<a href="https://www.apartments.com.au/architects/bates-smart">Bates Smart</a> is one of Melbourne's longest standing architecture firms.

Founded in Melbourne in 1853 by Joseph Reed, the firm began as Reed &amp; Barnes and has evolved through various partnerships before adopting the Bates Smart name in the 20th century. With a continuous presence spanning more than 170 years, the practice has played a pivotal role in shaping Melbourne’s architectural identity.

In the 19th century, Bates Smart designed several of Melbourne’s enduring landmarks, including the Royal Exhibition Building (1880), a UNESCO World Heritage site, and the Melbourne Town Hall. The firm’s influence continued into the 20th century with notable works such as Ici House (1958), considered Melbourne’s first modern skyscraper and a milestone in post-war Australian architecture.

One of their landmark designs was&nbsp;The First Church of Christ, Scientist, at 336-340 St Kilda Road. The building, which is listed on the Victorian Heritage Register, was designed by Bates, Peeble and Smart with construction completed in 1922. Architecturally, the building is significant as a rare example of early twentieth century classicism applied to a religious building. Historically, the building is significant as the first church of the Christian Science movement.

Melbourne developer Time &amp; Place decided to bring Bates Smart back to the area to design their next residential apartment project, Park Modern.

[smartcode_project:default project_id=138453 project_image_fid=2138]

<a href="https://www.urban.com.au/new-apartments/park-modern-south-melbourne-1-middleton-lane-south-melbourne-vic-3205">Park Modern</a>, on one of the largest island sites on the Melbourne CBD fringe, bordered by Dorcas Street, Wells Street, and Middleton Lane, will comprise two sculptural towers. It is being positioned as a design-forward response to evolving owner-occupier preferences in the Domain precinct.

Tim Price, Director at <a href="https://www.apartments.com.au/developers/time-place">Time &amp; Place</a>, says&nbsp;Bates Smart have got a footprint on this city, probably like no other architect.

"It’s a really nice kind of next chapter story, that they created from a design perspective so long ago," Price told Apartments.com.au.

Park Modern will be the third time Time &amp; Place has worked with Bates Smart, having successfully designed and delivered Collins House and Opera on St Kilda Road together.

The brief focused on creating a built form that would feel contextually appropriate while offering a contemporary evolution of inner-city apartment living.

[smartcode_project:default project_id=138453 project_image_fid=2137]

The focus for Park Modern is squarely on owner-occupiers.

“It’s not always about downsizing," Price says.

"Sometimes it’s just about creating a space which is easily maintained, lock up and leave, reflecting people’s aspirations, whether they’re entertainers, big dining room spaces, big open terraces, they’re important parts of any design consideration.”

The building includes a mix of one, two and three-bedroom apartments, as well as penthouses, with layouts and floor plans designed to suit a broad demographic. The architecture has been shaped to capture&nbsp;view corridors to the Botanic Gardens, Port Phillip Bay and the CBD skyline.

Each apartment has been oriented to maximise natural light and provide a clear outlook, elements often cited by owner-occupiers as key criteria.

[smartcode_project:default project_id=138453 project_image_fid=351806]

Rather than defaulting to a generic luxury offering, the amenity strategy at Park Modern reflects specific insights into how residents want to live. The ground floor will include co-working areas, wellness facilities, and a concierge-led lobby that blends indoor and outdoor design cues.

“Wellness has become a more thoughtful consideration, not just gyms or lap pools, but things like magnesium plunge pools, saunas, daybeds, and studio spaces for Pilates and the regular cardio workout,” says Price.

One notable inclusion is a substantial porte-cochère, a covered vehicle drop-off zone integrated into the site plan. It’s a feature rarely seen in inner-urban developments and speaks to the team’s emphasis on ease of arrival and departure for residents and guests.

A display suite for Park Modern is now open by appointment, giving prospective buyers an early look at the project.

[smartcode_project_cta:default project_id=138453]

Joel Robinson

100 years on, Bates Smart returns to South Melbourne's Domain Precinct to design Park Modern

One of the most significant beachfront projects ever proposed for the small suburb of Miami on the Gold Coast, has taken a major step forward.&nbsp;Monaco Property Group has secured approval for <a href="https://www.apartments.com.au/new-apartments/nalu-miami-122-marine-parade-qld-4220">NALU</a>, a $500 million development comprising just 45 ultra-luxury residences on the iconic former Nobby’s Outlook site.

Acquired by <a href="https://www.apartments.com.au/developers/monaco-property-group">Monaco Property Group</a> in 2024 for $70 million, the rare 7,238 sqm Marine Parade parcel boasts more than 80 metres of uninterrupted ocean frontage.

With approvals now secured, Monaco Property Group will move NALU into its delivery phase. The project has been designed by&nbsp;<a href="https://www.apartments.com.au/architects/bda-architecture">BDA Architecture</a>, who collaborated with&nbsp;<a href="https://www.apartments.com.au/landscape-architect/ldg-landscape-architecture">LDG Landscape Architecture</a> and <a href="https://www.apartments.com.au/interior-designers/tom-mark-henry">Tom Mark Henry Interiors</a>&nbsp;to create the low-rise building, its landscaping, and interiors.

