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GUEST OBSERVER
To modify Benjamin Franklin, it seems that in Australia nothing can be said to be certain, except death, taxes and endless debate about property prices.
Why is it so unaffordable? Are foreigners to blame? Is it a good investment? Is negative gearing the problem? Are property prices about to crash?
Worries about a property crash have been common since early last decade. In 2004, The Economist magazine described Australia as “America’s ugly sister” thanks in part to a “borrowing binge” and soaring property prices which had seen it become “another hotbed of irrational exuberance”. At the same time the OECD estimated Australian house prices were 51.8% overvalued.
Since the GFC, predictions of an imminent property crash have become more common with talk that a property crash will also crash the banks and the economy.
Our view since around 2003 has been that overvaluation and high levels of household debt leave the housing market vulnerable. As such it could be seen as Australia’s Achilles heel. However, in the absence of a trigger it’s been hard to see a property crash as a base case. Not much has really changed.
This note takes a look at the key issues and what it means for investors.
Overvalued, over loved and over indebted
The two basic problems with Australian housing are that it is expensive and household debt is high. Overvaluation is evident in numerous indicators:
According to the 2016 Demographia Housing Affordability Survey the median multiple of house prices in cities over 1 million people to household income is 6.4 times in Australia versus 3.7 in the US and 4.6 in the UK. In Sydney it’s 12.2 times and Melbourne is 9.7 times.
The ratios of house prices to incomes and rents are at the high end of OECD countries and have been since 2003.
Real house prices have been above trend since 2003.
<a href="/images/2016/03/10/Screen%20Shot%202016-03-10%20at%2011.21.21%20AM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/03/10/Screen%20Shot%202016-03-10%20at%2011.21.21%20AM.png" alt="">
 
The shift to overvaluation more than a decade ago went hand in hand with a surge in the ratio of household debt to income, which took Australia’s debt to income ratio from the low end of OECD countries to now being around the top.
<a href="/images/2016/03/10/Screen%20Shot%202016-03-10%20at%2011.25.17%20AM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/03/10/Screen%20Shot%202016-03-10%20at%2011.25.17%20AM.png" alt="" width="793" height="460">
 
Overvaluation and high household debt are central elements of claims that Australian house prices will crash. These concerns get magnified whenever there is a cyclical surge in prices as we have seen recently in Sydney and Melbourne.
But a crash seems elusive.
However, given the regularity with which crash calls for Australian property have been made over the last decade and their failure to eventuate, it’s clear it’s not as simple as it looks.
First, the main reason for the persistent "overvaluation" of Australian home prices relative to other countries is constrained supply. Until recently Australia had a chronic under supply of over 100,000 dwellings, as can be seen in the next chart that tracks housing completions versus underlying demand.
Completions are at record levels but they are just catching up with the undersupply of prior years.
<a href="/images/2016/03/10/Screen%20Shot%202016-03-10%20at%2011.27.01%20AM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/03/10/Screen%20Shot%202016-03-10%20at%2011.27.01%20AM.png" alt="">
 
Secondly, Australia has not seen anything like the deterioration in lending standards other countries saw prior to the GFC. There has been no growth in so-called low doc and sub-prime loans which were central to the US housing crisis. In fact in recent years there has been a decline in low doc loans and a reduction in loans with high loan to valuation ratios. See the next chart. And much of the increase in debt has gone to older, wealthier Australians, who are better able to service their loans.
<a href="/images/2016/03/10/Screen%20Shot%202016-03-10%20at%2011.28.32%20AM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/03/10/Screen%20Shot%202016-03-10%20at%2011.28.32%20AM.png" alt="">
 
Third, and related to this, there are no significant signs of mortgage stress. Debt interest payments relative to income are low thanks to low interest rates. See the next chart.
<a href="/images/2016/03/10/Screen%20Shot%202016-03-10%20at%2011.29.34%20AM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/03/10/Screen%20Shot%202016-03-10%20at%2011.29.34%20AM.png" alt="">
By contrast in the US prior to the GFC interest rates were starting to rise. Yet in Australia bad debts and arrears are low.
While new loan sizes have increased, Australians seem focussed on cutting their debt once they get it.
Finally, while some seem to think that because property prices in mining towns like Karatha are now crashing this is a sign that other cities will follow. This is non-sensensical. Property prices in mining towns surged thanks to a population influx that flowed from the mining boom. This is now reversing. Perth and Darwin are also being affected by this but to a less degree. By contrast the surge in property prices in cities like Sydney and Melbourne that occurred into early last decade predated the mining boom and their latest gains largely occurred because the end of the mining boom allowed lower interest rates.
The current state of play
Our assessment is that the boom in Sydney and Melbourne is slowing thanks in large part to APRA’s measures to slow lending to property investors. However, house price growth is likely to remain positive this year. Price growth is likely to remain negative in Perth and Darwin as the mining boom continues to unwind. Hobart &amp; Adelaide are likely to see continued moderate property growth, but Brisbane may pick up a bit.
Nationwide price falls are unlikely until the RBA starts to raise interest rates and this is unlikely before 2017. And then in the absence of a recession or rapid interest rate hikes price falls are more likely to be 5-10% as was seen in the 2009 and 2011 down cycles rather than anything worse.
<a href="/images/2016/03/10/Screen%20Shot%202016-03-10%20at%2011.31.43%20AM.png" target="_blank"> Click to enlarge</a>
<img src="/images/2016/03/10/Screen%20Shot%202016-03-10%20at%2011.31.43%20AM.png" alt="">
 
