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It seems the urban renewal of middle ring suburbs has created a clique crystal ball holders within councils that every 50 unit tower that pops up on every street corner must have a retail component to “activate” the street front.
In a Truman Show style utopia of urban planning that would be ideal, however the economics of it can be a fool’s game.
Let’s have a look at the numbers of a typical residential project based on an actual example, to consider the value of the completed product and the relevant cost to deliver it:
The resultant feasibility shows that there is $5m profit to be made from a 65 unit project however, there is $5m of value tied up in the 800m2 retail / commercial component.
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Even assuming the developer gets it right in terms of the demand for his apartments and they are all sold prior to completion and that all the stars align for the construction process, our man takes on all this risk to deliver a $30M project only to be rewarded as the proud owner of a vacant shell of retail space.
This is a common occurrence and there is a very real risk he will find himself struggling to fill it and wind up dealing with mum and dad operators undertaking a start up a take-away shop/cafe selling $5 items to the “masses” of foot traffic passing their secondary street location.
Let’s also look at it from a capital invested vs capital return standpoint;
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Based on a very healthy bank lend of $19.2m the developer needs to put in $5mil of cash together with any DA and preliminary costs which aren’t shown in the feasibility.
Now, let’s think about it from a developer point of view assessing their risk vs reward in terms of a timeline.
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Some of these processes can be run in parallel or overlap, but it still demonstrates the amount of time effort and money a property developer will contribute to a 65 unit mixed use development.
So in summary, after 20-24 months of planning, negotiating sales, finance, supervision of a $20M construction program to completion and risking $5m of real capital, you end up being rewarded with a retail / commercial asset of somewhat dubious value relative to its original estimated “on completion” value.
And unless you can find a way to actually realise that value, you have effectively done it for all for practise!
So, before you commit to building a project of this nature, do your homework carefully because just because the town planners say it’s a requirement doesn’t mean it is a viable and profitable option.
This article was written by Dan Holden of HoldenCAPITAL, who are a bespoke construction finance firm, they arranged over $300 million of construction finance in 2015 across 52 projects. To discuss your project finance requirement please call (07) 3171 4200 or visit <a href="https://www.holdencapital.com.au/" target="_blank">www.holdencapital.com.au</a> 
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Don’t build it, they probably won’t come: HoldenCAPITAL

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GUEST OBSERVERS
The RBA left the cash rate unchanged at 1.75 percent and provided no explicit forward guidance. The Bank seems confident that the transition to non-mining activity is continuing but remains worried about low inflation.
The lack of forward guidance means that an August rate cut is a much closer call than we had previously thought. That said, we continue to think that the extent of the downgrade to the RBA’s inflation forecasts and ongoing weak price pressures suggest that on balance the Bank will cut rates again in August, although it is now more data dependent.
DETAILS
The lack of a clear easing bias was the big surprise in today’s statement. The large downgrade to inflation in the May Statement on Monetary Policy suggested to us that more than 25bp of easing was required to keep real interest rates low, where the RBA’s forecasts also hinged on a further easing. Moreover, the Bank rarely cuts rates only once.
Last week’s strong Q1 GDP results were clearly encouraging for the Bank. RBA Governor Glenn Stevens noted that “despite a very large decline in business investment...other areas of domestic demand, as well as exports, have been expanding at a pace at or above trend”. The Bank also seems more positive about the labour market, noting the indicators are “consistent with continued expansion of employment in the near term”.
We expect, though, that the weak inflation outlook will continue to dominate the policy outlook. The Bank reiterated its concerns over inflation, noting that “inflation has been quite low...[and] this is expected to remain the case for some time”. The large downgrade to the RBA’s forecast inflation profile, where the average inflation forecast remains at or below the lower bound of the 2-3 percent target band for the entire forecast period, strongly suggests to us that the Bank will need to ease further. The recent uptick in the exchange rate and a possible delay to Fed tightening only puts further pressure on the cash rate.
Interestingly, the RBA seems relatively unperturbed by the recent pick-up in housing. The RBA acknowledged the recent rise in house prices, but noted that “lenders are also taking a more cautious attitude to lending in certain segments” and that “considerable supply of apartments is scheduled to come on stream”.
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While the RBA continued to reference any currency appreciation as a factor that can complicate the economic adjustment, these words will be superseded by the lack of an explicit bias in the final paragraph of the statement. With this guidance lacking, and weeks before we get any further read on either inflation or wages, the AUD will likely perform better on crosses, most notably AUD/NZD. Further depreciation against the USD will now become contingent on more USD strength. 
Rates markets have reacted to the RBA’s statement with higher yields across the term rates structure. RBA meeting date OIS pricing has shifted between 4-5 basis points higher, with the first full cut priced for June 2017. Further out the curve, the 3 year rate has risen by 8 basis points. We expect that significant sell-offs will find a base, particularly given a bounce in the AUD may be seen as a reason for easing. 
OUTLOOK 
The lack of an explicit easing bias makes an August rate cut a much closer call than we had previously thought. That said, we continue to expect a further cut given the size of the downgrade to the Bank’s inflation forecasts and the fact that the mid- point inflation forecast remains at or below the lower bound of the 2-3% target band for the entire forecast period. 
Felicity Emmett is head of Australian Economics, ANZ, Daniel Been is senior FX strategist and Martin Whetton is senior rates strategist. They can be contacted <a href="https://www.anz.com/corporate/research/" target="_blank">here</a>.
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RBA on hold in June and a higher bar for an August cut: ANZ's Felicity Emmett

