<p data-end="587" data-start="368">Queensland builder-developer MAYD has revealed the first look at its major North Kirra beachfront development, lodging amended plans that reduce the number of apartments and increase the proportion of larger residences.</p>

<p data-end="778" data-start="589">The project is planned across a substantial 4,742 sqm amalgamated site spanning seven lots at <a href="https://www.apartments.com.au/new-apartments/2-6-pacific-parade-bilinga-qld-4225">2-6 Pacific Parade</a> and 27-33 Golden Four Drive in Bilin​ga, directly opposite Nor​th Kirra Beach.</p>

<p data-end="907" data-start="780"><a href="https://www.apartments.com.au/developers/mayd-group">MAYD</a> secured the site for $32.5 million in 2025, in what was one of the Gold Coast's largest property transactions of the year.</p>

<p data-end="1052" data-start="909">The development will be delivered across two stages, with the first stage carrying an estimated gross realisation value of around $360 million.</p>

<p data-end="1311" data-start="1054">The latest amendments seek to reduce the overall apartment count and shift the project further toward the owner-occupier market, with larger residences designed for buyers wanting considerably more space than traditionally offered in a beachfront apartment.</p>

<p data-end="1451" data-start="1313">The residential mix will include townhomes, oversized two-bedroom apartments, substantial three-bedroom residences and four-bedroom homes.</p>

<p data-end="1676" data-start="1453">MAYD has appointed Cera Stribley to lead the architecture and interiors, with the Melbourne-based design practice drawing on the beachfront setting through a series of ocean-facing terraces and heavily landscaped balconies.</p>

<p data-end="1908" data-start="1678">Strong horizontal forms and curved balconies will define the exterior, with subtropical landscaping integrated throughout the building to soften the built form and increase the connection between the residences and the beachfront.</p>

<p data-end="2142" data-start="1910">The project will also include an extensive collection of resident wellness and lifestyle facilities, continuing the broader shift across the Gold Coast's luxury apartment market toward larger homes supported by resort-style amenity.</p>

<p data-end="2142" data-start="1910"><img alt="MAYD" data-entity-type="file" data-entity-uuid="d1bcbb05-e659-4b47-8bd4-1e595315e2ad" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-27%20at%202.05.03%E2%80%AFPM.png?VersionId=jj0XEud1X1DuLt7_KyElhjMdZGOXmLHP" /></p>

<p data-end="2308" data-start="2144">MAYD Founder Todd Mould said North Kirra was increasingly appealing to buyers attracted to the more established, lower-density character of the southern Gold Coast.</p>

<p data-end="2648" data-start="2310">"North Kirra presents one of the most compelling luxury residential opportunities currently emerging in Australia, combining absolute beachfront with the character and authenticity that buyers are increasingly seeking, and the same sense of tight-knit community that defined Burleigh and Currumbin perhaps 10 or 15 years ago," Mould said.</p>

<p data-end="2797" data-start="2650">"With Gold Coast Airport on its doorstep, it also offers a level of accessibility that broadens its appeal across almost every market demographic."</p>

<p data-end="2938" data-start="2799">The project comes as the southern Gold Coast continues to attract an increasing share of high-end apartment development and buyer activity.</p>

<p data-end="3216" data-start="2940">Kirra in particular has emerged as one of the region's more tightly held beachfront markets, with its relatively low-density character, established surf and hospitality scene and proximity to Gold Coast Airport differentiating it from the higher-density markets further north.</p>

<p data-end="3325" data-start="3218">Mould said those characteristics had informed the approach MAYD and Cera Stribley had taken to the project.</p>

<p data-end="3442" data-start="3327">"We've worked closely with Cera Stribley to create a vision that is deeply connected to its surroundings," he said.</p>

<p data-end="3662" data-start="3444">"Inspired by the coastline itself, the architecture has been shaped around space, privacy and resort-style living, creating a collection of homes that reflects the next generation of luxury on the southern Gold Coast."</p>

<p data-end="3818" data-start="3664">MOTIV Managing Director Carly Cottam, who has been appointed to market the project, said buyer attention had continued to move south along the Gold Coast.</p>

<p data-end="4076" data-start="3820">"Purchasers who may once have defaulted to Broadbeach, Main Beach or Surfers Paradise are increasingly recognising the value of a genuine beachfront location that offers lower density, strong amenity and a more established sense of community," Cottam said.</p>

<p data-end="4375" data-start="4078">"Kirra has a powerful combination of growing demand and genuine scarcity. Beachfront supply is inherently constrained, the area remains relatively low density, and buyers are increasingly placing a premium on locations that feel established, uncrowded and authentic rather than heavily developed."</p>

<p data-end="4503" data-start="4377">Cottam said the proximity to Gold Coast Airport was also proving increasingly important for interstate and second-home buyers.</p>

<p data-end="4741" data-start="4505">"Being minutes from Gold Coast Airport makes it particularly compelling for interstate buyers, frequent travellers and second-home purchasers who can access an authentic coastal lifestyle almost immediately after stepping off a flight."</p>

<p data-end="4910" data-start="4743">The acquisition takes MAYD's active development portfolio to more than $500 million, with the North Kirra project representing one of its largest undertakings to date.</p>

<p data-end="4951" data-start="4912">MAYD is targeting an early 2027 launch.</p>


Joel Robinson

First look at MAYD's North Kirra mixed-use precinct

<main data-perf-region="main">
<p data-end="600" data-start="394">Castle Hill, the longtime hub of the Hills District, has been one of the major beneficiaries of Sydney's Metro expansion, with improved connectivity helping drive continued population growth, development and buyer demand across the Hills District.</p>

<p data-end="733" data-start="602">But despite that growth, the suburb has seen relatively few major new apartment projects brought to market over the past 18 months.</p>

<p data-end="970" data-start="735">Hills District developer Reve Group is looking to fill that gap with <a href="https://www.apartments.com.au/new-apartments/nova-r-ve-castle-hill-2-garthowen-crescent-castle-hill-nsw-2154">Nova Rêve</a>, a major new mixed-use precinct on the corner of Garthowen Crescent and Old Castle Hill Road, a short walk from Castle Hill Metro Station and Castle Towers.</p>

<p data-end="970" data-start="735">[smartcode_project:default project_id=152737 project_image_fid=377679]</p>

<p data-end="1159" data-start="972">The project will comprise three residential towers alongside a hotel, restaurants, cafes and a skybar, more than 1,600 sqm of ground-floor retail and almost an acre of landscaped gardens.</p>

<p data-end="1357" data-start="1161">It represents the largest project undertaken by Reve Group, the development arm of the Kassis family, which has been building across the Hills District for more than 30 years through Kassis Homes.</p>

<p data-end="3400" data-start="3216">[smartcode_project:default project_id=152737 project_image_fid=377675]</p>

