<p>The new <a href="https://www.apartments.com.au/new-apartments/yarraville-green-42-stephen-street-yarraville-vic-3013">Yarraville Green</a> development in Melbourne's inner west is showing that landscaping can be just as influential as architecture, with buyers responding strongly to the garden-first approach adopted from the outset by developer Excelon Projects and the project's design team.</p>

<p>Excelon appointed Six Degrees Architects and landscape architects SBLA to work collaboratively on the development, with a brief to create "a sustainable, design-led building with a focus on community."</p>

<p>That approach has resonated with buyers. According to Next Chapter Director Tom Hirini, who is leading the sales campaign, the landscaped communal garden has become one of the project's defining features, alongside its boutique scale and European-inspired cluster housing concept.</p>

<p>Local downsizers, right-sizers and established families already living in Yarraville and surrounding suburbs have accounted for the majority of purchasers.</p>

<p>[smartcode_project:default project_id=144913 project_image_fid=297740]</p>

<p>Yarraville Green will comprise 53 homes, including apartments and townhomes, arranged around the shared central garden to maximise connections to the landscaped open space. Parking has been moved underground, allowing the ground plane to be dedicated to greenery, pedestrian movement and communal spaces.</p>

<p>The landscape extends well beyond passive planting. Productive garden beds, a pergola, communal gathering spaces, garden sheds and a pet wash have all been integrated into the masterplan, creating spaces designed to encourage everyday interaction between residents.</p>

<p>[smartcode_project:default project_id=144913 project_image_fid=297741]</p>

<p>The interiors continue Excelon's focus on craftsmanship, incorporating bespoke elements by Melbourne artisans including leadlight detailing by Adadaz, hand-turned timber hardware by Auburn Woodturning and blown-glass lighting by Ruth Allen.</p>

<p>Sustainability has also been embedded throughout the project, with Yarraville Green targeting an average 7-star NatHERS energy rating through passive design principles, rooftop solar servicing common areas and rainwater harvesting for landscape irrigation.</p>

<p>[smartcode_project:default project_id=144913 project_image_fid=297735]</p>

<p>Construction continues to progress at Yarraville Green, with structural works well underway and framing works approaching completion under builder Balmain &amp; Co. The project remains on track for completion in mid-2027.</p>

<p>Apartments at Yarraville Green are currently priced from $625,000, while townhomes start from $1.4 million.</p>

<p>[smartcode_project_cta:default project_id=144913]</p>


Joel Robinson

Garden-led design drives buyer demand at Yarraville Green

<p>National diversified developer Fortis has officially launched Crest &amp; Walker, its latest Brisbane apartment development, with construction now underway on the 20-storey Newstead project.</p>

<p>Award-winning builder BINAH has commenced construction on the Bureau^Proberts-designed building, which will deliver a limited collection of 65 two and three-bedroom apartments on Kyabra Street.</p>

<p>[smartcode_project:default project_id=145922 project_image_fid=373556]</p>

<p>The project marks Fortis' fourth active residential development in Brisbane, following River House, which is nearing completion, alongside projects in New Farm and Hamilton as the national developer continues to expand its South East Queensland pipeline.</p>

<p>Fortis General Manager – Development Queensland Dan Boman said Crest &amp; Walker reflects the developer's long-term commitment to delivering design-led residential projects in Brisbane's established inner-city suburbs.</p>

<p>"We're proud to be strengthening our presence in Brisbane with Crest &amp; Walker, particularly in such a sought-after lifestyle destination as Newstead," Boman said.</p>

<p>"Every Fortis project is shaped by its context, and we approach each one with the respect and care it deserves.</p>

<p>"Our focus is always on creating places that feel connected to their neighbourhood and elevate the everyday experience for residents. Newstead continues to evolve as one of Brisbane's most sought-after urban communities, and Crest &amp; Walker reflects our ambition to contribute meaningfully to that story."</p>

<p>[smartcode_project:default project_id=145922 project_image_fid=373559]</p>

<p>Positioned between Gasworks Plaza and James Street, <a href="https://www.apartments.com.au/new-apartments/crest-walker-newstead-12-kyabra-street-newstead-qld-4006">Crest &amp; Walker</a> has been designed as a boutique residential address offering privacy and generous living spaces within one of Brisbane's most established lifestyle precincts.</p>

<p>The building features a contemporary brick podium softened by integrated landscaping, while the upper levels are characterised by restrained architecture and enduring materiality. Interiors have been designed to maximise natural light, acoustic performance and long-term liveability.</p>

