<section data-scroll-anchor="false" data-testid="conversation-turn-5" data-turn="user" data-turn-id="e65dbe94-e3b6-47f7-b62a-9cbb30c9bf79" data-turn-id-container="e65dbe94-e3b6-47f7-b62a-9cbb30c9bf79" dir="auto">Time &amp; Place’s plans to transform the former David Jones factory building in Surry Hills into a mixed-use residential precinct have gone on exhibition through the NSW Government’s In-fill Affordable Housing pathway.</section>

<section data-scroll-anchor="false" data-testid="conversation-turn-6" data-turn="assistant" data-turn-id="request-WEB:f4d533b7-64a5-413d-86fd-5c99649c2b73-2" data-turn-id-container="request-WEB:f4d533b7-64a5-413d-86fd-5c99649c2b73-2" dir="auto">
The Marlborough House proposal, lodged for the <a href="https://www.apartments.com.au/new-apartments/marlborough-house-47-97-marlborough-street-surry-hills-nsw-2010">47-97 Marlborough Street</a> site, would see the adaptive reuse of the heritage-listed warehouse building alongside the construction of new residential additions and a separate apartment building on the northern portion of the site.

The proposal seeks approval for 172 apartments across three buildings, including 15 per cent affordable housing managed by a community housing provider for at least 15 years from occupation.

<img alt="Marlborough" data-entity-type="file" data-entity-uuid="5d1d3c2a-bf13-47d6-a335-7c01102cdee1" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%209.29.36%E2%80%AFAM.png?VersionId=cjMYrbR.BLUlWH4dar0RVDDo0bG.u2YT" />

Interior view from the Northern Building Penthouse overlooking the park

&nbsp;

The redevelopment is planned for the prominent 3,413 sqm site bounded by Marlborough Street, Goodlet Street and Lansdowne Street, directly opposite Eddie Ward Park and around 200 metres from the Surry Hills light rail stop.

Time &amp; Place acquired the former David Jones building in 2024, marking the first time the property had changed hands in around 50 years.

Designed by Wardle, the proposal centres around the adaptive reuse of the former David Jones factory, originally constructed between 1913 and 1935 in the Inter-War Chicagoesque architectural style.

Wardle noted in its Architectural Design Report that the building “occupies a significant place in the industrial and cultural history of Surry Hills” and at its peak was “the largest department store manufacturing facility in Australia, employing over 800 people and fuelling the growth of Sydney’s fashion and retail industries.”

The practice said the project positions itself “not as an isolated intervention, but as a contributor to the civic, social, and architectural grain of the precinct.”

The proposal would deliver 75 apartments within the retained southern heritage building, 59 apartments within the central addition, and a further 38 apartments within the new northern building fronting Lansdowne Street.

Planning documents show the scheme would comprise a mix of heritage apartments, new-build apartments, townhouses and penthouses.

<img alt="Marlborough" data-entity-type="file" data-entity-uuid="57758518-40a3-4b83-958c-d06e96a2cffa" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%209.29.42%E2%80%AFAM.png?VersionId=VerlX9ST5xgBi8.1_YRsqdWTJeT6ygjs" />Interior View of the Heritage Building Apartment

The development would also include a ground-floor retail tenancy on the corner of Marlborough and Lansdowne streets, rooftop communal open space, a landscaped pedestrian link along the western edge of the site, and basement parking accessed from Lansdowne Street via a car stacker system.

&nbsp;

The scheme emerged from a competitive design process run by Urbis, with Wardle ultimately selected as the winning architect ahead of FJC Studio, TZG, Architectus and Wilkinson Eyre.

The Design Integrity Panel later described several aspects of the Wardle scheme as fundamental to the project, including “the stepped character of the new addition to the north of the site”, the landscaped western pedestrian link, and the “garden arrival” experience separating the original Marlborough House from the heritage addition.

Wardle’s design heavily references the site’s industrial and heritage history, while also responding to the surrounding Surry Hills streetscape.

The Architectural Design Report describes Surry Hills as “a finely grained neighbourhood with beautiful and expressive brickworks throughout the suburb,” with the proposal introducing a material palette intended to sit comfortably alongside the existing warehouse fabric and neighbouring terraces.

The report also outlines the project’s relationship with Eddie Ward Park and the broader landscape context of the area.

“Marlborough House occupies a site of deep cultural memory and the neighbouring Eddie Ward Park is of local ecological significance, where natural systems, topography, and stories have long shaped human experience,” Wardle noted in the report.

The architects said the proposal sought to “rebind built form to Country” through landscape, materiality and the adaptive reuse of the heritage structure.

<img alt="Marlborough House" data-entity-type="file" data-entity-uuid="9ae3f2f9-c85f-477a-a6f8-b43f6cb97c41" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%209.29.53%E2%80%AFAM.png?VersionId=B.qUCLqRvJOR.n9CvYcTpaknIX9LuqKZ" />

The project is also being progressed under the NSW Government’s in-fill affordable housing provisions, allowing developments that include affordable housing to access additional height and floor space incentives.

Under the plans, 2,593 sqm of the project’s floor space would be dedicated to affordable housing, slightly exceeding the required 15 per cent threshold.

In its Design Excellence Strategy, Urbis said the project aimed to “sensitively adapt and enhance the heritage-listed building on site through alterations and additions that preserve its historical significance” while delivering “high-quality market and infill affordable housing development in Surry Hills.”

Time &amp; Place has been one of the most active developers nationally in the last 12 to 24 months. Late last year they completed&nbsp;The Queensbridge in&nbsp;<a href="https://www.apartments.com.au/developments/southbank-vic-3006">Southbank</a>, a mixed-use tower with 353 apartments and a hotel. They are currently selling Park Modern, 246 apartments near the famous Botanic Gardens in&nbsp;<a href="https://www.apartments.com.au/developments/south-melbourne-vic-3205">South Melbourne</a>, and have future projects, <a href="https://www.apartments.com.au/new-apartments/the-wilmot-173-burke-road-28-hope-street-glen-iris-vic-3146">The Wilmot</a>&nbsp;in&nbsp;<a href="https://www.apartments.com.au/new-apartments/glen-iris-vic-3146">Glen Iris</a>, the redevelopment of the Northcote Plaza, and another tower in South Melbourne.

The developer broke into Sydney just a few years ago with Two Tides in Manly. They have another project nearby, which is at the ultra-luxury end of the market on&nbsp;<a href="https://www.apartments.com.au/buildings/shoreline-manly-beach-89-90-north-steyne-manly">North Steyne</a>, fronting the beach.

It is also continuing to work through the <a href="https://www.apartments.com.au/news/nsw/first-look-time-place-settles-on-design-for-the-chimes-potts-point-redevelopment">redevelopment of The Chimes building</a> on Macleay Street in&nbsp;<a href="https://www.apartments.com.au/developments/potts-point-nsw-2011">Potts Point</a>, as well as a project on <a href="https://www.apartments.com.au/news/nsw/time-place-to-take-on-mosman-apartment-market">Mosman's Redan Street</a>.
</section>

Joel Robinson

First look: Time & Place unveils Marlborough House redevelopment designs for former David Jones warehouse in Surry Hills

The residential transformation of St Kilda Road is set to continue into with more new apartment plans for the sought-after boulevard.

Wing Tai Asia has lodged plans for a major residential tower at 464-466 St Kilda Road, replacing the former VACC House with an 18-storey mixed-use development designed around a retained heritage podium and a sculpted contemporary tower.

