<p>Lewis Land's latest apartment release within its <a href="https://www.apartments.com.au/new-apartments/harbour-shores-biggera-waters-564-oxley-drive-biggera-waters-qld-4216">Harbour Shores</a> masterplan is targeting one of the Gold Coast's fastest-growing buyer groups, with almost a third of apartments at Solis priced below $1 million.</p>

<p>The seven-storey building at Biggera Waters will comprise 91 apartments, including 24 one-bedroom residences starting from $778,000, a price point Lewis Land says is aimed squarely at first home buyers struggling to enter the Gold Coast market.</p>

<p><img alt="Harbour Shires" data-entity-type="file" data-entity-uuid="e7486e37-22f6-4c92-b212-9b0622070b8f" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-07-08%20at%209.09.34%E2%80%AFAM.png?VersionId=W8MJwJUCf6HkIyl_EVSksnd.QI6MZryY" /></p>

<p><a href="https://www.apartments.com.au/developers/lewis-land-group">Lewis Land</a> Head of Development Michael Long said the developer deliberately allocated a significant proportion of the project to more affordable apartment types.</p>

<p>"First home buyers have been priced out of many parts of the Gold Coast, and we saw a clear opportunity to address this and play our part in a longer-term housing solution," Long said.</p>

<p>"That's why 24 of the 91 apartments being delivered at Solis have been designed and priced for the city's next generation of homeowners, quality one-bedroom apartments, half of which include an additional multipurpose room to maximise space and flexibility.</p>

<p>"This approach places 30 per cent of apartments in Solis under $1 million, and with close proximity to Harbour Town's future light rail extension connecting residents to the city's major employment and knowledge hubs, it's a win for buyers looking to secure their first property."</p>

<p><img alt="Sores" data-entity-type="file" data-entity-uuid="550526d3-73ba-4710-9739-c5f4294a30ef" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-07-08%20at%209.09.29%E2%80%AFAM.png?VersionId=cQQdXHt9wS0UXwZEm5Py5bH_3kAmzyhu" /></p>

<p>Designed by BDA Architecture, Solis will deliver a mix of one, two and three-bedroom apartments, with residences ranging up to 232 sqm. Apartments feature generous balconies and contemporary finishes, while residents will have access to Harbour Shores' lagoon pool, clubhouse, tennis court, gym, yoga studio and sauna.</p>

<p>The focus on first home buyers resonated with purchaser Holly Humphreys, who said she and her boyfriend spent more than a year searching for their first property before shifting their attention from houses to apartments.</p>

<p>"We fell in love with the first house we bid on and got our hopes up, but after repeated knockbacks we learned not to get too attached," Humphreys said.</p>

<p>"We offered at the high end of price guides, but sales kept going even higher. That's where we really struggled and we needed to re-evaluate our budget and our expectations. Standalone houses were off the table, and we pivoted to apartments and townhouses."</p>

<p>Humphreys said it was encouraging to see developers recognising the growing demand from first home buyers.</p>

<p>"There's a growing number of young buyers looking to enter the market earlier because they understand that getting in now can make a real difference as prices continue to rise," she said.</p>

<p>"It's fantastic to see a developer recognise this and then actively take measures to deliver an apartment with us in mind."</p>

<p>Solis is the first development planned within the second stage of the Harbour Shores masterplan, with early works expected to commence in September 2026.</p>

<p>[smartcode_project_cta:default project_id=113271]</p>


Joel Robinson

Lewis Land targets first home buyers at latest Harbour Shores release, Solis

<p>Luxury apartment developer Abadeen has recorded $19.25 million in apartment sales across two of its Lower North Shore developments in the lead-up to the end of the financial year, headlined by the sale of a $6.75 million penthouse at <a href="https://www.apartments.com.au/buildings/koyo-crows-nest-5-rodborough-avenue-crows-nest-nsw-2065">KOYO in Crows Nest.</a></p>

<p>The transactions also included the sale of a newly completed three-bedroom apartment at <a href="https://www.apartments.com.au/buildings/park-residences-cremorne-2-sutherland-street-cremorne-nsw-2090">Park Residences in Cremorne</a> for $6.35 million, with the residence selling shortly after the project's first public inspections following completion.</p>

<p>The sales come as completed, owner-occupier-focused apartments continue to attract strong demand across Sydney's Lower North Shore, particularly from buyers looking for certainty and immediate occupancy.</p>

<p>The penthouse at KOYO spans 491 sqm across a single level and was designed by architect Koichi Takada. The development is one of Abadeen's flagship boutique projects in Crows Nest.</p>

<p>[smartcode_project:default project_id=108800 project_image_fid=370093]</p>

<p>Abadeen Executive Chairman and Founder Justin Brown said buyer activity lifted noticeably in the lead-up to the end of the financial year.</p>

<p>"We saw a clear increase in enquiry levels, inspection numbers and buyer engagement across our completed projects leading into the end of the financial year," Brown said.</p>

<p>"Buyers have become far more decisive over the past six months. The combination of improving confidence, limited supply and the ability to physically inspect completed residences is creating strong competition for premium apartments in the best locations."</p>

<p>Brown says the&nbsp;response to Park Residences following completion has been particularly strong.</p>

<p>"Buyers want certainty and are responding positively to the opportunity to walk through a finished product, inspect the quality firsthand and move in immediately," Brown suggested.</p>

<p>"Projects such as Park Residences and KOYO demonstrate that when the product is exceptional and the location is irreplaceable, buyers are prepared to act quickly."</p>

<p>[smartcode_project:default project_id=114246 project_image_fid=370116]</p>

<p>Abadeen CEO Joe Tack said quality continued to differentiate projects in the current market.</p>

<p>"Today's buyers are incredibly discerning," Tack said.</p>

<p>"They are seeking larger floorplans, premium finishes, walkability, lifestyle amenity and confidence in the developer delivering the project. Well-designed boutique developments continue to outperform because they offer something genuinely difficult to replace.</p>

<p>"The enquiry we are seeing across our completed and recently completed Lower North Shore portfolio is very encouraging, and we expect this momentum to continue into spring."</p>

<p>The sales follow increased enquiry across Abadeen's Lower North Shore portfolio which also includes <a href="https://www.apartments.com.au/buildings/northcote-collective-naremburn-2-northcote-street-naremburn-nsw-2065">Northcote Collective in Naremburn</a> which also completed recently.</p>


KOYO penthouse headlines Abadeen's $19.25 million EOFY sales flurry

<p>The City of Sydney has approved plans for <a href="https://www.apartments.com.au/developers/billbergia">Billbergia Group</a> and Metrics Credit Partners’ $3.5 billion Castlereagh Place project in the heart of the Sydney CBD</p>

