeks, I have been in the US visiting investors; hedge funds; corporates and officials.
I still have more meetings to complete, including with other Fed officials, but I would like to set out some assessments so far.
One debate is whether current pricing for interest rates; the USD; and the stock market is dependent on a successful fiscal policy outcome for Trump. Alternatively, pricing might be factoring in some economic reform (particularly banking) and not much more. The answer is probably that the share market is more optimistic about a successful policy outcome than the bond market. Bank deregulation (freeing up bank lending) would be stimulatory as long as confidence holds and, with the Fed now proclaiming that the US economy is at full employment, the higher bond rates are justified. However, if the share market needs a successful fiscal plan (centred on tax cuts) to hold current levels, then equities would be vulnerable to a marked sell off in the share market should the plan prove to be elusive.
The problems with a significant tax cut are manifest. It seems that there are around five Republicans in the deficit hawk camp who are firmly opposed to any policy that is not "revenue neutral" and five are "soft no's". The current controversy over Russia will only harden opposition within the party.
Failure to deliver a package by the summer would expose the initiative to a Democrat filibuster. The Ryan/Brady Plan, which was laid out last summer when the Republicans appeared unlikely to win the Presidential Election, does deliver a revenue neutral result (after assuming a fairly optimistic growth response to the plan) but it requires the Border Tax (featuring no tax deduction for costs of import_s and no tax on export sales). This would be an effective tax on the trade deficit. Such a tax would be hugely disruptive and is encountering significant opposition, we understand, from within the White House. Other "nasties" in the Ryan/Brady Plan are to allow interest cost or state tax deductions and no real allowance for retaliating moves from trading partners.
Another possible funding channel might be to impose large tariffs to help fund the tax cuts and achieve some of Trump’s protectionist objectives. Tariffs can be introduced by Executive Order without the need to go through Congress, although they may be subsequently challenged in the courts and by the WTO.
Overall, arbitrary tariffs are likely to be a more distortive mechanism than the Border Tax. However, that option, linked with some unpopular entitlement reform, might be back-end loaded and more modest tax cuts might constitute a plan that could be manipulated to “look” revenue neutral.
In such circumstances, the USD would rise further but the inevitable response from other trading countries would likely trigger a disruptive trade war – the recent encouraging lift in global PMI's and global equity markets would soon dissipate.
It was disappointing to hear generally, that infrastructure reform was a low priority well behind dismantling the Affordable Care Act, tax cuts, banking deregulation and trade. For instance, Trump could establish an infrastructure bank capitalised with $150-$200 billion in Federal funds. That would be funded by the repatriation of deferred foreign profits (taxed at 7.5% - 10.0%) and geared at 6x1 with a Federal government guarantee (the impact on the deficit would only be the funding cost). That would deliver on a key promise and probably gain full Democrat support along with enough Republicans to pass Congress. Such an initiative would encourage growth optimism and, if well managed, boost productivity expectancy.
Alternatively, there could be a national effort to privatise current infrastructure (for example, most toll roads are state owned) with a commitment that funds would be reinvested in other infrastructure assets (not used to fund other contingent liabilities of the state). Complex issues between city/local/state/federal governments would need to be resolved with a likely solution being that the Federal government would need to provide incentives to the cities and states to sell the assets.
There are solutions to the successful implementation of an infrastructure plan. If markets saw genuine progress in banking and other sectorial deregulation along with an infrastructure plan, the inevitable shock to confidence that is likely to occur in the summer if trade and unfunded tax initiatives dominate the agenda could be avoided.
So where does the Fed stand in all of this uncertainty? I expect that it will be comfortable to "skip" a March move until we see more clarity on these issues and, more import_antly, the impact such developments have on confidence and markets. For example, the Fed sees that "financial conditions" have eased due to narrowing credit spreads and a rising stock market despite higher rates and a higher USD. A reversal in markets would tighten financial conditions and associated drop in confidence would force a review of the growth outlook.
I also expect that the "asymmetric" approach to policy-setting is still a key majority view amongst FOMC members - better to err on the side of higher inflation than risk entrenched low inflation. With the slow response from wages to "full employment", there is little risk of getting too far behind the curve. On the other hand, I assess that the Chair now believes that the US has reached full employment and, therefore, the normalisation process should proceed (but with two hikes not three in 2017).
I remain comfortable with the June/December call for Fed policy in 2017.
What do investors think of all these issues for Australia? In short, the key channel will be Trump’s trade policies. Any indiscriminate large tariff or Border Tax would pressure China's foreign reserves and growth outlook. This would likely trigger a protectionist response from China, which while not impacting our resource exports, would most likely threaten our services exports to China.
My central thesis is that the Australian economy is likely to slow in 2018 due to a construction downturn and falling terms of trade. Commodity prices are likely to fall sharply under the weight of a supply response from Australian and Chinese (private) producers; an unwinding of speculative positions in China; and a slow-down in growth associated with a resumption of reform in China following the November Congress.
Downward pressure on the AUD will only intensify in the event of Mr Trump taking the “trade option”. 
BILL EVANS is chief economist of <a href="https://www.westpac.com.au/" target="_blank">Westpac</a>. 
</body></html>

