A long-awaited transformation of a former industrial site in Holroyd has been given the green light, with the NSW Government approving the $1.2 billion Crescent Parklands masterplan that will deliver more than 1,200 new homes just south of Parramatta.

The State Significant Development approval clears the way for a large-scale mixed-use precinct at <a href="https://www.apartments.com.au/new-apartments/1-crescent-street-holroyd-nsw-2142">1 Crescent Street</a>, replacing an underutilised site with a coordinated residential community anchored by new open space, retail, and commercial uses.

Designed by <a href="https://www.apartments.com.au/architects/woods-bagot">Woods Bagot</a> for WA-based developer Tiberius, the approved scheme comprises seven buildings arranged across two precincts. In total, the development will deliver 1,227 apartments, including 201 allocated as affordable housing, alongside approximately 2,500 sqm of retail and 5,000 sqm of commercial space within a mixed-use podium.

<img alt="Tiberius’ Crescent Parklands to deliver 1,200+ homes in major Holroyd transformation" data-entity-type="file" data-entity-uuid="1cc82dd2-8184-4b86-8665-90653147820d" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Crescent%20buildings.png?VersionId=2ZmVDc_Rfc4AzQ6ShzZJlvdZnACLerVM" />

The project is structured as a masterplanned precinct rather than a standalone tower. Buildings 1 to 4 will rise from a shared podium with shop-top housing, while Buildings 5 to 7 are positioned closer to the northern park interface as residential flat buildings. The built form has been carefully modulated to balance density with amenity, with the design resolving building separation, solar access, and wind impacts at a precinct scale.

A significant focus of the design is the activation of Crescent Street and the integration of public domain. The submission notes that “individual townhouses [were] removed for community based functions to Crescent Street to increase activation and surveillance,” reinforcing a more urban and publicly engaged street edge. Retail, commercial tenancies, and resident amenity spaces are concentrated along this frontage and within the podium to support day-to-day activity.

The landscape strategy underpins the project’s identity, with a network of pedestrian connections, landscaped corridors, and open spaces linking the site internally and to its surroundings. The design prioritises permeability, delivering “increased uninterrupted flow between spaces for pedestrian access” and improved connections through to the adjoining parklands.

<img alt="Tiberius’ Crescent Parklands to deliver 1,200+ homes in major Holroyd transformation" data-entity-type="file" data-entity-uuid="19282454-ab2f-4e2c-866f-4b35cf4283d4" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Crescent%20masterplan.png?VersionId=JQdWGYI5B5R1lzmK4omYOp_8KLPkT4Bv" />

Buildings within the western precinct are oriented toward the park, shaping a residential offering defined by proximity to open space. The design describes this approach as creating apartments “immersed in nature with apartments facing the park,” positioning the landscape as a central organising element of the masterplan.

The broader architectural response addresses both infrastructure and context, with taller elements capturing long-range views toward Parramatta while setbacks and separation distances mitigate impacts on surrounding residential areas. Sustainability initiatives, including solar optimisation, cross-ventilation, and integrated landscape systems, are embedded across the scheme.

Located approximately one kilometre south of Parramatta CBD, the 3.6-hectare site is bounded by Crescent Street, Woodville Road, and Holroyd Sportsground. It benefits from strong access to public transport, including nearby bus routes and train stations, and sits within a rapidly evolving corridor earmarked for increased residential density. The design also strengthens connections between surrounding green spaces, including Holroyd Sportsground and Parramatta Parklands.

The approval follows several years of planning, including a rezoning process that enabled significant uplift in height and density across the site. With determination now secured, Crescent Parklands is positioned to play a major role in delivering new housing supply within Greater Parramatta’s growth area.

Joel Robinson

Tiberius’ Crescent Parklands to deliver over 1,200 homes in major Holroyd transformation

A new State Significant Development application has been lodged over land at <a href="https://www.apartments.com.au/new-apartments/33-43-marion-street-parramatta-nsw-2150">33–43 Marion Street</a>, Parramatta, proposing a high-rise mixed-use tower that leverages planning incentives to deliver a substantial pipeline of new housing, including a dedicated affordable component.