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GUEST OBSERVER
At its June meeting the Reserve Bank Board decided to keep the cash rate steady at 1.75 percent.
This decision was widely expected but it did surprise us that the Board decided to provide no guidance on future policy movements.
The final ‘guidance’ sentence was neutral: “Taking account of the available information, and having eased monetary policy at its May meeting, the Board judged that holding the stance of policy unchanged at this meeting would be consistent with sustainable growth in the economy and inflation returning to target over time.”
Taken literally this statement does not preclude the possibility of further action in coming months, merely stating that it was not deemed necessary to take any action at the current meeting – a decision to move in June was never envisaged.
As we know from the minutes of the May meeting the Board deliberated about whether to move in May or whether to await further information and clearly with rates so low every adjustment must be considered very closely. As the forecasts in May stand the Board does not expect underlying inflation to return to the bottom of the band until 2017 and that will be supported by a second rate cut as indicated by market pricing in May.
Further information on whether that assessment in May is correct will be provided in the June quarter inflation report which prints on July 27 and will be available for the August Board meeting. It is our assessment that the information in that report will confirm to the Board that another cut is indeed necessary. However, it is clear from this statement that such an outcome is not considered automatic by the Board.
The commentary around inflation – “Inflation has been 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.” – opens up a potential debate as to whether the Board may be becoming more flexible on the timing for which underlying inflation returns to within the target band.
At the moment that timing is clearly within the two year forecasting framework and we expect that that discipline will be retained in the near term. Consequently any assessment of the inflation outlook when the June report is received will need to include a forecast that inflation returns to the band over the two year horizon. Further out if global pressures make it clear that achieving that target would require too large a further fall in rates then more flexibility may be adopted.
Certainly that approach would be consistent with our view that the expected cut in August would represent the low point in the cycle.
Whereas in previous statements prospects for policy were mainly driven by the commentary around demand, prospects in today’s statement are all about the inflation outlook. On the demand front, the statement is as expected reasonably constructive: “… recent data suggest overall growth is continuing …” and “other areas of domestic demand, as well as exports, have been expanding at a pace at or above trend.”
The most interesting commentary is around the housing market. Clearly the risk of pursuing an inflation target that is too high in the current disinflationary world is around over-stimulating asset markets and in the case of Australia, specifically housing.
The statement recognises that the recent rate cut may have rebooted housing but points out a number of reasons why this recovery is unlikely to be sustained, mainly around tighter lending guidelines, both voluntary and due to regulation, and expected increases in supply. This observation is important because it appears to allay any concerns that a further easing might over-stimulate the housing market.
Concerns around the Australian dollar remain. The surprise rate cut in May produced considerable dividends for the Bank in making a major contribution to the AUD falling from 0.77 to 0.72 US. That result would have been extremely welcome but it would also have been clear to the Bank that the adjustment in the currency was partly conditional on a follow up cut. The response to today’s statement has been for the AUD to lift further to above 0.74 and the statement does note an appreciating AUD will complicate the growth outlook and is therefore unwelcome.
The commentary around the world economy continues to be cautious with an uncertain outlook for China still the main focus.
Conclusion
In March 2015, following the decision, which came as some surprise, to cut rates in February 2015, the Bank chose to adopt a clear easing bias. That bias was acted on in May 2015. It was our expectation that a similar approach would be adopted at today’s meeting – that is, a surprise move would not have been considered without a likely plan to follow up with another. Unlike last March, no guidance was given today about that likelihood.
However, we cannot overlook the facts that under the current arrangements the Board will feel obliged to provide an inflation outlook which sees underlying inflation return to the target band within the forecasting period.
That period ends in June 2018 but will be extended to December 2018 at the August meeting. Based on the information available in May we do not expect that there will be a sufficient change in that information in the June quarter inflation report to justify a forecast return to the band even with a six month extension to the forecast period without a further rate cut. That task will be further complicated if the recent rebound in the AUD is sustained.
Consequently we recognise that a prudent central bank dealing with record low interest rates will seek to retain maximum flexibility as shown today but do not believe that today’s lack of guidance precludes a second rate cut in August. However, we do accept that the August cut is likely to represent the bottom of the interest rate cycle.
Bill Evans is chief economist of <a href="https://www.westpac.com.au/" target="_blank">Westpac</a>.
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August rate cut still likely: Westpac's Bill Evans

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<img src="https://counter.theconversation.edu.au/content/57114/count.gif" alt="The Conversation" width="1" height="1">
GUEST OBSERVER
Eastern Australia’s wild weather has left coastal homes teetering on the brink of collapse, and has eroded beaches by up to 50m in parts of Sydney.
Now the attention turns to the clean-up. There are several legal issues for owners of damaged properties, particularly the question of if and how they can be compensated.
While the recent events cannot be attributed directly to climate change, they are certainly consistent with a warming world. Our institutions are ill-prepared for a potential increase in the frequency and severity of such events.
<h2>Insurance</h2>
Unfortunately, the success of insurance claims for damaged homes in Sydney will depend entirely on the terms of their policies. Some policies don’t cover erosion at all. Some policies only cover it if it occurs within a certain proximity of another insured event (for example, within 48 hours of a named storm event). Some policies also comprehensively exclude coverage for damage caused by actions of the sea.
What’s more, while insurance will cover damage to buildings, policies do not extend to cover damage to or loss of land. This is especially problematic in the case of damage caused by waves and storms, because erosion will often result in loss of land.
Under the traditional law doctrine, where land is lost to erosion, the Crown automatically gains title to the inundated land, without any obligation to pay compensation. So even if a home-owner is insured, they may find themselves with no land to rebuild on.
<h2>Legal proceedings</h2>
Another potential avenue for home-owners to pursue is proceedings against the relevant local government for negligent approval of development. The success of this type of proceeding is highly speculative – much will hinge upon when the development was approved and how much information on the coastal hazards was available at that time.
Where development was approved decades ago, it may be difficult to prove that a local government was negligent, because of the limited state of knowledge at the time. In the case of more recent development approvals, there may be an argument that a local government had a high level of knowledge of the risk and control of risk information. These are the type of factors a court will look at in assessing negligence.
On the flip side, a court may also find that a landholder knew of and accepted the risk. Negligence proceedings are by no means a guaranteed avenue for landholders to recoup their loss, but are an avenue that Collaroy landholders may be able to explore.
<h2>Disaster assistance</h2>
Where insurance is not available, and there are no strict legal rights against government, landholders may request disaster relief or assistance from government.
Despite the lack of any legal compulsion to do so, Australian governments have a long history of providing disaster relief to citizens when an extreme weather event causes property damage.
A recent Productivity Commission report estimated that, over the past decade, the federal government spent A$8 billion on post-disaster relief and recovery. State governments spent a further A$5.6 billion.
However, the availability and amount of a payment are not guaranteed. This may depend upon the number of other claims for assistance, and any other demands on government resources. A claim for disaster relief from government may be an option for Collaroy landholders, but many other home-owners are also affected by flooding due to the recent extreme weather – and so potentially there are many other requests for relief.
<h2>What should we learn from this event for the future?</h2>
While the pictures of houses being lost to the sea in Collaroy are confronting, these images may become more commonplace. The most recent scientific report from the Intergovernmental Panel on Climate Change suggests that, under a business-as-usual scenario, a global sea-level rise in the range of 0.53-0.97m by 2100 is likely.
Even if emissions are immediately reduced, a global sea-level rise of 0.28-0.60m by 2100 is still possible. This will be especially problematic in Australia, with an estimated 711,000 residential addresses located within 3km of the shore and less than 6m above sea level – not to mention the billions of dollars' worth of government infrastructure also located in these regions.
As sea levels rise, some properties may be permanently inundated. Others may be hit by storm surge impacts or erosion, which may be exacerbated by sea-level rise.
If these events continue to attract disaster relief, the financial burden will become too great for governments to bear. Furthermore, government disaster assistance does not solve the more intractable problem of land being lost to the sea.
The pictures from Collaroy should therefore prompt a discussion about how we, as a society, can deal with the potential impacts of coastal hazards on existing developments.
This is a challenging question to answer, but there is an opportunity to address it in a planned and co-ordinated fashion.
Justine Bell-James is lecturer in law, The University of Queensland and author for The Conversation. She can be contacted <a href="https://theconversation.com/profiles/justine-bell-james-39245" target="_blank">here</a>.
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Sydney's wild weather shows home-owners are increasingly at risk

