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<p>Australia’s main CBD markets have recorded a decline in office vacancy rates throughout the first half of 2018, with Sydney and Melbourne CBDs continuing to exhibit their strength as vacancy rates in both markets fell to their lowest levels in more than 10 years.</p>
<p>The findings come in the Property Council of Australia’s (PCA) release of its mid-2018 Office Market Report. </p>
<p>Here's Savills Australia's analysis starting with the national outlook, then state by state:</p>
<p><strong>National overview</strong></p>
<p>Savills Australia’s Associate Director for <a href="http://www.savills.com.au/research/australian-research.aspx" target="_blank" title="Savills Research">Capital Strategy and Research</a>, Shrabastee Mallik, said there had been a clear difference in performance between the Sydney and Melbourne CBDs and the other main CBD markets, with the resource-reliant Perth and Brisbane office markets feeling the effects of the mining downturn until about six months ago.</p>
<p>“A renewal in economic growth globally in 2017 saw a renewal in demand for Australian resources and subsequent rises in commodity prices, leading to significant growth in corporate profits, particularly in the mining sector,” Ms Mallik said.</p>
<p>“We are now seeing this having a positive effect on the previously struggling Perth and Brisbane office markets, with subsequent falls in vacancy rates in these markets.”</p>
<p>Ms Mallik went on to say that a turnaround in these markets was already evident, with further improvements in 2018 likely when activity on the ground and various forward-looking economic indicators were considered.</p>
<p>“Low rents and high incentives in Perth and Brisbane are providing the impetus for businesses to acquire space in the CBDs, with recentralisation likely to be a key theme in the short to medium term,” she said.</p>
<p>“While there is concern that the Sydney and Melbourne CBD office markets appear to have peaked in terms of performance, when we consider forward-looking economic indicators, such as economic growth forecasts – particularly in the services and education sectors, which are key market-drivers for these markets – these fears would appear to be largely unfounded."</p>
<p><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/2018/8/3/office%20vacancy%202.jpg" alt=""></p>
<p>Source: Savills</p>
<p><strong>New South Wales</strong></p>
<p>In the first half of 2018, the Sydney CBD office vacancy rate fell to its lowest level since the Global Financial Crisis in 2008, after a steady decline for the past eight quarters.</p>
<p>The strength of the market has been further highlighted by face rents rising to record high levels across all grades.</p>
<p>“We have seen a large number of tech and IT firms centralising and organically growing in the CBD after decentralisations due to cost pressures during the 2008 to 2010 period,” Savills NSW State Director for <span><a href="http://www.savills.com.au/services-and-sectors/leasing/office-leasing.aspx" target="_blank" title="Office Leasing">Office Leasing</a></span> in Sydney, Rob Dickins, said.</p>
<p>“These firms are now profitable and chasing and trying to retain talent in a very competitive industry sector."</p>
<p>“We have obviously also seen the emergence of co-working groups such as WeWork, Regus and Spaces, among others, which are now significant occupiers of space in the CBD.”</p>
<p>Mr Dickins said demand from smaller occupiers was still evident, with a spike in leasing activity in the sub-1,000sq m category, driven largely by the opportunity and capital cost savings in speculatively fitted tenancies.</p>
<p>“While net absorption has been low, this is largely as a result of reduced available space in this category, due to the absorption associated with government projects, and the redevelopment and change-of-use projects currently underway,” he said.</p>
<p><strong>Victoria</strong></p>
<p>The Melbourne CBD experienced a reduction in vacancy rate as a result of tenant migration to higher-quality office space, predominantly A Grade space, as well as some tenants taking on expansion space. </p>
<p>Savills Australia’s State Director for <span><a href="http://www.savills.com.au/services-and-sectors/leasing/office-leasing.aspx" target="_blank" title="Savills Office Leasing">Office Leasing</a></span> in Melbourne, Mark Rasmussen, said that the Melbourne CBD office market continued to maintain strong growth across all office building grades and all sectors.</p>
<p>“Continuing falling vacancy due to lack of supply and steady demand has resulted in maintaining the trend of increasing rentals and lower lease incentives,” he said.</p>
<p>“The strong economy, positive market sentiment and continued migration – of tenants to the CBD and the increasing population – is underpinning demand."</p>
<p>“The co-working sector, education market and growth across Melbourne’s increasingly diversified market is adding further upward pressure to rents.”</p>
<p>Mr Rasmussen said the fourth quarter of 2019 would see the market peak, with record low vacancy rates and rental rates continuing to climb after decades of remaining “stubbornly low”, when compared to most other Australian marketplaces.</p>
<p>“While the 2020 and 2021 new supply numbers are locked in and significant, the pent-up demand will see the new higher rent levels being maintained, with increases in incentives back to 2016 and 2017 levels likely,” he said. <span> <br></span></p>
<p><strong>Queensland</strong></p>
<p>Following a slight spike in the total office vacancy rate in Brisbane’s CBD in December 2017, vacancy rates dropped after strong leasing activity in the first six months of 2018. </p>
<p>“With rents and incentives in the Brisbane CBD now very similar to the surrounding fringe office market, we have seen a number of recentralisations from large firms in the finance and insurance sectors consolidating space in the CBD, as they take advantage of large floor plates in refurbished prime grade buildings,” Savills Australia’s State Director for <span><a href="http://www.savills.com.au/services-and-sectors/leasing/office-leasing.aspx" target="_blank" title="Savills Office Leasing">Office Leasing</a></span> in Brisbane, John McDonald said.</p>
<p><strong>South Australia</strong></p>
<p>Adelaide’s CBD office vacancy rate appears to be in a holding pattern, as the “flight to quality” trend continues to partially offset the migration from potentially non-competitive space, to prime-grade space concentrated within specific buildings.</p>
<p>Increasing competition on the supply side for prime-grade stock had previously led to a rise in backfill vacancy within secondary space as these tenants relocated but this trend seems to be subsiding, as the gap between prime and secondary vacancy rates begins to shrink. </p>
<p>This observation comes on the back of owners looking to reposition buildings on a floor-by-floor basis to retain existing tenants.</p>
<p>Savills Australia’s Director for <span><a href="http://www.savills.com.au/services-and-sectors/leasing/office-leasing.aspx" target="_blank" title="Savills Office Leasing">Office Leasing</a></span> in Adelaide, Adam Hartley, said the majority of demand for office space in Adelaide was for prime-grade space, although the market was seeing lower levels of take-up.</p>
<p>“We are starting to see signs that incentives are tapering off, particularly for prime or refurbished space,” he said.</p>
<p>“We have seen examples of tenants securing a net incentive of around 35 percent – this time last year, that figure would have been around 40 percent.”</p>
<p>Mr Hartley said he was expecting to start seeing a shift in the technical vacancy rate in the second half of the year.</p>
<p>“There have been a number of economic metrics that have constrained tenant decision-making throughout the past nine months, including the state election and the last stage of abolishing stamp duty cuts for non-residential property transfers being finalised,” he said.</p>
<p>“On that note, there are several green shoots emerging, which will begin to benefit office take-up in the CBD – defense announcements being key, as well as general public infrastructure investment that is underway."</p>
<p>“These industries bode well for take-up of engineering or project space in the short-term,” he concluded </p>
<p><strong>Western Australia</strong></p>
<p>Perth’s office leasing market is unlikely to see any further increases in the technical vacancy rate in the medium term, as the market is no longer facing the high volume of incoming new supply that it was through 2015 and 2016.</p>
<p>While the period of tenants rationalising space is over, the “flight to quality” trend remains a key driver in the market, as does recentralisation back to the CBD.</p>
<p>Savills Australia’s Director for <span><a href="http://www.savills.com.au/services-and-sectors/leasing/office-leasing.aspx" target="_blank" title="Savills Office Leasing">Office Leasing</a></span> in Perth, Shelley Ritter, said demand for prime-grade space was continuing to drive a reduction in the overall vacancy rate, and it was becoming “increasingly challenging for larger tenants to secure contiguous floor options, especially in premium-grade space”. </p>
<p>“The differential between prime and secondary space that began to emerge mid-2015 has never been this wide, a trend which is beginning to drive down incentives, particularly in premium and A Grade space,” she said.</p>
<p>Ms Ritter said there had been some “marked improvements” in the state’s economy, with long-term outlooks suggesting a return to a more sustainable investment level in regards to the mining and resource sector. </p>
<p>“Some of the state’s biggest and best-known mining producers have announced commitments to new projects, and investment in emerging sectors such as lithium is rising,” she said.</p>
<p>“We know that there is circa 70,000sq m in active leasing requirements currently in the market for new or expansion space from some of these large occupiers.</p>
<p>“These companies will play a significant role in office take-up for the next three to five years, with indirect organic demand expected to be created on the back of this from other industries, such as finance, legal, property and business services.”</p>
<p>Ms Ritter said a conservative outlook would suggest that the weight of this demand, together with a “somewhat cautious” development pipeline, will contribute to a decline in vacancy rate.</p>
<p>“Our view, however, is that this will potentially occur much faster than the market anticipates,” she said.</p>
<p><strong>Australian Capital Territory</strong></p>
<p>Canberra’s office market offers stable rental growth unlike any other office market in Australia, due to the strong government sector presence, according to Pip Doogan, Savills Australia’s Director of <a href="http://www.savills.com.au/services-and-sectors/leasing/office-leasing.aspx" target="_blank" title="Savills Office Leasing">Office Leasing</a> in Canberra.</p>
<p>“While other markets are often subject to economic cycles, the nature of the government tenants in Canberra means that lessors are protected against significant rises and falls in rents,” she said.</p>
<p>Savills Australia data shows that on average, net face rents for Canberra’s A Ggrade assets grew 2.8 percent throughout the 12 months to June 2018, largely in line with the 10-year Compound Annual Growth Rate (CAGR) of 1.95 percent per annum. </p>
<p>“Interestingly, rental growth across B Grade assets was more pronounced, with net face rents growing 8.5 percent throughout the past financial year, far exceeding the 10-year CAGR of 0.7 percent per annum,” Ms Doogan said.</p>
<p>Ms Doogan noted that a slight increase in incentives across secondary-grade assets has meant that growth on an effective basis has been flat. </p>
<p>“Based on leasing deals we are currently looking at and witnessing, there appears to be a divergence in rental growth in prime and secondary grade buildings,” she said.</p>
<p>“Given the wide range of buildings available in Canberra (based on quality), lessees are able to negotiate more favorable terms on secondary-grade space, while the pendulum remains firmly in the landlord’s favour, particularly in those sub-precincts with record low vacancy rates.”</p>
<p><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/2018/8/3/office%20vacancy%203.jpg" alt=""></p>
<p>Source: Savills</p>
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Savills on what the future holds for Australia's office market

