<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.

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.

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.

Across the three towers, SP Setia is proposing 606 build-to-sell apartments and 1,499 student accommodation units containing 2,009 beds.

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.

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

<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" />

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.

But one of the biggest components of the proposal is what sits between the buildings.

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.

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.

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.

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.

The proposal is being pursued through the Victorian Government's Development Facilitation Program under Clause 53.23 for significant residential development with affordable housing.

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.

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.

<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" />

SP Setia plans to deliver the development across three stages.

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.

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.

&nbsp;

&nbsp;

Joel Robinson

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

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.

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.

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.

“This is a deliberately very different proposition for us,"&nbsp;Tim Lowe, Co-Founder of Lowe Living, said.

"Eight residences is exceptionally boutique, but that's precisely what this site calls for.

“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.”

<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" />

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.

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.

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.

<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" />

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.

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.

Heritage has subsequently played a significant role in Cera Stribley's design.

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.

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.

<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" />

Rather than presenting as a single five-storey building to Erskine Street, Cera Stribley has broken the development into a series of distinct forms.

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.

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.

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.

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.

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.

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.

Lowe Living unveils Middle Park apartment development

Article summary

<ul data-end="888" data-start="289">
	<li data-end="442" data-section-id="8tsh6o" data-start="289">DVB Projects is preparing to launch its second Gold Coast apartment development, with demolition now underway at 137 Old Burleigh Road, Broadbeach.</li>
	<li data-end="573" data-section-id="1nyxl3e" data-start="443">The 34-level tower will comprise just 49 ultra-luxury residences, including half-floor, full-floor and penthouse apartments.</li>
	<li data-end="717" data-section-id="oiyimj" data-start="574">The launch follows strong demand at DVB's nearby Sea Glass project, which is more than 50 per cent sold and currently under construction.</li>
	<li data-end="888" data-section-id="epk9o9" data-start="718">The development adds to the transformation of Old Burleigh Road, with premium beachfront apartment projects continuing to reshape the tightly held Broadbeach strip.</li>
</ul>

<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.

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

<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" />

The start of demolition at 137 Old Burleigh Road signals DVB Projects’ underlying confidence in the Gold Coast’s luxury beachside apartment sector.

“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;

“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."

Brown says the site itself is "exceptional."

"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.”

<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." />

The project will comprise 40 half-floor residences of approximately 260 sqm, alongside eight full-floor residences spanning around 524 sqm.

A single penthouse will crown the building, featuring a private pool, barbecue area, indoor gym and dedicated entertaining spaces.

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.

<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" />

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.

“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.

“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.

“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.”

<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" />

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.

With the development moving into the delivery phase, 137 Old Burleigh Road is slated to hit the market later this year.

[smartcode_project_cta:default project_id=145141]

DVB Projects to launch second Broadbeach apartment tower as demolition commences

<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.

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

Construction

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<h4>GUEST OBSERVER</h4>
As the Senate Economic References Committee (SERC) begins its public hearings into insolvency in the Australian construction industry, the vexed issue of phoenixing deserves to be highlighted.
It is generally believed that illegal phoenix activity - where a company is liquidated and rises again in a way that avoids paying creditors - is widespread in the Australian construction and building industry.
In fact, it is difficult to substantiate whether this is the case due to a paucity of reliable data. But anecdotal reports suggest such concerning behaviours as deliberately avoiding tax, the use of false statutory declarations and refusing to pay wages and entitlements, are commonplace.
In our submission to the inquiry, fellow researchers Professors Ann O’Connell and Ian Ramsay of Melbourne Law School, Associate Professor Michelle Welsh of Monash Business School and I argue that better detection and greater enforcement via existing powers might be the most effective way of dealing with this sort of illegal activity.
Defining illegal phoenix behaviour
It’s important to note that not all phoenix activity is illegal. Our ongoing research identifies <a href="https://law.unimelb.edu.au/cclsr/centre-activities/research/major-research-projects/regulating-fraudulent-phoenix-activity" target="_blank">five categories of phoenix activity</a> - only three of which are illegal.
For instance, it is reasonable to expect that a failed business person will try to start their next business in the same industry and will want to buy assets from the failed company. In the construction industry, it is common for each large building project to be executed by a separate company that forms contracts with its subcontractors.
Each project succeeds or fails on its own merits without affecting other projects or the parent company’s solvency. Therefore high rates of company formation and liquidation do not automatically equate to high levels of illegal behaviour or improper exploitation of the corporate form.
In Australia, one of the difficulties in assessing the incidence, cost and enforcement of phoenix activity is the general paucity of reliable data. The mere fact of company creation and liquidation is not evidence of illegality.
Australian Bureau of Statistics data about <a href="https://www.propertyobserver.com.au/https://www.abs.gov.au/ausstats/abs@.nsf/mf/8165.0" target="_blank">company registrations and insolvencies</a> reveals that the total number of insolvencies in the construction industry for the period of 2013-2014 was 1,802.
Not all of these insolvencies would have involved illegal phoenix activity. While this is a large number, it represents only 0.54% of the total number of companies that were operating in that sector at the start of the 2013 financial year. There are eight other sectors where the number of insolvencies as a percentage of registered companies was greater than it was in the construction sector.
This is not to deny the prevalence of illegal phoenix activity in the construction industry; rather it should prompt better data collection from relevant regulators.
The bad forcing out the good
People associated with the industry warn that when the incidence of illegal phoenix activity reaches a critical point, other companies in the industry will face a difficult choice between succumbing to the same illegal behaviour or else risking being priced out of business.
We have heard of “net of tax tendering”, where it is so well understood that taxes will not be paid that quotes are calculated on that basis. In these instances it is likely that the head contractor or client knows that the tender does not allow for tax to be paid; otherwise, the contract would be unprofitable. Within corporate groups, the apparent use of labour hire companies, created purely to accrue PAYG(W) and payroll tax debts before being liquidated, is also concerning.
There are also some characteristics of the construction industry that make debt recovery particularly difficult. The sub-contracting system is a key feature of major building works. The head contractor undertakes to perform the contract and is paid for it by the client. Work is then contracted out through layers of sub-contractors.
The various layers of sub-contractors must complete statutory declarations that they have paid their employees and other debts, in order to receive payment from the contractor above them. We have heard that the use of false statutory declarations is common in the industry, and ASIC is currently investigating this.
Recovery of unpaid wages and other entitlements is also fraught. Employees may not be sure of the company name of their employer which may change from payslip to payslip, remaining unaware that their employment is now with a new employer who has no liability for wages or other entitlements accrued previously.
The industry employs high numbers of temporary migrant workers whose knowledge of their entitlements may be minimal. Backpackers on 457 visas can lose their employment and their employer’s sponsorship if they question the payment of their entitlements, and are then forced to return home. Recovery of redundancy entitlements is especially problematic in the construction industry.
Law reform
It might be assumed from this discussion that law reform is required, and that at the very least, a specific phoenix offence should be introduced. We urge caution. Directors’ duties already capture the essence of illegal phoenix activity.
There are also other mechanisms – director disqualifications and director penalty notices amongst them – which are available to regulators even in the absence of proof of improper intent. Better detection and greater enforcement via existing powers should be considered first.
Helen Anderson is Associate Professor, Melbourne Law School, at the University of Melbourne. She can be contacted <a href="https://www.law.unimelb.edu.au/melbourne-law-school/community/our-staff/staff-profile/username/Helen%20Anderson" target="_blank">here</a>.
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jchancellor-FAypfDUnLy