<p>The towers will be among the tallest in <a href="https://www.apartments.com.au/developments/sydney-nsw-2000">Sydney</a>'s CBD, with more floors than any other residential tower in the city.&nbsp;</p>

<p>The 6,000 sqm site was acquired by the joint venture partners in 2024. It is the largest amalgamated land parcel in the Sydney CBD and comprises eight individual sites fronting Castlereagh, Pitt and Liverpool Streets.&nbsp;</p>

<p><a href="https://www.apartments.com.au/new-apartments/castlereagh-place-sydney-324-348-pitt-street-sydney-nsw-2000">Castlereagh Place</a> will transform an underutilised city block into a landmark mixed-use destination, anchored by two 82-storey towers comprising 607 luxury residences above an 8-level podium housing a 209-room luxury hotel. A 1,000 square metre civic park on ground level features a curated mix of food, beverage and retail.</p>

<p>The plans have been refined over the past year to rebalance the residential and hotel offering, and reconfigure the retail footprint to create a stronger, more dynamic dining experience.</p>

<p>A three-level flagship building on the prominent corner of Pitt and Liverpool Streets will be the gateway to the Castlereagh Place lifestyle precinct. Set to become a Sydney icon, the building is capable of housing multiple hospitality venues.</p>

<p>“Castlereagh Place is designed to be the City's next great urban oasis - an energetic mixed-use precinct that pulses with life, day and night,"&nbsp;said Joseph Kinsella, Group Director of Billbergia.</p>

<p>"It will bring the vibrancy of places like Barangaroo and Darling Quarter into a more accessible, central destination at the very heart of Sydney."</p>

<p>Kinsella said the project will build on&nbsp;Sydney’s growing laneway culture with the City’s largest network of new activated lanes - an expanded, next-generation take on precincts like Angel Place, Palings Lane and Ash Street in Wynyard.</p>

<p>[smartcode_project:default project_id=134477 project_image_fid=374401]</p>

<p>Castlereagh Place has been designed by architects <a href="https://www.apartments.com.au/architects/fjc-studio">fjcstudio</a> in collaboration with Trias Studio, Aileen Sage and Polly Harbison Design, joint winners of an international design competition in 2018.&nbsp;</p>

<p>Signature design elements from the original scheme remain unchanged, while the public domain has been significantly enhanced, delivering 60 per cent more open-to-sky space.</p>

<p>Pedestrian access will also be enhanced through new laneways linking Pitt, Liverpool and Castlereagh Streets, drawing people into a new civic park with outdoor seating, landscaping and integrated public art.</p>

<p>With activated laneways supported by strong hospitality offerings, Castlereagh Place is tipped to become a vibrant new dining destination in the heart of Sydney’s CBD.</p>

<p>It marks the largest undertaking to date for the Billbergia and Metrics Credit Partners partnership. Together they are developing other underutilised Sydney sites into mixed-use precincts, including the $2.2 billion Concord Central and the $1.3 billion Chatswood Grand Residences.</p>

<p>Metrics Managing Partner and Group CEO Andrew Lockhart said Castlereagh Place is a landmark project that will redefine Sydney’s skyline.</p>

<p>"As the tallest residential high-rise development, the revitalised site will offer panoramic views across the CBD and surrounds. We are excited to partner with Billbergia to reinvigorate an underutilised site and create a sophisticated and contemporary mixed-use offering situated in the heart of Sydney.”</p>

<p>Total apartments within the towers have increased to 607 dwellings, with a focus on larger floorplans. Aligned to growing market demand, Castlereagh Place now comprises 299 three-plus-bedroom apartments, 198 two-bedroom units and 110 one-bedroom configurations.</p>

<p>[smartcode_project:default project_id=134477 project_image_fid=374402]</p>

<p>Resident amenities will include an exclusive residents club containing a gym, rooftop pool, dining rooms, co-working spaces, library, golf simulator, games room, cinema room, and access to an exclusive concierge service. There will be around 500 basement car spaces below the towers.</p>

<p>The development will also include a state-of-the-art wellness centre, set to feature a bathhouse with magnesium pools, hot/cold plunge pools and premium amenities.</p>

<p>&nbsp;</p>

<p>According to fjcstudio, the towers will feature distinctive yet elegant architectural design reflecting Sydney’s geometry and urban character, with a network of through-site links and intimate public spaces activating the streetscape.</p>

<p>"Castlereagh Place is a city-making project of significant scale and ambition," said Richard Francis-Jones, Design Director at fjcstudio.</p>

<p>"It will create a rich urban complex of public open spaces, landscaped gardens, and vibrant laneways. Defining these new public spaces and the important streetscape of Castlereagh Street is a sequence of fine-grained, diverse retail and hotel architecture designed in collaboration with Aileen Sage, Polly Harbison Design and Trias.</p>

<p>“Rising above the tree-lined, human-scale streetscape are two slender residential towers that will transform the city skyline and look towards the Harbour, Hyde Park, and the Royal Botanic Garden.”</p>

<p>Demolition and early construction works have commenced onsite at Castlereagh Place.</p>

<p>[smartcode_project_cta:default project_id=134477]</p>


Billbergia, Metrics, approved for $3.5 billion Sydney skyscrapers

<p>International developer&nbsp;<a href="https://www.apartments.com.au/developers/spg-land">SPG Land</a> is preparing to re-launch its long-awaited $1.5 billion <a href="https://www.apartments.com.au/new-apartments/paradiso-place-surfers-paradise-103-ferny-avenue-surfers-paradise-qld-4217">Paradiso Place</a> development at Budds Beach, bringing a new price point to the Surfers Paradise apartment market.</p>

<p>The developer will release one-bedroom apartments from $825,000 and two-bedroom apartments from $1.24 million in the three-tower development.</p>

<p>According to Urbis, the starting price for the two-bedroom apartments is more than $400,000 below the weighted average sale price for comparable two-bedroom apartments in Surfers Paradise during 2025, which was pinned at $1.7 million.</p>

<p>&nbsp;</p>

<p>Urbis reported quarterly average sale prices for new two-bedroom, two-bathroom apartments ranged from around $1.2 million to $1.7 million throughout 2025, peaking in the December quarter.</p>

<p>[smartcode_project:default project_id=106566 project_image_fid=185853]</p>

<p>Paradiso Place is now moving into its formal sales campaign, with a limited early-release opportunity available ahead of the public launch.</p>

<p>The development will comprise 845 apartments across three towers rising 40, 41 and 44 storeys from a 1.15-hectare site spanning an entire city block. The towers will sit above a new retail precinct.</p>

