<a href="https://www.apartments.com.au/developers/skymark-group">Skymark</a>'s boutique Cronulla development Solis has secured a 10-year Latent Defects Insurance policy through Resilience Insurance, providing buyers of the 16-residence building on Ewos Parade with structural and waterproofing protection that extends a decade beyond the building's completion.

Currently under construction and due for completion in late 2027, <a href="https://www.apartments.com.au/new-apartments/solis-cronulla-8-ewos-parade-cronulla-nsw-2230">Solis</a> is one of a small number of new developments in the Sutherland Shire to carry Resilience LDI coverage, a distinction that carries increasing weight as buyer confidence in the off-the-plan sector continues to be shaped by how developers stand behind their product.

Latent Defects Insurance, which entered the Australian market in 2022 when Resilience Insurance was approved to offer the cover, protects buyers against major structural or waterproofing defects for ten years post-completion. Unlike traditional statutory warranties, it operates as a first-resort policy, if a covered defect arises, the insurer responds directly, without the buyer needing to pursue the builder or developer through a lengthy claims process.

Resilience Insurance CEO Corey Nugent has noted that the product addresses something fundamental to the new apartment market.

"The overarching feedback from prospective buyers in the new development space is that they want more confidence and assurances around the quality of the build," Nugent says.

"Resilience Insurance Latent Defects Insurance not only gives them complete peace of mind for 10 years, but it shows the developer they are buying from is standing by their product."

[smartcode_project:default project_id=150499 project_image_fid=370898]

For Solis, the Resilience LDI policy adds a meaningful layer of accountability to an already considered project. The development comprises nine two-bedroom and seven three-bedroom residences, including one dual-level three-bedroom apartment, across a five-storey building on Ewos Parade, positioned between Shelly Beach and South Cronulla.

Garden apartments connect directly to private landscaped courtyards, while upper-level homes capture beach views to the east from level four and above.&nbsp;

All 16 residences include at least one balcony or courtyard, and select apartments on the upper floors feature bar areas and secondary flexible living spaces.

Hiba Sander, Managing Director of Skymark, says Solis offers a rare balance, nestled between the quiet beauty of secluded beaches and the lively charm of South Cronulla's esplanade.

"It's a place to choose your pace and live gracefully, seaside'," Sander says.

[smartcode_project:default project_id=150499 project_image_fid=370900]

The architecture, designed by <a href="https://www.apartments.com.au/architects/ida-design-group">IDA Design Group</a>'s Michael Trinh, draws from the natural erosion patterns of <a href="https://www.apartments.com.au/developments/cronulla-nsw-2230">Cronulla</a>'s sandstone headlands, translating the organic forms of the coastline into soft curves, pavilion-style massing, and a material palette chosen for longevity in a salt-tinged environment.&nbsp;

Textured natural stone, soft renders, and timber-look battens reference the tones of the surrounding cliffs, while the building has been oriented to maximise natural light and passive ventilation, with primary living spaces facing north and east to capture morning sun and sea breezes.

"At Solis, our aim was to create architecture that feels quietly confident, grounded in natural materials like stone and timber, and elevated by light and landscape," Trinh says.&nbsp;

"The buildings are designed to sit gently within their coastal surrounds, with expansive glazing and abundant greenery creating a seamless dialogue between inside and out."

[smartcode_project:default project_id=150499 project_image_fid=370897]

Interiors by <a href="https://www.apartments.com.au/architects/hot-black">Hot Black</a> carry the same material language through to every room. Kitchens feature integrated Gaggenau appliances, sculpted stone benchtops, and Lo &amp; Co joinery, while bathrooms feature natural stone, timber, and brushed metal finishes.&nbsp;

Hot Black Founder and Design Director Sophie Safrin describes the intent as one of considered restraint: "At Solis, every detail has been thoughtfully considered to create a timeless coastal retreat, calm, refined, and effortlessly liveable. From natural finishes to seamless indoor-outdoor flow, Solis offers a quiet elegance that's deeply connected to its surroundings.

The landscape, designed by Julian Brady of <a href="https://www.apartments.com.au/landscape-architect/sitedesignstudios">Site Design Studios</a>, treats green space as an integral part of the resident experience rather than an afterthought.&nbsp;

"Gentle curves and layered native plantings mirror the ebb and flow of the ocean," Julian Brady says, "creating a serene connection between architecture and place."&nbsp;

Coco Republic has provided bespoke furniture packages tailored to the project's coastal palette.

[smartcode_project:default project_id=150499 project_image_fid=370899]

Skymark has an established track record in the Sutherland Shire, with a portfolio spanning Cronulla, Woolooware and Burraneer that includes Isla, Sylva, Bask, Shells, Sula and Mist. Securing LDI on Solis reflects a broader shift in how the developer is positioning its buildings to buyers, at a time when Resilience Insurance expects the policy to become mandatory in New South Wales by 2028.

Sales at Solis are launching soon through Ray White Projects, with an official event scheduled for 11 June. Enquire for more information.

[smartcode_project_cta:default project_id=150499]

Joel Robinson

Skymark takes out 10-year Resilience Insurance LDI at Solis Cronulla

Investors may soon find themselves with fewer reasons to buy established property and more incentives to look towards the new apartment market.

Proposed changes to negative gearing and capital gains tax concessions would see new and off-the-plan apartments retain access to the tax benefits, while established properties would miss out, creating a clear advantage for buyers purchasing newly built housing.

The policy direction aligns with what many developers have been saying for several years. Australia needs more housing supply, and governments are increasingly looking for ways to encourage investment into new stock rather than existing homes.

The challenge for investors is that suitable product is becoming harder to find.

For much of the last decade, one-bedroom apartments were the cornerstone of investor demand. They offered a lower entry price, strong rental appeal, and were a common feature across most apartment developments.

Today, the development pipeline looks very different.

Across both New South Wales and South East Queensland, developers are increasingly targeting owner-occupiers and downsizers, delivering larger two, three and four-bedroom apartments in response to changing buyer preferences. While one-bedroom apartments still exist, they now form a much smaller portion of many new projects.

That shift has created a shortage of investor-friendly stock, particularly in well-located projects close to transport, employment hubs and lifestyle amenity.

At the same time, rising apartment prices have pushed many new developments beyond the reach of traditional investors. On the Gold Coast and across South East Queensland, it's becoming increasingly difficult to find new apartments priced around the $1 million mark, particularly those offering strong rental fundamentals and long-term growth prospects.

We've rounded up four new apartment developments where investors can still secure a foothold in the market for around $1 million or less.

<h2 data-end="1140" data-start="844">Flourish Soleira</h2>

<h2>Priced from: $1.07 million</h2>

Popular Palm Beach developer Sherpa is soon to officially launch its newest local apartment development, Flourish Soleira.

The one-bedroom apartments in the building were only offered to first home buyers rather than investors, and all of those have been snapped up. The two-bedroom apartments will start from $1.07 million, and the three-bedrooms, still a good investment given the popularity of Palm Beach for owner-occupiers, starting at $2,045,000.

