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GUEST OBSERVER
As e-tailing and large format fashion reshape the retail landscape, shopping centres are evolving into community hubs offering a broader range of experiences.
There’s change brewing in the domestic fashion world. Big international retailers like Zara, H&amp;M and Uniqlo are accelerating cycles and smaller retailers need to differentiate their brands to survive.
Fashion retail is not just about the product. If you are a ‘me too’, you’re in no man’s land and highly exposed – it’s increasingly about the experience and how you engage with customers across all channels. And that means owning and building your brand. 
We feel that the industry is seeing more fashion wind-ups at the moment, as businesses without sufficient differentiation are losing customers.
It's quite possible that some fashion retailers are failing, in part, as they try to create an increasing number of collections each year to compete with online or fast fashion – something that puts massive strains on their resources. They can’t keep up with changing consumer preferences and online shopping.
Pressure on the fashion retailers
Sales are transferring to big box fashion retailers. The apparel pie isn’t growing to the same extent, so naturally that’s put pressure on the rest of the fashion category - there’s a re-aligning of the fashion spend. 
Big box fashion has a key operational advantage too, as their gross occupancy charges are substantially cheaper than the average specialty store. 
A typical specialty fashion store has rental costs greater than 20 percent of sales, which means sales don’t have to decline much for profit margins to be decimated.
If they don’t own their brand, provide a great experience and don’t have a sharp business model, they’re in trouble. 
The shift for shopping centres
Failing fashion retailers aren’t a sign that people are necessarily moving away from shopping centres. Instead, customers are looking for something different.
Broadly speaking, total square meterage of fashion retail isn’t dramatically changing, but the mix and composition is evolving. We foresee that there’ll be fewer but larger fashion offerings over the next few years, which will be paired with a sophisticated range of services that put retail and services at the heart of the community. 
We’re seeing demand growth in entertainment, experience and service uses – things that can’t be replicated online.
As long as you can’t go bowling, get your teeth fixed, eat a steak or get a manicure online, you’ve got a potential retail operation. 
This trend is spreading right across Australia. Smaller shopping centres that were largely focused on fashion and food are diversifying to include a broader ranges of categories – which is a great thing. The old concept of one-stop shopping is making a comeback. The customer wins, and so do landlords. Good retail environments always adapt to the times to maintain relevance. 
Leighton Hunziker is director - Retail Services and Occupier Services for Savills. He can be contacted <a href="https://www.savills.com.au" target="_blank">here</a>.
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jchancellor-FAypfDUnLy

Fashion funk paves way for retail relevance

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One of Melbourne's most prolific private developers, Eddie Kutner's Central Equity, has recorded a record $131 million profit for the 2016 year.
Central Equity's 2015 profit was $10 million. In 2014 the profit was $76 million.
Kutner and his partners John Bourke and Dennis Wilson are considering a potential sell-down or outright sale of the business they founded in the 1980s.
"Central Equity is a highly profitable and sustainable business that has been developed over more than three decades to become a 'second generation' enterprise," a spokesman said on Monday. 
The 2016 profit was achieved on $586 million in sales revenue, compared to $120 million in the previous year.
Central Equity also develops residential land lots and has a project in Queensland.
In the directors' report for its 2016 financial results, obtained by The Australian Financial Review, the company outlines the prospect of strong revenues ahead, with more than $1 billion in sales contracts in hand.
Its Southbank Place in Kavanagh Street, which was released earlier this year, is expected to generate more than $400 million in sales.
Central Equity also noted it had acquired a major site on Lonsdale Street.
Central Equity's annual report addresses concerns about Melbourne's over-supply potential.
"Large-scale projects can take five-10 years to complete and over these timeframes many projects are either delayed or abandoned," it said.
"Accordingly, long timeframes, delay or abandonment and the dynamics of off-the-plan sales and bank requirements, have a 'self-regulating" effect on the physical supply of completed apartments to the market."
Central Equity also noted it is boosting the proportion of "family-sized apartments" in its projects, including larger two-bedroom units and more three-bedroom apartments.
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Family-sized apartment strategy outlined by the highly profitable Central Equity

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<img src="https://counter.theconversation.edu.au/content/67151/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1">
GUEST OBSERVER
The large banks and AMP will be required to fund the establishment of a new independent body to oversee the professional standing of the much-criticised financial services industry, the government has announced.
The chairman and directors of the body, a Commonwealth company, will be appointed by the government, which will develop an ongoing industry funding model for it.
But the new professional standards regime for the industry will not start until 2019 and will take until 2024 to be fully operational.
The latest moves to boost the industry’s professional standards have been announced by the Minister for Financial Services and Revenue Kelly O'Dwyer ahead of an Australian Securities and Investments Commission (ASIC) report that further documents malpractice by the banks and AMP. The Australian Financial Review reports that it reveals they “have been shortchanging tens of thousands of customers tens of millions of dollars by charging them for services they didn’t receive”.
O'Dwyer foreshadowed action on professional standards in April but it fell by the wayside with the election. Given Labor’s urging of a royal commission into the banks, which has community support, the pressure on the government to respond has intensified.
O'Dwyer said legislation would be introduced into parliament this year to mandate professional standards for advisers.
They will include compulsory educational requirements for both new and existing advisers; supervision requirements for new advisers; a code of ethics for the industry; an exam that will be a common benchmark across the industry; and ongoing professional development.
The new standards regime will not commence until January 1 2019, and existing advisers will have until January 2021 to pass the new exam and until January 1 2024 to reach degree-equivalent status.
The standards body will develop and set the industry exam as well as the ethics code and determine the education and development requirements for both new and existing advisers.
Professional associations and other independent third party monitoring bodies will develop compliance schemes to monitor and enforce advisers’ adherence to the code. These compliance schemes will be approved by ASIC.
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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Slow start to new standards requirements for financial advisers

