<p><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.</p>

<p>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.</p>

<p>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.</p>

<p>Resilience Insurance CEO Corey Nugent has noted that the product addresses something fundamental to the new apartment market.</p>

<p>"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.</p>

<p>"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."</p>

<p>[smartcode_project:default project_id=150499 project_image_fid=370898]</p>

<p>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.</p>

<p>Garden apartments connect directly to private landscaped courtyards, while upper-level homes capture beach views to the east from level four and above.&nbsp;</p>

<p>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.</p>

<p>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.</p>

<p>"It's a place to choose your pace and live gracefully, seaside'," Sander says.</p>

<p>[smartcode_project:default project_id=150499 project_image_fid=370900]</p>

<p>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;</p>

<p>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.</p>

<p>"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;</p>

<p>"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."</p>

<p>[smartcode_project:default project_id=150499 project_image_fid=370897]</p>

<p>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;</p>

<p>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.</p>

<p>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;</p>

<p>"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;</p>

<p>Coco Republic has provided bespoke furniture packages tailored to the project's coastal palette.</p>

<p>[smartcode_project:default project_id=150499 project_image_fid=370899]</p>

<p>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.</p>

<p>Sales at Solis are launching soon through Ray White Projects, with an official event scheduled for 11 June. Enquire for more information.</p>

<p>[smartcode_project_cta:default project_id=150499]</p>


Joel Robinson

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

<p>Investors may soon find themselves with fewer reasons to buy established property and more incentives to look towards the new apartment market.</p>

<p>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.</p>

<p>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.</p>

<p>The challenge for investors is that suitable product is becoming harder to find.</p>

<p>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.</p>

<p>Today, the development pipeline looks very different.</p>

<p>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.</p>

<p>That shift has created a shortage of investor-friendly stock, particularly in well-located projects close to transport, employment hubs and lifestyle amenity.</p>

<p>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.</p>

<p>We've rounded up four new apartment developments where investors can still secure a foothold in the market for around $1 million or less.</p>

<h2 data-end="1140" data-start="844">Flourish Soleira</h2>

<h2>Priced from: $1.07 million</h2>

<p data-end="1140" data-start="844">Popular Palm Beach developer Sherpa is soon to officially launch its newest local apartment development, Flourish Soleira.</p>

<p data-end="1140" data-start="844">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.</p>

<p data-end="1140" data-start="844">&nbsp;</p>

<p data-end="1140" data-start="844">[smartcode_project:default project_id=150017 project_image_fid=370964]</p>

<p data-end="1140" data-start="844">Flourish Soliera will comprise 153 apartments across two buildings, connected by a skybridge, the first ever delivered in the suburb.</p>

<p data-end="1140" data-start="844">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.</p>

<h2><strong>Corallo, Palm Beach</strong></h2>

<p><strong>Priced from: $841,500</strong></p>

<p>Nearby Flourish Soleira is Changfa Group's beachfront-inspired Corallo development. They still have some one-bedroom apartments remaining, priced from $841,500.</p>

<p>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.</p>

<p>[smartcode_project:default project_id=112194 project_image_fid=808]</p>

<p>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.</p>

<h2><strong>Corner House, Stones Corner</strong></h2>

<h2><b>Priced from: $880,000</b></h2>

<p>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.</p>

<p>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.</p>

<p>[smartcode_project:default project_id=149098 project_image_fid=330594]</p>

<p>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.</p>

<p>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.</p>

<p><strong>Parkdrive Apartments, Chermside</strong></p>

<p><strong>Priced from: $749,000</strong></p>

<p>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.</p>

<p>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.</p>

<p>[smartcode_project:default project_id=152125 project_image_fid=363782]</p>

<p>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.</p>

<p>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.</p>


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

<p>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.</p>

<p>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.</p>

<p>[smartcode_project:default project_id=150454 project_image_fid=364156]</p>

<p>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.</p>

<p>“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.</p>

<p>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.</p>

<p>The absence of holiday letting within the building has also resonated strongly with purchasers.</p>

