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GUEST OBSERVER
Treasurer Scott Morrison has outlined his vision for increasing home ownership at a speech to the Urban Development Institute of Australia.
The Treasurer acknowledged it’s hard for first home buyers to get into the Australian housing market and suggested a number of barriers to increasing housing supply. We asked an expert panel to analyse these and suggest what other ideas they might have for easing the problem.
What the states need to do
Nicole Gurran, Professor of Urban and Regional Planning, University of Sydney
The Treasurer’s comments about the planning system are out of date. A decade of state reforms to alleviate supply constraints have enabled the inner city apartment boom, and generated a steady supply of outer suburban land to build on. 
With housing construction at record numbers, state planning systems are clearly able to respond to rising market demand. Putting aside questions about the location and quality of new housing, increased construction hasn’t delivered cheaper homes, nor does the Treasurer seem to want that. In fact, he spends much of his speech cautioning about risks to the housing market from the removal of negative gearing or from an over-supply of apartments.
With our housing system so dependent on the private sector, the real question is how to keep construction running when the market cools. If Treasurer Morrison is truly concerned about affordability he should also be asking how to secure affordable homes as part of new development, without lowering values across the established market.
Providing incentives for developers to provide affordable homes is an obvious solution and one that the property industry itself has been lobbying for. This entails government support to drive investment towards affordable rental housing and to enable a new range of housing products such as shared equity and low cost home ownership.
At present, only around 2 percent of new homes are delivered by affordable and non profit housing providers. A larger affordable housing sector, assisted by government to draw on innovative sources of institutional finance, would be able to sustain new housing construction, irrespective of the market cycle.
The commonwealth should negotiate with states so that infrastructure investment and land release is closely linked to mandatory targets for including affordable housing. This way opportunities for affordable homes can be secured before land values rise. This will help stabilise housing production while boosting the supply of well-located and affordable homes. 
Cutting the cost of infrastructure to go with housing
Robin Goodman, Deputy Dean of Sustainability at the School of Global, Urban and Social Studies and Joe Hurley, Senior Lecturer, Sustainability and Urban Planning, RMIT
The planning, cost and provision of adequate infrastructure may add to the cost of housing. But the real cost of housing must include the ongoing costs of living. These will be greatly increased if there is little or no public transport, schools, services and jobs in anywhere near close proximity. 
The growing difference between expensive and unaffordable locations and prices on the urban fringe, shows people buying houses value infrastructure and services and the access to opportunities these provide. Morrison’s view of the costs of infrastructure as impeding housing supply, suggests we should spend less on infrastructure. Were we to do this we would be significantly adding to this growing inequality which will have implications for both liveability and prosperity. 
The way infrastructure is funded at the moment is partially through contributions from property developers and some of this will be passed on to the home buyer, increasing purchase costs. Governments fund some infrastructure directly however the current federal government has been more prepared to do this with freeways and roads, but less so with public transport and facilities. Housing affordability is a broader problem which involves the costs of both buying and renting and the ongoing costs of living within a house and a city. 
Rather than reducing the funding of infrastructure, or absolving developers of making some contribution towards it, the real issue is accurately targeting investment to where it most needed. The most urgent need for new outer urban areas is for adequate public transport to begin to give all residents more equal access to jobs and opportunities. 
Releasing more land and relaxing regulations
Steven Rowley, Associate Professor of Economics and Property, Curtin University Business School
The core driver of new housing supply is profit and that profit is a result of demand (the revenue from sales) and cost (the physical construction, land, finance, taxes). There are many barriers to this profit and hence new housing supply. A solution often put forward, and we heard again from the treasurer, is removing land use planning regulations that unnecessarily impede housing supply. 
Sounds sensible, but it’s no good just randomly releasing land and expecting development to occur. Policy makers must understand that more land does not necessarily lead to more development. For example, why would developers flood a local market with new product of a similar type; it will just reduce prices and hence profitability.
Infill development, where development occurs within existing built up areas, was barely mentioned in the speech. States are grappling with the challenges of increasing proportions of new dwellings on infill sites in an attempt to tackle urban sprawl. Large scale, coordinated infill projects can deliver open space and amenity, adding quality to our existing urban areas. This scale will be difficult to achieve without public sector intervention.
Challenges abound in the infill space and include community opposition, upgrades to existing infrastructure and allowing for housing diversity (attached houses and low rise apartments, not just high density towers). If the government wants to make a difference to the supply of dwellings, in places where many people want to live, they need to facilitate development at scale and deliver significant affordable housing contributions on government-owned land. This will not be popular with local communities and local council members, but is essential in delivering the diverse housing essential in our cities. 
Planning where to put more houses
John Daley, CEO of The Grattan Institute
Treasurer Morrison is right, planning is the biggest lever to make housing more affordable. Current rules make it reasonably easy to build apartments in the CBD – so that is what we’re getting. But it also makes it very difficult to subdivide and create extra residences in the middle rings of our capital cities, up to 20km out of the CBD.
It’s important that new supply is focused on the inner and middle rings (2-20km out of the CBD) of our large capital cities. New developments on the edge tend to be a long way from where additional jobs are being created. Over half of the net growth in jobs in Melbourne, Sydney and Brisbane in the last five years was within 10km of the CBD. 
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<h4>Grattan Institute, Author provided</h4>
Apartments in the CBD are never going to be enough to fill the demand for accessible housing – supply is limited by a very small area of land. There isn’t much governments can do about where employers decide to create jobs. But governments can set planning rules so that housing is built appropriately.
But unfortunately while Treasurer Morrison was spruiking the benefits of making it easier to subdivide and release land, he glossed over the impact on the prices of existing homes. And simultaneously he went out of his way to argue that reforms to negative gearing would both do nothing for housing affordability and lead to a crash in house prices.
Not all of these things can be true. By definition, if housing is more affordable, then prices are lower than otherwise. It would be more honest to recognise that changes to negative gearing will have less impact on home prices – and affordability – than to planning. On the other hand, changes to negative gearing will also reduce distortion in investment decisions, discourage excessive private sector leverage, and contribute to budget repair – outcomes which should all warm the cockles of a treasurer’s heart.
<div class="hover tooltip bottom">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>. Joe Hurley is senior lecturer, Sustainability and Urban Planning, RMIT University and can be contacted <a href="https://theconversation.com/profiles/joe-hurley-157161" target="_blank">here</a>.; Nicole Gurran is professor - Urban and Regional Planning, University of Sydney and can be contacted <a href="https://theconversation.com/profiles/nicole-gurran-759" target="_blank">here</a>. Robin Goodman is professor of Urban Planning, Deputy Dean, Sustainability and Urban Planning, RMIT University and can be contacted <a href="https://theconversation.com/profiles/robin-goodman-213975" target="_blank">here</a>. Steven Rowley, is director, Australian Housing and Urban Research Institute, Curtin Research Centre, Curtin University and can be contacted <a href="https://theconversation.com/profiles/steven-rowley-201914" target="_blank">here</a>.</div>
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<div class="hover tooltip bottom">All are authors for The Conversation.</div>
 
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Solutions beyond supply to the housing affordability problem

