<p><a href="https://www.apartments.com.au/developers/s-p-setia">SP Setia</a> has lodged plans for a $750 million, three-tower mixed-use precinct that would complete the long-running redevelopment of Carlton's former Carlton United Breweries site.</p>

<p>The proposal at <a href="https://www.apartments.com.au/new-apartments/185-195-queensberry-street-carlton-vic-3053">46-78 Bouverie Street and 185-195 Queensberry Street</a> spans a 6,468 sqm site, the last remaining undeveloped parcels within the former brewery's 2007 masterplan.</p>

<p>Designed by <a href="https://www.apartments.com.au/architects/cox-architecture">COX Architecture</a>, the development will comprise two purpose-built student accommodation towers and a third build-to-sell apartment tower above a shared commercial podium and basement.</p>

<p>Across the three towers, SP Setia is proposing 606 build-to-sell apartments and 1,499 student accommodation units containing 2,009 beds.</p>

<p>The apartments will sit in the tallest tower, which will rise nearly 200m and 55 storeys. It will become&nbsp;one of the more substantial new build-to-sell apartment projects at the northern edge of Melbourne's CBD.</p>

<p>The apartment mix is weighted toward smaller inner-city product, with 188 studios, 206 one-bedroom apartments, 192 two-bedroom apartments and 20 three-bedroom apartments</p>

<p><img alt="First look: SP Setia plans three-tower finale for Carlton’s former CUB precinct" data-entity-type="file" data-entity-uuid="8271bc87-1b0a-41b7-ac73-a425ee375261" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/3_2.png?VersionId=G4lw23o90B1boX4k4dj7rdz2ZEajS9wy" /></p>

<p>Part of the precinct will be a large-scale&nbsp;3,684 sqm supermarket and a further 2,198 sqm of speciality retail, creating close to 5,900 sqm of new commercial space within the precinct.</p>

<p>But one of the biggest components of the proposal is what sits between the buildings.</p>

<p>Around 4,650 sqm, or roughly 72 per cent of the site, will be publicly accessible open space, incorporating plazas, pedestrian connections, landscaped laneways and retail spill-out areas.</p>

<p>The ground plane is intended to finally complete pedestrian connections envisaged when the CUB masterplan was first approved nearly two decades ago, stitching together Victoria Street, Queensberry Street, Bouverie Street and Swanston Street through the former brewery precinct.</p>

<p>Urbis said the development would "complete the CUB precinct", with the public realm providing important north-south and east-west connections through what is currently the final undeveloped portion of the masterplanned site.</p>

<p>SP Setia is also exploring a new linear park within the Bouverie Street road reserve, with the concept to be developed further with the City of Melbourne through the planning process.</p>

<p>The proposal is being pursued through the Victorian Government's Development Facilitation Program under Clause 53.23 for significant residential development with affordable housing.</p>

<p>The planning report acknowledges the proposed heights exceed those contemplated under the original Comprehensive Development Plan and masterplan, but argues the built-form context has changed considerably over the past two decades.</p>

<p>Urbis said the three towers would instead create a stepped transition between Carlton and the Hoddle Grid, rising progressively from the 94.1-metre Tower One along the Queensberry Street edge to the 199.44-metre Tower Three closer to the established CBD-scale buildings to the south.</p>

<p><img alt="SP Setia" data-entity-type="file" data-entity-uuid="e885a07a-592c-40fc-bf82-e6dbaf32da54" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-21%20at%208.52.24%E2%80%AFAM.png?VersionId=7s_ErUkSKAdY1mAWp3GRZgMNCGtwhk5m" /></p>

<p>SP Setia plans to deliver the development across three stages.</p>

<p>Stage One would deliver the basement, podium and retail areas for the entire precinct alongside the first student tower. Tower Two would follow in Stage Two, before the 606-apartment Tower Three is delivered as the final stage.</p>

<p>If approved and delivered, the project would close out a redevelopment process that has been underway since the former brewery masterplan was approved in 2007, adding more than 2,600 student beds and apartments to a precinct already home to Swanston Central, the Barak Building, RMIT Design Hub and several large student accommodation developments.</p>

<p>&nbsp;</p>

<p>&nbsp;</p>


Joel Robinson

SP Setia plans three-tower finale for Carlton’s former CUB precinct

<p>Melbourne developer Lowe Living is seeking to add to its growing bayside apartment pipeline, filing plans for a boutique eight-residence development in tightly held Middle Park.</p>

<p>Lowe Living, which has built much of its development portfolio across Melbourne's affluent bayside and south-east suburbs, is behind the plans for the 730 sqm site at <a href="https://www.apartments.com.au/new-apartments/123-125-erskine-street-middle-park-vic-3206">123-125 Erskine Street</a>, just off Armstrong Street and within the Armstrong Street Neighbourhood Activity Centre.</p>

<p>The developer is seeking approval for a five-storey residential building above two basement levels, with just eight large-format apartments and 18 car spaces.</p>

<p>“This is a deliberately very different proposition for us,"&nbsp;Tim Lowe, Co-Founder of Lowe Living, said.</p>

<p>"Eight residences is exceptionally boutique, but that's precisely what this site calls for.</p>

<p>“There is a strong community in Middle Park and the surrounding suburbs who have spent decades building a life here. They no longer want the maintenance of a large period home, but they aren't prepared to compromise on space, quality or location. We think there is a real opportunity to capture that hyper local market. A site like this rarely comes to market.”</p>

<p><img alt="Lowe " data-entity-type="file" data-entity-uuid="875fe572-0f14-4d90-9e11-55b28dd07731" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-21%20at%208.42.49%E2%80%AFAM.png?VersionId=GDNQRv9BfpR9r1zkZ5UDyUM4ZvpIksut" /></p>