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GUEST OBSERVER
The Reserve Bank has left the cash rate at a record low of 1.75 percent. The Reserve Bank has maintained a “neutral stance” – indicating that policymakers will assess more information before deciding the next move on rates.
What does it all mean?
Did the Reserve Bank get it wrong when it cut rates last month to fresh record lows? Certainly all of the subsequent economic data have been strong including economic growth, which is now running at the fastest annual rate in 31⁄2 years.
The short answer is no. The Reserve Bank was already expecting Australian economic growth to be running at a 3 per cent annual rate over the next year. The Reserve Bank is always forward-looking – and despite expectations of solid 3 per cent growth, it cut rates. Simply, the Reserve Bank feels that the economy can run at a 3 per cent plus rate and not generate higher inflation. 
Certainly the environment has changed – with companies challenged by “disruption” at every turn, causing managers to focus on increasing productivity and efficiency and reducing costs rather than lifting prices. The Reserve Bank now assumes that underlying inflation will hold in a 1.5-2.5 percent range. That is, a mid-point of 2 percent is expected – the bottom of the Reserve Bank’s 2-3 percent target band.
Since the rate cut in May, the Aussie dollar has fallen from US77 cents to around US73-74 cents. And the currency is weaker despite higher commodity prices. The RBA notes “Low interest rates have been supporting domestic demand and the lower exchange rate overall is helping the traded sector.”
The accompanying statement was quite short. But there are interesting observations on housing. The RBA notes a lift in home prices. But it warns “considerable supply of apartments is scheduled to come on stream over the next couple of years, particularly in the eastern capital cities.” 
Perspectives on interest rates
The Reserve Bank left the cash rate at a record low of 1.75 percent. The previous rate cut was in May 2016 (25 basis points), taking the cash rate to a record low of 1.75 percent. 
There have been 11 rate cuts since November 2011.
The Reserve Bank had previously lifted rates seven times from October 2009 to November 2010 – a total of 1.75 percentage points, from 3.00 percent to 4.75 percent.
What are the implications of today’s decision?
We expect the Reserve Bank to stay on the interest rate sidelines until August. At the August meeting the Reserve Bank will have digested the latest inflation data (released end July) as well as the Brexit decision in the UK and the June and July rate decisions in the US.  
On balance rates still have scope to fall. It all depends on the Reserve Bank’s assessment on how fast the economy can grow without generating inflation above the upper end of the 2-3 percent target band.
This is a brave new world where old assumptions are being challenged. Investors need to do this also. In the past investors could work on the assumption of total sharemarket returns lifting on average by 9-11 per cent. With nominal economic growth closer to 4-5 percent, expected sharemarket returns also need to be adjusted down to a similar range.
Returns on residential real estate have averaged 13 per cent over the past two years. But over 2011 and 2012 returns averaged 2 per cent. With housing supply set to rise, even views on high-flying real estate will need to be adjusted downwards.
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Craig James is the chief economist at <a href="https://www.comsec.com.au/default.aspx" target="_blank">CommSec</a>.
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Reserve Bank mulls the next move: CommSec's Craig James

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A poll by the property agency iBuyNew found by a narrow margin that 54 percent of respondents said the election was not influencing their decision on whether to purchase a property.
Some 46 percent of respondents to the online survey said they would wait until after the July 2 election because they wanted to weigh up the policies which will impact the real estate sector.
iBuyNew CEO Mark Mendel said one of the main concerns was the proposed removal of negative gearing on established properties by the Labor Opposition as well as the halving of the CGT discount for assets held longer than 12 months from 50 percent to 25 percent. 
Mark Mendel predicted prices will rise after the federal poll.
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Property 101: Has the election delayed purchasing of property?