&nbsp;

[smartcode_project:default project_id=150017 project_image_fid=370964]

Flourish Soliera will comprise 153 apartments across two buildings, connected by a skybridge, the first ever delivered in the suburb.

True to Sherpa's booming Flourish brand of apartment projects, Flourish Soleira will have extensive rooftop amenity across both buildings including a&nbsp;wellness centre with gym, work from home, yoga, pilates, a&nbsp;heated pool, private dining rooms, pizza oven and barbecues, basketball court, and golf simulator.

<h2>Corallo, Palm Beach</h2>

Priced from: $841,500

Nearby Flourish Soleira is Changfa Group's beachfront-inspired Corallo development. They still have some one-bedroom apartments remaining, priced from $841,500.

The 105-apartment project on Palm Beach Avenue is otherwise dominated by larger two and three-bedroom residences, many of which are aimed at owner-occupiers and downsizers.

[smartcode_project:default project_id=112194 project_image_fid=808]

For investors, the appeal lies in Palm Beach's continued transformation from a laid-back beachside suburb into one of the Gold Coast's most sought-after residential markets. Residents at Corallo will be within walking distance of Palm Beach's surf beaches, the recreational amenity of Tallebudgera Creek, and the increasingly popular collection of cafes, restaurants and boutique retailers along the suburb's central dining precinct.

<h2>Corner House, Stones Corner</h2>

<h2>Priced from: $880,000</h2>

One of only two Brisbane apartment developments to make the list with prices under $1 million is DeMartini Fletcher's Corner House development in Stones Corner.

One-bedroom apartments start from $880,000 within the 88-apartment development, providing investors with exposure to one of Brisbane's most established inner-south locations.

[smartcode_project:default project_id=149098 project_image_fid=330594]

Stones Corner has long been supported by strong tenant demand due to its proximity to major employment and education destinations. The suburb sits less than five kilometres from Brisbane's CBD and is within easy reach of the Princess Alexandra Hospital, Greenslopes Private Hospital, Queensland Children's Hospital and several university campuses.

The project's location within a walkable urban village environment, surrounded by retail, dining and public transport infrastructure, continues to attract both professionals and healthcare workers seeking accommodation close to work.

Parkdrive Apartments, Chermside

Priced from: $749,000

The most affordable apartments across Brisbane's new and off the plan market are in Chermside where developer AusDev is selling one-bedroom apartments from $749,000, and two-beds from $929,000, at its recently launched Parkdrive development.

The development is strategically positioned in one of Brisbane's largest employment and retail precincts, placing residents within easy walking distance of Westfield Chermside, The Prince Charles Hospital, St Vincent's Private Hospital Northside and the suburb's major bus interchange.

[smartcode_project:default project_id=152125 project_image_fid=363782]

Already under construction and scheduled for completion in early 2028, Parkdrive benefits from Chermside's ongoing evolution into Brisbane's northern metropolitan centre. The suburb continues to attract significant public and private investment, supporting population growth and underpinning long-term rental demand.

For investors focused on yield and tenant depth, the combination of healthcare, retail and transport infrastructure within close proximity provides a strong foundation for occupancy and rental performance.

Investors to turn to new apartments after Federal Government changes spark hunt for Queensland's best $1 million apartments

A mix of Gold Coast locals, fly-in, fly-out purchasers from Sydney and Melbourne, and Brisbane-based families has driven early sales success at Broadbeach's newest apartment tower, Lumara.

The 26-level project, a joint venture between builder-developer 5Point Projects and Bourke Projects, comprises just 37 luxury residences and is attracting a buyer profile that is looking for exclusivity, above the most amenity-rich suburb on the Gold Coast.

[smartcode_project:default project_id=150454 project_image_fid=364156]

Jamie Bourke, Director of Bourke Projects, says every buyer secured so far intends to use Lumara as a lock-up-and-leave residence, combining holiday use with the ability to work remotely when required.

“The size of the apartments, both half- and full-floor options, and the different zones within the floorplans, lends itself perfectly to dedicated home office setups and multi-generational family holidays,” Bourke says.

That flexibility has become a key drawcard for affluent buyers seeking a second residence on the Gold Coast without sacrificing the ability to conduct business away from their primary home base.

The absence of holiday letting within the building has also resonated strongly with purchasers.

“This type of buyer doesn't need to generate holiday rental income,” Bourke says. “They're paying for exclusivity, privacy and certainty around who their neighbours are.”

[smartcode_project:default project_id=150454 project_image_fid=366491]

The strong demand comes amid broader shifts in the high-end apartment market following the Federal Budget announcements in May.

“We were already seeing strong enquiry from high-net-worth buyers, but that has only accelerated since the policy changes,” Bourke says.

“A lot of those buyers are looking to place more capital into premium lifestyle assets rather than investment-grade stock that has been targeted by the Federal Government.”

[smartcode_project:default project_id=150454 project_image_fid=366486]

Designed by Cottee Parker, Lumara adopts a slender, sculpted form with an emphasis on natural materials suited to its beachfront setting. The architectural approach draws on coastal influences, with a palette of stone, timber and concrete selected for durability and the ability to weather over time.

Apartments are limited to three and four-bedroom configurations, with a maximum of two residences per floor through the mid-levels and a selection of full-floor and dual-level homes in the upper levels. All apartments are oriented to the north to maximise natural light, cross-ventilation and views across the ocean, city skyline and hinterland.

A two-level amenity offering is positioned high within the building on levels 20 and 21, conceived as a sky wellness retreat. Facilities include a magnesium pool, spa, sauna and steam rooms, alongside more social spaces such as a private dining room, resident lounge, workspaces and outdoor barbecue areas integrated with landscaped greenery.

The uppermost levels are reserved for larger-format residences, including several full-floor homes and a dual-level penthouse with its own private wellness features and recreational spaces.

&nbsp;

To give buyers confidence, 5Point and Bourke commenced construction ahead of the apartments launching to the market, a sure-fire way to prove they mean business, and the building will be delivered. They are targeting a 2028 completion date.

[smartcode_project_cta:default project_id=150454]

Locals, interstate holiday makers, drive early sales at Lumara, Broadbeach's newest luxury apartment tower

Often when it comes to purchasing property, the biggest barrier to entry is the deposit. Buyers of established homes typically aim for a 20 per cent deposit to avoid the added cost of Lenders Mortgage Insurance, while most property transactions require around a 10 per cent deposit when contracts are exchanged.

The off-the-plan market works differently, with buyers typically paying a deposit during construction and settling the balance upon completion. As completion approaches at <a href="https://www.apartments.com.au/new-apartments/fabbrica-fitzroy-369-gore-street-fitzroy-vic-3065">Fabbrica Fitzroy</a>, developer <a href="https://www.apartments.com.au/developers/pace-development-group">Pace</a> is making it easier for buyers to secure a residence through a deposit-matching incentive. Purchasers need only contribute a five per cent deposit*, with Pace matching the remaining five per cent.

The offer comes as Pace unveils a completed display apartment and townhouse, now available for inspection by appointment ahead of the project's Spring completion.