The proposal, prepared under Victoria’s Significant Residential Development with Affordable Housing pathway, would deliver 325 apartments and ground-floor retail across the prominent 4,653 sqm boulevard site in Melbourne’s St Kilda Road North Precinct.

The project centres on the adaptive reuse of the site’s heritage-listed VACC Building, an eight-storey office designed by Bernard Evans that has occupied the address for decades. Planning documents state the development would involve “carefully dismantling and conserving off-site the original metal fabric of the podium visible from St Kilda Road,” before reinstating it as the defining frontage of the new scheme.

Above the restored podium, Wing Tai is proposing a curvilinear residential tower. The scheme includes 172 one-bedroom apartments, 63 two-bedroom apartments, 66 three-bedroom apartments, and 24 four-bedroom apartments, alongside two ground-floor food and beverage tenancies fronting St Kilda Road.

The tower has been designed with substantial articulation and variable setbacks to minimise perceived bulk and maintain view corridors along the boulevard. Urbis, which prepared the planning report, said the design “has been significantly articulated through a curvilinear design” with “an interplay with materials, façade expression and depth” to create visual separation and visual interest.

The proposal also includes 254 basement car spaces, landscaped pedestrian links connecting St Kilda Road and Queens Lane, and a biophilic landscape strategy featuring canopy trees, raised planters, cascading greenery and a glass oculus pool overlooking the eastern frontage.

Planning documents confirm the $270.1 million development will contribute 3 per cent of project costs to the Social Housing Growth Fund as part of the application process.

Wing Tai acquired the St Kilda Road property in 2018 alongside Abacus Property Group for $95.38 million, before later consolidating ownership of the site. The property previously served as the Victorian Automobile Chamber of Commerce headquarters for around 60 years.

The transformation of the St Kilda Rd boulevard is already beginning to materialise, with a number of high-profile projects recently completed, launched, or approaching launch as developers continue to back the long-term appeal of the precinct.

Among the most notable recent completions is Louise by Samuel Property Group, just off the strip on Queens Lane, the same pocket Hirsch &amp; Faigen recently launched The Queensbury. Mirvac is too on the same street with The Albertine, which is approaching completion.

Dexus recently secured approval for its slice of St Kilda Road, while Gurner also has approved plans for the precinct.

Wing Tai unveils 325-apartment St Kilda Road tower on former VACC House site

Malaysian developer <a href="https://www.apartments.com.au/developers/s-p-setia">SP Setia</a> is the latest to jump into St Leonards booming Transport Oriented Development precinct.

The developer, which has previously delivered Sapphire by the Gardens apartment development in Melbourne, identified the Atchison Street site in 2023. It filed a Scoping Report around 12 months ago, and now has revealed the designs for the new&nbsp;40-storey mixed-use tower.

The State Significant Development Application covers <a href="https://next-portal.urban.com.au/projects/14650/summary">20-22 Atchison Street</a>, a 1,374 sqm site positioned between St Leonards Station and the new Crows Nest Metro station.

Designed by <a href="https://www.apartments.com.au/architects/cox-architecture">COX Architecture</a>, the project would deliver 181 apartments, above a four-storey commercial podium, five basement levels, and new public domain works along Mitchell Street. The apartment mix comprises 35 one-bedroom apartments, 39 one-bedroom-plus-study apartments, 85 two-bedroom apartments, and 22 three-bedroom residences.

The proposal has been lodged as a shop-top housing development under the NSW Government’s TOD planning pathway, which allows increased density around key transport infrastructure. The site sits within the recently rezoned Crows Nest Accelerated TOD Precinct.

<img alt="First look: SP Setia targets St Leonards skyline with 40-storey TOD tower" data-entity-type="file" data-entity-uuid="b799673d-48e2-46b0-801a-0e33a9330100" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/atchinson%20site.png?VersionId=dPh0UfwfaHpbFL1R7H1cbZNbIW0CHbCC" />

SP Setia acquired the Atchison Street site as part of its continued expansion into the Australian apartment market. In comments made to City &amp; Country (The Edge Malaysia) in 2023, SP Setia President and CEO Datuk Choong Kai Wai described the acquisition as “a strategic move” aligned with the group’s post-pandemic market recovery strategy.

“Our target for this exceptional development is local and overseas buyers, including first-home buyers, downsizers and investors,” Choong said.

The tower has been designed as a slender vertical form rising from a mixed-use podium, with COX Architecture positioning the development as a response to the evolving St Leonards and Crows Nest skyline.

“The purpose of the project is to facilitate the delivery of high-quality housing at a strategically located site and deliver a built tower outcome that is consistent with the desired future character of St Leonards and aligns with the TOD controls,” the design report stated.

<img alt="First look: SP Setia targets St Leonards skyline with 40-storey TOD tower" data-entity-type="file" data-entity-uuid="b1a85eee-76f7-436c-a6da-73ba827b9b13" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/atchinson%20entry.png?VersionId=dA9jHGPMcm.dDbwk4QfxqWiY5bfh3UVt" />

The podium would incorporate retail uses fronting Atchison Street, commercial tenancies, landscaped communal areas, and pedestrian improvements along Mitchell Street. Vehicle access and loading would be consolidated via Atchison Lane.

Residents would have access to more than 665 sqm of communal indoor and outdoor spaces, while the development proposes 96 parking spaces across five basement levels.

The proposal also includes a commitment for 10 per cent of residential floor space to be allocated toward affordable housing through a monetary contribution.

COX said the tower form responds directly to the emerging high-density character of the precinct while seeking to maximise solar access, cross ventilation, and outlook from apartments.

<img alt="First look: SP Setia targets St Leonards skyline with 40-storey TOD tower" data-entity-type="file" data-entity-uuid="2163f85c-f63b-4be3-aafa-f8763976cec5" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Article%20Feature%20Image%20%28Grid%29_5.png?VersionId=WiAmtIKJ6.ZQ41EtYEQ1fol7AeorKBlL" />

“The building is orientated towards north,” the Apartment Design Guide compliance report noted, adding that the tower’s slim form was driven by the constrained inner-urban site dimensions.

The design also incorporates landscaped setbacks and communal open space at podium level, intended to soften the interface with surrounding streets and improve pedestrian amenity.

The project adds to a growing wave of redevelopment proposals reshaping St Leonards and Crows Nest following the opening of the Sydney Metro City line and the NSW Government’s push for higher-density housing around major transport nodes.

Last week Stockland filed plans just down the road. They want to build a <a href="https://www.apartments.com.au/new-apartments/601-pacific-highway-st-leonards-nsw-2065">52-storey tower on Pacific Highway</a>.

Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/first-look-stockland-plans-52-storey-538-apartment-st-leonards-tower">First look: Stockland plans 52-storey, 538-apartment St Leonards tower&nbsp;</a>

First look: SP Setia targets St Leonards skyline with 40-storey TOD tower

<a href="https://www.apartments.com.au/developers/urban-property-group">Urban Property Group</a> has revealed plans for a new mixed-use tower at 10 Dangar Street, Wickham, advancing a proposal that would reshape the southern gateway to Newcastle’s city centre with one of the city’s tallest residential buildings.