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GUEST OBSERVERS
The selection of Melbourne to participate in the international 100 Resilient Cities program sponsored by the New York-based Rockefeller Foundation generated a mix of hopes, expectations and concerns.
In a report released today, researchers assessing the program found a surprising degree of co-operation among the city’s many local councils. The result is the Resilient Melbourne Strategy, adopted this month, which marks a shift towards “whole-of-city” thinking.
In 2013, at the time of Melbourne’s selection, its fragmented governance was a concern. How could a framework for urban resilience emanating from the US be adapted to very different city governance structures operating in Melbourne? What could a single chief resilience officer (CRO) hope to accomplish in just two years across a metropolitan region with more than 30 local government authorities?
The Melbourne project began in earnest with the appointment of the CRO, housed at the City of Melbourne, in November 2014. A year later an RMIT University research team interviewed a wide range of people who were either closely involved with or clearly interested in the project implementation. Interviewees include those serving on the project steering committee, some who had attended a project briefing and some who had only been told about it.
<h2>Overcoming fragmented governance</h2>
It is fair to say the researchers were sceptical about what could be achieved in just two years to foster a city-wide approach to urban resilience. In Australia’s rather cumbersome, three-tiered structure of government it is hard to focus on metropolitan regions that fall somewhere between the responsibilities of state and local governments. Thinking about cities as a whole has only just entered the strategic thinking of our national governments.
Yet the researchers were pleased to find the project had generated unprecedented levels of co-operation involving 29 local government authorities in metropolitan Melbourne. The implementation process had met with widespread approval.
Each of the 100 cities now participating in the Resilient Cities Challenge is provided with a “City Resilience Framework”. This guides development of a specific strategy for the city.
<h2>Adapting to local conditions</h2>
The framework draws heavily on US experiences – especially that of New Orleans since the devastation of Hurricane Katrina in 2005. The Melbourne steering committee realised it would have to adapt the framework considerably to work in a city with 32 local councils.
In Toby Kent, the project initiators selected a CRO who had evident skills in motivation and negotiation. The researchers were told that the patient work involved in building collaboration across so many local government areas made the project stronger than it would have been otherwise.
The concept of urban resilience promoted by the Rockefeller Foundation urges cities to consider a wide range of potential “shocks” and accumulating “stresses”. The research found this approach promoted boundary-crossing dialogues. These exchanges involved people concerned with infrastructure planning, economic development, social care, community development and environmental protection.
Some of the interviewees expressed misgivings about the growing popularity of the concept of resilience in policy discourses. Despite this, the research findings suggest it does have a capacity to get people thinking beyond the normal boundaries of policy and practice.
<h2>Towards a more holistic view</h2>
In Australia, the concept of resilience has largely been associated with emergency management. However, the semi-structured research interviews tended to focus more on accumulating social, economic and physical stresses. These make the city as a whole more vulnerable, but are often neglected.
It was noted, for example, that urban planning can leave many people feeling socially isolated. One council has now applied “a lens of preventing family violence” into all areas of its work, ranging from infrastructure planning and economic development through to health promotion and community development.
The Resilient Melbourne project released a preliminary resilience assessment in June 2015. This was developed into the newly launched Resilient Melbourne Strategy.
Much of this strategy aims to “scale up” existing projects or initiatives. The aim is to demonstrate that these can be more effective on a metropolitan rather than localised scale.
Follow-up research will be needed to find out which elements of the strategy become embedded in the policies and practices of Melbourne’s local government authorities and the multitude or public and private sector organisations trying to ensure that vulnerabilities are addressed long before they become full-blown crises.
Importantly, the research found that the project was able to generate some innovative policy and practice dialogues and demonstrate the benefits of whole-of-city thinking.
Martin Mulligan is senior researcher, Globalism Research Centre, RMIT University and can be contacted <a href="https://theconversation.com/profiles/martin-mulligan-108697" target="_blank">here</a>.
Blythe McLennan is research fellow - Emergency Management, RMIT University and can be contacted <a href="https://theconversation.com/profiles/blythe-mclennan-8288" target="_blank">here</a>.
Tarnya Kruger is research assistant, Landscape and Environmental Sociology, University of Melbourne and can be contacted <a href="https://theconversation.com/profiles/tarnya-kruger-271311" target="_blank">here</a>.
All are authors for The Conversation.
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Has the 100 Resilient Cities Challenge benefited Melbourne?

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Patrick Gallagher and John Daly have sold PJ Gallagher’s in Leichhardt for $14.5 million to the hotelier Peter Walker.
Situated on the corner of Norton Street and Parramatta Road, it was the first venue co-owned by Gallagher and Daly.
It has been sold to raise capital for a larger as yet undecided joint project.
Gallagher and Daly completed a three-year, $2 million renovation on the hotel last year. The hotel also has 28 gaming machines and a 5am trading licence.
John Musca, national director of JLL Hotels &amp; Hospitality handled the sale.
“Much like the recent contested sales of the Royal Exhibition Hotel, Surry Hills ($19m) and the Duke of Gloucester Hotel, Randwick ($16.25m), PJ's is another quality city fringe hotel which deservedly attracted strong interest," Musca told The Shout.
Last month, JLL Hotels &amp; Hospitality also sold the leaseholds in the Liverpool Hotel and Corner Pub for Gallagher Hotels for a combined $12.5 million, so that the group can focus on freeholds.
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PJ Gallagher's Leichhardt hotel sold