What to watch for a property crash?
To see a property crash – say a 20% average fall or more – we probably need to see one or more of the following:
A recession – much higher unemployment could clearly cause debt servicing problems. At this stage a recession looks unlikely though.
A surge in interest rates – but the RBA is not stupid; it knows households are now more sensitive to higher rates.
Property oversupply – this is a risk but would require the current construction boom to continue for several years.
Implications for investors
There are several implications for investors:
While housing has a long term role to play in investment portfolios it is looking somewhat less attractive as a medium term investment. It is expensive, offers very low income (rental) yields compared to all other assets except bank deposits and Government bonds and it’s vulnerable to possible changes to taxation arrangements around property.
There are pockets of value, eg in regional areas. You just have to look for them.
As Australians already have a high exposure to residential property (directly and via bank shares and property trusts), there is a case to maintain a decent exposure to say unhedged global shares because it could provide an offset if it turns out I am wrong and the Australian property market does have a crash.
<a href="https://www.propertyobserver.com.au/https://plus.google.com/110172465327488162875?rel=author" target="_blank">SHANE OLIVER</a> is head of investment strategy and economics and chief economist at <a href="https://www.ampcapital.com.au/home" target="_blank">AMP Capital</a> and is responsible for AMP Capital's diversified investment funds.
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jchancellor-FAypfDUnLy

How valid are crash calls for the Australian property market? Shane Oliver

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A drop in the number of home loans taken in January and a big fall in the average loan size taken by first home buyers given falling or easing house prices highlights the prospect of greater home loan affordability in 2016, according to the head of banking business act., Amanda Watt. 
Over the month of January, the value of new home loans taken by property buyers dropped 3.4% to $31.9 billion, according to new data from the Australian Bureau of Statistics (ABS). The value of home loans for owner occupiers dived 4.3% to $20.5 billion in January from December while the value of home loans taken by investors also fell by 1.6% to $11.4 billion as buyers withdrew from the property market. 
Reflecting greater home loan affordability, the average loan size for first home buyers fell by $9,300 to $338,800 between December and January. The average loan size for all owner occupied housing commitments fell by $5,400 to $372,400 for the same period. The overall number of home loans taken by owner occupiers in January plunged 3.9% to 55,786. 
“While January is traditionally a slower month, these are still positive signals. Home buyers will welcome any drop in funds needed to buy their first home or make a property investment and the latest housing finance data highlights that buyers borrowed almost $10,000 less to buy their first home in January,” said Watt. 
“While the number of first home buyer commitments as a percentage of total owner occupied housing finance commitments was unchanged at 15.1%, the good news is that growth in house prices has slowed in some cities while prices have dropped elsewhere, so people are needing to borrow less to buy,” said Watt.  
Fixed-rate loans, as a proportion of all new home loans, rose to 13.6% in January from 12.9% in December, as borrowers took advantage of low fixed rates, which have in some cases fallen below variable home loan rates due to downward pressure on wholesale market interest rates. 
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Positive signals in January lending: act

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The development of Parramatta is on serious turbocharge right, prompting its rating it on John McGrath's top suburb picks in last year’s annual McGrath Report.
He indicated there were two key reasons:
• Commercial and infrastructure activities in and around Parramatta are leaving much of Sydney in their wake with many smart companies choosing to relocate closer to their employees 
• The activation of the river which has for many years been a forgotten waterway
McGrath recent advised he considered Parramatta among Sydney’s next major hot spots for property price rises. 
"When we talk about property hot spots, most people think of small, unknown, undeveloped pockets of a city; or perhaps areas on the outskirts set to benefit from something new, like a road upgrade or new train line.
"We don’t often think about major established centres but Parramatta is different.
"While it’s been Sydney’s second CBD for a long time, it’s now becoming Sydney’s new heart," he blogged on Switzer noting about $8 billion in construction projects are on the way along with further billions in new public infrastructure both in and around Parramatta CBD. 
"We’re talking new commercial centres, luxury residential apartments, recreational spaces, educational facilities, modernised streetscapes and major new transport."
He noted the population was changing in both size and character.
"It’s going from blue collar to white collar with more tertiary-educated locals working in higher paid jobs. 
"All of this will have a major and direct impact on property prices over the next 5-10 years."
He noted the median price for a three bedroom house in Parramatta was around $788,000 and a two bedroom apartment $586,000.
"Compare this to an inner city suburb close to Sydney’s CBD like Surry Hills, where a three bedroom house is $1.616 million and a two bedroom apartment is $950,000.
"Value, value, value!," he said.  
The most exciting development underway is the $2 billion Parramatta Square project, a three hectare site in the middle of the CBD that will comprise several new commercial and civic buildings, apartments, retailers, eateries and recreational facilities.
It will be home to a new University of Western Sydney Campus (completion due early 2017) as well as the Aspire residential tower, which will be the tallest residential building in NSW (completion due late 2019). 
In terms of public transport, Parramatta is being touted as Sydney’s ‘new Central’ with major projects to benefit the area including plans for a light rail network; the WestConnex road project; the North-West Rail Link project; and a new airport at Badgerys Creek. 
Australian and foreign developers are also recognising the enormous scope Parramatta has for new residential and commercial buildings – certainly far greater than the CBD. 
According to RP Data, Parramatta house prices rose by 27.3% in 2015 while Sydney as a whole grew by 11.5%.
"The rise of Parramatta – and its home values, is well underway!"
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Parramatta is on turbocharge to be property hotspot: John McGrath

