<p data-end="211" data-start="96">National developer Time &amp; Place appears to have settled on a design for its long-anticipated Potts Point project.</p>

<p data-end="430" data-start="213">After several years of back and forth with local council and the NSW Government, the developer, which has spent close to a decade targeting the former The Chimes site on Macleay Street, has now progressed its plans.</p>

<p data-end="645" data-start="432">Following a concept design submission last year by SJB, Time &amp; Place has lodged a full State Significant Development Application with the NSW Government, this time for a scheme designed by Kerry Hill Architects.</p>

<p data-end="645" data-start="432"><img alt="Time &amp; Place" data-entity-type="file" data-entity-uuid="504d2a27-d65f-4227-8189-1e35e3376e62" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-04-20%20at%209.38.24%E2%80%AFAM.png?VersionId=_XqFKATYHF30KnVByPxhaI9UBzmkmfn7" /></p>

<p data-end="801" data-start="647">The 16-storey proposal includes 44 apartments, 21 of which will be build-to-sell. These will comprise 19 three-bedroom apartments and two four-bedroom penthouses.</p>

<p data-end="984" data-start="803">More than 50 per cent of the development will be dedicated to affordable housing, with 23 one- and two-bedroom apartments delivered in line with the NSW Government’s Housing SEPP.</p>

<p data-end="1068" data-start="986">Kerry Hill Architects said the proposal is driven by a strong response to place.</p>

<p data-end="1224" data-start="1070">“Our proposal for a new residential building for Potts Point in Sydney is driven by a deep consideration of place,” the practice said in its submission.</p>

<p data-end="1630" data-start="1226">“This operates on multiple levels, including a landscape approach that reinstates endemic flora of the Sydney peninsula and provides a ground-floor garden for residents, reconnecting the site to its pre-European history. A brick podium further strengthens this relationship to context, integrating planting and fine bronze detailing that references the predominant material language of Macleay Street.”</p>

<p data-end="1898" data-start="1632">The three-level podium will be topped by a communal resident space, featuring a covered pool designed to receive direct afternoon sun in winter, a neighbouring reflection pool, dining and event areas oriented to maximise sunset views, and an outdoor exercise zone.</p>

<p data-end="1898" data-start="1632"><img alt="Time &amp; Place" data-entity-type="file" data-entity-uuid="8d3eedc1-babb-44a3-bd96-d8a42f3adf1f" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-04-20%20at%209.37.48%E2%80%AFAM.png?VersionId=Ii7.4dvqNatu5GQi6bhqNjAswrMB998." /></p>

<p data-end="2132" data-start="1900">The design also incorporates highly crafted shopfronts and a clearly defined residential entry to activate the street. Juliette balconies to the podium residences will provide passive surveillance and a strong sense of habitation.</p>

<p data-end="2225" data-start="2134">Above, the larger apartments are housed within a light-coloured masonry and bronze tower.</p>

<p data-end="2469" data-start="2227">“The tower steps back in a series of gently curved volumes that reference the rich Art Deco context of Macleay Street,” the architects said. “Carefully calibrated vertical fins frame the views while providing privacy and a sense of refuge.”</p>

<p><img alt="Time &amp; Place" data-entity-type="file" data-entity-uuid="6fab60f4-3140-4469-b47a-48c781e0a30b" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-04-20%20at%209.28.44%E2%80%AFAM.png?VersionId=e5XxrM3kzdASdKlcIACHAHbOSZhSKC9O" /></p>

<p>Time &amp; Place has been one of the most active developers nationally in the last 12 to 24 months. Late last year they completed&nbsp;The Queensbridge in&nbsp;<a href="https://www.apartments.com.au/developments/southbank-vic-3006">Southbank</a>, a mixed-use tower with 353 apartments and a hotel. They are currently selling Park Modern, 246 apartments near the famous Botanic Gardens in South Melbourne.</p>

<p data-end="987" data-start="610">The developer has approval for The Burke, a mixed-use project in&nbsp;<a href="https://www.apartments.com.au/new-apartments/glen-iris-vic-3146">Glen Iris</a>&nbsp;being delivered in partnership with Woolworths. The 60 apartments, positioned above a new Woolworths supermarket, are expected to launch in the coming months. Time &amp; Place is also progressing plans for the redevelopment of&nbsp;<a href="https://www.apartments.com.au/developments/northcote-vic-3070">Northcote</a>&nbsp;Plaza, and have recently submitted plans for a <a href="https://www.apartments.com.au/news/vic/time-place-unveils-plans-22-storey-south-melbourne-tower">22-storey tower</a>, another in South Melbourne.</p>

<p data-end="1377" data-start="989">In&nbsp;<a href="https://www.apartments.com.au/developments/sydney-nsw">Sydney</a>, the developer has two projects in Manly: Two Tides, which is currently under construction, and an ultra high-end building on&nbsp;<a href="https://www.apartments.com.au/buildings/shoreline-manly-beach-89-90-north-steyne-manly">North Steyne</a>, fronting the beach. It is also continuing to work through the redevelopment of The Chimes building on Macleay Street in&nbsp;<a href="https://www.apartments.com.au/developments/potts-point-nsw-2011">Potts Point</a>, as well as Marlborough House, the redevelopment of the original David Jones warehouse building in&nbsp;<a href="https://www.apartments.com.au/developments/surry-hills-nsw-2010">Surry Hills</a>.</p>


Joel Robinson

First look: Time & Place settles on design for The Chimes, Potts Point redevelopment

<p><a href="https://www.apartments.com.au/developers/develotek">Develotek</a> is joining the likes of TOGA, Deicorp, and One Global Capital, betting on a boom in Five Dock ahead of the 2032 mooted opening of the Five Dock Metro Station.</p>

<p>Develotek, which is currently developing Bianca on the Drummoyne waterfront and has plans approved for a tower in Chatswood, has filed a State Significant Development Application for a <a href="https://www.apartments.com.au/new-apartments/79-81-queens-road-five-dock-nsw-2046">two-building project in the evolving Kings Bay precinct</a>.</p>

<p>The buildings, one more boutique just five storeys and the other 26 storeys, will rise from an 3,158 sqm site across&nbsp;79–81 Queens Road and 2–8 Spencer Street, will home 134 one-, two-, and three-bedroom apartments, above ground-floor retail and five basement levels of parking.</p>

<p>A key component of the proposal is the inclusion of 15 per cent of residential floor space as in-fill affordable housing, unlocking additional height and density under the Housing SEPP.</p>

<p><img alt="First Look: Develotek lodges State Significant shop top housing project in Five Dock precinct" data-entity-type="file" data-entity-uuid="3ee31bf7-75ba-4bc5-b190-49885193219f" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/podium_2.png?VersionId=730UbrduuwK3C1sO28RHjiLPUPqXqjkh" /></p>

<p>Designed by <a href="https://www.apartments.com.au/architects/plus-studio">Plus Studio</a>, the scheme adopts a podium-and-tower configuration, with a five-storey street wall along Queens Road transitioning to a 26-storey tower set deeper into the site. The ground plane prioritises activation and permeability, with retail frontages and a new through-site link connecting Queens Road to Spencer Street.</p>