The State Significant Development proposal, now on exhibition, seeks approval for a <a href="https://www.apartments.com.au/new-apartments/bowline-10-dangar-street-wickham-nsw-2293">43-storey tower</a> immediately adjacent to the Newcastle Interchange. The project would deliver around 200 apartments, including 42 affordable housing dwellings, alongside 99 co-living units, a 171-room hotel, retail space, and new public domain integrated through the site.

The scheme marks a significant escalation of plans previously approved for the site. Urban Property Group took over the prominent 2,904 sqm parcel, where excavation and demolition had already commenced under an earlier consent for a 14-storey mixed-use development.

<img alt="First look: Urban Property Group unveils Newcastle’s next supertower at Wickham interchange" data-entity-type="file" data-entity-uuid="58a96dd9-407f-4d20-86b4-94e4bfeef74b" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/wickham%20podium.png?VersionId=LGlf08pdFGAZDzvx_CXC4XakHNZRuEE0" />

Designed by <a href="https://www.apartments.com.au/architects/sjb-architects">SJB</a>, the tower has been conceived as a landmark transit-oriented development anchored to the Newcastle Interchange precinct. The proposal includes 245 build-to-sell apartments across a mix of one, two, and three-bedroom residences, as well as two penthouses. Fifteen apartments and one operational unit are earmarked for NDIS housing. The co-living component would add a further 99 units, while the podium would accommodate retail uses and hotel facilities.

SJB said the site presents “a valuable opportunity to anchor the precinct by setting the standard for design, active ground planes and character at the key southern gateway.”

The architecture responds directly to the site’s position beside major transport infrastructure and within one of Newcastle’s fastest-evolving urban renewal precincts. The tower form sits above a sculpted podium designed to frame new public spaces, including a through-site pedestrian link connecting Station Street to Hannell Street, landscaped plazas, and activated retail edges.

<img alt="First look: Urban Property Group unveils Newcastle’s next supertower at Wickham interchange" data-entity-type="file" data-entity-uuid="a7bd6ff0-f7db-4ce8-a6dc-ea56e72c6149" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/wickham%20lanne.png?VersionId=xzf39VADyhj7zBQY2I9fx9vI62u2tuSb" />

The design report describes the project as part of the broader transition of Wickham into “a vibrant, high-quality mixed-use urban precinct” that leverages proximity to the station, open space, and regional connectivity.

A detailed public art strategy has also been prepared for the development. The strategy positions the project as “a transit-oriented development of state significance at the gateway to Newcastle’s city centre” and outlines a series of integrated artworks responding to Newcastle’s industrial and transport heritage.

Creative Road’s curatorial framework for the project, titled Unveil, draws on “stratified surfaces, carved volumes, and light-filled apertures” while referencing Newcastle’s transformation from an industrial city into a contemporary education and technology hub.

<img alt="First look: Urban Property Group unveils Newcastle’s next supertower at Wickham interchange" data-entity-type="file" data-entity-uuid="77a882bb-14b1-4d28-99ff-9438e39508c0" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/wickham%20site.png?VersionId=cevgo_vN0eKPK78P8YcEu3mKPLkpFqE7" />

The proposal is being advanced through the NSW Housing Delivery Authority pathway after being declared State Significant Development in June 2025. The accompanying scoping report states the development aims to “maximise the site’s proximity to the Newcastle Interchange by delivering transit-oriented development” while increasing housing supply and affordable housing provision within the Newcastle LGA.

Urban Property Group’s plans align with the long-term strategic vision established under the Wickham Master Plan, which identified the interchange precinct as suitable for substantial uplift in height and density. The current proposal would significantly intensify that vision, positioning the tower among the tallest developments proposed for Newcastle.

The site sits immediately north of the Newcastle Interchange, bounded by Dangar Street, Hannell Street, and Charles Street. It is surrounded by a rapidly growing cluster of residential towers and mixed-use projects that have emerged following the completion of the light rail and transport interchange.

First look: Urban Property Group unveils Newcastle’s latest tower at Wickham interchange

Bottega House has completed settlement of a landmark riverfront site in Macquarie Street, St Lucia, representing its first major Brisbane development.&nbsp;

Positioned on the banks of the Brisbane River, the <a href="https://www.apartments.com.au/new-apartments/180-macquarie-street-st-lucia-qld-4067">premium site at 180 Macquarie Street</a> features uninterrupted river frontage in one of Brisbane’s most tightly held residential precincts.&nbsp;

The proposed development, currently under assessment with Brisbane City Council, has been designed by <a href="https://www.apartments.com.au/architects/plus-studio">Plus Studio</a> with interiors by <a href="https://www.apartments.com.au/interior-designers/mim-design">Mim Design</a> and will deliver a boutique collection of premium residences positioned specifically for owner occupiers and downsizers.&nbsp;

The residences are set to redefine luxury apartment living in the area, with a focus on architectural quality, refined finishes, landscape integration and elevated amenities including curated wellness facilities, resort-style pools and recreation spaces rarely seen in the local market.&nbsp;

Exclusive sales for the project will be led by Keenan &amp; Byrne, ahead of an anticipated launch later this year.&nbsp;

Bottega House Managing Director Nick Malloch said the project reflects the group’s ambition to deliver a highly curated residential offering within one of Brisbane’s most tightly held precincts.&nbsp;

“This is an incredibly rare riverfront opportunity and one we have approached with a long-term perspective,” Malloch said.&nbsp;

“Our vision from the outset was to create a boutique collection of residences that feel more like private homes than traditional apartments, with generous proportions, refined finishes and exceptional amenity throughout."

Malloch says there is a&nbsp;lack of premium owner-occupier stock of this quality in the market, particularly for downsizers wanting space, privacy and a true lifestyle offering without compromise.&nbsp;

"Demand is expected to be strong given the scarcity of premium riverfront opportunities of this nature within Brisbane’s inner-west."&nbsp;

Bottega House secures landmark riverfront site in St Lucia 

Roberts Co has entered a new phase of growth following its acquisition by Arada, one of the world’s fastest-growing property developers in Australia.

The acquisition is supported by a $50 million capital injection into Roberts Co’s Australian balance sheet, consisting of the previously announced $25 million recapitalisation and an additional $25 million in new funding from Arada.

This investment strengthens Roberts Co’s financial position, stabilises operations, and provides the foundation for strategic expansion beyond its New South Wales base, with a focus on new opportunities in Queensland, including the Brisbane and Gold Coast regions.

With Arada’s international resources and financial backing, Roberts Co will broaden its portfolio across residential, commercial, and infrastructure sectors, reinforcing its strong market position in New South Wales and setting itself to capture growth in one of Australia’s most dynamic construction markets.

Ahmed Alkhoshaibi, Group CEO of Arada, said Roberts Co has a proud Australian heritage, an outstanding delivery record, and a strong reputation for collaboration with clients and partners.

"By combining this expertise with Arada’s global scale and financial capacity, we are creating a platform for sustained growth in the Australian market,"&nbsp;Alkhoshaibi said.

“Our $50 million capital injection, including new funds from Arada, underlines our commitment to both stabilise and expand Roberts Co’s operations, particularly into the fast-growing Queensland market. We see significant potential in South-East Queensland’s pipeline and are confident Roberts Co is well placed to deliver lasting value for clients and communities.”

George Kostas, CEO of Roberts Co, said Queensland, and particularly South-East Queensland, is one of the most active and opportunity-rich regions in Australia right now.

"The lead-up to the Brisbane 2032 Olympic Games will bring unprecedented investment across housing, transport, and infrastructure. Roberts Co is eager to play a major role in that transformation and secure a meaningful share of this fast-growing market.”

