Developer Tian An LFD has been given the green light from the NSW Government's Housing Delivery Authority to go ahead with its new Chatswood apartment development, <a href="https://www.apartments.com.au/new-apartments/hammond-greens-chatswood-5-9-gordon-avenue-chatswood-nsw-2067">Hammond Greens</a>.

The 35-storey mixed-use tower at 5-9 Gordon Avenue, on the edge of the Chatswood Bowls Club, will comprise 91 apartments, 22 of which will be affordable homes managed by Link Wentworth. They will sit above a two-level podium with retail and commercial space.

The plans were upsized from the early 25-storey scheme which proposed 64 apartments, following the Government's new planning provisions under the Housing SEPP that gave developers the opportunity to increase heights and floor place in exchange for an affordable housing component.

&nbsp;

The design by <a href="https://www.apartments.com.au/architects/fjc-studio">FJC Studio</a>&nbsp;builds on the concept first presented when the firm won the site’s design competition, describing Hammond Greens as “a unique form of vertical living that belongs on the North Shore - drawing on the vernacular and materiality of suburban living, and integrating native landscaping between the narrow tower forms”.

At ground level, 1,500 sqm of retail and commercial space will activate the podium, supporting a hybrid work environment and creating a stronger connection with the local community. Residents will also have access to an outdoor pool deck, yoga room, golf simulator, and landscaped gardens designed by <a href="https://www.apartments.com.au/landscape-architect/sturt-noble-landscapes">Sturt Noble Associates</a>.

&nbsp;

Located less than 500 metres from Chatswood Transport Interchange, the project contributes to the suburb’s growing pipeline of high-density development. It joins the likes of Changfa's recently launched The Anderson and Billbergia's Chatswood Grand Residences.

Hammond Greens is the first of two towers Tian is planning in Chatswood. They have a sister project, dubbed Hammond Place, just one street away at 15-19 Nelson Street. That will have around 110 apartments.

[smartcode_project_cta:default project_id=142900]

Joel Robinson

Tian An LFD greenlit for Hammond Greens apartments in Chatswood as project launches

The sought-after Latent Defects Insurance policy, offering off the plan apartment buyers peace of mind for 10 years post-completion, has made its way to Sydney’s harbourside. Boutique developer <a href="https://www.apartments.com.au/developers/toohey-miller">Toohey Miller</a> has secured this insurance for its newly launched Elizabeth Bay development, <a href="https://www.apartments.com.au/new-apartments/barncleuth-square-elizabeth-bay-4-4a-barncleuth-square-elizabeth-bay-nsw-2011">Barncleuth</a>. This marks the developer’s second project in the area, following the success of No. 1 Onslow Place.

Latent Defects Insurance, offered by <a href="https://www.apartments.com.au/news/resilience-latent-defects-insurance">Resilience Insurance</a>, provides cover for structural or waterproofing defects in new apartment buildings. It is a policy that only the developer or builder can take out, not the apartment purchaser.

Located just&nbsp;off Macleay Street, one of Sydney’s most desirable high streets, Barncleuth offers a rare collection of only 10 residences. With just two per floor, each oversized floorplan has been designed by SJB specifically for the owner-occupier.

[smartcode_project:default project_id=140184 project_image_fid=356342]

The five-storey building captures views over Rushcutters Bay and Paddington, blending contemporary brickwork with the expressive silhouettes of its Art Deco neighbours.

Inside, the residences, designed by David Hicks, prioritise generous scale and enduring quality, with a mix of two- and three-bedroom layouts. Expansive terraces and cross-ventilated interiors maximise light and airflow, while sustainable features such as a green roof and locally sourced materials reflect SJB’s commitment to long-term liveability.

[smartcode_project:default project_id=140184 project_image_fid=356341]

Developer Toohey Miller, led by Nick Couloumbis, says the design aims to bring lasting quality to an area long celebrated for its apartment heritage.

"It's a stone's throw from the best restaurants in Sydney. Some people call it the Soho of Sydney," Couloumbis told Apartments.com.au when the project was approved.

[smartcode_project:default project_id=140184 project_image_fid=356337]

By securing <a href="https://www.apartments.com.au/news/resilience-latent-defects-insurance">Resilience Latent Defects Insurance</a>, Barncleuth joins a growing group of premium Sydney projects adopting the gold standard in building protection.&nbsp;

The cover, provided before construction begins, ensures any hidden structural or waterproofing defects are repaired immediately, without lengthy litigation or fault disputes.

Resilience Insurance CEO Corey Nugent said the product has been a catalyst for renewed confidence in the off the plan market.&nbsp;

“Ultimately what we’re trying to do is build better buildings consumers can trust. When buyers take possession, they have full insurance protection from day one, for 10 years,” Nugent explained.

