<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>
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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

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<p><span>GUEST OBSERVER</span></p>
<p><span>The value of housing finance commitments stabilised in August following a sharp fall the previous month. Recent strength in investor finance appears to be waning. </span></p>
<p><a href="/images/2016/10/11/Screen%20Shot%202016-10-11%20at%202.33.49%20PM.png" target="_blank"><span>Click to enlarge</span></a></p>
<p><span><img src="/images/2016/10/11/Screen%20Shot%202016-10-11%20at%202.33.49%20PM.png" alt=""></span></p>
<p><span>Housing finance commitments for the construction of new houses weakened sharply, suggesting building approvals may be nearing a peak. Overall though, the level of activity in the housing market is strong and there is a significant backlog of work.</span></p>
<p>The value of housing finance commitments stabilised in August, rising by 0.2 percent m/m in August following a 2.7 percent m/m fall the previous month.</p>
<p>In annual terms, the value of housing finance continues to fall, with commitments down 6.3 percent y/y in August. The number of housing finance commitments fell by 3 percent m/m.</p>
<p><a href="/images/2016/10/11/Screen%20Shot%202016-10-11%20at%202.35.43%20PM.png" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/10/11/Screen%20Shot%202016-10-11%20at%202.35.43%20PM.png" alt=""></p>
<p>Owner-occupied finance excluding refinancing rose by 0.2 percent m/m, with a larger 0.6 percent m/m increase for upgraders. Finance for first home buyers fell by 1.2 percent m/m.</p>
<p>Interestingly, investor finance growth moderated for the second consecutive month, rising by 0.1 percent m/m in August compared with 0.5% m/m in July.</p>
<p>In trend terms, housing finance broadly appears to be rolling over (see Figure 1). This is surprising given that other data flow on the housing market has been somewhat stronger. House prices have continued to rise, auction clearance rates remain elevated, and building approvals are around record levels.</p>
<p>Tighter surveyed lending conditions for developers are continuing to weigh on finance for construction of new housing, which fell sharply in August, suggesting building approvals may be close to peaking (see Figure 2).</p>
<p><a href="/images/2016/10/11/Screen%20Shot%202016-10-11%20at%202.37.49%20PM.png" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/10/11/Screen%20Shot%202016-10-11%20at%202.37.49%20PM.png" alt=""></p>
<p>That said, there is a record backlog of work which will continue to support growth in construction activity over the coming year. </p>
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<p><em>Jo Masters is senior economist, ANZ and can be contacted <a href="https://www.anz.com/personal/" target="_blank">here</a>.</em></p>
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jchancellor-FAypfDUnLy

Value of housing finance commitments stabilised in August: ANZ's Jo Masters

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<p>A release from ANZ Research stating experts are now less sure of lower interest rates exacerbating housing market risks, and states the RBA needs to temper its assessment given renewed strength in approvals, clearance rates and prices.</p>
<p>According to Felicity Emmett, head of Australian economics, ANZ research, in the longer term, we think the RBA will remain concerned about the feedback from weak rents to inflation, especially given the unprecedented supply of apartments that comes online over the next two years.</p>
<p><a href="/images/2016/09/05/Screen%20Shot%202016-09-05%20at%2011.20.12%20AM.png" target="_blank">Click to enlarge</a></p>
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<p><span>"We think that the RBA will remain concerned about the feedback from weak rents to inflation, especially given the unprecedented supply of apartments that come on line over the next two years," she said.</span></p>
<p><span>"We think a marked impact on rents is likely given most apartments are rented and with rents being the second-largest component of the CPI basket (there may also be an indirect effect on project home prices, which are the largest item in the CPI). </span></p>
<p><span>"Accordingly, we think that the latest strength in the housing market is unlikely to chang</span><span>e the RBA’s </span><span>strong easing bias. </span></p>
<p><a href="/images/2016/09/05/Screen%20Shot%202016-09-05%20at%2011.20.19%20AM.png" target="_blank"><span>Click to enlarge</span></a></p>
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<p><span>"We are surprised by the strength of approvals and new orders given that surveyed lending standards for property developers have been significantly tightened over the past two years, partly at the behest of regulators, but also because lenders are being more cautious at this stage of the cycle. </span></p>
<p><span>"For example, the latest ANZ-Property Council survey reports that lending standards in Q3 were the tightest since early 2012, back when the cash rate was 4.25." </span></p>
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jonathanchancellor-7SQnKwU6yx