<p>"Paradiso Place represents a rare opportunity in today's market, offering premium apartments at a price point that is significantly more competitive than anything else currently available," SPG Land Sales Director Brad McMahon said.</p>

<p>"When you look at comparable new developments across Surfers Paradise, Main Beach and the Southern Beaches precinct, buyers are typically paying hundreds of thousands more for a similar product.</p>

<p>"The scale of this project and the developer-builder construction model allows us to unlock efficiencies that smaller developments simply cannot achieve. We are passing those benefits directly to buyers, while still delivering a five-star residential experience with an unmatched lifestyle."</p>

<p>[smartcode_project:default project_id=106566 project_image_fid=374280]</p>

<p>Each of the three towers designed by Rothelowman will have its own podium, connected by an elevated skybridge network to create a beachside village for residents. The resident amenity has been designed to rival a five-star hotel, with private dining rooms, resident lounges and entertainment spaces.</p>

<p>McMahon said the pricing strategy was a deliberate response to the current market.</p>

<p>"What Paradiso Place offers is a unique balance, genuine value within a premium market. Buyers are not compromising on quality, design or amenity, they are gaining access to it at a more competitive price point at a time when prices across the Gold Coast continue to reach new highs."</p>

<p>[smartcode_project:default project_id=106566 project_image_fid=362498]</p>

<p>Located around 100 metres from the beach and within walking distance of the Surfers Paradise North light rail station, Paradiso Place occupies one of the Gold Coast's most tightly held beachfront precincts.</p>

<p>Construction is continuing to progress, with eight of the project's 112 foundation piles now complete. Excavation has also commenced on the first diaphragm wall panel, with the first concrete poured on 15 June, marking a key milestone in the project's early works program.</p>

<p>[smartcode_project_cta:default project_id=106566]</p>


SPG Land launches $1.5 billion Paradiso Place at attractive price point

<p>Luxury developer-builder <a href="https://www.apartments.com.au/developers/lowe-living">Lowe Living</a> has achieved a new Victorian benchmark for an off-the-plan apartment, with the sale of two penthouses at its ultra-exclusive Maison Savoy development in Brighton.</p>

<p>The two penthouses achieved a combined sale rate of $49,926 per sqm. Both transactions eclipsed the previous identified Victorian off-the-plan price-per-square-metre benchmark, set by the 449 sqm apartment at Como Toorak, which sold at $46,659 per sqm.</p>

<p>[smartcode_project:default project_id=140818 project_image_fid=366473]</p>

<p><a href="https://www.apartments.com.au/new-apartments/maison-savoy-brighton-150-esplanade-brighton-vic-3186">Maison Savoy</a>, Lowe Living's redevelopment of the former Brighton Savoy Hotel on absolute beachfront land at 150 The Esplanade, Brighton, has gained significant momentum since launching just eight weeks ago. Around 30 per cent of the project's 19 residences have already been secured, generating approximately $45 million in sales.</p>

<p>"Securing two of the three penthouse sales at this stage, within eight weeks of launching to market speaks to the confidence our clients place in Lowe Living," Lowe Living co-founder Emma Lowe said.</p>

<p>"They know we'll be with them through every stage of the journey, and that assurance is something we've worked hard to earn and never take for granted."</p>

<p>[smartcode_project:default project_id=140818 project_image_fid=366474]</p>

<p>Lowe said Maison Savoy was conceived as a genuine alternative to a prestige Brighton home, combining house-scale proportions with the convenience, security and lock-up-and-leave appeal of apartment living.</p>

<p>Lowe Living co-founder Tim Lowe said the early sales success demonstrated the resilience of Melbourne's prestige market and highlighted the growing demand for house-sized apartments among ultra-high-net-worth buyers.</p>

<p>"The Melbourne market has definitely been tested in recent years, with interest rates and global economic factors all creating a period of uncertainty across the real estate sector. The sales success at Maison Savoy however demonstrates that confidence remains exceptionally strong at the top end of the market.</p>

<p>"The prestige market is being driven by long-term lifestyle decisions rather than short-term market sentiment, which continues to create a level of certainty that befits an absolute beachfront property in a blue-chip location like Brighton.</p>

<p>"Brighton's fundamentals remain among the strongest in Melbourne, with limited new supply, enduring demand from an overwhelmingly local owner-occupier market, and a rare combination of beachfront amenity and proximity to the CBD."</p>

<p>[smartcode_project:default project_id=140818 project_image_fid=374378]</p>

<p>According to Cotality, Brighton remains one of Melbourne's most tightly held prestige suburbs, with an average ownership tenure of 15.3 years for houses and 12.3 years for units, while more than 73 per cent of homes are owner-occupied.</p>

<p>Tim Lowe said selling two of the project's three penthouses so early in the campaign was an uncommon result.</p>

<p>"This sales result is a reflection of quality and understanding the local market. It's incredibly rare to transact the penthouses so early in a sales campaign in any project so to have sold two of the three penthouses at Maison Savoy so soon after launch, all in-house without any external sales agency appointed, is reflective of our careful consideration of our buyers' needs and lifestyle.</p>

<p>"This is knowledge that is accumulated not just from data and demographic analysis, but via a deeply embedded understanding of how this type of buyer wants to live and feel in their home. We pride ourselves on getting to know our clients personally, and over the last 10 years we have been able to refine our product offering by talking one-on-one with our clients about their design and floorplan preferences.</p>

<p>"Being a fully integrated developer-builder with an in-house design and sales team allows us to lead every part of the process and ensure the highest quality of product and service at every touchpoint. It's a really important part of our DNA and the recent sales success at Maison Savoy indicates that our clients and purchasers are resonating with this point of difference.</p>

<p>"It reinforces that demand remains strong for thoughtfully designed residences that offer rarity, lifestyle and long-term value in tightly held locations, which ultimately validates Maison Savoy's positioning as creating a new benchmark for house-scale, wellness-led apartment living on Brighton's beachfront."</p>

<p>&nbsp;</p>

<p>[smartcode_project:default project_id=140818 project_image_fid=366480]</p>

<p>The residences at Maison Savoy start from 295 sqm, with most enjoying uninterrupted views across Port Phillip Bay. The project sits moments from the Brighton Bathing Boxes, Royal Brighton Yacht Club, Middle Brighton Baths and Church Street's retail and dining precinct.</p>

<p>A key feature of the development is its private residents-only bathhouse, curated by the founder of Aurora Spa &amp; Bathhouse and modelled on traditional European bathing rituals and the award-winning Sorrento bathhouse.</p>