[smartcode_project:default project_id=139552 project_image_fid=371009]

Designed by <a href="https://www.apartments.com.au/architects/sjb-architects">SJB</a> with interiors by <a href="https://www.apartments.com.au/interior-designers/winwood-mckenzie-architecture">Winwood Mckenzie</a> and landscaping by <a href="https://www.apartments.com.au/landscape-architect/acre">Acre</a>, Fabbrica draws on Fitzroy’s industrial and manufacturing history, incorporating references to the former Argyle Shirt Factory and Life Savers Confectionery Company that once occupied the site.

The development comprises 85 residences, spanning low-maintenance apartments through to larger-format townhouses with private street access and double lock-up garages, a relatively uncommon offering in Fitzroy’s higher-density apartment market.

Pace says the project has been designed to appeal to buyers seeking inner-city convenience without sacrificing space, flexibility, or amenity.

[smartcode_project:default project_id=139552 project_image_fid=371016]

Inside the residences, Winwood Mckenzie has focused on adaptable layouts and integrated detailing, with features including custom joinery, and concealed storage solutions. The material palette leans into warm, tactile finishes intended to complement the building’s industrial architectural language.

Fabbrica’s rooftop amenity is a key part of the project offering. Spanning around 800 sqm, the communal rooftop includes a private dining room, communal kitchen, lounge spaces, work-from-home zones, and outdoor dining areas overlooking the Melbourne CBD skyline.

[smartcode_project:default project_id=139552 project_image_fid=371017]

Landscape architecture studio Acre has introduced a layered rooftop garden designed to soften the urban setting while creating a more communal environment for residents.

The Fitzroy location also positions residents within walking distance of Brunswick Street, Smith Street, parks, cafés, galleries, and public transport, while remaining only minutes from Melbourne’s CBD. The project has an enviable Walk Score of 96.

[smartcode_project:default project_id=139552 project_image_fid=371025]

Pace, which is also delivering the project as builder, has developed more than 100 projects across Melbourne over the past three decades. The vertically integrated approach has become increasingly common among developers seeking greater control over construction delivery amid broader market pressures affecting the apartment sector.

The strikingly contemporary Gore Street development is now around 70 per cent complete, with purchasers expected to move into their new homes in Spring 2026. A limited number of residences remain available under the current deposit match offer.

*Conditions apply in relation to the deposit match offer.

[smartcode_project_cta:default project_id=139552]

Pace offers five per cent deposit match at Fabbrica Fitzroy ahead of Spring completion

Sydney developer Hyecorp's roots on the Lower North Shore stretch back three generations, and that deep understanding of the market continues to shape where and how it develops today.

From high-rise towers to boutique apartment projects, the family-run developer has built its reputation by focusing on a part of Sydney it knows intimately. Founded by Michael Abolakian in the early 1990s, Hyecorp is now led by his sons Stephen, Troy and Patrick.

Stephen Abolakian, joint managing director alongside Troy, has spent more than two decades in the business, overseeing development, planning, finance, marketing and sales.

Abolakian says the developer's disciplined focus on where it chooses to operate has been, and continues to be, one of Hyecorp's greatest strengths.

“We know the buyer profile exceptionally well,” Abolakian says.

“The demographics between places like Willoughby, Chatswood, St Leonards and Roseville are very similar. There are nuances between suburbs and projects, but culturally and from a buyer perspective, there’s a strong overlap.”

That buyer has historically been overwhelmingly owner-occupier driven.

Unlike many Sydney apartment developers that have traditionally relied heavily on investor demand, Hyecorp’s projects have typically attracted downsizers, upsizers, rightsizers and family owner-occupiers seeking long-term homes rather than short-term investments.

“Historically, investors have been a much smaller portion of our demand profile,” Abolakian says.

“We design for owner-occupiers. We don’t design for yield, we design for comfort, amenity, family living and long-term usability.”

That philosophy extends well beyond apartment layouts.

From landscaping and communal gardens to shared amenities and circulation spaces, Hyecorp’s developments are designed around how people actually live, something Abolakian believes has become increasingly important in Sydney’s apartment market.

“There was probably a period where having an approved project in market was enough,” he says.

“There wasn’t as much competition and if you built it, buyers would come. That’s no longer the case.”

“There’s more supply in the pipeline now, particularly with TOD precincts and low and mid-rise reforms opening up opportunities across Sydney. Buyers have more choice, so if you get the product wrong, they’ll simply go elsewhere.”

[smartcode_project:default project_id=110379 project_image_fid=311393]

The shift has forced developers to become more sophisticated in how they approach apartment design, particularly as owner-occupier expectations continue to rise.

For Hyecorp, that means thinking beyond who the buyer is today and designing for who they may become in five or 10 years' time.

“People buying now often aren’t moving in for several years,” Abolakian says.

“You might have a young couple buying today, but by the time they move in they may have children, older children, or changing lifestyle needs. You’ve got to think about how families evolve.”

That thinking also shapes Hyecorp’s approach to amenity, which positions wellness at the forefront.

[smartcode_project:default project_id=149594 project_image_fid=362634]

While resort-style facilities have become increasingly common marketing tools across Sydney apartment developments, Abolakian says the challenge is ensuring amenities are genuinely usable and appropriate for the scale of the project.

“If amenities are done right, they can materially improve the living experience,” he says, adding however that if you&nbsp;overdo it or get it wrong, you can end up with facilities nobody uses that simply create ongoing strata costs.”

That balance is something Hyecorp is aiming to strike with projects like Roseville Avenue, one of the group's upcoming Lower North Shore developments, which Abolakian describes as bringing a resort-style living experience into a metropolitan setting.

“It’s about creating something that feels special without being excessive,” he says.

“Good gardens, quality apartments, thoughtful amenity. Creating that resort feeling in a metro location.”

<img alt="Hyecorp" data-entity-type="file" data-entity-uuid="13c4c0f3-b1b7-44cf-9344-0b3d1d07797a" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-06-02%20at%2012.14.57%E2%80%AFPM.png?VersionId=9OLWjyj2bYkDV35F78WJnyMSPfc2bJ2z" />

The focus on owner-occupier product comes as Sydney’s apartment market continues to navigate a difficult development environment.&nbsp;For Hyecorp, maintaining an in-house operating model across construction, sales, marketing and development management has become increasingly important in navigating that environment.

“We’ve always believed in keeping a lot of the process in-house,” Abolakian says.

“It creates efficiencies, but it also creates quality control. You can make faster decisions and ensure the end product stays aligned with the original vision.”

Despite the challenges, Abolakian believes demand for quality owner-occupier apartments across Sydney remains strong beneath the surface, particularly across established Lower North Shore suburbs where downsizers continue to seek new housing options close to existing communities.

“There are definitely people waiting,” he says.

“Once some of the broader uncertainty settles, whether that’s the global environment or some of the local economic noise, I think the right projects will perform very strongly.”

Hyecorp currently has three residential developments on the market across Sydney’s Lower North Shore.&nbsp;Audrey, St Leonards, positioned opposite Newlands Park, is nearing completion and preparing to welcome its first residents, with the project now almost sold out.