Unlike traditional policies such as strata or construction insurance, Resilience LDI is a first-resort, strict liability policy, meaning repairs are covered immediately without needing to prove negligence. Coverage extends to foundations, load-bearing walls, and waterproofing, the elements most critical to long-term structural integrity.

Regarded construction firm Jasara has been appointed to deliver Barncleuth. They are forecasting an early 2027 completion.

[smartcode_project_cta:default project_id=140184]

Toohey Miller brings 10-year Latent Defects Insurance to Elizabeth Bay as Barncleuth apartments launch

<a href="https://www.apartments.com.au/developers/golden-sedayu">Golden Sedayu</a> has unveiled plans for the next phase of its landmark $4 billion <a href="https://www.apartments.com.au/new-townhouses/burswood-point-saintly-entrance-burswood-wa-6100">Burswood Point</a> project, just 3.5km from the Perth CBD at the Belmont Racecourse site.

The Local Development Plan Application has been lodged for a world-class mixed-use hub (Precinct B) on the previously untouched 2.5km stretch of Swan River foreshore.

Designed by Skidmore, Owings &amp; Merrill (SOM), recognised for their work on the world’s tallest skyscraper, Burj Khalifa in Dubai and the One World Trade Centre in New York, Precinct B will feature 15 buildings, offering a mix of residential and commercial spaces including a shopping centre up to 30,000 sqm in size.

Complementing this, an internationally acclaimed five-star hotel, and a high-end pedestrian-friendly retail boulevard with vibrant day-and-night retail, dining, and entertainment venues, will provide exciting new ways for Perth residents to connect with the riverfront.

This latest milestone signals continued construction and expansion momentum across Perth’s premier riverfront community, which is set to attract local, national and international visitors.

[smartcode_project:default project_id=142314 project_image_fid=263304]

The masterplan features 110,000 sqm of public open space, which is comparable to other Perth landmarks including inner-city Langley Park and South Perth foreshore. The riverside precinct will be brought to life through a visionary landscape concept by globally renowned architectural practice Grant Associates.

With an impressive international portfolio, including Gardens by the Bay and Funan Mall in Singapore and Barangaroo South in Sydney, the firm brings expertise in creating environments that harmonise with surrounding amenity.

At 38 hectares, Burswood Point is one of the largest urban development projects ever undertaken in Australia, and one of Perth’s most transformative mixed-use developments.

Golden Sedayu Managing Director Andrew Sugiaputra said the company was working closely with SOM, Grant Associates and the Government of Western Australia to ensure Burswood Point’s design responds sensitively to its surroundings, reflecting and enhancing the character, history, and natural features of the local environment.

[smartcode_project:default project_id=142314 project_image_fid=1817]

“West Australians enjoy a privileged outdoor lifestyle and the Swan River is central to their enjoyment,"&nbsp;Sugiaputra said.

"We’re proud to be creating something truly spectacular and unique for the city, a place that feels alive from sunrise to sunset, a place where people can stay, shop, dine, and celebrate life on the river."

Precinct B builds on the outstanding success of Burswood Point’s first residential stage, which has been met with exceptional market demand. Somerset Residences, a two- tower luxury apartment development, and the exclusive riverfront homes collection are under construction and selling fast. As the number of Perth houses listed for sale remain at or near record lows, Burswood Point will deliver 4,500 new homes over the next 10 years.

“Golden Sedayu is dedicated to delivering on our promises,"&nbsp;Sugiaputra added.

"Our clients can buy with confidence, knowing that the price is fixed throughout construction. In an industry that has faced challenging market conditions, we’re proud to provide our clients complete peace of mind and confidence in the value of their investment."

&nbsp;

[smartcode_project_cta:default project_id=142314]

Golden Sedayu reveals next 15 buildings in Perth's $4 billion Burswood Point precinct

Rising at the base of The Remarkables,&nbsp;diversified New Zealand developer&nbsp;<a href="https://www.apartments.com.au/developers/safari-group">Safari Group</a>'s Mountain Oak Apartments presents a foothold in Frankton, one of Queenstown’s most dynamic and fast-growing locales.&nbsp;

Surrounded by soaring alpine scenery and year-round tourism drawcards, Mountain Oak Apartments is a masterplanned precinct that perfectly balances accessibility with lifestyle amenity.

<img alt="Safari Group offers low-touch investment proposition in Queenstown’s popular ski fields district" data-entity-type="" data-entity-uuid="" src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,dpr_2.0,q_auto:good/https://res.cloudinary.com/dz9xllyip/image/fetch/f_auto,c_limit,w_1440,q_auto/https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/field/image/Ext_Cam15_Sunny.jpg?VersionId=SJAROUM_1s.Tr5ciMk4EEj5oAt_Vewmv" />

Frankton has emerged as a strategic growth zone just seven kilometres from Queenstown’s CBD, popular among both residents and investors for its proximity to the airport, the region’s two premier ski fields, Coronet Peak and Cardrona Alpine Resort, and an expanding network of shops, services, and recreation options. The apartments enjoy immediate access to the popular Market Street dining hub, as well as Five Mile Shopping Centre and the seasonal Remarkables Market, where locals gather for fresh produce and artisan goods.