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<div>A subsidiary of co-working giant, WeWork, has pre-committed to a 10 year lease of the heritage-listed, 66 King St building</div>
<div> </div>
<div>They have pre-committed to leasing the entire building (pictured above), which is owned by Sydney-based developer Mr Phillip George.</div>
<div> </div>
<div>Mr George is undertaking a $50 million upgrade to the more than 70 year old building, through Taylor Constructions, and will be tenanted by the WeWork owned Gravity co-working brand following completion of the renovation in late 2019.</div>
<div> </div>
<div>Owned since 2007 by Mr George, the 14 level building, located between on the corner of King and York Streets, will cover 7,300 square metres of A Grade commercial and retail space and works have now commenced.</div>
<div> </div>
<div>The art-deco building is heritage listed and described as "an example of art deco-modern American commercial gothic architecture, with two major light wells and a rooftop terrace, to be converted to a bar and restaurant."</div>
<div> </div>
<div>Mr George said “The building is perfect as a co-working environment as it is well located in the middle of the city, close to major transport links and featuring versatile, dynamic spaces well suited to the Gravity brand."</div>
<div> </div>
<div>“The building’s many heritage features, including a marble entrance, stairway and light wells, will be refurbished to create a truly A Grade boutique building in the heart of Sydney’s CBD”, he concluded.</div>
<div> </div>
<div><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/2018/8/8/66%20King%20Street.jpg" alt=""></div>
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<div>CBRE’s Stuart McSorley and Nick Read who negotiated the lease said they believe the refurbishment of the building was pivotal to securing the lease.</div>
<div> </div>
<div>“Upon completion, the building will include new end of trip facilities, rooftop terrace and refurbishment and restoration of the existing heritage features,” Mr McSorley said.</div>
<div> </div>
<div>The site will also feature three retail shops and an underground basement space suited for a bar or other venue for the many office workers now congregating in the centre of the city where there are improved transport links and retail outlets.</div>
<div> </div>
<div>Having sold Mrs Crocket’s Food Group in 2004, Mr George transitioned and is now a property owner and developer with a wide range of residential, industrial and commercial projects worth more than $750 million across Australia.</div>
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WeWork to take up a 10 year lease at refurbished King St building