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<img src="https://counter.theconversation.edu.au/content/66990/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1">
GUEST OBSERVER
Deciding on the best way to divvy up a business when the owners decide to go their own ways can be tricky.
It has to be fair in the eyes of everyone involved, but what if everyone has different expectations?
When people first form a business partnership, they’re often advised to sign a binding contract that specifies how the assets will be divided in the event of death, disability, divorce or departure. This is similar to a prenuptial agreement couples sign before they get married.
However it’s often not practical to sell the business to a third party and divide the proceeds. The partners may have skills or knowledge that make the business less valuable to a third party than to them. 
So we’ve developed another way of dissolving business relationships - through an auction.
<h2>The different ways of dividing</h2>
In the United States the most common exit mechanism for two-person, equal-share partnerships is the “Texas shootout”. The partner who wishes to dissolve the partnership triggers a shootout by naming their price. The other partner is then compelled to either buy out their partner or sell their own interest at that price.
A Texas shootout is like a “divide and choose” mechanism used by parents everywhere to split a piece of cake between two children. This is where one child divides the cake and the other child chooses which piece to take.
Divide and choose has the compelling feature that each child can guarantee themselves at least half the cake. By cutting the cake in what he regards as two equal pieces, the divider gets half the cake. By choosing the “larger” piece, the chooser gets what she regards to be at least half the cake.
Likewise, in a Texas shootout each partner can guarantee they capture at least half of the value they place on the whole partnership. A partner who names a price that leaves him indifferent to whether his partner buys or sells is guaranteed to receive half of his value on the partnership. Likewise, his partner, by simply taking the best deal cannot leave with less than 50% of her value.
However, the Texas shootout is unattractive for a number of reasons. For starters, the procedure does not easily scale if there are more than two joint owners. Nor does it treat the partners symmetrically. 
This point can be illustrated with a simple example. Suppose that Ann’s value for the partnership is $10, Bob’s value for the partnership is $16, and suppose, further, that each knows the other’s value. 
If Ann triggers the shootout, she should propose a price of $8. Bob will buy her out, and she gets $8. On the other hand, if Bob triggers the shootout, he should propose a price of $5, which Ann should accept. 
This way Ann is better off if she triggers the shootout, because she captures $8 rather than $5 – which may lead Ann to trigger the shootout if she fears Bob will trigger it.
Finally, if each partner is uncertain of how highly the other values the partnership, then the buyer in the shootout may not be the partner who values it most highly. 
Suppose Ann, for example, knows that Bob values the partnership more highly than she does but is uncertain of what that value is. If there’s a possibility that Bob values the partnership very highly, it may be optimal for Ann to name a price so high that there is some risk Bob will choose to sell rather than buy.
<h2>The auction method</h2>
So, we have developed a new method – called a “compensation auction” – which avoids the negative features of the Texas shootout while retaining the attractive feature that each partner can guarantee themselves an equal share of the value for the business.
The auction takes place over several rounds. At the beginning of each round, the amount of compensation is set to zero. 
Compensation is then increased continuously, until one of the partners agrees to take this amount of compensation in return for giving up his claim to the business. This partner exits, and a new round begins. 
The process is then repeated until only one partner remains. That partner is awarded the business and he pays each of the others their individualised compensation.
For example, suppose that Ann, Bob and Cathy wish to dissolve their business partnership. In the first round of the auction, compensation rises until Ann becomes the first to drop out, at $8. She surrenders her claim to the partnership and receives $8. Bob and Cathy remain to participate in the second round. 
Compensation is set to zero and then increases continuously. Suppose Bob then agrees to accept compensation when it reaches $6. Cathy buys the business, paying $14 in compensation – $8 to Ann and $6 to Bob.
The rules of the compensation auction treat the partners symmetrically, with no partner having a special role. The auction accommodates any number of players and is also efficient.
In addition, each partner can also guarantee themselves an equal share of his or her value for the business. To illustrate, suppose in the example above that Ann’s value for the business is $15 and she follows the plan of accepting compensation if it reaches $5 (that is, a third of her value). 
There are two possible outcomes: the first is that she accepts compensation of $5 at either the first or second round, getting a third of her value; the alternative is that she buys the partnership after Bob and Cathy have both dropped out, each having accepted less than $5 as compensation. 
In the latter case, Ann gets the business (which she values at $15) and pays at most $10 in compensation, obtaining a net value of at least $5.
The compensation auction therefore ensures each partner can capture an equal share of their value for the partnership. The compensation auction is “fair” in that it treats the partners symmetrically, takes into account any number of partners and is efficient.
John Wooders is professor of Economics at New York University Abu Dhabi and Distinguished Research Professor, University of Technology Sydney and author for The Conversation. He can be contacted <a href="https://theconversation.com/profiles/john-wooders-172104" target="_blank">here</a>.
Matt Van Essen is professor of Economics, University of Alabama and author for The Conversation. He can be contacted <a href="https://theconversation.com/profiles/matt-van-essen-308206" target="_blank">here</a>.
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Property 101: Why auctions are a better way to resolve business splits