<p>“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.”</p>

<p>[smartcode_project:default project_id=150454 project_image_fid=366491]</p>

<p>The strong demand comes amid broader shifts in the high-end apartment market following the Federal Budget announcements in May.</p>

<p>“We were already seeing strong enquiry from high-net-worth buyers, but that has only accelerated since the policy changes,” Bourke says.</p>

<p>“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.”</p>

<p>[smartcode_project:default project_id=150454 project_image_fid=366486]</p>

<p>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.</p>

<p>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.</p>

<p>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.</p>

<p>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.</p>

<p>&nbsp;</p>

<p>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.</p>

<p>[smartcode_project_cta:default project_id=150454]</p>


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

<p>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.</p>

<p>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.</p>

<p>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.</p>

<p>[smartcode_project:default project_id=139552 project_image_fid=371009]</p>

<p>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.</p>

<p>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.</p>

<p>Pace says the project has been designed to appeal to buyers seeking inner-city convenience without sacrificing space, flexibility, or amenity.</p>

<p>[smartcode_project:default project_id=139552 project_image_fid=371016]</p>

<p>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.</p>

<p>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.</p>

<p>[smartcode_project:default project_id=139552 project_image_fid=371017]</p>

<p>Landscape architecture studio Acre has introduced a layered rooftop garden designed to soften the urban setting while creating a more communal environment for residents.</p>

<p>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.</p>

<p>[smartcode_project:default project_id=139552 project_image_fid=371025]</p>

<p>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.</p>

<p>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.</p>

<p><sup>*Conditions apply in relation to the deposit match offer.</sup></p>

<p>[smartcode_project_cta:default project_id=139552]</p>


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

<p data-end="181" data-start="0">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.</p>

<p data-end="484" data-start="183">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.</p>

<p data-end="657" data-start="486">Stephen Abolakian, joint managing director alongside Troy, has spent more than two decades in the business, overseeing development, planning, finance, marketing and sales.</p>

<p data-end="806" data-start="659">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.</p>

<p data-end="871" data-start="808">“We know the buyer profile exceptionally well,” Abolakian says.</p>

<p data-end="1097" data-start="873">“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.”</p>

<p data-end="1169" data-start="1099">That buyer has historically been overwhelmingly owner-occupier driven.</p>

<p data-end="1434" data-start="1171">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.</p>

<p data-end="1533" data-start="1436">“Historically, investors have been a much smaller portion of our demand profile,” Abolakian says.</p>

<p data-end="1665" data-start="1535">“We design for owner-occupiers. We don’t design for yield, we design for comfort, amenity, family living and long-term usability.”</p>

<p data-end="1721" data-start="1667">That philosophy extends well beyond apartment layouts.</p>

<p data-end="1966" data-start="1723">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.</p>

<p data-end="2051" data-start="1968">“There was probably a period where having an approved project in market was enough,” he says.</p>

<p data-end="2154" data-start="2053">“There wasn’t as much competition and if you built it, buyers would come. That’s no longer the case.”</p>

<p data-end="2386" data-start="2156">“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.”</p>

<p data-end="2386" data-start="2156">[smartcode_project:default project_id=110379 project_image_fid=311393]</p>

<p data-end="2549" data-start="2388">The shift has forced developers to become more sophisticated in how they approach apartment design, particularly as owner-occupier expectations continue to rise.</p>

<p data-end="2678" data-start="2551">For Hyecorp, that means thinking beyond who the buyer is today and designing for who they may become in five or 10 years' time.</p>

<p data-end="2757" data-start="2680">“People buying now often aren’t moving in for several years,” Abolakian says.</p>

<p data-end="2949" data-start="2759">“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.”</p>

<p data-end="3219" data-start="3163">That thinking also shapes Hyecorp’s approach to amenity, which positions wellness at the forefront.</p>

<p data-end="3219" data-start="3163">[smartcode_project:default project_id=149594 project_image_fid=362634]</p>

<p data-end="3454" data-start="3221">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.</p>