<p>The low-density proposal has been designed by Cera Stribley and is being progressed through the Victorian Government's Great Design Fast Track pathway, having already secured eligibility from the Minister for Planning.</p>

<p>The Office of the Victorian Government Architect supported its eligibility after finding the proposal demonstrated consistency with the program's seven design principles, while the project's financial feasibility has also been independently confirmed by Invest Victoria.</p>

<p>The project is targeting the downsizer market, with the planning documents describing the homes as larger-format residences and noting the two penthouses could otherwise have been configured as four separate apartments.</p>

<p><img alt="Lowe 2" data-entity-type="file" data-entity-uuid="60ab0987-2da6-4175-adac-315dcf6053c6" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-21%20at%208.43.15%E2%80%AFAM.png?VersionId=bOCPH0B2MFwlmaRW.TTCF9TzyifgVoQI" /></p>

<p>The site has dual frontage to Erskine Street and Canterbury Place and currently comprises a collection of commercial buildings used as offices, including a former heritage bakehouse, a former stable, a later gabled addition and a central courtyard.</p>

<p>It sits within the Commercial 1 Zone and the Armstrong Street Commercial Precinct heritage overlay, with the existing property classified as a contributory heritage place.</p>

<p>Heritage has subsequently played a significant role in Cera Stribley's design.</p>

<p>The front section of the former bakehouse facing Erskine Street will be retained, including its return walls, street-facing hipped roof and chimneys, while the Erskine Street façade and part of the western return wall of the former stable will also be incorporated into the new development.</p>

<p>Levels four and five will be set back five metres from the retained stable façade, while bricks removed through demolition are proposed to be salvaged and reused within the new building where possible.</p>

<p><img alt="Lowe 3" data-entity-type="file" data-entity-uuid="e97927a9-a2de-4a0f-83b6-65451238abfa" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-21%20at%208.43.06%E2%80%AFAM.png?VersionId=VR44AChLrX9q1XPB9GvVQV.ALXXbe4gC" /></p>

<p>Rather than presenting as a single five-storey building to Erskine Street, Cera Stribley has broken the development into a series of distinct forms.</p>

<p>A three-storey infill element will sit between the retained bakehouse and stable façades, with the upper levels recessed behind the heritage fabric. Canterbury Place will similarly feature two three-storey podium forms, separated by a central pedestrian accessway, before the upper two levels step back from the street.</p>

<p>A pedestrian through-link will run through the centre of the project between Erskine Street and Canterbury Place, creating entrances from both sides of the site and introducing landscaping and communal areas through the ground plane.</p>

<p>Landscape architect Acre has designed planting across the ground level, private terraces and upper levels, including a feature canopy tree at level three and integrated planting and arbours across the level four terraces. Five existing Erskine Street trees are proposed to be retained.</p>

<p>Sustainability is also a significant component of the Great Design Fast Track application. The apartments are targeting an average eight-star NatHERS rating, with no residence below 6.5 stars, while the project has achieved a 75 per cent BESS score. Seven of the eight apartments are designed for cross-ventilation, with the remaining residence using mechanically assisted natural ventilation.</p>

<p>The plans also incorporate an 8kWp rooftop solar system, a 5,000-litre rainwater tank and infrastructure allowing future electric vehicle charging for every residence.</p>

<p>Lowe has a strong portfolio across Melbourne's blue-chip suburbs. They recently launched <a href="https://www.apartments.com.au/new-apartments/jardin-house-by-lowe-living-camberwell-335-camberwell-road-camberwell-vic-3124">Jardin House by Lowe Living</a> in Camberwell, their first development in the Stonnington LGA.</p>


Lowe Living unveils Middle Park apartment development

<p data-end="288" data-start="269"><strong data-end="288" data-start="269">Article summary</strong></p>

<ul data-end="888" data-start="289">
	<li data-end="442" data-section-id="8tsh6o" data-start="289"><strong data-end="374" data-start="291">DVB Projects is preparing to launch its second Gold Coast apartment development</strong>, with demolition now underway at 137 Old Burleigh Road, Broadbeach.</li>
	<li data-end="573" data-section-id="1nyxl3e" data-start="443"><strong data-end="513" data-start="445">The 34-level tower will comprise just 49 ultra-luxury residences</strong>, including half-floor, full-floor and penthouse apartments.</li>
	<li data-end="717" data-section-id="oiyimj" data-start="574"><strong data-end="646" data-start="576">The launch follows strong demand at DVB's nearby Sea Glass project</strong>, which is more than 50 per cent sold and currently under construction.</li>
	<li data-end="888" data-section-id="epk9o9" data-start="718"><strong data-end="787" data-start="720">The development adds to the transformation of Old Burleigh Road</strong>, with premium beachfront apartment projects continuing to reshape the tightly held Broadbeach strip.</li>
</ul>

<p data-end="1011" data-start="790"><a href="https://www.apartments.com.au/developers/dvb-projects">DVB Projects</a> is preparing to launch its second Gold Coast apartment development, with demolition now underway on the Broadbeach site as the Sydney developer moves closer to bringing the ultra-luxury project to market.</p>

<p data-end="1296" data-start="1013">The 34-level tower at <a href="https://www.apartments.com.au/new-apartments/137-old-burleigh-road-broadbeach-qld-4218">137 Old Burleigh Road</a> will comprise just 49 residences, ranging from half-floor apartments through to full-floor homes and a penthouse. The launch follows the strong sales performance of DVB's nearby Sea Glass development. More than half of the apartments at Sea Glass, on the other side of Broadbeach, have been snapped up, well ahead of its late 2027 completion</p>

<p data-end="1296" data-start="1013"><img alt="DVB Projects to commence demolition on $320m Broadbeach luxury tower" data-entity-type="file" data-entity-uuid="2944b4be-c84e-4b54-8dc1-c712e76704c0" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/E02_Exterior_Street%20Level%20Entrance.jpg?VersionId=YoNig7pRdrE3HCue7sUj78LzJteeQf3H" /></p>