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GUEST OBSERVER
The Westpac/Melbourne Institute index of consumer confidence fell by 2.2 per cent in March to 99.1. A reading of 100 is the dividing line separating optimism from pessimism.
Wisest place for savings: “Banks” was the wisest place to put new savings according to the survey.
Overall 27.4 per cent believe the wisest place for savings was in “banks”, up 1.2 percentage points over the quarter.
Next highest was “Pay debt” (24.4 per cent – 4-year high, up 6.6 percentage points), which overtook “real estate” (14.7 per cent, down 8.7pp). A total of 7 per cent of respondents were unsure of what to do with additional savings – the highest reading in records going back over 20 years.
Home loans: The number of loans (commitments) for people who are buying or building homes to live in (owner-occupiers) fell from 7-year highs, down by 3.9 per cent in January. Refinancing of home loans fell from record highs, down by 4.4 per cent in January.
The housing finance data has implications for banks, building material suppliers and retailers. The consumer confidence data is important for retailers and consumer-facing businesses.
<a href="/images/2016/03/10/Screen%20Shot%202016-03-10%20at%2010.20.14%20AM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/03/10/Screen%20Shot%202016-03-10%20at%2010.20.14%20AM.png" alt="">
What does it all mean?
The monthly consumer confidence data is now merely useful as a check against the timelier weekly survey. The ANZ-Roy Morgan survey has the same number of survey respondents as the monthly series, has been running over the same number of years and covers the same questions, but is conducted each week. And what is clear from both surveys is that confidence levels seemingly consolidated over the month.
According to the Westpac/Melbourne Institute survey, consumer sentiment eased marginally in the latest result. The Roy Morgan weekly reading indicated similar volatility over the month with consumer sentiment lifting in the past week. The improvement in the global outlook, stronger domestic economic data and the recent strength in the Australian dollar should support confidence levels over the medium-term.
Where is the wisest place to put new savings?
According to the latest survey it’s in the bank, which strengthened its ascendancy in the latest quarter. Interestingly the major loser in the quarter was “real estate”. This was surpassed by “pay debt” as the second best option for additional savings. It was the first time in 3ó years that “paying down debt had surpassed real estate. In fact only 14.7 per cent of respondents believed real estate was the best option for additional savings – the weakest reading in over four years. It is quite a turnaround for “real estate” given that just six months ago it was considered the most attractive savings option with the highest reading in 12 years.
No doubt the run up in house prices, tighter home lending criteria by the banking sector and recent consolidation in the housing sector are prompting more households to focus on alternative asset classes to property. Interestingly the low interest rates on offer and volatility in stock markets has seen a substantial lift in the number of respondents that do not know what to do with additional savings. A total of 7 per cent of respondents claimed not to know what to do with additional savings – the highest reading in records going back over 20 years.
Despite the recent pullback the home loan market remains in good shape. Especially when you consider that loans to home owners eased from a 7-year high. Where the weakness is more paramount is in investor loans which have fallen substantially over the past six months. The value of investor loans is now down almost 15 per cent on a year ago. The result is a positive for the housing sector given over-lending to the sector last year. More prudent lending policies should ensure that the housing sector continues to remain resilient, contrary to the discussion of a substantial downturn.
The Reserve Bank is comfortably on the interest rate sidelines. Refinancing may have eased in the past month from record highs but the low interest environment is likely to prompt more home owners to shop around for the best home loan rates in coming months.
<a href="/images/2016/03/10/Screen%20Shot%202016-03-10%20at%2010.21.18%20AM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/03/10/Screen%20Shot%202016-03-10%20at%2010.21.18%20AM.png" alt="">
What do the figures show?
Housing finance - number
The number of new owner-occupier housing loans (commitments) fell by 3.9 per cent in January after rising by 2.7 per cent in December. Excluding the refinancing of dwellings, the number of loans was down by 3.6 per cent.
Loans by owner-occupiers for the construction of homes  down by 2.8 per cent in January; loans to buy newlyerected dwellings  fell by 3 per cent; and loans for the purchase of established dwellings  (excluding refinancing) fell by 3.8 per cent. The number of refinancing transactions  fell by 4.4 per cent.
Housing finance - value
The value of new housing commitments (owner occupier and investment) fell by 3.4 per cent in January after a 0.1 per cent fall in December. Owner-occupier loans fell by 4.3 per cent while investment loans fell by 1.6 per cent.
The value of loans by owner-occupiers and investors to build new homes  fell by 0.9 per cent in January after falling by 1.2 per cent in December. The value of loans to build new homes stood at $2.77 billion, weakening further from the record high of $2.93 billion in December 2014.
Consumer sentiment:
The Westpac/Melbourne Institute index of consumer confidence fell by 2.2 per cent in March to 99.1 after lifting by 3.9 per cent in February. The confidence index is down 0.4 per cent on a year ago. The current conditions index fell by 7.3 per cent while the expectations index rose by 1.7 per cent.
Three of the five components of the index fell in March:
The estimate of family finances compared with a year ago was down  by 8.2 per cent;
The estimate of family finances over the next year was up  by 0.2 per cent;
Economic conditions over the next 12 months was up  by 8.2 per cent;
Economic conditions over the next 5 years was down by 2.5 per cent;
 The measure on whether it was a good time to buy a major household item was down by 6.6 per cent.
Gender &amp; demographics: Men (index reading of 104.6, up 2.3 per cent) were more optimistic than Women (94.4, down 6 per cent). The sentiment index for young people fell by 17.1 per cent to 99.9 in March. Across the other demographics: 25-44 years (index 103.1, up by 0.4 per cent); 45 years plus (index 96.3, down 0.7 per cent).
Housing outlook: A good time to buy a dwelling? – Index up 5.5 per cent in the quarter and although still down 13.1 per cent on the year.
Wisest place for savings: “Banks” was the wisest place to put new savings according to the survey. Overall 27.4 per cent believe the wisest place for savings was in “banks”, up 1.2 percentage points over the quarter. Next highest was “pay debt” (24.4 per cent, up 6.6pp), followed by “real estate” (14.7 per cent, down 8.7pp), “shares” (7.6 per cent, down 2.3pp), and “dont know” (7 per cent, up 4.1pp) “superannuation” (4.9 per cent, up 0.4pp).
State sentiment levels: NSW (up 1.6 per cent), Victoria (down 5.3 per cent), Queensland (down 2.6 per cent), Western Australia (up 1.2 per cent) and South Australia (down 10.6 per cent).
<a href="/images/2016/03/10/Screen%20Shot%202016-03-10%20at%2010.22.27%20AM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/03/10/Screen%20Shot%202016-03-10%20at%2010.22.27%20AM.png" alt="">
What is the importance of the economic data?
Housing Finance data is produced monthly by the Bureau of Statistics and shows commitments by lenders, such as banks, to provide finance for housing purposes. The lending figures relate to those looking to buy or build homes to live in as well as those seeking to buy or build homes for investment purposes. Generally people get their finance organised first, so the figures are regarded as a leading indicator on the housing market.
Westpac and the Melbourne Institute release the Index of Consumer Sentiment each month. According to Melbourne Institute: “The survey of consumer sentiment was first undertaken in 1973 and was conducted on a quarterly basis until 1976, a six-weekly basis from 1976 to 1986, and has been conducted monthly ever since.”
Confident consumers may be more inclined to spend, especially on major items.
What are the implications for interest rates and investors?
From a broader sense, confidence levels are OK without being great. Looking forward, a period of calm on share markets and the recent strength in the Australian dollar could be key factors supporting household confidence.
For Aussie consumers, a stronger Aussie dollar means increased purchases on the internet and trips abroad, so the recent strength in the Aussie dollar will support confidence.
The Reserve Bank will be comforted by the more stable conditions in the investor housing market.
CommSec expects no change to interest rate settings for the foreseeable future.
<a href="/images/2016/03/10/Screen%20Shot%202016-03-10%20at%2010.23.38%20AM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/03/10/Screen%20Shot%202016-03-10%20at%2010.23.38%20AM.png" alt="" width="1525" height="500">
Savanth Sebastian is an economist for <a href="https://www.commsec.com.au/" target="_blank">CommSec</a>
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“Pay debt” at a four year high: Commsec's Savanth Sebastian