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<p>Miron Solomons, Matt Pontey and Nick Lumley are selling 10 Oxford Street, Woollahra, home to St Claude's restaurant, via a public auction on August 30 2018.</p>
<p>St Claude's is a contemporary French bistro in the heart of Woollahra which was originally opened as Claudes restaurant in 1976, forming part of Sydney's 'golden restaurant age'. It reopened as St Claude's in 2015.</p>
<p>"This area has transformed from one of Sydney's prime shopping strips into a suburb awash with top restaurants, wine bars and cafes," said Miron Solomons, National Director, Investment Services at Colliers International.</p>
<p>"This is an opportunity to purchase a quality freehold asset with a strong 5x5 lease and iconic tenant in one of Sydney's most affluent areas."</p>
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Woollahra institution is on the market

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<p>Jennifer Cunich has departed the role of CEO of the Australian Institute of Architects.</p>
<p>The institute's board terminated Ms Cunich's appointment last Friday, The Australian Financial Review reported.</p>
<p>Neither side commented publicly on the reason for the departure.</p>
<p>Cunich took up the role two years ago.</p>
<p>"Change is a very difficult thing to embrace for organisations," Ms Cunich (pictured below) told the paper.</p>
<p data-gtm-vis-first-on-screen-7770372_137="3136" data-gtm-vis-total-visible-time-7770372_137="4000" data-gtm-vis-has-fired-7770372_137="1"><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/2018/8/8/jennifer%20cunich.jpg" alt=""></p>
<p data-gtm-vis-first-on-screen-7770372_137="3136" data-gtm-vis-total-visible-time-7770372_137="4000" data-gtm-vis-has-fired-7770372_137="1">"I am very proud of what I did. I've secured the finances.</p>
<p>"We have surpluses, I have implemented a massive digital transformation program worth about $1.4 million."</p>
<p>The institute confirmed her departure in a statement.</p>
<p>"The Institute thanks Jennifer for her contribution during her two years of service and wishes her well for the future," it said.</p>
<p>Ms Cunich took up the role when the 150-year-old institute was suffering financial problems, in part related to the development of its own Melbourne CBD building.</p>
<p>At the time of her appointment, Ms Cunich said one of her first tasks at the peak body for architects was to restore its relevance in the eyes of the whole profession including the needs of firms at the bigger end of the design and construction industries.</p>
<p>The institute has total membership across all categories at more than 11,000 members.</p>
<p>Cunich was a former Victorian executive director at the Property Council of Australia where she held the position for nine years having been previously been the executive director for the Property Council in the Australian Capital Territory for six years.</p>
<p>Clare Cousins, who established her Melbourne practice, Clare Cousins Architects, in 2005, has been appointed acting CEO.</p>
<p> </p>
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Jennifer Cunich departs The Australian Institute of Architects