<p>At the upper levels, the tower façade has been conceived using a modular system to support prefabrication and reduce construction waste, while improving build efficiency. The splayed form draws on the geometry of surrounding industrial rooftops, reinterpreting the area’s heritage in a contemporary expression while also helping to reduce solar heat gain to east and west-facing apartments.</p>

<p>“This project aspires to transform a former industrial site into a connected, resilient and people-focused urban community, grounded in Country, shaped by history, and designed to enrich everyday life within the evolving Kings Bay Precinct,” said John Walsh, Principal at Plus Studio.</p>

<p>The proposal reflects the broader transformation of the Kings Bay Precinct under the Parramatta Road Corridor Urban Transformation Strategy, marking a shift from its industrial past to a higher-density, mixed-use urban neighbourhood.</p>

<p><img alt="First Look: Develotek lodges State Significant shop top housing project in Five Dock precinct" data-entity-type="file" data-entity-uuid="abde734c-1e31-4a97-a1d2-fa9bcf31c380" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/building%20podium.png?VersionId=fNUupP6u146yEytQT31kKVRxwtACgPpP" /></p>

<p>Develotek is emerging as an active participant in the state’s affordable housing-led uplift pathway. The developer recently secured approval for a 34-storey mixed-use tower in Chatswood, where it similarly leveraged the in-fill affordable housing provisions to increase scale and deliver a 101-unit scheme with dedicated affordable apartments.</p>

<p>Their entry into Five Dock places them alongside a growing list of developers targeting the suburb ahead of its anticipated transport uplift, with Sydney Metro set to extend into the area. Major players including TOGA, Deicorp, and One Global Capital are all progressing large-scale precinct-style developments nearby, collectively reshaping the low-rise industrial fabric into a higher-density mixed-use corridor.</p>

<p>The Five Dock site sits within the Kings Bay Precinct, a key renewal area under the Parramatta Road Corridor Urban Transformation Strategy, where planning controls support significant uplift tied to affordable housing delivery. The consolidated 3,158 sqm site is currently occupied by low-rise industrial uses, including warehouses and vehicle workshops, earmarked for transition.</p>


First Look: Develotek joins in Five Dock apartment boom

<p data-end="132" data-start="47">Ascot’s Racecourse Road continues to be a hive of activity for Brisbane developers.</p>

<p data-end="359" data-start="134">Following Fortis and GRAYA, which are both preparing new projects along the key strip connecting Kingsford Smith Drive and Eagle Farm Racecourse, local developer <a href="https://www.apartments.com.au/developers/skyhold">Skyhold</a> is the latest to lodge plans for its own development.</p>

<p data-end="510" data-start="361">The group is proposing One One Two Residences, a boutique project comprising just seven apartments, named after its address at 112 Racecourse Road.</p>

<p>The proposal outlines a five-storey building on an 810 sqm site. The built form slightly exceeds the four-storey expectation under the neighbourhood plan, aligning instead with the emerging character of the strip. As the planning report notes, “the locality is characterised by a transition toward medium-rise residential development, with a number of recent developments… above the stipulated height limits.”</p>

<p><img alt="First Look: Skyhold lodges plans for boutique Ascot apartments as Racecourse Road revival gathers pace" data-entity-type="file" data-entity-uuid="ec577631-8c51-4163-960e-e7b3a77d655b" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Ascot.png?VersionId=iAzQ46D4Uu1UqiS0mVnlcy9jeFKBpJIj" /></p>

<p>Designed by 111 with landscape architecture by <a href="https://www.apartments.com.au/landscape-architect/paul-bangay-garden-design">Paul Bangay Studio</a>, the scheme adopts a layered architectural approach with strong articulation and a subtropical response. Deep balconies, integrated planters, and a mix of masonry and textured finishes define the façade, while upper-level setbacks reduce perceived bulk. The architectural statement describes “a series of horizontally expressed layers, defined by deep balconies and a consistent robust material palette,” aimed at delivering a refined streetscape presence.</p>

<p>Apartments are configured as large-format residences, including multiple three-bedroom layouts and a full-floor penthouse, supported by ground-level parking. A rooftop terrace will provide communal amenities including a pool and landscaped recreation areas. The design prioritises privacy, natural ventilation, and greenery, with planting integrated across all levels to soften the building form and contribute to the public realm.</p>

<p><img alt="First Look: Skyhold lodges plans for boutique Ascot apartments as Racecourse Road revival gathers pace" data-entity-type="file" data-entity-uuid="1e1219bd-b45a-4d7f-bbc7-7207d7b2fc94" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Ascot%20entry.png?VersionId=JIoUOLMgQ5xWpEF0etEI3ffIoIVjD7gO" /></p>

<p>The proposal sits within the Racecourse Road precinct, a key mixed-use spine in Ascot that continues to attract renewed development interest.</p>

<p>Later this year national developer Fortis will launch its own boutique development, which, pending council approvals, will be 16 apartments designed by Koichi Takada Architects, just down the street.</p>

<p>“Racecourse Road is going through a massive revitalisation and we’re proud to be a part of that transformation,” said Fortis's QLD General Manager, Dan Boman.</p>

<p>Nearby, GRAYA is advancing its larger-scale The Gallery, a mixed-use shop-top housing project designed to act as a “catalytic project for Racecourse Road.”</p>


First Look: Racecourse Road, Hamilton revitalization to continue as Skyhold joins the party

<p>Twenty-five years after launching one of Australia’s most visionary and successful masterplanned beach communities - Casuarina on the Northern NSW Tweed Coast - developer Consolidated Properties Group has unveiled plans for an $800 million sister project located 10 kilometres south, at Cudgera Creek near the coastal town of Pottsville.</p>

<p>CPG has taken the wraps off Caldera, a 78-hectare masterplanned village that builds on the legacy of Casuarina and aims to help address Northern NSW’s coastal housing shortage via the delivery of 550 homes built in a sustainable manner and addressing affordability and housing diversity, while also focusing on architectural and ecological merit.</p>

<p>Caldera is being brought to life by the same creative team that delivered Casuarina, led by Consolidated Properties CEO and chairman Don O’Rorke, Hutchinson Builders chairman Scott Hutchinson and renowned urban designer Brian Toyota, of architectural practice Bureau Proberts.</p>

<p>CPG has lodged a rezoning application with Tweed Shire Council for the Caldera site, which has been designated since 1991 as the Dunloe Park Urban Release Area, the final land release area within the Pottsville locality and one of only four remaining growth areas along the entire Tweed coastal strip. Preliminary plans for Caldera feature a 13-hectare retail and commercial precinct at the core of the village, surrounded by meticulously planned residential areas comprising around 550 homesites.</p>

<p>The retail hub will be anchored by a Coles Supermarket and will offer 7000 sqm of retail and 23 commercial lots designed to serve the local community and bring together curated shopping, dining, gym, wellness, childcare, medical and other essential services.</p>