<img alt="NALU" data-entity-type="file" data-entity-uuid="3fdf578e-7cc4-4b17-bbc2-ba853522a5d8" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/122_Marine_Parade_002.jpg?VersionId=zFhJWVzX0jmCO.5iIIxNELImHesTjWS4" />

Residences will range from 237 sqm layouts to beachfront homes exceeding 1,400 sqm.

At the heart of the project is a 2,200 sqm lifestyle precinct with a bathhouse, fitness centre and resort-style pool, elevated by a concierge service.

Jonathan Grasso, Co-Founder of Monaco Property Group, said the council approval marks an exciting milestone for NALU, which will launch in Q1 2026.

“The project will now progress toward construction, working alongside our world-class collaborators to bring NALU to life," Grasso said.

“Our vision is to create a legacy project for the Gold Coast, one that not only honours the history of the site but also elevates its future, setting a new standard for coastal living in Australia. NALU embodies the pinnacle of design and location and will stand as an enduring icon of prestige and liveability.”

<img alt="NALU" data-entity-type="file" data-entity-uuid="6ae8545b-87ca-4dea-90ed-ac273ec6515d" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Image7.jpg?VersionId=Wnmie4bu3x2WQonnG4Pwmh39NdZVKeOV" />

Originally developed in the 1970s as Nobby’s Outlook and later refurbished in 2019 as Nalu, the property has long held a place in the local community’s coastal identity. The new vision will build on this legacy, creating luxury residences that capture ocean views while fostering a lifestyle defined by wellness, connection, and ease.&nbsp;

Beyond its residential offering, NALU will deliver significant economic benefits to the Gold Coast through job creation and opportunities for local suppliers and contractors. Construction is anticipated to commence in early 2026, with completion expected in Q3 2028.

Monaco Property Group approved for $500 million NALU apartments on Miami beach

The most elevated residential tower in Palm Beach, <a href="https://www.apartments.com.au/new-apartments/corallo-palm-beach-5-palm-beach-avenue-palm-beach-qld-4221">Corallo</a>, has officially launched this week, however only a handful of buyers will have an opportunity to buy in to the 17-storey project.

The $200 million mixed-use project includes ground floor dining and retail and is considered so valuable its developer, <a href="https://www.apartments.com.au/developers/changfa-group">Changfa Group</a>, will be staging its release of one-, two- and three-bedroom apartments and penthouses to the market.

[smartcode_project:default project_id=112194 project_image_fid=806]

<a href="https://www.apartments.com.au/project-marketer/colliers">Colliers</a> International, Director, David Higgins, said the development’s location just metres from the beach on the corner of Palm Beach Avenue and the Gold Coast Highway influenced the sculptural design by the acclaimed Plus Architecture studio.

“<a href="https://www.apartments.com.au/developments/palm-beach-qld-4221">Palm Beach</a> locals understand the rare opportunity here at Corallo, particularly being the tallest building in the suburb and its proximity to the beach and local restaurants, and they’ve represented the bulk of pre-launch enquiries,” Higgins said.

“The orientation of the apartments captures views of the coastline from Surfers Paradise to Currumbin, and the diversity of floor plans and apartment types provide an exceptional level of choice.

“The first release includes just 59 one-, two and three-bedroom apartments and two half-floor penthouses, with flexible use designed to appeal to both owner-occupiers and investors."

&nbsp;

[smartcode_project:default project_id=112194 project_image_fid=799]

In addition to the ground floor amenity, residents will also have access to a private dedicated wellness level offering 734 sqm of resort-style amenities including a pool, cold plunge, wet deck, steam room, sauna, gym, day bed, fire pit, barbecue area, dining area and yoga/stretch deck.

The project is located within walking distance of Tallebudgera Creek, Burleigh Heads village, Currumbin Alley and Palm Beach Currumbin High School. The Gold Coast Airport is under 10 minutes away.

[smartcode_project:default project_id=112194 project_image_fid=814]

Higgins said Palm Beach remained a hotly contested suburb for home buyers, with prices doubling in the past five years.

“What makes Corallo so appealing to the local market is the diversity of apartment types and pricing, with one-bedroom apartments starting from $841,000 and two-bedroom apartments starting from $1.34 million,” he said.

“The ground floor retail and dining offering will further expand on Palm Beach’s village atmosphere and create a meeting place for locals, and those opportunities for connection are highly valued.”

&nbsp;

[smartcode_project:default project_id=112194 project_image_fid=807]

The on-site sales display, which includes a fully fitted kitchen, bathroom and bedroom, will be open until early works commence in Q1 2026. Each residence at Corallo will feature premium finishes including natural stone, artisanal brickwork, and warm copper accents.

Changfa Group has a two-decade history of delivering premium developments in Australia and internationally, having recently completed its collection of premium townhomes at Lyra, Hope Island, as well as apartment projects in Leichhardt, Carlingford, and Chatswood in New South Wales.

[smartcode_project_cta:default project_id=112194]

$200 million Corallo Palm Beach launches with limited apartment release

In a move that aligns with NSW's accelerated planning incentives for affordable housing, developer&nbsp;<a href="https://www.apartments.com.au/developers/the-one-collection">One Collection</a> has revised its Hills District apartment plans, and taken it to the NSW Government, to secure approval.