Housing unexpectedly shows renewed strength: ANZ Research

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<p>GUEST OBSERVER</p>
<p>A weaker set of economic results. A modest slide in the number of dwelling approvals, and a substantial rise in the trade deficit. The only positives to be taken out of the data related to the rise in the value of building approvals. Overall there is nothing in the data to stop the Reserve Bank from cutting interest rates if they deem it necessary.  </p>
<p>The housing sector continues to bubble along at a healthy pace. Home prices remain resilient despite changes in regulation and tighter lending standards that have been adopted by the banking sector. Importantly the pipeline of new building will continue to support broader-based economic growth over the coming 12-18 months.  </p>
<p>Over the past year 233,246 new homes were approved, easing further from the record high 240,842 in the year to October 2015. The anticipated lift in housing supply should ensure a more balanced environment – in essence house price growth is likely to be more contained over the medium term.  </p>
<p><a href="/images/2016/08/02/Screen%20Shot%202016-08-02%20at%201.59.09%20PM.png" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/08/02/Screen%20Shot%202016-08-02%20at%201.59.09%20PM.png" alt=""></p>
<p>The housing sector isn’t the hotly contested issue it was a year ago, but still the Reserve Bank will keep a close eye on the sector, particularly in Sydney and Melbourne.</p>
<p>The trade accounts remain firmly in the red. Not only have the trade accounts been in deficit for over two consecutive years, but the 12-month rolling annual deficit came in at a sizeable $35.7 billion. However the trade data doesn’t have the impact on the currency that it once did.</p>
<p><a href="/images/2016/08/02/Screen%20Shot%202016-08-02%20at%202.00.10%20PM.png" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/08/02/Screen%20Shot%202016-08-02%20at%202.00.10%20PM.png" alt=""></p>
<p>What do the figures show?</p>
<p><br>Building Approvals:</p>
<p>Dwelling approvals fell by 2.9 per cent in June after falling by 5.4 per cent in May. In trend terms, approvals fell by 0.9 per cent in June.  <br>Over the past year 233,246 new homes were approved, easing further from the record high 240,842 in the year to October 2015.  <br>House approvals fell by 2.4 per cent in June after a 0.5 per cent rise in May (private sector fell by 2.3 per cent). Meanwhile ‘lumpy’ apartment approvals fell by 3.4 per cent in June after falling by 10.7 per cent in May. Private sector apartment approvals fell by 2.4 per cent in June.<br>Dwelling approvals in June were down 5.9 per cent on a year ago with house approvals down 5.5 per cent while apartments are down by 6.3 per cent.  </p>
<p>Across states and territories in June: NSW (-4 per cent); Victoria (+4.1 per cent); Queensland (-2.1 per cent); South Australia (-12.3 per cent); Western Australia (+2.4 per cent); Tasmania (-23.6 per cent). In trend terms, approvals rose by 3.6 per cent in the Northern Territory and by 2.8 per cent in the ACT.  </p>
<p>The value of all commercial and residential building approvals rose by 5.3 per cent in June after falling by 10.7 per cent in May. Residential approvals fell by 1.5 per cent with new building down by 1.2 per cent while alterations &amp; additions fell by 3.8 per cent. Commercial building rose by 20.8 per cent in June to be up 18.8 per cent on a year ago.  </p>
<p><a href="/images/2016/08/02/Screen%20Shot%202016-08-02%20at%202.01.10%20PM.png" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/08/02/Screen%20Shot%202016-08-02%20at%202.01.10%20PM.png" alt=""></p>
<p>International trade:</p>