<p data-end="3546" data-start="3456">“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.”</p>

<p data-end="3919" data-start="3669">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.</p>

<p data-end="4005" data-start="3921">“It’s about creating something that feels special without being excessive,” he says.</p>

<p data-end="4112" data-start="4007">“Good gardens, quality apartments, thoughtful amenity. Creating that resort feeling in a metro location.”</p>

<p data-end="4112" data-start="4007"><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" /></p>

<p data-end="4243" data-start="4114">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.</p>

<p data-end="5230" data-start="5149">“We’ve always believed in keeping a lot of the process in-house,” Abolakian says.</p>

<p data-end="5392" data-start="5232">“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.”</p>

<p data-end="5674" data-start="5394">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.</p>

<p data-end="5723" data-start="5676">“There are definitely people waiting,” he says.</p>

<p data-end="5902" data-start="5725">“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.”</p>

<p style="text-align:start">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.</p>

<p style="text-align:start">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.</p>


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

Construction Activity

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<p>EXPERT OBSERVER</p>
<p>Brisbane's once-rampant apartment construction has now righted itself, and indeed median unit prices were up a fraction over the past year in the Queensland capital. </p>
<div id="post-body-1517642067810614857" class="post-body entry-content">
<div>Victoria's apartment construction on the other hand has exploded to a record high (as expected from leading indicators), with the value of work done an astronomical 416 per cent higher than a decade earlier in chain volume measures terms. </div>
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<div>Sydney doesn't build so many houses, so a lot of activity is expected, but for Melbourne this is a boom-and-a-half!</div>
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<div class="separator"><a href="https://1.bp.blogspot.com/-j-L_Si8xu3M/W3zV5ZRFWuI/AAAAAAAArog/JQ9WfQ2ltJABfVf3KSePDeXcpAOZ8GZEQCLcBGAs/s1600/A1.jpg"><img src="https://1.bp.blogspot.com/-j-L_Si8xu3M/W3zV5ZRFWuI/AAAAAAAArog/JQ9WfQ2ltJABfVf3KSePDeXcpAOZ8GZEQCLcBGAs/s640/A1.jpg" width="640" height="376" data-original-height="800" data-original-width="1361"></a></div>
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<br>It's an everything boom for Victorian construction with public and engineering works also going on a tear. </div>
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<div>Queensland engineering construction is also finally on the rise again after the state's multi-year downturn. </div>
<br><div class="separator"><a href="https://3.bp.blogspot.com/-hFMjIc58GKQ/W3zV5oAN67I/AAAAAAAArok/mtjusxcoA6AQzd36njWtlrRemzlXTHvYQCLcBGAs/s1600/A2.jpg"><img src="https://3.bp.blogspot.com/-hFMjIc58GKQ/W3zV5oAN67I/AAAAAAAArok/mtjusxcoA6AQzd36njWtlrRemzlXTHvYQCLcBGAs/s640/A2.jpg" width="640" height="374" data-original-height="803" data-original-width="1368"></a></div>
<br><div>Adding in detached housing construction, Victoria's construction super-boom over 16 consecutive quarters and counting helped to increase total work done nationally in the second quarter by 1.6 per cent in seasonally adjusted terms. </div>
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<div>Eight consecutive quarterly increases in South Australia have also helped to offset the resources and housing construction weakness in Western Australia.<br><br>Construction work in New South Wales is set to top out now as apartment starts decline. </div>
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<br><div><strong>Job ads stalling</strong></div>
<div> </div>
<div>In other news skilled job vacancies were up by 4.7 per cent from a year earlier to be 30.5 per cent above the October 2013 nadir in July 2018, according to the latest Department of Employment figures. </div>
<div> </div>
<div>The seasonally adjusted monthly result was up just a notch following three consecutive declines. </div>
<div> </div>
<div>Unsurprisingly Victoria scored well here too, with falling unemployment looking like a shoo-in for Melbourne. </div>
<br><div class="separator"><a href="https://3.bp.blogspot.com/-oDN5Lkggpdk/W3zV6M2hRaI/AAAAAAAAros/hdUwylmO0ccmBenJN0Gi8BlEILu59fHKQCLcBGAs/s1600/DoE.jpg"><img src="https://3.bp.blogspot.com/-oDN5Lkggpdk/W3zV6M2hRaI/AAAAAAAAros/hdUwylmO0ccmBenJN0Gi8BlEILu59fHKQCLcBGAs/s640/DoE.jpg" width="640" height="368" data-original-height="793" data-original-width="1374"></a></div>
<br><div>In Western Australia vacancies were up 16.3 per cent over the past year, pointing to brighter days ahead across the Nullarbor.<br><br>Nationally, though, the growth in job ads seems to have stalled, with an election to follow - and that rarely inspires confidence in employers.</div>
<div><em> </em></div>
<div><em>PETE WARGENT is the co-founder of AllenWargent property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank">blogger</a>.</em></div>
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Victoria's everything boom: Pete Wargent