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<p>Franz<span>é</span> Developments has proposed plans for the biggest new hotel project in the Geelong region for two decades.</p>
<p>The burgeoning expansion of one of Australia's fastest growing regional cities has been bolstered with Franzé Developments securing planning approval from the Department of Environment, Land, Water and Planning for its $150 million Geelong development – the largest mixed-use project in the region.</p>
<p>Located at 44 Ryrie Street within the Geelong Activity Centre Zone, the 2,700 square metre gateway site will comprise 1,000 square metres ground floor retail, 7,400 square metres office space, 24 residential apartments and a 180 bed hotel, all connected by a highly activated street level plane with public access.</p>
<p>In a coup for Geelong's hotel and tourism sector, global hotel operator The InterContinental Group signed a 20-year management agreement to operate the 180 bed hotel in late 2017. The $75 million Holiday Inn Hotel &amp; Suites in Australia and the largest new hotel project in the region in almost 20 years.</p>
<p>Paul Franzé, Founder and Managing Director of Franzé Developments says he is thrilled to receive approval for the gateway site as Geelong develops into the region's epicenter for retail, tourism and employment due to its strong population and economic growth.</p>
<p>"Our vision for the Ryrie Street site is to deliver a truly mixed-use project that responds to the Central Geelong Action Plan which will see Geelong evolve from its manufacturing roots to a city of culture and innovation.</p>
<p>Geelong is now one of Australia's fastest growing regional cities, with population expected to grow by more than 150,000 people in the next 20 years, and the urban environment and amenity needs to respond accordingly.</p>
<p>"Geelong has a diverse and strong economy with over 17,000 businesses and a highly skilled labour force. It continues to attract new residents and investment due to its livability and proximity to Melbourne, combined with increasing employment opportunities and affordability."</p>
<p>Architectus, the design studio behind 1 Bligh Street, Sydney and 383 La Trobe Street, Melbourne (in collaboration with architect Ateliers Jean Nouvel), has been appointed as the project design team, with Hansen Partnership managing the project's urban planning.</p>
<p>It is located on a prominent corner at the intersection of Ryrie and Fenwick Streets.</p>
<p>"The design of 44 Ryrie Street draws upon the history of both the city and the site. The materiality, rhythm and scaling of the buildings reference the iconic wool stores of Geelong, and the grain of the city's rich heritage fabric. Creating an active mixed use development that incorporates hotel, residences, office and a vibrant retail ground plane, the project stiches seamlessly into the adjacent cultural precinct and builds on the investment in the area to become a gateway to Geelong's city centre," says Matthew Smith, Managing Principal at Architectus.</p>
<p>The orientation of the site forms a 90 metre northern frontage to Ryrie Street with a physical split, creating a public thoroughfare linking Ryrie Street to Cuzens Place. </p>
<p>Colliers International, in conjunction with MP Burke Commercial, is managing the leasing campaign for the 7,400 square metre office space across ten levels with a generous double-height lobby. The apartments are expected to start selling in October 2018.</p>
<p>The site, which was home to John Orchard Furniture and was previously an intercity bus depot, was purchased from John Orchard for $7 million in 2017.</p>
<p>Demolition is underway and construction is scheduled to commence in late 2018, with completion expected in mid 2020.</p>
<p>The Holiday Inn Hotel is scheduled to open in 2020 and will target the longer stay segment of the tourism market. The property will include an all-day dining restaurant and bar, swimming pool, gym, parking and 300 square metres of meeting facilities, including a function room for 250 people.</p>
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$150 million Geelong gateway development gets the green light

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<p>Adelaide, the capital city of SA, has begun it's recovery on the HTW commercial office property clock for August, according to valuation firm Herron Todd White latest report.</p>
<p>Meanwhile, Echuca has dropped a notch to a declining market position from the previous peak of market point in HTW’s Office property clock in June. Canberra however has transitioned to a starting to a starting recovery position from its bottom of the market position in June.</p>
<p>At the bottom of the property cycle, Cairns joins Townsville and Launceston. Others in the same position are Darwin, Perth, Brisbane and Hobart.</p>
<p><a href="https://www.propertyobserver.com.au/images/2018/8/6/August%20Office%20Property%20Clock%20HTW.JPG" target="_blank">Click to enlarge</a></p>
<p><img src="https://www.urban.com.au/images/2018/8/6/August%20Office%20Property%20Clock%20HTW.JPG" alt=""></p>
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<p>"There has been a revolution in office real estate and the way it’s adapting to the demands of the modern workspace have a direct impact on owners, tenants and their workforce," the report stated.</p>
<p>"Some markets have thrived as a result, while others have failed to keep up," they concluded</p>
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Adelaide's office market has begun its recovery: HTW property clock