<p>Australia’s trade deficit widened from $2.42 billion in May to $3.2 billion in June. It was the 27th consecutive  monthly deficit. The rolling 12-month deficit eased from $36.2 billion to a 7-month low of $35.7 billion.</p>
<p>In June, exports of goods and services fell by 0.8 per cent (goods down 1.1 per cent) while imports of goods and services rose by 2 per cent (goods up 2.6 per cent). Exports are down 0.9 per cent on a year ago, while imports are down by 2.3 per cent.  </p>
<p>Within imports, consumer imports rose by 7.4 per cent with capital goods imports up by 2.9 per cent while intermediate goods imports fell by 1.1 per cent.</p>
<p>Consumption goods imports are up 8.9 per cent on a year ago while capital goods imports are up 8.6 per cent and intermediate goods imports are down by 18 per cent. </p>
<p>Australia's annual exports to China stood at $80.1 billion in the year to June. Annual exports were down 1 per cent on a year ago. Exports to China accounted for 32.9 per cent of Australia's total exports.  </p>
<p>Australia's annual imports from China eased from $61.4 billion to $61.3 billion in the year to June, up 7.6 per cent on a year ago. Imports from China accounted for 23.3 per cent of Australia's total imports.  </p>
<p>Australia's rolling annual trade surplus with China held near recent 5-year lows. The annual trade surplus was $18.7 billion in June – but well down from the record high of $51.2 billion set in April 2014.  </p>
<p>Australia annual exports to the US eased from $13.3 billion to $13.2 billion in the year to June and down from a record high of $13.69 billion in the year to October 2015. The share of annual exports going to the US eased from a 7-year high of 5.5 per cent to 5.4 per cent.  </p>
<p>Australia’s annual exports to India eased further from the two-year high of $10.34 billion set in the year to December 2015 to $9.52 billion in the year to June.  </p>
<p><a href="/images/2016/08/02/Screen%20Shot%202016-08-02%20at%202.02.15%20PM.png" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/08/02/Screen%20Shot%202016-08-02%20at%202.02.15%20PM.png" alt=""></p>
<p>What is the importance of the economic data? </p>
<p>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.  </p>
<p>The monthly International Trade in Goods and Services release from the Bureau of Statistics provides estimates on exports and imports of physical goods (such as coal, beef and computers) and services (such as travel receipts). The balance of goods and services (BOGS) is a narrower description of Australia’s external position than the current account estimates. The import data is a useful gauge of consumer and business spending while exports reflect global demand as well as domestic influences such as drought.  </p>
<p>What are the implications for interest rates and investors?  </p>
<p>While new council approvals to build new homes appear to have peaked, activity levels are still healthy. But now investors and builders need to do more research to ensure that the projects they are interested in remain viable with competing projects. There is certainly potential for indigestion in certain towns and regions as new projects are completed and the stock is absorbed.</p>
<p><a href="/images/2016/08/02/Screen%20Shot%202016-08-02%20at%202.03.22%20PM.png" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/08/02/Screen%20Shot%202016-08-02%20at%202.03.22%20PM.png" alt=""></p>
<p>The Reserve Bank will closely monitor developments in China and financial markets more generally. Encouragingly the Reserve Bank has plenty of firepower to provide stimulus to the economy, especially given the low inflation environment.  </p>
<p><em>Savanth Sebastian is an economist for <a href="https://www.commsec.com.au/" target="_blank">CommSec</a></em></p>
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Weaker housing approvals, trade deficit blowout: CommSec's Savanth Sebastian