<p>The start of demolition at 137 Old Burleigh Road signals DVB Projects’ underlying confidence in the Gold Coast’s luxury beachside apartment sector.</p>

<p>“We see the Gold Coast as one of the most compelling lifestyle markets in Australia, particularly at the premium end where demand continues to deepen,” said Dean Brown, Managing Director of DVB.&nbsp;</p>

<p>“This project has been carefully designed to respond to that demand - delivering large-format residences with a level of quality, privacy and amenity that is still relatively rare in the apartment market on the beachside."</p>

<p>Brown says the site itself is "exceptional."</p>

<p>"Old Burleigh Road is one of the most tightly held beachfront strips, and opportunities to deliver a project of this scale and calibre in this location are extremely limited.”</p>

<p><img alt="DVB Projects to commence demolition on $320m Broadbeach luxury tower" data-entity-type="file" data-entity-uuid="398f377a-c037-455e-9250-0c5e0d84c35b" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/I12_FF%20Balcony.jpg?VersionId=NwOiRWGMubR1c8wthuEfggklcja7al9." /></p>

<p>The project will comprise 40 half-floor residences of approximately 260 sqm, alongside eight full-floor residences spanning around 524 sqm.</p>

<p>A single penthouse will crown the building, featuring a private pool, barbecue area, indoor gym and dedicated entertaining spaces.</p>

<p>Residents will have access to a resort-style suite of amenities, including a 20-metre pool with daybeds, a gymnasium, hot and cold plunge pools, a sauna, and private residents’ lounge and dining facilities.</p>

<p><img alt="DVB Projects to commence demolition on $320m Broadbeach luxury tower" data-entity-type="file" data-entity-uuid="d1642bb0-9a66-4427-a022-dfc0988c6287" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/A02_Pool%20to%20View.jpg?VersionId=c0IXPyn_Gp_Kn3XCwzMrqIVkAdCEwVXP" /></p>

<p>Sales agent Todd Matheson, of <a href="https://www.apartments.com.au/project-marketer/pezet-matheson">Pezet Matheson</a>, which is marketing both 137 Old Burleigh Road and Sea Glass, said 137 Old Burleigh Road would address a clear gap in the market for genuine luxury products.</p>

<p>“There are very few opportunities on the Gold Coast where buyers can secure a residence of this size and quality in a new building,” Matheson said.</p>

<p>“What we’re seeing is a growing cohort of downsizers and interstate buyers who still want space - they’re not willing to compromise on living area, entertaining or finishes.</p>

<p>“This project has been designed with that buyer in mind. It offers the scale of a home, combined with the convenience and security of apartment living, in one of the coast’s most desirable positions.”</p>

<p><img alt="DVB Projects to commence demolition on $320m Broadbeach luxury tower" data-entity-type="file" data-entity-uuid="59aae0ca-5639-4320-8aca-d0bf60f48e43" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/E01_Exterior%20Hero.jpg?VersionId=DS8Zfy2WtgUEtdfe0TEUuf1W1GfcZq8S" /></p>

<p>Located on a 1,156 sqm site one block from the beachfront, the development will replace an ageing walk-up building and is expected to contribute to the ongoing transformation of the Old Burleigh Road strip into one of the Gold Coast’s most prestigious residential corridors.</p>

<p>With the development moving into the delivery phase, 137 Old Burleigh Road is slated to hit the market later this year.</p>

<p>[smartcode_project_cta:default project_id=145141]</p>


DVB Projects to launch second Broadbeach apartment tower as demolition commences

<p><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.</p>

<p>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>.</p>

<p>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.</p>

<p>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.</p>

<p>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.</p>

<p><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" /></p>

<p>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.</p>

<p>"A strong landscape and public realm strategy underpins the proposal," Urbis states in the planning report.</p>

<p>"Public benefits include an affordable housing contribution, a new pocket park, generous landscaped setbacks, deep soil planting and integrated Water Sensitive Urban Design."</p>

<p>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."</p>

<p>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.</p>

<p>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.</p>

<p>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.</p>

<p>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.</p>


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

<p><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;</p>

<p>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.</p>

<p>[smartcode_project:default project_id=107520 project_image_fid=367193]</p>

<p>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;</p>

<p>Gardner Vaughan Group Chief Executive Officer Simon Betteridge said Bronze on Chevron represented an exciting new chapter for the business.&nbsp;</p>

<p>"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.</p>

<p>"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."</p>

<p>[smartcode_project:default project_id=107520 project_image_fid=367183]</p>

<p>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;</p>

<p>"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;</p>

<p>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.</p>

<p>The development will offer generous residences with refined interiors, premium finishes and resort-style amenities, with completion anticipated in early 2029.&nbsp;</p>

