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The outgoing RBA Governor thinks more borrowers are actually using the low rates to accelerate their repayments rather than going to Bunnings.
He was asked about household debt and how would QE work in Australia by the Australian Financial Review given the recent overseas experience.
"Well, I'm very much hoping we never need to find out.
"We've certainly observed what has been done elsewhere, and there's any number of assessments around on its effectiveness.
"I'm very thankful not to have been in the position that they were in of feeling that we've got to do more.
"We haven't been in that position, and hopefully we won't be."
He said his test is: "Who went to Bunnings in the end as a result of that?
"Did someone go and take borrowed money and spend it on real goods and services that wasn't going to otherwise?
"Because that's actually in some sense the ultimate test. Did we create some additional demand?"
"It's impossible to know really, but I suppose I'm left with some doubt that all that many people went to Bunnings that weren't otherwise going to."
He was asked to judge the transmission mechanism works in Australia, when you're cutting cash to such low levels?
"I think on the work that I'm aware of, the evidence that I'm aware of, I would say that cash-flow channels still probably work.
"I'm personally of the view that maybe not as strongly as they used to, because I think the evidence is that the borrower households – that's where the action comes from, and the way this is supposed to work is the borrowers have more debt than the savers have deposits.
"That's a fact.
"And when you change rates the borrowers are the ones who are, you know, spending all their income, and if I give them a bit more income.
"They're likely to spend that.
"And the savers – the cut to their direct income is actually not as big, and they're less likely to respond.
"That's still true.
"But I think more of the borrowers are actually using the low rates to accelerate the repayment rather than going to Bunnings.
"Now, what that does is it's accelerating the decline of the debt for those individuals, those households, so the day when they are freer of the debt or have a lower debt and they're then more confident to spend – that day is getting closer.
"But it probably hasn't been as much of an immediate effect maybe as it might once have been.
"And I'm hypothesising here. You can't prove this," he said.
He noted credit growth slowed down in the past year.
"So I think a lot more people are intent on trying to get to the point where they're carrying a lower debt load.
"It's the new people borrowing to come into the market that, you know, keep credit growing at all.
"So I think what's driving that is just people have changed their opinion about how much confidence they have in future asset values rising and how much leverage they're prepared to hold.
"I think a lot of people thought: "I'm going to be more careful."
Glenn Stevens has conceded that he has "some discomfort' about rising Sydney house prices, but argued that these concerns need to be <a href="/expert-insights/finance/housing-markets-not-without-risk-as-sydney-leads-the-charge-rbas-glenn-stevens">weighed up against the need to stimulate economic activity across the nation</a>.
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Borrowers using low rates for repayments rather than going to Bunnings: RBA's Glenn Stevens

