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GUEST OBSERVER
The plaudits for Joan Kirner, who died on Monday, highlighted her achievements as a teacher, education activist, feminist and politician. It is also worth noting her pivotal role in the development of <a href="https://www.landcareonline.com.au/">landcare in Australia</a>.
Joan Kirner’s first ministerial role was as Victoria’s Minister for Conservation, Forests and Lands in the Labor government under <a href="https://en.wikipedia.org/wiki/John_Cain_%28junior%29">John Cain</a> from 1985-88. She was a very effective minister, working very hard, travelling tirelessly, seemingly remembering the name of every public servant and community volunteer she ever met. She brought in the <a href="https://www.depi.vic.gov.au/environment-and-wildlife/threatened-species-and-communities/flora-and-fauna-guarantee-act-1988">Flora and Fauna Guarantee Act</a>, delivering Victoria’s first effective controls on land clearing.
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However in the views of many, including me, Joan Kirner’s most enduring legacy will be Australia’s landcare movement, beginning in Victoria and spreading nationally.
I worked as the first National Landcare Facilitator from April 1989 to August 1992. This coincided with Joan Kirner’s time as Victorian Premier, and from meetings with her during that time and in conferences and airport lounges since, I know she was extremely proud of her landcare legacy.
<h2>The birth of landcare</h2>
In 1985, Kirner’s new department of Conservation, Forests and Lands brought together five separate agencies (the Forests Commission, National Parks, Fisheries and Wildlife, Lands, and the Soil Conservation Authority) that had apparently overlapping roles but very different institutional cultures and a track record of collaboration that was patchy at best.
It required considerable strategic nous and political skill to get this new department working cohesively, and Kirner proved to be a good fit as minister.
The new department needed to work across private and public lands to tackle issues at a large scale (such as erosion, salinity, pests and weeds), and they needed to involve the community.
From prior experience in soil conservation, senior officials knew that individual landholders and local communities need to “own the problem” and be involved in designing and implementing solutions in order to ensure lasting environmental improvement. Joan Kirner understood this implicitly, possibly from her long grassroots community experience with State School mothers’ clubs.
Senior soil conservation staff designed a new program in late 1985 to support voluntary neighbourhood groups to tackle land degradation problems, that they proposed to call Total Land Care. When the Minister saw the acronym, she stated that she definitely did not want to be known as “the Minister for TLC!”. So it became Land Care, soon shortened to LandCare.
The pioneering Victorian <a href="https://www.landcarevic.net.au/" target="_blank">LandCare</a> program was born, and the first LandCare group was launched at Winjallok near St Arnaud on 25 November 1986.
Crucially, Joan Kirner understood from the outset that the new program needed to have bipartisan support, and that this was most likely if it was seen to be led and owned by the farming community, working with conservationists. Joan Kirner invited Heather Mitchell, then President of the <a href="https://www.vff.org.au/" target="_blank">Victorian Farmers’ Federation</a> to co-Chair the program. This formidable duo emphasised the partnership at the heart of LandCare.
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Community-based catchment planning through LandCare: Andrew Campbell
The number of LandCare groups grew rapidly, building on the network of Farm Tree Groups and soil conservation groups across the state, and the innovative community education work in schools pioneered through the Victorian Salinity Program. Within five years, LandCare involved more than one third of farming families — an extraordinary achievement on a relatively modest budget.
<h2>Landcare goes national</h2>
Joan Kirner was quick to promote the Victorian program as a model for the nation, recommending it to Peter Cook, then Minister for Resources in the Labor government under Bob Hawke.
Around this time another unlikely but extremely strategic alliance was forming, between Rick Farley of the National Farmers' Federation and Phillip Toyne of the Australian Conservation Foundation.
I was asked by Toyne and Farley to work with Jane Elix of the ACF and Philip Eliason of the NFF on a proposal for a national initiative based on the Victorian model of facilitating partnerships between farmers and conservationists.
In late 1988, the ACF and NFF jointly proposed to Prime Minister Bob Hawke a A$340m, ten-year program for a Decade of Landcare. This represented a radical boost in Commonwealth funding - the then National Soil Conservation Program was about A$1m per year.
Bob Hawke agreed with alacrity, and the new national program was launched at the junction of the Murray and Darling rivers in July 1989. Crucially, both Labor and Coalition ministers stood on the podium, emphasising the bipartisan thread that began with Joan Kirner and Heather Mitchell and extended through Farley and Toyne.
As it had done in Victoria, the new program took off nationally, and in the 25 years since the Australian landcare model has spread to more than 20 <a href="https://theconversation.com/www.worldagroforestry.org/downloads/Publications/PDFS/B16017.pdf">other countries</a>. Landcare is an unsung Australian export success story - a great example of soft diplomacy.
 
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Landcare tree planting, Molonglo Catchment Group: Andrew Campbell
Forging bipartisanship
From this distance, those early days of landcare seem both inevitable and extraordinary.
It seems common sense now that farmers need to work together to tackle problems that cross farm boundaries, that planting trees on farms and protecting creeks and rivers is good farming practice, and that looking after the land for future generations is in the interests of the whole community, so it is fair that the whole community contribute to this effort — even better if such help can be practical as well as financial.
But this was not so obvious in the mid 1980s. Joan Kirner instinctively “got” landcare from the outset. She understood its community base and the dynamics of voluntarism.
She reached out. She understood the political potency of bipartisanship and unlikely alliances — she and Heather Mitchell were more than twice as powerful working together than either could be working from within their own political tribe.
She understood the importance of community ownership of problems, and empowerment to develop and implement solutions. She took the long view. Given the right information and support, she trusted grassroots community groups to do the right thing on the ground.
Against this backdrop, today’s politics seem depressingly partisan, glib, austere and myopic.
Government programs tend to be prescriptive and paternalistic, rather than imaginative, catalytic and empowering. Government agencies (more closely coupled with Ministerial offices than ever) seem allergic to risk, wedded to incremental tweaking of the status quo and fearful of anything transformative.
After years of cuts, redundancies and “efficiency dividends”, too many agencies lack sufficient technical expertise to be intelligent purchasers or to take well-considered risks in developing innovative new programs with a clear eye on the long-term public interest.
Perhaps landcare has simply been lucky over the last 30 years to have grown under the wise political stewardship of people such as Joan Kirner and Heather Mitchell among many others, matched at a grassroots level by countless community leaders across the continent.
But I’d like to think that when wise leaders design policies that deliberately make space for people at lower levels to innovate, to own their own agenda and to grow, then great things happen and lasting benefits can be delivered.
Andrew Campbell is Director, Research Institute for Environment and Livelihoods at Charles Darwin University. He can be contacted <a href="https://riel.cdu.edu.au/people/profile/prof-andrew-campbell" target="_blank">here</a>.
<h4>DISCLOSURE STATEMENT</h4>
Andrew Campbell does not work for, consult to, own shares in or receive funding from any company or organisation that would benefit from this article, and has no relevant affiliations.
If you’re interested in reading more on landcare, see the following titles:
Campbell, Andrew (1994) <a href="https://www.researchgate.net/publication/236627393_Landcare_communities_shaping_the_land_and_the_future" target="_blank">Landcare: communities shaping the land and the future</a>. Allen &amp; Unwin, Sydney. ISBN 1863735550
Catacutan, Delia, Constance Neely, Mary Johnson, Horrie Poussard and Rob Youl (Eds) (2009) <a href="https://www.worldagroforestry.org/downloads/Publications/PDFS/B16017.pdf" target="_blank">Landcare: local action-global progress</a>. World Agroforestry Centre, Nairobi. ISBN 9789290592457
Youl, Rob (Ed) (2006) Landcare in Victoria. Rob Youl, South Melbourne. ISBN 0977524000
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Joan Kirner united farmers, legacy remains