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<p>GUEST OBSERVER</p>
<p>Private building activity is set to soften in 2016 after strengthening in four of the past five years.</p>
<p>Approvals have long since declined, led lower by the office market, with recent activity levels sustained by reducing the work pipeline. We anticipate only a relatively modest moderation in private activity.</p>
<p>By contrast, public works - accounting for 20 percent of total activity - is beginning to recover, after the downturn of recent times. This will provide only a partial offset to weaker private sector activity.</p>
<p>Click to enlarge</p>
<p><img src="/images/2016/07/22/Screen%20Shot%202016-07-25%20at%208.14.53%20AM.png" alt=""></p>
<p>Activity: Real private building activity turned down in the March quarter, contracting by 6.7 percent to be 4.4 percent lower than a year ago. That follows a 31% expansion in the five years to December 2015, including a 7.8 percent increase in 2015.</p>
<p>Public works began to turn higher in the March quarter, advancing by 2.7 percent, to still be 11.7 percent lower than a year ago.</p>
<p><a href="/images/2016/07/25/Screen%20Shot%202016-07-25%20at%208.19.49%20AM.png" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/07/25/Screen%20Shot%202016-07-25%20at%208.19.49%20AM.png" alt=""></p>
<p>Total real building work contracted by almost 5% in the March quarter, to be almost 6% lower than a year, having been broadly flat in both 2014 and 2015.</p>
<p>Total commencements lifted to be above par in the March quarter, valued at $8.9bn, up from a 2015 average of $7.5bn and averages for the previous five calendar years ranging between $8.2bn and $8.4bn. That said, the March result is insufficient to prevent a near-term moderation in activity.</p>
<p>Private commencements moved broadly sideways in Q1, at $6.2bn, relative to $5.9bn on average for 2015, which is down from the three previous calendar years, ranging between $6.3bn and $6.9bn. Public commencements lifted in Q1 to $2.7bn, the strongest quarterly result in four years, and up from a 2015 average of $1.5bn. The result was boosted by health projects proceeding across Tasmania, NSW, South Australia and the ACT.</p>
<p>The pipeline of work outstanding has been significantly reduced since mid-2014, to be at $20bn, down from a peak of $27bn, as work progresses on major health projects and office buildings across the states. For private projects, the work pipeline at $13.9bn currently, down from $20.7bn, is approaching the lows of 2009 to 2011. For public projects, the pipeline has lifted to a still low $6.2bn, up from $4.7bn in mid-2015.</p>
<p>•As to the prospects for a near-term moderation in building activity, it is notable that private commencements are running 13% below the current level of work done, while for the sector as a whole, the figure is about 7 percent below.</p>
<p><a href="/images/2016/07/25/Screen%20Shot%202016-07-25%20at%208.25.44%20AM.png" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/07/25/Screen%20Shot%202016-07-25%20at%208.25.44%20AM.png" alt=""></p>
<p>Commencements and approvals</p>
<p>Commencements were above par in the opening quarter of 2016, coming in at $8.9bn, up from the 2015 average of $7.5bn. Strength was evident in public projects, at $2.7bn, up from a 2015 average of $1.5bn. Notably, a number of health projects commenced in the quarter, across Tasmania, South Australia, the ACT and NSW. Private commencements tracked broadly sideways in March 2016, at $6.2bn relative to a 2015 quarterly average of $5.69bn.</p>
<p>Notwithstanding the positive start to 2016, the broader trend remains that commencements and approvals have taken a step lower since the first half of 2014 - albeit a relatively modest one by historical standards.</p>
<p>As to the more timely building approvals, these have been broadly steady of late, but are down from earlier highs - see charts opposite. In the year to May 2016, total approvals increased by 2% relative to the year prior, leaving them 14 percent below the peak in the year to February 2014. For private sector projects, approvals are 15% below the peak of early 2014, including a 5 percent decline over the past year.</p>
<p>The office market is a key driver - but certainly not the only driver - of building approvals and building activity. Office approvals are characterised by large swings reflecting the long lead times for often large projects. Over the past decade, office approvals have moved through two cycles, with a pre-GFC peak in 2008 of $9bn and a post-GFC peak of almost $8bn in 2013, see chart opposite. Currently, office approvals are at cyclical lows, at $3.7bn, some $4bn, 50 percent, below earlier highs.</p>
<p>Total building approvals are only modestly below the highs of early 2014, in contrast to the sharp retreat in the office market. This divergence reflects a number of key trends, notably: strength and the growing importance of social building projects (which includes health, education, aged cared, accommodation and entertainment); the resilience of the retail sector, as competition for the consumer dollar intensifies; and a lift in public approvals during the past year, albeit from relatively low levels.</p>
<p><strong>State-by-state </strong></p>
<p>Conditions and the outlook are quite varied across the states. As at the national level, the importance of social building projects, a lift in public investment, and resilience in the retail sector together add nuances to the state-by-state picture not apparent from differences in office markets across the capital cities.</p>
<p>Real building work nationally declined by 6% over the past year, down $0.5bn, centred on a softening of activity in: Victoria (from a high base); South Australia; and WA - which more than offset a lift in Qld and Tasmania, while the cycle was cresting in NSW.</p>
<p>In the mining state of WA, building activity in 2016 has further downside, notwithstanding firmer approvals over the past couple of months. By contrast, conditions in Qld are likely to be reasonably resilient with retail and social approvals strengthening of late. In Victoria, where the work pipeline is now relatively low, much of the pull-back in activity has occurred. In NSW, a sizeable work pipeline will support activity near-term, ahead of a likely moderation - one that may be relatively mild if a round of new projects receive the go ahead. In South Australia and Tasmania, a lift in public investment will support activity going forward, particularly in Tasmania. </p>
<p> </p>
<p><span>Andrew Hanlan is senior economist for Westpac and can be contacted </span><a href="https://www.propertyobserver.com.au/https://au.linkedin.com/pub/andrew-hanlan/3/222/430" target="_blank">here</a><span>. </span></p>
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Modest downturn in non-residential building sector:  Andrew Hanlan

