<a data-end="327" data-is-only-node="" data-start="250" href="https://www.apartments.com.au/developers/norus-projects" rel="noopener" target="_new">Norus Developments</a> has lodged plans for a new apartment development in Clayton that would add further momentum to the suburb's emerging Green Street corridor.

Plans have been lodged for the consolidated site at <a href="https://www.apartments.com.au/new-apartments/1359-1365-centre-road-clayton-vic-3168">1359-1365 Centre Road</a>, where Norus is seeking approval for 218 apartments across a 12-storey apartment building designed by <a href="https://www.apartments.com.au/architects/life-architecture-and-urban-design">Life Architecture</a>.

The proposal sits within the Clayton Major Activity Centre at the threshold of the planned Green Street corridor, a landscaped pedestrian connection intended to improve links through the precinct towards Clayton Railway Station.

The development would replace the site's existing collection of low-scale residential and commercial buildings with a single consolidated building, introducing significantly greater housing density to this part of Centre Road.

A retail tenancy is proposed at ground level to activate the Centre Road frontage, accompanied by transparent street interfaces and landscaping intended to create a more pedestrian-focused edge to the development.

<img alt="First look: Norus Developments plans landscape-led apartment project for Clayton’s emerging Green Street" data-entity-type="file" data-entity-uuid="0a5a763a-d9e9-4253-af2f-88008de27ebf" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Clayton%20a.png?VersionId=S2WJJbat1XVkZwB9SnYtygirXgWHiklX" />

The building has been designed with stepped massing and upper-level setbacks to manage its transition towards surrounding residential properties. The planning report describes the approach as one that integrates the building into the landscape rather than treating landscaping as a secondary element.

"A strong landscape and public realm strategy underpins the proposal," Urbis states in the planning report.

"Public benefits include an affordable housing contribution, a new pocket park, generous landscaped setbacks, deep soil planting and integrated Water Sensitive Urban Design."

The report adds that these elements are intended to create "a permeable, pedestrian-focused ground plane that enhances walkability, supports urban cooling and reinforces the emerging Green Street character."

Biophilic and passive design principles extend through the residential levels, with planting, daylight, natural ventilation and views towards landscaped areas forming part of the amenity strategy.

Parking would be concentrated away from the public realm, with 145 car spaces proposed from the rear laneway rather than dominating the Centre Road frontage.

The proposal follows an extensive pre-application process with the City of Monash. Three formal meetings were held between the project team and Council from December 2025 to March 2026, with the scheme evolving through several concept iterations before the current design was lodged.

The project arrives as Clayton prepares for substantial change around its established activity centre and the wider Suburban Rail Loop precinct. Its position on Centre Road places the development within an existing concentration of shops, services and public transport, while the Green Street connection is intended to strengthen pedestrian access towards Clayton Railway Station.

Joel Robinson

First look: Norus plans landscape-led apartment project for Clayton’s emerging Green Street

<a href="https://www.apartments.com.au/developers/gardner-vaughan-group">Gardner Vaughan Group</a> has officially commenced construction on Bronze on Chevron, celebrating the sod turning of its first-ever Gold Coast development and marking a significant milestone in the company's continued expansion across South East Queensland.&nbsp;

Following the successful delivery of premium residential developments throughout Brisbane and the Sunshine Coast, <a href="https://www.apartments.com.au/new-apartments/bronze-on-chevron-8-mawarra-street-chevron-island-qld-4217">Bronze on Chevron</a> represents Gardner Vaughan Group's entry into the Gold Coast market. Bronze will deliver 119 one, two, three and four-bedroom apartments above two ground-level retail tenancies.

[smartcode_project:default project_id=107520 project_image_fid=367193]

The recent sod turning ceremony was attended by Deputy Mayor Mark Hammel, President of the Surfers Paradise Surf Life Saving Club, Cassandra Sedgman, project consultants, purchasers, project partners and invited guests to celebrate the commencement of construction.&nbsp;

Gardner Vaughan Group Chief Executive Officer Simon Betteridge said Bronze on Chevron represented an exciting new chapter for the business.&nbsp;

"We've spent almost four decades building homes that respond to the way people want to live, and we're excited to bring that experience to <a href="https://www.apartments.com.au/developments/chevron-island-qld-4217">Chevron Island</a>," Betteridge said.

"Bronze on Chevron is particularly significant because it marks Gardner Vaughan Group's first development on the Gold Coast following many successful projects across Brisbane and the Sunshine Coast."

[smartcode_project:default project_id=107520 project_image_fid=367183]

Betteridge said the ground breaking is a proud moment for the&nbsp;team and their purchasers, who can now see their future homes beginning to take shape.&nbsp;

"As both developer and builder, we're able to oversee every aspect of the project from design through to construction, ensuring the quality and attention to detail Gardner Vaughan Group has become renowned for."&nbsp;

Designed by acclaimed architectural practice <a href="https://www.apartments.com.au/architects/cottee-parker-architects">Cottee Parker</a>, Bronze on Chevron has been thoughtfully designed to complement Chevron Island's evolving streetscape while embracing its relaxed coastal lifestyle.