Is illegal phoenix activity rife among construction companies?

<html><body>
This winter shapes as a boom period for Melbourne's commercial builders if the number of projects beginning their construction cycle is any indicator. Sweeping through the Apartments.com.au <a href="/developments">project database</a> and limiting a project to its early works stage, specifically piling, site retention and bulk excavation, there are no less than 42 projects spread throughout metropolitan Melbourne in their infancy.

Apartments.com.au's project database is currently tracking 207 projects in the broader 'Under Construction' category, with the aforementioned 42 projects accounting for an impressive 20% of all projects under construction.

While the line between early and main works can be blurred, the sheer number of projects about greater Melbourne commencing construction points toward the overall strength and underlying demand of the apartment sector, considering the sector account for the vast majority of construction projects underway.

<figure><a class="colorbox colorbox-insert-image" href="https://res.cloudinary.com/dz9xllyip/image/fetch/q_auto:good/https://s3-ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/pictures/article-images/img_2337.jpg" rel="gallery-all" title="Botanica Balwyn's progress during late May"><img alt="" class="image-article-full-width-580px" height="387" src="/sites/urban.melbourne/files/styles/article_full_width_580px/public/pictures/article-images/img_2337.jpg?itok=R1Gml1mO" title="Botanica Balwyn's progress during late May" width="580"></a>

<figcaption>Botanica Balwyn's progress during late May</figcaption></figure>While the major construction firms content themselves with big ticket builds in and around the CBD, it's the proliferation of medium and smaller sized apartment projects in middle and outer suburbs which has led to the spike in construction starts and the rise of a new breed of builders.

As previously small constructors such as Hacer, Hamilton Marino and ABD Group expand in size and capabilities to fill the void left by the multitude of projects attracting Melbourne's biggest builders, so do smaller builders step up to fill the void in the tiers below. Relatively new names such as Lexicon, Orange Building Solutions, Team Building, TriBuild Constructions, Project Group and Shangri-La can be seen across Melbourne building sites.

While 42 projects are identified at an early works stage, they're located in no less than 31 separate Melbourne suburbs which points toward the tremendous spread of apartment living options now available throughout the metropolitan area. Doncaster for example holds four projects at early works, namely <a href="/buildings/magnolia-doncaster-hill-22-hepburn-road-doncaster">Magnolia</a>, <a href="/buildings/88-doncaster-hill-88-tram-road-doncaster">88 Tram Road</a>, <a href="/buildings/8-hepburn-road-doncaster">8 Hepburn Road</a> and <a href="/buildings/83-on-tram-83-tram-road-doncaster">83 on Tram</a> while the Melbourne is represented by <a href="/buildings/light-house-450-elizabeth-street-melbourne">Light House</a>, <a href="/buildings/la-trobe-tower-323-la-trobe-street-melbourne">La Trobe Tower</a>, <a href="/buildings/royal-elizabeth-151-berkeley-street-melbourne">Victoria One</a> and <a href="/buildings/royal-elizabeth-151-berkeley-street-melbourne">Royal Elizabeth</a>.

Notable projects set to rise this winter include the long stalled and almost forgotten <a href="/buildings/echo-33-simmonds-street-south-yarra">Echo</a> South Yarra which is in the hands of Hutchinson Builders while piling continues on La Trobe Tower which will feature a new building technology, namely Hickory Group's integrated Hickory Building System.

Overall the 42 projects sum to in excess of 4,900 apartments with all the projects set to begin rising skyward in the near future. Not to be forgotten is Collins Square Tower 5 which as the sole commercial development is at bulk excavation and will eventually provide Docklands with another 34,000 plus square metres of premium commercial space.

<figure><a class="colorbox colorbox-insert-image" href="https://res.cloudinary.com/dz9xllyip/image/fetch/q_auto:good/https://s3-ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/pictures/article-images/img_2362.jpg" rel="gallery-all" title="Toorak Park's 450 plus apartments under the guidance of Lend Lease"><img alt="" class="image-article-full-width-580px" height="387" src="/sites/urban.melbourne/files/styles/article_full_width_580px/public/pictures/article-images/img_2362.jpg?itok=0UIU6Nl4" title="Toorak Park's 450 plus apartments under the guidance of Lend Lease" width="580"></a>

<figcaption>Toorak Park's 450 plus apartments under the guidance of Lend Lease</figcaption></figure>The count of 42 doesn't include the array of sites that have been cleared in preparation for construction. Recent sites to be cleared include <a href="/buildings/victoria-square-8-hopkins-street-footscray">8 Hopkins Street Footscray</a>, <a href="/buildings/heidi-apartments-120-burgundy-street-heidelberg">Heidi Apartments</a> in Heidelberg, Pellicano's <a href="/developments/dandenong-vic-3175">Quest Dandenong</a> development, <a href="/developments/melbourne-vic-3000">80 Collins Street</a> and <a href="/buildings/11-central-avenue-moorabbin">11 Central Avenue Moorabbin</a>, with the latter quartet having their builders waiting in the wings.

