<a href="https://www.apartments.com.au/developers/sunland-group">Sunland Group</a> has officially lodged plans for its first Gold Coast apartment project since the departure of the Abedian family from the company three years ago, unveiling a new high-rise proposal for a prominent Broadbeach corner site on Old Burleigh Road.

The application was submitted by an entity directed by Tom Jamieson, stepson of longtime Sunland leader Soheil Abedian, and Riaz Rezvanipour, brother-in-law of Sahba Abedian, Soheil’s son.

Sunland acquired the 1,283 sqm site on the corner of Old Burleigh Road and Armrick Avenue for $9.5 million late last year and is now seeking approval for a <a href="https://www.apartments.com.au/new-apartments/99-101-old-burleigh-road-broadbeach-qld-4218">42-storey tower with 81 apartments</a>.

<img alt="First look: Sunland Group returns to Broadbeach with new Old Burleigh Road tower plans" data-entity-type="file" data-entity-uuid="fea2946d-90ee-4cfc-babe-2a8ad5db2cb6" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/pers.png?VersionId=BV0fihJw31nDIQ8ozY_h3GbS8mxDyhnm" />

Designed by <a href="https://www.apartments.com.au/architects/contreras-earl-architecture">Contreras Earl Architecture</a>, the proposed tower at 99-101 Old Burleigh Road would deliver a predominantly larger-format apartment mix aimed at the owner-occupier market. Plans include 17 two-bedroom apartments, 55 three-bedroom apartments, and nine four-bedroom residences across 35 residential levels.

The development also incorporates three basement levels, four podium parking levels, two levels of communal recreation facilities, and rooftop plant and equipment. A total of 189 car spaces are proposed, significantly exceeding the 90 spaces required under the planning scheme.

The architecture adopts a sculpted, curvilinear form, with deep wraparound balconies and integrated landscaping intended to soften the tower’s vertical expression. The planning report states the building’s “slender footprint/form provides a complimentary yet varied built form within the local streetscape” and contributes to “a varied, yet ordered skyline.”

Contreras Earl noted in its Architectural Statement that from the early stages, the project addressed a fundamental challenge: how to accommodate the required residential yield while avoiding the conventional model of a tower sitting on a rigid, fully resolved parking podium.

“The most direct response would have been to consolidate parking into a singular, flat podium and extrude a repetitive tower above,” the statement said. “While efficient, this approach would result in a consolidated built form with limited engagement with the surrounding landscape and public realm.”

Instead, the conventional podium model was “deliberately rejected”. The architects described the base of the building as “a landscaped architectural condition where structure, planting and circulation are integrated”.

“Rather than presenting a continuous built mass, the base of the building is articulated through a series of concrete planter elements that organise the podium into a fragmented system,” the statement said. “This approach reduces the perceived bulk of the lower levels while establishing a more permeable interface with the streetscape and adjacent open space.”

<img alt="Sunland" data-entity-type="file" data-entity-uuid="923fad8d-c960-4527-8fbe-975cf1ddf88d" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-25%20at%2010.32.03%E2%80%AFAM.png?VersionId=pngwb0hYOIUpq9vDw6F2EsOiVuHF3DiX" />

&nbsp;

The site sits within the High Density Residential Zone and inside the City of Gold Coast’s unrestricted “HX” building height area, where the planning framework anticipates intensified residential development tied to the expanding light rail corridor. The planning report notes the area is undergoing “transition toward more intense development forms” given its proximity to Broadbeach, Surfers Paradise, and high-frequency public transport infrastructure.

Positioned directly opposite Broadbeach Park and within walking distance of Florida Gardens light rail station, the development would sit among a rapidly evolving stretch of Old Burleigh Road that has become one of the Gold Coast’s most active apartment development corridors.

The application joins a growing pipeline of luxury residential projects reshaping Broadbeach, including nearby developments by 5Point Projects, Polycell, and Graya.