Trump; trade and the FED: Bill Evans

<html><body>
GUEST OBSERVER
The insecurity of rental housing and unsatisfactory condition of many properties are receiving much-deserved media attention following the release of a national survey of tenants.
However, the stock response to the insecurity this revealed – longer fixed-term agreements – is not the answer. The solution to the failure of existing legal protections must take into account the structural features of the rental market, including the mobility of tenants.
The survey, commissioned by Choice, National Shelter and the National Association of Tenant Organisations, presents evidence of a widespread sense of worry, dissatisfaction and injustice on the part of tenants. According to respondents:
75 percent feel that competition for rental properties is “fierce”;
50 percent are concerned about being “blacklisted” on a tenancy database;
50 percent have experienced some form of discrimination;
30 percent live in properties requiring non-urgent repairs, and 8 percent require urgent repairs;
11 percent experienced a rent increase; and
10 percent reported an angry response after requesting repairs.
Residential tenancy laws cover many of these problems. That tenants are not successfully exercising their legal rights indicates a deeper problem of insecurity in renting. This problem is both structural and legal.
Small landlords and mobile tenants
Small landlords dominate the Australian rental sector: 72 percent own a single property each. Most (62 percent) make a net rental loss, so it is important to them that they can switch out of the sector when it suits them.
Research for the Australian Housing and Urban Research Institute (AHURI) indicates that 21% of landlords exit the sector within their first 12 months. By five years, 59 percent will have exited.
When landlords exit, they might sell to another landlord or an owner-occupier. Older research indicates that the transfer of rental housing into owner-occupation is a significant feature of the Australian market.
These dynamics cause structural insecurity for tenants. They also mean many landlords do not willingly tie up their sole asset in a long fixed term.
Despite the legal and structural insecurity of the sector, most moves by tenants are for their own reasons.
The ABS Housing Mobility and Conditions survey shows that tenants generally are very mobile: 81% have been in their current premises for less than five years. About half of moves between rental premises were for “personal reasons” (including family and employment reasons); 20 percent were to get more suitably sized housing; and 15 percent because of a termination notice from the landlord.
This degree of mobility suggests it is not in most tenants’ interest to enter into long fixed terms and the rental liability it entails. That’s not to mention the risk of being tied to a small landlord who is an unknown quantity and has no business reputation to protect.
Residential tenancies law in Australia
Each state and territory in Australia has its own Residential Tenancies Act. These differ in the details but are broadly similar in outline. All provide standard terms for tenancy agreements, processes for rent increases and terminations, and relatively accessible dispute resolution and eviction procedures.
Most do a decent job, on paper at least, when it comes to repairs and maintenance. Generally speaking, landlords are obliged to ensure rented premises are provided fit for habitation and maintained in a reasonable state of repair.
This means tenants are entitled to repairs even if the premises were in bad condition to begin with, and even if they pay relatively low rent. Tasmania is an exception: there, landlords are obliged to maintain premises in the condition in which they were first provided.
Similarly, each state and territory prohibits landlords from interfering in tenants’ quiet enjoyment of their premises. Most expand this right to protect tenants’ “reasonable peace, comfort and privacy”.
A key problem is that the ability of landlords to give notices of termination without grounds undermines existing protections. Philip Robins/AAP These are important protections, even though there may be scope to improve them – for example, by adding specific standards for safety devices and fixing particular legal defects like Tasmania’s. The great problem is that the ability of landlords to give notices of termination without grounds undermines the existing protections in every state and territory.
Without-grounds termination notices give cover to terminations by landlords for bad reasons, such as retaliation and discrimination. This means the prospect of receiving such a notice hangs over tenants when repairs and other issues arise.
What’s the solution, then, to high insecurity?
The legal insecurity of tenants might be improved in several ways.
Under the current laws of each state and territory, a fixed term prevents the landlord from terminating without grounds, and on other grounds such as sale or change of use of the premises, for the duration of the fixed term. It also prevents the tenant from lawfully terminating without grounds.
The idea of long fixed-term tenancy agreements is occasionally raised in the media and has caught the attention of the New South Wales and Victorian governments in their reviews of residential tenancies laws. Both those governments are considering how to facilitate long (five-year) fixed terms, including by altering other aspects of their laws – such as the protections about repairs.
But this approach presents problems of its own. Long fixed terms are unwieldy for landlords and tenants. Trying to make them more useful also threatens other valuable legal protections.
The present structures of the Australian rental sector call for different reforms.
We can reconcile the mobility of tenants with their sense of insecurity if we think of “security” as more than just the legal right to occupy. AHURI researchers have conceived of “secure occupancy” to encompass a person’s ability to make a home of premises and exercise housing autonomy. This includes the ability to confidently get repairs done in one’s premises, or keep a pet – and to freely decide to make a new home elsewhere.
This conception points towards a stronger reform agenda for improving security. Instead of long fixed terms, we should abolish without-grounds termination by landlords.
The law should instead provide a comprehensive set of reasonable grounds for termination, with notice periods and exclusion periods appropriate to each ground. This accommodates our present lot of small landlords, and can be done immediately.
Over a longer term, we should set our housing tax and finance policies to get a more stable sort of landlord. That would be one who operates at greater scale, has a reputation to protect and is less interested in switching out of the sector than in receiving a steady trickle of rents from secure tenants.
Chris Martin is a research fellow, Housing Policy and Practice, in the City Futures Research Centre, University of New South Wales and can be contacted <a href="https://www.be.unsw.edu.au/profile/chris_martin" target="_blank">here</a>.
</body></html>

Rental insecurity and why fixed long-term leases aren't the answer: Chris Martin

<html><body>
GUEST OBSERVER
Labour market statistics are among the most valuable pieces of data we analyse to gauge the health and strength of an economy. 
Trends in the labour market influence virtually every part of an economy. And they have a major impact on monetary and fiscal policy decisions as well as the functioning of society more generally. 
The latest ABS employment report allows us to draw a line under the sand on how the Australian labour market performed over 2016. It also provides a good stepping off point for thinking about how conditions in the labour market will evolve over 2017. 
In this note we take a frank look at how the Australia labour market performed over the past twelve months. We analyse key metrics like employment, unemployment, participation and hours worked. And we take a brief look at outcomes by state. We conclude by presenting our views on what we think is in store for the labour market over 2017 and what it means for policy. 
1. Employment 
We kick off with employment growth because job creation goes hand in hand with output growth (chart 1). Throughout 2016 average monthly employment growth was significantly lower than in was in 2015. The average monthly gain was 7.1k which is a third less than it was in 2015 (chart 2). As a result, annual employment growth in the year to December 2016 slowed to 0.9 percent compared with 2.5percent the previous year. And unsurprisingly, output growth eased over 2016. The latest national accounts put annual GDP growth at a below trend 1.8 percent in QIII 2016.
<a href="https://www.propertyobserver.com.au/images/2017/02/16/Screen%20Shot%202017-02-16%20at%2012.52.24%20PM.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/02/16/Screen%20Shot%202017-02-16%20at%2012.52.24%20PM.png" alt="" width="264" height="701">
 