<p>[smartcode_project:default project_id=145922 project_image_fid=373583]</p>

<p>Residences comprise spacious two and three-bedroom floorplans, with two-bedroom apartments priced from $1.55 million and three-bedroom, half-floor residences from $3.95 million.</p>

<p>Residents will have access to a wellness-focused rooftop featuring a swimming pool, sauna, steam room, landscaped dining spaces and outdoor lounge areas overlooking Newstead and the Brisbane CBD.</p>

<p>[smartcode_project:default project_id=145922 project_image_fid=373571]</p>

<p>Sales are being managed by Slaite Projects, with Fortis expecting strong demand from owner-occupiers seeking a high-quality, design-focused apartment in one of Brisbane's most tightly held inner-city suburbs.</p>

<p>Completion of Crest &amp; Walker is slated for late 2028.</p>

<p>[smartcode_project_cta:default project_id=145922]</p>


Fortis expands Brisbane pipeline with launch of Crest & Walker in Newstead

<p>The enormity of delivering a true skyscraper in Australia's new development market is often overlooked.</p>

<p>It has taken the best part of a decade since plans for Chevron One were first unveiled, but the 41-storey tower is now complete, with residents collecting their keys and moving into what has become one of the Gold Coast's most recognisable new landmarks.</p>

<p>Rising 127 metres above Chevron Island, Chevron One stands almost twice as high as any other building on the island. Its scale places it alongside the trio of towers at Jewel, arguably the last truly significant addition to the central Gold Coast skyline when they were completed around six years ago.</p>

<p>While there are several developments underway around a similar height to Chevron One, they are more concentrated within clusters of the highest towers in the city. The fact Chevron One sits within a developing precinct, looking back at the other high-rise developments in Surfers Paradise and Broadbeach, makes it a different proposition altogether. It will certainly become a reference point on the Gold Coast skyline.</p>

<p>[smartcode_project:default project_id=6515 project_image_fid=68833]</p>

<p>Developer Bensons Property Group is behind the 41-storey tower, which has 229 apartments, along with an exhaustive list of resident amenity spread across what is the largest development site ever assembled on Chevron Island.</p>

<p>The tower has been the talk of the town for years, says Ray White Projects Gold Coast agent Caitlin Rosenboom, who is selling the remaining apartments.</p>

<p>"People have been watching Chevron One go up for years," Rosenboom says, adding that many prospective buyers have been surprised by the scale of the views once they step inside.</p>

<p>"It's only when they walk through a completed apartment that they truly understand the position of the building," Rosenboom says.</p>

<p>"The views are jaw-dropping. Whether you're looking east over the ocean, across Surfers Paradise, along the river systems or out to the hinterland, every level offers something different but equally impressive."</p>

<p>[smartcode_project:default project_id=6515 project_image_fid=360215]</p>

<p>One of Chevron One's defining advantages is its location on the eastern side of Chevron Island on Stanhill Drive, a position which protects the views forever.</p>

<p>"There's only one row of houses between Chevron One and the water, and the height restrictions along the river means views from Chevron One can never be built out,"&nbsp;Rosenboom says.</p>

<p>While new apartment developments continue to emerge across the Gold Coast, Rosenboom says opportunities to secure a completed apartment with this level of outlook are becoming increasingly rare.</p>

<p>"The size of the site is something that would be incredibly difficult to replicate today," she says.</p>

<p>"That's allowed Chevron One to deliver the sort of amenity, open space and resident facilities that very few projects can offer. There are not many completed apartment buildings on the Gold Coast right now that can compete with the combination of scale, quality and amenity."</p>

<p>[smartcode_project:default project_id=6515 project_image_fid=68839]</p>

<p>There's around 2,000 sqm of amenity solely for the use of residents of Chevron One. Club One features a uniquely shaped swimming pool that mirrors the footprint of the building itself, set within a extensively landscaped gardens. There's also an indoor pool and spa, a fully equipped gym with a Pilates room, a yoga garden, a bookable private dining area and lounge that can host up to 30 people, and a 24-hour concierge service.</p>

<p>As for the buyers, Rosenboom is fielding enquiry from everywhere: Sydneysiders and Melburnians looking at the new and off-the-plan market following the changes in the Federal Budget, as well as those looking to relocate, through to South East Queenslanders seeking either a permanent home or a weekender bolthole.</p>

<p>"The Gold Coast lifestyle continues to resonate with people relocating from the southern states, and when they see the views and the quality of what's been delivered at Chevron One, it becomes very easy for them to understand the appeal," Rosenboom says.</p>

<p>A diverse mix of one, two and three-bedroom apartments remain available, with each offering "something a little different", be it the orientation and views, configuration, or level, to suit a wide variety of buyers.</p>