The planning report argues the project contributes toward the Gold Coast’s long-term housing targets under the South East Queensland Regional Plan, which forecasts the need for more than 100,000 additional high-rise dwellings across the city by 2046.

<section data-scroll-anchor="false" data-testid="conversation-turn-4" data-turn="assistant" data-turn-id="request-WEB:84a2af5e-d7cf-4ddf-922a-f4d44d6c6caa-1" data-turn-id-container="request-WEB:84a2af5e-d7cf-4ddf-922a-f4d44d6c6caa-1" dir="auto">
The Abedian family departed Sunland Group in late 2023, ending a four-decade association with the company, and subsequently established the private development firm Abedian &amp; Co. The group is currently delivering <a href="https://www.apartments.com.au/new-apartments/greenmount-residences-cnr-hill-street-and-marine-parade-coolangatta-qld-4225">Greenmount Residences</a> at Rainbow Bay and recently launched <a href="https://www.apartments.com.au/new-apartments/18-mary-avenue-14-18-mary-avenue-broadbeach-qld-4218">18 Mary Avenue</a> in Broadbeach.
</section>

Joel Robinson

First look: Sunland Group returns to Broadbeach new apartment market with new Old Burleigh Road tower plans

The Minns Labor Government has established the new Bays West Delivery Authority to lead the development&nbsp;of the Bays West Precinct and Blackwattle Bay Precinct.&nbsp;

The Authority is charged with creating Sydney’s newest precinct, a thriving, connected, sustainable hub with White Bay Power Station as its cultural heart. Its vision is to build on the area’s natural, cultural and industrial history to shape a vibrant new neighbourhood.

The precinct will deliver up to 8,500 well-located homes, including a minimum of 10 per cent affordable and essential worker homes. Combine new housing with public open space, opening public access to the waterfront for the first time in more than 100 years, while retaining important deep-water facilities to support Sydney’s working harbour.

Located just minutes from the Sydney CBD and connected to a world-class metro, ferry, walking and cycling links, the Bays West precinct will rebalance housing growth towards well-serviced inner-city locations and help tackle the state’s housing crisis.

The Bays West Delivery Authority,&nbsp;an agency of the Department of Planning, Housing and Infrastructure, will report to the NSW Minister for Lands and Property who already has oversight of major precinct renewal projects including at Blackwattle Bay and Barangaroo.

As part of the broader Bays West transformation, the Minns Government recently announced that a proposal from Lendlease to redevelop part of the Bays West Precinct has progressed to Stage 2 of the NSW Government’s unsolicited proposals process.

<img alt="Sydney" data-entity-type="file" data-entity-uuid="2ed71eb9-d8e8-4fa7-b9d1-de4531dcf2f3" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-25%20at%209.42.31%E2%80%AFAM.png?VersionId=IDryFIbped9SNDg72LEN_EecvhUsOPvp" />

The Minns Labor Government has also confirmed the Bays West precinct will have a new suburb name. This will be the first major suburb built in close proximity to Sydney’s CBD in decades and will encompass the area currently being referred to as Bays West, including Glebe Island and the White Bay Power Station. Served by a new Metro station just five minutes from the CBD, it will become one of the most populous suburbs in the Inner West and one of Sydney’s premier cultural destinations.

An early works program is taking shape, which&nbsp;includes the first stages of an international design competition.&nbsp;

The aim of the Bays West&nbsp;International&nbsp;Design Competition is to&nbsp;ensure design excellence is embedded in the project from the start. The competition will deliver an&nbsp;urban framework that defines the character, ambition and long-term identity of&nbsp;this&nbsp;former industrial precinct as it transitions to a vibrant, inclusive and sustainable residential&nbsp;neighbourhood.

The competition will be led by the Bays West Delivery Authority in partnership with Government Architect NSW.&nbsp;

It will launch with an invitation for a global Expressions of Interest, before moving to an invitation-only stage that will be assessed by a panel that&nbsp;will provide advice to Cabinet who will select a winner.

