Developer <a href="https://www.apartments.com.au/developers/bottega-property-group">Bottega House</a> has secured council approval for its first Brisbane project - a $270 million luxury residential development on an absolute riverfront site in leafy St Lucia.&nbsp;

The 15-storey project, known as <a href="https://www.apartments.com.au/new-apartments/st-lucia-by-bottega-house-180-macquarie-street-st-lucia-qld-4067">St Lucia by Bottega House</a> , will occupy a prime north-facing site at 178-180 Macquarie Street, directly fronting the Brisbane River in the established inner-west suburb known for its rowing clubs, golf courses and sprawling University of Queensland campus.&nbsp;

St Lucia by Bottega House will feature a suite of amenities including dedicated wellness spaces, a mineral pool and cold plunge. The project has been positioned to attract affluent owner-occupiers seeking high-quality, house-sized apartments.&nbsp;

Bottega House has been set up by co-directors Nick Malloch, Louis Mennes and Craig Marsh.

Malloch said the project drew inspiration from its Brisbane River setting and leafy inner-west surrounds, while responding to the demands of discerning locals looking to transition from freestanding homes into apartment living.&nbsp;

"With an expansive river frontage and lush green surrounds, we knew we had to create something special that reflects the natural beauty of the location while offering residents masterfully crafted homes," said Malloch.&nbsp;

"Our intent was to complement the project's quiet, private setting by introducing residences that offer a calm retreat and sanctuary from the everyday. The result is a harmonious blend of architecture, interiors and amenity that emphasises wellbeing, comfort and beauty without excess."&nbsp;

Malloch added that project consultants had been carefully selected in alignment with Bottega House's commitment to care, quality and attention to detail. The design team includes architects <a href="https://www.apartments.com.au/architects/plus-studio">Plus Studio</a>, interiors practice <a href="https://www.apartments.com.au/interior-designers/mim-design">Mim Design</a> and landscaping by <a href="https://www.apartments.com.au/architects/urbis">Urbis</a>.&nbsp;

Three-bedroom apartments are expected to start around $5 millio. Selling agents Keenan &amp; Byrne said the pricing strategy for the project was anticipated to achieve upwards of $25,500 per square metre.&nbsp;

The project's development approval this week follows the success of Bottega House's inaugural Queensland project - a 22-storey collection of full-floor sky homes at Broadbeach on the Gold Coast which included the sale of a two-storey penthouse at a record price for a beachside residence.&nbsp;

St Lucia by Bottega House is expected to launch to market in November, with construction anticipated to be completed mid 2029.

[smartcode_project_cta:default project_id=151826]

Joel Robinson

Bottega House to make Brisbane debut with St Lucia riverfront apartment development

<a href="https://www.apartments.com.au/developers/sherpa-property-group">Sherpa Property Group</a> is advancing its affordable apartment model into Brisbane with the acquisition of another site at Cordelia Street in South Brisbane for $27 million.

Sherpa, which has a $1.7 billion pipeline across Southeast Queensland, intends to bring a cohort of apartments exclusively for first homebuyers into its proposed 186-apartment project to be built at 2 Cordelia Street.

The Sherpa model has already been incredibly well received from their Gold Coast projects, where Sherpa Group set aside a number of apartments exclusively for first homebuyers.

The new $320 million project marks Sherpa Group's second development in Brisbane, following its $255 million Symphony project, also on Cordelia Street, which is currently under construction.

Symphony will deliver 146 apartments across 28 levels, offering a mix of one, two and three-bedroom apartments. With 114 already sold, construction by <a href="https://www.apartments.com.au/builders/lps-group">LPS Group</a> is scheduled for completion in 2028.

[smartcode_project:default project_id=7574 project_image_fid=351654]

Sherpa Founder, Christie Leet, said the company was excited to be venturing into Brisbane for its second residential project.

“We’re big believers in the future of Brisbane as we lead into the 2032 Olympics and beyond,” Leet said.

“The success of Symphony has guided us into what will be our second project and we look forward to submitting our plans with council soon so we can deliver yet another quality project to the inner city residential market.

“Our Flourish model has been very well received both in Brisbane and the Gold Coast, and we’re excited to be able to offer some of these apartments again exclusively to first homebuyers to help get them into the property market.

“The model has been extraordinarily well received in our previous projects and it is something we are committed to moving forward.”

2 Cordelia Street will be designed by <a href="https://www.apartments.com.au/architects/hal-architects">HAL Architects</a> &amp; Finegrain and will include Sherpa’s signature residential amenities including pool, gym, recreation, wellness and work from home spaces.

The project will feature ground-floor commercial space, creating a vibrant amenity for residents and the surrounding community.