<p>The remaining apartments are ready to inspect in person, by appointment.</p>

<p>[smartcode_project_cta:default project_id=6515]</p>


A decade in the making: Residents to move into Chevron One as construction wraps up

<p>A general rule of thumb in new apartment developments is that the penthouses get the rooftop.</p>

<p>It's a formula that's become commonplace across Australia's apartment market. Residents might have access to a pool, gym or barbecue facilities on a dedicated lower level, but the most desirable outdoor spaces are typically reserved for the highest-priced homes at the top of the building.</p>

<p><a href="https://www.apartments.com.au/developers/sherpa-property-group">Sherpa Property Group</a> has taken the opposite approach.</p>

<p>Rather than dedicating the rooftop to a handful of buyers, the Gold Coast developer has made it the centrepiece of its Flourish collection, creating expansive shared spaces from the best vantage point in the building.</p>

<p>The philosophy has reached its most ambitious expression at <a href="https://www.apartments.com.au/new-apartments/flourish-soleira-palm-beach-1150-1160-gold-coast-highway-palm-beach-qld-4221">Flourish Soleira</a> in Palm Beach, where two rooftop precincts connected by a skybridge will deliver one of the most extensive lifestyle offerings seen in a residential apartment project on the Gold Coast.</p>

<p>[smartcode_project:default project_id=150017 project_image_fid=374053]</p>

<p>"We're seeing a clear move toward developments that offer more than just an apartment," Sherpa Group founder Christie Leet said.</p>

<p>"People want spaces that support how they actually live, whether that's working from home, staying active, or spending time with family and friends.</p>

<p>"That's where amenity becomes critical. It's not just about what's included, but how those spaces are designed to be used every day."</p>

<p>[smartcode_project:default project_id=150017 project_image_fid=374052]</p>

<p>The breadth of amenity has already attracted buyers across multiple demographics. Younger first home buyers have been drawn to Soleira's one-bedroom apartments, a product rarely delivered in Palm Beach, while families have responded to practical inclusions such as the shallow children's pool adjoining the main lap pool and the extensive communal recreation areas.</p>

<p>Instead of a single rooftop, Soleira delivers two distinct lifestyle zones.</p>

<p>[smartcode_project:default project_id=150017 project_image_fid=372547]</p>

<p>The southern rooftop has been dedicated to wellness, featuring a gym, yoga and Pilates studio, work-from-home facilities, a wellness centre, spa, and hot and cold plunge pools.</p>

<p>The northern rooftop focuses on recreation and entertaining, incorporating a heated resort-style pool, private dining rooms, pizza ovens, barbecues, a golf simulator, children's recreation areas, and what is expected to be the Gold Coast's first rooftop basketball court, which will also double as a squash court.</p>

<p>[smartcode_project:default project_id=150017 project_image_fid=374054]</p>

<p>Beyond the rooftops, Soleira will introduce 1,500 sqm of curated retail beneath the towers, creating one of Palm Beach's first genuinely mixed-use lifestyle precincts where cafés, restaurants and convenience retail become part of residents' everyday lives.</p>

<p>Sherpa has also retained management rights across the development, allowing it to oversee the long-term operation of the building through a 24-hour concierge model. The developer is also exploring additional revenue streams within the precinct aimed at helping offset ongoing body corporate costs for residents.</p>

<p>[smartcode_project:default project_id=150017 project_image_fid=370962]</p>

<p>While Soleira is the largest project Sherpa has delivered, the rooftop-first philosophy has been evolving for several years.</p>

<p>It began with <a href="https://www.apartments.com.au/new-apartments/amargo-6-12-sixth-avenue-palm-beach-qld-4221">Flourish Amargo</a>, the first project released under the Flourish brand. Rather than competing at the ultra-luxury end of the market with oversized half-floor and full-floor residences, Sherpa focused on creating lifestyle-driven apartments supported by resort-style shared spaces.</p>

<p>Amargo introduced more than 800 sqm of rooftop amenity, combining wellness facilities, heated pools, entertaining areas, cabanas, pizza ovens and private dining spaces into what was designed as an extension of residents' homes rather than a facility used only occasionally.</p>

<p>[smartcode_project:default project_id=146527 project_image_fid=366550]</p>

<p>That approach continued with Flourish Oasis, where the same amenity-led philosophy was refined into a more boutique development. Strong demand from Sherpa's growing VIP database saw much of the project sold before it reached the broader market, reinforcing buyer appetite for apartment communities centred around shared lifestyle experiences.</p>