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GUEST OBSERVER
Secret Agent believes that knowledge about supply is crucial to making an informed and successful investment. This report will forecast what the supply of apartments and townhouses in Melbourne will be over the next 12-36 months.
Why is supply important?
Basic economics tells us that when supply is high, unless the market is in equilibrium, prices will drop because demand will not be able to keep up.
There is a less obvious reason that makes supply important. One of the biggest differences between supply and demand is that it is possible to forecast supply, and almost impossible to accurately predict demand.
It can seem like demand is certain. An investor might think he has struck gold when he discovers a suburb with rapidly rising rents and a growing demographic of people moving into the "hot new area" to live. Yet, in the background, a surge in planning proposals may cause supply to expand considerably. Supply created by developers does not trickle into the market but arrives in large batches, as each developer tries to use the same metrics to make guesses about demand into the future. All of a sudden, a glut starts to weaken rents and can drive away owner occupiers who had previously wanted to live within the area.
Demand is so difficult to accurately forecast that even the world’s biggest companies are often wrong when it comes to this. A great example is the large oil producers who have seen their profits diminished. They had continually invested in new wells with the expectation that the price of oil would continue to increase as demand intensified, only to see it collapse due to fracking and other factors.
World iron ore producers who made substantial long term investment decisions based on high iron ore prices made a similar error. There was too much focus on present demand rather than on future supply conditions, which could have helped them make sensible decisions over the business cycle.
Another example is this season’s avocado prices. Strong demand and a tough growing season caused prices to soar at the beginning of the season. As the season went on, prices started to moderate as supply caught up. No doubt avocado trees are being planted in record numbers with some producers seeking to benefit further from high prices. However, the likely outcome is diminished prices as supply starts to surpass demand. To maintain margins, differentiation is required, such as higher quality or varying varieties. The lesson here is that it is also the structure of supply that is crucial to evaluate.
The Australian property market has seen a sharp rise in supply. Developers have become much more comfortable with higher supply levels of their own product. Demand has been strong but it is only a matter of time before they too will have to differentiate.
How do we predict future supply?
Forecasting supply is especially useful in the property market. It is possible to know how many and where the upcoming apartments and townhouse developments will be, due to publicly accessible approved planning applications. This has huge implications for investors and home buyers.
Using data published by the Australian Bureau of Statistics (ABS), Secret Agent modelled Building Approvals by Statistical Area 2 (SA2) over the past financial year (July 2015 – June 2016) for two categories: apartments and townhouses. This report summarises our findings. Note that the figures may be slightly underestimated because it does not take into account approvals made prior to July 2015, which may still be in construction stages. 
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Part 1: Flats, units or apartments (including those attached to a house)
This is a measure of the upcoming supply of apartments. For larger buildings (4 stories and above), construction usually takes between 12 and 18 months, while for smaller buildings it can take up to 12 months. Therefore, the number of building approvals over the past 12 months in this category reflect the amount of supply for the next 12-18 months. Table 1 shows the ten suburbs with the highest amount of new developments of this type.
As expected, development in inner Melbourne (CBD, Southbank and Docklands) is much higher than anywhere else. Combined, these three suburbs account for almost 30% of growth of new apartments in metropolitan Melbourne. Southbank has by far the highest density of development, as its total area is much smaller than the CBD, yet there are nearly 2,000 more apartments being built here. West of the city, Footscray is the only major site for development. 
Notable suburbs in the inner north are North Melbourne (648), Brunswick (748), Brunswick East (468) and Collingwood (428). Further north, Preston (934) and Heidelberg West (612) have issued the highest number of building permits.
In the inner east, South Yarra (848), Richmond (566) and East Melbourne (550) are expected to see the biggest increases in new apartments, as well as Box Hill (1940), Doncaster (1056) and Malvern East (924) further to the east. To the south of the CBD, South Melbourne (1234), Albert Park (932), St Kilda (820), Caulfield (510), Bentleigh (612) and Cheltenham (942) have the highest number of new apartments being built. 
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Part 2: Semi-detached, row or terrace houses, townhouses
This shows the number of new townhouses being developed, as it includes any residential development of a subdivided block of land not included in the other category. As there will usually be less properties to be developed per site, some of these constructions have already been finished, while the vast majority will be completed within the next 12 months. 
While development of new apartments is mainly concentrated around the CBD and inner Melbourne, Port Melbourne is the only inner city suburb featured in the top ten list for semi- detached, terraces and townhouses. Note that most of the new developments in Port Melbourne are concentrated in the old industrial area of the suburb, which has recently undergone zoning changes to become residential. 
The inner and outer north have the highest density of development, with suburbs like Glenroy (640), Reservoir (488), Pascoe Vale (456), Craigieburn (364), Preston (336) and Heidelberg West (296) all making the list.
More suburbs in the inner west are experiencing development of townhouses compared to apartments. These include Altona North (316), St Albans (230), Braybrook (218) and Sunshine (212).
To the east, Doncaster (380) and Doncaster East (222) are again feature suburbs, while to the southeast, most of the development seems to follow the major rail network through Malvern East (166), Oakleigh (164), Clayton (212), Springvale (124), Noble Park (174) and Dandenong (272). 
Observations on future apartment supply
Secret Agent studied hundreds of floor plans of upcoming apartment buildings whilst compiling this report. The "Better Apartments" design standards draft for Victoria is currently in its consultation stages, so it was interesting to see that a number of these advertised apartments are not compliant with the proposed standards. It's likely that a big portion of the supply over the next year will not meet the quality of apartment living we are hoping to achieve. Here is a summary of our observations.
Balconies are too small.
Many balconies do not meet the minimum 2m dimension nor the minimum size requirements (8m2 for a 1 bed dwelling and 10m2 for a 2 bed dwelling).
Some apartments have used juliet balconies, a.k.a. false balconies, to allow for ventilation without actually providing open space.
"Snorkel" or "saddlebag" bedrooms are widespread.
This L-shaped layout is an ineffective yet popular solution to provide light access to the second bedroom of 2 bed dwellings. The "snorkel" is often too narrow to be considered habitable, and in many cases direct light does not penetrate into the actual room due to its depth.
Light wells are too small.
These non-compliant light wells are much smaller than the suggested minimum area of 9m2 with a minimum dimension of 3m, for buildings up to 13.5m (approx. 4 storeys). The example on the right was taken from an 8 storey building. These bedrooms would either have compromised access to sunlight, views, or both.
When appropriately designed, light wells increase the surface area of the external envelope and introduce more openings (i.e. windows) to allow light into dwellings.
Some bedrooms adjoin the lift core.
This isn't good news for light sleepers. Placing noise sources directly adjacent to habitable areas (especially bedrooms) increases noise transmission. Unless adequate acoustic insulation is in place, you can expect to hear each lift ride throughout the night. This has long term implications on health and happiness. 
Storage cages are too small.
New design standards suggest a minimum of 6 cubic metres of additional storage space for 1 bedroom dwellings. Common sizes for today's apartments (that is, if they have any) are 3 and 4 cubic metres, and 2.5 cubic metres for storage above car spaces.
Quality can vary within the same building.
An apartment building can have both A and B grade units, even within the same level. A proposed residential tower in Abbotsford had a combination of 70sqm 1 bedroom dwellings and 70sqm 2 bedroom dwellings. These 1 bedroom units are far bigger than the inner Melbourne average of 47sqm, whilst the latter sits just below the average of 73sqm.
2 bedroom dwellings are most often compromised.
1 bedroom dwellings usually have satisfactory access to sunlight and size. It’s the 2 bedroom dwellings that have the most compromised layouts, usually involving a "snorkel" bedroom in the floor plan (see point 2 on the previous page).
3 bedroom units are less common and are usually located around the corners or on the upper levels of the building. These apartment types tend to be of higher quality and command a premium. 
Conclusion
Future supply is fairly simple to predict. The implications of the forecast are far more complex. This report will conclude with a summary of points you should draw from our forecast of Melbourne's upcoming supply.
1.  High supply in certain suburbs does not mean you should avoid buying in these areas. You just need to be more careful with what you choose to buy. Differentiated products will perform better in the long term.
2.  While the new supply figures may seem high, it is important to consider context. For example:
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<li>How many existing apartments are in that suburb?</li>
<li>What is the proportion of apartments, townhouses  and houses in that suburb?</li>
<li>How big is the suburb?</li>
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3.  The availability of surrounding amenity and infrastructure should also be considered. Suburbs with high supply and good amenity and infrastructure will outperform suburbs with high supply but lacking in these features. An example is the Glenroy area, which has a large volume of supply coming up amidst a grim future for job growth, as many automotive industries based in this region will be shutting down by 2017.
4.  Generally, investors may want to consider the areas identified as having a high supply with caution. Rental yields are likely to be driven down unless the properties are suitable to family occupants.
5.  Home buyers may want to consider areas where there is a greater supply of townhouses, since these may be more suitable to a growing family. Townhouses are also an affordable alternative to a house, especially in areas of high supply.
6.  The quality of supply in the apartment market is lacking in many areas, especially for 2 bedroom units. This reinforces the importance of implementing better design standards for developers to adhere to.
Overall, for those interested in maintaining the value of their property investment, present areas of demand with excellent amenity to jobs, transport and lifestyle options that also offer scarcity and very little opportunity for future supply to be created will be long term winners. 
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Melbourne's future supply of apartments and townhouses: Secret Agent 