A development application will be lodged with Brisbane City Council in August on the code compliant site and will be launched to the market early 2027.

Sherpa acquires new site for second Brisbane apartment tower

One of North Sydney's best-known commercial buildings could become hundreds of new homes, with insurance giant Zurich Australia lodging a State Significant Development Application (SSDA) to transform 5 Blue Street into a mixed-use residential development above North Sydney Station.

Rather than demolishing the existing building and starting again, Zurich is proposing an adaptive reuse project that would convert the landmark office building into a 15-level residential development delivering 62 apartments, 86 affordable co-living dwellings, activated retail and significant upgrades to the Blue Street Plaza.

The proposal reflects a growing trend of commercial property owners repositioning ageing office assets into residential housing as Sydney grapples with housing supply shortages and changing workplace demand.

<img alt="Zurich" data-entity-type="file" data-entity-uuid="0bba7d12-06dc-4375-aad7-238c94b21ac5" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-07-22%20at%2010.42.05%E2%80%AFAM.png?VersionId=NJl5oLAEBDGuPmY3RnyliKODjMc8lvRh" />

Located directly above North Sydney Metro and train station, the 3,051 sqm site occupies one of the most strategically positioned parcels of land on Sydney's Lower North Shore.

Designed by fjcstudio, the proposal seeks to retain and adapt much of the existing structure while creating a contemporary residential address that better connects with the public domain surrounding North Sydney Station.

The application proposes two basement levels, ground floor retail, affordable co-living accommodation across the podium levels, and apartments above, while preserving and enhancing the publicly accessible Blue Street Plaza.

Rather than pursuing maximum apartment numbers, Zurich has opted for a housing mix heavily weighted towards larger owner-occupier residences.

The proposal includes 62 build-to-sell apartments comprising 12 one-bedroom, 19 two-bedroom, 29 three-bedroom apartments and two premium penthouses. It also incorporates 86 affordable co-living dwellings, which would be managed in perpetuity by a Community Housing Provider.

That balance between traditional apartments and affordable housing reflects the NSW Government's push to increase housing diversity around major transport infrastructure.

The proposal has been lodged concurrently with a rezoning application, with Zurich arguing the site is ideally positioned to support additional housing given its immediate proximity to public transport, employment and services.

"The proposal aims to respond to the housing challenges facing Sydney through the delivery of diverse housing types in a highly accessible location," the design report by fjcstudio states. It also seeks to improve pedestrian amenity through upgrades to Blue Street Plaza while creating a high-performing residential building that responds to the surrounding context.

<img alt="Zurich" data-entity-type="file" data-entity-uuid="36082e15-c636-4481-bb68-5a5f6443fe39" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-07-22%20at%2010.41.36%E2%80%AFAM.png?VersionId=5P6VD.fvmqjQfIG3TWWMRXxQWiQBjeFB" />

Rather than replacing the commercial building, fjcstudio has developed a design that works with the existing structural framework above the rail corridor, an approach that significantly reduces demolition while allowing the site to be repositioned as a mixed-use residential precinct.

The existing structural constraints have informed much of the building's design, including its relationship with Blue Street and surrounding public spaces.

The building has been designed as a slender tower rising above a clearly defined podium, with vertically expressed façades intended to reduce the perceived bulk while reinforcing North Sydney's emerging skyline.

According to fjcstudio, the architectural language responds directly to the surrounding commercial towers while maintaining a finer grain expression more closely aligned with the neighbouring Lavender Bay streetscape.

The tower incorporates articulated façade elements, landscaped podium edges and recessed upper levels to soften its appearance and improve pedestrian amenity below.

A significant component of the proposal is the revitalisation of Blue Street Plaza.

The existing public space has long served as one of the primary pedestrian connections between North Sydney Station, Greenwood Plaza and Blue Street, yet its role is expected to become even more important following the opening of Sydney Metro.

Zurich's proposal seeks to strengthen that role by improving landscaping, introducing new retail frontages, enhancing pedestrian permeability and creating more active edges throughout the day and evening.

Ground floor retail would wrap the plaza, while separate residential and co-living entries have been designed to improve wayfinding without reducing street activation.

Landscape design has been integrated throughout the podium and public realm, softening what is currently one of the most heavily urbanised parts of North Sydney.

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fjcstudio has carefully oriented apartments towards Sydney Harbour and the CBD while using privacy blades and articulated façades to minimise overlooking between neighbouring buildings.

Large framed openings along the western elevation maximise harbour outlooks, while the eastern apartments have been angled towards the south-east to improve privacy from neighbouring development.