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GUEST OBSERVER
Dhaka, Bangladesh’s capital, moved from the world’s second-least-liveable city to the fourth-least-liveable city in The Economist’s latest liveability survey.
But cities are complex and measures of liveability often subjective. These rankings perhaps say more about the biases of global standards than about Dhaka itself.
This isn’t to suggest these measures do not have their uses. The very growth of the urban measurement industry points to the productive diversity of world cities. It also illustrates how cities are internally diverse, even contradictory, in character. 
This is especially true in Dhaka. On the back of high GDP growth, standards of living for Dhaka’s middle class have risen considerably. At the same time, informal settlements have also grown.
Based on Bangladesh’s 2014 census, it was calculated that 1.06 million people are living in slums in the Dhaka division. This number “has increased by 60.43% in the last 17 years”. Unofficial estimates of the number of slum residents are much higher, around 3.5 million.
Across the developing nations, around one-third of city residents live in slums. A 2013 Rockefeller Foundation report suggested that rather than focusing on a linear vision of “world-class cities”, planners and policymakers should adopt an alternative lens of “hybrid cities”, in which:
"… informal economies are directly integrated into city planning and priorities."
This requires inclusion of social movements and grassroots organisations that exist in and around informal economies. Secure housing, political recognition, legal protections and well-funded health and education programs are minimal measures for how this might be realised.
<h2>Illuminating shadow economies</h2>
As cities trumpet their liveability, creativity and greenness, informal settlement activities are often relegated to the shadows. The Rockefeller report suggests this is not only a problem for social justice or political representation, but also for economic growth.
A hybridised city looks to light up those areas where communities are already bringing together existing needs, new ideas, vigorous debate and innovative possibilities. John Thakara observes that informal settlements have a “DIY urbanism”, which has implications for urban design, planning and development:
"The shadow economy is more fragmented, and more reliant on social networks, than the formal one – but it is no less dynamic for that. Because social practices are a key part of this urban transformation, the tasks of design are mutating."
An integrated approach would recognise how these practices – and associated urban planning processes – respond inventively to the limits and loopholes of rapidly expanding cities. According to the Rockefeller report, such limits include:
"… information asymmetries in the labour market that prevent equitable access to jobs; and insufficient access to resources (for example, skills, finance and markets) that enable growth."
<h2>Kolorob: a participatory platform</h2>
Kolorob is an urban innovation initiative stemming from a multi-sectoral collaboration with the communities of two slums in Mirpur, Dhaka. Young people have been integral from the start as mappers and facilitators to collect data about services and involve communities in the application’s design.
A Bangla word meaning “clamour” or “noise”, Kolorob is aimed at amplifying the diverse voices and inventive practices of these informal settlements. It builds on the immediate strengths and networks of these communities to help meet their need for information about services, jobs and opportunities in a rapidly growing city.
The main features of the GooglePlay app include an interactive map about essential services in the two informal settlements. Kolorob also provides detailed information, a feedback system and a comparison tool.
We are exploring the expectations, experiences and reflections of community members involved in co-designing the app. Discussions with young people highlighted how they strongly value: 
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increasing smartphone penetration and usage in their communities;
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<li>
making the variety of local services more visible, providing in-depth detail about these, and using community feedback to enhance decision-making; and
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beginning to promote informal jobs to increase opportunities and autonomy for informal-sector workers.
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Our initial research into the co-design of Kolorob has found significant scope for participatory platforms to enhance access to existing services and employment opportunities in these areas. They also generate the potential for broader capacity-building by linking people to skill development and institutional support where available.
How such technology platforms can be maintained and leveraged in continued partnership with such communities is critical. This experiment connects with similar conversations in other cities and through other networks. One prominent example is the Platform Co-operativismmovement, which includes RefugeesWork in Germany, Sensorica in Canada and Enspiral in New Zealand. 
Such platforms work to make data collection and knowledge sharing more inclusive.
<h2>Connecting people and opportunities</h2>
A range of policymakers, politicians, researchers and community organisation representatives are now converging on the UN’s Habitat III conference in Quito, Ecuador. Key to the conference is the adoption of a New Urban Agenda. This aims to be:
"… an action-oriented document which will set global standards of achievement in sustainable urban development, rethinking the way we build, manage, and live in cities through drawing together co-operation with committed partners, relevant stakeholders, and urban actors at all levels of government as well as the private sector."
The role of information and communication technology in this invites not only close attention but novel collaborations. For instance, a 2015 report highlights several hurdles to overcome:
More public-private partnerships are needed to incubate new ICT startups to provide locally appropriate services.
Small, fragmented demonstration projects require national scale-up with business models addressing urban and rural areas.
As a platform, Kolorob is still in its early development stage. But there is interest from existing and new multi-sectoral partners in exploring the potential of scaling it up within Dhaka, as well as across other South Asian megacities. 
Rather than focusing on artificial solutions based upon improving world-class cities, we need to turn the spotlight to inclusive ICT platforms that contribute to both informal and formal economies. We can then begin to meet the wider social and political needs of hybrid cities.
Teresa Swist is postdoctoral research fellow, Western Sydney University and can be contacted <a href="https://theconversation.com/profiles/teresa-swist-172271" target="_blank">here</a>.
David Sweeting is institute associate, Institute for Culture and Society, Western Sydney University and can be contacted <a href="https://theconversation.com/profiles/david-sweeting-265851" target="_blank">here</a>.
Liam Magee senior research fellow, Digital Media, Western Sydney University and can be contacted <a href="https://theconversation.com/profiles/liam-magee-227430" target="_blank">here</a>.
All are authors for The Conversation.
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Design in the ‘hybrid city’: DIY meets platform urbanism in Dhaka’s informal settlements

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GUEST OBSERVER
While Australia’s energy market operator continues its investigation into South Australia’s recent state-wide blackout, there are important questions being asked. 
For instance, was extreme weather the only cause? Has South Australia replaced fossil fuels with renewables too quickly?
And is the Australia’s Renewable Energy Target (RET) too ambitious all together?
It is impossible to find answers without understanding how the energy market works, and how replacing one source of energy with another actually happens. 
<h2>How does the market work?</h2>
Most Australians (barring the Northern Territory and Western Australia) get their electricity through the National Electricity Market. 
Suppose all the energy users, at a particular day and time, switch on lights, computers, industrial machinery, washing machines, vacuum cleaners, traffic control equipment and more. Added together, they determine how much energy is needed or demanded at that very point in time. 
On the other side of the poles and wires, different independent electricity generators – thermal, hydro, wind, solar – are offering energy to the market, each at a price enabling them to recover costs and make a reasonable profit. This is called bidding. 
Contemporary electronic technology allows for the wholesale market to take electricity and bids every five minutes, and allocate amounts accepted from the successful bidders. And who are those successful bidders?
All current bids are ranked by unit price. Allocation starts from the lowest-price bidder, then the second lowest one, and continues on until the current demand is met. The last accepted bidder’s price becomes the spot market price, and allows other successful bidders to make more or less profit.
<h2>How do renewables affect the market?</h2>
The main incentive policy for wind farms in Australia is the Renewable Energy Target (RET), which legislates that 33 gigawatt hours of electricity must come from renewable sources by 2020. As part of the RET, large-scale renewable energy generators (solar and wind farms) receive credits (certificates) for electricity they generate, which are then purchased by retailers to meet the target. 
This market is separate to the National Electricity Market (NEM) and acts as a second income source for renewable energy generators.
With this in mind, we have modelled what happens when wind energy is phased into the market based on five minute electricity market data for several years.
The running (marginal) cost of wind generators is zero (because wind is free), unlike traditional thermal technology (which has to pay for coal and gas). Subsequently, wind generators recover their fixed costs and obtain profit in the difference between marginal cost and market price based on “more expensive” bids. 
In the long run, wind generation decreases the market price through the bidding process. So with an increase in the energy volume generated by wind, the traditional sources are pushed out from the market. The chart below illustrates this process for South Australia. 
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<h2><img src="/images/2016/10/25/image-20161019-20308-xt2ui.jpg" alt=""></h2>
Because their fixed costs can be recovered through the RET, wind generators can bid at near zero prices and completely eliminate traditional competitors. Therefore, wind generation can only naturally exist in the market if there are other, more expensive forms of generation to set the price. Otherwise wind farms could not recover their costs without the RET. 
This means that there is an optimal proportion of wind energy in the market, where more expensive thermal generators set the market price. 
If there is an optimum amount of wind energy in the market, this has important consequences for the RET. The target artificially increases the proportion of wind energy that can be sustained in the grid. While this may be the goal of the RET, without the incentive, wind capacity would eventually fall back to the market optimum. 
In practice, this would occur as wind farms reach their natural life of about 20 years and aren’t replaced. So the RET won’t maintain or increase wind energy in the market in the long term, unless the incentives continue indefinitely.
The current RET is legislated to 2030, with a target set for 2020. To encourage wind energy in the long term, it would be required, then, to support the RET by an ongoing financial inducement without a closing date. 
Without any financial inducement, wind farm developers would not increase capacity beyond the optimal point, and some thermal generation will continue to exist. Thermal generation can be completely excluded only if all the fixed costs of wind energy can be recovered through the RET. This is impractical and beyond the intentions of the policy. 
So as it stands, our modelling suggests the RET is not a good way to increase the amount of wind generation in the electricity network. However our conclusions are different for other renewable energy sources such as hydro, which also have near zero marginal costs but have much longer lifetimes.
Therefore, where and if possible, we need to use a mix of technology, rather than overemphasising wind generation technology.
<a href="https://theconversation.com/profiles/gennadi-kazakevitch-90201" target="_blank">Gennadi Kazakevitch</a> is deputy head, Department of Economics, Monash University and author for The Conversation. He can be contacted <a href="https://theconversation.com/profiles/gennadi-kazakevitch-90201" target="_blank">here</a>.
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Are wind farms messing up the electricity market?