<p>[smartcode_project_cta:default project_id=107520]</p>


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

Construction

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<div class="column"><span style="line-height: 1.3em;">GUEST OBSERVER</span></div>
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<div class="column"><span>Dwelling approvals may have eased in August but it was largely driven by the volatility in apartment approvals. More encouragingly house approvals lifted by healthy 4.4 per cent August. From a longer term sense the lift in home building over the past couple of years has been extraordinary. </span></div>
<div class="column"><span> </span></div>
<div class="column"><span>Over the past year a record 225,406 new homes were approved – a boom that will continue to support economic activity over the next 12-18 months. Interestingly with the tightening in bank lending standards and news of another bank pulling back from investor loans in the last day, it is pretty clear that the lift in supply should result in a much more balanced housing sector.</span></div>
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<span>There is no housing bubble, rather an imbalance between supply and demand in key markets like Sydney and Melbourne. When demand exceeds supply, prices can soar at an unsustainable rate. But the homes are being built to meet demand, it just takes time. Investors clearly must tread warily.</span><br><p>Private sector credit remains healthy with lending lifting by 0.6 per cent in August. From an annual sense, credit growth is holding at the best levels in over six years. The key driver remains housing and in that context it is investor housing in particular that has driven the strength.</p>
<p>Investor finance is up 10.7% on a year ago. However it is <span>likely that investor demand eases over the coming year.</span></p>
<span>More encouraging was the lift in business credit. There is no doubt that businesses are still rather tentative but the lift in borrowings is certainly encouraging and resonates with the lift in business confidence and conditions. The key driver of future lending will be an ongoing improvement in labour market conditions, rise in business hiring intentions and lift in consumer confidence.<br><br></span><span>The disappointment in the latest result lies with the consumer borrowings which have been weak for the most part of this year. Interestingly the consumer credit figures may not be painting a true picture with some home owners likely to dipping into home equity to borrow at cheaper rates, rather than tapping personal </span><span>loans. </span>
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<p><span>What do the figures show?</span></p>
<p><span>Building Approvals:</span></p>
<p><span>Dwelling approvals fell by 6.9% in August after rising by 7.9% in July. In trend terms, approvals fell by 0.7% in August.</span></p>
<p><span>House approvals rose by 4.4% in August (private sector rose 4.9%). Meanwhile ‘lumpy’ apartment approvals fell by 16.9% in August after rising by 20% in July. Private sector apartment approvals fell by 11.4% in August.</span></p>
<p><span>Dwelling approvals are up 5.1% on a year ago with house approvals up by 2.2% while apartments are up by 8.4%.</span></p>
<p><span>Across states and territories in August: NSW approvals rose by 27.1%; Victoria rose by 8.3%; Queensland fell by 17.2%; South Australia fell by 8.1%; Western Australia fell by 1.1%; Tasmania fell by 24.7%. In trend terms, approvals rose by 7.3% in the Northern Territory and rose 4.4% in the ACT.</span></p>
<p><span>The value of all commercial and residential building approvals fell by 5.6% in August after rising by 9.2% in July. Residential approvals fell by 3.5% with new building down by 3% while alterations &amp; additions fell by 7.9%. Commercial building fell by 10.1% in August but was still up by 6.6% over the year (up 10.6% over the year in trend terms).</span></p>
<p><span style="line-height: 1.3em;">Private sector credit</span></p>
<p><span>Private sector credit (lending) rose by 0.6% in August after a 0.6% gain in July. Annual credit </span><span style="line-height: 1.3em;">growth rose from 6.1% to 6.3% – a 61⁄2-year high.</span></p>
<p><span>Housing credit grew by 0.6% in August after a similar rise in July. Housing credit is up 7.5% on a year ago – the strongest annual growth since September 2010.</span></p>
<p><span>Owner occupier housing credit rose by 0.6% in August to stand 5.6% higher than a year ago – the fastest annual growth since January 2012. Investor housing finance lifted 0.7% in August. Investor housing credit was up by 10.7% over the year.</span></p>
<p><span>Personal credit rose by 0.1% in August after a flat result in July. Personal credit was up 0.7% over the year.</span></p>
<p><span>Business credit rose by 0.5% in August. Business credit is 5.3% higher than a year ago.</span></p>
<p><span>Term deposits held with banks fell by $2.2 billion in August to $509.9 billion. Term deposits are down 5.7% on a year ago – the sharpest decline in 12 years. Term deposits have been regularly falling in annual terms for 21 months – the longest period in records going back almost 30 years.</span></p>
<p><span style="line-height: 1.3em;">What is the importance of the economic data?</span></p>
<p><span>Private sector credit figures are released by the Reserve Bank on the last working day of the month. Credit is separated into three categories – housing, other personal and business. </span></p>
<p><span>Private sector credit is effectively the amount of loans outstanding in the economy. If growth in lending is strong then it suggests that credit from financial institutions is freely available, underlying demand for assets such as cars and houses is firm and that the price of credit (interest rates) is attractive.</span></p>
<p><span>The Bureau of Statistics' monthly Building Approvals release contains figures on local council approvals to build residential structures such as homes and units as well as commercial premises such as offices and shops. Approval is one of the first stages of the construction ‘pipeline’ and is thus a key leading indicator of future activity. An increase in approvals would point to stronger future activity for </span><span style="line-height: 1.3em;">construction-related companies.</span></p>
<span style="line-height: 1.3em;">What are the implications for interest rates and investors?</span><br><p><span>The home building boom will support the economy over the next 12-18 months, and the benefits will last longer in Sydney given that high rise apartments take longer to build.</span></p>
<p><span>The Reserve Bank is unlikely to shift interest rates in any direction. Rather an extended period of time on the sidelines is the most likely outcome. </span></p>
<p><a href="/images/2015/09/30/Screen%20Shot%202015-09-30%20at%202.13.38%20PM.png" target="_blank"><span>Click to enlarge</span></a></p>
<p><span><img src="/images/2015/09/30/Screen%20Shot%202015-09-30%20at%202.13.38%20PM.png" alt=""></span></p>
<p> <em>Savanth Sebastian is an economist for <a href="https://www.commsec.com.au" target="_blank">CommSec</a>. </em></p>
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jchancellor-FAypfDUnLy

There is no housing bubble: CommSec's Savanth Sebastian

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<div><span>Melbourne developer Kalex will release pre-sales late September of their 26 apartment project 166 Gertrude in Melbourne's Fitzroy.</span></div>
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<span><span>166 Gertrude will include </span></span><span style="line-height: 1.3em;">26 one-, two- and three-bedroom residential apartments, priced from $580,000 to $2.2M, with a 600sqm retail space on the ground floor. </span>
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<div><span>Construction is due to commence 2016.</span></div>
<div><span> </span></div>
<div>For more information, <a href="https://kalex.com.au/selling/166-gertrude-st-fitzroy/" target="_blank">click here</a>.</div>
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mick.cee-iDmgDDAmu8