<p data-end="3400" data-start="3216">Nova Rêve also represents a significant step up from the family's first apartment development, Grand Rêve, which was delivered nearby on Garthowen Crescent.</p>

<p data-end="1664" data-start="1517">Grand Rêve introduced larger, house-like apartment layouts and premium inclusions including Wolf and Sub-Zero appliances to the Castle Hill market.</p>

<p data-end="1826" data-start="1666">Nova Rêve takes that approach to a precinct scale, combining the residential component with hospitality, retail and substantial public and resident landscaping.</p>

<p data-end="1826" data-start="1666">[smartcode_project:default project_id=152737 project_image_fid=377685]</p>

<p data-end="2045" data-start="1828">Reve Group Managing Director Sam Kassis said the project reflected the family's three decades of building in the Hills, which has evolved from trophy homes on quarter-acre blocks to larger-scale apartment development.</p>

<p data-end="2269" data-start="2047">"Grand Rêve was our first apartment project here and it showed us what this pocket of Castle Hill could be. Nova Rêve is the refinement of that idea: not just apartments, but a place the whole suburb can use," Kassis said.</p>

<p data-end="2430" data-start="2271">A key part of that approach is the hotel, which has been designed to operate as an amenity for the wider Castle Hill community rather than solely hotel guests.</p>

<p data-end="2606" data-start="2432">It will include restaurants, cafes, skybars and all-day dining, alongside conference and event facilities catering to business functions, community groups and private events.</p>

<p data-end="2724" data-start="2608">At ground level, more than 1,600 sqm of shops and cafes will open onto the surrounding streets and landscaped areas.</p>

<p data-end="2892" data-start="2726">Almost an acre of gardens designed by Land and Form Studios will run through the precinct, incorporating pathways, seating, barbecue areas and children's play spaces.</p>

<p data-end="2892" data-start="2726">[smartcode_project:default project_id=152737 project_image_fid=377680]</p>

<p data-end="3004" data-start="2894">Reve Group's Romio Georges said creating an active ground plane had been central to the planning of Nova Rêve.</p>

<p data-end="3214" data-start="3006">"There are gardens with pathways, barbecues, seating and play areas, shops and cafes opening onto the street, and a hotel with restaurants and a skybar that anyone in Castle Hill can walk into," Georges said.</p>

<p data-end="3400" data-start="3216">The project's elevated position on one of Sydney's highest ridgelines will also provide apartments with outlooks toward the Sydney skyline, surrounding parkland and the Blue Mountains.</p>

<p data-end="3400" data-start="3216">More than 80 per cent of the apartments will occupy corner positions, with Turner responsible for both the architecture and interiors.</p>

<p data-end="3670" data-start="3538">&nbsp;</p>

<p data-end="3670" data-start="3538">[smartcode_project_cta:default project_id=152737]</p>

<h3 data-end="3697" data-section-id="q3n5ak" data-start="3672">&nbsp;</h3>
</main>


Nova Rêve arrives as Reve Group bets on Castle Hill's next growth phase

<p>A collection of just 25 large-format apartments and penthouses overlooking Goodwin Park is entering the Coolangatta market, with <a href="https://www.apartments.com.au/new-apartments/marea-residences-coolangatta-27-27a-dixon-street-coolangatta-qld-4225">Maréa Residences</a> combining a low-density, residential-only approach with uninterrupted park and Pacific Ocean outlooks.</p>

<p>Located at 27 Dixon Street, Maréa comprises three and four-bedroom residences alongside a limited number of dual-level penthouses, with the project positioned between Goodwin Park and <a href="https://www.apartments.com.au/developments/coolangatta-qld-4225">Coolangatta</a>’s coastal precinct.</p>

<p>Construction has commenced, with completion currently estimated for late 2027. Three-bedroom residences are priced from $1.8 million.</p>

<p>[smartcode_project:default project_id=150999 project_image_fid=374005]</p>

<p>The project has been designed around its northern outlook across the park, with the building’s architecture, landscaping and material palette intended to establish a connection with the neighbouring green space. The residences have been configured to maximise natural light and views across Goodwin Park towards the ocean.</p>

<p>Inside, the material palette incorporates timber, stone and brushed brass, complemented by curved detailing and ambient lighting. Kitchens and bathrooms carry the same natural material approach, while residences also include basement parking, storage and lift access.</p>

<p>Maréa’s penthouses are arranged over two levels and include private pools, adding another layer to the project’s focus on larger-format apartment living. Across the development, residences are configured with three or four bedrooms rather than the broader mix of smaller apartment types commonly found in larger projects.</p>

<p>[smartcode_project:default project_id=150999 project_image_fid=374010]</p>

<p>Resident amenity is concentrated at rooftop level, where landscaped entertaining terraces and pools take advantage of elevated views across Coolangatta and the Pacific Ocean.</p>

<p>The project has so far been particularly well received by local owner-occupiers and downsizers, according to Urban Activation Property Sales and Marketing Director Matt George, with the residential-only format, construction quality and northern park outlook among the features resonating with purchasers.</p>

<p>“The uninterrupted northern aspect overlooking Goodwin Park has been a key point of difference, with buyers attracted to the sense of serenity and open space the park provides, while still enjoying easy access to the ocean and being within walking distance of the lifestyle and amenities Coolangatta has to offer,” George said.</p>

<p>[smartcode_project:default project_id=150999 project_image_fid=374002]</p>

<p>“The combination of high-quality construction, a residential-only building, park outlook and proximity to the beach has resonated strongly with the local downsizer market.”</p>

<p>The Dixon Street address is within walking distance of Coolangatta Beach and the broader southern Gold Coast coastline, including the surf breaks at Snapper Rocks and Kirra. Coolangatta’s cafés, restaurants and retail are nearby, while Gold Coast Airport is also within close proximity.</p>

<p>[smartcode_project_cta:default project_id=150999]</p>


Maréa Residences brings parkside apartments to Coolangatta

<p data-end="535" data-start="324">Melbourne developer PDG has secured Victorian Government approval for its $1.5 billion Southbank development <a href="https://www.apartments.com.au/new-apartments/the-one-1-queens-bridge-street-southbank-vic-3006">The One</a>, clearing the way for the long-dormant riverfront site opposite Crown to finally be developed.</p>

<p data-end="717" data-start="537">The Minister for Planning has approved the project at 1-29 Queens Bridge Street, with the Department of Transport and Planning issuing the planning permit following its assessment.</p>

<p data-end="918" data-start="719">The approval will allow PDG to develop the prominent 5,059 sqm site with a major mixed-use tower comprising premium apartments, including branded residences, a luxury hotel and boutique office space.</p>

<p data-end="1131" data-start="920">PDG acquired the site in late 2024, with its position directly opposite Crown's main entrance and near Melbourne's Arts Precinct making it one of Southbank's most significant remaining development opportunities.</p>