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AREC 2015 has come and gone for another year, and it was an absolute blast.
It was great seeing old friends at Australia's largest real estate conference, as well as meeting people for the first time.
On top of that, it was sensational to learn from the best real estate trainers in the world as well as expert speakers across multiple disciplines. So what did we learn and take away? 
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The reception to our stand this year was fantastic. 
A key takeaway was how far we had come in the 12 months since AREC 2014. 
A lot of agents came to the stand to tell us they were already using the site, and they loved that they were getting free exposure for their listings, a lot of other agents that had their listings connected tested out the new search results function and were blown away with the speed of results and the ease of use. 
Many people told us it was the fastest real estate search site they had ever experienced. 
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A few of the team members also got to sit in on some of the sessions from the world's leading agents and motivational speakers. Here were a few of the key takeaways that got documented on our Twitter feed throughout the conference.
<h3><a href="https://www.propertyobserver.com.au/https://twitter.com/Homelyau/status/604888963409584128" target="_blank">#arec15 Something unimportant done well does not make it important</a></h3>
<h3><a href="https://www.propertyobserver.com.au/https://twitter.com/Homelyau/status/604888502929457152" target="_blank">#arec15 simplify, simplify, simplify - decision is to cut away other options. Look for simple answers. Complicated answers are wrong</a></h3>
<h3><a href="https://www.propertyobserver.com.au/https://twitter.com/Homelyau/status/604888001886298112" target="_blank">#arec15 set targets and move forward, but have gratification on the way. You will burn out otherwise</a></h3>
<h3><a href="https://www.propertyobserver.com.au/https://twitter.com/Homelyau/status/604886630139183107" target="_blank">#arec15 testing and removal is the one thing you need to do. What not to do is essential</a></h3>
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<a href="https://www.propertyobserver.com.au/https://twitter.com/Homelyau/status/604883141686198272">#</a><a href="https://www.propertyobserver.com.au/https://twitter.com/Homelyau/status/604883141686198272">arec15</a><a href="https://www.propertyobserver.com.au/https://twitter.com/Homelyau/status/604883141686198272" target="_blank"> what would you do for just two hours a week. Could you get what you need done?</a>
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The insights were endless from the industry's best, but it seems the key takeaway was to focus more on being efficient and effective.
It was mentioned that agents are lacking in analysing their business and pinpointing definitively what actions make them money.
Too many agents are spending an abundance of time doing things that don't make money and that is detracting from what could help their business exponentially. 
You can find more of the key takeaways we learned by visiting our twitter feed <a href="https://twitter.com/Homelyau">here</a>, and looking through the hashtag <a href="https://twitter.com/search?src=typd&amp;q=arec2015">#arec15.</a>
 
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<div id="yui_3_17_2_1_1433401747153_195" class="image-block-wrapper " data-description="&lt;p&gt;The team on the booth!&lt;/p&gt;"><img class="thumb-image loaded" src="https://static1.squarespace.com/static/529321bee4b03e7a072a8255/t/556e5491e4b0a6d4da000928/1433294019522/IMG_0779+2.JPG?format=1000w" alt="The team on the booth!" data-src="https://static1.squarespace.com/static/529321bee4b03e7a072a8255/t/556e5491e4b0a6d4da000928/1433294019522/IMG_0779+2.JPG" data-image="https://static1.squarespace.com/static/529321bee4b03e7a072a8255/t/556e5491e4b0a6d4da000928/1433294019522/IMG_0779+2.JPG" data-image-dimensions="2448x3264" data-image-focal-point="0.5,0.5" data-load="false" data-image-id="556e5491e4b0a6d4da000928" data-type="image" data-image-resolution="1000w"></div>
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The team on the booth!
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<div id="yui_3_17_2_1_1433401747153_210" class="image-block-wrapper " data-description="&lt;p&gt;One of Homely's biggest supporters, Lachlan Kranen and Homely team member Angela.&amp;nbsp;&lt;/p&gt;">Todd Schulberg</div>
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Todd Schulberg handles all things marketing for <a href="https://homely.com.au/" target="_blank">Homely.com.au</a> - Living and breathing property, Todd has a keen interest in the movements in the market and how agents can utilise new tools and technology in order to be more connected. Using all things social, Todd suggests different ways that agents can engage and think outside the square with their marketing approach.
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AREC 2015 wrap by Homely's Todd Schulberg

<html><body>Australian Property Monitors (APM) has released a list of auction results in Sydney for Saturday, 6 June. <a href="https://www.homepriceguide.com.au/saturday_auction_results/Sydney.pdf" target="_blank" rel="nofollow">Click here</a> for the auction results, and click on each street address to see the property's marketing.</body></html>

APM's Sydney auction results for Saturday June 6

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GUEST OBSERVER
Inspired by Robert Shiller’s best seller, Irrational Exuberance, I developed the Jamie Durie Index (JDI) over a decade ago, which represented the number of times the name ‘Jamie Durie’ appeared in newspapers and magazines.  Shiller’s book suggested that the media typically play an important role in propagating asset price booms.  
Jamie Durie -host of top rating TV show, The Block - was the poster boy of Australia’s property market culture and the JDI was designed to measure the media attention and chatter surrounding property.  As it happened, the JDI correlated closely with the cycle in house prices, with both peaking in 2003.
At the time, Australian property was booming, stories of house price gains achieved in no time with an assist from plenty of debt dominated dinner party conversation, and Australia was rapidly becoming a nation of home renovators, inspired by Jamie Durie and shows like The Block.
Fast forward to 2015 and The Block has come a long way, having out-lived its original host.  In its initial form, it survived only two seasons.  After a six year absence, the Nine Network re-introduced the show in 2010, which has been hosted by Scott Cam ever since.  Despite the 20% lift in average home values in the past three years, The Block and other home renovation shows – including House Rules and Reno Rumble - haven’t hit the heights of a decade earlier.
The rise and rise of home renovation shows...
The recently appointed Treasury Secretary, Mr John Fraser, has weighed in on the debate about whether there is a bubble in property prices, suggesting that the plethora of home renovation television shows represents compelling evidence of over-investment in housing.  While there might be signs of a property market culture re-emerging, we need to tread carefully about drawing strong inferences about a property bubble for a number of reasons.
...but little sign of a speculative frenzy
First, a shift in consumer attitudes and tastes has contributed to the proliferation of home renovation shows.  For instance, the growing popularity of cooking shows, including Master Chef and My Kitchen Rules, together with the emergence of the celebrity chef, is largely due to the renewed interest in food and home cooking and a waning interest in processed foods.  Is anyone suggesting there is a bubble in home cooked food?
Second, the aggregate data doesn’t point to over-investment in housing, just yet.  Private sector dwelling investment has lifted to a little above 5% of GDP, but this remains well below prior peaks of around 6½% (see chart).
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Third, despite the growing interest in home renovation shows, this has not yet translated into a lift in the share of their budgets that consumers devote to home renovations.  That much is obvious from the fact that the value of renovations declined to 1.8% of GDP in 2014, well below the peak of 2.7% of a decade ago and its lowest level in more than twenty years (see chart).  To put this in context, had the value of renovations accounted for 2.7% of GDP in 2014, this would have translated into a dollar value of $43 billion, well above the actual spending on renovations of $30 billion, representing a shortfall of over $10 billion.
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The academic literature confirms that the level of home improvement activity provides a valuable insight into home owners' expectations of future price growth.  In a paper published in the Journal of Financial Economics, Harrison Hong and other researchers from Princeton show that in the United States, homeowners who are optimistic about future house prices are more likely to speculate on future price growth by renovating.
Fourth, increased liquidity, a pre-requisite for speculative bubbles according to Shiller, has been absent to date.  In fact, the annualised turnover rate of the stock of housing has declined to 4%, around half its level from a decade ago (see chart).  Normally, turnover rises with house prices because greater home equity encourages home-owners to trade up to more expensive homes and vendors who observe higher turnover infer that demand has picked up and lift their reserves.
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The RBA speculates that various factors underpin muted housing turnover: the unusually low participation of owner-occupiers in housing market transactions and growing evidence that homeowners have become more reluctant to borrow against increases in net wealth to trade up homes.  Hardly ingredients of a property bubble.
Tipping point for a bubble has not been reached...yet
Despite the proliferation of home renovation shows on Australian television, signs of a re-emerging property market culture, and strong upswing in Sydney and Melbourne property prices, the modest level of renovation activity, low turnover in the housing stock and the fact that private sector dwelling investment is in line with historical norms suggests that the property market does not yet share the speculative elements that prevailed during the boom of the early 2000s.
Back then people renovated to cash in on the soaring equity in their home so they could trade up to bigger places.  Now, the reality has set in that the transaction costs of moving are too high and households are more realistic about their expectations of capital growth.  If there does exist a tipping point for the emerging property market culture to morph into a speculative frenzy of over-investment, I believe that we are not there yet.
 