Premier of NSW, Chris Minns said the establishment of the new Authority is the first step in transforming the Bays West precinct into a vibrant, livable suburb minutes from the Sydney CBD and two stops from Hunter St Station on the Metro West line.

“The Authority will deliver well-located homes close to the heart of the city and integrate the new precinct with Blackwattle Bay and the new Sydney Fish Market.

“This is a generational opportunity to build a new suburb on the city’s edge and open the harbour foreshore to the public for the first time in a century.”&nbsp;

Minister for Lands and Property Steve Kamper said the new Bays West Delivery Authority established by the Minns Government will turbocharge the development of Sydney’s newest suburb.

“The Authority is working at a record pace to deliver an international design competition, planning pathways and a financial model so that this development benefits Sydney with well-designed homes in a central location, close to public transport, jobs, entertainment and essential services.

“If we want Sydney to stay liveable and affordable, we need to be bold about using underutilised government-owned land to deliver homes for the future while making sure essential working harbour functions can be accommodated.”

Bays West Delivery Authority established to "turbocharge" Sydney’s newest suburb

Around 400 additional homes could be built at Southwark Grounds on Port Road, lifting total site capacity from 1300 to around 1700 dwellings.

A recently approved code amendment would allow apartment towers of up to 14 storeys in some areas of Renewal SA’s redevelopment of the former West End Brewery.

Renewal SA Acting Chief Executive Shane Wingard said he welcomed the code amendment, with the increase in heights and homes making a positive impact on the supply of high-quality, well-connected housing close to the city.

“By going higher across some parts of Southwark Grounds, we are adding a substantial number of very well-located homes with little impact on project delivery time or planned open space,” Mr Wingard said.

Since the project officially launched in 2025, Mr Wingard said more than 12,000 enquiries had been received about living at Southwark Grounds.

“The very strong early interest we’ve seen since homes were first released in the precinct reinforces our plans to create more housing opportunities,” he said.

The Southwark Grounds code amendment was launched in December last year, with community engagement undertaken over five weeks from January.

It proposed increasing maximum building heights from eight to 14 storeys on the eastern section of Southwark Grounds, and to 12 storeys across the remainder of the site, with minimum building heights ranging from two to four storeys.

The code amendment was implemented through an Early Commencement policy in late January, allowing developers to quickly explore the viability of increased height and housing yield while other planning processes continue.

One of the first developers delivering apartment sites have already finalised redesigns to increase the number of apartments following the code amendment.

Samaras’ development adjacent to the future Colonel Light Park is now planning to deliver 125 apartments across 11 storeys, significantly greater than original plans of around 50 apartments across four storeys.

The developer is also exploring the potential for additional affordable housing outcomes.

Most of the apartments at Southwark Grounds will be delivered within a master-planned precinct on a large parcel of land on the eastern portion of the site, covering around two-thirds of its 8.4 hectares.

Wingard said detailed precinct planning over the coming months may identify further opportunities to increase yield further that could see total apartment numbers at Southwark Grounds, exceed this number.

Affordable homes at Southwark Grounds will also see a net increase, with Renewal SA maintaining its commitment to a minimum of 20 per cent affordable housing across the development.

&nbsp;

&nbsp;

Civil works have begun across the site, with construction under way on the first new roads surrounding a townhouse precinct in the south‑west corner of Southwark Grounds. This includes Renewal SA’s 17 Founder’s Row homes, which are on track for completion by Christmas.

“We expect to have people living at Southwark Grounds by the end of the year, so delivering roads and public spaces for those residents is among our highest priorities.”

Construction of 40 townhouses off Anderson Street, known as West Village and being delivered by Contour, is forecast to begin in mid‑2026. Kolabb’s Anderson Lane development will follow shortly after, delivering a further 26 townhouses.

Southwark Grounds is a state government‑led urban renewal project now set to deliver around 1,700 homes over the next decade.

Homes will be supported by a supermarket, a range of retail and hospitality offerings anchored by a revitalised Walkerville Brew Tower, a childcare centre, car parking and well‑connected public spaces.