The scheme, currently on exhibition, combines a shop-top housing development with a concurrent rezoning, positioning the site for a significant uplift in density within Parramatta’s evolving southern CBD fringe.

The proposal, designed by <a href="https://www.apartments.com.au/architects/fuse-architecture-0">Fuse Architects</a> for CN Marion, would replace the existing buildings with a 37-storey mixed-use tower, delivering 296 apartments above a retail podium with six basement levels on the 2,376 sqm site.

The residential mix comprises 58 one-bedroom, 207 two-bedroom, and 31 three-bedroom apartments, with communal facilities located on the second level and the rooftop. Ground-level activation is driven by retail and food and beverage tenancies, alongside a publicly accessible through-site link designed to improve pedestrian permeability.

The project includes 194 car spaces, five motorcycle spaces, and 348 bicycle spaces, reflecting a transit-oriented approach in a location directly adjacent to the rail corridor and within walking distance of Harris Park Station.

<img alt="First Look: Plans lodged for 37-storey mixed-use tower with affordable housing at 33–43 Marion Street, Parramatta" data-entity-type="file" data-entity-uuid="3db873ea-62f0-437b-8a6a-eeda154d2dee" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Marion%20building.png?VersionId=YwzBv8OVHwyRnMLGX4slU7QyhTyMZeOX" />

The design adopts a podium-and-tower composition, with a three-storey street wall addressing Marion Street and a reduced two-storey interface responding to adjoining heritage cottages.

A key component of the proposal is the integration of affordable housing under the NSW Government’s in-fill affordable housing pathway, with units to be retained for a minimum of 15 years. This is paired with a broader public domain strategy that emphasises permeability, deep soil planting, and a landscaped through-site link.

“The strategy prioritises a permeable, well-activated public realm and supports a compact tower form to minimise the building’s footprint while enhancing the quality of the ground-level experience,” the design report states.

The proposal includes a central landscaped courtyard, rooftop communal areas, and planting strategies aligned with local environmental conditions and cultural narratives.

<img alt="First Look: Plans lodged for 37-storey mixed-use tower with affordable housing at 33–43 Marion Street, Parramatta" data-entity-type="file" data-entity-uuid="f0e6c165-9967-4d20-9216-e5b8357c85ba" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Marion%20site.png?VersionId=SRod222LwgDmGZJmJY0wTbK39UrWZLSD" />

The site occupies a prominent corner of Marion and Station streets, roughly 100 metres from Harris Park Station, within a precinct earmarked for significant intensification. While the immediate context is characterised by low- to mid-rise buildings and heritage dwellings, planning controls and recent proposals point to a transition toward high-density development.

<section data-scroll-anchor="false" data-testid="conversation-turn-2" data-turn="assistant" data-turn-id="request-WEB:c78224e4-1dd1-48ac-afda-97fe23bac47e-0" dir="auto">
Parramatta has been starved of new apartment supply in recent years. Builder-developers Deicorp and Coronation are the only two currently progressing projects in the suburb. Coronation is nearing completion of <a href="https://www.apartments.com.au/new-apartments/8-phillip-street-2-10-phillip-street-parramatta">8 Phillip Street</a>, which will be the tallest building in Western Sydney once finished, while Deicorp is delivering <a href="https://www.apartments.com.au/new-apartments/cosmopolitan-by-deicorp-parramatta-34-hassall-street-parramatta-nsw-2150">Cosmopolitan</a>, a development comprising over 600 apartments.
</section>

First Look: Plans lodged for 37-storey mixed-use tower in Parramatta

A substantial uplift in height and density is being tested in Lane Cove, with a 225-apartment scheme at 300 Burns Bay Road now on public exhibition as a State Significant Development alongside a concurrent rezoning.

