<a href="https://www.apartments.com.au/developments/collingwood-vic-3066">Collingwood</a>’s northern edge continues to sharpen its reputation as one of Melbourne’s most compelling cultural precincts, where established creative institutions, leading hospitality, and independent fashion converge within a tightly held inner-city neighbourhood.

Set within this evolving pocket, <a href="https://www.apartments.com.au/new-apartments/derby-street-by-milieu-collingwood-4-derby-street-collingwood-vic-3066">Derby Street by Milieu</a> draws on a location that balances proximity to some of the inner north’s most influential destinations with the quieter, tree-lined character that defines the streets edging East Melbourne. Positioned just moments from both Smith and Gertrude Streets, the address sits on the periphery of Collingwood’s cultural core, offering immediate access without the intensity of its busiest frontages.&nbsp;

[smartcode_project:default project_id=145576 project_image_fid=355945]

Gertrude Street, in particular, anchors the area’s identity as a destination for Melbourne’s leading food, art and fashion. Within a short walk, venues such as Marion, Cutler &amp; Co, IDES and the Builders Arms Hotel define a tightly curated dining scene with enduring citywide appeal, complemented by a strong fashion and retail presence including Havn, Le Labo and a selection of independent boutiques.

Nearby, institutions such as the Australian Print Workshop and Collingwood Yards sustain a constant rhythm of exhibitions, performances and creative output, embedding art and culture into the everyday fabric of the neighbourhood.

Smith Street, running parallel, extends this offering with a broader mix of hospitality and nightlife, maintaining its status as one of Melbourne’s most active inner-urban strips.

Beyond these high-energy streets, the immediate surrounds shift in tone. Derby Street and its neighbouring blocks are defined by low-rise heritage terraces, mature trees and a settled residential character. Fitzroy Gardens and Carlton Gardens are both within walking distance, alongside the Royal Exhibition Building and Melbourne Museum, bringing together green space and cultural landmarks within minutes of home.

[smartcode_project:default project_id=145576 project_image_fid=355985]

Connectivity remains a key advantage. The CBD sits within easy reach, accessible by tram along Smith Street in around 20 minutes, while also remaining close enough to walk or cycle, supported by the inner north’s established bike network.&nbsp;

<a href="https://www.apartments.com.au/developers/milieu-property">Milieu</a>’s long-standing connection to Collingwood underpins the project’s approach. With a portfolio that includes multiple nearby developments across Bedford, Peel and Napier Streets, the developer brings a sustained understanding of the area’s character and evolution. Derby Street continues this trajectory as a collaboration with award-winning Melbourne-based <a href="https://www.apartments.com.au/architects/studio-bright">Studio Bright</a>, marking the practice’s first multi-residential project in the inner north and reflecting a shared focus on design integrity and contextual response.&nbsp;

Balancing connection to the neighbourhood with a sense of seclusion and refuge, Derby Street by Milieu embodies a level of care and craft typically reserved for single residential projects. Comprising 22 residences across six storeys, with two to four-bedroom configurations priced from $1.15 million, the project is currently under construction with completion expected in late 2027.&nbsp;

[smartcode_project_cta:default project_id=145576]

Joel Robinson

Derby Street by Milieu, at the top end of Collingwood

A rare new apartment development in the Blue Mountains is the latest in a string of State Significant Development Applications submitted through the New South Wales Government's Housing Delivery Authority.

A total of 270 apartments are being proposed for the 1.16-hectare site at <a href="https://www.apartments.com.au/new-apartments/blue-mountains-alpine-retreat-142-150-narrow-neck-road-katoomba-nsw-2780">142–150 Narrow Neck Road in Katoomba</a>, a parcel of land adjoining the former Katoomba Golf Course. The site was acquired for $3.85 million in 2021 by private developer VDM Prime.

The apartments, comprising a mix of serviced apartments, affordable housing, and traditional build-to-sell product, will be spread across eight low-rise buildings, along with a separate building for a new restaurant, arranged around a green spine that leads to a central park.

<img alt="Katoomba" data-entity-type="file" data-entity-uuid="ee9a2072-f465-44f1-9076-80c9c8ecca02" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-04-22%20at%209.20.21%E2%80%AFAM.png?VersionId=4bT0vQ7j_syl65wcrJmHGm3m5pTvwrY_" />

The Urban Design Report by Atlas Urban says the vision is to create a "contemporary mountain precinct that is responsive to its escarpment landscape, heritage character, and community context."