The developer, which is currently delivering Horizon Hurstville, is seeking to add 80 more apartments to its <a href="https://www.apartments.com.au/new-apartments/the-one-castle-hill-16-dawes-avenue-nsw-2154">Castle Hill development</a> near Castle Towers. They already have approval for 280 apartments across eight six-storey buildings.

<img alt="One Collection" data-entity-type="file" data-entity-uuid="b3c298ba-1cc5-4db7-9872-607c75f8ceca" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202025-10-13%20at%2010.19.22%E2%80%AFAM.png?VersionId=wN9KpFIu5ENSGZLLsaZgXQHrXcwEO3Vd" />

Now on the desks of the NSW Department of Planning is 360 apartments, 48 of which will be dedicated to affordable housing.&nbsp;Affordable housing is to be “fully integrated within the building and visually indistinguishable,” according to the planning submission.

The 15,697 sqm block, an amalgamation of 16 sites, spans across Dawes Avenue, Hughes Avenue, and Camdan Crescent, sits 550m from Hills Showground Metro Station.&nbsp;

"The existing context is quickly changing from free-standing homes into residential flat buildings in line with the Hills Showground Precinct planning framework," Place Studio noted.

<img alt="Castle Hill" data-entity-type="file" data-entity-uuid="3ec24948-c185-48fa-af8b-ed25adf302bf" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202025-10-13%20at%2010.19.04%E2%80%AFAM.png?VersionId=zNDX.IeRROX1RlDeYcS38xn8w_dqgU2t" />

They said the design was informed by the site's unique condition of having three street frontages and was developed to to respond sensitively to iots surrounding context.

"The design adopted a conventional perpendicular alignment to the primary street frontage. The massing of the development was carefully modulated to align with the evolving character of the neighbourhood. The design ensured that the scale was not excessive or out of context, but instead contributed to a cohesive urban form consistent with emerging developments in the area."

<img alt="Castle Hill" data-entity-type="file" data-entity-uuid="f83ffdaa-f960-469d-b6fe-abcece57c9ef" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202025-10-13%20at%2010.19.09%E2%80%AFAM.png?VersionId=4oKlCyfaKes7jLi1_EMoqa46w2h_YvDZ" />

The apartment mix will be 46 one-beds, 168 two-bed apartments, and 146 three-bedroom units, with 631 parking spaces proposed.

Along the street frontages, the building heights are four storeys with a 7.5 metre setback, and eight storeys with an 11.5 metre setback. It should cost about $150 million to build.

One Collection works hand-in-hand with the respected development and construction firm Masscon, which has built a reputation for leveraging its expertise in the built environment to take on developments others can't. That's what they're achieving at Horizon Hurstville, having taken over the project to deliver it.

First look: One Collection advances plans for Castle Hill apartments

At Yarra’s Edge, <a href="https://www.apartments.com.au/developers/mirvac">Mirvac</a>’s newest tower under construction, <a href="https://www.apartments.com.au/new-apartments/trielle-at-yarra-s-edge-docklands-16-point-park-crescent-docklands-vic-3008">Trielle</a>, sets a new benchmark for elevated living. Rising 45 storeys, 12.5 metres from the Yarra River, the landmark building offers residents access to a private wellness retreat and spa, a resident-only golf simulator, and an elegant lounge, dining and bar complete with a self-playing piano, all without ever having to leave home.

Now, that sense of elevation has reached new heights with the Aerus Sub-Penthouses, a limited release of half-floor riverfront residences on the Collins St axis where the sought-after street meets the Yarra River.

Each Aerus Sub-Penthouse, located across levels 42 and 43, represents the most expansive offering within Trielle, aside from the yet-to-be-revealed crowning penthouses. Spanning between 269 and 301 sqm, these residences are designed to capture natural light and uninterrupted views of the city skyline, Yarra River, and Port Phillip Bay.

[smartcode_project:default project_id=114216 project_image_fid=3784]

Among the collection are three-bedroom sub penthouses, complemented by a media room, and expansive four-bedroom layouts. All include panoramic living areas and oversized master suites with luxury ensuites reminiscent of a five-star hotel, complemented by dedicated dressing rooms finished in timber and natural stone.

The interiors have been crafted by <a href="https://www.apartments.com.au/architects/mirvac-design">Mirvac Design</a>, the developer’s award-winning in-house architecture and design team. Every material has been chosen for quality and longevity, from sculpted stone island benches with feature soft wash LED lighting to bespoke joinery and chevron timber oak flooring.

Kitchens are fitted with a BORA induction cooktop with integrated downdraft extractor, alongside Gaggenau appliances, including a fridge, freezer, and wine fridge. The adjoining butler’s pantry incorporates the exclusive Gaggenau Minimalistic Series including oven, steam oven, microwave, coffee machine and warming drawer, all concealed behind handleless glass panels for a clean, integrated presentation. Bathrooms feature custom Apaisar freestanding baths and basins and natural stone benchtops, continuing Mirvac’s design emphasis on tactile, timeless materials.&nbsp;

<img alt="Trielle at Yarra's Edge, Docklands" data-entity-type="file" data-entity-uuid="c00be724-b0f1-47c0-afed-54f829870704" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Aerus%20sub-penthouse.png?VersionId=Uktd61kpLSqNjwJeDFs7IaZ3xgLlDQmu" />

Michael Wiener, Design Director at Mirvac, says The Aerus Sub-Penthouse embodies the apex of Mirvac’s design ethos.