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Reserve Bank governor Glenn Stevens has conceded that he has "some discomfort' about rising Sydney house prices, but argued that these concerns need to be weighed up against the need to stimulate economic activity across the nation. 
He said the Reserve Bank remained confident there was little evidence of a widespread bubble in house prices.
Australia had a new "two speed" economy, with strong growth in states such as NSW, while resource-rich states, such as Western Australia and Queensland, had seen growth rates slump as the mining boom had ended.
Hie final interview with The Australian Financial Review, mentioned some mixed evidence as to the strength of the housing market. 
"Prices are probably rising smartly in some areas, but in other areas they're not, and in some cities in the country, they're falling," he said.
"So I think it's a mixed picture. It's not without risk, and it certainly gives me some discomfort, but then we're balancing that against the other obligations we have to pursue."
He said the RBA was tasked "to balance all these things and make a decision that neither completely ignores the financial stability and housing concerns, nor let them completely dictate the decision.
"That's the balance that we've tried to strike".
"Most of the domestic effects of cheap money comes through the household sector. Higher house prices than otherwise, more borrowing than otherwise, wealth effects, lower saving rate, etc."
But he added, "the thing that I've tried to grapple with is – that's where we get the effects, but do we actually want households to engage in a major levering-up from here?
"It's not that what they did before was disastrous – that clearly hasn't been. But from here, how much more do you want?"
"As the facts at the moment are, the credit growth of households is running about 6 percent. Fractionally less if you take account of a build-up in mortgage offsets and so on".
He added, "I don't think you can say this is a terrible risk. If it was 10 percent or 15 percent – that would be a different story".
He noted two speed housing price movements.
"It's probably not that surprising that parts of Sydney are leading the charge, because this economy is leading the country at the present time."
This, he added, is something "which, actually, we needed if we're to manage the transition after the mining boom".
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Housing markets not without risk as Sydney leads the charge: RBA's Glenn Stevens

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GUEST OBSERVER
On Tuesday, in its last board meeting with Glenn Stevens as Governor, the Reserve Bank of Australia left the cash rate unchanged at 1.50 percent.
This was widely anticipated by markets. Glenn Steven’s statement basically said: growth is pretty low, but not horrible; business investment is way down, but other investment is up; commodity prices are up; but they fell a lot in the last two years; and so on.
Essentially, things are bad, but not too bad. In other words, the glass is half “fumpty”.
The two things he made a non-bland statement about were inflation and the exchange rate, saying:
“Inflation remains quite low. Given very subdued growth in labour costs and very low cost pressures elsewhere in the world, this is expected to remain the case for some time.”
and:
“Low interest rates have been supporting domestic demand and the lower exchange rate since 2013 is helping the traded sector…though an appreciating exchange rate could complicate this.”
And therein lies the key to future rate moves in Australia. If inflation drops below 1 percent, or if the Aussie dollar gets above 78 or so cents, then the RBA will strongly consider another rate cut.
There was somewhat positive news from the ABS on the trade front for Australia. The seasonally-adjusted trade deficit was A$2.41 billion in July, compared to A$3.25 billion in June, and better than market expectations. This was driven largely by a big jump in gold exports, while imports did not rise, staying at A$28.8 billion. The latter figure was, in part, due to a 6 percent fall in imports on consumption goods. This helped the trade deficit, but one wonders whether it is a sign of reduced consumer confidence.
GDP growth in Australia came in at 0.5 percent for the June quarter, slightly below expectations of 0.6 percent. Still, that put year-on-year growth at 3.3 percent, leading Treasurer Scott Morrison to say:
“Today’s June Quarter National Accounts confirm that 2015-16 was Australia’s 25th consecutive year of economic growth and show our economy growing at the fastest rate in four years, but we must continue to push for stronger growth.”
As they say in baseball, “you can’t boo a home run,” but there was a little less to cheer about in the figures than it might seem at first glance. A big chunk of the growth came from pre election government spending, something that is unlikely to continue (note to ABS: don’t you want to seasonally adjust for this?) Our terms of trade also increased by 2.3%, aiding growth.
Nominal GDP growth remained below trend and below Treasury budget forecasts at an annual rate of 3.4%. This is the key figure for tax receipts. Remember that the budget – which still had a lot of flowing red ink involved in it – forecast a return to 5% nominal GDP growth over the coming years. That still looks a way off.
Speaking of growth, as the G20 met in China the IMF laid the groundwork for a lowering of its 3.1% global GDP growth target when it revises its figures in October. It warned the original goal would not be met: “without quick implementation of all announced measures and significant additional efforts to boost productivity, especially in advanced economies”. Translation: “Houston, we have a problem.” Again.
This week also saw the announced of the US Federal Reserve “beige book”. This odd-sounding object is a compendium of anecdotal evidence – collected by the constituent Federal Reserve Bank – published eight times per year.
The book provided further evidence, albeit anecdotal, that the US economy is slowly bouncing back:
“Reports from the twelve Federal Reserve Districts suggest that national economic activity continued to expand at a modest pace on balance during the reporting period of July through late August. Most Districts reported a "modest” or “moderate” pace of overall growth."
What we know for sure is that global growth is low and below expectations. It looks like the US economy is bouncing back. And GDP numbers in Australia look good, but when one looks one level below, the picture isn’t so good.
Richard Holden is professor of economics and PLuS Alliance Fellow, UNSW Australia and author for The Conversation. He can be contacted <a href="https://theconversation.com/profiles/richard-holden-118107" target="_blank">here</a>.
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Scrape below the surface and the economy doesn’t look so good 

