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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The Treasurer’s comments about the planning system are out of date.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

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.

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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.

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The developer has also lodged plans for a two-tower, 413-apartment development on Herbert Street in nearby St Leonards, further strengthening its presence across the Lower North Shore.

Beyond that, Aqualand remains behind the final stage of Barangaroo, where plans will deliver a five-hectare mixed-use precinct comprising new homes, retail, hospitality and community facilities, alongside a new Metro entrance and more than two hectares of public open space, completing the Barangaroo precinct.

Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/central-barangaroo-development-takes-big-step-with-concept-proposal-approval">Central Barangaroo development takes big step with concept proposal approval</a>

Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/first-look-aqualand-joins-st-leonards-apartment-party">First look: Aqualand joins St Leonards apartment party</a> 
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First look: Aqualand pushes ahead with Chatswood apartment tower as SSDA lodged for Archer Street

Mass timber is becoming an increasingly popular construction material in apartment developments, but Adelaide developer <a href="https://www.apartments.com.au/developers/otello">Otello</a> is taking the approach a step further.

At its new <a href="https://www.apartments.com.au/new-apartments/flowe-bowden-18-gibson-street-bowden-sa-5007">Flowe Bowden</a> development, the exposed cross-laminated timber (CLT) structure isn't just about reducing the building's environmental footprint. It also forms the foundation of a broader wellness strategy, influencing everything from indoor air quality and natural materials to the way residents move through and experience the building.

The 115-apartment mixed-use development, designed by Melbourne-based architecture practice Fieldwork, will occupy a prominent island site opposite Bowden Village Reserve, combining one, two and three-bedroom apartments with retail and a dedicated wellness destination.

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Wellness isn't confined to a gym or shared resident facility at Flowe. Instead, Fieldwork embedded the concept into the building itself.

The development has been split into two residential wings connected by a naturally ventilated central breezeway, replacing traditional enclosed corridors with open-air walkways that improve natural light, encourage cross ventilation and create more opportunities for neighbourly interaction.

"Rather than treating wellness as something that only happens on the ground floor, our response integrates it throughout the building, which led us to ask what it really means to design a healthy building," Fieldwork Director Quino Holland said.

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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.

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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

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