Founder of Evidente, <a href="https://www.evidente.com.au" target="_blank">Salvatore (Sam) Ferraro</a>, is a top rated quantitative analyst and has over 17 years of experience in financial markets, with investment banks, Goldman Sachs and Merrill Lynch, providing advice on best practice to portfolio managers and as a senior portfolio manager for a boutique funds management firm, covering banks, insurers, utilities and infrastructure stocks. 
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Are the Jamie Durie devotees really to blame for the 2015 over-investment property boom?

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The RBA’s decision to leave the cash rate on hold at 2% was not unexpected and like last month’s cut will likely result in a more subdued response from lenders and savings providers. 
In February, the RBA’s rate cut was followed by a swift and generous 0.25% reduction in variable rates by 93% of lenders, while in May, the reaction was slower and a little more measured with only 33% passing on the full 25bps. Some lenders took up to three weeks to announce a rate decision and a further eight lenders still haven’t made a call either way. 
While the Bank’s first cut incited a proactive response, the most recent decrease meant lenders were forced to make tougher decisions based on their own funding measures and home loan margins. 
These cuts are certainly a good thing for refinancers, with the average rate now a low 4.72% (down from 4.98% in February), and the lowest variable rate a competitive 3.98%.
While we saw a huge number of fixed rate discounts being made in February, that trend has slowed and this month we’re seeing some lenders increase fixed rates for the first time in months. 
It’s possible we’ve hit the bottom of the cycle for fixed rates and while you can, you can still fix your loan for 3 years for less than the leading variable rate – at just 3.95%.  
In the past month, we’ve also seen changes on the investor front, with some of the country’s largest lenders cutting back on discounts and changing lending criteria in a bid to decrease their volume of investor loans, in response to pressure from APRA.
For example, each of the big 4 banks have removed discretionary pricing on investor loans and two lenders (Bankwest and Heritage Bank) have implemented a loan-to-value ratio limit of 80% for new investor loans.
Those looking to build up a house deposit are suffering a double whammy of high property prices and low savings returns. 
While the average property price in one of Australia’s top 8 capital cities will require a deposit of at least $57,000, the average at-call savings account will earn you just 2.43%. The best rate you can get by locking your money away for 6 months is only slightly higher at 3.5%.
Kirsty Lamont is a director at loan comparison site, Mozo.com.au
For information on property loans, rates and more, visit Mozo.com.au or <a href="http://propertyobserver.com.au/forward-planning/tools/ebooks-and-webinars/42368-get-loan-savvy-expert-tips-for-a-first-time-investment-or-refinancing-loan-in-a-free-ebook" target="_blank">click here</a> for the free Property Observer eBook, Get loan-savvy – tips for a first time, investment or refinancing loan, which helps you decide on a home loan that meets your requirements. 
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Is the party over for borrowers? Mozo's Kirsty Lamont

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<h3 id="mr-title">Statement by Glenn Stevens, Governor: Monetary Policy Decision</h3>
At its meeting today, the Board decided to leave the cash rate unchanged at 2.0 per cent.
The global economy is expanding at a moderate pace, but some key commodity prices are much lower than a year ago. This trend appears largely to reflect increased supply, including from Australia. Australia's terms of trade are falling nonetheless.
The Federal Reserve is expected to start increasing its policy rate later this year, but some other major central banks are continuing to ease policy. Hence, global financial conditions remain very accommodative. Despite some increases in bond yields recently, long-term borrowing rates for sovereigns and creditworthy private borrowers remain remarkably low.
In Australia, the available information suggests the economy has continued to grow, but at a rate somewhat below its longer-term average. Household spending has improved, including a large rise in dwelling construction, and exports are rising. But a key drag on private demand is weakness in business capital expenditure in both the mining and non-mining sectors and this is likely to persist over the coming year. Public spending is also scheduled to be subdued. Overall, the economy is likely to be operating with a degree of spare capacity for some time yet. With very slow growth in labour costs, inflation is forecast to remain consistent with the target over the next one to two years, even with a lower exchange rate.
In such circumstances, monetary policy needs to be accommodative. Low interest rates are acting to support borrowing and spending. Credit is recording moderate growth overall, with stronger lending to businesses and growth in lending to the housing market broadly steady over recent months. Dwelling prices continue to rise strongly in Sydney, though trends have been more varied in a number of other cities. The Bank is working with other regulators to assess and contain risks that may arise from the housing market. In other asset markets, prices for equities and commercial property have been supported by lower long-term interest rates.
The Australian dollar has declined noticeably against a rising US dollar over the past year, though less so against a basket of currencies. Further depreciation seems both likely and necessary, particularly given the significant declines in key commodity prices.
Having eased monetary policy last month, the Board today judged that leaving the cash rate unchanged was appropriate at this meeting. Information on economic and financial conditions to be received over the period ahead will inform the Board's assessment of the outlook and hence whether the current stance of policy will most effectively foster sustainable growth and inflation consistent with the target.
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Strong again in Sydney: RBA Governor Glenn Stevens' June 2015 meeting statement

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A Brighton beachfront won the battle for the week's top 10 sales beating out a North Bondi sale in CoreLogic's RP Data's 10 most expensive sales.
<a href="/expert-insights/buying/8-million-brighton-beachfront-sale-rounds-out-melbournes-ascending-autumn-auctions">3 Miller Street, Brighton</a>, VIC, 3186, three-bedroom house, sold at auction on May 28 by RT Edgar Brighton for $8.04 million (pictured above).
13 O'Donnell Street, North Bondi, NSW, 2026, a contemporary five-bedroom house, sold on May 28 by Raine &amp; Horne Double Bay for $5.1 million (pictured below).
<img src="https://i1.au.reastatic.net/456x342/e61cdcf57bfaa0b038dae3587d68e0d8ab492acec93c354e0d27da8800324a03/main.jpg" alt="13 O'Donnell Street, North Bondi" title="13 O'Donnell Street, North Bondi" data-index="0">
45 Mathoura Road, Toorak, VIC, 3142, four-bedroom house, sold at auction on May 30 by Marshall White Albert Park for $4.75 million.
1/161 Hedges Avenue, Mermaid Beach, QLD, 4218, four-bedroom house, sold on May 29 by Ray White Prestige Gold Coast Surfers Paradise for $4 million.
15 Nott Street, Malvern East, VIC, 3145, five-bedroom house, sold at auction on May 30 by Abercromby's Real Estate Armadale for $3.95 million.
36 Wentworth Avenue, Canterbury, VIC, 3126, four-bedroom house, sold at auction on May 30 by Jellis Craig Real Estate Hawthorn for $3.95 million.
20 Shellcove Road, Neutral Bay, NSW, 2089, five-bedroom house, sold on May 28 by McGrath Mosman for $3.825 million.
3 Strathfield Avenue, Strathfield, NSW, 2135, four-bedroom house, sold at auction on May 30 by Georges Ellis &amp; Company Strathfield for $3.71 million.
30 Wentworth Street, Randwick, NSW, 2031, four-bedroom house, sold at auction on May 30 by Ray White Double Bay for $3.377 million.
47 Union Street, McMahons Point, NSW, 2060, four-bedroom house, sold at auction on May 26 by McGrath Neutral Bay for $3.35 million.
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Brighton wins battle of the beachside locations: Corelogic RP Data's top 10