“Moving through your home is like walking on air - a private sanctuary where the craftsmanship is refined, the proportions generous, and the flow so effortless, you feel completely at ease in the sky,” Wiener says.

“In Aerus, we wanted to create a sense of weightlessness - a home that feels suspended in the skyline, full of light, grounded in luxury.”

[smartcode_project:default project_id=114216 project_image_fid=3777]

The Aerus Sub-Penthouses are expected to attract a mix of local and international buyers seeking a long-term residence of scale and quality in a riverfront setting, from returning expats to established families and business owners who value privacy, craftsmanship, and convenience within walking distance of the CBD.

With an unmatched suite of amenities, Trielle is the most extensively appointed development Mirvac has created to date at Yarra’s Edge. Within the tower will be The Oasis, a 900 sqm podium rooftop wellness retreat designed in collaboration with spa expert Naomi Gregory. Located seven storeys above the Yarra River promenade, it features a 25-metre lap pool, spa and sauna, hot magnesium spa, biophilic gym, yoga and Pilates studio, cold-pail contrast treatment, and day spa treatment rooms. Further amenities include a piano lounge, bookable dining room, cinema room, golf simulator studio, games room, teppanyaki bar, dog wash bay, and two flexible work hubs, The Biblioteca library and Mills Place office space, catering to residents’ evolving lifestyle needs.

Construction of the $350 million tower is underway through Mirvac’s in-house construction arm, with completion anticipated for mid-2027.

[smartcode_project_cta:default project_id=114216]

Sky-high sanctuaries: Mirvac unveils The Aerus sub-penthouses at Trielle

Building Activity

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New Home Sales were 39.4 per cent higher in the March 2021 quarter than the same time the previous year.

The HIA New Home Sales report – a monthly survey of the largest volume home builders in the five largest states – is a leading indicator of future detached home construction.

“HomeBuilder, combined with low interest rates, changing population dynamics and improving market confidence, led to strong sales through to the end of 2020,” stated HIA’s Economist, Angela Lillicrap.

“In December 2020, there was a near record volume of new home sales as households rushed to finalise contracts to build a new home before the end of the $25,000 grant."

“This same effect can be seen in March as households rushed to get access to the $15,000 grant."

[smartcode_project:default project_id=4807]

Over the year to March 2021, sales increased by 42.6 per cent compared to the previous year. This indicates a strong level of building activity will occur in 2021 and into 2022, providing employment to the construction sector and supporting the broader economy.

HomeBuilder has brought forward demand for new homes. As a consequence, sales over the coming months are expected to cool from recent highs.

“Demographic shifts in population towards regional areas will continue to drive demand for new detached homes. Strong house price growth recently has also sparked FOMO in buyers which will also support the industry,” concluded Ms Lillicrap.

Sales in the March 2021 quarter increased across all the five largest jurisdictions compared to the same time the previous year. South Australia was up by 90.6 per cent, followed by Queensland (+54.9 per cent) and Victoria (+41.9 per cent). New South Wales increased by 24.7 per cent and Western Australia is up by 15.2 per cent over the same period.
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New Home Sales were 39.4 per cent higher in the March 2021 quarter than the same time the previous year.