Arada pours more funds into Roberts Co, flags expansion into South East Queensland construction market

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Australand has slammed some of its biggest house-and-land competitors for offering incentives to entice buyers as the outlook for the Melbourne land market remains soft.
Land sales on Melbourne’s fringes have been in decline since the second half of 2009, falling from 16,000 sales in 2010 to just 6,000 for the first six months of 2012, according to the latest Melbourne communities report from Colliers International, which forecasts only modest growth ahead.
Median land prices fell by 9% over the six-month period, from $215,000 to $205,000, but recorded an increase of 7% year-on-year.
Developers have also been hurt by the withdrawal of the $13,000 Victorian government first-home buyer handout for the construction of new homes, which ended in June.
Australand general manager Rob Pradolin told Fairfax the current land market remained tough, with first-home buyers disappearing following the ending of the grant, but says rebates and incentives are causing hundreds of home owners to pay more stamp duty because the face value of contracts included those extras.
He says there is a lot of competition in the marketplace, with “developers under-cutting each other and offering significant incentives to make a sale”.
Pradolin says rebates are disguising the adjustment that has already occurred in the Melbourne land market and says it is about time developers face the facts, give a simple best price and move on.
Australand has eight land estates for sale on the Melbourne fringes including Casiana Grove in Cranbourne West, with land prices starting at $187,000 featuring 670 lots.
According to Colliers, 400 lots remain available for sale in this development.
Among those offering incentives is one of Australand’s biggest competitors, Stockland, which is offering a $10,000 cash rebate on selected lots.
The rebate is offered at Selandra Rise in Clyde North, the-top selling residential project over the second half of 2011, according to the same Colliers report.
Lend Lease is offering to pay back the value of stamp duty of the land component of the sale to be received as a cash-back upon settlement before December 7, 2012.
Another developer, Peet, was giving away Toyota cars up until October 14.
Other developers offering incentives include Intrapac, which is offering a $15,000 new home buyer grant at its Somerfield development at Keysborough in Melbourne’s south-east, which is available to all buyers.
“We’re extending the expired new home buyer hrant to include everyone,” says the Somerfield brochure.
Some of the promotions come with flashy, attention-grabbing signage.
<img src="/images/stories/2012/10/hotlots.jpg">
The Stockland offering is called the “Hot Lots Offer” complete with burning flame.
Other developer incentives have included cash rebates, stamp duty rebates, free fencing and landscaping.
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lschlesinger-FZcF9M3vE6

Flashy developer incentives push up cost – and attendant stamp duty – of Melbourne land packages: Australand

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Do you want cashflow or equity from your development?
One of the first questions I ask anyone enquiring about property development project management services is: what is your goal?  What do you want to achieve from your development?
The reason I ask is because some people want to create positively geared property with the highest possible yield because they want to add to their cashflow.  Generally these people may have lower incomes but still want to build a property portfolio. The income from the properties will increase their taxable income. They don’t want property that is going to drain them financially.
Others are looking for negatively geared property where they can create lots of equity. Generally they are people on higher incomes, paying a lot of tax and need property that will help offset some of the tax they are paying. They need high depreciating property and want to use the equity created through development for their next deal.
There are very different development strategies for each outcome.  After this initial chat, we recommend a discussion with their accountant and lender take place to ensure that the development strategy that they want is actually correct for their situation.
Once we’ve established the development strategy, we look within this category for the right development site for them.
A high cashflow development will be one that produces a 9%-plus gross yield, and Property Bloom is achieving this with our granny flat developments. I’ve included figures on our latest granny flat completed below:
Purchase three-bedroom house on large, dual-access block:   $228,000
Stamp duty and purchase costs: $10,000
Renovations to house: $18,000
Total house cost: $256,000 – rent achieved $340 per week
Cost to build tw0-bedroom granny flat: $96,000 – rent achieved $280 per week
Total rental return: $620 per week, $32,240 per annum
Cost of house plus granny flat = $352,000
Gross yield (rent divided by cost) = 9.2%
This is a cashflow strategy, not an equity creation strategy, as a valuer is likely to value the property at cost plus upgrades unless there are direct sales comparables in the market. This is because the flat cannot be subdivided from the house and may be considered purely an upgrade to the existing house.
On the opposite end of the scale would be a three- to four-unit project that will create a large amount of equity, high depreciation benefits and not a bad yield, but a project of this size will still probably be negatively geared on completion.
 
<hr class="system-pagebreak">
Here’s an example of a three-unit project Property Bloom has just completed in the Hunter region of NSW:
Land 1,090 square metres: $195,000
Purchase costs: $7,000
Building costs: $667,000 includes all design, fees, development application and construction certificate costs
Total costs:  $869,000
Rent on three units @ $390 per week each = $ 60,840 per annum
Estimated values of freestanding three-bedroom, two-bathroom units: $1,088,000
U1 $369,000 (DLUG), U2 $350,000 (SLUG), U3 $369,000 (DLUG)
Gross equity created (value less costs) = $219,000
Gross yield: 7%
Be clear with your goals.  Yield or equity, and sometimes you may achieve a balance between the two.
With cash rates now down to 3.25% and banks fixed rates around 5.4% (for 3 years), yields are increasing.
To create a good amount of equity in your development be sure to buy the land at the best possible price, look for relatively flat land that will help keep site costs low and build just what the market needs, not above it – don’t over capitalise.  If you can keep your building costs low but still deliver a good product, then you have met a few developer golden rules.
Jo Chivers is director of <a href="https://www.propertybloom.com.au/">Property Bloom</a>, which manages property development.
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jochivers-wq5Bp59R5a

Choose between cashflow and equity when developing property

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Stockland’s Selandra Rise residential community in Melbourne's south-east has been one of the most successful recent house-and-land projects in Melbourne, according to the latest Melbourne communities report from Colliers International.
The report, released this week, notes that Selandra Rise (pictured below) in<a href="/news"> Clyde North</a> managed around 150 sales over the second half of 2011.
<img src="/images/stories/2012/10/selandra1.jpg">
However, the overall outlook is for lower steady growth in residential land sales over the next few years, with a combination of reduced population growth, declining consumer sentiment and changes to government incentives having already led to a correction in demand for land in Melbourne’s residential communities.
"Lack of demand, a cautious consumer outlook and uncertainty in funding on the developer and purchaser side is likely to continue in the next 16 months,” says  Paul Wheate, Colliers International director for valuations.
Over the second half of 2011 residential lot sales in Melbourne’s fringe growth suburbs continued to decline falling by 21%.
Colliers International records less than 2,000 lots sales in the second half of 2011 compared with more than 3,500 in the same period two years ago.
Median land prices fell by 9% over the six-month period, from $215,000 to $205,000, but recorded an increase of 7% year-on-year.
New home approvals are down to below 6,000 across the city for the first six months of the year, compared with nearly 14,000 in 2011 and close to 16,000 in 2010.
Wheate says that after a period of high demand and limited supply, the land market was returning to more sustainable long-term averages in terms of sales rates, driven largely by the increased supply of available stock and declining purchaser sentiment.
“After the highs of 2009 and 2010 we became used to unsustainable levels of activity,” he says.
“With the declines in demand that we are seeing, courtesy of reduced building approval figures, population growth, and negative consumer sentiment during 2012, we anticipate that vacant lot and house sales will remain at current levels for the short to medium term.“
Click to enlarge
<a title="Click to enlarge" rel="shadowbox" href="/images/stories/2012/10/colliersoct11.gif"><img src="/images/stories/2012/10/colliersoct11thumb.gif"></a>
 