<p><img alt="Cons prop" data-entity-type="file" data-entity-uuid="fca7dc71-4b71-45b1-bb04-5a60bd7158d0" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-04-20%20at%208.34.04%E2%80%AFAM.png?VersionId=vAKwIvLuwmTKj6blHJRYIEeXS_8lCgUx" /></p>

<p>The project will create more than 1500 jobs over its development cycle, according to its economic modelling, and significantly address the shortage of employment land in the Tweed.</p>

<p>The residential areas will encourage a sense of community via a cohesive urban design that encourages walking, cycling, enhanced resident connectivity and reduced reliance on cars via bike paths and pedestrian-friendly streets.</p>

<p>Homesites will include a range of options from premium ridge-top homes to affordable housing options, ensuring a community that is inclusive of different income levels and designed to appeal to a wide demographic from baby boomers to families, singles and professionals. Architectural and planting covenants on home building will support the village’s built form and protect its character.</p>

<p>O’Rorke says CPG intends Caldera to be a model project delivered efficiently in a dedicated urban release area and ‘very much for this region and for this time’.</p>

<p>“Our vision for Caldera is to create a modern coastal village with its own unique northern NSW identity,” he said.</p>

<p>“Building on our legacy of Casuarina, 25 years on, this new village is designed to stand apart, offering the future of modern living, balancing the natural beauty of the region with contemporary amenities and convenience.</p>

<p>“Caldera will be more than just a place to live - it will be a welcoming, inclusive coastal village neighbouring Pottsville that invites visitors and embraces new residents. With its strong ties to the land, vibrant lifestyle and sense of place, Caldera will set a new standard for village living in Northern NSW.”</p>

<p><img alt="CPG" data-entity-type="file" data-entity-uuid="9a5a7cf4-5f76-4ddf-bd05-c8fb77d0a787" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-04-20%20at%208.33.59%E2%80%AFAM.png?VersionId=J1CzCGD7kE7fcAMd41V4pKAf_sI4L5Jv" /></p>

<p>The project’s centrepiece is environmental sustainability, with comprehensive wetlands protection measures and planting of native trees, parklands, village greens and communal grounds to enhance the natural beauty of the area.</p>

<p>CPG will also deliver a developer-funded wastewater treatment plant to ensure zero ocean outflows and provide high quality long-term infrastructure for Tweed Shire.</p>

<p>A key focus is wildlife management planning, including extensive conservation controls for the West Pottsville koala population, aligned with Tweed Shire Council’s Koala Plan of Management and designed to enhance koala habitat connectivity and future population growth.</p>

<p>Caldera will extend the existing koala corridor by connecting koala precincts west of the Pacific Highway with populations in the north and east precincts. A koala underpass will be created under Pottsville Road to complete the connection of this important corridor. Native tree plantings will expand essential koala food sources, while approximately eight kilometres of exclusion fencing will be constructed to safeguard the koalas from urban threats.</p>

<p>The Caldera site is nestled in the hills of Cudgera Creek and benefits from its rich natural surroundings including the Pottsville Wetland, Cudgera Creek Nature Reserve and nearby Pottsville Beach.</p>

<p>It takes its name from the surrounding Tweed Shield Volcano and Caldera, the vast bowl-shaped depression stretching from Byron Bay to the Queensland border that 20 million years ago was the world’s largest shield volcano and which has shaped the region’s striking landscape, with Mount Warning standing as one of its most iconic features.</p>

<p>The development is a joint venture between CPG and Pottsville Development Corporation, which made its first investment in Pottsville more than 45 years ago and is the developer of Black Rocks By the Sea, a masterplanned community now part of the fabric of Pottsville and which was the catalyst for the construction of a bridge across the Pottsville Estuary, providing direct access to the beach.</p>

<p>CPG’s $1.5 billion Casuarina Beach township, 10 kilometres to the north of Caldera, commenced construction in 2000 and has become the model for modern Australian, eco-sensitive beachside development.</p>


Consolidated Properties unveils $800m coastal village Caldera in Casuarina

<p data-end="184" data-start="92">Growing national developer Time &amp; Place has announced its fifth new apartment development.</p>

<p data-end="408" data-start="186">With two projects in Manly and two upcoming in Surry Hills and Potts Point, the developer, which expanded beyond Melbourne just a few years ago, is now heading to Mosman. It is planning 53 new apartments on Redan Street.</p>

<p data-end="553" data-start="410">The 3,233 sqm site, spanning <a href="https://www.apartments.com.au/new-apartments/40-48-redan-street-mosman-nsw-2088">40–48 Redan Street</a> with frontage to Redan Lane, is located just under 400 metres from Spit Junction Town Centre. It is reported the developer paid around $100 million for the five-site amalgamation.</p>

<p data-end="762" data-start="555">Time &amp; Place, founded by Tim Price and backed by James Packer’s private investment firm NPACT, has submitted the project as a State Significant Development through the NSW Government’s Housing Delivery Authority pathway.</p>

<p data-end="918" data-start="764">Of the 53 apartments, 42 will be released to the market, with the remaining 11 allocated as affordable housing in line with NSW Government requirements.</p>

<p data-end="1241" data-start="920">fjc Studio has designed the building. In its Design Report, the architect said the diverse mix of dwelling types and sizes, including 11 two-bedroom affordable housing units, 40 three-bedroom apartments, and two four-bedroom residences, will support a broad demographic, including families, downsizers, and key workers.</p>

<p data-end="1519" data-start="1243">The development will rise to nine levels, a height encouraged by the NSW Government due to the site’s proximity to Spit Junction, which has been identified as a low- to mid-rise centre. Developments within a certain proximity to these centres are permitted increased height.</p>

<p data-end="1830" data-start="1521">fjc said the project “achieves an appropriate density outcome for its setting by balancing increased housing supply with strong amenity performance,” adding that it “makes a measurable contribution to NSW housing supply targets through the delivery of additional dwellings and dedicated affordable housing.”</p>

<p data-end="1898" data-start="1832">The new development will replace five existing two-storey homes.</p>

<p data-end="2218" data-start="1900">“By aligning with the objectives of the Housing SEPP and applying careful architectural and urban design principles, the development provides high-quality residential accommodation that integrates sensitively within its established Mosman context and delivers enduring benefits to residents and the wider community.”</p>

<p data-end="2293" data-start="2220">Mosman has become increasingly popular with developers in recent years.</p>

<p data-end="2616" data-start="2295">Developer Abadeen has been particularly active, with Mosman Residences currently on the market and under construction on Clifford Street. It also has an upcoming Burran Avenue project, comprising just three apartments on the Balmoral Slopes, and recently secured the Midas and Honeysuckle nursery site on Military Road.</p>

<p data-end="2729" data-start="2618">Prosker Property has a project on Redan Lane, just a few doors down from Time &amp; Place’s proposed development.</p>

<p data-end="2948" data-start="2731">Developers including Toohey Miller, DARE Property Group, and WINIM also have projects underway in the area. In 2024, a five-year target was set for the Mosman LGA to increase housing supply by 500 dwellings by 2029.</p>