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<p>GUEST OBSERVER</p>
<p>The non-residential construction sector enjoyed better times in 2017, with more projects proceeding, a point that we have highlighted previously.</p>
<p>This lays the foundation for building work in the sector to advance solidly in 2018. The long duration of some projects can see work spread out over two to three years.</p>
<p>Approvals for non-residential building projects increased by 22% in 2017, to $46.8bn, a rise of $8.3bn on the previous year. That built upon an 11% increase in 2016, up by almost $4.0bn.</p>
<p>The lift in approvals in 2017 is the largest annual increase since 2007, post the GFC. While, the 35% lift for the two years from 2015 to 2017 is the strongest two year showing since the 2006 to 2008 period, but that is still well short of the 50% jump from 2004 to 2006.</p>
<p>The positive developments in the sector are underpinned by robust population growth and a lift in public investment. In short, the capital stock is expanding to meet the needs of a growing population, as well as to service rapid growth in both international tourism and foreign student numbers.</p>
<p>The non-residential building sector is diverse, spanning offices and retail in the commercial segment; factories and warehouses in industrial; and social buildings, including, health, education, accommodation (hotels, aged care, student apartments), and entertainment.</p>
<p>Building approvals in 2017 advanced across each of the broad segments, with public projects and offices punching well above their weight.</p>
<p>The $8.3bn increase in total building approvals in 2017 is comprised of: public works, +$2.3bn; offices, +$2.7bn; social buildings, $1.4b; industrial, $1.0bn and commercial ex offices, +$0.9bn. Together, public and office projects accounted for 60% of the increase in approvals in 2017.</p>
<p>Office approvals have rebounded from the lows of 2015 to be in line with the highs of 2013. This profile, against the current economic backdrop, points to the likelihood that office approvals will retrace somewhat over 2018 and 2019.</p>
<p>The major non-mining states on the east coast, Victoria and NSW are enjoying sustained strong population growth, with the global cities of Melbourne and Sydney key growth engines. No surprise then that the rise in building approvals is centred in these two states.</p>
<p>Victoria and NSW together account for 86% of the increase in building approvals in 2017 and 80% of the increase over the past two years.</p>
<p>In the mining states, private building approvals moved higher in 2017, Qld +5% and WA +21%, although in WA a decline in public works is a headwind. </p>
<p>Private non-residential building activity is forecast to expand by 7% in 2017, a turnaround from a 9% fall in 2016, followed by an 8% lift in 2018 and moderate gains in 2019 and 2020.</p>
<p><em><strong>Andrew Hanlan</strong> is a research analyst at Westpac.</em></p>
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j.ballantyne1990-6AQqhLzZaK