Of course the largest of all, <a href="/buildings/australia-108-southbank-70-southbank-boulevard-southbank">Australia 108</a> is in the same position with Brookfiled Multiplex poised to initiate piling on what will be Melbourne's tallest building upon completion.
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silvermb

A winter of construction content

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<div>The ABS released its <a href="https://www.propertyobserver.com.au/https://www.abs.gov.au/ausstats/abs@.nsf/mf/8755.0" target="_blank">Construction Work Done</a> figures for Q1 2015 which saw total construction work done decline by 2.4% to $48.4 billion.</div>
<div> </div>
<div>It's a bit of an awkward data release with a few moving parts, but let's see if I can simplify a few of the key messages here in three short parts.</div>
<div> </div>
<div>Part 1 - Total construction slips</div>
<div>
 As you can see from my chart below, private sector building work is responding rather nicely to low interest rates.</div>
<div> </div>
<div>Unfortunately, on the other hand, spend in the public sector is contributing very little to the cause. Quarterly public sector expenditure fell to below $2.2 billion, which is far below the more stimulatory levels seen through the financial crisis which peaked at more than $5 billion. The economy could evidently use some infrastructure investment, though I'm not at all sure we'll get it.</div>
<div> </div>
<div>Meanwhile engineering construction, largely comprised of resources capital expenditure, continues to capitulate, now more than 20% lower over the past year to $24.8 billion in Q1, from a peak of $33.2 billion in 2012.</div>
<div> </div>
<div class="separator"><img src="/images/2015/05/28/wargent1.jpg" alt=""></div>
 
<div>The net result is that total construction work done declined further in the first quarter by 2.4% to $48.4 billion.</div>
<div> </div>
<div>This is still a very high level of activity in historical terms, but now some 8.8% lower than one year ago.</div>
<div> </div>
<img src="/images/2015/05/28/wargent2.jpg" alt=""> 
<div>The one shining light for construction - which you will have seen with your own eyes if you live in one of the major capital cities - is residential construction, which continues to pulse along.</div>
<div> </div>
<div>House building work done is picking up sharply, while the value of building work done relating to units and apartments (denoted by the red line below) continues to surge to new record highs through this cycle.</div>
<div> </div>
<div>Higher density developments - which tend to be located in cities and come with associated expensive land remediation costs - are contributing a surprisingly high proportion of residential building work done in chain volume measures terms.</div>
 
<div class="separator"><img src="/images/2015/05/28/wargent3.jpg" alt=""></div>
<div class="separator"> </div>
<div>Major renovations work, denoted by the green line, continues to flatline, and is basically on life support outside Sydney.</div>
Part 2 - State versus state building
The value of building work done is being driven by activity in Melbourne, Sydney and Brisbane, in that order, which should continue to support construction employment in those cities, combined with the associated multiplier effect.
<div>The building boom is largely bypassing the southern states, and this has been reflected in benign (Hobart) or negative (Adelaide) employment growth in the respective capitals of these states. </div>
<div> </div>
<div class="separator"><img src="/images/2015/05/28/wargent4.jpg" alt=""></div>
<div class="separator"> </div>
<div class="separator"> </div>
<div>Looking at the major component parts, Melbourne continues to be the undisputed king of house building, while Queensland and Western Australia saw a decent lift in activity in the first quarter of this year.</div>
<div> </div>
<div class="separator"><img src="/images/2015/05/28/wargeent5.jpg" alt=""></div>
 But the real fun and games are taking place in the apartment construction sector.
Sydney and Brisbane may be approaching full capacity in this industry, which a dearth of bricklayers and project managers on the eastern seaboard being reported by the Reserve Bank's liaison, despite the legions of construction workers becoming available for transfer as they are released from resources contracts (more on this below).  
<div>Activity in New South Wales pulled back a little in Q1, but Melbourne apartment construction continues to rip to record high levels, with nearly $6.5 billion of work done over the past year in Victoria, and $1.8 billion in the first quarter of 2015 alone. Heady times.</div>
<div> </div>
<div class="separator"><img src="/images/2015/05/28/wargent6.jpg" alt=""></div>
<div class="separator"> </div>
<div class="separator"> </div>
<div>Clearly this is the macro level data only, but the figures clearly imply a looming oversupply of units and apartments in some locations. Prospective investors clearly need to understand the property markets at a suburb and micro level in this respect. Part 3 - The mining cliff
</div>
<div> </div>
<div>If you were hoping for good news for resources regions from this release, I'm afraid that there is none to report.</div>
<div> </div>
<div>Engineering construction work done held up reasonably well in Victoria, but everywhere else of note saw sharp declines, and particularly so the main mining states.</div>
<div> </div>
<div>The one exception in recent quarters had been the Northern Territory, with heavy spend related to the $34 billion Ichthys project pushing up engineering construction work done to record highs for the Top End over the preceding two quarters.</div>
<div>
 However, even the Northern Territory saw engineering construction work done decline from $2.1 billion to $1.7 billion in the first quarter, with some delays to the planned 2017 start-up date having been reported related to Inpex.</div>
<div class="separator">  
</div>
<div class="separator"><img src="/images/2015/05/28/wargent7.jpg" alt=""></div>
<div> </div>
<div>The chart above tells its own story, and there is little else but woe ahead for a number of mining town economies. </div>
<div> </div>
<div>The ongoing capitulation of house prices in the Pilbara and Moranbah have been well enough documented, but there are many more echo-corrections in the post across regions which have been propped up through the once-in-a-century mining construction boom. </div>
<div>
 My chart packs have shown here previously that the pipeline for mining capital expenditure is desperately weak, and there will be further data to report on expected capital expenditure declines later this morning. Capex related to Ichthys still has a way to run, granted, while Adani is hoping to proceed with its $10 billion thermal coal project (despite the minor inconvenience issue that at today's prices the project can barely be viable). But these monster projects aside, weakening commodity prices will ensure that mining investment is heading all the way back down where whence it came, which is why we call it a commodity cycle.</div>
The wrap
<div>This negative result will breathe very life into the GDP result for the first quarter, while a further decline in Australia's terms of trade will also act as a drag.</div>
<div> </div>
<div>Economic growth may not be stone dead flat in Q1, but it seems unlikely to be a great deal better than that, which could drag the annual result down to well below 2% over the first half of this calendar year.</div>
<div> </div>
<div>With inflation forecasts having been revised down and further macro-prudential tools now being deployed by lenders, futures markets see every chance that the next move in interest rates will be down again to below 2%.</div>
<div> </div>
<div>Perhaps the twist in the tail here is that macro-prudential tools on lending to property investors mean lower interest rates for longer?</div>
<div> </div>
<div>
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>. His book '<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>' is out now.
</div>
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pwargent-M4siyDbqQY