<p>Time &amp; Place entered the Sydney market with Two Tides, its under construction Manly development. Given its sales success, it has secured another development in the area, more boutique, facing the beach on North Steyne.</p>

<p>They are hoping to launch their redevelopment of The Chimes in Potts Point this year, and next year will look to take to market Marlborough House, an adaptive re-use of the landmark David Jones warehouse in Surry Hills.</p>


Time & Place to take on Mosman apartment market

<html><body>
<p>The property boom is officially everywhere.</p>

<p>Data released by the Australian Bureau of Statistics found that every capital city record a rise in residential property prices in the December quarter.</p>

<p>The three per cent gains were the biggest recorded since the December quarter 2019.</p>

<p>The pent up demand from Melbourne's prolonged locked down drove the Victorian capital to be the joint best performer over the three months, with prices up 3.4 per cent, the same as Canberra.</p>

<p>[smartcode_project:default project_id=27728]</p>

<p>Hobart followed, with prices up 3.1 per cent, then Sydney, up three per cent.</p>

<p>Perth's 2.9 per cent gains came in slightly below average, as did Brisbane's 2.7 per cent and Adelaide's 2.6 per cent gains. Weighing the average down was Darwin, however the Northern Territory capital still posted gains of 2.2 per cent.</p>

<p><img alt="" height="868" src="https://s3-ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/pictures/article-images/abs_prices.jpg" width="1800"></p>

<p>ABS head of prices statistics Michelle Marquardt said the rise in property prices is consistent with a range of housing market indicators.</p>

<p>"New lending commitments to households, auction clearance rates and days on market all improved during the December quarter."</p>

<p>Annually, residential property prices rose 3.6 per cent, the ABS data found.</p>

<p>[smartcode_project:default project_id=7864]</p>

<p>"This is the first time that all capital cities have seen an annual rise since the December quarter 2014," Marquardt said.</p>

<p>Hobart prices jumped 6.4 per cent, followed by a 5.2 per cent gain in Canberra and 4.2 per cent in Perth.</p>

<p>House prices rose 3.9 per cent in Sydney and 3.7 per cent in Melbourne, while attached dwelling prices rose 1.4 per cent in Sydney and 2.5 per cent in Melbourne.</p>
</body></html>

The three per cent gains were the biggest recorded since the December quarter 2019

Property boom officially everywhere as all state and territory capitals see December quarter growth: ABS

<html><body>
<p>Private sector house approvals jumped 6.1 per cent over November to reach their highest levels since 1999, figures released by the ABS found.</p>

<p>They've now soared by 40 per cent since June.</p>

<p>Daniel Rossi, director of construction statistics at the ABS, said that Federal and state housing stimulus measures and low interest rates have resulted in strong demand for detached dwellings.</p>

<p>There were 11,489 houses approved for building over November.</p>

<p>Queensland led the way in approvals, up 17 per cent, followed by Western Australia up 7.5 per cent.</p>

<p>South Australia saw 2.8 per cent more private sector houses approved, Victoria 1.5 per cent and New South Wales 0.7 per cent.</p>

<p><img alt="" height="1083" src="https://s3-ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/pictures/article-images/november_building_approvals.jpg" width="1200"></p>

<p>Total building approvals were up 2.6 per cent, beating economist forecasts of a two per cent rise.</p>

<p>Over October approvals rose 3.6 per cent.</p>

<p> </p>
</body></html>

There were 11,489 houses approved for building over November

Private sector house approvals reach highest levels since 1999

<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>
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<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>
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<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>
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<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>
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<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>Population growth in Australia has slowed from its recent peak of a shade above 405,000 per annum in September 2013 back to around 354,600 per annum on the latest figures.</div>
<div> </div>
<div>This headline number will have some way to fall yet, with the December 2014 figures yet to be reported.</div>
<div> </div>
<div>However, a rebound is in the post in time.</div>
<div> </div>
<div>In the summer month of January 2015, traditionally a strong month for long term arrivals, the <a href="https://www.abs.gov.au/ausstats/abs@.nsf/mf/3401.0/" target="_blank"><em>Australian Bureau of Statistics</em> figures</a> recorded a bounce from 52,160 to 76,310, although the January result is still 9 per cent lower than one year ago.</div>
<div> </div>
<div><img src="/images/2015/06/09/wargent1.jpg" alt="" width="751" height="366"></div>
<div> </div>
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<div>
<div>On the departures side, however, long term and permanent departures also declined in January from 46,740 to 42,100, which notably is a below<strong> </strong>figure than the prior year comparative.</div>
<div> </div>
<div>On a rolling annual basis net long term migration of 318,560 sits some 22 per cent below the most recent peak of January 2013.</div>
<div> </div>
<div><img src="/images/2015/06/09/wargent2.jpg" alt="" width="673" height="324"></div>
<div> </div>
<div>
<div>When it comes to the long term and permanent departures data, stated intentions when ticking boxes on forms are one thing, but today's reality is quite another.</div>
<div> </div>
<div>Boomerang departures are one of the reasons that our capital cities appear so crowded, despite the apparently slowing population growth data.</div>
<div> </div>
<div>On the one hand we now have record high short term arrivals at close to 7 million per annum.</div>
<div> </div>
<div>And meanwhile most of those who claim to be migrating overseas permanently have "pulled a boomerang" within a year of leaving.</div>
<br><div>
<a href="https://www.abs.gov.au/ausstats/abs@.nsf/Latestproducts/3401.0Main%20Features2Jan%202015?opendocument&amp;tabname=Summary&amp;prodno=3401.0&amp;issue=Jan%202015&amp;num=&amp;view=" target="_blank">Analysis</a> of prior years' data from the <em>Australian Bureau of Statistics</em> reveals that while ostensibly more than 380,000 Australians left the country on a long term or "permanent" basis over the past 12 months, more than 80 per cent of them are likely return home within just a year!</div>
<br><div><span><span><em>"Analysis shows that the majority of those with an intention of permanently departing, return to Australia within the following year. </em></span></span></div>
<div><span><span><em> </em></span></span></div>
<div><span><span><em>For example, in the calendar year 2011, out of the 84,240 Australian residents who stated they were departing permanently, only 15,890 spent 12 months or more overseas."</em></span></span></div>
<div> </div>
<div>So much for the "long term-ness" of the long term departures, if you'll kindly pardon my dreadful English.</div>
<div> </div>
<div>Perhaps those pastures further afield aren't as greener-er as what people think they are, and that's why they done that.</div>
<div> </div>
<div>OK I'm getting rather grammatically bogged down here, so let's move on to look at...</div>
<div> </div>
<div><strong><span style="text-decoration: underline;">Record high visitors (the delayed Oprah effect)</span></strong></div>
<div> </div>
<div>Shifting seamlessly along to short term arrivals we can see that visitors to Australia have sprinted to their highest level on record at more than 6.9 million.</div>
<div> </div>
<div><img src="/images/2015/06/09/wargent3.jpg" alt="" width="829" height="390"></div>
<div> </div>
<div>
<div>The idea that Kiwis are flocking home to rediscover the beauty of their homeland is an appealing narrative, but also one that has been overplayed.</div>
<div> </div>
<div>In fact, record numbers of New Zealanders arrived in Australia in the past year on a "short term" basis at close to 1.25 million.</div>
<div> </div>
<div>There has also been a notable surge in the number of American visitors to Australia to a record 555,300 on a rolling annual basis.</div>
<div> </div>
<div>Oprah Winfrey said it'd happen, and it seems she was right.</div>
<div> </div>
<div>Although the detailed figures do show a spike relating to her December 2010 visit - from memory she brought along a few hundred whooping guests, and even greater numbers of security guards and filming crew - it is only in the past 12 months that American visitor numbers have really picked up strongly.<br><br>Naturally the decline of the Aussie dollar towards the mid 70 cent range against the greenback is a big driver here. </div>
<div> </div>
<div><img src="/images/2015/06/09/wargent4.jpg" alt="" width="893" height="434"></div>
<div> </div>
<div><span>And the below mega-trend, I've documented here often previously.</span></div>
<div><span> </span></div>
<div><span><img src="/images/2015/06/09/Screen%20Shot%202015-06-09%20at%209.45.00%20AM.png" alt="" width="744" height="341"></span></div>
</div>
<div> </div>
<div>
<span>Expect more of the same based upon what I've seen around the traps in 2015.</span><br><br><strong><span style="text-decoration: underline;">Asian settlers </span></strong><br><br><div>In terms of settlers in Australia the trend has clearly been away from Brits and Kiwis since the financial crisis and towards Chinese and Indians.<br><br>
</div>
<div>However, there was a reasonable rebound in the number of New Zealander settlers in January so this particular downtrend may have run its course for now, although Kiwi settler numbers are still clearly down by 10 per cent or so from a year ago.</div>
<div> </div>
<div>Poms clearly are evidently still opting to stay at home, though.</div>
<div> </div>
<div><img src="/images/2015/06/09/Screen%20Shot%202015-06-09%20at%209.46.16%20AM.png" alt="" width="817" height="411"></div>
<div> </div>
<div><span>The last 12 months has seen some 71,310 settlers from Asia, another mega-trend that shows no real sign of abating.</span></div>
<div><span> </span></div>
<div><span><img src="/images/2015/06/09/Screen%20Shot%202015-06-09%20at%209.47.21%20AM.png" alt="" width="828" height="418"></span></div>
<div> </div>
<div> </div>
<div>
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<div><strong><span style="text-decoration: underline;">The wrap</span></strong></div>
<div> </div>
<div>The rolling long term net migration figures imply that Australian population growth will sink back towards the low 300,000s range over the near term.</div>
<div> </div>
<div>However, a complex range of factors will combine to drive a rebound in due course. </div>
<div> </div>
<div>Not least of these trends is that most who claim to be slinging their hooks for good don't even make it past year one before "pulling a boomerang".</div>
<div> </div>
</div>
<div class="post-footer">
<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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Boomerang departures drive population growth rebound: Pete Wargent