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GUEST OBSERVER
People from cultural backgrounds where getting financial assistance from families is the norm are less likely to default on their mortgages, new research shows.
This includes those from South East Asian countries.
We also found in societies where the culture is to save more and for people to control their desires and instincts, the default on mortgages is lower. The findings are true both in relatively stable economic periods (2010-2013) and during a period of financial crisis (2008-2009).
In analysing the factors behind mortgage delinquencies, we used data on default rates from 42 developed and developing countries. These countries represent about 90% of the world’s gross national income and the world’s outstanding balance of housing mortgages in 2013. The rate of people who defaulted on their mortgage varied from 0.05% in Hong Kong to 17.05% in Greece.
Australia has a low default rate on mortgage, thanks to a strong level of national income, stable growth of the property market and a low unemployment rate. But it ranks high in all cultural dimensions that potentially lead to high default rate, this is accentuated during times of widespread economic hardship. So policymakers should be mindful of unfavourable economic conditions that may trigger default on mortgages. 
There are a number of explanations for our findings. Individuals who have a tendency to enhance or protect their self esteem, by taking credit for success and denying responsibility for failure, may overestimate their abilities make enough money to meet their long term financial obligations. They also have relatively weaker self-monitoring skills and may not budget well. 
Also, in societies where people are expected to be independent and only take care of their own interests, the rate of default on mortgage is higher. A lack of access to support from extended families and groups may make it difficult to pay back their mortgages during the period of financial hardship.
We found that borrowers in countries exhibiting higher degrees of pragmatism (e.g. having a long-term view to life) are less likely to default on their mortgages. People in these countries have a higher tendency to save. These people are also probably less likely to undertake risky mortgages and therefore default less on their mortgages.
In societies with a strong emphasis on enjoying life there was a higher rate of defaults. These people are more likely to follow their impulses and desires and so might not allocate their financial resources efficiently. They may spend more money than they can afford on leisure activities and have less savings to service their mortgages.
Not surprisingly we found countries with higher levels of household disposable income, lower unemployment rates and higher growth in house prices, would have lower default rates on mortgage. However, national debt rules, regulations and chronic and prolonged illness, aren’t significantly associated with defaults on mortgages in our sample countries. 
Housing mortgages account for about 75% and 50% of total consumer lending in the developed and developing economies, respectively. Our findings are of particular importance for multinational financial institutions because they hold mortgage loans as a large portion of their assets and therefore higher default rates may significantly lower their market values. 
Our results show that lenders should take into account the cultural backgrounds of borrowers when determining how likely it is that they will default. This is in addition to common economic factors, such as income, unemployment, and house prices, socio-demographic factors like divorce and race and health characteristics of borrowers. 
For example, multinational financial institutions could promote their mortgage products more in societies where people receive support from their relatives or members of groups. They could also focus on countries where people have a higher propensity to save for the future and are less interested in leisure activities. This could save these institutions a lot in terms of risk, but would also be much better for their customers.
Reza Tajaddini is lecturer in Finance, Swinburne University of Technology and can be contacted <a href="https://theconversation.com/profiles/reza-tajaddini-308121" target="_blank">here</a>.
Hassan F. Gholipour is lecturer in Economics, Swinburne University of Technology and can be contacted <a href="https://theconversation.com/profiles/hassan-f-gholipour-309444" target="_blank">here</a>.
Both are authors for The Conversation.
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Asian home buyers less likely to default on their mortgage: study

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GUEST OBSERVER
A QUICK OVERVIEW OF CHINA’S DEBT
International estimates of China’s debt levels vary widely. The Bank for International Settlements (BIS) estimated China’s debt at around 255 percent of GDP in Q1 2016. In contrast, the International Monetary Fund (IMF) recently reported a lower estimate – at around 225 percent of GDP. Both of these measures are based on China’s official Aggregate Financing data – which (as we’ve previously noted) captures only some of the country’s shadow banking sector – the major contributor to debt growth since 2012.
WIDE RANGE OF DEBT ESTIMATES 
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Our estimate of debt draws on a broader measure of shadow banking, combined with bank loans and corporate and government bonds. This produces a much larger value for debt– at almost 323 percent of GDP in Q2 2016 – a level that places China among the highest debt advanced economies – an unprecedented position for a still developing economy. Risks related to shadow banking are distributed unevenly across the financial sector – with the IMF reporting that smaller banks are far more exposed (in terms of capital buffers) than the big four state-owned banks.
The majority of the debt sits in China’s corporate sector, particularly State-Owned Enterprises (SOEs), which effectively ties the strategies of authorities in managing the debt to the broader challenges of SOE reform. Misallocation of debt to SOEs has contributed to excess production capacity in a number of sectors – particularly heavy industry – as well as expanding the debt-to-GDP ratio.
Standard &amp; Poor’s notes that China’s private sector leverage declined in 2015, while SOE leverage continued to grow. Median SOE debt levels in 2015 were six times earnings (EBITDA), meaning that a large amount of cash flow would be required to service debt, reducing the amount available for re- investment or debt reduction.
DEBT BY SECTOR 
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Earlier this year, the IMF estimated that the potential losses from the corporate loan portfolios of China’s banks could be around 6.9 percent of GDP – an estimate that the organisation described as conservative, given that it excluded potential additional risks related to shadow banking exposures.
WARNING SIGNS DON’T GUARANTEE
CRISIS
In many respects, China’s financial system is shielded in ways other countries are not – allowing credit to accumulate rapidly (near or above the BIS danger level since 2009) without yet enduring a crisis. Domestic banks are relatively well capitalised, maintaining an internationally high reserve ratio (as mandated by Chinese authorities) and have a strong deposit base.
This means that banks are less reliant on international wholesale funding – which has a tendency to be withdrawn during periods of high risk concerns – while remaining capital controls restrict the capacity of residents from migrating their wealth (albeit not completely prevent it, as capital outflows in recent years demonstrate).
That said, the stability of funding is beginning to weaken – with banks increasingly using the short term interbank market. According to IMF’s October Global Financial Stability Report, wholesale funding (primarily domestic interbank and repo markets) provided over 30% of total bank funding in 2015, up from around 18% in 2014, with smaller banks particularly reliant on these sources. The short term nature of this funding is mismatched to the longer term loans to corporates.
CHINA’S FUNDING STABILITY DECLINING 
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Despite the relatively shielded nature of the financial sector, these characteristics do not mean that China’s government can afford to ignore the debt issue (particularly as funding stability declines), but provides them with some time to appropriately address it. 
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HOW CAN CHINA ADDRESS THE GROWING 
DEBT RISK? 
In the short term, Chinese authorities should seek to control, rather than reduce the debt-to-GDP ratio – as severe cuts to credit necessary to produce the latter would likely lead to a sharp slowdown in economic growth. Standard &amp; Poor’s estimates that banks would require around RMB 11.3 trillion in recapitalisation if current credit growth rates persisted for the next five years. Controlling the debt issue will require increasing the efficiency of lending, particularly reducing the share of funding directed to SOEs. 
The IMF note a range of measures that Chinese authorities should consider – noting that a comprehensive response to the debt issue, while it is still manageable, offers the greatest chance for success. These include imposing harder budget constraints on SOEs, restructuring or liquidating highly indebted firms and managing losses across a range of parties, including the government where necessary. The IMF also recommends introducing social assistance for displaced workers and encouraging the entry of private firms across the economy. 
Plans to restructure SOEs have focussed largely on mergers and partial privatisation. Allowing firms to swap debt for equity (a policy approved by China’s State Council in early October) is one way to address the debt issue, but poorly performing, highly indebted firms are unlikely to be attractive opportunities for investors – particularly those still scarred by the 2015 share market bubble burst. Similarly there are concerns that banks could be forced to swap bad loans for equity in so-called zombie firms, achieving little in terms of restructuring. Harder decisions around the weakest SOEs – including liquidation – must be considered. This would require the development of a sound and consistent bankruptcy framework understood by all market participants. 
Greater competition is also a way to improve the efficiency of lending – particularly if banks are incentivised to lend to more innovative private sector firms. SOEs continue to enjoy preferential barriers to entry in a range of industries – including fast growing service sectors such as communications. Greater market access for private banks in the finance sector would likely contribute to reducing SOEs share of corporate debt – as profit rather than relationships would likely drive lending decisions. 
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CONCLUSION 
Warnings from the BIS and IMF have elevated concerns around China’s corporate debt levels. While the nature of China’s financial markets provides authorities with some additional time to address the issue, urgent reform to SOEs and increased competition across the economy will be necessary to avoid a medium term financial crisis. 
Gerard Burg is senior economist, Asia for NAB and can be contacted <a href="https://www.nab.com.au" target="_blank">here</a>.
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China’s authorities must manage debt to avoid a financial crisis