Major renovations work continues to flatline: Pete Wargent

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There are times in the development process that just seem to drag on and on. One of these irritating drawn out processes is the period after the Development Application (DA) and Construction Certificate (CC) are approved but before construction can commence.
After the approvals are received, our clients are then able to finalise their construction loan. Prior to this they have received a preapproval from their bank. For their construction loan to be unconditionally approved, the bank requires all supporting documentation.  This includes stamped plans, consents, signed builder's contract and insurance along with other personal documentation confirming your income.
Property Bloom is in this process with several of our projects right now and it's like riding a bike from a smooth bitumen road into a sand dune. 
The momentum and excitement that builds as we received the DA consent from council gathers speed by the use of a private certifier to fast track the CC process.  So it's just a week or two before we usually obtain the CC consent from lodgement.  It's then the builder's contract is issued to clients for signing and a copy is given to the bank together with the other required documentation to finalise their construction loan.
Then we hit the sand that bogs us down, slowing momentum. The banks will take their time processing the loan but it's also the application of the Home Builders Compensation Fund (HBCF) policy, formerly known as the Home Warranty insurance that slows the process. HBCF is required to be raised by the builder and covers their client for losses arising from defective and incomplete work where the builder becomes insolvent, dies or disappears.  
In the past we were able to apply for this insurance as soon as the CC consent was issued, however now the insurance company wants a copy of the signed builders contract and this adds another two weeks to the process as we need to wait for clients to review and sign the contract.
Even once the bank has all they need, including the insurance policy, it can take them another two weeks to issue the authority to commence construction to the builder. We cannot commence construction without the bank's go ahead in writing.
Two weeks here and two weeks there can all add up. When you are relying on third parties there is little you can do apart from be a 'squeaky wheel' and keep calling to see how the application is travelling.
One way to accelerate the process is to avoid using a construction loan. This may not be an option for most developers but if you have enough cash or equity available in other properties then you can look at the option of setting up a line of credit and funding the construction from this. Always get accounting advice on this. The big benefit is that you will avoid the headache the paperwork can cause and you won't be waiting around for the construction finance approval. 
Finally, construction may start as soon as you've signed the contract and the HBCF insurance policy is issued. We have found this to save approximately 6-8 weeks off the time frame of a development. It also has benefits on completion and fast tracks the handover process.
Jo Chivers is Chief Executive Officer of property development project managers <a href="https://www.propertybloom.com.au/about">Property Bloom</a>.
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jochivers-wq5Bp59R5a

How to accelerate the pre-construction phase: Jo Chivers

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With construction beginning on more than 50,000 dwelling units in the September 2014 quarter, up almost 20% on the previous year, is the construction sector all that's holding Australia back from a recession?
That may certainly be the case, according to comments from BIS Shrapnel economists at its Melbourne business forecasting conference earlier this week. And the Reserve Bank (RBA) board may just agree.
In its March meeting minutes, the RBA board noted further softening in the mining sector, with "steep declines" in mining investment contributing to below-trend gross domestic product (GDP) growth in the December quarter.
"The ABS survey of capital expenditure intentions implied further large falls in mining investment, as current projects were completed and few new projects were likely to proceed," the minutes read.
Meanwhile, income growth stayed low by historical measures and "the unemployment rate had continued its gradual upward trend".
Aside from low oil prices, the RBA board didn't see much that would continue to support consumer demand – except for residential investment.
"The current strength of housing construction and the increase in housing prices were expected to provide a measure of support for consumption," read March's minutes.
"A range of indicators, including residential building approvals, suggested further strong growth of dwelling investment in the near term."
The Reserve Bank's comments crediting construction investment with supporting the domestic economy are supported by the Australian Bureau of Statistics' (ABS) December quarter GDP figures. The ABS noted that: "In seasonally adjusted terms, the main contributors to GDP growth were Construction and Health care and social assistance each contributing 0.1 percentage points to the increase in GDP."
According to the ABS, $50.35 billion worth of construction work was done (on a seasonally adjusted basis) in the final quarter of 2014. While the figure is slightly down from its previous peak in the final quarter of 2012 (<a href="https://petewargent.blogspot.com.au/2015/02/construction-holds-up-well-thanks-to" target="_blank">as noted by Pete Wargent</a>), on a historical basis, the pace of Australia's construction industry in the past few years has been unprecedented.
<img src="/images/2015/03/23/bis-mar-23-one.jpg" alt="">
The value of total construction work done in the December 2014 quarter was also down on the figure recorded in the same period in 2013, by 4.8%. However, the decline can be attributed to engineering work and commercial construction, down 12.3% and 4.8% respectively over the year.
In fact, BIS Shrapnel managing director Robert Mellor noted on Tuesday that the state with the strongest relative commercial property construction sector currently was Tasmania, thanks to the Royal Hobart Hospital redevelopment.
Nationally, the value of residential work was up 12.7% from the December 2013 quarter.
<img src="/images/2015/03/23/bis-mar-23-two.jpg" alt="">
The Reserve Bank has also acknowledged the weak commercial property construction figures, noting in the March minutes that:
"Overall, survey measures of business conditions had remained around their average levels, while the trend in non-residential building approvals was at a low level and conditions in the commercial property market remained weak, with office vacancy rates in all capital cities at high levels."
But while residential investment has been able to buoy a flagging commercial property market, can it continue to uphold the entire economy as the mining sector slows further?
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jrichardson-uRX5hFdKfN

Has the apartment construction boom saved Australia from recession?

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What better way to judge the health of the construction sector than by ushering in the first Apartments.com.au crane count for 2015. And the sector must be booming given the current number of tower cranes plying their trade, blitzing any previous count to set a new record at 131 units.

It's not necessarily the inner city shouldering the burden either with tower cranes spread far and wide. Ringwood for instance has seven in use while Werribee, Knox, Frankston and Melbourne Airport also add to the spread.

At our assertion there's currently 131 tower cranes in use, comfortably outnumbering previous periods where the count averages roughly 110. While a variance of a handful of units is always factored in, there's no doubt that at this point in time Melbourne has never seen so many projects under construction. The importance to the employment rate and Melbourne's overall economic health can be extrapolated from the very healthy current numbers.

<table border="1" cellpadding="1" cellspacing="1" style="width: 100%;">
<thead><tr>
<th>Sector</th>
			<th>Cranes in use</th>
		</tr></thead>
<tbody>
<tr>
<td>Residential / aged care</td>
			<td>91</td>
		</tr>
<tr>
<td>Commercial office</td>
			<td>13</td>
		</tr>
<tr>
<td>Education / affiliated student housing</td>
			<td>8</td>
		</tr>
<tr>
<td>Health and medical research</td>
			<td>7</td>
		</tr>
<tr>
<td>Retail shopping centres</td>
			<td>10</td>
		</tr>
<tr>
<td>Demolition of existing structures</td>
			<td>2</td>
		</tr>
</tbody>
</table>
Considered the wheel house of our city's property development sector, the City of Melbourne accounts for a relatively light one third of all the tower cranes currently in use, with the remainder throughout greater Melbourne.