<p>The wellness offering includes a hydrotherapy pool, salt room, sauna, steam room, cold plunge pool, foot activation zone and a Vichy rainfall bed, one of only a handful in Australia. Residents will also have access to a Technogym studio, lounge spaces and a dedicated concierge service offering everything from morning coffee delivery and restaurant bookings to dry cleaning and home coordination.</p>

<p>"Wellness-led design has become a defining factor for luxury buyers," Emma Lowe said.</p>

<p>"Purchasers increasingly value homes that enhance wellbeing through thoughtful design, private amenity, privacy and liveability."</p>

<p>The penthouse purchasers are now undertaking a bespoke customisation process curated personally by architect Pete Kennon and the Lowe Living team, one of the developer's signature service offerings.</p>

<p>Construction on the $160 million transformation of the former Brighton Savoy Hotel site commenced last month, with completion expected in early 2028. The project has secured funding from NAB alongside development partner Monark.</p>

<p>Just one penthouse remains available, along with a limited number of two and three-bedroom residences starting from $3.75 million.</p>

<p>Lowe Living currently has eight projects on the market across Melbourne and recently celebrated its 10th anniversary, having grown a $1 billion development pipeline alongside a $350 million construction pipeline.</p>

<p>&nbsp;</p>

<p>[smartcode_project_cta:default project_id=140818]</p>


Lowe Living set new Melbourne off the plan apartment record

Construction

<html><body>
<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><strong><span style="text-decoration: underline;">Part 1 - Total construction slips</span></strong></div>
<div>
<br>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.<br><br>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.<br><br>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>
<p> </p>
<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>
<p><img src="/images/2015/05/28/wargent2.jpg" alt=""><br><br></p>
<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>
<p> </p>
<div class="separator"><img src="/images/2015/05/28/wargent3.jpg" alt=""></div>
<div class="separator"><span style="line-height: 1.3em;"> </span></div>
<div>Major renovations work, denoted by the green line, continues to flatline, and is basically on life support outside Sydney.</div>
<p><strong><span style="text-decoration: underline;">Part 2 - State versus state building</span></strong></p>
<p><span style="line-height: 1.3em;">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 </span><span style="line-height: 1.3em;">multiplier</span><span style="line-height: 1.3em;"> effect.</span></p>
<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>
<p><br><span>But the real fun and games are taking place in the apartment construction sector.</span></p>
<p><span style="line-height: 1.3em;">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). </span><span style="line-height: 1.3em;"> </span></p>
<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.<br><br>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.<br><br>Prospective investors clearly need to understand the property markets at a suburb and micro level in this respect.<br><strong><span style="text-decoration: underline;"><br></span></strong><strong><span style="text-decoration: underline;">Part 3 - The mining cliff</span></strong>
</div>
<div><strong><span style="text-decoration: underline;"> </span></strong></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>
<br>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"> <span style="line-height: 1.3em;"> </span>
</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>
<br>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.<br><br>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).<br><br>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 <em>cycle</em>.</div>
<p><strong><span style="text-decoration: underline;">The wrap</span></strong></p>
<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>
<em><span>PETE WARGENT</span> is the co-founder of <a href="https://allenwargent.com/" target="_blank" rel="nofollow">AllenWargent</a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank" rel="nofollow">blogger</a>.</em><br><p><em>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.</em></p>
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Major renovations work continues to flatline: Pete Wargent

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<div>Total construction work done in Australia has declined by 3.7% over the past year in seasonally adjusted terms. Let's take a look in two short parts at what this actually means.</div>
<div> </div>
<div>
<strong><span style="text-decoration: underline;">Part 1 - Total construction</span></strong><br><strong><span style="text-decoration: underline;"><br></span></strong>
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<div>Total construction work done in the third quarter of 2015 declined by 3.7% to $49 billion on a seasonally adjusted basis. </div>
<div> </div>
<div>Despite a lift in residential building work done (+2.0%), there was a decline in non-residential building (-1.9%), and as widely expected engineering construction fell sharply (-7.3%) to be -11.7% lower over the year.<br><br>The green shaded area which records construction work done in chain volume measures terms shows that the unwinding of the resources construction boom has a way to run yet. </div>
<div> </div>
<div>Quarterly engineering construction work done has declined from a peak of $34 billion to around $25 billion, but given the weakness in commodity prices - and given that in the same quarter a decade ago activity was just $13 billion - the decline surely has a long way to go.</div>
<div> </div>
<div><a href="/images/2015/11/26/A1.jpg" target="_blank">Click to enlarge</a></div>
<div> </div>
<div><img src="/images/2015/11/26/A1.jpg" alt=""></div>
<div> </div>
<div>
<div>The decline in engineering construction this quarter was driven by an overdue reversal in Western Australia, and to a lesser extent a decline in Queensland, as mega-projects begin to wind down. </div>
<div> </div>
<div>Activity in the Northern Territory continues to track at a historically exceptionally high level of $2 billion, accounted for primarily by the massive Ichthys LNG project.</div>
<div> </div>
<div><a href="/images/2015/11/26/A2.jpg" target="_blank">Click to enlarge</a></div>
<div> </div>
<div><img src="/images/2015/11/26/A2.jpg" alt=""></div>
</div>
<div> </div>
<div>
<div>While non-residential building and major renovations have contributed little of significance to the rebalancing of the economy, new house building and "other residential" building (apartments, units, townhouses) have effectively done everything that could have been expected of them in response to low interest rates.</div>
<div> </div>
<div>Total building work done of $24 billion represents a solid 6.4 per cent increase over the year, with no thanks to the non-residential sector.</div>
<div> </div>
<div><a href="/images/2015/11/26/A3.jpg" target="_blank">Click to enlarge</a></div>
<div><img src="/images/2015/11/26/A3.jpg" alt=""></div>
<div> </div>
<div>
<div>These high level numbers should present an idea of some of the challenges facing the economy given that housing starts are projected to decline from pretty much now, while the decline in engineering construction may only be half way done. </div>
<div> </div>
<div>Even now I'm still not sure anyone really has a satisfactory answer for what is going to fill this gaping hole while commodity exports ramp up. Given the expansion of Australia's population the obvious answers should come under the heading of "infrastructure" but if there's a coherent plan for that being discussed anywhere I haven't heard of it.</div>
<div> </div>
<div><strong><span style="text-decoration: underline;">Part 2 - Building work by state</span></strong></div>
<div> </div>
<div>Victoria has been the king of building work through this cycle, with New South Wales following in second place, these states being home to the two capital cities with the strongest dwelling price gains.<br><br>Indeed, Melbourne is a fine illustration of why it is important for market analysts to pay close heed to both demand and supply factors when forming their views. The Victorian capital has been building both houses and units like billy-o since 2010 - the source of a thousand crash predictions - yet vacancies and stock on market are both falling, and the market seems to be gathering momentum again.</div>
<div> </div>
<div><a href="/images/2015/11/26/A4.jpg" target="_blank">Click to enlarge</a></div>
<div><img src="/images/2015/11/26/A4.jpg" alt=""></div>
<div> </div>
<div><span>While there has been a reasonable response from the house building sector since 2012, approvals data shows that this market is running out of puff for the cycle, and has probably all but peaked already.</span></div>
<div><span> </span></div>
<div><a href="/images/2015/11/26/A5.jpg" target="_blank"><span>Click to enlarge</span></a></div>
<div><span><img src="/images/2015/11/26/A5.jpg" alt=""></span></div>
<div> </div>
<div> </div>
<div>
<span>On the other hand the "other residential" sector continues to surge to record heights (this has been visible in the largest cities to anyone with a working pair of eyes...always knew those gauges were dodgy!), the new high rise building boom being the defining dynamic of this market cycle.</span><br><br><span>Building work in this sector is at historical highs in Victoria, New South Wales, Queensland, and Western Australia, with over-building of high rise apartments evident in parts of Brisbane and Melbourne.</span>
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<div><span> </span></div>
<div><a href="/images/2015/11/26/A6.jpg" target="_blank"><span>Click to enlarge</span></a></div>
<div><span><img src="/images/2015/11/26/A6.jpg" alt=""></span></div>
<div> </div>
<div> </div>
<div>
<div>If you've been following this blog for the last couple of years, you will appreciate that the systemic risks in the housing market are obviously apparent and buried within this final chart. Would-be market shorters should dig deeper here.</div>
<div> </div>
<div>There have long been indicators of overbuilding in the high rise markets of inner city Melbourne and Brisbane, with a high proportion of new build sales being made offshore, especially to China.</div>
<div> </div>
<div>The storm clouds were gathering for off-the-plan buyers well before APRA's intervention, but recent tightening measures to lending procedures could well be the factor which nails on the correction for this sector. </div>
<div> </div>
<div>How many buyers who put down trifling holding deposits will fail to settle if lenders demand a 20 per cent deposit prior to completion? Perhaps up to a third could be in trouble, and will be juggling personal finances as we speak. </div>
<div> </div>
<div>Could get messy. </div>
<div> </div>
<div>
<p><span><em>PETE WARGENT is the co-founder of <a href="https://allenwargent.com/" target="_blank" rel="nofollow">AllenWargent</a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank" rel="nofollow">blogger</a>.</em><br></span></p>
<p><em>His latest book is <a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx" target="_blank" rel="nofollow">Four Green Houses and a Red Hotel</a>.</em></p>
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Construction trends (off-the-plan mess) Pete Wargent