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The RBA’s decision to cut the cash rate to 2% last month went against the recommendation of the CAMA RBA Shadow Board. Since then economic data continues to show signs of weakness. Unemployment is up slightly, investment down, and consumer and business confidence remain fragile.
The international economy continues to pose a threat to the Australian economy and inflation remains comfortably within the RBA’s target band. But asset prices, Sydney house prices in particular, continue to post high gains.
The CAMA RBA Shadow Board on balance prefers to hold firm but believes the cash rate has bottomed and an increase is due in the near future. In particular, the Shadow Board recommends the cash rate be held at its current level of 2%; it attaches a 60% probability to this being the appropriate policy setting. The confidence attached to a required rate cut equals a mere 2%, while the confidence in a required rate hike stands at 38%.
According to the Australian Bureau of Statistics, Australia’s jobless rate edged up to 6.2% in April. Worryingly, in the same month full-time employment, total employment and the participation rate have fallen. Wage growth remains at a record low: the Australian wage price index increased by 2.3% in the last quarter, well below the average of 3.5% for the period 1998-2015.
The Australian dollar remains range-bound between US76¢ and US80¢. Yields on Australian 10-year government bonds have increased further, to 2.84%, from its recent low of 2.59%, implying a steepening of the yield curve, normally a bullish sign.
Regional housing markets, particularly Sydney and Melbourne, and domestic share prices remain buoyant. This remains a primary concern for many Shadow Board members as the asset price increases coincide with an increase in private sector leverage, leading to misallocated investment and opening up the possibility of a costly price correction. According to the Reserve Bank of Australia total housing credit grew by 7.2% (year-ended) in April 2015, compared to 6% in April 2014.
The international economy remains subdued. For Europe, a noticeable pickup in growth is not on the horizon, at least not until the Greek debt crisis is resolved. Recent revisions of US data indicate that US growth this year has been slower than initially thought, with some analysts suggesting the US economy actually contracted in the first quarter. Without a string of good news about the US economy, the Federal Reserve Bank’s increase of the cash rate is likely to be pushed back ever more. Commodity prices are likely to remain soft and possibly fall further.
Consumer and producer confidence measures continue to be mixed. However, of particular concern is the outlook for domestic investment. The ABS survey of chief financial officers conducted in April and May of this year reveals that total capital expenditure is still expected to fall significantly, with the current estimate for fiscal year 2015-16 being 24% less than the corresponding estimate for fiscal year 2014-15. The trend volume estimate for total new capital expenditure fell 2.3% in the March quarter 2015 while the seasonally adjusted estimate fell 4.4%.
<h2>What the Shadow Board believes</h2>
The Shadow Board’s confidence that the cash rate should remain at its current level of 2% equals 60%. The confidence that a rate cut is appropriate is a mere 2%, whereas the Shadow Board considers it much more likely (38%) that a rate increase, to 2.25% or higher, is the appropriate policy decision for this month.
The probabilities at longer horizons are as follows: six months out, the estimated probability that the cash rate should remain at 2% equals 23%. The estimated need for an interest rate increase lies at 76%, while the need for a rate decrease is estimated at 3%.
A year out, the Shadow Board members’ confidence in a required cash rate increase equals 81%, in a required cash rate decrease 2% and in a required hold of the cash rate 17%.
 
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<h2>Comments from Shadow Reserve bank members</h2>
Mark Crosby, Associate Professor, Melbourne Business School:
“The case for a cut or cuts in the near future does not seem to be as strong as in past months.”
 
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Further signs that the economy is not weakening further, so that the case for a cut or cuts in the near future does not seem to be as strong as in past months. Still uncertainty on the global front, with the ever present possibility that Greece may finally default. But does not seem that would have longer term effects on global economies. As a result the longer term outlook would be for a start towards rate normalisation within 12 months.
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Mardi Dungey, Professor and Deputy Head, School of Economics and Finance at University of Tasmania:
“I recommend that a higher policy rate should have been maintained.”
 
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The RBA’s decision to ease monetary policy in May - the timing of which was partly to meet the “challenges of communication” (RBA Minutes of Board Meeting for May 2015) associated with the timing of the Federal Budget - is a gamble that accommodative monetary policy can overcome the problems of the inactive role fiscal policy is currently playing in macro policy making. As there seem to be few signs of improvement on the fiscal front, the RBA is taking a risk that looser monetary policy can fill part of this role and not cause structural problems elsewhere.
The Board meeting minutes make clear that most domestic conditions are if anything only a little weaker than in previous months; and there is considerable uncertainty as to whether consumption will respond similarly to that experienced in pre-crisis conditions – given the rather nasty scare experienced by many in the economy, it seems unlikely we will seem this type of response to lower rates.
More likely is that looser credit will inflate house prices – an area where the fiscal reform agenda could make substantial improvements by removing a number of incentives to over-invest in housing. Given the hand that the RBA has been played, it is not unreasonable that they chose to move rates. However, if all arms of policy were playing a role in active economic management this would not be the path I would recommend.
For that reason, my recommendations are based on the presumption that monetary policy cannot reasonably be expected to manage single-handed and that it is able to follow its usual best-practice course in setting policy in partnership with other arms of policy making, in which case I recommend that a higher policy rate should have been maintained.
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Warwick McKibbin, Chair in Public Policy, ANU Centre for Applied Macroeconomic Analysis (CAMA) , Crawford School of Public Policy at Australian National University:
“The distortion low interest rates is causing in asset markets is worsening.”
 
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Continued weakness in nominal GDP growth in Australia implies that the neutral policy interest rate continues to fall. However, evidence of rising asset prices, particularly in the housing markets of Sydney and Melbourne, makes the setting of interest rates increasingly complex. From the point of view of short term macroeconomic factors, low interest rates in Australia could be justified; however, the distortion this is causing in asset markets is worsening.
This highlights the difficult trade-off between short term growth and medium term vulnerability. My judgement is that the damage caused by a painful adjustment in the housing market and the high levels of leverage by households in an environment of a downward adjustment in trend economic growth is a dangerous mix that loose monetary policy and even more financial leverage cannot solve. Add to this situation, the move to normalise interest rates in the US and there are many bad scenarios for Australia that are plausible.
I recommend leaving interest rates unchanged (indeed I would not have lowered them to the current level). Monetary policy should be focused on medium term stability especially if it has little prospect of solving the problems that cause weak short term demand. There is strong evidence that a point have been reached where monetary policy cannot offset the core problems caused by uncertainty about economic and political prospects in the Australian economy.
The lack of substantial policy assistance from fiscal rebalancing or substantive economic reform generally, is increasingly backing the Reserve Bank into a corner. It appears that many politicians do not appreciate the risks that now face the Australian economy. No wonder investment is weak and uncertainty is damaging economic prospects in Australia. It may be that the optimistic projections in the recent federal budget turn out to be correct, however, the vulnerabilities within the Australian economy are growing and lower interest rates without any other policy response makes this situation worse.
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James Morley, Professor of Economics and Associate Dean (Research) at UNSW Australia Business School:
“The RBA has scope to hold the policy rate steady.”
 