In addition to soft employment growth, the composition of jobs growth has been suboptimal. Part-time employment was the sole driver of jobs growth over 2016 (chart 3). The ABS estimates that part-time employment lifted by 126k over 2016 while full-time jobs fell by 34k. To be fair, there was a pickup in full-time jobs over the December quarter which provides a glimmer of hope that things may be improving. But over the calendar year as a whole, the news was ordinary for those seeking full-time work.
To recap, a worker is deemed to be employed full-time if they are working more than 35 hours a week. Working between 1 and 35 hours a week means a worker is considered part-time. So a part-time worker could be working a significant number of hours or hardly working at all.
The latest figures show that a part-time employee works on average 17.0 hours a week. A full-time worker on average clocks up 39.2 hours. Having this data enables us to calculate full-time equivalent (FTE) employment growth and the news here is particularly sobering (chart 4). On our calculations, FTE employment growth was flat in the year to December 2016. In other words, the Australian economy created no FTE jobs over 2016. This should concern policymakers because growth in FTE jobs should be a lot higher (1 percent or above) to take into account new entrants into the labour market. It’s therefore no surprise that Australia has near record higher underemployment (see section 3). 
<a href="https://www.propertyobserver.com.au/images/2017/02/16/Screen%20Shot%202017-02-16%20at%2012.54.00%20PM.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/02/16/Screen%20Shot%202017-02-16%20at%2012.54.00%20PM.png" alt="">
2. Unemployment
<div class="page" title="Page 2">
<div class="section">
<div class="layoutArea">
<div class="column">
It’s fair to say that from where we were 18 months ago, the decline in the unemployment rate has bettered RBA and market consensus forecasts which previously had it stuck above 6 percent over 2016 and 2017. But before we get carried away, the unemployment rate moved a little lower over the year purely because of a fall in participation (see section 4). 
Australia has a strong population growth rate and generally needs to generate at least 15k a jobs a month to stop the unemployment rate rising. But over 2016 the economy was generating half as many jobs a month and yet the unemployment rate moved marginally lower. This is reconciled by a fall in participation. On our calculations, the unemployment rate would have risen to around 6.2 percent if the participation rate has remained constant. 
The slight downward trend in the unemployment rate has had a positive impact on job security concerns (chart 6). The WBC MI monthly gauge on unemployment rate expectations moved down a little over 2016 (a decrease indicates that respondents are less pessimistic about the labour market). This helps to loosen the consumer purse strings and since the spending of one person is the income of another, we also welcome the fall in job security fears. 
There is more work to be done, however, because the unemployment rate is still above the level we associate with full employment (around 5 percent) and job security fears are still quite elevated even though they have been receding. Further, the unemployment rate in Australia is higher than the equivalent rate in the US, Japan and the UK – three economies that Australia is generally assumed to be doing better against (chart 7). 
<div class="page" title="Page 2">
<div class="section">
<div class="layoutArea">
<div class="column">
3. Underemployment and underutilisation 
In the past the unemployment rate was deemed sufficient to measure labour market slack and therefore very little air time was given to the underemployment rate. But over the past two years it’s become increasingly fashionable to talk about the underemployment rate because it’s been rising while the unemployment rate has been falling. Underemployment provides a gauge of the proportion of people who are employed but whose labour is not fully utilised. That is, they have a job but want to work more and can’t find the work. 
The underemployment rate largely tracked sideways at around 8.4% over 2016 which is near its record high. This is undesirable and means spare capacity in the labour market is a lot higher than the unemployment rate implies. 
The sum of the unemployment rate and the underemployment rate produces the underutilisation rate which is the broadest measure of spare capacity in the labour market – it has been stuck above 14 percent for the past 18 months (chart 8).
<a href="https://www.propertyobserver.com.au/images/2017/02/16/Screen%20Shot%202017-02-16%20at%2012.55.16%20PM.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/02/16/Screen%20Shot%202017-02-16%20at%2012.55.16%20PM.png" alt="">
The number of additional hours of work wanted by underemployed workers has been stable at around two days (or a little under 15hrs) per week since the mid- 2000s. This compares with unemployed people who are on average looking for an additional 33 hours per week1. To put it in layman’s terms, at the end of 2016,  
8 1⁄2 percent of the Australian workforce wanted to work two more days per week than hey are currently working and 5 3⁄4 percent of the workforce were out of a job and wanted one. These numbers are too high and should concern policymakers.
There is a large pool of the workforce who either need work or want more work. 
Having the information on hours of additional work sought enables us to construct an adjusted underutilisation rate. To do this we weight the underemployment rate to take account of the average underemployed person seeking 15hrs a week work compared with 33hrs for an unemployed person. This measure provides the purist measure of spare capacity in the labour market. It moved a touch lower over 2016 from 9.7 percent to 9.5 percent but it is very high by our historic standards and presently sits above the level hit during the GFC. In fact, you have to go back to the late 1990s for the last time the adjusted underutilisation rate was so high.
The data shows that the economy is operating well below its capacity and there is an output gap. As we have covered previously, this has dragged down the pace of wages growth and inflation.
4. Employment to population and participation
The share of the Australian workforce in a job trended down over 2016. The employment to population ratio ended the year 0.4ppts lower at 60.9 percent (chart 9). This shift downwards basically reflects employment growth running below population growth. Normally that would be associated with the unemployment rate drifting higher, but a decline in the participation rate has allowed the unemployment rate to grind lower. A declining participation rate and flat employment to population ratio means that the downward trend in the unemployment rate is overstating the relative strength of labour demand.
The participation rate fell over 2016 for cyclical and structural reasons .
The cyclical force dragging the participation rate lower over the year largely reflects the discouraged job seeker syndrome. The participation rate fell sharply over 2016 in the mining states of WA and QLD (chart 10). And more so for men than women. The big downturn in mining-related investment has greatly reduced job prospects for workers in these states. Some workers appear to have given up looking for employment and have left the workforce. As a result, the participation rate has fallen. 
Structurally, the ‘grey army’ – those aged 65 and over – have continued to grow as a share of Australia’s population. This story will continue to play out over a long period of time and it will drag the participation rate down. Basically, the ageing of the population has increased the dependency ratio (the age-to-population ratio of those typically not in the labour force). This underpins the need for fiscal reform.