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<img src="https://counter.theconversation.edu.au/content/66976/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1">
GUEST OBSERVER
The relentless housing boom in Australia’s cities, especially Melbourne and Sydney, is often framed as an intergenerational conflict in which younger generations are being priced out of the market by baby boomers.
However, sociological theories of social class suggest parents’ wealth and social status will eventually be passed onto their children anyway.
So, by focusing on intergenerational inequalities that will eventually be reversed, we are framing the housing affordability question the wrong way. At the same time, the impact of the housing boom is so deep that some long-established ideas about social class may be no longer relevant.
The housing boom has blurred existing boundaries between upper, middle and lower classes that applied to the baby boomers and previous generations. New social class boundaries and formations are being produced.
This does not mean younger generations, as a collective, are disadvantaged compared to their parents. Rather, these younger generations will be subdivided differently and more unequally.
<h2>The renting class</h2>
In the industrial city, the term “working class” was defined by the experiences of low-income workers in manufacturing jobs. Yet in a post-industrial Australian city it makes more sense to talk about the “renting class”. 
Not all renters are poor, and not all poor households are private renters. However, the correlation between the two is significant and strengthening. The proportion of private renters in the total population is slowly but surely increasing – from 20.3 percent in 1981 to 23.4% in 2011. 
Simultaneously, public housing – once a symbol of the working class – is undergoing a dramatic demise.
Largely abandoned by the state to fend for itself, with weak regulation for security of tenure or rent control, the renting class faces the unrelenting burden of ever-rising rents. The average renter paid 19 percent of their income on rent in 1981. In 2011, this proportion increased to 26.9 percent. 
And, in 2014, around 40 percent of low-income private renters were in housing affordability stress, paying more than one-third of their income on housing. 
With hardly enough “after-housing” disposable income to meet basic living standards, savings for retirement is almost impossible for the low-income renter. And with little or no wealth to assist their children to buy a home, the renter’s social class status is likely to be passed from one generation to the next.
<h2>The home-owner class</h2>
More than just a status symbol, home ownership has become increasingly central to the way most Australians accumulate wealth. About half of the home-owner’s wealth is held in their own home. Each housing boom enriches them further through tax-free capital gain on their homes.
The housing boom also creates work in the construction industry, which is the third-largest employer in Australia with more than one million workers. These are no longer working-class occupations, with most skilled jobs paying average weekly earnings of close to A$1,500. So, it is arguably the home-owner class that benefits most from each construction boom. 
One consequence of the housing boom is that a growing cohort of moderate-income households is now priced out of home ownership. Had they been born a generation earlier, they would have probably been able to afford a house. Now it is beyond their reach. 
Over the years, as their rents rise and their wealth stagnates, the gap between the renter and a home owner will become unbridgeable. Their experience of retirement will be worlds apart. 
One lifeline for this cohort is the prospect of inheriting some of the housing wealth of their baby boomer parents. But when this will happen is highly uncertain.
<h2>The housing elite</h2>
The housing elite is rewarded by the housing boom well beyond the capital gain on their own homes. Much of the massive wealth of Australia’s elite is generated through the housing market – through investment, construction and financing of housing. 
Harry Triguboff, Australia’s third-richest person, earned his fortune in the apartment development business. So did the three youngest entrants into the 2016 BRW Rich List. Their entry marks the rising importance of housing in the making of Australia’s super-rich. 
The top 20 percent of the wealthiest Australians hold most of their wealth in their home and in other investment properties. They also hold significant wealth in the sharemarket, which is commanded by big banks whose portfolios are heavily dominated by housing loans. Each housing boom significantly adds to their wealth.
Social class, however, is more than just financial wealth. The wealthiest Australians secure their social class position by living in exclusive suburbs where they are able to associate with the right people and live an elite lifestyle. The astronomical prices of houses in some of these suburbsensure their hermetically exclusive nature. 
<h2>Breaking the loop</h2>
None of these social class categories is natural or universal. These categories will not apply in some European countries, for example, that have very different housing systems.
The deepening fusion between Australia’s housing system and its social class system creates a dangerous cycle. The further house prices grow, the more important housing becomes as a determinant of social class. And when social class is increasingly defined by housing, people are willing to bid even higher to enter home ownership or the housing elite.
Unless we break this cycle, Australia will continue in its path of becoming a more polarised society, with a weakened renting class, an impenetrable elite, and a shrunken home-owner class between them.
Ilan Wiesel is lecturer in Urban Geography, University of Melbourne and author for The Conversation. He can be contacted <a href="https://theconversation.com/profiles/ilan-wiesel-303040" target="_blank">here</a>.
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How the housing boom is remaking Australia’s social class structure