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<div id="post-body-4955982737537404109" class="post-body entry-content">
<div>Building Approvals declined by 5.2 percent in May to be 9.2 percent lower than a year ago in seasonally adjusted terms. </div>
<div> </div>
<div>Somewhat optimistically the "trend" result is still recording a rise, but it does appears that the peak of the building approvals boom has now passed. </div>
<br><div class="separator"><a href="/images/2016/07/05/BA4.jpg" target="_blank">Click to enlarge</a></div>
<div class="separator"><img src="/images/2016/07/05/BA4.jpg" alt=""></div>
<br><div>A couple of observations.</div>
<div> </div>
<div>Firstly, although this was clearly a weaker result than last month's bonanza - one which probably at last signifies the beginning of the end for this construction cycle - the hyperbole in reporting can get overblown.</div>
<div> </div>
<div>There were after all some 19,706 dwellings approved in May (in original terms) - down from a massive 20,612 in April - historically very high numbers, and higher than had ever been seen until the last quarter of 2014.</div>
<div> </div>
<div>Whether or not all of these dwellings all get built is another matter. </div>
<div> </div>
<div>In rolling annual terms total approvals fell to 233,900 down from a peak of 240,130 in October 2015, comprising of 117,300 houses and 116,600 units, townhouses and apartments. </div>
<br><div class="separator"><a href="/images/2016/07/05/BA5.jpg" target="_blank">Click to enlarge</a></div>
<div class="separator"><img src="/images/2016/07/05/BA5.jpg" alt=""></div>
<br><strong><span style="text-decoration: underline;">City by city</span></strong><br><br><div>At the capital city level, approvals in Melbourne have recorded four very strongly monthly readings in a row, taking annual detached house approvals for the Victorian capital up to a fresh cyclical high of 25,600 (a crunching 57 per cent more than Sydney over the same period). </div>
<div> </div>
<div>This chart is worth noting when folk talk about a so-called "oversupply" in Sydney - a lasting oversupply not quite so easy to achieve at the city level when you are building so few detached houses into romping population growth. </div>
<br><a href="/images/2016/07/05/BA3.jpg" target="_blank">Click to enlarge</a>
</div>
<div class="post-body entry-content">
<img src="/images/2016/07/05/BA3.jpg" alt=""><br><br><div>The monthly decline in approvals was driven by huge declines in attached approvals in Sydney (from 3,777 to 2,900) and especially Brisbane (2,500 to 1,062). </div>
<div> </div>
<div>That said, there were some sneaky upwards revisions totaling more than 1,800 additional dwellings to previously reported figures, and three quarter of these related to New South Wales and Queensland. </div>
<br><a href="/images/2016/07/05/BA2.jpg" target="_blank">Click to enlarge</a>
</div>
<div class="post-body entry-content">
<img src="/images/2016/07/05/BA2.jpg" alt=""><br><br><div>Overall, although it's a volatile data series it does look as though the unit and apartments approvals boom has passed its peak.</div>
<div> </div>
<div>Approvals in Western Australia have now been trending down since September 2014, which should help to bring the rental market back into equilibrium in due course. </div>
<br><strong><span style="text-decoration: underline;">High rise declines</span></strong><br><br><div>This cycle has been characterised by the approval of greater volumes of 4+ storey dwellings than ever before, with more than 70,300 approved over the past year alone - an astonishing 57 times more than we saw in 1992.  </div>
<br><div class="separator"><a href="/images/2016/07/05/BA6.jpg" target="_blank">Click to enlarge</a></div>
<div class="separator"><img src="/images/2016/07/05/BA6.jpg" alt=""></div>
<div> </div>
<div>The most recent data suggests that high approvals are starting to wane, though, especially in Victoria where a glut of high rise approvals was pulled forward into 2015.  </div>
<br><a href="/images/2016/07/05/BA1.jpg" target="_blank">Click to enlarge</a>
</div>
<div class="post-body entry-content">
<img src="/images/2016/07/05/BA1.jpg" alt=""><br><br><div><strong><span style="text-decoration: underline;">The wrap</span></strong></div>
<div> </div>
<div>Overall, another very strong result, but there are now multiple indicators suggesting that the peak of the construction cycle is all about upon us.</div>
<div> </div>
<div>One of these days we'll all be able to say we called it!</div>
<div> </div>
<div>All eyes will be on the Reserve Bank of Australia at 2.30pm, in particular to determine the wording of their policy statement.</div>
<div> </div>
<div>Will an easing bias be reinstated ahead of a possible August interest rate cut?</div>
<div> </div>
<div>
<p><span><em>PETE WARGENT is the co-founder of <a href="https://allenwargent.com/" target="_blank" rel="nofollow">AllenWargent</a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank" rel="nofollow">blogger</a>.</em><br></span></p>
<p><em>His latest book is <a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx" target="_blank" rel="nofollow">Four Green Houses and a Red Hotel</a>.</em></p>
</div>
<div> </div>
</div>
<div class="post-footer"> </div>
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pwargent-M4siyDbqQY