The location also places residents near the gateway to South Island adventures. Scenic trails, golf courses, and Lake Wakatipu’s edge are within easy reach, while the historic village of Arrowtown, renowned for its preserved gold rush-era charm and walking routes, is a short drive away. Local transport connectivity is supported by the nearby airport and arterial roads, ideal for frequent travellers and short-term guests alike.

<img alt="Safari Group’s Mountain Oak Apartments brings new investment potential to Queenstown" data-entity-type="" data-entity-uuid="" src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,dpr_2.0,q_auto:good/https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/313_Living_WEB.jpg?VersionId=3LglY20Jp_MAzQYdvwODRWvtjL.cZcqI" />

Tourism-driven demand underpins strong investment fundamentals in Queenstown, with a noted shortage of short- and long-term accommodation stock. Mountain Oak’s 365-day visitor accommodation consent directly addresses this need, offering a rare opportunity to serve Queenstown’s dual population of holidaymakers and hospitality workers.

Construction of the 141 residences began in June 2025, with completion anticipated by mid-2027. Apartments range from one-bedroom to penthouses, with pricing from NZ$639,000. Dual-key options and low-maintenance finishes support a flexible rental model with strong gross return potential.

Staff Writer

From slopes to markets: Mountain Oak connects residents to the best of Queenstown

Deicorp is doubling down in the Hills Showground Station Precinct, the rapidly growing area surrounding the Castle Hill Metro and one of the state’s largest transit-oriented urban renewal sites.

Having launched Hills Showground Village several years ago, and now about 70 per cent through its build, Deicorp has brought another mini-masterplan to market just a few streets away.

The developer has now released the first of 873 residences in <a href="https://www.apartments.com.au/new-apartments/showground-pavilions-castle-hill-3-andalusian-way-castle-hill-nsw-2154">Showground Pavilions</a>, five new buildings located just 500 metres from the Metro, which connects Castle Hill residents to Martin Place in around 37 minutes.

[smartcode_project:default project_id=150067 project_image_fid=351416]

The mix includes one, two, and three-bedroom apartments, as well as a limited release of garden terrace homes with studies.

Designed by <a href="https://www.apartments.com.au/architects/turner-studio">Turner Studio</a> and <a href="https://www.apartments.com.au/architects/group-gsa">GroupGSA</a>, the residences are configured around a network of landscaped courtyards and podium-level gardens, with additional rooftop terraces offering views across the district.&nbsp;Communal amenities include a 3,500 sqm public park, playgrounds, shaded seating areas and walking and cycling paths.

[smartcode_project:default project_id=150067 project_image_fid=351416]

Interiors feature flexible layouts with oversized living areas, deep balconies, SMEG kitchen appliances and floor-to-ceiling glass to maximise light and airflow.&nbsp;

Many apartments include a study space, while select residences offer private outdoor areas. A total of 44 apartments have been designated as affordable housing for key workers, such as nurses, teachers and police officers.

[smartcode_project:default project_id=150067 project_image_fid=351413]

On top of its strong connectivity to the city, Deicorp has delivered significant new amenity to the area. The developer recently opened the 9,500sqm, four-level retail precinct at Hills Showground Village, which includes 26 specialty retailers and a 1,400sqm public plaza, creating a new community hub for shopping, dining, fitness, and everyday convenience. Castle Towers, one of Australia’s largest shopping centres, is also just one Metro stop away.

Between Hills Showground Village and Showground Pavilions, Deicorp is delivering more than 1,300 new homes to the rapidly growing Castle Hill precinct, representing a $2 billion investment in the suburb.

Showground Pavilions is one of several Metro-linked projects in Deicorp’s pipeline, joining developments at Tallawong Village, Zetland, Five Dock, Macquarie Park and Crows Nest.