Hyecorp has also recently launched&nbsp;<a href="https://www.apartments.com.au/new-apartments/celine-chatswood-37-archer-street-chatswood-nsw-2067">Celine Chatswood</a>, an architectural tower, while continuing to deliver&nbsp;<a href="https://www.apartments.com.au/new-apartments/juliet-roseville-64-pacific-highway-roseville-nsw-2069">Juliet Roseville</a>, a more boutique scale of development with just 34 apartments.

Why Hyecorp continues to back Sydney's Lower North Shore apartment market

Construction Activity

<html><body>
EXPERT OBSERVER
<div class="WordSection1">
<h1>Construction work done</h1>
Construction work done fell by 3.8 per cent in the June quarter – the fourth straight decline. The value of construction work done is 11.1 per cent down on a year ago.
In the year to June 2019 (2018/19), construction work done was at record highs in Tasmania.
Construction costs rose by 0.5 per cent in the June quarter, with building costs up 0.4 per cent and engineering costs up by 0.7 per cent. On the year, construction costs were up 2.3 per cent – the slowest growth in just over two years.
What does it all mean?
</div>
<div class="WordSection2">
In the year to March (the full 12-month period), construction was at record highs in NSW, South Australia and Tasmania. In the year to June only one state can claim record construction work – Tasmania. In 2018/19, Tasmanian construction work topped $3 billion.
While construction costs in the engineering sector remain relatively high, there has been an easing of building inflation in home and commercial building in line with the slowdown of work, especially in the residential sector.
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2019/8/28/Construction%20activity%20levels%20CommSec.jpg" alt="">
A number of listed companies, such as Boral, have noted that the huge pipeline of infrastructure work, by now, should be offsetting the slowdown in home building. But project delays have meant this isn’t occurring, as shown by the latest data. This clearly is an issue for state and territory governments to ensure the Reserve Bank isn’t fully shouldering the burden for stimulating the economy.
<h1>What do the figures show?</h1>
Construction work done fell by 3.8 per cent in the June quarter – the fourth straight decline. Construction work done is 11.1 per cent down on a year ago.
Public sector construction work fell by 0.8 per cent in the quarter and private sector activity fell by 4.7 per cent.
Construction work fell across seven states and territories in the June quarter: NSW (down 1.9 per cent); Victoria (down 4.4 per cent); Queensland (down 6.0 per cent); South Australia (down 4.8 per cent); Western Australia (up 1.4 per cent); Tasmania (down 4.1 per cent); Northern Territory (down 12.3 per cent); ACT (down 13.1 per cent).
Engineering work fell by 1.1 per cent in the June quarter – the fourth straight decline. Work done is down 15.9 per cent over the year.
Commercial (non-residential) building fell by 6.6 per cent in the June quarter after rising by 3.8 per cent in the March quarter. Commercial work is down 3.3 per cent on the year.
Residential building fell by 5.1 per cent in the June quarter – the fourth straight decline. Work done is down 9.6 per cent over the year. Alterations &amp; additions fell by 2.9 per cent in the quarter, while new residential work fell by 5.4 per cent.
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2019/8/28/Slower%20home%20building%20CommSec.jpg" alt="">
Construction costs rose by 0.5 per cent in the June quarter, with building costs up 0.4 per cent and engineering costs up by 0.7 per cent. On the year, construction costs were up 2.3 per cent – the slowest growth in just over two years.
Annual building inflation was 1.7 per cent (6-year low) and engineering inflation was 3.3 per cent.
<h1>What is the importance of the economic data?</h1>
The Bureau of Statistics releases quarterly estimates of Construction work done. The estimates are based on a survey and cover around 85 per cent of the construction work done in the period. Revised estimates will be released in coming months. The data is useful largely for historical purposes but the work yet to be done estimates provide an early warning signal of future activity. The residential work figures give a good early guide to the strength of residential investment in the national accounts.
<h1>What are the implications for interest rates and investors?</h1>
Those investors that follow companies in construction, engineering and building materials sectors, need to carefully watch for work starting on the bevy of infrastructure projects. Rising home prices may also encourage more residential projects to start in regions of high population growth.
In terms of transport infrastructure, Macromonitor have pushed out the peak of work by 12 months to 2022/23. Queensland is expected to ramp up construction of projects over next year after activity fell in 2018/19.
CommSec expects interest rate cuts in both November 2019 and February 2020. Much will depend on how quickly infrastructure projects can be fast-tracked (and this may require more migrants to fill skilled job vacancies).
Craig James is the chief economist at <a href="https://www.comsec.com.au/default.aspx" target="_blank">CommSec</a>. 
<div data-fuse="21821171146" data-fuse-code="fuse-slot-21821171146-1" data-fuse-slot="/71161633/PO_propertyobserver/article_incontent_mrec">
<div id="fuse-slot-21821171146-1" class="fuse-slot" data-google-query-id="CMaP2d7RpOQCFZVLfQodKWoGJg">
<div id="google_ads_iframe_/71161633/PO_propertyobserver/article_incontent_mrec_0__container__"> </div>
 
</div>
</div>
<div>
<div id="cpgAdsenseContainerId"><ins id="aswift_0_expand" data-ad-slot="3195360564"></ins></div>
</div>
 
</div>
</body></html>

cjames-5S2v74qSNK

Construction eases from record highs: CommSec

j.ballantyne1990-6AQqhLzZaK

Australia building activity to plummet but set for mid 2020 recovery: BIS Oxford Economics

<html><body>
EXPERT OBSERVER
A big shake up of the construction and building industry is unnecessary.
From a risk perspective it is relatively straightforward to unpack what has gone wrong but the impacts are alarming and go to the heart of impacting the safety and wellbeing of community members.
Proactive adoption by industry of the 24 review recommendations set out in the Shergold Weir report would go a long way to mitigating the risks coming to light in the building industry.
The challenge with an industry overhaul is that it would add to the negative sentiment that is already causing challenges in the property market and has the potential to create a perception the problem is bigger than it is. We could see quality developers caught up in the same net as less reputable operators.
It’s clear that people are delaying property purchasing decisions. This adds another layer to the softening property market, particularly in relation to apartment presales. Developers need to address buyer’s fears about these issues head on and move from being reactive to proactive.
They need to be on the front foot regarding risk mitigation and related assurances and offer clear assurance around consumer protections. This is about doing the right thing by consumers.
It’s impossible to say that we won’t see more of these types of failures. The very nature of the number of incidents suggests that there is something wrong and this could partly be attributed to pressure on available resources.
What we’re seeing manifest here is the downside of a property boom – corners get cut, shortages of specialist expertise, and required checks and assurances (certification, etc.) are also circumvented.
Selina Short is the managing director at Ernst &amp; Young.
</body></html>

jrobinson-rf4aSBido9

Big shake up of the construction and building industry unnecessary: EY's Selina Short 