Non-residential construction set to advance in 2018: Westpac's Andrew Hanlan

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<p>GUEST OBSERVER</p>
<p>The data recently released by the NSW Department of Planning’s Housing Monitor indicates a drop in housing approvals while completions remain strong.</p>
<p>Over the last six months Sydney annual housing approvals have dropped from 58,618 in February 2017 to 51,119 in August 2017 through a consistent monthly drop.</p>
<p>This represents a drop of 13% which demonstrates that the housing market is slowing down. There is clearly a time lag from slowing approvals to slowing housing completions but it would appear that a trend is underway.</p>
<p>Housing completions are still strong with 36,097 annual completions at August 2017 down slightly from April’s 37,575 completions. On a four year average the percentage of approvals that become completions is 59% which is a worrying number. The NSW government should undertake some research into the relatively low number of approvals that transition into the construction phase.</p>
<p>Housing projects are becoming more difficult through tighter lending policies by banks and proposed increases in levies for affordable housing by councils which are influencing feasibility and therefore reducing the number of projects seeking approvals.</p>
<p>With the NSW government emphasising that the best way to help with housing affordability is through high supply numbers the current slowdown is of concern. The recently released Greater Sydney Region Plan calls for affordable housing levies to only be applied to floor space uplift where this is viable but many councils are proposing to apply levies to existing floor space as outlined in their planning documents. The removal of the cap on local development contributions also creates significant concerns for developers.</p>
<p>While the August annual housing completions are strong at 36,097 this figure is below the average required every year for 20 years of 36,250. In boom times Sydney’s housing completions should be above the average required.</p>
<p>The current housing approvals for Sydney while being below what is needed are still very high compared to the decade average. The Urban Taskforce urges the NSW government to do all it can to keep housing approvals at a high level.</p>
<p><em><strong>Chris Johnson</strong> is chief executive officer of property development industry group Urban Taskforce and can be contacted <a href="https://www.urbantaskforce.com.au/index.php?option=com_content&amp;view=article&amp;id=97&amp;Itemid=126#.Vdaart55dFI" target="_blank">here</a>.</em></p>
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Sydney housing approvals showing signs of slowing down: Chris Johnson

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<p>Australia’s leading construction companies expect a recovery in engineering and non-residential building activity for the rest of the 2017 calendar year and in 2018, according to a survey from an industry body.</p>
<p>The upbeat forecast comes after three years of declining major project work, the latest Australian Industry Group/Australian Constructors Association Construction Outlook said. </p>
<p>After dropping sharply by 8.0% in 2016 (current prices), the survey forecasts that the total value of turnover from major project work will rise by 4.3% in 2017 followed by a stronger lift of 6.4% in the 2018 calendar year.<br><br> The recovery comes on the back of an upturn in non-mining infrastructure construction, with engineering construction rising 2.9% in value in 2017 and a further 6.8% expected in 2018, turning around 2016’s steep 16.5% downturn. </p>