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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>
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Construction activity declines in the regions: Pete Wargent

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<p>Construction work done missed expectations in the fourth quarter shrinking by another 3 per cent to $51.1 billion. </p>
<div>That follows on from a significant contraction in Q3, so in the second half of 2018 construction work done slowed by about 7 per cent overall.</div>
<div> </div>
<div>Quite nasty on the face of it, although we were coming off a high base. </div>
<div> </div>
<div>The engineering construction work done figures took a 5 per cent hit in Q4, which sounds quite dire at first blush.</div>
<div> </div>
<div>To be fair, the ABS has never gone big on accruals accounting for one-offs like the LNG Prelude platform, and as the Gorgon and Ichthys projects drop off the headline figures will inevitably appear weak - yet the underlying figures aren't quite so bad.</div>
<div> </div>
<div>In fact mineral exploration spend has been on the rise, so investment and mine restarts will likely pick up, especially in Western Australia. </div>
<div> </div>
<div>Here are the trend figures for engineering, in chain volume measures terms (you can click to expand the charts).</div>
<div> </div>
<div><a href="https://2.bp.blogspot.com/-vHa4gkejwfc/XHXfv_tDHhI/AAAAAAAAutU/tZU6tx8YpQsd2_kiSR5ZznERJZye_7BAACLcBGAs/s1600/A1.jpg" target="_blank"><img src="https://2.bp.blogspot.com/-vHa4gkejwfc/XHXfv_tDHhI/AAAAAAAAutU/tZU6tx8YpQsd2_kiSR5ZznERJZye_7BAACLcBGAs/s640/A1.jpg" width="640" height="374" data-original-height="803" data-original-width="1367"></a></div>
<p> </p>
<div>Residential construction work dropped by about 3½ per cent in the fourth quarter, although overall activity was actually still quite high on these estimates. </div>
<div> </div>
<div>A significant driver of the squeeze was slowing Sydney and Brisbane apartment construction, and there'll be plenty more to come here in 2019. </div>
<div> </div>
<div><a href="https://2.bp.blogspot.com/-iOylhEeJli8/XHXfwEaU6iI/AAAAAAAAutc/1WlaQhkwTqYA1J_O_tsLAYo-jm3j10fEwCLcBGAs/s1600/A2.jpg" target="_blank"><img src="https://2.bp.blogspot.com/-iOylhEeJli8/XHXfwEaU6iI/AAAAAAAAutc/1WlaQhkwTqYA1J_O_tsLAYo-jm3j10fEwCLcBGAs/s640/A2.jpg" width="640" height="376" data-original-height="815" data-original-width="1387"></a></div>
<p> </p>
<div>For completeness, quarterly 'other residential' work done slowed by about 4½ per cent in H2 2018 from $8.2 billion to $7.8 billion.</div>
<div> </div>
<div>In my humble opinion there could well be another couple of billion of quarterly declines to come here in 2019 and beyond, even if Australia is moving more towards attached dwellings and medium-density living. </div>
<p> </p>
<div><a href="https://4.bp.blogspot.com/-_ipAqrmh5jM/XHXfvygOfhI/AAAAAAAAutY/eBW_Qxir5zgbz2qFMTYqJOok537AOZ0wQCLcBGAs/s1600/A3.jpg" target="_blank"><img src="https://4.bp.blogspot.com/-_ipAqrmh5jM/XHXfvygOfhI/AAAAAAAAutY/eBW_Qxir5zgbz2qFMTYqJOok537AOZ0wQCLcBGAs/s640/A3.jpg" width="640" height="392" data-original-height="834" data-original-width="1361"></a></div>
<div> </div>
<div><strong>The wrap</strong></div>
<div> </div>
<div>Overall, a fairly ordinary miss on expectations. </div>
<div> </div>
<div>There are still too many partials to be reported for Q4 2018 to have any level of certainty, but while a technical recession perhaps remains unlikely, in per capita terms it looks very possible.</div>
<div> </div>
<div>Banks on strike; no chance of a hike.</div>
<div> </div>
<div><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></div>
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Construction misses in Q4: Pete Wargent