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GUEST OBSERVER
With Melbourne driving 46 percent of Australia’s apartment development, it’s a good time to be a developer in the world’s most liveable city.
And in theory, it’s also a good time to be a purchaser as apartments flood the market, increasing stock and therefore theoretically driving down pricing. It’s the age old story of supply versus demand.
According to the Australian Bureau of Statistics, by 2020 Melbourne’s population will rise to five million, making it the largest city in Australia and sparking even more demand for more housing and apartments.
As a relative newcomer to the Melbourne property development scene, I’ve been striving to create innovative and affordable developments that provide people with access to purchasing property. Many of my friends work typical jobs, and I’d like to think they should be able to afford to live in said developments.
From my reading of the current situation and listening to debates play out in state and federal politics, it seems that access is currently at the core of the public debate and, more specifically, affordability to access.
I take the concept of affordability very seriously and in my position I’m fortunate to have control over providing reasonably priced property in the current market.
What is concerning from where I stand is the ability to deliver this. Hear me out because this is a very different point of view – one which isn’t discussed often in the public domain.
That is: the emergence of a new sub-market within the property market that is focused on acquiring land, receiving permit approval and selling without intention of going into construction.
While there are of course examples where the economy changes and you may not be able to build as planned, I think more and more permits are being sold and people are taking advantage of the demand for permit approval and selling at inflated prices.
This is where I find myself in a quandary. Of course, I agree with a free market and I applaud those who find new opportunities to create value out of the property market – this is innovative and entrepreneurial. 
However, as a developer who is trying to develop projects that are in the reach of everyday working people, I see how this practise limits what developers are able to do in terms of minimising the cost base of development.
If a vendor is selling at an inflated price, it creates a tricky situation for the buyers. The developer who purchases the site with the intention to build is forced to sell apartments at a higher price to meet their targets, which ultimately comes out of the purchaser’s pocket.
On the other side of the coin, selling at this inflated cost means local developers cannot afford to invest and that many of these sites can only be purchased by foreign developers. Therefore, the majority of the stock will be sold offshore to purchasers who can afford to buy at these inflated prices.
To put it very simply, let’s use the below example to articulate.
An original land owner has obtained a permit to build apartments on a site. Assuming the original holding cost is $10 million, the apartments could be sold to purchasers for around $8,000 per square metre.
The original land owner sees there is risk in developing and decides to sell the site to generate windfall profits with no associated risk. The site is then sold to another developer for $40 million. The new land owner will now have to on-sell apartments to end purchasers for perhaps around $10,500 per square metre in order for the development to provide a return.
As you can see, this trend is creating a vicious cycle. This begins with the permit approvals and leaves developers like us with no choice but to consider whether to follow the crowd, despite understanding the implications on affordability and local investment for the world’s most liveable city. 
With decent apartments in the city now all but out of reach of first homebuyers, it is now up to developers, agents, consumers and the government to intervene and look at limited restrictions that at least deters this flipping sub-market or to encourage developers to actually…develop.
Many people will fiercely disagree with my opinion on this sensitive topic, but this is out there now.
We should conduct ourselves for the future, not as a singularity.  
Mohan Du is founder and managing director at Capital Alliance Investment Group and can be contacted <a href="https://capitalalliance.com.au" target="_blank">here</a>.
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Melbourne driving 46 percent of Australia’s apartment development: Mohan Du

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<img src="https://counter.theconversation.edu.au/content/57114/count.gif" alt="The Conversation" width="1" height="1">
GUEST OBSERVER
Closed circuit street cameras have been sold to the community as a way of making us safer, reducing crime and discouraging anti-social behaviour.
But research into the Federal Government’s $50 million Safer Streets program shows its main effect has been unchecked proliferation of highly profitable commercial arrangements between governments and private firms, amid little evidence that it improves public safety.
The Tony Abbott-led government announced Safer Streets in 2014 to assist local councils finance the establishment of street camera systems, with a second round of funding unveiled last December.
Across Australia, 85 local councils received Safer Streets funding in the first round. Promoting the scheme during the Liberal Party’s 2013 election campaign, Bronwyn Bishop <a href="https://www.southcoastregister.com.au/story/1740109/coalition-pledges-cctv-funds/">said</a> the cameras would be a deterrent because people “know they are going to be caught”.
In 2014, Prime Minister Tony Abbott and then-Justice Minister Michael Keenan said: “All Australians have the right to feel safe and secure … and [this] program will help to achieve that.”
But while buttressing the Coalition’s national security agenda, Safer Streets has been criticised over a lack of evidence and political bias underpinning the funding policy.
In 2015 the Report of the Commonwealth National Audit Office was delivered following an inquiry into Safer Streets amid complaints that the funding program was <a href="https://www.propertyobserver.com.au/https://www.thesaturdaypaper.com.au/news/politics/2014/08/02/cctv-installation-crime-prevention-or-friends-the-government/1406901600">“</a>pork barrelling<a href="https://www.propertyobserver.com.au/https://www.thesaturdaypaper.com.au/news/politics/2014/08/02/cctv-installation-crime-prevention-or-friends-the-government/1406901600">”</a>.
The report was highly critical of the program with Safer Streets funding accessible to local councils strictly by invitation of the Government for the first round of grants.
Auditor General Ian McPhee found several “significant shortcomings” related to how the Attorney General’s Department conducted its eligibility checks, adding “the merit assessment process … was handled particularly poorly by the department”.
Safer Streets has been criticised for “a lack of transparency over its guidelines, its selection criteria, and ultimately, over which projects were chosen”.
Around 90 percent of first-round funding recipients were situated in Coalition federal seats. The second round of funding recipients, yet to be announced, is highly anticipated.
Safer Streets provided the Abbott Government with opportunities to cultivate grassroots support — or at least a perception of it — by requiring local councils to ceremoniously “accept” offers of funding.
Government MPs organised publicity, petitions and mobilised business chambers with “no strings” carrots of public subsidies. Buoyed by the support of business chambers they called upon taxpayers to finance the set-up and then the ratepayer to fund ongoing costs for CCTV, which have been exorbitant.
Safer Streets is part of a broader political-economic framework within which both electoral and commercial opportunities have been leveraged.
Internationally CCTV has played a significant role in the marketing of public areas as “clean” and “safe” in the efforts of local councils and business chambers to attract consumers, tourists and investment.
The Australian Security Industry Association Limited (ASIAL) notes expenditure on private security in Australia between 2012 and 2013 was almost $5 billion, of which $2.3 billion was spent on security devices, installation and monitoring. Australian Security Magazine claims “the electronic security market is forecast to experience double digit growth until 2020 and beyond”, concluding:
“The commercial argument for the use of security technologies over more traditional security measures has never been more valid.”
This prediction may be adequate considering the political climate. Demand for security tech and consulting has increased in light of the Coalition’s efforts to <a href="https://www.propertyobserver.com.au/https://www.thesaturdaypaper.com.au/news/politics/2014/08/02/cctv-installation-crime-prevention-or-friends-the-government/1406901600">enlist</a> local councils as new customers via Safer Streets.
A consequence of government-funded CCTV has been the portrayal of street crimes within a broader news advertising matrix. In one example government-funded CCTV footage was streamed online via the national Fairfax Media network depicting an assault against a recently arrived refugee in Wollongong flanked by advertisements.
As one study stipulates the marketing of CCTV footage by news companies has drawn consumers into a series of inter-related commercial activities through multimedia platforms. The adoption of CCTV footage has resulted in news media becoming a significant conduit conveying the political and economic meanings affixed to street camera footage.
But while there is little research evidence that street cameras reduce crime, politicians widely promote CCTV an effective crime prevention technology, which has led to uncritical policy transfer. In fact, Safer Streets has prohibited councils from utilising the grant scheme to conduct evaluations.
The potential for being discredited by objective evidence may explain why there is no strong desire expressed by politicians for local councils to produce regular CCTV evaluations.
Only one local council out of 18 surveyed nationally in 2014 had collected crime statistics within the surveillance area — namely, Shoalhaven City Council - yet here crime rates actually increased after cameras were installed, defying the logic of proponents.
Affirming the Coalition’s commitment to the political economy of street cameras, one Liberal MP says he would stand up for the use of CCTV established under Safer Streets and opposed “slick and sleazy” challenges to them.
“If you are doing nothing wrong, you have nothing to hide. Kiama’s businesses wanted this and should be protected, and so should law-abiding citizens.” - Gareth Ward, Member for Kiama
Addressing the Australian Government’s 2015 metadata retention laws, Edward Snowden is sceptical of the “nothing to hide/fear” logic stating that people who say they don’t worry about their privacy because they have nothing to hide “is like saying I don’t care about free speech because I have nothing to say”.
But a powerful pro-CCTV discourse is entwined in the construction of many politicians’ credibility and their public identities. Challenging these political and economic commitments to street cameras with an evidence-based perspective is unlikely to sway their efforts.
Robert Carr is researcher, Western Sydney University and author for The Conversation. He can be contacted <a href="https://theconversation.com/profiles/robert-carr-266152" target="_blank">here</a>.
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The booming business of CCTV and safer streets - safety or profit