The development will offer generous residences with refined interiors, premium finishes and resort-style amenities, with completion anticipated in early 2029.&nbsp;

[smartcode_project_cta:default project_id=107520]

The development will offer generous residences with refined interiors, premium finishes and resort-style amenities, with completion anticipated in early 2029

Gardner Vaughan Group breaks ground on first Gold Coast development, Bronze on Chevron

Weeks after unveiling a 63-apartment proposal for Mosman, <a href="https://www.apartments.com.au/developers/first-quadrant-properties">First Quadrant Properties</a> is back with another North Shore apartment building, this time in Neutral Bay.

The developer has lodge plans for an eight-storey apartment building directly alongside Forsyth Park. The State Significant Development Application proposes 28 apartments on a 1,434 sqm site at <a href="https://www.apartments.com.au/new-apartments/the-forsyth-3-5-yeo-street-neutral-bay-nsw-2089">3-5 Yeo Street</a>, positioning the new building to capture views across the greenery toward Sydney Harbour, the CBD and North Sydney skyline.

The project would replace the existing 12-unit apartment building at 3 Yeo Street and neighbouring house at 5 Yeo Street, known as Highmoor.

Designed by Neutral Bay-based <a href="https://www.apartments.com.au/architects/corben-architects">Corben Architects</a>, the new building will offer one, two and three-bedroom apartments. Six apartments will form the affordable housing component.

<img alt="First look: First Quadrant plans park-fronting Neutral Bay apartments" data-entity-type="file" data-entity-uuid="b8007d59-38b5-4d90-9fdc-a627ae36c137" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Yeo%20st%20da%201.png?VersionId=ukdS62_2fs6Dj.P7AEZwxQzFoODJ_4tw" />

Corben Architects has designed the building around the site's steep fall from Yeo Street down toward Forsyth Park, stepping the lowest apartments partly below street level and orienting upper floors to capture views south to the Sydney CBD and west to the North Sydney skyline.&nbsp;

The facade is articulated with cantilevered, curved rendered balconies and glazed balustrades, broken up by vertical elements marking the stair and lift cores, while sliding metal batten screens add privacy and solar control to the east and west elevations.&nbsp;

The top-floor penthouse will be clad in bronze-coloured metal, designed to read as recessive against the lighter balcony forms below.

The site adjoins Forsyth Park, a listed landscape heritage item, though a heritage impact assessment by Weir Phillips Heritage concluded the new building would not affect the park's underlying landform, bushland or recreational function, describing it instead as reading as part of the established urban edge already framing the park.

Located 295 metres from the Neutral Bay Town Centre, the site falls within the inner catchment of the Low and Mid Rise Housing policy, an area the NSW Government has targeted for increased density near shops and transport.

This planning pathway reflects the same strategy First Quadrant has recently pursued elsewhere on the Lower North Shore.

The developer last month unveiled plans for a <a href="https://www.apartments.com.au/news/nsw/first-look-another-major-apartment-proposal-signals-mosmans-development-boom">63-apartment development across nine properties at 40-56 Ourimbah Road in Mosman</a>. Designed by Doroch Architects, that proposal comprises a part eight, part nine-storey building with a gym, pool and sauna, landscaped communal areas and basement parking. First Quadrant has also recently completed Willoughby Grounds and has several other projects in planning across Sydney's North Shore.

First look: First Quadrant plans park-fronting Neutral Bay apartments

Longstanding Gold Coast and Canberra developer <a href="https://www.apartments.com.au/developers/morris-property-group">Morris Property Group</a> is continuing to roll on with its Glitter Strip apartment pipeline, seeking to return to Mermaid Beach with a new 68-apartment development.

Morris, founded by Barry Morris in 1978 and one of the Gold Coast’s most prolific apartment developers over the past two decades, has filed plans for a 12-storey mixed-use building at <a href="https://www.apartments.com.au/new-apartments/36-seabeach-avenue-mermaid-beach-qld-4218">34-36 Seabeach Avenue</a>, on the prized eastern side of the Gold Coast Highway.

The 1,227 sqm site occupies a prominent corner position at Seabeach Avenue and the Gold Coast Highway, opposite the Mermaid Plaza retail and office precinct and around 140 metres walking distance from the future Mermaid Beach South light rail station.

<a href="https://www.apartments.com.au/architects/fraser-partners-0">Fraser &amp; Partners</a> has designed the project, which will comprise 68 apartments across a mix of 48 two-bedroom and 20 three-bedroom residences.

The building will rise 12 storeys, reaching a maximum height of 36 metres, with the apartments accounting for a total of 156 bedrooms. The development application also seeks approval for short-term accommodation across the 68 apartments, while two office tenancies are proposed at ground level.

The plans show 108 car spaces across the development, with parking accommodated at ground level and within a three-level basement accessed from Seabeach Avenue.