The project forms part of the continuing transformation of North Sydney from a predominantly commercial CBD into a genuine mixed-use city centre.

Since the completion of Victoria Cross Metro Station, developers have increasingly shifted their attention towards residential projects capable of leveraging the area's unparalleled transport connectivity.

&nbsp;

FiveX recently lodged plans for a 61-storey, 490-apartment tower that would become one of the tallest residential buildings in North Sydney if approved.

Aqualand continues to expand its Lower North Shore presence following the completion of AURA on Walker Street and its recent St Leonards and Roseville proposals.

Developers are also progressing projects throughout Walker Street, Miller Street and the Victoria Cross precinct as demand for well-located owner-occupier apartments continues to strengthen.

First look: Zurich targets North Sydney office conversion with 148-unit proposal above Metro station

Busy developer Aqualand Prestige has formally taken the next step in its expansion across Sydney's Lower North Shore, lodging a State Significant Development Application (SSDA) for its long-held Archer Street site in Chatswood.

The application covers <a href="https://www.apartments.com.au/new-apartments/51-55-archer-street-chatswood-nsw-2067">51-55 Archer Street</a>, a 1,767 sqm amalgamated site on the eastern edge of the Chatswood CBD, where the developer is seeking approval for a 45-level mixed-use tower delivering 114 apartments, including a significant affordable housing component, alongside retail, commercial space and six basement levels of parking.

The SSDA marks the latest milestone for a project Aqualand has been quietly progressing over the past two years. The developer first secured the site for its Aqualand Prestige platform before undertaking an alternative design excellence process with PTW Architects, ultimately avoiding a formal design competition through the Housing Delivery Authority pathway.

The proposal has evolved considerably from Aqualand's original concept. The revised scheme has been designed around larger owner-occupier product, with an unusually high proportion of three and four-bedroom apartments, targeting the more affluent buyer profile, and downsizer, emerging across the North Shore.

<img alt="Archer St" data-entity-type="file" data-entity-uuid="0171204c-5811-41b5-9b09-2335d1b7c3d0" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-07-22%20at%208.52.48%E2%80%AFAM.png?VersionId=6YTuxfq.puZo7k2wbfgemcO5K3QfXYGQ" />

The 114-apartment mix comprises six studios, 27 one-bedroom apartments, 18 two-bedroom apartments, 50 three-bedroom residences and 13 four-bedroom homes. A quarter of the building will be dedicated to affordable housing, well above the mandated 15 per cent&nbsp;

PTW has structured the building vertically, with affordable housing across levels one to six, premium apartments through levels seven to 31, duplex skyhomes on klevels 32 to 43, a penthouse on level 44, and a rooftop plant level above. Six basement levels will provide resident parking and servicing.

The tower is proposed to reach approximately 154 metres, placing it among a growing collection of residential high-rises transforming Chatswood's skyline.

Rather than competing purely on height, PTW says the design has been driven by creating a slimmer tower capable of delivering significantly larger apartments.

"The primary objective of this project was to create a distinctive building that stands out from the recently approved or built structures in the Chatswood area," the design report states, noting the structural efficiency allows greater investment into apartment quality and resident amenity.

Residents would have access to more than 450 sqm of communal open space including landscaped gardens, swimming pool, rooftop entertaining areas, fitness spaces, community gardens, children's play areas and barbecue facilities.

A major focus of the design has been the public domain.

The ground plane has been opened up through landscaped terraces inspired by Willoughby's sandstone ridges, with native planting, public seating, artwork, retail activation and a series of gathering spaces intended to soften what has traditionally been a hard commercial streetscape.

The landscape strategy references Blue Gum forests once common throughout the area, while incorporating Indigenous storytelling, public art and lighting installations to strengthen the connection to Country.

Chatswood has been one of Sydney's busiest apartment markets over the past 12 months, with a steady pipeline of both new project launches and fresh development applications.

Hyecorp recently launched Celine, a 122-apartment development just along Archer Street, while Changfa and Huirong Group are progressing The Anderson, an 84-apartment project on Anderson Street.

Develotek recently secured approval for a 101-apartment tower on Pacific Highway, while Tian An LFD received the green light for Hammond Greens, its apartment development on the edge of the Chatswood Bowling Club.

Commercial property developer FiveX is also making its move into the residential market. Last month it lodged plans for a 61-storey tower with 490 apartments, which, if approved, would become one of the tallest residential buildings in Chatswood.

Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/first-look-fivex-targets-chatswood-skyline-with-61-storey-tower-after-north-sydney-plans">First look: FiveX targets Chatswood skyline with 61-storey tower after North Sydney plans</a>

Aqualand is also expanding its development pipeline following the launch of its luxury residential brand, Aqualand Prestige. The developer has delivered a string of high-end apartment projects across Sydney's affluent suburbs over the past decade, most recently AURA by Aqualand on Walker Street in North Sydney.

[smartcode_project:default project_id=30959 project_image_fid=292863]

It has since quietly assembled its next wave of projects.

Earlier this year Aqualand launched Boronia in Roseville, a boutique 111-apartment development on Larkin Street. The project is one of the first significant apartment developments to launch in the suburb ahead of what is expected to become one of Sydney's most active new housing precincts under the NSW Government's Low and Mid-Rise Housing reforms, which allow greater density around train stations.

[smartcode_project:default project_id=152095 project_image_fid=373685]

The developer has also lodged plans for a two-tower, 413-apartment development on Herbert Street in nearby St Leonards, further strengthening its presence across the Lower North Shore.

Beyond that, Aqualand remains behind the final stage of Barangaroo, where plans will deliver a five-hectare mixed-use precinct comprising new homes, retail, hospitality and community facilities, alongside a new Metro entrance and more than two hectares of public open space, completing the Barangaroo precinct.

Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/central-barangaroo-development-takes-big-step-with-concept-proposal-approval">Central Barangaroo development takes big step with concept proposal approval</a>

Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/first-look-aqualand-joins-st-leonards-apartment-party">First look: Aqualand joins St Leonards apartment party</a> 
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First look: Aqualand pushes ahead with Chatswood apartment tower as SSDA lodged for Archer Street

Mass timber is becoming an increasingly popular construction material in apartment developments, but Adelaide developer <a href="https://www.apartments.com.au/developers/otello">Otello</a> is taking the approach a step further.

At its new <a href="https://www.apartments.com.au/new-apartments/flowe-bowden-18-gibson-street-bowden-sa-5007">Flowe Bowden</a> development, the exposed cross-laminated timber (CLT) structure isn't just about reducing the building's environmental footprint. It also forms the foundation of a broader wellness strategy, influencing everything from indoor air quality and natural materials to the way residents move through and experience the building.

The 115-apartment mixed-use development, designed by Melbourne-based architecture practice Fieldwork, will occupy a prominent island site opposite Bowden Village Reserve, combining one, two and three-bedroom apartments with retail and a dedicated wellness destination.

[smartcode_project:default project_id=152022 project_image_fid=375528]

Wellness isn't confined to a gym or shared resident facility at Flowe. Instead, Fieldwork embedded the concept into the building itself.

The development has been split into two residential wings connected by a naturally ventilated central breezeway, replacing traditional enclosed corridors with open-air walkways that improve natural light, encourage cross ventilation and create more opportunities for neighbourly interaction.

"Rather than treating wellness as something that only happens on the ground floor, our response integrates it throughout the building, which led us to ask what it really means to design a healthy building," Fieldwork Director Quino Holland said.

[smartcode_project:default project_id=152022 project_image_fid=375531]

The building's architecture also reflects Bowden's industrial heritage. The lower podium references the area's historic brick and sandstone buildings, while the upper levels transition to exposed CLT, allowing the timber structure to become a defining feature throughout the apartments and shared spaces.

The use of mass timber sits alongside a range of sustainability initiatives, including a fully electric, gas-free design, rooftop solar and a targeted 5 Star Green Star rating.

[smartcode_project:default project_id=152022 project_image_fid=375524]

Inside the residences, the focus remains on natural, durable materials. Blackbutt engineered timber flooring, exposed CLT ceilings, porcelain surfaces and warm timber joinery create a calming interior palette, while low-VOC finishes and responsibly sourced materials have been selected to improve indoor air quality.

Kitchens have been designed as the centrepiece of each apartment, featuring porcelain island benchtops, timber-look cabinetry and brushed steel tapware, with layouts that maximise natural light and ventilation.

[smartcode_project:default project_id=152022 project_image_fid=375530]

The more traditional interpretation of wellness comes in the form of Level Eleven, a two-storey wellness club spanning the ground floor, mezzanine and first floor.

The facility will include a gym, yoga and reformer Pilates studios, Finnish and infrared saunas, magnesium hot and cold plunge pools, and dedicated recovery spaces. Unlike many residential wellness facilities, Level Eleven will also operate commercially, allowing the broader Bowden community to access the venue while giving residents exclusive membership benefits.

The ground floor has also been designed around everyday living. A café overlooking Bowden Village Reserve will activate the street frontage, while a bike workshop with tool storage, co-working space and dog wash has been incorporated to support daily routines and encourage interaction between residents.