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The relatively stimulative federal budget and the recent lower level of the Australian dollar mean that the RBA has scope to hold the policy rate steady this month and even start raising it back to its neutral level over the medium term.
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Jeffrey Sheen, Professor and Head of Department of Economics, Macquarie University, Editor, The Economic Record, CAMA:
“The cut in the cash rate to 2% in May was the right move.”
 
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In my opinion, the cut in the cash rate to 2% in May was the right move. My expectation is that it should remain at this level until at least early 2016. The net saving glut in Australia continues to be a problem. Consumption growth is unlikely to contribute much to growth normalisation because of the relatively high levels of household debt. Growth recovery will have to come largely from business investment, which unfortunately shrank badly in the March quarter and continues surprisingly in waiting mode, despite low interest rates.
The proposed federal budget in May 2015 turned less austere than anticipated, reducing one obstacle to the return to normal growth. The 20% trade-weighted exchange rate depreciation over the last 24 months will help growth recovery by boosting non-mining exports, but this boost should continue for a while to be more than cancelled by the falling value of mining exports.
Overall, upside inflation risk remains minimal since wages growth is modest and energy prices are unlikely to rise much. The outlook for Greek debt negotiations looks grim, with possible negative ramifications for global asset markets. Therefore, the Australian economy needs its current monetary policy push to remain for some time yet, and needs a stronger fiscal push.
The CAMA RBA Shadow Board is a project by the Centre for Applied Macroeconomic Analysis, based at the ANU, which asks industry and academic economists what interest rate the Reserve Bank of Australia should set. Timo Henckel is the non-voting chair of the Board.
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Interest rates should fall no further: the RBA Shadow Board

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GUEST OBSERVER
The RBA continues to face a tricky trade-off. Low interest rates are needed to support the rebalancing of growth towards the non-mining sectors and encourage the AUD to fall. At the same time, low rates are also stoking a housing price boom in some cities, particularly Sydney (up 40% in three years) and to a lesser degree Melbourne (up 24%). 
In response to this challenge, the Australian Prudential Regulation Authority (APRA) has been turning up the dial on lending standards, particularly as growth in lending to housing investors has been running ahead of the 10% target pace. Most of the major banks have reduced discounts on lending rates to housing investors in recent weeks as a result. Of course, this comes at the same time that the RBA has delivered another 25bp cut, on 5 May, so broader financial conditions are looser.  
With the APRA more focused on managing the financial cycle, the RBA may be able to increasingly shift the balance of its focus to supporting the real economy. This month brought further signs of rising household demand: dwelling approvals are lifting and thisis feeding through to retail sales. However, the capital expenditure survey still shows few signs that non-mining businesses are prepared to ramp up their investment plans, which is the next stage of the rebalancing act. The labour market looked more promising, withsigns of an improving business sector outlook, although it is too early to be confident.
The Federal budget, delivered in early May, included measures that were a bit more supportive of growth than last year’s budget and drove a modest increase in consumer sentiment. The AUD has also fallen, as the USD has appreciated, which is helpful for growth, although, on our estimates, it still remains too high for the RBA’s comfort.
We expect the RBA to be on hold in coming months as the central bank watches for the impact on local economic activity of the 50bp of cuts already delivered this year, monitor the impact of the APRA’s tightening measures on the financial cycle, and hopes for a lower AUD.
<a href="/images/2015/05/29/700_hsbc1.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2015/05/29/700_hsbc1.jpg" alt="" width="738" height="327">
Weak business investment outlook holding back growth
This month brought more signs that growth is still running at a below-trend pace and that this may continue for some time yet. Although the rebalancing of growth, from being led by mining investment to being supported by non-mining sectors, is underway, it has been slow.
Housing construction has been picking up strongly and retail sales have been rising, but this is yet to feed through to a pick-up in non-mining businesses investment intentions, which is the next stage of the rebalancing act. This month’s Q1 capital expenditure survey continued to report that non-mining businesses see their investment falling in financial year 2015-16 (Chart 1). There are a range of potential reasons for this weak outlook, including that business confidence has remained subdued (for more on this see: Downunder Digest: Australia’s weak investment outlook, 25 May 2015).
Labour market data look better, but are they believable?
On a more positive side, this month’s labour market data continued to suggest some improvement. According to the monthly survey, employment was growing at 1.5% y-o-y in April and there has been an even stronger pick-up in total hours worked, which is often a precursor to a further rise in jobs growth. 
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 <img src="/images/2015/05/29/hsbc2.jpg" alt="" width="601" height="271" style="line-height: 1.3em;">
The budget is less of a drag, but the AUD is still too high
This year’s budget, delivered in early May, saw fiscal policy settings move in the right direction to be less of a drag on growth than before, although, according to our estimates, the budget still was not an outright stimulatory setting. The government backed away from its previous austerity plans and allowed the budget deficit to expand in line with its lower tax revenue estimates. The budget also contained a planned boost to childcare subsidies and a tax cut for small businesses. As a result, the fiscal impulse should be less of a drag on the economy than estimated in last year’s budget (Chart 3).
However, the AUD still remains too high for the RBA, which means it remains a headwind to the rebalancing of growth towards non-mining sectors. We think the RBA would be more comfortable with the AUD around USD0.70 or 10% below the current level (Chart 4).
Asset price worries see the APRA tighten lending standards
With a pick-up in non-mining business investment needed, and the RBA trying to get the AUD to depreciate to assist the rebalancing process, the cash rate was cut to a new record low of 2.00% earlier this month.
However, very low interest rates are also driving a strong pick-up in a number of asset prices, particularly housing prices in Sydney and to a lesser extent in Melbourne, as well as strong growth in commercial property prices. Sydney housing prices are growing at a y-o-y pace of 15% and are up 40% over the past three years, with most of the activity being driven by property investors (Chart 5 and 6).
In the face of growing risks of asset price misalignments, the Australian Prudential Regulation Authority (APRA) has been turning up the dial on lending standards since late 2014. The dial appears to have beentightened up further in recent weeks, following March credit data, which showed system-wide lending to investors growth of 10.4% y-o-y, above the APRA’s preferred ceiling of 10% growth (introduced in December 2014). In recent weeks, Australia’s major banks have reduced discounts on lending rates to housing investors, which seems likely to reflect the prudential regulator’s tightening.
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APRA has also announced that it has further measures available to use, if necessary: including additional oversight, potentially increasing capital requirements on lending, and applying strict limits (rather than soft targets) on particular types of lending (‘macro-pru’).
The RBA needs to balance the financial cycle and the real economy
With the APRA more focused on managing the financial cycle, the RBA may be able to increasingly shift the balance of its focus to supporting the real economy. Nonetheless, comments by the RBA’s Deputy Governor, Philip Lowe, following a recent speech, highlight that the central bank still has concerns about asset prices. He noted that ‘household debt is high, property prices are very high, household income growth is slow, the unemployment rate has drifted up – all those things would suggest there has been an increase in the level of risk, particularly as people have bought property for investment purposes’.
Having just delivered a further 25bp cut in the cash rate earlier this month, we expect the RBA to be in ‘watch and wait’ mode. The RBA will be watching for signs that lower interest rates and the government’s more positive budget message could drive a lift in business confidence, which may eventually translate into a pick-up in business investment over time. The central bank will also be watching for signs that the APRA’s tighter lending standards may see a pull-back in the pace of growth in the Sydney and Melbourne housing markets and particularly reducing investor’s appetite for involvement.
Finally, the RBA will continue to wait for the AUD to fall further. It is clear that the central bank would prefer an AUD depreciation to do the work for it in terms of further supporting the rebalancing of growth. However, if the AUD does not fall, the recent tightening by the APRA may allow the RBA to consider further cuts without excessive concern about overinflating asset prices.
<a href="https://www.about.hsbc.com.au/hsbc-in-australia/management-team" target="_blank">Paul Bloxham</a> is Chief Economist (Australia and New Zealand) for HSBC. 
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Sydney's property prices and the RBA's tricky trade off: HSBC's Paul Bloxham