The Victorian Government has secured the passage of the Building Legislation and Treasury Legislation (Tax Relief) Amendment Bill 2026, introducing a suite of reforms aimed at improving consumer protection and confidence in the apartment market.

Resilience Insurance, Australia’s leading Latent Defects Insurance (LDI) provider, has welcomed the move.

The LDI elements of the Bill passed with bipartisan support and now moves to the Legislative Council where debate and passage are expected later this month. It represents a significant milestone in the national shift toward stronger, longer-term protection for apartment buyers.&nbsp;

The reform would deliver practical benefits across the housing system. Apartment owners will have stronger protection if major defects emerge, developers and builders will have a clearer quality framework to work within, and the State will reduce the risk of serious building failures becoming a long-term financial and social burden for households, communities and government.&nbsp;

LDI helps support apartment delivery while providing stronger protection for buyers and encouraging better construction outcomes.&nbsp;

Resilience LDI provides apartment owners with 10 years of insurance-backed cover for major structural defects from completion, with direct claim access to the insurer. This means owners are not required to first pursue developers or builders through costly legal action before accessing protection.&nbsp;

Resilience Insurance has been operating in Australia since 2022 and has already insured hundreds of development projects covering many thousands of apartments across Australia.&nbsp;

At approximately 1.8 per cent of build cost, it is a cost-competitive alternative to the traditional two per cent Strata Bond, bond while delivering significantly broader and longer protection.&nbsp;

“The Victorian Lower House vote shows that reforms like this succeed when they are practical, evidence-based and supported by industry," says Corey Nugent, CEO of Resilience Insurance.

"Victoria is moving quickly on a reform that will make a real difference for apartment buyers, while supporting better building outcomes and greater confidence in apartment delivery.

“This is step one. We look forward to the Bill completing its passage through the Legislative Council and to working with government and industry to implement the framework effectively.”&nbsp;

Fast Facts: What is Resilience LDI?&nbsp;

<ul>
	<li>Resilience Latent Defects Insurance (LDI): Covers major structural defects for 10 years from completion.&nbsp;</li>
	<li>Consumer-first: Direct claim access, no need for lengthy legal action.&nbsp;</li>
	<li>Cost advantage: At approximately 1.8% of build cost, LDI is typically priced below the traditional 2% Strata Bond while offering broader protection.&nbsp;</li>
	<li>Market leader: Resilience Insurance is the first approved LDI provider in NSW.</li>
</ul>

The Building Legislation and Treasury Legislation (Tax Relief) Amendment Bill 2026 has passed the Victorian Lower House, putting Victoria on track to become the first state to legislate an industry workable LDI framework as a formal alternative to the Strata Building bond. 

Joel Robinson

10-year Latent Defects Insurance for new apartment buyers set to land in Victoria

Just a few months after acquiring a prime Broadbeach site on the corner of First Avenue and Surf Parade, family-run developer <a href="https://www.apartments.com.au/developers/raptis">Raptis</a> has filed fresh plans for a new apartment development.

Raptis is seeking to deliver a <a href="https://www.apartments.com.au/new-apartments/17-19-first-avenue-broadbeach-qld-4217">29-storey tower with 73 apartments</a> on the 818 sqm site. It will be the developer's seventh project in the suburb, as they are approaching completion of The Sterling on George Avenue.

There will be a pool, barbecue and outdoor dining area, residents lounge and dining, sauna and steam room, gym, and a Yoga and Pilates studio.