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Colliers International research analyst Margaret Bowden anticipates that the current environment will lead to a further increase in the proportion of sales of land measuring between 350 square metres and 450 square metres, and will likely lead to a more affordable median price for both vacant lot and house sale prices over the next 16 months.
The trend to build more affordable houses on smaller lots has already been picked up Stockland, which has reduced its average lot size from 569 square metres to 510 square metres. The company has pushed up the price from $362 per square metre to $403 per square metre.
The Colliers International report notes that around 82,265 vacant lots were sold and settled in the municipalities of Hume, Cardinia, Casey, Whittlesea, Wyndham, and Melton between 2005 and 2011.
However, nearly 43,000 lots remain available for sale – more than half the number sold over the previous six-year period.
Many projects continue to sell well, led by Selandra Rise.
The development is located in the city of Casey, about 50 kilometres south-east of Melbourne and about 20 kilometres from Mornington Peninsula.
Three-bedroom house-and-land packages start from around $320,000 on blocks measuring 294 square metres.
In total, 750 out of the 1,200 blocks available at Selandra Rise have been sold since marketing commenced in 2010.
Other strong selling projects include Stockland’s Allura community (Truganina) and Lend Lease’s Atherstone community (South Melton) in the western region, which sold 120 and 105 each respectively, and Metro Property’s Orchard Grove (Doreen), which has sold about 100 lots since it began marketing in April 2011. This is equivalent to 57% of its total stock.
According to Colliers International, six new precinct structure plans (PSPs) were completed in June 2012.
These new development areas will add an estimated 37,782 lots to the growth corridors of Melbourne in the future. This brings the number of total proposed lots to 135,561.
The western corridor has the highest proportion of lots (36%) with completed PSPs in the supply pipeline, the majority of which are in the municipality of Melton (35,254 lots). This is followed by the south-eastern corridor, with 33%, and the northern corridor with 31%
<a href="/news">Wyndham </a>recorded the highest median price for vacant lots (excluding rebates) in Melbourne’s growth areas over the second half of 2011 with $237,750, followed by <a href="/news">Casey </a>($213,950), <a href="/news">Whittlesea </a>($211,000), <a href="/news">Hume </a>($195,000), <a href="/news">Melton </a>($175,500), and <a href="/news">Cardinia </a>($176,000).
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Stockland’s Selandra Rise tops Melbourne’s house-and-land sales but fewer sales forecast: Colliers

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The red brick Cronulla house used as the location of the Vickers' family house in the Channel 10 series Puberty Blues (pictured below) sold at recent auction for $1,382,500.
{yoogallery src=[images/stories/2012/09/sept6puberty]}
The home, last sold 47 years ago, was very much in mint 1970s condition, including the seven different types of wallpaper, patterned carpet, coloured bathroom and wood light fittings.
The television series location manager Peter Hicks scoured for months to find the right house with authentic '70s interiors.
Inspired by the recent <a href="https://www.propertyobserver.com.au/new-south-wales/no-blues-for-the-property-market-as-70s-icon-sells/2012090956471" target="_blank">Puberty Blues series</a> – which seems set to return to our wide screens again – and the home sale, Property Observer has taken the trip back to find the top 1970s homes that are currently on the market or have recently sold.
The list is mainly populated by Victoria and New South Wales properties, but other states do get a mention. The list is organised by the style features that are indicative of a 1970s property.
 
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<h1>Orange and brown</h1>
Maybe it was all the John Lennon tinted sunglasses, but people in the 1970s loved orange and brown. The world couldn’t get enough – orange and brown pants, orange and brown carpet, orange and brown typewriters and orange and brown homes. 

<img src="/images/stories/2012/09/trentwood.jpg">
<a target="_blank" href="https://www.realestate.com.au/property-house-vic-balwyn+north-109451346">21 Trentwood Avenue, Balwyn North, Vic 3104</a> (pictured above)
In excess of $1 million
The fire, the furniture, the brown carpet and the wood veneer show this house's makeover in the 1970s. Walk into the open home day and you’ll likely hear Bee Gees’ Trafalgar pumping from the stereo. This home was actually built in the 1960s but underwent a hefty renovation in the '70s. The property was designed by Kevin Borland. The four-bedroom brick home is listed through Dawn Kay from Fletchers Balwyn North.
 
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<h1>Exposed Brick</h1>
Brick was best, according to the 1970s psyche. Big, imposing (orange) brick walls were a key feature of Australian homes in the 1970s.

<img src="/images/stories/2012/09/vernon.jpg">
 <a target="_blank" href="https://www.realestate.com.au/property-house-nsw-hunters+hill-111544867">8 Vernon Street, Hunters Hill, NSW 2110</a> (pictured above) $3.49 million

There’s a big brick wall here, but the owners have adorned it in true '70s style with a lovely big hanging tapestry. The roof angles down leading onto a concrete entertainer's deck. Settle back in the period futon and get groovy, man. The home comes with 180-degree views over the bay. It comes with its own pool and private access to the bay. Nicholas McEvoy from McGrath Hunters Hill is listing the property.
<img src="/images/stories/2012/09/williamedward.jpg">
 <a target="_blank" href="https://www.realestate.com.au/property-house-nsw-longueville-110477853">19 William Edward Street, Longueville, NSW 2066</a> (pictured above) $1.59 million

The interior is stylistically similar to the previous property. The dining room here is framed by the big brick walls to give a homely feel. The Longueville property comes on 1,250 square metres for the true Australian dream lifestyle. It is being listed by Mary-Anne Fitzgerald from Blunts Real Estate Lane Cove.
 
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<h1>Tiled kitchens and bathrooms</h1>
Big tiles were the big thing back then, and who can blame them? Patterened tiles, striped tiles, orange tiles – anything to make a statement.
<img src="/images/stories/2012/09/hooke.jpg">
 <a target="_blank" href="https://www.realestate.com.au/property-house-nsw-dungog-109339186">112 Hooke Street, Dungog, NSW 2420</a> (pictured above) $359,000

Big and bold are the words to describe these tiles. The fern in the upper right does inject some greenery into the earth tones of the bathroom. The brick home is in Dungog, North of Newcastle. Natasha McElwaine from McElwaine Hunter Valley is selling the property.
<img src="/images/stories/2012/09/park.jpg">
<a target="_blank" href="https://www.realestate.com.au/property-house-vic-brunswick-111096111">833 Park Street, Brunswick, Vic 3056</a> (pictured above)
$1,350,000

Very similar tiles here, maybe Waltons was having a sale at the time. Offered for the first time in 28 years, this property is a blast from the past. Property Observer particularly likes the lovely blind just peeking into the frame. Property Observer notes it's not quite authentic though, with a complete lack of any Macramé. The solid-brick Californian bungalow is close to Melbourne and comes with the classic three bedrooms and two bathrooms. Chris Goulding from Barry Plant Brunswick is selling the property.
 
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<h1>Billiards and pool rooms</h1>
Someone in the 1970s decided that billiards and pool rooms were a good idea. The space-hungry rooms are a common feature of homes of this period.

