<p>Perth’s new apartment market recorded its strongest quarter of sales since Q4 2021, with 412 apartments sold in Q1 2026 and a record quarterly sold value of $537 million, according to Urbis’ latest Apartment Essentials results.</p>

<p>Urbis said the March quarter result reflects strong, highly product‑specific demand across both ends of the market, from more attainable projects delivering at scale, through to premium stock being absorbed by equity‑rich downsizers.&nbsp;</p>

<p>David Cresp, Partner at Urbis, said the key story in Perth is not demand, it is the market’s ability to convert demand into delivered housing.&nbsp;</p>

<p>“This is the strongest sales quarter since Q4 2021, and it reinforces that demand in Perth is real and it’s local,” David Cresp said. “But the task now is delivery, turning that demand into projects that can actually be built and completed.”&nbsp;</p>

<p>[smartcode_project:default project_id=110291 project_image_fid=302785]</p>

<h2>Affordable product leads, premium demand remains resilient</h2>

<p>Sales in Q1 were led by more affordable projects, with The Boulevard (SKS Group) recording 115 sales in the quarter, the presentation noting this is only the second time a single project has surpassed 100 quarterly sales. The project was able to offer more affordable housing product right next to a train station.&nbsp;</p>

<p>Palmyra West (Finbar) also delivered strong results with 28 sales in Q1, following 84 sales in Q4, with an average price of under $800,000, underscoring depth of demand for well‑located, attainable new stock.&nbsp;</p>

<p>At the premium end, Urbis said downsizer demand is continuing, with the results highlighting Romeo (Applecross, Finbar) recording 75 sales and reaching almost 50% sold in one quarter.</p>

<p>Jual (Shenton Park, Celsius Property) also posted a strong quarter with 28 sales, reaching 39% sold in one quarter.</p>

<p>Urbis noted that Perth apartment demand is not speculative, not investor‑led, and not uniform, describing it as localised, often equity‑driven and highly product‑specific, a pattern reflected in the polarisation between strong “attainable” performers and premium downsizer product.&nbsp;</p>

<p>[smartcode_project:default project_id=148957 project_image_fid=364102]</p>

<h2>Prices underpinned by costs, and the delivery risk is growing</h2>

<p>Urbis said pricing pressure is cost not demand‑driven: construction costs and delivery risk are now a central constraint, with the results noting build costs remain elevated and volatile, and that energy, fuel and labour uncertainty weigh on feasibility.</p>

<p>David Cresp said a growing challenge for private Build‑to‑Sell developers is simply securing a builder in the current environment.</p>

<p>“Developers are really feeling the pressure from a building market that was operating at capacity and securing a builder is challenging,” David Cresp said, adding that even where a builder can be secured, “trying to get to the price that makes the development financially viable is incredibly challenging in the current market.”&nbsp;</p>

<p>Urbis’ broader WA commentary also notes that industry remains at or above capacity with lot and housing creation, and that many builders are limiting new sales to manage stretched workforces and fixed‑price contract pressures, conditions that flow directly into apartment feasibility and delivery timing.</p>

<p>[smartcode_project:default project_id=108869 project_image_fid=317905]</p>

<h2>Supply: improving later, but still constrained, and Perth lags eastern benchmarks</h2>

<p>While near‑term supply remains constrained, Urbis’ forecast shows completions lifting “Supply is forecast to be back above 1,500 apartments per annum for the first time since 2019”, with 1,775 completions forecast for 2026, and volumes remaining above that level over the following years.&nbsp;</p>

<p>Looking further ahead, completions are forecast to reach 2,500 in 2028, with the report noting 32% of that total is social/affordable, reflecting the role of government‑supported delivery in rebuilding the pipeline.&nbsp;</p>

<p>However, Urbis said Perth remains behind comparable markets on pipeline scale. In a national comparison of projects under construction, the report shows under construction Perth Build‑to‑Sell (BTS) at 3,446 apartments versus the Gold Coast at 7,922. Mr Cresp said “The challenge for Perth is how to we grow the delivery pipeline”.</p>

<p>Urbis’ conclusion is that Perth’s market is increasingly defined by product discipline and delivery certainty, with the research identifying “delivery certainty is key” and calling out builder risk and procurement models as core success factors, alongside “timing and staging”.&nbsp;</p>


Joel Robinson

Perth apartment sales hit strongest pace since late 2021 as builder capacity tightens