There is a misconception that Australia’s immigration policy will help to offset the impacts of the growth in the dependency ratio. It works in the short term, but it’s not a long term solution. As the Productivity Commission argued in April 2016, “the continuation of an immigration system oriented towards younger working- age people can boost the proportion of the population in the workforce and, thereby, provide a ‘demographic dividend’ to the Australian economy. However, this demographic dividend comes with a larger population and over time permanent immigrants will themselves age and add to the proportion of the population aged over 65 years.” In other words, it’s a policy more akin to kicking the can down the road. 
</div>
</div>
</div>
</div>
</div>
</div>
</div>
</div>
<div class="page" title="Page 3">
<div class="section">
<div class="layoutArea">
<div class="column">
<div class="page" title="Page 3">
<div class="section">
<div class="layoutArea">
<div class="column">
<div class="page" title="Page 3">
<div class="section">
<div class="layoutArea">
<div class="column">
<div class="page" title="Page 3">
<div class="section">
<div class="layoutArea">
<div class="column">
<a href="https://www.propertyobserver.com.au/images/2017/02/16/Screen%20Shot%202017-02-16%20at%2012.56.26%20PM.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/02/16/Screen%20Shot%202017-02-16%20at%2012.56.26%20PM.png" alt="">
5. Hours worked
Hours worked, as you would expect, is strongly correlated with output, consumption and employment growth. It is also a key input into examining productivity growth because we can measure output per hour (or unit of labour).
Monthly aggregate hours worked is quiet volatile so we look to the annual change in trend terms to best gauge what’s been happening in that space (chart 11). The 
news is not good. But it’s not surprising given what the other indicators of the labour market aforementioned are suggesting.
The data indicates that total hours worked was just 0.4 percent higher in the year to December 2016. This is weak given population growth is running at 1.4%. As such, hours worked per capita fell over 2016 to a multi-decade low (chart 12). In fact, you have to go back as far as the recession of the early 1990s for when per capita hours worked was as low as it is now. This trend is concerning because it means that unless there is a big lift in productivity, output per worker will be weak along with per capita income. It’s no wonder that there has been no meaningful improvement in Australia’s fiscal position given per capita hours worked has been falling. As we covered back in October, the performance of the Australian economy looks far from spectacular on a per capita basis.
Labour market by state
Back in November we flagged that Australia has a new “two-speed” economy that comprises: (i) NSW and Victoria (driven largely by Sydney and Melbourne); and (ii) the rest of Australia (see here). The evidence is in, among other things, the labour market.
There has been little in the way of jobs growth outside of NSW and Victoria (charts 13 and 14). Employment growth in the Garden State has powered along, driven in part by particularly strong population growth. Jobs growth has slowed in NSW, but Australia’s Premier State put on a lot of jobs in late 2015/early 2016 and the unemployment rate is close to the level we would associate with full employment.
On the other hand, the impact of the downturn in mining investment is particularly evident in the labour markets of Australia’s two resource-rich states. Employment growth in QLD is down a sizeable 1.4% through the year to December 2016 while it’s down by a similar amount in WA. Things have picked up in SA and employment growth is running at a respectable pace. Jobs growth in Tasmanian remains soft but things improved a little in the second half of 2016.
The unemployment rates across the states vary just like the employment data (chart 15). The unemployment rate has trended lower in NSW and sits at a healthy 5.0%. In Victoria, despite solid jobs growth, the unemployment rate ended 2016 unchanged on a year earlier at 5.9% because of a rise in participation. For the rest of the country, the unemployment rate sits at or above 6.0%. The trend is WA is particularly concerning given the unemployment rate has been moving north. It ended the year 0.6ppts higher at 6.7%. 
<div class="page" title="Page 3">
<div class="section">
<div class="layoutArea">
<div class="column">
<a href="https://www.propertyobserver.com.au/images/2017/02/16/Screen%20Shot%202017-02-16%20at%2012.57.29%20PM.png" target="_blank">Click to enlarge</a>
<div class="page" title="Page 4">
<div class="section">
<div class="layoutArea">
<div class="column">
<img src="https://www.urban.com.au/images/2017/02/16/Screen%20Shot%202017-02-16%20at%2012.57.29%20PM.png" alt="">
What can we expect in 2017?
Our frank assessment is that the labour market was soft over 2016. But there are tentative signs that things may be a little better in 2017, at least in the near term. More specifically, jobs vacancies and business surveys are pointing to a lift in employment growth.
The latest NAB Business Survey (January) showed a material jump in the employment conditions indicator (chart 16). This index has historically had a high correlation with the ABS labour force data. It currently sits at its highest level since 2011 which points to a near term lift in employment growth. The rise in the employment index is consistent with a lift in capacity utilisation which provides a source of optimism for business investment - an essential ingredient to long-run job creation. The ANZ jobs vacancies series also posted a solid rise in January (4.0%) and annual growth accelerated to its strongest pace since August 2016.
In addition to the business surveys, the lift in commodity prices over the latter part of 2016 is flowing through to export receipts which filters through to domestic  income. Higher income growth supports consumption which ultimately underpins the demand for labour. So there are some causes for optimism.
But equally, there are plenty of risks. The rate cut chamber only has a few bullets left and even then, the ability of monetary policy to stimulate genuine economic activity from here is questionable. Consumer confidence is still fragile and the geopolitical backdrop suggests that the global economic outlook contains more uncertainties than usual. So while the business surveys suggest that near term employment growth should improve, that picture can change quite quickly, particularly given that the improvement in business confidence and increase in capacity utilisation has yet to translate into actual investment.
</div>
</div>
</div>
</div>
</div>
</div>
</div>
</div>
<div class="page" title="Page 5">
<div class="layoutArea">
<div class="column">
<a href="https://www.propertyobserver.com.au/images/2017/02/16/Screen%20Shot%202017-02-16%20at%2012.58.11%20PM.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/02/16/Screen%20Shot%202017-02-16%20at%2012.58.11%20PM.png" alt="">
What does it mean for monetary policy 
In our view, trends in the labour market are the one to watch in 2017 for clues on the next move in rates. Market participants became fixated on the inflation data throughout 2016 because the RBA eased twice, in May and August, when core CPI came in below target. But since Governor Lowe has been in the top job, inflation has continued to print below target and yet rates have remained unchanged. Concerns around the further build-up of household debt and strong dwelling price growth mean that it would take a slowdown in employment growth (or lift in the unemployment rate) for Lowe to entertain the idea of taking the policy rate lower. 
We think that jobs growth will be sufficient to keep the unemployment rate crabbing sideways which should fend off calls for rate cuts. The risk, however, sits with easing over the next six months while ever inflation is below target. Labour market slack needs to be gobbled up before we start to see wages growth lift. And in our view, that’s some way off. As such, talk of rate rises is premature and we cannot see the case for the policy rate rising over the next year. 
</div>
</div>
</div>
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>.
</div>
</div>
</div>
</div>
</div>
</div>
</div>
</div>
</div>
</div>
</div>
</div>
</div>
</div>
</div>
</div>
 