<p data-end="1131" data-start="920"><img alt="PDG" data-entity-type="file" data-entity-uuid="3933013e-6332-4386-b9be-089df05caf17" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-27%20at%209.29.22%E2%80%AFAM.png?VersionId=sITIgBqDL0N3VNSMwWEmF5UA.uvcsRyu" /></p>

<p data-end="1318" data-start="1133">Designed by COX in collaboration with ODO and PDG, the tower's architecture draws on the movement of the Yarra River, with six vertical pleats running the height of the sculpted facade.</p>

<p data-end="1433" data-start="1320">The project will also see the heritage-listed Queens Bridge Hotel restored and incorporated into the development&nbsp;with new hospitality and public uses, including a rooftop venue.</p>

<p data-end="1658" data-start="1591">A significant component of The One will be its residential amenity.</p>

<p data-end="1864" data-start="1660">More than 5,000 sqm of resident facilities will be delivered across a single level, making it one of the largest consolidated residential amenity offerings proposed in an Australian apartment development.</p>

<p data-end="2011" data-start="1866">The planning approval also incorporates a major upgrade of Queensbridge Square, which PDG will deliver in partnership with the City of Melbourne.</p>

<p data-end="2011" data-start="1866"><img alt="PDG" data-entity-type="file" data-entity-uuid="73167fcd-1031-4b6f-a408-a064cfe45ed1" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-27%20at%209.29.17%E2%80%AFAM.png?VersionId=Pf1AEWxw6SNmBqR0zQW5lyEze.MtxgFp" /></p>

<p data-end="2191" data-start="2013">The existing square will be revitalised as a new civic and pedestrian space along the Yarra River, strengthening the connection between the project, Southbank and the riverfront.</p>

<p data-end="2365" data-start="2193">PDG Founder and Managing Director Vince Giuliano said the approval represented a major milestone for a site which has remained largely underutilised for more than 15 years.</p>

<p data-end="2473" data-start="2367">“This is the most significant Planning Permit approval Melbourne has seen in recent years,” Giuliano said.</p>

<p data-end="2775" data-start="2475">“For more than 15 years, this site has remained underutilised. This approval enables us to deliver a project that will contribute meaningfully to the revitalisation of Southbank, restore and reactivate an important heritage building, and create a new civic and hospitality destination for Melbourne.”</p>

<p data-end="2943" data-start="2777">The latest approval follows an earlier planning permit issued by the City of Melbourne covering demolition works across part of the site at 9-29 Queens Bridge Street. Those demolition and early works are already underway.</p>

<p data-end="3145" data-start="3001">PDG has also started generating early interest in the residential component from owner-occupiers ahead of a planned public launch in early 2027.</p>


PDG secures approval for $1.5bn Southbank apartment development, The One

<p>Local developer Harridan is seeking to turn its Woolloongabba apartment project into the first stage of a broader transformation of Burke Street, using a new 16-storey mixed-use building to establish a greener pedestrian connection toward the rapidly evolving Boggo Road transport and knowledge precinct.</p>

<p>The South East Queensland developer has filed plans for 154 apartments on the <a href="https://www.apartments.com.au/new-apartments/4-burke-street-woolloongabba-qld-4102">southern side of Burke Street</a>, where its proposal has been designed alongside a wider vision by LatStudios for the street.</p>

<p>That vision positions the southern side of Burke Street for buildings of 15 storeys and above, while envisaging lower-rise development of up to five storeys on the northern side to transition into Woolloongabba's existing character housing. It also proposes wider pedestrian verges, deep planting, new street trees and upgrades to the pedestrian approach to Boggo Road Station.</p>

<p>The Harridan development itself has been designed by Brisbane-based Arqus Design and will comprise 154 apartments across 16 storeys. The mix is weighted heavily toward two-bedroom apartments, with 121 proposed alongside 10 one-bedroom and 23 three-bedroom residences. There will typically be around 14 units per floor.</p>

<p>A lower-ground car park and three podium levels will accommodate 156 resident parking spaces, along with visitor and commercial parking. There will also be 154 resident bicycle spaces and 40 visitor bicycle parks.</p>

<p>&nbsp;</p>

<p>Harridan is a family-owned developer and part of the Holmwood Highgate Group, with more than three decades of development activity across South East Queensland. Its portfolio spans residential, commercial and industrial property, with current residential projects including Riverbank on Byron in Bulimba, Esperance Residences in Carina and The Precinct at Kinross Road in Thornlands.</p>

<p>Wooloongabba has been popular for apartment developers, particularly since the announcement of the 2032 Summer Olympics games in Brisbane.</p>

<p>While there have been a lot of development applications, it has failed to materialize into real supply.&nbsp;</p>

<p>Sarazin has been the major player in the area. They are under construction at Murcia Residences, on the fringe of East Brisbane and Woolloongabba. They have just launched <a href="https://www.apartments.com.au/new-apartments/the-stanley-residences-woolloongabba-8-trafalgar-street-woolloongabba-qld-4102">The Stanley Residences</a>, in Woolloongabba on Trafalagar Street. They also have Nuage coming soon on the nearby <a href="https://www.apartments.com.au/new-apartments/nuage-woolloongabba-14-wellington-road-woolloongabba-qld-4102">Wellington Road</a>.</p>


First look: Harridan plans Burke Street transformation beside Boggo Road transport hub

Building Approvals

j.ballantyne1990-6AQqhLzZaK

September 2017 RBA minutes note building approvals have stepped down 

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<p>Australia's privatised building certifiers are worried over insurers’ moves to exclude liability for non-compliant cladding in the wake of the London building fire tragedy.</p>
<p>The Australian Institute of Building Surveyors, the peak body for Australia's privatised building certifiers, has written to members that some professional indemnity insurers were imposing 'onerous exclusions' to policies around non-compliant cladding, The Australian Financial Review reported.</p>
<p>"Some clauses exclude claims arising out of 'non-compliant' aluminium composite cladding whereas others exclude "non-compliant" and "non-conforming" cladding or building materials generally," the emailed letter said. </p>
<p>"The exclusions that we have seen are broadly worded, removing all cover when non-compliant products exist irrespective of whether the insured practitioner caused or contributed to the issue."</p>
<p>Melbourne-based insurance broker BRIC, which advised the institute to send the email, noticed its first policy with an exclusion clause in February. </p>
<p>Since June, it has had to find alternative insurers for 12 clients whose existing insurers had refused to remove exclusion clauses.</p>
<p>The exclusion clauses pose a major risk for professionals such as building surveyors and engineers, BRIC broking manager Darren Pavic was cited by the AFR as saying.</p>
<p>"If a policy does not respond to a claim, the firm and the individual practitioner will be left to defend the matter using their own resources," Pavic said.</p>
<p>Flammable cladding has been a major issue since London's Grenfell Tower tragedy. </p>
<p>The Victorian government has set up a the taskforce to speed up the investigation into the use of flammable cladding on high-rise buildings in the state.</p>
<p>It has also prompted a revision of Australia's National Construction Code. </p>
<p>The move by insurers has also been prompted by the fire at Melbourne’s Lacrosse building in the Docklands.</p>
<p>Moves by state governments, such as in NSW, and by developers and owners themselves to determine the safety of their cladding are likely to lead to a raft of claims over rectification costs, said Scott Higgins, a partner with law firm Mills Oakley. </p>
<p>With developers likely to have confidential dispute resolution mechanisms that would have them resolve problems privately, bodies corporate were more likely to take certifiers to court, Higgins said.</p>
<p>"I'd be very surprised if we didn't start to see them in the next six months," he said.</p>
<p>Erik Adriaantse, the interim chief executive of industry body Strata Community Australia, said news of the exclusions was a "positive" development.</p>
<p>"It's likely to put pressure on certifiers to get it right," he said.</p>
<p>Higgins added that the move by insurers could influence the appetite of building owners to rectify them.</p>
<p>"If you have to rectify the issue and seek to recover the costs – which could be in the millions – by reclaiming those under insurance, if that certifying authority doesn't have an insurer standing behind them there's less comfort there that you're going to be able to recover the costs," he said.</p>
</body></html>