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Property group Lendlease is expected to start construction of a 25,000-square-metre tower in Melbourne, part of a $2 billion mixed-use scheme, after winning planning approval for its first commercial tower.
Planning Minister Richard Wynne has approved the first $200 million 11-level tower at 695 Collins Street, noting the public space created by the design of a sky-park. 
<img src="/images/2016/03/10/News_tower.jpg" alt="">
Lendlease has secured pre-commitment from engineering company Arup, who will take out three floors in the building, to be known as One Melbourne Quarter. 
It is the first of seven commercial and residential buildings planned for the 2.5-hectare site running between Collins and Flinders streets at the edge of the old city grid, linking it to Docklands.
Lendlease calls the project Melbourne Quarter. 
Alongside the Collins Street extension into Docklands, Lendlease will build, in stages, a deck over Wurundjeri Way, to hold different elements of the project together.   
The tower, designed by Denton Corker Marshall will sit next to a $2.5 billion project in Collins Square that property magnate Lang Walker is still building and trying to sell.
The <a href="https://www.lendlease.com/australia/projects/batmans-hill" target="_blank">Batman's Hill development</a> will include more than 110,000 sqm NLA office space, 1,693 apartments and retail space, according to the Lendlease website.
 <img src="/images/2016/03/10/carousel_about_skypark.jpg" alt="">
</div>
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Lendlease to start work on $200 million office tower in Melbourne's Batman's Hill

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The former supermodel Kristy Hinze-Clark and her billionaire Texan husband have sold in Point Piper.
Bought for $7.65 million, it sold earlier this week reportedly for more than $8 million.
Their frequent visits to Sydney over summer have in recent years seen them rent other residences, the Vaucluse trophy home, Villa Igiea, which sold on New Year’s Eve for more than $52 million, and the nearby waterfront mansion on Coolong Road that is now home to Chinese billionaire Richard Liu having sold late last year for $36 million.
Jaime Upton of Sotheby’s International confirmed it had sold but declined to reveal the price.
Their 320 square metre apartment is one of the whole-floor residences within the <a href="/expert-insights/buying/jim-clark-and-kristy-hinze-clark-have-another-shot-at-selling-sienna-point-piper-apartment">Sienna harbourfront block</a> on Wolseley Road.
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Kristy Hinze-Clark and Jim Clark find Point Piper buyer