400 new homes planned for Adelaide's former West End Brewery site

Brisbane developer&nbsp;<a href="https://www.apartments.com.au/developers/cavcorp">Cavcorp</a> has lodged plans for a new mixed-use residential development at <a href="https://www.apartments.com.au/new-apartments/55-wyandra-street-teneriffe-qld-4005">55 Wyandra Street</a>, Teneriffe, anchored by an 85-metre public laneway designed to reconnect the suburb’s riverfront with the Gasworks precinct.

The buildings, known as Teneriffe House and Teneriffe Lane, would replace the existing Queensland Cotton head office site with a 15-storey residential tower transitioning to eight storeys toward Helen Street. The project has been designed by Plazibat Architects and lodged as a code assessable development application for 93 apartments across a 3,401 sqm mixed-use site within the Newstead and Teneriffe Waterfront neighbourhood plan.

Central to the scheme is the transformation of an existing service easement into a publicly accessible cross-block connection linking Wyandra and Helen Streets. Cavcorp says the new laneway will act as both a pedestrian shortcut and a landscaped civic space between the Teneriffe Riverwalk, ferry terminal, and Gasworks precinct.

<img alt="First Look: Cavcorp unveils Teneriffe House and Teneriffe Lane plans for landmark wellness tower in Teneriffe" data-entity-type="file" data-entity-uuid="26e7f058-b065-4de8-b13d-a2b8cb64dfcc" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/bldg.png?VersionId=sELS0ZKYi361oYipUa1BIKfe_.DLZoFV" />

“The revised proposal delivers a legacy public-realm cross-block link, permanently secured for community use, transforming an existing private easement into a safe, high-quality pedestrian connection between the Teneriffe heritage riverwalk and the Gasworks–Long Island precinct,” the planning report states.

The laneway will sit beneath a large subtropical loggia integrated into the podium levels of the development. The design incorporates deep landscaping, water gardens, lobby spaces, business lounges, and ground-floor apartments to create what Cavcorp describes as a climate-responsive “urban verandah.”

The tower itself has been designed as a slender form with recessed floorplates and curved translucent corners inspired by contemporary Japanese architecture. The building height aligns with the Commercial Road precinct controls, which permit towers up to 15 storeys within proximity to Longland Street.

<img alt="First Look: Cavcorp unveils Teneriffe House and Teneriffe Lane plans for landmark wellness tower in Teneriffe" data-entity-type="file" data-entity-uuid="a8a17d40-43b6-4718-b3fd-67676fcbb485" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/pers%202_1.png?VersionId=i3VwDtp5AmL_8InW7w4qRbDFEpb744Jt" />

The project will comprise a mix of larger-format apartments aimed at owner-occupiers, downsizers, and families. The proposed apartment mix includes 11 loggia apartments across the lower levels, 50 four-bedroom Sky-Terrace apartments from levels three to seven, and 32 Sky-Pool Homes occupying the upper tower levels. The Sky-Pool Homes will feature private thermal plunge pools integrated into oversized balconies.

According to the application, the apartments are intended to reinterpret the scale and character of Teneriffe’s woolstore conversions and Queensland homes within a vertical residential format.

“The sky-pool homes build on Cavcorp’s previous projects and introduce a distinct apartment typology to Teneriffe, informed by both local and international precedent and responding to an identified market demand for enhanced safety, space and amenity,” the planning submission notes.

A major focus of the proposal is its five-level wellness and lifestyle offering, extending from the basement through to the rooftop.

Amenities proposed include a rooftop Swim &amp; Racquet Club with a 25-metre Olympic lap pool and tennis court, coworking spaces and libraries, golf simulators, wine storage, concierge facilities, business lounges, pet wash areas, and rooftop longevity-focused wellness spaces with spas, outdoor fitness zones, and landscaped terraces.