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GUEST OBSERVER
The energy sector is dealing with a complex mix of relationships between consumer trends, global commodity markets, and state, federal and industry regulation.
Because large established companies in electricity generation and distribution and coal and natural gas export have a lot of influence in this process, Australian energy regulations reflect more traditional energy provision rather than global trends where renewable energy is becoming more prevalent.
State governments are currently coming to terms with the regulatory changes needed to accommodate public support for disruptive technology. One example is the ongoing adoption of ride-sharing company Uber. However this same pragmatism needs to be reflected in preparations for the provision and consumption of energy in Australia. The energy companies that are prepared for this disruption will survive and flourish, while those that cling to traditional structures will struggle.
<div id="responsive-iframe-0">Evidence of disruption</div>
Globally energy companies are already showing signs of being affected by the looming disruption. Coal miners have been subjected to multiple forces over the last decade, but the changing landscape associated with new forms of energy, is a strong influencer of their performance. Coal companies in the US are facing dwindling share prices or bankruptcy like Peabody Energy and Arch Coal.
Tesla’s share price, which increased from US$28.52 in August 2012 to US$220 in August 2016, is more than double that of more traditional vehicle company Toyota. Toyota has experienced moderate growth from US$79.62 in August 2012. With electric vehicles forcing themselves into the motor vehicle market, technological disruptors like Tesla are seen as more likely to succeed than traditional motor vehicle companies like Ford.
West Texas Intermediate, a benchmark international oil price, declined from US$133 a barrel in July 2008 to US$45 a barrel in July 2016. This followed a slowdown in global growth after the global financial crisis and increased production of oil in Saudi Arabia, which some claim is to gain market share. Coal prices for export from Australia have fallen from A$180 a tonne in July 2008 to A$63 a tonne in July 2016 as China’s voracious appetite for coal has declined.
International natural gas prices have also declined because in Europe the natural gas price has been referenced to the oil price. Separate to this, the US price of natural gas declined as a result of new drilling technologies which released huge quantities of natural gas onto the US market, dragging down the price.
Many of these global trends are apparent in Australia too. Coal export prices have caused concerns for existing companies to the extent that new mine development has been shelved since 2008. Coal mine profits have dwindled and job losses abound.
Ambitious plans for coal seam and natural gas extraction for export to Asian markets have been curtailed with some experts predicting still further price declines in response to oversupply.
While there have been recent small upticks in prices, the trend for Australian primary energy company share prices since early 2014 has been downwards.
<h2>Challenges facing the Australian electricity generation sector</h2>
The electricity sector in Australia is facing multiple challenges. Electricity consumption has declined since 2009 and is forecast to increase only slightly by 2035/6. The closing of large energy users like the Kurri Kurri aluminium smelter and the Clyde Oil refinery, and a shift by residential consumers to the consumption of electricity from solar panels have contributed to this trend.
This is coupled with increasing supply of energy from low marginal cost wind power which, if the Australian National Energy Market is working as designed, reduces the spot price for electricity.
Many electricity generators have launched or acquired retail businesses to market directly to customers. AGL and Origin are the two largest of these “gentailers”, with a combined 56% of the small customer market in the eastern states. However, there is potential for disruption to this existing industry model. 1.57 million households now have solar panels on their roofs, and residential batteries are expected to increase consumer control of residential electricity.
Startups like Sunverge, Reposit and Powerledger are looking to connect households with spare energy to households buying spare energy. Mojo Power is offering customers fixed price packages that are more reminiscent of mobile phone offers than electricity. At this stage it is unclear whether the National Electricity Market will play a part in, or hinder, these new business models.
A few retail companies, like Red, Lumo, Powershop and Infinite spruik their renewable energy credentials. Renewable energy is viewed very favourably by the public.
Recent polling suggests that 71% of respondents would favour a government that facilitated greater support for solar panels and batteries. Energy giant AGL has a larger renewable energy portfolio than Origin making it slightly more attractive to consumers with environmental concerns, but it is exposed to the risk of owning a large coal generation fleet.
Infigen is the only renewable, publicly listed company. Infigen faced torrid times during the multiple back-to-back reviews of the Renewable Energy Target, but since the target has been set at 33GWh, Infigen’s share price has been recovering.
Of note, is the share prices of domestic energy companies AGL and Origin who are both in the business of generating and retailing electricity and previously were both engaged in the development of coal seam gas. Origin has continued its coal seam gas investment while AGL exited the market. AGL has instead focused more on diversifying its electricity generation portfolio. Part of this strategy has involved formulating innovative plans for virtual power stations of consolidated rooftop solar panels and residential batteries.
Origin’s foray into the export of Liquid Natural Gas (LNG) has not been good for its share price. Concern over debt related to the investment in LNG and exposure to declining LNG prices has worried investors.
<h2>Electricity distribution also faces multiple challenges</h2>
Electricity distribution companies in Australia are regulated monopolies. Distribution companies in NSW and QLD have been government owned and as a result of hefty investment plans, large electricity price rises were passed through to customers after 2009. This was at the same time as environmental charges were being included in electricity tariffs.
Customers were angered by the rise in electricity prices, but the NSW and QLD governments have enjoyed the profits that have flowed back into state coffers.
The NSW government is now seeking to sell a large share of its distribution businesses, although the most promising buyers have been knocked back by the federal government due to security concerns. With the popularity of solar panels and the expectation about the benefits of battery storage to meet demand after sundown, investors buying into the electricity distribution sector will be facing disruption.
Origin and AGL have gambled on different strategies to face a future with carbon constraints and technological disruption. Origin has bet on natural gas being a transition fuel to a cleaner energy future, while AGL is betting on electricity from renewable sources with batteries as the preferred path.
Energy distribution companies need to wrestle with the technological disruption that is looming from decentralised, distributed generation from solar panels, batteries and peer-to-peer energy transactions. Coal miners should seriously consider diversification to face a carbon-constrained future. The energy sector is in a state of transition; profits and share prices may be volatile for a few years to come. It would be advantageous if regulation did not get in the way of the shifts already evident.
Lynette Molyneaux is researcher, Energy Economics and Management Group, Global Change Institute, The University of Queensland and author for The Conversation. She can be contacted <a href="https://theconversation.com/profiles/lynette-molyneaux-9433" target="_blank">here</a>.
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Company results wrap: energy companies are facing disruption