<p>Flourish Amargo is slated for completion mid-way-through next year, with Oasis to be delivered by late 2027. Flourish Soleira is expected to complete in 2030.</p>

<p>[smartcode_project_cta:default project_id=150017]</p>


Sherpa takes amenity to the sky as Flourish Soleira captures booming Palm Beach demand

<p>As apartment living continues to evolve across Sydney's growth corridors, the quality and distribution of shared spaces is increasingly shaping how residents experience home. Rather than functioning as add-ons, amenities are being embedded into the daily rhythm of a building, supporting everything from quiet retreat to social interaction, often within a single vertical community.</p>

<p>At <a href="https://www.apartments.com.au/new-apartments/aeris-melrose-park-nursery-street-melrose-park-nsw-2114">Aeris</a> in Melrose Park, this approach is resolved through a layered amenity offering that unfolds from ground level through to its upper podium. Developed by <a href="https://www.apartments.com.au/developers/sekisui-house-australia">Sekisui House Australia</a> in partnership with Hankyu Hanshin Properties, the project introduces 468 apartments across two towers and a mid-rise building, positioned at the highest point of the broader masterplan.</p>

<p>[smartcode_project:default project_id=426 project_image_fid=359199]</p>

<p>The amenity experience begins at street level, where two courtyards sit within a landscaped setting that connects residents to the wider network of parks and green spaces. These green spaces are not isolated pockets but part of a wider pedestrian network that links Aeris to the surrounding <a href="https://www.apartments.com.au/developments/melrose-park-nsw-2114">Melrose Park</a> precinct, including Central Park, future schools, and the Town Centre opening in July 2026. The result is a transition that moves from public to private without abrupt boundaries, allowing residents to pass through shaded, tree-lined environments before reaching the building itself.</p>

<p>Moving upward, the focus shifts to the level five podium, where the primary communal facilities are concentrated. This space brings together a 16-metre swimming pool, outdoor seating areas, and a communal BBQ zone arranged to take advantage of elevated outlooks. Seating is positioned beneath pergolas, creating pockets of shade that extend the usability of the space throughout the day. The pool edge aligns with views toward the wider district, reinforcing the sense of elevation that defines the project’s positioning.</p>

<p>In the adjacent building, this is complemented by quieter, more contemplative spaces, including an outdoor cinema set within the same level. Positioned to operate primarily in the evening, it introduces a different tempo to the shared environment, shifting from daytime activity to after-hours use without requiring separate zones.</p>

<p>[smartcode_project:default project_id=426 project_image_fid=360299]</p>

<p>The podium also accommodates an intimate private resident gym. Located on the lower levels, it gives residents convenient access to fitness facilities without leaving the building.</p>

<p>Above, the elevated podium sky deck extends the amenity offering, providing additional open-air spaces with elevated outlooks across the surrounding landscape. While more restrained in program, this upper level reinforces the project’s vertical progression, from ground-level greenery to elevated outlook, allowing residents to move between distinct spatial conditions within a single address.</p>

<p>This distribution of amenities reflects a deliberate response to how residents use space across the day. Sekisui House Australia Sales and Marketing Director Peter Kalaf points to the role these shared areas play in shaping buyer demand. Aeris has been conceived as more than a collection of apartments, with the podium pool, gym and outdoor cinema forming part of a broader lifestyle offering that extends the home beyond each individual residence.</p>

<p>[smartcode_project:default project_id=426 project_image_fid=360300]</p>

<p>What distinguishes Aeris is not the inclusion of these elements individually, but how they are arranged in relation to one another. Active, social, and passive spaces are layered vertically rather than separated, allowing residents to choose between them without leaving the building or moving far from their apartment. This proximity supports both routine use, such as a morning swim or evening workout, and more occasional gatherings, whether around the BBQ area or within the cinema setting.</p>

<p>The amenity design also sits within a broader framework of connectivity across Melrose Park. The Melrose Park Town Centre, anchored by Coles and Dan Murphys, features a mix of retail, dining, health and lifestyle offerings, bringing everyday convenience closer to residents. By the end of the year, more than five hectares of parks and open space, equivalent to around seven football fields of green space on residents' doorstep, will further enhance the precinct, allowing the internal facilities at Aeris to operate as an extension of the wider neighbourhood rather than a substitute for it.</p>

<p>Construction at Aeris continues to gather momentum, with ground floor slabs expected to be completed in late 2026 before the first sections of the buildings begin to rise above ground.</p>

<p>[smartcode_project_cta:default project_id=426]</p>


Elevated amenity anchors daily life at Aeris, Melrose Park

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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