jordan_55689

New home sales spike during March

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<div>Building activity is one of the more complicated data series released by the ABS, so I'll just post the headline figures here. </div>
<div> </div>
<div>Overall the level of residential building activity remained high, increasing quite strongly in 2016 in fact, but nationally it looks as though the peak is now more or less in. </div>
<div> </div>
<div>At the end of the year there was still a historically high number of dwelling units approved and not commenced, but Sydney was beginning to chew its way through the backlog. </div>
<a href="https://www.propertyobserver.com.au/images/2017/04/13/A3.jpg" target="_blank">Click to enlarge</a>
<div class="separator"><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/04/13/A3.jpg" alt=""></div>
<div> </div>
<div>Nationally dwelling commencements remained strong in the fourth quarter of 2016 at more than 57,000 in seasonally adjusted terms.</div>
<div> </div>
<div>But in reality the red hot run is now only being held aloft by Sydney, with commencements declining in Melbourne, Brisbane, and Perth. </div>
<div> </div>
<div>New South Wales saw a total of 19,950 dwellings commenced in the fourth quarter, with Victoria sliding to 16,460, and Queensland dropping sharply to 10,150.</div>
<div> </div>
<div>Commencements have been falling in Western Australia for nine consecutive quarters.</div>
<div> </div>
<div>Plotting the figures in trend terms shows how the residential boom is really just a Sydney story now. </div>
<div class="separator"> </div>
<div class="separator"><a href="https://www.propertyobserver.com.au/images/2017/04/13/A4.jpg" target="_blank">Click to enlarge</a></div>
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 Supply coming online
<div>At the end of 2016 there were still some 219,384 dwellings under construction, including 152,635 attached dwellings.</div>
<div> </div>
<div>The total is slightly lower than the record peak seen in September 2016, indicating that new apartments were already starting to hit the eastern capital city markets towards the end of last year. </div>
<a href="https://www.propertyobserver.com.au/images/2017/04/13/A1.jpg" target="_blank">Click to enlarge</a>
<div class="separator"><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/04/13/A1.jpg" alt=""></div>
<div class="separator"> </div>
<div>There were a record 82,857 dwellings under construction in NSW at the end of the year, some 62,040 of them being attached dwellings, and so many of them of the 'egg box' variety.</div>
<div> </div>
<div><a href="https://www.propertyobserver.com.au/images/2017/04/13/A2.jpg" target="_blank">Click to enlarge</a></div>
<div> </div>
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<div class="separator"> </div>
<div>The actual number of dwellings actually completed in 2016 were high, but themselves hardly alarming, including in NSW (58,730), Victoria (59,977), and Queensland (44,983). </div>
<div> </div>
<div>The wrap</div>
<div> </div>
<div>While these are big numbers in historical terms, today's largely unnoticed arrivals and departures figures presented some food for thought, with permanent and long term arrivals exploding to 103,570 in February, by some margin the biggest single month on record.</div>
<div> </div>
<div>There was also an unprecedented number of education arrivals in 2016, which may be a coincidence or driven by the lower dollar. </div>
<div> </div>
<div>On the other hand, maybe the government has quietly turned on the immigration taps.</div>
<div> </div>
<div>Remember that most immigrants to Australia head to the two most populous states, which are also home to the two best performing economies and the highest number of job vacancies.   </div>
<div> </div>
<div>Let's hope the new arrivals like egg boxes. </div>
<div> </div>
<div>
PETE WARGENT is the co-founder of <a href="https://allenwargent.com/" target="_blank">AllenWargent</a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank">blogger</a>.
His latest book is <a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx" target="_blank">Four Green Houses and a Red Hotel</a>.
</div>
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pwargent-M4siyDbqQY

Let's hope the new arrivals like egg boxes: Pete Wargent

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EXPERT OBSERVATION
Access to finance continues to constrain lending for the purchase of a new home.
The ABS has released Lending to Households and Businesses for February 2019. This publication presents statistics on housing finance commitments including for the purchase or construction of new dwellings.
Overall housing finance commitments for construction and purchase of new homes are now 14.1 per cent lower than they were in February 2018.
Despite the trend of the last year lending to households rose by 2.6 per cent in the month of February.
This increase is consistent with the small rise we saw in new home sales in February.
After five years of a sustained building boom, market confidence fell away in the later part of 2018 as dwelling prices corrected, adversely impacting all segments of the market.
Investors and owner occupiers are delaying purchase decisions and foreign investment has also fallen dramatically for numerous reasons.
Our expectation is that the credit squeeze will ease over the course of 2019 and we are hopeful that this is an early sign that the fall in lending will be modest by historical standards.
Click <a href="https://www.propertyobserver.com.au/images/2019/4/11/HIA%20Graph.JPG" target="_blank">here</a> to enlarge.
<img src="https://www.urban.com.au/images/2019/4/11/HIA%20Graph.JPG" alt="">
The pipeline of building work which had expanded over recent years has shrunk over the past 6 months as the volume of work entering the pipeline fell away.
The home building industry has driven economic growth in Australia since the end of the resources boom. As the housing boom cools the industry will be reliant on a strong national economy to ensure that this is a relatively shallow downturn.
Lending to owner-occupiers building and purchasing new homes in the three months to February 2019 compared with the previous quarter were down in all states.
NSW down by 21.0 per cent, Victoria down by 17.6 per cent, Queensland down by 20.5 per cent, South Australia down by 10.8 per cent, Western Australia down by 17.8 per cent and Tasmania down by 17.0 per cent.
TIM REARDON is the Chief Economist of HIA
 