jonathanchancellor-7SQnKwU6yx

Certifiers, building owners at risk from insurer cladding exclusion rules

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<p>The building approvals in the current cycle began to rise from mid-2012, according to HIA’s latest report.</p>
<p>It took until late 2015 for the cycle to peak and approvals have subsequently maintained very high levels from a historical perspective.</p>
<p>Australia’s latest new home construction cycle, for which building approvals formed a very accurate lead indicator, is the longest and largest in the nation’s history.</p>
<p>This has produced very healthy outcomes for the broader Australian economy.</p>
<p>The December 2016 numbers for ABS Building Approvals (the latest available data) confirm that we have passed the peak for this cycle.</p>
<p>However, actual residential construction activity will remain healthy throughout 2016/17 and into 2017/18 due to the continuing gap between building approvals and new dwelling commencements (starts).</p>
<p>In monthly terms building approvals peaked in October 2015 at a level of 21,546.</p>
<p>The annual peak for building approvals was a staggering 241,561 over the 12 months to November 2015.</p>
<p>In calendar year 2016 building approvals reached a level of 230,813 compared to 240,009 in 2015.</p>
<p>A gradual decline in building approvals in the early stages of the down cycle provides an important signal for the Australian economy.</p>
<p>This trend is consistent with continued healthy levels of new dwelling commencements and residential work being done in 2016/17 and into next year.</p>
<p>This situation in turn provides positive impacts on economic growth and employment.</p>
<p>For example, construction absorbs 9 per cent of the workforce and is the third largest employer, after health (12.8 per cent) and retail (10.5 per cent) in the Australian economy.</p>
<p>Record levels of residential construction and related jobs have in recent years offset job losses in other sectors.</p>
<p><a href="https://www.propertyobserver.com.au/images/2017/02/21/HIA-1.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/02/21/HIA-1.jpg" alt=""></p>
<p>There was considerable variation in the evolution of dwelling approvals among the states in 2016 compared to 2015.</p>
<p>This is not a surprising finding – this building cycle has been marked by larger than normal divergenes in housing conditions around Australia given that the up-cycle began before Australia’s largest ever resources investment boom had peaked.</p>
<p>In original (i.e. not seasonally adjusted) terms three out of eight states recorded increases in total building approvals in calendar year 2016.</p>
<p>The strongest increase occurred in the Australian Capital Territory (+44.6 per cent), followed by South Australia (+3.8 per cent) and New South Wales (+1.2 per cent).</p>
<p>Total building approvals declined in Western Australia and the Northern Territory (-23.4 per cent in each instance), Tasmania (-23.0 per cent), Queensland (-5.9 per cent), and Victoria (-1.3 per cent).</p>
<p>Comparing the December 2016 quarter to the December 2015 quarter, there was a decline in approvals nationwide of 14.2 per cent (in unadjusted terms, see chart below).</p>
<p><a href="https://www.propertyobserver.com.au/images/2017/02/21/HIA-2.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/02/21/HIA-2.jpg" alt=""></p>
<p>Different jurisdictions played varying roles in this overall result.</p>
<p>The main drivers of this annual change in the December 2016 quarter were New South Wales (-6.4 percentage points) and Queensland (-4.9 percentage points).</p>
<p>Contractions were also evident for: Western Australia (-1.5 percentage points); and Victoria and South Australia (-0.9 percentage points in each instance).</p>
<p>Tasmania had a minor - 0.1 percentage point result.</p>
<p>In terms of the number of building approvals, the decline in NSW (-3,884) acted as a large drag on the national outcome (-8,560).</p>
<p>The following analysis provides greater detail on developments in approvals for different dwelling types.</p>
<p>This breakdown of building approvals – separating out semi-detached style product from medium/high density (MHD) units, for example provides important ‘colour’ to the building approvals landscape and is often forgotten in generalised commentary regarding detached houses ‘versus multi-units’.</p>
<p>Let’s start from the top with the aggregate profiles to provide the necessary background.</p>
<p>The chart below shows monthly changes in seasonally adjusted approvals.</p>
<p>There were 51,173 total seasonally adjusted building approvals in the December 2016 quarter, a level 15.2 per cent lower than approvals in the September quarter.</p>
<p>As previously noted, building approvals were 3.8 per cent lower in 2016 than in 2015.</p>
<p>Seasonally adjusted building approvals for detached houses totalled 28,275 in the December 2016 quarter, a level 2.2 per cent lower than in the September quarter of 2016.</p>
<p>Total approvals for ‘other dwellings’ – usually referred to as ‘multi-units’ numbered 22,900 in the December 2016 quarter.</p>
<p>That level was 26.9 per cent lower than the approvals in the September quarter of 2016. In the 12 months to December 2016 approvals were 5.5 per cent lower than in 2015.</p>
<p>The overall profile for detached house approvals in 2016 suggests this segment of the new home building market remains in relatively healthy shape in early 2017.</p>
<p><a href="https://www.propertyobserver.com.au/images/2017/02/21/HIA-3.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/02/21/HIA-3.jpg" alt=""></p>
<p>Drilling down from this aggregate profile we consider five categories of residential building approvals.</p>
<p>Comparing the December 2016 quarter to the same period in 2015, all of the five categories of dwellings recorded a decline in approvals: detached houses (-5.8 per cent); semi-detached, row, terrace or townhouse homes (-10.1 per cent); flats or units in 1 or 2 storey buildings (-21.9 per cent); flats or units in 3 storey buildings (-25.8 per cent); and flats or units in 4 or more storey buildings (-27.4 per cent).</p>
<p>All the categories combined recorded a national decline of 14.2 per cent.</p>
<p>In terms of last calendar year, all categories except semi-detached, row or terrace dwellings posted a negative change.</p>
<p>Building approvals in the ‘semi-detached’ category increased by 3.8 per cent in 2016.</p>
<p>The remaining categories posted declines in 2016 of: detached houses (-1.9 per cent); flats or units in 1 or 2 storey buildings (-27.1 per cent); flats or units in 3 storey buildings (-7.7 per cent); and flats or units in 4 or more storey buildings (-7.5 per cent).</p>
<p>The chart below shows how approvals for each of the different dwelling types have been contributing or detracting from total growth in the number of building approvals in a quarter over the same quarter a year ago.</p>
<p>Clearly, up to the December 2016 quarter, approvals for all categories have driven declines in aggregate approvals, but to a widely varying extent.</p>
<p><a href="https://www.propertyobserver.com.au/images/2017/02/21/HIA-4.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/02/21/HIA-4.jpg" alt=""></p>
<p>Detached house approvals</p>
<ul>
<li>51.2 per cent of total building approvals in 2016 compared with the decade average of 60.9 per cent;</li>
<li>A significant 5.8 per cent decline during the three months to December 2016 to reach a (non- seasonally adjusted) level of 27,610. This level is 13.8 per cent lower than in the December 2015 quarter;</li>
<li>Average monthly approvals of 9,735 dwellings over 2016 in unadjusted terms;</li>
<li>Eastern seaboard states the primary geographical drivers of growth in 2016.</li>
</ul>
<p>Semi-detached and townhouse approvals</p>
<ul>
<li>14.6 per cent of total building approvals in 2016 compared with the decade average of 13.5 per cent;</li>
<li>Average monthly approvals of 2,781 dwellings over 2016, in unadjusted terms;</li>
<li>Strong 3.8 per cent growth in 2016, driven by the eastern seaboard states;</li>
<li>Queensland, the Australian Capital Territory, the Northern Territory and Victoria contributed to aggregate growth nationally;</li>
</ul>
<p>Approvals for units in 1 or 2 storey buildings</p>
<ul>
<li>1.4 per cent share in 2016, compared with the decade average of 2.9 per cent;</li>
<li>Average monthly approvals of 271 dwellings over 2016, in unadjusted terms. Growth driven by South Australia and the Australian Capital Territory, but declines elsewhere.</li>
</ul>
<p>Approvals for units in 3 storey buildings</p>
<ul>
<li>2.2 per cent share in 2016, compared with the decade average of 2.5 per cent;</li>
<li>Average monthly approvals of 426 dwellings over 2016, in unadjusted terms;</li>
<li>Decline of 7.7 per cent in 2016;</li>
<li>Annual decline a result of pull-backs in New South Wales and the Northern Territory. Growth in Victoria and South Australia was insufficient to offset the declines.</li>
</ul>
<p>Approvals for units in 4+ storey buildings</p>
<ul>
<li>30.5 per cent share in 2016 compared with ten year average of 20.1 per cent;</li>
<li>Average monthly approvals of 5,826 dwellings over 2016, in unadjusted terms;</li>
<li>Some slow-down in 2016, driven mainly by Victoria, Queensland and the Northern Territory. The Australian Capital Territory and New South Wales were the two star contributors to growth.</li>
</ul>
<p>Australia’s new home-building boom looks set to taper off from 2017.</p>
<p>Building approvals for new housing have faded (moderately) in the past year, but they didn’t tank.</p>
<p>ABS building approvals figures show that the number of houses and ‘other dwellings’ approved in 2016 were lower than in 2015 by less than 4 per cent.</p>
<p>This outcome is not a precursor of any serious declines in new dwelling commencements in the first half of 2017.</p>
<p>The steady trend in detached house approvals suggests that actual activity will similarly remain reasonably healthy in the short term.</p>
<p>A slightly more positive short term outlook applies to semi-detached type approvals.</p>
<p>Overall, we retain our long held outlook for continued healthy levels of new home construction in 2016/17, and to a lesser extent in calendar year 2017:-</p>
<p>Detached house construction will remain healthy in the short term, but the volume of building will be lower than last year;</p>
<p>The semi-detached market has some further growth to it in the first half of 2017 – a tick in the box that shouldn’t be missed;</p>
<p>The pipeline of work in progress is substantial, particularly in terms of medium/high density dwellings.</p>
<p>HIA Economics will shortly be releasing their latest forecasts for dwelling commencements.</p>
<p>This release will include updates for the subscription products of: dwelling starts composition forecasts; regional building approvals forecasts; and long term forecasts.</p>
<p>For further information go <a href="https://hia.com.au/en/BusinessInfo/economicInfo/housingForecasts.aspx" target="_blank">here</a>.</p>
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New home building approvals in longest and largest cycle in Australia's history