[smartcode_project_cta:default project_id=150067]

Deicorp expands Castle Hill footprint with Showground Pavilions launch

Australian Industry

<html><body>
A group of large Australian industry groups have banded together to denounce the lack of action on issues surrounding combustible cladding. 
Australia’s fragmented approach to regulatory enforcement and compliance with building regulations requires a renewed commitment to national action to maintain public confidence in our built environment, the group said. 
The concerns of the groups are characterised by the following:
<ol>
<li>Australian and international insurers are introducing strict cladding-related exclusions in mandatory professional indemnity insurance products for building practitioners in the building supply chain.</li>
<li>The discovery of major defects in buildings has significantly reduced the ability of those building owners to find an insurer willing to accept the risk.</li>
<li>State and territory governments have not taken a consistent and comprehensive approach to undertaking and completing audits of existing high-rise buildings with combustible cladding, nor developed a remediation strategy.</li>
<li>Governments are taking an inconsistent and fragmented approach to implementing reforms described in the Shergold-Weir report, which was released 18 months ago. </li>
</ol>
They acknowledged that though some action has been taken to amend the National Construction Code (NCC) and effectively eliminate the use of many types of combustible cladding on new building facades, they believe the response of state and territory governments to dealing with cladding on existing buildings has been patchy and inconsistent.
In a statement released this week the groups stated:
"We urge the Commonwealth, State and Territory governments to work together in providing certainty through a uniform national approach to dealing with these matters.
"As organisations representing the building, construction, property and insurance industries, we urge the Federal Government to play a leadership role and bring together all state and territory governments to:
<ol>
<li>"Develop and implement a consistent and best practice Australia-wide response for risk assessment and a rectification strategy for existing buildings with combustible cladding with an agreed timetable that reflects the urgency of the issue. This will reduce confusion, clarify the scale of the challenge and support a viable professional indemnity insurance market that provides the coverage needed by industry participants and building owners.</li>
<li>"Establish a joint government-industry taskforce to oversee urgent and consistent implementation of all Shergold-Weir report recommendations across all jurisdictions."</li>
</ol>
Signatories to the statement were Property Council of Australia, Insurance Council of Australia, Ai Group, Australian Construction Industry Forum, and Master Builders Australia. 
</body></html>

j.ballantyne1990-6AQqhLzZaK

Industry groups call for building regulation reform on combustible cladding

<html><body>
GUEST OBSERVER
The Q3 NAB SME Survey suggests a loss of momentum in SME business conditions and confidence but this is against the exceptionally strong results in Q2.
Overall, conditions and confidence remain above their long-term averages which suggest relatively solid levels of underlying activity.
A further narrowing in the gap between conditions experienced by SMEs and larger businesses as indicated by the NAB Quarterly Business Survey suggests that the pace of growth is now more consistent across small and large businesses.
The NAB SME Survey is the leading business survey of small businesses in Australia, and complements the comprehensive Quarterly NAB Business Survey.
It offers a rich repertoire of insights into factors affecting smaller firms’ conditions by state, industry and size, as well as an assessment of their outlook for investment and output.
<a href="/images/2016/10/31/NAB%201.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2016/10/31/NAB%201.jpg" alt="">
However, the base of industries which reported positive conditions shrank in the quarter and this warrants close monitoring for signs of further weakening in the near future. The sustained weakness in retail conditions is of particular concern as it has the potential to affect other affiliated industries such as wholesale and transport.
Meanwhile, we continue to witness strong conditions in tertiary services such as health, business and financial services.
SME business confidence eased marginally in the quarter to +5, but continues to exceed its long-term average of +2.
The fall in SME confidence was in spite of the RBA’s 25bps cut to the cash rate in August, perhaps a reflection of the absence of a sustained depreciation in the AUD despite the rate cut.
<a href="/images/2016/10/31/NAB%202.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2016/10/31/NAB%202.jpg" alt="">
In Q3, business conditions were mixed by state. NSW, Victoria and WA reported relatively stable conditions, SA improved but was still lacklustre, while Queensland deteriorated sharply. The readings for Queensland in particular have been volatile recently so we will need additional information to determine the underlying trend for the state,” said Mr Oster.
NSW and Victoria continue to outperform in terms of conditions, while WA remains the weakest.
The ongoing mining downturn continues to weigh on WA conditions, while the recent improvements in commodity prices have done little to assuage the pessimism of SMEs from the state, with WA continuing to be the least confident state as well. Apart from WA, SA was the only other state to report negative confidence. Meanwhile, NSW, Victoria and Queensland tied in the top spot for confidence at +7 index points.
<a href="/images/2016/10/31/NAB%203.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2016/10/31/NAB%203.jpg" alt="">
 