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<p><span>The Australian Bureau of Statistics (ABS) released demographic data for the December 2014 quarter yesterday. The data highlighted a continuing slowdown in the rate of national population growth, with the quarterly increase now lower than slump in population growth recorded during the GFC. In particular the mining states and territories are recording the biggest slowdown in population growth fueled by a slowdown in both interstate and overseas migration.</span></p>
<p><a href="/images/2015/06/26/Chart-13.jpg" target="_blank"><span>Click to enlarge</span></a></p>
<p><span><img src="/images/2015/06/26/Chart-13.jpg" alt=""></span></p>
<p> </p>
<p><span>The data showed that throughout 2014 Australia added another 330,202 persons.  Although this is still a relatively high rate of population growth, it is the lowest annual increase in population since the population increased by 327,637 persons over the 12 months to September 2011.  Over the final quarter of the year the national population increased by 64,010 persons which was its lowest quarterly increase since June 2006 (52,834).</span></p>
<p><a href="/images/2015/06/26/Chart-23.jpg" target="_blank"><span>Click to enlarge</span></a></p>
<p><span><img src="/images/2015/06/26/Chart-23.jpg" alt=""></span></p>
<p> </p>
<p><span>At a national level population growth is comprised of overseas migration (arrivals minus departures) and natural increase (births minus deaths), any interstate migration is neutral at a national level.  Over the past year, the country experienced a natural increase of 146,067 persons and net overseas migration of 184,135 persons.  The rate of annual natural increase is at its lowest level since December 2006 (139,793) and annual net overseas migration is at its lowest level since June 2011 (180,372).  On a quarterly basis, natural increase was recorded at 36,517 persons (its lowest level since December 2006) and net overseas migration was recorded at 46,034 persons (its lowest level since June 2011).</span></p>
<p><a href="/images/2015/06/26/Chart-33.jpg" target="_blank"><span>Click to enlarge</span></a></p>
<p><img src="/images/2015/06/26/Chart-33.jpg" alt=""></p>
<p>With the national population increasing by 330,202 persons over the past year, the majority of population growth has taken place in the largest states.  NSW (31.2%) and Vic (30.7%) accounted for a combined 61.9% of national population growth.  If you add Qld (19.4%) and WA (12.1%) the four largest states accounted for 93.5% of national population growth over the year.</p>
<p>As far as the rate of population growth goes, for the first time since September 2006 WA is no longer the state with the most rapid rate of population growth with Vic taking over the mantle. Vic’s population increased by 1.8% over the year followed by: WA (1.6%), NSW and Qld (both 1.4%), ACT (1.1%), SA (0.9%), NT (0.4%) and Tas (0.3%).  Qld, WA and NT in particular are seeing the impact of the mining downturn with fewer workers required in these states as the pipeline of major infrastructure projects winds down translating into slower population growth. Two years ago these states were recording annual population growth of 2.0% in Qld, 3.7% in WA and 2.8% in NT.</p>
<p><a href="/images/2015/06/26/Chart-42.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2015/06/26/Chart-42.jpg" alt=""></p>
<p><span>Net overseas migration has been slowing at a national level and as the above chart shows, all states are experiencing a fall in net overseas migration.  The full brunt of the slowdown in net overseas migration is once again being felt by the resource states.  Annual net overseas migration is -30.9% lower in Qld, -47.6% lower in WA and -56.0% lower in NT.  All other states except for NSW (+1.9%) and ACT (+4.1%) have recorded a fall in net overseas migration over the year, but nowhere near the extent of the mining states and territories.  The declines in these states were recorded at -4.2% in Vic, -9.0% in SA and -2.9% in Tas.  The data also highlights that overseas migrants have a clear preference to settle in the larger states.  Over the past year, 37.9% of net migration occurred in NSW with a further 30.4% in Vic, 13.2% in Qld and 10.3% in WA.</span></p>
<p><a href="/images/2015/06/26/Chart-53.jpg" target="_blank"><span>Click to enlarge</span></a></p>
<p><span><img src="/images/2015/06/26/Chart-53.jpg" alt=""></span></p>
<p> </p>
<p>At a national level net interstate migration has no impact however, it does have a significant impact across individual states.  Over the 12 months to December 2014, there were 335,256 interstate movements across the Australian states.  Historically Qld has attracted as high number of interstate migrants however; net interstate migration to the state has slowed sharply over recent years.  Across the states, Vic now attracts the most net interstate migrants (9,336) followed by Qld (5,598) and these are the only two states that have recorded a net gain in interstate migration over the year.  Vic’s net gain from interstate migration is a record high while migration to Qld is at its lowest level on record.  The net outflow of residents from the remaining states was recorded at: -5,572 persons in NSW, -2,744 in SA, -400 in WA, -1,278 in Tas, -3,392 in NT and -1,548 in ACT.  Despite the net outflow, the net number of residents leaving NSW is at a record low.  On the other hand the loss of residents from WA is the largest since September 2003 and the outflow from NT is the largest on record.</p>
<p>In terms of natural increase the states with the largest overall populations also have the greatest natural increase.  There has been a sharp decline in natural increase in NSW over the past few years while natural increase is trending higher in WA.  The state-by-state shares of natural increase are: 26.5% in NSW, 24.8% in Vic, 23.5% in Qld, 4.9% in SA, 14.8% in WA, 1.0% in Tas, 2.0% in NT and 2.6% in ACT.</p>
<p>The demographic data highlights challenges for the Australian economy and individual states. Gross domestic product has been slowing and is much lower on a per capita basis. With population growth slowing and set to slow further in coming quarters (as foreshadowed in the monthly overseas arrivals and departures data) this poses a challenge for the national economy.  The resource states in particular are being impacted as they are attracting fewer migrants from both interstate and overseas. Conversely, NSW and Vic (which are a proxy for Sydney and Melbourne) are the places that both domestic and international migrants want to head to. </p>
<p>This in turn fuels demand for housing, creates the need for more jobs and requires more spending on infrastructure. To-date it doesn’t look as if the sharp rises in home values in Sydney and to a lesser degree Melbourne over recent years is stopping migrants heading to these areas. You would have to think that at some point this will change but no one has a crystal ball to know exactly when that inflection point will occur. Particularly given how low the cost of debt currently is with interest rates so low, furthermore rental pressures are easing given already high new housing construction and a record high pipeline of approvals to potentially follow.</p>
<p><em>Cameron Kusher is RP Data’s senior research analyst. Follow Cameron on Twitter <a href="https://twitter.com/cmkusher" target="_blank">here</a>. </em></p>
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ckusher-ujnxiKuFQs