As always crane use for residential projects is at the heart of the census, accounting for 70% of all tower cranes erected at the moment. While those dedicated to commercial use have seen insignificant change over recent years, the number dedicated toward student housing and retail purposes have served to spike the crane count.

<figure><a class="colorbox colorbox-insert-image" href="https://res.cloudinary.com/dz9xllyip/image/fetch/q_auto:good/https://s3-ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/pictures/article-images/img_0453.jpg" rel="gallery-all" title="Ringwood's Eastland development providing a boost"><img alt="" class="image-article-full-width-580px" height="309" src="/sites/urban.melbourne/files/styles/article_full_width_580px/public/pictures/article-images/img_0453.jpg?itok=Jf7gj9NV" title="Ringwood's Eastland development providing a boost" width="580"></a>

<figcaption>Ringwood's Eastland development providing a boost</figcaption></figure>Probuild are handling large-scale expansions of Eastland Ringwood, Chadstone and Pacific Werribee, which now account for ten tower cranes dedicated toward the retail aspect of these three projects. The combined monetary value of these three developments is about the $1.5 billion mark, with The Glen and Westfiled Knox also shaping up for regeneration during the latter part of 2015, which is valued at a combined $1 billion.

The high demand for cranes in Melbourne has seen new operators flood into the market in recent years. Latest to appear on the Melbourne skyline is Sydney-based Titan Cranes who provided cranes for Leighton Contractors' Melbourne Airport expansion, and are now present at Knox Private Hospital in Wantirna.

<figure><a class="colorbox colorbox-insert-image" href="https://res.cloudinary.com/dz9xllyip/image/fetch/q_auto:good/https://s3-ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/pictures/article-images/img_0864.jpg" rel="gallery-all" title="Titan Cranes at Melbourne Airport during late 2014"><img alt="" class="image-article-full-width-580px" height="387" src="/sites/urban.melbourne/files/styles/article_full_width_580px/public/pictures/article-images/img_0864.jpg?itok=NwHIEM3b" title="Titan Cranes at Melbourne Airport during late 2014" width="580"></a>

<figcaption>Titan Cranes at Melbourne Airport during late 2014</figcaption></figure>Peering into the next Apartments.com.au crane count toward the last quarter of 2015, a host of high profile apartment towers will keep demand for tower cranes buoyant. The likes of Lighthouse, Australia 108, Victoria One, Tower Melbourne and EQ Tower are set to receive multiple tower cranes each over the course of 2015, with the shortest of these five being EQ Tower at 200 metres.

Elsewhere a rash of projects in Docklands will see the precinct attract its fair share of tower cranes while Doncaster looks like a construction hot spot to watch in the latter part of the year.
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The biannual Urban.com.au crane count - March 2015

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For the past three years, dwelling construction nationwide has been rising at an unprecedented rate.
New home construction was up 11% in FY2013, up a further 12% in FY2014 and is on track for another 8% rise in the current financial year.
The Housing Industry Association expects almost 200,000 new homes to be built this financial year or be under construction by June. This is a national record.
Across the nation, residential building approvals have risen 12% in the past 12 months, including a 19% rise in Victoria, a 14% rise in Western Australia and a 34% rise in Tasmania.
We’re at the point where we’re building too many new homes in some locations – and in particular far too many inner city apartments.
But, rather incredibly, the developer lobby is still crying shortage.
Last week the Daily Telegraph, never one to let the facts get in the way of a cheap headline, claimed Sydney is facing “a housing crisis with a staggering 190,000 shortfall in homes needed to house the growing population”.
The newspaper claimed it had obtained “an exclusive report” which revealed the breathtaking news that “Sydney councils have failed to approve new dwellings fast enough to meet demand, and were now partly responsible for the sharp rise in home prices in Sydney”.
Where did this priceless document come from? Yes, you guessed it, it was another press release from the developer lobby, represented in this case by the Property Council of Australia, singing its usual mantra.
In case you’ve forgotten how the manta goes, here it is: We have a chronic housing shortage crisis, despite all the contradictory evidence. And there’s only one way to fix it: give us our wish list and we can make the crisis go away. It’s purely coincidence that all the measures we’re recommending are highly advantageous to developers and builders. No, really, we’re serious.
Here’s the Sydney newspaper’s take on these stunning “research” findings: “More alarming was the finding that over the next decade, families would struggle to find anywhere to live, with an estimated shortfall of almost 20,000 homes a year being approved at current rates.”
So the “staggering” shortfall isn’t a fact, but a forecast concocted by people with a vested interest in having the claims believed.
“Sydney councils need to turbocharge housing supply because right now home buyers and our economy are paying the price,” NSW Property Council executive director Glenn Byres said, if you can believe the Daily Telegraph.
But the Newcastle Herald stretched the truth even further with the ludicrous claim that the Hunter region had a serious shortage of housing.
This region’s property market has been in rapid reverse for the past two years for the opposite reason: an alarming oversupply.
So how did the Newcastle Herald come to this stunning conclusion in the face of all the evidence? It was, once again, the Property Council, which has obviously been pumping out press releases all over the country as part of its relentless, remorseless and baseless campaign to pressure governments into concessions.
The newspaper wrote: “The supply of new housing in the Lower Hunter has fallen short of government targets by more than 23,000 homes in the past decade, with the deficit set to worsen to nearly 30,000 by 2024, a report done for the Property Council says.”
It would be hilarious were it not so serious. The reality is that developers, seeking to exploit the coal mining boom, flooded the Hunter region with far too many new homes – and, with that unerring ability of developers to get their timing wrong, this coincided with a collapse of resources-related demand.
In Singleton, residential vacancies rose from around 1% in early 2012 to about 8% in mid-2013, and remain high at close to 6%. Prices have dropped 15% and it takes six months on average to sell a house in Singleton.
In Muswellbrook, vacancies went as high as 15% and are currently close to 10%. It takes six months on average to sell a house, but only if you’re willing to knock 12% or so off your asking price. Prices are down 7% in the past year.
Cessnock got off relatively lightly, with vacancies going only as high as 6%, but in Greta they were close to 10% and remain above 5%. According to Domain, the average time on market to sell a Greta house is about eight months.
And in Branxton, vacancies hit 15% in 2013, were still 12% in mid-2014 and are currently 6%.
But, hey, don’t be fooled. There really is a shortage. The Property Council wouldn’t say it if it wasn’t true.
Indeed, it made the same sinister warning as the Sydney-based crowd. “Home buyers will pay the price if changes aren’t made to ensure the provision of more housing, the industry group has warned,” intoned the faithful Newcastle Herald, not one to rock the local boat by asking a tough question or two.
One possible question might have been: “Are you out of your freaking minds?”
The Newcastle Herald report, similar to the Daily Telegraph one, talked about the need to “turbo-charge” housing supply in the Hunter region. So clearly the Property Council has spewed forth the same basic press release everywhere, regardless of the local situation.
Hence the farcical outcome in Newcastle, with the local rag claiming that a grossly oversupplied market has a shortage.
TERRY RYDER is the founder of <a href="https://hotspotting.com.au/" target="_blank">hotspotting.com.au</a>. You can <a href="https://mailto:ryder@hotspotting.com.au" target="_blank">email him</a> or follow him on <a href="https://www.twitter.com/hotspotting" target="_blank">Twitter</a>.
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terryryder-YECXbqmri2