SME forward orders rose by 1 point to +4 index points in Q3, which is notably above the long-term average of -1 index points and consistent with the result for general businesses as reported in the QBS.
The generally positive readings for forward orders since late 2013 are broadly in line with a moderate recovery in real economic activity.
By industry, the quarterly movements were mixed. Apart from manufacturing, retail and transport, all other industries reported positive forward orders.
<a href="/images/2016/10/31/Survey%204.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2016/10/31/Survey%204.jpg" alt="">
Forward orders for finance (up 16 points to +17) and health services (up 9 points to +16) jumped by the most in the quarter to record the strongest results, pointing to the continuing outperformance of services sectors.
Forward orders for manufacturing fell the most (down 8 points to -1). Meanwhile, transport and retail, both at -3, were the weakest in the quarter.
This is consistent with the lacklustre conditions and confidence experienced by the retail sector at the moment.
<a href="/images/2016/10/31/Survey%205.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2016/10/31/Survey%205.jpg" alt="">
The SME stock index improved marginally to +5 index points, to be above the long-term average of +2 index points and that of larger businesses indicated by the QBS (at +2).
The improvement was largely driven by business services and health, both rising by 6 points to +13 and 0 respectively.
The stock index for business services was also the highest in the quarter, followed closely by wholesale (down 6 points to +11). The relatively high stock levels reported by the wholesale sector is consistent with a higher capacity utilisation rate and resilient forward orders in the quarter.
<a href="/images/2016/10/31/Survey%206.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2016/10/31/Survey%206.jpg" alt="">
That said, the sharp deterioration in the conditions of larger wholesale businesses as indicated by the QBS could signal an imminent weakening of wholesale SMEs in coming quarters.
Meanwhile, stocks for manufacturing (down by 11 points to +3) and property services (down 9 points to -7) fell by the most in the quarter, with the latter the weakest across industries.
The two consecutive quarterly falls for property services are consistent with a lower transaction volume in the housing market recently.
<a href="/images/2016/10/31/Survey%207.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2016/10/31/Survey%207.jpg" alt="">
The non-seasonally adjusted cash flow index was the strongest in Q3 for financial services (at +24), followed by business services (at +22) and the weakest for transport (-9) and retail (-8).
Overall, SME price indicators point to relatively contained price pressures.
Growth in input costs (purchase costs, overheads and labour costs) have generally eased over the last two years and have contributed to improved margins readings.
<a href="/images/2016/10/31/Survey%208.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2016/10/31/Survey%208.jpg" alt="">
That said, final price growth appears to have lost some momentum in recent quarters – probably indicative of strong downstream competition – and is consistent with a subdued inflation outlook.
Business conditions for SMEs eased by 2 points to +5 index points in Q3, but remain slightly above the long-run average of +4.
Encouragingly, low-tier SMEs continued to report positive business conditions after recording the first positive reading in two years in Q2 to be around its long-term average.
SME conditions are now only marginally below those of general businesses indicated by the NAB Quarterly Business Survey (QBS), but this mostly reflects a notable fall in the conditions of the latter. SME business confidence also eased in the quarter to +5 (from +6 in Q2), but remains above the long-term average of +2.
<a href="/images/2016/10/31/Survey%201.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2016/10/31/Survey%201.jpg" alt="">
Two of the three components that make up SME business conditions fell, with trading conditions (down 5 points to +11) and profitability (down 2 points to +4) both retreating from their recent peaks but continuing to stay above their long-term averages.
Despite a sustained period where trading and profitability conditions exceed their historical average, the employment index was in negative territory for the eight consecutive quarter at -1, which was unchanged from the quarter before.
The lack of momentum in SME employment conditions are seemingly at odds with the relatively more robust reports by general businesses in the QBS, where the employment index has been tracking above long-term average levels since H2 of 2015.
<a href="/images/2016/10/31/Survey%202.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2016/10/31/Survey%202.jpg" alt="">
This possibly reflects the weaker financial capacity of SMEs to hire new employees or a greater difficulty for them to find suitable labour compared to their larger counterparts.
In Q3, business conditions were mixed by state. NSW, Victoria and WA reported relatively stable conditions, SA improved but was still lacklustre, while Queensland deteriorated sharply. The business conditions index for Queensland gave up all its the gains, dropping by 10 points from Q2 to be back at +1 again.
The eastern non-mining states of NSW and Victoria continue to outperform at +13 and +10 respectively, while WA remains the weakest of all states at -14. Despite the sharp fall in conditions, Qld was the only state which reported improved confidence in the quarter (up 2 points to +7) to tie with NSW and Victoria in having the strongest confidence.
Meanwhile, stronger commodity prices in the quarter had done very little to bolster confidence of SMEs in WA, which reported a decline in confidence (down 5 points to - 6) in the quarter to be the weakest of all states.
Most SME industry sectors reported weaker conditions in the quarter, with services sectors continuing to outperform more traditional sectors in general. Similar to Q2, health, finance and business services occupied the top three spots, while transport (at -7) replaced construction (at +2) as the weakest sector, followed by retail (at - 4).
The wholesale sector managed to hold onto its recent gains in conditions to be at +8 index points, a sign that perhaps some of the earlier upstream cost pressures had ameliorated. However, weak growth in wholesale final price suggests that competitive pressures downstream are elevated.
Business confidence by industry paints a more positive picture overall, with more sectors reporting an improvement rather than a decline in the quarter. Apart from property and retail, all other industries recorded positive confidence.
<a href="/images/2016/10/31/Survey%203.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2016/10/31/Survey%203.jpg" alt="">
Somewhat surprisingly, confidence of the property sector suffered the sharpest decline in the quarter to be the weakest across industries, even though dwelling prices continue to grow strongly in major markets of Sydney and Melbourne, and more recently, ACT.
Compared to the larger businesses in the QBS, SME business conditions outperform general businesses in finance, wholesale and property, but are significantly weaker in transport.
Analysis by firm size shows that low-tier SME firms continue to report weaker conditions and confidence compared to their larger counterparts, although the fact that their conditions and confidence indices are positive remains encouraging.
Alan Oster is group chief economist, National Australia Bank, and can be contacted <a href="https://business.nab.com.au/author/alan-oster/" target="_blank">here</a>.
</body></html>