<html><body>
Sydney’s crane construction count has again eased a tad from its 2017 peak.
Not too significantly, but it does mean fewer jobs for construction workers and that flows through into the NSW economy.
There are currently 310 cranes on the Sydney skyline, down from the 350 peak which came with six years of consecutive rises in crane numbers.
Of these some 229 are residential cranes nicely spread across 113 suburbs.
The CBD and surrounding inner suburbs have 106 (34%) of the installed cranes, the eastern suburbs have 13 (4%), the north has 107 (34%), the south has 27 (9%), the west has 57 (18%).
Every crane in the sky is sign of confidence in the future of Sydney.
With counting cranes in China a little complex, Sydney still sits second to the longtime undisputed global leader for tower cranes in the Middle East. On one recent count, Dubai proudly had 1182 cranes, with their build it and they will come philosophy.
Residential cranes in Sydney account for 74% of all cranes in Sydney, and 44% of residential cranes nationally.
As always, it is a dynamic situation with 127 additions and 141 removals of residential cranes over the past quarter, according to the latest edition of the Rider Levett Bucknall Crane index which highlights the vital role of the construction sector within Australia’s economy.
There were cranes removed from Castle Hill, Dee Why and Chatswood as apartment projects reached completion.
Seven cranes were removed from residential projects in the south, driving the overall dip in crane numbers. 
Sydney's west saw the most significant decline in overall cranes from 78 to 57, with 42 now being residential.
Some 49 cranes were removed in the west and 28 added including Ed Square's four cranes and three at the Lennox in Parramatta.
More came to Darling Harbour.
The report also counted five residential cranes across Newcastle, down from eight last year, and none at Wollongong. There's 12 residential on the Central Coast, out of the 13 in the region, including Terrigal and Gosford with six.
There are some interesting national cyclical trends emerging across the capital cities.
Currently Sydney has 42% of all cranes erected nationally, while Melbourne contributed 30% and Brisbane 8%. Sydney’s dominance has fallen slightly from the high of 52% in 2017. Melbourne’s crane numbers surged past the 200 mark for the first time.
In the first quarter of 2019 there were 735 cranes counted across Australia, with 530 for residential projects and 205 non-residential developments, including the non-residential sector of offices, transportation, hotels, education, health and retail.
New commencements will be affected by the current conditions impacting the industry including tightening finance availability, falling foreign investment and general market confidence.
While potential developments are being delayed until more favourable conditions emerge, the level of forced development site disposals is very low compared to past downturns when very high interest rates - as either holding costs or purchasing costs - caused unsold blackholes across Sydney.
Our construction spurt has helped NSW maintain the lowest unemployment rate in the nation at 4.3%.
But one indicative economic indicator suggests property industry jobs are slowing.
According to the jobs website <a href="http://seek.com.au/" target="_blank" data-saferedirecturl="https://www.google.com/url?q=http://Seek.com.au&amp;source=gmail&amp;ust=1554848099068000&amp;usg=AFQjCNFbD-KcjvnISkJqcZiMptgC6NAnyQ">Seek.com.au</a>, construction industry job advertisements are 14% lower than this time last year, while real estate jobs are down 15% and design and architecture jobs down 20%.
All those tradies in high visibility vests - buying their pies at lunchtime, spending up on tools, filling up their utes with fuel and buying their own first homes - are underpinning NSW's economic progress.
This article first appeared in The Daily Telegraph. 
</body></html>

jchancellor-FAypfDUnLy

Sydney's crane count shows why tradies underpin the state's economic fortunes 

<html><body>
The Australian Bureau of Statistics (ABS) recently released the quarterly building activity data for December 2018.
The release is a treasure-trove of data and includes information on dwelling commencements, dwelling completions, dwellings under construction and dwellings approved for construction but not commenced.
This release has published very valuable data on the number of units commenced by the number of storeys.
<a href="https://www.propertyobserver.com.au/images/2019/4/19/Blog_001.png" target="_blank">Click here</a> to enlarge:
<img src="https://www.urban.com.au/images/2019/4/19/Blog_001.png" alt=""> 
Source: CoreLogic, ABS
In terms of dwelling commencements, there was a significant slowdown over the quarter. In fact, house starts fell 7.6% over the quarter to their lowest level (27,088) since March 2017.
Unit commencements recorded a much larger -26.8% decline to 19,134 commencements, the fewest over a quarter since September 2013 and the largest quarterly decline in commencements since September 1974 when they fell -32.5%.
Despite the falls, both house and unit commencements remain above their long-term average.
<a href="https://www.propertyobserver.com.au/images/2019/4/19/Blog_002.png" target="_blank">Click here</a> to enlarge:
<img src="https://www.urban.com.au/images/2019/4/19/Blog_002.png" alt=""> 
Source: CoreLogic, ABS
The most notable change in the landscape of dwelling commencements over recent years has been the lift in apartment starts and more recently their fall.
The increase in higher density construction has primarily been driven by the three most populous states, or more specifically, the capital cities of each of those states.
Over the past five years, every state and territory has seen unit commencements reach historic high levels, demonstrating a clear shift towards higher density development (that isn’t to say that detached housing construction hasn’t also climbed significantly over the period).
More recently, as the housing market has turned and values have started to fall we can see there is a reduced preparedness of developers to commence new projects.
We would expect that commencements, particularly for units, are likely to continue to trend lower over the coming quarters as housing values continue to record value falls, finance remains tight, and both domestic and foreign investors remain light on the ground.
<a href="https://www.propertyobserver.com.au/images/2019/4/19/Blog_003.png" target="_blank">Click here </a>to enlarge:
<img src="https://www.urban.com.au/images/2019/4/19/Blog_003.png" alt=""> 
Source: CoreLogic, ABS
In the latest building activity release the ABS published a further breakdown of annual unit commencements by the height of the building.
While the number of commencements has climbed significantly over recent years, it is interesting to note that commencements of units in a one to three storey block has been relatively steady.
Anecdotally, the demand/supply ratio of medium density dwellings remains much healthier relative to high density products.
Conversely, there has been significant increases in commencements of taller buildings over recent years with commencements now beginning to ease.
This reflects both the unit construction boom and also the fact that as the cost of acquiring sites has increased developers have sought approvals for taller buildings in an effort to maximise their yield and to recoup acquisition costs and maximise profits.
With dwelling commencements expected to continue to fall, the decline doesn’t negate the fact that many developers have paid high prices to acquire sites.
As a result we would expect that despite an expectation of fewer commencements going forward, those projects that do commence will largely be taller apartment projects.
Notwithstanding that expectation, larger projects are generally riskier for the developer and achieving sufficient presales to commence a project is more of a challenge when there are more units to sell.
In order to maintain profitability of projects it is highly likely that as values continue to decline that dwelling commencements will continue to fall.
CAMERON KUSHER is the head of research for the Australian branch of CoreLogic
Kusher regularly posts on the <a href="https://www.corelogic.com.au/taxonomy/corelogic-people/cameron-kusher" target="_blank">CoreLogic website</a>.
</body></html>