</body></html>

Labour market trends the clue to future rate cuts: Gareth Aird

<html><body><div class="page" title="Page 1">
<div class="section">
<div class="layoutArea">
<div class="column">
GUEST OBSERVER
While many media outlets paint a rather bleak and uncertain future for the world economy, long-term bond yields in Australia finished 2016 higher than at any other point throughout the year.
This is even more impressive considering that the cash rate (which has a strong correlation with bond yields) was cut twice for a total of 50 basis points over 2016. Figure 1 shows how much long-term rates increased towards the end of last year and into 2017. Yields on 10-year Australian government bonds have increased by 74 basis points since September and nearly 100 points since the last interest rate cut in August. 
Table 1 shows the difference between yields on 10-year government bonds and 90-day treasury bills in basis points (1 point = 0.01 percent). 
This tells a similar story to the graph in Figure 1; a widening between short-term and long-term rates. The important point is that this widening from August until December last year is driven by an increase in long-term yields rather than a cut in short-term rates, as it was from July to August.
 
<a href="https://www.propertyobserver.com.au/images/2017/02/16/Screen%20Shot%202017-02-16%20at%2012.31.05%20PM.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/02/16/Screen%20Shot%202017-02-16%20at%2012.31.05%20PM.png" alt="">
Often if the yield curve becomes too inverted, the RBA is forced to cut short term rates to improve liquidity by incentivising banks and other institutions to lend out money. 
An increase in long-term yields is a dream scenario for the Reserve Bank, as this is a signal of higher investor confidence and a better outlook for the Australian economy. 
December was also the first month since September 2014 that the entire yield curve was positive (long term rates above medium, and medium term rates above short term). This is a sign that investors expect improving economic condition in the long run. It also shows investors’ belief that the economy will do well over the next few years.
</div>
</div>
<div class="layoutArea">
<div class="column">
The ASX Cash Rate Futures market pegs the chances of a decrease in official cash rates at the next meeting (7th March) at 5 percent. While this may seem appropriately low, it does highlight that even with a rising yield curve, investors still believe an interest rate cut is more likely than a hike in 2017. 
For more information from Secret Agent, <a href="https://secretagent.com.au/" target="_blank">click here</a>.
 
</div>
</div>
</div>
</div></body></html>

Rate cut more likely than hike in 2017: Secret Agent

<html><body>
The Turnbull government is planning to cut capital gains tax concessions for property investors, according to a report in The Australian Financial Review.
It says the policy backflip will be unveiled in the May budget.
"It is understood the policy being worked on within government would be confined to property investment, and not apply to all investments such as shares, as Labor's plan would," reporter Phillip Coorey wrote.
The options being worked on include following Labor in halving the 50 percent discount on capital gains tax to 25 percent, or reducing it by another amount. The other is adopting a phased model in which the discount would increase the longer the property was held. A property would have to be held for several years before the investor was eligible for the full 50 percent discount.
The suggestion has been wrapped up as seize the initiative on housing affordability but will provide revenue to help replace soon-to-be dumped budget cuts.
"Neither would the Coalition policy target negative gearing, as Labor is doing."
But Malcolm Turnbull this morning said the Government did not support the Labor Party’s plans to increase capital gains tax or negative gearing.
“We do not support the Labor Party’s plans to increase capital gains tax or indeed their plans to outlaw negative gearing.
"Our policy is… focused on encouraging investment and employment and the economic growth and opportunity that Australians need”.
“The only party that is an advocate for higher taxes is the Labor Party… We are a party of lower taxes, supporting investment, supporting employment, and bringing the Budget back into balance”.
</body></html>

Property investor capital gains tax mooted to rise in 2017 Federal Budget

<html><body>
Leslieville, the original Cooks Hill family home of the legendary Arnott's biscuit family has been listed for sale.
The <a href="https://www.realestate.com.au/property-house-nsw-cooks+hill-124611374" target="_blank">stately sandstone home</a> was built for William Arnott in the 1870's on the outskirts of Newcastle, next door to his Steam Biscuit Factory that opened in 1877. It was demolished in 1949.
Set on 633 sqm, the six bedroom home has been restored by its current owners. Eight original fireplaces are still in tact, as are the gardens and ornate lacework.
The home is described as one of the 'few sites remaining in NSW and possibly Australia assoicated with both the personal and business life of William Arnott' by the Office of Environment and Heritage.
Century 21 Novacastian agent Rob O'Brien has the listing that was priced between $2.45 million and $2.65 million on its 2016 listing.
William Arnott relocated from Scotland to Australian in 1848 when William was 21. He proceeded to work as a baker in Mayfield as well as try to get into gold mining.
He relocated to Newcastle in 1865 and opened a bakery on Hunter Street, which became well known for its biscuits, which began to ship to Sydney in 1882. 
The Arnott's tenure at the home ended in 1968 when they sold it to adult education group WEA.
</body></html>