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The difference between median house and median apartments is greatest in Adelaide, according to new figures from CoreLogic RP Data.
CoreLogic RP Data found the narrowest gap was Brisbane. 
The Brisbane gap was $70,000 with houses 14.5% dearer than units.
The Melbourne gap was $82,000 with houses 15% dearer than units.
The Perth gap was $88,000 with houses 16% dearer than units.
The Canberra gap was $103,000 with houses 18% dearer than units.
The Sydney gap was $172,000 with houses 20% dearer.
The Darwin gap was $110,000 with houses 20% dearer than units.
The Hobart gap was $74,000 with houses 21% dearer than its units. 
The Adelaide gap was $105,000 with houses 25% dearer.
 
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Capital cities - the gap between house and apartment price medians: CoreLogic RP Data

Local developer Harridan is seeking to turn its Woolloongabba apartment project into the first stage of a broader transformation of Burke Street, using a new 16-storey mixed-use building to establish a greener pedestrian connection toward the rapidly evolving Boggo Road transport and knowledge precinct.

The South East Queensland developer has filed plans for 154 apartments on the <a href="https://www.apartments.com.au/new-apartments/4-burke-street-woolloongabba-qld-4102">southern side of Burke Street</a>, where its proposal has been designed alongside a wider vision by LatStudios for the street.

That vision positions the southern side of Burke Street for buildings of 15 storeys and above, while envisaging lower-rise development of up to five storeys on the northern side to transition into Woolloongabba's existing character housing. It also proposes wider pedestrian verges, deep planting, new street trees and upgrades to the pedestrian approach to Boggo Road Station.

The Harridan development itself has been designed by Brisbane-based Arqus Design and will comprise 154 apartments across 16 storeys. The mix is weighted heavily toward two-bedroom apartments, with 121 proposed alongside 10 one-bedroom and 23 three-bedroom residences. There will typically be around 14 units per floor.

A lower-ground car park and three podium levels will accommodate 156 resident parking spaces, along with visitor and commercial parking. There will also be 154 resident bicycle spaces and 40 visitor bicycle parks.

&nbsp;

Harridan is a family-owned developer and part of the Holmwood Highgate Group, with more than three decades of development activity across South East Queensland. Its portfolio spans residential, commercial and industrial property, with current residential projects including Riverbank on Byron in Bulimba, Esperance Residences in Carina and The Precinct at Kinross Road in Thornlands.

Wooloongabba has been popular for apartment developers, particularly since the announcement of the 2032 Summer Olympics games in Brisbane.

While there have been a lot of development applications, it has failed to materialize into real supply.&nbsp;

Sarazin has been the major player in the area. They are under construction at Murcia Residences, on the fringe of East Brisbane and Woolloongabba. They have just launched <a href="https://www.apartments.com.au/new-apartments/the-stanley-residences-woolloongabba-8-trafalgar-street-woolloongabba-qld-4102">The Stanley Residences</a>, in Woolloongabba on Trafalagar Street. They also have Nuage coming soon on the nearby <a href="https://www.apartments.com.au/new-apartments/nuage-woolloongabba-14-wellington-road-woolloongabba-qld-4102">Wellington Road</a>.

Joel Robinson

First look: Harridan plans Burke Street transformation beside Boggo Road transport hub

IN BRIEF

<ul>
	<li>
	Just three double-storey Sky Homes sit at the top of The Waterline, each with its own private marina berth and rooftop terrace.
	</li>
	<li>
	Construction on The Waterline is complete, with the first residents expected to move in from mid-October.
	</li>
	<li>
	Sky Homes range from 282 sqm to 367 sqm and are priced from $3.65 million.
	</li>
</ul>

<hr />
Lewis Land has opened the first completed sky home for inspection at Harbour Shores, giving buyers their first opportunity to step inside one of just three double-storey residences crowning The Waterline.

Each sky home comes with its own private marina berth, rooftop terrace and Broadwater views, combining the scale of a larger home with direct access to the boating lifestyle that underpins the wider <a href="https://www.apartments.com.au/new-apartments/harbour-shores-biggera-waters-564-oxley-drive-biggera-waters-qld-4216">Harbour Shores</a> masterplan.

[smartcode_project:default project_id=113271 project_image_fid=366708]

Lewis Land Head of Development Michael Long said the inclusion of a berth with every Sky Home had become increasingly valuable as marina access across the Gold Coast tightened.

“Marina berths are becoming increasingly difficult to secure across the Gold Coast, so including one with every Sky Home makes this a genuinely rare offering,” Long said.

“The private 70-berth marina will accommodate boats up to 12 metres in length and is positioned just 2.5 kilometres from the Broadwater, placing the open ocean only 15 minutes away.

“Being able to step out of your home onto your boat is a rare luxury, and it’s something residents here can look forward to when it opens later this year.”

[smartcode_project:default project_id=113271 project_image_fid=366709]

The display opening comes as construction completes on The Waterline, with the first residents expected to move in from mid-October.

The three Sky Homes range from 282 sqm to 367 sqm and each feature three bedrooms, three bathrooms, multiple living zones, expansive kitchens with butler's pantries and large balconies taking in the Broadwater outlook.

Each residence also has three secure basement car spaces and additional storage.

“This is the first opportunity the Gold Coast has had to step into Harbour Shores and see, touch and feel what we’re bringing to life here,” Long said.

“There are only three Sky Homes within The Waterline, ranging in size from 282sqm to 367sqm, with each residence featuring three large bedrooms, three bathrooms, multiple living zones, expansive custom-built kitchens with butler’s pantry, and large balconies capturing Broadwater views.”

<img alt="Harbour Shores" data-entity-type="file" data-entity-uuid="bab65e10-4fab-45e1-92d8-fc56e2ab98ff" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-25%20at%202.00.16%E2%80%AFPM.png?VersionId=XT8q76LsPkw3cYTsvN3JfFDaPLud90PN" />

Residents of The Waterline will have access to a private pool, along with Harbour Shores' wider collection of amenity including a lagoon pool, social clubhouse, tennis court, gym, yoga facilities and sauna.

Lewis Land partnered with Studio Collective to furnish the completed display, with the interiors designed to demonstrate how the residences could function as permanent homes rather than simply as show apartments.

Studio Collective Director Melissa Park said the surrounding waterways informed the interiors, but in a more restrained way than a traditional coastal scheme.

“We drew inspiration from the canals and coastal surrounds, but our approach was to interpret that subtly through layered materials and a grounded palette of earthy tones, rather than literal coastal references,” Park said.

“We introduced hero moments of green and teal to reference the surrounding waterways, while mirrored elements help reflect natural light.

“The result is a residence that feels elevated yet comfortable, somewhere buyers can genuinely imagine themselves living, entertaining and unwinding.”