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Fashion icon Jenny Bannister has sold her St Kilda home for $3.3 million at auction, exactly 27 years to the day after she bought it.
The property sold after Wilson agents Martin Fox and Brad Ward had set a guide of $2 million plus for the Victorian era property. 
Renovated to the designs of renowned Melbourne architect Allan Powell, <a href="https://www.realestate.com.au/property-house-vic-st+kilda-121871158" target="_blank">80 Wellington Street</a> won Belle Magazine's house of the year in 1991.
Set on a 657 sqm corner block, the solid brick, double fronted family home has four bedrooms and two bathrooms.
The two storey extension features a white painted brick creative studio with Juliette balcony which overlooks the Tuscan-style designer emerald green pool and courtyard.
Bannister lived in the home with husband and economist Paul "Mongoose" Belin.
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Fashion icon Jenny Bannister has sold her St Kilda home for $3.3 million

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GUEST OBSERVER
In late 2015, the Greater Sydney Commission was established to oversee metropolitan planning and development in Sydney.
The commission is intended to function as a partnership between state and local governments, with both the power to create overarching planning proposals and the mandate to work with local governments on local planning controls.
NSW Premier Mike Baird has tasked the commission with delivering 680,000 new homes by 2031, with the aim of tackling the city’s unfolding housing affordability crisis.
In December, Lucy Turnbull was announced as the inaugural chief commissioner for the Greater Sydney Commission. In addition to a successful career in commercial law and investment banking, Turnbull has a history in local government – in 2003 she became the first female lord mayor of Sydney – and is the author of the 1999 book Sydney: Biography of a City. Since 2010 she has been the deputy chair of the Coalition of Australian Governments’ City Expert Advisory Panel.
Dallas Rogers spoke with Lucy Turnbull on the establishment of the Greater Sydney Commission, its structure, plans and mandate from the premier, as well as criticism from some urban planning experts that the commission is an undemocratic “top-down” approach to development.
To hear the interview in full, <a href="https://theconversation.com/speaking-with-lucy-turnbull-on-the-greater-sydney-commission-56005?utm_medium=email&amp;utm_campaign=Latest%20from%20The%20Conversation%20for%20March%2010%202016%20-%204476&amp;utm_content=Latest%20from%20The%20Conversation%20for%20March%2010%202016%20-%204476+CID_233775bf67bcd3c3aa2e3c2a6a4a3704&amp;utm_source=campaign_monitor&amp;utm_term=Speaking%20with%20Lucy%20Turnbull%20on%20the%20Greater%20Sydney%20Commission" target="_blank">click here</a>.
Dallas Rogers<a href="https://theconversation.com/profiles/dallas-rogers-5269" rel="author"> </a>is lecturer in Urban Studies, Western Sydney University and author for The Conversation. He can be contacted <a href="https://theconversation.com/profiles/dallas-rogers-5269" target="_blank">here</a>.
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Lucy Turnbull discusses the Greater Sydney Commission

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Bates Smart has been selected to design Walker Corporation’s 90-storey Aspire tower in Parramatta, beating off Fender Katsalidis, DBI Design and PTW Architects.
The decision was made by a panel comprising Parramatta City architect Kim Crestani, NSW government architect Peter Poulet, Barangaroo design director Bob Nation and Barry Mann, a member of Parramatta City’s property and significant assets team.
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2016/03/10/016960-aspire-tower.jpg" alt="">
The $700 million tower will be Sydney’s tallest if completed to plan as the centrepiece of the $2 billion redevelopment of ­Parramatta Square, in Sydney’s west.
Bates Smart will be forced to first lodge a 70-storey development application, and only be permitted to request a taller tower once it has agreement from the Civil Aviation Safety Authority.
<img src="https://www.urban.com.au/images/2016/03/10/images.jpeg" alt="">
Walker Corporation is building two adjacent commercial towers designed by Johnson Pilton Walker.
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Aspire tower Parramatta needs aviation authority approvals to go 90 stories

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Cabinet minister Peter Dutton has claimed Labor's negative gearing policy and its plan to cut the capital gains tax discount for investors from 50 percent to 25 percent policy would "cripple the economy".
"I think the economy will come to a shuddering halt and I think the stock market will crash and I think once people realise how dangerous Labor's economic proposal is, I think they'll be happy to see an election … and deal with it," he said.
Mr Dutton also borrowed former prime minister Tony Abbott's description last week to call Labor's negative gearing plans a "housing tax".
"It is becoming pretty clear that this election will be about Labor's taxes and their proposal to whack a tax on housing."
The Australian Financial Review noted Shadow treasurer Chris Bowen said Mr Dutton's statement was reckless and unfounded "unbecoming especially from a cabinet minister".
"After promising new 'economic leadership' and a new kind of politics, Malcolm Turnbull's team, when asked about the upcoming election, go straight to negativity and another party's policy."
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Labor's negative gearing policy will cripple the economy: Peter Dutton

Walk past a new apartment development promoting its sustainability credentials and it's easy to picture rooftop gardens, mature trees, landscaped courtyards and residents surrounded by nature.

But in many cases, that's not actually what those sustainability ratings guarantee.

Australia's leading environmental rating tools have played a significant role in improving the energy efficiency and environmental performance of buildings. Yet despite their focus on reducing emissions, many don't require developers to include trees, biodiversity or meaningful green space.

In other words, a building can achieve one of the country's highest sustainability ratings while containing little more than concrete, glass and hard landscaping.

That disconnect has led to the emergence of a new movement across Australia's property industry: nature-based cities.

The concept goes beyond designing buildings that consume less energy. Instead, it encourages developers to treat nature as essential infrastructure, integrating biodiversity, tree canopy, living landscapes and green spaces into projects from the earliest stages of planning.

Research has consistently linked access to nature with better physical and mental health, cooler neighbourhoods, improved biodiversity, stronger climate resilience and more connected communities. As Australia's cities continue to become denser, advocates say those outcomes should be considered just as important as energy efficiency.