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<p>Christmas always puts a deadline on things. For Property Bloom this year it's completing four development projects before the big man with the white beard arrives.</p>
<p>Of course our builder and all their tradies are under the pump at this time of year and our job as project managers really comes into play.</p>
<p>Our goal is not only to have the dwellings completed with Occupation Certificates (OCs) issued, but also <strong>tenanted</strong> before Christmas. And I've found a way to achieve this.</p>
<p>It's called supporting your site manager.</p>
<p>Rather than micro manage our site managers which just drives people crazy, we try to help them by giving them a hand. They feel supported and at the end of the day, we are all on the same team striving for the same result: Happy clients.</p>
<p>Here's an example. I'm doing two Practical Completion (PC) inspections this week and I have a tool I'm going to take along that should help. It's a bottle of Spray and Wipe.</p>
<p>Because we are pushing the process, we'll often get asked to move the PC date so they can be completely ready. But I don't want to give our builder another few days. Because right now, we literally don't have them.</p>
<p>We want tenants settled in before Christmas, we need the properties to look their best because on the same day we do our PC inspection, our appointed property manager will be taking photos and uploading the properties onto the Internet. This way we can advertise for tenants during the PC and Handover period.</p>
<p>The Handover period is the time after PC when the builder has seven days to complete any outstanding items we've picked up and before the bank pays the builder's final drawdown. Once the builder receives their payment, they release the keys to the owner and the dwellings come off construction key. That is literally the Handover date and of course a tenant can't move in before Handover.</p>
<p>Once asked to pay the final invoice, the bank typically take about a week, sometimes longer to send their valuer to check construction has been completed then transfer the money to the builder.  Before they release the final payment, they will have conditions such as receiving a copy of the OCs, and a copy of a building insurance policy in the name of the owners. </p>
<p>This week or two is valuable and we use it to show potential tenants and hold open homes. We can do this because we have a great relationship with out builder and they will allow access BEFORE Handover. That's pretty unusual for a builder. But it means tenants are lined up as keys are handed over, which results in zero vacancy time for our clients.</p>
<p>So back to the PC inspection. My theory is that we set a date for PC and we do all we can to get the project to that stage. By having a deadline, more action is taken. I've found that there ends up being only minor items to attend to if any at all, because the site manager has done all he could to meet the deadline.</p>
<p>Short of bringing a pair of white gloves, I am fussy at these inspections. But some things just need a bit of elbow grease. So the bottle of Spray and Wipe comes out and we can clean the spots as we go through the property. It's so much easier than adding it to a list and having to wait for cleaners to come back. Of course I do draw the line at mopping floors, but small marks can easily be removed along with the fine layer of dust that always seems to settle on the kitchen benches a day after the construction clean is done.</p>
<p>I'm looking forward to Christmas this year but there's still a bit of work to be finished before the champagne is poured and prawns are peeled. </p>
<p><em>Jo Chivers is chief executive officer of property development project managers <a href="https://www.propertybloom.com.au/about" target="_blank">Property Bloom</a>.</em></p>
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Countdown to construction completion: Jo Chivers