The development lobby is still crying shortage: Terry Ryder

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GUEST OBSERVATION
Ex-NSW Premier Nick Greiner has <a href="https://www.smh.com.au/comment/salt-and-pepper-sydney-social-housing-redevelopment-holds-promise-20141204-11uad3">proposed</a> that land value embedded in public housing estates be recycled to generate new social housing - by redeveloping the estates into higher density living. Greiner claims by using uplift in land values it won’t cost the government a cent.
A similar argument was made recently at the <a href="https://www.urbangrowthnsw.com.au/news/the-bays-precinct-sydney-international-summit-2014.aspx">UrbanGrowth NSW Summit</a> on Sydney’s Bays Precinct renewal project.
Have we finally found the Holy Grail for affordable housing? Is it really that simple – just target existing public land (or rundown estates), redevelop at unusually high density, and use the associated value uplift to secure a substantial slice of low cost homes within the overall project?
This is a neat political trick. It puts the onus on those in the community who might oppose greater density to do so at the expense of the most disadvantaged. How much affordable housing do you want? How much higher do you want the development to go? Government can effectively wash its hands of the decision. It’s a simple land deal.
But its not that simple, of course. More importantly, the solution to our affordable housing crisis lies not just with state governments, but is very much due to a failure at the top of our federal policy system.
A national issue
The current Senate committee <a href="https://www.aph.gov.au/Parliamentary_Business/Committees/Senate/Economics/Affordable_housing_2013/Terms_of_Reference">inquiry into affordable Housing</a>, due to report in March 2015, recognises housing policy is an issue of national significance that calls for national action. Many of the most significant government interventions in our housing market (think negative gearing and capital gains tax concessions, immigration and social security policy) are controlled at the federal level and not by the states and territories.
There are, of course, complexities to the Commonwealth government’s role in an area of “domestic policy” of this kind. Under our federal system, Canberra’s ability to impose housing system reforms would be limited, even under a government keen to do so. But neither is it tenable to claim that the Commonwealth has no remit or responsibly to lead and co-ordinate in this area.
State governments are (increasingly) starved of the resources necessary to run housing programs effectively and the essential coupling of housing, urban and infrastructure policies that should drive new residential development has been largely absent, another point recently lamented by Greiner.
Unfortunately, over a long period the scope for Commonwealth leadership in housing policy has been progressively undermined by vacillating political interest and a hollowing out of public service capacity in Canberra.
The US Housing and Urban Development administration is one example of how things could be done differently. It is resourced and empowered by the US government to play a role for America as a whole. Under the Abbott government, Commonwealth leadership capacity on housing policy has been further weakened by the abolition of the “housing minister” designation, and by the scrapping of the Housing Ministers Advisory Council. Scope for evidence-based policy in this area has been damaged by the disbandment of the National Housing Supply Council.
Although the majority of Australians are affordably housed, a rapidly growing minority is not. This is largely because what remains of our national policy framework was essentially created for an earlier age, when home ownership was a readily achievable goal for most households and property prices were not driven into the stratosphere by an overstimulated rental investment market. Moreover, housing policy has shifted substantially to a reliance on the market to supply the housing needs for all, including lower-income households.
Thanks to these changes our housing system is becoming increasingly dysfunctional. As well as undermining the welfare of lower income groups, this imposes growing economic costs on the whole country. Increasingly, for example, the working poor are being pushed to the fringes of our capital cities, remote from the job-rich inner areas, compounding their disadvantages in a difficult job market. While governments may sometimes speak of well-located “affordable housing” as desirable, there has been little or no effective action to counter intensifying spatial segregation to which housing markets are contributing.
Our federal politicians cannot absolve themselves of responsibility in this situation. It’s now over 20 years since Australia had anything resembling a national housing strategy. Since then, with only a brief exception around 2008, successive governments have turned a blind eye, failing to face up to the new social and economic challenges requiring housing policy reform.
And there are new dilemmas, such as growing numbers of people facing old age in rental housing as home ownership rates decline, especially among the Gen X and Y cohorts – the children and grandchildren of the Boomers for whom post-war housing policy created a previously unseen bonanza of property wealth. Similarly, with growing numbers of families living in private rental housing – many destined to remain there in perpetuity (the so-called “Generation Rent”) – the standard tenancy framework of short term lettings with no security and few rights to make a home is increasingly unsuitable. Sooner or later, this issue will gain political traction, demanding government intervention.
Article continues on the next page. Please click below.
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Market failure
Left to itself, the market does not generate well-located housing of reasonable quality that is affordable to less affluent Australians. Neither is there a simple answer to this in the form of increased gross housing supply, which some claim would be unleashed by further planning deregulation. The idea that a rapid upswing in new building sufficient to affect house prices would significantly improve affordability (even if the building industry could achieve this) is in any event laughable – how many developers would continue to build if prices were to fall? As history has shown time and again, only with active government intervention can a nation overcome the market’s failure provide adequate levels of affordable housing.
This issue is complex but not insoluble if addressed through smart policy. This should include:
<ul>
<li>national tax reform directed at achieving improved housing affordability</li>
<li>a national strategy for affordable housing supply</li>
<li>a national mechanism for financing affordable housing at scale via proven and cost-effective methods, such as a national housing supply bond</li>
<li>a larger role in housing provision for the non-profit sector</li>
<li>connecting infrastructure, housing and planning strategies at city and local scales to deliver integrated affordable housing outcomes on the ground.</li>
</ul>
The idea of simply achieving more affordable housing on the back of density bonuses, while a possible component of any local solution, is a myth that will not suffice long term. What happens when we run out of public housing estates to renew? And would this work in the lower value outer suburbs where much public housing is located?
The provision of affordable housing cannot be left to the market: it requires a commitment of government at all levels to develop a well-integrated and properly funded package of policies. With the “reforming Federation” debate under way, now is the time for these arguments to be had.
<img src="https://counter.theconversation.edu.au/content/35372/count.gif" alt="The Conversation" width="1" height="1">Bill Randolph is director, City Futures - Faculty Leadership, City Futures Research Centre, Urban Analytics and City Data, Infrastructure in the Built Environment at UNSW Australia.
 Hal Pawson is associate director - City Futures - Urban Policy and Strategy, City Futures Research Centre, Housing Policy and Practice at UNSW Australia.
Vivienne Milligan is associate professor - City Futures Research Centre, Housing Policy and Practice at UNSW Australia.
This article was originally published on <a href="https://theconversation.com" target="_blank">The Conversation</a>. 
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Australia needs more than dense housing arguments