"The development responds to the current housing supply and affordability challenges identified under the NSW Housing Delivery Authority (HDA), providing a balanced mix of standard, affordable, and short-stay accommodation," the report noted.

"By introducing a variety of dwelling types and tenures, the proposal supports intergenerational living, local workforce retention, and greater housing choice within an area constrained by topography, heritage, and environmental protections."

Of the 270 units proposed, 52 will be serviced apartments. The remainder will comprise 54 studios, 121 one-bedroom units, 39 two-bedroom apartments, and four three- to four-bedroom residences.

<img alt="Katoomba" data-entity-type="file" data-entity-uuid="f704508d-1bdf-4170-955d-0256652402a7" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-04-22%20at%209.56.49%E2%80%AFAM.png?VersionId=TzarHMO4gTOsblCqsbJQkvMqWj9nu2Au" />

The Design Report, by VDM Prime and appointed architect Antoniades Architects, noted that the design seeks to "provide a built form outcome that is highly considered, respectful and contextually fitting, whilst contributing positively to an evolving precinct."

"The site offers three frontages and the opportunity to provide a meaningful interface with the public domain environment. the design has a sympathetic response to streetscape and the green open space that surrounds the site."

The report states that the buildings are broken up to establish an appropriate bulk and scale, emphasised through height and setback strategies and defined through articulation that supports the transition of precinct granularity. It also notes that a central communal open space is established through the site to enhance the social dynamic and access to amenity, including natural ventilation and light to the apartments. The east and west frontages receive solar access during the morning and afternoon, whilst maximising views to the green open space.

The site adjoins the recently completed Yarrabee Katoomba development, comprising 24 duplexes that were completed last year and sold through McGrath Projects.

The relatively new Housing Delivery Authority pathway established by the NSW Government allows developers to submit State Significant Development Applications through a fast-tracked state process, effectively reducing reliance on local council approval pathways and aiming to accelerate housing delivery across New South Wales.

First look: Nearly 300 apartments pitched on former Katoomba golf course site

In Melbourne’s established inner east, the qualities that define a traditional house, width, height, and access to open ground, are increasingly difficult to replicate in new residential developments. Larger landholdings are scarce, and with them, the ability to create apartments that extend beyond compact, internalised layouts.&nbsp;

In <a href="https://www.apartments.com.au/developments/kew-vic-3101">Kew</a>, where the residential fabric is shaped by generous setbacks and mature tree canopies, that tension is especially visible.

<a href="https://www.apartments.com.au/developers/ricdanic-investments-pty-ltd">Ricdanic</a>&nbsp;is bringing forward a boutique collection of just 13 residences across two buildings at 9–11 Wimba Avenue, Kew. Comprising six homes at No.9 and seven at No.11, the project sits on a quiet, tree-lined street just off Cotham Road.&nbsp;

Each apartment has been planned with a level of independence more commonly associated with standalone dwellings, balancing privacy with the efficiencies of apartment living.

Architect Chris Idle, who has been practising for over two decades, says projects like this don’t come along often.

“There are very few opportunities to do these kinds of developments in leafy, established suburbs,” he explains. “To get this level of amenity, natural light, and architectural freedom in such a setting is extremely rare.”

[smartcode_project:default project_id=140755 project_image_fid=366267]

The internal planning begins with width. Living areas extend beyond five metres, allowing furniture, circulation, and glazing to sit comfortably within the same zone without compression. Ceiling heights shift from three metres through to five metres in select areas, changing the sense of scale as you move through the apartment. These proportions are paired with double-glazed windows and fully electric systems, balancing volume with performance, supported by a 7.2 NatHERS energy rating.&nbsp;

From the main living space, the apartments open directly outward. Large sliding doors connect to private gardens averaging 125 square metres, with some residences also incorporating balconies of around 60 square metres. Rather than acting as secondary outdoor zones, these areas sit flush with the internal floor level, extending the usable footprint of the home and allowing for multiple modes of use, whether for quiet daily routines or larger gatherings.&nbsp;