<img alt="First Look: Cavcorp unveils Teneriffe House and Teneriffe Lane plans for landmark wellness tower in Teneriffe" data-entity-type="file" data-entity-uuid="944b352c-49b9-4247-a4c6-5967b4b69fda" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/amenity.png?VersionId=Ed_qKjAtMwFT.5gfl3jiA9QwdWxSMsaX" />

All parking will be concealed within basement levels accessed from Wyandra and Helen Streets. Cavcorp says the deep-basement engineering approach allows the entire ground plane to prioritise landscaping, pedestrian movement, and active frontage rather than vehicle infrastructure.

The development continues Cavcorp’s concentration in Newstead and Teneriffe, where the Brisbane developer has delivered a number of apartment projects including Lucent, Le Bain, and Luminare, as well as the Long Island Wellness Precinct nearby. Several of those projects have received national design and architecture awards, including recognition under Brisbane’s “Buildings that Breathe” program.

Cavcorp unveils wellness-focused Teneriffe House and Teneriffe Lane apartment buildings

Focus Group Investments has lodged plans for a new apartment development at <a href="https://www.apartments.com.au/new-apartments/64-70-hanover-street-fitzroy-vic-3065">64–70 Hanover Street</a> in Fitzroy, seeking to utilise the Victorian Government’s recently introduced Great Design Fast Track pathway to accelerate approvals for the project.

The proposal is among the latest developments to emerge through the state-led initiative, which was established to fast-track well-designed residential projects in activity centres and transport-connected inner-city locations. The pathway allows qualifying developments that meet elevated design and housing benchmarks to bypass traditional council planning timeframes and instead be assessed directly by the Department of Transport and Planning.

Designed by SJB, the development will comprise a mix of apartments above activated lower levels, with a strong focus on architectural articulation, landscaping, and communal amenity. The design response seeks to balance the industrial character of Richmond’s former warehouse precincts with a more contemporary residential form.

<img alt="First look: Focus Group Investments taps Victoria’s Great Design Fast Track for Richmond apartments" data-entity-type="file" data-entity-uuid="abea51cc-d85b-479e-9aef-a589f3b37ca7" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/ground.png?VersionId=e1Kf8EyPWwyiVumtqQ4rM5S4GpOR3CCz" />

Proposed are 63 new dwellings, a wide ranging mix of studio, one-, two-, and three-bedroom apartments, and townhouses and duplexes. They will be spread across a part-three, part-eight storey building.

The Planning and Urban Context Report by Tract says the development is of an "exemplary architectural standard" and has been carefully crafted by SJB Architects.

"Dwellings&nbsp;will benefit from excellent access to natural light, cross-ventilation opportunities and extensive communal space," the report noted.

The architectural material highlights the project’s integration of landscaped elements and communal spaces throughout the building. The proposal also incorporates sustainability initiatives aligned with the Victorian Government’s push for higher-performing apartment developments under the fast-track program.

The Great Design Fast Track was unveiled by the Victorian Government in 2024 as part of a broader housing supply strategy aimed at accelerating the delivery of new homes. Projects assessed through the pathway must demonstrate high-quality architecture, sustainability outcomes, and housing diversity while being located close to public transport and existing infrastructure.

<img alt="First look: Focus Group Investments taps Victoria’s Great Design Fast Track for Richmond apartments" data-entity-type="file" data-entity-uuid="afdbe834-8dc4-4a77-a943-ba07bc927348" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/site_11.png?VersionId=0J657j.TaChAZfp93wqJYBTqSsnREJx2" />

Focus Group, founder and led by Paul De Lutiis, is increasingly active across Melbourne’s inner suburbs, targeting well-connected urban renewal locations suited to medium and higher-density residential development. The Fitzroy proposal continues that strategy, leveraging the area’s strong transport links, established retail amenity, and proximity to the CBD.

Fitzroy has been one of the most popular spots for developers and buyers in recent years. The likes of PACE Development Group, SMA Projects, Crema Group and Chapter Group, currently selling projects in the suburb.

First look: Focus Group Investments taps Victoria’s Great Design Fast Track for Fitzroy apartments

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?

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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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