<p>An emerging phase of strong public sector spending on transport infrastructure will continue to boost conditions, despite the further winding down in mining-related construction.</p>
<p>Commercial construction, including offices, retail buildings and industrial premises, is also expected to gain momentum from flat conditions in 2016 to increase by 1.6% in 2017 and a further 5.6% in 2018.<br><br> The outlook for multi-level apartment construction remains strong for 2017 (+22.9%) as work continues to fill up the backlog, although the pace of growth will moderate in 2018 (+6.8%) as the current apartment building cycle reaches its peak.</p>
<p><a href="https://www.propertyobserver.com.au/images/2017/06/29/Turnover.png" target="_blank">Click to enlarge</a></p>
<p><img src="https://www.urban.com.au/images/2017/06/29/Turnover.png" alt=""></p>
<p>Australian Industry Group chief executive Innes Willox said while “apartment building continues to feature prominently, it is clearly set to scale back in the period ahead”. But pointed to further expansion in infrastructure investment, particularly in road and rail works, and a lift in private sector commercial construction.</p>
<p>He said the overall pick-up in major project work confirmed construction had moved beyond the impact of the winding down of the boom in mining and energy-related projects. </p>
<p>However, there could be an expected further decline in resources-related engineering construction, particularly in the oil and gas processing sector, which is set to follow 2016’s 39% decline with further steep drops in 2017 (-25.5%) and 2018 (-56.8%). </p>
<p>However, the drag from other mining-related construction will slow in 2017 (-14.3%) before emerging from its downturn to record mild growth of 3.1% in 2018.</p>
<p>Australian Constructors Association (ACA) executive director, Lindsay Le Compte, said the spate of infrastructure project announcements on the eastern seaboard will demand a larger workforce and action was the need of the hour to provide skilled personnel. </p>
<p>Key Points from the Ai Group / ACA Construction Outlook survey:</p>
<ul>
<li>After falling by 1.2% in the year to February 2017, total employment in major construction is expected to return to growth with rising infrastructure work over the reminder of 2017 (+4.5%), before registering a further increase of 1.9% in the six months to June 2018.</li>
<li>Skilled labour shortages remain a concern, with a relatively high 39.1% of respondents reporting either ‘major’ or ‘moderate’ difficulty in recruiting skilled labour in the six months to March 2017, down only slightly from 40.0% in the previous six months. Sourcing of sub-contractors also remained a key concern, with 39.1% citing major or moderate difficulty (down from 44.4% in the previous six months).</li>
<li>The sourcing of building materials was less of a concern for the industry in the six months to March 2017, with 21.7% of respondents citing major or moderate difficulty, down from 38.9% six months earlier.</li>
<li>Labour costs are expected to become a greater source of pressure for the construction of infrastructure and building projects in 2017, with 39.0% of respondents expecting major or moderate increases in both direct labour rates and sub-contractor rates. Reports of increases in construction material costs have eased off to some extent, with 21.7% of businesses reporting major cost hikes (down from 32% six months earlier). </li>
</ul>
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Major construction on road to recovery, says industry survey 