Sky Homes are priced from $3.65 million.

Lewis Land is also offering private marina berths with The Residences, its limited collection of three and four-bedroom villas positioned directly along the Harbour Shores waterfront boardwalk.

Three-bedroom villas are priced from $2.99 million, while four-bedroom residences start from $3.19 million.

Harbour Shores is being marketed by Colliers International.

[smartcode_project_cta:default project_id=113271]

Lewis Land opens sky home display as The Waterline completes at Harbour Shores

St Vincent de Paul Society Housing Australia has filed plans for a major mixed-use housing precinct on the southern edge of the North Sydney CBD, adding another significant proposal to a pocket around North Sydn​ey Station that is quickly becoming one of the LGA's busiest development zones.

The State Significant Development Application covers a 5,990 sqm site at <a href="https://www.apartments.com.au/new-apartments/1-19-mackenzie-street-lavender-bay-nsw-2060">1-19 MacKenzie Street and 211 Blues Point Road in Lavender Bay</a>, immediately south of Nor​th Sydney Station and between the commercial core and the lower-rise Lavender Bay Heritage Conservation Area.

Designed by Wardle, the proposal would deliver a new residential tower comprising 88 build-to-sell apartments and 19 affordable apartments, alongside a separate co-living building with 57 rooms and a building manager's studio.

It would also see the significant restoration and upgrade of St Francis Xavier Catholic Church, the adaptive reuse of the former school building, new parish facilities, retail, a new public square and around 1,000 sqm of publicly accessible open space.

<img alt="Vinnies North Sydney" data-entity-type="file" data-entity-uuid="d5dd7f87-a617-463e-b577-17541e01f0e9" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-26%20at%209.10.13%E2%80%AFAM.png?VersionId=4R8TsFN3P_LrrXO2HswTOIrx2blil8lh" />

The project is seeking a concurrent rezoning of the site to R4 High Density Residential and an increase in the maximum building height to allow a tower reaching RL120, or up to 20 storeys. The proposal was progressed through the NSW Government's Housing Delivery Authority pathway.

The build-to-sell component will be weighted toward larger apartments, with just six one-bedroom apartments compared with 31 two-beds, 43 three-beds and eight four-bedroom residences.

The 19 affordable apartments will comprise two studios, 15 one-bedroom apartments and two two-bedroom apartments, taking the total apartment component to 107 residences before the 58 co-living rooms are included.

<img alt="Vnnies" data-entity-type="file" data-entity-uuid="7d568ca5-cb90-4e18-96c6-d9795dba0c56" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-26%20at%209.10.05%E2%80%AFAM.png?VersionId=GY2R5M9VtQh0EKy1vajaea19PSLOPuRD" />

Wardle's design for the Vinnies site has sought to negotiate that emerging high-rise context while retaining the lower-scale character of MacKenzie Street and the adjoining heritage conservation area.

The main building adopts a three-storey podium and tower arrangement, with the podium aligned to the ridgeline and front setback of St Francis Xavier Church.&nbsp;Wardle has designed the podium with colonnades, seating, recessed entries and active ground-floor frontages, with sandstone-toned precast concrete and face brick referencing the materiality of the existing church.

The tower then steps back eight metres to the south and six metres to the north before rising in a sculpted form comprising four interlocking quadrants. Wardle has also introduced rounded forms and chamfered corners to reduce the tower's perceived bulk and improve view sharing with neighbouring development sites.

Resident facilities and outdoor areas are planned at the separation between the podium and tower at Level 3, oriented toward Sydney Harbour and the CBD skyline.

The tower itself will feature a glass reinforced concrete facade, with recessed balconies and deep reveals used both to provide shading and privacy and frame views toward the harbour and city. The lower levels take a different architectural approach, using brick and sandstone-toned finishes intended to establish a stronger relationship with St Francis Xavier Church. The Church itself will be conserved and upgraded for its continued use, while the former school building will be adaptively reused as part of the co-living component.

<img alt="Lavendar Bay" data-entity-type="file" data-entity-uuid="2d4418ad-90aa-4d49-af93-c80b140aea80" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-26%20at%209.09.47%E2%80%AFAM.png?VersionId=Kv4gzbsACaGvZSRuaqcfGC54jEJRXIDJ" />

&nbsp;

The proposal adds to an increasingly concentrated pipeline of residential development around Blue Street, MacKenzie Street and Lavender Bay.

Just west of the site, Central Element lodged plans earlier this year for one of the most significant residential developments proposed in Lavender Bay in recent years.

Central Element's SJB-designed scheme at 64-66 Lavender Street and 3-7 Middlemiss Street would deliver 163 apartments across two towers rising 23 and 32 storeys, replacing five existing apartment buildings containing 32 homes. The project also forms part of the Housing Delivery Authority pathway.

<a href="https://www.apartments.com.au/news/nsw/first-look-central-element-reveals-lavender-bay-apartment-plans?utm_source=chatgpt.com" rel="noopener" target="_blank">First look: Central Element reveals Lavender Bay apartment plans</a>

Immediately around North Sy​dney Station, another two significant proposals have emerged at 5 and 15 Blue Street.

Zurich Australian Insurance Properties is seeking to adaptively reuse its longstanding commercial building at 5 Blue Street, directly above North Sydney Station, rather than demolishing the structure.

Its SSDA proposes converting the building into a 14-storey mixed-use development with 62 apartments and 86 co-living rooms, together with ground-floor retail and a major refurbishment of Blue Street Plaza. The application is currently at the Response to Submissions stage.

<a href="https://www.apartments.com.au/news/nsw/first-look-zurich-targets-north-sydney-office-conversion-with-148-unit-proposal-above-metro-station">First look: Zurich targets North Sydney office conversion with 148-unit proposal above Metro station</a>

&nbsp;

First look: Vinnies files for 20-storey Lavender Bay apartment tower as North Sydney housing pocket heats up

When the opportunity arose for South Australian developer Palumbo to return to Kent Town, where it had previously delivered East Park Apartments and the East 
Rundle Apartments, it wasn't one the longstanding developer-builder was going to pass up.

The decision was quickly vindicated, with more than 30 apartments sold within the first month of launching <a href="https://www.apartments.com.au/new-apartments/royal-apartments-kent-town-2-8-north-terrace-kent-town-sa-5067">Royal Apartments</a> to the market.

The 206-apartment development, which will bring significant new supply to Adelaide's tightly held eastern city fringe, also gives <a href="https://www.apartments.com.au/developers/palumbo">Palumbo</a> the opportunity to bring new life to one of Kent Town's most recognisable watering holes.

[smartcode_project:default project_id=6109 project_image_fid=376073]

Royal Apartments incorporates the historic Royal Hotel, a venue Palumbo Managing Director Daniel Palumbo said has a longstanding connection with the local community.

"Everyone in the area has history with the Royal Hotel," Palumbo told Apartments.com.au.

"It was quite an active pub and social gathering place for locals. We want to bring it back to its former glory."

[smartcode_project:default project_id=6109 project_image_fid=376072]

The wider development will comprise two residential towers alongside the restored hotel, sitting on North Terrace opposite the Adelaide Park Lands.

For Palumbo, the project also marks a return to familiar territory.

The developer completed East Park Apartments next door more than a decade ago and jumped at the opportunity to develop in Kent Town again when the Royal Hotel site became available.

"The opportunity emerged, and we moved to secure the site," Palumbo said.

"We were approached by the previous landowner, who said they had extensive commitments in Sydney and weren't in a position to deliver the project.

"We took over the site and within six months recut the design scheme to be more in keeping with the type of development we want to bring to Adelaide.