The landscape, led by <a href="https://www.apartments.com.au/landscape-architect/john-patrick-landscape-architects">John Patrick</a>, reinforces this relationship. Across the site, 23 different plant species have been introduced, including a mix of native and established varieties, arranged to maintain privacy while preserving sightlines and light access. Gardens are not treated as decorative buffers but as functional extensions of the apartments, shaped to accommodate movement, seating, and informal use over time.&nbsp;

[smartcode_project:default project_id=140755 project_image_fid=366265]

Architecturally, the project draws from Kew’s historic residential language. Handmade bricks by Krause define the exterior, grounding the buildings within the material palette of the suburb, while interior finishes, stone, timber flooring, and restrained detailing, continue this approach internally. Architect Chris Idle describes the intent as long-term rather than stylistic: “We wanted it to feel timeless.”&nbsp;

This emphasis on durability extends to how the buildings are accessed and secured. Entry is managed through keyless systems, with a double-gated basement incorporating number plate recognition for vehicle access. Each residence is paired with a private lock-up garage accommodating two to three cars, alongside storage, while all entry points are monitored continuously. These measures sit alongside EV readiness and fully electric infrastructure, aligning the project’s operational systems with its long-term design outlook.&nbsp;

The setting remains central to how the development is experienced. Located within walking distance of Kew Junction and close to established schools including Carey Grammar and Xavier College, the address benefits from existing infrastructure while maintaining a residential quietness that is increasingly difficult to find at this scale.&nbsp;

Construction is being delivered by <a href="https://www.apartments.com.au/builders/sinjen">Sinjen</a>, with a 10-year structural guarantee, with completion targeted for mid-2027.

[smartcode_project_cta:default project_id=140755]

Inside Wimba Ave, Kew’s garden-scale residences designed for space and permanence

High-end Sydney developer&nbsp;<a href="https://www.apartments.com.au/developers/abadeen-group">Abadeen</a> has secured approval for one of its latest Mosman projects, one of the first developments approved by Mosman Council under the NSW Government’s Low and Mid-Rise Housing Policy.

The approval represents an important step in delivering well-considered housing next to established village locations on Sydney’s Lower North Shore, in line with the intent of the Low and Mid-Rise zoning framework. 
&nbsp; 
There are currently 13 other sites lodged within Mosman Council under the policy, with <a href="https://www.apartments.com.au/new-apartments/27-29-heydon-street-mosman-nsw-2088">Heydon Street</a> among the first to receive development consent. 
&nbsp; 
Abadeen Founder and Executive Chairman Justin Brown said the project reflects a considered and appropriate response to its planning context. 
&nbsp; 
“This approval demonstrates how carefully considered, design-led development can align with the objectives of the Low and Mid-Rise Housing Policy," Brown said.

"The scheme has been designed to respond sensitively to its village setting, with a built form, scale and level of amenity appropriate to its local context. The determination reflects a balanced and considered planning outcome, with Council recognising the capacity for this site to accommodate additional housing within a well-located and established precinct.”

<img alt="Abadeen secures first approval under low and mid-rise housing policy for Heydon Street, Mosman" data-entity-type="file" data-entity-uuid="92811ce3-02e8-44fc-996e-c61ae039bd3e" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Heydon%20Street%20Aerial.jpg?VersionId=ZHJVuWQT64QcdrFJx963pFWFzTX7lI2I" />

The Heydon Street approval followed extensive consultation with Mosman Council, with Abadeen working closely with Council throughout the assessment process.

The approved scheme comprises 27 residences, with only four per floor, creating a low-density living environment. The building will include four half-floor penthouses designed to capture views across Middle Harbour, Sydney Harbour and the surrounding district.&nbsp;

The project is expected to appeal to downsizers and owner-occupiers seeking house-like proportions, privacy and local convenience. There will be north-facing Middle Harbour views from the second level upward. It is also just a flat 100-metre walk to Bridgepoint Shopping Centre, which will appeal to owner-occupiers and in particular downsizers.