166 Gertrude pre-sales released soon in Fitzroy

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<p><span>The </span>apartment market in Coffs Harbour has turned around, with dwelling construction ramping up and key suburbs seeing considerable new unit development, according to Herron Todd White.</p>
<p><span>Herron Todd White's September Month in Review found </span><span style="line-height: 1.3em;">popular beach and harbourside suburbs around Coffs Harbour typically have prices ranging from $350,000 to in excess of $1 million, with average prices around $450,000 to $700,000.</span></p>
<p><span style="line-height: 1.3em;">"The high end of the market of $700,000 plus does see sales dramatically reduce due to limited local demand for this price range," the report noted.</span></p>
<p><span style="line-height: 1.3em;">"These units are generally purchased by high net wealth individuals with long selling periods required to attract potential purchasers. </span></p>
<p>"Several modern townhouse complexes have been constructed which generally provide three bedroom, one or two bathroom accommodation in complexes of five to ten units ranging in price from $350,000 to $400,000. The majority of purchasers have been investors with rental returns of $360 to $400 per week being achieved."</p>
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Coffs Harbour construction ramping up: Herron Todd White

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<p> </p>
<p><img src="/images/2015/09/17/Holdencapital_banner.jpg" alt="" width="622" height="131"></p>
<p>SPONSORED POST</p>
<p>Following continuing pressure by APRA on the major banks to ensure that they comply with their obligations under the Basil III accord, the banks recently reacted by reducing their appetite for construction lending, dramatically reigning in their marketing to developers and in some instances actually reducing the level of staff in their relationship management teams. </p>
<p>This conflict between their requirements to satisfy capital adequacy levels under the accord coupled with their need to improve their return on shareholding to remain competitive with their peers has created a significant problem for many of their developer clientele. </p>
<p>To achieve their objectives, the banks have raised the bar for developers in terms of their condition precedent requirements, reduced gearing levels and increased their pricing on debt, effectively implementing a flight to quality and leaving many of the their traditional but more marginal clients in terms of credit strength, looking for alternative funding sources.</p>
<p>This has resulted in a significant shift in the construction lending landscape with some developers quickly adjusting to the need to re-focus their attention on where they source their debt and its not just the smaller more marginalised developers who are making changes. <span style="line-height: 1.3em;"> </span></p>
<p>HoldenCAPITAL is currently settling an average of more than 1 transaction per week but recently there has been a noticeable change in the ratio between the traditional bank sourced debt and those alternative funding options now being opted for by developers who don’t want to miss a market opportunity just because their banks have their own problems. </p>
<p>In FY15 we settled 64% of our deals with the major banks but this has quickly changed with 62% of the $300mil of project debt settling between now and Christmas likely to be set with alternative funding sources.</p>
<p>Through managing the tender process on behalf of its clients, HoldenCAPITAL has been at the forefront of both the bank and non-bank markets and can quickly identify where a client can secure the best outcome for their project needs.  He says that the majors are still a strong force in the sector but there are very real alternatives emerging as strong contenders for new projects. </p>
<p>While there are additional costs associated with these alternative funding sources rising up to the meet the market demand, these alternatives do offer their own distinctly different benefits to developers who do not want to be restricted in their ability to meet identified market opportunities due to the constraints placed on their traditional bank which have no direct relevance to their market sector. </p>
<p>By way of example, non-bank money can cost as low as 9-10% per annum, which, which when compared to the traditional bank cost (if it was available) on a medium sized projects of say 30 product, would add as little as ~$170,000 or 10% variance on normal finance costs to a project with a total cost of $6M. </p>
<p>What this alternative product does offer the developer is the potential for significant savings in other areas such as the opportunity to commence the project without the need for pre-sales. It also allows the developer to lock in a construction price and minimise escalation risk as well as the benefit of selling product which has a more certain delivery date, rather than the more speculative "off the plan" route required to satisfy the banks pre-sale requirements. This in turn gives the developer the edge when selling any completed residual stock, which will be competing with stock still under construction by those competitors who chose the pre-sale option.</p>
<p>The changing landscape in the construction finance arena has also given rise to an increase in private investors looking to invest in development opportunities. With the uncertainties surrounding the investments in shares, reduced superfund returns and tightening investment yield in investment property, investment in well structured and risk mitigated developments was providing investors with a very attractive alternative. We currently manage over $70mil of private investor funds and the enquiry from new investors is getting more frequent. </p>
<p>So what is the future for construction lending? There is no doubt that many of these changes have been seen before but the reality facing the banks is that many of the revisions driving how they participate in the construction market are permanent rather than the cyclical as in the past and as such, it would appear that the rise of the alternative lenders is more than a passing fad and could represent a real paradigm shift in this sector.</p>
<p><em>This article was written by Dan Holden of <em>bespoke construction finance firm </em>HoldenCAPITAL. To discuss your project finance requirement please call (07) 3171 4200 or <a href="https://www.holdencapital.com.au" target="_blank">click here</a>.</em></p>
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firstname-zEygzUaHDN

Banks tightening developer credit heralds rise of alternate funding options: HoldenCAPITAL