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<p>The December 2016 update for ABS Building Approvals confirms the peak for the cycle has passed, according to the Housing Industry Association.</p>
<p>“While a downward trend in building approvals is firmly entrenched, residential construction activity itself will hold up well throughout 2016/17,” said HIA chief economist, Dr Harley Dale.</p>
<p>“From 2017/18 we will see a sharper decline in new home building activity, primarily due to the medium/high density segment of the market.</p>
<p>"Building approvals peaked in July 2016, but by December last year were only 18 per cent lower than that peak.</p>
<p>"Given approvals reached an all-time high last year that’s a modest fall – we can take that away and bank it as a good outcome for the Australian economy.</p>
<p>"This has been an extraordinary cycle for new home building – the biggest and longest in history."</p>
<p>He said a long tail to the cycle will be helpful for the Australian economy.</p>
<p>Dr Dale said it was important to focus in 2017 on ensuring Australia has the correct longer term policy settings to ensure we adequately house our growing and ageing population.</p>
<p>The recent appointment of Michael Sukkar as Assistant Minister to the Treasurer, with a focus on housing affordability allows the Federal Government to lead from the front in meeting this crucial national objective.”</p>
<p><a href="https://www.propertyobserver.com.au/images/2017/02/02/Screen%20Shot%202017-02-02%20at%202.34.22%20pm.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/02/02/Screen%20Shot%202017-02-02%20at%202.34.22%20pm.jpg" alt=""></p>
<p>In December 2016 total seasonally adjusted building approvals fell by 1.2 per cent with detached houses down by 2.2 per cent and ‘other dwellings’ sitting flat at +0.1 per cent.</p>
<p>On a three month annualised basis total approvals remain above the 200,000 threshold at 204,692.</p>
<p>In December 2016, seasonally-adjusted building approvals increased by 19.5 per cent in Tasmania and 17.0 per cent in Victoria, while in trend terms there was an increase of 1.2 per cent in the Northern Territory.</p>
<p>Building approvals fell in Western Australia (-16.3 per cent), New South Wales (-13.2 per cent), South Australia (-5.4 per cent), and Queensland (-0.1 per cent).</p>
<p>In trend terms approvals fell by 2.1 per cent in the Australian Capital Territory.</p>
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Peak of the building approvals cycle has passed: HIA