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GUEST OBSERVER
New York's ban on commercial short term lettings – and the advertising of non-conforming short terms stays – should provide a model for Australian jurisdictions.
New York state law prohibits apartment owners from <a href="https://www.reuters.com/article/us-airbnb-regulation-insight-idUSKCN12L0DY" target="_blank">renting units for less than 30 days</a> if they are not present, with fines of up to US$7500 forbreaches. On Friday, New York Governor Andrew Cuomo approved a law that also outlawed advertising of short-term stays on sites such as Airbnb that violated the existing law. 
The New York law follows similar crackdowns in cities such as San Francisco, Berlin, Paris and Amsterdam, while Dublin and London are also considering tightening regulations. 
The global move to curb commercial unregulated short-termaccommodation comes less than a week after a NSW Legislative Assembly Inquiry recommended a reduction in regulation, a move that has been strongly opposed by resident/strata bodies and regulated accommodation operators. 
It is ironic that at a time when city administrators across America and Europe are imposing major restrictions on unregulated commercial short-term accommodation operators that a NSW parliamentary committee should be advocating a softening of regulations
The overwhelming majority of listings for unregulated short term accommodation in Sydney are for full houses and flats involving no sharing, and increasingly the sector is being controlled by commercialoperators with multiple properties available 365 days a year. 
This is the same situation that has occurred in American and European cities and they have taken action to control the situation.
We call on Australian governments at all levels to take note and take action to protect residents, communities and regulated accommodation operators.
As in New York we want a very specific ceiling on the number of days an apartment or house can be let out on the short-term market and we want online distribution channels to be held responsible for ensuring these limits are not exceeded and that they advertise only properties that are compliant – meeting safety, insurance, body corporate, strata, council and state regulations. 
We are not against genuine ‘sharing’, but we believe there needs to be sensible and proportional regulations imposed on non-resident commercial property owners – especially multiple-property investors – who rent out full properties for short term stays.
Carol Giuseppi is chief executive officer, Tourism Accommodation Australia and can be contacted <a href="https://nsw.tourismaccommodation.com.au" target="_blank">here</a>. 
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New York bans commercial Airbnb-style short-term letting, now it’s time for Australian jurisdictions to follow suit

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The REIV has released its list of the to 10 most expensive suburbs across Melbourne.
Brighton tops the list given Toorak has had a reduced level of activity during the quarter.
Kew was in second place, just $17,000 behind Brighton's $2.17 million median.
<table style="height: 168px; width: 431px;" border="1" cellspacing="0" cellpadding="0"><tbody>
<tr>
<td width="43">
 
</td>
<td width="114">
Suburb
</td>
<td width="100">
Sep-16 Median
</td>
</tr>
<tr>
<td valign="bottom" nowrap width="43">
1
</td>
<td valign="bottom" nowrap width="114">
           BRIGHTON
</td>
<td nowrap width="100">
$2,170,000
</td>
</tr>
<tr>
<td valign="bottom" nowrap width="43">
2
</td>
<td valign="bottom" nowrap width="114">
           KEW
</td>
<td nowrap width="100">
$2,153,500
</td>
</tr>
<tr>
<td valign="bottom" nowrap width="43">
3
</td>
<td valign="bottom" nowrap width="114">
           CAMBERWELL
</td>
<td nowrap width="100">
$2,140,000
</td>
</tr>
<tr>
<td valign="bottom" nowrap width="43">
4
</td>
<td valign="bottom" nowrap width="114">
           BALWYN
</td>
<td nowrap width="100">
$2,100,000
</td>
</tr>
<tr>
<td valign="bottom" nowrap width="43">
5
</td>
<td valign="bottom" nowrap width="114">
           HAWTHORN
</td>
<td nowrap width="100">
$2,000,000
</td>
</tr>
<tr>
<td valign="bottom" nowrap width="43">
6
</td>
<td valign="bottom" nowrap width="114">
           MALVERN EAST
</td>
<td nowrap width="100">
$1,914,000
</td>
</tr>
<tr>
<td valign="bottom" nowrap width="43">
7
</td>
<td valign="bottom" nowrap width="114">
           GLEN IRIS
</td>
<td nowrap width="100">
$1,870,000
</td>
</tr>
<tr>
<td valign="bottom" nowrap width="43">
8
</td>
<td valign="bottom" nowrap width="114">
           BRIGHTON EAST
</td>
<td nowrap width="100">
$1,700,000
</td>
</tr>
<tr>
<td valign="bottom" nowrap width="43">
9
</td>
<td valign="bottom" nowrap width="114">
           BALWYN NORTH
</td>
<td nowrap width="100">
$1,675,000
</td>
</tr>
<tr>
<td valign="bottom" nowrap width="43">
10
</td>
<td valign="bottom" nowrap width="114">
           HAWTHORN EAST
</td>
<td nowrap width="100">
$1,666,000
</td>
</tr>
</tbody></table>
Only suburbs with a minimum of 30 sales were included.
Recent sales at around Brighton's $2.17 million median included a <a href="https://www.realestateview.com.au/real-estate/30-barkly-street-brighton-vic/property-details-sold-residential-10199707/" target="_blank">three bedroom John Friedrich-designed home</a> at 30 Barkley Street (pictured above) that fetched $2.1 million.
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Brighton's median tops $2.17 million: REIV