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j.ballantyne1990-6AQqhLzZaK

Pipeline of building work continues to shrink: HIA's Tim Reardon

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EXPERT OBSERVER 
The number of dwelling starts (commencements) fell by 16.3 per cent in the December quarter to 46,706 dwellings after falling by 3.8 per cent in the September quarter. 
House starts fell by 7.6 per cent in the December quarter and apartment starts fell by 26.8 per cent. 
Work started on 221,606 new dwellings over the 12 months to December, up 2.4 per cent on the year, but fell from the record high of 234,179 dwellings in the year to December 2016. 
<img src="https://www.urban.com.au/images/2019/4/11/CMSC%201.JPG" alt="">
Across Australia, starts in the December quarter fell in seven states/territories: NSW (down by 15.6 per cent); Victoria (down by 10.5 per cent); Queensland (down by 29.7 per cent); South Australia (down by 4.5 per cent); Western Australia (up by 14.9 per cent); Tasmania (up by 3.9 per cent); Northern Territory (down by 24.6 per cent); and the ACT (down by 53.1 per cent).
In the year to December, dwelling starts were higher than the decade average in all of the states &amp; territories except for the Northern Territory (down 53.9 per cent), and Western Australia (down 30.8 per cent). Starts in NSW were 43.2 per cent above the decade average. Next highest was the ACT where starts were up by 42.7 above the decade average with Victoria up 22.5 per cent; Queensland up 12.4 per cent; Tasmania up 12.0 per cent; and South Australia up 8.5 per cent. \
In the December quarter $72.9 billion of residential and commercial building work was yet to be done (completed), up 5.6 per cent on a year ago. 
The value of residential and commercial building work in the pipeline stood at $94.9 billion at the end of December, down by 0.7 per cent on a year ago but down from a record $99 billion at the end of June.
Across Australia, 216,948 homes are being built, down from a record 230,573 homes in March.
<img src="https://www.urban.com.au/images/2019/4/11/CMSC%203.JPG" alt="">
Consumer confidence 
The Westpac/Melbourne Institute survey of consumer sentiment index rose by 1.9 per cent to 100.7 in April. But the sentiment index is below its long-term average of 101.3 and down 1.7 per cent over the year to April. A reading above 100 denotes optimism. The survey of 1,200 people was conducted from April 1-5. 
The current conditions index fell by 3.2 per cent, but the expectations index rose by 5.4 per cent. 
Three of the five components of the index rose in April: 
The estimate of family finances compared with a year ago fell by 5.0 per cent to 80.2;
The estimate of family finances over the next year rose by 4.1 per cent to 105.6;
Economic conditions over the next 12 months rose by 6.2 per cent to 101.8; 
Economic conditions over the next 5 years rose by 5.9 per cent to 100.2;
The measure on whether it was a good time to buy a major household item fell by 2.0 per cent to 115.5. 
<img src="https://www.urban.com.au/images/2019/4/11/CMSC%202.JPG" alt="">
Housing outlook: A good time to buy a dwelling? The index rose by 2.4 per cent to 119.4, and was up 14.9 per cent on the year. House price expectations rose by 11.9 per cent to 95.6, but were down by 26.5 per cent on a year ago. 
Unemployment expectations: Unemployment expectations fell by 2.5 per cent to 127.4 in April to be up by just 1.4 per cent over the year.
What are the implications for interest rates and investors? 
Council approvals to build new homes may have eased from record levels, but there is still plenty of work to be done over the next year. Dwelling starts in ‘boom’ state of Tasmania are particularly strong. At the other end of the spectrum, building in the ‘Top End’ is at record lows due to weak population growth. 
And it’s not all ‘doom and gloom’ for building materials’ companies. In fact, the growing pipeline of public transport-related infrastructure projects could ‘fill the gap’ for residential builders, while boosting demand for building products. If re-elected, the Federal government has committed to $100 billion worth of rail, roads and other transport projects over a 10-year period. 
Consumer spending and the jobs market are both key to the interest rate outlook. Spending at supermarkets and on food have both been solid. As the Easter holidays approach, retailers will be hoping that Aussies feel chipper about their tax cuts. That said, it appears the reaction from low income earners has been fairly muted.
CommSec expects interest rates to be unchanged for the foreseeable future. But the loss of momentum across global economies means central banks are skewed to more accommodative monetary policies.
RYAN FELSMAN is a Senior Economist for CommSec
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Home building hits three year low: CommSec's Ryan Felsman

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Building activity will bottom out in 2019 with activity still at solid levels according to the winter edition of the HIA’s National Outlook Report.
Tim Reardon, HIA’s principal economist said the housing sector has already stepped back from its role driving the Australian economy and now is not the time for governments to hit the industry with punitive charges.
“Government interventions into the market so far include: state governments imposing punitive Stamp Duty charges on foreign investors, Federal charges for foreign investors, a new set of visa rules that could slow overseas migration, restricting lending to domestic investors and new regulations limiting interest only lending. 
“The Chinese government has also imposed restrictions on capital leaving the country which may have a significant impact on Australian home building. 
“Foreign investors have been attracted to the Australian housing market and they have been investing billions annually in the construction of new residential dwellings. 
“These investors have contributed to activity and employment in metropolitan areas building the supply of new housing stock and easing pressure on rental markets. 
“Governments of all jurisdictions should proceed with caution when imposing new punitive measures on this segment of the market. 
“Foreign capital is highly mobile and if it is forced from the market rapidly it could accelerate the downturn in the sector unnecessarily. 
“A number of state governments have recently hit foreign investors with punitive charges. 
“The Australian Government has also imposed additional regulations that will impact on investors in the sector. 
“The HIA is forecasting that building activity will decline modestly – from record highs - over a number of years, consistent with typical cyclical trends in the industry. Activity will bottom out in 2019 with activity still at solid levels. 
“There is a risk - if uncoordinated and poorly considered policies are introduced to curb foreign investment - that the decline in activity in the sector will be accelerated,” Mr Reardon concluded. 
The winter 2017 edition of the HIA’s National Outlook Report discusses the downturn in building activity beginning March 2016 and forecasts the length and depth of the cycle.
<a href="https://www.propertyobserver.com.au/images/2017/08/24/Screen%20Shot%202017-08-24%20at%2011.46.26%20AM.png" target="_blank"> Click to enlarge</a>
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jonathanchancellor-7SQnKwU6yx