Cooks Hill home of Arnott's biscuit family listed

<html><body>
<img src="https://counter.theconversation.edu.au/content/72867/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1">
GUEST OBSERVER
Moral panic over recent increases in visibly homeless people in central Melbourne has brought to the fore the critical shortage of affordable housing across the metropolitan areas of Australia’s wealthiest cities.
But living on the street is only the tip of the iceberg. Many more households are living in insecure and/or overpriced accommodation. Their plight is due to an undersupply of appropriately priced, sized and situated rental housing.
The Commonwealth government is reportedly planning to scrap the National Affordable Housing Agreement with the states. Without a clear alternative, the weakness of state policies, which lack clear targets and mechanisms for providing more and better affordable housing, adds to the problem. One state, Victoria, still doesn’t have an affordable housing strategy.
South Australia’s strategy has 15 percent inclusionary zoning as one of several mechanisms to achieve affordable housing targets. Western Australia provides regular progress updates on the regional targets of its Affordable Housing Strategy 2010-2020. Tasmania adopted a ten-year strategy in 2015.
New South Wales has had affordable housing policies in place since 2009. The NSW government has a new plan to build more social housing and improve existing stock. Queensland released a draft strategy in March 2016.
While these state policies vary in their success, Victoria does not even have a strategy to critique.
Victoria’s toxic planning legacy
No doubt Premier Daniel Andrews inherited several industrial-strength cans of toxic planning waste when Victorian Labor won office in November 2014. This legacy came not only from the Liberals, but from the earlier Bracks-Brumby Labor government.
Under the 2000s Labor government, the fourth new metropolitan strategy in four decades, Melbourne 2030, largely failed to stop sprawl. The main excuse for sprawl – that increased and largely unregulated housing supply would magically enable affordability – had become a sad joke.
As former Labor adviser Joel Deane’s book Catch and Kill shows, inability to respond to basic public concerns about planning and transport was perhaps the most significant factor in Labor’s 2010 election defeat.
If Labor had been ineffective in creating new affordable housing, the Liberals’ planning decisions between 2010 and 2014 were disastrous. Australia’s largest urban renewal site – Fishermans Bend – was drastically up-zoned from Industrial to Capital City (also known as “Anything Goes”). They did this without extracting a cent in added value from landowners towards affordable housing – or any other infrastructure.
Huge parts of the southeastern suburbs – Liberal strongholds – were essentially walled off from new housing, even though these had some of the best school and transport infrastructure to serve a rapidly growing population. Hundreds of job cuts meant the civil service lost experience and capacity to do better.
A long wait for action on affordable housing
The Victorian Labor 2014 election platform stated:
All Victorians have a right to safe, affordable and secure housing.
Yet in more than two years since its election, the Labor government has not completed any of the major reforms that would enable affordable housing.
Plan Melbourne’s “refresh” has not been published in its final form. The Residential Tenancies Act still has to be strengthened. The residential zone review hasn’t been completed.
Perhaps most disturbingly, we are still waiting for the results of the early announcement that the state treasurer was going to work with the planning and housing ministers to develop an integrated affordable housing strategy.
A new advisory body, Infrastructure Victoria, published a 30-Year Infrastructure Strategy in December 2016. “Social housing” (public and non-profit) was one of its top three priorities. However, compared with principles of “a good plan”, the affordable housing section of this strategy does not pass the test.
According to the literature on plan analysis, good plans should have seven elements: a clear vision; specific goals; a fact base informing alternatives; a spatialised sense of what goes where; a very specific implementation plan, with costs, timelines and responsible authorities; a monitoring and evaluation plan; and specific horizontal (across all parts of government, the private sector and civil society) and vertical (alignment between national, state and local government) integration.
Vancouver shows how to do it
The City of Vancouver’s Housing and Homelessness Strategy 2012-2021 is an example of an affordable housing plan that ticks the boxes. It has a clear vision embodied in the strategy’s subtitle:
A home for everyone.
The strategy sets specific numeric housing targets. These cover everything from supportive housing for homeless people with mental disabilities, to social housing, market rental and home-ownership options.
These targets are based on a robust and transparent analysis of housing trends across the city. While all subsequent neighbourhood plans are intended to achieve a mix of dwelling cost and size, there is a particular emphasis on locating supportive housing near areas with significant homeless populations.
The partnerships with other levels of government, private developers and non-profit providers are comprehensive. A new Vancouver Affordable Housing Authority has been established to coordinate these efforts. Since the report’s adoption, further mechanisms such as a community land trust have been established. Annual reporting against the targets is available on the City of Vancouver’s website.
In contrast, Infrastructure Victoria is an advisory body to state government, not an implementation agency. Its vision of a “thriving, connected and sustainable Victoria where everyone can access good jobs, education and services” begs the question of how progress towards these attributes would be measured.
Infrastructure Victoria does estimate an extra 30,000 affordable homes are needed over the next ten years. But it admits this figure is not well justified, due to a lack of good information on affordable housing deficits.
It recommends further work on an affordable housing plan with specific funding streams. However, this cannot really be expected to be the plan that “tackles [the] affordable housing shortage”, as its own website boasted of the draft report.
At best, Infrastructure Victoria’s plan is a baby step. It does clearly state the importance of social housing as critical infrastructure. It also begins to justify mechanisms that could achieve some scaling up of affordable housing outcomes.
But the public housing waiting list now has more than 35,000 names. About 120,000 households receiving Commonwealth Rent Assistance are still unable to afford living where they do. That includes 50,000 households in the lowest income bracket. And another one million new households are expected to move into Victoria within the 30-year timeframe of the infrastructure strategy.
This all means that baby steps will not be enough to prevent rapidly increasing homelessness.
 