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GUEST OBSERVER
When it comes to investment in infrastructure, there’s no question that the NSW Government has work to do. Decades of under-investment in critical services has left a gaping hole, but recent State Budgets have at last announced substantial plans and funding for road, motorways and even more importantly, better public transport.
It’s good news for property as well.  
Infrastructure is vital to economic development and prosperity. Because it comprises the essential services that underpin growth, its development contributes substantially to employment, productivity and competitiveness.
It’s also a very good thing for property markets. Infrastructure upgrades usually result in strong demand in local markets, because property investors will pay more for locations with good infrastructure, or with infrastructure developments in the pipeline.  Transport infrastructure, in particular, both rail and road, makes areas more accessible, and therefore more attractive. This in turn pushes rental growth and occupancy levels in local commercial sectors.
At the same time, infrastructure projects are generally targeted at high growth areas, so this can be used by property developers and builders to estimate employment growth. They boost the local economy by creating new jobs and attracting more people to a precinct, which in turn leads to other, indirect benefits, such as increased consumer spending and the social benefits associated with community development.
According to the <a href="https://www.nsw.gov.au/nsw-regional-infrastructure" target="_blank">NSW Government</a> $20 billion is now being spent rebuilding NSW, and funding to some of the more critical projects has been accelerated. These include the Sydney Metro (City and South-west), the Parramatta Light Rail, Regional Road Freight Corridor and the Western Harbour Tunnel. A new underground railway station at the Barangaroo development in Sydney has also been announced.  In Sydney city, Stage 1 of the Sydney Metro is the $8.3 billion Sydney Metro Northwest is set to open in 2019. Stage 2, extending metro rail under Sydney Harbour and through the CBD is expected to be open by 2024.
For investors seeking to identify areas likely to grow more quickly than others, an understanding of where infrastructure development will be focused is key. Because the effect can be dramatic.  
In 2000, Centuria purchased two properties in Waterloo Road and Byfield Street in Macquarie Park, for $24 million. At that time, there was little infrastructure in the area, and public transport links in particular were poor. Centuria took the view that the area would benefit from planned infrastructure developments, including the Chatswood to Epping Rail Link and the expansion of the Macquarie Centre, both of which were completed. The Macquarie Park office precinct is now larger than the North Sydney office precinct, and there has been an ensuing strong demand for space.
In 2016, Centuria sold the properties for $101 million providing investors with a fivefold increase on their investment and an internal rate of return of over 20% - a significant total return given the sixteen-year life of the fund.
Chatswood is another example of a precinct set to benefit from improved infrastructure and transport links. Sydney’s North Shore office market is already a strongly performing market and in our view is set to perform more strongly still in the coming years. Commercial office space is being withdrawn for residential conversion, which is reducing supply while pushing rents up and vacancy rates down. We believe that the Metro currently under construction will continue to drive above trend growth over the longer term.    
In May of this year, we partnered with global investment manager BlackRock to purchase the best office building in Chatswood -  the Zenith office complex for $280 million. Our 50% stake is held in the unlisted Centuria Zenith Fund, and our forecast is for a 7.6 percent income return in the first year, increasing to 7.7 percent in the 2018 financial year. As for total returns over the life of the fund, we are confident that active management of the property by our specialist asset management team, which includes $30 million in capital expenditure to make the property best in class will result in excellent total returns for investors over the longer term.
Regardless of research or experience, there are no sure things in investment, in property or any other asset class. However, there are themes and trends which influence returns over time. The link between infrastructure spend and the performance of property markets is one of these.
Infrastructure provides essential services that drive economic growth, employment and productivity, and property in the areas where infrastructure is well-developed, performs better than property in other areas. Given the NSW Government’s focus on infrastructure investment, investors would do well to look at areas where money is being spent, and consider the long term possibilities and outlook for commercial property there. 
Jason Huljich is chief executive officer of unlisted property funds for Centuria, and can be contacted <a href="https://centuria.com.au" target="_blank">here</a>.
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NSW infrastructure spend boosts commercial property markets 

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Developer Greaton sold 60 out of 129 apartments in Centrale, one of two 17-storey towers planned for its $260 million Oxford Central development in Sydney's northern suburb of Epping. 
Prices for the one-, two- and three-bedroom units ranged from $525,000 to $1.6 million.
"This is an outstanding sales result," Greaton managing director Nicho Teng said. 
Greaton’s Oxford Central sales office was a hive of activity on Saturday with $50 million worth of prime Epping apartments sold within the first two hours.
The 60 apartments were sold in the first tower known as Centrale with over 90 percent going to local purchasers from Epping, The Hills district, Macquarie Park, Beecroft, Hornsby, West Ryde and Carlingford.
Nicho Teng said young families and professionals purchased most of the apartments, with over 80 percent being two beds.
Centrale comprises 7 one beds, 111 two beds, and 11 three beds.
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Greaton secure 60 off the plan sales at Oxford Central in Epping

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<img src="https://counter.theconversation.edu.au/content/67524/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1">
GUEST OBSERVER
The government will push states to remove unnecessary residential land use planning regulations that are impeding the supply of housing, Treasurer Scott Morrison will say in a major speech acknowledging the pressing issue of housing affordability.
Addressing the Urban Development Institute of Australia on Monday Morrison will say that improving affordability “right across the housing spectrum must … be a key policy goal for governments at all levels”.
Developing a sensible policy requires separation of the forces that have caused prices to increase, he will argue. “Of all the determinants of house prices in Australia, whether cyclical or structural, the most important factor behind rising prices has been the long running impediments to the supply side of the market.
"This not only relates to the volume of supply but also the responsiveness, flexibility, diversity and composition of that supply, as housing needs becomes more complex.
"A period of weak residential construction in the mid to late 2000s left many markets undersupplied, especially in NSW.”
While a large volume of construction is now coming through and much more is anticipated, not all is in the right place or of the right type, Morrison will say.
“Whilst Sydney, Melbourne and Brisbane have record supply, most of this is in the inner city apartment market … Unfortunately, we are still seeing a muted supply of detached housing in other parts of our cities.”
Morrison will list supply side constraints as including “complex land planning and development regulation; insufficient land release; the planning, cost and availability of infrastructure provision; transaction and betterment taxes; public attitudes towards urban infill; and, for Sydney in particular, physical geographic constraints.”
State governments could do a lot to improve planning processes and the provision of infrastructure, he will say.
He will instance developers telling Treasury about increasing development times including one case on Melbourne’s outskirts where it took 12 years for a project to go from land acquisition to a new suburb.
“This is how long it took for the land to be rezoned and for the developer to meet the onerous hurdles required in construction.
"While some construction standards are important for maintaining the safety and quality of newly constructed dwellings, some of these hurdles sounded almost farcical. For example the Melbourne developer wasn’t permitted to design the shopping precinct of the new suburb they had built because the Victorian government required that their own architects did the work (and at their own pace).
"So even though there have been some signs of a supply response in recent years, particularly in inner-city apartments, more needs to be done to ensure that supply increases more broadly – both in terms of location and type of dwelling – and that the roadblocks to this increased supply are removed.”
This will be a focus of Morrison’s discussions at the next Council on Federal Financial Relations in early December.
The proportion of Australian households owning or paying off their home has fallen from 71% to 67% over the past 20 years.
The proportion of home owners aged over 45 with a mortgage has increased significantly in that time.
“It’s taking longer for people to own their own home and be free of their mortgage. This trend has the potential to undermine retirement incomes, with superannuation cashed in on retirement to clear the mortgage or having mortgage costs eating into retirement income or undermining their ability to save more as they approach retirement,” Morrison will say. Housing un-affordabilty thus has a “cascading impact”.
Morrison will point to the “real pinch point” – being able to get into the market in the first place.
“As house prices have risen relative to incomes, this is making it more difficult for first home buyers to keep up and save an adequate deposit,” he will say.
“The proportion of home loans that are being provided to first home buyers was 13.4% in August 2016, the lowest point since February 2004 and well below its long term average of 19.4%.
"In aggregate, across the country, a 20% deposit on the nationwide median home loan is more than 100% of annual household disposable income. This is slightly above the decade average, but well above the 60% levels that were the norm prior to 2000,” Morrison will say.
“The market is getting away from people. No matter how hard they work or save or even earn, they are finding it harder and harder to get into the market.”
But “the key to addressing housing affordability is not to crash the housing market. Rather the objective is to have housing policies that mitigate the artificial inflation of asset prices, ensure that supply is not restricted from responding to genuine demand and that enable homebuyers, through their own efforts, to make more rapid progress to being able to enter the market”.
On the issue of the looming glut in inner city apartments, Morrison will say that “notwithstanding some regional risks, the current construction cycle would likely have to run-up faster and continue for longer before over-supply became a nationwide macroeconomic risk.
"That is not to say that the size and length of the current construction boom won’t warrant attention in the coming months and years. Policy makers are very cognisant of the risks and have been doing something about it.”
Michelle Grattan is professorial fellow, University of Canberra and author for The Conversation. She can be contacted <a href="https://theconversation.com/profiles/michelle-grattan-20316" target="_blank">here</a>.
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Morrison targets state planning regulations as problem for housing affordability