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The Reserve Bank of Australia announced it will hold the official cash rate in September at the historically low rate of 1.50 percent.
The decline of rates throughout 2016 may be partly attributed to the stubborn Australian dollar, which hovered around US$0.76 for most of July and August. The RBA have used subtle language and interest rate cuts in an attempt to de-value the Australian currency over the year.
A lower Australian dollar increases competitiveness of Australian goods. It also increases general prices through imported inflation, lifting the price of imported inputs for Australian goods and services. The annual inflation rate of just 1% to June in Australia looks set to remain low, at least over the remainder of the year.  
Despite the best efforts of the RBA, the AUD continued to climb gradually since May, which partially contributed to the August cut. The persistently high AUD made a case for further rate cuts.
That was, until, Federal Reserve Chair Janet Yellen spoke at a symposium on the 26th of August.
Yellen argued that strengthening in the US labour force meant “the case for an increase in the federal funds rate has strengthened in recent months”. The speech was followed by comments from the Vice Chair Stanley Fischer, who indicated that US rates could rise as soon as September.
This hint at higher interest rates saw a boost to the USD, and a complementary weakening in the AUD. Graph 1 shows the movement of the AUD relative to the USD over August. This took pressure off the RBA to use monetary policy as a means to lower the dollar, and may have contributed to the hold decision this month.
Graph 1: AUD/USD-August 2016
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Source: RBA &amp; Trading Economics
The next Fed rate decision is September 22nd, and an increase is likely to place further downwards pressure on the AUD and potentially create room for the RBA to delay further rate cuts.
This is important, because residential property value growth and dwelling approvals in Sydney and Melbourne have continued to be reactive to rate cuts earlier this year. Across Australia, dwelling construction saw a 1.2% increase over the June quarter, and a strong 6% increase over the year. Meanwhile, other sectors of construction work fell dramatically: engineering work fell by 9% in the quarter, and private construction fell by 14% over the period. 
Building approvals were up across Australia in July, as the number of units approved increased 4.97% year on year. However, across the country the number of separate houses approved fell by 3.19%. Much of the growth in dwelling approvals for the year was driven by the Sydney and Melbourne markets. This was expected following a May rate cut as more dwelling development projects gain cost benefit. A hold in rates is likely to see the market steady.  
Graph 2: Trend Data - Residential Dwelling Approvals Australia Wide
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Source: RBA &amp; Onthehouse.com.au
Graph 3: Trend Data - Total Residential Dwelling Approvals by Capital City
<a href="/images/2016/09/08/Screen%20Shot%202016-09-09%20at%208.48.09%20AM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/09/08/Screen%20Shot%202016-09-09%20at%208.48.09%20AM.png" alt="">
Source: RBA &amp; Onthehouse.com.au
The number of dwelling approvals across Australia over time is shown in Graph 2. While 2012-15 saw a steep increase in the number of dwelling approvals, another small upward trend can be seen over 2016. Graph 3 shows the original monthly data of total dwelling approvals by capital city (which is volatile relative to the trend data), with Sydney and Melbourne experiencing a significant surge.
The movements in dwelling approval data is expected, as it follows capital growth in the dwelling market. Following the May rate cut, Residex observed strong growth in Sydney and Melbourne dwellings for the June quarter, including a 1.85 percent surge in Sydney units, and 2.29 percent in Melbourne units.
The RBA faces a two-tiered economy in which housing has boosted growth in the south-east coast of Australia, while growth in other cities across Australia is subdued. Part time employment in Australia also reached a record high of 31.63 percent in July, suggesting ongoing structural challenges in full time job creation and wage growth. As the rate is held for September, we may expect these east coast markets to steady a little, and growth in approvals start to flatten.
Eliza Owen is market analyst for Onthehouse.com.au and can be contacted <a href="https://www.onthehouse.com.au/" target="_blank">here</a>.
 
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The RBA faces a two-tiered economy: Eliza Owen