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The ABS released its <a href="https://www.propertyobserver.com.au/https://www.abs.gov.au/ausstats/abs@.nsf/mf/8755.0">Construction Work Done</a> figures for the September quarter which underscored two key systemic risks for Australia's economy and housing markets, with the following alarm bells now sounding loud and clear:
<ul>
<li>The long anticipated "mining construction cliff" is now well underway, with engineering construction spend registering a significant 12% decline over the past year to be 15% off from the peak; and</li>
<li>A forthcoming glut of new build residential properties, particularly of attached dwellings: units and apartments.</li>
</ul>
Let's take quick 'shufty' in four short parts.
Part 1 - Total Construction Slides
Total construction work done remains elevated in historical terms at a seasonally adjusted $51,146 million in the September quarter. 
From a macro-economic perspective, of course, it is the trend which is of importance, and total construction has now passed its peak, declining further by a seasonally adjusted 2.2% in Q3 to be 5.1% lower over the year in chain volume measures terms.
 <img src="https://1.bp.blogspot.com/-UJRluTolNf8/VHWiF3ZHrMI/AAAAAAAAReM/2j4DmNQ9inY/s1600/CONS1.jpg"> 
This was a slightly undercooked result versus expectations, and hardly the most auspicious of starts for the inputs into the Q3 National Accounts. 
Of significantly greater concern is what will eventuate for mining and engineering construction prospectively, with total spend already being some 12.1% lower in chain volume measures terms than only one year ago.
With commodity prices tanking it will be increasingly difficult for marginal projects, such as some of those in the coal sector, to pass through feasibility studies to the construction stage, thus reinforcing the entrenched downtrend.
<img src="https://1.bp.blogspot.com/-1-fZYcR6_eQ/VHWiGQ6q6VI/AAAAAAAAReQ/OD3LSD8ym78/s1600/CONS2.jpg">
Moreover, the sheer scale of the mining construction boom on the way up (even today engineering comprises more than 56% of construction expenditure reported here at a punchy $28,710 million in Q3) means that there must eventually be an equivalent drag on the way back down - a drag which will be nigh on impossible for work done in the other building and construction sectors to offset.
Low interest are thus clearly set to be with us for some time to come, which must in turn impact investment decisions and other construction trends, as the financing component of new developments remains historically speaking very cheap.
Part 2 - The Mining Cliff Cometh
The engineering construction data by state unsurprisingly revealed that total spend in Queensland and Western Australia is now receding sharply. 
Other states which benefited less dramatically from the boom years are also now in decline, albeit to a less significant extent, as the resources boom continues to transition into the export phase from the construction phase.
<img src="https://4.bp.blogspot.com/-TyUSFygg5n8/VHWiI6c7wfI/AAAAAAAARe4/vH4nlSpe9c0/s1600/CONS8.jpg">
The ABS provided few details concerning what caused the tremendous spike in Q3 engineering construction in the Northern Territory, although <a href="https://www.smh.com.au/business/mining-and-resources/ugl-joint-venture-faces-damages-claim-over-550-million-power-plant-at-ichthys-20141106-11i4ar" target="_blank">cost blowouts</a> at the Ichthys LNG project have been reported elsewhere related to the struggling UGL, while <a href="https://www.inpex.com.au/news-media/ichthys-lng-project-updates/" target="_blank">Inpex</a> continues to report project progress in its regular updates. 
From a national perspective, we must now expect further declines ahead, and therefore tomorrow's capex data release takes on an additional level of interest!
Article continues on the next page. Please click below. 
<hr class="system-pagebreak">
Part 3 - NSW Now Leads Building Work Done
With a massive 54% seasonally adjusted increase in non-residential building in New South Wales since Q1 2012 (mainly related to Sydney projects) in concert with a solid pipeline of residential building, NSW now leads the nation in terms of building work done, which is promising news for the state economy.
 <img src="https://4.bp.blogspot.com/-8Ave3nCKlDw/VHWiHvylSWI/AAAAAAAARe0/AwTLTNk3JCA/s1600/CONS5.jpg">
But while an inherent infrastructure and dwelling deficit are working in favour of the NSW economy, some other states are building too much of what they do not need. 
Residential building work done has increased by 9% over the past year. However, new house building has now slipped past its cyclical peak, representing adverse news for the construction sector,  and note the alarming trend of the red line below for "other new residential" building.
We have known for many months of course that Australia has been approving far too many apartment buildings in certain locations, and now these building approvals are becoming a stark reality, showing up in the construction data as an unprecedented spike which is still booming.
Yikes.
<img src="https://1.bp.blogspot.com/-b--ys90pFp4/VHWiHOi5W0I/AAAAAAAAReg/u-RxFDjckdY/s1600/CONS4.jpg">
New Builds Risk Flashing Red - Systemic Risk?
The next three years will see Australia break many all-time records in the residential property space.
These include the highest annualised rate of apartments constructed in Australia's history, and thus in turn record developer kickbacks and commissions paid to 'investment advisers' (i.e. developer salesmen) for the sourcing of willing interstate buyers of the detritus which developers have been unable to flog themselves (itself quite a notable achievement in the prevailing climate of cheap credit). And the inevitable corollary will be a record number of investors losing their hard-earned cash on dud new development investment properties.
We would never recommend new build units anyway from a risk management perspective - they are too expensive and inherently lacking in scarcity value - but we cannot be any clearer on this point at this stage of the cycle. Too risky. The Block? Just as an infestation of cookery shows in Australia has paradoxically coincided with a record boom in the consumption of takeaway food, similarly the glut of TV renovation shows has not led to an equivalent uptick in major home renovations. There have been many murmurings of a boom in renovation intentions but this is not to be evidenced here in the "Alterations &amp; Additions" data, reflected by the moribund trend in the green line of the above chart.
The Housing Industry Association (HIA) forecasts a miserly 2% increase in renovations work in the year ahead following on from a 0.9% increase over the past year. 
"Every little helps" from a macro-economic perspective, of course, but as the above charts clearly demonstrate these renovations numbers are merely a drop in a very large ocean of construction spend as compared to the forthcoming declines in engineering work to be completed.
Part 4 - Residential Building by State
Lastly for today, a glance at residential building by dwelling type at the state level. We already know that Victoria has been building huge numbers of new houses as compared to elsewhere, but new detached house building has now surreptitiously tiptoed past its cyclical peak.
 <img src="https://3.bp.blogspot.com/-qC8PPX_pwAA/VHWx8UZqmDI/AAAAAAAARfU/GgajBovwWUw/s1600/CONNNN.jpg">
As you can see from the chart below, it is new units and apartments which are the greatest risk area for this residential property market cycle, as developers construct unprecedented volumes of attached dwelling stock. With apartment construction hitting record heights there will also inevitably be a glut of new stock to be sold on by commission-hungry agents. Caveat emptor!
Our previous detailed analysis of the data including <a href="https://petewargent.blogspot.co.uk/2014/11/sydney-property-market-booming-but" target="_blank">here</a> and <a href="https://petewargent.blogspot.co.uk/2014/09/is-sydney-heading-for-oversupply-of" target="_blank">here</a> has shown that apartment approvals in Sydney have long since rolled over and accelerating Greater Sydney population growth reduces oversupply risk on a city-wide basis to some extent, despite some pockets of new stock over-supply (cf. CBD, inner south). 
However, it must also be observed here that with unprecedented construction of attached dwelling stock set to take place through the 2-3 years ahead, particularly in Brisbane, Melbourne, Perth and Sydney, but also elsewhere, there will inevitably be some blood spilt down the track for a substantial number of today's purchasers of new and off-the-plan properties.
 <img src="https://2.bp.blogspot.com/-E4kcsCXd9lI/VHWiIRy8wqI/AAAAAAAAReo/mb-xOzjFmVI/s1600/CONS7.jpg">
Scarcity Value
Always remember that, as in any asset class, buyers of and investors in residential property should look to purchase an asset with an element of scarcity value. In this respect, with building approvals breaking record highs in 2014 - a glut of new supply being precisely the polar opposite of scarcity - and the price of new stock at sky high levels, it is therefore almost by definition the most risk-laden time to buy new property that we have yet seen.
One of the many problems with new build investments is that all too often the choice boils down to an over-priced house (as compared to established stock) in a fringe suburb where few people want to live, which is a poor investment, or an over-priced apartment in an suburb which is set to be flooded with new apartments, which is frequently an even worse prospect. Alas there will forever be some nailed on guaranteed winners from this phase of the construction cycle, including the developers who have long land-banked their own gains from key development sites, and the so-termed 'investment advisers' plundering <a href="https://www.theaustralian.com.au/business/wealth/high-price-for-free-advice/story-e6frgac6-1226454402730" target="_blank">thumping sales commissions</a> on new stock. Scant consolation to be found for those at the end of the food chain who lose out, though.
You can visit <a href="https://allenwargent.com/" target="_blank" rel="nofollow">AllenWargent</a> property buyers (London, Sydney) or Pete's <a href="https://petewargent.blogspot.com/" target="_blank" rel="nofollow">blog</a>.
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>' .
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Latest construction data sets alarm bells ringing