Australia’s rate of population growth continues to slow: Cameron Kusher

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<p>Last week, I noticed Craig James, chief economist of Commsec, pointing out to David "Kochie" Koch that although wages growing have been growing slower than prices, household incomes are actually growing at the fastest pace in two years, increasing by 4.7% in the last 12 months.</p>
<p>While wages growth has indeed slowed (<a href="https://petewargent.blogspot.co.uk/2014/05/wages-grow-at-26" target="_blank">as I analysed here,</a> among other places), apparently household disposable incomes have been rising more quickly. Interesting statistic I thought, so I asked "CJ" for the source.</p>
<p align="center"><img src="https://3.bp.blogspot.com/-7SzKL4Y4BIU/VCF5vBSJ3TI/AAAAAAAAP70/Yhw_QqERMLs/s1600/HICJ.jpg"> </p>
<p>Straight from the National Accounts, advised CJ. So I thought I'd take a little look to confirm or deny.</p>
<p><strong>Household gross incomes rising</strong></p>
<p>First, I ran the seasonally adjusted household income data from the National Accounts.</p>
<p>As you can see from the green line circled below, after a rampant boom in employee compensation spurred on by Australia's mining boom, income growth from paid employment has slowed since December 2012.</p>
<p>Although the trend does remain up on a national basis, in real terms wages are at best flat and at worst declining moderately.</p>
<p>Of course there are many forms of income including dividends, rent, social assistance, other transfers, and more besides, and overall household incomes have increased at the significantly faster pace of 4.4% seasonally adjusted over the last year according to the Australian Bureau of Statistics (ABS) - in essence, everything that is not wages has increased in real terms.</p>
<p> </p>
<p align="center"> <img src="https://2.bp.blogspot.com/-8H1Wz0wmWcQ/VCF5psR7OkI/AAAAAAAAP7Q/opfMA4K1EVA/s1600/HI1.jpg"></p>
<p>Still, even this income growth cannot fully account for a 4.7% rise in household disposable incomes.</p>
<p><strong>Payables down?</strong></p>
<p>The big mover in terms of payables in recent decades has of course been interest paid on dwellings, which skyrocketed until September 2008, then collapsed as interest rates were slashed and house prices eased. Then it repeated the trick once again from September 2011 as the latest easing cycle took hold.</p>
<p>With interest rates significantly closer to the zero bound than historically has been the case and household debt levels today much higher than they were before the deregulation of the banking system, relatively small adjustments to mortgage rates can result in wild swings in total interest payments on dwellings. And how!</p>
<p align="center"><img src="https://3.bp.blogspot.com/-xFfk72ZbyRo/VCF5p2fT1FI/AAAAAAAAP7U/ucfhOLYzSDo/s1600/HI2.jpg"> </p>
<p>With most mortgage debt being charged on variable rate products, this explains why Australia's housing market is so sensitive to shifts in interest rates, and why only a few rate hikes would quickly quell speculative sentiment and swiftly end the property price uptrend for this cycle.</p>
<p>Why? Because the people lumbered with the highest mortgage debt as a percentage of their household income are those at the margin i.e. those buying much of the property which transacts.</p>
<p>It is difficult to draw hard conclusions from macro level data, but the two charts above show that for existing homeowners on variable rate mortgages, disposable income has surely roared higher in the period since the dramatic peaks in interest repayment levels of September 2008 and September 2011 respectively.</p>
<p>Anyone with existing mortgage debt who has remained in employment will appreciate just how comparatively easy life is with a standard variable rate of 5.2% rather than the 9.6%, we saw as recently as July and August 2008.</p>
<p align="center"><img src="https://www.rba.gov.au/speeches/2013/images/sp-so-230413-graph11.gif"> </p>
<p style="text-align: left;" align="center"><em>This article continues on the next page. Please click below to continue. </em></p>
<hr class="system-pagebreak">
<p><strong>Household income accounts</strong></p>
<p>On a national basis total gross income dwarfs property payables largely because most Australians are not mortgaged to the eyeballs as is widely believed. </p>
<p>Depending on your state, between a quarter and a third of homes <a href="https://petewargent.blogspot.co.uk/2014/05/dynamics" target="_blank">are owned debt free</a> while mortgage holders over recent years have been moving well ahead on their repayments. </p>
<p>Meanwhile income taxes payable have moved higher in concert with rising taxable incomes. </p>
<p>The trend in gross disposable income is shown by the red line below.</p>
<p align="center"> <img src="https://4.bp.blogspot.com/-ew6soAsW11s/VCF5umNs6jI/AAAAAAAAP7w/d8MQCRJdCdQ/s1600/HI4.jpg"></p>
<p>So, in this sense, Commsec's observation is correct - gross disposable incomes are indeed 4.7% higher than a year ago.</p>
<p>However it is a fair bet that those who are not homeowners and are 100 percent reliant on a salary for their income do not feel much better off, if they even do at all.</p>
<p>Homeowners and in some instances those with diversified income streams are clearly benefiting very significantly from record low borrowing rates.</p>
<p>These things naturally tend to work in cycles, though - when interest rates were much higher and rising and dwelling prices easing, the boot was on the other foot entirely.</p>
<p> </p>
<p align="center"> <img src="https://3.bp.blogspot.com/-CV4uoAihbTI/VCF5tvRx9fI/AAAAAAAAP7k/dN77fz2dzgw/s1600/HI5.jpg"></p>
<p>Gross disposable income nationally has been launched massively higher by more than 80% in the past decade, unadjusted for population growth.</p>
<p>However, the trend disposable income growth per capita seems likely to slow, and if interest rates are hiked several times gross disposable income in aggregate could plateau unless wages growth rebounds.</p>
<p> <img src="https://2.bp.blogspot.com/-fXYwdyho_XE/VCF5vQP6fjI/AAAAAAAAP74/O2tfGis_r1o/s1600/HI6.jpg"></p>
<p> </p>
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Are household disposable incomes really increasing at 4.7%?