Nature Based Cities (NBC) was established in 2022 to help accelerate that shift.

Founded by Hamton Executive Chairman Paul Hameister OAM, the not-for-profit was created after research highlighted a significant gap in Australia's sustainability framework. While existing environmental rating tools rewarded energy performance and emissions reductions, they placed little emphasis on the inclusion of living landscapes.

"We've always wanted to do more, and we know other developers who want to do more, but the ESD rating tools just aren't there," Hameister says.

"In Australia, you can have a five-green-star rated building that's concrete and glass with not a blade of grass.

"The focus is on reducing emissions, which is laudable, but there hasn't been enough attention paid to protecting and re-establishing nature. We need both for the health of the environment and for communities."

Since its launch, NBC has developed independent design guidelines and accreditation frameworks that encourage developers to prioritise ecology, biodiversity, tree canopy, walkability and living landscapes alongside traditional sustainability measures. The organisation first focused on medium and high-density residential developments before recently expanding into precinct-scale communities and masterplanned neighbourhoods.

Jan Talacko, founder of sustainability consultancy Ark Resources and a member of the Nature Based Cities Advisory Council, says the initiative addresses an area that has largely been overlooked by the property industry.

"Throughout my 25 years of working collaboratively with all stakeholders in the property sector, I've always favoured a pragmatic approach to sustainable design which encourages initiatives that not only meet environmental expectations but also improve amenity," Talacko says.

"Whilst we are making steady progress in relation to energy and carbon emissions from buildings, there has been much less emphasis on encouraging biodiversity and tackling the urban heat island effect.

"The Nature Based Cities initiative responds to a gap in the suite of tools currently used by the property development sector, which don't provide sufficient incentive, or recognition, for the integration of landscaping and greenery."

For apartment buyers, the shift is also changing the questions worth asking.

Rather than assuming a sustainable building will naturally include abundant green space, buyers are increasingly being encouraged to look beyond environmental ratings and ask what nature is actually being delivered. How much tree canopy will the development create? Has biodiversity been considered? Are landscaped spaces designed for people as well as appearance?

As Australia's cities continue to grow upwards and outwards, the next generation of sustainability may not simply be measured by lower emissions, but by how successfully developments bring nature back into everyday urban life.

Joel Robinson

What does it really mean for a building to be 'green'?

A who's who of Australian surfing, business and entertainment has emerged on title records following the completion of Esprit Rainbow Bay, the latest boutique beachfront apartment development by former professional surfer Paul Gedoun's S&amp;S Projects.

The completed project has attracted an enviable collection of owners, many with long-standing ties to the southern Gold Coast and the surf culture that has helped define Rainbow Bay and neighbouring Kirra for generations.

Given Gedoun's own background in surfing, it perhaps comes as little surprise that some of Australia's most recognisable surfers have chosen to buy into the development overlooking one of the country's most celebrated stretches of coastline.

Pezet Matheson directors Jayde Pezet and Todd Matheson launched the project in late 2021, and have managed the sales campaign all the way through to its sell-out and recent completion.

<img alt="Esprit" data-entity-type="file" data-entity-uuid="08fc6261-b84e-4b09-8a44-66d3067fd0d1" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-07-29%20at%208.51.05%E2%80%AFAM.png?VersionId=4AOcb6ETZwNUnMPdTtz1B3pZAIB_jgZ2" />

Former world champion Mick Fanning, who grew up in Coolangatta, secured an apartment in 2023. He paid&nbsp;$2.07 million. Last year he sold his Bilinga home for over $16 million.

Three-time world champion Joel Parkinson also purchased in the development, alongside big wave surfer Mark Mathews. Mathews bought the most expensive apartment in the building, spending just over $4 million.

Joining them is Rip Curl founder Doug Warbrick, whose company helped shape Australia's global surfing industry over the past five decades.

The appeal of Rainbow Bay has extended well beyond the surfing community.

International DJ Paul Fisher purchased an apartment through his investment vehicle, YLB Developments, an abbreviation of his trademark phrase "You Little Beauty".

The purchase comes as Fisher and his wife Chloe are developing their own luxury apartment project further north in Palm Beach. Their boutique beachfront development, Pescado, comprises just seven apartments on Jefferson Lane, which start from just shy of $6 million. The couple intend to retain the two-level penthouse as their Australian base between international touring commitments.

Melbourne Storm coach Craig Bellamy and his wife Wendy have also invested in Esprit, purchasing two apartments after spending decades holidaying on the southern Gold Coast. They also have a luxury apartment in Joe Adsett's Rockpool, less than 400m away from Esprit.

<h2>Boutique project draws owner-occupiers</h2>

Esprit launched in 2021 and sold strongly, with buyers drawn to its boutique scale, beachfront position and contemporary design.

The completed development comprises 94 apartments across 11 levels, offering expansive floorplans designed primarily for owner-occupiers rather than the investor market.

Crowning the building is Club Esprit, pitched as being the Gold Coast's first residential rooftop wellness centre. The roof features a&nbsp;25 metre magnesium lap pool, which is surrounded by wet daybeds and poolside cabanas,&nbsp;multiple barbecue areas,&nbsp;a yoga and relaxation play lawn, and a private dining room with a kitchen scullery, bar, lounges, and an outdoor terrace.

The wellness centre is&nbsp;fully equipped with a Technogym, ice bath, infra-red sauna, steam room, thermal room, and treatment room. The roof has views spanning&nbsp;Rainbow Bay, Snapper Rocks and the Pacific Ocean.