<a href="https://www.apartments.com.au/developers/skymark-group">Skymark</a>'s boutique Cronulla development Solis has secured a 10-year Latent Defects Insurance policy through Resilience Insurance, providing buyers of the 16-residence building on Ewos Parade with structural and waterproofing protection that extends a decade beyond the building's completion.

Currently under construction and due for completion in late 2027, <a href="https://www.apartments.com.au/new-apartments/solis-cronulla-8-ewos-parade-cronulla-nsw-2230">Solis</a> is one of a small number of new developments in the Sutherland Shire to carry Resilience LDI coverage, a distinction that carries increasing weight as buyer confidence in the off-the-plan sector continues to be shaped by how developers stand behind their product.

Latent Defects Insurance, which entered the Australian market in 2022 when Resilience Insurance was approved to offer the cover, protects buyers against major structural or waterproofing defects for ten years post-completion. Unlike traditional statutory warranties, it operates as a first-resort policy, if a covered defect arises, the insurer responds directly, without the buyer needing to pursue the builder or developer through a lengthy claims process.

Resilience Insurance CEO Corey Nugent has noted that the product addresses something fundamental to the new apartment market.

"The overarching feedback from prospective buyers in the new development space is that they want more confidence and assurances around the quality of the build," Nugent says.

"Resilience Insurance Latent Defects Insurance not only gives them complete peace of mind for 10 years, but it shows the developer they are buying from is standing by their product."

[smartcode_project:default project_id=150499 project_image_fid=370898]

For Solis, the Resilience LDI policy adds a meaningful layer of accountability to an already considered project. The development comprises nine two-bedroom and seven three-bedroom residences, including one dual-level three-bedroom apartment, across a five-storey building on Ewos Parade, positioned between Shelly Beach and South Cronulla.

Garden apartments connect directly to private landscaped courtyards, while upper-level homes capture beach views to the east from level four and above.&nbsp;

All 16 residences include at least one balcony or courtyard, and select apartments on the upper floors feature bar areas and secondary flexible living spaces.

Hiba Sander, Managing Director of Skymark, says Solis offers a rare balance, nestled between the quiet beauty of secluded beaches and the lively charm of South Cronulla's esplanade.

"It's a place to choose your pace and live gracefully, seaside'," Sander says.

[smartcode_project:default project_id=150499 project_image_fid=370900]

The architecture, designed by <a href="https://www.apartments.com.au/architects/ida-design-group">IDA Design Group</a>'s Michael Trinh, draws from the natural erosion patterns of <a href="https://www.apartments.com.au/developments/cronulla-nsw-2230">Cronulla</a>'s sandstone headlands, translating the organic forms of the coastline into soft curves, pavilion-style massing, and a material palette chosen for longevity in a salt-tinged environment.&nbsp;

Textured natural stone, soft renders, and timber-look battens reference the tones of the surrounding cliffs, while the building has been oriented to maximise natural light and passive ventilation, with primary living spaces facing north and east to capture morning sun and sea breezes.

"At Solis, our aim was to create architecture that feels quietly confident, grounded in natural materials like stone and timber, and elevated by light and landscape," Trinh says.&nbsp;

"The buildings are designed to sit gently within their coastal surrounds, with expansive glazing and abundant greenery creating a seamless dialogue between inside and out."

[smartcode_project:default project_id=150499 project_image_fid=370897]

Interiors by <a href="https://www.apartments.com.au/architects/hot-black">Hot Black</a> carry the same material language through to every room. Kitchens feature integrated Gaggenau appliances, sculpted stone benchtops, and Lo &amp; Co joinery, while bathrooms feature natural stone, timber, and brushed metal finishes.&nbsp;

Hot Black Founder and Design Director Sophie Safrin describes the intent as one of considered restraint: "At Solis, every detail has been thoughtfully considered to create a timeless coastal retreat, calm, refined, and effortlessly liveable. From natural finishes to seamless indoor-outdoor flow, Solis offers a quiet elegance that's deeply connected to its surroundings.

The landscape, designed by Julian Brady of <a href="https://www.apartments.com.au/landscape-architect/sitedesignstudios">Site Design Studios</a>, treats green space as an integral part of the resident experience rather than an afterthought.&nbsp;

"Gentle curves and layered native plantings mirror the ebb and flow of the ocean," Julian Brady says, "creating a serene connection between architecture and place."&nbsp;

Coco Republic has provided bespoke furniture packages tailored to the project's coastal palette.

[smartcode_project:default project_id=150499 project_image_fid=370899]

Skymark has an established track record in the Sutherland Shire, with a portfolio spanning Cronulla, Woolooware and Burraneer that includes Isla, Sylva, Bask, Shells, Sula and Mist. Securing LDI on Solis reflects a broader shift in how the developer is positioning its buildings to buyers, at a time when Resilience Insurance expects the policy to become mandatory in New South Wales by 2028.

Sales at Solis are launching soon through Ray White Projects, with an official event scheduled for 11 June. Enquire for more information.

[smartcode_project_cta:default project_id=150499]

Joel Robinson

Skymark takes out 10-year Resilience Insurance LDI at Solis Cronulla

Investors may soon find themselves with fewer reasons to buy established property and more incentives to look towards the new apartment market.

Proposed changes to negative gearing and capital gains tax concessions would see new and off-the-plan apartments retain access to the tax benefits, while established properties would miss out, creating a clear advantage for buyers purchasing newly built housing.

The policy direction aligns with what many developers have been saying for several years. Australia needs more housing supply, and governments are increasingly looking for ways to encourage investment into new stock rather than existing homes.

The challenge for investors is that suitable product is becoming harder to find.

For much of the last decade, one-bedroom apartments were the cornerstone of investor demand. They offered a lower entry price, strong rental appeal, and were a common feature across most apartment developments.

Today, the development pipeline looks very different.

Across both New South Wales and South East Queensland, developers are increasingly targeting owner-occupiers and downsizers, delivering larger two, three and four-bedroom apartments in response to changing buyer preferences. While one-bedroom apartments still exist, they now form a much smaller portion of many new projects.

That shift has created a shortage of investor-friendly stock, particularly in well-located projects close to transport, employment hubs and lifestyle amenity.