<img alt="Seabeach Avenue and the Gold Coast Highway" data-entity-type="file" data-entity-uuid="c2175c99-12fd-4a3c-9be1-89bbf258a90d" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-20%20at%202.59.41%E2%80%AFPM_0.png?VersionId=iNLzWcE6gaAE76rafhEXfHve.4g4Se0p" />

Resident amenity will be concentrated on level two, where Fraser &amp; Partners has designed a recreation deck with a swimming pool, 90 sqm pool terrace, outdoor barbecue area and gym.

The broader communal offering will also incorporate landscaped spaces, with the planning documents noting the amenity has been designed to provide areas for recreation, social interaction and outdoor living.

The proposal would continue the transformation of the Gold Coast Highway corridor through Mermaid Beach ahead of the arrival of the light rail.

The site is zoned Neighbourhood Centre and sits within the Mermaid Beach/Broadbeach Light Rail Corridor neighbourhood plan. While the prescribed building height is 24 metres, the site is identified within an Urban Neighbourhood context providing for a 50 per cent height uplift to 36 metres.

Planning documents describe the stretch of the Gold Coast Highway between Broadbeach and Nobby Beach as increasingly characterised by medium and high-rise development, with the proposed Morris tower joining projects including Ventura, The Alfred, Oceans and Otto.

<img alt="Seabeach Avenue and the Gold Coast Highway" data-entity-type="file" data-entity-uuid="911f193f-e381-4a55-be08-58be87fcf978" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-20%20at%202.59.48%E2%80%AFPM.png?VersionId=oxVvLJaY.SOXEdXrIcogfyEXDfvCmmpM" />

The development would mark Morris Property Group's latest investment in Mermaid Beach, where it has already delivered two apartment projects.

Otto, at 1 Bondi Avenue on the western side of the Gold Coast Highway, comprises 70 apartments across nine storeys. The project was completed in 2019 and includes a residents' gym, recreation deck and swimming pool.

Morris also developed Oceans at 46 Ocean Street, a nine-storey, 70-apartment build-to-rent development completed in 2019. Oceans was the group's first build-to-rent project and incorporates commercial space at ground level.

The two existing Morris projects sit further north along the same Gold Coast Highway corridor as the proposed Seabeach Avenue development. Fraser &amp; Partners' planning analysis specifically identifies both Otto and Oceans among the established built-form precedents surrounding the site.

<img alt="Seabeach Avenue and the Gold Coast Highway" data-entity-type="file" data-entity-uuid="14925119-7b71-4812-8149-340317512c7c" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-20%20at%203.00.15%E2%80%AFPM.png?VersionId=aEJqYuw_nTCjcin17BSD0piB1EFotTlj" />

Mermaid Beach represents only part of Morris' considerable Gold Coast footprint.

The family-owned developer has been particularly active in neighbouring Broadbeach, delivering projects including Sierra Grand, Eclipse, Synergy, Qube, Koko, Opus and Malo, while its current pipeline includes Maison and the two-tower Crest development.

Further south, Morris has also developed a string of projects in Burleigh Heads, including Element, Boardwalk and Sandbar, while Essentia expanded its footprint north into Surfers Paradise.

The Seabeach Avenue application has been lodged by PMM Broadbeach Pty Ltd and seeks a development permit for a Material Change of Use for multiple dwellings, short-term accommodation and office uses. Zone Planning Group prepared the planning application, with Fraser &amp; Partners commissioned as architect.

The project comes as the developer continues to expand its Gold Coast pipeline while retaining a significant presence in Canberra. Morris now has more than $2.5 billion of development in its national pipeline and has delivered more than 7,000 homes during its near five-decade history

First look: Morris Property Group returns to Mermaid Beach with new Seabeach Avenue apartment development

<a data-saferedirecturl="https://www.google.com/url?q=https://www.apartments.com.au/developers/fortis&amp;source=gmail&amp;ust=1787272340808000&amp;usg=AOvVaw3hvFB2uWTRfEyEcpTSnnK9" href="https://www.apartments.com.au/developers/fortis" target="_blank">Fortis</a>&nbsp;is continuing its stronghold on Sydn​ey’s eastern suburbs apartment market, launching&nbsp;in September&nbsp;its latest boutique&nbsp;<a data-saferedirecturl="https://www.google.com/url?q=https://www.apartments.com.au/developments/double-bay-nsw-2028&amp;source=gmail&amp;ust=1787272340808000&amp;usg=AOvVaw0GI5S9-wNeiLUnM-d1uYkw" href="https://www.apartments.com.au/developments/double-bay-nsw-2028" target="_blank">Double Bay</a>&nbsp;development,&nbsp;<a data-saferedirecturl="https://www.google.com/url?q=https://www.apartments.com.au/new-apartments/55-william-double-bay-55-william-street-double-bay-nsw-2028&amp;source=gmail&amp;ust=1787272340808000&amp;usg=AOvVaw2YNouJQcFjiTTgVHbgDLA-" href="https://www.apartments.com.au/new-apartments/55-william-double-bay-55-william-street-double-bay-nsw-2028" target="_blank">55 William</a>.

55 William presents&nbsp;just eight north-facing&nbsp;two-bedroom, three-bedroom and full-floor&nbsp;residences to the market, priced from $4.5 million.