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<p>EXPERT OBSERVER</p>
<p>It's all happening in Brisbane CBD... there's not too much downing of tools or time for smoko around here at the moment!</p>
<p>So while residential construction is now slowing towards multi-year lows, there's plenty happening in the commercial and infrastructure space.</p>
<p>One of the major broadsheets reported this week on its front page that traffic controllers on the Queen's Wharf project are set to earn more than $194,000 per annum, including 10 hours per week of paid overtime.</p>
<p>Meanwhile, including overtime carpenters are expected to earn around $240,000 per year for a 46-hour week.</p>
<p>All of which will feed itself back into Brisbane's economy over the next few years.</p>
<p>We looked at some of the major projects and what they might mean for Brisbane at our buyer's agency website <a href="http://allenwargent.com.au/why-you-wont-recognise-brisbane-5-years-from-now-3-minute-video/" target="_blank">here</a>. </p>
<p><img src="https://1.bp.blogspot.com/-KtQy-K-vC5c/XaPSuPvLbHI/AAAAAAAAyQE/_x0BT6JdDHMFnjRj2rciTcjtK8Svzv69gCNcBGAsYHQ/s640/QW.jpg" width="640" height="320" data-original-height="800" data-original-width="1600"></p>
<p><em>PETE WARGENT is the co-founder of AllenWargent property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank">blogger</a>. </em></p>
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Commercial construction booming in the Brisbane CBD: Pete Wargent

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<p>RBA liaison believes it can see through the downturn in construction to the other side.</p>
<p>Below Scutty reports on the latest AiG construction index gauge:</p>
<p class="separator"><img src="https://1.bp.blogspot.com/-XgQZzrxcIIM/XenLm_8jMII/AAAAAAAAzOk/ysAVnkMDPoMCnM41cdRqrZxiiHZVAFM9QCNcBGAsYHQ/s640/AIG1.jpg" width="640" height="136" data-original-height="142" data-original-width="663"></p>
<p class="separator">Apartments (37), engineering (33.3) and commercial (43.7) all came in with very contractionary readings. </p>
<p class="separator"><img src="https://1.bp.blogspot.com/-l136Sd1V4sw/XenLm0vwVNI/AAAAAAAAzOo/L8SgToObOWQzHb4nrfOYEQtYB-oLGwlpACNcBGAsYHQ/s640/AIG2.jpg" width="640" height="204" data-original-height="513" data-original-width="1600"></p>
<p class="separator">Perhaps house building is due to lift soon, but otherwise, it's another stinker.</p>
<p class="separator"><em>PETE WARGENT is the co-founder of AllenWargent property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank">blogger</a>. </em></p>
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Construction continues crashing: Pete Wargent

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<p><span>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.</span></p>
<p><span>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.</span></p>
<p><span><em>Property Bloom</em> 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. </span></p>
<p><span>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.</span></p>
<p><span>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.  </span><span><br></span></p>
<p><span>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 <em>signed</em> builders contract and this adds another two weeks to the process as we need to wait for clients to review and sign the contract.</span></p>
<p><span>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.</span></p>
<p><span>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.</span></p>
<p><span>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. </span></p>
<p><span>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.</span></p>
<p><em>Jo Chivers is Chief Executive Officer of property development project managers <a href="https://www.propertybloom.com.au/about">Property Bloom</a>.</em></p>
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How to accelerate the pre-construction phase: Jo Chivers

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<p>There was another upbeat result for building approvals in the month of July 2017, with a shade under 18,300 dwellings approved in the private sector.</p>
<p>From a year ago private sector attached dwelling approvals are some 30 per cent lower, leading total approvals to be off by 14 per cent year-on-year.</p>
<p>Approvals are evidently well down from the peak, especially for high-rise apartments as we shall see. </p>
<p>However, detached house approvals have been steadily trending higher over the past five months, and demand for new homes has picked up the pace too. </p>
<p><a href="https://www.propertyobserver.com.au/images/2017/09/07/B3.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/09/07/B3.jpg" alt=""></p>
<p>Although attached dwelling approvals remained at relatively strong levels in the most populous capital cities in July, the entrenched downtrend is abundantly clear. </p>
<p>In Brisbane, annual approvals continue to drop precipitously as that market grapples with high-rise overbuilding, especially in the inner city.</p>
<p><a href="https://www.propertyobserver.com.au/images/2017/09/07/B1.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/09/07/B1.jpg" alt=""></p>
<p>Interestingly much of the recent strength in detached house approvals has been accounted for by the regional centres, as house price growth ripples outwards.</p>
<p>At the capital city level detached housing in Brisbane looks robust, but annual house approvals in fundamentally oversupplied Perth are down by 41 per cent from the cyclical peak of December 2014.</p>
<p><a href="https://www.propertyobserver.com.au/images/2017/09/07/B2-1.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/09/07/B2-1.jpg" alt=""></p>
<p>High-rise boom &amp; bust</p>
<p>Looking at the composition of dwellings approved shows that in annualised terms high-rise apartments have dropped by a quarter since the heady peak of October 2015. </p>
<p>Indeed, the great bulk of the volatility through this cycle has been driven by the heady combination of low interest rates and a surge of Chinese investor demand for high-rise apartments (which has now gone into reverse gear with local financiers having pulled up stumps).</p>
<p>Lately there has been a shift back towards approvals for more boutique apartment blocks, and especially townhouses. </p>
<p><a href="https://www.propertyobserver.com.au/images/2017/09/07/B4.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/09/07/B4.jpg" alt=""></p>
<p>The boom and subsequent bust in high-rise approvals has followed a markedly similar pattern across each of the three most populous states, thus underscoring the point, although demand in Sydney and Melbourne has held stronger for longer.</p>
<p><a href="https://www.propertyobserver.com.au/images/2017/09/07/B5.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/09/07/B5.jpg" alt=""></p>
<p>Non-residential steps up</p>
<p>While there have been fears of a disorderly slowdown in construction, the total value of building approvals surged in the month July and has been trending solidly higher for six months, helped along by strengthening performance in the non-residential sector.</p>
<p>In fact, the trend in non-residential approvals smoked a record high in July 2017 - in dollar value terms, if not as a share of GDP - driven by office and education buildings in New South Wales and Victoria.</p>
<p>With public works, infrastructure spend, and engineering construction rising, overall the sector remains in considerably better nick than seemed likely at the back end of last year. </p>
<p class="p1"><span class="s1">PETE WARGENT is the co-founder of <a href="https://allenwargent.com/"><span class="s2">AllenWargent</span></a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/"><span class="s2">blogger</span></a>.</span></p>
<p class="p2"><span class="s3"><em>His latest book is </em><a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx"><span class="s2"><em>Four Green Houses and a Red Hotel</em></span></a><em>.</em></span></p>
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Rebalancing away from the high-rise construction effect: Pete Wargent