At the same time, rising apartment prices have pushed many new developments beyond the reach of traditional investors. On the Gold Coast and across South East Queensland, it's becoming increasingly difficult to find new apartments priced around the $1 million mark, particularly those offering strong rental fundamentals and long-term growth prospects.

We've rounded up four new apartment developments where investors can still secure a foothold in the market for around $1 million or less.

<h2 data-end="1140" data-start="844">Flourish Soleira</h2>

<h2>Priced from: $1.07 million</h2>

Popular Palm Beach developer Sherpa is soon to officially launch its newest local apartment development, Flourish Soleira.

The one-bedroom apartments in the building were only offered to first home buyers rather than investors, and all of those have been snapped up. The two-bedroom apartments will start from $1.07 million, and the three-bedrooms, still a good investment given the popularity of Palm Beach for owner-occupiers, starting at $2,045,000.

&nbsp;

[smartcode_project:default project_id=150017 project_image_fid=370964]

Flourish Soliera will comprise 153 apartments across two buildings, connected by a skybridge, the first ever delivered in the suburb.

True to Sherpa's booming Flourish brand of apartment projects, Flourish Soleira will have extensive rooftop amenity across both buildings including a&nbsp;wellness centre with gym, work from home, yoga, pilates, a&nbsp;heated pool, private dining rooms, pizza oven and barbecues, basketball court, and golf simulator.

<h2>Corallo, Palm Beach</h2>

Priced from: $841,500

Nearby Flourish Soleira is Changfa Group's beachfront-inspired Corallo development. They still have some one-bedroom apartments remaining, priced from $841,500.

The 105-apartment project on Palm Beach Avenue is otherwise dominated by larger two and three-bedroom residences, many of which are aimed at owner-occupiers and downsizers.

[smartcode_project:default project_id=112194 project_image_fid=808]

For investors, the appeal lies in Palm Beach's continued transformation from a laid-back beachside suburb into one of the Gold Coast's most sought-after residential markets. Residents at Corallo will be within walking distance of Palm Beach's surf beaches, the recreational amenity of Tallebudgera Creek, and the increasingly popular collection of cafes, restaurants and boutique retailers along the suburb's central dining precinct.

<h2>Corner House, Stones Corner</h2>

<h2>Priced from: $880,000</h2>

One of only two Brisbane apartment developments to make the list with prices under $1 million is DeMartini Fletcher's Corner House development in Stones Corner.

One-bedroom apartments start from $880,000 within the 88-apartment development, providing investors with exposure to one of Brisbane's most established inner-south locations.

[smartcode_project:default project_id=149098 project_image_fid=330594]

Stones Corner has long been supported by strong tenant demand due to its proximity to major employment and education destinations. The suburb sits less than five kilometres from Brisbane's CBD and is within easy reach of the Princess Alexandra Hospital, Greenslopes Private Hospital, Queensland Children's Hospital and several university campuses.

The project's location within a walkable urban village environment, surrounded by retail, dining and public transport infrastructure, continues to attract both professionals and healthcare workers seeking accommodation close to work.

Parkdrive Apartments, Chermside

Priced from: $749,000

The most affordable apartments across Brisbane's new and off the plan market are in Chermside where developer AusDev is selling one-bedroom apartments from $749,000, and two-beds from $929,000, at its recently launched Parkdrive development.

The development is strategically positioned in one of Brisbane's largest employment and retail precincts, placing residents within easy walking distance of Westfield Chermside, The Prince Charles Hospital, St Vincent's Private Hospital Northside and the suburb's major bus interchange.

[smartcode_project:default project_id=152125 project_image_fid=363782]

Already under construction and scheduled for completion in early 2028, Parkdrive benefits from Chermside's ongoing evolution into Brisbane's northern metropolitan centre. The suburb continues to attract significant public and private investment, supporting population growth and underpinning long-term rental demand.

For investors focused on yield and tenant depth, the combination of healthcare, retail and transport infrastructure within close proximity provides a strong foundation for occupancy and rental performance.

Investors to turn to new apartments after Federal Government changes spark hunt for Queensland's best $1 million apartments

A mix of Gold Coast locals, fly-in, fly-out purchasers from Sydney and Melbourne, and Brisbane-based families has driven early sales success at Broadbeach's newest apartment tower, Lumara.

The 26-level project, a joint venture between builder-developer 5Point Projects and Bourke Projects, comprises just 37 luxury residences and is attracting a buyer profile that is looking for exclusivity, above the most amenity-rich suburb on the Gold Coast.

[smartcode_project:default project_id=150454 project_image_fid=364156]

Jamie Bourke, Director of Bourke Projects, says every buyer secured so far intends to use Lumara as a lock-up-and-leave residence, combining holiday use with the ability to work remotely when required.

“The size of the apartments, both half- and full-floor options, and the different zones within the floorplans, lends itself perfectly to dedicated home office setups and multi-generational family holidays,” Bourke says.

That flexibility has become a key drawcard for affluent buyers seeking a second residence on the Gold Coast without sacrificing the ability to conduct business away from their primary home base.

The absence of holiday letting within the building has also resonated strongly with purchasers.

“This type of buyer doesn't need to generate holiday rental income,” Bourke says. “They're paying for exclusivity, privacy and certainty around who their neighbours are.”

[smartcode_project:default project_id=150454 project_image_fid=366491]

The strong demand comes amid broader shifts in the high-end apartment market following the Federal Budget announcements in May.

“We were already seeing strong enquiry from high-net-worth buyers, but that has only accelerated since the policy changes,” Bourke says.

“A lot of those buyers are looking to place more capital into premium lifestyle assets rather than investment-grade stock that has been targeted by the Federal Government.”

[smartcode_project:default project_id=150454 project_image_fid=366486]

Designed by Cottee Parker, Lumara adopts a slender, sculpted form with an emphasis on natural materials suited to its beachfront setting. The architectural approach draws on coastal influences, with a palette of stone, timber and concrete selected for durability and the ability to weather over time.

Apartments are limited to three and four-bedroom configurations, with a maximum of two residences per floor through the mid-levels and a selection of full-floor and dual-level homes in the upper levels. All apartments are oriented to the north to maximise natural light, cross-ventilation and views across the ocean, city skyline and hinterland.

A two-level amenity offering is positioned high within the building on levels 20 and 21, conceived as a sky wellness retreat. Facilities include a magnesium pool, spa, sauna and steam rooms, alongside more social spaces such as a private dining room, resident lounge, workspaces and outdoor barbecue areas integrated with landscaped greenery.

The uppermost levels are reserved for larger-format residences, including several full-floor homes and a dual-level penthouse with its own private wellness features and recreational spaces.

&nbsp;

To give buyers confidence, 5Point and Bourke commenced construction ahead of the apartments launching to the market, a sure-fire way to prove they mean business, and the building will be delivered. They are targeting a 2028 completion date.

[smartcode_project_cta:default project_id=150454]

Locals, interstate holiday makers, drive early sales at Lumara, Broadbeach's newest luxury apartment tower

Often when it comes to purchasing property, the biggest barrier to entry is the deposit. Buyers of established homes typically aim for a 20 per cent deposit to avoid the added cost of Lenders Mortgage Insurance, while most property transactions require around a 10 per cent deposit when contracts are exchanged.

The off-the-plan market works differently, with buyers typically paying a deposit during construction and settling the balance upon completion. As completion approaches at <a href="https://www.apartments.com.au/new-apartments/fabbrica-fitzroy-369-gore-street-fitzroy-vic-3065">Fabbrica Fitzroy</a>, developer <a href="https://www.apartments.com.au/developers/pace-development-group">Pace</a> is making it easier for buyers to secure a residence through a deposit-matching incentive. Purchasers need only contribute a five per cent deposit*, with Pace matching the remaining five per cent.