"Flowe brings together my two biggest passions, creating places and creating healthier lives," Otello founder Daniel Harris said.

"We wanted to create something Adelaide hasn't seen before, a genuinely healthy building, where the way you live is lifted without even trying."

Flowe is positioned directly opposite Bowden Village Reserve and within walking distance of Bowden Railway Station and the Adelaide Entertainment Centre, placing future residents just minutes from the Adelaide CBD while remaining connected to one of the city's most established urban renewal precincts.

[smartcode_project_cta:default project_id=152022]

Otello launches wellness-focused Flowe Bowden with Adelaide-first mass timber apartment design

Construction Market

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EXPERT OBSERVER
Dwelling approvals declined 1.5% in October, in line with the consensus forecast but with both the headline and detail a touch better than we had been expecting.
Approvals remain locked in a clear downtrend but this month's update eases some of the downside risks that had been emerging around non high rise approvals in particular.
Recall that the September approvals report showed a solid headline rise (+5.5% revised up from +3.3% previously) that concealed a much weaker underlying picture.
All of the monthly gain was due to a jump in Vic high rise approvals – excluding this segment, approvals were down 7.5% (since revised to –4.5%).
Moreover, that weak underlying picture followed a sharp 14% drop in approvals over July-August.
Going into the October update we were expecting headline approvals to reconnect with this clear downtrend. Instead the decline is somewhat milder and detail mixed rather than weak.
Private detached house approvals rose 2.7% in October with the previous month's fall pared back to from –2.7% to –1.5%.
The decline in this segment from June's peak is now a much milder 3.5% vs the 7.3% fall presented in September.
Private units posted a 4.8% drop, continuing a volatile run: +13% in September; –23% in August; and –7% in July.
Most of this is due to ‘high rise’ approvals which dropped 40% over July-August, spiked 60% in September and dropped back 40% again in October.
Forward indicators continue to point to a weak outlook for this segment, site purchases in particular.
For the month of October, a strong rise in 'medium density' unit approvals provided a material offset, this small segment up about 25% in the month, reversing a similar sized decline in September.
All states recorded declines in October, Vic showing less of a pull back than might have been expected (–2.6%mth, –13.7%yr) given last month's high rise spike; and SA notably weaker (–17%mth, –24.8%yr).
Across the other majors: NSW approvals were down –0.5%mth, –16.5%yr; Qld –1.1%mth, –13.3%yr; and WA –0.1%mth, –23.1%yr.
The total value of renovation approvals edged up 0.5% but are still down 10%yr with the trend showing no real direction.
The total value of non res building approvals rose 4% but were still down 25%yr.
While trends remain very difficult to discern, recent weakness has been most pronounced across offices.
By state, weakness over the last 3mths has centred on Qld and WA rather than NSW and Vic.
Overall, the October approvals report is weak but not quite as weak as we had feared.
While the detail eases some of the downside risks to the outlook our view remains that residential building will see a significant 5% decline in 2019.
MATTHEW HASSAN is a senior economist at Westpac
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Matthew_Hassan-HHWHptmrw4