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<img src="https://counter.theconversation.edu.au/content/65092/count.gif" alt="The Conversation" width="1" height="1">
GUEST OBSERVER
Prime Minister Malcolm Turnbull recently said:
“China has more freedom to invest in Australia, indeed all foreigners have more freedom to invest in Australia, than almost any other country.”
But is this true? We asked two experts to discuss the evidence for and against this statement.
Gennadi Kazakevitch argues Turnbull is right given Australia’s ranking as a free and open market, while Jeffrey Wilson presents evidence to show Australia’s foreign investment regime has become much more closed in recent years.
Gennadi Kazakevitch:
I think Mr Turnbull is right.
One measure to support this is the well-established inter-country comparison of economic freedom regularly published by the Heritage Foundation and Wall Street Journal. This measure also looks specifically at foreign investment freedom.
The economic freedom measure ranks countries according to rule of law, government size, regulatory efficiency and – of most relevance to this discussion – market openness. This includes trade freedom, investment freedom, and financial freedom.
In terms of general economic freedom, Australia ranked fifth behind Hong Kong, Singapore, New Zealand, and Switzerland in 2016. Within the “Open Market” component of the index, Australia scores 80 out 100 for investment freedom, putting us among the most free of the 200 countries ranked.
To score a perfect 100, according to the index, a country would have to have no constraints on the flow of investment capital. Individuals and firms would be allowed to move their resources into and out of specific activities, both internally and across the country’s borders, without restriction.
Points are deducted for different sorts of freedom “imperfections”. For Australia, one “imperfection” is the regime of foreign investment reviewwhich requires government approval of investment amounts above a particular level. But Australia’s current review regime does not discriminate against China or indeed any other country.
Jeffrey Wilson:
Australia’s foreign investment regime is more open than many other countries. However, it also remains the case that it has become much more closed in recent years.
Since taking office in September 2013, the Liberal-National Coalition government has imposed several new barriers to foreign investment coming into Australia. These policies include:
<ul>
<li>
The introduction of fees for FIRB applications, and an expansion of the range of sanctions and fines applied to breaches.
</li>
<li>
Instituting new and very low FIRB screening thresholds for investment in the rural sector, including A$15 million for agricultural land and A$55 million for agribusinesses. The threshold had previously been A$255 million.
</li>
<li>
The establishment of a register of ownership of agricultural land. While this is ostensibly designed to “increase transparency”, Deputy Prime Minister Barnaby Joyce explained the intention was to produce a map that would allow people to “see who owns what”.
</li>
<li>
The appointment of two new FIRB Members – David Irvine and David Peever – in order to add further “national security expertise”to the board.
</li>
<li>
Extending the application of the Foreign Acquisitions and Takeovers Act (Cth, as amended) to infrastructure sales made by state governments.
</li>
</ul>
The LNP Coalition government has also rejected a number of foreign investment applications on controversial grounds:
<ul>
<li>
Archer Daniels Midland (US) takeover bid for GrainCorp, 2013. The former head of the FIRB has claimed the deal was killed for political reasons.
</li>
<li>
Dakang Holdings and Pengxin Group (China) bids for Kidman cattle properties, 2016. The bidders appear to have been rejected simply because no Australian buyer made a competitive offer.
</li>
<li>
China State Grid bid for Ausgrid in NSW privatisation program, 2016. Treasurer Scott Morrison refused to explain the full reasons for the rejection, citing national security and confidentiality concerns.
</li>
</ul>
Tellingly, in its entire six-year term in office, the Rudd/Gillard ALP governments rejected only a single large foreign investment application: A bid by the Shanghai Stock Exchange to acquire the ASX in 2011.
As a result of these policy changes and investment decisions, the Australian foreign investment regime is now less open than it has been for over 20 years.
The prime minister’s claim was about the freedom of Chinese companies to make foreign investments into Australia. Unfortunately, there is no quantifiable metric that measures the openness of a country’s foreign investment regime specifically. The Economic Freedom statistics Gennadi cites are instead a broader measure of economic openness and transparency. Thus, they cannot be used to evaluate the prime minister’s claim.
Gennadi Kazakevitch:
The investment freedom component of the economic freedom index is not a perfect measure, but it is sophisticated. It allows for comparing “apples with apples” based on eight qualitative characteristics: national treatment of foreign investments; transparency; policy implementation; restrictions on land ownership; sectoral restrictions; expropriation of investments without fair compensation; foreign exchange controls; and capital controls. For each of those characteristics, there is a breakdown into several levels of restrictions, rules or practices.
It is true that in the most resent years (2012-2016) the investment freedom score for Australia has decreased from 83.7 to 80. But it is also true that Australia remains within a cluster of free economies.
It would be easy to attribute the decline in Australia’s score to the recent changes to regulation rules and practices. However, those changes have not critically affected the investment freedom index for Australia, nor are they discriminatory against a particular country. Therefore, Mr Turnbull’s statement is quite justified.
The six years of Rudd/Gillard ALP governments Jeffrey is referring to was business as usual as far as foreign investment was concerned. However, it is not business as usual any anymore. The most recent cases, such as the Port of Darwin, the Kidman station, and the Ausgrid power transmission business in NSW, have alerted the government and public to national security issues, and rightfully so.
As I proposed in my submission to the Senate inquiry on the foreign investment review framework, the world has changed dramatically since the current regulation was established in 1975.
Until the late 1980s, Australia’s investing partners were mostly persons and companies from developed market economies with similar values and similar foreign investment perceptions of independent entrepreneurship. Economic transition in communist countries, market reforms in one-party controlled countries, and emerging developing market economies have created a variety of economic systems with very different sovereign involvement in running economies and companies. Therefore a “foreign interest independence test” and security risk assessment should be done that takes into account which country the foreign investor is from.
If Australia eventually goes down this path, freedom of investment might be further compromised. If so it will arguably be for a good reason.
Jeffrey Wilson:
It is certainly true Australia’s foreign investment partners have changed many times through history. Prior to the 1950s the main foreign investor was Great Britain, which remains a major investor to this date. But progressive waves of new investors have also arrived: America during the 1960s; Japan in the 1970s; Singapore and Hong Kong in the 1990s; and more recently Chinese investors since 2005.
The arrival of each of these groups has presented Australia with distinct political tension. American investors faced accusations of “neo-imperialism” and threats to Australia’s independence in the world. Japanese investors faced considerable xenophobia, particularly as a result of “war memories”. And today, we are dealing with the fact that many Chinese investors are state-owned corporations, which pose their own unique political and regulatory challenges.
However, these are arguably issues to be managed rather than reasons to reject foreign investment. Australia is a small open economy, which depends on foreign investment to bring in the capital, technology, skills and marketing channels critical for 21st century industries.
In each previous wave, Australian governments have had to devise novel solutions for how to remain open to foreign investment, while managing their distinct political sensitivities. This has been successful in previous years, and there is no reason it should not be possible with Chinese investors today.
Jeffrey Wilson is fellow of the Asia Research Centre, Murdoch University and author for The Conversation. He can be contacted <a href="https://theconversation.com/profiles/jeffrey-wilson-12717" target="_blank">here</a>. Gennadi Kazakevitch 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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Do foreigners have more freedom to invest in Australia than in almost any other country?