The upcoming launch comes just weeks after Fortis secured approval for the $80 million development, its third eastern suburbs approval in two months. Construction is already underway, with completion targeted for 2028.

[smartcode_project:default project_id=152579 project_image_fid=376250]

55 William adds to a growing concentration of Fortis projects in and around Double Bay, a market the developer has become increasingly active in over recent years.

Fortis previously completed the nine-residence Marmont on New South Head Road, while it is currently developing a mixed-use residential and retail project at 12 Cross Street. Its wider Double Bay footprint also extends into commercial and retail development.

The developer's broader Sydney residential pipeline is particularly concentrated across the eastern suburbs, with projects spanning Doub​le Bay, Ro​se Bay, Wo​ollahra, Dar​ling Point, Poi​nt Piper and Eli​zabeth Bay.

[smartcode_project:default project_id=152579 project_image_fid=376253]

At 55 William, Fortis has again turned to MHN Design Union, the architecture practice behind several of its eastern suburbs projects, while London-based 1508 London has been appointed to handle the interiors and Wyer &amp; Co the landscaping.

The six-level building will comprise a combination of two and three-bedroom apartments, including a garden residence, full-floor apartments, a sub-penthouse and penthouse. Each residence will have secure basement parking and private outdoor space.

A rooftop terrace for all residents, along with select apartments, enjoys views across Double Bay Harbour and toward the Sydney skyline.

Ceiling heights will reach up to three metres&nbsp;in select residences, while the kitchens will feature natural stone and integrated Gaggenau appliances.

&nbsp;

&nbsp;

The boutique nature of the project reflects the type of stock Fortis has increasingly targeted across Sydney's eastern suburbs, where larger apartments and smaller buildings are being pitched primarily toward local owner-occupiers and downsizers.

Fortis Group General Manager Ed Eve said the developer continues to see demand from buyers wanting to remain in the eastern suburbs but move into newer, lower-maintenance housing.

“We're seeing continued demand from local owner-occupiers and downsizers looking for high-quality homes that allow them to remain in the eastern suburbs, close to the lifestyle and community they know,” Eve said.

55 William is also one of the early projects to respond directly to the NSW Government's Low and Mid-Rise Housing reforms. Fortis had previously secured approval for just two townhouses on the 599 sqm site before revising the scheme to eight apartments following the planning changes.

Situated one street back from Double Bay's water's edge, the project enjoys an enviable harbourside setting within walking distance of Double Bay Village and the ferry wharf.

[smartcode_project:default project_id=152579 project_image_fid=376252]

Fortis has increasingly made the eastern suburbs a major focus of its Sydney pipeline. Beyond Double Bay, it recently completed the 14-residence Piper in Point Piper and has projects underway or planned across Rose Bay, Woollahra and Darling Point.

The developer recently secured approval for Verano in Rose Bay, a six-level development comprising 21 two, three and four-bedroom apartments, also designed by MHNDU.

55 William&nbsp;is soon to be release to the market with VIP appointments commencing early September,&nbsp;with residences priced from $4.5 million.

[smartcode_project_cta:default project_id=152579]

Fortis continues eastern suburbs push with 55 William launch

CBRE

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Performance in 2017 will differ markedly across the major cities throughout Australia as further divergence will occur in the hotel sector, according to CBRE’s latest report.
Some markets struggling to cope with unfavourable trading conditions and increases in supply.
However, the star performers of 2016 – Cairns, the Gold Coast, Hobart – will continue their rise off the back of renewed interest in their locale by both foreign and domestic tourists.
Figure 14 illustrates Sydney’s continued strong revenue per available room (RevPAR) growth off the back of favourable trading conditions in 2015.
<a href="https://www.propertyobserver.com.au/images/2017/02/17/Figure%2014.jpg" target="_blank">Click to enlarge</a>
<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/2017/02/17/Figure%2014.jpg" alt="">
In particular attracting a good mix of corporate and leisure tourists that enabled operators to increase room rates.
With the International Convention Centre opening in early 2017 Sydney room rates are expected to continue to climb off the back of increased corporate travel, albeit at a more moderate pace due to increases in supply.
Despite Melbourne’s strong start to the year there are signs that the market is struggling to cope with the increases in supply entering the market.
Melbourne’s strong performance historically has been largely driven by occupancy rather than room rate growth so any sign of occupancy pressure will see rates decline somewhat in 2017 before stabilising in 2018.
The resource markets of Brisbane and Perth continue to lag the rest of the nation; both saw revenue per available room (RevPAR) declines in the double digits.
The downturn in mining coincided with significant increases in supply in Brisbane which exacerbated the decline in performance.
A problem that Perth will have to contend with in the coming years as it nears the peak of the development cycle in 2018-19.
The more leisure-based destinations of Cairns, the Gold Coast and Hobart have been the star performers in the market as they continue to attract large volumes of both domestic and international visitors.
Admittedly these three markets are coming off a low base as a result of tough trading conditions pre and post GFC.
However 2016’s performance has still been impressive and is set to continue in the coming years as all three benefit from limited supply pipelines coupled with renewed tourist interest.
The year ahead will see increases in supply for the majority of key markets including Melbourne, Sydney, Brisbane and Perth.
However, they will all cope in different ways with Perth and Brisbane forecast to see further declines in hotel performance.
Whilst Sydney is expected to cope well with this increased supply, Melbourne will likely see small falls in room rates and occupancy levels.
Cairns and the Gold Coast have limited pipeline with no major new supply coming into the market in 2017.
“However, such is the interest in these regions we can expect to see developers announcing plans to enter the market, particularly the Gold Coast,” the report stated.
What will be of interest is the style of hotels that are announced in 2017 as recent trends reflect a shift towards greater tailoring of guest experiences such as Accor’s Mama Shelter or IHG’s EVEN Hotels.
In order to stand out from the crowd operators are offering unique experiences to pique interest and capture market share, particularly from the millennial generation, so we will see further announcements regarding these lifestyle brands coming to Australia.
The investment market has been dominated by overseas capital in the last three years and 2017 will likely be no different.
The current capital flight from China should continue to unfold and be the dominant source of capital in 2017 as investors seek safe-havens and long-term income generating assets.
Due to the tightly held nature of CBD markets investors will continue to look at fringe-CBD hotels as well as those in more regional locations such as Cairns and the Gold Coast.
Investors keen to move further up the risk curve will start to look at assets in Brisbane and Perth for potential counter-cyclical investment opportunities.
These markets have seen limited transaction activity over the last few years but such is the dearth of quality stock available in Sydney and Melbourne CBDs that investors may start to turn their attention back to these resource states.
<div>
Office to residential conversions have been popular with investors and developers alike over the last few years, particularly in Melbourne and Sydney.
But with the residential market showing signs of cooling, the potential for conversions earmarked for residential to change to hotels is increasing.
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j.ballantyne1990-6AQqhLzZaK