Carolyn Whitzman is professor of Urban Planning, University of Melbourne and author for The Conversation. She can be contacted <a href="https://theconversation.com/profiles/carolyn-whitzman-9944" target="_blank">here</a>.
</body></html>

States drag feet on affordable housing, with Victoria the worst

<html><body>
GUEST OBSERVER
The premise of superannuation relies on trust in the system and trust in the government to protect Australia’s primary savings vehicle. Stability of legislation and consistency of policy. This is why we strongly support enshrining the objectives of superannuation in law, and why we are so adamant that the objectives must strive for dignified and secure retirement. Also, consumers need to be able to trust that the advice they receive from their advisors is accurate and in their best interest.
Today I want to focus on three main points.
First, I will briefly reflect on our significant achievements as an Association since establishment in 2003. Second, I will discuss ‘professionalism’ and last, I will touch on the tremendous opportunities that we have at this time.
Fourteen years ago, very few understood the SMSF sector, let alone its role in our nation’s future prosperity. Its survival was hanging in the balance and desperately in need of a ‘leader’.
It is now the largest sector in the superannuation industry. Since those dark days in 2003 when SMSFs were under real threat, the sector has had six-fold growth in funds under management and more than doubled in the number of funds. These are phenomenal statistics and something which each of you should be immensely proud. It is your doing.
Predictions by Rice Warner in fifteen years’ time have SMSFs continuing to be a standout leader in Australian superannuation doubling again in size and numbers.
As a direct result of the SMSF Association’s contribution to that growth:
ˇ      There is public recognition of the SMSF specialist and the SMSF profession. Others tried and failed, but we continue to grow.
ˇ      Career pathways from high school to PhDs exist through the Association’s specialisation programs and we now have our first graduates from the University post-graduate SMSF specialist programs.
ˇ      Our strong advocacy programs have improved access to superannuation and advice. We punch well above our weight.
Today, SMSFs are now integral to our superannuation system and national prosperity. They are too big to ignore.
The growth, and the importance of SMSFs and their communities can be tracked directly to your Association and your input.
Despite at time significant headwinds, we have never wavered from our Vision “to enable Australians to take greater control of their own destiny through a sustainable SMSF community”.
Our Mission has always been to ‘lead the professionalism, integrity and sustainability of the SMSF sector’. These enabled us to navigate the constantly changing environment in which we exist professionally.
There is no better example of this than last year’s far-reaching changes to superannuation in the May Budget.
Our strong advocacy ensured that concessional and non-concessional caps were not further reduced.
We maximised the benefits of the new rules, particularly for women, and SMSFs are now the best placed to adjust to new laws such as the $1.6 million transfer balance cap and flexible contribution rules.
And this leads to my second point.
The word “profession”, at its core, it’s an indicator of trust and expertise.
A ‘professional’ is someone who is independently qualified by a recognised body, governed by a code of ethics, committed to excellence, integrity, professional development and the promotion of the public good within their expert domain.
While we have advocated strongly and you have personally committed as a professional, we have left it to others and government to determine what our profession really looks like. Too often in the past, parts of our industry preferred to pull back towards the lowest common denominator instead of making the tough decisions to move forward into a new professional era.
Often fear, costs and efficient systems design were reasons for the focus on products instead of people and the building of a profession.
It is time to take control.
Research shows trustees number one motivation for being an SMSF trustee is control.
Our members are early adopters. But now as role models you must demand your peers and others in your supply chain join in the journey. Help them commit to their learning journey and membership.
I challenge you now to take control of your profession. I challenge you to be a leader.
It is your responsibility to continue building the profession by bringing everyone in the supply chain into your professional community, whether it be at the entry administration level or the elite strategic advice level. You should maximise and leverage opportunities at every level of your business.
Don’t settle for mediocrity because it is safe or what the government sets a baseline for you – be the cornerstone in creating your future profession. Take a good honest look at the opportunities before you.
You need to want co-regulation. Create a professional legacy for others to follow.
Raising competency and knowledge is not easy, nor is it quick, but it is necessary. To create trust, you, as advisors, accountants, auditors and administrators, must maintain standards expected and demanded of professionals.
It is absolutely necessary. To think otherwise is delusional. Truly professional advice will create trust with your clients. It will help them make better decisions.
It will lead to a better outcome for you and the SMSF industry.
It will set you apart in a crowded market.
To my last point, the future is in our hands and the opportunities held within that future are enormous.
Your clients have never been in greater need of your trusted professional advice.
As I mentioned, last year’s budget changes have provided the SMSF sector with unexpected but significant advantages, which if understood, can add such significant value to your clients. There has never been a better time to engage and build trust and confidence.
I know that due to the complexity of SMSFs, you as advisors will have opportunities to add meaningful value well into the future.
Technology and digital innovation will create new tools to assist those who commit to their own future professional development and help them stand out.
I also believe future advice will be part technology and part human. If you look to the US market you see the growing need for advice in retirement implementing a hybrid advice solution.
You and your peers are absolutely necessary to the SMSF industry, but the future will not again tolerate a product story.
You can be leaders.
In fifteen years’ time, just imagine what the industry will look like to efficiently advise, service and invest in the predicted $1.2T of funds under management in SMSFs. 
We must all continue to demonstrate that SMSFs can be a vehicle for people to take control of their destiny.
Others in our super sector are threatened by the power of SMSFs.
They continue to oppose us.
Others claim to be run for the benefit of members. SMSFs are run BY the members.
As your representative Association, we will continue to engender integrity and trust for consumers and government in this sector. It is critically important that we maintain and further develop a highly competent, well-regulated, competitive SMSF sector.
I am confident you will meet these challenges and opportunities in all their different forms. You have done so in the past and will continue to so, knowing 1.1m people have already placed their faith in us and knowing that this figure will also double.
We cannot let the future SMSF Trustees down.
John F. Kennedy said in 1962 about why it matters to go to the moon: "We choose now, not because it is easy but because it is hard…..this challenge is one that we are willing to accept, one we are unwilling to postpone, and one which we intend to win.”
We are ‘flying to the moon’ to achieve our future as professionals who are trusted by Australians.
I have trust in you.
I know you will accept this challenge and I know you will win.
Be proud of where we sit as an industry but be vigilant to ensure the SMSF industry fulfils its potential and its place in the Australian economy.
Andrea Slattery is managing director and chief executive officer, SMSF Association, and can be contacted <a href="https://www.smsfassociation.com" target="_blank">here</a>.
This is an excerpt of the speech given to the 2017 SMSF Association National Conference.
 