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GUEST OBSERVER
Today’s millennials are fast turning their backs on traditional marketing, instead choosing to consume and interact through virtual reality, but their willingness to buy into the imaginary and immaterial has real life conversions.
Long before the Pokémon renaissance took full effect, Marshall White Projects was reinventing the way off the plan properties are marketed and sold to Gen Ys and Millennials. 
This generation has changed the game; they are heavily reliant on the digital sphere and entrust it with major life decisions.
People plan dates, book accommodation and apply for jobs with people they’ve never met and in places they’ve never been, online every day – so why would we expect any less of them when it comes to purchasing property?
This demographic is more accepting of the off-the-plan model and accustomed to investing in sites unforeseen, so what is it that makes them take the plunge, swipe right and commit to the unknown? 
Aesthetics. They say a picture speaks a thousand words and for a time-poor generation with a shorter attention span than a goldfish, it isn’t any wonder that digital assets are outperforming traditional marketing strategies. 
These buyers are far savvier for having grown up in a digital landscape, their discerning tastes transcend the physical with renders, fly throughs and 3D floorplans of greater value to them than a stagnant display suite.
With this in mind, Marshall White Projects took 308 Carlisle Street to market without a display suite nor budget for print advertising. Each of the 45 apartments were sold in under six weeks, with the majority of purchasers aged between 25 and 35. 
Drawn to the bohemian Balaclava location, buyers were enticed by a refined sales campaign that simply put forth the advantages of a well-connected lifestyle and an apartment of prestige. 
It’s not the first time Marshall White Projects has proved its ability to earn, not buy results in an overly saturated market. Earlier this year the agency sold all 27 luxury apartments at High&amp; Spring in the same timeframe without any traditional or digital advertising and achieved a staggering sales average of approximately $1,050,000 per apartment. 
Buyers are overloaded with choice and bombarded with advertisements, which has made them less perceptible to traditional marketing tactics. This as an opportunity to better invest the hundreds of thousands of dollars developers would spend on lavish display suites into innovative alternatives that are not only cost and time effective, but more authentic and impactful. 
In order to be effective you must know your audience, what they value, who they trust, where they source their information – these things often hold more significance than their gender or profession and allow us to develop tailored marketing strategies that resonate with our buyers on a deeper level.
Our integrated approach simplifies the sales process and leverages technology, videography, photography, renders, brand partnerships, and direct marketing to achieve a far more cost effect result within the shortest possible time frame.
Leonard Teplin is director, Marshall White Projects and can be contacted <a href="https://www.marshallwhiteprojects.com.au" target="_blank">here</a>.
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Gen Y changes the property game

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Former fashion identity Danny Avidan has emerged as the buyer of the Bronte RSL site.
Located at <a href="https://www.afr.com/real-estate/controversial-bronte-rsl-and-redevelopment-for-sale-20160713-gq4xw6" target="_blank">109-113 Macpherson Street</a>, the 21 unit project will be undertaken by the prestige residential developer, RDA Property Group.
It will have two one-bedroom with study units, two three-bedders and 17 two-bedroom units.
RDA's completed projects include the 12-unit Wave Tamarama and Belmont Wollstonecraft. 
The Bronte RSL site was offloaded by the Sydney developer Winston Langley.
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Danny Avidan's RDA buys Bronte RSL site

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Off-the-plan property portal Investorist has launched a B Round Capital Raising, seeking up to $7 million to further expand its global activities.
Investorist, with a valuation of around $30 million, comes with more than $45 billion in apartment listings and over 5,000 customers in 25 countries. 
Headquartered in Melbourne, Investorist was initially bootstrapped by Ellis before attracting seed investment from David Tarascio, chief executive of Salta Capital to fund expansion into China as well as other Australian cities.
The company undertook its A Round Capital Raise in July 2015, raising $ 2.5 million. 
<img src="/images/2016/09/08/Jon-Ellis.jpg" alt="">
 “We are currently in rapid global scale up mode, and the company is undertaking this next Capital Raise to drive further penetration into new and existing markets and fund the resources necessary to achieve this,” said Jon Ellis, founder and CEO of Investorist (above). 
“In Australia, about 60-70 percent of all apartment sales occur 'off market' or pre-launch with the remainder sold 'on market' after public launch.
"Whilst our platform has captured a healthy slice of these project listings, we have very ambitious targets, especially for the UK which is double the size of Australia's OTP market, and the US which is five times the size,” he added.
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Investorist seeks $7 million for global expansion

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

Joel Robinson

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

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

Sherpa acquires new site for second Brisbane apartment tower

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

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

Busy developer Aqualand Prestige has formally taken the next step in its expansion across Sydney's Lower North Shore, lodging a State Significant Development Application (SSDA) for its long-held Archer Street site in Chatswood.

The application covers <a href="https://www.apartments.com.au/new-apartments/51-55-archer-street-chatswood-nsw-2067">51-55 Archer Street</a>, a 1,767 sqm amalgamated site on the eastern edge of the Chatswood CBD, where the developer is seeking approval for a 45-level mixed-use tower delivering 114 apartments, including a significant affordable housing component, alongside retail, commercial space and six basement levels of parking.