Australian dwelling approvals, another soft month: Matthew Hassan

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The future is looking "very bright" for global construction markets with synchronised activity upswing in Australia, the USA, Europe, Japan and China, according to a new survey.
Turner &amp; Townsend’s International Construction Market Survey 2018 shows that of the 46 global markets examined, 21 expect to warm up, 23 are set for stability, and only two are likely to cool.
Sydney and Melbourne are considered hot, Brisbane is lukewarm and Perth is cold. 
Global construction costs are expected to rise 4.3% in 2018, following a 4.1% increase in 2017.
New York repeated its ranking taking the number one spot for the most expensive place to undertake construction activities.
San Francisco, Hong Kong, Zurich and London subsequently followed. Sydney was again positioned at number nine, with Melbourne ranked at 19, Brisbane placed at 21 and Perth at 23.
Sydney construction costs are expected to increase by 4% in 2018, the same as 2017.
Melbourne will rise by 2% to 4%, Perth is expected to increase by 1.5%, and Brisbane to ease by 1% to 3% overall for 2018.
Global construction costs are set to rise 4.3% in 2018, following a 4.1% increase in 2017.
The survey analyses input costs, such as labour and materials, and charts the average construction cost per square metre for residential, commercial, industrial, retail, hotels, hospitals, schools, car parks and airports (buildings only).
 <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/2018/5/23/Crane%20and%20building%20construction%20site%20against%20blue%20sky_Med%20Res.jpg" alt="">
Gary Emmett, economist for Turner &amp; Townsend, says 2018 was set to be the strongest construction year that we have witnessed since the Global Financial Crisis (GFC), which is boosting optimism.
"The GFC cast a black cloud over the industry for many years, however that has now lifted," Emmett said.
"Since the GFC, growth amongst the major advanced economies averaged half the pace of the previous 10 years.
“Synchronised global growth looks set to increase the construction industry activity, driven by Australia, the USA, Europe, Japan and China."
The Middle East and UK are notable exceptions to experiencing an upswing. 
He added that Federal and state governments in Australia are planning to invest over $50 billon in significant infrastructure projects over the next decade, including Western Sydney Airport. Major road and rail projects are ramping up, boosting the local economies and demand for trade skills.
"Tunneling is a focus. Sydney Metro Rail is delivering 15 kilometres of tunnels, and Westconnex, a mostly underground 33 kilometre roadway, is underway. 
"Melbourne is starting the West Gate Tunnel project and Monash freeway upgrade, while Queensland is delivering Cross River Rail.”
The report noted Sydney and Melbourne are witnessing strong growth in financial services, and real estate, with 17% jobs growth during the year. Unemployment has fallen to 5.4%.
Sydney residential construction spend is up by 47% since the 2016 international report.
Over the same period construction costs are showing an average 11% increase, while non-residential construction (hotels, offices and retail) activity was up by 11%.
The Melbourne residential construction market grew by 17% during the same period, showing an average cost increase of 4%, while non-residential market activity rose by 17%.
Brisbane’s residential construction market increased by 12%, showing an average cost upswing of 9%. Non-residential market activity also grew by 12%.
Perth’s residential construction market fell by 31%. Construction costs were also down by 2% and non-residential construction activity fell by 8%.
<a href="https://www.propertyobserver.com.au/images/2018/5/23/CONSTRUCTION%201.jpg" target="_blank">Click 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/2018/5/23/CONSTRUCTION%201.jpg" alt="">
<a href="https://www.propertyobserver.com.au/images/2018/5/23/CONSTRUCTION%202.jpg" target="_blank">Click 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/2018/5/23/CONSTRUCTION%202.jpg" alt="">
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j.ballantyne1990-6AQqhLzZaK

Global construction activity the strongest since GFC, says new survey

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GUEST OBSERVER
The non-residential construction sector enjoyed better times in 2017, with more projects proceeding, a point that we have highlighted previously.
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.
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.
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.
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.
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.
Building approvals in 2017 advanced across each of the broad segments, with public projects and offices punching well above their weight.
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.
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.
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.
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.
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. 
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.
Andrew Hanlan is a research analyst at Westpac.
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Non-residential construction set to advance in 2018: Westpac's Andrew Hanlan

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GUEST OBSERVER
Whilst looking at job ads on Seek recently, I noticed one of my industry peers running a job ad for a “Tier 1 developer.” It got me thinking; what does that actually mean?
Having worked in recruitment for the development industry for 2 years and talking with a range of industry contacts, categorizing developers is not that easy. Building and construction is simpler, with the idea of Tiers relating fundamentally to turnover and the job size the business can handle. In loose terms, builders can be classified as:
• Tier 1: $1B plus turnover, jobs $250m+ • Tier 2: $200m turnover, jobs $50m+ • Tier 3: $50m turnover, jobs $10m+
So what are the rules for classifying developers, and do they exist? Can you classify them by the revenue they generate, value of acquisitions, or the related construction costs? Maybe total debt and how well the banks know them? Most people have the perception that the large corporate companies (Mirvac, Frasers, Stockland and Lend Lease) would be classified as Tier 1 developers simply due to the size of the company, but this does not consider project sizes or values, and how successful their projects are.
Looking at Victoria’s residential market (the market I cover), if the turnover or revenue of projects is how Tier 1 developers are classified, then companies like Yarra Park City/OSK Property (Melbourne Square - ~$2.8Bil) and Glenvill (Yarra Bend - ~$1.2Bil) would clearly be up there. But these companies are not that large in terms of their team sizes, and don’t necessarily have a high annual turnover, thus may not fit the typical Tier 1 description.
Tier 1 contractors are geared to only take on projects above a certain constructing cost. Why? Because their overheads need big jobs to support their machines. Developers on the other hand, are not governed by project size, but by the equity they have, the funding they can obtain and, the return hurdles they need to achieve.
Taking all this into account, anyone who tells you that a developer is a ‘Tier 1’ may be using a catchy phrase without having thought about what this means.
My final suggestion on Tiers is as follows:
• Tier 1: Owner or CEO has appeared in the Fin Review looking pensive and strategic, most likely owns a supercar or yacht. Knows the Planning Minister on a first name basis. • Tier 2: No longer has to work but trying to be bigger/better/shinier than the people they went to private school with. • Tier 3: Currently “consulting” whilst raising equity/begging to get the first acquisition away. No fingernails left in case they have to tell the wife they may need to sell the house.
What do you think?
Jordan Ralph is a recruitment consultant for the Kingfisher Recruitment and can be contacted <a href="https://www.kingfisherrecruitment.com.au" target="_blank">here</a>.
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jchancellor-FAypfDUnLy