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<p>GUEST OBSERVER</p>
<p>The weekly ANZ/Roy Morgan consumer confidence rating fell by 4.4 percent in the past week from six-week highs.</p>
<p>The Performance of Construction index rose by 5.4 points to 53.1 in February. </p>
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<div class="column">To say that consumer confidence is somewhat fluky at present is probably an under-statement. In late February, consumer confidence was at six-week highs and up 7 percent over the year. A week later and confidence is back down, and almost 1 per cent lower than a year ago.</div>
<div class="column">
<br>Domestic politics, Donald Trump, petrol prices, interest rate expectations and a lower Australian dollar are all influencing consumer sentiment. It is a little surprising given that economic data and company earnings results have been very good, but confidence has presumably softened in the past week. It is hard to read much into it. Expect the sideways trend for confidence to continue.<br><p>The construction gauge can be volatile. And that is understandable given that engineering and housing activity have tended to move in opposite directions in recent times. And clearly construction activity varies markedly from state to state. Still, it is encouraging that manufacturing and construction gauges are both above 50, signifying expansion.</p>
<p><a href="https://www.propertyobserver.com.au/images/2017/03/07/Screen%20Shot%202017-03-07%20at%2011.55.33%20AM.png" target="_blank">Click to enlarge</a></p>
<p><img src="https://www.urban.com.au/images/2017/03/07/Screen%20Shot%202017-03-07%20at%2011.55.33%20AM.png" alt=""></p>
<p>What do the figures show?</p>
<p>Consumer sentiment</p>
The weekly ANZ/Roy Morgan consumer confidence rating fell by 5.2 points (4.4 percent) to 113.9 in the week to March 5. Confidence is down 0.8 percent over the year but above the average of 113.3 since 2014. </div>
<div class="column">
<br>Only one component of the index rose in the latest week:<br><ul>
<li> The estimate of family finances compared with a year ago was down from +11 to +1;</li>
<li> The estimate of family finances over the next year was down from +34 to +26;</li>
<li> Economic conditions over the next 12 months was up from +5 to +6;</li>
<li> Economic conditions over the next 5 years was down from +7 to +6;</li>
<li> The measure of whether it was a good time to buy a major household item was down from +40 to +31:</li>
</ul>
<p>  The reading of inflation expectations two years ahead fell from 4.7 per cent to 4.4 per cent. But inflation expectations have now held above 4 per cent for the past 12 weeks.</p>
<p>Performance of Construction</p>
Following four months of decline, the Ai Group/Housing Industry Association Australian Performance of Construction Index (Australian PCI®) lifted by 5.4 points to 53.1 in February. It was the highest Australian PCI® reading since mid-2016 (readings below 50 indicate contraction in activity, with the distance from 50 indicating the strength of the decrease).</div>
<div class="column">
<br>While apartment building activity contracted for a sixth consecutive month (down 0.4 points to 46.1), house building recorded a strong resurgence (up 10.7 points to 60.9 – its highest rate since June 2016).</div>
<div class="column">
<br>Stronger conditions were also evident in commercial (up 6.1 points to 53.6) and engineering construction (up 11.1 points to 53.9), with both sub-sectors lifting into positive territory after declines of five and four months respectively.<br><p>Pressure from rising wages (up 2.8 points to 63.0) and input prices (up 10.5 points to 76.1) is partially being passed on, with the selling prices sub-index increasing slightly by 0.7 points to 56.0, but profit margins remain under pressure amid a highly competitive tender pricing environment. “</p>
<p>What is the importance of the economic data?</p>
The ANZ/Roy Morgan weekly survey of consumer confidence closely tracks the monthly Westpac/Melbourne Institute consumer sentiment index but the former measure is a timelier assessment of consumer attitudes and is now closely tracked by the Reserve Bank.<br><p>The Australian Industry Group and Housing Industry Association release the Performance of Construction Index (PCI) each month. The PCI is useful not just in showing how the construction sector is performing but in providing some sense about where it is heading. The key ‘forward looking’ components are orders and employment.</p>
<p>What are the implications for interest rates and investors?</p>
The Reserve Bank monitors consumer confidence but it is unlikely that it is taking away much of consequence at present. But the construction data was positive, adding to similar trends for other indicators on the economy.</div>
<div class="column">
<br>The Reserve Bank will maintain a “neutral stance”. It is still too early to talk of rate hikes.</div>
<div class="column"> </div>
<div class="column">Watch the inflationary trends in construction – especially home building. </div>
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<a href="https://www.propertyobserver.com.au/images/2017/03/07/Screen%20Shot%202017-03-07%20at%2011.56.43%20AM.png" target="_blank">Click to enlarge</a><br><div class="page" title="Page 2">
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<p><span><em>Craig James is the chief economist at <a href="https://www.comsec.com.au/default.aspx" target="_blank">CommSec</a>.</em> </span></p>
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Fluky winds for Aussie consumers: Craig James