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<p>Building activity data for the June 2017 quarter was published by the Australian Bureau of Statistics earlier this week. The data contains additional insight to the housing construction sector, tracking quarterly dwelling commencements, completions and counts of dwellings under construction. The data is showing a softening in commencements as approvals have slowed but still heightened levels of completions and dwellings under construction. </p>
<h3>Dwelling commencements</h3>
<p>Over the June 2017 quarter, seasonally adjusted data showed that 28,087 new houses and 24,380 new units commenced construction nationally.  The number of houses commenced was 3.3% higher over the quarter but -7.1% lower than a year earlier while unit commencements were down -0.8% over the quarter and -6.6% lower over the year.  <br> <br>Year-on-year new house commencements were lower in each state and territory, recorded at: -3.5% in NSW, -7.2% in Vic, -3.1% in Qld, -10.6% in SA, -12.2% in WA, -7.0% in Tas, -29.1% in NT and -37.9% in ACT.<br> <br>Year-on-year new unit commencements were higher in NSW (3.3%), Vic (3.2%), SA (35.0%) and Tas (153.1%) and they were lower in Qld (-30.4%), WA (-40.5%), NT (-40.9%) and ACT (-17.7%).</p>
<p>Commencements for houses picked up over the quarter but are lower across all regions over the year.  Meanwhile unit commencements are trending lower in most states and territories with notable exception of NSW, Vic and Tas.  NSW and Vic have been home to the two strongest housing markets over recent years (Sydney and Melbourne) and are seeing the largest increases in population fuelling housing demand.  Meanwhile, dwelling values in Tasmania’s largest city (Hobart) are rising at the fastest rate of any capital city while stock levels are very low so it seems a supply response is occurring.</p>
<h3>Dwelling completions</h3>
<p>Seasonally adjusted data nationally shows that over the June quarter there were 28,251 houses and 25,090 units completed nationally.  Interestingly these figures are fairly closely aligned to commencements so what was completed was effectively replaced as having started construction.  Over the quarter, new house completions were down -1.2% and new unit completions were -10.2% lower.  Year-on-year new house completions were -9.0% lower and new unit completions were down -5.2%.<br> <br>State and territory data which isn’t seasonally adjusted shows that year-on-year, new house completions rose in NSW (8.6%), Qld (18.3%) and ACT (73.3%) while completions were lower in Vic (-12.8%), SA (-3.7%), WA (-45.3%), Tas (-29.8%) and NT (-44.2%).<br> <br>New unit completions increased over the year in Vic (11.1%), Qld (13.7%) and ACT (29.6%) and were lower in NSW (-20.4%), SA (-41.6%), WA (-22.3%), Tas (-40.0%) and NT (-69.9%)</p>
<p>Completions remain at high levels however, they have eased back a little.  Given that there remains a high volume of stock under construction (as we will analyse shortly) it’s anticipated that completions are likely to remain elevated for some time.</p>
<h3>Dwellings under construction</h3>
<p>At the end of the June 2017 quarter, there were 216,242 dwellings under construction nationally.  Although the number of dwellings under construction is down from its historic high of 224,314 in September 2016, it is still at an extremely elevated level.  As a comparison, the long-term average number of dwellings under construction at the end of a quarter is 106,774 and even over the past 10 years the average has been recorded at 153,545.  In June 2017, there were 62,409 new houses and 151,510 new units under construction nationally.  Again, both are well above the long-run averages of 48,329 and 38,964 respectively.<br> <br>Looking at the data across the states, at the end of the quarter the number of new houses under construction was recorded at: 17,845 in NSW, 21,401 in Vic, 8,605 in Qld, 4,726 in SA, 7,669 in WA, 1,227 in Tas, 276 in NT and 660 in ACT.  By comparison, the long-term average number of houses under construction across the states is recorded at: 13,566 in NSW, 15,186 in Vic, 7,250 in Qld, 3,681 in SA, 7,455 in WA, 1,548 in Tas, 544 in NT and 938 in ACT.  All states and territories except for Tas, NT and ACT currently have more new houses under construction than the long-term average.<br> <br>The number of new units under construction is where there is generally a substantial deviation from the long-term average.  Across the states, at the end of the June 2017 quarter the number of new units under construction was recorded at: 64,470 in NSW, 43,240 in Vic, 27,420 in Qld, 4,230 in SA, 6,360 in WA, 391 in Tas, 495 in NT and 4,904 in ACT.  Tas is the only state or territory with fewer new units currently under construction than its long-term average which is recorded at 431.  Across the remaining states, the long term average number of new units under construction is: 17,162 in NSW, 10,854 in Vic, 7,897 in Qld, 1,955 in SA, 3,382 in WA, 445 in NT and 1,235 in ACT.  The current number of new units under construction in NSW (+276%), Vic (+298%), Qld (+247%), SA (+116%) and ACT (+297%) is well in excess of double the long-term average.</p>
<p>The volume of new housing stock under construction remains at dizzying heights, albeit not quite as high as a few quarters ago.  The surge in stock under construction is being driven by units which by nature take longer to build and deliver more stock in a single project than houses. Interestingly, the number of units under construction has slowed in Vic and Qld but continues to climb in NSW.  This is probably to do with the fact that many property purchasers in NSW can simply no longer afford houses (particularly in Sydney) so units become their only housing purchase option. </p>
<h3>Conclusion</h3>
<p>Although dwelling approvals have eased from their record high levels, over recent months they have been fairly steady.  They seem to have settled at a level which is well above long-term average levels.  While this means that commencements won’t be as strong going forward they are likely to remain high relative to historic levels.  There is a significant number of new dwellings (particularly units) under construction which means that completions are likely to remain elevated for some time. Once they do fall we would expect them to stabilise at a level well above the long-term average.  With the national population increasing rapidly, these people need to be housed so although housing construction is unlikely to remain as strong as it has been recently, we do expect that a substantial volume of housing construction is likely to continue to take place.</p>
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Pipeline of housing stock has peaked but pending supply remains well above long term average levels

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<p>Residential property prices fell -1.8 per cent in the June quarter 2020, according to the latest figures released today by the ABS.</p>
<p>Melbourne (-2.3 per cent) and Sydney (-2.2 per cent), were the nation's worst performers over the quarter, but all capitals apart from Canberra saw declines.</p>
<p>Over the 12 months however to the June quarter 2020, property prices across the country jumped 6.2 per cent.</p>
<p>Only Perth and Darwin didn't record a rise.</p>
<p>According to the ABS Melbourne led the way with 8.8 per cent gains, followed by Sydney's 8.1 per cent rise.</p>
<p>To enlarge, <a href="https://www.propertyobserver.com.au/images/2020/9/17/Price%20indexes.png" target="_blank">click here</a>.</p>
<p><img src="https://www.urban.com.au/images/2020/9/17/Price%20indexes.png" alt=""></p>
<p><span>The ABS advised that the total value of Australia’s 10.5 million residential dwellings fell by $98.2 billion to $7,138.2 billion in the June quarter 2020. </span></p>
<p><span>The mean price of residential dwellings in Australia in the June quarter 2020 was $678,500.<span class="Apple-converted-space"> </span></span></p>
<p>Sydney's decline over the June quarter was driven by houses, which saw declines of -2.6 per cent, back from its March quarter gains of 2.6 per cent.</p>
<p>The ABS say the falls in Sydney's housing market were most evident in the middle to upper market segments, which they calculate at $940,000 and above.</p>
<p>Houses prices are 9.2 per cent higher over the last 12 months.</p>
<p>Units fell back -1.4 per cent, after a 0.8 per cent gain in the March quarter. Over the 12 months unit values are up 6.1 per cent.</p>
<p>The larger declines were in the middle to upper market bracket, $670,000 and above.</p>
<p>It was a similar story in Melbourne with houses the hardest hit in the June quarter. Prices were down -2.8 per cent following a 2.3 per cent March quarter gain.</p>
<p>The ABS say price falls were most evident in the middle to upper segment of the market, which they calculate is $8100,000 and above.</p>
<p>Melbourne's house values are up 8.9 per cent over the last 12 months, just shy of Sydney.</p>
<p>Unit prices over the June quarter dropped one per cent, from a 1.5 per cent gain in the March quarter.</p>
<p>Price falls were most evident in the upper segment of the market, which the ABS say is $670,000 and above.</p>
<p> </p>
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