Two-bedroom residences are expected to be priced from $1.99 million when sales launch later this year. 
&nbsp; 
Joe Tack, CEO at Abadeen, said the outcome reflects both the quality of the site and the broader need for well-located housing. 
&nbsp; 
“This is a highly considered site within a highly established local setting, offering elevated views and strong connectivity. The project has been designed to respond to that context, delivering a scale and quality of housing aligned with both the planning framework and evolving market demand.” 
&nbsp; 
“This approval is particularly significant in the context of Mosman, where new housing supply has historically been limited. While it represents the first approval of this scale in Mosman to be achieved in over 50 years, it is importantly located within a well-established residential location, in close proximity to the established commercial amenity of Spit Road and Mosman Village. It reflects strong confidence in Abadeen’s approach to design, delivery and community integration, while contributing to the delivery of much-needed housing in a highly constrained market.”

Abadeen has an established track record across Sydney’s Lower North Shore, with recent completions including KOYO in Crows Nest and ENSO in Neutral Bay.

In Mosman, Abadeen recently completed The Hampden, with Mosman Residences on the corner of Spit Road and Clifford Street scheduled for completion later this year. Construction has also commenced at Burran Residences, comprising three full-floor ultra-premium homes positioned just 50 metres from Balmoral Beach, with residences expected to achieve prices in excess of $20 million. Two further projects are also progressing through planning within the local government area.

Abadeen secures first approval under low and mid-rise housing policy for Heydon Street, Mosman apartment development

Apartment developer <a href="https://www.apartments.com.au/developers/martello">Martello™</a> is one of the latest entrants to the Gold Coast development market, with its debut project set to be one of the most boutique offerings on Chevron Island in recent years.

Martello has unveiled <a href="https://www.apartments.com.au/new-apartments/aere-chevron-island-18-20-mawarra-street-chevron-island-qld-4217">Aere Chevron Island</a>, a collection of 33 large-scale two-, three-, and four-bedroom apartments across an 18-storey building on Mawarra Street.

[smartcode_project:default project_id=143932 project_image_fid=367517]

The developer has placed a strong emphasis on wellness, briefing architecture firm Raunik Design to embed this philosophy into the project. It is a direction <a href="https://www.apartments.com.au/developers/martello">Martello™</a> plans to carry through its future developments along the coast.

<a href="https://www.apartments.com.au/developers/martello">Martello™</a> has positioned Aere as a continuation of its human-centric development approach, with a focus extending beyond amenity to the fundamentals of layout, natural light, and spatial planning. Promax Construction has already been appointed to deliver the project, with construction expected to commence in the coming months as part of the group’s broader expansion into South East Queensland.

Rising above the low-rise fabric of Chevron Island, Aere’s design emphasises generous internal proportions and uninterrupted outlooks, with residences oriented to capture coastal, skyline, and waterway views. Interiors prioritise open-plan living, with large-format glazing and carefully considered transitions between indoor and outdoor spaces.

[smartcode_project:default project_id=143932 project_image_fid=367508]

The upper levels are dedicated to larger-format homes, including four-bedroom residences designed as half-floor offerings. These layouts prioritise separation between living and sleeping zones, along with increased privacy and storage, features more commonly associated with detached housing than traditional apartment product.

Aere’s private resident amenity spaces centre on wellness. A rooftop level will incorporate a heated swimming pool, sauna and spa, alongside a residents’ lounge, dining areas and barbecue spaces, while additional shared facilities throughout the building include a gym and yoga area.

The inclusion of both social and quieter retreat spaces reflects a broader shift in higher-end apartment design on the Gold Coast, where developers are increasingly responding to owner-occupier demand for buildings that support long-term living rather than short-stay use.

[smartcode_project:default project_id=143932 project_image_fid=367814]

Aere is positioned within walking distance of Chevron Island’s village centre along Thomas Drive, as well as the HOTA cultural precinct via the Green Bridge, connecting residents to parklands, galleries, and event spaces.

For <a href="https://www.apartments.com.au/developers/martello">Martello™</a>, Aere represents the first in a series of planned Gold Coast developments, with the group also exploring opportunities in other coastal precincts, including Kirra and Palm Beach.

The move north comes as sustained population growth and infrastructure investment continue to reshape South East Queensland, with developers increasingly targeting boutique, design-led projects in established lifestyle pockets. Aere’s relatively small scale and emphasis on spatial quality position it within this emerging segment of the market.

[smartcode_project_cta:default project_id=143932]

Martello™ enters Gold Coast market with wellness-led Chevron Island development Aere

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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