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The decline - and apparent shortage - of property listings is the biggest talking point of the 2016 spring selling season.
Last Saturday's 640 Sydney auction tally was 35 percent lower than the same weekend in October last year.
The 20,000 total Sydney private treaty listings are down six percent with the 7,500 new listing component some 17 percent less than last October.
Home owners aren't wanting to sell while there is little on the market to buy.
Despite home values rising, transaction volumes languish well below their previous highs right across the country, CoreLogic research recently noted.
CoreLogic estimates 339,000 houses and 132,000 units sold in Australia over the year to April, including 208,000 houses and 96,000 units across the capitals.
The combined 471,000 annual property sales was down almost 26% from the 633,000 transactions over the 12 months to May 2002, the last sales volume peak year.
CoreLogic research head Tim Lawless foresees the consequences of property owners less willing to list properties for sale.
"The short supply of housing stock is likely causing some urgency amongst buyers which is contributing to the upwards pressure on dwelling values."
It is increasingly evident that stamp duty has become a major deterrent to doing anything among owners and investors who are all holding their properties for longer. 
The basic rate of NSW stamp duty has remained unadjusted for price bracket creep for the past three decades. It was in 1986 when the Unsworth Government budget raised the stamp duty to 4.5 per cent for sales above $300,000, and the rate for $1 million sales and above became 5.5 per cent.
Back then the median Sydney house price was not quite $100,000. It is now $890,000.
The Government estimated the new stamp duty rates in 1896 would add $30 million to revenue.
These days just the anticipated $100 million sale of John Symond’s Point Piper mansion, could recoup at least $6.94 million if the property is sold to an Australian or $10.94 million if sold to a foreign buyer.
NSW transfer duty revenue for 2015-16 was more than $1 billion over-budget at $8.887 billion. 
Stamp duty this financial year is tipped to raise $10.6 billion, making it the biggest tax levied by the state government, followed by payroll tax at $8.25 billion, land tax at $3.1 billion and vehicle taxes at $2.5 billion. 
Stamp duty overtook payroll tax as the State's largest source of tax revenue back in 1987.
Richardson &amp; Wrench Mosman agent Robert Simeon says stamp duty has become "a massive market hindrance.
"Home owners choose to renovate over gifting the state government ridiculous amounts of monies for nothing."
With fewer sales, but increased property prices, the government currently doesn't have too many concerns about its revenues. But year-on-year growth in transfer duty revenue has varied between negative 32 per cent and positive 39 per cent during the last decade. 
The last Budget's Intergenerational Report noted the state-wide economic cost for every million dollars of transfer duty revenue is estimated to be around $800,000.
The deepening paralysis is effecting the NSW economy - especially property related businesses. Estate agents and their agencies are facing an industry-wide shakeup. Ditto valuers, quantity surveyors, and mortgage brokers. Not just the white collar industries as say removalists will find fewer moving jobs in the current stayput environment. Even the village florist who pretty up the interiors at the open for inspections will find business shrinking. 
REINSW President John Cunningham said a review of the NSW tax system is necessary immediately, following stamp duty reforms in Western Australia and the Northern Territory. 
This article was first published in the Saturday Daily Telegraph.
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Spring welcomes lower listing volumes 

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GUEST OBSERVER
Finding the perfect apartment development for an owner-occupier can be difficult in today’s investor-laden market.
As the population grows and moves closer to high-density living, many factors need to be considered when appealing to owner-occupiers. While it’s easy to find developments that satisfy a handful of owner-occupier requirements, developments that combine high quality design with large floor plans, great neighbourhood amenities and an enviable location, are a rare find.
Amongst one of the greatest owner-occupier demands is the desire for greenery around the development.
While developers and architects are trying to accommodate this demand with rooftop gardens and vertical gardens on balconies, nothing satisfies this need better than living within close proximity to a park.
Projects such as Metacorp’s Rockley Gardens (above), located at 339 Toorak Rd, South Yarra, adjacent to a luscious parkside location, overlooking the historic Rockley Gardens, are a rarity. You can build a luxury development anywhere, but no one’s creating any more parks so securing prime land directly on one is difficult.
When you combine that with the best restaurants, easy transport, iconic shopping precincts, and a range of lifestyle amenities in one of the most prestigious suburbs, you know you’ve found the right property. Rockley Gardens plays up its unique parkside location by taking design cues from the lush, leafy surrounds.
Project architect Elenberg Fraser teamed up with landscaper Oculus to create an entwined façade for Rockley Gardens of a patterned form of individual planters that meld the development into its unique botanical environs while bringing the verdant views closer within.
Aside from ensuring the steady capital growth of a property, parks and gardens help foster a healthy and social community, and improve the appeal of the area as a whole. It’s perhaps worth noting that capital growth is significantly improved if the property is directly on a park instead of a few streets away.
When you look at what’s considered prime real estate around the world – One Hyde Park in London and The Prasada and Beresford in New York – it’s always the properties that overlook parks and gardens.
Bryce Patterson is director of Capital Property Marketing and can be contacted <a href="https://capitalpropertymarketing.com.au" target="_blank">here</a>.
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Proximity to parks and gardens key to maximum capital growth: Bryce Patterson