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

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<p>Perhaps our easing cycle is not yet over?</p>
<p>Posssibly so. Markets have all but priced out any further interest rate cuts in this cycle - partly due to worries about cuts bringing more speculators into the housing market, and partly due to one seemingly very strong set of employment data - but it still seems to be very much in the balance to me.</p>
<p>One of several reasons I think that another cut or two might be needed is the decline in mining construction, which has yet to gather any real pace but remains a threat.</p>
<p><strong>Construction phase of the mining boom fading</strong></p>
<p>The Australian Bureau of Statistics (ABS) released its Engineering Construction activity data yesterday, which is something of a proxy for mining construction activity.</p>
<p>We are now clearly beyond the peak of this construction phase of the mining boom as production begins to ramp up in its stead.</p>
<p>The total value of engineering construction work done across all sectors has now declined by 2.3% over the past year on a seasonally adjusted basis.</p>
<p>In chain volume measures terms the charts show that although activity remains at a highly elevated level, the peak of the mining construction boom appears to have been way back in the September 2012 quarter.</p>
<p>And while the decline has not been devastatingly steep, in chain volume measures terms we are now tracking at around 9% lower than we were, with 3.8% of that decline taking place over the past year.</p>
<p><img src="/images/2014/10/2/ENG1.jpg" alt=""></p>
<p>In terms of the construction activity by state, it was the mining states which benefited most from the boom, so it will be the same states which feel most of the pain as the construction boom unwinds.</p>
<p><img src="/images/2014/10/2/ENG2.jpg" alt=""></p>
<p>As recently as March 2014 there were still major resources projects getting underway in Western Australia, but the big ticket items are now largely visible in the rear view mirror.</p>
<p><img src="/images/2014/10/2/ENG3.jpg" alt=""></p>
<p>In terms of the value of activity yet to be completed, work in the pipeline for Queensland has tanked. The full data set for Western Australia is not available from the Bureau of Statistics, but the sub-indices imply that the work in the pipeline is almost certainly declining there too.</p>
<p><img src="/images/2014/10/2/ENG4.jpg" alt=""></p>
<p><em>This article continues on the next page. Please click below.</em></p>
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<p><em> </em></p>
<p>With the weighted index of commodity prices continuing to "ease" by another 2.4% in September (and another 16% over the past year in Aussie dollar terms) according to the Reserve Bank of Australia, marginal projects will certainly not be commenced in the current environment.</p>
<p><img src="/images/2014/10/2/commodity-prices-small.gif" alt=""></p>
<p>In short, mining construction activity has not collapsed, but it is set to keep declining for several years to come.</p>
<p>This leads me to think that another interest rate cut or two could still be at least an each-way bet, but only if the large number of investors pouring into the housing market slows. We will know more in the next week or two on that front.</p>
<p><strong>WA property bust?</strong></p>
<p>There has been some talk of whether or not the collapse in mining construction will result in a property bust in Western Australia.</p>
<p>The answer to that riddle is: that depends.</p>
<p>The Pilbara has transitioned into the export phase of the mining boom. which is the less labour intensive phase of the boom, and unsurprisingly several property markets have crashed, both in terms of rentals and prices.</p>
<p>This is hardly a shock, except to perhaps investors who were lured in by promises of fast returns and sky-high monthly rents.</p>
<p>The Perth property market is a different matter entirely. Western Australia, and especially Perth, has benefited from by far and away the strongest percentage rate of population growth in Australia over recent years.</p>
<p>The key to successful property investment in Perth has always been to own well located land. Unit and apartment prices may well feel some pain ahead, but with rapid population growth having underpinned the market the price of well located houses will fare much better.</p>
<p>Indeed, the median price of land in Perth reportedly "skyrocketed" by $40,000 in the past year.</p>
<p>This represents a 7.5% increase in the median value of Perth land, which outpaced Adelaide (+7.3%) and Sydney (+5.2%).</p>
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Has the market mispriced the odds of a rate cut?