<p><a href="https://www.apartments.com.au/developers/sammut-developments">Sammut Group</a> has secured development approval for its latest Brisbane apartment project, marking the Sydney developer’s next step in expanding its Queensland pipeline following the success of its debut Gold Coast development, Coast.</p>

<p>The approved project at <a href="https://www.apartments.com.au/new-apartments/44-glen-road-toowong-qld-4066">44 Glen Road, </a><a href="https://www.apartments.com.au/developments/toowong-qld-4066">Toowong</a> will deliver a 15-storey riverfront apartment building with 42 residences, significantly increasing the scale of the site’s previous approval for a smaller luxury scheme. Designed by Bureau^proberts, the development will comprise a mix of predominantly four-bedroom and two-bedroom apartments positioned to maximise Brisbane River and city views.</p>

<p>Sammut Director Julian Sammut said the group had been actively searching Brisbane for several years before identifying Toowong as the right fit.</p>

<p>“Brisbane was the right step for Sammut,” Sammut said.</p>

<p>“With the success of Coast we thought we should definitely look to do more in Queensland alone. We then pushed up to look at Brisbane. We've been looking for I'd say two to three years actually and it was hard to find the right location.”</p>

<p><img alt="Sammut makes Brisbane apartment play" data-entity-type="" data-entity-uuid="" src="https://res.cloudinary.com/dz9xllyip/image/fetch/f_auto,c_limit,w_1440,q_75/https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/field/image/Screenshot%202025-12-23%20at%203.27.14%E2%80%AFPM.png?VersionId=dYAVIL7qdcGA8ojvkslSrLjczXFejSSx" /></p>

<p>Sammut said suburbs including New Farm and Teneriffe were considered before the group ultimately focused on Toowong due to its strong downsizer demographic and limited supply of developable riverfront land.</p>

<p>The site was acquired off-market after what Sammut described as a lengthy negotiation and planning process, with the developer pursuing an uplift to the original approval.</p>

<p>“We are DA approved now which is very exciting,” Sammut said.</p>

<p>“We've had our change approval come through and we've obviously doubled the height, 15 storeys plus rooftop. We've got 42 amazing apartments that are going to be coming to market soon.”</p>

<p><img alt="Sammut makes Brisbane apartment play" data-entity-type="" data-entity-uuid="" src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,dpr_2.0,q_auto:good/https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202025-12-23%20at%203.27.26%E2%80%AFPM.png?VersionId=ohkRkY0dIZlqdfME2EZePsCQavRiBadE" /></p>

<p>Bureau^proberts said the design responds to Toowong’s evolving urban character, balancing contemporary apartment living with the area’s established residential identity.</p>

<p>“A place where traditional Queensland living has taken place for centuries; Toowong is seeing a shift of contemporary influence, commercial and retail hubs mixed with well-considered residential offerings – all the while maintaining its character and charm,” the architect noted in planning documents submitted to Brisbane City Council.</p>

<p>The architecture practice said the project’s form was shaped by its riverfront setting, flood considerations, neighbouring building scales, and view corridors.</p>

<p>“They said the mix of four and two-bedroom apartments capture the ‘fundamental qualities of Queenslander living,’ translated into the context of a contemporary subtropical building.”</p>

<p>The development sits just off Coronation Drive within walking distance of Toowong’s retail precinct and the upgraded Regatta ferry terminal, while also benefiting from proximity to the incoming green bridge connection to West End. Sammut said the accessibility and amenity offering were central to the site’s appeal.</p>

<p>The approval adds to growing residential activity along the Toowong riverfront, joining nearby projects including Consolidated Properties’ Monarch Residences and Spyre Group’s ARC Residences.</p>


Sammut secures approval for debut Brisbane apartment development in Toowong

<p>Developer Lanevick is heading back into Sydney’s apartment market after focusing more heavily on the luxury townhouse and terrace sector in recent years.</p>

<p>Lanevick, founded and directed by Steve Maroun, is expecting to receive approval in the coming months for a new apartment development in Gladesville, with the aim to launch it to the market later this year.</p>

<p>The 51-apartment project, designed by Studio Johnston, will comprise a mix of one-, two-, and three-bedroom apartments positioned toward the Hunters Hill downsizer market.</p>

<p>“Traditionally it’s been difficult for people in that market to downsize because there just hasn’t been the right product available,” Maroun said.</p>

<p>“We’re targeting buyers who might have 30 to 40 per cent of their house value sitting in the bank after downsizing.</p>