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GUEST OBSERVER
The property market fundamentals of Australia’s biggest city council are as bent as a banana.
While rates of population growth continue to ease, the high volumes of new housing supply are absurd, and the situation with Brisbane jobs is not as rosy as the state government are trying to portray.
Whilst Brisbane City Council (BCC) has the highest population out of all of Australia’s 550 local government authorities, its population growth rate has come down a long way from the dizzy heights which it consistently produced throughout the noughties decade. Its 2015 growth rate of 1.4 per cent is now back in line with the national average.
<a href="/images/2016/10/18/Screen%20Shot%202016-10-18%20at%208.16.18%20AM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/10/18/Screen%20Shot%202016-10-18%20at%208.16.18%20AM.png" alt="">
In spite of the distinct easing in population growth (housing demand) the rates of new housing supply have gone in the other direction, scaling record levels.
During the four years ending June 2010, BCC’s population increased by 85,313, thereby creating demand for an additional 32,809 dwellings (BCC has 2.6 people per household according to 2011 Census); 28,409 new dwellings were approved.
Contrast this to the most recent three years, additional housing demand was 17,285 (based on population growth of 51,804) yet a staggering 47,977 new dwellings were approved. As shown in Chart 2, things are completely out of whack.
84 per cent of approvals over the last three years were for attached dwellings. Obscene!
<a href="/images/2016/10/18/Screen%20Shot%202016-10-18%20at%208.17.48%20AM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/10/18/Screen%20Shot%202016-10-18%20at%208.17.48%20AM.png" alt=""> 
In 2014 and 2015, most property pundits repeatedly predicted that Brisbane’s property market would follow in the footsteps of Sydney and Melbourne; often referring to a ‘knock-on effect’ and Brisbane’s more affordable housing as their so-called ‘research’. Conversely, Propertyology downgraded its outlook for Brisbane in early 2014, instead forecasting that Brisbane was likely to see only modest price growth unless something significant occurred to help turnaround Queensland’s disappointing economic performance.
Median property values subsequently increased in Brisbane by 4 percent (2014) and 4.3 percent (2015), well below Sydney (15.1 percent and 15.1 percent) and Melbourne (9.1 percent and 12.7 percent).
<a href="/images/2016/10/18/Screen%20Shot%202016-10-18%20at%208.18.47%20AM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/10/18/Screen%20Shot%202016-10-18%20at%208.18.47%20AM.png" alt=""> 
On the surface, Greater-Brisbane’s unemployment rate of 4.9 percent [June 2016] looks very favourable compared to national and state averages of 5.8 percent and 6.3 percent, respectively. But, here’s the thing: a decline in Brisbane’s unemployment rate from 7.4 percent in February 2014 to the current 4.9 percent is totally at odds with the lack of confidence demonstrated by Brisbane business owners.
Where are all of these jobs that the Queensland state government continues to refer to in press release after press release since coming in to office in January 2014?
A close examination of the detail behind the employment data clearly illustrates that the economic reality is different to the broad-brush unemployment rate. According to official ABS data, the 46,921 extra jobs created in Queensland during the period February 2014 to May 2016 represents 9.1 per cent of jobs of the 517,333 jobs created nationally. Given that Queensland represents 20.3 per cent of Australia’s total population I’d say that banana-benders have been batting well below their weight!
<a href="/images/2016/10/18/Screen%20Shot%202016-10-18%20at%208.19.48%20AM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/10/18/Screen%20Shot%202016-10-18%20at%208.19.48%20AM.png" alt=""> 
Further analysis of individual industry sectors suggests that Queensland’s economic engine has actually seized up. Of the 46,921 extra jobs created, public administration, health and education have collectively increased by 51,622 over the period. One can’t help but scratch their head and question why, with a significantly smaller population than New South Wales and Victoria, that Queensland added more jobs in the Public Administration sector (8,838 additional taxpayer-funded government jobs) than any other state.
Sixteen out of nineteen industry sectors collectively LOST 4,701 jobs.  
<a href="/images/2016/10/18/Screen%20Shot%202016-10-18%20at%208.21.10%20AM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/10/18/Screen%20Shot%202016-10-18%20at%208.21.10%20AM.png" alt="" width="583" height="583">
The 25,300 jobs lost in Queensland’s mining industry will include plenty of white collar jobs in Brisbane’s CBD where, according to Property Council of Australia, commercial office vacancy rates rose to 16.9 per cent in August 2016.
The most compelling statistic is the 22,167 jobs lost in Queensland’s retail sector; cash register activity is one of the most reliable measurements of a community’s economic pulse. Job numbers in the Retail Trade sector have increased in every Australian state except Queensland.
New South Wales and Victoria’s impressive volume of jobs growth in retail trade reflects the confidence shown at auctions and open homes. On the other hand, property sales volumes in Brisbane City Council declined from an already modest level over the last twelve months (2.8 per cent fewer house sales and 17.2 percent fewer apartments).
<a href="/images/2016/10/18/Screen%20Shot%202016-10-18%20at%208.23.11%20AM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/10/18/Screen%20Shot%202016-10-18%20at%208.23.11%20AM.png" alt="">
If Brisbane can get its act together, its property market does have potential. But, jobs and confidence are the key. Unlike New South Wales where an infrastructure boom is unfolding, the Queensland public voted against an asset sale proposal to fund new infrastructure projects. The Legacy Way tunnel and Moreton Bay Rail Link projects have recently been completed and there are very few new infrastructure projects in the pipeline.
Queensland’s third biggest employment sector, the 223,000 people construction industry, lost 8,095 jobs between February 2014 and May 2016 and, with an over-supply of housing already brewing, further construction industry job losses would have to be on the cards without several new infrastructure projects.
<a href="/images/2016/10/18/Screen%20Shot%202016-10-18%20at%208.24.06%20AM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/10/18/Screen%20Shot%202016-10-18%20at%208.24.06%20AM.png" alt=""> 
Yes, property is much more affordable in Brisbane than in Sydney and Melbourne. But, Queensland’s interstate migration trend is (again) falling and few people will relocate without being exceptionally confident of their employment prospects. The under-performing economy is why Brisbane’s property market hasn’t found its way out of first gear.
And, the ridiculous volume of new housing supply may soon see that gear changed to neutral. Propertyology will continue to invest in locations across Australia where cash registers are ringing louder than Brisbane.
Simon Pressley is Managing Director of Propertyology, a REIA Hall Of Fame Inductee, property market analyst, accredited property investment adviser, and Buyer’s Agent. <a href="https://www.propertyology.com.au/more-than-a-buyers-agent/" target="_blank">Propertyology works exclusively with property investors</a> to purchase properties in strategically chosen locations all over Australia.
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Answers to Brisbane property market found in cash register:  Simon Pressley