<img alt="Raptis" data-entity-type="file" data-entity-uuid="b554da3f-7344-49aa-b1c9-44cf459af0d7" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-06-05%20at%2010.41.45%E2%80%AFAM.png?VersionId=zzjWu1iO1wnuYv4EV4fyOyf5nSXjGYut" />

Raptis Joint Managing Director, Evan Raptis, says they remain&nbsp;committed to developing quality infill sites across the Gold Coast in the lead-up to the 2032 Brisbane Olympics.

"This project continues our long track record of delivery in Broadbeach, and we look forward to bringing another premium development to this thriving precinct."

The announcement follows strong delivery momentum for Raptis, with The Sterling Broadbeach nearing completion and construction well underway on the final stage of the Waterpoint community adjacent to Harbour Town. The developer's continued investment in the Gold Coast reflects confidence in the region's apartment market fundamentals, underpinned by sustained Southeast Queensland population growth.&nbsp;

The outlook for the region is further bolstered by infrastructure investment tied to the Brisbane 2032 Olympic Games, which is expected to drive continued economic and population growth across the SEQ corridor.&nbsp;

Subject to a favourable response from Gold Coast City Council, construction on the new First Avenue tower is targeted to commence before the end of 2026.&nbsp;

Read more:&nbsp;<a href="https://www.apartments.com.au/news/qld/it-s-all-in-the-family-four-decades-later-raptis-continues-to-shape-the-gold-coast-skyline">It’s all in the family: Four decades later, Raptis continues to shape the Gold Coast skyline</a>

Read more: <a href="https://www.apartments.com.au/news/qld/raptis-secures-prime-surf-parade-site-for-next-broadbeach-apartment-development">Raptis secures prime Surf Parade site for next Broadbeach apartment development</a> 
&nbsp;

Gold Coast developer brings seventh Broadbeach project to market, targeting construction commencement before year end

First look: Raptis lodges plans for new 29-storey Broadbeach tower 

Brisbane development veteran Kevin Seymour's Seymour Group is set to deepen its presence on one of Brisbane's most tightly held riverfront addresses, lodging revised plans for a luxury apartment development on Oxlade, just a few doors down from The Oxlade, which it completed in 2024.

The <a href="https://www.apartments.com.au/new-apartments/70-72-oxlade-drive-new-farm-qld-4005">new project at 70-72 Oxlade Drive</a>, directly north of The Oxlade, will have 27 apartments across a seven-storey building&nbsp;overlooking the Brisbane River and Merthyr Park. It's a revision from a 2021-approved design.

Designed by bureau^proberts, the project has evolved from the previously approved 26-apartment scheme, introducing an additional penthouse level while maintaining a low-density, boutique character. The development will comprise 26 three-bedroom apartments and a single four-bedroom penthouse, supported by two basement levels with 86 car spaces and 34 bicycle spaces.

The architectural response is centred around two distinct building forms separated by a landscaped open-air atrium.&nbsp;"This dual composition captures and embraces Brisbane’s subtropical environment whilst breaking down built form and scale," the submission to the Brisbane City Council noted.

<img alt="First look: Seymour Group returns to Oxlade Drive with revised riverfront apartment plans in New Farm" data-entity-type="file" data-entity-uuid="c12d84d0-bc11-4067-b46f-5bd2d786a34d" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/new%20farm%20landscape.png?VersionId=YEPc2k5CAdh6aAPlu4uVpgZadh4MEfRd" />

A defining feature of the design is a deep landscaped void running through the centre of the building, creating what bureau^proberts describes as a "natural ravine" that enhances airflow, daylight penetration and resident amenity. The design report notes that the separation of the two building volumes is intended to maximise natural light, cross-ventilation and outlook while strengthening connections to the surrounding riverfront setting.

Curved balcony edges, integrated planting and extensive landscaping throughout the façade reinforce the subtropical design approach. The building's façade is softened by elevated gardens and planter beds, creating a green edge that complements the established landscape character of Oxlade Drive and neighbouring Merthyr Park.

New Farm has become one of Brisbane's most sought-after suburbs for developers delivering premium downsizer-focused apartments.

GRAYA has been particularly active in the precinct, completing both Chalk and York in recent years, while construction of Moray House, being delivered for Spyre, is now nearing completion. Architect-turned-developer Joe Adsett recently launched <a href="https://www.apartments.com.au/new-apartments/arcilla-new-farm-by-joe-adsett-28-maxwell-street-new-farm-qld-4005">Arcilla on Maxwell Street</a>, an exclusive collection of just nine apartments.

First look: Seymour Group returns to New Farm's Oxlade Drive with riverfront apartment plans

A new residential tower will be the first piece of a broader mixed-use precinct set to reshape a prominent Newcastle West site, with local developer <a href="https://www.apartments.com.au/developers/gwh">GWH</a> bringing its <a href="https://www.apartments.com.au/new-apartments/cambridge-quarter-newcastle-west-12-denison-street-newcastle-west-nsw-2302">Cambridge Quarter</a> vision to market.

The first release, Tempo, will introduce 87 apartments across a 24-storey tower, marking Stage 1 of the residential component of a larger urban regeneration project planned for the western end of Newcastle's city centre, encompassing the former Cambridge Hotel site.

Positioned on Denison Street, Tempo has been designed as the inaugural building within Cambridge Quarter, a precinct that will ultimately combine apartments, retail activation and revitalised public spaces including the revamping of the Cambridge Hotel.

[smartcode_project:default project_id=135876 project_image_fid=368853]

The tower will comprise a mix of one, two and three-bedroom apartments, including layouts with multipurpose rooms, catering to a broad cross-section of owner-occupiers. Apartment sizes range from around 60 sqm to 192 sqm, with a number of residences oriented to capture views across Newcastle Harbour, the city skyline and coastline.

GWH has emphasised liveability in the design, with open-plan layouts extending to generous balconies and terraces. Residents will have a choice of two interior palettes, while specifications include engineered stone benchtops, SMEG appliances, full-height bathroom tiling and secure building access. Premium upgrade packages will also be available.