ckusher-ujnxiKuFQs

The increasing prevalence of highrise construction: Cameron Kusher

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

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

<html><body>
GUEST OBSERVATION
After a three-year cycle of industry comment, review and revision, May 1 marks the adoption of a new <a href="https://ncc.abcb.gov.au/ncc-online/About" target="_blank">National Construction Code</a> (NCC). Overseen by the <a href="https://www.abcb.gov.au/ABCB/The-Board" target="_blank">Australian Building Codes Board</a> (ABCB), the code is the nation’s defining operational document of building regulatory provisions, standards and performance levels. Its <a href="https://ncc.abcb.gov.au/ncc-online/About" target="_blank">mission statement</a> is to provide the minimum necessary requirements for safety and health, amenity, accessibility and sustainability in the design, construction, performance and liveability of new buildings.
Some say the building industry is in <a href="https://www.thefifthestate.com.au/columns/spinifex/construction-crisis-no-minister-its-broken-try-an-iron-clad-mandated-warranty-instead/" target="_blank">deep crisis and broken</a>, that even our entire building regulatory system is not fit for purpose. Consider what has happened, <a href="https://www.afr.com/real-estate/what-are-australias-other-defective-towers-aside-from-sydneys-opal-tower-20190102-h19n02" target="_blank">particularly in residential construction</a>. We have had buildings <a href="https://theconversation.com/cladding-fire-risks-have-been-known-for-years-lives-depend-on-acting-now-with-no-more-delays-111186" target="_blank">burning</a>, <a href="https://www.smh.com.au/national/nsw/biggest-shake-up-in-building-laws-in-our-state-s-history-follows-opal-tower-debacle-20190210-p50wtd" target="_blank">cracking</a>, windows exploding, <a href="/news/vue-on-king-william-adelaide-cbd-apartment-owners-hot-under-the-collar">rooms with intolerable heat stress</a>, <a href="https://www.propertyobserver.com.au/https://www.abc.net.au/news/2019-02-23/opal-tower-residents-face-long-wait-for-repair-work/10842504" target="_blank">rendered unfit for occupation</a> without <a href="https://www.theguardian.com/australia-news/2019/feb/12/it-could-take-two-years-to-replace-flammable-cladding-in-melbourne-says-building-authority" target="_blank">costly remedial action</a>, class <a href="https://www.propertyobserver.com.au/https://www.abc.net.au/news/2018-09-08/residents-furious-builder-sued-combustible-cladding/10214570" target="_blank">actions against developers</a>, and <a href="https://theconversation.com/lacrosse-fire-ruling-sends-shudders-through-building-industry-consultants-and-governments-112777" target="_blank">multi-million-dollar court judgments</a> against consultants and builders.
Well, how do you measure performance? We should think in terms of lives saved, <a href="https://theconversation.com/health-check-how-can-extreme-heat-lead-to-death-91480" target="_blank">heat stroke</a> minimised, costly remedial works avoided, <a href="https://theconversation.com/too-hot-to-sleep-heres-why-11492" target="_blank">less sleep deprivation</a> and climate-induced respiratory issues, <a href="https://theconversation.com/we-cant-just-leave-it-to-the-ndis-to-create-cities-that-work-to-include-people-with-disability-93419" target="_blank">disability access</a>, <a href="https://theconversation.com/sustainable-housings-expensive-right-not-when-you-look-at-the-whole-equation-60056" target="_blank">less bill shock for the vulnerable</a>, and housing that is built to allow <a href="https://theconversation.com/for-australians-to-have-the-choice-of-growing-old-at-home-here-is-what-needs-to-change-91488" target="_blank">ageing in place</a>.
Safety and amenity
Widespread use of non-compliant building materials, and specifically combustible cladding, has been foremost in the minds of regulators. Three years ago, after the <a href="https://www.melbourne.vic.gov.au/sitecollectiondocuments/mbs-report-lacrosse-fire.pdf" target="_blank">Lacrosse fire in Melbourne Docklands</a>, the ABCB amended the existing code. This crucial revision has been <a href="https://www.abcb.gov.au/Resources/Publications/Education-Training/Fire-performance-of-external-walls-and-cladding" target="_blank">carried forward into the new code</a>.
Individually, states have acted on the findings of a <a href="https://www.aph.gov.au/Parliamentary_Business/Committees/Senate/Economics/Non-conforming45th/Report" target="_blank">Senate inquiry</a> into this area. Last October, for example, Queensland enacted the <a href="http://www.hpw.qld.gov.au/construction/BuildingPlumbing/Building/Pages/NonConformingBuildingProducts.aspx" target="_blank">Building and other Legislation (Cladding) Amendment Regulation 2018</a>.
Investigations into the highly publicised, structurally unsound Opal tower in Sydney found the design – namely the connections between the beams and the columns on level 10 and level 4, the two floors with significant damage — indicated “<a href="https://www.propertyobserver.com.au/https://www.abc.net.au/news/2019-01-16/opal-tower-investigation-what-the-report-actually-says/10717830" target="_blank">factors of safety lower than required by standards</a>”.
<iframe src="https://www.youtube.com/embed/jj9MWsDrqg8?wmode=transparent&amp;start=0" frameborder="0" width="440" height="260"></iframe>
Opal Tower report finds “construction issues”.
Just two months ago when the new code was released in preview form, we learnt that a significant number of approved CodeMarks used to certify compliance for a range of building materials are under recall. The Australian Institute of Building Surveyors <a href="https://aibs.com.au/Public/News/2019/20190220_CodeMark_Certificates_Withdrawn.aspx" target="_blank">posted urgent advice</a>: “We are in the process of making enquiries with the ABCB and Building Ministers to find out when they were made aware that these certificates were withdrawn and what the implications for members will be […] and owners of properties that have been constructed using these products.”
Fire safety concerns are driving changes in the code. The new NCC has extended the provision of fire sprinklers to lower-rise residential buildings, generally 4-8 storeys. However, non-sprinkler protection is still permitted where other fire safety measures meet the deemed minimum acceptable standard.
Comfort and health
The code includes new heating and cooling load limits. However, requirements for overall residential energy efficiency have not been increased. The 6-star minimum introduced in the 2010 NCC remains.
The code has just begun to respond to the problem of dwellings that are being constructed to comply but which <a href="https://www.propertyobserver.com.au/https://www.ncbi.nlm.nih.gov/pubmed/27432732" target="_blank">perform very poorly in the peaks of summer</a> and winter and <a href="http://www.thrive-research.com.au/wp-content/uploads/2017/02/Living-Well-Report-Final-for-issue-080317.pdf" target="_blank">against international minimum standards</a>. The change in the code deals with only the very worst houses – no more than 5% of designs with the highest heating loads and 5% with the highest cooling loads.
It’s a concern that the climate files used to assess housing thermal performance use 40-year-old BOM data. Off the back of record hot and dry summers, readers in such places as Adelaide and Perth might be surprised to learn the ABCB designates their climate as “<a href="https://www.abcb.gov.au/Resources/Publications/Education-Training/Energy-Efficiency-NCC-Volume-Two" target="_blank">the mildest region</a>”.
For well over a decade my colleagues and I have researched thermal performance, comfort and health and improvements by regulation. Our <a href="http://anzasca.net/paper/investigating-equivalence-in-compliance-pathways-to-australian-housing-energy-efficiency/" target="_blank">recent paper</a>, based on a small <a href="http://www.nathers.gov.au/newsletters/issue-2-june-2016/nathers-news" target="_blank">sample of South Australian houses built between 2013 and 2016</a>, demonstrated what has been discussed anecdotally in hushed voices across the industry, that a building can <a href="http://anzasca.net/paper/investigating-equivalence-in-compliance-pathways-to-australian-housing-energy-efficiency/" target="_blank">fail minimum standards using one particular compliance option yet pass as compliant using a different pathway</a>.
A building that is not six stars can be built under the new code. In fact, it may have no stars!
Lamentably, there has been no national evidenced-based evaluation (let alone international comparison) of the measured effectiveness of the 6-star standard. CSIRO did carry out a <a href="https://publications.csiro.au/rpr/pub?pid=csiro:EP1312595" target="_blank">limited evaluation</a> of the older 5-star standard (dating back to 2005). An <a href="https://www.abcb.gov.au/Resources/Publications/Consultation/Energy-Action-Modelling-and-Sensitivity-Analysis" target="_blank">evaluation for commercial buildings</a> is available from the ABCB website.
Accessibility and liveability
Volume 2 of the NCC covers housing and here it is business as usual, although the ABCB has released an <a href="https://www.abcb.gov.au/Resources/Publications/Consultation/Accessible-Housing-Options-Paper" target="_blank">options paper</a> on proposals that might be part of future codes. Accessible housing <a href="https://www.abcb.gov.au/Initiatives/All/Accessible-Housing" target="_blank">is treated as a discrete project</a>. Advocates for code changes in this area, such as the <a href="https://anuhd.org/" target="_blank">Australian Network for Universal Housing Design</a> (ANUHD), have written to the ABCB expressing disappointment.
A Regulation Impact Assessment on the costs and benefits of applying a minimum accessibility standard to all new housing has yet to see the light of day.
These proposals or “options” talk of silver and gold levels of design (there is no third-prize bronze option for liveable housing). Codes of good practice in accessible design have for decades recommended such measures.
It’s all about performance
Some argue that deep-seated problems have developed from a code that favours innovation and cost reduction over consumer protection. There is a cloud over the industry and over some provisions – or should we say safeguards and compliance?
Safety should not be a matter of good luck or depend on an accidental selection of a particular building material or system. New buildings born of this new code are hardly likely to differ measurably from their troublesome older siblings. The anxiety for insurers, regulators and building owners continues.
The National Construction Code adopts a performance-based approach to building regulation, but don’t expect the sales consultant to know the <a href="http://www.yourhome.gov.au/passive-design/glazing" target="_blank">U-value</a> of the windows, whether the doors are hung to allow for disabled access, or if the cleat on your tie beam is to Australian standards.
Anyone can propose changes to the NCC. The form is on the website. Consultants will be hired to model costs and benefits.
Regulatory reforms introduced through the ABCB over the past 20 years have produced an <a href="http://www.thecie.com.au/?page_id=379" target="_blank">estimated annual national economic benefit of A$1.1 billion</a>. That’s a lot of money! The owners of failing residential buildings could do with some of that cash to cover losses and legal fees.<img src="https://counter.theconversation.com/content/113729/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important; text-shadow: none !important;">
Timothy O'Leary, Lecturer in Construction and Property, University of Melbourne
This article is republished from <a href="http://theconversation.com" target="_blank">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/australia-has-a-new-national-construction-code-but-its-still-not-good-enough-113729" target="_blank">original article</a>.
</body></html>