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The restaurant premises in the Elizabeth Bay Encore complex have been listed for auction.
<a href="https://www.realcommercial.com.au/property-retail-nsw-elizabeth+bay-502126566">Shop 1 at 21 Elizabeth Bay Road</a> comes with 16 metre frontage and 150sqm in/outdoor space.
There is a grease trap and ventilation and a quality stainless commercial kitchen.
It has been listed for November 10 auction through LJ Hooker Commercial agent James Griffiths.
It was initially Simmone Logue's outlet, but has seen many tenants since.
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Elizabeth Bay restaurant premises for sale

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The Reserve Bank has noted there is a danger that apartment buyers will default on off the plan purchases because of falling ­prices along with the difficulty of obtaining ­finance.
“These risks appear greatest in inner-city Brisbane and Melbourne, where the new supply is largest relative to the existing dwelling stock,” the Reserve Bank said in its latest review of the ­stability of the Australian financial system, released on Friday.
The RBA said the chance of developer sales falling through had been ­increased by new bank restrictions.
These included the restrictions on lending to buyers with foreign incomes, aimed mainly at Chinese investors, and also the more rigorous requirements now being ­imposed by the local banks on mortgage borrowers generally.
“There are signs that some settlements are taking longer and lending valuations are coming in below their contract price, though settlement failures to date remain low,” the bank noted.
The Reserve Bank’s concerns were shared by the banking regulator, the Australian Prudential Regulation Authority.
But APRA's chairman Wayne Byers told a parliamentary committee on Friday that the biggest lending exposures to the east coast apartment boom were taken on by Asian banks, rather than by the big four Australian banks.
The Reserve Bank estimated that 16,000 new apartments in Melbourne over the next two years would add around 18 per cent to the city’s stock of inner-city housing, while an additional 12,000 in Brisbane would add 15 per cent to exisiting stock levels.
Sydney's increase is only around six per cent and the 10,000 new ­apartments scheduled for completion over the next two years spread across the city.
The RBA noted apartment ­prices and rents were weaker in Melbourne and Brisbane, while vacancies were higher.
“If apartment markets were to turn down and settlement difficulties become more widespread, banks would be more likely to incur some loan losses,” the ­bank said.
It said housing default rates in Australia had historically been very low, about 0.5 per cent, with home buyers having a high level of collateral.
The Reserve Bank noted that during the post 2008 global financial crisis, house prices fell by between 30 and 50 per cent in the most affected nations.
“However, Australia is not facing the same economic and financial headwinds as Spain or Ireland did during the financial crisis,” it added.
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RBA fears off the plan apartment non-settlement jitters especially in Melbourne and Brisbane

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.