Building activity predicted to bottom out in 2019: HIA

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GUEST OBSERVER
The ABS quarterly survey “Building Activity” provides detail on the non-residential building sector. Here we reassess conditions and prospects for the sector.
Hereafter ‘building’ refers to ‘non-residential building’.
<a href="/images/2016/10/31/Screen%20Shot%202016-10-31%20at%201.52.08%20PM.png" target="_blank">Click to enlarge</a> <img src="/images/2016/10/31/Screen%20Shot%202016-10-31%20at%201.52.08%20PM.png" alt="">
In summary, private building activity weakened over the first half of 2016, puncturing a five year upswing. Our assessment remains that the near-term decline in private activity will be relatively modest, a view supported by the recent improvement in approvals and commencements.
By contrast, total building activity (which includes public works) is likely to be resilient. Notably, the public sector has loosened the purse strings, committing to much needed social infrastructure. Public building approvals and commencements have lifted sharply from their lows.
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<img src="/images/2016/10/31/Screen%20Shot%202016-10-31%20at%201.54.02%20PM.png" alt="">
State by state, conditions are varied and more nuanced than a mining / non-mining divide, as discussed below.
Activity: Real private building activity has weakened in 2016, falling by 4.2% in Q1, followed by a flat Q2. That follows a 31% expansion in the five years to end 2015, including a 7.8% increase in 2015. The level of activity in the Q4 2015 was 4.6% above the previous peak of end 2008, ahead of the GFC impacts.
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Public works in 2016 are in the beginnings of an upswing. Activity rebounded by 6.1% in Q1 and rose a further 11.9% in Q2. Prior to this, activity declined through 2011 to 2015, unwinding the 2009 fiscal stimulus package.
Total real building work was flat over the first half of 2016, with a 2.2% fall in March reversed by a 2.4% June, to be broadly unchanged from a year ago (+0.6%).
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<img src="/images/2016/10/31/Screen%20Shot%202016-10-31%20at%201.57.56%20PM.png" alt="">
Total commencements strengthened in 2015/16, increasing by 14% to $33.6bn, a rise of $4.1bn, largely reversing the 16% decline in 2014/15. In the June quarter, commencements were $8.5bn, in line with the annual pace.
The public sector led the way in 2015/16, with commencements up 41% to $8.8bn, (+$2.6bn), with rebounds in health, education and strength in social buildings more generally. This has public commencements at their highest level since 2011/12.
Private commencements also rose in 2015/16, +7%, following a 16% fall the year prior, centred on: retail; entertainment &amp;recreation; and accommodation.
The pipeline of work outstanding peaked at a relatively high level in mid-2014, at $27bn in total ($21bn for the private sector). The pipeline was progressively reduced, moderating to $19bn by the end of 2015 ($14bn private). Over the past half year, the overall pipeline of work stabilised, edging up to $20bn, while that for private projects edged lower, down to $13bn. 
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Commencements and approvals 
Private sector commencements were valued at $24.9bn in 2015/16, an increase of 7% on the year prior, +$1.6bn, partially reversing the 16% decline in 2014/15. The rebound was centred on: retail, +$0.9bn; entertainment &amp; recreation, +$0.7bn; and accommodation, $0.6bn.
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<img src="/images/2016/10/31/Screen%20Shot%202016-10-31%20at%202.01.06%20PM.png" alt="">
 
Private commercial building commencements (centred on retail and offices) have improved following a sharp fall in 2014/15. In 2015/16, commencements for the segment were valued at $11.0bn, +10% on the year before. That is below the 2013/14 outcome of $13.0bn and the earlier peak of $15.7bn in 2007/08. 
For retail, while consumer spending has been lacklustre at the national level, commencements are elevated supported by increased competition. In the office segment, commencements have stabilised at a low level, +6% in 2015/16, after falling sharply in 2014/15, down 39%. The outlook for offices is heavily influenced by the mining / non-mining growth divide.
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<img src="/images/2016/10/31/Screen%20Shot%202016-10-31%20at%202.03.48%20PM.png" alt="">
 
An area of strength is ‘social infrastructure’. Within this segment upswings are evident in accommodation (including hotels and student apartments) and aged care facilities, as well as strength in entertainment &amp; recreation, and a rebound in education. In 2015/16, commencements for social infrastructure rebounded by 9%, to $9.8bn, only 5% below the historic high of 2013/14 and up from $5.8bn in 2007/08. The segment now accounts for 40% of total private commencements. 
The more timely building approvals data, which is available to August, confirm that we are likely past the low point in this cycle. 
Private building approvals for the 12 months to August are 3% above those for the year before, reflecting gains in social infrastructure, +8%, and industrial, +17%. However, private building approvals remain 10% below the recent peak, which was for the year to February 2014.
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<img src="/images/2016/10/31/Screen%20Shot%202016-10-31%20at%202.05.01%20PM.png" alt="">
 
State-by-state 
Building conditions across the states are quite varied and the outlook is more divergent than is implied by a simple mining / non-mining growth divide. 
As at the national level, the importance of social infrastructure projects, a lift in public investment, and resilience in the retail sector add nuances to the state-by-state picture.
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<img src="/images/2016/10/31/Screen%20Shot%202016-10-31%20at%202.06.31%20PM.png" alt="">
 