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<p><span>Victorian Premier Daniel Andrews performed a sod turning ceremony marking the imminent construction of a $1.2 billion commercial precinct, Merrifield Business Park, in Melbourne’s north.</span></p>
<p><span>Strategically positioned in Melbourne’s northern growth corridor, the $1.2 billion, 330ha Merrifield Business Park will commence construction later this year, and is expected to generate up to $3.5 billion annually for Victoria.</span></p>
<p><span><img src="/images/2015/09/10/KH_003_CH2_5642_090915.jpg" alt="" width="286" height="318"></span></p>
<p><span>Merrifield Business Park is part of the broader Merrifield project, the largest master planned community in Victoria, spanning 770ha in total, including 4,000 homes, a 110-hectare city centre and the 330ha business park.</span></p>
<p><span>The broader Merrifield project will deliver 25,000 direct jobs, while the business park alone will accommodate up to 11,000 direct and 20,000 indirect jobs once complete.</span></p>
<p><span><img src="/images/2015/09/10/KH_004_CH2_5655_090915.jpg" alt="" width="401" height="280"></span></p>
<p><span>Statistics also show Merrifield Business Park will account for 16-26% of future employment growth in the City of Hume.</span></p>
<p><span>Iconic Australian paint manufacturer Dulux is the first company to announce that it will be moving into Merrifield, alongside businesses from the food services, logistics and warehousing sectors, as well as white collar industries also showing interest in commercial land in the north.</span></p>
<p><span><img src="/images/2015/09/10/KH_005_CH2_5719_090915.jpg" alt="" width="400" height="508"></span></p>
<p><span>Merrifield Business Park’s positioning near major transport infrastructure – Hume Melbourne International Airport, Somerton Intermodal Terminal - enables the delivery of goods and services to over 80% of the Australian population within 12 hours.</span></p>
<p><span>Merrifield is a joint venture between MAB Corporation and Gibson Property Corporation.</span></p>
<p><span><img src="/images/2015/09/10/KH_009_CH2_5791_090915.jpg" alt="" width="401" height="332"></span></p>
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<p><em>Pictures: Kit Haselden Photography</em></p>
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j.ballantyne1990-6AQqhLzZaK

Premier announces $3.5 billion annual boost to Victoria‏

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<div>Now the construction sector is expanding again per AIG.</div>
<div> </div>
<div>Some good analysis from AIG that is well worth a read - apartment construction is an obvious strong point, which makes the drag on second quarter GDP by dwelling construction something of a mystery.</div>
<div> </div>
<div>Perhaps the residential construction industry is operating at or close to its full capacity?</div>
<div> </div>
<div>In any case, I expect dwelling construction to contribute to the economic growth in the third quarter.</div>
<p><a href="/images/2015/09/09/PCI.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2015/09/09/PCI.jpg" alt=""></p>
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<p><span>All three of </span>AIG's Performance Indices<span> are now in expansion territory - manufacturing, construction and services.</span></p>
<p><a href="/images/2015/09/09/AIG.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2015/09/09/AIG.jpg" alt=""></p>
<p>Source: AIG</p>
<p><span><em>PETE WARGENT is the co-founder of <a href="https://allenwargent.com/" target="_blank" rel="nofollow">AllenWargent</a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank" rel="nofollow">blogger</a>.</em><br></span></p>
<p><em>His latest book is <a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx" target="_blank" rel="nofollow">Four Green Houses and a Red Hotel</a>.</em></p>
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pwargent-M4siyDbqQY

Construction expands in August: Pete Wargent

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<p><span>The first sod has been turned for the construction of Doncaster's $77 million Gardenhill development by Manningham Mayor Cr. Paul McLeish.</span></p>
<p><span style="line-height: 1.3em;">The ground breaking ceremony at </span><span style="line-height: 1.3em;"><a href="https://www.realestate.com.au/project-gardenhill-vic-doncaster-600006123" target="_blank">5 Elgar Court</a>, Doncaster was also attended by </span><span style="line-height: 1.3em;">Victorian Minister for Finance Robin Scott and Malaysian Minister for Industry and Trade Dato’ Lee Chee Leong.</span></p>
<p><span style="line-height: 1.3em;">Gardenhill is a joint venture between Malaysian-based Fajarbaru Group and Melbourne-based Beulah International.</span></p>
<p><span style="line-height: 1.3em;">The </span>apartment<span style="line-height: 1.3em;"> development is designed by </span><span style="line-height: 1.3em;">Woods Bagot-designed development, with 70% of the 136 apartments sold up in the first three months of release. C</span><span style="line-height: 1.3em;">onstruction is slated for completion late 2016.</span></p>
<p>Key features include a Jack Merlo-designed garden, a <span style="line-height: 1.3em;">rooftop terrace, teppanyaki </span>barbecue<span style="line-height: 1.3em;"> and a private enclosed dog park on the ground floor.</span></p>
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Construction starts on Doncaster’s $77 million Gardenhill