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<p>Jewish Care Victoria has listed the former Mark &amp; Dina Munzer Community Residential Aged Care facility in Melbourne’s Caulfield North. </p>
<p>Gary Peer &amp; Associate, inconjunction with CBRE, are handling the sale of the 52-58 Northcote Avenue property. </p>
<p>The 3,683 sqm site has remained vacant since the aged care facility’s closure in March 2017.</p>
<p>The property is expected to attract the attention of local and overseas developers, aged care operators and not-for-profit and charitable organisations looking to establish new headquarters.</p>
<p>Jewish Care Victoria CEO Bill Appleby said the property did not align with the organisation’s recently released Strategic Plan, which would determine its key strategic priorities for 2018-2020.</p>
<p>Gary Peer &amp; Associates’ Philip Kingston said the former aged care facility was the most significant allotment the firm has handled for public sale. </p>
<p>“The property is more than double the size of any landholding in the notoriously quiet street, and more than 1,000sqm bigger than anything we have handled in the Caulfield precinct over the last five years,” Mr Kingston said.</p>
<p>The property features all the amenities required of an aged care facility, including 45 beds, full line commercial kitchens and formal living and dining areas. </p>
<p>Offers close September 6.</p>
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Jewish Care Victoria lists Caulfield North parcel for sale

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<p>A Bayswater retail property could revisit its banking roots, after being sold under the hammer to a local community bank franchise. </p>
<p>Originally constructed as a banking chamber in 1975, the 83 Whatley Crescent property was purchased by Bayswater Community Financial Services Limited.</p>
<p>It was bought at auction for $1.06 million. </p>
<p>Located directly opposite Bayswater Train Station, the property comprises a 335sqm building most recently occupied by an Elders Real Estate office.  </p>
<p>CBRE’s Michael Milne and Ben Younger managed the sale. </p>
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Banking on Bayswater with $1.06 million WA auction aquisition

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<p>Colliers International are selling a Bondi trophy asset, located in the suburbs strongest retail position.</p>
<p>It comes with price expectations of more than $10 million.</p>
<p>The mixed use holding, 62 Hall Street (pictured above), contains a ground floor pharmacy and six apartments to be sold at auction on August 30th.</p>
<p>“Hall Street is now considered the heart of Bondi as it is not as volatile to the seasons as Campbell Parade, so it doesn’t fall victim to the fluctuations of trade as experienced by the beachfront retailers,” stated Miron Solomons from Colliers International.</p>
<p>The property is located opposite Toga’s Boheme development, and adjacent to popular Hall Street retailers including Da Orazio Pizza and Porchetta, Gelato Messina plus the Adina Hotel and Harris Farm.</p>
<p>“The building is near new, with multiple defensive income streams from both retail and residential tenancies.</p>
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Mixed-use Hall Street, Bondi asset on the market

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<div>Moody's Investors Service says that mortgage delinquencies will increase over the next two years.</div>
<div> </div>
<div>The forecasts suggests a record number of interest-only (IO) mortgages converting to principal and interest (P&amp;I) loans, will continue to the rise.</div>
<div>  </div>
<div>When IO loans convert to P&amp;I, borrowers have to make higher monthly repayments, and this 'payment shock' can lead to mortgage delinquencies and makes IO loans riskier than P&amp;I loans. </div>
<div>  </div>
<div>Moody's data shows that the 90 days past due delinquency rate for mortgages that have converted to P&amp;I from IO is 0.94%, double that of IO loans that have not yet converted and 0.24 percentage points higher than all securitised mortgages. </div>
<div> </div>
<div>
<a href="https://www.propertyobserver.com.au/images/2018/8/3/MOODY%201.jpg" target="_blank">Click here </a>to enlarge:</div>
<div><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/2018/8/3/MOODY%201.jpg" alt=""></div>
<div>  </div>
<div>Refinancing interest-only mortgages is also becoming more difficult, which will in itself contribute to an increase in mortgage delinquencies. </div>
<div>  </div>
<div>Moody's conclusions are contained in its just-released report, "RMBS - Australia Mortgage delinquencies to increase as record number of IO loans to convert to P&amp;I". </div>
<div>  </div>
<div>Banks in Australia originated a significant volume of IO loans in 2014 and 2015, which means a record number of these loans are scheduled to convert to P&amp;I over 2019 and 2020, when their five-year IO period ends. </div>
<div> </div>
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<a href="https://www.propertyobserver.com.au/images/2018/8/3/MOODY%202.jpg" target="_blank">Click here </a>to enlarge: </div>
<div><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/2018/8/3/MOODY%202.jpg" alt=""></div>
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<div>IO loans accounted for more than 40% of all mortgages originated by banks for much of 2014 and 2015, with this figure peaking at 46% in June 2015. </div>
<div>  </div>
<div>At current mortgage interest rates, monthly repayments on loans that convert to P&amp;I from IO will increase by around 30%, which can lead to delinquencies. </div>
<div>  </div>
<div>With RMBS, IO loans accounted for around 32% of all loans in such deals on average as of November 2017. However, on an individual deal basis, the share of IO loans ranges from 0% to 50%. </div>
<div> </div>
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<a href="https://www.propertyobserver.com.au/images/2018/8/3/MOODY%203.jpg" target="_blank">Click here</a> to enlarge:</div>
<div><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/2018/8/3/MOODY%203.jpg" alt=""></div>
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<div>"Therefore, the degree to which individual deals will be exposed to potential delinquencies as loans convert to P&amp;I from IO will depend on each deals' exposure to IO loans and their IO period maturity profile," the report noted.</div>
<div> </div>
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Moody's forecasts payment shock for Australian IO mortgage holders