<p>“They still want good spacious entertaining areas, they still want quality design, but they also want flexibility and the ability to enjoy life a bit more after working hard for a long time.”</p>

<p>The project sits near Boronia Park and within close proximity to the Parramatta River foreshore, an area Maroun says offers more of a Hunters Hill lifestyle than a traditional apartment precinct.</p>

<p>“From a lifestyle perspective, it’s really more Hunters Hill than Gladesville,” Maroun said. “You’re close to the foreshore, close to parklands, and still connected back into the village precinct.”</p>

<p>From level four and above, apartments will capture water views&nbsp;toward Sydney Harbour. Communal amenity will include rooftop entertaining areas, wellness spaces, and a gym tailored toward owner-occupier buyers.</p>

<p>“We’ve really designed these apartments around that buyer coming from the Hunters Hill LGA and what they’re actually looking for in their next chapter.”</p>

<p>The proposed development has also been designed to respond to the changing character of the broader Gladesville town centre, where a growing number of mixed-use and residential proposals are expected to emerge over the coming years.</p>

<p>“Gladesville presented a rare opportunity to deliver a genuinely design-led residential project within an evolving lifestyle precinct, just moments from the growing Gladesville town centre, and we’ve approached the project with a strong focus on architecture, liveability and long-term community value,” Maroun said.</p>

<p>Maroun said Lanevick saw a first-mover advantage within the precinct as planning controls continue to evolve to accommodate greater housing density.</p>

<p>“We think there’s a real opportunity there that hasn’t really been serviced properly yet,” he said.</p>

<p>“There’s going to be a broader evolution of the whole Gladesville village precinct over time, particularly with more activation and mixed-use outcomes.”</p>

<p>The Venus Street proposal will include a commercial and retail component at ground level designed to contribute to that evolving streetscape activation.</p>

<p>“A big part of the thinking was how do you activate that area properly and create more vibrancy and amenity, which is what Hunters Hill has been looking for,” Maroun said.</p>

<p>Lanevick’s focus since 2020 has largely been on smaller-scale luxury townhouse and terrace developments. The developer recently completed Royale Randwick, also designed by Studio Johnston, where prices reached $3.65 million. The project was featured in the UDIA NSW 2026 Professional Development Prospectus and was also named a finalist for Development of the Year.</p>

<p>&nbsp;</p>


Lanevick to cater for Hunters Hill downsizers with new Gladesville apartment development

<p>Property developer One Living, backed by former Macquarie banker turned investment manager Chris Green’s investment firm, has unveiled plans to bring more institutional capital into housing to help address the national supply crisis.</p>

<p>The New York-based investor has focused his firm, GreenPoint Partners, on addressing the supply shortage hitting middle market housing in Australia.</p>

<p>It is backing the new One Living business to develop more than 1000 units along the eastern seaboard. The new firm is starting with a development on Mona Vale Road, on the border of Mona Vale and Pymble, in Sydney’s Northern Beaches, with around 140 apartments planned. They are eyeing off more sites across the city.</p>

<p>With cost pressures rising in the industry, One Living’s model is to be a vertically integrated developer-builder, so it can respond directly to the housing gap by removing the cost inefficiencies embedded in traditional residential delivery.</p>

<p>“We are building a platform designed to operate at scale and starting in a market where there’s a clear need for quality, attainable housing,” One Living joint managing director Joseph Scuderi said.</p>

<p>“It’s that missing middle – it’s that attainable end of housing… that’s what most Australians invest into and what Australians can actually afford.”</p>

<p><img alt="Mona Vale" data-entity-type="file" data-entity-uuid="798dfa93-4941-4db6-a696-31e9dc18e81c" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%202.31.50%E2%80%AFPM.png?VersionId=mKBqi5C_DmeiXS.AtJkcR8LQIxqCqmFi" /></p>

<p>GreenPoint Partners brings years of experience assembling and scaling real estate operating businesses across major markets. And Green sees a big opportunity in Australia.</p>

<p>“For its size, sophistication and importance to the community, Australia’s living sector has remained largely under-institutionalised, which represents significant opportunity,” Green said. “GreenPoint identified that gap, assembled the right team, and is backing One Living to build a platform that is aligned to market needs.”</p>

<p>Green said being a builder-developer would give the company the capacity and flexibility it required to deliver reasonably-priced homes.</p>

<p>“We want it to be at that attainable level; not super high end luxury but at that attainable level,” he said.</p>