<img src="/images/stories/2012/09/belmont.jpg">
<a target="_blank" href="https://www.realestate.com.au/property-house-vic-surrey+hills-111303151">5 Belmont Street, Surrey Hills, Vic 3127</a> (pictured above)
$1. 4 million

There’s ample room to play a few rounds of pool around this table, there’s no need to buy shorter cues, which are so often required in pool rooms. The generous space is a sure feature from the '70s. The four-bedroom Surrey Hills home comes has no shortage of space at all, as it’s set on 1,139 square metres. It’s being sold by Loger Chen and Janssen Xiang from Aussie Home Real Estate Kew.
<img src="/images/stories/2012/09/robinson.jpg">
<a target="_blank" href="https://www.realestateview.com.au/Real-Estate/18-20-robinson-place-portsea/Property-Details-buy-residential-3732841">18-20 Robinson Place, Portsea, Vic, 3944</a> (pictured above) $1.6 million

Big pool room, big tiles, orange stylised furniture – this has to be the feature home on our list. The wood-panelled roofing leading out into the entertaining area is lovely. The four-bedroom home comes on 2,000 square metres and is close to the local tennis and golf club. It’s being sold by Ilze Moran and Lloyd Robinson from RT Edgar Portsea.
 
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<h1>Fireplaces</h1>

Home builders in the 1970s loved their fireplaces. If there’s one way to quickly tell if a home was built in the 1970s, rush to the lounge room and see if there’s an open fireplace. Big and brick and likely orange.

<img src="/images/stories/2012/09/clarke.jpg">
 <a target="_blank" href="https://www.realestate.com.au/property-house-sa-walkerville-108186616">6 Clarke Street, Walkerville, SA 5081</a> (pictured above) $875,000 to $950,000 Built in the 1970s, this home was recently renovated to bring it up to date. But it’s been tastefully done and keeps its original styling cues. White walls started to creep into fashion in the 1970s as architects advocated large modern-looking rooms. The original builders took an interesting take on the requisite 1970s fireplace and have made it a feature point of the open-plan dining and lounge room. It’s being sold by Judy Morris from Klemich Real Estate.
<img src="/images/stories/2012/09/small.jpg">
 <a target="_blank" href="https://www.realestate.com.au/property-house-nsw-woollahra-111201083">13 Small Street, Woollahra, NSW 2025</a> (pictured above) Above $2 million

There’s some '70s-influenced styling here with the fireplace and the Organic-style architecture. It comes with views over the city skyline, which would have looked somewhat different in the 1970s. The rest of the house is furnished with period furniture and detailing. It’s being sold by Walter Antonelli from Raine &amp; Horne Double Bay.
 
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<h1>Trippy patterns</h1>


Stare at some of the patterns around in the 1970s long enough and you’ll eventually lose your mind. There’s nothing subtle about the carpets and wallpaper around at the time.
<img src="/images/stories/2012/09/watts.jpg">
 <a target="_blank" href="https://www.realestate.com.au/property-house-vic-mount+eliza-108199666">44 Watts Parade, Mount Eliza, Vic 3930</a> (pictured above) $950,000

What a kitchen. Property Observer likes the styling and the big floor tiles. The kitchen is in a three-bedroom Mount Eliza home absolutely full of 1970s furniture. The property is being sold by James Crowder from Community Real Estate Mount Eliza.
<img src="/images/stories/2012/09/sheoke.jpg">
 <a target="_blank" href="https://www.realestate.com.au/property-house-vic-sorrento-107134026">5 Sheoke Grove, Sorrento, Vic 3943</a> $675,000

This Sorrento property hasn’t been touched in a long time. There's wonderful wooden bedheads. The zig-zag carpet is unrelenting yet mesmerising. And then to complete the magic eye illusion, it’s offset by the fluoro curtains. The brick home is set on 776 square metres of land. It’s being sold by Liz Jensen from Kay &amp; Burton Portsea.
 
<img src="/images/stories/2012/09/yarrabat.jpg">
 <a target="_blank" href="https://www.realestate.com.au/property-house-vic-balwyn-108169516">97 Yarrbat Avenue, Balwyn, Vic 3103</a> (pictured above) $ Undisclosed

This home was originally designed by  Dale Fisher, an Australian architect active through the 1970s. It has made use of the classic '70s wallpaper, but it’s used in restraint and works quite well. The interior of the home is like a museum of 1970s styling. The four-bedroom home comes on 1,812 square metres of land in Balwyn. It recently sold through Diana Healy from Jellis Craig Hawthorn.
 
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<h1>Outdoor spaces</h1>
Entertaining has always been an Australian tradition, and this was no different in the 1970s. The spaces there were built to 1970s tastes.

<img src="/images/stories/2012/09/helenslea.jpg">
 <a target="_blank" href="https://www.realestate.com.au/property-house-vic-caulfield+north-111417947">7 Helenslea Road, Caulfield North, Vic 3161</a> (pictured above) 

This is a classic 1970s outdoor space. The deck is concrete tiled, and the angled roof comes down to give a small timber-clad covering to half of it. The patio looks out to the expansive backyard and into the family room. The home has been updated over the years, but the undeniable soul of the '70s remains. The four-bedroom Caulfield North home is set on 835 square metres and comes with a kosher kitchen and an undercover car port.

<img src="/images/stories/2012/09/nelson.jpg">
 <a target="_blank" href="https://www.realestate.com.au/property-house-wa-bedfordale-110374989">30 Nelson Street, Bedfordale, WA 6112</a> $559,000

That façade is so '70s it must have been designed right about the time Gough Whitlam was sacked by John Kerr. The façade is from a five-bedroom brick home on 5590 square metres in the semi-rural suburb in the south-east of Perth, Bedfordale. It’s being sold by Sam Saffioti from Roleystone Real Estate Roleystone.
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Got the right day but got the wrong week: the 14 houses living in the '70s

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Residential property developer Peet expects “conditions” in the residential property market to remain “volatile and challenging" into 2013 with business and consumer confidence remaining low despite the series of rate cuts in the previous financial year.
However, Peet managing director and CEO Brendan Gore did note in the company’s annual report that “positive signs” have emerged in the Western Australian property market in the first months of the year.
And he said there are also plans to accelerate development of Peet's Vantage master-planned residential community in Gladstone, the mining hotspot 550 kilometres north of Brisbane.
However, the overall tone of the annual report was one of a challenging year ahead for Peet and others operating in the residential development sector.
“The 2012 financial year delivered some of the most challenging conditions experienced in almost 20 years and there is little expectation that markets will improve significantly in the 2013 financial year,” said Gore.
“The series of interest rate cuts in 2012 has not had the desired effect to date and consumer and business confidence remains low."
He did add that the long-term fundamentals of the Australian property market – including population growth, an under-supply of housing and a tight rental market – “remain conducive to an improving market.
“However, the catalyst for household confidence, which will underpin improved demand in the residential property market activity, is yet to be found.”
Gore says Peet would be well prepared to "respond quickly and effectively to any improvement in consumer sentiment and the residential market".
“However, given the ongoing uncertainty in Australia, and until the timing and strength of the expected recovery is confirmed, the directors are unable to provide guidance on 2013 operating earnings with any degree of certainty."
Peet recorded a net operating profit after tax of $20.3 million for the year to June 30 and statutory net profit after tax for the full year of $5.4 million, representing a decrease of 76% compared to the previous corresponding period.
Shareholders did not receive dividend payment.
Peet chairman Tony Lennon said he appreciated this would be disappointing for investors, but said he trusted investors “have confidence in our ongoing dividend payment policy and the validity of the reasoning behind the decision taken”
Lennon said the year ahead would be a period of consolidation for Peet.
“We are operating in exceptional times where, despite the relative wealth of our own nation, we are heavily impacted by the global economy and consumer and business confidence has been low over a sustained period of time.
“This time last year, it was the crisis befalling some European economies and concern about the United States’ debt ceiling issue. This year, the slowing of the Chinese economy and falling commodity prices are also having significant flow-on effects in Australia and consumer and business sentiment remains cautious.
But he said the company was well positioned with “quality assets in good locations around Australia”.
“We have managed through a number of cycles and will continue to maintain the rigour required during the current market conditions, while positioning the company to capitalise on any upturn in consumer sentiment.”
Peet’s biggest residential project is Flagstone City, 45 minutes south-west of Brisbane in Jimboomba, which has a gross development value of $1.87 billion and is due to begin in 2013. It features 1,500 lots and is proceeding as scheduled.
In total Peet has a lot pipeline of 34,600 worth $6.2 billion.
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No property market recovery in 2013, but some early positive signs in WA: Peet