"Now we're on the market and those changes have really resonated with local buyers."

That has translated into a strong start to sales, with 33 apartments transacting in the project's first 35 days.

Palumbo said the early purchaser profile had been consistent with the group's traditional focus on owner-occupiers rather than investor-led apartment stock.

"Local owner-occupiers have always been our market," he said.

"There are always some investors, but we've never developed what would be called traditional development stock. Owner-occupiers are very much our market."

[smartcode_project:default project_id=6109 project_image_fid=376068]

The buyer mix has been diverse so far, with downsizers and younger professionals both accounting for a significant portion of early sales.

South Australia's current stamp duty settings, which allow&nbsp;eligible homeowners in South Australia aged 60 savings of up to $103,830 on stamp duty when they downsize to a new property valued at up to $2 million,&nbsp;have helped encourage downsizer activity, while younger buyers in their late 20s and early 30s have been attracted to the opportunity to live immediately outside the CBD while still being able to walk into the city.



Location has been a major part of the proposition for both buyer cohorts.

[smartcode_project:default project_id=6109 project_image_fid=376075]

Royal Apartments sits on North Terrace directly opposite the Adelaide Park Lands, with residents able to walk through the parklands toward the East End, Rundle Street and Rundle Mall.

Apartments have been positioned to capture views across the parklands, Adelaide skyline, Botanic Gardens and Adelaide Hills.

Palumbo believes the scarcity of developable land along this section of the Park Lands makes the site particularly difficult to replicate.

"There's very few allotments on that side that can be developed," he said.

"If this location was in New York and you were sitting on Central Park, you'd be talking about a $60 million apartments."

Royal Apartments will offer a broad mix of residences, ranging from one-bedroom apartments through to four-bedroom sub-penthouses and penthouses.

Current listings include one-bedroom apartments from $680,000, while larger three and four-bedroom residences are priced around $2.5 million.

Residents will have access to a swimming pool, gym, barbecue and recreation areas, residents' lounge and dining space, and a communal deck.

[smartcode_project:default project_id=6109 project_image_fid=376067]

The apartments will feature generous balconies, while secure parking, bicycle storage and storage cages will also be provided.

A porte-cochère-style arrival and drop-off area has also resonated with buyers, particularly those attracted to being able to walk into the CBD during the day while retaining secure vehicle access at home.

Palumbo is acting as developer, architect and builder on Royal Apartments, continuing the vertically integrated model it has used across its South Australian portfolio.

The group was also behind the $150 million Sofitel Adelaide, the 251-room five-star hotel and residential tower which opened in 2021.

Palumbo said Royal's launch had come at an interesting time for the broader Adelaide apartment market.

Buyer confidence had initially been impacted by uncertainty surrounding the Federal Budget and broader economic conditions, but Palumbo believes sentiment is beginning to improve against a backdrop of significant investment flowing into South Australia.

He pointed to increased activity across defence and resources, including Olympic Dam, as potential long-term drivers of the state's economy and housing market.

"Money is starting to flow into Adeliade, significant amounts as Adelaide bucks the trend of the rest of the country.," Palumbo said.

"There's a lot of activity in the economy over the next decade. I think more investment will come into this market."

Early works on Royal Apartments are expected to commence this year, with major construction activity and cranes anticipated on site from early next year.

[smartcode_project_cta:default project_id=6109]

Palumbo's return to Kent Town strikes early chord with buyers

Go-to builder-developer <a href="https://www.apartments.com.au/developers/graya">GRAYA</a> is continuing to bulk out its already impressive and diverse apartment portfolio across South East Queensland. Their latest milestone is securing development approval for Silk, its boutique riverfront apartment development in St Lucia.

The approval clears&nbsp;the way for the team to begin construction planning for the 22-residence project.

<a href="https://www.apartments.com.au/new-apartments/silk-st-lucia-16-18-sandford-street-st-lucia-qld-4067">Silk</a> will rise 15 levels from an 810 sqm site at 16-18 Sandford Street, occupying a prominent bend of the Brisbane River with a prized northern aspect across Orleigh Park toward the Brisbane CBD.

The approved scheme will comprise 16 split-floor and six full-floor residences, continuing GRAYA's move into larger-format apartment developments targeting Brisbane's prestige owner-occupier market.

The project has been designed around the site's broad river frontage and dual-direction views, with GRAYA prioritising larger residences, privacy and outlook over apartment yield.

<img alt="Silk St Lucia" data-entity-type="file" data-entity-uuid="aa5c2349-f96c-4914-a812-1f2cd6827af8" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-26%20at%208.25.44%E2%80%AFAM.png?VersionId=WY0vEU_7vYjeRJKQHiCwFdMxu8PvFh52" />

GRAYA Co-founder and Chief Executive Officer Rob Gray said the project had been shaped around local homeowners wanting to remain in St Lucia without maintaining a traditional family home.

"St Lucia is one of those suburbs people do not want to leave," Gray said.

"They know the river, the trees, UQ, the golf course, Toowong and Indooroopilly, and that familiarity is hard to replace.

"True riverfront opportunities here are exceptionally scarce. What we have designed at Silk is a way to stay in the suburb people love, with the scale and privacy of a private home and far less to maintain.

"This is not typical apartment product. It is a proper home on the river, and that is exactly what this market has been missing."

The approval comes as new apartment development continues to increase across the St Lucia and neighbouring Toowong corridor, although direct riverfront sites remain considerably more tightly held.

GRAYA Co-founder and Managing Director Andrew Gray said securing the approval had removed a significant element of development risk from Silk.

"Genuine riverfront sites of this quality in St Lucia are not something that comes up regularly," Gray said.

"The approval removes a substantial layer of execution risk, and the location underwrites demand in a way very few inner-city sites can.

"The fundamentals here are as strong as anything we have assessed in Brisbane."

<img alt="Silk St Lucia" data-entity-type="file" data-entity-uuid="d0f3d734-65e1-48e8-8ed3-2e0715ffcdd9" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-26%20at%208.25.56%E2%80%AFAM.png?VersionId=sOLSs_jdHkXLWbBKzRyayf5BfTb2vPsD" />

Silk will see GRAYA return to a stretch of the Brisbane River where it already has recent construction experience. The vertically integrated group recently completed ARC in neighbouring Toowong as builder for developer Spyre, delivering the riverfront project on a constrained site.

GRAYA will take a different role at Silk, controlling the project from design and development through construction and aftercare under its vertically integrated model.

The development will include a gym and resident leisure areas at ground level, integrated with the river's edge.

Silk joins a growing pipeline for GRAYA across Brisbane and the Gold Coast, which includes Enclave, The Gallery, Coral and Ripple.

The developer-builder has also recently lodged plans for its largest project to date, <a href="https://www.apartments.com.au/new-apartments/the-silo-19-chester-street-newstead-qld-4006">The Silo</a>, a proposed <a href="https://www.apartments.com.au/news/qld/graya-buys-frasers-newstead-site-plans-the-silo-between-james-street-and-gasworks-precincts">$700 million mixed-use development</a> in Brisbane's James Street precinct.

Silk is expected to predominantly target local owner-occupiers and prestige buyers seeking a permanent riverfront home in Brisbane's inner west.

Registrations of interest are now open, with further details on the project and construction program to be released as it progresses.

<hr />
<h2>SILK PROJECT FACTS</h2>

Developer-builder: GRAYA

Project: Silk

Location: 16-18 Sandford Street, St Lucia

Apartments: 22

Built form: 15 levels

Site: 810 sqm riverfront holding

Mix: 16 split-floor and six full-floor residences

Status: Development approved

Next step: Construction planning underway

[smartcode_project_cta:default project_id=152168]

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