<h2>S&amp;S Projects continues to shape Rainbow Bay</h2>

S&amp;S Projects founder Paul Gedoun has become one of the key figures behind Rainbow Bay's evolution over the past several years.

After establishing S&amp;S Projects, Gedoun has focused on delivering lifestyle-driven apartment developments designed primarily for owner-occupiers seeking a permanent coastal home.

Esprit is Gedoun's third completed project in Rainbow Bay, following Flow and Awaken, both of which achieved record prices for the suburb.

He is now delivering <a href="https://www.apartments.com.au/new-apartments/radia-rainbow-bay-271-boundary-street-coolangatta-qld-4225">Radia Rainbow Bay</a>, a 38-apartment development on Boundary Street that is currently selling, and has no plans to leave the precinct anytime soon. S&amp;S Projects has also lodged plans for its fifth Rainbow Bay development, an 88-apartment project on Boundary Street featuring a strong wellness focus.

Read more:&nbsp;<a href="https://www.apartments.com.au/news/qld/first-look-s-s-projects-proposes-88-apartment-wellness-tower-at-coolangattas-boundary-street">First look: S&amp;S Projects proposes 88-apartment wellness tower at Coolangatta's Boundary Street</a>

&nbsp;

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Who's who of buyers revealed as Esprit Rainbow Bay settles

Apartment buildings are increasingly being designed around how people actually live day to day, not just how they want a building to look.

For buyers, that shift is showing up in practical inclusions that respond to changing habits. Work-from-home spaces, EV charging, wellness amenities, secure bike storage and parcel management are becoming part of the broader apartment conversation, reflecting a move toward buildings that reduce friction in everyday life.

Online shopping has become one of the clearest examples of that change.

Australians spent a record $82.6 billion online in 2025, with nearly one in four retail dollars now spent online. That has made parcel delivery a regular part of apartment living, rather than an occasional inconvenience.

For apartment residents, however, the delivery process can be less straightforward than it is for detached homes. Parcels may be left in lobbies, redirected to Post Offices, missed entirely, or placed under the responsibility of building managers and concierge teams.

That is why secure parcel infrastructure is increasingly being considered alongside more familiar apartment amenities.

<iframe allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" allowfullscreen="" frameborder="0" height="315" referrerpolicy="strict-origin-when-cross-origin" src="https://www.youtube.com/embed/-VjjLwoViX0?si=A3k7ws9NX35Uac7_" title="YouTube video player" width="560"></iframe>

Australia Post Parcel Lockers offer one way to address the issue. When a parcel arrives, residents receive a notification through the AusPost app or SMS, then collect it using a QR code or one-time PIN. The parcel is kept secure, accessible and removed from common areas.

The broader Parcel Locker network now includes more than 1,500 locations across Australia, positioned at Post Offices, shopping centres, supermarkets, transport hubs and other accessible locations.

For new apartment projects, the relevance is clear. A building’s amenity offering is no longer only about lifestyle spaces, but also about convenience, security and functionality.

As buyer expectations evolve, secure parcel delivery is becoming part of the same design conversation as flexible working, sustainable transport and resident wellbeing.

It is one less thing for residents to worry about, and another example of apartment design adapting to the way Australians now live.

Apartment design is adapting to the way Australians shop

While school holidays and trips to Europe tend to define the winter property market, there's been no cold snap at <a href="https://www.apartments.com.au/new-apartments/the-walden-north-sydney-177-walker-street-north-sydney-nsw-2060">The Walden</a> in North Sydney.

Developer-builder&nbsp;<a href="https://www.apartments.com.au/developers/aland">ALAND</a> sold more than $35 million worth of apartments throughout June, including a $6.8 million apartment that now ranks among the highest apartment sales ever recorded in North Sydney.

SRM Residential agent Ben Stewart said buyer demand throughout June reflected a mix of improving market confidence and longer-term thinking from owner-occupiers.

"We're seeing strong demand from owner-occupiers who are taking a longer-term view," Stewart said.

"Many recognise the opportunity to secure an apartment in an iconic building and premium location while values remain attractive. They may initially lease the property, but the intention is to eventually move in themselves, rather than purchasing purely as an investment."

[smartcode_project:default project_id=134323 project_image_fid=367129]

Located at 177 Walker Street, The Walden will deliver 161 one, two, three and four-bedroom residences across a 30-storey tower designed by Rothelowman. Every apartment occupies a corner position, maximising natural light, cross ventilation and views across Sydney Harbour, the Opera House, Sydney Heads and the northern districts.

Rather than a traditional balcony, the residences feature winter gardens that seamlessly extend the open plan living areas, creating versatile spaces for relaxing or entertaining throughout the year. Floor-to-ceiling glazing draws in natural light while showcasing sweeping views from the building's elevated Walker Street position.

Every apartment features high-end Calacatta marble, bespoke joinery, and fully integrated appliances.

The larger residences have been planned with distinct entertaining and private zones, with many master suites positioned on corners to capture natural light and harbour views. Walk-in dressing rooms, freestanding baths and refined stone finishes reinforce the house-like feel that has resonated with downsizers and owner-occupiers.

[smartcode_project:default project_id=134323 project_image_fid=6393]

Rothelowman Principal Ben Pomroy said the project was designed to make the most of its unique position overlooking the harbour.

"The Walden is a celebration of all things beautiful, curated for those who expect nothing less than exceptional," Pomroy says.