Hotel market reporting struggles with supply increase and unfavourable conditions: CBRE

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After a sustained period of growth in residential construction activity over the past five years, 2016 represented a shift in the development cycle with historical undersupply being addressed in most markets, according to CBRE’s latest report.
Sydney remains the exception; low vacancy rates (sub 2 percent) and a nation-leading level of price growth make it likely that the construction cycle with extend for longer in Sydney than in other Australian markets.
Price and rent growth eased across all capital city unit markets in 2016.
Total dwelling approvals in 2016 were 4% lower than in 2015, but as a signpost for 2017 approvals for Q416 were 14% lower than the previous corresponding period.
Approvals are losing momentum.
In light of weaker price and rent growth comes the prospect that developers may delay commencement of projects.
This is especially in markets where demand conditions are less favourable (Brisbane, Perth) or with significant supply (Melbourne), although there was little evidence of this occurring during 2016.
“We expect that less-favourable conditions in mortgage markets (higher interest rates and stricter lending requirements for some types of mortgages) and lower levels of unit rent growth will likely soften buyer demand and reduce the amount of new supply being planned in 2017,” the report stated.
Dwelling approvals are expected to slow in 2017, but unit completions are expected to reach record levels (figure 19).
<a href="https://www.propertyobserver.com.au/images/2017/02/16/Figure%2019.jpg" target="_blank">Click to enlarge</a>
<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/2017/02/16/Figure%2019.jpg" alt="">
With apartments representing 50% of expected completions (up from a historical norm of -30%), inner-city markets, where most new apartments are being built, appear most likely to experience downward pressure on rent growth as a high proportion of the new stock becomes available for rent.
Pricing already shows a narrowing gap in median values between inner-city apartments and outer suburb houses as new supply slows price growth in areas of high building activity.
This is particularly in Brisbane and Melbourne due to the concetration of apartments in the inner-city area.
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Weaker price and rent growth will result in residential project delays: CBRE

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One of the main determining factors of the overall strong hotel performance is the recent surge in the number of international and domestic tourists, according to CBRE’s latest report.
Australia has seen a steady increase in international visitors over the last decade, but in the last few years there has been rapid expansion, particularly from Asia.
Since 2009 the number of international visitors has increased by 44 percent, recently surpassing seven million annually and is forecast by Tourism Research Australia (TRA) to surpass ten million in 2020.
New Zealand remains the largest source of international visitors at over one million annually, but 2017 will see this group replaced by China as the number one source.
Chinese visitors already account for the largest share of international visitor nights at over 17%.
The domestic market has seen strong growth since 2013 – particularly in the leisure category – as a result of a weakened Australian dollar, but with recent gains against some major currencies, 2017 will likely see this rate of growth slow.
However, a mitigating factor will be corporate travel, particularly in states with strong growth in business activity and the broader economy.
Figure 15 illustrates the historical growth of a selection of major international sources of visitors over the last decade, and the shaded area is how TRA expects these countries to grow over the next decade.
China is by far-and-away the strongest growing market, with an average growth rate of 13% until 2025 when it is expected that over three million Chinese will visit Australia per year.
<a href="https://www.propertyobserver.com.au/images/2017/02/17/Figure%2015.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/02/17/Figure%2015.png" alt="">
Driving this growth of Chinese tourists will be the continued establishing of new airline routes which will be the key to harnessing the massive tourist potential of China.
This would be such as China Southern’s new route to Adelaide which is expected to bring in an over $20 million to the state economy annually.
The Chinese and Australian governments declared 2017 to be the “China-Australia Year of Tourism” with the objective to increase tourism between the two nations and also bilateral relations.
All Chinese airlines that currently fly directly to Australia have pledged support to the scheme and are opening up more routes outside of the major hubs of Beijing and Shanghai.
This will give Australians greater choice when visiting China, but more importantly for the hotel industry within Australia it will open up new resources of Chinese visitors.
Currently less than 2 percent of Chinese tourists visit Australia, and already we have seen how big an impact they have had on the hotel industry.
So if this number does double in the next 5-10 years then the hotel market will continue to see strong growth for the foreseeable future.
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Tourism the main determining factor of hotel industry performance: CBRE