Do Tier 1 developers even exist? Jordan Ralph

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Construction costs in Australia remain stable compared with the rest of the world with Sydney the most expensive place in Australia to build, according to a new survey.
The International Construction Market Survey 2017 analyses input costs – such as labour and materials and charts the average construction cost per sqm for both commercial and residential projects.
Sydney was at number nine, with New York taking the number one spot for the most expensive place to undertake construction in 43 markets covered by real estate consultancy Turner &amp; Townsend’s International Construction Market Survey 2017. Sydney was at number 14 in the last survey.
The survey ranked Melbourne at 20, Perth at 21, and Brisbane at 22.
Turner &amp; Townsend Australia &amp; New Zealand managing director Anooj Oodit said the report showed globally construction costs are reasonably well contained with Australia showing little variation, apart from the Perth market which is a cold market with falling costs (moving from 21st to 18th spot). 
“The improving commodity prices are set to help resources countries like Australia benefit from higher commodity export royalties. This in turn will provide confidence to invest especially in further infrastructure,” said Oodit.
“Low interest rates have encouraged strong growth in domestic apartment construction markets in several regions worldwide, especially Australia. Looking forward, Brexit and the election of President Trump may add some uncertainty to some construction markets, however, the Australian government is committed to its $75 billion infrastructure spend over the next 10 years.”
The recent announcement by the federal government to build Badgerys Creek airport and the Inland Rail project would be a boost to the construction market in Australia, he added.
The report emphasises the need for further improvements in productivity. Twenty-three of the 43 regions, including Australia, indicated that they were experiencing skill shortages as the workforces age and fewer school leavers enter the construction labour force.
The surveys over the past three years (2015 – 2017) highlight there has been a massive upswing in residential apartment construction on the East Coast which is now coming to an end, except in Sydney. This period has seen construction costs rise a little above general inflation. Construction costs on average are up 5.5 per cent over three years, whereas price inflation is up only 3.5 per cent over three years.
Sydney residential construction spend has grown by 54 per cent since the 2015 international report. Over the same period construction costs are showing an average 9 per cent increase, while non-residential construction (hotels, offices and retail) activity increased by only 6 per cent.
The Melbourne residential construction market grew by 34 per cent during the same period, showing an average cost increase of 4 per cent, while the non-residential market activity fell by 1 per cent.
Brisbane’s residential construction market grew by 50 per cent, showing an average cost increase of 8 per cent. The non-residential market activity fell by 2 per cent.
Perth’s residential construction market fell by 13 per cent, construction costs increased by 1 per cent and non-residential construction activity fell by 18 per cent.
“The question is what comes next after the apartment boom? Some of the shortfall will be met by major infrastructure projects including Badgerys Creek, Cross River Rail, Inland Rail and Snowy Mountain Hydro phase 2. The time is now ripe to capitalise on the apartment boom slowdown and use the resources (cash and labour) to boost Australia’s infrastructure projects and keep the economy strong.”
“Global construction costs are set to rise by 3.5 per cent in 2017, reflecting steady growth in the global economy but also increasing labour shortages and low productivity within several key markets. The main exceptions to this rule lie in commodity reliant markets where falling prices for raw materials have contributed to a cooling in construction cost inflation,” Oodit said.
Major investment is needed to address the growing construction skills shortage which is becoming acute in many international markets, increasing labour and project costs, said the report.
“Against a backdrop of rising cost inflation and labour shortages, policymakers, contractors and clients in all markets need to tackle low productivity, embracing innovative technologies, new methods of construction, as well as using data and better programme management to boost input,” Oodit concluded.
Turner &amp; Townsend has 97 offices in 41 countries and over 4,200 employees.
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jonathanchancellor-7SQnKwU6yx