</body></html>

SMSFs integral to our superannuation system: Andrea Slattery

Developer <a href="https://www.apartments.com.au/developers/bottega-property-group">Bottega House</a> has secured council approval for its first Brisbane project - a $270 million luxury residential development on an absolute riverfront site in leafy St Lucia.&nbsp;

The 15-storey project, known as <a href="https://www.apartments.com.au/new-apartments/st-lucia-by-bottega-house-180-macquarie-street-st-lucia-qld-4067">St Lucia by Bottega House</a> , will occupy a prime north-facing site at 178-180 Macquarie Street, directly fronting the Brisbane River in the established inner-west suburb known for its rowing clubs, golf courses and sprawling University of Queensland campus.&nbsp;

St Lucia by Bottega House will feature a suite of amenities including dedicated wellness spaces, a mineral pool and cold plunge. The project has been positioned to attract affluent owner-occupiers seeking high-quality, house-sized apartments.&nbsp;

Bottega House has been set up by co-directors Nick Malloch, Louis Mennes and Craig Marsh.

Malloch said the project drew inspiration from its Brisbane River setting and leafy inner-west surrounds, while responding to the demands of discerning locals looking to transition from freestanding homes into apartment living.&nbsp;

"With an expansive river frontage and lush green surrounds, we knew we had to create something special that reflects the natural beauty of the location while offering residents masterfully crafted homes," said Malloch.&nbsp;

"Our intent was to complement the project's quiet, private setting by introducing residences that offer a calm retreat and sanctuary from the everyday. The result is a harmonious blend of architecture, interiors and amenity that emphasises wellbeing, comfort and beauty without excess."&nbsp;

Malloch added that project consultants had been carefully selected in alignment with Bottega House's commitment to care, quality and attention to detail. The design team includes architects <a href="https://www.apartments.com.au/architects/plus-studio">Plus Studio</a>, interiors practice <a href="https://www.apartments.com.au/interior-designers/mim-design">Mim Design</a> and landscaping by <a href="https://www.apartments.com.au/architects/urbis">Urbis</a>.&nbsp;

Three-bedroom apartments are expected to start around $5 millio. Selling agents Keenan &amp; Byrne said the pricing strategy for the project was anticipated to achieve upwards of $25,500 per square metre.&nbsp;

The project's development approval this week follows the success of Bottega House's inaugural Queensland project - a 22-storey collection of full-floor sky homes at Broadbeach on the Gold Coast which included the sale of a two-storey penthouse at a record price for a beachside residence.&nbsp;

St Lucia by Bottega House is expected to launch to market in November, with construction anticipated to be completed mid 2029.

[smartcode_project_cta:default project_id=151826]

Joel Robinson

Bottega House to make Brisbane debut with St Lucia riverfront apartment development

<a href="https://www.apartments.com.au/developers/sherpa-property-group">Sherpa Property Group</a> is advancing its affordable apartment model into Brisbane with the acquisition of another site at Cordelia Street in South Brisbane for $27 million.

Sherpa, which has a $1.7 billion pipeline across Southeast Queensland, intends to bring a cohort of apartments exclusively for first homebuyers into its proposed 186-apartment project to be built at 2 Cordelia Street.

The Sherpa model has already been incredibly well received from their Gold Coast projects, where Sherpa Group set aside a number of apartments exclusively for first homebuyers.

The new $320 million project marks Sherpa Group's second development in Brisbane, following its $255 million Symphony project, also on Cordelia Street, which is currently under construction.

Symphony will deliver 146 apartments across 28 levels, offering a mix of one, two and three-bedroom apartments. With 114 already sold, construction by <a href="https://www.apartments.com.au/builders/lps-group">LPS Group</a> is scheduled for completion in 2028.

[smartcode_project:default project_id=7574 project_image_fid=351654]

Sherpa Founder, Christie Leet, said the company was excited to be venturing into Brisbane for its second residential project.

“We’re big believers in the future of Brisbane as we lead into the 2032 Olympics and beyond,” Leet said.

“The success of Symphony has guided us into what will be our second project and we look forward to submitting our plans with council soon so we can deliver yet another quality project to the inner city residential market.

“Our Flourish model has been very well received both in Brisbane and the Gold Coast, and we’re excited to be able to offer some of these apartments again exclusively to first homebuyers to help get them into the property market.

“The model has been extraordinarily well received in our previous projects and it is something we are committed to moving forward.”

2 Cordelia Street will be designed by <a href="https://www.apartments.com.au/architects/hal-architects">HAL Architects</a> &amp; Finegrain and will include Sherpa’s signature residential amenities including pool, gym, recreation, wellness and work from home spaces.

The project will feature ground-floor commercial space, creating a vibrant amenity for residents and the surrounding community.

A development application will be lodged with Brisbane City Council in August on the code compliant site and will be launched to the market early 2027.

Sherpa acquires new site for second Brisbane apartment tower

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

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> 
&nbsp;

&nbsp;

&nbsp;

&nbsp;

&nbsp;

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.

[smartcode_project_cta:default project_id=152022]

Jonathan Chancellor

Editor's Picks

Have something to contribute?

Developments

New apartments

New townhouses

News