The SSDA marks the latest milestone for a project Aqualand has been quietly progressing over the past two years. The developer first secured the site for its Aqualand Prestige platform before undertaking an alternative design excellence process with PTW Architects, ultimately avoiding a formal design competition through the Housing Delivery Authority pathway.

The proposal has evolved considerably from Aqualand's original concept. The revised scheme has been designed around larger owner-occupier product, with an unusually high proportion of three and four-bedroom apartments, targeting the more affluent buyer profile, and downsizer, emerging across the North Shore.

<img alt="Archer St" data-entity-type="file" data-entity-uuid="0171204c-5811-41b5-9b09-2335d1b7c3d0" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-07-22%20at%208.52.48%E2%80%AFAM.png?VersionId=6YTuxfq.puZo7k2wbfgemcO5K3QfXYGQ" />

The 114-apartment mix comprises six studios, 27 one-bedroom apartments, 18 two-bedroom apartments, 50 three-bedroom residences and 13 four-bedroom homes. A quarter of the building will be dedicated to affordable housing, well above the mandated 15 per cent&nbsp;

PTW has structured the building vertically, with affordable housing across levels one to six, premium apartments through levels seven to 31, duplex skyhomes on klevels 32 to 43, a penthouse on level 44, and a rooftop plant level above. Six basement levels will provide resident parking and servicing.

The tower is proposed to reach approximately 154 metres, placing it among a growing collection of residential high-rises transforming Chatswood's skyline.

Rather than competing purely on height, PTW says the design has been driven by creating a slimmer tower capable of delivering significantly larger apartments.

"The primary objective of this project was to create a distinctive building that stands out from the recently approved or built structures in the Chatswood area," the design report states, noting the structural efficiency allows greater investment into apartment quality and resident amenity.

Residents would have access to more than 450 sqm of communal open space including landscaped gardens, swimming pool, rooftop entertaining areas, fitness spaces, community gardens, children's play areas and barbecue facilities.

A major focus of the design has been the public domain.

The ground plane has been opened up through landscaped terraces inspired by Willoughby's sandstone ridges, with native planting, public seating, artwork, retail activation and a series of gathering spaces intended to soften what has traditionally been a hard commercial streetscape.

The landscape strategy references Blue Gum forests once common throughout the area, while incorporating Indigenous storytelling, public art and lighting installations to strengthen the connection to Country.

Chatswood has been one of Sydney's busiest apartment markets over the past 12 months, with a steady pipeline of both new project launches and fresh development applications.

Hyecorp recently launched Celine, a 122-apartment development just along Archer Street, while Changfa and Huirong Group are progressing The Anderson, an 84-apartment project on Anderson Street.

Develotek recently secured approval for a 101-apartment tower on Pacific Highway, while Tian An LFD received the green light for Hammond Greens, its apartment development on the edge of the Chatswood Bowling Club.

Commercial property developer FiveX is also making its move into the residential market. Last month it lodged plans for a 61-storey tower with 490 apartments, which, if approved, would become one of the tallest residential buildings in Chatswood.

Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/first-look-fivex-targets-chatswood-skyline-with-61-storey-tower-after-north-sydney-plans">First look: FiveX targets Chatswood skyline with 61-storey tower after North Sydney plans</a>

Aqualand is also expanding its development pipeline following the launch of its luxury residential brand, Aqualand Prestige. The developer has delivered a string of high-end apartment projects across Sydney's affluent suburbs over the past decade, most recently AURA by Aqualand on Walker Street in North Sydney.

[smartcode_project:default project_id=30959 project_image_fid=292863]

It has since quietly assembled its next wave of projects.

Earlier this year Aqualand launched Boronia in Roseville, a boutique 111-apartment development on Larkin Street. The project is one of the first significant apartment developments to launch in the suburb ahead of what is expected to become one of Sydney's most active new housing precincts under the NSW Government's Low and Mid-Rise Housing reforms, which allow greater density around train stations.

[smartcode_project:default project_id=152095 project_image_fid=373685]

The developer has also lodged plans for a two-tower, 413-apartment development on Herbert Street in nearby St Leonards, further strengthening its presence across the Lower North Shore.

Beyond that, Aqualand remains behind the final stage of Barangaroo, where plans will deliver a five-hectare mixed-use precinct comprising new homes, retail, hospitality and community facilities, alongside a new Metro entrance and more than two hectares of public open space, completing the Barangaroo precinct.

Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/central-barangaroo-development-takes-big-step-with-concept-proposal-approval">Central Barangaroo development takes big step with concept proposal approval</a>

Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/first-look-aqualand-joins-st-leonards-apartment-party">First look: Aqualand joins St Leonards apartment party</a> 
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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.

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The more traditional interpretation of wellness comes in the form of Level Eleven, a two-storey wellness club spanning the ground floor, mezzanine and first floor.

The facility will include a gym, yoga and reformer Pilates studios, Finnish and infrared saunas, magnesium hot and cold plunge pools, and dedicated recovery spaces. Unlike many residential wellness facilities, Level Eleven will also operate commercially, allowing the broader Bowden community to access the venue while giving residents exclusive membership benefits.

The ground floor has also been designed around everyday living. A café overlooking Bowden Village Reserve will activate the street frontage, while a bike workshop with tool storage, co-working space and dog wash has been incorporated to support daily routines and encourage interaction between residents.

"Flowe brings together my two biggest passions, creating places and creating healthier lives," Otello founder Daniel Harris said.

"We wanted to create something Adelaide hasn't seen before, a genuinely healthy building, where the way you live is lifted without even trying."

Flowe is positioned directly opposite Bowden Village Reserve and within walking distance of Bowden Railway Station and the Adelaide Entertainment Centre, placing future residents just minutes from the Adelaide CBD while remaining connected to one of the city's most established urban renewal precincts.

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Jonathan Chancellor

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