"Meticulously designed entertaining spaces and light-filled living areas that capitalise on capturing the natural beauty of Sydney's iconic harbour."

Residents will also have exclusive access to The Pavilion, a dedicated amenity building featuring a rooftop pool, wellness studio, gymnasium, sauna, concierge service, residents' lounge, private dining spaces and work-from-home facilities.

[smartcode_project:default project_id=134323 project_image_fid=6402]

The project marks ALAND's first major luxury apartment development in Sydney's inner-city market after more than two decades delivering residential communities across Greater Sydney.

Founder and CEO Andrew Hrsto previously said the rarity of the Walker Street site made it an opportunity the company could not overlook.

"This is a rare opportunity to bring a truly exceptional project to life in one of Sydney's most iconic locations, and to showcase our craftsmanship and design expertise at a world-class level," Hrsto said.

[smartcode_project:default project_id=134323 project_image_fid=6383]

The Walden has been introduced to the market at a time when demand for living in North Sydney is at an all-time high. Billions of dollars have been invested in infrastructure, including the recently opened Victoria Cross Metro station, located just 300 metres from The Walden, providing residents with direct access to the Sydney CBD in just minutes.

Private investment has also transformed the area through the arrival of new retail and dining destinations, elevating the lifestyle offering in what was once considered primarily a commercial precinct rather than an aspirational residential address.

The Walden is currently under construction and is scheduled for completion in 2028.

[smartcode_project_cta:default project_id=134323]

ALAND records $35 million in sales in North Sydney as The Walden bucks quiet winter selling season

The long-awaited redevelopment of the former Eastlakes Shopping Centre site has reached a major milestone, with Conquest's plans for a new mixed-use precinct officially placed on public exhibition.

The State Significant Development Application would transform the 1.7-hectare site at <a href="https://www.apartments.com.au/new-apartments/19a-evans-avenue-eastlakes-nsw-2018">19A Evans Avenue</a> into one of Sydney's largest urban renewal projects, delivering 736 apartments above a new shopping centre anchored by Woolworths, alongside specialty retail, dining, commercial space and new public open spaces.

The public exhibition marks the next chapter for the project after <a href="https://www.apartments.com.au/developers/conquest">Conquest</a> acquired the stalled Stage Two development from Crown Group, who completed the first stage across the road prior to their voluntary liquidation.

<img alt="First look: Conquest unveils plans for 736-home Eastlakes Shopping Centre redevelopment" data-entity-type="file" data-entity-uuid="5fca22c5-d1ed-4e2c-8801-03f7df1eafc8" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/eastland%20podium.png?VersionId=uomwr41nF8CmLUZRDcu3mHQechlbxucS" />

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Designed by DKO Architecture, the proposal comprises four residential buildings ranging from 14 to 18 storeys above a two-level retail podium. The development would deliver 736 apartments, including 74 affordable homes, 215 Build-to-Rent apartments and 521 market residences. Provision has also been made for dual-key apartments, which could increase the total number of dwellings to 877.

At ground level, the shopping centre has been designed as the suburb's new meeting place, anchored by a full-line Woolworths and complemented by a curated mix of fresh food retailers, cafés, restaurants, health services and everyday convenience shopping. Generous pedestrian links and landscaped public spaces will connect the retail precinct through to Jack Mundey Reserve, creating a more walkable and connected neighbourhood.

Conquest CEO Michael Akkawi said the redevelopment was about far more than replacing a shopping centre.

"Eastlakes has been overlooked for too long, and this is the community’s moment. We are building a shopping centre and homes, a genuine heart for the suburb, and we genuinely want locals to help shape it."

"We enrich communities through the creation of homes, places, and experiences designed for life, built to last, and owner for generations. That starts with listening, so we warmly encourage everyone with a connection to Eastlakes to view the plans and share their thoughts."

<img alt="First look: Conquest unveils plans for 736-home Eastlakes Shopping Centre redevelopment" data-entity-type="file" data-entity-uuid="22f6fb20-54fb-4bd7-8a92-48fafdd00608" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/eastland.png?VersionId=cugp7s9hrMHGJJdYzkeAkrFoQgnF4GXf" />

DKO said the design had been shaped by the site's landscape setting and surrounding open space.

"Our vision for the site embraces its unique Bidjigal identity by blending the residential living with generous landscaping and a material palette inspired by the Bidjigal locality, and celebrating the panoramic views to Botany Bay and the wetlands reserves."

"Taking cues from Country, we seek to harmonise built form with the landscape and lightly touch the earth. By reconnecting, retaining and regenerating existing ecology, and weaving in natural elements, we can deepen our connection to Country."

The landscape strategy extends across the podium and rooftops, incorporating communal gardens, children's play areas, lawns, community gardens, family gathering spaces and extensive tree planting. New landscaped links will also strengthen the connection between the precinct and Jack Mundey Reserve, while publicly accessible open spaces have been integrated throughout the development.

The proposal builds on Conquest's broader placemaking strategy for the site. Through an ongoing partnership, local artist Joe Rashbrook has been appointed Urban Art Curator, working alongside young residents to transform the project's site hoardings into a public art gallery that allows the community to engage with the redevelopment before construction is complete.

Conquest has rapidly expanded its development pipeline since acquiring the Eastlakes site, with more than $6 billion worth of mixed-use projects now in planning across Sydney, including Stanmore, Castlecrag and Waterloo.

Conquest CEO Michael Akkawi said the redevelopment was about far more than replacing a shopping centre.

Jonathan Chancellor

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