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<p><span style="line-height: 1.3em;">We're at the pointy end of a development and I'm in the middle of coordinating the last three weeks so everything falls into place efficiently. Our job as project managers is to save our clients time and money and sometimes a development can really drag out at the end of construction.</span></p>
<p>I thought I'd share all the things that need to happen as a Property Bloom project nears completion and why it's so importance to manage this carefully. </p>
<p>We have a dual occupancy project that is three weeks out from completion. I can say three weeks confidently as I've worked back from the date of Handover to right now and listed everything that needs to happen. </p>
<p>We define completion not by the construction work finishing, but by the dwellings being tenanted and earning income for our clients. It's one of the most important stages because our clients have been paying the builder's draw downs through the development and now it's time for them to reap the financial rewards. </p>
<p>Our process aims for a zero vacancy period and we do this by using something that is intangible yet very valuable. Strong relationships. </p>
<p>So in these last few weeks we need to micro manage the builder, our client and their bank, a valuer, our property management agency, our private certifier, a landscaper, the estate guidelines manager and our quantity surveyor. </p>
<p>The first step towards the end is to conduct the Practical Completion (PC) inspection  as soon as we can, but not too soon that the builder is not ready. This is when we'll walk through the villas and compile a list of items that still need finishing off. These may include paint touch ups, cleaning, any damage to exteriors (I always check the gutters and fascias closely as sometimes they harbour dents), chips in anything, landscaping, fencing, blinds, carpet and built in robes, shower screens all installed, sliding door and window tracks cleaned of all dirt (my pet hate is dirt left in tracks!) and I make sure everything works right down to a strong flush to the toilets. </p>
<p>The builder has a week to address the items on the PC inspection list and then we'll come back and reinspect. In the meantime, we need our client to send the final builder's invoice to their bank for payment. Before releasing the final funds, the bank will send their valuer to check works have been completed. We must ensure the valuer is booked in quickly and has no problems with access otherwise the final payment can be held up.  When the money is released to the builder, keys can be handed to tenants. So no keys, means no tenants, means no income. </p>
<p>At the same time we ensure that the Private Certifier conducts their final inspection. Once they have done this and have all related documentation,  the Occupation Certificate (OC) will be released.  No OC, means no tenant, means no income.</p>
<p>We've cut a deal with an agency who is going to lease the villas (whether a tenant has actually moved in or not) from the day the OC is received. So it's important we get this as quickly as possible but all Conditions of the DA must be met before the Certifier will release the OC. </p>
<p>We are also coordinating with an external landscaper who is responsible for the front landscaping and it must meet stringent estate guidelines.  This work has to be completed before the OC can be issued.</p>
<p>We brief our Quantity Surveyor to prepare Depreciation Schedules for our client to use at tax time as soon as we've received the builder's final invoice as this completes the actual build costs. However, the Depreciation Schedules cannot be completed until we have a Handover date. Handover is officially when the builder has received the final payment into their account and keys are released. </p>
<p>We need to ensure our builder has completed all works in time and there is a good measure of trust as the builder allows our management agency on site to show the villas to prospective tenants before Handover has occurred. Our client also trusts us to ensure the builder gets everything finished after they've submitted the builders final invoice to the bank. </p>
<p>Communication through this period is key. We talk a lot to our client, their bank and the contractors to ensure everyone completes their tasks when they should - all it takes is for one not to and it can hold up the entire process. </p>
<p>So in exactly three weeks time this dual occ project will be completely finished, our client will be happy with tenants in place, our builder will be happy they've been paid quickly and we'll be happy that it all came together nicely. </p>
<p><em>Jo Chivers is chief executive officer of property development project managers <a href="https://www.propertybloom.com.au/about" target="_blank">Property Bloom</a>.</em></p>
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jochivers-wq5Bp59R5a

What happens in the last three weeks of a development? Jo Chivers

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<div>The ABS released its Construction Work Done figures for the June quarter, which showed total construction for the quarter rebounding by +1.6% to a seasonally adjusted $49.8 billion.</div>
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<div>Over the last year total construction remained at historically very high levels at $198 billion, although this is now down from a sky-high annual figure of $211 billion one year ago.</div>
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<div><a href="/images/2015/08/27/A1.jpg" target="_blank">Click to enlarge</a></div>
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<div>As any good politician would, of course, smiling Treasurer Hockey immediately took to Twitter to claim credit for the rebound.</div>
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<div>But in fact public infrastructure work has been very weak. </div>
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<div>Furthermore, against recent trends the rebound in the June quarter was not driven by residential construction either, rather it was a punchy quarter for engineering (i.e. resources) construction works, with expenditure rebounding by +5.6 per cent to a seasonally adjusted $25.6 billion.</div>
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<div><a href="/images/2015/08/27/a2.jpg" target="_blank">Click to enlarge</a></div>
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<div>Despite this positive blip, engineering construction work done was -8.8 per cent lower than a year ago, and will doubtless resume its downward trajectory in due course, as considered in more detail below.</div>
<br><strong><span style="text-decoration: underline;">Mining rebound in WA</span></strong><br><div> </div>
<div>The driver of the engineering construction rebound was an increase in spend of nearly +$3 billion in Western Australia to $11.3 billion for the second quarter.</div>
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<div><a href="/images/2015/08/27/A3.jpg" target="_blank">Click to enlarge</a></div>
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<div>In fact, anyone who was paying very close attention might have anticipated this.</div>
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<div>Recall that the so-termed "record trade deficit" in April 2015r actually included an <a href="https://petewargent.blogspot.com.au/2015/06/trade-deficitwtf" target="_blank">anomalous spike</a>in Western Australian imports from Korea. As I <a href="https://petewargent.blogspot.com.au/2015/06/trade-deficitwtf" target="_blank">noted at the time</a>:</div>
<br><div><span><em>"<span>No further detail is provided by the ABS, but given that there was a kahuna $1.5 billion spike in merchandise imports in Western Australia, and we can assume that this was probably related to a major mining project.</span></em></span></div>
<div><span><em> </em></span></div>
<div><span><em>In all likelihood, one might hazard that this was rail capex for Gina Rinehart's Roy Hill iron ore project (which typically a business would treat as an investment in a fixed asset for the generation of revenue streams, rather than trading expenditure)."</em></span></div>
<br><div>In all probability, therefore, the June quarter rebound was capex driven with a large asset purchase accounting for most of the spike.</div>
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<div>Moreover we can expect that the September quarter will see engineering construction work resuming its inevitable decline.</div>
<br><strong><span style="text-decoration: underline;">Building by state</span></strong><br><br><div>At the state level, Victoria has been the king of residential building across recent years.</div>
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<div>However New South Wales is now the one state which is benefitting from a material public sector and non-residential building contribution, thereby thrusting total building work done in the Premier State to its highest ever level in the June quarter.</div>
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<div><a href="/images/2015/08/27/A8.jpg" target="_blank">Click to enlarge</a></div>
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<span>Indeed, the New South Wales economy in generally is in very fine shape at the present time.</span><br><br><strong><span style="text-decoration: underline;">Residential building by state</span></strong><br><br><div>Looking at specifically residential buiding we can see that the +7.4 per cent year-on-year increase has been overwhelmingly a function of "other residential" building - which is to say, the construction of units, townhouses and apartments.</div>
<br><div>As denoted by the green line below, outside Sydney major renovations activity has been very subdued through this cycle.</div>
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<div><a href="/images/2015/08/27/A4.jpg" target="_blank">Click to enlarge</a></div>
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<div>
<div>Although new house building has responded to low interest rates almost everywhere to a greater or lesser extent, the trend has been looking increasingly peaky over the past four quarters.</div>
<div> </div>
<div>Victoria continues to lead the way on the house building front, a state which appears to suffer less from greenfield land supply constraints than other states and territories do.</div>
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<div><a href="/images/2015/08/27/A6.jpg" target="_blank">Click to enlarge</a></div>
<div><img src="/images/2015/08/27/A6.jpg" alt=""></div>
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<div><span>On the other hand the higher density sector building work continues apace, particularly in Melbourne, Sydney and Brisbane, which is a trend you can see everywhere from West End, South Brisbane, Fortitude Valley and Newstead (Brisbane), to Mascot, Wolli Creek and Zetland (Sydney). </span></div>
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<div>The latest building approvals figures suggest that the cycle for unit and apartment approvals may also be set to peak in due course, thoughthe duration of higher density projects from approval to completion may run to several years.</div>
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<div>Consequently the elevated levels of building activity in this sector may have quite some way to run yet.</div>
<br><strong><span style="text-decoration: underline;">The wrap</span></strong><br><br><div>Overal this was a positive result for construction in the June quarter which masks an ongoing decline in resources construction that is locked and loaded for the next few years. </div>
<div>
<br>Residential building remains strong for the time being, but even here Australia can only build new apartment projects for so long.</div>
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<div>Of more significance will be today's capex intentions for the 2015/16 financial year, and specifically whether businesses are becoming more inclined towards investment plans.</div>
<div> </div>
<div>If not, in a nutshell, interest rates will have further to fall.</div>
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<p><span><em>PETE WARGENT is the co-founder of <a href="https://allenwargent.com/" target="_blank" rel="nofollow">AllenWargent</a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank" rel="nofollow">blogger</a>.</em><br></span></p>
<p><em>His latest book is <a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx" target="_blank" rel="nofollow">Four Green Houses and a Red Hotel</a>.</em></p>
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Construction rebounds...for now: Pete Wargent