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<div>The NSW Department of Planning will be able to step in if councils or other government agencies sit on residential approvals for too long under new laws.</div>
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<div>Aimed at relieving Sydney's chronic housing shortage, the proposed changes will see the Planning Minister also have the right to set up a planning panel on councils that are stalling on a project decision.</div>
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<div>It is a system already operating in South Australia. </div>
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<p>The NSW development approval system has previously been labelled the worst in the world by the Property Council of NSW.</p>
<p>The Daily Telegraph had Prime Minister Malcolm Turnbull last week saying Sydney councils were taking three times as long to approve DAs as their counterparts in Brisbane.</p>
<p>The proposed changes include standardising the format of councils' development control plans, removing 400 formats that exist across the state.</p>
<p>Developers will also be given incentives, yet to be detailed, to resolve objections with neighbours before lodging development approvals.</p>
<p>It is expected to save time and money, and increase harmony, though the Australian Financial Review noted NSW Planning Minister Rob Stokes' department provided details of the legislation to the paper on the condition no groups such as Greens and local councils would be approached for comment. </p>
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<p>NSW Urban Development Institute of Australia chief executive Steve Mann, in comments supplied by the NSW government, said the reforms addressed some long-held frustrations with the planning system by industry, community and local government.</p>
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jchancellor-FAypfDUnLy

NSW to hasten residential approvals with new planning rules

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<br>The latest construction data was certainly disappointing. Not only is construction work down over 11 percent on a year ago, but the falls were across an array of sectors.</div>
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<div class="column">Engineering and commercials continued to record the brunt of the weakness, while residential construction also fell from record highs. In addition the major states all recorded a fall in construction activity, with gains only in ACT, Tasmania and the Northern Territory.</div>
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<div class="column"><a href="/images/2016/11/24/Screen%20Shot%202016-11-24%20at%208.51.47%20AM.png" target="_blank">Click to enlarge</a></div>
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<div class="column"><img src="/images/2016/11/24/Screen%20Shot%202016-11-24%20at%208.51.47%20AM.png" alt=""></div>
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<p>The ‘baton pass’ from engineering to residential building was clearly the driver of activity over the last couple of years. In fact engineering work is down by 23.2 percent on a year ago – just shy of the biggest annual fall on record, as opposed to residential construction, which eased from record highs. The results are even more staggering when you consider that just over two years ago engineering work surpassed total building (residential and commercial) by more than $9 billion.</p>
<p>And while policymakers would not be overly concerned at present, a substantial pullback in residential activity would create a void that could cause concern. Essentially the hope would be that commercial and non-mining related business investment will lift over the coming year and provide the economy with a lift in momentum.</p>
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<div class="column">Inflation in the building sector is healthy without being excessive. Not only was inflation flat in the September quarter but the annual rate of construction inflation eased back to 2 per cent. Interestingly recent construction industry reports forecast a rise in hourly rates over the medium term at unionised building sites due to new enterprise bargaining agreements and labour shortages.</div>
<div class="column"> </div>
<div class="column">In addition recently signed agreements suggest a 20 percent lift in wages over the next 4 years on some sites. Overall a lift in inflation in the building sector would not concern the Reserve Bank at present given the lack of inflation across the rest of the economy.  </div>
<div class="column"> </div>
<div class="column">Today’s data is unlikely to alter the Reserve Banks thinking when it comes to rates. Focus now turns to the June quarter business investment data released on December 1. And while the Reserve Bank will be particularly interested in estimates of completed non-mining investment, there will be a much greater focus on future spending plans - especially in light of the fact that private sector construction activity continues to disappoint.</div>
<div class="column"> </div>
<div class="column">What do the figures show?</div>
<div class="column"> </div>
<div class="column">Construction Work</div>
<div class="column">
<br>Construction work done fell by 4.9 percent in real (inflation-adjusted) terms in the September quarter after sliding by 3.1 percent in the June quarter. Work done is down by 11.1 percent on a year ago. Public sector construction work fell by 0.2 percent in the quarter while private sector activity fell by 6.0 percent.</div>
<div class="column">
<br>Construction work fell in five of the states and territories in the September quarter. Leading the falls was Western Australia (down 13.6 percent), followed by Victoria (down 6.9 percent), South Australia (down 1.3 percent), NSW (down 2.1 percent) and Queensland (down 0.2 percent). Construction rose in the ACT (up 7.1 percent), Tasmania (up 4.7 percent), and the Northern Territory (up 0.6 percent).</div>
<div class="column">
<br>Engineering work fell by 3.8 percent in the September quarter. Engineering construction is down by 23.2 percent on a year ago – just shy of the biggest annual fall on record.</div>
<div class="column">
<br>Commercial (non-residential) building fell by 10.9 per cent in the September quarter to be down 7.6 percent over the year. </div>
<div class="column"> </div>
<div class="column">Residential building fell by 3.1 per cent in the September quarter and was up by 6.3 percent over the year. Alterations &amp; additions fell by 0.6 percent in the quarter while new residential work fell by 3.4 percent.<br><p>The measure of inflation in the construction sector (deflator) was flat in the September quarter. The annual rate of construction inflation fell from 2.6 percent to 2.0 percent. Engineering prices fell by 0.7 percent in the quarter (up 1.7 percent over the year) while building prices rose by 0.6 percent in the quarter (1.9 percent over the year).</p>
<p><a href="/images/2016/11/24/Screen%20Shot%202016-11-24%20at%208.52.56%20AM.png" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/11/24/Screen%20Shot%202016-11-24%20at%208.52.56%20AM.png" alt=""></p>
<p>What is the importance of the economic data?</p>
<p> The Bureau of Statistics releases quarterly estimates of Construction work done. The estimates are based on a survey and cover around 85 per cent of the construction work done in the period. Revised estimates will be released in coming months. The data is useful largely for historical purposes but the work yet to be done estimates provide an early warning signal of future activity. The residential work figures give a good early guide to the strength of residential investment in the national accounts.</p>
<p>What are the implications for interest rates and investors?</p>
There is still plenty of work in the construction sector. But there are winners and losers across states and industry sectors. The Reserve Bank will not be overly concerned with the current trends in construction. Overall activity is correcting as expected and adjusting to the new realities.</div>
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<br>CommSec expects the cash rate to remain on hold over the foreseeable future. </div>
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<div class="column"><em>Savanth Sebastian is an economist for <a href="https://www.commsec.com.au/" target="_blank">CommSec</a></em></div>
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Construction activity falls, tame building costs: Savanth Sebastian