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Australia’s retail sales performance was weaker in 2016, averaging 3.2% growth compared to 4.3% in 2015, according to CBRE’s latest report.
Most retail categories are underperforming their long-term averages.
<a href="https://www.propertyobserver.com.au/images/2017/02/16/Figure%207.jpg" target="_blank">Click to enlarge</a>
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A two-tier market is evident with international retailers expanding while some incumbent, domestic retailers are under pressure.
“Conditions in 2017 are expected to be slightly more challenging than in 2016; we expect only moderate rent growth of between 1%-2% across most retail property categories,” the report stated.
"Australian retailers have faced various challenges in the post-GFC period. First the GFC and then weak trading conditions from 2010 to 2013 caused many retailers to reduce operating costs and undertake consolidation.
"Then as these challenges were beginning to fade, the last three years saw new competition aggressively emerging from international brand entrants, who continue to gain market share, resulting in profit margin pressures for domestic retailers."
Competition has seen closure of over 10,000 retail businesses since 2010. The success of some international brands has been their ability to offer diversity of products at competitive pricing.
<a href="https://www.propertyobserver.com.au/images/2017/02/16/Figure%208.jpg" target="_blank">Click to enlarge</a>
<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/2017/02/16/Figure%208.jpg" alt="">
The entry of fast fashion international retailers has coincided with weaker sales performance of incumbent department stores and discount department stores over the past three years.
In the face of tougher conditions, some domestic retailers have responded by altering their offering to remain competitive.
For example, Myer and David Jones have closed underperforming stores and have adopted new store formats (downsized stores, fewer products and better quality) for existing and new stores.
Other retailers including some discount department stores have been slower to adapt and are reportedly facing less certain futures.
"A combination of factors are acting as headwinds for retail," the report says.
Over the past decade spending per capita grew a mere 0.6% per annum, and households aren’t funding consumption with debt to the extent they were prior to the GFC."
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Population growth slowed to 1.4% annually over the last two years compared to 2% between 2004-2013.
"The combination of these factors will contribute to slower retail sales growth in 2017, and with an expected increase in international brands, domestic retailer profit margins are likely to incur further pressure,” the report stated.
"We have already seen profit margins fall for discount department stores (except for Kmart which has reset its strategy), apparel retailers and supermarkets during the past five years."
According to company reports of most listed retail companies, the sectors with the most negative outlooks are supermarkets and homewares and department stores.
Health and beauty and sporting retailers have a more positive outlook. Although retail trade growth was lower overall in 2016, there was positive news in the increase in spending in cafes, restaurants and takeaway food.
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This suggests a preference shift to eating out, and this category has also benefitted from higher volumes of international tourists.
Lifestyle preferences such as convenience and shopping experience (especially amongst younger demographics) are driving upgrades in food courts and higher quality food offerings.
As a result, eating out is on average costing more but is being supported by consumer preference.
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International brands putting local retailers under the pump: CBRE