Sydney leads Australia in construction costs, climbs to no. 9 globally: survey

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<img src="https://counter.theconversation.edu.au/content/69277/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1">
GUEST OBSERVER
Construction accounts for one dollar in seven of Australia’s total economic activity, making this week’s construction numbers a big deal.
Australian residential construction fell 3.1 percent on a seasonally adjusted basis to A$17.6 billion in the quarter to September 2016. Non-residential construction, which is about half the size of residential, fell 10.9 percent. Engineering construction was down, too, leaving the total construction figure down 4.9 percent to A$46.1 billion.
Construction is at its lowest level since 2010. This will surely factor in to upcoming RBA rate cut decisions, especially if they maintain their recent belief that prudential regulation has dampened concerns about property bubbles in Sydney and Melbourne.
In the US, the flash purchasing managers’ index rose to 53.5, well ahead of expectations. A reading above 50 indicates an expansion, so this was certainly good news for the US economy.
The US Federal Reserve minutes were keenly anticipated and pored over by market participants. Most reporting I saw focused on the following quotation:
“Most participants expressed a view that it could well become appropriate to raise the target range for the federal funds rate relatively soon, so long as incoming data provided some further evidence of continued progress toward the Committee’s objectives.” 
That was interpreted as the Fed being quite likely to raise the Fed funds rate by 25 basis points at the December meeting.
Well, perhaps. Elsewhere in the minutes we got some insight into the data the Fed is looking for to prove it is meeting its objectives. The minutes noted:
“Although real GDP growth in the third quarter was appreciably above the slow pace of the first half, it had been boosted in part by transitory factors … Growth of consumer spending had slowed from its brisk pace earlier in the year, residential investment had fallen again, and business fixed investment had remained soft … Participants noted that economic growth in many foreign economies remained subdued, and that inflation rates abroad generally were still quite low. Some participants observed that important international downside risks remained … Participants expressed uncertainty about how long the [labor force] participation rate could be expected to continue rising.”
Translation: the labour market, consumer spending and inflation data better come in pretty strong for the Fed to hike. They copped a lot of criticism for what subsequently looked like a premature hike last December, and they won’t want to make the same mistake again.
It is also clear that there is a real division on the committee, with members in one camp gunning for a hike right away, and those in the other expressing cautious optimism. Fed Chair Janet Yellen is in the latter, and that matters. Whatever happens in December, the next set of minutes will be fascinating reading to gain further insight into how the two camps are interacting, and if there is any shift in group membership.
Vital Signs typically focuses on Australia, the US and China, plus whatever country is causing global economic trouble that week. This week we introduce a new feature, G20 country focus, where we pick a G20 country not regularly featured. This week: France.
<h2>G20 country focus: France</h2>
The French economy, with GDP of US$2.5 trillion, is the ninth largest in the world (adjusting for purchasing power). GDP growth was a fairly anaemic 1.2% in 2015. Inflation in the year to October 2016 was a dangerously low 0.4%, with the economy risking a deflationary spiral.
Unemployment sits at 10.0%, though the youth unemployment rate is a shocking 23.9% (compared to 6.8% in Germany).
In terms of public finances, France is running a budget deficit of 3.6% of GDP, although it has been steadily bouncing back from a level of double that since the financial crisis. Government debt to GDP is 96.1%, which is slightly above the Euro area average of 90.7%.
What should we make of those figures? Since France is a big and important part of the Euro area, and that area is struggling, is is not surprising that France is too. Almost all those figures are concerning – especially because France does not issue its own currency – but not at panic station levels.
Youth unemployment, however, is. Although there are European countries with worse levels (like Spain), having nearly a quarter of young people out of work can lead the social compact to be gravely stressed. First, there is the phenomenon of “hysteresis”, where being unemployed makes it hard to become re-employed. And that is particularly problematic in a rather inflexible labour market like France’s. 
So even if the budget is slowly recovering, debt is manageable and growth is OK, having millions of disaffected youth roaming the streets is never a good idea.
Richard Holden is professor of economics and PLuS Alliance Fellow, UNSW Australia and author for The Conversation. He can be contacted <a href="https://theconversation.com/profiles/richard-holden-118107" target="_blank">here</a>.
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Construction slump points to cooling economy

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The luxury villa project Qualia in Queensland’s Sunshine Coast suburb of Pelican Waters has won the Queensland MBA state housing and construction award.
Builders Ryan Designer Homes are the developers for the waterfront townhouse project.
Qualia won in the low-rise multi-residential housing class, adding to a recent regional award in the same category.
QMBA judges said workmanship and attention to detail were the deciding factors in Qualia’s win with each of its six waterfront townhouses offering light-filled living zones, two-car storage and two covered outdoor areas.
Private jetties offering residents a direct link to the aquatic playground of Pelican Waters, including direct deep ocean access, was also a winning feature.
Located within the 810 hectare Pelican Waters master-planned residential community at Caloundra, Qualia's prices range from $685,000. 
It is just a short distance from the future Pelican Waters Town Centre, Caloundra CBD, beaches and schools.
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