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<p>Total dwelling approvals experienced a large decline during September with new dwelling approvals falling 8.7 percent during September and multi-unit developments down 17.5 percent month on month according to the Housing Industry Association.</p>
<p>During September, total new dwelling approvals fell by 8.7 per cent due to big reductions in the larger states, according to Shane Garrett, HIA Senior Economist.</p>
<p>He said during the month, a total of 18,945 approvals were recorded with detached house approvals increasing by 1.7 percent during the month, while multi-unit approvals were down by some 17.5 percent in month-on-month terms.</p>
<p>“Despite the large drop in multi-unit dwelling approvals during September, the volume of approvals in this segment of the market is still at very high levels by historic standards - this means that the immediate pipeline of work will remain very elevated on the apartment side,” he said.</p>
<p>“The concentration of multi-unit dwelling construction in the large states like NSW and Victoria means that these big players bore the brunt of the reduction in multi-unit approvals during September.</p>
<p>“During September, detached house approvals rose to their highest level since May which was good news for both South Australia and Western Australia where detached houses still account for the large majority of new dwellings.</p>
<p>"In September 2016, total seasonally-adjusted new home building approvals increased by 9.4 percent in South Australia and by 5.5 percent in Western Australia.</p>
<p>"During September, building approvals experienced the largest decline in Victoria (-15.6 percent) followed by New South Wales (-13.3 percent).</p>
<p><a href="/images/2016/11/02/Building%20approvals.jpg" target="_blank">Click to enlarge</a></p>
<p> <img src="/images/2016/11/02/Building%20approvals.jpg" alt=""></p>
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Residential building approvals declining during September period

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<p>GUEST OBSERVER</p>
<p>The September 2016 building approvals date, released earlier today by the ABS, shows some of the growing fears around the excess heat in the market for new apartments may be premature.</p>
<p>The data shows a massive turnaround in apartment approvals, from the strong growth recorded in the August data of 26.3 percent (year-on-year), to a reversal in the September data, to record a fall over 9.9 percent measured year-on-year.</p>
<p>Building approvals data has a tendency to be quite volatile when comparing results month by month, but this latest result is an example of how quickly the housing market can respond when market conditions change.</p>
<p>Talk of an emerging oversupply in inner-city apartments markets in Sydney, Melbourne and some parts of Brisbane has no doubt made developers and builders in these markets more cautious.</p>
<p>However, Master Builders would caution against being overly bearish on the prospects of inner-city apartment markets while auction clearance rates remain high, rents are growing and house prices continue to march forward.</p>
<p>On the government’s own estimates Sydney is projected to have a population of 6.4 million by 2036. On average, that would add 210,000 people to Sydney’s population each year, or pretty much the equivalent of the entire population of Hobart each and every year for the next twenty years.</p>
<p>Elsewhere, the RBA’s decision this week to keep interest rates on hold came with more jawboning of risks for the housing sector. While the rhetoric was more positive overall, particularly on the global economic outlook, there is a heightened level of concern around the impact a further reduction may have on house prices.</p>
<p>Master Builders agrees with the RBA’s sentiments.  While acknowledging the role interest rates have played in supporting a much needed boom in housing construction over the past couple of years, Master Builder would caution the Bank to carefully consider the impact that further reductions may have on some of Australia’s hotter housing markets in Sydney and Melbourne.</p>
<p><em>Matthew Pollock is national manager, housing, Master Builders Australia and can be contacted <a href="https://www.masterbuilders.com.au" target="_blank">here</a>.</em></p>
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Fall in approvals points to peak in housing construction cycle

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<div class="column">GUEST OBSERVER</div>
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<div class="column">Dwelling approvals dropped 8.7 percent in Sep, larger than the market expectation of a 3 percent fall but within the range of ‘normal’ volatility for month to month reads.</div>
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<div class="column"><a href="/images/2016/11/03/Screen%20Shot%202016-11-03%20at%208.09.31%20AM.png" target="_blank">Click to enlarge</a></div>
<div class="column"><img src="/images/2016/11/03/Screen%20Shot%202016-11-03%20at%208.09.31%20AM.png" alt=""></div>
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<div class="column">The detail shows a sharp 16.3 percent drop in units was the main driver in the month – with-in this segment the ‘usual culprit’ when there is volatility - high rise approvals – was down just over 20 percent in the month but down only slightly on a year ago, reflecting the high starting point following a big surge in July. Even with a dip last month, August was the fourth highest reading on record.</div>
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<div class="column"><a href="/images/2016/11/03/Screen%20Shot%202016-11-03%20at%208.13.02%20AM.png" target="_blank">Click to enlarge</a></div>
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<div class="column">Outside of ‘high rise’ the monthly moves were mixed but mostly hint at an underlying trend softening. Private sector house approvals were up 2.3% but ‘mid-rise’ were down over 10 percent. The combined picture from ‘non high rise’ approvals now show a trend decline for six consecutive months tracking at a 10-15 percent annual pace. The state detail shows this coming through across all the main states – a more convincing though still tentative sign of a broad underlying slowdown.</div>
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<div class="column"><a href="/images/2016/11/03/Screen%20Shot%202016-11-03%20at%208.14.19%20AM.png" target="_blank">Click to enlarge</a></div>
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<div class="column"><img src="/images/2016/11/03/Screen%20Shot%202016-11-03%20at%208.14.19%20AM.png" alt=""></div>
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<br>The signal from ‘high rise’ remains much less conclusive – despite the latest monthly drop it is unclear whether the segment is levelling out or turning down with approvals uneven across the major states as well (up strongly on a year ago for NSW but lacking a clear direction in Vic and Qld).</div>
<div class="column">
<br>The value of renovation approvals declined 2.2 percent to be down 10.6 percent/yr, pointing to a clear softening heading into year end after strong gains in the first half of 2016.</div>
<div class="column">
<br>The value of non res building approvals spiked sharply in Sep (+119 percent!). The gain came from a mix of retail, office, hotels and entertainment &amp; recreation buildings – the breadth of the gain a promising sign that it may not be just a 'one-off'. State-wise, all of the gain is coming from NSW and Vic.</div>
<div class="column">
<br>Overall, the update provides more tentative evidence of an underlying slowdown in non high rise dwelling approvals but the picture on high rise remains very uncertain. The mix still looks relatively constructive for new dwelling construction in 2017 – when the continued ramp up in apartment work looks set to more than offset the slowdown in other segments. The near term path of high rise approvals is more critical for activity in 2018.</div>
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<div class="column"><img src="/images/2016/11/03/Screen%20Shot%202016-11-03%20at%208.15.32%20AM.png" alt=""></div>
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<div class="column">The September pull back in this segments falls well short of a decisive signal – it would take similar-sized moves in the next few months to signal the sort of 'break out' weakening that would indicate a sharp wind down in high rise activity is on the way. </div>
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<div class="column"><em><span>Matthew Hassan</span> is senior economist with <a href="https://www.westpac.com.au/" target="_blank">Westpac</a>.</em></div>
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High rise approvals drop after July surge: Matthew Hassan