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Total dwelling approvals declined 11%, in seasonally adjusted terms, to a 13 month low of just over 15,000 in September, according to the Australian Bureau of Statistics’ latest building approval data.
Tasmania, South Australia and Western Australia recorded an uptick in seasonally adjusted new dwelling approvals in September, at 7.4%, 2.9% and 2.1% respectively. However, drops were seen in Victoria (19.8%), Queensland (8%) and New South Wales (7%).
Detached house approvals dropped by 3% over the month, though are still 7.9% up on the figure 12 months prior. Multi-unit dwelling approvals were significantly weaker over the month, recording a 21.5% fall over the September and a 34.2% drop year on year.
The data represents a potential tipping point in the home building cycle, according to the Housing Industry Association’s (HIA) senior economist Shane Garrett, who notes that dwelling approvals have likely peaked.
 “Monthly approvals reached over 17,000 earlier in the year. During September, we barely hit 15,000,” Garrett said.
“The reduction in new home building is probably an indication of the patchy state of the labour market, as well as increased consumer woes post-federal budget.”
“Recent HIA research shows an annual requirement for 180,000 dwellings to be built each year,” Garrett said.
“The fact that we seem to be drifting below this level of output again is a worrying sign. During the early days of the housing upturn, HIA had been vocal in its calls for policy to facilitate new housing supply to be delivered more readily.”
Master Builders Australia’s chief economist Peter Jones said that despite the drop in approvals they remain confident.
“The residential building upturn looks set to hold at strong levels as apartment approvals ‘take a breather’ after the previous red hot growth phase,” said Jones.
“The 11% seasonally adjusted decline in September was driven by a fall of 22% seasonally in units and apartments due mainly to the longer lead times in gaining approvals for apartment developments and is expected to bounce back.”
Jones said that builders are keen to see lift in approvals for detached houses in order to keep up momentum.
“In the three months to September the number of approvals topped 50,000 for an annualised 200,000 following on from the 194,000 recorded in financial year 2013/14,” he said.
The Urban Taskforce has also expressed concern over the drop in approvals, particularly in New South Wales.
“The apartment market is vital for housing supply in NSW with recent approvals running at around 70% of all homes. Our concern is that the easy sites have now gone and that the more difficult sites will find approvals harder to get. It is important that support for growth at state and local government continues," said Urban Taskforce CEO Chris Johnson.
“Sydney, in particular, must keep the support for new housing as we require 33,200 new homes each year and only completed 22,750 last financial year. While recent improvements in approvals have been positive this latest downturn in apartments is a worry," he said, pointing to the need for a simplified planning system.
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