jchancellor-FAypfDUnLy

Property confidence dips as SME business conditions remain upbeat overall: Alan Oster

<html><body>
GUEST OBSERVATION
As Australian companies enter the new year, IBISWorld reveals the five industries expected to soar and the five expected to sink.
We expect 2015 to be a boom year for a wide array of industries. Coal seam gas extraction will provide the benchmark for others to chase, with online grocery sales, fast fashion, private equity and hydroponic crop farming also expected to soar in the coming year.
While some industries are set for a bumper year, there are many that will be dreading the year ahead. Petroleum exploration is tipped to be the biggest loser in 2015 as oil prices plunge, while mining and construction machinery manufacturing, cigarette manufacturing, motion picture and video distribution, and electricity distribution are all expected to endure a difficult year.
Industries set to fly
<table border="1" cellspacing="0" cellpadding="0"><tbody>
<tr>
<td valign="top">
Industries
</td>
<td valign="top">
Revenue 2014 ($m)
</td>
<td valign="top">
Revenue 2015 ($m)
</td>
<td valign="top">
Growth (%)
</td>
</tr>
<tr>
<td valign="top">
Coal seam gas extraction
</td>
<td valign="top">
737.9
</td>
<td valign="top">
1830.0
</td>
<td valign="top">
148.0
</td>
</tr>
<tr>
<td valign="top">
Online grocery sales
</td>
<td valign="top">
1914.2
</td>
<td valign="top">
2194.0
</td>
<td valign="top">
14.6
</td>
</tr>
<tr>
<td valign="top">
Fast fashion
</td>
<td valign="top">
1219.4
</td>
<td valign="top">
1346.5
</td>
<td valign="top">
10.4
</td>
</tr>
<tr>
<td valign="top">
Private equity
</td>
<td valign="top">
365.0
</td>
<td valign="top">
401.8
</td>
<td valign="top">
10.1
</td>
</tr>
<tr>
<td valign="top">
Hydroponic crop farming
</td>
<td valign="top">
791.7
</td>
<td valign="top">
836.4
</td>
<td valign="top">
5.6
</td>
</tr>
</tbody></table>
Coal seam gas extraction
The coal seam gas extraction industry is undergoing a significant transformation. Industry revenue is forecast to rise by 148.0% over the next year, to reach $1.83 billion. While coal seam gas projects have become more viable due to new and improving extraction techniques, it is the development of export capabilities that is expected to drive rapid industry growth.
The opening of the domestic east coast gas market to the international market is expected to push gas prices higher – particularly as Australia is well-positioned to meet strong demand from Japan, China and South Korea, which are the world’s three largest natural gas importers.
Supply to these markets from considerable coal seam reserves in Queensland will be boosted in 2015 as the Curtis Island LNG plant becomes operational. Once operational, the Curtis Island LNG plant will be the world’s first project to turn coal seam gas into liquefied natural gas, which will be a boon to operators of newly developed coal seam gas fields in the Cooper Basin.
Online grocery sales
Online grocery shopping has been slow to catch on within the Australian market, even as local online shopping as a whole has exploded in popularity over the past five years. The uptake of online shopping is typically driven by the improved ease of use of online stores and fast, affordable delivery options. As consumers become more adept at using online stores and gain more experience buying items online, online shopping expands.
Such a phenomenon is anticipated to occur for online grocery stores in 2015, leading to revenue growth of 14.6% for the year. While grocery shopping is not a difficult undertaking as there are supermarkets scattered across all pockets of the country, time-conscious consumers are increasingly realising the benefits of online grocery shopping.
The increased prevalence of click-and-collect options and greater comfort with purchasing perishable items like fresh fruit online are expected to boost industry revenue over the coming year.
Fast fashion
Fast fashion stores are expanding rapidly across Australia. While the industry was previously dominated by Australian mainstay Cotton On, international operators including Zara, Topshop, H&amp;M, Uniqlo and Forever 21 have taken the country by storm. Zara is expected to continue its phenomenal growth, while 2015 will be the first full calendar year of Australian operations for H&amp;M, Uniqlo and Forever 21, leading to projected industry revenue growth of 10.4% over the year.
Zara posted exponential revenue growth with extremely high retail profit margins over its first three years of operation in Australia, and IBISWorld expects this growth to continue in 2015. The rousing success of the grand openings of H&amp;M and Uniqlo in Melbourne in April 2014 is expected to result in similar growth for these stores, which will generate significant growth for the overall fast fashion industry.
Private equity
2014 was a highly successful year for the private equity industry, which is expected to achieve similar prosperity in 2015. Private equity firms generate revenue from management fees paid by outside investors and the gains made on investing their own funds.
Merger and acquisition (M&amp;A) activity is expected to rise in 2015. As private equity firms will play a key role in upcoming M&amp;A deals, this should result in growth in management fees earned and potential investment returns, ultimately leading to forecast industry revenue growth of 10.1% for the year.
Growth in M&amp;A activity in Australia coincides with greater global interest in M&amp;A, as Europe and particularly the United States are emerging from a prolonged period of crisis and subdued growth.
Hydroponic crop farming
Hydroponic crop farming holds a relatively small place in the overall scheme of Australian agricultural production, but is undergoing strong and steady growth. Water conservation is the driving force behind hydroponics, as hydroponically grown produce typically uses only one-fifth the amount of water that soil-grown produce requires.
In addition to water conservation, hydroponics allow for higher production yields of high-quality produce. Vertically tiered plants enable greater productivity, while greater quality control, faster plant growth and longer growing seasons offset the added cost of hydroponic systems over conventional agricultural practices.
Rising capacity in the hydroponic crop farming industry should meet sustained demand from retailers and consumers in 2015, and lead to revenue growth of a forecast 5.6% for the year.
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Industries to fall
<table border="1" cellspacing="0" cellpadding="0"><tbody>