Approvals decline  for Sydney and Brisbane units: Pete Wargent

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<p>Building approvals in Tasmania are on a downward trend and lower than at same time last year according to Herron Todd White.</p>
<p>Herron todd White's latest market report for Tasmania who attributes market cooling to the decrease of the First Home Builders Boost (FHBB) grants, reduced from $20,000 on 31 December 2015 to $10,000 on 1 January 2016 for first home buyers or builders of new residential dwellings.</p>
<p>HTW said some land developers anticipated this cooling towards the end of 2015 and were attempting to bring forward demand with advertised incentives such as new cars and gift vouchers.</p>
<p>"Incentives were also extended to the building industry and are still being offered," the report said.</p>
<p>The residential property market continues to experience small annual increases in sales volumes across the state and in some areas, stock shortages have seen some capital growth in the major population centres.</p>
<p>"Statewide centrally located suburbs that contain a good range of facilities, larger infrastructure such as shopping centres, educational and health institutions and public transport tend to be popular with renters and purchasers alike and are viewed as having the best capital growth potential. </p>
<p>"Kingston, Howrah, Blackmans Bay, Glenorchy, New Norfolk and Sandy Bay are suburbs where the greatest sales volumes have occurred recently in the south, while in the north the suburbs of Riverside, Newstead and Newnham have experienced the greatest recent volumes of sales. In the north-west region, Devonport has seen the greatest number of sales."</p>
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Tasmanian home building approvals on a downward trend: Herron Todd White

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<p>GUEST OBSERVER</p>
<p>Construction work is trending lower from historic highs, led lower by the mining investment downturn.</p>
<p>With the sector accounting for 14 percent of the economy this is a material headwind.</p>
<p><span>Total construction work fell by 2.6 percent in Q1, broadly as we expected (Westpac f/c -2.2 percent and market median -1.5 percent).</span></p>
<p>Over the past year, construction activity is down by 6.7 percent.</p>
<p>In dollar terms, work fell by $1.3bn in the quarter, of which $1.2bn was due to a drop in private infrastructure activity. </p>
<p>The detail was also broadly as anticipated.</p>
<p>Private infrastructure work fell sharply, albeit not as rapidly as in Q4, as work on major mining projects nears completions.</p>
<p>Public infrastructure advanced for a 3rd consecutive quarter as work on key transport projects gets underway.</p>
<p>The new home building boom continues, although the rate of growth is moderating.</p>
<p>The private commercial building cycle has turned, consistent with the 20% drop in approvals over the past couple of years.</p>
<p><span>Details</span></p>
<p>Total construction                –2.6 percent<br><span>Private construction            –3.7 percent<br></span><span>Public construction             +2.5 percent</span></p>
<p><em>Private - by segment</em></p>
<p>Infrastructure                        –6.8 percent<br><span>Dwelling, new                      +1.5 percent<br></span><span>Dwelling renovations          +0.9 percent<br></span><span>Non-res. building                 –7.6 percent</span></p>
<p><em>Public - by segment</em></p>
<p>Infrastructure                        +2.2 percent<br><span>Building                                 +3.5 percent</span></p>
<p><span> </span></p>
<p><span><span>Andrew Hanlan is senior economist for Westpac and can be contacted </span><a href="https://www.propertyobserver.com.au/https://au.linkedin.com/pub/andrew-hanlan/3/222/430" target="_blank">here</a><span>. </span></span></p>
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Australian Q1 construction work down 2.6 percent: Westpac's Andrew Hanlan

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<div>Building Approvals data revealed the expected rebound in February after the seasonal lull in January, but the downtrend is clearly in place from the trend peak of 11 months ago.</div>
<p><a href="/images/2016/04/5/BA1.jpg" target="_blank">Click to enlarge</a></p>
<div class="separator"><img src="/images/2016/04/5/BA1.jpg" alt=""></div>
<div> </div>
<div>House approvals have rolled a little, but the tailing off is more likely to be seen in the units, apartments and townhouses sector following an impressive burst since 2012. </div>
<p><a href="/images/2016/04/5/BA2.jpg" target="_blank">Click to enlarge</a></p>
<div class="separator"><img src="/images/2016/04/5/BA2.jpg" alt=""></div>
<p><br><strong><span style="text-decoration: underline;">Capital city analysis</span></strong></p>
<div>House approvals are faading fast in Perth in reaction to elevated vacancy rates, while Melbourne continues to approve the greatest number of houses by some margin, and as such may be the city with the greatest potential for overbuilding. </div>
<div> </div>
<div><a href="/images/2016/04/5/BA4.jpg" target="_blank">Click to enlarge</a></div>
<div><img src="/images/2016/04/5/BA4.jpg" alt=""></div>
<div> </div>
<div>The last couple of months have been much slower for unit approvals in Sydney and Melbourne, which is now being reflected in the rolling annual figures below.<br><br>After nearly a decade of under-building Sydney is now approving a decent number of attached dwellings.</div>
<div> </div>
<div class="separator"><a href="/images/2016/04/5/BA3.jpg" target="_blank">Click to enlarge</a></div>
<div class="separator"><img src="/images/2016/04/5/BA3.jpg" alt=""></div>
<p><br><strong><span style="text-decoration: underline;">Dream over for high rise</span></strong><br><br></p>
<div>This record approvals boom for Australia has largely been driven by "high rise" or four plus storey unit blocks, but this part of the approvals boom has noticeably slowed over the past four months. </div>
<p><a href="/images/2016/04/5/BA5.jpg" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/04/5/BA5.jpg" alt=""></p>
<p> </p>
<div>Sydney, Melbourne and Brisbane have each gone hard at approvals in the high density sector over the past few years, but all three cities have now passed their respective peaks. </div>
<div> </div>
<div class="separator"><a href="/images/2016/04/5/BA6.jpg" target="_blank">Click to enlarge</a></div>
<div class="separator"><img src="/images/2016/04/5/BA6.jpg" alt=""></div>
<div> </div>
<div><strong><span style="text-decoration: underline;">The wrap</span></strong></div>
<div> </div>
<div>With APRA having insisted upon tigher lending criteria for investors building approvals will in all likelihood continue to slow from here, following a record run.<br><br>Even at this well advanced stage in the construction cycle vacancy rates have been tightening in inner Sydney to just 1.3 percent, but cracks are starting to show in some of the secondary and outer areas where vacancy rates are above 2 per cent (and in some pockets higher again). </div>
<div> </div>
<div>
<p><span><em>PETE WARGENT is the co-founder of <a href="https://allenwargent.com/" target="_blank" rel="nofollow">AllenWargent</a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank" rel="nofollow">blogger</a>.</em><br></span></p>
<p><em>His latest book is <a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx" target="_blank" rel="nofollow">Four Green Houses and a Red Hotel</a>.</em></p>
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Building approvals boom all over bar the grouting: Pete Wargent