Australia new National Construction Code still isn't good enough

<html><body>
Construction work completed fell 2.5% in the December quarter 2018, according to the latest figures released by the ABS, but still rose over the year.
Despite the December quarter decline, the residential building industry did $68.7 billion worth of work on new homes during 2018 - which was an all time high.
Work done is 2.1% up on the year.
Construction costs rose 3.6% over 2018, the biggest increase in nine years, according to CommSec.
Click <a href="https://www.propertyobserver.com.au/images/2019/2/27/Con-Costs.jpg" target="_blank">here </a>to enlarge
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2019/2/27/Con-Costs.jpg" alt="">
"The 2018 calendar year set a record for residential building activity but the amount of building work being done by the industry is now slowing," HIA senior economist Geordan Murray said.
"Following its mid-year peak, activity began to retreat.
"Other leading indicators of residential building activity, such as sales of new residential lots, new home sales, building approvals and housing finance all deteriorated quite significantly during the latter stages of 2018.
“This implies that the pipeline of new residential building work is thinning out and as the homes that are currently under construction reach completion there are likely to be fewer new projects to replace them."
HIA suggest the number of homes under construction will continue to decline throughout this phase of the cycle and the value of building work will decline accordingly.
"Today’s figures are significant as they provide a good indication that next week’s GDP figures will show that the slowdown in new home building has detracted from GDP growth for the second consecutive quarter," Murray said.
"HIA forecasts further declines in home building over the next two years which will provide a headwind for economic growth."
Construction activity still sits at high levels, however it's another weak reading in the Australian property industry.
Click <a href="https://www.propertyobserver.com.au/images/2019/2/27/con-levels.jpg" target="_blank">here </a>to enlarge
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2019/2/27/con-levels.jpg" alt="">
Earlier this month the dwelling approvals reached their <a href="/news/apartments-drive-dwelling-approval-decline-back-to-2013-levels">lowest levels since 2013</a>.
CommSec's Craig James says the inflation dragon has been sighted in the economy and is alive and well in the construction sector.
"The higher costs are in evidence across home building, commercial construction and engineering," James said.
"The question is whether builders and developers will be able to pass on the higher costs in the current environment."
Construction work fell across all states and territories.
The Northern Territory was down over 14%, followed by Queensland at 5.8%.
New South Wales was down 4.1%, Tasmania 3.6%, Western Australia 3.3% and ACT 3% down.
South Australia saw 2.5% decline and Victoria just 1.1%.
</body></html>