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The office market in 2016 witnessed more divergence between the southeast markets and the resource-based states with the trend likely to continue in 2017, according to commercial real estate firm CBRE’s latest report.
Strong economic growth in New South Wales and Victoria led to increased demand in the office sector.
Queensland and Western Australia continued to lag, although Brisbane has stabilised and will be on the road to gradual recovery in 2017, while Perth is expected to bottom.
Office markets in Sydney and Melbourne performed well in 2016. Sydney CBD, in particular, outperformed with its strongest level of net effective rental growth in over 20 years.
Net effective rents (NER) grew 25 percent in the prime grade sector.
The Sydney CBD secondary grade office market set new records in 2016: vacancy fell to record lows, NERs grew 32 percent and indicative secondary rents topped $600/sqm for the first time ever.
Stock withdrawals affected the secondary market more significantly, helping deliver these results.
The prospect of limited supply over the next three years, strengthened by high withdrawal activity, in conjunction with steady growth in the services sector will continue to keep vacancy constrained.
The Melbourne CBD office market set new records in 2016 in terms of investment metrics.
Prime and secondary yields reached new lows at 5.5 percent and 6.2 percent respectively, and the spread between the two grades narrowed to a record level.
Further, albeit minor, compression is expected in H117 before yields bottom.
VIC’s strong economic growth drove white collar employment (WCE) and thus demand for office space.
Melbourne CBD achieved the highest level of positive net absorption of all states over 2016 with 117,253 sqm.
Most of this strength was captured in the last half of 2016 and resulted in vacancy declining to 6.4 percent at year end.
This helped the Melbourne CBD market achieve NER growth after four years of declines due to rising incentives.
A combination of above-average face rental growth and slight easing of incentives saw prime and secondary NERs grow 7.2 percent and 6.3 percent respectively in 2016.
"With limited supply in 2017 and demand expected to remain healthy, we forecast further NER growth in 2017 (Figure 2),” the report said.
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The QLD economy has overcome the drag of the LNG CAPEX unwind and returned to growth in 2016.
“We expect further gradual improvements in 2017,” the report stated.
The advancement towards a possible 2017 construction start for the $21.7 billion Carmichael mine project by Adani has provided some confidence to the medium-term outlook, although the project represents only a fraction of activity sparked by the three recent LNG projects.
Brisbane CBD vacancy peaked in 2016 but then tightened to 15.3 percent by year-end due to its strongest annual absorption ever recorded (94,601sqm).
The latest supply cycle has completed and 2017-18 is expected to see low levels of supply in the CBD and Near City markets.
“We forecast a gradual fall in vacancy despite the strong absorption outcome in 2016, partly due to at least two further major tenant relocations to the Near City market,” the report said.
The Perth CBD office market appears to be approaching the bottom of the cycle: vacancy has probably peaked at 22.5 percent, leasing activity has picked up, and the rate of rental decline slowed substantially over 2016, with Q416 net face and effective rents remaining static.
The market is starting to benefit from tenant migration from fringe and suburban locations as businesses take advantage of lower rents and higher incentives by upgrading accommodation in a flight-to-quality.
This has led to an increase in the number of CBD leasing transactions.
The SA economy in 2016 was bolstered by public investment and also surprising growth in private consumption and retail trade.
These impacts will pass in 2017 and economic growth will moderate. The Adelaide office market remains steady with vacancy hovering at around 16%.
“Net absorption was weak in 2016 and we don’t expect much improvement in 2017,” concluded the report.
Limited supply (in the form of refurbishments) will help the vacancy rate tick slightly lower.
The ACT recorded the highest growth in State Final Demand of all the state and territories in the year to Q316, which supported Canberra CBD white collar employment growth of 3.4 percent over the same period, more than any other CBD market in Australia.
Limited new supply has resulted in vacancy trending downward since 2015 – a trend expected to continue over the medium term, posing a favourable outlook for the Canberra market.
Although softer tenant demand is expected in major office markets in 2017, the outlook for Australia’s office sector is favourably impacted by the lowest level of net supply additions in 20 years.
National CBD vacancy will begin to trend down and we forecast it to reach 9.8 percent by year-end 2017.
CBRE Research’s near-term view of office market return expectations (annualised 3-year NER growth plus yield as at December 2016) for each market is illustrated in Figure 3.
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“This return calculation assumes static yields so paints a clear picture of our NER growth expectations.  "We forecast that the best performing markets in Australia will be: Melbourne CBD, Macquarie Park, Parramatta, Canberra CBD and Sydney CBD,” the report concluded.
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New South Wales and Victoria economic growth leads to increased office demand: CBRE

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Demand from office occupiers is evolving, as revealed in CBRE’s 2016 Australia Occupier Survey, and CBRE expects to see further evidence of this demonstrated in leasing activity in 2017, according to CBRE’s latest report.
The survey targeted 100 large commercial occupiers throughout Australia across a broad range of industries to find out which factors are driving occupiers future real estate strategies.
People, technology and the new economic order are changing our approach to work and thus the concept of how, when and were we work.
This structural shift will increasingly impact on leasing decisions when considering location, building selection, workplace format, quality of building services and amenities, and the customer experience offering.
Occupiers identified consolidation, change of workplace format and growth as the top three real estate strategies they plan to implement in the next three years in order to drive their overall business strategy.
Cost continues to outpace other considerations as the most important factor in the real estate location/building selection decision.
Cost reductions are important to occupiers and rationalising space in a way to achieve this, with a focus on reviewing requirements beyond their current lease.
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Occupiers cited as key objectives for their future real estate strategy:
. Implementing more-flexible work practices through a new workplace format
. Reducing corporate footprint
. Increasing utilisation rates
From the survey, 57 percent of occupiers expected to increase their staff headcount by 2018 but only 22 percent plan to increase their net lettable area.
This will ultimately translate into more people in less space. The average workspace ratio is predicted to decrease by 5.5 percent as a result.
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As businesses look to consolidate and change their workplace formats to achieve greater space utilisation rates, an efficient floorplate will be key in supporting these goals.
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Occupier demand is evolving as workplace strategies change: CBRE