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fjcstudio has carefully oriented apartments towards Sydney Harbour and the CBD while using privacy blades and articulated façades to minimise overlooking between neighbouring buildings.

Large framed openings along the western elevation maximise harbour outlooks, while the eastern apartments have been angled towards the south-east to improve privacy from neighbouring development.

The project forms part of the continuing transformation of North Sydney from a predominantly commercial CBD into a genuine mixed-use city centre.

Since the completion of Victoria Cross Metro Station, developers have increasingly shifted their attention towards residential projects capable of leveraging the area's unparalleled transport connectivity.

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FiveX recently lodged plans for a 61-storey, 490-apartment tower that would become one of the tallest residential buildings in North Sydney if approved.

Aqualand continues to expand its Lower North Shore presence following the completion of AURA on Walker Street and its recent St Leonards and Roseville proposals.

Developers are also progressing projects throughout Walker Street, Miller Street and the Victoria Cross precinct as demand for well-located owner-occupier apartments continues to strengthen.

First look: Zurich targets North Sydney office conversion with 148-unit proposal above Metro station

Busy developer Aqualand Prestige has formally taken the next step in its expansion across Sydney's Lower North Shore, lodging a State Significant Development Application (SSDA) for its long-held Archer Street site in Chatswood.

The application covers <a href="https://www.apartments.com.au/new-apartments/51-55-archer-street-chatswood-nsw-2067">51-55 Archer Street</a>, a 1,767 sqm amalgamated site on the eastern edge of the Chatswood CBD, where the developer is seeking approval for a 45-level mixed-use tower delivering 114 apartments, including a significant affordable housing component, alongside retail, commercial space and six basement levels of parking.

The SSDA marks the latest milestone for a project Aqualand has been quietly progressing over the past two years. The developer first secured the site for its Aqualand Prestige platform before undertaking an alternative design excellence process with PTW Architects, ultimately avoiding a formal design competition through the Housing Delivery Authority pathway.

The proposal has evolved considerably from Aqualand's original concept. The revised scheme has been designed around larger owner-occupier product, with an unusually high proportion of three and four-bedroom apartments, targeting the more affluent buyer profile, and downsizer, emerging across the North Shore.

<img alt="Archer St" data-entity-type="file" data-entity-uuid="0171204c-5811-41b5-9b09-2335d1b7c3d0" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-07-22%20at%208.52.48%E2%80%AFAM.png?VersionId=6YTuxfq.puZo7k2wbfgemcO5K3QfXYGQ" />

The 114-apartment mix comprises six studios, 27 one-bedroom apartments, 18 two-bedroom apartments, 50 three-bedroom residences and 13 four-bedroom homes. A quarter of the building will be dedicated to affordable housing, well above the mandated 15 per cent&nbsp;

PTW has structured the building vertically, with affordable housing across levels one to six, premium apartments through levels seven to 31, duplex skyhomes on klevels 32 to 43, a penthouse on level 44, and a rooftop plant level above. Six basement levels will provide resident parking and servicing.

The tower is proposed to reach approximately 154 metres, placing it among a growing collection of residential high-rises transforming Chatswood's skyline.

Rather than competing purely on height, PTW says the design has been driven by creating a slimmer tower capable of delivering significantly larger apartments.

"The primary objective of this project was to create a distinctive building that stands out from the recently approved or built structures in the Chatswood area," the design report states, noting the structural efficiency allows greater investment into apartment quality and resident amenity.

Residents would have access to more than 450 sqm of communal open space including landscaped gardens, swimming pool, rooftop entertaining areas, fitness spaces, community gardens, children's play areas and barbecue facilities.

A major focus of the design has been the public domain.

The ground plane has been opened up through landscaped terraces inspired by Willoughby's sandstone ridges, with native planting, public seating, artwork, retail activation and a series of gathering spaces intended to soften what has traditionally been a hard commercial streetscape.

The landscape strategy references Blue Gum forests once common throughout the area, while incorporating Indigenous storytelling, public art and lighting installations to strengthen the connection to Country.

Chatswood has been one of Sydney's busiest apartment markets over the past 12 months, with a steady pipeline of both new project launches and fresh development applications.

Hyecorp recently launched Celine, a 122-apartment development just along Archer Street, while Changfa and Huirong Group are progressing The Anderson, an 84-apartment project on Anderson Street.

Develotek recently secured approval for a 101-apartment tower on Pacific Highway, while Tian An LFD received the green light for Hammond Greens, its apartment development on the edge of the Chatswood Bowling Club.

Commercial property developer FiveX is also making its move into the residential market. Last month it lodged plans for a 61-storey tower with 490 apartments, which, if approved, would become one of the tallest residential buildings in Chatswood.

Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/first-look-fivex-targets-chatswood-skyline-with-61-storey-tower-after-north-sydney-plans">First look: FiveX targets Chatswood skyline with 61-storey tower after North Sydney plans</a>

Aqualand is also expanding its development pipeline following the launch of its luxury residential brand, Aqualand Prestige. The developer has delivered a string of high-end apartment projects across Sydney's affluent suburbs over the past decade, most recently AURA by Aqualand on Walker Street in North Sydney.