<tr>
<td valign="top">
Industries
</td>
<td valign="top">
Revenue 2014 ($m)
</td>
<td valign="top">
Revenue 2015 ($m)
</td>
<td valign="top">
Growth (%)
</td>
</tr>
<tr>
<td valign="top">
Petroleum exploration
</td>
<td valign="top">
4631.0
</td>
<td valign="top">
3755.3
</td>
<td valign="top">
-18.9
</td>
</tr>
<tr>
<td valign="top">
Cigarette &amp; tobacco manufacture
</td>
<td valign="top">
1895.3
</td>
<td valign="top">
1685.1
</td>
<td valign="top">
-11.1
</td>
</tr>
<tr>
<td valign="top">
Electricity distribution
</td>
<td valign="top">
18547.6
</td>
<td valign="top">
16694.7
</td>
<td valign="top">
-10.0
</td>
</tr>
<tr>
<td valign="top">
Mining &amp; construction machinery manufacture
</td>
<td valign="top">
5425.0
</td>
<td valign="top">
5092.1
</td>
<td valign="top">
-6.1
</td>
</tr>
<tr>
<td valign="top">
Film &amp; video distribution
</td>
<td valign="top">
1857.5
</td>
<td valign="top">
1788.4
</td>
<td valign="top">
-3.7
</td>
</tr>
</tbody></table>
Petroleum exploration
The world price of crude oil is plummeting due to an enormous supply glut spurred by overproduction from members of OPEC, the United States and Russia. The severe crash in oil prices means that the investment returns available from petroleum exploration activities are drastically reduced.
Exploration projects have therefore become far less viable for Australian firms, particularly as the stock prices of such firms have begun to dive. These conditions are projected to result in an 18.9% decline in industry revenue in 2015.
High oil prices have acted as an incentive for global companies to invest in petroleum exploration over the past five years. However, the subsequent oversupply is going to hamper exploration in 2015, as Australian firms are unable to compete with the low production costs and high production volumes from the world’s major oil producers.
The best-performing segment in the industry is expected to be natural gas exploration – but investment has already peaked for the segment, and additional gas extraction capacity will not be needed until export facilities become fully operational.
Cigarette and tobacco
In Australia, cigarette manufacturing has historically been dominated by British American Tobacco and Philip Morris, with Imperial Tobacco importing cigarettes rather than manufacturing them locally. The industry is headed for a severe decline in 2015, as Philip Morris offshored its cigarette manufacturing for the Australian market to its Korean facilities in 2014.
The loss of Philip Morris is forecast to result in an 11.1% revenue decline for the industry in 2015. Philip Morris held just over one-third of the industry’s market share. The loss of the company from the industry will be keenly felt as the number of companies manufacturing cigarettes and tobacco products in Australia falls from two down to one.
High regulatory barriers in Australia, requiring more stringent quality control, meant there were few export opportunities for the company’s local facility. Meanwhile, rapidly rising taxes on cigarettes and the advent of plain packaging have meant that smokers are increasingly buying cheaper cigarettes, such as those manufactured by British American Tobacco.
Electricity distribution
The cost of retail energy has surged over the past five years. Earlier projections of continued growth in electricity use per capita and rising peak demand led the industry to gold-plate electricity networks, and the Australian Energy Regulator (AER) allowed fees to rise to cover capital costs. A subsequent decline in the use of centrally generated electricity means there is a surplus of network capacity.
The AER has slashed revenue limits in New South Wales and Tasmania, as consumers have been paying for networks’ overinvestment. This is expected to result in an overall industry revenue decline of 10.0% in 2015.
The AER has cut revenue limits substantially for the three networks operating in New South Wales for 2015-16 – in some cases, by over 30.0% when compared with 2014-15. Similarly, Aurora Energy in Tasmania suffered a regulated revenue cut that will hit the industry in 2015.
The industry is further threatened by the increased use of small-scale electricity generation through solar photovoltaic panels, which could reduce demand for distribution networks as consumers go off the grid.
Mining and construction machinery manufacturing
Demand for mining machinery has been driven by investment in new mines, along with mine expansion projects. Mining companies are expected to revise down their expectations of revenue growth during 2015, as the prices of commodities like iron ore have plunged. Demand for mining machinery is expected to fall as a result, leading to a forecast revenue decline of 6.1% over 2015.
The development of new mines, and the expansion of existing mines, generally requires mining firms to purchase new machinery, leading to revenue growth for mining machinery manufacturers. As the mining boom moves from its investment phase to a production phase, and as falling iron ore prices deter further investment, demand for machinery is likely to suffer in 2015.
Film and video distribution
Australian motion picture and video distributors have been hit with a barrage of new media formats and consumer behaviours that have made the industry less profitable and resulted in declining revenue over the past five years. Video-on-demand services are expected to boom in 2015, cannibalising sales of DVDs and Blu-ray Discs, which generate greater revenue. The continuous decline of DVD and video hire outlets, along with the negative effects of piracy, are projected to lead to a 3.7% dip in revenue in 2015.
The introduction of US-based streaming service behemoth Netflix, along with local entrants Stan and Presto, is tipped to be a win for consumers but a loss for distributors. Consumers will be able to pay monthly subscription fees to view a wide range of content, in contrast to paying a set price for each single film or TV show – which added up to a much larger hit to the hip pocket.
David Whytcross is an industry analyst at <a href="https://www.ibisworld.com.au" target="_blank">IBISWorld</a>.
For more information on these, or any of Australia’s 500 industries, log onto <a href="https://www.smartcompany.com.au/www.ibisworld.com.au" target="_blank">www.ibisworld.com.au</a>, or follow IBISWorldAU on Twitter.
This article first appeared on <a href="https://www.smartcompany.com.au/" target="_blank">SmartCompany</a>.
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The Australian industries set to fly and fall in 2015