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There is no simple policy response to lifting a major sector of the economy, housing, out of its current doldrums.
Financial stimulus packages such as increasing the value of first-home owners’ grants and stamp duty concessions do work. However, as welcome and necessary as these fiscal stimulus policy measures are, they need to be complemented by other monetary policy and regulatory reforms to overcome the challenges in the post-GFC deleveraging environment.
 
The new housing market is well known for its cyclical behaviour but the current cycle, impacted in recent times by the GFC, has highlighted the systemic problems of housing supply, housing affordability and the need for fundamental reform.
 
The here and now
Residential building is going through a worrying and long weak phase during which industry activity, in real terms, has essentially tracked sideways for close to nine years now. The short-term outlook remains poor despite the RBA’s cumulative rate cuts of 1.25 percentage points over the past 12 months, and residential building is set to weaken further during the remainder of 2012 and into 2013.
Master Builders’ surveys as well anecdotes from house builders point to poor sentiment affecting purchasing decisions. Households remain sensitive to global woes, job insecurity and flat to falling house prices.
‘Hangovers’ from the global financial crisis created an increased propensity to save and reduce debt. This trend appears long lasting.  Confidence remains fragile. Although leading indicators of new home building are finally showing some – albeit nascent – signs of improvement, activity continues to languish around the bottom of the cycle.
Actual work done is expected to weaken further in the short term. Sales and enquiries are drying up, and profitability is under severe pressure. So it is no surprise that builders say they are looking to reduce employees and contractors.
Further RBA rate cuts are warranted, although the banks must fully pass on these rate reductions to home owners and not simply bolster their profits. Reviewing home loan eligibility requirements would also assist.
Forward indicators should improve during the latter part of 2012 and early 2013, with an improvement in work done beginning to flow through in 2013-14.  Nonetheless, the upswing will be from a low base. Dwelling starts declined by 11.5% to less than 140,000 dwelling units in 2011-12, after a 5% decline the previous year.
 
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Understanding the problems
 
A much better understanding of the underlying, structural or systematic problems is needed if there is to be any meaningful response to stimulate a sustainable recovery in the new housing market.
The first key challenge is to redress the undersupply of new housing by building more. This would, in turn, work to address the second key challenge, housing affordability.
Lack of supply, first and foremost
Economic analysis points to a substantial and increasing under supply of housing in Australia. Projections from the federal government’s National Housing Supply Council point to a current shortfall of 228,000 dwellings. Based on current policy settings, the council believes it will increase to 370,000 dwellings in 2016 and potentially 663,000 dwellings by 2031.
Federal government programs to improve the supply of affordable housing have been worthwhile, but do not address the fundamental constraints driving the broader supply problems.
The affordability issue just won’t go away
 
Even if a cyclical pick-up in demand works to underpin a recovery in Australia’s new housing sector, the nation will still have a serious underlying problem in terms of housing affordability.  Without a coordinated national policy response by all three levels of government, the problem will only worsen.
Global economic uncertainty has contributed to the current sluggish housing market conditions but is masking the true extent of the housing challenge.  Housing affordability remains problematic for many in the Australian community, in particular first-home buyers looking to gain a foothold in the housing market.
The decline in established house prices experienced in the immediate aftermath of the GFC (falling 5% in 2008-09) and the more recent falls coinciding with the ongoing sovereign debt crises in Europe and the United States (down 6% in the past two years) are not sustainable or politically desirable solutions to the longer-term structural challenges of housing affordability.
 
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Policy needs to focus on supply-side impediments
The short-term focus of governments often ignores longer term structural economic and social policy ramifications.  Reforms are required on both the supply and demand side of the market.
Demand-side drivers of house prices influencing housing affordability include: income, taxation, mortgage interest rates, employment and unemployment, consumer confidence, attitudes to household leverage (debt), population growth, the incidence and pattern of household formation, labour market and social changes, patterns of urbanisation, and changes in housing quality.
Supply-side drivers of house prices include: building and planning regulations, availability of adequate land supply, taxes and charges imposed on the housing supply chain, and labour market policies, practices and regulations.
Government failures must be corrected
The primary challenge for the federal, state, territory and local governments is to develop and implement a set of nationally co-ordinated policy settings to remove the supply-side impediments in the Australian housing market.
Immediate priorities must revolve around remedying government failure in areas such as regulation and regulatory processes – land supply and development approvals, as well as taxes and charges affecting residential housing supply and transfer.
Governments must reduce developer charges and taxes such as stamp duties, speed up development applications and increase land supply. These key measures would go a long way towards solving both housing undersupply and poor affordability.
Action to remove the barriers to housing supply would also assist in underpinning economic growth and jobs.
Master Builders Australia’s blueprint for reform
 
The federal, state, territory and local governments must act collectively through a radically reformed housing affordability agenda under the auspices of the Council of Australian Government.  This reform agenda must include accountability for delivering housing supply and housing affordability policy outcomes.
Master Builders wants to see the setting of competitive benchmarks for the respective state, territory and local government jurisdictions. Under these benchmarks, the federal government commits to pay competitive, efficiency payments to the best-performing state, territory and local governments delivering superior outcomes against rigorous and transparent performance criteria.
Key performance metrics can include: adequate supply of imminently ‘releasable’ land, streamlined building approvals processes, agreed ‘master plans’ covering urban and regional infrastructure plans and urban consolidation, adherence to the Building Code of Australia, and removal of state and local government variations, and reforms to infrastructure (also known as ‘developer’) charges.
A plea for action
Australia desperately needs a long and strong phase of residential building. We have been underbuilding for nearly a decade.
The well-documented supply-side impediments and inefficiencies need to be addressed urgently, or a pick-up in housing demand will simply run into these constraints. This will force up new house prices, making established houses more attractive and forcing people to chase existing stock – thereby sowing the seeds for the end of the new house building upturn.
Surely this should be enough incentive for governments to work together to agree on a set of reforms to address key issues such as the length and complexity of the planning process, issues related to the provision and funding of infrastructure, and other challenges related to infill development.
If successfully resolved, this would ensure new residential building and the industry that provides it, is able to effectively respond to changes in housing demand.
In the recent past, governments have made some small progress in addressing these concerns, but there is a long way to go if we are to fix supply-side rigidities that bedevil the nation’s housing and residential building markets.
Peter Jones is chief economist for <a target="_blank" href="https://www.masterbuilders.com.au/">Master Builders Australia.</a>
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A multi-faceted approach needed to fix new housing sector