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<div class="column">New council approvals to build houses or apartments are volatile on a monthly basis.</div>
<div class="column"> </div>
<div class="column">But overall the amount of building is still hovering near record highs. But there was a new ingredient in the mix in September – a sharp lift in commercial building approvals.</div>
<div class="column"> </div>
<div class="column">While not disclosed by the Bureau of Statistics, the project boosting the total seems to be the $2 billion Crown Sydney resort that includes retail, entertainment and hotel accommodation components. While just one – albeit big – project, it still adds to demand for labour and materials and will support building activity through to 2020.</div>
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<br>The sharp price gains for iron ore and thermal and coking coal point to higher incomes in Australia and higher tax revenues for the Federal Government. The higher prices reflect stronger Chinese economic activity, especially a resurgence in residential building. In terms of coal, a reduction in Chinese coal output has served to boost import demand and prices. But overall the news is good for Australian resource regions and good news for the Federal Budget.</div>
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<br>As the Reserve Bank noted yesterday, consumer and business confidence levels are above longer-term averages. Low interest rates, rising real incomes and solid confidence levels should support spending in the lead up to Christmas.</div>
<div class="column">
<br>The National Fiscal Outlook neatly presents in one place the position of Commonwealth and State Government finances. There are no major surprises and nothing to spook rating agencies. Infrastructure spending is up, expenses are down and lower revenues reflect slower nominal economic growth. But to some extent the document may already be ancient history. The economy is picking up pace, higher commodity prices will boost government coffers and inflation looks to be lifting from lows. </div>
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<br>Australian government debt is set to peak near 19 percent of GDP – one of the lowest debt ratios of major advanced economies. And the path to fiscal surplus remains intact.</div>
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<br>What do the figures show?</div>
<div class="column">
<br>Building Approvals:</div>
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<div class="column">Dwelling approvals fell by 8.7 percent in September – the fourth decline in five months. In trend terms, approvals fell by 0.6 percent.</div>
<div class="column">
<br>Over the past year 237,822 new homes were approved, just shy of the record high 240,919 in the year to October 2015.<br>House approvals rose by 1.7 percent in September – the first rise in four months. Meanwhile ‘lumpy’ apartment approvals fell by 17.5 percent in September after falling by 2.9 percent in August and rising by 24.1 percent in July.</div>
<div class="column">
<br>Dwelling approvals in September were down by 6.4 percent on a year ago in seasonally adjusted terms but up 2.1 percent in trend terms.</div>
<div class="column">
<br>Dwelling approvals across states and territories in September: NSW (-13.3 percent); Victoria (-15.6 percent); Queensland (-11.7 percent); South Australia (+9.4 percent); Western Australia (+5.6 percent); Tasmania (-4.0 percent).</div>
<div class="column"> </div>
<div class="column">In trend terms, approvals fell by 6.0 percent in the Northern Territory but rose by 15.9 percent in the ACT.</div>
<div class="column">
<br>The value of all commercial and residential building approvals soared by 29.9 percent in September to a record high of $11.8 billion. Residential approvals fell by 4.4 percent with new building down by 4.6 percent while alterations &amp; additions fell by 2.2 percent. Commercial building lifted by 118.9 percent in September to a 7-year high of $5.5 billion.</div>
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<br>Fiscal outlook</div>
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<div class="column">The Parliamentary Budget Office has released the National Fiscal Outlook report. The PBO says Commonwealth net debt will lift to $356.4 billion (18.8 percent of GDP) in 2018/19 compared with $346.6 billion (18.2 percent of GDP) at the 2015/16 mid-year estimate (MYEFO). Net debt is to peak at 19.2 percent of GDP in 2017/18 before improving to reach 17.8 percent of GDP in 2019/20.</div>
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<br>The PBO said: “According to Commonwealth and state government 2016/17 budgets the projected national fiscal deficit from 2015/16 to 2018/19 has deteriorated by $14.9 billion (from a total of $122.3 billion at the time of the mid-year updates to $137.1 billion).</div>
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<br>The deterioration in the projected fiscal outlook from 2015/16 to 2018/19 is due to a downward revision in projected revenue of $18.1 billion along with an upward revision in net capital investment of $2.8 billion, partially offset by a downward revision in expenses of $6.0 billion.</div>
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<br>“Relative to the 2015/16 mid-year fiscal updates, the Commonwealth’s projected fiscal deficit from 2015/16 to 2018/19 has increased by $8.9 billion (from $96.1 billion to $105.1 billion), driven primarily by a decline in projected revenue, partially offset by a reduction in projected expenses and net capital investment.”</div>
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<br>Consumer confidence</div>
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<div class="column">The ANZ/Roy Morgan consumer confidence rating rose by 0.4 percent to 114.1 in the week to October 30. Confidence is down 1.0 percent over the year but above the average of 112.4 since 2014. Three of five components of the index fell in the latest week:</div>
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<li> The estimate of family finances compared with a year ago was down from +9 to +8; </li>
<li> The estimate of family finances over the next year was up from +21 to +26;</li>
<li>  Economic conditions over the next 12 months was down from +0 to -3;</li>
<li>  Economic conditions over the next 5 years was down from +6 to +5;</li>
<li>  The measure of whether it was a good time to buy a major household item was up from +32 points to +35 points.</li>
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What is the importance of the economic data?</div>
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<br>The Bureau of Statistics' monthly Building Approvals release contains figures on local council approvals to build residential structures such as homes and units as well as commercial premises such as offices and shops. Approval is one of the first stages of the construction ‘pipeline’ and is thus a key leading indicator of future activity. An increase in approvals would point to stronger future activity for construction-related companies.</div>
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<br>The ANZ/Roy Morgan weekly survey of consumer confidence closely tracks the monthly Westpac/Melbourne Institute consumer sentiment index but the former measure is a timelier assessment of consumer attitudes and is now closely tracked by the Reserve Bank.</div>
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<br>What are the implications for interest rates and investors?</div>
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<div class="column">The Reserve Bank has received ample justification for its decision to leave rates on hold. The value of building approvals has hit fresh highs and the lift in iron ore and coal prices will serve to lift labour demand, spending and economic activity in resource regions.</div>
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<br>CommSec expects the Reserve Bank to remain on the interest rate sidelines for an extended period. The job market is in decent shape, consumers and businesses remain confident and home building is just shy of record highs. And importantly, inflation is projected to rise over the next two years.<br><br>
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<div class="column"><em>Craig James is the chief economist at <a href="https://www.comsec.com.au/default.aspx" target="_blank">CommSec</a>.</em></div>
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