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The Australian Performance of Construction Index has seen the industry's contraction slow over March, with the index up 2.0 points to 46.2 over the month.
The '50 point level' is that which separates expansion from contraction in the industry and it is the third consecutive month since the industry returned to growth that the index has been below this balance level.
The Australian Industry group director - public policy, Peter Burn, said that there was a consolidation of recent gains in the houe building sector. He also noted a recovery of commercial construction.
Despite these positive shoots, a pull-back in the previously bullish apartment building sector and a decline in engineering construction kept the index sluggish.
"As is the case with the broader economy, the rebalancing of the construction sector as mining-related activity slows still has a considerable way to go," said Burn.
He pointed to hopes that momentum can be maintained in the residential construction sectors, with attention to turning to required investment in non-mining related engineering construction.
Meanwhile, Housing Industry Association chief economist Harley Dale noted that despite the positive signs at the close of 2013, it was disappointing to see a full first quarter of 2014 in negative territory.
"The detached house activity component remains expansionary, if only just, and 2014 should be a healthy year for new home building activity," said Dale.
"What the sector and broader economy needs, however, is a sustained recovery in new home building commensurate with average construction levels being considerably higher over coming decades than those achieved over the past 20 years," he said.
"The prospect of achieving this outcome would be significantly bolstered by a national taxation reform agenda which included the removal of the excessive and inefficient taxes levied on new home building."
House building did fall over the month, by 1.4 points, however it remained above the 50 mark - at 50.8, suggesting a stabilisation. Meanwhile, apartment building declined 1.0 points to 45.6 points.
Commercial construction declined by 3.4 points, to 56.5 points, with engineering construction up 5.8 points to 45.5 points.
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