Construction work declines more than expected

<html><body>
A review of housing completions across metropolitan Sydney indicates that many councils are not carrying their fair share of growth.
The Department of Planning’s Housing Monitor lists housing completions across all of Sydney’s councils each month.
The top ten councils are completing more than 2,000 homes each over the last year but the bottom ten councils are only averaging around 200 homes a year.
Leading the development of new homes over the last year are the City of Sydney with 4,351 completions, The City of Parramatta with 4,231, Blacktown with 3,325 and Bayside with 3,073 new homes.
At the other end of the housing supply performance are Willoughby with 201 completions, Randwick with 200, Waverley with 119 and Mosman with only 8 new homes.
The housing completion numbers are taken from September 2017 to August 2018 from the NSW Government’s Housing Monitor for each council across Metropolitan Sydney.
The council areas that should be pulling their weight more are the ones with good rail infrastructure like the North Shore rail line.
It is disappointing to see that Willoughby with its excellent rail connections is in the bottom 10 performers with only 201 housing completions.
Other North Shore councils with rail stations that seem to be not pulling their weight on housing supply include Ku-ring-gai (899), Hornsby (724), North Sydney (638) and Lane Cove (605).
The Eastern Suburbs, admittedly with smaller councils, that are under performing are Randwick (200), Waverley (119), and Woollahra (73).
These suburbs are close to the quality jobs in the CBD and are very desirable places to live.
The best performers are two councils which are the focus of the Greater Sydney Commission’s ‘Metropolis of Three Cities’ concept in the form of Sydney and Parramatta, The City of Sydney topped the list with 4,351 new homes completed over the last year followed by the City of Parramatta with 4,231 new homes.
The Greater Sydney Commission’s Sydney District Plans identify 5-year housing targets to be achieved by 2021 for each council area.
A number of councils are well on track to achieve their targets including Penrith which needs to complete 1,320 new homes a year and exceeded this in the last year with 2,271 completions.
The City of Ryde has a target of 1,520 new homes a year but completed 2,275 new homes over the last year and Bayside Council has a target of 2,030 new homes a year over 5 years and exceeded this with 3,073 in the last year.
A number of councils are performing below the GSC targets including Randwick which has a low target of 450 a year but only achieved 200 over the last year.
Georges River Council has a target of 960 new homes a year but only achieved 495 completions over the last year.
The Urban Taskforce believes part of the concerns related to over development are coming from councils that are carrying the major housing growth on behalf of Greater Sydney.
There needs to be a fairer distribution of growth across the whole of Sydney particularly where good public transport infrastructure exists or is being constructed.
<img src="https://www.urban.com.au/images/2018/11/15/Housing%20Completions%202018.JPG" alt="">
CHRIS JOHNSON is the CEO of Urban Taskforce 
</body></html>

cjohnson-8xfqfuuCSq

Sydney’s growth is not being spread evenly across councils: Chris Johnson

<html><body>
EXPERT OBSERVER
Engineering construction work done rose by 2.2 per cent in the June quarter, down by 5.2 per cent from a year ago. A month ago, it was estimated that engineering construction was up by 0.4 per cent in the quarter, but down 7.2 per cent over the year. 
Infrastructure boom: Engineering work done for the public sector rose by 2.7 per cent in the June quarter. Over the year to June, a record $37.4 billion of work was done for the public sector. 
Work yet to be done: Excluding resources, engineering work yet to be done stands at $43.1 billion, below record highs. But outstanding road and railway work were both just below record highs. And electricity generation, transmission and distribution work was at five-year highs. The data on engineering construction work is important for builders, building material companies, professional services, developers, government businesses and other dependent sectors and industries.
<img src="https://www.urban.com.au/images/2018/9/26/CommSec%201.JPG" alt="">
What does it all mean? 
The infrastructure boom continues on Australia’s eastern seaboard. Strong population growth and government spending are supporting a gargantuan pipeline of building activity in Victoria, New South Wales and Queensland. 
In fact, construction work done in Victoria is at record highs, the highest in New South Wales in five years and at the strongest level since December 2015 in Queensland. While activity is largely concentrated on public transportrelated rail, road and airport projects, work done on much-needed electricity generation, transmission and distribution infrastructure is at five-year highs. 
And it appears that the surge in construction activity and public transport-related infrastructure spending are generating price pressures. Over the year to June, construction costs were up 3.3 per cent - just below nine-year highs. And engineering costs rose by 4.2 per cent - a seven-year high. 
Quantity surveyor WT Partnership’s recently released Australian Construction Market Conditions report says that infrastructure tender price growth will increase by up to seven per cent next year. Big-ticket projects, such as Badgerys Creek Airport in Western Sydney and the Melbourne Metro Rail Tunnel, will boost demand for building materials, plant, equipment and scarce labour – especially engineers, project managers and construction trades.
Wage pressures are building in the construction sector.
In fact, skilled vacancies for construction managers are around the highest level in seven years.
What do the figures show? 
Engineering construction work done rose by 2.2 per cent in real (inflation-adjusted) terms in the June quarter – the fifth gain in six quarters. But work done is down 5.2 per cent on a year ago. Previously, engineering work was reported as rising by 0.4 per cent in the June quarter to be down 7.2 per cent over the year. 
Value of work completed for the public sector rose by 2.7 per cent in the quarter while private sector activity rose by 1.8 per cent. 
Over the year to June a record $37.4 billion of infrastructure work was completed (engineering work for the public sector.)
<img src="https://www.urban.com.au/images/2018/9/26/CommSec%203.JPG" alt="">
 
Construction work rose in four of the states and territories in the June quarter: NSW (up 3.3 per cent); Victoria (down 4.7 per cent); Queensland (up 3.4 per cent); South Australia (up 9.6 per cent); Western Australia (up 2.7 per cent); Tasmania (down 1.0 per cent); Northern Territory (down 16.2 per cent); ACT (down 16.5 per cent). 
Work yet to be done: There was $64.4 billion of engineering work yet to be done as at June 2018, up from $59.8 billion in the previous quarter. Excluding the resource sector (coal, oil, pipelines etc.) work to be done stands at $43.1 billion, below the record high of $45.3 billion in March 2012. 
As at June 2018, $18.3 billion of work was to be completed on roads and highways and $11.7 billion on railways. And work to be completed on electricity generation, transmission and distribution was the highest in five years at $6.8 billion. 
<img src="https://www.urban.com.au/images/2018/9/26/CommSec%202.JPG" alt="">
In original terms, engineering work commenced in the June quarter was $29.0 billion, down by 2.0 per cent in the quarter. Almost $90.1 billion of engineering work was started in the past year. What is the importance of the economic data? 
The Bureau of Statistics releases quarterly estimates of Engineering construction activity. The estimates include value of engineering construction work done, commenced and yet to be done, classified by state or territory, commodity (roads, bridges, pipelines etc.), sector (public/private) undertaking the work, and sector for whom the work is being done. The data is a comprehensive assessment of the infrastructure pipeline. What are the implications for interest rates and investors? 
According to surveyor Rider, Levett and Bucknall, a record 735 cranes were hoisted above our major cities in the September quarter, reflecting the continuing strength of the construction sector within the Australian economy. Around 321 cranes are located in Sydney, followed by 192 in Melbourne and 112 in South-East Queensland.
Construction companies such as Lend Lease, Thiess, Brookfield Multiplex, BGC and Leighton have cranes and advertising scattered all over our major cities. They have plenty of work and are hoovering up highly skilled engineers, project managers and construction workers. 
<img src="https://www.urban.com.au/images/2018/9/26/CommSec%204.JPG" alt="">
Demand for labour and materials in infrastructure and construction-related sectors will increase over the coming year, pressuring contractors and sub-contractors. 
According to WT Partnership, tender prices will grow by 3- 7 per cent in New South Wales, Victoria, South-East Queensland, Tasmania, South Australia and the ACT in 2018-2019. 
Major projects under construction include the Sydney and Melbourne Metros. And projects that will enter the pipeline include the East Coast Inland rail line, Melbourne Airport rail, Brisbane Cross River Rail and Badgerys Creek rail. 
CommSec expects official interest rates to remain stable until late 2019.
Ryan Felsman is a Senior Economist for CommSec
</body></html>

Construction Activity

Editor's Picks

Have something to contribute?

Developments

New apartments

New townhouses

News

Construction Activity

Editor's Picks

Receive the latest news stories to your inbox

Have something to contribute?

Developments

New apartments

New townhouses

News