<p>Buyers considering a residence at boutique Gordon townhouse development <a href="https://www.apartments.com.au/new-townhouses/lume-gordon-43-47-dumaresq-street-gordon-nsw-2072">Lume</a>&nbsp;now have another reason to bring forward their decision.</p>

<p>For a limited time, purchasers of a residence at Lume will receive a BMW iX3 50 electric SUV, valued at more than $120,000, as part of their purchase. The offer is designed to add value for buyers while complementing the lifestyle envisioned for the architecturally designed Upper North Shore development.</p>

<p>Scott Timmins, Development Manager at <a href="https://www.apartments.com.au/developers/winim">WINIM</a>, said the partnership was created to provide buyers with a compelling reason to act.</p>

<p>"In today's market, buyers need a compelling reason to act now, and the BMW partnership was designed to create that catalyst. We wanted to add genuine value for our future purchasers. Choosing the all-electric BMW iX3 50 also reflects the values behind LUME, forward-thinking design, innovation and a more sustainable way of living. It's a premium incentive that complements the lifestyle our buyers aspire to and rewards those who commit early."</p>

<p>[smartcode_project:default project_id=7354 project_image_fid=374893]</p>

<p>Delivered by WINIM in partnership with Burtonwood Investment Partners, Lume comprises 14 architecturally designed two, three and four-bedroom townhomes created for families seeking the space of a freestanding house with the ease of modern, low-maintenance living.</p>

<p>The three-storey residences, designed by award-winning architecture practice <a href="https://www.apartments.com.au/architects/rothelowman">Rothelowman</a>, have been tailored for families and multi-generational living, featuring private internal lifts, flexible lower-level spaces, generous open-plan living and entertaining areas, media rooms, and landscaped outdoor spaces with custom outdoor kitchens.&nbsp;</p>

<p>Inside, engineered oak flooring, bespoke dining joinery with integrated wine fridges and backlit bars, sculptural porcelain bathrooms, Parisi freestanding baths and Astra Walker tapware create interiors that balance functionality with refined finishes.</p>

<p>Each townhome has been designed to combine generous internal spaces with sustainability initiatives such as EV charging infrastructure, while <a href="https://www.apartments.com.au/landscape-architect/arcadia-landscape-architecture">Arcadia</a>'s landscaped communal areas, centred around a restored creek line and native planting, encourage residents to connect with nature and spend more time outdoors.</p>

<p>[smartcode_project:default project_id=7354 project_image_fid=269527]</p>

<p>Rothelowman's Gary Tsui said the architecture was conceived to respond carefully to its Upper North Shore setting.</p>

<p>"Our vision was to create elegant, uplifting homes that draw on and positively contribute to the local character through meticulously considered design and an interaction with the surroundings."</p>

<p>The communal landscape has been designed as more than an open space between homes. Arcadia's Ben Newell and Kate Phillips said the adjoining reserve provided an opportunity to create a distinctive natural retreat for residents.</p>

<p>"Just as waterways carve their way through Ku-ring-gai's landscape, a raised boardwalk weaves through the reserve, connecting the homes to this tranquil oasis."</p>

<p>[smartcode_project:default project_id=7354 project_image_fid=374892]</p>

<p>Located just 300 metres from <a href="https://www.apartments.com.au/developments/gordon-nsw-2072">Gordon</a> Village and Gordon railway station, Lume offers convenient access to Sydney's CBD while placing residents close to some of the North Shore's leading schools, including Ravenswood, Pymble Ladies' College and Knox Grammar. Lane Cove National Park, Gordon Golf Club and a range of cafés and restaurants further reinforce the family-focused lifestyle on offer, with the BMW iX3 50 complementing everything from local trips around Gordon to weekend drives and city commutes.</p>

<p>Construction is underway with completion expected in mid-2027.</p>

<p>[smartcode_project_cta:default project_id=7354]</p>


Joel Robinson

Boutique Gordon townhomes now come with a BMW iX3 50

<p>Two apartments have sold for more than $10 million at EADE Byron Bay, setting some of the highest apartment prices ever achieved in the coastal town and underlining the growing appetite for luxury beachfront apartments in Australia's most popular coastal locations.</p>

<p>The $210 million project by Vitale Property Group has now secured more than $70 million in sales, led by residences that changed hands for $12.75 million and $11.75 million.</p>

<p>The record-breaking transactions reinforce the shift occurring in Byron Bay's premium property market, where affluent downsizers and lifestyle buyers are increasingly opting for high-end apartments over large beachfront homes.</p>