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<p><span>GUEST OBSERVER</span></p>
<p><span>Construction activity surprised to the high side, advancing by 1.6% in the June quarter. Expectations were for a decline (Westpac and market median –1.5%).</span></p>
<p><span>Private infrastructure, dominated by mining, was the source of surprise, jumping 10.2% in the quarter, centred on a 35% spike in WA.</span></p>
<p><span>Total construction work ex WA infrastructure was weak in the quarter, declining by 5.3%.</span></p>
<p><a href="/images/2015/08/26/Screen%20Shot%202015-08-26%20at%2010.40.50%20PM.png" target="_blank"><span>Click to enlarge</span></a></p>
<p><span><img src="/images/2015/08/26/Screen%20Shot%202015-08-26%20at%2010.40.50%20PM.png" alt=""></span></p>
<p><span>The construction report reads more like an update from 2011, when the mining investment boom was in full swing. However, this spike in infrastructure work will not be sustained. Rather prospects are for sizeable falls ahead, even more so given this burst of work.</span></p>
<p><span>The positive, is that the construction sector (which accounts for around 15% of the economy) will add to growth in the June quarter 2015. This will provide a partial offset to the drag from net exports, which have swung from a positive contribution in Q1 of 0.5ppts to an estimated subtraction of –0.4ppts in Q2.</span></p>
<p><a href="/images/2015/08/26/Screen%20Shot%202015-08-26%20at%2010.42.42%20PM.png" target="_blank"><span>Click to enlarge</span></a></p>
<p><span><img src="/images/2015/08/26/Screen%20Shot%202015-08-26%20at%2010.42.42%20PM.png" alt=""></span></p>
<p><span>Infrastructure work in WA jumped to $11.3bn in the quarter, a $2.9bn increase on Q1 or a rise of 35%.</span></p>
<p><span>Construction of the $10bn Roy Hill iron ore project and the $61bn Gorgon LNG project will have contributed to this spike. It appears that there has been a ramping up of work in an effort to make up for past delays. </span></p>
<p><span>Elsewhere, it was a weak quarter for construction.</span></p>
<p><span>Public works fell further, down a sharp –8.4%qtr, to be 15% lower than a year ago. In the year ahead, public infrastructure is likely to improve as state governments begin work on new transport projects.</span></p>
<p><span>Commercial building was little changed, ahead of likely falls with approvals falling sharply in 2014, particularly in the mining states.</span></p>
<p><span>Private new residential building surprised, declining by 3.6% in the quarter. Although, this dip follows a 16% rise over the past year, including a near 8% increase in Q1. With approvals hitting fresh record highs early in 2015 new home building activity is set to strengthen in coming quarters.</span></p>
<p><span>Private home renovations strengthened, up 0.9% in the quarter to be 4% higher than a year ago. This is likely the beginnings of a modest upturn, following a period of softness, consistent with the upturn in the housing market more generally.</span></p>
<p><span>By state, Q2 construction work was: up sharply in WA, +25.5%qtr, 14%yr; broadly flat in NSW; edged lower in Victoria, -2.8%qtr, but was still up over the year, +7%; and fell further in Qld, -11%qtr, -32%yr.</span></p>
<p><em>Andrew Hanlan is senior economist for Westpac and can be contacted <a href="https://www.propertyobserver.com.au/https://au.linkedin.com/pub/andrew-hanlan/3/222/430" target="_blank">here</a>. </em></p>
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