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<p>GUEST OBSERVER</p>
<p>Australian economic data is mixed. </p>
<p><span style="line-height: 1.3em;">Building approvals rose a slightly greater than </span><span id="0.9384356588125229" class="highlight" style="line-height: 1.3em;">exp</span><span style="line-height: 1.3em;">ected 3.1 percent, thanks to a bounce in normally volatile apartment approvals. </span></p>
<p><span style="line-height: 1.3em;">However, this followed a 6.6 percent decline last month, they are down 9% year on year and the trend is clearly down. Building approvals are still high pointing to a continued high level of dwelling construction, but the clear downtrend indicates that the contribution of home building to economic growth over the year ahead will slow. This may also be exacerbated as wealth effects from housing slow as momentum in Sydney and Melbourne property prices cools down.</span></p>
<p><a href="/images/2016/04/5/image004.png" target="_blank">Click to enlarge</a></p>
<p><img src="/images/2016/04/5/image004.png" alt=""></p>
<p>Source: ABS, AMP Capital</p>
<p> </p>
<p>Retail sales were flat in February, contrary to market <span id="0.043868896551430225" class="highlight">exp</span>ectations for a 0.4 percent gain. Annual growth slowed to 3.3 percent yoy and momentum appears to have slowed although this may be partly due to very low retail price inflation compared to the past. The loss of momentum may also reflect the waning impact from last year’s interest rate cuts and slowing wealth gains from housing as house price gains slow in Sydney and Melbourne.</p>
<p>In terms of the latter while annual retail sales growth in NSW (at 4.6 percent year on year) and Victoria (+4.8 percent yoy) are strong and continuing to offset weakness in WA (where retail sales are -0.2%yoy) there has been some loss of trend monthly growth in both NSW and Victoria which are now trending at 0.2 percent mom compared to around 0.4-0.5 percent mom around mid last year.  </p>
<p>Click to enlarge</p>
<p><img src="/images/2016/04/5/image005.png" alt=""></p>
<p>Source: ABS, AMP Capital</p>
<p><span style="line-height: 1.3em;">ANZ job ads rose just 0.2 percent mom in March, after a 1.2 percent fall in February but with annual growth at 10 percent year on year they still point to solid jobs growth for now.</span></p>
<p>Finally the Melbourne Institute Inflation Gauge for March was flat and up just 1.7 percent yoy, with the trimmed mean similarly flat month on month and up just 1.6 percent year on year, telling us that inflationary pressures remained very weak in the March quarter.<span style="line-height: 1.3em;"> </span></p>
<p>While the RBA is likely to leave interest rates on hold at its April meeting, the slowing trend in building approvals, slowing momentum in retail sales and indications that March quarter inflation will be weak are consistent with our view that the RBA remains likely to cut interest rates again in the months ahead.</p>
<p><span style="line-height: 1.3em;">With mining investment continuing to fall and the contribution to growth from housing set to fade over the year ahead it’s critical that trade </span><span id="0.760392599971965" class="highlight" style="line-height: 1.3em;">exp</span><span style="line-height: 1.3em;">osed sectors like tourism, higher education and even manufacturing contribute to growth over the year ahead but the rise in the $A is a threat to this. The best way for the RBA to check this threat is to ramp up its jawboning to get the $A down again and to ultimately cut interest rates again in the months ahead.</span></p>
<p><em><span><a href="https://www.propertyobserver.com.au/https://plus.google.com/110172465327488162875?rel=author" target="_blank">SHANE OLIVER</a></span> is head of investment strategy and economics and chief economist at <a href="https://www.ampcapital.com.au/home" target="_blank">AMP Capital</a> and is responsible for AMP Capital's diversified investment funds.</em></p>
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Volatile apartment approvals drive dwelling stats: AMP Capital's Shane Oliver