Multiple rooftop resident retreats will provide communal outdoor space overlooking the harbour and city, offering an elevated amenity layer above the activity of the precinct below.

[smartcode_project:default project_id=135876 project_image_fid=368851]

The broader Cambridge Quarter vision extends beyond the residential tower itself. Ground-level retail activation and landscaped public areas are planned throughout the precinct, creating a walkable neighbourhood environment connected to the surrounding renewal of Newcastle West. The Cambridge Hotel is also earmarked for future redevelopment into a family-friendly hospitality venue integrated with the new precinct.

The project is strategically positioned within walking distance of Newcastle Interchange, providing access to light rail, regional rail services and direct connections to Sydney. Residents will also be close to Honeysuckle, Newcastle Harbour and the city's beaches and coastal walkways.

[smartcode_project:default project_id=135876 project_image_fid=368852]

For GWH, Cambridge Quarter represents one of its most significant Newcastle developments to date. The locally based developer, which has operated in the Hunter region since 1995, describes the project as a new chapter in the ongoing transformation of Newcastle West.

GWH Executive Director Jonathan Craig said the project had been shaped by a focus on creating lasting community connections.

"We take pride in creating places that last. Spaces where people feel connected, comfortable and a genuine sense of belonging," Craig said.

"Cambridge Quarter is something we are truly proud of, a place shaped by local knowledge, built with care and designed to be part of Newcastle's next chapter."

[smartcode_project_cta:default project_id=135876]

GWH unveils first release at landmark Cambridge Quarter precinct in Newcastle West

<a href="https://www.apartments.com.au/developers/ss-projects">S&amp;S Projects</a>,&nbsp;Rainbow Bay's busiest developer,&nbsp;has officially lodged plans for the largest development in its booming local portfolio, seeking approval for a further 88 apartments on Boundary Street.

The proposal&nbsp;at <a href="https://www.apartments.com.au/new-apartments/209-213-boundary-street-coolangatta-qld-4225">209–213 Boundary Street, Coolangatta</a>,&nbsp;marks the next chapter in the developer's transformation of the southern Gold Coast beachside precinct. It will be its fifth in the area, having already delivered Flow, Awaken and Esprit, while construction continues on the 38-apartment Radia. The new project would rise 57 metres above a consolidated 1,518 sqm site, on the same street as Radia and Esprit.

&nbsp;

Designed by <a href="https://www.apartments.com.au/architects/cottee-parker-architects">Cottee Parker</a>, the proposed development comprises 88 two and three-bedroom apartments across a contemporary podium-and-tower form that integrates extensive landscaping from street level through to the rooftop.

The tower would be delivered above a basement and multi-level podium accommodating resident and visitor parking, with the residential component commencing from level three. The design incorporates cascading planting throughout the façade, landscaped podium edges, and deep planting zones along the Boundary Street frontage.

<img alt="First look: S&amp;S Projects lodges plans for 88-apartment wellness tower at Coolangatta's Boundary Street" data-entity-type="file" data-entity-uuid="677e6615-b5c0-4b6c-b4f9-efb14fcde1a6" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/ss%20da%20pers.png?VersionId=YOnPKQm7IFXv0M5H326djEpxk80500Hi" />

A key feature of the development is its expansive rooftop wellness and recreation precinct. Plans reveal a resort-style pool deck, gymnasium, sauna, steam room, hot and cold plunge pools, rooftop terraces, barbecue areas and landscaped relaxation spaces positioned to capture views across the southern Gold Coast coastline.

The rooftop wellness focus builds on the vision S&amp;S Projects first outlined when it acquired the site for $20.25 million last year.

"We are taking every advantage to create a truly unique rooftop wellness experience with a natural feel for residents, offering stone features throughout and an underlying theme that emulates a botanical garden," S&amp;S Projects founder and director Paul Gedoun said at the time.

The proposal seeks a 57-metre building height, representing a 50 per cent uplift on the site's mapped 38-metre height limit. Planning documents argue the additional height is consistent with recently approved and emerging towers in the immediate Boundary Street and Rainbow Bay precinct.

Urbis, acting as planning consultant, said the development would provide "88 dwellings, comprising a mix of two and three-bedroom apartments, contributing to housing choice and supply within an established medium to high-rise coastal urban neighbourhood."

The scheme has undergone extensive pre-lodgement consultation with the City of Gold Coast, with the design refined following feedback relating to architectural expression, landscaping, traffic access and podium treatment.

<img alt="S&amp;S" data-entity-type="file" data-entity-uuid="0a2d70fd-62ac-4b83-97c6-b798fc1243dd" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-06-05%20at%209.16.31%E2%80%AFAM.png?VersionId=yHmghUwKM3IVGpBktQU1mE.0Lpf3WimG" />

The architectural team is led by Brisbane-based Cottee Parker, one of Australia's most active residential design studios, with landscape architecture by Dunn + Moran. The consultant team also includes ADG Engineers, Windtech and Acoustic Works.

S&amp;S Projects has become one of the most influential private developers operating on the southern Gold Coast. Since entering Rainbow Bay in 2022, the company has assembled a portfolio exceeding $1 billion in end value, establishing itself as a key player in the area's evolution into a premium apartment destination. Pezet Matheson will again handle the sales for S&amp;S.

Coolangatta is entering another wave of apartment development, following the delivery of several prominent residential projects in recent years.

John Kearney's Immerse Projects will launch&nbsp;<a href="https://www.apartments.com.au/new-apartments/kaiya-kirra-beach-5-haig-street-coolangatta-qld-4225">Kaiya on Haig Street</a>&nbsp;soon, meanwhile, Palm Beach-based Sherpa Property Group is preparing to bring its debut Coolangatta development, <a href="https://www.apartments.com.au/new-apartments/flourish-viver-87-griffith-street-coolangatta-qld-4225">Flourish Viveré</a>, to market later this year, subject to approvals.

Jonathan Chancellor

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