<p><img alt="Mona Vale" data-entity-type="file" data-entity-uuid="74a5344a-4b26-4d4a-ada3-056b1220be77" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%202.32.15%E2%80%AFPM.png?VersionId=vY8hXHO4reBMdO8ZXMWCNtGZJofUPQ3j" /></p>

<p>&nbsp;</p>

<p>One Living will undertake a component of affordable housing in its schemes, which it will own and operate, and it could also run build-to-rent on some sites.</p>

<p>Green praised local policy settings.</p>

<p>“The NSW government is being very supportive, strategic and pragmatic in terms of how do we generate more supply of housing,” he said. “We think it’s actually positive for development and the bit that’s been lacking at that attainable level is that it’s lots of relatively small private developers, whereas we want to create an institutional platform.”</p>

<p>One Living is also&nbsp;looking at high-density projects and could take on more institutional funding in the future.</p>

<p>“The way we will be able to achieve economies of scale is through size,” Green added.</p>


One Living enters Sydney's new apartment market with Northern Beaches site acquisition

<p>It's been several years since there's been an opportunity to buy a brand new townhome in Melbourne's coastal suburb of Mordialloc. Even apartment developments in recent times have been few and far between in the area.</p>

<p>Local developer LDS Property identified the gap in new housing, securing a site on White Street, directly opposite&nbsp;Woodlands Golf Club Mordialloc. They've recently launched&nbsp;<a href="https://www.apartments.com.au/new-townhouses/wm-residences-mordialloc-102-white-street-mordialloc-vic-3195">WM Residences</a>, just 13 townhouses which they have already started building.</p>

<p>Projects by Buxton Director Heath Thompson, who is selling WM Residences, says the townhouses x that perfect middle ground be</p>

<p data-end="683" data-start="511">"Mordialloc residents have had limited options to downsize within the suburb, often forcing them to look elsewhere despite long-standing ties to the area," Thompson says.</p>

<p data-end="882" data-start="690">"With very little comparable new supply coming to market, projects like WM Residences are well placed, particularly as buyers look to capitalise on current conditions amid constrained supply."</p>

<p data-end="882" data-start="690">[smartcode_project:default project_id=134646 project_image_fid=6109]</p>

<p>The development, designed by regarded architecture firm&nbsp;<a href="https://www.apartments.com.au/architects/ewert-leaf">Ewert Leaf</a>,&nbsp;adopts a deliberately restrained architectural approach, focusing on simplicity, durability and liveability rather than overt design gestures.</p>

<p>The boutique scale is central to the offering. With only 13 three-bedroom residences, each home is configured to prioritise functional layouts and everyday use, supported by private terraces and secure two-car garages.</p>

<p>Ewert Leaf’s design response leans into a calm, neutral material palette. Interiors are defined by oak flooring, white walls and soft finishes, creating a consistent and understated backdrop. The approach avoids trend-driven detailing in favour of longevity, with an emphasis on natural light and spatial clarity.</p>

<p>[smartcode_project:default project_id=134646 project_image_fid=6110]</p>

<p>Beyond aesthetics, the homes are designed to meet contemporary performance expectations. Each residence targets a minimum 6-star energy rating, incorporating double glazing, comprehensive insulation and all-electric Bosch appliances.</p>

<p>The project’s location supports a walkable coastal lifestyle, sitting within close proximity to Mordialloc’s foreshore, Main Street retail strip and the train station. Local cafés and dining venues, including Suburbia Deli and Hendriks Café, are within a short walk, reinforcing the area’s established neighbourhood character.</p>

<p>[smartcode_project:default project_id=134646 project_image_fid=6116]</p>

<p data-end="247" data-is-last-node="" data-is-only-node="" data-start="0">While <a href="https://www.apartments.com.au/developments/mordialloc-vic-3195">Mordialloc</a> is often defined by its beach and pier, the project taps into other areas of day to day living, offering easy access to local food, casual dining and transport, rather than positioning itself purely as a lifestyle retreat.</p>

<p>WM Residences reflects a continued trend across Melbourne’s coastal suburbs towards smaller-scale, design-led townhouse developments, particularly on infill sites where proximity to amenity is already established.</p>

<p>With construction commenced prior to its market entry, the project aligns with a growing preference among buyers for developments with visible progress and defined delivery timeframes.</p>

<p>[smartcode_project_cta:default project_id=134646]</p>


WM Residences fills gap in Mordialloc townhouse market

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>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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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>
</div>
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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>

<div>&nbsp;</div>

<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>

<div>&nbsp;</div>

<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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