<div>GUEST OBSERVER</div>

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<div>The Great Fire of London in 1666 destroyed a third of the city leaving more than 100,000 people homeless – and prompted King Charles II to issue a proclamation limiting future construction largely to brick and stone.</div>

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<div>For hundreds of years, modern building codes around the world reinforced the king’s approach, severely limiting the use of timber, particularly in multi-storey buildings, due to fear of fire.</div>

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<div>However, in recent years, there has been a resurgence of mid-rise timber buildings in Europe and North America. In the Canadian state of British Columbia, for example, a change to the building code in 2009 allowing for taller timber buildings has seen more than 330 building projects earmarked for construction in timber – and more than 80 projects completed or under construction.</div>

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<div>The resurgence has been enabled by a combination of growing awareness around the environmental and cost advantages of timber, and a willingness on the part of authorities to re-think the rules in the light of contemporary technology.</div>

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<div>At the time of the Great Fire, London did not have a fire brigade. Londoners, assisted by soldiers, had to fight the fire with buckets and fire hooks– and the most effective way to stop the spread of fire was to demolish houses and create a fire break.</div>

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<div>Today, not only do we have fire brigades, we also have automatic sprinkler systems, hose reels, portable fire extinguishers, smoke alarms, fire-protective grade plasterboard and cavity barriers, intumescent seals (door seals that expand in the event of fire to block smoke and hot gases)…</div>

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<div>This year, the Building Code of Australia 2016 will include a Deemed-to-Satisfy (DTS) approach for timber buildings of up to 25 metres in effective height – typically eight storeys – on the proviso that a raft of safety features such as those I’ve discussed are included. Mid-rise buildings constructed in&nbsp;fire-protected timber&nbsp;– combined with sprinkler systems – can provide fire safety standards that not only&nbsp;equal&nbsp;conventional alternatives, but&nbsp;exceed&nbsp;them.</div>

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<div>Modelling by EFT Consulting ahead of the code change suggests there would 83 per cent fewer fatalities and almost 70 per cent less property damage from fires in timber buildings conforming to the new DTS provisions, compared to conventional buildings – where no sprinklers are required.</div>

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<div>The new provisions require: timber walls be ‘sandwiched’ between layers of fire-protective grade plasterboard of the type used in high rise commercial buildings; fire hydrants, hose reels and portable fire extinguishers similar to those for conventional buildings; fire-resisting cavity barriers e.g. mineral wool; and a fire sprinkler system.</div>

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<div>The changes were approved by the Australian Building Codes Board technical committee that includes Engineers Australia, Australasian Fire and Emergency Service&nbsp;Authorities Council (state fire brigades), the Australian Institute of Architects, Master Builders Australia and the Housing Industry Association.</div>

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<div>Just as fear of fires can be easily addressed when you look at the facts, reassurance can also be offered on other genuinely-held concerns – and enable the property domestic building industry to achieve the cost savings associated with timber, which is estimated by&nbsp;AECOM&nbsp;at 10-20 per cent in an Australian setting, largely because of faster build times.</div>

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<div>Mid-rise timber buildings can be built on top of concrete ground floors, which, when combined with standard termite prevention measures such as barriers, traps and treatments, is sufficient to protect them; the designer of any mid-rise building – timber or not – needs to consider how to counteract a range of environmental hazards.</div>

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<div>Many people also don’t realise that mid-rise timber buildings are externally clad to protect them from water damage and extend their effective life well beyond the mandatory 50 years specified by authorities.</div>

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<div>Mid-rise timber apartment buildings offer domestic builders who are prepared to innovate and upskill their teams a wonderful opportunity to reach new markets on suburban sites which may not previously have been viable, to save on costs and to build in a much more environmentally friendly manner.</div>

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<div><em>Ric Sinclair is the Managing Director of Forest &amp; Wood Products Australia, an industry group which spearheaded a two-year consultation and research process ahead of the change to the Building Code of Australia.</em></div>


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