The proposal by <a href="https://www.apartments.com.au/developers/level-33">Level 33</a> would see the demolition of an existing commercial building and associated structures, replaced by a residential development ranging from seven to 15 storeys.&nbsp;

The scheme delivers 225 apartments, including 34 designated as affordable housing, positioning it within the NSW Government’s accelerated Housing Delivery Authority pathway.

The development is arranged as three interconnected residential flat buildings, a response to the site’s long, narrow configuration and sloping topography.&nbsp;

<img alt="First look: 225-apartment Lane Cove tower proposal enters exhibition under State Significant pathway" data-entity-type="file" data-entity-uuid="c325d40c-ead5-45f4-9d77-5a446b23acc0" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Lane%20Cove%20pers.png?VersionId=hsCJxT5hj.5kzA6AMInyan1x8mcHeRez" />

<a href="https://www.apartments.com.au/architects/pbd-architects">PBD Architects</a>, the project’s designer, describe a built form that is “divided into three sections, each connected by intermediate infill slots which are recessed to establish greater setbacks and further articulate the development.”

Across the scheme, apartments are supported by communal amenity at ground and rooftop levels, including landscaped open space and a rooftop pool. Basement and lower ground levels accommodate parking, storage, and building services, while a new public park is proposed along the eastern edge of the site, replacing part of the existing built form.

The architectural response has been shaped by the site’s pronounced fall towards the Lane Cove River, with building heights stepping down from west to east to reduce visual bulk and respond to adjoining bushland.&nbsp;

The design report notes that “the development has been carefully designed to integrate with the existing topography with the placement of massing and floor levels adjusted respecting the site’s inherent characteristics.”

<img alt="First look: 225-apartment Lane Cove tower proposal enters exhibition under State Significant pathway" data-entity-type="file" data-entity-uuid="31cc13a5-bc8b-4dc3-b9b1-07c6ec33a82b" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Lane%20cove%20site.png?VersionId=NiyH3LimQwiHsE6Q7I5g4Grpr5fRdZaX" />

The project is being advanced through a concurrent rezoning process, seeking to increase the permissible height and floor space ratio beyond current Lane Cove LEP controls of 21 metres. Under the proposal, height would reach up to 54.5 metres, reflecting a shift toward higher-density outcomes in well-located urban areas.

Located on a 7,595 sqm site, the development sits within an established high-density residential pocket characterised by mid-rise apartment buildings set within a bushland setting. The site is within close proximity to Burns Bay Reserve, the Lane Cove River, and an extensive network of open space, reinforcing its strategic positioning for increased housing supply.

Level 33 is doing through the Housing Delivery Authority to try and get its Homebush project of <a href="https://www.apartments.com.au/news/nsw/level-33-adds-to-2-000-unit-pipeline-with-new-two-tower-homebush-plans">more than 300 apartments approved</a>.

The developer has over 2,000 apartments in the pipeline, predominantly in Wollongong.

First look: Level 33 proposes 225-apartment Lane Cove tower

Following the completion of its debut Palm Beach apartment development EVA on Tenth, local Gold Coast developer Chippendale Group has launched its latest project in the in demand area.

Chippendale Group, led by fifth-generation Palm Beach local Daniel Chippendale, has kicked off sales at&nbsp;<a data-saferedirecturl="https://www.google.com/url?q=https://www.apartments.com.au/new-apartments/elise-palm-beach-3-twenty-fifth-avenue-palm-beach-qld-4221&amp;source=gmail&amp;ust=1775884443343000&amp;usg=AOvVaw2GyxnGQKU2XXwTzQ8_VHgi" href="https://www.apartments.com.au/new-apartments/elise-palm-beach-3-twenty-fifth-avenue-palm-beach-qld-4221" target="_blank">ELISE</a>, 68 coastal-infused apartments just 40 metres from the sand on Twenty Fifth Avenue.

[smartcode_project:default project_id=150992 project_image_fid=366023]

Construction is already well underway, a signal of confidence to buyers, following the demolition of the two-storey walk-up and 1990s built house that sat on two sites that have been amalgamated to create a prime corner block.