<p><a href="https://www.apartments.com.au/new-apartments/eade-byron-bay-29-shirley-street-byron-bay-nsw-2481">EADE Byron Bay</a> occupies a rare 6,000 sqm absolute beachfront site on the corner of Shirley and Milton Streets overlooking Main Beach and The Wreck surf break, just 350 metres from Byron Bay's town centre.</p>

<p>The 25-residence development is the first beachfront apartment project approved in Byron Bay in more than a decade and is currently under construction, with completion expected in May 2027.</p>

<p>[smartcode_project:default project_id=145590 project_image_fid=359521]</p>

<p>The project has attracted a mix of local Byron Shire residents downsizing from larger homes, alongside interstate buyers from Sydney, Melbourne and Brisbane seeking a permanent coastal lifestyle without compromising on space.</p>

<p>Designed by <a href="https://www.apartments.com.au/architects/hayball">Hayball</a> and with interiors by <a href="https://www.apartments.com.au/interior-designers/alexander-co">Alexander &amp; Co</a>, EADE comprises&nbsp;10 garden apartments ranging from 284 sqm to 622 sqm, nine with private pools, five full-floor apartments and 10 rooftop residences with private plunge pools, expansive outdoor entertaining areas and uninterrupted ocean views.</p>

<p>[smartcode_project:default project_id=145590 project_image_fid=359527]</p>

<p><a href="https://www.apartments.com.au/developers/vitale-property-group">Vitale Property Group</a> Managing Partner Chris Vitale said the project's combination of scale, location and limited future supply was driving buyer demand.</p>

<p>"There isn't another beachfront holding in Byron Bay of this size and position that could be developed again," Vitale said.</p>

<p>"Buyers are responding to the scarcity and the irreplaceability of a site of this calibre and to floorplans they can't find elsewhere in the market.</p>

<p>"We are seeing buyers place significant value on quality, space, design, resort-style amenities and the rarity of the location. The sales achieved to date demonstrate that discerning purchasers recognise the long-term significance of what is being created at EADE Byron Bay.</p>

<p>"Many are coming from larger homes in the Byron region, or from Sydney, Melbourne and Brisbane, and are after the space, security and convenience, without the upkeep of a house."</p>

<p>&nbsp;</p>

<p>[smartcode_project:default project_id=145590 project_image_fid=359523]</p>

<p>The Byron Bay project follows Vitale Property Group's delivery of the Mondrian Hotel and Private Residences at Burleigh Heads, with EADE continuing the developer's focus on luxury coastal developments.</p>

<p>Residents will have access to a resort-style swimming pool, gymnasium, sauna, cold plunge pool, concierge services and dedicated workspaces, while the project is targeting an 8-Star Green Star rating.</p>

<p>EADE Byron Bay is being exclusively marketed by Projx Australia in conjunction with WHITEFOX Projects.</p>

<p>WHITEFOX National Projects Director Phillip Rand said demand had been driven predominantly by owner-occupiers.</p>

<p>"We are seeing buyers at EADE place significant value on quality, space, design, resort-style amenities and the rarity of this location," Rand says.</p>

<p>"The sales achieved to date demonstrate that purchasers at this level recognise the long-term significance of what is being created at EADE Byron Bay."</p>

<p>Residences at EADE Byron Bay are currently priced between $4.75 million and $15.95 million.</p>

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<p>[smartcode_project_cta:default project_id=145590]</p>


Vitale breaks Byron Bay records with EADE sales flurry 

<p>When buying an apartment, most people compare the big-ticket items first. Floorplans. Kitchens. Balcony size. Natural light. The view.</p>

<p>But there's one everyday consideration that often doesn't come up until after moving in: how parcels are delivered.</p>

<p>As online shopping has become part of everyday life, parcel deliveries have shifted from an occasional event to a regular occurrence. Australians spent a record $82.6 billion shopping online in 2025, with almost one in every four retail dollars now spent digitally.</p>

<p>For apartment residents, that can present a challenge.</p>

<p>If nobody is home to accept a delivery, parcels may be redirected to a nearby Post Office, left in a building lobby or common area, or require building management to step in. In higher-density buildings, where dozens or even hundreds of residents may receive deliveries each day, parcel management has become an increasingly important part of everyday living.</p>

<p>That can create a range of frustrations. A missed delivery often means making time to collect a parcel elsewhere, while packages left unattended in foyers or mail areas can create clutter and increase the risk of theft. What seems like a minor inconvenience can quickly become a recurring issue for residents who shop online regularly.</p>

<p>It's one of those details that rarely features in a display suite but can have a noticeable impact once residents move in.</p>

<p>As a result, buyers are beginning to look beyond traditional apartment features and consider how a building supports day-to-day convenience, including whether there are secure options for receiving deliveries.</p>

<p>Australia Post's Parcel Lockers provide one solution.</p>

<p><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/CkF2oKmlACg?si=C50sDaoUUn2nuLmq" title="YouTube video player" width="560"></iframe></p>

<p>Rather than having a parcel delivered directly to an apartment, eligible deliveries can be sent to a nominated Parcel Locker. Once the parcel arrives, residents receive a notification through the AusPost app or SMS and can collect it using a QR code or one-time PIN at a time that suits them.</p>