The value of building work nationally grew by 2.3% over the year to the June quarter 2016, +$0.2bn (although in real terms, work was broadly flat, up 0.6%). By state, the value of building work made solid gains in NSW and Qld, as well as Tasmania, with largely offsetting falls in Victoria, WA and South Australia. 
Commencements strengthened in 2015/16, up $4.2bn nationally, a move that was centred on gains in Qld , as well as a strengthening of public works in the smaller states.
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<img src="/images/2016/10/31/Screen%20Shot%202016-10-31%20at%202.08.03%20PM.png" alt="">
 
In Qld, commencements rebounded partially in 2015/16, up $1.9bn, following a sharp fall in 2014/15. It was private social infrastructure, as well as public works, that led Qld commencements higher in 2015/16, including: accommodation, aged care facilities, education, and entertainment &amp; recreation. 
Public building commencements in the smaller states and in the territories jumped to $2.7bn in 2015/16, up $1.6bn on 2014/15. A partial rebound in NSW public commencements, +$0.7bn, was another mover in 2015/16. 
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On a state by state basis, current conditions and the near-term building outlook are, in summary: 
In NSW: real building work grew by 7% over the past year. This lift in activity was supported by reducing what was a sizeable pipeline of work outstanding. Near-term, the value of activity is vulnerable to a pull-back from current elevated levels, which are around 20% above commencements. Beyond that, the outlook is positive, reflecting the sound fundamentals for the state and expansionary state fiscal policy. 
In Victoria: real building work declined by 6% over the past year, partially reversing the upswing of the previous couple of years. An emerging stabilisation in activity is likely in coming quarters, ahead of an improvement, supported by the recent strengthening of commencements and approvals, and underpinned by positive fundamentals. 
In Qld: real building work rebounded over the past year, up 12%, following the softer tone evident since 2011 which was associated with the winding down of the mining investment boom. As noted above, commencements bounced back in 2015/16, up on private social infrastructure and public works. The modest lift in the work pipeline will be supportive of activity near-term. Further out, key will be whether some sizeable tourism projects receive the go ahead in response to rising demand, including from international visitors. 
In WA: real building work trended lower over the past year, down 7%, extending the downturn which emerged from the start of 2012 associated with the turning of the mining investment cycle. Conditions are likely to remain subdued as the state continues to feel the impacts from the mining investment downturn, notwithstanding stronger commencements in the June quarter, centred on retail.
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In South Australia: building work weakened over the past two years, including a 9% fall in the year to June 2016, as work on the Royal Adelaide Hospital was progressively completed. Conditions are set to turnaround in coming quarters, led by the public sector, with work progressing on the $0.23bn University of South Australia’s Health Innovation centre and the $0.2bn Adelaide University Medical and Nursing school. 
In Tasmania: building work has begun to recover, led by the public sector. This follows four years of subdued conditions which emerged after the impacts of the Federal government’s fiscal stimulus package of 2009/10. The value of building work for the 2015/16 financial year as a whole was 14% above the level of the year prior. There is further upside, supported by the now relatively sizeable work pipeline, which stands at $0.68bn currently, up from around $0.25bn a year earlier. The $0.7bn Royal Hobart hospital redevelopment is the largest project under construction and work on this has a good deal to run. 
Andrew Hanlan is senior economist for Westpac and can be contacted <a href="https://www.propertyobserver.com.au/https://au.linkedin.com/pub/andrew-hanlan/3/222/430" target="_blank">here</a>. 
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jchancellor-FAypfDUnLy

Private building activity weakened over first half of 2016: Westpac's Andrew Hanlan

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Construction activity picked up over the quarter ended March 2016 from the same period last year, according to the latest Construction Market Movement Report (Q12016) from Cordell, which gives an overview of the health of the Australian construction industry. 
According to Cordell, which last year became a CoreLogic business, the report delivers a comprehensive overview of construction projects identified within Australia over the last 24 months across civil engineering, apartments and units, commercial, industrial, mining and community. 
For the March 2016 quarter, 4,302 projects entering the construction phase in comparison to 3,931 for the same time last year.
Pipeline activity is also up with 4,830 projects reported in March 2016, up from 4,597 for the same period last year with apartments and units the most active sector. There was $50 billion in pipeline activity compared to $27 billion for the same period last year.
However, deferrals rose with 411 projects put on hold compared to 375 for the same time last year. The value of deferred projects this quarter is $3.6 billion compared to $3.1 billion for the same time last year.
Abandonments too increased with 359 projects stopped for March 2016 compared to 320 previously. The value of abandonments is $1.2 billion this quarter which is unchanged from the previous year. 
Commenting on the Cordell report, CoreLogic spokesperson Greg Dickason said the overall results to the March 2016 quarter were positive with civil engineering projects in roads and infrastructure leading the way.
“While general pipeline activity is encouraging with 4,830 projects underway valued at around $50 billion, and largely dominated by apartments and unit developments, deferrals increased. Four hundred and eleven construction projects were placed on hold over the quarter compared to 375 in the March 2015 quarter. In addition, three hundred and seventy five projects were confirmed as abandoned in the March 2016 quarter compared to 320 for the March 2015 quarter,” Dickason said.
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