The offer comes as Pace unveils a completed display apartment and townhouse, now available for inspection by appointment ahead of the project's Spring completion.

[smartcode_project:default project_id=139552 project_image_fid=371009]

Designed by <a href="https://www.apartments.com.au/architects/sjb-architects">SJB</a> with interiors by <a href="https://www.apartments.com.au/interior-designers/winwood-mckenzie-architecture">Winwood Mckenzie</a> and landscaping by <a href="https://www.apartments.com.au/landscape-architect/acre">Acre</a>, Fabbrica draws on Fitzroy’s industrial and manufacturing history, incorporating references to the former Argyle Shirt Factory and Life Savers Confectionery Company that once occupied the site.

The development comprises 85 residences, spanning low-maintenance apartments through to larger-format townhouses with private street access and double lock-up garages, a relatively uncommon offering in Fitzroy’s higher-density apartment market.

Pace says the project has been designed to appeal to buyers seeking inner-city convenience without sacrificing space, flexibility, or amenity.

[smartcode_project:default project_id=139552 project_image_fid=371016]

Inside the residences, Winwood Mckenzie has focused on adaptable layouts and integrated detailing, with features including custom joinery, and concealed storage solutions. The material palette leans into warm, tactile finishes intended to complement the building’s industrial architectural language.

Fabbrica’s rooftop amenity is a key part of the project offering. Spanning around 800 sqm, the communal rooftop includes a private dining room, communal kitchen, lounge spaces, work-from-home zones, and outdoor dining areas overlooking the Melbourne CBD skyline.

[smartcode_project:default project_id=139552 project_image_fid=371017]

Landscape architecture studio Acre has introduced a layered rooftop garden designed to soften the urban setting while creating a more communal environment for residents.

The Fitzroy location also positions residents within walking distance of Brunswick Street, Smith Street, parks, cafés, galleries, and public transport, while remaining only minutes from Melbourne’s CBD. The project has an enviable Walk Score of 96.

[smartcode_project:default project_id=139552 project_image_fid=371025]

Pace, which is also delivering the project as builder, has developed more than 100 projects across Melbourne over the past three decades. The vertically integrated approach has become increasingly common among developers seeking greater control over construction delivery amid broader market pressures affecting the apartment sector.

The strikingly contemporary Gore Street development is now around 70 per cent complete, with purchasers expected to move into their new homes in Spring 2026. A limited number of residences remain available under the current deposit match offer.

*Conditions apply in relation to the deposit match offer.

[smartcode_project_cta:default project_id=139552]

Pace offers five per cent deposit match at Fabbrica Fitzroy ahead of Spring completion

Sydney developer Hyecorp's roots on the Lower North Shore stretch back three generations, and that deep understanding of the market continues to shape where and how it develops today.

From high-rise towers to boutique apartment projects, the family-run developer has built its reputation by focusing on a part of Sydney it knows intimately. Founded by Michael Abolakian in the early 1990s, Hyecorp is now led by his sons Stephen, Troy and Patrick.

Stephen Abolakian, joint managing director alongside Troy, has spent more than two decades in the business, overseeing development, planning, finance, marketing and sales.

Abolakian says the developer's disciplined focus on where it chooses to operate has been, and continues to be, one of Hyecorp's greatest strengths.

“We know the buyer profile exceptionally well,” Abolakian says.

“The demographics between places like Willoughby, Chatswood, St Leonards and Roseville are very similar. There are nuances between suburbs and projects, but culturally and from a buyer perspective, there’s a strong overlap.”

That buyer has historically been overwhelmingly owner-occupier driven.

Unlike many Sydney apartment developers that have traditionally relied heavily on investor demand, Hyecorp’s projects have typically attracted downsizers, upsizers, rightsizers and family owner-occupiers seeking long-term homes rather than short-term investments.

“Historically, investors have been a much smaller portion of our demand profile,” Abolakian says.

“We design for owner-occupiers. We don’t design for yield, we design for comfort, amenity, family living and long-term usability.”

That philosophy extends well beyond apartment layouts.

From landscaping and communal gardens to shared amenities and circulation spaces, Hyecorp’s developments are designed around how people actually live, something Abolakian believes has become increasingly important in Sydney’s apartment market.

“There was probably a period where having an approved project in market was enough,” he says.

“There wasn’t as much competition and if you built it, buyers would come. That’s no longer the case.”

“There’s more supply in the pipeline now, particularly with TOD precincts and low and mid-rise reforms opening up opportunities across Sydney. Buyers have more choice, so if you get the product wrong, they’ll simply go elsewhere.”

[smartcode_project:default project_id=110379 project_image_fid=311393]

The shift has forced developers to become more sophisticated in how they approach apartment design, particularly as owner-occupier expectations continue to rise.

For Hyecorp, that means thinking beyond who the buyer is today and designing for who they may become in five or 10 years' time.

“People buying now often aren’t moving in for several years,” Abolakian says.

“You might have a young couple buying today, but by the time they move in they may have children, older children, or changing lifestyle needs. You’ve got to think about how families evolve.”

That thinking also shapes Hyecorp’s approach to amenity, which positions wellness at the forefront.

[smartcode_project:default project_id=149594 project_image_fid=362634]

While resort-style facilities have become increasingly common marketing tools across Sydney apartment developments, Abolakian says the challenge is ensuring amenities are genuinely usable and appropriate for the scale of the project.

“If amenities are done right, they can materially improve the living experience,” he says, adding however that if you&nbsp;overdo it or get it wrong, you can end up with facilities nobody uses that simply create ongoing strata costs.”

That balance is something Hyecorp is aiming to strike with projects like Roseville Avenue, one of the group's upcoming Lower North Shore developments, which Abolakian describes as bringing a resort-style living experience into a metropolitan setting.

“It’s about creating something that feels special without being excessive,” he says.

“Good gardens, quality apartments, thoughtful amenity. Creating that resort feeling in a metro location.”

<img alt="Hyecorp" data-entity-type="file" data-entity-uuid="13c4c0f3-b1b7-44cf-9344-0b3d1d07797a" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-06-02%20at%2012.14.57%E2%80%AFPM.png?VersionId=9OLWjyj2bYkDV35F78WJnyMSPfc2bJ2z" />

The focus on owner-occupier product comes as Sydney’s apartment market continues to navigate a difficult development environment.&nbsp;For Hyecorp, maintaining an in-house operating model across construction, sales, marketing and development management has become increasingly important in navigating that environment.

“We’ve always believed in keeping a lot of the process in-house,” Abolakian says.

“It creates efficiencies, but it also creates quality control. You can make faster decisions and ensure the end product stays aligned with the original vision.”

Despite the challenges, Abolakian believes demand for quality owner-occupier apartments across Sydney remains strong beneath the surface, particularly across established Lower North Shore suburbs where downsizers continue to seek new housing options close to existing communities.

“There are definitely people waiting,” he says.

“Once some of the broader uncertainty settles, whether that’s the global environment or some of the local economic noise, I think the right projects will perform very strongly.”

Hyecorp currently has three residential developments on the market across Sydney’s Lower North Shore.&nbsp;Audrey, St Leonards, positioned opposite Newlands Park, is nearing completion and preparing to welcome its first residents, with the project now almost sold out.

Hyecorp has also recently launched&nbsp;<a href="https://www.apartments.com.au/new-apartments/celine-chatswood-37-archer-street-chatswood-nsw-2067">Celine Chatswood</a>, an architectural tower, while continuing to deliver&nbsp;<a href="https://www.apartments.com.au/new-apartments/juliet-roseville-64-pacific-highway-roseville-nsw-2069">Juliet Roseville</a>, a more boutique scale of development with just 34 apartments.

Jonathan Chancellor

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