<p>The Parcel Locker network now includes more than 1,500 locations nationwide, with installations at Post Offices, shopping centres, transport hubs and an increasing number of residential developments. By providing a secure collection point, Parcel Lockers help reduce missed deliveries and avoid parcels being left unattended in common areas.</p>

<p>For developers, parcel infrastructure is becoming another way to improve the resident experience. Rather than relying on concierge staff or leaving parcels in communal spaces, secure collection points help streamline deliveries while preserving the presentation and functionality of shared areas.</p>

<p>For buyers, it's a reminder that the best apartment features aren't always the most obvious.</p>

<p>A generous floorplan or quality finishes might help narrow the shortlist, but the conveniences that simplify everyday life, whether that's EV charging, secure bike storage or reliable parcel delivery, often become the features residents appreciate most once they're living there.</p>


The apartment feature many buyers don't think about, until their first missed delivery

<p><a href="https://www.apartments.com.au/developers/hg-developments">HG Developments</a> is doubling down on Maud Street in Newstead, filing plans for a new apartment tower just a few doors down from its under-construction Aire Newstead development.</p>

<p>Recently submitted to Brisbane City Council, the proposal is for an 18-storey building designed by bureau^proberts, which has drawn heavily on Brisbane's subtropical design principles while referencing the suburb's industrial heritage.</p>

<p>A total of 64 apartments are planned for the amalgamated 1,518 sqm site at <a href="https://www.apartments.com.au/new-apartments/17-21-maud-street-newstead-qld-4006">17–21 Maud Street</a>, a short walk from the Brisbane River and Newstead Riverwalk.</p>

<p><img alt="First look: HG Developments plans 18-storey subtropical apartment tower for Newstead" data-entity-type="file" data-entity-uuid="a400c7fd-bd15-48f8-a63b-10ede92efe00" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Maud%20st%20bldg.png?VersionId=.0vPmjpbC7CNP7kqGWa6L7rGIwsNExaw" /></p>

<p>"The building is defined by a series of vaulted motifs that reinterpret the arches, colonnades and layered facades evident throughout Newstead's historic built fabric," the Urban Design Report states.</p>

<p>"Combined with recessed glazing and generous balconies, these elements create a layered building envelope that provides shade, weather protection and opportunities for natural ventilation whilst establishing a distinctive architectural identity."</p>

<p>The proposal comprises 64 two, three and four-bedroom apartments across 18 residential levels, positioning it alongside a growing number of taller residential projects transforming Newstead's northern precinct. The tower incorporates extensive subtropical landscaping, with cascading planter boxes, deep planting at street level and a landscaped rooftop recreation area.</p>

<p><img alt="First look: HG Developments plans 18-storey subtropical apartment tower for Newstead" data-entity-type="file" data-entity-uuid="1d8140f4-8b98-45cd-b1b8-1efe8c8e266b" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Maud%20st%20podium.png?VersionId=VAZtbCoD44YCJ57N99fQCAKeSJx7ldZs" /></p>

<p>Bureau Proberts has prioritised passive environmental design throughout the project, with generous balconies, recessed glazing and operable façades helping reduce solar heat gain while maximising natural ventilation. River views become available from the upper levels, while the building has been orientated to capture prevailing breezes from both the Brisbane River and the west.</p>

<p>The architects say landscape is intended to be integral to the building rather than an applied element.</p>

<p>"Vertical greenery, cascading planter boxes and elevated gardens are woven throughout the architecture, softening the built form and strengthening the connection between residents and the subtropical environment."</p>

<p>"Through the integration of landscape, high-quality materials and passive design principles, the development delivers a refined residential address that celebrates Newstead's heritage character while contributing positively to Brisbane's evolving subtropical identity."</p>

<p>Newstead has remained one of Brisbane's most active apartment markets in recent years, with a number of developers continuing to back the inner-city suburb.</p>

<p>HG Developments is currently delivering the 40-apartment Aire Newstead at 25 Maud Street. Fortis recently launched the 65-apartment <a href="https://www.apartments.com.au/new-apartments/crest-walker-newstead-12-kyabra-street-newstead-qld-4006">Crest &amp; Walker</a> on Kyabra Street, while builder-developer BPG and Don O'Rorke's Consolidated Properties are both expected to launch their respective Newstead projects before the end of the year.</p>


HG Developments doubles down in Newstead with second Maud Street apartment development

<p>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.</p>

<p>But in many cases, that's not actually what those sustainability ratings guarantee.</p>

<p>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.</p>

<p>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.</p>

<p>That disconnect has led to the emergence of a new movement across Australia's property industry: nature-based cities.</p>

<p>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.</p>

<p>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.</p>

<p>Nature Based Cities (NBC) was established in 2022 to help accelerate that shift.</p>

<p>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.</p>

<p>"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.</p>

<p>"In Australia, you can have a five-green-star rated building that's concrete and glass with not a blade of grass.</p>

<p>"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."</p>

<p>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.</p>

<p>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.</p>

<p>"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.</p>

<p>"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.</p>

<p>"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."</p>

<p>For apartment buyers, the shift is also changing the questions worth asking.</p>

<p>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?</p>

<p>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.</p>


Staff reporter

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