There are a mix of two- and three-bedroom apartments on offer, starting from $1.4 million.

[smartcode_project:default project_id=150992 project_image_fid=366024]

Designed by <a href="https://www.apartments.com.au/architects/bda-architecture">BDA Architecture</a>, Elise responds to its coastal setting through a horizontal architectural form with recessed glazing and layered landscaping. The design aims to balance light, shade and sea breezes while creating a defined presence along the streetscape.&nbsp;

Residences have been planned with an emphasis on outdoor living suited to the Gold Coast climate, including large balconies designed as usable outdoor rooms. Interiors will feature a selection of European appliances and natural materials, including New Zealand wool carpets.&nbsp;

[smartcode_project:default project_id=150992 project_image_fid=366033]

Resident amenities are centred around a wellness-focused ground-level precinct. There will be private access to a heated swimming pool, sauna, cold plunge and gym, alongside a residents’ lounge with dining and entertaining space.&nbsp;

<a href="https://www.apartments.com.au/new-apartments/elise-palm-beach-3-twenty-fifth-avenue-palm-beach-qld-4221">ELISE</a> is located towards the northern end of Palm Beach, which puts it just a short walk to Tallebudgera and Currumbin Creeks. At the end of the street is the newly extended Oceanway, a 36-kilometre pathway that runs up and down the Gold Coast.

Chippendale is targeting a late 2027 completion date for <a href="https://www.apartments.com.au/new-apartments/elise-palm-beach-3-twenty-fifth-avenue-palm-beach-qld-4221">ELISE</a>.

[smartcode_project_cta:default project_id=150992]

Chippendale Group launches Elise, 40 metres from the Palm Beach sand

Sydney developer <a href="https://www.apartments.com.au/new-apartments/31-41-o-hara-street-marrickville-nsw-2204">Third.i</a>&nbsp;has announced a new transport-oriented development in one of Sydney Inner West’s most sought-after metropolitan locations, delivering much needed housing within steps of world-class public transport and vibrant village life.

Located at&nbsp;31-41 O’Hara St,&nbsp;Marrickville, the proposed mixed-use development will include around 300 apartments, with up to 17 per cent dedicated to affordable housing, reinforcing Third.i’s commitment to creating inclusive, well-connected communities that support a diverse mix of residents who keep Sydney’s neighbourhoods thriving.

Located just 100 metres from the new Metro station, the development places residents within minutes of the CBD while offering seamless access to the Inner West’s cafés, retail, and local services. Anchored within a thriving local centre, the project supports everyday living without reliance on cars, while also delivering new public open space for the local community, including a new park and landscaped green areas, alongside high-quality private resident amenities.

Florian Caillon, Head of Acquisitions for Third.i Group, said the project builds on the company’s ongoing work alongside the NSW Government to deliver housing and amenity alongside major transport infrastructure. Amenity includes an activated pedestrianise retail strip that connects Illawarra Road down to the pocket park, and health and wellness facilities.&nbsp;

“Delivering housing of this scale within an established village is a rare opportunity, and few companies have achieved residential outcomes of this size at a village centre," Caillon said.

"We are excited to set a new standard for urban living in the heart of Marrickville,” he said.&nbsp;

The inclusion of affordable housing has been welcomed by frontline workers.

“We are supportive of developments which will allow essential workers like nurses, midwives and carers, the opportunity to live in the communities they care for," said&nbsp;Michael Whaites, General Secretary of the NSW Nurses and Midwives’ Association..

“Many healthcare workers tell us they would like to live closer to where they work, but are being priced out of the market, forcing them to move further away.&nbsp;

“Dedicated apartments for essential workers will support recruitment and retention in local hospitals and aged care facilities, helping to strengthen our health system.”

The project has been declared State Significant Development (SSD) by the Housing Delivery Authority (HDA).

Third.i to deliver 300 apartments in Marrickville TOD precinct

Australian Industry

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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

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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

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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.
Article continues on the next page. Please click below.
<hr class="system-pagebreak">
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

<html><body>
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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