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<p><span>I recently spent a bit of time charting the death throes of the resources construction boom. </span></p>
<p><span>As you can see below, although the Northern Territory has been offered a temporary reprieve by the massive $34 billion Ichthys LNG project, engineering construction activity has been hit extremely hard almost everywhere else, particularly so in Western Australia (down by 24 per cent over the past year), Queensland (-38 per cent) and South Australia (-25 per cent).</span><span style="line-height: 1.3em; font-weight: bold;"> </span></p>
<div id="post-body-6634680014865062538" class="post-body entry-content">
<div><a href="/images/2015/08/20/eng2.jpg" target="_blank"><span><span>Click to enlarge</span></span></a></div>
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<div><span><span><img src="/images/2015/08/20/eng2.jpg" alt=""></span></span></div>
<div> </div>
<div> </div>
<div>
<span>Moreover, despite a year-on-year decline of </span>more than 20 per cent<span> the downturn has miles to run yet before construction activity even gets close to its historical norm. The value of work commenced points to an accelerating decline.</span>
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<div><a href="/images/2015/08/20/eng3.jpg" target="_blank"><span>Click to enlarge</span></a></div>
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<div><span><img src="/images/2015/08/20/eng3.jpg" alt=""></span></div>
<div> </div>
<div> </div>
<div><span>Moreover, with the Commodity Price Index having continued to weaken, we could easily overshoot to the downside, which terms-of-trade booms in Australia have historically tended to do.</span></div>
<div><span> </span></div>
<div><a href="/images/2015/08/20/Commods1.jpg" target="_blank"><span>Click to enlarge</span></a></div>
<div><span> </span></div>
<div><span><img src="/images/2015/08/20/Commods1.jpg" alt=""></span></div>
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<div> </div>
<div>
<div>Given that the construction stage tends to be comfortably the most labour-intensive phase of resources projects, this must inevitably result in sharply declining demand around many regional areas of Australia.<br><br><strong><span style="text-decoration: underline;">Vacancies rising in resources capitals</span></strong><br><br>On a related note <em>SQM Research</em> released its latest July 2015 Vacancy Rates and asking rents data yesterday.</div>
<div> </div>
<div>Vacancy rates nationally held steady at <strong>2.4 per cent</strong> but the figures revealed a significant divergence between the resources capital cities and the rest.</div>
<div> </div>
<div>As you can see in the chart below, moving from left to right vacancy rates remain relatively tight in Hobart (1.2 per cent), Sydney (1.8 per cent) and Adelaide (1.9 per cent).<br><br>Hobart's vacancy rates have tightened over the past year from 1.5 per cent to 1.2 per cent despite a near total dearth of population growth - if you think carefully about it, you may come to your own conclusions as to why - while Sydney's vacancy rate of 1.8 per cent is unchanged from one year ago.<br><br>Brisbane city-wide vacancy rate is now recorded as being 2.6 per cent, and in fact in a number of apartment construction hubs vacancy rates are already considerably higher than that. </div>
<div> </div>
<div>Shifting across towards the right hand edge of the chart Darwin is now tracking at an elevated 3.5 per cent having spiralled from just 1.4 per cent a year ago.<br><br>Meanwhile vacancy rates in Perth have blown all the way out from 2.5 per cent in July 2014 to 3.8 per cent.</div>
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<div><a href="/images/2015/08/20/SQM.jpg" target="_blank">Click to enlarge</a></div>
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<div><span><img src="/images/2015/08/20/SQM.jpg" alt=""></span></div>
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<div> </div>
<div>
<strong><span style="text-decoration: underline;">Asking rents follow vacancies</span></strong><br><br><span>Also reported in the </span><em>SQM</em> media release<span> was a massive 20.5 per cent fall in asking rents for houses in Darwin, as well as 15.2 per cent decline in asking rents for Darwin units.</span><br><br><span>Over the past year asking rents have also declined in Perth for both houses (-7.4 per cent) and units (-6.3 per cent), according to </span><em>SQM</em><span>'s index.</span><br><br><span>Of course, vacancy rates are expected to rise at this stage in the construction cycle, but it may take Perth and Darwin quite some time to absorb the excess stock.</span>
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<div><a href="/images/2015/08/20/AW1.jpg" target="_blank"><span>Click to enlarge</span></a></div>
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<div>
<strong><span style="text-decoration: underline;">Mining towns crushed</span></strong><br><br><span>This capital city market action is of course small fry compared to what is playing out in resources regions.</span><br><br><span>Following on in sympathy from an epic property crash in the Pilbara, the </span><em>Australian Financial Review</em><span> </span>reported<span> that investors in the Bowen Basin heartland are being sent broke with dwelling prices continuing to collapse dramatically.</span><br><br><span>Property prices in Moranbah have reportedly crashed by up to 70 per cent over the past three years, while prices in Dysart prices have crashed by closer to 50 per cent over the same period.</span><br><br><span>Instead of linking back to articles which promised untold riches from investing in mining towns, it is worth considering the two golden rules which nearly all of the most successful investors follow religiously:</span><br><br><strong>Rule 1 - Don't lose money.</strong><br><strong><br></strong><strong>Rule 2 - See Rule 1.</strong><br><br><span>When it comes to property investment, there is no easy way back from a 50 per cent drawdown, particularly if leverage is used.</span><br><br><span>Remember that the promise of higher returns often comes with correspondingly higher risks. </span>
</div>
<div><span> </span></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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