[smartcode_project:default project_id=30959 project_image_fid=292863]

It has since quietly assembled its next wave of projects.

Earlier this year Aqualand launched Boronia in Roseville, a boutique 111-apartment development on Larkin Street. The project is one of the first significant apartment developments to launch in the suburb ahead of what is expected to become one of Sydney's most active new housing precincts under the NSW Government's Low and Mid-Rise Housing reforms, which allow greater density around train stations.

[smartcode_project:default project_id=152095 project_image_fid=373685]

The developer has also lodged plans for a two-tower, 413-apartment development on Herbert Street in nearby St Leonards, further strengthening its presence across the Lower North Shore.

Beyond that, Aqualand remains behind the final stage of Barangaroo, where plans will deliver a five-hectare mixed-use precinct comprising new homes, retail, hospitality and community facilities, alongside a new Metro entrance and more than two hectares of public open space, completing the Barangaroo precinct.

Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/central-barangaroo-development-takes-big-step-with-concept-proposal-approval">Central Barangaroo development takes big step with concept proposal approval</a>

Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/first-look-aqualand-joins-st-leonards-apartment-party">First look: Aqualand joins St Leonards apartment party</a> 
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First look: Aqualand pushes ahead with Chatswood apartment tower as SSDA lodged for Archer Street

Mass timber is becoming an increasingly popular construction material in apartment developments, but Adelaide developer <a href="https://www.apartments.com.au/developers/otello">Otello</a> is taking the approach a step further.

At its new <a href="https://www.apartments.com.au/new-apartments/flowe-bowden-18-gibson-street-bowden-sa-5007">Flowe Bowden</a> development, the exposed cross-laminated timber (CLT) structure isn't just about reducing the building's environmental footprint. It also forms the foundation of a broader wellness strategy, influencing everything from indoor air quality and natural materials to the way residents move through and experience the building.

The 115-apartment mixed-use development, designed by Melbourne-based architecture practice Fieldwork, will occupy a prominent island site opposite Bowden Village Reserve, combining one, two and three-bedroom apartments with retail and a dedicated wellness destination.

[smartcode_project:default project_id=152022 project_image_fid=375528]

Wellness isn't confined to a gym or shared resident facility at Flowe. Instead, Fieldwork embedded the concept into the building itself.

The development has been split into two residential wings connected by a naturally ventilated central breezeway, replacing traditional enclosed corridors with open-air walkways that improve natural light, encourage cross ventilation and create more opportunities for neighbourly interaction.

"Rather than treating wellness as something that only happens on the ground floor, our response integrates it throughout the building, which led us to ask what it really means to design a healthy building," Fieldwork Director Quino Holland said.

[smartcode_project:default project_id=152022 project_image_fid=375531]

The building's architecture also reflects Bowden's industrial heritage. The lower podium references the area's historic brick and sandstone buildings, while the upper levels transition to exposed CLT, allowing the timber structure to become a defining feature throughout the apartments and shared spaces.

The use of mass timber sits alongside a range of sustainability initiatives, including a fully electric, gas-free design, rooftop solar and a targeted 5 Star Green Star rating.

[smartcode_project:default project_id=152022 project_image_fid=375524]

Inside the residences, the focus remains on natural, durable materials. Blackbutt engineered timber flooring, exposed CLT ceilings, porcelain surfaces and warm timber joinery create a calming interior palette, while low-VOC finishes and responsibly sourced materials have been selected to improve indoor air quality.

Kitchens have been designed as the centrepiece of each apartment, featuring porcelain island benchtops, timber-look cabinetry and brushed steel tapware, with layouts that maximise natural light and ventilation.

[smartcode_project:default project_id=152022 project_image_fid=375530]

The more traditional interpretation of wellness comes in the form of Level Eleven, a two-storey wellness club spanning the ground floor, mezzanine and first floor.

The facility will include a gym, yoga and reformer Pilates studios, Finnish and infrared saunas, magnesium hot and cold plunge pools, and dedicated recovery spaces. Unlike many residential wellness facilities, Level Eleven will also operate commercially, allowing the broader Bowden community to access the venue while giving residents exclusive membership benefits.

The ground floor has also been designed around everyday living. A café overlooking Bowden Village Reserve will activate the street frontage, while a bike workshop with tool storage, co-working space and dog wash has been incorporated to support daily routines and encourage interaction between residents.

"Flowe brings together my two biggest passions, creating places and creating healthier lives," Otello founder Daniel Harris said.

"We wanted to create something Adelaide hasn't seen before, a genuinely healthy building, where the way you live is lifted without even trying."

Flowe is positioned directly opposite Bowden Village Reserve and within walking distance of Bowden Railway Station and the Adelaide Entertainment Centre, placing future residents just minutes from the Adelaide CBD while remaining connected to one of the city's most established urban renewal precincts.

[smartcode_project_cta:default project_id=152022]

Jonathan Chancellor

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