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<p><span>The ABS released its consolidated <a href="https://www.abs.gov.au/AUSSTATS/abs@.nsf/Lookup/8782.0.65.001Main+Features1Mar%202015?OpenDocument" target="_blank"><span>Construction Activity</span></a> data for the March 2015 quarter this week. </span></p>
<div id="post-body-7503557364222292087" class="post-body entry-content">
<div>No real surprises to be found here, based upon what we have already seen.</div>
<div> </div>
<div>Resources construction continues to decline apace, with engineering construction in chain volume measures terms declining by a further 7.0% in the first quarter of the calendar year, to be down by more than 20% year-on-year.<br><br>Recent commodity price action suggests that the pace of the decline may even accelerate from here. </div>
<div> </div>
<div>On the positive side of the ledger, as implied by record high building approvals, residential construction has begun to respond to low interest rates, increasing very strongly by more than 5% in Q1 to be up by 11.9% over the past 12 months.</div>
<div> </div>
<div>Non-residential building was up by 1.3% in the March quarter, but has increased only by a paltry 0.7% over the past year.<br><br>Here's the chart: </div>
<div> </div>
<div><a href="https://1.bp.blogspot.com/-DDxrvVs-G9A/VamSG2DNnHI/AAAAAAAAW_w/9aD2jXo9y1s/s1600/Construction1.jpg" target="_blank">Click to enlarge</a></div>
<div> </div>
<div class="separator"><a href="https://1.bp.blogspot.com/-DDxrvVs-G9A/VamSG2DNnHI/AAAAAAAAW_w/9aD2jXo9y1s/s1600/Construction1.jpg"><img src="https://1.bp.blogspot.com/-DDxrvVs-G9A/VamSG2DNnHI/AAAAAAAAW_w/9aD2jXo9y1s/s640/Construction1.jpg" width="640" height="280"></a></div>
<br><div>Piecing these figures together it's clear that residential construction alone will not fully compensate for the decline in mining capital expenditure, with total construction activity of $48.3 billion now declining back to the levels seen in Q4 2011.</div>
<div> </div>
<div>That said, $48.3 billion is still an elevated level of activity in historical terms...for now at least.</div>
<div> </div>
<div><a href="https://4.bp.blogspot.com/-YDgBofnRhbY/VamSGwEWp2I/AAAAAAAAW_s/O5apxmfsbgQ/s1600/construction2.jpg" target="_blank">Click to enlarge</a></div>
<br><div class="separator"><a href="https://4.bp.blogspot.com/-YDgBofnRhbY/VamSGwEWp2I/AAAAAAAAW_s/O5apxmfsbgQ/s1600/construction2.jpg"><img src="https://4.bp.blogspot.com/-YDgBofnRhbY/VamSGwEWp2I/AAAAAAAAW_s/O5apxmfsbgQ/s640/construction2.jpg" width="640" height="288"></a></div>
<br><div>The full force of the challenge will come when the last of the mega projects finally reaches completion, with a number of massive projects still in the construction phase such as the $34 billion Ichthys LNG project in the Northern Territory.<br><br><strong><span style="text-decoration: underline;">Regional centres</span></strong><br><br>The big picture is that as part of this rebalancing of the economy construction activity - and therefore employment - is shifting back away from the regions and towards the largest capital cities.<br><br>The latest unemployment rate figures for Sydney (4.7%), Brisbane (5.2%) and Melbourne (5.8%) may prove to be seasonally low, but the smoothed rolling 12 monthly data does suggest that unemployment rates in all three of the most populous cities may just be trending steadily down.</div>
<div> </div>
<div>
<a href="https://4.bp.blogspot.com/-7ysRISR7K_4/Varagu2GulI/AAAAAAAAXAw/Qkiq-q3Y2zc/s1600/CAPCITY.jpg" target="_blank">Click to enlarge</a><br><br><div class="separator"><a href="https://4.bp.blogspot.com/-7ysRISR7K_4/Varagu2GulI/AAAAAAAAXAw/Qkiq-q3Y2zc/s1600/CAPCITY.jpg"><img src="https://4.bp.blogspot.com/-7ysRISR7K_4/Varagu2GulI/AAAAAAAAXAw/Qkiq-q3Y2zc/s640/CAPCITY.jpg" width="640" height="290"></a></div>
<br>The economy is Sydney in particular is thriving. Indeed, with employment, retail trade and house prices all booming, monetary policy settings are all too easy for the harbour city.<br><br>Unemployment rates in Newcastle and Lake Macquarie seem to have steadied of late, but the trend in the Hunter is still upwards for now.<br><br>It's likely to be a tough period of adjustment for towns in the Upper Hunter such as Muswellbrook and Singleton, with further job cuts at BHP Billiton's Mr. Arthur reported to be "imminent".<br><br>It is worth noting that directly the mining industry is only a relatively small employer, but the reversal of the mining capital expenditure boom does have significant flow-on effects to other ancillary industries.<br><br>Labour market conditions had seemed to be picking up in the Illawarra, but it is nevertheless the case that the outlook for domestic steelmaking remains potentially bleak.<br><br><em>The Australian</em> put it fairly bluntly, stating that the closure of BlueScope's Port Kembla steelworks is "a matter of when, not if".<br><br>A recent poll in the Illawarra Mercury showed that more than 70% of respondents believe that the closure of the plant would cripple the Illawarra economy.</div>
<div> </div>
<div>
<a href="https://1.bp.blogspot.com/-1QB4q-M4068/Vardl9i8mhI/AAAAAAAAXBE/4CU4N8kIH2Q/s1600/NSW.jpg" target="_blank">Click to enlarge</a><br><br><div class="separator"><a href="https://1.bp.blogspot.com/-1QB4q-M4068/Vardl9i8mhI/AAAAAAAAXBE/4CU4N8kIH2Q/s1600/NSW.jpg"><img src="https://1.bp.blogspot.com/-1QB4q-M4068/Vardl9i8mhI/AAAAAAAAXBE/4CU4N8kIH2Q/s640/NSW.jpg" width="640" height="278"></a></div>
<br>Parts of regional Queensland have similar tales to tell.<br><br>Again, unemployment rates from month to month don't tell us a great deal, and things seem to have stabilised in some regions, but the general trend has been towards unemployment rates reverting higher as the resources investment boom phase falls away.</div>
<div> </div>
<div>
<a href="https://4.bp.blogspot.com/-gQD7HHdogLk/VaragsgYkoI/AAAAAAAAXAo/odZ9tSHh_O0/s1600/QLD.jpg" target="_blank">Click to enlarge</a><br><br><div class="separator"><a href="https://4.bp.blogspot.com/-gQD7HHdogLk/VaragsgYkoI/AAAAAAAAXAo/odZ9tSHh_O0/s1600/QLD.jpg"><img src="https://4.bp.blogspot.com/-gQD7HHdogLk/VaragsgYkoI/AAAAAAAAXAo/odZ9tSHh_O0/s640/QLD.jpg" width="640" height="286"></a></div>
</div>
<br><div>Towns facing something of an uphill struggle include Dalby, Chinchilla, Roma, Moranbah, Emerald., Dysart, Bowen and others.<br><br>Gladstone has also been going through its own transition phase over the past year or two.<br><br>Tourism regions on the other hand should benefit from the ongoing depreciation of the Aussie dollar.</div>
<div> </div>
<div>
<a href="https://3.bp.blogspot.com/-yeRSdxu4_5w/VatfKwQNUBI/AAAAAAAAXCQ/AgVE3IgBslA/s1600/tourism.jpg" target="_blank">Click to enlarge</a><br><br><div class="separator"><a href="https://3.bp.blogspot.com/-yeRSdxu4_5w/VatfKwQNUBI/AAAAAAAAXCQ/AgVE3IgBslA/s1600/tourism.jpg"><img src="https://3.bp.blogspot.com/-yeRSdxu4_5w/VatfKwQNUBI/AAAAAAAAXCQ/AgVE3IgBslA/s640/tourism.jpg" width="640" height="278"></a></div>
</div>
<strong><span style="text-decoration: underline;">The wrap</span></strong><br><br><div>There is not a lot new here, of course, and the rapid decline of engineering construction has evidently been in the post for some time now. </div>
<div> </div>
<div>Although it is generally reported that a decline in construction is a "bad thing", it is also clear that Australia couldn't go on building mines for ever - at some stage they need to produce exports. </div>
<div> </div>
<div>
<em>Reductio ad absurdum</em>, if any decline in construction activity is bad, then Australia would've been better off not having a mining boom in the first place.</div>
<div> </div>
<div>That said, the rising<a href="https://petewargent.blogspot.com.au/2015/07/city-versus-regional-jobs-divide-widens" target="_blank"> </a>levels of regional unemployment reported over the past week represent compelling evidence that many resources-influenced regions are set to be hit hard by declining demand in the years ahead.</div>
<div> </div>
<div>On the other hand the largest capital cities are benefiting from a boom in residential construction in particular together with the associated multiplier effect.</div>
<div> </div>
<div>One consequence of this is that certain inner city areas will evidently end up with an oversupply of apartments, particularly of high rise stock. Unit developments marketed overwhelmingly to investors may include those to avoid.</div>
<div> </div>
<div>
<p><span><em>PETE WARGENT is the co-founder of <a href="https://allenwargent.com/" target="_blank" rel="nofollow">AllenWargent</a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank" rel="nofollow">blogger</a>.</em><br></span></p>
<p><em>His latest book is <a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx" target="_blank" rel="nofollow">Four Green Houses and a Red Hotel</a>.</em></p>
</div>
</div>
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