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Melbourne-based home-building group Metricon Homes was Australia’s largest builder for the second year in a row, according to the HIA housing 100 report.
The big mover was Hotondo Homes, which jumped from position 20 to position eight on the list, with its number of home build starts increasing from 879 in the 2010-11 financial year to 1,463 in the 2011-12 financial year.
Metricon Homes started construction of 2,821 dwellings in the last financial year, all of which were detached houses in Victoria, NSW, Queensland or South Australia.
The company was followed by Alcock/Brown-Neaves Group, starting construction on 2,736 dwellings in WA and Victoria.
In third place was WA builder BGC Australia, which started 2,692 homes.
Australia’s largest multi-unit builder was Hickory Developments Pty Ltd for the third year running, with 2,163 starts. In overall rankings it moved up one place to number four.
The HIA report ranks the nation’s top 100 residential builders based on the number of homes started each year.
The report found the total number of starts by the top 100 builders fell by 7.3% to 48,130 their lowest level in 15 years.
“This result is consistent with the overall experience of the industry in 2011-12 where new home building conditions weakened considerably across Australia,” says HIA’s Dr Harley Dale.
The number of houses built by the largest 100 builders fell 11% from 40,138 to 35,909. The number of units built grew 4% from 11,720 to 12,221.
The largest 100 builders represented 35% of Australia’s housing starts in the 2011-12 financial year, up slightly from 33% in 2010-11, but below the historical average of 36%.
“The Housing 100 and the entire industry can deliver, and indeed Australia's residents have the requirement for, a considerably higher level of housing starts than has been evident over the last couple of years,” says Dale.
“Within an environment of subdued demand conditions, both unilateral and cooperative policy reform could generate a much healthier year for new home building in 2012-13.
"Sadly, evidence of the will to execute such policy action remains far slimmer than Australia requires,” Dale says.
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Metricon Australia's largest home builder for second year running: HIA

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Last week Property Bloom was offered a few development application and construction certificate approved dual-occupancy sites. They are in a town where dual occupancy sites are extremely hard to find right now. This town’s median price has been growing steadily as a result of investor activity increasing over the past 24 months as people are attracted to the high rents being achieved due to an undersupply of housing.
If there is a two-speed economy, this Hunter town is in the top speed category.
As I spoke to the builder offering me these sites (off market), I was running the figures in my spreadsheet.  The builder had a set price for the land and the building costs.  I jotted down the costs for the three sites, and then went to work comparing them with other dual-occupancy developments we had recently completed in the town.
Usually Property Bloom’s first aim is to achieve a high level of equity from a development for our clients. Then we look at the yield and strive for 7.5% for a dual occupancy, higher on other types of development.  Dual occupancy means building two dwellings on one lot.  We can usually achieve a good amount of equity by sourcing the land and building two villas. The villas can be attached and therefore part of a duplex or they can be freestanding.  A dual-occupancy project may typically take 12-18 months to complete (usually depending on the council processing time).
Looking at the expected equity outcome on these sites we could see it was a little low. But the real advantage in these deals was time and money; the fact that we could start building immediately and the price was fixed.
There would be no contingency required, and the builder is essentially taking up all the risk. Even hitting rock was including in the fixed, turnkey price.  Turnkey means that all landscaping, driveways, letterboxes, clotheslines, etc, is included, so you can turn the key and move in.
The other important factor was that the costs for the development application and construction certificate were included, even subdivision was included.  So all fees and charges had been paid for. I estimated there was at least $15,000 in this.  We could start building immediately.
The icing on the cake was in the terms. This builder was structuring the drawdown schedule for us so that only 10% of the build cost was paid by the time the slabs were laid and 90% on completion.
This is where my clients could save some serious holding costs.
Normally there would be five draw downs during the building works, typically at slab 20%, frames and trusses 20%, brickwork and roof 25%, interior linings/mould out 25% and completion 10%.  With 90% of the cost being paid on completion, clients will save thousands of dollars in holding costs.
If we only looked at how much equity we can create from a development, we would have passed on these opportunities, but when we look at the other valuable advantages of getting into this market quickly, high depreciation benefits, high yields and low risk then these development opportunities are attractive.
A development you can turn over quickly will allow you to move onto the next one.
Jo Chivers is director of <a href="https://www.propertybloom.com.au/">Property Bloom</a>, which manages property development.</body></html>

Saving time is saving money in property development

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Television’s architecture darling Kevin McCloud is doing the interview circuit here in Australia to promote his upcoming appearance at Melbourne’s Grand Designs Live running this weekend (September 21-23), but he hasn’t tweeted since April 19.
<a href="https://www.propertyobserver.com.au/https://twitter.com/Kevin_McCloud/status/193246510379573248" target="_blank"><img src="/images/stories/2012/09/mccloudtweet.jpg"></a>
He had been active over late 2010 and 2011 but somewhere along the interest his interest in the social media platform waned.
He joined in October 2010, “partly under duress”, as someone was impersonating him.
Grand Designs Live is billed as a “home show like no other”. The expo is running in Sydney and Melbourne, but McCloud will only be appearing in Melbourne.
The live show has been running an active Twitter account with a strong emphasis on Kevin McCloud.
<a href="https://twitter.com/GDLive_Aus" target="_blank"><img src="/images/stories/2012/09/grandtweet.jpg"></a>
He will be speaking alongside Peter Maddison, an Australian architect, who will be hosting the Australian remake of McCloud’s popular home-building television show Grand Designs.
Staff at North Melbourne cafe Twenty&amp;Six Espresso were gushing when McCloud visited their establishment.
<a href="https://twitter.com/TwentyandSix" target="_blank"><img src="/images/stories/2012/09/twentysixtweet.jpg"></a>
Peter Maddison hasn’t tweeted since June  having run his account primarily to spruik the local TV show. He tweeted 48 times between October 2010 and June this year.
<a href="https://twitter.com/P_Maddison_GDA" target="_blank"><img src="/images/stories/2012/09/madisontweet.jpg"></a>
 
The Lifestyle Channel has been posting sneak peak previews for its upcoming October season of Grand Designs, which will include <a href="https://www.youtube.com/watch?v=e3I9fIGIMl4&amp;feature=youtu.be&amp;noredirect=1" target="_blank">Mansfield</a> and <a href="https://www.youtube.com/watch?v=3HQALjVSQCs&amp;noredirect=1" target="_blank">Balnarring</a>.
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Kevin McCloud and the world of Twitter: Tweet of the day

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Veteran estate agent John McGrath has joined Twitter.
His 28th tweet caught Property Observer’s attention – McGrath commenting on a kitchen with bright white cupboards contrasting with the yellow splashback tiles. And the great yellow kickbacks too, he added.
He’s subsequently posted ?the must read: 10 Ways to Warm up Your Home for Selling.
<a target="_blank" href="https://twitter.com/johnmcgrath100"><img src="/images/stories/2012/09/mcgtweet.jpg"></a>
<a target="_blank" href="https://www.facebook.com/photo.php?pid=1484373&amp;l=245dc4d589&amp;id=265665123466132"><img width="470" src="/images/stories/2012/09/yellowkitchen.jpg"></a>
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