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Foreign investment played a key role in underpinning demand for new housing stock in 2016, according to CBRE’s latest report.
That said, overall levels of offshore capital for residential investment eased in 2016 from the very high levels experienced in 2015, the agency noted.
Higher stamp duties applicable to source local debt, tighter enforcement of monetary caps on Chinese capital outflows and general concerns about apartment oversupply contributed to softer foreign investment in 2016.
Foreign investment sales turnover for the Sydney development site market declined by 50% in the 12 months to June 2016.
Despite the slowdown, Australia remains an attractive long-term proposition for foreign investment.
Foreign buyers, although motivated by rental returns, value other factors such as political stability, personal safety, education and low air pollution when assessing investment locations and Australia ranks very highly on these measures.
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Although 2016 saw a combination of factors that could impede demand from foreign investors, we are not forecasting a material jump in settlement defaults for off-the-plan apartments.
Settlement default has traditionally been low in Australia (sub-2 percent).
A tougher lending environment makes it likely that settlement periods will be extended and some increase in default will occur.
But the emergence of new lenders absorbing foreign buyer debt demand and the substantial cost of default (i.e. forgoing deposits) will limit the number of buyers defaulting in settlement.
Furthermore, conditions in domestic labour markets are unlikely to deteriorate to the extent that settlement defaults will increase markedly amongst domestic buyers.
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Settlement defaults to increase from low occurance in OTP housing market: CBRE

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Housing affordability has become a key concern in Australia, according to CBRE’s latest report.
Housing price growth over the past few years in markets such as Sydney and Melbourne have been well in excess of rent growth and household income growth.
Historically low interest rates have facilitated this strong price growth and consideration should be lent to the potential impact on pricing when interest rates rise again.
"Our modelling indicates that Sydney households would experience an 8ppt increase in mortgage repayments (as a proportion of median household income) if interest rates increase by 1ppt," the report advised.
The impact is less in other markets (figure 21) but considerable nonetheless.
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"We expect that when interest rates do begin to rise (unlikely before 2018) that price growth in Sydney and Melbourne is likely to slow the most, partly closing the price gap that has expanded over other markets in recent years," the report stated.
Sydney building approvals are expected to decline in 2017 as more supply enters the market.
However, the housing construction boom should last longer than in other states because dwelling approvals are holding up better and the market isn’t oversupplied.
The outlook for Melbourne and Brisbane inner city markets is similar: soft rental markets due to new supply will result in sharper reductions in building approvals than nationally and prices for apartments will soften in response to high supply.
Perth remains constrained by softening population growth and weak statewide economic performance.
Oversupply will remain a feature of the Perth rental market during 2017 but price declines are expected to be less than 2016 levels.
Adelaide building approvals are likely to decline as a soft employment outlook limits the potential for population growth.
Canberra building approvals are expected to ease in 2017 as tougher lending conditions impact investor demand.
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Housing affordability still a key concern for Australia: CBRE

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The Coles supermarket in the NSW Southern Highlands town of Moss Vale has been sold to MPG Funds Management for $9.45 million.
Located at 13-19 Kirkham Street, the property comprises a 2,500 square metre freestanding Coles supermarket – the only full line supermarket servicing the catchment.
The property, which is situated on a 7,199 square metre strata title site, is currently leased to Coles until 2025, generating an estimated income of $561,547 per annum.
CBRE’s Justin Dowers and Nick Willis, who negotiated the sale on behalf of a private Victorian investor, said the sale reflected one of the strongest freestanding supermarket transactions in New South Wales this year translating to a yield of 5.9%.
MPG Funds Management’s Brett Gorman said the property’s strong tenancy profile presented an attractive addition to the MPG Retail Brands Property Trust, which targets well-known tenants on long term leases.
The sale follows the recent transaction of Dan Murphy’s in Wagga Wagga through CBRE on a 5.3% yield to a private Sydney based investor.
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Coles in Moss Vale sells for $9.45 million

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Three healthcare and retirement living professionals have joined CBRE to form a new Capital Markets division.
Philip Smith, Shane Nicholson and George Koumoukelis have been recruited from Colliers International to launch the Capital Markets Healthcare &amp; Retirement Living team in CBR.
The specialist team will be led by Mr Smith in a National Director role, based in Brisbane, with Mr Nicholson taking on a Director role based in Sydney.
George Koumoukelis will take the role of Senior Negotiator, based in Sydney.
CBRE’s Pacific president, Ray Pittman, (pictured above) said the new team will work in tandem with the existing Valuation &amp; Advisory Services professionals focused on the Healthcare &amp; Retirement sector. 
“We envisage significant opportunities ahead, in line with the growth that has occurred in the U.S., where Healthcare &amp; Retirement Living is one of our biggest businesses,” he said.
Bruce Baker, CBRE executive managing director, Capital Markets,  aid the formation of this team was also particularly timely in light of the unprecedented changes forecast for the Australian aged care sector as a result of recently announced Federal Government expenditure cuts. 
“These changes are expected to provide the catalyst for industry consolidation and higher transaction volumes in the coming years,” he said. 
“Appointing Philip, Shane and George positions us to be at the forefront of these changes.
"Healthcare specific property is globally recognised as a very attractive investment grade asset class and we are seeing significant interest in this sector from the major Pacific REIT’s and wholesale funds."
Several senior directors of CBRE quit the estate agency late November.
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